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NEW THIS ISSUE Sector focus Automotive: Beyond boom time headlines

Manufacturing Leadership

Interview Prof. Steve Evans

University of Cambridge

Sharing the action: Employee ownership is on the rise. Are the benefits tangible? For richer, for poorer: Thereâ€™s more to talent retention than paying top dollar

Workforce and Skills

A decade of achievement: Celebrating STEMNETâ€™s 10th birthday and encouraging more engineers to engage with schools

Health and Safety

Fee FFI fo fum: Is the new Fee for Intervention making SME blood run cold?

IT in Manufacturing

The big 3 for Big Data: Three ways Big Data can make a difference to the bottom line in mainstream manufacturing

Manufacturing Technologies

More than drones: What is the scope for using autonomous and intelligent systems in industry and society?

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Editor’s comment

Future thinking The UK teetered on the edge of triple dip recession at the close of April – a parlous economic position which was accompanied by the usual political mud-slinging with added historical context given the death of former Prime Minister Margaret Thatcher earlier in the month. The demise of Baroness Thatcher provoked heated debate over the root causes of Britain’s current economic profile. Blame and absolution were sought in equal measure by supporters and detractors which served to prove only one thing beyond doubt; that the Iron Lady will endure in history as one of Britain’s most divisive and influential leaders (p6). It can be useful from time to time, to refresh our understanding of the political, social and economic decisions which have shaped our present. For companies, such reflection can explain important cultural factors and regulatory frameworks which impact on the way they conduct business – particularly useful insight for inward investors. But at the same time, it is crucial not to get bogged down in re-hashing the past. A pitfall some would argue UK manufacturing, and certainly national press coverage of the sector, has been prone to in recent years. Forming an inspiring vision for the future is more proactive. In the last year there have been positive steps to discard the negativity of Britain’s recent industrial history and focus on developing its enduring positive characteristics – its IP, innovation, quality and service culture. A string of policy and funding announcements from government show there is political will to do this, if not perfect understanding of exactly how it should be done. And events such as the National Manufacturing Debate, hosted at Cranfield University, are making an effort to collate several years’ worth of input from industry leaders in order to progress discussion of how the sector can take its fate into its own hands (p54). Forward looking reports on manufacturing trends abound. Prof Steve Evans, our interview this month, is lead expert for the forthcoming Foresight Report which will highlight the requirements for establishing closed loop manufacturing and economics in the UK, among other issues (p22). The RSA has published a report challenging the march of globalisation, a theme to be picked up later this year by EEF as it explores ‘localism’ in manufacturing.

Cover image: HMRC has an annual tax gap of £32bn. Who’s dodging the system and can it be reformed? p22

How will these trends impact on the day to day running of our factories and supply chains? Software supplier Kronos suggests our understanding of labour will be one of the first things to change as employers demand more decision making autonomy, innovation and multi-skilling of staff in order to respond very quickly and accurately will explore in to localised demand (p52). It’s a theme more detail at its Flexible Workforce event on July 16 (p15). 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. n.hussey@sayonemedia.com

malcolm@malcolmwheatley.co.uk

Associate Editor Roberto Priolo

r.priolo@sayonemedia.com

Reporters George Archer

g.archer@sayonemedia.com

James Pozzi

j.pozzi@sayonemedia.com

Design

Art Director Martin Mitchell

Henry Anson, Sales Director

m.mitchell@sayonemedia.com

Designers Alex Cole Vicky Carlin Nick Bond

Henry is a shareholder in SayOne Media and is responsible for the company’s commercial activities, developing new concepts and products for ’s readership. Henry is keen to build a bridge between the manufacturing community and the service sector which supports them.

design@sayonemedia.com

Sales and Events Head of Events Jon Tudor

h.anson@sayonemedia.com

j.tudor@sayonemedia.com

Subscriptions Manager Grace Gilling

Will Stirling, Editorial Director

g.gilling@sayonemedia.com

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

Project Director Matt Chilton

m.chilton@sayonemedia.com

Sales Manager Benn Walsh

b.walsh@sayonemedia.com

Sarah Hough

w.stirling@sayonemedia.com

s.hough@sayonemedia.com

Marketing Manager David Farrow

Jane Gray, Editor

d.farrow@sayonemedia.com

Conference Producer Eva Lindsay

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

Tim Brown, Web Editor Tim joined SayOne Media in 2009 after working as a journalist for six years in Australia on a range of lifestyle and business magazine publications. Tim launched the new website for The Manufacturer in late 2011 and is responsible for the management of online content as well as contributing to the magazine. His primary areas of interest include the automotive industry and business development. t.brown@sayonemedia.com

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

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

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Client Account Managers Joe Green j.green@sayonemedia.com

Clarence Swartz

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

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

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

Cranfield University EEF Institute for Manufacturing, University of Cambridge

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

17 The Naked Engineer

We’ll pay for that – Hemlock engineering gets its fingers burnt playing at late payments

19 Lean on me

Roberto Priolo, editor of Lean Management Journal, on lean thinking for SMEs

22 Lead Death and tax avoidance: Government has vowed to crack down on tax avoidance which leaves HMRC with a ‘tax gap’ of £32bn a year. But does the root cause of tax avoidance simply stem from the UK system being unfit for purpose? Tim Brown investigates proposals to shake up and the way companies pay tax in Britain

28 Interview Making making sustainable: Will Stirling finds out about the world according to Professor Steve Evans, and what it might mean for the future of manufacturing

33 60 second interview: Steve Coe, Innovation Director at Element Six, explains why Britania has got a new best friend in the company’s £20m diamond manufacturing R&D centre 34 Sector Focus

Automotive: An overview of UK automotive manufacturing including insight into the need for capacity and capabilty development in the supply chain and the scope for still greater lean efficiencies in production

Pillar features 48 Manufacturing Leadership

Sharing the action: The number of employee owned companies in the UK is rising at a rate of 10% a year. What’s so attractive about the model from a business perspective?

50 For richer, for poorer: A good engineer is hard to find. Harry Dalton finds out what companies are doing to draw in and retain top talent

64 Workforce and Skills

A decade of achievement: Celebrating STEMNET’s 10th birthday and encouraging more engineers to engage with schools

66 Employee of the Month: Meirion Richards, Operations Manager, Burton’s Biscuit Company

76 IT in Manufacturing

The big 3 for Big Data: Malcolm Wheatley discover sceptics in manufacturing better take a second look at the potential for exploiting Big Data technologies to impact their bottom line

84 Manufacturing Technologies

More than drones: Paul Everitt at ADS explains the size and scope of the market for autonomous and intelligent technologies stretches far beyond military applications

86 Return of the MACH: The build up to MACH 2014 is already

gathering steam. What will the UK’s biggest manufacturing technologies exhibition have on offer?

Manufacturinginaction Factory case studies featured this issue:

40 Diametric 56 Mainetti 88 CKF 100 Last Word: Guest column from Hugh Scullion, general secretary of the Confederation of Shipbuilding and Engineering Unions, on the arguments for a renewal of the Vanguard class nuclear submarines

OUTBOUND REPORT FINANCE 2013

Making the most of manufacturing tax breaks: The first in the three part series, this report focuses on clarifying the R&D tax credit regime, defining the benefits of an increased Annual Investment Allowance and explaining the roadmap for the Patent Box. In June and July ’s finance supplements will address: Unlocking Asset Value Financing Exports Contact Sarah Hough s.hough@sayonemedia.com for information on advertising and contribution opportunities

Manufacturing

Thatcher Legacy Following the death last month of former Prime Minister and controversial public figure Baroness Thatcher, canvassed readers for opinion on the legacy she left for British industry: Sir Anthony Bamford, JCB Chairman “Margaret Thatcher will be remembered for many things, not least for being Britain’s first woman prime minister. Above all else, she had the courage of her convictions, she led from the front and ensured Britain enjoyed the respect it deserves overseas.”

John Elliott, Chairman of the Ebac Group “Margaret Thatcher revolutionised the economics of this country. She took the nation from a very bad state to a very good one. But her legacy was never fulfilled. Her intention was to let the voice of the ordinary person be heard through free markets. However, the waste of the state run businesses before her has been replaced by even bigger government waste while markets have been hijacked by financiers and bankers for their own short term benefit.”

The Master Cutler, Neil MacDonald “Margaret Thatcher has always polarised opinion. Visionary leader or a destroyer of working communities? In the Sheffield region, she will be remembered by some without much affection, and indeed blamed for the decline of the mining and steel industries. “But she was a determined and resilient reformist, tackling issues that had previously been avoided. And the manufacturing industry we have in

Sheffield today is advanced, innovative, export driven… and competitive.”

John Cridland, CBI DirectorGeneral “Baroness Thatcher’s leadership took the UK out of the economic relegation zone and into the first division. What Baroness Thatcher did to reshape the British economy gave us a generation of growth.”

Colin Larkin, Plant Manager, CNH UK “Margaret Thatcher did a very good job with unions as disruptions only cost the businesses money and ultimately jobs. The stable climate we have today in the UK gives us an edge over some of the more militant European countries. “The privatisation and competition of business has generally, overtime been the right choice. We can see clearly that train services etc. are far better. The exception to this positive impact is in energy services which still appear to do exactly as they please. “It was a great achievement for Baroness Thatcher to become the first female prime minister – though I am not convinced she was a good role for women in business. There are still no obvious candidates to follow in her footsteps in the political field. “Finally, I do feel Lady Thatcher’s time in power epitomised the change to a very materialistic nation that selfishly only thinks about ‘number one’. This came about with the selling of council houses and high interest rates in her time as leader.”

MANUFACTURING TRENDS A £20bn reduction in the trade deficit and an estimated 200,000 UK based jobs could be created over the next ten years, as midsized manufacturing firms end the outsourcing of production to Asia. These were the findings of a report published in late April by the Royal Society for the advancement of Arts, Manufacture and Commerce (RSA). Running counter to common political rhetoric, which encourages small firms to expand export operations from the UK, the RSA report argues that large scale global trends – such as rising oil costs, complexity in regulation and local demand variation – combined with new production technologies, will increasingly make global manufacturing uneconomic and unattractive to many businesses. Instead, manufacturing for local markets was seen as the route forward. The report, Making at Home, Owning Aborad, was produced with the support of Lloyds Banking Group. Responding to the findings David Oldfield, managing director, SME & mid markets banking at Lloyds, said the research raises timely debate on the trends and drivers for manufacturing in the UK and abroad. He emphasised that: “We believe that mid market businesses are well placed due to their size and agility to respond to these developments and instigate a renaissance of the sector given the right support, focus and attention.”

JOBS GE Oil & Gas Subsea Systems hosted an invitation-only careers event to kick start recruitment of 100 new employees. The event took place at GE’s Nailsea subsea controls facility in Bristol on April 20. The recruitment drive comes as GE expands its UK subsea production facilities to meet demand for offshore oil and gas production equipment. 0f the 100 new jobs, 60 will be located at the Nailsea Centre of Excellence for Subsea Controls and 40 will be at GE’s new Bristol subsea equipment hub in Aztec West. GE is looking for electrical, software and systems engineers as well as experienced project managers, quality and commercial contract professionals.

News Editors choice

ENERGY Dow Corning’s site in Barry, South Wales

Top features and blogs on www.themanufacturer.com last month. The Thatcher legacy – an ongoing contribution She should have been known as the ‘marmite lady’ not the iron lady said Tim Brown

Cofely, a GDF SUEZ company, won a long term contract to operate and maintain a combined heat and power (CHP) energy centre at Dow Corning. The contract applies to the CHP centre at the silicone manufacturer’s plant in Barry, South Wales. The energy centre comprises a gas and steam turbine CHP, multiple high pressure waste heat recovery boilers and low pressure boilers. It is capable of generating 250 tonnes of steam per hour and up to 28 MW of electricity. David Proctor, energy development manager at Dow Corning, said: “Reliable, low cost and low carbon sources of steam and electricity from the CHP plant are vital for the long term success of our Barry site.” Mr Proctor said he was confident Cofely would help his company further optimise the CHP operation. Aircraft manufacturer Bombardier submitted a planning application to build a renewable energy plant next to its Belfast premises. The proposed plant would be built, owned and operated by an energy consortium. Bombardier’s desire to generate its own energy is a response to soaring energy costs, with crude oil holding above $100 a barrel for the last two years and feeding into higher electricity, fuel and energy costs, which are higher in Northern Ireland than in other parts of the UK. It has not yet been revealed what energy source will power the Bombardier facility, but a spokeswoman for the company said: “We have explored a number of energy options including areas within wind, geo-thermal and solar technologies but we believe that this proposed plant is the optimum solution to help us secure a more sustainable and competitive energy source.” The Committee on Climate Change (CCC) published a report on the competitiveness impact of government climate change policies. The report highlights the need to tackle emissions footprints being imported into the UK in addition to reducing domestically produced emissions. While the UK’s production emissions have reduced by around 20% since the mid 1990s, global emissions have increased over the same period by around 10%. The CCC maintains however, that this trend is not the result of UK manufacturing being off-shored. The report acknowledges the risk that government’s low carbon policies may have on the future viability of energy intensive industries on the UK but concludes that current governments measures to mitigate these risks will be sufficient to maintain a competitive profile for the UK. Responding to the report, Gareth Stace, head of climate & environment policy at EEF said: “This is not just about a small number of energy intensive industries. Rising energy costs are a growing problem for many manufacturers. The government must ensure that cost effectiveness is at the heart of its approach to securing investment in new low carbon energy.” Are rising energy costs and energy security a concern for your business? Find out more about cost effective energy procurement options, the viability of generating your own energy and how optimisation technologies can help make the most of energy in your plant at ’s Future Factory: Energy Conference 2013 on July 16. Visit: bit.ly/FutureFactoryEnergy2013

OEMs, not banks, creating a financial perfect storm An anonymous SME leader at the end of their tether with endemic late payments British Engineering – World Class comes as standard The president’s address from Mark Ridgway at the Manufacturing Technology Association’s annual dinner

STRIKE ACTION Automotive OEM Ford faces strike action. The decision from Unite union members to vote on industrial action springs off dissatisfaction over the way the closure of Ford’s Dagenham stamping and tool plant is being managed. Ford announced last October that it would shut down its stamping and tooling facility in Dagenham with the loss of 1,500 jobs. Workers voting for strike action are angry at reported failures by their employer to find alternative employment for those being made redundant, despite promises that it would do so. There is also dissatisfaction with the quality of communication with staff being redeployed and with the severance package being offered. Commenting on the situation, Unite national officer Roger Maddison said: “The workers at Dagenham are furious and they are right to want to stand up to the company’s despicable behaviour.” The Dagenham plant still supplies parts to Ford’s European operations.

Manufacturing News AWARDS

McLaren Applied Technologies Workshop The 2013 winners of the prestigious Queenâ€™s Awards for Enterprise were announced in April. 152 companies ranging from SMEs through to large organisations were awarded prizes this year: 116 for excellence in international trade, 27 for outstanding innovation and

nine for their approach to sustainable development. McLaren Electronic Systems, part of the high-end automotive McLaren Group, and Staffordshire tableware manufacturer Steelite International were among those to gain recognition for their exports success The Manufacturer of the Year Awards 2012 was shortlisted for Business Event of the Year by the Professional Publishers Association (PPA). Over 600 entries from 100 publishing companies submitted entries to the PPA Awards 2013 across a wide range of categories recognising editorial and commercial excellence. The Manufacturer of the Year Awards 2012 was the most has hosted to successful date. The gala dinner drew a crowd of over 600 to London last November. The event is among eight business events to be shortlisted in its category. The winner will be announced on June 19.

Lord Digby Jones speaking at The Manufacturer of the Year Awards 2012

The Manufacturer of the Year Awards 2013 take place in Birmingham on December 4. Entries are now open. Visit: bit.ly/TMawards2013

while metrology equipment provider Renishaw scooped its sixteenth award for innovation. Bed-maker Harrison Spinks, based in Yorkshire, was recognised in both the innovation and sustainable development categories. The London region had the highest concentration of award winners boasting 22 winners for international trade which was by far the most widely awarded category nationwide. The South East had the highest number of winners in the innovation category. Manufacturers recognised for innovation in this region were: ADF Milking, De La Rue International, Niftylift and PrysimID.

PAY Manufacturing pay surveys were published last month by recruitment companies JAM and Michael Page. The JAM survey, a quarterly report produced in partnership with EEF, found that manufacturing pay packets remain stable throughout the major annual bargaining period, despite inflation remaining above target. JAM found that pay freezes as a proportion of settlements fell slightly (to 11%) compared to the previous 3 month period. Compared to other sectors, Michael Page reported that manufacturing salaries are, on average, 12% higher than elsewhere, but this is skewed by certain lucrative sectors offering very high wages. Michael Page also highlighted the growing importance of training offerings as part of a wider remuneration package for manufacturers. The recruitment firm found that there is growing discontent among executives with the professional development offered by employers (p50). To order your subscription to the EEF Pay Benchmark Reports visit: bit.ly/EEFPayBenchmarking.

UNlOCk The pOTeNTIAl IN yOUR peOple No one speaks the international language of beauty quite like Revlon. To stay fuent and satisfy demand in over 100 countries, CIO David Giambruno chose proactive, easy-to-use Microsoft Dynamics business solutions. Now heâ€™s quickly transforming multiple, fragmented systems into a unifed view. This gives Revlonâ€™s teams the real-time data and fexibility to get beauty products manufactured in the U.S. moving across the globe. And Revlon is realising its mission of making the world a much more glamorous place. microsoft.com/uk/dynamics

Manufacturing News JOBS

Donna, Nick and Luke Pritchett. Family ownership at CTR Lasers

Coca-Cola Enterprises (CCE) announced its decision to close its Direct Store Delivery service as a UK distribution channel for its products. The decision will result in the loss of 288 jobs at the company which manufactures and distributes a wide range of drinks owned by the Coca-Cola brand. Union representatives described the news as a “devastating blow” to workers at CCE’s sites in Bristol, East Kilbride, North London, Northampton, Sidcup and Wakefield, all of which will be affected. CCE said it needed to find a more efficient model for distributing products to the UK food outlets who are the primary customers for the Direct Store Delivery operation.

SME FINANCE Northamptonshire-based CTR Lasers received a £160,000 finance package from HSBC to support investment in new machinery for the production of laser cutting technologies. The finance was provided under HSBC’s Asset Purchase Scheme which is supported by Government’s Regional Growth Fund and designed to boost expansion at ambitious SME companies. The increased capacity provided by the new equipment led directly to the creation of four new jobs at family-managed CTR. One of these is an apprentice position.

Closure of CCE’s Direct Store Delivery Service in the UK will mean the loss of 288 jobs nationwide

Entries opened for The Manufacturer of the Year is searching for the best names in Awards 2013. British manufacturing, large and small, to enter for the chance to take one of its coveted awards trophies back to their factory. The 2012 awards were The Manufacturer’s biggest and most successful yet. Over 600 people attended the glittering ceremony. This year the awards programme is set to be even better and the magazine will take over Birmingham’s Hilton Metropole Hotel on December 5 to celebrate British manufacturing and crown the winners of The Manufacturer of the Year Awards 2013. For more information visit: www.themanufacturer.com/awards/

EXPORTS

ECONOMY

Allied Glass achieved £100 million worth of sales last financial year. It is the first time the leading Yorkshirebased manufacturer of glass containers has achieved such sales success. The increase was driven by demand from overseas markets said the company. Key export markets for Allied Glass now include China, India, Russia and South America. The £102m turnover company recently made a multi-million pound investment to increase capacity and reduce operating costs in order to service expanding demand profitably.

The UK economy grew by 0.3% in the first quarter of the year, avoiding entering its third recession in five years, according to the Office for National Statistics. The growth is mainly due to a strong performance of the service industry and a boost in oil and gas output in the North Sea. The service sector, which represents around three quarters of the UK economy, grew by 0.6% in the first three months of the year. Chancellor George Osborne said: “Today’s figures are an encouraging sign the economy is healing. Despite a tough economic backdrop, we are making progress.”

Allied Glass will present a case study at ’s Future Factory: Energy Management Conference 2013 on July 16. Visit: bit.ly/ FutureFactoryEnergy2013

Manufacturing NEW FACTORY

FINANCE

The Funding for Lending Scheme has been extended with additonal incentives for banks and other financial institutions to lend to SMEs. Image courtesy of Images of Money The Funding for Lending scheme was extended for one year. The £80bn initiative, designed to boost bank lending to companies will now continue until January 2015 and will offer enhanced incentives for banks to lend to SMEs. Next year, for every £1 of net lending to SMEs banks will be able to draw £5 from the scheme. In addition, for the remainder of 2013, every

£1 of net lending to SMEs will be worth £10 of initial borrowing allowance in 2014.Terry Scuoler, CEO of manufacturers’ group EEF, said: “This is the right call. Strengthening incentives for banks to lend to SMEs and other finance providers marks a step forward in addressing the problems faced by smaller firms in accessing credit on the right terms. Giving FLS a longer shelf life is also a helpful move.”

British manufacturer GKN Wheels opened a new facility in northern China. The factory, known as Lianyungang GKN Huading Wheels Co. Ltd, will produce wheels for agricultural equipment primarily for the tractor and combineharvester markets in the Far East. Speaking at the facility Steven Norgrove, managing director of GKN Wheels & Structures said: “The opening of Lianyungang GKN Huading Wheels will allow us to act as a local provider with a global support system for our key strategic customers operating locally and internationally, and represents an important expansion of GKN’s long-established working relationship with China.

News PATENT DISPUTE London-based Dualit won a major court battle over Nestlé Nespresso. The Swiss food and drink giant had sought to ban the SME manufacturer of kitchen and household appliances from producing coffee pods which can be used in Nestlé’s machines. The High Court of Justice ruled that Dualit can continue to produce the pods, a decision with which Nestlé said it was “disappointed”. The Nespresso coffee division at Nestlé provides sales of around £3.1bn for the company each year and a spokesperson said: “We believe the decision is inconsistent with the ruling by the European Patent Office in April 2012, confirming the validity of a key patent for the Nespresso system”. Leslie Gort-Barten, Dualit’s managing director, was relieved at the court ruling. “It was a big risk,” he told national press, “But that’s the little man – he has to stand up for himself really.” Mr Gort-Barten, the second generation family leader of Dualit, confirmed the court battle had racked up legal costs of around £1m, a significant burden to a company with annual revenues of around £15m.

JOBS Steelite, a recent recipient of a Queen’s Awards for Enterprise commending its exporting performance, is to expand its Stoke-on-Trent production facilities, creating 230 jobs. Having seen international demand for its pottery soar with sales rising six percent to £70.2m last year and 80% of turnover coming from overseas, Steelite is looking to capitalise on its growing popularity in the US, Asia and South American markets.

AEROSPACE The British aerospace industry received a boost after British Airways ordered 18 new Airbus A350 aircraft in a deal worth £3.9bn. BA’s parent company International Airlines Group (IAG) said the deal was for 18 A350s, plus the option for a further 18, in a major coup for Airbus as they continue to increase their foothold in a market dominated by Boeing’s wide bodied 777 aircraft.

Datesfor yourdiary May

13-17

The UKTI holds an ‘Export Week – High Growth Markets’, including a variety events. As well as a trade mission to Istanbul, masterclasses will take place in London, educating attendees on exploring aid-funded business, winning international tenders and a High Growth Update on China, Hong Kong and Taiwan. For more info go to: www.exportweek.ukti.gov.uk

Oracle, CGI and Mavenwire Sustainable Growth event presents an opportunity to come and explore some of the opportunities and hear from some of the leading thinkers and practitioners to accelerate your company’s supply chain. The free workshop (limited spaces available) will take place at Oracle based in the Blythe Valley Park, Solihull. Visit: http://bit.ly/OracleSustainableGrowth

20-21

Cranfield University hosts the annual National Manufacturing Debate (p54). This high profile networking event for manufacturers will be chaired by former president of the Royal Academy for Engineering Lord Alec Broers and television presenter Maggie Philbin. The event is free to attend. To register, go to: https://webapps2.cranfield.ac.uk

Cambridge University’s Institute for Manufacturing hosts a briefing day for attendees to meet IfM researchers across the whole spectrum of manufacturing, from R&D and design to supply, production and service. A range of interactive sessions and workshops will be available. To book your place contact Lauren King at lnk22@cam.ac.uk or on +44 (0)1223 748263

21-23

The LMJ Annual Conference takes place at the Hilton Metropole in Birmingham featuring keynotes from North America, South Africa, UK and Europe; facilitated interactive workshops; 12 case studies; peer-to-peer networking; and inspiration for your continuous improvement programmes. For more information and to book contact Benn Walsh at b.walsh@sayonemedia.com or +44(0)207 202 7485

June

4-6

Total Exhibition takes place at the Birmingham NEC. The UK’s largest processing and packaging exhibition incorporates three exhibitions: PAKEX, The PPMA Show and Interphex as well as offering a seminar programme including best practice advice and case studies from industry speakers. For information or to register, go to: www.totalexhibition.com

July

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

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

ManufacturingAppointments UK Appointments Steve Yianni TSBTSC

The Technology Strategy Board’s Transport Systems Catapult is now headed up by Steve Yianni as its new chief executive. The centre will focus on

innovation for efficient and sustainable ways to move people and goods (freight) across national transport systems including road, rail, sea and air.

David Winner Streit Group

Streit Group, the world’s largest privatelyowned vehicle armouring company, announced the appointment of David Winner to the position of general manager

for the UK branch of the company. David Winner has joined Streit after a 32 year career in the British Army which focused exclusively on armoured vehicles.

Tony Gillard Festo

Automation equipment manufacturer Festo appointed Tony Gillard as its new business development manager of process automation, with a focus on the water and wastewater

treatment industry. In his new role, Tony is responsible for growing Festo’s business in the water industry, with a specific focus on valve actuators and control systems.

Mike Pooley Exova

Testing and advisory group Exova appointed Mike Pooley as its new European managing director to lead its continued growth. He joins the company from CHEP, a provider of pallet and container pooling services, where he was senior vice president for sales and customer operations

and responsible for managing $1.2bn of annual revenue. Prior to this, he was managing director of CHEP’s business in the UK and Ireland where, with responsibility for all commercial and operational activity, he delivered both increased revenue and operating profit during his tenure.

