www.themanufacturer.com May 2012 Vol 15 Issue 5
www.themanufacturer.com | May 2012 | Vol 15 Issue 5
A tabled
Manufacturing Leadership
If I had a little money: How to get the finance you need Semta send-off: Bidding adieu to the SSC’s CEO
Workforce and Skills
UTC Diary: Insight into an education shake-up
Business of Manufacturing To Russia with love: Export opportunities in Russia
Manufacturing Technologies
Manufacturers face up to food security threats
A fiendishly boring problem: Drilling into challenges for the nuclear industry
IT in Manufacturing
Green machine: Squaring up to the environmental footprint of corporate IT
Interview Paul Grimwood
CEO, Nestle UK and Ireland
Factory of the month Eaton Hydraulics
ial Spec report, und outbo ance for rs Fin facture u Man 2 available ! 201 this issue with
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Editor’s comment
Back to ground zero – again! Manufacturing is enjoying a resurgence in publicity and productivity – albeit a challenging one. Indeed, corporate rescue and recovery firm Begbies Traynor recently published research which shows UK manufacturing is recovering ahead of other sectors which continue to exhibit far greater levels of business distress. Nevertheless, it is a case of ‘could do better’ and the scope for moving forward faster was never more evident than at a meeting attended by in Westminster last month. Gathered at the event were journalists, MP’s and industry spokespeople – including the new manufacturing enthusiast Deborah Meaden who recently acquired Somerset-based textile manufacturer, Fox Brothers. The purpose of this meeting was to discuss how the media, government and industry could work together better to raise the profile of UK manufacturing and improve understanding of the hurdles it faces in the race for competitiveness. However, after lengthy discussion of the lack of public knowledge about the exciting careers in manufacturing and complaints about access to finance – particularly for entrepreneurs bringing new technologies to market – there had been no mention of any of the government, trade body or industry-led initiatives already in existence. No one, with the exception of Business Minister Mark Prisk, referred to See Inside Manufacturing, the Big Bang, WorldSkills or UTCs (p38) as addressing skills and perception challenges. No one acknowledged the existence of organisations like Pera (p59), which helps companies find R&D grants, the Catapults which put advanced manufacturing technologies at the disposal of entrepreneurs, or government loan schemes for SMEs (see out outbound report Finance for Manufacturers).
www.themanu facturer.com May
www.them anufacturer. com | May
2012 | Vol
2012 Vol 15
15 Issue 5
Issue 5
Manufac turin
g Leadersh If I had a little mone ip the financ e you need y: How to get Semta send -off: Biddi the SSC’ ng adieu s CEO to
Workforce and Skills UTC
A tabled
Diary: shake-up Insight into an educ ation
Business of
Manufac To Russ turin ia opportunit with love: Export g ies in Russ
ia Manufac turing Tech
A fiendishly nolo Drilling into boring problem: gies challenges nuclear indus for the try
IT in Man
ufacturing Green mach environmen ine: Squaring up to the tal footprint of corporate IT
Interview Paul Grim wood
CEO, Nestle
UK and Ireland
Factory of the
Eaton Hydra ulics
month
Manufac turers face to food sec urity threaup ts
Special rt, repo outbound for Finance rs ture Manufac able 2012 avail ! with this issue In partnership
with:
Cover image: Food security threats are growing. See p16 for our lead story.
All these initiatives, and many more, have success stories to tell and have often touched tens of thousands of people (certainly the case with Big Bang and Bloodhound). How much more constructive could discussions of how to improve prospects for manufacturing be if these initiatives were better communicated? Returning time and again to the ground zero of identifying well observed problems, it would be more productive if there was a more focussed discussion around how to improve existing initiatives and amplify their impact. While communication needs to be intensified through varied channels, it usually takes just a few minutes of internet browsing to discover a relevant scheme in every region. What certainly does need to improve is the quality of data capture and impact analysis being carried out for initiatives. Without access to numbers to crunch it will remain difficult to quantify and improve the impact of these programmes. Ignoring the solutions already available means those passionate about manufacturing will continue to be frustrated and improvement will always be out of reach. Jane Gray, Editor
16
LEAD STORY
20 INTERVIEW
44
Export Focus: Russia
68
It in Manufacturing
1
The team Nick Hussey, Managing Director Nick has 20 years of experience in the publishing industry spanning titles in the UK, US, Asia and Australia. In addition to his commercial enterprise experience Nick has also worked in government, spending a year as Managing Director of Manufacturing Insight, a programme aimed at changing the image of Manufacturing. He holds several non-executive directorships and is a founder member of the IET’s Manufacturing Policy Panel. n.hussey@sayonemedia.com
Editorial
IT Editor Malcolm Wheatley malcolm@malcolmwheatley.co.uk
Associate Editor Roberto Priolo
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Editorial Assistants George Archer
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Tom Moore
t.moore@sayonemedia.com
Design
Art Director Martin Mitchell
Henry Anson, Sales Director
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Henry is a shareholder in SayOne Media and responsible for the company’s commercial activities developing new concepts and products for The Manufacturer’s readership. Henry is keen to build a bridge between the manufacturing community and sector which supports them. h.anson@sayonemedia.com
Designers Alex Cole Vicky Carlin
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Sales and Events Head of Events Jon Tudor
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Marketing Executive Grace Gilling g.gilling@sayonemedia.com
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Jane Gray, Editor
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Jane joined SayOne Media in 2009 for the launch of the Lean Management Journal, sister publication to . Reporting concurrently for The Manufacturer, Jane focused on industry skills development features and lean enterprise until she became editor in June 2011. j.gray@sayonemedia.com
Tim Brown, Web Editor Tim joined SayOne Media in 2009 after working as a journalist for six years in Australia on a range of lifestyle and business magazine publications. His primary areas of interest include the automotive industry and business development. t.brown@sayonemedia.com
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Contents 04 News and regular columns. A whistle stop tour of manufacturing news and events in the last month along with commentary on industrial research, legal issues and economic challenges for manufacturers.
15 The Naked Engineer
Our frustrated manufacturing leader dives into the merry circus of R&D tax claims
14 Lead A tabled issue: Jane Gray discovers the looming threat of food security and what it means for manufacturers
20 Interview Feed me till I want no more: Jane Gray talks to Nestlé UK and Ireland’s CEO, Paul Grimwood about how to represent the interests of UK manufacturing within a global organisation and the company’s dual responsibility to lead on solutions to world food shortage on the one hand and rising obesity on the other
Pillar features 29 Manufacturing Leadership
If I had a little money: Looking behind the vilification of banks to find out what manufacturers should be doing to make themselves attractive finance prospects
32 Semta send-off: Bidding adieu to the sector skills council’s CEO, Philip Whiteman, after eight years at the helm
38 Workforce and Skills
UTC diary: Chris Hilton introduces the Black Country UTC and the new education model set to make a “poverty busting” change to the UK education system
39 Employee of the month
Luke Thickett, Apprentice, Newburgh Engineering
44 Business of Manufacturing
To Russia, with love: Tom Moore rumbles with the ruble and finds out what it is like to do business in the UK’s fastest growing export market
50 Factory operations
What’s the worst that could happen?: Explaining the relationship between maintenance and business continuity planning. Do manufacturers need both?
54 Manufacturing technologies
A fiendishly boring problem: Will Stirling and representatives from the Nuclear Advanced Manufacturing Research Centre get geeky over the institution’s latest piece of kit and its challenging quest for a ‘green button’ boring process
59 Discovering innovation: Pera Technolgy’s CEO explains why structured innovation
needs to become common place in British manufacturing companies and how Pera can help find the finance to support this
62 IT in manufacturing
Green machine: From megabytes to megawatts. Malcolm Wheatley uncovers the environmental footprint of corporate IT and the opportunities available to reduce it
68 Creo 2.0: An assessment of the progress being made in PTC’s reinvention of Pro/Engineer
72 IT news
Manufacturinginaction Each month conducts interviews and case studies with companies from the whole gamut of UK manufacturing from large multinationals to niche SMEs across sectors. This month visits:
78 Eaton Hydraulics – Hydraulic pumps 86 Quinn Glass – Glassware
Loo 201 k out fo 2 r ’s Fi outb Ma nance ound nufa for 20 ct circu12 Repurers o la this ted wit rt issu h e
96 The last word
Will Stirling examines what ROI MACH exhibitors extracted from this year’s show
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Manufacturing
Return of the
Organised by the Manufacturing Technologies Association (MTA) and sponsored by Lloyds TSB Commercial
‘ M A N - made ’ technolo g y at M A C H More than £1.5m worth of new technologies were unveiled at MACH 2012 by The Midlands Assembly Network (MAN). The collective of ten world class manufacturers in mechanical, electrical and electronic engineering includes: Advanced Chemical Etching, Alucast, Barkley Plastics, Brandauer, FW Cables, Lightning Aerospace, PP Electrical Systems, SMT Developments, Westley Engineering and Wrekin Circuits.
Well over
MACH 2012 20,000
One outstanding performer, Mills CNC, made over
490
Featured some
2,500 £1.8m
people attended including
exhibitors
young people
in sales at the show
and some 5,000 tonnes of working machinery
B u siness S ecretary visit The Rt Hon Dr Vince Cable MP, visited MACH 2012 and attended many of the exhibiting stands at the trade event including software specialists Delcam, which secured 200k in orders at the event. “These technologies feed into the value chains of so many businesses both here and in the UK, and are vital to creating a thriving, balanced UK economy,” Dr Cable said.
Rt Hon Dr Vince Cable MP visits MACH 2012
Unison q u ic k - chan g e tool At MACH 2012, Unison launched an innovative quickchange tooling system that dramatically speeds tooling changes on its all-electric tube bending machines. The system covers all of the tooling components on the machine, and includes barcode identification to verify the changeover process. A fully validated changeover involving six tools can be accomplished in less than three minutes.
UK man u fact u rers losin g £ millions to metal waste At MACH, machine-tool waste specialists, Nederman, released the What a Waste report which focuses on the practices of metal machining manufacturers. The report revealed that average businesses are losing between £172 and £780 on every tonne of metal waste they recycle. Nederman offers design and installation of mechanised recycling systems for wastes such as metal swarf.
J J C h u rchill awarded at M W P Held at the Birmingham Hilton Metropole during the MACH Exhibition week was the MWP Advanced Manufacturing Awards. The winner of the night’s overall Grand Prix Award, and the winner of the Best Subcontractor prize was precision engineering firm JJ Churchill, a first-tier precision, sub-contract machinist for blue-chip OEMs. Other winners included Robotic Automation, Sandvik Coromant, Joseph Rhodes and Renishaw.
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We’ve seen nearly 60 enquiries received during the course of the week making this one of the best MACH’s ever for the Midlands Assembly Network (MAN). Interestingly, a number of the people we’ve spoken to were keen to talk about repatriating work back to the UK due to quality issues and the fact it is no longer cheaper doing business in the sub-continent Gerry Dunne, Chairman, Midlands Assembly Network (MAN) and MD, Westley Engineering
What the Twitterati had to say about MACH 2012 @MACHexhibition MACH pre-registration figures up 22% on MACH 2010. Visitors thronging the aisles. @TheManufacturer 68 schools, colleges and training groups attending the Education & Training zone. @Ace_ChemEtching The penultimate day at #Mach2012 has been good, looking forward to tomorrow. @renishawplc Back home after a fantastic week at #MACH2012, great interest in Renishaw’s involvement in additive metals.
Manufacturing E x p orts Redditch-based metal contacts and contact materials specialist Samuel Taylor won an export order to the USA worth approximately £8 million. The order means that the company’s turnover has increased to more than £25m. The contract will deliver thousands of specially developed components for energy saving smart meters to an American manufacturer. Smethwick-based Baylis Automotive secured a £35m contract to supply high level assemblies. The contract will last for seven years and will double turnover for the company to £14.5m per annum from 2014. Work for the contract is international and has come as the automotive industry prepares for stringent new regulation on air pollution omitted from trucks and commercial vehicles expected in December 2013. A report released by EEF and RBS said that appetite for investment in manufacturing firms is increasing. The upswing is largely attributed to parallel increases in export demand. Sixty five per cent of companies surveyed said exports grew in 2011 and 70% expect them to grow in 2012. Greatest stock is placed in prospects in India and South East Asia where a third of companies see opportunity. China and the Gulf states came close behind these markets in estimations of their value to UK manufacturers.
F ood and D rin k The Food and Drink Federation announced plans to launch the UK’s first Food Engineering Degree. University partners to deliver the course are now being sought out. Sector skills council, Improve, and the National Skills Academy for Food and Drink are also collaborating on the project. The project has received wide industry backing – including support from big brand names such as Nestlé, Mars and Kraft Foods.
Milk producer Dairy Crest announced plans to close two dairies putting 500 jobs at risk. The closure of the company’s glass bottling plant in Aintree, Merseyside, will result in the loss of 220 jobs, with another 250 people facing the axe in Fenstanton, Cambridgeshire. In a double blow, the company have also announced the withdrawal of a large contract by Tesco. Dairy Crest has £75m of ongoing investment in other UK factories. Business Minister Mark Prisk has pledged that all comments submitted to the new Focus on Enfocement scheme will be read. Some image rights reserved by the Department for Business Innovation and Skills
Government PPMA’s Chinese offices which are being offered up as a base for all UK manufacturers looking to enter the market The Process Packaging and Machinery Association issued an invitation to UK manufacturers to make use of their Chinese offices as a base for market entry. The not for profit association said they would help manufacturers slash the cost of exploring China as a potential market through this initiative, dubbed the Dragon Service. Previously only been open to PPMA members this service is now available to all UK manufacturers. In addition to office space PPMA have said they will employ, on their own payroll, a member of staff to work for any interested UK manufacturer and will handle all Chinese HR and employment issues. The employee would be re-charged at cost and a small share of the Chinese office overhead. (more export news on p45)
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The Government has launched a new scheme called Focus on Enforcement. This initiative promises to improve the way in which business regulation in the UK is enforced; building on the work of the Red Tape Challenge which aims to simplify and reduce the quantity of regulation businesses must comply with. Business Minister, Mark Prisk, has pledged that all comments and advice submitted to the Focus on Enforcement website will be read and that the best will be selected for swift action.
A u tomotive Nissan’s announced that a decision to manufacture a new hatchback model at its Sunderland plant will create 225 jobs in the factory, with a further 900 jobs at companies in the supply chain. The announcement was made by Prime Minister David Cameron and Nissan chief operating officer Toshiyuki Shiga, during a visit to Nissan’s headquarters in Yokohama, Japan in April.
News S teel
M an u fact u rin g L eadershi p
Indian-owned Tata Steel said it will invest £800m in upgrading its steel plants in Wales over the next five years. The news was announced by Wales’ First Minister Carwyn Jones on his return from a trade mission to India, where he met with Tata Steel’s vice president Balasubramanian Muthuraman. During a meeting in Mumbai, the pair discussed Tata Steel’s ongoing plans in Wales, where the company makes hot-rolled, cold-rolled and metallic-coated strip steels for the likes of BMW Mini in Port Talbot and coated metals for roofing and cladding systems in Shotton.
Tributes were paid to Jim Marshall, creator of the famous guitar amplifier, who died aged 88. Marshall Amplification was founded in 1962 in London and is world-renowned for its amplifiers, with past clients including Jimi Hendrix, Eric Clapton, Guns N’Roses and Nirvana. Mr Marshall received the Queen’s Award for Export Achievement on two separate occasions, and was appointed an officer of the Order of the British Empire in 2004.
R ecyclin g and W aste Salford-based recycling specialist Axion Polymers added Axpoly PP51, derived from end-of-life vehicles (ELV), to its range of 100% recycled polymer materials. The development comes on the back of months of detailed research and significant investment. The company claims its new high performance grade of black polypropylene (PP) has great potential for closedloop applications in new automotive-related products. Axpoly PP51 is made from automotive shredder residue recovered from ELV at Axion’s multi-million pound Shredder Waste Advanced Processing Plant.
Manufacturers including McLaren, Siemens, Mars, Airbus, The Royal Mint and Sunseeker have been selected to take part in the Make it in Great Britain national exhibition to be held at the Science Museum in London during the Olympic and Paralympic Games. Beating competition from hundreds of UK companies, they will join around 40 others displaying the best that British industry has to offer. The exhibition aims to raise awareness of the dynamic, advanced and innovative products which are produced in the UK today.
S p ace Minister for Universities and Science David Willetts signed an agreement with Japanese officials for greater collaboration on space research and technology. The partnership was signed with the Japanese Economy Minister Motohisa Furukawa and will seek to identify commercial opportunities for industry to act on. One of the key areas for collaboration is on earth observation technology, run by Surrey Satellite Technology such as the NovaSAR programme to fly radar satellites around the Earth or the Disaster Monitoring Constellation that takes images of natural disasters.
W or k force and S k ills The government launched the new National Careers Service. This will provide information and advice for approximately 370,000 young people through a helpline and website. The Department for Business, Innovation and Skills said that the service will also offer face to face advice to 700,000 adults each year. To help plug skills gaps, the National Careers Service will provide detailed sector by sector labour market information so people can discover which industries are growing in their area. Research carried out by the awarding organisation for industry qualifications EAL highlighted that employers in the manufacturing and engineering sector are less likely to recruit school leavers while unemployment remains high due to the greater availability of more qualified and experienced applicants. Almost half (48.2%) of manufacturers said the availability of older and more experienced candidates made them less likely to offer opportunities to school leavers.
JCB announced record results for 2011 as international demand booms
C om p any R es u lts Digger manufacturer JCB reported a record £2.75bn turnover for 2011, a £235m increase 2010. The Staffordshire-based company saw sales rise from 51,600 units in 2010 to 69,100 in 2011. Sales have surged with the mass of construction projects now being undertaken in the BRIC nations as well as in Africa. In 2011 JCB invested £31m a new engine development plant based in the UK and has assured investment will continue in UK plants significant investment in facilities to locally service foreign markets. BMW, the world’s biggest luxury carmaker, reported record sales in the first three months of 2012 thanks largely to strong demand for its UK-manufactured Mini and Rolls-Royce brands. BMW sold 426,000 cars between January and March which was 11.2% more than in the same period of 2011. BMW makes the official cars for London’s 2012 Olympics.
For all of the latest news in the manufacturing world visit www.themanufacturer.com
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Manufacturing A u tomotive
McLaren Automotive is to launch two new road cars following the success of its first commercial car the MP4-12C McLaren Automotive revealed plans for two further roadcars following its success with the MP4-12C. The next two roadcars, the P12 and P13, are in the design phase of production. McLaren said it is planning to make the P12 the
lightest supercar yet, with a target weight of 1,140kg. It will cost in the region of £1m and it is hoped to achieve a top speed of around 260mph. The McLaren P13 will cost between £6080,000 and is set to be revealed at the Geneva Car Show 2013.
WORKFORCE AND SKILLS
By value 25% of the Boeing 787 Dreamliner is manufactured in the UK
The National Training Awards and National Apprenticeship Awards have joined forces for the first time to identify the UK’s top apprenticeship and training providers. Both awards, which are run by the National Apprenticeship Service, are now open for entries on a regional and national level. The National Training Awards are calling for entries from organisations that have delivered outstanding training programmes. This year the National Training Award and National Apprenticeship Award winners will celebrate their success together at Europe’s largest skills and careers event, The Skills Show, held at the NEC Birmingham on November 14.
PHARMACEUTICALS AEROSPACE Boeing introduced its new twinaisle aircraft, the 787 Dreamliner, to its UK customers, partners and suppliers at Heathrow Airport. By value 25% of the new Boeing model is made in the UK. Suppliers include RollsRoyce which makes the Dreamliner’s Trent 1000 engines, each capable of producing 700,000 pounds of thrust. The Dreamliner is primarily made from composite materials and Peter Hall,
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public relations manager of Messier-Bugatti-Dowty, the French-British manufacturer that makes the plane’s landing gear and electric brakes, said: “Boeing really encouraged suppliers to introduce new materials”. The production rate for the 787 is now set at 3.5 Dreamliners per month.
Life Technologies, a US biotech company announced a £12.4 investment in its Scottish site near Inchinnan. The investment has been made to meet rising demand for cell culture products used in drug R&D and production. The Inchinnan facility won the investment after a global competition between Life Technolgies’ sites and its success was attributed to it skilled workforce. The investment is expected to create 30 jobs in the immediate future.
News S tri k e A ction Unite the union announced that it is to take legal action against Austrian-owned Mayr-Melnhof Packaging (MMP) over the unlawful dismissal of its workforce. The firm makes packaging for some of the most popular breakfast cereals in the UK, including Nestlé’s Frosties and Kellog’s Rice Krispies and Cornflakes. MMP locked staff out of the factory in February and then sacked 53 workers after the shock announcement that the plant was to shut. Unite have claimed that, because they were not consulted over the decision to close the MMP site, this breaches both UK and European legal obligations.
E ner g y and C limate C han g e A report from the Energy and Climate change Committee urged government to create climate change policy founded on consumption-based data and avoid outsourcing carbon emissions in order to meet national CO2 reduction targets. The report highlighted the global environmental impact of goods consumed in the UK but manufactured overseas. According to the Energy and Climate Change Committee taking a consumption-based approach to emissions data shows that, far from having reduced its overall emissions since 1990, the UK has in fact increased carbon dioxide emissions by 20%.
M an u fact u rin g T echnolo g y Scientists at Glasgow University revealed pioneering applications of 3D printing which could lead to new production methods for customised medicine. Researchers at the university used 3D printers to create organic compounds and inorganic clusters, some of which are used in cancer treatments. Those involved in the project said they expect this development to establish itself in pharmaceutical firms within five years.
Datesfor yourdiary May
15-17
Safety & Health Expo 2012 at the NEC in Birmingham. The expo offers over 100 hours of educational content and demonstrations with leading speakers from industry making the trip to Birmingham to discuss the most pressing issues of today. www.safety-health-expo.co.uk
16
Bombardier Transportation hosts a Winners Company Tour at its site in Derby after winning the People Effectiveness Award at the Institution of Mechincal Engineer’s Manufacturing Excellence (MX) Awards in November 2011. There will be a guided tour of the train assembly line. The event is free. www.mxawards.org/mx-club/bombardier-tour
22
EEF’s Changing Terms and Conditions of Employment knowledge-building event in Gateshead is available to EEF members for £345 and non-members for £395. The same event will then take place in Hook, Leeds and Birmingham on 24 May. Call 0845 293 9850 or visit www.eef.org.uk/events
23-24
The medical device technology exhibition Medtec UK, sensor and measurement show Mtec and contamination event 3C are at the NEC in Birmingham. A new event, Midlands Design and Manufacturing will run concurrently, focusing on the end-to-end manufacturing cycle. www.manufexmidlands.com
29-30
The National Manufacturing Debate 2012, hosted at Cranfield University, will address the theme of ‘Enhancing the Supply Chain for Growth’. Now in its third year, this free event will take place over two days with tours and demonstrations of Cranfield’s facilities. The National Manufacturing Debate will be chaired by Will Stirling, Editorial Director at . www.cranfield.ac.uk/sas/manufacturing/events/debate
29-30
The Plastics Design & Moulding exhibition takes place at London’s ExCel with a summit and seminar programme free to attend for all exhibitors and visitors. www.pdmevent.com
29-30
The second annual Product Design & Innovation Conference at which London’s ExCel will explore how product designers can drive economic growth. Design heads from leading global brands Philips, BMW, Whirlpool and Bosch contribute to the Product Design and Innovation conference. www.pdesigni.com
June
12
Now in its fourth year, the SMMT International Automotive Summit in London will begin and end with keynote addresses from global board members of major automotive companies and senior political figures. The conference will focus on the changing face of vehicle retail, innovation in ultra-low carbon technology and growth in the supply chain. www.smmt.co.uk/summit
July
3
hosts Business Intelligence Connect at Ansty Hall, Warwickshire. Contact Sarah Hough: s.hough@sayonemedia.com for sponsorship details and Benn Walsh: b.walsh@sayonemedia.com for delegate information
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hosts Flex for the Future, a conference investigating flexible workforce options for manufacturers. The venue is the Hilton Birmingham Metropole. Contact Sarah Hough: s.hough@sayonemedia.com for sponsorship details and Benn Walsh: b.walsh@sayonemedia.com for delegate information
For all of the latest news in the manufacturing world visit www.themanufacturer.com
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ManufacturingAppointments UK Appointments David Greenan Newburgh Engineering
Newburgh Engineering appointed David Greenan as managing director. Mr Greenan started at the company as an apprentice in 1968, becoming operations director in 2005. He takes the place of Vincent
Middleton, who became chairman after his cousin Tony Middleton retired in March. Greenan said: “After spending my whole career at Newburgh, I am honoured to become the managing director.”
Nick Spetch Parvalux
Nick Spetch has become managing director of geared motor manufacturer Parvalux. Prior to joining Parvalux several years ago, Mr Spetch fronted RS Components as group sales director for UK and Ireland. He has extensive experience within sales, logistics
and e-commerce. Parvalux CEO Steven Clark said: “Nick has been instrumental in growing our business from £6m to over £18m in six years. With the support of the board, he will be pivotal in the delivery of our strategies for growth.”
Dr Paul Golby CBE The Department for Business, Innovation and Skills
The Department for Business, Innovation and Skills has appointed Dr Paul Golby CBE (pictured here during his time at E.ON) as the new chairman of the Engineering and Physical Sciences Research Council. He succeeded John Armitt on April 1. Dr
Golby was chairman and chief executive of E.ON UK until December 2011. Previously he worked for Powergen becoming director of UK operations. He has been chair of AEA Technology Group since 2009 and joined the board of National Grid in February this year.
Jan-Paul Boos RedPrarie Corporation
Jan-Paul Boos took on the role of vice president of sales for EMEA supply chain at supply chain and retail technology provider RedPrairie Corporation. Mr Boos has a wealth of experience and knowledge gained from working for more than 18 years with a number of
retailers, distribution companies and manufacturers. He joins RedPrairie from Manhattan Associates, where he held the role of senior director. He previously worked at e-commerce and fulfilment specialist Metapack and at IBM’s Europe Distribution Sector.
Jungheinrich UK appointed Gary Bartram as sales manager at the Very Narrow Aisle (VNA) team within its systems and projects division. The VNA range includes order picking trucks and Kombi trucks that can be equipped with RFID technology that enables them to be automatically guided to the right location in the right aisle. Steve Richmond, director of the systems and projects division, said: “Gary’s appointment reflects our determination to meet customer needs and our commitment to the development of talented people.”
Angela Coleshill, director of HR and competitiveness at the Food and Drink Federation, has been appointed to the Gangmaster Licensing Authority’s board. Ms Coleshill will be representing the interests of food and drink manufacturers, bringing over 20 year’s experience in fast moving operational leadership roles within contracted services, executive search, food production and retailing.The GLA was formed in 2005 to protect workers from exploitation by regulating the gangmasters and employment agencies.
Doug Oakervee CBE, a member of the Association for Consultancy and Engineering advisory board, was appointed as chairman of High Speed Two. Mr Oakervee is the former executive chairman of Crossrail, and led that programme into the implementation phase. He has played a leading role in the development of the London Gateway port project, and was instrumental in the development and delivery of Hong Kong International Airport.
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Rail engineering specialist Rowe Hankins appointed Michael Healy as the new UK sales manager for rail. Mr Healy, a rail industry veteran, is rejoining the company, having previously worked there between 1993 and 2001. He has extensive engineering systems and components experience in the rail industry having worked on supply contracts to Pendolino, Turbostar, Electrostar and Rail-Track projects. He will be responsible for sales of Rowe Hankins’ speed control and wheel flange lubrication systems to rail majors.
International Appointments Kristina Marchitto took on the role of corporate communications manager for North America at Rolls-Royce Motor Cars. An experienced PR professional with a track record in communications, Ms Marchitto will be based in the Rolls-Royce North America office in New Jersey.
Container shipping company CMA CGM appointed Jacques Delort as vice president of information systems and deputy general manager of CMA Systems, the new entity set up as part of the group’s partnership with IBM. Mr Delort previously worked at Crédit Agricole and Steria.
