Composite Panel Production Within The Panels Division Management Essay
The Kingspan Group is an Ireland based company that was founded in the late 1960’s as a small engineering business. The Group was initially involved in the manufacture of steel frame buildings, but has expanded over the years and now operates through four business sectors including insulated panels and boards, off-site and structural, environmental and renewable, and access floors. The company primarily operates in Europe and the US, and currently employs approximately 6,700 people, and states that its ambition is “to be a global leader in sustainable business and establish a leading position in providing ethical renewable and affordable best practice solutions for the construction sector”.
The Group’s Annual Report 2009 states that they had a difficult year, with turnover dropping 33% to €1.125 billion, and operating profit falling 60% to €62.7 million, however the management team feel they have continued to achieve a number of successes, and feel confident about the future.
This assignment however is focused specifically on the Sherburn site, which is part of the Panels Division. This plant dates back to 1947, and was bought out by the Kingspan Group in 1998. It is located in a rural area of North Yorkshire, and is approximately 30 miles away to the nearest major urban area and motorway network.
Overall the Panels Division operates across 14 locations comprising of 5 manufacturing sites and 9 sales offices. In 2009 divisional turnover was €449M. The Sherburn site contributed €79M, representing 18% of the divisional turnover. Sales were predominantly through the UK and Benelux markets. There are three product streams on the Sherburn site, and the turnover was split between Panel 65%, Structural 25% and Fabrications 10%.
Key commercial issues facing the Division include the general economy; availability of credit customers and main contractors; price erosion, as well as increasing raw material costs leading to a squeeze on both volume and margins. Significant key performance indicators are plant utilization, rejects, line speed, material variance, labour variance, and metres produced.
New Stuff Most For example Kingpsans growth although quire rapid overt the last 20 years has tended to “incrementally over time via organic growth and M & A activity ” (Quote needed) The Ifm go one to describe resultant legacy is a collection of plants that typically lack global coherence In contrast the Sherburn plant is perhaps ideally positioned for future growth as the 2 composite has always been classed as the multi product lines within the division, with the facility to produce 8 composite products. Compared to the most other lines designed for single product use, although in the 2005 to 2007 era the single product lines produced excellent contribution and output, the benefit of a muti product during the ecomonic downturn has infact been a real advantage for the future of the Sherburn lines who
Located in the enterance road into the Sherburn site is a Ward Scuffler, this farm implement was the brainchild of Frank and Wilf Ward, the scuffler was designed and manufactured on the farm to speed up the laborious task of weeding, the sucsess of the scuffler resulted in the requirement for in todays terms a small “Farm Building” the dissatisfaction with the service from supplier and erector oofthe farm building inspired the Frank and Wilf to start to produce steel framed farm buildings themselves
Orders flooded in until the brothers and their group of employees were working 14 hours a day, seven days a week and the business expanded. Allison Works replaced the Nissan Hut and eventually developed into the longest factory in the country.
Wilf was in charge of administration, Frank was in charge of production, office staff were taken on and a management team developed.
In 1957, the factory had 52 employees, the 1960s proved to be the boom years profits increased, more workers were engaged, the factory was extended, new products were manufactured and launched onto foreign markets.
The business experienced difficult times during the 1970's but despite 3 day weeks and steel shortages survived but went on to become one of Britain's largest producers of steel-framed buildings.
In 1979 the firm was given the Queen's Award for Export Achievement though the 1980's were dreadful years bringing redundancies and recession nationwide, the firm continued to prosper.
Wilf and Phyllis went a second time to the Palace to receive his OBE, and the local firm now named Ward Building Group plc grew into an international empire, building 20 more large and prosperous plants throughout Europe, providing work for over 2,500 employees.
On top of that, because of the worst recession since the 1930's, the Group's main competitors went into liquidation and in 1992 the Ward Empire collapsed. The administrators saw that the Sherburn operation was sound, with good order books and a healthy future, the business was ran for 5 years by the Rugby Group who sold the business to Kingspan in 1997.
The aim of this assignment is to reflect on how the current Kingspan panels division achieved current status and market share, for this purpose a comprehensive explanation on the Sherburn manufacturing site came to evolve, discussing the trends and strategy on the potential of the site within the division.
The Sherburn site is
Literature Review Introduction.
The overriding message during the this module need never to allow our business to become complacent, for example there should never be the need for a major change programme in order to implement a process of change for example the business must never lose the concept of the “ burning platform” (quote needed) More needed.\\\\\
A suitable transformational change model to that demonstrates strategic and operational are able to be viewed an planned in a step by step rational way suggested by (Kotter, 1996) illustrated in appendices 1 ,also summarised in section 3.1. Leading Change considers each of these steps in the eight stage model.
3.1 J.P Kotter Eight Stage process of Creating Major Change.
Eight Errors Common to Organizational Change Efforts and Their Consequences
Allowing too much complacency.
