The Manufacturer February 2013 by The Manufacturer

www.themanufacturer.com February 2013 Vol 16 Issue 1

www.themanufacturer.com | February 2013 | Vol 16 Issue 1

Manufacturing Leadership

of Stainless

Servival: Developing manufacturing services Picture this: A sharper image for manufacturing

Steel

Workforce and Skills

TeenTech: Action not words on manufacturing careers guidance Perfect partners: Collaborating to address skills challenges Part-time Post Grad: New diary entry from industrial masters students

IT in Manufacturing

Delivering the data-driven business Buildings with brains: Smart technologies for energy management

Finance and Professional Services Get up to speed: The Patent Box New Yearâ€™s Resolution: Make the most of enhanced capital allowances

Interview Alison Kinna

MD, Outokumpu UK

nt Eve iews! akers v Pre m speuture F o r f r TM nts Heat two ry eve a cto UK e t Fa a

s om Aut ANDSkillt in g vin pmenorce i r D elo kf Deve Wor th

Save the date:

March 5 2013

Factory of the Month Accolade Wines

See p48 for more details on this event

NDI ANNUAL CONFERENCE

Collaborating for growth Tuesday 5th March and Wednesday 6th March, 2013 The Point, Lancashire County Cricket Club, Manchester

Take full advantage of the huge range of opportunities available in the defence, aerospace, security and space sectors at the 12th Annual NDI Conference. Join us to hear from industry leaders, network, sell and do business with over 250 other organisations. • Gain insights into the latest industry news and Government policy • Prepare your business to take advantage of current and future opportunities with expert advice • Develop your strategies in international trade, finance & investment, business excellence and supply chain • Meet and sell face to face with your choice of attending buyers, all with current purchasing requirements - real opportunities to win new business • Network and collaborate with over 250 other businesses and exhibitors throughout the 2 day event and Gala Dinner For more information and to book your places, please visit www.ndi.org.uk, call 0191 426 6333 or email events@ndi.org.uk

“A very good forum for interaction and networking” “Directly relevant and provided useful insights into my company’s challenges and opportunities” “Extremely worthwhile - unique opportunity to meet industrial and Government/customer representatives to enhance our network” (feedback from 2012)

Gold Sponsor

Editor’s comment

Risky business Economists and business pundits said that 2013 would be an unpredictable year. And the opening month suggests that they were right. January brought more speculation about the UK’s future relationship with Europe, an issue close to the hearts of many exporting manufacturers who rely on the EU for ease of trade (p20). It has also highlighted how vulnerable all manufacturers are to blind spots in their supply chains. Whether you make beefburgers or Dreamliners, confidence in the quality and reliability of your suppliers is essential in risk management (p8). Increasingly it seems that manufacturers must monitor and even influence the way their customers treat their products. IMechE’s report on global food wastage raised some unpalatable truths about the inefficiency and sheer wastefulness of global food production (p12). Many food and drink manufacturers have made huge leaps in tackling the waste within their bounds – reducing water usage is often a focus area – but can they do more? The IMechE makes the risks of misdirected and inefficient production very plain. Gluttony and waste for some, want and deprivation for many. Can or should manufacturers be held accountable for this wanton waste? We live in a world of growing and increasingly interconnected risks, according to the World Economic Forum (WEF), whose went to press, and which annual meeting was held in Davos as released its Global Risks 2013 report earlier in January (p24). Davos this year concentrated on improving joined up risk-making in global governments and across national borders. Leaders within WEF said that governments have a lot to learn from private sector approaches to risk management.

26 38

But if the private sector has the experts here, surely companies can take action, independent of governments, to pour oil on the troubled waters of volatile markets and technology uncertainty? Stephen Sands at Festo, a sponsor of ’s Future Factory events Driving Skills Development in the Workforce and Automate UK, is a believer in the ability of businesses to “make their own luck” (p50). Critical to this is companies’ attitude towards investing in skills, he says. As is their willingness to collaborate – with peers, suppliers and customers – to clarify value chains, for the good of the businesses involved and for those outside industry. This is especially true for young people who need to be shown the variety of ways they can contribute to the creation of the products which keep society ticking. TeenTech, launched by Tomorrow’s World star Maggie Philbin, communicates this in one of the clearest ways I have yet to see (p55).

A fine example of an industry that affects our daily lives in a myriad of ways which might be easily overlooked by Joe Public – or his children – is stainless steel production. Cover image: 2013 marks 100 years since the invention of stainless by Yorkshireman Harry Brearley

Our lead story this month celebrates that 2013 marks 100 years since the discovery of this incredibly versatile material and recognises its continuing importance to UK manufacturing (p26). Jane Gray, Editor

55 1

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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 experience Nick has also worked in government, spending a year as Managing Director of Manufacturing Insight, a programme aimed at changing the image of manufacturing. He holds several non-executive directorships and is a founder member of the IET’s Manufacturing Policy Panel. n.hussey@sayonemedia.com

Editorial

IT Editor Malcolm Wheatley malcolm@malcolmwheatley.co.uk

Associate Editor Roberto Priolo

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Reporters George Archer

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Tom Moore

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Design

Art Director Martin Mitchell

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Henry Anson, Sales Director Henry is a shareholder in SayOne Media and is responsible for the company’s commercial activities, developing new concepts and products for ’s readership. Henry is keen to build a bridge between the manufacturing community and the services sector which supports them. h.anson@sayonemedia.com

Designers Alex Cole Vicky Carlin Nick Bond

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Sales and Events Head of Events Jon Tudor

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Will Stirling, Editorial Director

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Will edited 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 and for the maintenance of editorial supplements for standards across SayOne Media publications. Before joining SayOne Media, Will worked for Euromoney and IPC Media. w.stirling@sayonemedia.com

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Jane Gray, Editor

Tina Bennett

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

Tim Brown, Web Editor Tim joined SayOne Media in 2009 after working as a journalist for six years in Australia on a range of lifestyle and business magazine publications. His primary areas of interest include the automotive industry and business development. t.brown@sayonemedia.com

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Elizabeth House, Block 2, Part 5th Floor, 39 York Road, London, SE1 7NQ Tel: +44 (0)207 401 6033 Fax: +44 (0)844 854 1010 info@sayonemedia.com www.sayonemedia.com

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In order to receive your monthly copy of kindly email g.gilling@sayonemedia.com, telephone 0207 401 6033 or write to the address below. Neither The Manufacturer or SayOne Media can accept responsibilty for omissions or errors. Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.

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. www.eef.org.uk

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 is distributed directly to the alumni and membership of the following organisations:

Cranfield University EEF Institute for Manufacturing, University of Cambridge

Contents 06 News and regular columns A summary of manufacturing news and events along with commentary on industrial research and policy.

19 Lean on me

Roberto Priolo, editor of Lean Management Journal previews key themes and content for 2013.

23 The Naked Engineer

Patently Obvious – new patent laws avert embarrassment for the disreputable MD.

26 Lead 100 Years of Stainless Steel: Celebrating a century since the invention of stainless steel and recognising its ubiquitous presence in our private and working lives today.

32 Interview Iron Maiden: Alison Kinna is not what you’d expect in a manufacturing leader in heavy industry. But that has not held back her rise to the top of the UK arm of the world’s biggest stainless steel manufacturer finds Jane Gray.

Pillar features Manufacturing Leadership

IT in manufacturing

growing service revenues for manufacturing businesses. 48 Seize the day: Anticipating EEF’s second National Manufacturing Conference and interviewing Roland Aurich, CEO, Siemens UK and North West Europe.

Malcolm Wheatley explores enterprise to field application integration and the problems posed by increasing amount of non-transaction based data for traditional ERP systems. 68 Buildings with Brains: IBM shares its experience in gaining big energy savings through using new building management technology. Its even been taking its own medicine at its manufacturing site in Massachusetts.

40 Servival: The practicalities of

50 Event Insight

Future Factory: finessing man and machine: Explaining two perspectives on the skills challenges facing industry and how they will be addressed at AutomateUK and Driving Skills Development in the Workforce.

Workforce and skills

52 Perfect Partners: Possibilities abound for industry collaboration on bridging skills gaps – and funding is available too says Semta. 55 TeenTech: A triumph – the intiative which is taking action not words in altering young people’s perception of industry careers and educating teachers to boot. 58 Employee of the month: Charlotte Frisby, Trainee designer, David Nieper.

60 Delivering the data-driven business:

72 IT news Finance and Professional Services

75 Get up to speed: The Patent Box:

Will Stirling assesses the usefulness of this new tax credit, designed to encourage innovation in UK firms. Which manufacturers are best placed to exploit the benefits? 78 New Years’ resolution: make the most of enhanced Capital Allowances: What difference will the enhancement make and how can you get the upfront cash to make investments in the first place?

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

90 Accolade Wines 98 Rotalink 100 Last Word: Automation is big; have the accountants heard? Will Stirling investigates the automation craze

Manufacturing

BirthdayBash The UK’s long industrial legacy and love of cars has produced some of the biggest names in the automotive world over the last 100 years. Periods of economic turbulence and underinvestment have seen some fall by the wayside, but with the automotive industry in resurgence – £6 billion has been pumped into upgrading sites in the last two years – there has never been a better time to celebrate the longevity of UK-based car making. TM celebrates some big birthdays in 2013. A u t o m o tive

Aston Martin

The 2013 Vauxhall Astra

Founded: 1913 Founders: Lionel Martin and Robert Bamford

ritish car manufacturer Aston Martin marked its 100th anniversary on 15 January 1913, at its original home in Chelsea’s Henniker Mews. Aston Martin started life as Bamford and Martin Ltd in 1913 after its owners, producing the ‘Coal Scuttle’ car. But Lionel Martin’s successful runs at the Aston Hill climb in Buckinghamshire, the ‘Aston Martin’ name was used in 1914 and within a year the first car had been built and registered with that name. In 100 years Aston Martin has produced just over 60,000 sports cars, with more than 90% of all Aston Martins built still in existence. Aston Martin has manufactured cars from seven locations in the past 100 years, but only set up its first purpose-built home in 2003, at Gaydon, Warwickshire. With demand at the UK’s luxury car manufacturers booming due to the riches flowing in from China, Russia and India, Aston Martin has upped

its production and now designs and manufactures around 3,500 exclusive sports cars every year in Gaydon. “I am proud to be celebrating 100 years of heritage and the best of British craftsmanship,” said Aston Martin CEO Dr Ulrich Bez. Dr Bez describes Aston Martin as “the coolest luxury car brand on the planet,” an argument heightened by its connection to the James Bond film franchise. The famous Aston Martin DB5 returned to our screens in 2012 in the blockbuster Skyfall. During the year-long celebration across the world, there will be a week-long Aston Martin festival in July where enthusiasts will be able to see how the car is made at its factory in Gaydon. The UK’s specialist car makers, from Aston Martin to Rolls-Royce Motor Cars and McLaren, are worth £2.5 billion to the UK economy, employing 10,000 staff directly and sourcing 65% of components from the British manufacturers.

Aston Martin took its centenary celebrations to the Burj Al Arab hotel in Dubai, airlifting the Vanquish 1,000 ft into the air and landing it on the helipad

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A u t o m o tive

Vauxhall

Founded: 1857 (started manufacturing cars in 1903) Founder: Alexander Wilson

auxhall this year celebrates its 110th birthday making it the oldest surviving UK car manufacturer. The company first started producing cars in the UK in 1903 with a 6HP model and has been making and selling motor vehicles in the UK uninterrupted ever since. In 1926 the company produced the 30-98, generally regarded to be the UK’s first 100mph production car. In 2012, its plant at Ellesmere Port in Cheshire was awarded the contract to be the main European plant to manufacture the next generation Astra, due to start production in 2015. Likewise the Luton van plant will build the next generation Vivaro from 2014 – both new products securing their respective plant’s production life into the next decade. Vauxhall’s Chairman and Managing Director Duncan Aldred, said, “The UK was the shining light in a gloomy European automotive market in 2012 and Vauxhall was right at the forefront in sales and innovation. Launching six all-new models in one year was a huge challenge but was fundamental to the continued growth of this great British brand.”

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y a d h t News r i B F o rm u la One an d A u t o m o tive

McLaren

Mini achieved a new sales record in the USA after delivering 66,123 cars during 2012, a 15% increase compared with the previous year

Founded: 1963 Founder: Bruce McLaren

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A u t o m o tive

Mini UK

n 2013, Mini UK, and parent company BMW Group, will celebrate 100 years of car-making at its plant in Cowley, Oxford. Since 1913, tens of thousands of people – 26,000 at the peak in the 1950s and 60s - have worked on the site building over 11 million cars under brands including Austin Healey, MG, Wolseley, Riley, Austin, Mini, Vanden Plas, Princess, Triumph, Rover,

Honda, Sterling, the founding marque Morris and over two million MINIs since 2000. The Oxford plant has generated considerable wealth for the UK, as well as for many other countries around the world, during its 100 years. Today, Plant Oxford manufactures the Mini hatchback, Convertible, Clubman, Clubvan, Roadster and Coupe - 80% of which are exported to over 100 global markets.

urrounded by fewer than half a dozen loyal souls, the 27-yearold winner of the 1962 Monaco Grand Prix founded his own racing team the following TH year… Bruce McLaren Motor Racing. Bruce McLaren and his team slogged across the world to race his self-made Pic ?????? cars, but his legacy 50 years on is a group employing more than 2,000 people. On September 2 2013, the McLaren Group will celebrate its 50th anniversary. Its Formula 1 team has become a global household name and the world’s richest queue up for its supercars for the road. Since the first McLaren lined up on an F1 starting grid in 1966, the team has won 182 races, more than any other constructor. “Bruce McLaren wrote the beginning of the story, and the legend is going to continue for many years to come,” said Ron Dennis CBE, executive chairman of McLaren Group and McLaren Automotive.

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Iconic British motorsport company, McLaren, reaches its half century this year

M etals

engineering

Founded: 1913 Founder: Percy Ritherdon

Founded: 1862 by Carl Brandauer and Joseph Letiere Petit

Ritherdon & Company

Pic ?????? itherdon and Co, the metal enclosure

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manufacturer, celebrated 100-years as a limited company TH on January 4. Ritherdon was formed in 1895 by Percy Ritherdon, but it didn’t register as a company until January 1913. When the company was founded, Ritherdon produced magic tricks for professional magicians. To ensure optimum quality and precise fabrication for these kits, Ritherdon worked closely with Chung Ling Soo – an American-born magician who rose to fame in the early 20th century. After WW1, Ritherdon moved into sheet metal work. The company went on to produce electrical enclosures for Naval Warships during the Second World War and during the 50’s and 60’s supplied the nuclear industry with electrical enclosures for control panels.

100

Branduaer

Pic ?????? r Ruth Brandauer and her son and Jakob visited Birmingham in January to join the 150th anniversary celebrations of her great-great-grandfather’s engineering firm – 98 years after the British Government branded her family as ‘enemy aliens’. The Viennese Brandauers came to mark the anniversary of the company that now manufactures precision metal pressings for electronics, medical, healthcare, construction and renewable energy sectors.

They visited their ancestor’s original factory in New John Street West before a grand dinner at Birmingham’s Museum & Art Gallery with guests from including Birmingham VIPs, family members and employees past and present. At the outbreak of WW1, after half a century of investment, the Brandauer family found themselves classed as ‘enemy aliens’ and stripped of their property.

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For all of the latest news in the manufacturing world visit www.themanufacturer.com

Manufacturing News David Cameron has pledged to help make the EU more competitive

GOVERNMENT The Prime Minister promised change to the UKEU relationship in a speech on January 23. The highly anticipated speech was delayed due to a hostage crisis in Algeria involving British citizens. In his address to the nation David Cameron pledged to re-negotiate the terms under which the UK is involved with the European Union and promised the British people would ultimately decide whether or not to remain a part of the 27-nation group in a referendum in 2017. Among other things, Mr Cameron is seeking greater independence in the formation and implementation of regulation in his negotiation with Brussels. For those concerned about the impact on the common market of distancing the UK from Europe, Cameron said: “I never want us to pull up the drawbridge and retreat from the world. I am not a British isolationist”.

Photo courtesy of the Prime Ministers Office

JOBS

HEALTH & SAFET Y

MANUFACTURING LANDMARK

Rolls-Royce announced it will scale back its UK defence operations near Coventry with the loss of nearly 400 jobs. Unite national officer for aerospace and shipbuilding, Ian Waddell, said: “The underlying reason for the job losses is the government’s defence spending cuts.” A spokesperson for Rolls-Royce said in a statement:: “We are in consultation with trade unions over reductions in our defence workforce at Ansty. We hope to achieve this without compulsory redundancies.” It was also suggested that some of the jobs lost in Ansty would be offset by the repatriation of jobs from Germany to Rolls-Royce’s site in Bristol.

Coat hanger manufacturer Mainetti has been fined £81,668 after a young woman was hospitalised for three months due to getting caught in machinery. Kelly Nield, 25, from Ellesmere Port, sustained “horrific, life-changing injuries” according to David Wynne, an inspector at the Health and Safety Executive. Miss Nield’s hair was ripped out by machinery at Mainetti’s factory in Deeside while she was sorting clothes hangers on an unguarded conveyor. She also sustained serious throat injuries and fractured a finger. The company pleaded guilty to breaching three health and safety regulations.

The Advanced Manufacturing Research Centre has produced a two metre model of Sheffield ‘s newest landmark – ‘The Man of Steel’. The final sculpture will be 30 metres tall including a 20-metre stainless steel male figure. The landmark will overlook the M1 motorway from a former landfill site a few miles north of the AMRC campus on the Advanced Manufacturing Park. The sculpture is the work of local artist Steve Mehdi who said it “was inspired by the men and women I worked with in engineering in Sheffield, and the generations of people who worked in steel and coal across the region”. The erection of the figure will also form part of Sheffield’s celebrations of 100 years since the invention of stainless steel in the city (p16). The model manufactured by AMRC is made from polyurethane resin board and was sculpted on its CMS five-axis machining centre, using cutting tools from Sheffield-based Technicut.

EVENTS

F OOD & D R I N K

The Global Manufacturing Festival: Sheffield confirmed a number of sponsors and speakers for its April event which will attract international businesses and advanced materials specialists to the Advanced Manufacturing Research Centre and Sheffield City. AESSEAL and Sheffield City Region were among those to join the event’s sponsor list in January while MTL Group and Surgical Innovations were confirmed as speakers. More factory tours were also confirmed including a tour of AESSEAL a £100m multi-award winning manufacturer named by The Daily Telegraph as one of Britain’s brightest businesses in 2012.

Silvercrest Foods halted production after horse meat was found in its burgers. News that Silvercrest had delivered burgers containing horse meat to UK supermarkets, including Tesco, hit international headlines. The burgers received by Tesco were found to have a higher percentage, up to 29%, of horse meat than any other supermarket’s stock. Enquiries into how the equine DNA, came to contaminate the Silvercrest products is ongoing. Speculation about the wider implications of this incident for food and drink producers has been rife. Among other issues new regulation on quality testing and product liability clauses in supplier contracts have been mooted (p20).

Burgers supplied to Tesco by Silvercrest Foods were foud to contain equine DNA Photo courtesy of Tesco

Manufacturing News BUY BRITISH The Bradshaw family has begun a year-long challenge to buy only British manufactured products. The family of three, from Westerham in Kent, said that they were frustrated by the UK’s failing economy and wanted to make a statement which supported British jobs and industry. Their New Year’s resolution to buy only Britishmade goods means that they now source their tea from Cornwall and buy Women’s Institute Flour, sold in Waitrose, so far, the only flour they can find which is produced in the UK. The Bradshaw’s will list UK manufacturers who help them make it through the year in their blog and website www.britishfamily.co.uk.

REGULATION EEF called for greater recognition among manufacturers of the far reaching effects of REACH regulations. REACH, the European Directive on the registration, evaluation and authorisation of Chemicals is poorly understood or tracked by many manufacturers, particularly smaller firms, an EEF survey showed. The regulations, which change regularly, could result in substances used in manufacturing processes being banned or removed from the market. Failure to comply with the regulations is a criminal offence that can result in unlimited fines or even two years in prison. EEF Terry Scuoler gives more detail on p18.

Defective batteries caused the grounding of Boeing’s entire fleet of 787 Dreamliner aircraft

DEFECTS Boeing last month grounded its fleet of Dreamliner jets following safety concerns connected to onboard batteries. The aircraft were grounded following a fire on board a Nippon Airways 787 flight which forced the pilot to execute an emergency landing. The fire was traced to a lithium ion battery of a kind used extensively in Dreamliners to replace traditional pneumatic control systems and reduce overall weight. The Nippon Airways incident was just one of many technical problems faced by Boeing’s Dreamliners in recent months. These include: an oil leak, fuel leak, engine cracks and a damaged cockpit window.

JOBS Honda announced the loss of 800 jobs at its Swindon plant. The news came just a year after it created 500 jobs and moved to a two shift production operation. The Swindon plant has capacity for the annual production of 250,000 cars but produced 151,000 in 2012. “Sustained low industry demand requires us to take difficult decisions,” said Honda’s European vice president Ken Keir. It is the first time Honda has cut jobs in Britain since starting manufacturing in Swindon in 1992. A possible lifeline has been extended to Honda’s workers however. The Talent Retention Solution, a recruitment scheme established to retain skilled technical personnel in manufacturing jobs when large scale redundancies occur, has approached Honda to offer its services.

Tate & Lyle Sugars is challenging EU legislation which it says is threatening its business

Photo courtesy of Tate and Lyle

FUNDING Big data, energy efficient computing and advanced materials were the big winners last month when the Government finalised the allocation of £600m worth of scientific funding announced in the Autumn Statement. The ‘eight great technologies’ which the Government consider will propel the UK to future growth and help it stay ahead in the global race have received the funding boost. Big data and energy efficient computing received £189 million while £45 million for new facilities and equipment for advanced materials research. Other areas to receive funding included space, robotics and energy.

REGULATION Tate & Lyle Sugars went to the General Court of the European Union to fight EU legislation which is endangering its UK operations. Executives from the sugar producer filed three lawsuits against the European Commission for causing sugar prices to rise artificially by placing restrictions on imports and spending five billion euros to support European beet sugar farmers. Company president Ian Bacon said the legislation has “destroyed jobs” and is endangering the future of its London refinery which employs 850 people. The legislation Tate and Lyle is fighting is part of the EU’s Common Agricultural Policy.

UnLock The poTenTiAL in yoUr peopLe When the next race in the Formula 1™ circuit looms and pole position is the goal, Lotus F1™ Team Technical Director James Allison shifts into overdrive. Microsoft Dynamics gives James proactive, easy-to-use tools that adapt to the way his team of engineers and designers work. So the Lotus F1™ Team can coordinate 500 team members and over 15,000 highly specialised parts to build one very fast car. Get ready to transform your workforce in record time with business solutions from Microsoft. microsoft.com/uk/dynamics

Actual Lotus F1™ Team employee and Microsoft Dynamics user

Manufacturing News MANUFACTURING LANDMARK JOBS Jaguar Land Rover will create of 800 jobs at its Solihull plant. The recruitment drive is a result of increased demand from foreign markets including the US, Russia and China. Initially the positions will be offered as one-year contracts but JLR said the positions will be made permanent if market conditions remain good enough. JLR’s plant in the West Midlands is responsible for the production of the Range Rover Defender and Discovery models. Recruitment for these new positions with JLR is now underway (p88). Rolled off the production line in February 2012.

The Advanced Manufacturing Research Centre with Boeing has produced a two metre model of Sheffield ‘s newest landmark – ‘The Man of Steel’. The final sculpture will be 30 metres tall including a 20-metre stainless steel male figure. The landmark will overlook the M1 motorway from a former landfill site a few miles north of the AMRC campus on the Advanced Manufacturing Park. The sculpture is the work of local artist Steve Mehdi who said it “was inspired by the men and women I worked with in engineering in Sheffield, and the generations of people who worked in steel and coal across the region”. The erection of the figure will also form part of Sheffield’s celebrations of 100 years since the invention of stainless steel in the city (p16). The model manufactured by AMRC is made from polyurethane resin board and was sculpted on its CMS five-axis machining centre, using cutting tools from Sheffield-based Technicut.

F OOD & D R I N K

Image courtesy of Jaguar Land Rover

R&D The University of Cambridge is undertaking new research into the potential industrial applications of the ‘wonder material’ graphene. The Cambridge Graphene Centre will start its activities on February 1, 2013 and plans to open a £25 million dedicated research facility at the end of the year. Graphene is a one-atom thick layer of graphite and is exceptionally light, strong and flexible, enables electrons to flow faster than silicon and functions as a transparent conductor.

JOBS Aircraft manufacturer Airbus will create 300 jobs in its wing design and manufacture operations in the UK in 2013. Airbus currently employs over 10,000 people in the UK, with a wing design office in Filton, near Bristol, and wing assembly in Broughton, North Wales. While the recruitment drive is good news, it does represent a drop compared to last year when Airbus created almost 600 UK jobs, many in high value engineering roles. Airbus in Broughton has produced the A350 XWB jetliner’s first wing, which is shown here on its arrival at the company’s final assembly line in Toulouse.

Two billion tonnes worth of food, or 50% of the food produced globally, goes in the bin untouched. This stomach-churning figure was released by the Institution of Mechanical Engineers in a January report Global Food; Waste Not, Want Not. The waste is caused by poor infrastructure and storage facilities, overly strict sell-by dates, buy-oneget-one-free offers, and consumer fussiness, according to the membership-based engineering group. IMechE’s research also highlights the inefficiencies of meat production and says, in the UK, up to 30% of vegetable crops are not harvested because their physical appearance fails to meet the exacting demands of consumers. Water consumption in food production was emphasised as a risk factor. The demand for water in food production could reach up to 13 trillion m3 a year by 2050. This is 2.5 to 3.5 times greater than the total human use of fresh water today and could lead to more dangerous water shortages around the world.

INVESTMENT Samworth Brothers is buying land to build a new factory. Leicester City Council confirmed with The Manufacturer that the council has given permission for Samworth, a family owned own-label manufacturer of pies and sandwiches, to buy the land subject to planning consent being granted. The site consists of 50,000m2 of greenfield land in Ashton Green, Leicester. The new factory should create at least 200 jobs – upper estimations say 700 could eventually be employed there. The site will not be operational until at least 2014, according to a report in the Leicester Mercury.

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News School Back to

a call to arms ! The Manufacturer magazine has launched a campaign to promote better understanding of manufacturing careers in schools and help teachers deliver the national curriculum in a way which highlights how specific knowledge and skills can be used in business.

to recruit new talent and the perception of manufacturing careers among young people, to put themselves forward as potential school governors. The Manufacturer will track the progress of this campaign throughout 2013 and beyond – guaranteeing an elevated profile in the magazine for individuals and companies who support it.

Our ambition is to get one secondary school in every county in England and Wales to appoint a manufacturing leader to More detail on the campaign and its its board of governors. supporters will appear We are now calling in the March issue for pro-active of TM or for more manufacturing leaders information please who harbour concerns email the editor, or frustrations over Jane Gray (j.gray@ skills gaps, their ability sayonemedia.com).

Datesfor yourdiary February

The Institute for Manufacturing at Cambridge University hosts Building Better Businesses: Practical Workshops for SMEs. Contact Jo Griffiths (jg393@cam.ac.uk) on 01223766141 for details.

Cranfield University hosts an open day for prospective students to find out more about its courses and how they are aligned to industry. Email enquiries@cranfield.ac.uk for details.