Gary Bowen GTK

GTK announced the appointment of Gary Bowen to the position of production manager. Gary has over twenty years’ experience in the UK manufacturing industry having worked for Alexander Dennis, a leading UK coach manufacturer, and previously for Brand Rex,

GCI and PIC in both production and quality roles. Gary said of his new role: “GTK is an impressive organisation with ambitious growth plans. I’m looking forward to this new challenge and the opportunity to grow UK production in line with the company’s objectives.”

Tony Burnell SONE

SONE, which specialises in supplying innovative application and dispensing solutions in plastic, appointed Tony Burnell, a well known figure in the plastics packaging industry, to the role of UK business development

manager. SONE appointed Mr Burnell based on his extensive experience of the industry, sound reputation and ability to build strong relationships with customers in the personal care, healthcare and beauty sectors.

Carol Lunan was appointed works manager at Styropack, an EPS packaging manufacturer based in Aberdeen. Ms Lunan becomes Styropack’s first ever female works manager, taking over from Tom Falconer who has retired after thirty years service with the firm. Lunan joined Styropack in 1992 and the board said it has been struck with her persistent energy, efficiency and commitment to her work.

To notify The Manufacturer of your company’s appointments, please contact George Archer at: g.archer@sayonemedia.com or: 0207 401 6033

Software supplier to the vehicle fleet, leasing and rental industry and plant hire rental sector Jaama recruited two new people; Kristian Frost as a software developer and Dominic Lagorio as an accounts assistant. Kristian joins Jaama with a degree in computer science and has previously held a software position at International Lift Equipment in Leicester and JJS Electronics, a member of the Paragon Electronics Group, in Lutterworth. Dominic has had a varied career including six years in the Army and most recently working for Accident Exchange.

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PolicyPoint

Dr Tony Whitehead, IET director of policy, on breeding the confidence needed to see UK manufacturing thrive.

here is a misconception that there is no manufacturing in the UK. But complaining that government and others are not doing enough to support the industry reinforces this false impression. A more productive approach is to demonstrate – to the media, government, prospective apprentices, engineers and technicians – that there is a thriving manufacturing industry around us. We need to be ready to demonstrate not just the problems, but the will to put potential solutions into action. Confidence breeds confidence and a catalyst is needed to help UK manufacturing thrive. The watchword is cooperation. What can we do as manufacturers? What can the government do to support? Manufacturers have done some work to highlight the biggest challenges that government help diminish. But the industrial strategy announced by the Government last September still needs a greater focus on strategic direction. This would lead through to greater policy stability and encourage foreign owned manufacturers to invest more in their existing production in the UK. Key levers in this space include capital allowances and Complaining skills. Fundamentally, that government infrastructure investment and others are to improve infrastructure not doing enough quality and affordability to support the is also needed – this industry reinforces is an area which is a misconception often overlooked and that there is no could be remedied with manufacturing in small-scale, targeted the UK interventions in some areas of the road network. But it is important that manufacturers also play their part. Do we simply sweat out assets rather than investing in better equipment? Are we too risk averse? Do we have the leadership skills within our industry? Should tier one companies engage more with their supply chain? In our conversations with Government we need to remember there is no silver bullet, rebalancing the economy will take a long time. So let’s start to recognise some of the success along the way. This can help to boost business confidence, drive up business investment and lead to an even more successful manufacturing sector in the UK than we have at present.

BacktoScuoler

Terry Scuoler, chief executive of EEF defines the organisation’s vision for an independent UK infrastructure commission.

nvestment in our infrastructure is critical to the promotion of growth. We therefore need a more strategic, less political, approach to major infrastructure decisions in the UK. Positive steps are being taken to achieve this: Sir John Armitt is carrying out a review of the topic for the Opposition and the Government is looking into making more use of independent expertise in shaping infrastructure policy. This is good news. There is too long a track record of damaging prevarication and policy reversals on issues like airport capacity and nuclear power in the UK. Quality infrastructure underpins the ability to do business and compete in a globalised world. It enables manufacturing firms to source raw materials and components, fuel industrial processes, get products to market and internationalise their operations. This is especially important for UK manufacturing given the extent of foreign ownership. It is all too easy for companies to compare the UK’s approach to infrastructure (often unfavourably) with that overseas. At the heart of the problem is the ability to make and stick to decisions Quality on long-term issues. We struggle to infrastructure forge political consensus on issues enables like airport capacity or investing manufacturing in our roads. An independent firms to source infrastructure commission, along raw materials and the lines being considered by the components, fuel industrial processes, Armitt Review, could help overcome this issue. A similar body already get products exists in the Committee on Climate to market and internationalise their Change whose recommendations government follows. operations Such a body looking at the UK’s infrastructure needs could institutionalise the benefits of independent analysis and apolitical perspective. However, for such a body to be acceptable and effective, two key criteria would need to be met. First, the new body would need to be strictly advisory, with decisions remaining firmly with politicians. Major infrastructure decisions often involve getting the balance right between competing objectives, such as trade-offs between economic and environmental considerations. A lack of legitimacy would hinder rather than help build and sustain a stable approach to controversial issues. Second, the commission would have to have the right of initiative. It would be hamstrung in tackling politically controversial but pressing issues were it only able to deliver advice at the request of government on an agenda set by government. To be effective, it would need the power to initiate inquiries into subjects of its own choosing at a time of its own choosing.

Monthly columns

The naked engineer: stripping industry issues bare

We’ll pay for that Hemlock gets its fingers burnt playing the late payments game

onday 10.30am and I get the warm and fuzzy’s from beating Sir Patrick into the last (disabled) parking space. Though perhaps he wouldn’t use it now since our ‘previously known as Chairman’ leader has taken a PC turn recently and started insisting on being referred to as ‘the Chair’. Frankly I find it a little unnerving to think of our mutli-national engineering conglomerate being entrusted to an inanimate piece of furniture. But lack of a parking spot of any kind turned out to be an unwise aggravation for an already parlous sense of humour. The late arrival of the engineering world’s answer to Basil Fawlty resulted from his smashing one of the Aston’s three and a half grand titanium alloys in a pothole the size of the Mariana trench left by some careless navvy installing yet another set of bloody roundabout traffic lights on the A57. Delivery time for a replacement wheel from AML was unknown due to ‘difficulties in the supply chain’. As it happens Sir Patrick was in for similar news from Hemlock. We were gathered for an emergency finance pow-wow following a stark realisation that his latest cunning plan to creatively improve our metal processing division’s dire cash flow was back-firing spectacularly.

They’re all claiming breach of contract and one’s threatening to file for bankruptcy because they can’t fund the working cap

Jimmy the Greek (FD) was tearing out the remnants of his hair. He’d told the big chief weeks ago that increasing supplier’s credit terms from 30 to 75 days rivalled I’m a Celebrity, Get me out of here for top slot in a list the world’s crapist ideas and today he was taking no prisoners – it was a joy to watch. “It’s bloody bedlam,” yelled the irate Welsh Greek across the table at Sir Patrick. “Supplier go slow’s, ops directors from major auto clients hammering my door down because we can’t deliver light series alloys and three sub-contractor materials processors refusing to deliver. They’re all claiming breach of contract and one’s threatening to file for bankruptcy because they can’t fund the working cap. Any improvement in cashflow we might have had is gonna get shot to pieces in costs to the legalistas to defend all this shite.” Jimmy tossed a sheaf of printouts across the table detailing the fiasco caused by the ingenuity of the Hemlock thinktank. My eye skimmed the formal complaints and threats of legal action page and hit on Tit Forge plc, supplier of titanium alloy wheels to the rich and famous. I leant over and whispered in Sir Patrick’s ear. “Well, implementation of the cashflow improvement plan hasn’t been as effective as we’d hoped,” intoned Sir Patrick in a masterful dispersal of blame. “So we’ll put it on hold for now. You can notify all suppliers that we’ve listened to their concerns and will revert to 30 days credit.” Jimmy’s relief was palpable and as we headed out to Cavendish’s for a little destressing elixir I couldn’t resist remarking to Sir Patrick with a knowing wink, ‘I’m sure you’ll get that wheel for the Aston sorted soon Sir Patrick!” Any similarity of characters to persons living or dead is completely intentional.

Have your say at www.themanufacturer.com

Production lines 3 new messages

Letters to the editor Anonymous

he availability of appropriate access to finance for SME manufacturers is important. But focus on the channels for growth capital risks overlooking the link between working capital management and the external considerations affecting it. In all businesses, cash is king. It provides liquidity to run operations and impacts the funds available for capital re-investment, innovation and growth. Money tied-up in extended customer payments is not available for investment in the business and the more that is tied-up, the greater a company’s reliance will be on external growth capital instruments – such as those dubiously accessible via banks. Furthermore, the demands on working capital increase markedly as an economy moves from recession/stagnation to growth. The acuteness of this increase is in proportion to the difference between receivables and payables.

Mark Howard, General Manager, Zettlex

K manufacturing needs to stop doubting and start believing. UK politicians are forever looking to Germany and asking: “Why can’t we have an economy like theirs?” There are some differences between the fundamentals of our two economies, but the things that are preventing UK industry from emulating Germany’s long running success are not physical, geographical or political – they are mainly psychological. If Berlin had won the 2012 Olympic bid, a German person’s reaction would have been: “Great, we will now do fantastic job!” The original British reaction was: “Oh no – we’ll make a right mess of this,” – especially from the BBC, the British Bashing Corporation. But we didn’t – we made a wonderful success of it because a group of people held their nerve, believed in a goal and focused their efforts to achieve something worthwhile. We could do with a similar, gritty resolve in UK manufacturing. I freely admit that Zettlex has pinched the German ‘Mittelstand’ idea of being a specialist, high-tech manufacturing company. We export our precision position sensors all over the world – even to Germany. We expect that exports will shortly account for most of our revenues. I only wish we could buy more of our components from UK manufacturers.

This concern would be reduced if payment terms were balanced, but many SMEs are stuck between a rock and a hard place. Large OEMs are demanding extended payment terms (typically 75-days to 120-days) while second and third-tier suppliers into an SME can only trade if they are paid quickly, typically 30-days. To attempt to match terms in either direction either loses an SME a customer or a supplier. Banks and the mechanisms for small companies to borrow affordably, matter. But the roles and responsibilities of our OEMs and primes cannot be overlooked simply because there’s too great a risk to air the concerns. The growing payments gap leaves SMEs looking to banks to help fund the shortfall at inevitably higher costs of borrowing than for the OEM. The total end-to-end cost of the supply chain is thus increased, and through under-investment, is less competitive than it could be.

Dr Pat Hughes, Education Engagement & Strategy, BT Research & Technology

ate last month a new programme of study for design and technology in England’s schools was X submitted to government by the Design and Technology Association and Education for Engineering. This document is the result of painstaking debate among around 50 educationalists, teachers and industry representatives at the Royal Academy of Engineering (RAE) on April 20 – a debate which was provoked by the release of the Government’s own draft programme of study for design and technology in February. Left to its own devices, Government would have implemented a programme to make design and technology a vehicle for the promotion of domestic craft skills and being handy round the home. Its proposals bore no relevance to the knowledge and skills needed for 21st century industry and their style stood in stark contrast to the new computing curriculum which was developed by industry and education experts, including myself, in order to prepare young people to live and work in our technologically advanced society. I urge all readers and the wider engineering community to get behind the new design and technology programme. Industry must understand and express the importance of this subject to the development of the applied STEM skills which underpin engineering and manufacturing.

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

Monthly columns

Leanonme Roberto Priolo, editor of Lean Management Journal on debunking lean myths and creating a radical upswing in lean programmes in SMEs.

here are so many misconceptions around lean thinking that I am sometimes led to wonder if there is anything in lean that is understood fully. When we think we have got it, we tend to say that at the end of the day, it is just common sense. But this is a partial truth and a dangerous one to be free and easy in expressing since it can lead to complacency and disregard for the achievements of lean thinking. Successful lean implementations are not solely founded on common sense the principles behind them are. This is why, if you lay strong foundation in systems and practices for problem solving and continuous improvement and make sure the implementation is meaningful to all involved, commonsense will lead employees to achieve those sought-after results. This is the conclusion Faith Geary of the Ministry of Justice comes to in her article from the May issue of Lean Management Journal. The May issue aimed to debunk a number of lean myths, including the idea that Toyota is no longer a lean role model following the recall crisis and the difficulties with suppliers after the natural disaster that hit Asia in early 2010. Jeff Liker and Tim Ogden take the myth-busting argument even further, asking if Toyota was ever the Holy Grail of lean? They progress to identify five misleading

In the European Union alone, over 20 million SMEs represent 99% of businesses… Even if there were only a small percentage increase in the number using lean thinking to thrive, the gains in terms of innovation, productivity and growth would be incredible

beliefs about the Japanese carmaker, concluding that one should not confuse Toyota with the Toyota Way, and certainly never limit its approach to lean to a copy-and-paste exercise. Yes, nothing is quite as it seems when it comes to lean. It’s with this mind that I am now preparing the June issue of the journal, which will focus on the application of lean in small and medium-sized companies. There is often a tendency to think that lean is more appropriate for, and easily applied in, large enterprises. They have access to greater resources and, perhaps, have a more pressing need to streamline and standardise processes across plants, regions and international borders. But SMEs have a couple of aces up their sleeves when it come to lean. First of all, they are naturally nimbler and more responsive entities. Secondly, in a small environment where everybody knows everybody, it is much easier to develop shared goals and nurture the creation of a widely-accepted culture of continuous improvement. And when it comes to resource – well, lack of resource can actually represent a big incentive to undertake a lean journey and be a reminder of the real need for success. In its June issue, Lean Management Journal will feature a case study of an Australian family-run company called Black Widow, which will help us to

understand how family ties and dynamics can impact on the way lean thinking is implemented. We’ll also speak with Zingerman’s, based in Michigan, who will discuss the challenges posed by a volatile employment base to an SME trying to lean. Zingerman’s Mail Order delivers gourmet food around America, mostly for same day delivery. For 11 months about 30-40 people work at the company. But that number balloons to around 100 at Christmas time. How has the company developed a flexible lean model which still endorses continuous improvement and engagement despite this? In every area of the world, small and medium sized businesses outnumber large companies and corporations. In the European Union alone, over 20 million SMEs represent 99% of businesses. Imagine the untapped potential these companies represent. Even if there were only a small percentage increase in the number using the guidance of lean thinking to thrive, the gains in terms of innovation, productivity and growth would be incredible. Here’s another task for the lean community then: encourage more SMEs to realize the potential of lean. It may just take the communication of a few examples and an altering of perception to set them on a journey which could transform company and employee prospects.

For more information about LMJ, please contact the editor, Roberto Priolo, on r.priolo@sayonemedia.com

On the road again

AND ABOUT

’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.

Guardians of the wellbore Will Stirling at Guardian Global Technologies

our miles under the earth’s surface, in a 30cm diameter steel tube, crude oil flows over sensors to measure pressure, temperature and flow. This data helps geologists make conclusions about the reservoir. The environment is brutal – temperatures over 300°C and pressures up to 20,000psi. But this is Guardian Global Technology’s comfort zone. The de facto world leader in ballistic delivery systems, Guardian sells to all four major oil and gas service companies. For certain specific solutions there is no-one else to go to according to managing director Iain Maxted (p50). The company’s factory in the unassuming town of Pyle outside Bridgend, designs and manufactures two main products; sensors for measuring flow, pressure and temperature and ballistic delivery systems – a term Guardian coined itself. These critical products fire explosives into oil wells. The process is stealthy. As a well is drilled, a steel casing is cemented in place to support

the wellbore and provide hydraulic isolation between fluid-bearing zones. Once the well is completed, explosive charges are detonated from the surface to make perforations in the steel casing, enabling reservoir fluids to flow into the wellbore. Mr Maxted modestly refutes that Guardian ‘invented’ the ballistic delivery technology but does say “we designed the systems for this specific purpose from ground-up, so yes, this is proprietary to Guardian.” An ex-Imperial College engineer who started the company with his wife in 2003 Maxted is confident of Guardian’s competitive position in its sector, despite some larger rivals in the downhole logging equipment space. “This industry requires a huge amount of testing and we have challenges getting our products to work. Competitors are often better off perfecting a specific application because the amount of work in perfecting these systems is a barrier to entry. But there is plenty of work in oil and gas for everyone.”

Guardian Global Technologies is about to invest £100,000 in new kit

Guardian is a growing concern. The company is about to invest in a £100,000 mine/millturn machine to compliment a machine shop already boasting an array of milling, turning and wire erosion machines producing batches of 20 -40 across a wide range of products. Finding qualified people to help deliver for growing demand is hard says Maxted. But the company’s total headcount of 85 includes five apprentices, three in the workshop and two in electronics, a presence which Maxted hopes will help plug future skills and capability gaps. @WRStirling Go to www.themanufacturer.com to read more about Guardian Global Technologies.

Out and about

Making biscuits is no piece of cake There’s science behind the way the cookie crumbles finds Jane Gray.

urton’s Biscuit Company is the only volume food manufacturer to exclusively manufacturer biscuits in the UK. “The focussed product range really lets us explore the technology of making biscuits,” says Neil Grocock, the company’s chief supply chain officer as he talks me through the latest tranche of a £25m investment plan in production capability, new product development and capacity expansion.

For those readers who might doubt that there’s much technology behind baking the humble tea accompaniment, a trip to one of Burton’s three UK plants, will swiftly set you right. The company makes Maryland Cookies, Wagon Wheels and Dodgers, not to mention Cadbury’s entire range of Chocolate biscuits for which Burton’s holds the global licence. This year Burton’s committed £13.5m to the introduction of high tech equipment which will help it perfect manufacturing and reduce waste. Burton’s Llantarnam factory in South Wales is the proving ground for many investments. The most recent is an £800,000 control room which links to new automated monitoring systems on the shop floor. The system uses cameras, heat sensors and infra red to track the size, colour, moisture content and temperature of biscuits in production in real time. Mr Grocock says he believes the application is the first of its type in the biscuit making industry.

Survive then thrive James Pozzi hears about Hymid’s lean journey and gets hands on with applying the methodology.

ain clouds were on hand to greet me as I arrived Torquay, the heart of the English Riviera. But a mere five minutes’ walk from the station, the forecast is overwhelmingly sunny for a genuine West Country success story. Hymid, a specialist in single and two-shot plastic injection moulding, had an excellent year in 2012. The company increased turnover to £2.2m and won a succession of quality awards, culminating in the Business Development and Change Management Award at the IMechE Manufacturing Excellence Awards last December.

Hymid moved to its site on the outskirts of Torquay from the company’s original factory in nearby Brixham last September and now employs a workforce of 30 – including three apprentices. It manufactures an array of products, predominantly for the medical supplies and trade industries. Success hasn’t come easily. The company faced uncertain times in 2008 due to what it describes as “damagingly inefficient and labour intensive” manufacturing processes, which hampered productivity and, subsequently, profit. Now working closely with Chinese toolmakers based in Shenzhen, the company focus lies

Measurements are snapped every eight rows of biscuit produced – which when you are producing 1.85 tonnes of Wagon Wheels an hour, and similar quantities across a multitude of concurrently running lines for branded and own label biscuits – equates to a huge quantity of data. The control room is manned by eight operatives who have been moved from the shop floor and trained – with an additional expense of around £100,000 – to use the equipment with confidence (p66). Meanwhile managers can also log into the control room data remotely at any time, supporting real time responsiveness to, for instance, a malfunction in one of the oven burners or the need to recalibrate heat sensors. Going forward, the data captured in the control room will feed into wider IT infrastructure including maintenance scheduling systems, helping to remove ‘gut feel’ from complex business decisions which effect profitability. @janefagray

in adding value and working under lean principles. Myself and fellow delegates on a special press day to show off the new Hymid facility, were challenged to put these into action is small simulation. Tasked with improving productivity for a mock production line assembling torches, the workshop illustrated the “efficiency at all costs” approach that has been integral to Hymid’s success. Our efforts were guided and judged by representatives from the regional arm of the Manufacturing Advisory Service, SWMAS, which has worked with Hymid to help identify waste and reconfigure processes. Commercial Manager Nick Cleevely, showed us around the factory, proudly highlighting the site’s impressive collection of new automation systems, mostly for two shot moulding. Hymid has invested heavily to ensure its technology is competitive. Company chairman Colin Spencer Halsey says Hymid plans to increase turnover to £3.5m by 2016 and become a world class British manufacturer. “We focused on what we’re best at for adding value – two shot and our three prime sectors,” he said. “As an SME, we have great opportunities to work with others and in clusters. We’ve proved that there are always different and innovative ways of doing business.” @themanufacturer

Have your say at www.themanufacturer.com

Looking at the tax system as a potential candidate for continuous improvement, Tim Brown investigates whether the current system for raising government revenue is fit for purpose and what alternatives exist.

magine, if you will, that the tax system is large manufacturing business. This particular business has the enviable position of holding 100% market share in the UK and there is little prospect of new entrants into the market. However, its products are overpriced, complex beyond necessity, difficult to assemble and, in the end, all offer the same proposition – the right to live and work in the UK. Taking the scenario further, we see overseas competitors offer more competitive prices, luring away some of the tax

system’s bigger customers. Those customers that have remained are often demanding and are always trying to negotiate a discount or avoid paying altogether. The company is understaffed, under-resourced and furthermore, the fence around the perimeter of the business is full of holes and the security guard falls asleep constantly. As a result its products are often stolen and its stocktaking is questionable. If the tax system was a business, you’d take a long hard look whether or not you were running it as efficiently as you could. Indeed, you’d probably get in some lean gurus to shake things up a bit – improve the processes, streamline the offering and improve the profit margins. However, over recent years, successive governments have taken the opposite approach. Instead of simplifying and improving the tax system, complexity has increased and effectiveness waned. In the last two decades, Tolley’s Yellow and Orange Tax Handbooks have tripled in size to 17,795 pages. Yet despite the increase in rules, in 2012 a quarter of FTSE 100 companies paid no corporation tax at all in the UK. While the likes of Starbucks, Google and Amazon have dominated recent headlines on tax avoidance, many other companies also allegedly manage to avoid paying tax. British American Tobacco, Tate & Lyle and Rolls-Royce were among the dozen FTSE 100 firms who paid no corporation tax last year, according to research by the Mail on Sunday. David Cameron has made strident statements of intent to crack down on tax avoidance, but the Mail on Sunday’s analysis of annual reports and accounts found that 47 companies gave no obvious figures for corporation tax paid in Britain in 2012. Among those 53 which did give figures, 12 paid no corporation tax at all, and of those dozen, half received

Leadstory Tax avoidence

a tax credit. Rolls-Royce, for example, got a £2m tax credit, while paying no corporation tax according to the newspaper. The engine manufacturer said it made 85% of profits abroad and was spending “hundreds of millions” on research in the UK, justifying its tax position. A separate investigation by the charity Action Aid, showed that nearly all of Britain’s biggest companies legally avoid tax in the UK. According to the organisation, 98 out of the 100 companies on the FTSE 100 base their taxable operations in territories where there is low or no tax. HMRC estimated that in 2010-2011 its total ‘tax gap’ was around £32bn, representing 6.7% of the total tax collected and an increase of £1bn from the previous year. Of the total tax

If we get profit sharing right we might raise an extra £10bn in tax revenue per year? Richard Murphy, founder, the Tax Justice Network

The biggest contributors to the ‘tax gap’ according to HMRC

Error (£2bn)

al in ir m cks C ta ) at 5bn (£

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gap, £9bn was attributed to legal interpretation and tax avoidance. Tax avoidance is bending the rules of the tax system to gain a tax advantage that Parliament never intended. Legal interpretation, meanwhile, relates to potential tax loss from cases where HMRC and the tax payer have different views of how, or

Flat tax as an alternative A report by the 2020 Tax Commission, titled The Single Income Tax (pictured right), proposes the introduction of a flat tax system. The report, supported by the Tax Payers Alliance and the Institute of Directors, promotes the reduction of other taxes in favour or an unavoidable 30% flat rate tax on distributed income – above £10,000 personal allowance – from capital, be it equity, debt or property. “Whether someone’s money comes from a salary, from a company, from dividends or from interest payments, we think it should be taxed at the same rate,” says Rory Meakin of the Tax Payers Alliance and lead researcher of the report. “This will stop people trying to shuffle money between the different types of income streams. “We think the current system lacks legitimacy. We think people should be taxed on their income and if a company is investing money, then there is no real reason to tax the money just because a profit has been made.” There are two things companies can do with their profits explains Meakin. “They can reinvest them by keeping the money in the company or distribute it to shareholders, which means that it becomes personal income. We say that it is when it is distributed, when that money turns into income that the tax should be applied. We shouldn’t be taxing companies who are

N ym one (£4 nt bn )

take re to e Failu onabl reas £3bn) ( care

9 6

whether, the law applies to specific and often complex transactions. And failure to collect tax from large companies is only one part of the problem. The contribution to the issue by individuals, contractors and small businesses is arguably even greater. The accountancy firms tasked with exploiting tax loopholes are generally better resourced than the HMRC departments tasked with investigating them. So what can be done?

Leadstory Tax avoidence

The 2020 Tax Commission’s recommendations would abolish eight national taxes, and create just one. The abolished taxes would be: Employers’ National Insurance Employees’ National Insurance Corporation Tax Capital Gains Tax Inheritance Tax Stamp Duty Land Tax Stamp Duty on shares Air Passenger Duty Excluding National Insurance, these taxes are responsible for 499 exemptions or reliefs, out of a total of 1,042. The latest individual Tolley’s guides for Capital Gains Tax, Corporation Tax and Inheritance Tax alone contain 4,318 pages. Abolishing them would allow the tax code to be shortened substantially. The primary goals of the 2020 Tax Commission’s proposals are to: Reduce the tax burden and gain neutrality between types of income Capture taxable income that is currently evading tax Reduce the overall tax rate to encourage inward investment and discourage the migration of business overseas Transfer the burden from profit, which is easy to move overseas, to income which is more easily defined and somewhat harder to shift Provide legitimacy for the tax system by being more transparent The 2020 Tax Commission states that taxes and government spending should represent 33% of national income (GDP). According figures in its report, UK public spending represented 49.8% of GDP in 2011 while, by comparison, the US was 41.9% and Australia was 35.0%. It says that the reduction of UK spending would be achieved partly by economic growth but would also require further cuts in public spending.

investing and that are boosting the economy as they do that.” “All the effort that people and companies put into hiring clever accountants to work their way around the system is madness,” says Mr Meakin. “The cause of this is not evil people trying to keep their money; it is just the result of an unnecessarily overcomplicated system. Meakin says that because people put their money through these exemptions and schemes and then pay less tax, the overall rate for everyone else needs to go up. “We need lower rates in general and less exemptions and loopholes so that the rules are simpler. Such a system would then be a benefit for everyone and not just the people with the best accountants.” “By having such a fiddly and incomprehensible system, it has become impossible for any one person to have to fully comprehend the entire tax system,” says Meakin. “People don’t understand how much they are paying, let alone how much other people are paying. If you had a simpler system, with reasonable rates and greater transparency, then we think that most would be happier to cooperate with the system.”

