Small factories make big impact

Malcolm Wheatley analyses the successful strategies of two surprise award-winners

THIS YEAR'S Factory of the Year awards have thrown up a couple of surprises - and served to highlight a lesson for managements everywhere.

The overall winner of the Management Today/ Cranfield School of Management award was the Bonas Machine Company, a manufacturer of weaving machinery, from Gateshead, Tyne and Wear. The Best Small Company was WH Smith & Sons of Sutton Coldfield, West Midlands - which is nothing to do with the high street retailer but supplies high-quality, low-cost plastic injection mouldings to some of the toughest customers in UK industry on a just-in- time basis. According to William Pecover, the publishing director of Management Today magazine: "Although these factories will be unfamiliar to many managers, they are both privately owned, intensely entrepreneurial and dedicated to manufacturing excellence." So tough was the competition for this year's coveted award, fought out among more than 240 contenders, that some of the best- known names in British manufacturing failed to make it onto the shortlist. The awards were presented by Ian Lang, the President of the Board of Trade, at the Savoy Hotel on Thursday.

The Bonas Machine Company's commitment to excellence has led to it gaining half the world market share in its field and achieving a level of exports in excess of 90 per cent of the factory's output - as well as clocking up a consistent growth record of around 20 per cent a year. The factory produces electronic Jacquards: these are the devices, in textile terminology, that give basic weaving looms the ability to make patterns and designs in fabric while it is being woven. The greater the number of "picks" that the loom is able to handle, the better the definition of the pattern: the company's expertise lies in packing its patented electronic hooks into hugeJacquard machines that can be mounted on almost any make of weaving loom.

The machines are complex: a blend of mechanical engineering, software and electronics. Bonas's latest Jacquard machine contains 6,272 of the all-important hooks - in addition to 95,000 other components - and can operate at more than 500 picks a minute. Close links with production are firmly fostered in the factory's design office: a large sign reminds every one of the 21 software and mechanical engineering design engineers that 85 per cent of manufacturing costs are incorporated at the design stage.

WH Smith & Sons is also impressive. Again privately owned, it does not believe in having a personnel department, has a policy of buying production machines with cash in multiples of 10 or so to enhance flexibility and designs, and builds its own robots. It also gives employees an hour a week off to learn anything that the local college can teach, and prospers by serving some of the most demanding customers in British industry - including Black & Decker, Honda, Nissan, Toyota, and Rover. Others among this year's winners, such as Toshiba's air-conditioning plant at Plymouth in Devon and Shell Lubricants' centre at Stanlow, Cheshire, seem to have been able to combine big-company standards with small-company fleetness of foot. Initiatives such as "continuous improvement" call for more than just polished presentations and a concentrated drive to cut labour costs, said judges, who included representatives from Management Today, Cranfield, the DTI, the CBI, and the Institute of Electrical Engineers. They speculate that large organisations' "big factory" culture gets in the way - impeding progress with administrative tangles and a decision-making pro- cess riven with turf wars. "Initiatives such as continuous improvement call for more than just slick slide presentations and a single-minded focus on paring down labour costs," said a judge. "A factory must serve as an extension of the business's overall strategy and not operate in isolation from it." In factories that failed to do as well, the judges observed an unhealthy separation of marketing and manufacturing, with neither function playing to the other's strengths.

While consultants and management gurus have been speculating about this for some time, this year's award represents hard evidence that smaller factories are fast, focused and efficient.

To win, each factory completes an in-depth 14-page questionnaire, with more than 100 questions. This is followed by a day-long audit visit by the panel of judges, probing in detail factory-floor efficiency and operating practices.

This year's winners have more than entrepreneurial flair, a judge commented. "They have tackled the process of improvement with gusto, identifying areas of weakness, determining sensible strategies to follow, and intelligently harnessing the skills of their employees."