Conducted the evening of 15 Sep 98 at Dutton's facility on the Sunderland Industrial Estate, Sandy, Bedfordshire, England.
Our thanks again to all those who joined us Tuesday evening at Dutton Engineering in Sandy. Although the MD, Ken Lewis could not be with us, our hosts, Tina Mason and Mike Nash, offered us excellent insight into the Dutton Way of continuous improvement and quality management.
Below are highlights from the presentation:-
Dutton Engineering has an excellent reputation as sub-contractor fabricating high quality steel, especially stainless steel, into cases and fixtures for a variety of manufacturers including Domino UK Ltd. Dutton Engineering emphasizes the need for their workers to have the correct attitude toward work, workers, customers, suppliers -- with the right attitude, they can teach them the rest. One important part of that attitude is that work should and can be fun.
The firm's quality journey started in 1984 with BS5750 but really got going in 1989 when they borrowed some critical ideas about continuous improvement (Kaizen) from a major customer. Ken Lewis was able to visualize where he wanted to go with continuous improvement and share that vision with his workforce.
Our plant tour was given by shop floor people and we were able to observe procedures and processes and speak with workers. Dutton likes to help their people develop. The person handling IT was a shop floor worker who was interested in computers (and had developed skills in that area himself). Our briefers worked in the training department (which Dutton now offers as a service to other companies to generate money) but Tina was the business manager before and Mike worked on the shop floor.
The first 100 Kaizen proposals cost just over £ 2,400 -- but the benefit was £ 160,000. They were on their way. Not everyone believed in eliminating waste and firefighting, breaking down barriers, changing the way they looked at work and each other. Those who would not change were identified, helped if possible and let go as needed.
In 1989, Dutton T/O was £ 1 million with 39 people (13 indirect labor). Work in process was £ 250,000 . The overdraft was LARGE and lead time was 6 weeks.
Today, the T/O has doubled to £ 2 million with only 35 people (only 4 indirect). WIP is down to £ 80,000, a credit balance in the bank and lead time ... 8 hours.
What a way to change a competitive position.
Teamworking is one of the secrets of their success. They inverted the pyramid with the bosses supporting the workers. They flattened it of course. Customers and shop floor workers started talking with each other -- helping to make the product the customer wanted.
Work cells became self-managed (there are four cells at present) with a cell coordinator for linking into admin and management where needed. Each cell owns certain products / customers, workers a multi-skilled -- everyone is on salary and there are no job descriptions. Orders are channeled directly to the appropriate cell where the workers determine their own schedule that will meet the date required by the customer. They are flexible and work with their customers to avoid unneeded expense of expedited or single item shipments.
Kanban and JIT were much in evidence. Domino Ltd. can place orders in the morning for shipment that night. Modular fabrication techniques allow for last minute changes to be made on CAD/CAM drawings, metal to be cut, punched, welded and formed to the proper shape and cases to be packed and shipped next morning for arrival at Cambridge on time. The plant is particularly proud of its ability to stay at the top of their customers <On-Time delivery> league table.
Suppliers are schooled in the Dutton way and work with Dutton in partnership -- or go elsewhere. Suppliers fill certain small and bit parts and pieces as needed using a Kanban system.
No time clocks as such -- but time is important. The amount of time available determines what work can be brought into the shop. Dutton Engineering determined some time ago that they had to switch to annualized hours. They gained the agreement of the work force once management showed how they would be paid the equivalent of their old base salary plus part of the historic overtime worked. But the company would workload based upon 1770 hours a year per worker with a reserve added of 160 hours for sick days, rework, medical appointments and the like. (A bonus based on 20% of company profits is shared out each year among the workers.)
The work week was also adjusted to four days 0730-1745. Friday because a core overtime day -- but if the work was done, one did not have to come in for overtime. So three day weekends are common and workers actively work to avoid the need for Friday working. Of course during peak times of the year, the annualized hours system allows for them to work Fridays to keep up the pace the customers demand.
So the Dutton journey has been incremental since 1989 when Kaizen took hold. Multi-skilling, multi-functional teams with a customer focus followed. Then came annualized hours, cells, the Business Excellence Model and Processes.
Dutton is expanding and recognizes the critical nature of this moment. They are hiring 14 new production people and will have to switch back to a more formal training method from the mentoring, one-on-one approach they have found so successful. The firm recently purchased the larger facility next door and should be in it by year's end. Their goal is a T/O of 5 million Sterling in three years -- and in 2020 to be a World Class Company.
In closing Tina Mason emphasized the need to take a holistic view -- and to that end she recommended we pay close attention to the Business Excellence Model.
This summary was not nearly as good as Tina and Mike's presentation, so they agreed that if we wanted to put together another group next year -- for an initial or follow-on meeting, we would be welcome.
For further details on Dutton Engineering's quality journey, see Ken Lewis's book How to Transform Your Company and Enjoy It! .
Revised 9 January 1999