Beating the downturn
August 1st 2009 No industrial sector has escaped the recession, but the
forklift market has taken a battering across the board.
However, some manufacturers are handling the downturn
better than others, and prudent measures begun two years
ago at Nacco's Craigavon plant are helping the firm
through the turbulence. Brendan Coyne reports
Allan Little, has been plant manager at
Nacco since 1989 – long enough to
see off a couple of recessions. But
this one, he says, has been the most
dangerous. "The speed of decline is unique.
While the broader forklift market is down
50%, the IC segment is down by three
quarters, and credit problems
are a big issue."
Getting the money to
finance equipment purchases
is something of which
everyone is acutely aware.
But despite the global
financial malaise, Little is
upbeat about the future.
That's because Nacco
Craigavon began a series of
efficiency measures in
August 2007, when the
credit crunch was in its
infancy, and its effects not
fully understood.
Initially, the firm trimmed its
site workforce to 500, operating two
manufacturing shifts and one assembly shift.
Both are now working a four-day week,
which will be reviewed at the year-end. The
four-day deal was welcomed by the
workforce and its union, and Little says no
further redundancies are planned.What's
more, the fifth day is used for training, and
Little says the firm will emerge from the
recession a stronger, more capable unit as a
result.
This restructuring was enabled by the fact
that the workforce is multiskilled.With an
average age of 41 (compared to 21 when the
plant opened in 1981), all have experience of
more than one operation, and so can be
"flexed up and down the line" as necessary,
according to Little. He says the minimum
number of operations that any single
member of staff is capable of is five, with a
maximum of ten.
Because of this broad knowledge base, and
long-standing service, many of the teams
manage themselves: The supervisory layer
has been removed from all but the largest
units. This enables Nacco's continuous
improvement strategy to be implemented by
those who know their business best – the
shopfloor workers who do it day in, day out.
By way of encouragement, the firm employs
a 'Eureka suggestion scheme', which rewards
workers who come up with money saving
ideas. For every idea implemented, the
worker behind the suggestion receives two
per cent of the resultant annual savings.
Little says the firm typically saves around
£300,000 per annum from Eureka. By way of
example, he says one employee within the
stores department recently received a cheque
for £6,000.
He says the motivated, broadly skilled
workforce is the plant's biggest asset, and
enables it to face its main challenge: the high
level of customisation across a broad range
of forklift trucks. The firm manufactures
engine trucks up to 5.5t and electric trucks
to 2.0t for both Hyster and Yale.While the
most common trucks are the 2.0-3.5t IC
trucks, Little says "the most common
specification you can find represents only
around 3% of build", which illustrates just
how much customisation the market
demands. However, given that the plant is
"one of the most vertically integrated in
Europe", virtually any customisation can be
accommodated in house. As Little says,
"nothing comes to Craigavon that we can't
make. It might have happened in the '90s,
but not now."
With Little's view that the recession is
bottoming out, it will be interesting to see in
the '10s whether the finance that makes all
equipment purchases feasible returns to
some kind of normality. Should it do so,
those manufacturers with the foresight to
hone their workforce, processes and ability to
react will surely benefit. More articles from Yale Europe Materials Handling: | 
