Advanced Engineering in Scotland by We Are UMi

SPECIAL REPORT: ADVANCEd engineering in scotland spark of inspiration Engineering a future for the next generation global ambitions Turning manufacturers into export champions lean machines How shaping up can reap rewards

Confidence in manufacturing Scotland’s contemporary manufacturing sector presents a very different picture from the days of heavy industry and ship building, but its place within the Scottish economy IAN COLLINS remains key. Approximately Area Director, 8% of Scotland’s workforce Scotland South, is employed within the Bank of Scotland manufacturing sector, and the country’s manufacturing industry has grown by 4.2% over the past 12 months. Scottish manufacturers also help support a UK sector that employs 2.5 million people and generates £137bn each year. With austerity measures impacting the domestic market, the UK’s attempt at economic recovery is being powered by exports and with almost 50% of exports coming from manufacturing, the sector is central to Britain’s prosperity. A growing percentage of this market comes from exports to Brazil, India, China and other economies that were less affected by the 2008 global recession than those in the West. By supporting the UK’s position as the ninth biggest manufacturer in the world, it is obvious that the world still wants to buy Scottish. The manufacturing sector now needs the support of Government to help access new markets and train the next generation of workers. However, the sector also needs the support of a bank that understands manufacturing and has access to finance and guidance that matches the industry’s needs.

Our approach At Bank of Scotland, we invest in our Relationship Managers to advance their

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manufacturing knowledge and give them a greater understanding of the challenges affecting the industry. Through a collaboration with the University of Warwick we have created an informed, sector-specific training programme for our manufacturing Relationship Managers. This means that our Relationship Managers have a greater understanding of the sector’s unique banking needs. They also have access to banking products which give confidence to plan success and support growth ambitions.

Funding growth Whether it’s overdraft facilities to make the most of an immediate opportunity or longerterm funding to support strategic growth, we have a range of flexible finance solutions and products to suit the sector’s needs. With the growing focus on the export market, we also have international banking accounts which offer the flexibility, security and confidence to support overseas trade ambitions. At Bank of Scotland, we’re determined to be the bank of choice for businesses of all sizes in the manufacturing sector. Our Relationship Managers’ knowledge of the industry and the range of our banking services means we can bring a vital commodity to the manufacturing sector – the commodity of confidence.

The US remains an important market for the manufacturing sector and is showing signs of picking up this year

The decline of sterling against other currencies makes the UK manufacturing sector very competitive

Business confidence has improved in recent months and orders continue to climb

To find out how we can work with your business, please contact me on 07764 287 926 or email Ian.Collins@lloydstsb.co.uk www.bankofscotlandbusiness.co.uk

Any property given as security which may include your home, may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it.

All lending is subject to a satisfactory credit assessment Bank of Scotland plc Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Licensed under the Consumer Credit Act 1974 under registration number 0593292. We subscribe to The Lending Code; copies of the Code can be obtained from www.lendingstandardsboard.org.uk

CONTENTS

CONTACTS

06 news

room501 ltd Christopher March Managing Director e: chris@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk George Cheung e: george@room501.co.uk Euan Underwood e: euan@room501.co.uk

The latest stories from Scotland’s advanced engineering sector

14 ones to watch The innovative firms on track for widespread success

16 vital spark Engineering a future for Scotland’s next generation

22 The can-do clan The unwavering progression of a global empire

28 factory fitness Why manufacturers need to see productivity from a new angle

32 gentle touch Advanced technology powers major achievements in business

36 cutting edge Scotland’s fastest growing high-tech company opens its doors

46 on the hard stuff Scottish firms exploiting the most difficult oil and gas reservoirs

instilling global ambition

28 ADVANCED ENGINEERING IN SCOTLAND

SPECIAL REPORT:

ADVANCED ENGINEERING IN SCOTLAND

WELCOME Welcome to our BQ2 Special Report on Advanced Engineering in Scotland. The theme is ‘exploiting our advantage’ and really there are scores of companies across the country doing outstanding things. Many seldom get any public recognition for what they are doing day in and day out. The distinguished Professor John Kay wrote recently in his Financial Times column about what he called ‘manufacturing fetishism’ – the idea that manufacturing is the central economic activity and everything else is somehow subordinate. Well, we make no excuse for indulging in a bit of ‘manufacturing fetishism’ in this report. But what we also hope to do is point out that advanced engineering and manufacturing is hugely valuable to Scotland’s economy and must remain so. We need to ensure we are still exploiting our natural advantages in engineering and technology to ensure we remain in the top flight of the global game. Thanks to the Scottish Manufacturing Advisory Service, part of Scottish Enterprise and Highlands & Island Enterprise, for supporting this. Kenny Kemp, Editor, BQ Scotland

EditorIAL Kenny Kemp Editor e: kennykemp@blueyonder.co.uk Andrew Mernin e: andrewm@room501.co.uk Design & production room501 e: studio@room501.co.uk Photography KG Photography e: info@kgphotography.co.uk advertising For advertising call 0191 537 5720 or email sales@bq-magazine.co.uk

room501 Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2012 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, December 2012. room501 publishing Ltd is part of Business & Enterprise Group, the UK’s market leading business improvement specialist. www.business-enterprise.net

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WELCOME

Time to exploit our advantage I’d like to welcome you to this BQ2 Special Report on advanced engineering and manufacturing in Scotland. This is a critical part of our economy. There are immense opportunities for Scotland to grow a more vibrant, internationally competitive economy by harnessing the ambition and advantages of our engineering companies. Our goal at Scottish Enterprise and Highland and Islands Enterprise is to help increase Scotland’s long-term sustainable economic growth. And the key to this is a private sector alive with ambitious businesses whose innovative flair is sharpening their competitive advantage. We need to raise Scotland’s game. We want our performance as manufacturers, and our success as commercial businesses to stand in comparison with the best in Europe and beyond. We are already highly rated for our business appetite for innovation. As a nation, we’re already alert to the opportunities. That’s an important platform. It’s why we are building strong partnerships to reinforce this culture of ideas in our business. But we can do much more. Whether we’re adding high value manufacturing here,or outsourcing low-cost production to global partners, our target is to develop new products, processes and services in Scotland. We want to be among the leaders. That journey might start with the innovation but it moves to the workshops, the test bench, the production line and goes on right through the supply chain to delivery. We hope you find this an interesting read. Graeme Waddell, Chairman of Scottish Manufacturing Advisory Service

ADVANCED ENGINEERING IN SCOTLAND

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Big plans for micro business, catapulting towards success, Apollo mission makes steady progress, engineering a programme for others to follow, and rolling return of an old industry

>> Big plans for micro business Contract electronics manufacturer CB Technology, based in Livingston, has opened a new factory in West Lothian, helped by Scottish Enterprise. CB Technology, which specialises in micro-electronics and the manufacture of probe cards, has expertise supplying the oil industry for down-hole instrumentation. These engineering products have to be robust for application in extreme environment, while the cost of lost production due to failed electronics is unacceptable. The company began in 1999 but steady expansion made a move to larger premises necessary. It was important to remain fast, accurate and flexible enough to accommodate changes to manufacturing volumes and product mix. SMAS advised on how to optimise the factory layout and the new factory opened in October 2011. A strong engineering team supports product testing which may involve climatic, vibration, hydraulic pressure, automated electrical and bench testing. Half of CB Technology’s output is exported, principally to Asia and the United States. Although many customers are blue chip multinationals, CB Technology prides itself in supporting small indigenous businesses and retains around 20% of its capacity for prototyping.

>> High flying board The High Value Manufacturing Catapult has announced a new high powered supervisory board that will help shape the future of British manufacturing. Secretary of State for Business Innovation and Skills Dr Vince Cable said: “The HVM Catapult Supervisory Board has the necessary experience and skills to take this Catapult forward to help the Government to grow the UK economy.

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“The board will play a key role in making sure that we are building the groundwork for a bright future, giving businesses the confidence to develop and market new and innovative products and technologies.” Along with chairman Bob Gilbert and chief executive Dick Elsy, the HVM Catapult Supervisory Board includes: Hamid Mughal – executive vice president of manufacturing engineering & technology, Rolls-Royce; Professor Sir Mike Gregory - fellow of

Cambridge University, head of the university’s manufacturing and management division; Joe Greenwell CBE – chairman, Ford of Britain; Graeme Armstrong - member of executive board research, development and innovation at AkzoNobel; Juergen Maier – managing director, Siemens UK; Will Barton – head of manufacturing, Technology Strategy Board. “I am delighted and privileged to have been able to assemble such a strong board around myself and the new CEO Dick Elsy,” said Bob Gilbert, chairman of the HVM Catapult. “Together we will now focus on delivering the objectives of the Catapult, which ultimately aims to reinstate Britain as a world-leader in manufacturing, and increase the industry’s contribution to the UK balance of payments.” The HVM Catapult brings together seven institutions of excellence across a broad range of sectors with the long term aim of supporting British manufacturing in the commercialisation of groundbreaking, cutting edge technologies. The seven centres are: Advanced Forming Research Centre (University of Strathclyde); Advanced Manufacturing Research Centre (University of Sheffield); Centre for Process Innovation (Wilton & Sedgefield); Manufacturing Technology Centre (Ansty, sponsored by the Universities of Birmingham, Loughborough and Nottingham and by TWI); National Composites Centre (University of Bristol); Nuclear Advanced Manufacturing Research Centre (Universities of Manchester and Sheffield) and Warwick Manufacturing Group (University of Warwick).

The ultimate aim is to reinstate Britain as a world-leader in manufacturing ADVANCED ENGINEERING IN SCOTLAND

Hugh turns on the switch, that turns on the turbine, that turns on the lights across Scotland.

The Scottish Government has committed to creating 40,000 jobs in the renewable energy industry in Scotland by the year 2020. That’s a lot of people, and a lot of training. Fortunately, SQA have made a start by developing a wide range of qualifications designed to make the most of Scotland’s more important renewable resource — its workforce. Find out more about how SQA can energise your training.