Perhaps the biggest mistake made during changing an organisation is to surge ahead without first establishing a sense of urgency both in fellow managers and employees. In a company with a complacent attitude (Kotter, 1996) page 4 suggests transformations will always fail to achieve all their objectives. However skilled and respected by peers the leader and instigator of the change the most venerable time can make the fatal for any new project is the initial launch, this can lead to people focusing on past glory, performance, and success reflecting on the problems they had, however they may not recognise the constant need for change or agree with leader of the project may require.
Failing to create a sufficiently powerful coalition
A team multi staff level team is crucial to drive through the target change of idea. Typically this group would rarely include support form all the senior team at first. Individuals alone however competent or charismatic will rarely possess all the assets to drive through tradition and inertia of a fundamental change, but a coalition of people from all levels can improve performance by pulling together as a strong guiding team.
Underestimating the power of vision.
Vision is a key requirement to produce change by providing direction, alignment, and inspiration to larger groups of people. Without an clear vision and direction, a change of transformation idea can easily be in danger of becoming confusing, time consuming, in danger of actually going no where at all.
Under communicating the vision by a factor of 10 (or even 100 or 1000)
Major change can be impossible unless most employees are will to help. Regular communication is required to win peoples hearts and minds. Typically there are three patterns of ineffective of communication. In the first a group has actually developed a credible transformation vision then chooses only to hold a few meetings, therefore choosing very little but detailed communication time with employees, the team any believe they have communicated well, but are often surprised by the lack understanding of the new approach. The second pattern involves the company head making speeches to employee groups, but most managers are virtually silent. The third method substantially more effort goes into news letters, power point presentations and speeches but high profile individuals can have contrasting views to the original vision, creating distrust in the group, typically resulting in disbelief in the message.
Permitting obstacles to block the new vision
Most obstacles are typically only in peoples heads, the challenge is to persuade the person that no external barriers exist, this particular type of person is referred to as a blockers can exist at any level in the company. These people tend to be influential within the organisation quite often their senior manager is concerned about losing a respected and talented person. However (Kotter, 1996) neatly summarises the “ Whenever smart and well intentioned people avoid confronting obstacles, they disempower employees and undermine change.”
Failing to create short term wins
There is often an assumation that sucsess will happen, all to easily concentrating on the grand plan, rather than the relaisation that quite often a culture of change is a long term commitment. Therefore a paln to create short term acheiveable goals will help keep momentum.
Declaring victory to soon
All to often a temptation to delacre a win will lead to a feeling of complacency, within a few years or even months the early progress can be undermined as managers are temepted to delaclare a victory.
Neglaecting to anchor changes firmly in the corporate culture
Highlights the need to continually demonstrate how specific behavious and attitudes as a result of a recent or ongoing change or culture, have contributed to or improved the current performance. The understanding of the vision must be in the succession plan to ensure the message is consistent and long term.
New strategies aren’t implemented well
Acquisitions don’t achieve expected synergies
Reengineering takes to long and costs too much
Downsizing doesn’t get cost under control
Quality programmes don’t; deliver hoped-for results
3.2 Next Generation Manufacturing: Knowledge based Competition.
230 WORDS (Jordan and Michel, 2000) page 11 suggest that “companies used to compete on energy. Now they compete with knowledge”. For example they go onto suggest the success one of the foundations of the industrial revolution was as a result of “harnessing energy” the energy of the manual labourers supplimented with the new energy from Stem engines or electricity generators to power lathes and mills, this in time replacing the energy or labourers and craftsmen. As the industrial revolution matured, more sophisticated ways were discovered for example reducing manpower, building efficient distribution networks. During the 1970s and 1980s the electronic file transfer help enable the restructuring of the 1980s and 1990s, this transiston of course will continue to evolve into the current era of “making useful knowledge out of information and data” in other words more of our time will be spent acquiring and manipulating data, turning it into knowledge”. From this knowledge key operational decisions will be made.
Design and engineering in drawing offices
Sequential design and production
Rather stable product mix
Rapid changes in product mix
Dedicated plant and equipment
Flexible production systems
Networks of firms
Flat horizontal structures
Product with service
Service with products
Government control and sometimes ownership
Government information, coordination and regulation
Table: Changed in the techno-economic paradigm
Source: Freeman & Louçã , adapted from Perez 
The development of these characteristics has made possible the very idea and growth of extended and virtual enterprises (see later knowledge streams).
3.3 Continuum of Leadership styles
3.4 Five Bases of Power
3.5 Action Centred Leadership.
In order to identify the future trends for Composite Panel production within the Sherburn facility much of the research during this assignment has been based on trends that may define the future requirement of building legislation, this research was primarily sourced via the World Wide Web to ensure all the information was current. This process led to three main areas, Government legislation -------.
