The Manufacturer April 2010 by The Manufacturer

www.themanufacturer.com April 2010 Vol 13 Issue 04

Materials

world Focus on Sheffield and South Yorkshire

t R A I N I N G f o r S u c c e ss Better linking of theory and application

Finance and pro services Capital allowances at the frontline

Leadership and Lean

Exploring Britainâ&#x20AC;&#x2122;s low carbon vehicle industry

Interview Prof Keith Ridgway OBE

Research Director, University of Sheffield Advanced Manufacturing Research Centre with Boeing

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Editor’s comment

Real progress in green industrial revolution Three global companies – GE, Mitsubishi and Siemens – have recently pledged big investments to finance both R&D (Mitsubishi) and new manufacturing operations in the UK. Both Siemens and GE’s announcements were timed to follow the Budget’s £60m tranche to upgrade port facilities for offshore wind projects. And after three years of lobbying and hard work by the UK SWS industry, DEC has changed the feed-in tariffs for Small Wind Systems to provide small wind turbine users real financial incentives for fitting and operating turbines. Good news on all fronts? Yes, but Siemens and GE are keeping their options open for the real commercial and political prize, the location of their offshore wind business headquarters and R&D centres. Manufacturing sites provide jobs – good political capital in an election year – but factories can be moved and a long term wind energy industry can only be secured in the UK if these companies locate their wind business HQs here. The UK has the most compelling argument in Europe for developing offshore wind. The UK car industry was dominated in March by Ford and Nissan’s investments in green technologies – at Ford, the development of new low carbon engine variants and the Focus BEV electric car, and Nissan’s news that its Sunderland plant will build the new electric LEAF model from 2013, a huge lift for the local economy. The Government gave financial support to these ventures and both represent great news for the low carbon vehicle industry. Capital allowances are crucial to manufacturers who must buy the latest technology to remain competitive. The Budget removed the 40% allowance rate but extended the 100% relief on purchases up to £100,000 – good news for small companies. Tax relief on capital is a complex issue and it doesn’t help when the goalposts are regularly changed. EEF’s Steve Radley and the article on page 62 discuss the issue in more depth. Our lead story and interview focuses on the manufacturing hotbed of South Yorkshire. What changes this region has undergone. Sheffield’s world famous steel industry was decimated in the 1980s, but how many people are aware how well it has been rebuilt? And with the help of the Advanced Manufacturing Park, and the AMRC Research Centre with Boeing, the region has become a world-class centre for materials science R&D. And soon civil nuclear will join its growing list of manufacturing specialities. Will Stirling, The Manufacturer

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Editor’s comment

News and features 04 News

Manufacturing news

10 Manufacturing appointments On the move

Find out who’s heading where in manufacturing

12 The big picture The Power of Print

Professor Ian Hutchings reveals the next print revolution – printing products.

13 Economics

Recovery at risk if tax fails to connect EEF’s Steve Radley says we need a manufacturing-friendly tax regime to lead us out of the downturn

15 Business as unusual

Can Toyota get fanatical about quality again? Lean is not to blame for Toyota’s recent woes, says Anand Sharma, but lean management could be its savior.

16 Lead story

Cutting edge in a Materials world Will Stirling reports on the continuing developing landscape of manufacturing in Sheffield and South Yorkshire

24 Interview

Boeing for broke Ed Machin meets Keith Ridgway OBE of the Advanced Manufacturing Research Centre with Boeing

31 Leadership and lean

Electric Britain gets moving Mark Young explores the state of play for Britain’s ultra low carbon vehicle (LCV) proposition and finds it could work out just fine.

36 Sustainable manufacturing New wave energy

Tim Brown finds the sea offers very real promise when it comes to supplying manufacturers’ energy needs

38 Innovation, design and the product lifecycle Targeting PLM leadership

Jim Heppelman, CEO and President of PTC tells Will Stirling how PLM helps manufacturers and why the US software company is confident of global PLM leadership.

People, skills and productivity 40 Training diary

Barry Engstrom, MD HepCoMotion, provides the third installment of his training programme diary.

41 Employee of the month

Mick Burkinshaw of DavyMarkham

42 The roll of training in the manufacturing industry

Ann Watson, managing director of awarding organisation EAL, discusses the role that training plays in the sector

Contents Editor’s comment

t R A I N I N G f o r S u c c e ss

Manufacturers are playing an important role in moving Britain towards a resource-efficient low carbon economy. But, as Colin Chinery reports, this transition is not without major barriers and support deficiencies.

Finance and Professional Services

March of technology moves capital allowances to frontline 62 Will Stirling explores the shortening ‘tax life’ of machinery

Devil’s advocate: top legal compliance issues for 2010 66

Edward Machin investigates two facets of legal compliance set to make it big in 2010.

Special feature Kingston Smith 69

The Manufacturer Quarterly tax update, focussed on the measures in the Budget which will help small and medium sized businesses

Supply chain and logistics 70 Chain of fools

Shifting market, financial and operational issues are proving a game changer for globalisation, with backshoring increasingly attractive for UK manufacturers. Trend or fad? Colin Chinery reports.

IT in manufacturing

Bi-partisan technology? 74

What should manufacturers be expecting from business intelligence software? TM explores.

IT news wrap 79

Keeping you up to date with what’s new in IT.

Manufacturinginaction Sponsored by TBM Consulting Group

Factory of the month

88 Eli Lilly Health and wellbeing From early beginnings as a post-WWII manufacturer of penicillin, the Eli Lilly and Company plant in Liverpool has diversified its portfolio with animal health products now responsible for the bulk of the company’s output. Tim Brown discusses current plans with the team at Lilly Speke, and finds out what’s in store for the future.

103 Seven Seas Navigating stormy waters 115 DavyMarkham The good, the big and the ugly 123 Kelvin Hughes On the radar 129 Daval Furniture Part of the furniture 135 Hanson Cement Mixing it up 141 Hampshire Cosmetics Changing the face of the operation 3

Newsinbrief L A S T m o nth in hist o r y

On March 30, 1998, BMW won a bidding war to take over Rolls-Royce Motor Cars, beating rival Volkswagen and a group of Rolls enthusiasts who attempted to keep the company British. Vickers, the corporate parent of Rolls-Royce, reached an agreement to sell the flagship of elegant and expensive motoring for $570 million. BMW, which also produce the MINI brand, remain the parent company of Rolls-Royce Motor Cars.

SKILLS

The first of the new qualifications replacing NVQs for the food and drink industry is to be launched next month. The Food Manufacturing Excellence qualification will be the first Improve Proficiency Qualification (IPQ) to be released. It will be accredited by the Qualifications and Credit Framework (QCF) and the Food and Drink Qualifications (FDQ) awarding organisation. The new system will offer companies the chance to tailor qualifications to be closer to their individual needs.

More than 22,000 people attended the Big Bang: UK Young Scientists and Engineers Fair in Manchester, more than three times as many as attended the inaugural event last year. The Fair, which features the prestigious National Science & Engineering Competition, is thought to be the largest single celebration of science and engineering aimed exclusively at children and young people.

F OO D A N D B E V E R A G E

Norwich based savoury snack maker Kettle Foods has been bought by US firm Diamond Foods for £402.3m ($615m). Investment firm Lion Capital has cashed in on the firm it bought for £170m in 2006. Kettle – with its flagship Kettle Chips gourmet crisp range – was founded in the US in 1978 and expanded into the UK in 1989. It has seen strong growth in sales in recent years including a £10m rise in turnover from 2007 to 2008. The two companies said the sale will allow Kettle to grow on both sides of the Atlantic.

BUDGET 2010

Budget reaction mixed In announcing the 2010 Labour Budget, Chancellor Alistair Darling spoke of avoiding “short sighted” spending cuts. Public debt this year is actually going to be £15bn less than Mr Darling predicted in his pre Budget report in December. Meaning that deficit this year will be £163bn rather than £178bn. Dispite this, the Budget is geared towards reducing the deficit by 50% within the next four years. The key business related budget announcements include: £94bn worth of extra lending for small and medium sized business, to be disseminated through the part state owned banks Lloyds and Royal Bank of Scotland. £45bn to be reserved for small and mid sized businesses. 100% capital allowances applied to the first £100,000 cost of capital, doubled from £50,000. 20% rate retained for the balance. Business rates to be cut from October and the new rates will mean no payments at all for 345,000 businesses. An extra 15% of central government contracts will be reserved for SMEs. £35m university enterprise capital fund to promote innovation. £270m to fund 20,000 science, engineering and maths degrees. £2bn for ‘green investment bank’.

Alistair Darling announces the 2010 Budget

£60m for offshore wind industry. There was no update on National Insurance despite a host of trade organisations including EEF, the Confederation of British Industry and the Federation of Small Business petitioning the Chancellor in recent weeks to scrap an increase of 1% in employer contributions which is planned for next year. Andy Brook, a director at accountancy firm Deloitte welcomed the capital allowances increase. “Small and mid-size manufacturers will be pleased to note the increase in the annual investment allowance to £100,000 per annum,” he said. “The benefit of this relief is allowing tax payers to claim a 100 per cent tax deduction for investment in plant and machinery up to £100,000. For expenditure above this the rate of capital allowances was maintained at 20%.” Jeeger Kakkad of the EEF was more sanguine, however. “Some businesses will benefit but any incentives to invest will be off-set in the short-term by uncertainty about what tax and spending decisions may be around the corner,” he said. “However, frequent changes to the taxes such as those to investment incentives compound the view that the tax system lacks direction and predictability.” The Conservatives allege that the budget offers no fixes to the mismanagement of the finances that it claims led to the country’s current economic malaise; while Labour counters that the opposition party is yet to provide any coherent plans of its own. Trailing the Conservatives in the opinion polls ahead of the expected May 6 election, Treasury chief Alistair Darling has stuck by his promise to deliver a “workmanlike” budget with few big giveaways.

ManufacturingNews TAX

EEF wants new tax regime EEF is calling for a major reform of the tax system because it says the current regime is “tilted against manufacturing”. The representative body has today published a report called ‘Tax reform for a balanced economy’. The report sets out fully costed reforms through which investment in high technology industries will be boosted and the UK’s tax regime will become internationally competitive while also beneficial to the public purse. Immediate reforms to boost investment include extending the time restriction on short-life asset election from four to eight years – something that would cost nothing until 2015/16 and a revenue neutral

system of focussing R&D tax credits on high tech development. Also, it says the capital gains system is “an unsustainable ‘welcome’ sign for tax evasion” and says rewards for reinvesting in the business rather than paying out through the attractive 18 per cent capital gains rate should be developed. Medium term reforms to create a new tax regime include cutting corporation tax cut to 25p over the next five years and returning the top 40p rate of income tax to “stop serial entrepreneurs…being pushed abroad.”

ENERGY

GE to invest in the UK General Electric has announced it will invest approximately £100m in offshore wind in the UK, including the construction of a new manufacturing facility. The company is expecting to invest a total of 340m euros across Europe with the investment expected to create 1,900 jobs. The decision comes on the back of the Government’s £60 million Budget pledge for ports servicing the burgeoning UK offshore sector. GE UK managing director Magued Eldaief said: “We believe offshore wind has a bright future here in the UK and are delighted that the UK government [has] committed to further developing this important sector. These GE investments will position us to help develop Europe’s vast, untapped offshore wind resources.” RenewableUK, the country’s leading renewable energy trade association, has

welcomed the announcement. “Towards the end of 2009 we have started seeing the first signs of a manufacturing rebirth around the UK’s offshore wind energy sector,” says Dr Gordon Edge, RenewableUK Director of Economics and Markets. “Now that all Round 3 sites have been taken up and the potential scale of offshore developments stands at over 40 gigawatts, there is a palpable sense of opportunity.

a GE offshore wind turbine

Newsinbrief AUTOMOTIVE

McLaren Automotive has officially launched the first model in a new range of high performance road cars which will be produced at its premises in Woking, Surrey. The MP4-12C, is a lightweight, high-quality, mid-engined two-seat high-performance sports car that the company hopes “will set new standards for car and customer”. Construction of the new assembly facility, the McLaren Technology Centre (MTC), has already commenced with the first vehicle expected to roll off the plant floor in the first half of next year.

West Midlands based automotive supply chain support organisation Accelerate ceased operating at the end of last month after funding for the 14-year old initiative was not renewed. Since its inception in 1996 it has channelled over £80m of investment into the West Midlands’ supply chain which it says has resulted in £534m worth of new sales, created over 4,000 new jobs and safeguarded more than 29,000 jobs.

Vauxhall has been boosted by the news that its US parent company General Motors has will invest £1.7bn in its European business. At the Geneva Motor Show last month, GM Europe chief executive Nick Reilly said the investment “should clearly signal our determination to fix our business.” General Motors was planning to sell its European operations – primarily consisting of Opel and Vauxhall – but in November last year changed its mind at the 11th hour after a deal had been struck with Canadian car parts maker Magna.

General Motors and its strategic partner, Shanghai Automotive Industry Corp has announced the development of a new vehicle geared specifically for future personal urban transportation. GM reports that by 2030 urban areas will become the greatest concentration of the world’s 8 billion people holding 60 percent of the population. As a result of this growth, public infrastructure is likely to suffer due to the increased demand for transportation and basic services.

Newsinbrief AUTOMOTIVE

Ford has announced it will sell Volvo to China’s largest privately run automaker, Zhejiang Geely Holding Group for $1.8bn (£1.2bn). The takeover underscores China’s arrival as a major force in the global auto industry and ends nearly two years of talks over the fate of Volvo. It is the most recent sale of Ford’s former premier group, which at one stage included Aston Martin, Jaguar and Land Rover. Output

Exports of UK made goods are increasing but overall demand remains weak, the Confederation of British Industry has found. In the CBI’s latest monthly Industrial Trends Survey 22% said exports were up on normal levels and 40% said they were down. The resultant balance of -18% is the most positive finding since August 2008. But 51% said total orders are down and only 14% said they are up. The balance of -37% is consistent with the last few months indicating little upturn in manufacturers’ fortunes since the country officially came out of recession.

DEFENCE

Babcock launches new SC21 cluster in Midlands Engineering support services groups teams up with Manufacturing Advisory Service West Midlands to launch new regional cluster. Babcock International Group, which delivers asset support to the defence, transport, energy and telecommunications sectors, is initiating the cluster to ensure its supply chain is competent in supply planning, inventory forecasting and modelling by adhering to the SC21 supply chains for the 21st century. The specialist programme for the aerospace and defence industries will be funded by Advantage West Midlands and the European Regional Development Fund, and delivered by MAS-WM. A £1m funding pot for

firms keen to make the SC21 commitment and West Midlands companies involved in the cluster can access individual grants of up to £20,000 to help them deploy the programme. Andy Chapell, head of supply chain capability development at Babcock, said: “SC21 encourages greater collaboration, which is why we wanted to introduce this regional cluster approach.” Babcock, which turns over £1.9bn, provides integrated operational support and military flying training to the Royal Navy and RAF, and is a chosen support partner of the British Army.

DEFENCE D efence

BAE Systems announced that it has been given the go-ahead to begin constructing the fifth Astute class submarine and start the procurement process for a sixth vessel. It follows a statement made on Wednesday 24 March by UK Secretary of State for Defence, Bob Ainsworth, in which he underlined the Government’s continuing support for the Astute programme.

Communications on military operations are to be enhanced thanks to a £400m contract to use a new satellite, the Minister for Defence Equipment and Support has announced. The Skynet 5D, which is the fourth satellite of its kind to be used by the MoD, is roughly three times the length of a double decker bus and will be launched in 2013 — playing a key role in gathering intelligence on operations. The satellite will also be used to provide the telephone and internet welfare support facilities for service personnel on operations.

General Dynamics MoD win General Dynamics UK has secured a £2bn MoD contract with the Ministry of Defence for the construction of up to 580 light tanks for the British Army. The ASCOD SV comes from a successful European project that was redesigned by British engineers. According to General Dynamics UK (the UK-registered arm of General Dynamics), it will provide unique support to British troops throughout its 30-year life, with the capability to face future threats and needs. Dr. Sandy Wilson, president and managing director of General Dynamics UK, said: “We offered the best integrated solution, the best growth potential over the 30-year life of the vehicle, the best value for money for the British taxpayer and the best deal for the UK Industrial base.” The deal will result in the creation or retention of 10,600

jobs, with 70% of the supply chain based in the UK and 80% of the production of the tanks which will take place in UK regions, from South Wales to Scotland, from the East and West Midlands to the North West. Sub-contracted Lockheed Martin UK Insys will build the turret of the Scout variant of the fighting vehicle.

The ASCOD Specialist Vehicle

ManufacturingNews METAL

New jobs at Corus A hundred new jobs are to be created at Corus’s Hartlepool pipe mill, some of which could be filled by former employees of the company’s mothballed Teeside plant. The positions will be generated by a £200m contract the steel giant secured with Total and its partner Dong Energy to supply pipes for new gas fields being developing in Scotland. Bob Jones, Corus spokesman, confirmed the ‘cross-matching’ opportunities at TCP. “We identify job opportunities elsewhere in the group for employees affected by the partial mothballing of Teesside. [It] will be helped by the 100 jobs created at Hartlepool by this contract.”

About 1,600 people were affected by the mothballing of Teesside Cast Products (TCP) in February. The Laggan and Tormore off-shore gas fields, which will cost £2.5bn and produce one trillion cubic feet of gas, will require 520 km of pipes. The contract safeguards 250 jobs as well as the 100 created. Corus CEO, Kirby Adams, said: “Corus’s world-class largediameter Hartlepool pipe facility has been recognised through the awarding of this contract.”

F OO D A N D B E V E R A G E

Protests over Tetley’s move There is growing discontent over brewer Carlsberg’s plans to move production of Tetley’s Cask bitter away from Leeds. Danish brewer Carlsberg which Leeds North West MP Greg owns the brand announced last Mulholland has called for locals to month that it has agreed a deal to boycott Carlsberg products and have Tetley’s Cask ale produced he poured a can of the Danish under license by fellow brewer company’s signature lager down Marston’s from 2011. the drain outside the doomed This will see production move brewery in protest. away from the Joshua Tetley Mullholland of the Liberal Brewery in Leeds – where the Democrat party said: “This is an bitter has been brewed since its appalling decision by Carlsberg inception in 1822 – UK, which brings a sad end to over to Wolverhampton. 180 years of brewing in Leeds.” Production of Tetley’s other leading brand, Smoothflow, will move to the Molson Coors Tadcaster brewery in North Yorkshire under a separate agreement. The two deals collectively entail the Greg Mulholland MP calls closure of the Joshua for a boycott of Carlsberg Brewery and the 170 employees there will lose their jobs.

Newsinbrief DEFENCE

The MoD has signed a contract for Virtual Reality Parachute Trainers for the Parachute Training School at RAF Brize Norton to help Armed Forces personnel hone their parachute jumping skills. Under a contract worth over £300,000, Gloucestershirebased Pennant Training Systems Limited will design, manufacture, install and support the eight Virtual Reality Parachute Trainers. The trainers will work with students hanging from a metal frame by standard issue parachute harnesses and wearing virtual reality goggles that recreate a jump in a range of virtual environments.

The MoD has announced a new £42m contract for AgustaWestland will upgrade ten Lynx helicopters to improve the air support available to forces in Afghanistan. The Lynx upgrade to Mk9A standard will deliver more powerful engines, strengthened airframes, increased firepower using the heavier calibre 0.5’’ gun and more advanced instruments and electronics — improving the helicopters’ performance in the extreme conditions of Afghanistan. This £41.8m contact with AgustaWestland of Yeovil follows a previous £50m contract to upgrade 12 Lynx helicopters.

ENERGY

Heavy engineering group DavyMarkham has signed up to become the first tier two member of the new Nuclear Advanced Manufacturing Research Centre (Namrc). By becoming a member of the Namrc consortium, Sheffield-based DavyMarkham gains access to a wealth of resources to help build its presence in the civil nuclear supply chain. The Namrc provides advanced research and development in manufacturing and engineering and is based on the same collaborative model as the established University of Sheffield Advanced Manufacturing Research Centre with Boeing. DavyMarkham was last month acquired by Indian engineering procurement and construction company, Hindustan Dorr Oliver.

Datesfor yourdiary April

The Institute of Operations Management is holding a one-day course focusing on Lean improvement in London. For further information contact Leonie Edwards on 01536 740 105 or members@iomnet.org.uk

The Cloud Circle are holding a forum for business and IT decision makers involved in the implementation of Cloud Computing initiatives. For info contact Hannah Mitchell on 0207 202 7480 or hannah.mitchell@thecloudcircle.com

20-22

The NEC is the venue for Sustainability LIVE, a three day conference highlighting the issues of climate change, featuring speakers from the BBC and the Food & Drink Federation visit www.sustainabilitylive.com or contact Nicola Smith on 0208 651 7130 or nicola.smith@fav-house.com

The Manaufacturer is hosting ERP Connect, to be held at Chesford Grange in Warwickshire. For further information, contact Henry Anson on 0207 202 7482 or h.anson@sayonemedia.com

26-29

The Lean Management Journal is an associated media partner for the Process Excellence Summit & Awards, to be held at Stamford Bridge, home of Chelsea Football Club in West London. For more information see www.processexcellencelondon.co.uk

The Manufacturer, in association with Microsoft, is holding a free dinner for food manufacturers at the Lowry Hotel in Manchester. For further information contact Laura Williams at l.williams@sayonemedia.com

May

5-6

TBM Consulting will be holding a Leveraging Lean for Growth workshop in Manchester. Email Donna Hopkins at dhopkins@tbmcg.com

ADS will be presenting at SOFEX 2010, to be held in Jordan. For further information or to book contact Christine Gomm on 01428 602 645 or christine.gomm@adsgroup.org.uk

19-20

The Institute for Manufacturing will be hosting PRISM – a conference with advice on sustainability issues. For more information see www.ifm.eng.cam.ac.uk/ sustainability/2010

For further events please visit: www.themanufactuter.com

AUTOMOTIVE

UK’s ultra low carbon vehicle aspirations lifted The UK’s bid to become a leader in low carbon industries has been given a boost. Nissan has chosen its Sunderland plant to produce its electric LEAF model in Europe and Ford has decided to produce its environmentally friendly engines in the UK. Together, the announcements entail almost £2bn of private investment into UK automotive with £400m in grants and loan guarantees from government. Nissan will produce around 50,000 LEAFs per year at the Sunderland plant in a move which will “safeguard or create” 550 jobs. The model will be launched globally in March next year and production will begin in Britain in 2013. It will be able to run for 100 miles between charges, will have a top speed of 90 miles per hour and will be able to be charged up to 80 per cent in just 20 minutes via a 240 volt connection. It will be priced from £10,000. The Japanese company, which last year chose Sunderland to produce 60,000 24 kilowatt batteries for its electric cars, is investing £420m into its British operations for the new green lines. Government is pitching in £20.7m. The Sunderland plant currently employs around 4,000. Ford meanwhile is investing £1.5 billion in creating a new generation of environmentally friendly engines with Government providing £380 million in loan through its Automotive Assistance Programme (AAP). The investment will be spread across six projects at Ford’s Dagenham, Southampton and Bridgend plants as well as its research and development centre at Dunton, Essex. This move will reportedly safeguard 2,500 jobs Meanwhile, General Motors has announced it is to invest £1.7bn in its European operations with £270m in loan guarantees from Whitehall under the Automotive Assistance Programme. Business Secretary Lord Mandelson said: “I always said the Government would stand foursquare behind Vauxhall and with this announcement today we have kept our word. These are Lord Mandelson at the Ford announcement excellent plants employing a first rate workforce.”

ManufacturingNews GOVERNMENT

New investments pledged Four new government investments will be made to support jobs and skills development in manufacturing and engineering. A new £50 million Joint Investment Programme was announced which will support training and skills development in areas key to recovery and future growth. The funding will help nurture STEM subjects at regional academies, the modern form of technical colleges. A new adult career advancement and careers service will be opened, to give better access to information on the labour market. “We have a shortage of science, technology, engineering and maths graduates in the UK. We also need a new class of technicians. The skills system must be strengthened,” Mandelson said.

The National Skills Academies programme will be expanded, to support the need for skills in specific industries such as rail engineering, biotechnologies, composite materials, and logistics. Finally, the civic nuclear supply chain in the UK will be developed. The Government offered an £80m loan to Sheffield Forgemasters that will enable the heavy engineering firm that was rescued from financial ruin in 2005 to construct a 15 kilotonne forging press and associated finishing workshop. The money also pledges to co-fund 1,000 apprenticeships a year in the nuclear energy sector.

GOVERNMENT

Green bank announced The Government’s green agenda was unveiled today as Chancellor Alistair Darling presented the 2010 Budget. Acknowledging its fundamental role in sustaining the transition to a low-carbon economy, the Government will provide for a £2bn investment fund to support low-carbon industries (half of this fund will come from the sale of infrastructure-related assets, the other half from the private sector) and will create a Green Investment Bank. The idea has met wide acceptance but some fear most of the money will be given to big companies and larger industries. Gordon Edge, RenewableUK director of economics and markets, said: “The green bank is a nice idea, and we

welcome it. But it will work only if it represents a catalyst for further investment.” Help to businesses that want to commercialise low carbon technologies, the halving of the car tax for manufacturers of ultralow carbon vehicles and a £60m investment in UK ports to boost off-shore wind projects are other measures included in the Budget.

Newsinbrief ENERGY

The Government has announced plans to help boost the creation of a nuclear supply chain including the provision of an £80m loan to Sheffield Forgemasters. Business Secretary Lord Mandelson announced the package of measures at the centre of which is finacial assistance to enable Sheffield Forgemasters to build a major new manufacturing facility for ultra heavy forgings for civil nuclear power and other markets. The decision is part of a strategic intervention to develop the nuclear supply chain able to meet the demand of the next generation of new nuclear power stations.

To further capitalise on the green energy market, Siemens Energy has announced plans to establish a new production plant for offshore wind turbines in the UK. Siemens is still agreeing upon a final site for the plant, which will ultimately be based in the UK and would benefit from the on-going development of British offshore projects. Already eleven offshore projects have been implemented by Siemens, with more than half located in the UK. Investments for the project are expected to reach over the $100m range and have the potential to create employment opportunities for up to 700 positions.

Sport

Scotland’s ‘Mr Manufacturing’ is reportedly underwriting the Rangers Supporters Trust’s takeover approach for the Glasgow football club. Jim McColl, CEO and owner of Clyde Blowers and Clyde Pumps and the richest man in Scotland with around an £800m fortune, has reportedly agreed to back a scheme by the Rangers Supporters Trust to buy the club and have it owned collectively by the fans on a membership basis. Fees to own a stake of the Ibrox-based blue half of Glasgow could be as little as £600 as a one-off fee and £15 monthly. McColl is said to have held discussions with the Trust through solicitors and is prepared to back the initial £30m purchase of the club from its current owner Sir David Murray.

A Pelamis wave power turbine undergoing construction

ManufacturingAppointments UK Appointments Alumet Systems Steve Smith & Lee Summers

Alumet Systems (UK) Ltd has announced the appointments of Steve Smith and Lee Summers as contracts director and environmental manager respectively. Smith brings with him 12 years experience from the façade industry having previously

worked for both main contractors and specialist subcontractors, while Summers has seven years experience in the environmental aspect of the construction industry, having previously worked for sustainable housing developers in both the UK and Canada.

Kardex Lee Francis & Rudd Hoog

Kardex, the world leader in automated storage and retrieval technology, has announced two new appointments to its team. Lee Francis has joined its operations department as director of service for UK & Ireland. Responsible for service delivery, Francis will focus on increasing the quality of service that Kardex delivers whilst setting benchmarks for the industry.

Francis will also ensure that Kardex customers continue to receive the best possible service. Ruud Hoog will be assuming immediate responsibility for managing the sales of Kardex’s materials handling solutions in Benelux, UK and Ireland. Hoog has four years experience within Kardex and a career spanning 20 years working within sales and marketing.

Airbus Mark Barclay

Mark Barclay has been appointed senior vice-president, head of wing and pylon centre of excellence at Airbus. In his new role Mark will oversee all wing and pylon-related activities across Airbus, spanning operations

across the globe. He will join Airbus in May and be based at the company’s Broughton site in North Wales. Barclay takes over from Brian Fleet, who will retire in June 2010, after 36 years of service with the company.

Auto Windscreens Kieron Singleton

Auto Windscreens has appointed Kieron Singleton to the new role of chief financial officer. Singleton will head up the company’s finance function based at its head office in Chesterfield. The role will report directly to Auto Windscreens’ managing director, Peter Fox.

Singleton joined Auto Windscreens as interim commercial manager in June 2009. His promotion represents a major step forward in the establishment of the company’s independence from former owners ARQUES.

North West Aerospace Alliance Scott Bairstow

Scott Bairstow has joined the North West Aerospace Alliance (NWAA) as project director to oversee one of the group’s most influential programmes. Bairstow was formerly the Northwest Regional Development Agency (NWDA) business development

manager for the aerospace sector. In his new role he will head up the ASCE 2 (Aerospace Supply Chain Excellence) programme team at the NWAA’s recently opened Preston office, overseeing a team of 17 people.

The Elta Group Keith Jolley

The Elta Group has added to its senior management team with the appointment of Keith Jolley as business development manager for its UK operations. The Group, which provides fans and related ventilation

equipment to customers across the world from its constituent companies on four continents, announced the new appointment as part of its ongoing commitment to developing the business.

Leading Din Rail power supply manufacturer PULS UK has appointed Kelly-Ann Bruce as business development manager. Promoting its range of products throughout the United Kingdom, her main role will be to support PULS’s network of distributors through product training and to assist their sales staff during customer visits.

Two new business appointments and one trade union appointment have been announced by the Board of the Northwest Regional Development Agency. Clive Elphick, David Goldie and Frank Hont will all take up their appointments on March 1 2010 and are contracted until December 13 2012.

To notify The Manufacturer of your company’s appointments, please contact Daniel George at d.george@sayonemedia.com and 01603 671300

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The big picture The power of print Professor Ian Hutchings Institute for Manufacturing

Gutenberg invented the printing press in the 15th Century, transforming the way people accessed information. Now, 600 years on we are on the verge of another revolution, but this time we’ll be printing products rather than words, says Professor Ian Hutchings of the IfM.

All

of you reading this column will be familiar with the ink-jet printer which sits in the corner of the office, but you may be less aware of the impact this technology could have on manufacturing. The speed and quality of its printing have allowed ink-jet to dominate the home computer printing market, and the fact that the process can be ‘scaled up’ means it is moving into the commercial printing sector too. So far, so unremarkable. But what makes ink-jet so fascinating is that in principle almost anything liquid can be printed — meaning we can print out such materials as molten metals and solutions of polymers, as well as ink. Modern ink-jet technology involves the generation, manipulation and deposition of microscopic drops of liquid under digital control. It is this level of control which offers enormous industrial potential. Using software, the location of each droplet of material can be predetermined and, if necessary, can be changed in real time. This means that as well as being used on existing production lines to print barcodes and date stamping, the technology could also be used to create high-value, high precision products such as flat-panel displays, printed electronics, and photovoltaic cells for power generation. It can also generate cost-savings and efficiencies for business. This is not the stuff of science fiction. Cambridge Display Technology (CDT) is using ink-jet technology to make its state of the art polymer organic light

Microscopic drops of liquid under digital control

For more details visit: www.ifm.eng.cam.ac.uk

emitting diodes (p-oleds). It allows them to very precisely lay down its p-oleds in tiny wells within their display screens. Without inkjet technology, this would be impossible. And while CDT is ‘printing’ its hi-tech display screens, electronics companies are exploring the same technology to create circuit boards. Traditional processes, which involve coating glass fibre reinforced circuit board with a thin sheet of copper and then chemically etching most of it away to form the desired tracks, can be replaced. Ink-jet offers the potential to allow the conductive tracks to be laid down precisely — reducing the amount of waste and enabling the process to become greener and faster. The same techniques are also making an impact in the ceramics industry. Until the late 1990s conventional processes were used for ceramic tile decoration; essentially the same techniques that were developed for the printing of paper, card and textiles. Ink-jet printing provides a fundamentally different process — and exciting new possibilities. As a digital process, each tile in a sequence can easily be made different from every other, in small or even in major ways. Such was the impact of this technology that in 2008 no fewer than five companies launched in-line ink-jet printers for ceramic tiles. It won’t stop there, however. We are on the verge of a major step forward and the UK is in the vanguard. The East of England is home to a number of world-class companies that are exploiting this technology — Domino, Inca, Linx, Xaar and Xennia, to name but five. These companies and others grew out of some of the earliest research at Cambridge Consultants into the benefits of ink-jet printing in the 1970s. The IfM’s own Ink-jet Research Centre is currently heading a five-year programme of research to study the formulation, jetting and deposition of specialist printing fluids, and develop an overall process model. Ink-jet has already spawned one lucrative market: printers for small office and home office computing, an industry now dominated by big multinationals in the US and Far East. Now we could be on the verge of another paradigm shift, and one for which the UK is in pole position to take a leading role. end

Economics Recovery at risk if tax fails to connect Steve Radley, director of policy, EEF

Rebalancing

The wide acceptance that the UK needs a balanced economy has brought a renewed focus on manufacturing. Steve Radley considers how the next government must really understand how tax affects the sector if it is committed to growth.

is more than just manufacturing’s share of the economy. It’s about growing manufacturing, increasing investments in new technologies, making it easier to innovate and rewarding long term investments. Crucially, the tax system increasingly fails to reflect the investment needs of modern manufacturing. There have been some helpful changes to the regime in recent years, including the R&D tax credit, the drive to reduce administrative burdens and a new approach to working with large businesses. But the benefits are piecemeal, and for manufacturers, the tax system is close to breaking. The growing disconnect between the tax system and manufacturing puts rebalancing at risk. This disconnect means that entrepreneurs and innovators, as well as inbound and outbound investors, receive mixed signals about whether the UK values their business. It tells financial markets that their capital is better spent elsewhere. And it undermines the effectiveness of other government support for industry. A modern, competitive tax system would not only recognise the significant costs of investing in modern machinery. It would enable small businesses to invest in growth. It would attract mobile multinational investment to the UK. And it would provide the predictability needed to minimise the tax risks to returns on those investments. Encouraging manufacturing investment and innovation should be the starting point for any reforms. In a high labour cost economy, manufacturers remain competitive by exploiting innovation and advances in technology. Constraining manufacturers’ ability to re-invest in capital equipment forces them to compete on cost of labour, a battle the UK cannot win. The current system of capital allowances does just that because it fails to recognise the importance of capital investment, advances in technology and the short lives of modern machinery. A simple and practical proposal to recognise the true cost of modern machines with shorter lives would be to extend the time restriction on short-life asset election from four to eight years. This would allow a wider range of assets to be written off at the end of their useful economic lives. Manufacturers also need a tax regime that rewards innovation and entrepreneurs. For example, they would benefit from a more focused R&D tax credit that

was less costly to claim and reflected a wider range of development costs. Creating a more sustainable capital gains tax regime would also help attract longerterm investment into relatively riskier investments. And even as we encourage investment, the next government must avoid treating the industry as a cash cow. Cutting the headline rate is crucial to the UK’s long term competitiveness. But paying for a tax cut for 50,000 companies while reducing capital allowances for 900,000 is not a sensible way to rebalance the economy. Similarly, there may be merits in introducing a carbon tax to sweep away the cluttered and complex raft of environmental measures. But the revenues raised from any environmental taxes should be used to support investment in clean technologies, not to fund tax cuts for families or for non-capital intensive businesses. This will require politicians and the tax man to develop a better understanding of what makes modern manufacturing so successful. It also means a greater sense of direction and stability and an end to the legislative churn of tax changes that only lead to greater complexity. The government should also seek earlier engagement to improve relationships with business and deliver simplification that demonstrably reduces burdens on business. And while tax reform is necessary to boost investment in a balanced economy, it can also help in the drive to repair the public finances. The current debate on the timing and pace of fiscal consolidation misses the point on how companies will be impacted by decisions on tax rises and spending cuts in the coming years. Targeted tax reforms could help reduce the number of hard choices on which budgets – including health, education, infrastructure and defence – or which tax rises are necessary. In particular, a rise in the VAT rate to 20% from January 1, 2012 to mitigate the potentially savage cuts to government capital spending and mitigate the tax burden on productive sectors of the economy. Choices made by the next government will determine our ability to generate growth, to fund much-needed infrastructure improvements and to create job opportunities across our society. Creating a more competitive, simpler tax system would enable a balanced economy to flourish, and it would also send a powerful signal to investors that the UK was once again open for business. end

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businessasunusual Can Toyota get fanatical about quality again? Anand Sharma, Chairman and CEO, TBM Consulting Group

Let’s

Lean manufacturing is not to blame for Toyota’s recent quality and public relations woes. In its pursuit of growth, Toyota management lost its fanatical focus on what is most important to its customers: safety, quality and reliability. A management system that is lean and true to Toyota’s roots offers a way back to the top.

be very clear. The Toyota Production System (TPS) is not to blame for Toyota’s recent quality problems and spate of product recalls. What we call “lean manufacturing,” the process improvement tools and methodologies championed by Toyota, have been applied and proven to work again and again by companies in every sector around the world. If anything, Toyota wasn’t lean enough. Toyota’s quality failures reflect a management failure just as its past success reflected superior management. The company rose from the wreckage of postwar Japan by being fanatical about what its customers cared about. Customers have always cared about quality. So, lead by Kiichiro Toyoda, Eiji Toyoda and Taiichi Ohno, Toyota was fanatical about quality. As it turned out, buyers around the world wanted better quality cars, and Toyota’s vehicles became even more reliable with each new model introduction. As it grew and expanded overseas, Toyota managed to remain fanatical about quality and reliability. That was the heart of the brand. In a 2005 magazine article Toyota President Fujio Cho, who was mentored by Ohno, said the company must keep growing and expanding into more markets, and he acknowledged an internal target to capture 15% of the global automotive market by 2010. That push for growth was meant to reignite a fire in Toyota managers who had become fat and happy with success. On one level, it worked. Toyota took over the crown of world’s largest automaker from General Motors in 2008. Their biggest challenge, Cho said at the time, was maintaining the growth pace without diluting their “corporate DNA.” Before too long it became evident to customers and observers that Toyota wasn’t successfully replicating its production methodology and culture as fast as it was expanding. In 2006, following a now-eclipsed string of recalls, Cho’s successor Katsuaki Watanabe apologised and pledged a renewed focus on customers and a realignment of engineering resources. The company succeeded to a point, climbing back up the consumer-quality survey rankings, until today. Describing his efforts to speed-up the company’s famously slow decision-making process back in 2005, Cho noted that he wanted a management structure that was as instantly

responsive as Toyota’s assembly lines. “If there’s a problem,” he said, “I want to hear about it in an hour.” By not disguising and highlighting mistakes and waste, a truly lean management system reveals problems and enables corrective action better than any other methodology. Cho failed to embed such a lean management structure. In the face of early signals and mounting evidence, Toyota managers appear to have ignored, dismissed and failed to find the root cause of the accelerator problems. That management failure has already cost the company billions of dollars.