People. Powered. t: 0303 333 0330 e: mycentre@sqa.org.uk w: www.sqa.org.uk/energy

Hugh

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>> Pastures new for CVS Control Valve Solutions Limited has relocated to a new flagship facility on the Badentoy Business Park in Portlethen outside Aberdeen, where it was previously located. To mark the occasion Rob Bartlett, a director of the British Valve and Actuator Association, which represents over 170 UK companies with sales over £1bn a year, officially opened the premises. Only in its fourth year of trading CVS had outgrown its old workshop and needed to expand as a series of long term contracts have been secured. Measuring nearly 2,500 square metres including a 600 square metre workshop, the new premises are over ten times bigger than old site at Links Street. Rob Bartlett said “This is truly a pivotal moment for CVS and I was honoured to be asked to officially open the new facility. Having always encouraged the team at CVS to take an active role in the BVAA right from the beginning it has been a delight seeing the company grow from strength to strength.” The new premises combine a modern suite of offices as well as a much larger state of the art valve workshop and testing area. The new building also gives CVS more warehousing space which is a significant step up from the old place where separate warehousing facilities had to be used. CVS can offer clients a complete control valve solution under one roof. Managing director Mick Beavers said the opening was an extremely proud moment as CVS has had an exceptional journey over the last three years. “With an expanding team CVS has plans to accelerate growth and the new flagship facility means that the company is in a prime position to do this,” he said.

It has been a delight seeing the company grow from strength to strength SPECIAL REPORT | WINTER 12

>> Apollo mission continues its steady progress Apollo Offshore Engineering, an engineering design and analysis service company, has been awarded a Scottish Enterprise grant that will enable the company to implement a BSi PAS 99:2006 accredited IMS (integrated management system) for 2013. The grant demonstrates the confidence of account manager Anne Lynch and the wider team in Scottish Enterprise in Apollo’s growth, its future plans and ability to add value to the investment. Apollo currently works to ISO 9001:2008 quality management standards but aims to improve its supply chain competitiveness by implementing an integrated management system that goes beyond quality management to encompass technical competence, health and safety and environmental management procedures. Operations director Ryan Menzies said: “Apollo’s engineering resource has grown by more than 300% this last year and the implementation of a BSi accredited IMS at this stage in our development will improve business focus through efficiency, improved communication, reduced duplication and removal of system conflict. This will increase Apollo’s market competitiveness and give the purchasing community confidence in our ability to consistently deliver high quality, safe and appropriate engineering solutions as we grow by an estimated additional 75% this coming year.”

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COMPANY PROFILE

University unites entrepreneurs and academics In today’s world, developing innovative products, technologies and services is vital if companies are to thrive. At the University of Strathclyde, a new approach is transforming the way academics and businesses innovate together – and bringing competitive advantage to firms. The University of Strathclyde has been a place for useful learning for over 200 years and has built a strong reputation with business and industry. Strathclyde’s Technology and Innovation Centre is transforming the way researchers in academia and industry innovate together, challenging conventional thinking and helping Scotland’s industries compete globally. Together, researchers, engineers and project managers are finding solutions to challenges in sectors central to economic growth in Scotland, which can be translated into global marketing, including energy, health, manufacturing and the development of smart cities. From 2014 engineers, project managers and researchers from academia and industry will work side-by-side in a new state-of-the-art building in the heart of Glasgow. According to the Centre’s Executive Director, Dr Steve Graham, the flagship centre will become a focal point for innovation. “Strathclyde is renowned for its innovative roots and alumni, from James ‘Paraffin’ Young to John Logie Baird,” he said. “Today, Strathclyde remains an exciting and entrepreneurial university where staff are committed to working collaboratively with the public and private sectors to make a difference. The Technology and Innovation Centre is a tangible sign of the University’s commitment to this work.” Developed with industry, for industry, the world-leading centre has already attracted interest from a number of SMEs and global partners including SSE, ScottishPower and the Weir Group. Earlier this year, it announced that Fraunhofer, Europe’s largest contract research centre, would base its first UK research centre and headquarters at Strathclyde.

ADVANCED ENGINEERING IN SCOTLAND

Dr Steve Graham, Executive Director, Technology and Innovation Centre At £89 million, the project is the University’s single-biggest investment in its research infrastructure. The University’s innovative approach has attracted financial backing from Scottish Enterprise and the Scottish Funding Council and the European Commission who recognise the Centre’s potential to redefine the way Scottish Higher Education works with industry. Dr Graham continued: “The Technology and Innovation Centre will enable industry to rapidly develop research and technology, and access world-leading academics, research groups, facilities and graduates from the University. “But this is not just about ‘hard’ technology – today’s companies need a holistic approach to innovation. If we develop a new low-carbon technology, for example, we will also examine the human and social aspects of technology, analyse its impact and look at the legislative

frameworks around it. “We’re bringing together expertise from every area of the University – business, science, engineering and the social sciences. It’s this blend of expertise that will be crucial to the development of a sustainable economy, to creating a strong policy environment, and help foster the growth of innovation.” This multidisciplinary, collaborative approach has the potential to deliver important economic and social benefits, not only in Scotland, but internationally. Dr Graham added: “One of the main objectives of the centre is to have long-term, strategic relationships with industry where the creation of technologies, intellectual property and commercial ideas are shared as a partnership. This will allow us to achieve long-term funding commitments and enable innovation to flourish. “We are actively looking at the spectrum of fundamental challenges, including societal, economic and political issues that are up to 10 years in the future and beyond. “The marketplace is craving new technology and innovation; the challenge for Scottish companies will be how they keep up with this demand. By working together, we can help businesses innovate quickly in a way that’s relevant to their sector. It’s a partnership approach that will help us create a sustainable future.”

For more information about the Technology and Innovation Centre, visit www.strath.ac.uk/tic

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an upgraded American Petroleum Institute license to include design engineering and welding as well as manufacturing and also holds both ISO 9001 and FPAL certifications. Smart is a Technology Strategy Board scheme offering funding to small and mediumsized enterprises (SMEs) to engage in R&D projects in the strategically important areas of science, engineering and technology, from which successful new products, processes and services could emerge. Paradigm Drilling Services, a subsidiary of Netherlands based Paradigm Group, designs, rents, sells and repairs drilling tools for the global oil and gas industry in-house. The company has a turnover of £2.2m and a recruitment drive is underway with more than 40 people now in place and plans for a further 10 before the end of next year.

>> Engineering a programme for others to follow Scottish engineering companies are leading the way in supplier activity on the SC21 programme nationally. SC21 is a change programme designed to accelerate the competitiveness of the aerospace & defence industry by raising the performance of its supply chains. Castle Precision Engineering, one of Scotland’s leading engineering firms, based in Glasgow, has attained silver status, while Bovill & Boyd and WB Alloy Welding Products have both achieved SC21 bronze status. Both bronze companies presented on how SC21 is helping support their business development at a SC21 cluster event hosted by Rolls-Royce, Inchinnan. This adds to the seven companies who received SC21 bronze in February at the task force meeting at Selex Galileo in Edinburgh.

>> Tapping into new funds Drilling tool specialist Paradigm Drilling Services has secured a quarter of a million pounds worth of funding through the Technology Strategy Board to progress its pioneering drilling tool solutions. The Smart development of prototype grant will allow the Aberdeenshire-based firm to develop novel Rotary Traction Systems for use in extended reach horizontal drilling as well as in completion applications. It will part-fund a project which is estimated to cost £760,000, involving the design, development, testing and evaluation of the new drilling and completion tractors.

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Fraser Innes, chairman and CEO of Paradigm Drilling Services, said: “Drilling activity is becoming more complex as operators look to access more isolated reserves which often involve horizontal drilling. Our Rotary Traction Systems are a step change in thinking as we push the boundaries of horizontal drilling. The success of this project has the potential to fundamentally change the way we drill very long horizontal and extended reach drilling wells. The Smart grant will allow us to further our prototype and we are excited to progress this with the support of the Technology Strategy Board.” Paradigm Drilling Services has been awarded

We are excited to progress this with the Technology Strategy Board >> Family on the move A family-owned firm, Brodie Engineering, established in 1996, is expected to break the £3m turnover this year, thanks to help from Scottish Enterprise. The Kilmarnock-based business provides innovative engineering, design, installation, modification, incident damage, corrosion repairs and general repair solutions to both main and light railway sectors. Their service incorporates the management of turnkey projects for major customers. Since Scottish Enterprise account manager Elaine Calderwood started working with Brodie Engineering in 2010 turnover has grown from £924,937 to £1,650,000 in 2012 with turnover projections for 2013 of £3,100,000. Employment has also grown from 12 to 44 and is rising.

ADVANCED ENGINEERING IN SCOTLAND

Medical diagnostics firm receives shot in the arm with licence win

Business case study All All information information correct correct as as of of September September 2012. 2012.

