Manufacturing: Making the best of three worlds: Bosch's British plant flavours home-cooked technology with Japanese technique

TUCKED alongside the M4, just west of Cardiff, is a factory that symbolises two of the great forces reshaping Europe's industrial economy. It belongs to Bosch, the privately owned German giant that makes food mixers, power drills and car components. This factory, Bosch's biggest foreign investment, employs 700 - scheduled to reach 1,250 by the mid-1990s - and makes advanced compact alternators for cars.

The two forces are the increasing desperation of German companies to escape the high costs at home, and the relaunching of Britain by the Japanese as an important car manufacturing base. The most interesting thing about the plant, though, is that it shows what happens when the two most advanced engineering countries meet - for Japan and Germany have quite different ideas about what makes a good factory.

Bosch has plants all over Europe, but it was not until the late 1980s that it decided to set up in Britain. Martin Wibberley, personnel director, said there were two reasons: 'First, there was the flight from Germany, with its very high labour costs and restrictive regulatory environment. When Germany had a quality and productivity advantage, the high costs could be borne. But now other parts of the world have caught up.

'The second reason was very definitely the Japanese transplants. Bosch's managers watched the influx of Nissan and other Japanese companies, and concluded they couldn't all be wrong. They discovered these companies felt the sea-change in British industrial life wasn't just a temporary thing.

'The British disease had been cured - and you could get the quality you wanted.'

Bosch had developed a new type of compact alternator for cars in its Stuttgart laboratories and decided to make them in the UK. The factory was opened in 1991 and, as it was in a development area, it attracted a grant - but Mr Wibberley said this was a secondary factor. The Cardiff alternators, as well as supplying Honda and Nissan in Britain, are fitted in several Continental models, including the VW Golf and the BMW 3-series.

The factory does not look as though it houses 700 workers. The overwhelming impression is of vast banks of dark green state-of-the-art machines and barely a soul to be seen among them. Of the pounds 100m invested there, pounds 80m has been spent on production equipment. The Germans are well known for their faith in technology, while the Japanese prefer to simplify: so at first sight this is a thoroughly German plant.

Yet this factory, unlike any other in the Bosch empire, is heavily influenced by the Japanese. 'We deliberately set out to build a synthesis of Japanese, German and some UK influences,' Mr Wibberley said. The factory had to win business from the transplants, and that was not easy: 'The Japanese are not particularly impressed that Bosch is a well-regarded name.'

Before the factory was built, Bosch managers visited Nissan's factory in Sunderland, which uses a blend of Japanese, US and British techniques. It gave Bosch many of its ideas, but the Japanese influence dominated - Bosch introduced pre-shift briefings, team-working, continuous improvement workshops, and performance report boards. Since the factory started work, Nissan's supplier development people have been in, advising how to improve procedures. Other manufacturers have visited, though none as prescriptive as the Japanese.

There was some resistance from the Germans, Mr Wibberley said, 'but they decided to go this way because of what they saw at places like Sunderland. They were conscious there were fundamental changes going on in manufacturing industry'.

Sometimes this has led to clashes, with Japanese ideas usually winning. The Germans believe in specialised training, for example, while the Japanese say that teams work only if members can do each other's jobs: Cardiff workers have multiple skills. The Germans have strict hierarchies, with executive parking places and pension plans; Nissan did not, so Bosch rejected them, too. These ideas have been generally well received by the 25 Germans at Cardiff.

It was too early to say how good productivity would be, Mr Wibberley said. Bosch is pleased with the quality, though not so pleased with costs. The most impressive statistic is absenteeism. The rate is 1.5 per cent, compared with 10 per cent in the company's German operations.

Bosch's main worry is the quality of its own suppliers. 'It's harder than you would think to find UK-based suppliers,' Mr Wibberley said. 'They are coming up sharply, but from a very low base. There aren't enough of them and they haven't invested enough.' This is a shock to someone from Germany, where even a tiny company will ensure it has the latest equipment.

Last month the Cardiff factory ran its first supplier development workshop, sending engineers to a supplier to teach techniques learnt from the Japanese. The suppliers will have to fall in line or lose the business. The process of upgrading the second tier is beginning.

For cost reasons Bosch would like to buy in the UK (especially since the devaluation of the pound), but Mr Wibberley said there was a serious risk that many parts would have to be imported. 'The Japanese are worried about the supply chain because of the weakness of the second tier.' However, some German companies too have been fired for poor quality: the gap between the best in Britain and the best in Germany is disappearing. There is some way to go, though, before either will be as good as the best in Japan.

(Photograph omitted)