A way forward I was in a car accident in 1994. It had nothing to do with the automobile. I was a bit bruised and battered but otherwise unhurt. When the airbag on the Toyota Lexus I was driving exploded and expanded, I received some small burns on my hands and stomach. When I told the dealer representatives they said I shouldn’t have been burned and quickly took back the wrecked car to find the root cause and devise a fix so future customers wouldn’t be so injured. And they replaced the three-year-old car, for free. There weren’t any discussions about residual value or anything like that. They simply replaced the car. I don’t know how many times I’ve repeated that story. That’s what an automotive company does that puts customer safety and quality first. It’s the type of behavior that built the Lexus brand and drove it to the top of the luxury-car market in just a few years. Getting back to the company’s roots, admitting the problems and becoming utterly committed to customer safety and quality again, will take more than a pledge from Toyota’s President Akio Toyoda. Customers could not care less that the company they buy a car from is the largest in the world. If you look back, everything that Taiichi Ohno tried to do was focused on quality and customer satisfaction. One-piece flow and kanban systems were not designed for inventory reduction or productivity improvement. Those were the byproducts of a single-minded focus on improving quality. Join Anand for his Leveraging Lean for Growth Workshop May 5 & 6 in Manchester. Contact dhopkins@tbmcg for details

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Foreword I am delighted as Master Cutler to have been asked to write this foreword to the feature on Sheffield and South Yorkshire. The Cutlers Company in Hallamshire has, since 1624, been promoting, representing and ensuring the highest standard of manufacturing in the Sheffield and South Yorkshire region. Many of my illustrious predecessors were the founding fathers of the industrial revolution in the region with names such as Firth, Vickers, Hadfield, Brown and Osborn. As Master Cutlers, they shaped the industries we have today which still contain the skills, capacity and creativity that marks out South Yorkshire as one of the country’s premier manufacturing regions. The cutlery industry may be only a shadow of its former glory, but the steel, engineering and general materials and manufacturing industries that remain are looking forward to the upturn in demand and new opportunities that have recently come to the region. The recession has taken its toll on the regions industries, but to a lesser extent than some parts of the country. Many companies were already lean and using the latest technology, having suffered significantly in previous recessions at the hands of successive Governments, who valued manufacturing well down the economic food chain. The recent announcements from the Government relating to the establishment of a Nuclear Research Centre in the region and a financial package for Sheffield Forgemasters International to purchase one of the largest presses in the world not only guarantees the future of the region’s skilled workforce jobs and its global reputation for materials and manufacturing quality, but places Sheffield and South Yorkshire at the heart of the country’s manufacturing revival. The Cutlers Company is looking forward to supporting the manufacturing industries of this great region for another 385 years and ensuring that the name Sheffield and its ‘Made in Sheffield’ mark continues to be valued and identified as a measure of quality and innovation throughout the world. James H Newman Master Cutler

Secondary machining of a metal part for the medical market. Medical devices is a growing market in Sheffield manufacturing

Cutting edge

in a materials world Sheffield and South Yorkshire are steeped in manufacturing history. While for many the area may resonate with steel and cutlery production, today, with the work of residents of the Advanced Manufacturing Park and many modernised companies, the region is also a rising international star in composite materials development, advanced welding techniques, young start-up companies and civil nuclear research. Will Stirling reports.

South

Yorkshire has manufacturing in its bones. From traditional heavy engineering companies like Sheffield Forgemasters and DavyMarkham, to research-based organisations like the Advanced Manufacturing Research Centre with Boeing, and young companies trailblazing new technologies like water saving washing systems for the laundry industry, the Sheffield/Rotherham/Barnsley region is a melting pot of manufacturing innovation and success. There has always been manufacturing in Sheffield – Chaucer’s The Canterbury Tales refers to the city’s knife makers in the 14th century, and by the 1600s it had become the leading UK centre for cutlery manufacture (see foreword). Sheffield’s heavy steel industry prospered through much of the 20th century until the collapse of the steelworks and mining industries in the 1980s when the Thatcher government cut subsidies to British Steel and reined-in the unions. Steel production survived and during the 1980s and 1990s through close ties to local universities, Sheffield expanded its expertise in materials science and metallurgy. “The area never had a big OEM base, so instead it focused on developing high value steels and materials for application in different sectors including aerospace, automotive and civil engineering,” says Simon Spode, marketing manager for the AMP Technology Centre near Rotherham.

Leadstory

Materials world: Focus on Sheffield and South Yorkshire

Manufacturing companies make up 12.5% of the Sheffield economy, most of which are members of the Sheffield Chambers of Commerce. Built on the Yorkshire and Humber region’s expertise in metals, alloy and materials production, manufacturing evolution has happened in a wave of transitions as different market sectors were tapped. In one of the latest waves around 1999, with the establishment of the Advanced Manufacturing Research Centre (AMRC), South Yorkshire began to establish itself as a centre for composite materials development and, later, nuclear research. The AMRC opened in 2004 and in 2006 it was joined at the Advanced Manufacturing Park near Rotherham by The Welding Institute (TWI), Castings Technology International and Rolls-Royce, and since then by several smaller, upwardly mobile companies in advanced engineering and design fields. While the AMP became established, other local companies became leaner – and in some cases were rebuilt – so that today Sheffield represents an exciting mix of the old and new, where the old has modernised. This special feature on the region introduces some of the chief protagonists and emerging companies who are consolidating South Yorkshire’s place as a manufacturing stronghold of the UK, and in some fields, the world.

The AMRC is involved in 145 projects, 45 of which have been completed, and over 30% of its staff have a PhD level qualification. Last month a report commissioned by business secretary Lord Mandelson highlighted the AMRC as the model for a new generation of industry-focused research centres, able to deliver job targets in the Government’s New Industry, New Jobs strategy (see the interview with Prof Keith Ridgway on p24 for more on AMRC).

Advanced Manufacturing Park The Advanced Manufacturing Park occupies an imposing location overlooking the moors around Sheffield and Rotherham. The 100-acre site was announced in 2000 and opened with the AMRC, which also occupies the site, in 2004. It is home to Boeing and Rolls-Royce via the AMRC, Castings Technology International, Dormer Tools, Bromley Technologies, TWI (The Welding Institute)’s Yorkshire

Advanced Manufacturing Research Centre with Boeing A concept founded by Prof Keith Ridgway and experienced aerospace industry businessman Adrian Allen, the Advanced Manufacturing Research Centre (AMRC), partnered with Boeing and the University of Sheffield, is a research facility for advanced manufacturing techniques. Allen and Ridgway persuaded Boeing to provide the seed and development capital, and Boeing has committed to providing the AMRC with £1m a year for 10 years. More funding comes from Tier 1 and Tier 2 sponsors. One objective of the AMRC is to make savings in the costs of production. Traditionally in the aerospace industry, the cost of component manufacture had been 50:50, operations and material costs. But recently material costs have shot up and the ratio now is closer to 80:20, making it harder to reduce costs on operational measures. So the AMRC has invested in additive manufacturing to reduce the waste inherent with machining components. For traditional machining methods, the fly-tobuy ratio — the proportion of the material used in production which actually ends up in the finished component — is typically just 10-15%. Additive manufacturing methods can achieve a fly-to-buy ratio of up to 85%, significantly reducing material costs. Much of the AMRC’s additive R&D is focused on proving the metallurgical and structural properties of components, to give aerospace companies the confidence that they will deliver the same performance as traditionally-produced parts.

Athlete inspects skeleton sled designed and built by Bromley AET at the AMP near Rotherham

Technology Centre and a host of smaller companies involved in research, development and manufacture such as Fripp Design and Xeros. The park exemplifies good, working synergy between the private sector, academic institutions and some government and RDA (Yorkshire Forward) funding. “This is the only dedicated manufacturing park in the UK,” says Joe Anwyl, AMP’s head of business development. “There are big science parks throughout the UK that have a manufacturing component, but this is the only devoted manufacturing park. We have a unique proposition here, with the latest R&D facilities, university collaboration and strong ties to local manufacturers who benefit from and contribute to our knowledge base in materials science and manufacturing processes.” In the lobby of the AMP main building, a glass cabinet shows off a beautifully designed, jet black skeleton sled. It is a fine exemplar of the AMP, a marriage of aerospace industry design and engineering expertise and entrepeunerialsm. Founded in 1994 by professional skeleton bob athlete Kristan

Bromley, Bromley Technologies has carved out a niche as a specialist in the design, engineering and development of winter sports equipment – skeleton and bob sleds. Kristan leveraged his aerospace engineering background and success in skeleton bib racing (he is the most successful British competitor and holds the 2010 World and European titles) to start the company and its subsidiary Bromley AET, which offers multi-sports performance improvement consultancy, and Formula ICE, along with a sponsor-funded venture to improve skeleton and bobsleigh technologies and ‘bring to life’ science, engineering and technology to young people. Bromley Technologies partners with several companies at the AMP, including Fripp Design, and manufactures its products in its on-site workshops. “The AMP is the ‘Kensington address’ for our business, as only businesses that are at the forefront of their field can locate to the AMP,” says Mike Maddock, chief operating officer at Bromley. “This has given us a great opportunity to set up technology partnerships with the businesses on the park so we can share our expertise and technology to push the boundaries of performance.” Dormer Tools began life as a small family business in Sheffield in 1913. Now part of the Sandvik Group, Dormer is one of the world’s biggest and most influential manufacturers of rotary cutting tools with operations in more than 40 countries, employing over 1,300 people. The company’s AMP facility has a pioneering training room, a research and development facility and an export service to support emerging and developing markets. Andrew Reynolds, global product manager for drilling tools, says: “A primary focus for

Pony ladle at Sheffield Forgemasters, a member of Castings Technology International at the AMP

Dormer is the aerospace industry, where demand for innovation and productivity improvements is extremely high. One area of interest is the machining of new, advanced materials such as composites, which look set to become the predominant material used in aircraft manufacture over the next decade.” Dormer collaborates with local and UK universities, the AMRC and local companies including DavyMarkham to test and develop tools for different applications such as cutting and wear efficiency and heat removal efficiency. Like AMRC, Castings Technology International (Cti) provides R&D, mainly to improve the integrity and performance of cast components, and has recently introduced more services like becoming a supply chain intermediary in the global procurement of castings, and the design and manufacture of short lead time prototypes. Last year it reduced the design and development time for a marine propulsion prototype by 75%. As a member-based organisation, the AMP is a sensible base for Cti – a large cluster of its members are within earshot, including Firth Rixson, Sheffield Forgemasters and Doncasters FVC, with another cluster in Birmingham and more members worldwide. Cti works closely with welding specialist TWI, participating in the partly-Yorkshire Forward funded Technology Transfer Project with the National Metals Technology Centre (Namrec). Cti serves as a valueadded matchmaker to cast metal manufacturers, placing smaller companies into big procurement supply chains that they might otherwise miss. TWI is another member-based organisation with a base at the AMP. The welding technology specialist branched out from its Cambridge-headquarters in the 1990s to Middlesborough, Rotherham and South Wales – areas with manufacturing bases that needed technical support in tough times. TWI provides expert advice and data about all forms of welding and has helped many local firms increase fabrication productivity, such as cutting tool improvements at Rotabroach. This work has saved many local jobs, says Mark Roughsedge TWI’s sector manager. TWI has developed a worldwide reputation for friction stir welding, a solid phase welding technique it invented which avoids conventional arc welding electrodes. TWI uses the largest friction stir welding machine in the world, weighing 15 tonnes, which it commissioned using funding from Yorkshire Forward. “Hitachi Trains is importing the techniques we’ve perfected for making railway carriage shells for its Javelin train – these carriages rely completely on friction stir welding,” says Roughsedge. Hitachi plans to assemble its Javelin fast trains in the UK, but the carriages will be welded together in Japan for finishing in the UK – even though the technology originates in Sheffield. In an intriguing twist, Sheffield/Rotherham was shortlisted as a location for the new train factory, but this looks less likely as time passes. TWI is also involved in additive manufacturing techniques, and makes parts for a range of applications using the Selective Laser Melting process.

Materials world: Focus on Sheffield and South Yorkshire

Now and then, an everyday application for science and technology hits you between the eyes. Xeros is commercialising such a Eureka moment, developing a water-saving washing machine using a cleaning system based on polymer bead friction. Originally based in Leeds, Xeros has moved lock, stock and barrel to the AMP, mainly for the bigger facilities and a good deal, says CEO Bill Westwater. The company has a working prototype. “The cleaning is proven, the bead removal is pretty much proven. The next challenge is to build a machine that

complies with commercial laundry industry requirements.” Xeros was spun off from the research of Professor Stephen Burkinshaw, Professor of Textile Chemistry at Leeds University. The IP Group commercialised the research and provided seed capital for Xeros, with further funding in 2009 where it raised £1m privately and £250,000 from Yorkshire Forward. Xeros expects to launch a retail version of the washing machine by the end of 2011. “We would love it to be manufactured in the UK, but it’s too early to say,” says Westwater.

Yorkshire Forward and business support The Regional Development Agency for Yorkshire and Humberside, Yorkshire Forward, is understandably heavily involved in manufacturing. It was a key player in the establishment of the AMP and has helped several local manufacturing companies with targeted support in the last decade. For example, in 2004 Yorkshire Forward gave Sheffield Forgemasters £2m to support its management buyout — without the MBO the 200-yr old company would have shut down, says CEO Graham Honeyman. Since then “we’ve signed our second research and development project with them which supports us financially, because they’ve seen how important

our R&D is in winning overseas business”, he says. The RDA is organised by business sector, one of these is Advanced Engineering Materials (AEM), which incorporates the production and processing of metals and materials used in high-technology engineering applications. AEM has several pillars, like the Surface Engineering Group and Technology Transfer Programme (TTP), which have supported many local companies, for example a TTP collaboration between TWI, Castings Technologies Intl and Namrec that increased casting technology efficiencies. Yorkshire Forward helped set up The Manufacturing Taskforce, a group of industry leaders and support groups who in September 2009 published a

‘Blue Print for Manufacturing’ in the region. Chaired by Richard Wright, CEO of local company Intertius and former president of the Sheffield Chamber of Commerce, the Taskforce has identified the main sources of support to regional manufacturers, in areas like financial assistance and mentoring, and offers guidance in accessing this. “We have been working with the region’s manufacturers over the past few months to not only alert them to the opportunities and support available to them but to communicate what we can do in real terms to help deliver this,” says Wright, who identifies advanced engineering and materials and chemical industries among the key sectors in Yorkshire and Humber to help rebalance the regional, and national, economy.

Made in Sheffield Made in Sheffield is a recognised brand administered by a committee of Sheffieldbased businessmen and support agencies. To be awarded the Mark, applicants must comply with several rigorous criteria, which include having a Sheffield postcode and show a commitment to producing, not just finishing, products of high quality. For centuries, a Sheffield origin has commanded certain kudos with buyers of goods like knives and cutlery worldwide. Made in Sheffield was formed to capitalise on this name, to encourage better manufacturing standards and to benefit from a compliant international market. Chaired by Charles Turner of local industrial knives and blades manufacturer Durham Duplex, Made in Sheffield has a 16-strong committee and a growing membership which has recently expanded from traditional cutlery and steel companies to include companies in the food and drink, composite materials and other sectors. “Sheffield is unique as the only city with a globally recognised brand for quality manufactured products,” says Turner. “The Made in Sheffield Mark is the 21st century manifestation of this 400-year history and has a selection of

license holders, from the large such as Sheffield Forgemasters and Swann Morton, through to the more specialist like Platts and Nisbet Surgical instruments and Simpkins Sweets. Our 150th license holder is the global steel company Firth Rixson.” Membership is not merely a tick box exercise on a form, applicants have to earn the award and companies are assessed on site by committee members. “Sheffield companies are doing things for the next economy, like winning nuclear contracts, the offshore wind work here, the AMP – these companies are seeing benefits of the Made in Sheffield brand, and if you visit trade shows people do recognise it,” says Iain Smith at the Sheffield Chamber of Commerce, also on the committee.

Heavy engineering and steel industry Sheffield Forgemasters International The story of Sheffield Forgemasters International (SFIL) is a heart-warming tale of survival against the odds, turnaround and extraordinary export success. The secret? Hard work, the conviction and application of key people to make the right product in a tough international market, and the support of a sympathetic workforce and financiers. In 2004, chief executive Graham Honeyman with a team including Peter Birtles and ex-Corus CEO Tony Pedder, and with financial support from Yorkshire Forward, led a management buyout of Forgemasters from its US parent company Atchison. From a woeful accounting position where the business was losing £750,000 a month to one where in 2009 SFIL’s revenues were £120m, and it employees 30 apprentice a year, Honeyman and team turned a dying company redolent of some of Sheffield’s most inefficient industries, into a world class competitor. It focused on high value, specialist product that was difficult and expensive to make, in Honeyman’s view the only way for UK companies to compete in global advanced engineering markets. “You must supply things in the United Kingdom that other people find it difficult to make, or with a superior technology,” he says.

This strategy has paid off in spades. In recent months SFIL has won global contracts in new sectors such as hydroelectric power for a Brazilian company and oil and gas rig components, and it provides Russian steel giant Severstal with 70% of its steel cold rolls. And it is well positioned to provide components for the UK’s new nuclear industry, which was heavily endorsed in March when the Government awarded it with a £80m grant to finance a new, 15,000 tonne press to make it only the second company in the world capable of making the biggest forgings required for specific components of nuclear reactors. Read more on SFIL’s turnaround story at: www.themanufacturer.com/uk/content/10116/Man_ of_steel_-_Graham_Honeyman

DavyMarkham

Firth Rixson

Created from the merger of local firm Davy Engineering and Markham of Chesterfield in 1997, heavy engineering company DavyMarkham is also very much part of the South Yorkshire manufacturing success story.

Firth Rixson is another of Sheffield’s sons in the cast and forged metals and heavy engineering sector.

It too underwent an MBO, in 2006, led by managing director Kevin Parkin and financed by private equity firm Endless. Like SFIL, this was a business saving exercise. Early in the previous decade, it had industrial relations problems and suffered many operational inefficiencies which were thwarting its progress in winning international contracts. Now the £21m turnover company, which fabricates very heavy components for specialist applications like mine hoists, tunnel borers and moving bridges, is engaged with several promanufacturing bodies like Made in Sheffield, has a self-devised, selffunded apprenticeship scheme and a schools outreach programme. (Read more about DavyMarkham in Manufacturing in Action on p115). In late February DavyMarkham was bought by engineering procurement and construction firm Hindustan Dorr Oliver (HDO), giving the Indian company access to the heavy engineering sector. HDO says it intends to invest strategically in new plant and equipment at the Darnall factory, and expand its sales and marketing operations. In March, DavyMarkham became the first tier two partner for the Nuclear Advanced Manufacturing Research Centre at the AMP, gaining a strong position in the supply chain for nuclear energy build.

With three UK sites, two in South Yorkshire and one in Derbyshire, and operations in the US, it is a big group that provides castings and forgings to sectors including aerospace, energy, automotive and defence. Tough times and consolidation in the steel industry forced Firth Rixson to undergo an in-depth change management programme which involved a lean manufacturing overhaul. “Everything we do has a lean aspect,” general manager Brian McKenzie told TM in 2009. “The investments we are making to improve flow, enhance capability and to streamline our process will result in a more responsive organisation. Three or four years ago we were four different businesses competing against each other. Now, we are a verticallyintegrated metals solution provider.” On March 30 Firth Rixson became the 150th member of the Made in Sheffield brand.

Materials world: Focus on Sheffield and South Yorkshire

Gripple Gripple is synonymous with enterprise, innovation and Sheffield. The company makes wire joiners, tensioners, suspensions systems and other ostensibly simple kit to join and fasten wire and metal materials. It was founded by garrulous Yorkshireman Hugh Facey, whose enthusiasm for Gripple and the spirit of invention and entrepreneurialism is infectious. “The best ideas are the simple ones, because it’s not easy to find another solution,” he says, in reference to the main product, the Gripple wire joiner, which has helped the company to win a series of awards including the Queen’s Award for Enterprise, MX Awards and TM’s The Manufacturer of the Year award in 2006. “And you must defend your IP to the bloody hilt,” he adds, referring to the legal battles Gripple has fought and won over patents to its deceptively simple product designs. Mr Facey developed prototypes for a wire joiner device between 1986 and 1992 while running his first company, Estate Wire. In this period he secured £4,000 in funding from the DTi, a substantial leg-up in those days. His journey posed questions about the internal architecture of the Gripple, and joining the housing in the most secure way, which introduced him to an Italian microwelder company in Dusseldorf and investment in a £16,000 machine. It was a short-lived victory as soon after he was introduced to injection die-casting and the whole game changed. A trip to Australia left the wire joining market rather non-plussed, until

Gripple was introduced to viticulture. Now, after several failed variants, viticulture one of Gripple’s biggest markets. Facey is convinced products must be trialled on customers, and that perfection only comes from field testing. “Real innovation is about doing things, and getting some things wrong,” he says. Whatever his formula, it works – the company has annual revenues over £25m and sales increased 20% in the two years to 2009. Facey believes ardently that people are your best asset and he is big supporter of employee ownership, and a member of the Employee Membership Association. Gripple set up an employee share purchase scheme in 1994 which most employees take part in. A £1,000 investment in 1994 would be worth £20,000 today. It’s what keeps staff focused on the work, he says. “I can’t recommend it highly enough.” Gripple has just launched the C-Clip, a fastening product for mech and electrical services that is faster and produces less CO2 in manufacture than traditional solutions.

Loadhog Gripple’s sister company, Loadhog, is an awardwinning reusable packaging manufacturer established by Hugh Facey and Gripple employees in 2004. It operates from a purpose-built 15,000ft2 factory on the River Don and makes several exciting products for packaging and transportation; the Loadhog Lid, the Smartstak, the Pally and the Pally & Lid System. The Lid functions as a lid for standard palleted loads, using in-house designed and made hooked straps with a tensioning and release mechanism built into the lid itself to secure the lid to pallet. The product improves load stability and reduces labour time to secure goods, while also reducing waste shrink wrap and nylon banding used in securing pallets. The Pally & Lid System works in a similar way. Smartstak, the most popular product, is a simple but ingenious device, a stackable tray

designed to stop glass products from becoming dislodged during transit, a common problem in shipping bottled goods that have a tendency to move and drop out the side of their stacked layers. The edge of Smartstak is crimped in a clever way to catch bottle rims and keep the product away from the edge. Last year was the first year Loadhog made profit. “The company has had a fairly hard start to life, although oddly our most successful year was the 2009 recession,” says general manager Ed Stubbs. “We’re

optimists by nature. We started with just the Lid which we thought would be a world-beater, but it has not been as successful as we’d hoped. Gripple’s success was founded on one amazing core product, our business is more about selling systems and solutions and adding technology to the core product. Our success now is coming from diversifying and being able to offer more than one item for one job.” Since the Lid was launched, Loadhog has launched a new product every year. It works with companies like Honda, Tesco and Royal Mail. “One of the advantages with working with these big companies is the opportunity for innovation and new products – there are many problems to solve,” Stubbs adds. This market is driven by retailers and OEMs search for savings in their supply chain. “Our Pallys and Lids don’t need miles of shrink wrap. Companies are looking more at their suppliers to gain these savings than solely their own operations.”

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Materials world: Focus on Sheffield and South Yorkshire

AESSeal No feature on South Yorkshire manufacturing would be complete without mentioning AESSeal. Established in 1983, the manufacturer of mechanical seals and support systems used in commercial applications like oil and gas and process manufacturing, is a well-known success story. Entering and prospering in an international market dominated by a few big global players was only possible, says managing director Chris Rea, because AESSEAL focused on customer service as the one possible competitive advantage, and the company bases its whole business model on this pillar. It offers, for example, 48-hour delivery of standard products or it will be provided free of charge, and a guarantee to mechanically seal customer plants at a 25% discount to the incumbent supplier — both offers are part of a seal management programme, another market differentiator. This strategy, training programmes for every department and well-crafted business policies including quality, training and business ethics policies, have rewarded AESSEAL with a clutch of awards which includes four Queen’s Awards for Innovation, Sustainable Development and International Trade. Rea, a colourful Irishman and well-known personality in the Yorkshire business community, is proud of

the company’s achievements over 25 years of fierce competition from bigger competitors. AESSEAL has engaged in a partnership with Siemens PLM Software to help distribute £24m worth of software into primary and secondary schools and some universities, so young people can get a handson taste of ‘clean’ engineering from an early age. “We’re creating a generation of people who’ve won prizes with Siemen’s software under the tutillage of some of our people who’ve done it in their own time,” he says. “This is their future customer base – they’d like these students to take the software home and use it but they can’t afford the fee. I say let them have it for free and you – and the engineering industry – will be repaid when they reach 21 with far better understanding of engineering principles with some pupils having been exposed to it since primary school.” The software partnership is part of AESSEAL’s corporate and social responsibility programme.

Ones to watch – other South Yorkshire gems Remploy Perhaps the UK’s leading provider of specialist employment services for disabled people and those experiencing complex barriers to work, Remploy’s factory network manufactures products in a range of business sectors, including school and utility furniture (Sheffield), automotive components and chemical, biological and nuclear protection suits for police and military. (A full profile on Remploy will run in the May issue of TM).

Outokumpu In 1992, British Steel Stainless merged with the Swedish firm Avesta to form Avesta Sheffield, and in 2001 merged with Outokumpu, making it the third largest stainless steel producing company in the world at the time. As a producer of stainless steel and associated technologies, Outokumpu manufactures a range of grades by varying the levels of chromium, nickel, molybdenum and other elements such

as titanium and niobium that are added to its stainless steel.

to quality and the advancement of industry standards.

Kostal UK

Bestobell Valves

The Kostal Group was founded in Germany in 1912. The group is a mechatronic specialist, manufacturing advanced technological products for the automotive industry. Since its establishment, the Kostal Group has increased its turnover year on year — an achievement it attributes to keen customer focus. Moreover, strong communication and understanding between the Group and its customer base has allowed Kostal to re-orientate when shifts in markets have occurred, thus absorbing the impact of globalisation. Kostal is the 100th organisation to receive the ‘Made in Sheffield’ Mark, available to organisations in the region demonstrating exemplary dedication

A global company in the design and manufacture of cryogenic valves and fluid control equipment, Bestobell Valves is housed in a purpose built, 30,000 sq ft facility at President Park, Sheffield — a location chosen in order to exploit the region’s highly skilled labour base. Part of The Flow Group, Bestobell designs and manufactures valves, fire fighting and automatic dust control equipment, filters, strainers and instrument systems for hazardous areas and hostile environments. Complying with the highest industry standards Bestobell is recognised the world over for its commitment to quality and service.

The companies featured in this article are not an exhaustive list of manufacturers in Sheffield and S. Yorkshire. They were selected from companies TM staff visited in 2009 and Jan 2010 and where we believed there was a story to tell, rather than any specific criteria based on size or manufacturing sector.

Have your say at www.themanufacturer.com

Boei n g for broke With the UK’s aerospace industry flying high in a global downturn, Edward Machin meets Keith Ridgway OBE of the Advanced Manufacturing Research Centre with Boeing to talk Future Factories, intellectual property and success in the civil nuclear sector.

The

brainchild of Keith Ridgway, Professor of Mechanical Engineering at the University of Sheffield, and local businessman Adrian Allen, the Advanced Manufacturing Research Centre with Boeing (AMRC) was established in 1999 to provide an integrated research facility and international benchmarking centre for the UK aerospace industry. Housed in the 4654m2 Rolls-Royce Factory of the Future at Sheffield’s Manufacturing Park, AMRC received initial government funding of £5.93m from the Department of Trade and Industry, as well as financial support from the Regional Development Agency, Yorkshire Forward, the European Union regional development fund and the University of Sheffield. Moreover, says Professor Ridgway, “As a central partner — providing a £10m golden handshake for the project — Boeing maintains a ten year commitment to invest in research and development in science and manufacturing at the facility.” Tier 1 membership of AMRC amounts to £200,000 annually, with partners taking an individual seat on the board and an opportunity to influence

the direction of future research. While members such as Boeing, BAE, Messier-Dowty, PTC and MAG Cincinnati participate in, and obtain the result of, all generic projects, they may additionally specify any number of individual projects which are presented to the board for ranking and approval as funds become available. The £30,000 Tier 2 membership entitles companies to engage in all generic projects, while also being represented by a single board member. With 50 partners — 20 Tier 1 and 30 Tier 2 — currently on board, AMRC’s modus operandi remains, says Ridgway, “Reducing production times by a factor of five; a target we seldom fail to achieve. So, for example, when undertaking work on a titanium disk for Rolls-Royce we utilise dynamic machining techniques which allow our companies to significantly increase the ‘chatter threshold’ in the manufacturing methods. Given that many of the materials members are interested in — titaniums; nickel alloys; inconel; composites — require slower or softer machining than used in the industry,

Interview Keith Ridgway

moreover, we were required to develop advanced process damping techniques to cut with significantly higher removal rates than ever achieved before: another AMRC unique offering.” Similarly, Messier-Dowty, having never supplied landing gear to a commercial aircraft prior to its involvement with AMRC, was recently selected as the preferred supplier for the Boeing 787 Dreamliner — the world’s first airliner to use composite materials for the majority of its construction. “If you consider the supply chain as a whole for Boeing on the 787, you have two engine choices: General Electric or Rolls-Royce, with the market shared evenly,” says Ridgway. “There exists a similar situation with Boeing and Airbus, in that it is not uncommon for companies at AMRC to supply both with components. From our point of view, however, the competitive aspect of such relationships are immaterial. We view our role as simply working with UK suppliers to help them increase market share, whatever and wherever that may be.”

Collaboration stations It almost goes without saying that those involved with AMRC view the community chiefly as a vehicle through which to further their own manufacturing techniques — a burning philanthropic desire to advance your competitors is, understandably, left at the door. Nonetheless, on closer inspection a palpable sense of mutual beneficiality can be seen to exist within day-to-day life at the facilities. Explains Ridgway, “If we have 50 partner members at any one time, there will be five companies at the very top of the supply chain that are looking to work with the best suppliers. There is then a group of people who are striving to make themselves more competitive so as to secure those contracts and, finally, you have another set of members who supply those manufacturers with their equipment needs.” By way of example, should Mori Seiki — a manufacturer of CNC machine tools and systems — wish to demonstrate that they can produce a part five times quicker than industry standard, they will incorporate equipment from Sanvik Coromant in the process: a win win situation for all involved, says Ridgway. “We don’t sell, for example, machine or cutting tools here. Very simply, we create and offer a unique environment within with all parties can collaborate to reach a solution. How anybody in that project uses the results is very much up to them.” Unsurprisingly, AMRC has, since its inception, been regarded as a highly collaborative environment. Indeed, confirms Ridgway, “Our facilities were specifically designed so as to encourage collegiate interaction in all that we do.” With staff from both Tier 1 & 2 partners working on site full-time, moreover, rosettes are generally awarded to the project rather than individual companies. So, should Rolls-Royce seek to investigate a particular aspect of additive manufacturing, by putting its people at the heart of the research process and utilising

the solutions provided by fellow partners, “We can ensure that the best expertise possible is brought to any given project,” he says.

Daylight robbery? Let us not kid ourselves, however. Given the fiercely protective nature of the industry’s technological advances, are we to believe that Ridgway and his cohorts have avoided a royal rumble over that which, more than anything, causes manufacturers to sleep with one eye open: intellectual property rights? “Almost without fail, when a company is looking to join us their primary focus is on how any resulting IP will be delineated,” he says. To accommodate such concerns, AMRC operates its projects according to a twofold structure — the first of which is partnerfunded. All information is owned by AMRC and licensed for use by its partners, given that the resulting work is not strictly confidential nor bound by competition issues: the speed at which titanium can be machined being one such example. Conversely, he says, “When it comes to how a particular engine part is machined or a material that one of our members is specifically seeking to develop, the company will insist on retaining the IP and, accordingly, pay for the project separately. As such, they are able to complete the work by using our machines at a preferential rate, with approximately 60% of projects undertaken on site falling under this banner.”