A A Clackmannanshire Clackmannanshire medical medical diagnostic diagnostic fi firm rm has has secured secured the the global global licence licence to to produce produce a a new new HIV HIV monitoring monitoring kit, kit, with with support support from from Bank Bank of of Scotland Scotland being being utilised utilised to to help help with with the the manufacturing manufacturing scale scale up. up. Omega Omega Diagnostics, Diagnostics, based based in in Alva, Alva, manufactures manufactures a a range range of of products products to to aid aid in in the the diagnosis diagnosis of of infectious infectious diseases diseases such such as as TB TB and and Dengue Dengue Fever. Fever. It It distributes distributes these these products products across across the the world. world. The The business business has has now now secured secured the the exclusive exclusive international international licence licence to to produce produce a a new new test, test, developed developed by by the the Burnett Burnett Institute Institute in in Australia, Australia, to to aid aid in in the the care care of of HIV HIV positive positive patients patients in in regions regions such such as as Africa. Africa. This This measures measures a a patient’s patient’s CD4 CD4 cell cell count, count, which, which, when when it it falls falls below below a a certain certain level, level, indicates indicates the the need need to to commence commence antiretroviral antiretroviral therapy. therapy. The The licence licence win win will will necessitate necessitate an an upscaling upscaling of of the the fi firm’s rm’s Scottish Scottish manufacturing manufacturing facilities, facilities, with with production production to to be be fully fully up up and and running running by by early early 2013. 2013. To To help help with with this, this, the the company company secured secured a a £700,000 £700,000 working working capital capital facility facility from from its its fi finance nance provider provider Bank Bank of of Scotland. Scotland. Currently, Currently, most most CD4 CD4 testing testing is is performed performed in in centralised centralised laboratory laboratory locations, locations, with with a a wait wait of of up up to to two two weeks weeks for for the the results. results. The The new new kit kit that that Omega Omega Diagnostics Diagnostics will will be be producing producing can can be be administered administered by by mobile mobile units units with with results results returned returned in in around around 40 40 minutes, minutes, making making it it ideal ideal for for use use in in the the fi field. eld. Kieron Kieron Harbinson, Harbinson, Group Group Finance Finance Director Director at at Omega Omega Diagnostics, Diagnostics, said: said: “This “This new new test test for for measuring measuring CD4 CD4 cell cell count count is is an an

(L-R) (L-R) Gordon Gordon Robinson Robinson (Bank (Bank of of Scotland) Scotland) and and Kieron Kieron Harbinson Harbinson (Omega) (Omega)

worldwide extremely worldwide licence licence extremely important important means development “We have grown Omega Diagnostics means that that Omega Omega development in in the the will care will be be stepping stepping up up care of of HIV HIV positive positive steadily since its flotation in 2006, with its patients, its manufacturing manufacturing patients, and and will will turnover increasing in the intervening capacity, prove capacity, both both in in prove extremely extremely useful useful period from £2m to £11m for the most terms in terms of of equipment equipment in locations locations such such as as and Africa recent financial year.” and people, people, which which Africa where where visiting visiting is a is great great news news for for a lab lab for for regular regular tests tests Clackmannanshire. may Clackmannanshire. may not not be be practical practical in in Kieron Kieron Harbinson, Harbinson, Group Group Finance Finance Director Director “At many “At Bank Bank of of many cases. cases. Scotland, “We Scotland, we we take take the the time time to to fully fully understand understand “We have have banked banked with with Bank Bank of of Scotland Scotland for for our a our customers’ customers’ businesses businesses to to allow allow us us to to better better a long long time time now now and and the the recent recent working working capital capital recognise facility recognise the the challenges challenges and and opportunities opportunities facility is is the the latest latest of of many many occasions occasions where where that the that are are unique unique to to them.” them.” the bank bank has has provided provided valuable valuable support support and and demonstrated demonstrated its its indepth indepth understanding understanding of of our our To business To fi find nd out out how how Bank Bank of of Scotland Scotland business and and what what we we need need to to expand.” expand.” can Gordon can help help your your business, business, please please visit visit Gordon Robinson, Robinson, Relationship Relationship Manager Manager www.bankofscotlandbusiness.co.uk for www.bankofscotlandbusiness.co.uk for Bank Bank of of Scotland, Scotland, said: said: “Securing “Securing the the

Any property given as security which may include your home, may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it.

All lending is subject to a satisfactory credit assessment Bank Bank of of Scotland Scotland plc plc Registered Registered Offi Office: ce: The The Mound, Mound, Edinburgh Edinburgh EH1 EH1 1YZ. 1YZ. Registered Registered in in Scotland no. Scotland no. SC327000. SC327000. Authorised Authorised and and regulated regulated by by the the Financial Financial Services Services Authority Authority under under number 169628. 169628. Licensed Licensed under under the the Consumer Consumer Credit Credit Act Act 1974 1974 under under registration registration number number number 0593292. 0593292. 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

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in-house manufacturing capabilities such as tool-making, stamping, forming, moulding, plating. They design and manufacture for a variety of markets including medical and offshore. “Investing in new automation equipment and offering fully vertically integrated manufacturing solutions is providing a winning combination for the company. With support from account manager Gordon Clark and the SMAS team at Scottish Enterprise, we are winning substantial new business in the car manufacturing sector,” says Andrew Morgan, of Interplex PMP.

With the support of SMAS we are winning substantial new business in car manufacturing >> H&S honours

>> Rolling return of an old industry Wabtec Rail Scotland is planning to bring rail wagon bogie assembly back to Scotland. The scheme is part of the five year plan for the railway engineering facility in Kilmarnock, aided by SMAS. Currently the bogies are assembled in Eastern Europe and shipped back to the UK for assembly under freight wagons. Craig Gibson, a director of Wabtec, said: “Our analysis demonstrates that it is more cost effective to assemble these products in Scotland which helps grow the facility in Kilmarnock and secures the continuing employment of our 80 highly skilled artisans on-site.” In order to achieve its objectives, WRS has engaged with SMAS to assist with the lean implementation of the necessary assembly cells and test cells to ensure a smooth and profitable implementation of these new build products in Scotland. The week-long Lean event, facilitated by two practitioners from SMAS, includes setting up a new assembly area, a new test cell, the modification of existing equipment and cleaning of tools and machinery. The event team will consist of staff from Wabtec Rail Scotland, Wabtec Rail Doncaster, Brush Traction and the newly acquired LH Group. LH Group, based in Staffordshire, is a leading supplier of diesel multiple unit passenger rail products and services. The company undertakes the overhaul of rail vehicles, engines and transmission systems.

>> Driving ahead Interplex PMP, a specialist component manufacturing and assembly company,

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is making tracks into the car industry, thanks to SMAS. The Arbroath company, part of the larger Interplex Group, has multiple

The McPhee Mixers Maxi Manhole design was the winner for outstanding achievement in the Light Goods Vehicles and all company vehicles/driver safety and public safety category of the Mineral Products Association’s Health and Safety Awards 2012. McPhee Mixers, based in Blantyre,in Glasgow, is a family-run company, employing 35 people, which has been manufacturing and repairing truck mounted concrete mixer units for almost 40 years.

>> Eastern promise ClydeUnion Pumps is working on a contract to supply one CUP-TWL auxiliary feedwater pump for the Krsko nuclear power plant in Slovenia. The project was awarded earlier this year by plant operator Nuklearna Elektrarna Krsko. The pumps are being manufactured in Glasgow and are due to be delivered in September 2014.

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>> Going up stream The iconic music system maker Linn made a 21% rise in pre-tax profits to £2.19m in its last financial years to June 30. It enjoyed strong demand for its digital streaming (DS) players despite tough economic conditions. Gilad Tiefenbrun, the managing director of Linn, based at Waterfoot, in Renfrewshire, said sales of DS players was now close to the past peak sales for CD players, which Linn no longer manufactures. Linn systems cost between £5,000 and £6,000.

industrial unrest in the South African mining sector although strong activity levels continued across the rest of Africa. Oil prices remained relatively robust in the quarter while US natural gas prices recovered from their lows in the first half of 2012. US land rig count fell 6% in the quarter as oil

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activity flattened and gas continued to decline. In Canada drilling failed to return to pre-Spring break levels and was 29% down year on year by the end of the quarter. Good progress continued to be made in challenging global markets with continued success in emerging markets.

>> Weir in good health One of Scotland’s engineering leaders, Weir Group, is on track to deliver full year 2012 profit before tax, amortisation and exceptional items in the range of £440m-£450m, and in line with current market consensus. Conditions remained mixed across the markets, impacted by increasing global macro-economic uncertainty and resultant declines in commodity prices, said its interim management statement. Revenue and profit growth moderated in the third quarter as a result of the lower opening order book and reduced activity levels at SPM and Mesa. Group revenue and profits were ahead of the prior year quarter, benefiting from the impact of prior year acquisitions which continue to perform satisfactorily. Group operating margins for the quarter were in line with both the prior year period and our expectations. Reported order input in the third quarter was 8% down on the prior year and 15% lower on a like for like basis. As a result, reported order input for the 39 weeks increased by 2% (H1: up 8%) against the prior year period. On a like for like basis for the 39 weeks order input was 6% lower (H1: down 1%) with original equipment orders down 18% (H1: down 13%) and aftermarket orders up 6% (H1: up 11%). The largest commodity exposures are in copper and gold markets, where relatively stable prices supported activity. This was partially offset by softer trading conditions and selective destocking across iron ore and coal markets in Australia and Brazil and

ADVANCED ENGINEERING IN SCOTLAND

Pictured at Gael HQ in East Kilbride, Scotland, are (left to right) David Williams, TechPubs’ president and CEO, Thomas Zhang, Gael’s business development manager for Asia-Pacific, and Ashley Marron, Gael’s CEO

>> Gael gains a foothold in China Scottish software developer Gael Ltd has launched a partnership project in Shanghai. The quality, safety and risk management solutions providers have teamed up with partners TechPubs Global to provide the marketplace with a complete SMS and document management solution. TechPubs is a provider of aviation technical publications management software and services, which combined with Gael’s Q-Pulse SMS & QMS software solutions, presents customers with new options for enhanced flight safety and more efficient and successful engagement with regulatory bodies throughout the world. Gael’s Asia-Pacific operation will be fronted by Thomas Zhang, business development manager, who will be based in TechPubs’ premises in Shanghai. Thomas will help to develop business opportunities for the company and provide a local presence for customers. Gael’s focus will initially be settled on the aviation market. Thomas said: “I am looking forward to developing and enhancing Gael’s reputation by providing both customers and prospects in the Asia-Pacific market with a local liaison for the company.” Gael’s Asia-Pacific operation is another milestone and follows on from expansions in both North America and the Middle East. Chief executive officer Ashley Marron, said: “The Asia-Pacific region, and particularly China, is one of the fastest growing aviation marketplaces in the world with huge growth potential for airlines, business jets and airports for example. “Similar to the success of our operations in the Middle East, where we now have a dedicated premise based in Dubai, we plan to build our credibility in the area initially from within the aviation sector, filtering into other sectors such as healthcare, manufacturing etc. These are exciting times for Gael, and we hope this ambitious move reflects that.”

