Scaling the stairway of global growth

Posted on 6 Jul 2010 by The Manufacturer

Mark Young hears how a split manufacturing strategy in the UK and China is enabling this stair lift manufacturer with rapid growth and unmitigated commitment to customer care.

A commonly held view is that when manufacturers move production out to low cost economies it spells trouble for UK industry. Not so, according to Minivator’s head of UK manufacturing, Jonathan Horne.

Eighteen months ago the Kingswinford, West Midlands-based stair lift and independent living products maker opened a manufacturing base in Shanghai. There it now makes all of its main standard straight stair lift products while its bespoke round-the-corner lifts are still made in the UK.

“A lot of people have this view that the UK is going to lose all of its manufacturing jobs to China,” says Horne. “But in our case, because it a cost down initiative, it enables us to be competitive enough to continue to produce in the UK. The cost savings we achieve through basing some of our manufacturing in China means all of our operations have enjoyed growth, UK included.”

Take the seats for the stair lift as an example. Previously these were all made in house at the Midlands factory but since the China factory opened 18 months ago they have been made there. These standard seats are still configured to order here in the UK though, with various power options colours and other features customised, and because of the growth the company has had through being more competitive, more people now work in the seat department in the UK than they ever did before the China factory opened.

In fact, the company didn’t make one single redundancy during recession and it is numbers are still growing; a recent recruitment drive saw the payroll swell by 20. The UK site is now over 340 strong.

Furthermore, the factory has recently been extended by 10,000 square feet and in July a further 21,000 square feet will be added. Combined, these double the shop floor space. The company is the number two stair lift company in the world in terms of volume and while the overall market is growing by around seven per cent each year, Minivator is growing by 25 per cent. Seven years ago, revenues were below £10m per annum; this year the company will turnover more than £50m. That gives a strong indication of the way this company is headed.

The company’s supply base has not suffered either, even though Minivator has looked to source a higher percentage of parts from China.

“We have been working with the UK suppliers to ensure that they can support our manufacturing strategy in China and benefit from the growth in volumes we’ve achieved in the same way our UK site has by changing the business model.” By and large the supply chain has prospered through this approach particularly where they supply niche non standard components or large awkward parts which are difficult to forecast or ship economically; only one of Minivator’s key suppliers fell victim to recession.

“For our bespoke products we are committed to a three day lead time in manufacturing and that means we will always manufacture in the UK,” says Horne. And the company has a particular vested interest in doing the very best by its domestic customers; the UK market is the largest in the world, largely due to the National Health Service. “It is far more expedient and cheaper for the NHS to keep people in their homes than to put them into care or hostels,” says global purchasing manager Garrie Hall.

Money and logistical benefits aside, keeping people mobile and comfortable in their homes is woven into the very fabric of this company. Personal care for its customers is the culture that drives Minivator and it was born out of its very foundations. In the 1980s the owner of a machine tools company, based in Dunstable, had an elderly relative who was faced with an all too familiar heartache – no longer able to scale the stairs, the beloved family home looked set to be sold. As with many engineering entrepreneurs this need gave birth to a design and a bespoke stair lift which solved the problem. The product was received so well he then decided to take this creation to the market. That culture of care and innovation continues to define what Minivator does.

Today, the company considers itself a field leader in stair lifts and it makes in excess of 25,000 a year.

To ensure the culture of customer care is shared among all employees, everybody within the company from the chief executive to the secretaries, the operations director to the shop floor, all accompany a service engineer once every year on an installation of a product in somebody’s home.

“We do this so that everybody meets a customer whose life they’re improving,” says Horne. “Be it the screw they put into a seat or the product they’ve surveyed – whatever it is they do within this organisation – they meet the actual person that they are helping and see for themselves how much it means to them.”

One of the family
Further to this end, the company employs Auntie Doris. She doesn’t command a salary because she’s only a cartoon but she’s one of the most important members of the team. Doris stands for Dialogue and development, On plan, Right first time, Innovation, Service. She therefore encompasses everything the company stands for and she represents the end user – everything that Minivator does is aimed at delighting Aunty Doris.

“We think of her as our own Auntie Doris and we treat her as we’d want one of our family members to be treated. If everyone adopts that ethos we can only help improve quality and service for all our customers.” The company has even extended the Auntie Doris philosophy out to its suppliers. Says Hall: “When supplier deliveries are failing, we say: ‘you’re not delivering a component for a lap top or a spare part for a car whereby not delivering it could cause disappointment. If you don’t deliver a part for a stair lift or the quality isn’t right, it might mean someone has to crawl up the stairs or can’t get up at all.’ We’re all making a difference to people’s lives and we want that difference to be a positive one.” Testament to its commitment to innovation, Minivator’s UK R&D team is 20 strong – a healthy percentage of its total payroll – and is one of its fastest growing departments.

It is happy to open its wallet for machinery to support that innovation too. A new CNC bending machine and the company’s first handling robots for a new round-the-corner lift product amounts to a total investment of over £350,000 for one individual cell. In 2008, the company won the Black Country Award for Innovation in the World for its business approach to innovation.

Minivator sustains a level of around 25 apprentices across the business, including on the shop floor, in logistics functions, and as installation engineers. Over 90 per cent of these are given full time positions at the company when their programme ends. The company sees staff progression as part of it duty as an employer. Horne regales: “Two years ago I employed a temporary agency worker on a very basic assembly line function. He had a very good attitude to his work and he progressed very quickly. Before long we had taught him pretty much every assembly line function and we took him on permanently. He then moved into the machine shop and learnt how to manufacture products there. About 18 months later he successfully applied for a job as an installation engineer, went through his training and he’s now qualified and he’s installing lifts – all within two years.” This commitment to staff and skills has also led to success in another area Minivator now considers itself an expert: problem solving.

“About two years ago we had a quality forum and we looked at how we could improve both the Aunty Doris experience and business performance,” says Horne. “What we found is that there were only a few Associates that could actually work on problems and corrective actions and truly identify the root cause using recognised tools and techniques.” The company decided to roll out a training programme across the whole group, inclusive of everywhere, à la the installation policy. The training involved working on real projects related to individuals’ own areas of work and 57 problems and potential solutions were identified, 37 of which were deemed feasible in a cost versus quality analysis and were acted upon.

These included 5S implementations around the site, process improvements within manufacturing cells and best practice within logistics.

Notably, the Kanban operation was overhauled and optimised.

From this project Minivator Problem Solving was established (MiPS). It has now evolved into a standardised company wide operation which every employee is taught in and engages with as part of their job responsibilities.

The problem solving training has continued to inspire many quality improvements but it was the opening of its China factory and its new supply base that really drove the need to focus on getting its quality right first time. The well proven ISO9001 quality standard used in the UK was rigorously copied into the China factory from the outset.

When the China factory had its first audit in October last year it registered zero non-conformities. As for the UK, in quarter four 2009 the cost of quality, amounted to 0.4 per cent sales.

So, far from another nail in UK manufacturing’s coffin, outsourcing manufacturing to a low cost economy has allowed a British company and its supply chain to grow at a time when most were just looking to sustain their businesses and many did not survive.

“Manufacturing is a global industry but that doesn’t mean the UK should suffer,” concludes Horne. “In fact, it’s quite the opposite. By seeking cost efficiencies we have shown that we can make our products better and faster and our business can grow as a result.”