To notify The Manufacturer of your company’s appointments, please contact Roberto Priolo at: r.priolo@sayonemedia.com or: 0207 401 6033
BacktoScuoler
Thebigpicture
Playtostrengths REACHthreatens
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Understanding the UK’s opportunities and capabilities is essential if the country is going to achieve sustainable success in global markets, says Professor Sir Mike Gregory.
s I write, the UK manufacturing sector is showing some signs of growth with a small rise in export orders in March just one of these indicators. This is encouraging, but if such gains are to continue into the long term it is vital that we understand the global context in which UK companies must compete and how that context will evolve over the next 1520 years. This is exactly what a recent study by the Institute for Manufacturing (IfM) set out to achieve. The UK has a well-deserved reputation for the quality of its science and engineering base. However, its ideas and innovations need to be turned into profitable products and services if we are to see real economic benefit. The IfM study, undertaken for the Technology Strategy Board, focused on so-called ‘high value’ manufacturing
The UK has a welldeserved reputation for the quality of its science and engineering base
(HVM) – defined as ‘the application of leading edge technical knowledge and expertise to the creation of products, production processes and associated
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services’. It involved a major consultation exercise with industry, academia and government to identify the trends, drivers, challenges and opportunities for UK manufacturing over the next two decades. Five key strategic themes were identified together with associated skills and competences needed to meet the future challenges: Resource efficiency: protecting against scarcity of energy and other resources Manufacturing systems: increasing the global competitiveness through more efficient and effective manufacturing systems Materials integration: achieving innovation through the integration of new materials, coatings and electronics with manufacturing technologies Manufacturing processes: development for agility and cost effectiveness Business models: for the realisation of superior value systems The findings of the consultation process are summarised in the report ‘A landscape for the future of high value manufacturing in the UK’, which can be downloaded at www.ifm. eng.cam.ac.uk/free Professor Gregory is Head of Cambridge University Institute for Manufacturing. www.ifm.eng.cam.ac.uk/ people
These articles are abridged. For full versions go to
competitiveness
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EEF’s CEO, Terry Scuoler, denounces the EU’s chemical regime as being out of touch with business needs.
f you want an example of exactly how Brussels should not approach regulation, look no further than its chemical regime – REACH. The aims of REACH, which stands for Registration, Evaluation, Authorisation and restriction of Chemicals, are laudable but the approach is complex and costly. Take the process of applying for authorisation to use substances (either alone, in formulations or in products themselves) that are to be subject to widespread bans. So far, 14 substances will be banned in 2014 and 2015. A dozen or so more have recently been recommended for future bans. Authorisation is available because, for certain applications, there may be no known alternative to a substance. It may used in a suitably controlled way or the substance may be used in the production process but not detectable in the final product. It may be safety critical. To gain authorisation companies must pay a €50,000 application fee. On top of this, companies must demonstrate publicly that they have considered other alternatives and that the substance is being adequately controlled. Alternatively, they have to demonstrate that the socio-economic benefits outweigh the risks posed by that substance. The costs of this work risk running into hundreds of thousands of pounds. How can SMEs expect to shoulder this or the complexity of a process in which the guidance runs to hundreds of pages, the data required to support applications is onerous and the technical skills required are beyond most? If you are granted authorisation, where you sit in the supply chain really matters. For chemical manufacturers perched at the top of the supply chain, authorisation of a substance helpfully flows all the way down the supply chain. But often chemical manufacturers have no intention of applying for authorisation for niche uses. This represents a problem in particular for customers that may not want to tell their chemical supplier how they are using a substance or don’t know who the chemical manufacturer is because they buy from traders. We are working hard in the UK and Europe to get these issues addressed and have set up a free e-alert service to help you stay on top of developments. But it is essential that you speak to your supply chain. Assess where your REACH risks lie. Ensure they are monitored. Be prepared.
Monthly columns
Thenaked engineer: stripping industry issues bare The Naked Engineer is our anonymous columnist from industry. Pulling no punches, NE provides informed critique of manufacturing policy and practice on a monthly basis.
Clowning about
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ip-toeing past my PA Atilla the Hun’s office one morning as I got in a little after the time sometimes unreasonably expected of an MD with higher things on his mind, I was distracted for a moment by her rather pert new recruit. “You’re late for you meeting with Jimmy about this year’s R&D claim,” she lashed with words that sent me bounding in the direction of our FD despite my better instincts to stay and help induct the new assistant into the ways of Hemlock Engineering Group - or something. Another year, another meeting with Jimmy the Greek to try and make it as simple as possible for the Her Majesty’s Ridiculous Clowns (aka HMRC) to understand that we are worthy or receiving one of their much vaunted R&D tax credits. At Hemlock Engineering Group we do shed loads of R&D. The egg-heads are at it all the time. And yet each year we have the ritual fight to get those congenital idiots at HMRC to muster enough neurones in one room to agree our R&D claim. The first year we tried, some pompous, puffedup doughnut told me that in his view 90% of R&D tax claims were invalid. (‘Here to help’ their website claims!) I told him I’d make him a bloody invalid and invited him to stick his opinion where the sun don’t shine. That didn’t entirely swing him to my point of view so I had Atilla do a bit of web-based research
into the process of making R&D tax claims. What she discovered was a primary school test style explanation of just what you could and could not include in a claim – published by the clowns themselves. Annoyingly it seemed as though my comprehensive programme of research into the optimum material to manufacture poles for pole dancing clubs apparently didn’t qualify. I’ve always considered this a potential expanding market for Hemlock and have diligently been building the necessary skills to provide on-going customer satisfaction monitoring. Some of the other stuff we have going on in our facilities however, was pretty close to the mark if you actually knew what the hell you were looking at. Or at least so I felt. So, with this conviction in mind and Jimmy’s help to put some official looking figures into the
Some pompous, puffed-up doughnut told me that in his view 90% of R&D tax claims were invalid
mix, a missive was formed. Addressing the Senior Clown this carefully crafted three pager delivered a definitive lesson in SSAP’s, GAAP’s and SASS’s – the various tedious acronyms for the equally tedious financial procedures associated with making an R&D claim for the information of those lucky enough not to be initiated in such matters. Satisfied with my days work I dropped this neatly honed epistle into the fax out tray and left in martyr-like style to play catch up with the boys at Cavendish’s our local wine bar. Getting in nice and promptly around 10.30 the next morning I found Jimmy hyperventilating and clutching a fax outside my office. Ah, I thought. Perhaps some of my more bluntly phrased passages in the opus hadn’t been received entirely favourably. “Look yer! They’ve gone for it,” he spluttered! “Bugger me, really. Even my pole research?” I replied in excitement. “Noah, I took that out see” he said. Ironically Jimmy the Greek is in fact Welsh you understand. Damn, I thought. But on the bright side, another win for the righteous and perhaps I could get the new girl to help out with a new hands-on R&D project I had in mind.
Have your say at www.themanufacturer.com
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Thelegallowdown Change afoot Highlighting the most important changes to employment regulation and the landmark employment cases of Spring 2012. What should manufacturers take note of as the legal ground for businesses shifts? Qualifying period for unfair dismissal to increase to two years The details of the increase in the qualifying period for unfair dismissal are now known. Anybody whose continuous employment starts on or after 6th April 2012 will not gain rights to claim unfair dismissal until after they have been employed for two years. ‘Continuous employment’ normally means the date that somebody starts work, but the date can reset if they are absent for certain reasons. So, as you read this, you will now have two years - rather than one - to decide whether the person you recruit is suitable in post.
Violence and liability We recently looked at two similar cases involving violence against employees. The same question applied in both cases: is an employer vicariously liable for an employee’s attack on another
employee where the violence was in response to the employer’s lawful instruction? The facts of each case produced different outcomes. It boiled down to how closely connected the violence was with the employment. Mr Weddall, the deputy manager of a care home, phoned an employee at home to ask him to cover a night shift. The employee refused but shortly after turned up at work and assaulted Mr Weddall. The employer was not vicariously liable. The employee was acting personally for his own reasons, unconnected with his work. In the second case, the employee – a powder coater in a small manufacturing company - was carrying out a task which was central to his employment. While he was doing this, Mr Wallbank (the company’s managing director) tried to help him load furniture onto a conveyer belt, issuing
Thomas Eggar regularly runs complimentary employment seminars. Our Summer programme includes sessions on managing the tribunal process as well as managing staff absence.
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For more details contact: Simon Fenton, Partner, Thomas Eggar LLP simon.fenton@thomaseggar.com or 01635 571038.
Anybody whose continuous employment starts on or after 6th April 2012 will not gain rights to claim unfair dismissal until after they have been employed for two years
instructions as he did so. In response, the employee reacted to the employer’s instruction with spontaneous force, throwing Mr Wallbank onto a table. The employer in this case was held liable for the assault.
University sponsorship isn’t an employment contract - GE Caledonian v McCandliss The mechanical engineering company GE Caledonian sponsored Mr McCandliss, an apprentice, to take a university degree. When he dropped out of his course, the company gave him two options: reenroll on the course or accept an internship. Mr McCandliss declined both, saying that he wanted to return to working fulltime for the company. The company refused. It said that there weren’t any positions available and the company wasn’t obliged to offer him a position once his apprenticeship had ended. McCandliss brought an unfair dismissal claim and won at tribunal. But this changed on appeal. The Employment Appeal Tribunal found that there was no contract of employment – it was a training contract - and so McCandliss hadn’t been entitled to bring an unfair dismissal claim in the first place.
Moving with the times The employment landscape in which manufacturers are working is continually presenting directors in the industry with new challenges. The best way in which manufacturers can respond to issues such as those highlighted above is to regularly review employment policies and procedures and proactively ensure that they are fit for purpose, before an issue becomes a problem.
Professional learning and development for Engineering and Manufacturing professionals Credible training, taught by leading experts from a reputable institution. The Faculty of Engineering and Computing is a large applied scientific and technological centre for learning and research and we are very focused on the application of science and technology in the real world. We pride ourselves on developing sought-after graduates and high-quality applied research, making real impact with our business partners. We have particular expertise in the following Engineering and Manufacturing areas:
Courses Include: Low Carbon Vehicle Technologies Series:
Engineering Management Business Improvement Series:
• Low carbon vehicles
• Hybrid and Electric Vehicles (EV) Overview
• Intelligent transport systems
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• Lean and Just-in-Time
• Social policy and behavioural aspects of vehicle use
• Vehicle Structure Optimisation
• Kaizen
• Automotive Hydrogen Fuel Cells
• Ergonomics and human factors
• EV Powertrain for Mechanical Engineers
• Failure Mode, Effects and Criticality Analysis
• Metrology (including NPL training and measurement uncertainty) • Engineering management (including lean processes)
• Business Improvement Techniques
• Quality Function Deployment As well as our existing professional programmes, we are able to offer bespoke training; our experts can work with your business to develop courses that meet your exact requirements.
For latest information about upcoming courses, please contact K.Tarkowski@coventry.ac.uk; Mobile: 07557 425 131 or check on our web-site. For general CPD Enquiries, please call the CPD Unit +44 (0) 24 7688 7798.
www.coventry.ac.uk/cpd 102570 Cov Uni Manufacturer Ad-PRINT-B.indd 1
23/04/2012 10:44
By law, you need to be licensed to play music at work.
You probably haven’t thought much about it. You’ve just got music on for your staff or customers. But did you know you need permission from the music’s copyright owners if you play music, TV or radio aloud at work? It’s the law. But don’t worry, to get that permission you simply need a licence from PRS for Music* (and in most cases, one from PPL** too). PRS for Music is a not-for-profit organisation that acts on behalf of songwriters and composers to ensure they’re paid for the use of their work. So if you have music playing, ask PRS for Music how you become licensed to listen today.
Contact PRS for Music on 0800 694 7304 or at prsformusic.com/musicatwork *PRS for Music licences cover the vast majority of music originating from the UK and all over the world. However, if you play music that is outside of PRS for Music’s control, you may need an additional licence from the relevant copyright owner(s). You will require a TV licence as well if you are using a TV in your premises. You do not need a licence from PRS for Music in the unlikely event that all the music you play is out of copyright or is not controlled by PRS for Music. **PPL collects and distributes royalties on behalf of record companies and performers. Further info at ppluk.com. All music licences are required under the Copyright, Designs and Patents Act 1988 which stipulates you must gain the permission of the copyright owner if you play music in public (anywhere outside the home environment).
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It is hoped that the development of new crop strians will help solve food security issues
A tabled issue Jane Gray discovers the looming threat of food security and its implications for manufacturers.
Food security – the global challenge By 2050 the global population will exceed 9 billion Net food imports to sub-Saharan Africa increased 60% in the last 10 years Africa is far from self sufficient in food production – but its population is set to double by 2050 Food imports in Asia rose 75% between 2000 and 2010 – the fastest global increase There are more deaths every year from malnutrition than from AIDS, tuberculosis and malaria combined At the same time nearly a quarter of adults and 10% of children in the UK are classed as obese
Relevance to UK manufacturers? Over 50% of the world’s population now lives in an urban environment and this is rising, with estimates suggesting that this will hit 70% by 2050. With urbanisation comes increased consumption of processed and convenience foods In 2011 the UK exported over £12 bn of food and non-alcoholic beverages Rising expectations around corporate responsibility are seeing increased R&D around re-configuring existing food and drink products for better nutritional value Climate change is having a negative impact on crop yields and quality in the UK Learn more at www.foodsecurity.ac.uk
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Leadstory A tabled issue
T
he statistics read like the summary of an apocalyptic Hollywood film, but sadly the threat of resource security for many materials used in manufacturing is all too real. We are used to flashy headlines about the increasing scarcity of fossil fuel reserves – but less widely reported are parallel declines in the abundance of minerals, metals and even gasses which are essential to manufacturing processes and to the composition of everyday products we have come to rely on as a society. Furthermore, the dynamics of resource security are not only associated with declining reserves of raw materials. A linked issue of escalating demand for products, thanks to increasing global populations and rising GDPs, puts on added pressure. A final kick from geo-political concerns, including resource protectionism from some governments, and the outlook for access to certain materials and resources starts to look bleak. This is the case with food security according to a growing community of academics and political bodies and there can be few resource issues more emotive or universally relevant. The UN Food and Agriculture Organisation predicts that global demand for food will see over 40% growth by 2030 and 70% by 2050. In addition, the kind of food in demand is increasingly of a processed or ‘convenience’ variety following a global trend for urbanisation and the aspirational image attached to the consumption of certain Western food types in developing nations. On the face of it this sounds like good news for the UK food and drink industry – the UK’s largest manufacturing sector – which exported over £12 bn worth of food and non-alcoholic drinks in 2011, accounting for 7% of GDP. But things are never so straight forward. The fact is that UK food and drink manufacturers face
Beyond food security As already mentioned, it’s not just food manufacturers that need to be concerned about resource security. Metals, minerals and gasses commonly used in manufacturing processes and often essential to making products are also falling into short supply. In December of last year PwC released a report titled Minerals and metals scarcity in manufacturing: the ticking time bomb. This publication throws the threat of resource security into sharp relief and suggests approaches manufacturers might take to achieve sustainable resource management. PwC’s report showed that while CEOs across subsectors were concerned by resource security issues, most felt that there was a lack of awareness
among employees and stakeholders about the threats posed. European business leaders interviewed for the report were generally more confident that policies and actions were being taken to mitigate the risks of resource scarcity than leaders in Asia Pacific. However they also expressed high levels of concern at the risks posed by growing demand and geopolitical factors in access to resources, over and above the threat of straight forward resource depletion. The PwC report listed 14 commonly used metals and minerals as having reached a level of ‘critical’ scarcity. These include: Beryllium: used as a lightweight component in military equipment and in the aerospace industry. it is used in highspeed aircraft, missiles, space vehicles and communication satellites Cobalt: a material used in industrial manufacturing. It is an essential chemical element for the production of jet turbine engines and automotive rechargeable batteries Tantalum: a metal used in mobile phones, computers and automotive electronics Flurospar: used in construction, cement, glass, iron and steel castings Lithium: an extremely light metallic element used in wind turbines and lithium-ion batteries in hybrid cars
Agrico have been used to offering the pick of the crop. But declining crop quality is a concern for UK potato farmers as well as farmers of other crops
immense operational and ethical challenges if they wish to play a part in servicing this demand. They must do so in an environmentally, socially and economically sustainable manner. Professor Tim Benton, champion for the Global Food Security programme, comments “The global population is growing and so are middle classes. We
tend to think of the middle class as a Western phenomenon but it is now a global thing and these middle classes have disposal income and busy lives, increasing the demand for processed and often imported foods. This will
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It’s not just about shortage Food security issues are not only concerned the ability to supply enough nutrition for the world’s growing population. Access to quality nutrition is also an escalating issue. A number of government funded research projects investigating the links between diet and health are highlighting a growing divide in levels of health between social segments able to afford a varied and fresh diet and those more likely to subsist on a limited selection of highly processed – and cheap – foods. These research projects are increasingly seeking involvement from industry to support the reconfiguration of processed food products to make them more nutritious without raising their price point. An example is a project involving the University of Birmingham, the Institute of Food Research and agricultural research organisation Rothamsted Research. Individuals from these institutions are mining diversity in wheat fibre to uncover a means of reducing the glycacemic index of white bread. The end game is to create a cost effective process for the production of white bread which includes all the health benefits of wholemeal bread. The above research is part of the work of the Diet and Health Research Industry Club (DRINC). DRINC is a publicprivate research initiative led collaboratively by three UK research councils: the Biotechnology and Biological Sciences Research Council, the Engineering and Physical Science Research Council and the Medical Research Council. Manufacturing partners of the DRINC initiative include: Britvik, Kraft Foods, Coca Cola, GlaxoSmithKline, Pepsico, Nestlé, United Biscuits and Unilever. DRINC is a five year partnership with £10 m of public funding. More information can be found at: www.bbsrc.ac.uk/drinc put a huge demand on the global supply chain – right back to the primary producer.” Professor Benton is concerned and admits that it is not going to be easy to meet this growing demand. “Climate change, sovereignty issues and other resource constraints are going to make it more difficult to produce food in the future,” he says. “Nitrogen, fertilisers and water for instance, are going to become harder to get hold of. There is also increasing competition over land.”
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So how do we use the current global foot print of agricultural land to produce more food without having a negative impact on the environment? One approach is to either genetically modify or breed new crop varieties that can cope with drought and disease without the need for increasingly rigorously regulated fertilisers and pesticides, while also producing higher yields. While the appetite for GM food is low in Europe it has a strong following in the US and keen interest from nations
We are keeping an eye on projects like those at the Norwich Research Park which are investigating the development of heritage strains of barley for drought resistance Andy Wood, Managing Director, Adnams
like India, which keeps a weather eye on solving food shortage problems in Africa. Taking a more traditional road, companies such as Nestlé are investing huge sums into R&D to make key crops for their products more resilient. A coffee plant developed by Nestlé for use in Ivory Coast delivers a 30% higher yield on average than any strain previously farmed there. “The world class research centre we built there now distributes 1.1 million plantlets a year for free,” says Nestlé UK and Ireland CEO, Paul Grimwood (see p20 for our lead interview). But before manufacturers run away with the idea for food engineering, Benton says there are some simple steps to be taken in tackling waste and efficiency in the food production process. “Along the manufacturing line itself there is relatively little waste because those in industry know that wasted product is wasted money and your margins won’t allow it,” he says. “But this is not true up to the farm gate and certainly not when food reaches consumers. Around one third of the food purchased in the UK is thrown away.” To counter this wastage Benton says that more manufacturers could take an influential role in educating their supply chain in both directions. Of course, some companies are already taking greater responsibility up and down the supply chain – and not just in terms of public awareness campaigns which might be sceptically perceived as PR stunts. Archie Gibson, director of seed potato producer Agrico UK says that manufacturers are generally better than retailers at working with suppliers to plan demand. “We plan carefully with manufacturers what their demand profile looks like for up to two or three years,” he says. “With EPoS [Electronic Point of Sale] and data being what it is these days they can see relatively clearly how each of their individual stock keeping
Leadstory A tabled issue
units (SKUs) are performing and translate that back into the total tonnage they will need while allowing for wastage. With retailers we don’t tend to have this long term dialogue. It is just a beauty parade from one year to the next.” Beyond simply letting farmers know how much produce they will need, manufacturers are also helping to improve productivity. International manufacturing group Cargill, which produces food, agricultural, pharmaceutical and industrial products, is in hot pursuit of this goal. Among many other initiatives, 2.1 million Chinese farmers have taken part in Cargill’s programme for increased farming efficiency and the company is also leading research into better irrigation methods with the Chinese government. The benefits of international programmes like this are greater than the increases in productivity they bring. Their diplomatic value is immeasurable to Cargill, which has deep set concerns over the future of free trade and investment policies as food security challenges come to the fore. According to Paul Conway, vice chairman at Cargill, protectionist policies and punitive taxes on imported foods are not the right approach. Speaking at a food security summit held in Manchester in September last year, Mr Conway said: “We strongly believe in a free and open rules-based trading system. We believe that transparent, efficient and regulated markets are the best way to set prices. We do not want to see governments deciding on ‘the right price’ [for food].” Going on to affirm his belief that food manufacturers have a responsibility to lobby international governments for a supportive approach, Conway continued: “If we don’t speak out on some of these critical issues, then you get the sort of reactions that we saw in [the 2008 food price spike]. Prices went up and governments slapped on export bans.” @janefagray
Leave it to the big boys?
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Climate change, sovereignty issues and other resource constraints are going to make it more difficult to produce food in the future Professor Tim Benton, Global Food Security
ompanies like Nestlé and Cargill – organisational leviathans – have an obvious corporate responsibility to address global challenges around the impact of making and selling their products on international communities. But what about UK SMEs and their supply chains? What relevance does global food security have to them? Andy Wood, managing director of sustainable brewing company, Adnams, insists that it is strong – and that smaller firms have an important local part to play in mitigating the global threat. “This is part of a wider sustainability issue which concerns us greatly,” he comments. “Although we are not directly involved in the research, we are keeping an eye on projects like those at the Norwich Research Park which are investigating the development of heritage strains of barley for drought resistance.” Explaining this interest further Wood says that “although East Anglia, where we are based, is considered the bread basket of the UK and has traditionally plentiful barley crops, it is also one of the driest areas in the UK. We are therefore concerned about the drought predicted for much of the UK this summer, not only in relation to this year’s yields, but with respect to the longer term.” Belinda Jennings, quality manager at Adnams backs up the MD’s statements. “We are in close communication with our maltsters and the farmers that supply us and we have supported trials of new, more drought and pest resistant
barley strains in the past.” Speaking the language of business, Ms Jennings explains that the primary motivator for Adnams in supporting such research is far from altruistic PR. “We are always trying to improve our yields and help our farmers overcome any challenges which are limiting their ability to produce good crops for us,” she says. For Adnams, which holds much of its brand value in its local sourcing principals, this is important. “If we can’t get the yields we need locally we will have to source barely from up north,” comments Jennings, a move that would add food miles and CO2 emissions to the company’s carefully monitored carbon footprint. But as quality manager, Jennings also points out that the implications of food security for manufacturers do not simply come down to available quantity. Over the past few years there has been a general trend for a lowering in the overall quality of barley and other crops in the UK. Adnams has invested to cope with this trend, protecting against limitations to its productivity. “We invested in a new brewhouse four years ago and we looked to increase our capability to process lower quality barely at the same time,” she recalls. “There were a lot of reasons why we made that investment, but the ability to become more flexible in our ability to process lower quality barley was certainly part of that thinking. As long as you have the right technology the quality of the end product is not affected,” she states.
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Wafers roll off the Nestlé production line
Jane Gray talks to Nestlé UK and Ireland’s CEO, Paul Grimwood, about the role of the world’s largest food group in addressing the issues of global food shortages on the one hand and a Western obesity epidemic on the other. With these concerns and a passion for fighting the UK’s corner within his organisation, there’s little time to ‘Have a Break’.
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Paul Grimwood hosts Business Minister Mark Prisk at one of Nestlé’s 19 UK sites.
Feed me
till Inowant more A
t 48, Paul Grimwood has plenty of experience squaring up to the challenges facing his industry. Always a student of commerce, Grimwood was born and bred in the confectionary manufacturing hub of York before really being bitten by a FMCG bug during an industrial placement with Mars while reading business studies at Huddersfield University. “I was convinced within a few weeks of the placement that fast moving consumer goods and their manufacture were what I wanted
to be involved with from there on in,” remembers Grimwood. It was a conviction which has never faltered, though forays into pet food and whiskey production added diversity and a different insight than might have been gained at giants like Mars and Nestlé. Working for the more modestly sized Highland Distillers, now part of the Erdington Group, is an experience Paul particularly values. “It gave me an understanding of the financial challenges of running a business which you don’t
Interview Paul Grimwood CEO, Nestlé UK
get exposed to in a large organisation,” he says. Not only that, but Highland Distillers woke Paul up to the varying requirements of product development from company to company and product to product: “Coming to Highland Distillers from Mars, I don’t think I learned anything about commercial strategy and marketing, but I did learn a great deal about taking a mid and long term approach to product development. Whiskey is not whiskey until it is three years old and that climbs to eight or ten years for malt.” Developing patience as a virtue with regards to product development and strategic planning became an obvious asset to Paul on joining Nestlé. “Short term goals are important at Nestlé but there is a much heavier emphasis on the mid and long term,” he comments. Fine words and not unfamiliar ones for well established organisations with vast resources. But what about the average SME? “I don’t think longtermism is the luxury of a large organisation, though they may be in a better equity position,” asserts Paul. “If I am honest I think it is the luxury of a well run company. If a company, whether it is small, medium or large, focuses on the short term, they will quickly become tactical and find that costs escalate as they struggle to manage cash flow.” Grimwood says that all decisions at Nestlé are taken on a threefold assessment of “whether it is strategically right, will it deliver the benefits we need in the medium term and does it support what we call the ‘Nestlé model’ for operating in the short term.” It’s a format which is applied globally, and like regional leaders in most multinational organisations, one that Grimwood must always bear in mind as he tries to promote the UK as an investment location for Nestlé and stand up for the broader concerns of British food and drink manufacturing. “My job has to be approached as a 50/50
Class of ‘85 Ronald Regan advised the ambitious to “surround yourself with the best people you can find” and whether by accident or design this is certainly what Paul Grimwood achieved during his industrial placement with Mars. Contemporaries with Paul on this training scheme read like a Who’s Who of FMCG and include Sainsbury’s CEO Justin King, Tesco’s commercial director Andrew Yaxley, Britvic CEO Paul Moody and the former CEO of Asda, Allan Leighton. Government has put out some very clear messages on how it intends to cope with the challenges at hand, and as a businessman, I feel confident making decisions based on those messages
Recalling this crossing of pathways at Mars, Grimwood describes himself as fortunate for having this bar-raising set of peers during his formative years, but his experience and subsequent success speak volumes for the value of selecting a well respected and recognised graduate training scheme. “Perhaps I was naive at the time but I hadn’t expected the scheme to be such a breeding ground for a high calibre set of people,” he says.
split between being very passionate about the UK and understanding where the opportunities exist for Nestlé worldwide. I will lose credibility if I recommend an investment or an acquisition knowing full well that it would get a better return somewhere else.” With the UK exhibiting relatively high energy costs, laborious labour regulations and being seen as a high tax jurisdiction, are Grimwood’s arguments that the UK is a key concern for Nestlé few and far between? Not at all he says. “I think the UK is a good place to do business. Nestlé has been operating here since 1886 and the attractiveness of the UK as a place to invest has improved recently, despite the economic environment. The government has sent out some very clear messages on how it intends to cope with the challenges at hand, and as a businessman, I feel confident making decisions based on those messages.” The challenge is now on how to validate the confidence that led to headline grabbing sums of money being poured into Nestlé’s UK facilities. In the company’s full year results for 2011, released in February this year, £500m was pledged to developing UK sites over
An artists impression of the new Nestlé Waters plant in Buxton. Just one of many multimillion pound investments in Nestlé’s UK manufacturing capabilities
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the next three years. The winning argument? “Nestlé sees the UK as a great place to export from,” states Grimwood. “At the moment we are exporting towards £300m a year to around 50 countries.”
And Nestlé is not the only food and drink organisation to find the UK offers big wins for food exports. In his concurrent role as deputy president of the leading sector trade body the Food and Drink Federation (FDF) and
I don’t think longtermism is the luxury of a large organisation, though they may be in a better equity position
Biography Paul Grimwood 1985:
Graduated Huddersfield University with BA Hons in Business Studies
1985-1995:
Various marketing appointments at Mars finishing as Category Director
1996-2000:
Managing Director, Highland Distilleries
2001:
Joined pet food manufacturer Ralston Purina as it was taken over by Nestlé and became Regional Director of Nestlé Purina Petcare
2005:
VP Operations for Nestlé Northern Europe
2006:
Managing Director, Nestlé Confectionary
2009:
CEO, Nestlé UK and Ireland
2010:
CEO and Chairman, Nestlé UK and Ireland
2011:
Deputy President, Food and Drink Federation and Chairman, FDF Competitiveness Steering Group
Paul Grimwood is originally from York and is married with one son
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chairman of its Competitiveness Steering Group, Paul is proud to report that British food and drink exports (excluding alcohol) totalled a record £12bn in 2011 – up from £10bn in 2010. So it’s a good news story all round? Not quite counters Grimwood. “These are record figures and should be celebrated but, marginally, we [the UK] are still losing share every year because other markets such as India and China are growing their ability to export food quicker than we are.” To tackle this Grimwood says there needs to be a one-stop-shop information point to make it easy for SMEs to get into the export game, rather than the confused landscape of advice from disparate groups in Defra, the Foreign Office and UKTI. Instilling confidence in food and drink manufacturers to grow is of huge importance according to Grimwood. He says that food and drink, which is the UK’s largest manufacturing sector contributing around £20bn GVA and employing 400,000 people, has been disregarded by government in the past and completely overlooked by the previous administration in its assessment of growth areas in advanced manufacturing. This faux pas has now been addressed and there are commitments in place between government and the FDF to see the sector grow 20% by 2020. Campaigns are already underway to increase the use of new automation technology in factories and boost investment in R&D. This last issue of particular importance if UK food and drink manufacturers are to meet the needs of global consumers going forward – not in terms or product and brand development for consumer appeal – but in terms of survival. Paul grows serious as he says, “Food security is one of the big issues that the world must deal with – and it is a problem we are facing now, not a future scenario.”
