UniPart

Source: Exec Digital UK

Date :21/05/2007 16:04:12

UniPart: How UniPart learned the route to world class

John Neill, Group CEO of the identifies 2004 as the year that marked the transition from the Unipart’s origins as British Leyland’s parts operation to a motor factor to a full service third party logistics services and consulting company operating across a range of industry sectors. Though by then it already had established relations with a number of non-automotive industry, this was the year it won a 10 year extension to its prestigious contract for a full range of global logistics services to Jaguar, increased its technology client base with a new contract with BSkyB and additional business with Vodafone and added to its portfolio of blue chip clients new contracts from Boots, Homebase, and Jessops.

Written by John O’Hanlon & Produced by Ben Weaver

The fact is that if you can provide a great service to the automotive industry you can provide it to any client in any industry, says John Neill. “When Dan Jones wrote The Machine that Changed the World he described the automotive industry as the most complex human organisation on the planet. We set out to be world class in the automotive industry, and we believe that many people now point us out as the benchmark, which is very encouraging. We have been able to codify that very comprehensive body of knowledge and apply it successfully in many other sectors of the logistics market, whether it be rail, leisure, aerospace, retail or IT.” You can’t learn supply chain management from a book, he says. It would like trying to play a concerto with nothing but the score and printed piano tutor: even if you have the talent, two other things are essential, great teachers and years of practice!

Unipart sets out to provide services to its client that will impart a great experience to them, and help them do the same for their clients. The end customer’s experience, Neill believes, is Unipart’s joint responsibility together with its client. That experience is what differentiates the client company from its competition, for better or for worse.

Death and Taxes

This is a powerful argument. Death and Taxes are said to be the two certain things in human experience, so we would like them to be as tolerable as possible. Dealing with Her Majesty’s Revenue & Customs may never be a great experience but John Neill believes that even a fairly unpopular government department, itself a highly complex operation, can benefit from the Unipart Way that has been developed and refined over 20 years as a comprehensive world-class body of knowledge rules and techniques (and much more importantly, the culture which underpins it, adds Neill).

He regrets that people remember the ‘active banana’ news reports, and the fact that the newspapers made much of the pushback from civil servants when they were encouraged to tidy up their desk space. But this is only 5S, familiar to everyone in production industries. “We have a team of our expert practitioners working in HMRC,” says Neill. “They tell me that they have sent more than 1,000 of their people to Unipart to see for themselves how the lean architecture really works. We have been working with HMRC for about a year. They would acknowledge like many government organisations that over many years they have spent hundreds of millions of pounds with consultants, promising them big improvements – and sometimes these have been difficult to demonstrate. They will, I am confident, acknowledge that working with us has been a different experience. We are two organisations working very closely together with enormous mutual respect, achieving very significant quality and productivity improvements. It is a long-term journey, building deep understanding of how to implement many of the lean thinking principles effectively.”

At the end of the day, he is confident that improved performance at HMRC will contribute to the satisfaction of taxpayers and the good of society as a whole because HMRC, just like Jaguar, Vodafone and Unipart’s other partners, is committed to continuous improvement and the removal of waste.

Reverse logistics

Unipart understands that the end customer experience is critical, emphasises John Neill. “Our commercial relationship may be with Apple, Vodafone or any other of our hi-tech clients but our true customers are the ones who use their products. If we satisfy that end customer by the speed and accuracy of our logistics we satisfy our client companies. It’s a dual approach and if we get that customer experience right, everyone wins.”

The key to this approach is the way Unipart has taken the lean principles and philosophy learned in its core automotive parts manufacturing division, and applied them to the supply chain. “If we had not implemented in the factory all of these improvements that go with the Unipart Way we would have no factory at all today.” It would, he admits, have gone the way of the overwhelming number of factories that have shut in this country. But the Unipart Way has been able to achieve unprecedented levels of speed and accuracy in complex supply chains.

