A major coach and bus manufacturer was considering closing one of its manufacturing sites in the UK as it was not performing; it was a loss making site; quality was poor, and it was market contracted by over 20%. Pressure was coming from the company’s joint investors who perceived that there were inefficiencies and over capacity across its operational sites in Europe.
The company engaged Explic8 to review its operations and provide a road map to avoid site closure.
The quality of output had slipped significantly while costs increased, and customers were becoming frustrated. The site was set up to produce both coaches and buses but was doing neither well.
The site was sprawled over 600k ft2, comprising several buildings. Part-built vehicles were being towed between buildings to complete the manufacturing process, exposing them to the elements and creating significant inefficiencies.
In addition, every vehicle was taking up to 20 weeks to build and each one was a loss-maker as they had been costed on a superseded design that gave them the ability to produce 1200 vehicles annually, but this was no longer the case.
It was clear that a radical shift was required to give the company any hope of retaining the site. However, with a ‘died in the wool” unionised employee base, workers had historically benefited from powerful union control. This dominance created an environment that was not conducive to change.