Page 1 April 2012 Vol 15 Issue 4 | April 2012 | Vol 15 Issue 4

Waste not Don’t rubbish your recycling potential

Manufacturing leadership

Status Symbols: The campaign to protect Engineering professionalism

Workforce and skills

Hurdles for business: The Olympic challenge of workforce management

Business of manufacturing

India Gate: Getting into business in the Asian subcontinent Steeling away: Updates on the threat of metal theft

IT in manufacturing

Going mobile: Bring-your-own-device is on the rise

Interview Mark Cropper

Chairman, Cropper plc

Factory of the month Elddis

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Editor’s comment

Close, but no cigar George Osborne must have woken with a warm glow of self-satisfaction the day after his Budget announcements on March 21, as the proof in his Patent Box pudding was resoundingly proved. On March 22, pharmaceutical giant, GlaxoSmithKline, announced that it will invest £500m in UK programmes, creating 1,000 jobs, and that this decision was made in direct response to the Chancellor’s scheme (p8). But any period of self-congratulation, basking in the conviction that government had finally achieved an understanding of how to crack the industry ‘nut’, will have been short lived for Mr Osborne.


While manufacturing leaders and trade body representatives made sure to show they appreciated the lowering of patent costs and other actions, such as the reduction of corporation tax, the conspicuous absence of key measures to create a competitive manufacturing environment in the UK was disappointing. Clearly expressed calls for changes to the capital allowances system were ignored and energy policies exposed an ongoing inability to marry industrial ambitions and economic expediency with a desire to decarbonise. On p140 Will Stirling discusses these discrepancies in more detail. Of course balancing the varying demands of different sectors and interest groups across Britain is an unenviable task. But it seems a shame that it has taken so long for the stunning realisation to reach government that there is a need, as Mark Prisk put it at the National Manufacturing Summit (p90), to “broaden the involvement of other government departments,” when any one of them is forming policy. Perhaps government could learn from the open innovation (p80) and collaborative working systems (p71) now being used in industry to overcome equally complex challenges in the development of products and services. Just a small effort to standardise and bring consistency to the logic behind government actions might avoid such embarrassing incidents as that David Cameron created in his recent tour of America. How much supply chain visibility was needed to discover that the Dunlop pingpong table he proudly presented to the US President as an example of British manufacturing, was in fact made in China? The discovery certainly didn’t seem to tax the Daily Mirror.

Cover image: New possibilities for recycling manufacturing waste are explored on p16

Perhaps this was simply a thoughtless faux pas. But it passed up the opportunity to showcase a real and commendable British manufacturing success story on a global stage. Unhelpful at a time when products with valid ‘Made in Britain’ credentials need to be able to leverage that value for all it is worth in international markets. Jane Gray, Editor

20 61 84 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.


IT Editor Malcolm Wheatley

Associate Editor Roberto Priolo

Editorial Assistants George Archer

Tom Moore 


Art Director Martin Mitchell

Henry Anson, Sales Director

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.

Designers Alex Cole Vicky Carlin

Sales and Events Head of Events Jon Tudor

Marketing Executive Grace Gilling

Will Stirling, Editorial Director Will edited TM for two and a half years and now is working to expand the SayOne Media publishing portfolio. He is responsible for the launch of new reports and special supplements for The Manufacturer and for the maintenance of editorial standards across SayOne Media publications. Before joining SayOne Media, Will worked for Euromoney and IPC Media.

Project Director Matt Chilton

Sales Manager Benn Walsh

Sarah Hough

Client Account Managers Élann Carel

Peter Kealy

Tina Bennett

Jane Gray, Editor

Jane joined SayOne Media in 2009 for the launch of the Lean Management Journal, sister publication to TM. Reporting concurrently for The Manufacturer, Jane focused on industry skills development features and lean enterprise until she became editor in June 2011.

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.

The Manufacturer in partnership with EEF, the manufacturers’ organisation. Working together to secure the future of manufacturing.

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EEF is dedicated to the future of manufacturing. Everything we do is designed to help modern manufacturing businesses evolve, innovate and compete in a fast-changing world.

The Manufacturer is working collaboratively to drive innovation and manufacturing excellence in the UK. Our partnerships with leading industrial research centres, further education providers and trade bodies is an important part of this and TM is pleased distribute directly to the alumni and membership of the following organisations:

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Contents 04 News and regular columns.

43 India Gate: Exploring the dynamics of

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

53 Supply chain

15 The Naked Engineer

A tongue-in-cheek tale of battling bureaucracy and time wasting regulation from our frustrated incognito manufacturing leader

16 Lead Waste not, want not: Tim Brown looks beyond zero waste to landfill celebrations to ask if these mask a gaping capability gap in recycling services for UK manufacturers

20 Interview Paperback writer to power broker: Will Stirling talks to Cropper plc’s chairman, Mark Cropper about fostering his family business through a challenging era for its industry while making time for his, rather large, ‘bit on the side’ hydroelectric power venture

Pillar features 28 Manufacturing leadership

Status Symbols: Should the professional title ‘Engineer’ be more rigorously regulated and protected? Industry commentators debate the effect such a move would have on the status of engineering in the UK

32 Workforce and skills

Hurdles for business: Jane Gray talks to manufacturers and service providers about the Olympic challenge of workforce management coming up this summer

37 Employee of the month

Adam Kelsey, Mechanical Design Engineer, Group Rhodes

43 Business of manufacturing

Keep your friends Close: Tracing the decade of canny investment which took BCW Engineering from a twinkle in the eye of its founders at MACH 2002, to a £10m turnover success story at the 2012 event

doing business in India and the options available for market entry

Lean goes large: A review of efforts to achieve multi-enterprise lean systems throughout manufacturing supply chains

56 Manufacturing technologies

More than manufacturing: Tom Moore attends an industry partners’ day at the EPSRC Centre for Through-life Service Engineering to learn more about the technologies being developed to support this important manufacturing paradigm shift

60 Bionic business: Malcolm Wheatley gives an overview of British biomanufacturing, a rising star in the UK’s set of industrial strengths

61 IT in manufacturing

Going mobile: ‘Nice to have’ or game changing investment? Malcolm Wheatley investigates mobile technology for manufacturing to discover the priorities for investment and the limitations of the business case

68 Connecting you: Jane Gray talks through

the theory and practice of optimising ERP technology with academic leader Dr Emany Elbanna of Royal Holloway, University of London and Peter Robinson of yoghurt manufacturer, Yeo Valley

77 IT news

Manufacturinginaction Each month TM conducts interviews and case studies with companies from the whole gamut of UK manufacturing from large multinationals to niche SMEs across sectors. This month TM visits:

118 Elddis – Caravans and motorhomes 126 Cosworth – Precision engineering 134 CAB Automotive – Automotive


Manufacturing News Budget 2012 Tax simplicity promised but reaction lukewarm


hancellor of the Exchequer George Osborne unveiled his 2012 Budget last month which included numerous changes to tax, a continued commitment to deficit reduction, and a promise to increase exports and business investment. In a speech that lasted just under an hour, Mr Osborne outlined to Parliament a range of “far-reaching tax reforms” aimed at making the UK more competitive. Mr Osborne said the coalition wanted business to double exports to 1 trillion pounds by the end of the decade and described the budget as one that “rewards work” and “unashamedly backs business”. Mr Osborne took the opportunity to slam the Carbon Reduction Commitment (CRC), which was put in place by the previous Labour government, describing it as expensive and cumbersome. He said that the Government would seek to make changes to simplify the system and, should those fail, it would propose a complete overhaul. Acknowledging that tax was only part of the story, Mr Osborne also promised to back infrastructure upgrades including rail projects in the North of England and highlighted that the Government would promote growth in science in order to back the development of key industries. Following this commitment, Mr Osborne announced that a UK Centre for Aerodynamics is to open next year, bolstering aerospace. The energy sector will also be supported with a strong focus on offshore gas.


The perspective of industry commentators: Terry Scuoler, chief executive of EEF, the manufacturers’ organisation said: “The Chancellor began positively by setting out his thoughts for a new economic model. But, by the end of his speech, the task of rebalancing our economy looked as daunting as ever. While there are some helpful measures, they fail to send a strong enough signal to growing manufacturers that now is the time to bring forward their investment plans and to do it here. The corporation tax cut is welcome but, on its own, it is not the silver bullet that will unlock the business investment our economy urgently needs.”

John Cridland, CBI directorgeneral, said: “The Chancellor has painted a clearer vision of how the UK will earn its living in the future and, by seizing the opportunity to make sure our corporate tax system is more internationally competitive, he has sent a powerful signal to companies to invest, do business and create jobs in the UK. Plans to reduce the top rate of tax to 45p by April 2013 will show our top and aspiring talent that this Government wants them to create wealth here.”

Budget highlights: Corporation tax is to be cut by 1% this year. From April corporation tax will be 24%. Two further cuts will also go ahead, so by 2014 it will be 22% An above-the-line R&D tax credit will be introduced next year. The growth forecast has been revised up to 0.8% for 2012 and to 2.0% for 2013 The Patent Box will reduce patent costs and provide future benefits with reduced corporation tax on profits from UK patents £100m will be contributed by government and private investment to improve university research centres

The Food and Drink Federation’s director general, Melanie Leech, said: “At best this Budget is a mixed bag on energy. We had hoped for greater clarity around future energy and emissions policies to enable better business and investment planning. Although plans to simplify the Carbon Reduction Commitment (CRC) are welcome, it is regrettable that the Chancellor did not go further and scrap it altogether.”

ADS commented on the creation of a world class UK Centre for Aerodynamics with £60m: “The Centre will pull together existing testing and modelling facilities into a coherent virtual centre, and will be responsible for coordinating and supporting world-leading Research and Technology (R&T). Through the identification and development of new technologies, the Centre will pinpoint areas for increased investment to fund research which will ensure that the UK remains a competitive leader in the global aerospace market.” See more comments from manufacturers, trade body representatives and other industry supporters online at


Working as a recruitment consultant for Michael Page Engineering & Manufacturing will: • Give you an opportunity to transfer your technical know-how and current experience to a leadership role, in the world of recruitment • Allow you to use your problem solving skills along with your desire to achieve consistent results against commercial targets • Give you the support and career progression of a leading brand in global recruitment, ranked 39th in the Sunday Times Top 100 Companies to Work for in 2012 Maybe you hadn’t realised the relevance of your current role to a career in recruitment or the exciting rewards this industry has to offer? Find out how some of our most successful consultants have made the move to a role in recruitment by visiting our website: Alternatively, get in touch with our MD Colin Monk to find out whether this is the challenge for you, on 07920 580596 or

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The National Energy Management Exhibition (NEMEX) 30 years at the forefront of the battle to save energy


ARGE or small, public or private, saving energy is a challenge all organisations face and there’s no better place to find the latest ways to make a change for the better than at NEMEX, the National Energy Management Exhibition. The 2012 show will bring together energy executives and decision makers from a


wide range of industries to find out more about the latest advances in renewable energy products, energy management services and energy efficient technologies. In the last two years the UK’s leading event for energy management has seen a 37 per cent rise in visitors and it will be offering even more in 2012 as it celebrates its 30th anniversary.

In addition to being a great place to do business, when NEMEX returns to the NEC Birmingham from May 22-24, it will unveil a new, second conference theatre, transforming the ideas and advice available at this free-tovisit event. It adds up to a winning combination for exhibitors and visitors alike, united in the aim of meeting the UK’s strict targets to reduce CO2 emissions by 80% by 2050 and to obtain 15% of its electricity from renewable sources by 2020. The 2012 seminar programme promises an engaging schedule, with companies already involved including Co-operative Group, The Carbon Trust, Nando’s, Marks & Spencer, Flextricity, IBM, Gazprom and RES ensuring once again there will be a broad spread of opinion and advice on offer.

News F o o d and d r ink Premier Foods, the UK’s largest food and drink manufacturer, announced a pre-tax loss for 2011 of £259.1m in March. The poor performance has been attributed to its bread division which had to be written down in value thanks to fierce competition from rivals like Kingsmill. The trading profit of the Premier Foods bread division dropped to £3.4m – a decline of 90.4% on 2010.The group’s overall loss compares with a profit of £28.5m in 2010.

Premier Food’s bread division, including its Hovis brand, have been blamed for big pre-tax losses in 2011


G o v e r nment funding

E ducati o n

Wrexham-based automotive manufacturer, Cobra Global last month acquired precision engineering company Fourmasters and promised to invest over £250,000 in the company’s Wolverhampton site over the next two years. Cobra Global is a recent winner of the Queen’s Award for Enterprise. Its recent acquisition of Fourmasters reflects its diversification strategy as the traditionally automotive focused firm looks to move into aerospace markets.

A new National Loan Guarantee Scheme was launched in March to help UK SMEs, of less than £50m turnover, gain access to finance. The scheme was announced in the autumn statement, 2011 and following its implementation last month EEF director of policy, Steve Radley said: “Government and the banks should be applauded for introducing such an ambitious scheme in such a short period, but the challenge now is to avoid the mistakes of the past. Government needs to undertake a major communications exercise, working with the banks at the branch level, to ensure that they are properly equipped to offer the new scheme to the smaller firms that need it”. Banks participating in the national loan guarantee scheme, which reduces the cost of bank loans by 1% are: Barclays, Bank of Scotland, Royal Bank of Scotland, Lloyds TSB, NatWest and Santander Corporate Banking. Aldermore has agreed in principle to supporting the scheme.

BAE Systems launched its Engineering Roadshow for year 7 pupils at Sacred Heart Roman Catholic College in Southwark, London. The roadshow aims to raise awareness about careers and opportunities in science, technology and engineering. Launched in 2005, the roadshow is now an annual event for BAE. More than 160,000 young people have engaged with the initiative since its launch and over the next ten month BAE hopes to make contact with 25,000 more in over 240 schools nationwide.

A ut o m o ti v e Infiniti, the luxury division of Nissan, unveiled the EMERG-E, a midengineered sports car concept developed as part of a collaborative R&D project at the Geneva Motor Show. The project was co-funded by the Technology Strategy Board. The concept car is capable of accelerating from zero to 60mph in just four seconds. Infiniti said that the car had presented an innovation challenge in the need to combine “stunning performance” with the limited range of electric vehicles.

S cience and T echn o l o g y Mayor of London, Boris Johnson is to launch a viability study for a new science and technology institute which will be run next to the Olympic Park. The plan is for two or more top British universities to fund the institute and has already been discussed with the Russell Group – representative of British universities that receive two thirds of the Government’s research funding allocation. Higher education has been placed at the top of the Olympics ‘legacy agenda’.

C hemicals Merseyside-based manufacturer ANH Refractories Europe secured a major new deal to supply products to the Middle East petrochemical market. The deal was signed through the firm’s long-term licensed partner BFIM (Binzagr Factory for Insulation Materials), based in Saudi Arabia. ANH Refractories Europe manufactures materials at its Bromborough plant which are used in linings for furnaces, kilns and incinerators. The new contract in the Middle East will boost an existing growth trend at the firm which reported a record increase in turnover from £4m to £7m in 2011.

E ne r g y Government issued a call for evidence in March to businesses impacted by rising energy prices. The call was issued by the Department for Business Innovation and Skills and asks companies to provide data to shape a £250m Energy Intensive Industries (EII) Package. This package aims to reduce the impact of energy and climate change policies on the cost of electricity for energy intensive industries. Fears have been expressed by bodies such as CBI and EEF that without such measures carbon reduction policies will result in the ‘carbon flight’ of energy intensive industrial players from the UK, to more competitive industrial environments. Government will formulate policy for the EII in September 2012 once sufficient evidence has been gathered and the package is due to be implemented in Spring 2013.


Manufacturing P ha r maceutical French drugmaker Sanofi Aventis announced plans to close its plant in Fawdon, North East England in mid March. The company said the site, which makes drugs such as the blood-thinner Plavix, is set to close by 2015 resulting in the loss of around 450 jobs. Despite global sales growth of 4.8% in Q4 2011, annual sales of Plavix fell by 2.1% year-on-year to €2bn. The pharmaceutical sector has been hit by European health spending cuts and the greater risks of bringing new products to market. Pharmaceutical manufacturer GlaxoSmithKline announced it will invest £500m in the UK. This investment will include building its first UK factory in around 40 years at its Ulverston site in Cumbria. The new factory is set to cost £350m and, alongside other investments, is hoped to create 1,000 new pharma jobs. The confirmation of this investment came the day after Chancellor George Osborne’s 2012 Budget announcement which included the introduction of patent boxes to reduce the cost of patents in the UK. GSK has acknowledged a direct connection between its investment decision and

An artisit’s impression of GSK’s new factory, planned for completion in 2020

M achine T o o ls The Bristol-based National Composites Centre (NCC) announced the first use of its multi-million pound, twin headed, robotic, Automatic Fibre Placement (AFP) machine last month. Aerospace manufacturers GKN and Airbus joined forces to control the equipment’s debut in a joint research programme focused on the next generation of super-efficient aircraft wings. The new AFP machine offers many different UK industry sectors the opportunity to create more complex, double curved structures with composite materials. The National Composites Centre at the Bristol and Bath Science Park


A ccess t o finance

Mannington Mills, one of the largest flooring companies in the US, recently completed an acquisition of leading UK manufacturer, Amtico International. Coventry-based Amtico holds around 20% of the global market share in synthetic flooring and recently announced plans to repatriate manufacturing from the Far East, which has previously presented challenging cost comparators for UK production. Russel Grizzel, president and CEO of Mannington Mills has assured that UK production will continue under the new ownership and that Amitco’s brand identify will remain intact. Amtico employs around 600 staff globally, including approximately 270 in the West Midlands.

Third generation, family owned SME manufacturer Norbar Torque Tools is to move to a new 170,000 sq ft facility near Banbury after securing £5.7 million of funding from HSBC’s Midlands Commercial Banking team. This money has directly financed Norbar’s acquisition of the new commercial premises, a move which more than tripples its current floor space.

E ducati o n Engineering awarding body EAL celebrated its 20th anniversary in March and was congratulated by Skills Minister John Hayes for its work in encouraging apprenticeship uptake. The Minister made his remarks at EAL’s anniversary celebration in the Houses of Parliament on March 20 where representatives from major employers including BAE Systems, Rolls Royce and Airbus attended to show their support of the organisation. Owned by Semta, EAL reinvests the profits made from its training courses directly into industry development. Over the last 10 years it has reinvested £10 million.


S M E o ptimism Mid-market private equity firm, ECI released the results of its half-yearly growth survey in March. Headline results showed that the majority of SME CEOs (55%) predict double digit growth in the next 12 months and 80% expect at least 6% growth. To support these ambitions 77% of company leaders expect to increase headcount over the coming year. Countering this optimism however, concerns over the ability of supply chains to support growth were common. Forty-two per cent said that a dearth of suitable suppliers to match their ambitions was a worry.

News A e r o space 25,000 jobs will be created in the UK aerospace industry under Lockheed Martin’s programme to build 3,000 F-35 fighter jets. The components for the 3,000-strong fleet of F-35 jets are to be built by around 130 different companies in Britain, before the planes are finally assembled in the United States. The 25,000 jobs will be sustained over a period of around 30 years according Lockheed, and will increase British GDP by a predicted £28.7bn up to 2036.

D efence BAE System’s fifth Type 45 destroyer, Defender, set sail last month from the company’s Scotstoun shipyard to embark on her second and final stage of tests off the west coast of Scotland. The vessel will be officially handed over to the Royal Navy later this year. During 28 days at sea, Defender will undertake a series of trials testing the ship’s power and propulsion, combat systems and navigational and communications equipment.

A ccess t o finance Manchester-based Renold plc, the leading precision engineering group, has extended its financing facility with a banking consortium led by Royal Bank of Scotland Corporate & Institutional Banking (RBS CIB) through to June 2013. The £35m funding package, which is also supported by commercial finance firm, Fortis, will be used to fund working capital as well as an international expansion strategy. Renold specialises in the manufacture of industrial chains and related power transmission products.

E ne r g y Siemens last month awarded a £multi million contract to south Wales-based firm Mabey Bridge to build the towers for 15 new 2.3MW turbines bound for the Mynydd y Betws wind farm in Carmarthenshire. Siemens will supply, transport, install and commission the two-section 63-metrehigh, 105 tonne towers for local developer, Cambrian Renewable Energy Limited (CREL). The wind turbines will stand 110 metres tall, and achieve an installed capacity of up to 34.5MW. The project will generate electricity to power approximately 18,250 households.

Datesfor yourdiary April


The latest in manufacturing technologies will be on show at MACH 2012 at the NEC in Birmingham. Visit for more information about the machine tool showcase, or call Graham Dewhurst on 020 7298 6400 to discuss exhibiting.


Co-located with MACH, DFA Media is hosting four engineering exhibitions with accompanying seminar programmes. Drives & Controls 2012, The International Fluid Power Exhibition (IFPEX) and Air-Tec 2012 will all return to the Birmingham NEC, while a new show, Plant & Asset Management, will make its debut. Visit to find out more.


Also co-located at the MACH exhibition held at the NEC in Birmingham are Electrex and Independent Power Energy and Electricity (IPEE), the UK’s showcase exhibitions for the electrical industry. Visit and for more details.


“When Lean programmes fail, the reasons nearly always relate to people,” is the point made by an interactive workshop based on the Staying Lean publication by Professor Peter Hines. This event is number two in a series called Staying Lean, Thriving not just Surviving, and will focus on the Manufacturing and Engineering sector. Email Jo Maniatt at


The free event Automation University is coming to Edgbaston Stadium, Birmingham. Hosted by Rockwell Automation, the event will offer multiple hands-on labs, live demos, seminars and industry sessions – bringing together solutions and specialists. Go to special for additional info contact Andrea Burt via email, or phone 01908 839 574


Health & Safety Reform 2012: Reducing the Burden of Red Tape, is set to take place at The Barbican, London. It plans to discuss the Löfstedt Review’s proposals for change and its impact on how regulations are implemented. Email Laura Lyons at or call 01782 613924



The Institution of Mechanical Engineers (IMECHE) is hosting a set of advanced TRIZ problem-solving workshops, which aims to get people to work through mental block and become systematically creative. More information can be found at The contact for this event is Emma Fox at 020 7973 1291 or email


For three years The Manufacturer’s ERP Connect has changed the way UK manufacturers approach software selection by minimising the overall time and effort involved in qualifying potential Enterprise Software vendors. This event is set to take place at Ansty Hall Hotel, Coventry, bringing together best practice from across the world. For further details contact Benn Walsh on 0207 401 7485 or email


Co-located with the highly successful MEDTEC UK (medical device technology), Mtec (sensors, measurement and instrumentation) and the 3C (contamination control and cleanroom products) shows, Midlands Design & Manufacturing at the NEC in Birmingham is a new event focusing on the end-to-end manufacturing cycle. Visit for more info.

For all of the latest news in the manufacturing world visit


ManufacturingAppointments UK Appointments Joe Devitt Crown Paints

Crown Paints has appointed Joe Devitt as managing director, with former chief executive Brian Davidson assuming the role of chairman. Mr Devitt, currently group commercial director, has worked at Crown Paints for over 20 years holding previous

commercial roles as well as spending four years on the main board. He said: “Following our successful sale to Hempel, we have continued to grow market share against a flat market and I am looking forward to leading the business in our future growth strategy.”

Keith Newton The Chartered Institute of Logistics and Transport International

Kraft Foods senior logistics director, Keith Newton, was appointed secretary general of The Chartered Institute of Logistics and Transport International. He takes up the position from May 1st, in succession to interim secretary general Colm Holmes. Mr

Newton will lead the continuing development and growth of the Institute on a global basis. The international movement is represented in the United Kingdom by The Chartered Institute of Logistics and Transport (UK) based at Corby, Northants.

Rajkumar Roy EPSRC

Professor Rajkumar Roy was made head of manufacturing and materials, director of the EPSRC Centre for Innovative Manufacturing in Through-life Engineering Services, hosted at Cranfield University. Prior to this, he founded and led the Decision

Engineering Centre for over 10 years. Professor Roy has published 58 journal papers and over 120 conference papers. He has successfully supervised 19 PhD thesis and is currently supervising a further 9 PhD researchers jointly with other colleagues.

Martyn Wiltshire SGS Carbide Tool

Martyn Wiltshire has been appointed by SGS Carbide Tool as area sales engineer for the South West of England and Wales. As part of his role, Mr Wiltshire will spend a lot of time directly with customers, where his knowledge and experience can be applied to the cutting parameters that SGS’s tools are capable of,

generating improvements in cutting tool life expectancy and significant reductions in machining cycle times. Wiltshire previously spent six years working as a production engineer in Texas, before moving back to the UK and joining cutting tool specialist WNT first, and Mitsubishi Carbide later.

After spending over 20 years with Semta, chief executive Philip Whiteman will retire at the end of May. The announcement comes at a time of change for the Sector Skills Council, which recently secured a £5m investment from the UK Commission for Employment to help supply chain firms, particularly SMEs, to increase their efforts in supporting skills and their intake of apprentices. Mitie Asset Management appointed Delvin Lane as director of the industrial sector division. Business development director Peter Abbot said: “Delvin brings a wealth of experience from both the Carbon Trust and British Gas Business where he was responsible for creating innovative financial solutions for the provision of low carbon assets. Delvin’s experience will kick start Mitie Asset Management’s commitment to support manufacturing organisations in reducing costs and carbon emissions.” At the Government’s Manufacturing Council, business secretary Vince Cable announced that Sir Richard Lapthorne, chairman of Cable and Wireless Communications plc, has been appointed as chair of the Lead Expert Group for the Foresight Future of Manufacturing Project, a two-year project investigating the long term future of manufacturing.


International Appointments Hirooki Fujiwara has become chairman of Toyota Material Handling Europe AB, following the retirement of Christer Högberg after a 22-year career. Mr Fujiwara, now vice chairman of TMHE AB, is a graduate from Hitotsubashi University. He joined Toyota Motor Corporation in 1981 and gained a broad overseas experience working in Indonesia, China and Europe. In 2011 he joined Toyota Industries Corporation as operating officer TICO and then in June 2011 was appointed vice chairman of TMHE based in Sweden.

Cosworth Americas appointed Brad Otoupalik as vice president of sales, motorsport and performance parts, and Nicole Armbrustmacher as director of marketing. Mr Otoupalik has over 14 years of experience in the automotive industry. Prior to joining Cosworth, he developed and managed a successful BMW motorsports/racing programme. Ms Armbrustmacher comes to Cosworth with eight years of marketing experience in high-tech B2B and consumer B2C markets. During this time she optimised marketing activities and identified market-driven product opportunities while building brand awareness and increasing sales lead generation.

To notify The Manufacturer of your company’s appointments, please contact Roberto Priolo at: or: 0207 401 6033

PLAYING MUSIC IN THE WORKPLACE? MAKE SURE YOU’RE LICENSED. If you are playing recorded music in the workplace, including offices and factories, it is a legal requirement to obtain the correct music licences.

Music is good for business – the simple act of turning music on can make a huge difference to productivity and sales. 2 in 3 employees were more motivated in workplaces that played music versus those that don’t.* PPL and PRS for Music offer music licensing solutions for businesses that play recorded music in public – in most instances a licence from both organisations will be required. A PPL licence can cost your business as little as 19p per day,† for more information on how to obtain your PPL licence visit or call 020 7534 1095. For more information on PRS for Music, visit To find out more about how music can work for your business visit *MusicWorks survey of 2000 people, conducted March 2009. † If you play recorded music in your business without obtaining a PPL music licence you could incur a 50% surcharge on your PPL licensing fee.

01430 PPL Ad The Manufacturer [Factories] Quarter page.indd 1

12/03/2012 14:20


Monthly columns



Parentalguidance Dr Tim Minshall, senior lecturer in technology management at Cambridge University’s Institute for Manufacturing asks if arming parents with better information about engineering might address the sector’s skills shortfall.


recent survey, conducted by Siemens and WorldSkills International, of 11-14 year-old children revealed that most of them thought engineering is boring, dirty and not important. Eighty three per cent of parents meanwhile, would encourage their children into engineering, a figure which might have been higher if three-quarters did not feel they had insufficient access to information to allow them to advise on a career in engineering. This is really worrying. Engineers play a critical role in a balanced economy but if parents can’t explain and enthuse about what engineers do, children are less likely to consider the career option. There is actually a huge amount of information available for parents and teachers on engineering as a career. Websites such as ‘Tomorrow’s Engineers’ (www.tomorrowsengineers. and the National STEM Centre (www. uk) are excellent resources. Nonetheless, the message doesn’t seem to be getting through. We need to do more. One approach that is being experimented with in Cambridge is to have a


simple, standard talk on engineering delivered in schools by parents who are engineers, and current engineering undergraduates. The talk is structured around 10 words to illustrate what it is that engineers do. A short video clip, a quick story, or a practical exercise then illustrates each word. The words are: Invent; Do; Improve; Share, Shape; Build; Why? Yes! Oops! and Wow! For example, ‘Shape’ can be illustrated by getting children to build plasticine models of cartoon characters, and then showing how this activity relates to deformation and additive and subtractive processes used to make blades in gas turbines. By keeping the material simple, structured and engaging, engineering is not being ‘dumbed down’ but rather made relevant to the target age group. And the material is delivered by someone children can identify to their own parents should they be inspired to want to know more. Ensuring accessibility of career information for children and parents alike is key. For more information contact Dr Tim Minshall: people

EEF’s chief executive, Terry Scuoler catalogues the benefits so far achieved by government’s Employment Law Review and says Europe should follow Britain’s lead.


n the last few weeks, we have seen announcements on the progress that government is making to reduce the cost of doing business in Britain. It appears the tide has begun to turn but, largely, businesses are yet to benefit and while progress here is good news, it throws the unremitting flow of new regulation from Europe into the sharp relief. The latest update on government’s one-in-oneout approach shows that for the third successive six month period, there has been a net reduction in the burden of regulation coming from the UK. Cumulatively, the cost of regulation has fallen by £3bn The and the Employment Law eurozone crisis Review continues to look at is causing ways to make labour markets governments more flexible. in countries So far we have seen like Italy and government focus on reforming Spain to start Employment Tribunals and reforming their reviewing TUPE and Collective labour markets, but the European Redundancy rules. Going forward we have great hopes for the Commission’s idea to legislate for protected work conversations. These would allow programme still employers to discuss issues such looks bulky as performance or retirement informally, without the risk of this triggering discrimination claims. Behind the scenes in Whitehall, a relatively unknown body – the Regulatory Policy Committee (RPC) – is now doing good work in applying a traffic light system to government impact assessments on proposed changes in regulation. The RPC’s latest report shows that the rigour of these assessments is improving but that there is still a long way to go – only 31% of impact assessments in the latest period got a green light. We believe that the time is right to highlight this by allowing the RPC to publish all its final assessments. But what about Europe? The eurozone crisis is causing governments in countries like Italy and Spain to start reforming their labour markets, but the European Commission’s work programme still looks bulky. Our approach to regulation may not be perfect but Brussels needs to learn from Britain. Efforts there should focus on: reducing the total cost of regulation, improving the assessment of new regulation and increasing scrutiny of new proposals. It is up to our government to make the case for a new approach in Europe and EEF will be pressing hard for this.

Back to Scuoler is in an abridged format. For the full version go to


e h t u o y e ar e c i f f o t x e n ? o r e h r e p u s


...and he thought about all the excuses he had been given for late freight:







and found only one...





Thelegallowdown Selling your company

is your house in order? Company sale prices in the manufacturing sector in the first quarter of 2012 showed steady improvement. While prices will take many years, perhaps even a decade, to fully recover the form seen in the good old days of 2006/7, it may now be time to consider getting your house in order for future sale. Due diligence One of the first processes involved in a company sale is due diligence, an exercise of corporate “show and tell”. A prospective buyer will want to request a host of details and documents from you, not least of which includes accounts, budgets and forecasts. If you were looking to sell your company at this moment, how well prepared would you be? Would there be any potential skeletons to uncover? Presenting well ordered documents in a professional manner with any “gaps” closed sets the tone for the transaction, saves time and thereby increases the likelihood of getting to completion.

Commercial agreements Usually a buyer will expect to see copies of all key agreements relating to the company. If some of those agreements are due to expire in the short term, the buyer may wish for you to negotiate an extension or a new agreement. A potential buyer may even wish to visit some of the company’s key clients to discuss future potential and perhaps even assist in some of your contract negotiations. You must, however, be sure to have a confidentiality or non-disclosure agreement in place before you entertain allowing a potential buyer to see any of your documents or become involved in your customer or supplier relationships. A point to remember is that client relationships equal potential revenue. A buyer will be looking beyond the purchase of a company and into the future, so securing the future as early as possible is critical.

Intellectual Property Rights Perhaps your operation has a patent or trade mark. Has it been properly registered? Has it expired or is due to expire in the short term? Has a third party been using your intellectual property illegally? These are all questions a buyer will want to ask in order to find out whether there are any potential ‘nasties’


Top tips In order to get ahead and maximise the value of your company for sale you should:

A point to remember is that client relationships equal potential revenue. A buyer will be looking beyond the purchase of a company and into the future, so securing the future as early as possible is critical Hayley Bevis, Thomas Eggar

maximise potential opportunities which could ultimately lead to an addition to your bottom line keep as much order in your paper work as possible tie up any loose ends conduct a full review of your business before embarking on the sale process. It is important to keep one eye on what you would be looking for if you were a buyer. The chances are that others would look for the same as you.

lurking and to view the company’s worth in terms of the value of those intangible assets. If your company has a good name or manufactures an innovative product, you may wish to consider exploring registering a trade mark, patent or registered design right. The difference it can make to your company’s balance sheet, if done in the right way, can be seen as added value to a potential buyer. Do not forget about domain names. Again, these can be extremely valuable to a potential buyer, if only to stop competitors from buying them. You may want to take your company name or trade mark and check whether you can register any other domain names such as .biz or .net and explore registering possible strings or variances of your company name or trade mark.

For more details please contact Hayley Bevis, solicitor, or 023 8083 1208

Monthly columns

Thenaked engineer: stripping industry issues bare A lift to Twickers NE recounts ‘a day in the life’ of battling spurious business regulation


ob called for you earlier,” says my PA as I walk in second thing – much the same as first thing, but apparently deserving of disapproving looks, particularly if you have filled the last remaining parking space, which is disabled, in your lateness. I placate my conscience with the thought that we have no disabled employees and have never had a disabled visitor at our site in over a decade – I’ll move the car if one materialises. “What does he want?” I ask. “Something about a lift” she replies, with a thinly disguised subtext of: ‘Why the hell don’t you just ring him and find out.’ Lovely lady my PA. I obediently go and call Bob. Bob’s the property developer building our new first floor engineering design labs. We would call him Bob the Builder, except he’s six feet four and built like a Russian outhouse. “There’s a problem with building control,” says Bob. “They won’t agree the access statement for the new labs. Something about the Disability Discrimination Act. You have to have a lift they say.” The heroic manner in which he refrained from saying ‘I bloody well told you so’ should be commended here. I call building control while thinking; we have a fork lift and a pallet - what could possibly go wrong? The upshot is that, apparently, I should be spending £40k of my share-holders hard-earned English pounds on a lift, just in case, on the offchance that is, that we ever have a disabled visitor who gets sniffy about having to drink tea with the ground floor proletariat. Feeling increasingly like a switch board operator I call Jimmy, our finance director and explain the situation. Jimmy’s carefully contained rugby fanatic core is tortured. “£40k would buy a box at Twickenham next season. Don’t these people have any soul?” It seems a fair question.

To cut a long story short; after lots of digging on the interweb – by my PA of course, not me – I eventually found myself with a pile of closely typed pages headed “Disability Discrimination Act,” issued by the Department of Fatty Prescott. After scrutinising this opus thoroughly I hail for our ‘Greek,’ the perturbed Jimmy. “Look at this” I cry. “It says here someone actually has to have been disadvantaged before you make alterations to the building. That means Mr Building ‘bloody jobsworth’ Control can’t actually make us put in a lift for no good reason. Whaddya think? Can we avoid this?” I know Jimmy can’t think after lunch so I was only asking to annoy him, I wasn’t really interested in his opinion. A short while later I am contentedly reading over a three page letter of my own devising to the Chief Jobsworth Officer in Building Control explaining in blunt terms the limitations of what he can demand under the DDA. The delivery of this missive is swiftly followed by a call from the offending office. “Building Control on the phone” yells my PA through the wall. Why we ever had a phone system put in in the first place is sometimes beyond me. “Mr Chief Jobsworth Officer would like a site meeting to discuss your access statement,” says an obviously very junior jobsworth. I reluctantly agree to next Tuesday, 11.00am which eventually arrives slightly before I do. Mr Chief Jobsworth Officer is waiting in my office. “We see your point,” intones Chief Jobsworth in an annoyingly adenoidal manner, “but this and that blah blah blah”. He pulls out some incredible civil service double speak worthy of Sir Humphrey himself but eventually I detect his meaning. “So I don’t have to put a lift in then?” I ask. “Errr, no” he replies. “Ok, thank you and goodbye” I say, only slightly intentionally letting my office door swing into his groin in vengeance for the hours of wasted time. But I don’t dwell on the negatives. I have triumphed after all and this deserves celebration. “Call Twickenham hospitality for me!” I yell to my PA.