The Institution of Mechanical Engineers is hosting a free to attend presentation by Chris Rea OBE, managing director, of AESSEAL. Chris’s presentation will cover his journey to entrepreneurship, product, process and marketing innovation. To register go to http:// events.imeche.org/EventView.aspx?EventID=1786

TM hosts two co-located events in its Future Factory Series. Automate UK and Driving Skills Development in the Workforce will take place at the Waldorf Hilton in London. The former event will help manufacturers identify opportunities for automation and plot automation strategy including sourcing finance and redeploying skills in the factory. The latter event will clarify opportunities and methods for youth outreach programmes and explain the process for establishing apprenticeships or other vocational training courses. Contact Sarah Hough (s.hough@sayonemedia.com) on 0207 401 6033 for details.

March

EVENTS The Manufacturer is hosting two events in London on February 26, 2013 as a part of its Future Factory series. The events will look at two of the most important issues facing UK manufacturing: automation and skills. Automate UK will feature speakers from: CNH (The Manufacturer of the Year 2012); Stage Technologies; The British Automation and Robotics Association; and many more. Driving Skills Development in the Workforce will feature presentations from: Lord Baker of Dorking; Caterpillar, Muntons; Semta; BAE Systems and many others. Both events promise to be extremely informative and will provide excellent networking opportunities. For more information visit www.themanufacturer.com/ events or call +44 (0) 20 7401 6033.

EEF holds its second National Manufacturing Conference at the QEII conference centre in Westminster. Ed Balls, Shadow Chancellor has been confirmed as the opening keynote speaker and the event will be chaired by Krishan Guru-Mathy, presenter of Channel 4 News. www.manufacturingconference.co.uk.

19-22

The International Materials Handling Exhibition, IMHX takes place at the NEC Birmingham. There will be over 400 exhibitors in attendance with 40 free conferences to choose from. For more information go to www.imhx.biz

The Manufacturing Technologies Association Annual Dinner and Awards take place at the ICC, Birmingham. The awards are open to companies across manufacturing with recognition available for training schemes, suppliers, outstanding apprentices and the most dynamic subscontractor. Book at www.mta.org.uk

Automate UK

April

26 February 2013, London

7-11

Call: 020 7401 6033 Email: events@sayonemedia.com www.themanufacturer.com/automate-uk

The Manufacturing Technologies Association is holding MACH 2013 at the NEC, Birmingham. As the UK’s biggest manufacturing technologies event, there are 20,000+ visitors, 5000 tonnes of working machinery, 30,000sqm of floor space and a number of specialist pavilions and showcasing areas. Visit www.mta.org.uk/what-we-offer/mach-exhibition

For all of the latest news in the manufacturing world visit www.themanufacturer.com

ManufacturingAppointments Sponsored by:

UK Appointments Jo Stavely Brompton Bicyle

The British manufacturer of folding bicycles Brompton Bicyle, based in Kew, west London, has appointed British entrepreneur Jo Stavely as a non-executive director. Jo has led the growth of high street brands L. K. Bennett and

Cath Kidston. With a natural understanding of product development, retail and brand awareness, the board of directors said that Jo has the expertise the company needs to further improve its customer experience.

Tim Judge RediRack

Pallet racking and mezzanine floor manufacturer, RediRack, has announced the appointment of Tim Judge as the company’s new national sales manager. Tim is well known in the materials handling and storage solutions industry having held senior positions within a number of companies operating in the

sector during a career spanning 25 years. He succeeds Jim Davenport who is retiring after 34 years of service with the company. Tim said he would “relish the challenge” that the new role would bring and hoped to achieve the same levels of success he’d achieved in his past role at Ford.

Gary Vann Thorite

Pneumatic products and process systems distributor Thorite has appointed Gary Vann as its new national contracts manager. Gary joins Thorite after previous experience with Beko Technologies and eight years spent with AE Industrial. Gary will be responsible

for developing and expanding Thorite’s innovative “20:20 Vision Total Air Management Programme”, which is aimed at providing real financial benefits to industrial air users by reducing purchasing costs through singlesource supply and stock buy-back.

Greg Roberts EEF

EEF has appointed environmental consultant Greg Roberts as the UK expert sitting on a group reviewing a key International Standard, ISO14001. ISO14001 is an international standard that provides a framework for improving the environmental

performance of an organisation. Nearly a quarter of a million organisations worldwide are certified to ISO14001, including many UK manufacturers who use it to manage legal compliance, drive down costs and meet customer requirements.

The Department for Business, Innovation and Skills announced the appointment of Heleen Kist and Jack Perry as non-executive directors to Capital for Enterprise Limited (CfEL) - the Government’s investment company, which manages the Government’s investment programmes in SMEs across the UK. Heleen Kist is an expert on SME access to finance issues and brings valuable experience gained in strategy consulting and in supporting innovative SMEs. Jack Perry joins the Board as an expert on financing enterprise following a number of years at Ernst & Young and Scottish Enterprise.

Leslie Lee started as an electrical apprentice at Ford aged 17 in 1977 and rose to become a production systems expert and high tech trouble shooter, and has now been appointed as research director at the High Speed Sustainable Manufacturing Institute (HSSMI). HSSMI is a consortium of partners including Ford and Lee’s previous place of study, Loughborough University. The institute will be hosted by Centre for Engineering and Manufacturing Excellence on its business and skills park in East London.

The Society of Motor Manufacturers and Traders (SMMT) has announced the appointment of Wendy Williamson as aftermarket development manager. Before joining SMMT, Wendy spent many years working for Unipart. Her relationship with key stakeholders and knowledge of topical issues are hoped to prove invaluable as the SMMT develops its aftermarket activities. Wendy replaces Bob Davis who retires after more 27 years in the industry with the SMMT.

International Appointments The board of directors of Tata Chemicals announced the appointment of Cyrus P Mistry as the chairman of the board with effect from December 28, 2012, on the retirement of Ratan N Tata. The board conferred on Mr Tata the honorary title of Chairman Emeritus. Born July 4 1968, Mistry is an Irish businessman who studied at the Cathedral & John Connon School in Mumbai, then moving on to graduate from Imperial College, London with a BE in civil engineering.

To notify The Manufacturer of your company’s appointments, please contact Roberto Priolo at: r.priolo@sayonemedia.com or: 0207 401 6033

BacktoScuoler EEF’s chief executive Terry Scuoler reaches out to UK manufacturers to raise awareness of the wide ranging impact of updated regulation for REACH – the registration, evaluation, authorisation and restriction of chemicals.

hat would happen to your business if a chemical in your production process suddenly disappeared? Or if a key chemical in your product was withdrawn from the market? Maybe the first response would be blind panic or heated discussions into the night with your engineers about possible alternatives. I think we can assume the last recourse would be calls to your customers to say, sorry, you are not able to fulfill their orders or that the products they receive won’t be as they had expected. Unfortunately this scenario is not entirely unfeasible. Yet manufacturers display a worrying lack of awareness around the way in which European regulations on chemical usage may affect them. The impact is far broader than many suspect. A recent EEF survey shows 20% of companies still believe REACH is not applicable to them while a further 30% say it isn’t important to their business. The figure rises for the smallest companies. Just under a third of companies with turnovers below £2 million per annum are unaware of how they will be affected by REACH - a rapidly changing area of regulation with a number of direct legal obligations falling on potentially any manufacturer. At least once a year new substances will be targeted for bans, so it’s a moving feast. It is important that all manufacturers monitor developments and plan for future changes by searching for substitutes, changing production processes or getting ready to apply for permission for continued use. In some cases there may be easily available alternatives, in others, searching for substitutes will be a more involved process. Companies may need to purposely target innovations and work closely with their supply chain to make this work.

On the June 1 2013, companies that place substances on the market in quantities between 1,000 and 100 tonnes a year are required to register them Terry Scuoler, chief executive, EEF

The registration element of REACH raises further challenges. It can cause substances to disappear from the market. This year marks the second major deadline for registration. On the June 1 2013, companies that place substances on the market in quantities between 1,000 and 100 tonnes a year are required to register them. The registration dossiers assess the potential impact of substances on human health and the environment and sets out risk management measures to enable their safe use. Preparing this dossier can be expensive and in some cases companies may decide not to register a substance and, instead, withdraw it from the market - particularly true of specialty chemicals produced in low volumes. Critically, if a substance isn’t registered you cannot use it within the EU. In a recent survey for the European Commission, 37% of firms said they had experienced a withdrawal of a substance as a result of the first round of registrations in 2010. Around 30% were expecting it to happen again. I’m surprised it’s not more. Armed with the right information, our survey confirms that most companies can and will react to REACH. There does remain an issue for small companies, however. Despite this group expressing the most acute concern over possible substance bans our survey showed that, even when aware, half are not monitoring REACH developments. This compares to 72% of large companies and 83% of medium-sized who are monitoring it closely. What does this mean? Well, we need to make REACH easy to comply with. There needs to be better communication of changes and this must include clearer explanations of the potential impact of these changes. We need stronger guidance from European regulators and legislators which is easy to understand and follow. EEF has a role to ensure that the manufacturing community grasps that this is an issue for us all. If you are not monitoring REACH you could make a good start by signing up to our free Substance Alert Service or consider REACH training or an audit by one of our consultants. For further details visit www.eef.org.uk/REACH.

Monthly columns

Leanonme Roberto Priolo, editor of Lean Management Journal, explains how the publication is taking lean practitioners back to school and round the world to seek knowledge and understanding of continuous improvement.

he year has started with a bang for Lean Management Journal. The February issue sends lean practitioners back to school as articles explore different forms of training and analyse how best practice can be taught. We learn about the Lean Academy at Airbus – a bespoke internal training system which is developing thousands of lean workers at the aircraft manufacturer’s Broughton site. It also links to an international network of Airbus academies which together ensure consistency in the way improvement is understood across the company. But reliance on internal education structures alone can lead to missed improvement opportunities and a stagnant understanding of lean. Therefore LMJ’s exploration of multicompany and cross-sector benchmarking activities is a real eye-opener. In the February issue Erasmus Medical Center in the Netherlands shares its experience of visiting paint manufacturer AkzoNobel’s Sassenheim plant. The article highlights different and valuable perspectives on common problems. It introduces the idea of multi-company collaboration in lean learning - a very successful approach in India where the Clusters Initiative is doing wonders for local SMEs, helping them accelerate lean

The article introduces the idea of multi-company collaboration in lean learning - a very successful approach in India where the Clusters Initiative is doing wonders for local SMEs Roberto Priolo, Editor, Lean Management Journal

education for their staff and fast-tracking the creation of more competitive operations. In February readers also hear from lean guru Daniel T Jones who shares his views on the most important issues facing the lean community, from supply chains to IT to horizontal integration. Looking ahead to the March issue, there’s a lot in store. The theme will be ‘lean across borders’ – all about how multinational organisations can ensure their lean programmes are delivered in a consistent and effective way across cultures and nations. Deploying a global lean programme is no easy task. Cultural differences and HR regulation can confuse its adoption and varying speeds of progress create obstacles to ‘big picture’ improvement. Mauro Pino, head of World Class Manufacturing at Chrysler Group, will explain how the car manufacturer has introduced Fiat’s production system in its plants and what challenges Fiat/Chrysler encounters as it tries to progress its lean journey internationally. We will also hear from Brenton Harder and Peter Watkins, two of LMJ’s editorial board members, on the experience of implementing lean globally at Credit Suisse and GKN respectively. Logistics company Panalpina will further add to the issue by discussing its own challenges with the global roll-out of lean.

A newly introduced section in the journal called The Healthcare Watch will feature a case study from a hospital in Florence, the first in Italy to ever deploy lean. Maria Teresa Mechi will give LMJ readers insight into where the Trust is in trying to infect other hospitals around Tuscany with news of the benefits it has gained through the adoption of lean practices. We’ll also analyse a lean programme in a call centre and travel down under, to look at how Australian companies have been implementing the methodology. The LMJ Annual Conference will take place on May 21-22 in Birmingham. I encourage all practitioners interested in learning more about lean and challenging what they already know about using it to take part in the event. Finally, a tempting promotion is now available to all readers of The Manufacturer. Subscribe to Lean Management Journal and receive a complimentary Priority Pass card which grants you free access to airport lounges around the world. More information available at this address: bit.ly/SovqQk 2013 will be a big year for the journal – subscribe today and see for yourself! To find out more about Lean Management Journal visit www.leanmj.com or email the Editor: r.priolo@sayonemedia.com

Letters to the editor

Production lines 3 new messages

Letters to the editor

EUROPEAN UNION

Charles Morgan, MD, Morgan Motor Company

efore the formation of the European Economic Community each country in Europe had its own vehicle certification process. It was necessary to submit a car for approval and test in each market. This was very expensive and time consuming for manufacturers. In the EU it is possible to do one set of tests which permits the registration of a car for passenger use in any European country. A modern production car is a highly sophisticated machine and it would be impossible for any one country

PRODUCT LIABILITY

Fiona East, partner, Weightmans LLP

s supermarket chains clear their shelves of burgers contaminated with horse meat, will they look to their suppliers and manufacturers to compensate them for their losses? Consumers are being reassured that there is no risk to health - raising the query therefore if the product is ‘defective’ – but some may claim for damages after purchasing the contaminated burgers, which could extend to psychological injury, as a result of breach of contract - the burgers have failed to match their expectations and are not of satisfactory quality. Liability is strict under the Sale of Goods Act. The consumer will turn to the supermarket who will simply pass claims onto their suppliers and manufacturers, relying on likely contractual indemnities. Manufacturers need to scrutinise their quality control, governance, supply chain contracts and auditing over their own suppliers in an effort to avoid claims in negligence for their failure to have taken reasonable care in the manufacture of their food. The supermarket chains will undoubtedly have robust contracts in place, which food manufacturers should look at now. The cost to the supermarkets, which have their brand and reputation to protect, will be difficult to evaluate.

Find more comment from the UK manufacturing community at www.themanufacturer.com

to develop every technology required to make it. Different countries have developed areas of expertise and economies of scale. As a result the parts that go into a typical passenger car are now made in many different European countries. It is therefore essential that cross border trading is easy for the simple shipment of parts. Over 70% of Morgan sports cars are exported. Our largest single market is the EU outside of the UK. For the same reasons, it is essential that exports to countries in the EU are made as easy as possible.

TECHNOLOGY

Nigel Brooksby, chair, Cogent Life Sciences Skills Board

note with interest that the World Economic Forum’s Global Risks 2013 report asserts that “unforeseen consequences of new life science technologies is the risk area to show the sharpest rise in terms of likelihood in 2013 compared to 2012 risks”. Cogent, the sector skills council, is working with employers against a backdrop of unprecedented technological and scientific advances within life sciences. We need to ensure we have a workforce able to get to grips with these ‘disruptive’ technologies and bring the appropriate knowledge and skills to bear. New disciplines such as nanotechnology and bioinformatics will require talented scientists and, above all, the ability to apply theory to the real world. This will require much closer working between academia and industry – with courses increasingly tailored to meet the needs of industry and ultimately the population at large. We are working on programmes to do this. These are tremendously exciting times for life sciences, and growth remains a central ambition – but we also need to see continued investment in today’s and tomorrow’s workforce. Their contribution will mitigate the risks we face and support every part of the industry and supply chain, as it contends with innovation and technologies that we once only dreamed of.

If you would like to respond to one of ’s articles or comment on current manufacturing trends and events please email your letter to j.gray@sayonemedia.com

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Supported by:

the automative imperative! 2012 saw the highest level of automation worldwide with 2013 set to beat these figures. However, despite a worsening of the economic situation in Italy, its factories are still four times more automated than those in the UK. We need to grasp the benefits of automation - now!

For UK manufacturers to compete both domestically and globally requires investment. Automating all or parts of your business can increase productivity and throughput, decrease waste, improve employee satisfaction, reduce costs and add to bottom line profit.

3f dele or 2 on a g ll Book now or miss your chance to Dele ate plac es gate learn from experts and engage with likef e ÂŁ 3 e 9 : 5 minded executives to gain a better + S Man ubscrib VAt ufac ers to understanding of how automation add turer r The ition e can benefit your business. al 20 ceive a n % off

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Hear From Leading manuFacturers incLuding:

Unleashing the power of automation in UK manufacturing

Simon Tween,

Plant Maintenance Coordinator, CNH Uk Ltd

Mark Ager,

Group CEO, Stage Technologies

Jonathan Short, Managing Director, ECO Plastics Ltd

Sponsored by:

call: 020 7401 6033 email: events@sayonemedia.com www.themanufacturer.com/skills Researched and delivered by:

Interview Alison Kinna, Outokumpu UK

About Outokumpu Outokumpu acquired Inoxum, the stainless steel arm of ThyssenKrupp, for Eu2.7bn in January this year to become the largest manufacturer and distributor of stainless steel in the world. A Finnish company, Outokumpu’s headquarters are in Helsinki but production centres span the globe from the UK and Germany to the USA, Mexico and China. Its manufacturing operations in Sheffield include a melt shop, bar mill and a service centre and the company employs around 600 people in the city region. The UK is Outokumpu’s third largest market for stainless steel products and the company sells between 80,000-100,000 tonnes of stainless steel to UK customers every year.

The new ballustrades in Leicester Square, London were made using Outukumpu’s stainless steel

and open minded to change. So, yes – I believe it is putting the industry at a disadvantage.” : What do you feel more generally about the outlook for UK stainless steel and British industry? “It is hard to see any opportunities for substantial growth in 2013. During the global financial crisis demand for stainless steel products in the UK shrank by twenty per cent and we do not expect that to recover for another three or four years. The Chancellor was right to say that 2018 should be the soonest we expect to see any growth. My concern for recovery really lies with the UK manufacturing base, our customers. The variety of applications for stainless steel mean that this customer base is extremely broad, from construction through automotive, oil and gas, catering, medical instruments, nuclear and more. We rely on all of these different parts of the economy finding business and not offshoring their operations. I would like to see more support for the UK manufacturing base, all the usual things like increasing the availability of credit in order to encourage investment, but also reducing the burden of investment. There is often a lot of red tape, which can hold investment back. I hope the new Business Bank established by the Department for Business Innovation and Skills can do something to address the credit problem, but honestly it is a tragedy that it has come to setting this institution up. When you think of the amount of money that has been given to the banks over the last three or four years and how many

When you think of the amount of money that has been given to the banks over the last three or four years and how many times they have been told to lend to business it is a disgrace that the Business Bank is still necessary

times they have been told to lend to business it is a disgrace that the Business Bank is still necessary. A critical move to improve the outlook for UK stainless steel would be to see some big infrastructure projects come to fruition, but the Autumn Statement was pretty disappointing in terms of what it promised here. There are contracts out there to win though. Sheffield City Council recently announced it will spend £2 billion on local infrastructure and we have met with them and their development partner to make sure that we promote our name and locally manufactured stainless steel as much as possible during the bidding process. Often if you ask a customer if they would support local sourcing the answer will be ‘yes’, but supply chains are so fragmented and so many products globally manufactured that it can be hard for customers to actually make that choice. You also have to ensure that project specifiers identify stainless steel in the first place and then perhaps a particular grade. The name and location of the supplier is often the last thing on the customer’s mind by that stage.” : What are your own ambitions for your career now? “The company is going through a big period of change at the moment with the acquisition of Inoxum (see box). This will mean some new responsibilities for me with regards to our Scandinavian markets. Longer term I would naturally look to progress further in the company and this will mean looking to more global roles. I would be keen to gain this experience as I enjoy collaborating across diverse cultures. It is a great challenge and a great opportunity.” March 8 is International Women’s Day. See ’s March issue for more news and interviews with inspiring female figures in UK industry.

Have your say at www.themanufacturer.com

60 second Interview

Robin Southwell CEO, EADS UK and President, ADS On February 27th the West of England Aerospace Forum holds its Annual Conference and exhibition, located in one of the UK’s most important hubs for manufacturing. Boss of EADS UK Robin Southwell will speak at the event. : Why is this event important to ADS, the South West region and the aerospace industry? “I was very keen to get involved. The strength of ADS is in its members and when you disaggregate that the South West is a really important segment. The importance of this event to the region shouldn’t be underestimated. Around 60,000 employees work in aerospace companies in the region and, against the national average, these are highly paid jobs. Being such an important element of the regional and national economy, you have to pay heed to the multiplier effect that an event like this can have on supply chains and spending. Since aerospace is growing through exports, boosting confidence and encouraging intra-industry networking is a way to reduce dependence on a moribund domestic economy.” : The theme for the conference is ‘Supporting You’. How will your address interpret this? “While companies can compare their power to bail out, we are all in the same boat as an industry.

“We are all experiencing this challenging and turbulent economic time together and we must – together – work out how we get out of it. This means the supply chain must be properly supported. Our members have a responsibility to pay promptly and in full. Where possible we must share intellectual property for the greater good and we must look around for lessons from other successful industries, like automotive. My address will also expand on the fairly radical and aggressive targets I laid out to ADS members at our annual dinner last month.” : What has made the South West such a strong aerospace sector hub? “The sector’s presence there is driven by its history. The evolution of the aerospace industry’s infrastructure coincided with the Second World War and for understandable reasons production was moved away from the South East to the important port of Bristol. “With this foundation, important companies like Roll-Royce, Airbus and AgustaWestland have built leading engineering and design facilities in the region and these have been supported with parallel developments in academic centres of excellence. Bristol, Bath and Exeter are leading institutions for the research and study of aerodynamics and aerospace engineering. I also include Swansea University in the region for the purposes of emphasising regional aerospace expertise. Most recently this has been strengthened by the National Composites Centre near Bristol. “Furthermore, the South West is a cost-effective location. The population, and therefore the workforce there is stable. As a region, it delivers

many things that an investor would be looking for.” : What are the most exciting prospects for 2013? “Under ADS leadership, the [aerospace] sector now has a coherent and effective partnership with the Government which is delivering. I am looking forward to building on the Aerospace Growth Partnership which became effective last year and to establishing a Defence Growth Partnership very shortly.” : What concerns you most about 2013? “The UK economy is not growing and throughout 2013 we will continue to experience economic turbulence. Banks are still not functioning as they need to. It is hard to raise debt and internationally the effects of the global credit crunch are still very much in evidence. “To steer our way out of this environment we must make sure that we bring to conclusion the things we are now doing to improve and resolve it. ADS is very pleased with the actions being taken in the UK. As a sector we remain on a growth path with large order books at Rolls-Royce, Airbus and Bombardier and strong investment in R&D. If we remain confident, I have no doubt that we will come out of 2013 even more robust than we were going into it and that we will be ready for an upturn in 2014 and beyond.” For more information on the WEAF Annual Conference on Feb 27 2013 go to: www.weaf.co.uk/events

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Skills Provision Sheffield style Will Stirling reviews the multitude of skills activities bossed by the Advanced Manufacturing Research Centre with Boeing’s Training Centre.

The Sheffield City Region LEP Manufacturing Skills Strategy

he Global Manufacturing Festival in Sheffield is divided into four streams where visitors can gain specialist knowledge and business opportunities: Aerospace, Medical, From Febr Nuclear and Renewable Energy. will br uary to Ap ril, ing up But skills provision is the theme that progre dat Manu ss with the es on unites all of these. G fa South cturing Fe lobal Alison Bettac has been very busy. stival Yorks h manu , In just a year and a bit as director of factur ire’s annua in l for the g sho training at the Advanced Manufacturing wca Sh mater effield regio se Research Centre with Boeing, Ms ials an engine d met n’s Bettac, with the help of key individuals at a ering exper ls the Sheffield Local Enterprise Partnership tise. and other stakeholders, has built several programmes to get manufacturing training up to the level that employers require. The following are some projects developed by the AMRC Training Centre that will be explained at the GMF 2013 in April.

A strategy developed by the Skills Lead for Manufacturing with input from the regional LEP, local employers, sector skills council Semta, manufacturers’ body EEF and its membership. Stakeholders are debating developing this into a national strategy. Among other aspects, it is developing training pathways for two key roles in manufacturing: Commercial sales engineer - because of the need to develop individuals to optimise wealth creation through UK and international markets Operational management - to produce the operations directors and factory managers of the future. Employer feedback said they had skilled engineers and good management but not a blend of both skills Both pathways are available to start from 16-years old. “UKCES, the Technology Strategy Board and BIS saw the group in December and pending UKCES approval a bid to the Employer Pilot Fund (check) will be submitted in March,” says Alison Bettac. “The bid is backed and endorsed by employers.”

Engineering Exchange Portal A work in progress website that serves as a portal for a range of engineering enquiries, including: Skills needs, funding, supply chain skills requirements, training resources and providers. The portal is being constructed and currently funded by Made in Sheffield, a 150-strong company consortium run by Charles Turner of Durham Duplex. “The Engineering Exchange came about from employer demand for a one-stop information shop for engineers and recruits. The plan is to have an exchange in every HVM Catapult,” says Miss Bettac.

Event

Global Manufacturing Festival

Enhanced model for Higher Level Apprenticeships

he AMRC Training Centre has devised an enhanced model to deliver Higher Level Apprenticeships. Five of the seven HVM Catapult Centres (the AMRC with Boeing is one of these) have joined a collaborative bid for the Employer Ownership Pilot to fund this programme. Some of the HVM Catapults can facilitate apprenticeships up to NVQ Level 7 and beyond (equivalent to doctoral level). The demand for this, again, comes from employers. The AMRC and its partners advocate a ‘one centre approach’ to training. Apprentices would study at the Catapult centre only, without shuttling between the centres and a college. This could save employers money by, for example, reducing the apprentices’ total study by one year, says Miss Bettac. What is the main difference in the Enhanced Model to the normal route to a higher apprentice? Under the normal route, an apprentice receives an NVQ, a secondary technical certificate and some personal

development elements such as employee rights and responsibilities. “The enhanced model returns to the standards akin to the original Engineering Industry Training Board syllabus, where the NVQ part will be a lot more extensive than it is now,” says Bettac. The enhanced model will include master classes in more managerial disciplines: lean manufacturing, continuous improvement, statistical analysis and presentation skills. “These extra components aim to produce a more rounded person capable of doing business as well as having a trade.” The model draws upon some elements of the EEF 2012 Skills survey, Skills for Growth, including what skills companies need to nurture internally to be more effective in R&D and design engineering. Consider two pathways into a higher level engineering job (see diagram). Route One: Start from Performing Engineering Operations NVQ Level 2

Pass through this employer / One Centre route to NVQ Level 5

Equivalent to university degree

University

Graduate fresh out of university with limited exposure to companies

Route Two: ‘A’ Levels

Candidates from route one have several advantages, says Alison Bettac. “In our experience, the long-term higher level apprentice is a more rounded employee, he knows how the things he has learned are applied to the business, is more savvy about commerce, and is better at interacting with people in the business. They are world’s apart to a university graduate,” she says. In addition to all this, the AMRC Training Centre with the Sheffield LEP have pledged to sign 140 companies to their separate AMRC apprentice scheme by September. To date, 120 companies have signed up. The scheme is open to companies outside the Sheffield City Region. “We are looking at a hosting a residential programme, at the halls of residence [University of Sheffield] and with host families for 16-17 year olds,” Bettac says.

MTA- AMRC apprenticeship training programme

he Manufacturing Technologies Association is co-hosting an apprenticeship event at the AMRC on February 8. Called the ‘Commercial Engineering Framework’ it is designed for training in emerging technologies in machining metals and composites, and incorporates business management and a foreign language. The AMRC Training Centre and the MTA are developing the pathways for it. See p85 for more on the Commercial Engineering Framework.

Skills Surgery hosted at GMF 2013 The Advanced Manufacturing Research Centre Training Centre, with partners and other providers, will host an all day, drop-in surgery at the AMRC at the GMF exhibition on April 18th. Staff will explain the two programmes featured here and will provide advice around access to funded skills activities including Fit 4 Nuclear, the Sharing for Growth Programme and support for different apprenticeship pathways. Timings TBC but assume the surgery will run most of the day.

