TM - The Manufacturer Dec Jan 2015/16 by Optic Juice

SECTOR FOCUS UK Space industry

HOT TOPIC Comprehensive Spending review What does it mean for manufacturers

WORKFORCE & SKILLS To the next step One year on for the first “Faculty on the Factory Floor”

IT IN MANUFACTURING INFOR-mation Everything to come out of Inforum Europe 2015

MANUFACTURING SERVICES Cloaks of servitization How to innovate your service model In partnership with:

Celebrating the best of UK manufacturing at the 2015 TMMX Awards

We are the makers

INTERVIEW Dr Ruth McKernan, CEO, Innovate UK

www.themanufacturer.com | December / January 2015/2016 | Vol 18 Issue 10

EDITOR’S INTRODUCTION

72 SECTOR FOCUS

UK Spa ce indu stry

HOT TOP IC

Compreh Spendin ensive g What doe review for man s it mean ufacturer s

WORKF & SKILLSORCE To the nex One year t step first “Fac on for the ulty on the Factory Floor”

IT IN MANUFAC TURING

INFOR-m ation Everythin g out of Infor to come um Europe 2015

MANUFAC SERVICES TURING

Cloaks of servitiza How to innovate tion service model your In partners hip with:

Celebrating the very best inratUK Celeb UK manu ing the best of facturing manufacturing at the 20 15 TMMX

INTERVIEW

Dr Ruth McK CEO, Inno ernan, vate UK

Awards

We are the makers

www.the manufac turer.com |

Decemb er / Jan uary 2015 /2016 | Vol 18

I’m sure many of you have experienced the sensation before; waking early in an unfamiliar hotel room, this time in Birmingham, with a heavy head and a taste in your mouth that could only be described as something similar to the soaked, sawdust-covered floor of a traditional suburban boozer. Normally I would dread the scenario, but late last month, once any sense of spatial awareness had returned, I took the time to savour what was once again, one of the best nights of the year – The Manufacturer MX Awards. As I reached for the empty water glass I had left beside my bed, it’s now longgone contents consumed sometime in the early hours, I laughed to myself at a particular occurrence which unfolded during the event. Without naming names, a certain manufacturer who up until now was merely a business contact, now had his arm around me, grinning uncontrollably and spitting his praise for what The Manufacturer and IMechE had put together. I was and still am extremely proud of what the small team at The Manufacturer and Hennik Group put together in the form of the TMMX Awards every year. But more so, I am so proud to see each and every one of the attendees, whether manufacturer or not, celebrating the awesome achievements of the sector. Those outside our sector are fed information in the form of percentages from the ONS and the Bank of England, often in terms of growth or decline by a figure less than a tenth. What we see each and every day are the individuals who weld, rivet, design, educate, train, innovate, prototype, manage, quote, sell, build, deliver and everything else that makes these companies some of the most dynamic and exciting businesses of which to be a part. I brimmed with delight seeing companies such as Luton-based motor and pump maker Hayward Tyler, which only two years ago were celebrating after taking home the ICT in Manufacturing award, were this year jumping out of their tuxedos and evening dresses after scooping the Exporter of the Year award along with Highly Commended in People and Skills and Runner Up in the overall Manufacturer of the Year alongside cosmetic manufacturer, Coty Inc.

Issue 10

2 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

These two companies could not be more different in terms of the products they make, but when it comes to strategising their businesses to make sure they are the best at what they do, day in day out, they can find common ground, as can all of the UK manufacturers. Which brings me to the overall Manufacturer of the Year, Lambert Engineering. For those who had not heard of the company before, by the end of the night, it was the only name they could think of. Not only did they take out the major award, but they swept the night taking out three other awards including Leadership and Strategy, Innovation and Design and Customer Focus – an absolutely stellar evening for the business and I must once extend a huge congratulations to the team at Lambert Engineering. But in doing so, I must also extend that to every winner, runner up and shortlisted company. You are the ones throwing this exciting sector into the spotlight and it is critical for all of us that you continue to do so. UK manufacturing has its fair share of challenges, but if the calibre of individuals and forward thinking businesses which were showcased at the ICC in November is anything to go by, the future is looking bright. Congratulations again!

Callum Bentley Editor

EDITORIAL ADVISORY BOARD

The Editorial Advisory Board ’s editorial advisory board provides insight and guidance to the editorial team on a regular basis, helping maintain the relevance and quality of the magazine’s content, both in print and online. The board also provides diverse and expert comment on key industrial developments.

Andrew Churchill

Richard Lloyd

Managing Director, JJ Churchill and Top 100 Exemplar 2014

Simon Edmonds

Ben Taylor

Director, the Catapults Programme

Steve Evans

Manufacturing Engineer, FLAADS Manufacturing Engineering, ’s Young Apprentice of the Year 2014

Deirdre Fox

Director of the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability

Tony Hague MD, Power Panels Electrical Systems, Chairman of the Midlands Assembly Network and shortlisted member of Top 100 2014

Managing Director, Drallim Industries and shortlisted member of Top 100 2014

Pamela Petty

CEO, the Royal Academy of Engineering and Top 100 2015 judge

Campbell Ferguson Director of Strategic Business Development, Tata Steel

Assistant CEO, Renishaw Plc

Dave Mooney

Philip Greenish CBE

Beki Davies

Global Manufacturing Director, Accolade Wines and Top 100 Exemplar 2014

Managing Director, Ebac Group

Andrew Peters

GCS&S Operations Team Leader, Spirit Aerosystems (Europe) Ltd and ’s Young Manufacturer of the Year 2014

Hywel Jarman Director of External Affairs, EEF

Director, Siemens Congleton Facility

To find out more about our Editorial Advisory Board and the work they do to improve The Manufacturer magazine’s offering to its readers, go to: www.themanufacturer.com

December / January 2015/16 | Issue 10 | Volume 18 | www.themanufacturer.com 3

ABOUT US

Meet the team Callum Bentley Editor

Victoria Fitzgerald Deputy Editor

Callum joined Hennik Research in 2013 as editor of ’s sister publication, the Lean Management Journal, before taking over as Editor of in June. He has a background in news for web and print, working for major regional news organisations in Australia. Callum has a passion for the automotive and aerospace sectors. c.bentley@hennikgroup.com

Victoria joined Hennik Research in January 2014 as editor of the Lean Management Journal after spending three years in New York City as a news journalist for an international online news organisation. As ’s deputy editor her focus is on industrial policy and initiatives driving the future of UK manufacturing. As a former teacher, Victoria has a passion for apprenticeships and education. v.fitzgerald@hennikgroup.com

Managing Director Nick Hussey n.hussey@hennikgroup.com

Editorial IT Editor Malcolm Wheatley malcolm@malcolmwheatley.co.uk

Contributing Editor Ruari McCallion r.j.mccallion@btinternet.com

Reporter Fred Tongue

Federico Ercoli Industry Editor

Jonny Williamson Web Editor Jonny joined having spent the past three years working as a print and online features journalist for global media outlets covering manufacturing, commercial aerospace and business leadership. Jonny is responsible for boosting and updating ’s online presence with a strong focus on community engagement. j.williamson@hennikgroup.com

Federico joined Hennik Research after having spent two years working as a producer, presenter and editor for international media outlets’ online and mobile platforms. With a background in international news, business and tech, he is responsible for ’s multimedia production and is passionate about the food and drink industry. f.ercoli@hennikgroup.com

f.tongue@hennikgroup.com

Sales & Marketing Head of Marketing Kate Birinder k.birinder@hennikgroup.com

Sales Manager Sarah Hough s.hough@hennikgroup.com

Telesales Manager Deborah Sowman d.sowman@hennikgroup.com

Henry Anson Sales Director

Tarquin Hussey The Boss

Henry is responsible for Hennik Research’s commerical activities, developing new concepts and products for ’s readership. He has vast international experience having set up offices across the globe and is keen to build a bridge between the manufacturing community and the service sector which supports it. h.anson@hennikgroup.com

Rescued from Battersea Dogs Home, Tarquin has always been part of Hennik. He can often be found asleep in his bed or attempting to raid the bins after lunch! He loves to chase squirrels in his spare time but says his favourite past time is enjoying a cuddle with anyone who happens to be passing. He is well travelled, having been to four countries, and is very much The Boss of the office!! info@hennikgroup.com

Events & Operations Event Production Manager Eva Lindsay e.lindsay@hennikgroup.com

Operations Manager Grace Gilling g.gilling@hennikgroup.com

Awards Manager Laura Williams l.williams@hennikgroup.com

Design In order to receive your copy of email memberships@hennikgroup.com, telephone +44 (0)20 7401 6033 or write to the address below. Neither The Manufacturer nor Hennik Research can accept responsibility 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.

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

Elizabeth House, Block 1, Part 5th Floor, 39 York Road, London, SE1 7NQ Tel: +44 (0)207 401 6033 Fax: +44 (0)844 854 1010

info@hennikgroup.com www.hennikgroup.com

Art Director Martin Mitchell martin@opticjuice.co.uk

Designer Alex Cole alex@opticjuice.co.uk

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

December / January 2015/16

CONTENTS

08 News and regular columns

Manufacturing Services

A summary of manufacturing news and events with commentary on industrial research and policy 24 Out & About travelled far and wide this month, visiting BOC’s new acetylene plant in Immingham, Delifrance in London, MOOG’s new engineering facility in Tewkesbury, and even to Dresden to see Jungheinrich’s new forklift refurbishing facilities 30 Best of Online What you wanted to read most about ’s November website 32 Hot Topic: The Autumn Statement Jonny Williamson outlines November’s Autumn Statement and its implications for UK manufacturing 33 Live Special Feature brings you the best bits from its annual flagship event Live, including coverage of the The Manufacturer’s Annual Leaders Conference, The Manufacturer Top 100 cocktail reception; and the much anticipated highlights from The Manufacturer MX Awards 2015 50 Sector Focus: Breathing Space Ruari McCallion takes a giant leap into the UK space industry, examining the intricacies behind the quietly flourishing sector 56 Interview: Grow with me ’s editor Callum Bentley catches up with Innovate UK’s CEO Ruth McKernan about how supporting SMEs is key to UK economic growth 60 60 second interview: Richard Peckham, Business Development Director (Space) Airbus Defence and Space UK discusses the UK’s involvement in down-toearth space projects

74 For the good of the customer: Siemens Customer Services Business Development Manager, Graeme Coyne, weighs in on the firm’s position in the services landscape 75 The many cloaks of servitization: Tim Baines, Professor at Aston Business School, provides insight into the common message of innovation of services and its impact on manufacturers

PILLAR FEATURES Manufacturing Leadership 62 Learn to lean: Lean Management Journal editor Fred Tongue looks back over a year of lean and turns to face the future 64 Leadership through deeds, not words: Liz Skelton, Chartered Member and Vice President of the Institution of Occupational Safety and Health reveals her take on strategic leadership

Workforce & Skills 68 Employee of the Month: Damien Montagne, European Sales Manager, Loadhog Ltd 70 To the next step: Victoria Fitzgerald visits the AME, the first faculty on the factory floor, in Coventry to learn about the progress since its grand opening a year ago

Finance & Professional Services 72 Be prepared: Paul Matthews, Regulatory Partner at DWF LLP advises manufacturers on hefty new penalties under the biggest regulatory change to health and safety sentences since the 1970s 73 The road to finance: Guang Deng, Tax Director at Leyton provides his top tips on navigating the cumbersome world of R&D tax credits

6 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

Manufacturing Technologies 76 Colt conditions: Paul Langford, Engineering Director at Colt International, elaborates the connection between technology, employee engagement and value gained

IT in Manufacturing 78 Infor-mation technology: Jonny Williamson shares the highlights from Inforum Europe 2015, which took place in Paris in November 80 Talk of the Industry: Terry Scuoler comments on the UN negotiations on climate change which are taking place in Paris over two weeks in December

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NEWS www.themanufacturer.com/news

MANUFACTURING NEWS

AMR2016:

UK manufacturers broadly optimistic for the future The Manufacturer published its seventh annual Manufacturing Report, which revealed the second most positive outlook since its inception.

In this year’s report, for the first time, respondents were asked about the Internet of Things (IOT) and it was met with a lukewarm response with many taking a “wait and see attitude”. Servitization was also mentioned in the report and the AMR has set a benchmark from which it will be easy to monitor the future development of servitization. This year has seen 73% of respondents say that 16-year old school leavers were “poorly” or “very poorly” prepared for work, this percentage rises to 77% for 17/18-year olds. Further Education leavers were held in higher regard with a third saying they found them well prepared, over half were still regarded as “poorly” or “very poorly” prepared though. This year has seen 73% of University graduates were more highly respondents say that 16-year old school rated again, with 55% leavers were “poorly” or “very poorly” regarded as being “well” or “very well” prepared prepared for work, this percentage rises to for work. 77% for 17/18-year olds UK manufacturers are broadly optimistic about the future of the British economy in the next 12 to 36 months, with 85% quoted The manufacturing sector has seen a as being “quite” or “very optimistic”. trend where investment is mostly spent Similarly, 86% believe the economy in the “strategic” end of the spectrum. as a whole is being managed “well”, This “strategic” investment is being “moderately well”, or “very well”. In spent on developing new projects, regards to how the government is upgrading systems and automating handling manufacturing in particular processes. The report also shows 70% believe it is doing well (4% respondents believe the government is “exceptionally”, 12% “very”, and 54% handling the economy well but are less “moderately”); with the other 30% impressed with the way the government is approaching the manufacturing sector. less positive and 10% believing the he 2016 Annual Manufacturing Report (AMR) shows how resilient and optimistic British manufacturers are, despite international and domestic challenges over the past 12 months. Despite the overall feeling of positivity for the future, manufacturers are much more negative about skills in the sector. When asked whether or not they thought enough was being done, 84% of respondents believe that not enough is being done to make manufacturing an attractive career choice. The vast majority of firms reported that those they had employed in the past two to three years were “poorly prepared” for the world of work.

8 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

government is handling manufacturing “exceptionally poorly”. Automation was a major theme in this year’s report with productivity a continuing concern among manufacturers. Just under half of those surveyed said they were currently investing in automation and 21% saying that they implemented a major project last year. The report says that almost two thirds of UK manufacturing businesses committed to a major automation in the last two years. Spending on ICT has continued to increase with 61% of firms saying that they are spending more this year compared to the previous year, which is also the second-highest level the report has ever seen. Over the next 12 months 48% of respondents said they expect to spend more in the next twelve months. Despite this we have seen ICT investment was higher than expected over the last four years.

FURTHER INFO: To see the download the full report please visit: bit.ly/AMR2016

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NEWS www.themanufacturer.com/news

Plug pulled on Business Growth Service

Manufacturers have strongly criticised the closure of the Business Growth Service, announced as part of the Chancellor’s 17% spending cut for the Department of Business, Innovation and Skills.

ncorporating the respected Manufacturing Advisory Service (MAS) and the Growth Accelerator programme, the Business Growth Service (BGS) has successfully supported more than 28,000 small and medium-sized business across England since 2012. As a direct result of this support, the SMEs have experienced growth four times faster than their counterparts, adding £4.8bn of gross value add to the UK economy and creating 110,000

Nine out of 10 recipients of support said they would recommend BGS, and 94% of business leaders indicated that their business is more likely to grow as a result of the support they received

MANUFACTURING NEWS

jobs – the equivalent of 6% of all jobs created during the last parliament. A statement on the BGS website declares: “As part of the Spending Review settlement, the Government has decided to wind down the national delivery of the Business Growth Service.” The service closed to new applicants on November 30 at 23:59; however all contractual commitments will be honoured as long as “all support and related activity” is completed by March 31, 2016. According to BIS: “This decision does not in any way reflect concerns about the performance, quality and value of the service. “It is one of the decisions that the Department has taken to generate the rapid savings required by its Spending Review settlement.” Nine out of 10 recipients of support said they would recommend BGS, and 94% of business leaders indicated that their business is more likely to grow as a result of the support they received. Sources close to have said that 60 dedicated front-line manufacturing advisers would be made redundant, with the severance packages expected to be footed by BIS. Delivering his Spending Review and Autumn Statement to the House of Commons on November 25, Chancellor George Osborne noted that the budget for BIS would be reduced by 17%. However, he made no specific indications that the BGS would be culled or that jobs were at risk, leaving staff reportedly feeling shocked upon hearing the announcement. Chairman of Shropshire-based Advanced Chemical Etching, Alan Rollason noted that the Chancellor’s decision showed that the Government understood “nothing about the day-to-day struggles of running a small business.” He added: “I know many businesses around the Midlands that have benefitted

10 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

from the help and support of MAS, and who would not have survived or developed in the same way. “It is just another kick in the teeth for manufacturing from a Government that has no idea of manufacturing’s contribution to our country’s wellbeing, both in terms of wealth creation and the jobs it creates.” Chairman of the Black Country’s Kimber Drop Forgings, Larry Joyce, commended the work of MAS, describing its advisors as being “proactive” and having the right contacts “to make things happen”. Joyce added: “[Its closure] is a terrible indictment of the Government that they are risking the regeneration of industry, which is still in its infancy.” The closure of BGS is expected to deliver annual savings of £84m. BIS told that the Government is investing in 39 Growth Hubs, giving them ownership of how they support local business to start-up and expand. Up to £12m is to be made available in both 2016-17 and 2017-18 to embed Growth Hubs in every Local Enterprise Partnership (LEP) area across England.

NEWS www.themanufacturer.com/news

Furthering A women in engineering The everywoman Academy hosted its annual event, Advancing Women in Engineering in November 2015 at the Royal Academy of Engineering in London.

wide crosssection of female representatives from the manufacturing community gathered together to listen to keynote speeches from inspiring women pursuing successful careers in engineering. Farringdon Station project manager, Linda Miller, who advised an eager audience to “kick yourself in the ass and trust your judgement” delivered the first keynote of the day. Miller was followed by Jacqueline Castle, A330neo wing chief engineer for Airbus who highlighted that it was important to recognise that your future lies in “your own hands”, as

well as, Jo Salter, Britain’s first female jet fighter pilot. The event was a one day career conference for women in engineering, packed with insight from leading women in the industry and guidance from everywoman learning and development experts. The conference’ aim is to teach strategies to build confidence, and provide guidance on combating stress and improving workplace relations. Co-founder, Karen Gill MBE said: “It’s becoming a much more inclusive conversation throughout each sector, in terms of getting the best out of all talent. Every person here today can do something, even if it’s only tell one other person about the great career that they are having. It’s about outreach. Often women don’t think of themselves as role models and young women especially don’t. Young girls need to see young women that have only been out of school three or four years because they can relate to them.”

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MANUFACTURING NEWS

Electrical Systems Control & Automation Solutions

DATES FOR YOUR DIARY JANUARY The National Manufacturing Conference

& Exhibition, Dublin. The inaugural National Manufacturing Conference & Exhibition will be held in the Aviva Stadium on the 26th of January 2016. The theme of the event “Increasing manufacturing competitiveness in a global economy” will bring together key decision makers from Irleand’s food, beverage, pharmaceutical, life sciences, medical, chemical, electronics and engineering sectors. Keynote speakers will address delegates on topics directly affecting our ability to compete for business on a global stage. Register for the event here: http://bit.ly/1NBdcGr

FEBRUARY Southern Manufacturing & Electronics

9-11

2016, Farnborough. Visit the UK’s largest regional manufacturing technology, electronics and subcontracting exhibition. The event showcases thousands of engineering and electronics solutions on your doorstep and provides a full programme of free technical seminars supported by SMS, MAS-SE, Engineering Solutions and Electronics Sourcing. www.industrysouth.co.uk

EEF National Manufacturing Conference 2016, London. Join hundreds of manufacturers of all sizes to network and find new business opportunities. The conference will allow you to share practical solutions, discover how to tackle the productivity slowdown, learn how to overcome obstacles to exporting, debate the UK’s future in the EU and the consequences of an EU referendum, vote in interactive sessions and question our panel experts.Confirmed speakers include Baroness Brady CBE, Steph McGovern and Edward Naylor.

