The Manufacturer April 2014

Hot Topic Budget 2014 Manufacturers react

Manufacturing Leadership Goodbye Graham MTA director general Graham Dewhurst retires A productive debate What’s on the agenda at this year’s National Manufacturing Debate

Workforce And Skills WOMANufacturing Young females making waves in manufacturing

Manufacturing Technologies

leaders Tomorrow’s

Winning hearts and minds for manufacturing

Future Factories today Next-gen technology for manufacturers

IT in Manufacturing Every thing to play for Industry comment on the Internet of Things

ALSO IN THIS ISSUE TM Awards launch Servitization potential Automation case studies Energy and efficiency In partnership with:

INTERVIEW George Edwards Young inventor and skills champion

www.themanufacturer.com | April 2014 | Vol 17 Issue 3

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Welcome

EDITOR’S INTRODUCTION

The Business Budget

Chancellor George Osborne won lots of gold stars from industry for his Budget promises last month (p30).

His 2014 speech gave encouraging evidence that the Treasury is beginning to really listen to industry representatives and to align its policies with the rhetoric of the Department for Business.

32

38

58

Doubling the already enhanced Annual Investment Allowance should provide extra incentive for SMEs with investment intentions to put them into action, stimulating manufacturing competitiveness and productivity – the topic of this year’s National Manufacturing Debate (p48).

Very importantly, Mr Osborne also reacted well to the unswerving focus of EEF on the UK’s uncompetitive industrial energy costs and the punitive effect of green taxes.

His £7bn package to alleviate the burden of energy costs was welcomed by many (bit.ly/Budget2014IndustryReacts).

Melanie Leech at FDF suggested the tax breaks for CHP plant investments would be of particular help to the food and drink industry and meanwhile, the wider renewables obligation compensation package will be a boon to the renewable energy industry in the UK. This will not only help the UK make its national grid more secure in the long run, but also allow the country to reap economic benefits from the move to a low carbon economy.

Siemens’ decision to enhance and firm up its plans to invest in wind turbine making capacity in Hull cannot be unconnected to this announcement. The firm’s head of energy sector expressed in no uncertain terms that the decision was founded on a belief that the UK is a favourable environment for off-shore wind technology development as well as a keen market (p13).

What is being done by UK manufacturers to reach out and engage with tomorrow’s talent, and is this enough to bridge the current skills gaps? Find out on p32.

particularly in addressing the UK’s high pricing on carbon and it is certainly not time to complacently tick off energy cost mitigation as a ‘job done’ for industry lobbyists. They are, however, a step in the right direction and it would be churlish not to congratulate government for making them.

Another Budget announcement which will be close to the hearts of many in and around the manufacturing sector is the Chancellor’s promise to support another 100,000 apprenticeships with a focus on higher level skills and SME provision.

But as this month’s skills focus (p32) argues, attracting talent into industry is not just a matter of throwing money into apprenticeship provision or developing frameworks that respond to employer skills gaps.

Those opportunities have to be energetically marketed to young people in a language they understand.

Engagement with schools is a necessity for the manufacturing sector if it wishes to survive and thrive in the future.

Furthermore, that engagement must be coordinated at local and national levels to ensure that a well devised message about the desirability of a career in manufacturing is getting through to all schools – not just a lucky few.

The new compensation package for energy intensive users will also ensure Siemens has a local supply chain which is more capable of supporting its needs.

Are the commitments on energy costs for manufacturers enough? Some have said they do not go far enough –

Jane Gray Editor April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 1

Editorial Advisory Board

The Editorial Advisory Board is delighted to announce that Dave Mooney, one of the magazine’s longest standing supporters, has joined the editorial advisory board.

Dave will supplement the board’s insight from high performing SMEs, particularly with regards to manufacturing service development and employee ownership.