How it would work According to Meakin, the proposed system would work as follows. Normal income (eg. salaries) would operate in a similar way to the way PAYE does currently. However, on the corporate side it would be quite a different system with tax being paid by UK companies rather than individuals. Under the proposed system when a company received money, from shareholders for instance, to start up a company or make an investment, the company would receive a credit. When the company sends money out to shareholders in the form of dividends or share buybacks then it would apply the single rate of tax on that money but only once the company has

High profile support for flat tax The London Mayor Boris Johnson revealed earlier this year that he would support a flat tax proposal of the kind suggested by the 2020 Tax Commission. “We need to send a signal to enterprise. I think we should look at a flat tax. It works brilliantly in some places, and I’m told it would be ideal for us,” said Mr Johnson. “It’s the idea of having a much more simplified system of tax, so we all pay 25 or 30 per cent.” Admitting the Treasury may lose a lot of cash initially, he said: “Revenue would go up as you liberated enterprise. People would say: ‘Wow, this is the place to do business’.” exceeded the credits for the money that went in. But would flat tax really level the playing field? Richard Murphy is a chartered accountant, the founder of the Tax Justice Network, an advisor to the TUC on taxation and economic issues, and a columnist for The Guardian and Forbes.com. He says that flat taxes only serve to do one thing. “The reason why people like Boris Johnson are so keen on Flat Tax is because it makes the rich richer and the poor poorer because the rich would see a tax rate cut. I think one could understand why Boris Johnson

Grow Smarter.

Top Priority For Industrial Companies The need for more cost-effective and efficient business practices is a top priority for the European industrial sector. The application of lean-manufacturing principles is essential to growing your business. Apex can help your business become leaner with our tailored, scalable and secure point-of-work inventory management solutions. Our systems allow you to manage, track and control supplies, critical parts and assets that are essential to your business. We proudly serve thousands of clients big and small, including over 300 Fortune 1000 companies. Connect with us to see how Apex can help your business grow smarter.

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Every Thing Is Possible.

Increase Productivity Reduce Supply Costs Streamline & Automate Ordering Reduce Walking & Wait Time Eliminate Stock-outs

Leadstory Tax avoidence

is very keen on it when he has an income of over £500,000 per year. I have no confidence whatsoever in flat taxes.” According to Mr Murphy, if a flat tax system is designed to ensure that you won’t make the poor poorer then you have to have a massive cut in taxes and government spending. Highlighting the current £120bn deficit, he says that such a move would be unlikely “while we’re trying to make the books balance”. Mr Murphy proposes that an alternative to flat tax would be unitary taxation, also known as profit sharing. In simple terms, a company’s profits are split into three and the taxable income is shared evenly according to where the customers are located, where the employees located, and where the physical tangible assets of the business are located. The corporation tax rate is then applied according to how those profits are divided. “If we get profit sharing right we might raise, in my estimates, an extra £10bn in tax revenue per year,” says Murphy. Continuing, he says that the benefit of profit sharing is that it more clearly allocates taxable income whereas most flat tax propositions would exclude income arising outside of the UK. “If you exclude income arising outside the UK, the moment you manage to shift your profit into a tax haven, then you’ve won it. You are never going to pay tax on it. The incentive to shift income outside of the UK into a tax haven would be very high indeed.” Furthermore says Murphy, not only are company owners often based overseas, often it isn’t possible to identify the owner of a company at all. “In such a case we won’t, therefore, charge them for tax in the UK so the tax has got to be paid by the company themselves. Corporation tax is quite clearly a tax that is charged on capital and the owners of the business. No other tax could achieve that result that I’m aware of.”

Osborne’s GARRulous attempt to curtail tax evasion “Today, I am unveiling one of the largest ever packages of tax avoidance and evasion measures presented at a Budget.” Those were the words of Chancellor of the Exchequer, George Osborne, during a somewhat rambling budget speech on March 20, 2013. Unfortunately, according to most reports, including that of the Financial Times, the key weapon in Osborne’s arsenal to tackle the problem – the General Anti-Abuse Rule (GAAR) – is far too narrow to prevent the majority of schemes. Despite one of its components promising to name and shame of promoters of tax avoidance schemes and their participators , The House of Lords’ Select Committee on Economic Affairs noted that “none of our witnesses thought [the GAAR] would meet media and public expectations that international tax planning should be addressed and multinational companies made to pay more tax in the UK”. Neither did any of the witnesses think the arrangements entered into by multinational corporations would be affected by the GAAR. Look out for EEF’s tax report later this month, defining the trade body’s stance on government’s crack down on tax avoidance.

We need lower rates in general and less exemptions and loopholes so that the rules are simpler. Such a system would then be a benefit for everyone and not just the people with the best accountants Rory Meakin, Tax Payers Alliance

British American Tobacco, Tate & Lyle and RollsRoyce paid no corporation tax in 2012, according to research by the Mail on Sunday Under the proposed Tax Payers Alliance system, all distributions out of UK companies would be subject to UK tax prior to being paid into an account, no matter where that account was located. While acknowledging that the Government would still need investigative powers to ensure the books were being balanced correctly, the Tax Payers Alliance says that a simplified system would allow investigators to uncover tax dodging more easily. The argument to support the flat tax proposal promoted by the 2020 Tax Commission is convincing. The idea of a more simplified system is undoubtedly appealing to most businesses – except perhaps accountancy firms. However, its aim to reduce tax as a share of national income

to 33% is ambitious, particularly considering the current deficit and already arguably constrained public spending. What is evident is that the current system is floundering. As editor of City AM and contributor to the 2020 Tax Commission, Allister Heath wrote: “Our economy is stagnant, crippled by excessively high public spending, high levels of leverage, a mismanaged and inefficient public sector, an extraordinarily complex and punitive tax system and a public mood that has become increasingly anti-capitalist.” Change is needed and a new system, such as that suggested in the The Single Income Tax report, would represent not only a step change but also a leaner way for the government to support business and industry. @themanufacturer

Making sustainable

How will we manufacture anything when the raw materials are gone? Industrial sustainability guru Professor Steve Evans talks to Will Stirling about ecoefficiency, ecotechnology and more radical interventions to keep the factory lights on.

“A

sustainable organisation must be profitable, but you cannot be profitable without being sustainable,” says Professor Evans in his office at the Institute for Manufacturing at the University of Cambridge. “When we talk about a business, we don’t have to say sustainable and profitable, we just say sustainable,” as though separating the two is a daft concept. As job descriptions go, Steve Evans’ is hard to beat. He is director of research at the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability and director of the Centre for Industrial Sustainability at the IfM, University of Cambridge. In a nutshell, his job is to find out how industry can make itself sustainable and how to define sustainability across generations, a concept which is often simplified into economic, environmental and social sustainability.

Engineer, deep thinker, straight talker and erring a little to the Left, Welshman Steve Evans spent 12-years in industry, becoming Engineering Systems Manager at aircraft ejector seat manufacturer Martin-Baker, a company he describes as being “a classic British Mittelstand company” – privately owned and expert in a niche global market. He returned to academia to study how manufacturing can be sustained in the future, and has devoted his subsequent career to the subject, being a principal investigator and lead author on several national sustainability projects. Manufacturing, says Evans, has been the prime focus of a green backlash because it is where people concentrate materials and chemicals, and emit by-products. “We’ve gone through a phase of factories in the West doing pollution prevention. We are way past that now and are faced with a whole series of new challenges if we want to go forward.” He suggests industry is dealing with by adopting ecoefficiency and ecotechnology in ecofactories. This amounts to “the complete reconfiguration of the industrial system so that things stay in a closed loop”. He squints at the lay understanding of sustainability. “Firstly, if someone puts up a wind turbine in their car park they are not doing any of this; they are just very confused.” At its core, manufacturing is always about man, money, machines and materials, Prof Evans says and “manufacturers, especially Brits, are fantastic at finessing these four variables”. This group set needs to be organised into a broader set of goals than productivity, to tackle manufacturing’s future tests.

China’s future R&D budget is prioritising $243bn into this subject area in the next 20-years

Interview

Professor Steve Evans, Institute for Manufacturing

“[Manufacturers] have done cost reduction, we’ve done quality in the 1980s, we’ve done lead time reduction in the 1990s. Now there is a natural evolution for industries to feel ever more precious. The first objectives are still there, but you’ll be getting more objectives. Not polluting is one we understand – now we need to work on how to take less from the earth to deliver our current value.”

Ecoefficiency and ecotechnology “This is defined as what can be done with today’s products without changing them fundamentally.” For today’s products, materials and production technology, a little investment can go a long way. The addition of simple kit such as sensors can make a huge difference. “For example, an industrial oven can be optimised to burn less fuel – a new oven is not necessary. Tackle these in a continuous improvement manner and you have ecoefficiency. Toyota in Burnaston reduced the energy it takes to make one car by over 77% with a tiny investment in capex.”

We have lots of activities running on low carbon vehicles and low carbon buildings; where the heck is the organised activity on low carbon industry?

“But at some point if you squeeze everything out of your factory you may, as companies like Toyota and Unilever are discovering, have to make process changes. Using different materials in products, capturing heat from one process and using it in another, that requires equipment and scheduling – this is the wave of ecotechnology that comes behind ecoefficiency. Do the efficiency then do the technology. The next step is reshaping the entire industrial ecosystem.”

A new industrial ecosystem “The logic of manufacturing for the last 300-years reached its high point when there is one person in a low wage country making every product on one bloody great machine. They press a button and all of the world’s washing machines and trainers are made. This implies that all the materials in the world that we dig up go to one location and all of the products in the world go from here to all the customers. When you draw the image this way, the benefits of highly concentrated production look less obvious.

4th Annual LMJ Conference May 21st to 22nd, 2013 | The Hilton Metropole, Birmingham NEC

From Lean Tools to a Culture of Continuous Improvement May 21st to 22nd, 2013 The Hilton Metropole, Birmingham NEC

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Interview Professor Steve Evans, Institute for Manufacturing

“In the 1970s we saw a movement to mini-mills in the steel industry, from huge, monolithic plants. A steel mill is significantly smaller now – we’ll see the same thing in several other sectors. Add to this the fact that factories in 2050 and beyond are not going to have a license to dig their materials up in the way they do today, and a picture starts to develop of supply chains working in new geographic patterns, focused on recovering raw materials from primes. We’ll see a lot of people working on ‘valuarisation’ projects, or getting more value out of the materials within products, very soon.”

Coming soon

Biography Professor Steve Evans 1976: Joined Marconi Radar Systems as a student apprentice 1980-1984: Held a variety of industrial research and engineering research roles with Plessey Military Communications and CADCentre Cambridge 1085-1988: Engineering systems manager at Martin Baker Engineering, responsible for design and manufacturing improvement with a budget of over £1.5m per annum 1988: Joined the staff of Cranfield University lecturing on the challenges of improving industry performance in situations requiring high degrees of multidisciplinary collaboration and innovation 1992: Began a PhD investigating the management of Waste Electrical and Electronic Equipment. Evans received a 1st for this study and his research led to him managing the first EPSRC grant in ecodesign 1995-1999: Served as co-director of the supplier co-development initiative at Nissan European Technology Centre 1998: Became Professor of LifeCycle Engineering at Cranfield University 2000-2006: Head of International Ecotechnology Research Centre, Cranfield 2011: Joined the University of Cambridge as Director of Research for Industrial Sustainability, University of Cambridge Prof Steve Evans is also Director of the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability and chairs the IET Manufacturing Policy Panel. He is also a member of the steering group for the All Party Manufacturing Group Inquiry into UK manufacturing competitiveness. Prof Evan has led research grants for a wide range of academic and independent bodies which account for several million pounds worth of collaborative industrial development.

If someone puts up a wind turbine in their car park, they are not advancing any of the three core parts of industrial sustainability; they are just very confused

Some of the next headlines you are likely to see with Prof Evans’s name in them, or just below, will be in relation to the Foresight Report, a huge piece of research commissioned by government, for which Evans sits on the Lead Expert Group. The two-year study comprising 35 sub-reports will be made public in the autumn. “Some of the data explains employment patterns. We talk about the hollowing out of manufacturing jobs. The total has fallen because the number of assembly technicians has gone down a lot. There are more management and higher paid jobs now than there were in 1999, but we are losing the lower paid jobs. That is not a problem, is it? It explains the increase in productivity.” The report will also express Evans’s, feeling of immense frustration around the opportunity cost in his field of study. “About forty percent of carbon emissions come from industrial activity, thirty per cent from transport and about thirty per cent from buildings. “We have lots of activities running on low carbon vehicles and low carbon buildings; where the heck is the organised activity on low carbon industry? We cannot organise the millions of buildings or cars in the UK, but we can organise a finite number of factories. A self confessed nationalist, Evans says there is an opportunity for leadership here for the UK. “There are very clear signals that China and Germany are pushing this enormously hard. China’s future R&D budget is prioritising $243bn into this subject area in the next 20-years. They want to sell all this green stuff to us? Please – we have a head start, we are better at this and we are going to let others take over. It’s a real frustration.” I ask Evans to pinpoint which companies operating in the UK are the shining lights for his vision for industrial sustainability. “Toyota is a leading light here,” he says. “Unilever is very good and Bosch is good.” More from Prof Steve Evans, including his views on “net positive carbon” factories, are available at www.themanufacturer.com

Have your say at www.themanufacturer.com

PLAYING MUSIC? MAKE SURE YOUâ€™RE LICENSED. 74% of factories agree that playing music increases staff morale.* If you play music in your business, it is a legal requirement to obtain the correct music licences. In most instances, a licence is required from both PPL and PRS for Music. PPL and PRS for Music are two separate companies. PPL collects and distributes money for the use of recorded music on behalf of record companies and performers. PRS for Music collects

and distributes money for the use of the musical composition and lyrics on behalf of authors, songwriters, composers and publishers. A PPL licence can cost your business as little as 19p per day. For more information on how to obtain your PPL licence visit ppluk.com or call 020 7534 1070. To ďŹ nd out more about how music can work for your business visit musicworksforyou.com *MusicWorks survey of 1000 people, conducted May 2012.

ppluk.com 01610 PPL Manufacturer half page (factories).indd 1

04/03/2013 10:56

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Interview 60 second

Steven Coe

Innovation Director, Element Six

In July global synthetic diamond manufacturer Element Six will open a £20 million research centre near Oxford employing 110 people and advancing the use of diamonds for industrial applications. : Why has this investment been made now? Currently our R&D facilities are globally distributed and this has resulted in fragmented research programmes. We also found that some of our global locations were finding it increasingly difficult to recruit the talent they needed to keep R&D progressive. As new and more challenging research into new applications for synthetic diamonds develops we wanted to consolidate and coordinate our research capability. : Why was the UK chosen as the location to do that? The front runners for our central R&D location were the USA, the UK, Germany and Switzerland. In the end, the UK came out top because it still has three top science and engineering universities for the disciplines we need. We believe those universities will give us access to the right talent now and in the future. Another reason why the UK was

attractive is that it supports a good IP culture where the laws protecting IP are respected. The recent launch of the Patent Box and an improved R&D tax credit scheme were additional positive factors. Finally, the UK is a good global hub which offers the connectivity we need as a dynamic global business. We chose Oxford as a location within the UK, in part because of the University, but also because it is a central national location with easy access to Heathrow – yes we would support the development of an extra runway! It would increase the airport’s efficiency and further ensure easy travel for international colleagues and customers. We also chose Oxford in order to be near the Harwell Science Park which is a centre for innovation and has strong energy security and generation capacity. Energy connectivity is important to us because the diamond manufacturing process is very energy intensive.

: What research will take place at the new R&D facility? As our primary innovation centre the new site will host diverse R&D activities. Manufacturing research will focus on further exploiting the hardness of diamonds for cutting applications in industries like aerospace and automotive. We need to increase the durability and performance of diamonds used for these, now traditional, applications. More research will look at the other material properties of diamonds, such as hyper conductivity, so that we can find new applications for diamonds in the advanced electronics industry and for medical rediotherapy. We’ll also explore the optical qualities of diamonds to enhance high power lasers. : Would you ever base scale production of diamonds in the UK? We have a small manufacturing facility in Ascot but at the moment it seems unlikely that we would expand our manufacturing capabilities here. This is largely because of the cost and security of energy in the UK. Energy prices are constantly rising ahead of those where we already have production capability, mainly in South Africa and Sweeden. I also have deep concerns about the generating capacity in the UK going forward. A lesser but additional concern is the cost of labour in the UK. : How valuable is the industrial diamond industry? The global market for industrial diamonds is worth more than $1.5 billion and it is growing all the time as customers look to use more challenging and abrasive materials and increase tooling efficiency for faster operations with fewer repair and maintenance delays. Western economies still hold the competitive edge in synthetic diamond production and application. There is growing capability in China but it is fair to say that this is mostly for lower end applications.

If your company finds energy costs and security in the UK a concern too, why not attend ’s Future Factory: Energy Management conference on July 16?

CNH UK’s productivity, though reliant to some degree on high tech investments, is grounded on its culture of World Class Manufacturing, a Group improvement system. A similar story is true across UK-based automotive OEMs who have embraced lean manufacturing principles and persisted in finding improvements well after the proverbial ‘low hanging fruit’ was picked. Will Stirling’s report from Toyota’s Deeside factory in this sector focus gives a compelling insight into the enduring relevance of lean improvement to UK automotive competiveness (p38). Powerful proof of UK automotive success abound, flying in the face, not only of national perceptions that UK manufacturing is dead, but also of crisis in the market across the channel in mainland Europe.

Still fragile

OEM car assembly in the UK is booming. But there’s work still be done to optimise the UK’s economic benefit finds TM.

f you ask manufacturing leaders, the national press is notorious for undermining public perceptions of the health of British industry; forever focussing on factory closures and industrial action rather than contract wins, job creation and investment. But the last couple of years have presented a challenge for such naysaying hacks reporting on automotive manufacturing. Since 2010, around £6bn of inward investment has been made into automotive OEM manufacturing capacity and capability. And the newly kitted

Since 2010, around £6bn of inward investment has been made into OEM manufacturing capacity and capability

out plants are not standing idle. In 2012 1.46 million cars were produced in the UK and of these, 1.2 million were exported. Furthermore, these figures, provided by automotive trade body SMMT, exclude strong growth in vehicle segments other than cars, such as construction and agricultural equipment. Home-grown British manufacturing icon JCB is thriving in the former, reporting its strongest ever results in 2012, and Fiat owned CNH UK last year increased production by 20% on healthy 2011 levels. 92% of production was exported.

But while we should celebrate and trumpet UK automotive success, we must not be complacent. In 2009, UK automotive was on its knees. Looking back at archived news stories it is staggering to haul up accounts of campaigns in Westminster led by MPs and Jaguar Land Rover employees protesting at plans to close sites at Solihull and Castle Bromwich. And beneath such doom laden headlines from OEMs, the supply chain was disintegrating. At the close of 2008, credit rating firm Experian issued a sector health report which branded UK automotive companies with a 79.6% chance of failing in the following 12 months. And this weakening of the supply chain still poses a threat to sustainable automotive productivity in the UK. At the SMMT annual dinner last year, then president Nigel Stein said: “The health of the industry is not just about additional assembly capacity, it also requires innovative technology and a strong UK supply chain to deliver. Before the tide began

SectorFocus Automotive

turning in the last couple of years There are positive signs that we suffered thirty years of decline this requirement has now been with underinvestment in plant, acknowledged by government technology and skills.” and industry support bodies. In Mr Stein pledged then to the industrial strategy announced ensure that SMMT and by the Department for the Automotive Council Business Innovation and would continue work Skills in September last in 2013 to rehabilitate year, UK automotive Globally, the the automotive supply manufacturing was automotive sector is chain in the UK. He labelled a priority responsible for an said that problems sector for investment. estimated $2.6 trillion had been mapped but Subsequently, the sector in economic activity admitted “there is still a has seen many millions In 2012 the UK long way to go” to find of pounds pledged to automotive sector effective solutions. its development via the turned over £54bn A problem remains, Employer Ownership There are around it seems, in supply of Skills scheme, the 2,350 manufacturers chain visibility for Advanced Manufacturing in the UK which OEMs who are keen Supply Chain Initiative, are classified as to support the growth the Regional Growth automotive suppliers of local capability and Fund, Technology The sector employs capacity. SMMT reports Strategy Board 82,000 people that automotive OEMs Competitions and more. based in the UK spent Skills £11bn with local Tier 1 suppliers With regards to industry skills in 2012 out of a total supplier challenges, this sector focus spend of £31bn. reveals the dedication of Jaguar An SMMT spokesperson Land Rover to mitigating the assured TM that this “represents negative impact that its success a significant level of domestic has had on some suppliers – a supply”. But with most Tier problem Jose Lopes, head of 1 suppliers being global technical excellence at the OEM, companies, there is little openly acknowledges (p36). assurance that those billions are trickling down to domestic tier 2, The Finance 3 and 4 suppliers. focus for the An equally complex topic is that At present, SMMT values the automotive of access to finance, for which automotive supply chain in the council this the industry has struggled to take UK at £4.5 billion and says the year is to see ownership. Despite assurances UK has the capability to supply the launch from banks that they are eager to 80% of all component types of a sector lend to UK manufacturers, it still required for vehicle assembly. strategy for the remains difficult for SMEs to find However, last year it also car industry, appropriate finance packages. published a report, Capturing reminiscent of Again, Government and industry Opportunity, which stated there that which has support networks are making is an additional £3bn worth of brought huge strides to change this with the opportunities for automotive benefit to UK Supply Chain Finance Scheme suppliers in the UK to deliver for aerospace encouraging OEMs to intervene “specific and urgent” OEM and by communicating the approval of tier 1 requirements. invoice payments to banks (p37). Seizing hold of such It’s a welcome initiative which opportunities is critical if the should result in better finance UK economy is to reap the conditions for SMEs – though full rewards of its automotive some would argue that and renaissance. But this will require endemic culture of late payment in radical action and innovative the UK means that working capital support for the rehabilitation of will remain stretched (p18). the industry’s skills pool and the Other work to help SMEs win fast-tracking of investment in new and deliver on contracts is being technologies and greater capacity.

Sector statistics

led by SMMT and the Automotive Council. The SMMT Industry Forum is supporting increasing numbers of collaborative bids by UK SMEs on contracts which they could not win alone – a positive development which can make a group of suppliers greater than the sum of their parts in terms of supply chain clout. SMMT Meet the Buyer events are growing in popularity and the trade body held its first Meet the Funder event in November last year to try and close the loop between identifying demand and realising the ability to deliver. The event was attended by 125 automotive companies who met with finance providers to discuss and justify their specific requirements for support. The focus for the automotive council this year is to see the launch of a sector strategy for the car industry, reminiscent of that which has brought huge benefit to UK aerospace. Publication of this strategy is expected this summer. Overall, the prospects are good for UK automotive manufacturers. But collaboration, between companies, government and support bodies, will be the watchword in safeguarding the sector’s dazzling but still precarious recovery for the long term.

Mr Lopes continues, “We will continue to grow. That is our priority. But this is unsustainable if we create a situation in which our suppliers are unable to meet the demands of the business.”

Taking action

Demanding

supply

Recognising the negative impact of top heavy growth in the UK automotive sector.

n 2012 Tata-owned Jaguar Land Rover recorded record profits as it totted up revenues from the sale of 314,433 vehicles around the globe. Sales revenues were up £37% on the previous year and reports for first quarter performance in 2013 show that demand is not waning. Q1 brought JLR’s best ever quarterly sales performance with 115,000 cars sold worldwide. But the unrelenting success of the car manufacturer is not without its negatives, a fact that Jose Lopes, JLR’s head of technical excellence, says the manufacturer is acutely aware of. “We have to be mindful of the impact of growth on the supply chain,” he says. “Our growth will naturally attract people to come and work for us but we are aware that this has a potential negative impact on the supply chain. Particularly for smaller businesses that are effectively looking for off the shelf talent because they have little resource for training.”

We have to be mindful of the impact of growth on the supply chain,” he says. “Our growth will naturally attract people to come and work for us but we are aware that this has a potential negative impact on the supply chain Jose Lopes, head of technical excellence, jaguar Land Rover

To try and stem this problem and appreciate where pinch points in shared skills demand are most painful, JLR is working on a number of initiatives, both internal and collaborative. Key among these are JLRs Technical Accreditation Scheme (TAS) and its wider embodiment in the new Advanced Skills Accreditation Scheme (ASAS). Lopes explains, “We launched TAS in 2010. The scheme is designed to allow JLR to grow its own talent in the technical skills it needs to support plant and business growth plans.” TAS is ambitious. Supported by leading UK universities, the training challenges employees to step up to masters level learning in targeted disciplines – but on a modular basis so that training can be managed in line with work. The scheme has obvious benefits to JLR, increasing employee loyalty and capability and reducing succession risks but Lopes says it also benefits the supply chain. “It is difficult to recruit skilled engineers and TAS allows us to move people up the organisation so that we can recruit fresher, less experienced people – rather than compete for the small pool of ready-qualified highly skilled engineers which others may have a more immediate demand for or less resource to develop.” TAS now offers 50 subject areas for study in disciplines including electronics and electrical engineering, process engineering, low carbon technologies and lean manufacturing – all of which are industry pinch points for skills, according to Lopes, since they are in high demand in most tiers. Modules are drawn directly from leading post graduate engineering degree courses at partner universities and delivered either remotely or on campus in week long courses which include around

SectorFocus Jaguar Land Rover

150 hours of personal study time. Lopes says all modules have been heavily subscribed with around 2000 completed since the launch of TAS in 2010.

