As a result of strong year on year growth since its establishment in 2008, the Lithuanian production facility of UK manufacturer Albright is set to reach peak production this year. This means Albright Lietuva, the firm’s Lithuanian sister company based in Klaipėda Free Economic Zone (FEZ), is now considering a number of options in order to effectively manage such high levels of output, including new shift patterns and expansion of its premises.
Production levels at Albright Lietuva have grown rapidly and consistently for several years, and jumped significantly in 2015. Turnover was up by a third last year whilst production exceeded 2014 levels by 20%. Should the company hit this year’s target of increasing production by a further 10%, then the Klaipėda facility, which is already Albright’s biggest global producer of switches, will reach its production capacity.
“It is likely that this year we will be assembling the maximum number of switches which can be produced in the present premises working in one shift,” explains Ramūnas Barcevičius, the Executive Director of Albright Lietuva. “Currently, our shareholders are not considering expanding the factory because there is no vacant land around our plant in the FEZ,” he continues. “In the future, introducing a schedule of work in several shifts remains a possibility as another way to expand production. However, this option is not included in our plans for the immediate future,” says Mr Barcevičius, adding that the British corporation likes to remain tight-lipped about its future plans.
24-fold increase in weekly production
At present, the major challenge for the company located in Klaipėda is to smoothly and efficiently fulfil the growing number of orders it receives from its parent company. Whilst some of the slack can be picked up by Albright’s factories in China and England, the Klaipėda plant remains the firm’s biggest producer of switches, and lately operations have been particularly intense.
“At the beginning of operations, we used to produce about 1,000 switches per week. Now we assemble almost 24,000, which means it is not simple to manage all the processes and to ensure smooth production”, stated Mr Barcevičius. Currently, the facility has about 110 permanent employees, hiring up to 20 more for temporary periods in order to manage sharp increases in demand.
Investment to expand storage facilities
Albright’s facility in Klaipėda, a strategically located ice-free port, produces for export only. Switches from the facility are shipped to Great Britain, Italy, France, Germany, Hungary, the Czech Republic and Scandinavia. Albright Lietuva does not have to search for orders, as its parent company does this through its global network of sales divisions. “We do not have to worry about logistics solutions either,” continues Mr Barcevičius. “Our customers arrange trailers to transport the produced switches from our warehouses.”
Expanding storage capacity for both finished produce and parts is now a priority for Albright Lietuva. “We still have to store the finished produce, however briefly. As production volumes have rapidly increased, our warehouses have now become too small. As a result, we plan to allocate about €100,000 for their expansion this year”, says Mr Barcevičius. The expanded warehouses will also be used for storing parts, about 80% of which come from the parent company. The remainder is purchased directly from producers, and recently the share of parts procured directly has been increasing as this makes quality control simpler according to Mr Barcevičius.
Source: Verslo žinios
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