Deirdre Fox

Tony Hague

Anna Schlautmann, 21: 3rd Year Logistics Apprentice, MBDA and ’s Apprentice of the Year 2013

Ross Meikle

Andrew Churchill Managing Director, JJ Churchill

Simon Edmonds Director, the Catapults Programme

Steve Evans

2 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

Global Manufacturing Director, Accolade Wines

Ben Taylor Assistant CEO, Renishaw Plc

Andrew Peters Division Director, Drive Technologies, Siemens

Pamela Petty Director of the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability

Philip Greenish CBE Quality Improvement Manager, Hayward Tyler and ’s Young Manufacturer of the Year 2013

Richard Lloyd

MD, Power Panels Electrical Systems and Chairman of the Midlands Assembly Network

Managing Director, Drallim Industries

D

Director of External Affairs, EEF

Director of Strategic Business Development, Tata Steel

Dave Mooney

rallim makes engineering equipment for the aerospace, industrial and utilities markets.

After 20 years in corporate technical roles with BICC, Smiths Industries and BTR/Invensys; Dave joined Drallim and for the last 10 years has proudly run an independent, employee owned, British manufacturer with the mission to create “innovative people, engineering quality, niche products and contract services”.

Drallim has won four Manufacturer of the Year awards and Dave is now a regular member of the awards judging panel.

Hywel Jarman

CEO, the Royal Academy of Engineering

Managing Director, Ebac Group

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

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ABOUT US

Meet the team Nick Hussey Chairman

Editorial

IT Editor Malcolm Wheatley

malcolm@malcolmwheatley.co.uk

Jane Gray Editor

Nick has 20 years of experience in the publishing industry spanning titles in the UK, US, Asia and Australia. In addition to his commercial experience Nick has also worked in government, spending a year as managing director of Manufacturing Insight, a programme aimed at changing the image of manufacturing among young people. He holds several non-executive directorships and is a founder member of the IET’s Manufacturing Policy Panel. n.hussey@sayonemedia.com

David Farrow General Manager David joined SayOne Media in 2012 managing the marketing across the business. He has nearly 25 years’ experience in the conference and publishing industry having worked for the likes of LexisNexis, Kaplan Hawksmere and Payroll World. In February 2014 he was appointed General Manager of SayOne Media. d.farrow@sayonemedia.com

Jane joined SayOne Media in 2009 for the launch of the Lean Management Journal, sister publication to . Reporting for , Jane focused on industry skills development features and lean enterprise until she became editor in June 2011. She is a trustee of the D&T Association. j.gray@sayonemedia.com

Henry is responsible for SayOne Media’s commercial activities, developing new concepts and products for ’s readership. Henry is keen to build a bridge between the manufacturing community and the service sector which supports it. h.anson@sayonemedia.com

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Callum Bentley Deputy Editor Callum joins The Manufacturer after spending the past three years working as a print and online news journalist for a major regional news organisation in Australia.

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April 2014

CONTENTS

08 News and regular columns

Manufacturing Technologies

A summary of manufacturing news and events with commentary on industrial research and policy 20 Story time Imagining a fairy tale ending for the UK’s manufacturing recovery 24 Out & About goes to Rolls-Royce Motor Cars, Coca-Cola Enterprises and Autotech 26 Best of Online What you wanted to read about most on ’s website in March 28 The Manufacturer of the Year Awards launch launched its Manufacturer of the Year Awards at the House of Commons 30 Hot Topic: 2014 Budget How has the 2014 Budget been received by UK manufacturers and what does it mean for them? investigates 32 Skills sense explores the impact of “engineering propaganda” on young people and recent efforts to make industry skills campaigns more effective 38 Interview Young entrepreneur and recent manufacturing sensation George Edwards talks to Jane Gray about his ambitions and how to bridge the skills gaps by increasing empathy with his generation 41 60 second interview: Nigel Whitehead, MD at BAE Systems talks about engaging with young engineers and apprentices to help bridge skills gaps 42 Lean manufacturing Lean Management Journal Editor Victoria Fitzgerald reflects on some of the recent articles featured in the journal