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OVERVIEW

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13 to watch in 2013 Scottish companies still have bags of innovation and talented people. BQ editor Kenny Kemp has selected a lucky 13 firms worth keeping a track of in the coming months. Some are national names, but others are less well known: all are making a contribution to our national prosperity, while many are being helped by Scottish Enterprise and the SMAS team 1. Armadilla: They are a neat company based in Rosewell in Midlothian that makes pods that can serve as an extra room, office, treatment room or holiday accommodation. The pods are designed by Archie Hunter and his son, Ross, and are akin to highspec fancy-shaped sheds but with a range of added innovative features, such as underfloor heating, a 25-year guarantee and environmental compliance. With Armadilla pods springing up all over the country, the company seems to be on the brink of significant growth. www. armadillo.co.uk

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2. Divex: A global industry leader in the design, manufacture and development of diving and subsea equipment for commercial and professional divers. The company, based in Westhill, Aberdeen, supplies defence and commercial deep sea diving equipment worldwide. It is a one-stop shop for everything required from masks to diving chambers. Divex, with 300 people worldwide, is innovative in order to meet the stringent requirements not just from a functional point of view but also from a security perspective. It is a growing company and a key one

for Scotland’s competitive advantage in engineering. www.divexglobal.com 3. EnerMech: This is a high-growth mechanical services company for the global energy sector. The team of Doug Duguid, Michael Buchan, Phil Bentley, Derek Grant and John Wingfield are all highly experienced industry people – they were involved with the PSL sale to Halliburton. They have been on the acquistion trail, yet the Aberdeen-based company has only been under the EnerMech brand since

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2008. It already has £100m in turnover and definitely one to watch. www.enermech.com 4. Rigmar Fabrication: This Dundee firm - previously Riverside Engineering - was bought over by Rigmar Services of Aberdeen. The Riverside element supply the offshore and petrochemical industries with general fabrication and pipe work, while the Aberdeen arm supplies a range of services to rigs including a newly developed rope access system. The company’s mission is to become the leader in the provision of support services to the mobile offshore drilling fleet, with a commitment to safety and the environment at all times. www.rigmar.co.uk 5. Castle Precision Engineering: Glasgow. Winner of Manufacturer of the Year on numerous occasions. This business, run by Marcus Tiefenbrun, one of the amazing Tiefenbrun dynasty, is an exemplar for others across Scotland. The first sub-contractor in Scotland to be awarded the SC21 Silver award. SC21 is a vital part of the future viability of the UK aerospace and defence supply chains. www.castleprecision.com 6. Optos: The company states that its vision is to be ‘The retina company’. The Dunfermline based business has come a long way since entrepreneur Douglas Anderson decided to develop a laser eye examination machine. Now a global leader in the developing discipline of eyecare and diagnoses of disease through retinal examination. Daytona is Optos’s next generation desktop retinal imaging device. Roy Davis, the chief executive, says: “The last financial year saw the beginning of a new significant chapter in the evolution of Optos with the market launch of Daytona. “We have been delighted with the response to its introduction.

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“We believe Daytona will be a pivotal platform for the expansion of our product offerings and international reach, aided by the growing body of clinical evidence that confirms the critical importance of the periphery in retinal diagnostics.” www.optos.com 7. TRAK Microwave in Dundee: This UScompany was set up 50 years ago, but it has a strong research and engineering presence in Scotland. In 1987 TRAK bought Channel Microwave in Dundee which was expanded in 1992 with the acquisitions of Albacom. The Dundee firm designs and manufactures a number of bandwidth components and Ferrite microwave products for space. Space is the final frontier for engineering excellence. www.trak.com 8. EPSCO in Perth: Set up in 1992, the firm has developed a new method to determine the levels of contaminants inside power station cooling towers by way of an remote controlled vehicles and high definition monitor. EPSCO, who have been helped by Scottish Enterprise, then also use their chemical cleansing solution to wash all the containments away. www.epsco.co.uk 9. ICS2: This firm was set up ten years ago in Dundee and is an innovative cable manufacturer, for the audio, electronic, industrial and marine environments. It is working with Scottish Enterprise on development and market opportunities for a new, low-power fibre optic cable which emits light, called ecoglo. www.ics-2.co.uk 10. RGS Forfar: This North East of Scotland agricultural equipment company was winner of two awards for innovation at the Royal Highland Show this year. Established in 2005 by Gordon Skea and Terry Wood they designed, built and launched the ScanStone range of specialist machines. The team has also developed a potato

OVERVIEW

harvester – the first of its type to be built in Scotland. www.scanstone.co.uk. 11. Oranaudio.com: A new business that could make a lot of noise. Oran was founded in 2012 by Roger Duerden, an engineer with over 20 years’ experience in the electronics and semiconductor industries. A passion for music, electronics and design drives an interest in hi-fi product development. His Livingston company is redefining the valve amplifier with a new approach to electronics and industrial design. www.organaudio.com 12. Sense Marine: This firm, based at Livington’s Alba Innovation Centre, has exceptional expertise in subsea mechanical design, signal processing, communications, embedded in software. Led by Dr Tom Crawford, who held senior positions within Hewlett Packard’s R&D divsion, and David Mackenzie, and expert in high performance radar and navigation systems. Tom was a visiting professor in electrical engineering at the University of Edinburgh, where he was involved in researching machine-learning expert systems. Brains alplenty here. www.sense-marine.com 13. A2E: This electronics design company, also based on the Alba Innovation Centre, in Livingston, supplies complex systems, hardware and embedded software product design to the electronics industry. The skilled engineering teams, led by managing director John Thomson, provide electronic design services of the highest quality, from concept through prototyping, to full production. A2E has a reputation for delivering outstanding quality coupled with on-time and on-budget performance. www.a2etech.com n Thanks to Gavin Halliday, Robert Cowan, Vicky Greenlaugh, Anne Lynch, Gordon Clark, Elaine Calderwood, Ute Beck, Lisa Sutherland, all of Scottish Enterprise for their input.

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INTERVIEW

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A vital spark for young minds Dr Peter Hughes has been a champion for the importance of engineering in Scotland for a quarter of a century. As he prepares to step down as chief executive of Scottish Engineering, he tells Kenny Kemp about his passion for problem-solving and inspiring young people Kenny: Hello, Peter, firstly congratulations on reaching your retirement with Scottish Engineering. Most people who know you understand your immense passion for what you’ve undertaken. What has changed over your tenure? Peter: Despite the vagaries of the world economic situation, it is heartening to note that many Scottish engineering manufacturing companies are continuing to extend and develop their sphere of influence; typical examples being Wood Group, Weir Group, Aggreko, Alexander Dennis and many more. During my tenure at Scottish Engineering, it

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has been gratifying to find that our politicians in Westminster and Holyrood have, at long last, realised the importance of manufacturing engineering, combined with the need for our youngsters to study the STEM subjects (Science, Technology, Engineering and Maths). It has also been very satisfying to see a number of our SMEs seeking to expand their operations overseas, and a particular target area currently being pursued is Brazil. What are the positives for engineering in Scotland? Our Scottish universities continue to punch well above their weight in terms of winning

UK-wide research grants, and the Scottish engineering manufacturing sector has been quick to build strong links with our universities via a number of initiatives, particularly at the University of Strathclyde, with their Advanced Forming Research Centre and their new Technology and Innovation Centre. For example, it is interesting to see that the Fraunhofer Centre for Applied Photonics is set to have its UK headquarters at the centre, forming a hub for laser research and photonics. Many of Scottish Engineering member companies have now developed very good links, not only with Strathclyde >>

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INTERVIEW

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INTERVIEW

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but also with Edinburgh Napier, Heriot-Watt, Glasgow Caledonian University, etc. In your view, what do we still need to do? It is vitally important that we continue to encourage our Scottish youngsters to undertake the STEM subjects, particularly if we are to ensure that we have the appropriate skills in place to allow us to develop our engineering companies. Renewable energy has the potential to provide many excellent hightech jobs as part of a balanced, sustainable, affordable, secure energy plan, but it is important that we include some nuclear power as part of the energy mix. It is also important that politicians deliver the correct message to our utility companies and work with them to ensure that the outdated

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We all have a responsibility to ensure that we excite and stimulate our young people to lead them to worthwhile enjoyable careers National Grid is improved to meet the demands of the 21st century. You’ve put a lot of work into inspiring young people to take up careers in engineering, tell us more about this? Since 1999, I have had the pleasure of addressing in excess of 70,000 young people

throughout the United Kingdom, sharing with them my passion for engineering and technology. Their positive response has given me a real buzz and I am delighted to be able to confirm that our youngsters are great. We all have a responsibility to ensure that we excite and stimulate our young people, such that they are keen to study the appropriate subjects at school and through further and higher education, leading to worthwhile, enjoyable careers. Are you concerned about the skills shortages - and what do you think we can do? Having recently completed a tour of Scotland, I can report that many engineering manufacturing companies have a real concern regarding the shortage of appropriate skills which they require, ranging from shop floor personnel through to fully qualified engineering graduates. While I applaud the activities of the Education Minister, Michael Russell MSP, in re-appraising the Scottish College Sector which will result in fewer, high-paid principals and hopefully result in a more co-ordinated provision of good courses. I am concerned that the financial cutbacks hitting colleges will reduce the number of apprentices, technicians and undergraduates which they can provide. If politicians really believe in manufacturing, then they need to put their money where their mouths are and ensure appropriate funding is in place for our further education and higher education institutions. You’re handing over to Bryan Buchan, what advice would you give him? Get round as many member companies as possible to ensure that Scottish Engineering is tackling the various matters which they consider to be important. Secondly, continue the work which has been already started in >>

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INTERVIEW

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INTERVIEW

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If politicians really believe in manufacturing then they need to put their money where their mouths are and ensure funding is in place

encouraging our youngsters in primary and secondary schools that science, technology, engineering and mathematics can be very exciting and most enjoyable. And I understand you’re still going to be an active performer on the Burns circuit? Anything else planned? I thoroughly enjoy doing the Burns Circuit and had a fantastic time earlier this year in Cape Town, South Africa, and I look forward to continuing to do Burns Suppers around the globe. I already have three bookings for January 2014. I am also looking forward to getting my folk band, East Coast Haar, fully operational once again to allow us to raise money for Children’s Hospice Association Scotland. n Bryan Buchan, the former managing director of Bausch & Lomb plant in Livingston takes over as chief executive on 1 January 2013. Dr Peter Hughes studied metallurgy at Coatbridge Technical College, then went to study at the University of Strathclyde. He enjoyed a successful career in manufacturing and was a government adviser for 20 years. In 1993 he was awarded an OBE for services to the UK steel industry and has an honorary degree from the University of the West of Scotland.