Sharing expertise While other automotive OEMs in the UK share some of JLRs challenges over skills capacity in the supply chain, Lopes says that his organisation’s concerns are greater because of the wider skills window its UK operations cover. “JLR is unique among UK automotive OEMs in having everything from blue sky research through to production based in Britain. This increases our skills footprint and the areas where we have to consider the impact of growth on skills availability.” This is one reason why JLR sought help from sector skills council Semta last year to extend its successful TAS programme, with its broad ranging, high level skills development offering, to its supply chain and the wider manufacturing community. The resultant Advanced Skills Accreditation Scheme took advantage of funding via the Employer Ownership of Skills pilot to open up the TAS model to all UK employers in the automotive and aerospace industries.

ASAS is now administered by Semta and will see its first module enrolments this September at the start of the new academic year. An employer panel, chaired by Lopes on behalf of JLR, gives input to ensure the best courses from the best sources are made available through the scheme. The cost of funding an individual through an ASAS module is dependent on the discipline and the university involved in delivery. Summing up, Lopes says that sharing expertise in training, taking advantage of employer-led funding structures like Employer Ownership of Skills and working closely with BIS and trade associations like SMMT to coral appropriate industry support is integral to JLRs ability to keep growing sustainably, profitably and without escalating risk.

Capacity and visibility

f course, the ability of the UK automotive to compete for the growing business of OEMs like JLR is not only reliant on their ability to attract and retain skilled people, but also their ability to invest the manufacturing technologies and facilities they need to achieve the necessary quality, output and lead times OEMs require. JLR knows that access to finance is a historical and present problem for UK manufacturing SMEs and Mr Lopes assures that the company is in constant discussion with the Department of Business Innovation and Skills, lobbying for the development of appropriate finance, funding and tax facilities to help its supply chain meet its requirements. “We have a long term relationship with BIS which is targeted at trying to ensure the supply chain has the working capital it needs to service our demand,” says Lopes. One way in which JLR is getting its hands dirty with government to try and alleviate financial constraints on investment is through the Supply Chain Finance scheme. Launched last year, this scheme secured the support of a range of large companies across sectors. It assures their cooperation in informing banks of their approval of invoices, thereby prompting offers of lending at better rates to companies banks can see are part of a stable value chain. The scheme is in its early stages and reports on its effectiveness are expected later this year. More recently, JLR, alongside Aston Martin and Toyota worked with the owner of Goodwood, Lord March to launch an online application for supply chain risk mitigation which includes a financial modelling tool for the early identification of potential weak links in the supply chain. The motivation behind the creation of this online solution is the provide “collective security” for the UK automotive supply chain. JLR spends 60% of its material budget in the UK, but the majority of this is with global tier 1 suppliers. Visibility of tiers 2,3 and 4 is limited and this represents potential risks.

Prime Minister visits JLR’s Solihull plant

Therefore, other tools in the new application include a supply chain mapping tool to increase visibility of lower tiers and a portal with business information, from health and safety records to CSR performance and historical financial stability, on all suppliers to all the OEMs involved.

84 48 to

Finding a 40% volume increase with no significant capex investment is a huge ask for any company, even for the proverbial godfather of lean. Toyota Deeside shows Will Stirling how it did it.

Machining components for the ZR model

n 2011 the world’s best selling carmaker needed to reconfigure its global engine production to accommodate a new design, a hybrid engine for the Auris Sports Tourer. Toyota Motor Manufacturing UK’s engine plant in Deeside was asked to ramp up capacity. In addition, it won the contract to make engines for the new Corolla sedan being built in Turkey. Director of the engine manufacturing division at Toyota Deeside, Richard Kenworthy, was given a serious test; find up to 40% more capacity with no substantial additional capital investment.

The Objective Toyota Deeside makes three engine variants: valvematic, nonvalvematic and the new hybrid engine, in 1.6L and 1.8L sizes which are supplied to Toyota factories in Burnaston, Turkey, Brazil and Japan. Production volume in 2011 and 2012 was around 160,000-165,000 units and Toyota Group wanted to lift that to 250,000 units per year,

By studying the machines and studying them again they have really understood where the cycle time comes from Richard Kenworthy, director, the Engine Manufacturing Division, Toyota Deeside

or nearly 35%. The question was whether this was possible by optimising current processes or if capex was necessary. To hit 250,000 without altering its two shifts, five days a week system, Deeside would need to reduce engine assembly takt time from 84 secs to 48 secs, a whopping 43% reduction. To deliver the new volume, 100 new staff were hired from November last year.

The Exercise In late 2011, Deeside appointed a dedicated team of five members who led the exercise over about 12-months. The plant has multiple lines but one assembly line. The team did a proof of concept on the engine block line over six months. The plan was to stagger rampup to get each line operating at 54-seconds cycle time first before then shaving a further six seconds off to reach the 48-secs Holy Grail. “We proved the concept and through 2012 we extended the methods to five other machining lines to get those beneath 48secs,” says Richard Kenworthy, a

Toyota man for 21-years. This was extended to the full assembly line in Q1 2013. “Originally we didn’t think the requirement was needed for assembly because part of our business is shipping machined components to Brazil, therefore we’re always looking for extra capacity on casting and machine lines more than assembly,” Mr Kenworthy adds. “But as yearend 2012 approached, we saw a big increase in demand for the hybrid across Europe, meaning we’d need to run it on the assembly line as well.” Toyota is already famously lean, having pioneered the original lean manufacturing system – the Toyota Production System – in the 1950s, 60s and 70s. How could such a lean manufacturing process find such large cycle time reductions? The project team made 455 separate modifications to the plant’s machines to reduce cycle time. “It’s like British Cycling,” says Mr Kenworthy, “a cumulative aggregation of a

SectorFocus Toyota Deeside: Lean Masterclass

Kaizening a kaizen: Electrical testers

o use an electrical tester at Deeside, hitherto a member would fit a harness, it would go onto the machine, which would connect to the pallet, test the engine, remove the tester and then the harness. Kentucky had automated this stage, there was only one different engine variant in US but Deeside has three. Kentucky’s automated tester did a good job but it wasn’t 100% reliable. A cylinder was inserted into the connector but it was attached to another cylinder, and to another. “By the time this part had gone in and this part had come out, the assembly was varying hugely in space, which this was causing the reliability problem,” says Kenworthy. “Our maintenance engineers engineered their own connectors and modified the machine with more accuracy in the connections. They worked with production members to reduce the variation when fitting the injectors. The outcome: “Now both plants have an automated in-line tester based on an idea from a US plant which we’ve copied and improved, which the US guys have taken back. They have kaizened their own kaizen.” Find out more about Toyota Deeside’s engine capacity ramp up at www.themanufacturer.com

series of small improvements. Put altogether you can get several seconds per cycle time.” Deeside collaborated with other divisions to find the specific alterations to realise the efficiencies. Kentucky in the US, especially, was a close collaborator. The project team spent several days in Kentucky examining specific time-saving techniques, and a US delegation has since visited Deeside. Is such cross-pollination common within Toyota? “It’s not a well-trodden path, because each site circumstances are different, but TMC [Toyota Group] head office is very keen to benchmark for regional cooperation,” says Kenworthy.

Dwell times within the assembly processes were studied and teased apart. Robotics and automating machines were assessed and, where practicable, accelerated.

Specific activities Tiny improvements have been made across casting, machining and Engine assembly of the Toyota ZR assembly. On grinding crankshafts, for example, “When the grinding wheel approaches the crankshaft at high speed, it was starting to decelerate 25mm away from the shaft. We asked if it should slow down just 5mm before it starts to approach the shaft,” Kenworthy says, emphasising the devil in the detail. Elsewhere, the transfer bar on an assembly process used to drop 150mm and go under the line’s process doors. “We put a slot in all the doors, now they drop just 15mm which means it takes less time to transfer the part.” Zone effect: Deeside has done a lot work on the “zone effect” = tool change frequency and tool change time. For example, the cycle time on one machine is 48 secs. If the tool is changed every 1,000 operations, and it takes 10 mins (600 secs) to change that tool, the effective cycle time is 48secs + (600 / 1000 =) 0.6sec = 48.6 secs. “A lot of these NC machines have up to six tools on them, an extra 3.6 secs on every machine,” says Kenworthy. “If engineering can reduce that to 5,000 operations then the effect on line capacity is enormous. And it’s all free.” Deeside’s 12-month ramp-up exercise has re-emphasised the principle that there is waste hidden in everything. “They’ve had to demonstrate that they really understand what lean means. By studying the machines and studying them again they have really understood where the cycle time comes from,” says Kenworthy. Deeside began running the casting and machining lines at 48secs cycle time in February and March. The big test is yet to come: the assembly line will switch to 48-secs on April 22. “There’s a little nervousness but we’re confident we done enough preparation to hit the target,” Kenworthy adds.

The US guys have taken this [new technique] back and they have in effect kaizened their own kaizen Richard Kenworthy

Low-pressure permanent mold casting uses a gas at low pressure, usually between 3 and 15 psig (20 to 100 kPag) to push the molten metal into the mold cavity.

Making

branding

Tufflex resin coating

Diametric is a manufacturer of bespoke industrial badges, labels, nameplates, graphic overlays and fascias for a range of industry sectors including: automotive (OEMs and aftermarket), audio, medical and electronics. Tim Brown talks to managing director, Pete Knight, and sales and marketing director, Graham Steele, about the process of converting a companyâ€™s brand into something remarkable.

o one denies the benefits of creating a recognisable brand. But seeing it printed on paper is one thing. Seeing it affixed the bonnet of a car, the fuel tank of a motorcycle, or the speaker of a high end stereo, elicits a completely different feeling altogether. Such position can transform a corporate logo into something that people truly identify with. The badge and logo on a product is the representation of the product itself. It should be sleek, impressive and, most importantly, it must match the quality of the product itself. When it comes to branding, badge and label making, Diametric provides that service, turning a corporate logo into a physical and more tangible thing of beauty. The company counts many household names among its clientele and creates the badges for products from cars to motorcycles, fridges to smart card readers. Large companies trust their commercial identity to Diametric to recreate what is often their most prized possession, their brand, as a physical item to affix to a product.

A diverse range Unlike many of its competitors, Diametric offers badges and labels which can be made from a massive range of materials. These include: injection moulded plastic, die cast metals, electroformed nickels, copper and chrome plating,

Industrial badges Diametric

anodised aluminium, stainless steel, zinc, brass, copper, vinyl, polyesters and polycarbonates. “There is a limited market place for manufacturers to go to where one company, such as ours, can offer the complete solution for whatever labelling and badge requirements a manufacture might need,” says sales and marketing director, Graham Steele. Managing director, Pete Knight continues: “Most of our competitors offer one or two elements of what we offer. They might provide aluminium products or plastic products but they generally don’t offer the added value extra assembly work that we provide. We can also apply many different forms of self adhesives and choose which one will best suit the application.” Mr Knight says that currently about two-thirds of its customers are from the automotive industry, which he says has historically been strong but has increased of late in line with the booming UK car and motorcycle market. “We’re now working with the majority of automotive OEM’s, either direct or via first tier suppliers”, says Mr Steele, who personally oversees Diametric’s work for the likes of Triumph, Jaguar Land Rover and Rolls Royce. “The work we do within the automotive market is vast and covers everything from exterior rear and bonnet badges to interior steering wheel badges, decorative trim and speaker badges. “One thing we’ve seen really boom is the demand from the automotive manufacturing sector for interior badges that work well with carbon fibre. As a result, we’re increasingly producing electroformed decals, which are applied directly onto the carbon fibre before a high gloss lacquer is applied to encapsulate the logo or branding. The result is high clarity replication of the image that can be seen but not felt on a material that is super-light.” By comparison says Mr Steele, the company’s work in the refrigeration industry illustrates the true diversity of Diametric’s product offering. For one its clients, Foster Refrigeration, which makes industrial fridge freezers and display cabinets, Diametric made the actual control panel

which is therefore both decorative and functional. It is comprised of a membrane switch keypad which incorporates a display panel, logo and model number. Diametric also provides the product with a logo label which is resin coated and also includes three dimensional bright silver lettering. Not just decorative and functional but also safety conscious, Diametric also makes the warning labels and ID labels that fit on both the external and internal parts of the refrigerated cabinets themselves.

We’re now working with the majority of automotive OEM’s, either direct or via first tier suppliers Graham Steele, Sales and Marketing Director Demonstrating that the company is also moving with the times, Mr Steele says it has also incorporated digital printing into its offering. “We can also implement, on the majority of our processes, litho and digital printing,” he says. “So we can take a high resolution picture or artwork and reproduce that on to sheeted aluminium or plastic.” “What we are trying to do is re-create someone’s brand as faithfully as we can but in as nice a way as possible to add value to the product,” says Mr Steele. “What makes us unique is the choice that people have when they come to us and we can provide them with an accurate representation of what their badge will look like. “There are ways and means of producing a sample or prototype. Some of our larger clients have rapid prototyping capabilities, such as 3D printers, and will actually generate a prototype

Embossed and ready for profile cutting

Diametric themselves in order to receive internal buy-in before providing us with the design files.” While some might think it strange that large companies don’t simply produce their own badges, according to Diametric boss Pete Knight, there really isn’t any difference between a corporate or industrial badge and any other part that might be used in the creation of a car, motorbike or fridge. “The more complex a product, the better it is for the manufacturer to be able to buy in high-quality completed parts so as to make assembly as easy as possible,” he says. “This is particularly the case

Looking at process For vinyl, polyesters and polycarbonate badges, colours are applied to the surface or subsurface of the material by silk screen, litho or digital printing. Embossed detail can then be added, such as a keypad with raised buttons or potentially some other different textured areas, which are also applied by a silk screening process. An adhesive is created and applied. Once the two parts are together the final profile is cut out and any additional internal holes are made using die-cutting on platen presses. Plastic moulded badges are created using a 3D data file supplied by the client. A tool is cut to create the final shape of the part that needs to be moulded. Molten plastic is then injected into the tool under pressure. The majority of such badges are supplied with a self adhesive but can also provided to suit a range of different mechanical fixtures. Moulded plastic badges can also incorporate additional processes such as the creation and application of a decal which can be inserted into a recess of the mould itself so as to add a corporate label or similar. Metal badges can be as simple as a nameplate such as you might find under the bonnet of your car. For such plates, the metal is anodised so that the pores of the material are opened up. The dye and inks are then printed on to the plate, which is then sealed. For other more complex badges, there are many different options available. Using a flat and relatively simple aluminium badge as an example, Diametric will take the metal, raise certain areas through an embossing process, then pass it through a post-finishing process which will add an effect to it, such as diamond cutting. The end result will include an image and text which will have a saw-tooth effect through it in order to better catch the light.

with the automotive industry where the production of many parts used on an OEM vehicle are outsourced, whether that be the piston heads or a corporate badge. “To us it does seem obvious that badge creation would be outsourced to a specialised company such as ourselves. Not only do you end up with more polished piece but, by using a specialist company, businesses are not limiting themselves should they want to easily update the badge in the future.”

Most of our competitors offer one or two elements of what we offer. They might provide aluminium products or plastic products but they generally don’t offer the added value extra assembly work that we provide Pete Knight, Managing Director

Diametric prides itself on having a real wealth of experience and a solid reputation for providing good service which incorporates a desire for the highest levels of customer satisfaction. If you are interested in seeing what Diametric can do for your brand and corporate image, you don’t have to do anything aside from pick up the phone. Following an initial consultation, Diametric can provide suggestions and recommendations and will provide a very detailed specification. Telephone Diametric on 0844 4123245

Adhesive gaskets being prepared for final assembly

Diametric is a cutting edge producer of badge and labelling solutions for the product design and manufacturing industry. Diametric offers more processes than any other provider. What’s more, its un-matched in-house capability and skills help it deliver more ﬂexible lead times, quantities and savings for badging and labelling. If you are involved in designing, manufacturing or promoting products, you can request a free sample pack from Diametric by visiting our website or by calling 01489 899555.

Diametric — the essential ﬁnishing touch. T: 01489 899555 | www.diametric.gb.com

Cranfield University presents

National Manufacturing Debate 2013 4th Annual Debate

Monday 20 May & Tuesday 21 May National Strategy for UK Manufacturing • How could manufacturing contribute 20% of UK GDP by 2020? • Can rebalancing the economy and growing UK Manufacturing happen without a National Strategy? • What should a National Strategy for UK Manufacturing include? • Join us to hear from industry leaders and network with key manufacturing professionals from a range of sectors. • 20 May: 14:00 – 17:00 Tours of Cranfield’s facilities • 21 May: 09:00-16:00 Keynote presentations chaired by Lord Alec Broers Manufacturing Debate presented by Maggie Philbin (BBC Reporter and CEO of TeenTech) Keynote speakers and panel members are: • Adam Buckley, Managing Consultant, The Manufacturing Institute • Mark Claydon-Smith, Lead - Manufacturing, EPSRC • Dr Geoffrey Davies OBE - Managing Director Alamo Group Europe Ltd, Vice President, Alamo Inc (USA) • John Elliott, Founder and Chairman of Ebac • Dick Elsy, CEO, High Value Manufacturing Catapult • Michael Fallon, Minister of State for Business and Enterprise • Brian Holliday, Divisional Director - Industry Automation, Siemens plc • Martin McKervey, Partner, Nabarro LLP • Peter Marsh, Financial Times • Stephen Odell, Chairman and CEO Ford of Europe • Mike Rigby, Head of Manufacturing, Transport & Logistics, Barclays

Book here:

www.national-manufacturing-debate.org.uk

Media Partner

registrations are free Sponsors

Backtoschool Campaign Update

Jane Gray brings an update on ’s campaign to see one manufacturing leader appointed to the governing board of one secondary school in every county in England and Wales.

ore good news this month. Andrew Esson, managing director of fluid hydraulic systems company, Quick Hydraulics, joined the governing board of Monkseaton Middle School in Tyne and Wear. Mr Esson’s daughter will attend the school from this September and he is keen to ensure she and her peers gain a thorough education in the application of STEM subjects to engineering and manufacturing challenges. It’s an appointment we are happy to celebrate, though it falls outside ’s specified aim to appoint manufacturing governors to secondary schools. So we are still keen to hear from schools and industry representatives in the Tyne and Wear area! Another step forward has been made in perhaps the most unexpected region – London. Ernest Bevin School’s staff assumed it would be impossible to find a local manufacturer to join its governing board, thinking that there is negligible production within the M25. Happy to be proven wrong, the South London-based school

I set up in London and New York because I, and the guys I’ve brought on, did not want to accept that we’d have to spend the rest of our lives travelling from one industrial estate to another

is now in talks with Dr Siavash Mahdavi, director of 3D printing company Within Technologies which is located in Wandsworth, barely 15 minutes drive from the school. Explaining why the idea of becoming a school governor appealed to him Dr Mahdavi told TM: “It is important to provide exposure to what manufacturing businesses are achieving early on in a young person’s education. Engineering is an enabling discipline. There are great careers available in industry, but engineering also includes highly transferable skills which will keep opportunities in the City and other sectors open.” So inspiring more students to take up engineering is not just self interest on the part of Within Technologies, but about wanting more young people to wake up to the importance of engineering skills to so many segments of the economy. That said, Mahdavi admits that it wouldn’t hurt to encourage a stream of future recruits. “It is difficult to find the people we need - skilled stress, software and mechanical engineers. We have three or four positions open now which we cannot fill.”

Brimming with opportunity It’s a frustrating situation for a fast growing company, using exciting technology, which has a lot to offer. “The 3D printing market is growing around twenty five per cent every year, so it’s actually hard for us not to be doing well at the moment,” says Mahdavi who established Within Technologies

at its current base four years ago and has just opened another site in New York. “There are five people out there at the moment but that will go up to about fifteen in the next few months.” Within Technologies designs and prints products for two major customer categories – aerospace and medical. For the former it offers specialist capabilities in creating lightweight titanium components. For the latter it provides complex lattice structures for surgical implants which promote osseointegration – the mechanical interlocking of bone and implant as the bone tissue grows into the insertion. Work with these growing industries implies a stimulating career with secure prospects. The cherry on the cake however, for the parents, staff and students who will gain so much more knowledge of Within Technologies and its environment should Mahdavi’s governor placement go ahead, is that the company offers competitive graduate starting salaries of around £30,000 and an accompanying lifestyle which confounds stereotypes. “I chose to set up in London, and now in New York, because I, and the guys I’ve brought on, did not want to accept that we’d have to spend the rest of our lives travelling from one industrial estate to another. “The nature of 3D printing means we don’t need the space traditionally associated with manufacturing facilities. So we can be in locations where we can still enjoy the convenience of restaurants, bars and theatres on the company’s doorstep.” @janefagray

To nominate an individual or school as the next target for ’s Back to School campaign contact j.gray@sayonemedia.com or w.stirling@sayonemedia.com.

CaLL for enTrIes reCognIse.engage.reWard.CeLebraTe

The Manufacturer of the year awards 2013 is a chance for you, your team and your company to receive industry-wide recognition for your achievements.

for further information and all general enquiries please contact Laura Williams on +44 (0)1603 327006 or email: l.williams@sayonemedia.com

These awards are dedicated to celebrating and recognising the exceptional achievements of manufacturing companies of all sizes, across all manufacturing disciplines.

CeLebraTIng The suCCess of uk ManufaCTurIng

Have you made advances in your sustainability performance? Is someone in your team a rising star? Have you made significant improvements to your working practices? Or, do you have an inspirational story to tell?

distinguish yourself and the work of your team. showcase your achievements and enter your company today!

Researched and developed by:

Corporate Sponsor:

This yearâ€™s awards will recognise and celebrate manufacturing excellence across the following categories:

LeadershIp and sTraTegy

InnovaTIon and desIgn

young ManufaCTurer of The year

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ICT In ManufaCTurIng Sponsored by:

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sMe ManufaCTurer of The year (Under 125 employees)

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sMe ManufaCTurer of The year (Over 125 employees)

The ManufaCTurer of The year Sponsored by:

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enTer noW 31sT July: entry deadline september: shortlisted companies announced early october: Judging day 4Th december: The Manufacturer of the year gala dinner & awards Ceremony, birmingham

www.themanufacturer.com/awards

Sharing

the action Employee ownership of UK firms is rising at an average annual rate of 10%. But how popular is it with the manufacturing sector and what is the attraction of increasing the employee shareholder stake? Iain Hasdell chief executive of the Employee Ownership Association shares some observations and evidence.

mployee ownership will play a key part in carving a new economic balance for the UK – including raising the contribution of the manufacturing sector. It represents business model innovation of a kind which will alter the economic consensus and create a more robust, flexible economy. Government has acknowledged this. In this year’s Budget statement the Chancellor linked employee ownership to

the growth agenda and promised that government will establish a range of resources to increase the number of employee owned businesses in the UK. This included the introduction of capital gains tax incentives on the transfer of existing businesses by current owners into employee ownership.

What is employee ownership? Employee ownership is now the most prominent alternative to

What to think about Interested in becoming employee owned? Alex Burton, an associate in law firm Pinsent Masons warns not to disregard the legal complexities involved. “These range from the type of shares to be offered and how they are valued, to what happens to those shares when an employee leaves in terms of price paid and destination,” says Burton. “Complications will also arise upon a sale of a company with employee shareholders.” Burton advises that any employer considering establishing an employee ownership scheme give carful thought to: What rights the shares to be offered will carry How it will: a) Value shares b) Recover and value shares from an employee who leaves and how the circumstances of departure may affect this c) Ensure employee shareholders sell their shares if the company is sold The costs of implementing and maintaining employee ownership

conventional forms of business ownership in the UK. The number of employee owned businesses is growing at an annual rate of around 10%. Employee ownership means employees have a very significant stake in the ownership and management of the business in which they work. It takes one of three forms: The workforce directly owning a large proportion or all of the share capital of the business The share capital of the business is held indirectly in trust for the benefit of the employees A hybrid of the above two approaches. Employee owned businesses now contribute around £30bn a year in GDP according to figures from the Employee Ownership Association and the model flourishes in all sectors, including almost every subsector of manufacturing. Successful examples of employee ownership in the UK manufacturing sector range through chemicals company Scott Bader, Tullis Russell – a paper and packaging manufacturer, precision engineering firm Gripple, advanced textiles company Scott and Fyfe, blades and scalpels maker Swann Morton and conserves manufacturer Wilkin and Sons.

Why convert to employee ownership? Employee owned businesses tend to have higher productivity, greater levels of innovation, better resilience to economic turbulence and more engaged, happy workers than conventionally owned organisations. Over the last 15 years, shares in employee owned businesses have considerably outperformed those in the FTSE AllShare Index. Employee owned businesses think and plan for the very long term, counteracting the effects that short term thinking has had on our economy. They are driven by the development of broad value rather than short-term financial gain meaning they retain jobs, skills and wealth in local communities. Employee ownership offers a brave new world for UK manufacturing. Its track record in boosting productivity could provide the surge that industry needs in order to close the 20% lag between the productivity of other G7 nations and the UK. It can also serve as a powerful force for image change, altering perceptions of the manufacturing sector as a process driven environment with low levels of employee engagement. But for employee ownership to really take off in manufacturing there will need to be far greater awareness of employee ownership. Its benefits and implementation options need to be communicated better and simplified. There also needs to be better access to finance and advice for manufacturing organisations that want to create and or fund employee ownership.

