Page 1: Introduction
Some business improvements involve a giant leap forward. An example of this would be the development of a revolutionary new product such as the bicycle or, more recently, the iPod or modern wind turbines to create green energy. However, of more importance to most businesses is ongoing small step improvement. This case study shows how Leyland Trucks continually makes improvements to everything it does based on the Japanese principle of Kaizen.
Background to Leyland Trucks
Leyland Trucks manufactures trucks under the DAF brand in Leyland near Preston, Lancashire. As well as production in the UK, DAF manufactures in Eindhoven in Netherlands and Westerlo in Belgium. Leyland and DAF are both part of the North American company, PACCAR Inc.
In 2006 DAF's three manufacturing plants in Europe, including that at Leyland, produced a record 56,700 trucks of between 7.5 and 44 tonnes (the heaviest vehicles on the road). One in every four trucks sold in the UK is by DAF. New truck registrations in Europe were almost 268,000 in 2006 and DAF currently has a 15% share of this European market.
The current business objective is to increase the market share to 20%. When a company wants to achieve its objective, it needs to have a plan to get there this is termed the strategy.
DAF's strategy for Leyland to achieve this objective has two main elements:
- continuous improvement
- increasing production capacity from 18,000 to 25,000 units.