www.themanufacturer.com | June 2013 | Vol 16 Issue 5
Workforce and Skills
Tools for skills: Making it easy to build the skills manufacturing needs Labour of love: Regulations for flexible working in 2013
Interview Sarah Brown
CEO, Pai Skincare
Finance & Professional Services Overdue: Will new regs to reduce late payments work? Trunk road to success: BGF invests in Trunki
IT in Manufacturing Your shop window: Best practice website design strategies for manufacturers
Full metal jacket: BAE Systemsâ€™ F-35 machine shop Cool IT: UK-made tech to transform data centre management
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Let’s raise the average Manufacturing confidence for the next quarter is up, the CBI’s latest industrial trends survey shows. More demand is anticipated “despite a recent history of disappointed expectations” the business body’s director of economics said. This is good news given the generally struggling profile of British manufacturing since its brief growth spurt early last year. But this short term expression of confidence needs to prove itself to be robust and widespread in order to make a real difference to economic prospects. While some sectors, such as the subject of our lead story – oil & gas (p24) – have strong market forces, pulling demand for manufactured goods, others have a harder job managing risk. But across sectors, manufacturing seems to be increasingly polarised between examples of companies who innovate relentlessly and invest to ensure opportunities can be seized, and a surly majority who wait endlessly for ‘a level playing field’ to be created, making competition easier for them. This perceived attitude spurred some good debate at the fourth annual National Manufacturing Debate, where leaders from industry and academia were challenged to consider how a 20% manufacturing contribution to GDP by 2020 might be achieved (p42). While most felt that a consistent national industrial strategy was essential, others felt that too much strategising causes a distraction from the higher growth priority of getting better business expertise into companies, especially SMEs. If mature operational strategy were more widespread, goes the argument, UK manufacturing might avoid being questioned as commercially naive (p18). While this suggestion may seem harsh, it was echoed in a recent evidence session for the Associate Parliamentary Manufacturing Group’s inquiry into Industrial Culture and Competitiveness (p7). On being asked to define British industrial culture with a single phrase, the founder of a research group working internationally with manufacturers for service innovation said she felt British manufacturing was captured – particularly at an SME level – by the motto “play it safe”. It is an approach which sits alongside the mantra “make do and mend”, which commentators in the automation and industrial equipment markets complain holds UK manufacturers back from investing in competitive technologies. And one which fosters a reluctance to seek out new ways to finance growth initiatives in a credit squeeze – our Finance 2013 report, Realising and Releasing Asset Value, shows that 80% of business lending in the UK is still provided by banks, suggesting companies are sticking to the sources they know, despite a recent proliferation of alternative financing options, and the diminishing attractiveness of bank lending for certain growth requirements.
Cover image: Concerns about oil reserves barely register with the UK’s booming oil & gas supply chain (p24)
UK manufacturing has some trailblazing success stories, from start ups to large multinationals, but as Lord Heseltine pointed out at EEF’s National Manufacturing Conference in March “we will not be judged by our examples of excellence. The global economy will judge us on our average”. Jane Gray, Editor
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The team Editorial
Nick Hussey, Managing Director
IT Editor Malcolm Wheatley
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. email@example.com
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Contents 06 News and regular columns A summary of manufacturing news and events along with commentary on industrial research and policy
17 The Naked Engineer
The Tornado and the Pox – a busy day at trouble-prone Hemlock Engineering
19 Lean on me
Lean practitioners need to get comfortable with the devil they do not know says Roberto Priolo, editor of Lean Management Journal
24 Lead The second coming: Hype over renewable and low carbon energy technologies is a distraction from a new boom in British oil & gas finds Will Stirling as he visits Aberdeen – the black gold Klondike town
32 Interview Sense and sensitivity: Sarah Brown, founder of London-based manufacturer Pai Skincare tells Jane Gray how she taught herself cosmetic chemistry before tackling the finance and strategy challenges which face manufacturing startups in the UK
36 60 second interview
Ian Dearn, head of manufacturing at Mondolez UK tells James Pozzi about winning investment for the UK manufacture of the world’s favourite biscuit - Oreo
Pillar features 40 Manufacturing Leadership
Labour of love: Are regulations for employee rights and benefits welcome or burdensome to UK employers? James Pozzi reports
48 Workforce and Skills
Tools for skills: Semta explains a new project to make skills strategy formation easier for UK manufacturers and their supply chains
57 Employee of the Month: Rhys Long, Trainee Production Engineer, GE Oil & Gas 60 Finance and Professional Services
Overdue: March brought new regulations on payment terms which are designed to reduce the level of late payments in the UK. What do these regulations involve and will they work?
62 Trunk road to success: Why the Business Growth Fund has invested in Trunki’s future
70 IT in Manufacturing
Your shop window: Is investing in better website design an optional extra or compeititve differentiator in the manufacturing sector? Malcolm Wheatley explores what creates value
82 Manufacturing Technologies
Full metal jacket: Will Stirling storyboards the manufacturing process at BAE Systems’ unique machine shop for the F-35 Joint Strike Fighter
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 visits: month
50 BAE Systems ES, Rochester 66 Amtico 86 JLR, Solihull 88 Last word
Overhyped yet underappreciated – Jane Gray explores the diverging forces which could tear up the UK’s chance of capitalising on 3D printing technologies
OUTBOUND REPORT FINANCE 2013 Realising & Releasing Asset Value How can manufacturers free up capital for investment in a credit squeeze? Contributors assess the alternative finance options with special focus given to asset finance offerings The final instalment in ’s Finance 2013 report series will address Financing Exports and will be published in July Contact Sarah Hough (email@example.com) for information on advertising and contribution opportunities
Manufacturing MANUFACTURING SUPPORT The Manufacturing Advisory Service published its annual report, showing that it has helped more than 9,000 manufacturing firms in England generate nearly £620m of extra turnover in the last 15-months. MAS, a government funded agency designed to support growth and competitiveness in manufacturing SMEs across England, published its 2013 report at a factory visit to Marshall Amplification in Milton Keynes. The event was attended by business and energy minister Michael Fallon who congratulated the organisation on safeguarding thousands of industry jobs through its work. MAS says it plans to help create 7,200 new manufacturing jobs in England over the next 12 months.
MANUFACTURING CONFIDENCE The industry Apprentice Council
APPRENTICESHIPS The Industry Apprentice Council submitted its response to the Richard Review of Apprenticeships. The council comprises 18 apprentices aged 16-24. They are all employed by manufacturing and engineering companies in the UK. The council was convened by awarding bodies EAL and IMI and is designed to ensure a focused trainee voice is added to the development of apprenticeship frameworks, quality standards and funding. In May, the council gave its response to the 2012 Richard Review, and other 2012 reviews of apprenticeships. The council said it was surprised by some of the findings but appreciated the need to improve the visibility of apprenticeships in most schools and to raise the general perception of apprenticeship career destinations in education, and among learners and parents. The council called for some government support, matched by employers, to allow greater and better coordinated national activity from apprentices themselves, in promoting the training pathway. It submitted its response to the Richard Review, and recommendations for action, at a parliamentary reception attended by skills minister Matthew Hancock.
Manufacturers expect strong output growth in the next three months, according to the CBI’s latest monthly Industrial Trends Survey of 404 companies. Twelve of the 16 sub-sectors represented told the CBI that they anticipate a pick-up in the next three months with the food, drink & tobacco, and mechanical engineering sectors likely to be the key contributors to growth. The CBI’s director of economics, Stephen Gifford, said: “Manufacturers remain optimistic that demand will pick up in the next three months, despite a recent history of disappointed expectations. This tallies with what we’re hearing from some businesses about confidence returning.”
COMPANY ANNIVERSARY Birmingham-based transit packaging company Nicklin celebrated 100 years of trading. The family-owned firm says it will mark its centenary with a substantial programme of investment covering IT, automation, machinery and new staff in addition to the launch of a revised website incorporating a new e-commerce platform. Nicklin operates from a 9200 square metre site and employs around 70 staff. It experienced record growth and turnover in 2012.
FINANCE The CBI published Ripe for the Picking: A guide to alternative sources of finance. The report details a range of non-bank finance options for companies in need of growth capital and working capital. Suggested sources include asset-based lending, equity investment and peer-to-peer lending. The CBI published the report in response to continued complaint from business that access to finance is limited in the post-financial crisis world, and in an attempt to stimulate economic growth which remains stubbornly stagnant. Ripe for the picking, highlights research showing that high-growth small and medium-sized businesses could be worth an additional £20 billion to the economy by 2020. Produced in partnership with GE Capital, the report also shows that SMEs plan to spend £51 billion over the next 12 months, but will need the right funding to realise their potential. Katja Hall, CBI chief policy director, said: “Banks will continue to be a vital source of finance but it’s not a one-size-fits-all solution, and we’re encouraging growing firms to open their eyes to the broad range of funding options on the market.” UK banks are the source of nearly 80% of all credit to growing businesses, according to the CBI. See ’s outbound report Finance 2013: Realising and releasing asset value, for more on this report and evolving finance options for manufacturers.
News MANUFACTURING TECHNOLOGIES The Nuclear Advanced Manufacturing Research Centre near Rotherham received delivery of Britain’s biggest electron bean welding chamber. The 200-cubic metre electron beam welding chamber is designed for researching metal joining techniques with ultra-high precision. It is required for applications on super-large components like pressure vessels for nuclear power plants. he machine will be commissioned over the summer and autumn, after which it will be used for both advanced joining research and to investigate its use in additive manufacturing of large components. “The electron beam system can join steel components with widths of over 100mm, with a very small heat-affected zone and low heat input, resulting in much lower deformation and residual stresses,” said Nuclear AMRC project manager Bernd Baufeld. “It can be
more cost-effective and timesaving, and can also be used with high refractive materials such as titanium and zirconium.”
Delivering the Pro-Beam K2000 electron beam welding chamber to the Nuclear Advanced Manufacturing Research Centre
MANUFACTURING COMPETITIVENESS The Associate Party Manufacturing Group held the second evidence session in its inquiry into Industrial Culture and Competitiveness in Britain. The session included insight from Dr Seena Rejal, CEO of digital sourcing company, 3D Industries (p88) and Geke van Dijk, co-founder of STBY, a service innovation research organisation. The session was designed to build understanding of UK attitudes toward digital fabrication technologies and connections between parallel manufacturing and technology industries. Evidence also discussed the development of user centred industrial support networks and policy. The APMG inquiry is being led by the Conservative’s Chris White MP and Labour’s Jonathan Reynolds MP. The Manufacturer is acting as media partner and the inquiry’s findings will be published this Autumn.
AUTOMOTIVE Nissan said it wants to recall 841,000 vehicles worldwide due to a fault with a steering wheel. In the UK the recall will affect 133,869 models of the Nissan Micra, built at the company’s Sunderland plant between 2002 and 2006. In a statement, the automotive manufacturer said that a bolt used in the steering wheel was not screwed on properly. It assured customers however, that there was no danger of sudden failure. Nissan said it will fix the fault either by tightening the bolts or replacing the steering wheel entirely. Earlier in May, Nissan recalled 500,000 vehicles globally over a defect in passenger airbags.
Indra Nooyi of Pepsico at the World Economic Forum
WOMEN IN MANUFACTURING Forbes published it list The World’s 100 Most Powerful Women. Among heads of state, philanthropists, celebrities and business leaders in other sectors, women in manufacturing and technology companies made a good showing - though no female engineers or manufacturing business leaders from Britain made the list.The highest ranking female leader of a manufacturing company to be recognised was Indra Nooyi, CEO of PepsiCo. Among new comers to the list was Maryllin Hewson, CEO of aerospace and defence giant Lockheed Martin.
EXPORTS EMSc UK was named UK Trade and Investment exporter of the year 2013. The company was nominated for the award by the Yorkshire branch of UKTI thanks to continued global success throughout 2012 in a number of international markets, including Australia, Cyprus, Spain, Malta, Greece, South Africa and the United Arab Emirates. A statement from EMSc said it attributed its export success to to the 100% British engineering behind its products. “Not only are all our products manufactured in the UK, but all component parts are sourced from UK suppliers,” said a spokesperson.
Manufacturing News ENERGY
Editor’s choice Our favourite online features and blogs in May:
Simulia looks for future in historic Vienna James Pozzi reports on manufacturing case studies presented at Dassault Systèms’ European conference Opinion from attendees of the National Manufacturing Debate Industry leaders share their responses to the 4th annual debate, hosted by Cranfield University Q&A with the makers of the Queen’s chocolate carriage Mars Chocolate UK made a 7kg replica of the Irish State Coach in honour of the Queen’s visit to the factory in April Improved productivity: 5 things to focus on Waste elimination according to Jeremy Harford, managing director of improvement specialist Mestec Tesco’s view of the Bangladesh garment industry Group commericial director of Tesco, Kevin Grace’s response to the Dhaka factory collapse Where now for the West Global heads of trade and receivables finance at HSBC met in London during UKTI’s Export Week. Jane Gray reports their outlook on shifting power in global trade networks www.themanufacturer.com
A commemorative McLaren 50 12C spider
COMPANY ANNIVERSARY High end automotive manufacturer McLaren announced it will produce a limited run of 100 commemorative cars to mark the company’s 50th birthday. The special McLaren 12C is designed to celebrate 50 years of race winning technology from McLaren. Production of the limited edition will be no more than 100 globally and will be split between 50 12C and 50 12C spider derivatives. The limited edition vehicles will feature anniversary styling and specification enhancements and will be made by McLaren Special Operations which delivers various bespoke projects for the automotive group. The McLaren Automotive design team were also closely involved in the development of the two models. Official celebrations for the 50 year anniversary will take place in September.
The supersonic Bloodhound car will have a Rolls-Royce Engine
ATION & SKILLS Bloodhound announced that Rolls-Royce will contribute a EJ200 jet engine to its supersonic car. The engine will be used in conjunction with a custom designed hybrid rocket to propel the Bloodhound car to over 1,000 mph as it attempts to set a new land speed record next year. The Bloodhound SSC programme is designed to showcase UK engineering excellence and inspire young talent to enter industry. Colin Smith, director of engineering and technology at Rolls-Royce, said: “Cutting edge engineering keeps Rolls-Royce, and the UK, at the forefront of global business. We understand the fundamental importance of inspiring young people about STEM and know that more needs to be done. Sponsoring Bloodhound gives us an opportunity to showcase world-class British engineering and invest in our future.” Rolls-Royce will also provide financial and technical support for the project.
The Government provided details on a compensation package for energyintensive companies in the UK. Eligible firms are able to apply for compensation to offset their high energy costs from June 3. The compensation is designed to reduce the impact of energy and climate change policies on the cost of electricity for industries which are essential to the UK’s competitive profile and industrial productivity but which require large amounts of energy. Business and energy minister Michael Fallon said: “This compensation package will support firms, protect jobs and help reduce the risk of industries leaving our shores. Energy intensive industries also provide many of the components for low carbon goods. For example, steel is vital for the manufacture of wind turbines”. Government also plans to develop a compensation scheme to address the indirect costs of the Carbon Price Support mechanism, subject to state aid clearance.
FUNDING The Technology Strategy Board received an increased annual budget of £440m. This represents an increase of £50m on last year and Universities and Science Minister David Willetts said it will help bridge the innovation ‘valley of death’ for more UK companies than ever before enabling them to “turn their ideas into reality”. Sectors standing to benefit from government’s boosted investment in the TSB include energy, the built environment, high-value manufacturing, and healthcare. Over 60% of the funding will be delivered to SMEs and funding allocations will also target companies with the potential to boost UK exports. Research shows that for every £1 invested by government through the TSB, £7 is generated for the British economy.
Manufacturing News ORDERS JCB won a £27 million order for more than 800 machines. The order was placed by the UK rental company A-Plant and will give a big boost to production at the firm’s UK factories. JCB CEO Alan Blake said “This is the biggest volume deal of the year for JCB from a UK customer and we are absolutely delighted that A-Plant has ordered such a significant number of machines. It is a huge vote of confidence not only in the quality, reliability and fuel efficiency of JCB’s products, but also in the UK hire market.”
JCB CEO Alan Blake pictured with one of the 800 machines ordered by A-Plant
CONTRACT WIN British engine manufacturer Rolls-Royce was awarded a new £22.5 million contract extension for repair and overhaul of T56 engines on US Navy aircraft. The contract includes repair of the T56 Series III engine modules to support fielded P-3 and derivative aircraft, and work will be carried out at the company’s engine plant in Oakland, California. In addition, the T56-powered C-130 and C-2 aircraft are also included as part of the deal. Rolls-Royce has contracts in place with all US military branches and the latest deal represents further activity in a sector that provides hundreds of millions in revenue for the company.
SKILLS Sector skills council Semta launched a new Composite Engineering Apprenticeship Framework. The fresh framework coincided with the appointment of Graham Mulholland as chair of Semta’s employer-led Composite Sector Strategy Group. He replaced outgoing chairman Ken Wappat. Mr Mulholland is managing director of epm:technology, a Derbyshire firm producing carbon fibre components for high performance engines and Formula One Motorsport.The Composite Engineering Apprenticeship Framework was developed through working groups of employers and stakeholders to agree the content and level of the National Occupational Standards for their industry. New recruits to manufacturing lack work ethic found a survey conducted by The Institution of Mechanical Engineers. The survey discovered almost 40% of manufacturing firms feel apprentices, graduates and new recruits don’t have the work ethic to succeed in industry. 1,000 British manufacturers took part in the survey which formed part of the institution’s Manufacturing a Successful Economy 2013 report. It found 57% also believe apprentices, graduates and new recruits are lacking in practical skills. 42% felt they lacked communication skills, while in terms of relevant subjects, 45% of the manufacturers polled said that design skills posed an issue with young recruits. 36% were dissatisfied with the maths and science abilities of their recruits. In addition to highlighting quality issues in the recruitment pool for industry - and employment in general - the poll showed that many employers (60%) are finding it difficult to find applicants to their vacancies, despite high unemployment figures.
INVESTMENT Devon-based British Falcon Plastics invested £350,000 in a new thermoforming machine using backing from Lloyds TSB Commercial Finance. The investment has brought increased output to the Paignton business, which produces vacuum formed plastic packaging for major UK retailers, food suppliers and pharmaceutical manufacturers. The company is now looking to increase its 27-strong workforce. Commenting on the investment, managing director David Newton said: “The new machine will allow us to increase profits and invest back into the business. Lloyds TSB Commercial Finance has been very helpful in its approach to my business needs and having a client manager who is there to answer any questions has been very useful.”
EXPORTS EMSc UK was named UK Trade and Investment exporter of the year 2013. The company was nominated for the award by the Yorkshire branch of UKTI thanks to continued global success throughout 2012 in a number of international markets, including Australia, Cyprus, Spain, Malta, Greece, South Africa and the United Arab Emirates. A statement from EMSc said it attributed its export success to to the 100% British engineering behind its products. “Not only are all our products manufactured in the UK, but all component parts are sourced from UK suppliers,” said a spokesperson.
David Newton (left), British Falcon Plastics MD with representatives from Lloyds bank who provided finance for its recent technology investment
YOUR COMPLETE OFFICE IN THE CLOUD. Pushing the standards of automotive excellence demands a constantly connected workforce empowered by a reliable communications tool. Thatâ€™s why Aston Martin is on Offce 365. Its employees around the world can exchange information more effciently through Lync and Outlook with support across devices. With Offce 365, Aston Martin is celebrating its centenary year at the forefront of advanced technology.
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Manufacturing News HEALTH & SAFET Y NTG (Papermill) was fined £10,000 by the Health and Safety Executive after a worker suffered serious injuries in a fall. The incident took place at the Lancashire tissue manufacturer in 2009. The employee involved, who asked not to be named, was cleaning machinery during a twoweek factory shutdown when he tried to cross a mezzanine floor, six metres above the ground and the metal grating gave way. The 39 year old suffered bruising and friction burns to his chest and along his arms. He also bruised his jaw.
Datesfor yourdiary June
The IET hosts a visit to the National Composites Centre in Bristol for a presentation and site tour. The facility was set up as part of the UK Government’s Composites Strategy, bringing together businesses and academia to develop new technologies for the design of and manufacture of high quality composite products. Go to www.theiet.org/events/2013 to register for the free event.
Oliver Wight and Oracle host a free event for manufacturers at the Blythe Valley Park, Solihull, focused on Integrated Business Planning and it how can be used to unlock a company’s full financial potential. Phone +44 (0)1452 397209 for details.
The Paris Air Show takes place at Le Bourget, France. This year marks the 50th anniversary of the biennial aerospace exhibition. In 2011 the show attracted over 150,000 trade visitors and over 2100 exhibitors. The trade event is a hub for the entire aerospace supply chain including OEMs, subcontractors and production equipment suppliers. For more information and booking go to: www.paris-air-show.com
Innovation with Impact takes place in Birmingham. This annual stakeholder event for the chemicals industry includes case studies from companies which have successfully secured innovation funding. Q&A sessions with industry experts will also feature. For enquiries contact Maureen Laughton at Chemistry Innovation (Maureen.firstname.lastname@example.org) on 01928 515662.
July A new force in additive manufacturing: (l-r) Mike Kelly, Bruno Le Razer and Ian Campbell, the founders of i2M
MANUFACUTIRNG STARTUP Three engineers from Warwick revealed a plan to set up a world class centre for additive manufacturing in the West Midlands. Ian Campbell, Mike Kelly and Dr Bruno Le Razer all left senior positions in industry to launch Innovate 2 Make (i2M), a company dedicated to designing and manufacturing the next generation of components for the aerospace, automotive, motorsport and medical sectors. The trio has invested £750,000 into premises in Leamington Spa and the acquired an EOS M280 400 additive manufacturing machine. There are plans to invest in another laser machine this year and to create more jobs at the company. i2M is backed by the Manufacturing Advisory Service which is now supporting talks with blue chip clients about the possibility of re-designing critical components for cost effective additive manufacture.
Cranfield University hosts an Operations Excellence Open Day for prospective students on its popular MSc course. The day will include case studies and insight from former students including representatives from Rolls-Royce and Weetabix. The Operations Excellence MSc is a two year part-time masters degree course designed for industry professionals. More information at: www.cranfield.ac.uk
The Manufacturing and Engineering Expo 2013 takes place at the Historic Dockyard in Chatham, Kent, and allows manufacturers to assess and compare the latest products and services for engineering, electronics & manufacturing. Email email@example.com to book or visit www.manufacturingandengineeringexpo.co.uk
The Flexible Workforce Conference 2013 is hosted by The Manufacturer at the Hilton Metropole Hotel at the NEC in Birmingham. Now in its second year, the conference will provide the opportunity for manufacturing leaders to come together and discuss employee engagement and empowerment, workforce planning and strategy and maintaining a talent pipeline to safeguard the future workforce. Running alongside this conference is The Manufacturer’s first Energy Conference, providing practical ideas and strategies to design, develop and implement an effective energy strategy. To register and for more information, visit www.themanufacturer.com/events
The inaugural Global Intelligent Systems (GIS) event takes place in central London. The event aims to show the potential scope of markets for autonomous and intelligent systems - beyond military applications. The global civil market for autonomous and intelligent systems has an estimated value of £265bn and it is a technology area where the UK is strong according to this event’s organisers, trade association ADS and Farnborough International Limited. For information and booking go to: www.gisfarnborough.com
For all of the latest news in the manufacturing world visit www.themanufacturer.com
Future Factory Series: Energy Conference
Future Factory Series: Flexible Workforce Conference
16th July 2013, Hilton Metropole Hotel, Birmingham (NEC)
The Manufacturersâ€™ Energy Conference 2013 will give you practical ideas and strategies to design, develop and implement an effective energy strategy. Through case studies and expert knowledge the conference will show the steps needed to create your own energy management route map, the core ideas for reducing energy consumption, how to improve their effectiveness in energy procurement and provide insight into energy generation technology.
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16th July 2013, Hilton Metropole Hotel, Birmingham (NEC)
The Flexible Workforce conference will provide a practical opportunity for manufacturers to learn from industry experts, academics and government officials to gain insight into manufacturing best practice. Covering topics such as annualised hours and human capital management this meeting will discuss how companies can maximise effectiveness by ensuring their staffing plans match their needs, ultimately ensuring a company gains maximum ROI from their human capital.
Future Factory Series: Exporting Excellence 16th October 2013, London
Regardless of whether you currently export, plan to export your products and services or are simply looking for the latest information, advice and best practice on exporting around the world, your attendance at this event is essential. This event is aimed at those responsible for seeking company growth and market development. The conference will help managing directors, commercial leaders and export champions explore and validate potential export opportunities and understand the implication of regulation, cultural, financial and logistical challenges associated with given countries.
