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