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UPCOMING EVENTS Connect with our events team on twitter: @YourTMEvents. For general enquiries or to book your place, email events@hennikgroup.com or call us on 020 7401 6033 (opt 3), stating which event you would like to attend and your contact details.

AUTOMATE UK 2 MARCH 2016, WEST MIDLANDS Speed, repeatability and efficiency of well-maintained automation equipment are necessary to remain competitive in the global market place. As consumers are placing more emphasis on customisation and flexible delivery times, manufacturers need to be more responsive with leaner supply chains. Join the Automation Advisory Board Thought Leadership Network (AABTLN) for its annual conference, Automate UK to gain insight into the world of automation, as well as, the opportunity to benchmark against the most innovative businesses in the industry. The first 50 members to join the AABTLN can attend the conference for FREE. themanufacturer.com/automateuk #AutomateUK

CONNECT CRM VARIOUS DATES, VARIOUS LOCATIONS Connect CRM is the premier event for companies looking to enhance their knowledge in customer relationship management. The Connect CRM event will discuss both the importance of CRM, the benefit the system can bring and how best to select and implement a solution suited to your business. Connect events offer delegates the opportunity to conduct months of research in a single day. connect-crm.com #ConnectCRM

CONNECT ERP

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VARIOUS DATES, VARIOUS LOCATIONS

Exclusively for companies looking to implement or upgrade their ERP system. Connect ERP has changed the way UK businesses approach software selection by minimising the overall time and effort involved in qualifying potential enterprise software vendors. This unique event offers a one-of-a-kind opportunity for you and your team to meet the leading enterprise software providers one-toone and hear from other companies that have successfully implemented ERP.

Business Intelligence is having a profound impact on the economy and business models. One of the challenges of BI is knowing how to use it. Connect BI gives you an exclusive opportunity to meet directly with leading vendors to discuss your BI needs and problems. Also, hear practical case studies from companies that have successfully implemented a BI project. Attend Connect BI to kick start your shortlisting process.

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TO SEE A FULL EVENTS LISTING PLEASE VISIT: THEMANUFACTURER.COM/EVENTS OR SEE PAGE 27

14 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

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Airbus Group has appointed Rickard Booson to run strategy and performance within its communications team. Booson, who was previously VP, head of future trends & intelligence at Airbus Group, joins the newly-formed seven-strong comms leadership team headed up by

ANTHONY BIGGS

Rainer Ohler. The team is also made up of Yves Barillé, head of Airbus Helicopters comms, who takes on additional responsibilities as head of international communications coordination in emerging countries; Véronique Creissels, head of communications at Airbus, will

now lead the digital transformation for the group’s communications as head of digital; Dirk Erat, head of communications at Airbus Defence and Space, will integrate the group-wide news and media teams in addition to his current tasks.

Biggs takes on the role following the retirement of long standing ETG and former Hardinge RSM Jack Carter and is looking forward to the challenge. Biggs was previously employed by high-end

German CAD/CAM solutions specialist Tebis and most recently as an area sales manager with DMG Mori Seiki.

ETG

The Engineering Technology Group has appointed Anthony Biggs as regional sales manager. In his role, Biggs will be looking after London and the Home Counties. A time-served engineer,

PETER BIRCH AND PASCHALINA PAPADOGKONA Lancashire-based pet food manufacturer, Pets Choice has bolstered its expanding team with two new recruits. Peter Birch joins the company as head of operations, and has previously

CLAIRE JAKOBSSON

Pets Choice

worked for high-profile brands such as Soreen and Greggs. Birch said, “Pets Choice has ambitious and exciting growth plans for the future, which is something I’m incredibly excited to be a part of.” Paschalina

Papadogkona, formerly of Butcher’s Pet Care, will take on the role of product development manager.

EEF

EEF has appointed Claire Jakobsson as its new policy head for climate, energy and environment. Jakobsson will take over the reins from Gareth Stace who will become director of UK Steel. Jakobsson will be leading a team of three policy experts and will be

ADRIAN MOORE

APPOINTMENTS

responsible for advancing the interests of manufacturing in the environment and sustainability space. She will also be key in shaping EEF’s stance and support for manufacturers on issues such as the Business Energy Efficiency Taxation Review, the Energy Intensive

Compensation Package and the reform of the EU Emissions Trading Scheme. Jakobsson has a BSc in Veterinary Science and also holds a Graduate Diploma in Law.

experience in the industry, Moore succeeds Peter Digby, who steps into his new role as executive chairman. Moore will take over the day-to-day running of this advanced engineering business,

while Digby will continue to manage the main board of directors, concentrate on corporate strategy, and focus on sales and support of key international motorsport customers.

Xtrac

Adrian Moore has been appointed managing director at transmission technology specialist Xtrac. Previously occupying the role of technical director, Moore has more than 20-years’

To notify The Manufacturer of your company’s appointments, please contact Victoria Fitzgerald at: v.fitzgerald@hennikgroup.com or: 0207 401 6033

HENNIK RECRUITMENT:

Tel: +44 (0)20 3111 1491 Email: h.bedevi@hennikgroup.com Twitter: HennikExec

WWW.HENNIKRECRUITMENT.COM 16 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

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2 March 2016 | West Midlands For more information and to register visit:

themanufacturer.com/automateuk Growth through automation Innovations in industrial automation are revolutionising manufacturing. As the equipment available becomes smarter, faster, increasingly efficient and cheaper; forward thinking businesses are taking advantage of automated processes and systems to satisfy customer demand and improve performance. Automate UK will provide the opportunity to learn from and benchmark against the most innovative businesses in the automation space. Attend the event to learn more about everything from industry 4.0 to automation equipment and MES/ERP integration with practical case studies and round tables.

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Responsible redundancies

Lisa Gettins, Equity Partner for Employment at BPE, advises on the importance of strategic redundancy planning and the HR1 form.

adly all too many manufacturers are familiar with the concept of the HR1 form and requirement for its completion. The statutory requirement to notify the Secretary of State for Business, Innovation and Skills if an employer proposes making 20 or more redundancies during a 90 day period at one establishment has been in existence since 1992. The recognised way of doing so is by completion of the HR1 form. Theoretically, failure to notify has always had the potential to attract criminal charges, but in reality, the filing of the HR1 has become an administrative function given little thought. So it was surprising when the former directors of City Link were charged with criminal proceedings. The newspapers were quick to highlight what was seen to be a victory for the “common man”, those workers affected by the collapse of their employer, who were made redundant with little or no notice. The legislation requires that criminal proceedings can only be brought for a failure to file a HR1 with the consent of the Secretary of State. BIS prosecutors alleged that no HR1 form was filed by the USC or City Link. Both companies quickly entered liquidation following the announcement of redundancies. The judge dismissed the charges against the three defendants. The Government often has to pick up the bill for compensating staff through the National Insurance Fund in cases of liquidation. In this case, it was estimated to have cost the taxpayer more than £750,000. Unsurprisingly, the Government wishes to clamp down on such a practice. To complicate matters further, it is now for the Court of Appeal to determine whether the obligation to consult collectively arises when an employer is proposing to make a strategic business that will foreseeably lead to collective redundancies, or whether that obligation only arises once the employer has made the strategic decision and is proposing redundancies, making it unclear when the obligation arises, but criminal charges can ensue if the obligation is not met. It is the ultimate responsibility of the directors to ensure proper procedures are followed. Directors need to be made aware of their obligations and HR teams need to ensure that the approach to redundancy consultation is strategic and up to date with current, changing, case law obligations.

18 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

RS COMPONENTS

The balancing act

Jarn Gill, Head of Corporate Sales at RS Components weighs in on the challenges manufacturers face as they strive to safeguard continuous improvement efforts throughout their businesses.

anaging the company’s cost base effectively, while investing in the business to ensure continuous improvement will remain one of the biggest challenges facing manufacturing in the year ahead and getting the balance right will be essential to success in the competitive landscape. UK manufacturing has a strong part to play in the global economy. Companies need to be aware of constantly changing demands and adapt accordingly. A flexible approach will determine how well you are able to manage your cost base and therefore how successful you will be. MRO procurement is complex and departments working together will fuel progress. Those organisations that align their operations, finance and procurement functions will benefit with improved efficiency and savings. This means streamlining processes; and choosing fewer, better quality or energy-saving products to minimise UK manufacturing has maintenance, reduce energy a strong part to play in the costs and global economy frequency of replacement. Also, dealing with multiple suppliers to save on product costs is counterproductive, as the downtime in dealing with the varying processes of these suppliers when it comes to ordering and invoicing negates any saving that can be made on product. The manufacturing sector is big. Businesses need to network and connect with suppliers, to share and learn best practice by engaging with different companies, especially around the procurement process to help improve their own business.

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Letters to the editor

PRODUCTION LINES

Letters to the Editor Chris Greenough Director of Salop Design & Engineering

Cathie Hall Managing Director K3 Syspro

Large employers in the UK will have to pay an “apprenticeship levy” amounting to zero point five percent of their total wage bill to encourage large companies to offer quality training to young people. But 98% of employers will not pay – so does this encourage all employers to look to training to close the skills gap? Whilst upskilling your existing workforce is one way of closing this skills gap, undoubtedly one of the most rewarding ways is through apprenticeships. This allows business to pass on key, core value skills, and allows the apprentices to “learn whilst they earn”. The higher education route does not suit all youngsters, and we need to be clear in the way we show them the options. The practical, apprentice route may give many a real opportunity to thrive in The higher education a different route does not suit all environment and build a career. youngsters, and we need to If this levy be clear in the way we show leads to more training them the options opportunities for young people, then this - as a starting point - must be a good thing. But, there needs to be proper and rigorous policing of not only the way the levy funds are spent, but also the value of training provided and the jobs created through the policy. I would look to see more funds, potentially from this levy, made available for businesses to work with schools, and this funding could give schools the time to make sure their students have the best options for their individual futures…not solely looking at exam results, but how students end up in full time jobs that can help push the UK economy forward. We now need to push forward with a policy, that is truly led by business, fed through training providers and supported by schools and colleges so we get the training and people we need, and young people see manufacturing as a career.

The biggest problems for many manufacturing businesses are making decisions, understanding costs and integrating their supply chains. During a time when the manufacturing industry is accelerating at a rapid pace, manufacturing companies need to get these three things right if they are to embrace future technologies and changes. The key point of Big Data in manufacturing businesses is having people who can work with data and are empowered to make decisions based on it. It’s interesting that there are now The key point of Big a wide range of data science Data in manufacturing masters businesses is having degrees to people who can work with choose from at UK universities, data and are empowered a course unheard of to make decisions based five years ago. on it This shows the importance of data interpretation for the modern day manufacturing business. There are so many ways that manufacturers can use Big Data to their advantage, such as understanding customer buying patterns, increasing revenue by providing recommended products, or using Big Data to understand production efficiencies and find new ways of employing manufacturing technology to lower the cost of production. It can also be used in combination with other megatrends such as the IoT, to transform the experience for the customer. If the sector is to truly embrace the possibilities of Industry 4.0, it needs to start by using data more efficiently and manufacturers must empower their people to correctly analyse and utilise Big Data.

20 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

Manufacturing Services Thought Leadership Network

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ARKWRIGHT SCHOLARSHIPS TRUST

Recognising the future of engineering

Hennik’s CEO, Nick Hussey congratulates Benjamin Noar on his scholarship

Future leaders of the engineering sector have been awarded at ceremonies in London and Glasgow at the Arkwright Scholarships Trust annual awards where 397 sixth form students were given the accolade. reports.

he Arkwright Engineering Scholarships is a scheme to support the most talented young STEM (science, technology, engineering and maths) students in UK schools to help make sure that high potential young people stay engaged in the STEM careers pipeline. The ceremonies were supported by the Institution of Engineering and Technology and the Rail Industry, spearheaded by Network Rail, Carillion and Colas Rail. This year’s cohort of scholars came from all parts of the UK with a record number of scholars being female.

The scholarships were awarded by Naomi Climer, resident of the Institution of Engineering and Technology 2015/16 in London and Hugh Gill, chief technology officer of Touch Bionics in Glasgow. Dr Martin Thomas CEng FIET, chief executive of the Arkwright Scholarships Trust said: “I have been hugely impressed by the creativity, technical skills and leadership prowess of the young men and women receiving their scholarships this year. “It is well-documented that the country needs 100,000s of new engineers to take the economy and society forward.

22 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

But some of these newly-trained people need to also act as outstanding leadership beacons within industry and academia. The Arkwright Engineering Scholarships are the first step on that road to achieving such a vital position within UK engineering. Congratulations to our 397 new Scholars.” Scholars are chosen for their potential as future engineering leaders by assessing their leadership skills, along with their practical and academic skills in STEM. Skills are gauged through an assessed application form with a teacher’s reference, an aptitude exam and a university-based interview. The scholarships support students during sixth form and encourage them in to top universities or higher apprenticeships. The scholarships give the recipients an annual financial reward, as well as, an award for the scholar’s school, industry visits and mentoring to enhance a scholar’s experience of engineering along with gaining real-world, contextual experience. The scholarships are supported by almost 200 sponsoring organisations including: commercial and industrial companies, industry regulators, universities, professional institutions, trade associations, training boards, Worshipful Companies, all three armed services, charitable trusts, personal donors and schools. There were also three undergraduate scholarships, worth £12,000 each, awarded at the ceremonies. These were funded by The Reece Foundation and The Eranda Foundation. The Arkwight Scholarships Trust is an independent charity that aims to identify, inspire and nurture future leaders in engineering and technical design. The Arkwright Scholarships Trust has been supporting young engineers since 1991 and has awarded over 4,000 scholarships in that time. Arkwright also awards a few undergraduate scholarships each year that are available to existing A-level scholars.

Recruitment

Hennik Recruitment – Engineering Jobs Manufacturing Engineering Manager South East This role is responsible for all engineering functions, to ensure that operational requirements are met. Scope and experience requirements include:* Management of Production Engineering function. * Management of capital projects, engineering budgets, overhead costs. * Day-to-day engineering support * Deployment of maintenance strategy. * Environmental, Health & Safety and Quality performance. * Input in meeting required customer service at lowest cost whilst meeting specified quality. * Achieve competitive advantage by improved efficiency, OEE and by leading CI & Lean projects. * Coach and train staff members in new processes. Ensure skills match business requirements. * Ownership of NPI, SMED, engineering & production methods. * Ideally educated to Degree Level or equivalent in an appropriate engineering discipline. * 5+ years of experience in a similar role in a modern industrial environment required.

Manufacturing Engineer

Multi-Skilled Facilities / Maintenance Engineer

Kent

Electrical biased electro/mechanical background. PLC programming skills, ideally Omron / Siemens. Knowledge of Lean manufacturing, CI tools and techniques. Engineering Apprenticeship with Technicians certificate or ONC/HNC + 4-5 years minimum experience. To provide day to day engineering support to production including the following:-

To support factory facilities engineering function with day-to-day engineering support and equipment maintenance, assist in the management of assets, capital projects, Quality, H&S, NPI, CI, Lean initiatives.

* Ensure compliance to the policies & legislation. * Assist with customer service at lowest possible cost and specified quality. * Identify productivity and cost saving opportunities, and support of capital projects. * Support management of maintenance and engineering functions to ensure optimum operation. * Assist in the management of assets and ensure Health & Safety requirements are met. * Ensure consistent and agreed engineering working methods are employed across the site. * Assist with budgets and capital projects. * Support NPI, help to identify new equipment and tooling requirements to ensure product quality, costs and launch dates are achieved.

Skills and experience requirements as below:* Engineering Apprenticeship with Technicians certificate or ONC/HNC * Facilities / maintenance engineering experience – Industry or Service sector. * Multi skilled with a mechanical engineering bias and/or electrically competent up to 415V AC * Experience with “Building Maintenance Systems”. * PLC knowledge would be an advantage. * Experience and certification in the following skills: Steam plant, Refrigeration (HVAC), Compressed air & drying systems, Water treatment including effluent plant, Dust extraction systems, Water distribution systems, Project management.

www.hennikrecruitment.com | T: +44 (0)20 3111 1491 | E: h.bedevi@hennikgroup.com | @HennikExec

’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 in November.

Cooking with gas Federico Ercoli travels up north to Immingham and tours BOC’s new acetylene plant.

OC’s new plant houses 22km of instrument cabling, 12km of power cabling, 5km of piping, more than 8000 welds and 272 instruments. These figures are impressive, particularly as BOC’s new plant is an addition to the 1993 site and not a stand alone facility. BOC, member of the Linde Group and the biggest industrial gas company in the UK, has invested £35m, including £1.5m from the Regional Growth Fund in the development of the new plant. Entirely dedicated to the production of acetylene, the facility has a fully linked communication system that allows the production software, stock control and cylinder tracking to communicate with each other in real time. This allows BOC to successfully support a wide market that includes automotive, defence and medical industries. Managing director, Sue Graham Johnston said the investment already proved fruitful and that it will allow the company to grow, “For us it was a great opportunity to invest in the local community, to add jobs to the local area and to secure a supply chain of acetylene for the UK going forward.

We could be self sufficient for acetylene for all of Great Britain

“From an output perspective, the plant is capable of delivering 100% of the requirements for the UK and Ireland, so technically we could be self-sufficient for acetylene for all of Great Britain.” Built on a relatively small piece of land in BOC’s site in North East Lincolnshire, the plant is not only an engineering first, it’s also aligned with the company’s commitment to protect its local environment, as it’s built on a Site of Special Scientific Interest (SSSI). But that’s not all. The new site allowed BOC to further expand its workforce and empower younger people to fill the recurring skills shortage in the industry. “We have invested in a graduate programme and in an apprenticeships programme. We work very closely with the government and with engineering agencies like IMechE to get more emphasis on STEM graduates and generate interest in engineering, so we can build that pipeline going forward. “In light of the recent job cuts in the steel industry, we’ve been working [...] to pick up some of the apprentices that were displaced through that process,” she adds. Over a total of three sites in the UK, BOC now has 18 active apprentices on a three year programme. “It’s something that we have been investing in. They will work on multiple sites in multiple projects, many of them here, to learn about our processes and then be able to bring those skills forward.” With over

24 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

Acetylene cylinders filling line at Immingham site

The new acetylene facility at BOC in Immingham

100 years of experience, operations in 70 countries and over 50.000 employees worldwide, it is reassuring to see large manufacturers like BOC do not lose focus on future generations.

