With four new models secured for manufacturing in the UK, is Nissan Sunderland proving that British manufacturing is on the up?
If the national media is correct, then UK manufacturing is struggling to be competitive and shedding jobs at an alarming rate. But the Nissan factory at Sunderland is not following the plot of any scare stories.
Over the past year the plant has secured four new models – the all-electric Leaf, the new Qashqai and two brand new vehicles. These will boost the number of employees at the plant from the current 5,500 and mean it will be operating at full capacity for the first time.
The latest model, an as-yet unnamed hatchback, marks a return to the medium family hatchback market for Nissan, an area in which it has not traded since the demise of the Almera in 2006.
The car will join the Juke and Qashqai, which have proved great commercial successes for the Japanese firm. The new C-segment contender will be more a traditional hatchback and will compete with established favourites the Ford Focus and Vauxhall Astra.
It will be built alongside the recently announced new B-segment model, the Nissan Invitation, which is largely based on the Invitation concept car unveiled at the Geneva Motor Show in March.
Nissan has invested £127m in the Sunderland plant in preparation for the new model and has even introduced an extra production shift, meaning the facility will be capable of 24-hour production for the first time in its 26-year history.
"Globally, Nissan has a bid process where plants have to bid for new business and obviously depending on what the model is and depending on who you are bidding against, we can bid against plants in Mexico and India or mainland Europe," Kevin Fitzpatrick, vice-president and plant manager at Sunderland explains. "We place business on what we call total delivered cost, which is the total cost of the vehicle as sold to the dealer.
"We are looking at parts costs, in-house manufacturing costs and logistics, and within that there is depreciation. So if you are a big new expanding plant then you have got very high depreciation. This plant is 25 years old and most of the kit is either depreciated or close to depreciated, so that gives us a bit of an advantage. We are also quite productive as well and it depends where you are sourcing your parts from. So when you put that all together sometimes we can compete with them and sometimes we can't."
Last year was record-breaking for the plant. Aside from celebrating its 25th anniversary in September, it set a record for the number of cars built in a year at 480,000 and hit a record number of direct employees at 5,400.
But productivity is the key for the facility, now and in the future, and in that the plant has an enviable record of improvement. Looking back to 1999, there were 5,000 employees who between them produced 271,000 vehicles. Last year just an extra 400 employees churned out 209,000 more cars.
"What we call it at Nissan is the two never-endings – there is the never-ending quest to improve and the never-ending quest to use problems as an opportunity to improve things," Fitzpatrick says. "It does become difficult after some point, when you have made a breakthrough, you do think, where are we going to go from here?
"There is always somebody in the organisation who comes up with something. We do a lot of benchmarking at Nissan. Globally, it's quite a big strength for the company because if somebody makes a breakthrough in one area, the other plants will benefit if it is transferable."
The two 'never-endings' are part of Nissan's heritage and form the heart of the Nissan Production Way that underpins everything that the company has achieved. The stated aim is simplicity itself – to improve the company's profitability and competitiveness. To this end, it has developed a global manufacturing system working towards what Nissan call a douki seisan ('where we want to be') situation. The path to this goal is drive by a culture of kaizen – or continuous improvement – to ensure they always progress towards douki seisan.
"It's important to us because it has got some basic principles, but the basic principles are that Nissan Production Way supports profit and synchronises the operation with the customer," Fitzpatrick explains. "We continually evolve it. We are always trying to think of better ways of doing things. So we keep on year by year continually evolving the Nissan Production Way as and when we find better practices.
"Within Nissan production, for example, there is a standard way for introducing a new model, everybody operates to that system, but when you introduce new models you find better ways of doing it. We make those changes, we discuss it with our colleagues at head office and if we come up with a better way, they will just transfer that across the globe. That happens quite often where a plant will come up with an enhancement and that will then become global best practice. Then that is then the new Nissan Production Way of doing that particular job."
Nissan also operates a global audit to internally rank all its operations – Global Nissan Production Way Promotion (GNPP) – and allocate a GNPP rating from 0 to 5. Nissan's target is for everybody to get to 4 by the end of next year. "It's run by the parent company, which audit the plants periodically to try and bring everybody up," Fitzpatrick continues. "So it has got a standard system with standard principles, but this doesn't stop us evolving it.
"We have got to be dynamic enough to continue to evolve. There are conferences twice a year, Nissan Production Way meetings where all the plant production directors meet globally every six months – that's where they discuss enhancements and we decide what becomes the standard. There is a lot of structure behind it. We have got the disciplines and safeguards on how to change it."
Keeping it in the company
One way that they remain on top of their game is by a rigorous benchmarking regime against other Nissan facilities, sharing productivity tips and gains in the process. Given that they are competing against these same factories for new models, that would, on the face of it, appear to be a strategy fraught with risk.
"People outside the company find that quite strange and actually some people inside the company find it strange as well, but it's the way we do business," Fitzpatrick says. "A lot of the concepts that you have seen at this plant weren't developed at this plant, but we liked them and take them further.