62 Making a name in manufacturing: Mark Springer, engineering director at Coty International explains how a new training cell, developed as a student project is challenging employees 64 Future factories today: Will Stirling reviews some next-gen technology on display at Hannover Messe 2014 66-71 Case studies and insights from the Automation Advisory Board

Pillar features Manufacturing Leadership 44 The small serving big: Professor Tim Baines from the Aston Centre for Servitization explains how servitization can make the smallest business truly competitive 48 A productive debate: looks at what’s on the agenda at May’s National Manufacturing Debate 50 Goodbye Graham: Jane Gray catches up with MTA director general Graham Dewhurst who will retire this summer

Finance & Professional Services 54 Snapshots: Alternative finance, FX strategies and the effects of foreign ownership on performance

Workforce & Skills 60 WOMANufacturing: catches up with some of the young females looking to make waves in the UK manufacturing industry

6 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

IT in Manufacturing 72 Every thing to play for: talks to Thomas Svensson, at technology vendor PTC to discuss David Cameron’s recent commitment to fund research into the Internet of Things 76 Last Word: Let’s go round again: Will the remanufacturing revolution ever take off?

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NEWS Exports

UK exports of food and drink were valued at £12.8bn in 2013. The Food and Drink Federation (FDF) reported that Total UK food and non-alcoholic drink exports grew by 5% in 2013, a welcome rise after a flat 2012. 2013 saw exports recover to the EU28 (+3%), with strong growth in Q2 (+9%) and Q4 (+7%), correlating closely to EU economic performance. Exports were further strengthened by double-digit growth to non-EU markets (+11.5%) where food commodities performed well. Ireland and France remain the UK’s biggest food and drink export markets by both overall value and value gained in 2013. Exports to China rose by a massive +82% moving it up to become the second largest nonEU market, with British Pork (+92%) and Scottish Salmon (+90%) alone contributing £33m.

UK manufacturers must raise R&D investment in order to maintain competitiveness abroad. According to HSBC’s Trade Forecast, released last month, stronger than expected recovery figures in industrialised nations have contributed to the surge in export figures to a four and a half year high.

The forecast reported that 63% of exporters expected trade volumes to rise over the next six months, up from 61% during the second half of 2013.

In a further boost, UK exports are predicted to increase by 5% per annum over the next two years. However, HSBC also stated that the UK needs to encourage businesses to investment in R&D to capture more value from their exports, enabling them to move up the value chain in the long term.

www.themanufacturer.com/news

Reshoring

Bentley Motors announced its Crewe site is to become the new centre of excellence for all Volkswagen Group W12 engine production. The move, which will result in the creation of 100 new jobs, will be the first time engines have been exported from the Crewe facility, where the automotive marque has had a presence for over 90 years. Currently some 5,000 engines per year are manufactured in Crewe, with a remaining few thousand made in Salzgitter in Germany.

After a record 2013 for sales which saw the delivery of 10,120 cars, Bentley has moved to enhance its status as the world’s largest producer of 12-cylinder engines.

Japanese electronics giant Hitachi confirmed it will move its rail operations from the Far East to the UK. The firm, which manufactured the first bullet train, is looking to increase its UK headcount from 2,500 with an additional 1,500 British jobs. It also aims to raise revenues to £2.5bn.

The announcement comes after Hitachi won a £1.2bn contract to manufacture intercity trains last July, resulting in a new factory in Newton Aycliffe, Durham and the creation of 750 jobs.

Top 5 exoprt destinations* Rank 1

2012 Germany

2030 USA

2

USA

Germany

3 4 5

France Ireland China

Ireland China France

*The table considers goods exports between the 25 countries in the sample.

8 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

Read the reaction from manufacturer’s to Chancellor George Osbourne’s Budget on page 30.

