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MADE IN BRITAIN

June 2014 | business-reporter.co.uk

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Business Reporter · June 2014

an independent report from lyonsdown, distributed with the sunday telegraph

Made in Britain

Opening shots René Carayol

RECENT tour of McLaren’s state-of-the-art supercar factor y in Woking was instructive. There were no greasy overalls or grimy machines anywhere – this was much more about cutting-edge technology, computeraided design and precision engineering. This was an insight into what may well become, for the UK, the “third” industrial revolution. We are witnessing the convergence of an unprecedented number of disruptive technologies; web-based services, intelligent software, innovative materials, self-learning robots and, perhaps most striking of all, 3D printing. Henry Ford and his ground-breaking Model T kick-started the second industrial revolution, producing thousands of identical products: “You can have any colour you like, as long as it is black.” The third industrial revolution really is any colour you like. The new production lines are much less about low-cost standardisation and consistency, but more about “one size fits no one”. Britain’s factories are growing at their fastest pace for five months, according to the Markit manufacturing purchasing managers’ index. The economy has grown at a healthy 0.8 per cent in the first quarter of this year,

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The UK must produce skilled engineering graduates for the third industrial revolution manufacturing output has risen by 1.3 per cent in the same period. With UK manufacturing on the rise, we will need around one million more workers by 2020 to replace those retiring or leaving. This is exposing a significant skills shortage. While there have been positive initiatives to sponsor students and refresh the approach to apprenticeships, as requirements change, quality graduates are necessary, and many are having to recruit from elsewhere in the EU. The EEF manufacturers’ organisation says that two thirds of companies are planning to recruit engineering graduates over the next three years. Until recently, it was thought we had lost the last remnants of our once-strong car industry in the UK. We are experiencing a renaissance of quality car production, from Tata’s jaw-dropping turnaround of Land Rover to BMW’s transformation of both

Bentley and Mini. We are re-establishing our reputation for manufacturing excellence. Screwing and welding in a very labourintensive fashion was at the heart of traditional manufacturing. Products are now being designed by computer and “printed” on a 3D printer. Designs are rapidly changed with a click of the mouse; the 3D printer can run completely unattended, delivering products that are far too complex and intricate for a traditional factory to even contemplate. Factories have been placed in low-wage countries to exploit labour costs but, as automation and wages rise everywhere, manufacturing is moving back to the developed world. The Boston Consulting Group has determined that between 10-30 per cent of the goods that America imports from China could be made at home by 2020. This would lift US output by $20-55bn a year. Financial services account for nearly a third of Britain’s exports but, with the blurring of lines between manufacturing and services, this could change rapidly. As many vehicles, planes and trains are now more dependent on their internal computers, they can be sold competitively due to associated specialist maintenance contracts. These are far more about online calibration services than expensive physical effort. Chairman Ron Dennis presciently described McLaren as being in the technology business, not manufacturing. The challenge will be to produce more quality UK engineering graduates to meet the demands of this third industrial revolution.

Business Reporter · June 2014

an independent report from lyonsdown, distributed with the sunday telegraph

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Made in Britain

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Foreign investment cautiously welcomed by UK firms THE MAJORITY of UK manufacturers think their industry is getting a boost from overseas investment, according to a recent study. Research published by the Institution of Mechanical Engineers (IMechE) finds that 69 per cent of manufacturers think investment from abroad is helping, with 13 per cent believing it has a negative effect. But foreign investment may continue to be controversial. At the same time the figures were published, debates were ongoing about Pfizer’s attempts to

acquire AstraZeneca, and whether this could strip the UK of valuable assets in the long term. Pfizer came under criticism from politicians, who expressed fears that it could take research facilities and other assets out of the UK – despite pledges by its CEO Ian Read to keep some of these in the UK. Dr Colin Brown, a director of engineering at IMechE, said that the overall mood was in favour of investment, but also that opinion could vary with each case. He said: “While individual takeovers need to be appraised on their own

The UK motor industry is now one of Europe’s biggest

merits, these results show that UK manufacturers are keen to see more overseas investment in UK manufacturing. “UK manufacturing and engineering lies at the heart of a healthy economy, and as long as these investments are being made to create UK jobs and exploit UK skills we should welcome them as investments in the UK’s future.” The study, Engineered in Britain, was based on one survey with 1,000 senior professional manufacturers and another survey of 1,000 members of the public.

British car industry leads the way in building economic confidence By Dave Baxter AFTER several difficult years for UK manufacturers, the situation is starting to appear much brighter, with Britain’s carmakers among those leading the charge. Purchasing Manager’s Index figures for the manufacturing sector, compiled by Markit and based on factors including output and new orders, shot to a fivemonth high for April. But the UK’s automotive industry has been a bright light in the manufacturing world for some time. From Jaguar to RollsRoyce, some of the world’s most iconic cars are rolling off British production lines. But the sector is also proving to be a commercial success, as well as something of a powerhouse. Figures released by the Society of Motor Manufacturers and Traders (SMMT) earlier this year showed that UK car production had jumped by 3.1 per cent to more than 1.5 million units in 2013, reaching their highest point since 2007. Britain is now one of Europe’s biggest producers of vehicles – a

far cry from 2009, when output levels were disconcertingly low. But industry figures warn that Britain faces a number of challenges, from a potential skills gap to a possible rupture with the European Union. Mike Hawes, CEO at the SMMT, says: “I’m very optimistic – we are back to pre-crash levels. In the last three or four years there has been a tremendous level of investment and job creation, and that’s leading to increases in volumes. But some believe that companies face a potential skills crunch when a generation of senior staff hits retirement age. A survey released by First Class Technical Recruitment found 78 per cent of companies in the automotive industry fear having trouble f inding suitable candidates for jobs. James Gill, the company’s director, believes the situation could get worse over the next decade, as people in senior roles retire. “A lot of guys will be retiring over the next seven years. The problem is the logical replacement for those people will

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be in their 30s or 40s,” he says. “We have seen that, with a succession, it’s a great thing but relies on retention of young staff, keeping people and having a long-term vision,” he says. Hawes claims that Britain has avoided “the doldrums” currently seen in the rest of Europe. But he believes Britain could do some things better. “Only about a third of components come from the UK,” he says. “There are more components we could make. There’s no manufacturer of alloy

wheels in the UK, for example. We should be making them.” Hawes is also wary of the debate over Britain’s future as a member of the EU, and is one of a number of industry figures arguing for the UK to stay in the union. “The EU is good for business,” he says. “We have to make sure we remain competitive. Otherwise, global companies won’t go into their wallets. We have had a lot of investment because they recognise the strengths that the UK has.”