Future Factory Series: Innovation in Manufacturing
Porsche Transformation Programme
16th October 2013, London
Innovation is critical to the success, sustainability and growth of any organisation. The ability to create innovative products now while developing desirable products for the future is crucial to any organisation seeking growth and sustainability. This one-day conference unites the research and development community with the manufacturing industry to provide delegates with the knowledge and expertise they need to nurture innovation in the workplace.
16th & 17th October 2013, Porsche, Leipzig, Germany
This unique two-day residential course delivered by Porsche executives provides a unique learning experience for plant managers, managing directors and similar individuals who can instigate real change within an organisation. Created exclusively by Porsche Consulting for the LMJ, its careful selected series of modules delivered in classroom environments, exclusive facilitated tours of assembly & logistical operations, with simulation activity and access to senior Porsche personal.
The Manufacturer and LMJ events feature key decision-makers, professionals and academics in the field. If you would like to get involved and have a unique story to tell - I would love to hear from you. Jon Tudor Head of Events, The Manufacturer Email: firstname.lastname@example.org
ManufacturingAppointments UK Appointments Mike Tynan Nuclear AMRC
Former CEO for Westinghouse in the UK Mike Tynan stepped down from his post and was appointed as chief executive of the Nuclear AMRC by the University of Sheffield. Under Mike’s leadership, Westinghouse firmly established its UK nuclear new build ambitions, built up a nuclear decommissioning and clean-up business and implemented an historic
deal with the Nuclear Decommissioning Authority to take on a 150 year lease for the Springfields Nuclear Fuel Manufacturing Facility. His move to the Nuclear AMRC was welcomed by Business and Energy Minister Michael Fallon, who said: “Mike Tynan has a huge amount of experience in the UK nuclear industry and brings a real depth of knowledge to the role.”
Bryan Jackson Unipart
Unipart appointed Bryan Jackson, CBE as a non-executive director of Unipart Group. Mr Jackson has been a director of Unipart Manufacturing Group since 2005, taking on
the role of deputy chairman in 2007 after a long and successful career with Ford and Toyota Motor Manufacturing UK.
Dr. David Landsman OBE Tata
Tata appointed Dr. David Landsman OBE as director of Tata, replacing Syed Anwar Hasan after his retirement. Mr Landsman joins the group after a career in the British diplomatic service, where he served both domestically and abroad. His new role
will include overseeing operations at an organisation providing support to 19 Tata companies across the UK. Among them include Tata Steel; Jaguar Land Rover; TCS; Tata Global Beverages (including Tetley Tea); Tata Chemicals and Taj Hotels.
Craig Rollason Knapp UK
Knapp UK appointed Craig Rollason as managing director, taking the place of David James, who has been given the new role of regional director for the UK, Sweden, Norway
and Finland. The company has experienced high growth in recent years, and now employs over 100 people in the UK.
Chartered Institute of Logistics & Transport (CILT) welcomed six members to its board – three of which have already been members and three entirely new people. The new people are Alan Jones FCILT, Robbie Whitfield FCILT MBE and Christopher Hutchinson FCILT, along with Martin Evans MILT, David Grahamslaw FCILT and the return of former board member Bernard Auton FCILT. The organisation plays an extremely important role in making key decisions relating to the future of the UK’s transport infrastructure (including HS2 and a potential future London airport). Patrick Kniveton became president of the Institution of Mechanical Engineers. Mr Kniveton is the 128th president of the growing professional body and is also head of engineering improvement at Rolls-Royce Marine Power. On taking up his appointment Kniveton said he was proud to join the ranks of past presidents including George Stephenson, Joseph Whitworth and Sir Harry Ricardo. For his own tenure in the post, he said: “I want my theme for my presidency to be about celebrating not just the engineers of the past, but to celebrate the engineers that are making a real difference to people’s lives today and in the future.”
Spirax Sarco announced the appointment of Sheldon Banks as UK sales director, replacing Marc Eggermont, who is relocating to Belgium as a general manager. Sheldon joins Spirax Sarco from Parker Hannifin Corporation. Nick Anderson, divisional director, EMEA, at Spirax Sarco, says: “Sheldon brings a wealth of experience in sales and management and I am certain that he will add great contributions to the UK & ROI Sales business and to the Group.” Bottling company Cobecvo appointed Karen Hemphill as its new head of HR. Previously head of employee relations at AstraZeneca, the experience that Ms Hemphill will bring to Cobevco and sister company Quinn Glass is regarded by managing director Adrian Curry as critical for the company’s competitiveness: “As the company continues to expand, it’s important to recruit first class individuals.” Siemens UK appointed Paul Fisher as managing director of its low and medium voltage electronics manufacturing division. Based in Camberley, Surrey Mr Fisher will also lead the Siemens subsidiary Electrium, which specialises in low-voltage products. Fisher moved to Siemens from Contactum, another electronics manufacturer, where he was also managing director. He has previous career experience with Eaton, Weidmuller and Moeller.
To notify The Manufacturer of your company’s appointments, please contact James Pozzi at: email@example.com or: 0207 401 6033
UNLOCK THE POTENTIAL IN YOUR PEOPLE When you’ve built your name on custom-building every order, you need business solutions that help you stay nimble. That’s why Dell chose Microsoft Dynamics to streamline its manufacturing process into a single global system. Now, Executive Director of Manufacturing IT Matt Griffiths has empowered Dell’s people to build products better, smarter and faster, reducing Dell’s IT footprint by 75% and IT Cost of Goods Sold by 60%. With Microsoft Dynamics, Dell can maintain the agility needed to make sure every customer gets the unique, personalised machine they deserve. microsoft.com/uk/dynamics
Are you doing enough? Dr Tony Whitehead, IET director of policy challenges engineering employers.
here is much to do it? There are stated, claimed certainly many actions and imagined that could and are being about the taken in schools, and condition of education in further and higher and skills in the UK. education, to improve Endless reports, careers advice. The IET projections and and the engineering campaigns are produced institutions are playing on the matter. their role in promoting Evidence suggests the profession to that the UK is suffering students, parents and from engineering skills the government. But shortages and that are employers doing these will get worse as their bit? the workforce There are continues to undoubtedly age and huge some additional very good The IET engineering examples of survey indicates resources manufacturing a large minority are needed companies of companies for new getting who do nothing infrastructure involved in [on skills and and energy local schools education] projects. and working The focus with their local often falls on colleges. the education But the IET system and the survey also pipeline of recruitment, indicates a large from primary to postminority of companies graduate and apprentice. who do nothing. We have heard the They know they will questions before: how have difficulty recruiting do you encourage more the engineers they need young people to take an but expect someone else interest in science and will sort it out for them. technology? Why do Would they do the same most girls loose interest for the materials, in engineering and finance and machinery technology in they need? secondary school? There is an old adage The Institution that the only difference of Engineering and between you and your Technology (IET) is due competitor is the people to publish its annual you employ. Are you skills survey at the end of doing enough now to June, and I’m sure that it make sure that you will again cover all of will have the engineers the above. and technicians your So what needs to company will need in change and who needs the future?
Terry Scuoler, chief executive of EEF sets out the manufacturing sector’s stall in the tax avoidance debate and urges government not to forget the need for growth when contemplating action.
e must recognise that there are areas of the corporate and international tax system that need urgent attention. Out-of-date rules governing international transactions seem poorly suited to global, internet-based commerce and high value digital networks. While much of the reform needed does not obviously target manufacturing companies, the tone of the debate around tax avoidance, the solutions being proposed and the absence of a clear public position from the government are cause for concern. Possible collateral damage on investment and trade intensive sectors such as ours could not come at a worse time. Manufacturing investment was still 19% below its prerecession peak in 2012 q4. Tax policies are under the direct control of government and it can use this power positively – as demonstrated in repeated cuts to the headline rate of corporation tax. Other tax cuts to encourage international The plethora investment have also been signalled and this is critical for our sector. 46% of of possible investment in UK manufacturing came responses to from foreign-owned companies in 2010 the issue of – over twice as much as in Germany tax avoidance and Italy, and well ahead of Spain and currently France. In 2011 investment by foreignbeing aired are owned manufacturing companies undermining the Coalition’s exceeded that from UK-owned broader tax companies, totalling £8.8 billion. reforms and The plethora of possible responses impacting on to the issue of tax avoidance currently confidence being aired – though not generally by the government – are undermining the Coalition’s broader tax reforms and impacting on confidence. Proposals such as trying to set kitemarks on a ‘fair share’ of tax, or introducing minimum tax requirements, even for firms rolling forward large losses, are unhelpful. We offer government two challenges in addressing the tax avoidance debate. Firstly, the response to concerns about corporate tax avoidance must not undermine government’s expressed objective of delivering the most competitive tax system in the G20. Secondly, government needs to actively enter the public debate, setting out the areas where consensus shows there is a clear need for reform and ruling out areas that should be excluded.The tax reform process must be structured and include opportunities for business consultation. Finally however, whatever changes are decided on, they must deliver greater public confidence in the corporate tax system and enhance the image of business.
Thenaked engineer: stripping industry issues bare
The Tornado and the pox A day in the life of the average manufacturing SME: building blunders, cursing customers and workforce woes – the consummate MD takes them in his stride.
ttila the PA’s dulcet tones cut through my hangover like a chainsaw through balsa as I try unsuccessfully to manoeuvre past her lair. “Bob’s waiting to see you” she yelled. Still marinating in the end of last night’s revelry in Cavendish’s so had to take a taxi into work. Iranian taxi driver – lovely chap. Used to be a rocket scientist in Iran but they won’t let him practise here - obviously. Had been watching too many Star Wars movies for work though, and used The Force to drive and Zen to navigate. Bob the Builder had arrived just after Luke Skywalker pulled away barely missing Attila. He was in to sort a few minor snags in our new, very 21st century, engineering labs. A ceiling had fallen onto 35 highly paid and very pissed off boffos and a sewerage malfunction had turned the car park into something resembling the Ganges. Parker (Engineering Director) was waiting to pounce on me, hangover or no hangover. He had the look of a man who knows something’s gone really tits up but whose mind is flailing around inside his head trying to put a positive spin on
it. It wasn’t an unusual visage for him. “Just had a call from Flight Systems at Farnborough. Fuel pump failure on a GR4. Just dropped the RAF’s most senior female pilot into the Wash. She’s a bloody Group Captain and she’s looking for someone’s head!” “Probably messed up her hair” I said, not doing much to quell Parker’s angst. “Best send her to one of those new NHS minor injuries clinics for a bad hair appointment. That’s about all they’re sodding good for”. Janice (HR Director) gave me a scathing look as she walked in on the fagend of the conversation. “They want a director up there today to take the heat” Parker replied, looking me rather unnervingly in the eye. “Bit of a personnel problem” interrupted Janice. Normally a ghastly precursor of doom, her words came as a pleasant distraction after Parker’s bombshell…..for a few seconds.
Statutory Sick Pay only nowadays. Sickness absence dropped like snot from a two year old when we brought that one in
“How so?” Eighty five staff off with chicken pox, including the MD of Flight Systems and the Greek’s got mumps. “The pox!? There’s another fortune in sick pay down the toilet” I said, although I was hugely heartened by Jimmy (FD) catching mumps at 42 with the various undignified swelling gland implications that carried. “We’re fine on that front” Janice replied. “We stopped paying contractual sick pay over two years ago. One of your better HR policies,” she said without the slightest tone of condescension. “Statutory Sick Pay only nowadays. Sickness absence dropped like snot from a two year old when we brought that one in. No more duvet days. The Civil Service could learn a bit from us on that front” she added thoughtfully. Cheered by saving a few shekels on salaries this month, as well as the pain Jimmy was in, I yelled through the wall at Attila “Get me a ticket to Farnborough. I’ve got some hair styling to do”. Any similarity of characters to persons living or dead is completely intentional.
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Production lines 3 new messages
Letters to the editor
Steve Fletcher, Director of Strategy, Chemistry Innovation
t a recent event, a fellow delegate told me that funding applications for new innovations were not worth the time. I was disappointed to hear this, and wanted to encourage others not to dismiss applications. Innovation is critical to the manufacturing industry and funding can and has helped companies with potentially important ideas and offerings make them a commercial reality. Funding calls are carefully designed – in consultation with industry - to identify pressing issues and provide support to the innovations which can best address them. In the chemicals industry – where I work – funding is critical for bringing together different teams to
address problems collaboratively. As innovations become increasingly complex, we need projects which involve not just chemists, but biologists, computational experts, materials scientists – and of course those with commercial expertise. Of course not every idea gets funded, but many great ones do, and the evidence is there to prove it. Those in doubt should attend Innovation with Impact (http://bit.ly/10OB8hm) at the end of June, where some of the UK’s most exciting chemicals businesses will be discussing how they have secured funding and support for their innovations and the impact this has had – both for their individual companies, and for their wider industry.
Adrian Maxwell, CEO, Fracino
n April 6 the standard rate of statutory sick pay increased from £85.85 to £86.70 per week. This is just another add-on cost to a businesses like ours. We employ 40 people and will be taking on another half a dozen staff before the end of the year. It’s a very tough and highly competitive climate out there and running and growing a business, which demands ongoing investment to sustain innovation, is expensive – so all additional non-core cost increases are unwelcome, especially if the decision to increase those costs is made for you by government. Our policy at Fracino is to only pay statutory sick pay, so if any team members are off ill, it costs them dearly. My ethos is that you have to work to survive. Because we only pay statutory sick pay our absenteeism is consistently negligible. For more on workforce regulation and employer approaches to providing flexible working, turn to p40.
Simon Shaw, Head of Corporate Customer Platforms, SAS Autosystemtechnik Verwaltungs GmbH
t the National Manufacturing Debate at Cranfield University (p42) I was intrigued by statistics from the RAEng that the UK needs another 50,000 graduate engineers by 2015 and there are only about 23,000 in the university pipeline. But this the shortfall in the number of engineers needed by the economy, as calculated by RAEng, assumes that all of those studying will remain in the UK. As Chinese and German companies pay higher salaries and are also looking for engineers, so there is a danger that we could also face a ‘brain drain’ to add to current skills sourcing problems. Anecdotally, three of my former colleagues have moved to China for work on much larger salaries. In 1991, Siemens in Germany couldn’t get enough engineering graduates. Having seen a documentary on German television about the large number of Irish graduates who could not find jobs, Siemens dispatched a team and recruited the best of them. The shortage of graduates is an immediate problem today in both the UK and Germany. I work for a German company and my colleagues have already been recruiting in Spain. The NMD also asked why foreign companies run our UK manufacturing facilities better. [Ex-manufacturing editor of the FT] Peter Marsh said it is because they are focused on a longer term strategy than British companies. Is this the consensus view? While Peter is probably correct I think it is only part of the story. Another factor I believe ways in the balance is the British insistence on creating a ‘level playing field’. Are we, as a nation, too fair and naive commercially?
If you would like to respond to one of ’s articles or comment on current manufacturing trends and events please email your letter to firstname.lastname@example.org
Roberto Priolo, editor of ’s sister publication Lean Management Journal, challenges process improvement professionals to embrace the devil they do not yet know.
o understand and correctly apply lean thinking, we have to take a completely different view of our organisations. Lean challenges what we think we know and the results of this challenge process are often staggering, sometimes discomforting, for those involved. It is human nature to stick to what we are familiar with – better the devil you know - we prefer to feel comfortable in a predictable world where, if there are problems, at least they are familiar. If change does impact this comfort zone, we prefer that it should happen slowly and within set limits. It’s not a wrong approach. However, lean calls for boldness – everywhere – and lean leaders must become confident in dealing with the unfamiliar and the unexpected.
Following value Most lean programmes start in a defined implementation area where low hanging fruit is easy to identify and quick wins can be grabbed. But in an ideal world lean would be adopted across the entire organisation, and its supply chain, in a transformational step. For it is simply impossible to really assure customer delight if there is limited visibility of your supply chain. And impossible that you are really taking a product to market in the most efficient way if engineers in product development do not share a lean ethos with production and other functions.
Value flows horizontally, across departments, functions, and job roles. However, organisations are characterised by vertical, hierarchical structures with layers of power and bureaucracy. Changing this paradigm is not easy. It takes time and caution should be used at all times. Doing too much too soon can be counteractive. But it is essential, once we are past the idea of lean as a box full of tools, to see the whole value stream, end to end. Lean is infectious and can naturally spread once it is successfully applied in one part of an organisation. But not all areas will move at the same speed and complex interactions between functions and individuals can mean that a process of fine tuning lean operations will sometimes mean taking a step back as well as steps forward. The upcoming issue of Lean Management Journal, the July/August edition, will analyse how different companies have got around this problem and started the move from vertical to horizontal organisational structures. Solar, a wholesaler with operations around Europe, will discuss supporting cross-functional and crossdepartmental communication, while Gwendolyn Galsworth (a leading global expert on visual management) will explain how visuality can help in this undertaking. We will also feature the story of the Stockholm City Archive,
Highlights in LMJ July/August: Solar provides a case study on creating horizontal organisational structures that support value flow Stockholm City Archive showcases how to break free from tradition and empower value creation Gwendolyn Goldsworth demonstrates how visual management can overcome organisational hierarchies
explaining how it transitioned from strict hierarchy to people empowerment.
Small but perfectly formed The June issue of Lean Management Journal looks at how smaller organisations can apply lean. The case studies featured highlighted how, quite often, being a small company can actually represent an asset rather than an obstacle to success. With a limited number of people to get on board, Australia-based Black Widow - for example - was able to dramatically change the way it operates. Making changes in family-run firms can stir up politics, but once decisions are made they are often implemented with unique strength and conviction. The edition also proved there is no limit to what lean can do, and to where it can be adopted – Nick Rich of Cardiff Metropolitan University discussed how it can even revolutionise social housing by introducing a new way to undertake building maintenance. Lean is a strange beast. There is no one recipe to follow for success and even for seasoned practitioners who think they’ve mastered it, idiosyncrasies in companies and changes in the business environment mean that the effect of the methodology on operations and performance will always have surprises in store. I hope the next issue will help readers become more comfortable with the devil they do not yet know.
For more information about LMJ, please contact the editor, Roberto Priolo, on email@example.com
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Whatever your challenge, we’ve got it covered. We have specialists in a huge variety of niche areas. Having this breadth of knowledge in one organisation means we can tackle your challenges from every angle. For example, we bring together materials experts, designers and engineers to develop new automotive technologies. And our state-of-the-art facilities and equipment mean we can offer services like materials analysis, quality assurance, prototyping and the development of innovative coatings.
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Case study The challenge Tinsley Bridge Limited wanted to develop innovative high-strength materials based on steel grades not typically used in suspension components, for heavy vehicle torsion bar applications.
How we worked together After successfully winning a SMART grant, the company worked with our metallurgy experts to develop new materials with world-leading strength using new heat treatment technology.
The result The collaboration has already led to the design of innovative suspension components for automotive, rail and defence vehicles, giving the company’s international customers a competitive advantage in their respective sectors. Tinsley Bridge and the University have gone on to secure a Knowledge Transfer Partnership to expand their development further.
On the road again
’s editorial team is out and about at a wide variety of industry conferences, debates and factory tours month in, month out. Let’s get a snapshot of the most interesting trips last month.
Retro eco Jane Gray at Shell’s low carbon technology Springboard final
or eight years now, oil & gas giant Shell has run the Shell Springboard competition in the UK, giving start up and SME innovators in low carbon markets the chance to win £40,000 to help fund growth. The competition takes place over a series of regional heats with the national winner announced at a ceremony at the Royal Academy of Engineering. This year judges included a past winner, the Carbon Trust and academics from Aston University, Imperial College and the London School of Economics. The criteria by which the winner is picked is loose, but this year judges unanimously opted for two retrofit technologies. The logic was that these products and the business partnerships the fledgling companies already had in place, have the potential to make a significant and immediate difference to communities and the environment – not just in the UK, but internationally.
The two winners were: Runner up: Ventive, a company making ventilation systems for domestic housing which improve air quality, reduce heat loss and lower CO2 emissions. Winner: Vantage Power, a London-based start up producing retrofit diesel-hybrid systems for busses. Retrofit solutions are less glamorous than more disruptive or blue skies technologies. They might also be challenged as appropriate winners on the basis that retrofit business models are essentially finite – one day we will simply make low carbon
Vantage Power receives its prize
buses first time round surely? Responding to this challenge, Toby Schulz, director of Vantage Power commented: “It’s a fair point. But looking just at the UK we think there is a pipeline of around ten years work retrofitting existing and new buses on British roads – many of which are still not produced with lowering carbon emissions in mind. In addition, there are massive markets for retrofit in countries like India which are heavy users of bus transport and are massively polluted.” It’s enough to keep Vantage very busy for the foreseeable future. But it won’t be sitting on its hands assures Schultz. “The ten year pipeline gives us a buffer in which to innovate and be ready with a new offering when retrofitting peters out.” Mr Schultz’s confidence in the strength of Vantage’s markets and the resilience of its technology offering was firm – but
so was that of every finalist in this year’s competition. Presenting products from wave energy generators to biomass coal, they were feisty entrepreneurs and all of them were UK manufacturers with strong UK supply chains in place. And the finalists were just a select bunch of a growing, dynamic community of low carbon technology manufacturers emerging in the UK according to Shell, which also used the ceremony at the Royal Academy to launch its new report Low Carbon Entrepreneurs: The New Engines of Growth – scan the QR code to read the report. @janefagray
Out and about
Tuned in for success Driving through the winding roads of the Hampshire countryside, James Pozzi was hard pressed to believe it is the location of a prospering British manufacturing business.
ut, touring the headquarters and processing plant of Wood & Douglas, it is hard not to be impressed by its inventiveness and productivity. Founded by chairman Alan Wood 30 years ago, Wood & Douglas’expansion has been gradual but increased in recent years following a £1m investment in its service facility in 2011. The investment was a calculated risk which has paid
dividends and culminated in Wood & Douglas receiving the prestigious Queen’s Award for Enterprise in the international trade category in April. For Mr Wood, the award was a validation of work that encompasses the design, development and delivery of wireless radio solutions for international markets. Currently export is particularly strong in China (medical), Sweden
Boxing Clever with ERP for the Mid-Market James Pozzi gets on board Oracle’s innovation truck
racle presented Boxing Clever with ERP for the MidMarket in Solihull in late April at the town’s Blythe Valley Business Park, giving delegates the opportunity to discuss the latest in ERP systems. The day was run alongside Oracle’s mobile innovation tour, which started in Edinburgh in early April and concluded in London in May. Presentations were given by Chris Walsh, senior principal product
manager at Oracle subsidiary JD Edwards, internationally recognised ERP expert Sean Jackson, managing director of BSM Consulting and Christian Fronteras, managing director of Redfaire who mooted the future of ERP delivery. Ritchie Edwards of Oracle wrapped things up by announcing the Apps in a Box initiative, a system delivering a one vendor solution stack from hardware to the user. The opportunity to ask questions followed, with the effectiveness
(automotive) and South Africa, where Wood & Douglas radio systems are used in the minerals market in mines for diamonds and precious metals. Wood believes international success has a lot to do with being UK-bred and UK-based as well as the firm’s proven flexibility in catering for all orders. “Our advantage is we manufacture in the UK, so we’re not bringing something in to finish it off and send it back out again, “he said. “We’re very attractive to export clients. They can come to us knowing that from their basic idea of what they want to do, we can give them a solution.” Innovation at Wood & Douglas is not just about its products and associated services however. Methods for running the company have been challenged and shaken up. Wood says his firm was “taken apart” by a Philips quality engineer who tried to cut and paste lean methodologies back in the 80s. But now there is a strong, selfcrafted business philosophy which targets quality at all costs. On the shop floor quality is supported by strong communication between employees and across functions. A process-based system makes sure every employee across the company can interact with one another and stay informed of a product’s shop floor cycle. The system presents information in a graphical format, and has been tailored to “the way people think at Wood & Douglas”. It encompasses all processes and decision points from the beginning of the order process to sales and shipping. Looking forward, Wood says the company’s key challenge is the constant push to reduce the size of its products. “The R&D team are constantly challenged to make it smaller, make it consume lower power. So that’ll always be the technological challenge.” @themanufacturer and affordability of ERP for mid-sized companies coming under scrutiny. At the conclusion, delegates were invited for a networking lunch aboard Oracle’s innovation truck, an exhibition vehicle showcasing the company’s latest technology. With four different interactive zones addressing the challenges and opportunities facing businesses, the truck offered an unusually engaging way for business leaders to explore what benefits they might be missing out on in the latest ERP technology. Will Trotman, Oracle hardware systems marketing director for the UK, Ireland and Israel, said: “We themed the tour around innovation because that’s something we believe Oracle delivers to its customers.” Mr Trotman added that the day represented a good opportunity for customers to come and learn more about the product and network with experts. “The tour appeals to existing and new customers who perhaps know of Oracle but don’t fully understand our capabilities.” @themanufacturer
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Britain’s industrial future in the energy market lies in a mix of renewables and nuclear, where the manufacturing potential will all be about wind turbines and nuclear reactors. Right?
rong. Today Aberdeen has returned to boom town status as better technology and steadily high oil prices have driven an industry based on manufactured hardware and oilfield services to new heights. The oil and gas supply chain racked up £27bn in revenues from 1,100 companies in 2011, according to a strategy framework by BIS and DECC in March, UK Oil and Gas – Business and Government. New extraction technology and hard economic times means the UK Government has woken up to the oil and gas sector. “Government had focused more on renewables,” says Rod Christie, president of GE Energy for Central & Eastern Europe, Russia and CIS. “The green ticket has been a very attractive campaign, whereas oil and gas has not been the flavour of the month. And the oil and gas industry has not done a great deal to promote itself,” he adds, alluding to the obscurity of
cost of decommissioning North Sea oil and gas facilities to 2040
the sector outside its north-east Scotland nucleus. Government has worked with industry for about two years on an oil and gas (O&G) strategy, part of its wider Industrial Strategy. It has identified 10 areas of focus needed for the UK to optimise its world-class status, including the UK supply chain, safety, access to finance, skills, technology and the fiscal regime. The aim is simply to “maximise the economic recovery of the UK’s offshore resources of oil and gas” while seeking to promote its perception and encourage more people to work in O&G, where recruitment remains a constant challenge. It has changed the fiscal code, providing tax breaks for foreign investors, which has worked. Oil & Gas UK, the industry trade body, expects £13bn of investment in the UK Continental Shelf (UKCS) this year alone, and some £40bn to 2020. In 2007, oil production in the North Sea fell to an historic low
but today the region is well and truly booming again. While total production is expected to dip slightly this year, by between 3%-6% below 2012’s 1.5 million barrels per day, new extraction techniques and the influx of regional investment will push production up by a third to two million barrels a day by 2017. The new O&G boom goes far beyond the North Sea. Hardware and services are being exported globally, with hubs like Aberdeen and Newcastle acting as gateways to markets including the Gulf of Mexico, Gulf of Arabia, Indonesia and Australia. There are myriad opportunities for manufacturing and engineering for SMEs and larger firms to supply the majors like Chevron and Shell, and the global oilfield servicing giants including Schlumberger, Baker Hughes and Halliburton. “Halliburton, Wood Group, all the big guys have strong order books. This feeds the SMEs and trickles down to their suppliers,” says David Rennie, international sector head for oil and gas at Scottish Enterprise. “This is my third OTC [industry trade fair in Houston] and I’m struck by the optimism. But the biggest issue for companies now is people,” he adds, referring to the labour market merry-go-round in O&G hotspots.