Budget

Chancellor George Osbourne announced the Government’s 2014 Budget last month. Osbourne touted the budget as one “for the makers, doers and the savers.” See how the “makers” faired and what manufacturers and industry bodies had to say on page 30.

MANUFACTURING NEWS

HS2 rail project

Artist’s impression of the HS2 station in Birmingham. Image courtesy of Birmingham Culture.

The HS2 Growth Taskforce published updated plans for the development of the high speed rail link to the north of England. The report, High Speed 2: Get Ready, argues that HS2 will be a force for economic rebalancing, “kickstarting growth and regeneration in our cities”. The project to extend a high speed rail link into the north of the country will cost £50bn and has caused controversy over its choice of route and stopping points along the way. Opponents to HS2 fundamentally disagree with its potential to disperse economic development and activity more evenly across the country.

Company fines

HS2 has joined Jaguar Land Rover, Airbus and other prime contractors due to address manufacturing SMEs at the Global Manufacturing Festival in Sheffield. This meet the buyer session is for companies involved in special materials, metal forming and engineering. A senior director from rail consortium HS2 will join executives from prime contractors in the aerospace, automotive, renewable energy and oil & gas sectors to explain supplier opportunities at the Global Manufacturing Festival on June 25 at the Advanced Manufacturing Research Centre with Boeing. Sheffield’s GMF is now in its fifth year and will also augment the International Festival of Business in Liverpool for 2014. Speakers include Mike Wright from Jaguar Land Rover, Colin Sirret from Airbus and Bruce Heppenstall, MD of GE Oil & Gas Newcastle who will outline their UK operations and how to access their supplier lists. Headed by a senior government minister in the Department for Business, Innovation and Skills, GMF’s conference is backed with a 150-stand exhibition and networking opportunities. The show’s organisers are expecting more than 1,200 visitors this year – 1,000 people registered in 2013.

The European Commission imposed fines of nearly EU1bn on a cartel of European and Japanese ball bearings manufacturers.

The six companies, fined EU953m for alleged price fixing, “colluded to secretly coordinate their pricing strategy vis-a-vis automotive customers for more than seven years” according to the Commission. The largest fine of EU370.5m euros was imposed on Germany’s Schaeffler, followed by Sweden’s SKF which received a fine of EU315.1m. Of the four Japanese companies, three were fined: NTN EU201.4m, NSK EU62.4m and NFC nearly EU4m.

Manufacturing reports

EEF’s quarterly survey revealed Britain’s manufacturers experiencing increasingly strong growth. The increase was due to strong UK sales and a healthy boost in overseas trade. The report, compiled in conjunction with accountancy firm BDO, revealed a more consistent picture than in recent quarters with the strong conditions spreading to all regions and sectors, and healthy balances for both UK and overseas sales. And the positive outlook is being translated into record high recruitment and investment intentions – the highest levels recorded in the survey. In its report, EEF said that translating firms’ intentions to invest and hire more staff into action will be the ultimate test for long term economic recovery.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 9

NEWS www.themanufacturer.com/news

Read Jane Gray’s interview with Graham Dewhurst on page 50.

10 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

Retirement announcement

Graham Dewhurst, director general of the Manufacturing Technologies Association, announced his retirement. At the MTA since 2007, Mr Dewhurst has focused on providing value to members; standing up for their interests and helping them grow their businesses.

During his tenure MTA’s membership has grown by 33% and the range of industries and type of company in membership has also increased significantly. Dewhurst’s retirement will be effective as of Summer 2014 and MTA is now seeking a successor to the post of director general.

Awards and honours

MAS automotive sector lead Rachel Eade received the Member of the Order of the British Empire (MBE). Eade received her MBE from His Royal Highness Prince of Wales in recognition of her services to the car industry. The Birminghamborn automotive expert has supported the region’s supply chain for nearly 20 years, playing an instrumental role in ensuring component firms came through two MG Rover crises, the closure of Agco and Peugeot’s Ryton factories and, more recently, issues around Coventrybased London Taxi Company. It is estimated that Eade has helped more than 2000 suppliers, safeguarding 10,000 jobs and creating in excess of 5000 new positions with expanding manufacturers.