Have your say at


Waste not,

want not

Finding alternatives to landfill for many kinds of waste is far from a pipe dream. Manufacturers, retail chains and local councils frequently wax lyrical about their ‘zero waste to landfill’ achievements. But are these feel good stories simply obscuring the fact that recycling potential for many reusable materials is far from being met for UK manufacturers? Tim Brown investigates.

The granulation line at recycled plastics manufacturer, Luxus

We do find that we deal with quite a few waste sources that people have thought in the past they weren’t able to do anything with Terry Burton, Technical Manager, Luxus


f you look at the organisations proudly waving the zero waste to landfill (ZWTL) flag, one thing stands out – the vast majority are in the food industry. At the end of February this year, United Biscuits announced that it had become the first major food manufacturer in the UK to achieve ZWTL across all of its 16 UK sites including its UK factories, distribution centre and administrative offices. The company, which produces much loved brands such as McVitie’s, McCoy’s, Jacob’s, Carr’s, and KP Nuts, accomplished ZWTL in December. At the time the chair of United Biscuits Sustainability Committee, COO Jeff van der Eems, described the achievement as a “fantastic milestone” with the company saving 9,000 tonnes of waste being sent to landfill in six years.

Food glorious food While United Biscuits is the first to claim the zero waste goal


across such a large number of sites, other manufacturing companies including Kraft, Pepsi and Birdseye along with retailer Sainsbury’s all have significant drives in process to reduce or eliminate the amount of waste being sent to landfill. But why is it that, largely, only members of the food industry have been able meet this milestone, and why now? The obvious reason is that food waste is much easier to deal with than many other forms of rubbish and that, contrary to common belief, sending food to landfill is incredibly damaging to the environment. According to Tristram Stuart, author of the book Waste: Uncovering the Global Food Scandal, rotting food waste in landfill releases methane which is more than 20 times as potent a greenhouse gas as carbon dioxide. Under the EU landfill directive, Britain is obliged to reduce the amount of biodegradable waste going to landfill to 50% of 1995 levels by

Leadstory Waste not, want not

2013. The National Audit Office has warned that Britain is at risk of failing to meet its target, which would result in crippling fines, passed on to local councils, of up to a staggering £1m a day. As a result government has been steadily increasing landfill tax and so, in turn, waste producers are willing to pay for alternative disposal routes. Tens of millions of pounds have been dished out to help build anaerobic digestion plants for example.

Too hard basket So, while higher landfill taxes have driven food waste in the direction of biomass, manufacturers of other goods are left with the options of incineration, recycling or, where applicable, re-manufacturing. Often companies, including United Biscuits, choose to send materials to incineration when they cannot find another solution. The heat from this is used in the manufacture of cement or the generation of electricity. Disposing of materials in incinerators still qualifies a company to claim it is reducing its landfill waste. However, rather than being a long-term solution, the process of incineration is considered by many to be only marginally better than landfill dumping and carries its own environmental problems, including the release of dioxins, acid gases, nitrogen oxide, heavy metals and particulates. When it comes to recycling,

improvements in technology now mean that many mixed waste streams are much easier to sort and recycle. Separated using magnetic, optical or infrared sorting processes, the number of materials that can be successfully recycled is on the up. Yet ask a manufacturer how easy it would be for them to find a waste solutions provider to recycle every waste stream they have and they would likely compare it to climbing Mount Everest. The fact of the matter is that industrial waste streams are often too complex for a single recycler who may be reticent to take on the challenge. Barry Cole, general manager at car seat maker CAB Automotive (see company profile on page 134), says his company finds it difficult to find someone to deal with their waste when a single waste stream might combine foam, metal, leather, vinyl and chemicals. “We’ve been dealing with recycling agents, council departments and you would be amazed how many people are involved but have restrictions on what they can and cannot take.” So where does a company such as CAB Automotive turn? Not so surprisingly in today’s world, Google. With a lot of leg work, the company has had some small wins and uncovered some waste solutions that match perfectly with its waste output. Terry Burton, technical manager at plastic recycling

One of the most difficult things many companies find is when a waste stream they produce is not made from a single material but is combined with several different materials Frank Stevenson, Marketing Director,

Mountains of landfill waste may become a thing of the past as taxes increase - but what are the alternative disposal options and are they any better?

company Luxus, says that Cole’s experience is not unusual but that just because something was historically difficult to deal with it doesn’t mean it still is now. “All you can do is investigate each waste source and you have to spend a little time and effort and probably a little money to see what can be done with it. We do find that we deal with quite a few waste sources that people have thought in the past they weren’t able to do anything with.”

A new waste solution A new website which launched this month, aptly named Zero Waste to Landfill (www.zwtl. net), is aiming to simplify how industrial companies deal with waste and reduce the amount of time required to find suitable, cost effective disposal solutions. Offering the service free of charge, the website has a database of waste disposers and matches enquiries made by waste producers (such as manufacturers) based on the location of the waste, the material type and the quantity being produced. If matches are found, the provides obligation-free quotes directly to the waste producer. Marketing director for, Frank Stevenson, says the company hopes to find solutions for companies looking to more effectively manage their waste streams. But also looks to help companies deal with waste that, up until now they have had little choice but to send to landfill. “One of the most difficult things many companies find is when a waste stream they produce is not made from a single material but is combined with several different materials,” says Stevenson. “In many of these cases, the individual materials are perfectly able to be recycled but it is a matter of finding someone that can split them and deal with each separately. What we hope to offer is a one-stop shop for companies looking to eliminate waste issues.”


Off the floor and out of the loop Multinational carpet maker, Interface Floors, took a different route to managing its most complex waste stream, its finished carpet. Ramon Arratia, sustainability director InterfaceFLOR EMEAI, says that companies shouldn’t just look at how they get rid of their own manufacturing waste but also look at the big picture of how you design your product so that it can be easily dismantled and recycled.


ast year the company decided to bring recycling in-house and invested in a new machine that separates the various materials in carpet. “We installed it in Europe in 2011 and it has a capacity to recycle 600,000m2 per year and maybe we could get it to 2,000,000m2 in the next two

Companies shouldn’t just look at how they get rid of their own manufacturing waste but also look at how to design your product so that it can be easily dismantled and recycled by anyone Ramon Arratia, Sustainability Director, InterfaceFLOR EMEAI


years,” says Mr Arratia. “We sell around 10,000,000m2 per year so we could have, in the near future, the capacity to recycle about 20% of our own carpet.” Carpet is typically made up of nylon yarn which is tufted and then the backing of carpet, which is mainly a limestone and polymer modified bitumen. The purpose-built machine separates these parts. “Not only does this machine allow us to offer our customers a recycling service,” says Arratia, “but it also allows us to deal with our most complex manufacturing waste, which is when the carpet is completed and we have off-cuts or rejects.” Interface sells the yarn back to its supplier to be recycled into new product and uses the backing of the carpet as raw material when making the backing for new carpets. The

material therefore stays in the production process but while Arratia says that the closed loop idea is commendable he admits that it is quite constraining. “It locks you so that you can only make new products from your own old products,” he observes. To overcome this constraint and because Interface’s recycling machine is able to take material from other carpet makers as well Interfaceflor is promoting the concept of an open loop which is designed to allow other companies to recycle both their own old products as well as those of other people. “Companies shouldn’t just look at how they get rid of their own manufacturing waste but also look at how to design your product so that it can be easily dismantled and recycled by anyone,” says Arratia.

Leadstory Waste not, want not

Watch your waste

How important are the Duty of Care Regulations and what do they mean for businesses?

In this column, Steve Lee, chief executive at the Chartered Institution of Wastes Management (CIWM) provides a whistlestop tour of the main legislation relating to commercial and industrial waste.

Duty of Care is the most basic waste legislation affecting all waste producers. The regime is designed to ensure that waste is properly managed, contained, described, and passed on to an appropriately registered/ permitted person or company so that there is a clear audit trail which protects against waste getting ‘lost’ somewhere in the system and ending up being illegally treated or disposed of. It is supported by the waste carrier, broker and dealer registration system, which is enforced by the Environment Agency. When transferring waste to another party, every business should satisfy itself that the recipient is legitimate by asking to see their Carrier’s Certificate or Environmental Permit.


he really important message is that waste is now, more than ever before, an important bottom-line issue for UK plc. With Landfill Tax set to rise to £80/tonne by 2014/15 waste prevention and recycling can deliver real cost savings. Waste management is also critical to the long term security of your business in terms of raw materials and resources. As I write, Defra has just published the national Resource Security Action Plan and right up front is the acknowledgement that: “Increasing global demand is leading to strains on supplies of some raw materials, such as those found in high-tech, defence and green technologies, contributing to price and supply pressures. This is a concern for many UK companies.” Finally, waste management is also about enhancing your reputation and meeting your customers’ expectations by demonstrating sustainable business practices that give you a competitive edge.

In the main, legislation relating to waste has two primary objectives – protecting the environment and encouraging greater resource efficiency Steve Lee, Chief Executive, CIWM

In the main, legislation relating to waste has two primary objectives – protecting the environment and encouraging greater resource efficiency. The key ones to be aware of are: Duty of Care Regulations and waste carrier, broker and dealer registration system Pre-Treatment Regulations Hazardous Waste Regulations for companies that produce certain types of harmful wastes – e.g. acids, batteries, solvents, healthcare waste etc – that have to be subject to tighter controls Producer Responsibility Regulations, which now cover packaging, batteries, end of life vehicles and waste electrical and electronic equipment Voluntary responsibility deals – as the name indicates these are not regulations but are well worth knowing about and complying with where relevant. The WRAP website ( can offer advice here as well as relevant trade associations. At present, these voluntary deals cover things like construction, retail, and hospitality waste.

What are the PreTreatment Regulations The Pre-Treatment Regulations were introduced to the UK with effect from October 30, 2007 as a provision of the Landfill (England and Wales) (Amendment) Regulations 2005, commonly referred to as the Landfill Directive. They place a duty on waste producers to adopt a more sustainable approach to waste management, to divert it from landfill and move it up the ‘waste hierarchy’. In order of preference, options within the hierarchy consist of: waste reduction, reuse, recycling, energy recovery, disposal (landfill). Implementation of the pretreatment requirement was kept to a simple and ‘light touch’ approach where possible to minimise new burdens on UK business. However, this means that many companies are unaware of the regulations. CIWM believes that better implementation would have helped more companies to realise the often substantial bottom line benefits of adopting more sustainable waste management procedures.


power broker

Paperback writer to

After 167-years of making speciality paper and technical fibres, James Cropper plc cannot afford to sit still in a rapidly changing global industry. Yet even with this weight of responsibility for the family business on his shoulders, chairman Mark Cropper has found time to indulge his other passion - hydroelectric power. Will Stirling interviews.



n Mark Cropper’s modest Portobello Road office there is a map of the Lake District peppered with coloured shapes. Each one marks a hydro-electric power plant in differing stages of development. “Our mission was to lead the renaissance of hydropower in this region. We’re doing that,” says Mr Cropper, chairman of James Cropper plc and managing director of Ellergreen Hydro. A four-year spell funding energy start-ups at corporate financiers Turquoise Associates fuelled his

interest in hydropower. “I became obsessed with it. Compared to other sources of alternative energy, which need millions of pounds and might never work, hydro is extremely efficient and has been around forever. There is a huge amount of unexploited potential in the UK – not least of all in my home, the Lake District.” Ellergreen Hydro has five projects installed and 20 in the pipeline, while other third party projects dot the county. The company has partnered with local engineering company

Interview Mark Cropper, James Cropper plc

“Mark Cropper, chairman of James Cropper and an Industry Champion for the ‘Make it in Great Britain’ campaign, is proud of his company’s brand status, but says that papermaking in the UK is vulnerable after a decade of mill closures in the Noughties. “In the last year I’ve found myself doing more and more government lobbying.”

Someone might say we have a 200-tonne order. So what? Like any manufacturer we must think in terms of margin, not volume Gilkes to install turbines, where Gilkes also implements much larger scale projects in Scotland and abroad. They are nearly all grid-connected and power communities of two up to 550 households. Despite looming drought in parts of England this summer, it’s a thriving miniindustry and Mr Cropper has great ambitions for growth. Sideline would be an inaccurate description of such a concern. But Mark Cropper’s ‘day job’ is chairman to the family firm, James Cropper plc.

Cropper the plc Founded in 1845 when 22-year old Liverpudlian James Cropper came to The Lakes, today the company is a world-leader in making speciality paper, paper conversion and increasingly, the manufacture of technical fibres. The Cropper family was in the thick of the Industrial Revolution, and by the 1840s had sold up much of its business and become philanthropists. Grandson of the family patriarch of this era, young James had no specified career but lots of cash. He fell in love with his first cousin, followed her to Kendall and bought a mill. In fact, Mark adds, the start point to Cropper plc can be traced back to 1753 when a local paper mill was developed, the first time such independence was allowed by the draconian paper barons. Over 167-years, through wars and recessions, and over many generations of Croppers, Willinks (extended family), white and blue collar employees’ families, the company is today a hidden gem of British manufacturing. With an annual turnover of £86.8 million in 2011 and 55% owned by “family and friends”, it is a prime example of the UK’s own Mittelstand of large family-owned manufacturers which fight hard to operate in global markets and which support whole communities. When an eminent historian was commissioned to write the company history but failed to deliver, Mark Cropper stepped in to the breach. The result, ‘The Leaves We Write On’, painstakingly puts the genesis of the company and papermaking into its historical context. “There was a huge crisis in the British papermaking industry after James bought the mill,” says Mr Cropper. “As it became more mechanised, the availability of raw materials – mainly linen and cotton rags – couldn’t keep up with demand. From the mid-1870s to early 1900s, the processes to make paper from wood fibre had been developed but this period was very tough.”

The ‘rag crisis’ was serious and The Times newspaper even offered a reward for a solution. “We solved it because we were very entrepreneurial; using material like hessian sacks,” Cropper says. “We weren’t able to make a fine, white paper so we added dye to it, which is how we got into coloured paper. Like all good company developments you respond to your environment.” This specialisation was the first of two key developments in the Cropper company story. Changes in the raw commodity drove the next change. Paper needs wood pulp, a cyclical commodity. “The main reason we have survived is that the board recognised in the late ‘80s that papermaking alone was too volatile and we needed to diversify,” Cropper says. While all the pulp comes from sustainable sources, “there is a new paradigm in buying practices now” he says. “The Chinese strategically purchase large quantities, manipulating the market.” Until the 1950s, British papermaking had been isolated. This fragmented, old school industry got a nasty shock when Britain joined the European Free Trade Area and was introduced to the Nordic block’s modern processes. “Suddenly it was exposed to huge Scandinavian plants, where trees went in at one end and paper came out the other,” Cropper says. “It was disastrous, a huge block was wiped out.” From the mid-1960s to 1970s many mills closed. The 1990s were not as bad but the last decade has seen many more closures. “This is why in the last year I’ve found myself doing more and more government lobbying.” Essential changes followed: the business modernised then diversified. “Between £40m-£50m was spent, mainly through the 1980s, on renewing the whole business – mills, capital equipment, new treatment processes. Since then we have


an average capex spend of £3 million a year.” The company strategy, Cropper says, has always been to reinvest heavily in the business. It is publically listed on the AIM market, but “the majority shareholding is family, which clearly helps a lot when reinvesting.” Two new businesses were established, and both have been essential to keep Cropper plc in the global paper chain. James Cropper Converting applies a vast range of finishes to the raw coloured paper – sticking, embossing, impregnating, surface finishing. Paper samples in his office feel like silk, another like

rubber. Cropper is a world leader in picture mount board. “Most of it is chemically inert to museum quality,” says Mark. It also makes the highest quality digital grade paper, and fire retardant board was developed after the Kings Cross rail disaster. “We try to do it all – but an identifiable trend across the business is that we push the boundaries of what paper can do.” The second new business, Technical Fibres, was born out of the scientific leanings of two board directors. “They snuck off into the laboratory one night and experimented with carbon fibre,” Cropper says. The key

Biography Mark Cropper 1996:

University of Edinburgh, MA in English Literature


Joins Johnson Matthey and researches the fuel cell industry.


Writes and publishes Cropper plc’s history, The Leaves We Write On


Joins corporate financiers Turquoise Associates. Raises capital for new energy start-ups and establishes Turquoise Capital.


Joins the board of James Cropper plc


Becomes chairman, James Cropper plc

Son of Sir James Cropper KCRVO, Lord Lieutenant of Cumbria, who he succeeded as chairman of James Cropper plc in 2010. Mark is managing director of Ellergreen Hydro, a hydro-electric project developer and a director of Ellergreen, Ellergreen Tidal and Logan Gill Hydro. He is an industry champion for the “Make it in Great Britain” campaign. Mark splits his time between the paper mills in Burneside and his London office. He is married and has two children.


achievement was to make the material bond. “The results that returned from analysis were amazing. This stuff absorbs electromagnetic interference, radar – it has many properties.” The next big step was in the late-1980s, when the company invented a machine to make these products at scale. “This is a much lower volume, higher margin business than paper. There are very interesting applications for surface finishing in aerospace, automotive, fire protection – any industry that uses composites.”

Cropper the man At 37, Mark Cropper is young to chair a large company. Was the job an inevitable birth right? “I was fortunate. My father never put pressure on me to join the business. Not all family businesses are so liberal,” he says. After dabbling in journalism, he joined chemicals company Johnson Matthey, a supplier to Cropper plc, which was investigating fuel cell technology. He formed a small research team to investigate the fuel cell industry’s trajectory. “We rapidly became global experts, travelling the world and talking to the main players. Within a year we were asked to speak at conferences – within a few months of that we chaired the conferences. It was great!” After three years, he contacted a corporate finance company for some career advice. “The MD said “Could you win us some business [in fuel cell technology]?” Thereafter I made it my job to meet the CEO not the junior scientist at these firms. I won them some good business and joined the company, then set up an arm called Turquoise Capital. I couldn’t have done anything I’ve done since then without that grounding, particularly when you are raising money for energy start-ups and writing business plans.” In spite, or perhaps because of the family company inheritance, Mark Cropper is a realist and

Interview Mark Cropper, James Cropper plc

a shrewd businessman. “This whole story is very nice. We employ 550 people, we have world class products and world class customers. But the truth is we have a huge task ahead of us. There are big opportunities too, but we have to become much more profitable – it’s a fact, not a choice. If you analyse our inflation-adjusted performance over the last 20-years, as I have, we’ve kept our head above water but we’re treading a tightrope, like a lot of manufacturers I’m sure.” The plan, he says, is to develop each business division but be open-minded about what part is profitable as the market changes. “Someone might say we have a 200-tonne order. So what? Like any manufacturer we must think in terms of margin, not volume.”

The power of brand, and championing industry By the 2000s, Cropper plc had many virtues and a strong name. But, to compete globally, Mark knew it needed a bigger commercial push. “The leanness of our operations had received devoted management attention for decades. But we haven’t been very commercial. The paper business only recruited

A hand-made sheet of paper being produced for a colour match request in the technical laboratory

Our story is a great one, but the truth is we have a huge task ahead of us. There are big opportunities too, but we have to become much more profitable

a marketing manager two years ago.” Today each division has a dedicated marketing manager. Joining luxury brand association Walpole opened his eyes to brand leverage opportunities. “As a member of Walpole, global brands ask you; ‘if you were a big brand, what would be your story?’ Actually, it would be bloody great! We’re a seriously old school British manufacturer, still here after many tough years. The biggest employer in our region, with generations of the same families in every part of business, making something this is really interesting and special as well.” Mark Cropper has become an Industry Champion within the ‘Make it in Great Britain’ campaign run by BIS. Already an old hand at linking business to the community and young people, the appointment reflects his passion for sustaining his own company in the UK, and for wider manufacturing. “I want to get more involved in the [manufacturing] agenda. Companies like ours have a duty of care to safeguard manufacturing for the future, which it can if we adjust to the world. There are huge opportunities and no reason to miss them.”

Blender colourants being adds to paper pulp

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60 second Interview

60 second from an even older engineering heritage. The aerospace industry on the island developed around the growing industry in the UK and the need for companies to expand and put their businesses in places that had a willing and enthused workforce.

talks about the Isle of Man Aerospace Cluster with Adrian Moore, chairman and founder of the collaborative industry group. Who is involved in the Isle of Man Aerospace Cluster and what is its purpose? The Aerospace Cluster has eighteen companies at the moment and those companies employ and support around 1000 jobs on the island. What we are doing is aspiring to world class. Aerospace is a world class industry and the standards that we work to are probably the best in terms of engineering and manufacturing. We are also trying to pass on the knowledge in the core aerospace cluster out into the wider supply chain on the island. Why has a focused interest in the aerospace industry developed on the Isle of Man? The Aerospace Cluster on the Isle of Man is not a new thing. We’ve had an aerospace industry on the Isle of Man for about 60 years. It has grown


Are there any particular challenges which face companies on the Isle of Man? The challenges on the island are very similar to the rest of the UK. One of the main challenges is getting young people enthused about engineering and manufacturing as a career. We’re doing a great deal here to try and solve that and have a unique situation given the size of the island which makes it easier to network and reach out to schools, colleges, teachers and parents. We have a programme called Awareness of Careers in Engineering which has reached 8,000 students in four years. In terms of other challenges, we are pretty dependent on how the global order books perform but, as we have seen, there is a huge amount of work out there at the moment. The primes are projecting enormous rate increases on build for aircraft and we’re involved in just about every civil and military programme in the world at the moment so it is looking good for us. Where do the Isle of Man Aerospace companies sit in the global aerospace supply chain? We’ve got a real mix. We’re right at the top in terms of design with companies like Assystem who are designing for the likes of Airbus, BAE Systems

The primes are projecting enormous rate increases on build for aircraft and we’re involved in just about every civil and military programme in the world Adrian Moore, chairman and founder of the Isle of Man Aerospace Cluster

and Bombardier. There are a number of other companies here that sit right across the supply chains; sometimes they are primes or at least tier ones and preferred suppliers to the main airframe and engine manufacturers. And then we’ve got companies going down into the second, third and even fourth tier companies as well as service companies that supply into the aerospace industry. How can the UK aerospace industry remain ahead of the curve in terms of challenges from global competition? Where Britain and the Isle of Man will win against the global competition is by proving excellence and value for money. We have a great heritage for engineering, particularly in the aerospace industry and that is not something you can acquire overnight or even buy. We launched a programme here called Journey to Process Excellence, which is Rolls-Royce’s own business improvement tool. It allows the cluster businesses to measure against the Rolls-Royce world class model and then put in place business improvement plans to take themselves to this world class standard. This programme and other similar ones, such as SC21 and ASCE, are going to be key for the UK to be able to stay ahead of the curve.


symbols Will Butler-Adams MD, Brompton Bicycles I have been to a lot of schools and had schools into our factory. I have spoken with children, teachers and parents, and I have found that there is a broad misunderstanding of the term engineer. Not to do anything about this now would represent a missed opportunity. There is a real political focus at the moment on rebalancing the economy and there is a chance that this momentum would give us that conditions we need to grasp this nettle. The first step in changing misconception about the status of engineering is simply to not allow a plumber or AA mechanic to assume the term. A nurse could not call themselves a doctor. This is no derogation of what those people do – the guy who fixed my car from the AA the other day was a legend – but he was not an engineer. This is not about elitism in terms of university education. There may be many routes to becoming a registered engineer and studying engineering at university should not qualify you. Many of my university contemporaries went off into financial services and they should not be considered engineers today any more than someone who studied medicine but did not practice should be considered a doctor. I don’t believe that the common use of the word engineer in the English language is too far gone to achieve the kind of change I am talking about – it is only in the last 25 years that the term has become so vague. At the start of my career it seemed everyone had a different and very narrowly defined job title. There were laggers, fitters, tiffies, riggers. Back then naming what you did was terribly important and none of these people would have wanted to call themselves engineers – it wasn’t their job. I’m not proposing we return to that but I do think there is a role for here for the Engineering Council in defining and regulating who can call themselves an engineer.


grapples with the sensitive issue of respect for engineering professionals in the UK. What bearing do public perceptions of the profession have on the fate of manufacturing and can we regulate the application of the term ‘engineer’?


t’s unlikely to come as a surprise to many of TM’s readers that the status attached to the word ‘engineer’ in the mind of Joe Public is something of a sore issue in manufacturing circles. At EEF’s National Manufacturing Conference (p84) in March the problem posed by ‘oily rag’ perceptions of engineering struck a chord with delegates and in February our Naked Engineer complained that the term has become abused by service centres and tradesmen. Overall there seems to be a growing feeling that a redefinition of what exactly an engineer is, is long overdue. Here we speak to industry leaders and professional institutions representing manufacturers and engineers about their feelings on the status of ‘engineers’ in the UK and the practical steps which might be taken to alter it.

Leadership in manufacturing

David Fox Chairman and CEO, Power Panels I am a great supporter of the idea of reclaiming the word ‘engineer’ and I do believe that the use of the word should be protected. I am not a chartered engineer – I am a companion of IMechE – but I do believe that now is the time to revisit the issue of how we qualify who is an engineer. I think an element of elitism in doing this is justified. Just look at the relative respect and pay scales that engineers in Germany receive. Pay for engineering roles in the UK is reflective of the disregard in which they are held.

The first step in changing misconception about the status of engineering is simply to not allow a plumber or AA mechanic to assume the term. A nurse could not call themselves a doctor Will Butler-Adams, MD, Brompton Bicycles

There has been a general trend for job roles to become very vague. I think this is linked to the development of an out of proportion focus on CV writing in the process of getting a job – it has encouraged everyone to talk-up their experience on paper and imply levels of experience they do not actually have. If we are to redefine what it means to be an engineer – and I think it is essential we do so as part of the current resurgence of manufacturing – then we must make it illegal for people to pose as one.

Chris Mulvihil MD, EMS Manufacturing We need to return to a stage where the word engineer stands for an appropriately qualified person practicing in certain specific roles within our manufacturing community. I think that clarifying this definition would galvanise the manufacturing community, highlighting the broad church of engineering specialism the industry has to offer, from design and development through systems engineering and more. These might be considered as equivalent to medical specialisms in dermatology, heart surgery, neurology and so on. One specialist here will know relatively little about another area but together there is a profession that is respected and which young people look up to. By reclaiming and ‘professionalising’ the word engineer we could raise the profile of manufacturing as a genuine career area. I’m reluctant to advocate a kind of appellation controlee approach to the use of the word. But if we are going to make a difference I find it hard to believe that we can avoid legislative intervention in the use of the title. I think those that say we can simply leverage chartered status to achieve the professionalisation effect are missing the point. I am a chartered engineer and very proud of it but this is about defining the wealth creation role of engineering in our society. They have managed it in Germany – why not here?


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Leadership in manufacturing

Statement from the Engineering council

Stephen Tetlow CEO, Institution of Mechanical Engineers

In recognition of the concern being voiced by engineering professionals in the UK over the protection of their status and public perceptions of engineering careers the Engineering Council released the following statement in March this year.

I don’t hold with the argument that calling a plumber an engineer is damaging to the profession. We are where we are with our language. Engineers in the UK should not be bleating on and on about their status, they should be proving their worth to society and that worth is spread wider now than ever before. There has been a blurring of the term but now we see engineering talent being applied in so many sectors to huge value. There are engineers working in all walks of life and all kinds of manufacturing. They are helping make anything from cars to chocolate bars and we have members working for leading supermarkets engineering retail systems and working in hospitals too. The important element in protecting the professional status of engineering is to recognise the thoroughly regulated and licensed standards of the Engineering Council. In these standards we are not just talking about chartered status but also incorporated and technician engineer status. These standards have the same logic and benefits behind them for both individuals and employers. Getting these letters after your name sets you apart, for your employer and future employers, as someone with experience, drive, commitment and competence. Those who attain these standards have done more than gain an education. By going through the process of registration, a level of experience and professional development in how to deliver that experience is implicit. These are the only properly licensed national vocational standards anywhere in science engineering and technology. And it is not as though they are not in active use. There are more than half a million registered engineers and technicians working across the nation today.

I’m reluctant to advocate a kind of appellation controlee approach to the use of the word. But if we are going to make a difference I find it hard to believe that we can avoid legislative intervention in the use of the title Chris Mulvihill, MD, EMS Manufacturing

Commonplace use of the word engineer in our language has evolved over many centuries. Hence anyone in the UK may describe themselves as an engineer. This is perhaps regrettable, but seeking to regulate or legislate on the use of a now common term is recognised by the Engineering Council as totally impractical. However, the professional titles of Chartered Engineer (CEng), Incorporated Engineer (IEng), Engineering Technician (EngTech) and ICT Technician (ICTTech) may only be used by those who have been granted these titles through registration with the Engineering Council. These titles attest to the professional competence of their holders and their commitment to professional ethics and practice. They are only awarded to those who can demonstrate, through a process of peer assessment, that they meet the required standards. The Engineering Council, with the Professional Engineering Institutions, keeps these standards under constant review to ensure that they remain valid and are clearly defined. Taken together, these features of our regulatory system provide assurance, serve to protect the public and give confidence to society as a whole. It is upon such recognition that the status of professional engineers and technicians must rest. These professional titles are fully protected under law by means of the Engineering Council’s Royal Charter and Bye-laws; further legislation is thus unnecessary. In order to protect these titles action is taken through the courts against their unauthorised use. Through the European Directive on the Recognition of Professional Qualifications 2005, they are also recognised throughout the European Union. More generally, as a benchmark standard, the titles have a world-wide currency.


Hurdles for Don’t let the Olympics become a Greek tragedy for your business. looks at the challenge of workforce management for this unique sporting event.


elecoms company BT is the official communications partner for the 2012 Olympic and Paralympic Games taking place in London this summer. In addition to providing services to the event itself, BT has taken on responsibility for highlighting just how deep an impact these two events will have on the wider business community in the UK – both in terms of opportunity and potential risks.

At the beginning of 2012 BT released a report titled Race to the line which surveyed around 1,200 UK companies across UK regions. This figure included 12% manufacturers. Top among business concerns in the UK is the issue of workforce management – both in terms of deliberate absenteeism, reduced productivity or simple inability to get to work thanks to traffic disruption. According to Race to the line 40% of companies

Q&A with John Morris, CEO of recruitment agency Jam Recruitment TM: Are manufacturers prepared for Olympics-related workforce issues? JM: The scarcity of talent in the UK is one of the biggest issues affecting UK manufacturers, but come July the scarcity of employees on the shop floor may seem like a more immediately pressing matter. The Olympics won’t just affect businesses in the South East, every employer should be preparing for employee absence and protecting productivity. We haven’t seen many of our manufacturing clients preparing yet. TM: How can manufacturers protect against absenteeism or reduced performance during the Olympics? JM: At the very least employers should be developing a strategy for managing employee absence. Drawing up a one page Olympics Policy, making company rules with regards to issues such as the treatment of Olympic volunteers and suspicious absences obvious is a good idea. As a minimum, employees should be encouraged to submit requests for annual leave now on a first come first served basis.


anticipate problems allowing for extra time off requests, or with staff not being able to get to work. This number was slightly reduced among SME respondents, 33% of which said they were concerned about allowing for time off requests. Despite this level of concern, 30% of companies overall have no plans in place to protect against reduced staff numbers – among SME respondents this figure rose to 46%. canvassed the Against this backdrop opinions of manufacturers, and industry service and technology providers on the potential effect of London 2012 on their operations and asked what steps can be taken to mitigate business risk.

If the nature of your business allows it, it may be worth managing shift working around employee preferences. Taking on additional staff to allow for peaks and troughs in workforce during the Games might be appropriate so employers should be ring-fencing budget for short term recruitment this summer. TM: If manufacturers have no plans in place now, have they left it too late? JM: Absenteeism during the Olympics will be unpredictable. While employers can legislate for those who have requested time off during the summer, how can they predict how many employees are likely to quietly ‘throw sickies’ during events where the UK team perhaps proves unexpectedly successful? The key to ensuring these uncontrollable absences don’t have a negative effect on your business is forward planning by ensuring you have a strategy and budget in place that will help you to mitigate the effects of absenteeism.

Workforce and skills

Automatic for the people

Keep calm and carry on

Simon Macpherson, senior director operations EMEA at workforce management systems vendor, Kronos, says automating is the key to confidence in workforce management. Those that have deployed real time workforce management solutions will be in a much better position to accommodate flexibility and allow for staff preferences for time off – within the realms of your production system. Employee terminals in any good workforce management system will do more than simply log requests and record start and end times. They will act as employee information centres and will support the communication of company policy on the Olympics. Kronos also captures productivity information for individuals and units and sets them against standards – so employers will be able to react quickly to any issues. We often see drops of forty per cent in ‘duvet day’ absenteeism after companies deploy our systems. Implementation of our systems typically takes around three months – so companies we are not working with now have left it too late to expect protection from problems associated with the Olympics through adopting our technology. I stress though, that the benefits of automating workforce management are not only relevant during large sporting events and public holidays. If UK manufacturers want to be competitive then they have got to become more efficient – this includes the way in which they manage HR time as well as production itself.

Getting to know you David Beswick, senior partner specialising in HR at Eversheds LLP, says employers should form employee stakeholder groups now so that the staff sporting preferences can be assessed and likely peaks and troughs in attentiveness forecast.

groups help to highlight important groups who are relatively uninterested and can be leveraged to flex working patterns or act as cover staff.

A number of our clients told us back before the start of the current holiday year, that they were setting up stakeholder committees to understand how they will work through the Olympics. As well as highlighting teams with shared sporting interests and potential related performance issues, these

As long as planning for events like the Olympics – and Euro 2012 which takes place in June – is done in advance most people are happy with business policy decisions. Being ad hoc stirs up resentment. If you have trade unions in you workforce, make sure they are included in stakeholder discussions.

Denying the need to panic over business preparedness for the Olympics Chris Mulvihill, MD of EMS Manufacturing, based in Herne Bay, plays down the concerns of others in this piece. We developed a policy during the last World Cup which we intend to use again during the Olympics. This states clearly that time off must be booked if individuals want to watch sporting events, and that anyone found absent without good reason will be disciplined. Because there are no time differences to be taken into account with the Olympics however, and because there are potentially a lot of different events that might interest people, we have bought a TV license. This way there will be no temptation to stream events on desktop computers. We have enough projectors and screens on site to be able to satisfy a lot of tastes during breaks. Frankly though, unless people have a particular penchant for gymnastics or diving and want to watch a lot of the qualifying rounds, I believe the finals for most high profile events are set for later in the day – so they shouldn’t disrupt our factory working time too badly. I am prepared for shock success for the UK in a particular event however, or simply for higher than anticipated interest. I know it is a once in a lifetime opportunity for people to build an affinity with an international sporting event, which for us is being held no more than eighty miles up the road. So I am prepared to be flexible. If we start getting a lot of requests for time off we will look at implementing extended working hours so that people can watch an event and make up the extra couple of hours at the end of the day.

See for more on the impact of the Olympics on business including supply chain and distribution challenges


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Big bang diary

Following the Big Bang Fair at the Birmingham NEC in March, Paul Jackson, CEO of EngineeringUK and The Big Bang Education CIC, looks back on the event to consider the impact it made on its young audience.


e’ve spent a year of planning, preparing and promoting the careers message which is so central to The Big Bang and through our events and activities we have built a dedicated following. Over 8,000 young people, teachers and parents now ‘like’ us on Facebook and The Big Bang Fair’s Twitter account has over 2,500 followers kept up to date about our activities. On 15-17 March the fair itself finally burst into life for this eager crowd, making the fourth national event the biggest and best yet. With over three days of wall-towall science and engineering shows, activities and workshops, the fair attracted 56,000 visitors, with young people, teachers and parents totaling 49,000 – almost doubling last year’s numbers. Over 150 organisations came together at the fair to let young people see the vast range of exciting opportunities available through science and engineering careers. This represents an unprecedented partnership between government, education, industry and the wider science and engineering communities. The National Science & Engineering Competition Awards Ceremony, held on Friday 16

and hosted by Bang Goes the Theory’s Liz Bonin and Science Junkie Greg Foot, celebrated the achievements of 360 talented young finalists. The Minister of State for Universities and Science, David Willetts, presented the UK Young Engineers of the Year and the UK Young Scientist of the Year with their prizes after they were singled out by a panel of world-class judges, including Dr. Maggie Aderin-Pocock, Nobel Prize-winning biochemist Sir Tim Hunt, and the Science Museum’s Inventor in Residence Mark Champkins. Wasim Miah and Jessica Jones, from St David’s College in Cardiff, were named Young Engineers of the Year for their impressive portable device that combines electronics and mechanics to measure the intensity of foetal contractions, providing a clear and simple indication when mothers are about to go into labour. The UK Young Scientist of the Year, Kirtana Vallabhaneni, from West Kirby Grammar School, was awarded for her ground-breaking work helping to identify the harmful cells that cause pancreatic cancer. The finalists of the competition exhibited their projects over the three days of the fair, and speaking to these young future scientists and engineers has been rewarding and inspirational. It makes me very proud of the fair’s role in showcasing the young talent we have in this country. It’s hard to sum up the unique quality of The Big Bang Fair. If you compared it to a football stadium, we’d be behind only Old Trafford and Arsenal for capacity. To fully appreciate the size of the event and the energy in the programme you really have to see it for yourself. The fair is so much more than a fun day out. It presents science and engineering in a fresh new way and inspires young people to consider careers in these varied and vital sectors. It challenges out-dated perceptions about science

and engineering careers to give young people a real picture of what twenty-first century STEM jobs are all about – and it works. Early evaluation confirms the findings of our previous events: young people who attend the fair are more likely to choose a career that will require a qualification in science, technology, engineering or maths as a result of their visit. Without a doubt, the thousands of young people who come through the fair’s doors will be our future scientists and engineers.