Business Reporter · June 2014

Made in Britain

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The next industrial revolution International companies are looking to Britain as one of the most prosperous and fertile potential investing grounds INDUSTRY VIEW

anufacturing is changing faster than ever before. The drivers for this include globalisation, personalisation, time-to-market and sustainability. Domestic manufacturing interest or localisation has become apparent worldwide, as nation states seek to maintain or grow their manufacturing footprint. Energy and resource efficiency increasingly impact competitiveness, even in developing economies which are adopting automation technology at rates that look set to further their traditional cost advantage. Complexity is on the increase too, with the amount of data generated through design, production and the supply chain growing exponentially. To respond to these challenges and address the need for shorter innovation cycles and greater manufacturing flexibility, industrial technology and the skills to implement it are becoming ever-more important. The UK has historically underinvested in technology such as automation, but it is increasingly evident that technology must play a central role if we are to realise our aspiration to rebalance the economy in favour of high-value, customised manufacturing and production. Various governments, including Germany and the US, have recognised the need to bolster automation research activity with programmes to support future technology development and deployment. Germany is presently leading the way in manufacturing, demonstrating that high productivity can be achieved in a high-wage economy through consistent investment in technology and skills. In Germany, there has been more specific focus on smart factories and future technologies in them. Some commentators refer to this as “Industry 4.0”, suggesting a fourth industrial revolution driven by embedded or cyber physical systems that would interact with each other intelligently and lead to a potential 30 per cent increase in productivity in manufacturing, mobility and healthcare. The research is long-term and focused on digital integration across the enterprise. In time, it could also mean the merging of digital product design and factory planning processes. The UK Government has

embarked on a headline industrial strategy underpinned by specific initiatives such as enhanced capital allowances for automation and ongoing support for industry-led training schemes. There has also been very significant investment in a network of ”catapult” innovation centres for high-value manufacturing, which are helping accelerate the uptake of automation and disruptive technologies for UK manufacturers. To boost UK manufacturing and employment and as a means of achieving a greater import/ export balance, further international investment in Britain is vital. With increased foreign investment comes an improved capacity to both produce previously imported goods at home, and export these goods to the rest of the world. Greater international investment will only materialise if the right infrastructure is in place. To ensure that Britain remains an attractive investment target, domestic advancements in research and development, progressive green technology, high-speed transportation and other new technologies such as additive manufacturing and automation technologies must be championed. Britain is already leading the way in many of these new industries. And that makes the UK a better place to invest for Siemens, which has recently commited to expanding its manufacturing base in the UK from its current 13 factories with a further £310 million invested in partnership with Associated British Ports in offshore wind power production in Hull. But there is still massive scope for Britain to truly establish its status as a world-beater in these exciting new spheres. These are the technologies of tomorrow that, if Britain can continue to make headway in them,

will ensure investment continues to come to our shores. Technologies such as renewable energy and digital design, which will ensure the UK as a nation maintains its competitive advantage. More jobs will be created, greater regional growth achieved and the country’s trade deficit positively reduced. It will take a combination of both private and public sector efforts to showcase Britain to the world as an attractive investment offering, while maintaining greater development of new technologies. The Chancellor’s policy of extra research and development tax credits for SMEs, and his analysis that research and development is “absolutely central to Britain’s future”, are certainly a positive start. As the global economy stabilises following half a decade of turmoil, international companies are looking to Britain as one of the most prosperous and fertile potential investing grounds. Foreign direct investment holds the key to providing jobs, boosting the economies of recession-hit areas and expanding big business across all of Britain’s regions, while helping reduce the trade deficit. To secure this investment, Britain must ensure it provides the most attractive investment environment possible through continual development of new technologies, and maintain a stable framework for longer-term business decision-making and confidence. If it can do so, the possibilities are vast. Juergen Maier (far left) is managing director of Siemens Industry UK & Ireland and an ambassador for the International Festival for Business (www.ifb2014.com) www.siemens.co.uk

Business Reporter · June 2014

an independent report from lyonsdown, distributed with the sunday telegraph

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EING a Dragon gives me the opportunity to meet creative entrepreneurs from all over the country, and while not every contestant on the show has a viable idea, it’s their innovative traits that I think characterises British business and sets it apart from the rest of the world. Throughout my career I have been fortunate enough to export my design services internationally, and it’s wonderful to see the Made in Britain moniker getting the attention it rightly deserves on the global stage. It was heartening to see that, for the first three months of this year, UK manufacturing grew at its strongest pace since 2010. It certainly feels that the UK economy is starting to blossom and I think that the reputation and creativity of British firms is really helping to drive this recovery. British brands are valued worldwide and, over recent years, we’ve seen the success of firms like Burberry, Johnnie Walker and Aston Martin in emerging markets like China, Russia and India. I take great pride in seeing the achievements of smaller UK brands and watching how they fly the Made in Britain flag. Last year, through my role as a Prince’s Trust Ambassador, I was lucky enough to attend the opening of The Prince’s Trust Tomorrow’s Store, which is sponsored by The Royal Bank of Scotland Group (RBS). The shop is stocked by young entrepreneurs who have set up in business with support from the Trust’s Enterprise programme. Based in Eldon Street in London, it’s a great example of the young entrepreneurial talent that is helping to revitalise the UK economy and get unemployed young people back to work. Take Marc Gaylor, 26, from Essex, who recently stocked his product in the shop. He had always had a passion for mechanics and wanted to start his own business. After stumbling across an image online of a table made from an old engine, he had the idea to create a range of furniture and accessories, but had no idea how to get started. Thanks to support from the Prince’s Trust Enterprise programme he received funding to buy stock and produced a range of different furniture variations made from engines. Marc now welds, spray-paints and powder coats each of his pieces of furniture for the office or home. His business – Fuel Finesse – is growing steadily through word of mouth and recommendations and his eBay store. He is exporting worldwide and has recently sold stock to customers in Australia, Singapore and Italy.

nother one of my favourite companies championing Brand Britain is Brompton and its famous folding bicycle. Britain has an incredible engineering heritage and Brompton, for me, highlights the ingenuity and passion that drives British business. Brompton Bicycles are the kind of product you’d absolutely dream of getting on Dragons’ Den. Andrew Ritchie came up with his folding bike in the 1970s but his company’s rapid growth over the past decade is in part down to engineer Will ButlerAdams, whose big-firm experience and vision helped drastically expand the firm’s production. It went from making 6,000 bikes a year with a workforce of 24 in 2002 to selling 40,000 bikes a year and providing jobs for 190 people in 2012, and the Brompton is in huge demand, both at home and abroad. Again, I’m very proud of Brompton’s approach in making all of its bicycles in Britain. As well as using its own sites for bicycle

Made in Britain

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With our great design heritage and integrity, Britain can produce incredible things Exclusive by Kelly Hoppen MBE production, Brompton has outsourced part of the task to other UK manufacturers, helping to keep skills and jobs within Britain. By making its bicycles in the UK, it’s easier for Brompton to preserve its designs and manufacturing techniques. Being able to control the quality of your product is so important, and the high manufacturing standards within the UK are another reason that I think Made in Britain carries such weight. For those who have seen the programme you may have noticed that one of the first questions I ask on Dragons’ Den is “where is the product manufactured?” This is because I want to support British manufacturing, and I know with our great design heritage and integrity that we can produce

incredible things. This is was one of the reasons I invested in Reviveaphone – not only was I completely taken by entrepreneur Oliver Murphy, who is only 20 years old, and his innovative idea of fixing water-damaged phones, but I was so happy to hear his products are made in the UK – a great example of a young British entrepreneur pushing the boundaries. In January of this year I launched my online store, and I have made it a commitment to use British-made materials wherever possible. It feels great to be able to support British manufacturers and know that I am getting materials which are brilliant quality. People ask me what’s behind the UK recovery. Is it government policies? Is it innovation? Technology? I’m sure we all have different

