Friday, July 19, 2019

How Pandora Jewellers reaps the benefits from flexible production teams

Jun 19. 2019
 Larry Chao, managing director of Chao Group Limited
Larry Chao, managing director of Chao Group Limited
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BY PUTTING people at the centre of its manufacturing strategy, Pandora Jewellers has been able to combine craftsmanship and efficiency to produce high-quality jewellery for the masses.

“Thirty pairs of hands touch even the simplest piece of jewellery we make,” said Nils Helander, the SVP manufacturing and managing director at Pandora A/S in Thailand. “We want to ensure handmade craftsmanship in every important step of the manufacturing journey.”

Visit one of Pandora’s manufacturing buildings at the Gemopolis Industrial Estate on the outskirts of Suvarnabhumi airport and one can see how the production set-up enables Pandora’s Thailand team of 13,000 employees to add value in the most productive way.

At the heart of the manufacturing process is what Helander, 50, refers to as “flexible work cells,” where teams of 20 employees, work side by side in a well-orchestrated rhythm. Each team is guided by a team pacemaker, who overseas rapid consistent manufacturing. Individual work stations are designed to support the kind of intense concentration and delicate handiwork needed to ensure stones are properly set with no room for error.

“With the assistance of technology and feedback on performance, pacemakers are able to identify opportunities to improve efficiency or reduce errors and continuously improve output,” said Helander. 

This enables Pandora to minimise material wastage to an industry best of just 3 per cent of output, compared to an industry average of around 11 per cent.

Much of Pandora’s manufacturing savvy has been advanced by Helander himself, who joined Pandora in 2016 after an extensive career in manufacturing and supply chains with consumer product giants, including Nestle and most recently Unilever in China.

“Working with consumer products companies, I have been able to apply some principles in manufacturing from fast-moving businesses, where margins are often razor thin and productivity is the name of the game. The challenge is to tailor what we know without losing the essence of craftsmanship. To do this, we start with people and organise processes around them.”

The results speak for themselves. Over the past two years, Pandora has reduced average lead times – when a customer places an order to when the order is delivered, from eight weeks down to two weeks.

One of the most remarkable aspects of the flexible work cell is its ability to quickly changeover production lines. Each work cell is equipped with the capability and team skill-set to manufacture any product. 

“We can changeover production lines with no slack time. Our workers are trained to be multi-skilled. 

This allows us to be even more flexible and productive, whether we are producing bracelets, rings or necklaces,” said Helander.

Over time, the flexible work cell concept has enabled Pandora to scale up and become one of the dominant players in the mid-tier jewellery business. “Last year, we set 1.7 billion stones by hand,” according to Helander.

Pandora’s manufacturing philosophy also offers consumers more value for money.

“Although our brand may not be perceived as ultra-high end such as Tiffany or Cartier, we aim to provide our consumers great value. For example, our competitors might put Bt4,000 worth of gold in a piece of jewellery and sell it for Bt150,000, whereas we would sell a similar piece of jewellery for a fraction of that price.”

What guides much of Pandora’s decision-making when it comes to designing and pricing products is a commitment by its founders Per and Winnie Enevoldsen to produce jewellery that people can afford in a responsible way. Call it the democratisation of jewellery, said Helander. Moreover, Pandora uses 100 per cent recycled gold and silver that can be traced back to its sources.

As far as the future of Pandora is concerned, it is all about continuous improvement in the manufacturing process with an eye to innovation, while continuing to be a responsible corporate citizen.

 “We are always looking for ways of making distinct, high quality jewellery that is lighter, stronger and more beautiful,” Helander said. “If we can do this and continue creating distinct designs and value for money, we can provide our consumers with an enriching experience they can feel proud of.”

LARRY CHAO is managing director of Chao Group Limited, a manufacturing consultancy based in Bangkok and New York since 1995 []


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