Servival ‘Servitisation’ – jargon invented to fulfil the needs of management academics or a business paradigm companies should be exploiting to remain competitive? Jane Gray looks into the practicalities of selling services as a route to enhanced revenues and growth.

he term ‘servitisation’ is a piece of business jargon that has become popular in recent years to describe a trend for manufacturing and product orientated firms who develop complimentary services for their customers. A third of large manufacturing firms globally are now ‘servitised,’ according to research from the Advanced Institute of Management Research (AIM). The figure stands at 60% in the USA and anecdotally it also seems that SMEs are increasingly leaping on the bandwagon. In the UK, where 99% of business is accounted for by SMEs, around 40% of manufacturing companies are now thought to be servitised (see graphic). But what does this actually mean? How do operations at these servitised manufacturing organisations differ from their traditional cousins and what investments need to be made to achieve the transition?

Service models Professor Andy Neely, deputy director of AIM and director of the Cambridge Service Alliance, a business-led group exploring the design and implementation of complex service systems, explains that servitisiation can broadly be grouped into two types – product focused services and customer focused services.

Festo’s internal training scheme develops service skills in staff

5 steps to servitisation Consider potential service value propositions around your product. Remember the end outcome for your customer is not owning your product but achieving some other goal Consider whether you can help achieve that goal without selling your product Consider whether you will be able to deliver the service using in-house resources and who you might need to partner or collaborate with externally Asses your appetite for and ability to cope with the risk implications of providing services Form a skills and technology strategy which will deliver the business infrastructure you need for service provision

Leadership in manufacturing

“The first is a well developed approach in the UK and globally,” explains Prof Neely. “Product based service is typified by manufacturers of trains and planes – anything which is meant to last for years and will need an ongoing supply of spares and support.” The second type of service however, is where a great deal more scope lies for manufacturers to realise increased revenues, market share and customer retention. “The logic behind customer focused services is outcome based. The manufacturer does not sell a product but enters into an agreement to help the customer achieve their objective,” explains Neely. It’s an approach which is relatively well developed in the defence sector where the MoD, the customer, is increasingly contracting for capability rather than placing equipment orders. This way of doing business is spreading. Customer focused services are now a growing concern among UK pharmaceutical and healthcare companies according to Neely. “There is mounting awareness in this sector that drugs are exceeding their patented lifecycles and the cost of new drug development is escalating. This is coupled with a realisation that the end customers for pharmaceutical firms don’t actually want drugs. They want to be healthy and this means manufacturers need to move

Service focus increases customer contact points in an organisation and this needs tracking

Service skills

The logic behind customer focused services is outcome based. The manufacturer does not sell a product but enters into an agreement to help the customer achieve their objective Professor Andy Neely, Deputy Director, AIM and Director, Cambridge Service Alliance

One of the biggest challenges for manufacturers attempting to develop service offerings is the need to realise that additional skills sets will be required of employees – and not just those working in sales and direct service roles.

esto, the German automation equipment provider, is relatively well advanced on its servitisation journey. Gary Wyles, MD of Festo Training and Consulting UK says the original plunge in the direction of services was made when the company realised there was diminishing scope to differentiate its products on performance and reliability merits. “This puts pressure on staff to raise their understanding of customer businesses and their sector conditions,” says Mr Wyles. Festo’s training and consulting arm has developed a Fit for Change programme to help sales engineers step up to the mark. The coaching programme includes sending sales representatives out to industry conferences and debates. “We need them to immerse themselves in sector business concerns,” states Wyles. “They still need engineering and product knowledge, but it is becoming more and more about business knowledge.” Wyles also says that rising customer expectations around service and rapid issue resolution mean more staff than ever before are expected to interact directly with customers. “Around eighty per cent of Festo’s staff will now be a customer point of contact,” he says – an increase from around 50% spurred by the need to access diverse knowledge pools and answer customer queries or resolve issues quickly. The same impetus has meant reconfiguration of manufacturing processes. “We need to have greater ability to respond to a more diverse range of customer demands,” says Wyles. “This means that right back through manufacturing and into the R&D department employees need to show they are interacting directly with the market.” Some of this interaction will require monitoring of equipment and its performance as well as data collection on market trends and associated influences. Andy Neely points out that, quite apart from the significant technology investment that this may mean for manufacturers, it also raises another skills issue. “Companies need to understand the data they are collecting,” he observes. “For a time that understanding may be found in-house, but as service systems grow and their complexity increases most find that they need to bring specialised data scientists on board and this needs to be built into skills development and recruitment strategies from the start of a servitisation journey.” Festo will present at ’s Future Factory event: Driving Skills Development in the Workforce on February 26 (p34)

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Leadership in manufacturing

away from producing drugs and toward producing health outcomes for society.” You’ll be forgiven at this point for issuing a snort of scepticism. And Neely admits that many are “reticent” about accepting the need to so radically alter their business model and their ability to do so.

Requirement Industry leaders such as Nigel Brooksby, chairman of the UK Life Sciences Board at sector skills council Cogent however, assert that the need for remodelling is very real. “Over the last few years there has been a dark cloud over the global pharma industry with the ever present ‘patent cliff’ and the pipeline drought as we approached the end of the blockbuster era,” he says. “‘Big Pharma’ has responded with new business models and restructuring. And inevitably CEOs and directors have come and gone with the regularity of Premiership football managers!” In 2013 as these change take traction, Brooksby says we can expect to see those who have laid the best remodelling plans “break free of the rest of the pack”.

Ability With regards to ability, the call to action is less clear cut. There are broad ranging skills and technology requirements behind the successful execution of a servitisation strategy – there are also downsides to achieving the transformation, particularly for outcome-based services and for smaller companies says Neely. “Companies should carefully consider their appetite for and ability to shoulder the additional risks and liabilities that come with offering services,” he explains. Traditionally, when a manufacturer sold its equipment to a customer it took little part in the risk of the customer’s operation failing. “For example, I might have sold earth-moving equipment to a customer who aimed to shift 100 tonnes of

Measuring service success In today’s economic climate the ability to prove the value of any strategy and show return on investment are essential.

ut with regards to growing a service enterprise around or alongside a manufacturing business, this can be difficult. Mark Ager, MD of Stage Technologies which produces stage automation equipment, explains that, in his company’s case, the value of service activities took a long time to be realised due to a focus on measuring turnover rather than contribution. “Three years ago our services business, which is mainly focused on electrical maintenance of our equipment at customer sites, totalled around £700,000 a year. For a £25 million turnover company this seemed fairly insignificant and we had come to view it as something of an irritation,” recalls Mr Ager. “Then, three years ago we took a fresh look and thought about services in terms of contribution rather than turnover. Suddenly the £700,000 was far more significant to the business.” Having grasped this Stage Technologies increased service resource by recruiting additional engineers and in 2012 Ager says services contributed around £2.2m. The biggest investment made to facilitate the service expansion has been building a service database to track customer issues and information. “It’s difficult to estimate the total cost of expanding services in the past three years,” says Ager. “Particularly since a lot of work has been done in-house. But I would say about £30,000.” Ager says that focussing on turnover can be very misleading for manufacturing firms and can obscure hidden potential in activities to bring far more real value to the business. Essential in Stage Technologies’ growth of both its services and rental businesses has been an active decision on the part of the board to measure contribution rather than turnover. “Turnover is an easy measurement which many people understand,” comments Ager. “In addition banks like it as a measurement as it tells them how much money they will get to handle. But concentrating too much on turnover can make you a busy fool.” Mark Ager will speak at ’s AutomateUK conference on February 26 (p22 for details) earth per minute from a site. Traditionally the risk of failing in that objective was the customer’s alone. But if I agree a contract which guarantees my equipment and services will help achieve the target and my equipment breaks down, suddenly I am at fault.” And standard product warranties or professional indemnity clauses

may not be sufficient to cover your back. This means that, for smaller organisations, a mistake can kill the business very quickly. “Organisations need a critical mass in terms of turnover and financial stability before they consider expanding into services,” sums up Neely.

From Lifestyle to Mature Growth

Brad Pitt as Billy Beane in Money Ball. His baseball team learns the power of analytics and asking the right questions when seeking success. Image acquired from www.movieposterdb.com

The pain of taking the leap to that next stage of growth can be enormous. But as small businesses continue to dominate the UK economy, can we ease the strain of growth and accelerate it by taking a lighter hearted approach to business expansion? PMSI explains the rules of the growth game.

here are 5 stages of growth for small businesses, according to the Harvard Business Review. These include a drive towards greater delegation, co-ordination and collaboration. All of which require a focus on reporting and improving the analytical capabilities of leaders in small businesses.

Business is fun PMSI Consulting works with organisations of all sizes to help develop these skills. For the past two years it has facilitated a business intelligence (BI) game for Kingston University’s Strategic Project Management masters programme – helping students to understand more of how business and technology need to work together to achieve growth.

Games such as SimCity and Theme Park jump out at me as being similar to topdown strategy Angus Urquhart, Manager and senior data scientist, PMSI

Pamela Edmond, associate director at PMSI, says that the impact of the game is the same no matter whether the player is a post-graduate with business experience or an undergraduate. “Realising that there is fluidity in the supply of information; how you need to harness that; and ultimately ask the right questions about your business; all seems to lead to a competitive challenge that everyone enjoys,” she says. “There’s also a realisation of just how many different perspectives there are to consider when looking at business performance. Asking the right questions of the business and market data often differentiates those who simply survive as businesses and those which outperform their peers to grow.” Doctor Serhiy Kovela, course director for Business Information

Technology at Kingston University, talks about the practical learning the PMSI game provides. “It has been great to be able to turn the classroom into a boardroom. I like to think we aren’t like the BBC’s Apprentice. Our students collaborate and work together rather than fighting for attention, however, it was still great fun to see them enjoying a competitive experience in an environment that is more forgiving than the real world.”

BI & business growth Often the first signs of the journey towards growth are the first steps towards a fledgling BI infrastructure. This includes installing an ERP system, with basic monthly reporting, but it can also begin when leadership starts asking the right questions about the future and the business

Leadership in manufacturing

vision develops a need for answers to complex questions and for more formalised business process development. So where’s the fun? Business process development can be hard, frustrating and daunting. In PMSI’s experience, a common fear for small business leaders is a loss of control or ability to delegate responsibility for such valuable data about their business. By easing into business process development and the building BI capability using games it is possible to broaden the skills of the management team and highlight skills or understanding gaps painlessly. As Plato said: “You can discover more about a person in an hour of play than in a year of conversation.”

Leadership PMSI has therefore started running smaller scale versions of its BI game with management teams in order to bring fast-track leadership development and build confidences in business for their next steps to growth. “Leadership is vital,” she says. “Having that commitment from the visionary and the wider management team working together, is the key to a solid foundation for BI implementation. If you get the team to understand all the different agendas and objectives; how they impact one another; and the overall effect on the greater good of the organisation’s growth agenda; you can get consensus on what’s required.” This is no easy task, admits Edmond. But putting pressure on a team within a fictitious competitive environment helps to drive behaviours which produce results in challenging circumstances.

Asking the right questions This is one of the hardest steps in achieving growth and establishing a useful BI infrastructure. But team work makes the process easier. Edmond relates this team perspective to the 2011 film Moneyball about a struggling baseball team who face relegation. “The character Billy Beane, the club general manager, is the visionary who commits to what he was sees in his team performance analytics. But only a new perspective from the character of Peter Brand, allows the team’s management to start asking the right questions and building a process towards success.” Grady Fuson: We’re trying to solve a problem here. Billy Beane: Not like this you’re not. You’re not even looking at the problem. Grady Fuson: We’re very aware of the problem. Billy Beane: Okay, good. What’s the problem? Grady Fuson: Okay, Billy. We all understand what the problem is. We have to replace... Billy Beane: Good. What’s the problem? Grady Fuson: The problem is we have to replace three key players. Billy Beane: No. What’s the problem? John Poloni: Same as it’s ever been. We’ve gotta replace these guys with what we have existing. Billy Beane: No! What’s the problem, Barry? Scout Barry: We need three eight home runs, a hundred twenty RBI’s and forty seven... Billy Beane: Aaahhh! The problem we’re trying to solve is that there are rich teams and there are poor teams, then there’s fifty feet of crap, and then there’s us. It’s an unfair game…We got to think differently.

Perspectives on growth So each business is at a different stage, or level it would seem and more organisations now find themselves suddenly thrust into larger reporting structures, through either acquisition or merger. Understanding how this affects growth plans can also become a game with the right pragmatic approach. And the right software. Choosing the right BI software should consider the users, the data and the vision – both of parent companies and acquired business units. Are you looking at a top-down strategy? What are your reporting requirements, now and in the future? Who needs to be using it and why? “Games such as SimCity and Theme Park jump out at me as being similar to top-down strategy,” says Angus Urquhart, manager and senior data scientist at PMSI. “You’d have a map of your area of interest – whether it was building a city, running a theme park or conquering the world – you’d deal with scarce resources, make decisions based on these restrictions and await the outcomes. Sound familiar? Maybe the people developing BI software are from the generation that grew up playing these games, but the point is that it never stops.” An ongoing level of change in the data is obvious and, in business it is largely driven by the complexity of markets, company growth and new processes. When these data sets are brought together in a single view it is easier to see where the next stage of growth is. But getting the right BI software to support this needs to be well thought-through, tested and not approached lightly. Urquhart urges investors to makes sure that the technical capability is there, but also that the interface inspires users to make the most of it. “The complication that BI software has in comparison to basic gaming, for instance, is that the underlying datasets are often much more complex so much more attention is paid to the backend crunching of data, as to the front-end interfaces,” he says. “Yet the front-end is where the fun can be for those enjoying seeing a small business change and grow.”

Picture this W Proof – manufacturing does have a positive image. The winners and nearlies in EEF’s annual photography competition were revealed in December at a reception in the House of Commons.

ith more than 880 entries, the judging of the 2012 competition was particularly difficult. But the judging team, comprising Canon UK, The Guild of Photographers, Lombard, The Times and The Manufacturer, selected their favourites from a strong field of shortlisted images that captured the diversity and vibrancy of manufacturing in the UK. Attending the presentation, business minister Michael Fallon said the competition was the type of activity required to address the UK’s technical skills gap, saying “we have seriously got to

encourage more people to enter the [manufacturing] industry.” Terry Scuoler congratulated participants in the competition saying: “The winning photographs proudly showcase the proud practice of UK manufacturing. They illustrate why it must play a significant role in industrial strategy and recovery - just one of the themes of EEF’s National Manufacturing Conference in March.” (p48) All the images shown here won an award in the EEF Photography Awards 2012 in partnership with Canon, Lombard and The ERA Foundation.

Amateur category Winner Manufacturing a Filter by Robert Watkins

Nikki Paine of Canon with Gareth Humphreys MBE, Anna Schlautmann and Natalie Snell all of MBDA

The finishing process to a filter manufactured at Croft Engineering Services in Warrington. Judges’ citation: The judges were impressed with the strong composition, good exposure and tonal range of this image with the welder’s arm leading in to the focal point.

Mike Smith, winner of the Professional photographer category, Robert Pickles from Canon, Tamika Morris, winner of the Young photographer category, Neil Lloyd of Lombard, Robert Watkins, winner of the Amateur photographer category

Runner-up Infinity Bridge by Steve Watts The Infinity Bridge in Stockton-on-Tees was constructed in 18 months, on time (December 2008) and to budget, by Balfour Beatty and UK steel fabricator Cleveland Bridge & Engineering Company, with engineering consultants White Young Green managing the project. It employed 530 workers and used in total some 450 tonnes of Corus UK steel, 1.5 km of locked coil steel cable, 780 lights and 5,472 bolts, nearly all sourced in the UK. Judges’ citation: The Infinity Bridge flows across the image, with good symmetry and lovely rich tones, while the person walking on the bridge gives a sense of scale.

Highly Commended Energy by Jean Illingworth. Old and new, clean and not so clean technology. Creating energy, outshone by natural energy. Image taken near Draw Power Station in Selby, North Yorkshire. Judges’ citation: A well composed and clearly thought through shot with the horizon in the lower third, and combining a range of energy sources.

EEF

Photography Competition

Professional category Winner Precision by Mike Smith Self-contained white metal PTFE faced hydrodynamic bearings, designed and manufactured by Rolls-Royce Michell in Newcastle upon Tyne, for destroyers, submarines, luxury yachts and cruise vessels. Judges’ citation: An intriguing image that draws the viewer in, bringing together a kaleidoscope of colours and a human element.

Runner-up Watching and Waiting by Ray Troll The BAE Systems-developed, all-British Mantis Unmanned Air System pictured at Warton in Lancashire. It was designed as a Medium Altitude Long Endurance Reconnaissance and Surveillance system capable of remaining airborne for over 24-hours, flying autonomously.

Young category

Judges’ citation: This image conjures up drama and has a sinister feel with the skies parting. It is extremely well executed and framed to accentuate the subject.

Runner-up Moulding Chambers by Shane Butler Just one of many casting moulds that are made at Chamberlin & Hill in Walsall which are used in British 21st century automotive and construction sectors. Judges’ citation: A strong graphic and congruent feel brings out the sense of metallic texture.

Highly Commended Liquid Gold by James Speakman

Winner 2012 Icon by Tamika Morris An image of the iconic Olympic torch taken during the London Olympics 2012. Judges’ citation: An interesting view of a heavily photographed and profiled icon, demonstrating good use of spot colour. The judges felt this image captured the spirit of 2012.

Rosy Apple sweet mixture being poured onto an internally cooled table at William Santus and Company in Wigan, Lancashire. The process is started by heating all ingredients in a gas fired pan and then moulding them by hand to form a large mound of the sweet. This is then fed through a forming machine to produce the small sweets “that many know and love”. Judges’ citation: A technically well executed image in the lighting conditions, giving a feel for the sweep of the mixture.

EEF boss Terry Scuoler challenging the government to have the courage of their convictions in a manufacturing strategy

M Seize the day Did you attend EEF’s National Manufacturing Conference in 2012? If so you should remember the day well, from 6am and throughout the day, manufacturing was discussed in newscasts and the word began to trend on national twitter streams. Could the conference create the same impact in 2013?

arch 6 2012 was the day that Nissan announced 2,000 new jobs in Sunderland and the day a letter from Business Secretary Vince Cable to the Prime Minister was leaked, even as he spoke to delegates at EEF’s first National Manufacturing Conference. That letter denounced his government’s lack of industrial strategy and coherent support for industry. The combination of high profile announcements and the concentration of manufacturers in London that day created the

Questions from the floor challenged speakers at EEF’s first National Manufacturing Conference

‘perfect storm’ conditions for pushing manufacturing up the public and political agenda. The furore died down quickly, but there are indications that the messages from the day endured – not least the fact that the Department for Business Innovation and Skills unveiled its industrial strategy in September last year. But how effectively are positive steps like this taking hold? What new conditions are impacting them or raising fresh concerns for UK manufacturers? Will their discussion with key political figures at EEF’s second National Manufacturing Conference be enough to let UK manufacturing storm the headlines and social media channels once again? Global economic uncertainty and the UK’s relationship with Europe are likely to colour discussion next month. But EEF’s chief executive Terry Scuoler expects that core issues, such as skills, will remain central to debate. Albeit with a tone altered by growing urgency and dissatisfaction with progress. Mr Scuoler says that 2012 was defined in his eyes by rising concerns over the impact of industry skills gaps. He is keen to use the trade body’s conference as a tool to raise awareness and refine the effectiveness of skills solutions one in particular. “There’s got to be discussion of the Employer Ownership of Skills Pilot,” he says. “If only we can use this demonstrator to prove that it is possible to take money from

EEF

National Manufacturing Conference

Roland Aurich, CEO, Siemens UK and North West Europe

n March 5, Roland Aurich, CEO of Siemens UK and North West Europe will speak at EEF’s National Manufacturing Conference in London. Terry Scuoler, CEO of EEF describes Mr Aurich unhesitatingly as a “role model” for British manufacturers and anticipates his address keenly. Siemens employs around 8,000 people in manufacturing jobs in the UK, its supply chain and customer base across a range of products for sectors from health care to renewable energy and factory automation, is extremely far reaching. “His presence will certainly spur aspiration for Siemens’ suppliers and partners,” says Mr Scuoler. And for those businesses who do not have direct contact with Siemens, the attitude, approach to strategy and the business intentions of this man, are, nonetheless, critical indicators for the health of UK manufacturing. Ahead of EEF’s National Manufacturing Conference Mr Aurich share’s some thoughts on Britain’s relationship with Europe, UK industrial strategy, and the power of industry to create its own environment for growth. : David Cameron wants to change the UK’s relationship with Europe. How would a distancing effect Siemens’ investment plans for the UK? “The government has an important role in making the UK an attractive place to invest and a crucial factor is the predictability and stability of the UK market so that investors, like Siemens, have the confidence to make the long-term decisions necessary. Siemens has been active in the UK for 170 years, it remains a significant market for us and we see the UK as great place to do business – as long as new levels of uncertainty are not introduced that are unhelpful. “From a UK manufacturer point of view it is important that the UKCES and put it into the hands of employers without the need for layers of bureaucracy or provision. If only employers can show that they are using the money wisely and flowing it through their supply chains to create the skills they need.” Government has displayed weakness in the proper implementation and funding of the strategies designed to support industry time and again, admits Scuoler. And he knows that consistency of policy across

UK continues to have an active voice in Europe, and plays a real role in the EU, which accounts for nearly fifty per cent of UK exports. “But the competition in the long run goes far beyond Europe – and let’s be clear here - it’s a global challenge. In that context a strong Europe including the UK is better for sustainable growth and job creation.” : What do you see as the most positive steps taken by UK government to support industrial growth in recent years? “The focus on skills and developing the UTC model has helped Siemens to hire apprentices that can work across our business. We now have 300 apprentices working for us in the UK. Recent months have also seen progress in areas such as business finance, and utilising the tax system to bolster investment, R&D and export support. “Some of these measures, especially business support and access to finance through channels such as the Advanced Manufacturing Supply Chain Initiative, may not benefit Siemens directly, but benefit the wider supply chain and our customers – which ultimately helps our business to grow.” : What is still lacking in government industrial policy? “We’d like to see a more structured approach from government. The Coalition must get the whole of government working together and ensure its reforms are not watered down in delivery. Government still needs to make it easier for business to access finance on the right terms and to invest in skills. It must make our energy supply competitive and ensure out tax andpension systems support firms looking to invest.” : What initiatives would you like to see industry taking, independent of government policy, to ‘make its own luck’ and buck the uncertain economic environment? “What is important is that industry works to collaborate as well as compete. There are many areas, within research and development for instance, that would see immense technological progress if companies work together – especially larger firms supporting some of the smaller businesses in the UK. “Siemens collaborates with a number of companies, providing training and support to staff, including apprentices, demonstrating that a partnership approach to creating growth is possible, even inside a market economy. “And companies really must work harder to market the good products they make and develop here in the UK. Often we don’t shout loud enough about innovation created on British soil.”

political divides is also debilitating. However, he is hopeful that the second National Manufacturing conference will lay some worries to rest on these heads. “I don’t doubt that it the run up to the budget, [shadow chancellor] Mr Balls will position himself somewhat in ‘opposition mode’ at the conference. But I will be extremely disappointed if anything he says cuts across the intentions laid out in the industrial strategy unveiled by BIS last year.” Will he? Come and hear

for yourself and take the opportunity to publicly challenge the actions and intentions of policy makers and influencers. For more information on EEF’s second National Manufacturing Conference, March 5, Westminster go to: http://bit.ly/EEFConference

Contribute to and follow the debate on March 5 via Twitter: #ukmfgconf

The future factory: Finessing man and machine Two events in

’s Future Factory series explore industry’s hottest topic – skills gaps.

ccording to manufacturing sector skills council Semta, the UK needs to recruit around 170,000 individuals in the next five years to replace retiring professionals and maintain competitive production.

Half of these individuals will need to be qualified technicians, engineers and scientists. But this is just a part of the skills concern which manufacturers’ body EEF says only escalated among its members in 2012 (p48). For, in addition to finding fresh blood, Semta says manufacturers need to upskill 274,000 current employees whose abilities do not match the UK’s competitive manufacturing requirements.

Driving Skills Development in the Workforce

reating more highly skilled technicians and attracting talented, motivated new recruits is a tall order – particularly when technology moves fast and the economic situation makes forming and investing in skills strategies complicated. Not to mention that manufacturing jobs start from a notorious low point in the estimation of young people in the UK.

Only collaborative engagement with schools will change perceptions says Festo

Matt Black Systems has created a recruitment process which focuses on characteristics in prospective employees, rather than educational attainment, to ensure consistency of culture while fostering varied approaches to problemsolving

But, as Stephen Sands, marketing manager at equipment manufacturer Festo says, “manufacturers must try to make their own luck.” Festo will be a key supporter and presenter at ’s Driving Skills Development in the Workforce event in London on February 26. For Mr Sands, the central message is for greater industry collaboration on skills issues and on clarifying career opportunities in manufacturing and engineering companies to young people directly and strategically. “We will never change perceptions as single companies,” says Sands. “Festo does a lot of work with schools in the UK and I think we punch above our weight in making a difference.” Although part of a large international company, Festo GB employs just 115 people. “But it is only when large numbers of companies become active that we will start to get big changes in young people’s attitudes and ambitions.” At the conference in February Festo will talk about how it is working, through sectoral and geographic clusters, to form skills alliances which make sense.

Events

Driving Skills Development in the Workforce / Automate UK

AutomateUK “The key with finding collaborative partners is to remain open-minded,” he says. Another point is to ensure that engagement with schools and your offering of work experience and apprenticeships does not seem limited. “We’ve found it is much more exciting for them to see the bigger picture – and there is only so much we can offer them by ourselves,” says Sands. For this reason, Festo, with its suppliers and customers, is now sharing apprentices across the supply chain. An apprentice in any company on this chain can now do a placement at any other company. “We explain and demonstrate to young people the full value chain that you can be a part of when you work in manufacturing.” Sands will have some notes to compare with another speaker at the February conference – Nick Dawe, manufacturing manager at Dorset-based Matt Black Systems. Mr Dawe hopes the event will “introduce us to new strategies for efficiently communicating with prospective employees”. Mr Dawes’ presentation will focus on how manufacturers manage their recruitment process. “There needs to be better refinement and standardisation of recruitment to establish ‘monocultures’ in which people work well together,” he says. “But we must guard against the fact that monocultures also exacerbate blind spots in organisations.” Dawes will demonstrate how Matt Black Systems has created a recruitment process which focuses on fundamental characteristics in prospective employees, rather than educational attainment, to ensure consistency of culture while fostering varied thinking and approaches to problem solving. “This is the only way to protect against the fast pace of modern markets and unexpected variations in the wider economy,” he says. For more information call: 020 7401 6033 or email: events@sayonemedia.com For the full agenda go to: www.themanufacturer.com/skills #TMDrivingSkills

earning about skills development strategies continues at AutomateUK – a sister event collocated with Driving Skills Development in the Workforce. Steve Sands of Festo, which is sponsoring both events, explains how his company views the challenge of engaging and educating workers in the automation of processes. “The failure to educate the workforce about the objectives behind an automation investment, and to provide them with the skills they need to optimise new production information, is a key reason why some automation projects fail,” observes Sands. Festo’s presentation at AutomateUK will explore this weak point by looking into the leadership, management and planning skills that need to guide an automation project. “It’s in our interest to address this subject,” he says. “There are still too many FDs out there who are disappointed by their automation investments. It becomes a white elephant and that is damaging for our business – even though mechanical and engineering problems are rarely the cause for failure.” Mark Ager, MD at stage automation equipment provider Stage Technologies, agrees that skills are critical to address for the successful adoption and utilisation of automation investments. His presentation on this subject will focus on approaches to training those at the coalface of adopting automation – the

shop floor or the inexperienced customer. “Automation is a tool,” says Mr Ager. “You have to make sure you have the right automation for the job in hand and you need to know how to use it. The most important element in getting the best out of your automation technology is to engage staff in its implementation – from planning through to installation and ‘go-live’.” Communicating why and when automation is going to happen is critical to successful implementation, asserts Ager, as is providing suitable training for those who are going to use it. “People often see a lack of computer skills among potential operators as a major hurdle but in fact other skills – like spacial awareness and clever scheduling – are far more important,” he observes. “We’ve had great success training theatre staff to use our automation systems from a position where they were using seventeenth century processes – simply pulling on ropes to move set and scenery.” Training to a level of confidence takes a week if staff have been engaged in the planning and automation decision process,” says Ager. “By contrast we have seen total rejection and failure of automation systems in theatres where it has come as a surprise to staff.” AutomateUK will also address technology, financial and strategic issues around automation projects. For more information call: 020 7401 6033 or email: events@sayonemedia.com For the full agenda go to: www.themanufacturer.com/ automate-uk #AutomateUK

Perfect

Partners Industrial Partnerships will play a major role in the skills agenda going forward, says sector skills council Semta. But what do these evolving partnerships look like today and what are their ambitions?

uilding partnerships between like-minded organisations and businesses - both big and small - will help accelerate the implementation of best practice and the development and use of new technology. Crucially, partnership will also ensure the skills required among the workforce are more readily attainable. Semta’s chief executive Sarah Sillars says: “As an employerled organisation, we have long championed the need to bring together businesses in our sector, not to create talking shops, but to provide leadership and practical solutions to the problems we face and to take full advantage of the opportunities which arise. “We can work together to make youngsters and their teachers more aware of the careers which exist,” she continues. “We need to explode the stereotypical images which put some off from pursuing a job in manufacturing and develop training programmes and techniques for companies and their supply chains.” Mrs Sillars asserts that Semta is ideally positioned to offer advice and to coordinate employers so that funding can be won and their skills needs met. “The economy is forecast to return to growth this year and Semta will be at the forefront, leading the charge on skills that provide a return on investment,” she states.

