Hendy Ford

Hendy Group has come a long way from its origins as a bicycle repair shop in Whitchurch, Hampshire. The automotive retailer now has business all the way across the south of England employing over 850 people and with a sales turnover in excess of £200M.

Company Background

This family run business has a long association with the Ford Motor Company which goes back to 1910 when Percy Hendy signed a dealership contract with Henry Ford himself. This was a pioneering event and made the Hendy Group the first Ford dealership in Britain.

They are still to this day making pioneering decisions and over the last 6 months have been one of the first automotive retailers in Britain to apply business improvement principles, known as Lean, that are traditionally associated with manufacturing companies.

Coincidentally these Lean Manufacturing principles were developed by the Japanese automotive industry and born out of visit by Toyota’s family owner Eiji Toyoda to Henry Ford’s production plants in Detroit. At the time Toyota were producing only 40 cars a day compared to Ford’s 8,000 a day. A real measure of how far Toyota has come which is largely down to the success of the Toyota Production System or now known as Lean Manufacturing.

Objectives from the LEAN Workshops

Lean Manufacturing has set the benchmark for manufacturing companies over the last 20 years but it is only recently been applied to the retail and service sectors. Those that have applied it have seen a big increases in the customer service levels whilst at the same time a reduction in their operating costs. In today’s bleak financial environment the ability to focus staff at all levels on improvement is a necessity to survival.

The Hendy Group started on their Lean journey 6 months ago when 2 of their Senior Managers from Finance attended a 5-day Lean Masterclass at PETA in Portsmouth. Finance Manager, commented ‘We quickly could see the potential for Lean to save money and invited Lean Consultant Neil Fedden to help with the implementation’

They first started with the new parts distribution centre based at Flanders Park, Hedge End. The aim was to reduce down lead-time from a Trade Parts order through to order fulfilment and the part being sent to the correct repair centre.

Workshop Format

The method used for implementing Lean was to walk through the process with the appropriate staff and identify every single activity, the time taken to carry out the activity and distance travelled. Ideas were identified which simplify the process making it easier for staff as well as achieving the business aim of reducing down lead-time and improving productivity. The activities were classified as Value Add (in the eyes of the customer) or Non-Vale Add which simply added cost and delays to the process

As part of this ‘Waste-Walk’ a wider group of staff were involved in describing other issues that occur within the process but not necessarily observed as part of the waste walk.

Once all this data was collected the Hendy Ford improvement team then designed a Future State process that would overcome the identified issues and achieve the objectivise of reduced lead-time and improved productivity. An action plan was then put in place that would take the process from the identified Current State to the desired Future State. As part of this action key performance measures were put in place to provide a monitor on the success of the action plan

Problems

One of the major issues identified was the lack of feedback between the part pickers and the sales teams which resulted in the sales teams having to walk away from their desks to find out progress of customer orders. To overcome this problem a member of staff was relocated from the offices to the warehouse who helped allocate the picking workload more efficiently as well providing timely feedback for customers who are chasing parts. This action has improved customer feedback and service levels as well as allowing the sales staff to get on with their job of selling.

Solutions

As part of this implementation one of member of staff suggested printing out the sales invoice and use this to pick the items rather using a separate pick list. This has greatly simplified the process and the amount of paperwork generated and time lost generating it. It had never been done this way before due to the perceived problem of having to go back and modify the invoice in the instances of stock-outs. On checking whether this was a problem it was found that it very rarely occurred!

Benefits

The results of this and other improvement actions has been the number of picks per hour per person has more than doubled and lead-times have been significantly reduced. The business unit managers are now looking to increase the number of van runs per day increasing customer service levels and the opportunities for sales.

As well as an impact on external sales the reduction in parts delivery lead-times to the internal customers will reduce down the delays to customer’s vehicles waiting for parts, again increasing sales levels. The increase in sales could be an anticipated £1.2M for a very small capital outlay.

Hendy Ford

Comments

Manager of Flanders Park, commented ‘The most encouraging thing has been how the team have applied the lean principles to other areas of the business such as goods-in. The word is getting out to other parts of the group and the parts distribution manager in Exeter is looking at the improvements made at Flanders Park to see what can be adapted to their site’

The next stage of the project is to implement Lean at the Commercial Repairs Department at School Lane, Chandlers Ford and the Body Repair Shop at Segensworth.

Neil Fedden, commented ‘The implementation of Lean within the Hendy Group is picking up momentum quickly and staff are seeing the benefits that can be achieved not only to business performance but to taking the ‘hassle’ out of their own jobs as well’

Further Lean Workshops

Since the success of the implementation in the parts workshop Hendy Ford have achieved similar results by applying Lean to their Body Shop, New Car Retailing and Commercial Vehicle Repair processes.