It’s all academic While not providing on-site teaching capabilities due to VAT restrictions, central to AMRC’s ability to provide globally-leading aerospace supply chain solutions is its affiliation with the University

Aims of the AMRC In creating a world-class community where research design, manufacture and study interact to put technology into practice, the AMRC aims to: Focus on machining titanium for aerospace applications; Support a cluster of aerospace manufacturers and suppliers; Secure strategic alliances with leading manufacturers in the aerospace and aerospace-associated industries and leading research centres; Develop research programmes focused on industrial problems and applications; Attract, build and assist local industrial district around the site, and; Spin out the expertise developed with the aerospace cluster to SMEs.

Interview Keith Ridgway

of Sheffield: one of the project’s original partners. Indeed, as part of the Department of Engineering, “We enjoy a relationship with the university whereby we can bring staff in to work on a range of our projects, which they can then take back for further application,” explains Ridgway, whose background includes lecturing posts at the Universities of Manchester, Staffordshire and Sheffield. “Crucially, however, and maintaining the secure nature of our operations, while faculty members may be working on an advanced modeling tool, for

example, in bringing the application back to AMRC it must remain confidential — and not go the other way. “As such, we enjoy the considerable benefits of such a relationship: the use of world-class equipment and brain-power, a steady stream of funding and the capacity to enable Sheffield’s academics to engage with industry-leading manufacturing techniques. When it comes to the details of certain projects, however, it remains vital that we maintain a secure environment. The same goes for the nuclear side of things.”

A Nu dawn

Biography Keith Ridgway 1973:

Special Apprentice at Mather and Platt Ltd, a Manchester-based manufacturer of centrifugal pumps for the power generation and oil industries.

1975:

Kennedy and Donkin Consulting Engineers, where he works on the design of thermal power plants, carrying out trouble shooting projects in Yemen, Venezuela and Northern Ireland.

1980:

Joins the University of Manchester, where he is supported by Shell International Marine to carry out research on the design of anchoring systems for large ships.

1982:

Moves to Staffordshire University as a lecturer in Design and Manufacture, remaining there until taking up a similar position at the University of Sheffield in 1988.

1997:

Professor in Design and Manufacture at the University of Sheffield.

2001:

Works with local businessman, Adrian Allen, to establish the University of Sheffield Advanced Manufacturing Research Centre with Boeing.

Professor Ridgway was awarded an OBE in the Queens Birthday Honours in June 2006, and became a Fellow of the Royal Academy of Engineering in July 2006

A joint initiative with industry, the University of Sheffield and the University of Manchester’s Dalton Nuclear Institute, the Nuclear AMRC (NAMRC) operates according to the same — highly successful — model as its aerospace older sibling. Launched by Lord Mandelson in December 2009, and representing a vital feature of government’s Low Carbon Industrial Strategy, it will seek to prepare British companies for the first wave of new nuclear build in the UK. Enjoying 8,000m2 state of the art manufacturing demonstration facilities a stone’s throw from Ridgway’s office, and with extended research laboratories in Manchester, NAMRC will assist its consortium members with the nuclear accreditation process and quality standards; enhancement of manufacturing techniques; development of company workforces; and the culture required for success in the nuclear industry, among others. “Ultimately,” says Ridgway, “while there are some excellent UK-based companies working in the civil nuclear market, we need to be honest in saying that much of the expertise in new build capabilities vanished with the retirement of those working in the 1970s. The challenge, therefore, is how to both develop and rejuvenate our nuclear supply chain so as to enhance what we already have, thus further enhancing the UK manufacturing industry.” With the vast majority of power stations built by foreign companies such as Areva and Westinghouse, how can British manufacturers seek to penetrate such air-tight supply chains — seemingly a closed shop up to this point? Firstly, he says, we need to ascertain the specific requirements required for nuclear supply work; with answers forthcoming in six months, preferably less. From there, those companies need to be in a position whereby they can move to win contracts and supply the industry by the year’s end: easier said than done, surely? “There’s little point obfuscating the issue,” Ridgway asserts, “this is going to be a lot of work over the next three decades. However, in representing the focal point for the UK’s civil nuclear manufacturing industry, and building on the expertise gained through our decade here, NAMRC will sit at the forefront of enhancing nuclear manufacturing capabilities — assisting members to increase quality, reliability and efficiency, and reducing costs and complexity.” Easy said; easy done, it appears. end

Thursday 20th May 2010

Inspiring Operational Excellence Chesford Grange, Kenilworth, Warwickshire

Leading Organisational Change

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Listen–Observe–Challenge–Action

To book online please visit: www.leanmj.com

Inspiring Operational Excellence AGENDA 09:00

Coffee, registration and networking

09:30

Welcome and house keeping

09:40

The need to change the way we change

Credit Suisse will expose the compelling need for innovative change and strong leadership in today’s business world. Focusing on the responsibility of leaders to constantly question methodology and search for the next step improvement, Harder will show that a passive approach and complacent use of tools will leave an organisation vulnerable.

11:10

Coffee and networking

11:40

Creating a true win:win on cost and performance

A live case study with insights into the BT Global Services’ ‘Billing Plus’ programme, involving the outsourcing of a complex operation and IT support function across the globe. The session explores the challenges they faced and the approach they used to overcome obstacles.

Brenton Harder Credit Suisse, Vice President Operational Excellence

10:10 Understanding the compelling reason to change

Expert panel members will give personal insights into leading major change transformations and will explore how the context and environment surrounding their projects impacted on the way change was realised. The session explores the critical success factors to making change happen and will culminate with questions to the panel.

Bill Bird Moorhouse Consulting, PMO Director, Billing+

12:25

Morning conclusion

12:40

Lunch and networking

13:40

Work stream A: One Team — Leading everyone, everywhere, everyday

LINPAC Packaging share organisational and individual learning from the roll out of a global way of working LPOS (LINPAC Packaging Operating System). Key players will share the highs and lows of the journey so far and outline their strategy and vision to engage their people to optimise processes by 2014. The second half of the workshop will involve a facilitated table discussion to explore how to tackle the key blockages to change.

Peter Watkins GKN, Global lean enterprise and business excellence director Fernando Navarro BNP Paribas, Business transformation leader UK Ann Essain Warwick Medical School, Associate School Professor

Andrew Board BT Global Services, Delivery Director, Billing+

Rhian Hamer Head of Lean, Ministry of Justice

Chair - Andy Spooner Suiko, Business Development Director

Chris Horton LINPAC Packaging, Vice President Operations Mike Salkeld LINPAC Packaging, Head of Lean Enterprise Garry Trotter LINPAC Packaging, Best Practice Share Manager

13:40

Work stream B: Leading through change: in charge but not in control Research has shown that 70% of all change projects do not realise their project objectives because they fail to win the hearts and minds of the people involved. During this thoughtprovoking and interactive workshop delegates will: Gain practical insights into how organisational change really happens Explore the human and messy side of change Learn to engage with these hidden dynamics in order to lead change more effectively

Tea and networking

14:55

Work stream A: Achieving profitable growth and sustainable change

This work stream is a hands-on workshop to explore the use of the Suiko How™ change assessment. The assessment will enable you to get others to better understand the execution gap and guide you to the next steps in delivering effective change. Get involved and gain access to a tried and tested assessment process which you can take back to your live projects.

14:55

Dom Moorhouse Moorhouse Consulting, Managing Director

16:00 Insights into gaining competitive advantage

Question time panel - An opportunity to grill a panel of experts, each have a viewpoint and are exponents to a range of different methodologies. The session gives you a chance to question the panel on a range of challenges that today’s leaders face when seeking to gain competitive advantage.

Dominic Mahony Lane4, Europe Practice Director, Olympic Bronze medallist and current Team Manager for GB Modern Pentathlon

14:40

Realisation Management’ – defining thought leadership on this topic. During this informative session, in addition to hearing the key survey findings, delegates will learn how a benefits-led approach to programme definition can make the difference between success and failure.

Dr Keivan Zokaei Director of MSc Lean Operations, Lean Enterprise Research Centre

Dr Andy Wood Managing Director, Adnams and Cranfield Alumnus

Mike James-Moore Senior Fellow, WMG

Nigel Newman Master Trainer, Edward de Bono foundation

Andy Marsh Suiko, Managing Director

Work stream B: Realising the benefits from organisational change.

In 2009, the Financial Times and Moorhouse Consulting undertook the UK’s largest and most comprehensive, survey into the benefits of organisational change. The findings have led to the development of ‘Balanced Benefits

Chair - Brenton Harder Credit Suisse, Vice President Operational Excellence

16:45

Thursday 20th May 2010 Chesford Grange, Kenilworth, Warwickshire

book online: www.leanmj.com In association with

Inspiring Operational Excellence Despite the continued uncertainty in the business world, the proactive are continuing to seek out opportunities to improve. For many businesses that are in the process of implementing new ways of working there will be the inevitable challenge around whether the business is following the right path. Join other leaders, key stakeholders and implementers of change for a day of listening, observing, challenging and taking action. Together we will explore the topic by asking 3 questions: WHY is the pursuit of operational excellence valid? WHAT are the principles and methodologies that need to be in place? HOW do you approach the change process to maintain the necessary pace and ensure sustainability of the solution? Our explorative programme will include a variety of interventions to inspire you not only to look at what you already have achieved but to also look at things differently with a fresh pair of eyes. The day will draw on from a balance of expert practitioners, facilitators and thought leaders from both business and academia.

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www.leanmj.com Or call Benn Walsh on +44 (0) 207 2027 488 Email: b.walsh@sayonemedia.com Cost per delegate is ÂŁ345.00 inc VAT. Fee includes one day conference, lunch and refreshments. Multiple bookings will recieve preferential rates.

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LMJ subscribers benefit from a 25% discount off the prevailing rate.

Leadership and Lean

Troubled car industry sparks into life Mark Young explores the state of play for Britain’s ultra low carbon vehicle (LCV) proposition and finds out why the ambitious plan to become a world leader in LCV might just come off.

Last

year the New Automotive Innovation and Growth Team (NAIGT) — the faculty at the Department for Business, Innovation and Skills that has evolved into the independent Automotive Council — released this vision of the UK automotive industry: “A competitive, growing, and dynamic industry making a large and increasing contribution to employment and prosperity in the UK, and playing a decisive global role in developing and manufacturing exciting, low carbon vehicle transportation solutions…” That ideal was brought closer to reality in late March, when global car giants Ford and Nissan announced within hours of each other that they had selected the UK as the base for developing new low carbon operations. Between them they will invest nearly £2bn in the UK to make it happen, with Ford’s £1.5bn backed partly by government loan guarantees and a European Investment Bank loan. Having last year decided that its Sunderland plant will produce 60,000 24KW batteries to power electric cars for both itself and Renault, Nissan has now announced that Sunderland will make

some of the electric cars as well. Production of the 100-mile range, 90mph top speed LEAF model for European markets will begin in 2013 and 50,000 are expected to leave the Tyne & Wear factory’s lines per year. Nissan will invest £420m in the UK to set Sunderland up for the new model and will get just over £20m in a golden hello from government. The ambiguous phrase “safeguard or create jobs” seems to be a staple clause in any investment announcement these days. It was wheeled out here too – but it is very good news for the local economy that 550 jobs were quoted. Ford, meanwhile, will invest £1.5bn to create a new generation of environmentally-friendly engines, with the Government providing £380m in loan guarantees through its Automotive Assistance Programme (AAP) as part of the package. The investment will be spread across six projects at Ford’s Dagenham, Southampton and Bridgend plants as well as its research and development centre at Dunton, Essex. Two and a half thousand jobs have been safeguarded. These investments demand recognition as an interim victory in the efforts to make the UK a leader

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Leadership and lean

in the low carbon vehicle sector. It is that much harder than for her continental competitors in that the UK has no real domestically-owned, volume car makers. So without announcements of this kind, a presence in this sector we have so highly prioritised is far from guaranteed. Business Secretary Lord Mandelson intonated as much at Ford’s Diesel Engine Centre in Dagenham on the day of the announcement. When asked how government can afford this spending when the pressure is on to reinin the public purse, he said: “We cannot afford not to make this, and these, investments. The biggest antidote to a deficit is growth and these jobs would be lost overseas if we are not at the forefront of the LCV technologies.”

Is the grass greener on this side? There is actually a case to be made that avoiding overt national brand iconography – think of France and Peugeot Citroën and Renault leap to mind, the same with Germany and Volkswagen, BMW, Audi and the like - actually constitutes a help rather than a hindrance in terms of the race for ultra low carbon leadership. Nikki Rooke, spokesperson for the Society of Motor Manufacturers and Traders (SMMT), says that that although our largest continental cousins have made clear in Brussels that they are committed to developing ultra low carbon technology, the fact that they will be

looking to protect their native producers severely inhibits their ability to attract investment from outside of Europe. “[Other countries] have a national company which they’re looking to support; effectively the proposition for the UK is much larger,” says Rooke. “We’re not looking just to sustain one or two companies, we’re looking to encourage a much broader range. For the vehicle manufacturers that are already producing here, the threat isn’t from other car factories in the UK. It’s from similar Nissan, Ford, Vauxhall and Toyota plants in Europe where the parent companies could make their investments. That creates an opportunity – the fact that we’ve got a government that is supportive of UK investment rather than a government that is more inclined to focus its efforts on protecting its national interests is a very powerful signal for us to send to multinational companies looking for somewhere to invest.” Though government has been criticised for being slow to disseminate cash through the Automotive Assistance Programme during a period when firms throughout the automotive supply chain were struggling to survive, Rooke’s view is that “a fundamental shift” to a proactive strategy rather than a reactive one proves Whitehall is now committed to automotive’s cause – especially since it has seemingly begun to align its money and its mouth.

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Leadership and lean

“Previously they may have only stepped in on a case by case basis if there was a certain company or a certain plant in danger but the idea now is to work long term with the automotive industry to position it for the next wave of growth,” she says.

Walking the walk Lord Mandelson’s position as co-chair of the Automotive Council, alongside the greatly respected former Ford executive Richard Parry Jones, certainly suggests relationships are tightening. The SMMT is effectively working as the Automotive Council’s back up team and has formed two factions to help with the ultra low carbon proposition; one for technology and one for supply chain. On the technology side, a road map has been drawn up which focuses on encouraging companies to develop demonstrator programmes to inspire both consumer and manufacturer empathy. The supply chain group meanwhile, is looking to build a commodities road map to highlight which components vehicle manufacturers will be looking to supply from the UK and identify the companies with the potential to provide them. SMMT has fed into this initiative with a survey conducted in the last quarter of 2009 among chairman, chief executives purchasing directors of vehicle manufacturers and major tier one suppliers producing in the UK. The survey found that for these companies sourcing from the UK is an increasingly attractive proposition owing to exchange rates, logistics efficiency and the need to cut road miles in line with corporate social responsibility drives. The challenge now is to ensure the supply chain does not miss the trick. Rooke says the supply chain group’s immediate focus is communicating the plethora of funding opportunities available from government directly and through support agencies including the Technology Strategy Board (TSB), Carbon Trust and Energy Technologies Institute (which together have formed the Low Carbon Innovation Group).

The advantages of equipping the supply chain will reap reward - “a healthy supply base with ultra low carbon capabilities will attract more foreign investment in R&D and potentially more production,” says Rooke. “Companies are much more likely to base new models here if there’s a supporting supply chain nearby.”

Money talks Examples of funding opportunities and recent awards include a £19m competition for collaborative supply chain development projects through the TSB; £20m for replacing public fleet vans with electric models; and £7.2m of capital funding for a Fuel Cells and Hydrogen Demonstration programme. A number of other ultra low carbon initiatives were outlined in Chancellor Alistair Darling’s budget address at the end of March. These included an intelligent transport technology test centre in Nuneaton and support for SMEs through the UK Finance for Growth scheme which encourages lending for low carbon vehicle technology and infrastructure development. Darling also introduced a lower 5% company car tax rate for vehicles emitting between 1 and 75g/km CO2 and a 100% first-year capital allowance for zero-carbon goods vehicles. Last year £25m was put up for a consortia of car manufacturers, power companies, Regional Development Agencies, councils and academic institutions. They were tasked to deliver 250 low carbon vehicles to across eight locations in the UK, acting as a demonstrator programme to kick start consumer demand. The Technology Strategy Board says applications have all now been finalised and details of the successful projects will be published shortly. To further help create a viable market place, Whitehall will foot a discount of 25% (up to a maximum of £5,000) on the cost of new ultra low carbon cars. The scheme begins in January next year and a £230m pot has been put aside. In addition a further £8.2m, matched by local sources, is being put up for the introduction of charging points in London, the North East and Milton Keynes. This initiative is a pilot scheme in creating the necessary infrastructure to support widespread use of electric cars. In London there will be 6,000 Plugged in Places installed at workplaces, 500 in streets, and 350 in public car parks. Overall 11,000 of the charge points will be installed in the three areas over the next three years. There is still a long way to go and further successes will undoubtedly need to be weighed against further setbacks before we are close to knowing whether the battle will be won. However, in this decade that will shape the future of the automotive industry forever, it is encouraging to see that concrete plans are in place and that actions are increasingly replacing words in an effort to ensure that the UK’s future now looks a distinctly brighter shade of green than it did this time last year. end

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New wave energy The Marine Current Turbines Seagen technology installed Strangford Lough, Northern Ireland

In 2005 The Manufacturer reported that wave and tidal energy generation might contribute to the energy needs of manufacturers within three years. At the beginning of 2010, the UK had the capacity for the generation of a whopping 0.85MW of wave energy and 1.55MW of tidal stream energy. Tim Brown finds despite the current low output, the sea offers very real promise.

Considering

that 2.4MW is only just enough energy to power about 1,500 homes, the take-up of this technology has clearly not yet reached its desired potential. But what is the realistic potential for wave and tidal electricity generation, and is it likely to offer a real alternative to other sources of renewable energy? Despite what would appear to be a slow start, the UK is still leading the world, with the largest installed generating base, a further 27MW having received planning consent and 77.5MW of additional projects in various stages of planning. It must be remembered that wave and tidal energy is a developing industry and, as with any new technology, careful development is key to ensure success. According to government and RenewableUK, the sector’s leading trade association, the capacity for wave and tidal energy is increasing. Over the

next decade the industry is predicted to increase its capacity 100 fold to produce up to 2GW of power by 2020. The UK has a significant tidal range resource, with the world’s second highest tidal range site located in the Severn Estuary — with a benchmark energy output of 17TWh/yr from a Cardiff-Weston barrage. The other highest resource sites in the UK include the Mersey (1.4TWh/yr), Duddon (0.212TWh/yr), Wyre (0.131 TWh/yr) and Conwy (0.06TWh/yr). Through these — and other — tidal range projects there is an opportunity to potentially provide up to 13% of the UK’s electricity generation from tidal range alone. Despite the potential of these areas, planning arrangements have failed to materialise, with environmental concerns commonly cited as responsible for slowing progress. On 16 March, however, details of the Pentland Firth and Orkney Waters Strategic Area leasing

Sustainable manufacturing

round were released. The Crown Estate awarded an unprecedented 1.2GW of wave and tidal energy project leases, consisting of six wave energy projects totalling 600MW and four tidal projects amounting to 600MW. The sites were awarded to a number of utilities and advanced technology developers, including Marine Current Turbines (MCT), Pelamis Wave Power, and SSE Renewables Developments — joining forces with Aquamarine and Open Hydro, Scottish Power Renewables and E.ON. According to Oliver Wragg, RenewableUK Wave and Tidal development manager, the announcement is both welcome and exciting news for the industry. “The leasing round has exceeded all expectations by awarding 1.2 gigawatts (GW) of project leases, considerably up from the originally scheduled 700 megawatts (MW). This clearly demonstrates that the industry has now reached a stage where it is ready to deliver,” he says. MCT has secured approval to deploy its award-winning SeaGen tidal current technology off Brough Ness, on the southernmost tip of the Orkney Islands (South Ronaldsay) and north east of John O’Groats. The company plans to have its first phase of SeaGen tidal turbines deployed during 2017, with the whole scheme operational by 2020. MCT is planning to install 66 SeaGen tidal turbines, each capable of producing 1.5MW, in three phases over a four year period in a site area of 4.3 square kilometres. The Brough Ness tidal array will have a total generating capacity of 99MW: enough power for nearly 100,000 homes. “The Pentland Firth and Orkney waters are strategically the most important marine energy areas in Western Europe, so we are delighted to have secured approval for a lease by The Crown Estate,” says Martin Wright, managing director of MCT. “I believe that MCT is in a very strong position to capitalise on this significant and challenging opportunity. MCT already has the valuable experience of deploying and operating SeaGen in Northern Ireland’s Strangford Lough, and within the next two to three years we expect to have deployed our first tidal farm in UK waters.” SeaGen is the world leading prototype tidal energy turbine designed and deployed by MCT. It is the largest grid-connected marine renewable energy system in the world, last month exceeding 1000 hours of commercial operation in Northern Ireland’s Strangford Lough. It is the first tidal current energy system in the world to have achieved this milestone. The 1.2MW tidal current turbine, which was deployed in April 2008, has achieved a capacity factor of 66%, and so far delivered more than 800MWh of electricity into the National Grid. Of course, in order to achieve the transition from research and development to full scale implementation, a significant amount of funding will still be required. Over the last decade the Government has invested around £60m in wave

and tidal research and development. RenewableUK has produced a document titled ‘The Next Steps for Marine Energy’ which recommends that the government commits a minimum of £220m in capital support for technology development over the next five years, with the aim of powering 1.4m homes (2Gw) with marine energy by 2020, and producing an annual sector turnover of £900m by 2030. “There needs to be a greater awareness on the initial investment needs of this industry,” says Peter Madigan, the RenewableUK’s head of offshore renewables. “The Danish government spent £1.3bn to establish onshore wind, which currently brings £2.7bn per year in revenue. A properly capitalised wave and tidal sector could create 43,500 direct jobs and generate a potential £4.2bn per year in revenue for the UK economy.” According to the government’s marine action plan, the UK has a unique opportunity to capture the benefits of this new sector through the entire supply chain; from research and development through to engineering, manufacturing, installation, operation and maintenance. ‘This builds on our maritime tradition, most recently expressed over the past 40 years in oil and gas exploration and currently with offshore wind developments. The development of marine technologies will lead not only to a substantial marine energy generation industry in the UK, but more importantly to a substantial supply chain,’ says the report. If the UK’s technological lead is maintained, a large part of that supply chain will be based in the UK — resulting in an attractive environment for domestic or inward investment in manufacturing facilities. Development of the domestic facilities will also provide significant opportunity for exports of both technology and knowledge. With regards to employment, in the longer term the potential for jobs arising from the wave industry alone will continue to increase, peaking at 16,000 in the 2040s with about 25% of them supporting UK exports. Players and plans:

Aquamarine Power and SSE Renewables 2013 – Implementation of a 200MW wave farm at Brough Head

Marine Current Turbines 2017 – First stage implementation of 66 SeaGen tidal current technology turbines 2020 – Completion of SeaGen project with a power generation capacity of 99MW

Pelamis Wave Power 2011-2020 – Two separate 50MW offshore wave projects off the west coast of the Orkney Islands. One in collaboration with Scottish Power Renewables and the other with e.ON UK. 2011-2020 – A 50MW wave farm site off the north coast of Sutherland being developed by PWP. end

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PTC’s Heppelman targets PLM leadership Product lifecycle management software is growing steadily in the UK and Europe, but growth is softer here than in the US. Jim Heppelman, CEO and President of PTC tells Will Stirling how PLM helps manufacturers and why the US software company is confident of global PLM leadership.

Manufacturers

pay heed. Product lifecycle management (PLM) software is here and growing. Mainstream PLM revenue in EMEA – Europe, the Middle East and Africa – increased from $6.1bn in 2007 to $6.7bn in 2008: a 9.7% growth year-over-year, according to data company CIMdata’s PLM analysis. 2009 was a tough year for the PLM market, but in the UK sales bounced back in late 2009. Sales of software vendor PTC’s Windchill PLM products grew 52% year-on-year in the quarter ending December 2009. The company says the take up in this period was notably strong for small and medium-sized businesses, where companies like Park Air Electronics replaced their incumbent data management system with Windchill. However, CIMdata only expects compound growth rates for PLM of 2.4% for the next five years in EMEA. How does PLM software benefit manufacturers? PLM takes design projects, produced in CAD software, and places these components at stages through its lifecycle, as part of a larger product assembly. This enables multiple users such as different company departments – design, manufacturing, supply chain, finance – and companies in its supply chain to view those component designs and collaboratively comment on and adapt the designs. Perhaps the component can be produced with less material, or perhaps it needs to be strengthened, but that conclusion can only be made at a forward point in the lifecycle, which PLM software simulates. At the company’s 2010 media and analyst day at Needham, Mass, Jim Heppelman, President and CEO of PTC, told The Manufacturer there are three key areas where PLM can reduce costs. One is globalisation, where companies evaluate potential global factory locations to capitalise on low labour

costs, for example. How would a new engineering centre in Asia collaborate with those existing engineering centres in the UK or US? PLM helps to improve that vision, says Heppelman. A second example is to avoid mistakes. “Understanding that there is a design flaw, or a problem with the product, or that you’re not meeting a specific requirement,” he says. “If you spot that early, you can fix it with almost no cost. If you understand such failings late, when it has been delivered to the customer, or even just moving through the production line, then it can be expensive.” The third category is plain productivity. “We have examples where customers are simply more productive. They’ve shown that the same team can produce more, or the same amount can be produced from a smaller team.” The fourth category Heppelman highlights is simply managing software costs. Companies, he says, are now very interested in integrated software solutions from one vendor, “rather than having all these little tools which do something special but, when you add them together, they make this expensive mess which doesn’t really create any competitive advantage.”

Environmental compliance As environmental compliance tightens software has evolved to help companies assess if products comply with the raft of regulations. Launched in January, PTC’s solution is InSight Environmental Compliance. InSight sits above the Windchill PLM platform, feeding data to Windchill on four main green product analytics: restricted or hazardous substances, recyclability and reuse, energy and carbon use and material efficiency. While historically the environment hasn’t driven PLM software, in the last year it has become a very hot topic, says Heppelman. Companies are far more switched on to environmental regulations like the

Innovation design and the product lifecycle

Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) in Europe, their products’ carbon footprint, the conversations coming out of Copenhagen and the constant changes in this field which are difficult to track. “Companies conclude that they have to start managing this upstream in product development. Eighty per cent of carbon emissions from a typical manufacturing company come from the product and its development, not enterprise activities. It’s too late to change that on the factory floor, you have to change the design of the product so it doesn’t imply such high carbon emissions, and too much hazardous material that would contravene with REACH.” What are the real drivers for making carbon a more important factor to manufacturers? In an age where everyone claims that environmental preservation is a top priority, Heppelman is honest about the reasons. The first is that companies are

afraid of regulations, and how these can hinder productivity and profits. “The second is, yes, companies want to be greener, and consumers now prefer companies which show they’re concerned about the environment.” The third factor is financial. “It’s interesting to understand your energy costs, and how your product costs are indexed to energy costs. If you understand where you are using, and perhaps wasting, energy, and you understand strategies for managing that, you can save a lot of money while giving yourself a marketing advantage and preparing for regulations.” PTC’s Insight software reveals the regulation compliance status of products and components on a dashboard. Once all the data is fed in, a product’s compliance to regulations like REACH, JIG and RoHS, the hazardous substances directive, is revealed by simple green ticks and red crosses. Further analysis reveals where the product is failing to comply with the regulation.

A growth market to go after PTC’s total revenues (-12%) and the whole PLM market took a hit in the 2008-2009 financial year as the recession took hold. Now, it is recessionary pressures that are expected to drive PLM software. Market research company IDC says the PLM market is expected to undergo several promising changes in 2010, as companies see that this kind of forward scenario simulation for products and assemblies will save money in the long term. These will give rise to increased end-user buying power which will bring extreme pressures on existing PLM vendors to mould their applications and “increase the opportunities for aggressive PLM applications suppliers”, meaning that vendors can’t sit still and have to adjust their software more constantly than ever to satisfy customers. Heppelman and PTC’s team of senior chief executives were bullish about the company’s prospects in this growth market, stating that PTC is targeting “unambiguous PLM leadership”. Its 2010 guidance for PLM growth is $500+ revenue and more than one million active seats. To achieve this PTC needs to post double-digit organic revenue growth within its target timescale, which requires growth of Wind-chill at double market rates – no mean feat. “PTC wants to be the leader in PLM like Oracle is with databases,” says Heppelman. “If you can help customers get business value out of this product better than anyone else, then you are the value leaders – that’s our goal. Our recorded compound growth rate of 19% includes the bad year of 2009. With [PLM] growth at three times the market rate six years in a row you’re winning a convincing market share.” The challenge for PTC and other PLM software vendors is now to capitalise on patterns like the gradual adoption of PLM in the Cloud, and to persuade larger numbers of SMEs in markets like the UK and Europe that this software can augment their CAD and compliment their ERP investments. end

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Peopleandskills Training

diary

More than 100 members of staff at Devonbased linear motion equipment manufacturer HepcoMotion have been working on a series of projects aimed at improving shopfloor efficiency, while gaining a qualification developed with the help of the National Skills Academy for Manufacturing — part of Semta, the Sector Skills Council for Science, Engineering and Manufacturing Technologies. In his third diary piece for The Manufacturer, Barry Engstrom, HepCoMotion’s manufacturing director, outlines some of the projects that are now contributing to reduced lead times and other efficiency savings.

First improvement projects underway The

first phases of the training programme have already proved extremely beneficial for the business. We were very pleased at how the staff had embraced the classroom elements of the Business Improvement Techniques (B-IT) qualification to NVQ Level 2 and Skills for Life training. For many staff, it was the first time they had been in a classroom environment for more than 40 years but the fact that we used classroom facilities at our Tiverton plant helped them to feel at ease. However, we always knew that unless this training in lean manufacturing techniques — and an earlier evaluation of skills gaps — delivered real benefits to the bottom line, all the hard work so far would have been for nothing. This is why the practical element of the B-IT programme is so important. Following on from the eight days of training the teams were split into four project groups that are now working on three projects each. Clearly there are benefits

to having 12 projects underway yet to determine its affect on the that all aim to improve business bottom line. performance by targeting quality, All the projects have to be cost and delivery. evaluated by gathering data on Projects they are currently the shop floor before being signed working on focus on areas where off and as part of the process the teams actually work, so any projected costs, savings and improvements made will directly payback periods — ideally within 12 benefit them in their day-to-day months — are defined. working environment. The teams are nearing Some of the projects include the completion of their first project, which introduction of standard operating has taken around three months and procedures to reduce variation in so we should start seeing returns processes and a thorough review of on the investment in training by the risk assessments. middle of this year. end One team will be looking at a system to reduce waste and another is hoping to reduce X-Y-Z A HepcoMotion m set-up times of up to ste Sy xis i-A ult M 60% and processing times of 25%. Quality of workmanship will also be reviewed and where necessary processes refined to improve the quality of product being shipped. It is still early days on this project and we have

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Mick Burkinshaw DavyMarkham In January this year Mick Burkinshaw was made Employee of the Year at Sheffield based heavy component manufacturers DavyMarkham following 40 years service which has earned him the role of production control manager Pictured: Jackie Cook, Marketing Executive presenting the Employee of the Year trophy to Mick Burkinshaw at DavyMarkham’s annual dinner and dance

Having

first joined the company in 1970 as an apprentice, Mick has spent nearly 40 years rising through the ranks at DavyMarkham, or, as he modestly puts it, “inheriting jobs along the way.” As “the main information centre” for the shop floor – linking in various disciplines including fabrication, machining and fitting – it is Mick’s job to ensure the successful completion of orders to required timescales, deliveries and costs. He describes his role as “cutting the cloth to suit” – arranging the workforce between two and three shift patterns, liaising with other departments to ensure a smooth flow of processes, arranging overtime when needed and providing metrics on how jobs are panning out and what needs to be done to keep work on track. Yet Mick is much more than the man with the clipboard and pen. He is the man that everyone around the factory knows they can go to when they need a bit of help. That might be information on what stage a process is at or could be instruction for a technical task. Whatever advice someone needs, Mick’s on hand to give it. “I think the thing that serves me best is that I’m happy with what I do – I think it rubs off on other people,” he says. “I let everyone knows what’s expected in terms of deliveries and timescales but I also let them know that there’s things I can do to help if needs be. Everybody knows me and they know where to come for help.” Mick puts his success down to one invaluable thing: experience. “When you’re dealing with so many people you need to learn to communicate well while making your views known,” he says. “I’m laid back so I don’t fluster much when things aren’t going right and I’ve learnt over the years is you always have to have a ‘Plan B’.”

He says the most rewarding CV in brief – part of his job is the Mick Burkinshaw camaraderie with his fellow workers – something’s he’s earned by working his way Age: 24 up from the bottom – and Employment: completing a job as a team. 2008 – present – Production “We pull together as a unit Manager and get things done,” he says. 2004 – 2008 – Machine Shop Kevin Parkin, Scheduler DavyMarkham Managing 1981 – 2004 – Machine Tool NC Director, says: “Mick Programmer is conscientious and concerned, with good 1974 – 1981 – Machinist negotiation and persuasive Worked in machine shop on lathes, milling machines and skills, and is capable horizontal borers of maintaining on-time deliveries in the high 1970 – 1974 – Apprentice Machinist - Served 90%. He has the ability to apprenticeship in training school understand throughputs and and light machine shop bottleneck issues well before they occur and to plan Education to date: strategies to prevent them 1970 – 1975 – Advanced from occurring. He is always Technicians Diploma (T5) pleasant and unflappable Interests: and his work is accurate. Weight training, cycling, jogging, “Mick always goes that walking, fishing. Member of CAMRA little bit further to ensure (Campaign for Real Ale). customer satisfaction.” Luckily for Parkin, Mick’s not after his job. He simply loves manufacturing and he loves what he does. “We’ve got to show kids that manufacturing is interesting and that they can make a life of it like I have,” he says. “I’m not an ambitious person, I’m happy here, bumbling along. I’m part of the fixtures and fittings round here; they put me out with the cat at night!” end

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Peopleandskills The role of training in the manufacturing industry Ann Watson, managing director of awarding organisation EAL, discusses the role that training plays in the sector.

our economy is to prosper we need to invest in developing the skills of the people spearheading the growth in emerging technologies. The issue is keeping a balance between nurturing the next generation of employees while developing the skills of those who are currently working in the sector. Training can deliver benefits on many levels and for workers with different abilities. these can include A loyal, motivated staff base and a business that benefits from a highly skilled workforce. Through ongoing learning and development schemes, ambitious and talented staff are continually challenged, while those who might be struggling are fully supported. Manufacturing is a sector that can change at a rapid pace, and training has never been more important as a way to keep one step ahead of technological progress. Without serious commitment to training and developing staff, the industry will not grow and prosper. This means that both apprenticeships and continuous professional

development are essential and should reflect the way the industry advances. Up-skilling current workers can also have significant benefits. By focusing investment at entry level we run the risk of creating a skills gap, where young people have the knowledge but little practical skills while the more mature worker has the experience of the industry but lacks the technical knowledge. To reduce this imbalance we must remain committed to investing in continuous professional development as well as apprenticeships. If the UK is to lead the technical advancements of the manufacturing sector on a global scale, we need to produce a highly skilled workforce which is confident with new and emerging technologies. The Government must recognise the breadth of demand for training and be aware of the danger of investing solely in apprenticeships for school leavers. Whilst we recognise and emphasise the importance of our future workforce, we should not do so at the detriment of the present; a healthy sector requires investment in all skill levels. end

MSc Operations Excellence Developing future business leaders Developed through a unique partnership with Rolls-Royce and the Institute of Manufacturing at the University of Cambridge, this world-leading programme is accredited by the Institution of Engineering and Technology (IET), the Institution of Mechanical Engineers (IMechE) and the Royal Aeronautical Society (RAeS). Designed to prepare manufacturing professionals for roles in the changing world of manufacturing operations, on completion you will have the skills, knowledge and practical experience to enable you to transform operations into a world-class business in all sectors of manufacturing industry. Industry practitioners teach alongside academic specialists throughout the taught element of the course. This is combined with in-company focused project work which accounts for 60% of the programme of study.