OUT AND ABOUT

The new line has an oil-fired thermal oven with Italian Serpentino stones for better heat transfer

Breaking bread

Federico Ercoli breaks bread with Delifrance to learn more about its major investment and the latest trends in rustic bread.

t will come as no surprise to learn that the food industry is the UK’s largest manufacturing sector. It accounts for 15% of UK GVA and for 15% of the national manufacturing workforce. What is unprecedented though, is the latest surge in demand for premium and artisanal products, in particular within the baked goods sector. IRI data from July confirmed the instore bakery bread market alone is worth £612m. “With the surge in interest in baking and customers being as discerning over their sandwich carrier as their sandwich filling, we are experiencing an unprecedented demand for affordable, rustic breads,” says managing director, Ian Dobbie. So, it seems the six-year, £30m investment programme the company just completed at its Southall facility is not short of ambition. Delifrance UK, founded in 1988 and part of the NutriXo Group since 2001, now offers three bread ranges after having completely revamped the site acquired in 2009 from Le Pain Croustillant. The company installed a brand new stone baked bread line and included a new innovation and development bakery area, as well as, added a 500-pallet dry goods warehouse with automated

management system. If it sounds impressive; it’s because it is. The target? Dobbie, who has been with the company for 15 years, is adamant. “We didn’t want to develop in areas that were very commodity driven with no added value. [...] We never set out to be the lowest cost producer in the area, our objective is to add value and innovation to the sector,” he tells me. However, innovation can come with a cost, and considering the level of automation in the plant, I wondered if employees were the ones that eventually paid the price. “There’s no doubt, if you look at the numbers of operatives required on the shift on the new line compared to the old line, it is considerably less but it has to be at a degree for us to remain competitive in the market,” Dobbie explains. “We created roughly 40 new positions with the new line and I’m pleased to say, the majority of those people were recruited internally,” Dobbie adds. So the machines haven’t quite taken over just yet, but it is undeniable, people need to be trained, and luckily, this is something Dobbie takes pride in doing. “We do invest in people and we invest in their skills, and the majority of time we’re getting return in that investment

We never set out to be the lowest cost producer in the area, our objective is to add value and innovation to the sector Ian Dobbie, Managing Director, Delifrance UK

back by having them retained and committed to the business,” he says. Dobbie has no doubts about the commitment that drives Delifrance’s workforce, “While driving off from the factory at 6 o’clock on a Friday evening, I have to go home thinking that the people here want to do their best for the business, that they’re going to work in a safe way and to the highest level of food and safety standard. If I didn’t think that I wouldn’t drive out of the gate in the evening.”

December / January 2015/16 | Issue 10 | Volume 18 | www.themanufacturer.com 25

OUT AND ABOUT

A new home for the future MOOG unveiled its new engineering facility in Tewkesbury and Federico Ercoli went to see it.

fter developing the first electrohydraulic servo valve in 1951, William C. Moog managed to implement his creation on about half of all US fighter planes and on more than 70% of all guided missiles by 1954. By 1960 the company’s total sales accounted for more than $10m and now, the Moog Industrial Group operates over 40 locations worldwide and reported sales for $591m in 2014, with Moog Inc. reaching $2.65b in sales. On October 15th Moog inaugurated its new engineering, production and service facility in Tewkesbury, Gloucestershire. This, the company claims, will allow it to manufacture a major part of its precision control systems aimed at the aircraft, medical, space and defence industries in one site. “We had an opportunity two years ago when the lease of our current facility was coming to an end, and at the same time we had two other parts of Moog in

The most challenging thing is keeping ahead of technology Chris Curr, Entity Manager, MOOG

the UK that we decided to consolidate into one building, so this was a once in a lifetime opportunity,” says entity manager Chris Curr. The new building is poised to deliver at least 2215m2 of manufacturing space with an additional 1863m2 of office space. This will support both hydraulic and electric motion control applications and service in industrial markets such as motorsport, test, industrial automation, and energy, whilst providing sufficient capacity for future expansion. “The building has given us an opportunity to refresh everything we do, particularly in the production areas,” Curr confirms. “We use lean techniques to set up the flow through the areas. Also, being able to have a brand new facility where we’ve put a lot of energy-saving processes in place is helping us to set out for the future,” he added.

26 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

The new building accommodates approximately 100 people, according to MOOG

Guests witness a live demonstration of MOOG’s components in action

Well-known for designing and manufacturing the equipment that controls the centre court’s retractable roof at Wimbledon and for being a leader in motion control products for Formula 1 racing cars, Moog’s future is pointing in the right direction as the company is considering the implementation of pivotal technology, which is part of the latest manufacturing trends. “I think the most challenging thing is keeping ahead of technology. We’re in a period now where people are talking about the internet of things and it’s something that we see as a big opportunity for Moog. “It certainly fits with our technology and so it comes down to knowing which things to invest in, which things should we be putting our money on, and making sure that we are aligning that with what our skills and capabilities here in the UK,” Curr says.

@HennikNews

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OUT 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 in November.

Skin lifting Federico Ercoli flew to Dresden to see Jungheinrich’s new forklift refurbishing facilities

uring my many visits to manufacturing sites it is not unusual for me to see forklift trucks roaming around the complexes. Having proved themselves invaluable tools in almost any industry on the planet, forklifts are now the standard for internal logistics and, as it turns out without much surprise, their market is consistently growing. A 2014 report from TechNavio showed that the global forklift truck market will grow at a CAGR of 6.98 percent over the 2013-2018 period. Yes, Modern Material Handling’s list of the Top 20 lift truck suppliers say the combined value is down 3.5% compared to 2014, but companies have confirmed that this is due to unfavorable currency conversions, which often turns gains into losses. The 2014 World Industrial Truck Statistics (WITS) figures on the other hand, showed that global orders and shipments increased by almost 8%, so manufacturers are not in a bad spot. Although, what percentages failed to identify, is the nature of the revenues. To put it into context, it is not widely known that there is a thriving market for refurbished forklifts. This is at the base of Jungheinrich’s latest strategy. Mathias Lentfer, commercial director said: “In the industry it’s absolutely

unique. We are the only company in the sector who’s doing the refurbishment of these trucks. The idea behind this is to offer our customers good value for a premium product. Our products are mostly five or six years old when they come here and when they do, they are in a better than good condition for a second life.” This is the byproduct of a major investment which resulted in the expansion of the existing Jungheinrich site in Dresden. “The idea behind the investment was to carry out our 2020 future strategy and to increase our refurbishment goal of 8000 trucks by 2018. Therefore we needed a big investment to increase the capacity of this plant: we invested 8.1m euros in the last 12 months,” Lentfer said. We are used to refurbished laptops, mp3 players, smartphones and tablets as their quality controls and hardware replacement processes are relatively easy, but refurbishing a forklift is a totally different game. The expertise required put Jungheinrich in a situation where specialists are needed for every single part of the assemble, Lentfer tells me. And, since not even Germany is able to escape the skills shortage, Jungheinrich set in motion a machine that is very familiar in the UK: apprenticeship schemes. “Four or five years ago, we saw this trend and luckily in Germany we implemented a system which we call “ausbildung” (apprenticeships). This means we have a two-way of training people when they’re young: at school they learn the basics then they go in the industry and learn on a daily basis how it really feels and what they have to do,” Lentfer confirmed. Started out as a relatively small company, Jungheinrich has grown globally and consistently over the years,

28 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

It is a little-known fact that there is a thriving market for refurbished forklifts

and what strikes Mr. Lentfer in particular is that at a local level, training or finding skilled people is not the hardest part. Not even refurbishing the actual trucks is. “When you come from a small workshop which started with 600 trucks and then developed into 2000, going now to 5000 you have a mindset in your colleagues. From your team leaders down to the worker. Taking them with you on your journey until the next step and explaining why you have to change, that’s the hardest part.” Lentfer said. But, a rapid look at sales numbers will confirm, so far so good.

If you would like to visit your factory or business, let us know and email the editor at c.bentley@hennikgroup.com

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Tracking your top reads on www.themanufacturer.com last month

BEST OF ONLINE

DIGITALLY MADE. Top Tweets Twitter was set alight during the 2015 TMMX Awards. Here’s what people were saying using #TMMXAwards

What does digital mean to you?

s 2016 kicks off, many firms are contemplating and budgeting for new technological spends, perhaps realising they are in danger of being left behind. Last year, Citrix predicted 2016 as the watershed year for manufacturing, with the industry set to be ‘reinvented’ by trends in areas including automation, 3D printing and big data. The fact that Citrix recommends businesses strive to be data-driven and ‘compete on experiences’ should surprise no-one, yet I am sure for some the focus will solely be on technology, while ignoring the equally important task of finding new methods of customer engagement. This is because the term ‘digital’ means different things to different people. In a June McKinsey & Company article it is suggested that ‘executives must arrive at a common vernacular as to what the term means’. They warn, rather than adopting a herd-like mentality, it would be more effective to focus internally and get the digital-culture right within the company. In a follow up article, authors Karel Dörner and David Edelman make the point that there is no room for uncertainty as, “Business leaders must have a clear and common understanding of exactly what digital means to them, and as a result, what it means to their business.” Are you willing to reexamine and revamp your existing business models? Now is not the time for a conservative approach. Being digital might mean going after new aligned markets or creating new value in familiar territory. You should always ask yourself could digital affect you negatively? Is there room to innovate AND disrupt? Dörner and Edelman suggest four capabilities firms must possess based on customer input: 1. Proactive decision making 2. Contextual interactivity 3. Real-time automation 4. Customer journey focused innovation

30 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

MANUFACTURING, THE NUMBERS

looks at some of the more interesting numbers in the manufacturing news in the past month.

Increase in R&D spending in 2014. Spending on UK R&D also increased for the third consecutive year. bit.ly/1l9jlgQ

The UK could miss out securing

of the worldâ&#x20AC;&#x2122;s space sector and an additional

jobs if government and industry donâ&#x20AC;&#x2122;t step up, warns a new report from the Institution of Mechanical Engineers. bit.ly/1MYY3J3

The number of vehicles Rolls-Royce had to recall after a fault was found in one of its airbags. The recall will give the Goodwoodbased marque the joint title of smallest recall in history. bit.ly/1SLzTWX

0.7% The figure by which UK vehicle production declined compared to October 2014, according to the SMMT. bit.ly/1MGqrke

n b 3 . $1

The value of a new contract issued to BAE Systems by the MoD for the delivery of the fifth Astute Class submarine. bit.ly/1MrCe7T

www.themanufacturer.com 31

Spending Review

Spending Review leaves bitter taste The Chancellor’s Autumn Spending Review has received mixed reactions from several of UK industry’s most senior business leaders.

Chief executive of EEF, Terry Scuoler described the levy as a “blunt instrument” and warned that the Government must, “Work hard to ensure employers are not disadvantaged, and that many smaller and medium-sized businesses are exempted”. Scuoler’s colleague, Tim Thomas – EEF’s head of employment & skills policy, noted that, “While the principle of the levy is not supported by business, the Chancellor’s announcement balances the need to secure future employer funding The Chancellor also announced that to invest in quality apprenticeships at a cash support provided through Innovate UK rate that the employers will be protected, however it will instead be affected can afford.” However, according offered as £165m of new loans to businesses, to both Scuoler and rather than grants Thomas, there are several challenges which must be swiftly overcome before manufacturers can support the levy, investment in the economy”, however principally red tape and who will control contained a “sting in the tail” thanks the funding. to the uncertainty surrounding the To create high quality well trained proposed Apprenticeship Levy. apprentices, the move cannot be a “simple numbers game where Apprenticeship Levy businesses are clobbered to pay for The new Levy of 0.5% on company apprenticeships,” warned Scuoler, payrolls is estimated to raise £3bn adding that the Government’s approach a year and will fund three million apprenticeships, the Chancellor claimed. moving forward has to be a lot more nder a rallying cry of “We are the builders”, George Osborne’s combined Spending Review and Autumn Statement included a host of pertinent industrial measures, covering the economy at large; tax; business; science; education, and the devolution of power. According to CBI director-general, Carolyn Fairbairn this was a “good” spending review for “longer-term

32 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

HOT TOPIC

sophisticated than that demonstrated so far.

Science & innovation

On more solid ground was the welcome news that the science budget has been increased to £4.7bn to favour business and development, with investment on the nation’s network of Catapults due to also rise. EEF’s chief economist, Lee Hopley applauded the move, describing it as “great news for innovative businesses across the UK.” Maintaining the balance of funding between government and the private sector will “help ensure the UK continues to encourage the kind of collaboration that will help innovators traverse the ‘valley of death’”, Hopley added. The Chancellor also announced that cash support provided through Innovate UK will be protected, however it will instead be offered as £165m of new loans to businesses, rather than grants. This is a shift that will need to be scrutinised in order to mitigate any affect it could have on game-changing innovation, particularly among smaller businesses, urged Fairbairn.

Business rates

Many were disappointed to hear that the promised response to the Structural Review of Business Rates was to be pushed back to the 2016 Budget. Fairbairn stated that the current system is based on a “decadesold model” that “no longer reflects economic conditions”, declaring that “alleviating the burden” couldn’t come quick enough. Though the 12-month extension for the small business rate relief scheme was positively received, manufacturers want to see “concrete steps taken” to make the system “simpler, fairer and more competitive” to tackle the cumulative burden upon firms, said Fairbairn. FURTHER INFO: You can read about how the Chancellor’s 17% cut to the Department for Business, Innovation and Skills (BIS) budget will detrimentally impact UK manufacturers on p10.

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A round up of everything to come out of the two biggest days in manufacturing

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THE MANUFACTURER’S ANNUAL LEADERS CONFERENCE

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A host of leading industry figures came together to discuss the trends and influences shaping the future of manufacturing during the UK’s largest event of its kind. Highlighting the circular economy and the opportunity it presents for manufacturers to explore new streams of revenue, the twoday symposium was effortlessly chaired by Warwick Manufacturing Group’s Jan Godsell. The professor of operations and supply chain strategy welcomed the more than 300 attendees by noting that sustainability has been a topic that many in the audience will have picked up on over the past decade and a half. However, the need for us all to become increasingly circular and drive towards a more sustainable economy had certainly grown in prominence over the past 12 months, she continued.

Full circle An apt example of the circular economy is a library, commented Dell UK’s Tim Griffin. “If you borrow, read and return a book, the next person can make use of it, rather than it sitting idle on a shelf in your home,” he said.

fundamentally thinking about the lifecycles of our products,” Griffin urged. His points were picked up by Veolia’s Dr Forbes McDougall, who stressed that too many consider the circular economy to be just “recycling plus”, where in reality, it encompasses far more than that. As McDougall saw it, there are five circular business models that have emerged – circular supplies; resource recovery; product life extension; sharing platforms, and product-as-a-service; which tallied with the subsequent presentation from the Green Alliance’s Jonny Hazel. One thing that became very clear is that the circular economy revolves around taking a “systems approach”, exploring the entire ecosystem and being aware of every element. In that way, the circular economy complements similar shifts in mindset towards the internet of things (IoT), particularly big data analytics.

According to Griffin, the global population is going to swell by a further one billion people over the coming 15 years, and the same again in the 15 years after that, adding colossal additional strains on already overstretched resources and infrastructures.

High-tech disruption

“We live in an incredibly complex world and there exists a real need to re-examine our business models and consumption practices. ‘Take-Make-Waste’ underlines almost every major economy; whereas a path towards becoming circular revolves around sustainable sourcing not only making better use of recycled/ reused materials in our products, but

Harwood is someone who considers much of the value to be derived from analytics, rather than the product itself. The real impact of the circular economy will come from analytics, he declared, transforming how products are used, impacting almost every aspect of our lives, and the various environments we operate in.

Dell’s Nuno Antonio noted that the top industries leading the way in IoT adoption were healthcare, utilities and manufacturing, and stressed the importance of uniting technology and analytics with common sense. “A significant barrier to successfully adopting IoT is the prevalence of internal silos which exist in organisations, between people, departments and divisions,” he commented. Renishaw’s Stephen Crownshaw presentation extolled the virtues of additive manufacturing, explaining that the disruptive technology is so new that “there isn’t a rule-book to tear up”. Taking something with 72 separate components and printing it in a single piece highlights just how important design is, according to Crownshaw. “We [Renishaw] like to think it’s a technology that can work in tandem with more traditional production, not destroy it. [But] this isn’t just changing manufacturing, it’s changing upstream design; one of the biggest issues is training people who are capable of designing with additive manufacturing,” he said.

There are three things required for IoT to work, said Robert Harwood, global industry director at Ansys: the things, the platform and analytics.

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In association with Grant Thornton

Economy matters On the back of 11 consecutive quarters of growth, Santander chief finance economist, Barry Naisbitt, predicted that the economy was likely to continue to increase steadily. “We’ve seen economic growth despite recent troubles, although these issues have possibly affected manufacturing more so than other sectors. The key thing for the economy, however, is investment, and in the past 6 - 12 months, we’ve seen a fairly large pick-up in manufacturing investment,” Naisbitt continued.

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As Tata director, Dr David Landsman put it, UK manufacturing is at a “very real crossroads”; one path leads to “opportunity”, the other sees our nation’s industrial sector become a “footnote”. “We cannot focus on past glories, or be perceived to be doing so. We have to look to the future. The environment is changing rapidly and we have to engage with it,” he said. There are some “encouraging figures” for manufacturing overall, according to Landsman, who added that in some respect, “the picture is actually more optimistic than the figures suggest.” Though he – along with several other speakers – accepted that industry was not without its trials, despite the progress made.

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“Signs of manufacturing growth aren’t consistently strong enough to suggest that rebalancing is long-term, rather than transitory. Industry faces some real challenges, yet there are other nation’s industrial sectors that are facing those same challenges, and have risen to them,” the Tata director stated.

“We cannot focus on past glories, or be perceived to be doing so. We have to look to the future. The environment is changing rapidly and we have to engage with it,”

Change is the only constant A reoccurring theme across the two-day event was that of leadership and change management, though as Grant Thornton UK LLP’s Charles Toosey commented, “Change is not an easy thing to do, you have to deal with the culture in the organisation”. Identifying a problem and fixing it can be quite simple, but actually addressing an underlying issue within an organisation’s culture is much harder, but arguably more important, Toosey continued. To implement effective change you need stimulus; vision; ability; resources; action, and success, picked up Grant Thornton UK LLP’s Neil Barrell.

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“Stimulus is about creating a sense of urgency and inspiring a group with the power to lead. Vision is about clarifying how the future will look, and ability is making sure the end result is deliverable. Resources is about removing the barriers to change, be they human, financial, or otherwise, and it is vital that an action plan exists. Ultimately, it’s vital that success is visible,” he continued. Chief operating officer at Meggitt, David Johnson, highlighted the way that technology can overturn tradition as one of the key drivers of change, stressing that all companies have to “adopt and adapt” to what’s available in that regard.

IOSH’s Richard Jones session outlined leadership’s key role in delivering the forthcoming ISO 450001, a standard which will establish a global consensus on health and safety risk management requirements. Jones highlighted how good health and safety management should be recognised by organisations as integral to sustainability and as an investment, not a cost. “We need to ensure that health and safety gets the strategic resources that it both needs and deserves. Good health and safety…helps save lives and improve reputation, resilience and results,” he said.

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In association with Grant Thornton

On the horizon It was left to EEF CEO, Terry Scuoler, to close the conference with a fitting discussion on the future of UK manufacturing. Scuoler described what lies ahead as “an interesting cocktail of challenge and opportunity”, though he stressed that it wasn’t necessarily a negative concoction. He spoke passionately about UK industry, particularly around inspiration, a word which, to the CEO at least, immediately brought to mind two others – perspiration and leadership. “If inspiration is having the foresight to invest in the areas discussed over the past two days – the circular economy; advanced manufacturing; industry 4.0; our youth, and skills – then let me return to the other word, perspiration. “Investments aren’t necessarily immediately beneficial. Dyson took 15 years to arrive at his multi-billion pound company. By perspiration, I mean quiet, consistent perseverance,” Scuoler commented. He ended by asserting that supporting entrepreneurship and innovation is absolutely vital to manufacturing, and the wider economy, and what industry has needed, needs now, and will always need, is leaders.

Voice of a generation Founder of Gas-Sense, George Edwards delivered a thoughtprovoking presentation on the great myth of manufacturing. As a young person who has recently entered the world of technology and engineering, Edwards takes a keen interest in how industry is presented to young people. Through his start-up, Gas-Sense, Edwards was shocked to discover how his perception of engineering correlated with what engineering actually is, and got him thinking about how the sector is marketed to young people. In comparison with other STEM subjects – science, technology and maths, engineering is a very niche subject, he highlighted, something that, combined with the frequently negative headlines surrounding stories of industry, does little to encourage young people to pursue careers in industry.

messages about industry, but many are approaching it from different angles and perspectives, diluting the overall message,” he added. So what could be done? According to the young entrepreneur, his generation are very interested in working towards something that has a positive effect on society. “Engineering can excel at promoting the human stories involved in it. Cold, hard statistics aren’t going to entice anybody, or warm an individual to the sector’s opportunities. “Engineering is invisible unless it’s visible, we’ve lost the ability for people – especially young people – to understand that a product has been engineered by someone. We need to get that back,” surmised Edwards.