I opted not to select a major questionnaire, to gauge current opinion, as the information required was classed as sensitive within the company. Information was based on interviews via telephone and email with members of the executive team, As Sherburn is now a manufacturing plant
4.2 Company Footprint assessment for the future.
The most recent information available was the Kingsapn Insulated Panels Division “Strategy Workshop Notes” 15th & !6th May 2007. The headline subject matter included
UK Market Background & Issues.
Critical Success Factors.
Although these notes date back to 2007, this document highlights the drivers and challenges that were deemed appropriate the as a result of this strategy meeting the company has current policies in place, there has been substantial effort and progress in many of these areas, for example the commitment to sustainability both the Kingspan Group PLC website http://www.kingspan.com/kingspangroup/about_us/strategy/ within this website the overall group strategy has specific reference to policy relating to overall company strategy relating to the current focus on the current drivers -----.
Panels Divisional website.
220 WORDS Government legislation will continue to create major opportunities for our business, as current policy dictates ambitious targets for the reduction of fossil fuels, (Energy, 2010 21st July) the necessity will lead to increased thermal performance measured by the U – value, this change in legislation will require thicker panels to achieve the regulations, this requirement should be beneficial yet, challenges will be created as a result of the change in legislation primarily in the following areas : A Reduction in overall production line speed
Raw material costs per metre.
New Stuff : The traditional big shed market has seen almost year on year increases in production ouputs the traditional measurement in linear metres, there is still a great emphasis with in the company on retaining the traditional compostite panel as part of the structure of the building but also offering a alternative skin to enhance the appearance of the building whilst still retaining the panel element. However oour core expertise in manufacturing has been based on the development of producing composite panels.
Sap, Coils, Chemical, Transport, Sales, Marketing, R&D have traditionally been based on the Composite panel, site performance is measured by budget v overhead as an overall do we have the facility to measure by product stream for example all eight products on the two composite production lines are reported as an overall figure rather than a overall product performance. As there are 5 manufacturing sites within the division 4 of which produce the same product there are opportunities to carry out a more in depth analysis of best practice to ensure all plants are performing to the optimum performance,
New Stuff : Of course there are then opportunities to compare performance to the newer acquisition manufacturing plants to ensure continuity, communication, on a more Global level.
More New Stuff ) Consideration of New Legisation may have on Operational performance as the Part L regulations will require a increased U Value of the panel this will lead to an overall increae in panel thickness, the thickness range has been increase by were 10 years ago 40mm panels was the big runner this has now been increased to 80mm Part L will dictate panel thickness will may have to increase to 120mm this will lead to the design change the to equipment.
Over the years the increase in panel performance has led to a bigger product thickness range, there is an oppeetuinily to review and rational the range to rationalise plant performance although the we must not lose track of what the customer wants, similarlty there must be a requirement to maintain value add and operarational advanatage.
New Stuff Customer Focus: Reduction in site waste, removal of offcuts, packaging, pallet collection , in order to comply with increasing environmental standards on building site protocol for example current methods dictate the packs are stacked to 1.2m high, spiral wrapped, stored outside or loaded directly onto trailers, delivered to site.
5.1 Style of Leadership
280 WORDS The company holds quarterly management briefings on the performance of the division, although these meetings are useful and informative to the senior management team, each individual manager then selects the relevant information to brief there own dept. As KOTTER points out in the the eight steps Error 4, the nescesecety to clearly communicate the vision to the company as a whole. The Sherburn Management team are scheduled to meet every week in reality this meeting should be the catalylist for the management team to review the quartlly brief then decide the relevant points as a team, prepare and contribute to the presentation, this would ensure a communication is consistent through the site,
5.2 Preferred Style
200 WORDS There has been investment in the Sherburn site, in the composite panel lines, 2010 continues to allow some cautious optimism as regards panel volume, as the Sherburn lines are multi product lines there are two products that have exceeded sales budgeted targets Top Dek and Coldstore panels. Warranty to date for these products stands a 0.0% and 0.9% respectively. There is a corrective action plan to deal with issues however the Sherburn business has been streamlined over the last few years the primary function of the site is purley manufacturing. There is an opportunity to set create a and include a small project team to concentrate on particular products generating more than Sales budgets. Presently the companies stratergy is based on the big picture concentrating on the overall direction of the business, if there were more detailed Roadmap for a particular product leading to
If this change was adopted there be a requirement for the company to pilot a product with a view to producing a framework that would become the template to work,
5.3 Current Situation and Style Steel supply
The recent rise in production activity has been influenced by both external factors and an overall increase in order activity. The most prominent external factor been the effect of the recent price restructuring of Iron Ore. In a press release on “The European Steel Industry. (Eurofer, 2010 11-03-10) reported that the price rise in Iron ore may have a
“Huge Impact on European Economic Recovery, The European steel industry is outraged at the announcement by the iron ore industry to massively increase iron ore prices by 80 to 90 % compared to today’s price levels for fines and even more for lump and pellets”. The price increase was a result of a renegotiation of the deal by major global producers and “marks the end of the 40-year-old benchmark system of annual contracts and lengthy price negotiations. The Iron Ore Industry instead agreed to move to quarterly contracts linked to the nascent iron ore spot market.” (Javier Bias, 2010 March 30th)
To high light the volatile nature of the Global commodity steel prices, recently after the huge price increase there is currently a surplus of steel in the market, thus forcing down the cost of Iron ore Iron Ore. “The price of steelmaking commodities iron ore and coking coal will drop next quarter for the first time in a year as lower steel production forces global miners to offer discounts on their supply contracts.