The 2013 Big Bang Fair will take place on 14–16 March at ExCel London and Big Bang Near Me events take place nationwide all year round. For more information go to: There are many ways to support the Big Bang programme as an industry partner or trade body. To find out more, contact Gemma Samlal on: Follow us at:


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f o e e y o l Empmonth the 012 2 April

Adam Kelsey Mechanical Design Engineer, Group Rhodes In the same month as the machine tools industry indulges in MACH, its biggest UK technology exhibition, talks to an up and coming star at Group Rhodes – one of just three manufacturers around the world making Super Plastic Forming presses. TM: What is your role and what are the main responsibilities? I am based within the design department, working as a mechanical design engineer. I ensure that the mechanical design of our Super Plastic Forming/Diffusion bonding presses is produced on schedule, and to the exact requirements of our aerospace customers. I also offer technical support to both, customers and shop floor fitters or machinists throughout project timelines. TM: What are the key skills you use? The correct application of fundamental analytical ‘stress based’ numerical skills to design machinery that is not only safe, but cost effective is probably most important. CAD drafting or modelling are also essential. I use these skills on a daily basis to transfer concept design ideas to manufacturing drawings. TM: What do you consider to be your biggest personal success at the company so far? My biggest personal success was to be selected by the company to enter for the 2011 Manufacturing Industry Awards in the Young Engineer of the Year category. It was an honour to be short listed, and fortunately I was

the winning candidate and picked up my award on the night. However, the icing on the cake was when I also won the AMTRI scholarship award, this was a shock to both me and my company, as we were unaware I was a nominee. TM: What first attracted you to a career in manufacturing? I was always fascinated by how products and components are made. I have always enjoyed the creative side needed for engineering. An added attraction was the opportunity to get involved in many of the high level technologies used in the industry. TM: What are the most rewarding parts of your job? Seeing machinery that I have designed completed and installed for the customer. Being part of the supply chain for some of the most famous blue chip organisations in the aerospace industry is great, as I know I have played a small part in aiding the manufacture of some of the most technically complex machinery in the world. TM: What will your next career move be? I am in my third year of four at Sheffield Hallam University, studying part time for a BEng Honours degree in Mechanical and Computer Aided Engineering. I plan to graduate next year, and go back to study for a masters degree (MEng) while still working at Group Rhodes. TM: Do you have a grand career ambition? At the moment, becoming a professionally registered chartered engineer through my work at Group Rhodes is as far as I have planned. TM: How do you think best to get more young people interested in manufacturing? I believe young people need to be made aware of what projects engineers are currently involved in.

This is best done at school or college, where the maths and science based classes can be tailored to relate to real world problems. When talking to people around my age I have found they generally perceive an engineer to be someone in overalls, and don’t know what he or she would do. Although working in a shop floor environment is a challenging and interesting role, there is also the need for the engineers who supply the engineering solutions. Young people need to be made aware that engineering is an industry that relies on people with high analytical and communication skills to produce solutions that help the world move forward, by using ever advancing technologies.

CV in brief: Adam Kelsey Age: 23


OND HNC Soon to complete BEng

Career to date:

Group Rhodes 2007-Present

Hobbies and interests:

Snowboarding Motorsports

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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

LMJ Lean Leaders Dinner

19:30 to 22:00

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Post Conference Seminars

Full and half day

Thursday 31st May 2012

Post Conference Site Assessment Visits

09:00 to 14:00

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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Special Interest Sessions

New & Unique to 2012

Ideas Exchange Cafe / 29th May

Subscribers Choice / 29th May

Unique to the LMJ’s Annual Conference are special interest sessions in the Ideas Exchange Cafe:

Attendees will be able to meet members of the LMJ Editorial Board, and for the first time we have bought LMJ to life with three of the most popular case studies and articles from 2011 presenting at the conference with our ‘Subscribers Choice’ sessions.

• Informal group discussions focusing on lean topics of special interest to LMJ members. • Designed for the LMJ Community to share your success and struggles with other practitioners. • Enables benchmarking of yourself in each session with a maximum of 20 delegates. • Effective subject area facilitation by subject area experts.

Speakers include:

Conference Chairman

John Bicheno

Dr Pauline Found

Director of MSc Lean Operations / Lean Enterprise Research Centre

Senior Research Associate Cardiff University

Jon Alder

Fraser Wilkinson

Director – Group Lean Enterprise Rexam PLC

Business Improvement Manager Tata Steel Strip Products UK

Understanding your DNA A Decade of Lean Transformation

The Long and Winding Road

Rueben Karuna-Nidh

David Verduyn

Global Head of Lean Deutsche Bank

Founder C2C Solutions Incorporated

To adopt or adapt; that is the question

The Kano Model

Richard Holland

Steven Welch

Managing Director TBM, UK, India & South Africa

Group C.I. and Yogurt Manufacturing Manager, Yeo Valley Production ltd

Dr Nick Rich

Peter Watkins

Associate Dean of the School of Management, Cardiff Metropolitan University

Global Lean Enterprise and Excellence Director, GKN or email

Regulation Update: Payroll law changes in 2013

Payroll law changes


in 2013

From April 2013, a phased introduction of Real Time Information (RTI) will see employers submitting payroll data to HMRC via the centralised registration service for e-Government services in the UK, Government Gateway, on or before payments credit employee’s bank accounts. Ken Davies, director of payroll services at accountancy firm Mitchell Charlesworth explains why the new measures could greatly increase the workload for employers

y October 2013, all employers will have to submit Real Time Information for Payroll. However, due to HMRC roll out strategy employers may find themselves with directives to commence RTI from as early as April 2013. Currently employers are able to issue PAYE information to HMRC at the Payroll Year End using electronic versions of the traditional forms P35 and P60. The new RTI system will require firms to send all payroll data to HMRC via the Government Gateway on or before the date each employee is paid. HMRC have also been floating the idea of employers submitting Online Monthly PAYE Statements to confirm their overall PAYE/National Insurance liability for the month. This would be to ensure that tax offsets against statutory payments such as Statutory Maternity Pay and Statutory Sick Pay are taken into account alongside RTI for Payroll. The changes will mean that, come the 19th or 22nd of the month, HMRC will know exactly how much employers owe them.

Paying by BACS To ensure that payments made to employees match those within the RTI submission, a new system has been devised. For those who pay employees by BACS, a unique cross-reference (hash) will be required to accompany each payment to employees, which will need to be included in the separate RTI submission to HMRC. If payments are made by cash or cheque, then an RTI submission will still be required but without hashes. As BACS deal with around 96% of all payments in the UK, the hash will enable HMRC to corroborate the payroll data submitted against

the payment made to the individual. This corroboration will assist the Department of Work and Pensions (DWP) with administration of Government’s Universal Credit, due to commence October 2013. By providing the DWP with access to the exact details of what earnings, tax and hours of each taxpaying claimant at any given point, the government hopes to reduce the time spent processing claims and prevent the under and over payment of benefits. How can employers prepare for the changes? There are four points businesses should consider: Data Cleansing – submit employee data to HMRC before RTI is live so HMRC can advise of incorrect or incomplete data Improve and Maintain Data Quality – Make sure you obtain dates of birth, use full names and include addresses when employees are entered on your payroll Speak to your payroll software supplier or payroll provider – Make sure they can deliver on Real Time Information Banking – Are you able to use a file your payroll software generates to submit to BACS using your banking facility? Assuming your payroll software

1 2 3 4

is capable of supporting RTI and you are confident with processing payment files generated by your payroll software then you will need to keep an eye out for your On Boarding Date when you are required to file your first submission under RTI.

The effects on employers There is a lot of merit in what HMRC are trying to achieve but there is a disproportionate level of responsibility being placed on employers in a short space of time. Employers may need help getting comfortable with how to submit under RTI or how to import a payment file including hashes from their software instead of keying in individual amounts. The advent of RTI will do away with separate processes for starters and Employer Annual Return Forms P35/P14. HMRC has promised an initital “softly, softly” approach to RTI implementation and applying penalties for non-compliance. Employers should take advantage of this period to gets systems and understanding in place as fines will run up quickly as more On Boarding Dates are issued.


Specialfeature Finance

Keep your friends

Prince Charles visits BCW Engineering in 2008

They dreamed a dream

As they prepare for MACH 2012 BCW Engineering traces a decade of successful asset finance which has taken the business from a twinkle in the eye to a £10m turnover organisation.

When Alec Cassie and Paul Biggs of BCW Engineering walk through the doors of MACH 2012 their thoughts will almost inevitably travel back exactly 10 years to MACH 2002. When they arrived at that exhibition the pair had little more than a basic business plan and the dream of creating a new engineering company, which under prudent management, could grow to become a major force in the UK sub-contract engineering sector.

That dream has come to be a reality. Today BCW Engineering Limited boasts a turnover in excess of £10m. The business has invested over £4m in the latest CNC technology, employs over 100 staff and has won countless awards for technology and innovation. The roots of this fantastic UK manufacturing success story began with a chance meeting at MACH 2002. Cassie and Biggs knew they wanted to move into manufacturing but thought it would be impossible to find



someone to back their plan. That was until they bumped into an old acquaintance, Steve Gee, then general manager at Close Asset Finance, who was exhibiting at the machine tools expo for the first time in 2002. Gee had known Cassie and Biggs from their days at aerospace supplier, Hyde Group. After a short discussion around their plans for a new business, Gee agreed to back Cassie and Biggs and lent BCW £95,000 to buy their first CNC machine, a Hitachi Seiki H400. Cassie and Biggs ordered the machine at MACH 2002 within 30 minutes of the meeting with Gee. “We’d no premises, nowhere to put it” recalls Cassie; but the company was very soon established in Unit 23 on the Smallshaw Industrial Estate in Burnley, Lancashire. “We’d decided we were going to make the business pay for itself, and the first three month’s profits paid for the deposit on the machine,” says Cassie. This first Hitachi Seiki ordered at MACH 2002 is still producing parts today, albeit it alongside one of the most up to date CNC machine shops to be found in the North of England.

Growing pragmatically Over the past 10 years, Close Asset Finance has continually helped BCW to grow, providing funding for around 20 CNC machines which equates to around £2m of investment. Gee looks back over the relationship saying: “While Alec and Paul are prudent directors, they can also spot an opportunity when they see one. They are very forward looking and always seem to be one step ahead”. Alec Cassie explains the grounding behind BCW’s financial management: “One of the first things we did was employ an accountant – we needed to understand our cash position. This was a result of my Hyde Group training and I remember saying we would die if we didn’t do £4k per week.


It isn’t a case of selling your soul, it’s about asking how can I enhance my business?

I took the view we might be making parts and have a healthy bottom line, but you’ve got to be in control of your cash to keep a company healthy.” Initially, BCW focused on the automotive sector. However, it soon became clear if the company was to achieve its original vision, it required both a technologically advanced UK operation, and an offshore, low cost business. This realisation was crucial to BCW’s next stage of development which saw a subsidiary manufacturing plant established in India within five years as well as a new high pedigree technology location in the UK to support the operation at Smallshaw. This global sourcing strategy has seen some parts – mainly for power generation – being produced by BCW’s partner in India. “It isn’t a case of selling your soul, it’s about asking how can I enhance my business?” says Cassie. “The answer is by getting a £3m contract and having £1m of it made in India to secure £2m to be made in the UK”.

Alec Cassie, BCW Engineering

Not all about the money For over 10 years the policy at BCW has been to invest heavily in people. This has been recognised by numerous awards and also royal recognition when Prince Charles opened its second site in 2008. The policy was to employ time shared professionals; with the patience and ability to teach at all levels. These individuals were then mixed with people from all walks of life; from graduates and school leavers to people of any age that just expressed a will to work and be trained. It’s an approach which has certainly borne fruit, as a number of these individuals are now in senior management and engineering positions. In common with many UK manufacturing SME’s however, when the downturn hit in 2008 and 2009, BCW had to cut their cloth accordingly. The business

had to lay off staff to cope with strained conditions - albeit, they were all re-employed before the middle of 2010. During the hard times though, BCW turned again to Close Asset to ensure that the business did not lose competitive ground, despite being forced to downscale. At a time when UK banks had no appetite to invest in the manufacturing sector, Close provided facilities to ensure necessary investment took place. Shoring up investment activity has enabled BCW to accelerate out of recession. Cassie comments: “In the seven years to 2009 we had never missed a finance payment or defaulted in any way. Close were there when we needed them on day one and they were there again for us to ensure we didn’t miss on the opportunities which lay before us in 2010 and 2011.”

Future fortunes Looking forward, the growth potential, Cassie says, is in power generation and aerospace, though the traditional automotive work will continue to be a valuable staple. “One of the reasons we have survived” says Cassie, “is we are balanced across aerospace, automotive, power; we’ve just got our first medical order and were looking closely at nuclear”. So, the next 10 years will take BCW into another carefully planned growth pattern. This will include building an even stronger relationship with its Indian partner L.G.Balakrishnan and, of course, a continued relationship with Close Asset Finance – though under its new nomenclature of Close Brothers, Asset Finance. The business will be sticking to its diversification policy into all sectors of engineering, while keeping it’s ethos of training and succession planning alive. Here’s to the next 10 years and MACH 2022!

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CONNECT FORMULA One-to-One focused meetings

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ERP Connect is a unique focused event for manufacturers engaged or looking to engage in an ERP project. Who should attend ERP Connect? • Business executives • Financial executives • Manufacturing, operations professionals • Supply chain and procurement professionals • IT and systems professionals

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d er an ive ff er ce O ist re r. d eg ill e . ir r w ad ply B ho 12 -re ap y s w 20 e ns rl ate pril ndlenditio Eaeleg th A E Kni d co 6 l d y RE s a Al y b F erm a T pa

I would definitely recommend attending this event, the one-to-one sessions were extremely useful and the speaker presentations were good Manufacturing Director, Timsons Ltd at ERP Connect, April 2011


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Eight presentations to choose from including: David Warburton-Broadhurst

Chief Information Officer, Masternaut

Rob Phillips

ICT manager, ITW Industry

Dr Amany Elbanna

Senior Lecturer in Information Systems, Royal Holloway University of London

John Haslam

Senior Consultant, ERP Advice Centre Ltd

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Manufacturing Director, EMS Manufacturing Generating flexibility and continuous business improvement through ERP • How is ERP a continuous improvement enabler? • Creating a flexible mindset within the operation. • How does ERP unlock the power of information? • How to identify the business benefits of ERP based systems.

Peter Thorne

Managing Director, Cambashi

Clare Stille

Programme Director, Marshalls

Anne Burton

Business Controller, Radius Systems

To view all the speakers and case study presentations visit www.themanufacturercom/erpconnect

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PlastIndia 2012 where Luxus exhibited this year

India Gate considers the dynamics of market entry for UK manufacturers in India.


he engineering and manufacturing sector in India contributes around 12% to the nation’s immense $1.24 trillion GDP and the sector is set to grow rapidly in the coming decade to account for a far higher proportion of economic activity – the Indian government’s manufacturing policy has targeted the creation of 100 million jobs in manufacturing over this period. UK manufacturers can be a part of this boom and many who have already made forays into India are extremely positive about the experience. Speaking at the UK India Business Council’s annual Newtorking Summit on March 14, Ludo Chapman, MD of SME scientific equipment manufacturer, Grant Instruments, commented “India is certainly the biggest opportunity to a small company like mine, and I recommend it highly.” (Go to for a full transcript of Ludo Chapman’s presentation at UKIBC’s 2012 Summit.) But there are challenges to setting up operations in India. One issue raised at the UKIBC’s event was bureaucracy – particularly around banking which was repeatedly described by speakers as “a nightmare”. Finding the right people, both from the UK and in India can also be testing. Mr Chapman warned UKIBC Summit attendees never


to trust to skype when selecting local candidates but to always select shortlisted candidates for local representation in person. Sustainable premium plastics manufacturer Luxus, undertook its first trade mission to India in February. Describing the characteristics to be looked for in the leader of such a project from a UK perspective Mr Aterby, Luxus’ MD says: “We selected Alex Clarke, one of our senior graduate apprentices. He is an

automotive engineer and automotive is the primary market we are investigating a the moment. “Alex is also a very open and worldly character who travelled a good deal when he was a student,” continues Aterby. “He also has an ability to communicate with people on a very personal level in a professional environment and this is very important in India.” Expanding on this point Aterby explains: “Alex was able to build a rapport with local contacts before we took part in our trade mission. Through leveraging these relationships he ensured that we were able to talk to the right senior people in the organisations we were interested in – not just those

India Trade Facts Goods Exported UK/India FOB value in £ millions




Total by year




Total precious stones, precious metals












Ferrous waste and scrap



Jet engines, turbo jets



Mechanical machinery and parts


Electrical machinery and parts




Optical, photographic, measuring, precision, medical




Aircraft, parts, spacecraft




Total vehicles






Cars Plastics and plastic products




Beverages, spirits




Books, newspapers, printing industry products




Source: HMRC (Major selected product groups only)

Exportfocus India

people fronting up stands at exhibitions.” Speaking for himself about the experience of leading Luxus into India Alex Clarke says: “We went out with the idea of establishing a joint venture with a company we felt we could help on a technical level. Having been to the market we will probably look at direct shipping as an alternative short term solution. This is because, while potential partners were in fact more technically capable than I had expected, we couldn’t find anyone who is doing what we would require with regards to sustainability and using recycled materials.” This is an important selling point for Luxus in the UK and Mr Clarke is confident that, given strong activity from European automotive OEMs in India, there will soon be a requirement for plastics of their grade there. For the moment however, Clarke says, “Buying in India is still very cost driven and conversations about the sustainable value of products is relatively immature. To maintain the integrity of our product we would have to look at direct shipping, but this will be very expensive – around £70-80 per tonne shipping costs.” So, the market for Luxus is currently nascent and uncertain, and the choice will have to be made as to whether it lays its bet on success now in order to capitalise on immense potential in years to come, or wait and see, and risk losing competitive advantage. This is not an unusual position to be in. Mr Chapman comments, “India works on a five year plan. We are going to follow that and look at a five year scope for each of the steps in our strategy.”

Package trip or solo expedition? Anthony Shepherd, director of Shepherd International, considers the value of trade missions and asks if other options are available to UK manufacturers looking to crack (or sustain) market entry in India and similar territories. No one was ever sacked for joining one of Britain’s 500 or so trade missions each year. Missions can help sell your goods or services into an export market. But other routes exist for market entry which may prove less expensive, more effective in customer-facing time and are more flexible. It’s important that Britain’s 18,000 or so active manufacturerexporters, as well as new kids on the block, are aware of the arguments for selecting Trade Missions or taking a DIY approach.

India is certainly the biggest opportunity to a small company like mine, and I recommend it highly Ludo Chapman, MD, Grant Instruments

Trade missions: The busy manufacturer benefits from his or her time-consuming travel package being administered by others, but at additional cost. Your organising trade body should carry out pre-visit market research, set appointments for meetings and presentations, coordinate your visit with industry and embassy events and obtain visas, flights and hotels. As the ‘missioner’, you benefit from a higher local media profile, since a joint visit has more clout than one company, and there’s a supportive camaraderie in travelling with like minded peers. For the shy or nervous this brings a sense of security and is morale-boosting. To reduce the cost of a mission, UK manufacturers should be aware they can access UK government mission grants of £300 to £1000 to offset some of the admin costs involved. Missioners should also try and take advantage of networking with non-competing exporters, potentially sharing valuable market intelligence. If high-profile politicians or blue chip companies travel with you, piggy-back on their clout and connections. Missions tend to most benefit newcomers. The DIY sales trip: Missions help justify the work of diplomats, civil servants and trade bodies. So missions can cost £500 to £1500 more than a solo sales trip. The airline ticket and hotel quality levels are often higher for official mission groups, perhaps more than you need, and you pay for the organisers’ fees too, as well as the market research by the Embassy or High Commission Trade team at £600- £2000. The flight schedule on an official trade mission may not suit you. You decide your own itinerary when it’s DIY and can either focus on 100% overt client-facing time, or take a more stealthy approach if you are concerned about alerting competition.

Selected India market specialists

In addition, organising your own sales trip, including selecting your own in-market specialists (see some below), will ensure you have independent agents who have to compete hard to provide you with the most effective market research using local know-how. If you know the market already, you’ll prefer the DIY route.

Organisation name




India Pakistan Trade Unit


0121 607 1758

UK India Business Council


0207 592 3040

Infinity Blue

Cambridge & Hyderabad

08450 537 550

Sannam S4

Delhi, Mumbai, Bangalore

00 91 (0) 11 42124100

PwC (Indian market entry consulting)

UK & India

Selections made by Anthony Shepherd, Shepherd International

Have your say at


Keeping pace

with India’s front-runners UK firms shift up a gear

India represents a huge opportunity for British manufacturers across a range of sub-sectors in which they already excel. Peter Russell, head of manufacturing, UK sector coverage at Royal Bank of Scotland, looks at key strategic export and growth opportunities over the coming five years.



fter China, India is the world’s secondfastest growing economy. UK exports to India have grown from £2.7bn in 2006 to £3.5bn in 2010. Exports grew by 45% year-on-year in 2011, while the UK government aims to double bilateral trade with India, its largest export market outside the European Union (EU), by 2015. Just under a third of UK manufacturers anticipate growing their export sales to India over the next 12 months, while nearly four in 10 expect growth over the next five years according to the 2012 EEF/RBS Manufacturing Focus Survey. Ranjana Mirchandani, head of global transaction services origination new inbounds, RBS India, describes a confident, ambitious country: “The Indian government is committed to delivering economic reforms aimed at attracting foreign investment,” she says. “Continued deregulation, privatisation and trade liberalisation demonstrate India’s recognition of the part it must play to provide the kind of business environment that companies will welcome.”

path to India’s door. Nevertheless, UK manufacturers may not be exploiting opportunities to their full potential, leaving them vulnerable to European or Asian competitors. “It surprises me that some British firms which are ideally placed to export to India haven’t yet done so,” he says. “Some may perceive cultural or historic barriers which they wouldn’t encounter in non-Commonwealth markets like, say, China, but which can easily be overcome. Others may simply just be too modest about the quality and appeal of their products.” Some of those manufacturers would benefit from a greater awareness of UK government support available. “Many British exporters and producers successfully tap into invaluable networks of customers and knowledgeable contacts via UKTI and other trade bodies,” says Ranjana Mirchanani. ‘Their services cater for both companies which haven’t yet traded in India and those which have customers in established industrial and commercial centres but now seek new opportunities elsewhere.”

Time for a concerted push

Old friendships, new alliances

According to Barry Lowen, director of UK Trade & Investment (UKTI) in India, the world is beating a

Long-standing trading links may provide a welcome backdrop for British manufacturers exporting to

Specialfeature RBS

India – but modern-day concerns must be addressed; securing Indian business requires recognising an increasingly value-conscious and priceconscious customer base. Lowen says the ‘Made in Britain’ marquee is highly respected: “Indian businesspeople and the country’s own trade officials both acknowledge and admire the UK’s strengths in production and design. They’re also reassured that British companies understand the nature and challenges of conducting cross-border business.” Indeed, this is increasingly important for Indian customers themselves aiming to expand globally, who want partnerships with companies and people who can anticipate and address issues around everything from red tape and tariffs to logistics and marketing. “Collaboration isn’t just about making the most of British technical excellence, or modifying specifications for Indian or international markets,” adds Lowen. “It’s frequently about leveraging from the global reputation of specific brands.” Richard Heald, chief executive of the UK India Business Council (UKIBC), says “Companies in advanced engineering, aviation and aerospace, offer an abundance of opportunities. British-made components, equipment and machinery are in high demand. UK companies are increasingly encouraged to establish production facilities, supply chains and distribution hubs here; for many, it’s a natural next step.” And India’s growth industries are certainly well-positioned for British exporters and producers to take advantage over the coming five years:

Ready for UK PLC: India’s key strategic industry sectors Accelerating Sub-Sectors

Strategic Locations

Facts, Figures & Projections

Automotive & Advanced Engineering

Chenai Maharashtra Haryana

India set to become fifth-largest car manufacturer (by 2014) Increasingly attracting auto component and equipment makers for in-country production

Pharmaceuticals & Biotechnology

Kamataka Bangalore

Annual growth 37% across life sciences and healthcare Ranked third in Asia-Pacific by number of biotechnology companies Pharmaceuticals industry valued at £14.4bn (at end of 2011), with 10-12% annual growth projected



Set to attract £315bn FDI (by end of 2012) Roads, seaports, airports and urban regeneration projects Waste management, water supply and sewerage sectors priority areas for government investment

Telecoms & Digital Technology

Bangalore Chennai Hyderabad Mumbai Pune Delhi Kolkata Coimbatore

The world’s second-largest telecoms market (more than 10m mobile phones sold each month) Indian government incentives aim to attract £78.2bn FDI between 2012 and 2017

India’s flourishing car-making industry is a good example of one of those sectors. Companies such as Tata Motors and Mahindra & Mahindra rank amongst the country’s largest manufacturers. Foreign producers like Land Rover, BMW, Hyundai, Volkswagen and General Motors now have Indian manufacturing or assembly plants, the products of which are exported globally while meeting rising domestic demand. “The return on investment that can be enjoyed through establishing a manufacturing base in India, and the quality of India’s own manufacturing expertise, are proving increasingly attractive to UK car-makers,” says Ranjana Mirchandani. “There are a number of highly successful joint ventures; British expertise and reputation for quality in precision engineering, prototyping and automated production command high premiums.” Other sectors have yet to fully mature (in some cases globally, as well as in India), creating opportunities for UK firms to quickly establish themselves. “Biotechnology and pharmaceuticals are top priorities for the Indian government,” says Lowen. “An increasingly affluent middle class means greater demand for drugs and pharmaceuticals in India itself, but there’s also huge potential for India to grow its share of the global biotechnology market. The nature of the products calls for the highest standards of research, testing, safety and production; many Indian companies – for the moment anyway – can envisage greater returns


Special feature: RBS

for investment from working in partnership with established players from the UK and elsewhere.”

Capitalising on regional potential Maharashtra, Gujarat, Tamil Madu and Andhra Pradesh are the states enjoying fastest economic development, with growth focused on ‘metro cities’ such as Mumbai, New Delhi, Chennai or Bangalore. But as India urbanises and rural populations migrate, second-tier cities are emerging in other states, with corresponding increases in personal disposable income and aspirations, as well as appetites amongst businesses for investment. “Less developed regions won’t currently be as intensively pursued as the major industrial centres,” says Heald. “There’s great scope for UK firms with Indian companies, complementing deep local knowledge and business contacts with production facilities, technical back-up and distribution know-how.”

Whatever turns the global economic recovery might take, India will be strategically central to growth for many UK manufacturers, with UK export finance playing an increasing prominent role in the region. A relentless focus on evolving customer needs, a proud, consistent promotion of British innovation and production excellence, and, of course, a degree of calculated risk, should position the sector’s exports well for the coming five years and beyond.

Emerging Cities: Destinations for entrepreneurs & investors Cities Pune Ahmadabad Chandigarh Jaipur Kochi Coimbatore Nagpur Vadodara Indore Bhubaneswar

Typical Attractions Sheer breadth of opportunities Availability of skilled staff Investment in infrastructure Lower costs of doing business Responsiveness of local officials and potential partners

Typical Challenges Legal, tax and regulatory issues Understanding local competition Tailoring products and prices Addressing talent shortages Limited management time to fully explore opportunities

Source: UKIBC “Business Success In India’s Emerging Cities” These locations may not necessarily appeal to the risk-averse – but for British manufacturers looking for huge potential in up-and-coming cities that welcome foreign business, there’s plenty of scope: India certainly welcomes joint ventures, with few constraints outside sensitive sectors (like defence). “The feasibility and appeal of joint ventures naturally depends on commercial considerations,” says Heald. “Selecting the right partner takes time, and there will be competition from other companies seeking similar alliances. But the right people can open doors to contacts with substantial purchasing power, and advise on the pros and cons of different opportunities.”


To find out more about how RBS can support your Indian export trade, contact: Peter Russell, Head of Manufacturing, UK sector coverage Tel: +44 (0)20 7672 1007 Email:

For in-country connections and advice from UK Trade & Investment (UKTI), contact: Barry Lowen, HM Consul-General Tel: +91 (11) 26872161 Email:

For access to key decision-makers via the UK India Business Council (UKIBC), contact: Richard Heald, Chief Executive Tel: +44 (0) 20 7592 3040 Email:

Supplychain Logistics and Materials Handling

Lean goes

large How can collaborative approaches to the elimination of waste and the challenges of increasing complexity help manufacturers? Richard Jones, business manager for supply chain at improvement specialist, Newton, leads discussion on the extent to which lean expertise in manufacturing firms is being used to pull up the overall performance of supply chains.


lobalisation, lowcost sourcing, transport costs, a focus on improving core competencies while outsourcing, and demand for supplier flexibility make it difficult to achieve and sustain an efficient supply chain that balances cost with high service standards. As such, the way that

a customer interfaces with its suppliers is critical in driving a company’s overall supply chain efficiency and effectiveness and, in turn, overall profitability. When visiting factory shop floors and talking with teams about improvement prospects we [Newton] are frequently told that the biggest ‘issue’ is supplier performance, whether

on delivery or quality – or both. In our experience the organisation’s typical first response will be to manage suppliers harder or eliminate them. Additionally, where there is a perception of risk – few companies have a real understanding of the size of risk in their supply chains – the most common solution is to multi-source.


Stewart Kelly, managing partner at supply chain design and optimisation specialist, Oliver Wight, says not enough companies are leveraging opportunity in their supply chains to address waste. End-to-end supply chain visibility is a necessity to create an agile supply chain and meet ever-changing demand. Creating it, however, is no mean feat. The right people, processes and tools have to be in place, and forming strategic partnerships throughout the extended supply chain is imperative. Companies need to start thinking less about ‘me’ and more about ‘us’. Value should start with the consumer, and any ‘heavy hitters’ in the supply chain. Efficiency then has to be driven through the supply chain step-by-step, first with tier one, then tier two suppliers and customers. For some businesses the supply chain can involve hundreds, even thousands of suppliers, posing a potential barrier to collaboration. A strategic approach, beginning with suppliers that have the greatest impact on your business, as well as any particularly poor performers, is needed. The benefits of building strategic relationships with customers and suppliers alike are clear: companies with optimised supply chains improve their ‘perfect order’ rating by 17% while reducing operating costs by up to 50%.


When visiting factory shop floors and talking with teams about improvement prospects we [Newton] are frequently told that the biggest ‘issue’ is supplier performance, whether on delivery or quality – or both Richard Jones, Business Manager for Supply Chain, Newton

Neither of these approaches are necessarily the best routes to go down. What we rarely see, but which can be extremely beneficial, is an effort to increase the level of partnership with key suppliers. For any lean thinker, facilitating the flow of value within their organisation is an ongoing labour. It is less commonly appreciated that the overall value chain reaches far beyond the boundaries of one organisation and that supply chain value directly impacts the value creation any one company has within their control. The automotive industry, with perhaps the oldest foundations in lean thinking, also has one of the strongest track records in taking the time to address wastefulness and lack of alignment within the extended value chain. Lean leaders in automotive often go as far as setting up collaborative cross functional teams from both suppliers and customers to drive out cost and improve delivery performance. In other industries you tend to see far smaller pockets of excellence. And increasingly, industry initiatives are coming into play to improve supplier and customer relationships, accelerate competitiveness and raise supply chain performance, such as the SC21 initiative within the aerospace and defence industry. However, the successful

Supplychain Logistics and Materials Handling

programmes to-date are typically in non-critical areas – such as a joint supplier/end-user initiatives to reduce the total cost of ownership of tooling at a dockyard. There is a lot more scope to be taken advantage of but many companies fear collaborative opportunities for improvement. Both suppliers and customers are often afraid they will give away information that they shouldn’t, or they become tied up in relationships that may go bad. There is a perceived loss of control inherent in collaboration and, as a result, the initial position from both sides is often defensive, rather than open. In addition, there is a common fear of complex commercial and contractual arrangements. These reach from basic agreements over who is going to pay for the improvement work through to more complex gain-andpain share agreements. In our experience, the first step to easing these barriers is recognition from the customer that they are partially at fault for any existing inefficiency and need to make themselves easier to supply to. For many manufacturers, managing supplier performance is becoming increasingly important as they try to balance supply risk with working capital pressures. By working collaboratively with each individual supplier and continuously managing their performance they will ensure that a focus remains on developing quality and efficiency, while helping their key suppliers gain better visibility of their requirements. Driving toward full visibility will unlock a culture of openness and two way communication. In cases of close collaboration we see both the customer and the supplier identifying problems and opportunities while also mitigating areas of risk. For success however, there needs to be clear direction from the top of both organisations.

Pete Austin, director at continuous improvement consultancy, Suiko, gives his perspective on the application of multienterprise lean thinking. The best example of collaborative working I have seen is in the automotive industry, in particular in Honda. Honda run a competition called NHC (New Honda Circle) where teams (both internal to Honda UK and suppliers) are formed, opportunities identified and then realised. The teams present back to a UK panel about how a problem has been permanently resolved, the process used and the savings achieved. The winners of the UK competition will then enter the European competition and the European champions go forward to the world competition. What does this achieve? It supports employee development, motivation and pride as it is done in personal time, and of course there are 1000s of tangible improvements for the value stream. In addition for the supplier it reinforces focus on customer values (the first principle of lean) in a very real way. Times are changing for us consultants as more and more clients sign up to results-based contracts. This style of contract reduces client exposure while ensuring an ‘in it together’ approach in which both parties are absolutely focussed on realising the benefits. The disadvantage of this is that unless great care is taken, the fine balance of results versus sustainability will be thrown into question. A coherent plan agreed by both sides of the partnership will enable the cost impact of behaviours in each organisation to be understood. The development and implementation of precise communication flows needs

to happen. Once common ground is reached and barriers have been removed, the result is the unification of the supplier and customer. They should perform as if they were one business working towards a common goal.

For case studies and further insight into the practicalities of carrying out collaborative lean improvement work with supply chain partners please see the March issue of Lean Management Journal, ’s sister publication If you would like to find out more about working with your suppliers or customers to spread lean thinking and align supply chain behaviours a free of charge first port of call might be the Manufacturing Advisory Service. Find out more about the workshops available at


More than

manufacturing Tom Moore talks to those leading the charge in throughlife engineering services during an industry partners day at Cranfield University.

Read this article to understand how the Through-life Engineering Services Research Centre intends to:

The new EPSRC centre at Cranfield University

Develop technology and processes for improved ‘design and manufacturing for engineering services’ Reduce whole life cost of highvalue products Further knowledge on interaction between mechanical, electronics and software systems Create innovative strategies for through-life services Expand regenerative manufacturing


hrough-life engineering services is proving to be a goldmine that industry and academia have only reached the borders of. The game has changed for manufacturing businesses and the “make it, sell it” concept is rapidly becoming redundant in some markets. Instead, the management of a product, right the way through its life, has become the goal – it is an approach which allows companies to stay in touch with the value they physically create in their products for far longer, but also one which allows the creation of other, less traditional value streams. Perhaps most importantly though, this approach can be highly lucrative. Rolls-Royce, the aerospace company which pioneered the through-life engineering model, accounted for more than half of the hefty £11.3bn of revenue it created in 2011 with the provision of services.