“There are numerous organisations, however, that promote positive

“If inspiration is having the foresight to invest in the areas discussed over the past two days – the circular economy; advanced manufacturing; industry 4.0; our youth, and skills – then let me return to the other word, perspiration.”

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In association with Grant Thornton

FUTURE FLIGHT An exclusive roundtable event brought together senior UK decision makers to debate ways to maximise the global competitiveness of UK aerospace & defence. Hosted by Hitachi Consulting and held in conjunction with The Manufacturer’s Annual Leaders Conference, the roundtable gathered a select group of business leaders from some of the world’s leading aerospace & defence companies.

Due to the risks at play, one member declared that a sufficiently high enough level of security could never be reached that would persuade his company – and others – to migrate to the cloud and adopt more open working practices.

With participants representing industry’s most established marques, innovative start-ups and everything in between, the discussion predominantly focused on two challenges:

Several added that they remained reliant on portable hard drives and air gapped machines, yet were still encountering challenges even with hardwired, physical systems.

•

Improving manufacturing agility and capacity through the practical application of advanced, connected technologies Boosting efficiency and output through continuous improvement across the supply chain

Others noted that the lack of an industry or sector-wide standard operating procedure for an industrial internet of things was a potential hindrance. There appeared to be some discrepancy between how attendees viewed ‘lowrisk data’ such as that pertaining to HR, with one member feeling confident in

Connected technologies Encompassing the Internet of Things (IoT); big data; analytics; automation, and advanced production techniques the likes of additive layer manufacturing, many consider the tipping point for Industry 4.0 to have arrived. The combination of now readily available technologies such as these may hold the key to unlocking a step-change in performance and productivity. However, there was an air of caution around the table, particularly in regards to data security and the challenge of protecting intellectual property. A number of contributors highlighted the extremely sensitive nature of the projects their companies are involved in, and the potentially catastrophic ramifications should data fall into the wrong hands – whether inadvertently or otherwise.

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migrating those systems to the cloud. However, others argued that it may open a backdoor to more sensitive information, and warned that even lowrisk data could be used nefariously. With sensitivities around sharing data and the cost of cyber security seemingly ever-rising, several mentioned that it had begun to not only impact their ability to conduct business with suppliers, but even other divisions within their own organisations. Taken together – the reliance on pointto-point machines, the cost of data security, the lack of trust regarding cloud infrastructures – participants said that there were increasingly being forced to centralise systems, which in itself was leaving them vulnerable.

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In association with Grant Thornton

Supply chain improvement By design, aerospace & defense has to be a low-risk industry, products and the components that comprise them have to perform first time. As such, the single-sourcing of materials and components has become more common. One speaker suggested a move towards standardising components, similar to what happens in the automotive industry, hoping to avoid risk by taking variety out of the equation. However, several raised concerns that such a move could compound challenges arising from quality assurance issues, citing Toyota’s recent global airbag-related recalls. Delegates agreed that there was scope to identify areas where standardisation was applicable, with potential opportunities for modularity, but it relied on a greater understanding of what end-result was desired. The importance of customer relationship management (CRM) was raised, a sentiment that many were agreed upon; with one speaker noting that supplier relationship management (SRM) was equally crucial, especially if companies wanted to become more deeply embedded within their supply chains moving forward. Regarding future goals, almost all participants cited raising organisational agility, however this was at odds with the industry’s current obsession with efficiency and cost. One method of boosting agility was by leveraging the capabilities offered by additive layer manufacturing (ALM), helping to lower tool overheads, reduce lead times and enable parts to be sourced from a variety of companies. An advocate for ALM stressed how the technique allowed parts to be made in ways physically impossible by any other means; though concerns over the consistency of structures – something pivotal to aerospace & defense – was prolonging the certification process. A contributor concluded that raising agility didn’t mean simply putting on or taking off shifts to cope with fluctuations in demand, it had to be embedded organisation-wide through long-term programmes, with both internal and external parties working in unison.

Mark Hughes from Hitachi Consulting discusses balancing the risks and rewards of connected technologies The aerospace & defense industry is a key sector for UK manufacturing which is projected to continue growing over the coming years. However, it also faces a stiff headwind arising from the need to rapidly increase manufacturing capacity and improve supply-chain competitiveness. Aerospace companies are at the leading edge in their adoption of digital technologies for engineering design and in the use of advanced manufacturing technologies, such as additive layer manufacturing. However, they often fall behind other industries in the adoption of digital and connected technologies in production management and supplychain operations. Concerns about data security and the protection of intellectual property must first be addressed if these technologies are to be more widely adopted. Connected technologies, including the industrial internet of things, will improve traceability across the supply-chain and provide opportunities to improve both flexibility (the ability to absorb variety) and agility (their responsiveness to customer needs).

It sounds obvious to say that aerospace is not the same as automotive. However, the implication is that approaches pioneered in automotive cannot simply be copy-andpasted, but must first be adapted. For example, the degree of standardisation and the appropriate balance between centralised and de-centralised systems must be determined. Finally, the implementation of new technologies is a people issue as much as it is technical one. Previously, automation followed optimisation of an existing process. In the future, new technologies may transform processes, or eliminate them altogether. The resulting disruption will create organisational stress as roles are redefined and new skills developed. Managers will need to actively lead their people through both technical and adaptive change to mitigate any risks and to realise the potential rewards. In our experience, developing a current-state maturity assessment and an implementation road-map which addresses both the technology and people dimensions of change, is a good place to start.

About Hitachi Consulting Hitachi Consulting is the global management consulting and IT services business of Hitachi Ltd., a global technology leader and a catalyst of sustainable societal change. For further information, please contact: Mark Hughes, Vice President, Industrials mark.hughes@hitachiconsulting.com www.hitachiconsulting.com

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CHANGING THE FACE OF UK MANUFACTURING The Manufacturer magazine revealed the nation’s most inspiring and influential individuals in its TM Top 100 report 2015. On the evening of November 25, as part of TM Live, the most inspirational figures in UK manufacturing gathered at The Manufacturer Top 100 2015 report launch to raise a glass of champagne to their outstanding contributions to the industry. Shortlisted candidates and the wider manufacturing community joined industry leaders and F1 in Schools’ Steve Nevey at an exclusive event in the beautiful surroundings of the Birmingham Museum and Art Gallery to celebrate the report launch. The project, this year sponsored by Autodesk, BDO and Lloyds Bank, aims to dispel myths surrounding manufacturing and create a platform to champion and publicly identify dynamic leaders and innovators in the sector. The support for this year’s event was unprecedented as more than 250 guests from the manufacturing community sampled British-sourced canapes and British sparkling wine. Shortlisted candidates hailed from all over the country, from a range of sectors and

Exemplar figures • • •

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Alec and Fiona Anderson, Founding Directors, Koolmill Systems Roger Bowden, Founder, Owner and Chairman, Niftylift Richard Chambers, Graduate Engineer Body Construction, Jaguar Land Rover Lynne Darwin, Sales Director, Building Product Solutions Julie Dean, Founder and CEO, The Cambridge Satchel Company Andrew Denford, Founder and Chairman, F1 in Schools

occupying various roles in manufacturing. Individuals were nominated by our readers, the wider industrial community and the public, for their contributions in changing the face of industry; finding new markets; making marked investment in people, processes and customers; as well as those young, bright sparks making an impact disproportionate to their years. This year, TM Top 100 embraced a new category following several discussions with the judges, who highlighted a gap in the criteria for those facilitators who remain in the background, but are nonetheless instrumental in engineering the success of those around them and the company as a whole. From this, The Unsung Hero category was born, recognising those individuals who are constants in the business, who relentlessly provide support and knowledge both upwards and downwards within the professional hierarchy.

against all the odds; personal tales of individuals helping to change popular perceptions of careers in manufacturing; and tales that act as shining examples to draw young people into the sector. As well as toasting their success, shortlisted people were asked to use their accolade as an opportunity to raise the profile of manufacturing by committing to two of the following in the next 12 months: nominate two individuals for next year’s report; become a STEM ambassador; work with schools and colleges; join the TM editorial board; write for TM; host a stand at a career fair; speak at a TM event; attend TM events; and take on an apprentice.

This year’s cohort mingled with last year’s shortlisted, as well as members of the wider industrial community to toast the great feats achieved in UK manufacturing. The 2015 report features 100 unique stories of struggle, grit, determination and success

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Gordon Deuchars, Managing Director, GA Engineering Ian Helmore, Managing Director, Steri-Spray Gareth Higgins, Managing Director, KMF grop Dave Howlett, managing Director, Specialised Management Services James Hygate, Founder and Chief Operating Officer, Green Fuels Lynn Mowbray, Managing Director, Koso Kent Introl Edward Naylor, Chief Operating Officer, Naylor Industries

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Christopher Nieper, Managing Director, David Nieper Jacky Sidebottom-Every, Sales Director, Glossop Cartons Max Simmonds, Undergraduate, MEng in Electrical Engineering, National Instruments Sophie Torjussen, Shift Team Manager, Outokumpu Stainless Steel Boyd Tunnock, Managing Director, Tunnock’s Sarah Watkinson-Yull, Founder, Yull Bernard Waldron MBE, director of Manufacturing, MBDA

Among those in attendance was exemplar and MBDA director of manufacturing, Bernie Waldron, who, in regards to this accolade told TM “It’s wonderful, you’ve been nominated by your peers; people who know the business, so this makes it very special. The people who are involved in the nomination process are integral in the world in which you operate.”

Judge and industry manager, Manufacturing ISM at Autodesk Asif Moghal said, “We’re on the brink of a new industrial revolution, so it’s never been more important to showcase how British manufacturers are driving productivity, innovation and repetitive advantage. The Top 100 celebrates this shamelessly, and we need more of that.”

Also in attendance was Green Fuels founder and CEO James Hygate who told TM that to be honoured was “incredibly rewarding” and went on to explain, “The process basically started in my Dad’s

BDO’s business assurance partner Tom Lawton, also a 2015 judge, told TM, “In my view, manufacturing is the most important sector in the rebalancing of the UK economy and for the second year

The list was decided by an expert panel of judges from academia, industry and the wider manufacturing community including: • •

• • • •

“It’s wonderful, you’ve been nominated by your peers; people who know the business, so this makes it very special.”

• •

• garage and I’m very proud and honoured to receive this accolade.” Sarah Watkinson-Yull, founder of one of the only independent shoe brands manufacturing high-heels in Britain, was also named as an exemplar in the report. The young exemplar said it was a great honour to receive the award but was keen to use it as an opportunity to pay it forward and help draw more young people into the industry, she said: “I hope that I can still do a lot more manufacturing in the UK and continue to invest in it.”

The Manufacturer Top 100 is providing an essential platform to recognise talented role models who will inspire and attract future generations.” Dave Atkinson head of Manufacturing at Lloyds added, “The Manufacturer Top 100 is a fabulous opportunity for those in the sector to recognise people that make such a huge impact and sometime just don’t realise it, let along get recognised for it… All too often the headlines get forgotten but the legacy of some peoples actions and behaviours last forever.”

• • • • • • •

David Atkinson, Head of Manufacturing, Lloyds Bank Rachel Eade MBE, National Sector Lead for Automotive, Manufacturing Advisory Service Dick Elsy, CEO, High Value Manufacturing Catapult Paul Everitt, CEO, ADS Nigel Fine, CEO, Institution of Engineering and Technology Alan Foster, Operations Director, McLaren Racing Philip Greenish CBE, CEO, Royal Academy of Engineering Professor Sir Mike Gregory CBE, outgoing Head of the Institute of Manufacturing, Cambridge University Judith Hackitt CBE, Chair, Health and Safety Executive Tom Lawton, Business Assurance Partner, BDO Asif Moghal, Industry Manager, Manufacturing ISM, Autodesk Prof John Perkins, formerly Chief Scientific Advisor, BIS Jane Robinson, Director, Cutting Technologies Terry Scuoler, CEO, EEF Jan Ward CBE, CEO, Corrotherm Zoe Webster, Head of High Value Manufacturing, Innovate UK

Read the report here www.themanufacturer.com/download-top-100-2015-report Nominate for next year’s report here www.themanufacturer.com/eventsites/the-manufacturer-top-100/

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Supported by:

CELEBRATING THE VERY BEST IN UK MANUFACTURING On November 26, the cream of UK manufacturing gathered in the cosmopolitan environs of the ICC in Birmingham for an evening of celebration and glamour at The Manufacturer MX Awards 2015. The newly branded event, was originally an annual awards programme delivered by The Manufacturer, but this year the magazine joined forces with the Institution of Mechanical Engineers to present TMMX 2015. The awards are an amalgamation of The Manufacturer of the Year Awards, run by The Manufacturer, and the Manufacturing Excellence (MX) Awards, run by the Institution of Mechanical Engineers (IMechE). The annual occasion is dedicated to encouraging and promoting competitive manufacturing in the UK, and celebrating the very best in the industry. It is the culmination of an intense fourmonth judging period, which includes benchmarking site visits covering over 10,000 miles with a panel of more than 40 hand-picked, experienced judges. The judges included: David Johnson, chief operating officer, Meggitt; Steve Whittle, head of Business Intelligence – Aerospace, Rolls-Royce; Shelley Frost, Executive Director at IOSH and Jan Godsell, professor of Operations and Supply Chain Strategy, WMG, University of Warwick. Supported by 20 industry sponsors, including Natwest, which is supporting the event for the ninth consecutive year, the celebration attracted manufacturing business of all sizes engaged in a diverse range of activities, with 2015 seeing more than 50 manufacturing businesses represented, across 14 award categories. The atmosphere was palpable as the finalists eagerly waited to hear if they had made the cut, but this was not before a delightful three-course dinner and some light entertainment to cut through the nerves. This came in the enchanting and hilarious shape of Dragon’s Den veteran and Reggae Raggae Sauce entrepreneur,

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Levi Roots, as well as, BLOODHOUND SSC’s talented leader, Conor La Grue. The announcement of the successful finalists culminated in the reveal of the winners of the prestigious Manufacturer of the Year Award 2015, which was scooped by Lambert Engineering, which also picked up the Innovation & Design award, Leadership & Strategy and Customer Focus. Managing director at Lambert Engineering, Warren Limbert, told TM: “There are some fantastic companies at the awards tonight. The fact that we have managed to win so many awards and ultimately The Manufacturer of the Year 2015 is amazing. For the people working at Lambert and the customers we serve, the hard work has been recognised and this is what UK manufacturing is all about. “Tonight is about showing the achievement and encouraging more young people into engineering and manufacturing. So thanks very much.” A fantastic evening was enjoyed by all, with Hennik Group CEO, Nick Hussey saying, “We had almost 1000 manufacturers attend these awards, which are now by far the biggest in the sector. “With the backing of IMechE and the increased rigour behind the entire programme, we are delighted with the calibre of the entrants, the incredible diversity of the manufacturers represented and the truly world-class companies that have won awards this evening. “Congratulations to all the finalists and the winners, with these companies leading the charge, the future of UK manufacturing is in very safe hands.”

Richard Hill, Head of Automotive and Manufacturing at NatWest, headline sponsor for the event, told TM, “A big congratulations to the team at Lambert Engineering on their success at this year’s awards. “Manufacturing remains a key focus for us and we’re delighted to be continuing our support of The Manufacturer MX Awards. The awards programme and the gala ceremony are an incredible reflection of the diversity, innovation and expertise that British manufacturing has to show.” “Our team of manufacturing specialists, who are based across the UK, will continue to work closely with the manufacturing industry to help support and stimulate more of this great work. I’d like to congratulate all the participants, and specifically the winners, for their achievements and also for their contribution to the sector as a whole.”

“I’d like to congratulate all the participants, and specifically the winners, for their achievements and also for their contribution to the sector as a whole”

PROGRESS SUPPORTING BRITISH MANUFACTURERS Our Our dedicated dedicated Manufacturing Manufacturing relationship relationship managers managers are are trained trained and and accredited accredited through through the the Warwick Warwick Manufacturing Manufacturing Group, Group, to to ensure ensure they they understand understand the the opportunities opportunities and and challenges you face. challenges you face. With With our our lending lending pledge pledge of of £1bn £1bn per per year year until until 2017, 2017, plus plus an an extensive range of products and services, we are committed extensive range of products and services, we are committed to to support support your your business business ambitions. ambitions. To To find find out out how how we we are are supporting supporting manufacturing manufacturing businesses contact James businesses contact James Walton, Walton, Director Director of of Manufacturing, Manufacturing, Mid Mid Markets, Markets, james.a.walton@lloydsbanking.com james.a.walton@lloydsbanking.com or or David David Atkinson, Atkinson, Head Head of of Manufacturing, Manufacturing, SME, SME, david.atkinson@lloydsbanking.com david.atkinson@lloydsbanking.com lloydsbank.com/manufacturing lloydsbank.com/manufacturing

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£1bn £1bn relates relates to to aa Lloyds Lloyds Banking Banking Group Group lending lending fifigure gure correct correct as as at at 31 31 December December 2014. 2014. Please Please note note that that any any data data sent sent via via e-mail e-mail is is not not secure secure and and could could be be read read by by others. others. Authorised Authorised by by the the Prudential Prudential Regulation Regulation Authority Authority and and regulated regulated by by the the Financial Financial Conduct Conduct Authority Authority and and the the Prudential Prudential Regulation Regulation Authority Authority under under Registration Registration Number Number 119278. 119278. We We subscribe subscribe to to The The Lending Lending Code; Code; copies copies of of the the Code Code can can be be obtained obtained from from www.lendingstandardsboard.org.uk www.lendingstandardsboard.org.uk The The Lloyds Lloyds Banking Banking Group Group includes includes companies companies using using brands brands including including Lloyds Lloyds Bank, Bank, Halifax Halifax and and Bank Bank of of Scotland Scotland and and their their associated associated companies. companies. More More information information on on the the Lloyds Lloyds Banking Banking Group Group can can be be found found at at lloydsbankinggroup.com lloydsbankinggroup.com

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THE WINNERS CIRCLE TM rounds up the winners from The Manufacturer MX Awards. The calibre of this year’s finalists was exceptional and the firms were put through their paces during the intense adjudication process. TM hand-picked more than 40 experienced judges to evaluate and assess each entrant against a precise set of criteria. Each judging team embarked on an epic UK tour travelling from Durham to Devon, covering more than 10,000 miles. The process culminated in a oneday meeting at Leicester City Football club, where judges met to deliberate the winning companies. Judges included: David Johnson, chief operating officer, Meggitt; Steve Whittle, head of Business Intelligence, Aerospace, Rolls-Royce; Jan Godsell, Professor of Operations and Supply Chain Strategy, WMG, University of Warwick; and Shelley Frost, Executive Director of Policy at IOSH.

THE MANUFACTURER OF THE YEAR 2015 Lambert Engineering There are some fantastic companies at the awards tonight. The fact that we have managed to win so many awards and ultimately The Manufacturer of the Year 2015 is amazing. For the people working at Lambert and the customers we serve, the hard work has been recognised and this is what UK manufacturing is all about. Tonight is about showing the achievement and encouraging more young people into engineering and manufacturing. So thanks very much. Warren Limbert, Managing Director, Lambert Engineering

Runners up - Hayward Tyler and Coty Manufacturing UK

EXPORTER OF THE YEAR Hayward Tyler nufacturer of the ring win The ma Lambert Enginee . year 2015 award

APPRENTICE OF THE YEAR

It’s a real recognition of the input all of our staff put in to the business and it means a terrific deal to all of our staff and I know they’ll build on this for the future. Nicholas Flanagan, Chief Financial Officer, Hayward Tyler Group plc

Jade Aspinall, MBDA UK

It’s amazing to have been chosen as The Manufacturer Apprentice of the Year 2015. I am very grateful for the support I have had throughout my apprenticeship and I’m hopeful that this win will encourage other young people to start a career in engineering.