Wales’ Advanced Materials & Manufacturing

PRODUCTIVITY

is 20% HIGHER than the UK average

We don’t do average in Wales.

No-one delivers like Wales.

That’s why our Advanced Materials and Manufacturing sector is geared to accommodate the most demanding commercial requirements. Over 20% of the UK’s Aero maintenance, repair and overhaul is undertaken in Wales – yet we only have 5% of the population. Wales is home to the world’s most modern silicon based manufacturing plants, plus we produced the world’s first fuel cell and helped develop the aerodynamic design of the world’s fastest car.

No wonder our advanced materials and manufacturing productivity is 20% higher than the UK average.

Find out what Wales can do for your business JustAsk.Wales.com +44 (0) 3000 6 03000

NEWS www.themanufacturer.com/news

Wage increase

The government approved a rise in the national minimum wage to £6.50 per hour later this year. The rise will take effect in October, as Business Secretary Vince Cable accepted in full the independent Low Pay Commission’s recommendations for 2014, including plans for bigger increases in future than in recent years. The Low Pay Commission (LPC) has said the rise, the first real terms cash increase since 2008, is manageable for employers and will support full employment. Business Secretary Vince Cable said: “The recommendations I have accepted today mean that low-paid workers will enjoy the biggest cash increase

in their take home pay since 2008.

This will benefit over one million workers on national minimum wage and marks the start of a welcome new phase in minimum wage policy. “The independent Low Pay Commission plays a crucial role in advising the government about the minimum wage. This is why I asked them to look at how we could restore the real value of the national minimum wage as the economy recovers. “The experts will continue to advise government on future wage rises to help the low paid, and in the meantime I urge businesses to consider how all their staff – not just those on the minimum wage – can enjoy the benefits of recovery.”

The national minimum wage rates from 1 October 2014, as recommended by the LPC, will be: a 19p (3%) increase in the adult rate (from £6.31 to £6.50 per hour); a 10p (2%) increase in the rate for 18-20 year olds (from £5.03 to £5.13 per hour) a 7p (2%) increase in the rate for 16-17 year olds (from £3.72 to £3.79 per hour) a 5p (2%) increase in the rate for apprentices (from £2.68 to £2.73 per hour)

Manufacturer Half 105 x170w_Manufacturer half 105 x 170w 20/03/2014 16:19 Page 1

Ethical manufacturing

Rockwell Automation was named one of the world’s most ethical companies.

The acknowledgement by the Ethisphere Institute is the sixth time Rockwell has received the honour in the company’s history.

The institute, set up to honour organisations maintaining high standards on ethical leadership and corporate behaviour, released its latest results which included manufacturers, retailers and service providers. Other manufacturers making the list included aerospace company Elbit Systems and the Ford Motor Company, and comes after Rockwell recently released its Global Voices Survey, where employees ranked its culture of ethics, responsibility and accountability. It also ranked highly in a study conducted by the Corporate Executive Board, with Rockwell Automation leaders ranking the importance of ethics and compliance higher than nearly all of the more than 175 other companies surveyed.

Linde Industrial Park

For Sale

Merthyr Tydfil, South Wales |

CF48 4LA

A4054

21,930 sq m (236,020 sq ft) on 23 hectares (57 acres) Chris Sutton chris.sutton@eu.jll.com

12 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

manufacturing facility with expansion potential.

