VTL Automotive

Source: Manufacturing Digital

Date :26/07/2007 17:11:19

How VTL Automotive achieved a Lean inspired culture change

Quality, service and experience are the key words that describe the profile of VTL Automotive. James Hurley spoke to Managing Director Chris Elliott about how the implementation of lean throughout the business has yielded some impressive results

Written by James Hurley & Produced by Sean Quantrill

VTL has become one of the leading manufacturers and suppliers to OEMs of synchronizer rings and selector forks for manual transmissions, achieving world-class standards and delivering excellence to some of the most renowned gearbox manufacturers in the world.

Originally established in 1919 as Sagar Richards, VTL Automotive was acquired by French Automotive components company Group Valeo in 1997. The company was purchased in 2001 by the VTL Group and now trades as VTL Automotive. The buyout, which was led by Chris Elliott and his colleagues David Clegg and Bruno Jouan, has seen an extensive culture change at the company with some impressive and dramatic results.

Lean transformation

VTL’s manufacturing plant boasts state of the art machinery and equipment which keeps the company at the forefront of its industry, and its machining capability was strengthened by the addition to the VTL Group of TWL Precision in 2006, a company specialising in tight tolerance precision machining of complex components. Yet achieving manufacturing excellence and efficiency requires something beyond strong technological capabilities.

In light of the freedom that the 2001 management change afforded, the company began an extensive lean transformation four years ago, with the aim of satisfying the ever increasing demand for lower costs and rising customer expectations in the automotive industry.

“VTL started this process by developing the right team with the right skills that would be able to effectively roll out the implementation of lean manufacturing,” says Chris Elliott, former Operations Director at VTLA, and current Managing Director of TWL Precision. “We trained and developed a number of key people, from management to shop floor level, including direct machine operators, on the basic concept of lean. This included the typical world class manufacturing techniques of 5S and SMED as well as process flow and visual management. These are the key tools that we use.”

Elliott is well placed to oversee the implementation of such a rigorous transformation. A qualified engineer, he began his career as an apprentice toolmaker for Armitage Shanks, then part of the Blue Circle Group. He then developed an interest in the processing side of injection moulding, and began working for a large automotive injection moulding company which supplied to the electronics industry as well as car manufacturers such as Ford, Toyota and Nissan. “It was there that I started to learn the processing side of engineering. I did processing for three years while I was also doing a part time manufacturing and systems engineering degree at Leeds University,” he explains.

When a cell manager vacancy came up, he took the opportunity to combine his shopfloor experience with his education and understanding of engineering, and began to drive lean manufacturing into that cell. While a traditional manufacturing environment is organized functionally with similar machines in one area (for example, all molding machines in the Molding Dept.), cellular manufacturing operates like a series of plants-within-a-plant

“I spent a period of time in a number of cells before I was offered the production manager role within that company. I then wanted to prove to myself that I wasn’t simply a specialist in injection moulding and an opportunity came up to work for Valeo Group at the Halifax site in 1999 as operations manager.”

Elliott normally begins his implementation of lean with a rapid 5S. “This basically involves getting the shop floor tidied up so we can start to see where the waste and problems are,” he explains. “By getting small workshop groups to use visual management, we can get them to manually fill out what would normally be done electronically with PDA sheets. That’s what started the culture change and it’s a case of getting teams participating in and understanding it.”

Of course, no extensive culture change can be arrived at without a cost. “It doesn’t happen without casualties, there’s always a kickback. In every organisation I’ve worked in there have always been people who don’t want to be brought on board but it’s only a very minor proportion.”

The strategy has yielded some impressive results. “In 1999, VTL was losing money for the division, by early 2001 it was breaking even and by the time we got hold of the business in 2001 it became profitable. It’s down to applying Lean in the manufacturing process as well as looking at it as a financial and purchasing strategy,” Elliott says.

“Our productivity improved in a number of areas, including productivity of the machines and the productivity of the labour. In one area, labour productivity went up from 80 parts per man hour to 210 parts per man hour and our machine down tine in one of the sections went from an up time of 40 percent to 80 percent.”

The company believes they are already 90 percent of the way towards achieving their Lean implementation goal. Over the last four years, labour efficiency has risen by 28 percent, manufacturing capacity by 10 percent, and global internal scrap has decreased from 34k parts per million (ppm) to 20k ppm. These trends look set to continue as the company’s confidence in using Lean grows and further continuous improvement programs are introduced; turnover doubled last year to £24 million, as did the employee level to 140.

It’s a testament to the ingenuity of VTL and its commitment to its staff that despite the reduced labour requirements that are a consequence of Lean, the company has managed to retain the majority of its staff. “When we’re implementing operational efficiencies, we always think of the long term and how we can relocate and retrain the people into other processes. Some of the lines which were using seven people now operate using three but we pride ourselves on being able to relocate the people throughout the growth of the business without making redundancies.”

A global network

As automotive manufacturing is increasingly shaped by the forces of globalization, VTL Automotive recognises the importance of offering products and services in countries where its customers are based. To this end, a facility is in place in New Jersey in the US to offer just in time deliveries to the company’s North American customers. Sales and technical offices are available in both the USA and Japan, to facilitate communication and exchange of technical information between its customers and the main facility in the UK.

“We’ve got a number of key things that are changing. At a group level we know that we can’t stay as a single site UK manufacturing company. Customers are looking to tick the global box as well as the developing country box, and as a group we’ve realised we’ve got to look at being able to offer that solution,” Elliott says.

The company is in discussions about a joint venture for its synchroniser ring business with a partner in India, which will involve setting up a subsidiary in the country to work on the rings. “They are a low margin, high volume product,” he explains. “While we want to retain the technical competence in the UK, we also need to offer a more competitive process from India to will serve the Asian market.

“The UK will remain as the knowledge centre and the manufacturing base. Our strategy is to retain capacity, competencies, development work and the majority of the volume in the UK and enhance that by offering a low cost base as well. This is especially true on the labour intensive processes, where we can’t automate because of design changes. We’re also looking closely at Europe and North America, so we’ll have a global footprint that we’re looking to have in place by the end of the year.”

The company is targeting a turnover of £100 million by 2012, an impressive figure that Elliott believes can be achieved through a combination of organic growth, strategic partnering and acquisitions that can further improve the company’s strong offering of niche, high quality, value added engineering.