The cost of iron ore and coking coal is key to the global economy as it affects steel prices and the cost of everyday goods. It is also crucial for the profitability of the mining and steelmaking sectors, two of the world’s largest heavy industries”.(Farcy, 2010 August 29th)
The traditional market for Kingspan Panels remains the Commercial sector of the Construction industry, quote needed . The traditional market for composite panels has been the commercial building sector, the composite panel has been the fixed to cold rolled section forming the building envelope. “The end of the commercial property boom has seen Severfield-Rowen – a supplier to the Shard high-rise tower being built near London Bridge –prepare for a contracted downturn in the UK by cutting salaries and its full-year dividend. (Kavanagh, 2010 August 26th) Similarly any downturn in the in the Hot rolled steel fabrication business will have a knock on effect,
240 WORDS KEY TRENDS
Recovery in Manufacturing?
Construction of factories for the private sector rose in value from £2.09bn in 2005 to £2.48bn in 2007, an increase of 18.8%. (www.keynote.co.uk, 2009) Although manufacturing work has been moved outside the UK, to areas of cheap labour, the use of distant offshore manufacturing became less attractive due to the increased transportation costs arising from oil-price increases. Oil prices fell again during late 2008 and the impact of the UK's economic problems meant that the value of this sector declined to an estimated £1.99bn in 2008.
Warehousing became a more significant sector of the market between 2004 and 2008. In 2004, factory construction accounted for 56.4% of private industrial output and warehouses for 40.2%. In 2008, the contribution of factories was an estimated 49.3% and warehouses an estimated 47.9%. This growth in warehousing has been due to the need for storage and distribution of all types of goods, many of them imported from overseas. A large volume of consumer goods is imported from China.
Industrial output by contractors working in the industrial sector increased each year between 2005 and 2007 (although the annual growth figure varied considerably), before declining by an estimated 19.4% in 2008. In 2008, total output was estimated at £4.15bn — 0.4% lower than the figure for 2004.
Private-sector work dominates the market, accounting for an estimated 97% of all industrial work in 2008. The value of public-sector industrial construction fluctuated considerably between 2004 and 2008, the highest output being £189m in 2004 and the lowest being £119m in 2006.
200 WORDS During this assignment there was an opportunity to explore the company website in more detail, this site proved to be a informative source of information, particularly in terms of future legislation, regarding the current Global targets on government Carbon reduction and energy saving requirements. During this assignment relevant company reports were readily available. The policies that were highlighted in the internal strategic plan were evident in the Group website. The current method of communication is quarterly briefing by the Divisional Operations Director, then each individual manager receives the powerpoint presentation, then presenting to the each dept. As this presentation is a divisional overview there is an opportunity in the weekly site management meeting to discuss relevant site based information that could be included in the brief. The dept manager or team leader could then proceed to present the information, this method would ensure the same message to all the workforce rather than relyin g on the individual manager to decide the headline information.
Although during the interviews and research there are many current initiatives underway namely Benchmark, (quote) PV Panels (quote) these are relatively recent initiatives. The company ethos appears to be focussed looking forward with the advantage of a range of products that are capable of both competing in the traditional markets, yet have the capapcity to be incorporated as in the increasing façade market. On reflection the company’s growth over 40 years from a start up business to a Global operator with multi million euro turnover, perhaps there may be a culture of natural growth as opposed to the more difficult current trading conditions. The “Burning Platform” as a result of this success particularly the growth through competitors going out of business and maintaining contribution the overall plan was based on an increase in metres of the traditional products and investment in high speed single product production lines at the Holywell production plant, capable of record output during 2007 for example servicing the traditional big shed market.
There is still a market for the warehouse, big shed building in part due to service the storage and distribution of cheap goods manufactured in the Far East, coupled with the growth of Internet sales, via now household names such as Amazon, and many established high street stores offering an on line ordering system.
has possibly resulted in the company in recent years have not experienced a recession of thsi severity, coupled with a downturn in the traditional big shed market, the recent en
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