Leadstory Britain’s oil & gas industry
Growth rates at some companies serving the O&G industry Name
Aker Solutions Variety of engineering, electronics services
60% in 2012
Subsea camera systems
Headcount up 84% since 2012
Guardian Global Technologies
Downhole logging equipment
50% growth y-o-y, 2008 to 2012
16%-18% y-o-y in last three years
Subsea remote 2011-12 c. 35% growth operated vechicles
Cash-rich multinational operators have an insatiable appetite for an array of clever equipment. Oil and gas operations – from seismic surveys to data acquisition and subsea ‘Christmas tree’ valve array fabrication – looks increasingly like a giant playground for engineers and entrepreneurs, in Scotland and increasingly UK-wide. Guardian Global Technologies, which makes downhole logging equipment near Bridgend in Wales, averaged over 50% growth year-on-year from 2008 to 2012. Underwater vision systems manufacturer Bowtech had 25 employees in 2012, 46 now and plans to have 80 by 2014. Oil and gas cable manufacturer Hydro Group, run by Scots entrepreneur and Scottish Manufacturing Advisory Board member Doug White, is growing at about 18% net annually. Revenues ot Aker Solutions UK, one of the bigger engineering groups that manufactures subsea electronic modules in Aberdeen and other components in England, increased by 60% in 2012. No-one in this sector thinks the world is running low on oil. “The good thing about the future of the Scottish hardware industry is that if you can get oil out of hostile waters in the North Sea, you can do it virtually anywhere,” says David Rennie.
revenues of 1,100 supply chain companies for UK oil & gas
The microeconomy of Aberdeen
he car parks of the industrial estates of Aberdeen are peppered with Range Rovers and Aston Martins. Every few hundred metres a banner reads: “Jobs in Oil & Gas – Call Company X” or “Aker Solutions Recruiting Now”. to the sector. The airport is up for sale and new owners will be encouraged to invest in its facilities to make it a true international airport.”
This city is the closest thing the UK has to a modern day Klondike, where the gold is black and lies under the seabed many miles offshore, an exemplar for Lord Heseltine’s vision for regional growth. Oil & Gas UK says that GVA figures for the sector in Aberdeen City and Shire are not publicly available, “however, it could be assumed that around 75%-80% of Scottish oil and gas GVA is generated in the region.” O&G added £17.2bn to the Scottish economy in 2011. Average house prices here are only just behind a handful of counties around Glasgow and Edinburgh. No hotel room costs less than £200 a night on ‘changeover days’, between Monday and Thursday when the oil rig shifts change. But there are risks to sustained growth. The government O&G strategy document says this has happened in spite of, not because of, its infrastructure. From a small airport through to traffic congestion and limited housing stock, Aberdeen has struggled to keep up with the demands of this thriving sector. The document says “Aberdeen City Council is… aware of the shortcomings and is keen to tackle them. The City Council is now taking forward work on the western peripheral route that will ease congestion. The new harbour in Nigg Bay will be of particular value
GE’s Rod Christie sums up the job market here. “Aberdeen’s population is up to 230,000, including the transient labour, but unemployment is 0.9%,” he says. “In 2012, GE added 180 people in one building (GE Oil & Gas’s HQ). GE Subsea Systems is hiring about 20 engineers a week, globally.” While Aberdeen kicks on, the rest of Scotland feels the strain on HR as the city sucks in skilled technical people from all over Scotland and the rest of the UK (see Labour market section p31)). Loyalty is light as big employers can afford to offer handsome packages, and staff turnover is massive. “Two years ago when the business was headquartered in Houston, we suffered from a lack of presence here, where people in Aberdeen maybe didn’t feel the focus on the business. Now, we are doing well in attracting talent,” says Mr Christie. “In the last two years we have been either number one or two in labour market share.” While there is some inevitable ‘poaching’ from local SMEs, Christie says GE has been able to fill many posts internally by transfers from other sectors like GE Energy and Aviation, and says the company is very good at encouraging crossdivisional transfer.
Average wages in Aberdeen exceed most areas of Scotland
See p57 for our Employee of the Month interview with GE Oil & Gas talent, Rhys Long
Case study: Hydro Group
he shop floor at Hydro Group, manufacturers of composite cables, connectors and penetrators for hazardous environment applications, is neat and clean, configured in a demarcated U-shaped facility.
“It’s a good factory, you could make food in this factory,” says production director Gary Caunt. He knows what a lean manufacturing plant should be, after 30-years in manufacturing and a spell with SMAS, the Scottish Manufacturing Advisory Service. “We are pretty lean, but there is a long way to go. 5S is in our blood, we look at bottlenecks routinely, we make to order and we don’t carry much WIP. What is anti-lean is the amount of inspection we do, and the fact that no two orders are the same.” Hydro can’t make its products fast enough as orders pour in from Turkey, Australia, Singapore and Canada for its rugged cables for applications including oil and gas, energy and submarines. The firm has grown 16% year-on-year, and this year the targets are higher “but realistic,” says Caunt. “We build and ‘connectorise’ cables and we try to add as much value as possible,” he adds. As well as cable assembly, connectors are machined in-house using aluminium, silicon, bronze, 316 stainless, grade 1 and 2 titanium, with a few special inconel and monnel inserts. “We do everything on site, it’s fully vertically integrated,” says a proud Mr Caunt. “We do the non-recurring, expensive element of technical design, manufacture, through to deployment and support on site. We machine from billets and make cable from raw drain wire, extruding an outer jacket onto that and strengthening it. Such integration makes Hydro pretty unique
as an SME and brings its own headaches,” but the firm’s versatility has helped the company win lots of work, he asserts. Hydro is located on the Aberdeen Science and Energy Park, where 100% of firms serve the O&G industry, other than a few food retailers. “Specialist drilling, sonar buoys, PIG inspection devices, camera companies are all here and all associated with subsea engineering.” What does the industry demand from people? “In this town, mechanical and electrical engineers have their choice, they play the merry-go-round very well,” says Caunt. “Sales and marketing jobs are also popular. We try to mitigate labour shift by offering only fixed term contracts, no agency work. “It’s a good place to be, it brings its pressures but the problems are all nice to have. I would rather be here than anywhere else in the UK.”
Operations Director Gary Caunt
Hydro Group, which makes cables and connectors for hazardous applications, is growing about 16% annually
Leadstory Britain’s oil & gas industry
Technology New technology has helped the economics of sizeable investments stack up. For example, BP’s £4.5 billion Clair Ridge project includes pioneering full-field injection of desalinated water to enhance oil recovery. Statoil’s £4bn+ investment in Mariner, a heavy oil field that was initially discovered in 1981, was made possible through innovative technological solutions. “A big trend I’ve picked up this week [at OTC in Houston] is new seismic techniques – they’re reshooting large chunks of the North Sea,” says Scottish Enterprise’s David Rennie. “It used to be 2D seismic, now it’s all 3D and increasingly 4D. Recovery levels in the UK’s part of the North Sea are about 40%. The industry recognises there’s work to do here. Norway’s recovery is about 50% with 60% targeted. Seismic can play a huge role in that.”
Perception challenge O&G, compared with automotive and aerospace, is unquestionably Britain’s best kept industrial secret, to paraphrase the title of a 2011 survey used by Malcolm Webb, chief executive of Oil & Gas UK to highlight the dangers of neglecting the industry. It demonstrated that, outside Scotland, and arguably north-east Scotland, the public is largely unaware of O&G’s strengths. Consequently, image is on the oil & gas strategy’s 10-point plan. A nationwide education programme is being phased in to boost awareness and recruitment, says BIS.
people employed in oil and gas in the UK, direct and Tier One suppliers
Oil recovery is more of a free market now, with more room for the small and nimble. “The majors are still there but have concentrated their production on more of a hub basis,” says Rennie. “The smaller independents have come in, taken on assets from the big guys, invested in technology. TAQA, the Abu Dhabi outfit, took over Comorant Alpha and have invested time and people and have managed to increase production significantly.”
167 new production licences awarded last year by DECC on 330 North Sea blocks
GE Subsea Systems is hiring about 20 engineers a week, globally
GE is investing millions of pounds in upgrading testing facilities for its subsea trees at the Bridge of Don factory
Rod Christie, GE Oil & Gas
Leadstory Britain’s oil & gas industry
It’s not just NE Scotland
While Aberdeen is the hub of subsea engineering and services, the oil and gas supply chain is UK-wide and the industry employs up to 440,000 people in the UK directly and indirectly to first tier suppliers, according to Ernst & Young (see map). Newcastle and the North East, Gt Yarmouth and its area – feeding the southern North Sea – and Sheffield, which hosts more than 25 companies supplying components to oil & gas, are among the English hotspots for engineering. At Sheffield’s Global Manufacturing Festival in April, Dr Lindsay Branston of Scottish Enterprise noticed a change. “There were noticeably more companies discussing oil and gas contracts than I’d been aware of before. Clearly capacity is spilling out of Scotland and into England.”
Top 10 Employment Impacts by Parliamentery Constituency 2010 Source: Oil and Gas UK www.oilandgasuk.co.uk/cmsfiles/ custom/map/atlas.html
Cities of London and Westminster
West Aberdeenshire and Kincardine
Poplar and Limehouse
E Oil and Gas was created when GE Industry delayered in 2011 and is now a separate business division and P&L. It has four factories in the UK, in Bridge of Don (Aberdeen), Montrose, Newcastle and Bristol. GE Wellstream makes flexible pipes. It is a company bought by GE in 2011 as an earnings enhancing acquisition that GE believed it could take further. On arrival at the factory on the north bank of the Tyne, the reels that hold the pipes tower above your head – each reel can hold up to 1.5km of continuous pipe and cost some £250,000 to make. The vast factory receives three primary sub-components: steel wire that can only come from specialised steel mills in Europe and the USA, polymers that make the pipe sleeves from the USA and France, and endfitting forgings, which attach the pipe to other ends like flanges, from a mix of UK and Continental European suppliers. Ancillary items including buoyancy modules and end restrictors come from UK – in total about 40% of the raw materials and direct purchases are from the UK. “Flexible pipes offer customers a solution to access difficult-to-reach oils and wells,” says Bruce Heppenstall, general manager at GE Wellstream Flexibles, who moved over from GE Energy in July 2012. “Without flexibles, they’d have to extract the oil with rigid pipes that are more expensive and have less operational flexibility. A rigid riser is more difficult to design, engineer and manufacture. These come into competition with flexible on long lays.”
Case study: GE Wellstream
Making a long pipe may not sound advanced, admits Mr Heppenstall, but it belies a lot of engineering. “A lot of capital equipment is needed to do this, so it fits GE’s sweet spot for high value-added very well,” says Mr Heppenstall. GE has worked heavily on polymer technology to ensure the pipes are strong, flexible, do not crack and are impermeable to the liquid or gas contained within. “We’ve tested pipes up to 3,000psi. That’s a mindboggling pressure,” Oil companies are drilling deeper as the technology improves. Deep wells mean long pipes, which exert huge weights on fittings on the surface. “Weight is the biggest challenge in the flexible pipe industry now, one that will probably be solved using composite materials,” says Heppenstall. “There’s so much steel in the pipe, it gets so heavy that it can’t support its own weight. You try to take weight out of the pipe design but also maintain strength.” GE Wellstream has a composite development programme in Newcastle looking at this challenge. For such a big company, with 18,000 employees in the UK, GE has a small profile in some places where it has manufacturing operations. Heppenstall and the team across Oil & Gas want to emphasise GE’s work locally. “Our new carousels that can hold 10km pipes are being built with £17m of investment. This will create 125 jobs, safeguard a further 80 and is backed by £3 million from Regional Growth Fund Round 3 – that’s an example of what GE has brought here.”
See www.themanufacturer.com for more on GE Wellstream in the UK.
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Leadstory Britain’s oil & gas industry
Labour market The labour market in the UK O&G industry is famously fluid, some would say cut-throat; skilled professionals job-hop with alarming regularity, giving O&G companies, especially SMEs, a real recruitment headache. While the high churn of skilled people is bad but expected in Aberdeen, companies in parallel sectors and in other parts of Scotland are now feeling a negative impact from the renewed prosperity of O&G. A precision engineering firm in Glasgow recently lost several newly qualified apprentices to the lure of Aberdeen. “The strategy of poaching rather than training to meet the rise in oil and gas demand is driving ‘wage-flation’ across industry and having a
Everybody is operating at capacity, everyone is growing Gary Caunt, Hydro Group, on the Aberdeen O&G industry
Exploration and production drilling Engineering, fabrication and installation
Operations (production and maintenance)
Average employee wage growth 2008 to 2011
Aker Solutions employs 3,200 in the UK and grew 60% in 2012
Source: Ernst & Young Review of the UK oilfield services industry 2012
Long term or fad?
huge impact on businesses who have invested in apprentices and skills development,” says the MD. Power Jacks, an Aberdeenshire manufacturer of power transmission and mechanical jacking, lost approximately 10%- 15% of its staff during a busy time last year, all of them to oil and gas related companies. “Pay is typically 25% higher in Aberdeen for an oil & gas job than for the equivalent job in another sector in central Scotland. Salary inflation, outstrips the value of the job role,” says Barry Mole of Ecosse Professional Services, a manufacturing consultancy. “The recruitment market in Aberdeen is incredibly difficult and many companies are looking to fasttrack professionals from other industry sectors to minimise the impact on the continuity of service.”
Manufacturing in the UK for the global O&G industry is here to stay. Some estimate that recoverable reserves in the North Sea alone equate to another 30-years production. “It depends on which data you read and the oil price, but it’s not going away soon,” says Guardian Global’s Iain Maxted.
Sourcing suitably qualified personnel
Economic uncertainty Other No factors limiting growth Supply chain issues Availability of finance
What are the main factors limiting growth in your organisation? Source: Ernst & Young Review of the UK oilfield services industry 2012
The most difficult vacancies to fill are those for engineers, professional engineers and managers. This difficulty is compounded by the fact that the skills, knowledge and experience lost through retirement are more difficult to replace in these areas than is the case for other workforce areas OPITO / Robert Gordon University report on labour market, 2011
For information about supplying parts to the O&G industry, contact Oil & Gas UK
Competition is what gets me out of bed in the morning and I need other people to be making products that challenge us and bring greater sophistication to this sector
Sense and Making something from nothing is hard work, especially when you set up a manufacturing business in the UK, from scratch, with no engineering or production knowledge. Sarah Brown, CEO of organic skin care manufacturer Pai Skincare, tells Jane Gray how she did it.
was never short on ambition,” says Sarah Brown, Pai Skincare’s founder and chief executive. That’s just as well, because without huge amounts of drive coupled with a self-confessed tendency to “big dreams”, the PR girl from Ealing might never have quit her successful career,
taught herself cosmetic chemistry and launched the first range of certified organic salon skin care products, now available internationally. “Looking back, I was crazy,” admits Mrs Brown. “I had no knowledge of cosmetic chemistry or manufacturing.” What she had was a growing frustration with the treatments she was
prescribed for urticaria, or hives, a sensitive skin condition that flared up in her mid-twenties with no known cause. Researching what might have triggered her condition, Brown was shocked to discover that many of the sensitive skin products she had been using to treat it, even the so-called natural and organic products, contained as little as 1% natural ingredients while harbouring a host of synthetics and irritants. “The belief that I could do something to counter this came on very slowly,” says Brown. “If I’d analysed it, I don’t think I would ever have taken the first step.” That first step was to start experimenting with organic ingredients and take classes in the principles of mixing oil and water to make an emulsion. Working from a garage in Ealing, it was only after she got her first product to market that Brown recruited a qualified cosmetic chemist to help her understand how to tinker the formulation to allow larger scale production and longer shelf life. Six-years on, Brown runs a company which turned over £1.5m last year, double the previous year and the growth trajectory remains positive. She employs 10 permanent staff who work from a factory in West London where all production and formulation of new products is carried out in-house. Her equipment was bought from a closing factory’s auction. “The last few years has all been about grooming the products and creating brand awareness through the online business,” says Brown. “I am completely indebted to the people that I have been able to hire for how far we’ve come. My team is what I am most proud of in the business today.” Unlike many manufacturers, Brown says that getting the right people has been relatively easy. In part, she says this can be attributed to her location. “London gives you access to the crème de la crème of talent,” she says.
Interview Sarah Brown, CEO, Pai Skincare
Pai was launched with £15,000 of personal savings and received no bank finance for three years.
Furthermore, the entrepreneur’s own PR expertise means that the Pai brand started doing the recruitment for her. “Three or four members of staff were taken on simply because they wrote to me with such passion and enthusiasm for the business that I made space for them. I need technical skills, precision and a methodical approach, but I will rate passion over qualifications any day.”
Fingers in Pai But gambles on passion were not to be taken lightly. Brown set Pai up using £15,000 of personal savings and received no bank finance at all until three years after she began trading. “Aside from the technical challenge of certifying the products to an organic standard, the biggest challenge to getting Pai off the ground was undoubtedly access to finance,” she says. “That is not unique to manufacturing. A lot of entrepreneurs are struggling to get buy-in from banks. For me, the main issue was that I had no assets. So I had nothing to guarantee a loan against.” Brown says this early finance drought has stunted Pai’s growth. “We would certainly be twice the size we are now if I could have secured a loan early
on,” she asserts. “As it is we’ve had to grow very slowly. But on the plus side we have become extremely resourceful.” What finally put Brown in touch with the funding she needed to grow was the Enterprise Finance Guarantee, a government initiative which underwrites 75% of bank loans to viable SMEs. “It gave the bank greater confidence to offer us a loan, but although it helped Pai, I don’t think the scheme has been as effective as it should have in general. With that level of guarantee in place from government, the banks should be lending far more than they are.”
Taking a bigger slice Going forward, Brown maintains that sense of ambition which has got Pai where it is today. “I aim to see Pai become the premium sensitive skin care brand in the world,” she says. “Having established the brand through the online business we now have international exposure and our London base means we can be responsive. We can do next day delivery to customers in LA [Los Angeles]. “The next step is to break into department stores. I’d love to see Pai products on the shelves in Liberty’s for example.”
With that level of guarantee in place from government [Enterprise Finance Guarantee], the banks should be lending far more than they are
The firm has consciously held back from in-store retailing so far because Brown believes there is little point in being on shelf until you are certain people will recognise the brand. “If you go in too early and fail, you will never get back.” Located on an industrial estate, scope for capacity expansion at the factory is high. And with size comes supply-side benefits. “As production scales up, materials and ingredients sourcing is also, fortuitously, becoming easier,” she says. “There are far more suppliers now than there were eight years ago when I first started trying to source. Being certified organic means our pool of suppliers is very limited. If there is one person making an ingredient organically in the world, we have to buy from them.” This has obvious implications in terms of security of supply – especially when certain key fatty acid-rich vegetable oils are prone to crop failures.
Interview Sarah Brown, CEO, Pai Skincare
“But there is more choice all the time. It also helps that there is a growing pool of efficacy data for natural and organic ingredients. I’d love to push forward with more research in this area to help the market mature and assist our own new product development.”
Future challenges What might disrupt this rosy outlook? Regulation, says Brown. “Until now there has been relatively little regulatory red tape for developing beauty products in the UK. But as of July that will
Biography Sarah Brown Pai Skincare Founder
Account Executive, Jervis Read PR (now known as Hogarth PR)
Account Director, Lexis PR, working on campaigns for Nike, Barclaycard, McVities, Andrex, and Thomson Holidays.
E&J Gallo Wines, UK & Ireland PR Manager E&J Gallo Wines, International PR Manager
Launched Pai Skincare - first ever product sold to supermodel Claudia Schiffer
Voted Top Ten New Entrepreneur in the Courvoisier ‘Future 500’ Awards
Won Female in Retail Entrepreneur Award in Handbag.com Make Your Mark awards
Employs first full-time Cosmetic Chemist (now Head of New Product Development)
Pai Skincare wins two Harper’s Bazaar Beauty Awards for Rosehip BioRegenerate Oil and Geranium & Thistle Combination Skin Cream
Extend into 5,000 sq foot manufacturing and distribution facility in West London.
Being certified organic means our pool of suppliers is limited. If there is one person making an ingredient organically in the world, we have to buy from them
change. The testing that will be required before a product can be sold will increase significantly, to a point where it will be prohibitive for people to do what I did,” she says, alluding that regulation raises barriers to entry. But while Pai has just reached a size where it will be able to cope with the regulatory requirements, Brown does not welcome the barrier to competition. “I don’t fear competition. It’s what gets me out of bed in the morning and I need other people to make products that challenge us and bring greater sophistication to this sector. But I know that if these regulations had been in place eight years ago, I would never have started down this route.” Another, no less daunting challenge for Brown will be realising her ambition for global brand pre-eminence for Pai in balance with a new arrival. Jack Brown, the CEO’s first baby, was seven weeks old at the time of writing. “At the moment there is no balance,” she jokes. “But I will stay very closely involved in the business. I sometimes tell people that Jack is my second baby – because Pai was my first.” Does this businesswoman have a role model to guide her as a new mother and an entrepreneur with big commercial ambitions? “A boss of mine when I worked for Gallo Wine was like Super Woman. She had three babies on three continents and sometimes took her children with her on business trips when they were very young, but stayed up through the night with them in different time zones so as not to disrupt their routine. If she could do all that with three children, I am sure I can try!” Brown is generally dismissive of barriers to career success for women. “People say that it is hard for women in business, but I have never found it so,” she states, summing up her philosophy for business success as being down to “sheer graft” regardless of who you are.
R&D Tax Claims
Total R&D Tax reclaim made by Mineseeker Operations:
L to R: Mark Evans, managing director, R&D Tax Claims; Mark Dorey, commercial director, Mineseeker Operations; Mike Kendrick, chief executive officer, Mineseeker Operations
R&D claim detected How Mineseeker Operations reclaimed over £125,000 in R&D taxes with the help of Wolverhampton-based tax specialist R&D Tax Claims
ineseeker Operations, based at Wolverhampton Business Airport in South Staffordshire, has developed technology that detects surface and sub-surface landmines and unexploded ordnance. The two principal owners, chief executive officer Mike Kendrick and Mark Dorey, commercial director, were originally involved in a hot air balloon business in Telford, West Midlands, which they went on to develop into a successful global aerial advertising business using airships to film major sporting events around the world. Mike Kendrick became interested in how aerial photographic imagery could be combined with ground penetrating radar for use in
identifying where landmines were buried. After taking an airship to Kosovo on a successful fact finding mission, Mineseeker was born. The system, which took several years to develop, enables identification of sub-surface objects, and can survey up to five square kilometres a day. “According to UN research statistics, there are one hundred million landmines buried in 70 countries and it will take over 600 years to clear them, at an estimated cost of $50bn”, says Mr Dorey. “Incredibly, these statistics don’t include Iraq, Afghanistan or Libya, and there are approximately two million more laid every year.”