CUSTOMER FOCUS Lambert Engineering

INNOVATION & DESIGN Lambert Engineering As a Yorkshire man, I’m chuffed to bits to receive this award. I know we’ve won three this evening, but this one is the pinnacle of the business and my career. Ian Hampton, Innovations Director, Lambert Engineering

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It means a huge amount because we put a lot of work in to win this award. It’s testament to everything that we’re doing in the business. It elevates the profile of our business and it means a lot, not just to ourselves but also to our customers, who recognise what we do for them. We have achieved something in the sector that is beyond any of our competitors. Warren Limbert, Managing Director, Lambert Engineering

Supported by:

PARTNERSHIP WITH EDUCATION BAE Systems Military Air & Information “We feel really really proud to have won this award and also on behalf of everyone at our company that works with schools, this award really goes to them. Andrew Blow, Head of Early Careers Programme, BAE Systems Military Air & Information

LEADERSHIP & STRATEGY Lambert Engineering The main purpose of tonight was to come here and feel rewarded for everything the company does, and to win four awards, including The Manufacturer of the Year 2015, is just fantastic. The people we have back in Tadcaster work extremely hard, it’s a shame I’ve only been able to bring 12 today. There’s another 180 we would have loved to have brought. They all work just as hard, and this is dedicated to all of them. Warren Limbert, Managing Director, Lambert Engineering

MANUFACTURING SERVICES Savortex It feels great and I think it’s recognition of all the hard work by the team, thankfully I get all the credit for it, and so this is for my team and a really exciting future. Syed Ahmed, Founder, Savortex

MANUFACTURING IN ACTION

PEOPLE & SKILLS Xtrac

McLaren Automotive

In terms of winning this manufacturing in action award today, the efforts of the team back in Woking, to be recognised by our peers and the resurgence of manufacturing in the UK just leaves me speechless actually. Our captive is to take peoples’ breath away and this has taken my breath away today, to be recognised by your peers is second to none. Alan Foster, Operations Director, McLaren

We’re really pleased to win this award, the company is all about emplyee ownership, being 100% owned by the entire workforce. We have a very strong apprentice and undergraduate programme, in fact in 2016 we will employ our 100th apprentice or undergraduate since the company started more than 30 years ago, so this really reinforces that and justifies why we have them. Adrian Moore, Managing Director, Xtrac

SUSTAINABLE MANUFACTURING Encirc

Absolutely delighted for myself and my staff. We feel we really have a unique proposition with Encirc and we’re just delighted to have some recognition tonight. Adrian Curry, Managing Director, Encirc Richard Hi

ll - Natwes

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Supported by:

WORLD CLASS MANUFACTURING Accolade Wines

There are 500 people back at the office who are so engaged and we are so proud of them. To receive recognition like this and be able to take it back the rest of the team is amazing. Richard Lloyd, Managing Director, Accolade Wines

THROUGH-LIFE ENGINEERING SERVICES

YOUNG MANUFACTURER OF THE YEAR

Rolls-Royce

Pierre-Adrien Chagnoleau, Coty Manufacturing UK

To be honest, I never expected to win this award, to see where I am after two years in England, it is great recognition for all the work and for all the work with the team. Pierre-Adrien Chagnoleau, Cell Engineering Manager, Coty Manufacturing UK

We’re exceptionally pleased to have won, it’s the second time we have done so in the past four years. It’s testament to what a very large number of people have done to drive forward our engineering for service practice. It’ll inspire more people in the business to do even more I think. Andy Harrison, Associate fellow for Lifecycle Engineering at Rolls-Royce

SUPPLY CHAIN EXCELLENCE

Coty Manufacturing UK

It’s an extraordinary honour, we are so thrilled, the team back in Ashford is so dynamic, motivated and passionate about everything we do and it’s recognition for everything they do every day. They’re an extraordinary team and this is for them, we’re absolutely over the moon. We’ve been moving forward for several years and we’re moving into the next phase. This is recognition for everything we’ve done and we’ll build on that going forward and I dare say we’ll be back next year. Nick Pratt, Planning Director, Coty Manufacturing UK

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Supported by:

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The Future of Making Things

THE FUTURE OF MAKING THINGS No matter how you might be making things in your factories right now, this will change. How you think your products interact with the world in which they’re made for, this will also change. In fact, this change is already happening. This was the message to emerge from the breakout conference held at TM Live this year, entitled The Future of Making Things. Hosted by Autodesk and The Manufacturer, attendees heard from a range of speakers discussing how cutting-edge design and engineering technologies were opening up new ways for designers, engineers and manufacturers to collaborate, build, sell and completely reimagine how and why they are making the products we need today and in the future. CEO of West London-based Vantage Power, Alexander Schey, told attendees how his company, which retrofits commissioned buses with hybrid powertrains, is aiming to introduce the use of sensors and connected technologies to monitor its products to ensure the company meets its promise of higher fuel economy, lower emissions and greater reliability than competing products. But it was his vision for the businesses future which captured the imagination of delegates. Going further than just predictive maintenance and running efficiency, Schey spoke of the ability to use connected technologies implemented in his products to utilise capabilities such as geofencing, meaning by simply driving across a geographical point, the engine would automatically switch to electric mode,

reducing noise emissions around schools, elderly care homes and built up areas. This would require zero input from the driver. The resounding message was that of changing the way manufacturers think about their products, and in turn how they make them. We are moving ever faster towards a world where every product has the capability to connect. In order for manufacturers to embrace this technology, it should be designed and embedded into production processes and products from the ground up. This involves a new way of thinking – a bold way of thinking. Following Schey’s presentation, delegates broke out into three separate discussion groups to dive into the three areas Autodesk believes the Future of Manufacturing will be built on - addressing markets of

one; embracing flexible design and manufacture; and connected services. With Autodesk representatives on hand with a selection of the day’s speakers including Steve Nevey from F1 in Schools; Alexander Schey; and Asif Moghul, Autodesk manufacturing industry manager, the discussions brought in collective thought from delegates from across manufacturing sectors including aerospace, automotive, food and drink, textiles and electronics. The overriding takeaway was that manufacturers were open to the way technology, collaboration and connected services are changing the way things are designed, built and serviced. But actually changing mind-sets and embracing the change still appears to be a work in progress.

To find out more about how Autodesk is driving the Future of Making Things, visit www.autodesk.co.uk/campaigns/fomt

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SECTORfocus

The UK’s space industry is bigger than most people realise – and is going to unimagined places, Ruari McCallion reports.

his Christmas Day will mark 12 years since Beagle 2 separated from the European space Agency’s Mars Express spacecraft in orbit around the Red Planet – and disappeared. The bewhiskered face and infectious enthusiasm of consortium leader Professor Colin Pillinger of Open University got people wondering if maybe there might be something in this Space stuff, after all. Even the loss of the tiny lander – not much bigger than an old-fashioned dustbin lid – didn’t seem to dampen his spirits. Sadly, he didn’t live to see the day that Beagle 2 was rediscovered on the surface of Mars in January this year, undamaged but non-functioning, but his legacy is a raised profile for the British space industry. Britain’s space industry did not start with Mars Express and Beagle 2; it began much earlier, in 1960. A list of the main

contractors who made up the consortium will give an idea of how strong it already was: SciSys built the ground segment and lander software; Logica provided the cruise, entry, descent and landing software; Martin-Baker built the entry, descent and landing system; Astrium (now Airbus Defence and Space) was the main industrial partner. Even an arm of McLaren, the motor racing company, was involved: McLaren Applied Technologies companies manufactured and provided development support for the lander structure and solar panels. The University of Wales in Aberystwyth built the robotic arm and the University of Leicester provided project management, mission management, flight operations, instrument management and scientific experiments. Beagle 2 mission manager Professor Mark Sims is still very much involved with the Space business, as Professor of Astrobiology

50 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

and Space Instrumentation at the University of Leicester.

Star-spangled manor

“The UK space industry is worth £11-12 billion to our economy, and most of that is in the form of commercial return. The government invests about £300 million a year,” he said. “It employs 60-70,000 people, directly and indirectly, and it has been growing at eight per cent a year, even during the Recession.” Which is a pretty impressive growth rate – and it isn’t intending to stop there: the plan is to get to £40 billion by 2030. This is not castles in the air; the aspiration is based on firm foundations. Leicester University Space Research Centre-built instruments have been operating in space every year since 1967. It has worked with NASA; ESA; UK Space Agency and others further afield. The UK is home to companies such as e2v in Chelmsford; Inmarsat; Avanti;

UK space industry

Wielding the Sabre At the beginning of November 2015 Reaction Engines, based at the Culham Science Centre near Abingdon in Oxfordshire, announced that it had sold a minority stake in itself to BAE Systems, for £21 million – valuing the company at over £100 million. With additional UK Government funding of £60 million, Reaction engines will be able to move to the next stage of developing its SABRE (Synergetic Air-Breathing Rocket Engine) concept, which it claims will enable air travel at up to five times the speed of sound within Earth’s atmosphere, and up to 25 times the speed of sound in outer space. The Sabre engine combines jet and rocket propulsion in a single unit. The company says that the turning point in its development came when it demonstrated key enabling technology in the shape of ultra-

lightweight heat exchangers, 1/100th the weight of existing technologies, which allow the cooling of very hot airstreams from over 1000 °C to minus 150°C in less than 1/100th of a second. Since then, it has received favourable support and validation from the European Space Agency and US Air Force. Reaction Engines is also the company behind the Skylon project, an unpiloted, reusable spaceplane intended to provide reliable and costeffective access to space. “ESA are confident that a ground test of a sub-scale [SABRE] engine can be successfully performed to demonstrate the flight regime and cycle and will be a critical milestone in the development of this program and a major breakthrough in propulsion worldwide.” – European Space Agency report to the UK Space Agency, 2011.

SECTOR FOCUS

Airbus Defence and Space; Harwell Laboratories; BAE Systems; Surrey Satellite Technology Ltd; and others (see box-out). The country’s space industry has three streams: upstream; downstream and space-enabled enterprises. The upstream segment includes launchers and satellites; in the latter category, the UK has particular strengths in smaller satellites. Conventional satellites will often be about the size of a minibus and weigh between 100 and 500 kg. Airbus Defence & Space’s order book has been dominated by this kind of unit in the shape of Eurostar E3000 telecom satellites, which cost £100 million and more. Smaller satellites can weigh less than one-tenth as much as their larger cousins but they still carry everything required to operate, including batteries, orbital control and positioning systems, radio communications and analytical instruments, but everything is smaller, less expensive, sometimes less complicated – and definitely lighter. With launcher charges being directly related to weight and space, smaller units make a great deal of sense. They can even ‘hitch a ride’ on someone else’s mission, if they are small enough. NASA’s nanosatellite missions cost in the region of $2-$3 million each, which is much less than a full-sized project. Lockheed Martin is establishing a ‘space office’ in the UK, specifically to capitalise on the ‘small satellite’ expertise in this country.

Lateral thinking

Downstream includes data exploitation, especially on the earth exploration side, and involves companies like Proteus Geo, which offers products for environment, agriculture, forestry and marine applications. The ‘third stream’, according to Prof Sims, is “spaceenabled enterprise”. “This involves things that are not just used direct, but the application of data to other areas,” he said. “For example, medical devices and technology that may have been originally developed for use in space, such as the treatment of tumours with gamma rays and heart assistance technology. It may turn out to be quite a growth area in itself.” Having bright ideas is one thing; commercialising them is definitely another. How is the UK bringing together and driving its resources? There are

December / January 2015/16 | Issue 10 | Volume 18 | www.themanufacturer.com 51

THE UK’S SPACE INDUSTRY BY NUMBERS According to the latest Government figures recorded in The Size & Health of the UK Space Industry, October 2014, UK Space Agency the UK Space Industry’s:

Rosetta, the 10-year mission to land a probe on a comet, which came to fruition a year ago, involved up to 50 contractors from 14 EU countries plus Switzerland, the USA, Canada and Australia and owed a great deal to the UK’s space industry.

Direct GVA was Turnover in 2012/13 was Turnover increased by in real terms in the two years since the previous survey and report in 2010/11

Upstream sector turnover grew

Downstream sector’s turnover increased by

to:

Is increasingly selfreliant; consolidated revenue grew slightly less than overall space industry revenue; space organisations are sourcing more inputs from organisations within the industry.

Broader employment generation amounts to support for

72,000

Total employment amounts to up 18.7% since 2010/11

Navigation applications tripled in value from 2010/11, up to

indirect and induced jobs

Services support disaster relief, telemedicine, leisure craft navigation and satellite broadcasting

of total turnover

Largest application is broadcasting, followed by telecommunications, Earth observation activities are in fifth place

52 www.themanufacturer.com

Rosetta – “Britain’s comet mission”

Space transportation has increased even faster, to around

of total turnover

e2v, based in Chelmsford, designed and supplied the Civa camera system that takes pictures of the comet’s surface, as well as the Rolis system that filmed the descent. The company also built three other camera systems on the main spacecraft ABSL Space Products (formerly AEA), designed, developed and produced smaller, lighter and more reliable (than the traditional nickel-cadmium) advanced batteries for both Philae and the Rosetta main spacecraft. Surrey Satellite Technology Limited, designed a “momentum wheel” that stabilised the probe as it descended and landed on the comet Moog developed the tanks used to store helium in Philae out of its Bradford base. Scientists from the Open University and Rutherford Appleton Laboratory were involved in the contract for the Ptolemy gas analyser instrument on the lander. This instrument had to reduce a lab full of chemistry equipment to fit into a space the size of a shoebox. BAE Systems produced a “smartphone” for space communication at its technology centre in Great Baddow, Essex. It enables control of the spacecraft’s speed to fractions of a millimetre per second, through immense distances across space Airbus Defence and Space (formerly Astrium) was the major subcontractor for the platform at its base in Stevenage Luton-based Telespazio VEGA Group developed onboard software SciSys was responsible for the mission control system development and maintenance ERS Technology was involved with the development of subsystems including the reaction wheels, solar array drive motors and Philae harpoon motors.

UK space industry

SECTOR FOCUS

Electrical Systems Control & Automation Solutions

UK Spaceport

“A few big companies in the UK are involved in the upstream side. The use and interpretation of space data in conjunction with other activities is

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Symbiotic revolution

believed to be the growth area,” said Sims. “Upstream is very specialised; downstream includes data analytics, finances and planning, Earth observation images fused with ground-based information and so on. The growth area is in services and the applications of knowledge sets and technologies.” So are smaller manufacturers shut out of this potential boom area? Not at all – but it is specialised. “We build the instruments to do the science we want to do,” he continued. “A lot of components are either bought in or contracted out. We work with ESA in developing areas of interest, such as nuclear power, which is now a big ESA project, and we are looking at generating various new capabilities in Europe.” He also mentioned ‘embedded smart decision systems’, which are intended for use in space but will spin over into applications such as autonomous vehicles. “The space industry drives everything in our lives, including air quality, devices for making surgery safer, and even facilitating remote surgery,” he concluded. “Everything from your car’s GPS to timing signals used to synchronise power supplies, Sky TV to Inmarsat and so on, depends on the space industry.”

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several Space Centres across the country, from University College London’s facility at Dorking in Surrey in the south to Strathclyde in Scotland. The University of Leicester hosts the National Centre for Earth Observation and is a partner, along with the University of Nottingham and the British Geological Survey, in EMBRACE – the east Midlands Satellite Applications Centre of Excellence. It and the Satellite Applications Catapult, which is based at the Harwell campus in Oxfordshire, actively seek to attract and develop smaller companies’ involvement in the space industry.

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The government initially hoped for 2018 as the date for the Spaceport to be up and running but this timetable appears to have slipped a bit. The initial consultation outcome was published in March 2015 and a detailed technical specification of Spaceport requirements is due to be published before the end of the year.

Helping you to improve your lead times to your customer.

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SOLUTI ON ION AT S M Pneumati c

The shortlist of possible sites includes: Campbeltown Airport (Scotland) Glasgow Prestwick Airport (Scotland) Llanbedr Airport (Wales) Newquay Cornwall Airport (England) Stornoway Airport (Scotland) RAF Leuchars (Scotland) – potential temporary facility

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In July 2014 the UK Government announced its intention to build a Spaceport, which will enable takeoff and landing of reusable space vehicles, such as Skylon and Virgin Galactic. Key factors to be taken into consideration include: an existing runway which is, or is capable of being extended to, over 3000 metres in length the ability to accommodate dedicated segregated airspace to manage spaceflights safely a reasonable distance from densely populated areas in order to minimise impact on the general public

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INTERVIEW

McKernan speaking at Innovate 2015 in London

56 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

Callum Bentley recently had the chance to sit down with Innovate UKâ&#x20AC;&#x2122;s new CEO, Dr Ruth McKernan where the two spoke about the potential to grow the small, micro and medium-sized UK businesses to become the next economic powerhouse for Britain.