Manfacturing Leadership: Employee Ownership

You’ve been owned Feedback from three UK manufacturers who have become employee owned Children’s play park equipment

Sutcliffe Play, Pontefract

Textiles

Scott & Fyfe, Tayport

John Lupton, CEO: “With the right teamwork we can be entitled to a share of the profits, with the right attitude we can add real value and with the right effort we can go out and make it happen. It is a new dawn for everyone at Scott and Fyfe and it is up to us to seize this opportunity.” Michelle Quadrelli member of the finance team: “With existing management and employees as shareholders, control is in the hands of the people who know best and who are most committed to making it succeed.” Scott & Fyfe says employee ownership has brought: Improved engagement Clearer Communication Greater unity and stronger common purpose

Food

Wilkin & Sons, Tiptree Robin Sutcliffe, chairman: “Our sector has been challenging over the past three years, but the way employees responded has, I believe, given us a real edge over our competitors. I believe this is thanks to their ownership of the company and it manifests in high levels of cooperation, flexibility and motivation to support the business.” Martin Griffin, MD: “Since I joined Sutcliffe Play this year I’ve noticed a significant difference in employee attitudes compared to privately run companies. The team is more engaged and positive with a genuine interest in the future of the business.” Glen Bishop, metalshop rolling & bending operative: “After the challenge of entering into employee ownership, I feel the whole workforce has been prepared to meet any tasks and challenges set before them, and we look forward together to the future success of the company.” Sutcliffe Play says employee ownership has brought: Increased flexibility Increased involvement from a more engaged work-force Increased motivation and more resilience of morale

Ian Thurgood, joint MD: “Added value from the new factory development benefits employees directly; not just from a stronger balance sheet but also from our commitment to local employment and manufacturing.” Shane Waughman, factory supervisor: “Employee ownership provides a sense of belonging to a secure, independent and local family business where everyone is focussed on the long term future of the company and the people it employs.” Wilkin & Sons says employee ownership has brought: Employee control of voting rights on strategic issues through a trust establish in the 1980s. This owns more than 50% of the voting rights Balanced and broadly experienced decision making thanks to the diverse makeup of trustees including staff, directors and third parties. Long term strategy and commitment to capital expenditure. Employees have been closely involved in consultation and development plans for a new factory

For richer, for poorer Is your employer doing justice to your talents? Or do you feel tempted to move on to a company which does more to keep you happy? James Pozzi finds out which companies and sectors are seen as the most rewarding work environments for today’s engineers.

skilled individual committing to a career in manufacturing will benefit from an industry currently paying 12% above the cross industry average – yet remuneration of executives running manufacturing companies remains a divisive subject according to new data from Michael Page, an industry recruitment firm. Executive salaries in manufacturing rose by 4.6% last year but meanwhile, Michael Page finds that the manufacturing industry lacks confidence in employer ability to retain top talent. Fifty six per cent of respondents to the recruitment firm’s survey felt their company isn’t doing enough to keep the best people, up 12% on 2012’s results. It’s a lack of faith which may come to a head next year when it becomes compulsory for companies to have binding votes on executive pay every three years. On a more positive note, 79% of companies questioned said they expect to issue staff salary increases this year and 60% anticipate paying bonuses. The willingness to plan such largess is perhaps linked to a decrease in companies planning to increase headcount. Forty seven per cent said that they will do so in Michael Page’s 2013 survey, a drop of 12% on 2012.

Pay is certainly still an important factor. But incentives such as share ownership; pension schemes; health care options; and childcare options are having an increasingly important role in attracting talent Philippa Oldham, Head of Transport & Manufacturing, Institute of Mechanical Engineers

But some sectors have less need for caution. The resurgent automotive and aerospace industries are recruiting strongly, buoyed by heavy investment and increasing demand. Meanwhile, the energy sector and its emerging renewable and bio-technology industries are expected to grow substantially in the next decade. The top three jobs in demand across all three sectors are technical managers, process and quality engineers. Around 40% of manufacturing jobs filled by Michael Page last year were in production and operations. At the other end of the scale, the traditional heavy processing industries, particularly print, are finding it hard to attract people due to fears of long term viability. Defence, a victim of the biggest government cutbacks since 1991, has also inevitably taken a hit, with work drying up for contractors across a variety of sectors.

Top payers In the pay leagues, the oil and gas sector comes out top – even beating the finance and utilities sectors – as payer of the UK’s highest median salary. This is leading to increasing numbers of engineers flowing into the lucrative petrochemical production sector. Average starting salaries for a petroleum engineer range from £29,000 - £36,500 and in some cases this can double within as little as four years.

At executive level, the rewards for those working in the oil and gas sector are by far some of the greatest in industry and across sectors – a potential cause for controversy, as BP found last year when shareholders revolted against a board decision to pay CEO Bob Dudley a £4.3m remuneration package. Colin Monk, managing director of Michael Page Engineering & Manufacturing stresses that in the current climate it is important for manufacturers to foster a culture of fair play and recognition across pay scales. “Manufacturers are well aware of the disincentives to their work force on the shop floor if

THE BEST WAY TO RETAIN STAFF...

56%

say a positive working environment

Manfacturing Leadership: Pay & retention

GOOD NEWS FOR ENGINEERS ACROSS THE UK...

79%

of employers expect to pay salary increases this year...

packages seem unreasonable,” he said – and if they are not, they need only look to such recent union disputes as that which took place at Oxfordshire-based chocolate manufacturer Barry Callebaut in September last year, to see how sourness over unbalanced reward schemes can escalate into potentially disruptive unrest. The company saw a profit jump of 13.3% in 2011 and generously increased top level pay in response. Lower tier workers however, many of them members of the union Unite, received relatively paltry increases and strike action ensued.

Money isn’t everything Monk also identifies a growing interest in developing management internally, often from diverse engineering backgrounds, rather than recruiting career executives – as some labelled Michael Clarke, managing director of Premier Foods up until January of this year – to lead for short bouts. Clarke spent just 18 months in his post, but picked up a reported £2.7m for his contribution to improving performance at the struggling food manufacturer. But many engineers are not hungry for executive stardom according to Michael Page’s survey. An overwhelming number (56%) of respondents said a

Being based in Scarborough we are quite remote, so attracting smart and talented people is extremely hard Alan Pickering, managing director, Unison

positive working environment was the decisive factor in staying with a company, above promotion opportunities (17%) and salary increases (12%). The fact that salary is not always a driving factor behind recruitment can play into the hands of SMEs, who might otherwise be unable to attract talent over the head of large firms which often pay twice as much for equivalent jobs. Sarah Spencer, manager of IT & engineering permanent divisions at another recruitment firm, Progressive Recruitment, explains how. “It’s about the message SMEs send out. If it’s one of growth, innovation, creativity and being agile, that becomes an attractive proposition. Furthermore, in larger companies, movement is very slow, while SME’s can offer any prospective employee the chance to be a big decision maker.” Philippa Oldham, Head of Transport & Manufacturing at the Institute of Mechanical Engineers (IMechE) digs further into the alternative rewards companies can offer in lieu, or in addition to attractive salaries in order to compete for and retain talent.

“Pay is certainly still an important factor,” she says. “But incentives such as share ownership (p48); pension schemes; health care options; and childcare options are having an increasingly important role in attracting talent.” For many manufacturers though, talent concerns remain at the fundamental level of education quality and sector image, rather than being defined by their ability to compete with other companies for promising individuals. Alan Pickering, managing director at North Yorkshire based manufacturer Unison, doesn’t feel enough is being done to ignite interest in the industry during a young person’s formative years, thus depriving it of the employees who go on to become executives in more alluring sectors. Pickering, whose company supplies tube bending equipment and services says “Being based in Scarborough we are quite remote, so attracting smart and talented people is extremely hard. The best we can hope for is an inspired local person to groom in any of the engineering disciplines we need. This ranges across electrical, software, design and CNC.” @themanufacturer

Industry response Iain Maxted, managing director, Guardian Global Technologies shares his own experience of SME pulling power for engineering capability. “We’re a small company and we have to pay small company salaries. I’ve lost my senior mechanical design engineer to a large defence contractor. “They offered him a job, he accepted and we offered to match the salary, which was around £6k more than he was on. He agreed to stay, before they upped it again. “My belief is it was because they were on a cost plus contract, so they needed somebody and didn’t care what they paid to get him. This is an area which causes very specific recruitment and retention problems for small private companies – the big organisations can pay whatever they need to.”

Wised-up workforce

“At peak we have four temporary workers to one permanent. The temps we bring in, who may only stay for two weeks, need to be up to speed on quality and output within forty eight hours.”This is the challenge Simon Noakes, operations manager at garden equipment manufacturer Hozelock, shared as a ‘starter for ten’ at ’s most recent Manufacturer Director’s Forum debate.

he headline subject under discussion was; ‘How can UK manufacturers create engaged and effective workforces – and does this matter to their competitiveness?’ Guests came from a broad range of sectors, including defence, heavy industry, automation equipment and electronics, and ranged from SMEs to large organisations. Their diversity brought different interpretations of the latest buzz word in workforce management ‘engagement’. Pierfrancesco Maneti, EMEA head of the industrial research operation, IDC Manufacturing Insights, presented findings from a recent survey of manufacturing leaders across 11 countries which indicated: “Competitive European manufacturing is becoming less about definable measurements and more about ‘undefineable’ measurements. Less about labour, for instance, and more about informed workers and decision makers.” But while everyone agreed that this was important, Mr Noakes and others had nuanced views. “I’d love to have a fully engaged workforce with self managing teams,” Mr Noakes said to guests. But with incredibly volatile, weather reliant demand and a competitive differentiator which relies

Guests at this Manufacturer Directors’ Forum dinner debate represented: Autotech, Axel Wireless, BAE Systems, Caparo, Hozelock, IDC Manufacturing Insights, JCB, Nuclear Management Partners The Manufacturer is grateful to Kronos for sponsoring this event

primarily on being able to service changes in demand much faster than China-based rivals, Noakes said this is not possible. Instead, the most important question is, “How do we get people into the business and up to the required standard of quality and productivity quickly and effectively while also maintaining the flexibility to release them again if the weather turns outs as it has done this spring?” In this environment, Noakes said ‘engagement’ takes on a much more pragmatic hue. “Our processes are deliberately designed to be simple. We don’t need highly skilled individuals, but we do need people who respond well to the manufacturing environment – to the expectations we have around productivity and quality.” This scenario leads to engagement being defined by employee willingness to interact positively with measurement systems for these metrics – Hozelock uses a Kronos workforce management interface so that it can track productivity and defects by line and by individual, correlating staff intake with changes in KPIs. “Unfortunately,” comments Noakes, “we find it difficult to get that responsiveness in British workers. Around seventy percent of our employees at any one time tend to be from Eastern Europe. They engage well with our metrics driven culture.” Noakes’ observations resonated with others around

the table who found that, while a shortage of highly qualified STEM candidates is undoubtedly a barrier to UK manufacturing resurgence, the availability of diligent low and medium skilled workers is a more immediate factor in fulfilling demand. Ronnie Hamilton, production director at distributed antenna systems provider, Axel Wireless for example, said: “We don’t have the ability to predict when we are going to be busy. So we have to find people at short notice. We have tried to create a core skilled workforce but actually my biggest challenge is in finding reliable semi-skilled and unskilled people.” Such observations led quickly to discussion of cross sector competition for the highly transferable abilities of lower skilled workers and to the image of manufacturing operative-type jobs compared to, for instance, call centre or supermarket work. Graham McKendry, general manager at Nuclear Management Partners challenged his peers to think more carefully about the way they marketed their workplace and the job roles within it before throwing up their hands in despair at their inability to compete with supermarkets for employees. “You must turn the question back on yourself,” he asserted. “Why do people see those jobs as being more attractive or accessible? [Management author] Gary

Manfacturing Leadership: Dinner debate

Quote, unquote: key comments from the evening Why are supermarket jobs more attractive than low-medium skilled manufacturing jobs?! Graham McKendry, General Manager, Nuclear Management Partners: “In a market economy, where people will go for jobs which appeal or which they think will work for them, that is a question you have to turn back on yourself. We need to think harder about how we make manufacturing jobs seem more interesting” Recommended reading: G. Hamel, What Matters Now, 2012 What characteristics define competitive businesses today? Pierfrancesco Maneti, Head EMEA, IDC Manufacturing Insights: “Manufactures in the West have moved on from thinking about their workforce simply as labour. Today they think more about holders of knowledge and decision makers.” Emma Weir, Account Manager, Kronos: “Five years ago management gurus talked about the importance of job satisfaction. Today the focus is on employee engagement. There is a difference between getting someone to enjoy their job and getting them to enjoy doing it well.” Apprenticeships provide a long term skills-gap fix but are not a short term growth enabler. Andy Robinson, MD, Autotech: “The biggest challenge we have is managing our growth. We grew 36% last year and predict bigger growth this year. We really need more skilled people – which is why we set up our own apprenticeship training academy and recruitment company. But we still have to manage our opportunities carefully.” Hamel highlights that to compete for people at all levels today, businesses must take into account the determining factor of employee control, or perception of control, over their jobs and their careers. Companies which appear to deny control will lose out.” Such a hypothesis poses a big challenge for the manufacturing sector. The industry is popularly perceived as a rigid, clock in clock out work environment and it was suggested that better uptake of user-friendly workplace

Leadership and Strategy Calling for entries Does your company have an inspirational leader, with a unique and highly successful corporate strategy that’s worthy of recognition? Find out more at:

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management technology and communication of best practice flexible labour strategies, could help manufacturers attract appropriate workers at all levels more easily. It was agreed that a more flexible sector profile would help address gender imbalance in particular. Turning to the influence of pay on the ability of manufacturers to recruit the people they needed, regional and sector difference were observed and while some dismissed pay as a “short term motivator,” Brian Corless, managing director of Caparo Forging insisted that “Pay is the base line when it comes to recruitment in a competitive market.” John Kavanagh from JCB agreed. He shared how keeping the salaries of technician level jobs at its Staffordshire plant above those of local skills competitor Alton Towers was helpful in getting recruits through the door. But Mr Corless was keen peers should not to focus on recruitment strategies at the expense of retention, or to let themselves off the hook in considering their personal influences on the ability of companies to retain and develop talent once it is secured. “When it comes to recognition and retention, the way in which you manage people becomes the prevalent factor,” he said. “I have worked for one or two individuals whom I felt I would walk through brick walls for. Others have led me to look elsewhere because of their poor leadership. We should always be aware of how our approach ‘lands’ with the individuals we interact with.

Prepare your contribution

National Manufacturing Debate 2013

A National Strategy for UK Manufacturing The UK will drop from its current ranking as 15th most competitive manufacturing nation to 19th in five years time, and will be increasingly challenged to maintain a competitive edge by emerging nations such as Brazil and India, according to the 2013 Global Manufacturing Competitiveness Index report from Deloitte. The latest Manufacturing Advisory Service (MAS) Barometer however, shows a feeling of optimism among UK manufacturers, with 43% of companies questioned noting an increase in orders over the past six months, and 62% expecting sales turnover to grow between now and June 2013. A massive increase in the number of firms expecting to take on staff (39% up from 7%) is another indicator that companies are gearing up for growth. But can they achieve it? 45% of UK manufacturing firms say

they have inhibiting skills gaps and 27% say they do not have time or capacity to ‘work on; their business in order to seize opportunity. It is in the context of these facts and feedback gained over three preceding years of discussion that the National Manufacturing Debate 2013 will address what is needed from a national strategy for manufacturing in order to achieve a 20% contribution from the sector to UK GDP by 2020. We need a national strategy with a quantitative target and this fourth annual debate will challenge industry leaders to define the metrics and actions needed in order to hit it. Representatives from across sectors will meet, network and collaborate in an effort to define an industry-led strategy for long term growth and economic rebalancing.

The debate is important in bringing business, academia and government together. Too often we think in terms of silos Ian Gray, CEO, Technology Strategy Board at NMD 2012.

Two key questions will drive debate under the 2013 theme ‘A National Strategy for UK Manufacturing’. How would you respond to: The 20:20 debate - can we get 20% of GDP from manufacturing by 2020? Looking at peers in the western world it is clear the UK’s challenge to rebalance its economy is not unique. In Europe, industry accounts, on average, for around 16% GDP. To raise this contribution, obstacles must be overcome in market uncertainty, financing, skills shortages, lack of confidence, lack of investment and job losses in industry. Where should the focus be? Who can we learn from or collaborate with to answer these challenges to the sustainability of developed economies? Who should be responsible for drafting a national strategy for UK industry? If it is felt that a national strategy is required then who should be responsible for putting it together and initiating action? Government? Trade bodies? Or a collaborative network of UK manufacturing organisations? No doubt the direct involvement of the industry is vital - but how this input be managed? The scope for discussion here is huge, but the hope is that the outcomes from NMD 2013 will go some way to influencing the development of a strategic forum that includes key figures from all of the above groups.

Event preview National Manufacturing Debate 2013

Speakers and panel members In 2013 participants will include: Keynote speakers Michael Fallon, Minister of State for Business and Enterprise Martin McKervey, Nabarro LLP Peter Marsh, Financial Times Dick Elsy, High Value Manufacturing Catapult Adam Buckley, Managing Consultant, The Manufacturing Institute Brian Holliday, Divisional Director - Industry Automation, Siemens plc Dr Geoffrey Davies OBE, Managing Director, Alamo Group Europe Ltd, Vice President, Alamo Inc (USA) John Elliott, Founder and Chairman of Ebac Stephen Odell, Chairman & CEO Ford of Europe Keynote speakers will be introduced by Lord Alec Broers. With a distinguished career in electrical engineering, including almost 20 years in research with IBM and a recent term as president of the Royal Academy of Engineering, Lord Broers is an informed and influential voice in the formation of industrial policy and strategy. He acted as chairman of the House of Lords Select Committee for Science and Technology from 2004 – 2007 and strongly believes that science and engineering are two sides of a coin with immense value to social development. Additional Panel members Mark Claydon-Smith, EPSRC Mike Rigby, Barclays Professor John Nicholls, Cranfield University The debate will be chaired by Maggie Philbin, BBC reporter and CEO of education initiative, TeenTech. Ms Philbin has worked in radio and television for 30 years on a wide range of science, medical and technology programmes. She is perhaps most wellknown for much loved shows like Swap Shop and Tomorrow’s World and today provides analysis and comment on technology developments while keenly campaigning to raise the profile of engineering careers with young people and women in particular.

Register now Details of the conference are available on the website www.national-manufacturing-debate.org.uk. Make sure you join us for this key event in any manufacturer’s diary. Corporate sponsors:

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What success

hangs on What do you imagine when you hear UK government rhetoric about support for growth in advanced and high value manufacturing? Probably not a facility which produces 100 million coat hangers a year at 12p a unit. Yet Jane Gray finds that Mainetti is indeed the epitome of a competitive, value add business.

t may surprise you to learn that the UK market for garment hangers, the kind you will find in every clothing shop and every individual’s wardrobe in the developed world, is worth around £110 million and that UK-based manufacturer Mainetti is the largest company in the market. The company manufactures around 100m hangers for domestic and international customers every year from its highly automated factory in the Scottish borders. It also recycles around 250 million hangers per annum at a site in Chester. Recycled product is largely exported for use in a closed loop recycling operation and ultimately recovered in the UK where damaged or out of spec hangers are destroyed. Raw materials are salvaged and remanufactured into new products. Completely closed loop economics – a hot topic today with the likes of the Ellen Macarthur

Foundation, the Design Council, Royal Society of Arts and other research and professional engineering bodies – is old hat to Mainetti. Integral to understanding how Mainetti creates wealth and employment in the UK while churning out a low cost product is to challenge common perceptions of ‘value add’ says Jim Hutchison, managing director. “People tend not to think about it, but a hanger is a design tool, a piece of materials handling equipment and a marketing device,” he says. “Some garments are made while they are on the hanger in order to optimise the way a garment is displayed to the consumer. The hanger is then used to move the goods around the globe and branded hangers are a constant reminder to consumers of where they bought something.” In short, they are a subtle but essential way for retailers to add value to their operations and customer experience. “There is a lot more complexity, collaboration and innovation behind hangers than most think and we undertake everything from design, manufacture, recycling and reclamation for hangers used in international markets here in the UK,” sums up Mr Hutchison.

Garment hangers Mainetti UK

A game of pennies That said, margins in hanger production are low at the best of times – which today it certainly is not for UK retailers. To remain competitive, Hutchison admits Mainetti must play “a game of pennies” collaborating with customers to find ways to reduce cost and seeking greater efficiency and flow throughout the closed loop product lifecycle. Mainetti’s relationship with customers is good. In the UK they range from top end retailers through the mid-market to the supermarket and value sector. They are all fiercely competitive on the high street, but willing to work with Mainetti on initiatives which reduce shared production costs and environmental footprint, such as standardising the use of black hangers on all but a few selected premium brands. When it comes to its own efficiency, Mainetti’s lean journey is at the core of its ability to maintain a competitive offering from a UK location. “At the volumes we are dealing with, finding a way to shave a penny off production costs makes a big difference,” says Hutchison. And lean principles have enabled employees to find savings in a number of areas.

People tend not to think about it, but a hanger is a design tool, a piece of materials handling equipment and a marketing device Jim Hutchison, Managing Director Mainetti’s lean journey started around five years ago and has progressed through the implementation of 5S, reconfiguration of the shop floor into cell oriented manufacturing, reduction and efficiency measures in labour, and workforce training in six sigma techniques. Today this growing lean capability is focussed on review of production processes and overseen by newly appointed manufacturing director Graham Wilson, who joined Mainetti as an apprentice. Summing up the challenge that he and colleagues have come to understand as lean knowledge and culture has developed, Mr Wilson says, “It is all about getting the right product in the right place at the right time, with no inventory, but while maintaining volume.” It’s an agility challenge which can be complicated by sudden demand for out of season products - as experienced in the interminable winter this year – and by changes in customer supply strategy. Hutchison explains, “This ‘spring’ we had massive demand for knitwear and jacket hangers. At the same time, we also had to produce t-shirt hangers for the summer products retailers ship in from China. Once they’re on the water it’s no use saying ‘it’s too cold for anyone to want them’.” A point that some UK retailers have realised, “We are seeing a number of customers moving production of garments nearer. George at Asda, for instance, is using more UK garment producers and Tesco has a “Made In Britain” range. Wilson picks up the tale. “It’s a positive trend. But it means we have to become even more flexible in manufacturing because retailers are able to respond much quicker to variations in consumer demand.”

Mainetti UK at a glance Established

1974

Locations

2 sites in UK

Employees

500 (UK)

Product

Garment hangers for clothing retail customers

Key markets

UK for primary product, Western Europe, Asia and Indian Subcontinent for recycled product

Turnover

£24.3m UK

Growth target £30m in 2 years Having the right people in the company, who understand this challenge and where the most relevant efficiencies should be sought is the only way to keep up with the demand for continuous improvement insists Wilson. “The huge majority of savings have come from the staff on the shop floor. They are at the heart of the company.”

Key lean achievements/savings: Saving in labour cost through cell manufacturing Saving in machine cost by reconfiguring equipment Saving in raw material cost by using recycled materials

Enabling independence Wilson says that workforce confidence in applying lean tools and techniques has reached an important milestone recently, with teams becoming self managing. But of course the reliability of such a self managing structure relies on more than just lean expertise. Luckily, Mainetti has a strong legacy of investing in technical capability too. The company has a wealth of automation and robotic equipment which is regularly upgraded and requires skilled maintenance – Hutchison says Mainetti spends around £500,000 a year on maintenance capex, keeping its kit in top performing condition. In addition to this, and to ensure the investment is optimised, there is a training budget of around £200,000 for continuous professional development, apprentice programmes and graduate training. A focus for skills investment today is in expanding apprenticeship provision. Always the dominant form of recruitment and development for electrical engineering requirements apprenticeships are now in development for areas such as tooling, fabrication and process engineering. All apprenticeship training, which takes place over four years, include education in lean manufacturing principles – the core structure which Mainetti’s confidence and global competitiveness hangs on.

EEFInsight Yes

radical and robust long term ideas need to be implemented and quickly. The cornerstones for any policy or framework from government need to include:

1 Tom Lawton, head of manufacturing at accountancy firm BDO, with which EEF conducts a quarterly Manufacturing Outlook survey, defines the necessary cornerstones of Britain’s elusive industrial strategy and calls for the appointment of a Minister for Manufacturing.

rom a global perspective the future for manufacturing looks extremely positive. The growth of China, India and other developing economies continues to create huge numbers of new consumers demanding more manufactured goods. Opportunities in these rapid growth economies should more than compensate for weaker markets closer to home. Furthermore, while competition for market share in rising international markets is, and will become more fierce, UK manufacturing holds a highly regarded global reputation for its quality, innovation, service and legacy history which should offer competitive edge.

Defying past failures The decline of UK manufacturing has been significant. In 1980 the UK was the fourth largest manufacturing nation in terms of share of global value added. We since dropped to ninth place in 2010 and will likely slide further in the short term as a chasing pack of developing economies use manufacturing as their key driver for economic growth. In developed countries such as the UK, it is to be expected that manufacturing’s share of GDP and employment will

Have your say at www.themanufacturer.com

decline over time, as the growing wealth of the country switches demand from goods towards services. But this does not mean that manufacturing isn’t an integral part of the economy or that its continued decline as a proportion of GDP is inevitable or, indeed, irreversible. The decline of manufacturing in the UK has, however, been more pronounced than in most other established manufacturing economies. Perhaps the single greatest factor in this has been the failure of successive governments’ to recognise the importance of the manufacturing sector’s contribution to the UK economy. Its historical ‘hands off’, market driven approach means that today the UK is not playing on a level playing field with economies which identified the importance of the sector early on and established cultures of structured intervention and support to protect competitiveness in innovation, research, design and productivity.

Creating a long term sustainable framework Establishing an industrial policy in a developed economy within a rapidly changing global environment is a complex task. But to stall ongoing decline in the UK’s industrial economy, more

Development of clear and sustainable objectives for UK manufacturing aligned to current strengths and opportunities for growth. Britain is not a low cost manufacturing location. It must grow and compete in the global market based on its key strengths of design, innovation, service and productivity. Establishment of policies that will help support the factors above over the long term. For example, UK investment in automation has been weak compared to most of our global competitors. This damages the sector’s productivity and innovation. Tax policies that really support significant capital investment would give a clear signal to the sector. Setting targets that measure and help rapid response to the factors in both of the above. The most powerful might be share of GDP or share in value added over the next 5, 10 and 20 years. Manufacturing’s share of UK GDP is currently around 12% - would it be too ambitious for government to set a target of 15% by 2020? In the absence of hard targets, there can be no accountability for developing and implementing initiatives that work in the long-term. Many initiatives have recently been introduced to ‘help’ manufacturing but too many have simply not delivered.

Be bold A decisive first step in establishing and gaining traction for a long-term, cross-party industrial policy with manufacturing at its core would be to appoint a Minister for Manufacturing, ideally as a Cabinet post. Such a move would give government industrial policy real edge and the ability to cut across various intergovernment departments.