Defining the claim It’s great news from a cashflow point of view as we are continually reinvesting into the business and we will continue to reclaim through the scheme
Mark Evans, managing director of R&D Tax Claims, recently celebrated hitting the £10 million mark in HMRC tax reclaims. “Mineseeker is a great example of a company that has combined its entrepreneurial skills with in-depth knowledge of its specialism to create a business with a global reach in an area of great need,” said Mr Evans. “This was a slightly unusual claim for us as Mineseeker has one product, whereas most companies have several. The difficulty lay in identifying the costs we could claim with
HMRC, but we were very confident from the outset that Mineseeker had clearly carried out research and development. Mineseeker is still in the start-up phase with low sales and high costs. Evans says this meant the claim submission had to be very clear in clearly indentifying and defining R&D costs as HMRC is very specific about which R&D costs can be reclaimed and which can’t. “We were forensic in our approach,” says Evans, “and the resulting claim of £125,854 over two years is one of our biggest to date. It’s a joy to assist a company whose ethos is firmly both humanitarian and environmental – in excess of 80 per cent of land designated as mined is in fact clear, and this land can be brought back into use quickly for the good of both the community and the country.” “I was surprised but delighted that we could reclaim that amount of corporation tax”, said Mark Dorey. “We’d never heard of the scheme before. It’s great news from a cashflow point of view as we are continually reinvesting into the business and we will continue to reclaim through the scheme. 2013 is looking very good indeed.”
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.
60 second Interview
Ian Dearn Head of manufacturing, Mondelez UK Mondelez International, the snacks subsidiary of food manufacturing giant Kraft, began making the world’s favourite biscuit, Oreo, in Sheffield in May. James Pozzi talks to Ian Dearn about the £6m investment in his Cadbury-Trebor facility and plans to grow the £22m UK Oreo market. What message does this investment give to the global Mondelez business and the British biscuit industry? There’s an external message, which is a great investment news story for the UK and Sheffield, which shows a vote of confidence in the business environment and the local workforce. Internally it’s a great celebration of our people. I’ve worked in a number of different sites but here we have a unique passion and energy. The significant investment in the site is a real endorsement of that. The British biscuit and cake sector is worth £3.6bn and is growing, attracting investment from many global players. How does Modelez plan to compete and grow through its latest investment in the UK? We have great growth in biscuits in Europe and exceptional growth within the UK. The two primary drivers of that growth are Oreo, and Belvita, which will be manufactured here from August. Oreo globally is the biggest biscuit brand with £1.3bn sales worldwide. Since introducing it here in 2008, we’ve now got to £22m sales and it has grown 16% year-on-year, which is quite a remarkable level of growth.
We’re confident this has been a sound business decision. How many jobs have been created thanks to the investment in the new Oreo line? We’ve been very fortunate that we’ve been able to utilise the culture that we have with skills and engagement. We were able to secure volunteers from our candy operations to work on the new line – Maynards Wine Gums, Bassett’s Allsorts and Trebor Mints. Through doing that, were able to create 70 jobs and fill them with existing staff – a great labour management and efficiency achievement. Employees on the new line have been re-skilled. Anyone from a food manufacturing background would be aware that making mints and jellies involves very different technology to a bakery. We’ve leveraged experience from across Europe to help in re-skilling. The operators who have moved across have worked in our Portuguese and Spanish factories to learn how to make biscuits in a real time, live environment. They also spent a good amount of time at our research development centre in Paris. The training started in the early part of December 2012 and we’ve been building skills since then.
What is the projected output for the Oreo line and how automated is the production process? Demand is so great that we need to produce as many as possible. The line has the capacity to make 10,000 tonnes of Oreos a year, about 1.2m biscuits per day. We’ve taken a pragmatic approach to automation. In the candy facility, we’ve invested heavily in automation in recent years; multi-million pound investments into areas where we can alleviate manual handling. The reason we took a more pragmatic approach with biscuits is based on trying to get the group to a certain skill level, to allow them to become more familiar with the intrinsic operations of making biscuits. We’ll look at introducing more automation in the future. Mondelez runs an apprenticeship scheme across the Sheffield site and others in Birmingham and Banbury. How successful has this been? Since 2011 we’ve significantly increased our intake of apprentices. Currently we have nine for Sheffield with two more joining in September. There are 50 for Mondelez in the UK. Its part of our long term skills planning and something we are pleased to support as we know it’s a critical agenda. The figures may not sound massive but it’s a step change to what other companies are doing. Our approach is to bring them into the system and turn them into long term employees.
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With labour costs often being the single largest cost for many organisations, this event is an essential ‘must attend’ for manufacturers looking to increase workforce flexibility and reduce avoidable costs. This important and timely conference will be covering topics such as annualised hours and human capital management. It will discuss how companies can maximise their effectiveness by ensuring staffing plans match their needs, ultimately ensuring a company gains maximum ROI from their human capital. Through keynote and case study presentations this conference will explore best practice methods, systems and thinking in producing a workforce that can be flexible, productive and competitive now and for the future.
Book now to secure your place and benefit from listening to key manufacturing speakers and network with other like-minded executives facing the same issues as you.
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By law, you need to be licensed to play music at work.
You probably haven’t thought much about it. You’ve just got music on for your staff or customers. But did you know you need permission from the music’s copyright owners if you play music, TV or radio aloud at work? It’s the law. But don’t worry, to get that permission you simply need a licence from PRS for Music* (and in most cases, one from PPL** too). PRS for Music is a membership organisation that acts on behalf of songwriters and composers to ensure they’re paid for the use of their work. So if you have music playing, ask PRS for Music how you become licensed to listen today.
Contact PRS for Music on 0800 694 7304 or at prsformusic.com/musicatwork *PRS for Music licences cover the vast majority of music originating from the UK and all over the world. However, if you play music that is outside of PRS for Music’s control, you may need an additional licence from the relevant copyright owner(s). You will require a TV licence as well if you are using a TV in your premises. You do not need a licence from PRS for Music in the unlikely event that all the music you play is out of copyright or is not controlled by PRS for Music. **PPL collects and distributes royalties on behalf of record companies and performers. Further info at ppluk.com. All music licences are required under the Copyright, Designs and Patents Act 1988 which stipulates you must gain the permission of the copyright owner if you play music in public (anywhere outside the home environment).
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Enthuse young people to take up vital careers in engineering
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Independent, educational charity, The Smallpeice Trust is passionate about closing this skills gap and enthusing the next-generation of engineers. Working in partnership with some of the industry’s leading organisations, we offer students an engaging, hands-on introduction to the rewarding careers available to them. From sponsoring STEM Days and Clubs, to mini competitions and residential courses, there are many ways in which your company can get involved with The Smallpeice Trust. To find out more about the benefits of being a Smallpeice Partner, contact our Chief Executive, Dr. Andrew Cave on 07885 227 342 or email firstname.lastname@example.org.
With not enough young people taking Science, Technology, Engineering and Mathematics (STEM) at further education, many UK companies are facing a skills shortage.
Big things happen with The Smallpeice Trust
Backtoschool Campaign Update Thetford school signs up manufacturing governor The Thetford Academy in Norfolk has begun the process to appoint Will Bridgman, managing director of engineering company Warren Services, as a school governor.
Manufacturer and school unite
Will Bridgman and Thetford Academy will work together for better links between education and manufacturing
he Thetford Academy was opened in September 2010 and is the beneficiary of a recent multi-million pound rebuild. It was formed by the merger two failing schools, Charles Burrell
The school has difficulties but the current principal and her staff are working extremely hard to pull it around Richard Bridgman, Warren Services
report and is working hard to improve academic and behavioural standards at the school which now boasts greatly improved facilities. Local businessman Richard Bridgman has long been a crusader for better standards of training in manufacturing companies and for showing young people the opportunities in engineering careers. He and son Will, managing director of local engineering firm Warren Services, began a dialogue with the Thetford Academy nearly two years ago about providing support for the school. Richard, chair of Semta East England, the manufacturing sector skills council, met with Mrs Spillane on May 23 to discuss Will’s appointment as a governor. The thorough approval process was explained and, pending unforeseen delays, he will be appointed a governor by September. The Bridgmans’ plan is to link children at the school with their own training centre. “The academy is keen to work with Warren Services and supports the opening of our own Bridge Training Centre which starts in September 2014,” says Bridgman senior. “This facility will be a non-profit Community Interest Company and we will work with Semta under their SAS programme to deliver training to our own apprentices as well as other companies in Thetford and the region.”
and Rosemary Musker high schools. This September, the refurbishment and new buildings will bring its capacity to 2,050 pupils, up from 1,300. The academy has challenges. School regulator Ofsted gave the school an unfavourable report in March following a visit in February, singling out poor standards in science, physical education and design & technology, and low pupil attendance. The principal Cathy Spillane was disappointed by the
Working with the academy, the Bridgmans hope to be able to offer work experience, deliver new traineeships and all other relevant training, taking into account the change in the school leaving age, to 17-years, which comes into effect in September. “We are committed as a family and company to increase the opportunities for youngsters in Thetford and would also like to encourage more females to enter the world of manufacturing,” says Bridgman senior. The Thetford Academy does not have a manufacturing leader on the governing board at present. As a school with a below average Ofsted ranking, and needing more help specifically in its science and CDT departments, it is a prime candidate for a governor like Mr Bridgman. “The school has difficulties but the current principal and her staff are working extremely hard to pull it around,” says Bridgman senior. “I have worked with them over the last couple of years and I truly believe, given time, the principal will make it a success. But government and local authorities are always looking for a quick fix. We need to lift the aspirations of the students in Thetford and help them reach their full potential.”
Read more about the Bridge Training Centre at: www.themanufacturer.com/schoolscampaign/ThetfordAcad
The UK is one of the world’s most flexible developed labour markets. Yet last year a raft of plans for new regulation were announced by government in a bid to augment the UK’s status as a flexible place to work and to do business – difficult intentions to marry. James Pozzi gathers manufacturing employer responses to some labour regulation changes in 2013.
March report released by the Department of Business, Innovation and Skills (BIS) titled Employer Perceptions and the Impact of Employment Regulation, stated that “the UK regulatory environment is considered to be ‘light touch’, and yet many employers report that regulation is affecting their ability to recruit.” This reticence in taking on new workers is holding up economic recovery and justifies government’s attempts to tinker labour regulations to encourage employers to take on more staff. Recently these attempts have included the extension of collective redundancy consultation periods, the increase in the qualifying period for unfair dismissal from one year to two and the introduction of claimant fees for employment tribunals. But in a bid to increase flexible working in the UK, government’s measures have also augmented a range of employee rights and benefits. These include increases to parental leave allowances statuary sick pay and new structures to encourage employee ownership of company shares. A Chartered Institute of Personnel and Development report published in May last year found that, across sectors, 76% of employers thought the introduction of more flexible working conditions improved talent retention, 73% said it improved employee motivation and 72% said it improved engagement – both key influencers in productivity. This kind of evidence indicates why it is attractive to drive greater workforce flexibility, but the way
If your partner is on maternity leave coupled with the extra expense of having a baby, many would struggle to make ends meet Danny Harrison, Nicklin
regulation on this is implemented can be difficult to comply with – particularly for SME businesses. For instance, responding the recent increase in the allowance for parental leave from 13 to 18 weeks Alan Wood, founder of Hampshire wireless radio systems manufacturer, Wood & Douglas, said: “Current employment legislation is very onerous on small companies. If one of our senior design engineers took four weeks parental leave per year on top of their annual leave entitlement there would be a detrimental effect on our capabilities. In extremes this might result in losing opportunities due to lack of resources.” Such concern from a highly innovative and resourceful company – Wood & Douglass recently won a Queen’s Award for Enterprise (p22), implies a likley horde of less confident or robust SMEs who will be even more stumped in dealing with changes to worker rights. Of course, some regulations will cause more trouble than others and being informed of the detail can ensure an employer takes a measured
76% 73% 72%
of employers thought the introduction of more flexible working conditions improved talent retention
said it improved employee motivation
said it improved engagement Source: Flexible working provision and uptake: CIPD 2012
Manfacturing Leadership: Labour regulation
response. Asked whether the increase in unpaid parental leave and an April boost to statutory maternity, paternity and adoption pay from £135.45 to £136.78 per week would have an impact on his business Charles Turner, managing director at Sheffield steel company Durham-Duplex, said: “The increases on allowances are less than 1%, and most of my workers do not claim paternity as they cannot afford to lose that amount of cash when they are paid by the hour.” Danny Harrison, of Birmingham-based transit packaging company Nicklin is equally sanguine about the changes. “From personal experience, I think it would be very difficult for most couples to actually be able to afford to do this,” he said. “If your partner is on maternity leave coupled with the extra expense of having a baby, many would struggle to make ends meet.” While government’s report Employer Perceptions and the Impact of Employment Regulation indicates that concerns remain about the nature of workforce regulation and the pace of change, a 2011 report from manufacturing business body EEF showed overwhelming employer support for the principle of increased workforce flexibility. On July 16, speakers at ’s Future Factory: Flexible Workforce conference will showcase how they are working with, and sometimes in spite of regulation to ensure they offer flexible working which encourages the productivity levels the UK needs to remain a competitive manufacturing location (p13). Scan the QR code for more details on the conference. http://bit.ly/FlexConf @themanufacturer
Industry responses to new labour laws Statutory maternity, paternity, adoption pay increase:
On April 7 2013 the standard rate of statutory maternity, paternity and adoption pay increased from £135.45 to £136.78 per week. Paul Carroll, head of finance at transit packing company Nicklin: “As we get 92% of the pay back and we have only had three employees qualify for paternity pay in the last 12 months, we feel that the impact will be negligible to our business at the moment. Furthermore, we only have one female employee so we feel this limits our exposure.”
Unpaid parental leave increases to 18 weeks:
On March 8 2013 the unpaid parental leave allowance increased from 13 weeks to 18 weeks Tim Thomas, head of employment policy at the EEF: “Manufacturers support the principle of allowing parents greater flexibility in taking leave, but the government needs to rethink its approach. The arrangements it proposes will prevent meaningful business planning by employers, and many may become unwilling participants as a result. Employers need to balance the interests of all workers with those of parents, who need to provide their employers with early warning of future plans. Parental leave taken in several piecemeal blocks, following limited notice to employers, will not help either parents or their employers.”
amount of tax. The process has had very minimal effect on the company. Providing you have the correct information it is a simple procedure carried out through Payroll Software. Carrying out the process on a monthly basis means your figures are always correct and removes the hassle of the Year End Process.”
Employee-shareholder contracts are introduced: Government is backing an increase in employee ownership of company shares to boost productivity and profitability in UK firms. To support this, government has introduced a new set of employment contracts and advice for companies looking to alter their ownership structure. Employee owned shares bought under the scheme are exempt from capital gains tax, up to a maximum threshold of £50,000.
Real-time information for payroll:
Charles Turner, managing director of Durham-Duplex: “Employee ownership is a good thing when it is done well; examples include Swann Morton and Edward Pryor in Sheffield. However, it is not for most SME’s and I guess this is especially true where ownership and risk is 100% family held rather than from equity funding.”
Alan Wood, founder of Hampshire wireless radio solutions company Wood & Douglas: “Real Time Information will, in time, be regarded as a major move forward in providing quicker responses from HMRC. Wood & Douglas has already seen tax code changes appearing almost instantly after the submission of P60’s & P11d forms meaning staff are paying the correct
Tim Thomas, head of employment policy at the EEF: “The vast majority of our members are opposed to this policy simply because it doesn’t benefit them anymore than what is already in place. The only real advantage is exemption from capital gains tax, and despite the positives of that, there is no additional value to be had from these proposed contracts.”
This new method for payroll reporting to HMRC came into effect on April 6
’s May article Sharing the Action on: www.themanufacturer.com for more on employee ownership and manufacturer experiences with the ownership model
The Big Debate
Does the UK need a manufacturing strategy? Opinions were divided at Cranfield University on May 21 in the fourth National Manufacturing Debate.
he National Manufacturing Debate once again proved to be a valuable debate on the features of UK industry and what could, or should, change to help manufacturing grow. It mixed panel expertise with strong views from an audience comprising business people, engineers and academics working in manufacturing. Host Professor Raj Roy of Cranfield University set the bar high from the start – “Can the UK reach 20% GDP from manufacturing by 2020?” This deliberately lofty ambition was referenced throughout, but the
debate largely kept its feet on the ground. Before the debate, six senior speakers gave presentations on their specialist fields. Details of the speeches are available at www. themanufacturer. com/cranfieldNMD, including a presentation from Business and Energy Minister Michael Fallon in which he stated that Britain had a lot more to do to meet the competitive threat to manufacturing from BRIC countries and new challengers such as South Africa and Mexico, whose capabilities were improving. At the same time Mr Fallon said UK manufacturing needs to understand the opportunities that these same nations present as export markets. On the topic of industrial strategy, Fallon asserted that the Government already has an ‘Industrial Strategy’, launched in September in 2012, and listed the various initiatives and funds the government has launched to boost manufacturing. The Aerospace Growth Partnership which received £1 billion funding, to be matchfunded by industry, and the Advanced Manufacturing Supply Chain Initiative, which tries to increase the UK composition of
big company contracts, were held up as examples of how strategy affects manufacturing growth. The £125m AMSCI fund is fully tapped but another round of £120m is due later this year.
Panel debate The theme – Do we need a manufacturing strategy? – split the panel. Dick Elsy, CEO of the High Value Manufacturing Catapult, endorsed a strategic approach. “The knowledge, the precise understanding of how to make something better and more accurate, is the anchor point. We’ve shown that [our Catapult] model keeps manufacturing in the UK through access to the knowledge.” Others who supported the strategic approach included Brian Holliday of Siemens Industry UK, Mike Rigby, head of manufacturing and transport at Barclays and Professor John Nicholls of Cranfield University. Prof Nicholls said that his work on surface coatings for advanced engineering applications had benefited from the Catapult and involvement from the Engineering and Physical Sciences Research Council. Others were less sanguine about the need for a true strategy. Peter Marsh, ex manufacturing editor of the
Advanced manufacturing and innovation are terrific and necessary. But how many jobs will they provide - 100,000 at best? John Stevenson, HiTec Sheet Metal
Event preview National Manufacturing Debate 2013
Financial Times, said strategies can take a long time to define and fulfil. A better approach would be to identify what the UK is good at and assist that in a more ad hoc approach. He agreed that the UK should work on ways to capture more of the value in supply chains for large assemblies like cars, where often the parts come from abroad and are only assembled here. John Elliott, founder and chairman of dehumidifier manufacturer Ebac, provided a refreshing view on strategic manufacturing for Britain. He is adamant that there is a big market for UK manufactured commodities which people incorrectly believe cannot be made profitably in Britain. His company will start making washing machines in its factory in Durham later this year, the first time washing machines will be made in Britain for four years. He told the debate “I would ban innovation for a year, to focus on the basic things first like exchange rates and trade tariffs. If we create a level playing field for the UK in the world, things like manufacturing will take care of themselves. Come the revolution!” he joked. Conclusions? This lively debate threw up many strong opinions and theories, details of which can be found in our full report on the Debate in the July issue. Participants said that: successive governments should not tinker with the pillars that make manufacturing strong, such as tax breaks for capital investment; Schools and universities must be better linked to industry and the UK needs to interpret EU procurement rules more similarly to France and Germany, which assess local economic benefits of a domestic company into the bid decision. Overall, strategising for growth in British manufacturing was more popular than leaving it to free market forces. But consistency of message and policy was found to be the crux of strategy success in the long term.
The Big Debate: Delegate testimonials Richard McKee, Supplier Development Leader, Rolls-Royce “The need for more engineers and how to attract them to careers in manufacturing was mentioned many times during the debate. I have worked globally in aerospace supplier development and the core weakness I see in UK aerospace manufacturing is not in the actual engineering (or lack of) but in low managerial skills. Limited foresight leads to a lack of strong business strategy and leadership within the SMEs. “Let’s try not to use the context of high value engineering as a mask for low levels of labour productivity or weak operational strategy. I believe the bigger challenge is attracting strong business candidates into the manufacturing world. If, as part of a national manufacturing strategy, manufacturing leaders and government can help SMEs to create strong business and operational strategies, there is a larger opportunity to close the cost gap to BRIC nations.
John Stevenson, Managing Director, HiTec Sheet Metal “We need to stop holding Germany up as the revered brilliance of manufacturing we perceive them to be. They are not. The UK is at least equal to Germany, we just do less of it. As a company Hitec has secured work that was previously made by a German subcontractor. They could not get the quality right in several years, Hitec achieved it a couple of months. “On focusing on specific sectors, advanced manufacturing and innovation are terrific and necessary. But how many jobs will they provide - 100,000 at best? We need to create one to two million jobs so we need volume manufacture back in the UK. China never was that cheap if you compare like for like. Think about the health and safety issues, the material quality issues and excessive travel to and fro. Work is now returning from the Far East and we can and are competing.”
Neil Lloyd, Head of Sales Development, Lombard Business & Commercial “Two themes in particular resonated with me. The first was how the EU procurement policy is interpreted by the UK Government versus that of Germany’s. The UK seems focused on achieving the lowest price, while Germany focuses on the local economic and social benefits a German supplier would generate. “The second was the introduction of engineering to young children so they can understand the vast array of opportunities available. Maggie Philbin gave a passionate presentation on the work she does as CEO of TeenTech, which runs engaging one-day events that introduce teenagers to the wide range of career possibilities in Science, Engineering and Technology.”
Increase safety and compliance while increasing output and eliminating waste... Protect your employees and your bottom line with Apexâ€™s point-of-work industrial vending solutions Apex Supply Chain Technologies can help you increase safety, manage and document compliance and grow your bottom line through point-of-work industrial vending solutions.
pex is the worldwide leader in automated vending, utilised by over 6,500 companies, including 250+ in the Fortune 1000. Apex solutions can manage any supplies, tools or equipment that need to be tracked and controlled. Employees can focus on uninterrupted productivity, while Apexâ€™s enterprise software manages item usage, inventory levels and reordering. You will save money by eliminating waste and misuse of supplies and equipment. Best of all, Apex solutions are easy to use, easy to implement and easy to afford. Protect your employees and your bottom line with proven industrial vending solutions that help you dispense critical supplies and tools. Prove compliance and grow your output by making sure your people and the machines they use have what they need. Stay safe and avoid costly delays by ensuring you have exactly what you need, when and where you need it, for only those who need it. Until fairly recently, vending machines were cost-prohibitive for product suppliers and users. However, that has all changed. New low price levels have been made possible through the incorporation of innovative software technology into the vending machines which provide real-time data to users and have made installation far simpler. This combined with rapidly increasing customer demand for point-of-work
Apex Supply Chain Technologies technology, means that not just industrial companies but also suppliers are now seeing both the economic and the competitive advantage of utilising vending technology. The customer demand has been driven by a range of advantages that point-of-work vending machines can provide. These include: Up to 25% or more reduction of stock usage due to better monitoring via online reporting system Improved stock taking and ordering process reduces stock-outs Helps identify overuse due to purchase of faulty or inappropriate products Ensures required use of safety equipment (PPE) More efficient workers due to closer proximity of parts and equipment Reduced downtime due to closer proximity of maintenance parts Restricted access of products to only those that require them But the benefit is not just for the user, suppliers can also benefit from the use of vending technology. Vending is often a lead-in to additional business for a supplier. Often suppliers that provide vending technologies can enter into accounts where previously there was only infrequent business and greatly increase their presence due to the benefits presented through vending. Apex Supply Chain Technologies offers a range of supply/material vending solutions with the Edge 5000 being one of the most popular. The upright vending machine is generally filled with commonly used parts or equipment and housed close to the point-of-work. Parts stored in the machine are accessed using either an identity card or unique pin which allows managers to trace individual workers usage. The Apex machines are connected to an online reporting system via Apex’s Connect n’ Go Technology meaning that fitting the machines is simple and requires only an internet connection to install. With the help of Apex Supply Chain has sourced a number Technologies, of case studies from companies utilising point-of-work vending technology to great effect. Read on to hear how they have used the vending machines to eliminate waiting time, product overuse and help productivity.
Case study: Aluminium plant rolls out big MRO savings with Apex vending solutions
onstellium designs and manufactures aluminium products and components for a large range of industries from construction to aerospace. With a considerable health and safety equipment (HSE) requirement intrinsic in its operation, Constellium wanted to implement an automated system to ensure the right equipment was being used by the right person for the right task as well as to reduce unnecessary wastage.