For further details, and an application form, please contact:

T: +44 (0) 1234 754086 E: appliedsciences@cranďŹ eld.ac.uk W: www.cranďŹ eld.ac.uk/sas/oe

t R A I N I N G f o r S u c c e ss With continuous upskilling a no-brainer if the UK is to compete in world markets, a move towards linking sound theory with effective application is gaining ground among leading universities and trainers. Colin Chinery reports.

T R A I N I N G f o r S u c c e ss

raining for Success and ‘Business as Usual’ are incompatible statements, says David Wright, director of strategic developments at Coventry University and former CEO of the Manufacturing Advisory Service (MAS) West Midlands. “One of the things that surprises, frustrates and even amazes us when visiting factories in the region is how few companies are genuinely committed to training and developing their workforce.” And Wright is not alluding to the sanctity of theory or training for the sake of training. “Training needs to be considered in exactly the same way as the investment in a machine tool – in short what is the return on investment?” Three years ago a survey by the charity Young Enterprise showed that two thirds of young employees believed universities placed too much emphasis on theory rather than practice. But a movement towards applying theory in action is gaining pace. For one major British company, having “diverse and talented people to come and integrate into your department

while delivering a fresh eyes approach to the planning of a new facility has been of great benefit in terms of identifying issues, presenting solutions, and achieving deadlines.” This was Ford Motor Company simulation technical expert John Ladbrook’s comment on Cranfield University Masters courses, with their focus on the applied learning, working in conjunction with manufacturing. Industry sponsored group and individual projects are well established at Cranfield. But now industry has been brought into taught modules.

Manufacturing shifting not dying And rather than having case studies to demonstrate theory, the theory is taught using the application. And Cranfield’s feedback shows that it is experience as well as qualifications that is getting the jobs. Britain is struggling for engineering skills, says Dr Benny Tjahjono, lecturer in Manufacturing Systems Engineering and director of the

T R A I N ing f o r S u c c e ss

Manufacturing Masters Programme at Cranfield University. “But British manufacturing is not dying; it’s shifting. “As a manufacturing nation we cannot compete in the ways we used to, but we can compete in areas where other countries may not be able to catch up, such as creativity, design and high value.” There is manufacturing theory and there is manufacturing application, and British academia is sometimes censured for inclining towards the former. In contrast, Cranfield positions itself ‘close to practice’, developing market leading methodologies by building on the synergies of the two. The results are impressive. Ford Motor Company, Airbus, Lockheed Martin, and BAA Heathrow are among the dozen or so companies involved in Cranfield’s postgraduate programme. Cranfield graduates 22% of Britain’s production and manufacturing postgraduates, and central to this is its focus on impact through knowledge application. Manufacturing Masters Programme students work within industry through research ventures, knowledge transfer partnerships and other key collaborations. The one year programme is split into three components; October to January teaching, February to April group project, and May to September individual projects. Classroom lecturing makes up for just 40% of the Cranfield Masters; the remaining 60% is instruction from within industry and projectrelated work. “I’m not saying we are better, but I think this feature distinguishes us from other universities,” says Dr Tjahjono. “When we do the group and individual projects our students are tackling real and specific industrial projects brought by the company involved.” Among Cranfield’s continual partners – 2010 is its 11th year of collaboration – is the Ford Motor Company’s Dunton Technical Centre in Essex. Benny Tjahjono, who is closely involved, says the group project is highly focused on tackling a specific problem within a short time period – three months.

Real life is messy “The student’s role is to look into the shop floor, learn how to propose improvement. It’s always good to have a fresh pair of eyes to see improvements that might not have been thought of before. “Although in the past we used class-based case studies, now, instead of us preparing a case study, I take a student on a week long module linked to a manufacturing company. I start with a lecture on Monday and next day I take them to a local company. I want the students to learn from this company, learn from their successes, failures and so on. “Our visit is a tour but with a task – to model the manufacturing facilities and see how we can first improve and then propose them to management. The difference between this and the old style of industrial case study is that this one is messy. Real life is always messy and I want the students to realise that.

As a manufacturing nation we cannot compete in the ways we used to, but we can compete in areas where other countries may not be able to catch up, such as creativity, design and high value Dr Benny Tjahjono, lecturer in Manufacturing Systems Engineering and director of the Manufacturing Masters Programme at Cranfield University

“Everything you learn at a university is very easy, with lecturers preparing the case study with all its nice numbers. Now they have to go to the company and within a single day meet with people, get the data, be able to interview and get the right questions. When they return to Cranfield they have to be able to share their findings with their group, and for the remaining three days they are working here with computerbased modelling and so on. “The main thing is that if they do not have the data they have to make assumptions, whereas in the theoretical case study there will be no assumption; everything is given by the lecturer, everything is smooth, and everything is nice. “The following week we go back to the company and present the results of what we had

Applied Angle

Having worked with Cranfield University for the eight years prior to 2003 and having accomplished his personal aims within the research culture around which the institution is based, Andie Hallihan decided to put theory into practice and created a consultancy. Appropriately, he called it Applied Angle.

Based

just north of Cambridge, the company has 12 full time consultants whose collective professional backgrounds include senior positions across manufacturing, engineering, service and HR firms from across the globe and whose current fellowships comprise world recognised trade bodies, standards organisations and educational institutions. Between them, they boast a veritable arsenal of engineering and business management Doctorates and Masters degrees.

Applied Angle provides consultancy and training for a diverse range of organisations, including multinational blue chip companies, FTSE250 firms, SMEs, the NHS, voluntary organisations and Universities. Many of these organisations are known for their expertise in lean and similar approaches. They work with Applied Angle as an antidote to the myopic focus on toolsets and rapid improvement events – or as Hallihan would refer to it, “discontinuous improvement”.

Hallihan originally formed the company as just a consultancy, but made it an accredited training provider after being petitioned to do so by a client. The company asked Hallihan and his team to provide NVQ training for its employees and while Applied Angle had the know-how to comply with the request, Hallihan duly communicated that one of the plethora of large independent training organisations or a college would have to be engaged for the proper accreditation to be provided. But the client was undeterred. Such was the impact Applied Angle had made on the firm, it said it would rather pay them to take employees through the course and not receive qualifications at the end of the programme rather than turn to an organisation with which it was unfamiliar. Applied Angle carried out the training and took inspiration from the episode to become a bona fide provider – qualifications and all. It now trains and accredits a range of NVQs and VRQs to Level 4.

Hallihan says Applied Angle’s strength is in its personalised approach to working with its clients, in that it provides services tailored around the needs of the client rather than the capability of the provider. “We are adept at analysing a company’s operations and its aspirations and building an understanding of what that company has to do and what skills it will need to achieve its goal,” he says. Others, conversely, are often more prescriptive in what they offer and won’t be able to tailor support to an individual organisation’s needs, he maintains. And Applied Angle prides itself on truly comprehensive expertise of its service offerings – something that unfortunately is found wanting in other areas of the industry. “We are focused in our product range, but within that range we are extremely robust,” he says. “A lot of other companies might have a larger product range, but this can often mean that they have a tenuous understanding of the individual elements they offer.” He says other training companies are too often guilty of tailoring qualifications for the convenience of the provider, rather than for the benefit of the candidate or employer. The provider will offer an NVQ made up of set units which must be completed to earn the qualification. In reality, though each NVQ does in fact require the completion of some core unit, almost every one also incorporates choice and some do so extensively. Where choice is available, Applied Angle’s clients are able to choose the units of most benefit and relevance. Thus, Hallihan says he “cannot wait” until the new Qualifications Credit Framework (QCF) takes effect; the new system will entail a far greater number of units available for each course and employers will be encouraged to take a ‘pick ‘n’ mix’ approach by selecting units that are highly specific to their own operation.

“We want customers to be demanding of us because it allows us to demonstrate the depth of our capabilities and ultimately means everybody will get a better result,” says Hallihan. “It plays right to our strengths. The new system will be good for employers, good for candidates, good for government’s Skills for Growth strategy and good for us as well.”

Performance embedded A training programme with Applied Angle could take only three months, but the company recently signed a deal which will it see it working continuously with a client for three years. It can handle up to 100 qualifications a month, though it is extremely unlikely that many employers could sustain that level, according to Hallihan. And this leads into another characteristic of Applied Angle’s culture which is rare, if it isn’t unique. “Very frequently we’ll be the ones telling the employer that they shouldn’t be doing things as quickly as they would like to,”

says Hallihan. “It’s not good for our bottom line, but it’s essential for their performance. You have to position people to make the change themselves – it would be quicker, easier and would get better results.” “We’re not interested in performance improvement in the short term – you can get that by turning the lights up and down. Our strap line is ‘performance embedded’ and we’re not interested in working any other way.”

Applied Angle

Cutting the cloth to suit

For more information on what Applied Angle can offer see www.appliedangle.com or call 01234 552 553.

Delphi Diesel Systems Delphi

Diesel Systems of Sudbury have been in the vanguard of best practice across the national press since the 1980’s. Today, they manufacture high precision high variety products for automotive diesel injection systems that are exported across the World. Working together, Delphi and Applied Angle undertook an organisation review then built a course that was adapted and contextualised to the business – to meet the demanding challenges faced by Sudbury. Delphi stress, “it is not the standard”. Teams of people deliver projects improving Quality, Volume and Cost, increasing performance in this competitive environment. With plans to put most of their people through the course over three years, Delphi aims to stay in the forefront of best practice. “Applied Angle has created a training course that uses Delphi continuous improvement tools and techniques but enhances them into a package that meets our current and future business needs that steers Delphi Sudbury on the right path of its Lean journey.” Eugene Murphy, Lean Manager

For more information please visit: www.appliedangle.com

T R A I N I N G f o r S u c c e ss

But – and so the Catch – these potential flyers are barred from taking a traditional postgraduate route at a university because they lack the pre-requisite of an initial first degree in a related subject. This is the gap WMG is addressing with its ‘Post-Experience Route,’ making it possible for individuals to progress on to a post graduate programme. “There are many out there working in key positions in very large companies who have never had the opportunity to attend the traditional university There are many out there route. And it’s only now at working in key positions in this stage of their careers that very large companies who have a progress route has been identified for them,” says Paul never had the opportunity Butler, WMG Professional to attend the traditional Programmes Manager. university route Warwick’s Post-Experience Route enables individuals from Paul Butler, WMG Professional Programmes Manager. 20s to 50s to progress to a post graduate programme via a curriculum devised to fill the capability gaps “The participating company benefits from the identified by sponsoring companies. extra resource made up of both the students and “These are the softer skills – working in teams, the university. Cranfield academics and students developing people and so on,” says Butler. work as a team, a team that also includes the “People who are very technically experienced but company. And these benefits can come in a very don’t have the management skills to move on to short period of time.” more senior roles.” Modules – which can be started at any time of Warwick and Catch 22 the year - last 2.5 days, and to achieve the PostAt The University of Warwick, the Professional Experience Certificate nine must be completed Programmes team at WMG is working to in addition to a work-based project. For the resolve a Catch 22. The beneficiaries here are Post-Experience Diploma the requirement is 16 individuals identified by their companies as senior modules and two projects. management material. learned the previous week. We learn whether the assumptions we have made are acceptable - and in many cases the students have to defend and accept the accountability of their assumptions. Now I don’t think this is common, particularly at the Masters level.” The benefit for students is “the experience that records on their CV, and unlike working in traditional universities they have had exposure to the real problems.

Lean Thinking Education Education & Events 2010

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house training programmes

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‘I saw lean applied from exhausts to nuclear fuel rods, to the ordnance survey. The quality of teaching is very high with subject experts attending the sessions to provide a different perspective’ MSc Lean Operations student

Annual Conference LERC Conference – 6 July 2010 Keynote speaker Mike Rother, author of Toyota Kata

‘Everyone genuinely wants to share knowledge. The spirit that exists between the class and the various lecturers has been first class’ LERC student

The Lean Enterprise Research Centre (LERC) LERC is the leading centre for lean thinking in Europe. Founded by Prof Peter Hines and Dan Jones in 1994, it set up the first ever Masters programme in lean operations in 1999. LERC specialises in applied research, teaching, knowledge transfer and training. For more information, email info@leanenterprise.org.uk or tel 029 2064 7028.

www.leanenterprise.org.uk

Lean Enterprise Research Centre

Lean Enterprise Research Centre As a dedicated centre at Cardiff University’s Business School, the Lean Enterprise Research Centre (LERC) carries out research, education and knowledge transfer activities in lean thinking and supply chain management. It was formed in 1994 by TM columnist Dan Jones and Peter Hines, shortly after the publication the seminal lean book, The Machine that Changed the World (Womack, Jones & Roos) as a UK base to develop the lean body of knowledge.

Research

is central to LERC’s operations, in accordance with the research-led approach of the University – and indeed, the Business School was ranked fourth in the UK in government’s 2008 Research Assessment Exercise, which aims to assess the quality of research in academia. Current research programmes have examined manufacturing design in aviation, the application of lean thinking to public services and relationship between lean thinking and the ‘green’ environmental agenda. LERC aims to communicate the outputs of it research activities through networks, conferences and seminars, as well as though academic journals, books, white papers and reports. In 2009, the book Staying Lean: Thriving, Not Just Surviving, co-authored by LERC’s Professor Hines Dr Pauline Found, was awarded the Shingo Research and Professional Publication Prize – a globally recognised accolade named after

Japanese engineering efficiency pioneer Shigeo Shingo. Executive Education refers, in the main, to a combined taught and research based Masters Degree (MSc) in Lean Operations. The two year course – completed part-time to allow students to continue in their jobs – is split into two streams; one for manufacturing and one for service based industries. Aimed at senior operations managers, the overall premise of the course is to equip graduates with the technical knowledge they need to become key catalysts of lean change within the organisation they work for, driving forward initiatives at a strategic level. There are two parts of the course. The first is a taught syllabus consisting of eight modules lasting one week each, which is made up of six core modules and a choice of two from four electives. Modules include Lean Thinking and Practice; Quality; Leadership and Change; Lean Accounting, Measures and New Product Development;

Changeover, TPM and Layout; and Lean Scheduling and Materials Management. The modules are taken once every six to eight weeks over the first 15 months of the degree. Each module takes place in one of the student’s organisation – a unique feature of the course. The purpose of this is to use the students’ organisations or companies as practical vehicles to demonstrate the practical application of the knowledge that’s being, rather than a reliance on a traditional classroom approach. The second part of the course is spent producing a 20,000 word dissertation based on some facet of the student’s organisation’s lean implementation and journey. Though students tend to come from larger companies, there are no restraints in terms of the size of the organisation, and the frameworks that the course teaches are widely applicable and students are nurtured towards understanding what approach they personally need to take within their own institutions. The Innovation & Engagement activities are built up around knowledge transfer with a variety of organisations. Central to this is the Lean Competency System – a qualification system developed by LERC through which organisations who undertake lean training can have their own programmes accredited by the Centre. The system was created to provide a standardised accreditation for Lean that is similar to the globallyrecognised ‘belt’ structure for Six Sigma. Accredited organisations are licensed by LERC to issue certificates of lean competency

Thinking in Services, Lean & Green, Lean & Design, and Lean Supply Chain Management. Course duration is between one and ten days. LERC also works with the UK government’s Knowledge Transfer Partnership scheme, whereby a recent graduate (an ‘associate’) is recruited and then embedded in an organisation to work on a range

of lean oriented projects, receiving academic supervision and advice to enable the centre’s knowledge to be transferred effectively within the host organisation.

Lean Enterprise Research Centre

for a period of two years, after which their programmes are reassessed. The initiative is open to lean training providers as well as practicing organisations. LERC can develop and accredit bespoke training programmes for companies that do not currently have schemes in place, and also offers Project Based Learning – an initiative which sees LERC practitioners work alongside improvement teams from within an organisation to addresses a specific problem over a number of weeks or months. For organisations that are just starting their Lean journey, LERC offers a 10 day course entitled ‘The Principles of Lean Thinking’ to provide a base knowledge of they key philosophies and techniques that Lean is built upon. This course is also accredited through the Lean Competency System. LERC’s full range of Short Courses and Masterclasses also broaches Lean Accounting, Lean Leadership, Lean

For more information on the Lean Enterprise Research Centre see www.leanenterprise.org.uk or call 029 2064 7028.

Staying Lean: Thriving Not Just Surviving 2009 Shingo Research Prize Winner

The

Shingo Prize for Operational Excellence, established in 1988, is named after Japanese industrial engineer Shigeo Shingo, who distinguished himself as one of the world’s leading experts in improving manufacturing processes. The prize promotes awareness of lean concepts and educates, assesses and recognises companies that achieve world-class operational excellence status around the globe. The LERC book ‘Staying Lean: Thriving Not Just Surviving’ won a 2009 Shingo Prize in the Research category, which promotes research and writing regarding new knowledge and understanding of operational excellence. It tells the story of how a multi-national manufacturing organisation successfully implemented and sustained lean enterprise

operational improvements to help turnaround the group’s financial performance. The story is based around the Lean Iceberg Model of sustainable change and addresses the often invisible, and hard to copy, enabling elements of successful lean management in manufacturing organisations. Staying Lean is written as a practical workbook to help business managers consider all the elements they need to address when implementing lean thinking in any organisation. The book guides managers along their lean journey so lean becomes embedded throughout the organisation, sustaining the performance improvements over the long-term, enabling the organisation to outperform low-cost economies and be better able to compete in a global marketplace.

For more information please visit: www.leanenterprise.org.uk

T R A I N I N G f o r S u c c e ss

The Professional Programmes have been designed, developed and delivered by the companies involved. And company feedback says Paul Butler is “very positive because they are closely involved not only with the development of the material but also in working groups”.

Massive difference “From participants the response is that it’s valued very highly and can make a massive difference to the confidence of an individual. It’s been an opportunity to get into a university environment in a way they never thought possible - never mind The University of Warwick, one of the Top Six in Britain. It opens up a whole near area of development and potential for individuals.” Other universities offer very similar projects, but Butler says the WMG programmes are exceptional. “Each individual is almost on a unique education programme both in terms of modules picked and when they attend them. The routes we offer are about giving you the skills you need to fill your gaps when you need them. We sit down with individuals and their business and say ‘What is it you want?’. And then we try to

tailor the education to suit”. But employee release is often very difficult for smaller companies – the definition here is less than twenty. The WMG Post-Experience modules are two and a half days in a block out of the workplace, and the Masters module five days. “This does cause an issue for very small companies,” says Paul Butler. “So we are looking at e learning and blended learning options as ways of working with smaller companies. “But whatever courses we put on, it’s about adding value – immediate value - back into the businesses and making a difference. It’s not about education for educations sake.”

Big, untapped potential How would he assess the untapped human potential in UK manufacturing? “Absolutely huge. To put this into some kind of perspective 98% of our intake is from companies with over 250 employees.” Effective theory into practical action is also a forte at the Lean Enterprise Research Centre at Cardiff University. While the concept and practice of lean is universally celebrated and widely

T R A I N I N G f o r S u c c e ss

employed, in the field of lean education there is no accepted qualification structure around which an individual can organise a programme of learning. Also absent is a framework within which a lean practitioner can formally identify his particular level of lean knowledge and competence. And while many employees have undergone extensive training and have wide experience of implementation, they have nothing to show to existing or prospective employers. In contrast Six Sigma has a well accepted and recognised structure of ‘belts’ (green, black, etc), to indicate an individual’s level of knowledge and competency. As a remedy, the Centre has developed the Lean Competency System to promote and develop lean knowledge transfer. The aim is to provide a structured lean qualifications system, offering a practical oriented hierarchy of lean qualifications – or ‘learning ladder’. Around this employees can develop their lean thinking skills, and organisations develop a competency strategy for its workforce.

Implemented but not sustained “There are many examples of lean practices being implemented but not sustained effectively over a long period,” says Simon Elias, director of the Lean Enterprise Research Centre, Cardiff Business School. “Engagement and effective ingrained knowledge transfer are part of that mix. There are also soft factors, people factors, around leadership, communications, engagement, change management, a lack of strategic integration. “Your lean-ness needs to be aligned to the overall strategy of your organisation. These softer factors are the ones that tend to cause lean initiatives to peter out or falter. We refer to them as the ‘below the water line’ elements of the lean iceberg; those that are hard to see and get to grips with.” The Competency System consists of three main levels – Fundamental, Technical and Strategic – each with two or three sub-levels. The outcome is seven stages, acknowledged academically with a recognised qualification. The MSc in Lean Operations is a two year part-time programme, modular in the first 15 months (part 1) when students attend eight one week modules, most of which take place at participants’ sites throughout Wales and England.

“Lean is very much learning by doing, and the Competency System has both a practical and a knowledge dimension,” says Elias. “As well as the academic role of education in the effective use of the principles of lean tools, the system is attempting to put some organisation and structure to the body knowledge around lean; trying to make sense of what’s happening out there, understanding and reporting.” While there are many impressive examples of lean implementation across most manufacturing sectors, the challenge, says Elias, is to figure out how to integrate this through the whole organisation rather than seeing lean as a toolbased, piece-meal approach. “And importantly, it’s not just about looking at the shop floor; it’s about going straight to the customer. Unless you understand customer value, and producing products and goods that people actually want, then no amount of lean manufacturing assistance will work for you. “Never forget the first lean principle understanding value from the perspective of the customer. There are some organisations that

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T R A I N I N G f o r S u c c e ss

haven’t reaped the full benefits because this is a long-term undertaking - and there is a short term mindset in the UK. “Toyota, in spite of their recent problems, is still seen as the lean, exemplary organisation. Starting back in the 1940s they are still going strong in their journey. I think this is a key message.” Feedback is “very positive. Companies are reporting that when a formal qualification structure is added to their own initiatives, they are seeing an improvement in the way staff approach lean. It improves their engagement and enhances the likelihood that they will use lean ideas more consistently as part of their jobs. And sustaining lean initiatives and ideas and making them part of the culture of an organisation is the secret of having a continuous improvement ethos which is the goal of any lean organisation.”

Hands-on best for retention

Studies prove that the retention levels of students are highest with ‘hands on learning,’ says Martin Bevan, UK business manager SMC International Training, Darlington. “Over 75% of retention level is achieved when hands on practical skills are used in conjunction with a good applied curriculum base.” SMC International Training is the educational division of SMC Corporation, world leader in innovation and the sales of pneumatic and electro pneumatic components for industrial automation. “The approach we take is that many skills are needed to be developed inside a subject area of ‘automation.’ This is broken down into five levels of learning, from base technologies such as pneumatics, hydraulics, motors, drives, etc on a shop floor, to enterprise resource planning and manufacturing execution systems at the higher levels. This produces a full portfolio of products that can assist every sector in their continually hands-on skills delivery.”

Unless you are up skilling your employees, how can you expect them to complete more complex tasks, work more efficiently and produce higher value products

Simon Griffiths – chief executive of MAS West Midlands

T R A I N I N G f o r S u c c e ss

The SMC programme is as much about training teachers as it is training students, says Bevan. “We offer CPD courses and bespoke teacher training on all equipment to keep lecturers abreast of the latest technology and applications, with regular master classes run on our equipment to ensure these skills are transferred.” Without these facilities and equipment much of the learning would have to be covered by PowerPoint slides and site visits. “All important areas of delivery,“ says Martin Bevan, “but this now provides a ‘hands on approach’ in a controlled area

With its New Industries, New Jobs strategy, the Government is looking to move the manufacturing base up the supply chain in terms of added value, says Simon Griffiths – chief executive of MAS West Midlands. “When you are doing this you can only expect to have more complicated products and processes. And unless you are continually up skilling your employees, how can you expect them to complete more complex tasks, work more efficiently and produce higher value products?”

Upskill struggle Griffiths suspects that only the top 20% of manufacturers are There are many examples committed to training their of lean practices being workforce, “with the rest not implemented but not sustained as proactive as we would like them to be. Some are doing a effectively over a long period reasonable job, while for others Simon Elias, director of the Lean Enterprise Research training is an easy budget hit Centre, Cardiff Business School during a recession. “It’s nonsense to expect the an employer can join in and interact with, and not same guys to do more complicated jobs without interrupting their own shop floor production.” training. It is absolutely critical that they are Similarly SMC supports many of its customers being continually re-trained. directly, working to develop skills with clients “So the message is ‘Wake Up!’. Unless you are inside their own training facilities. Examples include training and upskilling your workforce to be the Toyota and Unilever. “In all cases, measurable best in their class then your business long-term differences to output and confidence levels on will struggle. breakdown and root cause analysis show proof that “I heard a great quote the other day. ‘What hands on learning applications provide the best happens if we train people and they then leave?’ return on training investment and time away from And the answer to that is, ‘What happens if you the production environment.” don’t train them and they stay?’” end

There are many perceived benefits and value add that come about as a result of educating key individuals. Education is primarily aimed at individuals as it is these who actually undertake the courses and receive the certificate at Graduation. However, education at WMG is also about adding real value and benefits back into the sponsoring companies. WMG Professional Programmes will: Boost your company efficiency – WMG programmes will enable individuals to make better decisions, through new knowledge, frameworks and case studies – “experience gave me the confidence to deal with the challenges faced by the business and equipped me with the tools which I have used in my own career and for the benefit of the company” - WMG graduate and Head of Global Combat Systems BAE Systems. Increase the capability of the individuals within your work place enabling them to do their current roles better. Expand your company productivity – each module is supported by a work based assignment which allows individuals to apply new knowledge and techniques into their role. They can educate colleagues on these new techniques thus embedding new ideas into the business, multiplying the added-value. Educate your individuals to become the change agents for your business going forward. ‘WMG prepares individuals to be able to present compelling arguments for changes within the business processes’ – Head of Worldwide Suppliers Integration Airbus. Facilitate your staff recruitment – those companies that are willing to sponsor participants on WMG programmes increase their recruitment power of the best people. Improve your staff retention – companies that develop and educate their staff have a better chance of retaining those individuals as their career progresses. Ambitious individuals need to see support and commitment from their companies to meet their ambitions. Some companies resist education because they think that those staff once educated will leave, the inverse is also true. Provide networking opportunities to benchmark your company practice against other major organisations in a safe environment. WMG works with over 500 companies internationally and with Key individuals from aerospace, automotive, construction, transport, defence, power generation, pharmaceuticals, finance, government and more. “Engaging with people from a variety of

WMG Innovative Solutions

Business benefits of a WMG education

backgrounds enhances the learning experience of all participants”, CEO AstraZeneca Achieve measurable benefits – Education at WMG will have measurable benefits – “£16.87 million worth of productivity improvements and cost-efficiencies”, Leadership Development Manager Network Rail. WMG has just received the Queens Anniversary Prize for Higher and Further Education in 2009/2010 and this was awarded for long-term continued partnerships with industry supporting competitiveness through people development. For further information about WMG Professional Programmes, visit our website go.warwick.ac.uk/wmgptmasters or call us on 02476 573 038.

For further information visit our website go.warwick.ac.uk/wmgptmasters or call us on 02476 573 038

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Specialfeature Graham Dewhurst

MACH: the best a manufacturer can get Edward Machin talks to The Manufacturing Technologies Association’s Graham Dewhurst about the upcoming MACH 2010, an industry showcase for the latest in manufacturing technologies.

Founded

in 1919, The Manufacturing Technologies Association (MTA) is a UK-based trade association designed to support engineering-based manufacturers — whether they create, design and supply machinery to enable the manufacture of mobile phones, computers and family vehicles or space shuttles, commercial aircraft and F1 racing cars. “While our members are largely those working in the application of manufacturing technologies, we also represent software companies, equipment providers and sub-contractors within the industry,” says Graham Dewhurst, MTA director general. “Indeed, because of the enabling quality of modern manufacturing capabilities, the majority of members sit across the key advanced engineering sectors — given that the techniques and qualities that are required in one specific sector are often particularly valuable in adjacent markets.” With 23 new members in the last ten months, “We are continually seeking to modernise our offerings in a fiercely competitive marketplace,” says Dewhurst. “It is all about relevance to our members in terms of service, adding value and the continuous improvement of service development. Having come through a very tough year in 2009, however, things are undoubtedly looking up for those we represent.” “For example, while the recent Purchasing Managers Index (PMI) figures are hugely encouraging, we were not altogether surprised on their announcement, given that we have both hard and anecdotal evidence of recent improvements,” he says. Moreover, the MTA’s internal survey data of members correlates with a wider pickup, having seen an increase in its net order index of 250% since June 2009. According to Dewhurst, such figures haven’t necessarily fed through to sales yet. “There is normally a 3–6 month lag in these situations, so we are all very much excited about what the upcoming year holds for our industry.”

MACH 2010 As the UK’s premier technologies event, the bi-annual MACH expo showcases the latest in manufacturing technologies for those working in metal cutting and forming; automation and robotics; CAD/CAM; engineering lasers; tooling and workholding; welding and metal fabrication, and; rapid manufacturing, among others.

Says Dewhurst, whose organisation owns and arranges the event, “In 2008 we had an extremely strong attendance profile, attracting 500 exhibitors and over 27,000 visitors; 21% up on 2006. Clearly this year will be more challenging, which is why we collectively need to offer something really special, which I believe we are doing.” Accordingly, three new ‘zones’ will be launched at this year’s event: (i) an Education and Training Zone (ii) Grinding Solutions, and (iii) the Supplier Zone, enabling MTA’s end users to promote their latest technologies. “We are particularly excited about the first of these, which has been designed to encourage more young people to enter our industry and will provide a showcase of how exciting our sector of engineering really is,” says Dewhurst. To provide the requisite ‘wow factor’ MTA is partnered with the Advanced Manufacturing Research Centre, having been granted the use of its MANTRA vehicle — a specially-equipped heavy goods vehicle

The MTA’s internal survey data of members correlates with a wider pickup, having seen a continuous improvement in its net order index —an increase of 250% since June 2009 Graham Dewhurst, Manufacturing Technologies Association

(HGV) fitted with a raft of high-spec, visually-appealing manufacturing technologies. Confirms Dewhurst, “With MANTRA we are essentially looking to demonstrate that you can move from machines to manufacture without getting your hands dirty: life for the modern engineer is considerably more interactive than that.” For the event as a whole, “Our visitor promotion must be, and is, aimed at key decision-makers within the business,” he says. “It was for 2008, hence the huge increase in attendance figures. That said, it is less about quantity; rather the quality of decision-making that is brought to the event.” With exhibitor numbers currently sitting at 300 — i.e. 80% of capacity — and 83% of potential attendees planning to spend up to £250,000 each on capital equipment in the first half of the year, Dewhurst is understandably confident about the prospects for MACH 2010. 7 – 11 June, Halls 4 & 5 at the Birmingham NEC. He hopes to see you there.

Have your say at www.themanufacturer.com

Buyers make MACH 2010 a must The latest forecasts for MACH indicate a show, indeed an industry, which is alive and kicking.

MACH 2010 Preview

A brief look at some of the players and latest high technology machines exhibiting at MACH 2010.

Tube forming technology BLM Group UK is a market leader in the supply of machines and systems for tube bending, tube endforming, laser tube cutting and production sawing.

MACH 2010

is the UK’s largest manufacturing technologies exhibition, and during the week of June 7-11 the show will take over Halls 4 and 5 of the NEC near Birmingham. In a recent survey of potential visitors to MACH 2010, 83% of respondents plan to spend up to £250,000 per head on capital equipment in the first half of 2010 — meaning that they will be using MACH to source the latest technology and equipment. At the last show in 2008, over £150m of business was done as a direct result of the exhibition, and despite the tough economic conditions of the past two years, it seems that timing of this MACH in June will be just right to take full advantage of an increase in business confidence. In 2008, the show attracted 27,000 visitors and similar numbers are expected to pass through the doors in 2010. Most visitors make the trip to Birmingham in order to source manufacturing technologies and to see what’s new in the industry. The hundreds of exhibitors often use the show to launch their latest products and services to the UK market. Snapshots of three of these follow. Attending MACH is a must if you work with any of the following areas of technology: Metalcutting Metalforming Automation and robotics CAD/CAM Engineering Lasers Measurement and Inspection Tooling and workholding Welding and Metal Fabrication Rapid Manufacturing and Rapid Prototyping NEW FOR 2010 Supplier Zone (subcontractors and suppliers of engineering related business services) NEW FOR 2010 Grinding Solutions Also this year the MACH team are launching the Education and Training Zone; an area dedicated to encouraging young people to consider careers in engineering-based manufacturing.

Full details of all of the MACH zones are available at www.mach2010.com. Entrance to the show is free of charge, and you can register for your fast-track entry pack at www.mach2010.com/register.

With UK labour rates well above those in Asia and Eastern Europe, BLM’s integrated high technology approach attracts UK companies seeking to reduce overhead costs and shorten component lead times. This high tech approach is now widely acknowledged within UK manufacturing industry to be the most effective way of securing a long term future against intense and growing global competition. BLM Group UK will present its latest technology at MACH 2010 in Birmingham from June 7 to 11, which managing director Paul Lake says will demonstrate the company’s ability to meet constantly developing market demands. “Our UK customers tell us they are looking for the following in their machines: faster cycle times; quick change over times; greater flexibility; high repeatable accuracy; process deskilling; and cheaper running costs. All these features are reflected in the machines we’re exhibiting at MACH. For example, we’ll be showing a fibre tube laser which will cut aluminium and stainless tube at more than double the rate, but at 50% less power consumption, than conventional CO2 lasers. Nobody is using a fibre laser on a tube cutting machine – it’s a new venture for us, and fits our growth strategy.” UK manufacturing needs to look to advanced technology to remain competitive, says Mr Lake, and invites anyone with an interest in this area to the BLM stand at MACH see the high-tech options now on offer. “There’s nothing better than an exhibition where someone can feel, smell, touch and see a machine. The laser tube cutting machine that we offer can complete five or six traditional processes on one machine. This fact alone highlights that UK manufacturing cannot keep up while operating traditional processes.” BLM Group UK Ltd will occupy Stand 4710 at MACH

Laser and waterjet cutting equipment

Sodi-Tech EDM is the exclusive distributor of Sodick EDM (electro discharge) products in the UK. Sodick invests heavily in R&D, as well as being a manufacturer. Sodi-tech’s UK technical sales manager Chris Hellyer says the business has made a bold move for MACH 2010, exhibiting up to three high technology machines, which are: an AG600L wire erosion machine, the AG60L, a new 7-axis EDM Die-Sink machine, and an HS650L 5-axis High Speed Machining centre.

This will be Bystronic UK’s third consecutive visit to MACH, but one of its two predecessor companies, Edwards Pearson and Pullmax, supported MACH for many years. Bystronic UK was formed by the merger of those companies in 2006.