Nowhere is this complexity more apparent that in the 300,000 square foot integrated logistics and handset repair centre Unipart runs with Vodafone UK on the outskirts of Nuneaton, Warwickshire. The 950 Unipart staff not only oversee the supply direct from the manufacturers of the mobile handsets themselves, but bundle them across a variety of service offerings ensuring the right hardware and software goes to the customer.

The centre also deals with what is known as reverse logistics or customer returns of damaged, unwanted or faulty phones. “The relationship with Vodafone is something we are very proud of,” says Neill. “We started that relationship by warehousing and distributing handsets for the company. Today they trust us with all of their logistics and now we are growing together in other market sectors. For example we have created from scratch the biggest handset repair and refurbishment operation in the UK, and the second biggest in Europe.”

Unipart’s proficiency in reverse logistics has also led to major contracts with large online retailers such as the fashion house ASOS.com – Unipart took over ASOS’s logistics, including it returns, early in 2006, a move that its CEO Nick Robertson said strengthened his business considerably in that year. It has now started to handle returns of the Apple iPod.

John Neill believes that reverse logistics is a key element of technology logistics because the process is crucial to end customer satisfaction. “Consumers often say that the true test of a company is the service they receive when something goes wrong with a product. Because of the Unipart Way, our employees are able to work flexibly within the processes to solve the daily headaches reverse logistics throws up. A key Unipart Way principle is that we expect our people to solve problems at their own level. This means when the inevitable non-standard returns show up they are dealt with there and then.”

It’s a principle that has been refined at the Nuneaton operation. “You have to see Nuneaton to appreciate the place,” he enthuses. “It is beautiful, and inspiring to work in!” Inspired is how he describes the unprompted action of a small group that had taken over the process for handset repair. In five days’ time they had reduced the industry standard 20 per cent. “These were working level people, not specialised engineers. They had learned the Unipart Way and had channelled it to solve problems at their own level. They went about using some of the Unipart tools to improve the customer experience and reduce the cost. This is the difference between a toolkit imposed from the top and a cultural set of beliefs of improving everything you do from the bottom up.”

Learning culture

That culture has been imparted throughout the organisation thanks largely to John Neill’s brainchild the Unipart University. Lots of companies these days talk up their training provision by calling it a ‘university’ but ‘UU’ founded in 9003 with Dan Jones as its chancellor really is different; a multi-million-pound complex of lecture halls and computerised learning centres in the heart of the Unipart group's headquarters building at Cowley, near Oxford. John Major, Tony Blair and many other government ministers have attended courses there, and Neill himself lectures regularly. Each of the company’s business divisions has become a faculty of UU: it is at the core not only of the group itself, but also of the dissemination of lean enterprise thinking to its vendors and clients and general industry. “The aim of Unipart U is to train and inspire people to achieve world-class performance both at Unipart and among our stakeholders. That is easy to say but hard to do. But we have spent all this time developing the tools and techniques, the deployment systems and the training mechanisms.”

It proved so successful that Neill soon realised that traditional courses weren’t enough: people needed to learn every day, so Mahomet came to the mountain. “We created the Faculty on the Floor in all our operations, which are like mini UUs where people can learn the elements of a particular toolkit and go out and practices that on the shop floor. As we say, they can learn at 10.00 and do at 11.00!”

Faculty on the Floor is almost the ultimate way to invest in people empowering them to go and learn whenever they need to. “It resonates with the philosophy of the company, established 30 years ago, to understand the needs of the customer better, and to serve them better than anyone else, says Neill. “The starting point is to work very hard with our clients to help them understand how they can deliver a better experience to their end customer, who pays both our salaries. Our ownership structure allows us to take a long-term view. Unipart is owned by its employees, its management and its pension fund - and a pension fund takes a 40-year view! Very few other companies are in that position.”

On the logistics side, identifying with the goals of such different clients as Jaguar, Vodafone and ASOS.com means that Unipart can change its service as fast as those goals change. Their demand may vary dramatically according to season, John Neill points out. “We need to be able to manage our people so we can meet those requirements. If a new phone comes out we know we must get it to market quicker than their competitors, because that is how they get their competitive edge.”