Niko; The switch to success
2016 – Niko is an almost hundred year old family company that manufactures switches, sockets and (automated) lighting control systems. The headquarters and a production plant are located in Sint-Niklaas, Belgium. It now employs around 700 people. The following is a summary of an article about this company in the Members Magazine of Flandres Synergy (no 6, June 2016). This article can be found in the appendix.
From 2011, Niko is working on renewal of its production processes and work organisation. They introduced ‘lean thinking’ and worked on the more efficient use of equipment: Overall Equipment Efficiency (OEE). In 2013, the machines were being used efficiently but in the throughput there was 90% waiting time. Niko began experimenting with Quick Response Manufacturing (QRM) for some new product lines. In 2015, the Department Manual Assembly went over to QRM. But this change did not provide sufficient gain in throughput and staff experienced great time pressure. That was reason to join the learning network of Flanders Synergy on Innovative Labour Organisation (Innovatieve ArbeidsOrganisatie, IAO).
Reason and Approach
Initially the reason for the renewals was increased globalization and competition that encouraged innovation and the need to produce less in stock and more on specific customer demand. The latter also was the reason that the manual production was kept in Belgium and that, service and delivery times became more important to make the difference. Therefore, they began to experiment with Quick Response Management in new product lines. Initially this did not sufficiently benefit for all product lines, and they examined where the success of some new production lines was due. The difference was explained by delegation of discretion to the employees and their involvement in the change process. Thus there came more focus on Innovative Labour Organisation. In 2015 they formed four operating teams in the division Manual Assembly and appointed a coach to each team. These were former foremen (‘meester gasten’) and engineers. That indeed yielded a large overhead, but it was necessary as an intermediate step towards self-steering. Organizing and supporting tasks were divided among the team members (star roles), training courses were given and new information systems introduced that enable employees to register and follow the processes. Thus, step by step and in a participatory way autonomous teams were developed.
In the production department Manual Assembly the production flows were parallelized. (Eventually) autonomous teams produce a complete product from order to delivery to the customer. Organizing and supporting tasks are divided among the team members. So the employees become the owners of the process.
The teams have high reliability. The processing time is cut in half for the products of the division Manual Assembly (avg. from 116 hours to 70 hours). Productivity increased by 19% and the targets regarding service and stockpiling are met. The workload and overtime are diminished and learning opportunities have increased because of the employee involvement in organizing and supporting tasks. People in other departments have become curious and want to renew their processes and work organisation as well. That was the intention, there is deliberately chosen an oil slick strategy.
The team composition is important and there is a critical mass (minimum necessary number of employees) for each product line.
Changes must be implemented stepwise and in a participatory way; sometimes you have to accept that the maximum objective cannot be realized yet or that you have to take a step back.
The knowledge of craftsmen (foremen) should be used in the change process.
Lieze Drees. ‘De schakelaar tot succes. Hoe de manuele montage bij Niko uitgroeide van zorgenkindje tot paradepaardje.’In Flandres Synergy Ledenmagazine – No. 6 – June 2016. (Attached)