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Realizing competitive advantage
STUDENTS AT CRANFIELD MANUFACTURING SYSTEMS CENTRE FACED A DIFFICULT DILEMMA WHEN THEY SPENT A WEEK WITH BROMPTON BIKES HELPING THE COMPANY FORMULATE A STRATEGY FOR RAPID SALES GROWTH
By Tim Baines
Phil braced himself for another day in the factory. Four more major cities in the UK had adopted congest charging, and 132 other cities around the world had declared an interest in adopting London’s model. Moreover, petrol prices have gone up for the fourth consecutive month taking prices very close to the &1 per liter threshold across much of the UK. This all added to Phil’s conviction that Brampton Bikes was poised for massive growth.
Last year, terrorists had caused a series of major transport crises in capital cities in Europe, and Brampton’s sales went through the roof, forcing them to use most of their ‘winter’ stock of components and frames in a matter of weeks. Since then, they have been unable to create the normal stock buffer ready for the sales increase in the summer. Only last week, the last of the railway companies had declared that full-sized bicycles were not welcome on their trains, and for some time now the London Underground has adopted a similar policy. It was reported that a railway spokesperson, when pressed for a solution to the problem, suggested that there are plenty of folding bikes available, so why don’t people use them?
This very question was one that had perplexed Phil for some time. Folding bikes were affordable, and now very reliable. Demand was strong and growing fast,. The range of Brompton bikes was well proven and they had a long track record and a loyal customer base. Marketing the Brompton was the least of Phil’s worries, and yet ‘folders’ represented only 1% of all bike sales. Phil had been thinking about this little problem all the way to work, in preparation for his meeting with Alum, Susan, Andrew and Rick. “The think is,” Phil told them, “with all these change in transport policy, and more people taking to bikes and trains, we’ve only got to see an increase of the market share of folders to go from 1% to 3% and we’ve got a major problem on our hands!”
Susan, Brompton’s sales manager looked puzzled. “But isn’t this exactly what we wanted? Andrew’s vision is to have a Brompton in every household, and with all these changes in policy people will be even more interested in our bikes. It’s great news!”
“Oh brilliant, that’s all we need!” Rick said. “We can barely cope with the demand we’ve got, without 30 million households wanting one. I’d actually like to get some sleep this lifetime you know!”
Susan just gave Rick a withering look.
“Susan, you’ve right,” said Phil. “But don’t you see, with this level of potential growth, we are just not positioned to cope with demand. We already have unacceptable lead times too often during the year, and most of our production people are working overtime every day. The last thing we want is frustrated demand.”
“But that’s what makes it so exclusive,” Andrew replied, “a waiting list for our bike. Why? Because it’s the best there is. Nobody makes a folding bike like the Brompton. It’s the best quality, the best design, and long should it stay that way. No one can engineer a bike like us. The rest are just poor look-alikes.”
Alun hadn’t been with the company long. He had joined Brompton only a few months ago with engineering background, and spoke quietly but deliberately. “I can understand Phil’s concerns. The big risk here is that another large company will now take notice of this market. Andrew, I know you think our engineering is significantly better, but the competition is getting closer, and if a big organization with major financial clout decided to go for this emerging market we would be left out in the cold. For us to capitalize on this market, we’ve got to change, and change fast, and I suspect that might mean overhauling everything we do.”
Phil broke the silence.” I’ve been approached by a guy from Cranfield University who could possibly help, These people are experts at helping manufacturing businesses like us improve.”
Andrew paused for a second and then replied: “You can talk to them and get some ideas, but I still maintain that we can tackle this ourselves.”
The meeting came to a close……
A FORTUNATE MEETING
The scenario above illustrates a situation not unlike that at Brompton Bikes earlier this year. Though the true identities of individuals have been changed and exact facts have been altered to protect the integrity of the company. Brompton is a very successful enterprise, manufacturing one of the best folding bicycles in the world. The Brompton factory is based at Brentford in Middlessex, although it has very high rents, it understands the need to be close to its market. Maybe as a direct consequence, it is experiencing a significant increase in the demand for its products, The challenge it has is how to achieve this growth while preserving the unique characteristics that had helped to make the company so successful. Brompton is, however, fortunate in having an enlightened management team that understands the fact that success is about developing the value of products to the customer rather than simply reducing cost. So, rather than simply shipping manufacture off-shore to make a fast profit, the company intends to grow its UK operations at a rate that sustains business in the longer term. The demand for growth could be as significant as trebling production over three years.
This was the context when the Brompton senior management team met with academic staff from the Cranfield Manufacturing Systems Centre. Each year, Cranfield staffs undertake a wide variety of group and individual MSc projects with a range of companies. This year, sponsors have ranged from the Ford Motor Company to Coca-Cola to Woburn Safari Park. On this occasion, the meeting was to discuss the participation of Brompton in a short-term assignment, carried out over one week, with students from the Operations Excellence MSc programme.
