1Andrew Graves

Professor Andrew Graves 30th April 2010

Chevening Forum Innovation Centre, University of Bath

Is there a future for UK Manufacturing?

Creating and Sustaining Performance Improvement

Catalyst for Change I.M.V.P. - MIT’s International Motor Vehicle Programme

5DAYCAR / ILIPT Programme

Disseminating research ideas & results to other industries

UK L.A.I. with MIT Lean Aerospace Initiative

A.C.I. - Agile Construction Initiative

LFI Lean Flight Initiative

Creating Wealth

 Manufacturing  Agriculture  Mining

Why Manufacturing ?

KEY TO SUSTAINED GROWTH 5 Unique Characteristics

 Infinite Demand for Manufactured Goods  Drives Innovation and Technical Change  Powerful Internal Dynamic - Drives other Sectors  Generates Exports - Balance of Payments  Creates High Value Jobs and Support Industries

Queen Mary 2

Concorde

Ducati 916

Bullet Train Space Shuttle

19 70 19 72 19 74 19 76 19 77 19 78 19 80 19 82 19 85 19 87 19 92 20 03 20 09

Percentage %

Contribution of UK Manufacturing to GDP 41

37

33

29

25

21

17

13

Year

Balance of Payments UK deficit widens ---- £ Billion 12.00 10.00 8.00 (£) Billion

6.00 4.00 2.00 0.00

Q3

Q2

2006 Q1

Q4

Q3

Q2

2005 Q1

Q4

Q3

Q2

2004 Q1

Key Success Factors Affecting Industry Industry

Government Finance Market Distortion

Operating & Skills Competitiveness

Relationships within Industry

Industrial Competitiveness

Technology Competitiveness

International Collaboration

Government Policy

World Class Manufacturing & Engineering

 Reduced Costs   

Improved Quality Reduced Cycle Time Minimise Waste & Environmental Pollution

UK MANUFACTURERS

 Not all World-class  Productivity / Quality Crisis  Too few Producers

How did we get here

Crisis Management 1.

Denial

2.

Anger

3.

Prozac

4.

Resolution

The BIG BANG !

1986 Deregulation of Financial Markets

2008 Collapse of Lehman Brothers

The “Lending Game” finally stops.. !

September 2008

 Takeover of Merrill Lynch by Bank of America  ‘Nationalization’ of Fannie Mae & Freddie Mac – 50% of the $12 trillion mortgage market in the US

   

Bank of England offers £5 billion emergency lending £50 billion wiped off London shares FTSE 100 FALLS over 212 points Lehman London (over 5000 job losses) – highest since Rover

The “Lending Game” finally stops.. !

September 2008

 UK has £175 billion budget deficit (£1.3 trillion by 2014)

 HM Treasury spent £117 billion buying bank shares

 UK taxpayers liable for £850 billion of liabilities  Family liability £5,530 to £40,000 !  WW II debt repaid – December 2006

What is to be done  Financial Institutions ?  Knowledge Economy ?  Manufacturing?

The Knowledge Economy Delusion The Myth:

“ Economy based on creating, evaluating & trading knowledge ” “ The UK sells knowledge and makes nothing - but has skills that other countries will pay for ”

The Reality: “ China & India train more than

500,000 Engineering graduates per year and the UK train 20,000”

“ The Steam Engine was the Knowledge Economy! ”

Industry Challenges Two Supply Chains - Physical & Intellectual UNIVERSITIES INDUSTRY & UNIVERSITIES R&D

SCHOOLS & COLLEGES

INTELLECTUAL

OUTSOURCE CAPACITY OR KNOWLEDGE ?

ASSEMBLER

PHYSICAL

REGIONAL SOCIAL INFRASTRUCTURE

1st TIER

2nd TIER

FOUNDRY

MINES

“You learn by TRYING – not by BUYING”

The Vision 

To establish a national network of internationallyrecognised Institutes for the creation of world class knowledge in the areas of Innovation, Competitiveness and Product Development.



To increase the intellectual capital and capability of business, through an industry-government-academia partnership for Knowledge Creation and Transfer.



To improve peoples lives through the innovation of real world products, systems and services.

Industries Targeted



Aerospace



I.T. / Software



Automotive



Materials Processing



Construction



Multi-Media



Food



Telecommunications



Medical Instruments



Pharmaceuticals

Institute for Manufacturing COMPLEMENTARY SKILLS Develop & Demonstrate NEW Industry Government  Local  Agencies

• MATERIALS • PROCESSES • SKILLS

INSTITUTE PROVIDES THE INTEGRATING FUNCTION Proof of Concept Scale-up Real Costing

Universities Colleges Government  Europe  UK

Mission World-class Institutes designed to:  Develop innovative ideas for organisations dependent upon advanced technology for manufacturing or proficient, agile operations  Provide a focus for knowledge creation, technology transfer and innovation  Support both public and private sectors  An exemplar of advanced education / training in applied engineering science and technology



Vision



Professional knowledge 

Integrity

VISION  Right Vision & Goals  Targets – clearly articulated  Build: short, medium and long-term strategies  Not “joined-up” tactics

“ Strategy without tactics is the slowest route to Victory

Tactics without STRATEGY is the noise before defeat ” Sun Tzu 5th BC Military Strategist

The Century of Revolutionary Change 1900’s From Craft to Mass Production - From Steam to Oil - Telecoms - Automobile - Flight - Radio - Electricity

1960’s

From Mass to Lean Production Mass Transport (Boeing 747) Man on the Moon ICT, Internet, Telecoms Globalisation

1940’s Nuclear Power Television Jet Engine Medical Science Space Exploration

2000’s