Hewlett-Packard
Hewlett-Packard is a key player in Scotland's electronics industry, providing global technology solutions to consumers and businesses. Founded in 1939 in California, and with a Scottish base in Erskine, near Glasgow, since 1987, the company's services include IT infrastructure, personal computing, and imaging and printing for consumers and small to medium sized businesses. HP has an annual turnover of $103 billion and employs 140,000 people around the world – 2,000 of these in Scotland.
Facing challenges in recruitment, uneven work loads and global competition, HP has responded by accessing a ready pool of experienced labour, introducing flexible working patterns and adding value to its products. Consequently, capacities have been matched to order loads, manufacturing operations are very healthy and the Erskine campus – an idyllic green belt location – continues to expand.
Boasting a strong market position in most of its product areas and an industry-leader in the global PC market, HP provides hardware, software, solutions and services. Approximately five years ago, HP took over Compaq, adding that company's strengths in desktops and servers to its own industry-leading printer business. The Erskine campus combines a manufacturing role (HP assembles about 30 different models here) with a Teleweb contact centre and service functions.
When HP first established a presence in Erskine, the presence of IBM in nearby Greenock guaranteed a source of suitably qualified labour. All HP had to do was match the wages being offered elsewhere. As the workforce grew and output began to increase, a different kind of challenge presented itself, which continues to this day. As Alan Macintyre explains:
"Logistics can be a bit of a problem. Being so close to Prestwick and Glasgow airports helped in the early days, but as the freight network becomes more expensive, so it becomes more of a factor."
One thing that has helped to redress the balance in recent years is the introduction of a flexible working pattern. Alan explains: "Due to the nature of our business our order intake is very uneven. We're much busier in some months than others, which can create real problems if you've got a fixed level of workforce – they're either too quiet or racking up too much overtime."
The solution has been to introduce a more flexible system that allows operators to do fewer shifts when it's quiet and more when it's busy, but to get paid the same regular wage throughout. "It has been fantastic for our business, allowing us to match capacities with order loads and better compete in international markets."
Talking of international markets, Germany and Ireland were both strong contenders for HP's early expansion plans. What swung the decision in Scotland's favour was partly the prospect of a Regional Selective Assistance Grant, but mostly the established manufacturing presence, admits Alan. "IBM in Greenock, Digital in Ayr, Motorola and other companies were all involved in Silicon Glen activities. So we had an easy pool of people experienced in the industry; people who knew what standards we would expect."
How Scottish Development International helped
Although he's quite new to the role, Alan is already delighted with the support he is receiving from Scottish Development International:
"They're very good at making sure we know what's available in terms of grants, as well as providing support in filling out applications. They're in our face more often than we're in theirs – which is a good thing!"
Lessons learned
While HP is very proud of its manufacturing plant at Erskine, Alan would be the first to admit that it hasn't all been plain sailing. "Rather than trying to compete with the developing markets in terms of pure cost, we continually reinvent ourselves." By adding more and more value to what it produces, HP continually differentiates itself from its competitors. And the policy seems to be paying off. "The first thing customers always say to us when we give them a tour of the site is: 'I never knew you could do that'. We can build equipment exactly the way they want it, test it and integrate it, so that it's up and running the moment customers switch it on."