Skills priorities Semta’s Sector Strategy Groups looks at UK skills priorities for individual sectors and work closely on delivery through a network of employer-led regional councils. Semta also has employer groups looking at specific skills issues, such as uptake of apprenticeships. Only 18% of engineering employers currently have and/ or offer Apprenticeships. SME engagement with Higher Education is another focus.

Aerospace One of the main sector priorities is aerospace. A strategic vision document - Reach for the Skies - sets out the opportunities and challenges facing the aerospace sector in the UK spanning a wide range of issues, including technology, supply chain competitiveness and manufacturing capability. For each of these challenges skills requirements are locking down major economic growth enablers. Aerospace employs over 100,000 people in long-term jobs, paying a salary 43% higher than the UK average. So securing the sector’s current and future skills and competencies is vital. But despite this, the industry has faced issues recruiting. Some 1,800 aerospace vacancies were left unfilled in 2012, with particular problems finding certain technical skills. These problems will only

It is vital that we invest in the right people and skills to exploit and further develop the advanced and competitive technologies which are a strength of UK aerospace Mark Stewart, General Manager and Human Resources Director, Airbus

deepen due to the age profile of the sector. It is estimated that over 8,000 people could retire in the aerospace sector over the next eight years but, on current employment trends, only 5,000 youngsters have been recruited to replace them - leaving a 3,000 shortfall. In addition, the skills levels of existing staff are below what is required. Currently 40% of the aerospace sector workforce is qualified to N/SVQ Level 4+ with a target to get this to 50% by 2022. This is going to require a combination of employing more graduates and an increase in the numbers taking higher apprenticeships. The scale of these challenges, coupled with the potential benefits of resolving them, brought together the Aerospace and Defence Sector Strategy group. This is jointly managed by Semta and ADS and supported by the Department for Business Innovation and Skills and the UK Commission for Employment and Skills. The group has produced a plan articulating the priority skills for the aerospace sector, and looking at current workforce development, future skills, images and careers. Mark Stewart, general manager and human resources director at Airbus in the UK, chairs the group and says businesses need to take more ownership of skills.

Workforce and skills

Employer Ownership of Skills

The Employer Ownership of Skills Pilot funding pot is now worth

One programme which can make a real difference is the Employer Ownership of Skills Pilot, a competitive fund open to employers to invest in their current and future workforce in England. “Aerospace is at the cutting edge of technology, but it is also vital we invest in the right people and skills to exploit and further develop this technology so we can deliver results.” he said. “That is why we welcome the growing engagement between business and government on skills generally and in particular the opportunities presented by the Employer Ownership Pilot. We look forward to building on this throughout the year.” (see box). In 2013 the Aerospace and Defence Sector Strategy group will focus on developing and implementing practical solutions to enhance growth and competitiveness - speed and high impact will be of the essence. There will be a concerted effort on collaborating to promote the benefits of investment in training and skills highlighting where there is public money to complement private sector cash.

Supporting supply chains Increasing the number of companies taking on apprentices – with big companies helping make sure smaller companies in the supply chain don’t miss out on high quality applicants - is a key aim. Sharing apprentices between companies to increase the breadth of experience gained during training is another avenue being explored. This has been successfully piloted in Wales. There are also plans to develop an aerospace centre of excellence for learning, skills and employment.

Our industry is doing well but we recognise the need to identify priorities and, in particular, ways of inspiring the next generation of designers, engineers and scientists Joe Greenwell, Chairman, Ford of Britain

mployers are invited to develop proposals that raise skills, create jobs, and drive enterprise and economic growth. Government will invest in projects in which employers are also prepared to commit their own funds in order to make better use of our combined resources. With new money from the Chancellor’s Autumn Statement, the Employer Ownership of Skills Pilot funding pot is now worth a total of £340million and Semta is encouraging businesses and training providers in England to work with them as sector experts to bid for these fund in partnership. Semta is already working with companies who won nearly £70 million in the first round this year to implement innovative skills solutions which will raise skills, create jobs, and drive enterprise and economic growth. Lynn Tomkins, UK operations director said: “Organisations in our sectors typically deliver £20,000 per employee more in Gross Value Added than the overall national average and therefore have a critical role to play in delivering economic recovery. So our role, in ensuring that the right skills are in place, will be a huge factor in the success of engineering and manufacturing in 2013.” For further details on how Semta could support your business or work with you on Employer Ownership, please contact Semta Customer Services on 0845 643 9001 or via email customerservices@semta.org.uk

Automotive A similar exercise is being carried out in the Automotive Industry. Joe Greenwell, chairman, Ford of Britain, now heads up Semta’s Automotive Sector Strategy Group, partnering with Nigel Stein who is leading the Business Environment workstream of the Automotive Council. “Our industry is doing well but we recognise the need to identify priorities and, in particular, ways of inspiring the next generation of designers, engineers and scientists to help rebalance the UK economy and ensure long-term economic success,” says Mr Greenwell. “There is a need for closer, more systemic connection

between business, schools and higher education, especially in engineering and manufacturing,” he continues. “It is so important to ensure youngsters understand companies can help them acquire qualifications – earning as they go. We need to show them these are rewarding, wellpaid careers where aspirations to go higher up an organisation can be met.” Semta’s footprint spans across the 132,000 companies and 1.7 million-strong workforce that make up UK advanced manufacturing and engineering, including Aerospace and Defence, Automotive, Composites, Electrical, Electronics, Marine, Mechanical, and Metals.

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Workforce and skills

Guitar ‘hacking’ with Queen Mary’s College London. “I’m going to make one of these” insisted one boy

TeenTech: Technology commentator and reporter Maggie Philbin, best known for her work on Tomorrow’s World, explains why she launched TeenTech, an education initiative now transforming young people’s perceptions of engineering careers.

know the precise moment I decided to set up TeenTech. In December 2007, I asked a class of 12 year olds at a school in Wokingham if they could name a contemporary engineer, scientist or technologist. The only name they came up with was Einstein. Except for one lad who suggested “Charles Cabbage”.

They weren’t proud of this, but were articulate about the invisibility of role models. “Even footballers do adverts. You never see an engineer on an advert,” said one. Another stated, “It’s fun to go to places like the Science Museum but that doesn’t help us see what engineers actually do every day”. And finally: “When we

It is critical for industry to reach out to young people while they are still at an early stage of their education Don Johnson, Operations Manager, Laleham Healthcare

buy an ipod or an xbox, why isn’t there something on the packaging telling us who made it?” I understood where those students were coming from. It wasn’t until I worked on Tomorrow’s World that I appreciated just how rich and varied engineering careers could be. I left that school determined to make a difference. Not by talking about it. I’d been doing that for over 25 years at conferences and events all over the world and quite frankly, nothing much seemed to have changed. I wanted to do something practical, something that would really help teenagers understand just how many opportunities there are in contemporary engineering and technology if only they had the right skills. I wanted them to see that they could be part of this world, whether or not they wanted to go to University. I especially wanted to debunk the myths that ‘manufacturing is dead’, that engineering was nothing but oily rags and dreary businesses and that a career in tech was only open to you if you were male, white and reclusive.

TeenTech is born We ran the first TeenTech event in Berkshire in 2008, and after winning several national and regional Awards, piloted a UK roll out. This year we’ll run 12 events. At every one, 300 students from 30 different schools spend a day with leading engineers and technologists from global, national and start up companies. It’s fun, hands-on and really does change preconceptions. It’s also industry-led and collaborative – the organisations who contribute become part of TeenTech. We measure the immediate effect with voting buttons and it’s apparent that connecting with a broad sweep of different industries helps young people see the variety and excitement.

Workforce and skills

Here are the results from the beginning and end of a TeenTech day in Berkshire.

How interested are you to become an engineer? Not at all Don’t know enough about it Fairly Very 9.45am

Who does TeenTech work with? We work with every size of organisation from global companies like Samsung, Sony, Google, Atkins, Airbus, and Cummins to leading Universities and FE colleges to the tiniest start–up. We encourage all to bring engaging, ambitious and often unexpected activities. For instance, we work with Chas A Blatchford & Sons, a small precision engineering company which makes artificial limbs. In 2012, they brought along an athlete and the students fitted his leg. They were also able to experience what it’s like to use an artificial limb. GE brought along a 4D scanner to follow the journey of a fizzy drink through a teacher’s body. it was eye-opening for students and their teachers to see the amount of engineering and physics behind medicine. Queen Mary’s College London run an activity where students ‘hack’ musical instruments. I watched one boy stare into the gubbins of an electric guitar for so long I thought something was wrong . He looked up and said, “I’m going to build one of these”. TeenTech events are carefully planned and scheduled. Students move around the

2.20pm

opinion it is critical for industry to reach out to young people while they are still at an early stage of their education,” he says. “The main reason is to engage and expose them to the real world of manufacturing whilst they are still undecided about their potential career path.” Laleham invested time mocking up a mini production line, recreating all the stages of the manufacturing process, so students could experience firsthand the challenges and requirements they would face in a real manufacturing environment. It was an educational but thoroughly enjoyable experience cited by many teenagers as a real highlight of the day.

Influencing teachers event, spending set time with real people working with some incredible technologies. Virtual Education Experience, which is owned and sponsored by two engineering technology businesses, has been working with TeenTech for four years. Director, Mike Maddock says “The TeenTech model is unique. It manages and facilitates the students and teachers from the minute they walk through the door.”

Taking ownership It’s all too easy to think that someone else should be responsible for all this. The government perhaps. But there’s an urgent need for all of us to work together now if we want young people and their teachers and parents to really understand the skills needed for the jobs of the future. In 2012, the Duke of York recognised the hard work of all our company volunteers and became patron of TeenTech. Laleham Healthcare have a factory in Alton, Hampshire with 17,000m² spanning production lines, manufacturing, materials and line feed warehousing. They worked with TeenTech for the first time in 2012, and operations manager, Don Johnson explains why. “In my

Young people need to be inspired about their own potential and shown different routes to success. Teachers may have heard about Rolls-Royce apprenticeships but they may be less aware of those run by BT, Airbus or Cisco. Students may be keen to learn how to design games but who’s advising them about the best courses to lead them into the industry? Feedback from schools has been impressive with 100% saying they will definitely attend another TeenTech event. Teachers have told us they have torn up lesson plans as a result of attending the event. One teacher who can to a TeenTech event in October 2012 said: “What a fantastic day we all had at TeenTech. I was amazed at how the activities and challenges brought out the personalities of my students, and the level of questioning which drew out some excellent answers from them. It was a truly enriching experience for them – and me – which will remain with them for a long time. It has promoted a real sense of wanting to do more, and achieve greater success in the future.” All credit to the brilliant companies who support us. But we need more. Be part of this.

f o e e y o l Empmonth the ry 2013 a Febru

Charlotte Frisby Trainee designer, David Nieper While many manufacturing sectors are perceived as male dominated, others, like fashion and textile manufacturing, have a distinctly female profile. Ahead of International Women’s Day on March 8 TM talks to one of Made in GB’s ‘30 Under 30’ manufacturing champions about her work and the diversity of roles available in a variety of manufacturing sectors. What is your role and what are the main responsibilities? I am a trainee designer at David Nieper, a UK-based manufacturer of lingerie, knitwear and clothing for women. I help design the company’s nightwear range. My main role within the design room is to work to the current designing season and produce a nightwear range that appeals to professional women. As well as design, I also help analyse buying trends, source and order fabrics and trims, and help out on photography shoots.

CV in brief: Charlotte Frisby Age: 25

Employment:

David Nieper – started as a paid intern after winning a national fashion design competition and six months paid internship with David Nieper. Now a full-time trainee designer in the company’s nightwear division.

Education:

BA (Hons) Fashion Studies, Level 3 Foundation Diploma in Art & Design

What personal characteristics help you in your role? My colleagues say that I am polite, patient and friendly. We all work closely as David Nieper is a family firm with 230 staff, so these characteristics really help. What are the most rewarding parts of your job? Analysing the sales figures of the garments I have designed is fascinating. It’s a great feeling to know that I have managed to understand the customer and produce something she wants. What do you consider to be your biggest personal success at the company so far? Just how much I’ve learnt so far. I’m in a role that I really enjoy with lots of responsibility and variety. The fashion industry is very competitive, so I’m really happy to be employed in such a key design role and in a company that designs and manufactures everything in the UK. What first attracted you to a career in manufacturing? I wanted a role in the fashion manufacturing industry so that I could design wearable garments. Although it’s the design side that I find the most enjoyable, it is

Have your say at www.themanufacturer.com

interesting to see what else is involved in achieving a successful range and to work alongside people in different jobs, including seamstresses and pattern cutters. Many of them have decades of experience and have helped develop my skills. How do you think best to get more young people interested in manufacturing? The best way to get young people interested in manufacturing is for companies to open their doors so that young people can get hands-on experience. At David Nieper we run design competitions for local school children to help them get interested in careers in fashion and manufacturing at a really early age, and more than a 100 pupils visited the factory and design workshops earlier this year. In every industry, there is a range of jobs that need to be done to create and deliver the end product, and each job is as important as the next. When people visit, they are always amazed by the range of job opportunities, from design, manufacture, customer services, photography, graphics and even all the mailing done right here in Derbyshire. Do you think it is important to address gender balance in the UK’s manufacturing industry? Although the manufacturing industry may be perceived as a male dominated arena, fashion is seen as more of a women’s industry. However, after working in the industry I know that it is mixed. Here, there are lots of job roles filled by both males and females. No one should be put off entering an industry because it is perceived as either male or female dominated.If you have the skills to do a job to a high standard, gender shouldn’t matter.

Part-time post grad

The part-time post grad

The first of a series of peaks into the motivations and experiences of part time industrial post graduate students.

y name is Alex Cosgrove. I am 48 years of age, I have been working in the food manufacturing industry for 29 years, since the tender age of 19. My manufacturing career has taken me from Dairy Crest (cheese) to Müller (yoghurt and desserts) to Weetabix (breakfast cereals and bars). My role has grown from a team member to factory management to my current role as head of performance improvement for Weetabix operations. I have been lucky that all three of my employers have invested in my training in both technical and leadership capability skills. However, it was not until 2010 that I decided after much encouragement from my line manager to do a masters degree. I chose Cranfield because of the reputation and I was keen to do a specialist degree, which would

The library on campus at Cranfield University

underpin my experience, I found the Operations Excellence MSc at Cranfield. The real challenge for me was, firstly, to get over the shock of being back in the class room with some of my fellow cohort being half my age, but more importantly, to make sure I used the learning’s from the modules in my day to day work. By doing this you add value in both directions, taking a more scientific approach to your work and generating ideas and results to take back to the course. Along with the taught modules there were two other significant pieces of work which I completed for the MSc: a group project and a thesis. I saw both pieces of work as opportunities to add value to my employer and help with the balance between study and work. The group project gave Weetabix the benefit of having

three other members of my cohort working on an improvement project. It also gave those cohort members the chance to work on improvement outside of their own organisations. The project was to improve the overall efficiency of the combined heat and power plant (CHP) at our Burton Latimer facility. It was very successful, making some important changes to the control philosophy and mechanical design. The term winwin is used too often, but this project did just that. The CHP has two internal combustion engines that generate 6MW of the 8MW of electricity required to run the site in full operation. The waste heat exhausted from these engines is recovered and used for the creation of steam within the boiler system. The project started to look at the control of the CHP plant, focusing on heat and recovery ensuring that all the engine heat was being recovered. Alarmingly the team discovered up to 33% of the 450°C engine heat was being lost to atmosphere. A complete new control system has been designed with the OEM and installed, ensuring that all the engine heat is now recovered. The thesis, as an individual project, was a very different experience but equally worthwhile. I used the study as an opportunity to enhance my understanding of Weetabix’s world class operations programme, Performance Through People. My thesis investigated the reasons why change initiatives fail – a topic which I found to be glossed over in a lot of change management literature. Texts tend to focus on how to achieve change successfully but give little time to analysing failure. Completing the thesis helped me understand the risks in change projects and indentify those relevant to Weetabix. A mitigation process is now in place for these. I found the MSc process rewarding personally and for my company. Applying the learning’s at work is the key to striking the balance between study and the day to day. The relationships and the networks formed with the other cohort members, and the Cranfield lecturers, were a hidden bonus. Overall it was a great experience which I should have done 20 years earlier.

Have your say at www.themanufacturer.com

Delivering the data-driven business

Data – from within the business, and outside it – has never been more richly available. But how best to exploit it? Malcolm Wheatley finds out.

aced with falling sales of its flagship tissue and toilet roll products, consumer giant Kimberly-Clark engaged price optimisation and margin improvement specialist PROS to provide pricing guidance to its sales organisation. Pulling in data from a wide variety of sources, the plan is that PROS’ analytics software will deliver an improvement in selling prices, and thereby help stem a decline in revenues. “It’s about taking millions of transactions from multiple

data feeds, in order to get the greatest insight into how much customers are prepared to pay,” says Rob Glenn, PROS’ European general manager. “Look around at companies, and shockingly, a lot of price decisions turn out to be based on out-of-date spreadsheets, rather than real-time data and transactional history.” Meanwhile, at the Todmorden, Yorkshire plant of centrifugal slurry pump manufacturer Weir Minerals, the factory’s machine shop has seen an increase in OEE from 38% to 81%, thanks to

the real-time provision of factoryfloor data to OEE continuous improvement teams, via Forcam’s ‘Factory Framework’ ethernet-based MES platform. And at Cheerios manufacturer General Mills, employees in over a hundred countries worldwide are helped to share common goals and a common General Mills culture via a Twitter- and Facebook-like social computing platform that helps employees collaborate, streamline innovation, and bridge the communication gaps across geographic and functional silos.

IT in

manufacturing

The common link between all three? Much of the raw data that is involved is quite apart from, and conceptually quite different from, the data that a company typically holds in its ERP system. In short, as the tentacles of a manufacturer’s enterprise systems reach outwards from the cosy environment of the office, where ERP holds sway, and moves to embrace mobile devices, equipment on the factory floor, social networks, and – say – sales data held on customers’ point-of-sale systems, the ERP-centric view of the world becomes less relevant. What’s happening, says Mike Evans, director of research at analysts Cambashi, is that a sea change is underway in both the art of the possible, and the amount and type of data that enterprises must deal with. And it’s data that finds no ready home within the typical ERP system. How so? Because it is not the transaction-centric data that is the lifeblood of ERP systems. Instead it is event-centric, people-centric, device-centric or location centric – to name but a few of the possibilities.

Changing times “There’s a 15-year secular shift underway,” says Evans. “You can now give an IP address to a whole range of devices that you couldn’t do before. Either because it wasn’t possible, or because it simply didn’t make sense.” Take, for instance, the factory floor, where new and low-cost networking technologies – think

Getting data from the factory floor – and elsewhere in the enterprise – has never been easier: the trick is to be able to analyse and leverage that data, in order to deliver real business value. You have to start with a goal in mind, and an improvement that you want to make Mark Carleton, Service Director, Mestec IEEE 802.11 and Zigbee wireless mesh networks – are re-writing the economics of factory-floor integration. Or the increasing role played by Bluetooth, and other so-called ‘machine-to-machine’ (M2M) technologies. And away from the four walls of the enterprise, think about the data captured by mobile devices such as tablets or ruggedised laptops, or the GPSequipped and sensor-equipped

There’s a 15-year secular shift underway. You can now give an IP address to a whole range of devices that you couldn’t do before. Either because it wasn’t possible, or because it simply didn’t make sense Mike Evans, Director of research, Cambashi

RFID tags that increasingly accompany shipments. Or consider the routes taken by delivery vehicles, as well as pallets of goods, which can be captured and analysed with the sort of location and dwell time analytics solutions pioneered by technology providers such as Esri and Geoloqi. “The ERP view of the world is being replaced by one of industry networks,” says Evans. “It’s about collecting data from a wide variety of data sources – in the factory, or out in the field, or from social networks and supply chains. And there are a whole host of small, niche companies springing up to help businesses make use of it.” One such is Forcam, albeit with SAP co-founder Dietmar Hopp as a 17% shareholder. “Data on the factory floor is real-time, and event-driven,”

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IT in

manufacturing

says Forcam’s founder and chief executive Franz Gruber. “ERP systems are transaction based, and can’t handle eventdriven data.” But it is through analysing that event-driven data that improvements in productivity metrics such as OEE are delivered, he points out. Already in use by manufacturers such as Daimler, Audi, BMW, and Borg Warner, Forcam’s Factory Framework software has been credited by Audi with delivering a 20% increase in productivity in the company’s capital-intensive press plants. Microsoft Gold partner NewsGator, another niche firm, builds systems to help manufacturers such as General Mills, Merck and Kraft Foods to harness data from social networks and other non-ERP data environments. The goal: to help people share businesscritical data more easily, in order to deliver better decisions. “Manufacturers can form dedicated ‘communities’ around specific projects and products, capturing people’s interaction at a very detailed level – at every stage from ideation to manufacturing engineering collaboration,” says NewsGator chief executive Daniel Kraft. “In contrast to the limited circulation of e-mails, social computing provides a virtual ‘room’ in which all the relevant people sit – even if widely separated by geography or function.”

Value for money But the fact that data from widely divergent sources is now more readily available than ever does not of itself deliver an ROI, warns Jonathan Orme, sales operations and marketing manager at specialist ERP provider Exel Computer Systems. “Yes, manufacturers can gather more and more data from more and more places. But the question remains as to how that data is to be used,” he

Manufacturers can gather more and more data from more and more places. But the question remains as to how that data is to be used. You need to be able to say: we have created extra capacity in order to produce more orders, or we have raised revenues or increased margins, or brought higher-quality products to market faster Jonathan Orme, Sales Operations and Marketing Manager, Exel Computer Systems points out. “It needs to be able to be used in a joined-up way, targeted on real-world benefits. You need to be able to say: we have created extra capacity in order to produce more orders, or we have raised revenues or increased margins, or brought higher-quality products to market faster.” Mark Carleton, service director at manufacturing intelligence and factory-floor productivity improvement specialist Mestec, agrees. “Getting data from the factory floor – and elsewhere in the enterprise – has never been easier: the trick is to be able to analyse and leverage that data, in order to deliver real business value,” he stresses. “We’ve clients who have generated

significant value, but you have to start with a goal in mind, and an improvement that you want to make.” Back at analyst firm Cambashi, director of research Mike Evans concurs. It’s a brave new world, he agrees, but that doesn’t mean that manufacturers should rush out and invest in brave new systems and pieces of IT infrastructure. “It’s really all about doing the classic MBA-style analysis, and figuring out what it means for the business. Do that first, and before spending any money at all,” he advises. “And whatever the outcome, remember that it’s a business initiative, with a looked-for return, that you’re investing in – not a piece of software.”

Have your say at www.themanufacturer.com

Square hole square peg ERP, CRM – or something else? Sometimes, the answer isn’t obvious, discovers Malcolm Wheatley.

ack in late 2010, Leeds-based Audio-Technica realised that its IT systems were acting as a barrier to growth. The European arm of Japanese audio equipment manufacturer Audio-Technica Corporation supplies a network of 500 or so dealers across the UK and also acts as a central inventory holding for Audio-Technica’s entire European operations.

“From a strategic perspective, we wanted to make Customer Relationship Management (CRM) central to everything that we do, in order to differentiate us in the market,” explains managing director Adrian Rooke. “Being able to deliver a sustainable high-quality service would help to change the conversation with customers from a price-based discussion to one that revolves around the total package that we offer.” The problem? Its standalone legacy contact management system and third-tier distributioncentric business system were both failing to deliver the functionality to achieve this. “Not only did our core business system need upgrading to a full ERP system, but it also needed to be integrated with a true CRM system,” says Rooke. But which CRM system? And which ERP system? The choice was complicated by some peculiarities of Audio-Technica’s business. For instance, while not a traditional manufacturer, the business was certainly more than just a distributor. “It’s ‘assemble-to-order’, rather than true manufacturing – but with an extended supply chain stretching back to Japan,” explains Rooke. Routinely, for instance, products are repackaged, combined together with other products to be sold as bundled sets and shipped with localisation options peculiar to particular markets. Likewise, from a CRM point of view, Rooke was keen to retain a critical piece of functionality contained within the existing contact management system, which provided sales representatives with an off-line copy of the CRM database. This enabled them to consult it while on the road, and prepare post-visit reports shortly after leaving a customer’s premises. The search for alternative solutions soon brought Audio-Technica in contact with specialist Microsoft Dynamics solutions provider eBECS, the UK’s Microsoft Dynamics Reseller of the Year 2012. eBECS, he relates, played a critical role in helping Audio-Technica to understand what Microsoft Dynamics AX and CRM could deliver and also how best to deploy and utilise them for maximum benefit.

eBECS started with what we wanted to achieve, and how we wanted to achieve it, not with some preordained view of what we should do, and how we should do it. The result is a solution that’s totally ‘ours’ Adrian Rooke, Managing Director, Audio-Technica

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manufacturing

“It was quickly clear that the combination of Microsoft Dynamics CRM and Microsoft Dynamics AX would give us a powerful and integrated solution,” says Rooke. But, he insists, Audio-Technica wasn’t shoehorned into the Dynamics solutions, and indeed surveyed the market broadly. “eBECS started with what we wanted to achieve, and how we wanted to achieve it, not with some preordained view of what we should do, and how we should do it,” he says. “The result is a solution that’s totally ‘ours’, and which meets our requirements.”

