Techniques that are factory fresh

Malcolm Wheatley looks at the winners of a competition for progressive manufacturers

Van den Bergh's margarine plant in Purfleet, Essex is the 1996 Management Today Factory of the Year.

The largest margarine factory in the world, according to factory manager Neil Hufton, it produces 250,000 tons of margarine a year, including brands such as Flora, Stork, I Can't Believe it's Not Butter and Blue Band. In addition to impressing the judges with an outstanding manufacturing performance, the factory won plaudits for a wide variety of improvement initiatives.

The annual award, presented at London's Savoy Hotel last week, is organised in association with Cranfield School of Management. Previous winners have ranged from world-class factories owned by the likes of Kodak, ICL and Unipart, to last year's winner the Bonas Machine Company, a textile equipment manufacturer in Gateshead.

The competition is based on computer analysis of a 120-question entry form that probes the characteristics of each entrant's manufacturing performance. These include lead times and change-over performance, cost structures, inventory management, innovation and employee performance.

A team of judges then audits shortlisted factories to assess less quantifiable characteristics, such as their workplace and management culture, and the link between the factory's manufacturing strategy and the overall business strategy.

Such visits allow factories to showcase their core strenghts - an opportunity fully seized by this year's winning engineering industry plant, Pilkington Optronics of St Asaph, North Wales. The factory takes a startling number of technologies to their limit, operating at the boundary of what is technically possible. In the world of military programmes it is usually the case that sole suppliers, particularly foreign ones, are an anathema. Despite this, the factory is the single sole supplier of pilot's "head up" instrument displays for the US F16 fighter programme. "No one else can do what we do," says Denis Welch, the general manager.

Another of this year's impressive factories is Walkers Bradgate Bakery, a pre-prepared sandwich plant in Leicester that won the household products category.

Sandwich making on this scale, for customers such as Tesco, is deceptively complex: widely diverging components (no two lettuce leaves or tomato slices are exactly the same) need to be assembled, by hand, under conditions of impeccable hygiene. Once manufactured, the finished product has a limited shelf life and needs to be on supermarket shelves around the country by 8am the following day.

The award once again highlights characteristics shared by world-class factories. Thanks to the detailed benchmarking information produced by the assessment procedure, it is possible to pinpoint these with precision. Occasionally, even the judges have been surprised. In a report published earlier this year aimed at distilling some of these lessons, the judges confess that the chapter on human resource issues was far more important and much longer than had originally been anticipated when they started work on the awards.

The report suggests that companies which have "good" factory cultures are likely to benefit from low absenteeism rates, long lengths of service and low labour turnover. They also demonstrate a high investment in training, a relatively low number of personnel engaged in non-value added processes, and a clear focus on team working.

The report also uncovered low rates of labour turnover in winning sites. Average lengths of service were unexpectedly high, varying from seven years for electronics factories to 10.8 years for process industry factories.

Management's own role in the factory was important. There was a clear correlation between a factory's management culture and the degree of excellence that the factory exhibited - and virtually every winning factory had taken steps towards the establishment of an "open" management culture.

A collegiate style of management seems to correlate far more closely with manufacturing excellence than a style based on fear, divide-and-conquer leadership, and autocracy.

Just as intriguing was the observation that factory size matters more than might be thought.

Smaller units tend to operate more efficiently, and are more effective at implementing improvement initiatives. Factories that are part of a larger group, it was felt, would do well to adopt a "small business" mentality - a transformation in corporate culture that needs to be directed from the top.

q 'The Making of Britain's Best Factories' is available from Business Intelligence, Forum House, 1 Graham Road, London SW19 3SW (0181 544 1830).