Challenges: Reduce MRO consumption and costs Reduce overstock/inventory Get supplies closer to the point-of-use for faster access At its US-based plant in Ravenswood, West Virginia, Constellium turned to Apex Supply Chain Technologies for an industrial vending solution that could generate reports in real-time, or automatically at prescheduled times, complete with real-time usage, inventory, and restocking information. After installing four Apex Edge 5000 vending machines, they quickly saw considerable cost savings. “The first four averaged savings of £349 per machine per month,” said Purchasing Agent Jennifer Fife, of the amount of spend saved by the reduction of use of PPE including safety vests, safety glasses, and gloves. That’s a savings of £16,743 each year for just those four machines. “And that’s with them not fully stocked,” said Fife, adding that Constellium is planning to stock the machines with mill supplies in addition to the PPE products. Since implementing the first four machines as part of a pilot program at the Ravenswood mill, 10 more Edge 5000 machines have been placed near the point-of use throughout the plant. Constellium plans to install about 18 total Edge 5000’s at the facility. Based on the £349 savings per month per machine, the results represent a potential cost saving of more than £74,824 annually.
The first four [Apex Edge 5000 vending machines] averaged savings of £349 per machine per month Jennifer Fife, Purchasing Agent, Constellium
Apex Supply Chain Technologies Case study: Point of work dispensing saves Pfizer in plant downtime, inventory costs, and labour
Case study: PepsiCo plants reduce MRO spend up to 35-40%
epsiCo’s Quaker Oats division Gatorade plant in Indianapolis was facing inefficiencies in usage of personal protection equipment. Management knew that much more was being used than necessary, driving up PPE spend while lowering productivity. PPE distribution and use was a “free-for-all” with little tracking, accountability, and control, said Health, Safety and Environment Manager Derek Janquart. About 500 workers simply took the items they needed, and when those items ran out, the company re-ordered them. “We didn’t know where items went or who took them,” Mr Janquart said. “There was no tracking. We didn’t know where items were going.” “It was like we put in our own Walmart store,” he said. “We put out supplies, and anyone came and got what they wanted, anytime they wanted. Once something was out, we just went and bought more.” One of the plant’s industrial distributors considered several solutions but eventually chose Apex’s next-generation technology Edge 5000 point-of-work machines. “Before, we had no true statistics of what we were going through,” Janquart said. But after the introduction of Edge 5000’s two years ago the reductions in inventory were huge and dramatic.” The Edge 5000 with Apex’s Trajectory Enterprise Technology Platform now automatically tracks, manages, and controls vended items, and Janquart can see and track usage anytime, anywhere from his web browser. “It’s worked so well that it’s not even a cost we pay attention to anymore,” Janquart said.
he introduction of vending machines has saved Pfizer hundreds of thousands of dollars in downtime, inventory, and overall costs at its plants in Pearl River, New York, and in Guayama, Puerto Rico. And point-of-work vended dispensing is a cornerstone of those efficiencies. The Pearl River facility is spread over 550 acres with about 4,000 people working there. However, prior to the introduction of Apex Edge vending productions, the process for performing minor maintenance tasks was extremely time consuming. If a mechanic in the manufacturing area needed a simple repair part, they had to: Leave the work station Call Security in advance to request someone to be at the supply room to open the door and let them into the supply room Walk for several minutes to the floor’s exit De-gown – removing protective coveralls, gloves, boots, hair net Trek from the second floor up to the fourth floor supply room Wait for a security worker to meet them and open the door of the supply room The above process was estimated to take about 30 minutes and the worker still hadn’t even entered the supply room: Once the worker had obtained access to the supply room, they had to look around to find the part they needed Sometimes the worker wouldn’t even find the needed part, and the downtime due to the lack of one part could stretch into several hours. If the worker did locate the part, they would then have to take it back down to the second floor, re-gown, return to the workstation, install the part and finally be up and running. Total labour and production time lost during the above process was estimated to be at least an hour-and-a-half. And that’s only if the employee retrieved the correct part; if not, they would have to go through the entire process again. The Solution: multiple Edge 5000 machines, supplied in the UK by Apex Supply Chain Technologies. The vending machines now supply the frequently needed parts at the point-of-work, eliminating the need for employees to go through the gruelling, time-consuming process detailed above. In addition, due to the live reporting and stocktaking functionality, the company enjoys the added benefit of eliminating out of stock situations and reducing orders. An employee simply goes to the machine (without de-gowning/re-gowning), swipes his badge, dispenses the part, and is up and running within minutes. The most recent monthly tracking figures provided by the Edge 5000 – with technology by Apex Supply Chain Technologies – show that, Pfizer saved an estimated £8,600 in labour costs over a single month thanks to point-of-work dispensing. Pfizer also added two lockers to another machine to dispense larger parts such as roll wheels. Overall, the plant is so pleased with the Edge 5000s and lockers that the potential exists for many more machines and lockers throughout the enormous Pfizer plant.
Build a Culture of Safety Increase safety and compliance while increasing output and eliminating waste. Apex Supply Chain Technologies can protect your employees and your bottom line with proven solutions that help you: • Avoid accidents and adverse outcomes by having tools and supplies right where they are needed. • Keep compliant with regulations and company policies by controlling and tracking HSE items. • Show, for a given date and time, that you had safety equipment available to every employee in an area.
Connect with us to see how Apex can be a strategic partner in keeping your workers safe. email@example.com http://apx.sc/manfjune
Every Thing Is Possible.
Increase Efficiency Reduce Supply Costs Streamline & Automate Ordering Track & Control Access to PPE/HSE
for skills Semta’s chief executive Sarah Sillars OBE warns SMEs that they risk losing out to competitors if they do not invest in upskilling and re-skilling their current workforce
here has been a great deal of work and focus this year on the urgent need to increase the number of apprentices and graduates in advanced manufacturing and engineering. While there is still a very long way to go, the situation is improving but it is equally important that this recruitment drive doesn’t see the current workforce being left behind as new technology and processes are introduced. This is why we are urging all companies particularly those in the supply chain, who have yet to engage with Semta – to do so as we can
help them ensure they have everything in place to sustain and secure future contracts. Businesses who fail to address the skills issue face serious consequences – perhaps even forcing them out of business – as competitors from both home and abroad up their game. Major employers in the UK aerospace, automotive, defence and marine industries have been working with Semta to bring together their supply chain companies to advise them on what skills and technologies investments will be required for growth. The Transforming Skills and Productivity of Supply Chain project runs until the end of March next year. By then, around 2,200 SME supply chain businesses in our sector will have reached or be well on their way to world class standards, with 25,000 employees having enhanced skills. We are holding workshops, events and we are engaging directly with businesses on a one-to-one basis to raise awareness of what is on offer. The project is supported through the UK Commission for Employment and Skills Employer Investment Fund and matched by employers. It will help companies begin their High Performance journey and has seen the development of a tailored Capabilities and Skills Growth Assessment model. This will be delivered to 2,200 supply chain companies and will compare a firm’s existing capability against what is needed to deliver its
Workforce and skills: Semta
future growth ambition, with particular focus on adoption and exploitation of new technologies. The project, which should lead to an increasing number of parts being sourced in the UK rather than overseas, will increase the sector’s turnover and profit. There are a number of firms who have engaged with us and seen big benefits – Ford Component Manufacturing is one you can read about here. Semta can help firms to access funding, quality training providers and a suite of tools designed to give a return on their investment. We support the recruitment, mentoring and training of apprentices and graduates, assess supply chain capability to help produce a company training plan and provide high quality work programmes with demonstrable results from the shop floor to the managing director. Semta is responsible for 128,000 companies and 1.66 million-strong workforce that makes up UK advanced manufacturing and engineering: aerospace and defence, automotive, marine, composites, electronics, metals, mechanical and electrical. We are led by employers so our expert knowledge of skills management and development means we are ideally placed to support organisations, whatever their size, to get the best return on their training investment. To find out about the support available and to arrange a visit from one of our specialist business partners please call 0845 643 9001 or email firstname.lastname@example.org
amily business Ford Component Manufacturing sees homegrown skills and talent as vital to its future success. It was formed in 1910 by Robert Ford - whose grandson Geoff chairs the company today with great grandson Chris as the financial director. It has a proud history of employing people on Tyneside. So when looking for a graduate they turned to Semta to help support them through the process – with an emphasis on finding someone studying in the North East. “It was an excellent experience,” says Chris. “Semta sent us a number of CVs as well as putting us in touch with both Newcastle and Sunderland University’s career advisory service. “As a result we picked nine graduates for interview – the standard was exceptionally high and made it a very tricky decision.”
Semta made the process much easier than it would otherwise have been, leading to a choice from high calibre candidates Chris Ford, Financial Director, Ford Component Manufacturing
Craig Wilde was appointed as IT support technician having completed a BSc (Hons) in computing science from Northumbria University. Under the scheme, Ford receives £☻1,000 towards the cost of employing a graduate from Semta in addition to a six-month salary subsidy from Sunderland University. “The graduate offer was the tipping point between recruiting or otherwise,” says Chris. “We wanted to bring someone in with no pre-conceptions of the business and to train them up. It is always a risk taking on someone without a lot of work experience, especially for SMEs. “Semta made the process much easier than it would otherwise have been, leading to a choice from high calibre candidates. They were always available to handle questions and queries and we will be looking to them to help with the recruitment and development of future graduates and trainees.” Ford Component Manufacturing and Ford Aerospace are award winning businesses specialising in the precision machining and pressing of components for the aerospace, defence and industrial market. They have two sites in South Shields and one in North Shields and a workforce of 160. In 2013 it surpassed £11m of sales for the first time, including £2m in exports, setting themselves a target of £15m by 2016.
Rochester A year after first visited BAE Systems’ UK Electronic Systems division in Rochester, Kent, Jane Gray returned to see new shop floor-led improvements to production management and explore more of the cradle-to-cradle capabilities on site.
AE Systems’ Rochester site is home to the UK arm of its Electronic Systems (ES) business and to production of some of the most exciting defence technologies on the market. Perhaps most prominent among these is the fighter pilot’s helmet for the Eurofighter Typhoon aircraft. A triumph in electronic systems engineering and aerospace ergonomics which uses augmented reality, delivered through an integrated head up display to provide pilots with unique target tracking capabilities and much faster reaction times. Thanks to strong orders for the Eurofighter towards the end of last year – Oman bought 12 in December – demand for new product at the Rochester site is robust. But the site also keeps busy by providing MRO services to inservice products, testing for continuous improvement opportunities in current designs and creating new generation technologies. It is a unique cradle-tocradle manufacturing environment within the defence industry says manufacturing director, Darren Patterson, and also spins out benefits for civil markets through manufacturing low carbon bus engines and providing test facilities (see box).
More than the sum of its parts
The Typhoon fighter pilot helmet produced at BAE Systems ES Rochester incorporates unique sensory technology
But the technology produced and managed at BAE System’s Rochester site is not the only thing which makes it last visited in early 2012 special. When we discovered how the aim of achieving the Shingo Prize for operational excellence set Rochester on a transformation journey addressing business competitiveness, manufacturing efficiency and, critically, cultural excellence. The plant at Rochester has been on its lean journey for fourteen years. There was a lot of focus on improving tools, systems and processes leading up to the introduction to a second ERP system in 2009. Shortly afterwards, there was a recognition that culture offered the next step in improving operational performance. Proof of high levels of operational excellence were confirmed within a preliminary report submitted to Shingo Prize administrators in January 2013. Today, while continuous improvement of processes remains important, the tests Patterson hopes most keenly to pass when the site is audited in
Electronics BAE Systems
Mission critical electronic flight systems are designed, tested and manufactured at BAE Systems ES, Rochester
Q3, are those relating to employee engagement and proof of sustainable autonomous decision making at all levels in the workforce. This drive for workforce independence has meant a reappraisal of accepted wisdom in organisational structure. The impact of ideas implemented in one function on other areas needs to be seen quickly. The solution is a shop floor-come-office environment where production buzzes around admin islands. We heard during the last visit that the integration of office functions into the shop floor had been an unpopular move with staff at first, but today Patterson says it is embraced from both sides of the former divide. “Having someone in design or procurement working right next to someone in production means that the connections between different people’s work are far more obvious and we can react quicker when something has a negative impact.”
Internally aligned Free flowing communication and common purpose in problem solving is further supported at ES Rochester by the evolution of a flat management
Electronic Systems (ES) at a glance: Revenue: £18bn (2012, BAE Systems group statistics) Employees: 1500 at ES Rochester, 13,000 in ES worldwide. BAE Systems group statistics: 38,000 employees in the UK, 100,000 worldwide ES Overview: The ES sector spans the commercial and defence electronics markets with a broad portfolio of mission-critical electronic systems, including flight and engine controls; electronic warfare and night vision systems; surveillance and reconnaissance sensors; secure networked communications equipment; and power and energy management systems. Headquartered in Nashua, New Hampshire, ES has engineering and manufacturing functions primarily in the United States, United Kingdom, and Israel ES Rochester core products: Sensory helmets, head up displays and helmet-mounted displays, active and passive inceptor sticks, pilot-machine interfaces, fly-by-wire and integrated flight control systems, power and energy management systems Supply Chain: Involves around 7,500 UK businesses
Electronics BAE Systems
core benefit of the open plan working environment at ES Rochester is the scope it gives to visual management and effective KPI tracking. visited the plant the below board When had just been implemented by the Typhoon HUD MRO cell. The board is third iteration of a workflow and performance tracking board which clearly and engagingly shows who is working on what product lines, for which clients and how well each project is doing at delivering on time in full.
Since it can be seen by all stakeholders, the board helps with production planning, workforce management, client expectation management and supply chain management. “The key thing though,” says Mr Reed, “is that when someone comes on shift they can see immediately where they are needed most – they don’t need to wait to be told what to start work on.” The tactile nature of the board, which requires job cards with detachable employee names attributed to them, to be moved along a manufacturing flow line, encourages engagement with manufacturing performance and project delivery says Reed. Numerous IT vendors have approached the site to offer software solutions which claim to replicate this visual management tool, but while Reed says he would consider plasma screen displays for some KPIs, he insists the interactive and accessible nature of the physical board cannot be improved on with a virtual replacement. Patterson agrees. A shop floor meeting around the bespoke KPI and production tracking board
structure. “We’ve really reversed the management concept,” says Patterson. “Traditional management structures are top down, with senior staff approving the training of their teams. But because our BIT [Business Improvement Techniques] training is the same for everyone, no matter what their job title, and because training cohorts include staff from across company departments and pay scales, we are enabling bottom up influence on behaviours and consistent understanding of the way business challenges should be approached.” The company wide BIT training scheme is integral to the Rochester site’s cultural profile. Two years ago, management committed to putting 50% of the workforce through the course – no small investment when the direct costs of an individual’s government subsidised training is around £1000 and the workforce numbers 1500. The BIT training is progressing apace. visited in 2012, three cohorts, When each made up of around 40 employees, had completed the 12 week course which is led by Develop-u’s Laurie Heald who is permanently located on site for training (P55). Today eight cohorts have passed through the training and staff are more than ready with comments on how the
Why Develop-u? BAE Systems delivers its BIT training through Develop-u – a small training provider based in Sheffield. The relationship was established by Michael Tierney, site executive and operations director at Rochester when he joined the business around two years ago. Tierney had previous experience of the firm from his time working on an extremely successful performance improvement project with General Motors in 2009-2010 and felt strongly that its approach would deliver results for the Rochester site. Tierney’s conviction was based on the synergy between Develop-u’s training model and the ethos of the Shingo model for operational excellence which the Rochester site had chosen to pursue as a means of benchmarking technical and cultural progress. Develop-u MD, Sam Morris, says that working with staff at Rochester is “a privilege” and that culture change at the site has been unusually smoothgoing thanks to the complete buy-in of senior management. “We usually
have to go through a period of ‘preparing for change’ with clients,” says Morris. “But at Rochester that ground work had already been done.” As well as offering a good working relationship based on a common understanding of the cultural and business aims behind investment in training, Morris says Develop-u’s enduring relationship with BAE Systems ES Rochester is founded on its delivery record which far outstrips industry standards for training provision. Develop-u has a 97% retention rate and a 100% success rate. Industry averages sit around 80% for both respectively.
Electronics BAE Systems
experience has changed their attitude to work and their relationship with colleagues:
One of the on-site Faraday cages for testing the effect of electromagnetic radiation on electronic systems
AE Systems’ site in Rochester is home to a unique span of manufacturing capability says Darren Patterson. “We are the only UK site to have cradle to cradle facilities,” he explains. “On site we do everything from concept creation through design, testing, production and maintenance and repair.” The test facilities at Rochester are a critical element within this cradle to cradle proposition. In 2005 BAE invested over £2 million in consolidating disparate test capability from different parts of the group into one new building at Rochester. This includes Faraday cages, other EMC test equipment and a wide range of environmental testing technologies, including a unit which simultaneously performs temperature, altitude and humidity tests. Paul Davison, the test centre manager, says that this piece of equipment is extremely rare, “I had never seen one in my career before joining BAE Systems,” he says. The on-site facilities enable BAE Systems to keep a rapid response, closed loop information channel between service performance challenges, design specifications and production processes. However, in trying economic times, they also serve another purpose.
Bringing in extra revenue to augment the commercial value of BAE System’s Electronic Systems business. “Our facilities for EMC and environmental testing are available to third parties at extremely competitive rates,” explains Mr Davison. “There are perhaps only three other testing houses in the UK on the same scale as us.” Mr Davison says that commercial throughput is increasing at BAE Systems Rochester’s test facilities all the time. “This is not a direct response to offset defence budget cuts,” he clarifies, “but we are driving this to make the Electronic Systems business more efficient and self sustaining.” The facility generates around £1m in revenue for the site each year. The majority of external business is in the environmental testing area, where clients can put their products through their paces in an explosive decompression chamber, salt spray and driving rain simulations, a 30G centrifuge and various shock and vibration tests to name just a few. “Lightening strike and nuclear radiation tests are the only things we don’t do here,” says Davison.
Michael Tierney, site executive lead and operations & supply chain director: “BAE Systems is one of the world’s leading companies engaged in the development, delivery and support of leading-edge aerospace and defence systems in the air, on land and at sea. In partnership with our industrial partners who are trusted to deliver the missioncritical technology they need, we trust our employees to draw on their ingenuity and passion to deliver those solutions. Our Leadership team is open to ideas, collaboration and engagement, driving retention by fostering an inclusive environment of exciting work and innovation, and providing full guidance and mentoring to employees. This leads to an empowering culture for our people.” Gary Somerset, senior buyer: “I completed my 12 week BIT Project on the 15th May 2013. I could not believe how quickly those 12 weeks passed. I found the whole learning experience very fulfilling and the techniques that I learnt can be used in my day job. I would certainly recommend undertaking a BIT project to anyone who works in a manufacturing environment.” Darren Andrews, facilities controller: “BIT is a great way of bringing everyone together using the same thought process, helping them break down problems and issues as a team and giving them the tools to look for solutions.”
Patterson hopes this forthcoming enthusiasm, backed up with confident business and production process acumen will stand ES Rochester in good stead next quarter when Shingo auditors descend. They can pick any staff member at random and ask them to demonstrate their awareness of overall business values, objectives and best practices. To be continued!
Change for the Good an astonishing journey
evelop-u is an award-winning training and consultancy organisation with a reputation for delivering business solutions that make tangible and sustainable differences to organisational performance. Established in 2005 and based in South Yorkshire the team at Develop-u have worked with a variety of businesses across Europe in the manufacturing, process and service sectors. Back in July 2010, Develop-u where invited by BAE Systems Electronic Systems to become an integral part of the organisations’ long term strategic and developmental vision for their Rochester site. One of their KPIs is to become one of a small number of UK companies to achieve the much desired Shingo Prize for Operational Excellence. Through a creative and collaborative process, Develop-u and BA Electronic Systems have created an innovative programme designed to support the operational objectives highlighted within their Shingo brief. BAES are recognised globally for investing substantially and consistently in the development of their workforce. During our first meeting with the senior team at their Rochester site, it was clear that they wanted the partnership to add real tangible value and ensure that the programme would not be viewed as cliché or fad like, which was ‘Music to our ears’ recalls Glen Broughton, Regional Manager of Develop-u. Almost 3 years on Glen reflects; “It has been a privilege to work in such a positive environment. Group after group of amazingly wonderful people turn up for the knowledge workshops with a passion for learning. This type of audience makes my job very easy and a consistently pleasurable experience. I wish to thank each of them for being amazingly wonderful people throughout the programme”. Sam Morris, Develop-u’s Managing Director adds, “The senior team at Rochester have delivered everything they promised back in 2010, and much more. Even though their individual
workloads have been heavy, they have demonstrated absolute commitment to the success of this programme. For any change programme to deliver long term sustainable benefits it needs internal sponsorship and this team have been hugely enthusiastic and participative for each day of our relationship; this level of support has enabled Develop-u to have such a positive impact.” To date, Electronic Systems Rochester has put more than 350 of its workforce through the innovative Business Improvement Techniques programme facilitated by Develop-u with outstanding success rates: 97% retention and 100% achievement. Angela Ireland, PA to Mike Tierney - Site Executive Lead, who works closely with Develop-u to organise and enthuse participation says, “Develop-u are not just providing Business Improvement Techniques training to our staff, they are coaching and supporting every employee that takes part. There has been a significant increase in the confidence of these employees and their desire to improve their working lives. The training has also been instrumental in supporting BAE Systems, Electronic Systems – Rochester in its journey to create a culture of continuous improvement”. The most recent B-IT improvement projects have generated multi million pound savings for the site across the areas of efficiencies and productivity, resulting in increased levels of staff morale as well as generating real positive interest and expectations for those about to enrol onto the B-IT programme. Develop-u’s successes are primarily attributed to its unrivalled levels of learner support, engagement and passion. By using a holistic approach
to up-skilling, Develop-u energise and equip the workforce with not only the hard tools and techniques but equally as important, promoting the beneficial impacts of positive behaviour and then nurturing a community of shared best practice. Another distinct feature of the Develop-u programme is the added value of providing a full time coach on-site dedicated to supporting each delegate through a rapid and comprehensive learning journey for the entire length of the programme. Laurie Heald, Lead Coach Assessor states, “It continues to be a privilege and an amazing experience supporting and coaching the employees at BAE Systems Rochester along their journey of Continuous Improvement. Being an integral part of this journey, we are able to maintain individuality of our programmes and therefore continue contributing to BAE Systems’ strategic, developmental and cultural transformation”. Craig Wilkins, Test Engineer BAES Electronic Systems who joined cohort 9 in January 2013 recently said in an email to Laurie Heald “when first asked to join the B-IT programme I was unsure about the benefits to me and I didn’t really know what to expect. Nearly half way through the course I am really enjoying working in a project improvement team and the progress we have made is astonishing. With the support of yourself as a coach coupled with the new techniques we have learned, particularly the ASME report, I’m happy and confident that our project is moving in the right direction” To find out more about Develop-u or to arrange a site visit to explore how we could support you and your organisation please contact our team on 01709 789 567 or visit www.develop-u.co.uk
Published in association with: Develop-u Tel: 01709 789 567 Fax: 01709 789 301 Email: email@example.com Web: www.develop-u.co.uk
Workforce and skills: Apprentice training
Bigger, better but still in Birmingham EEF is relocating its Apprentice Training Centre, creating a new national hub for its skills services and expanding its training capabilities. Jane Gray explores the motives for the move, the logic for the new location and what will be on offer.
n 1999, back before apprenticeships were again fashionable and politically catchy, EEF recognised the need to support manufacturers in developing their future talent and, stepping up to its responsibilities as the sector’s umbrella trade association, it invested in a specialist training centre in Tyseley, Birmingham. Over the past decade the centre has helped UK manufacturers, both EEF members and non-members, train over 1000 apprentices as well as providing support for the re-skilling and up-skilling of those already working in the sector. But recently, resurgent interest in skills investment has put pressure on the ageing site. Teaching facilities, both technical and classroom-based have become stretched, both due to increasing volumes of trainees, and diversifying apprenticeship pathway options requiring more resources and additional capital investment.
Rather than remain limited to the boundaries of its current location, EEF recently took the decision to invest substantially in relocating the training centre.
