Ramsay Engineering is a small company facing the challenge of keeping its culture intact as it grows the critical mass that will give it serious clout in the fast-changing automotive industry, not only in South Africa but internationally. Technical director Stuart Beaumont tells John OÔÇÖHanlon how itÔÇÖs done.
This is a tricky time for everyone in the automotive supply chain, so you would expect to hear a tale of woe from a general engineering firm that supplies OEMs at a time of falling global car sales. Well, Ramsay Engineering did see its revenue drop towards the end of last year. In November 2008 there were a few redundancies, and for a while the 350 staff members were asked to go on a three-day week, but the pain was mercifully short-lived. As from early April this year, the five-day workweek was resumed. The company has won significant new business and will be hiring new staff in 2010.
Based in Pietermaritzburg, near Durban, South Africa, Ramsay Engineering is a family firm with a capital F, says technical director Stuart Beaumont. His father Nick Beaumont is chairman; the vice chairman, Malcolm Anderson, is his uncle; his cousin Angus Anderson is finance director. Among the other board members are long-serving Ramsay people who have worked their way up the management ladder. Even the managing director Andrew Turner, although not a direct relation, is ÔÇ£part of the family.ÔÇØThis family culture has given the company the agility to succeed with a very comprehensive array of processes, from metal stamping and forming and injection moulding through to trim work and subassembly manufacture, for Toyota, General Motors, Mercedes, Volkswagen, Ford, Mitsubishi and Nissan, among other OEMs.
Toyota, RamsayÔÇÖs largest customer, recently expanded its plant at Durban to enable it to become a major exporter of vehicles like the new Hilux range. In fact, the recession actually strengthened Ramsay EngineeringÔÇÖs relationship with Toyota. When a supplier of roof rails and running boards for the Hilux was unable to meet ToyotaÔÇÖs delivery requirements, Ramsay was able to pick up this substantial business and supply good-quality production parts in 3┬¢ weeks. ÔÇ£A project like that would normally take 18 months to get up and running,ÔÇØ Beaumont says. ÔÇ£Everyone put in a tremendous effort. For the first two or three weeks we had people working literally right through the night to get the product out the door. Without any doubt we would not have managed the project had we not been able to cultivate this mindset throughout the business.ÔÇØ┬á
The recession also led indirectly to another breakthrough. Making half shafts for Land Rovers was one of the companyÔÇÖs earliest production jobs, but Ramsay hadnÔÇÖt supplied Land Rover for many years when in December 2008 a South African supplier making clutch pedal assemblies went into administration. ÔÇ£We anticipated that might happen and were able to respond quickly, approach Land Rover and pick up the business. Since January we have been supplying parts to Solihull,ÔÇØ says Beaumont, and as a result, further business is being negotiated. In this case, he says, though Land Rover is no longer in the Ford stable, without Ford Q1 status Ramsay would have had no chance of winning this contract.
The OEMs may not be selling as many cars, but as long as they are making any they still need components. At the end of 2008 Ramsay was supplying 144 products to Toyota alone, up to 380,000 parts a month. Now, though volumes have been reduced, it is supplying 188 SKIs, an increase that will pay dividends when volumes go up again. Beaumont canÔÇÖt praise Toyota highly enough for the support it has given his company in achieving best practices in lean manufacturing, JIT practices, quality control and even training. Everyone is encouraged to read Jeffrey LikerÔÇÖs The Toyota Way, and the relationship is solid.
However, much future growth is likely to come from other partnerships, principally Ford and BMW, with which Ramsay is developing some very exciting programmes, according to Beaumont. The first of these is a supply partnership with PWO of Germany to develop and manufacture a cross-car beam for the new 3-series range. ÔÇ£It runs underneath the dashboard, and all the components like the radio, air bags and air conditioner are attached to it,ÔÇØ he explains. ÔÇ£ItÔÇÖs a big step forward for us. They want it supplied fully assembled to the BMW plant at Rosslyn near Pretoria, which is 400 miles from Pietermaritzburg. So itÔÇÖs going to mean setting up a facility at Pretoria. ThatÔÇÖs our next big challenge.ÔÇØ
The new facility will be mainly an assembly operation supplied from Pietermaritzburg, but into the same plant will be moved some of the production for Ford components in anticipation of the launch of the new dual-cab T6 Ranger pickup in 2010. That vehicle will also be manufactured in Pretoria, and Ramsay will be able to supply both plants from its new factory, expected to cost 30ÔÇô40 million Rand.
South African companies are expected to show progress toward Black Economic Empowerment (BEE), and Ramsay has found two effective ways of doing this. One is through a training programme it has entered with MERSETA, the government body responsible for training in the manufacturing and engineering sectors. ÔÇ£We have about 100 employees, former employees and people who have no prior connection with Ramsay going through at the moment. We were worried that if we lost staff in the downturn, we would be left with a lack of skills afterwards; getting points on our BEE scorecard is secondary. ItÔÇÖs part of our corporate social development strategy.ÔÇØ
Social development at Ramsay Engineering is indistinguishable from supply chain improvement, in fact. Toyota has helped Ramsay to embrace the TPS, JIT production and Dojo training that upskills staff through simulation, and itÔÇÖs only self-interest to pass that excellence along the supply chain. ÔÇ£One of the fundamental philosophies of the Toyota Way is to develop your partners,ÔÇØ says Stuart, ÔÇ£and we are engaging with our suppliers in the effort to make more cost-effective components. We have a number of suppliers that a few years ago were very basic engineering companies but now have TQM and are ISO 9001 accredited, while some of them are going for ISO 14000, the environmental standard. ItÔÇÖs making a real difference.ÔÇØ
Looking forward, Ramsay Engineering intends to leverage the export opportunities of its existing trading and joint venture operations with partners like PWO and the Swedish accessories group Thule. It will continue to play to its singular ability to say ÔÇ£yesÔÇØ to new business that adds value for its customers. ItÔÇÖs a challenge for the technical director to keep across such a diverse business, Beaumont admits, as he throws out examples of how business has accrued.
Sewing technology might seem non-core in a second-tier automotive supplier, but itÔÇÖs as well Pietermaritzburg used to be the centre of South AfricaÔÇÖs shoe industry, he explains. ÔÇ£When Toyota ran into problems sourcing gear locks, they came to us because we were making the handbrake cover that also goes over the gear lockÔÇönow we are making the whole assembly for the Corolla and the HiluxÔÇöand when they changed from wire to plastic for the frame that supports it, we were able to pick that up too, because we were able to find capacity in our injection moulding shop. At one point we just supplied a wheel spanner for the Hilux, but we ended up making the other tools that go into the bag, stitching the bag itself and supplying the entire toolkit.ÔÇØ
ItÔÇÖs a simple matter of adding value, he says, a basic key to growth, even in difficult times.