Companies are no longer manufacturing companies but service companies Dr Juan Matthews, Technology Specialist at UKTI

Cranfield and Durham Universities, boosted by a £5m grant from the Engineering and Physical Sciences Research Council (EPSRC), combined with another £5.5m in cash and kind from university and industry pockets, has set up a centre entirely devoted to the development of through-life engineering services. After a one year journey to secure the funding, Professor Rajkumar Roy, director of the new EPSRC Centre for Innovative Manufacturing in Through-life Engineering Services, believes that the key to its success will be the close working relationship between industry and academia.

Project liftoff There are five initial projects that have been designed in collaboration with the centre’s industrial

Manufacturing Technologies

partners such as Rolls-Royce, Bombardier, BAE Systems and the MoD to develop innovative technological and engineering solutions which reduce the whole life cost of high-value products and expand regenerative manufacturing. The projects are: Study of cross sector challenges in through-life engineering. Services feedback to design and manufacturing (six month study) Reduction of no-fault found (NFF) outcomes from maintenance on equipment with fault alerts through system design (three years) Characterisation of in-service component feedback for system design and manufacturing (three years) Improvement of system design process for whole life cost reduction (2 years) Self-healing technologies for electronic and mechanical components and subsystems (3 years)

The future of UK manufacturing is linked to our ability to earn additional revenue from high value products by offering them within a service-included contract


Professor Rajkumar Roy, Director of the EPSRC Centre for Innovative Manufacturing in Through-life Engineering Services

2 3 4 5

Professor Roy says that these projects will feed straight into industry, “becoming a source of technological solutions, R&D capability, knowledge, skill and advice for manufacturing companies. The future of UK manufacturing is linked to our ability to earn additional revenue from high value products by offering them within a serviceincluded contract.” There has been an ears open approach from the centre to develop technology based on industry needs. Jeremy Lovell, predictive asset management director at Bombardier Transportation, played a central part in deciding on the projects and says: “The centre can play a key role in changing the mind-set of manufacturers from building to minimum cost, to investing in the R&D and design stages to enable it to tie twenty to thirty year service contracts into deals. We are selling into that long term proposition.” Because of the heavy initial investment to design and make with maintenance in mind, Mr Lovell states that “through-life engineering must be enabled by the big companies but benefits

will be seen down the supply chain because big companies need to nurture suppliers as they want their intellectual input and need their trust.”

Through-life engineering will be a powerful tool to win more business. But not only that. If we don’t do it we will find that other European countries will have made that step and will be competing at a higher level than us Dr Juan Matthews, Technology Specialist at UKTI

At your service For the customers of this new generation of through-life engineering service providers, upfront cost cutting is the prime attraction. Dr Juan Matthews, technology specialist at UKTI and an advisory board member at the centre, asserts that “for the customer, it may mean buying one tool, machine, or engine every thirty years rather than fifteen years.” And on the flip-side Dr Matthews comments: “The value of products could double or triple with maintenance and service so it’s really important for companies not to sell and forget. Companies are no longer manufacturing companies but service companies” All very well as a concept. But supporting the kind of service model needed for an effective customer value proposition can seem challenging and requires considerable investment. Any company would want to be sure that the business model change will make enough money to justify the upheaval. The projects led by Cranfield and Durham Universities answer this concern with a focus on reducing the cost of throughlife services by minimising man-hours on maintenance and optimising design and manufacturing techniques so that they account for service

activities in future use scenarios. The self-healing and self-repair technologies being researched in project five could potentially save huge labour costs. Commenting on another project, Richard Denning, principal reliability engineer at the MoD says that the focus on cross sector challenges “is already showing maintenance philosophy can be improved to deliver real savings.” Matthews emphasises this point, commenting that the cost savings will be substantial if introduced at the R&D stage. He concludes: “The company that is selling the product benefits as it is getting more income and the user benefits as the total costs over the life of a product decreases. Through-life engineering will be a powerful tool to win more business. But not only that. If we don’t do it we will find that other European countries will have made the step and will be competing at a higher level than us.” In the high-cost, high technology sectors such as high-end automotive, aerospace, defence and railways, the demand for product life enhancing maintenance is becoming an increasingly vital tool to secure contracts. Companies are no longer thinking short-term, about the income that will arrive now, but fostering relationships so that when the next contract is up for grabs, the firm is not a supplier who the customer purchased from 20 years ago, but a supplier with whom the customer has had a 20 year relationship.



for it

South West Innovative Manufacturing SWIM: a new business forum in the South West, organised by BDO LLP, Barclays and insurers Marsh, to share ideas and best practice, provide tax and business advice and develop personal and professional networks. Will Stirling attended its first meeting.


t was apt that the first South West Innovative Manufacturing event, or SWIM, was hosted at the National Composites Centre. Just up the road in Filton, Airbus has an order backlog of over 4,437 aircraft and the aircraft industry needs to find improved manufacturing techniques to satiate the demand – and fast. In March, separately to SWIM, head of R&T business development and partnerships for Airbus UK Colin Sirrett said, “With this backlog and projected growth of air travel demand of 45% over the next 10-years, research into high volume and low cost manufacturing is essential for Airbus to meet future market needs.” SWIM is a forum for manufacturers in the South West to debate hot topics affecting the sector. Investment and innovation, and the barriers to developing both, will be recurring themes. The first event on March 15 covered: The status of UK manufacturing by The Manufacturer, leaning on issues debated at the recent EEF National Manufacturing Conference The National Composites Centre (NCC), its capabilities and mandate, delivered by the centre’s CEO Peter Chivers Supporting Innovation – tax breaks and government funding, presented by Robert Hayward of BDO A short wrap of the UK’s position in global manufacturing, with an insight into China, by BDO’s head of manufacturing Tom Lawton, and A Q&A of the discussion points chaired by Mark Lee, head of manufacturing, transport and logistics at Barclays Bank.


Status of UK manufacturing EEF’s latest Fact Card, released in March, confirmed that the UK has slipped to 9th place in the global league table for manufacturing gross value added. Up until April 2011 the UK was still seventh. The two new kids in the top 10, Brazil and South Korea, have crept up fast. Brazil’s rapid economic progress is well documented and its leader Dilma Rousseff has made no secret of her feelings about state protectionism to boost industry. South Korea’s vast electronics industry has been greatly helped by the Electronics and Communications Research Institute (ETRI), one of the Technology and Innovation Centres (TIC) Dr Herman Hauser identified as a model for better ‘business incubation’ from university research in his seminal 2010 report. His review gave rise to the UK’s own TICs, the Catapults, and the National Composites Centre is one of seven nationwide centres

that comprise the High Value Manufacturing Catapult. EEF’s recent national conference had debated three heavyweight issues central to growing the manufacturing sector: innovating products and processes, growth through export and alternative finance for investment. Help with exports, it was suggested at SWIM, needs better articulation and the company experiences with UK Trade & Investment are not always glowing. The Alternative Access to Finance workshop identified equity finance through the Business for Growth Fund and the government-sponsored Capital for Enterprise as two alternatives to plain bank lending. Tim Breedon’s recent report highlights these other routes. Innovation, as part of the SWIM acronym, was addressed in more detail. The Technology Strategy Board’s Catapult concept was explained, briefly reviewing the High Value Manufacturing Catapult centres. Each one has a specialisation, with some crossover, and

Manufacturing Technologies

are designed to collaborate with each other to help the acceleration of proven ideas and products to market. For example, the Nuclear AMRC in Rotherham, which opened in 2011, is working to help subcontract engineering firms acquire the knowledge needed to become accredited as a nuclear industry supplier.

National Composites Centre Composite manufacturing applications are set to grow by up to 18% in some sectors, said the NCC’s chief executive Peter Chivers. He explained the size, capability and purpose of the Centre. Like the other Catapult centres, the NCC is funded broadly by a three-way split, between the Technology Strategy Board (funding via BIS), industrial partners and the European Regional Development Fund. Partners are rated from tier one to tier three, depending on their contribution. He reiterated that the NCC is not merely for research, a core purpose is to develop manufacturing processes in situ that will help industry save time and money in ramped-up production of composite-based components. The 8,500m2 centre is a large facility with equipment to match. When the kit list was specced by the original consortium, tier one partner Airbus wanted the capability to make and test parts up to 20 metres diameter. The new Automatic Fibre Placement machine, installed in March, uses twin robots to automatically layup sheets of composite material at twice the rate of the previous equivalent process. Asked if the NCC has any funding concerns, Mr Chivers said no. “Our main issue is ramp-up; how we are going to manage when the current pipeline of projects are all on-stream. More equipment is being delivered shortly, and we’re increasing headcount from 33 to 100 by June. It’s still a big task to actually do the work, but it’s exciting.”

More on the capability of the NCC will appear in the May issue of TM.

NIC and R&D – good news for business

Robert Brown, Tax Director, BDO

Robert Brown, a tax director at BDO, talked about apprenticeships, National Insurance contribution (NIC) holidays and R&D tax credits. Between March 2011 and March 2015, the government will utilise £180m to fund up to 50,000 additional apprenticeship places. SMEs will get specific help with 10,000 higher apprenticeship places. Companies that have been established since June 2010 can claim a saving of 10% of the cost of NIC for the first 10 employees, up to a potential deduction of £50,000 per year. But you must qualify to claim – and only about 500 firms in the South West had done so to date. Responding to recommendations in James Dyson’s 2010 report, Ingenious Britain, the rate of enhanced deduction for expenditure on R&D by SMEs will increase to 225% from April 1, 2012 (following EU approval). This means for every £100 spent on R&D, companies will get £225 tax deduction. Further changes were introduced from April 1 that include an abolition of the cap on the R&D tax credit to the amount of PAYE and NIC paid, and abolishing the minimum required spend of £10,000 a year. Mr Brown agreed that the big issue with R&D claims is often to understand

precisely what qualifies for R&D. Head of manufacturing at BDO Tom Lawton, who visits China regularly, felt that UK manufacturing had strengths but its top 10 place was at threat. He sees much better integration between government policy and industry in China and South Korea than in the UK. While the Catapult was a good step forward, and MPs had made promising noises recently, there was little sign of the 20-year industrial strategy required to secure large tracts of manufacturing here. Mark Lee, head of manufacturing transport and logistics at Barclays, chaired a Q&A to close the forum. One guest, a local engineering firm, said the banks’ current finance model was simply not aligned to promote growth. He said his firm needed land to expand, but the terms offered by their bank – a 5-year revolving credit which required up to 60% of the principal – were more akin to a sub-prime loan than a competitive commercial mortgage. Mr Lee said banks’ lending to SMEs was being held to account via mechanisms like the Breedon report, and that it was proving challenging to free up more lending “within the constraints of the banks’ current business model”. He challenged the delegate to test his borrowing criteria with Barclays.

For more on the first SWIM forum, and details of the next event, go to


Manufacturing technologies

Ethanol from household waste? That’ll be biomanufacturing, finds Malcolm Wheatley.


t’s not a term that’s yet in widespread usage. But prepare to hear more – possibly a lot more – about biomanufacturing. For even as many of Britain’s traditional manufacturing industries battle against low-cost competition from overseas, the good news on the biomanufacturing front is that not only are biomanufacturing jobs being created, but that formerly offshored biomanufacturing production is being brought back to the UK.

There’s a definite groundswell of interest in biomanufacturing. It’s seen as one of a small number of key areas where the opportunities are very significant Yvonne Armitage, Industrial Biotechnology Sector Expert and Knowledge Transfer Manager, The Roslin Institute

So what exactly is biomanufacturing? Essentially, a working definition might be ‘the production of compounds using a biological system.’ What sort of compounds? Pharmaceuticals, obviously, but also food ingredients, fuels, and plastics – all of which are fairly fundamental to modern day life. But while FTSE 100 giants such as AstraZeneca and GlaxoSmithKline need little introduction, newly-promoted


Bionic FTSE 100 entrant Croda and privately-held Ineos – both built from parts of former British industrial stalwart ICI – are less well known. Yet each has biomanufacturing processes firmly in place, with GlaxoSmithKline being one biomanufacturing business intent on establishing its next biomanufacturing production facility in the UK, rather than a low-cost overseas economy. In all, in fact, there are over 250 companies operating in the UK biopharmaceutical bioprocessing sector, which is recognised by the UK government as a key sector of the life sciences. And with the second highest number of biopharmaceuticals in development worldwide, it would seem that the UK is well placed to take a significant share of the market.

Beyond pharma Yet biopharmaceuticals, don’t forget, are just one sector of several in the biomanufacturing sector. Ineos, for instance, is the world’s largest producer of synthetic and fermentation ethanol, with over 300,000 tonnes produced at the company’s Grangemouth plant. Ineos’ Bio Ethanol technology, what’s more, efficiently converts a wide range of low cost, organic materials, including household and commercial wastes, into bioethanol for use as a renewable road transport fuel or petrochemical intermediate.

But while the possibilities may be ample, complacency regarding biomanufacturing’s prospects is dangerous, warns Dr Yvonne Armitage, industrial biotechnology sector expert and knowledge transfer manager at the University of Edinburgh’s prestigious Roslin Institute. She points out that the biosciences knowledge transfer network that she advises is one of 14 such networks explicitly set up by the Technology Strategy Board with the task of securing the longterm future of some of Britain’s most valuable industries. “As a country, we’re strong in the technology, but the factories often get built elsewhere,” she says. “And that’s worrying, for an industry that’s been officially recognised by the government as an enabling technology.” Which is where the Biosciences Knowledge Transfer Network, and its twin, the Healthtech and Medicines Knowledge Transfer Network, come in. Delivering knowledge, information, contacts and expert support to help manufacturers make innovation happen, they help biomanufacturing businesses with funding and collaboration opportunities. “In government, and in industry, there’s a definite groundswell of interest in biomanufacturing at the moment,” sums up Dr Armitage. “Biomanufacturing is seen as one of a small number of key areas where the opportunities are very significant.”

IT in


Going mobile

There’s a growing buzz around mobile computing. But what does it offer the typical manufacturer? Malcolm Wheatley finds out.


t Ipswich-based facilities management company MC Contracts, a mobile computing application from specialist mobile workforce management vendor Momote is saving ten employees a total of 45 man-hours a week – an amount equivalent to an additional employee, for free. “We’re clawing back around half an hour a day, per employee,” says Momote’s managing director, Graham Whistance. “Employees are no longer having to visit the office to pick up their daily job sheets, and then drop them off at the end of the day. What’s more, job sheets no longer have to be typed into the system - it’s all done in real time, by employees, as they complete the tasks they’ve been assigned.” Meanwhile, tens of thousands of travelling executives are making use of ExpenseMagic, a recently-launched low-cost application designed to help employees, and employers, track expenses, using mobile devices such as iPhones and iPads to photograph receipts and automatically apply any required currency conversions.

Welcome to the world of computing on the go. From iPads to iPhones, and netbooks to laptops, computing power on the move has never been more accessible. Special purpose devices, too, are augmenting tasks such as delivery confirmations, field service and in transit tracking. But despite the growing prevalence of mobile devices, building the mobile manufacturing enterprise is still a work in progress. For while simple email access might be considered unremarkable, the fact remains that full workflow enabled ‘ERP on the move’ is still very much in the future. And if the software aspect of

mobile computing is fluid, the technology of mobile platforms is no clearer. The most obviously pressing question: to what extent should software vendors, and manufacturers, support open source paradigms such as Android, or consumer-friendly iPhones or iPads? To some, such questions are both mundane and irrelevant. In the shape of the familiar laptop computer, they point out, mobile computing has been around for years. If it had much more to offer manufacturers, goes their logic, it would already have been delivered. In short, manufacturers wanting mobile computing can already get it.


But tempting though such a viewpoint is, it ignores the changed paradigm posed by today’s mobile devices. Lugging a laptop around and booting it up is one thing; tucking a smartphone or iPad in your pocket quite another. And a growing number of manufacturers, it seems, have begun asking what they can do with a workforce that are already equipped with such devices – or could be, at a price tag far less than the cost of a corporate-grade laptop.

Remote access “Over the last year or so, we’ve been picking up signs that manufacturers have been increasingly thinking about mobile applications,” says Adrian Simpson, chief technology officer for SAP UK. “It seems that businesses are increasingly reluctant to be tied to the desktop, and want to access more and more information while on the move.” “Up until a couple of years ago, mobility for manufacturers evolved around the warehouse, and handled barcode devices,” affirms Sam Dharmasiri, sales director at Microsoft Dynamics manufacturing specialists eBECS. “But in the last year or so, we’ve been seeing a growing customer interest in mobile applications.” But what sort of mobile applications? And to fulfill which specific business needs? Here, says Dharmasiri, the picture is less clear. “In effect, customers are saying to us: ‘What do you have?’, he explains. “But when we ask them what they want, there isn’t much clarity.” To some, the answer lies not in some undiscovered killer application, but in doing a better job with the sort of mobile applications that have long been regarded as those most relevant for manufacturers. Rue Dilhe, managing director of ERP


Employees can genuinely be in touch with the back office while on the move – looking at past part histories, reviewing work instructions, and seeing a lot of customer-specific data that they couldn’t access before Rue Dilhe, Managing Director, Exel Computer Systems

vendor Exel Computer Systems, for instance, points to field service and mobile Customer Relationship Management as opportunities. The trick, he says, is to offer genuine mobile functionality, and not gimmicks. “In field service, for instance, we’ve got customers such as Bioquell and Haigh Engineering who can do a lot more than just look at maintenance jobs and input data,” he says. “They can genuinely be in touch with the back office while on the move – looking at past part histories, reviewing work instructions, and seeing a lot of customer-specific data that they couldn’t access before.” Better still, as factory-floor production equipment becomes more intelligent, adding a mobile dimension to the maintenance function makes growing sense, says James Hannay, senior vice-president of international operations, Schad Automation. Look at some of Schad’s customers today, such as Dutch material handling expert Vanderlande Industries, which manages a number of automated conveyor lines at Munich airport under an outsourcing contract, and you’ll see a glimpse of the future for every manufacturer, he argues. “SCADA consoles can create alarms when equipment fails, triggering specialist software to automatically allocate the failure to a specific engineer, contact the engineer on their mobile device, and supply them with vital information ahead of getting to the piece of equipment to diagnose the fault,” he says. “The provision of CCTV footage, SCADA readings and associated spare parts information ahead of reaching the machine in question can save vital time.” Likewise, he adds, true mobile CRM involves having complete access to full customer account details, plus the ability to review order history, and raise quotations and new orders while on the move. Look at Exel’s customer base, insists Dilhe, and you’ll see genuine examples of mobile CRM in action. “It’s happening,

IT in


and it’s for real,” he insists. But disentangling the reasons for manufacturers’ sudden new interest in mobile computing is a complex affair. However favourable an interpretation one puts on it, the proportion of the typical manufacturer’s employees that is represented by salespeople, factory-floor maintenance engineers, field service engineers, warehouse staff and so on remains low. In short, talk to some of the IT industry’s more thoughtful observers, and what emerges is a sense that mobile computing probably falls into the ‘nice to have’ category, rather than comprising a ‘must have’ necessity. “It’s certainly not a panacea,” says Gordon Fleming, chief marketing officer at ERP vendor QAD. “There are many things that don’t lend themselves to being deployed in a mobile manner. But equally, there are genuine opportunities where mobile can add value.” And the impetus for manufacturers is probably a combination of leveraging an existing pool of mobile devices at minimal capital expense, coupled to a growing trend for remote working, a drive for efficiency, and the inexorably faster pace of business today. “We certainly saw an increasing number of requests for applications to be moved to mobile formats when Blackberrys and iPhones became popular,” says Fleming. “But the starting point is very much driven by workflow applications, approval routings for

SCADA consoles can create alarms when equipment fails, trigger specialist software to automatically allocate the failure to a specific engineer, contact the engineer on their mobile device, and supply them with vital information James Hannay, Senior Vice-President, Schad Automation

purchase requests and that kind of thing. Get a notification in your e-mail, click on it, and you’re in the application in question.”

Bring your own device

Mobile certainly isn’t a panacea. There are many things that don’t lend themselves to being deployed in a mobile manner – but equally, there are genuine opportunities where mobile can add value Gordon Fleming, Chief Marketing Officer, QAD

That said, the growing number of mobile platforms - Google’s Android, Apple’s iOS, Windows Mobile, Windows Phone, RIM’s Blackberry architecture and so forth – presents a challenge to both manufacturers and IT vendors. Making an application work sensibly on the screen of an iPad, for instance, is a very different proposition to making the same application work meaningfully on a Blackberry. And manufacturers and application vendors probably have less freedom of choice than they imagine, with many employees already carrying a mobile device around with them as they work – their own smartphone or iPad – and not particularly wanting to carry another just for mobile access to the corporate back office. Hence the growing ‘Bring Your Own Device’ (BYOD) phenomenon, in which IT managers are urged to forget thinking about supporting carefully-selected corporate laptops and mobile devices, and learn to leverage whatever devices employees have already chosen to use. “The benefits of BYOD are very tangible,” says Phil Gillard, general manager of industrial automation provider SolutionsPT. “There’s a lower cost of implementation when rolling out mobile related technology, reduced training costs, because

the user doesn’t have to ‘learn’ a new smartphone for work, and there’s no need to carry around two devices, or wait to be senior enough to be issued with a corporate phone.” An IT manager’s nightmare? Especially from a security point of view? Not necessarily, reckons Martin Lunt, a principal adviser at KPMG CIO Advisory. “While the reality of BYOD is still some way off the aspiration, the transition is likely to be gradual: checking corporate email first, and then access to the full corporate back office,” he says. “The trick is to build applications so that corporate data is always stored centrally, and not on the device. That way, there’s no security breach if the device is stolen.” And cloud computing makes the move to mobile easier, even in a BYOD world, says Erik Johnson, vice-president of technical strategy at ERP vendor Epicor. “Especially for smaller manufacturers wanting to access the corporate network without the hassle of a virtual private network (VPN) connection, the cloud is an enormous simplification,” he says. “Effectively, you publish to the cloud, and mobile devices access the data from there—and in the process, take some of the load of production databases.” In short, while still a work in progress, building the mobile manufacturer is less of a leap than might be imagined. But will it deliver genuine value, or just be a gimmick? We’ll have to wait to find out.


Marshalling your

resources Marshalls is the UK’s leading manufacturer of superior natural stone and innovative concrete hard landscaping products. It was established over 130 years ago and supplies the construction, home improvement and landscape markets, specialising in a wide range of products, design services and technical expertise. This study explores its selection of and implementation journey with Microsoft’s Dynamics AX ERP solution with their partner eBECS.


he Marshalls Group, which had an annual turnover of £323 million in 2010, operates a diverse portfolio of business interests from managing its own quarries through to manufacturing goods and running regional service centres. It employs around 2,400 people across 54 sites, not just in the UK, but also overseas. This diversity is one of the key reasons that Marshalls relies heavily on Enterprise Resource Planning (ERP), and after many years of using Baan software the company was looking for a solution that would fit better with its business strategy. Because Marshalls largely grows through acquisition – this meant that the solution had to be scalable to accommodate new businesses and their systems quickly and efficiently into the Marshalls model, primarily to ensure a smooth transition, and to realise the financial benefit of the acquisition more rapidly. Marshalls had a clear idea of what it wanted from a new ERP solution and assessed both SAP and Oracle, before selecting Microsoft Dynamics AX. “We were using the integrator eBECS to support our Baan solution, and because they understood our business we were able to work closely with them to select the best solution” said Paul Thomas, group information systems director at Marshalls. “They recommended Microsoft Dynamics AX and having assessed it for ourselves we could also see that it would provide the right levels of flexibility and scalability.”

Integration Implementing the new software was carried out in partnership with eBECS and, enabled as they were with a ready knowledge of Marshall’s


Specialfeature ebecs – Marshalls UK

processes, it was achieved with the utmost efficiency. “eBECS get to know your company inside out,” says Steve Donnelly, AX programme manager at Marshalls. “This is a massive benefit, because we can send them into any one of our businesses and they can talk directly to all the relevant managers and come back to us with their recommendations.” In addition to the solid eBECS support the implementation of AX was eased by its familiar interface and interoperability with other Microsoft products with their familiar look and feel and navigation. This helped with the training process which had previously been lengthy, allowing everyone within the company, to get up to speed with how to use the system very quickly. “I’ve got over twenty years of experience using ERP packages, and I would say that Microsoft Dynamics AX is easily the best,” continues Steve Donnelly. “This is because of its flexibility and its general usability – it is simple to customise – and this reduces lead times. By using more of the Microsoft stack, there are clear gains to be obtained in terms of total cost of ownership and return on investment. ”

Benefits to Marshalls One of the major advantages of Dynamics AX to Marshalls is that its use is intuitive. This reduces difficulties with staff buy-in and has encouraged Marshalls employees to use the new system to its full potential.

The AX system has the ability to adapt screens and menus as well as forms, so internally labels have been applied in a way that people understand and this makes them feel comfortable with the system. But what about the more tangible returns, so important in today’s climate, when every spend must be justified.

Marshalls reports real results in terms of business costs, productivity, efficiency, customer service and more: Cost reductions – Because visibility is possible across all companies and departments, Marshalls can assess its common suppliers and customers and negotiate better deals across the group. It is able to leverage the economies of scale by having centralised functions that require fewer people to manage them.

Microsoft Dynamics AX provides a flexible solution that can be adapted to meet the individual needs of your business. I would recommend it to anyone Paul Thomas, Group Information Systems Director, Marshalls

Finance - AX has enabled Marshalls to standardise finance processes across the Group, removing the task of consolidating many disparate systems and allowing them to reduce their reporting timescales and increase the accuracy of their reporting. Better sales focus and increased productivity – The solution integrates with Microsoft’s Business Intelligence software to provide sales analysis, detailing which products have sold, in what quantities and the level of margin – this is helping the company to keep track and plan its product line-up for the future. In addition, raising of sales orders is much quicker because AX integrates smoothly with Marshalls ‘fast quote’ system which allows the sales team to convert a quote into an order. This gives the internal sales staff more time to follow up leads, talk to customers and generate new business, rather than just processing data. Document management – Marshalls previously had to file reams of paperwork, but by using AX, all files are now held electronically and access is available to everyone. Information is fed into Word documents, which provides the businesses with layouts that are specific to customer needs, and instead of having to re-type documents, the information is available directly from the central files held in Dynamics AX. Customer service – the greater visibility that Dynamics AX affords Marshalls has improved the customer experience, reducing errors and rectification costs.

Since Marshalls implemented AX, it has used it to support its growing ecommerce activities. “We were able to put together a web company within AX,” says Paul Thomas, “and we built a front-end using Microsoft.Net and integrated the two together so that pricing, stock, product descriptions and catalogues are all driven in real-time from Dynamics AX. It automatically does all the confirmations, delivery notes and picking notes without any manual keying-in from our staff.”. For Marshalls, Dynamics AX has achieved everything that was promised in terms of flexibility, integration and usability and the company is aiming to ensure that all its existing businesses and all new businesses that are acquired will be using AX moving forward. Paul Thomas concluded: “It provides a flexible solution that can be adapted to meet the individual needs of your business. I would recommend it to anyone.”

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A storm Revealing the disruptive effect of PLM in the cloud


hile some large OEMs may still be willing to spend their budgets on traditional product lifecycle management (PLM) systems, for most of the manufacturing industry, investment in such complex and expensive products is out of the question. In this era of cutbacks and austerity, the risk of major upheaval and openended commitment, considered inherent in most enterprise IT implementations, is too much to contemplate – besides, the time and the cash are simply not available. And yet, in an industry fighting its way out of recession and eyeing its global competition with apprehension, the promises made by large PLM vendors still sound enticing. UK manufacturers tend to be open to strategies to streamline operations, improve product quality and stay ahead of the market. They have been quick to adopt ideas such as 3D design and digital prototyping, but as these become standard, they are starting to look for the next advantage. Now, it seems, the answer lies in the cloud.

Never say never Until now, the concept of PLM has polarised opinion. On the one hand, any method that helps optimise operations and makes reliable product data constantly available across an enterprise is worthy of serious consideration. Increasingly, manufacturers also need ways to handle the explosion of digital data and to


convert this valuable asset into business intelligence. However, traditional PLM is not without its drawbacks. The expense makes investment a board-level decision, which in turn means hours of debate and presentations. For this reason alone, it’s never going to provide the immediate fillip many companies need at the moment. Because of the complexity and configurable nature of many PLM systems, implementation itself can also be a challenge, requiring teams of specialist consultants and unlimited patience from those whose day-to-day work may be affected. A few years ago, when the trend for large enterprise-wide software implementations was at its peak, some software vendors went against the flow and, unconvinced that this overblown form of PLM was right for their customers, made the decision to step away from this particular market. But, this didn’t mean they stopped thinking about what PLM could

Richard Tinsdeall, Autodesk PLM sales director EMEA, discusses how Autodesk’s new cloud-based alternative offers all the benefits of PLM at a fraction of the cost of traditional systems. Does this development represent a disruptive technology shift for the PLM market?

do for manufacturers – if the technology was right.

Cloud computing makes it possible

With the growing takeup of cloud computing, Autodesk sensed that the time was right to revise its policy on PLM

Each module in Autodesk’s PLM 360 can be switched on for subscription as and when it is required

Autodesk was one of these vendors reluctant to enter the PLM market, despite the fact that its position in the CAD and data management markets, together with its policy of “democratising” technologies to enable any size of organisation take advantage, made it a natural contender for this particular territory. But the need was still there. Many of its customers were still trying to store product information in Excel spread sheets, but because of the rise in the amount of data produced, this process was becoming unwieldy and unmanageable. If they could bring together all information such as project, requirements, quality and compliance and supplier management data into one, easily accessible place, the efficiencies would be significant; ultimately resulting in better-

Specialfeature Autodesk

informed decision making and bringing together better quality products faster. The emergence of the cloud has taken the heat out of the PLM discussions just at the right time. It means that PLM software can, for the first time, be offered as a service, sitting on someone else’s server and accessed remotely from anywhere in the world. This comes at a time when the dispersal of project teams across the globe or on the move – has made fast and secure access to reliable data a real requirement to maintain a smooth workflow. With the growing take-up of cloud computing, Autodesk sensed that the time was right to revise its policy on PLM, recognising that the cloud could transform the way PLM was implemented and delivered and open it up to almost any manufacturer.

PLM 360 gives access to its cloud functionality via a fully managed data centre

PLM 360 provides an affordable means for manufacturers to turn exploding product data into buisness intelligence

Autodesk PLM 360 is agile, scalable and affordable enough to be procured without a protracted, top-down process. It is also the first cloud-based PLM solution focused on business applications beyond engineering and bill of material management. As a result, employees in a range of roles – from planning and product development to quality and compliance to service and more – can better access product and project-related information to help them continuously enhance the products they design and manufacture. In fact, PLM 360 is so straightforward that it can be deployed without outside

consultants or even an internal IT department and the system can be up and running within hours or even minutes. It is estimated that costs will be only around one tenth of those incurred using a standard system. There’s such a difference in time scales and costs between PLM 360 and legacy PLM systems that Autodesk believes it could totally transform the market. And thanks to the cloud, this market is now much larger than ever before. Running PLM in the cloud will bring benefits for small companies eager to deploy PLM for the first time and large enterprises disenchanted by traditional systems. PLM is dead. Long live PLM!

Game-changing technology The result is Autodesk PLM 360. Quickly implemented and accessed by a web browser, its user-friendly interface makes it easy to enter and navigate. Instead of every detail being configured, every module or template is included in the subscription and can be switched on when needed. With many traditional PLM systems, only a fraction of the available capability is used, so this arrangement has been designed to encourage users to try different functionality and get maximum value from the system. Users and managers will never again have to worry about upgrades and broken customisation; the application is always up to date and compatible with any customer-specific configuration. Furthermore, IT professionals are freed up from non-strategic system management since users access PLM 360 from a fully-managed data centre that provides security, high performance and disaster recovery.

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Tomorrow is just as much a foreign country as the past – and learning to be literate in its practices is far more difficult. On May 3, continues its successful string of ERP Connect events and welcomes discussion around what practical steps IT and business leaders, as well as enterprise software vendors, can take to speak a language of mutual benefit for the future. Here we meet two speakers, one from academia and one from industry, to learn more about the content of the day and anticipate a few key topics up for debate.

What is a Connect event? The Manufacturer’s Connect events are: Tailored education and networking days Focused on a range of IT systems and operational best practice techniques Structured around specially selected one-to-one meetings with solution providers Inclusive of a conference programme with industry case studies and academic insight Designed to help manufacturers challenge solution providers to deliver their strategic goals Designed to condense research processes for those keen to invest for competitive advantage and help others optimise existing assets ERP Connect events are the most prolific series in the Connect portfolio. The event on May 3 will be TM’s fifth ERP Connect event. See events/ERP-connect-2012 for testimonials on the benefits gained by attendees at previous iterations.


In theory… >>>>>>>>>>>

An expert in information systems development and management Dr Amany Elbanna is well placed to advise manufacturers of the challenges inherent in ERP optimisation – a feat which she says few have yet to achieve. “Businesses across sectors are only scraping the surface of their ERP systems,” observes Elbanna. “From what I have seen this is due to a variety of reasons, but primary among them is a traditional approach to using ERP as a transactional back office technology that fails to analyse the vast sea of data that is now being captured day in, day out.” The question users need to ask themselves, Elbanna continues, is “how can we use this data to drive innovation.” In order to do this she says there is still much to be learned from open source and social networking technologies which maximise information sharing potential.

Politically incorrect

But Elbanna explains that technology talk around data optimisation hides a bigger barrier in effecting the mental switch to ERP systems as a source of innovation. “What about your workforce and how they use ERP?” she asks. “We often forget an ERP implementation is a highly political process for companies – configuration really draws this out.” This people aspect is also the most costly part of implementation, points out Elbanna. “Typically complimentary services from vendors and integrators, such as training, are between three and seven times the cost of the technology license.” So it is important for ROI that user understanding is measured, but also treated carefully, suggests Elbanna. She explains that misuse

Specialfeature Connecting you

>>>>>>>>> Dr Amany Elbanna is a Senior

Lecturer in Information Systems at Royal Holloway, University of London and a speaker for ERP Connect this May when she plans to participate from both sides of the podium; sharing her recent research into ERP implementations, but also challenging vendors on the transparency of technology development. of ERP technology, and subsequently disappointing ROI, is often simply down to poor communication of the purpose behind user practices. “In a company I studied recently, it was found that anticipated cost savings had not been achieved because night shift workers had not been following data capture routines fully. This wasn’t due to laziness, but due to fear,” says Elbanna. “Workers were nervous as to why management suddenly wanted such high ‘surveillance’ of their actions.”

The IT crowd

Another area where politics is only likely to grow is around the role of IT professional in ERP optimisation. “Increasingly we will see the IT function under pressure from users,” asserts Elbanna. “Today businesses change far faster than their IT systems and users find they need to make tweaks.” If IT departments and individuals do not become more flexible and service oriented Elbanna warns that this will end in mounting costs. “The danger is that users will simply get out their credit cards and buy small system add-ons online,” she says. This is already a relatively common practice with regards to HR, according to Elbanna, where a new form generation system is needed instantly, but a request via IT might take nine months to materialise. In her presentation at ERP Connect, Elbanna will discuss how IT professionals and users in the business can develop partner and service-based models in order to cope with constant business change. She will also share her observations of companies which have gone one step further and started developing IT delivery techniques which play to the strengths of a new “gamers generation” in business. But Elbanna is hoping that this ERP Connect will not only be an opportunity for her to share insight. She is also keen to speak with vendors and challenge them during panel discussion sessions. “I want to hear something beyond the usual rhetoric about cloud computing,” she says. “Every time the cloud is mentioned, the same hardsell about cost reduction is hauled out. I would like to see more transparency in the mechanisms they are using to develop their offerings.” Elbanna concludes: “Vendors need to be able to assure users of the reliability of these offerings with more than just words. I want to know how they will achieve the business model and develop a fees structure to deliver cloud. They are not really engaging with the research on this.”

…and practice Peter Robinson, head of information systems at food manufacturer Yeo Valley, plans to bring a pragmatic influence to bear at ERP Connect. His presentation will draw on a chequered history of ERP experience to give down to earth advice on implementation strategy. There is a lot of talk about the strategy and value proposition behind ERP purchases and upgrades, says Robinson, but cutting to the chase he simply says: “The justification behind what we are doing is simply to move to a more mainstream platform and bring our technology up to date. Our service levels have always been higher than what vendors said they could raise us to. So we don’t have the stereotypical measures of improving stock or sales – we expect those things to happen but they are not the justification.” Whether this is a shared experience for ERP Connect delegates or not, Robinson says the important point he will make is that you must make sure the value for money proposition from your vendor reflects your real buying motivations. “I would say the biggest risk to an ERP project is the customer not understanding what they are agreeing to.”