Birmingham base The new centre will still be in Birmingham, housed in a specially reconfigured building in Nexus Point, Witton. Peter Winebloom, EEF’s apprenticeships and skills director explains why the trade body was keen not to stray too far from its existing location. “We must minimise disruption for existing trainees and their employers. Birmingham has good transport links for a wide catchment area so people can come from quite far afield to study on a day release or block basis at the centre. We have partners in Birmingham who assist when employers want to place trainees on a residential training model with us.” For any employer concerned about finding new transport arrangements to get trainees to
The centre is like a model factory rather than an academic centre and every apprentice has their own dedicated workstation Peter Winebloom, Director of Apprenticeships and Skills, EEF
and from the new site, Mr Winebloom assures, “We will be providing shuttle services to and from local train stations as demand dictates.” For those beyond the Birmingham catchment area, Winebloom is keen to emphasize that the centre will also support expansion and improvement of EEF’s nationwide managed apprenticeship service. “This is delivered in partnership with a selection of preferred colleges, Group Training Agencies and other training providers,” he explains.
What’s on offer? While EEF’s skills services include bite-sized reskilling and up-skilling courses to help employers keep their workforce on top of technology advances and new approaches to production operations, Winebloom says that level two and three apprenticeships in mechanical and electrical engineering are the “bread and butter”. This will continue to be the case at the new centre, though delivery of higher apprenticeship pathways is increasing. The centre also plans to support traineeships under a new training model from the Department of Business Innovation and Skills to help “pump prime” the apprenticeship system with appropriate, quality candidates. Apprentices training with EEF can expect high quality training provision, Ofsted audited at Grade 2. “We only deal in manufacturing training,” says Winebloom, “so customers can be sure we are focused on providing the best facilities to support that. The centre is like a model factory rather than an academic centre and every apprentice has their own dedicated workstation kitted out with the equipment they need, whether that be CNC machines or CAD stations.” Over the next five years there are plans to considerably augment the technology available to support training. “There’s a clear plan for capital investment every year as well as a strategy for an increase in staffing,” Winebloom says. The cost of training apprentices with EEF is discounted for members and the trade association also ensures that it makes maximum use of funding available via the Skills Funding Agency in order to minimise costs for employers. “We are not an outright commercial enterprise,” asserts Winebloom. “The centre must cover its costs and allow us to reinvest but our primary concern is to make sure UK manufacturers have the skills they need to be competitive.” EEF hopes to welcome around 100 new apprentices into the relocated centre in its first year. @janefagray
For more information visit: www.apprentices.org.uk or contact: the Centre on 0121 707 1414 or email: firstname.lastname@example.org
f o e e y o l Empmonth the 013 2 June
Rhys Long Trainee Production Engineer, GE Oil & Gas Oil & Gas is a booming sector in the UK (p24). It also pays the highest engineering salaries according to a recent report from recruitment firm Micheal Page, and there is fierce competition for blossoming talent like that Rhys has displayed during his training. What are main responsibilities of your job? My job is designed to support me through my BEng Mechanical Engineering degree. I recently moved into the role after a year as a Production Engineering Technician for the Wellstream flexibles facility in the UK. My main responsibilities are providing technical sustainable solutions to the Newcastle manufacturing facility, to improve efficiency, throughput, quality and safety
CV in brief: Rhys Long
Age: 24 Employment:
Higher apprenticeship through Wellstream (4 years) 1 year as a Production Engineering Technician Trainee Production Engineer
11 GCSEâ€™s ranging from A* to D (D in German, language was not my strong point) 4 A-Levels: Maths C, Physics C, Graphics C, Fine Art B Higher apprenticeship, completing an HNC with Double Distinction Currently in my first year of university studying for my BEng.
Health and fitness, anything to do with cars, taking my 2 year old son to his rugby class.
while complying with relevant standards and legislation. What are the key technical skills you use? Problem solving techniques such as the defect elimination, 5 Whys and root cause analysis are core. Applying project management skills to deliver solutions in a timely manner is also important. These solutions may be my own or outsourced.
What are the most rewarding parts of your job? The most rewarding part of my job is physically seeing the improvements I have made within the factory enhancing processes. I take a lot of pride in the work I do, so it is always a reward to see somebody using something I have implemented. What will be your next career move? The next step will be to hopefully persuade the company to allow me to progress further on my MEng and gain Chartered status, ideally becoming a more senior member within my department or within another part of GE Oil & Gas.
What personal characteristics help you in your role? I am a well-motivated, confident and dedicated individual with good interpersonal skills. I communicate effectively on all levels within an organisation and participate effectively as a team member as well as taking an organised approach to completing my own work. I am a creative, innovative thinker. I am always eager to learn new skills and to enhance those I already possess.
Do you have a grand career ambition? I hope to work my way up through the levels of an organisation whilst still being able to hold onto a technical role, such as a Principle Engineer.
What do you consider to be your biggest personal success at the company so far? Being given the opportunity to progress onto my degree. This gave me a confidence boost as it showed that GE Oil & Gas is pleased with my work ethic and wants me to progress to the next level. It was always my personal goal to become degree qualified.
How do you think best to get more young people interested in manufacturing? More companies should be following the example set by GE Oil & Gas and openly advertising apprenticeship opportunities at open days and on factory tours.Work experience days when in secondary school are a great way to help decide on which path you want to follow; therefore more employers should approach local schools and introduce the younger generations to manufacturing.
What first attracted you to a career in manufacturing? I have always been interested in the mechanics of how things work and my Dad has always worked in different manufacturing sectors so it was also what I was used to. Learning through an apprenticeship was attractive as it gave me the chance to develop my engineering and business knowledge simultaneously.
Have your say at www.themanufacturer.com
EEF member benefit Westfield Health provides a health cash plan exclusively to EEF members. The plan is part of the EEF Advantages programme and encourages employees to be proactive about their health by providing a set amount of money back towards their essential healthcare. For more information about how the EEF Plan can help you manage the healthcare needs of your business, visit www.westfieldhealth.com/company-healthinsurance/membership-organisations/eef
Paul Shires, executive director at health insurance provider Westfield Health, looks at how recent NHS reforms could affect the way manufacturers manage the health of their workforce.
n April, the NHS underwent some of the biggest changes in its 65-year-history, scrapping Primary Care Trusts (PCTs) and handing over around 60% of the NHS budget to new GP-led Clinical Commissioning Groups (CCGs) to choose which healthcare services they fund in their area. For employers, it’s easy to assume that unless your business specialises in healthcare, the changes won’t affect how you run your company. But take a closer look and in fact, the impact could be bigger than you think. The NHS has to save a staggering £20billion by 2015 in order to meet government
targets, so, as CCGs assess the health of those living and working in their area and choose what services to fund – they’ll also be looking at ways to reduce spend. And, as a result of this, some service provision will inevitably be restricted or cease to exist entirely, meaning accessing free healthcare in England is unlikely to remain as commonplace as we’re accustomed to. Some treatments could become more difficult to access through the NHS and for employers this could spell increased sickness absence, as staff require more time off while waiting. In 2012 the Patients Association revealed that NHS
Have your say at www.themanufacturer.com
waiting times for elective surgery had already risen by 6%, meaning patients requiring non-urgent surgery, including hip replacements, gallstone removal and hysterectomies, have to wait longer for treatment. Long-term sickness absence is on the increase, largely due to a rise in mental health issues such as stress and depression and also, musculoskeletal (MSK) disorders. In an industry such as manufacturing, the latter can be a persistent problem, with the potential for sprains, falls and repetitive strain injury-related symptoms associated with manual work. A recent national rheumatology conference acknowledged the “massive burden” of work MSK conditions placed on the NHS. A fifth of people (20%) need to consult their GP about MSK illnesses, which in turn sees the UK economy lose 7.6million working days a year. But it is not just manual workers who may be affected – 80% of us are likely to suffer from back pain at some point in our lives. With the health service under huge financial pressure, employers will increasingly need to provide staff with the ways and means to access care and treatment for common problems like this. And when it comes to health, prevention is often cheaper than the cure. Employers who invest in the tools to manage the everyday healthcare of staff help get potential problems such as back pain dealt with before they develop into chronic long-term health issues. With absenteeism costing the UK’s private sector £3.1billion every year, maintaining a healthy workforce is vital not only to productivity, but the bottom line too. So, introducing a health and wellbeing strategy is essential.
Industry meets University
The part-time post grad
Research and learning facilities at Cranfield University
Adam Holliday, manufacturing engineer at Rediweld, reveals the super-charge a Cranfield MSc is giving his manufacturing career.
started my further education in Robotics and Automated Systems at the University of Plymouth and, during the industrial placement year of my BEng degree, found myself working for a medium sized manufacturing company as its first placement student. Two years after starting this placement, I was asked to return to Rediweld Rubber and Plastics as a full time manufacturing engineer within its Technical Moulding facility. Rediweld Technical Moulding offers services for technical moulding of thermoplastic injection, thermoset compression and rubber injection & compression moulding. It also has secondary operations for low to medium volume production for technology sectors such as aerospace, defence and medical and is AS9100 certificated as well as being actively involved with the ADS SC21 initiative. Rediweld has undergone some significant changes since I re-joined it nearly three years ago and these changes have required succession planning and personal development for employees. As part of these initiatives I was offered the opportunity to further my studies and take an MSc. This was the first time Rediweld had ever offered
The knowledge I have gained has caused me to be invited to the table on discussions which previously I would have had no involvement in
this level of training to one individual and I jumped at the opportunity. After looking at several Universities, I selected Cranfield. Its post-graduate only approach to learning, impressive collaborative working relationships with industry and distinguished list of alumni really appealed to both Rediweld and me. Cranfield offered a fertile ground for proactive, industry relevant learning activities. Within my first week of study, I was clearly able to see the links between what I was being taught and how it could be applied in the real life factory setting. I immediately began to bring back what I had learnt into our facility. Every module I have completed so far has allowed me to gain a greater knowledge which I can apply in the workplace and increased my drive to help bring about small and large changes within the company. I have also been able to disseminate the information which I have learnt to others, expanding the impact and value of Rediweldâ€™s investment in my degree. I am currently working on my dissertation, a piece of work which is having a direct impact on the functionality of the company. The aim is to significantly alter the business methodology and structure for
several departments over the coming months. The knowledge I have gained has caused me to be invited to the table on discussions which previously I would have had no involvement in. I have been invited to manage several projects with varying budgets simultaneously, been able to influence major company decisions and help develop both short and long term business strategies. Without the direct involvement of Cranfield in furthering my education, I do not feel that my current position would be so involved and influential at this early stage in my career. The decision to take on a part-time MSc is by no means easy. At times it can be quite stressful with long working days and the occasional late night to ensure that all the work is kept on top of. However, the benefits of additional knowledge from highly experienced lecturers in a range of fields from operations through supply chain, maintenance and more has certainly cemented in my mind that a part-time MSc at Cranfield University was the correct decision to make. With 15 months left to complete my study, I am looking forward to the challenges ahead both at Rediweld and at Cranfield.
The Late Payment of Commercial Debt Regulations 2013 came into force on March 16 2013 and aim to encourage the prompt payment of invoices, easing the cash flow burden on small and medium sized businesses. Jayne Hussey, partner at law firm Pinsent Masons moots the effectiveness of this overdue action on payment prevarication.
he Late Payment of Commercial Debt Regulations 2013 implement the requirements of the EU Late Payment Directive and apply to contracts for the supply of goods or services made on or after March 16 2013.
Under the Regulations, businesses contracting with one another can agree payment terms of up to 60 days after the latest of: the date of the customer receiving the goods or services receiving the supplier’s invoice verifying or accepting the goods or services (where this is relevant)
1 2 3
The rules for public authorities are stricter in that they should pay for goods or services supplied within 30 days of the latest of the events listed above. So far so good. However, it’s worth noting that it is open to the customer and supplier to agree payment terms beyond 60 days provided that the extended payment terms are not “grossly unfair” to the supplier. In interpreting what will be treated as grossly unfair, the
regulations provide that this will include any terms inconsistent with good commercial practice or which could be viewed as contrary to good faith and fair dealing. Whether the customer has an objective reason for requiring a change from the statutory provisions and the nature of the goods or services being supplied will also be relevant considerations. The consequence of a customer failing to pay on time in accordance with these regulations is that suppliers will have the right to charge interest, claim compensation and secure from the customer the reasonable costs incurred in recovering any amounts due. However, there is no absolute statutory limit on the payment periods that can be agreed between businesses when entering into their contractual arrangements. Therefore, in practice, customers may
Professional Services: Late Payments
continue to exploit their bargaining power and dictate extended payment terms. As such, the impact of the regulations themselves in encouraging speedier payment of suppliers may be limited. In addition, the new regime is self-regulating and there remains uncertainty as to whether small and medium sized suppliers will enforce the provisions of the regulations for the same reasons they accept such long payment terms in the first place – fear of damaging commercial relationships with their customers. Regulations aside, suppliers can help themselves by checking that their invoicing systems are operating effectively and that the business has the capacity to turn invoices around swiftly. Suppliers should also ensure that payment terms are agreed up front before supplies are made. Finally, despite the limited effect of the regulations from a legal perspective, the way in which customers are managing their supply chains is becoming subject to increased public scrutiny and with it comes the risk of reputational damage. For example, Carillion recently moved to 120-day payment terms, and the Government subsequently faced calls to exclude it from any future public sector work. Similarly, GlaxoSmithKline has been subject to negative headlines as a result of its decision to extend payment terms from 60 to 90 days. Overall, if they are to have the desired effect, the onus should be on customers to install a culture of prompt payment within their organisations. In practice, maybe the reputational, as opposed to the legal, risk of failing to comply with the ‘spirit’ of the regulations will cause customers to reassess the way in which they treat suppliers and ensure that payments are made on time.
Manufacturer comment on the Late Payment of Commercial Debt Regulations 2013 Chris Mulvihill, Manufacturing Director, EMS Manufacturing “The regulations are an interesting and somewhat overdue acknowledgement of the difficulties often faced by SME companies. “Clearly, the balance and predictability that 60 day terms would give would be of great benefit to the wider business environment. But without supporting legislation to drive adherence to the payment terms described here, the regulations will not be of general benefit to business, and the problems caused by the unreliability of late and missed payments is unlikely to be improved. “At EMS, we work very proactively to identify payment risk and the attendant risk of disruption to the business at an early stage, and manage it through a range of payment strategies accordingly. In this way, we have been successful in reducing the problems caused by late and missed payments.” EMS Manufacturing turnover: £10m
Number of employees: 115
Margaret Wood, Managing Director, ICW “Late payments cause a lot of problems for SMEs particularly in the manufacturing sector which is where the recovery and growth are going to come. “These regulations apply some external pressure and give SMEs the option to levy interest and charges, thereby providing them with the ability to exert some influence for early settlement of bills. “Disappointingly however, there are still grey areas which mean the onus is on the supplier to try and negotiate strict payment terms and this can be difficult when you are pitching for business and price is part of the equation. “What suppliers have to do is recognise their unique IP and USP and ensure they sell their products and services on that basis rather than on price. “This initiative from the Government is to be welcomed but ironically it is the public sector which can often be the biggest culprit for late payments. Big customers must realise that to enjoy continued benefits in dealing with niche suppliers manufacturing the bespoke parts they need, they must work with, rather than against SMEs. It’s a partnership.” ICW Manufacturing turnover: £600,000 Number of employees: 5 Robin Phillips, Financial Director, Siemens ”These regulations are certainly a step in the right direction for manufacturers, especially SMEs that are struggling in a tough market, where cash flow is tight and favourable credit is very scarce. What is helpful, is that these regulations seem to have a bit of teeth, but what is vital is that employers educate their workforce as to merits of paying on time and to schedule. Ultimately it is an issue of business values and corporate social responsibility, as much as it is a regulatory issue” Siemens turnover: £3.2bn Number of employees in UK: 13,520 (8,000 in manufacturing)
Finance Insurance and Professional Services: Investment
Rob Law, CEO of Trunki
Trunk road to
success Trunki is famously the one that got away from Dragons’ Den. Six years after founder Rob Law’s idea for children’s luggage was rejected by television’s infamous ‘Dragons’, his business is a huge success. Mark Bryant, business director of the Business Growth Fund, explains Trunki’s journey and his organisation’s commitment to its future growth.
hen Business Growth Fund (BGF) was offered the opportunity to invest in Trunki, it wasn’t going to make the same mistake as Theo Paphitis, who said no to the company after breaking a prototype, and his fellow Dragons. BGF invested £3.92 million of growth capital in Trunki in April, acquiring a minority stake. It also introduced Stuart Rose, the former chairman of toyshop Hamleys, to the company – he is now a non-executive chairman.
Trunki’s original ride-along suitcase is now just one of a range of products sold into 96 markets worldwide. Company revenues are expected to hit £10m this year. But it’s the strength of Trunki’s brand that’s really exciting. It has created a new sector in its market – there was no children’s travel gear market before Law came along – and it has phenomenal potential to expand internationally. While the business already sells worldwide, it has never had the capital required to optimise sales and distribution infrastructure in key territories. BGF’s investment will make a real difference – and add to a growing portfolio of British manufacturing investments including: M Squared Lasers, Magma Global and STATS.
A story of manufacturing saved In its early years, Trunki outsourced all its manufacturing, primarily to China. But in May 2012, the company made headlines by moving some of its production back to the UK, to a British company working out of a factory in South Devon. Trunki was keen to exert greater control over production for the UK market and was able to cut production time from 120 to 30 days. It recognised that shortened leads times and development times, coupled with IP security, make UK manufacturing attractive. The move surprised many in the business community, who assumed that the move would substantially raise the company’s costs. But in fact, while UK manufacturing requires a higher unit cost than had been the case in China, shipping, duty and currency costs mean the pricing is actually on par. Any manufacturing cost advantage in China can be quickly eroded by the additional management time, trips to the Asia, working capital tied up
while the product is on the water, resolving quality issues and the occasional need to airfreight to expedite product. Moreover, Chinese manufacturing is no longer a bargain basement option – labour costs have tripled over the past six years and will continue to rise as the country’s economy develops. ‘Onshoring’ has not been without its perils for Trunki however. Last November, it looked as if the decision might come unstuck when its supplier announced it was unable to continue trading. Undaunted, Trunki bought the business from its administrators and now owns the Plymouth manufacturing facility outright. The new factory, Magma Moulding, continues to supply Trunki’s UK operation, as well as a number of other clients, and Law has plans to scale up its production.
Rebalancing role model Had Trunki not stepped in, it’s likely the factory would have closed, with the loss of all jobs. Instead, the facility now employs 44 workers to service Trunki and external clients, in addition to the 30 employees based in Trunki’s head office. It’s a refreshing change from the more typical model for British companies, which often employ a small number of designers and managers in the UK, but outsource production to much larger manufacturing workforces overseas. Trunki’s business model of aggressive expansion overseas – particularly now it has BGF’s investment – is made easier as it already uses manufacturers in locations such as China and the US in order to supply markets in those regions. But its commitment to manufacturing in the UK, supported by BGF, is exactly the sort of rebalancing of our economy that policymakers have for so long advocated. www.businessgrowthfund.co.uk
Change management - RBS
Managing change: delivering growth Our growth series, showcasing UK manufacturer’s efforts to accelerate innovation by refocusing on R&D, new technologies and production processes, highlighted that management teams are keen to reequip and reinvigorate British industry. In this article RBS’s Peter Russell examines how the management and implementation of change is crucial to a successful outcome.
Change all round Competing in today’s markets requires a fundamentally new way of thinking. Manufacturers are recognising that business models, introduced for the long-term just a couple of years ago, may no longer be relevant as customers and markets keep moving forward at a rapid pace. As a result, existing operational and delivery systems might no longer be sufficient to drive long-term competitive advantage and
sustained financial performance. (1) To help protect future viability UK manufacturers are focusing more and more on accelerating R&D projects, developing customisation strategies accessing new markets and adopting new technological innovations. Such an agenda brings with it a need to carefully introduce and manage change in the workplace with those who are successful standing to benefit the most. Hence it is no
surprise that hardly any other topic has been covered to the same extent by a wide range of publications. There is plentiful advice on how to approach change management, but Sasha Jory, head of change at the RBS Corporate & Institutional Bank cautions to not overdo the planning: “If you want to plan everything that might happen when launching a change campaign you will never leave the planning phase.”
Success criteria for change Jory, who has worked on change projects for over 15 years, makes it clear that there are always risks when implementing change measures: “Employees might misinterpret what you say, there could be pockets of resistance or people simply react differently than anticipated to the new strategy.” Good change managers can
(1) SMARTBUSINESS, January 2012
react quickly to negative responses and problems that arise, but most importantly they know the success criteria for change management. Jory lists the following: Clarity of vision and a compelling story Constant, clear and targeted communication Honest and open approach Feedback & empowerment The right dosage
change people can absorb at any one time. “Small amounts properly sequenced and implemented are essential,” the RBS change manager points out. “Try it, test it, if it works move forward. Then again, try it, test it and if it works move forward,” Jory describes the key principle for successful change: “Rather than being overwhelmed the staff will be enthusiastic about the change because they can see immediate results.”
Tell it as it is “If people don’t understand the rationale behind a new strategy they will often resist the change”, says Jory. Therefore it is crucial to provide clarity about what is changing and why: “You need to explain what the challenge or problem is, how you are going to address it, why you’ve chosen that solution and what the benefits as well as the downsides will be,” Jory points out, adding that a compelling story should reach the hearts and minds of the employees and as a result will get them positively involved in implementing and owning the change.
Communication: one size doesn’t fit all Managing change requires targeted communication. Jory observes: “Not everyone is affected by a new strategy in the same way. Some will benefit, some may face negative consequences. In the worst case, some might lose their jobs.” Key messages and detailed, relevant information needs to be prepared for each target group. Ideally, staff within the change communication team should be ring-fenced to work on the storyboard and to ensure the different communication goes out in a timely manner.
Bad news first Dealing with the bad news first is essential Jory has found: “Staff negatively affected by the change need to know straight away. An open an honest approach needs to be transparent.” Equally, staff benefiting from the change, ought to be informed about their job being safe prior to receiving greater detail about what is changing and how.
Ensuring positive involvement Active involvement of staff can only happen when they have the chance to feed back and when they see that changes to a new strategy are made because of their feedback, Jory emphasises. “Senior managers shouldn’t be afraid to change the path, and they must be clear about what they changed based on the feedback they received. A positive attitude to input from staff at all levels will not only help improve elements of the strategy but will reinforce the message that change can only happen with everyone on board.”
The right dosage Probably the most overlooked fact whilst planning change is the fact that there is a limit to how much
We had changed the mindset of 10 people [with the pilot programme], but we needed to change the mindset of 600 Colin Larkin, Plant Manager CNH UK
Change embedded in corporate culture For Jory there is an overriding goal for a good change manager: “Change needs to be embedded in the corporate culture,” she says. “You know you’ve been successful with your change management programme when your team says ‘We don’t stop now, we can and we want to move even further’.” In her experience actively involved staff will always impact the financial performance of a company: “Clients will be enthused by a company that positively changes with them and stays innovative.”
Case New Holland – a change pioneer Colin Larkin, plant director at CNH UK, couldn’t agree more with this observation. A world-leading manufacturer for agricultural equipment with more than 100 product models and businesses in more than 170 countries, it follows a change management programme called World Class Manufacturing (WCM). “The programme is based on ten pillars,” Larkin explains. “The starting point was to get a much better understanding of our costs.” For this purpose he pulled together a pilot team of six to ten people who looked at every element of their production process. “We covered questions such as: How does the stock gets to us? How long does it take for the product to get from one work station to another? And along the way we asked ourselves constantly Where could we save time? Where could we be more efficient and ultimately where could we save money?”
Changing the mindset The work of the pilot team at CNH UK changed the site’s outlook on production waste and how the production processes were managed. This supported improvements in terms of quality, costs and efficiency.
Change management - RBS Change was implemented where necessary and the next step was to increase the cost consciousness of all staff. “We had changed the mindset of 10 people, but we needed to change the mindset of 600,” Larkin points out. The staff were invited to come forward with suggestions how to improve the cost environment in their specific areas and competitions were launched. Larkin recalls: “The number of ideas we received from our team were constantly increasing.” Two years ago the management team decided to base one element of the staff bonus on the quality of suggestions coming from the teams to ensure that the employees remained involved.
Everyone can own a project At the plant in Basildon, Larkin is consistently endorsing the message that whoever wants to change something has to own the project. “The management team discusses with the relevant team the purpose, the actions, the benefits and downsides of the project, and afterwards it is theirs to manage.” Project ownership has increased staff confidence: “In the beginning only senior managers would report about ongoing projects, now the workforce present their projects and update us on the progress made.”
No delays in implementing change A major contributor to the plant’s success in implementing change is the team’s can-do-attitude: “Some projects can take two years to deliver, because you may not have all the tools you require. But instead of waiting for those, we see how much we can already deliver now and often find that we can get a 70% improvement immediately. So we go with that and tackle the other 30% later.” A trial-and error policy is equally important: “We can’t always be sure about the outcome of all our projects. But we still often decide to do them as they can provide a valuable learning curve.”