The 7-axis AG60L is a joint venture with Jauch & Schmider, who make high precision rotary tables, in a move towards the very high end precision engineering sectors. The 7-axis machine offers a “turn and burn” EDM die-sink solution that controls the movement of a twisted electrode so that it penetrates the workpiece in a corkscrew-like motion. “We believe that investing in the highest level of technology available is the only way that customers can stay one step ahead of the market, particularly if the cost of purchasing that high-tech product is similar to that of more conventional equipment” says Hellyer. Ninety per cent of all of Sodick’s components parts are made in-house, so manufacturing costs are controlled better, he adds. Mr Hellyer believes Sodick’s strong reputation in EDM machine tools is down to its early vision and pro-active evolution of linear motor drive systems in 1999. “This technology uses fewer parts than ball screw drives, which wear out and need replacing more quickly,” he says. “There is no metal-to-metal contact on a linear motor and therefore no friction that there is on a ball screw”. Sodi-Tech has not had a single linear motor breakdown on EDM machines reported since the systems’ launch in 1999 and this is backed up by a manufacturers 10 year accuracy guarantee.

The company is a specialist manufacturer of laser cutting, waterjet cutting, press brakes and shearing systems. It will be showing three machines: the Byspeed Laser, with two new features to increase productivity, the ByJet Classic waterjet cutter, making its MACH debut, and the Xpert Press Brake. The Byspeed is a very fast laser cutting machine that can cut mild and stainless steel-grade sheet metal up to 25mm thick. “The machine has two new features for MACH; regulated pulse piercing, which speeds up the processing, and an automatic nozzle changer, which uses an automated load and unload mechanism for different nozzles so it can run 24-hours a day,” says commerical director David Griffith. The ByJet is an advanced waterjet cutter used for metal sheet thicker than 25mm and difficult-tocut metals, like aluminium and titanium, over 15mm thickness. The Beyeler Xpert is a bending machine used by OEMs and subcontractors for fabricating components, with very accurate angle reproduction and several remote diagnostics to eliminate process deviations. Mr Griffith believes Bystronic benefits from showing equipment to potential buyers, but is sanguine about the economic recovery. This is a long game, he says. “We [the industry] are returning to stability but at a much lower level than 2008 – I don’t expect real recovery in our sector until 2011,” he says. “This is high capital cost, advanced manufacturing. The fabrication sector is slow to recover after a recession when cash reserves for many companies are low.” There are few impulse buyers in this sector – perhaps once every 2-3 MACHS – Griffith says, but a visitor here is more likely to buy a machine in 2011. “The timing in June has worked out fortuitously. We think it will be better as a result of being held later in the year.”

Sodi-Tech EDM will occupy Stand 5151 at MACH

Bystronic UK Ltd will occupy Stand 4610 at MACH

The companies chosen for preview were chosen randomly by The Manufacturer. MACH 2010 takes place at the NEC, Birmingham, from June 7-11 2010.

www.mach2010.com

mach 2010

Wire erosion and EDM machines

March of technology moves capital allowances to frontline Capital allowances are critically important to manufacturers who need to invest regularly in top end equipment to stay competitive. And technology is shortening the “tax life” of machines, meaning it takes longer for the machine to pay for itself, making the allowance even more important. Will Stirling reports.

Manufacturers, especially those who use precision machine tools for advanced manufacturing applications, know better than anyone the importance of capital allowances. Higher allowances make investing in machinery more affordable and companies can compete more effectively. Recent government policy has not been kind to capital allowances. Although in last year’s April Budget, capital allowances on purchases over £50,000 – a bracket relevant to most high value-add manufacturers – was doubled to 40%, this was only applied for one year and as expected, was reversed with this year’s Budget. There have been several small taxation gains for business in recent years, like the creation of R&D tax relief and the attempt to reduce administration for businesses. However, as Steve Radley, policy director at the manufacturer’s organisation EEF says, “These benefits are piecemeal, and for manufacturers, the tax system is close to breaking” (see Steve’s column on page 15). In February, the Conservative Party claimed if it won the election it would reduce the headline corporation tax rate from 28p to 25p, which would be partly funded by scrapping capital allowances and tax reliefs that help companies invest. EEF claimed this would be, effectively, madness, as capital allowances are so crucial to the investment decisions made by businesses at key moments in the financial year, in order to remain competitive. Why? Why can’t companies like machine tool

engineers continue producing components with their legacy equipment? Manufacturers, including the members of EEF and the Manufacturing Technologies Association, whose president Bob Hunt highlighted this hot issue at the MTA’s annual dinner last month, are very keen to explain this to politicians if they are willing come to their factories and see why.

Best equipment is not optional Damon de Laszlo and Andrew Churchill sit on EEF’s Business Tax Panel. Long term campaigners for a pro-industry tax regime, they spelled out to TM why either main political party needs to try to understand manufacturing better to make claims about their commitment to manufacturing growth. “The UK manufacturing base is mainly mid-sized companies, £5m up to £100m turnover,” says de Laszlo, whose company Harwin makes a wide range of electrical interconnectors. “The high tech, long term, capital intensive suppliers to our big industries and primes need long term planning and employee training that takes 3+ years. Cash flow is our biggest problem. Borrowing is one issue, as the real problem now is that companies can’t repay, and you’re having to turn high end machinery over in two to three years.” Here is the rub: with the onward march of technology the top end equipment that keeps the UK’s SME base competitive in advanced manufacturing has a much shorter asset life today. To keep up with the demands of competitive markets like parts for aerospace engines and electrical interconnectors, companies have little choice but to invest in the very best kit. It is not optional.

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“New equipment is a fascinating cost calculation. I’ve just bought two new Japanese lathes, made by Star, and were installed over Christmas,” says de Laszlo. “They are 30 per cent faster than the same model that’s three years old. That’s eye-watering.”

Speed of obsolescence pushes tax agenda Few politicians or non-manufacturers would miss the sense in investing in the best equipment. What some fail to grasp is how quickly advanced machines become obsolete, adding to the relative cost of a machine as the time it takes to repay the investment – its working life – falls. Andrew Churchill, MD of JJ Churchill Engineering and an advisor to government on manufacturing policy, provides a clear example. “Today, if you want to occupy that high end niche where high labour cost is of proportionally less importance in the total cost, you need to invest in the high end technologies, that is a simultaneous 5-axis milling machine. Instead of the £30k capital cost of 15 years ago, these cost between £750k and £1m. And instead of it lasting – in terms of being competitive – five to ten years, you’re now looking at between two to five years. If I’m using it beyond five years, then I won’t be competitive against somebody else who has bought the next generation. So I have to depreciate that equipment very quickly if I want it to reflect reality, to remain competitive.” The problem, then, is the disconnect between the capital allowances depreciation that your books have to reflect and reality. “And that gap is cash,” says Churchill. EEF and MTA have analysed the effect of capital allowances and depreciation rates, and have

campaigned for politicians to better understand the process. On March 29, EEF published a new taxation paper recommending a tax regime more favourable to industry, part of which focuses on the “tax life” of modern equipment — that is, how long it takes the tax system to reflect the cost of a new machine. Jeegar Kakkad, senior economist at EEF, says: “While

If you’re not in the game by already having the requisite high-tech kit installed when Rolls-Royce puts details out to tender you’re off the list Andrew Churchill, JJ Churchill Engineering

studies like the Statistics Canada report suggest that manufacturers are replacing their equipment, on average, every seven to eight years, the current 20% rate implies a 30-year tax life, and a 12.5% rate [which has been proposed] a 53-year tax life“ (see table). In the US, the vast majority of manufacturing investments have a tax life of seven years. The table shows many of the UK’s competitors have tax systems with much more realistic treatments of investment, reflected in shorter equipment tax lives.

Window of opportunity To complicate the issue, investing in the best equipment cannot just be deferred to a future

International treatment of depreciation of machinery and equipment Source: US Congressional Research Service, PWC & EEF. SL – straight line; AD – accelerated depreciation; RD – Reducing balancing.

Country

Basis

Method

Tax life

US*

Acquisition cost

All assets: 3 – 20 years Manufacturing assets: 3 – 10 years

Ireland

Acquisition cost

5 – 10 years

Poland

Acquisition cost

5 – 14 years

Germany*

Historical, acquisition or production costs

10 – 16 years

France*

Initial cost or cost of manufacture SL

Plant, machinery, equipment & tools: 10 – 20 years

Canada

Acquisition cost

20 years

UK (20% capital allowance level)

Pooled costs

30 years

Singapore

30 years

UK (potential – 12.5% Pooled costs rate)

53 years

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Finance and professional services

time slot when cash flow may be higher. When a customer puts out a big tender, based on the number of units of product to be delivered over the long term, a company may need to buy a better machine immediately to compete. “In my industry, there is a variety of, for example, Rolls-Royce engine platforms that are developed for specific air frames. If you’re not in the game by already having the requisite high-tech kit installed when RollsRoyce puts details out to tender you’re off the list. Returning a year later with the right kit will be too late.” Churchill emphasises the key point of the risk element that these medium-sized businesses are taking. Waiting for that opportunity to arrive is not a given because of the long lead time on this equipment. “The manufacturing sector is dealing with this big element of uncertainty. We have to invest in high capital cost equipment in advance of that window of opportunity in the anticipation that having it will enable us to develop that niche. If you haven’t invested, you’re not in the game; if you have invested you have a chance.” Such an illustration gets to the root of support for manufacturing – knowing what support is coming needs to be planned in and, as EEF and MTA point out, so often the constant shifting of the tax system has not permitted easy financial planning. Damon de Laszlo adds: “Advanced manufacturing is intensely competitive. Companies who use products we supply are getting pressure from their financial people to source outside the UK because “it’s cheaper”. In fact, it isn’t always cheaper because now we see some production returning from Asia, but there is all sorts of pressure, and uncertainty over the tax structure adds to the burden.” Accountants, too, are familiar with the problem. Andy Brook is director of Deloitte in Birmingham. He has firsthand experience of the pain of uncertain tax relief rates. “I am working with a client on a £250 million investment in an expansion to a plant,” he says. “The tax relief available is hugely important as prior investment was marginal and depended on the availability of capital allowances. However coupled with this is the uncertainty over where the rate of capital allowances is heading. We are now modelling different scenarios to understand their impact, which provides a greater degree of uncertainty. Long term investment requires long term certainty.”

Misguided corporation tax policy As EEF’s Steve Radley says in his column, the Conservative Party seem to be set on reducing headline corporation tax rates, paying for this by scrapping allowances and tax reliefs. In March, Shadow Treasury minister David Gauke reiterated the Tories commitment to cutting capital allowances, but offered a fig leaf of cover by recommending the party would extend the period for short life assets,

giving companies more time to write-off capital assets for tax purposes. Small and medium-sized businesses, the manufacturing bedrock, are much more interested in cash management than simply just profits. “And they need to be encouraged that the profits they make can be reinvested in the business,” says Andrew Churchill. “Capital allowances are key

If you want jobs in manufacturing you have to have the capital equipment to go with it. Putting a person on a machine today requires more capital than it did 10 years ago Damon de Laszlo, Harwin plc

here. My argument would be balance the higher corporation tax rate with the larger companies, and enhance the smaller mid-sized companies’ capital allowances..” As the election looms, the duty of EEF and the Ministerial Advisory Group for Manufacturing to explain the effect of tax on business will increase. Damon de Laszlo considers another approach to conveying this message. “Perhaps the chink in the armour for politicians is that both parties say they want to encourage manufacturing — we’ve now discovered it’s a good thing to have an industrial society. If you want jobs in manufacturing you have to have the capital equipment to go with it. Putting a person on a machine today requires more capital than it did 10 years ago, that’s your high end technical skill, which encourages your apprentice level to come in...And they want to come into manufacturing because they look at the technology and say wow! It’s a symbiotic relationship – people and quality equipment.” David Guake recently reiterated the Conservative Party’s commitment to, in all likelihood, scrapping (or cutting) capital allowances to help pay for a lower rate of corporation tax. But all is not lost – he also gave a firm indication that the Tories would consider extending the qualification of short life assets to eight years, effectively extending the period an asset has to be written off for tax purposes. This is not a direct offset of capital allowances, but for many capital-intensive, high-value manufacturers will be critical in mitigating the cashflow consequences. Ultimately, there is no substitute for MPs, and indeed HM Treasury, HMRC and Dept for BIS officials, to visit factories and talk to people to better understand how machines link to people, if politicians wish to claim to support industry with genuine conviction. end

Go to the Finance & Professional Services zone at www.themanufacturer.com to hear more on this debate, inc more comment from Andy Brooke of Deloitte and Maureen Penfold of Kingston Smith.

Devil’s advocate: top legal compliance issues for 2010 Keeping manufacturers off the windy side of the law, Edward Machin investigates those facets of legal compliance set to make it big this year.

Laws,

reckoned Prussian statesman Otto von Bismark, are like sausages: it is better not to see them being made. Lawyers and parliamentarians aside, one would be hard pressed to find many nihilistic souls in industry to argue otherwise. That said, out of sight does not — or should not — mean out of mind for the modern manufacturer. Quite the opposite, in fact.

Victoria Curran, product liability lawyer, Weightmans LLP

The courts are taking a practical view of what the reasonably expected behaviour of a consumer should be; wearing eye protection while loading the washing machine hardly counts With the Westminster sausage factory showing little sign of easing its legislative production schedule, nearly every aspect of the manufacturer’s day-today operations is being delineated as never before. It would therefore be a tall order to consider every application of legal best practice, not to mention statutory observance, for those in the sector. Nonetheless, TM has selected a number of the most salient areas of compliance for manufacturers in early 2010. While not an exhaustive list, having canvassed manufacturers — in sectors ranging from aerospace and automotive to pharmaceutical and food & drink production — and legal professionals, the following topics emerged time

and time again as being critical to maintaining healthy operational practices.

Product liability Product liability, defined as the legal responsibility of manufacturers, wholesellers and retailers to the buyers or users of damages or injuries caused by the use of defective products, hit the headlines in February with the recall of 1.8m Toyota vehicles across Europe due to faulty accelerator pedals, including about 200,000 in the UK. Similarly, in February the European Commission published guidelines for the management of the Community Rapid Information System (RAPEX) — its consumer product safety reporting mechanism. Widely praised, and with product recall figures quadrupling since 2005, “The practical implications for product manufacturers and suppliers will [nonetheless] be significant,” says Rod Freeman, a partner at Lovells LLP. “In the case of a voluntary recall, this will mean either that manufacturers and suppliers will have to provide proactively to the national authorities a much greater level of detail when making notifications around Europe, or they will have to expect to deal with more detailed inquiries from national authorities in all potentially affected markets.” A practical view “There is a significant rise in findings that warning labels are not always sufficient protection from liability for retailers or manufacturers,” says Victoria Curran, product liability lawyer at Weightmans LLP. “Moreover, the courts are taking a practical view of what the reasonably expected behaviour of a consumer should be — and wearing eye protection while loading the washing machine hardly counts as such,” she says, referring to a case in which the claimant suffered blurred vision, sensitivity to light and a possible tear in the eye due to faulty washing liquid. Damages awarded in claims brought against retailers under the Consumer Protection Act are being passed on to the product’s manufacturers, with contracts between the parties frequently

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allowing for such arrangements. “Manufacturers often have little say regarding the terms of their contracts with larger retailers,” says Curran. “Indeed, a worrying number of manufacturers end up agreeing to accept clauses indemnifying the retailers in full to maintain their supplier status.” With liability resting largely on their shoulders, manufacturers can seek to protect themselves by carrying out regular adequate tests and assessments of their products. “Producing up to date documentation on product testing and demonstrating compliance with specifications and any relevant standards is paramount in defending product liability claims,” advises Curran. “Moreover, being able to support the retailer’s defence with such documentation can even help build cooperation between the two parties and boost their defences.” According to Weightman’s Curran, if a claimant is successful in establishing that a product has a defect, a label alone is unlikely to provide protection in court. Being able to demonstrate that everything practicably possible was done to assess and minimise risks to consumers is therefore key. “In some cases,” she says, “the courts have held that large manufacturing firms or retailers have the resources to provide an improved level of protection for the consumer, with significant damages awards being made against those that don’t.”

Intellectual property While intellectual property (IP) rights are a valuable asset for any business, given the ever-evolving nature of law this aspect of legal compliance is particularly important for those in the manufacturing community. However, IP’s ethereal nature often makes it difficult to quantify, finance and protect; this can have serious practical and financial consequences for manufacturers, says Jaan Larner, a commercial solicitor at Keystone Law. Capturing all IP Businesses need to both recognise the different forms of IP — copyright; design rights; database rights; and patents, among others — and identify where within the business each IP asset will be created, says Larner. “Most commonly IP is created by the research and development department. Accordingly, all employees and consultants working in that department need to have provisions in their contract that reserve the IP they create as the property of their employer and grant the employer powers to ensure this is so. Employment handbooks and manuals need to be drafted carefully to ensure that the working practices used allow the IP to be kept confidential and to be retained securely within the relevant part of the building. Indeed, once information is made public there is nothing the law can do to make it secret again,” he warns. Many types of IP require registration before they can be defended against infringement. However, says Larner, “Registration can be costly and invariably requires the IP being made

public. Businesses should therefore consider what should be registered, when and at what cost with an IP strategy expert and then act accordingly. Maintaining important IP is similar to maintaining plant and machinery; it needs the timely and regular attention of an expert.” Capturing IP, though, is not simply about preventing it escaping or being taken by employees. Management must equally recognise that employees can be an excellent source of new IP. “Manufacturers should consider incentivising all employees to contribute their ideas while ensuring

Jaan Larner, commercial solicitor, Keystone Law

Employment handbooks and manuals need to be drafted carefully to ensure that the working practices used allow the IP to be kept confidential and to be retained securely within the relevant part of the building that such ideas, once contributed, belong to the employer. Incentives of this nature are often well received, and have the effect of promoting loyalty amongst the work force,” says Larner. IP created for the business by third parties Third parties are commonly engaged to create IP: be it through training videos, branding, web sites, signage, designs or prototypes. “It remains critical that all this IP is reserved for the business and, moreover, that the third party is required to keep that IP confidential,” says Keystone’s Larner. “This will often be resisted, given that third parties routinely seek to recycle this IP. Businesses should ask assume that the next person to engage the relevant third party will be a direct competitor, and should therefore either have strong protection in the relevant contract or should understand the commercial risks involved of not doing so.” Dealing with IP infringement by third parties Similarly, competitors often seek to steal IP rather than develop it independently, cautions Larner. “Clearly this needs to be addressed from an early stage,” he says. “Businesses must therefore put in place monitoring systems to track their competitor’s actions while retaining an IP lawyer to move quickly to stop any infringement.” end

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Specialfeature Kingston Smith LLP

Quarterly tax update – April 2010 The Budget contained few announcements aimed specifically at the manufacturing sector. There were, however, a number of measures announced for helping British businesses, particularly small and medium sized businesses, and also for encouraging research and innovation.

There

were a number of measures announced to provide better access to finance for small and medium sized companies with the creation of UK Finance for Growth, controlling £4bn of SME finance products, and the provision of £200m of capital for the Growth Capital Fund. Companies will also be given the ability to challenge banks’ decisions on lending through a new Small Business Credit Adjudicator, although whether this process will be quick enough for struggling businesses remains to be seen. There was also support for exporters, companies developing “green” technologies and for creative industries, with the computer games sector receiving a special mention.

Changes to capital allowances were announced to increase the Annual Investment Allowance so that businesses can take a 100% write off of capital expenditure up to £100,000 per year Maureen Penfold, Kingston Smith LLP Corporation tax rates remain the same, while Entrepreneur’s Relief for individuals owning trading companies was extended to provide, potentially, a further £80,000 relief from capital gains tax on the sale of a business. The Government is also considering ways in which the Enterprise Investment Scheme and Venture Capital Trust scheme, which provide tax relief for investors in smaller businesses, can be modified to make them more attractive to potential investors. Changes to capital allowances were announced to increase the Annual Investment Allowance (AIA) so that businesses can take a 100% write off of capital expenditure up to £100,000 per year — rather than £50,000 at present. As only a very small percentage

of businesses spend more than £50,000 on items qualifying for capital allowances, the increased benefit is likely to be small overall; the Chancellor suggested in the Budget speech that these changes will only affect 1% of British businesses. This extension of the AIA comes as the temporary 40% first year allowances introduced last year come to an end. In addition to the increased AIA, 100% first year allowances have been introduced for electrically propelled vehicles. There is also an update to the list of items that qualify for 100% first year allowances as energy or water efficient plant and machinery. Aside from these changes in direct tax, the Chancellor announced a temporary reduction in Business Rates for 2010/2011. Small businesses occupying premises with rateable value up to £6,000 should pay no Business Rates for the year from 1 October 2010, while premises with rateable values up to £12,000 should attract some tapered relief. The Chancellor estimated that 90,000 industrial units would be exempt from Business Rates as a result of this relief. end

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Shifting market, financial and operational issues are proving a game changer for globalisation, with Backshoring increasingly attractive for UK manufacturers. Trend or fad? Colin Chinery reports.

the fizz starting to leak from the golden elixir of outsourcing? The headlines suggest so, with reports of manufacturers moving production back to Britain, driven by concerns over higher costs and poor quality. A recent EEF survey of 300 manufacturers reported that over the past two years one in seven companies have moved its manufacturing operations back to the UK. Three in five were said to be concerned about the financial health of their overseas suppliers. Suddenly outsourcing, erstwhile alchemist of UK manufacturing, is being jostled by a new kid on the block — backshoring. A trend that will gather momentum or a blip? A mix, says Dr Jagjit Singh Srai, head of the Centre for International Manufacturing at the Institute for Manufacturing, University of Cambridge. “Manufacturers are becoming wiser about the complications of outsourcing and the total supply costs involved,” he says. “They are also becoming more careful about new product introduction where there may be sensitivities over intellectual property.

Manufacturers are becoming wiser about the complications of outsourcing and the total supply costs involved Dr Jagjit Singh Srai, head of the Centre for International Manufacturing at the Institute for Manufacturing, University of Cambridge.

“And they may be more conscious of exchange rate fluctuations which might make an overseas or outsourcing agenda attractive in a particular moment in time, but may not be the case now or from a longer term situation.” Backsourcing can send a good signal about British manufacturing and the UK as a place to do

business, says EEF chief economist, Lee Hopley. “We see it continuing, but not the trickle of one in seven suddenly turning into a flood.” While surveys have failed to identify backshoring as sectoral distinctive, rising logistic and wage costs, shoddy goods, and stock and cash tied up quayside are high among across the board reasons for ‘coming home.’ Hopley identifies others; the increasing competitiveness and efficiency of UK manufacturing, and firms taking more control of strategic manufacturing processes. “Manufacturers in the UK are now seriously reviewing some of their offshoring policies,” says Simon Griffiths, chief executive of the Manufacturing Advisory Service - West Midlands. “They now realise that whilst piece costs may be cheaper in low cost countries, the total acquisition cost can be far higher. Products sourced in the Far East often have to be paid for before leaving the port. Include six to eight weeks shipping time and safety stock in the UK and you can see two to three months of stock tying up significant amounts of cash — a scarce resource at this time.” “Add in the difficulty in flexing volumes and changing product mix — from a left hand drive to a right hand version, for example — and sourcing offshore can be quite unattractive. We are seeing increasing numbers of companies ‘repatriating’ offshored work and this offers great opportunities for UK suppliers,” says Griffiths. Even so, the balance of favour is still running strongly on the side of outsourcing. “Clearly companies have made outsourcing work for them, both in terms of delivering cost savings and also in some cases proving an ‘in’ to the market,” says Lee Hopley. For low volume Dutch niche car-maker, Spyker, relocation from the Netherlands to Coventry was prompted by the need to be nearer key suppliers. The weakness of the pound against the euro is believed to have made shifting production to the UK even more attractive. Lander Automotive of Birmingham B32 is backing both home and away. A leading supplier of sector products including coolant and oil system pipes, seat structures and IP beams, Lander

Supplychain and logistics

manufactured soft trim components at two plants in Hungary. But rising inflation, wage rates, taxes and logistic costs forced a re-appraisal. The factories were sold and Lander has now backsourced to the West Midlands. “We have done a complete reversal and reinvented the Birmingham factory,” says MD Roger Whitehouse. “Now we are on a mission to grow significantly from the current £28m to £45m over the next four years.” But Whitehouse discounts talk of a reverse globalisation. “I would hate to give a message saying that everything in the UK is rosy and we can buy everything from here, because we certainly can’t. In fact, we buy in most of our materials from low-cost countries and are increasing our bought-in content from Asia.” In contrast to the EEF report, a survey by the Cambridge University Centre for International Manufacturing showed the vast majority of manufacturers reporting overseas supplier quality and cost as exceeding their expectations. “Where I have sympathy with the EEF report is, yes, quality maintained to a point, but its maintained through lots of manual checking, manual supervision, manual intervention,” says Dr Srai. “It depends on the product you are after. If you are very much in the low cost category or commoditised products I would anticipate that some quality defects are tolerated by the OEMs or brand holders. More premium products would not be able to accommodate even a relatively small quality failure. The product sector can be a major player as to whether it makes sense or not.” Roger Whitehouse rounds on allegations of poor quality, blaming lack of control by the outsourcers. “People were naïve and thought they could get something for nothing. Outsourcing through a third party with an agency magically getting parts from somewhere in the world without having to do Advanced Product Quality Planning (APQP) and all the logistic planning and so on — and somehow they would magically get good quality.” “And surprise surprise, they got crap. We’ve done it properly. We’ve got our own manned station out there surveying all potential suppliers, all the APQP correctly and so on. There’s a cost in doing this but it’s worth it.” Size and location of the market are critical factors. “Going overseas in order to get lower cost is rarely attractive,” says Dr. Srai. “But going overseas to also tap overseas markets is extremely attractive. So if your market is closer to home, the outsourcing agenda is less attractive and most firms would not consider this unless they had a market growth potential as well.” If backsourcing is good for UK manufacturing, what are the constraints? “The main one at the moment is lack of capital for significant investment around any restructuring of supply chains,” says Paul Christodoulou of the Centre for International

Manufacturing. “However, arguably this is just building up a latent need which will come in a rush when capital flows free up.” The skills issue is another. “Recruiting the right people to bring production back to the UK is critical,” says Lee Hopley. “But those skills may have been lost to the business. It’s an issue many British manufacturers face in increasing capacity here or returning production back to the UK.” The manufacturing location decision is often a very dynamic agenda, says Dr. Srai — written by factors such as market size, operational costs consideration, including total supply costs, new product introduction and exchange rate fluctuations. “It’s a very dynamic environment. We’ve come across firms that have moved production out of Eastern Europe and put it into a population centre in the UK where one could argue it’s more expensive. “But what they are doing is building scale and capability for the long term and therefore it makes sense for them. Others will move production in and out of the UK on a more short-term, tactical nature. It’s a dynamic environment and one should not be too conscious of a trend, one way or the other. A trend or a fashion? My expectation is that it will fluctuate.” end

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Looking beyond the horizon Identifying opportunities to reduce costs and improve customer experience is the remit of Supply Chain & Business Process consultancy Möbius. Company director (FR), Luc Baetens, provides Tim Brown with details of how companies can ensure that their sales and operations planning achieves the best results. Company director, Luc Baetens

central concept behind sales and operations planning (S&OP) is the synchronisation of all aspects of business management so as to achieve not only efficiency but also effective operation. To achieve this, and as its name suggests, S&OP requires a great deal of strategy and planning re-evaluation. This might include updating the sales plan; production plan; inventory plan; customer lead time plan; new product development plan; strategic initiative plan; supply chain and logistics plan; and the resulting financial plan. Baetens says there are typically two types of companies when offering assistance with S&OP — those who have not implemented S&OP and those that have but are unsatisfied.

Introducing S&OP - Type 1 “With those that don’t have S&OP, you start from nothing and the introduction of an S&OP process is fairly quick,” says Baetens. “You spend a month upfront to decide who will participate, who and what needs to be prepared, delegate the responsibilities, and finally decide on how future decisions will be implemented.”

When implementing a new S&OP, the first task is to question what needs to take place during the planning implementation process. “We are looking to ascertain what ways a company has to influence demand,” he says. “This is typically quite a complicated question because companies often consider demand to be an external factor on which they don’t have any influence. That’s not strictly true because they can decide on price as well as be more or less aggressive with marketing and promotion.”

A company then needs to question what levers exist for it to match its supply to demand. This also causes concern, explains Baetens, due to the rigidities which often occur within a business system. “Once you ask a simple question about changing a shift regime, companies don’t necessarily know how much time that would take them, nor do they have a clear way of implementing such a decision.” However, regardless of inflexibility, the main issue for companies that haven’t introduced S&OP is that they have enacted

S&OP Balanced Scorecard Customer

Process

Finance

Learning

On time in full on promised date

Forecast accuracy

Return on net assets

Actual production versus plan

Adherence to budget

Presence to & preparation for S&OP meetings

Order fulfilment lead-time

Production flexibility SC response time

Total supply chain cost Inventory days supply

C-level presence to S&OP decisions Long-term improvement to customer, process & financial indicators

Tuning S&OP - Type 2 In comparison, for those companies that have already introduced S&OP, it is often the case that processes may have been implemented within a company some years ago and they may still have quite acceptable levels of participation. However the S&OP process does not seem to improve the performance of the company. Baetens says that in such cases, very often it is the same questions that need to be asked to tackle the problem. “What Möbius would typically do in this kind of situation is start with a very simple round of observation

Mobius

planning systems or processes which are very detailed and very short-sighted. If a company has very detailed planning systems, it is very difficult to have a long term view. “The main risk for S&OP processes is that they become more and more detailed and consequently more and more shortsighted,” says Baetens. “It is very difficult to maintain S&OP on the appropriate level which is strategic and not just tactical. S&OP could be considered strategic if it really includes a full financial picture of the planning decisions. The ideal strategic S&OP would ensure that a company does not make decisions purely on volumes but more practically on profit and loss predictions. Therefore if a company decides to change volume on sales or production decisions, it can see immediately what the impact would be on their profit and loss. If this occurs then the S&OP could be considered strategic because then a company really has the capability to take a planning decision and comprehend whether it will help to achieve a budget requirement. “If we consider companies that are on the stock exchange, then this becomes very crucial because financial predictability is very important. What you want as a CEO or a COO is a process that allows you to work out what your financial year results are and uncover how the decisions you take, in terms of operation, influence the financial results.”

involving the teams who participate in each activity of the S&OP process. Then the performance and involvement would be evaluated. We also check to make sure the people responsible understand why they are undertaking S&OP tasks. Very often, improving the understanding of how S&OP can drive the operation can have a profound impact on its successful operation.”

Suggestions for smooth planning According to Baetens, the two biggest and most important trends which have emerged from S&OP recently have been the repositioning of S&OP as a strategic tool and the implementation of S&OP-related software. The introduction of the terms ‘executive S&OP’ and ‘integrated business planning’ (also known as integrated business management) have seen a revamp of the S&OP processes with a stronger link to strategy and finance. This has led to an important variant, which more closely links S&OP to the whole operations budget in terms of revenue, cost and gross margin. The other trend that has been seen in the market is dedicated S&OP software tools to allow for advanced planning and scheduling (APS). However, he warns that

such software can have its pitfalls if it is unable to solve simple yet aggregated issues and can often fail to have profit and loss calculating capabilities. Perhaps the best advice Baetens can offer to companies regarding S&OP is that they should not be afraid of the long term view that is required for better S&OP outcomes. “Companies need to have the long term vision which takes into account the implementation period, regardless of whether or not they have a long term forecast. When we talk about S&OP processes, the horizons should exceed the longest decision time that we have on the plans we want to implement.” So if there is an investment or change in your business plan for execution in 2010, the S&OP needs to go well beyond that. When it comes to business operations, forward thinking is the essence of the Möbius S&OP ideal and the company sees S&OP as the best mechanism to achieve future clarity in the whole business enterprise. There is no crystal ball which allows companies to plan with absolute assurance. However, with both strategic S&OP implementation and the use of distant horizons, companies can rest assured that they are prepared for the future as best as they can possibly be.

For more information please visit: www.mobius.eu or contact: joanna.holmes@mobius.eu

BI-partisan

technology? Companies today need to be able to collect information on a number of indicators to gauge their performance against their own and external targets. These KPIs can vary from number of units produced in a selected time period, to number of orders received through certain channels, to the availability of skilled personnel and particular plant.

This

is on top of, and addition to, the usual financial analytics. Clearly the role of business intelligence is changing. As Andrew Stevens, Sage’s enterprise development manager, explains, “We are seeing the requirements for Business Intelligence to become part of the natural workflow of business processes, rather than an adjunct to ERP applications.” So what does this mean for manufacturing organisations in today’s economic climate? What should they be expecting from Business Intelligence software?

Data your way While broadly defined as the skills, processes, technologies, applications and practices used to support decision making, a better definition is that Business Intelligence represents the tools and systems that play a key role in the strategic planning process of the corporation. These systems allow a company to gather, store, access and analyse corporate data to aid in decision-making. Generally, these systems will illustrate business intelligence in the areas of customer profiling,

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Your Business

Business Intelligence

Information Technology

The Overlapping Circles Source: www.theaccidentalsuccessfulcio.com

customer support, market research, market segmentation, product profitability, statistical analysis, and inventory and distribution analysis, among others. So we collect data and turn it into intelligence, but how is this to be done? For the US Department of Defence the process consists of six interrelated intelligence operations: planning and direction; collection; processing and exploitation; analysis and production; dissemination and integration; and evaluation and feedback. Our software, therefore, must support these capabilities. BI technologies provide historical, current and predictive views of business operations. Common functions of Business Intelligence technologies include reporting, online analytical processing, analytics, data mining and business performance. Phil Howard, research director, data management at Bloor Research, states, “You can use any database as a data warehouse or to support business intelligence management, benchmarking, text mining and predictive analytics. However, if there is any substantial re¬quirement for analytics then general purpose databases without specialised facilities will fail to give adequate performance.” Similarly, Randy Flam, President of IQMS, says, “Business Intelligence is becoming more and more important. It used to be that all you needed was a static report writer to extract and report on data, but now you have to be able to provide the ability to dashboard and drive down to more detailed information — as well as deliver on multiple user

platforms, from PCs to mobile phones.” Marge Breya, executive vice president and general manager, Intelligence Platform Group Your and SAP NetWeaver Solution Management Management, supports this view. “Customers want to work with their data their way; whether it’s behind a firewall, on the Web, or on their local computer in spreadsheets,” she says. “With access to data at their fingertips, customers can make more confident decisions, share their insights with others and react quickly to any changes in their business.” Business Intelligence is more than simply being able to extract data and report on it. It is also more than financial analytics or even key performance indicators. And it requires more than just standard reports, but alerts and graphs and traffic lights. A question we need to ask ourselves, therefore, is in what context was the data collected?

