Treading ahead

Posted on 12 Nov 2010 by The Manufacturer

From bicycle to space shuttle, global tyre manufacturer Michelin has been building tyres to fit every application since the turn of the 20th Century. Currently ranked number two in the world, the tyre manufacturer employs approximately 109,000 people with a global turnover of Eu 15bn. Its plant in Dundee is one of its finest assets, Glen Jamieson finds.

For the last few years Michelin Dundee – the UK’s leading car tyre manufacturing site – has been fighting towards an uncertain future, without much luck in its favour.

Along with the economic crisis came competition among a European network of 18 of the 72 Michelin factories across the world to avoid a position in Michelin’s restructuring firing line, considering cuts had already been made to a fifth of the workforce. Amid the austerity of a city losing many of its major companies to the crisis, the 800-strong workforce at Dundee’s plant fought with dedication to stage an immense recovery. Already 10% ahead of this year’s forecast, the plant is working solidly towards a brighter future, and as factory manager John Reid says, “We continue to strive for excellence”.

The roads are paved with green The plant has been in Dundee since 1972. Its core focus on environmental issues in recent years has been one of the company’s greatest virtues. With an ecologically directed work ethic, it has reduced its own C02 emissions and energy expenditure greatly and its timely energy efficient products have taken key importance to an automotive market that has put environmental performance at the heart of its bounce back.

At Dundee, the company specialises in the manufacture of 13, 14, and 15- inch car tyres. Reid says they have been working on environmentally friendly products for some years now and these products are now spreading into a broader range.

“Our ‘low-rolling resistance’ tyres have two impacts”, says Reid. “They reduce the amount of fuel that the driver uses, and they help the car manufacturer reduce their CO2 emissions. Typically, a car manufacturer would spend hundreds of millions of pounds on engine developments to dip under the CO2 legislation, but now they can make a significant saving by choosing to use Michelin tyres.

So our original equipment business is picking up, as tyres go straight to the manufacturer”. This is 15-20% of output; the other 80-85% of the six million tyres they make every year is to distributors and wholesalers for the replacement market.

As the plant operates 24 hours a day, six out of seven days per week, the company has taken a holistic undertaking towards reducing its carbon footprint. “The first goal has been to reduce our energy consumption, for both the environment and our own costs. Efficiency programmes within the plant have reduced our consumption by about 40 per cent in the last 10 years.” Reductions have tackled the simple things first: better operation of the boilers which are required to generate steam and compressed air compressed, and procedures to diminish leaks.

Actions like these have an immediate impact on energy consumption.

But the foremost cost reduction and contribution to the environment is made through two operating wind turbines that were installed on site four years ago. These 2-megawatt-hour turbines cut energy taken from the grid by approximately 25-30% – this means a saving at the point of production on our electricity of around 6000 tonnes of carbon emissions, as well as a reduction in the energy bill. “It makes sense from both an environmental and business point of view,” says Reid.

“The energy being used is dependant upon the ebbs and flows of the wind – if the wind is up the turbines power the entire plant, and if the wind is down then energy is supplemented from the grid. If the plant is shut down then the energy produced from the turbines goes back to the grid.” To further improve the factory’s environmental footprint there has been extensive work on improvements in the production process that has allowed the plant to reduce scrap by 40%. In terms of the disposal of waste from the plant, the factory has achieved zero landfill through sourcing other outlets for their scrap. “This is a major step forwards for us as a manufacturing unit,” says Reid. “On a wider scale Michelin as a company works very hard on end-of-life solutions for tyres, including power and heat generation for a range of users and material re-cycling for things like fillers for road construction.”

Reinventing the wheel
There are four basic production lines at the plant running simultaneously, and the plant is currently operating at full capacity with an output of 22,000 tyres a day.

“We used to have five teams running seven days a week 24 hours all year and we took one of those teams out because the volume in Dundee wasn’t needed. This cost us about 1.2 million tyres and then the global crisis took another 15 per cent out of orders in the last couple of years – we were hit big for a manufacturing plant.” Michelin has its own version of lean manufacturing, using special tools and equipment to make the site as efficient as possible. Reid says: “There’s no magic trick to it, its just basic bottom-line manufacturing performance.” The truth about tyre making is far removed from the perception of most customers – tyre making is a complex assembly process working to very tight tolerances. The many different pieces for assembly are made mostly from rubber imported from Northern Ireland and steel and textiles imported from central Europe – with the range of materials needed to create different characteristics in terms of flexibility and wear. Meanwhile, 95% of Dundee’s produce is exported outside of the UK – the two biggest markets in central Europe are France and Germany, and a large number of tyres go out to North America. Based up to 1500 miles from market, one of the main challenges is to be cost effective and productive to compensate for logistics costs. During the economic crisis, the plant worked hard to improve the process of supply chain performance. “For a tyre plant like ours flexibility is absolutely fundamental so we have tripled the level of dimensional flexibility within the last 18 months,” says Reid. And now, for delivery to market, Dundee is top within Michelin’s European network of 18 factories – ahead of its sister companies who have the advantage of being situated within the market.

This positive achievement has come out of some difficult years at the plant where it has been in constant internal competition. Reid says within Michelin the Dundee plant is renowned for its fighting spirit and it is testament to the character of the people of the region that the plant has flourished despite the difficulties it has faced. It is by no mistake or luck that that they are the only tyres manufacturer remaining in Scotland, and the biggest in the UK, he insists.

“Coming into 2010 our workforce’s morale and confidence was low,” Reid reflects. “The Michelin restructuring has been completed and we’ve started the year on a much more positive note – more aggressive in our strategies, now we are no longer trying to survive but are striving for success.

“Our approach in Dundee has always been to be open and honest with our workforce and we communicate the good, the bad, and everything in-between. In this context our people have been exposed to a lot of uncertainty. But the more our people are aware of the business context then the more they are able to understand why we need to perform and make difficult changes.”

Power to the people
For its own part, where the staff are concerned, Michelin dedicates around 6% of its time and resources on training and development to get the understanding, ability, and business literate workforce that the company has become known for.

“We don’t have manager presence 24 hours a day so a lot of time is focussed on work methods, flexibility between posts, operational management and on the empowerment of self-managed teams.” Now, the workforce has developed to a level where they can run the plant themselves and handle eight out of ten problems through routine decision-making. Only if it’s a big problem will a manager need to step in.

“It makes them think differently”, says Reid, “they’re not just a cog in the machine. It’s about giving them the confidence and support to make decisions at the right time and as a team.” With the progression made this year in terms of improved morale and dynamics Reid says the factory is in decent shape. But there is no time to rest on laurels. “In the future there is no place for good factories; we have to be an excellent factory. We want to become benchmarked in Michelin and in tyre making. Our main challenge is growth.

“It used to be put your tin hat on, get in the trenches, and dig to keep ourselves in the game. Now we’re digging ourselves out of the trenches and we can see a more ambitious future for ourselves. Michelin won’t put money in this plant unless it’s at the top of the tree.” Accordingly, Reid describes his three-year development plan as “offensive rather than defensive.” Having come through these difficult years positively, and making a significant contribution to the environment, it would not be fanciful to expect the Dundee plant to achieve its desired excellence, flying the flag for Scotland’s manufacturing industry. A slight adjustment to the company logo should surely be worth considering for Michelin’s bosses. The image of the Michelin man flying a blue and white flag in the attire of a highland hero with windswept locks would be a more than fitting emblem.