MANUFACTURING NEWS

Factory expansions

A new £45m stamping line, the first of its kind in the UK, was installed at Jaguar Land Rover’s Halewood factory. The servo press line at Halewood, where Jaguar Land Rover manufactures its Freelander2 model, the Range Rover Evoque and plans to produce a new “Baby Discovery”, is 13 metres tall and over 85 metres long. It has a combined press stamping capacity of 7,900 tonnes, making it the fastest and one of the biggest and most powerful press lines across Jaguar Land Rover, stamping both steel and aluminium panels. The new line necessitated a major reconfiguration of the Halewood press shop including a project to raise the roof of the facility by almost 12 metres and a 50% increase in footprint.

Energy

Siemens announced a £310m investment in a wind turbine manufacturing facility which will create 1,000 new jobs in the UK. This announcement is a major boost for the offshore wind industry in the UK and will increase the economic benefit to the UK of renewable energy development policies. Siemens will manufacture its wind turbines across two UK sites. One will be Green Port Hull, which Siemens has had intentions to develop for some years. This site will support construction, assembly and servicing of turbines. A new rotor blade manufacturing facility will also open in Paull in the east of Yorkshire.

Siemens will front £160m for investment in these facilities while its port partner, Associated British Ports (ABP), will provide a further £150m for the Green Port Hull development.

Company announcements

SME manufacturer Warrior Doors doubled its turnover in two years after website investment and a new accreditation. Birmingham-based Warrior Doors is on course to hit £2.5m of sales this year after rebranding and refreshing its website. The website revamp allowed the company to reach out to new markets and it now supplies security solutions to banks and high end retailers including jewellery shops as well as its traditional core clients in the social housing market.

Dates for your diary April

8-10

Occupational Hygiene 2014, the BOHS Annual Conference, is a major international conference promoting the science and practice of addressing health hazards in the workplace.

Taking place at Nottingham Trent University’s conference centre, the event brings together researchers, practitioners, regulators and business leaders from around the world to discuss issues - current and on the horizon - that affect health at work. www.bohs.org/OH2014

23-24

The Engineering Simulation Show, bringing together the world’s leading simulation software companies, consultancies and engineering companies, takes place at Derby’s Roundhouse. The show brings together a host of industry exhibitors and software providers, along with structural engineers across a wide range of disciplines and industrial sectors sharing an interest in engineering simulation software. www.theengineeringsimulationshow.co.uk

28-30

The International Conference on Sustainable Design and Manufacturing will take place in Cardiff. The Conference will consist of keynote talks, oral and poster presentations, invited sessions and workshops, on the applications and theory of sustainable design and manufacturing and related areas. sdm-14.kesinternational.org

May

12-14

The Spring Servitization Conference will be held at Aston Business School. The conference will focus on transforming manufacturers to compete through advanced services rather than products alone and draws together senior executives from global organisations, entrepreneurs leading small businesses, and researchers from leading universities. www1.aston.ac.uk/ssc2014

14-15

MEDTEC UK takes place in London. This exhibition for medical device manufacturers includes access to a conference and UKTI business exchange hub to help manufacturers in the sector make the most of their export opportunities. www.medtecukshow.com

20-21

The National Manufacturing Debate is hosted by Cranfield University, with this year’s theme being ‘manufacturing productivity.’ bit.ly/CranfieldNMD2014

June

3-5

Subcon, the UK’s only dedicated national exhibition for contract and subcontract manufacturing, returns to Birmingham’s NEC in June. This year’s event is set to be the biggest yet, with over 300 subcontractors exhibiting and a stronger than ever participation by UK exhibitors. www.subconshow.co.uk

24-25

The annual Global Manufacturing Festival brings together over 1000 SMEs along with global industry names at the Advanced Manufacturing Research Centre in Sheffield, as part of the UK’s International Festival for Business 2014. www.globalmanufacturingfestival.com See more upcoming events at www.themanufacturer.com/diary