Driving information The problems at Toyota that have led the company to recall a significant number of vehicles have been widely reported. Teradata have been working with a number of automotive vendors looking at the problems with warranty. Says Duncan Ross, director of advanced analytics at Teradata, “Warranty data comes from two different sources. One is from the production line, and is well defined and consistent in nature. The other comes from the dealers’ workshops, and is of variable quality. This can lead to the same problem being reported a multitude of different ways — meaning big problems can get hidden.” Ross goes on to describe how Teradata, working with SAS Institute, has developed a solution using statistical methods to allow the dealer’s warranty information to be grouped and analysed more effectively. This results in the detection to rectification cycle being shortened, with Business Intelligence being used as part of a warranty system — a service management component — to analyse the data received. Ross sees this as just one business intelligence application in the automotive sector. “A car is now a computer on wheels,” he says. “Data is being collected continually that the driver is unaware off. As warranty schemes increase in length, we could reach a time when the OEM actually owns the car for its whole life, and we the driver lease it. Data collected by the computer in the car can stream this data back to a central point, which allow problems to be identified and reported before the driver is even aware of them.” Real-time BI disseminates information about a business in a range from milliseconds to a few

seconds after the business event. While traditional Business Intelligence gives users only historical information, real time business intelligence provides a comparison of present business events with historical events — which helps in identifying a

Business Intelligence tools have empowered businesses — regardless of sector — to make better decisions on their own, without relying on IT or power analysts to prepare and interpret results for them range of issues, thereby allowing them to resolve it on time. The primary aim of real-time BI is to enable corrective actions to be initiated and business rules to be attuned to optimise business processes Rick Whitting states that real-time information is no longer a competitive differentiator that produces more timely and relevant business decisions. Decision-makers in SMEs can now communicate and collaborate over broadband

networks as if they were in the same office. He sees that it is the ability to forecast where events are heading, and then make informed decisions, based on that assessment. Termed ‘predictive analytics’, it involves running historical data through mathematical algorithms such as neural networks, decision trees and Bayesian networks to identify trends and patterns and predict future outcomes. An organisation’s ability to make educated guesses to questions such as “will product demand surge?” or “will a customer take his business elsewhere?” is key to improving service, cutting costs and exploiting new market opportunities. But, ultimately, do I want to run BI in house? Could I use the cloud? The answer to these questions is yes. This February saw SAP announced the SAP BusinessObjects BI OnDemand solution, targeted at casual BI users to deliver a complete BI toolset which requires no prior experience or training. The most interesting aspect of this announcement was that a user would be able to integrate data not held in SAP with a specific interface to saleforce.com included.

So what? Business Intelligence tools have empowered businesses — regardless of sector — to make better decisions on their own, without relying on IT

IT in manufacturing

or power analysts to prepare and interpret results for them. Moreover, BI applications have become as commonplace as spreadsheet applications within large organisations — and this will extend to all within a few years. “We have seen a noticeable shift in the motives for firms investing in BI,” says Stevens. “Historically, BI provided information at a management level only, but businesses are now placing emphasis on utilising BI as a means of transforming data into actionable insights across their organisation. It enables companies to unlock the intrinsic value of data held within their business systems. Indeed, we believe that BI should never be seen as an additional IT layer or standalone platform, but as an integral business tool that can ensure everyone is pulling in the right direction.”

A 2009 Gartner paper predicted the following developments in the business intelligence market: Because of lack of information, processes and tools, through 2012 more than 35% of the top 5,000 global companies will regularly fail to make insightful decisions about significant changes in their business and markets. By 2012, business units will control at least 40% of the total budget for business intelligence.

By 2010, 20% of organisations will have an industryspecific analytic application delivered via software as a service as a standard component of their business intelligence portfolio. In 2009, collaborative decision making will emerge as a new product category that combines social software with business intelligence platform capabilities. By 2012, one-third of analytic applications applied to business processes will be delivered through coarsegrained application mash-ups. To my mind the future in BI will be heavily automatic collection-based. Manufacturing decision makers don’t have the time to spend on collecting and formatting data simply so that they can report on it. As we receive an increasing amount of data to analyse — coming not only from within our own organisations boundaries, but also our customers and supplier, not to mention other external sources — how do we sort the wheat from the chaff? For a business user’s viewpoint, the software has to allow easier definitions of what needs to be collected and provide interaction during the build process. This will include the ability to define different views and collections for different user interfaces. Then, and only then, will we have the agility that we need. end

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ITnews... ERP

Epicor helps Benson Group quadruple output Benson Group, one of the UK’s fastest growing packaging manufacturers, will extend its use of the Epicor Manufacturing ERP solution and Epicor Advanced Planning and Scheduling to its packaging plant in Crewe, Cheshire. Additionally, Benson has achieved a four-fold increase in production output at its flagship manufacturing facility in Bardon, Leicestershire, which is underpinned by the Epicor solution. In its eight year relationship with Epicor, Benson Group has

grown from a singlesite £10m business to one of the UK’s largest manufacturers of folding cartons, with 2009 revenue expected to reach £90-£95m. Through Advanced Planning and Scheduling, Benson Group has been able to achieve a higher utilisation of its manufacturing lines, reduced downtime between jobs and ready make times, by ensuring cut and finishing operations based on the same die board are scheduled to run in sequence.

“Epicor has been an instrumental element to achieving the success we enjoy today through greater efficiency in our processes and sites,” said Phil Towersey, IT manager at Benson Group. “For example, our accounts team is the same size as it was eight years ago, despite a huge increase in our revenues.”

Vantage Industries implements Solarsoft ERP

Mid-market companies Flex their way to SOA

Vantage Industries, the coated fabrics manufacturer, has purchased Solarsoft’s iVP ERP software to manage its inventory, purchase order processes and entire supply chain.

Infor announced an increase in customer demand for the latest versions of its software through the Infor Flex Program.

The implementation of Solarsoft’s iVP system will also provide Vantage with full remote access, Electronic Data Interchange (EDI) integration with suppliers and the ability to manage all inbound and outbound deliveries in a timely and accurate fashion. Since August 2009 Vantage has been an independent company, manufacturing coated and non-slip fabrics, primarily PVC-coated polyester and EVA-coated substrates. The products are designed for a variety of commercial and residential applications and are marketed directly to retailers, distributors and individual consumers. Bob Waddell, Vice President of Vantage Industries, said: “After we established ourselves as an independent company, we needed to construct our own infrastructure from the ground up and unite the various business functions. Solarsoft iVP will be the lifeblood of our business, and the stability, security and high levels of support that come with it allow us to have complete confidence in our business processes. “It is intended that Solarsoft iVP will manage our entire business from end-to-end — from the 50+ sales staff in the field having instant and secure remote access to the CRM system and quoting module, to the incoming purchase orders and EDI being balanced with our stock inventory and supply chain, right through to the picking and packaging of the outbound deliveries.”

Approximately 200 customers have cost-effectively contracted to upgrade or exchange their existing Infor solutions to software that can utilise Infor Open SOA (serviceoriented architecture) since the program’s announcement in June 2009. Infor Flex enables qualifying customers with active maintenance contracts to upgrade from an existing Infor solution to the latest version of that software or to exchange an Infor solution to a more robust system which may take advantage of innovations through Infor’s Open SOA technology. In addition to supplementary modules and complementary applications, Infor Open SOA enables customers to deploy new components, which provide innovative functionality across multiple solutions. Such components from Infor will aggregate data across various aspects of the business and improve operations in the areas of business intelligence, accounting and strategic planning. “Customers have made it clear that they expect more from their software vendor than solutions that do not grow with their business and must be ripped out and replaced through a prolonged, expensive and risky implementation,” said Dennis Michalis, corporate senior vice president, Infor. “The success of the Infor Flex Program highlights our unique approach to software upgrades that provides transparency up front, mitigating the risk of an implementation that runs over on time or budget.”

Seeing old IT challenges in a new business light. Disruption or deliverance? Seek out the business opportunity within the challenge. Business change is inevitable – but how you adapt to it dictates how competitive your manufacturing operation can be. That’s why the most progressive CIOs partner Avanade: delivering new levels of innovation and agility to help them reduce costs and deliver global supply chain advantage. With our joint Accenture and Microsoft heritage, Avanade is uniquely placed to help you keep your eyes on the horizon, and your feet on the ground. Using the Microsoft platform as a springboard for delivering business results, we’ll help you adopt a pragmatic approach that makes change less daunting, combined with a visionary attitude that puts real triumph within reach. For more information visit www.avanade.com

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Virtualisation management

PLM

Siemens supports research in the field of seismic risk Siemens PLM Software announced an in-kind software grant, with a commercial value of nearly €28,000, to support EUCENTRE’s research program devoted to the reduction of seismic risk around the world. EUCENTRE (European Center for Training and Research in Earthquake Engineering) uses Siemens PLM Software’s solutions for modelling and analysis, aiming to define the seismic behaviour of single structures, and to validate simplified models for evaluation of large scale seismic risk. Through EUCENTRE’s use of Siemens PLM Software’s technology, scientific progress is possible in the fields of seismic engineering and seismology, which in turn provides a concrete basis for the development of emergency plans and the improvement of intervention strategies and policies. “Siemens PLM Software develops and nurtures partnerships that provide significant value for academic institutions, youth / displaced workers development programs, Regional Productivity Partnerships, Partners for the Advancement of Collaborative Engineering Education (PACE) and our global communities,” said Hulas King, director of Siemens PLM Software ‘s GO PLM & Global Community Relations. “We partner with academic institutions to increase the skills of the work force, introduce the most advanced technologies and improve PLM processes. We are proud to team with Eucentre’s strong leaders and University of Pavia’s gifted students to reduce seismic risk on a global basis.”

Virtualisation management solutions lead to growth for Vizioncore Vizioncore Inc, a specialist in virtualisation data protection and management solutions, announced that its solutions have been adopted by more than 20,000 customers globally. Vizioncore’s recently launched Backup 2.0 thought leadership program is designed to help companies understand how products like vRanger Pro are transforming data protection, making it more effective and comprehensive, and lowering the total cost of ownership. In addition, vFoglight has been deployed to date by more than 5,000 customers to date. In 2009, vOptimizer Pro, Vizioncore’s storage optimisation and reclamation tool, became the fastest-growing product in the company’s history. “Virtualisation management providers like Vizioncore continually impress us with truly innovative solutions that customers need to get the fullest value from their implementations,” said Lauren Whitehouse, senior analyst at Enterprise Strategy Group.”These solutions also set the stage for virtualisation to take over the data center, resulting in more cost-effective and efficient IT across the board.”

Business Intelligence

SAP gains 3M as new customer One of the world’s largest brands has selected SAP AG as its enterprise standard software provider to unify its global business processes. 3M is rolling out SAP Business Suite 7 software as it phases out some of its legacy applications at sites around the world. To help ensure business continuity, 3M is taking a phased approach to its deployment

of SAP Business Suite 7. First implementations are already under way in Europe and Asia Pacific. In Europe, 3M is in the process of implementing a new demand forecasting and supply planning system leveraging the SAP Advanced Planning & Optimisation component. “Providing innovative solutions to our customers around the world is our top priority, so we undertook a thorough evaluation to determine the best-suited business software

that could further improve customer intimacy, service delivery and power each of our divisions and regions of operations with industry best practices,” said Ernie Park, vice president and chief information officer, 3M. “SAP business solutions will play an important enabling role in unifying core processes globally and supporting our ongoing strategy of meeting customer needs wherever they are. We expect the SAP deployment to provide significant value to 3M in the coming years.”

We HAD A loT of VAluAble inforMATion - We JusT neeDeD A WAy To finD iT

“We needed to bring our different companies together under one system to ensure we remained competitive, maximising the opportunity of being a multinational company,” explains Jim Butz, AMCOL’s global IT Director. AMCOL replaced their many and disparate systems and processes with one Enterprise Resource Planning (ERP) application Microsoft Dynamics NAV, which was implemented in 22 locations accommodating nine different languages and the needs of their sales, finance and manufacturing staff - by one company - Tectura. To see how a Tectura solution could help improve your business call us on 0845 084 0152 or visit our website www.tectura.co.uk builT onon MicrosofT DynAMics nAV nAV A TecTurA TecTurAsoluTion soluTion builT MicrosofT DynAMics

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ITnews...

Business improvement

Product data management

Aero Sense Technologies uses SolidWorks Enterprise PDM

Lanner launches PRISM Forensics

SolidWorks Enterprise PDM (product data management) software is enabling a UK-based aerospace design firm to collaborate across 14 time zones without worrying about mixing up versions or losing important ideas and modifications between sites.

Lanner, the business process improvement company, announced the launch of the ‘Forensics’ module of its specialised police simulation software, PRISM.

Aero Sense Technologies purchased 25 seats of SolidWorks Enterprise PDM software to coordinate operations between its production facility in Sri Lanka and its design sites in Exeter and Los Angeles. SolidWorks Enterprise PDM software stores CAD models and supporting documents — anything from documents to images — in an indexed central repository. Secure access and built-in audit functions protect data from accidental and deliberate damage while tracking who accesses design data, what they changed, and when. “We need robust data management and revision

control between our three sites. Working from a common data model in SolidWorks Enterprise PDM gives us the control and functionality to maintain our documents’ integrity,” said Aero Sense Technologies Senior Mechanical Engineer Ashley Roy. “There are many different document formats involved in product development: SolidWorks files, Word documents and other CAD files, among others. SolidWorks Enterprise PDM creates a common environment that enables our staffs to collaborate while maintaining authoritative versions of documents and data models.”

This follows on from the ‘SWIM’ (Scientific Support Work Improvement Model) programme, delivered in conjunction with Home Office Police Standard Unit (PSU). This work resulted in a report deemed to be “the most significant report into forensic science of the past decade” by senior police scientists. Following the success of SWIM and the implementation of a series of PRISM modules for Call Handling, Incident Response and Custody Management, Lanner has launched the PRISM Forensics module. This tool has been designed using the PRISM ‘quick-start’ software architecture — enabling the module to be configured to the needs of any force quickly, without the need to invest time and money building a process model to enable decision making from scratch. Ernie Brummitt, head of Performance Analysis at Nottinghamshire Police, said: “PRISM can drill down into the processes and highlight the bottlenecks which can inhibit the ability to maximise resources. PRISM’s ability to map out scenarios, based on multiple dynamic variables in order to build a business case, is invaluable.”

Production planning

Preactor announces partnership with QAD Preactor International announced a partnership agreement with QAD Inc., a provider of enterprise software and services for global manufacturers, to offer its solutions to QAD customers. QAD’s Enterprise Applications solutions provide the functionality manufacturing companies need to manage resources and operations. Preactor International has

over 16 years experience in the advanced planning and scheduling market and its products are installed at over 3,000 companies, making it one of the most installed APS solutions on the market today. Said Mike Novels, CEO of Preactor International: “In today’s challenging market companies are looking for help to manage resources more effectively in situations where both supply and demand are uncertain. Working with QAD, Preactor aims to deliver this help.”

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ITnews... Industry data

Perceptions about design technology hampering growth A survey from Autodesk, polling the views and opinions of more than 100 senior decision-makers working for mainstream manufacturing companies in the UK, finds that these companies see increasing margins (48%), improving quality (30%) accelerating speed to market (29%) as the three most important drivers of business growth. The most important barrier identified is the cost involved in achieving this growth (highlighted by 62% of respondents), followed by market conditions (cited by 58%). 83% of those surveyed felt

that it would take a rise of more than 10% in annual investment in design technology solutions to achieve ‘improved margins’ while 37% felt that an increase of more than 50% in annual investments would be required to deliver ‘accelerated speed to market’. 33% thought that a similar increase would be the minimum needed to attain ‘reduced product development costs’ (ranked as the fourth most important growth driver). “This emphasis on cost is significant, particularly when you consider that manufacturers believe that

Performance management

Hadley Group chooses Infor for performance management Infor announced that Hadley Group, one of Europe’s largest privately owned cold rolled steel manufacturers, has extended its portfolio of Infor solutions with an investment in Infor PM 10 (Performance Management) software.

Hadley Group will deploy PM10 for more agile budgeting and forecasting within its manufacturing sites in the UK and Germany in early 2010, and later roll it out to staff in Dubai and Thailand. Beyond performance management, The Hadley Group is also piloting an upgrade from Infor ERP Baan 5 to Infor ERP LN, the latest version of Baan. This is currently being conducted in a test environment in the UK before adopting and rolling out to other sites. “In the current economic climate, moving to a rolling three month budgeting schedule, as opposed to analysing out-of-date annual plans, makes perfect sense for better business planning. Our adoption of PM 10 goes hand in hand with a change in our culture as we shift focus from a constant, time intensive analysis of our financial information to management by exception,” explains Mike Collier, business systems manager, Hadley Group.

the same commercial drivers seen as critical to their growth will also require the largest increases in design technology investment to achieve,” says Amina West, sales director, Autodesk Manufacturing Solutions, Northern Europe.

GIVE YOUR BUSINESS THE GREEN LIGHT

PrISM

Practical Information for Sustainable Manufacturing

An international conference at the University of Cambridge Institute for Manufacturing 19 and 20 May 2010 Introducing sustainable practices into your business could save money, improve efficiency and boost competiveness. This event will bring together some of the world’s leading manufacturers, retailers and innovators in the field of practical environmental change. You will find out how to: ◆ Make major savings from reducing energy use and waste reduction ◆ Boost revenue through innovative recycling and waste management schemes ◆ Create product marketing advantages and new commercial opportunities Contact Jo Griffiths: T: +44 (0)1223 748260 E: jg393@cam.ac.uk

www.ifm.eng.cam.ac.uk/sustainability/2010

Have your say at www.themanufacturer.com

MIAForeword Cast Metals Federation

The UK’s cast metal sector looks to the future

The Cast Metals Federation considers how the UK’s cast metals industry is facing up to change and looking forward through excellence and innovation.

ike the rest of manufacturing, the UK’s foundry sector — represented by the Cast Metals Federation — has faced a challenging time over recent months but, having learned from previous recessions, the sector has proved to be very resilient and emerged much stronger than expected. With over 150 members, including foundries producing around 80% of the UK’s output of castings, the Cast Metals Federation represents the nation’s cast metals sector; which no longer has an old fashioned image but an industry of precision engineering, high levels of expertise and world beating standards. In the mid-19th Century there were thousands of foundries across the UK. It was a dirty, hot and difficult environment to work in, but was also an industry in which Britain undoubtedly led the world. Over the last 30 years many foundries struggled to find a place in the global marketplace, but in the last decade the sector has responded to the challenge to meet the ever more stringent customer requirements for casting performance, quality and delivery. Now, with an annual output of around 700,000 tonnes, the UK

cast metals industry has a turnover of around £2.2bn. Producing castings in any metal, size and quantity, the industry’s diversity has led to the development of some extraordinary components. For example, the largest car brake calliper housing ever made, designed to bring the spectacular Bugatti Veyron supercar to a stop from 250mph in under 10 seconds is produced by CMF member Alucast in the West Midlands. The technical requirement of the calliper housing casting is extraordinarily stringent due to the very high stresses put on it during braking, so component integrity is key. Sheffield Forgemasters are making huge steel castings, including the award winning 325 tonne single press body, the largest ever manufactured in Europe, while in contrast, Leicester-based Lestercast are making tiny high precision lock castings weighing only a couple of grams each — further highlighting the diversity of the industry in UK. There are CMF members producing high volume components every year for the automotive industry, with ever more complex features and dimensional accuracy using highly developed

automation, and others casting critical components for aerospace engines. At the other end of the spectrum, there are companies producing street furniture and oneoff hand finished art castings of unbelievable beauty. Foundries have also expanded the range of services to add greater value to their products — from component design and prototyping at the one end of the process to machining, finishing and assembly at the other. “The CMF’s role is to represent the industry when talking to Government in the UK and Europe, and to provide the collective services — commercial and technical — that will enable our members to keep moving forward both individually and collectively,” says CMF chief executive, John Parker. “Allowing for the recent recession, the last 10 years have been important for the UK foundry industry which is increasingly finding its role in the world as a high quality, high skill casting producer.” end To find a UK foundry producing components in any metal, any size, any weight and any quantity go to www.castmetalsfederation.com.

Manufacturinginaction Sponsored by TBM Consulting Group

Putting UK manufacturers under the spotlight

Factory of the month

From early beginnings as a post-WWII manufacturer of penicillin, the Eli Lilly and Company plant in Liverpool has diversified its portfolio with animal health products now responsible for the bulk of the company’s output. Tim Brown discusses current plans with the team at Lilly Speke, and finds out what’s in store for the future.

88 Eli Lilly Health and wellbeing

103 Seven Seas Navigating stormy waters

135 Hanson Cement Mixing it up

115 DavyMarkham The good, the big and the ugly

141 Hampshire Cosmetics Changing the face of the operation

TM steps deep into DavyMarkham’s 175,000 sq ft workshop and develops a taste for fire and steel

123 Kelvin Hughes On the radar

TM visits Seven Seas – UK market leader in vitamins, minerals and supplements

Ee by gum… TM takes a trip to the Lancashire hills to talk to a company in an industry truly battered by recession

TM hears how widening its horizons has kept this company on course to meet ambitious growth targets despite the downturn

Tim Brown discusses the company’s marine electronics division with director, Martin Taylor, and operations manager, David Bassett

129 Daval Furniture Part of the furniture

TM meets Daval Furniture’s Simon Bodsworth to talk stock holdings, supplier loyalty and Lean transformation

All companies featured will be entered into the MIA Award 2010

Health and

wellbeing From early beginnings as a postWWII manufacturer of penicillin, the Eli Lilly and Company plant in Liverpool has diversified its portfolio with animal health products now responsible for the bulk of the companyâ&#x20AC;&#x2122;s output. Tim Brown discusses current plans with the team at Lilly Speke, and finds out whatâ&#x20AC;&#x2122;s in store for the future.

Factory of the month Eli Lilly

When

the factory was constructed in 1945, it began manufacturing fermented healthcare products, specifically penicillin. Following the purchase of the site by Lilly in 1963, the plant began to expand its product range, and in the late 1970’s was principally focused on the manufacture of protein-based products. Today, products developed for human use have been largely related to biosynthetic protein production, but the plant continues to produce several animal products which are derived from natural product fermentations.

Animal health The Lilly corporation, based in the US, has a dedicated animal health business, Elanco, which has a global turnover of approximately $1.2bn. Lilly Speke Operations manufactures animal healthcare products on behalf of Elanco, supplying approximately onethird of the division’s total products — with responsibility for around 400 end sale items. With the UK site making such a considerable contribution to the Elanco global business, the company exports a great deal of its products. “We sell across most of the world, with only a relatively small proportion consumed

We really try and ensure that everybody understands how important productivity is to the organisation

Microbiologist at work in one of the site laboratories

in the UK,” says Alan Spreadbury, manufacturing leader for animal health. “The major Western European countries are the biggest market for this site, but we supply to countries throughout the world including North and South America, Asia and Australasia. Exports constitute up to 95% of what is produced on site.” The bulk of the animal health care products are used for the treatment of livestock such as cattle, swine and poultry. Elanco is, however, beginning to diversify into other areas, including treatments for companion

Lakers Alliance through co-operation “Lakers” working relationship with Eli Lilly at their ‘Speke Operations’, has proved to be educational and commercially viable. Through the “Lilly Alliance” we have undertaken several initiatives to improve the service we provide and aid Eli Lilly with their product and cost base. An example of this was openly discussing specifications and reviewing their fitness for purpose, resulting in the introduction of alternative specifications which have reduced cost and improved product quality. Obviously providing our services injury free is the key target we all aim to achieve; with ongoing improvements to systems, methods and initiatives that will continuously improve our performance. The alliance encourages

participation via improvement suggestions and ongoing initiatives, which we find to be challenging, helpful & rewarding. Although ISO9001:2008 approved, “Lakers” are currently working towards achieving accreditation to BS EN 18001, for integration of safety management, operational quality and performance systems. Through “Lakers” ongoing partnership with the University of Liverpool, School of Management will introduce lean manufacturing to all our operations, in conjunction with other improvements we aim to provide a sustainable and continuous improvement of service to our customers.

Our comprehensive training plan for the coming year embraces all employees’ covers, safety, communication, productivity, industrial relations & trade competencies through to Master Degrees in Project Management; we believe personal development improves our employees our business and therefore service to our customers.

Published in association with: lAKER vENT eNGINEERING LIMITED Tel: 0151 357 8089 Email: sales@lakervent.co.uk Web: www.lakervent.co.uk

Factory of the month Eli Lilly

Technician working on process improvements in development area

animals as well as the growing animal vaccine market.

Human health In addition to the animal market, Lilly Speke Operations produces two primary products for the human healthcare market: a biosynthetic hormone product and a treatment for multi-drug resistant tuberculosis. Commercial team leader, Jon Westcott, says they supply the former into a relatively mature and stable market where it is used to treat hormone deficiency. The treatment for multi-drug resistant tuberculosis is a product that Lilly Speke Operations has been making for nigh on 40 years. According to Communications and PR associate, Julie Stanley, in the last few years the product has become much more important due to the growing incidence of Multi-Drug Resistant Tuberculosis (MDR-TB) worldwide.

In 2003, Eli Lilly created the Lilly MDR-TB Partnership to help contain and ultimately conquer multi-drug resistant tuberculosis (MDR-TB), a disease so daunting that no single organisation can fight it alone. The Partnership, a publicprivate initiative, mobilises 22 partners on five continents in the battle to stop the spread of MDR-TB and save lives. Lilly has committed $120 million in cash, medicines and technology to

The WHO estimates that there are around 500,000 new cases every year of multi-drug resistant tuberculosis, of whom up to 150,000 may die increase access to treatment and focus global resources on prevention, diagnosis and treatment of patients with MDRTB. “The WHO estimates that there are around 500,000 new cases every year of multi-drug resistant tuberculosis, of whom up to 150,000 may die” says Stanley. “Last year we supplied 1.1m vials of the medicine that we make on site to the World Health Organisation’s programmes. Even that quantity only

ATG ATG is a leading UK electrical engineering organisation, employing around 350 people and with a turnover in excess of £20M.

TG has substantial experience of operating EC&I term contracts for major blue chip clients, as well as delivering major and minor EC&I project works. We also design and build LV & MV switchgear, motor control centres, PLC systems and SCADA systems. Our bias is towards major process sites, and much of our work falls within the pharmaceutical, chemical, petrochem, oil & gas, and nuclear sectors. We believe that our success to date has resulted from our business philosophy of always seeking to work in partnership with our clients, coupled with our commitment to continually driving improvements

in safety and quality standards, as evidenced by our 13 year history of RoSPA awards, culminating in 4 successive RoSPA President’s Awards since 2006. ATG has operated the electrical & instrumentation term contract on site at Eli Lilly Speke Operations since 2002, and has gained an indepth understanding of the site and of the challenges associated with working within the confines of a pharmaceutical facility. During this time ATG has supported Eli Lilly through various initiatives, including providing placements for a number of Lilly

Speke Operations apprentices to allow them to gain direct experience of electrical installation work. This initiative fully supports ATG’s own commitment to modern apprenticeship schemes, with over 100 apprentices completing their training with ATG over the last 20 years.

Published in association with: ATG Tel: 01942 868900 Fax: 01942 868901 Email: enquiries@atg.uk.com Web: www.atg.uk.com

Factory of the month Eli Lilly

treats a small proportion of the patients. In 2008 we made more of this product than ever before, and last year we made even more again.” Interestingly, the Lilly MDR-TB partnership is both a public and private initiative that provides access to medicines, trains healthcare workers, raises awareness and promotes research and prevention, while providing support for communities and advocating on behalf of patients. In addition, Lilly scientists and engineers are working with partner companies in countries most affected by MDRTB to allow them to produce the drug themselves. “We have not just been supplying the product,” says Stanley, “we’ve been going countries that need it the most and working to dramatically increase the quantity of medicine available. These include India, China, South Africa and Russia, which are the four MDR-TB hotspots. Where necessary we have then also assisted in the development of manufacturing plants and other associated systems.”

Important improvements Lilly Speke has invested a considerable amount of effort to ensure its business and manufacturing processes are operating as efficiently as possible. The site, in line with the global corporation, has adopted a formal six sigma program with a number of black belt-accredited key staff working fulltime on productivity initiatives within various teams. The site has also introduced what they term a green belt structure, where people train and deliver a project in an area in which they have a specific knowledge and day to day responsibility. “We have seen a whole raft of different improvements within business process efficiencies, the supply chain and our asset and capital base,” says manufacturing information and Control Systems team leader and six sigma champion, Tracy Critchley. “We’ve achieved some spectacular improvements in areas such as throughput in particular plants, where we’ve set up particular projects to work on where demand has been exceeding supply. One of the earliest successes was in one of our plants where we reduced the turnaround time by about 50% from one campaign product to another which gave us, together with another project, about 25% more days

Operations technician in recovery plant

ONE SOURCE FITS ALL THE FDL PACKAGING GROUP RECIPE FOR SUCCESS

n recent years, finding a suitable single source packaging supplier has become a key objective for procurement departments up and down the land in recognition of the fact that a one-stop packaging resource provider can deliver real dividends in terms of significant efficiencies and cost savings. ONE SOURCE, ONE RELATIONSHIP, ONE PERFECT PACKAGE. As the UK’s leading packaging solutions provider, FDL Packaging of Haydock, Merseyside, has unrivalled experience in single source packaging supply. For FDL Packaging, understanding the ebb and flow of its customers’ business is vital for establishing stock control objectives, delivery schedules

and ordering systems to ensure that all packaging needs are supplied ‘as required’ saving customer warehouse space, staff time and admin costs. KEEPING EVERYTHING IN STOCK SO YOU DON’T HAVE TO. Although FDL Packaging is, perhaps, best known for its own innovative range of fibre drums, the company also offers steel and plastic ranges to provide a comprehensive solution for any requirement. In all, FDL Packaging offers well over 1,000 different product lines from its four acre Haydock site, from small specialist laboratory containers to large bottles and drums for the safe transportation of a wide range of substances. And stock levels are constantly replenished enabling quick turnaround and ‘just in time’ deliveries.

FDL’S FORTE FOR FORTY YEARS. As FDL Packaging Managing Director Stephen Cunniffe remarks: “This is the company’s 40th year in business which we think speaks volumes for our uniquely flexible approach”. For more information about FDL Packaging Group, please contact the Customer Information Desk.

Published in association with: FDL Packaging Group Tel: +44 (0) 1942 722299 Fax: +44 (0) 1942 271 325 Email: sales@fdlgroup.co.uk Web: www.fdlgroup.co.uk

Factory of the month Eli Lilly

of extra capacity which translated directly into having more product available. “Quite a significant number of our employees have been involved in various teams,” says Critchley. “We also have a whole communication strategy. We have a video bulletin board onsite and we typically post updates on every project running. We really try and ensure that everybody understands how important productivity is to the organisation. We are also starting a yellow belt program this year to look at delivering the six sigma tools down to grass roots level.” Jon Westcott says another area of specific improvement has been the decrease in manufacturing deviations as well as a decrease in product rejection rates. “We’ve been able to demonstrate some significant reductions in those over a number of years, which have been the result of a range of different contributing factors including equipment improvements.”

Each year, the site invests close to £7m into facility infrastructure, of which a considerable proportion is spent on equipment. “We have made investments around development and new technology, and have also been investing relatively steadily across existing equipment lines to replace, where appropriate, equipment,” says Westcott.

We’ve seen an unprecedented rate of change, driven largely by the external market and the economics within the animal health industry Impending changes “The general environment that we are in is changing from an external perspective,” says Alan Spreadbury, referring to the increasing regulatory requirements within Europe for veterinary products which become part of the food chain — as well as greater competitiveness within the animal healthcare market. He says this has coincided with increasing demand for Elanco’s products in developing

Operations technician in control room

CCL Label CCL Label is a leading global supplier of decorative, healthcare and speciality labels to some of the worldsâ&#x20AC;&#x2122; largest pharmaceutical and consumer brand products companies, servicing The Americas, Europe, Asia and Africa.

his means we are in a position to offer centrally negotiated purchase agreements to customers under which we can produce and supply locally. Our aim is to supply our customers with fast and flexible labelling solutions, particularly in the manufacture of multi-language booklet labels, Expanded Content Labels, where each page can accommodate a different language. The compact nature of the ECL allows a great deal of text in a small area, which maximises pack flexibility and minimises product waste plus provide a safe and secure alternative to cartons and loose leaflets, hence the ECL format is the

preferred label product for Eli Lilly Animal Healthcare, Speke. CCL Label (Ashford) produce a variety of ECL booklets for the Speke facility, each booklet comes complete with a fully laminated finish, which not only protects the text content within the booklet but also enables resealability directly onto the pack for repeated use. ECL products have a wide range of applications and are ideal for flat packs or containers with tight circumferences. ECL booklets can be applied by hand or using standard labelling equipment on high-speed filling lines.

Eli Lilly/Speke and CCL Labels (Ashford) share the same ideal in that both companies are dedicated to a partnership approach in developing solutions together ensuring confidence in final product choice and sound supply management, resulting in a joint business relationship that spans more than 15 years.

Published in association with: CCL Label Tel: +44 1233 503 333 Fax: +44 1233 503 455 Web: www.cclind.com

Factory of the month Eli Lilly

markets such as Latin America and China. “We’ve seen an unprecedented rate of change, driven largely by the external market and the economics within the animal health industry,” says Spreadbury. “The impact on us as a site is really quite profound in terms of accelerating the changes that we need to make.” These changes have included a reduction in one of the site’s traditionally biggest product line. Whilst there are other new types of technologies and new product lines which the company are pursuing, Spreadbury says the transition requires focussed management. “We are having to deal with a lot of change where we are reducing in some areas and potentially increasing in others,” he says. “That change is something that is occupying a lot of attention. This involves a huge amount of in-house training. We are trying to manage some of the changes with our flexible temporary workforce, but permanent staff are also adapting as we move people from one area to another.” Continued focus on high levels of productivity whilst undergoing considerable internal adjustments will certainly test the capacity of Lilly Speke’s managerial team. However, with a firm grounding in operational best practice and the backing of a multi-national organisational structure, the site at Liverpool will undoubtedly rise to meet the challenge and continue to contribute significantly to the company’s overall success.

Eli Lilly and tuberculosis – a continuing battle

Tuberculosis

(TB) is among the oldest of all historically identifiable diseases. Under different names, confused with other conditions, and often misdiagnosed, tuberculosis can be traced throughout history and in many diverse civilisations. Pulmonary tuberculosis was known to the Greeks as phthisis, the word meaning “wasting away.” Hippocrates used the word to denote the inexorable, progressive, debilitating condition that seemed to affect primarily young people. Pale, emaciated, with difficulty breathing and racked by fits of coughing that sometimes produced flecks of blood, they died in the flower of youth.

Eli Lilly at a glance Contact

www.lilly.com

Sector

Healthcare products (human and animal)

Employees

600 (UK)

Turnover

£20bn (Eli Lilly and Company, Globally)

History

The Liverpool site was acquired by Lilly in 1963, having originally been built in 1945 to manufacture penicillin. Currently a number of different animal and human healthcare products are made on the site. Animal health care products are now proportionally more significant for the site.

Core products

Animal: products used for the treatment of livestock such as cattle, pigs and poultry to prevent numerous diseases including respiratory diseases and dysentery. Human: a treatment for multi-drug resistant tuberculosis, and a biosynthetic hormone which treats both adults and children.

Aughton Hire All these products are available for immediate hire Ranger PM7000. With Bluetooth Pocket PC. A comprehensive, high performance tool for all your P.Q. measurement needs. Easy to use, automatic measurements, water resistant. The cat IV 600v Phase A powered Power Quality Analyser. 8 Channels for Waveform Capture, at High Speed over 1Ms/sec (24576 samples per cycle at 50Hz). Druck DPI 620 Advanced Modular Calibrator (Calibrator only). A Compact and Powerful Electrical Calibrator. The DPI 620 electrical calibrator can measure and source mA, mV, Ohms, frequency and a variety of RTD’s and T/C’s. A HART digital communicator is provided for set-up and calibration adjustment of HART devices.

T & R 200ADM-P Relay Test System. 0-200A Output . True RMS metering with 1 cycle capture. Variable auxiliary ac voltage/current output with phase shift. Variable auxiliary output 12-220Vdc. Multifunction auto-ranging timing system. SPC Pro 3 Datalogger. The SPC Pro is the latest development in non-invasive 3 phase data logging and it makes the job simpler and safer than before. Based on the well-proven “3 currents, 1 voltage” hook-up, the only voltage connection it needs is a standard 13A wall socket. The unit comes complete with flexible hoop C/t’s, USB comms lead and software.