Dr Ruth McKernan

INTERVIEW

rying to lock down enough time to have a worthwhile conversation with Innovate UK’s new leader since she took the reins in May this year has not been an easy feat. She has had to hit the ground not running, but sprinting in order to keep up with the enormous workload that comes with the position. After all, Innovate UK is still relatively young, and it still has a lot to prove. I have however, managed to grab a brief audience with her as she comes off stage during the Innovate 2015 conference in central London. It’s a huge event with more than 3,000 attendees over the two days and a literal hive of activity with every nook of the Old Billingsgate venue teaming with some of the best innovative businesses and start-ups showcasing their wares. As far as conferences go, it is truly impressive. The reason I’ve been so keen to interview Dr McKernan is to talk small and medium businesses – or

The next phase over the next few years is to focus on getting value from the companies we’ve already invested in

more so - how Innovate UK intends on helping grow these businesses to become the economic drivers of the future under her tenure. It just so happens she has just been sharing the stage with serial entrepreneur Sherry Coutu, where the pair were discussing the importance of “scale-up” companies. Coutu was discussing her scale-up report, in which she explained these companies could create one million new jobs and an additional £1 trillion to UK economic growth by 2034. But McKernan, while acknowledging their potential, is realistic when considering the monumental amount of work which has to happen to achieve these figures. “Sometimes it takes a long time for businesses to get to that scale up point,” McKernan says. “If you’re a manufacturing company, just to make a product - to prototype it, to test it and to understand it, especially in sectors like bio medicine and in energy, that can be eight, nine or maybe even 10 years. We have to help companies through that and they are generally going to be small at that stage, then they hopefully accelerate and can get investment from other places. Then they can scale and we don’t have to worry about them quite as much. “The medium size business are where the economic growth comes from. But in order for those businesses to get where we need them to be, where December / January 2015/16 | Issue 10 | Volume 18 | www.themanufacturer.com 57

they can really start to grow, is to Innovate UK’s job. Nobody starts as a medium-sized business, they have to grow to get there. “Innovate UK needs to encourage small businesses by pulling the technologies out, understanding what

BIOGRAPHY Dr Ruth McKearnan

the future opportunities are for the UK and putting some air and cash under their wings, that is our job.” Innovate UK, or the Technology Strategy Board as it was known when it was first established under the former Department of Trade and Industry in 2004, before becoming an independent body in 2007, has become central to the Government’s technology and innovation policy over the past five years. Speaking immediately after McKernan at the conference was Business Minister Sajid Javid who proudly made the statement that “innovation was at the core of UK economic growth”. It’s positive to see Innovate UK funding has been mostly left alone following Chancellor George Osbourne’s Comprehensive Spending Review. How the move from grants to loans pans out is yet to be seen. That’s not to say McKernan wasn’t prepared for the worst. When I ask her what her plan is if her organisation’s funding was to find itself on Osbourne’s butcher’s block, she simply assures me that herself and her team “are planning for multiple

Ruth McKernan joined Innovate UK as Chief Executive in May 2015. Ruth has 25 years of research and commercial experience in the pharmaceutical industry, including heading up research units in the UK and the US. She is a member of the Science, Industry and Translation Committee of the Royal Society and a Council Member for the Medical Research Council. Ruth’s previous roles include: Senior Vice President, Pfizer Head of the Merck Neuroscience Research Centre Her awards and achievements include: CBE in 2013 for services to Business, Innovation and Skills Fulbright Scholarship Winner of Glaxo/ABSW Science Writers’ Award Published author with more than 120 scientific papers and 15 patents BSc in Pharmacology and Biochemistry and PhD in Molecular Neuroscience from King’s College, London Author of a book for non-scientists, “Billy’s Halo”

58 www.themanufacturer.com | December / January 2015/16 | Issue 10 | Volume 18

scenarios” of which the information she would not divulge, saying they would “do the best we can with what we have, when we get it.” And fair enough. But what about the state of play at Innovate UK since McKernan took over? Is it in the best state to help small, scale-up businesses do what their name says? Innovate UK’s strength to achieve this comes from its breadth of coverage. Whatever the sector in which your business lies, the necessity of funding innovation for growth is not unique, whether that be in high value manufacturing or cell therapy development. “Innovate UK has created a very strong base of businesses with new projects to start,” she says. “The next phase over the next few years is to focus on getting value from the companies we’ve already invested in. Obviously we’ll want to keep offering competitions and grants to micro and small companies, but our focus needs to be to pull those up to be medium sized. The economic growth of the UK is not

Dr Ruth McKernan

INTERVIEW

Electrical Systems

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You can read more about the scale-up report mentioned in this article at www.scaleupreport.org

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FURTHER INFO:

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“When I look around for our leaders; who is growing and starting our next businesses, I’m so impressed by so many of them. These are people with ambition, with enthusiasm, they’re not scared to stand up and get on with it. We need more of those people. Ambitious, young people who just need to believe they can start and grow a business and employ people, they can contribute to economic growth. They can help the UK be exactly where it needs to be. That’s what I would like to see in the next decade - more high quality leaders. “The work that Sherry [Coutu] was talking about was her own scale up report where it came out clearly, and I was quite surprised, that businesses actually felt that just having visibility would help them grow their business. “Innovate UK is a kind of scholarly We are a scientific organisation. We do a lot of data analysis organisation, but sometimes I do and we work with a wonder if we miss the obvious lot of the research councils. We are a scientific organisation, but sometimes I do we’ve really done something for wonder if we miss the obvious. economic growth. I won’t put Advertising, visibility and making numbers on that today, but at people aware of what you can some point I will because that’s do is really important. We’ve what we do and that’s what run a lot of programmes such we’re all about - productivity and as venture fests and we’ve got economic growth.” investor breakfasts where we try With this remit in place, it’s to link up investors with some of comforting to hear directly the micro and small business that from Innovate UK’s leader, we’ve funded. her future intent for not only “I’m wondering whether that the organisation, but for those is nearly enough. It looks at part which it supports. But there is of the problem with a focused and always will be only so much effort on a company and an it can do for small and medium investor, but actually, sometimes size businesses in the UK. So just publicity and awareness of where will these businesses pick the really good quality, growing up the slack? For McKernan, businesses in the UK is an end in it’s all about confidence itself. That’s something I have to and visibility. think about.” going to be coming from an awful lot of small business, it’s going to come from a few medium size businesses and an even fewer number of large ones. If we can create some more medium sized business in the UK that would be a success for us.” But how to measure this success? Well, it turns out that with McKernan, it’s a case of “once a scientist, always a scientist”. “I came in with a big desire to help business grow in the UK - that’s why I took the job” she says. “I’m a data driven person so I will be collecting information about what happens to the businesses that get Innovate UK support and I will feel I’ve done a good job if by the end of my tenure, I have data to show that we’ve grown scale ups, we’ve employed people and

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Control & Automation Solutions

Optimum quality Your outsourcing partner

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6Osecond Richard Peckham, Business Development Director (Space), Airbus Defence and Space UK

Richard Peckham

Business Development Director (Space), Airbus Defence and Space UK Britain’s space sector has doubled turnover over the past decade to almost £12bn a year. What has changed to invigorate growth in the sector?

In one sense, nothing has changed as space has been quietly growing since first becoming a commercial reality in the 1970s through TV broadcasting. What has changed more recently has been the realisation and recognition that there is this big industry feeding off the signals and communications channels that satellites provide. Having now woken up to this, it is possible to target investments where there is the greatest leverage from satellite infrastructure to services and applications on the ground/sea/air.

The sector is now targeting £40bn of the international market by 2030, how is it going to achieve this?

The high growth achieved in recent years has been a result of concerted actions from all the stakeholders in the space sector: industry, government and academia. The space sector is characterised by strong government interventions as many nations view it as a strategic capability or a statement of national pride. Therefore going forward it is essential to maintain a strong partnership between government, industry and the research community, and to target investments where the UK

has strong expertise and focusing on the high-growth markets.

The Telegraph recently said that the sector is ‘misunderstood’, what do you think the public is misunderstanding?

The typical public perception of space is that it is all about “out there”; astronauts, planetary probes and astronomical missions. And while it is about these things, it is actually much more about down-to-earth things and consumers: delivering TV; mobile communications; internet in remote locations; accurate time and position everywhere; monitoring of our earth resources and climate; supporting humanitarian aid and disaster relief; delivering satellite images to our laptops and mobile devices.

What are the barriers to the UK space sector thriving?

Industry is ready to invest and more private sector capital is flowing into the sector but we still need more entrepreneurs ready to take risks and start new businesses. It is essential the government maintains a consistently supportive space policy and plays its part in investing in early stage R&D and into national missions. More than half the £40bn target must be achieved through exports, and government has a key role to play in supporting British businesses to export, in particular by

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INTERVIEW

It is essential the government maintains a consistently supportive space policy and plays its part in investing in early stage R&D and into national missions

demonstrating confidence in British products and expertise by what they buy at home. Lastly, we have to ensure the UK regulatory environment both generally for business and more specifically space law and regulations are regularly benchmarked to make the UK the best place in the world to conduct space business.

What are the end user benefits, as well as, wider economic perks of growth in the sector?

Space permeates all sectors of society, often invisibly. Already sectors such as agriculture, forestry, weather forecasting, transport, energy, mining, defence, construction and financial services are relying or benefiting from satellite-based services in one way or another. Consumers have now become used to accurate position information to their car satnav or mobile device, probably without thinking of the space connection. Soon near real-time video and imagery from space will also be a taken for granted app on mobile devices. A recent analysis by London Economics (The Case for Space 2015), whilst not trying to put a number to the total social and economic benefits of space, demonstrated through a series of case studies and quantification where it was available that space makes a massive contribution to many other sectors of the UK economy either enabling or improving productivity.

EEF National Manufacturing Conference

MANUFACTURING LEADERSHIP

Steph McGovern, BBC Business Journalist, will chair the conference This year’s conference looks set to be the most impressive yet

What a difference a year makes!

Martin Wolf, CBE, Chief Economics Commentator at The Financial Times

EEF laments over 2015, and looks forward to a bright future and February 2016’s National Manufacturing Conference.

year ago UK manufacturing was striding boldly out of recession showing strength across most key economic indicators. Since then, as we look ahead to the next National Manufacturing Conference in London early next year, the sector has been in a very different place. But as the sector grapples with issues ranging from concerns about emerging markets, sluggish demand in Europe and the impact of the plummet in the oil price on manufacturing supply

There’s plenty to sustain the existing passion of the manufacturing community, as well as, build on existing knowledge with new ideas and insight

chains, it’s clear that innovation and the drive to succeed still goes on. Tackling productivity and winning globally are key to unlocking this success, which is why we’ve made this the theme of our 2016 National Manufacturing Conference. We’ve lined up an impressive range of speakers and panellists to inspire and motivate business and political leaders alike. And, as you would expect from the manufacturers’ organisation, we have heavy-weight speakers, such as Martin Wolf CBE, chief economics commentator at the FT, and Business Secretary Sajid Javid, to spark the debate. With panel debates discussing the productivity puzzle, the UK’s future in the EU and unlocking the global trade challenge, next year’s conference, with headline sponsor Lombard, looks set to be one of the most engaging and informative yet. And with interactive voting, networking opportunities, a trade exhibition and more, plus Baroness Karren Brady CBE bringing the day to a close – there’s

plenty to sustain the existing passion of the manufacturing community, as well as, build on existing knowledge with new ideas and insight.

FURTHER INFO: To book your ticket today visit: www. manufacturingconference.co.uk 24 February 2016, QEII Centre London SW1P 3EE

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www.leanmj.com

Learning to lean

LEAN MANUFACTURING

Fred Tongue looks back over a year of lean and the perennial questions that face it.

he end of year is upon us, so in this double issue of the Lean Management Journal we are looking at the big issues that this year has thrown up in the world of lean. All the contributors in this month’s issue discussed what they deemed to be the most important issues facing the world of lean right now. The nature of lean means it is constantly being re-evaluated and improved upon, because of this, the landscape is constantly changing. New thinking and practice leads to new problems and questions. I can’t profess that this LMJ provides definitive answers for lean’s deep routed questions or solves its perennial problems, however it does provide some wonderful insight and advice in dealing with the aforementioned. Gwendolyn Galsworth deliberates visual management and the visual workplace, explaining why each is important and how differentiating between them can change the way your operation runs. University of Strathclyde’s John Hogg describes what a daily communication cell is, what differentiates it from a morning meeting and how it can help an organisation unlock hidden potential. Malcolm Jones from Industry Forum examines the mind-set required when approaching Japanese manufacturing strategy and how to take the necessary steps to implement properly.

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Suiko and Cranfield University have also given us a chapter of their new whitepaper by Andy Marsh, Dr Bob Lillis and Professor Marek Szwejczewski. The chapter focuses on how to implement change, keep pace and remain sustainable – all common challenges for any organisation undergoing a lean transformation.

With consumer habits constantly changing and expectations forever increasing manufacturers and service providers need to be ahead of the curve, this requires extra funding going for R&D

With consumer habits constantly changing and expectations forever increasing manufacturers and service providers need to be ahead of the curve, this requires extra funding going for R&D. With funds often difficult to raise, one option is to implement lean to save. Not only can lean save money and time, it can also add value to the customer. This is why the big issues in lean are so important, they have the potential to unlock extra funding and value for the customer. Marginal savings and gain add up quickly and anything that helps to keep organisations ahead of consumer expectations or rival businesses has become ever more important. I hope you enjoy the last LMJ of 2015, with some outstanding contributions and extremely knowledgeable contributors, it’s a great way to end this year and start the next. Happy reading, Fred Tongue Commissioning Editor of the Lean Management Journal

EEF Insights

MANUFACTURING LEADERSHIP

Manufacturing confidence Ian Isaac, Head of Lombard, laments over the successes of the UK manufacturing sector, while maintaining Lombard’s continued support for industry.

The campaign launched with a supplement in The Times, in which its editorial team offers an explanation of what asset finance is and how it can support UK businesses. This and the rest of the campaign can be accessed via The Times website – it’s well worth taking a look at the site. As part of the campaign, we’ve spoken to customers across the country and have found an inspiring and enterprising spirit in Confidence is at the heart of many business as a whole, and manufacturing success stories and we hope that by in particular. continuing to support the manufacturing sector A great example of by funding investment, we have a role to play in this is Ebac, a familyowned manufacturing continuing to strengthen the success story that business based in is UK manufacturing County Durham. The company, which produces dehumidifiers and water coolers, is preparing to launch citing a desire to increase efficiency to its first range of UK-manufactured drive productivity through investment, washing machines - the first time these and 89% said they were aiming to appliances have been produced in this become more competitive. country in a generation or more. These findings are enlightening in Following a £7m finance package, several ways, not least in drawing part of which is provided through asset attention to the desire from the finance, the company is preparing to manufacturing sector to succeed and introduce the range next Spring. drive growth. As well as being a thriving business Following this survey, Lombard has and employer in the locality – EBAC is launched a campaign to make more on track to double its staff from 200 businesses aware of what asset to 400 once the washing machine finance is and the role it can play in production starts – it also runs a supporting investment. hen we carried out a survey earlier in the year, one of the striking results was the level of confidence in the manufacturing sector – nearly three quarters of those questioned said they were more confident than in the previous 12 months. At the same time, a staggering 99% said that they were investing more in equipment, with 93%

trust, the Ebac Foundation, which was set up in 2012 by the company’s founder, John Elliot, to support the local community. Ebac is a heartening story of a thriving manufacturing sector in the North East. It is not alone, there are many other examples of Ebac across the country but the business embodies the drive and determination of manufacturers. While there is some uncertainty over issues such as the EU question, many manufacturers have the confidence in the quality of the products they produce and focus on the success story on home soil, while others like Hart Biologicals, another North Eastbased manufacturer, this time of medical products, continues to focus on growing its share of the export market, which partly, as a result of recent investment, accounts for an impressive 80% of its business. Both businesses are very clear that asset finance was essential to the success of their expansion plans, providing valuable cash flow advantages for what were substantial investments, as well as, the flexibility that has streamlined the process of buying the equipment. Confidence is at the heart of many success stories and we hope that by continuing to support the manufacturing sector by funding investment, we have a role to play in continuing to strengthen the success story that is UK manufacturing.

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IOSH

MANUFACTURING LEADERSHIP

Deeds not words Liz Skelton, Chartered Member and Vice President of the Institution of Occupational Safety and Health (IOSH), played a part in judging the TMMX Awards. She shares her thoughts on what it takes to be a good strategic leader.

reaping the rewards of the team’s cumulative efforts. I believe the same philosophy can be applied in other walks of life, and especially in business. As part of the judging panel for TMMX Awards’ Leadership & Strategy category, I was able to see first-hand, UK manufacturers benefitting from sharing this belief. We visited each of the seven nominees to assess their business strategies, in particular looking at their culture around safety and health and for examples of inspirational leadership. The nominees were a real mix of SMEs and big organisations which specialised in a variety of traditional and modernday manufacturing Key to their success was an unwavering processes. We learned from senior dedication to implementing a philosophy of management about each marginal gains business’s strategy, how it was implemented throughout the company and the end results. There were some great examples vision and explored in minute detail of businesses walking the talk. As where performance could be improved. one nominee told us it is about deeds, When combined, all of these not words. minor gains served to help catapult Generally, the visibility of the the team ahead of its opponent, with business’s strategy was crucial in Sir Bradley Wiggins and Chris Froome t might not appear obvious at first, but a successful manufacturing operation can learn a lot from Team Sky. When the British professional cycling team was set up in 2010, its main strategic vision was to win the Tour de France within five years. Fast-forward to 2015 and the team have not only won the Tour de France once, but three times. Key to their success was an unwavering dedication to implementing a philosophy of marginal gains. Everyone in the team, whether they were a rider, manager, mechanic or medical professional, bought into the

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Being involved in judging the TMMX Awards has left me feeling hopeful about the future of British manufacturing

ensuring that everybody across the board knew what the vision was. Some of the nominees used great visualisations and real-time information on the shop floor to get across to workers how their performance contributed to fulfilling the business’s goals. The firms also took behavioural safety seriously and appreciated that general risk management plays a part in shaping any strategy. These companies had a clear understanding of the difference between risk and opportunity, and how some risks can be made into opportunities. They also had an end point to their strategies, and knew how to get there. The key thing for me is that a business strategy has got to be more than just an appreciation of lean manufacturing. It shouldn’t just focus on how the business can achieve better productivity, but should look at all facets of operations. Being involved in judging the TMMX Awards has left me feeling hopeful about the future of British manufacturing. I saw businesses with strong strategies that embraced opportunities for good quality and innovation. If every SME could take on board some of the lessons learned from the companies we visited, then UK manufacturing will be in a much better place.

FURTHER INFO: IOSH is co-sponsor of the TMMX Awards 2015. It is the Chartered body for safety and health professionals, with more than 44,000 members in 120 countries. Visit www.iosh.co.uk for more details.

Lloyds Bank

MANUFACTURING LEADERSHIP

Manufacturers are reshoring for a wide range of reasons, from an altruistic desire to see UK PLC succeed, to wanting better control over quality

James Walton, Head of Manufacturing, MidMarkets, Lloyds Bank plc Commercial Banking, discusses the bank’s latest research into the prospects for automotive sector manufacturers in England and Wales.

very year at Lloyds Bank, we survey the UK’s automotive industry as part of a series of reports that get under the skin of key manufacturing sectors in Britain’s economy, examining the core issues, from employment and innovation to policy and productivity. The UK is home to a diverse range of car manufacturers and supply chain firms, employing almost 800,000 people sector-wide. And this year the report feels particularly pertinent. Seldom has an industry dominated the global news agenda like the automotive sector has in 2015. The UK industry has continued its renaissance, having bounced back with vigour since the dark days of the late noughties’ economic downturn, outperforming the wider manufacturing sector and growing on average 3.1% every quarter. Automotive manufacturers told us they expect to grow revenues by an average 14% over the next two years - creating on average 33 new jobs in the process and 58% plan to achieve that growth by innovating new products.

China

Research respondents said they want to expand across the globe, with 74% investing in or planning to engage new international customers, but inevitably, given the international markets many already operate in, global instability threatens to drag on their prospects. When asked what they felt were the biggest challenges for the automotive industry in the next two years, the top concern remained the global economy for the second year running, mentioned by 43% of respondents in both 2014 and 2015. China, in particular, has been a hugely successful and profitable market for premium UK marques, but the slowdown in that economy has the potential to permanently impact margins. Subsequently, 27% said they were targeting the Far East and Asia, down from 41% a year ago.

Return to sender

labour costs, with 58% now planning to reshore some element of manufacturing back to the UK. Manufacturers are reshoring for a wide range of reasons, from an altruistic desire to see UK PLC succeed, to wanting better control over quality. As in so many sectors, skills is also an issue for automotive manufacturers. We’re doing our bit to tackle that concern and have invested in a £1m-ayear sponsorship of the Advanced Manufacturing Training Centre in Coventry. The centre will develop more than 1,000 engineering apprentices and trainees during the initial partnership period.

The future on four wheels

Looking even further into the future, the falling cost of intelligent robots has the potential to accelerate the repatriation of more car manufacturing away from lowcost locations like China, back to hi-tech factories in the UK. Firms are also planning fundamental changes to cars themselves, which are primarily being driven by advances in innovation that are making vehicles cleaner, safer and more fuel efficient. Currently, one in every three cars on UK roads is fuelled by diesel, a technology with an uncertain future because of the level of pollution now accepted it produces. UK manufacturers are set to scale back their investment in diesel, opening the door for more hybrid, electric, lightweight and even driverless vehicle innovation. Who knows what kind of cars we will be driving in 20 years’ time, and how they will be manufactured? Whatever the future holds, we can be confident that the UK will remain a driving force in the industry. FURTHER INFO:

One positive impact of the instability has been the move to reshore manufacturing that had previously been taken overseas, primarily to take advantage of cheaper

Read the automotive report here www.lloydsbank.com/ automotivereport.

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The true cost of MRO

he complexity of MRO procurement means that organisations spend a disproportionate amount of time sourcing and purchasing items that are of relatively small value, both individually and in total. These process costs are largely invisible, and therefore tend to be underestimated or even ignored, but can be significant. To put it into perspective, if an organisation’s MRO product spend budget is £100,000 it is actually spending more than £300,000 in total procurement costs.