Brompton folding bikes: a British success story

opinions on this. Recent government initiatives to help the UK recovery have seen extra grants for apprenticeships and an increase to the annual investment allowance for firms. This makes it easier for firms to employ young people and spend money on new technology and machinery. Of course, access to money is one of the key requirements for smaller, developing businesses. The government has permanently put in place the Seed Enterprise Investment Scheme as a way to achieve this. Simply put, people investing their money in smaller UK businesses face less risk as the money that they invest receives tax relief. Although this helps to encourage investment in smaller UK firms, it does rely on people being willing to risk their own money to fund new start-ups. In an ideal world, it would be easier for smaller firms to borrow money from banks to fund their enterprises. In reality, banks aren’t lending as much money to small firms. Smaller firms tend to be riskier, and banks have less appetite for risk these days. As an entrepreneur, I’d like to think that the UK recovery is being led by smaller firms. Every day I see examples of innovation and self-belief in the people I encounter. We’re bombarded right now with bright, budding entrepreneurs who believe that “British is best” – and I’d love these new businesses to drive Britain forward. www.kellyhoppen.com

Business Reporter · June 2014

an independent report from lyonsdown, distributed with the sunday telegraph

Made in Britain

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Industry must do more to give women a greater role By Dave Baxter MORE could be done to break the glass ceiling in UK manufacturing, according to an industry body. Figures released by the EEF, which represents the sector, show that things are “heading in the right direction” with at least one woman now sitting on the board of every FTSE 100 manufacturing company and women accounting for 21 per cent of directorships in this group. But the body also argues more needs to be done – both in getting women onto boards and bringing on more female recruitments at entry level. Verity O’Keefe, employment skills and policy adviser at the EEF, notes that there are limits to the progress made – only 8 per cent of executive d i rec tor sh ips at F T SE 10 0 manufacturing companies are held by women, for example. But she claims change is coming, both in larger firms and SMEs. “I think the gradual balance is coming,” she s ay s . “ C omp a n ie s a r e acknowledging it and looking at the

female talent pool. They are struggling to recruit people and if we were to widen that talent pool, from overseas or by recruiting more women, we could begin to tackle those problems. “One of the problems is that they are not getting the number of female apprentices for manufacturing and engineering. At the minute, about 5 per cent of apprentices are female.” O’Keefe believes that a number of changes need to take place in order to attract younger women to an industry previously associated with men. “There’s still a perception issue,” she says. “Manufacturing is associated with blue overalls. We need to talk about what it entails, like designing aircraft and going around the world. Also, a lot of females think there’s no flexibility.” She argues that a new virtuous cycle of recruitment could begin, with women starting as apprentices in the industry, doing well and then acting as mentors and role models to potential recruits. “There is the role model and mentoring side of

Jenk’s eye view

New figures suggest female roles in the engineering sector need to be promoted

things,” she says. “I think we have had a tendency in the past to send a traditional manufacturing role model to school, but now we see we should get women into schools to show other women they could do the job. “Once in employment, there’s the idea of mentoring from strong women to deal with any confidence issues and show what’s possible.” O’Keefe also says that more could be done to elevate capable women

to boards, but notes that women surveyed for the EEF report were strongly against the idea of quotas. “Women want to be on a board on merit, and not because of a quota,” she says. There is still progress to be made. In 2011, a report written by Lord Davies for the government set a target of 25 per cent of FTSE 100 board positions to be occupied by women by 2015. Whether this is met or missed is yet to be seen.

UK exports and imports set to expand, reports British Chamber of Commerce BRITISH exporting could begin to pick up as companies start to buy and sell more, according to an industry body. The British Chambers of Commerce (BCC) recently predicted UK exports, which have remained relatively weak despite a resurgent economy, could get a boost as firms grow in confidence. But it also believes Britain will continue to rely heavily on imported goods. The BCC has forecast UK exports to grow by 2.4 per cent in 2014. It predicts that imports will increase by 2.3 per cent in the same year. It argues that UK exports should be targeted at 24 “priority markets” which are

growing both economically and in terms of global clout. These include Kenya, Morocco, Australia, China and the USA. Writing in the BCC’s Quarterly International Trade Outlook publication, director general John Longworth lamented that the UK was still importing more than it was exporting, despite this trade gap beginning to narrow. He wrote: “The fact is that too many British companies either export reactively, or shy away from doing so because of perceived barriers, lack of local knowledge, business contacts, or practical considerations such as a postal address or office space.

“It is crucial that businesspeople have a quality-approved, business-savvy provider of support services in new markets, and are confident that as they step off the plane, they can easily be connected with new exporting opportunities.” Figures released by the Office for National Statistics show that the deficit in trade of goods and services for March was £1.3billion, an improvement on February’s £1.7billion gap. Items the UK exported more of in March include jewellery, cars and aircraft. Britain also increased its exports to countries in the EU, particularly in the trade of oil.

MADE IN Britain. Is it a campaign? Is it an organisation? Is it a marketing tool? Yes, in all three cases but, more importantly, is such a “nation brand” initiative relevant? And, if so, to whom, and how? A strong nation brand reflects cultural, social and national mores as well as commercial prowess and economic vitality. Labour’s “Cool Britannia” worked in its context. “Country of Origin” labels do have a benefit that encompasses more than just advertising copy. Brands can drive preference, purchases and advocacy – all increasingly important in our interconnected digital world. As the late Wally Olins often told me, branding has become ubiquitous. Using brand equity is not a new thing for a nation, but is something few have done consistently well. Canada is a stand-out nation brand while other perennial Top 10 performers include Switzerland, Singapore and Sweden. In most comparison tables Britain ranks in the top four, though these indices are heavily influence by GDP. In the more holistic indices, such as Future Brand’s Country Brand Index, Britain is ranked 11th. The CBI measures the “how” rather than the “what”. Interestingly, the USA, the benchmark nation brand, has fallen from the top slot in 2009 to eighth currently. Go far enough back to the 1950s and Made in Japan was a moniker for cheap, often plastic, goods. In recent years though, Japan has invariably been in the top five, and its old image is one now associated with China. Some individual companies have found it useful to drape themselves in the flag. Harley-Davidson is a classic. IKEA has gone further, adopting national colours and local names for its products. Stove’s Some “Made in Britain” firms have campaign has had an found it impact, although with limited pick-up by oth- useful ers.Nation branding to drape has its place, either as a by-product of themselves a well-established in the flag nation’s economic activ ities (such as t he US), t he preserve of smaller nations (such as the UAE, ranked 19th), or selected companies which choose to marry corporate and national attributes. It is certainly the case that the British economy would be better served by encompassing ideas that promote the country’s values, achievements and prospects in a compelling nation brand. Justin Jenk is a business professional with a successful career as a manager, adviser, investor and board member. He can be found at www.justinjenk.se

Business Reporter · June 2014

an independent report from lyonsdown, distributed with the sunday telegraph

RISE OF THE

ROBOTS! The robotics industry represents a fertile ground for traditional British expertise to exploit. By Dave Baxter