Interview Paul Grimwood, CEO, Nestlé UK
Setting an example for the kind of R&D FDF would like more of its members to initiate with the support of the High Value Manufacturing Catapult, Grimwood describes Nestlé’s response to the food security challenge. “We are constantly trying to predict the dynamics that will dictate this. For instance, global warming and population growth. We are doing a lot of R&D work to develop crops which are drought resistant. In the Ivory Coast we now freely distribute 1.1 million drought and disease resistant cocoa plantlets a year. The plants also have a 30 per cent higher yield than the average cocoa plant. It’s all very well to talk about food security, but this is the kind of thing we are really doing to tackle it.” The problem boils down to “a fundamental challenge for us as a food provider to continue putting food on the table for people around the world,” says Paul. But what about the tables of those who already have far too much? As the producer of much loved confectionary brands, children’s cereals and a host of products familiar in the average Western kitchen, Nestlé often finds itself with the spotlight in rows over the responsibility food manufacturers should take for rising obesity levels around the world, particularly in the West. But should manufacturers really be taking the flack for lack of self restraint and poor dietary education on the part of their customers? “There is no one person who should be held accountable for this kind of major issue. But there are a variety of stakeholders,” Grimwood answers
Nestlé UK and Ireland at a glance Nestlé UK and Ireland operates across 19 sites and employs over 7,000 people Over 70 of Nestlé’s brands are manufactured in the UK and Ireland Nestlé recently committed to investing £500m in the UK over the next three years Three UK and Ireland sites have now achieved zero waste to landfill: York, Dalston and Girvan Almost 90% of packaging for UK and Ireland products is now recyclable. A remaining challenge is the development of recyclable plastic laminates. “We are working with our suppliers on this,” says Paul Grimwood. “He who helps us solve the problem will win big.”
UK food and drink manufacturing at a glance Food and drink manufacturing is the UK’s largest manufacturing sector The UK food and drink industry directly employs around 400,000 people in the UK The sector turns over around £76m a year and contributes almost £21bn to GVA Although food and drink manufacturing jobs are often perceived as low skilled, 38% of those employed by the sector in the UK are educated to A level or above diplomatically. “We call ourselves a nutrition health and wellness company and we take that seriously when measuring the effectiveness of our products. What it means practically is that, while every product must pass a 60:40 taste test – where a bare minimum of 60% of those trialling it must say there is something really special about the flavour – there is also a 60:40 Plus measurement which asks if there is some kind of nutritional benefit to the product.” Paul talks about the Nestlé biscuit range as an example. “People talk about products like biscuits very quickly, and without much knowledge, as being unhealthy. But the fact is that the Food Standards Agency says 10 per cent of your daily intake can be from snacking. Taking that guidance, we have developed and reconfigured many of our favourite brands, like Kit Kat, Breakaway and Blue Biband, so that they are only 99 calories. This gives the consumer a snacking choice that is easy to keep within that 10 per cent.” Nestlé has led the way in removing artificial preservatives and colours from all its confectionary products and halted advertising to children long before there was pressure on confectionary makers and retailers to do so. It was also brave enough to be the first
confectionary manufacturer to put RDA (recommended daily allowance) information on the front of all its products – clearly showing consumers how much of their daily intake each portion contains. “So, as the manufacturer of so many leading food brands there is clearly a responsibility for us in advising on how to consume responsibly,” says Grimwood – though the ‘but’ hangs heavy in the air. “There is a limit though,” he continues. “It is not all down to us. I have real concerns about the education process in schools when it comes to nutrition. If you ask quite well educated youngsters today how many calories they think they have on their plate and how many they should be consuming in a day you get a ridiculous range of answers because they simply don’t know.” Summing up Paul speaks of the four-way stakeholder relationship he feels is necessary to get control of the world’s rapidly polarising picture of glut and famine. “Government, education and industry all have to play a part, and then it will come down to the fact that some people out there just need to start taking responsibility for themselves. People can’t go on blaming their own poor nutrition on the fact that they found a product tempting on the shelf.” @janefagray
Have your say at www.themanufacturer.com
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Extending unified communications connectivity, presence and awareness to the mobile workforce Today’s generation of younger — and not-soyoung — workers increasingly expect to be able to work and do business anywhere, at any time, through whatever device they prefer. The growing volumes of mobile workers and the rapid development of smartphones and tablets are really changing the game. A well thought-out, technology-enabled communications strategy can accelerate an organisations ability to improve productivity, responsiveness, and ultimately, to make decisions faster.
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eople need access to the right information at the right time, to make faster, more efficient business decisions; and the flexibility to work with colleagues, customer and suppliers, regardless of who’s where. In our personal lives, this flexibility is rapidly becoming second nature. As more of us acquire smartphones and tablets, we’re changing the way we relate to each other. What’s more, we’re ‘always on’, available and accessible wherever we happen to be.
Is your organisation mobile ready? Organisations can take advantage of this behavioural revolution by enabling employees to connect anywhere, anytime, on any devise. After all, a mobile workforce should be an extension of a company’s capabilities — being remote shouldn’t mean they’re out of the loop. More organisations are choosing to give employees the freedom to talk, use applications and access the corporate network when they need to — from the office, on
the road or working from home. And yet, we’re still seeing communication bottlenecks. These can often be attributed to mobile phones; they may make employees more accessible, but not necessarily more available. Take your sales team for example. They’re often out visiting customers. So what happens when another customer calls — trying their mobile — but can’t reach them? Will they leave a message, try the office, send an email, or do the unthinkable — call a competitor? Sometimes all it takes is one missed call — and your customer goes elsewhere. How many calls do your team miss? How many of those result in missed opportunities? Too many organisations lack the visibility to monitor this human latency; or to assess the impact on the business. The problem doesn’t stop with mobile workers and their ability, or lack of, to serve customers better; it affects their office-based colleagues too. For desk-bound co-worker needing to make fast decisions it is just as important to be able to collaborate with mobile employees.
Smarter, more agile ways of working So, what’s the solution? Integrating mobile phones into the organisation’s telephony systems is certainly a good place to start to enable a more responsive and productive organisation. By giving remote and mobile employees ‘one number’ — enabled by intelligent call routing — that can be dialled to reach their mobile, desk-phone and other devices simultaneously, you can derive greater value from your workforce. And most importantly ensure a better customer experience. Combined with presence, human latency inefficiencies between co-workers can be reduced even further. Presence is a way of indicating to other people within your organisation what your relative availability is; rather than loosing time trying to track down a colleague, a user can instantly assess if they’re in a meeting, on the phone, or not available. Of course, no one is available all the time. With one voicemail, the frustrations, mix-ups and perceived ‘poor service’ when messages aren’t pick-up — often because it’s left on the ‘other’ phone — are avoided. And enabling callers to choose to speak to another member of the team (by pressing ‘1’) can accelerate the responsiveness of your organisation.
Prepare your enterprise for the mobile revolution As mobility becomes the rule rather than the exception, enterprise mobile communications strategies are evolving from providing convenient reachability to delivering tools that maximize performance. Choosing a technology provider is the next step. A wide range of technology options exists to help forward-looking companies to derive greater value from their workforce — a provider like ANT Telecom will help you harness technology suited to your business needs. ANT Telecom provides system integrations solutions. Our expertise in connecting disparate systems — such as CRM systems to contact centres or to fax and exchange servers — allows users to share information (voice and data) more effectively, and make decisions faster. One of our key strengths is our well chosen technology partners: Avaya delivers an open-system intelligent core platform that supports unified communications; and offers a choice of applications, such as One-X Mobile and one-X Communicator, which are compatible with most devices. Avaya provide anytime, anywhere access to UC capabilities — including intelligent presence and single number — empowering users to connect to the right people, at the right time.
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Lean and Systems Thinking: Managing Chaos & Complexity Lean Management Journal invites you to its annual conference featuring high impact keynotes from North America, South Africa, Europe and UK ; facilitated interactive workshops; 12 case studies; peer-to-peer networking; and LMJ inspiration for your continuous improvement case study.
Agenda: Tuesday 29th May 2012
LMJ Annual Conference 2012: Main Event
09:00 to 17:00
Tuesday 29th May 2012
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Full and half day
Thursday 31st May 2012
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The third edition of LMJ’s annual flagship event will capture the thoughts, ideas and best practice from a year of thought leadership provided by the journal.
Post-Conference Seminars and Assessment Visits Visual Workplace / Visual Thinking Delivered by: Dr. Gwendolyn D. Galsworth, President, Visual Thinking Institute Length: Full Day Classroom 30th May, Optional Assessment Tour 31st May MEGGITT Aircraft Braking Systems
30th May – Seminar In this one day seminar, Dr. Galsworth introduces the basic definitions, principles, concepts, and tools that are at the foundation of a visual workplace and that drive it as a corporate improvement strategy.
31st May: Day Two Benchmarking Visit: MEGGITT Aircraft Braking Systems, Coventry, 09:00-14:00 Employing over 1,200 people worldwide, the Coventry site provides manufacturing, repair and overhaul for the defence and aerospace industry.
Lean Safety Seminar Delivered by: Bob Hafey, International Author, Lean Safety Length: Full Day Classroom 30th May, Optional Assessment Tour 31st May venue TBC
30th May – Seminar Here’s a different path to lean success – a safe path! By using some of the common tools in a lean thinker’s toolbox and focusing on safety instead of cycle time, you can easily build an understanding of lean, while improving plant safety.
31st May: Day Two Lean Safety Benchmarking Visit: GKN TBC 09:00 to 14:00 On day two of the post conference seminar Bob Hafey will then lead a Gemba lean safety assessment visit using the teaching from the previous day.
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Chaos & Complexity Special Interest Sessions Special Interest New & Sessions Unique to 2012 New &
Ideas Exchange Cafe /Choice 29th May Subscr l conference featuring high Ideas Exchange Cafe / 29th May Subscribers / 29th May Unique to the LMJ’s Annual Conference are special interest Attendees w a, Europe and UK ; Unique to the LMJ’s Annual Conference are specialsessions interest in the Ideas Attendees will be able to meet Exchange Cafe: members o sessions in the Ideas Exchange Cafe: peer-to-peer networking; members of the LMJ Editorial Board, and • Informal group discussions focusing on lean topics Board, and for the first time • Informal group discussions focusing on lean topics of special interest ment case study. we have bo to LMJ members.
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• Designed for the LMJthree Community to share your success with of the most popular • Designed for the LMJ Community to share your success and struggles with other practitioners. case studies and articles from and struggles with other practitioners. 2011 presenting conference • Enables benchmarking of yourselfatinthe each session with • Enables benchmarking of yourself in each session with a maximum of with 20 delegates. our ‘Subscribers Choice’ sessions. Eventa maximum 09:00 todelegates. 17:00 of 20 • Effective subject area facilitation by subject area experts. • Effective 19:30 subject to area facilitation by subject area experts. 22:00
Visits
Full and half day Speakers include: 09:00 to 14:00
Speakers include: Conference Chairman
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Director of MSc Lean Operations / Lean Enterprise Research Centre
Director of MSc Lean Operations / Lean Senior Research Associate Enterprise Research Centre Cardiff University
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Director – Group Lean Enterprise Rexam PLC
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Director – Group Lean Enterprise Business Improvement Manager Rexam PLC Tata Steel Strip Products UK
Understanding your DNA TheTransformation Long and Winding Road A Decade of Lean
Benchmarking Visit: MEGGITTKaruna-Nidh Rueben ems, Coventry, 09:00-14:00 Global Head of Lean
e worldwide, the Coventry site provides Deutsche Bank erhaul for the defence and aerospace industry.
To adopt or adapt; that is the question
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John Bicheno Dr Pauline Found
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Rueben David Karuna-Nidh Verduyn Global Head of Lean Deutsche Bank Founder C2C Solutions Incorporated
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Dr Nick Rich
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60 second Interview
Prof David Delpy ESPRC The EPSRC Centres for Innovative Manufacturing may mean little to many companies, but don’t underestimate their influence in shaping UK industrial strategy. Prof David Delpy, chief executive of the Engineering and Physical Sciences Research Centre, explains the role of the Centres and how they link with the better known Catapults. TM: What is the purpose the of the centres? There are 12 centres. The first three were fasttracked by Labour in January 2010 after we’d made a decision to restructure the IMRCs (Innovative Manufacturing Research Centres). A further nine were launched in June 2011. We’ve used the centres as a way of pulling together critical mass and academics around a particular grand challenge, or market sector, for many years. How do you choose the centres and what they specialise in? One criterion is the strength of the academic base in the UK – based on citations, the number of grants we fund, and so on. With strong areas where the UK is leading academically there is an argument for building on that lead, especially where additional funding from the EU or large international programmes is likely. Secondly, the centres have about 25 strategic partnerships, with either companies or industrial sectors, such as the Mobile VCE [Virtual Centre of Excellence]. These focus us on sectors where there is a unique UK strength and ability to grow. They are also based on high technology, strong fundamental science and engineering. But in the end the choice comes down to peer review – we issue calls for centres in a particular field. Sometimes we’ll use our knowledge of the academic base to put forward certain groups with strengths. We haven’t marshalled people like the TSB’s Catapults have, but we identify people who we’d hope would
Our strategic partnerships bring money into the centres, which goes to the academic groups to tackle programmes that are relevant to each partnership
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come together. An example is our composites centre, which selected Bristol, Cranfield, Nottingham and Manchester universities. It’s essential that the EPSRC Centres are doing work that is of relevance to their industrial partners. The successful bids must have strong industrial backing, industrial advisory boards, and companies that are giving them cash and kind directly. How are the centres funded? The EPSRC is publically-funded. Our strategic partnerships bring money into the centres, which goes to the academic groups to tackle programmes that are relevant to each partnership. It doesn’t come to us. In the last SR, the strategic partnerships brought in over £100 million in cash to the academic base and about £700 million in cash and kind. What are the Centres’ KPIs? It’s tricky. These are discovery-led centres, investigating ideas at low technology readiness levels. At the same time, work needs to be relevant to their industrial partners and the industrial advisory board tends to push for KPIs. In response, each centre is drawing up its own KPIs with its board which can be a combination of academic merit measures plus the transferability of their research
into their industrial partners. In addition, many of the centres are associated with one of our doctoral training centres. So a lot of the fundamental output, or KPIs, for the centres is trained people. Catapults – how synchronised is your work with theirs? The TSB is down the road and the Research Councils have a Joint Strategy Group with the Technology Strategy Board. We fed into the pool of information the TSB used to produce its long list of sectors from which it chose the Catapults. The TSB is making slightly different decisions to ours; theirs benefit the UK economy, ours are longer term, and benefit the world as well as UK plc. With respect, I would hope that the Catapult centres had been chosen because they build on the underpinning academic base of the IMRCs and the SIMs – the TSB has only been around for four years. [Centres and Catapults] are not identical, they don’t duplicate work.” Some answers were backed up by Prof Derek Gillespie of the EPSRC A fuller account of this interview can be read on www.themanufacturer.com
Leadership in manufacturing
From the bank’s perspective Mark Lee, managing director and head of manufacturing at Barclays, talks through three steps manufacturers should take to maximise the chances of securing bank finance:
Access to finance is rated as one of the top barriers to growth in manufacturing. But what are the real pinch points in banking relationships? And what can manufacturers do on their own behalf to make their financing prospects as positive as possible?
Engage with lenders early and be as open as possible about business strategy and rationale for specific activities under consideration. Whether the business needs funds to address financial problems or to exploit investment opportunities, it is vital to give lenders time to make informed decisions in a transparent, open dialogue; Manufacturers will ideally look to provide quality, detailed information to enable lenders to assess funding requests. This should include an understanding of historic, current and forecast trading performance. Profit and loss and balance sheets are important but banks are most interested in a company’s cashflow. Detailed cashflow forecasts under base and stress case scenarios, complete with strategies for responding to various risks, are essential; Help your banker fully understand the operating environment and your business objectives, including wider industry trends. This will ensure common thinking. Make sure you sustain this with regular contact and prompt delivery of information when it is required.
Stage Technologies supplies stage equipment globally but has found it hard to get international liquidity recognised
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W
hile it is very much à la mode to vilify the banks for not giving sufficient support to SMEs or failing to understand sector needs, the current economic climate provides a good motivation for businesses to reassess whether they are approaching their banking relationship in the right manner and with the right understanding of what facilities are on offer in relation to their needs. According to Jonathan Duck, managing director of flooring manufacturer Amtico, businesses can put themselves in a difficult position by failing to scope their financing needs accurately or by being over ambitious in explaining the dividends they believe finance would bring. “Do not over promise and under deliver,” says Mr Duck. “There is no point in describing some overblown plan that will only come back to haunt you.” The key to getting the pitch right, according to Alastair Hardie, partner at Eversheds LLP, is simply to ask your bank exactly what information and level of detail they will expect in advance. “That way you can select the best people in the business to take to the meeting to represent your case,” he comments. Largely the right people will be the CEO or financial director, but Mr Hardie emphasises that representation of quality senior management and control of costs across the board will bring a position of strength. He also says that in some special cases, with emerging technologies that have high competitive potential, it can be beneficial to bring in technical and market knowledge from the wider team. “You’ll find that some relationship directors with a sector specialism will be very interested to
What’s the problem? There is a lot of noise about business dissatisfaction with banking services. But what exactly is it that business leaders are finding troublesome? A recent survey by the accountancy association MHA revealed the following from respondents 42% of respondents believed that they were not receiving adequate support from their banks; Only 20% of these indicated that they had recently changed or intended to change their bank. The respondents flagged their main issues with their banks as being: Access to funds 70% Lack of communication about changes in service 41% Unexpected increases in costs 35% Changes in terms of loan securities 28%
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know about the technical aspects of the business as well as the financials – though these are the priority.” If your request for finance should be declined in one quarter, Hardie urges businesses not be too downcast. “Banks have a spread of business. If you get turned down it may simply be because the bank has already lent too much to your sector – not because your own relationship director doesn’t feel you have a good case.”
Think about your relationship Chris Coopey, partner at Carpenter Box, part of the MHA association of accountancies, says manufacturers need to appreciate the following criteria banks use when they consider providing finance: You as the client Does the bank know you, how long you’ve been in business and what does your track record look like? Do they understand your trade? The amount Crucially, are you requesting sufficient finance? How will it be spent? Do your cashflow forecasts show that the increased finance will result in increased business? If so, will a further increase in working capital be necessary? Have you obtained realistic estimates for the expenditure you want to make? Repayment Repayment of loans for capital goods can normally be geared to the life of the machinery – and buildings – up to fifteen years; Banks normally prefer to use structured loans rather than overdrafts, with the repayments to include interest and capital; A moratorium on capital payments can sometimes be arranged for the first six to 18 months; Payments can be geared to seasonal trading where this is appropriate. Security The bank will seek to ensure that your business is viable on its own profitability and that you are using the security only as a backup; Banks normally regard freehold property, shares, life policies, bonds, and guarantees as acceptable tangible security; You can consider factoring/invoice financing debts through a specialist factoring organisation – this is becoming more popular; Intangible security – a floating charge on all other assets – is applicable only to limited companies.
Leadership in manufacturing
Ask for help Jonathan Duck is keen to highlight that manufacturers need not feel isolated when looking to get finance. “Get a debt advisor,” he says. “Particularly if you are raising large scale debt.” “Not many manufacturers seem aware of the services a debt advisor can offer,” says Duck. “But they can be extremely helpful.” Duck explains that a debt advisor will run an auction for a business which gives a range of banks the opportunity to offer their best finance package for your business. “They will also tell you what to do with your forecasts to make sure you do not get carried away and are requesting the right amount of debt,” he comments. Chris Coopey, partner at Carpenter Box and head of manufacturing group at the association of consultancies MHA, agrees that manufacturers shouldn’t feel like they have to make all banking decisions based on internal expertise. “If they are worth their salt, your accountant should be able to help you to manage your relationship with the bank and can also help if you are considering changing your bank,” he says.
What’s the catch Having good quality advice can avoid falling foul of catches in finance agreements, continues Duck. “In my experience you need to look out for accelerating covenants, especially in relation to highly leveraged lending,” he says. With this scenario companies can find that if their business plan accelerates, so the required covenants for the bank, in relation to profit and cashflow, accelerate. “So as your performance improves your requirement to improve increases. It’s counterintuitive,” Duck sums up. Provided manufacturers seek sound advice and bring the right skills in-house – Mark Ager (see box) says a good finance director is worth £500,000 in liquidity
Finance for the times Government and trade bodies are pushing hard at the moment, to encourage UK manufacturers to export more and to tap into lucrative rapid growth markets like the Middles East (p47), the BRICS (p44) and certain regions of Africa. But for those manufacturers looking to do this is the support right when it comes to finance? Not often, according to Mark Ager, managing director of Stage Technologies, an SME manufacturer of stage automation products. “We are a highly international business,” comments Mr Ager. “Depending on the year, we might do 80% of our business abroad, often with national governments. It is therefore crucial that our debt and liquidity is recognised across international boundaries.”
Not many manufacturers seem aware of the services a debt advisor can offer, but they can be extremely helpful Jonathan Duck, Managing Director, Amtico
But while this may seem a reasonable expectation in a globalised world, Ager says it was hard to find a bank that could (and would) do it. “Originally we were with NatWest, but they only understood debt in the UK. So we changed to Fortis about eight years ago. Fortis had a good understanding of European debt and that was where most of our business was at the time.” Then Fortis fell apart in the recession and in January 2009 informed Stage Technolgies that they would no longer bank for them. But that’s another story, says Ager. Dusting itself off from this turn of events, Stage Technologies went back to the banking market to look for a new partner which would support an increasingly diverse international mix of business. “We went to most big names but eventually settled with HSBC, primarily because of its international links. Obviously these include good links in Asia, but we were really sold on the fact that they could overcome a problem no one else seemed to be able to handle – America.” Ager says that, bizarre though it may seem, the USA is a relatively challenging market to manage in terms of finance. “American banks tend to have a ring around them. Cash held there is not recognised this side of the pond and it can be a struggle to get banks to take an integrated view of your liquidity,” explains Ager. While he says HSBC’s processes can be convoluted, they do the job. if they leverage your banking relationship effectively. Manufacturers are theoretically well placed for finance at the moment, concludes Evershed’s Hardie. “The top level messages from all the banks clearly put lending to manufacturers high on the agenda,” conclude’s Evershed’s Hardie. “If your experience does
not reflect this, challenge your relationship manager on it. If you are not satisfied with their response take your business elsewhere.” For more insight into manufacturing finance options see ’s outbound report Finance for Manufacturers circulated with this issue.
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Semta
In the roots Although he has not worked in industry, Whiteman has a strong affiliation with the precarious position skilled professionals who do have faced in the past. “I am from the Blyth in the North East and I lived there at the time that the shipyard and the coal mine – which between them employed more or less everyone in the community – were closed,” he explains. “I took my job with EITB because I remembered how truly sad it was to see those highly skilled people thrown into unemployment,” says Whiteman. “Government tried to create incubator projects. But that degree of impact takes decades to redress.” More than 30 years on, Whiteman is happy to report that the area is now developing pertinent skills and capabilities in the manufacture of wind turbines.
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Jane Gray talks to Philip Whiteman as he steps down as CEO of sector skills council, Semta, about the approach he has taken to addressing industry skills gaps, the successes he has had and the work still left to do.
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ttend any industry conference and it is only really when skills are discussed that fire lights up the eyes of spokespeople. More skilled people, better skilled people, new skills for emerging industries; the debate never grows cold. It’s a fact that is a blessing and a curse to Philip Whiteman, chief executive of sector skills council, Semta. For while industry leaders are deeply passionate about the value of engineering and manufacturing skills, they are also largely dissatisfied with the strength of the UK’s skills base and worried about industry’s ability to compete globally both today and in the future.
Taking this in his stride, however, Whiteman explains the rationale behind the approach he has taken to try and satisfy this demanding set of judges and jury. “I am not from industry,” he openly admits. “I started out in the mid-eighties in the City and it was not until 1991 what I joined the Engineering Industry Training Board that I started to learn more about the specific concerns involved.” The knowledge Whiteman gained in the financial services sector was however in short supply at the engineering training body. “They wanted someone to come in and make the organisation, which had just been privatised, more
Leadership in manufacturing
commercial and efficient,” he says. But it turned out Philip’s financial experience was useful to the EITB in more than one way. “The work I had done with Deloitte fed into a government backed initiative called the Business Expansion Scheme. We basically had to identify good prospects for this and help market them with the venture capitalist organisations and banks. I learned to differentiate a good company from one that was not going to be successful. To identify gaps in management skills and to understand the kinds of skills companies need to develop as they move from being small to medium to large.” As EITB struggled with achieving a massive culture change, away from being an organisation of civil servants focussed on auditing training capability in companies and toward an approach which talked to companies about their training needs, this knowledge proved immensely helpful. Fast forward 2004 and Whitman’s varied contributions to the development of the organisation by then known as Semta (see box) were recognised in his appointment as CEO. “I set out three ambitions for myself then, of what I wanted to achieve in five years,” says Whiteman. First, I knew we had to become employer led. Second, I needed to develop the Semta management team and, third, I wanted to sort out the financial shambles of the organisation once and for all and establish a strategy which would mean we no longer needed to use our investment fund, or the profits of our awarding body EAL, to pay for our operational activities.” On the second two points Whiteman says that “those left in the management team at Semta have been along for the ride and are now the right mix of people to take the organisation forward. I am also proud to say that in March this year I submitted a financial plan to the board which will see my ambitions in that area finally achieved – it took me eight years, not five, but we got there in the end.” It is his progress with ambition number one, however, which Whiteman rates as his greatest achievement at the helm of Semta. “My most important work during my time as CEO has been to create employer engagement and leadership in our skills development programmes,” confirms Whiteman. “Sir Alan Jones’ [chairman emeritus at Toyota UK and Semta] help was indispensible in doing this. He got the CEOs of BAE Systems, GlaxoSmithKline, GKN, Rolls-Royce and Kinetic actively involved on our board.” Whiteman says that while, on his own part, he was very focussed on results and outcomes, Sir Alan brought understanding to the development of Semta as a body to be trusted by industry and brought about high level ownership of industry skills issues. But while this big hitting buy-in has raised Semta’s profile in important circles, Whiteman does admit that it may have compounded a problem which still challenges the organisation. “I don’t doubt that our focus on engagement with
these large companies set us up for challenges in getting engagement with SMEs. I never quite feel that we have cracked that challenge.” It is essential for Semta going forward that this is given even greater attention that it has so far. Whiteman explains, “A lot of the exciting and successful training solutions we have launched only have pump prime funding. We have had success in getting industry support for the continuation of the Talent Retention Solution and the Women and Work schemes. But the funding has all come from
large companies.” If services like these are to continue benefitting industry, SMEs too will have to be convinced that they are valuable enough to make them reach for their wallets. See www.themanufacturer. com for our online feature examining the management skills companies need in order to successfully deliver an apprenticeship programme. This feature includes contribution from Semta’s awarding body EAL as well as insight from industry. @janefagray
I have sought to work collaboratively with other SSC’s for manufacturing, but, apart from our constructive work with Cogent, I have never been able to establish partnership with mutual benefit. I think other councils have missed opportunities to support their sectors Philip Whiteman, CEO, Semta
Becoming Semta Employers still often complain about the complexity of the skills landscape, but Whiteman’s career bares testament to the huge consolidation work which has been achieved in the last 20 years. In from the beginning, Whiteman assisted in the merging of the Engineering Industry Training Board with a succession of parallel training bodies including the Marine and Engineering Training Association and the Science Technology and Mathematics Council. In 2003, as financial director, he led the bid to license the bolstered organisation as a sector skills council and Semta came into being. With such a broad base of sector responsibilities, Semta now often receives the lion’s share of government funding for industry skills development – a fact which has not always been appreciated by more niche councils. “I have sought to work collaboratively with other SSC’s for manufacturing, but, apart from our constructive work with Cogent, I have never been able to establish partnership with mutual benefit. I think other councils have missed opportunities to support their sectors,” he concludes.