Business as usual Talk to eBECS’ managing director Kevin Hall, and such sentiments aren’t new. eBECS, prides itself on its customer-centric approach to system selection. What’s more, he emphasises, eBECS strives to be open and straightforward in recommending what is best for the customer – even when the customer knocks on the door asking for a different solution. It’s an approach, he notes, that is particularly apposite when it comes to the distinction between ERP and CRM. “Sometimes, the customer might think that they want ERP, or an extension to ERP,” he says. “But really, the answer might be CRM, or perhaps Business Intelligence. We always start by looking at the customer’s underlying requirements and recommend what’s appropriate. The answer isn’t always ERP.” Redditch based lighting manufacturer Thorlux Lighting, a division of the F.W. Thorpe PLC group, is a case in point. A specialist manufacturer and supplier of commercial and industrial lighting, Thorlux provides a comprehensive range of professional lighting and control systems. A team of around twenty engineers provides post sales support, commissioning and fine tuning customers’ lighting installations.

Whenever we look at identifying a solution for a client, we always start with the end point in mind—which ultimately, is our customers’ success Kevin Hall, Managing Director, eBECS

But with a rapid growth in post sales support activity had come a lack of visibility into the day to day activities of engineers, says technical services manager Paul Moisy. Were chargeable site visits being invoiced? Could site visits be better scheduled? Were site engineers fully equipped to solve issues on these visits? “How many site visits were we making each year? To which customers? How many of those visits involved rectification – and at what cost to the business? Questions like these were extremely difficult to answer: we just didn’t have the information,” relates Moisy. A two year search eventually led Thorlux to Microsoft Gold Business Partner eBECS. “From a solution provider perspective, eBECS combined a strong pedigree in manufacturing with a strong history of working with Dynamics CRM,” says Moisy. “The more we talked to them, the more we felt that they understood what we were trying to achieve.” The eventual solution? Microsoft Dynamics CRM, implemented at the end of 2011. “We ended up getting a lot more than what we expected,” sums up Moisy. “We are able to target areas for improvement very quickly, and pinpoint how we can better serve our customers. Also, the information that becomes visible can now be fed back into our sales and manufacturing processes.”

Thinking outside the box It would be a mistake to imagine that CRM – despite its name – only impacts a company’s relationship with its customers, stresses eBECS’ Hall. At fast-growing eBECS customer Mainstream Renewable Power, which designs, develops, and operates renewable power installations around the world, Microsoft Dynamics CRM is in use helping the business to manage relationships with a whole host of third parties.

“In fact, the number of actual customers is quite small - it’s basically those companies which buy a completed renewable energy installation from us, when it has been built and commissioned,” explains Mainstream CIO John Shaw. “But the challenge of stakeholder relationship management is very real. In such a highly regulated industry, it’s vital to deliver CRM comprehensively.” Partners, regulators, landowners, and utilities, certainly. But also a host of other interested parties, ranging from fisheries authorities through to shipping and defence interests, each of which must be consulted about the presence of an offshore wind farm in busy coastal waters. Inevitably, too, Mainstream makes extensive use of subcontractors and third party specialists. Relationships with these also fall under the remit of CRM, with Microsoft SharePoint deployed as a collaboration and document management tool, helping to record interactions with stakeholders. “Although we use 33 Microsoft products, the core pillars are Microsoft Dynamics AX, Dynamics CRM, and SharePoint,” says Shaw. “Microsoft technology underpins everything we do – from project management through to procurement, and from stakeholder relationships through to paying the bills.” The role played by eBECS has been critical, he adds: “eBECS fully understood what we needed to do, and have played a leading role in enabling our business growth.” Back at eBECS, managing director Kevin Hall is gratified by these endorsements, but not surprised. “Whenever we look at identifying a solution for a client, we always start with the end point in mind – which ultimately, is our customers’ success,” he sums up. “As with every business, eBECS is owned by its shareholders. And we only sleep well at night if our customers are getting what they want.”

Projects special interest group. Delegates highlighted the value they derived from these discussion sessions and dialogue is now ongoing

W excellence Converging on

A brand-new user group, impressive briefings, and lively networking made eBECS’ Customer Convergence 2012 an event to remember, discovers Malcolm Wheatley.

Feedback from Customer Convergence 2012 Delegate comment: “I wanted to thank you for an excellent two days: the organisation and flow was seamless...really professional. It’s good to see that eBECS hasn’t lost that friendly, personal touch – and Richard Noble was a joy to listen to!” Steve Morrow, director of Microsoft’s Dynamics Division: “Congratulations for a great event, brilliantly executed. You deserve to reap the rewards of all the hard work that I know went into organising it. All of the customers I spoke to were unequivocally happy with the session content, and had been talking to other customers and feeling part of a much bigger community.”

hat do you get when you put together cutting-edge content, a crowd of enthusiastic delegates, knowledgeable speakers, and a newly-formed user group? The answer: eBECS Customer Convergence 2012, a two-day event specifically for users of Microsoft Dynamics AX and CRM, organised by Dynamics AX and CRM implementation experts eBECS, and held at The Belfry hotel in late November. Beginning with a working lunch in The Belfry’s famous Atrium Restaurant, the event brought together over 200 eBECS customers and prospects, ten partners, and experts from Microsoft and eBECS with exclusive briefings on such topics as Microsoft’s technology roadmap, the future for AX and CRM, the eBECS Private Cloud, and the impact of Windows 8. The plan: launch the eBECS User Group for Microsoft Dynamics, provide ‘special interest’ focus groups for customers to share experiences and insights, supplemented by ‘deep dive’ training and knowledge transfer sessions – and then launch into a series of conference sessions, demonstrations and briefings, going through until the early evening of the following day. “The idea was to put together a combination of ‘high level’ keynote presentations from people such as Dave Coplin, Microsoft’s chief envisioning officer, and Steve Morrow, director of Microsoft’s

Keep it simple, build a highly motivated team, and never give up

Event Review

Dynamics Division – and then intersperse these with detailed training and demonstration sessions in order to help people to get more out of their investments in Microsoft Dynamics AX and CRM,” says Kevin Hall, eBECS’ managing director. Setting the scene were two thought-provoking presentations, one from eBECS customer and paving manufacturer Marshalls, and one from entrepreneur Richard Noble, holder of the world land speed record for 14 years. These days, of course, Mr Noble is in the headlines because of his role in another land speed record attempt: Bloodhound SSC, which aims to pass the 1,000mph mark sometime in 2013. Mr Noble’s message was one that was honed by years of pushing the envelope in a series of highprofile business ventures and speed records: keep it simple, build a highly motivated team, and never give up. All of which, of course, were sage words of advice for an audience of IT professionals with an interest in ERP, and in leveraging IT in the pursuit of business excellence.

Inside track Not that the highly motivated team at Marshalls ever thought about giving up, stressed the company’s group IS director, Paul Thomas, as he related how the company had worked with eBECS to replace a highly complex IT environment, characterised by multiple instances of legacy ERP systems from Baan, Sage, Opera and ManMan, with a single version of the truth: Microsoft Dynamics AX. And even when hit by a massive power failure at the very point of the ‘live’ switch over, he added, built-in resilience and careful planning carried the day, delivering a group-wide, multi-site implementation of Microsoft Dynamics AX across divergent business models. But popular though these presentations were – one delegate, a long-standing eBECS customer, called them “truly inspirational” – the real meat lay in a combination of customer-tocustomer and prospect-to-customer networking, coupled with over twenty detailed knowledgesharing presentations and training sessions that addressed almost every Dynamics AX and CRM topic of interest. And sometimes the learning was two-sided, notes eBECS’ Kevin Hall. “We’d always intended to run a session on Dynamics’ Management Reporter 2012, a tool for generating flexible and interactive financial reports,” he says. “But we hadn’t realised how many delegates felt that they didn’t really know enough about it, and were keen to find out more. As a result, we’re organising a follow-up training session, specifically covering Management Reporter in a lot more depth than we could deliver at Customer Convergence 2012.” Partner sessions at the conference were well-attended too, with a range of extensions

Answering the call The idea of an eBECS user group had been around for a while, says eBECS’ managing director Kevin Hall.

“E

very time we spoke to our customers, they told us that some of the most useful interactions that they’d had was with other eBECS customers,” he explains. “Creating a user group in order to make such interaction even easier seemed to be a logical step forward.” Established at eBECS Customer Convergence 2012, the worth of the user group was quickly confirmed in delegate feedback which highlighted its value. “Time and again,” notes Hall, “customers commented on the tremendous gains they saw in the opportunity to discuss issues of mutual interest in the various topic-specific ‘breakout’ sessions.” User group dialogue now continues on an ongoing basis through Microsoft’s enterprise-based social networking tool Yammer – a virtual forum where customers can ask questions, post opinions and news, and solicit responses from other customers. eBECS, too, is participating and learning. “It’s a ‘win-win’ situation,” Hall sums up. “Our customers gain from shared dialogue with each other, and we gain from greater insights into what we’re doing well, and what we can improve. Everybody gains.” and complementary solutions explained and demonstrated, with vendors such as Bottomline, Insite-Europe, WCL and Zap Technologies highlighting opportunities across a wide range of business areas. If you were there you’ll know already that eBECS Customer Convergence 2012 was a resounding success, well-executed, and packed with useful takeaways. If you weren’t there – why not join in next year or find out more about eBECS offerings at ’s unique event for ERP prospects and users, ERP Connect.

eBECS is among many leading ERP vendors to sponsor ’s ERP Connect 2013 event in the Midlands on March 20. Attend to fast track your ERP solution selection and understand implementation and optimisation challenges for ERP users. For more info go to: www.erpconnect.co.uk or contact Benn Walsh on: 0207 401 6033 or: b.walsh@sayonemedia.com

IBM’s manufacturing site in Massachusetts has achieved 16% energy savings every year since implementing its building management system.

Buildings with brains Investing in building management technology is a smart choice finds Tom Moore.

“T

he measure of intelligence is the ability to change,” said Albert Einstein. With energy prices a major problem for manufacturers and energy usage a problem for the world, it seems that changing the way we make things would be an intelligent option. Simon Parsons, practice leader at IBM Smarter Buildings, explains that better building management can cut a surprising

amount of energy, even for high energy business like manufacturers. People forget that IT companies like IBM, with its foundations in hardware, are manufacturers themselves so are in a unique position to excel in using data to cut costs inside a factory. But event IBM has been surprised by the scope of possible savings through building management, admits Mr Parsons.

Its site in Rochester, Massachusetts, which is the size of a small town and combines offices, software labs and manufacturing, predicted that a new analytical package would only be able to achieve 0.5% worth of energy savings. The site had eaten up all the clichéd low hanging fruit and replaced inefficient machines with the energy-friendly. But on top of these efficiencies, the site has achieved a 16% energy reduction every year since introducing a building management system that looks at improving factories and offices like six sigma does for production lines.

A tortoise is only as strong as its shell Parsons says that IBM’s “people on site were sceptical,” but that changed when the energy bills started coming in. Parsons is now leading IBM’s Smarter Buildings project around the UK, selling his magic formula to manufacturers and even the Ministry of Defence, one of the UK’s biggest land owners. Its consultancy oversees heating, cooling, lighting and insulation to optimise the performance of a building to cut energy bills and extend the life of equipment within it. “The reason that equipment uses more energy than it needs to is because something is wrong with

IT in

manufacturing

Simon Parsons, practice leader at IBM Smarter Buildings describes smart building management trends in the manufacturing sector

The way that factories are operated goes out of kilter... You typically find a 10 per cent to 20 per cent drift each year Simon Parsons, Practice Leader, IBM Smarter Buildings

the set up, it’s either on at the wrong time or set to the wrong speed,” says Parsons. “Over time,” he explains. “The way that factories are operated goes out of kilter because things change on the ground. The facility is used in a different way so you typically find a 10 per cent to 20 per cent drift each year.” Parsons continues: “Systems and programming don’t always keep up with changes. Equipment firing up at the wrong time is now a ‘fire moment’, and one which needs to be put out so that costs don’t escalate while you’re not looking.” More and more manufacturers will fit the equivalent of fire alarms so that sudden rises in energy use are detected and corrected he asserts.

Get some backbone Carbon emissions from buildings, such as those from air conditioning and lighting, account for 45% of the UK’s carbon footprint, burning a hole in both pockets and the O-zone layer. IBM experienced a 50% reduction in maintenance hours from managing its buildings in a better way, monitoring programmes on machines and replacing inefficient machines, as a knock-on effect. Technology is the backbone of society and realtime energy

e’re seeing a number of trends in building design and construction of facilities used by a range of industries, with manufacturing operations set to become increasingly ‘smart’ over the coming years. There is a demand for more granular information and reporting on topics such as energy, water and waste. Drivers are both internal, for example as energy costs rise inexorably, and external, such as regulatory carbon reporting. Organisations thus have more and more data available on how their facilities are operated and performing. The more forward-thinking are making a virtue of this necessity by actively seeking ways to exploit it. At one level, this can mean monitoring energy use on a realtime basis. This offers the possibility of identifying operational anomalies – which can lead to excessive energy use and avoidable maintenance activities – on the basis of leading indicators, rather than at the end of a month or quarter when unexpectedly high costs have already been incurred. Such techniques are increasingly being used either for buildings or the equipment being operated within them, but rarely considering both as a single entity with complex internal interactions. Detailed and consistent asset management data across a portfolio of manufacturing facilities can provide valuable insights into the root causes of operational performance levels. This mass of data offers the ability to apply predictive analytic techniques around such factors as operational efficiency, maintenance team productivity, energy use, critical equipment failure and thus operational downtime These insights can in turn contribute to a more holistic approach to planning a new manufacturing facility. Product Lifecycle Management (PLM) has been around for years – the equivalent for buildings is Building Information Modelling (BIM). In the world of construction, an increasing amount of operational modelling takes place during the design stage. BIM techniques offer a virtual, as maintained, record of the building configuration, including detailed performance and maintenance specifications. This raises the prospect of more active management of the whole building and the production equipment within it as PLM and BIM techniques merge within a manufacturing environment. A key part of such holistic asset management will be an information strategy for the manufacturing plant, planning what information will be required, to what end, how it will be captured and exploited for both immediate and future needs and looking forward to the future across the whole life-cycle of the building. So, there you have it – a number of emerging trends for “smarter buildings” in manufacturing. It will be interesting to see how many of these become accepted as the normal way to operate over the coming years! monitoring with a view to raising alerts when things are going awry is a way to exploit the wealth of data that manufacturers now have at their fingertips. Higher than expected energy costs, potentially

damaging cash flow and putting projects on hold at small companies, can be avoided by checking energy usage, or better still, getting a computer to do it for you. @thomasmoore88

LiP

Lean Immersion Programme 6th March – 7th March, 2013 Host site: Accolade Wines, Bristol Sponsored by:

Jim Boughton Head of Global Complexity Reduction GlaxoSmithKline Consumer Healthcare

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UK WCM Operations Manager Molson Coors Brewing Company

• Creating a lean culture and sustaining it • Total Productive Maintenance

Founder Vanguard Consulting

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• Reducing complexity to accelerate improvement

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John Seddon

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Tom Wedgwood Director Newton Europe

• Systems Thinking • Practical Gemba and facilitated workshop

Gil Woodward Lean Enterprise Manager Accolade Wines

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Host site Accolade Wines is regarded as a high performing lean plant, winning the Leadership & Strategy Award 2012 and second overall in the Manufacturer of the Year 2012.

For more information visit www.leanmj.com/lip or telephone Benn Walsh on 0207 202 7485

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manufacturing

How do you like your

‘go live’? Do you back ‘big bang’ IT implementations or do you favour the phased approach? John Donagher, senior IS consultant at BSM Consulting, a specialist in ERP implementations, explains what each approach will mean to a business and how to decide which will fit you best.

he phrases ‘big bang’ and ‘phased’ are used to describe strategies for introducing new systems into an organisation. A ‘big bang’ ERP implementation is typically used to describe a go-live or cutover scenario where a business switches from their old ERP system to their new system at a single point in time. In contrast, a ‘phased’ approach describes a scenario where elements or modules of the ERP system are introduced in a planned sequence, replacing the old systems gradually. Many factors need to be considered when deciding on a go-live strategy. For example: Does the implementation cover a single site or multiple sites? A big bang implementation on a single site is considerably easier to manage than a simultaneous big bang across multiple sites. However interdependencies between sites could dictate that a phased approach isn’t viable. Does the implementation cover a single business or multiple businesses? If multiple business units are involved then it might make sense to phase the implementation by trading company or business unit.

Big Bang: “Will we ever be ready to start?”

Phased: “Will we ever be ready to end?”

If a phased approach is adopted, what will this mean for integration between the new system and legacy systems during the interim period? This is potentially one of the most problematic areas for phased implementations. If you introduce the new system in a piecemeal fashion then you have to work out how the new system and old systems will work together for a period of time. This can involve creating interfaces that wouldn’t be needed if all modules were introduced at once, as well as creating user documentation and SOPs that cover how business processes operate in the interim period. Are there any other competing business activities that need to be taken into account? Factors such as regulatory compliance, acquisitions, new product introductions and other capital expenditure programs can influence the required timescale for an ERP implementation. What level of risk is acceptable? The generally held view is that big bang implementations have an inherently higher level of risk. This is because the integrated nature of ERP systems means that a failure in one part of the system can have knock-on effects elsewhere. The scope of a big bang implementation can also mean that full end-toend system testing is difficult to achieve, and it’s only when the system goes live that all of the

interdependencies are fully tested. Which costs more – big bang or phased? Phased implementations typically take longer to fully complete; this generally means more time from both the ERP vendor and the project team and therefore increased costs. The additional time and cost has to be balanced against some of the main arguments used against the big bang approach, such as the ability of the business to cope with a huge level of change happening all at once as well as the increased risk of failure. Both big bang and phased implementations approaches have their advantages and disadvantages. However it’s important to point out that an implementation strategy doesn’t have to be limited to these two options. Sometimes a big bang approach can be used to implement ‘must have’ functionality within the core ERP modules, followed up with a phased implementation of ‘nice to have’ functionality and the implementation of non-core modules such as document management, business intelligence and maintenance management. If you need to know more about your ERP implementation options, or are seeking to optimise an existing system, look out for information on TM’s event ERP Connect, March 20, Midlands www.erpconect.co.uk

ITnews... IT eye Cambashi’s Dan Roberts considers the reality of real-time manufacturing planning SAP’s annual financial results for 2012 showed record revenue and strong growth in a number of its key segments. So it seems strange that executive chairman and founder Hasso Plattner stated at the launch of SAP’s new product, Business Suite on HANA that “if SAP cannot do this then SAP, sooner or later, will vanish.” The launch was more than just the usual release. For a start, it was made simultaneously in Frankfurt, New York and Palo Alto. It’s SAP’s biggest update to core ERP solutions for years. It is what SAP believes will enhance its ERP market position in the face of competition from the likes of Oracle and the wellpublicised cloud vendors. SAP has made a big deal about HANA over the last year or so and the giant is banking on customers wanting to multiply the benefits demonstrated when its Business Warehouse on HANA made analytics much faster - processes that used to take hours could now run in seconds. Business Suite on HANA takes this speed right through the ERP solution. Traditional overnight batch processes are replaced by real-time insights. Take the example of a manufacturing planner. Typically, planners use data from their overnight MRP runs. They understand that changes in orders or unscheduled machine downtime will alter the plan and use their experience to take that into account. Alternatively, they run an additional MRP batch and wait a few hours. With HANA, that MRP forecast should take seconds, allowing planning on near real-time data. For engineer-to-order companies, it would become possible to schedule production of customised products during the sales cycle, making it much easier for sales staff to promise delivery dates that can actually be met. There are plenty of other batch processes run in manufacturing companies that could receive similar speed boosts. New use scenarios become possible, where resources are optimised across multiple sites, or even amongst supply chain partners. This supply network optimisation would require a new level of integration and robust partnership agreements, but HANA takes us one step closer to fulfilling that goal. @Cambashi

VISUAL FACTORY

Pump manufacturer optimises workflow with visual manufacturing software Pump manufacturer Whale, based in Northern Ireland, gained new efficiencies with the implementation of Visual Factory.net software and touchscreen displays from Open Business Solutions. The new paperless technology enhances the pump manufacturer’s Infor XA ERP system by providing up to date, accurate onscreen instructions to operatives on the factory floor. The web based software provides full maintenance and control of operating procedures and work instructions. In addition, by allowing instant component changes and easier introduction of new products, it simplifies the set up of new procedures and instructions. The work of manufacturing engineers is also made easier, as it is possible to replicate assembly instructions and components from similar products rather than starting a new procedure and work instruction from scratch. Visual Factory.net imports engineering data directly from ERP systems to create comprehensive work instructions, much more detailed than the previous paper based instructions, which help improve accuracy and quality. Because the system is visual, shop floor staff simply follow the instructions, recording that they have completed each stage on the touchscreen. This provides full visibility of activities on a manufacturing line, allowing management to monitor progress for all orders. “We are saving time and labour, which in turn has enabled us to recoup the cost of our investment,” said Michael Brennan, project manager at Whale. “The combination of Visual Factory with our Infor XA ERP software provides us with powerful tools, and it’s an approach I’d recommend to other manufacturing and engineering companies.”

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manufacturing

ITNIBS Stoke-on-Trent valve manufacturer Goodwin International implemented Seiki 50 Resource Assembly Level Scheduler. This system is complemented by Seiki Systems’ Networked Manufacturing System, a complete shop floor system that electronically distributes and collects manufacturing process data. Precision planning and scheduling capabilities are vitally important for Goodwin, according to production director Nigel Brown. “Seiki offered a complete machine monitoring and assembly level scheduling system that supported our key objectives,” he said. “The primary benefit that we anticipate is an increase in operational visibility which will support our wider business planning.”

Kyocera Fine Ceramics announced that it will invest in Infor’s M3 ERP system. The global industrial and fine ceramics manufacturer made the decision in order to replace an obsolete version of Movex currently in place in all its European sites. From April 2013, M3 will support the order management of offices in Esslingen, Neuss, London and Paris. It willl help improve productivity by enabling faster access to information such as sales orders, automating recurring orders, and removing the need to manually input data as part of integration with Microsoft Office. According to Kyocera management, the eight year old Movex solution has a user interface that is too complicated, delivering inadequate search functions, and providing only manual integration with Microsoft Office. “With the upgrade to the latest version of Infor M3 currently being executed, Kyocera has an ERP solution that simplifies and accelerates our daily operations,” said Dr Harald Schuster, responsible for the business applications of Kyocera in Europe. “Infor M3 delivers a modern user interface, powerful search capabilities, and close integration with Microsoft Office.”

Automotive lighting and interiors manufacturer Invertec is investing in a new ERP system from K3 Syspro. The action has been taken to improve customer responsiveness. Syspro will replace an old bespoke system, built by Invertec. The last significant update of this system occurred ten years ago. Rather than spend time and money updating the ageing system, the company sought a modern solution to help reduce order lead times, better meet customer expectations, and replace a weak material requirements planning process.“Our existing solution could only handle order data in weekly batches – and as our customer base grew, lead time expectations had reduced,” said Paul Burnett, finance director at Invertec. “We needed to invest in a solution that could handle daily and hourly data, in order to enable us to respond instantly to customer orders.”

Hitachi Construction Machinery implemented Syncron’s Syncron Global Price Management solution in anticipation of significant growth in its aftermarket business. The investment was made in order to improve pricing decisions and optimise margins. The project was one of several strategic investments made in its aftermarket business by Hitachi, to help grow profit and market share in a very competitive global market. “We consider Syncron as strategic partner for aftermarket business growth and better customer service. We expect a long term relationship and continuous proactive support from Syncron,” said Katsuhisa Ishii, marketing department manager of the spare parts division within Hitachi’s Life Cycle Support Operations Group.

Mestec’s ‘Manufacturing Smart Box’ has helped reduce labour hours in Aircraft Simulator production. The solution was used by Crawley-based L-3 Link Simulation and Training to achieve a 25% reduction in the 15,000 man hours eaten up in manufacturing its aircrew flight simulators. Previously the plant’s information systems provided very limited visibility into where or how labour hours were spent. The Mestec system compares actual versus standard times and costs, capturing data through touch-screen terminals on the assembly line to produce accurate information about build status and the nature of work done and inprogress. “The identification of non-productive work and unproductive time is very important to us, and we’ve never had the ability to do this before,” says operations director Paul Arnold. “Now, we know exactly where we’re losing time – and can tell if the root cause is supplier failure, or issues within our own manufacturing organisation, such as engineering changes.”

Have your say at www.themanufacturer.com

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Finance

Insurance and Professional Services: The Patent Box

Get up to speed:

The UK Patent Box is a tax relief available to companies and is intended to encourage innovation. It can reduce a company’s corporation tax liability on relevant profits by up to 10%, so qualifying companies should get up to speed with it now, says Will Stirling.

o you innovate? Does your company own patents, or are you using patents acquired under license from another company? Is your company profitable? If the answer to these is yes, your business should be eligible for the Patent Box (PB), a form of tax relief that is being phased in from April 1. To qualify, a business must make profits from exploiting patented inventions, and will either own or license-in the patents and will have further developed them, or products or processes that incorporate them.

“The Patent Box regime promises to be as generous at the established R&D Tax Relief scheme, which pumped £1.1bn back into British industry in 2010/11 as a reward for innovating,” says Barrie Dowsett, managing director at tax consultants Myriad Associates, which specialises in making R&D tax relief claims. The core rationale of the PB is to stimulate companies to invent and patent more products. But will this work in practice? If a company can attribute a good chunk of its profits to qualifying rights, and the part of its business where those

Worth the effort

rights are active is profitable, the savings are handsome - more than enough to offset the cost of filing patents. “With patents typically costing £5k to £10k to file a ‘narrow’ patent in the UK and costs in excess of £10k for a European Patent, the PB incentive will help support an SME’s financial justification to invest in patents in order to protect their IP,” says Mr Dowsett.

Losses and streaming The catch with the PB is it limits the use of losses from qualifying rights. If the part of a company that uses these patents is lossmaking, there’s no benefit in the PB. “If a group of companies – with some profitable, others not – was looking to move into profit, you might leave it until the loss-making part was in profit and then opt in to the PB regime,” says DLA Piper’s

Once operations are in profit, the lower rate of corporation tax under PB becomes beneficial

found little evidence of a stampede of companies joining the PB regime. But tax professionals are urging companies to take notice.

David Thompson, DLA Piper

Joining the Patent Box regime is a (fairly simple) six stage process Stage 1 (Identity profit)

1: Calculate gross trading income (TI)

Stage 2 (Deduct routine return)

4: Deduct routine return to give qualifying residual profit (QRP)

Stage 3 (Deduct brand value)

5: Opt for small claims tratment (if appropriate)

2: Calculate relevant IP income (RIPI) as a proportion of TI

3: Calculate percentage of trade profits (or losses) attributable to RIPI

6: Deduct marketing asset return from QRP Source: DLA Piper

Finance Insurance and Professional Services: The Patent Box

The Key Facts The PB will provide a reduced corporation tax rate of 10% for companies eligible for UK corporation tax The tax relief will be phased in from April 1 2013 over five years. By the 2017/18 tax year the patent box will be 100% effective The regime will apply to UK, European Patent Convention and corresponding national rights in the European Economic Area and to other rights– termed qualifying rights (see HMRC website: www.hmrc.gov.uk) Revenues from worldwide royalties, license fees, sales of products incorporating patented technology will all be allowable Tax relief can be claimed retrospectively. The regime allows profits arising up to six years before the grant of a Qualifying Right (e.g. in the period between application for and grant of a patent) to benefit from the 10% rate

How it works Confirm your company has qualifying rights Calculate what proportion of the gross income is attributable to the patented items Apply this percentage to the profits (after applying certain adjustments to exclude enhanced R&D tax credit relief and the effects of financing arrangements) Deduct the return on routine activities (the profit the company might make applying a simple mark-up to its overheads). Remove the effect of any brand value (a simple 25% attribution can be applied for small claims) The resulting relevant profit is subject to 10% corporation tax Example: In 2013/14 a company records £25,000,000 turnover and approximately half (£12,500,000) qualifies for the Patent Box i.e. sales derived from patented inventions and sales of products incorporating these qualifying rights. After adjustments the trade profit from this activity is £1,000,000. Routine expenses (staff costs, raw materials etc) amount to £6,000,000, of which 50% is deemed attributable to the relevant profits. Apply a notional 10% mark up so that the profit attributable to the routine activities is £300,000. This leaves £600,000 attributable to relevant activities. Deducting a further 25% for the brand profit leaves £450,000. In this year, the corporation tax rate is 23% so total corporation tax liability would normally be £230,000. In the PB regime, in the first year 60% of the £450,000 is eligible at the 10% rate, so £270,000 is taxed at £27,000 and the balance at the normal 23% rate. The total saving from the PB is 13% of £270,000 = £35,100 (23% of £270,000 minus 10% of £270,000). In subsequent years, an additional 10% of tax relief on qualifying profits will apply per year. So by 2017/18, this company would get the 10% rate on all £450,000 of qualifying profit, saving £49,500 (by 2017 corporation tax will be 21%). It sounds good, but companies are regularly put off applying for R&D tax relief claims because the bureaucracy involved, including expensive accountants’ time, eats into the benefit received. “The Government has tried hard to keep the PB calculation simple enough to be carried out with the minimum of professional help,” says David Thompson, a partner at DLA Piper, who adds: “if you are already claiming the R&D tax credit there are some additional issues to address here. But it is worth the effort.”