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 13

UPCOMING EVENTS

29/04/2014

Health & Safety Future Factory Series event

29/04/2014

Supply Chain Future Factory Series event

06/05/2014

ERP Connect

FREE to attend for subscribers of The Manufacturer

29th April 2014 - Ambassador’s Bloomsbury, London

This conference is an expansion on health and safety recognition. It gives an opportunity to explore how you can change your thought process of health and safety and expand on your compliance to improve drive bottom line

profitability to protect your business reputation and how you can change that. The conference will show attendees why health and safety should sit within the board room and should be part of strategy.

www.themanufacturer.com/healthandsafety2014

FREE to attend for subscribers of The Manufacturer

29th April 2014 - Ambassador’s Bloomsbury, London

Transparency, visibility, social corporate responsibility- these are all buzz words when we talk about supply chain. This conference will look at how we can implement a clear tier system to avoid disasters like the fall of the

Bangladesh factory to the horse meat scandal to the current recall of Aston Martin car; giving you the knowledge to implement a high functioning, lean and CSR compliant supply chain.

www.themanufacturer.com/supplychain2014

6th May 2014, The Waldorf Hilton Hotel, London

The Manufacturer’s ERP Connect has changed the way UK manufacturers approach software selection by minimising the overall time and effort involved in qualifying potential Enterprise Software vendors. ERP Connect is the must attend event if you are looking to install or

upgrade your ERP system in the next 12-18 months. This unique event offers a one-of-akind opportunity for you and your team to see the best in Enterprise Software Solutions in the world, all in one place, all at the same time!

www.erpconnect.co.uk

Social Media and LinkedIn for Manufacturers

London - 24th April, Manchester – 15th May, Birmingham – 16th June, London – 10th July

Social media is absolutely everywhere and you have probably wondered what it means for your company and how you can effectively utilise it to grow your manufacturing business. Correct use of social media will provide you with an

improved channel to target potential customers and strategic influencers. Fact: manufacturing companies can reap the same benefits of social media just as any other company.

www.themanufacturer.com/social-media

The Manufacturer Directors’ Forum Dinners

Join industry leaders for professional debate and knowledge-based networking The Manufacturer hosts a series of invitation only private dinners throughout the UK each month.

These dinners are focused on knowledge based networking and strictly limited in numbers. Apply to become part of this exclusive forum by emailing directorsforum@sayonemedia.com.

www.themanufacturer.com/mdf

14 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

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Manufacturing in Action

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World Class Manufacturing

Medium Sized Enterprise of the Year

Innovation & Design

Exporter of the Year

People & Skills

Sustainable Manufacturing

Young Manufacturer of the Year

Through-life Engineering Services

Leadership & Strategy

Small Sized Enterprise of the Year

Apprentice of the Year Supply Chain Excellence

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APPOINTMENTS

John Falder

British Coatings Federation

John Falder, managing director of HMG Paints, was appointed as the new president of the British Coatings Federation (BCF).

Falder, whose brother Stephen also served as president between 1999 and

Neil McLean

which I’m sure will help the Federation’s 2000, is currently chairman of BCF’s cause in the coming years.”

Industrial Coatings Council and was formerly chair of the Vehicle Refinish Group.

BCF’s CEO Tom Bowtell said “I am delighted to have John bring his passion and enthusiasm to his role as president,

Recolight

Recolight, the specialist WEEE compliance scheme for the lighting industry, announced Neil McLean as its new operations manager.

McLean, who has worked in the European lighting industry for the past 19 years, joins the company from global

lighting group Havells-Sylvania, where he was responsible for various International business units.

Previously, Neil spent 13 years in design, sales and marketing management roles for Philips Lighting in Europe.

Professor David Greenwood Jaguar Land Rover and Warwick Manufacturing Group, at the University of Warwick, appointed Professor David Greenwood as the Jaguar Land Rover Professorial Chair in Advanced Propulsion Systems for the National Automotive Innovation Campus.

Jaguar Land Rover announced last year that it would invest £1.4m in the new position, which Professor

Stuart Harrison

JLR + WMG

Greenwood will take up in April, to lead a team of international researchers to advance new propulsion systems.