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Locks Brasserie, Dublin. The setting for TM’s manufacturers’ dinner
The IT
crowd As the saying among IT managers goes, you can only make an intelligent decision if you have intelligent data. Tom Moore acts as fly on the wall for a frank manufacturer to manufacturer discussion of how IT can be used to invigorate business prospects.
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f you were to personify a business, IT would be the nervous system. IT systems respond to hot and cold signals from the business environment and prompts a response. Or at least that is the theory, based on the assumption that IT ‘nerves’ are capable of gathering the right information, and performing appropriate logic leaps to output an appropriate result. In other words, Business Intelligence (BI) is now a requirement and not a choice for manufacturers. But what are BI systems today really capable of and are they ready to flex with manufacturing business models as they change to accommodate an uncertain economic outlook? There are few countries in the EU more aware of the effect of these factors on day-to-day business than Ireland. And on March 22
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hosted a dinner in partnership with manufacturing IT specialist Columbus, in order to find out more about how the nation’s manufacturers are responding to economic challenges.
The environment Ireland’s manufacturing sector grew slightly in March with the national Purchasing Managers Index rising to 51.5, just above the threshold of 50 that separates contraction and expansion. But this small win was the first increase for five months following a recession that landed large blows to an Irish economy which slumped back into recession last year for the first time since 2009. Ireland is well placed to benefit from its close economic ties with a growing US economy. But, like so many others, economic recovery is made vulnerable in Ireland by an unstable eurozone, to which it is tied by currency and as a key export market. The country is home to a large number of pharmaceutical and technology companies and is dependent on having a strong skills base to maintain this. Christine Lowry, managing director at drugs-maker Gerard Laboratories, a subsidiary of Mylan, and a guest at ’s Dublin dinner commented that although
Leadership in manufacturing
the skills shortage is the main concern for companies in the UK, it is less of a problem in Ireland. Despite the allure of working for a company operating within a high technology sector with large R&D investment, Ms Lowry recognises that “people are a lot more hesitant about moving jobs now, leading to better levels of skills retention.” “The economy has changed,” states Lowry. “Thirty per cent of staff at our site were non nationals two years ago because we had to go out of country to get the staff we needed. Irish people were going abroad as there was a guaranteed job when they came back but people are not doing this now. Expectations of wage hikes have come down so our central challenges are cost based. We operate in a global economy so it is vital to gain efficiencies.” In a globalised marketplace there are things that firms can and can’t do in order to optimise factory efficiencies according to national laws in the countries they inhibit. According to Simon Charlton, sales director at Columbus, BI is a tool that helps manufacturers put more in the ‘can do’ category. Furthermore he says this is no longer something business leaders need to be convinced of. Charlton reports that the technology is now a commonlyused tool in aiding decision making. Despite capital expenditure of all varieties coming under close scrutiny in these strained economic times, business at Columbus grew by over 20% in the UK and Ireland during 2011.
The forces at play There are a number of contributing factors behind this upswing of interest in BI, but Charlton points to the volume of mergers and acquisitions in manufacturing over the past five years as a key influence. Struggling companies have been picked up by larger firms keen to capitalise on the opportunity to increase market share while overall growth is low, but integrating these firms is a tall order. “Businesses have tended to go by the wayside or have been merged into a larger organisation over the course of the last decade or so,” explains Mr Charlton. “Most companies recognise the challenges of operating with disparate systems and data and know that driving systems together to obtain one version of the truth ultimately leads to better Business Intelligence. This is what they crave to grow or even survive.” In a world with fewer opportunities, fully understanding the wants and needs of the client and providing the most cost effective method of delivery is vital. So what can a provider like Columbus offer manufacturers to help achieve this asked one dinner guest? “One version of the truth,” repeated Charlton before continuing: “Making data more readily available to the people who really need it and not clogging up the IT department with reporting requests from end users. This will take demystification of business solutions to the next
The Irish Manufacturers Dinner held on March 22 was part of a series of events hosted by The Manufacturer and selected sponsors. ’s Directors Forum dinners are held regularly throughout UK regions and are themed on a range of industry challenges ranging from exploiting IT through supply chain visibility, seeking new markets, addressing resource security and closing skills gaps. To find out about the next Manufacturer Directors Forum event in your area contact Grace Gilling (g.gilling@sayonemedia.com)
People are a lot more hesitant about moving jobs now, leading to better levels of skills retention Christine Lowry, Managing Director, Gerard Laboratories
level and move away from the old school thoughts on business systems because it is no longer an IT function, IT is merely an enabler.” But there is a hurdle to overcome before businesses can achieve this change in perception. IT functionality must allow for the limited level of IT skills in non-IT roles if data access and analysis is to be more democratically spread. Charlton says that IT firms need to allow manufacturers “to further expose useful data useful data for users who need it without them needing programming capabilities to get to it.” For Raymond Ruck, business improvement manager at Michelin Tyres, this process of IT empowerment for non IT employees is part and parcel of the organisation’s international push to use every tool at its disposal to become leaner. Ruck says Michelin is now looking for ways to increase capacity without increasing headcount and is keen to share ideas on how to approach this challenge across its global locations and with external partners. What this means for the team of industrial engineers working on continuous improvement at the tyre maker’s plant in Ballymena, Northern Ireland, is a need to capture data from a range of international operations and use it to make locally relevant decisions. Ruck explains: “International productivity is measured by an integrated system that produces intelligence based on the number of eight hour shifts per tonne of output,” he said. “We make comparisons between plants not just at level of plant itself but the level of workshops and posts. KPI driven improvements are still there.” What Michelin are doing shows the value that good BI can add to a well integrated ERP system. It allows manufacturers to use better data but also helps to define best and worst practice in applying that data to business decisions. It has to be flexible so that it can be adapted for any type of business. As a measurer of numbers, BI breaks the process down so that if things don’t add up, manufacturers know where the problem lies so that production is optimised and margins multiplied. As the old saying goes, it takes time to build castles. But it takes intelligence to build the moat to protect your profits. @thomasmoore88
Sign up now for ’s BI Connect event on July 3. Contact Benn Walsh (b.walsh@sayonemedia.com) on 0207 401 6033 for more details.
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UTC Diary
UTC Diar
Prepare to hear a lot more about “the next great poverty-busting structural change” of our age. Chris Hilton, principal of The Black Country UTC explains the paradigm changing new education model which may be the answer to technical skills gaps in the UK.
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t was Prime Minister David Cameron who described the roll out of a network of new University Technical Colleges (UTCs) with the above words. And he did not underestimate the impact this educational revolution could have on social mobility and national wealth creation. My own college, The Black Country UTC, is one of the first UTCs to get up and running in the UK – but there will be plenty more to follow. In brief, a UTC is an exciting new educational institution offering students from Year 10 to Year 13 the opportunity to focus on science and engineering subjects in a specialist environment which supports the vocational application of those subjects. Links between classroom learning and relevant industrial and business processes are explicit in UTC curricula. Expert staff are responsible for making these links and building student competency in the use of industry standard technology. The support and interaction of industrial partners in UTC curricula is critical. They drive the education agenda and decide what employability skills need attention if the students are to meet the needs of industry when their time with the college comes to an end. Students at a UTC have a unique opportunity to get a head start in developing the skills required for an exciting and rewarding career in the fast changing engineering and manufacturing industries.
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The typical Black Country UTC student is passionate about pursuing a career using science, maths and engineering. But they swiftly come to understand that the employability and enterprise skills in the curriculum are of equal importance to the technical STEM focus and good performance in key GCSE subjects like English. In line with our vocational and professional ethos, expectations are high in terms of standards of attendance, behaviour, attitude and appearance. The Black Country UTC is based in a renovated school and received considerable investment in hi-tech specialist and engineering equipment through the Department of Education and our sponsors. Government awarded a £8.1million development grant to transform the site. In addition to the learning areas, there are five fully equipped workshops, six science laboratories, a learning resource area and specialist ICT facilities throughout the building with break-out areas for relaxation and private study. The site also has the benefit of a specialist sports hall, swimming pool, astro turf pitch, lake and outdoor education facilities. No student at a UTC is in danger of feeling their vocational education route represents a second rate choice to more traditional, purely academic pathways. To achieve our mission and reinforce our professional ethos,
y
the Black Country UTC has a 40 week school year spread over 5 terms. We operate business hours rather than those hours kept at schools and sixth form colleges. Sessions start at 8.30am and end at 5.00pm on Tuesday, Wednesday and Thursday and at 4.00pm on Monday and Friday – Though this does include time for private study and a range of enrichment activities. This means that over a two year period students get the equivalent of almost a year’s extra time to study meaning that there is no homework in Years 10 and 11. Each UTC has a level of regional specialism and the desire to reignite the Black Country’s dynamic industrial heritage is a strong motivator for everyone working here – and also for our sponsors Walsall College and the University of Wolverhampton. They share our vision to provide a world class facility which ensures an education for all, creating a generation of young people with the technical skills to enable them to become the engineers, scientists and designers of the future. This is the first in a series of diary articles from the Black Country UTC. In forthcoming readers will hear from issues the students themselves how they feel about being a part of this bold new education model. @themanufacturer
f o e e y o l Empmonth the 012 2 May
Luke Thickett Apprentice, Newburgh Engineering Luke Thickett may be only 18 years old but already he is taking strides in a promising engineering career. Luke works for Rotherham-based Newburgh Engineering and won the title of Apprentice of the Year at the 2012 Made in Sheffield awards on March 22. He took the award for his outstanding work on the exciting Bloodhound supersonic car project which aims to break the land speed record next year in Africa. Here he talks to about his apprentice experience, skills and his views on manufacturing as an industry for young people. What is your role at Newburgh Engineering and what skills are involved? At the moment my apprentice role involves working on various machines such as the Heller milling machine for the oil company Vetco. I am also machining parts and components for companies such as Rolls Royce. I have an essential role in the production of machine parts and have the important responsibility of ensuring they meet quality standards and are produced in good time. It really is great work but it is a hard job sometimes balancing the quality and timing demands. Organisational skills and meeting deadlines are important in my role. What attracted you to engineering? I never thought I would be going into engineering when I was at school, especially at the young age of 15. My introduction to the industry was at a career evening at my school. There were a lot of businesses and I was lucky to meet the Newburgh Engineering stall and got the chance to
speak to the relevant people. It really got me interested. Not long after, I found myself taking the apprenticeship with the company and I’ve stuck with it. You have to enjoy the job if you want a career in engineering, that’s the main thing. I don’t hate going to work in the morning and it is very satisfying to know that something I have created is going to be used somewhere. What was your involvement on the Bloodhound project and where do you see yourself in the future? My role involved constructing the gearbox for the car which I completed on my own. So far I would say it was the biggest achievement in my career. I am very proud to have contributed to the land speed record attempt. Hopefully the supercar will beat the record and reach the project’s goal of 1000mph. I am looking forward to completing more projects but I don’t know if they will be as spectacular as the supercar. After such an experience I have no idea where my future
will go but I hope to progress with Newburgh Engineering and see what happens next. Thanks to my good performance during my apprenticeship it looks like a full staff role with Newburgh Engineering will come around sooner than expected. Although I am not due to finish my Name of person apprenticeship Age: until July 2013 18 I have been told I should Employment: Apprenticeship with actually be Newburgh Engineering done in around started in July 2010 six months.
CV in brief:
Education:
NVQ Level 2 and 3 What do Engineering you think Interests: is the best Socialising with friends way to get young people interested in the manufacturing and engineering sector? Promoting the apprentice route is the best way to encourage young people to pursue a career in engineering. Apprenticeships give people the hands on learning experience that the industry needs them to have. They offer practical experience. University is not for everyone and when you finish an apprentice programme you have a job, unlike university where once you gain the qualification you have to look for a job. @themanufacturer
Have your say at www.themanufacturer.com
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Regulation Update: Protected conversations
Protected
conversations:
A common-sense approach
In November 2011 David Cameron announced a consultation for the idea of ‘protected conversations’ in the workplace. The aim is to make it easier for employers to manage difficult employment issues with less risk of a tribunal claim. Chris Coopey, head of manufacturing group at accountancy association MHA and partner for Carpenter Box LLP, explains. Where we are now At the moment, dealing with an employee who underperforms or misbehaves can be both complex and risky. Managing underperformance is about having a fair process and sticking to it, but this is not as easy as it sounds. Often, employers or managers cannot face the idea of following what they see as a complex process to manage someone out. Apart from the time and expertise required, employers fear the possibility of a tribunal claim, which may cost them many thousands of pounds in legal fees and compensation. According to the British Chambers of Commerce, one in five SMEs surveyed (Oct 2011) has been threatened with an employment tribunal, while the majority of smaller firms believe that employment tribunals are weighted unfairly against the employer. BIS figures show that in 2010/11 the average cost to a business defending itself against a claim was £4,000. As things stand, conversations between employers and employees are only regarded
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as ‘protected’ when they relate to a possible exit arrangement and then only where there is an existing dispute. Even at this, the end-game of the employer-employee relationship, the negotiation of a so called ‘compromise agreement’ can be fraught and expensive.
The proposal Introducing a structure for ‘protected conversation’ would mean that if such a conversation was requested by an employer (or an employee), it could take place within that legal netherworld known as ‘without prejudice’. In other words, anything said during such a conversation, could not later be used in evidence in a tribunal or court of law. The thinking behind this is that employers, and particularly SMEs (who may not have a qualified HR resource and for whom a long drawn out process can be both expensive and morale sapping) will be able to deal with performance issues much more simply and with far less risk of a tribunal claim than is presently the case.
Feasibility So, is the idea of a protected conversation workable? Critics have cited the difficulty of framing the rules around such conversations, particularly in relation to anything that might smack of discrimination. On this point, former employment relations Minister, Edward Davey has confirmed that the aim is not to protect employers who make discriminatory comments. He says that the Government’s focus is to facilitate a balance, so that people would understand what a protected
conversation is and when one was taking place, but without the process becoming so complex and rule bound as to defeat the object. A number of HR professionals and employment lawyers have already commented that while the aim may be laudable, in practice the goal may be very difficult to attain. Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development, commented: “proposals to introduce some form of ‘protected conversation’ to allow employers to discuss issues like retirement and poor performance without fear of a tribunal claim, while well meant, are likely to actually increase confusion among employers, add to red tape and generate additional legal disputes. By offering false comfort, the Government risks creating a field day for employment lawyers, and a nightmare for businesses.” No date or terms of reference have been set for the protected conversation consultation, but BIS predict it will commence in the next 2-3 months.
Resourcealert Water footprinting
In the UK water is generally cheap and is used liberally both in a domestic and business context. But Joe Flanagan, principal consultant sustainability at international materials technology company Ceram, warns that this situation will not last and urges manufacturers to place water usage at the heart of corporate responsibility.
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anufacturers must start paying more than lip service to reducing water usage if they want to avoid supply disruptions, escalating costs – and maybe even a water trading scheme similar to that now applied to carbon – in the near future. Since the Government released its Water for Life white paper in December it has become obvious that insecurity in current water supplies means business as usual will soon represent a very different picture than it does today. To cope with this there must be greater emphasis on managing water demand.
Parallel problems Policy pressure on materials and utilities management can move fast. For proof of this, we only need to look at the issue of carbon emissions in the UK, which has moved from little more than hot air to real action in just a few years. Carbon policy changes were triggered by a combination of energy price rises, legislation, the development of more robust corporate responsibility programmes and genuine environmental concern. The Water for Life paper shows similar drivers for the development of a matching approach to water usage. This may lead to water footprinting of products, production facilities and supply chains in much the same way as carbon is now traced. Industry must curb its water usage now if it is to be able to cope with such a scenario.
Here and now Water insecurity is not a hypothetical problem for future generations to deal with. Many parts of the UK are already suffering from drought and a number of water stress projections rate the South East as facing ‘extreme stress’, with annual water availability by 2020 estimated at less than 0.5 million litres per person – on a par with some areas of Africa and the Middle East. The implications of water stress for manufacturers are far-reaching. Adequate water
supplies are vital to many industrial processes and restrictions on abstraction licences and supply disruptions would cause wide ranging problems. In addition, sectors which consume high volumes of water, such as food, drink and paper-making, would be hit with the rising cost of a vital raw material and/or restrictions on abstraction licences. Water for Life emphases the need for greater water efficiency and policy-makers envisage water suppliers becoming a more proactive change to encourage this, offering advice as a valueadd service. This may be an optimistic assumption based on the deregulated UK energy market where price is the main driver. Energy suppliers currently offer limited energy efficiency advice to industrial consumers.
Forward thinking Key players in this sector likely to be most affected by disruption to water supply or regulation of usage are already acting to reduce water usage as part of wider sustainability programmes. Food and drink manufacturers Coca-Cola and SABMiller, for instance, now disclose water use and are applying pressure on supply chains to do the same.
Manufacturers of construction products are experiencing mounting demand for disclosure of the quantity of water associated with their ranges. In the UK, the Green Guide from the independent industry research group, BRE is the accepted assessment for sustainability of construction materials and products. Under this scheme, products are classified according to a ranking system where A+ has the least environmental impact and E the greatest. The impacts are assessed under a whole lifecycle approach against 13 criteria – one of which is water extraction, while three relate to water pollution. If this kind of scheme becomes applied more broadly manufacturers will need an accurate picture of water usage. They will need to know how it is used, where it is used and in what quantity. Few companies currently have this understanding. Without this fundamental information, progress cannot be made in managing this vital resource, exposing businesses to the risks associated with price rises and supply restrictions. Ceram has produced a White Paper on the benefits of water footprinting. To download a free copy, go to www.ceram.com.
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MANUFACTURING PERFORMANCE. AGILITY. PRODUCTIVE NEGOTIATIONS. AND A WILLING WORKFORCE. TAKE CONTROL OF CHANGE IN CHALLENGING TIMES
Today’s agile manufacturing industry requires engaged, flexible employees who will deliver the productivity you need to succeed in the global market. As the experts in manufacturing workplace dynamics, our HR and legal experts have developed the tools and resources you need to introduce flexible, high performance working practices that deliver competitive advantage. Become a member of EEF because when you’re faced with tough decisions, we’re here to help. Visit www.eef.org.uk/change to download practical guidance on ways to introduce flexibility, change employee terms and conditions, optimise working time cut back on absence.
EXPERT EMPLOYMENT, HR AND INDUSTRIAL RELATIONS SUPPORT FOR MANUFACTURERS. MEMBERSHIP – CONSULTANCY – LEARNING & DEVELOPMENT – POLICY & REPRESENTATION
EEFInsight Flex for
change U
Jeff Neild, national head of employee and industrial relations at EEF, explains why communication is the key to workforce flexibility
K manufacturers have responded successfully to global competitive pressures by moving away from cost-based production towards innovation and product development. The ability to seize opportunities and respond quickly to changing market circumstances has underpinned this transformation. In consequence, however, the industry has seen increasingly unpredictable order flows coupled with a need for capabilities spanning design, manufacture and servicing. As manufacturers strive to exploit niches, respond to customer needs and tap into new export markets, a flexible workforce is crucial to success. Competitive pressure means it is vital that employee resistance to new ways of working is overcome – and the onus is on leaders to communicate what change means for the company and individuals. In a recent EEF survey, most manufacturers (80%) said they had achieved the flexibility they needed through a cooperative relationship; a whopping 94% said cooperation would be vital in the next three years. Changing working practices and hours is not easy but the benefits could be considerable. Manufacturers can use a range of practices to achieve flexibility and managers should have a set of
tools to choose from depending on company circumstances or market conditions.
Changes to hours worked Overtime can provide a quick response to unexpected situations but it can be costly. It should only be a short term approach, particularly as many overtime agreements are voluntary. Varying shift patterns through annualised, banked or compressed hours systems may be a better long-term solution to achieving flexibility. Annualised or banked hours systems are helpful to businesses with volatile demand patterns. They can be used to reduce working hours in a lean time, holding them in reserve for a ‘return to usual’ scenario. Compressed hours also help to match the availability of labour to fluctuating demand, although the approach may be better suited to industry sectors where fluctuations are predictable.
Changes in workforce size Decisions to reduce or increase the workforce can be vital to maintaining flexibility. Many manufacturers use temporary workers on non-standard contracts, however, those with short order books are less likely to find temporary workers effective in achieving flexibility. During a downturn, companies can retain key skills and minimise job losses
through a variety of measures including job-sharing, multiskilling, voluntary unpaid leave, short-time working and a tighter control on pay.
Varying production practices Many companies operate at multiple sites and have collaborative working relationships with supply networks. This allows them to move production across facilities in response to demand.
No single answer The measures manufacturers apply to achieve day-to-day flexibility are influenced by their size and sector. There is no “one size fits all” approach. In today’s manufacturing climate, change management can be tough. It is not easy to win-over employees or trade unions in an economic squeeze. But with the right HR approach and understanding of employment law, employers can create a flexible and productive workforce without the risk of litigation. That is why EEF is providing resources and events to support manufacturers. To kick off we are offering an HR Change Assessment Tool that allows managers to find out where they stand against best practice in change management. In May, we are releasing free resources to help managers build flexibility into their workforces. These include guidance on how to change workers’ terms and conditions, implement lean manufacturing systems, optimise working time and reduce overtime while managing absence effectively. Take advantage of EEF’s free online resources. Visit www.eef.org.uk/change
On July 5 will host a flexible workforce event: Flex for the Future. See www.themanufacturer.com for more details
Have your say at www.themanufacturer.com
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Russia, with love
Tom Moore investigates the challenges of doing business in Russia and speaks to manufacturers already there to explore the vast export opportunities.
With over 600 UK firms now exporting to Russia, is there a market opportunity for your business
Russia is the UK’s fastest-growing major export market with exports rising from £2.3bn to £4.8bn between 2009 and 2011 Over 600 UK companies currently have a presence in Russia with manufactured goods being the main export In comparison with the other BRIC economies, exports to Russia remain behind China and India but are ahead of Brazil and other emerging markets such as Turkey, South Africa, Indonesia UKTI recently identified The Skolkovo Project - a £3bn science park development for up to 30,000 residents focused on ICT, biotechnology, energy, space and nuclear technologies – as a high value business opportunity for UK firms The Russian Government has established a number of special economic zones to increase direct investment from foreign companies, including Free Trade Zones, Export Processing Zones and Free Ports
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R
ussia is the UK’s fastest growing export market. With increased spending power among its 142 million citizens, trade between the two countries rose by 39% between 2010 and 2011 and is now worth £4.78 bn. Despite this rise, there are some clear challenges to overcome when exporting into Russia. According to the World Bank’s Doing Business project, which ranks 183 countries in order of ease of doing business, Russia sits in 120th place, behind the likes of Nicaragua and El Salvador. One reason behind this is that, as the largest country in the world with an area of 17,075 million km², there are discrepancies across the nation in terms of infrastructure and general ease of doing business. However, Russia has been investing heavily in industryrelated programmes to entice foreign companies to its shores.
While growth in Western European countries remains static, Siegfried Wolf, chairman of the board at investment firm Basic Element’s manufacturing subsidiary Russian Machines, says that Russia has “the greatest economic potential in Europe.” Wolf believes that “Russia’s economic success is a partly down to the Russian Government and its commonsense economic policies, such as accession to the World Trade Organisation (WTO), which encouraged foreign and internal investment. Infrastructure is continuously developing and improving to further increase investment potential.”
When you win Russian roulette The Russian Government has a programme in place to expand and develop its automotive industry, with high state investment planned until
Export Focus: Russia
2020. For those selling into this market such as metrology firm Renishaw, the opportunities are already turning into profit, with a 20-30% growth in sales between 2010 and 2011 and further double digit growth predicted year-on-year. Russia makes up a core group of growing markets the company is hoping to balance against big traditional markets in the West with low growth. Rydian Pountney, general manager of ROW sales at Renishaw and board member on UKTI’s Advanced Engineering Sector group, comments, “Russia is becoming a bigger vehicle manufacturer and they need western equipment for that type of production.” Backing up the points made by Wolf, Mr Pountney asserts that “recent successions of government in Russia have identified and supported industry, which then filters through the manufacturing chain.” However, the well-travelled sales manager says that despite this period of stability, there are times when sales can be affected by moments of political uncertainty. “Like with the recent election, you tend to get an element of nervousness in the market before and after, bringing everything to a grinding halt.” Backed by big state procurement orders, Renishaw’s revenues are also benefitting from supplying the country’s booming aerospace and defence sectors. Pountney reasons, “If you have a good product there is definitely a demand but Russia isn’t the cheapest market to do business in and it can take quite a long time to break into.”
A land where price still means quality If there is British technology not yet developed or sold within Russia, Pountney asserts that companies will benefit from entering the market now to establish a “quality reputation that will last for years if it is maintained.” Quality means everything to the Russian who tends look at the technical aspects of a product rather than the cost. The man from Renishaw says that although the cost to service a business is quite high due to geographical challenges, the firm is able to maintain its margins in the country as people are willing to pay for quality not just at the point of sale, but throughout the life of a product. According to David Cant of Albion Overseas – a distributor specialising in the manufacturing sector and advice firm for companies entering Russia – it is not only Renishaw that is able to benefit from higher margins in Russia but manufacturers right across the board. He advises against selling on price as there are other countries widely acknowledged as being cheaper than the UK. “It’s a different mindset. Manufacturers should be aware that Russia is not a price sensitive market like Western Europe. They want quality and are prepared to pay for a better
Macedonia Vele Samak, Macedonia’s Minister for Foreign Investment, pinpointed opportunities available in the country’s steel, machining and chemical sectors during an April UK-Macedonia Investment Forum. He said that with continuing investment in industrial skills, “firms will have no problem in finding well educated and highly skilled engineers.”
Asia Prime Minister David Cameron toured Southeast Asia and Japan in April with what he described as the “most highpowered British business delegation ever to visit the region.”
Russia’s economic success is a partly down to the Russian Government and its common-sense economic policies Siegfried Wolf, Chairman, Russian Machines
Mr Cameron said that the UK had ignored key trading partners such as Japan, Malaysia and Indonesia for too long. “I’ve not been afraid to put myself on the front line of the sales pitch for British business and encouraging investment into the UK,” he declared. Indonesia David Cameron was accompanied on his trip to Indonesia by representatives from BAE Systems and AgustaWestland as he pushed for sales of British-made defence products. While in the country, the PM welcomed a £326m order for Airbus passenger jets from Indonesian airline Garuda. Malaysia Alongside Malaysia’s Prime Minister Najib Razak, Cameron announced an aim to double bilateral trade between the UK and Malaysia to £8bn by 2016. Meanwhile, 65 UK defence companies exhibited at Defence Services Asia 2012, held between April 16-19 in Kuala Lumpur. Willy Hockin, director maritime at trade organisation ADS said that “industry anticipates significant demand from the region in the future.” Japan Minister for Universities and Science, David Willetts, signed a partnership with Japanese officials agreeing to greater collaboration on space research and technology. The partnership will seek to identify commercial opportunities for industry to act on. The sector contributes £7.5bn to the British economy each year.
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Export focus: Russia
The GAZ automotive plant in Nizhniy Novgod plant, a company owned by Basic Element
product,” he says. Although Western Europe is still by far the leading export market for British firms, Cant asserts that manufacturers would be wise to look outside their comfortEU-zone as a large number of firms are making the same thing here, whereas there are gaps in the Russian market that UK companies can fill.
Crime and punishment However, many foreign investors are scared off Russia by poor legal safeguards, as well as high levels of bureaucracy and corruption. Stephen Hopkins, head of international operations at law firm Eversheds, pinpoints this problem as a central reason behind Russia’s low score on the ease of doing business charts. With UK businesses being known to lose out on contracts because of bribes, Mr Hopkins warns: “If a Russian subsidiary or interest breaches legislation, it is punishable by UK law even though it takes place abroad.
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Russia is not a price sensitive market like Western Europe. They want quality and are prepared to pay for a better product David Cant, Albion Overseas
That is a big change and it has made companies more wary of what they are doing in territories that are known to have bribery or corruption going on.” However, improvements are being made with the government making the fight against corruption a key priority. Putin’s Russia is very different from that of the Yeltsin era and manufacturers will certainly benefit from the strides taken under his leadership, including the improvements to the education system.
A base with skills Russia has one of the highest rates of people with doctorate degrees in the world and around 23% of the population have completed higher education. Combining this with a positive image of manufacturing that has been lacking in the UK in recent years, there is a good skills base available for British manufacturers to take advantage of.