Manufacturer comment on using the Patent Box is available at www.themanufacturer.com

The secret to optimising the Patent Box incentive is to adopt the ‘streaming’ option as typically sales of patented products or services attract higher profit margins Barrie Dowsett, Myriad Associates

Thompson. “Then you might find losses prior to the opt-in could be used to shelter profits and the mainstream rate. Once operations are in profit, the lower rate of corporation tax under PB becomes beneficial”.” The way to optimise this is to stream companies by qualifying right and profitability. “The secret to optimising the Patent Box incentive is to adopt the ‘streaming’ option as typically sales of patented products or services attract higher profit margins,” says Myriad Associates’ Dowsett. “You might think about isolating the profitable IP and related trade in another company, so that you are a) maximising the benefit of the reduced rate without prejudicing the utilisation losses of non-PB businesses other items, and b) making it easier to demonstrate to the Inland Revenue where these profits are coming from,” adds Thompson.

Who is using the Patent Box? One listed engineering company in the south of England said their tax structure was too complicated to opt-in to the Patent Box, although they admitted that shareholders had been eager for them to assess it because of the potential effect on profits and dividends. At the other end of the spectrum, some SMEs assume that the PB is only designed to benefit big companies. Will Butler-Adams, MD of Londonbased Brompton Bicycle was among them but further investigation and a visit from Inland Revenue proved him wrong. “It’s completely relevant to my business even though for competitive reasons we try to limit the number of patents we file to a minimum,” he says. “It seems a straightforward process and we have opted in. Based on our patent pipeline and turnover, it could be worth up to £100,000. That is £100k of free money,” he adds. @WRStirling

EEFInsight

Growth The Route to

Andy Hart, interim managing director of asset financier Lombard, writes in anticipation of EEF’s second National Manufacturing Conference on March 5 2013.

ombard is delighted to be headline sponsor of the EEF National Manufacturing Conference for the second year running. Over the past two years, we have been worked closely with EEF, talking directly and indirectly to its members and other industry stakeholders, about the key question of how to extend capital investment in the sector. The theme of this year’s conference, the Route to Growth, provides a platform to broaden this campaign. As with last year’s event, the day will provide an opportunity for manufacturers to share their views on what they feel needs to happen to provide the momentum for solid and sustainable growth. At Lombard our message, echoing that of EEF, remains that capital investment is fundamental to the UK recovery. It is encouraging that during 2012 we saw some positive signs that this message is being heard by industry. Our year on year lending to December 2012 was up by 9%, while we saw an astonishing 66% increase to manufacturing businesses over the same period. However, we know we have more to do and will continue to work with your sector to simplify lending for capital acquisitions.

Capital Allowances It is concerning that UK investment lags behind countries

such as Turkey and Mexico, so we hope that the increase in capital allowances announced in the Autumn Statement will help to redress the balance (p78). EEF and Lombard, along with other sector trade bodies, actively campaigned for the limit to be increased and we are delighted that the Chancellor took heed. The enhancement will give manufacturers the opportunity to acquire newer and more efficient equipment which will in turn improve competitiveness and productivity. There is an exciting and entrepreneurial spirit among UK manufacturers and we need to tap into this if we are to gain ground in the global market. The businesses that we talk to are growing increasingly innovative and are engaging with new overseas markets for exports such as India and South America which offer greater opportunity than traditional markets. We are also seeing smarter investment. Businesses are becoming much more switched on to the ‘non-traditional’ lending options open to them, and are aware of taking on debt that is appropriate to their requirements. At the same time, there is an increasing realisation that improved efficiency is vital, and we are finding businesses investing in new production equipment, not to replace their workforce but to utilise them more effectively and to support new opportunities.

Businesses are becoming much more switched on to the ‘non-traditional’ lending options open to them, and are aware of taking on debt that is appropriate to their requirements

Energy investments Another key focus for enterprising manufacturers has been sustainable and renewable energy. As fuel prices continue to escalate, words like biomass and solar are becoming more commonplace, uttered in the same breath as efficiency and protecting profitability. For those interested in finding out more, Lombard’s head of renewable energy, Ian Tyrer will speak at one of EEF’s conference seminars. His session Making your Green Investments Pay, will demonstrate how Lombard’s specialist team can help manufacturers make the most out of their green investments. I look forward to meeting many of you on March 5. No doubt this year will bring renewed challenges for us all, but the sector has a solid base and I believe that if we can harness the entrepreneurial and innovative abilities that the sector has always been known for and embrace investment to create new opportunities, we can take on those challenges, expand the UK’s manufacturing base and follow the Route to Growth. For more information about EEF’s National Manufacturing Conference 2013 scan the QR code or go to: http://bit.ly/ EEFConference #ukmfgconf

Have your say at www.themanufacturer.com

New Year’s Resolution: make the most of increased capital allowances

M Squared Lasers received £3.85 million of investment from BGF - in part to assist with capital investments for greater manufacturing capacity

Fast facts What is the Annual Investment Allowance? The amount of investment in plant and machinery that a business can make each year on which it can claim tax relief in the year of investment. If a business invests more than the amount of the AIA in plant and machinery in a year, then the tax relief for the cost in excess of the AIA is spread over a long period. How does the enhanced AIA make a difference? Prior to the change, if you invested £100,000 in plant and machinery in a year you would get tax relief on £25,000 in year one (the amount of the AIA). Tax relief for the remaining £75,000 would spread over future years. With the new limit of £250,000, the business would get tax relief on £100,000 in year one (the full amount) thus accelerating the tax relief for their investment. Information supplied by Carpenter Box Llp.

Mark Bryant, business director, Business Growth Fund issues a call to action and highlights how manufacturers can get their hands on cash for investment in the first place.

ere’s a suggestion for any manufacturing business pondering its priorities for 2013: think very hard about how you can exploit the Chancellor’s generous increase in capital investment allowances. George Osborne’s Autumn Statement included a 10fold increase in the annual investment allowance (AIA), which could prove hugely valuable to manufacturers with ambitions to grow. The AIA, which has been increased from £25,000 to £250,000, gives 100% tax relief on all qualifying spending in the year it is made. It allows

businesses to deduct the full value of their investments – on new equipment or replacements for existing kit – from their total taxable profits. Effectively, it enables businesses that invest to recoup part of the cost of doing so with a tax saving. Any business that fails to invest will eventually find itself in trouble, but for manufacturers, which need the latest equipment in order to remain competitive, the danger is particularly acute. When manufacturers don’t invest they stagnate – and in the end they die. British businesses are already lagging many of their international rivals in the use of machine

Finance

Insurance and Professional Services: BGF

tools, a key indicator of manufacturing investment. We’ve now slipped behind Switzerland, Turkey and Mexico according to research published in 2012 by Lombard (p77), the asset finance subsidiary of Royal Bank of Scotland (p80). Businesses in this country are missing out on contracts worth £2.3bn a year because of their reluctance to invest in new capital equipment, Lombard’s research suggested, with 40% of businesses having had to turn down new orders because they haven’t been able or willing to invest in the capital equipment required to fulfil them. In addition, failure to invest not only risks missing out on new business, but may also undermine the profitability of existing contracts. Outdated machinery is more expensive to maintain and becomes progressively less efficient as it ages. Manufacturers therefore ought to seize upon these newly-increased capital allowances – part of a wider network of incentives designed to encourage businesses to invest. Additional allowances are available for green investment, for example, while a new scheme offers tax credits for spending on research and development. The Patent Box, which protects profits generated by new technology from tax, is another important development that may appeal to many manufacturers (p75).

No cash at the ready? However, while it is all very well to say that capital allowances compensate manufacturers for their capital spend post facto, there is the issue of where the cash for investment will come from in the first place. One reason why investment rates have slipped is that many businesses are very nervous about economic volatility. Even those manufacturers with cash on the balance sheet wonder whether they ought to be saving it for a rainy day, rather than embarking on ambitious investment schemes. Businesses are even more anxious about the idea of borrowing in order to invest – not least because of a widespread perception, accurate or not, that they will be turned down for credit. And while the asset finance sector is growing in importance, it may not meet manufacturers’ needs in full. BGF may be able to help solve these problems. The long-term equity finance we provide is well-suited to capital investment plans, for which the business case often works best over much longer time periods. We are looking for companies that can demonstrate their ability and desire to grow rapidly. We want to find companies with well thought-out business plans who can articulate how they might use BGF’s investment to boost growth for the long term – exactly the type of businesses most likely to have ambitious investment ideas. We will invest between £2m to £10m in businesses with an annual turnover of between £5m and £100m. We only ever take a minority stake in companies; we are building not buying businesses.

Is it easy to claim AIA?

ax incentives for business investment are welcome, but they can be accompanied by bureaucracy and red tape which are off-putting, particularly for smaller firms. Not so with AIA says Andrew Churchill, MD at £18m turnover JJ Churchill. “We have single pull assets which are tracked and depreciated individually. A final tax calculation then pulls that all together and resolves our submission for HMRC. I believe this kind of capability is increasingly common as companies invest in information management systems to assist with costing.”

Who has BGF worked with? BGF has a growing track record of investment in UK manufacturing firms. M Squared Lasers: BGF invested £3.85m of growth capital into this Glasgow-based technology company. Some of the money is funding expansion of the company’s research and development programme, as well as expanding the manufacturing capacity. STATS: BGF invested £7.8m in this oil services business based in Aberdeen. The capital is funding the building out of STATS’ specialist isolation devices, as well as enabling the company to expand its international footprint. Cennox: This Surrey-based firm supplies parts for ATMs, including its own patented anti-fraud device. BGF invested £3m in the company in order to help Cennox boost working capital, take on new staff and expand internationally.

About Business Growth Fund

usiness Growth Fund was established to help Britain’s fast growing SMEs. BGF will invest between £2m and £10m in a business seen to have growth potential but which needs access to capital. BGF is an independent company with capital of up to £2.5 billion, backed by five of the UK’s main banking groups - Barclays, HSBC, Lloyds, RBS, and Standard Chartered. BGF is managed completely autonomously with an independent management team. www.businessgrowthfund.co.uk Members of ’s Manufacturer Directors Forum have the chance to meet BGF executives at a range of exclusive dinner debates throughout 2013. To find out how to join the forum contact Grace Gilling on (g.gilling@themanufacturer.com) 0207 401 6033.

Getting ahead to stay ahead Foresight and the conviction to act will be two defining characteristics of the most successful manufacturing companies this decade. In this article – part of a series focused on manufacturing growth strategies - Peter Russell, head of manufacturing & industrials at Royal Bank of Scotland, outlines how new production techniques and processes will help set manufacturers free from traditional economic paradigms and make the UK manufacturing sector a global pace setter for product innovation and customisation. New thinking required to gain pole position With UK manufacturing output falling in 2012 and growth forecasts having been reduced to 1.5% for 2013 (CBI, November 2012), it would come as no surprise if an air of resignation permeated manufacturers’ boardrooms. However, encouragingly, it seems that the country’s manufacturers are not ready to accept the status quo. “They are striving to replace the sense of pervading gloom with a vibrant image of an industry that is already applying new thinking to strengthen its global competitiveness,” comments Roy Bawden, director manufacturing & industrials at RBS. Confidence among UK business leaders is increasing. Eight out of ten (82%) businesses responding to a recent RBS survey confirmed they expect their turnover to grow over the next five years. By comparison, less than 8% believe their turnover will shrink. This goes along with the sentiment that investment budgets must not be cut, but – on the contrary – that additional funds are necessary to get ahead of the competition (RBS The Future of UK High Value Engineering 2012). Additional pressure arises from the fact, that, so far, a depreciating pound has helped to shield the UK’s competitiveness.

This is unlikely to be sustained in the medium term and, as a result, early investment to achieve a sharp improvement in productivity and development of new products that deliver a USP in any chosen market and at a competitive price is needed. “Considering all these factors, a growing number of manufacturers are looking for an accelerator that will speed growth beyond ‘traditional’ business expansion strategies such as simple product diversification, new export markets and recruiting new talent”, Bawden observes.

New production processes leave economies of scale behind Skills and commercialising innovation in nanotechnology, 3D printing and composite materials will all give UK manufacturing an edge on its global rivals, but it is also the new wave of smart design systems and intelligent machinery that will power the country’s factories of the future. Ian Nelson, Head of Origination at Lombard, part of RBS Group, observes, “These new machines will revolutionise manufacturing, accelerating the speed of production, while providing greater flexibility and reliability. The introduction of this new technology has led to fresh thinking around production paradigms such as economies of scale and how new production equipment could help overcome cost scenarios that have so far limited product development and productivity.”

Growth Strategies - RBS Design technologies, including 3D CAD and advanced production techniques are helping drastically reduce the time necessary to bring products to market. In the past, manufacturers not only had to consider direct costs such as raw material, machine time and operator costs, but especially ‘up front’ costs deriving from developing a component or product, a production-ready technology and the necessary tools required. These costs were significant, only further increased by waste while tuning and testing the process before full production commenced. Because of these high set-up costs, it was often impractical to set up for less than ten or twenty thousand units of the same product – economies of scale had to be achieved in order to cover costs and make money.

The imperative of customisation Boosting efficiency through new production processes will be vital as the UK strives for growth but this will not be enough to beat the competition on its own. Other ingredients will be needed including a relentless focus on innovation and a willingness to adopt new thinking towards product design. For example, putting Beta versions quickly into consumers’ hands, then ironing out flaws and adding new features in future models will become much more important than spending long periods designing a perfect product. Future generations of products will evolve faster, with rapid iterations in design and far tighter collaboration between designers, manufacturers and their customers.

Bottom line benefits from both ends As outlined, production costs, but in particular up-front costs, can be dramatically reduced by implementing new automated production processes. This will allow manufacturers to more easily and more quickly change features in order to produce different products or product variations. Very often new production equipment helps to reduce electricity usage and material waste too – both considerable cost drivers. Furthermore, costs for inventory decrease if components can be made in time through flexible machinery only once the customer order comes in rather than having to be pre-produced. Corporate revenues clearly benefit from additional income streams that manufacturers can achieve by launching new products more quickly and with cost efficient customisation which permit new markets to be targeted. Cirrus Laser, a leading UK laser cutting and water jet cutting company, following this strategy they commissioned a new state of the art machining centre. The machinery enabled increased production and the use of larger scale and more varied materials that opened new markets. At the

same time, the new centre required less maintenance than the old one and halved electricity usage - all of which has driven a favourable impact on profitability. Survey results show that UK manufacturers have indeed refocused on production processes whilst planning their R&D budgets in order to improve the bottom line, with 43% of companies concentrating on this area over the next five years (RBS The Future of UK High Value Engineering 2012). Ian Nelson, points out that businesses are recognising the importance of investment in new production equipment and processes, while protecting the capital required for all-important R&D, as well as increased focus on training and developing skill in the next generation. “An increasing number of companies appreciate that their success relies on investment across each of these areas in order to secure their long-term future in the global market place.”

Now is the time The need to maintain competitiveness and deliver growth in the future means that manufacturers need to act now to override traditional cost scenarios in order to be able to offer customised products at a competitive price for new markets. It is not only top tier manufacturers but also suppliers of any size that need to rise to the technology challenge to ensure they stay competitive within their supply chains and can meet the current and future needs of OEMS. Want further insight into how manufacturers are gearing up? Visit www.rbs.co.uk/futureofukhve.

To find out how RBS can support your manufacturing business, please contact:

Peter Russell Head of Manufacturing & Industrials, RBS Corporate & Institutional Banking T: (0)20 7672 1007 E: peter.russell@rbs.co.uk Roy Bawden Director Manufacturing & Industrials RBS Corporate & Institutional Banking T: (0)20 7672 1082 E: roy.bawden@rbs.co.uk

Ian Nelson Head of UK Origination, Lombard T: (0) 20 7672 2379 E: ian.nelson@lombard.co.uk

Al Ear pay bef l dele ly B g ore i 20 th ates w rd O f aF Feb ho r R e fer rua Ter EE K ry 2 gister ms i n 013 dl and an con e ewil d r diti l re ons eade cei app r. ve ly.

Moderated by BSM Consulting â€“ independent ERP consultants

Wednesday 20th March 2013, Northampton Marriott Hotel

09:30 to 17:30

Connect with like-minded manufacturing professionals looking for growth and opportunity through advancing their IT systems. If you are looking to install or upgrade your ERP system in 2013, then ERP Connect is vital to ensuring your company has the best solution for its needs. By attending, delegates will be able to gain insight and develop understanding through: Inspirational keynotes and case studies: Ensuring you will build the right strategy for implementation and avoid costly mistakes. Structured one-to-one meetings: Helping you to fully understand the market and who can best support your journey. Reassurance and validation: Support your companyâ€™s decision making process through due diligence, research and exposure to best practice in ERP. Networking in a peer-to-peer environment: Meet with fellow professionals to build the knowledge and insight needed for success in your ERP implementation. Leadership and change management strategy: Learn how to win and sustain senior management buy-in and increase workforce engagement for an ERP implementation that truly transforms your business.

Sixteen pages of notes is testament to the volume, quality of guidance and support generously offered by all of the speakers at ERP Connect 2012. Having all of the main players in ERP in a single room was a real enabler for me at this early stage of our journey; each and every one of them provided insight that has deepened my understanding of the challenges and possibilities that lie ahead IT Manager, Unison at ERP Connect 2012

For the latest information visit:

www.erpconnect.co.uk To register a place please contact Benn Walsh on: S

L V

Tel: 020 7202 7485 Email: b.walsh@sayonemedia.com Researched and delivered by:

R&D Tax Claims

Stake your Getting your due for R&D activities can be quick, painless and deliver significant capital for re-investment. R&D Tax specialist R&D Tax Claims shares a manufacturing case study to prove the point.

trongs Plastic Products, based in Tamworth, West Midlands, reclaimed over £30,000 from HMRC under the R&D corporation tax reclaim scheme. The company was founded 34 years ago by managing director Barry Strong, who began by building wooden battery boxes for electric milk floats in his garage. Strongs now manufactures plastic fabrications for a diverse global market in the transport, aerospace and construction sectors, supplying fabrications for a variety of applications including fire engines, incident support vehicles and lifting platforms. Strongs employ 40 people at its 20,000 sq ft factory and has an annual turnover of over £3 million. The company recently took on a large adjacent site to cope with expansion in 2013. Barry’s son James Strong, 34, is technical sales director. He joined the company as a school leaver. “My grandfather and father started building automated welding machines for plastic battery boxes, as they were more efficient than wooden ones. We progressed into more bespoke auxiliary plastic products, including transport packaging.” Strongs now manufactures a range of plastic polymer products including conveyer systems and complete interiors of incident support vehicles. “This applies our specialist welding techniques on high grade polymer fabrications to create bespoke products,” explains James Strong. “Polymers have excellent flame retardant qualities, are light, will not corrode or fracture under stress and are fully recyclable.”

Keeping development fresh To cater to the individual needs of customers James Strong says research and development at his company is constant. “We have specific projects for clients that we develop, including specialist packaging for transportation of parts from one production area to another. We also have in-house product development.”

L to R: James Strong, technical sales director, Barry Strong, managing director, Strongs Plastic Products; Mark Evans, managing director, R&D Tax Claims

Mr Strong says that although the company had been made aware of the R&D tax reclaim scheme several years ago by its accountants it had found itself unable to progress with the claims. “It was frustrating. It seemed like a tremendous amount of work to gather the information to prove the case,” he explains. “We were more intent on keeping our customers happy and progressing the business than looking at what we had already done to prove that we carry out R&D – we know we do!”

Swift action Turning to R&D Tax Claims for help, Mr Strong says he was given a smooth and managed process for reclaiming the company’s money. “They worked with our designers, developers and engineers on site, together with ourselves to get information that was factual and relevant. We didn’t have to spend half the time we were led to believe was necessary.” Mark Evans, managing director of R&D Tax Claims says that Strongs’ reclaim case was sped up thanks to its excellent attention to recording its activities. “We worked fast to submit before the company year-end and confirmation from HMRC took just two weeks,” states Mr Evans. “Some clients question why we succeed in doing what other accountants say is impossible or too much hard and costly work. We succeed because we have

a team of technical people who understand the manufacturing sector – one of our team is a manufacturing consultant and they can quickly pick up the R&D element of any case to write a report that the Revenue will accept,” Mr Evans continues. “Our reports are not just a table of figures; we include a full detailed case study as researched evidence.” Nor is this a one-off service. “Every year we revisit the company, assess what R&D occurred in that year and put a fresh claim to HMRC,” says Mr Evans. “We have a 100 percent success rate and a very happy client base,” he sums up. “Manufacturers are consistently showing us the way out of this recession and deserve all the support they can get. I’m delighted that Strongs are now expanding their facility and that 2013 is looking extremely bright for them.”

R&D Tax Claims Ltd T: 01902 783172 www.rdtaxclaims.co.uk contains case studies of other successful claimants and further details of the HMRC scheme.

Headline SponSorS

Manufacturing Technologies

Management

material Does a lack of management skills and capability show up among your apprentices and home grown talent as their responsibilities grow? If so MTA and AMRC’s new apprenticeship pathway will be of interest.

he Manufacturing Technologies Association and the Advanced Manufacturing Research Centre have teamed up and devised a new apprenticeship pathway which they believe will answer a growing need for the early development of management skills alongside engineering expertise. “A huge number of management roles in engineering-based manufacturing now require skill sets in both engineering and commerce” says Graham Dewhurst, director general of MTA. “These skills are increasingly needed by more junior employees within manufacturing organisations who are expected to take on higher levels of responsibility.” According to Mr Dewhurst, the growing requirement for early stage management capability is linked, in part, to the growth of manufacturing services which, as Festo’s Gary whiles identifies on p40 cause points of customer contact and management in a business to proliferate. “The trend over the last decade or so for manufacturers to broaden their offering to embrace customer support solutions has created new opportunities that could benefit the UK’s advanced manufacturing sector,” said Dewhurst. “In this context the apprenticeship framework that is being developed will seek to equip the new generation entering advanced engineering with the skills that they will require.”

Launching the pathway MTA and AMRC’s new apprenticeship pathway will be launched at AMRC’s Rotherham, Sheffield site on February 8 at the Future Aerospace Manufacturing Seminar. Speakers at this half day seminar will include Dr Gareth Williams, vice president – research and technology business development and partnerships at Airbus. Presentations and discussion at the seminar will focus on sector requirements for emerging technologies in the metals and composites sectors. The structure and purpose of the new MTAAMRC apprenticeship pathway will be explained in detail to delegates at this event.

AMRC already has extensive apprentice training facilties. Here a young trainee gives a presentation at the Global Manufacturing Festival 2012 (p.38)

Back-up The need for better development of managers and management skills that MTA and AMRC are working to address is corroborated by a report published by the Department of Business Innovation and Skills in July last year. The report, Leadership & Management in the UK – The Key to Sustainable Growth, indentified that: • Ineffective management is estimated to be costing UK businesses over £19billion per year in lost working hours. • 43% of UK managers rate their own line manager as ineffective – and only one in five are qualified • 72% of organisations in England reported a deficit of management and leadership skills in 2012. This deficit is contributing to our productivity gap with countries like the US, Germany and Japan. • Incompetence or bad management of company directors causes 56 % of corporate failures The report also said that best-practice management development can result in a 23% increase in organisational performance. In brief however, MTA has said the first year of the pathway will focus on engineering skills (performing engineering operations and engineering extension classes) while also introducing elements of business awareness and a foreign language. First year training will initially be delivered largely on-site at AMRC’s impressive hi-tech manufacturing campus. An inspiring location for ambitious young engineers. The second and third years of the apprenticeship would build on engineering skills with a level 3 technical certificate but also include a level 3 NVQ in one of a range of business disciplines, including sales – allowing for that all-important growth in customer support services.

Further study of foreign languages as well as topics such as import and export law, regulation and international business culture are designed to develop a fully rounded engineer and business professional, fit for work in globalised markets. For more information about this new apprenticeship pathway and its launch at the Future Aerospace Manufacturing Seminar on February 8 go to: http://bit.ly/MTA_AMRCApLaunch or scan the QR code.

supply The pinnacle of

Apex Supply Chain Technologies is defining the future of how companies manage their supply chains and receive goods. The company provides vending solutions for the supply of goods, from PPE to engineering components, which allows for easy access by shop floor staff. The Apex Supply Chain Edge 5000 vending machine is perfect for storing and supplying PPE and other products within close proximity to the user

ut it isn’t just the usability and convenience which benefits Apex’s customers. The Apex model provides a scalable hardware and software solution which integrates simply with suppliers. By doing so the system can greatly reduce the workload required for ordering and allows suppliers to automatically replenish goods as and when they required. This means that purchases are based on true demand rather than forecasts and wastage is minimised. Apex understands that its customers want a dependable solution that delivers an impact quickly. Great care is therefore taken to get things right first time. In recent years Apex has deployed more than 20,000 industrial vending machines, and expect to more than double this number during 2013. Two companies that have implemented Apex vending and storage solutions are radiator manufacturer Stelrad and medical device manufacturer Bespak. The Manufacturer

asked the people involved in the implementation of Apex’s machines to share their experiences.

Stelrad So far we have been very pleased with the Apex devices and are currently targeting a 25% reduction in stock use. They have also provided us with top customer service Neil Land, health and safety manager, Stelrad

Stelrad started using the Apex vending machines at the beginning of November 2012 when it purchased three machines. The company uses the vending machines primarily for the storage and dispensing of personal protection equipment (PPE). The impetus behind the introduction of the vending machines was cost reduction, but also accountability. “We have 280 employees and we found that we couldn’t accurately record what was being given out for PPE and we found that there was a large amount of wastage and overuse,” says Neil Land, health and safety manager, Stelrad. “We are spending excessive amounts per year on PPE and have targeted spend to reduce considerably.” Each employee at Stelrad has been allocated with personal

identification and pin numbers which are used to record every time somebody interacts with a machine and records what was dispensed. The back end operating system allows managers to restrict what is available to whom and to set maximum amounts available per user per day. “So far we have been very pleased with the Apex devices and are currently targeting a 25% reduction in stock use,” says Mr Land. “They have also provided us with top customer service as well.” Another factor for Stelrad was that the system allowed them to identify instances of sub-standard PPE where an employee was requiring several items per day when the expectation was that they would only need one. In at least one instance it was revealed that there was more suitable equipment available for that particular job function. “That has meant a further cost saving created by using the right equipment for the right role,” says Land.