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Tributes to an industry champion What some people have said about Peter “Please let me say a big thank you for your input to our awards ceremony as principal guest. The occasion was one of the most memorable we’ve had, and your own very special enthusiasm, which came across strongly to the award winners, was the biggest part of its success. A real breath of fresh air,” Hugh Millar, head teacher, Grange Academy, Kilmarnock “Your input was inspiring, fun and hugely unique. The students thoroughly enjoyed your session and the feedback from them and their parents has been tremendous. They very much enjoyed the fun way that you got the message over. In short, your session played the main part in making our S6 Conference a great success,” Margo Wilkinson, assistant rector, St Modan’s High School, Stirling “I am writing to you to express our thanks for the effort which you put into your talk to our (lively) Second Year cohort. “Your talk reached some 300 of them. Feedback from pupils and staff was very positive and I am sure that the pupils will remember your visit for a long while,” Paul Duddy, science department, Park Mains High School “I am sure you are in no doubt as to the great success we had at the prize-giving yesterday, due in large measure to the hugely appreciated address that you gave us. The buzz in the staff room was that it was the best-ever prize-giving. “I am grateful for the most energetic and entertaining way that you went about speaking to the audience,” David Carson, rector, Forfar Academy “The event went down very well with students and teachers alike. However, the highlight of the day was undoubtedly your keynote address. It was lively, entertaining and very relevant to the theme of the day. My colleagues in YES were all very impressed by your ability to hold the attention of your audience, especially in the very difficult slot just after lunch,” Dr Bill Leeming, chairman, Ayrshire Area Board, Young Enterprise Scotland (YES) “Just a short note of thanks for opening up the Engineering Careers Experience Day at Strathclyde University yesterday. We couldn’t have asked for a better start,” Nigel Akam, Student Recruitment Challenges Project Universities of Glasgow and Strathclyde

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INTERVIEW

Many engineering manufacturing companies have a real concern regarding the shortage of the appropriate skills they require

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ENTREPRENEUR

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The Dynamic Clansman Award winning engineer Dick Philbrick talks to Fiona Laing about his leadership, employee ownership and building an export-led company in East Kilbride

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ENTREPRENEUR

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We’ve been lucky enough to escape the heinous crisis because we export to a wide enough range of countries

Dick Philbrick is an original one-off. A visionary who has recently been singled out for his contribution to engineering in the UK. The commendation he picked up at the end of November does a good job of summing up the scope of his achievements. One, the Institution of Engineering and

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Technology’s Nuffield Silver Medal for Achievement in Design and Production, recognised his leadership and achievement in building a highly profitable export-led engineering company. The other, the Philip Baxendale Outstanding Leadership Award, acknowledges his

inspirational role in leading by example and driving outstanding performance in an employee-owned organisation. Philbrick is the chairman of Clansman Dynamics, the company he co-founded in 1994 and which became employee-owned in 2009. Based in East Kilbride, Clansman makes robotic manipulators, hammers, cannons and grinders for forges, steelworks and foundries across the world. These large robust machines have a reputation for reliability in the toughest of environments. Clansman saw its turnover reach £11m for the year to March 2012. “Last year was our best year ever, and this year should be slightly better,” says Philbrick, who puts much of Clansman’s continued success down to exporting 90% of its production. “We’ve been lucky enough to escape the heinous crisis because we export to a wideenough range of countries, so that when one is up and another down, we get some kind of balance.” China accounts for about 30% of sales, with Russia, Brazil and India in the equation. “Our best markets used to be Germany and Italy but they have now dwindled,” he adds. However, Philbrick does admit that China has become “too big a market” and, with a downturn expected there, the company has tried to anticipate that by expanding its product range. “We’ve added two new >>

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ENTREPRENEUR

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Fact file It is claimed that the world’s first co-operative enterprise was in Scotland. The Fenwick Weavers were established in 1761 in the east Ayrshire village of Fenwick to sell oatmeal at a discount. Robert Owen’s vision for better conditions for his workers in the cotton mills of New Lanark, put the Lanarkshire village on the map as the cradle of the modern co-operative movement.

different kinds of machines to our armoury so we are trying to balance what we expect will be a downturn in China and Russia (where we are now active) with having other things we can sell. “We’re foregoing the temptation of larger short-term profits for the long-term benefit of investing in research and development.” Those two new products have taken about a year to develop. One is a very small – by Clansman standards – grinding machine. “It may sound easy to make a compact version of a big machine, but it isn’t. It’s a very compact version, with a rather unusual wrist design which puts the operator much closer to the action [where his tool is grinding] than the previous machine,” explains Philbrick. The other – the Clansman ER forge machine – has twice the reach and twice the speed of anything the company has made before. “Again that’s a dramatic change. Every single part is new, apart from the operator’s cabin.”

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Developing two new products at the same time as shipping regular machines is the sort of scenario which puts the employeeownership model under the spotlight. “I really think the same can-do attitude exists now as it did in the early days of the company and I really do believe that the compelling logic of employee ownership means that all the struggles with technical development and maintaining high quality are set in a logical context and give us an advantage over companies which are conventionally

structured. People now have a quite different understanding of the business compared with what they did three years ago.” Clansman is one of a small, but thriving, number of employee-owned businesses in the UK. The trade association, Co-operatives UK, estimates that more than 5,900 co-operative businesses contribute £35.6bn to the UK economy. There are 578 employee-owned and co-operatively-owned businesses in Scotland, with a turnover £4bn. A 2010 report by Cass Business School found that employee-owned businesses were more resilient than conventionally structured companies: outperforming the market during the downturn and demonstrating a lower risk of business failure, higher rates of sales growth and job creation. “The logic of everybody having a stake is unavoidably compelling,” says Philbrick. “The actual value added in hard numbers – turnover per employee – has gone up by something like 15 per cent since 2009. So even a tough business man would be hard put to dispute those figures.” Philbrick is a keen advocate of employeeownership and has just become chair of Co-operative Development Scotland, the Scottish Enterprise subsidiary which supports the development of co-operative and employee-owned enterprises across Scotland. He sees only one downside of employeeownership: “The only thing we have cut off is the access to vast amounts of capital, but I’ve always been an advocate for long slow organic growth rather than racy ups and downs.” With the two new machines due to ship soon, Clansman Dynamics can smooth its way through the economic turmoil and build further on the twin strengths highlighted by Philbrick’s recent awards – innovative engineering and employee ownership. n

I really do believe the can-do attitude exists now as it did in the early days of the company

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ENTREPRENEUR

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INTERVIEW

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Scotland’s manufacturing companies often need a fresh pair of eyes to identify productivity gains. Nick Shields leads an experienced team of practitioners improving performances and building a fresh vision. He talks to Kenny Kemp

Invigorating our factories with global ambition Nick Shields comes from a factory background. He’s had over 20 years managing the clinking metal and the roaring power tools. He’s witnessed the best - and the worst - of manufacturing in Scottish companies. Now as the director of the Scottish Manufacturing Advisory Service, an arm of Scottish Enterprise and Highlands & Islands Enterprise (HIE), he is charged with helping companies step up to the mark. >>

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INTERVIEW

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INTERVIEW

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Shields, from Paisley, has the perfect pedigree. Armed with a degree in mechanical engineering from the University of Glasgow, he became an electronic design engineer working in US multinationals, such as Digital, in Ayr, before it was merged with Compaq, and Hewlett-Packard. “I really enjoyed this and then worked in sub-contract engineering for a company called SCI, which was doing the satellite boom in the early 1990s, when all the equipment was manufactured and designed in Scotland,” he says. He spent two years in Scottish Enterprise in 1994-1996 before returning to industry and a management position in Teknek, at Inchinnan, which designs and manufactures cleaning equipment and solutions for the electronics industry.

He spent four years working with the company before landing a job as production manager at Polaroid in Dumbarton, which had 1,000 employees at time. The multinational had three divisions: film, cameras and sunglasses, which is still successful in Scotland. “While Polaroid eventually downsized, the design department and the lens department are still there in another form. “This is high-quality lens manufacturing, the kind of work that is vital for Scotland.” He moved back to Renfrewshire with Gas Measurement Instruments where he was a manager, and then joined Scottish Manufacturing Advisory Service, all employed by Scottish Enterprise in 2007. “The SMAS team is very experienced: we

The SMAS approach “What SMAS does with companies is engage them on a journey of improvement to make them more productive,” says Nick Shields. Every manufacturing company is offered a free diagnostic review. A SMAS practitioner will spend a day looking at everything from order entry, production through to dispatch. It examines a factory lay-out, and how it is organised. It tries to get a sense of inventory levels, rework loops and ‘value-add and ‘non-value-add’ activities to ensure that the product is always flowing through the factory. “We look to see that a value-add activity is going on and is not stuck in a bottleneck, or machines that are constantly unavailable. We have a structured approach to how companies can become more productive. “Since 2006, we have already delivered 750 improvement projects across the whole of Scotland and generated £80-85m of productivity savings,” he says. “It involves anything that helps get the product into the hands of the customer as quickly as possible and minimises the inventory levels. “Often it is nothing new to major manufacturing companies but for many SMES that are in the fire-fighting mode, and don’t have the time to see what needs to be done, we come in with a different perspective and a fresh pair of eyes”. Nick Shields says it is about getting things properly organised and all the small things can add up to major losses. “We believe typically we can make Scottish companies 10-15% more efficient: just by eliminating all the little things that add up during the day. “SMAS is not here to tell you how to be a better welder, machiner or fitter, we’re here to take all the things away that stop you doing that. “Whatever works for the company to make it more productive.” He explains that he is delighted by the Scottish firms now gaining SC21 supply chain award, vital for those working in aerospace and defence, where component performance has to be without flaw. “We can support short-term improvement projects that may take a few days through to a full manufacturing transformation and introduction of Lean and its culture. We’re flexible, rather than regimented and that’s essential.”