Siegfried Wolf, chairman of Russian Machines, has witnessed this canny investment and, as with many companies in the sector, has directly contributed to providing skills. “Russian schools and employers have invested much time and collateral building up the industrial skills base and now that policy is paying great dividends,” he says. “Manufacturing today is a very tech-consuming process so the series of programmes whereby enterprises support technical schools to create opportunities for graduates on the production floor is invaluable.” Workforces don’t stand still so this attitude from Russian firms will benefit any subsidiary that sets up there. By the same token, business doesn’t stand still either. With a mass of opportunities available in Russia, large UK firms are already reaping rewards. Smaller companies now have the chance for to come in and make their mark. @thomasmoore88
Exports RBS
Within ready reach: promising opportunities in the
Middle East Many of the Middle East’s hugely diverse markets are as potentially lucrative as they are untapped. Peter Russell, head of manufacturing, UK sector coverage at Royal Bank of Scotland, considers the export and growth opportunities – and the support that successful manufacturers can call on to take full advantage.
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hile the BRIC countries enjoy the lion’s share of media coverage of emerging markets, the Middle East represents a market that’s not just closer to home but in some ways of greater appeal for UK exporters. In certain aspects (and locations) the Middle East is more mature and well-developed. A recent EEF/RBS survey of UK manufacturers found that around three in 10 companies anticipate exports to the Gulf to increase over the coming 12 months, while almost four in 10 expect that trade to increase over the next five years.
More than just emerging Louis Robinson, head of trade and networking origination for RBS in Europe, the Middle East and Africa, says the region’s growing status as a global centre for itself is part of the attraction for UK
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manufacturers: “Dubai alone is the world’s third-largest re-export hub. That makes it a magnet for companies making consumer or industrial goods that can be sold onto markets with which they might not necessarily want to trade directly. If export companies – and their bankers – in the Middle East are prepared to absorb the risks that some UK manufacturers might associate with certain markets, then those locations become essential targets.” Chris Innes-Hopkins, director for UK Trade & Investment (UKTI) in Riyadh, says perceptions of Saudi Arabia as being almost exclusively about oil and gas are well out of date. “The greater the realisation that Saudi Arabia has an ambitious industrial diversification programme underway, the sooner UK manufacturers can take advantage of the opportunities opening up,” observes Mr Innes-Hopkins. “High-technology manufacturing, pharmaceuticals, biotechnology and automotive industries all represent fast-growing sectors. And
the country’s relative proximity to the UK can offer greater flexibility and cost-effectiveness around aspects such as transport, supply chains and inventory – not to mention an affluent domestic consumer base and access to markets elsewhere in the region.” Key to British success in Saudi has been to understand the importance of developing contacts though working in partnership with UKTI, mutual British/Saudi (or British/regional) trade bodies and UK-based professional services firms with established reputations in the region. According to Innes-Hopkins, it’s where persistence and commitment pays off: “The bottom line is that, while British quality and innovation is highly admired and valued at a premium, winning export opportunities requires having a presence here.” And that increasingly means more than just making occasional market visits with a Dubai business card. Government and business leaders alike want their suppliers close to hand, whether for service, support and distribution or full-on production and assembly.
Case Study: Svaja
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Achieving an Arabian dream
develop what is now a thriving export trade across the Middle East.
UKTI has been instrumental in supporting businesses large and small break into Middle East markets, tackling trade barriers, adjusting to cultural differences and adapting commercial and business development strategies to the nuances of individual countries. “It’s easy to assume that neighbouring markets have broadly similar needs – but nothing could be further from the truth,” says Kristina Bobs, whose company Svaja, which designs and manufactures glassware, linens and weaves for luxury hotels, resorts and restaurants, as well as private residences, worked in partnership with UKTI to
“As a businesswoman, I wanted to demonstrate I could negotiate with buyers and decisionmakers in what is a male-dominated business culture,” says Bobs. “My UKTI advisor provided multiple but strategically targeted introductions, starting with Dubai – and since then, we’ve gone on to enjoy success throughout the region.” That was in 2007. Since then, Svaja has established representatives in Dubai and Abu Dhabi, with plans to open a showroom in Dubai and appoint representatives in Kuwait and Oman. The company continues to work closely with UKTI. Within five days
of accompanying a trade mission to Saudi Arabia (in February 2011), having commissioned UKTI to produce a report to identify potential customers and distributors – resulting in enormous interest in Svaja at embassy receptions in Riyadh and Jeddah – Bobs secured new orders and met new contacts who were shortly converted to commissions and invites to visit again. “The key is understanding who to target and what kind of offer will appeal to them,” says Bobs. “If you’re looking at exporting to a diverse range of countries, there are always so many unknowns at first. There’s no substitute for the knowledge that comes from being on the ground. That’s why I keep going back to UKTI.”
Exports RBS
States of stability Regional instability across the Middle East and North Africa might well raise questions among manufacturers seeking export opportunities. Yet while high-profile conflict in Syria and tensions with Iran may cause alarm, Qatar and the United Arab Emirates (UAE), as well as Kuwait and Oman, retain the confidence of the numerous global corporations. Many of these have established regional hubs there, relocating sizeable expatriate management teams while investing in training and up-skilling nationals and preparing them for the numerous professional and technical roles being created by multinationals and local employers alike. Mark Ellam, who represents UKTI in Qatar, says, “The emphasis is on developing more self-sufficient economies, reducing dependence on the oil and gas sectors and diversifying the private sector. That creates new opportunities for British firms – exporting components and finished goods, as well as innovation in production techniques. Qatar is regarded internationally as a sound economy – look at its having been awarded the World Cup in 2022; that’s a sign of enormous confidence. And the work that’s generating – in terms of infrastructure, hospitality, services, energy and environmental technology – is opening up new markets for UK manufacturers.” Many of the major contracts currently out for tender may go the way of larger British organisations – but many of their highly valued suppliers, encompassing SMEs and MSBs in the UK, are already seeing the knock-on effect come their way. “Of course, UK firms which assemble or produce goods in the Middle East to supply larger UK customers, in partnership with local organisations or family businesses, will hope to be given opportunities to sell into the domestic market here too,” says Louis Robinson. “So there are spin-off benefits too, for those firms with the appetite and resources to capitalise.” In the UAE, there’s a different kind of stability dividend for potential manufacturing exporters and investors. Frances Moffett-Kouadio, UKTI’s director in Abu Dhabi, says, “In some ways, the Arab Spring has provided a wake-up call. There’s a growing realisation that western and northern emirates, with economies not yet matured to anything like the extent of Abu Dhabi and Dubai, represent excellent opportunities for development, especially as neighbouring countries are emerging as strong players, regionally and globally.”
UK organisations might play a vital role, as reliable partners with expertise to impart to home-grown manufacturers. “Much of the focus here is not just on producing high-quality goods; parallel to that is building and supporting sustainable industries, both in manufacturing itself and in supplying larger engineering and other infrastructure projects which might previously have relied more heavily on imports,” comments Mr Moffet-Kouadio. “In most of the emirates, there are certain free zones that offer advantages for foreign direct investment on a stand-alone basis, but increasingly we expect to see greater joint work between foreign – we hope many of them British – and UAE-registered manufacturers and distributors.”
A diverse region, a promising future Within striking distance of the UK, the experience of many of our successful exporters has certainly been that the Middle East is an accessible, commercially sophisticated market with a rich heritage of trading with the UK – and a strong appetite to continue. And with the right connections, the opportunities look set to remain both lucrative and winnable. Of course, one of the key distinctions between the Middle East and the BRIC markets, or fast-growing economies like Turkey or Mexico or Indonesia, is that it encompasses so many independent countries, many themselves characterised by diverse cities and regions. But that’s perhaps why there’s so much on the horizon there for UK manufacturers. To find out more about how RBS can support your Middle East export trade, contact: Peter Russell, Head of Manufacturing, UK Sector Coverage Tel: +44 (0)20 7672 1007 Email: peter.russell@rbs.co.uk
For advice from UK Trade & Investment (UKTI), contact: United Arab Emirates: Frances Moffett-Kouadio Director Tel: +971 (0)2 6101520 Email: frances.moffett-kouadio @fco.gsi.gov.uk Saudi Arabia: Chris Innes-Hopkins Director Tel: +966 (0)1 4880077 Email: chris.innes-hopkins@fco.gov.uk
Qatar: Mark Ellam Director Tel: +974 (0)4 4962000 Email: mark.ellam@fco.gov.uk
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With reliability as the grail, Jane Gray finds that crusaders for better maintenance and business continuity planning could benefit from closer alignment.
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anufacturing is an intrinsically high risk industry. There are so many things that can go wrong with equipment, logistics, IT and damaged stock. The vulnerabilities are everywhere, threatening a company’s ability to deliver reliably for its customers. Of course, one way to protect against this Damoclean situation is to establish a thorough maintenance schedule for all business and plant assets. Another is to expect the unexpected with a well devised business continuity plan. But how well are these two approaches to risk management and reliability being executed by manufacturers? Furthermore, is the relationship between them properly understood? According to organisations like operations change management business Reliable Manufacturing, maintenance strategies generally leave considerable room for improvement. “A lot of the day to day activity of maintenance professionals in manufacturing remains reactive,” comments Andrew Fraser, MD of Reliable Manufacturing. “It is seen as crisis management.” “With this approach,” continues Fraser, “there is far more likelihood of big things going wrong; whether this is in relation to safety, environmental issues or big production losses,” the inevitable consequences of which are downtime and loss of reliability. It is exactly this scenario that a good business continuity plan should seek to avoid, but David
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What’s
the worst that could happen? Being ‘at the scene of the crime’ can lead to maintenance being unfairly blamed for downtime.
McKeown, CEO of the Institute of Asset Management, suggests that blurred understandings of company purpose, coupled with silo approaches to risk management mean that appropriate measures for continuity of production might not be in place at many firms. “It is amazing how many companies do not share a clear view of what they are actually there for,” comments Mr McKeown. “But without this, a company cannot start to fully understand its risk or create a formal risk register. This makes it impossible to formulate appropriate measures and processes for risk avoidance – such as planned maintenance.” McKeown sees this leading to a situation in which many companies are scheduling maintenance to protect against imagined risks or those which have been overlooked. A further wedge is driven between mutually supportive
maintenance and business continuity plans by confused management terminology. “None of these terms are properly defined,” McKeown observes. “Some people would understand that a business continuity plan is there to protect against the possibility that an organisation should fail to fulfil its purpose. But others would equate it with specific contingency arrangements – like whether you have an alternative business location to go to in the event of a fire.” This lack of clarity means that as many as four in five businesses fail to link maintenance with business continuity planning or to properly include maintenance professionals in essential assessments of business risk. This is the view of Mical De Boer, business continuity director at disaster recovery and semi-permanent building provider De Boer Structures.
Operations maintenance and repair
Andrew Fraser Reactive approaches to maintenance often end up laying the blame for downtime at the wrong door says Reliable Manufacturing’s Andrew Fraser.
21st November 2012 Grange Tower Bridge Hotel, London
Call for Papers
“When production stops there is an assumption that it must be a maintenance problem because people can see maintenance staff working on the kit. What we actually find however is that most problems with equipment are actually induced by the way in which the plant is operated,” asserts Fraser.
invites academics and manufacturers to present examples of best practice and research & development in all areas relating to the improvement of the UK’s manufacturing competiveness at this year’s Manufacturer Directors’ Conference. Topics to be covered include product development, export strategies, supply chain and logistics, innovation, design, leadership, skills, finance and legislation.
To achieve true asset optimisation and reliability of performance Fraser advises that plant efficiency programmes led by manufacturing that includes maintenance input are more successful than those led by maintenance with a manufacturing input.
For further information and to submit your abstract, please contact David Rodriguez-Vega at: d.rodriguez-vega@sayonemedia.com or on +44 (0)207 202 7483
Those interested in presenting should send a 150 word abstract to David Rodriguez-Vega by 31st July 2012.
Corporate sponsor:
“Enlightened companies will work on improving their reliability from a whole organisation perspective. There needs to be an education process around the real causes of failure and wide engagement in a strategy to avoid them.”
EPSRC Centre for Innovation
Business continuity in manufacturing Despite the high risk nature of manufacturing business continuity management has a relatively weak following in the sector. A 2012 report from the Chartered Management Institute showed that 58% of UK manufacturers have adopted BCM – far behind financial services organisations, utilities
companies and much of the public sector. For those manufacturers that have adopted formal BCM the principal drivers were noted as: customers, insurers and corporate governance. According to the Business Continuity Institute (BCI) manufacturers stand to gain
some special benefits from the implementing BCM, above and beyond those found in other sectors. In a 2010 report investigating the business case for BCM showed that the sector was motivated by gaining lower premiums on, or simply the ability to access, products such as business interruption insurance.
In a 2010 report investigating the business case for BCM showed that the sector was motivated by gaining lower premiums on, or simply the ability to access, products such as business interruption insurance
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Operations, maintenance and repair
“Based on my own experiences, I would estimate about 80% of businesses have a disconnect, or no connection at all, between maintenance and business continuity,” he says. Backing up McKeown’s suggestion that a disconnect between maintenance and business continuity plans can lead to risk mismanagement, Mr De Boer observes that poorly aligned maintenance and business continuity concerns often result in critical assets being neglected. “As a general rule, those individuals or businesses that have pulled together a business continuity plan tend to be more forward thinking than those that haven’t,” comments De Boer. “However, even these businesses won’t necessarily have considered finer details such as maintaining auxiliary power.” Furthermore, De Boer says that even where maintenance requirements for risk mitigation around details like auxiliary power
Generally only the larger companies – perhaps about 20% of those operating – would have a routinely allocated budget to standby power and other maintenance issues Mical de Boer, Business Continuity Director, De Boer Structures
are realised, cost is a debilitating factor. “Generally only the larger companies – perhaps about 20% of those operating – would have a routinely allocated budget to standby power and other maintenance issues. Many of those operating in the remaining 80% might argue they can’t afford maintenance generally, let alone for specifics such as standby power.” According to McKeown, this attitude is again representative of mismatched risk analysis in business continuity planning and maintenance. “If your purpose is to output product for customers then maintenance of equipment is a key route to mitigating the risk of failing to do that – and damaging reputation in the meantime,” he comments. Coming back to the issue of fire fighting maintenance tendencies McKeown continues: “The extent to which you are able to reduce your risks will depend on the type of maintenance you do.” To calculate what maintenance
approach should be taken with regards to individual plant assets the Institute of Asset Management advises a careful assessment of the assessment process which prioritises maintenance of those assets which, should they fail, would jeopardise the company’s agreed and shared purpose. “This process will justify maintenance budgets,” comments McKeown. “It will also help to highlight areas where equipment is being over-maintained due to overzealous manufacturer maintenance advice. Too often in maintenance a budget and schedule is set arbitrarily without proper understanding of what value is coming from it.” Summing up, the Institute of Asset Management’s CEO observes that the key to getting the right balance of appropriate, well focussed maintenance for the promotion of business continuity is to “understand what you are trying to protect yourself from.” @janefagray
Maintenance in a manu-service world David McKeown of the Institute of Asset Management
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s a trend for the ‘servitisation’ of manufacturing continues to rise so does the complexity of the network of service contracts held between any one manufacturer, their suppliers and customers. Understanding your commitments and liabilities within service agreements is important if risk is not to escalate in the supply chain says David McKeown of the Asset Management Institute. It can also help companies to perceive the interaction between maintenance and business continuity more clearly. “As companies outsource one or more of their activities, like maintenance or facilties management” says McKeown, “there is a danger of assuming that others will look after your interests as well as you would.” In other words, outsourcing maintenance may mean that you have relieved the company of that particular workload. But it does not
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mean that you have relieved the company of the risk involved in that activity not being carried out correctly. Taking Rolls-Royce as the habitual example of a manu-services company McKeown explains, “Under its power by the hour model Rolls Royce will decide when engines need maintenance or renewal. But this does not mean that the risks of engine failure have disappeared for the airline. It simply means that the understanding and mitigation of that risk has transferred to Rolls Royce.” While acknowledging that the service model can work well with the right contract and the right partner, McKeown warns that there is not widespread good practice in supporting the visibility of outsourced risk. “Companies need to be asking ‘what attitude to risk are you taking in my maintenance contract and what are you spending money on to protect against disaster or disruption?’” Equally those manufacturers offering maintenance contracts for their products must be prepared to share this information and be methodical in forming a maintenance programme which bears relevance to customer business continuity risks.
Manufacturing Technologies
Save volts, save for the vault Voltage optimisation is a nondisruptive, highly effective way for manufacturers to cut CO2 emissions and reap the benefits of reduced energy bills. The technology has been available for over a decade, but it is only now – as regulatory, financial and social pressure accumulate around energy consumption and carbon footprint – that voltage optimisation is being recognised for its game changing potential. Dr Alex Mardapittas, managing director of EMSc (UK), manufacturer of the Powerstar voltage optimisation system, explains how the technology works.
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any manufacturers are yet to take steps to reduce the energy consumption and carbon emissions associated with their operations. Often the impact that installing green technologies might have on equipment and operating efficiency is cited as the main reason for this reluctance. However, one proven and reliable way exists for manufacturers to meet their energy and CO2 reduction targets without affecting processes, output and efficiency. Voltage optimisation is an electrical energy saving technique in which a device is installed in series with the mains electricity supply to provide an optimum supply voltage for the site’s equipment and, on average, energy consumption savings of 12%-15% can be achieved. The reason the technology can have such a significant impact on energy used is because on the whole, the National Grid supplies a higher voltage than is generally by appliances in the home or plant. Although the nominal voltage in the UK is 230V, the
average delivered is actually 242V and this ‘over-voltage’ means that energy consumption, and bills, are unnecessarily high.
Not only but also In addition to reducing energy consumption and CO2 emissions, high quality voltage optimisation offers a number of benefits. It requires no maintenance, offers protection against voltage spikes and surges, a significant reduction in harmonics, independent three phase control to provide voltage phase balancing, and an intelligent interface to track performance in real time. Virtually all manufacturing sites can benefit from reducing their voltage and, while the cost of a voltage optimisation system will differ based on a site’s infrastructure and specific load requirements, the payback period after installation is typically. under five years.
Buyers beware For manufacturers to reap the benefits of voltage optimisation
however, they need to be careful to install the right type of system and ensure that electrical equipment never receives more or less than the required minimum voltage for correct operation – important during power dips and surges. Installing a true voltage optimisation system will ensure that equipment operates as efficiently as possible at all times. With that in mind, manufacturers need to beware of suppliers that misleadingly promote their products as voltage optimisation solutions, particularly those that promise unrealistic price and payback periods. Powerstar’s own voltage optimisation offering is widely proven. It has been successfully implemented across a range of manufacturing sites including Northern Foods, which operates around 20 sites across the UK and Ireland, and which has a continuous commitment across all sites to identify effective ways of realising savings. The installation at the company’s Gunstones Bakery has achieved savings of 9.84%, or an average direct energy saving of 33.5kW per hour, which equates to an impressive £21,953 per year. Powerstar has also been installed by AESSEAL, a specialist in the design and manufacture of mechanical seals. The company turned to EMSc (UK) to deliver a turnkey, projectled solution. Following a site survey Powerstar was installed at AESSEAL’s Bradmarsh Business Park operation, where an immediate energy saving of just under 8% and resultant reduction in electricity costs were achieved. AESSEAL benefitted from an increase in equipment life and reduced maintenance costs. Ultimately, for manufacturers committed to improving their sustainability levels while reducing costs, tailored voltage optimisation systems like Powerstar provide an effective, low cost and proven tool to lower electricity bills without negatively affecting operations. @themanufacturer
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The challenge is both very straightforward and highly complex. Drilling a small diameter hole into a rod of metal is the easy bit (no pun intended). When that hole has to be eight metres deep, and cannot deviate from the centre line, it becomes an engineering puzzle locked in a conundrum wrapped in an enigma, says Will Stirling.
A physical enigma As if the engineering challenge of boring an eight metre, narrow hole in a single ‘green button’ operation were not enough, Stuart Dawson explains the added complications brought into the fray by the materials being used.
A fiendishly Nuclear AMRC takes on three year research project to perfect very deep hole drilling
“To compound our problem we’re doing this in 304 stainless steel, a high ductility material,” he says. “The steel parts go inside the nuclear reactor and can suffer from a problem called ‘neutron embrittlement’.” This is when neutrons hit and dislocate the material’s atomic structure, displacing and straining so that it becomes gradually more brittle over time. To counteract this, machining technologists use the most ductile material they can find, but this directly opposes the properties best suited for machining. “To avoid clogging and drills that explode, we need to get small discontinuous chips, but getting these small chips is very difficult in a ductile material – it wants to make long ribbons,” Dawson explains. With no option to change the material Dawson says research is investigating “all means of geometry optimisation, parameter optimisation and whatever it takes to perfect the process.” Hopes of achieving this are kept burning by the truly unique equipment at the Nuclear AMRC’s disposal. “To the best of my knowledge it’s the only machine of this type at any research institution in the world,” asserts Mark Ramsay, managing director of TBT UK. Because the drill is so long it can suffer from torsional and lateral vibrations but the TBT uses four vibration tube dampers to counter this. All the machine’s work piece steadies and vibration dampers are CNC-controlled; unusual for a deep hole boring machine. “We’ve got the world’s first electronically-activated drill tube dampers as well, patent pending from Sandvik,” says Dawson. “Because they’re electrically-controlled it allows us to integrate them with the machine, so they can travel, activate and deactivate via the CNC control. The challenge is to stabilise the bit within the drill tube while it’s turning because it’s so thin it can whip.”
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ou will find some seriously big kit at the Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC). Entering the vast main bay is a house-sized Starrag Heckert 16000 horizontal milling machine. This is just the practice one, says the Nuclear AMRC’s Tim Chapman. The ‘real’ one, a Starrag 18000, due for delivery soon, will sit on special reinforced area to support its 70-tonne bulk.
Dotted around the 5,000m2 factory there are robotic cells, a huge groove welding rig, a 50-tonne gantry crane, and a Mori Seiki mill turn that can accept eight metre parts. Everything here is big. But the show-stealer is the 27-metre TBT ML700 deep hole drilling machine custom-made for the Nuclear AMRC by TBT Tiefbohrtechnik GmbH, and supplied by TBT UK. Why a 27-metre machine? The challenge, says Mr
Manufacturing Technologies
The Channel Tunnel problem Could the holes be counterdrilled from opposing ends? “It’s undesirable for numerous reasons,” says Dawson. “You can’t do it in one set up – the physical turning around and realignment is cumbersome. But the major problem is to get two drilled holes to meet head-on; it’s a bit like the Channel Tunnel. Guiding these thin drills to meet head-on is so challenging, so drill steering is another discipline to perfect. We’re looking at a non-contact ultrasonic probe that continually measures the wall thickness. But we’re right at ground zero.”
Chapman, is to “take a nine metre drill bit and make an eight metre hole with the same diameter of a tube of Smarties in one operation. It’s designed to make several long, high value parts in a nuclear reactor system that need long thin holes in the middle.” The parts’ identity must remain confidential. Holes required in these nuclear reactor parts need to have a length to diameter (L/D) ratio of about 500/1. “The machine can drill up to eight metres long and can drill holes from 10mm to 110mm from solid, and up to 220mm by counter boring,” says Stuart Dawson, head of the machining group at the Nuclear AMRC. “The research project is to drill holes 500x diameter. The best industry benchmark to date is 300x diameter.” The jump to 500x represents a massive step up, because the end game is to achieve this as a single, ‘green button’ operation. “Most extremely deep drilling is trial and error; you drill a bit, remove it, check and go again,” says Chapman. “It’s a slow process, with high scrap rates, a lot of operator intervention. We need to perfect a single green button process in about an hour, transforming the speed these parts can be made.” The deep boring research project will take a minimum of three
Andrew Wright of Newburgh Engineering and Stuart Dawson of the Nuclear AMRC
To avoid clogging and drills that explode, we need to get small discontinuous chips, but getting these small chips is very difficult in a ductile material – it wants to make long ribbons Stuart Dawson, Head of Machining Group, Nuclear AMRC
People, and applications The Nuclear AMRC is a membership organisation. As part of local company Newburgh Engineering’s membership agreement, one of its employees, production engineer Andrew Wright, now works full-time at the Centre. Andrew is leading the project to optimise Newburgh’s current production processes. “In a traditional production environment, engineers don’t have time to do detailed tests – you can’t optimise or do benchmarking,” says Mr Wright. “At the Nuclear AMRC we’ve got time to do the analysis and get the best processes together and collect some proper data.” Newburgh has some comparable machining centres of its own, but using them in research would mean they were not being used commercially. “We can do this off-site and not cost Newburgh any production time.” The government, who funded most of this facility, is looking for cross-sector applicability. The Nuclear AMRC’s other vast equipment can machine parts destined for oil and gas and offshore renewables, where the new generation offshore 7MW turbines will need huge gears. Are you Fit for Nuclear? The Nuclear AMRC runs an assessment programme for engineering companies interested in supplying parts for the nuclear industry. For more information visit: www.namrc.co.uk/work-with-us/f4n
years. As well as the in-house engineering team, the research is being carried out by Nikki Hilton, a postgraduate mechanical engineer from the University of Sheffield who is doing a four-year engineering doctorate at the Nuclear AMRC and the university’s Industrial Doctoral Centre in Machining Science. Miss Hilton’s work is partsponsored by Rolls-Royce. @WRStirling
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Neatly cut thermapply shapes ready for application in one of thousands of school plaground across Euroupe that now use the material
“Genius begins great works,
labour alone finishes them” These words from the French moralist Joseph Joubert might be Jonathan Hamp’s motto for business – evidenced by the efforts he has thrown into taking his start up company from concept to success in a few short years. But in today’s manufacturing environment labour doesn’t have to mean human endeavour. Picking the right technology to take up this work is a critical choice.
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his is the success story of a start-up company, of an entrepreneur with a great idea, the capability to identify market demand and the smartness to understand how technology can support his vision. In November 2007, back from seven years as an expatriate in Dubai, Jonathan Hamp, then a graphic designer started his own business based on the idea that signage could be better. Signs exist everywhere and are often of massive importance. They indicate where we are, where to go, whether we are in danger. They can also educate and inspire. But traditional wall mounted signs, or those on posts, are difficult to maintain. They deteriorate in bad weather and are often seen as eyesores. In addition, metal signs are often
The challenge: To efficiently cut flexible designs in rigid and abrasive materials (3 different polymers plus plasticiser and built-in anti-slip beat) To drastically increase manufacturing productivity without compromising stringent quality standards. To improve efficiency and flexibility The benefit: Increased productivity, material savings, precision cutting, simplified processes The solution: GERBERcutter DCS1505 plus CutWorks software to communicate with other design software and files.
Case study Thermapply Ltd, UK
subject to theft as the value of scrap rises. For Hamp these challenges represented an opportunity. He had a product concept which could provide clear, vibrant, flexible and extremely durable signage which could be applied directly to a huge range of surfaces. It used thermoplastic technology and quickly gained substance the trademarked product, Thermapply.
Think Thermapply Playing to the strengths of his materials, which can be produced in a wide range of vibrant colours and laid out to any design, Hamp targeted school playgrounds for the launch of Thermapply and made a market hit. Now, after years of experience with various applications Thermapply has extended its reach and is used for all types of signage and surface branding in almost any industry. To maximising its market coverage Thermapply has built a network of accredited resellers and installation partners. These include a number of blue chip companies and local authorities in the UK. In addition sales have been boosted and the product made more accessible by the “In A Box” marketing concept. This gives customers a set range of logos, marketing signs and welcome or warning signs. The concept has boosted sales, making it easier for customers to select design concepts and streamlining the order and delivery process.
Up and coming Back in 2007 Thermapply started “without a penny in the pocket” remembers managing director Jonathan Hamp. Since then though, the family run company with just 13 employees, has gone from strength. At the close of its first full year Thermapply reported revenues of £170,000 2011 was closed with the £700.000 revenue Thermapply playground and school brandings have been installed in over 1,000 junior and primary schools throughout the UK and Europe.
The spirits they called By the beginning of 2011, however the young company found itself almost overwhelmed with orders and the workload caused by the time consuming installation and site survey services it continues to provide. Processes obviously needed to be streamlined and the automation of the Thermapply cutting process became and Holy Grail of improvement activities. But this turned out to be far from straight forward, as Hamp explains: “We looked into and carefully evaluated five machines from different brands and thought we would never find the right cutter as the material we use is quite abrasive.” Other properties of the Thermapply material made choosing the right cutting tool difficult too. The cutting process could not cause the material to become too hot, since Thermapply turns to a chewing-gum like texture when heated. Furthermore, says Hamp, “moisture is our biggest enemy - therefore water-jet based cutting would not be an option for the process”. Before long however, Thermapply’s problems were answered. “We got in touch with Gerber Technology in Manchester,” recalls Hamp before recounting his delight with the first cutting tests Gerber returned. “We could see Gerber had the solution we needed,” comments Hamp. Crucially, the Gerber DCS 1505 was robust enough to deal with the abrasive Thermapply material.
