Continental first for Varity corporation's Kelsey-Hayes division

Kelsey-Hayes, the anti-lock braking systems (ABS) manufacturer located in Heerlen, the Netherlands, is the first plant in continental Europe to achieve the new QS 9000 quality certification. QS 9000, a quality benchmark, established to meet the specific requirements of the big three (Chrysler, Ford, GM) is a form of certification specific to the automotive industry. It represents a major advance on the ISO 9000 series.

It took the company 14 months to build, equip and launch its plant. Within six months, the first production units were being shipped to their first customer and within another six months, they were supplying the large volume ABS-equipped Opel Vectra. Clients now range from Lamborghini and Lotus at the craft end of the market to the Frontera "off-the-road" vehicle.

Varity's Kelsey-Hayes has been manufacturing and shipping worldwide, to points as far away as Korea, meeting their customer needs on a global base. The company has always been quick off the mark. The QS "first" is one of a succession for a state-of-the-art, high-tech facility, located strategically, on a greenfield site, at the logistical nexus of Europe's automotive market.

The European ABS market is set to double by the turn of the century. Kelsey-Hayes, with a site capacity in excess of one million four-wheel ABS units per annum, has achieved its production target of 400,000 units annually. This means that the company can practically triple its volume and remain in phase with Europe's major period of ABS growth.

"A safety-critical, high-quality, high-visibility product needs a world-class team," says MD Gary Broda. With a staff of 90, using clean room, lean manufacturing technology and flexible human resource response, this is precisely what Kelsey-Hayes has. The team and systems are up and running. They have an NLG 90 million investment, a six hectare site, and are strategically located in the center of Western Europe shipping just-in-time to their customers' assembly plants in Belgium, Germany and England.

Quality people means quality at Kelsey-Hayes, and the achievement of ISO 9001 and the QS 9000 within a year shows that, once this company gets moving, they can handle all checks in mid-field. An ABS system keeps the wheels moving, preventing skidding and sustaining braking power by ongoing adjustment. It's safe and you can rely on it, as you can rely on the company that made it. They are continually on the move too.

Mr Broda, originally from Michigan, is the hand on the wheel in the cockpit of this safety vehicle. He has brought 20 years of international experience in safety-related component supply to the automotive industry. "A flawless launch of a greenfield site", adds Broda, "and achievement of QS 9000 certification is a tribute to our team's attitude toward quality and their customers." Noel Van de Weghe, raised in Detroit, with quality engineering experience in the European automotive industry, is the quality manager. He is part of this "hands-on" responsive operation.

Quality is the key to lean manufacturing's success and customer satisfaction. It is the constant to which every cycle returns. QS does not stand for quickstep, though Kelsey-Hayes has certainly demonstrated a turn of speed in being the first in continental Europe to acquire it.

It is perhaps an instructive closing note to remember that the choice of the city of Heerlen has itself been an important precondition in the company's success. Heerlen offered one-stop-shopping, but then Heerlen's quality marketing team had a great deal to offer; a strategic location for the company's market and technically competent multilingual people to operate a plant at the cutting edge.

LIM April/May 1996
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The Netherlands: The Gateway to Automotive Europe

• Mainport Access
• Top multimodal logistics
• Most EDCs
• Best in shared services
• Ideal business (tax) climate

The Economist Intelligence Unit ranks the Netherlands the best place to do business 2000-2004. (EIU Global Outlook, Q4 1999).

The Market

Western European passenger car production reached 15,347,000 in 1999. The US figure, including Canada and Mexico, for the same period, was 16,376,000. (Source: FT Dec.3.1999). This makes Europe the runner-up to North America in automobile production worldwide. More than 70% of European OEM production takes place within a day's trucking distance of the Netherlands (280 miles).

With today's global platforms restructuring production processes and rationalizing supplier bases in automotive Europe, direct suppliers are now fewer and their co-makership role is increasing. This offers major opportunities to US component suppliers with their advantages of a global presence, technological leadership and domestic experience with economies of scale.

