Shedding workers helps put firm back in black
Aug 21 2008 by Karen Dent, The Journal
A RADICAL shake-up at a North East plastics company which included cutting hundreds of jobs has brought the business back into the black.
Nifco UK, a wholly-owned subsidiary of Japanese company Nifco Inc, boosted turnover to £28.49m in its last financial year from £22.71m in 2006 and turned a loss of £675,070 into a profit of £2.86m.
The company, which makes plastic components from door handles to bumper brackets for customers including Nissan, Ford, Toyota and Honda at its Stockton factory, has slashed staff numbers from 650 to 220 over the past few years. Director Michael Matthews said: “We have addressed quality problems, we have addressed efficiency and we have addressed head count and training.
“Four-and-a half years ago we had £10m stock and now we hold only £1m stock.
“We had a business that had no over all direction and it was poorly managed.”
He said that the company has focused on training and communicating with staff, while endeavouring to improve efficiency.
“There were 27 managers, now we have nine. People were crisis managing all over the place. Most of our managers now have more than one hat. For instance, our finance manager also manages purchasing,” he said.
“We used to have 100 people in quality, we now have about eight. There were 100 in logistics and now there are 20.
“Four years ago we had a completely disengaged workforce, now we have an engaged workforce. We have actually received an Investors in People award. The foundation of what we do is people.”
The business, which this year won two plastics industry awards, has also looked closely at the quality of the products it produces and Mr Matthews says Nifco UK now has “world class standards”.
He said: “Four years ago, efficiency was 35-40%, now it’s 80-90%. For every part we produced, we were literally throwing one away.
“We had 100 quality concerns a month that’s down to single figures. The parts per million with defects is down to single figures.” That has helped Nifco UK win £12m of new business in 2007 and £3m more in the year to date, the majority of which will be manufactured in Stockton.
“We are bucking the trend really. Other companies throughout the UK, independent or mid-sized, have disappeared. A lot of manufacturers are struggling. We have a very clear strategy but it is hard work,” he added.
Nifco UK has also linked up with Nifco in Poland to produce some products in order to remain competitive with other suppliers.
“We can’t always produce products at the right price in the UK. Poland has low manufacturing costs so we can retain customer value,” he said.
“Our business plan and strategy is based on continuous improvement.”