Thermapply’s investment in the cutting machine from Gerber Technologies has allowed it to meet growing demand and control costs
“With its carbide blade Gerber Technology not only provided the right machine but also the right tool – in combination the only solution to cut our demanding materials,” sums up Hamp. In August 2011 the DCS 1505 static single ply cutter was installed at the young entrepreneur’s manufacturing facility and CutWorks software to develop markers was implemented. The investment marked a transformation for Thermapply’s capabilities as a commercial enterprise. Where, for example, manual cutting of 116 numbers
for use in a playground game took one person a complete workday to be stamped out, today the same job is done within 4.5 minutes. Besides the cost savings for more than seven man hours per day the Gerber cutting machine has taken away the burden of physically demanding work from the operator and enabled Thermapply to respond far quicker to demand. In addition, “We now achieve much better yields” says Hamp. “This is due to the excellent accuracy we achieve for the cut pieces with the DCS 1505.” @themanufacturer
Have your say at www.themanufacturer.com
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Supported by:
Sponsored by:
The Lean Management Journal’s A N N U A L C O N F E R E N C E 2 0 12 M a y 2 9 t h - 31 s t , 2 0 12 T h e H i l t o n M e t r o p o l e , B i r m i n g h a m N E C
Lean Management Journal invites you to its annual conference featuring high impact keynotes from North America, South Africa, Europe and UK; facilitated interactive workshops; 12 case studies; peer-to-peer networking; and LMJ inspiration for your continuous improvement lean journey. Over 15 lean experts and business leaders. All in 1 place – learn from the best.
The third edition of LMJ’s annual flagship event will capture the thoughts, ideas and best practice from a year of thought leadership provided by the journal.
Post-Conference Seminar Spotlight
Delegates can select from a series of practical, interactive half day, full day and two day post-conference seminars.
Lean Safety Seminar Delivered by: Bob Hafey, International Author, Lean Safety Length: Full Day Classroom 30th May, Optional Assessment Tour 31st May venue GKN
30th May – Seminar: 09:00 - 16:30 Here’s a different path to lean success – a safe path! By using some of the common tools in a lean thinker’s tool box and focusing on safety instead of cycle time, you can easily build an understanding of lean, while improving plant safety. Safety compliance is the focal point of most Health and Safety programmes. Reacting to injuries and near misses is the norm. To be one step ahead of the rest, an opportunity exists to proactively engage the workforce in a meaningful safety improvement program. During the seminar attendees will participate in group exercises that will help improve the safety programme in their facilities. Exercises will include: • Process mapping an incident/accident investigation process that gives focus to root cause analysis and corrective actions
• Creating an employee safety engagement survey
• Process mapping other safety processes such as forklift training, evacuation plan, lockout/tagout training, safety walk, emergency response plan, etc.
• Creating safety improvement and safety observation forms that can engage all employees in a business
• Writing a safety cultural vision statement
• Developing an outline for a safety improvement program
• Developing a list of leader safety standard work
31st May: Day Two Lean Safety Benchmarking Visit: GKN 09:00 to 14:00 On day two of the post conference seminar Bob Hafey will then lead a Gemba lean safety assessment visit using the teaching from the previous day. Delegates will be asked to assess then discuss the site’s current level of lean safety and compare findings with those of the other teams.
To register call: +44 (0)207 401 6033 or visit www.leanmj.com/annualconference
Manufacturing Technologies
Discovering
innovation
GlaxoSmithKline was the only UK company ranked in the top 10 for investment in R&D according to a survey by management-consulting firm Booz & Co.
The scope for innovation in the manufacturing sector is endless. So why aren’t companies thinking outside the box as much as they should asks Mark Wareing, director of R&D consultancy firm?
edge over competitors both at home and abroad. Innovation in manufacturing capability often builds on new-found technology but this creativity should always be driven by business need, such as improving efficiency margins and product differentiation, rather than change for the sake of it.
reating valuable new products and processes within your organisation both time and money, two things that have been in short supply in the current economic climate. Not to mention vision, ambition and risk-taking. But it is more important now than ever before to inspire your team to make those groundbreaking advances. Technical discoveries will drive effective growth in your business and stimulate the economy. It makes sense to innovate through a focused process to gain that invaluable commercial
So where do you start? Consider what areas of your business would most benefit from a fresh approach Evaluate the different areas of your operation where manufacturing innovation could be implemented Innovate in those areas which drive the performance of your business
C
What is innovation? Innovation means different things to different people, but in the manufacturing sector it is usually: New product development The introduction of innovative manufacturing processes and practices, and new technologies and equipment
Utilisation of new and novel materials Green technologies which cut down on waste, reduce energy costs and use consumables more efficiently. The benefits can include: Greater responsiveness to customer demands and access to new markets and customers Faster turnaround times Reduced waste levels and downtime Improved product design and quality Greater potential for a wider product range Streamlined relationships with suppliers and customers You can introduce successful innovation either gradually or in one hit – timescales will be influenced by a range of factors including: The specific changes you want to introduce The availability of resources to complete them speedily Whether you might need to stagger disruptions to your production capacity while the transition is being made
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Manufacturing Technologies
To thrive in the commercial world, businesses need to constantly innovate to stay one step ahead of competition. This isn’t a one hit wonder single company event, it involves ongoing activities to move forward products, services and processes in the light of market and technology developments. This is only made possible by developing specific strategies, teams and performance measures to encourage innovation. In a nutshell it depends on the readiness of manufacturers to take risks and drive through changes. Global manufacturing is a key provider of economic growth and employment, accounting for US$10tn of value added worldwide, making the impetus for innovation more important than ever. The UK is the ninth largest manufacturer in the world and has an industry worth £140bn, representing 11% of GDP and around 50% of exports.
Collaborative research and development Pera Technology has a compelling track record of working with the manufacturing sector, to encourage innovation through collaborative research and development. We also secure that all important grant funding to bring ideas to life. We support ambitious companies pioneering new generation technologies, and those taking technological risks for a wide range of technical and engineering applications and market sectors. Completely commercially focused, unlike university research departments, we offer a full spectrum of fully integrated R&D services, successfully working with thousands of businesses ranging from small engineering companies to large multi national corporations, helping each solve their specific problems. Often these breakthroughs are centred around saving time or costs during the manufacturing
Breakfast events with funders
We secure that all important grant funding to bring ideas to life
Pera Technology has joined forces with a number of highstreet banks and equity providers in a joint initiative aimed at manufacturing and technology based SMEs which are looking to overcome the challenge of expanding their companies in the current economic climate. It is designed to give a helping hand to those businesses looking to develop new products and markets, and those looking to make incremental changes to SMEs in the manufacturing and technology sectors looking to overcome the challenge of expanding in what is still a challenging business environment. Under the plans, registered SMEs get the chance to have their ideas assessed by the best in the business and receive advice on which funding routes would best suit their expansion plans, be it grant, debt or equity. They also explore how to unlock such funding. To take part, contact Martin Avison on 07818 515206 and register your details for a free telephone consultation with a Pera Technology representative to run through your growth objectives. If your business is suitable, we will give you access to a carefully selected network of experts, and you will be invited to attend one of the series of regional breakfast meetings being held across the UK in the coming weeks. Immediately after these bank hosted events, you will have the opportunity to attend a one-to-one session to explore your specific funding and technology needs. So, for those ambitious businesses seeking to boost their bottom line through innovation, there couldn’t be a better time to talk to Pera Technology.
process, or introducing step changes in product performance or introducing technology to deliver completely new products. Examples of our R&D expertise and the effective benefits achieved by our clients from the outputs created, include reducing polymer processing heating time from an average six minutes, down to just 19 seconds. We were also involved in developing production microwaves which reduce drying time for freshly sawn timber by over 70%.
Substantial savings We supported Surface Generation, an SME now producing big savings in tooling production time, while substantially reducing carcinogenic cutting fluids and waste materials. The company had
an idea to make the whole tooling process safer, more cost-effective and much less wasteful. Our team helped give them the opportunity to develop their innovation by securing €640,000 of funding to pay for this project through the European Commission’s Framework Programme. Over two years, the Pera Technology team redefined the tooling interface used to make moulds. As a result Surface Generation has now broken into the aerospace composite tooling market, which is worth approximately €1bn. As well as marketing the technology in both Europe and the US, the hardware has been bought by a large US company to develop a new infantry helmet for the armed forces.
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Racing car manufacturer Lola uses energy-efficient high-performance computing clusters from OCF
Green
machine
Making the corporate IT landscape more environmentally friendly is simpler than you might think, reports Malcolm Wheatley.
A
data centre powered entirely by vegetable off-cuts. A desktop computer that draws less power than a low-wattage light bulb. A high-powered computing cluster that breaks new records in energy efficiency, eliminating costly air-conditioning units. Server farms cooled almost exclusively by ambient air from outside. Science fiction? Most definitely not. From data centres powered by waste biomass to low-power
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Incredibly, data centres consume something like 2% of the world’s entire electricity supply
computers drawing just seven watts, each is a readily observable example of hard, solid, IT fact – thanks to innovative technologies and recent advances in the art of the possible. Some would say, not before time. For whichever way you look it, corporate IT isn’t green. Incredibly, data centres consume something like 2% of the world’s entire electricity supply, with networks and desktop computers adding to the load. To take just one example, Google – notoriously secretive about such things – is estimated to use 0.01% of the world’s entire electricity consumption, with some 900,000 servers drawing some 220 megawatts of power. Indeed, points out Kari Baden, managing director of advanced infrastructure at IT services provider Dimension Data, it is estimated that the amount of electricity consumed by data centres worldwide grew by 56% between 2005 and 2010, and that data centres use in the region of 2.2% 3.3% of Britain’s total available grid power. “According to Gartner, 12% of all data centre expenditure is currently consumed by energy related costs,” he says. “Energy costs are increasing by 16% every year according to McKinsey and are expected to be the fastest rising costs for data centres as companies begin
IT in
manufacturing
to expand the IT infrastructure and support business growth.” And for environmentalists, green IT isn’t just about power consumption. Short technology lifecycles don’t help, either, with end-of-life hardware disposal raising troubling issues of landfill and poor recycling as managements continually upgrade equipment to take advantage of new capabilities. Wasteful use of paper, toner cartridges and other consumables don’t help the green cause, either.
can be cut dramatically, says Roger Keenan, managing director of co-location data centre operator City Lifeline. “Ten years ago, manufacturers of cooling equipment designed it for low capital cost, because that’s what the market wanted,” he says. “Now, they’re designing for energy efficiency: variable speed drive fans, new efficient hi-tech refrigerants, and ‘free air’ cooling. Better still, even though they’re no longer designing for price, the cost has gone down anyway.” And cooling equipment manufacturer Hitachi has gone one step further: a ‘Natural Circulation Cooling’ system dispenses with the need for refrigerant pumps, and harnesses waste heat from servers instead resulting in energy savings of up to 50%. “The heat from the server vaporizes the refrigerant, causing it to rise. When cooled, it condenses and falls. Utilising these rising and falling streams, the system is able to circulate the refrigerant without an externally powered driving force,” says Ian Blond, head of Hitachi Europe Data Centre Solutions. “It can be fitted to new and
Refurbish, not replace So what can manufacturers do to make their IT operations greener? What tools, techniques and technologies will reduce their environmental footprint? Talk to experts, and it’s clear that opportunities to improve a business’s environmental impact aren’t difficult to find. Better still, the impact on the bottom line is generally positive. How so? Because green-friendly practices such as using less power, upgrading equipment rather than ripping it out and replacing it, and using less paper and fewer consumables handily cut costs as well as boost a business’s environmental credentials. That said, it’s difficult to be too prescriptive about the potential for going green, says Tony Rooke, head of the sustainability services practice at IT services firm Logica. “A lot depends on how computing-intensive a business is,” he notes. “Steel manufacture, for instance, might be lot less computing-intensive than, say, aerospace. Paper and printing usage, too, varies from business to business, and industry to industry.” Nevertheless, a handful of core approaches to green can go a long way. Instead of sending old equipment to landfill, for instance, recondition it, or repurpose it. Use an old server to support office desktops for example. And simply selecting ‘economy mode’ when printing documents can literally pay dividends. Logica itself, adds Rooke, reckons to have saved over a hundred thousand pounds through such means.
Data centres Inevitably, though, the biggest contribution to a greener environment – not to mention lower costs – will come from reduced electricity consumption. At a stroke, reduced power loads translate into fewer greenhouse gases, and less depletion of resources such as coal, gas and oil. In the UK about two thirds of our electricity is generated by burning coal and gas in power stations, which every year releases millions of tonnes of carbon dioxide. Where to start? As data centres consume significant amounts of power, it’s logical to start there. Data centre cooling is a major drain on power. But with a little thought, cooling costs
You’re running Windows XP or Windows 7, with your favourite applications, and the look and feel is identical— but you’re consuming just a small fraction of power previously required David Angwin, European Director of Marketing, Wyse
Data centres use 2.2% 3.3% of Britain’s total available grid power—and 12% of all data centre expenditure is consumed by energy related costs Kari Baden, Managing Director of Advanced Infrastructure, Dimension Data
existing data centres and servers – whether rear door, rack type, or hanging units – and also saves money by reducing maintenance costs.” But getting rid of waste heat more efficiently isn’t the only way to reduce the power consumed by cooling. For cooling, of course, is proportionate to the number of servers in operation in a data centre – and how energy-efficient those servers are. But typically, many data centres contain multiple servers, each one used for just a fraction of its capacity. Hence a move to cut cooling costs by reducing the number of servers in operation. And, as with cooling itself, there’s more than one way to skin the cat. ‘Server consolidation’ supports the green agenda by merging together server workloads onto fewer physical servers, each more highly loaded. ‘Server virtualisation’, meanwhile, converts multiple real-life physical servers into ‘virtual’ servers, running on one fully-utilised large server.
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IT in
manufacturing
Better still, just as cooling equipment has been redesigned to take account of the newly-prominent green agenda, software too can be re-written to use less power, says Miguel Ferreira, a researcher at the Amsterdam-based Software Energy Footprint Laboratory. “Simpler, unsigned low-precision variables, more use of caches, fewer open XML interfaces – such tactics can do a lot to cut power consumption,” he says. Finally, when data centre power consumption has been cut to an irreducible minimum, consider the potential for acquiring that power from greener sources. A number of niche suppliers – as well as the ‘Big Six’ majors – offer electricity for business users, explicitly derived from renewable sources: hydro-electric, wind farms, and solar, for instance. Better still, for cloud users, there’s the prospect of a data centre exclusively powered by biogas. Infinity Martlesham, in Suffolk, reckons to be the UK’s first truly carbon free data centre, says its chief marketing officer Nigel Stevens. In the heart of the UK’s sugar beet and arable crop region, the data centre is powered entirely by electricity derived from burning methane generated by processing vegetable off-cuts and waste.
Broader IT environment But low-energy data centres, hardware recycling, and reduced paper and toner usage aren’t the only ways for a manufacturing business to go green. While data centres consume a big chunk of the overall electricity used for computing purposes, desktop computers and high-performance computing clusters – for the increasing number of manufacturers that use them – also contribute. In the case of high-performance computing clusters, manufacturers have to be realistic, warns Julian Fielden, managing director of OCF, a specialist high-performance computing system integrator which numbers computing-intensive manufacturers such as Caterpillar, Tata Automotive, AstraZeneca, Lola Cars, and GlaxoSmithKline among its customers. “It’s difficult to describe high-performance computing as ‘green’,” he notes. “It’s all about becoming greener – and that is possible.” As an example, he points to a recently-built server and storage cluster at the University of Durham, which delivers a peak performance of 25 teraflops that uses 60KW less than its predecessor, despite running seven times faster. As a result, the university has been able to remove three air-conditioning units from the facility housing the cluster. The humble desktop computer, too, offers an opportunity to significantly reduce power consumption, thanks in large part to a technology called desktop virtualisation – similar to server virtualisation, but this time it is the business’s desktops that are being virtualised.
21st November 2012 Grange Tower Bridge Hotel, London
Call for Papers invites academics and manufacturers to present examples of best practice and research & development in all areas relating to the improvement of the UK’s manufacturing competiveness at this year’s Manufacturer Directors’ Conference. Topics to be covered include product development, export strategies, supply chain and logistics, innovation, design, leadership, skills, finance and legislation. Those interested in presenting should send a 150 word abstract to David Rodriguez-Vega by 31st July 2012. For further information and to submit your abstract, please contact David Rodriguez-Vega at: d.rodriguez-vega@sayonemedia.com or on +44 (0)207 202 7483 Corporate sponsor:
EPSRC Centre for Innovation
It’s difficult to describe highperformance computing as ‘green: it’s all about becoming greener—and that is possible Julian Fielden, Managing Director, OCF
The energy savings are significant, says David Angwin, European director of marketing for Wyse, the terminal specialist which has pioneered the technology. By doing the ‘heavy lifting’ of desktop computing on fast, energyefficient servers, and using low-power desktop devices to drive monitor screens and connect to mice and keyboards, a desktop computer drawing a conventional 70-100W can be replaced by one drawing just 3-15W – equivalent to a low-wattage light bulb. “You’re running Windows XP or Windows 7, with your favourite applications, and the look and feel is identical. But you’re consuming just a small fraction of power previously required,” he notes. “Processing is so much more efficient when undertaken on a server, in a virtualised environment.” Roll it all together, and prospects for green IT are looking better than ever, sums up Timo Stelzer, vice-president for Green IT at enterprise software giant SAP. “Green IT initiatives can powerfully reduce not only energy consumption, but also the total cost of IT ownership,” he enthuses. “And the basic recipe for a greener IT infrastructure isn’t complicated. Start with consolidation and decommissioning of legacy systems, virtualise your system landscape to increase utilisation, and use software which is energy efficient.” What could be simpler – or greener? @themanufacturer
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A system to
lean on Microsoft Dynamics AX integration partner, eBECS, has worked with medical device manufacturer Talley Group since 2009 to implement an ERP solution which augments a strongly embedded lean manufacturing culture.
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Background and requirements
Talley Group is a UK based SME designing and manufacturing a large range of medical devices for the global healthcare market from its UK Headquarters near Southampton. It designs and develops a comprehensive range of dynamic pressure area care; sequential compression therapy; negative pressure wound therapy (NPWT) and broad spectrum antimicrobial services along with a range of wipe clean pillows and duvets for the medical market. The company has expanded to service many European countries, the USA and exports to India, China and South America.
It supplies through direct sales and service operations within the UK, or through international distribution partners. In total Talley Group offers over 50 product types with over 10,000 individual items which it supplies and rents primarily to hospitals, nursing homes and GP surgeries. The operation run by Talley Group is focused on lean manufacturing, and when it first opened discussions with Microsoft Dynamics AX partner, eBECS, in early 2009, it was this that the company was most keen to support. Indeed Talley actively sought out an integrator that would understand its lean requirements and assist in the identification and reduction of waste in business processes. “Microsoft Dynamics AX was the only true lean-enabled ERP solution available on the market,” said John Ramage, IT Manager at Talley Group. In addition, with so much of Talley’s work focused on the rental market, and supplying critical equipment for patient care to boot, the company wanted to ensure that a new IT solution could support not only its own needs, but those of its customers.
Delivering the solution eBECS was able to bring vast experience and understanding of lean manufacturing software to Talley Group. ‘Lean Enterprise for Microsoft Dynamics AX’ was originally developed by eBECS and bought by Microsoft, before the two partners created the Lean Centre of Excellence – now an education and training resource for the Microsoft partner community (www. leancentreofexcellence.com). For Talley Group the familiarity of eBECS with Microsoft Dynamics AX was a major advantage. John Ramage at Talley, says: “We wanted to change our existing ERP system and Microsoft Dynamics AX seemed to fit our functional requirements and the lean principles we were looking for.
Case study ERP
Working with the eBECS team, which intimately understands both our business and Dynamics AX has been invaluable in building a solution that really matches our needs.” The success of the implementation is down to the flexibility of the product, according to Ramage: “We were already running a lean operation throughout the business, but Dynamics AX is designed in such a way that we were able to work with eBECS to adapt it to suit our manufacturing, supply chain and logistics processes.” eBECS also developed a rental module to support Talley’s specific requirements. This bolts on to Dynamics AX and is broad in scope. “Our rental business is very broad,” continues Ramage, “so we needed something that could support it. We are trialling the rental module at the moment. It is important to us because a significant proportion of our revenues come from rental – if we get this right it will be worth the resource effort both in terms of finance and time.”
Outcome Talley Group has, from the outset, planned a first, second and third phase implementation of Microsoft Dynamics AX over three years. It is now in its second phase. The company is using the solution across its entire operation and the impact in all departments has been significant: IT Previous legacy system meant collating data on Excel spreadsheets. AX enabled Talley to bring everything together into one ERP solution delivering a single source of data accessible to all departments Manufacturing AX gives an accurate picture of the manufacturing process updated every 20 minutes Lead times can be improved by identifying and acting on any problems with the supply of materials Peaks and troughs in the process can be smoothed out, providing
efficiency savings in the overall cost of manufacturing products Finance Decisions are made on an informed basis using a single source of data Since using AX the stock inventory has been reduced by 25% Faster time to shipping, increased shipping capacity and a reduction in the size of the despatch team has also reduced costs Operations Thanks to the automating of the system through AX customers can be given accurate information about delivery and invoicing Parts are always stocked on the delivery vans
After 18 months using Microsoft Dynamics AX, and with the invaluable help of eBECS, we can see a distinct reduction in the cost of administration at Talley Group and a noticeable improvement in customer services. The growth and stability of our company is, in effect, being supported by our use of AX John Ramage, Talley Group
Sales More detailed and accurate sales analysis is now delivered Product margin information is more detailed which informs the sales team “After 18 months using Microsoft Dynamics AX, and with the invaluable help of eBECS, we can see a distinct reduction in the cost of administration at Talley Group and a noticeable improvement in customer services. The growth and stability of our company is, in effect, being supported by our use of AX,” concluded John Ramage.
The mould shop at Talley Group’s Southampton manufacturing facility
Graytone Far from a one trick pony, eBECS customers span a broad range of manufacturing sub-sectors. In addition to this case study from Talley Group another success story is eBECS’ implementation journey with Graytone, a specialist paint provider to the aerospace and defence industry. The 48 employee, £12m turnover company decided to implement Microsft Dynamics AX in 2008 and has since seen 20% growth without the need to take on extra staff. A case study and video interview with Graytone’s finance director Tony Swayne are available online at www.ebecs.com giving further detail about the changes that Microsoft Dynamic AX has brought about for Graytone in the speed of decision making and customer service. Other case studies, ranging through niche automotive to food and drink implementations, are also available through the eBECS website.
Have your say at www.themanufacturer.com
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Creo
2.0 The latest on the reinvention of Pro/Engineer If you’ve been following what PTC have been up to in the last two years, you’ll know that Pro/Engineer has undergone a change in direction. For the oldest name in parametric modelling it has been a case of out with the old and in with the new – Creo. takes a look at the second iteration of the rebranded offering and investigates what has been a pretty dramatic shift for PTC.
T
he Creo product is the culmination of a progressive merging of the Pro/Engineer, CoCreate and ProductView (PTC’s lightweight visualisation and Digital Mock Up technology) products into a single set of applications. Its second iteration sees the creation of a variety of new task specific tools split into separate applications, but all built onto a single platform and common user interface.
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Creo Parametric Pro/Engineer is now known as Creo Parametric. There’s been an overhaul of the interface to bring in a ribbon style, but beyond this users will find most of the interaction they’re used to from previous Pro/E versions remains intact. Considering that Pro/E was 20+ years old at the time of the switch, it does make sense to take a gradual approach and things should evolve in the next few releases.
The Creo Options Modeler tool provides a link between the information about the options that are available and the actual design of the product configuration
The addition of sub-divisional modelling has been hailed as one of the smartest things PTC has done in a decade
Alongside this, Creo 1 and 2 bring some impressive new tools to enhance the already powerful functionality that’s been in the system for many years. Firstly, there’s been a complete rework of both the measurement and sectioning tools available across the board. These are more flexible and, frankly, much more useful. One great advance is the combination of sectioning tools with Flex Modelling tools to enable the user to work directly on internal parts while in a sectioned view of the product
FreeStyle - integrated sub division modelling For those engaged in product design, industrial design or in fact, anything involving the creation of complex forms, Freestyle will definitely be of interest. Pro/E and now Creo has had the ISDX module for some time, allowing the creation of surface forms with endless amounts of control and editing potential - hence the systems’ heavy presence in key markets such as consumer electronics and motorcycle design.
IT in
manufacturing
FreeStyle works in a similar manner, but brings the power of sub-divisional surface modelling - as you’ll find in Modo, in Catia’s Imagine & Shape or t-Splines. Sub-divisional modelling enables the creation of curvature continuous geometry in a very direct and freeform manner. Within Creo you create a FreeStyle feature, then add the primitive you want to start with, whether that’s a face, a cylinder, a sphere or a cube. You then have a number of tools, available either from the toolbar or the right click radial menu. Sub D modelling techniques allow you to edit the form by manipulating, not only the vertices of a cage surrounding the geometry, but also the edge and planes in that cage. The implementation in Creo 2.0 is effective with good results in creating curvature continuous surfaces that can be taken into production and used with more standard design and engineering features to flesh out a product.
Freestyle allows sub-divisional modelling which enables the creation of curvature continuous geometry in a very direct and freeform manner
Direct editing & Creo Direct CoCreate users should know that the current product is being maintained and developed under the name Creo Element Direct. Alongside this, there are two technologies being built into the new generation Creo products. Firstly, Creo Direct. This is being developed as a standalone direct modelling tool and adopts the same user experience as Creo Parametric, but is geared towards making direct edits to geometry – both imported and native. Creo 2.0 will give users a good idea of where things are heading. Edits can be made across assemblies, allowing faces in multiple parts to be moved into position. There are new snapping tools that will make edits more precise. In general, the new release looks and feels much more responsive
Manufacturing customisation options are much wider than ever before and this is the challenge that Windchill’s Options and Variants module looks to solve
and should make the system much more usable.
Flex Modelling As well as Creo Elements Pro and Creo Direct, there’s also a cluster of tools that have been creeping into Creo for the last few releases under the name Flex Modelling. The aim here is to provide the ability to work in a direct manner (dragging and dropping geometry, editing features and patterns) without having to worry about history but with the parametric user interface remaining constant. These tools are aimed at making both speedy edits to complex Creo data or dumb imported geometry from another system and on the whole the tools work well on both.
Creo Options Modeler When PTC launched the Creo product set, alongside the core changes in Pro/Engineer and CoCreate, it also introduced the idea of AnyBOM Modelling. While this isn’t a product per se, it has started to be delivered with the Creo Options Modeler [SIC]. Built into Creo Parametric this connects to the Windchill Options and Variants module. Manufacturing customisation options are much wider than ever before and this is the challenge that Windchill’s Options and Variants module looks to solve. Each product range can be captured in terms of the various options available, the rules that define which
components and sub systems can be used with each and which cannot, and the rules that drive that configurability. The problem is that this tool provides no link to the actual design of the product configuration - other than guidelines by which it can be built. And this is where the Options Modeler comes into play. Creo Options Modeler connects the configuration of the product to the resultant 3D model.
Wrapping up Creo is an evolution of existing Pro/Engineer, CoCreate and ProductView products into a single product set. The Creo 2.0 release shows that PTCs promise for the functionality of its new applications approach is being delivered and work is being done to further develop direct modelling tools, both for the core parametric environment with Flex Modelling and FreeStyle, but also for the Creo Direct standalone application. For Pro/Engineer adherent most things look and feel the same in Creo, albeit with a ribbon interface. The core workflow remains the same and the commands and operations are very neatly and sensibly organised into separate tabs. The addition of sub-divisional modelling has been hailed as one of the smartest things PTC has done in a decade. Complex shape definition is a major challenge for many users.
Review supplied courtesy of Albert Bishop
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“The move wasn’t about ROI, and we didn’t spend long surveying the ERP marketplace,” says Tozer. “The decision to move to Dynamics AX was a strategic one, not an operational one, and had an operational impetus based around improved productivity, not cost savings. Dynamics AX 2012 was the right system for the business, and the time to switch was now.”