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The developing world is building an infrastructure of power stations, water systems and the like - and Scottish companies can supply these markets have all gained the scars of working in Scottish manufacturing over the past 20 years, working with the likes of Hoover, Motorola, Philips and the big whisky companies. We’re all ex-production managers or directors from a factory environment and have seen challenging times,” he says. “In 2007, manufacturing in Scotland was seen very much as yesterday’s business activity. There were still great things happening in engineering with companies such as Progress Rail and companies servicing the oil and gas sector such as FMC Technologies and Hydrasun were as busy as ever. But after the bank collapse and the recession, there was a renewed focus from the Scottish and UK governments put back onto manufacturing and its importance for Scotland.” Companies focused on innovation and exporting will do well and we see businesses such as Babcock, which became Doosan Power Systems, Weir Group and the Clyde Group, all winning good business utilising advanced engineering skills. Manufacturing also has a key role to play in supporting the Scottish Government’s target of increasing exports by 50% by 2017. Scotland makes half of everything that it exports – and 75% of all innovation and R&D is undertaken by manufacturing companies. “With the developing world building an infrastructure of power stations, water systems and the like, Scottish companies are wellplaced to supply these markets. >>

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INTERVIEW

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The recession hasn’t hit the traditional energy firms in the same way. The Scottish manufacturing sector is a lever of economic growth… whether you’re one of the big boys or an SME that is part of its supply chain. SMAS with Scottish Enterprise and Highlands and Islands Enterprise are looking to support manufacturing companies of all sizes to improve productivity, their top line and supply chain.” For Nick Shields, it is all about seeing the potential and driving forward the ambition inherent in most companies. n

Workers have their tools no more

The Scottish manufacturing sector is a lever of economic growth...whether you’re one of the big boys or part of its supply chain “And with the engineering behind something like the drinks industry there is certainly a renewed interest in manufacturing and what

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it gives to Scotland. Our oil and gas services companies in the North East have been at the forefront of manufacturing innovation.

Once upon a time the master craftsman brought his own tools to work: not any more. Increasingly, modern advanced manufacturing means no personal toolboxes. Companies such as Rolls-Royce, Boeing and Airbus use colour-coded tools that must be returned to the appropriate racks before a shift can go home. “We know that Lean manufacturing is one of the best vehicles for cultural change in a business,” he says. But often the starting point is just getting people to accept essential changes and ensuring ‘the right tools are used for the right job’ . “It often means that older ways of working have to be changed, yet the result from this is a more committed workforce. Business growth comes from this. We know that when a culture of continuous improvement exists in a business they grow and generate higher margins than ones that don’t,” he says. “In Scottish Enterprise we’re really keen to work with those companies who want to do things differently, to grow and be competitive. Whether you’re a large employer, a smaller company or part of a supply chain, these businesses are key to our economy. Engineering is a key skill that supports so many. So come and talk to us!” he says.

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ENTREPRENEUR

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Without patient feedback you will never get the best outcome. Innovation can come from trying to think like a patient - you need that mindset

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The gentle touch of genius The focus on advanced prosthetic technologies and services has allowed Touch Bionics, one of Scotlandâ&#x20AC;&#x2122;s most exciting companies, to achieve remarkable advances in engineering. Darran Gardner learns more about this business gem

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The best way to address this formidable engineering challenge is to work closely with the very people the company was established to help

Attempting to even partially replicate the unique complexity and functionality of the human hand represents a formidable engineering challenge. Consisting of 27 bones, our motor skills depend on a coordinated relationship between bone, muscle, tendons, nerves and brain. The best way to address this challenge acknowledges Hugh Gill, the chief technical officer of Livingston-based upper limb prosthetics company Touch Bionics, is to work

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closely with the very people the company was established to help. “We work with patients globally. Without patient feedback you will never get the best outcome. Innovation can come from trying to think like the patient – you need that mindset.” Touch Bionics’ focus on advanced prosthetic technologies and services has seen it achieve remarkable advances to enable it to provide both myoelectric prosthetic hand and prosthetic articulating finger solutions.

With its i-limb ultra, a powered prosthetic hand solution incorporating five articulating digits and a rotatable thumb, Touch Bionics delivered a highly-adaptable hand prosthesis. And with next-generation i-limb digits products it provided patients worldwide with a customised solution for those with missing fingers or partial hands. These developments have required an integration of mechatronics and software functions, providing an impressive level of

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grip, sensitivity and dexterity – everything that we take for granted everyday from the human hand. Each finger contains its own motor (a small-barrelled DC motor), gearbox and battery, critical components that have been refined over several years of research and product development. “From a mechanical engineering perspective,” says Gill, “the challenge is how to package components into the footprint of a human hand. You now need to assemble the product using a TV screen and a zoom facility. “The i-limb hand used to rely on plastics made of zytel material [the most versatile of nylons] and we had an assembly of seven components. We decided to remove them all and make one out of aluminium. It should have got heavier but it reduced the weight by taking out plastic and making it thinner – albeit with a lot of complex CNC work involved.” The company’s attention to potential engineering advances and material science has ultimately resulted in a more robust prosthetic hand, enhancing its lift capability from 40kg to 100kg and offering a 10-fold increase in stiffness. It is these characteristics that have proved to be popular with both patients and clinicians, helping Touch Bionics to push its 2011 turnover figure of £8.6m to north of £10m this year. Growth continues in the key United States market - where the company now has an office in Boston - as well as elsewhere around the globe. As Touch Bionics’ small team of engineers strive to make the sort of advances in design, materials, mechanics and build that will enable them to make hands smaller (suitable for children or small adults) and difficult to distinguish from a real hand, the focus on software engineering has also been considerable. At the heart of Touch Bionics’ engineering is the issue of control. The i-limb and i-limb digits commonly using myoelectronics or force-sensing resistors to achieve their functionality, electrodes sensing muscle contraction while sitting on the skin above muscle. The muscle contraction is then filtered and amplified before being sent to a microprocessor in the hand. However, with each individual’s control strategy as different

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ENTREPRENEUR

These developments are providing everything that we take for granted everyday from the human hand

as their muscles, the i-limb’s control system must be modified to respond to the different signals. The company’s biosim software allows prosthetists to interact with the i-limb digits system, communicating via Bluetooth between a PC (featuring a graphical user interface or GUI) and a controller inside the prosthesis. Input signals can be changed, control strategies can be changed and hand features enabled or disabled. The software, says Gill, is now advanced enough to allow patients to wirelessly connect in their home

and make changes themselves. A mobile app has even been developed to allow patients to modify prosthetic digit settings on the move. Gill adds: “We have also added a healthcheck and hand diagnostic function, with the data sent to the cloud. We can look at reliability and servicing, with a firmware programme in the hand running a programme which extracts power, voltage, resistance information. We can then see data in graphical form. “However, in terms of future innovation and software engineering, the most challenging thing for the patient is controlling the prosthesis. You open or close the digits and we now have six degrees of movement , such as pinch, point, grasp, and 14 different grip patterns. But it’s not intuitive and that challenge can only be solved by brain to machine interfaces, decoding signals from the brain to the hand. “We recently won a Technology Strategy Board grant to work with the University of Strathclyde to look at pattern recognition, which will involve the interpretation of brain signals using advanced software to provide this intuitive control “ As noted by the company’s chief executive Ian Stevens - himself a veteran of several Scottish technology successes in the shape of Optos plc and Mpathy Medical - innovation at Touch Bionics even extends beyond the world of robotics and into the world of craftsmanship. It continues to push for innovation at the ‘livingskin’ part of its business, with handcrafted silicone skins created that resemble human skin by simulating the three dermal layers of natural human skin. The livingskin prostheses are then handpainted by artists in its US operation. “It’s a very skilled process”, says Stevens, “and very labour intensive in the finishing. “We hire people from Disney and make- up artists from films that can do this that detail and finishing. “Our business and our innovation is focused on rehabilitation. “With disruptive products you are changing the way things have been before.” n Touch Bionics was one of five Scottish technology companies listed in the Deloitte Fast Tech 50 2012.

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INTERVIEW

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INTERVIEW

Laser-sharp thinkers on the cutting edge >>

ADVANCED ENGINEERING IN SCOTLAND

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INTERVIEW

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Scotland’s fastest growing high-tech company, M Squared Lasers, has put ‘dependable innovation’ at the heart of its business. Kenny Kemp hears about its success M Squared Lasers is the fastest growing high technology company in Scotland. That’s official. Its growth rate of 1603% – while not quite attaining the speed of light – is certainly impressive, and the Glasgow-based company is the top Scottish firm in the Deloitte Fast 50, and in the top ten for the UK in 2012. At the heart of this success is know-how and ‘dependable innovation’: in short, advanced engineering skills and technology that are embedded in Scotland, says Dr Graeme Malcolm, the founder and managing director. “I know the effort that has been put in by everybody over the last five years to grow M Squared here in Scotland, so I was delighted with the Deloitte Fast 50 recognition. We all have a passion for what we are doing,” he says. M Squared employs 40 science and engineering people but plans to increase this to over 60 in 2013, and is looking at those with masters degrees and PhDs to enhance the team. Last year M Squared Lasers opened an office in San Jose, where it has an American sales team. Its turnover is now over £5m. “Across the team there are guys who have been with a number of photonics companies in Scotland. There is a lot of experience and we’re bringing that all together. There is a drive and enthusiasm and everyone wants to do something better than they have done in the past. They want to grow a bigger company,” he says. Dr Graeme Malcolm was co-founder with Dr Gareth Maker of Microlase Optical Systems in 1992, which became one of Scotland’s most successful opto-electronic firms, bought out by NASDAQ-listed Coherent in 1999. The pair started M Squared Lasers in 2006 as new laser technology was emerging. They have been joined by chairman Dr Peter Bordui, who is also chair of an optical subsystems business in Luxembourg; Bill Miller, the technical director, who worked for 25 years with Linn Products; and Dr John Nicholls, a veteran of the opto-electronic field in Scotland who set up