This point quickly leads on to another of Robinson’s focal points. “I always make the point that the most important element for success in any venture is having the right people,” he says, “and perhaps that should be the first question delegates in my room ask themselves – ‘Am I capable of delivering value for the business and if not should I be bringing in help?’ This is a valid question for an IT manager who gets landed with an ERP project which he has to run in addition to business as usual responsibilities.” Giving an impression of his presentation style Robinson assures: “I will be scrupulously fair,” avoiding promotion of the system he admits he has bought into pretty heavily. “There are a lot of good systems out there today,” he continues. “The important thing is to make a well founded decision and then get on with it.” As an IT professional who has “got the T-shirt” Robinson is confident he can give some clear guidelines on how to do this, including “having the balls to stop something as well as start it.”

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Specialfeature Oracle

Brave new world

More than design. PLM technology must now gather the strnds of multiple manufacturing routes for products needing to adhere to multiple compliance regimes

The challenges facing Product Lifecycle Management have evolved significantly, finds Malcolm Wheatley.


ith little fanfare, the world of innovation has changed. New paradigms, such as open innovation (p80), and extended collaboration – are now seeing manufacturers bring products to market through development processes quite unlike the traditional in-house model. For instead of product development being carried out exclusively on an internal basis, it’s being carried out

collaboratively, working with suppliers, universities, customers and research bodies to take a new idea or emerging technology, and harness it in order to bring new products to market. What’s more, look closely, and many manufacturers are also deploying a portfolio of development strategies. One product might be brought to market collaboratively with an existing partner; another through the kinds of open innovation techniques associated with Henry Chesbrough, a professor at the University of California’s Haas School of Business; and another be developed internally. And a similar diversity applies to the process of manufacture, once the product has been developed. One product might be produced in-house, for instance; another built collaboratively with a development partner; and the other outsourced entirely to a manufacturing subcontractor. Moreover, the regulatory environment in which those products are developed, manufactured and maintained has changed, too. In industry after industry, compliance has become a significant challenge – and not just for manufacturers in traditionally regulated industries such as pharmaceutical manufacture, aerospace, medical devices and food and beverage.

Take Europe’s Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Directive (RoHS) directive, or the more recent Registration, Evaluation, Authorisation and restriction of Chemicals (REACH) directive, for instance. These effect a huge number of businesses and worse, businesses exporting the same product to multiple geographies face multiple compliance challenges. Think, too, of the need to link regulatory-complaint product packaging to the product in question. It’s a particular requirement in industries such as pharmaceuticals, of course, and in food and beverage, but it’s emerging as a problem in many other industries, too – especially in the context of globalisation. Get it wrong, and costly, embarrassing product recalls beckon.


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Challenge Roll it all together, and the result is a significant change to the environment in which manufacturers’ Product Lifecycle Management (PLM) systems must work. In short, such systems must be capable of supporting not only inhouse product development processes, but also collaborative product development processes involving multiple external partners, and bring to market products through multiple manufacturing routes while simultaneously supporting the requirements of multiple compliance regimes. “As a business, we saw this coming some years ago,” says Denis Senpere, European vice-president of enterprise product lifecycle management solutions at enterprise technology company Oracle. “We understood that existing approaches to PLM were too static, and began thinking about how to develop our own advanced PLM technology to support these emerging new paradigms.” The rest is history. In 2007, Oracle acquired the market leading Agile PLM suite, recognising in it a ready-built springboard on which to construct its vision of advanced PLM technology – a vision now badged Enterprise PLM, and enshrined within Oracle’s own Oracle Enterprise PLM application. “We kept the Agile solution on the development trajectory that had been set for it, but put it in a much broader context,” says Senpere. “In a world where product development is crossenterprise, PLM needs to be cross-enterprise, too. And be capable of acting as the master data repository of records in a cross-enterprise context, as well.” Put simply Senpere explains, Enterprise PLM is a strategic approach to managing the lifecycle of a product throughout its full value chain in a company, or across company boundaries. As such, the approach includes

The concept behind Oracle’s Enterprise PLM offering

every process in the chain – from requirements gathering through design, prototyping, certification, production, customisation, distribution and retirement. It unites all the partners in the value chain by providing a single, collaborative software platform.

Out of the box In a world where product development is crossenterprise, PLM needs to be crossenterprise, too Denis Senpere, European Vice-President of Enterprise Product Lifecycle Management Solutions, Oracle

As a result, Enterprise PLM is much more than just a technology solution, emphasises Senpere. “It represents a new, strategic approach to the product value chain that emphasises process efficiency, inter organisational collaboration, rapid innovation, rigorous quality control, risk mitigation and cost effectiveness,” he explains. And put like that, he notes, it’s clear that most vendors in the PLM market will struggle to offer such a capability. “Unless you’re talking about relatively simple innovation, or revisions to existing products, vendors approaching PLM from an ERP perspective just don’t have the bandwidth,” he asserts. “Their solutions aren’t rich enough to handle the complexity of today’s approach to innovation.” Equally, he adds, companies approaching PLM from a CAD perspective tend to be too tied to design issues, and to the need to protect revenue streams coming from their core CAD ‘cash cows’, to offer a credible solution, either. The problem? In the world of extended collaboration, there will be multiple CAD solutions within the

value chain, potentially forcing CAD vendors to cannibalise their revenue streams. “Quite deliberately, we support direct integration with multiple CAD solutions,” he says. “Today’s Oracle Enterprise PLM is more tightly connected to more CAD solutions than a PLM offering from any other vendor – and that’s because we don’t have any conflicts of interest to support the best possible integration with any CAD solution. This is total openness.” What’s more, he adds, while linking to CAD systems, Oracle Enterprise PLM also links to other aspects of the enterprise suite including, Customer Relationship Management, Supply Chain Management, and ERP. Better still, he adds, Oracle Enterprise PLM is built around the requirements of seven key industries, and specifically addresses the needs of these vertical industries with ‘out of the box’ pre-built industry-specific applications and best practices working on top of a common PLM infrastructure. “For manufacturers, the result is that deployment time is much reduced, and there’s very little need for customisation – which consequently means a lower cost of ownership and better agility when it comes to benefitting from new versions,” sums up Senpere. “In effect, we’re destroying the notion that a single PLM system can handle the needs of every industry, out of the box. It can’t, and it’s unrealistic of vendors to pretend that it can.”

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Brain behind

ERP brawn ERP can truly transform a manufacturing business – but only if intelligently directed, Mark Edwards of eBECS tells Malcolm Wheatley.


o manufacturing executives, Mark Edwards poses an interesting thought experiment. Imagine, he says, that you could go back in time to previous job roles that you have performed within manufacturing industry. How would today’s modern ERP technology help? Or think of it another way – what if there was no integrated IT at all? In a recent conference presentation to manufacturing executives, Edwards posed just such a question in the context of his own career. These days the lead consultant and business process manager at specialist manufacturing industry Microsoft ERP partner eBECS, Edwards, a graduate engineer from Durham University with a postgraduate qualification in Manufacturing Management and Technology, has previously held down senior roles at two large manufacturers.


One, a global industrial fan manufacturer, operated in three distinct business segments: make to stock, assemble to order, and make to order. Component purchase lead times were anything from two weeks to three months, he says. The second, a manufacturer of programmable logic controllers and printed circuit boards, also operated in the same three business segments and experienced even longer purchase lead times.

In retrospect In his roles at these companies explains Edwards, challenges included: reducing order-todelivery lead times, improving due date performance, cutting inventory levels, boosting factory floor productivity and reducing back-office costs. To some, it’s tempting to see lean manufacturing as playing a significant role in delivering on

these objectives. And indeed, Edwards isn’t dismissive of such a suggestion. Traditional lean manufacturing principles could have played a part, he acknowledges – although traditional, ‘manual’ lean isn’t ideal for the complex bills of material of make to order environments. Better by far, he says, to take advantage of the IT-enhanced lean capabilities of modern ERP systems such as Microsoft Dynamics AX. “The notion of ‘runners, repeaters and strangers’ features very strongly here in such businesses,” he observes. “Are you going to generate a sea of ‘one off’ paperwork to deal with repeaters and strangers? Spreadsheets, phone calls, and manually-generated kanbans won’t suffice, especially with the lengthy lead times involved. You can’t un-invent ERP – so why not leverage its strengths, and augment those strengths with lean principles and tools as appropriate?” Yet even so, he adds, if lean isn’t the complete answer, then it would be equally naïve to see ERP as a ‘one size fits all’ universal panacea. In others words, ERP can help – but it has to be applied intelligently. “It’s pointless seeing ERP as a plug-in replacement for your existing systems, and then sitting back and waiting for improvements to happen,” asserts Edwards. “You have to start with an understanding of what needs improving, and a knowledge of exactly how you expect ERP to deliver those improvements. In other words, you start with what qualifies you for new business, what wins it for you and then what in the ‘as is’ situation is hindering you? Then you establish what the ‘to be’ needs to look like and what you need to do in order to reach it.” And in the context of two companies in question, he notes, it wasn’t difficult to see where ERP could have made – and ultimately did make – a difference to the bottom line.

Specialfeature eBECS

Kanban types in Dynamics AX

And what if more business could be won – if only it were only possible to improve order due date delivery performance? Wave a metaphorical magic wand and what does ERP deliver for Edwards’ two former businesses?

Lessons learned For the fan manufacturer, Edwards posits a number of clear improvements. On time in full due date performance, for instance, could have been boosted through ‘available to promise’ and ‘capable to promise’ tools, finite scheduling, and simple minmax replenishment capabilities. A combination of lean-style kanbans and statistically-derived safety stock could have reduced lead times. Forecasting at the right level in the bill of material and kanbans could have cut inventory levels. And backoffice costs could have been cut with automated purchase order handling. Likewise, he argues, the electronics manufacturer could have seen distinct benefits from ERP. A project-planning perspective could have helped its make to order business, especially with an understanding of true costs. Again, judiciouslychosen combinations of kanbans and statistically-derived safety stock could have reduced lead times. Sales order pegging,

You can’t un-invent ERP – so why not leverage its strengths, and augment those strengths with lean principles and tools as appropriate? Mark Edwards, Lead Consultant and Business Process Manager, eBECS

back-to-back ordering, and automated materials planning could have reduced back-office costs, with a spill over into direct labour costs, too, he adds. And there’s more besides, emphasises Edwards. Engineering change control, lot traceability, quality sampling, improved product configuration: in each case, there’s a role for them to play in helping to address the very specific challenges faced by each business. But, as with the other improvements, those improvements are only possible when thorough preparation has put in place an appropriate framework in which to apply each piece of the ERP toolkit. Which, says Edwards, is one of the most important aspects of such ‘after the event’ thought experiments. “Here’s a business that you believed you knew well, yet much of what an ERP implementation would have required had actually been left undefined,” he notes. “For management, the temptation is to fire-fight, and not put in place the detailed understanding of the business

that actually plays a huge part in underpinning improvements.” Have value streams been mapped? Does the business know which are its repeaters, runners and strangers? Have cycle times and setup times been set up and validated? Have ‘Five-’S’ disciplines been put in place on the factory floor – and in the offices? Are stock levels based on statistical models or gut feel? Are actual supplier lead times measured and monitored? Is back-office productivity measured? “Such basic questions underpin the operation of the business, but are often left unasked or unanswered,” he stresses. “From a strategic perspective, one of the great strengths of ERP is that – done well – it forces manufacturers to engage with such issues, rather than relying on custom and practice.” In other words, ERP’s transformational capability owes more than might be suspected to the environment in which is it implemented. Prepare the ground well, and success is more likely. As was the case for the two companies discussed here.

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Whither retail?

Mike Evans, research director at industry analyst firm Cambashi, considers the opportunities for manufacturers in the world of internet commerce.

Business to Consumer (B2C) internet commerce is growing as consumers get used to buying goods on the internet. By 2016 GFS suggest that more than half of all Christmas packages will be internet commerce parcels. When internet commerce first emerged most technology observers expected that it would inevitably lead to consumers buying products directly from manufacturers rather than via retail or wholesale networks. Futurologists predicted that companies like Nestlé, for instance, would sell direct to their consumers so as to avoid the downward pressure on their margins caused by the purchasing power of supermarkets. They even invented a new word for it - ‘disintermediation’. It has not happened. Supermarkets established their own highly effective online stores and even for vertical product categories, established retailers like Comet are moving more and more away from in-store to online trade. Indeed if anything there has been a trend for ‘intermediaration’ as B2C internet commerce now relies on a network of new middlemen such as eBay

and Amazon and their parcel delivery systems. But is the time ripe for ‘disintermediation’ and can manufacturers benefit? The fact remains that unless transactions reach a certain size, the cost of physical distribution of goods from manufacturer to consumer becomes too high a proportion of the final price. Creating a web presence that enables the consumer to take the risk of buying a product unseen is also a challenge. Even so, the benefits to manufacturers of setting up effective online stores – which few have yet done – could be tremendous. Not only would companies gain margin, they would also obviate intermediaries which divert interest to competitors by asking consumers to first select categories of products and then select a manufacturer. Different manufacturers in each category are potentially represented unfairly by such system since organisation of categories is known to influence consumers. 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. Will manufacturers acknowledge the change and seize the opportunity? Let us know your thoughts by emailing or contacting @Cambshi on twitter.

Rolls-Royce moves to multi-vendor strategy

As it finalises its move to a multi vendor strategy, Rolls Royce has awarded a key IT contract to Capgemini, placing the consulting and outsourcing firm in the newly created role of service integrator.

In a three year outsourcing contract Capgemini will work with Rolls Royce to ensure that the specialised IT outsourcing services provided by a number of vendors will operate effectively together to support Rolls Royce operations in 50 countries worldwide. The new contract is seen as key to the success of a pioneering IT strategy at Rolls Royce in which a single main supplier is replaced by a number of specialised outsourcing vendors able to provide ‘best of breed’ components in the company’s overall IT environment, enhancing quality, flexibility and responsiveness. “It is vital that our world class products, services and people are supported by equally world class IT, and that is what our new strategy is designed to achieve,” said Simon Ricketts, chief information officer at Rolls Royce.


IT in



Unlicensed software proves an expensive mistake Turning a blind eye to the use of unlicensed software? Two recent cases highlight the risks. In one instance, Armstrong Medical Limited, a County Londonderry based medical equipment manufacturer, was caught using unlicensed software, with consequent cost to the business of nearly £12,000 in settlement fees and the cost of purchasing the software licenses that it needed to ensure it was legally compliant. In another recent case, Blackpool-based George Morrison, a building services engineering company, was found to be using unlicensed software products from Microsoft and Autodesk. The cost of settling with the Business Software Alliance – which led the investigation – was £10,000. “Companies must recognise that the abuse of intellectual property rights is a serious offence and will not be accepted,” said Philippe Brière, chair of the Business Software Alliance. “Settlements such as this one can seriously damage a company’s reputation and are evidently costly. What’s more, the use of unlicensed software exposes businesses to significant security risks.” Business Software Alliance members include Adobe, Apple, Autodesk, Corel, Microsoft, PTC, Siemens, Symantec, and The MathWorks. As well as providing software compliance tools and guidance on licensing, the Alliance also funds a confidential ‘whistleblower’ hotline, soliciting reports – perhaps from disgruntled employees – of illeagal software use. Overall, according to the Alliance’s enforcement statistics,

the cost to UK businesses of using unlicensed software throughout 2010 was over £2 million – more than double the cost to business in 2009. The figure includes settlements and the cost of acquiring new software licenses in order to become compliant. The largest settlement in the UK last year was for £40,000. However, the costs quoted only represent the amount paid out as a direct result of Alliance legal actions. The real cost is actually higher, according to Brière, as the

official statistic excludes companies’ legal costs, as well as other indirect expenses, such as disruptions to business operations, the impact to cash flow when having to make unplanned software purchases and damage to companies’ reputations.


Insulator manufacturer moves ERP and CRM to the cloud Following a management buyout of electrical insulator manufacturer Allied Insulators from the Wade Ceramics Group, the management team were told that their Sage-based ERP and CRM systems would be turned off within a matter of weeks. As it turned out, this was something of a blessing in disguise: the Sage system didn’t incorporate customerfacing business processes such as quoting and tendering, with the result that data entry processes were repeatedly duplicated across different systems such as invoicing and accounting. “The Sage system was sufficient for the back office accounting processes and financial planning, but we were spending approximately an hour a day duplicating data entry across multiple

disparate silos,” said Jon Knapper, managing director of Allied Insulators. “We needed a solution which could incorporate all business processes from quoting and tendering data, business activity and profit and loss, inventory and order traceability, which would allow us to extract accurate, real time business intelligence for our monthly management reporting.” Allied Insulators identified a solution in NetSuite ERP and CRM. This offering is hosted in the cloud by specialist NetSuite consultancy First Hosted. Implementing this move has not only eliminated duplicated data entry, but also added useful new functionality. “NetSuite runs everything for us, from managing front end processes, right through to all our accounting and management data,” said Knapper. “The solution was less expensive than Sage, and in our opinion is far more effective.”

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Keep an Open innovation can accelerate time to market. Image rights reserved by ReillyButler

Modifications to the Patent Box in this year’s Budget are designed to encourage R&D investment in the UK and to get companies innovating. But how can UK manufacturing ensure that maximum value is extracted from these new government measures for individual firms and the industry as a whole? Dave Croston, partner and patent attorney at Withers & Rogers, argues that open innovation has a role to play.


ver the last few years, an increasing number of organisations have become involved in an approach to innovation that is described as ‘open’. Broadly speaking, open innovation is any kind of innovation which is not in-house, silo-based or secretive. However, for a true representation of ‘openness’ in innovation, something more is required of an organisation. They must reach out to the outside world, revealing sometimes sensitive issues or requirements in order to seek solutions from third party collaborators. Many multinational businesses, which previously operated only closed approaches to innovation, have found that being more open has resulted in a higher return


on investment for R&D expenditure and revealed unanticipated opportunities to develop exciting and innovative products. Furthermore, smaller technology businesses that may previously have struggled to gain the attention of large businesses in their sector, are gaining ever more opportunities to engage with them as open innovation programmes increase in number. If new above the line tax credits succeed in attracting more foreign invsestment into the UK then this may well increase even further. Open innovation collaborations have demonstrated their ability to deliver new products to market much more quickly than if they had been developed in-house. In the current postrecessionary climate, businesses are struggling with cash management and finding it difficult to achieve growth by following standard R&D practices, which can continue for many years without bringing any real commercial gain. This has recently been particularly evident in the pharmaceutical industry. Product development approaches here are being put under pressure to change, to provide better return on investment and a lower attrition rate of investment pipe-

lines. With global R&D spend in pharmaceuticals dropping for the first time in 2010, cost effectiveness is more important to innovation than in days gone by and, against this back drop, open innovation offers an attractive chance to short-cut traditional process and bring well-considered commercial products to market more quickly.

Hurdles But there are sticking points in moving toward open innovation. A large organisation may feel institutionally uncomfortable about publically disclosing its development requirements. That information may be considered confidential or market sensitive and there may be an understandable reluctance to expose perceived weaknesses to the public, including competitors.

Specialfeature Design and PLM

Ownership of IP rights, both in terms of background technologies and programme-related technology, is a common reason that open innovation relationships flounder or don’t even begin. Caution persists and most companies seek advice about how to protect their knowledge and IP before getting involved in any collaborative R&D initiatives. This is largely justified. It would be foolhardy to release valuable IP without a clear understanding of who owns what, what each party can do and what the IP owner or owners can expect to get in return. The most successful open innovation relationships have involved the collaborating organisations securing buy-in to the open nature of the process at the start. This means realising that sharing information about a commercial need is unlikely to be damaging to a business. It is likely that competitors already know about areas of weakness in the products of others and vice versa. Thus, the downside risk of publically declaring that weakness is rarely as significant as it first appears. The upside opportunity - to plug capability gaps with a product from a third-party collaborator - will usually outweigh the risks and to pursue such opportunities, the external technology provider should be prepared to surrender some control over IP ownership.

How it’s done The principles of open innovation are already commonplace in some sectors. The aerospace engineering industry, for example, has been collaborating on R&D initiatives for years, largely out of necessity. When it can take a decade to develop a component for use in the construction of a new aircraft and the specialist knowledge is outside the prime manufacturer with a supplier, then long-term partnership is essential. Despite noting open innovation in parallel sectors however,

some smaller knowledge-based businesses remain skeptical. Any business choosing to get involved in early stage discussions about open innovation projects should set clear ground rules in advance. They should ensure that these discussions are treated as confidential, while allowing the parties involved to talk freely within the confines of the specific ‘quarantined’ programme area. Before embarking on an open innovation project, both partners need to establish exactly what they hope to get out of it and this needs to be discussed with a sense of fairness that takes into account the investment being made by each of the parties involved. The professional advisors chosen to represent organisations involved in open innovation projects must be fully briefed to ensure that they appreciate their client’s commercial objectives and adjust their approach accordingly. That may entail softening the negotiation style, taking a less risk-averse approach and encouraging the various parties to stay focused on the end goal of working together. Some larger businesses have chosen to create open innovation portals where engineers can post specific questions or requirements asking for input and assistance. These portals allow an organisation to advertise their technical requirements and provide a line of communication between third-party providers and themselves. Third parties using such portals however, should take care to consider the terms and conditions which apply to submissions made through them. Cisco’s global I-prize innovation competition is an interesting initiative, which has harnessed some of the principles of open innovation in order to gather fresh business ideas which may be suitable for further development and commercialisation. The competition challenges entrepreneurs to share their ideas

Some larger businesses have chosen to create open innovation portals where engineers can post specific questions or requirements asking for input and assistance

in four categories including the future of work, connected life, new ways to learn and the future of entertainment. A cash prize is offered to the winner but all entrants are required to assign their IP to Cisco. The latest cash prize (US$250,000) went to a group of four university students in Mexico whose winning idea was to create a ‘Life Account’ that gathers information about users through connected devices in the physical world, combined with online data. In another model, a large corporation has outsourced part of its open innovation function to a third-party specialist, which advertises the corporation’s requirements and filters and assesses responses before setting up the framework of a potential collaboration. This arrangement provides the third-party collaborator with reassurance that its proposal is not being misappropriated by the corporation and also insulates the corporation from frivolous claims of breach of confidence. Whatever the model, it is important that all parties in the process understand the terms from the outset. Nasty surprises are just as toxic to open innovation relationships as they are to those in other areas of life. To some, open innovation may be nothing more than a repackaging of collaborative approaches already in use. For others, it is an exciting area of untapped opportunity. More than anything, the open innovation trend is a mindset in which the positive aspects of opportunity are emphasised over the negative aspects of risk. Any organisation approaching an open innovation relationship should do so with an optimistic, commercial outlook tempered by strong, pragmatic IP advice.

For further innovation on Withers & Rogers involvement in open innovation projects in the manufacturing sector contact:

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UK manufacturers continue to be impacted by metal theft. At the close of January 2012 a Written Ministerial Statement from the Home Office announced bold legislative steps from Government to tackle the issue and the harm it inflicts on businesses, communities and national infrastructure. Nicola Guest of factory service specialist Alchemy Metals assesses the need.


he intention of government’s suggested intervention over the issue of metal theft is to prohibit cash payments from the entire scrap metal sector and to introduce significant increases in the penalties used to punish unscrupulous scrap metal dealers. Legislation to this effect may come into force as early as April this year through laying amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill.


Victims and their costs Simon Schlaefli, managing director of Tenable Screw Company and president of the British Turned Parts Manufacturers Association (BTMA), certainly welcomes the statement but has concerns it will not be enough. Tenable have had to invest in significant increases to site security in the last couple of years in order to deter the constant opportunists trying to enter their works and lift metal.

Scrap metal is big business but not always above board

Unless powers are put in place to tackle the unregistered merchants, metal theft will continue Simon Schlaefli, Managing Director, Tenable Screw Company

Other members of BTMA have done the same. The impact of theft is hard hitting. In addition to possible damage to plant and equipment of loss of supplies there is downtime to be considered. Tenable have recently lost four production days due to metal theft when the local telephone exchange was stripped of 100 metres of copper cable. Power to pursue the offenders for crimes like this are limited. Currently the police only have powers of entry into registered scrap metal merchants while unregistered merchants are easily able to work below the radar and it is likely that these are the ones that will continue to flout any new laws. “They’ll still get away with it” comments Schlaefli, “unless powers are put in place to tackle the unregistered merchants, metal theft will continue, to protect everybody effective legislation is essential and must be supported by both suppliers and merchants alike”. Tenable already have good site security, they operate a closed yard system and have CCTV in place. They also try to keep their site as empty as possible over the weekends. They have had to remove sign writing from all company vehicles, previously a good form of advertising but now simply an opportunity for thieves to target them. Another victim of metal theft is specialist labels manufacturer, Rudd Macnamara. It has very recently suffered its second attack from metal thieves who this time stripped the lead flashing from the factory roof. Again, while the direct cost of the theft is likely to be a £7,500 insurance claim, disruption to production is also a concern – as are ongoing legacy costs from the theft. Managing director, Graham Caunce advised: “Our insurance premiums will rise and in addition it’s likely that increased security measures such as rooftop CCTV will be insisted

Specialfeature Metal theft update

upon by our insurance company; the sooner that legislation happens the better”.

Winds of change? Alchemy work closely with key organisations such as BT and the Energy Networks Association (ENA). Tony Glover, head of press and public affairs at the ENA stated: “We wholeheartedly welcome the Government’s announcement on introducing a cashless system and higher penalties. This is a welcome development and something we have long called for. However, we are concerned that the package of measures we have called for will not be introduced at the same time. We believe that to effectively stamp out metal theft there needs to be a radical change in how the scrap metal industry is regulated.” The additional areas of change that Alchemy and key infrastructure companies are calling for include a robust licensing scheme for scrap metal dealers (rather than the present registration system). Furthermore, there has been a collective call for the introduction of police powers to close unscrupulous scrap metal dealers along with authority to search and investigate all premises owned and operated by scrap metal dealers. The use of photo ID and CCTV for the identification of scrap sellers and their vehicles has also been suggested. It is unlikely at this stage that these additional changes will take place in this Parliamentary term and therefore an additional 12-18 month wait for significant improvements is inevitable. Banning cash transactions while a very positive move will not offer a comprehensive solution in itself. Unfortunately in the absence of a complete overhaul an increase in black market metal recycling is likely.

Keep above board On the issue of cash payments however, there is room for improvement in how well manufacturers are acting to protect themselves from unscrupulous dealers or from falling fowl of the law in their own right. The Home Secretary, Theresa May, has commented that “the widespread use of cash facilitates poor record keeping by the metal recycling industry and can support tax evasion activity” and indeed many UK manufacturers continue to receive cash payments for their materials. For some this is a legitimate payment, all above board and essential paperwork is in place. For companies like these, the future will simply mean moving to a different payment method. Others however, receive cash with no paperwork or traceability at all and are clearly avoiding taxes on their waste materials. Schlaefli from Tenable has clear views on this practice. “These companies need to start running their businesses properly,” he says. “They are clearly going to get caught if they continue receiving cash. They are depriving their own company of profit, you can’t have it both ways.”

Fast facts

Official figures from British Transport Police show that metal theft costs the UK economy £770 million a year The most highly prized metal by thieves is copper While hot-spots exist nationwide the North West is considered particularly hard hit by metal theft There are 2074 registered scrap merchants in the UK and an estimated 800-900 unregistered scrap merchants

Perimeter fencing and security investments are on the up as metal theft conitues to hit manufacturers hard

No metal, no theft In response to rising incidences of metal theft some companies have developed alternative materials to substitute the most vulnerable metal features in targeted industry facilities. Fibrelite is one example. This Skipton-based manufacturer of lightweight but strong fibreglass composites has grown a broad product portfolio over the last 30 years and now offers a variety of manhole covers, electrical junction boxes and fuel tanks, to name just a few innovations. Fibrelite’s composite covers have zero re-sale value in the scrap market. To date Fibrelite have sold 250,000 covers worldwide – largely to the UK, US and Malaysian markets. Find out more at

For manufacturers that are receiving cash the forthcoming legislation is an opportunity to review their current systems. Traceability is key and under sections 2.1 and 2.2 of the Duty of Care Act every single manufacturer has obligations that should be adhered to. Manufacturers should be managing their metals scrap in the same way they would every

other area of their business, professionally and with due attention to Health and Safety and Environmental legislation. At the time of going to press the legislative changes are at ‘Report’ stage in the House of Lords. The devil will be in the detail of these amendments and the coming weeks will bring clearer guidelines for all concerned.



Treasure reviews the highlights from EEF’s first National Manufacturing Conference on March 6th

Ed Miliband impressed with his fluid speech but exposed a sketchy understanding of industry during questions

Questions from the floor. Delegates at the EEF National Manufacturing Conference challenged political speakers


rom start to finish March 6 was a day that put UK manufacturing in the spotlight. Before manufacturing trade body EEF was even able to get the ball rolling at its first national conference event, headlines in the broadsheets and industry press alike were reporting Nissan’s announcement that a new plant in Sunderland is due to create 2,000 jobs in the UK manufacturing sector. From there on contributions from political figures and high profile industry speakers – not to mention challenging questions from ‘on the ground’ manufacturers in EEF’s audience – made the UK’s forgotten industry a leading story for the day, a position in the public eye nicely rounded off by the leaking of a letter from Vince Cable toward its close. This missive lambasted the coalition’s approach to industrial policy. But there was more to EEF’s National Manufacturing Conference than political soapboxing. Workshops focusing on three key themes of growth through exports, alternative finance options and innovation strategies ensured that the realities of business were not forgotten – nor the responsibilities of business leaders to pursue success of their own accord, rather than relying on government support.


Vince Cable admitted doubts over Michael Gove’s judgement in downgrading the Engineering Diploma.

Vocal throughout the day, Andrea Rodney, director of Midlands engineering company Hone-All Precision, advocated this ‘if you want something doing – do it yourself’ approach in the closing panel discussion session saying, “I don’t need subsidies. If I deserve to be in business I will look after my own business.” Panel speaker Jan Ward, CEO of specialist alloy supplier Corrotherm, also took a bracing stance on the responsibility of manufacturers to be more assertive in their approach to competition and coping with the business environment they have

to hand. “It’s not a level playing field. Stop moaning about it,” she said. This pragmatism was well supported in the sessions investigating finance options and those highlighting different approaches to innovation. Delegate feedback from the day indicated that 59% of delegates rated the innovation speakers as “very good” and 24% found the quality and relevance of the finance sessions to be “excellent”. Those looking for growth through exports were, however, generally frustrated to find


Review: EEF National Manufacturing Conference

that the presentations and discussions on this subject reflected a day-to-day experience of poor information and practical guidance for companies looking to export. Several delegates told on the day that they felt many organisations which claim to offer support services for exports simply avoid facing up to the challenges of bureaucracy when scoping opportunities.

Overall though, feedback from the day must have elicited much contented back slapping for the event organisers. Eighty eight per cent of attendees found the day overall to be “relevant” or “highly relevant to the challenges faced by their businesses.

Dick Olver, chairman of BAE Systems called for a “growth test” to be applied to policy decisions.

Read our Naked Engineer’s review of the day online at:

Keynote highlights Labour leader Ed Miliband was among the first speakers to take to the stage at EEF’s National Manufacturing Conference. Key points from his speech were: Announced new research, headed by Sir George Cox, into long-term approaches to corporate governance and industrial policy; Expressed an intention to develop a patriotic industrial policy, differentiating this from protectionism – Mr Miliband said these had become confused by government; Called for a review of government procurement practices to halt loss of contracts to foreign companies; Criticised low levels of bank lending to UK SMEs and drew a vision for a British Investment Bank to resolve SME access to finance issues; Slammed the recent downgrade in value of the Engineering Diploma.

The leading industry keynote was Dick Olver, chairman of BAE Systems. Mr Olver said: Government should apply a “growth test” to all policies to ensure they consistently support national economic interests; The key to industrial success is getting “the right skills in the right places at the right time”; The potential of UK manufacturing to rebalance the economy is proven in its higher productivity per organisation. BAE in particular is 85% more productive than the national average; The underlying challenge to achieving this rebalance is in addressing the “role and status of engineering in the UK.” (see p28)

Business Secretary Vince Cable spoke just hours in advance of news of a leaked letter from himself to the Prime Minister and Deputy Prime Minister. This communication condemned the government’s lack of action on creating a strong industrial policy. At EEF’s conference Cable’s focus was on: The new Catapult centres (formerly known as Technology Innovation Centres) as a means for achieving a more “planned and proactive approach” to “finding out what we’re good at”; Promising a more “confrontational” approach to stalling EU regulation in order to avoid further red tape constraints for business; Ensuring that decarbonisation policies do not result in deindustrialisation for the UK.

EEF’s National Manufacturing Conference made a hit in the twittersphere. Here are a few of our favourite #ukmfgconf tweets from the day @rach_e: He talks the talk. Says the right things. Uses the right hairgel. But a lack of tangible “how we would do it talk” #miliband @paulmyerski: Oh Ed Siliband! He says his party doesn’t believe that loss making companies should get Govt support. Forgot bank bailout Ed? @archiemohan: I’m no leftie but Ed Miliband’s speech in #ukmfgconf was one of the best and economic speeches this year. Well spoken, more policies now. @marnold56: Dr Vince Cable not freestyling like Ed but he’s got actual policy to refer to! @ScottBreese: Biz’s like FedEx, Intel, Nike, Apple, Ben & Jerry’s, Compaq and AOL, received money from US Federal Government. UK needs similar. @mymas_mfg: Cable insists that Government will be more confrontational when looking to keep intrusive EU regulation at bay @AndyrRumfitt: Despite Lombard lending 15% more in asset finance and £4 billion to UK firms much more potential to fund plant and technology @chriscoopey: Asked Mr Cable whether Mr Gove consulted before Engineering Dip was devalued in GCSE equivalency - ‘conversations are ongoing’ @sianharrington: Skills agenda huge says Olver. All mfg co could reach out to local schools to help interest kids in maths & science @deekaypee999: Over 500,000 engineers needed in the next 5 years for industry just to stand still Dick Olver @rach_e: Jonathan Watkins; Ceres Power says waive stamp duty & stop engineering grads paying back loans for 3yrs to arrest talent crisis @MyMaskcouk: My mask in favour of a Made in Britain mark. #ukmfgconf Proud to say all our celebrity masks are designed and made in Blackpool, not China



Review: SAP Manufacturing Innovation Forum

The factory used to be seen as separate, but with the uptake of just in time, the factory is now part of the supply chain.”


Get some

backbone On March 8, SAP hosted a Manufacturing Innovation Forum to investigate the untapped potential for manufacturers in their ERP systems. Tom Moore reviews discussion at the event and discovers the opportunities available to optimise efficiency through streamlining ERP systems.


ore than 22% of manufacturers are planning to invest in ERP; it has long been recognised for putting order into process and has become a backbone of business. But on the way to ERP benefits and the streamlining of processes and functions, business flaws are often exposed and companies are forced to face up to their faults. For Keith Ross, company secretary at flight deck seat maker Ipeco, and a speaker at SAP’s Manufacturing Innovation Forum, however, this was a positive experience in the end. “In the past, people have been able to duck and dive, taking shortcuts to get things even more wrong and waste even more time. Now things get done first time because the processes are there.” For SMEs like Ipeco, the drive to invest is “a demand driven by the customer. One of the prerequisites to work with OEMs


is that suppliers integrate with their systems”. These were the words of John Antunes, director of SME and Channels at SAP who also commented: “You speed up your decision-making to maximise opportunities by having data readily at hand with fully integrated software. This means you can make a decision within 10 minutes instead of four hours. Interlinking applications, analytics, mobility and the cloud is what brings data to life so that customer expectations and time scales are managed.”

Technologies to watch But what does customer focus mean it terms of technology investment priorities? According to Pierfrancesco Manenti, head of EMEA for market research firm IDC Manufacturing Insights, the next decade will be about operating in a more intelligent economy where IT investment will be led by the cloud, big data, social business, and mobile. And according to IDC’s surveys manufacturers agree. Ninety per cent of them say that this kind of technology will change the way they work. Addressing forum attendees Mr Manenti explained, “We need to bring intelligence and become customercentric by embracing new technology. Firstly, we need to integrate people by providing them with the right information and advanced collaboration tools. Secondly, the factory must integrate into the network of global operations and focus on customer fulfilment.

What this amounts to is a need to streamline software because data. This tends to be stored across too many platforms, according to forum speakers. Many firms are operating with single business applications for engineering, marketing and administration. These don’t talk to each other and this impacts on customer service. For companies that export, challenging lead times, separating the customer from their orders are difficult to manage, especially if demand changes en route. For printer manufacturer Brother, which mainly manufacturers in the Far East however, standardising IT throughout the business has enabled the supply chain to be managed more efficiently. Order fulfilment has increased and, by curtailing the ability of sales to inflate their figures, inventory has been reduced. The SAP software rolled out across Brother also allowed comparisons to be made between its different factories and operations. It flagged up the cheaper cost of servicing goods in Germany over France, for instance, thanks to the German decision to send new products below a certain value to customers experiencing problems – rather than send an engineer which had a higher cost. This approach has now been replicated across Europe bringing huge savings. Using ERP to drive business innovation, for efficiency and cost reduction will become a growing expectation on IT professionals and system users. To find out more about how ERP can become a force for innovation in your business, come along to TM’s ERP Connect event on May 3 and grow the discussion s stated at SAP’s forum. (See p68 for more on ERP Connect).