HE ROBOTS have already arrived and more are on the way. Futuristic machines that can run, play chess and even tell jokes have caught our attention, along with the likes of unmanned drones and driverless cars. From hotels to hospitals and even war zones, they are likely to have a huge impact on our lives in future. But Britain’s role in the machine revolution is uncertain. Some have recognised the potential of the future robotics industry. The UK government has dubbed robotics one of “eight great technologies” to focus on, while others have shown a commercial interest in

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the sector. Sir James Dyson, for example, an inventor more usually associated with vacuums and hand dryers, invested £5million into a robotics laboratory at Imperial College London to look at “the next generation of intelligent computing for the home and work”. The UK is likely to play a role in what could be a booming global industry, but this may not involve actually making the robots, say some experts. Dr Alastair Barrow, academic and director at Generic Robotics, which focuses on the interaction between robots and humans, believes intelligent machines will soon pervade everyday life. “There are those large companies that make big [robot] arms – that was very big in

the 70s, 80s and 90s,” he says. “It’s now moving to service and personal robots, which has a huge number of potential applications. “In the next 10 or 15 years you can expect robots to be ubiquitous. You can expect to see a robot in a care home helping an elderly patient, or working in a hotel.” He is optimistic about Britain’s role, but is unconvinced it will cover the actual manufacturing process. “Traditionally the UK has had a strong presence academically in technology,” he says. “So with robots, it could be no different from looking at a kettle, which could be designed in London but has been made by the Chinese and sent back. “It would be too expensive to build the robots ourselves,” says Mike Wilson, chairman of the British Automation and Robot Association, who believes Britain will not make its own robots, but for different reasons. He says that the UK could thrive in the industry for “advanced” robotics – systems such as unmanned aircraft, which BAE Systems makes – but believes there is a lack of British companies with the ability to take on the manufacturing process in other areas. He says: “One of the challenges we might have is the lack of significant businesses in the UK that can take the technology ideas and turn them into stable products. At the moment, nobody quite knows what businesses would be supplying them, but you would think it might be the larger companies like Sony or Toshiba or Philips that already operate in consumer electronics.” Wilson believes the UK’s strong academic heritage could lead to it contributing research and innovation – but he says Britain could do more to benefit from the development of robots itself, whether this is in its schools or factories. “The other side is that on the industrial robotics side, we are not at the forefront, but also our manufacturers are not at the forefront in using them. We are behind our main competitors,” he says. “It can help to use the technology to ensure that our manufacturing capability increases its competitiveness.” He adds: “One of the other challenges is we need to get more engineers out of our education system. We think robotics is a way to achieve that, because robots are seen by children as interesting and exciting. “They are also a good combination of technologies, like manufacturing and software. Robots are a very good vehicle to encourage children to do engineering. Hopefully we produce engineers that go into the manufacturing industry that way.”

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Bristol firm sets exciting targets The benefits of additive manufacturing INDUSTRY VIEW

dditive manufacturing will soon be available on a commercial scale in the UK, and will help manufacturers make their products cheaper to produce, thanks to techniques being developed by Bristol-based firm HiETA Technologies. Additive manufacturing builds a component by depositing material in layers. It involves minimal machining of a product or moulding it, and the physical characteristics of a component it is replicating are retained. Mike Adams, CEO of HiETA Technologies, says: “What we are working on with our clients and the partners that we work with is the commercialisation of additive manufacturing. It is well known as a process for making prototypes in early stage development. “However, it has not really got to the stage where it can be mass produced. Our intention is to take additive manufacturing and make it applicable to mid to high-volume markets. It makes the early stage processing costs a lot cheaper and quicker.” HiETA Technologies has been developing products which can be used for the automotive, aerospace, defence and clean energy sector. The firm has received nearly £3million of funding from the Technology Strategy Board and plans to bring its products to market by the end of the year. Adams adds: “We are already working with clients in the automotive sector and we also have clients in the renewable sector as well as some defence contracts.” In car manufacturing, for example, Adams says it can be used to take the weight out of some of the heavier components of a car by using lattice structures and honeycomb effects which, in turn, helps increase fuel efficiency. HiETA Technologies also designs products for companies which might have a heat-management problem in an engine. Additive manufacturing can be used to improve cooling processes in heat exchangers. +44 (0)117 370 7733 business_enquiries @hieta.biz

Business Reporter · June 2014

an independent report from lyonsdown, distributed with the sunday telegraph

Made in Britain

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The big interview Sir

The ma is weal It’s up t to be w

By Dave Baxter

portrait: andrew Crowley

IR DAVID McMurtry is telling me about cranial plates when he stops and mutters: “God, it’s bloody hot! I wonder where the air conditioning’s gone?” In a flash he’s up and across the room, presumably fiddling with the temperature controls. It’s one of the first really clammy days of the year, even in Sir David’s plush and rather large office, adorned with various bits of comfortable-looking furniture and a number of awards. The sun is bearing down on the Gloucestershire headquarters of Renishaw, the FTSE 250 firm Sir David co-founded in 1973, but there is little time to bask in its warmth. The company, which celebrated its 40th anniversary last year, has not slowed down. It operates in 32 countries, has a value of around £1.2billion and employs around 3,400 people. Its focus, on technology to make manufacturing more efficient, has expanded into areas including healthcare, but began with a technical issue at Rolls-Royce. As assistant chief designer at the firm, Sir David was asked to solve an inspection problem for the Concorde aircraft’s engine. Measuring machines were being used to check the size and design of parts – but when used on smaller objects, the machine pushed them away before measurements were made. “They were trying to measure pipes with a piece of equipment that was pushed away,” he says. “I looked at it and saw that you wanted something that triggers it [the measuring device] and then pushes it out of the way. I made a device called the touch-trigger probe, which allows a sensor to touch a part and generates a signal.” The probe seemingly caused little fuss at Rolls-Royce – which later gave Sir David a turbine “for safekeeping”, still displayed at his headquarters some 30 years on – but it led to the creation of Renishaw after orders for the product came in. In 1973 Sir David teamed up with John Deer, another Rolls-Royce employee, to found Renishaw. But this meant a juggling act lasting several years. “I did the design and he got the bits and the assets and got the product sold,” Sir David says. “I was limited to evening work and weekend work. “He gave up Rolls-Royce far quicker than I did. I stayed on to finish a few projects. Then I handed in my notice and it wasn’t received very well. They persuaded me to work part time at the same rate they were paying me for full time before. I didn’t go until 1979. I was working all the hours God gave me at home, which puts strain on the marriage. I had to make a decision.” Sir David is still, it seems, a busy and focused man. He proudly talks about the firm’s core areas, such as calibration and measurement, as well as its innovations in healthcare. When I mention relaxation, he starts to laugh. “If you ask my wife,