Future-proofing
Grand
designs
For South Wales-based office furniture manufacturer Orangebox, Dynamics AX implementation experts Columbus are helping to build an ERP system with a difference, discovers Malcolm Wheatley.
I
f all goes well, this September should see innovative office furniture manufacturer Orangebox go live with a new ERP system – Microsoft Dynamics AX 2012. In itself, the decision wasn’t a surprising one, concedes Orangebox commercial director Ewan Tozer. As the latest version of a popular and feature-rich ERP system from a world-class developer, Dynamics AX 2012 and its predecessors have been the system of choice for a wide range of manufacturers.
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But take a closer look, and several unusual aspects of the implementation quickly emerge. Known in the marketplace for its tag-line ‘Smarter Working’, and for the award-winning collaborative working spaces that epitomise Orangebox office furniture, it seems that Orangebox has taken the ‘Smarter Working’ message to heart in more ways than one. The result is an ERP selection and implementation process that turns out to be as distinctive as the Hengoed, South Wales-based business’s own innovative product line.
In fact, he relates, the business had made the decision to move from its existing legacy system – the venerable Fourth Shift package, originally dating from the 1980s – two or three years ago. But back then, in the depths of the worst recession in sixty years, the time simply wasn’t right, says Tozer. “We’ve used Fourth Shift for 14 years, and it does everything that we want,” he explains. “But it’s a legacy system with a shrinking customer base, and an unclear development path and future. As we’ve grown, and become more global, Fourth Shift is less appropriate for the business that we’ve become.” In contrast, he relates, Dynamics AX 2012 did have a very clear development path and future. What’s more, it appeared to be one with very clear budget against it, and a fast-growing user base that endorsed those ambitions. “We went to look at the system in action as more of a proofpoint, really,” sums up Tozer. “On paper it looked the right choice. And when we saw it, we realised that it was the right choice. At which point, we didn’t look any further: the more we looked at AX, the more we saw a good fit, coupled to an acquisition cost that seemed to be very reasonable value-for-money.” That said, finding an implementation partner was less straightforward. And the eventual choice – manufacturing specialist Columbus – owed not a little to Orangebox’s insistence on continuing to use a third-party
Casestudy Grand designs
product configurator package, Eden, in which it had invested significant intellectual property. “Our product range is very complex – far more complex than most people realise,” says Tozer. “We have 3,000 standard fabrics, so any combination of two fabrics is 9 million options, and any combination of three fabrics is 27 billion options.” And not only did Eden deal with that complexity, he relates, but the business had built-up twelve years of knowledge-based rules within the package. What’s more, Orangebox wanted to replace its existing barcoding system, with its bespoke scripts, and move the functionality to Dynamics AX. The goal? Smoother, faster transactions, freeing people to add value, not just process data. “We want people to be able make better decisions, and be better informed,” says Tozer. “We see Dynamics AX as a decision-making tool as well as a transaction engine. By making better decisions, and working more productively, is where the financial return will come from. It’s not about cutting jobs, it’s about growing the business faster, and with less pain.”
Two-way integration And Columbus, he recalls, fully bought into that vision – despite the inherent challenges. “We started by talking to half a dozen potential implementation partners – but only a couple of them really got their heads around our brief, and what we wanted to do,” he says. “Implementation has been slower than it might have been, but the result is that we’re going to get everything that we wanted, with little or no compromise.” Employees accustomed to working in Eden, for instance, will continue to work in Eden, thanks to seamless XML-based two-way integration with Dynamics AX. “If people are working in Eden, they’ll only ever see Eden, and Eden will be the only IT experience that they have,”
It’s been a strategic move: by design, we’ve gone for a solution that’s likely to be around for a long time Ewan Tozer, Commercial Director, Orangebox
We’re going to get everything that we wanted, with little or no compromise Ewan Tozer, Commercial Director, Orangebox explains Tozer. Behind the scenes, though, Eden-derived product design and configuration decisions will be translated into XML, and then output to Dynamics AX. Bills of material, inventory levels, purchase requirements, goods inwards transactions and production schedules – all of these and more will operate seamlessly in Dynamics AX, driven by top-level sales orders generated in Eden. “Outside the sales function, people will interact with Dynamics AX, just as they did with Fourth Shift,” says Tozer. “In finance, and purchasing, and in the stores, and on the factory floor: what people will see, and
what people will work with, is Dynamics AX.” And just as Orangebox remained with Fourth Shift for many years, he notes, the plan from the outset has been to build an equally enduring relationship with the new system. “It’s been a strategic move: by design, we’ve gone for a solution that’s likely to be around for a long time. We didn’t want a solution from another small company that might be acquired and sidelined, we wanted a solution that had the impetus to survive.” And this September, he concludes, the business will go live with a system that looks set to do just that.
Have your say at www.themanufacturer.com
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ITnews...
Software and servitisation
Mike Evans, research director at industry analyst firm Cambashi relates a Silicon Valley case study and the lessons manufacturers should take in order to gain value add from software.
Trimble is a classic Silicon Valley technology story. In 1978, Charlie Trimble and two other engineers left HP to found a company which develops positioning and navigation products capable of exploiting opportunities created by GPS technology. Today, Trimble’s portfolio is much broader than GPS applications but it is still thought of as a company for commercial uses of GPS in Agriculture, Construction, Mapping and Surveying. At the turn of the century, Steve Berglund became CEO and began a series of acquisitions. These added positioning solutions using other optical devices. More recently the acquisitions of software companies Tekla and Plancal have added software solutions. Both of these companies develop software used in the design of the built environment. They use Building Information Modelling (BIM) to allow construction trades to pass information from design to build. Trimble has realised that the value added by a positioning instrument is greatly enhanced when it is combined with a solution to apply these technologies to business processes involving positioning.
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In the construction industry, ensuring that as-built structures and their infrastructures conform to design is a major problem. Detailed decisions on-site are made by a mobile workforce and there are always unforeseen problems and mistakes. Many of these are related to positioning and Trimble’s portfolio helps minimise the costs of avoiding and resolving these issues. Developments in instrumentation and machinery mean that more and more of their added value is in software, rather than the hardware of sensors and actuators. Generic computing components replace much of their speciality electronics and control mechanisms. Software capability can be relatively easily extended to link to the customer’s other technical and enterprise systems running in its data centre and by doing so, much more value can be added, uniqueness preserved, and manufacturer’s pricing power maintained. Trimble may be an early example of a trend that many other manufacturers of machines and instruments will follow as a key industry trend towards ‘servitisation’ progresses. With a wave of social media altering the online e-commerce landscape new opportunities exist and a host of specialists are now scrambling to help manufacturers set up internet stores.
VIRTUALISATION
Drinks company virtualises servers Family-owned Calypso Drinks, a 175-employee Wrexham-based manufacturer, worked with Icomm Technologies to migrate a 20 PC serverbased network onto virtualised servers, locking in cost savings and improving storage and backup capabilities. Initially, explained Calypso IT manager Kevin Wright, the plan had been simply to upgrade to Network Attached Storage devices, in order to deal with increasing storage requirements and to improve the company’s disaster recovery provision. “The more I thought about it, the more I realised we were planning a good foundation for virtualisation, so it all came together as part of the bigger picture,” he said. Initially, Icomm advised that the most appropriate approach was to implement two NetApp iSCSI FAS2020 SANs that would have data synchronised between them every 20 minutes. The primary storage device would have 3Tb of SAS storage disks, and the secondary one 12Tb of less expensive SATA disks, which could also be used for data archiving purposes. In order to keep project costs down, Wright upgraded three existing physical servers with extra memory and disks, tasking Icomm with creating three virtual machines to run Microsoft’s Exchange email and messaging applications, the SQL Server database and Citrix on the servers, courtesy of VMWare’s VSphere 4 software. “Upgrading the servers brought the costs down,” said Write. “It was obvious that virtualised servers were the way to go: 20 physical servers produce a lot of heat, consume a lot of power and take up a lot of space.
ITNIBS DESIGN
CAD vendor Autodesk announced the release of a new app, ForceEffect Motion, bringing design engineers more closely in line with the problems faced by engineers in the field. Autodesk ForceEffect Motion is now available for iPhone, iPad and iPod touch and is designed for the development and testing of mechanical systems with moving parts. Its release augments Autodesk’s portfolio of mobile simulation apps including Autodesk ForceEffect, designed for calculating forces prevailing on static objects.
IT in
manufacturing
COMPLIANCE
ERP
Boat manufacturer chooses Infor
Data protection survey sounds warning bell
100% business growth over the last four years led to South Boats’ decision to invest in a new ERP application
A survey conducted by data governance software provider Varonis highlights that 70% of organisations storing third party data are not confident that this sensitive data stored within their organisation is protected.
With 80% of organisations surveyed storing sensitive information from customers, clients, vendors and business partners, barely more than half were “fairly confident” that it was protected. Nearly one fifth were “not confident at all”. This suggests a worryingly high proportion of companies are potentially failing to comply with the UK Data Protection Act 1988, as well as the EU Data Directive on Privacy – a breach of which can result in organisations being subject to fines of 2% of global revenue. “It’s worrying that so many companies are still complacent when it comes to data protection,” said David Gibson, director of strategy for Varonis. What constitutes best practice? Of the 60% of businesses who were “very confident” that they knew where their sensitive data was stored; over 40% monitored all actual access activity and assigned ‘owners’ to data; and 65% reviewed and actively revoked access permissions.
South Boats, a manufacturer of crew vessels for the offshore wind power industry, has deployed Infor10 ERP Business, formerly known as SyteLine. The application will deliver greater visibility into job costing, as well as helping the business achieve greater productivity. 100% business growth over the last four years led to South Boats’ decision to invest in a new ERP application, explained the company’s financial director, Ben Stephens. Its previous system was heavily reliant on manual processes, and was unsustainable as the business expanded.
South Boat’s was impressed with the comprehensive MRP and Bill of Materials capabilities within ERP Business – essential as vessels comprise many thousands of different components and most possess unique customer requirements and specifications. “Each vessel produce is worth between £1 million and £3 million, and is often customised to clients’ needs,” explained Stephens. “In order to continue to evolve our product range and support our growth plans, we needed an ERP application which would provide us with more control on our cost drivers, while optimising production and maximising profitability.”
ITNIBS VIRTUAL REALITY
A £2.2 million contract has been awarded to virtual reality specialistVirtalis to provide interactive 3D visualisation systems across two Science and Technology Facilities Council (STFC) sites at Daresbury and the Rutherford Appleton Laboratory. The new systems will be used for a variety of science and engineering applications, including computational fluid dynamics, materials visualisation, plasma, environmental simulations and molecular modelling.
SUPPLY CHAIN
Market research fim ARC Advisory Group named Oracle the leading supplier of supply chain planning solutions in its report, “Supply Chain Planning Worldwide Outlook; Market Analysis and Forecast Through 2016.” ARC said that Oracle has emerged a visionary in the supply chain planning space having leveraged home-grown and acquired offerings to create a comprehensive, modular suite relevant to a wide range of industries.
WAREHOUSE MANAGEMENT
Supply chain software provider and consultancy Reply Group was placed in the ‘Magic Quadrant’ for market leadership by the analyst firm Gartner for its Warehouse Management solution. The system was developed by subsidiary company @logistics Reply and can be delivered ‘on premise’ or through a Software as a Service model. Gartner recognized the established presence of @logistics Reply in the European market and its strong reference from across automotive, food and drink, pharmaceutical, telecommunications and fashion customers.
Have your say at www.themanufacturer.com
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INNOVATIONS IN LEAN THINKING celebrating 10 years of the lerc annual conference 25-26 June, Cardiff Novotel - Keynote Speaker: George Koenigsaecker The Lean Enterprise Research Centre (LERC) has for the past 18 years assisted manufacturers and service organisations to improve their operations, reduce wasteful activities and build in value to their production and supply chains. Renowned for exceptional research, a world class Master’s programme and industry focused training programmes, LERC also runs one of the most respected UK conferences in Lean Thinking. This year it celebrates 10 years of running its annual conference, with George Koenigsaecker as the keynote speaker. George Koenigsaecker, Keynote Speaker George is a Board Member of Simpler Consulting LP, a world leader in lean-focused management consulting, a principal investor in several lean enterprises and a Board Member
of the Shingo Prize. He will be talking about leadership and sustainability. ‘Companies must be willing to go through their value streams many times to receive the most value. Until you have gone through your valuestream processes at least five times, you haven’t really experienced lean’ We look forward to celebrating 10 years of the UK’s most innovative lean conference. Visit www.leanenterprise.org.uk or telephone 029 2064 7028
Lean Enterprise Research Centre
LERC - Manufacturer Advert - April 12 - Con 1-2.indd 1
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18/04/2012 15:21:34
Manufacturinginaction Putting UK manufacturers under the spotlight Supported by:
Factory of the month H ydra u lic p u m p s
Eaton Hydraulics 78 Find out about lean training across business functions; through manufacturing, materials planning and accounts Learn how staff turnover is kept low through a focus on employee benefits, health and safety excellence and an innovative recognition programme Read about supply chain alignment techniques and a collaborative approach to business success Find out about a ÂŁ2m investment in an eight station machining centre and the cost per item reduction this has brought about
Glassware man u fact u rin g
Quinn Glass 86 Find out how the company managed to take 90% of the Irish market for glass bottles and containers before expanding into the UK. The company spent £100m on a brand new facility that is able to manufacture glassware from high silica sand that was readily available near the group’s head quarters in Co. Fermanagh Read about the approach to sustainable manufacturing at Quinn Glass in terms of raw materials used and production methods The company has brought a completely new business model that makes it competitive selling into Europe, even with transport costs
All companies featured will be entered into the MIA Award 2012
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Eaton Hydraulics produces hydraulics solutions for a range of industries, including aerospace
Constantly craving
improvement Roberto Priolo visits Eaton Hydraulics’ Havant plant and discovers it is by engaging with employees and fostering a culture of continuous improvement that the company is achieving great results, with the aim to more than double its turnover within the next five years.
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alking into Eaton Hydraulics’ site in Havant is, in many ways, like opening a manual of good management. The company, which supplies hydraulic solutions – including valves, accumulators and pumps – to industries ranging from energy to aerospace, shows a real commitment to its staff, the taking on of a group of new engineering apprentices being the latest of a number of initiatives aimed at developing the business and its people. The implementation of lean tools is widespread, but there is more to Havant than kanban boards. This becomes immediately clear when you talk to Tyrone White, manufacturing manager, and Wilhelmina Fermore, Supply Chain Manager. Walking the facility, they are obviously proud of their company and the working environment. The aim of Eaton Hydraulics management is, as White puts it, “to sell Havant as a brand of excellence in manufacturing, supply chain and delivery to customers, so that it continues to supply Eaton
Factory of the month Eaton Hydraulics
Eaton Hydraulics at a glance Established
The Havant site was built in 1963, and acquired by Eaton in 1999
Staff numbers and plant information
250 people work in the 28,000 square metres facility
Products
Hydraulic solutions. At Havant, over 4,000 valves are assembled and tested every day. The range of products produced on site includes industrial control valves, proportional valves, manifold block assemblies, mobile valves, and vane and piston pumps
Revenue
£50m
Operations
24 hours, on three shifts.
Point of interest
The company recently purchased a £2m machining centre
with quality people and products, and knowledge.” Taking on engineering apprentices is just a small part of the company’s effort to continuously develop its people. The leadership team based on site is made of the managers of the core functions within the business: its goal is to draw the strategy to foster a culture of continuous improvement and engagement at Havant. A balanced scorecard analysing core functional metrics such as delivery performance, supply performance and sales revenue is reviewed every month (it then feeds into the EMEA system, which in turn feeds into Eaton global), and is used by leadership as a way to assess not only the plant’s performance, but also its own. It is, more than anything, a tool to identify opportunities for improvement. HBDP, Havant Business Development Plan, sets the strategy for the year, in which there are goals for the leadership team. Cost out is a big driver: each function within the leadership team needs to present cost out opportunities for the next year, and a strategy is devised accordingly. White says: “Cost out is a core driving factor, but we also have measures to improve engagement, to get the team more involved in initiatives, and to get better feedback on how we manage internal communication. For us in the leadership team, the goals we set ourselves are the real driving factors, outside the balanced score card, which is pure numbers.” Actively engaging people and looking for opportunities to improve form part of the routine of the business. It is about stretched goals, and about constantly focusing on moving forward.
Fermore comments: “When we look at our team in our function and we present our plan for the development of people, we ask ourselves questions like ‘Who is going to be next our next manufacturing manager?’, ‘Do we have that person identified?’ and ‘What training do we need to provide?’ It is what we call succession planning.” Developing this sort of mentality requires a lot of forward thinking. Eaton Hydraulics is excellent at constantly finding ways to, as Fermore puts it, “raise the bar” by developing people and being agile as a business.
Lean does it Beyond HBDP, several continuous improvement initiatives are run every day in Havant. ELSS, Eaton Lean Six Sigma, provides the company with a range of tools to become more efficient: for example, value stream maps on regular occurrences are created, and those maps generate kaizen events which in turn lead to CI activities. These are managed by all areas of the business, from production to leadership and engineering. Tyrone explains: “We may not realise a particular cost out, but ten other opportunities could arise to help us get where we want to be.” Lean and other improvement initiatives, however, are not limited to manufacturing at the site. A materials planner is taking a six sigma green belt this year, and one of Havant’s accountants just got a black belt. Eaton Business System - which Fermore defines as “the foundation we build on that, together with ethical business practice, is what drives Eaton to be successful” – was launched in 1997, but is still regarded as a refining process, which perfectly matches the company’s continuous improvement ethos. EBS encourages initiatives in areas of the organisation that are not merely related to manufacturing, and the cross-functional nature of the leadership team contributes to achieving results across the business. “Because of this wide representation, initiatives can go across functions and you start realising much more tangible benefits as a business, even though they are not just cash benefits. They may be about about agility, flexibility, or even morale,” says White. Fermore confirms: “There have always been initiatives going on within your own area, but because of the functional aspect of the leadership team we can now make sure that whatever Tyrone’s team may be working on, for example, we in supply chain and materials management can assist with.”
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UM Solutions Provide Cost Savings for Eaton Havant Kyocera Unimerco has been working with the Eaton Havant for the last six years to develop, implement and manage an ongoing cost reduction and process improvement strategy.
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he company’s Unicalc process comparison software, which documents the existing production process and compares this against the proposed solution, has provided Eaton with an accurate step by step overview highlighting the potential savings from bespoke tools and optimised standard tooling. Acting upon this data, Eaton has achieved major savings by employing Kyocera Unimerco’s solid carbide multi feature tooling. This has reduced tool change times
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and eliminated tools from the process by combining as many features as possible onto one tool. How Eaton reaped the dividends from partnership with Unimerco. Tool life and performance are monitored very closely to ensure close adherence to the criteria originally forecast by the Kyocera Unimerco Unicalc Program. Kyocera Unimerco has also deployed a fully integrated tool vending/management solution, providing a comprehensive array of data to track tool usage against productivity. All vending systems are programmed to dispense renewed tools prior to dispensing any new tooling which may be present, therefore the operator will be always be issued with a tool which will perform as well as a new tool, but at a fraction of the cost. Eaton have adopted the performance renew system, a guarantee given to every tool that
it will perform at least as well as a brand new tool. How other manufacturers can replicate this success Unicalc time studies are carried out free of charge and accompany Kyocera Unimerco’s tooling quotations in order to prove economy. Should you wish to discuss any of the services from Kyocera Unimerco, you can contact the Sales Team or Supply Vending Team on 01543 267777.
Published in association with: KYOCERA UNIMERCO Nanscawen Road, Fradley UK-Staffordshire WS13 8LH
Tel: +44 (0)1543 267 777 Fax: +44 (0)1543 267 778 Email: umuk@unimerco.com Web: www.kyocera-unimerco.co.uk
Factory of the month Eaton Hydraulics
Having a black belt master on site helps Havant to always be ahead of the curve in terms of training people through work-based activities. All areas of EBS are audited every three years. Continual training ensures people development at all levels, from leadership to shop floor employees. There are prescriptive requirements in education, to update skills, knowledge and understanding of the business. These come through an e-university and sessions held on site and off site, but there is also a lot of focus on mentoring. White says: “We try to encourage growth, not just through initiatives and technologies, but also by developing people’s skills. The mentoring that you get from people who have been here for a long time is very important in this sense: we constantly work to keep people in the business and retain their skills. Those who have been with us for a long time can mentor the younger generation of workers. They have a historic understanding of customers and products.
“There are many things encouraging long term employment here in Havant. The way Eaton fosters people is fantastic. We have occupational health, and we have HR constantly making sure everybody has a level of fairness in earning. Our understanding of health and safety is core of the way we do business. We foster an environment where people are safe, they feel appreciated and are able to express ideas and initiatives.” Talking about requirements for leadership team members, Fermore explains: “Training on leadership is quite intensive, and there is no getting out of it. We take different courses on, for example, getting results, building organisational capability, and acting and thinking strategically.” White says: “It really cascades down through the business. At Eaton, there is a continual development of skills at all levels.”
Skills for excellence Training requirements involve shop floor workers as well. Last year, all team leaders went through an NVQ programme and learnt business improvement techniques. There is also an engagement side to this, however: people’s communication and IT skills are developed on a regular basis, and issues like reading and writing difficulties or even the ability to speak English (workforce at Havant is very diverse) are tackled. Fermore says: “It is about the developing of the person before developing
The company aims to turnover £1.2bn a year within the next five years
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Factory of the month Eaton Hydraulics
the worker. People are our most important asset.” White adds: “We foster an environment where people are safe, feel appreciated and are able to express ideas and initiatives, where they are challenged. Every year, Eaton Hydraulics runs an anonymous employee survey, which provides management with a good measure of how people feel about the business while helping it devise a strategy to address areas of concern. It is a global initiative, but it does bear a lot of fruit when it gets down to plant level, where we give people an opportunity to have their say.” One of the many ways in which Eaton Hydraulics staff can express their appreciation to each other is represented by an initiative called e-star. Everybody within Eaton can recognise an employee or team by awarding an e-star. The recognition is forwarded to the individual or team manager and they can also award points that are redeemable in exchange for tangible benefits from DVD’s to TV’s and weekend breaks. The e-star programme also provides useful metrics that show trends in employee engagement. Multiskilling is ensured by the natural sharing of knowledge in product focus teams, within which the production manager, manufacturing engineers, planners and a range of team leaders and other employees all sit together. Eaton Hydraulics tries to encourage the use of skills to support different areas of the business. Havant also has a great reputation for exporting talent. The plant’s expertise and knowledge is tapped into from other Eaton facilities around the globe, with Havant employees often being invited to other plants to participate in value stream mapping exercises and improvement initiatives. The site’s health and safety performance is very good, because of its compliance with principles and understanding of what is needed: the company strives to spread a zeroincident mindset. The coordinator of the MESH programme (Eaton’s Environment, Health and Safety management system) often goes to other plants to help them improve their own MESH performance. Havant has proved very good at taking an initiative and realising it very efficiently.
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Eaton Hydraulics acquired the Havant site in 1999
A good example of this is the Rapid Response programme on lead time segmentation, a global Eaton initiative. Havant was the first plant in the EMEA region to implement the programme, which aims to enable the company to supply customers with the best possible products, at the best prices, at the shortest lead time possible. Fermore says: “This initiative has given us the edge on delivery performance and lead time. We are very proud of the fact that we have taken this project and run with it with very little external support. We have had people from the US coming to Havant to understand how we have done it.”
Alignment with suppliers Havant’s results could not be achieved without an efficient supply chain supporting Eaton Hydraulics’ operations. The business strives to ensure its suppliers are aligned to its goals and to its every initiative. For Rapid Response, for example, a supplier conference was organised in the company’s headquarters in Morge, Switzerland: senior managers of the hydraulics business presented to suppliers about the project, to make them understand their role in making Eaton Hydraulics a €1.2bn business (it currently turns over €500m) over the next five years. The company operates supply schedules (only one-offs are done on discreet purchase orders), and a classification of the parts Eaton Hydraulics needs at any given time is shared with all suppliers. Fermore explains: “Our suppliers could make Rapid Response a success or a failure, depending on their delivery. They needed to take a risk on inventory. Take our ‘A parts’ for example, which are those components we want to deliver to customers within five days. The window needs to be very short: we told our suppliers that we needed those parts to be delivered to Havant within two or three days. In order to do that, they need to hold them on stock. We gave them the guarantee that should we not consume those
Working together EATON and SAI Logistics Ltd
S
ince 1997 the team at SAI Logistics Ltd & sister company Sea Air Logistics (India) Pvt Ltd have been the primary logistics partner for Eaton UK for all of their components originating from India & China. Together both companies strive to provide the best possible logistics solutions for Eaton, on both a cost & operational level, with weekly ocean freight and air freight services to the UK. Sea Air Logistics (India) Pvt Ltd, owned by Jennifer Phillips and SAI Logistics Ltd UK, owned by son Simon, have developed and grown alongside clients, such as Eaton
UK, to the point where they are proud to consider themselves an extension of the companies themselves. SAI Logistics Ltd is based in 100,000 sq ft premises in Milton Keynes and stores in the region of 1000 pallets of stock for Eaton covering hundreds of different SKU’s from different suppliers all of which are held on a web based WMS allowing transparency of stock, self billing & which provides a weekly ‘call off to build’ schedule of the individual parts from each respective supplier that is required by Eaton every week. UK owner, Simon Phillips, says “Working with companies like Eaton is what makes logistics so interesting. This business is no longer just about getting from A to B, it’s about the whole process through the supply chain and becoming an integral part of your clients company. A team effort between all of us at SAI, Sea Air Logistics, Eaton and
their respective suppliers is required in order to maintain clear communication & planning which is key to successfully handling component business”.
Published in association with: SAI Logistics Ltd Grand Union House Old Wolverton Road Milton Keynes Bucks MK12 5PT Tel: Fax: Email:
01908 228800 01908 228811 info@sailogistics.com
Sea Air Logistics (India) Pvt Ltd 205 Main Road Whitefield Bangalore 560 066 India Tel: Fax: Email:
0091 8028451302 0091 8028451306 info@seaairlogistics.co.in
www.sailogistics.com
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Maintenance - The key driver to a Lean culture Best practices in maintenance serve as the foundation of any lean culture. With lean manufacturing becoming the goal of so many companies, the concept of lean maintenance is becoming critical to success. In fact, maintenance sets the stage for the dramatic transformation that follows.
B
uilt on the foundation of being proactive, lean maintenance drives out reactive practices. And instead, relies on developing systems with a repeatable process that can be executed and tracked. Gathering data, tracking performance and analysing what data has been collected has a direct impact on machine performance—and therefore the overall performance of the enterprise. These key performance indicators (KPIs) serve as the pillars of a robust and measurable system that eliminates waste and creates a culture of continuous improvement. In this culture, data is king and provides a solid view of operational performance. More importantly, the metrics that lean maintenance creates provide a link to the financial goals of the enterprise. With these tools, decision making is based on data. Inventory levels are better anticipated, on-
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time delivery is assured and asset optimisation is achieved. And with the intensity of competition these days, lean maintenance can be the difference between success and failure. Done poorly, maintenance can lead to unreliable assets breaking down at inopportune times. Done well, mainte¬nance can be an enabler of a productive, quality oriented profitable business. The ATS, Eaton relationship continues to grow. It all started back in 1985 with ATS purchasing legacy products from Eaton for end-of-line support. In 2000 Eaton deployed the ATS Four Walls Maintenance® solution which includes: parts management, certification, reliability analysis, standardized ATS performance metrics and most importantly ATS’ proven maintenance process. It’s a process that extends the life of capital investments and improves machine
availability while reducing costs. Today ATS provide on-site maintenance services to more than twenty Eaton plants, has achieved all cost saving targets and has recently been awarded the coveted ”Premier Supplier Award”.
Published in association with: ATS Unit 4 Beechwood Cherry Hall Road Kettering Business Park Kettering Northamptonshire NN14 1UE
Tel: +44 (0)1536 311650 Web: www.advancedtech.com
Factory of the month Eaton Hydraulics
parts we would underwrite them to take that risk away. It’s a shared risk, and that is the sort of relationship-fostering environment we welcome.” Eaton Hydraulics is also going to do more to directly help suppliers to get leaner. Newly hired supply development engineers will help suppliers realise results and develop a lean culture within their own businesses. “We have realised that for many of our suppliers lean is not a culture. We work with many large suppliers, like Tata Steel, but we also have small, independent suppliers who have asked us for help, especially in production planning. These organisations may be small, but they are incredibly important to us, as they supply not only Havant, but also Eaton Hydraulics’ sites in Warwick, the United States and China,” Fermore explains. Additionally, in a further bid to up skill, all managers at Eaton Hydraulics need to be certified in CPIM, a qualification in production and inventory management awarded by APICS, which is part of the Institute of Operations Management.
partners to drive cost out initiatives, keep providing service and improving it every year. They are part of the team, we invite people from those business to come to our leadership meetings. It is all very transparent, very open, and there is very clear communication.” Substantial investment in R&D and new technologies, as well as the ability to identify new market opportunities, leads Eaton Hydraulics to heavily focus on sustainability. There is a programme to develop a new type of hydraulic valve, which is electronically controlled and maximises flexibility for customers. The company is looking for growth in its market position in areas linked to sustainability, like the supply of control systems for wind turbines: however, for it to advance in these areas, a constant focus on reducing lead times and offering fair prices and high quality is necessary. Fermore comments: “It is a balance in action: by working with suppliers, becoming more efficient and using ERP we can ensure we are delivering while pushing inventory down.”