The Operations Excellence MSc was created four years ago in conjunction with Rolls-Royce to develop the manufacturing leaders of tomorrow. The programme is delivered by Canfield, with support from the Institute for Manufacturing at the University of Cambridge, and the University of Southampton. This is now an open programme ,so, in addition to Rolls-Royce, sponsors now include BAE Systems, BOS Edwards and the Atomic Weapons Establishment. A typical student is experienced, in early-to mid-career and individual assignments, and is based on the long established Cranfield MSc in the Engineering and Management of Manufacturing systems. The taught component consists of 10 one-week modules, spread across the two years, and covering topics such as business and manufacturing strategy; supply chain factory design and technology management. Realizing Competitive Manufacturing is the last of the modules and sets out to consolidate and embed the knowledge and skills developed throughout the programme through a high-level consultancy assignment in a real manufacturing company. With Cranfield team agreed that 22 students from the Operations Excellence MSc would define a manufacturing strategy that should help them achieve their growth potential.
WORKING WITH CRANFIELD STUDENTS AND STAFF
The content of the module on Realizing Competitive Manufacture is research-led. It draws upon work at Cranfield that has been carried out through the Innovative Manufacturing Research Centre on topics such as competitive and manufacturing strategy, strategic positioning, change management and systems modeling. Hence, in the first two days of the module, the students are refreshed on lean, agile, total service, and quick-response manufacturing. They are reminded of such seminal work as that of Ford, Skinner, Hayes and Wheelwright, Shingo and Hill. This session culminates with an illustration of Stratnav. This is a Cranfield framework for identifying a strategic manufacturing improvement programme that aligns changes to manufacturing operations with the competitive priorities of the enterprise. Armed with this knowledge and a range of techniques, the emersion in the company commences.
With Brompton Bikes, the students were introduced to the case some days before the module commenced and so had an opportunity to visit high street stores to do their own market research. A typical Operations Excellence MSc programme has around 20 students. An aim of the module on Realizing Competitive Manufacture is to develop both their interpersonal as well as technical abilities. The short, consultancy-style project gives the student an ideal platform to demonstrate and further refine his or her leadership , organizational time management, and communication skills. These can mask the true capability of people. The pressure is on to perform and, once any initial apprehensions are over, the students relish the opportunity.
On the third day of the module, the students were formed into three teams and given a free- reign within the factory. They met the managers, examined the product, followed the materials, spoke to operators, videoed assembly, visited the stores and gathered a wide variety of information. After a full day at the factory, they returned to Cranfield with the knowledge that, in 50 hours’ time they will have to give Brompton directors a presentation and formal report on their proposed strategic manufacturing improvement programme.
The teams worked independently. Guided by the StratNav process, they first analyzed the product families of Brompton, established the basis on which they compete in the market place, and then benchmarked against key competitors. Needless to say, the most effective team got to know many of the cycle shops in Bedfordshire on that day.
Then, they used the StratNav process to understand how the people at Brompton really evaluate change. Not only did they establish the financial criteria, but also the softer measures that reflect the expectations of workers, managers and customers. Once complete, the student teams delved into the manufacturing system, mapping the existing capabilities, and understanding what would be needed to develop these.
Finally, armed with this through analysis, the teams identified the top five developments needed for manufacturing. In the case of Brompton, these included, for example, the formation of group technology cells, creation of a robotic brazing facility, and training and recruitment initiatives for production staff.
The presentation time duly arrived on day five-2pm on Friday afternoon. Throughout the previous two days the groups had received technical guidance by the academic team along with separate personal coaching. Similarly, they had given three interim presentations allowing progress to be monitored and had been in constant to Brompton senior management, a consultant from McKinsey was invited to give his view on the feasibility of the solutions. The teams rose to the challenge. They provided professional, complete, and concise presentations. Brompton was happy; it had invested considerable time and money, which was now being reflected back in terms of ideas and plants.
But, what about the students? Tony Cove and Simon Parker; both Rolls-Royce sponsored students, made the following comments about the module: “…..the week was very enjoyable and I was thankful to have worked with the members of the group, and had the opportunity to visit Brompton Bicycles who proved to be an exercise of auditing an organization with the aim of highlighting improvement opportunities has been one of the most beneficial aspects of the MSc programme.”
TO THE FUTURE
The Realizing Competitive Manufacture module reflects the very essence of the Operations Excellence MSc; it seeks to promote within the individual the development of advanced Knowledge and skills within the context of industrial application. Working with companies such as Brompton in the way explained here is only one example of how this is achieved on the MSc programme. This particular module is at the end of the taught component and so the purpose is mainly to refresh and reinforce earlier lessons. In this instance the students again learned that “it’s not all about Lean”; that “it’s not all about off-shoring” and that “you can still make it in Britain”. More fundamentally, their beliefs were re-aligned to appreciate that manufacturing is not just about finding the cheapest way to make something; rather, it’s about creating value for the customer.
Finally, thanks go out to Brompton for enabling this process, along with BOC Edwards, BAE Systems and AWE for supporting this programme. However, ultimate recognition must go to Rolls-Royce for its foresight in initiating the creation of this programme and so demonstrating the creation of this programme and so demonstrating their belief in the future of UK Plc.
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