Sir David, with the jet engine that was presented to him by Rolls-Royce

I don’t unwind,” he chuckles. “We go away on weekends and things.” And when I ask how much he focuses on the business he answers: “She says ‘100 per cent.’” Some of his hobbies are more conspicuous, particularly for fans of the BBC’s popular Sherlock series. Swinhay House, an eco-friendly and luxurious mansion with a futuristic design,

belonged to a villainous newspaper baron in the show, but was created by Sir David. He jokes that he “wanted to downsize” – but Swinhay House is used for shows and events because his wife never wanted to move in. “We were in no hurry [to build the house] because my wife had no interest in living in it,” he jokes. “We lived in my old house so she could

garden herself. It somewhat backfired.” Beyond the world of eco-mansions, Sir David is cautiously optimistic about the future of British manufacturing – even anticipating its next golden era. “We are in the business of supplying equipment that makes manufacturing more efficient and it depends on what part of the world,” he says. “We are 94 per cent exports – we

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r David McMurtry

ajority of the City lth-consuming. to manufacturing wealth-creating have got 6 per cent visibility here. When we go around the world, each country is behaving differently. But it’s fair to say that there is a visible uplift.” He notes that there have been “huge” projects in places in China, which can make Renishaw’s fluctuating quarterly results look “silly”. But he believes that manufacturing, though its increasing activity has been “well-publicised”, is seeing green shoots, with exports the key to future success. “Exports are what this country needs, because we haven’t got oil fields or natural resources, and we have to export to get the raw materials,” he says. “The vast majority of the City is wealthconsuming. It’s up to manufacturing to be

wealth-creating. We were at our very best when we were manufacturing in the Victorian era. Then we passed it to the USA. Then we passed it to Japan. Then we passed it to China. “Each of those countries got overly fat and paid themselves far too much and became history again. We are at the start of the second Victorian manufacturing revolution for exports. That’s very optimistic, but there’s no reason we can’t do it.” For Sir David, progress appears to be slow and steady. “Our strategy’s different to Dyson’s,” he says. “We are sticking to high value, low volume, even though our rate of growth is nothing like theirs and I’m as jealous as hell about that!”

Swinhay House, owned by Sir David and used as a location in the BBC series Sherlock

But he believes Britain has made mistakes. “The problem is the industry’s no longer owned and controlled by the UK,” he says. “The aircraft industry and the car industry are doing well, but the decisions will be taken elsewhere. “There needs to be a focus on keeping the decision-making process here. It’s very difficult to live in your area and shut the place down. I think Pfizer [taking over AstraZeneca, a deal which has since collapsed] would be a shame – we watched Cadbury go in a few years. France have got the right idea with vetoing these things, but they control our industries.” He sees other issues troubling the industry, even if it causes Renishaw little pain. A skills gap may face manufacturers. But Sir David has focused

on finding apprentices young, funding their studies and nurturing them. “We sponsor apprentices right from the early days,” he says. “We have been fine in that right, but it’s certainly not enough for everybody.” Another danger he sees is the City – particularly for “cash-rich” firms like his own, which he was persuaded to float in the 1980s. “If you are cash-rich, you can build the reserves and there’s no reason whatsoever to go public,” he says. “But it works if you want to raise money for the business.” With much of the control over his own, cashrich company, Sir David seems set on the long term. Renishaw could well have plenty more anniversaries to come.

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Stop sweating assets and strategise automation We need to encourage a ‘march of the makers’ INDUSTRY VIEW

here’s a long list of global manufacturing countries for which industrial automation ranks highly on their productivity agenda. Sadly, the UK is not one of them. Not yet, anyway. The UK currently sits 19th in the world when looking at robot density, or the number of robots per 10,000 employees. Developing and sustaining any “march of the makers” will not succeed if these makers are inefficient in global terms. It is this notion of global manufacturing competitiveness which guided the latest white paper report from Cranfield

University. While the report details many issues affecting UK productivity, the widespread implementation of robotics and automation emerged as an area of key concern for manufacturing, regardless of size. Cranfield University’s report is not alone in highlighting the urgent need for companies to invest in automation. The recent Foresight Report made the case for the adaption of automation, as did the All-Party Parliamentary Manufacturing Group’s Making Good report, which made the suggestion that the Department for Business, Innovation and Skills “should collaborate with industry on a national campaign for automation, with a focus on myth-busting, making the case for automation and job creation”. Already stating the case for automation is Nick Hussey, chairman at The Manufacturer magazine and co-founder of the

Automation Advisory Board, who says it is now imperative that companies begin to think of automation as a strategic issue. “In order to create, maintain and improve our competitive advantage we simply must stop taking pride in sweating assets that are long past their best in terms of maintenance costs, energy usage and raw material wastage. Investment levels have to rise,” he says. “There is a real similarity here between the way manufacturers think about investment in automation and the way they consider IT. Currently too many companies think of them as annoying costs rather than opportunities to create meaningful long term competitive advantage.” For more information see www.themanufacturer.com/ automation-advisory-board.

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Inspector Dogberry

One of the most exciting and potentially gamechanging developments in manufacturing has been that of the 3D printer. It could contribute to greater flexibility around what is made, reduced waste and

By Natasha Clark, web assistant

shorter supply chains. mass production, it does

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certain industries behind.

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an open platform which aims

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While no stranger to international culture, Dogberry is a loyal Brit at heart. So he was sad to see Britain fail in its quest for victory at the Eurovision Song Contest. At least the UK is performing well on other fronts. Dogberry was heartened by a recent Boston Consulting Group study dubbing Britain “the cheapest location in western Europe” for manufacturing. It argues cost competitiveness is becoming “increasingly important”, but that some countries once associated with low overheads are seeing this change. Brazil, for example, is now one of the highest-cost countries, and Mexico has lower costs than China. In some respects, this won’t change much – the UK will still struggle to compete with Eastern Europe or China on costs. But at least it can rival neighbours like Germany and France.

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Twitter: @dogberryTweets

u Editor’s pick UK Made http://ukmade.wordpress.com This patriotic blog recommends quality products made in the British Isles, urging readers to buy local and reduce carbon footprints. With posts on where to buy everything from boot polish to deckchairs, this is a must-read for making informed decisions about purchases and supporting quality British design and manufacturing.

The technology is still in

Made http://madeuk.blogspot.co.uk Made is a British art-focused blog showcasing the work of the best of British artists and designers. A team of contributors promotes design and craft events and fairs, and feature quirky and entertaining interviews with British artists. A visually appealing and attractive insight into art businesses in the UK.

A bid too far? Corporate acquisition bids are

skills base in manufacturing and

often long and messy. this, in

other areas, or obliged to invest?

dogberry’s eyes, makes them all the more entertaining.

much of britain’s manufacturing success will depend on its role

dogberry is enthralled by us

in a global economy – but issues

pharmaceuticals company pﬁzer’s

like this highlight the dilemmas

bid for astraZeneca – which now

involved.

Manufacture and Industry http://manufactureandindustry. blogspot.co.uk Documenting the craftsmanship and history of UK products, Adam Thompson’s blog details industry news, recommended TV programmes and interviews with manufacturing directors alongside detailed reports of his visits to British factories. Well-loved and extensive.

looks to be dead in the water – and the related war of words.

EEF manufacturer’s organisation blog

astraZeneca, the uK’s secondlargest drug-maker, has signiﬁcant

www.eef.org.uk/blog

british assets, manufacturing and research facilities. some argue a pﬁzer takeover could take these, and related jobs and skills, out of the uK. if this is the problem, what is the solution? should pﬁzer be tied to promises which protect britain’s

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Typing a product code into this app gives shoppers instant information about where UK supermarket food is from.