Cost savings spur further innovation and investments Since its launch in 2007 the WCM programme has brought in annual cost savings in excess of £1.5 million at the UK plant. At the same time, accidents have been reduced by 20%. On top of this the quality levels of the products leaving the plant has improved year on year, as highlighted in regular Customer Satisfaction Surveys. The financial success has motivated staff to go even further. “Our commercial team decided to invest in a new customer showroom, and we have received very positive feedback from our customers.” The number of visitors wanting to see the plant has also increased significantly – a positive domino effect.
made. The plant looks very good today, but it will be 20% better in two years time,” he predicts. Training courses around Europe and a comprehensive offer of learning material for selftraining ensure that the positive and proactive attitude towards change is kept alive.
Where will your business be in 2023? Change needs to start now The competitive marketplace requires manufacturers more than ever to devise new strategies to outpace the competition. This will include becoming more responsive towards customers and within the supply chain. Consequently manufacturers will face increasing amounts of change that will need to be carefully implemented within the organisation, making sure that everyone involved understands that only businesses that are prepared for and capable of change will be fit for the future.
If you want to gain further insight please 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: email@example.com
Sasha Jory Head of Change and Managing Director Customer Experience, RBS Corporate & Institutional Banking T: (0)20 7672 2329 E: firstname.lastname@example.org
Colin Larkin Plant Director, CNH UK Ltd New Holland T: (0)1268 292300 E: email@example.com
Keeping up the momentum Larkin sees it as a key task to keep the momentum going. “We constantly remind ourselves of the big vision and scrutinise the progress we have
a firm path
Repatriating manufacturing is a difficult furrow to plough says Amtico’s CEO, but for company and country it has become core to the flooring manufacturer’s strategy. Jane Gray finds out why.
mtico is a rare breed. Not only is it one a handful of European manufacturers still producing vinyl flooring outside Asia. It is the largest employer manufacturing in its home town of Coventry and can display impressive financial results for the last decade. These show that, far from hanging on by its fingernails, it is a competitive force to be reckoned with. Strong strategic purpose has been core to the company’s success. Since it started trading in 1964 it has only had two CEOs, both of whom have taken the company from strength to strength. “My predecessor was sent in to close a loss making subsidiary of Courtaulds,” reflects today’s CEO, Jonathan Duck. “Ignoring those instructions, he created the foundations of a brand which today has 20% of the global market share in luxury vinyl flooring”. But while Amtico can make bold claims to more than 60% return on capital employed and more than a 75% increase in profits since 2006, its growth trajectory has not lacked challenge. “Where we have had greatest success is where we have had a tight focus on what to do, and what to avoid. Our business model is as much about what we are not, as what we are,” Duck says. Over the past decade, defining what Amtico is, and is not, has meant treading a fine line between following markets and preserving the integrity of a
premium brand. “For a while we chased being ‘the cherry on the cake’ by developing an additional, even more exclusive line to our core range,” recalls Duck. “But we found that there was little demand for this advanced flooring technology – which was hard to produce and to market. We changed tack and by the time recession hit we had a well established alternative – Spacia – which took a ‘turn and fight’ strategy, diving down into the large middle part of the flooring market. It is still quality, but at a lower price.” Launching the Spacia brand to support growth posed a difficult trade off for Amtico. It required higher volumes for sale at reduced margins. There was also a danger that the lower price product would cannibalise the existing business. So Amtico introduced its new product carefully. “We launched Spacia in Australia, where Amtico only had a small existing presence, and worked with a Chinese OEM to bring production of Spacia up to the required quality.”
Watch and learn But come 2008 – after trialling Spacia production in the US – the company started to bring Locations: Coventry, UK manufacturing of Spacia back (HQ); Solihull, UK; Paris, to the UK. France; Stockholm, Sweden; Unlike other manufacturers Dusseldorf, Germany; Conyers, who have repatriated, Duck Georgia, USA; Madison, says his strategy is not driven Georgia, USA; Hong Kong; by quality concerns. “The Dubai; Sao Paulo Chinese material was great – we still have outsourced Employees: 600 (330 in UK) production there, which we use to help even out demand Turnover: £115m and stock.” Core products: Flooring Tiles Instead what the company quickly saw was Core markets: USA, the opportunity to use the Continental Europe, UK. Chinese factory as a standard Primarily commercial for internal efficiency. “The customers quality was excellent and the cost of Far East production Ownership: Company was to begin with was clearly originally part of Courtaulds, lower – but they weren’t with an MBO in 1995 and doing anything that we could a further MBO in 2006. In not recreate by improving 2012 Amtico was acquired our processes. We started by US flooring company, using China as a place to Mannington Mills learn from, without disrupting production or quality for our core brand.” A near threefold productivity increase per employee over the last decade – with a particular upswing since 2008 – shows that Duck’s faith in his workforce was not misplaced. Production benchmarks from China now support competitive manufacturing in the UK. Coventry can match China on cost and productivity. “Repatriation has made great sense on a marginal cost basis and while the full cost is a closer call, UK manufacturing still wins out,” says Duck.
Amtico at a glance:
Costs and benefits “When we started producing in the Far East, the workforce here thought it was curtains,” he admits. “We had a difficult communication job to reassure everyone. The visual management and displays we have around the factory today reinforce the message that manufacturing in Coventry is not just about what is good for the company, but what is good for the country. In the UK, we need to address our trade deficit. As an export led business we are playing our part.” Clearly however, competitive necessities do weigh in the balance and – provided production costs can be kept
competitive, manufacturing in the UK brings other benefits for Amtico in terms of responsiveness. “We work closely with customers. We believe in both differentiated products and differentiated sales, so except in some particular markets like Spain or Russia, we use our own direct salesforce rather than selling through distributors. “But even with these close relationships, we rarely have order visibility beyond a week or so. We may know that a hospital is being built and that it will order our floor – but the order is often not placed until a few days before the contractor has to install it. In high street retailers – where we supply a lot of floors – decisions to refurbish will be made on the basis of the past quarter’s performance. An order will not be made until the retailer knows the last few weeks’ trading justifies refurbishing some of the stores.” Volatile orders have been exacerbated by the deep impact of the recession on construction. Duck says business is kept in balance through careful monitoring of cash and use of various forecasting and ERP systems. In due course, Amtico plans to move onto an integrated SAP business management backbone to bring this management challenge together.
Amtico outlook Today, the outlook for Amtico is rosy. It is in the process of installing a new £5m calendaring line, which will double its plastic processing capacity. It also has a strong pipeline of product innovation, which now includes development work for its new owner, Mannington Mills. Acquisition by this US flooring giant is key to Amtico’s bright outlook. Duck explains, “As part of Mannington, we have more capital for investment and expansion. We found ourselves a couple of years ago in a position where, although we had a good track record
The quality was excellent and the cost of Far East production to begin with was clearly lower – but they weren’t doing anything that we could not recreate by improving our processes
Jonathan Duck, CEO Amtico.
and strong cash reserves, our financing arrangements made it hard to take the next step and invest on the scale required. In the end the best solution for the company was to become part of a larger parent. Mannington immediately looked at our projected returns and approved our investment plans.” Amtico’s UK manufacturing is more robust than ever. Its current site has capacity for additional long term expansion, the brand is growing and training and recruitment are in place to ensure Amtico keeps its world leadership position in its niche of the flooring market.
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manufacturer of innovative geohelic small antennae used in GPS systems and similar portable devices, Wellingborough-based Sarantel sells its wares through a global network of agents and distributors, each of whom routinely requires samples for submission to the end-customers they are dealing with. The problem? Keeping track of the resulting sales pipeline, making sure that samples are produced and delivered as required and that end-customer sales prospects aren’t being approached by overlapping distributors or agents, leading to confusion and duplication. A solution came to Sarantel in the form of a private website, created by Buckinghamshirebased Ice Blue Sky, a specialist marketing communications agency for the technology industry. To obtain samples, agents and distributors log on to the website, enter information about
Websites for manufacturers are different: the emphasis is on establishing credentials and credibility Damon Segal, chief executive, Emotio
For manufacturers, building an effective website to showcase the business can prove a challenge. Malcolm Wheatley searches out best practice.
the project and sales prospect in question, and thereby put in train the manufacture of the sample. “Going digital helped reduce costs by making the sample request process much more efficient, and also automated the process of taking agents through the process of antennae selection,” says Charlotte Graham Cumming, a director at Ice Blue Sky. “Not only was the sales process faster, but Sarantel found that it had also gained valuable insights into its sales pipeline.” Chris Muir, sales director at Sarantel, concurs. “With a project like this, there isn’t a particular metric that we could use to demonstrate its effectiveness,” he says. “But it’s clear, when we look at our sales pipeline, that we have much more visibility into it now, as well as control over it. We’ve gone from having either no, or very limited, information about the pipeline, to having just about as much information as we could reasonably expect.”
Different strokes Writ large, it’s a story with a myriad echoes across the manufacturing sector. At Tamworth-based tap and shower manufacturer Bristan, for instance, a website sourced from specialist e-shopping website firm ePages, allows customers to identify the spare parts and accessories that they need via exploded diagrams and then enter an order that is automatically transferred to Bristan’s IFS Applications 7.5 ERP system. Also automatic is the link to shopping sites such as PriceRunner, Kelkoo and eBay, explains Antony Bourne, global manufacturing industry director at IFS. Meanwhile, at Birkenheadbased 17-employee H&O Plastics, a website sourced from The Artlab – a specialist creator of websites for manufacturing businesses – is credited with delivering an increase in sales of at least 10%. Having traditionally sold its tamper-evident plastic buckets
through distributors who applied a hefty markup, H&O can now sell direct to the end-customer, explains managing director Bob Lavender – and thereby keep that margin for itself. Yet the fact remains that for manufacturers, who predominantly follow a businessto-business model, website design poses a challenge. Ideally, their websites should be readily accessible to both domestic and foreign buyers, and showcase not just products, but also technical, design and logistics capabilities. But this requirement is complicated by the frequent need to blend the presumptions of business-to-business customer relationship management with businessto-consumer capabilities and careful interaction between the ‘shop window’ front end and back office systems. So, when it comes to website design, what does best practice for manufacturers look like?
Secret weapon Talk to those close to the issue, and one thing quickly becomes clear: developing websites for manufacturers is complex and a search for best practice will first throw up an awful lot of bad practice. “Websites for manufacturers are different,” says Damon Segal, chief executive of design group Emotio, where about a third of the workload is for manufacturers. “You’re profiling an extensive catalogue of products, but also educating the customer in terms of the company’s capabilities, and the capabilities of the products it sells. And in terms of the sales process, the end-point is much further away – it’s not necessarily about generating a sale right now, on the website, or even soliciting the completion of an on-line enquiry form. The emphasis, really, is on establishing credentials and credibility.” Rick Lees, managing director at The Artlab – which built the
Going digital helped reduce costs by making the sample request process much more efficient, and also automated the process of taking agents through the process of antennae selection Charlotte Graham Cumming, director, Ice Blue Sky
Don’t worry about being too technical: you’re not trying to appeal to the masses but to the key decision makers in your potential client base James Shakespeare, Managing Director, Evosite.
website for H&O Plastics – makes a similar point. “The website isn’t just a piece of customer-facing IT, it’s a design that sets an expectation that you will be a credible and reliable partner,” he says. “Manufacturers need to stress that they are a manufacturer, and not a distributor – a lot of distributors go to some lengths to hint that they are manufacturers when they’re not. So as well as showing off the product, show off the premises, and the machinery, and show people at work. It’s manufacturers’ secret weapon – and many of them are surprisingly reluctant to use it.” Imagery, it turns out, is also a bugbear among website professionals. Talk to designers, and many will complain about the quality of the imagery that they see on manufacturers’ sites. “Most manufacturers try to use the same imagery for the screen as they do for print – which doesn’t work, as print can deal with detail much better than the
screen,” says Alan Goodwin, marketing strategist at specialist website creator Fizog Design. “In any case, the advantage of the web isn’t in displaying images, it’s displaying motion: people often know what a product looks like, what they want to know is how is it used, and how does it look in action – and that’s what a website can show them.” “It’s important to have a sophisticated, creative approach to website imagery,” adds Emotio’s Segal. “If you’ve got blurry images of all different sizes and formats, then it’s going to look very messy.” And from long experience, The Artlab’s Lees suggests that following some commonsense content guidelines will help to maximise the effectiveness of an investment in a new website. “Often manufacturing businesses think about what they want to communicate, rather than taking a step back and putting themselves in a web visitor’s shoes,” he says.
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“A good search facility makes your website user friendly – which is particularly true if you have a big range of products and technical information. A search bar takes the hassle out of finding what you want when you have a more specific query, looking for a particular model of a product, for example. Remember: if finding information quickly is difficult, visitors are likely to go to your competitors.” Likewise, there’s a skill to correctly positioning products. Again an example of how the world of print, and printed catalogues, doesn’t necessarily translate to the web in the same way. “If the products are very similar then it may make sense to group them together – but if products have different features and benefits, it’s often better to have an individual page for each, because then you can optimise each page accordingly, targeting search engine optimisation keywords to match a specific product,” he recommends. “Specification sheets provide more detailed information, but make sure that these are available to download and print from the product page, and not hidden away in a library on your site. Again, it’s about making life easy for potential customers.” And in a choice between providing a lot of technical information and what might be considered too little information, err on the side of plenty, advises James Shakespeare, managing director of web design company Evosite. “Don’t worry about being too technical,” he says. “You’re not trying to appeal to the masses, but to the key decision makers in your potential client base. Your target audience are likely experts in your domain, and will certainly be experts in theirs; use the content of your site to demonstrate your own expertise.”
Keep it current That said, an effective website isn’t just about content, presentation
Manufacturers need to stress that they are a manufacturer, and not a distributor – so as well as showing off the product, show off the premises, and the machinery, and show people at work. It’s manufacturers’ secret weapon – and many of them are surprisingly reluctant to use it Rick Lees, Managing Director, The Artlab
and design. Back office integration can involve much more than simply viewing the website as a ‘front end’ to a sales order entry application. Take product configuration, for example: replicating human interaction can be time-consuming and expensive to build into a website. “The productivity gains from online ordering come when you can transfer the content from an online ordering system directly into an sales order processing, accounting or manufacturing application,” warns Fizog’s Goodwin. “There’s an ROI, to be sure, but the cost of entry into product configuration is high, and it can be very difficult to make it affordable.” And don’t forget to keep updating the website, and maintaining its freshness and currency. A website that looks dated and stale will put potential customers off, as will one highlighting ‘news’ that is months or years old. Just as undesirable: a website that no longer reflects the business, but remains oriented around the nature of the business at the time that the website was commissioned.
At White Waltham-based motor sport transmission manufacturer Hewland Engineering, for instance, the current website, while superficially glossy and professional, no longer represents the full scope of Hewland’s business, says Alex Thornton, a sales and marketing coordinator at the engineering firm. Accordingly, web design firm Emotio has been commissioned to develop a replacement, and to develop it with a content management system, which will make it easier to update. “Hewland has come a long way, very quickly, and rather than patch the existing website, it seemed sensible to go back to the beginning, and develop an easily-navigable website which would actually showcase what we do today,” sums up Thornton. Laudable sentiments, and a recognition that for a website showcase, only the best will do. But for every Hewland, how many more manufacturers limp along with second-best? More than a few, it seems.
growth At meat processing specialist Dunbia, Microsoft Dynamics AX lies at the heart of an ambitious, growth hungry ERP and Business Intelligence project, discovers Malcolm Wheatley.
rom its origins in 1976 as a butcher’s shop in a small village near Dungannon, Northern Ireland, meat processing firm Dunbia has grown to become one of Europe’s leading suppliers of top quality beef, lamb and pork products for the national and international retail,
commercial and foodservice markets. But by mid-2011, that strong growth trajectory – fuelled jointly by acquisitions and organic expansion – had left the business with no fewer than five ERP systems, spread over ten operating sites across England, Scotland, Wales, the Republic of Ireland, and Northern Ireland.
At which point, says Conor Thompson, Dunbia’s group head of IT, the impetus behind a move to standardise things had become too strong to resist. “Pulling together information at a group reporting level, to present to senior management and the board, had become cumbersome, timeconsuming and inefficient,” he explains. “We needed to get to a situation where we would have one version of the truth, which we could quickly access and communicate.” One option, clearly, was to put in place a Business Intelligence system, and then use that to pull together information from the various ERP systems, consolidating data, and providing reports and analyses. But for various reasons, explains Thompson, the decision was taken that this wasn’t the best route forward. The persisting lack of a single version of the truth being one of the main reasons.
Compelling ROI To begin with, the five ERP systems were ageing, with each incurring licensing and maintenance fees. In outline terms, at least, a move to a single ERP system held out the prospect of a cost
reduction, as well as an opportunity to reorient all ten operating sites around a single ‘best practice’ platform. Another problem, was a lack of standardisation in how the existing systems held and recorded information basic sales and financial data, for instance, were held in four different areas, leading to minor but annoying inconsistencies in reporting. “Business Intelligence clearly held a lot of value for us, but we saw it best suited to delivering that value alongside a single ERP solution, rather than instead of it,” says Thompson. Accordingly, the search for a suitable single system began – a search, he explains, that quickly brought the business into dialogue with global Microsoft Dynamics specialist Columbus, noted for its deep bench of food manufacturing experience. That said, concedes Thompson, the search took in “most of the usual suspects”. But with Dunbia being already largely oriented around Microsoft products such as Microsoft’s SQL Server database, the logic of selecting a Microsoft Dynamics solution gathered increasing weight, he relates. But that solution, it turned out, wouldn’t be Microsoft’s Dynamics NAV offering, which was already in use as a means of administering payments made to farmers. Instead, relates Thompson, Microsoft Dynamics AX won favour, as it offered more headroom for the business to grow. “Right out of the box, it met the majority of our immediate needs,” says Thompson. “But it also contained modules which we could see ourselves using in the future – for forecasting, for instance.” Better still, he says, calculations quickly revealed a compelling ROI. With no need to continue paying licensing, support and maintenance fees on the existing systems, and coupled to a far more efficient approach to group reporting requirements, the payback period was short. “In January 2013, we pushed the button on the project and began the journey,” says Thompson. “The business case, aligned with our long term strategy, was compelling.” And key to the project, he adds, would be implementation consultancy support and assistance from Columbus. The planned timelines for implementation are aggressive, with a planned ‘go live’, at the firm’s Welsh lamb operation – regarded as a centre of excellence within the business – slated for January 2014. Dungannon and the other sites will then quickly follow, at roughly threemonth intervals.
Grand design But the plan’s ambitious timetable, which by Spring 2013 was still fully on track, powered by a multifunctional project team drawn from across the business, is part of a wider-ranging business information project. It is that project which is providing the impetus, reveals Thompson.
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Business Intelligence clearly held a lot of value for us, but we saw it best suited to delivering that value alongside a single ERP solution, rather than instead of it Conor Thompson, Group Head of IT, Dunbia
Simply put, the plan calls for the company’s existing meat industry factory-floor system to be retained, rolled-out in a standard version across each operating plant, and fully integrated with Dynamics AX. This will then be underpinned by a strong Business Intelligence capability, built around Microsoft PowerPivot, Microsoft Power View; SQL Server Reporting tools; and Microsoft PerformancePoint, a dashboarding tool. All of which will be closely integrated to Microsoft SharePoint. “Dynamics AX will provide us with a common core,” sums up Thompson. “It will integrate to all our other systems, with Microsoft SharePoint 2013 providing a common point of access. But at the heart of everything, linking it all together, will be Dynamics AX.” From small beginnings in a butcher’s shop, Dunbia has grown to be a significant player in Europe’s meat industry. But powered by Dynamics AX, and with ongoing information technology support from Columbus and Microsoft, yet greater things surely lie ahead.
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IT EYE A 3D approach to the development of complex products can produce spectacular results. But it is equally important to make correct management decisions, as the Boeing 787 programme has recently found to its peril. Keith Nichols at industry technology analyst Cambashi explains. Boeing invested heavily in new 3D design applications to develop its 787 commercial aircraft which proved to be a positive 3D experience in taking the complex design through to operation. Unlike its predecessors, the 787 was the first plane to introduce composite materials to replace the traditional aluminium body. A high investment was made in 3D digital applications to enable Boeing staff to achieve outstanding results such as 30% fewer fasteners, 1,000 times fewer holes needed in the fuselage section and 60 miles less of copper wire, resulting in 20% more fuel efficiency and an anticipated 30% savings in planned maintenance. But despite this outstanding success in development, the 787 was plagued with early operational problems, which caused cost and time overruns, leakages, generator and power distribution panel malfunctions and battery overheating. The latter problem, widely reported,
resulted in all 787 planes being grounded until it had been resolved. The main cause of these problems could be put down the modularisation and outsourcing of some 70% of aircraft sections at a very early stage in the programme. Each of the 50 strategic partners had their own sub-contractors in different parts of the world, making it difficult for Boeing to have total visibility of the total design at any time. When a change happened to one aircraft system, typically spanning a number of modules, it could potentially impose additional work on other partners and result in a negative impact in their project profitability. Many changes followed, with continuing lack of visibility, resulting in a lengthy and costly process. This could have been a fantastic story of bringing innovation to market. However, its potential success was diminished by management decisions which ultimately resulted in serious delays and a lack of passenger confidence. There is no doubting the value to the business of the 3D applications used by Boeing. But it is also clear that spending significant amounts on IT systems alone does not guarantee success. Unless management decisions of the development process are equally advanced, the benefits in one can cancel out any positive progress made in the other. @Cambashi
The new generation of Epicor ERP is now in use with over 1,000 customers worldwide. This announcement marks a major milestone for the global software provider and its latest ERP offering. Since it was first introduced, Epicor ERP has been selected by more than 3,700 customers in over 70 countries worldwide spanning the manufacturing, distribution, financial services and retail sectors around the globe. The latest version, described as “better, faster, and more powerful”, underscores the company’s commitment to continuous improvement, and contains over 300 new features and enhancements. “With the increased demands businesses face today, Epicor ERP continues to evolve to meet the changing needs of our customers and the range of industries they serve,” says Malcolm Fox, vice-president of product marketing at Epicor.
Percipient Consulting won the Oracle Excellence Award as a Specialised Partner of the Year. This is the second year running that the firm has won the award. The full citation – Oracle Excellence Award 2013 Specialised Partner of the Year: Oracle Accelerate for Midsize Companies – recognises Percipient’s successful specialism in the midmarket, as well as its expert knowledge of client industries and the solutions it has have developed. “We are delighted and proud,” said Chris Stock, Percipient’s managing director. “We have an exceptional team, and to be recognised two years in a row as the top-performing Oracle partner is a magnificent credit to them.”
eBECS won the 2013 Microsoft ERP Partner of the Year award. The Microsoft Dynamics reseller was already a winner of multiple awards for its work with Microsoft and will formally receive this new feather to its cap at the Microsoft Worldwide Partner Conference 2013 in Houston in July. The award has been given as a result of eBECS excelling at providing innovative and unique sales, services, solutions and support based on Microsoft Dynamics AX. “eBECS prides itself on being a ‘go to’ partner for Microsoft Dynamics AX and this award acknowledges our unwavering commitment to delivering consistent and high quality services to our customers,” says Stephen Wilson, marketing director at eBECS.
Enthuse young people to take up vital careers in engineering With not enough young people taking Science, Technology, Engineering and Mathematics (STEM) at further education, many UK companies are facing a skills shortage. Independent, educational charity, The Smallpeice Trust is passionate about closing this skills gap and enthusing the next-generation of engineers. Last year, a record 20,353 students participated in our university-based residential courses, in-school STEM Days and Clubs. Encouragingly almost 50% of our students were girls. Working in partnership with some of industry’s leading organisations, we offer students an engaging, hands-on introduction to the rewarding careers available to them. A corporate partnership offers a range of benefits including the chance to:
• Build a future talent pipeline and help you to achieve your HR objectives • Get employees involved to boost job satisfaction, motivation and skill development • Enhance your brand and profile amongst enthusiastic girls and boys, their families and their communities • Bolster your corporate social responsibility agenda • Maximise potential for PR and marketing opportunities • Offset charitable giving against company corporation tax From sponsoring STEM Days and Clubs, to mini competitions and residential courses, there are many ways in which your company can get involved with The Smallpeice Trust. Smallpeice corporate supporters include: ARM, Babcock, BAE Systems, EDF Energy, Google, National Grid, National Nuclear Laboratory, Senergy, Southern Water, Ultra Electronics Controls… and many more.
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“At Babcock, we are very keen to encourage young people towards a career in engineering and the courses run by The Smallpeice Trust are a fantastic way of demonstrating the variety of options open to them as they start to think about their career choices. The wide choice of courses offered by The Trust gives students the opportunity to broaden their horizons outside of the normal curriculum.” Rosemary Prout, Graduate Training Manager Marine and Technology Division, Babcock International Group To find out more about the benefits of becoming a Smallpeice Partner, contact our Chief Executive, Dr. Andrew Cave on 07885 227 342 or email email@example.com.
