Business Excellence at Marine Projects, Plymouth

by Phil Robinson (BPIC) - Comments to : phil@bpic.co.uk
URL : http://www.bpic.co.uk

Could there be any more glamorous luxury purchase than a custom built yacht? No expense spared, the best design and construction complemented by designer fittings and furnishings? This kind of wealthy indulgence is a popular dream for would-be lottery winners. But looked at from the other side, it has all the makings of a manufacturer's nightmare. Low volume, high value, a multitude of options, (in fact virtually unlimited) and some of the most demanding individual customers in the world.

Jargon Warning If this case study uses terms with which you are unfamiliar, you can look them up in the Jargon Buster at http://www.bpic.co.uk/jargon.htm. For more details see Business Excellence (ISBN 0-952-8885-05) by Phil Robinson.

Add to this the complexity of a product which requires top skills in engineering and construction along with quality craftsmanship in carpentry, plumbing and interior decorating to name but three and you can understand the difficulties involved in achieving a reputation as a world class supplier.

Marine Projects in Plymouth has done exactly that. Since its inception in 1965 when three friends including David King, now the company's Managing Director, built and sold their first boat, the company has grown to become the acknowledged leader in its class.

Despite increased challenges from home and abroad and the severe effects of the recession on luxury products, it continues to grow. Establishing high standards and continuing to improve them faster than the competition can catch up is no easy matter but it is one in which Marine Projects is determined to succeed.

Chris Gates, Production Director explains, "As with many industries, recession dramatically changed our trading environment. We had to control our own production processes more closely and improve the responsiveness of the whole supply chain, and quickly. In the last four years all but the biggest and most efficient suppliers have gone to the wall.  Regulations on performance, health and safety have escalated and the previously reliable home market has come under a great deal of pressure. We decided to implement a manufacturing and business control system and achieve BS 5750 accreditation, not for the kudos of a badge on our notepaper, but to install a basic discipline and customer focus which we knew must become our priority if we wished to survive".

Marine Project's original single site business had by 1990 expanded. It now comprises three geographically separate sites each responsible for a different stage of production that takes the boat from design and specification through construction and assembly to its final sea trials.

Although each boat is unique there is a selection of basic models on which the eventual finished product is based. These range from a 3lft Moody sailing boat which retails at around £55,000 to the largest and most opulent ocean going yachts which set their owners back anything up to three quarters of a million pounds.

Making the move from a manual to a computerised system requires an enormous amount of work to specify bills of material, routings, supplier and customer details, and total inventory data. It also represents the most traumatic changes in working processes and behaviour. At Marine Projects, an environment where everyone did their own job in their own way, and no formal procedures existed, it was a daunting task.

Marine's Projects's first action was for the entire management team to attend a Top Management Course run by Mike Salmon's MRP Ltd and following that, to have Salmon come into the company and help them establish the foundations for a new way of running the business.  Following this a multi-discipline project team was formed, called the Blue Print Group to reflect the nature and priority of its activities, to draw up a Blue Print Plan of how the company would operate after the changes were achieved and define why and how this should be accomplished.

The requirements for success at Marine Projects are fascinating to Mike Salmon. "Implementing MRPII principles in this type of industry is very different," he says. "The challenge is to retain all the individual skills and workmanship along with the unique design features and quality finishing required to produce a made to order, hand crafted, luxury item, built to demanding engineering specifications, whilst simultaneously controlling costs and inventory, streamlining production processes, increasing responsiveness and maintaining the highest levels of customer service." Salmon's experience in this environment gained during his extensive work with Rolls Royce Motors was a major benefit to Marine Projects.

The next task for the Blue Print Team was to select a pilot site for the project. They chose the moulding factory which has the most diverse production processes. In addition to being the most complex, the area was the least efficient, but it serviced only internal customers, supplying the finished product to the final assembly site, so was a low risk start point. The customer service level from the factory was not measured, but Gates estimates it was as low as 20%. By applying MRPII disciplines this figure has moved to one consistently at 95%. A pleasing by-product has been a dramatic improvement in the appearance of the shopfloor, bringing a new aura of order and visibility, making it much more attractive to visiting prospective customers.

People who had previously shouldered the blame for shortages even though there were no bills of material, and delays, even though there were no formal production schedules, suddenly found that if they knew what job was due, then materials could be procured in time to complete it. Skilled craftsmen who had thought the new methodology would interfere with their individual style found that the provision of timely schedules and accurate information made their life easier.

In common with the luxury end of the automotive industry, the boat trade has to master the complexities of mass production, allied to reliability, quality and a range of models within which there is almost unlimited option choice. The first boat business to successfully achieve this combination will be, if not invincible, then measurably ahead of its rivals.

Chris Gates comments further. "We have taken a giant step towards that goal by implementing Sales and Operations Planning, the process from which all other procedures flow. Headed by the Managing Director this process has facilitated increased forecast accuracy, reliable capacity planning, steady production schedules and significantly improved delivery dates. Our WIP inventory has reduced, but what remains is put to better use, simultaneously reducing material shortages."

A particular benefit is the greatly improved cohesion between activities across the three sites. Progress is being made towards operating a business in which all building slots are predetermined and adhered to, so components and assemblies arrive at their next process when they are expected, creating a virtual JIT environment.

Successful SOP stabilises day to day manufacturing activities and eliminates fire-fighting, releasing management to address the real business issues such as new product introduction and the management of obsolescence both of which are vital to Marine Projects. An early benefit of the extended visibility and accurate information SOP provides is the £400,000 the company has already taken out of obsolescence.

The Blue Print Group, along with line managers and those requiring in depth education in specific disciplines required in the new company they had defined, attended the relevant external courses run by MRP Ltd. An education team headed by Anita Gruitt, drew up a plan to spread this knowledge throughout the company. Eventually, the entire workforce attended the necessary sessions to ensure they understood why the changes were being made and what their role was in implementing them. This is a long process and results are not immediately visible, but Marine Projects is already realising the benefits as people become more confident in the new attitudes and values being embedded in the business.

Chris Gates sums up progress so far. "Adopting a Business Excellence approach is an essential step for us to move with the times and maintain our market position. Improvements are beginning to be made in every area and results have exceeded expectation."

 Phil Robinson - www.bpic.co.uk   - 1st. February 1998