A fun but informative look at manufacturing and the British economy, oﬀering useful insights and colourful infographics. Topical and up-to-date, its regular articles cover everything from the latest economic news to an alternative manufacturingrelated version of Eurovision.

Food for thought: giving pets the best INDUSTRY VIEW

emand for natural pet food from British manufacturer Natures Menu is booming, as the company’s customers consider what they eat themselves – and the food they want to feed to their beloved pets. Taking a responsible approach to pet nutrition with help from vets, and using more than 30 years of pet food experience, Natures Menu produces an extensive range of natural pet foods with a philosophy of “feeding as nature intended”. Sourcing locally where possible, the company’s products are quite different from normal processed pet foods, with many varieties being just a simple blend of meat, vegetables and fruits presented in a raw, freshly-frozen format and sold in freezer cabinets in most pet stores across Britain. Company owner Craig Taylor (right) said: “As consumers today think about the quality of the foods they eat themselves, we are seeing a growing trend from concerned pet owners who really want to know that their pet is getting

the best. We don’t include any preservatives, colours, fillers or low-grade ingredients, and a lot of our raw materials are fit for human consumption. We tell people exactly what goes into our foods and they tell us that feeding a lowprocessed, high-quality food has helped their pets to have more energy, better coats and healthier digestion.” Natures Menu’s expertise extends to the delivery of its own goods, with more than 100 staff looking after customers via the company’s local home delivery system from any of its national delivery depots. Demand for natural and healthy brands of pet foods in other countries is also very high, and Natures Menu is gearing up its production facility in Watton, Norfolk to start deliveries to customers and homes across Europe with its first European depot due to open in the summer of 2014 in Bremen, Germany. 0800 0183770 www.naturesmenu.co.uk

Business Reporter · June 2014

an independent report from lyonsdown, distributed with the sunday telegraph

Made in Britain

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There’s a buzz around manufacturing that hasn’t been heard for many years John Excell

ExpertInsight

T MAY come as a surprise to some, but British manufacturing is on the up. Indeed, from the corridors of power to the floors of the factories, there’s a buzz and optimism surrounding the industry that hasn’t been heard for many years. And, despite a lingering misconception that “we don’t make anything anymore”, there’s no denying that manufacturing is an increasingly critical part of the UK economy. It accounts for around 10 per cent of it, contributes £140 billion per year, employs more than two million people and is, according to the latest indicators, growing faster than it has for more than two decades. Much of this growth is underpinned by the huge global success of our key industrial sectors. For instance, the UK boasts the world’s second-largest aerospace industry, a sector that specialises in the production of complex high-value

technologies such as wings and jet engines, that exports 75 per cent of what it produces, and generates almost £12 billion in revenues every year. Our automotive industry – on its knees just a couple of decades ago – is another striking success story. Viewed across the world as a centre of excellence for the development of a host of disruptive technologies, the UK has become one of the preferred European destinations for some of the world’s biggest car manufacturers. And our automotive sector now exports around 80 per cent of the 1.5 million vehicles and 2.5 million engines that it produces each year. What’s more, there are even tentative signs that the once unthinkable is happening: that rising labour costs in countries such as China are prompting some manufacturers to return production to the UK. Indeed, according to a recent survey carried out by the UK’s Manufacturing Advisory Service, 11 per cent of manufacturing SMEs have or are planning to “reshore” parts of their production. One key factor in the UK’s continuing ability to punch above its weight in the global manufacturing stakes is its world-renowned academic research base. From the development of lightweight materials to the design of advanced electric

power-train technologies, UK researchers are frequently at the heart of some of the world’s most exciting engineering advances. The government’s catapult centres – set up to help exploit the commercial potential of research – are a welcome acknowledgement of the key role that research will continue to play in the UK’s industrial success. But while there are plenty of reasons to be optimistic, there is one issue dominating the debate about Britain’s industrial future: an engineering skills shortage that many fear could seriously hamper the industry’s ability to grow. In order to address this it’s vital that industry, government, academia and the media work together to dispel the old misconceptions and educate everyone – children, students, teachers, politicians, investors, and the general public – about the growth of UK manufacturing and the great opportunities that this is creating. To learn more about UK engineering innovation – including the design and manufacture of Europe’s next Mars Rover, the development of the world’s most advanced lifeboat, and RollsJon Excell is editor Royce’s vision for the future of manufacturing – you can book of technology a free place at The Engineer Conference 2014, which takes news magazine place between June 3 and June 5 at the NEC, Birmingham. The Engineer Find out more at www.subconshow.co.uk.

Enabling collaboration through improved mobile connectivity A unique global mobile network that is cost-effective, efficient and reliable INDUSTRY VIEW

anufacturers have had to adapt and make significant changes to their operations to remain competitive in a difficult economic environment. Although there has been modest growth since the 2008 recession, the outlook isn’t bleak. Manufacturers are working closer with their suppliers to be competitive. Survey results from Economist Intelligence Unit in November 2012 showed collaboration as a key strategy, with 51 per cent of respondents claiming their suppliers are ideally placed to suggest best practice rather than solely looking inside the organisation. By working closer with suppliers, improvements to logistics, manufacturing and processes will help strengthen operations and enable responsiveness to market changes. Efficiencies in the value chain will help mature markets stay competitive and provide the opportunity

to enter emerging markets. In the Economist Intelligence Unit survey, November 2012, 58 per cent of respondents say they will regionalise their supply chain, and 55 per cent say they will diversify their manufacturing locations. Top of the location list is China due to its efficiency and strong technical skills. Other key markets for the industry are UK, US, Brazil, Germany, India, Japan and South Asia. However, high wages in China and South East Asia, coupled with the need to have closer relationships with suppliers, are forcing companies to consider near-shoring their operations to countries closer in terms of geography, time zone and cultural similarities. With this in mind, manufacturers are looking to Eastern European countries. Regardless of which countries suppliers are located, the need to collaborate effectively while at home or abroad is critical to information sharing. The primary way to share data is via email. As technology becomes more effective the use of email and web-based portals is expected to increase, which means connectivity is vital. The solution is a mobile network to match the level of connectivity

expected by users, regardless of whether they are at home or abroad. Truphone provides a unique global mobile network that is cost-effective, efficient and reliable – regardless of geographical location or the communication destination. In an area called the Truphone Zone, users talk, email and download just like a local. So they can keep in touch at local rates whether they’re in the UK, US, Germany, Spain, Poland, Australia, Hong Kong or the Netherlands. Collaboration with international contacts is easier while users are in their home country with Truphone’s multiple international numbers on a single SIM, so contacts in the Zone can call a number that’s local to them. Mike Procyshyn, head of infrastructure for FitFlop, explains how Truphone helped while he was in the UK setting up the firm’s New York office. “I wasn’t getting anybody from the US phoning me back as our suppliers did not have international calling. This caused delays in communication, potentially leading to loss of business,” he said. Beyond the Zone, the Truphone network offers a consistent international experience in more than 200 countries. The patented technology routes calls and data to the nearest of six point-of-presence hubs – giving you clearer calls and faster internet access. 020 3006 4300 www.truphone.com/uk/madeinbritain