Review: Global Manufacturing Festival

For companies of any size looking to access markets that need special materials, including; aerospace, nuclear power, oil and gas and medical products, the GMF in Sheffield was the place to be in March. Will Stirling was there to soak up the knowledge.


hey put on a good show in Sheffield. Company directors, metallurgists, nuclear engineers, blade-makers, systems integration specialists, medical product manufacturers, skills practitioners, academics, students and more descended on the Sheffield City Hall on March 21 for the convention part of the two-day Global Manufacturing Festival (GMF). The first day of the event, the ‘Get Up to Speed’ youth

engagement day hosted at the Ekspan Centre, featured the world’s fastest sailing boat, a Vulcan bomber and bobsleigh technology. Over 1,000 schoolchildren and young people visited the event to get handson experience of engineering, impressive on a school day in a city of Sheffield’s size. Sir Roger Bone, president of Boeing UK, gave the University of Sheffield Business School management lecture that evening. Boeing has a surprisingly deep supply chain in the UK, with 250 UK suppliers, and now employs over 1,200 people here. While the 787 Dreamliner has the highest number of UK-derived componentry of any Boeing aircraft, in fact Boeing Defence UK is the high growth branch of the company. Over 340 delegates attended the main event, the convention. About 30 local businesses as well as sponsors Nabarro, NatWest, Siemens, both city universities and more, hosted stands and foreign delegates representing countries including Brazil, China and Macedonia

attended the festival to explore business opportunities. The high-level speaker programme delivered on its aim of showcasing the South Yorkshire region as an epicentre of special materials engineering expertise. Organiser and executive director of the Sheffield Chamber of Commerce, Richard Wright, aims to become one of the top five centres worldwide in this field. The programme covered three main streams:

Markets and opportunities EEF’s chief economist Lee Hopley started the festival with an overview of the manufacturing economy. Like the curate’s egg, it has both good and bad parts. The strong theme was that, owing in part to EU uncertainty, manufacturers are looking further afield for business, into the BRIC group and beyond. EEF’s chart of the make-up of overseas markets for UK-manufactured goods showed that by 2030, the US, EU, China and the rest of the world each made up between one-fifth and one-sixth of the total, a stark change on 2010 which is dominated by the EU and US. Ms Hopley expects the recovery momentum in manufacturing to pick up. World Nuclear Picture – Chris Squires of utility EDF promoted the virtues of the UK’s new nuclear build programme to UK manufacturers. Some in industry had felt that, as a French company, large tracts of any contract given to EDF for commissioning a nuclear power station would go to French companies. Mr Squires’ message was clear: the prime contractors, including Roll-Royce and Areva, would take the responsibility for the



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Review: Global Manufacturing Festival

high level technical systems. But between 60%-80% of a power station’s value will be subcontracted to manufacturers in the open market. The next big stage for UK new nuclear build comes in December, when a decision on planning permission for Hinckley Point will be made. So confident is EDF that planning will be approved that it has begun to remove 3.5m cubic metres of material from the site – which it must replace if planning fails. Andrew Peters of Siemens VAI gave an enlightening talk on the six new age capabilities that he thinks means the UK manufacturing has a bright future. Details of his presentation are available on the online version of this article at www.

Technology and enterprise A senior line-up articulated just how vital special materials are to a high value manufacturing sector. Retired chief executive of Smith & Nephew, Sir Chris O’Donnell, explained emphatically the importance of innovation in the global medical products sector. His case study was the company’s proprietary material for replacement bone joints, Oxinium. S&N took 15-years to develop the advanced material, which has several big advantages over traditional joint materials like titanium in ease of machining, wear properties but crucially, in patient comfort. Half of the development time was devoted to creating and perfecting the manufacturing process. How do you drill holes in 304-grade stainless steel that have a 500 x hole diameter ratio? Any engineer will tell you that that number is near mythical. But it’s what the Nuclear Advanced Manufacturing Centre at the AMP in Rotherham is now working on, since it took delivery of the extraordinary £2 million, 27-metre horizontal hole drilling

With our hollow titanium fan blades, we are exploring variations which have a viscous medium inside to reduce vibration Prof Ric Parker, Director of Research and Technology, Rolls-Royce

machine made by TBT in March (Read more about this technology in the May issue of ). Professor Keith Ridgway, executive dean of the Advanced Manufacturing Institute of which the NAMRC forms a major part, explained the challenges involved in drilling small holes eight metres deep that defy the laws of physics. Next door, the AMRC with Boeing has worked on novel machining technologies to reduce the cost and lead time of a large milling and boring machine by a multiple factor, showing the research of these High Value Manufacturing centres can develop new machines in the process of manufacturing parts of the demanding aerospace sector. Rolls-Royce is a Tier One partner of the AMRC with Boeing in Rotherham. Director of Research and Technology at Rolls-Royce, Professor Ric Parker, told the festival that his company invested £908 million into R&D in 2011, some 7.6% of group turnover, and two thirds of which had the objective of further improving the environmental performance of its products. His talk emphasised the long term dedication to improving manufacturing techniques to achieve key performance targets. Perhaps one of the best is Rolls’ development of the high temperature technique for making titanium fan blades. “In applying our revolutionary hollow titanium fan blade technology to the Joint Strike Fighter (F35) aircraft, we are exploring variations which have a viscous medium inside to reduce vibration,” Prof Parker, who was awarded an Honorary Doctorate from the University of Sheffield in 2010. “Much of the early work on vibration damping was led by Professor Geoff Tomlinson of Sheffield University.” In addition to the Rolls-Royce Factory of the Future at the AMRC, two of the company’s 19 University Technology Centres are based at Sheffield University,

one in Electrical Systems and one in Controls and Electronics.

UK strategy and support In the afternoon, four different presentations expanded the scope of the festival into new areas; the scarcity of essential materials, intellectual property rights, the advantages of being of being an SME in a global market and the UK’s foreign trade challenge. Alan McLelland of the National Metals Technology Centre, also based in South Yorkshire, gave a rather ominous talk about the scarcity of, and high demand for, rare earth metals. Exotic sounding alloys like neodymium and tellurium are essential components of such commonplace applications like wind turbines, solar panels and even mobile phones. China has no less than 97% of the world’s resources of these metals, making both their consumption (with rapid growth in China) and availability to the world a serious risk to manufacturers. Harry Hutchinson of patent attorneys Harrison Goodard Foote spelt out how bad the British are at protecting their intellectual property. The UK files one fifth the number of patents as Germany, and proportionate to the size of the economy, less even than The Netherlands. Orthopaedic parts manufacturer JRI’s Dr Edward Draper gave an illuminating talk on the development of his company from a designer and assembler of replacement body joints to a developer of cutting edge regenerative medical techniques to accelerate healing of wounds. And Foreign and Commonwealth Office minister Jeremy Browne MP told the audience that despite its reputation as a trading partner, globalisation was making the UK shrink on the international stage more quickly than we might think. The challenge is to identify and take trade opportunities in a truly level playing field.

A full account of the convention at the Global Manufacturing Festival in Sheffield can be found online at


Manufacturing Summit 2012 Tom Moore reviews the relationship between industry and government at the second Manufacturing Summit held by the Department for Business, Innovation and Skills.


ero eleven yearolds want to work in manufacturing and that must change,” declared the deputy prime minister Nick Clegg addressing an audience of CEOs from manufacturing companies and supporting organisations at this year’s Manufacturing Summit at the Bristol and Bath Science Park. Mr Clegg and Business Secretary Vince Cable painted themselves as champions of industry at the event after announcing the start of the third round of the Regional Growth Fund (RGF) half an hour earlier at aerospace firm GKN. A hefty £1bn was added to this fund on the day of the summit and Clegg asserted that grants from rounds one and two of regional growth funding – which had £1.4bn earmarked against them – was also matched with £7bn of private funding. £420m went to manufacturing firms in the first two rounds of RGF and the closing date for benefiting from round three is in June 2012. Steve Radley, director of policy at EEF, praised the government for “delivering a simplified and more transparent bidding system which should help ensure that funding flows through to projects far more quickly” after complaints about delays. On a more general note, Clegg, Cable and Minister for Buisness and Enterprise Mark


Prisk were congratulated by the founder and chairman of precision machining firm Renishaw, Sir David McMurtry, who said that “the Government has renewed its focus on manufacturing.” But it wasn’t all pats on the back. Consistency in government strategy to support industry was severely questioned and the issue of skills was the central concern for many. The following points were fielded from the floor: Stop the devaluation of engineering across the curriculum Improve the standard of science labs in schools Careers advice must start sooner Parents are key to raising the image of manufacturing among young people Referring to the recent CIPD Labour Market Outlook that reported levels of unemployment could reach 2.85 million by the end of 2012, Unite the union’s assistant general secretary Tony Burke called for an interventionist long term industrial policy. He said that “unemployment is leading to a loss of vital skills and the government’s strategy of turning back the clock to the 1980s with rehashed youth employment schemes and enterprise zones will not work.”

Tom Moore talks exclusively to Vince Cable and Mark Prisk at the Manufacturing Summit.

TM: Following another £1bn investment in the RGF, has the emphasis now shifted from the financial to the manufacturing sector within government? Vince Cable: We need to help businesses create jobs and this isn’t going to happen spontaneously, so it needs government support. The RGF is the mechanism we’ve adopted as it combines with private investment, making it the best way of using taxpayer’s money. Parts of the country are highly dependent on the public sector and these are the regions most affected by the economic downturn. The North East is one of these and companies based there have benefitted massively from RGF, being awarded 66 out of the 176 national projects.


Review: Manufacturing Summit 2012

TM: Is it feasible to have 100% capital allowances for manufacturers? VC: The government is looking at how the capital allowance system operates. Our initial approach, set out by the chancellor, was to create a tax friendly regime based on cutting the rate of corporation tax on a systematic basis. This was instead of a capital allowance approach but we are looking at how to reconcile this to get investment moving. TM: Will the number of applicants taking up apprenticeships suffer after the recent devaluation of the Engineering Diploma? VC: We are putting a lot more effort and resources into apprentices but I admit there is concern among manufacturers that the engineering diploma’s they crafted are being devalued because of the way it is measured in government league tables. I have written a letter to Education Secretary Michael Gove communicating the concerns of the engineering industry because we shouldn’t let good vocational diplomas be disbanded or devalued. We are very conscious that the message about manufacturing needs to get down into the schools not simply post-school. TM: Will there be changes to the way the government hands out contracts so the British firms are prioritised? VC: We can’t be crudely nationalistic and protectionist. After the controversy surrounding Bombardier [missing out on a significant railway contract] it is clear that government contracts have been too mechanical in the past. They have been based on short-term price considerations and haven’t taken into account the strategic benefits to industry. We have made a decision to change that so that it is taken into account for future bids.

Mark Prisk takes in industry advice on appropriate policy directions for BIS at the second Manufacturing Summit

TM: What are you taking away from this year’s summit? Mark Prisk: The key actions I will take from this are to broaden the involvement of other government departments, accelerate the uptake of apprenticeships and boost exports. Apprenticeships, although not a new idea, work. We need to widen communication and involve more people; people who don’t realise what we are already doing in terms of apprenticeship initiatives. There are quite a few areas where the relationship between industry and government needs to improve, the feedback on how we can build up small and medium-sized enterprises (SMEs) to export more was very useful. I am particularly pleased by the number of manufacturers exporting, and attempting to further export. Looking at access to finance is a good route forward. With the squeeze on credit, the Chancellor [George Osborne] announced a £20bn national loan guarantee scheme which will start on March 31, and more details will arrive soon. TM: In a recent survey, over half of manufacturers didn’t realise that they were eligible for government grants. Communication is a major problem, what exactly will you do? MP: We need to use the trade bodies more effectively. A lot of people assume grants are not available because we have been cutting

government spending. We need to ensure that information is disseminated more effectively. TM: There are 340 MPs yet to nominate a manufacturer for the Made by Britain Challenge. Do you think that this response matches up with what BIS are saying about manufacturing? MP: In some areas MPs may not have a strong connection with local manufacturers. I hope this figure improves. TM: Manufacturers commented at the summit that science needs to improve in schools, do you agree with that? MP: Budget-wise we are not able to match the sort of facilities available elsewhere, but nevertheless, there is a huge gap between the best and the worst schools. There is a substantial budget for school building but the problem is that science is so varied that it is difficult to cover all the angles. TM: With companies struggling to make the investments they need, is there going to be any policy change on capital allowances? MP: We have already doubled the capital asset regime from four to eight years. We are keeping a close eye on the challenges of how to reform corporation tax and how businesses make long term investments. TM: Not in this budget then? MP: If I’ve learned one thing in life it is to not predict the budget!

Have your say at


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forklift Supplement

How to give your factory a lift

A phoenix from The ASheS d

uring the recession, many manufacturers cut capital expenditure and warehouse stock levels. The forklift truck market in the UK was hit hard with fewer overall materials to handle. Since falling to its lowest point two years ago, sales have recovered strongly as UK companies have come out of this recession with a high level of optimism. Economists at the manufacturers’ organisation EEF have commented that a rebound in investment has occurred after just one and a half years, whereas in the past, it has taken three years until business regained the confidence to start investing after a recession. After being in a hard place, the forklift truck industry has, and still is, pushing back the rock. Since December 2009, the industry has bounced back strongly with a 48% increase in unit orders to recover 60% of its recessionary losses. According to the latest figures from the British Industrial Truck Association (BITA), year-onyear sales orders for trucks increased by 20% in 2011, rising by 4,300 units to 26,100. Engine counterbalance trucks led the comeback and accounted for more than a third of all orders, as 8,800 were purchased in 2011 – 26% more than in 2010. Powered pallet trucks were the strongest category with sales accelerating by 50% in 2011. This growth was driven chiefly by significant orders from the automotive and road haulage industries, as well as the supply chain to the construction industry. Not every type of forklift truck saw a growth in unit orders last year. Fewer reach trucks, low-level order pickers and narrowaisle trucks were ordered in 2011 compared to 2010, but Simon Brown, managing director at articulated forklift truck manufacturer Bendi Translift, argues that this sub-sector didn’t take the large hit that affected the rest of the market back in 2008 and remains steady (p12). With its customers looking to get more return on their investment, Steve Richmond, director at Jungheinrich, explains how the industry is responding to this – other changes to customer behaviour (p5).


There is a trend for companies to sell into long-term propositions that include the service cost to deliver a ‘total life cost’ of a product. This has been highlighted right across this edition of TM and is no different in the forklift truck industry, with a feature on Toyota Material Handling discussing this new financial model (p10). Many industries hit by a 60% decline in sales in one the world’s biggest economies would have struggled and certainly cut back on investments, but the forklift truck industry was able to ride out the pain.. The economic downturn was unique in that workforce – 45% of senior strong growth opportunities managers at British forklift in nations with burgeoning truck companies started populations led to a shift in the their careers as engineering economic landscape, as BRIC apprentices countries began to accommodate Sales – Year-on-year sales more and more millionaires. orders for trucks increased This is one reason why 20% in 2011 the most recent recession is different to those that have Safety – Fatal forklift gone before, as investment in accidents have fallen 69% new products has remained since 2008 relatively high throughout. The point of interest – National Fork Lift Truck Association (FLTA) Fork Lift Safety Week 2011 runs Awards last month celebrated from 19 – 25 September 2012 the environmental, safety and productivity innovations from (statistics obtained from BITA within the market (p3), but and FLTA) the organisation’s warning on 22 March that over 1.2 million workers in the UK could be at risk of a serious accident because of inadequate training to work near fork lift trucks emphasises the contribution that manufacturers need to make to improve safety. Innovation around safety means that a new forklift truck may not only improve site productivity, but also improve the health of your employees. Since 2008, fatal fork lift accidents have fallen by 69%, but trucks are still involved in more major workplace accidents than cars and HGVs combined with 369 hospitalisations last year. Greater collaboration between buyer and seller emerging from service-included contracts could help to improve this further.

induSTrY STATiSTicS:

Tom Moore, Reporter at The Manufacturer

Simply the best! The winnerS ApprenTice of The YeAr

SponSored by: Mitsubishi Forklift Trucks

Daniel Mckinnon, Global Materials Handling

The Manufacturer’s comprehensive report on the forklift truck industry’s most prestigious event.


he Fork Lift Truck Association (FLTA) Awards celebrated the best in materials handling at the Birmingham Hilton Metropole on 18 February. Double-winners Combilift led an impressive field of champions on the night. The audience roared in approval as the innovative Irish manufacturer – having already scooped the Award for Innovation for its Combi-RT – collected the coveted ‘Victor Ludorum’ award – a unique gold-plated Archie statuette created to mark the Association’s 40th anniversary. The hallmarked trophy, presented for the pioneering 2008 CombiCB multidirectional truck, marked Combilift’s second success of the night at the Olympic-themed ceremony, co-presented by the UK’s most successful athlete ever, hurdles champion Sally Gunnell OBE. Other big winners on the night included Linde’s 394 displacement pump (Environment), Ravas M-Forks (Safety) and JCB’s Changezee teletruk carriage (Ergonomics); each receiving a solid bronze statuette following an open vote through the FLTA website. Meanwhile, individual Awards were presented to Daniel McKinnon of Global Materials Handling, who was named Apprentice of the Year, Clive Mansfield of EnerSys, who was named Employee of the Year, and Jim Cameron of FB Chain for Services to the Fork Lift Truck Industry, who famously designed the FB chain wear gauge. Food manufacturer McCain Foods was presented with the “Safe Site Award” for its extensive use of Virtual Risk Manager to assess operators and focus training while forklift battery firm WB Powersource, which has engineers available 24/7 across the UK, was crowned Supplier of the Year. The FLTA Awards has served as a pick of the year tool for materials handling products and services since 1995, rewarding those that strive to raise standards throughout the forklift truck industry and this year was no exception. Sally Gunnell was aided in this year’s presentations by the association’s chairman Martyn Fletcher, as well as representatives from sponsors B&B Attachments, BNP Paribas, Doosan Industrial Vehicle, Hitachi Capital, Interfit, Mitsubishi Forklift Trucks, Powercell and Yale Materials Handling.

Sally Gunnell, Daniel Mckinnon and Mike Jones of Mitsubishi Forklift Trucks

emploYee of The YeAr Clive Mansfield, EnerySys

Sally Gunnell, Clive Mansfield and Simon Duddy of EnerySys

ServiceS To The fork lifT Truck induSTrY SponSored by: Hitachi Capital business Finance

Jim Cameron, FB Chain

Sally Gunnell, Jim Cameron and Mark Richards of Hitachi Capital Business Finance

SAfe SiTe AwArd

SponSored by: doosan Industrial Vehicle UK

McCain Foods UK Sally Gunnell, Peter Sumpton of McCain Foods UK and Tim Waples of Doosan Industrial Vehicle UK


forkliftSupplement FLTA 2012

Supplier of tHe year


WB Powersource

RAVAS Europe BV, MForks

SPONSORED BY: Yale Materials Handling Europe

SPONSORED BY: Interfit MForks is designed to help a fork lift driver lift a load safely and to avoid dangerous situations, such as forks breaking. A patented measurement system is incorporated in the forks, which measures a combination of the load’s weight and its load centre point: the load moment. As a result, the MForks indicator – which is mounted in the cabin – calculates whether the load, in its current position on the forks, may be lifted safely. The indicator shows the actual load moment as a percentage of the maximum lifting capacity for the load centre.

Sally Gunnell, Chris Webb and Annie Morris of WB Power Source and Werner Meier-Ansari of Yale Materials Handling Europe


SPONSORED BY: B&B Attachments

Linde Material Handling UK, Linde 394 Displacement Pump This year Linde Material Handling has enhanced the H40 to H50 IC truck range with a bespoke displacement type hydraulic pump to further reduce noise and energy consumption. Thanks to this axial piston displacement pump, which replaces the previous internal gear pump, truck hydraulics and engine speed are no longer dependent on one another. The electronically adjustable pump reduces motor speed and therefore fuel consumption and CO2 emissions by up to 18%. Sally Gunnell, Mike Hawkins of Linde Material Handling UK and Mike Barton of B&B Attachments

Sally Gunnell, Nicola Whittle of RAVAS Europe BV and Paul Morey of Interfit


SPONSORED BY: BNP Paribas Leasing Solutions

Combilift, Combi-RT Combilift worked closely with Keyo Agricultural Services to develop the Combi-RT – a purpose-built, no compromise machine for significant improvements in the handling of live poultry. The truck has large diameter tractor tyres, all-wheel drive, 300mm ground clearance and a small turning radius – all of which contribute to reduced disturbance of litter. Fitted with a low profile, clear view, three-stage mast, it is quieter and gentler than previous equipment and offers high levels of comfort for operators. This results in reduced stress levels for the poultry and cleaner, speedier operations overall.


Sally Gunnell, Mark van den Bos from Keyo Agricultural Services, Sam Moffett from Combilift and Emma Irving from BNP Paribas Leasing Solutions

SPONSORED BY: Powercell Industrial Battery Engineers

JCB Industrial, JCB Changezee This new JCB design is ergonomically advantageous because the operator completes all change functions from within the cab. This takes extra advantage of the excellent forwards visibility during the changeover procedure, by virtue of the fact that the JCB Teletruk does not have a vertical mast in front of the operator. The changeover sequence takes less than 30 seconds between a forks carriage and a shovel. It is done by the operator engaging the safety inter-lock switch with one hand, and then selecting the correct hydraulic service with the other. Thus accidental disengagement of the pin-locks is impossible. Sally Gunnell, Chris Nowell of JCB Utility Products and Derek Anderson of Powercell Industrial Battery Engineers


victor ludorum

Marking the Association’s 40th year, an all-time FLTA Awards “champion of champions” was crowned, having been chosen from every product winner in the Awards’ 17-year history. The FLTA Membership voted to create the shortlist for this award – selecting their favourite Ergonomics, Environment, Safety and Innovation winners since the awards began in 1995. From this shortlist, guests at the event selected the Victor Ludorum winner.

Combilift, Combi-CB compact multi-directional counterbalance

Sally Gunnell and Sam Moffett of Combilift.

forkliftSupplement Jungheinrich Uk

are you getting tHe from your forklift Supplier? Jungheinrich’s director of System and Projects Steve Richmond explains how to pick the right forklift truck purchase for your business.


itH the global economic outlook still far from certain, companies across all sectors of industry are focused on delivering efficiency gains across their supply chains. This means that today’s forklift trucks, which have for so long been the workhorse of any well executed logistics operation, are now expected to work harder for longer and with minimal downtime. Most trucks on the market nowadays are perceived as sophisticated products featuring complex electronic and hydraulic systems and an attention to ergonomic design that ensures high productivity, safety and operator comfort are achieved. In many cases, what differentiates one forklift supplier from another is the added value benefits that the company can bring to its client’s business.

uSerS need to Be Sure tHat tHeir truck Supplier actually HaS tHe deSire to deliver reSultS tHat migHt appear counterproductive to tHeir profit Stream

How can you Be Sure tHat you are getting tHe BeSt value from your forklift Supplier?

Steve Richmond, Director, System and Projects Division, Jungheinrich UK

“Any company that operates a forklift truck fleet should ensure that its truck provider fully understands its needs and has the structure and processes in place within its own organisation to respond to the user’s issues as they arise.

The truck supplier should be able to work with its client to develop clear customer-led strategies. It is vitally important from the outset of the supplier/user relationship that the user is confident that his preferred supplier has the culture, style and values to deliver the kind of results he is looking for. For example, every forklift company can talk a good fleet management proposal, but few have the capability and the appropriate data in a format from which effective management decisions can be taken that improves operational and delivery efficiency. Users will only be able to derive maximum cost and efficiency gains with measurable values from fleet management systems if they have an effective communication strategy with their truck supplier. Users need to be sure that their truck supplier actually has the desire to deliver results that might appear counterproductive to their profit stream. A truck audit will often recommend reducing the fleet size which, on the face of it, is not in the supplier’s best interests.


forkliftSupplement Jungheinrich Uk

keeping truck downtime to a minimum “Users should look to source forklift truck fleets from organisations that are not only capable of supplying a full line-up of products, from counterbalance to warehouse machines, but can demonstrate that it has the infrastructure in place to guarantee the highest level of service. There is little point in any manufacturer pretending that trucks do not break down because, from time to time, they do. The frequency between technical problems and then the ability of the supplier to have an engineer on site in the shortest possible time to correct faults differentiates a good supplier from a bad one.

operator efficiency “No matter how technically advanced a truck might be, the interface between the forklift and the operator remains key to maximising efficiency. Properly trained operators are therefore essential if a forklift is to deliver ultimate throughput benefits. There are so many benefits to employing forklift truck drivers who are professionally trained. Turnaround is quicker and smoother, and accidental damage – to both the truck and the product being stored – is reduced. A sympathetically driven machine enhances truck reliability and improves general safety throughout the facility where the truck is operational. Most truck operators have realised the significant cost benefits that are achieved by choosing a forklift truck supplier with the service and maintenance credentials and infrastructure required to ensure that truck downtime is kept to a minimum. However, many truck users – both the bigger fleet operators and the smaller oneoff buyers – sometimes fail to see the substantial performance benefits that professionally trained operators can bring to their business. Of course, no one should be allowed to operate a truck without first receiving training but even experienced employees can benefit from refresher training. Refresher training may be required if the operator is involved in an accident or a nearmiss incident or if he or she has been observed operating the vehicle in an unsafe manner. It should also be considered if there have been changes to the workplace that could impact on the safe operation of the truck or if the operator is assigned to use a different type of machine, such as switching to a new high lift reach truck when they had operated low lift technology trucks before.

utiliSing tecHnology “In addition to proper and regular training, any technology that reduces the pressure on a forklift operator by making his or her day to day operational


procedures more straightforward can only bring efficiency, productivity and safety benefits. Warehouse management systems, on-truck data capture systems, radio frequency identification (RFID) systemsbased warehouse navigation systems and forklift truck personnel protection systems are just some of the technologies that are being used to deliver lift truck operational efficiencies.

truck manufacturerS will Have to take on tHe role of SyStem SupplierS if tHe potential BenefitS of integrated SolutionS are to Be fully realiSed Steve Richmond, Director, System and Projects Division, Jungheinrich UK

Going forward, truck manufacturers will have to take on the role of system suppliers if the potential benefits of these integrated solutions are to be fully realised. There are clear benefits to be gained by developing these technologies as part of the truck but it is essential that the integration of the technology is carried out carefully and is a robust solution delivered by the actual truck manufacturer. Simply bolting on lots of additional equipment will not guarantee the overall benefits and improved efficiencies that the technology can bring. It is also important to identify a clear chain of responsibility for the after sales support and maintenance of both the truck and any sub-systems that

are part of it. Where a number of suppliers simply bolt sub-systems on to a forklift truck disputes can arise over the responsibility for the ongoing management of the critical interfaces.That’s why it is important that users choose a truck manufacturer that can provide the trucks and the sub-systems – be it Radio Data Terminals (RDTs), scanners or warehouse management systems.

finance “Understandably, the question of how the purchase of materials handling equipment is funded has taken on particular importance in these difficult times. When it comes to acquiring new trucks, a range of financial options are available but many truck users prefer to acquire their fleets on contract hire packages. Full service offers an easyto-budget, steady cost stream with no surprises, but we would advise anyone entering a contract hire agreement to spend time carefully reading the contract they are offered. We advise customers to ask: what is meant by maintenance? Does it include all repairs caused by wear and tear? We remind people that what is left out of a contract is often as important as what is included, and that they should never be fooled by an artificially low price. It could mean that either you are not going to get the full service or there has been some financial manipulation on residual values. Investing in a business remains crucial, but tying up working capital could mean missing out on other opportunities. It is essential that the truck supplier offers a range of options and a flexible approach to help truck users meet both the requirements of their business and the changing needs of the marketplace.”

forkliftSupplement Combilift

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Space saving, safe and productive handling Robust and versatile Capacities from 2.5 – 25 tonnes Diesel / LPG / AC Electric

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Combilift Ltd

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Bae Systems’ finds the combi-cB a versatile solution


Systems has taken delivery of a Combilift Combi-CB forklift for its Samlesbury site in Lancashire. The ability of this counterbalance design 4-way model to handle pallets, containers and long loads has enabled BAE to reduce the amount of trucks in its goodsin area for more streamlined, cost effective and safer handling procedures. The previous fleet of four counterbalance trucks and a sideloader was not being put to effective use and inventory manager Mick Woods needed to find a universal, versatile truck that could adhere to BAE’s requirements for an all electric fleet, its stringent focus on safety and its cost savings initiative. The three tonne capacity AC battery powered Combi-CB ticked all the boxes and has delivered a host of benefits. The CB operates indoors and out, offloading and reloading vehicles for dispatch and works as a sideloader to manoeuvre 6m lengths of timber in confined spaces. Customised to BAE’s requirements, it was fitted with 1200mm forks to facilitate the handling of the timber and fork mounted weighing scales were also incorporated.

Hydraulic fork positioners, operated from inside the cab, speed up the handling of varied loads such as standard pallets and longer CIC containers which hold aircraft canopies. “The up front investment in the Combilift will quickly achieve payback and enable us to make further cost savings in future,” says Mr Woods. “Even with Combilift’s flexibility to replace a number of fork trucks, there is absolutely no compromise in its performance, whatever mode it is working in.” Combilift’s Combi-CB


Heavy induStrieS europe

positioning system has recently been introduced to increase safety in operations.

tm: witH many manufacturerS Struggling to get acceSS to finance or Having to operate on lower levelS of capital expenditure, wHat doeS tHiS mean for you? The company’s latest development, the 25 tonne lifttruck 250D-7E

Tom Moore (tm) gets the lowdown on the latest products at Hyundai Heavy Industries from European Sales Manager Gino Van der Auwera (ga) tm: How can BuyerS get tHe BeSt value for money on forklift truckS?

ga: Customers can increase productivity and gain value by buying the right truck for the right application. Additionally, by taking the total cost of ownership during the life time of the truck into account, will savings will be made over time. This implies weighing up a number of things such as durability, lower service costs, lower downtime and ease to use. Hyundai has managed of design and manufacture forklifts with a strong focus on these required elements.

tm: you mention Buying tHe rigHt truck for tHe rigHt application, wHicH of your productS Suit wHicH SectorS and wHy?

ga: The 250D-7E has a load centre of 1.200mm and 25 tonne capacity. It is ideal for use in the construction sector and at container terminals in ports. Thanks to the installation of an independent, up-to-date cooling system, the cooling fan will only start when needed. This results in less consumption and less noise.


today’S economy requireS tHat every inveStment yieldS a quicker return on inveStment for tHe company tHan ever Before Gino Van der Auwera, European Sales Manager at Hyundai Heavy Industries

Our five tonne battery truck 50B-7 suits the food & beverage industry. The dual drive with two electric motors enables very sharp turning ability in comparison with single motors. The benefit of this is that there is less collateral damage made to uprights and safety levels are increased. The 50L-7A is ideal for inside and outside use in breweries and other production facilities because of its high performance and Tier IV engine certification. The high volume range between 25D-7E and 33D-7E is extremely popular in big rental companies because of its ease of use and low maintenance. For these rental companies it is important that any operator can jump easily into the truck to do his/her job comfortably.

tm: Safety iS an important iSSue wHen deciding on wHat forklift truck to Buy. wHat Have you done to improve Safety?

ga: Hyundai Heavy Industries meets the OHSAS18001 regulations. From the five tonne up to the 25 tonne range, a load indicator and wheel

ga: Banks are very cautious when it comes to financing trucks at the moment. Today’s economy requires that every investment yields a quicker return on investment (ROI) for the company than ever before. As manufacturers replace and upgrade material handling equipment, they are looking for solutions that can meet this new requirement. The industry is responding with new equipment, technology and systems that enable complete supply chain transparency.

tm: HaS tHere Been a move towardS leaSe ratHer tHan purcHaSe Since tHe economic downturn?

ga: It is obvious that the market is heading towards leasing rather than purchase in the U.K. This implies that financing solutions will become more and more important and can even be considered a sales tool once you have it. Hyundai has anticipated this and has implemented a Hyundai Finance scheme, which provides retail financing over certain rental periods in most European countries.

tm: wHat iS tHe company’S approacH to mro?

ga: Hyundai’s European dealer network is connected through an IT platform where every dealer can order parts and receive them with an overnight delivery service. Our technicians receive technical training at the Hyundai training centre in Belgium on a monthly basis.


Impact Handling is the perfect partner because we have the power to support all of your materials handling needs; from just one truck to an entire fleet. Our strength lies in our ability to be flexible, we’ll not only supply fit for purpose trucks, new or used, we’ll tailor your finance package, we’ll supply original parts, we’ll service and maintain your fleet, and we’ll always be close at hand with 15 locations and growing. If you’re looking for a partner that’s loyal, adaptable, financially stable and hugely supportive, Impact Handling may be your perfect materials handling match.

Telephone 0800 169 9789

Thinking Cat® Lift Trucks. Think Impact Handling.

Toyota Forklift Simulator – To be launched at IMHX 2013

material Handling uk Tony Wallis, operations director at Toyota Material Handling UK, explains the finance options and life costs involved when purchasing a forklift truck.


Here are many benefits to both purchasing and leasing options; the important factor is identifying the option that is best for each business. A key benefit of rental is that it provides stable and predictable costs, a critical factor in the purchasing process for business in today’s economic climate. Rental is now the preferred option for over 65% of Toyota’s business, although the majority of the remainder will opt for a service maintenance plan to ensure equipment remains reliable, achieves maximum up time and meets legislative requirements.


A recent research study found that the current economic situation has changed the way many customers choose to finance their equipment, with customers looking at more adaptable options. As a result, suppliers have to offer the broadest spectrum of adaptable solutions to meet the business needs of their customers.

looking at tHe coSt of wHole life ownerSHip “Although acquisition is an important factor, it represents

recent reSearcH HaS indicated tHat Safety SitS witHin tHe top Six influencerS in tHe purcHaSe cycle

less than 20% of whole life costs on an average machine and the message we continue to communicate at Toyota is the cost of whole life ownership. Operator costs, damage to goods and facilities far exceed the majority of acquisition costs yet purchase and running costs are separated by most companies. It is only when they are combined that you get the true picture. A good supplier will identify whole life costs offering a broad spectrum of support facilities to maximise productivity and drive down costs. High first time fix rates, rapid response times and parts deliveries are critical and should feature high on any acquisition agenda. We try to involve the customer’s purchasing and operational managers to take the whole life cost approach. We have found that a greater buy-in from these customers who understand how we are trying to drive down costs in damage, accidents and efficiency makes significant reductions in lifetime costs. Comprehensive servicing is designed to take care of all of the truck maintenance needs, and a preventative maintenance contract is an effective way

forkliftSupplement Toyota Material Handling UK

altHougH acquiSition iS an important factor, it repreSentS leSS tHan 20% of wHole life coStS on an average macHine of preventing unplanned downtime and costly repairs or a safety inspection which ensures the truck compiles with safety standards.

wHat type of forklift truck iS Selling out tHe quickeSt? “There has been a significant increase in both the warehouse and counterbalance market during the last 12 months. During the early part of the recession people retained equipment longer and sweated the assets for maximum savings. As cost controls and business efficiency has improved businesses are looking for ways to increase efficiency. Recent research has indicated that safety sits within the top six influencers in the purchase cycle. We have always been at the forefront of safety; the Toyota Active System of Stability on counterbalance trucks has helped increase awareness of safety significantly. When we added shock sensors to the reach truck range as standard we experienced a significant increase in enquiries. Safety is at the heart of our product and remains a key priority in the development of our equipment. Our trucks are designed for industrial use and this is

Toyota Traigo 48 electric powered forklift

aS tHe world’S largeSt car manufacturer, we don’t fit our automotive engineS to our forklift truckS. we Have induStrial engineS to meet induStrial demandS Tony Wallis, Operations Director, at Toyota Material Handling UK

reflected in our engines which are specifically designed for our forklift trucks, which provide longevity and reliability. It is an interesting observation that, as the world’s largest car manufacturer, we don’t fit our automotive engines to our forklift trucks. We have industrial engines to meet industrial demands. The best equipment is useless if the service and support doesn’t match the product. In the event of things going wrong we also provide a four hour response time in the UK with a 96% first time fix, so in the event of the unthinkable, help is always near at hand.

tHe lateSt tecHnology at toyota “Sustainable alternative fuel technology is high on the agenda – we have various developments in progress that will develop over time and Toyota is taking a long-term considered approach to new fuel alternatives. Ongoing advanced technology is continually assessed and added as products develop. Another development is the new fork truck simulator which will be launched at IMHX 2013 and has been developed to help improve driver skills and reduce costs through improving operator skills.”

