Thorn Lighting has improved productivity, cut waste and moved into a new factory in December 2008, without disrupting delivery. Terry Carmichael told Ruari McCallion how it was done.
The phrase ‘factory relocation’ has often had ominous overtones for UK companies but that is far from the case for Thorn Lighting, which recently moved into a newer factory in Spennymoor, Co Durham. The company was established in 1952 and, since 2000, has been part of Austrian company Zumtobel Group. Currently the factory team are following a programme to transfer product from the company’s Eastern European factory into their new site. Good news – and quite startling, when you learn that the new factory is actually smaller than the old one. There has been quite a transformation going on at Thorn. Operations director Terry Carmichaels is pretty proud of what the factory has achieved – and he has a number of good reasons to be.
“Over the past four years, we’ve reduced our customer return ppm figure by 70 per cent,” he said. “In 2003, we saw that we needed to modernise manufacturing. We initiated a lean six sigma manufacturing programme which brought radical changes to our manufacturing processes, along with a significant improvement to our business key performance indicators. Over the period we significantly reduced our floor space occupancy per line, and it became obvious our factory was too big for our needs. The factory actually became a barrier to our drive for efficiency improvement. After a few well-placed conversations with senior executives of Zumtobel Group, local government officials and property developers, the plan was made to build a purpose-built factory. The factory took twelve months to build. In nine weeks, we moved all our production from one plant to the other. We got up to full production here in January and had our official opening ceremony on February 5th. Throughout the whole period, we maintained 100 per cent delivery to our customers.”
Thorn’s customers, from developers and local authorities to electrical specifiers and contractors particularly appreciate the brand’s wide-ranging professional lighting product portfolio. Spennymoor employs around 480 people, nearer 600 if you include Zumtobel’s Tridonic Atco luminaire components business, manufacturing 7,289 different types of recessed, surface and suspended fluorescent luminaires, including emergency versions, bulkheads and never-done-before custom products. Thorn’s core area of expertise is project business, with notable schemes including Wembley Stadium and Heathrow T5, although the plant’s reliable and technically advanced fittings are also available over the counter from electrical wholesalers.
“We expect to see the benefits of the transfers in towards the end of this year,” said Carmichael. “In 2010 we’re looking to increase factory turnover. Currently the factory’s main market is the UK; 73 per cent of production is for the domestic market. A very small fraction goes to the Far East – we have factories there ourselves – and 15 per cent is destined for mainland Europe. While its production is based on core designs, variation is almost standard.
“We have production areas for customised and modified standard products,” he
explained. “Those two areas are very important. Customisation is a good way
for us to see how the market is moving; today’s customisation could be tomorrow’s standard. Custom work is about 10 per cent of our total.” That number includes special projects and one-offs. “We made a light fitting that looked like an aeroplane, for one of the colleges in the UK. Modified standards may need modified control gear, a different colour or simply a component to be added to a standard fitting.” While Thorn buys in some supplies it creates or adds 80% of value on-site.
“Our core competencies include injection moulding – we have 15 machines, ranging from 75 to 850 tonnes. Lighting isn’t just about small components. Some plastic casings, for example, can be 4-500mm in diameter.” It also has capability for laser-cutting, punching, bending, fabricating and electrostatic painting of steel, as well as punching and stamping aluminium for louvre components. But capabilities only go so far: it’s Thorn ability to capture the voice of the customer and design products and services to meet their needs.
“We have designed our factory based on the ‘voice of the customer’,” he said. “We want to provide lighting solutions as well as just light fittings.” That reasoning is behind one of the most striking features of the Spennymoor plant. Not the reception, not the delivery area, not even its efficient production area, but the Thorn Academy of Light (TAL).
“Customers can come in to TAL, receive training in lighting, speak to experts and
talk about scheme design,” Carmichael said. “We have invested in an extensive R&D department, which takes ideas, industrialises them and patches information straight into manufacturing.” In total, Thorn has invested £32m into the Spennymoor site. While a lot of that has gone on hardware, plant and machinery – such as two new lines that enabled the company to maintain production while transferring operations – the real fruits of its commitment are in the improved productivity, reduced manufacturing footprint and raised performance.
“We have five measures that the new plant enhances,” he explained. “Delivery to six sigma quality, cycle efficiency – a measure of the amount of value added in the factory, on time delivery (OTD), productivity, and environment, both internal and external.” The new site has reduced electrical, gas and water consumption by 40%. Over the past four years, Spennymoor has embedded processes for improvement, from engineering drawings through monitoring and control to finished product. It has had help from outside; ONE North-East, the regional development agency, assisted with costs of training and TBM Consulting’s kaizen breakthrough methodology.
“We’ve seen 80 per cent improvement in quality issues, 20 per cent productivity improvement and a minimum of 35 per cent reduction in factory footprint,” Carmichael said. And all this while increasing throughput. “We have had the involvement and commitment of the workforce every step of the way. We articulated our manufacturing strategy and have worked to improve our systems, delivered quality, productivity and OTD, while ensuring the voice of our customer is present in everything we do.” That’s what you could call light relief.