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PANASONIC EUROPEAN TELEVISION DIVISION, CARDIFF, SOUTH WALES Panasonic has been manufacturing televisions and microwave ovens in Wales since 1976 and currently produces 500,000 televisions and 600,000 microwaves annually. It has set itself a target to make 1,000,000 TV sets a year, a figure guaranteed to delight couch potatoes...
With such a mighty operation, many transport companies benefit from Panasonic's need to move goods, mostly through third-party hauliers. Logistics manager Chris Simpson explains that the transport operation was restructured in April to combine four sections dealing with transport into one, enabling better freighting rates to be negotiated for the whole company This operation has three main strands. The sales division, Panasonic UK, runs an inhouse fleet of 44 lorries which distribute finished goods to central warehouses throughout the UK. Local deliveries in South Wales of finished goods to warehouses and some component distribution is handled by a third-party operator, FTS, a Newport haulier operating 12 Volvo 38-tonners on the contract. "Incoming Japanese companies have given opportunities to Welsh hauliers which didn't exist in the past," says FTS general manager John Weston.
Weston reckons the hauliers that have prospered are those that have been able to adapt to changing circumstances, with much of the heavy industry disappearing. "Some of the older companies were set in their ways and had become used to running flatbed trailers," he says.
Export is where the big operators come in. Half of Panasonic's production is exported to Europe and Simpson uses the services of companies such as MO, NYK and Geest. Panasonic sends 2,500 container loads of TVs and microwave ovens on to the Continent in a year.
Closer to home Simpson reckons Welsh hauliers will benefit from Panasonic's drive to boost production: "We see growth of up to one million sets a year providing extra work for local owner-drivers. The company's object is to localise the operation-70% of the TV components are now bought in Europe."
Like many Japanese companies, Panasonic has a single union deal—in its case with the GMB and its white collar section, APEX. More than 90% of workers are members and Simpson says union/management relationships are very good. A no-strike deal is not part of the package.
Simpson says Panasonic was courted by the WDA to come to Wales and looks forward to a new gateway into Europe if an agency feasibility study into reopening an old railway line near Panasonic's plant results in a link with the main London to Swansea line and the the second Severn crossing, due to open in 1996. "The siding would be 100 yards from our warehouse."
KINTETSU EURO TRANSPORT, NEWPORT, SOUTH WALES Kintetsu Euro Transport is the latest Japanese transport operator to make inroads into the UK, following the arrival of NYK. It is here with the initial objective of servicing the increasing number of Japanese manufacturers based in the UK.
"Japanese companies are very patriotic and have more faith in other Japanese operations," explains KET's managing director Stephen Devaney.
Devaney became involved in 1990 when he was approached by Kintetsu World Express while running his own transport operation in Slough. KWE offered to buy Devaney's business if he agreed to start up a European road service for the Japanese operator. Hence the birth of Kintetsu Euro Transport.
"It wasn't an easy decision to make but at the end of the day it boils down to money," says Devaney, who still retains a headquarters in Slough.
An offer from Kintetsu World Express was not to be sniffed at. KWE is a subsidiary of the Kintetsu Corporation which was founded in 1910 as the Osaka Electric Railway Company and now employs 78,000 people worldwide with a turnover of $13bn. It is Japan's second biggest transport operation, running 16,000 trucks. It has diversified into manufacturing, hotels, department stores and supermarkets and owns one of Japan's top porofessional baseball teams.
The Welsh depot was necessary to service Japanese manaufacturers such as Sony, Panasonic and Hitachi with components delivered on a just-in-time schedule. The 21vehicle fleet now runs 66 trips a month into Europe. And the Newport depot is set to grow More Japanese manufacturers are coming to Wales and at the end of the year a French company which supplies Sony is to take half Devaney's 3,000m2 warehousing.
The narrowing of delivery windows has
increased activity at the depot with one Japanese manufacturer cutting the lead time for ordering components from six weeks to 15 days. As a result European manufacturers of components are looking for stockholding sites in the area to meet tight JIT schedules. If the production line at Panasonic stops it costs £60,000 an hour in lost revenue. "This site will have an increasingly important part to play in a European trunking nenvork with more drivers and vehicles based here," says Devaney.
The fleet comprises Mercedes, Iveco Fords and Scanias with Mercedes the majority of the seven 38-tonners. As well as Newport and Slough, KET has depots in Manchester, Newcastle and Glasgow. Parent company KWE has 21 European depots.
Devaney can call on money from Kintetsu to expand further. "The investment is there if I require it but lam a very cautious fellow--there is no point in buying trucks to stand idle while we are in a recession." So far he says the business has grown 300% since inception to a k1.5m turnover.
Welsh Development International helped Kintetsu to set up in Wales by locating a suitable depot after an approach from Kintetsu and a number of Japanese manufacturers.
But what about the much maligned Severn Bridge tolls, costing more than 49 for a truck entering South Wales? "It creates a problem for everybody," says Devaney, "It doesn't help to keep our costs down but tolls are likely to spread througout the UK."
ICELAND, DEESIDE INDUSTRIAL PARK, NORTH WALES
Iceland was the first company to build a depot on the Deeside Industrial Park in North Wales.The park was created by the WDA on the site of the old Shotton steel works which shed 13,000 jobs.
Although Iceland's founders, chairman Malcolm Walker and chief executive Peter Hinchcliffe, are not Welsh, the frozen food retailer had its head office in Wales from its humble beginnings 23 years ago.
Then Walker and Hinchcliffe made enough money to rent their first depot in Rhyll by selling strawberries at the roadside. Now the operation has 653 UK stores—including the Bejam shops bought three years ago—and is expanding into Northern France.
It still runs much of its own transport with 215 artics including 90 based at Deeside.
"We will continue to run our own transport because we are a hands-on company," says distribution controller Stuart Ross. "We don't want to relinquish our part in the supply chain. Contract distribution companies argue that you should take anything out of your business which is not core but increasingly companies do see the supply chain as core."
Some work is contracted out. Wincanton runs four UK chilled food depots; BOC Distribution Services runs a Swindon depot handling grocery distribution and a depot will open next year run by Tibbett & Britten company Lowfield.
Iceland's fleet delivers to its own highstreet shops including 70 vehicles in a London depot distributing white goods inherited from the Bejam business.
Deeside is principally the northern distribution centre, although drivers run as far south as Truro and to Aberdeen. A further 100 UK stores are planned. "Our trucks do 44,000km daily—the equivalent of once round the world," says Ross.
Ross reckons recruitment has never presented a problem at Deeside, which benefited from an available workforce drawn from North Wales, Cheshire and the Wirral, including many former British Steel employees. "We have a very high calibre driving force—six drivers have been in the finals of the driver of the year competition."
CM met Iceland's only woman WV driver, Susie Williams, who has been driving lorries for 27 years, five of them with Iceland. Williams explains that deliveries require an extra degree of skill becauuse of the highstreet locations.
Staff turnover is said to be low. Iceland's first truck driver has just celebrated 21 years with the company and is now a shift manager in the warehouse.
Li by Patric Cunnane