Jane Gray visits Spirax Sarco to witness progress on the company’s transformation initiative, Unity, and finds out how the restructuring of the organisation is bringing the company closer to its goal of minimising lead times for better responsiveness to customer demand.
Arriving at Spirax Sarco’s Cheltenham-based facilities on a bitterly cold November morning it was immediately obvious that the dynamic specialist in steam and condensate products did not share my own tendency towards winter hibernation – activity was rife.
For the last two years Spirax has been undertaking an ambitious consolidation programme for its three Cheltenham sites. The project goes by the name of Unity and, as phase one comes to a close, I visited the site to see for myself how the changes in the company’s production, assembly and R&D arrangements are releasing hidden potential for efficiency and growth.
Founded in the UK in 1956 Spirax Sarco has expanded over the years and is now part of a group of approximately 50 companies employing some 4000 staff worldwide.
Despite this expansion, however, the UK has remained very much the hub of the organisation with new factories in countries such as China, Brazil and Argentina establishing local markets but definitely not detracting from the strength of the UK manufacturing base nor the positioning of the company’s research and development expertise.
Spirax’s customer base is extremely broad as Mike Gibbin, divisional director, supply and North America at Spirax explained: “Anywhere that there is a boiler is a potential market for us. That includes public buildings, prisons, universities, hospitals. On the industrial side anywhere where there is heating and boilers involved in the production process also has huge value to us. That means beverages – for example Whiskey distilleries – processes for making pulp and paper, the pharmaceutical industry and so on. Renewable energy is an important new field.”
Across this diverse range of customers, some of which require high levels of product specification (for instance pharmaceutical companies who must have systems which guarantee clean steam) there is, however, one unifying factor: the demand for very short lead times when new or replacement products are needed. Mr Gibbin says: “If a stream valve or trap goes down out in the field the maintenance guy at that company wants the correct replacement straight away without consideration for the product complexity and variety that we offer across the board. This challenges us on speed and flexibility of manufacture.”
Boiling off the waste
The need for this speed and flexibility has been the primary driver behind the £25m investment represented by project Unity. Gibbin, who sponsors the project at board level and was hugely influential in bringing the investment about, comments: “Before Unity the way we were arranged across three separate sites in Cheltenham simply did not support our ability to meet customer needs. We had machining, assembly and warehousing dispersed across different areas and that made it very difficult for us to effectively manage lead time.” As these different areas of the business move to the new site however, the location is not all that is new. An intense focus on the visibility of material flow and the elimination of unnecessary movement waste has necessitated stepping away from traditional cell manufacturing practises, specialising in particular products, towards the grouping of like processes for the flexible manufacture of a variety of products within a single material flow. This has demanded a cultural as well as logistical and ergonomic shake-up among many long serving employees who are now expected to work in more flexible teams and to take on opportunities to up-skill for more varied responsibilities.
Largely speaking the exciting Unity project, including the re-mapping of material flow for newly integrated machining and assembly environments, has been executed using internal expertise so as to exploit existing knowledge of processes and encourage buy-in across the organisation. The core team of eight experienced managers have iteratively refined the integration of processes as more machinery and staff move from the old sites into the new customised facilities. Leading the project team and coordinating Unity’s progress with the ongoing day-to-day operations of the business is Glyn Elsworthy who joined the company straight from school and accrued 43 years experience, primarily in assembly, before becoming Unity project manager.
He explains that the new site has provided Spirax with a wealth of opportunity not only in the rationalisation of existing processes and material flow but also around new forms of efficacy: “Unity has provided a unique opportunity for the business to look at its internal operations but also at externally facing issues like environmental performance which can impact on the company’s reputation with customers and the local community. In refurbishing our building and in our new builds we have tried hard to be environmentally friendly – optimising the use of natural light and making heating and cooling systems self-regulating as far a possible. This has already saved the company more than the 10% and there will also obviously be huge savings in transport costs and cuts in emissions when all site moves are completed next year.” The impact that Unity is expected to have as it completes phase two in 2011 will increase output by 10 – 15% and cut make-to-order lead times from a current state of around 4-5 days to 4-5 hours. Gibbin says: “Unity has allowed us to quantify a massive improvement to customer service. The slashing of lead time and the creation of better flexibility in manufacture have been key to that.