MRO complexity disguises savings opportunities

MRO is complex. Multiple stakeholders, multiple sites, diverse product sourcing, numerous suppliers, inconsistency of procurement systems employed and other factors all add to the complexity; and that complexity adds to the cost. Yet, when companies evaluate costdrivers within their organisation, often MRO costs are overlooked, as costs historically are only on average 20% of the total cost of goods sold (COGS) for a typical company. This low percentage of COGS leads companies to focus their attention elsewhere in reducing costs – usually trying to concentrate on becoming

RS Components (RS) shares its white paper, part of a series covering best practice maintenance, repair and operations (MRO) procurement, exploring why its complexity can disguise the scale of its costs, as well as, frustrate attempts to achieve cost savings. efficient in sourcing and procuring direct goods. Such lack of focus on MRO, leads companies to use a price-led procurement strategy which, though successfully implemented in direct procurement, is counterproductive in MRO. Yet MRO processing costs typically represent 80% of the organisation’s total processing costs. From a financial performance perspective, whilst it takes a 10% increase in revenues to achieve a 20% increase in earnings per share, a one per cent decrease in operating costs gains the same result. With such huge tangible returns, it is essential to look afresh at the cost structures, especially product and process costs, through a total product procurement (TPP) perspective, rather than through the narrow lens of direct goods procurement or price reduction.

A fresh look at cost components

Product costs, which are visible on invoices, make up about 60% of the total procurement costs, while 40% of the purchasing expenditure is spent on non-production activities. These costs are made up of process costs incurred in sourcing, procuring, stocking and managing the products. The numbers for process costs can be significantly higher

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in various industries, especially those with multiple sites and non-standard procurement processes. MRO product purchase costs account for a maximum of 15-25% of these invoiced costs. The number remains small as these products do not constitute a part of the end-product, but are about ‘keeping the machines running’ effectively and efficiently. Though this is unsurprising to experienced procurement professionals, it enables us to put a monetary value on MRO process costs to show their ‘expensiveness’. It also enables us to see and compare MRO product and process costs together and so come to multiple decision points. These insights on the enormity of MRO process costs were corroborated

It takes 10% increase in revenues to achieve a 20% increase in earnings per share; whereas it only takes a 1% decrease in operating costs to gain the same result

RS Components

from multiple white papers by a team at Manchester Business School (MBS). Whilst some have mentioned it through workload terms, such as the one by Van Wheele (2005) which states: “’Typically, MRO items account for 80% of the procurement department personnel workload’; or in terms of number of dollars by Hawking (2004) ‘[while] indirect purchases account for 80% of total number of purchase order’, or in dollar terms as stated by Roth (2008) ‘MRO represents about 20% of the total spending for materials, but consumes about 80% of the process expenses.” Though these cost components were known, what was not clearly stated, which this study with MBS brought to light, was that about 80% of the process costs could be attributed to MRO processes (Figure 3).

Implication

The MBS research shows the interrelation of workload, pounds spent and number of orders to make the conclusion that organisations spend a disproportionate amount of their time procuring MRO items which are of a very small value, both individually and also in total, so fitting the Pareto split perfectly. The implication is that MRO costs as a whole make up 47% of product procurement costs.

MANUFACTURING LEADERSHIP

If the total product procurement costs are now rearranged to look at MRO costs together, and direct product costs together, it becomes apparent that MRO constitutes 47% of an organisation’s material procurement costs (Figure 4). This is a critical insight that has, until now, never been backed up by quantitative analysis. On an individual product basis this has been mentioned in white papers, Roth (2007) states, “an average per purchase procurement processing cost of £100. When you compare this to the average MRO order purchase size of £100 that means for every average purchase there is a 100% increase in total costs due to soft dollars”, however such small amounts aggregated across all your process costs result in a significant spend size. This means that if your MRO product spend budget is £100,000 then you are spending £300,000 in your total procurement costs.

Conclusion

As it is such a major component of an organisation’s procurement costs (47%), and as it has unique characteristics, MRO procurement needs a deeper understanding and a refocus. With process costs representing as much as double the average product costs, MRO process costs can present a great opportunity to realise significant cost

Methodology This study was created in collaboration with Manchester Business School. The project methodology included primary and secondary research. Interviews with Academics from the University of Manchester and industry Subject Matter Experts (SMEs) related to MRO procurement and also a web survey formed part of the primary research. The secondary research phase involved studying materials related to the project in the form of white papers, published papers, articles, other professional publications, the MBS library databases, internet sources and information shared by RS during client meetings.

savings, through various acknowledged procurement improvement strategies. This, along with the understanding that MRO, through its unplanned nature, is different from direct procurement, leads to a conclusion that MRO procurement strategy needs to have a different and an equal focus in cost saving strategies. The various cost saving strategies will be covered in our forthcoming white papers.

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Damien Montagne, European Sales Manager, Loadhog Ltd

EMPLOYEE OF THE MONTH Dec-Jan 2015/16 Damien Montagne European Sales Manager Loadhog Ltd

EMPLOYEE OF THE MONTH

What is your role and what are your main responsibilities?

The sole purpose of my position is to drive sales of the company’s innovative reusable packaging range in Europe and the Middle East, with France, Germany and both south and central Europe the focus presently. This involves regular telephone and email contact plus frequent visits to the relevant areas to sustain strong relationships with existing customers and to establish the same with new ones.

now three people involved in driving Loadhog sales in a number of regions. There is one salesperson dedicated to business in France and another in central Germany – plus me! Interest is growing fast in the Pally, the Loadhog Lid, the Attached Lid Container and the HogBox.

What are the most rewarding parts of your job?

The fact that Loadhog is an employee-owned company makes me a shareholder along

What are the key technical skills you use?

Undoubtedly my ability to communicate in German and Italian, and of course in English and French, has contributed enormously to enabling me to cement relationships with many overseas customers and to understand their requirements.

CV IN BRIEF Damien Montagne Age: 33 Education: I was born in St Étienne, in France’s Loire region, and my early education was in Belfort in eastern France, where my best subjects were business and technology. I graduated in 2004. Career to date: My first job was within the Gripple family, after I came to the UK in 2002 for a six month placement. At the parent company I was appointed regional sales manager for Gripple’s agricultural products. I moved across to Gripple’s sister company, Loadhog in 2010 as European sales manager. Hobbies and interests: As a Frenchman my hobbies are obviously headed by an interest in wine - how it is produced and what it tastes like! I also enjoy running and mountain biking. Last year I married my wife Sarah, who is English.

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The fact that Loadhog is an employee-owned company makes me a shareholder along with all my colleagues and we are all pushing in the same direction

What personal characteristics help you in your role?

Many of my colleagues, friends, and even my wife, say that I am charming, personable and pleasant and who am I to argue? I am sure these important personal characteristics unquestionably down to my Gallic heritage - are invaluable when building worthwhile customer relationships.

What do you consider to be your biggest personal success at the company so far?

No hesitation here! I am extremely proud that European sales have grown from scratch, since I joined the company to today, where there are

with all my colleagues and we are all pushing in the same direction. I am empowered to have a say in how things are run within the company and important decisions are made quickly. Understandably securing an order is always a major highlight for me and thankfully this is happening more and more often.

Do you have a career ambition? My ambition is to maintain my total focus on making a major contribution towards building Loadhog into a worldclass manufacturer, which continues to launch even more innovative products.

EAL

The Industry Apprenticeship Council outside the Houses of Parliament

Pump priming the skills pipeline

High quality apprenticeships are vital to the UK’s advanced manufacturing sector and question marks over the use of the term in some industries should not be allowed to dilute their relevance says EAL managing director Julia Chippendale.

hen the recent Ofsted report suggested too many apprenticeships were of poor quality and failed to provide the skills and knowledge employers required, my heart sank. As the debate over the skills landscape rages, EAL and the Semta Group as a whole has been consistent in warning the apprenticeship brand should not be devalued with too many low-skilled roles being allowed to use the term for their training schemes. An apprenticeship in our sector provides a direct, rigorous and effective pathway to a career. EAL qualifications sit clearly within apprenticeship frameworks and act as a guarantee to

We have to redouble our efforts to differentiate the real high quality apprenticeships providing high level professional skills from those that don’t

WORKFORCE & SKILLS

current and future employers that each apprentice has the skills and abilities needed to succeed in industry. Apprentices are given the opportunity to flourish, learning practical and relevant skills while gaining a genuine understanding of the workplace. They are often over four years, can lead to degree equivalent qualifications and in many cases are more valuable to employers than academic qualifications alone. It is why we have to redouble our efforts to differentiate the real high quality apprenticeships providing high level professional skills from those that don’t. The Industry Apprentice Council, set up and funded by EAL, has become a positive force for change. But the young apprentices from a range of companies have consistently highlighted the stigma and prejudice they faced following the vocational route, proving there is much work still to do to have apprenticeships seen on an equal footing with universities. We also need to keep those with higher level STEM skills in industry – there is no shortage of qualified personnel but too many of them go

outside of STEM when they graduate - for example 12,000 engineering graduates work in the financial sector. We must work even more closely with employers, regulators, government departments and agencies to ensure sufficiently robust qualifications and skills development are achieved through high quality vocational education and training. Too often the focus is on large employers when it is in fact the supply chain – those small and medium enterprises – where innovation is the engine which is powering the UK’s economy. They need the support. If employers don’t have a workforce with the right skills they will struggle to keep up with established nations such as Germany – where engineers are revered and there are 40 Level three apprentices per thousand employees (it is six in the UK) - and the emerging economies such as India which is producing 1.5 million engineers a year. It is the global skills landscape where we need to compete but in order to so we must radically change attitudes to vocational skills among academics, government, teachers, parents and some young people themselves if we are to see the UK remain a world class, thriving manufacturing base. It is more important than ever to equip the workforce with the skills and attributes employers are looking for. Semta and EAL will continue to do what we can to ensure this happens.

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Boosting the UK’s competitiveness: (l-r) Carole Burke, Unipart Manufacturing, John Neill, Unipart Group and Carl Perrin, AME

To the next step

riving down Beresford Avenue, on a foggy day in October, the Institute for Advanced Manufacturing and Engineering (AME) seemed to emerge from nowhere between the generic three bedroom terrace houses. I am told that when my former colleague visited the site, little over a year ago, much of it was still under construction, but today the site is a shining, lean example of the perfect union of academia and industry. The immaculately smart AME building stands

Just over a year after its grand opening, Victoria Fitzgerald takes a trip to the AME in Coventry to provide an update on the UK’s first “Faculty on the Factory Floor”. adjacent to Unipart’s exhaust and fuel systems production factory, and it is a bustling hub of R&D zeal. The initiative began, Carl Perrin, director of AME, tells me, as a new approach to developing graduate engineers to address the skills gap. “What we set out to do was prove a different model, the need was an industry pull, that manufacturing businesses were struggling to hire good people, who were industry ready.” Known as the “first factory on the

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factory floor” the AME is a collaboration between Coventry University and manufacturer Unipart. Its aim is to create mutually beneficial relationships between academia and industry, ultimately “futureproofing” manufacturing by providing industry ready employees. Almost a year to the day it opened in 2014, industry leaders, academics and students gathered to celebrate the achievements of the initiative so far, of which there are many. Right now the AME is involved in seven funded R&D projects, has invested £3m in machinery, and delivered 20,000 of ‘live’ manufacturing learning, all within its 1,700 metre squared manufacturing and learning space. The AME boasts a 100% full house of students for its first two years and it’s these students who provide the greatest testament to whether the initiative is working. The concept of uniting industry and academia produces several reservations: whether students receive the full

AME

university experience; if time spent on the shopfloor neglects study; and if industry is truly benefiting. During my tour, I caught up with three second year students, all of whom were more than complimentary about the course, compliments which continued even out of earshot of their watchful tutors. Student Nicholas Hugill explains to me, “I’m in at nine every day, I won’t finish until four or five and I’ve still got work to do when I get home, it’s just like having a full-time degree. “Everyone thinks that being a student is really easy, you get out of bed at 11 o’clock, but it doesn’t feel like that on this course.” We need to credit the students’ desire to attend university as more than an opportunity to doss around for four years, it seems the AME students are part of a new breed of committed and ambitious young people who are eager to create a difference in the world. Hugill tells me that although being thrust into the unforgiving world of work, it has propelled him forward beyond how any regular degree might have equipped him. “Presenting my ideas to Unipart and receiving industry-relevant feedback from the team. That was within the first six weeks of my project, which was nerve-racking, but it was great, I had only done 12 weeks of my degree. If I had used the normal route, I wouldn’t have got that until four years later or on a graduate work scheme,” he says. His peer, Maria Maynard-Bligouras, also in her second year, concurred on the benefits of AME’s methods, saying, “Seeing that what you are doing actually has practical applications is the greatest part of it. You know that you are not learning anything for nothing because you can use it practically.” Certainly the students didn’t think they were missing out on anything, but it is reasonable to highlight that a four-year engineering/manufacturing degree requires a particular amount of theory, so is removing that period taking away from the learning? I broached the question with John Neill, chairman and group chief executive of Unipart group and he assured me that if anything this approach enhances the learning rather than take away from it, “If you learn in the morning and do in the afternoon it sticks. If you don’t do it, you might have to go and read it four or five times. It’s more motivating to learn because you

WORKFORCE & SKILLS

Existing projects include:

£780,000

£1m

Next generation fuel rail for Ford Motor Company

£550,000 To develop a lightweight exhaust system for Jaguar Land Rover

To progress Working Towards Zero Prototyping

£150,000 To create a lightweight ‘halo’ exhaust system for Aston martin

have to know what do to in order to complete the tasks.” Ian Wilson, manufacturing course director wholeheartedly agreed with Neill, “The course content has to go through the engineering council, then we have to talk to industry. There’s the same rigour of assessment as other degrees. They are missing out on nothing, they are getting more.” But is the AME achieving successful engagement with business? James Simester, technology director at AME, explains “We are well on the way to meeting our vision of becoming a world class R&D centre, delivering innovative solutions to industry.” Several supply chain partners are already involved in seven R&D projects and they expect this number to grow. Aside from the students singing its praises, the past year has had its challenges. Neill, explains it required patience, “Bringing together wellintended people from different backgrounds and getting everyone aligned in theory is easy, but in practice is very difficult and it takes time. “In the world of manufacturing the production line is unforgiving, but in the world of academia it’s different, the culture, the way people think and expectations are different.” Regardless of the challenges Neill is delighted with how the institution has grown, he explains, “Skills was definitely the starting focus, but this quickly accelerated to look at how we could develop a world class R&D centre that

We are aren’t going to talk anymore about how this is a new thing because we’ve done it. We need to get down to business as usual and grow the business, that’s where we are taking AME now Carl Perrin, Director of AME

focuses on exploring new technologies for existing and new clients in automotive, aerospace, rail and renewables. “We believe AME offers the opportunity for the UK to improve productivity by translating the knowledge and problem solving capabilities of our people into real competitive advantage.” A year on, supporters of the initiative came together to toast its achievements, however, Perrin called it an opportunity to “draw a line in the sand”, he elaborates, “We are aren’t going to talk anymore about how this is a new thing because we’ve done it. We’ve got two years’ worth of students, and at least a year’s worth of projects that are coming through to market. “We need to get down to business as usual and grow the business, that’s where we are taking AME now.

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DWF LLP

FINANCE & PROFESSIONAL SERVICES

Be prepared Paul Matthews, Regulatory Partner at DWF LLP offers a warning to all manufacturers to be aware of hefty new penalties under the biggest regulatory change to health and safety sentences since the 1970s.

n November 3, 2015 the Sentencing Council published new guidelines on health and safety offences, corporate manslaughter and food safety and hygiene offences guidelines. They represent the biggest shake up to health and safety since the 1970s, bringing fines on a par with offences such as competition breaches and bribery. The guidelines link fines directly to turnover, and provide starting points and ranges for fines. They will result in significantly increased fines, especially for large organisations, which are those with an annual turnover or equivalent of £50m or more. In relation to health and safety offences and corporate manslaughter, the guidelines expressly state that where turnover or equivalent very greatly exceeds the £50m threshold, it may be necessary to move outside the suggested range to achieve a proportionate sentence. Currently, a large organisation convicted of a serious health and safety breach could expect a fine somewhere in the region of £250,000 - £750,000. The tarrif proposed under the guidelines could see that figure rise to betweem £2.6m and £10m, or up to £20m for a Corporate Manslaughter conviction. All of the tariffs can be found within the guidelines themselves. Whilst the guidelines would not cover Scotland, they are likely to be taken into consideration by Scottish courts especially in the case of health and safety as the legislation is UK wide.

The new guidelines may have several unintended consequences, and pose various commercial considerations for manufacturers

They will apply to all cases sentenced from the February 1, 2016 regardless of the date of offence. The guidelines cover organisations as well as individuals in varying capacities including directors and employees. The reason behind their introduction in large part is due to the perception by Government that fines for these offences are too low for large corporates. However, health and safety fines have been increasing steadily over the last few years, but these guidelines will see health and safety fines reach new levels. They should remind organisations of the importance of complying with health and safety responsibilities, and of embedding a positive health and safety culture, with evidence of pro-active health and safety leadership by senior management. When a serious incident does occur, organisations need to demonstrate corporate resilience, be prepared to fully defend themselves from the outset and manage the situation properly, given potential consequences of getting it wrong. The new guidelines may however have several unintended consequences,

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and pose various commercial considerations for manufacturers. For example, turnover can be just one measure of financial performance, especially in the manufacturing sector where turnover may be high but profit margins low. When Courts sentence these offences, there should be a much closer scrutiny of wider financial performance and management. The manufacturing sector is already facing several economic challenges, these guidelines may be viewed as overly punitive, and could deter investment in an already difficult sector. Will they impact on lending as banks start to assess health and safety risk as part of their lending criteria in view of the potential for much higher fines and the impact on cashflow or underlying solvency? Organisations may also consider hiving off riskier activities and consideration may need to be given to the existing corporate structures. Fundamentally, higher fines won’t necessarilly encourage more compliant behaviour for larger organisations, which already invest heavily in health and safety, and they could potentially damage relationships with regulators.

FURTHER INFO: DWF LLP is a UK law firm with 12 offices across England, Scotland and Ireland. For more details visit www.dwf.co.uk.

Leyton

FINANCE & PROFESSIONAL SERVICES

The road to finance In the daunting world of R&D tax credits and funding, it is easy to be deterred by red tape and cumbersome processes. Guang Deng, Tax Director at Leyton gives his tips on navigating the minefield.

ith George Osbourne’s recent spending review, the waters by which SMEs can obtain funding are now muddier than ever. With several funds ceasing to exist, and new ones being named as long as you meet criterion X, Y and Z, it is more difficult than ever for businesses to find financial support. Funding is out there, but it is often hard to see the woods for the trees. And with more than 15 years of international experience at leveraging the tools and funding options available to its clients, Leyton is providing tailored advice to help manufacturers find the most applicable funding. “R&D tax credits are our bread and butter in the UK”, says Guang Deng Tax Director of Leyton. “Our breadth of experience and depth of knowledge enables us to have a half an hour conversation with any client to identify if they are in scope or not,” he adds. R&D tax credits are underutilised according to Guang, “Over the years that I’ve been doing R&D tax claims, the awareness factor has always been an issue.”

Many firms forget to look into R&D tax credits and many government-run agencies, especially those affiliated with tax, are often seen to be difficult to deal with. Instead, firms look to private equity as a way of raising extra cash for R&D but regularly have to trade control of their organisation in return for the funds they need. Guang’s advice for companies that want to raise extra funds without losing control of their business is simple; look to public funding, “You are better off looking at HMRC as a source of funding to actually reduce your R&D costs through the R&D tax credit.” “Or even, potentially, the new Patent Box scheme, which came into the market back in April 2013. This is essentially the reverse side of the same coin, where companies are incentivised to exploit R&D and intellectual property. “The UK is a good place to do business in and with. There is a lot of funding available for SMEs to tap in to and consultants to advise them. Whatever support firms are choosing, it is a question of what they want out of the relationship; and how do they go about choosing an advisor?