Supplychain Logistics and Materials Handling

Bespak Bespak, which operates a clean room for the manufacture of its medical equipment, introduced Apex Vending solutions four months ago primarily for storage and dispensing of PPE. The logic behind the introduction was to put the items closer to where they were required while still being able to regulate use. When the company first trialed an Apex Supply Chain solution, it was doubtful that the system would offer any savings in terms of usage reduction. After the implementation of the vending and storage machines, usage of PPE equipment dropped somewhere between 30%-40% with a saving of close to £50,000 per year. Adrian Easter of Haley Group, which supplies Bespak with its PPE equipment and replenishes the machines, says the vending systems also helped improve efficiency at Bespak. “What vending does is change mindsets,” says Mr Easter. “It makes people question whether they actually need to carry out a particular task and take a particular item from the machine. In addition, the operators no longer have to go to the central technical stores so they are not walking about as

much which means more time spent in the clean room and more time working.” The Apex trajectory system is linked directly to Haley and provides information about usage, stock requirements and any high levels of demand. Hayley is then able to tailor its replenishment cycle accordingly and Bespak is able to verify orders against the usage recorded by the cloud-based software platform. Matthew Mayes of Bespak said the company attempted to introduce other vending solutions to the business around 3 years ago but the implementation failed. By comparison, Mr Mayes says the Apex system has already been deemed far superior to previous machines. “The flexibility is amazing. It allows you full access and control to monitor and change the system at any time,” says Mr Mayes. “These machines are so varied and versatile that the company has benefited by being able to dispense any size object without being governed by the machines capabilities. The process was so simple in three key steps of review, configure and install and that is exactly what happened. Job done!”

Reasons to engage with Apex Supply Chain Solutions Easy, Easy, Easy Apex has closed the gap between a company considering their technology and seeing the ROI. They have made the machines easy to use, easy to implement and easy to afford. Enterprise Grade Almost none of the data resides locally in the machine. The cloud-based software controls every aspect of the machines behavior, processing mission-critical data with a record of 99.99% uptime. Since the machines are as simple as possible, their implementation time is a fraction of the industry norm. Simple customer-facing machines and powerful, accurate control software make Apex ready for fast and effective deployment. Absolute Control As Apex grows, it sees new markets and new opportunities every day. Apex knows it can help companies in any industry, to reduce consumption, to visualise the true demand, right-size the amount of any resource and control the use of those resources so companies have what they need, when they need it, where they need it, and only for the people who need to use it. Pay for what you use In most cases where the stock is maintained by the supplier, the customer only needs to pay when the items are taken from the machine. The supplier provides all the products in the machines until such time as the item is dispensed at which point the customer then owns the product. Because usage is simply to view, the customer always knows what their exposure is in terms of the products that have been vended.

Apex Supply Chain Technologies provide machines which integrate with a cloud-based software package to provide accurate data for stock control

To reduce the consumption of your materials and supplies and to learn more about Apex Supply chain Technologies please email infoeu@apexsupplychain.com or telephone +44 (0) 1905 388194.

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Manufacturinginaction Putting UK manufacturers under the spotlight

Factory of the month

Accolade Wines 90 To the last drop Be inspired by Accolade’s strong commitment to lean and its approach to leadership Understand why this business won the Leadership and Strategy Award at ’s Manufacturer of the Year Awards 2012 Learn about plans to replicate the Bristol site’s lean model across Accolade’s global locations Read about the site’s challenge to live up to the targets set by its private equity owners and work with demanding supermarket margins Discover innovative approaches to logistics and distribution which are cutting costs for Accolade Read about Accolade’s approach to growing its own talent to fit its skills requirements

M o t o rs an d gearb o x es

Rotalink 98 Find out how the company competes with low labour cost economies to export 70% of its products Learn about a growing trend in customised drives which give performance feedback Discover how this manufacturer is building customer feedback into R&D processes to accelerate time to market Learn how the growth in just-in-time manufacturing among OEMs has altered Rotalink’s production processes

All profiled companies in The Manufacturer are automatically entered into the Manufacturing in Action category at The Manufacturer of the Year Awards 2013

A number of studies show that wine is in better condition for the end consumer if it is bottled in country of sale, as opposed to country of origin.

To the

last drop 90

Europeâ€™s largest wine bottling facility has undergone a change since last The Manufacturer profiled the business in September 2009.Tim Brown talks to Richard Lloyd, global manufacturing director at Accolade Wines about his high aspirations for the site, the new sign above the door and what it means to win The Leadership and Strategy Award at The Manufacturer of the Year awards.

Factory of the month R Accolade Wines

ichard Lloyd says his vision for Accolade Park has always been 100% clear; to set the benchmark for wine packaging and make Accolade Park the best facility of its kind in the world. In his words: “Someone has to be the best, why shouldn’t it be Accolade Park?” To help achieve this, Lloyd has worked on embedding the five Lean Principles at the core of all activities whilst targeting all employees to be aligned, engaged and empowered to improve the site in every aspect day after day. Richard Lloyd joined Accolade Wines, formerly Constellation Brands, in 2007 from Imperial Tobacco where he had quickly risen through the ranks to become Production Manager, having started as a graduate trainee. He holds a BEng in Manufacturing Engineering from Nottingham University and recently completed an MSc in Lean Operations Management. He commenced work at the Bristol wine production site as packaging manager where the success of his leadership and improvement programmes have led to him taking the role of global manufacturing director. He says key to their success is the transition from ‘push’ to ‘pull’ based Lean, stating: “As in any business when we started the workforce looked to the management team to tell them what to do - a classic ‘push’ or ‘command and control’ system. Over time as we have encouraged the workforce to develop their capability to solve problems themselves, the leadership has been increasingly facilitative and has a key role in driving accountability and ensuring alignment and standards are met. “It’s a big ask, but something many of our managers have delivered brilliantly. We aspire to a situation where our teams have the information, the capability and the confidence to make great decisions on the shop floor – so they can respond appropriately and effectively as conditions change. They solve problems, they create new solutions, they ‘pull’ our business forward to continually improved performance.” The success of this approach coupled with the bespoke Accolade Lean Business Model was recently recognised when the company won the Leadership and Strategy Award at The Manufacturer of the Year awards held in November 2012. The improvements achieved through the Accolade Park management model have been great, as has the feedback from industry and customers. As a result the company’s board have now set Lloyd the task of replicating the model globally. Indeed the company want its entire operation, from its Australian vineyards to its US-based production facilities, to be influenced by Lean in the same way as Accolade Park and for this internally designed Lean model to become the company’s global standard.

Accolade Wines at a glance Ownership

Champ Private Equity 80%, Constellation Wines 20%

Turnover

£700m

Market

Number one in the UK with three of the top ten brands (Hardys, Stowells and Echo Falls) plus number one in Australia.

Location

Avonmouth, Bristol, UK

Employees

500

Accolade wines wants to leverage its supply chain excellence to be the supplier of choice for supermarkets

A new name and an even stronger desire for progress Since 2009, over 120 million cases of wine have passed through the Accolade Wine factory in Bristol. However, in 2011 a major change took place in the business. In February of that yearits former owners, Constellation Brands, sold the companyâ€™s European and Australian operating arm to Champ, a private equity firm based in Sydney Australia. And in June of 2011, the company was re-branded as Accolade Wines. Currently the third largest wine company in the world, Accolade is working towards realising the true potential of thewine packaging, warehousing and distribution site. Accolade Park, located in Avonmouth, Bristol is a 885,000 sq ft facility which was constructed to satisfy the growth in demand for shipping wine in bulk and packaging as close to the customer as possible. Instead of transporting finished goods, as was common five years ago, the company takes delivery of wine in bulk 24,000L containers and the wine ispackaged in the UK.

According to Accolade, there are a number of studies which show that wine is in better condition for the end consumer if it is bottled in country of sale, as opposed to country of origin.This is for a number of reasons including less temperature variability during transit and it also allows

CRP Print and Packaging is one of Europeâ€™s leading independent print and packaging groups and the market leader in the design and manufacture of bag in box (BiB) packaging.

n on-going investment programme in the latest printing technologies, using unique materials and supported by the most up to date laboratory means the CRP is regarded as a technical centre of excellence for BiB packaging. Based in Corby, Northamptonshire, CRP has developed an award winning reputation for innovative products for leading wine brand owners in this speciality market. A culture of working in true partnership has been a feature of trading with Accolade for more than ten years. The two companies work closely on continually improving product quality and service, to together build a reputation for expertise and acute customer focus. CRP is proud to have a mutually trading relationship with the team at Accolade Park.

Factory of the month Accolade Wines

analysis of the wine quality to be conducted closer to the consumer. Satisfying an economic and quality imperative, the site has understandably proven to be enormously successful.

Every challenge is an opportunity Despite the enormous improvement in efficiency provided by shipping wine in bulk, a continually increasing price competitiveness in the wine market coupled with the impact of high alcohol duty means that as a ratio of turnover, profit for the wine packager is relatively low. Champ, who now own 80% of the company (Constellation has retained 20%) entered the market fully aware of the economic conditions. Strategically,Accolade is focused on driving increased profitability through the development of strong partnerships. The major supermarkets have been a particular focus and

footprint in the UK, it not economically viable for them to package their wine in country of origin any more. “The average price for a bottle of wine in the UK is just over £5,” says Lloyd. “The difference in cost in the supply chain of shipping in bulk versus finished goods really means that if you’re trading at the £5 price point, the margins become almost non-existent if you’re shipping in finished goods. As a result we have a number of our competitors currently knocking on our door to use the facility.” Indeed, in July Treasury Wine Estates signed a deal agreeing to have Accolade package its European portfolio at Accolade Park on a long term contract. The challenge for the company now is to choose the right partners. Finding itself in an enviable position, Accolade is looking to utilise this opportunity to not only grow its business but also drive down its own costs. “When a truck leaves here heading for Sainsbury’s it has Accolade branded products and Sainsbury’s own label. Therefore we manage to get a full load everytime, thus being more economical in terms of fuel costs,” says Lloyd. “We take an order on day one and deliver it on day two, seven days a week. If you operate that way you can optimise your load fill and offer an exceptional level of service to your customers.” The company is looking to expand that philosophy even further. “We are in discussions at the moment to see that if we were to package for competitors, could we put on a truck, our branded, someone else’s branded and the supermarket’s own label. That is a very attractive offering for the supermarkets and that is important for us because that becomes another differentiator in terms of our relationship with them,” says Lloyd.

In the last 12 months, 75% of the employees at Accolade either changed department, shifts or teams to optimise our cross skilling, team composition and working Accolade not only supplies them with product but also provides an additional service element and an incredibly responsive level of service and logistical support. “At the moment we are packaging for Sainsburys, both our brands and their own label products,” says Richard Lloyd. “We also package some of Tesco’s own label products and we are in discussion with several others. We are looking to be the supplier of choice to the supermarkets and not just trade on commercial terms. So we intend to trade on our supply chain excellence at this site.” Indeed, the popularity of Accolade’s offering is not just limited to its customers. For a large proportion of the wine companies that have a sales

Champ very much sees the manufacturing supply chain element of Accolade Wines as a unique selling point which can be leveraged. Demonstrating an impressively functional form of participatory economics, by trading with customers, suppliers and possibly even some competitors on a long term basis, the company’s approach could in fact be economically beneficial to all parties as well as the environment.

From an operators standpoint For many employees, being purchased by a private equity firm may be a cause for concern. But private equity has undergone somewhat of a renaissance over the last 10 years where adding value to purchased businesses is now recognised as the best way to generate growth. According to Lloyd, from day one Champ has not only invested heavily in the site but has also continued the site’s long tradition of employee engagement, which again was another reason for the company’s win in the Leadership and Strategy category at

Currently employing just over 500 staff and plans to recruit an additional 50 employees

The Manufacturer of the Year Awards. “In the first month Champ spent over a million pounds on robotic palletisers and new packaging equipment for the Accolade facilities. From January this year we will be the only site in the UK that can package glass, from the small 187ml bottles up to 75cl as well as bag in box, following further machinery investment” From the outset Champ also ensured it communicated its plans directly to the staff. Lloyd says there was even an example where members of the Champ team stood at midnight in front of an entire night shift crew to introduce themselves and explain their visionin person. Richard Lloyd says he has utmost faith in the company’s new owners. “If anyone goes and looks at the history of Champ, they have a very impressive record of improving businesses . We are going to be in a better place in three to five years time or whenever it is that they decide to move on.”

Skills to fit the bill Accolade Park is set for expansion. Currently employing just over 500 staff, Champ has signed off on the recruitment of an additional 50 employees which will mean that from March 2013, the plant will expand to run its bottling operation 365 days a year, 24 hours a day. The site has always been 365 days a year operation in terms of deliveries out of the warehouse but in terms of packaging it only operated 24 hours a day during peak periods such as the three months leading up to Christmas.

Factory of the month Accolade Wines

We are in discussions at the moment to see that if we were to package and warehouse for competitors, could we put on a truck, our brands, someone else’s brands and the supermarket’s own label Richard Lloyd, Global Manufacturing Director, Accolade Wines

“We have found that out in the market it has become harder and harder to go out and find engineers,” says Lloyd. “So of these extra fifty employees that we are bringing in over the next six months as we move to operate 365 days a year, over half of the engineers for that recruitment will be graduates of the site’s engineering apprenticeship programme. So we are starting to grow our skill base organically.” In the last year when positions have become vacant, 45% ofjob vacancies have been filled from within and the vacated jobs are back filled using external applicants. Of the remaining 55%, the company has been able to inject new blood into the site and has, over the last two years, handpicked new staff members from the softdrink, dairy, pharmaceutical and aerospace industries. According to Lloyd, the company has really been able to bring alive the age old concept of putting their people first and this commitment was also proven by the company’s success in at The Manufacturer of the Year awards in November where it was shortlisted in the People and Skills category. Having only full time employees working on the packaging line, Accolade has been able to justify considerable investment in its entire staff. This has allowed the employees to develop professionally and given them the skills necessary to take ownership of the company’s improvement goals. Every staff member at the Accolade site is certified with a wine qualification as the company has the firm belief that the staff should understand the product they are packaging. In addition, Accolade has made further training available to not only management but also the broader employee population.

A closer look at Champ Looking at Champ’s recent history, the firm found success with a similar acquisition in the beer industry when it purchased United Malt Holdings (UMH) in 2006. Following the purchase and with the guidance of Champ, UMH leveraged its already impressive brewing experience and began to sellmalt to brewers and distillers made according to the customer’s exact specifications and requirements. The company was able to sell malt at a higher price because the specially made malt helped customers produce better products for less. When UMH was sold to GrainCorp in 2009 for $655m AUD (approx £430m), Champ said the sale provided a return of 4.5 times the $90.5 million in equity invested, an internal rate of return of 80%.

In the last 12 months alone, 60 staff have undertaken an NVQ in business improvement techniques, a course designed around the site’s Lean principles. “We’ve worked with a college to bespokethe NVQ training to our needs so there are modules in there which involve our lean methodology while satisfying the formal qualification. If we are going to be world class, it has to be the majority of the 500 people working here that will lead us and pull us to where we need to go,” says Lloyd. The NVQ is a 12 month onsite course where staff are released from their normal duties for several days per month. They work in groups of 10 on live projects whilst completing the coursework modules. Each group has a departmental manager sponsor and Richard Lloyd himself sits in on quarterly presentations from teams on the progress of their projects.

A continuous appetite for improvement Including the work of the NVQ projects, Accolade has developed an18 month roadmap to improve processes at the site. In total 28 projects have been identified with a total of 12 running at any one time. Each of the current dozen projects is then presented visually in the relevant area of the

factory so that all staff are made aware and kept abreast of developments. Every person is involved with the major improvement projects in their department. Lloyd says that this is very important to ensure alignment in the organisation and says that he has complete confidence that each and every staff member is aware of the core problem which their department is currently focused on improving using the DMAIC improvement process. The DMAIC improvement cycle is the core process used to drive Six Sigma projects. The high level of involvement and success at delivering successful returns from its continuous improvement programme saw Accolade shortlisted for the World Class Manufacturing award at The Manufacturer of the Year Awards. One of the recent successes at the plant involved the reduction of wastage in theextraction process. According to Lloyd, when product is extracted from the bulk packaging vats, it is a recognised industry standard that about 120 litres of wine will remain trapped in the bag.

Private Equity company, Champ, has spent over a million pounds on robotic palletisers and new packaging equipment

“With it being less that 0.5% of 24,000L delivery, it has been something that the industry globally has accepted,” says Lloyd. “With the amount of volume going through this site, we thought we needed to challenge this.” The bulk wine containers are a multi-layered container that features a very strong oxygen barrier – oxidisation being the natural enemy of wine. But when the container is emptied,

As a business we can sit here and say, ‘Wow we are saving over 100 litres per container delivered to site compared to last year.’ As a manufacturing director you get rather excited when you see your team this engaged and skillful at all levels Richard Lloyd, Global Manufacturing Director, Accolade Wines

it ends up with a number of creases in the bag trapping the final bit of wine being extracted. The solution was that when a bag is close to being empty, it is refilled with nitrogen (which does not harm the wine and indeed actually helps prevent oxidisation) to remove the creases. A mobile crane is then employed to lift and tilt the

Factory of the month Accolade Wines

From March 2013, the plant will expand to run its bottling operation 365 days a year, 24 hours a day

bag so that the majority of the remaining wine is captured. Now only 15 litres are left in the container, a saving of 105 litres per container. “This is a solution that was found and designed completely by the tank house technicians,” says Lloyd. “This year it means we are going to be saving over three quarters of a million litres of wine with over 8000 containers being emptied. “It is a phenomenal example of a solution came out from the guys on the shop floor and we’ve worked very hard to ensure we’ve recognised the guys that have gone and done the job. That has created further enthusiasm so they are now charging after the remaining 15 litres in the bag.”

Variety is the spice of life Taking into account the time spent as Constellation Wines, the Accolade Wines site is now four years old and Lloyd says it has reached a good level of process stability. This he says has meant that the staff areable to transition between job roles easily which provides variety for the staff and a range of multiskilled workers for the company. Indeed every 12 months, at both operative and departmental management level, the company opts to move people around. And the scale of the change is

incredible. In the last 12 months, 75% of the employees at Accolade either changed department, shifts or teams. “At first that causes some unrest because after 12 months, the workers have new friends and have often built a really tight team. You have to look really closely at the frequency that you do this . We’ve got the point where we think 12 months is right. Seventy-five per cent of people is a bold statement but that is why I think our rate of improvement is still continuing now in the fourth year. “We create strong relationships between people who, when the changeover happens, can end up on opposite shifts. In those cases, we have seen that the quality of the handover is dramatically improved.”

Like fine wine, it gets better with age While Accolade recognises that its core geographies are Europe and Australia, the company is also looking to Asia and North America to facilitate further expansion. The company has acquired businesses in both those areas in the last 12 months. It purchased Geyser Peak Winery in the USA, a distribution company in China and is currently assessing the potential for investment in a packaging plant in Asia. Back in Bristol, Lloyd says the next logical step for Accolade Park will be to install another bottling line and it is likely that this investment will be made in the next couple of years. That will bring a further forty or fifty jobs to the site. The successes the company has enjoyed over the last four years have been the result of a dedicated approach to core areas of the business to ensure its staff, processes and equipment are constantly improved. The recognition Accolade received at The Manufacturer of the Year awards in November 2012 is testament to its achievements and further growth and development at the company is inevitable.

Feeding

back Tom Moore talks to Melvyn Hazell, managing director at gearbox and motor manufacturer Rotalink, on feedback accessible to more customers and exporting 70% of its products.

“T

he world is knee-deep in people that make gearboxes,” says Melvyn Hazell, managing director at gearbox and motor manufacturer Rotalink. So to export 70% of its products from the UK, where labour costs are considerably higher than many other places in the world, the Somerset manufacturer must be doing something right. One of the most innovative things it has done is produce a modular range of motors and gearboxes for machine makers with a competitively-priced feedback option. Rotalink offers incremental and absolute feedback across its range of products for companies that want to manage their motors. The company’s motors interface with its range of gearboxes “to produce a servo[mechanism] device unavailable to the customer until now because they were excluded by cost,” says Mr Hazell.

Gearing up for success The servo, an automatic device that uses errorsensing to correct the performance of a machine, enables feedback that shows manufacturers if a machine’s mechanical position or speed is out of kilter. Detecting such problems improves performance and reduces the risk of faults occurring. Rotalink developed a low-cost applicationspecific integrated circuit (ASIC) over the space of four years to deliver more cost-effective feedback on machines. “Our standard range of encoders can fit feedback for a marginal increase in cost of a motor gearbox, so that people previously excluded by cost now have access to feedback,” comments Hazell. Customers purchasing feedback is on the rise, with the experienced industrialist explaining that building choice into everyday products is driving demand as greater programming is needed. For vending machine manufacturers, Joe Bloggs and

Rotalink at a glance Turnover

£9m

Workforce

60 people

Sales Breakdown 70% export, 30% domestic Based

Crewkerne, Somerset

Website

www.rotalink.com

John Smith in the office block have different tastes. Coffee machines have long catered for Joe who likes an espresso to reboot after a long night on the town with clients and John who likes a milky coffee just the way his wife makes it. There is a growing trend of customisation in products, but for the coffee machine and other devices to make these choices, the machine manufacturer needs to make a product that can search for a number of options, each requiring different programmes, to decide how the cup of coffee will be made. Feedback helps to support this demand on a motor gearbox range of up to 15 Newton metres of toque with speeds up to 1,000 revolutions per minute.

Motoring Rotalink

Modularity Rotalink is able to fit a customer’s application from a standard range of components. The modularity of Rotalink’s gearboxes gives it a huge number of options. Offering incremental and absolute encoder feedback, customers can drive motors through its drivers, use the drivers as a design tool or take the chip from driver and put on portal. What you end up with is a huge modular catalogue. Its gearbox and motor range helps customers manage antennae in China, powering vending machines and ATMs in North America and driving pumps in Northern Europe. Over 70% of the company’s sales come from exports, competing competitively on the global stage. The modular system allows customers to trial products and modify them during the design process. “We can upgrade or downgrade components to suit the customer, increasing or decreasing the levels of speed or torque to match production requirements,” says Hazell.

Feedback was unavailable to the customer until now because they were excluded by cost Melvyn Hazell, Managing Director, Rotalink

This means that any changes to a product, during the R&D process or after, can be implemented so that new and upgraded products can quickly be brought to market. In a world with 10 million engineering jobs unfilled, according to Craig Giffi, head of industrial products at Deloitte, the modular system also cuts down on the amount of skills and operations required, so that resources can be ploughed into more desirable tasks such as product development. It can be frustrating for managers and the workforce if a whole team has to be sent on a training day, as is often the case with IT systems. Rotalink has designed its programmes with simplicity in mind, a strategy that seemed to work well for a small company in California called Apple. “We have very flexible programming systems so a competent engineer can teach themselves to programme very rapidly,” says Hazell. “He or she doesn’t need to go outside of the business to get specialist expertise; he or she can already do it.”

Looking in the mirror Rotalink has been busy improving its own factory to provide a better product, introducing a new cell to specially support original equipment manufacturers. With OEMs not wanting to carry stock so that they can efficiently operate Just-In-Time production. they need suppliers to operate in a certain way. Therefore Rotalink is implementing lean practices at its own factory to cut lead times for customers. Its engineers are using the latest 3D modelling software and in house prototyping to

deliver motion control products to tight timelines, providing and delivering a customised solution within just eight days. Timing is everything. And this UK manufacturer is predicting further growth at a time when the UK needs to balance its books by exporting more goods and services.

lastword The

Automation is big; have the accountants heard? Brace yourselves for a tidal wave of automation media and promotion in 2013. The reasons behind the jamboree are important and it is high-time the message got through to those with the cheque books, says Will Stirling.

n 2010 the Government launched its Advanced Manufacturing Growth Review. Near the bottom of the bullet points, was small pot of money to promote investment in autonomous systems in manufacturing. ‘Automating Manufacturing’ recieved £600,000, subsidizing consultancy to assess manufacturers’ automation needs. The scheme is administered by BARA, the British Automation and Robot Association and the Process and Packaging Machinery Association. A bit miserly compared with other government support, but BARA did not complain. It was a sign that the Department for Business, Innovation and Skills (BIS) had finally realized that technology needed a shove. After three years of post-2009 rhetoric about the importance of manufacturing on a conceptual level, the penny had dropped that manufacturing firms had to ‘tool-up’ as well as ‘upskill’. The ‘AutoMan’ programme,

100

Have your say at: www.themanufacturer.com

winding-up in March, has been a success. Across all sectors, 356 companies applied. “Many are from food and drink, but despite strong interest there is reticence to automate here because supermarket contracts are short and changeable,” says Grant Collier, head of marketing at the PPMA. From this group, 52 companies have opted to progress to a detailed intervention stage and discussion is now underway between BARA and BIS to progress a second programme. Britain remains massively underinvested in industrial automation compared with some countries – it’s about one tenth the size of the German market. Investment is rising, but there are nuances behind initially encouraging automation sales increases. Sales of robots in the UK in 2012 rose to 2,476 units, up a staggering 82% on 1,336 in 2011, a previous record year. In fact the automotive sector generated most of these sales, according to Mike Wilson, chairman of BARA, and there has only been a modest increase in automation sales to other sectors. Sales in the food and drink industry are disappointingly down by 22% since 2011. And robots are a fraction of the automation picture. Automation trade body Gambica would be quick to point out that robots make up just 2% of the UK automation market which is dominated by process control (46%) and industrial automation (41%) neither of which are flying off the shelves. But however you cut it, the overall message from the trade bodies, media and business support organisations, who have rallied to the automation cause (resisting the urge to say ‘jumped on the bandwagon’), is that manufacturing technologies

– especially automation – are an essential but largely unappreciated thing for British industry. A profusion of events and publications are banging this drum hard now. The Manufacturer has a new event this month, Automate UK (p22). Trade association Intellect had a similar, though cross sector, event in January. Manufacturers’ group EEF is working on an automation campaign. Two magazines were launched for this sector in 2012; Controls, Drives and Automation and Industrial Automation News. But is all this clamour missing the target audience? Engineers love technology and are already converted. Government’s money for BARA, and massive investment in tooling up the HVM Catapult centres, including the Process Innovation Centre, with some unique technologies shows that BIS has caught the bug. The media, except those who still yarn about automation equating to job losses, get it, the trade associations get it. Who’s left out? That’s right - the bean counters. British factories do lean really well, we’re great at lean. They don’t do technology so well. The accountants must start buying this kit and believing in the competitive advantage it will bring. Hopefully the enhanced capital allowances this year (p78) will push them to stop hoarding – many mid-caps are sitting on unprecedented cash piles according to pundits like RBS senior economist Ross Walker – and experience the ROI instead. But a report from PwC in late Jan holds out little hope for this. Its research showed that 82% of manufacturing leaders the world over- giving the UK a break for a moment – will focus on cost cutting in 2013. Capital investment intentions didn’t make it into the executive summary. @WRStirling

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The UKâ€™s essential intralogistics event

This report comes with the February 2013 issue of The Manufacturer www.themanufacturer.com

Organised by The Manufacturing Technologies Association â€“ www.mta.org.uk

A Member of the Constructor Group

And by â€œThe Boxâ€?, we are specifically referring to your warehouse. Do you have the correct stock levels for the next season? One of the more efficient ways to lower your inventory and save costs is to think smarter within the warehouse space that you already have. Our skilled people can help you do just that by using their knowledge and our new optimisation tools.