Furthermore we are now using our understanding from the reorganisation of UK production to rationalise the split of products between the UK plant and our sister plant in France which produces similar product lines. This will bring a more centred approach to manufacture where each site will lead on a certain product range – a very large proportion will be the responsibility of the UK plant.” Impressively all the improvements and integration activity that has been achieved by the Unity project team has taken place without interruption to business operations.
Ian McDuff, UK supply director at Spirax Sarco, attributes this success in maintaining continuity to the close co-operation across his entire UK manufacturing team. Mr McDuff describes how each step in Unity’s progress is preceded by a rigorous planning stage “There have been so many people and areas of the business involved in Unity that it is very difficult to pick out one particular success story. A real milestone early on in the project was the temporary relocation of our warehouse off site. The move involved relocating some 350 tons of product equating to 2500 pallets, installing new racking, setting up new systems for warehouse management and the modification of all our supporting IT. It was a process which had a huge amount of inherent risk for the business and we were undertaking it early on in the project before we had the benefit of the many experiences we have gained since.
The outcome of the move was that we created a real benchmark. The planning that took place between the warehouse managers and the Unity team meant that the execution was absolutely flawless. It was a key success to have early on because it showed everyone that through detailed planning and working together we can achieve all the Unity objectives. It gave confidence.” But Spirax has not limited the scope of project Unity to only consider increased efficiency in current product lines. An essential aspect of the project and a major part of the new site investment has been given over to the establishment of a custom-built research and development facility. The establishment of this new facility has been supported and guided by work Spirax is undertaking in partnership with the Lean Enterprise Research Centre at Cardiff University. This explorative study looks to use lean thinking to improve the efficacy of the end to end design-tomanufacture process. Gibbin describes the need for change in R&D habits at Spirax: “As with the other parts of the business our technical capabilities in R&D were split across three sites. You can imagine what this meant in terms of organising and aligning R&D activities! Having everyone on the same site will bring greater value to the existing R&D skills and we are doing a lot of training and recruitment to further improve the scope of those skills.
The new site will also greatly increase our testing capacity and this was very important in the initial Unity proposal to the board.” In addition to these skill and capacity gains however, Gibbin hopes that new rigour in adhering to properly gated processes in product development will encourage thorough communication with manufacture, which will of course now be close at hand in its entirety.
Money and mouth
Walking around the new Spirax site with its cleverly refurbished structures and immaculate new-build additions it was soon obvious that the principles behind Unity were no mere lip-service for the purposes of our interview and a moment under the spotlight of the trade-press. Existing structures had been stripped back and re-clad for better insulation, no florescent lighting or synthetic air-conditioning systems marred the working environment which was undivided by cell clusters and had easy to see kanban boards which were in active use. McDuff says that the development of further visual management techniques and other lean principles will be a central part of the Unity programme throughout and beyond the completion of phase two as the project becomes a platform for a culture of continuous improvement.
Other features installed during phase one of Unity which reflect dedication to the concept of flexibility include zig-zagging network of power facilities that run overhead in the workshops and assembly areas. This enables free standing equipment and work stations to be unplugged and repositioned in the eventuality of altered demand or the need for different process flows.
In addition the assembly hall with its 10,200 locations for parts in shining new custom-made racking is particularly impressive to behold and the new picking system will play a major part in further reductions to lead times and on-time-in-full delivery to customers.
Gibbin proudly expressed the new site as “Like Grand Designs for a factory”.
Both Gibbin and Elsworthy say that the changes to working practice and location have largely had enthusiastic feedback from employees once they have had a chance to bed-in and their positivity is spreading back to colleagues still waiting to join from the old sites. Critical in gaining acceptance for the move has been the ongoing involvement of all staff in the design of the new working environment including attention to detail with regards to the positioning of staff leisure areas and facilities. Employing just shy of 300 direct workers on its new site Spirax is by far the largest industrial employer in the Cheltenham area and the company takes this responsibility very seriously.
This has been made apparent throughout the Unity project by the use of local contractors for all the building and renovation work and through close engagement with local planning authorities over site proceedings. Local suppliers who have made the project possible include Smith’s Demolition and Eesi who have provided the innovative power networking and cabling. As the project continues through phase two the need for plenty more services should be anticipated as the momentum builds toward the ambitious construction of a tunnel to avoid goods having to cross the public road which intersects the Spirax site and again cut out potential waste in waiting and any risk of disrupting flow.