Factory of the month Eli Lilly

For a certain period, it was believed that the bacillus that causes tuberculosis in humans was originally transmitted to man by animals, particularly cows. But recently researchers reached the conclusion TB probably originated from an ancestral progenitor bacillus that infected the pre-hominids (apes) millions of years ago. In Europe and North America the spread of tuberculosis reached epidemic proportions in the nineteenth century. The slums of teeming cities became cauldrons for the incubation of TB, and, as they boiled over, the disease spread to the upper classes and into rural communities. TB is now a disease that is frequent and widespread and is especially prevalent in developing countries. It is estimated that over 90% of cases and deaths occur in such countries. Industrialised countries are not spared and TB is still present, causing thousands of cases in Europe and the US as well. In the developing world, TB incidence rates are highest in Africa, although about 60% of all cases of the world originate in Asia. Twenty-two countries are responsible for 80% of the global burden. These high-burden countries are India, China, Indonesia, Nigeria, Bangladesh, Pakistan, South Africa, Ethiopia, Philippines, Kenya, DR Congo, Russian Federation, Vietnam, UR Tanzania, Brazil, Uganda, Thailand, Mozambique, Myanmar, Zimbabwe, Cambodia, and Afghanistan. Iain Richardson, senior director, global supply chain and logistics at Eli Lilly says that “by the middle of the 20th century, the common perception was that TB was vanquished with antibiotics so it disappeared from most peoples’ consciousness. Little known to us was that TB was still active and was still being treated. However it wasn’t being treated appropriately and so resistance to treatments has developed. Multi-drug resistant TB (MDR-TB) has developed and by definition it is resistant to some of the first line drugs that are used to treat regular TB.” In 2002 pharmaceutical company Eli Lilly, who produce two MDR-TB treatments raised concerns about the growing demand for its MDR-TB drugs. In the same period, the World Health Organisation (WHO) also noticed a

Sharing a vision for the future SPIE Matthew Hall has been providing total Facilities Management services to Lilly UK since 1999.

e provide mechanical, electrical and air-conditioning maintenance, materials and engineering stores management, GxP cleaning, waste management, grounds, security and catering services across their Manufacturing, Research & Development and UK Head Office. In 2009, we were finalists in the BIFM â&#x20AC;&#x153;Corporate Occupiers Excellence in FM Teamâ&#x20AC;? award category that recognises the best FM teams in the UK and our working partnership with Lilly. Over the past 10 years, we have risen to the dynamic nature of continually changing requirements and challenges

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and have worked closely with Lilly to deliver a first class, high quality service. Further, in 2009 after a stringent period of negotiation, our contract was extended for a further 3 years with a possible two year extension. This award comes after many months of due diligence by Lilly that determined we were the best solution for them in terms of technical excellence, commercial solution and the way in which we understood and worked with Lilly to help achieve their objectives. The approach taken by Lilly and SPIE used the Six Sigma principles which

resulted in an award for Lilly for its complex project re-negotiating of the UK Facilities Management Contract. The new contract includes an innovative incentive scheme focussed on driving cost savings while maintaining quality, not just now but into the future.

Published in association with: spie matthew hall Martin White Tel: 0207 089 7350 Email: martin.white@ spiematthewhall.com Web: www.spiematthewhall.com

Factory of the month Eli Lilly

growth in instances of drug resistant TB. Discussions took place and an idea was developed for Lilly to partner with the WHO to help contain and ultimately conquer multidrug-resistant tuberculosis (MDR-TB), a disease so daunting that no single organisation can fight it alone. The result was the launch of the Lilly MDR-TB Partnership in Geneva in June 2003. In addition to the supply of medicine, Lilly has undertaken the transfer of its manufacturing technology and information to other companies so as to keep up with demand. At the time of the Partnership launch, Lilly produced two MDR-TB drug treatments: cycloserine, which is an oral drug; and capreomycin, which is injected. “We have successfully transferred our technology to a number of partners,” says Richardson. “Lilly’s goal was to find partners in the areas most affected by MDR-TB which are China, India, Russia and the entire continent of Africa. We have partners in South Africa, Russia, China and India and then we have additional manufacturing partners in Greece and the US.” According to Richardson, a decade ago Lilly supplied approximately 100,000 vials of the drug capreomycin. Last year the company shipped over 1,200,000 vials. “So demand has grown ten times in ten years,” says Richardson. “We don’t market this treatment. It is a forty year old drug. There is no commercial interest on our side in terms of trying to sell more of this. It is purely demand driven. We primarily supply to the WHO, with less than 20% going to commercial markets.” The WHO estimates 500,000 patients develop MDR-TB every

year. On average it may take 180 vials of capreomycin to treat one patient, one vial every day, as part of a lengthy regimen that may last up to two years. There are three injection drugs recommended in the WHO MDR-TB treatment regimen of which capreomycin is only one in the range. As Richardson says, the number of drug doses required to treat all cases is well beyond the production capabilities of any one single company. As a result of this realisation, Lilly decided that other partners would be needed to ensure adequate supply. “We believe that based on current demand, when these partners are all approved, the capacity for production will exceed the demand,” says Richardson. “However the number of patients that the WHO hopes to treat is so high that these partners should all have a very healthy level of activity for some time.” The current focus of the Transfer of Technology program is to obtain regulatory approvals for Lilly’s partners. Several of the partners hope to become approved by their local regulatory agencies this year and, as a result, a number of them will automatically become WHO approved. Those that don’t qualify automatically have to undertake another regulatory approval process with the WHO called the pre-qualification process. Lilly anticipates that either this year or next year, all of the partners will receive the necessary approvals and the project will launch in to full scale operation. end

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Health supplements Seven Seas

Navigating stormy waters

Hull-based Health supplements manufacturer Seven Seas has a rich heritage in the UK and, as market leader, its name is near synonymous with many of the goods it makes. Mark Young explores what measures the company is taking to secure its status at the pinnacle of its industry following the squeeze of recession.

With

a history that this year spans three quarters of a century, the Seven Seas brand is truly ingratiated into British society as a household name. A staple supplier of fish oils, women’s health products, children’s health products, probiotics and multi vitamins to the major supermarkets and leading high street pharmacies and health chains, its 18% share of the UK vitamins, minerals and supplements market puts it well in front of its chasing pack of competitors. With a heritage that will next year reach three quarters of a century, it’s brands – including Seven Seas Cod Liver Oil, Seven Seas Joint Care and Haliborange children’s range – have become to healthcare supplements what Heinz are to ketchup: others are available, but for most the choice is superfluous. “There’s something iconic about Seven Seas,” muses the company’s operations, supply chain and R&D director, Andrew Shaw. Market intelligence would seemingly agree. The company won Boots Customer awards for Best Joint Supplement, Best Children’s Omega 3 and Best Multivitamin in 2009, to add to the Best Adult’s Omega 3 award it won in 2008. The mature UK market is still Seven Seas’ largest in terms of current sales, but the gap between domestic sales

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Health supplements Seven Seas

and exports is narrowing. The firm now roughly has a 55/45% split of the 30 million total units it annually produces between products sold here and those sent abroad. As recently as two years ago that figure was more like 60/40%. The firm’s main export market is the Republic of Ireland followed by areas of Africa, the Middle East and the Caribbean. It does not generally supply to Western Europe or North America because, as part of the German Merck KGaA group, it does not compete with its sister companies that are based in Germany, France and the USA. Other export opportunities have been divided among the companies within the group to ensure there is no in-group competition in emerging markets. Seven Seas has its own oil refinery on site – something that gives the company bragging rights over all of its UK competitors – and produces all of its syrups and tonics from scratch on site. For all liquid products, it can carry out all of the necessary testing to satisfy a raft of local, European and global regulations on site, including analytical tests which it performs in its on-site laboratory.

Since TM last spoke to Seven Seas around 18 months ago, the firm has increased its Overall Equipment Effectiveness from 43% to 60%. It has now realigned the metrics it uses to measure OEE in line with new production processes and, in real terms, Shaw estimates a further 13% improvement can be added to this figure. “Last year we did more

Communication is so important – if you can tell a good story and you can sell it to people they’ll give you a chance and they’ll work with you. And if you can make them feel really part of it – genuinely involved in it – and allow them to take responsibility for it then they’ll own it. Communication has to be perfect changeovers than ever before, did them faster and still increased OEE,” says Shaw. “It’s a ringing endorsement of the quality of the work we’ve done over the last year.”

Harder, better, faster, stronger Seven Seas has implemented what Shaw describes as an “ingrained culture of continuous improvement”. With a commitment to the lean principle of 5S (Sort, Set

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Visit: www.seven-seas.com

Children’s Health

FOR YOU FOR LIFE

Everyday Health

Women’s Health

Healthy Ageing

Health supplements Seven Seas

in order, Shine, Standardise, Sustain), the company is carrying out an inexhaustible list of measures to make its practices across all operations more efficient. Instrumental to this cause has been the use of cross functional continuous improvement teams – collectives of workers from across different departments of the business which unite to find solutions to any individual problem. Cross functional teams have been used on a diverse range of projects including operational alterations, packaging changes and marketing drives. “We used to have a very functional organisation with not much cross over. That’s very much not the case now,” says Shaw. “The days are gone where one department can fix a business problem. We’ve found we get a far deeper understanding and much more effective solution by utilising all of the know-how that we have across the company instead of just relying on a narrow vision from one particular area.” As Shaw spoke to TM, a room full of employees from across all of the factions under his wing were together working on a project to find ways to improve the flow of materials from

Last year we did more changeovers than ever before, did them faster and still increased OEE. It’s a ringing endorsement of the quality of the work we’ve done over the last year goods-in through to the production line. The team included personnel from goods-in, quality, planning and production. The aim of the project is to get goods onto the production lines with fewer stops, maximising flow. With materials currently passing through a number of different departments, Shaw’s concern is that unnecessary handling is taking place and that responsibility has been dissipated.

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Health supplements Seven Seas

“The supply chain ignores functional barriers,” says Shaw, “it’s all about flow. Raw materials come in and the next value-add is when they are converted into finished product. Our value stream mapping told us there was a lot of waste between goods arriving on a truck and then entering the production process. How do we make checking and systems faster so there’s less time wasted? The project is also included in the annual objectives of the key stakeholders which means there has to be an outcome. They have a vested interest in making it work.” In a previous initiative, valuestream mapping carried out by a six-strong cross functional continuous improvement team illustrated significant opportunities for increased efficiency in process time. Changes that were made including the removal of in-process testing, significant work in progress and over processing have brought processing time down from 64 hours per batch of 450kg to 24 hours. In addition, analytical time was reduced across the whole year by 700 hours. The company has halved the time it spends on changeovers compared with a year ago through a mixture of SMED techniques (Single Minute Exchange of Die) and man-management. The continuous improvement team analysed who was doing what, how they did it and how long it took them during changeovers and found that many of the tasks involved could be carried out by line operators rather than

engineers, leaving the latter free to work on breakdowns and line improvements, thereby adding value. “We had the engineers train the team in the techniques and then ran the exercise with a video camera, stopwatch and clipboard and then sat down and worked out how we could do it faster,” says Shaw. Subsequent changes included the implementation of thumb screws to negate the need for

(Launching the Femibion range) was a brave thing to do during recession but we felt that we’d worked hard developing the range and that our heritage gave us a strong base to add to even though times were tight,” says Shaw. “We are in it for the long term – that’s Merck’s philosophy. The Group is more interested in enduring growth rather than short termism tools, a colour coordination system of individual parts, and user-produced manuals. Shaw says the massively reduced changeover time has been a key part of a reduction of finished goods inventory by a third in two years. This is especially important given that Seven Seas’ products can by no means be counted among conventional FMCGs’ like food manufacturers’. “Our smallest packs will last for 28 days and many customers now prefer to buy in bulk quantities of 90 or even 120,” says Shaw. “This means consumers may only be in the market three or four times a year and that means we may have to hold on to stock.” A commitment taken to measuring the performance of all operations and quantifying the effects of changes is one of the most important aspect of any efficiency programme, Shaw says. “When you start to understand where cost is you start to work much harder at driving it down. We’re now much more cost conscious and we quantify everything with data. We log issues, put names next to them and then review them. When you’ve got data on what’s working and what‘s not you can tackle the problems. “The initial reason you come up with why something continues to fail isn’t probably the real reason; you have to keep working at it. We do genuine root cause analysis with standard problem solving tools and then we challenge ourselves to put 100-year fixes in place rather than just papering over the cracks.” Communicating that knowledge is critical if a company is to gain support from its employees and avoid change initiatives becoming regarded as a management fad. “If there’s a compelling reason why we can do things better and you communicate it well, people will buy in and own it. It becomes something employees do because they want to, because they know it makes the line run better and the factory more efficient and essentially makes everyone’s jobs easier and everyone more successful. “Communication is so important – if you can tell a good story and you can sell it to people they’ll give you a

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Keystore Hull Keystore - Hull operates a seven hectare site with over 30,000 square meters of covered storage facilities which is adjacent to one of Hull’s two biggest general cargo terminals.

hile our location is an advantage our success is firmly based on determination, quality and flexibility of service demanded by a constantly changing market. This makes Keystore – Hull not just warehouse operators, but also property developers. Keystore – Hull can offer to customers the unique opportunity to take advantage of either

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serviced warehouses and offices or the Keystore operation. Our flexibility is reflected in the cross section of customers ranging from food manufacturers, pharmaceutical and toy industries through to commodity storage for The London Metal Exchange.

Plans are continuing to redevelop the site whether it is the refurbishment of existing warehouses or new developments, either for Keystore’s own operation or tailored to specific customer requirements.

Working relationships develop to the level of design and construction of food grade warehouses totalling over 10,000 square meters on site.

Published in association with: Keystore Hull Tel: 01482 222 481 Fax: 01482 585563

Health supplements Seven Seas

chance and they’ll work with you. And if you can make them feel really part of it – genuinely involved in it – and allow them to take responsibility for it then they’ll own it. Communication has to be perfect.” As part of an international group, measuring its performance is also important if Seven Seas is to convince its owner that it is good value for investment. The company recently agreed a five year investment plan with Merck which will include capital expenditure to the tune of £10m on site infrastructure improvements and facilities including line rationalisation, packaging equipment replacement and capacity improvement as well as meeting customer needs such as SRP capability and automated high speed measuring device insertion. “You have to prove why you’re a good case for investment,” says Shaw. “Our investment plan has been agreed with the Group on the basis of promises we’ve made regarding delivering back more efficiencies in terms of cost structure and a significant reduction in inventory as a result of the capital expenditure.”

that’s Merck’s philosophy. The Group is more interested in enduring growth rather than short termism.” Shaw says strong branding and promotion – reiterating the company’s commitment to quality, reminding

The initial reason you come up with why something continues to fail isn’t probably the real reason; you have to keep working at it. We do genuine root cause analysis with standard problem solving tools and then we challenge ourselves to put 100-year fixes in place rather than just papering over the cracks consumers of the Seven Seas heritage and clearly communicating the benefits of the products – has been of paramount importance in reinforcing the customer base during the downturn. However, he feels unnecessary bureaucracy and red tape from regulators may stifle the company’s ability to effectively get the right messages about its products out to customers. “The market we operate in is increasingly regulated on a local, European and global basis on top of the self-

Current conditions Recession has provided Seven Seas with two major strains. Firstly, owing to foreign ownership and a global supply base the company is sourcing a significant amount of raw materials in overseas’ currencies. With the pound struggling against the dollar and falling to almost like-for-like value with the euro, the company has seen its bottom line squeezed. Secondly, as a premium brand, Shaw says the company has had to work hard to convince customers that the products are worth paying extra over value products in a time when expendable cash is reportedly lower and consumers are more cautious with how they spend. Nevertheless, last year the firm launched an exclusive women’s personal care range called Femibion which includes nutrients to help with pregnancy and general women’s well being. “It was a brave thing to do during recession but we felt that we’d worked hard developing the range and that our heritage gave us a strong base to add to even though times were tight,” says Shaw. “We are in it for the long term –

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A feather in the cap Swiss Caps, a member of the Aenova group, is a full-service contract manufacturer for solid dosage forms for the pharmaceutical and healthcare industries.

he company’s core competencies are high quality products with good customer service at a competitive price. In 2008, the company won a tender to supply dosage forms to Seven Seas, for its flagship Joint Care range of products and began supplying six different products in 2009.”These are very complex combination products,” says Swiss Caps UK General Manager, Anthony West. “One of our specialties is that we are very good at making complex suspension formulations in a very competitive manner.”

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With its head office and encapsulation plant in Kirchberg, Switzerland, the company produces gelatin and gelatin-free soft capsules. Swiss Caps also features a state of the art, GMP approved encapsulation facility in Cornu, Romania, where the Seven Seas products are manufactured. Swiss Caps also supplies OTC products to the Merck group, parent company of Seven Seas. According to West, Swiss Caps “can offer not just contract manufacture but also full-service project management in terms of product development and product transfer from another

company.” Since beginning its work with Seven Seas, Swiss Caps has formulated and recently launched the Joint Care Complete product. This new product was formulated, developed, tested and delivered within four months in close cooperation with the Seven Seas technical and supply chain teams.

Published in association with: SWISS CAPS UK Ltd Anthony West, General-Manager

Tel: +44(0)1302338220 Web: www.aenova.de

Health supplements Seven Seas

regulation we adhere to through trade organisations. If you make a claim about health on your products then quite rightly governments want to check up. We are entirely supportive of this – you can’t allow companies just to make health claims without regulation and we welcome the barriers against untoward companies making claims that are patently not true. But what we want is a balance to that approach. “The consumer has to be able to trust that health benefits do exist but there has to be care not to put red tape in there. The regulation should be appropriate to the consumer so that they are well informed and can make the choice about the right product for them. If we are stopped from using plain English to explain to people the benefits of our products then they won’t know. We need to be able to tell the truth in simple enough language to educate people – ‘this will help with this, this will help with that’. You select products yourself in our market so the packaging has to tell you about it. If we’re overregulated we can’t tell you and you can’t find out. “Ultimately, if you are using good supplements and they work then you are healthier. If we are burdened with unnecessary regulation the health service could be burdened with unnecessary cost.” Uncertainty over supply base has also been a concern over the last couple of years. “With some firms merging because of poor trading conditions and some going out of business altogether, we’ve had to keep a careful eye on what’s been happening,” says Shaw. Luckily though, most of the firm’s key suppliers have remained strong and the company is also benefiting from an extra astute approach that it has adopted in recent years when adding to its supply base. Examples of successful partnerships that have been formed in the last

two years include those with Aenova Group – a contract manufacturer that produces some of Seven Seas’ soft capsules – and Agrigum, a supplier of Acacia powder which first formed a relationship with Seven Seas by passing it technical information. Within the last year Alpex – supplier of effervescent tablets – has also been added to the supply base and Shaw commented especially on the company’s flexibility. “These are three examples of strong partnerships which we’ve formed that have definitely relieved some of the uncertainty that recession has brought us regarding our supply chain,” he says. Like most manufacturers, Seven Seas is still finding itself in stormy waters despite recession having ended, if official indicators are to be trusted. However, the company’s business is making people healthy and it seems to be doing all it can to secure its own long term fitness. Tenacity, it seems, is just the tonic. end

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Heavy engineering DavyMarkham

big

The good, the Sheffield is home to one of the biggest engineering workshops in the Western hemisphere that dates back 180 years. It is where the world’s tunnel boring machine makers and mine operators come to have the heavy-duty components manufactured that few other workshops can handle. Will Stirling gets a taste of fire and steel at DavyMarkham.

and the ugly

Step

in to the 175,000 sq ft main workshop at DavyMarkham and you step into another world. This is proper heavy engineering, the type of company that few people who live south of Birmingham are aware even exists in modern Britain. Here, giant 350-tonne-rated gantry cranes move high above your head, teams of skilled welders work on vast components like the cutterhead for a tunnel boring machine or a hoist assembly for a gold mine, complex machines cut and shape heavy metal in oil baths. Everything is big. “Our motto should be: if it’s big and ugly, we love it,” jokes managing director Kevin Parkin, the man who has led a sweeping culture change and performance improvement programme at the Sheffield-based company. Mr Parkin is right – while ugly is a matter of opinion, this is where companies from across the world – China, India, Korea, Canada – come to have very big, specialist steel equipment fabricated, tested and reconditioned. DavyMarkham is one of the biggest engineering workshops in Western Europe operating some machines on a near unique scale. “The tandem lift can lift 350 tonnes, very few companies in Europe can lift as much,” says Parkin. “We can fabricate components up to 1,100 tonnes, but we’re restricted by what we can take on the road – the bridges to Immingham, the nearest deep water port, are rated up to 400 tonnes.” While international competition for some contracts is intense, the number of companies which can match these facilities is small. DavyMarkham (DM) has one of the largest horizontal turning machines in the world, which takes

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SEW Eurodrive Yorkshire Water chooses SEW Eurodrive for Key Upgrade.

EW Eurodrive has always been renowned for supplying quality gear units, motors and drive electronics. However, the ability to combine these quality components and install them on site has historically been left to other companies. The expansion of its service centre facilities and the introduction of dedicated site teams has allowed SEW Eurodrive not only to supply products but to take on complete onsite installation projects demanding the highest service levels. This can include all products from SEW Eurodriveâ&#x20AC;&#x2122;s extensive portfolio, including standard geared motors, industrial gear units and electronic drive controllers combined with special components and thirdparty items.

This has resulted in SEW Eurodrive being awarded a number of major installation projects across the UK. An example of the type of project now being undertaken by the service team is a recently-won contract for replacement drives at a Yorkshire Water sewage treatment site in Rotherham. This extensive site was fitted with 42 aeration drives of various manufacture, age and reliability. The severe flooding in June 2007 then resulted in an unacceptable number of failures of the gearboxes and motors installed on the site. In order to provide the best service to its customers, Yorkshire Water made a strategic decision to upgrade the whole site including the aerator drives at a total cost of ÂŁ4.5m. To do this, it needed to find a trusted partner it could rely on to both manage the project and complete the installation within the required timescale. Yorkshire Water selected SEW Eurodrive as its partner for the key modernisation of its Rotherham site - despite strong competition from other major gearbox manufacturers - due to its ability to fulfil all aspects of the project in-house. The project involved supplying 42 flange-mounted helical gearboxes

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with a maximum torque rating of 4000Nm, fitted with 11kW, two-speed, energy-efficient motors. New bedplates had to be manufactured so the new drives could utilise the existing aerator fixings and the output couplings had to be re-worked to the new specification. SEW Eurodrive dedicated two service engineers to the site for two months in order to complete the project successfully. The project was completed to Yorkshire Waterâ&#x20AC;&#x2122;s usual high standards and is now running, trouble-free. If you are considering upgrading your existing plant and you wish to engage the resources of a quality partner where service is key, then SEW Eurodrive is the company to choose.

Published in association with: SEW Eurodrive Tel: +44 (1924) 893855 Fax: +44 (1924) 893702 Email: sales@sew-eurodrive.co.uk Web: www.sew-eurodrive.co.uk

Heavy engineering DavyMarkham

components up to 20ft in diameter, and 39 cranes operate here daily.

Rolling up the sleeves The company dates back 180 years, when Davy Engineering was founded in Sheffield in 1830. It merged with Markham of Chesterfield in 1997 and has been through several acquisitions including that by Norwegian group Kvaerner. In that time, it has built up a worldwide reputation for manufacturing components in sectors including mining, quarrying and tunnelling for parts like mine hoists and cutterheads; civil engineering, including moving components for structures like the Millennium Bridge and Thames Barrier; hydroelectric equipment like water controls; power generation components like the nuclear shield doors at Sellafield, as well as several, non-sector specific one-offs. Big, however, was not always beautiful. The company is going through a change programme, devised by Parkin and finance director Duncan Hay when they joined nearly four years ago. They presided over a management buyout financed by private equity firm Endless when the company was in poor shape. “The options for the business in 2006 were take the MBO or face closure,” says Parkin. “But we showed this is a sound business with a future. We broke even within a year. Endless wrote the cheque within four weeks of submitting our proposal,” referring to an investment that since has been repaid in spades. At the time, DM’s industrial relations were poor, growth potential was being hamstrung by non-existent internal communications and poor dialogue with the main union, Unite, and there were many operational inefficiencies. Gradually the change management programme has brought sceptical staff around and delivered measured operational efficiency improvements. The first step in this corporate culture journey was engendering a strong sense of health and safety awareness. “Safety is the first priority in the business, there is nothing more important,” says Parkin. “Every person in the company is authorised to stop a job if they feel it’s unsafe or don’t understand what they’re doing. This way we’ve got people more involved in risk assessments, so they understand these and the precautions to take to minimise that risk.”

Like many successful UK manufacturers, Parkin and his team realised customer performance was the primary pillar of improvement for the company. “Three years ago our delivery performance was running at 20 per cent,” he says “We thought it was important that everybody knew the customer requirement, so we now publish the delivery date required by the customer all over the shop floor. Last year we averaged 95 per cent on-time delivery. We’re targeting 100 per cent but we’re delighted with the improvement and the shop floor has supported us here.” Shop floor staff now understand regenerative business; that the company has to persuade customers that it can produce the next order, so that they automatically return to DM, and their most important metric was on time and the right quality.

Engineering change On the factory tour, we pass a huge casting being machined, destined for an extremely large press. DM machines these vast components to very high tolerances. “There is a 300-tonne casting, with circumferential squareness of 60 microns and cross-dimensional tolerance of 60 microns, on a piece of metal that’s as big as a bus,”

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Pennine Industrial & Welding Supplies Ltd Pennine Industrial & Welding Supplies Ltd., part of the ISS group, are pleased to be associated with Davy Markham Ltd.

SS’s knowledge of our customers’ businesses, understanding of product developments and experience of working with a wide range of processes and materials makes us the UK’s leading solutions provider for the industrial sector. With over 100 outlets across the UK and Ireland, including our Leengate and BOC retail stores, ISS has an indepth understanding of the different pressures and demands experienced by customers all over the country. The strengths of ISS give customers a key partner who can deliver fully integrated solutions through the UK’s biggest distribution

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network. With experienced professionals who constantly strive to find new efficiencies, ISS seek out new, more productive partnerships and provide more competitive advantage for their customers. ISS provide a first class service offering, from finding the right sprocket for a workshop to designing and delivering bespoke supply chain solutions for the UK’s biggest operators, we meet the customer’s needs on every level. And when technical problems arise, we can always find a solution, whether this means providing training and support or designing an entirely

new product, technique or process. Whatever the issue is, and whatever part of the workflow process it arises in, ISS has the knowledge, experience and resources to solve it and help customers work more productively.

Published in association with: Pennine Industrial & Welding Supplies Ltd Unit 3, Gildersome Cross, Gelderd Road, Gildersome, Leeds LS27 7BF

Tel: 0113 2380898 Fax: 0113 2380874 Email: pennine@boc.com

Heavy engineering DavyMarkham

says Parkin. It’s this juxtaposition between the scale of these products and the fine accuracies to which they are made that really strikes you. Everyone seems busy and while there is always the need to find new business, Parkin is upbeat about the pipeline. In March, DM became the first tier two partner for the Nuclear Advanced Manufacturing Research Centre at nearby Waverley Park. It means when contracts for Britain’s new nuclear industry start tendering in earnest, DM has a prominent place in the queue. We stop to admire a hoist housing for a goldmine in Canada – the hoist will lift and lower several tonnes of kit and people one mile in the ground. “The client is IM Gold, this is the second one that will be shipped. It’s great work for us. Yesterday we received another order from a different organisation in Canada for £4.5m with more work to follow. There is no question that much of the North American work has come from our success with the LaRonde mine project. We’ve proved that we can deliver on time, and that we produce a safe product that will work for years,” says Parkin. Four years ago, operational inefficiencies here were rife. The system today is that if the engineers are not working for 30 minutes they tell management why, so downtime is analysed. “At first we struggled to understand why we had bottlenecks and efficiency was so low,” says Parkin. “It was because the previous management had taken out indirect workers, the labourers and tool room workers. Skilled guys on the machines were spending time clearing up, sweeping up and finding tools. We reinstated the indirect workers and efficiency greatly improved. Now we analyse downtime on a daily basis, and publish it to tell everyone.” DM has also invested in a 5S system which Parkin says is working. All the machine areas have clean tool boards now and they identified and removed a lot of surplus tools, such as redundant imperial gauge wrenches. We look down into the assembly pit. It’s 17.4m deep from the top of the hook to the pit’s floor, a unique facility to assemble and test very large assemblies before they are shipped. “We can lift 250 tonnes in here. We bring in our own or a third party’s component in as assemblies, and trial assemble them here

to ensure that everything goes together and is tested before it goes out to, e.g a nuclear power station or an oil rig so make sure everything works properly. The last thing you need is to have a component return to the workshop.” DM made the control tower for Heathrow Terminal 5 in canisters, which were assembled here to make sure it was perpendicular before despatch. Tooling: Aside from contracted fabrications, DM does a lot of reconditioning and remanufacturing work, as well as research on machine tools performance, testing for most of the leading tool manufacturers. “It’s all about removal of metal efficiently,” says Parkin, who is both a qualified engineer and accountant. “It’s a balance between cutting efficiency and changeover of tools that wear. The coating of the tool surface is so important. There are non-stick wear resistant surfaces, surfaces that won’t allow the cutting plasma to stick to the tool, and to take the heat away from the tool as fast as possible down the swarf. There are big challenges with this work, and our facilities help the tool makers.”

Your greatest asset Parkin is particularly passionate about DM’s apprenticeship scheme and the work the company has done with local schools. It’s something he knows a lot about – since joining, 18 apprentices have joined DM, the company is involved in Sheffield’s Workwise scheme for getting schoolchildren into local companies and he advises Sheffield Council on skills. “We’ve delivered our own

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Heavy engineering DavyMarkham

DavyMarkham at a glance Location

Sheffield, South Yorkshire

Sector

Heavy engineering

Size of facility

Manufacturing area 16,258sqm. Max. craneage capacity 350 tonnes. Machining – max. length 14m, max. diameter 12.9m

Employees

200

Turnover

£20.6m in 2009

Key products

Hydro, mechanical handling systems, mine hoists, moving bridges, press refurbishment, TBM components, test rigs.

Key markets

Mining and tunneling, nuclear, oil and gas, power generation, steel bridges

apprenticeship scheme with no government assistance — much of that funding is absorbed by quangos,” says Parkin. “Apprentices are a crucial part of your capital investment. Our age profile is certainly skewed towards the 50s age group. Four years ago the average was 49, but by bringing on apprentices we’ve brought that down to about 44. There is more to do because some of these guys in the next ten years are looking to retire — we’re keen to cover for that, but more importantly to pass those skills on as quickly as possible.” Six months ago DM’s apprenticeship scheme received approval from the Institute for Mechanical Engineers, which means time-served DM apprentices will have IMechE initials by their name. The next step, Parkin says, is to develop fasttrack qualifications, including a part-time 46-week HNC and a part-time three year mechanical engineering degree, both on college day release. This will consolidate the interest that DM is picking up from more school visits, as part of Sheffield’s Taskforce project. “With this initiative, with other local companies we’re showing parents of 16-year olds there is a real alternative to university, where traditionally young people have blindly followed a route that does simply does not guarantee a good job in today’s world,” Parkin says. A pilot was launched in February and DM intends to put 100 local schoolchildren through company visits in 2010. A word of caution he has for schools is the compatibility of basic education to employers’ needs. “We support schools but I must say some of the apprenticeship intake we have need a lot of help from us with basic maths like geometry, and even English. It is time-consuming and an issue – schools need to raise the bar on basic maths for 16-year olds.”

Tomorrow looks bright for one of the UK’s oldest and most versatile engineering companies. More North American companies are making enquiries for mining and quarrying equipment, and Parkin is hopeful that DM’s association with the Nuclear AMRC will reap dividends when the utility companies start placing contracts. “We are getting many enquiries and we have had several quality assessments from the players in UK new nuclear, so we are excited.” Meanwhile, DavyMarkham continues to build bridges – both literally and metaphorically, as it reaches out to teach schoolchildren the meaning of modern, but traditional, manufacturing and the skills they can learn for a sustainable future career. end

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Wenham Engineering PRECISION ENGINEERING EXCELLENCE

enham Engineering is a specialist in contract manufacturing, tool making and precision engineering of press tools, jigs & fixtures and special purpose machines. Since 1986 Wenham Engineering has continually expanded into new fields. Today we are leading the field in the design and build of special purpose machines, test fixtures and prototypes for the electronics, telecommunication, pharmaceutical and general engineering sectors. Our commitment to our customers is

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simple. Firstly, we continue to offer and maintain competitive priced products and services to the demanding requirements of the modern manufacturing/ engineering sector. Secondly, we assure you of our highest standards and maintain high levels of quality through the introduction of recognised quality standards. Finally, we always strive to achieve complete customer satisfaction for our entire client portfolio. Whether we are working with a large blue chip account or smaller local business, we offer the same professional service to all.

This is why Wenham Engineering is Kelvin Hughesâ&#x20AC;&#x2122; partner for contract manufacturing of component parts and has been for the last two years.

Published in association with: Wenham Engineering Tel: +44 01279 426120 Fax: +44 01279 444800 Fax: sales@wenham.co.uk Web: www.wenham.co.uk

Marine technology Kelvin Hughes

On the

radar With a history that dates back to 1750, Kelvin Hughes is at the forefront of the high technology marine manufacturing sector. Tim Brown discusses the company’s marine electronics division with director, Martin Taylor, and operations manager, David Bassett

Kelvin

Hughes is comprised of two separate equally sized divisions: charting and marine electronics. The charting element is effectively a distribution service which involves the purchase of paper charts and electronic mapping data which are on-sold to both the Leisure and professional shipping market — consisting of vessels larger than 1500 tonnes. The company is also currently diversifying in to bird spotting equipment for use at airfields as well as sophisticated vessel tracking systems for use in controlling harbour shipping traffic. In comparison, the marine electronics component of the business involves the design, manufacturer and assembly of equipment for use on both military and commercial ships. The company’s primary product group are marine radar systems, but Kelvin Hughes’ offerings also include electronic chart displays, black box recorders for ships and a range of other equipment required on a ship’s bridge. “The radars are primarily assembled in the UK,” says Taylor. “Our plant might be considered a final boxing house, but there are some things that we do make from scratch and manufacture from basics such as radar antennas.” With the bulk of the components sourced from outside of the UK and 80% of its products exported, Kelvin Hughes has established a global presence and has offices established in the world’s major commercial cities including

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CRS Electronics CRS ELECTRONICS is proud to have been a supplier to KELVIN HUGHES now for over 30 years and wish them every success for the future.

e at CRS have been contract manufacturing now for over 37 years. CRS continues to work to the highest standards of manufacture and service. Our service is a “One Stop Shop” from concept to finished product but we can do as much or as little as required, we don’t just make it for you we make it easier for you. After so long in the Business we have a deep understanding of the design, service and flexibility that is required by our Customers. As once said by the Executive Manager of Procurement at Kelvin

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Hughes: “The relationship that has developed is continually focusing on the elimination of cost drivers and waste on both sides as well as maintaining high levels of service and quality. CRS are an extension of Kelvin Hughes in many respects.” “Some of the most important factors in sustaining the relationship have been their flexibility and responsiveness in a dynamic change environment and their continued investment in new equipment and processes aimed at providing cost effective solutions.”