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Getting the right talent is always a challenge but there is a hotspot in Scotland, which is why we have been able to build the team so rapidly Photonic Materials in 1998, which was bought by Saint Gobain and Schlumberger in 2005. Graham believes that this depth of experience gives M Squared an unusual ability, benefiting from all the key learning that has gone on in the past 20 years. Twenty years ago there were few photonic or laser companies but now it is a key high-tech sector for Scotland. “We’ve a highly experienced team, which has allowed us to be successful and grow fast,” he says. M Squared’s customers are in universities and research labs all over the world and use laser technology for research and development in leading-edge frontier science, including several Nobel Prize winning physicists. Many of the early adopters are in this sphere, but

M Squared has been able to move into more mainstream applications, such as bio-imaging in medical, or defence and security sensing chemical warfare materials or explosives, or in process industries such as the oil and gas sector to sense hydrocarbons or toxic gases. “We’ve taken some of these evolving technologies and blended it with the experiences of our team to get what we call ‘dependable innovation’. It works well for our customers so they can put lasers into their innovation cycles. So a big multi-national, an oil and gas company for example, can use modular blocks of technology that are easily fitted in. We can deploy laser technology, that’s easy to use and reliable.” M Squared’s own R&D process is multi-

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disciplinary with advanced laser technology, opto-mechanical engineering, advanced digital control systems, and complex software algorithms all linked to the products. So precision advanced engineering is at the core of this successful Scottish business. “Within our supply chain, engineering and assembly teams we have to harness different disciplines together to build reliable products. One of our key selling points is that we have a team that can put all these components together.” While specialist components, such as optical coatings, are sourced from other suppliers, mainly in the UK, manufacturing and calibration is done on the West of Scotland Science Park in Glasgow, where there is a clean-room of 3,500 sq ft. “We are very fortunate because Scotland is a hotspot for laser technology. The universities are producing people with suitable

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qualifications and the broader industrial base in the West of Scotland has established opto-electronic capabilities. There is a critical mass in Scotland that makes it good for our business. Of course, getting the right talent is always a challenge but there is a hotspot in Scotland, which is why we have been able to build the team so rapidly.” Manufacturing is flexible with M Squared following the key elements of Lean manufacturing and Six Sigma, but the firm

INTERVIEW

has devised its own way of working more efficiently, based on its experience. The company was originally financed by the founders and then received backing from Clydesdale Bank, Scottish Enterprise and Melville Capital, a private equity firm. It has grown organically and is making profits from the sale of the technology. In May, M Squared received a £3.85m from the Business Growth Fund, helping it to move to the next level, and taking a minority stake. n

Twenty years ago there were few photonic or laser companies but now it is a key high-tech sector for Scotland

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Now it’s a drop of the hard stuff

The oil and gas industry’s ‘frontier acreage’ challenges, involving the development of oil and gas fields previously viewed as too difficult, too expensive or too politically unstable to justify the effort, offer considerable scope for engineering innovation. Whether it means venturing into the Arctic, the far North Sea or the deep waters of Brazil, the efforts displayed by the industry in tapping unconventional reserves globally has highlighted. And now advanced engineering and technology have critical roles to play in enhancing the economically viability of complex projects. As Scotland’s energy minister, Fergus Ewing highlighted with his summer announcement of a new £10m innovation fund for North Sea projects, with more than half the value of North Sea oil and gas reserves still to be extracted and almost 100 new fields still be

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Cutting-edge technology and advanced engineering are the only ways to win resources from the marginal energy fields. Darran Gardner talks to some of those committed to exploiting the most difficult oil and gas reservoirs

properly developed, the economic drivers for solving certain challenges are clear. The goal is defined as 24 billion recoverable barrels with a potential value of £1.5 trillion. ITF (Industry Technology Facilitator), headquartered in Aberdeen, also recently called for a renewed focus on innovation in the sector. The organisation’s focus on identifying technology needs, fostering innovation and facilitating the development and implementation of new technologies through joint industry projects (JIPs) is perhaps more valuable than ever before. These projects usually involve collaborations between exploration giants, services firms, specialist SMEs and universities. “The JIP model may not be for everyone,” acknowledges Keith Mackie, the ITF’s technology director, “and it isn’t the only route for R&D, especially as many exploration

firms have their own R&D arms or partners. However, in terms of sharing risk and the cost of financial commitment, it’s win-win for everyone. “We have facilitated industryfunded R&D projects in defined areas such as subsea, production and facilities, often in mature operations, as well as subsurface areas including reservoir modelling and imaging. The reluctance to collaborate in some of these competitive areas, which existed until recently, is now gone. “In terms of the opportunities for development, recent calls have focused on subsea, enhanced oil recovery, unconventional reservoirs, as well as asset integrity and reliability – a key issue for operators who need to keep platforms running beyond their designed lifespan.” Gordon Winton, of the Institute of Petroleum Engineering (IPE), has direct experience of the

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From the outside it might sometimes seem a low-tech industry, but getting the most out of the North Sea now requires a blending of new engineering ideas and existing technology value of collaborative working in this area, connecting with the ITF on various projects and even managing a research project with 23 industry sponsors. Pointing to the success of the Heriot-Watt (where the IPE is based) spin-outs such as gas hydrates and reservoir fluids specialist Hydrafact, he is convinced that Scotland’s universities can play a key innovation role. “What academics can bring to the innovation process is fundamental knowledge of an area and through the JIP model you can look at applications of that knowledge and develop them. Working with oil and gas companies such as BP, Chevron or Baker Hughes is relatively easy as we are engaging with people who are at the forefront of research. “And they are not looking for answers to specific questions – they want to develop answers to questions they don’t know yet. That means addressing fundamental technical and chemical engineering challenges through innovation.” One fast-growing firm successfully addressing these types of challenges with creativity and engineering excellence is Aberdeen’s Red Spider Technology. Focused on remotely-controlled downhole solutions that save operators money and reduce risk, one of the business’s core products emerged from an ITF industry-funded project to develop a pioneering reservoir isolation barrier that prevents fluid loss during the upper completion phase of well construction. Mike Reid, company co-founder and design chief, admits that solving the engineering challenges of operating downhole tools at both extremes of temperature (0C to 150+C) and pressure, while likely having to address the impact of corrosive mixes of fluids, requires imagination, a determined focus on standard engineering principles and practices, as well as

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a fair amount of patience. The end result is innovative products which reduce the time taken to complete, or work over, a well and offer operators cost savings linked to reduced rig time. “The pressures, temperatures and corrosion issues encountered downhole means that exotic materials - metals such as Inconel and Incoloy - often have to be used to house the electronics and make up the valve components. Dimensional constraints also often mean that stress levels on the component parts are working close to their maximum allowable levels. “We use finite element analysis to simulate pressure and temperature effects on component parts while still at the concept stage within our CAD software. “This can be very useful for optimising the design before committing to manufacturing. Of course all this happens after we have reviewed the design several times, checked calculations, and checked that the design fulfils the remit. “We also validate products and individual components to specific industry standards such as ISO 28781 and ISO 14310, sometimes undertaking months of testing using speciallydesigned explosive-proof bunkers or pressure vessels.” Richard Carter, subsea controls technology manager at Aker Solutions in Aberdeen, also stresses that innovation in the

CASE STUDY sector is not always about being cutting edge. Inevitably part of the engineering challenge a company like Aker faces in providing oilfield products, systems and services for customers globally, is taking proven technology, for example electronics or telecoms, and placing it in a demanding subsea environment. “It can often be about technology transfer. The challenges are around the environment and the long lifetime required subsea. Critical equipment needs to be smaller and lighter to fit into subsea containers and needs to be reliable for a long time, especially where the challenges involve longer step-outs, deeper water or environmentally-sensitive areas such as the Arctic.” One example of innovation required is the project Aker is involved in with the Norwegian oil giant, Statoil and AS Norske Shell. This onshore pilot project, designed for the Ormen Lange gas field off the Norwegian continental shelf, is linked to a field developed without conventional offshore platforms and focused on the development of subsea gas compression to facilitate longer step-out by allowing operators to extend the limits set by reservoir pressure and enhance recovery rates without building expensive platforms. “On the success of this project,” adds Carter, “Aker is now executing the Åsgard subsea gas compression system for Statoil. This will be the world’s full field development utilising this technology, which we have been working on since the mid-1980s. “The easy oil is gone. To get the difficult stuff, be that heavy oil or shale gas, we need to apply technological innovation to make it economically viable. “From the outside, it might sometimes seem a low-tech industry, but getting the most out of the North Sea now requires a blending of new engineering ideas and existing technology.” n

The easy oil is gone. To get the difficult stuff, be that heavy oil or shale, we need to apply technological innovation to make it economically viable

SPECIAL REPORT | WINTER 12

INSIGHT

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Preparing young people for an engineering future

The Scottish Qualification Authority is in a leading position to ensure that Scotland’s next generation has the best qualifications for the mid-21st century workplace. Eddie Morrison found out how it operates Are Scotland’s young people going to be ready and trained to take up good jobs in the growing engineering industries? The Scottish Qualifications Authority (SQA) is tasked with making sure the right qualifications are in

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place to help pupils and students reach their potential, and has been working with both Higher Education and industry to ensure that what’s being taught is relevant, up to date, and capable of producing the best possible

ready-for-work talent. SQA is also responsible for developing new national qualifications to support new Curriculum for Excellence in Scotland – a new approach to education that the Scottish Government believes will create well-rounded young adults. The stated aim is to help each young person become a “successful learner, a confident individual, a responsible citizen and an effective contributor”. So how will this play out in science, maths and engineering? First off, numeracy – there will be a strong focus under the Curriculum for

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Excellence on ensuring pupils gain the skills they need, both general ‘lifeskills’ numeracy and the basics they need to go on to study maths and science at an advanced level. Across the science subjects, one of the biggest shifts will be the introduction of coursework from an early stage. Currently, pupils complete a project, or ‘investigation’, at Advanced Higher stage, but it was felt that this was too little, too late. Alison Plummer is SQA’s qualifications development manager in charge of the Sciences curriculum area. “We listened to industry and various other stakeholders to hear what skills they were looking for. And both industry and Higher Education said: ‘We can teach them the knowledge, but we need them to come to us with skills - hands-on researching, investigative and practical skills’,” she says. It was felt that coursework should be built into earlier years to give a solid skill foundation. From National 4 (which replaces Standard Grade at General level and Intermediate 1) therefore, pupils will complete an assignment that develops these abilities. “Obviously at National 4 there’s a great deal of support from the teachers, and then learning becomes more independent as learners go up the levels,” Plummer says. This is a major shift in how science is assessed, and it’s vital that the core scientific knowledge and its applications are still taught as well, Plummer says. “We’re trying to move away from rote learning, and let [pupils] have a better understanding of why they’re doing experiments – but without losing the underpinning knowledge and understanding of the subject,” she says. Similar issues arise in the new mathematics qualifications, when it comes to making exam questions ‘relevant’ to pupils, says