Big things happen with The Smallpeice Trust
Realtime stocktaking saves thousands for Devon-based chip manufacturer Potato crisp manufacturer Burts Potato Chips reported significant increases in efficiency following the implementation of its new ERP solution, Access SupplyChain. “Access SupplyChain is helping us to scrutinise every area of our business. It’s already saved us thousands of pounds through greater efficiency and faster access to information,” said Mike Cosby, Burts’ finance director. With aspirations to grow the business to £20m over the next three years, the 85 strong Devon based company needed an integrated system to provide tighter controls over its financial management, production processing, and stock control.
“We no longer carry out monthly stocktakes, as inventory is reconciled in real time, saving us around £12,000 a year,” said Cosby. “With Access SupplyChain, we can view the stock position on the system in real time and know that it’s 99% correct. This has given a real boost to our customer service, as we have full confidence in the accuracy of the information we’re providing.”
Mobile ERP brought to life K3 Syspro hosted a technology demonstration event for UK manufacturers.
Manufacturers from across the UK had an opportunity to experience mobile ERP first hand at the recent event hosted by software provider K3 Syspro. Held at Warwickshire’s Heritage Motor Centre, the K3 Keyless Data Entry event showcased mobile, touch, specialised, ruggedised and conventional data collection technology solutions. The plan: to give visitors a chance to gain valuable hands on experience of the latest touchscreen and mobile data entry devices, and experience for themselves how mobile ERP software streamlines manufacturing and warehousing processes. K3’s mobile platform is one of the first of its kind to use a single-source codebase to create native applications for any mobile device, with built-in powerful customisation capabilities for both the end user and developers to engage. “Instant access to information is now crucial to warehouse managers, and it was clear to see from the people who attended
our event that mobile ERP is really in demand,” said K3 managing director Andy Latham. “The day consolidated my belief that adding automation via wireless technology can not only add value by reducing the time spent on data entry, but can also eradicate many human errors,” added Phil Robson, operations manager at label printing machinery supplier AB Graphic International.
ITNIBS Shire Pharmaceuticals selected Sage X3 for its smaller European subsidiaries. Although a mainstream SAP user at its larger sites, the fast-growing FTSE 100 manufacturer and specialist in producing biopharmaceutical treatments, standardised Sage ERP X3 as the backbone for financial management across its small and medium-sized European subsidiaries. The Sage X3 system is now in place across nine different countries and Shire plans further rollouts in the future. Sage ERP X3 made sense because it is flexible, cost effective and quick to implement, said Gillian Poor, Shire’s IT director. “Using Sage ERP X3 in our small to medium-sized European subsidiaries, means we no longer have to ask individuals to run reports for us from disparate systems – we can now run reports centrally, when and where needed, and in a consistent format,” she notes.
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at the small and medium-sized end of the scale spectrum. Throw in a requirement for specific industry expertise, foreign language skills, and a familiarity with overseas tax and financial regulations, and the problem of finding an implementation partner for overseas facilities becomes trickier still.
eBECS and AxPact: working with the best of the best Businesses looking to implement or support Dynamics AX overseas now have an alternative proposition to consider, finds IT Contributing Editor Malcolm Wheatley
ot so long ago, being a multinational manufacturer bracketed a business alongside giants such as Unilever, GlaxoSmithKline and Diageo. No longer: these days, even relatively small British manufacturers can have overseas facilities – sales offices, in some cases, but increasingly factories and sourcing operations as well.
Which poses a problem should those businesses want to extend their ERP systems to those same overseas facilities. As, of course, they’re very likely to want to do. There are relatively few truly global implementation partners to assist with rollout in such a scenario - especially so in the case of implementation partners with affordable fee structures that are oriented towards businesses
Which is why businesses running Microsoft’s Dynamics AX ERP system should take note of a recent announcement from eBECS, a UK-based Microsoft implementation partner with deep manufacturing, distribution and service industry expertise, and with strong specialisms in Dynamics CRM, Business Intelligence, and a range of other Microsoft technologies and products. In a development that is likely to be warmly welcomed by eBECS’ client base, the firm has announced that it has accepted an invitation to join AxPact, described as “the world’s largest Microsoft Dynamics AX delivery team”. AxPact brings access to 1,250 certified Microsoft Dynamics AX specialists, who have collectively implemented over 1,100 Dynamics AX projects since 1999. In short, AxPact brings together an alliance of 30 of the most highly proven and respected Microsoft Dynamics AX partners in the world, providing expertise, delivery and support capabilities in over 80 different countries. And it’s an alliance with exacting standards, says Michael Blatherwick, AxPact’s founder and chairman. Joining it not only involves meeting those standards and maintaining them, he stresses. Members must also be a ‘top 3’ implementation specialist in their respective countries, and have strong references from Microsoft. “AxPact members work as extensions to each other’s implementation and support
businesses,” he explains. “And being an AxPact member places an obligation on a firm to assist any other AxPact member – be it with pre-sales advice, implementation assistance, or ongoing support.” For both implementation and support providers, and their customers, work carried out by another AxPact member – any member, anywhere – carries an assurance of work carried out to the highest professional standards. “There’s an assurance of consistent service standards internally, and an assurance that an application will be implemented using a consistent methodology,” explains Blatherwick. “What’s more, work carried out by an AxPact member also carries an assurance that the application will be configured consistently in all locations, and that ongoing maintenance and support will be delivered consistently across all those locations.” In short, he sums up, for the end customer the whole experience is rather like dealing with a single global partner – a partner who happens to have skilled, proven and fully-certified Dynamics AX specialists in all the countries where they are likely to want to do business. “There really isn’t a difference,” he sums up. “The client places an order with one AxPact member, and the other members act as third-party subcontractors.”
Joined-up global service Back at eBECS, sales director Sam Dharmasiri concedes that eBECS sees AxPact membership as a huge feather in its cap. As an organisation which has been responsible for around 10% of all Dynamics AX projects worldwide, he explains, AxPact has an excellent relationship with Microsoft. At AxPact’s recent annual conference in Lisbon, for instance – to which the organisation’s rules state that the most senior management of each implementation partner member must attend – two
Case Study: Neoss
manufacturer of dental implants, Harrogateheadquartered Neoss has sales and distribution subsidiaries in eight countries, including Austria, Germany, Denmark, Italy, the United States, Australia, New Zealand and Sweden. But having outgrown its existing business systems, Neoss saw the need for an integrated ERP solution that would not only fit the Neoss business model today, but also provide scalability to accommodate the company’s ambitious growth plans in the years ahead. A recommendation from Insite, Neoss’ existing hosting provider, an organisation very familiar with Neoss’ needs, led to Microsoft Dynamics AX and eBECS.
AxPact members work as extensions to each other’s implementation and support businesses. Being an AxPact member places an obligation on a firm to assist any other AxPact member – be it with presales advice, implementation assistance, or ongoing support Michael Blatherwick, Chairman, AxPact
“We were adamant that our lead UK partner must have established partnerships in each of the subsidiary countries, in order to handle local fiscal requirements, both for the implementation itself, as well as for providing ‘helpdesk’ support afterwards,” says Ruth Keeling, operations manager at Neoss. “eBECS was successfully able to meet this requirement, thanks to its United States office, and the ability to call on foreign partners with whom it had successfully delivered projects in the past.” AxPact membership allows eBECS to build on this strong network of relationships, providing ready-made links with experienced Dynamics AX implementation partners in many more countries, states eBECS sales director Sam Dharmasiri. “As Neoss grows and expands, our global implementation and support footprint is with them every step of the way,” he says. senior Microsoft Dynamics executives were in attendance, providing insights into Microsoft’s current thinking, the technology roadmap, and upcoming developments. “Prior to joining AxPact, we at eBECS had to look for overseas partners and evaluate them each time a client wanted to implement outside the UK,” he notes. “Now we know that we have access to a group of partners who meet known quality criteria. It gives us the ability to offer a joined-up global service, staffed by local experts with their feet on the ground in the cultures in question, who all have a similar mindset to that which we have at eBECS.” Which isn’t necessarily the case when dealing with larger implementation partners, warns AxPact’s Blatherwick: “Not only do these firms close down country-specific offices if they’re not profitable, but the offices in question can be troublingly small – a handful of generalists, rather than specialists in a particular industry, or type of implementation.” In short, says eBECS’ Dharmasiri, a global rollout with eBECS and AxPact offers a genuinely different alternative to going with a single global partner. “With AxPact, we’re working with the best of the best,” he says. “And the benefit flows straight to the end customer.”
Simon Bee, head of F-35 machining operations, BAE Systems
jacket The machining facility for the F-35 Joint Strike Fighter at BAE Systems Samlesbury was designed specifically to be fully automated, with the capability to make hard metal component sets for nearly one new aircraft per day by 2020.
hen the world’s most advanced fighter aircraft hits expected maximum production rates from between 2018-2020, customers including the US Air Force and RAF will demand to receive their jets promptly. That’s understandable with a unit cost of some $237m a pop. BAE Systems Samlesbury, therefore, has a huge responsibility. It must deliver its suite of components – the rear fuselage and empennage for all variants, wing tips for the CV variant and others – on time, in full, no failures, at the rate of up to 200 per year. The new facility boasts two FMS, or Flexible Manufacturing Systems, supplied by Fastems. “It is an automated material and tool delivery system wrapped around eight individual hard metal machine tools,” says Simon Bee, head of F-35 machining operations, who joined the F-35 programme in 2009. FMS1 has a full complement of eight Starrag STC1250 machines, while FMS2 has four machines thus far. The system is completely automated from the moment material is placed in the loading/offloading station. “The top level order book is loaded into the factory system [at an ERP level], then the factory system loads this into the Fastems FMS,” explains
Some of our large components can consume up to 100 cutters in one stage of machining Simon Bee, Head of F-35 Machining Operations
Simon Bee. “The Fastems system will then do its own internal capacity plan to see when the next machine tool is available, what it is cutting, the work-in-progress etcetera.” Material required for the next job is then delivered via Goods Receiving into the material delivery system .”The operator will select the relevant machine tool bed, tombstone and fixture that’s required to load that component,” says Bee. ”Fixtures can be selected in triangular, rectangular or square variants to accelerate the changeovers, presenting the material to the cutting area as quickly as possible.” A stacker crane will select this combination automatically and present it at the machine entry point then an operator will load the material to the fixture. Mr Bee emphasises the minimum amount of human intervention involved. Cutting tools are
housed in bespoke preset areas and accessed by the FMS via an automated carousel. The company choose to centralise tool selection to control the costs and minimise wear. “We are cutting a very hard material, so the average tool life for a cutter is between 30 and 45 minutes,” says Bee. “Some of our large components can consume up to 100 cutters in one stage of machining. You can see our need to put the central preset area here to control this better and to have the automation of cutter delivery.” At the moment, the annual bill for cutting tools at this facility is £1.5 million a year. Wait until 2020 when, should the full demand forecast be realised, Samlesbury will be making 200 component sets a year. “This is the most advanced machine shop for these operations in Europe, probably in the world,” says Bee.
Close up: F-35 machining facility Centre aisle between FMS1 and FMS2: The automated Fastems Flexible Manufacturing System is the glue that connects the milling machining centres in both halves of the machining centre.
Manufacturing Technologies: F-35 Machining Facility
Engineering staff prepare components for the next stage of finishing, having been machined by a Starrag STC1250 using the automated FMS delivery system.
Head of the machining facility Simon Bee points out a CMM in the quality control inspection room. The F-35 programme at Samlesbury is working on methods to minimise the number of physical quality inspections to maximise throughput, without compromising rigorous aerospace quality standards.
Total one-off: Simon Bee shows the scale of the Starrag Heckert BTP5000, also known as an LSL or Long Spar Longeron machine. “It’s the only one of its kind, designed with F-35 components in mind,” says Mr Bee. “It was conceived to manufacture long thin titanium components, about three metres long, which are the leading trilling edge of the vertical and horizontal tails.” Samlesbury expects to order a second LSL nearer to maximum production rate. A bank of Fastems FMS units: These automated loading and delivery machines are fundamental to the facility’s capability of manufacturing up to 200 component sets a year. “Once the operator has loaded the material to the fixture, has set the tilt-turn station back in and the stacker crane has picked up the billet, the Fastems system will look for the specific machine it is supposed to be cut on,” explains Bee. “Is the machine working, or is it free? If it’s busy it will take it to a holding position and wait for the order to be completed, then deliver that one to be unloaded on a machine and will automatically take the next one. At that point the cutting process will start.”
Cool IT The great industrial innovations in computer technology have long been associated with the sun drenched skies of California’s Silicon Valley. And yet perhaps the most revolutionary of recent times, one which could slash the heavy carbon footprint of the internet, is being masterminded in the somewhat less glamourised location of Yorkshire discovers James Pozzi.
omputer cooling by liquid, as opposed to traditional fan assisted mechanisms, is being developed by Iceotope from its design workshop on the Advanced Manufacturing Technology Park just outside of Rotherham. Its news that should elicit a collected sigh of relief from businesses trapped into supporting costly, electricity hungry, conventional cooling systems for internet servers.
How and where Its system cools hot-running servers by immersing them in liquid coolant - Novec (made by 3M) - sealed into a speciallymade blade. Heat is removed from that unit by running cold water past it in a circulating system within the system rack. Founded by Peter Hopton in 2009, Iceotope’s research and testing now takes place in its first liquid-cooled production system at the University of Leeds, with a team of researchers led by Dr Jon Summers from the University’s School of Mechanical Engineering. The institution announced in
February that it would become the first to run the production system. It had already been using an Iceotope server since December to run computational fluid dynamics models, and to warm the radiators in one of its laboratories by using waste heat, and has been testing prototypes for over two years. Production of Iceotope’s prototype has been achieved using cradle to cradle principles. Rather than using plastics or PVC, all main product components are steel and aluminium which possess a longer lifespan and hold a greater re-use value.
Liquid is several thousand times more effective at transferring heat than air and uses significantly less energy to do so Peter Hopton, founder and CTO at Iceotope
From economic and environmental perspectives, the viability of Iceotope’s cooling systems speak through bold energy and cost savings. They reduce data centre cooling costs by 97%, ICT power load by 20% and infrastructure outlay by 50%. The innovation’s environmentally friendly credentials have not gone unnoticed in the green community, with a string of accolades coming Iceotope’s way in the last year. Most recently, it was awarded a Green Enterprise IT Award at a ceremony in the USA. Mr Hopton, who is also Chief Technology Officer at Iceotope, believes liquid cooling systems are the future for the ICT industry and data centre management. “Liquid is several thousand times more effective at transferring heat than air and uses significantly less
energy to do so,” he told The Manufacturer from his workshop at the AMTP. “In this process, we’ve eliminated the requirements of fans and eliminated the need for refrigeration, as the system simply doesn’t need it,” he added. Iceotope already has a lengthy waiting list of companies looking to install its submergible servers. “The financial and environmental costs involved in powering a single facility are staggering and cooling inefficiencies are a significant factor,” said Hopton. “We believe that the Iceotope solution has the potential to drive change in the data centre industry for the better.”
Supply Coolant Distribution Unit (CDU)
Module Centre CDUs
Failsafe Containment and Sensors
JLR celebrated the Land Rover’s 65th anniversay last month (far left) but the future of the company lies with products like the All New Range Rover Sport (far right)
Back and Forth Jaguar Land Rover celebrates a milestone but its eyes are on future prizes with manufacturing reconfiguration and investment.
he Land Rover is one of the UK’s most iconic and internationally recognised car brands and 2013 marks 65 years since production of the first model began in Solihull. To celebrate the milestone, Jaguar Land Rover, as the manufacturer has today become, welcomed around 250 international press representatives as well as a range of politicians and hordes of school children for visits to its 300 acre Solihull plant. The latest versions of the Land Rover Defender and Discovery models are still made in Solihull. In 2012 146,000 of these models were produced at the site. But while the Land Rover’s birthday celebrations took place last month, it was increasing demand for newer, even more lucrative models that occupied the minds of employees at the site most prominently. Headlines over the last year have been full of
news about the international success of the Range Rover Evoque – over 100,000 were sold in 2012, the first full year of production for the vehicle. But the Evoque is by no means the only Land Rover product to be storming international markets. toured the company’s Solihull factory in May When emphasis was placed on the success of Land Rover’s popular SUV, the Range Rover Sport. Almost 57,000 rolled out of Solihull in 2012. But, in a move which demonstrates JLR’s absolute commitment to product improvement and innovation, the Range Rover Sport as customers knew it was recently relegated the to the history books (though not from a service perspective the company assures).
Top of the range On the day visited, the last original Range Rover Sport was made, opening the way for a new Sport model – the first SUV to be manufactured with an all aluminium body, making it over 400kg lighter than its predecessor. Although JLR says it cannot release order book details for the new Sport, we can assume demand is very healthy since, alongside other Range Rover product upgrades, its launch has justified the employment of 1,100 new staff and £370 million worth of investment in new manufacturing processes, technologies and site reconfigurations. The new Range Rover Sport’s body production has been moved into a new body shop at Solihull – one which has the technology to deal with an aluminium body of several different metal grades and incorporating 3722 rivets – no spot welds. As demand for the new Sport ramps up, production in the body shop, which finished commissioning in September 2012 and also produces steel and aluminium bodies for other Land Rover products, will move to a 24 hour 3 shift rotation. But it’s not just the body shop that has had complexity added. In the mammoth trim and final building, the new Sport model will mean new challenges. The factory turns out Land Rover Discovery 4 cars, the Evoque, and now the new Range Rover and new Range Rover Sport. With each vehicle offering a multitude of engine options, seat colours and trims, dashboard designs and more, an investment of £46 million was recently made in updated and new varieties
Jaguar Land Rover, Solihull of DC electric tooling, supported by 500 tonnes of overhead steel support structure. This proliferation of equipment, while necessary to improve manufacturing capabilities and efficiency, represents a potential hazard in a busy, hands-on plant where operations are quick-fire. To avoid accidents with misplaced tools, the new equipment is traceable. The line stops if a tool is out of place when the 80 second takt time ticks over. Efficiencies and best practice are tightly controlled however, and trim and final reports a current standard of 88% OPR. The target is to reach 90% by midyear – even though the introduction of a new model can raise the likelihood of line stops and down time. Another forthcoming change in trim and final at Solihull will be the introduction of a two story production – still an unusual feature in global car plants where overhead lines are mostly only for the movement of work in progress between production phases. There’s a lot of work still in progress before all the £370m worth of upgrades across body and paint shops and trim and final are complete, but Alan Volkaerts, site operations director is convinced the board’s faith in his site’s efficiencies has not been misplaced. “We spent a lot of time justifying this investment to the board – which meant showing commitment to constantly improving productivity. The automotive industry is eye wateringly competitive – so the board knows it must invest to keep winning customers. But we have to prove that we will make every investment successful and efficient.” Key measures to show this include average cost per vehicle produced, average hours per vehicle and average number of vehicle’s per employee.
More than making But although keeping up with performance expectations on these measures and others is a pressure on the ops director, it is not his key concern going forward he says. “We have a good relationship with both the board and with our unions now. Both have the same end goal in site, which is to get more cars made here, securing more jobs and creating wealth for everyone involved. The penny has dropped that this means a focus on productivity so everyone is on board in that respect. “My biggest challenge throughout the completion of this investment, and in order to win more investment in the future, is how to manage the infrastructure on this site.” Mr Volkaerts explains that, unlike many competitor mass production sites, Solihull is hemmed-in on all sides, either by residential buildings, or by green belt protected land. So enhancements to capacity need to be managed within the current footprint. “As complex and flashy as it may seem to build a new body shop, it is actually something we are very good at. What we are less knowledgeable about is how to manage infrastructure development around that kind of work as the site footprint becomes strained. For example, employee parking solutions need to be relocated and developed.” This is not only due to construction, says Volkaerts, but also because of strong recruitment at JLR. Solihull employs around 6,000 people today. 1,800 of which joined in the last 18 months and there are plans to bring in an extra 800 in 2013.
Jaguar Land Rover, Solihull at a glance: Site size: 300 acres Products: Land Rover Dicovery, Land Rover Defender, Range Rover Evoque, New Range Rover, New Range Rover Sport Employees: 6000 Recent investment in capacity and capability improvements: £370m
At the moment, Volkaerts says around 1000 employees are using temporary offsite parking facilities, supported by shuttle services to their particular factory location. New canteens are being built and new office blocks for management and support functions. All of which mean many are experiencing disruptions such as having to use temporary toilet facilities. “This all means a massive engagement challenge,” sums up Volkaerts. “We need to keep communicating what the current disruption and discomfort will mean to them when it’s complete.” For with dissatisfaction would come lower commitment to work, and lower performance in all important productivity metrics for the cars which are at the vanguard of the UK’s automotive renaissance. Community relations are a priority for JLR Solihull which is surrounded by residential estates
The new Range Rover Sport comes together in the Solihull trim and final plant
Overhype and under appreciation The forces endangering Britain’s ability to exploit digital fabrication technologies for competitive advantage.
D printing “has the potential to revolutionise the way we make almost everything,” said President Barack Obama earlier this year in his State of the Union address. And he’s not the only one to be excited by the technology. Technophile Chris Anderson, former editor of Wired magazine is among a number of commentators to predict that 3D printing “will be bigger than the Web”. Such public parading of the ‘next big thing’ in manufacturing technology is, in many ways, great for the image of the industry – turning the heads of bright young things and tempting them to become part of a disruptive shift in the way we service the needs and whims of society. But some have concerns. “The 3D printing agenda has shot up to a point where it is
The 3D printing agenda has shot up to a point where it is becoming worryingly overhyped Dr Tim Minshall, Institute for Manufacturing
becoming worryingly overhyped,” asserted Dr Tim Minshall at a recent Institute for Manufacturing briefing day in Cambridge. It is not that he doubts the capabilities of 3D printing. His presentation acknowledged advanced research programmes into refining the two broad technology types – laser technology, and a set of sort of “glorified glue gun” techniques – both of which already offer notable examples of commercial success, especially in medical and consumer markets. Where Dr Minshall and his research team feel there is a vacuum, is in the understanding of the markets and applications for 3D printing technologies. “They need better characterisation and categorisation,” he claims, in order to not follow a technology uptake curve which plummets from a peak of “inflated expectations into a trough of disillusionment.” For this reason, Minshall will soon launch a three year research programme to help define both high end commercial and consumer 3D printing markets, and to develop manufacturing policy frameworks and technology standards around them. The research will
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investigate the viability, sustainability and desirability of 3D printing in a variety of scenarios. But does this come too late for the UK? Have British manufacturing companies, with their inherent conservatism, leap-frogged to a position of cynicism regarding 3D printing? Dr Seena Rejal, the frustrated CEO of 3D Industries would say ‘yes’ – and that this is in danger of cutting UK manufacturers off from industry step changes which will define the nature of future competition. Dr Rejal’s company is not directly involved in 3D printing. Rather he has developed an offering which could be key to a future industrial network where 3D information about components and products is far more influential in everyday business processes such as sourcing and procurement. Supported by funding from the Technology Strategy Board, Rejal was keen that UK manufacturers should be the first to get ahead as procurement practices radically alter “for the first time in a couple a hundred years”. Giving evidence to the advisory board of the Associated Parliamentary Manufacturing Group’s inquiry in to UK manufacturing competitiveness, Rejal explained: “We developed this in the UK for the UK. But whereas we have met with very little engagement from British firms, we have met with massive interest abroad and increasingly, sadly, it looks as though our investment will come from outside the UK and our activities will end up outside the UK.” Why are UK manufacturers uninterested in investing in technologies associated with digital fabrication? Rejal says it is because of a disconnect between the UK’s manufacturing sector and the thriving digital industry clustered in areas like East London’s Silicon Roundabout, Cambridge and a few other hubs. “There is a failure in the interface between physical and virtual manufacturing communities,” which Rejal says other nations, including Germany, the US and China are doing much better at bridging. In the UK this is resulting in the isolation of entrepreneurs in the 3D printing arena and clogging the flow of value and understanding around digital fabrication advances. Dr Minshall’s research programme may be designed to address this, but it is yet to formally begin and meanwhile the expertise, skills and competitiveness associated with digital fabrication are already fleeing to more appreciative industry hubs like New York where Rejal said he “was welcomed on a red carpet”.
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Representing the bridge between academic knowledge and industry, it delivers in-depth analysis, commentary and case studies that will help you progress in your lean journey. By subscribing to LMJ you will benefit from the following: u
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Take advantage today Subscribe to either The Manufacturer or Lean Management Journal for only £295. Subscribe to both The Manufacturer and Lean Management Journal for only £395 and save even more! To take advantage of this unmissable offer, simply call 020 7401 6033 or email firstname.lastname@example.org, quoting TML313
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