Production: Driven by the lean machines: UK car components suppliers are learning to do it the Japanese way

DAN JONES is a butcher of sacred cows. The Cardiff Business School professor has already told us why Japanese car makers were so good (he was co- author of the book The Machine That Changed the World). Since then he has been studying the relative performance of the companies that make car components - and once again his views are surprising.

British suppliers are, he says, 'three or four years ahead' of their German rivals, which he finds still dominated by 'Herr Doctor Engineer' - who is not prepared to learn from others.

The Nissan plant in Sunderland is 'better than most Nissan plants in Japan'.

Sadly, his central conclusion leaves one sacred cow alive and mooing. It is that manufacturers in Europe still lag behind the best world standards.

Cardiff Business School, Cambridge University and Andersen Consulting have carried out a 'benchmarking' study to see how British companies match up to the world's best (meaning Japan's best). It shows there is still a 2-1 gap on productivity, and a 100-1 gap on quality.

The only world-class plant in Europe that Professor Jones has studied is the Nissan factory - although he expects the Toyota plant in Derbyshire to be even better.

Like The Machine That Changed the World, the study does not offer startling new insights into the way the best Japanese factories are run, but it does highlight the three elements that make the difference: getting the human side right by working in teams and pushing responsibility downwards; fixing the factory process so that parts flow through it with the smoothness of syrup; and installing a 'lean' supply chain that is tightly integrated and has a properly working just-in-time delivery system.

Although some British companies have been struggling to install similar systems for the past decade, Prof Jones says that 'we have only really seen action in the last 18 months to two years' and the astonishing efficiency found in Japan remains elusive.

For example, it is virtually impossible to have a proper just-in-time supply system in the UK, because it requires every company in a supply chain to take part.

The bottom of the chain is occupied by the likes of British Steel and the big chemical companies (who make plastic), and they have so far who have refused to send small but frequent batches of parts to customers a fraction of their size.

The good news is that the arrival of Japanese car factories is forcing suppliers to improve by leaps and bounds. Nissan has had most effect so far, because the Sunderland factory has been operating for six years, but Prof Jones believes the arrival of the recently opened Toyota and Honda factories could provide an important new stimulus, because the Japanese giants each have different strengths.

Nissan is strong on the 'human' side; Honda is obsessive about quality; Toyota is still the undisputed king when it comes to manufacturing systems. 'Nearly all the best companies in the world are Toyota suppliers,' Prof Jones says.

Unlike most suppliers in Japan, many British companies have contracts with more than one Japanese plant. That should enable them to synthesise the best lessons from each company. And lessons they are, for the manufacturers go to great lengths to teach suppliers how to give them the quality and price they want by installing lean production systems.

Some managers resent this - as well as the insistence that the price be driven constantly downwards - but few will give up such important orders.

Nissan has been concentrating its education process on its 'first-tier' suppliers, the companies that make large assemblies such as seats.

Prof Jones says that in the next year or so this process will have to be continued with their suppliers, the second tier, while the likes of British Steel will be pressed to join the just-in-time system. 'I think big companies are becoming more flexible,' he says. 'The car companies are using their muscle on them.'

As a result of Japanese pressure, the British are starting to pull ahead of the Germans. The Japanese are going to Germany for technology, but not for quality, which 'has been very over- rated,' Prof Jones says. Just as the Japanese were grateful to accept any advice after the Second World War, so the battered British are more receptive to the new ideas.

The British have also discarded the notion - recently put forward by the head of Mercedes-Benz - that cultural factors mean there will always be a gap between Japan and the rest of the world.

'We are hearing the same arguments in Germany now that we heard here three or four years ago,' Prof Jones says. 'But when a plant is opened, these ideas are blown away.'

While his views are good news for the automotive industry, he is worried that the educational process will not spread throughout the rest of the manufacturing sector. That is because, he says, it needs to be led by 'people who know what they are doing' - and that, at the moment, means the Japanese.

The Lean Enterprise Benchmarking Project will be available shortly from Ardi Kolah, Andersen Consulting (071-438-5000). First copy free.

(Photographs omitted)