What exactly is the optimal layout solution for your warehouse? Contact us, and we will help you Think Inside your Box. showme@dexion.co.uk | 0800 581 531 | www.dexion.co.uk

IMHX 2013 PREVIEW 03

IMHX 2013 p4 IMHX 2013: intralogistics just got interesting Highlights at this year’s exhibition including a new zone for addressing logistics and materials handling skills gaps

p6 Living in an automated material world

Advances in automated material handling technologies – for the warehouse and beyond

p8 IMHX 2013: exhibitor list

A full listing of the exhibitors who will be present at the NEC Birmingham and where you can find them when you visit

p10 Warehouse Management: Do I need it?

Common spurs for investment and what more you should look for in a best of breed solution than is present in stand ERP/MRP modules

Editorial

This report was compiled for IMHX 2013 by The Manufacturer magazine. Editor Jane Gray

j.gray@sayonemedia.com

Contributing editor Tim Brown

t.brown@sayonemedia.com

De s i g n

Art Editor Martin Mitchell

martin@opticjuice.co.uk

SAL E S

Sarah Hough

he Manufacturer is pleased to once again media partner the International Material Handling Exhibition.

IMHX 2013 takes place at the Birmingham NEC from March 19-22. Calling manufacturers to realise the efficiencies and improvement that their operations could gain from investing in materials handling technologies, Rob Fisher director of Informa, IMHX’s organiser, says: “Manufacturers have embraced the principles behind lean manufacturing and these can also be applied to logistics operations. “Manufacturers are constantly moving products throughout their operations – whether it is components for line-side assembly or the finished product which then needs to be shipped to the customer. “Businesses need be open to new ideas and cost-saving initiatives and many industry pundits believe that the greatest area for potential cost reduction lies within the supply chain. This makes a visit to IMHX 2013 a worthwhile investment of time for any manufacturing concern.” Attendance is FREE. So why not book the time in your diary?

Reasons for attending IMHX 2013

Tell-tale signs that your supply chain and materials handling operations are not up to scratch: • Too much stock • Production is being slowed due to components not reaching the production line at the right time • Stock errors – both goods-in and goods-out

s.hough@sayonemedia.com In order to receive your copy of the The Manufacturer kindly email b.walsh@sayonemedia.com, telephone 0207 4016033 or write to the address below. SayOne Media cannot accept responsibilty for omissions or errors. Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.

Questions to ask yourself before attending IMHX: • Could your material handling and logistics processes be done better, more efficiently and more quickly? • Could cost reductions be made along the way? • When the last time you sought out expert advice and evaluation of you supply chain needs?

Global demand for materials handling solutions is growing. According to a report from Modern Materials Handling global revenues from the sale of materials handling equipment and systems in 2012 topped $14 billion. The Materials Handling Industry Association is expecting 2013 orders to increase 13% compared to 2011.

IMHX 2013 PREVIEW 04

High

inc Unisan CleanTrax

IMHX 2013: G intralogistics just got interesting!

When? March 19-22

Where? Birmingham NEC Who? 400 exhibitors are signed up

The show will benefit over 20,000 professionals in the following job roles: • Company management • Finance managers • Project managers • Supply chain managers • IT / Communications management • Logistics / Distribution / Transport management • Business development • Storage & Warehousing / Materials Handling • Production management

etting materials and products from A to B within your factory is integral to any manufacturing process – and often a sore spot for hidden waste and inefficiencies.

If you know that the delivery of materials from warehouse to line and their movement around the shop floor could be smoother, leaner and cheaper in the long run, then the technology and kit available at IMHX 2013 is well worth a look-in. There’ll be over 400 exhibitors at the show, ready to demonstrate equipment from racking to fully automated warehouse management systems. And in addition to the hardware and software available to improve your materials handling, the show will also provide access to information on how to finance investment in your ideal materials handling system. BNP Paribas Leasing Solutions is lead sponsor of the show. Visitors are promised an informative and exciting experience by the show’s organisers, with the exhibition having a number of feature areas as well as free conference sessions, product launches, live demonstrations and prize competitions.

The IMHX ‘Logistics Excellence’ Conference:

with two streams and a themed series of seminars on materials handling strategy delivered by renowned industry experts. Case study presentations too will offer insight at an operational level and demonstrate logistics best practice.

Goplasticpallets HyRack pallet

IMHX 2013 PREVIEW 05

hlights

clude: Skills & Apprenticeships Zone:

New to the show this year, the zone will be graced with the supersonic Bloodhound vehicle hosted on the stand of its sponsor, Linde Material Handling. Situated in Hall 17, the Skills & Apprenticeships Zone was spearheaded by the BITA Academy which has also established a dedicated apprenticeship training facility operated in conjunction with City of Bristol College to close skills gaps for the logistics industry. The zone will reinforce this effort, bringing together talented young people and companies needing new recruits

Old hands at the IMHX will be pleased to see that well established features will return to the exhibition including the Design 4 Safety Competition. This will once again recognise the importance of product design in improving safety throughout the materials handling industry. The winners in seven award categories will be celebrated in the Design 4 Safety Zone at the show and visitors will be invited to vote for an overall ‘People’s Choice’ award, to be announced at the exhibition. The heats of what promises to be another hotly contested RTITB Operator of the Year Competition will also take place at IMHX 2013. Over the four days of the show, forklift operators from across the UK and Ireland will compete in a special arena designed to test their skills to the full, with the best then moving forward to the grand final – to be held at RTITB’s headquarters in Telford in September – where they will have the chance to win a brand-new car. The AMHSA Pavilion will also return to the show – hosted by the Automated Material Handling Systems Association, with a number of AMHSA member stands clustered around a hospitality and presentation area. AMHSA members will be giving short ‘Meet the expert’ presentations on key automation topics including Augmented Reality Systems, Smart Procurement, Software as a Service and Automated Guided Vehicles. Finally, the exclusive VIP valet parking scheme will also be in evidence, allowing top executives to drive straight up to the show’s entrance, have their vehicle parked securely by a professional driver and enjoy access to the VIP Lounge with complimentary refreshments and Internet facilities.

RTITB Operator of the Year 2012

Pre-register now for FREE to attend UKWA 3PL Zone:

Also a new addition for 2013, this zone will be hosted by the United Kingdom Warehousing Association and the International Visitors’ Lounge. It’s designed to be an ideal location for the shows international delegates to hold meetings with clients or suppliers, or simply a place to relax.

IMHX 2013 is a great place to see new products, meet suppliers and network with new and existing contacts. Visitors who pre-register for IMHX 2013 will receive an exclusive Priority Pass pack containing everything needed to maximise the benefits of a visit to the show – a delegate name badge, the Little Black Book of handling industry contacts, a fold-out exhibition floor plan and key details of the show’s seminars. Conveyor Units

Pre-register now for free tickets to attend IMHX by visiting www.imhx.biz

IMHX 2013 PREVIEW 06

Living in an

automated

material world

ean, kanbans, Just-in-Time and other manufacturing methods have heavily influenced the way that materials are stored and delivered in a factory. In the lead up to materials handling show IMHX, Tim Brown investigates some of the trends and technologies which have taken automated materials handling forward. The rationale for automation has always been about efficiency, with labour cost and availability often the catalyst for implementation. The drive – pun intended – for conveyors, automatic sorting, automatic guided vehicles (AGVs) and automated storage is growing and the technology is continually improving. Stock reduction is at the core of lean, make-to-order and justin-time methodologies and this has been further encouraged by “less is more” lessons learned from the global financial crisis. The reduction in inventory and the desire for greater efficiency have impacted on the warehouse space requirements of many manufacturers and have led to changes in the way in which goods are stored and retrieved.

An 11m tall VLM (Vertical Lift Module) used in a spares operation for white goods - photograph courtesy of Diamond Phoenix

Engineering stores – a thing of the past

According to Keith Washington, director of Diamond Phoenix Automation, manufacturers have needed to become more efficient to manage their operations successfully with reduced stock. As a result many companies are now employing distributed storage systems, such as carousels or vertical lift modules, which are located around the factory floor close to operators. “Instead of employees traipsing off whenever they need something, we are seeing more and more companies using distributed stores and unmanned stores,” says Mr Washington. “Some companies are putting a number of vertical units or possibly horizontal carousels where an operator with the right access codes can easily access them.”

Parts security and traceability is maintained and digitised with these systems. The old system: a storeman (or storeperson) checks the identity of the recipient and verifies their need. The new system: distributed storage devices can identify the recipient by name badge or unique PIN, and identify which order they are working on from an RFID tag or bar code. The machine delivers the correct parts needed to complete that order.

IMHX 2013 PREVIEW 07

A pod of 4 Horizontal Carousels used in a manufacturing kitting operation for industrial components - photograph courtesy of Diamond Phoenix

Shifting the warehouse into the 21st Century

The machines operate by presenting different trays or shelves to the operator who picks the required number of parts which are then placed into a tote. “Instead of walking to the stores and waiting for the storeman to pick the order, the operator can now just walk a few metres to a vertical device adjacent to where they are and it will deliver the parts to them,” says Washington. Some will point out that this sales point is, perhaps, limited to the number and location of storage devices the factory installs. Replenishment of the distributed stores is completed in several ways and can be automated. However, the bespoke requirements of a manufacturing operation means that developing a fully automated system is quite complex. Mike Burke, director of E&K Automation, says that today’s automated guided vehicles (AGVs) are extremely versatile and can be used for a huge range of solutions. E&K, an AGV specialist, offers guidance solutions for everything from hospitals to steel works. “Whether you’re carrying a stainless steel trolley in a hospital, a coil of steel, a reel of paper or a pallet in a warehouse or factory, the principle is pretty much the same,” says Mr Burke. AGVs are guided by several different techniques. Today the most common and arguably the most advanced is laser guidance. Laser guidance is suitable for most applications and most inside environments. The system works by using a rotating eye-safe laser mounted on the vehicle that detects reflective targets (either barcodes or reflective strips on the walls). Normally, though not always, the vehicle’s laser is mounted above head height so there is no interference from people moving around the shop floor. The AGV travels around its route using CAD information of the factory layout which includes pre-programmed AGV routes and targets. The vehicle uses the readings from these targets to triangulate its position. The triangulation data is then correlated with the additional measurements taken from the wheels and steering of the vehicle.

The warehousing industry has been quick to adopt the latest automated material handling technology to ensure the selection of goods is performed as efficiently as possible. Today pick-by-light and pick-by-voice solutions are becoming more common. TopVOX is an example of voice-picking solution where a recorded message is read to the operator via a headset and the user is informed of what items to pick. Once the item is picked, it is confirmed by the operator and the next item is requested. The key benefit of voice picking is that, by losing the manual checklist board, it allows the user to have their hands free during the picking process. By comparison, the lightdirected or pick-by-light methodology is an effective pokayoke device. The system reads the active bill of materials and signals a light on each storage container to direct the operator to the correct parts. Often the system also displays the quantity of each part required on a digital screen next to the light. When choosing between the two options, the rule is that pick-by-light is ideal if you have lots of small ports in a small area, while pick-by-voice is generally better for picking items within a larger area. Picking for goods delivery has also undergone a significant

change over the past two decades, particularly in the FMCG market where large retailers no longer want a full pallet of a single product or SKU (stock keeping unit). Just 20-years ago, full pallets of a single product were commonplace. This changed about 10 years later and layer quantities of products became more common. Today fully mixed pallets are very common. Traditionally picking for mixed pallets has been completed manually but now it is possible to do that with an automated process and this, Put & pick to light is used in the batch picking workstation in front of the carousels which enables a single operator to achieve upwards of 250 lines per hour

according to Keith Washington, is one of the most important trends to emerge in the automated material handling market. Distributed storage, AGVs and automated warehouse picking are just some of the new automated material handling technologies which will be showcased at the IMHX exhibition from March 19-22. Visit IMHX to see the latest technologies designed to save you and your business time and money. Diamond Phoenix Automation is displaying at IMHX on stand 19L143 and in the AMHSA Pavillion. E&K Automation is displaying on stand 18M171.

Automate UK For a look at the wider automation industry, The Manufacturer is hosting Automate UK in London on February 26. This oneday event will look at a host of important automation topics. For further information AutomateUK and its sister show Driving Skills Development in the Workforce, contact our sales team on 020 7401 6033 or events@sayonemedia.com.

IMHX 2013 PREVIEW 08

IMHX Exhibitor List Company name

Stand No.

A-Safe UK Ltd 19K90 The Access Group 18P20 Addgards 20C17 Advanced Handling Ltd 20F86 Advantech DLoG GMBH 17R68 AEB (International) Ltd 18P65 Aetna 17R182 Aganto Ltd 19M70 Agrimac (UK) Ltd 20B20 AIDC Solutions 17P15 Albright International Ltd 20C20 Aldermore Bank plc 20C45 Alser - Meca Systems 19L150 AmbaFlex Speciality Conveyor 20D135 AMHSA TBC Apex Linvar 18N154 AR Storage Solutions 20B66 ASG Services/Warehouse Safety 20B180 ATMS Plc 17P22 Automated Packaging Systems 20C10 Autotech Controls Limited 19L141 AvantiGas 19K122 Avery Weigh-Tronix Ltd 20C9 B&B Attachments Ltd 18M90

B+Equipment 18M145 Balluff Ltd 17Q145 Barcode-IT 17R68 Beaverswood Supply Co Ltd 19H131 Best Conveyors 17Q170 Beumer Group UK Ltd 17P60 Bibby Leasing Ltd 20G8 BIL Group Ltd 20D140 Bito Storage Systems Ltd 18M102 Bizerba UK Ltd 19L142 Blickle Castors & Wheels Ltd 20C14 BM Polyco Ltd 17R93 BMP Doors Ltd 20B47 BNP Paribas Leasing Solutions 20G70 Bolzoni Ltd 19L125 Boplan bvba 20C19 Bott Ltd 20C130 Bradshaw Electric Vehicles 20C125 BRAVI Platforms 20F93 Briggs Equipment & Hyster Europe 20D22 Briggs Equipment & Yale Europe 20C110 Briggs Equipment UK 20C110 British Industrial Truck Association 19H130 BS Handling Systems 20G16 BULMOR Industries GmbH & Co 19J160 Buse UK Ltd 20B112 Business Computer Projects 17Q140

C&G Cabs Calor Gas Cargopak Ltd Cascade (Uk) Ltd Central Systems & Automation CESAB CEVA Logistics CFTS

20B110 20G90 20D60 19H135 17Q135 19J143 UK7 19H74

Chaintec 20F85 The Chartered Institute of 17R119 Logistics and Transport Chess Logistics Technology Ltd 19J120 CI Logistics 19L146 Cimcorp OY and Logistics Planning Ltd 18P30 Clean Sweep UK 20A18 Close Brothers Asset Finance 20B95 CMECS 19L137 CoGri Group 20D90 Collatz & Trojan GmbH 18P60 Combilift & Aisle Master 19J150, 19J162 Continental Tyre Group Ltd UK 17R70 Conveyor Systems Ltd 20E120 Conveyor Units Limited 20F80 Cooper SH 20F25 Cordstrap Ltd 20D111 Core Control Solutions 19L126 Cornerstone Automation Systems 17R122 Couzens Storage Solutions Ltd 20F92 Craemer UK Ltd 18M180 Crown Lift Trucks 19J90 Curtis Instruments (UK) Ltd 20G80 Cushman 17R115

Daifuku Co Ltf 17Q118 Dalian Eastfound Material 20G126 Handling Products Co. Ltd Dalmec Ltd 18M141 Datalogic ADC UK 17R68 Davicon Mezzanine Floors 17P6 Davis Derby Ltd 20D70 Delta Shelving Systems BV 18P25 Dematic 18N110 Dexion 17Q125 Diamond Phoenix Automation 19L143 DistriSort Products BV 18N163 Doosan Industrial Vehicle UK 19H120 Durkopp 20D30 Durwen 19K70

E&K Automation Limited Easypack Ltd Eblo Seating Ecotronic Lighting Systems Efaflex UK Ltd Egemin Automation Electrofit Zapi Ltd EnerSys Motive Power Eqstra Holdings Espex Batteries Ltd European Conveyor Systems Ltd Euroroll EXDS Ltd

Factory Equipment Magazine Firetrace Ltd Flexco UK Flexi Narrow Aisle Limited Flogas Flow-Rite Safety Solutions Inc. Flowstore Systems Ltd

18M171 20C44 18M175 17R85 20F108 18N153 19J111 20F30 18M160 19J110 17Q150 18N162 17Q112

20C147 20B175 17Q130 19J75 19K155 19L72 18M177

Food Storage and Distribution Federation Fork Lift Truck Association Fromm Packaging Ltd Fronius International GmbH

Galebreaker Industrial Gemini Data Loggers (Tinytag Genesis Automation Ltd George Utz Gisco Storage Limited GNB Industrial Power Go Plastic Pallets Goodsense Forklift Goupil Industries GPC Industries Ltd

19H153 19K126 18N170 20G127

19H72 UK10 20G110 18N152 18P15 19L120 19K127 20F10 20B170 20G115

H Varley Ltd 20B10 Hako Machines Ltd 20F23 Handling Storage Solutions Magazine 18M174 Harland Simon/RFID Discovery 19H155 Harland Simon/Warehouse Insight 20F125 Hart Doors Systems Ltd 19H134 Heavey RF Group 17Q165 Hi-Level Mezzanines Ltd 18M186 Hirack 20D45 HLS 20D97 Hรถrmann (UK) Ltd 20D80 Hoppecke Industrial Batteries Ltd. 19K95 Hubtex (UK) Ltd 20F90 Hyundai Heavy Industries 19L114 Europe Nv

IBCS Ltd Ibis Packaging Solutions ID Systems Impact Handling Indigo Software Ltd Industore Ltd Industrial Labelling Systems Ltd Inotec UK Ltd Interroll Ltd ITSSAR

JBT Corporation JLG UK Joloda International Ltd Jungheinrich UK Ltd

19L170 19H70 20D46 19K130 18P58 18M170 19L139 20F130 20F102 19H75

19J116 19H145 19L135 19L134

K. Hartwall 18M142 Kalmar 17Q105 Kardex Remstar 20E100 Kasto Ltd 18N150 KEB UK Ltd 17Q205 Key Computers 20G25 Keystone Castor Company 20A37 KNAPP 20D30

Lifting & Handling Solutions Ltd Linde Material Handling

19H133 20B100

IMHX 2013 PREVIEW 09

Link 51 Linkx Systems Ltd Loadhog Ltd Lodige (United Kingdom) Ltd. Logistex Ltd Logistics Business Magazine @logistics Reply Logitrans A/S Logopak International Ltd Lomart Ltd (LiftMate) Lutterworth Ecolighting Ltd Luxonic Lighting

Mace Industries Magnetic Solutions Ltd Mailbox Stamfords Products Ltd Manbat Ltd Mandata Ltd Manition Handling System Manitou Ltd Manorga Marigen Products Limited Material Handling Industry of America (MHIA) Maxam Tire International S.a.r.l Mentor Training Ltd Metreel Ltd Midac UK Ltd Milford Ibc UK Ltd MIM-NI Ltd Minster Logistics Software Motorola Solutions MSI Forks Ltd

Nerek Wiese Newland Engineering Co. Ltd Nexen Lift Trucks Ltd Norseman Direct Ltd Nottingham City Transport Ltd

OCME UK Ltd Olivo UK Ltd Orgatex Orion Web Technologies Owens Conveyor Company

20B85 17R65 20C22 18M176 18N164 18N75 19J87 20B160 17P65 20B40 20A27 20B70

20B15 20C151 17R90 19J145 17R88 17P10 20B43 20G129 18P30 20G124 17R87 19J117 20D110 20G100 20B65 20C165 20F28 18M95 20E130

20B80 19L149 20C8 20C145 17R91

19L117 20B105 18M164 17Q110 20D104

Packsize Gmbh 20F100 Palletower (GB) Ltd 20G125 Panasonic Computer Products Soultions 19H125 Paul Ponsonby Limited UK4 Payne Pallet Inverters Ltd 20G85 Penny Hydraulics Ltd 20B62 Pepperl+Fuchs GB Ltd 19L130 Permaban Ltd 17P30 PHS Teacrate 18M100 Pickerings Lifts 17Q120 Pierau Logistics Ltd 18M72 Pilot Seating 19H151 Pirtek UK 20C30 Plastic Extruders Ltd 19H123 Plastic Mouldings Northern Ltd 18P27 Pommier Equipment 20G128

Portman Asset Finance Ltd Powercell Ltd Premier Goodsense Forklift Premier Pallet Inverters Pristine Condition Ltd Proteus Software psb Intralogistics GmbH Pyroban Group Ltd

UK11 19K72 20F10 18P5 20G9 18N161 18M173 18M140

Q Wheels 20A30 QTS Ltd (Qube Transportation Ltd) 19K92 Quorate Consulting Ltd 18P24

Rack and Roll GmbH 18M179 The Rack Group 18M163 Rack Safety Solutions Ltd 19H154 Racking Protection and 20G72 Management Ram Mount UK Ltd 19H132 Randex Ltd 17R94 Ranpak BV 17Q160 RDS Technology Ltd 19J85 Reals 20B19 Red Ledge Ltd 20C13 Redhill Manufacturing Ltd 20A16 RediGroup Ltd 20F82 RediTechniX 19L160 Renovotec 19L73 Rite-Hite 19L140 Rivermore Asset Finance 20G20 rm² 17R127 Road Haulage Association 20C15 Roder UK Ltd 17Q200 RTITB 18N70

Safety Lifting Group 20G130 Savoye Ltd 19J80 Scaglia Indeva Ltd 20B60 Schaltbau Machine Electrics Ltd 19J113 Schoeller Allibert Limited 17Q100 Schwank Ltd 17P27 SCM Handling Ltd 17Q185 SDI Group 18M125 Sentek Solutions Ltd 19H162 Sentry Protection Products, Inc 19H127 SESS 20G120 SHD Informa 19L115 SHD Magazine Media Partner SICK (UK) Ltd 17P5 SMC Euroclamp Ltd 19L70 Snapfulfil SaaS WMS 20C43 Soft Design 18M165 Solideal UK Ltd 17Q148 Somers Total Kare 20B55 Sovex Ltd 19J164 Spaciotempo UK Ltd 18M190 Sperrin Metal Products 19127 Springmasters Ltd 18P37 SSI Schaefer Limited 18N100 Stabau UK ltd 20C135 Stakapal Ltd 17Q122 Starco GB Ltd 17R80 Step & Store Ltd 19H152

Storage Equipment Manufacutrers’ 20A23 Association Storax Racking Supplies 17P1 STORAX Racking Systems Ltd 19H160 Storopack UK Limited 17R116 Swisslog 18M130 SYSTEMS SUNLIGHT S.A. 20D105

Tata Steel 20D120 Tawi UK Ltd 18M73 TCS&D 2013 19H150 Tente Castors Ltd 18M75 Tep Technica 20B50 Terberg DTS (UK) Ltd 20C142 Tholux Lighting 17Q123 Tianjin Zerpo Supply Co. Ltd 17R96 Top-VOX Ltd. 17P58 Torberry Connectors 20C16 Total Logistics 19J70 TouchStar Technologies Ltd 18M181 Toyota Material Handling UK 20F70 Tractive Power 20B17 Tradetrucks 18N165 Traka Ltd 18M185 Transdek UK Ltd 20D21 Translift Bendi 19K100 Transmon 19J115 Transnorm System Ltd 17P20 Treston Limited 18M178 TVH 20F35 Twintec Industrial Flooring 20B90

UK Powertech Ltd UKWA Unipart Logistics Unisan Products

20C140 UK13 20A32 20B28

Vaculex UK Ltd 20B44 Vanderlande Industries Ltd 19L180 Vanriet UK Ltd 19L144 Versatile Flooring Company 20G30 Vetter GmbH 20C18 Vitronic GmbH 19L148 VKF Renzel (UK) Ltd 17Q210 Vocollect EMEA 17R170 VoiteQ 17R150 Voxware 17Q175

Wanzl Ltd Warehouse Control Solutions

20B53 19L138

Warehouse Partners 20F95 Warehouse Safety 20F93 Wicke UK Ltd 20C47 Woodway UK 20A22 wuBump 20G10

X2 Computing

Yaplex Ltd

20B18

19G75

IMHX 2013 PREVIEW 10

Shouldn’t my MRP/ERP system do warehouse management already?

Warehouse Management: Do you need it?

D’s and FD’s in manufacturing have endless calls on company resources from all areas of the business. When is it time to prioritise spend on warehouse management technology?

You sit down to open the morning’s post at your manufacturing business. Your letter contains a note from a key customer fining you £20,000 pounds for a mis-picked delivery of goods – again. Such bad starts to the day are not uncommon for UK manufacturers and logistics companies says Rob Hodgson, sales and account manager at Access Group, a business solutions IT vendor which acquired Delta Software – a warehouse management specialist – in July last year. “The £20,000 figure may be fairly extreme – but it is certainly levied against one of our customers should a mis-picked or badly timed delivery cause the production line at their customer to stop,” explains Hodgson. In addition, for international businesses the cost of correcting an incorrect shipment can be immense. Stock may have to be written off and expensive express delivery made to fulfil customer requirements – or you may simply lose a customer. Experience of such penalties on a recurring basis is often the tipping point which causes firms to seek our warehouse management solutions.

And it can be easier than you might think to make picking mistakes regularly if there is no automated control of stock observes Hodgson. “In the food and drink industry, for example, we see fines levied because, although a manufacturer or supplier has delivered the right item – a chicken say – to the supermarket, they expose that their stock rotation is out by delivering items with a shelf life which is shorter than the stock delivered the day before – even if there is plenty of time to sell that item this incurs a fine.” Other customer requirements which might easily not be met consistently without appropriate IT support are pallet configuration and labelling specifications. “A good warehouse management system can help here as it can produce advanced shipment notifications which detail the exact configuration of each pallet,” says Hodgson. In addition to Access Group, IMHX will have numerous warehouse management systems to look at and technology experts to talk to. If you are experiencing problems with stock control and incorrect deliveries – either entering or leaving your warehouse – visiting a range of these exhibitors may well prove valuable.

Most UK manufacturers of any scale will have invested in MRP or ERP systems by now. Often these claim to be one stop shops, providing standardised processes and monitoring of all business operations from supply chain management through production planning, finance and distribution. So why should you need further warehouse management capability? Hodgson explains: “All in one solutions tend to offer very good capability in a certain core area – depending on the vendor – but the wider range of modules will not have advanced capability. Often manufacturers have first and foremost invested in a system which particularly good for planning manufacturing or which is strong in financials – but frequently the stock control while warehouse management – particularly for distribution of finished goods, is something of an afterthought.” In such situations manufacturers will often still be using paper-based picking systems with no, or limited, automated confirmation processes to catch last minute errors. A good warehouse management system will: • Track pickers – so picking staff receive automated confirmation when they are in the correct warehouse location to make their pick • Prompt pickers – tell picking staff the stock number or sell by date of the required item • Provide instant product and order information at pick-point through barcode scanning technology • Be able to cope with less than one pallet shipments (basic systems struggle here) • Monitor KPIs in real time. Common KPIs include: minimum stock holding alerts and discrepancy reports (highlighting expected versus actual deliveries from production) • Integrate with (possibly third party) logistics and transport systems • Support compliance with SSCC pallet handling

Supported by:

3f dele or 2 on a g ll Book now or miss your chance to Dele ate plac es ga learn from experts and engage with likeÂŁ395 te fee: minded executives to gain a better + S Man ubscrib VAt ufac ers to understanding of how automation t u T add itionrer rece he can benefit your business. al 20 ive a n % off

AutomAte uK 26 February 2013, London

Hear From Leading manuFacturers incLuding:

Unleashing the power of automation in UK manufacturing

Simon Tween,

Plant Maintenance Coordinator, CNH Uk Ltd

Mark Ager,

Group CEO, Stage Technologies

Jonathan Short, Managing Director, ECO Plastics Ltd