Service Engineer from Toyota National Service Support


the rules


orkliFt sales fell by up to 60% during the recession but Bendi was not among those that suffered. Since the recession, manufacturers have increasingly looked to invest in lean efficiency saving measures, something that Simon Brown says has maintained the company’s sales figures throughout the economic downturn. “What our truck does is recessionproof because it saves space and time, which allows companies to save money. We are now experiencing our highest sales figures ever recorded,” he says.


For more eFFicient manuFacturing Tom Moore talks to Simon Brown, managing director at Translift Bendi, to discuss how its models can save manufacturers both time and space with its articulated forklift trucks.

increasing space

you could have the Best machine in the world But iF you don’t service it properly then it will lose its eFFectiveness Simon Brown, Managing Director at Translift Bendi.

Bendi stacks the depth of the pallet with little wastage compared to other types of forklifts. Mr Brown states, “It is the articulated principle of the truck that saves space.” The design of the Bendi improves operating efficiencies and can reduce the number of trucks needed. Whereas counterbalance forklift trucks have double-pallet handling requiring two trucks, Bendi vehicles can take a pallet straight from a lorry and put it in racking in one go. Articulated forklifts also have better functionality over the reach truck, which is also designed for smaller aisles, as it is 30—40% quicker over the course of a pallet cycle because of the reach truck’s slow mast movements. Bendi’s core market has been 3rd party logistics companies but is now spreading rapidly into manufacturing with three new space-saving

ForkliFtsupplement Translift Bendi

models, including the new pedestrian machine. Brown explains that the Mini Bendi has a capacity to lift 1.2 tonnes to a height of four metres so goods can be transported in a 1.6 metre wide aisle instead of the wider aisles needed for counterbalance and reach trucks. This either reduces or utilises the amount of space needed for storage of loads or when operating in and around production areas, for example when loading tooling dies. Brown says, “The compact design enables more lorries onto the forecourt to speed up the loading process, helping companies to achieve a higher level of on time deliveries. If you need a four metre counterbalance space between each lorry then it just slows down the whole process.” Bendi’s forklifts are predominantly electric, accounting for 95% of its range. This reduces the energy costs for the manufacturer and enables the compact size of the truck. Whereas fuel and space costs are less of a problem in China and the US where a lot of manufacturers design, make and sell their forklift trucks, a UK-based manufacturer such as Bendi understands the market and has created a niche in providing vehicles that are more sensitive to space.

Buying British It is not just new trucks where Bendi excel. Blue chips such as ASDA and B&Q both take “remanufactured” machines as well as new. This is an intensive MRO programme that Brown says “is not just the check, service and paint commonly associated with forklifts.” He explains, “We strip the chassis back down to its raw components and shot blast it back to bare metal and restart the manufacturing process as if

The Mini Bendi operating in a production area

the mini Bendi has a capacity to liFt 1.2 tonnes to a height oF 4 metres so goods can Be transported in a 1.6 metre wide aisle instead oF the wider aisles needed For counterBalance and reach truck Simon Brown, Managing Director at Translift Bendi.

it were new. The company adds either service exchange parts or new parts and the machine comes out the other end with full warranty.” 2012 has seen Bendi ramp up production here in the UK, creating new jobs in the process. Brown says that more and more people choose to buy British but other than being patriotic, there are practical benefits too. Bendi has a training scheme based in the UK. As it is a niche manufacturer, it carries out a lot of its servicing direct with 40 engineers covering its UK

customers. Brown makes the point that “you could have the best machine in the world but if you don’t service it properly then it will lose its effectiveness.” Bendi sells 60% of its forklift trucks direct to the end user in the UK and doesn’t have dealers in the traditional manner. This means that it deals directly with many manufacturers. With the charge for government, retailers and end consumers to buy British to boost UK manufacturing, the same challenge could also be posed to manufacturers.


forkliftSupplement Cat

Tom Moore meets Terry Kendrew, managing director at the UK’s sole distributor of Cat lift trucks and warehouse equipment, Impact Handling.



itH a commitment to service that borders on the obsessive, Impact Handling is growing its business by improving the efficiency of handling operations for manufacturers throughout the UK. Concentrating on meeting the market’s business needs is paying dividends for their own, providing long careers with many opportunities. Managing director Terry Kendrew has over 30 years experience in the materials handling industry and has overseen this successful customer focused strategy that has created growth for Impact Handling despite the tough economic conditions. Mr Kendrew explains the company’s philosophy, “We have always tried to look at things from the customer’s point of view. We believe they need a partner who works with them and offers good

unbiased advice. They need a team that really understands their requirements and can offer flexible tailored solutions; we aim to be that partner for all of our customers without exception.” This success did not happen overnight with a reputation built upon hard work. Financial muscle has helped to establish one of Impact Handling’s key strengths in that they fully own all of the vehicles that they supply. Not only does this allow for much more flexible contracts to suit its customer’s business needs, but also means there is

no third party finance and the restrictions that these situations cause. Impact Handling were officially appointed as the sole distributor of Cat Lift Trucks in the UK and Ireland in November 2010, positive affirmation of the quality of their service. Impact Handling doesn’t only supply and service Cat Lift Trucks but a whole range of materials handling equipment and storage solutions, making them a one stop shop for their customers. This puts them in the perfect position to offer unbiased advice and to analyse the equipment required. For Synseal Extrusions, the PVC-U extrusion company which was awarded Nottinghamshire Company of the Year 2011, this approach, coupled with the flexibility that Impact Handling offer, were key factors in awarding a five year contract hire agreement to supply and maintain all of their materials handling equipment. The current fleet has machines from nine different manufacturers, with some equipment highly specialised. An around the clock seven days a week operation keeps this equipment running efficiently and ensures downtime is minimised. Impact Handling has the experience and trained manufacturing service teams to cope with demand. Onsite engineers and the ability to supply back up trucks from stock are all part of the service that has prompted Synseal Extrusion to move all of their materials handling requirements to a single supplier for the first time. Part of the total solution that Impact Handling strives to deliver is to analyse the operational needs at each site and then source and supply equipment that is fit for purpose. For Synseal Extrusions, Impact Handling has supplied lumber specifications to various Combilift trucks since bigger wheels to create higher ground clearance suits the exact needs of the site. Other lift trucks supplied include Combilift high lifters, with 9.6 metre triplex masts, and articulated Aisle Master and Cat counterbalance trucks. Other machinery supplied includes powered pallet trucks with long forks, Green Machine sweepers and specialist unique reel lifter equipment. The ability to deliver specialist service support around the clock within a flexible contract has given Synseal Extrusions options that they didn’t have before. Warehouse manager Geoff Nixon explains, “I have one person who I can speak to about all

our needs. Impact Handling make it simple and I can rely on them to get the right person onsite to sort out any issues that arise. They are actively improving the fleet to match our needs and simply allow us to concentrate on looking after our production and our customers.” Another consequence of the customer focused approach means that Impact Handling is continuing to expand their UK wide network of local service centres. Local, highly responsive service is a key requirement for many customers. It would be cheaper for Impact Handling to operate from a single base but this option would not give customers the best possible service. Listening to customers is one of the underlying principles that has established both Impact Handling and Cat Lift Trucks as leaders in their field. The new Cat EP13-20(C)PN(T) range of 48V, three and four-wheeled counterbalanced electric lift trucks, which Impact Handling has now started to deliver to the first customers in the UK, answers the direct call for electric trucks that are more durable in harsh environments. Engineered to operate both indoors and outdoors, whatever the weather, these new trucks offer longer service intervals and reduced energy consumption, with added safety features and quieter operation. With threewheel versions available in lift capacities of 1.3, 1.5 tonnes and three and four-wheel trucks with 1.6, 1.8 and 2.0 tonnes, all of these forklifts feature sealed wet disc brakes, one of the key factors that has enabled service intervals to be extended to 1,000 hours. IPx4 splash resistance and IP54 sealed traction and hydraulic motors ensure that this range of trucks lead the way where it matters most, in reliability, durability and cost of ownership. Not only can these trucks be thoroughly washed down, maximising lifespan and productivity, but the frame and mast can also be galvanised, making these some of the most corrosion resistant trucks available today. Listening to customers and meeting their business needs has shaped the way Impact Handling operates. Financial independence, a healthy stock of new and used vehicles and both a willingness and ability to offer flexible contracts means that an increasing number of customers are benefiting from a positive impact on their own bottom line.

all of tHeSe forkliftS feature Sealed wet diSc BrakeS, one of tHe key factorS tHat HaS enaBled Service intervalS to Be extended to 1,000 HourS

Terry Kendrew, Managing Director, Impact Handling


Toyota Material Handling UK

The World’s Number 1 manufacturer of materials handling equipment Toyota Material Handling is the world’s number one manufacturer of materials handling equipment. Our renowned Toyota Production System (TPS) is based on just-in time delivery, quality control and a strong team culture and is the acknowledged reference among manufacturers. Toyota Material Handling offers a single point of contact for all your materials handling needs, whatever your size of business. From a single truck user to some of the biggest names in manufacturing, we have the product and support services to be a strong business partner. Toyota is able to offer unrivalled levels of support, consisting of world-class products, fleet management, short-term hire, operator training, genuine parts and unbeatable sales and service support tailored to your business needs.

To find out more about the Toyota Material Handling UK call 0870 850 1409 or visit

Manufacturing A4 Advert.indd 1

3/5/2012 9:19:41 AM


Walk the line Ruari McCallion introduces ’s 2012 legal supplement with a warning that, as the mountain of legislation pertaining to manufacturing businesses continues to flux, non-compliance is a very easy trap for any firm to fall into.


company can find itself on the wrong side

Commission will go ahead with a legislative

of the law in all innocence; for example,

proposal; The Parental Leave Directive was

by drifting over the demarcation line

supposed to have been implemented on March 8

between ‘small business’ and ‘larger

this year but has been delayed. Even so, it is almost

operation’, and falling foul of more stringent

certain that from March 2013 at latest the permitted

regulations on the storage of hazardous materials.

parental leave period will be extended to four

And just when you thought you were maybe up

months after the birth or adoption of a child with

to date, amendments and Statutory Instruments

at least one of those months being transferable

can be slipped into the mix, adding extra measures,

between parents.

bases for inspection and regulatory penalties. The

These examples do not even scrape the surface of

Corporate Murder and Corporate Manslaughter

the mass of legislation, both headline-grabbing and

Act, for example, became law in 6 April 2008,

minutiae which can have a big impact on business.

the first prosecution took place in 2009 and two

How are companies to pick their way through this

‘Orders’ were announced in September 2011, with

minefield to ensure they are not risking big legal

very little fanfare. Unless you are a police force or

costs and even bigger fines?

subcontracting security corporation, you can relax as they are to do with deaths in custody, but they illustrate how fast legislation moves. Some possible changes due to hit this year are: The Pensions Act 2008, this introduces compulsory enrolment in employer-provided workplace pensions and sees the launch of NEST (National Employment Savings Trust) for employees who have no access to workplace schemes; The Working Time Directive Review is continuing and if ongoing talks involving ‘social partners’ do not reach agreement then the European

Find out in

’s 2012 legal supplement.


Ruari McCallion briefly summarises the issues to be covered by law firms Eversheds and Nabarro in ’s 2012 legal supplement. Price-fixing Eversheds are concerned with cartels. The free-market economist Adam

New legislation in 2012 In addition to the issues raised in the following pages Ruari McCallion prefaces this supplement with a whistle-stop tour of the changes to business regulation coming into force this year which business leaders should be aware of.

Ones to watch Flexible working – a response to the ‘Modern Workplaces’ consultation Amendment to the Working Time Regulations in regard to annual leave Compulsory equal pay audits Migration settlement ‘Protected conversations’: consultation on allowance of discussion of issues without the risk of being subsequently quoted in a tribunal hearing Compensated ‘no-fault’ dismissal for businesses with fewer than 10 employees Employment tribunal reform – including early conciliation, tribunal

Smith made an observation along the

process reform, fees for claimants and discretionary fines on employers

lines that a gathering of businessmen

who lose cases

is rarely for the benefit of consumers and that approach seems to inform some of the actions of the European

‘Call for evidence’ documents on collective redundancy rules and the effectiveness of the TUPE regulations

Competition Commission and the


national agencies. Manufacturing

Increased limits on employment tribunal awards came into force on

industries have been featuring in a high

1 February

proportion of cartel-busting actions, for reasons outlined by Eversheds partner Stephen Rose on p112. In addition, Eversheds will give an overview of the first victims claimed by the Bribery Act, which came into force last year.

Health & Safety Lukas Rootman of Nabarro discusses the new Fee For Intervention

From April The qualifying period for gaining employment protection rights expected to increase from one year to two years from April 6 Some changes to employment tribunal procedures are expected to come into force. Rates of statutory maternity pay (SMP), statutory paternity pay (SPP), statutory adoption pay (SAP) and statutory sick pay (SPP) will increase

From October Pensions auto-enrolment - employers will be required to automatically

scheme from the Health and Safety

enrol all eligible employees who are not already part of a workplace

Executive (HSE).

pension scheme into a qualifying workplace pension or the National

This scheme was due for introduction in April 2012 but if you have missed

Employment Savings Trust pension scheme. They are also required to make

it, you have a few months more

minimum contributions National Minimum Wage rates are likely to increase

to get ready. Almost on the eve of

HSE FFI (fee for intervention) to be introduced

implementation, introduction was postponed to October. FFI is, simply, a system of costs that are to be imposed on businesses that are in material breach of health and safety law. With a minimum cost of around £750, and with personnel costs at £12 per hour, even minor transgressions that do not

New UK legislation: Welfare Reform Bill - to simplify the benefits system and improve the incentives to work by implementing a ‘Universal Credit’ Protection of Freedoms Bill – to significantly scale back the Vetting and Barring Scheme

European legislation:

result in formal enforcement action,

Working Time Directive review

such as court proceedings, are going to

Parental Leave Directive - repeals and replaces the Parental Leave Directive

be expensive. Find out more on p114.


(96/34/EC). The UK Government will implement changes in March 2013

The Eversheds global industrial engineering sector group

Precision engineered legal advice Eversheds is a law firm that gives you more than legal expertise. You receive expert advice combined with an in-depth knowledge of the industrial engineering sector. Our seamless worldwide service covers organisations in areas such as: automation, hydraulics, connectors, seals, advanced engineering, process, motion and flow control and diversified industrials. We understand your issues and look out for your interests, wherever you are based. The comprehensive range of products and services we offer is designed to tackle the challenges you face on any project of any size. With clear costs and real added value, this is a service engineered precisely to your needs. Robin Johnson +44 20 7919 4754 ŠEversheds LLP 2012. Eversheds LLP is a limited liability partnership.

Countering cartels: how to be a winner fact that fewer decisions were taken

Conventional wisdom is that a price fixing cartel is the most “evil” anti-competitive offence, because consumers always lose out. Stephen Rose, partner at international law firm Eversheds LLP, considers how competition authorities are fighting cartels and the implications for compliance and ethics policies.

(four, rather than seven) and by the way fines are calculated; they are based on the amount of the relevant turnover of the cartelist and the duration of the cartel. The 2011 cases featured fewer firms and lasted less time than those prosecuted in the previous year. In fact, the average fine per firm and per cartel was higher in 2011, compared to the


2007-2010 average. hen reading

demand; high barriers

headlines about

to entry; mechanisms for

cartel decisions last year, national

competition probes

information exchange such as a

competition agencies have been

into Google,

trade association; and a history

ramping-up their enforcement

of collusion.

activities. Between 2004 and 2012

Microsoft and Apple, one might be excused for thinking that

The main weapon for deterring

the competition authorities in France,

competition authorities focus solely

and punishing cartels in Europe

Germany and Spain have opened

on trophy cases in the technology

has been company fines, with

large numbers of new investigations:

sector. The reality is: the fight against

the European Commission in the

208, 149 and 104 respectively. Even

cartels continues in all sectors .

vanguard. In 2010 it imposed fines

authorities in smaller European

A review of recent cases reveals

close to €3 billion, ranging from

countries have shown high activity

that manufacturing sectors feature

€175 million in the animal feed

levels, Slovenia for example, opened

disproportionately often in cartel

case to almost €800 million for the

26 new cases in the same period.

convictions. Why should this be?

airfreight cartel. As total fines in

Interestingly, available data on

2011 were a mere €614 million, with

total fines imposed and number

manufacturing markets are

the highest being €315 million in the

of decisions taken suggest that

identified in economic literature

consumer detergents case, it may

the UK’s Office of Fair Trading is

as indicators of susceptibility to

appear that the Commission may be

comparatively less active than other

cartel behaviour, including: a

slackening off.

European agencies.

A number of features of some

concentrated market with few

A closer look, however, reveals no

Cartels are increasingly regional

players; static/falling demand; non-

respite. The reduction in the amount

or global and the regulators

differentiated products; inelastic

of fines can be explained by the

now routinely cooperate under the auspices of the European


Number of cartels

Industrial inputs


International Competition Network



to align policies and procedures and



freight cartel involved simultaneous



dawn raids by a number of agencies.



cooperation is the consumer



European Commission cartel decisions 2007-2011


While the Commission took fewer

Competition Network or the

to coordinate investigations. The air

Another example of cross-border detergents cartel, which was settled by the Commission in 2011. The

is involved? This question goes to

Review: compliance is not a one-

companies concerned had submitted

the culture of the company and

off. It requires reinforcement and

immunity or leniency applications

its attitude to risk. Fines typically

testing. Training must be repeated

to a number of national regulators,

represent around two-thirds of

and given to new employees and

as well as the Commission,

annual sales in the affected products;

newly acquired businesses. Audits

covering a range of different but

in the most egregious examples,

can be an effective review tool.

related activities. The Commission

such as the marine hoses cartel, they

successfully worked with national

were as high as six times annual

limit compliance to Western

regulators to allocate responsibility

sales. Management that ignores

Europe. There are over 100

for the investigation, and fines

these risks is either brave or foolish.

national competition agencies

were imposed for cartel conduct in Germany, France, Spain, Italy, the Czech Republic and the Slovakia. So if the Commission is not

What are the features of a successful programme?

Comprehensive: do not

and international cooperation is a feature of enforcement. Issues uncovered in one country often spark investigation and immunity

letting up and national authorities

Senior management buy-in:

are increasing their activities, is

no programme will permeate

the level of fines now unfairly

the culture of a company unless

not implement the same level of

high? Particularly given the

there is “clear and unambiguous”

programme as a multinational.

economic downturn? Joaquin

commitment from the top.

Individual responsibility:

Identification of key

individuals can face imprisonment

Almunia, European Commissioner

applications in others. Proportionate: an SME need

for Competition, thinks not. He

competition risks: some

and director disqualification.

maintains that his cartel enforcement

markets are more susceptible to

Individual responsibility can

policy is “prevention where possible,

collusion than others. Use the

also be an important feature of

repression where necessary”. Fines

elements identified above to focus

effective compliance.

are set at the level necessary to deter

efforts. Biggest risk areas continue

cartels. “Our fines must remain

to be information exchange

huge benefits to the economy:

large because companies need to

and trade association activities.

when companies compete harder by

understand that cartels do not pay.

Even apparently “official”

innovating, finding cost efficiencies

But at the same time my objective

exchanges are being targeted by

and improving their offering, we all

is not to put companies out of

competition agencies.

benefit. As Commissioner Almunia

business,” he explains. In 2008/9,

Assessment of risks: focus on

Healthy competition can bring

puts it, “The enforcement of

32 of 69 companies fined lodged

employees in roles where risk is

competition policy has been and will

“inability to pay” applications but

high. Are there some activities - e.g.

continue to be a key instrument for

only nine received reductions.

industry groups – where the

global competitiveness of Europe.”

Against this backdrop of

benefits of involvement do not justify

Competition means winners and

aggressive, international

the risks? Are there geographic

losers. Ensuring you are on top of

enforcement how should companies

markets where business ethics

your business’ risks and, where

react? An obvious answer is to

facilitate cartels?

necessary, have effective compliance

implement a compliance or ethics

Risk mitigation: implement

E v ershe d s L L P

case was complex as certain of the

measures in place, provides the best

policy, the thinking being that it

appropriate policies and training. An

will either deter infringement, or if

off-the-shelf PowerPoint presentation

the company is caught, fines will

on competition law is unlikely to

be lower as the company has tried

influence behaviour. Training might

Stephen Rose

to do the right thing. Think again.

use real life examples encountered

Partner for Eversheds LLP

Regulators’ treatment of compliance

on a day to day basis. Standard-form

Tel: +44 (0) 20 7919 4785

programmes is not consistent. The

contracts and procedures for sign-off


French Autorité de la Concurrence

of certain contracts are useful.

chance of being on the winning side.

may grant a 10% discount on fines in recognition of compliance efforts; others, including the Commission, take a tougher line. So is it worth implementing a compliance policy at all and what


HSE Intervention Fees

The main components of the FFI scheme are: Where there is a material breach, cost recovery will begin at the first visit that identifies it, through to the point where the breach has been rectified, and will include all the time that an inspector spends on the case; An hourly rate of £124 per hour will apply which takes account of the costs of a visit (salaries plus travel, subsistence, corporate services, accommodation, IT

Lukas Rootman, health and safety partner at Nabarro, gives insight into the new HSE charging scheme coming into force in April 2012 and its implications for manufacturers.

etc.) and the time that the HSE estimates it would spend on identifying and rectifying material breaches; and The HSE will run a dispute process to challenge charges.


How it will work

The estimated average recoverable

The Health and Safety Executive

In addition to shifting the cost of

cost of an inspection that results

(HSE) charging scheme, originally

health and safety regulation onto

in a letter is approximately £750,

due to start in April this year, has

the duty holder, the HSE intends for

and increases to £1,500 where it

resulted in widespread discussion.

the FFI scheme to act as an effective

results in an enforcement notice.

The HSE announced in March that

deterrent to those who would

Where non-HSE professionals

the ‘Fee for Intervention’ (FFI)

otherwise fail to meet

or persons from the Health and

scheme will be introduced at the

their obligations.

Safety Laboratory offer support,

“next available opportunity, which

the actual costs incurred for this

is likely to be October 2012”. The

HSE where it has issued a formal

shall be payable by the duty

timetable is subject to Ministerial

written requirement to a duty

holder. Costs for serious incident

and Parliamentary approval of the

holder to rectify a material breach

investigations will run into many

proposed Health and Safety (Fees)

of health and safety law. This

thousands of pounds.

Regulations 2012.

includes a letter, email, instant

It is anticipated that recoverable

The regulations will put a duty

visit report, enforcement notice

costs will also include any follow

on the HSE to recover its costs for

or prosecution (up to the point

up interventions such as site visits

carrying out its regulatory functions

that court proceedings start). A

or telephone calls, and any relevant

from those found to be in material

material breach arises when, in the

associated office-based work.

breach of health and safety law. The

opinion of the inspector, there has

new FFI scheme will shift some of the

been a breach of health and safety

cost of health and safety regulation

law which requires them to make

Implications for manufacturers

from the taxpayer to businesses and

formal intervention.

The concept of costs recovery

organisations that break health and

There will be no fee for

for intervention by the HSE is not

intervention where the breach is

foreign to some manufacturers, it

non-material or merely technical.

has been in place for years under

to replace any existing intervention

Nor will there be any fee for

COMAH and impacts on, for

cost recovery schemes. As a result,

compliant duty holders. Duty

example, chemical companies.

top tier sites under COMAH,

holders include both employers and

offshore oil or gas installations,

self-employed persons who have

from implementation of the

licensed nuclear installations

duties under the Health and Safety

new charging regime there

and certain pipeline activities are

at Work Act 1974 or other relevant

will be approximately 54,000

excluded from the new law.

statutory provisions.

frontline days spent per annum

safety laws. There is no intention by the HSE


Costs will be recoverable by the

The HSE estimates that

recover costs under the FFI scheme

For more information, contact

and enforcement excluding

for activity related to non-COMAH

Lukas Rootman on 0114 279

prosecution time. Of these, it is

health and safety law.

4022 or visit

estimated that a material breach where costs would be recovered


would be found in approximately

The Government has preapproved

70% of investigation days and 65%

the essence of the proposed FFI

of inspection days.

scheme, now expected to come

Within the manufacturing sector

into force in October 2012, subject

over the past five years, in each

to Ministerial and Parliamentary

year an average of 31 workers died

approval of the proposed Health

in workplace accidents, there were

and Safety (Fees) Regulations

an average of more than 4,500

2012. When it is implemented,

reports of major injuries and about

any companies in receipt of

19,500 reports of injuries that

enforcement letters or notices will

kept workers away from work for

feel the full force and financial

three days or more. Considering

impact of these proposals. It is,

the percentages relating to cost

therefore, increasingly important

recovery, the new FFI scheme will

for manufacturers to fully

clearly have a significant impact on

understand and implement health

this sector.

and safety measures into their

HSE ‘Fee for Intervention’ scheme


on inspection, investigation

Key points: HSE will seek to recover enforcement costs from businesses in breach Personnel costs estimated at £124/hr Other costs in addition, totalling £750 upwards Deterrent intent, as well as detection/enforcement

At lower tier COMAH sites, the

business, and to carry out full and

Scheme comes into effect

HSE will continue to recover costs

continuous risk assessments on all

October 2012

for COMAH related activity and will

aspects of their activities.

Lawyer speak not spoken here. At Nabarro we’re passionate about manufacturing and its vital role in boosting the UK economy. Our team has the expertise to help you protect your innovations, overcome challenges and maximise opportunities. We understand your legal needs. So we make sure you understand us. No waffle, no jargon - just user-friendly advice in plain English.

Contact Martin McKervey on +44 (0)114 279 4053 or Lukas Rootman on +44 (0)114 279 4022.


Come and see us at ERP Connect on May 3rd 2012

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Manufacturinginaction Putting UK manufacturers under the spotlight Supported by:

Factory of the month

Elddis 118 Caravans and motorhomes

Elddis is producing a limited edition touring caravan to celebrate the Queen’s 60th year as head of state, a Diamond Jubilee range Find out how the company dealt with a shrinking marketplace The company has renewed its focus on design and the aesthetic appeal of its products. New programmes have improved the link between design and manufacture – read about how these programmes have been implemented Elddis is increasingly looking to bring production in house

A ut o m o ti v e

p r ecisi o n enginee r ing

Cab Automotive 134

Cosworth 126 Cosworth won the Manufacturer of the Year Award in 2011 – read about why it won Find out what the company did so successfully to retain its business after Ford pulled out of Formula One In 2010, company revenues rose 50% and profits rose 300% year-on-year to £4.9m Find out how Cosworth rose to the challenge of manufacturing components for a particularly demanding aerospace sector

Outsourcing has become a thing of the past at CAB after completing a range of completing accreditation requirements with existing customers Last year the firm achieved the Jaguar Land Rover quality accreditation JLRQ as well as the ISO14001 and TS 16949 accreditations After exhibiting at the Automotive Interiors Expo in Stuttgart, the game changed for CAB – they had 33 solid enquiries from German OEMs This year CAB is undertaking its largest ever lean training exercise - 42 employees will undertake the lean training at their recently remodelled lean training facility

All companies featured will be entered into the MIA Award 2012


The Elddis Aspire is the UK’s most affordable luxury motorhome

When you put your foot

on the design pedal As Elddis unleashes its latest touring caravans and motorhomes to the holidaying public, Tom Moore speaks to associate director Gary Jones to discuss the company’s latest round of investment.



hen The Manufacturer last turned up on the doorstep of Elddis, the touring caravan and motorhome manufacturer based in Consett, County Durham, it was February 2010 and the economy appeared to be making a steady recovery. Since then, UK growth expectations have been consistently cut, the euro zone has become conjoined to the word crisis, and talk of a double dip became a self-fulfilling prophesy.

Stop, look and listen Elddis had expected to hit £46m turnover the financial year running from September 2010 to August 2011, but didn’t

Factory of the month Elddis

Putting the eye into design Angela Robson, associate director, aesthetic design and customer care, says, “We research both the domestic and foreign competition and work with our customers to find ways we can improve the product. What is becoming more and more important to us is customer. To engage with customers we have set up open weekends for customers to tour the factory and view the products.” The company welcomed over 1,000 visitors on site last year and expects even more this time around on 15-16 September 2012. This type of customer-facing activity helps to identify trends towards new styles that shape the design and manufacture of its vehicles. For example, Elddis has identified a trend away from making seats up into beds. Robson explains, “people want caravans to be a home from home. We use 3D design to get a snapshot of the visuals and build full size mockups so we can get in and feel the vans to ensure they meet or surpass our customer needs.” Elddis has been using CAD design for many years, leaning on technology to consider what people want from a holiday and how they utilise space. “This product visualisation

means that everyone can see it and sign it off, that every change makes real and practical sense,” says Robson. The new programmes have improved the link between design and manufacture. Product clearance since the model year started in Aug 2011 has risen from 15% in week one to 100% in week eleven. The 100% figure has stabilised showing that capital spent in design means less time and money spent making alterations at a later date. Elddis’ associate director Gary Jones comments, “We have reduced the number of issues recorded on new vehicles from 58 in 2007 to 25 in 2012, on products where we use over 6,000 components.”

Product development has been really aggressive in the last two years Alan Bateman, Design Manager at Elddis

Weighing up the pros of investment With fuel costs in the UK and elsewhere continuing to rise one of these trends has been weight reduction. End customers of want to save money, particularly when the vehicle is being used for a holiday, a time when people are hoping to spend their hard-earned cash for the year on their favourite pastimes rather than the petrol to get them there. With this in mind, Elddis went on a weight reduction mission to shift pounds quicker than any celebrity fad-diet. The result? The firm saved an average of 45kg per vehicle over the last year. It made the design more compact through improved R&D, using composite technology and CAD software that may be more typically associated with the defence and aerospace sectors to plan space more efficiently. A £12,000 investment into new CAD structural drawing packages, linking CAD data to machine data, has enabled Elddis to produce the lightest 2-berth, 4-berth and 6-berth caravans in the UK, the Elddis Xplore range. This means that less petrol is consumed in towing the vehicle and higher spec caravans, such as the Avante 624, are now able to be pulled by an average mid-size family car – expanding the company’s potential customer base. Elddis’ design manager Alan Bateman states that “product development has been really aggressive in the last two years.” A number of caravan and motorhome ranges, including the Xplore range that starts with a 930kgs maximum technically permissible laden mass

Accident Rate at Elddis Moving Annual Total of Accidents

meet this due to a shrinking marketplace, finishing on £42m instead. In 2012, the company is not relying on the market to grow, but instead focusing on increasing its share of the pie. To do this, Elddis went back to the drawing board and set up a number of focus groups, putting its ear to the touring caravan and motorhome market to find the demands and supply them. What they learnt has fed back into all stages of manufacturing process and resulted in a renewed focus on its products and in the way that it makes them. Buying a touring caravan is serious business, with an Elddis-made holiday vehicle costing between £10,799 and £49,999, its products are a long-term investment. Elddis are no different to those companies at the cutting edge of other sectors in seeing innovation as the best way to build and maintain a commercial advantage. End customers buy with the next ten years in mind so the firm are concentrating on the future aesthetic appeal of the vehicles so that customers can buy without fear of it ever looking outdated.



Factory of the month Elddis

Bringing production in house These improvements have been developed alongside suppliers, but Elddis is increasingly looking to bring production in house. The holiday vehicle market is shrinking but Mr Jones is confident that the firm remains competitive and says that its USP is the way its products look and are styled. Following discussions with customers, Elddis identified the need to add flexibility to what it can do with its machinery. It has spent £180,000 on improving its tooling over the last two years and invested £340,000 into a Homag Baz worktop machine, aided by a £49,000 grant from One North East, a regional development agency that closed in March 2012. The investment has given the company autonomy over its designs in a key quality area and has aided weight reduction targets by saving 6-7kg per vehicle since it was installed in October 2010. Jones says that the new machine has gives it the opportunity to design differently more flexibility to improve products. Jones explains, “We used to purchase worktops from external suppliers but have always found it difficult to get the level of service that we expected. Quality was always good but delivery was bad and the costs were high.” Part of the problem was that Elddis has sought to reduce batch sizes as part of its continuous improvement journey in order to store less stock and increase quality. By bringing the machining in house Elddis now

Explorer Group Accident Incidence Rate 2011

Industry standard Explorer Group

No of reportable accidents / per 100,000 hours worked

(M.T.P.L.M) and won both the Caravan Club’s Design Award and Lightweight Leisure Trailer Award, have been fitted with under floor heating that reduces space and weight. Reducing energy usage has been a key consideration behind the innovation at Elddis. Understanding that holidaymakers are spontaneous and don’t adhere to the time schedule lifestyle that heating time settings require, the company’s Buccaneer range at the luxury end of the market has incorporated a heating system that can be controlled internally or via a remote control. Elsewhere, the Avante 624 was installed with 100% LED interior lighting, saving up to 80% battery consumption and giving over 70% improved Lux readings.

Month manages those smaller quantities and cannot be governed by the minimum order quantities of suppliers and the necessity to bulk buy when ordering from abroad to save on shipping costs. Jones says that “before the investment in the worktop machine, we wouldn’t have been able to purchase the worktops that we currently have in the vans. We can now shape our worktops the way we want to, communicating with our aesthetics team in the process. We can now use the analysis obtained within our customer forums to create a closer link between our manufacturing what will ultimately fulfil customers’ requirements.” Robson adds, “Historically, all worktops had a hard wood edge but everyone has different tastes. Some customers now prefer plastic type finishes so we now have the opportunity to make both hardwood and plastic edge designs.”

Higher quality but with lower costs Typically, quality is associated with higher costs, but this new machine has allowed Elddis to save £100 per unit. The company no longer has to pay to transport components and can machine more quickly, shortening lead times. The percentage of aftermarket parts supplied within one working day has increased from 2% in October 2010 to 50% in October 2011. The cumulative percentage of parts supplied per working day graph shows the progress made on speed of response to customer parts supply. This is a vital improvement to the manufacturing process as the goods supply of aftermarket parts can lead to more orders for products. Robson points out that Elddis’ brands cover all ends of the spectrum, bombastically stating, “Our USP in one word? Style.” Now that the

Elddis at a glance Established


Staff numbers



Touring caravans and motorhomes



Market share


Point of interest

Elddis is producing a limited edition touring caravan to celebrate the Queen’s 60th year as head of state, a Diamond Jubilee range.


Whale Leading innovation in the recreational vehicle industry for over 40 years Collaboration and Innovation Proud to be part of the UK recreational vehicle industry Whale® has a long history in product quality and customer orientation, and leads innovation in water supply, water and space heating systems in the recreational vehicle industry. In particular, Whale’s latest range of compact and lightweight Space and Water Heaters have gained widespread accreditation and consumer awards for helping to free up valuable storage space and reduce the overall weight of the vehicle.

Patrick Hurst, Managing Director comments: “We have enjoyed the UK Caravan and Motorhome market since the 1960s. Today it is great to see many innovative UK based manufacturing businesses in this market sector determined to succeed despite the difficult economic climate.


Elddis continually innovate to provide a stylish, quality product designed with their customers’ needs at the forefront. Their manufacturing processes ensure that the vehicles are built with quality, weight reduction and efficiency as central considerations. Whale is privileged to be a tier 1 Elddis supplier of water supply, space heating and water heating systems. Our approach is to work in close collaboration with our customers, particularly when it comes to designing new products. A good example of that was Whale’s development of our Under-floor Space heating system. The industry had 2 key industry concerns of weight reduction and the desire to open up more living space. By taking Whale’s lightweight space heater and locating it under the vehicle we could offer their designers

more options on layouts and increased storage space. When manufacturers such as Elddis embrace the technology from an early stage in our design process, we ensure that the products we develop fit their design needs and their production process in the best way possible. ‘

Published in association with: Whale

Old Belfast Road, Bangor, Co. Down, BT19 1LT, Northern Ireland

Tel: +44 (0)28 9127 0531 Email: Web:

Factory of the month Elddis

company manufacturers all internal furniture components on site, it has the adaptability to change production in order to manufacture the latest styles. Additionally, the variety of products its makes means that by bringing worktop manufacturing in house, Elddis has saved significant administration and logistics costs from having to source components for its wideranging portfolio. It also means that the R&D spent on enhancing its luxury Buccaneer brand, which it purchased in 1998, can trickle down into its value for money ranges when it is cost effective to do so. Jones adds, “Luxury brand sales of the Buccaneer and Crusader have gone up. So we are going to develop and launch a new range of products at the other end of the market as well. Our owners believe that we must continue to invest even if time gets hard.”