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UK production bucks downward global trend

ExpertInsight

UK M A NUFACTUR ERS received a welcome boost when it emerged that sector activity had jumped sharply in April. But in other parts of the world, manufacturers have been a cause for concern. The Markit/CIPS manufacturing Purchasing Manager’s Index (PMI), a monthly assessment of factors including output, employment and orders received, rose to a five-month high of 57.3 for April compared to 55.8 in March. Any reading

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above 50 indicates sector expansion. Rob Dobson, senior economist at Markit, said: “ T he PM I s u r ve y s ug ge s t s t h at manufacturers are creating jobs at a pace of around 10,000 a month at present.” This may be good news for Britain, but elsewhere in the world analysts are nervously watching manufacturers and their progress. In China, the world’s second-largest economy, there have been concerns about a manufacturing slowdown, something

which could deal a blow to industries and markets around the world, threatening a recovery still in its early stages. The sector has shown signs of slowing down in recent months, but flash PMI data in late May suggested that it had begun to stabilise. The flash China manufacturing PMI showed a level of 49.7 for May, compared to 48.1 in April. Although the figure, which is below 50, indicated sector contraction, this was a five-month high, and suggested that the sector had started to get on top of the slowdown. Hongbin Qu, chief economist for China and co-head of Asian economic research at HSBC, said: “Some tentative signs of stabilisation are emerging, partly as a result of the recent mini-stimulus measures and lower borrowing costs. “But downside risks to growth remain, particularly as the property market continues to cool.” A f lash PMI for t he Eurozone manufacturing sector, released on the same day, reached 52.5 for May, compared to 53.4 in April. This was a six-month low. Some of these countries were hit particularly badly. France, the secondbiggest economy in the Eurozone, saw its manufacturing sector shrink. As one of the indicators of economic progress, it is hoped that manufacturing output will stabilise and improve around the world. But predicting this will be difficult.

New technology expected to streamline manufacturing base NEW DEVELOPMENTS in technology, from the proliferation of connected devices to the explosion of data, could lead to a more efficient, sustainable way of manufacturing, according to a research group. Simon Barnes, business development manager at the High Speed Sustainable Manufacturing Institute, a research group, argues new innovations could improve how the sector operates. “We are doing a lot around the challenge of information,” he says. “We hear a lot about the Internet of Things, big data and cloud-based systems. They

could let people make informed decisions in real time [to] put this decision-making back in the hands of the people in areas like engineering.” He says that, for example, energy could be used more efficiently if technology were used to monitor and maintain temperatures in real time. Data showing, for example, a factory’s output and waste, could be monitored and analysed to make changes and improve processes. He also thinks other factors such as remanufacturing and design, could help, but that attitudes need to change if the sector is to be more sustainable.

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With you for life A new concept in engineering – through-life services INDUSTRY VIEW

ngineering for big, complex assemblies is changing. For trains and aircraft, the old business model of design – make, sell and then make another – is being supplanted by product servitising, or through-life engineering. Pioneered by the Rolls-Royce “power by the hour” model, where the customer pays for an asset to be in constant service, more companies are adopting throughlife engineering, with discreet sensors now able to monitor the performance of these products, feeding back to the manufacturer to guide predictive maintenance. This is better value for the customer, who needs total reliability and doesn’t want to pay to fix asset failures. “High-value products are typically technology-intensive and reliabilitycritical,” explains Professor Raj Roy of Cranfield University, who leads on the EPSRC Centre for Innovative Manufacturing in Through-Life Engineering Services, or TES. “These products require services such as

maintenance, technology upgrades or spares inventory management throughout their operational life. TES will research how industry can redefine the way these high-value products are designed and manufactured.” Maintaining assets through their life-cycles is heavily linked to “design for manufacture”. In the past, products were designed for single use, or a small number of applications. Resource scarcity and a tighter economy demands better design of products for multiple applications and easier servicing. The TES Centre, a Cranfield and Durham University collaboration, works with partners including Rolls-Royce, Bombardier Transportation and the UK MOD, on projects including reducing the incidence of no-fault found (NFF) through improved system design, service degradation assessment and remaining life prediction and developing diagnostic and self-healing technologies for electronic and mechanical components. In the defence and security sector Cranfield University acts as an “educator” between organisations that provide maintenance, repair and overhaul (MRO) services, and the customer, in most cases the MOD. Often a product needs alteration for an application it was not designed for.

“The Snatch Land Rover, for example, was designed for the Cold War, not Afghanistan – where there are far tougher operational requirements,” says Laura Lacey at the Centre for Defence Acquisition at Cranfield University. A large part of this work is getting manufacturers to think more about future applications. “In our masters programme in systems engineering for defence, we get both parties to understand the problems they actually need the product to solve, and not just replicate a vehicle they’ve seen, for example, used by the US Army.” Using clever sensor technology, MRO organisations are developing ways to track the performance of their products in the field. MAN Trucks used a Health and Usage Monitoring (HUM) system to assess how customers – including the

British army – were using its trucks. The HUM system showed that drivers were not using the braking system in the way it was designed, creating more wear on the secondary brakes. The MOD had not procured enough correct spare parts, resulting in possible overuse of this component. “MAN sent the data to the army who were able to retrain soldiers in how to use the braking system properly, reducing the procurement bill,” says Miss Lacey. MAN is also using HUM technology to assess the fuel efficiency of its trucks. This performance feedback is part of a wider trend in engineering, including TES, to monitor, track and optimise expensive equipment in the field. +44 (0)1234 754190 business@cranﬁeld.ac.uk

14 · Business Reporter · June 2014

an independent report from lyonsdown, distributed with the sunday telegraph

The future

Getting hi-tech product to market faster Simon Cowell

“

Made in Britain Industry view

Business Zone

My proudest achievement has been the success of the shows and artists I have been involved with, because they were made in Britain

TRON has been writing software and producing the electronic circuits to control small electronic display screens for almost 30 years in the UK, when most of its competitors have moved to Asia. Its predominantly European customer base extends from blue-chip companies making servers and telecom equipment through to high-end audio systems, vending machines, pub gaming machines and industrial control systems. The arrival of the smartphone some five years ago redefined what is hi-tech in displays, with multi-colour screens and touch control. A natural response would have been to adopt the latest technology, increase the system processing power, install a Linux or similar system and encourage customers to move to new expensive development systems and recruit highly paid engineers. But customers had been downsizing engineering departments for many years, which meant a more realistic solution was needed. Reviewing the market in 2009, it became apparent that, although physical hardware could be designed in two months, writing the application software could take six to 12 months. ITRON managing director Andy Stubbings outlined a new operating

language, drawing influence from web and traditional C languages, which would significantly reduce the software writing time and drive a new sales strategy for the company. After a year of development, ITRON released its first-generation colour display system and was swamped by customer demand. For £85, anyone

with basic web page writing capability could create an application in 12-15 hours, then visit clients with a working demonstration rather than just a paper-based idea. This resulted in high client confidence and rapid contract closure. The next two years saw ITRON open the door to customerrequested enhancement and the itronOS+ operating language near completion. It now includes many capabilities seen in office software, such as graphs, slide shows and spreadsheets, with many communication protocols including those found in MIDI music synthesisers and DMX theatre lighting control. The proof of its success is that ITRON now sells 95 per cent of its product with itronOS+ installed and only 5 per cent with Linux. ITRON’s second-generation hardware (seen in the picture) adopts a cost model similar to raspberry PI, and is propelling sales to a new level. Whether you are setting up business in a technology centre or underneath the railway arches of Dalston, getting to market fast with the latest technology can be made possible for all and not just the high tech giants. info@itronos.com www.itronos.com

In focus: Oﬀshoring or reshoring? A management headache…

pinions may be divided on whether the flow of offshoring projects to low-cost countries is slowing, or if UK manufacturing is really seeing an upsurge in reshoring activity. For many years, iPRO Solutions has been a market leader in providing low-cost sourcing solutions to the manufacturing sector. “Because of our experience, iPRO has always seen changes in sourcing trends very early and has adapted,” explains CEO Martin Deas.