25% off your complete guide to industry pay

The Manufacturer is presenting its readers an exclusive offer in conjunction with EEF, the manufacturers’ organisation Subscribe to all four of our 2013 Pay Benchmarking reports at a reduced price of £1,496 (+ VAT) and benefit from a complete guide of invaluable pay information. – Directors’ Pay Benchmark – out now! (rrp £630 + VAT) – Issue 8, 2013 Workforce Pay Benchmark – out now! (rrp £420 + VAT) – Issue 9, 2013 Workforce Pay Benchmark – released September 2013 (rrp £420 + VAT) – Professionals’ Pay Benchmark – released November 2013 (rrp £525 + VAT) These exclusive reports cover pay and benefits for just under 200 jobs in the manufacturing and engineering sectors from shop floor, right through to top level directors. With detailed regional and national pay information on a per job basis. – Save time: find relevant pay data – quickly – Save money: know the market rate when recruiting – Retain employees: understand pay rates in the manufacturing and engineering sectors

To order your subscription to the pay benchmark reports, please visit http://bit.ly/EEFPayBenchmarking. For further information email: infoline@eef.org.uk and quote TMPB2013.

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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).

Manufacturer HP APRIL 2012.indd 1

13/02/2013 10:34:34

Workforce Full focus on skills and skills: Semta

Commission for Employment and Skills (UKCES) to provide grants to companies with fewer than 250 employees to do just this. We helped recruit 200 graduates over six months via the Employer Investment Fund, offering £1,000 grants to SMEs who would employ an out of work graduate for at least 12 weeks. But this is just one way Semta has been helping firms across the UK access funding, mentor and train apprentices and graduates, assess their supply chain capability, produce company training plans and provide high quality work programmes. The benefits of the broad swath of Semta’s work on skills are demonstrably evident from the shop floor to the managing director. Here is a snapshot of some of the ways we have worked with employers over the past year.

Lynn Tomkins, UK Operations Director for Semta, shares the ambitious work the sector skills council is undertaking to help UK manufacturing increase its contribution to the national economy.

ith over 128,000 companies and a 1.66 million strong workforce, Government recognises it is vital for the future of the UK economy that manufacturing thrives and employs highly skilled people in forward-thinking, hi-tech environments. To support this Semta is leading a broad range of initiatives to raise the skills profile of the industry – especially for SMEs, the majority segment of UK manufacturing and that which holds the highest growth potential. Making it easier for SMEs to hire and train graduates is one example and Semta was recently awarded a contract by the UK

Asmech Systems Limited, Nottinghamshire Employees 16

smech Systems Limited design, engineer, manufacture, install and service their entire product range that includes slat conveyors, side gripper elevators, bottle palletisers, tray packers and loop invertors. Shane Gunstone left school aged 16 to become an apprentice plater/welder and founded Asmech in 1995. He expects its workforce to increase from 16 to 25 and turnover to double to more than £5 million over the next

three years. Shane worked with Semta, to recruit, train and provide ongoing support for apprentices. As a result he has taken on two apprentices and plans to take at least one a year going forward. He was impressed with both the rigorous recruitment and the ongoing support the company and the youngsters receive. Kyle Commins and Adam Fox, both 16, joined Asmech as apprentice engineers and spend one day a week at North Notts College as part of their training. “They are first-class apprentice engineers, with a

Modern engineering is not about shoeing horses and pouring molten metal – it is so much more than that and it is important as employers we engage with local schools to show them what we are all about Shane Gunstone

fantastic attitude and I really appreciate the job Semta continues to do with them,” said Shane. “Modern engineering is not about shoeing horses and pouring molten metal – it is so much more than that and it is important as employers we engage with local schools to show them what we are all about. “We would recommend other companies to use Semta because they work in partnership to get the best results. That is what all businesses need.”

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Workforce and skills: Semta

Consarc Engineering, Glasgow Employees 48

major expansion has opened the doors to new orders and seen Consarc Engineering take on a Modern Apprentice for the first time in many years. Consarc part of the Inductotherm Group, specialises in vacuum engineering. It has over 40 years of technical experience in design and manufacture of a wide range of advanced vacuum furnaces and controlled atmosphere furnaces for the processing of metals, speciality alloys and engineered materials. Consarc recently opened an expansion of its facility based on current orders and prospects in the aerospace,

industrial gas turbines, nuclear and special steels sectors. The extension has allowed the company to increase its workforce in engineering, manufacturing and service with new mechanical/ electrical engineers and service engineers joining the team – including a modern apprentice and a graduate. Managing Director Eric Rennie said: “With an ageing workforce and a growing order book we were faced with the same problem many engineering companies have and it is something we needed to address.” Mr Rennie met with Semta and an assessment was done of the company’s skills needs. Discussions were held about

potential funding and during the meeting a training provider, East Kilbride Group Training Association (EKGTA), was contacted and secured to support Consarc’s apprenticeship programme. “Having not taken on an apprentice for some time we needed support and Semta provided it, giving us access to funding, a good training provider and advice. They understood what we needed.” “It has never been more important for firms like ours to grow our own skills,” said Eric. “Modern apprentices and graduates are vital to replace the highly skilled engineers who will soon be retiring.” Despite the recession, the firm is growing 20% year on year, with just under half of production being exported.

Mollertech Cwmfelinfach, Newport Employees 320

strong partnership with a local college, combined with support from Semta and the Welsh Government, is helping plastic injection moulding specialist Mollertech shape the future of a new generation of skilled workers. Mollertech recently won ‘Best Company 2012’ at the Pathway to Apprenticeships (PtA) Awards in recognition of its commitment to the programme, which helps employers recruit apprentices and gives unemployed young people in Wales a valuable opportunity to gain experience and, in many cases, employment. Mollertech makes the interior plastic trims for the automotive sector. Customers include Honda, Nissan, BMW and Toyota. The business has two apprentices thanks to PtA and plans to recruit more in the near future. Maintenance manager Geraint Taylor said: “It is a

fantastic scheme. We work closely with Coleg Gwent, Cross Keys, giving selected unemployed youngsters a proper taste of manufacturing. “Around 30 took part last year, each of them spending a period of time alongside our highly skilled team members. “All were at a high standard, but two of them absolutely stood out with commitment, enthusiasm, and a keenness to learn. They showed a real interest that will enable them to quickly gain knowledge.” Mollertech made the necessary arrangements in its budget to allow Oliver Barton and Joe Black to begin their multiskilled apprenticeship in the maintenance area. “Without PtA it would have been impossible to justify recruitment,” says Geraint. “Semta and the college do all the initial criteria for basic training, which previously employers would have had to fund. We can cherry pick from high calibre candidates

who have already been vetted. It is then up to the youngsters to use the process like a long interview to impress the employer.” Geraint says Semta and the college provide the backbone to PtA. “The support from Semta Wales’s staff and the college is fantastic. They help each apprentice through college and audit the process to make sure the are progressing and that we are meeting our obligations.” In England, Scotland, Wales and Northern Ireland – Semta is focussed on closing skills gaps in the supply chain, recruiting new talent through apprentices and graduates, and helping employers access any funding available. To arrange for one of Semta’s specialists to come out and visit you please contact Semta on 0845 643 9001 or via email customerservices@semta.org.uk.

A decade of accomplishment As STEMNET celebrates its 10th anniversary Kirsten Bodley, chief executive of the popular skills initiative, pays tribute to the tireless work of its STEM Ambassadors and explains why the practical programme for employer engagement works for busy professionals.

Image from STEMNET’s Leading Lights campaign to showcase engineers at work. John Gray, specialist engineer for the BBC is pictured here

Is STEMNET making a difference? According to the Science and Technology Facilities Council the efforts of STEMNET and other engagement initiatives to promote STEM careers are having a real impact on the subject career choices being made by young people. Research from the Council shows: A 36.1% rise in young people taking GCSE science in 2012 Increasing popularity of maths as an A level subject choice. 10% of all A Level choices are now for maths. Prof John Womersley, CEO of the Science and Technology Facilities Council says: “A large part of this is down to the dedication of STEM Ambassadors. Their continued support is essential if we want to effectively communicate the virtues of STEM to today’s young people and to show them what these skills can lead to.”

ecent research from the Royal Academy of Engineering estimates that engineering contributes £481 billion to the UK economy but also suggests that the UK must increase its number of STEM graduates by as much as 50% in order to fill engineering job roles with people who can keep British industry globally competitive. It is therefore vital to engage with students at key points throughout their education and inspire them with the broad and exciting career opportunities that a career in engineering can hold. This is what STEMNET (Science, Technology, Engineering and Mathematics Network) was established to do. We are an independent charitable organisation receiving grant funding from the UK government to inspire young people in STEM subjects. We help ensure that the UK maintains a flow of well-motivated, high-quality individuals into roles that apply STEM knowledge and skills. One of STEMNET’s major programmes recruits ‘STEM Ambassadors’ – industry representatives who want to actively engage with young people to enthuse them. The programme celebrates its tenth anniversary this year and the variety of activities,

events and mentoring schemes through which Ambassadors can communicate the work of engineering professionals is ever increasing. The STEM Ambassadors programme enables employers to forge connections with local schools to demonstrate how STEM is practiced in the workplace, illuminating applications across a vast range of careers. STEM Ambassadors are volunteers and the majority are professionals working in STEM careers – though they come from a variety of levels within the myriad organisations of all sizes and across sectors. Their immersion in industry means they offer genuine, informed insight which can enhance the national curriculum. The STEM Ambassador programme has around 25,000 volunteers working with young people, schools and youth organisations across the UK. Their work is invaluable and STEMNET makes sure to recognise and celebrate it. Elizabeth Orchard, an Assistant Civil Engineer at Peter Brett Associates in Reading was recently awarded Most Dedicated STEM Ambassador at the STEMNET Awards. Elizabeth’s employer, Peter Brett Associates, is commited to engaging with the local community but didn’t have

Workforce and skills: STEMNET

a structured approach or programme in place until Elizabeth developed a STEM Ambassador group there. Over the past two years she has grown the group and now over thirty of the organisation’s employees are involved around the country. STEM Ambassadors are asked to take part in a minimum of one activity per year, allowing for flexibility in how much time an individual or employer can commit. Many, such as Elizabeth, support a lot more than this. She is now collaborating with Oxford and Cherwell Valley College and Reading College to design the curriculum for a new University Technical College for 1419 year olds, due to open in Reading in September2013. Peter Brett Associates, is one of four industry partners for the new UTC. Others are Microsoft, Cisco and Network Rail. The success of the STEM Ambassador programme relies on the skills, passion and expertise of individual volunteers. But the support of employers is also critical. We need them to approve the time their staff spend on the programme. Around 3,000 employers, large and small, support engagement with the STEM Ambassadors programme and many more support in other ways. But although the STEM Ambassador programme is strongly endorsed, the challenge of communicating STEM career opportunities clearly and progressively – so that perceptions keep pace with changes in technology, markets and business models – is ongoing. We always need more Ambassadors to take ownership of industry skills gaps and recruitment challenges. If you would like more information about how STEMNET can help your business engage with the community, visit: www.stemnet.org.uk

Why do employers support staff in becoming STEM Ambassadors? Petrochemicals INEOS, Grangemouth: David East, Communications Manager “Delivering and supporting STEMNET activities enables us to build our profile and maintain our reputation in the local community. They also help to develop the skills and knowledge of our employees and contribute to their personal development.”

Automation technology

As a small local employer, the STEM Ambassador programme has provided a great platform for ST Robotics to connect with the community and help students in the area realise their potential in STEM careers Geena Chacko, Applications Engineer, ST Robotics, Cambridge

ST Robotics, Cambridge: Geena Chacko, Applications Engineer “As a small local employer, the STEM Ambassador programme has provided a great platform for ST Robotics to connect with the community and help students in the area realise their potential in STEM careers.” ST Robotics was awarded Most Dedicated Employer at the 2012 STEMNET Awards for its development of a programme of robotics-based educational activities for local schools, delivered by STEM Ambassadors.

CAD training and consultancy Studioworx, Milton Keynes: Dan Doleman, Technical Director “Students can change materials and create fancy shapes using a CAD system, but it is important to ask them ‘why would you want to do that in the real world? How would a product be enhanced by you doing so?’ “Visiting schools and finding out the level of competency of young people also keeps you in touch as a business with the quality of people you should employ.”

Construction machinery Caterpillar UK, Peterborough: Simon Collins, EAME Future Talent Development Manager, “Caterpillar has over 200 STEM Ambassadors in the UK, a number that continues to grow as more of our employees come to appreciate the tremendous opportunity this scheme provides to share their experiences with young people and encourage them to pursue a similar career path. “We use the Ambassador programme as a personal development opportunity for our staff as well as a highly effective way of engaging with young people. The flexibility that the programme offers in terms of the levels of commitment required from Ambassadors means that their supervisors are more willing and able to facilitate participation.”

f o e e y o l p Em month the 2013 y a M

Meirion Richards Operations manager, Burton’s Biscuit Company Food and drink manufacturing is a highly innovative sector where around 1,500 new products are launched every quarter, but it also has huge scope to increase competitiveness through more ambitious investment in high tech production. Meirion Richards is making sure his organisation does not miss any such opportunities. What is your role and its main responsibilities? I manage the operations team at our site in Llantarnam, Wales, where we make some of the nation’s favourite treats, including Jammie Dodgers and Wagon Wheels. I’m responsible for nine manufacturing lines making over 200 SKUs. What are the key technical skills you use? I came to Burton’s after 16 years at Ford Motors, bringing with me a good background in lean manufacturing and how best to integrate the tools and techniques into an existing organisation. My lean knowledge was one reason why I was heavily involved in the introduction of our new control room, a high tech centre which is the first of its kind at a UK food production site - though relatively common in the automotive industry (p66). What personal characteristics help you in your role? I’ve always loved manufacturing since I started out as an apprentice. I like working with people and helping to build successful teams. Like everyone in manufacturing, I’m quite resilient and really enjoy solving problems on a daily basis. What do you consider to be your biggest personal success at the company so far? The new control room is freshly launched and a major step for the business. I was very close to implementation of the technology right from mooting the idea initially to organising £100,000 worth of training for my colleagues and me and I’d say this has been my biggest achievement so far. I won a Burton’s CEO award for this work recently which I was chuffed with – but to be honest, it could have gone to the entire team!

Have your say at www.themanufacturer.com

Why is this such a success? Everyone at the Llantarnam site is really proud of the installation. We spent a vast amount of time planning and looking at various technology options making sure we made the right choices for the site. It was a collaborative process in which I got to listen to the production team’s concerns and consider how these should effect the implementation. Seeing the technology now in place and working extremely efficiently to reduce waste by rapid identification and correction of potential quality issues, is immensely satisfying and great for the business too. What are the most rewarding parts of your job? Manufacturing offers short and long term rewards. Seeing goods leave the site every day gives the buzz of knowing you are delivering for the business – and when you know the products are as tasty as ours you also get a kick out of giving a customer a treat. Longer term, that feeling of delivering for the business translates to job security for colleagues and the community around the site. That’s a great feeling.

CV in brief Age: 36 Education:

1st Honors BEng HNC, electro-mechanical engineering Apprenticeship; electromechanical engineering

Career to date:

The Burton’s Biscuit Company: operations manager since 2008 Ford Motor Co: 16 years, in a number of jobs from apprentice to senior management level

How do you think best to get more young people interested in manufacturing? When I left school people were focused on university, and manufacturing was portrayed as a dying industry in the UK. This is clearly not the case. There are endless opportunities for young people in this industry, but I’m not sure the message to school leavers has changed. Manufacturers need to get into school employment days and demonstrate the excellent careers and opportunities available. Entering manufacturing is a choice I have never regretted. I wouldn’t work in any other field.

Industry meets University

The part-time post grad

Research and learning facilities at Cranfield University

Marcio Bonifacio of Z-Tech Control Systems explains why his MSc in Engineering and Management of Manufacturing Systems is integral to achieving his ambitions in a technology driven career.

n 2012 I graduated Anglia Ruskin University, Cambridge, as an Electronics Engineer. I am 24 years old. In the final summer of my first degree programme I undertook an internship with Z-Tech Control Systems – a control systems company which provides SCADA technology, process control, PLCs and more for a wide range of sectors. Shortly after starting this placement, I was delighted to be offered a full-time position with the company. It’s amazing how much I learnt in my early days at Z-Tech. There’s no substitute for experience in the field and it was quickly driven home for me, in a way which had not been so tangible before, that my colleagues and I will be driven by technology. Realising this made me keen to enhance my understanding of how to exploit and manipulate technology within modern

There’s no substitute for experience in the field and it was quickly driven home for me that my colleagues and I will be driven by technology

manufacturing. Without delay, I started a masters course at Cranfield University – an MSc in Engineering and Management of Manufacturing Systems, with the full backing and sponsorship of Z-Tech. My work with Cranfield is beneficial for both parties. The industrial world has increasing requirements to be green and this puts growing emphasis on lean manufacturing, energy efficiency, and sustainability. Our customers are dealing with these concepts on a daily basis and we are challenged to keep providing more innovative solutions to their problems. My course at Cranfield lays great importance on understanding how to design, create and manage efficient and environmentally sound manufacturing and supply chain systems. It also incorporates consultancy skills which I hope will help me develop the solutions customers need more effectively. Another key issue faced by my industry, and others, is safety and security. My MSc is accredited by the Institute for Engineering and Technology and I have attended IET conferences about Cyber Security which highlighted how to identify vulnerable systems that can be exposed to threats. The latest cutting edge security is integral to the systems I

implement – it is far better to invest in protection of key assets, than be surprised by threats when they occur. My work with Z-Tech is also helping me to achieve higher results in my studies with Cranfield – a personal bonus and very satisfying. For instance, I am currently working on a project for Z-Tech which involves the protection of workers and machinery in a large industrial plant. This is achieved by installing safety sensors, safety controllers and emergency stops. I then need to develop and programme a safety code to deal with the integration of all these devices. The project challenges me to analyse new thought processes and develop a practical technical process to implement them with a safety bias. This experience is extremely valuable to my studies and I hope it will help me achieve my best, getting the most out of the time and money invested in the course. Ultimately, this will augment my CV and future career opportunities with Z-Tech where I plan to stay for the foreseeable future. It’s a forward thinking innovative company and for me is a pleasure being part of a winning and growing team which has supported me in developing professionally and personally from my first day of employment.

For 25 years MCP has been working with clients on a worldwide basis to deliver business improvements in manufacturing and maintenance. Critical to business success is continuous assessment, improvement and engagement. A key tool of the improvement journey is AMIS. It was 25 years ago that a survey commissioned by the DTI into the UK’s maintenance management practices revealed that an astounding £1.8 billion of potential savings could be made through increased understanding of maintenance management by industry. This led to the introduction of AMIS (Asset Management Improvement Service), the DTI supported benchmarking service provided by MCP. By 1997 the DTI estimated that the AMIS approach had potentially saved UK industry over £300 Million.

MCP 25 years of Continuous Improvement supporting the journey to world class operational and asset management excellence

Is the organisation designed to deliver high performance with clear accountabilities? Is the maintenance workload defined and with the right level of skills? The working relationship between engineering maintenance and operations/production is critical to success.

Planning Planned and unplanned maintenance should be recorded. Maintenance and production management must be involved in new equipment decisions, from the initial concept stage to operation - including planning of future maintenance spares, labour, training and equipment requirements.

Productivity What is the deployment and productive effectiveness of staff? Do operators carry out basic asset care tasks? (lubricate, inspect, change-over)

Parts and Materials Does the maintenance team have access to an up-to-date stores catalogue showing all stock items, locations, EOQ, re-order points, including details of consignment stocks and direct supplies? Are the stores lines controlled using a comprehensive computerised inventory management system?

Is there a formal programme which analyses maintenance, technical and cost data and identifies the CI objectives and development of action plans. Are large and repetitive equipment failures formally analysed to determine root cause of failure and identify any weak components, processes or procedures.

AMIS has continuously evolved to measure the effectiveness of an organisation’s asset management systems, maintenance approach, organisational structure, training and development, computerised maintenance management systems and operational processes.

Organisation

Is labour and material cost information available to teams and management to drive improvement? Analysing costs help assess overall equipment effectiveness.

Continuous Improvement

Now 25 years on MCP has conducted their 3-5 day AMIS maintenance assessments at over 1500 sites worldwide, and helped in over 4000 Operational Improvement Programmes in industries ranging from food and drink, chemicals, automotive to pharmaceuticals.

There are 9 categories that can be harnessed to help in any improvement programme.

Cost

Training Do the operators and technicians receive technical training on a regular basis? Does the workforce receive approx. ten days training per year? Have the team leaders received training in team leading and management skills?

Business Results:

Where companies have encompassed wholeheartedly the AMIS approach and supported the AMIS journey results have included: • Improved asset management practices • Improved customer satisfaction and service levels • Improved asset performance leading to improved availability and OEE • A consistent and proven approach for World Class asset management • More cost-effective use of engineering and maintenance resources

People People are the organisation. Does the organisation encourage an improvement culture? Does the senior management team lead by example? Is there a process for employees to discuss business topics with organisational leaders? Are there processes for measuring and reviewing actual performance against objectives?

For further information:-

MCP Consulting and Training Phone: 0121 506 9034 www.mcpeurope.com

Health & Safety: FFI

m u f o f I F F e e F

Is HSE out to get manufacturers with its new Fee for Intervention? Harry Dalton investigates awareness of and attitudes towards the new system.

he Fee for Intervention (FFI) came into force in the Autumn of 2012 and significantly changed the way in which the Health and Safety Executive (HSE) charges companies for breaches in health and safety regulations. But despite some forewarning – The Manufacturer published advisory articles on the change last year – and a bedding-in period, many companies remain unaware of the implications of FFI. They are likely to get a rude awakening. The HSE issued its first invoices in January with the aim of raising £40m through FFI by the end of the year. The new policy is openly acknowledged by many expert commentators as a way to help plug a 35% cut to the HSE’s budget as well as raise revenues for the Treasury. By charging a staggering £124 per hour for inspection following a health and safety breach, the HSE can recoup its costs including those incurred through back room staff and independent invoicing.

Putting safety first? FFI is triggered when an inspector finds a material breach. This is when something is contrary to health and safety

A government body is funded by the taxpayer and should not be double funded by companies doing their best to keep up with the changing regulatory landscape David Keene, MD, RDM Atomotive

regulations but is not serious enough to warrant anything more than a letter to the offending party demanding the breach is put right. Fears are already growing within the sector that FFI will damage the working relationship between the HSE and manufacturers. Kay Moss, health, safety and environment advisor at Muntons, the malt producer, says, “I always felt that I could ring our local inspector and have a chat with him. I don’t feel that I would be as comfortable doing that now purely because if they decide to come on site and we are doing something minor wrong I could end up costing the company money. The policy is instilling a fear factor into manufacturers.” If FFI does make companies reluctant to consult the HSE over health and safety issues for fear of having to pay costs for minor infractions, the policy could make workplaces less safe. FFI is already affecting smaller manufacturing businesses says Duncan Reed, associate at TLT Solicitors, which specialises in dealing with FFI. “The HSE focuses on smaller businesses and goes for smaller fines because they are more likely just to pay up. Without doubt it

makes things more difficult for smaller businesses.” At time of writing, the HSE had only released financial details for the first two months of the scheme which started in October 2012. It issued 1,418 FFI invoices which raised more than £700,000 with 70% of fines being less than £500. But Gordon MacDonald, programme director at the HSE, who helped set up FFI insists the HSE is not out to target smaller firms for easy FFI pickings. “In the broader context is life easy for SMEs? The answer is no, they face challenges on a whole range of fronts but we have been trying to make it easier for them,” he said. The HSE has sought to help smaller manufacturers by developing its website to teach companies how to fill in risk assessments. It has also set up a registration scheme for occupational health and safety consultants to help companies who feel they need extra independent advice which has gone through some kind of quality check. However, at the same time the HSE advice line has been cancelled due to budget constraints According to Mrs Moss this hasn’t done much to appease

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.

“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 andrewc@smallpeicetrust.org.uk.

www.smallpeicetrust.org.uk

Big things happen with The Smallpeice Trust

Health & Safety: FFI

manufacturers: “I’ve heard bad things about the register. If I need a consultant I go by word of mouth or past experience – I would never pick someone I’ve never heard of before.”

FFI playing fair? Smaller manufacturers are feeling the pinch of FFI. But it is becoming an additional embedded cost to large businesses as well. “I think that a lot of larger clients just see it as another tax on business so a lot of the top 250 companies just write it off and decide that once a month they are going to spend £1500 on the HSE inspector,” says Paul Verrico, principal associate at law firm Eversheds. “Companies have to pay regular tranches of cash to the HSE to the point where it has almost become a cash flow issue for them,” continues Verrico. When setting up the scheme the HSE discussed charging smaller manufacturers, who are less able to pay, less than big companies. They rejected the idea as they thought it important that all companies pay the same for the amount of the HSE’s time they take up. But developing issues around consistency in the application of FFI rules is likely to throw up mounting resentment about this FFI introduces a “fear factor” for SMEs contacting HSE for advice

Munton’s malting plant in Stowmarket produces 100,000 tonnes of malt per year

I always felt that I could ring our local inspector and have a chat with him. I don’t feel that I would be as comfortable doing that now Kay Moss, health, safety and environment advisor, Muntons

already controversial decision. The same violation that might only warrant a quiet word from one inspector could result in a large fine from another. “I definitely worry about consistency,” says Mrs Moss. “I would be nervous if the HSE sent someone fresh out of training who didn’t have any industry experience and couldn’t see a bit of grey.” But Mr MacDonald remains firm in his belief that controlling the costs of FFI is the responsibility of individual companies. Pre-emptive action, commitment to consistently high health and safety standards and rapid response to breaches will protect firms from any potential negative impact from the scheme he says. “We are putting the minimisation of costs in the hands of business. The quicker businesses put things right the less they will have to pay as we will have to put less effort into that process. If you comply with the law you don’t have to pay anything.” The policy has given the HSE real teeth to motivate companies to correct material breaches more quickly than they have in the past. But David Keene, MD and founder of Birmingham-based SME RDM Automotive is still dubious about the practical and moral implications of FFI on approaches to health and safety in industry. “A government body is funded by the taxpayer and should not be double funded by companies who are doing their best to keep up with ever changing regulatory landscape,” he sums up. “Rather than jumping to charge a fee, the first steps should be to help rectify the issues in a company if that company has tried to comply.” The HSE will assess the impact and effectiveness of FFI once the policy has been in place for a year.