“The breadth of manufacturing capabilities, from low volume conventional PCB assembly through to high volume complex surface mount assemblies, box build and test make CRS a versatile supplier to Kelvin Hughes.” Published in association with: CRS Electronics Tel: 01920 871061 Fax: 01920 870110 Email: sales@crs-electronics.co.uk Web: www.crs-electronics.co.uk

Marine technology Kelvin Hughes

Copenhagen, Rotterdam, Singapore, New Orleans and Washington. Such a global supply chain includes a definite requirement for special care when moving what can often be sensitive equipment. Transportation is therefore of paramount concern at Kelvin Hughes. In addition, says Taylor, when economic conditions were better the company was afforded approximately a month to deliver and fit a product such as a radar. “Now our customers have much tighter expectations,” he says. “We may now take an order and ship it in the same day for fitment the following day. We have a service organisation around the world that looks after that.” Over the last 18 months, Kelvin Hughes has improved its completed on time delivery from 30% to 95%. The company has recently noticed a significant improvement in market interest and an increase in orders for both the new installation and retrofits markets. Indeed, from July 2007 to present Kelvin Hughes has seen a growth in sales revenue of 37% and an increase in profit of 75%. In 2007, mitigating supply and transport issues, Kelvin Hughes engaged transport and logistics specialists, Global Logistics Management (GLM), to manage the company’s freight requirements. Since outsourcing supply chain management to GLM, Kelvin Hughes has experienced a marked improvement in both its delivery capabilities and customer satisfaction levels Andy Berry, managing director of GLM, highlights that it was a careful process of internal examination which allowed for such a stark improvement. “We spend time with the customer identifying any problems or delays, both with the customer and their clients, and that is exactly what we did with Kelvin Hughes. “At the time when we joined, the failure rate on particular product, in terms of distribution, was quite high. So they swapped that product over to us to manage and we had a 100% success rate over a six month period. We were then asked to look at other areas within Kelvin Hughes. We looked at the processes that they had in place and have since taken a hands-on role within the company, which has allowed the offices around the world to concentrate on sales rather than having to manage the behind the scenes processes.” Moreover, the competent delivery of technically complicated products requires the successful construction

Kelvin Hughes at a glance Location

New North Road, Hainault, Ilford, Essex

Contact

0208 502 6887 www.kelvinhughes.info

Sector

Radar and navigation equipment, and mapping

Employees

360

Turnover

£80m

History

The company’s origins date back to 1750 but it was truly formed in 1800 through a partnership between Lord Kelvin and Henry Hughes. The main focus of the company was originally marine clocks which led the company into the marine charting industry. In November 2007 the company, which was a part of the Smith’s Group aerospace division, underwent a management buyout and is now part of the ECI venture capital group. The company has now also diversified into the marine electronics industry and manufacturers products such as radar systems for civilian and naval applications.

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GLOBAL LOGISTICS MANAGEMENT LTD EQUIPMENT LOGISTICS - WORLDWIDE “It’s fair to say that the work we do for Kelvin Hughes is a real challenge!” says Andy Berry the Managing Director of Global Logistics Management Ltd (GLM) speaking about their customer, Kelvin Hughes Maritime Industries.

also a true logistics solution. To give you an idea we’ve recently helped their Singapore office to reduce cost and improve efficiency by meeting with the team there and helping them re-work their distribution programme.”

“If you look at all the elements it demonstrates the complexity of the work. There is fragile electronics equipment which is, in some cases, military specification, that has to be shipped to scores of International destinations, all on a timed service!”

As well as their work with Kelvin’s, GLM also manage the logistics for clients in the sports marketing business and in particular, Formula 1 as Andy explains;

Andy continues; “We’ve really worked hard with Kelvin Hughes providing not just a shipping and courier service but

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“We’ve been involved with clients like McLaren, Shell and Johnnie Walker for a long time and we have staff at all F1 events through the year. A lot of the work is bespoke as the client’s are all looking for different things from their marketing

efforts. Some of our team are currently at the first F1 event delivering equipment to hospitality suites and also managing the installation of a full size replica F1 car for a sponsor’s party.” “There really is never a dull moment in this business, but we love it!”

Published in association with: GLOBAL LOGISTICS MANAGEMENT LTD Tel: + 44 (0) 1753 689698 Web: www.globallogistics.co.uk Email: info@globallogistics.co.uk

Marine technology Kelvin Hughes

of the equipment itself. The comprehensive procedures Kelvin Hughes have introduced to ensure quality control stem largely from the harsh environments in which their products are used. “Products are put through what we call a burn in period, in which we subject them to elevated temperatures for up to 200 hours,” says Bassett. “This follows the classic ‘Bath Tub’ curve theory which states failures occur in the early stages and once passed will go into the mature phase where the chance of failure has substantially reduced. The failure rate then increase again at the end of its life. “So what we try to do is establish the failures that occur at the first stage as quickly as possible. One of the ways of doing this is by subjecting the unit to different levels of heat up to 50 degrees. We try to eliminate these early failures. For everything that we make to be approved to go on to a vessel, there is a criteria that it must be able to operate in temperatures of up to 55 degrees and down to minus 40. Where the vessels are operating, they could be in Canada where it is about minus 30 or in the Middle East where it could be plus 40. The aerials that work on top must also be capable of operation in 100 knot winds. The heat testing we do is also therefore about helping us ensure that we can meet those criteria.” One of Kelvin Hughes most important recent equipment developments is a new radar, named Sharpeye, which is establishing an important niche for the company. Compared to traditional radars which use high-voltage lifed components, the new technology uses solid state technology that is capable of operating at much lower voltages, has no lifted components, produces better performance and requires less maintenance. “The response from the field for this new radar has been exceptional and customers have remarked that this new radar is the best they have seen,” says Bassett. Aside from technical product developments, the company has also implemented considerable continuous improvements which have seen it achieve important operational changes. “We are implementing training in business improvement techniques, which involves six teams of 10 employees who complete five half-day

sessions around lean topics and business improvements,” says Bassett. “Essentially, they learn the principles of lean which are expanded so as to be applied to the business. After they have done their initial training, they will identify a project that requires lean improvement and the employees will learn further through application. This has followed from a successful pilot scheme where 10 staff all passed and achieved their NVQs and the business received some good advantages out of it.” Currently the company has 120 staff undertaking business improvement techniques training. “An example of the improvements they made was the elimination of waste from the cable cutting process” says Bassett. “We have to supply various lengths of installation cables were each customer has different requirements therefore unable to fully utilise the quantities on various drums. The teams came up with the idea that we could simply get the cable delivered in cut lengths which we have now organised. This has not only reduced the waste but has also reduced the work involved for the packing staff.” Laying testament to the high regard in which Kelvin Hughes is held within the Marine industry is an order book that includes consistent custom from not only the world’s largest shipping companies, but also various Navies. The development of new products such as ‘Sharpeye’ and continuous improvement in areas of operations and logistics means Kelvin Hughes is destined for smooth sailing as it aims to persist as a market leader in the marine industry. end

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CEL Training With many manufacturers finding that their profit margins are being squeezed, numerous firms are moving towards ‘lean manufacturing techniques’ in a bid to improve productivity and competitiveness.

EL Training specialises in delivering the Business Improvement Techniques NVQ, focusing specifically on implementing ‘lean manufacturing techniques’ to help organisations achieve best performance. The BIT NVQ provides your workforce with the skills to improve the productivity, quality, efficiency and profitability of your organisation by using tried and tested techniques. Recognising that sometimes the longevity of studying an NVQ can cause disruption to a working environment, CEL Training has developed a more efficient delivery model that can be completed in 4 days of intense training,

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over a 12 week period. The quality of CEL Training’s NVQ model is of the highest standard, with a track record of 98% achievement rates. The NVQ is delivered by CEL trainers who have originated from a manufacturing background, with experience ranging across a variety of industries from textiles to food and, automotive to technology, so CEL Training can appreciate the demands and tasks that clients face on a daily basis. CEL Training’s delivery model will accommodate the way in which you operate, by enhancing quality and business performance, improving communication and access, increasing

reliability and developing employer and learner experience. Whether you are looking to increase productivity, improve your competitive position or simply invest in your workforce, CEL Training can help. For further details contact Mike Gregory, Business Development Director.

Published in association with: CEL Training Tel: 0151 346 2150 Mobile: 07590 962209 Email: mgregory@cel.co.uk Web: www.celtraining.co.uk

Furniture Daval Furniture

furniture Part of the

Edward Machin meets Daval Furniture’s Simon Bodsworth to talk stock holdings, supplier loyalty and a Lean transformation which has seen the company post growth figures of 7% in 2009.

Having

traded as a limited company since 1978, 2010 finds Huddersfieldbased Daval Furniture as a leading mid-market manufacturer of household furniture applications, supplying to a network of 140 independent retailers within the UK. Founded by David Bodsworth — who remains as managing director — to manufacture bedrooms for the booming residential market, Daval’s offerings have expanded to include both bespoke bathroom and kitchen installations. As a natural extension of its original remit, the company first began producing a range of on-suite bathroom twelve years ago — while its kitchen offerings, almost wholly driven by customer demand, were introduced in 2005, and currently represent 25% of turnover.

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Option-i Remarkably, given the battering that many in the sector have taken of late, Daval experienced a growth rate of 7% in 2009. Such expansion in the face of perilous economic conditions is, says Simon Bodsworth, the company’s marketing and development manager, “Largely testament to the implementation of production technology unique to Daval, entitled Option-i. Indeed, we have been developing this design system internally since 2005 — the year representing a fork in the road for the company, so to speak.” Increased outsourcing to the Far East — with the associated driving down of prices — meant that Daval was in danger of losing the design capabilities, innovation and market share it has worked so painstakingly to accumulate. “That new side of competition suddenly came into the market, not to mention hugely improved offerings from the highstreet,” explains Bodsworth. “In order to secure the independent market,

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therefore, we had to change our business model from a successful batch producer to an agile, lean manufacturer.” To realise such an end, Daval worked with a vastly experienced lean consultant, John Pegg, and Factory Control Systems, the latter of whom wrote a bespoke ERP package to enable the company to run its manufacturing processes in a seamless, ultra-efficient fashion. While Bodsworth accepts that Daval’s cellular manufacturing techniques are not unique to the industry, “The technology had never been there to link production to the front of the business. With this software in place, however, we are now able to produce competitively priced, made-to-order furniture on an industry-best three week lead time.” Recgonised as a Lean leader within Europe thanks to its dedication to efficiency advances, a change in company culture can nonetheless be a bitter pill to swallow for workforces used to operating in entrenched, ‘comfortable’ patterns. With such concerns in mind, how did Daval go about introducing its team to the mystifying — on first inspection, at any rate — beast that is Lean manufacturing? “Very simply, from the outset it meant increasing our communication to staff on what this new, hugely exciting direction meant for each and every person in the company,” says Bodsworth. Equally, however, the business sought to involve as many external organisations as possible in its drive towards becoming a Lean, green, manufacturing machine. Working

Furniture Daval Furniture

with the Chambers of Commerce and completing a Lean auditing programme with Manufacturing Advisory Service (MAS), for example, Daval are currently in talks to begin a suite of training schemes with the latter organisation. Similarly, the company is fresh from its first batch of NVQs in Lean Manufacturing — undertaken by twelve leading performers on the production floor. This NVQ training program was run through Daval’s partnership with CEL Training, and has resulted in CEL delivering the program at no cost to Daval; as they, along with majority of CEL’s clients, qualify for government funding for the NVQ programs they provide. Says Bodsworth, “Given that as a company Daval places great stock on the willingness to learn and adapt to changing market conditions, we would never be so narrow-minded as to dismiss the considerable benefits of external advice.” Although a spongelike approach to self-improvement has existed at the company since its founding, Bodsworth acknowledges that the technology wasn’t always on hand to develop the Lean manufacturing base that Daval has striven towards for the last decade or so. “However, the combination of technological advances and what others have brought to the organisation gave us a kick in the right direction,” he says, “and I am delighted to say that we have never looked back.” “Both John and Factory Control Systems remain very active in the advancement of our business, in the sense that we find ourselves endlessly tweaking efficiency, innovation and design processes. While it is very much an evolving system, the fact that improvements are being made internally, with John and Factory Control, and MAS, the Chambers of Commerce and our NVQ accreditations gives the company a balance of input that was perhaps not here previously.”

Now you see it, now you don’t With Option-i enabling the company to remain at the forefront of design and innovation within the industry, the ability to avoid excess stock equally lies at the heart of Daval’s manufacturing strategy. Indeed, says Bodsworth, of particular restriction to furniture producers is that when operating on a

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stock basis, and any given product doesn’t go quite right, it is very costly to turn around and recover. “A no-stock basis, on the other hand, allows us to be in a much more healthy position. We can pick up on and dip into the latest design trends, colours and innovations that come to the market and implement them into tomorrow’s production as quickly and efficiently as possible.”

In order to secure the independent market we had to change our business model from an albeit successful batch producer to an agile, lean manufacturer Simon Bodsworth The majority of providers within the company’s industry are volume manufacturers, he continues, “So we are rather unique in this sense.” Similarly, the foundations of a Daval product — carcasses; materials; fittings — are the same across its offerings, enabling customers to choose from a range of finishes and price bands. “The beauty of Lean manufacture,” argues Bodsworth, “is that we possess the capacity to bring in the materials needed for each unique job. For example, the company introduces new products

on a six month basis which, again, is somewhat uncommon in our industry; the majority of manufacturers offer volume-based lines on an annual basis.” Operating rather like a fashion catwalk, by continually communicating with its customers and supply base Daval is thus able to maintain a balanced product portfolio while ensuring that it isn’t carrying any dead or slow-moving ranges. Such ease of manufacture does not come without continued investment, however — be it in technologicallybased or more ‘traditional’ production equipment. By way of example, Daval recently purchased a heat exchanger, designed to significantly reduce the company’s carbon footprint. Confirms Bodsworth, “We not only want to produce a best in class furniture portfolio, but one which is done, as far as practically possible, by eco-friendly means. Given that a commitment to sustainability is increasingly becoming a purchasing differentiator, moreover, we see this feature of our business as key going forward.”

Loyalty card A further pleasing aspect of Daval’s operational model, especially given these times of economic uncertainty, is the degree of loyalty to which the company shows its supply base. Indeed, it has sought to retain the same suppliers for many years; working in collaboration to devise and develop products which are mutually beneficial to both parties. In this way, Daval is given trusted access to ongoing market requirements, coupled with the fact that, says Bodsworth, “We will only ever be as good as our suppliers.” “What you see in the current market is an increased willingness to switch the supply base at the first sign of trouble,” he continues. “Obviously this will work for some, but since our inception Daval has actively worked with its suppliers to make improvements where needed — whether that be re-engineering, bringing through products that have a better margin or negotiating more favourable buying terms.” “Moreover, we are continually pushing on innovation and product development through our supply chain; the heart of Daval Furniture’s recent successes,” says Bodsworth. “For

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Furniture Daval Furniture

example, the company is previewing our spring collection — largely based around muted and softer tones — as we speak, and to no little success, it must be said.”

Word of mouse Internally, Daval is working on the introduction of an online ordering system, designed to expand the breath of Option-i and the concurrent accessibility that the company’s customers have to such technology. Explains Bodsworth, “The European Union (EU) has put together a grant to help fund this development so as to ascertain whether such systems can secure a greater number of sales for Lean manufacturing companies across Europe.” “We are currently testing the system, with a view to going live within a three month period and, as far as I’m aware, Daval is the only business chosen by the EU to undertake so pioneering a programme,” he says.

While undoubtedly recognising the company for its industryadvancing working methods and assisting European manufacturers battle against the likes of China, Daval’s online system will, crucially, ensure a greater degree of control to its client base. In allowing customers to order semibespoke products online and track orders from manufacture

We can pick up on and dip into the latest design trends, colours and innovations that come to the market and implement them into tomorrow’s production as quickly and efficiently as possible.” Simon Bodsworth

to delivery, says Bodsworth, “An even greater degree of efficiency will be added to our operations — with the removal of misinterpretation in orders being merely one example.” Lean, it seems, never sleeps. But Daval Furniture, having cultivated a company-wide culture of production efficiency, seems to be bedding down just fine. end

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Engineering solutions GDW Engineering is committed to ensuring we provide engineering solutions to meet Castle Cement’s requirements for the supply of off-site and on-site fabricated parts and repairs of its kilns, roller mills, absorption tower, electrostatic precipitator, chutes, high-temperature ducting and fans for process and production equipment

ur expertise and experience is used to tailor our design solutions to Castle Cement’s specification and budget by the application of value engineering to reduce downtime and risk on site works. We can progress your project taking any role defined in CDM regulations. We take every opportunity to build relationships with our customers based on a partnering approach, taking the view that each project is a joint venture and staking our reputation on a successful conclusion. GDW is an accredited member of the Safe Contractor Scheme. Our workshop is adjacent to the heart of the north-west’s motorway

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network in Chorley with a 1,000m2 fabricating floor, steel bedplate floor for accurate alignment and 10 tonne single piece capacity. We have a similar sized yard area that allows trial assembly and inspection of units. We provide coded welding up to BSEN or ASME XIII, with quality systems in place to provide documented weld history and materials tracking if needed. Other areas of manufacture are chimneys, ducting, structural steelwork, tanks, pressure vessels, hoppers, silos, bag filters, electrostatic precipitators, oxidisers, mechanical handling, platforms and access ways. Projects include steam

and hot water boilerplant, air, hydraulic and cooling systems. Energy from waste, Heat recovery, CHP Systems, District Heating, Renewable & Sustainable Energy, Energy Efficiency Systems.

Published in association with: GDW Engineering & Plant Services LTD Tel: 01257 262491 Fax: 01257 241174 Email: sales@gdwengineering.co.uk Web: www.gdwengineering.co.uk

Construction materials Hanson Cement

Mixing it

With much of its sector battered by the recession, Edward Machin meets one of the UK’s largest suppliers of construction materials, Hanson Cement, to discuss alternative fuels, business-wide maintenance, preparing for an upturn and the rolling Lancashire hills. Ee by gum…

Tracing

its origins to 1929, Castle Cement became part of Hanson UK when its parent company, the German-based HeidelbergCement Group, purchased Hanson in 2007 — further establishing its position as a global leader in aggregates, cement, concrete and heavy building products, and employing approximately 57,000 staff across five continents. Rebranded and integrated within Hanson UK, Hanson Cement currently supplies 25% of Britain’s cement requirements from works in North Wales, Rutland, Avonmouth and Clitheroe, Lancashire.

Encompassing over 350 manufacturing sites, and with a headcount of more than 6,000, Hanson is delineated into four business lines: aggregates and asphalt, concrete, building products and cement. Operating as one of the UK’s foremost suppliers of ready-mixed concrete from a network of 200 fixed and site-based plants, the company’s quarry division simultaneously offers a national contracting business, specialising in road surfacing and infrastructure work. Hanson’s building products arm is the largest producer of clay bricks and aircrete blocks in the UK, with a portfolio including wall cladding systems; aggregate blocks; concrete and clay pavers; decorative rocks and stones; bagged products; concrete flooring; and pre-cast concrete products. Lastly, as a leading producer of Portland cement and ground granulated blast furnace slag, the company’s cement unit includes its own hydrocarbon recycling

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business, SRM, producing alternative fuels for Hanson’s cement kilns.

Kiln or be kilned… Indeed, the heart of the company’s manufacturing processes remains its kiln operations, due to the fact that, says plant manager Gary Young, “It has far and away the greatest impact in terms of safety, costing, environmental considerations and productivity across Hanson Cement.” Moreover, the staggering use of power associated with producing cement means that the unifying aspect of the aforementioned variables is energy: both electrical and as a source of heat. Given that Castle Cement was the first UK-based company to utilise alternative fuels, Hanson continues to remain at the forefront of environmentally-friendly production methods, with its Ribblesdale site achieving a remarkable 70% replacement rate during 2009. Crucially, says Young, “Fuels can only be introduced with permission from the Environmental Agency of England & Wales after having

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demonstrated that the impact of any new fuel will be less than that of which you are seeking to replace.” With competitors increasingly keen to utilise sustainable technologies, the company has targeted a replacement rate of 72 – 74% in the near future. While such increments may appear slight to the casual reader, “Gaining additional energy replacement naturally becomes more difficult to achieve as we get closer to total fuel sustainability,” explains Young. As a result, Hanson identified the use of carbon-neutral materials as a key component in driving further improvements; bio-mass, for example. While such fuels have associated financial benefits, crucially, from an environmental standpoint, ash as a waste isn’t created during their combustion — being channelled into the production of cement instead. Similarly, says Young, “Hanson engages in significant carbon trading, whereby every tonne of CO2 we can extract from our production processes results in a fiscal benefit. That said, CO2 can never be eliminated completely from the cement-making process — it is part of the fundamental chemical reaction. What we can do, however, is strive to reduce the output of CO2 per tonne of cement, with our Ribblesdale facility’s current quota of CO2 per cement tonne being substantially below the industry average in the UK.”

Power players While reduction of heat energy has long been a target for those producing cement, Hanson has set its sights on

Construction materials Hanson Cement

concurrently limiting the company’s use of electrical power per tonne of cement: “A major cost profile for the site,” says Young. “While older plants can be somewhat disadvantaged in that their conception and design were carried out when energy costs were greatly reduced, and prior to the onset of environmentalism, there does exist a silver lining — namely that older sites are more adaptable to making savings, given that you can simply replace inefficient technology with a proven modern alternative.” While the capital investment in such projects is substantial, Hanson nonetheless replaced — to the tune of £500,000 — the drive motor on one part of its process fans during the early part of 2010. The project was undertaken to both increase reliability on the fan and improve efficiency on the electrical motors themselves, with a view to effecting increased production savings but also reducing kilowatt hours used. Similarly, Hanson expects to replace (i) its existing damper control gears with variable speed induction

motors and (ii) the company’s high-powered fans (2MW) with more efficient modern equivalents so as to drastically reduce power consumption. “Although the electricity market is both highly complex and volatile, there are certain given facts of which we can be virtually certain: that there exists a pattern to the demand profile, for one,” says Young. Given that the relative price at any given part of the day/week can be predicted, Hanson’s production plan is based upon the relative energy costs at a particular time of day. Accordingly, each of the company’s five cement grinding mills consumes approximately 1.8MW of electrical power — in addition, the grinding mill for the kiln feed uses over 4.5MW alone. Strict adherence to Hanson’s production schedule is, “Absolutely critical, as the price per MW/h can more than double the off-peak price during certain times of day. That said, there are clearly limits to what can be achieved by selective planning. While current market conditions allow for an increased degree of flexibility, it would be foolish to think that this will be the case forever.”

Maintenance drives Key to Hanson’s strategy is, therefore, the co-ordination of its production advances with an ongoing maintenance push — thus ensuring that the company remains the construction industry’s leading UK supplier. Confirms Young, “Maintenance is a key factor on any cement plant, given the intensity of the production process; in terms of heat,

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chemical reactions, and wear and tear.” With an annual maintenance cost for Hanson’s Ribblesdale Works exceeding £7m, recent improvement projects have sought to deliver both enhanced manufacturing techniques and cost control methods across the organisation. Driven largely as corporate-wide edicts by the HeidelbergCement Group, regular improvement projects are seen as vital is assisting Hanson’s plants to reduce their cost profiles while maintaining industry-leading performance in all aspects of the business: run factors, production methods and environmental compliance, to name but three. “Initially, these efficiency drives are set down as benchmarks, with sites under the global umbrella monitored in order to ascertain whether a marker indeed exists,” says Young. “Once completed, each subsidiary is given KPIs to ensure that improvement targets are achieved. I am delighted to report that Hanson UK’s sites perform exceptionally well across the gamut of performance improvement

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drives, especially considering the relative age of our facilities — when compared to other production plants, at any rate. Because it calls for an extremely robust maintenance practice, our machinery performs as well, if not better, than the majority of modern kilns.” To ensure such robustness of operation, Hanson employs a highly-specialised maintenance team operating effective preventative maintenance during a day shift pattern, thereby supporting the company’s 24 hour production process. These techniques, when coupled with current market conditions, “Allow for a significantly more intense scrutiny of maintenance tasks across the business,” says Young. However, he cautions, “There is clearly a finite resource in terms of both manpower and finance. It is imperative that these are used as effectively as possible, with an increasing emphasis on pro-active maintenance, online analysis and periodic condition monitoring — with structural changes to our engineering departments adopted to assist in such advances.” When implementing further ‘run to failure’ for items which are not burdened by safety and/or environmental considerations, moreover, and where the cost of repair will not be compromised further, Hanson is thus going about its business in ways which have never previously been part of the psyche of cement plant operations.

Cementing the future Production processes aside, Hanson retains an ongoing commitment to advancing the skills of its workforce.

Construction materials Hanson Cement

Historically, a significant percentage of its systems were based on apprenticeships and promoting internally: 11 of the current 13 managers and supervisors having graduated through the company’s apprenticeship scheme. “We are very much seeking to once again make the ‘apprentice to management’ model a cornerstone of Hanson Cement’s future successes,” says Young. “Indeed, with our industry having endured a lengthy period of contraction during the early 2000s, the age profile within the site is slightly more top-heavy than we would ideally have it.”

What we can do is strive to reduce the output of CO2 per tonne of cement, with our Ribblesdale facility’s current quota of CO2 per cement tonne being substantially below the industry average in the UK

during 2011/12 will be largely associated with effecting improvements across the gamut of spare parts management: logistics, shared stocks, compatibility of spares and standardisation, for example. Manufacturers of all shapes and sizes are trading their way through the worst recession in living memory, with the construction industry having perhaps been hit worst of all. While this has meant taking difficult decisions in terms of manpower and capacity cutbacks, Hanson Cement continues to invest substantially in UK production and remains deeply committed to providing the best customer focus of any producer in the UK. “We are hopeful that the worst is over,” says Young. “With a stable orderbook for 2010, when the pickup does come — as it inevitably will — we can increase our production volumes without any hindrance whatsoever. There exists a substantial amount of spare capacity within the system; indeed, the market would have to pick up an inordinate amount before we would experience difficulties in terms of production capabilities.” “Ultimately, recent trading conditions have presented us with an opportunity to become more proactive in things that perhaps we did not have as much time to do before. By increasing our maintenance, training programmes and machine productivity, Hanson Cement is ideally placed to reap the rewards of looking inwards while ensuring that we continue to remain at the forefront of UK cement production.” end

As a result, Hanson is currently investing in the staff it will need in five years time, confident that a history of long service — 32 years on average — has existed at the company since its inception. “While remuneration and working conditions are a key factor in the company’s favour, I think there is also something to be said for Hanson’s being located in a beautiful part of the world. Never underestimate the impact of our Lancashire scenery!” says Young. Going forward, Hanson has identified the renewed focus on its spare parts policy and management as representing a significant facet in the company’s long-term strategic vision. That the cement industry remains extremely capital-intensive — with equipment often bespoke, critical and expensive — is reflected in the amount of outlay inherent in spare parts. Confirms Young, “While traditional decision-making with regard to spares stock served its purpose at the time, keeping something ‘just in case’ is wholly more difficult in current conditions.” As such, KPIs for Hanson

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Business Impact B

usiness Impact began working with Hampshire Cosmetics in early 2008 through an initial contact made via The Manufacturer Magazine. The MD Peter Darke was setting out a business plan and a vision that in a highly competitive contract manufacturing environment the application of lean/ business improvement would be a key differentiator. Business Impact had gained previous relevant sector experience at a time when Business Improvement Techniques (BIT) as a qualification was in its infancy. The common ground established from the outset with Hampshire Cosmetics was a commitment to improvement through people. The vision was shared with all

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of the Senior Management Team and the method to initially engage staff was planned. From a Business Impact perspective having gained Senior Management input a key ingredient would be hearts and minds. The BIT NVQ and other related qualifications provide a framework and enabling staff to generate and own improvements to working practises is the value added. By achieving initial quick wins more staff were able to see the benefits of joining the programme. Business Impact also worked strategically with Hampshire Cosmetics to align quality, cost and delivery improvements to specific KPIâ&#x20AC;&#x2122;s. The

resulting sustained improvements in productivity are of course welcomed and complacency has not been allowed to set in. We look forward to continuing support of the journey and congratulate Hampshire Cosmetics on their achievements to date.

Published in association with: Business Impact Tel: 0191 497 1920 Fax: 0191 497 1933 Email: info@businessimpactuk.com Web: www.businessimpactuk.com

Cosmetics

Hampshire Cosmetics

Changing the face of the operation Mark Young talks to Hampshire Cosmetics’ MD Peter Darke to hear how widening its horizons has kept the company on course to meet ambitious growth targets despite the downturn.

The

subject that has dominated the media over the last eighteen months has not bypassed Hampshire Cosmetics Ltd. Like many other manufacturing companies they have experienced first hand the challenges of rising costs and reduced forecasts. However they have remained undeterred and pressed ahead with an ambitious plan to redefine and grow the business despite the gloomy market predictions. Considerable efforts by the staff and changes in the way the business operates have both played a key part in helping the company to grow and develop over the last two years. The company hasn’t changed its core market; it still focuses on producing and supplying a wide range of products which are sold in supermarkets and on the high street under a number of household brand names. However, the firm has come a long way since its inception almost 40 years ago. And it’s the developments that have taken place over the last three years that have arguably had the most influence over the way it now operates and its ability to respond positively to

the demands of the ever changing market. From its 55,000 square foot premises in Waterlooville, Hampshire, the company has embarked on bringing about a cultural change across the organisation to support its transition from contract manufacturer to a full service provider within the cosmetics, toiletries and personal care industry. This change encompasses all areas including R&D, formulation, manufacturing and assembly as well as market research. The changes were instigated when Peter Darke took over as managing director in January 2007. The privately owned limited company firm had changed ownership nine months previously and Darke, together with his team of six senior managers, was given a free reign over the strategy he felt best to take the company forward. “The company had been trading successfully since 1971,” he says. “As a traditional contract manufacturer companies would approach us to produce specific products and volumes to meet their particular demands within given timescales. In some instances they would present us with their own formula and ask for support in further developing it. This arrangement had worked well for a number of years and we had built up a reputation for good quality and a flexible and supportive service. “My view was that we needed to extend the scope of the business and develop the full service provision as an integral part of the company offering. This would mean that customers – potential and existing – would be able to discuss projects on a much wider scale with us and we would provide input and support from the initial concept through to the production

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and delivery of the finished article. We now work with a much wider range of customers, many of whom require the flexibility of regular range reviews and changes which means that we do not have the luxury of long runs of specific products and we have to develop our ability to deliver a more varied product range in smaller batch sizes within shorter lead times. At the same time we are developing ideas and concepts in-house that we are able to proactively offer to customers to support them in enhancing and developing their overall product offering”. Having put considerable effort into the overall concept of how the business should move on, the company worked closely with transformation consultant, TotalFlow Ltd, to refine their plan and strategy for the next three to five years. From this process Hampshire were able to create a solid framework to support the growth plans of the business. “Working with TotalFlow encouraged us to take a different view of what was possible and how we could approach the changes we needed to make. As a result we now have

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a flexible but practical strategy to move the business forward,” comments Darke. Under the head of creativity, the company now employs four research and development chemists who focus specifically on the creation and delivery of innovative product ranges. With the support of an in-house packaging technology team and the ongoing ability to internally provide full product testing and regulatory support Darke believes that the company is correctly structured to provide customers with the support they need to fully develop products. Speed-to-market is a key concern for the company. “Cosmetics are, in many ways, comparable to the fashion industry,” says Darke, “consumer trends change quickly and there is always a strong demand for new and more efficacious products. One of the ways to succeed is to become adept at getting products through development and onto the shelves quickly.” Under the company’s new full service philosophy greater emphasis and effort is being directed towards researching market demands and investigating new developments. The commercial team is constantly reviewing market trends and patterns and, where required, performing Gap analysis on customers’ ranges to ensure that any offerings are focussed and relevant. With this new emphasis, the business development team is suitably resourced to proactively seek new business rather than taking the more reactive approach it had tended to do in the past. In January 2007 Darke set the business the objective of doubling its turnover within 6 years – while remaining profitable of course! At the end of the 2009 financial year the company

Cosmetics

Hampshire Cosmetics was well on the way to achieving this target, despite the downturn, having added 30% to its turnover, and Darke says this year’s figures should deliver evidence that the business has maintained that increase ready for further growth in the coming period. One of the key factors in the company’s successful move to full service supply, according to Darke, has been employee support. “I have always strongly believed that the staff are a fundamental part of this organisation and to a great extent it is their company they are helping to develop and improve,” he says. The company is working through a programme which will see all members of staff provided with a cross section of training that is relevant to each individual’s work and own personal development. Darke envisions all employees on site able to problem solve within their own areas, contribute more to the overall operation and generally make their own jobs easier yet more productive and, most importantly, more fulfilling. In addition Darke has set up a number of cross functional teams to work on specific core projects. Each group is led by a member of the senior management team, working outside their normal area of functional expertise, and supported by a number of staff from across the business. The idea is to minimise the organisational barriers within the organisation and encourage staff to participate in the process of change within the company. The company has worked with external skills provider Business Impact Ltd to secure Train-to-Gain funding for a large part of this project. Darke set up a Centre of Excellence unit on site and with Business Impact’s support established a company wide scheme to provide NVQ Level 2 BIT (Business Improvement) training. Over the last 18 months 40% of staff have attained the qualification and then implement improvements across all areas of the operation. The scheme has now been extended to include other NVQ qualifications, once again with the support of Business Impact. This has resulted in a further 40 of the 246 strong work force attaining NVQ Level 2 within the last six months in both production and warehousing disciplines. Darke also offered staff Numeracy and Literacy training with the help of a local college. In 12 months 35 staff entered the scheme and gained the qualifications on offer. Such has been the level of interest that

the company is continuing to run the two courses over 8 to 10 week cycles involving around 16 members of staff at a time. Via the training programme and becoming involved in new areas, Darke says the staff are “finding capabilities they didn’t know they had and increasingly becoming aware of the impact they can have on the company’s performance.” As a result they feel more motivated and output has increased. Through monthly communication briefings and a staff-run news sheet employees are now better informed in terms of the company’s operational and financial performance and this means they are generally more supportive of the process of change. “In many cases, the staff themselves are instigating the changes,” says Darke. Hampshire is also committed to best environmental practice – both because it suits the ethical mindset of the firm and also because it acts as an effective driver for efficiency. The firm achieved the ISO14001 environmental accreditation in less than a year which is no mean feat by anyone’s standards. Yet such was the company-wide support of the initiative that the auditor from the International Standards Organisation commented that the program looked as though it had been in place and fully operational for at least two years. Says Darke: “We’re strong on the environment, strong on ethics and while we’re not perfect, we recognise where we make mistakes and do our level best to improve them and work with the staff to put them right. Our objective is to grow the business on a sound commercial basis and achieve our development goals. We have still got some way to go but firmly believe we are heading in the right direction.” end

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Achieve growth without spiraling costs

5 and 6 May 2010

Manchester

21 and 22 September 2010

Peterborough

www.themanufacturer.com April 2010 Vol 13 Issue 04

Materials

world Focus on Sheffield and South Yorkshire

t R A I N I N G f o r S u c c e ss Better linking of theory and application

Finance and pro services Capital allowances at the frontline

Leadership and Lean

Exploring Britainâ&#x20AC;&#x2122;s low carbon vehicle industry

Interview Prof Keith Ridgway OBE

Research Director, University of Sheffield Advanced Manufacturing Research Centre with Boeing