You have to choose an advisor with a good track record, an excellent knowledge of your field and a strong relationship with the tax inspectors on the ground Guang Deng, Tax Director, Leyton

“You have to choose an advisor with a good track record, an excellent knowledge of your field and a strong relationship with the tax inspectors on the ground” – Guang Deng, Tax Director, Leyton. And how should an SME know when to approach a consultant like Leyton? “The message I would like to get out is that companies that are being innovative, challenging the core competencies of their staff, reacting to commercial pressures, investing in software upgrades or even just fine tuning manufacturing processes, should consider contacting us.”

FURTHER INFO: To get the funding you are entitled to visit: http://uk.portal-leyton.com

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Siemens

MANUFACTURING SERVICES

#CustomerFirst

Graeme Coyne, Business Development Manager at Siemens Industry Services explains the firm’s position in the manufacturing services landscape. Sum up Siemens’ experience with manufacturing services to date, both within its own operation and that of its customers?

Our customers in all manufacturing and process industries have benefited from Siemens UK support services for the last 50 years. Our own manufacturing facilities in this country have improved

There exists within the Siemens Industry Services global community, that comprises over 20,000 staff, a culture that challenges us to continually evolve our service offers for the benefit of our customers

productivity and availability through lessons learned, attention to lean manufacturing and continuous improvement. We use this knowledge to offer the same to our customers. As new products and systems are brought on to the market, and as customers focus on operational costs over the lifetime of a production facility, our technical support, product training and service capability has to evolve to meet and anticipate new demands.

collect data from them to analyse machinery condition and performance as they are running. It is now possible to set up customer dashboards that show them machines that have reduced performance, lower quality finished products and higher energy usage. That allows the customer to compare different performance indicators in a single or multiple locations and take the appropriate remedial actions.

As pressure on industry continues to grow and global competition increases, how do Siemens’ Industry Services enable manufacturers to tap into the potential of their machines and plants?

How do these services feed into Siemens’ larger vision of an intelligent digital infrastructure to enhance existing systems in cities?

The last 20 years has seen a standardisation of industrial networks to connect automation, drives and instrumentation products. We took the approach of adopting open standard networks that allow all product suppliers to connect on to a common bus based on copper, fibre optic or wireless. Our service teams are able to use the power of the networks to diagnose faults quickly and efficiently and to rectify them in a timely manner. Using the Siemens Industry Online Support website we are able to provide technical information and advice 24/7 as worldwide users contribute to our knowledge base. The SITRAIN department offers structured training programmes for all levels of staff from apprentices to qualified engineers to help customers be self-sufficient.

With the importance of data ever-increasing, how does Siemens’ offering – Plant Data Services – help to optimise overall plant efficiency and that of individual machinery?

The recent shift is to offer a proactive rather than reactive approach to service. Data Services use the established networks and intelligence built into the connected devices to

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The data services backbone is our standard internet enabled nodes, industrial networks and the cloud-based services using SAP Hana. These are equally suited to manufacturing and buildings, transport and utilities that are essential to our cities. The global population is expected to grow by 2 billion by 2030 and there is a constant shift of the population from rural to urban dwelling. Using our data, services customers will be able to monitor and reduce energy usage and optimise their operational costs.

What role is Siemens playing in driving a wider adoption of manufacturing services across industry?

Siemens is spending more time collaborating with bodies actively involved in the service industry. We have considerable experience in product services, however, the move to servitization by our customers leads us to develop new service strategies with bodies like the MSTLN, the Service Community and to be involved with Through Life Engineering Services and the Cambridge Service Alliance. There exists within the Siemens Industry Services global community, that comprises over 20,000 staff, a culture that challenges us to continually evolve our service offers for the benefit of our customers.

Aston Business School

MANUFACTURING SERVICES

The many cloaks of servitization Tim Baines, Professor at Aston Business School, highlights that although servitization has many guises, at its heart the message is the same: that the innovation of services is becoming increasingly important to manufacturers.

here is a growing recognition in the manufacturing world that a sustainable future for the industry lies in moving away from concentrating efforts on products and production, and toward a services focus. The terminologies used globally for this development vary; in Germany researchers, policy makers, and industry leaders are engaged in a debate around Industry 4.0; in Scandinavia it’s product-service systems; UK companies focus on servitization and the circular economy; the US discusses servitization and service innovation. Nevertheless, the main message is very clear: innovation of services is becoming more and more important to manufacturing firms worldwide. The process of servitization means not only the development of a service offering, but also the integration of new technologies that enable the offering, and an accompanying widespread organisational

transformation. The kinds of advanced services offered by Rolls-Royce and Xerox incorporate maintenance, repair, and overhaul contracts that link revenue generation directly to asset availability, reliability, and performance. Providing this kind of cradle-to-grave service requires dedication, flexibility, and a will to collaborate across the entire organisation. A key element of the change required to be able to compete through services is a greater customer intimacy. In the traditional manufacturing world, products were designed and produced, then sent to a showroom in anticipation of a sales transaction. Designs were informed by analysis of customer trends, innovation was centered on product features, and satisfaction was recorded by after-sale surveys. To manufacturers in this world, service meant order fulfillment, on time and on budget, and an associated warranty programme; customers were remote from the manufacturer and

The proportion of companies competing through services contracts or products-as-a-service is expected to increase by over 150% in the next three years

the manufacturer had little knowledge about how the product was being used, and how it was performing, once it was sold. Servitization, in contrast, promotes close, long-term customer relationships. With advanced services in particular, the focus is on the customer’s internal business processes; the manufacturer goes beyond simply offering a product, to provide offerings that meet the customer’s own KPIs for efficient and effective operations. The manufacturer bundles together products and services to deliver a capability that provides a defined outcome for the customer. Example outcomes might be ‘number of passengers moved on time’ for the Alstom Transport contract with Virgin Trains. These offerings manifest usually as 10-year service contracts, under which the manufacturer takes on some of the risk around fulfillment of the outcome, and the customer pays as the capability is consumed. Another example of an advanced service is the use by Hoyer, a German logistics company based in the United Kingdom, of trucks provided by MAN on a payas-you-go basis. Costs are based on miles driven, so Hoyer only incurs an expense when it is generating revenue; it doesn’t pay when its trucks are out of action, thus reducing hugely the cost burden of asset ownership for the customer. Although the adoption of servitization is arguably in its infancy, the ambition is clearly there, and I see it regularly whenever I engage with manufacturers large and small. One of the most reliable studies available is a study by Oxford Economics, which conducted an international survey of almost 400 senior executives from industrial sectors. The analysis showed that the proportion of companies competing through services contracts or products-as-a-service is expected to increase by over 150% in the next three years. My role as an academic is to help manufacturers understand the phenomenon and its many benefits and examine the many practices and technologies of servitized and servitizing companies to piece together and share a picture of how companies successfully adopt servitization.

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Colt conditions Colt International’s Engineering Director Paul Langford discusses the value in technology and how employee engagement is inextricably linked to the value gained.

attended The Manufacturer Annual Leader’s conference and The Manufacturer Top100 events in Birmingham this year, for the first time. As you would expect there was a variety of interesting speakers, many focusing on how technology, and in particular the internet, has changed the way we operate our businesses and the products and services we offer. Then a speaker reminded us all of the most important thing to get right when implementing change or looking to improve the operation of our business: the people. They are also going to give the biggest return on our investment. IJ O’Hea, who founded Colt in 1931, believed that the people were a company’s greatest asset. He is not alone.

A valued workforce can make the biggest impact on a factory’s productivity

It made me think that actually, there are some constants in life, and for that matter business – and that is people. Creating an environment where your workforce feel valued and respected results in motivation and loyalty. Motivated staff bring results; higher productivity and lower absenteeism. Studies have found if employees are engaged, they put in twice as much effort, and will take just two and half sick days/year instead of six and half. This involvement leads to staff identifying with the company, its products, and sharing the corporate values. Engaged employees will have ideas on how to improve the business; ideas that often have the biggest impact on output and efficiency because they are the ones who truly understand the

process or product at a nuts and bolts level. I saw this first hand when I was responsible for the Colt manufacturing plant in Havant for the period running up to the financial crisis and in the recovery years that followed. We were fortunate enough to have a range of product lines targeted at different parts of the market, which helped us weather the storm. One product in particular was new to the market at the time; it was low energy and environmentally friendly, so it had caught the interest of some our key customers and sales were climbing. The production line was fine for the early stages of the product life cycle but it became clear that soon sales would outstrip production capacity. We set a goal of doubling capacity and halving the production cycle time, but staying broadly within the existing floor area and at minimal increase in head count. We sought advice from an external advisory service to help with this. After three sessions the production line team presented their idea: they had concluded that, with a small investment and a marginal increase in head count they could quadruple production capacity and reduce the cycle time by more than 60%. They decided that our target was not a limit but a starting point. We implemented the changes and their belief was borne out. That team continued to find ways or re-inventing how they did things to improve their performance – it was their production line after all.

Technology enables us to maximise the potential of our assets

This is not to say that technology doesn’t have an important role to play in

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Creating an environment where your workforce feel valued and respected results in motivation and loyalty

helping us improve the way we do things in our factories. And it’s not necessarily the most advanced technologies and innovations that will make a big difference. I spend a lot of time on manufacturing sites and I find the relentless drive to increase productivity, reduce waste and minimise the energy consumed to produce the end result is a constant. We now benefit from technology that allows us to capture data and quantify our processes, so highlighting opportunities to gain a few more percent of efficiency. We found that when our electricity supplier installed a new metering system we suddenly had access to half hourly data on energy consumption. This enabled us to understand our base load and highlighted times when machines were left running, consuming power, when they were not required. Technology provided us

Colt

with more detailed information that made it possible to use our electricity more efficiently. As we go forward, progress will enable us to capture more data, more easily and more quickly, offering greater opportunity to continue improving our facilities’ efficiency.

A comfortable workforce is a productive workforce

We strive to maximise the potential of all of our other assets, like our machines and process lines, but how many people put the same effort in to ensuring we achieve maximum performance of our most important asset, our staff. There should be no limit to our efforts here – they will always be rewarded. Our marketing department recently found the original artwork for the advertising campaign that Colt ran through the 1960s, 70s and 80s. I thought it was interesting that a series

MANUFACTURING TECHNOLOGIES

of adverts was devoted to the impact of poor working conditions on the morale of shop floor staff. On this page you can see one that was published in February 1977. This message is just as relevant today, in fact more so as people are more mobile than they were 40 years ago. Technology can help us create the comfortable conditions our staff needs to work at their best. Factories can suffer when temperatures rise during the summer months. Surveys have shown that every degree above 20oC can reduce productivity by as much as a 4 percent: when the working environment is too hot, people work less efficiently, while accidents and absenteeism tend to rise. Cooling the factory shop floor is essential for the wellbeing of the people working in this environment and to keep productivity levels high. Conventional air conditioning systems are not a viable solution: they are

expensive; installation costs are high, and so is the energy they use to bring the temperature down to desired levels. Fortunately, new technologies such as evaporative cooling are now available, offering cost-effective solutions for production facilities. Providing comfortable and safe working conditions - that’s what Colt is about: we provide the systems that will help create a pleasant climate inside a building, with a good light and air quality, and that will keep people safe in case of fire. For industrial buildings, our solutions deliver great working environments in food processing, automotive production, printing, and general manufacturing. That’s why we say that people work better in Colt conditions. One of I J O’Hea’s favourite sayings was ‘the sky is the limit’ and I think that was never more true if you think of where we are today.

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-mation technology Jonny Williamson gets his head in the cloud while attending Inforum Europe 2015.

n the past five years, Infor has seen cloud adoption among its global customer base skyrocket from zero to 45 million users across 96 different countries. That’s an impressive figure in anyone’s book, but particularly relevant to the UK with its somewhat hesitant embracing of this paradigm shift over the same time period. But what’s driving this mass migration towards adopting cloud technologies, and what additional opportunities are they leveraging that those who remain on the ground aren’t?

Cloud nine

Cloud computing is essentially the delivery of hosted services over the internet, enabling businesses to deploy IT resources as a utility – exactly the same as water and electricity – rather than having to invest in building and maintaining expensive physical infrastructure. According to many, the three primary benefits of cloud computing are: selfservice provisioning, scalability and pay-per-use. All three help increase business agility, which should make transitioning to the cloud at least on the radar, if not a priority, for all companies, but especially manufacturers.

The world’s industrial landscape is advancing at an impressive rate, creating rapidly changing market conditions and escalating global competition. With new disruptive technologies being regularly encountered, organisations with onpremise infrastructure can struggle to keep up. Conversely, manufacturers utilising cloud deployment avoid the burden of frequent upgrades and added new functionality, aspects managed by the solution provider. Equally, a lower subscription fee has become increasingly more appealing to cash-strapped businesses looking to avoid a finance-heavy, one-time capital investment.

So, where does Infor fit in?

The US-based enterprise software company’s journey into the cloud really took off as part of a major transformation spearheaded by new CEO, Charles Phillips. In his keynote speech welcoming delegates to Paris and Inforum Europe 2015, Phillips noted that Infor has made significant recent investments focused on brand, people, customers and products. “Infor has really focused on some key areas to evolve our company: firstly, our decision to focus on micro-verticals;

Manufacturers utilising cloud deployment avoid the burden of frequent upgrades and added new functionality, aspects managed by the solution provider

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secondly, adopting and embracing open architecture; and thirdly, a big focus on user experience. All three of which have been key as Infor looked to transition to the cloud,” he noted. According to Lisa Pope, Infor’s senior vice president, global strategy for CloudSuite, this focus has generated three advantages unique to Infor; foremost of which is Infor Labs, its startup development organisation that exists to ensure that all of Infor’s applications are designed, developed and deployed for the cloud. Second is Infor’s 13 CloudSuites – industry-based, flexible packages combining mobile functionality, social collaboration and vertical-specific analytics, encompassing aerospace & defence; industrial manufacturing; food & beverage, and automotive, among others. Thirdly – and potentially the most critical - is Infor’s strategic relationship with Amazon Web Services (AWS); freeing it up to focus on developing industry applications and allowing AWS to deploy the applications, anywhere, anytime. Pope’s comments were reinforced by Infor president, Stephan Scholl, who observed that industry was at an inflection point in terms of technology infrastructure, suggesting that what Uber and Airbnb had done for transport and accommodation respectively, the cloud was doing for computing. Scholl moved on to discuss multienterprise ERP, describing industry’s natural shift towards contract manufacturing, with single products now being designed, financed, manufactured and distributed by different specialist companies working in partnership. “How do you manage that operation as a single company? All parties have a common goal, revenue; so what you need is a common commerce cloud for collaboration, what you need is GT Nexus,” he declared.

Infor

IT IN MANUFACTURING

All signs would indicate that the internet of things is happening, with or without the participation of individual companies; with the cloud serving as an easy-to-manage access panel

In October 2015, Infor acquired GT Nexus – the world’s largest cloud-based direct global commerce platform – for $675m

Enter the nexus

In October 2015, Infor acquired GT Nexus – the world’s largest cloudbased direct global commerce platform – for $675m. Approximately 25,000 businesses use GT Nexus, managing more than $100bn in goods each year, including adidas Group; Caterpillar, Maersk and Pfizer. According to GT Nexus CEO, Sean Feeney, the platform provides a global order management system that coordinates commerce across partners to manage and optimise shipments to meet demand. “The modern company is actually a network of many companies working together to respond to orders, to fulfil and deliver client commitments and to react to disruptions in supply. The new

strategic imperative is visibility, execution and control – across the business network,” Feeney explained. “What’s key is how companies exchange information and collaborate with another across their business networks. The stakes have never been higher, companies that can’t orchestrate will suffer. They’ll lack the agility, responsiveness, efficiency and intelligence to survive and win in their markets. “We are bringing logistics data onto the same user interface as ERP, integrating additional real-time analytics that includes what’s in transit. That’s a dashboard that only Infor and GT Nexus could build.”

On the horizon

The plan is to have Infor’s main ERP suites – Infor LN, Infor M3 and Infor CloudSuite Industrial (SyteLine) – integrated initially. This represents a major step forward for companies, according to Andrew Kinder, Infor’s vice president of industry and solutions strategy, who noted that modern manufacturers need something more robust than traditional ERP. He went on to discuss the findings of a survey Infor launched by Infor during the two-day event, which found

that uncertainty over who will drive a business’ internet of things (IoT) strategy was impeding adoption. Respondents also pointed to a lack of skills, unclear benefits and cost as being primary challenges to IoT implementation. “The research confirms that more than half [57%] of manufacturers recognise the potential and are either piloting projects [22%] or actively investigating use-cases [38%]. We expect more of these pilot projects to evolve into production-ready deployments over the next 18 months,” Kinder said. This should send a “warning message” to those who have yet to recognise the value, he urged, noting that with only 10% claiming complete readiness, there is clearly an “untapped opportunity ahead for companies with the right vision”. All signs would indicate that the internet of things is happening, with or without the participation of individual companies; with the cloud serving as an easy-to-manage access panel. As Amazon Web Services’ Boris Lecoeur cautioned; “The speed with which businesses embrace the cloud varies, but all are seeing benefits. Cloud is becoming the new normal. It’s no longer a question of if, but when you should make the transition.”

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Terry Scuoler - EEF

TALK OF THE INDUSTRY

The Parisian problem Christmas celebrations in Paris look set to be delayed for the UN negotiations on climate change which take place there over two weeks in December. Terry Scuoler explains.

iven the astonishing levels of international diplomatic activity, corporate and other pressure group interests being represented, the entire event looks unlikely to be a source of peace and goodwill to all men, but days and nights of long-discussions on hard fought political and policy principles. Yet, this is a fresh opportunity to establish a new and meaningful approach to tackling greenhouse gas emissions, now all the major players are coming to the table. The outcome of which could have a resounding impact for the world and generations to come if successful. The talks are welcome and important for industry, but they must avoid the trap of locking in unambitious targets and rapidly outdated goals that leave British firms – and the environment – at a major disadvantage. A large degree of the technology and innovation to deliver a sustainable climate deal is being developed by industry in Britain,

and represents a huge leap forward in terms of the potential benefits for industries across the manufacturing diaspora globally. Our companies are at the forefront of this leading the drive to improve efficiency and effectiveness, so the talks must not curtail them. Whatever the outcome in Paris, the immediate impact on manufacturers, will probably appear limited. However, the long-term impact could be cumulative. Industry is already governed by strict regulatory and fiscal frameworks under the EU and UK’s climate targets which run until 2030 and 2050 respectively and they are embracing the challenge this presents. Provisional figures for 2015 suggest the UK’s emissions are now some 36 per cent below 1990 levels – with a target of 50 per cent by 2025. Other countries’ commitments vary considerably, so ensuring British industry can compete will remain a constant challenge for the UK negotiations. We know that those negotiations are shifting away from the top-down

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The entire event looks unlikely to be a source of peace and goodwill to all men target approach that applies to the most developed countries, but will instead encompass individual emission reduction pledges. Despite this aggregate global emissions are likely to continue rising as countries continue to develop. China and India for example, two of the world’s top emitters, will see their emissions continue to rise, despite coming from a lower emissions per capita base. By comparison, the UK’s emissions are small but there is an argument that the more developed world should bear responsibility for legacy emissions, and the UK is likely to carry a proportion of that burden. Therefore, there is a possibility the impact of these talks could be felt more keenly by British industry and we will be watching closely. One thing is certain, the Paris talks alone will not fix climate change, but convening these nations and holding these discussions will I hope ultimately yield positive results, even if conclusions are not reached the Summit. They should be viewed as building blocks towards finding a global solution to a global problem, rather than as a barrier to growth and a burden to business. Remember this is just the start, a renewed opportunity for innovation and technological advancement - a chance for British industry to shine.

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