Aero dynamic
There used to be, in effect, 12 separate production lines here, with eight plant managers being responsible for these. That has been consolidated down to four as we move towards a flatter and leaner structure.
We've also simplified the vertical structure. Four or five years ago there were up to 10 layers from operator to factory manager. So the guy at the top had all the information and direction but this had dissipated by the time it had filtered down to the shop floor. People on the shop floor weren't being motivated or engaged.
Now, we've condensed that hierarchy down to just four layers. It's more of a matrix structure, really. Communication-wise we've certainly seen some changes. When I go and talk to my people I am generating a consistent message that is being driven through the factory by the factory manager, who now is more accessible to the shop floor than before.
My md, Chris White, put things pretty simply when he said: 'Embrace change or die'. In confectionery, the steady-state environment has gone.
One reason for that is the complexity that has come our way. Take Kit Kat. Ten years ago there were just two-finger or four-finger Kit Kat varieties. Then along came Kit Kat Chunky, then orange, and now we've got lemon sorbet, lemon and lime, dark chocolate, jam, strawberries and cream ... It shows the kind of complexity that we, and our competitors, are dealing with.
Terry's of York has closed, Mars in Slough has closed, and inevitably people worry that Nestlé York will be next. York, in my opinion definitely has a future, but for that to be a long-term future we in the factory have to do our bit. That means being competitive, and it starts with being ahead of our sister factories in Nestlé
People think it's all about cost, but it's not just that. Of course you need to be cost-competitive, so you bring in automation and make lines run faster. But most blue chip confectionery companies are already operating pretty close to their minimum workforce. It's about getting maximum value out of our people.
We might make similar products to our sister factory in the Eastern Europe but the different wage levels mean at times we'll never be the cheapest. So we have to compete on things like our ability to handle complexity and large volumes. And for that to happen we need to change some of our old, rigid ways.
In my department, for example, we used to have two distinct teams for each of the two production lines. They were making different products, they were working different shift patterns and, because some were getting regular overtime and others weren't, one team could be earning more than the other. This led to a poor relationship and little flexibility between the two production lines.
That might not matter as much on a standard line, when you're making the same thing week after week. But with Aero, where there's more variation and less automation, you might need 18 people one shift but only nine the next, so you've got to have flexibility.
We held a series of workshops where we got people together -- process operators, the unions, maintenance, the support managers -- to talk about these issues. One thing we decided was to have a single team that knew how both lines worked and could flex between the two. So now we have one team, one shift pattern, one pay structure -- and, in my opinion, higher morale.
We've also recognised at York that the calibre of people we need is different from 10 years ago. We've got people who have made the same product day in, day out, year after year. But the skills we need are changing as the complexity increases, so when it comes to putting together a new shift we have to select people on the basis of skills and attitude, not length of service.
Assessing the capabilities of staff and understanding their development needs is vital for us to move forward. We are focusing more and more in this area.
One of the union guys put it well when he said: 'We know we haven't got jobs for life, but we want to be employable for life.' For example some of our employees struggle with reading and writing, so we've agreed to link up with the Basic Skills Agency to provide life-skills training in the factory.
We've had some tough discussions with operators in the past year, because they don't always see the need to change. They'll say things like 'I've worked with my mate on this shift for 20 years, and no way am I going to work somewhere else.' Others think it's all an excuse to cut jobs.
Credit to the unions, they realise more and more that to protect the majority of people you need the right people in the right jobs. Their role is protecting the long-term future of the business, not each individual.
But the fact that first Terry's of York and then Mars in Slough have closed proves we're not making this up. It reinforces our need to be competitive.
We've also made big changes to the support structure. Previously, there was an HR (human resources) manager, quality manager, chief engineer and finance manager, and they worked in quite narrow, functional roles. We are trying to tie all these functions together much more, so they support the guys making the product.
What we're trying to do in manufacturing across Nestlé UK is to take as much clutter and noise away from shift managers as possible. Until a couple of years ago, everything tended to get dumped on them from an admin point of view. They were doing labour planning, holiday planning, putting people through training, and also dealing with the support functions if there were any problems with technical, supply chain or engineering for example. The support functions would in effect give them more problems to fix rather than the other way around!
But we want the shift managers to spend 80% of their time on the factory floor and only 20% in the office. It was probably the opposite before. In helping support the shift managers in doing this we have implemented a new role called operational support managers who are the link between key support functions and the shift managers.
I've then got what we call a CDM or 'consequence-driven maintenance' manager. I have a technical support manager, whose job is to look for process improvements and identify how we're doing in terms of best-in-class. And we have an HR business partner as part of our support team. A lot of the routine HR stuff is now handled at shared service level.
Although we've flattened the structure overall, we're actually introducing a couple of new positions at operator level: a logistics support operator, who will take on organisation-type responsibilities like planning for changeovers and controlling material movements, and a technical operator who can perform 'high frequency, low risk' maintenance tasks. These two new operator roles will still report to the shift managers, but the operational support manager and CDM manager respectively will be in charge of their development.
There's a saying in Nestlé that shift managers should be put 'at the centre of the universe'. I say to my support managers: 'Your job is to come in every day to support these guys on the shop floor and help them develop and coach their teams.' If we are going to get to high-performance working, it has to start at line level. Get the skills and attitudes right and it will become easy. The hard bit is getting there.
Factory facts
Location: Nestlé Rowntree, Wigginton Road, York YO91 1XY Tel: 01904 604604
Output: 110,000t a year on 15 production lines
No of employees: 1,200
Main products: Kit Kat, Aero, Milky Bar, Drifter, Matchmakers, Polo, Smarties, assortments (Dairy Box, etc), Munchies and Yorkie
Personal
Name: Mike Hale Age: 31
Career highlights: Degree in mechanical engineering from University of Liverpool. Joined Cereal Partners, the Nestlé/General Mills joint venture, as a project engineer, then moved to Nestlé in 2000. Worked at Fox's Confectionery until its sale to Northern Foods in 2001. Installed and commissioned one of Fox's two Polo lines at Nestlé's Czech subsidiary, and transferred to Nestlé York in 2002. Worked on Kit Kat lines as project manager and production manager, moving on to Aero in 2004
Domestics: Lives in York with his fiancé
Outside work: A massive fan of Liverpool FC, Mike Hale's face was captured by the TV cameras in the crowd at last month's Champions League final in Istanbul
