Full fat, high caffeine...

Kevin Howe, the ‘full fat, high caffeine, maximum strength’ CEO of MG Rover, is passionate about the automotive sector, his company, his products and, interestingly, modern manufacturing processes and IT. He should be: they’ve delivered him meteoric rise to stardom. Howe started his career as a computer programmer with Michelin Tyres back in 1978 before moving to General Electric in 1985 as European systems manager at just 23, and then on to Austin Rover as international systems manager in 1988. He has a huge pedigree – export systems and planning manager, commercial systems director, logistics director, manufacturing director and then managing director, all with Rover’s small and medium cars division. Apart from a short spell in aerospace as MD of Rolls-Royce Fan Systems a couple of years ago, he’s been at Rover throughout, rising to CEO in 2000. Indeed, Howe was a senior figure in the management team that bought MG-Rover from BMW in May 2000, and he’s been instrumental in its rise, phoenix like from the ashes. At once bluff and deferential, Howe comments, “We’ve been attracting a lot of attention. They [the City and press] seem to regard us as a FTSE 100 company, but it feels like a FTSE 1.” So what about his IT strategy? “We’re not at the bleeding edge,” says Howe modestly. He believes manufacturers need to focus on their business priorities. “Companies need to recognise the sector they’re in, not the industry – so that whatever they’re thinking about applying matches what they’re trying to do.” Examples? “In 1992 we took all stock, apart from showroom cars, away from the dealers and moved it to depots: it meant dealers were all able to offer much greater range and it was accessible within two days. At the time it was radical, but we got the idea from Tesco and Sainsburys. If you’re in retail, act like retail.” Point taken. “As a car manufacturer we’re into assembly, fabrication, chemical flows in the paint shops, machining in powertrain… We try to look at all of these as business processes.” And the same should go for all manufacturers, he says. “The next fundamental shift,” he opines, “will be an external lean operating strategy, encouraging flows [of information] as much as possible from customers direct to suppliers.” He believes that with the complexity of supply chains and their inevitable latency, stripping out time and waste has to be accomplished with web portals managing everything from forecasting, to scheduling, line side delivery logistics and so on. “You have to put more value into supplier relationships,” he says. “For us, that means trying to take ourselves out of the equation as much as possible. One of our key objectives is to ... be an order taker and demand aggregator with links straight out to the suppliers – and all the planning web-based… “Time equals cash,” he reminds us, and if the processes involved in ordering and manufacturing take less than one week, but there’s a four week wait for the car, there’s serious scope for improvement. And lets not forget engineering design. “We’re building a seamless interface between ourselves and our contractors, creating a shared engineering environment… for collaborative engineering,” he says. Howe sees the automotive industry leading the field throughout manufacturing and engineering. “The motor industry has done a lot for other industries,” he insists. “We pioneered lean manufacturing, EDI… The aerospace industry is years, decades behind… They’re still pushing inventory in and sitting on piles of WIP.” On lean, for example, he says Kanbans are being phased out in favour of AIR (auto issue request), in which cameras identify cars coming off the production line and automatically infer materials consumed. But for him, the next gold remains in the supply chain. “On the supplier side is where the industry shake-up is happening; the nature of the relationships between the OEMs and the first tier suppliers is changing. We’re changing the rules.”