What is SQA? The Scottish Qualifications Authority is the national accreditation and awarding body in Scotland, responsible for developing and managing qualifications for schools and colleges across Scotland, including those for the new Curriculum for Excellence. As a non-departmental public body, SQA currently receives some financial aid from the Scottish Government to offset the costs of the schools qualification system, but otherwise is expected to be self-funding. With falling pupil numbers predicted across Scotland over the next ten years, SQA needs to find other sources of income. It is therefore very active in marketing its suite of qualifications to schools, colleges, training providers and organisations across the private and public sectors, as well as other government bodies across the UK and indeed world-wide: 26 Chinese universities, for example, run SQA accredited HND courses.

qualifications development manager for maths, Keith Wright. “We’re trying to make it contemporary and so on – but maths is maths … it won’t change radically unless a new Newton or Aristotle comes along! We can use contemporary ideas in assessments, but we have to be careful because that can get in the way of what you’re trying to assess, which is the raw mathematical ability needed to service other disciplines.” With that caveat in mind, SQA is still keen to ensure that exam contexts and examples are open and interesting to both genders and to any pupil, whatever their background. John McGrane, qualifications development consultant across STEM (Science, Technology, Engineering and Maths) subjects, says there has been a move within all science and technology qualifications to make subjects more relevant under Curriculum for Excellence. “The qualifications are more application led – looking at things like the impact on the environment or society, for example. There’s more opportunity to localise, too – putting things in a context that means something to the pupil, whether they live in a rural area, or in a city. Good teachers have always done that, of course – but this makes it easier for

We can teach them the knowledge but we need them to come to us with hands-on researching, investigative and practical skills

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INSIGHT

schools to do what suits them best.” SQA had been working to improve science qualifications even before the move to Curriculum for Excellence, says head of science, technology, engineering and mathematics, Alastair MacGregor. “Science qualifications had remained pretty static, while the world had moved on – and the industries that rely on maths and science have moved on as well. “So about two years ago we looked at a review of content for our physics, chemistry, biology and human biology courses.” Last year was the first year to see pupils sitting these revised Highers, and this year will see the first advanced Highers. “Feedback from higher education is very positive – they’re hitting the right spot in terms of the contexts being covered and still allowing enough flexibility.” Overall, the signs for Scottish education seem positive. Entry numbers for pupils studying physics, chemistry, biology and human biology are continuing to rise across all levels – something that doesn’t seem to be happening in England and Wales, for instance, says MacGregor. “I’d like to think it’s because of the quality of our qualifications. But I think it’s partly the structure of the curriculum, which has been designed to encourage the study of at least one science subject. And I’m not sure that’s the same down south,” he says. Scotland also benefits from being a smaller nation, with one qualifications body and tighter networks within the education sector. “We work heavily with those using our qualifications – and I think that benefits the qualifications we develop,” MacGregor says. n

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SPECIAL REPORT | WINTER 12

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INTERVIEW

Turning the shipyard into a Lean machine

Production director John Degnan explains to Fiona Laing how BAE Systems Maritime on the Clyde is remaining ahead of the fleet As the first of the Royal Navy’s two Queen Elizabeth Class aircraft carriers is taking shape in the Forth, a quiet revolution is going on at the shipyards which built large sections of the hull. The Govan and Scotstoun yards of BAE Systems Maritime – Naval Ships are making fundamental changes to the way they work. Although the yards employ modern machines and technologies, they still rely heavily on people. “The processes here are

ADVANCED ENGINEERING IN SCOTLAND

very much people driven,” explains John Degnan, production director and general manager Clyde. The recent turmoil of the world economy, together with developments in the relationship between BAE Systems and the Ministry of Defence (MoD), mean that a shipbuilder needs to be more effective in what it does. “Our customers are going through changing times, in terms of the economic climate that

they are working in – and we have to adapt to that.. “Our challenge is that we need to be operating at the highest level in warship design, build and commission for our customer. And to do that, we needed to change: we needed a relentless reduction of waste of all forms and in all processes,” says Degnan. The way for BAE Systems Maritime – Naval Ships to achieve that change >>

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is the introduction of Lean manufacturing techniques. Lean’s roots lie with Toyota, the Japanese car manufacturer, and focuses on maximising customer value, while minimising waste. Interestingly, one of the earliest cited examples of such processes is the floating assembly line for boat building in the Venice Arsenal in the 1450s. The business reviewed its own operations against other manufacturers including Nissan and Toyota. “We did some benchmarking with Jaguar Land Rover and they were fantastic. They were really open and honest and helped us understand what we needed from their journey. We’ve also been to German shipyards to understand how they’re deploying some of their tools and techniques.” It was convincing evidence for Degnan: “We

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recognised that the benefits of using Lean would be fantastic and that, when you looked around industry, whether you looked at your own sector or other sectors, those who were the most successful were those employing these tools and techniques.” Having decided that Lean was the appropriate solution, Degnan and his team needed to think about how to adopt it, because it had

been tried at the yards before. “We had dabbled with Lean implementation back in about 2000. However, the difference back then was that we were told that we ‘must’ implement it.” This time the emphasis has been on helping employees see why the changes are needed, so that they then have the desire to become Lean. This project is not just about adding new

There is a real passion within the workforce to put the West of Scotland back on the shipbuilding map

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terminology to the local management lexicon, it involves a complete culture change. To bring this about, BAE Systems has partnered with Project 7, a performance consultancy with Toyota-trained executives, which has wide experience of helping organisations, including other parts of BAE Systems, transform their culture. “There is a real passion within the workforce to put the West of Scotland back on the shipbuilding map. They recognise the challenges ahead, they just need some support to show them how to do it,” says Mark Harbon, European director of Project 7. The Lean Four-step Knowledge Transfer programme centres on employee behaviours, tools and techniques and aims to allow the individual to flourish and work more effectively, removing the barriers and silos

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which are almost inevitable in a large traditional organisation. Running over 21 weeks, it involves one-to-one coaching and mentoring and a two-week Lean Learning Academy which takes staff away from their normal working life completely, puts them beside people from different functions and roles and immerses them in the new techniques. “In that safe environment, the Academy allows them the chance to practise with their new tools on a real live workstream, so they can identify the waste within it and how to turn it into a far more efficient, effective process, measured against safety, quality, delivery, cost and people metrics,” explains Harbon. After the Academy, delegates are challenged to use their new culture to find business improvements in their own

INTERVIEW

workstreams. Introducing Lean has been a big investment for BAE Systems Naval Ships admits Degnan. “I think what we’re trying to demonstrate as a company, is that we recognise that our people are so important to us It says ‘we recognise that you are a cultural architect and can change things. We’re going to enhance those tools and techniques for you and we will take the burden for those two weeks, because we know that when you come back, we’ll reap the benefits of it. We will see a difference – for the better – in engagement and collaboration from you’.” In the past two years, about 250 members of staff have been through the Lean Academy and the results are evident both for individuals and for the business. “By allowing people to experiment in a >>

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Our biggest asset is our people. If we can get them to excel every day then what an organisation we will be working in

Fact file Scottish shipbuilding sector in 2010 • Gross Value Added (GVA) £488m • Turnover £1,415m • Employees 7,000 • Scottish shipbuilding accounted for a significant proportion of total UK output of the industry (40% for turnover and 34% of GVA). Compared to the whole of manufacturing, where Scotland accounted for around 7% of turnover and 8% of GVA of total UK manufacturing output. Source: Scottish Annual Business Statistics, 2010

safe environment, to try something different and be creative, we’ve seen a number of people grow at a fantastic rate. We have a dozen people who have been promoted, so it’s helping with our growth and our teams. “We are seeing a financial return on projects people take on when they come out of the Academy. So we’re seeing that returning back into the business.” One tangible example has been the introduction of wireless fire alarms. To ensure staff safety during the construction of a

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ship, fire alarms are installed temporarily. Traditionally this involved running cables throughout the ship. Those cables would have to be removed, for instance, when testing each hatch is water tight, and then reinstated again after the tests, which all involved time and effort. “One of our team came up with the idea of using a wireless fire alarm system. Sounds really simple, but people said it would not work on a ship: too many blind spots. “The team engaged with a number of companies, sourced a supplier, developed

a process and we’ve now installed wireless fire alarm systems on the ships.” Not only has the safety of the BAE Systems workforce increased, but there is an important benefit for the local community. Degnan explains: “Because our confidence level is increasing every day with the quality of the products we’ve installed, we have reduced the number of false alarms, fire alarms and calls to the local fire brigade. Now, we aren’t calling on the resources of the fire service for a false alarm; they can go to other 999 calls. So a simple thing we’ve done in the shipyard, I think, is also having a massive impact on the community. There’s a lot of pride in that one.” For Degnan, who joined the company as an apprentice in 1981, Lean gives him the style to support the structure and discipline of how he goes about his work. “If you can present the style of a leader who continually looks at reduction of waste, continuous improvement, coaching and encouraging your teams, then the shadow you cast takes us a very long way.” He adds: “Our biggest asset is our people. If we can motivate and encourage them to do great things, if we can get them to excel every day, then, wow, what an organisation we will be working in.” As two blocks of the second carrier, HMS Prince of Wales, are constructed in Govan and HMS Duncan returns from sea trials to Scotstoun where she will get the final once-over before she is handed over to the MoD in March 2012, this quiet cultural revolution is certainly making waves. n

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The Scottish manufacturing sector is a lever of growth, whether youâ&#x20AC;&#x2122;re one of the big boys or part of its supply chain nick shields, scottish manufacturing advisory service