New market structures and the arrival of the Euro as Europe's single currency - a major step towards creating a level playing field for suppliers - make the Netherlands the gateway to these opportunities.

Logistics

Thirty-seven per cent of all seaborne cargo entering Europe comes through Rotterdam and Amsterdam. Amsterdam, fifth largest deep-sea port in NW Europe, 15 minutes from Schiphol Airport, handles over 600,000 automotive units annually. Rotterdam, the world's biggest seaport, is Europe's mainport.

Amsterdam International Airport at Schiphol, rated the best by European business travelers for 14 years, is currently the second biggest and fastest-growing air cargo center in Europe, with direct flights to Detroit and 14 other US and Canadian cities.

In addition to the mainports, Dutch multimodal, road, rail and water communications to the European hinterland are excellent. Extensive underground pipeline systems are also available.

Bonded warehouses mean that business does not have to pay customs duty or VAT up front. Companies also have the option of outsourcing warehousing and distribution.

European Distribution Centers

Supply chains within the Netherlands increasingly lead to European Distribution Centers (EDCs). Fifty-five per cent of all Fortune 500 EDCs are in the Netherlands and 755 are outsourced there. More than 50% of all US and Japanese EDCs are here too (57% US and 56% Japanese). Value-added logistics (VAL) adds an extra 7% to the EDCs. Additionally, centralizing operations at an EDC can lower costs by an average of 22%.

Manufacturing

Paccar through DAF trucks and buses has a long manufacturing tradition in Brabant. At the NedCar plant in Born, Limburg, the assembly of Volvo S40 sedans and V40 sport wagons together with the Mitsubishi's Carisma and Spacestar is computerized and robotized. The plant meets the requirements specified by industry gurus. These include inter-company collaboration and the use of a shared platform for different models. A third requirement is the local presence of co-makers able to deliver integrated systems to the assembly plant just-in-time. This last requirement is being optimized by the establishment of component-supply-dedicated business parks in the immediate vicinity of the plant.

Shared services

The Netherlands is European leader in Pan-European call centers and shared service centers, providing nerve centers for their logistical and customer service operations. It also offers the option of a headquarters function. Multilingual human resources and high quality liberalized telecommunications also guarantee the success of Dutch-based operations. Examples include Bax Global, Eaton, Meritor and Nissan, and of course Mercedes Benz European Customer Assistance Center.

Business climate

The climate for business is enhanced by the stable tax regimes; while statutory corporate income tax is 35%, the effective corporate tax burden is 23.16%, according to figures provided by Baker and McKenzie. Tax planning enables business to determine its tax liabilities in advance and personal tax exemptions for expatriates (the 35% ruling) lead to excellent conditions for business. Of the workforce, 38% are on flexible part-time or short time contracts and are available to companies with fluctuating production needs.

Education and R&D

High quality educational and R&D facilities complete the picture. The Netherlands is well endowed with specialist research and educational centers, among them are the technical universities of Delft and Eindhoven, the latter with its own automotive engineering department.

The Netherlands Organization for Applied Scientific Research (TNO) has its own world famous road vehicle research institute, including the world's biggest servo-hydraulic crash sled (maximum force 4,000kN). MSX International, providing engineering/design capability to OEMs, is expanding in the Netherlands. Chemical and plastics research and environmental technology are close by. Business management training for the automotive industry is also available, with 400 students graduating in this discipline each year.

Development agencies

Specialized regional development agencies with their experienced project managers provide business with ongoing support in setting up new European operations and restructuring existing facilities, using the Netherlands as an optimal base.

The Netherlands Automotive Group (NAG) is constituted by representatives of the partners listed below. The enclosed leaflets give examples of their services.

The Greater Amsterdam Area

- City of Amsterdam
- Port of Amsterdam
- Schiphol Airport Area Amsterdam
- Almere New Town
- Province of Limburg
- Province of North-Brabant

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