Have your say at www.themanufacturer.co.uk

Toyota Material Handling UK

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To find out more about the Toyota Material Handling UK call 0870 850 1409 or visit www.toyota-forklifts.co.uk.

R&D Tax Claims

Reclamation at

every turn Birmingham waste management and recovery company reclaims nearly £55,000 in tax spent on research and development.

etts Envirometal, based in Birmingham’s Jewellery Quarter with facilities in Kidderminster, recently reclaimed £54,990 from HMRC under the research and development (R&D) corporation tax reclaim scheme. The business is a division of the Stephen Betts Group which celebrated its 250th anniversary in 2010 having been founded in Birmingham in 1760 by Alexander Betts as Betts and Sons, Sweep Smelters and Refiners in General. Betts Envirometal specialises in recovering precious metals, including silver, gold, palladium and platinum from all types of waste including photographic, ceramic, printed circuit boards and X ray film from laboratories and medical practices. The group has 60 employees, of which 20 work at Betts Envirometal. One of Betts Envirometal’s biggest clients is the NHS Trust for whom it archives, stores and destroys confidential patients’ records and X-ray film at a secure facility in Kidderminster. Following hand-sorting and shredding of the film, the silver content which provides the detail on the X-ray image is removed utilising a chemical process which is eventually recovered via an electro-plating process. The resulting silver waste is then furnace- heated to molten on the premises and cast into 1 kilo ingots for resale to the jewellery trade and associated industries.

L to R: Simon Hundal, General Manager, Betts Envirometal; Mark Evans, Managing Director, R&D Tax Claims; Charles Betts, Managing Director, Stephen Betts Group

Keeping pace with change

Working with R&D Tax Claims was a painless process. We were pleasantly surprised at how uncomplicated the whole reclaim was and shall continue to reclaim on R&D in the future Charles Betts, Managing Director, Betts Envirometal

Changes in photographic and laboratory processes over the years mean that Betts has needed to keep pace with change. “We invest heavily in R&D”, says Simon Hundal, general manager. “Central to our investment in R&D is our ISO compliance. We are fully accredited to ISO 14001 environmental and ISO 9001:2000 and ISO27001 standards.” Managing director Charles Betts is ninth generation in the Betts family and says the firm is delighted with the recent tax reclaim which recognises its commitment to progress. “Digital processes have presented us with new challenges and we are continuously looking for ways to offer our clients a better solution, while at all times keeping a strong commitment to our environmental ethos,” he says. Betts Envirometal made the hefty tax reclaim with the help of R&D tax expert R&D Tax Claims and Charles Betts states that; “Working with R&D Tax Claims was a painless process. We were pleasantly surprised at how uncomplicated the whole reclaim was and shall continue to reclaim on R&D in the future.” Mark Evans is managing director of R&D Tax Claims, which recently celebrated hitting the £10 million mark in HMRC tax reclaims. “Betts is still family-owned, has a 250 year old continuous pedigree and has kept at the leading edge of its field because

progress and innovation demands change”, says Mark. “The necessity to discover, improve and adapt is just as crucial today as it was at the height of the Industrial Revolution, and Betts is a perfect example of a company that continues to put R&D at the heart of its endeavours. This commitment deserves to be rewarded, and a cash injection of almost £55,000 direct from HMRC for reinvestment into the business is very encouraging.” Mark says Betts Envirometal’s claim was straightforward and fast thanks to the company’s strong management and clearly documented records. “It’s such a delight to help a business whose forefathers were one of the founders of a revolution that still defines the industrialised world,” he concludes. R&D Tax Claims does not charge an upfront fee and has never failed to win a tax reclaim yet.

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.

Catapults: supporting UK manufacturing growth Help is at hand for manufacturers seeking to invest in R&D around product and processes to drive growth. Peter Russell, head of manufacturing and industrials at Royal Bank of Scotland investigates how the Technology Strategy Board’s Catapult Centres provide manufacturers with a sound support package to ensure innovative ideas make it from drawing boards to market, while also challenging conventional wisdom on how UK manufacturing is done. A catalyst for innovation With the economic recovery struggling to build momentum, it is more important than ever that UK manufacturing plays its full part in securing growth and remains both innovative and competitive. The Technology Strategy Board’s (TSB) Catapult Centres represent over £1 billion of private and public sector investment, delivering a powerful platform for UK manufacturing to get ahead of global competitors. “Innovation will only happen when we approach it differently”, comments Will Barton, head of manufacturing at the TSB. And the seven Catapults do just that: For the first time they bring together UK businesses with scientists from universities and specialist engineers to collaborate on R&D projects. But they are far more than R&D and consulting hubs. They also provide access to cutting-edge equipment and specialist facilities to develop and test ideas in reality for companies with limited, or no, means of taking the next steps to move from drawing board to market. “The Catapults are about sharing resources. Most companies, for example, wouldn’t consider buying the machines the Catapult Centres can offer, because, as a single organisation, they wouldn’t be able to achieve an adequate ROI in a reasonable time,” explains Barton

Committed to long-term growth The High Value Engineering segment of UK manufacturing contributed £151billion to national balance of payments in 2010 and accounted for 35% of all UK exports*. It is estimated to grow at 2% to 3% per year over the next five years, faster than the projected growth of 1.5% to 2.5% for the UK economy according to RBS Group Economics – strong reason to make sure the sector stays competitive. The objective of the TSB Catapult Centres is to help double the GDP of manufacturing

TSB Catapult Centre locations

5 6

1: Advanced Forming Research Centre (University of Strathclyde) 2: Centre for Process Innovation (Wilton & Sedgefield) 3: Nuclear Advanced Manufacturing Research Centre (University of Manchester and Sheffield) 4: Advanced Manufacturing Research Centre (University of Sheffield) 5: Warwick Manufacturing Group (University of Warwick) 6: Manufacturing Technology Centre (Coventry) 7: National Composites Centre (University of Bristol)

over the next 20 years and there is already clear evidence of converting this ambition into reality if the experiences of the High Value Manufacturing (HVM) Catapult, also located across seven national centres, is anything to go by. “Demand for the HVM catapult has been beyond our expectations. The Catapult attracted over 1000 companies in its first year,” Barton says.

Bristol– researching, developing and networking One of the seven HVM Catapult centres is the National Composites Centre (NCC) located in Bristol. “Being part of the Catapult makes an enormous difference because UK manufacturers can collaborate across capability and technology disciplines, with partners that have state-of-the-art equipment, expert knowledge and who share the same vision,” comments Peter Chivers, chief executive of the NCC. Initiated in November 2009 as a key element in the UK Composites Strategy, the NCC offers companies the platform to either use the centre facilities with state-of-the-art equipment and

TSB Catapult Centres - RBS specialist software or to realise a more complex R&D project around composites. With the global composites market estimated to rise to $48.7 billion by 2020 from $16.1 billion in 2012 (RBS The Future of UK High Value Engineering Report, November 2012), the NCC has seen exceptional growth. “We’ve grown from just 15 to 120 staff, and we have currently 100 staff from customers working here”, says Chivers, adding that the centre facilities usage has already reached over 80%. Sectors supported include aerospace, marine, automotive, motorsport, rail, renewables and consumer/domestic goods. However, with the awarding of £28m for NCC Phase 2 there will be double the original space available come 2nd quarter 2014. “We have a tremendous range of projects,” the CEO points out, starting with customers that use NCC equipment just for a couple hours and, at the other end of the scale, companies working with the NCC delivering multi-million pound R&D projects. “Whether small companies with only two staff or big internationals, we’ve been working with all of them.” The centre hosts the country’s first robotic Automatic Fibre Placement (AFP) machine, which allows manufacturers to consistently and rapidly create complex, double curved structures in composite materials that can be used for high performance wing shapes and automotive parts. Early indications suggest that aircraft structures created through AFP machinery could be some 20% lighter than comparable metal structures. There is also a potential 75% reduction in material wastage according to NCC research. “Staff from member companies could develop a new product with a potential customer sitting next to them or they could get ideas how to solve a problem by learning from an organisation from a completely different sector,” says Chivers.

Coventry – ideas from all directions His peer at the Manufacturing Technology Centre (MTC), another HVM Catapult Centre couldn’t agree more. “We can definitely say that the Catapult has captured the imagination of the manufacturing industry”, Dr Clive Hickman, CEO of the MTC summarises. “Working with the other Catapult partners and working within the centre where companies and supply chain partners from different sectors work alongside each other, is truly inspiring. Ideas are coming from all directions,” he says, adding that the cross-centre-communication is speeding up innovation: “We’re moving much faster now.” The MTC specialises in a range of manufacturing processes, which are applicable across industry sectors such as net shape manufacture, intelligent automation and advanced tooling. The centre supports its members developing innovative processes using the MTC

facilities, proving and validating new procedures and helping with commercialising innovations. The MTC’s turnover has grown from £0.6m in the first year to £17 million last year. It now counts 50 members, 160 staff and up to 100 engineers from customers’ says Hickman. He continues: “the MTC has a lot more activity in the pipeline and we want to get even more SMEs involved. We’ll meet with SMEs, and specialist agencies to identify projects for smaller companies.”

Win, win situation With the support of the TSB Catapults, UK manufacturing is increasing its momentum in innovation activity, thereby helping to underpin competitiveness, customisation and the potential to access new markets. The Catapults themselves offer a unique low-cost, low-risk, high-expertise option for manufacturers to accelerate growth. What’s not to like? 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: peter.russell@rbs.co.uk For information about the TSB Catapult Centres contact: Will Barton Head of Manufacturing, Technology Strategy Board T: (0)17 9344 2700 E: enquiries@tsb.gov.uk

For information about the National Composites Centre, Bristol contact: Peter Chivers CEO of the National Composites Centre T: (0)11 7370 7600 E: info@nccuk.com

For information about the Manufacturing Technology Centre, Coventry contact: Dr Clive Hickman CEO of The Manufacturing Technology Centre T: (0)24 7670 1600 E: businessdevelopment@the-mtc.org

* Source: Office of National Statistics

The big It’s difficult to ignore the hype around Big Data. But does it actually offer any ROI? Malcolm Wheatley investigates three ways it can boost the bottom line.

for Big Data

here’s a buzz about Big Data – that much is undoubted. And it is hard to ignore. Where has it sprung from? A happy combination of advances in low-cost computer processing power, low-cost data storage, powerful analytics techniques, and a ready availability of the raw source material - large volumes of data. Yet for all the impetus gathering behind Big Data, many manufacturers will be tempted to regard it simply as hype. Why? Because for manufacturers – as opposed to mass retailers, financial services companies, utilities and government institutions - it’s difficult to see the ROI.

Demand sensing

espite the rise of Just in Time and buildto-order business models, many manufacturers are still heavily reliant on demand forecasting. And in the world of computerbased demand forecasting, not much has changed since the 1970s and 1980s. Traditional ‘time series’ techniques simply extrapolate the past into the future: trends in past sales, the impact of past seasonality, and the effectiveness of past promotions. They’re all carried forward to produce a calculated estimate of future demand.

But that doesn’t mean to say that there isn’t any. For while mining the world of Big Data isn’t appropriate for every manufacturing business, it would be wrong to assume that Big Data doesn’t have offerings for the manufacturing industry’s mainstream. What might those offerings be? The picture is still evolving. But it’s already clear that three distinct avenues offer opportunities that many manufacturers will find it worthwhile investigating. Better still, they’re genuinely new advances – not ‘me too’ conventional marketing and finance approaches given a Big Data spin to qualify for a place on the bandwagon.

Different methodologies and algorithms attempt to refine the process, but at the heart of any MRP or ERP forecasting module lies familiar well-honed techniques such as exponential smoothing, moving averages, and Box Jenkins models. No longer. A technique known as demand sensing is turning this logic upside down and is credited with improving the statistical forecast error of product demand forecasts by 30%-40%. Importantly, those improvements are attested to by corporate users of the approach, not just by vendors selling it.

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In-memory MRP

orecasting techniques aren’t the only thing left unchanged from the 1970s and 1980s. Scratch a typical manufacturer, and you’ll often find that the frequency of MRP runs is also little changed. Granted, monthly MRP runs are generally a thing of the past. But fortnightly and weekly runs remain very much a feature of the present. Why so? One of the original reasons for such frequencies was that computers used to take all weekend to churn through the calculations. Although this is no longer the case, MRP runs can still take many hours. Other reasons for infrequent runs include the need to suspend order entry and workin-progress updates. Then there’s the sheer practicalities of revising the business’s procurement and production planning schedules on a continual basis. But SAP’s much-heralded HANA in-memory technology finally threatens to upset the

apple cart, by bringing together two aspects of supply chain and manufacturing management previously forced to co-exist separately: supply chain and manufacturing planning, and supply chain and manufacturing execution. “Our vision at SAP is to realize the real time supply chain. But the closer you move to the real time supply chain, the more the distinction between supply chain planning and execution blurs. It’s about planning better, and executing better – at the same time,” says Hans Thalbauer, senior vice president of business solutions for supply chain at SAP. “We have already moved our advanced planning and scheduling and sales and operations planning capabilities onto HANA, and putting demand sensing and inventory optimisation on the same platform, using the same data model, makes perfect sense.” Better still, adds Adrian Simpson, chief innovation officer at SAP UK, a manufacturer can also schedule multiple MRP runs – utilising different demand scenarios, different price points, and different inventory management assumptions. And it can all happen incredibly quickly, so you can say goodbye to lengthy MRP batch runs. “What we’ve recognised is that there are some business processes that are very time-consuming, because of their nature,” he says. “An MRP run can take eight hours, which doesn’t offer much scope for optimisation and analytics. That’s the opportunity that in-memory processing provides.”

Demand sensing allows manufacturers to aggregate volumes of downstream data and apply analytics to make meaningful decisions – demographic by demographic, store by store, and distribution centre by distribution centre Andrew Spence, Supply Chain Business Development Director, Oracle

Unilever, for instance, trialled a demand sensing solution from specialist provider Terra Technology in North America, and then took the decision to roll it out in Europe as well, says Fabrizio Bortolotti, the company’s European planning

director. “More accurate forecasting and better inventory management complements our lean manufacturing strategies, allowing us to capture growth opportunities and optimise service to our customers without the risk of carrying excess

An MRP run can take eight hours, which doesn’t offer much scope for optimisation and analytics. That’s the opportunity that in-memory processing provides Adrian Simpson, Chief Innovation Officer, SAP UK

inventory,” he notes. And demand sensing delivers just that by incorporating a much broader range of demand signals, in as near real-time as possible. Simply put, demand sensing takes the traditional forecast as an input, but adds to the mix real world events such as market shifts, weather fluctuations, changes in consumer buying behaviour, social network sentiment, and real-time point of sales data. All of which adds up to a lot of data – Big Data – which, coupled to advanced analytics software, allows manufacturers to do much more than merely get a better handle on overall sales volumes. “More and more companies want to use downstream data,” says Andrew Spence, supply chain business development director at Oracle. “Demand sensing allows them to aggregate volumes of downstream data, and apply analytics to make meaningful decisions – demographic by demographic, store by store, and distribution centre by distribution centre.”

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Plant-floor improvement

Plant-floor data is a constant stream rather than a series of transactions and arrives too fast for a traditional database to handle. Data volumes of 25,000-35,000 ‘tags’ or data-points in 200 milliseconds are quite common Sue Bailey, Software Consultant, SolutionsPT

Bottom line Taken together, the bottom line-enhancing power of such advances is certain. From demand sensing to targeted preventative maintenance, and from improved operational efficiencies to lower inventories and better scheduling, it’s difficult to argue that the impact will be anything other than positive.

t Wrexham-based PET plastic container manufacturer APPE, a plant-floor data historian application is credited with helping the business increase output by 25%, with fewer people. What’s more, product quality has increased as well, says APPE’s continuous improvement champion Tim Manuel. Sourced from specialist industrial automation provider SolutionsPT, the Wonderware plant historian constantly tracks machine temperatures, pressures, setpoints, statistics on machinery downtime and spoilage, and helps the company monitor KPIs such as manufacturing effectiveness, unplanned downtime and cycle loss. While plant historian applications aren’t new, manufacturers outside specialist process environments have often been slow to recognise the value of the insights that they can provide. The APPE installation is the first, large volume plant data historian implementation to unite a high speed data acquisition and storage system with a traditional database management system, says Sue Bailey, a software consultant at SolutionsPT. “Plant-floor data doesn’t look like the data that you’ll find elsewhere in a manufacturing business, and is in volumes that you don’t find elsewhere, too,” she points out. “Plant-floor data is a constant stream rather than a series of transactions, and arrives too fast for a traditional database to handle. Data volumes of 25,000-35,000 ‘tags’ or data-points in 200 milliseconds are quite common.” Mark Dunleavy, UK managing director of data integration specialists Informatica, which numbers among its clients 67 of the top 99 Fortune 500 manufacturers, says manufacturers are generally slower technology adopters than other industries, but are increasingly aware of the benefits of exploiting plant-floor data. And while improvements in operational efficiency are an obvious target, a growing body of opinion advocates using plant-floor data to predict imminent equipment breakdown, prompting targeted – and timely – preventative maintenance. For in the run up to a breakdown, Most manufacturers, though, will have a more prosaic concern: Can I afford it? But here too it seems there’s welcome news – though you may have to wait. Such capabilities aren’t yet built into ERP systems but according to Gordon Fleming, chief marketing officer at QAD they will be one day.

equipment often gives off warning signs, albeit in the form of signals that are buried in the mass of data that typifies most plant floors. Gauges on machinery such as gearboxes, for instance, can detect changes in vibration levels, oil temperatures, and pressures. Special microphones can detect noises inaudible to the human ear, while sensors installed in machinery can methodically count usage- or cycle-time based wear patterns. The problem is not collecting the data – plant historians and similar applications handle that requirement – but analysing it and spotting the tell-tale signs of imminent breakdown before a breakdown actually occurs. The good news? Such capabilities do indeed exist, with providers such as IBM, SAS and Accenture all offering combined analytics and consulting capabilities. “Manufacturing companies pay out millions of pounds per year in downtime costs because of unplanned maintenance on machinery,” sums up Bob Finney, head of the analytics business unit at high-performance data specialists OCF. “Previously, there was no way of avoiding this, but with the use of predictive analytics based on Big Data platforms, the early identification of maintenance requirements is genuinely possible.” “I see ERP evolving to deal with most common Big Data situations,” he says. “That’s not every Big Data problem that is out there, but those that are most commonly experienced, and which offer the highest ROI. The result: enhanced affordability – and arguably improved easeof-use.”

ITnews... IT EYE Let’s print an aero engine: Tony Christian, MD of technology analyst firm Cambashi, on the growing craze for 3D printing. The hottest topic in computer aided design and computer aided manufacturing at the moment is one which offers the promise of an ultimate, seamless connection between the two worlds - 3D printing. Opinion on the potential for 3D printing varies widely. One side sees problems with scalability, the other is driven by the vision of a day when we will be able to produce a 100% 3D printed engine. The reality, of course, is somewhere in between. There is no doubt that substantial effort is being poured into targeted 3D printing developments for specific markets – including domestic 3D printing capability for the home hobbyist. There are numerous examples of such individuals printing custom parts for models and to support prototypes of new inventions. However, for most people, it is hard to make an economic case - if you need a custom part to be printed, it’s cheaper to email it to a 3D printing bureau, as you would a batch of photographs. There are also many examples of businesses that have been set up to address markets whose characteristics make them ideal for 3D printing. Industry where: customisation is a necessity

Information security rather than a want; product geometry is directly suitable for 3D printing; the cost of the equipment can be amortised over many parts; and the cost of printing each part is outweighed many times by its value. A great example is an osteopath practice developing shoe inserts to adjust a patient’s posture, or a dentist printing crowns and other dental devices. They would both be able to offer personally tailored treatment within a very small time frame using 3D printing. Another example where customisation is not a necessity but highly desirable and where 3D printing could offer early adopters a distinct competitive differentiator is in clothing. Technology for designing and printing your own clothes is gaining momentum,with the prospect of high streets filled with many weird and wonderful styles! But the application of the technology in the broader manufacturing world still has a number of issues to overcome. In addition to the raw economics. Many parts, designed to exploit and optimise machining technologies, will need to be redesigned specifically for 3D printing. Things are moving quickly, though - there has even been talk recently of the advent of printed parts that will assemble themselves - hello 4D printing! @Cambashi

Manufacturers targeted by industrial espionage

Cyber attacks against manufacturers are primarily espionage attacks. Image courtesy of Wesley Fryer

According to the latest Internet Security Threat report from security giant Symantec, IT attacks to steal intellectual property surged by 42% in 2012.

The reports shows that small manufacturers (fewer than 250 employees) are especially vulnerable because they invest less in protection against such security threats. A similar picture comes from Verizon’s 2013 Data Breach Investigations Report, which is based on real-world investigations of over 47,000 security incidents, and is compiled in cooperation with agencies such as the United States Secret Service. In the report, manufacturers are highlighted as the second-most targeted businesses – behind only retail. However, according to Kevin Thompson, a risk and intelligence researcher at Verizon there is positive news in the fact that manufacturers tend to be primarily targeted in espionage attacks, rather than being the victims of multiple motivations for attacks as is the case with retail. This means the attack and the mode of attack are highly focused but potentially easier to identify explains Mr Thompson. “Generally, the technique used is phishing – but unlike mass-phishing campaigns aimed at catching consumers unawares, phishing attacks on manufacturers are highly precise, aimed at

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just half a dozen individuals in a business, and containing credible organisation-specific information,” he says. Indeed, so targeted are these phishing attacks, notes Thompson, that they’ve been given the name ‘spear phishing’. “They often appear to come from an individual’s boss, and ask the recipient to open and read a document,” he continues. “The document, of course, contains malware, which opens a keyhole

through which the attackers gain network access.” The remedy? “Do everything you can to educate and alert employees as to the dangers of well-crafted and plausible ‘phishing’ attacks,” Thompson urges manufacturers. “And from a network perspective, look for non-obvious connections to unusual IP addresses on the Internet – they could be data breaches.”

ITNIBS

ICT in Manufacturing Calling for entries Have you shown ROI from a well designed, planned and implemented IT strategy or project? Find out more at:

www.themanufacturer.com/awards Oracle announced a complete refresh of its SPARC server lines, including midrange and high end products. New SPARC T5 and M5 servers running Oracle Solaris are reckoned to be ten times faster than previous generations, and also two and a half times cheaper than competing offerings. The new SPARC T5 midrange servers are based on the SPARC T5, the world’s fastest microprocessor, and have already set 17 world records. They complete Oracle’s new SPARC family, which spans entry level, midrange and high end servers, and are claimed to be “the world’s best platforms for enterprise computing at any scale, delivering the best value for database and enterprise applications.” John Fowler, executive vice president for systems at Oracle says, “Businesses today need the computing power to exploit Big Data to maximum advantage. They need to use analytics to discover growth and opportunities, and turn social streams into market intelligence. Traditional systems simply don’t have the horsepower to handle those tasks.” PLM specialist PTC released an updated version of its PTC Integrity software which is designed to help automotive manufacturers comply with key industry safety-related systems. The new release has been certified as Fit for Purpose for functional safety development in alignment with the IEC 61508 and ISO 26262 standards, the applicable functional safety standards for passenger vehicles. In addition, the PTC Integrity development organisation has achieved Capability Level 2 under the Automotive SPICE (Software Process Improvement and Capability Determination) framework. “Automotive development organisations are managing complex requirements for embedded software in their products,” says Jake Simpson, divisional general manager for the automotive market at PTC. “Continuing to certify PTC Integrity with automotive safety industry standards such as A SPICE and ISO 26262 helps our customers to ensure safe software development processes.”

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More than half (52%) of manufacturing businesses do not have formal plans for migration from Windows XP, despite the fact that there is less than one year to go until the ubiquitous operating system comes to an end. This was the finding of technology solutions provider Avenade in a recent survey. “In terms of legacy infrastructure, Windows XP hosts a number of business-critical applications at risk today: from those that have operated under the radar of IT, to others seen as too costly to migrate to modern platforms,” says Chris Lowndes, application development director at Avanade UK. Portable military bridge manufacturer WFEL upgraded to the latest version of Seiki Systems’ real time production management solution Jobpack DNC. Seiki Jobpack DNC is designed for users that require higher-level, easily-maintained shop floor communications and delivers manufacturing data directly to the shop floor, facilitating the centralised storage and controlled transfer of NC files. “The migration involved 15 computers, and took less than a week,” reports John Mawdsley, a senior manufacturing engineer at WFEL – formerly known as Fairey. “As well as being very modern, the Seiki system is also very user friendly, and shopfloor operatives find it very simple and intuitive to operate.”

Have your say at www.themanufacturer.com

Market management Got your eye on an emerging market as an export target? Ronan Martin-King talks with manufacturing supply chain veterans about the pitfalls and priorities when establishing distribution and marketing channels in new countries.

eturns in emerging markets can be much higher than those offered in domestically or in Europe. But they also present big risks and if you don’t play a long game, backed up by careful planning, fresh thinking and flexibility, you will fail says Monte Maritz, now a partner with supply chain consultant, Oliver Wight but previously business strategy director with South African packaging manufacturer, Nampak. Explaining why, Mr Maritz says, “People mistakenly think emerging markets are all the same. But making the mission statement ‘we want to be in emerging markets’ is meaningless if you’re not sure which market you’re going to be in and how you’re going to target it. Every country has its own unique challenges in terms of infrastructure and access.” Relationships are vital to creating appropriately nuanced business models and it’s important to realise that it will take some time to develop the market and get a return

Making the mission statement ‘we want to be in emerging markets’ is meaningless if you’re not sure which market you’re going to be in and how you’re going to target it Monte Maritz, Oliver Wight

continues Maritz. This means that market entry can be an unnerving and frustrating experience, especially in economies you know to be growing by as much as 10% a year, where opportunity abounds in theory. “The trouble is that the entry level often doesn’t involve a critical mass of work that would give you a full presence,” says Maritz. “You’ll probably have to start small and grow from there. First, introduce a rep; then open an office and then build an operation. “In Africa the companies getting all the business now are the guys that took the chance five, ten, even twenty years ago. Now those markets are maturing and people are remembering who was there in the difficult days. ” Expressing long term commitment to locals can be done in many ways. But your attitude towards varying exchange rates is one place to start making an impression Maritz suggests. “You need to ask yourself whether you are going to try and win on the exchange rate by chasing it when it is in your favour, or make the assumption

things will even themselves out in the longer-term.” Interest rates in emerging markets can be eight to 15%. So they also have an impact in terms of the cost of working capital points out Maritz. He found that sharing inventory burdens with suppliers can help, but warns that this goes against the grain with some. “We had European suppliers who didn’t understand the complexity of the geographical process and refused to ship anything less than a full container load [a year’s worth of stock]. We had to go to China and India to find suppliers who would find a way to make supply work for us.”