In recent years iPRO has expanded from being based in Malaysia and China, to developing sourcing expertise in India and Vietnam, as costs were rising in China and customers wanted options. Sourcing in Asia is not about to stop anytime soon and, while iPRO does not see any significant levels of reshoring taking place, we do see more businesses who might have taken work offshore 10 years ago looking initially for options locally. iPRO wanted to address

this emerging trend so, 18 months ago, set up iPRO Manufacturing in the UK. This facility is all about providing flexibility and robust solutions for customers, whether they want to manufacture offshore, onshore or have difficult challenges to overcome. iPRO’s ability to combine UK assembly with Asiasourced materials fits extremely well with its existing infrastructure in the UK and Asia, and resolves a number of difficult

challenges facing companies that want to assemble in the UK but who need to manage materials from globally-based suppliers. 01844 292630 www.iprosolutions.co.uk

Competing with the best in the world “Proud to be British and proud to be market leaders,” says Barry Tabor, MD of British Converting Solutions Ltd, (BCS) the Leighton Buzzard-based manufacturer of box making and printing machinery. Faced with the challenging economic conditions of 2009, the business embarked on a rigorous R&D programme to redesign its range of machinery. The objective was to engineer machines, incorporating cutting-edge technology that could be manufactured efficiently for export across the world. BCS’s competition is from high-cost German and low-cost Far East manufacturers. To ensure a competitive advantage, BCS’s aim was to design machines “competitive in price and performance”. To meet these objectives, BCS design engineers worked with selected supply partners and ensured that years of employee experience were taken onboard, to create machines that incorporated both the latest technology and established engineering principles that are the fundamental building blocks of the business’s success. Prototypes were installed at customer sites for BETA testing. 3D CAD design and the creation of an in-house software development team enabled the business to fast-track this ambitious development programme. Since 2009, turnover has trebled and, in 2013, export sales accounted for 75 per cent of sales. Direct sales offices have opened in the USA, France and Poland while, in other markets, distribution deals are in place to promote and support machines. And as an SME employing 30 people, BCS’s six apprentice engineers ensure the business has the skills to develop and invest in the future. Tabor adds: “For years, British manufacturing was tarnished by the reputation of the 60s and 70s. Today, we have the skills to compete with the best in the world. Our success is testimony to this.” 01525 379359 www.bcscorrugated.com

Business Reporter · June 2014 · 15

an independent report from lyonsdown, distributed with the sunday telegraph

The debate What is the best way to boost UK manufacturing?

Jon Cave Managing director Helander

Steven Kay Managing director Pinnula Ltd

Jonathan Ledger Managing director Proskills UK Group

Andrea Rodney Director Hone-All Precision

Mike Lloyd CEO BatchBuild Ltd

From the standpoint of a manufacturing company making safety-critical, high-precision items for the aerospace, oil and gas and nuclear sectors, UK industry must invest in the latest technology and manufacturing methods, and a highly skilled workforce, to be able to compete for opportunities that are increasingly being opened up to a global supply chain. Contracts for more risk-averse projects will certainly offer UK engineering firms opportunities during development and early production. Up-skilling remains a constant challenge and, to this end, collaboration with government and industry bodies, universities and right down to schools level, has proven beneficial to help develop the pipeline of necessary capability. Robust, lean performance is vital to UK industry success – we take this very seriously as evidenced by our SC21 award. The boosting of UK manufacturing relies on its ability to provide world-class performance.

The revival of UK manufacturing is apparent. The global economy and expansion of advanced manufacturing has revitalised the sector, with many companies returning production to the UK. Factors contributing to excellence within the supply chain are key and help UK manufacturing keep ahead of the curve. Effective software solutions are critical to the development of businesses. The ability to keep in front of the competition efficiently and transparently are key factors in delivering better customer service and keeping overheads to a minimum. Intelligent IT manages business processes, allowing transparency of information in real time. Apps, tablets and remote devices lead to smarter transactions and automation allowing informed decision making. Business process control and ERP solutions provide the mechanism to allow UK manufacturing to succeed.

The heart of British manufacturing beats with employers of many sizes – manufacturing SMEs and their associated supply chains. SMEs are creative, innovative and dynamic, employing almost half of the entire UK manufacturing work base and presenting the greatest opportunity for UK growth. More needs to be done to support SMEs in accessing the right skills and training programmes to meet business demands, at an affordable price and at a high enough quality to add value to business. In times of hardship it is the niche, technical and high-level skills programmes which are seen as not cost effective and often withdrawn – but in fact the opposite is needed. SMEs need to take on more apprentices and use skills as an improvement tool to support growth and productivity. Proskills Academy offers skills and training to facilitate a future where manufacturing can once more be “Great” in Britain.

Britain is one of the most innovative and design-led countries in the world, and our manufacturing base is buoyant, a fact that is assisting greatly in the rebalancing of our economy. There are many valuable government-led initiatives and funding available for us to continue to grow our R&D base, improve our efficiencies and boost the overall performance of our sector. However, the delivery mechanism is failing with not enough information getting through – especially to SMEs. Also, too many providers are being paid to deliver the funding/training on offer which is reducing the overall impact of what is available to us. Improve this and more can be invested in company-led apprenticeships, as the barriers that stand between where the money comes from and those that will use it to the best advantage for the industry, our businesses and our future manufacturers are removed.

Manufacture: high value, low volume We are a country of inventors and entrepreneurs; Richard Trevithick made the high-pressure steam engine that powered the industrial revolution! Recognising this, we should export hi-tech and high value. Reshoring works! Invent and manufacture The tools available to the modern entrepreneur are everywhere. For investment use Kickstarter and test the global market. Design with a dynamic, flexible brief, ensuring added value and speed to market. Prototypes can be created using 3D printing. Being agile gets results. Open collaborative partnerships Focus on invention and leave product design to experts. There are companies that can create a product around your idea and then deliver the initial launch quantities, and the ongoing production with engineering support. Basically, more companies helping innovation into production!

info@helander.co.uk www.helander.co.uk

+44 (0)1709 839933 www.pinnula.co.uk

+44 (0)1235 432 030 www.proskills-academy.co.uk

0845 555 5111 www.hone-all.co.uk