Lean Manufacturing ensures Elddis can flex to build in small batches

Skills on wheels The recent investment has directly saved jobs as employees are carrying out roles that would otherwise have been outsourced. The company avoided any further redundancies after a round of cuts in 2008, although there has been a small amount of natural wastage. People are an investment that the caravan-maker is hoping to cash in on at a later date. Jones explains, “It has meant that we have kept valuable skills on our site. That one worktop project has probably saved five to ten positions alone. We’re keeping the skills on the remit that we will see an upturn in the market and the wider economy. We have all the skills in place to turn the factory back on to a higher volume production as soon as we see an upturn. We’ve invested a lot of money on training within a niche skills market, as our products are not something that you can go and get someone off the street to do, we can’t waste that.” The firm has what Jones phrases as an awful lot of “old-style” apprentices, with 11 members of the workforce gaining recognition for 21 years service in 2011 alone. “When people come to work at Elddis they usually stay working at Elddis,” says a buoyant Jones. As a former apprentice himself, he provides a refreshingly honest opinion on industry’s role in the substantial decline in UK apprenticeships during 1980-2000. “Everyone always blames

Our owners believe that, even if time gets hard, we must continue to invest Gary Jones, Associate Director at Elddis

it on the government, but industry is to blame too - people just stopped employing apprentices. We are now industry leading for employing apprentices. Over the last six years, we have created 20 apprenticeships.” At a time of mass unemployment Elddis has struggled for three months to fill two vacancies, highlighting the neglect of manufacturing skills that the government and industry are now trying to correct. Jones says, “It is becoming more difficult to get engineers with the skills we require and this goes back 20 years to when people were not bringing engineers through. It is having an effect on all of the industry, which is why we are trying to bring apprentices through... so we can grow our own.”

Safe as houses This in-house attitude has led to opportunities for existing staff to progress and learn new skills. Elddis is a member of the British Safety Council and won its fourth industry-specific International Safety Award this year for continual improvement and being a leader within its sector. The moving annual total (MAT) of any reported accident has reduced significantly, dropping from 125 in 2007 to 55 in 2012. Elddis and Buccaneer come under the Explorer Group, which has an accident rate just one quarter of the industry average. The industry standard for caravan manufacture is 1,811 reportable incidents per 100,000 hours worked, but for the first nine months of 2011, the group averaged 400, rising slightly to 600 for the final three months.


AL-KO Kober Limited AL-KO Kober are world leaders in the manufacture of chassis to suit a wide range of vehicle types and trailed applications and have worked with Elddis for a number of years.


redominantly known in the UK for the supply of caravan chassis, AL-KO who are based in Southam, Warwickshire also manufacture chassis and running gear for commercial trailers and chassis conversions for 3.5 tonne commercial cabs. The AMC automotive chassis conversion provides coachbuilders and vehicle converters with a flexible, low height, lightweight platform onto which they can build a wide range of commercial vehicles including Motorhomes, Horseboxes, Community Buses, and Delivery Logistics vehicles. AL-KO has had a long working relationship with Elddis and currently supply


a range of type approved safety seat frame systems used in the construction of their range of motorhomes. Close working and communication between the engineering, sales and purchasing departments at both companies ensure that the supply of seat frames meet the vehicles as they are processed on the production line at Elddis. By clearly identifying the build times for the different models that incorporates the seat frames, AL-KO can time deliveries to minimise stocking requirements at Elddis’ manufacturing plant. This established way of working has enabled AL-KO to develop key industrial

partnerships with a wide range of vehicle manufacturers. AL-KO offer a very unique service to coachbuilders and vehicle manufacturers including product development engineering through to final lifetime usage testing of the chassis and components.

Published in association with: AL-KO Kober Tel: 01926 818 500 Fax: 01926 818 562 Email: Web:

Factory of the month Elddis

Jones puts this record down to “a renewed focus on awareness and risk assessments stemming from the passion of one guy, Mel Dunn, Elddis’ health and safety officer. He has the final say on whether things do or don’t happen and carries out all the training in house.” Unfortunately, Elddis’ safety superhero who has taken the company through the lean management tool 5S, which has brought about a tidier and cleaner work environment resulting in fewer accidents, is due to retire in October 2013. To pass on his skills the firm has promoted Colin Wheatley, who is currently in the middle of a three year succession and training period. Jones says that “if the skill level is there then internal recruitment saves costs and gives an opportunity to current staff. I would have had to have spent more on salary and several thousand pounds to advertise, plus any external candidate would have to learn about our business. It just makes more sense to plan ahead and recruit internally.”

Standing up for UK manufacturing Jones is passionate about skills and is unflinching in his argument that the market will inevitably improve, declaring that this type of UK recession will not last for the next 20 years so companies should look to the future. In a vehement defence of what UK manufacturing can offer, Jones claims that “UK businesses don’t always get a fair crack of the whip. It has had some success despite manufacturing bases being shut down and moved elsewhere.” Elddis fights off competition from Europe and further afield but has an advantage when selling to the UK market because there are substantial costs involved in transporting a caravan or motorhome, even if a rival firm has lower labour costs abroad. Elddis’ recent success at trade shows highlights its strong performance in a difficult marketplace. At the National Caravan Show at the NEC in September, the whole show was down by 460 units but the company consolidated its position by increasing its share of the show by 3% in terms of total sales. More recently, Elddis’ share of the Caravan and Motorhome Show 2012 in Manchester went up by over 150%, something Jones puts down to the time invested in developing its products. The company produced 2,800 touring caravans and 1,100 motor homes during 2011 and is aiming for stabilisation this year with some small growth. Elddis remains confident that concentrating on increasing its market share now will result in strong growth when the market begins to grow.


Preparing a CNC machining jig


of growth

When Ford pulled out of Formula One, Cosworth did what a good engineer would do: a full strip down and re-build of the business, focusing on new applications in growth markets. Will Stirling hears about a story of success through reinvention.


hy did Cosworth win The Manufacturer of the Year Award in 2011? It wasn’t due to the famous engineering brand’s 176 wins in Formula One. The Northamptonbased firm exited Formula One in 2004 when its then owner, Ford, decided the elite sport was not part of its business strategy. It wasn’t down to how it manufactures its ‘super-engine’ portfolio that revolutionised motorsport: most of its big, game-changing milestones – like


the legendary double four valve engine – came between the 1960s and 1980s. In the judges view, Cosworth won the top award because in less than nine years it had leveraged a great brand in one sector, motorsport, and diversified successfully into four new markets: competitive sports, including motor sport, cycling and sailing, aerospace, defence and automotive. That’s impressive, given that the customer requirements, quality standards, on-time delivery and even simply the personalities in these sectors were quite different to anything ‘Cosworth Mk I’ had dealt with before. “Until 1998, Cosworth made engines for racing. That was everything we did,” says head of marketing Pio Szyjanowicz.

Precision engineering Cosworth

With diversification came sales – lots of sales. In 2010, company revenues rose 50% and profits rose 300% year-onyear to £4.9m. Today group turnover is about £50 million, and the company has three sites in the US, two in the UK and one in Pune, India. The diversification strategy was prescient given that by 2004 Ford, who bought Cosworth in 1998, was getting twitchy about its commitment to F1. “It’s true that Ford’s foray into F1 as a team owner didn’t yield the racing success or brand enhancement that had been envisaged at the outset,” says CEO Tim Routsis, who took over the helm of the business in 2003 and is responsible for a large portion of the post-F1 business strategy. “As such, it was always a possibility that Ford could elect to withdraw.” Ford is a big OEM with deep pockets and F1 is a desirable platform to showcase big automotive companies’ engineering excellence. Did Ford’s decision to quit F1 catch Cosworth out? “When the news came we were already embarked on the diversification plan, so paradoxically Ford’s exit reinforced the soundness of the strategy in the minds of the staff,” Mr Routsis says. “The management was also not in the position of being forced to react and make big changes, but instead to hold a steady course already set.” Fast forward several years and this one-time motor sport engineering devotee is into everything; designing, manufacturing, testing and prototyping diverse products from engine blocks for high performance road cars, to condensation-resistant FADEC housings destined for Boeing flight consoles, to bicycle parts and micro-strain gauges for ultra-performance sailing.

Cosworth: Then The visitor showroom at Cosworth in Northampton is a racing anorak’s dream. There is a sumptuous line-up on show: the Chevrolet Vega engine, the 16-valve FVA engine and, perhaps company founders Keith Duckworth and Mike Costin’s greatest achievement, the double four valve, or DFV, engine. “The key to a racing engine is to achieve more combustion cycles in the same period of time, which generates more power, so you can go faster,” says Dr Szyjanowicz (Pio). “Keith [Duckworth] worked out how to make a crankshaft

Quality management gets an overhaul One of the challenges of transitioning from a pure motorsport specialist into other markets, especially aerospace, is quality management. Ian Allan has responsibility for the quality management (QM) system for the whole Northampton site, including office departments. Diversification in QM started in 1998, says Mr Allan. “In ‘98 we were a very quick, reactive motorsport company,” he says. “Ford was very strict on up-to-date processes. We were governed by the engineering department, who practically ran the manufacturing. “We’re going racing at weekend, we need this immediately,” they’d say. “But what about an XYZ-compliant drawing? No, use this sketch.”” Over time a more consistent QM system developed as Ford’s influence percolated down. The really big change came post-2005, when Cosworth began to bid for aerospace work. The company already had ISO9001, but they were advised they’d had more chance of winning aerospace contracts with the AS9100 standard. Cosworth has AS9100 for manufacturing, but it is about to sign-off with an AS9100-accredited design authority partner. “It’s the gold standard – although it will be revised soon,” says Mr Allan, referring to the AS9100-C. “Designs are fixed, concessions are very difficult to get, parts have to be 100 per cent every time. We don’t have the ability to cross the road and discuss designs with a Cosworth engineer, because we’re dealing with aerospace primes.” In 2006 the company considered ring-fencing the manufacturing units: one for ‘commercial build’, i.e. automotive and sports, to ISO9001 standard, another for aerospace to AS9100. “But you lose that flexibility, you are restricted to what machines and what people you can use,” says Allan. “We took the decision that the whole business – manufacturing, aftermarket, sales, purchasing, HR and dispatch – would all come under the AS9100 umbrella. Everything is at AS9100 now apart from engine build test and engineering.” that could withstand the strain of these revolutions, to take rpm from the ‘standard’ of five or six thousand rpm up to 10,000 rpm and beyond.” Another important innovation by the founders was the compliant racing gear train. On the DFV, “rather than using belts, the camshafts are connected to the crank using a set of gears. The speed is too high for belt to be able to deal with, making accurate timing impossible,” says Pio. The provenance of the DFV is a story itself, the radical design involving racing geniuses like Colin Chapman and Jim Clark, supported by Ford’s Walter Hayes who really forged the Cosworth / Ford racing partnership in the 1960s. In 2004 Ford announced that it was selling Cosworth and sister company Pi Research, along with its Jaguar Formula One team. On November 15 2004, the mechanical and electronic engineering companies were sold to then


MSC Industrial Supply Co.


his year has seen the launch of MSC’s 11th Edition Big Book catalogue, formally MSC/J&L Industrial Supply – 2012 has seen the production of their biggest catalogue ever, offering almost 2000 pages of products and introducing eleven new brands. MSC prides itself on service guarantees - based in the West Midlands; over 90,000 metalworking and maintenance products are stocked and ready for next day delivery nationwide. Even with the range of products covered, MSC are so confident about


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Precision engineering Cosworth

Champ Car World Series bosses Gerald Forsythe and Kevin Kalkhoven, forming today’s Cosworth Group.

Cosworth: Today “Aerospace [work] has been the greatest challenge for manufacturing with our background,” says Pio. In the main workshop lobby, he presents a FADEC casing for housing electronics in a Rolls-Royce Trent 900 engine. “We thought we knew everything about making precision parts out of high performance metals. Then we tried to access aerospace markets, and realised that aerospace could teach us a lot more about tolerance, quality, reproduceability and metrics than motorsport knew,” Pio adds. In motorsport, deliveries are always tight. But aerospace taught the business a culture of ultra accuracy, right first time, every time. This culture is also essential to minimise waste. “If you produce high wastage with very high raw material cost and high cost of manufacture, your profits will fall drastically,” says Pio. “We need to get down to 20-hrs on this type of part [a high pressure - low pressure aerospace pump]. You’re hauling out a large amount of material from a billet, so accuracy is vital.” What about additive, rather than subtractive, manufacturing for such parts? Cosworth is looking into this application. “At the moment, you can’t additive manufacture [such critical parts] to the standard that the customer will sign-off,” adds Pio. “You must get the balance right between what the customer will pay for what you provide, and how you can supply to their standards using potentially new methods. When is the right time to switch method? If you move too soon, and you can’t deliver on the volumes at the standards you’ve committed to, it’s not a profitable exercise. And if condensation gets inside this casing, it’s very bad news for an aircraft.”

The two main workshops at Northampton, broadly divided into soft metal and hard metal machining. They have configured production cells for specific product programmes, but at the moment machining activity for different products and sectors is

Cosworth made its name in motorsport but has followed an aggressive diversitifacation strategy in recent years

The Cosworth F1 engine being used in the inspiring Bloodhound super sonic car project


Moog M

oog and Cosworth have a history of cooperation in engineering developments stretching back more than 20 years. Initially Moog’s involvement was limited to the supply of hydraulic components and sub-systems for test applications. These included dynamometer control and fatigue & performance testing of lubrication and cooling components. However, by the 1990’s Moog had become extensively involved in ‘on-car applications, utilizing modified aerospace servovalves for the control of throttle systems and variable inlet trumpets. In 2002 Moog introduced the E024 Series a sub-miniature servovalve designed specifically for motorsport applications. [See photo]. This tiny valve has less than half the mass of the smallest aircraft valves available today. Weighing just 92 gm and controlling 3KW, this control valve is a good illustration of the extraordinarily high power density of the modern hydraulic systems used in Formula1. It also illustrates the fast response achievable with this


technology with a response time of 2.8 mS from closed to fully open. In more recent years, Moog have been involved in developing and supplying Cosworth with miniature hydraulic actuators for throttle barrel positioning.[See photo] These units which incorporate integral position sensors, were custom designed to meet the required loads, speeds and space envelope available. One of the key design challenges for Moog was to produce an actuator capable of surviving the extreme heat and vibration inherent in it being mounted on an F1 engine. Critically, the actuators also have to be capable of achieving the high velocities required to modulate the throttle during fast gear-changing. Considering the future, upcoming F1 regulations will result in the adoption of radical new Formula one engines from the 2014 season onwards. It’s envisaged that these sophisticated power plants will require multiple novel hydraulic actuation systems providing no shortage of new challenges for Cosworth and Moog.

Published in association with: Moog Tel: +44 (0)1684 296600 Email: Web:

Precision engineering Cosworth

distributed across both shops. Like any engineering firm, capital equipment is a mix of old and new. Cosworth favours Maatsura machine tools and DMG 5-axis CNC machining centres at the moment, but older tools are dotted around. Pio says: “We find ourselves saying ‘I’m glad I kept that machine, there’s no other way of doing it at current capacity. You need to understand what you use [a machine] for, and when to upgrade before retiring it.” With larger contracts, Cosworth has needed more ‘lights out’ operation. Steve Gregory is a set operator for the newer of two DMG DMU70 machining centres. “After 5pm we load the DMG with up to 60 workpieces on the jigs and let it run overnight,” he says. “This enables us to get 22-23 hours of machining every day. It can do all different types of work, but this one has been brought in purely for piston work.” What about new skills? “We’ve learned more with different machine tools; different CNC programming, editing, programme adjustments. Knowledge has increased with the variety of projects.” Huge crank shafts in chocks are for the Aston Martin One-77 supercar. Cosworth makes the whole 7.3L engine. “Only 77 vehicles will be produced, at over £1m each,” says Pio. “While we are working with this customer on other projects, I’m afraid Mum’s the word!” The company also designs and makes electronics. It subcontracts the board population, but designs and assembles boards into units along with authoring the operating software. “It’s relatively low volume but highly complex work,” says Pio. Recent developments include F1 steering wheels and electronics systems for engine management and crew safety systems for military customers.

Skills Cosworth has begun to take apprentices on again, and now has five, mainly in manufacturing. Quality manager Ian Allan says: “It’s a challenge to get appropriately skilled people. We’re training up a couple of lads to be part of the quality department because we can’t find the people in the job market.” It takes about four years to bring someone with the correct GCSEs or NVQ up to scratch for QM inspection.

View from the top – Tim Routsis, CEO Tim Routsis took the lead at Cosworth in 2003 at a pivotal time. Formula One was more expensive than ever to compete in, and rumours were rife that some automotive OEMs might get out. “It was pretty clear to me that the landscape of motorsport was changing, and we couldn’t afford to rely on it for the longer term,” says Mr Routsis. “My job was to spearhead the move from a single product, single market activity into a business model that ensured Cosworth would grow and flourish regardless of what happened to motor sport.” Aerospace and defence engineering is a very different discipline to the more reactive model of top league motorsport. How useful has Cosworth’s reputation been in acquiring aerospace contracts? “The Cosworth name has been a key factor in meeting potential customers in adjacent markets like aerospace,” Routsis says. “As a very well-recognised and respected brand it opens doors to the very top of target companies, allowing an initial conversation to take place. However, once the first contacts have been made, the durability of the relationship is predicated on the quality of the goods and services we provide, not the strength of our brand. He continues: “[Due to our pedigree in racing] our engineering judgments and opinions are respected. However, we’ve also had to immerse ourselves in the target markets and absorb not only their culture and dynamics, but also show real commitment to being a worthy supplier. We have worked hard to gain AS9100 certification and entry to the SC21 programme [aerospace’s Supply Chain 21] and we do not expect customers in aerospace to consider our motor sport pedigree the key factor in placing an order with us. What challenges has Cosworth dealt with on its transformation? “Processes, equipment and practices that are fine at a given size can often become inadequate as the business grows,” says Routsis. “This means that we are always managing change – something that can be unsettling unless both the need and the response are well communicated to staff on a regular basis.” Do people stay? “Turnover can be relatively high in the motor racing industry,” Allan says. “You’ll find ex-Cosworth people at Williams and McLaren and plenty of others. However we are fortunate to have a core of experienced engineers and technicians that apply their knowledge across our various programmes. ”

Cosworth: Future Cosworth’s future looks bright. Diversification is working, not only giving the business more security by spreading orders, and risk, across four large markets but increasing sales substantially. There are no immediate plans to enter more, brand new markets but “where we see opportuntities to continue doubledigit growth is in entering new geographies,” says Pio.


Tickford Powertrain Test T

ickford Powertrain Test was formed six years ago by its management buyout team. The company’s operational roots date back thirty years to Tickford Engineering. Based in Milton Keynes, the privately owned business is one of the last truly independent test facilities in the UK. Tickford has twenty one engine test cells, including a fully absorbing tilting engine rig, 3 axis hybrid driveline rig, engine build area, and an emissions vehicle chassis dynamometer. Current engine dynamometer capability ranges from 25 - 900kW, with supporting combustion and emission measurement, engine auxiliary loadings rigs, and a bulk supply cold fluid capability down to -30ºC. A comprehensive range of eddy, motoring and transient dynamometers


ensure Tickford can support from simple engine durability cycles, to the most complex road, track and emissions based simulation cycles. All facilities have both gasoline and diesel capability, they are covered by ISO9001 and for specific fuel testing based activities ISO17025 quality accreditation. Tickford has many multinational blue chip customers including engine & vehicle manufacturers, fuel, lubricant and additive companies and Tier 1 and 2 suppliers. To support this wide array of clients the test facilities are continually evolving, with Tickford providing engine development, validation and calibration services, plus full hybrid driveline development capability.

On-going facility investment for the conventional engine and hybrid test capabilities will enable our complete powertrain system capability to develop continually. Increasing the support Tickford can provide to a wide array of customers for development and validation of both current and future products. Published in association with: Tickford Powertrain Test Tanners Drive, Blakelands Milton Keynes, MK14 5BN

Tony Braddon Tel: +44 (0)1908 513049 Email: Web:

Precision engineering Cosworth

Cosworth at a glance Sectors

Aerospace, Automotive, Defence, Competitive Sport

Products and services

Design, manufacture, testing, prototyping of precision engineering solutions, electronics and software development.


UK - Northampton and Cambridge; US – Indianapolis, Mooresville and Torrance; India – Pune.


£50 million in 2011



Key products

Road car engines for Aston Martin, racing engines for several formulas. Pistons for Superbike, World Touring Car, and aerospace. Crankshafts for high performance engines. Marine electronics, software, micro strain gauges.


Mainly Maatsura and DMG machining centres. Two CMM rooms, multitude of lathes and other CNC machines. Electronics assembly.

Key people

Tim Routsis CEO. Mark Palethorpe, finance director. Rik Tremmink, chief marketing officer.

Recent achievements

Increased revenues by 50% in 2010. Winner, The Manufacturer of the Year Winner, 2011 and SME Manufacturer of the Year, awarded by The Manufacturer magazine. Formed strategic alliance with ST Aerospace in February 2012.

Cosworth has been looking east. In February it entered a strategic partnership with ST Aerospace of Singapore, to jointly develop heavy fuel engines for unmanned aerial systems in the Asia Pacific markets. India, too, is an exciting market. “The challenge is to understand how Cosworth’s business proposition translates for customers in India, where multinationals have spent millions setting up R&D centres and are looking for local talent to produce defence and aerospace technology,” says Pio. “We have opportunities to work with indigenous Indian firms on projects like UAVs and Indian defence programmes.” Elsewhere, the company is pushing the boundaries at the interface of mechanical and electronic engineering. In high performance sailing, for example, where it has developed micro strain gauges capable of measuring the load on pins in sail rigging. “The pins need to be manufactured from a decent material, and the design has to ensure that the strain can be measured accurately across the pin,” says Pio. And Cosworth is also investigating electronics that can be embedded into carbon fibre materials. One other exciting application they’re researching is managing the power consumption and charging of portable electronic devices like GPS receivers and radio handsets through inductive charging methods. Clever stuff, and a good

example of how Cosworth Mk II is adapting for a global market with little to hold it back. (For a more complete account of Cosworth’s future markets, check the profile on


If you want something doing

do it yourself

Testing & Quality

Outsourcing has become a thing of the past at CAB Automotive which, since the recession, has brought in-house many of its previously outsourced jobs. Tim Brown finds out from the management team how the increase in product diversity has brought new business as well as new challenges.


t is no secret that manufacturing as a whole underwent some very difficult times over the course of 2008 and 2009. But while a full range of sectors felt the brunt of the economic downturn, none felt it harder than the automotive industry. In fact car makers were one of the first to feel the pinch, not only from a speedy dip in


sales, but also from the impact the economic crisis had on their often onerously long supply chains. While some manufacturers shed work, a number of OEM car manufacturers went as far as to cease production altogether over the 2008 Christmas period. In early 2009, CAB Automotive found itself on the receiving end of recessionary whiplash and, with work only crawling along, the company made a fortuitous and surprisingly opportune decision about its future direction. “I don’t think we realised the significance of what we were doing at the time. But we made a conscious effort to in-source work that we were currently buying-in,” says managing director John Faulkner. “We started off with whatever equipment we could find, hit the commercial auction sites and started to look for equipment that would support what other people were making for us. There wasn’t a strategy about what came first, it was more about what I could find.” While the company began to increase its production capacity, the CAB team knew all too well that working with automotive clients requires the most stringent and exacting standards. As Mr Faulkner quite rightly points out: “You can never go to a customer and say: ‘I’m going to start doing fabrication work next year, do you want to give me an order?’ They will want to see what you’re capable of.” As a result, CAB concentrated first on the work contracts already being in progress. After completing accreditation requirements with existing customers it was able to remove much of its outsourcing expenditure and bring many of its processes under one roof. The company has also continued

Automotive CAB Automotive

its accreditation process and last year achieved the Jaguar Land Rover quality accreditation JLRQ as well as ISO14001 and TS 16949 After commencing work with its existing supplier base, potential new clients were then able to be brought into the factory and be shown the new variety of capability as well as the high quality output. The strategy turned out to be extremely successful and the company emerged from the recession, not with a reduced capacity hangover, but instead a whole lot of new products to sell. “We exhibited at the Automotive Interiors Expo in Stuttgart which was a turning point for us and we came away with 33 solid enquiries from German OEMs,” says Falkner. “Of course all those German companies have plants in this country and it is the head office that is responsible for buying. We didn’t know at the time just how powerful that was going to be. Now we have a very healthy number of quotes out to tender and if only a portion of those are successful we will continue to fuel solid growth.” Last year CAB turned over of £19m. By March this year it had already secured a substantial improvement on that sum. “We’re now trying to diversify our customer base and product

Defending the position with a new arsenal A state-of-the-art paint plant was the most recent large capital equipment investment made by CAB Automotive. The company paid a fraction of the price for the equipment because the previous owner had gone into administration. However, the equipment needed to be moved quickly and the company’s own technicians were tasked with the job of relocating the automated painting and drying machinery over the course of a single weekend. Fundamentally CAB Automotive was established as a seat-maker for the Land Rover Defender, which was essentially an assembly job. Now close to 90% of that seat is made on-site. The company boasts a weld shop, foam shop, paint shop, material cutting shop, sewing shop and an assembly line. Offering fully sequenced supply, for the Defender seats the company receives about two and a half hours notice for requirement for a seat to arrive which includes delivery time of about 45 minutes. offering as much as possible and are feeling more and more confident,” says Faulkner. “We’re on a growth path but the risk is the size of the growth and making sure that it’s sustainable from a funding point of view.”

Onwards and upwards The CAB Automotive site is actually a former Lear site which was taken over by a company called RDS Automotive. CAB Automotive was formed in 2005 when


Energy Services Partnership T

he UK energy markets now operate at the levels of volatility and unpredictability routinely seen in other, more developed commodity exchanges. Therefore, purchasing at the wrong time, for an inappropriate duration and with a Supplier who cannot deliver on service promises can have disastrous consequences on an end users bottom line. As energy costs are a significant consideration for most manufacturers, ESP believes that a key element of any energy strategy must be to ensure that it is fully integrated into an organisation’s risk management and control structures. ESP’s intimate knowledge of traded markets means we can deliver independent,


unbiased, and experienced support to even the most sophisticated energy purchasers. Every concluded ESP contract is constantly benchmarked against published data and since 2005, we have purchased over 3.2 TWh of electricity and gas at 15.78% below the average market price.

initiatives reducing our clients’ costs and by working alongside National Grid we can help our clients earn significant revenues from their existing electrical infrastructure. The breadth and depth of our service delivery is key to providing certainty and predictability through the most uncertain of times and in the process enhancing our clients bottom line, corporate valuation and management reputation.

Our dedication to providing our clients with innovative solutions has resulted in us being asked to manage an everincreasing array of Published in association with: their utility related The energy services partnership challenges. During the last year, we Tel: 0871 230 1824 have introduced Email: a wide range of Web: load management

Automotive CAB Automotive

RDS faltered following the collapse of MG Rover. It wasn’t long into the company’s life when the Land Rover Defender underwent an interior facelift and CAB won a design and manufacturing contract for work to go into the 2007 Defender. Off the back of that original contract win, the company now counts itself as either a first or second tier supplier to some of the biggest names in automotive including: Jaguar Land Rover, Aston Martin; Toyota; Fisker; Bentley; and Honda. A core reason for CAB’s growth achievements has been the company’s commitment to improvement. This work has brought attention to detail in operations and facilities. “We’ve made some pretty remarkable progress in the past couple of years,” says Faulkner. “We make no excuses but the inside of our facility actually looks a little bit like the OEMs and that is what they expect to see; they expect the processes and the visuals to be an extension of their own factories. And that is what we have given them.” But while factory aesthetics are considered both conducive to productive work and a good selling point to existing and potential clients, product quality improvements do remain at the heart of all upgrade ambitions. “You can’t build anything unless you are producing parts that of a guaranteed quality,” says Faulkner. “In the OEMs factories, cars will be taken into an audit bay and a guy will climb all over it and score the car on every

little defect that he can find. That score then requires a response from either the supplier or internally. The score is then categorised against who is responsible for the defect. In the early period of CAB Automotive, we were scoring around 40 points per car for the seating alone. We have now reduced that down to half a point per car even though we now provide more components.” Faulkner says such achievements have been managed through the hard work of each and every operative and staff member over the last five years. Quality is now the company’s number one priority in everything it does, he claims.

Beyond product to process Building on its desire for improved quality and capability, this year CAB Automotive is undertaking its largest ever lean training exercise. For the best part of the next seven months, a total of 42 people from within the company will undertake the lean training at their recently remodelled lean training facility. Full-time representatives from an external training company (Lead) will be based at the facility and each day six different people will be taken out of the team and given some off the job training. Throughout the course, the participants will be encouraged to come up with a project/s that they can use as a tool for implementing some of the lean tools and techniques which they will have learned. “I see that as a really big step in the right direction,” says CAB Automotive general manager Barry Cole. “It is a big commitment to put 42 people through this level of training, which will equate to 11 full days off the job per person. The people chosen to undertake the first round are most of the management team, the staff team, the first layer of the shop floor team in terms of the process leaders and lead techs, and some operators.” Cole says the company is aiming to train those people it considers will affect the most change in a short space of time. However, he also explains that the company has longer term plans to continue the next round of training at shop floor level.

CAB Automotive at a glance Sector

Automotive and transportation


Tipton, West Midlands

Staff numbers




Markets and products

Automotive: seating, headliners, interior trim, trunk systems, door cards, parcel shelves Rail: seating solutions for mass transit carriage railcar and coach OEMs Marine: luxury seating solutions to the marine industry

Key people

John Faulkner, Managing Director Barry Cole, General Manager Steve O’Neill, Manufacturing Manager Glenda Thomas, HR and EHS Manager Jonathan Hickman, Technical Sales Executive



Elkington Brothers F

ounded in 1939, Elkington Brothers Limited a family run business based in Birmingham has become one of the leading suppliers of Patterns, Models and Tooling within the car industry. For many years we have worked alongside CAB Automotive to develop a close working relationship that has seen us work together on many projects and meet many tight deadlines, for major car companies such as Jaguar Landrover, Aston Martin and Toyota. With our vast knowledge of tool making, various materials and processes it has enabled us to work together with CAB Automotive. We work with them from the initial quotation stage, component and tool design followed by the production of our high quality tooling allowing CAB Automotive to produce the quality components they are renowned for, and


then afterwards during pre-production, product is produced to the tightest and also for tool modifications once accuracy, giving our customers the production has started. continued confidence in our work. This Over the years here at Elkington now compliments our 4 CAD design Brothers we have continued to develop seats, 3 CAM programming seats, and our working processes and with 7, 3-axis CNC machines, enabling continued training programs for our us to offer a machining capacity of employees we have maintained the high 3500mm x 1200m x 1000mm, and level of skills required to run the latest produce tooling up to a weight of technologies, this has enabled us to around 25 tonne, and a size of around reduce the number of employees but 3.5m cubed. maintain the same level of turnover, whilst also increasing Published in association with: profitability. elkington brothers ltd Our latest Tel: +44 (0) 121 358 2431 technology acquisition Fax: +44 (0) 121 358 7527 is Delcam’s Email: PowerInspect Web: enabling us to guarantee that our

Automotive CAB Automotive

Seat Back Operator

Fresh faces and ideas CAB Auto’s move towards diversification also allowed fresh employment into the business, particularly into areas where the company had no previous skills or experience. By following its tried and tested method of using agency workers and providing them with a potential route to fulltime employment, the company was able to search out potential employees with exactly the right skills sets and essentially undertake trial periods. Over time, the method has not only produced some outstanding fulltime candidates but often, when dealing with a new piece of equipment, existing staff were able to learn valuable skills from temporary workers. “Nearly 100% of our fully employed staff have come through the agency route,” says manufacturing manager Steve O’Neill. “We’ve tended to find that it is the best way of recruiting because it gives us the opportunity to get the right people on the right job. Then if they are able sustain that job, we tend to look at those people to employ.” In addition, CAB has also recently rolled out a new apprenticeship programme and has taken on three apprentices who will undertake a three-year lean-focussed engineering apprenticeship at a local college. “The apprentices are in their first year and we will see them right through their

apprenticeship,” says HR and EHS manager Glenda Thomas. “This will be followed by their degree level and hopefully then they will choose a route to becoming a project engineer, quality engineer or whatever matches their strengths and interests. We’ve been through the hard times of trying to find good people but this is going to help make sure we’ve got the skills we need in place for the future.” And it is the future that CAB Automotive are already planning for. Witnessing the automotive sector strive towards a more sustainable future, the members of the CAB Automotive team have undertaken important research and development work. Making a strong contribution to a changing industry. The company is busy looking for natural, light weight and economical alternatives for materials it is currently using to make its parts and is already well on the way to replacing some components. While some materials are already in testing, the battle is far from won. Not only does CAB need to ensure its potential supply chain in natural materials is reliable, it must also convince the OEM manufacturers of the validity of its new materials. Judging by the quality of some of prototype products, it shouldn’t take too long for CAB Automotive to start turning some heads.

Diversity definitely on show A visit to CAB Automotive reveals a company that has developed its own working strategy for future-proofing the business. Walking around the varied shop floor areas at the company’s site, it is clear that the members of the CAB team not only wish to demonstrate a wide range of skills but showcase that these skills have been absorbed into the companies rapidly growing core competencies. Investment in the company has definitely paid dividends and has been reflected in a workplace that focuses on cleanliness, order and technological sophistication.


lastword The

Budget bullet only silver plated Was the 2012 Budget good for manufacturing? Yes but, as ever, opportunities were missed to create a better environment for UK enterprise – and the prospect of retiring from it all just got a lot further off observes Will Stirling.


he Chancellor set out his stall with the customary hubris. This would be a Budget for working families, he said, and “unashamedly pro-business”. He said Britain will have a tax system that is “more competitive for business than any other in the Western world”, and that the UK would become Europe’s technology centre. Well, it was a pro-business Budget; with substantial headline tax cuts, such as the top rate of income tax from 50p to 45p to encourage top-earners to work in the UK. But I wouldn’t like to be a pensioner with savings at the moment – let alone a pensioner who likes a drink and a smoke. Perhaps though, stringency in these areas is necessary in order to compensate for the level of “morally repugnant” tax avoidance, which diverts almost £70 billion of legitimate tax revenues from the Exchequer each year according to the New Statesman. The fact is, this was a Budget for business given the constraints of the coalition austerity plan. It could not go as far as many would have wanted, but there was meat on the bones. The mainstream rate of corporation tax was reduced to 24%, falling


to 22% by 2014, the qualifying limit for EMI share options was doubled and Mr Osborne started to reduce the income tax burden on entrepreneurs. Backing-up the Chancellor’s European technology centre claim, the Budget targeted tax incentives for digital enterprise, as well as R&D and patents, alongside more investments in broadband. More broadly, the Patent Box – a future 10% corporation tax rate on profits from qualifying patents – is reconfirmed as phasing in from April 2013. This is important. Harry Hutchinson of patent attorneys HGF emphasised the money to be made from better protection of IP rights (IPRs) at a workshop at the Global Manufacturing Festival in Sheffield in Budget week (p87). IBM ‘switched on’ over $700m revenue in one quarter simply by exercising its IPRs in 2011 and UK companies are comparatively bad at filing patents compared with Germany, Sweden and even the Netherlands. Serious money can be made by patents, and saved by the Patent Box but, Mr Hutchinson says, many SMEs don’t actually know what they own outright. So, there were many plus points in this year’s Budget for

Have your say at:

Serious money can be made by patents, and saved by the Patent Box but many SMEs don’t actually know what they own outright

business as Robert Brown, a tax director at BDO, sums up: “These changes should be wholly welcomed by business, and the simplification alone should be sufficient to produce a uniform 20% rate of corporation tax in due course. The priority to back industries in which British business has developed a competitive advantage is a clear commitment to encouraging further inward investment.” But not all were so convinced that government understand the competitive needs of enterprise and industry in the UK. With zero movement on capital

Osborne’s attempts to soother critics of the Carbon Floor Price with a proposal to double the rate of the carbon price support did not go down well

allowances and other investment incentives, the trade associations were predictably non-plussed. “There were helpful measures,” said EEF, “but by the end of [Osborne’s] speech the task of rebalancing our economy looked as daunting as ever.” On energy reform, the Food and Drink Federation joined in EEF’s disappointment to say, “although plans to simplify the Carbon Reduction Commitment are welcome, it is regrettable that the Chancellor did not go further and scrap it altogether.” Osborne’s attempts to soother critics of the Carbon Floor Price with a proposal to double the rate of the carbon price support did not go down well either. Stephen Radley, policy director at EEF, rounded on the move: “The decision to keep the Carbon Floor Price appears to lock the UK into higher energy taxes than our competitors, regardless of the European carbon price.”

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The Manufacturer April Issue 2012  

The April 2012 issue of The Manufacturer presented an indept look at the missed opportunities in recycling and smarter waste management. The...

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