Process power Knowing where to build relationships and when supply may become a challenge relies on establishing a thorough product management process says Maritz. No manufacturer should venture into a new market without developing one specifically for the market in question he insists.

Supplychain Emerging markets

“Every launch into an emerging market is a new product development because the circumstances in which products are made and used for each market are different. Nine times out of ten when you burn your fingers in an emerging market, it is because you have made a single play across your export prospects.” Using his experience in the packaging industry to explain how product management might vary from market to market Maritz recalls, “We would take an existing packaging design into the emerging market, but that same look and feel had a different specification – for transportation or because it was sold from a market stall instead of a supermarket for example. If you assume you can do without a formal process for identifying and accounting for these kinds of issues, you will pay a lot of school fees.”

Becoming local An important stage to take into account in a product management process is the time you think you will progress from simply being an importer of goods in a country to being a local presence which adds value. Defining this early on will make progress easier says Maritz as it’s important to accept that in most emerging markets there’s a desire to see bricks and mortar, not just containers. It also helps existing suppliers and customers see where there may be opportunities to align for combined confidence in a new market. Maritz explains, “The first organisations into big emerging markets are FMCG multinationals and telecoms companies. Canny business will approach these guys and say ‘if you build a brewery, we’ll build a packaging plant next door’ or ‘if you build a supermarket, we’ll build a distribution centre’. The message is that you will follow and align yourself to support their prospects. ”

Nampack’s factory in Durban, South Africa

Do your research It transpired the Chinese didn’t drink draft beer because they like to see the bottle opened in front of them. The brewery was left with far too much inventory for a long time and lost a lot of money on it Stuart Harman, Oliver Wight

This collaborative approach encourages profitable business clustering, but don’t simply assume a major customer has done their market research and that the market is a sure bet warns Stuart Harman, formerly of Australian gas cylinder manufacturer, Luxfer and now an Oliver White partner. Reinforcing the need for companies to undertake independent market research, Mr Harman relates Luxfer’s experience of following a large customer – a brewery – into China. “There was great excitement at the time because the brewery had identified that the Chinese were not big drinkers of draft beer and thought they’d uncovered a huge market opportunity. “Unfortunately it transpired the Chinese didn’t drink draft beer because they like to see the bottle opened in front of them, so they know what they’re drinking. The brewery was left with far too much inventory for a long time and lost a lot of money on it, although they have done very well since.” On Luxfer’s own part, finding eventual success and security in China hinged on the decision to open and office in Shanghai

having previously relied on sales trips from Australia. “The Chinese market is about building relationships and knowing how business is done. It’s very difficult to do that when you fly in and out,” says Harman. Local representation also proved crucial in navigating local laws, taxes, and non-tariff barriers. Maritz insists that entry into an emerging market should not be regarded as a project that needs investment but as a strategic plan that’s about getting a percentage of the market share. “If you’re a good company that knows what it’s doing you can make it pay eventually. But if you focus on ROI over creating strategic presence, you will fail on two counts – you won’t put the rigour into planning and, from your western-centric perspective, you will find it hard to justify the cost of the return against the existing market.” Simply put, Harland says you have to accept that emerging markets are risky while Maritz compares it to venture capitalism. “Not every venture will work. But when they do the returns are high. You only have to successfully get into one Nigeria, Kenya or Egypt, for example, to offset a few flunks,” he concludes.

More than

Drones For many, autonomous and intelligent technologies are immediately associated with that recent and controversial addition to the world of modern warfare, the drone. But this perception must be changed, says Paul Everitt, CEO of trade body ADS, if the technologies are to be properly exploited, bringing massive benefits to industry and society.

etter disaster relief, improved agricultural yields, cheaper maintenance operations, innovative light logistics solutions and advances in complex medical procedures. All of these are already being achieved with the transfer of autonomous and intelligent technologies, commonly used in military unmanned air, ground and maritime systems, to a variety of industrial, civil and third sector applications. Unmanned air systems (UAS) in particular are now an established feature in the defence sector, but their scope beyond it is only just beginning to be realised. It is important that we, as leaders in industry and as individuals, understand the potential commercial and societal benefits the technologies contained within unmanned and intelligent systems can and will deliver.

Technology in action: Disaster recovery In March 2011, Japan experienced its largest ever earthquake, quickly followed by a devastating tsunami. As a result of the disaster, the Fukushima nuclear plant was at high risk of a nuclear meltdown, which would cause further widespread destruction. To help with disaster relief efforts, the US Air Force deployed a UAS to gather information and imagery to help officials prioritise activity. The UAS was also used to gather data from the damaged nuclear plant, safely gathering information from the site and helping those managing it to minimise the impact of the damage.

WWF’s unmanned air systems track endangered species and identify poaching.

Who’s using UAS in the UK? Civil UAS in the UK are limited to a maximum of 20kg and permission for use in British airspace must be applied for via the Civil Aviation Authority (CAA). The most common uses for UAS in the UK are the inspection of power lines and energy facilities and aerial photography. These operations help with maintenance, safety and planning. Almost 200 commercial entities have been granted permission to use UAS in British airspace by the CAA. Around 40 permits for UAS under 20kg were issued in 2011 alone. Companies piloting these systems range from the very large – BAE Systems and National Grid – to micro photography businesses and county fire and rescue services. The usefulness of UAS for commercial applications is currently limited in the UK, however, by the CAA requirement that the aircraft be kept within sight of the pilot. This blocks the use of drones for the transport of light packages, as has already been achieved by pharmaceutical firms working in the developing world to deliver medical supplies to remote regions.

Manufacturing Technologies: Autonomous systems

ADS expects autonomous and intelligent systems to play an increasing role in the day to day life of the 21st century citizen as the technologies make many industrial and consumer systems and activities safer, more reliable, precise, efficient and cost-effective. British industry is in a strong position to supply this new and emerging global market and to benefit from commercial applications. This can only have a positive economic impact as wealth and knowledge creation advance.

Market barriers So what’s holding us back? Interestingly, it is not the rate of technological development that is dictating our progress. There are already cutting edge projects in place to explore applications in areas such as healthcare. Imperial College in London is pushing forward with the integration of robotics into medicine and patient care and Professor Guang-Zhong Yang, who is leading this work, will speak later this year about the rate of development in medicine at the Global Intelligent Systems conference in London. The real barriers to adoption are factors such as public perception. Proper discussion and regulation that is agreed and understood are critical to ensure that this technology continues to deliver ever richer societal benefits, and that the UK retains its position at the forefront of technological evolution in this field. In doing so, we could reap the rewards of applications in other sectors and markets – worth an estimated £265 billion to the UK economy.

£265bn The estimated value of the civil market for the autonomous and intelligent systems

For many, a lack of trust of autonomous and intelligent systems is born out of a lack of understanding and awareness of its uses. An honest and transparent approach to their application and use is critical in improving perceptions and galvanising support for market growth. In building greater awareness and truly understanding the degree of societal benefit available from autonomous and intelligent technologies, we need to move perception away from the ‘drone’ debate which, for many, harbours negative connotations. In reality, drones should account for only a very small market compared to the scale of opportunity across other sectors for the use of the autonomous and intelligent technologies. ADS intends to help foster a greater and more accurate understanding of this.

Technology in action: Surveillance and monitoring Google partnered with the World Wildlife Fund (WWF) to provide $5 million to fund unmanned systems to help protect endangered species such as rhinos, tigers and elephants. Small autonomous aircraft purchased with the grant will allow the WWF to identify poachers and track animals via smart radio tags. With research showing a significant increase in the number of animals that fall victim to attacks from poachers, this technology will make a significant contribution in safeguarding the future of endangered species.

Technology maturity Where is the technology today? We know that we have capability but there is the potential to do so much more. In some places, autonomous

Nearly 200 companies in the UK have been granted permission to use small UAS in British airspace

technology is already integrated into society. For example, London’s Docklands Light Railway (DLR) is an automated system with no driver. Pilotless passenger aircraft are already within touching distance: the ASTRAEA programme is an industrial consortium with the Civil Aviation Authority. It is leading pioneering research into the use of UAS in civil airspace. The coordinated development and demonstration of key technologies and operating procedures will address both the technological and logistical challenges around transferring UAS technology to the civil sector. What is interesting is that while we all accept the automated DLR, there is still a significant societal shift that needs to occur for autonomous passenger aircraft to become acceptable, and the ethical, regulatory, legal and skills debate needs to mature too. What is beyond doubt is that autonomous and intelligent systems are set to make a significant impact on our daily lives, in both work and leisure time. We are on the cusp of great technological change and it is important to pay early attention to its development if we are not to miss critical commercial and social opportunities. Global Intelligent Systems will take place 16-17 July 2013 in central London, bringing together industry, academia and Government. For further information, please visit: www.gisfarnborough.com

Return of the

MACH Exhibitors sign up in a hurry to be a part of MACH 2014.

here’s still almost a year to go until the 2014 iteration of the UK’s popular machine tools and manufacturing technologies exhibition, MACH. But although the marketing campaign for the show is only just underway, sales of exhibition space are up 25% compared to the same point before MACH 2012. Graham Dewhurst, director general, of the Manufacturing Technologies Association (MTA), which the organises MACH, says the clamour for room on the exhibition floor is testament to a resilient UK advanced engineering sector which is committed to investing in the best technologies for future competitiveness. With MACH now over 100 years old, there can be little doubt of its enduring popularity with manufacturers as a place to identify what those investments should be. Over the years however, MACH has become far more than a mechanical meat market. Today, the ability to understand OEM supply specifications and nurture relationships with key customers is a critical element in the show’s value proposition. At MACH 2014, OEM stand space will be split into five sector categories of: aerospace, automotive, oil & gas, nuclear & power generation and yellow goods. An early OEM sign up for the 2014 is Airbus who will take pride of place in the large UK Manufacturing Zone at the Birmingham NEC-based

Team GB competitor in the CNC Turning category at WorldSkills London 2011

Crowds at MACH 2012

exhibition. Its decision to exhibit at MACH 2014 “recognises the importance of developing strong relationships with world class suppliers,” says Colin Sirett, head of research & technology, business development and partnerships Airbus UK.

Protecting world class

Described by its organisers as “the Olympics of vocational talent”, WorldSkills gives high profile and recognition to manufacturing and engineering prodigies

But how long will world class suppliers survive in the UK if a world class talent base is not guaranteed? In 2010, MACH was among the first tranche of big trade shows to recognise the rising skills concerns of its exhibitors and delegates by launching an Education & Training Zone. In 2014, the skills focused zone will be back and bolder than ever. Exhibits and stands in the area are designed to highlight career opportunities and skills requirements to young people and encourage better employer understanding of the UK landscape for both academic and vocational skills development. For the first time in 2014 however, MTA will augment this already valuable proposition by hosting regional heats for the WorldSkills competition. Described by its organisers as “the Olympics of vocational talent”, WorldSkills gives high profile recognition to manufacturing and engineering prodigies. The medals are fiercely contested, and winners of the heats at MACH will go forward to compete with peers from 66 other countries in the global finals in São Paulo, Brazil in 2015. Competitors for WorldSkills at MACH 2014 will battle it out over three days for a chance to represent excellence in CNC Milling and Turning among other disciplines. MTA is ambitious for MACH 2014 to beat previous records for attendance and the value of deals made at the event. Early sales figures suggest a proactive crowd of exhibitors is keen to throw its weight behind this aim with some already specifying that they will require larger areas than in previous years. Industry technology providers Mills CNC, YMT and WNT are all MACH regulars who have booked increased stand space for 2014. will report regular updates from MTA on the MACH 2014 build up throughout the year.

Manufacturing Technologies: Boeing

Troubled

dreams L

eaders at aircraft manufacturer Boeing heaved sigh of relief in April as the US Federal Aviation Administration (FAA) approved design modifications and new safety measures for the lithium-ion batteries used on its mammoth 787 Dreamliners to power brakes and lights when the plane is on the ground. Ten teams of 30 engineers began the refit process for the 50 Dreamliners in operation around the world as soon as approval was given on April 19. The first fixes were carried out for Japanese carrier Nippon Airways with carriers in America, Ethiopia and India next on the list. It is not clear yet how production rates for the newly designed battery will impact delivery dates for customers awaiting delivery of 787 orders – British Airways, for example, was expecting delivery of the first of 24 Dreamliners this month but now has no set date. Boeing’s lithium-ion batteries are manufactured in Japan by GS Yuasa. The new design includes increased thermal and electrical insulation and an enclosure to prevent overheating batteries from affecting other parts of the aircraft. New batteries will also be enclosed in stainless steel boxes with an added ventilation pipe going directly to the outside of the plane. This will take five days per plane to install. The extra steel housing and other additions detailed above add around 150 lbs to the plane, cancelling out the weight savings which were originally a key motivator for the use of lithium-ion over nickel-cadmium batteries which are traditional in aerospace applications.

As Boeing begins modifying the defective battery design used on its 787 Dreamliner planes, it admits it may never know what caused the malfunctions which grounded the fleet in January. Jame Pozzi reports. Japanese carrier planes – one in Boston, USA and the other at Takamatsu Airport on Shikoku Island, Japan. Yet even with the focus of this combined expertise, and the approval of a new battery design, the suitability of lithium-ion batteries in aerospace applications remains in doubt for some. Rival manufacturer Airbus has reverted to the use of traditional nickel-cadmium batteries for the upcoming A350, a direct competitor to the 787. Meanwhile, the National Transportation Safety Board (NTSB) and Japan National Safety Board (JTSB) are still conducting an investigation into the root cause of the battery fires on Boeing’s planes. Larry Loftis, vice president and general manager of the 787 programme told press at a technology briefing in London on April 22 that “it is possible we will never know the specific root cause,” for the battery fires, but defended the suitability of lithiumion batteries on the 787, and potentially other aircraft such as the projected 787-9, going forward. “We see this as the permanent fix and we have found no compelling reason for us to move away from the lithium-ion battery,” he said. Boeing says it will continue ramping up production of the 787 which received strong orders on release. The current production rate is five planes per week and there are plans to increase this to seven and then 10 planes per week by the end of the year.

Boeing’s battery solutions

Elusive explanations The redesign process for the Dreamliner’s lithium-ion batteries involved an intense three month investigation. Over 200,000 engineering man hours were worked around the clock by a team of international experts in order to ensure the batteries would no longer overheat and combust as they did in January on board two

Rise of the machines Slowly but surely, the automation of manufacturing processes in the UK is growing. One-time conveyor systems manufacturer turned automation champion, CKF Systems, is part of that story. Will Stirling reports.

ryan Wheeler and the directors of Gloucesterbased CKF Systems are on a mission to educate manufacturers about the merits of automated production. CKF Systems will turn 25-years old in July, originally designing and marketing a range of conveyor systems, then moving into bespoke handling systems before evolving into a competitive provider of integrated robotic solutions. “The firm’s move into automation was gradual,” explains Wheeler. “We recognised the many applications for robots in manufacturing, yet decided in the early stages to take a pragmatic approach. “Automation was expensive and there was reluctance in the UK to embrace this technology, especially in food and confectionery.” “It was only about five years ago that we saw a real change and greater recognition of the benefits of robots in production environments. We responded by investing in new people, skills and equipment.” To date, CKF Systems has designed and installed about 40 robotic systems, working with companies of all sizes, from start-ups to some of the world’s leading global brands. “There is pressure on all businesses to increase output, reduce costs and improve production flexibility to meet current demand and develop new opportunities,” continues Wheeler. “Once a customer experiences firsthand the benefits of automation there is no turning back.”

Long way to go But the mission for the £6m turnover business has just begun. Last year, the British Automation and Robot Association (BARA) showed that UK robot sales were far behind a string of countries including Taiwan, China, Germany, the US and Japan. Even Spain and Italy were in front. But Wheeler sees a change, with more UK companies ready to embrace new technologies.

Robotics CKF Systems

“It’s not a massive change but people are starting to realise that if we are to compete with Asia, Eastern Europe and the Middle East we cannot just throw labour at it, it is far too expensive. The only way we can ever compete with these countries is to invest in automation and particularly robotics.” CKF is working alongside BARA to promote the merits of automation. “In the past there have been too many mixed messages,” says Wheeler. “People see a robot as highly sophisticated, needing a phenomenal amount of time to get implemented. It isn’t the case. The systems we install invariably require less maintenance and are designed for ease of use and access.” “Often a company is surprised that it doesn’t take much to develop the level of engineering skills within their business to implement this technology.” “Similarly, we need to communicate more effectively the positive impacts for the workplace. Robotic systems can work in relatively confined and underutilised spaces, handling high speed repetitive tasks more efficiently over sustained periods than manual labour. A company can then make better use of resources, redeploying staff more productively whilst reducing health and safety concerns.” Much of CKF’s business involves bespoke solutions, although the company will often advise its customers on optimising its existing kit. “We rarely have the luxury of working from a blank canvas,” says Wheeler. “The work we recently undertook for dairy company Müller is a good example. Müller recognised that its manufacturing capability could be significantly improved through the upgrading and re-engineering of

We need to communicate more effectively the positive impacts [of automation and robotics] for the workplace Bryan Wheeler, Managing Director, CKF

an existing re-pack line. CKF designed, installed and commissioned a fully automated solution utilising much of the current equipment and within the same floor space.” “The new repacking line is now at least 50% more efficient, is much more versatile and able to handle double the numbers that were being achieved manually.”

Recruitment and R&D CKF functions in rapidly evolving sector with skills requirements which match the rate of technological advance. As such, the company is continually looking to recruit the best available talent to its business. It recognises the need for staff training and development, utilising tailored programmes and courses for individuals as opposed to more formal structures. “This approach ensures that personnel keep pace with current legislation and retain an awareness of new developments,” advises Wheeler. The company has doubled in size over the past four years recruiting numerous graduates and engineers across all

The CKF designed low cost robotic packing system

esigned around a standard robot cell with integrated product and case handling interfaces, the low cost robotic packing system is specifically aimed at those SME’s where there has been a reluctance to embrace such technologies. The system doesn’t require highly skilled operators, it is easily maintained and utilises a relatively small area of any shop floor. It handles medium to high speed repetitive tasks more efficiently over sustained periods than manual labour, with greater consistency and reduced wastage. A company can then make better use of resources, redeploying staff more productively whilst also reducing the likelihood of RSI and other health and safety concerns. Chris Buxton, CEO of the British Automation & Robot Association says: “To remain competitive on the global stage it is essential that companies adopt the latest technology available but they often find that the capital cost of establishing an automated facility can be prohibitive. It is to the credit of CKF that they have risen to the challenge to help UK Manufacturers take that all important step into the world of robotics.” the engineering disciplines; electrical, mechanical, software and automation. “Our policy of investing in the best people has served us well over many years,” Wheeler says. “It’s just becoming more difficult to recruit from an ever reducing pool of skilled engineers. We find ourselves casting the net wider, year on year.” Bryan Wheeler is optimistic about the rise of the machine in manufacturing. “Across UK manufacturing there is now less reluctance to link long term sustainability with robotic investment and a growing appreciation that automation does generate efficiencies.”

EventReview GMF

A model for Heseltine’s masterplan The ambitiously named Global Manufacturing Festival in Sheffield in April networked small companies with global OEMs and showcased the Catapult model. But more work is needed to achieve its aims of linking South Yorkshire businesses to the world.

ound three of the Global Manufacturing Festival (GMF) in Sheffield was a step up from the first two years. Over 700 visitors walked through the doors and 70 companies took exhibition stands, filling two large marquees – which nearly blew away on in a ferocious overnight storm before the exhibition – at the Advanced Manufacturing Research Centre with Boeing near Rotherham. Boeing was one of four global OEMs present to talk to visiting companies about supply chain opportunities, which is precisely what the Festival was established to do.

Content The conference presentations were high quality and, in some cases, refreshingly open. Andy Page from Rolls-Royce and Simon Booth from Firth Rixson gave frank, detailed talks on how their companies work together and select suppliers. Andy Page highlighted the gaps in Rolls-Royce’s procurement patterns, where often British suppliers (which form about one third of its global suppliers, to the value of £1 billion) often score better quality ratings than suppliers in Europe, but regularly exhibit poorer delivery than suppliers in Germany. He was really clear on Rolls-Royce’s procurement criteria – the kind of visibility this event seeks to provide. In the Renewable energy stream, Siemens and large scale fabricator MTL gave the audience a welcome reminder of the size of the offshore wind turbine prize. Never mind construction of the vast wind turbine factory in Hull, that Juergen Maier said Siemens is “still completely committed to”, the opportunities for downstream suppliers are also massive. MTL’s Dave Oswin repeated figures from DECC which say the UK could have 18GW offshore wind deployed by 2020. For MTL Group alone this

Networking at GMF 2013: attended by more than 700 delegates

means fabricating for up to 8,000 turbines and 12,000 boat landing systems. In both the renewable and nuclear streams, however, the spectre of prevarication hovered. Inertia in both new nuclear build and offshore wind turbine ramp up shows no sign of changing until government can negotiate the elusive but crucial strike purchase price. The AMRC Training Centre’s Alison Bettac told a large audience about her centre’s apprentice programmes, as well as the new Commercial Engineering Apprenticeship developed with the Manufacturing Technologies.

Impact The Festival, or GMF, also connected more SMEs from across the UK with other local SMEs and global companies than the previous events had done. To go global and establish itself as an international event, however, the Festival needs to do attract more foreign companies to Yorkshire. Why would they come? To learn and buy, but probably mostly to sell. Here the GMF has a conundrum because attracting foreign companies to find out more about the AMRC Catapult Centre, and to learn more about the procurement criteria of big primes, could rob local and UK companies of opportunities.

Putting the questionable ‘globalness’ of GMF aside however, the event, and others like it, serve an important purpose. Lord Heseltine’s report, No stone unturned, advocates regional growth and decentralisation of power. It was widely publicised and well received. The GMF absolutely showcases how regions with a strong manufacturing base, like South Yorkshire, are economically independent of London and the South East, with a string of high export companies operating locally – AESSEAL, Tata Speciality Steels, Firth Rixson, JRI Orthopaedics, Sheffield Forgemasters, ITM Power and more. Perhaps rather than stating an ambition to be global in companies the GMF pulls in from abroad to affect business connections. The event should act as an exemplar for the Heseltine’s strategy of devolution. The rise of other national and regional show franchises – like Made in the Midlands – shows a zeitgeist of interest and pride in manufacture in the UK. GMF can capitalise on this and become a model for others to follow. A network of regional manufacturing festivals may have a greater cumulative effect on manufacturing GDP than a single event with global markets in its sights.

lastword The

Maintain Vanguard This month’s Last Word is delivered by guest writer Hugh Scullion, general secretary of the Confederation of Shipbuilding and Engineering Unions. He states the case for renewal of the UK’s Vanguard fleet of submarines as government prepares to publish its Trident Alternatives Review this summer.

ebate on possible alternatives to the Trident nuclear deterrent will be heated over the coming year as political parties flesh out their stance in the run up to a General Election. Questions regarding capability, legal and diplomatic issues, not to mention moral, ethical and strategic concerns will rightly be explored. It is my belief, however, that economic factors are too often overlooked in defence policy decisions. It is essential that those seeking alternatives to Trident explain how their proposals make a solid economic case for jobs, skills and investment in this country. Tied up with the Trident debate is the decision as to whether there will be a renewal of the Vanguard fleet of nuclear submarines which carry the missiles. The cost for a successor class of submarines has been estimated at between £20 billion and £25 billion, and the annual running costs will amount to around £1.5 billion. This is five per cent of the Ministry of Defence’s budget, around 0.135% of Britain’s gross domestic product. But to focus on these numbers in isolation overlooks the wider

A negative decision on Vanguard would cost 2,000 jobs in Barrow alone

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economic benefits that a renewal of the Vanguard class of submarines would bring. The money would not be wasted as opponents suggest, but instead would be invested in both large businesses and small and medium-sized enterprises (SMEs) throughout the country. Barrow-in-Furness, home to BAE Systems’ submarine programme, would be the biggest beneficiary of renewal. But benefits would spread throughout the UK: from nuclear reactors in the East Midlands, to the maintenance base in the south-west of England, to warhead production in the south east, to shore infrastructure in Scotland. We are talking about thousands of parts, creating thousands of jobs. Further, the conception, design and construction of nuclear-powered submarines necessitate state-of-the-art technology which civil sectors too can harness and which require us to nurture a highlyskilled domestic labour force. BAE Systems, a model employer by any standards, encourages the training and development of young men and women through its apprenticeship programme, arming its graduates with firstclass skills and qualifications. If

the next government decides not to proceed with renewal of the Vanguard class in 2016, all of this could be lost forever – such skills availblility cannot be turned on and off like a tap. The Nuclear Education Trust believes that a negative decision on Vanguard would cost 2,000 jobs in Barrow alone. These jobs must be retained if we want to keep these design and manufacturing capabilities, with the multitude of benefits they bring for our defence and civil industries alike. The Liberal Democrat previously in charge of the coalition’s Alternatives Review showed disdain towards these issues when he joked that renewal could be cancelled and the people of Barrow relocated to the Bahamas as a solution. Unless robust answers to serious questions can be supplied, however, leading advocates of Trident and Vanguard alternatives are at risk of unduly elevating their personal opinion above evidence and the security of livelihoods. It would be ridiculous to portray renewal of the Vanguard fleet as the panacea on which we can pin all our economic hopes. Nevertheless, important jobs and skills depend on this decision, and must therefore form an important part of the debate. Advocates of the alternatives must show how their ideas will improve prospects for jobs, skills and investment for the thousands of companies in the supply chain throughout the country. It would be a disservice to UK plc if they do not. A more extensive article by Hugh Scullion putting the case for renewal of the Vanguard fleet was published in the Tribune paper in April.

50 United Kingdom

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The Manufacturer - May 2013