"You can be quite parochial if you want to and keep it to yourself, but actually no single plant has got the talent in place to be able to break through in everything. So it's part of the Nissan DNA where we benchmark. "
Aside from the benchmarking, Nissan has adopted a lot of Web-based knowledge transfer databases. Every production shop has a website where they can log ideas and develop what they call a knowledge warehouse.
Aside from the benchmarking, Nissan operates a traditional kaizen improvement programme. "We have got a whole raft of different processes for kaizen," Fitzpatrick says. "We have a production supervisor who will typically have 20 staff working for him and he will have a part of the assembly line or the body shop process. He has targets every year on how much productivity and quality improvement cost reduction he has to deliver. We will expect him to deliver some of that with his people. So it will be QC stories or two-day kaizen events where we will expect him to do some of that himself.
"Then we have what we call our IFA team, a centralised resource which does the bigger kaizen projects in the plant – those are the ones that have got a lot more engineering content. Those will be based centrally under one manager, but he will have satellite organisation in each of the main shops with engineers, technicians and kaizen staff working and they will do the bigger projects.
"The total kaizen effort is anything from someone coming up with a good idea to change a sequence of operation to engineers and technicians designing and building equipment, which is what we class as making a breakthrough."
Aside from the ancillary operations, there are two main processes – body shop and trim and assembly – which the cars flow through at the Nissan plant.
In the giant halls there are two assembly lines – line one builds the Qashqai, while line two is for the Juke and Note, but there the similarities end. What emerges from the body shop is the simple metal body. Panels are assembled, welded and sealed, then the bonnet, door and tail gate added before it is sent by overhead conveyers through to the body shop.
Automation is high in the bodyshop with teams of robots – designed and manufactured by Nissan and common to all the company's facilities around the globe – grouped into cells and positioning and welding in high-speed synchronisation.
The body passes through the paint shop where it is washed and dipped in Electro-coat for anti-corrosion protection, before several coating and high-temperature stoving operations.
Humans at work
If the assembly line was the domain of robots, the opposite is true for the trim and assembly operation. Robots are replaced by human workers, but the coordination and timing is equally impressive. In fact, time is the ultimate controller in the trim assembly line.
Line two, where the painted body-shells for Juke and Note are transformed into finished cars in 130 minutes, has 120 work stations or sequences. Every job along the line has an allotted time allowance from 30 seconds to 60 seconds. In each carefully sectioned zone, a small team of workers perform their task in a carefully choreographed routine. Automation is kept to a minimum but they are aided by all sorts of gadgets such as ergonomically designed seats on extendable arms and tool-holding arms.
All the material required is delivered by an army of AGVs and fork lift trucks – often racked to match the sequence of cars coming down the line. This sequence is set from the master control room to match production requirements, but line two sees the Note and Juke mixed in what appears to be a random order of specifications and colours, but is actually fully optimised to maximise the production speed.
Some jobs are amazingly quick; fitting the entire dashboard to a Qashqai takes just two seconds. Two secondsthat is astonishing, even considering the two workers have the help of a huge hydraulic lift. They have to collect the dash, position it and bolt it in, but the final fix is only a couple of seconds' work.
"It depends where you are in the plant," Fitzpatrick says of the automation involved. "Nissan has got a production system and its own machine tool company which designs and builds some of our facilities, so our body shops are all Nissan equipment.
"In the trim and chassis area, we try to have as little automation as possible because automotive assembly is very expensive and it tends not to be very flexible. We tend to have high levels of automation in the body shop and we focus on having basic highly flexible bits of kit that allow us to apply our productivity skills to look at direct labour material handling.
"We spend a lot of time and we do a lot of work to try and minimise material handling activities because basically material handling is non-value added."
Despite the recent success there are still a lot of challenges ahead for Sunderland, none more so than the introduction of the new models. Currently they make three models – on line one the Qashqai and Qashqai plus 2, which is a derivative. Then two separate models on Line two – Juke and Note.
"We are going to move to two models on line one and three models on line two," Fitzpatrick says. "So we have got a lot more complexity in terms of the number of vehicles and the amount of different part numbers that we are managing, making our logistics and warehouse operations more complicated."
In addition to this added complexity the volumes will increase, necessitating a third production shift on the line and hiring and training of around 700 people. The final challenge is to launch four cars in one year which has never been done before at the plant.
"We have already got line one on three shifts and we have for a few years. There are a lot of challenges with that because you don't have the maintenance windows that you used to have because we run continuously through 15 shifts from Sunday night to Friday night. If you have a breakdown in the middle of the week you don't have the opportunity to work any recovery overtime to catch up."
Amid the gloom that hangs over UK manufacturing, the north east and Nissan Sunderland is a beacon of hope. "The north-east in particular is doing really well at the minute – it is very buoyant," Fitzpatrick says. "We are the only region that has got a positive balance of trade in the UK and that is on the back of manufacturing."
If there ever was an example of rebalancing the economy, the north-east of England could be it. With a strong manufacturing base and a strong processing industry base, there is a lot of confidence in business in this part of the UK right now.