Working with partners
Extreme makeover
Eaton Hydraulics has recently changed its approach to managing Havant, splitting the business into maintenance management and facilities management. ATS now looks after maintenance for the organisation, which has already started to see results in terms of down time and costs reduction. White says: “They have a great TPM programme, and their preventative maintenance programme is very comprehensive, with more involvement with operators. They also carry out a record analysis review, which involves the operator, the maintenance person directly linked to the initiative and the team leader.” On the facilities management side, Eaton Hydraulics works with Vinci. Eaton’s drive for cost out influences its service providers as well: they are always challenged to suggest year on year cost out opportunities: Houghton, a chemicals manufacturer, not only provides Eaton Hydraulics with alternatives to particular fluids, but also has a site management service, where it manages all equipment using fluids while identifying ways to reduce costs. White comments: “It is all about partnerships for us. We rely on our
The layout of Havant has recently been changed, to ensure better flow throughout the facility (be it batch or one-piece flow). In tune with the culture of openness, transparency and improvement that is at the core of Eaton Hydraulics’ way of thinking, boards are everywhere in Havant, displaying everything from Business metrics, key events in the company’s diary to business goals, ensuring the team are fully engaged and have the availability of up to date information in a generic format across all functions A £2m investment for a new eight-station machining centre has ensured the reduction of cost per item produced. This piece of equipment has a single locating position: the item that goes in is located on one face and 19 spindles work on it at any one time. It’s fed with one-ton buckets of castings. The machine works in a very high volume, low mix environment, with a processing time of 21 seconds. The process requires extremely high precision finish, working to a one-micron tolerance. Commenting on the investment in the machining centre, White adds: “It is refreshing to work in a company led by stakeholders that is still able to invest in difficult times. Initiatives are not turned out because of cost, as long as the expenditure is justified and applies to Eaton Hydraulics’ core business principles.” Eaton Havant has achieved 93.2% on-time delivery across all products, and 98% on A class items (as of March 2012), and whilst this may seem low in an automotive environment, with over 1.5 million variants within the current model catalog it forms a class leading delivery performance metric.
It is all about partnerships for us. We rely on our partners to drive cost out initiatives, keep providing service and improving it every year Tyrone White, Manufacturing Manager, Eaton Hydraulics
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The twelve section, quad gob machines that handle four bottles at any one point
Brimming with Confidence Quinn Glass has gone from being a new entrant into the bottle-making industry to secure 30% market share of the UK and Ireland combined. Tom Moore talks to the company’s managing director Adrian Curry to discuss the factory investments being made to modernise what was a static sector in UK manufacturing.
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Glassware Quinn Glass
His story The stakes were high after the successful manufacturing-based Quinn Group ploughed the best part of £100m into the glass bottle market in 1998. It was a bold move to break into a long-established market but the group was never afraid of risk, or ruffling a few feathers with its ambitions. Driven by the enigmatic Sean Quinn, an Irishman determined to forge an empire based on the raw materials he had available to him in his homeland, the Quinn Group had fingers in pies across the world, from financial services to building materials, chemicals glass containers. Mr Quinn was the epitome of the Celtic Tiger Ireland symbolising the country’s strong period of economic growth between 1995 and 2007, but has not been a part of the company since April 2010 following a welldocumented sequence of events relating to significant losses in investments outside of the manufacturing group. During this period of change and intense media speculation, Adrian Curry, who rose through the ranks to managing director of Quinn Glass, has been a steadying presence. Mr Curry has played a pivotal role at Quinn Glass from the very beginning, scoping out the market before the group became the first new entrant to container glass manufacturing since 1932, establishing themselves with a brand new £100m factory in Derrylin, N.Ireland. The business logic was simple but effective, it “could make glass bottles and containers with the high silica sand that was readily available near the group’s head quarters in Co. Fermanagh and there was an opportunity in the market as the main competitor had all the market share but hadn’t invested much in what was the only plant in Ireland,” says Curry. Enter Quinn group.
Building from nothing Over the next few years Quinn Glass took 90% of the Irish market and exported into England and Scotland, where it had set its sights for bigger things. Curry jokes, “We felt that we had done our job and we were going to keep producing bottles in Derrylin for the next however many years and everything was great! But Sean Quinn had other ideas.”
16th May 2005: The first bottle made at Quinn Glass, Elton, a bottle of Newcastle Brown Ale
Ireland was one thing, but to build a further state of the art plant in Great Britain seemed a huge step, bearing in mind there hadn’t been a new plant since 1968... Our competitors didn’t believe we were going to invest what we said we were going to invest Adrian Curry, Managing Director, Quinn Glass The Elton site that Quinn Glass now sits on used to be the home of an old power station that used emulsified oil from Venezuela. It was cleared for use and in 2005 and a £325m facility was commissioned with a £5m grant from the North West Development agency and £5m from the Department for Trade and Industry (now BIS). Lofty ambitions came with great risks as the firm didn’t have any orders or customer commitments before beginning the build and soon ran into a legal wrangle put to them by rival firm Ardagh after plans to increase the capacity of the new plant. Describing the move, Curry says, “Ireland was one thing, but to build a further state of the art plant in Great Britain seemed a huge step, bearing in mind there hadn’t been a new plant since 1968 and the barriers to entry are significant. It takes a large upfront investment the return on investment is modest and it is management intensive, so our competitors
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The filling process at Elton
didn’t believe we were going to invest what we said we were going to invest.” It did invest and the dispute continued until the firm’s Elton site was granted full planning permission in 2009. To meet new requirements, Quinn Glass invested in further abatement equipment on site, which has underpinned the industry standard throughout Europe for having the lowest emissions of any container glass producer in terms of Nitrogen Oxides (NOx), emitting below 500mg / nm³ of NOx.
Green energy for green bottles With the level of heavy industry involved in the manufacture of glass, Quinn Glass
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has taken careful steps to ensure it complies with and goes above and beyond all regulatory standards. It is a big job as the company’s two furnaces are the largest container glass furnaces in the world with the capacity to produce 750 tonnes of glass per day. The furnaces run 24/7 with demand meaning that glass production never falls below 700 tonnes per day, a volume which mean getting the industry best for energy unit cost is imperative. NOx, Sulphur oxides (SOx) and particulate waste from the furnaces are treated by an electrostatic precipator (ESP) that purifies the gas. The company installed a selective catalytic reduction (SCR) unit in 2005, injecting ammonium to react with NOx in the waste gas and clean the outgoing air. Quinn Glass thought locally to save transport costs and build relationships within the local business community, purchasing its ammonia from fertiliser producer Growhow, just one mile away. This builds on a company tradition
Glassware Quinn Glass
of using the raw materials local to it, saving massive transportation costs. In addition, it is not just what comes out of the furnace that is green but also what goes in. Glass can be recycled an infinite number of times and up to 90% of what the company puts into the green furnace is recycled glass. While a sandstorm of fire too bright for the naked eye rages inside the furnace, highly trained engineers sit in an air conditioned control room close by, fitted with a Siemens Simatic PCS7 process control system that was configured alongside Process and Control Automation. Acting as the brain of the plant, the control room manages the emissions coming out of the chimney and monitors both the temperature and the levels of raw materials entering the furnace to ensure that energy use and productivity are optimised. With the changing mind-set in the UK that heavy energy users should not be punished, and in fact, would be less environmentally friendly if they were based in less regulated economies, Curry states, “We are an energy intensive company but the huge increase in the price of energy has been very difficult to pass on because of the state of the economy. All costs have gone up. Fortunately, Quinn Glass has been able to offset some of these costs through manufacturing efficiencies and innovative ideas as margins have been squeezed so much over the last five years.” Curry adds that what with the price rise of raw materials and wage increases at the firm there is not much squeezing left so “the country has to take a long term position on energy, look at where it is going to come from in the future and invest in renewables.” The firm made its own commitment to generate or purchase alternative means of green energy on site or purchase green energy at a premium. Although it buys in all its energy at the moment, Quinn Glass has an offset commitment on renewables by purchasing a level of renewable electricity at a premium price that amounts to 10% of its total energy use. The manufacturer signed a contract to buy electricity generated from renewable sources between October 1, 2010 and October 1, 2013, making it tax levy exempt in the process. The company is now looking in detail at generating electricity on site
from waste gas, in a partnership arrangement that could generate up to 1.6MW of energy from the temperature of the waste gas stream.
Getting green means getting lean The site in Elton produces 1.6bn containers a year, twice the amount made at the firm’s first glass factory in Derrylin, where the build was completed just seven years earlier. To gauge the scale of the firm’s bottle-making operation, a recent glass factory closed in the UK that was producing 230 tonnes of finished bottle a day across all of its lines, while one of the 21 lines at Quinn Glass can take up to 180 tonnes a day. This increase on the level of production is down to the company’s sites being significantly larger in scale but also due to the speed and tenacity that Quinn Glass has invested in the latest technology and machinery. Curry confidently says, “These figures show how much the industry and technology has moved over that period of time. We are only producer in the UK that can manufacture beer bottles on twelve section, quad gob machines. Each of these sections can produce up to four bottles at a time meaning that the unit cost is lower here as we are producing more bottles within the same period of time while cutting energy usage.”
The country has to take a long term position on energy, look at where it is going to come from in the future and invest in renewable Adrian Curry, Managing Director, Quinn Glass
The company’s heavy investment in the bottle forming side of the business, which has also increased the number of food jars and wine bottles per section to three, increases the output on that machine by 50% of the rate its competitors are generally operating at, with machines making two bottles per section for similar containers. Given the larger furnace output this also equates to, there is a significant energy saving, a valuable cost-reducing measure on one of the company’s largest variables. It is these cost savings that enabled Quinn Glass to enter the container market in 1998 with zero market share, sell to 8% of the UK and Republic of Ireland market combined by 2004 and 30% in 2012. These quick leaps in market share have been achieved by winning contracts that have come up as old furnaces closed, capturing growth and increasing the level of filling production at Elton that would have previously been filled abroad. The lower unit cost at the company enables it to be competitive not just on UK contracts, but European ones also.
If the glass is half full, fill it Curry states that capacity is growing all the time because of light-weighting and innovation. Quinn Glass didn’t only bring new machines to the bottling industry, but a completely new business model that makes it competitive selling into
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Tuesday 22 May 2012 09:30-15:00 New Holland Agriculture Basildon Tractor Plant
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By seeing the tools in action and talking to the pillar champions, delegates attending the event will gain a clear understanding of the building blocks the plant is using to construct a truly world class manufacturing operation.
To register a place, please contact Benn Walsh on: T: 0207 202 7485 E: b.walsh@sayonemedia.com EARLY BIRD OFFER Delegate fees: £295 +VAT per delegate Early bird offer: £245 + VAT per delegate The Manufacturer magazine reserves the right to preclude delegates from participating in the tour due to the nature of information released. Please speak to Benn Walsh if you have any queries regarding conflicts with the host site. The Manufacturer magazine would like to thank New Holland Agriculture for the use of their facilities in hosting the tour.
Glassware Quinn Glass
Europe, even with transport costs. It has done this by offering a unique, filling and bonded warehousing service that has opened up the potential for multilevel contracts, based on a number of efficiencies it can provide through vertical integration. The company has plans to further grow the market for glass containers in the UK by importing bulk liquids for filling. Curry explains, “The UK is a big consumer of southern hemisphere wine so we are making ourselves the best option to sell into the UK and European markets. Instead of bottling at source, the savings from bringing it to the UK to be bottled are significant because up to 170% more wine can be transported in a container rather than in bottles.” Curry estimates that the cost of bottles is also 25% lower in the UK than in Australia, one of the world’s biggest wine producers, with no additional import taxes. Having the product stored and ready for retail in the UK also means that the retailer doesn’t have to
wait the six to eight weeks lead time that shipping the final product from the southern hemisphere necessitates. This means that brand owners can rely on Quinn to react quickly to demand changes at retailers. Explaining the environmental benefits, Curry, who reveals his penchant for a glass of New Zealand Sauvignon Blanc, but wouldn’t reveal which brand, adds that “even for beverages produced in the UK, this more efficient form of transport significantly reduces costs. Instead of making glass bottles and taking them to the brewer, we bring the beverage to us and do everything under one roof.” Up to 40% of bottles Quinn Glass produces at the Elton plant can be filled on site, the ‘shing’ of glass echoing around the company’s vast facility as bottles whirl and swirl around the Krones Variojet rotary fill and cap machines like show-off barman in a cocktail bar, with each bottle filled and capped within seconds. An average of 24,000 wine bottles and 60,000 beer bottles are filled per hour on each of the company’s five filling lines, which are then labelled and boxed before being loaded onto pallets for storage. Explaining how Quinn Glass has managed to take such a large share of the market in such a short time, Curry reasons, “Brand owners want to ensure their product is dealt with properly and that there is no quality risk. They want to go to a partner that they know and can trust.”
The gap between the bottles on the filling line optimises output
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Lightweight bottles Quinn Glass has also been able to lightweight bottles to make further cost savings and reduce costs on the retailer shelf. Thanks to the clever use of CAD technology the manufacturer now produces the lightest screwcap wine bottle in the world at 300g, weighing 56g less than the lightest bottles in the market when it was introduced in 2009. It has worked closely with its customers to take individual profiles and lightweight their product range. Heineken’s Newcastle Brown Ale was the first bottle ever made at the Elton plant, and there has been a strong relationship ever since. By talking to the brand owner, discussions showed that just a 5mm reduction in the diameter of the bottle would allow both businesses to cut costs. This slight change in bottle diameter allowed Quinn Glass to move from triple gob production to quad gob production and the savings are very significant according to Curry. The beers and ciders come in at twice the bottling strength. This means
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Glassware Quinn Glass
Quinn Glass at a glance Workforce Size
736 staff at Elton, 1,063 staff across the UK.
Domestic/Export
Most of the revenue comes from the UK and Ireland.
Market Share
Quinn Glass has gone from being a new entrant to the market in 1998 to securing a 30% market share in the ROI and UK market combined in 2012.
Output
Quinn Glass, Elton, produces 1.6 billion containers a year.
Capacity
Each furnace has capacity to produce 750 tonnes of glass per day. Levels never fall below 700 tonnes.
Did you know?
Quinn Glass featured in a recent episode of Eddie Stobart: Trucks and Trailers on channel 5. It aired on Friday 20 April and featured a driver transporting 24,000 litres of Australian wine its Elton bottling factory.
taking on more quality responsibility, cutting the product and managing the liquid to get it to the final brew before bottling, something that requires very stringent quality controls to match up to hygiene and quality standards. Again, this means that the road haulage is reduced, saving 50% of the travel movements from source to bottling plant.
Brand in your hand The relationship between brand owner, bottle maker and filler is essential as Quinn Glass is helping to market the product. After all, a consumer sees the bottle before they taste the drink. Curry explains that there has been a trend towards bottled beers in recent years due to “brand in your hand” culture. Being at a pub, bar, party or nightclub is a very social situation and what you have in your hand is part of your image. There has been a surge in the sale of beers and ciders that has directly benefited Quinn Glass due to the fact that they tend to be bottled rather than poured from a pump, such as Newcastle Brown Ale. Curry says that the brand is popular in the US, and he would know, Quinn ships it there! Bottled beers have also become more popular as drinkers (and those serving them) are becoming more health conscious about the alcohol content they are consuming – leading to a trend in smaller bottles. The trend is not strictly limited to beer either with the company recently investing £1.5m into the development of 187ml wine bottles, which it now has the capability to produce and fill. The bottle maker is hoping to expand its capabilities even further by announcing further investment to
capitalise upon new trends in wine drinking. Since the economic downturn, there has been a growing trend for people to drink at one another’s homes and a greater demand for bag and box wine. To grab a greater slice of this opportunity and offer an all-round filling capability, capacity will rise from 100 million to 230 million litres of wine a year at Elton.
We are an energy intensive company but the huge increase in the price of energy has been very difficult to pass on because of the state of the economy Adrian Curry, Managing Director, Quinn Glass
Automating Success Quinn Glass has also invested in automated warehousing to make bottles on long runs and store the product as opposed to continually job changing. Curry explains, “Instead of making a product three to five times a year, we will endeavour to reduce that figure to two times a year. In terms of cost and capital it is difficult to do it without a fully automated warehouse so we have an advantage in the marketplace as we are the only glass producer in the world that has this capability.” Its 11 acre fully automated warehouse is 290 metres long, 35 metres high and has the capacity to store 264,000 pallets. It cost £30m to build but has given the company a competitive advantage. It gives customers security of supply through increased stock holding and guaranteed integrity of stock. Curry states: “Customers are happy to go down to only one supplier providing that we hold minimum stock levels.” Switzerland-based Stocklin provided much of the equipment for the warehouse, including conveyors, MASTer stacker cranes 33m in height, material flow controls and warehouse management system. Now that the initial investment has been made the cost to run the warehouse is low. As well as the cost savings on lighting and staff, as it is a no-human zone, there is also no need for forklift handling until the finished product is
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to manage trains coming in and out of the sight. The company will have the capability to bring wine, sand and recycled glass in, as well as distribute finished product out by rail. There will be massive fuel savings as sand brought from King’s Lynn currently comes in to Ellesmere Port a few miles away from Elton by rail, before being trucked the rest of the journey. Quinn Glass has signed a 10-year contract with Freightliner to transport three trains of sand a week and Curry says that this “is a heavy initial investment but the company is looking long-term where it will provide good payback. You can transport 1,500 tonnes of sand in quicker journey time by train, something you can’t do by lorry.”
Lean stepping stones
Glass streaming before it enters the mould
being loaded onto the lorries. A large proportion of pallet movements are made by Swisslog, which has supplied Quinn Glass with an automated goods vehicle (AGV) system guided by signals installed around the site. And it doesn’t stop at the warehouse, investing £100,000 each in 28 Krones Symplex bottle inspection machines, which check for faults and imperfections in the bottles. It can read the code emblazoned on each bottle during the forming process to identify and trace each container back to the manufacturing cavity so that correction or statistical analysis can be carried out.
Train Kept A-Rollin Quinn Glass has achieved an on time delivery in full figure of 99.2%, a KPI which has been aided by the company’s move to consolidate outgoing loads to retailers. The company uses a number of distributors, including its own haulage trucks, which could now have two or three customer’s finished products inside at any one time bound for a single retail distribution centre. The Quinn Glass factory in Elton recently featured in an episode of Eddie Stobart: Trucks and Trailers on Channel 5. The programme demonstrated how the company transports bulk wine 22,000 miles from Australia and how the wider supply chain for wine bottled in the UK operates. At present, wine is brought in by sea in large transatlantic vessels before being put on rail to Widnes, where it makes the final leg of the journey by road. Quinn Glass is currently investing £3.5m on a rail link to link the site to mainline railway to streamline its logistic operations. The cost will incorporate the rail connection and signalling
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The company has recently launched a new technical department to look at new product development and lean manufacturing techniques. It is currently undertaking a complete scoping exercise of the business that is due to be completed soon, providing analysis to help the firm decide upon its next steps and investment. Since the change of ownership that followed the legal case surrounding Sean Quinn, the company has put a five year business plan in place that includes significant capital expenditure and the upgrade of equipment at both the Elton and Derrylin plants. Curry says, “Our shareholders and stake holders recognise the value of Quinn Glass as independent in the market and a business that has the potential for growth and expansion. They are happy to take a long term view on the business and invest further for the right opportunities.” Lean consultants Big Tree are putting in a complete balanced scorecard system for the entire business to help map this path to growth and manage KPIs across all levels of the business.
Skills game, set and match The company is set to name another partner that will manage its lean academy, taking all of its employees though the next generation of lean. Curry asserts, “Normally it is 5S but we have added another to implement 6S, safety. Over the years we had to develop training programmes in order to develop and bring people through
Glassware Quinn Glass
the business. Elton benefited from the bespoke training schemes set up at the plant in Derrylin to counter a skills gap in the area. The next objective is to bring lean up to a whole new level.” With 740 people on site, it will be quite a challenge but Curry is game after building up the skills base from scratch in Elton. His success in this arena has already been recognised with a national training award. With just 20 people having industry experience on joining the plant in Elton, an intensive training scheme was not an option, but a necessity. With the scheme copied across to get their new staff up to speed in an industry previously unknown to them, Curry remarks, “We can take someone in with very limited skills and take them the whole way through an academy process based on site to train them up to NVQ Level 3. That’s why Sean Quinn wanted another factory, his view of the world was that he had invested a lot of money, made mistakes along the way, and could turn that into an even bigger advantage. That’s the only way an entrepreneur can think.”
Making a career out of manufacturing Quinn Glass has taken on 35 new members of staff already in 2012 and although Curry is reluctant to name the figure, he gives a cheery response when asked if the company’s investment will result in even more jobs. “Absolutely,” he replies firmly. Fortunately for those working there, the business didn’t have to down size during an economic downturn in which UK manufacturing was hit hard, due to strong growth in market share. These are not new opportunities, Curry explains, “I initially started working with Quinn during the summer holidays while I was studying electrical engineering at university and I’ve stayed since. There weren’t many jobs in the area at the time so I was quite happy to stay with the group and I have been offered many opportunities. People see a large box with a chimney and wonder what it is all about, but when they come in during our plant open days and see the technology and investment, they realise that we can offer long term sustainable jobs in manufacturing. No one comes out of school knowing how to make glass so Curry is happy to take the responsibility to train them
under bespoke company programmes. However, Curry states that “the government needs to address the lack of tradespeople in the UK as there is a huge shortage of electricians and fitters that are highly valued within the manufacturing sector. Government training centres and modern day apprenticeships need to be encouraged more.”
Rallying for UK PLC Curry continues to say that there needs to be a renewed focus on training and skills to equip the UK for a successful future. In his eyes, “there has been complacency around certain industries, including glass manufacturing, where little investment has been made while also assuming that it will always be there. It won’t be, not unless you invest. If companies invest, are innovative and competitive, then those jobs will stay.” Curry is thinking long term, not only aiming to show people that there is a future in manufacturing for them, but their children too. With his vast experience of managing the Irish plant, he isn’t a man afraid to get his hands dirty; walking the lines separated by the Irish Sea at least once every week. Curry declares, “As a country we have to accept that there are certain things that are going to
Normally it is 5S but we have added another to implement 6S, safety Adrian Curry, Managing Director, Quinn Glass
be manufactured abroad, particularly things that can be transported at a low unit cost. Ireland and Britain need to look towards making products that can’t be transported easily to focus on producing products that will bring long term sustainable manufacturing to the UK.
Full steam ahead Quinn Glass sees continued opportunities for growth in the UK and Ireland. It plans to fill more products as 25% of revenue is lost on transport inefficiencies by anyone importing filled bottles. It has followed its own advice and poured another £40m into its Irish plant to bring it up to the same standard as its site in Elton. Quinn Glass plans to maintain its status as number two container glass supplier and the number one contract wine filler by volume in the UK up to 2016. As part of its five year plan the company is planning to increase its share of the glass bottle market by 3.5% to 33.5% and grow its wine market share to 30% of the available market. With 700 million litres of new world wines consumed in the UK every year and Quinn Glass more than doubling its wine filling capabilities, it is hoping to make substantial gains on its 12% share of this market. Quinn Glass is in a unique position in terms of the ubiquitous presence of its products around the world. As the sole producer of Baileys bottles Curry smiles as he says, “there is a small piece of Derrylin in almost every pub in the world.” It’s a position which take plenty of ‘bottle’ to fulfill but Quinn Glass is thriving on the responsibility.
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lastword The
MACH: great showcase but what about the ROI? MACH is the most lavish pure manufacturing trade show in the UK and as a showcase of manufacturing technology, an important date in the diary. But exhibiting is expensive and, as the organisers the MTA work to widen the target market, Will Stirling asks if the show provides good value for money.
T
he foot ache is fading, your retina has recovered from the shock of sunlight and you’ve had eight hours of solid sleep. Congratulations for surviving five days at MACH! produced the MACH seminar programme this year, a successful venture with high quality presentations from companies including RollsRoyce, the world land speed record attempting Bloodhound SSC and Siemens Gas Turbines. It was great, however some seminars were sparsely attended. You learn a lot about the footfall cycle at these shows when you are involved in the organisation Monday and Friday are definitely difficult to populate. But the mid-week was very busy and exhibitor comments backed this up. “We received nearly 60 enquiries during the course of the week making this one of the best MACH’s for the Midlands Assembly Network,” said Gerry Dunne of the 10-strong collective, MAN. Attendance for 2012 was up over 20,000, the Manufacturing
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Technologies Association says, which looks like breaking 2010 records (subject to audit). The number of exhibitors totalled 491, up nearly 10% on 2010. Many MACH stalwarts gave the thumbs up too. Nick Frampton, managing director of Mills CNC which distributes Doosan in the UK, said: “By the close of play on the last day we had sold 14 machines from the stand – over £1.8m sales – up 50% on the sales we achieved during MACH 2010. Education, a key pillar for MACH 2012, was also a success. Of the +20,000 visitors, 2,500 were young people and the Education and Training Zone received a constant procession of school children, whose understanding of engineering was hopefully inspired by the MANTRA truck and Bloodhound SSC car. Head of external affairs at the MTA Paul O’Donnell says that the sector that the MTA is trying hardest to grow – the subcontract engineering firms who use these machines – also had a bigger zone this year, the Supply Chain Solutions zone. Central Grinding, a newcomer from Leicester,
received so many leads that the company is buying a new machine off the back of the show. But these engineering and metal-forming companies are also among MACH’s critics. One company, which reported having good show mid-week, said the absence of big names such as Amada, Bistronic and Trumpf, was disappointing. The reason for the no-shows? One key absentee said “even though 2011 saw our best and most profitable trading for 15-years, the NEC/MACH experience is very difficult for any company in the current trading environment to justify. Our experience over many years of supplying top of the range machine tools to the UK market tells us quite clearly that no business is going to step up to our stand and buy a machine at MACH.” Several MTA members, including Mills CNC and Yamazaki Mazak, would beg to differ but cost is a barrier and MTA’s membership structure means show fees are non-negotiable, leaving no room to offer new friends a discount. On balance though MACH 2012 was busy and many machines were sold on site. But, when manufacturing investment is not booming and other marketing tools such as the internet and social media are available, the MTA needs to double its efforts to retain exhibitors and explain how MACH provides ROI.
For more exhibitor feedback on MACH 2012 go to: www.themanufacturer.com/MACHfeedback
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Visual Workplace / Visual Thinking Delivered by: Dr. Gwendolyn D. Galsworth, President, Visual Thinking Institute Length: Full Day Classroom 30th May, Optional Assessment Tour 31st May MEGGITT Aircraft Braking Systems
30th May – Seminar 09:00 - 17:00 In this one day seminar, Dr Galsworth introduces the basic definitions, principles, concepts, and tools that are at the foundation of a visual workplace and that drive it as a corporate improvement strategy. On day one of the seminar you will: • • • • • • •
Discover the ten core visual workplace technologies & key visual outcomes of each. Learn how they work together to create significant bottom line results. Learn to diagnose visuality in your own company & identify your current level of visual competency. Learn to energize and unite your workforce through visual functionality, even in a multi-lingual/multi-cultural work environment. Learn how to measure bottom line visual results & how to track impact on people. Learn the vital difference between measures that monitor and measures that drive. Discover the three biggest mistakes when launching a visual initiative & how to avoid them.
31st May: Day Two Benchmarking Visit: MEGGITT Aircraft Braking Systems, Coventry, 09:00-14:00 Employing over 1,200 people worldwide, the Coventry site provides manufacturing, repair and overhaul for the defence and aerospace industry. At this visual thinking benchmarking visit you will: • • • •
Gain access to the host sites manufacturing facility. Meet the teams and individuals who work within the facility. Experience firsthand the visual workplace that supports lean at the site. Conduct a visual workplace assessment on site and report your findings at the end of the day.
To register call: +44 (0)207 401 6033 or visit www.leanmj.com/annualconference
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