Elastic Working Principles Help Rubber Industry Leader Bounce Back

Long lead times? Work in progress levels too high? Pressure on resources due to increasing volume? Short-term planning forcing high cost subcontracting? Problems such as these are commonplace throughout manufacturing industry but they can be eradicated. It takes organisational commitment and a little help. Farrel is one of the famous names in the rubber and plastics industries. Banbury mixers have been worldwide market leaders for many years, and the company also makes extruders, compound processors, calendar rolling mills and tyre-building equipment. A new management team in the late 1980's saw new opportunities and began to grow the business. But, as is so often the case, increasing turnover started to create strains on working capital and workshop capacity.

MLG consultant Ian Henderson was asked to review the manufacturing operation. He identified a significant area of difficulty as major in-house machined components where high levels of work in progress originated from the traditional view that people and plant had to be fully loaded. This had the effect of constraining capacity at the times when precise demand became known. This area became the first that the company addressed in its bid to make itself more efficient.

The whole production plan was examined to see what really had to be made in the short term. Having identified true bottlenecks against genuine requirements, the manufacturing plan was realigned with significantly reduced queue allowances. Performance measures monitoring schedule adherence were published, and soon replaced the vague aim of 'recovery' as the goal. The effect of this activity was to reduce the lead times of the major components, initially by 25%, and then by 60%; work in progress nearly halved. Subcontracting became an activity reserved for work that genuinely could be better done out of house, rather than the expensive fire-fighting measure it had become.

With the achievement of substantial improvement on the shop floor, attention turned to the computer system. Dated hardware and inappropriate software hampered close contract management and cost control. System performance was seen to be a constraint to future progress and improvement. Under the chairmanship of Ian Henderson a computer systems implementation team was set up. Key managers were fully involved in drawing up a statement of requirements, and the exercise led to the selection and implementation of a contract-specific package, further consolidating management's control of the business.

Other areas of inefficiency and delay were examined, and several causes identified. These included a bonus scheme, poor schedule disciplines, misuse of long queue allowances, over-complex process routings, and the late booking of work. Each area was considered in turn.

During this period of activity Ian worked alongside the Farrel management team on a wide variety of strategic and tactical initiatives; the incentive scheme was replaced; a new organisation structure was established to improve the management of contracts; all manufacturing methods were challenged and process routings simplified, the customer service business was strengthened; and the company's relationships with its suppliers were reviewed, and new arrangements agreed.

Despite the problems of the recession, and increased international competition, Farrel continues to make progress. This is a genuine success story, and MLG is proud to have played a part in it.