Professor Greenwood joins WMG from Ricardo UK Ltd where he was head of hybrid and electric systems leading technology projects including passenger cars, defence, motorsport and the clean energy markets.

Professor Lord Bhattacharyya, chairman and founder of WMG said: “Professor David Greenwood is a highly experienced and respected researcher who will lead a team that will help transform how our automotive industry embraces and robustly deploys new vehicle technologies in the field of advanced propulsion system.”

joins the Nuclear AMRC from simulation specialist GSE Systems, where he collaborated closely with EDF Energy on a key training project.

Nuclear AMRC chief executive Mike Tynan said: “Stuart brings a

wealth of experience to the Nuclear AMRC. His knowledge, experience and understanding of the civil nuclear industry are crucial for us to succeed in our mission.”

automated intralogistics systems and has held senior positions with a number of materials handling equipment suppliers in a 20-year career.

Steve Richmond, director of Jungheinrich UK systems & projects

division, said: “Mike is a fantastic addition to our team and I know he will enjoy significant success with our organisation.”

Nuclear AMRC

The Nuclear AMRC appointed Stuart Harrison as its new business development director, with a remit to help UK manufacturers win work in the civil nuclear sector. Harrison, who has worked in the nuclear sector since 1991,

Mike Young

Recolight CEO Nigel Harvey said: “Neil will play an integral role in meeting our vision, financial goals and strategy as we develop and grow, which will be especially important as we develop our integrated lamp and luminaire compliance service.”

Jungheinrich UK

Jungheinrich UK announced the appointment of Mike Young as its systems & projects division’s new UK business development manager.

Young specialises in the design and implementation of fully- and semi-

To notify The Manufacturer of your company’s appointments, please contact James Pozzi at: j.pozzi@sayonemedia.com or: 0207 401 6033

16 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

HiETA

The right material

“Y

ou can print whatever you want”. Start talking about additive manufacturing or 3D printing and that’s what you’re likely to hear. However, this is not yet the case. One of the main reasons? Materials. Materials are everything to the engineer. In 3D printing this is especially true, where the material choice can be crucial to the success of the build. As such, the development of these manufacturing technologies is directly linked to materials development. As the capability matures from simply prototyping, the ability to process an increasing catalogue of materials into an end product is coming to the fore.

The world of 3D printing started with polymers, specifically photo-reactive

Mike Adams, CEO at HiETA Technologies, is a staunch advocate for additive manufacturing but states that as the technology evolves, so must the raw materials which will be transformed into the goods of the future. polymers, with stereolithography as the first process to be commercialised.

This process and material combination can be considered the parents of the additive manufacturing industry.

It is also, arguably, one of the most understood particularly in terms of resulting material properties.

Manufacturing giants such as Siemens have used stereolithography in the production of customised hearing aids, one of the first applications of additive manufacturing which can be considered true “production”.

Powder materials make up a large amount of additive manufacturing raw materials. Very fine powders are combined with tools such as lasers or electron beams to create functional parts in both metals and polymers. The quality

3D IN FOCUS

of these powders has a significant effect on the material microstructure and final component properties. However, thanks to the Technology Strategy Board’s recent funding in this area, a number of UK projects such as the 3T RPD led ANVIL project, and the HIETA led HiEND project, the challenges are being tackled.

The majority of additive manufacturing metals’ development has been led by the medical and aerospace fields and used in the production of high performance and complex structures. Significant applications in the development of additive manufacturing include dental implants, bone replacements and lightweight aircraft components. This has resulted in many materials such as titanium alloys, maraging steels, Stainless 316 and cobalt chrome becoming available for commercial use when combined with laser or electron beam processing.

In an industry growing as rapidly as this, what first seems impossible or improbable, often becomes reality. When HiETA initially started, we were told that aluminium alloys could not be processed through a laser process for a number of technical reasons, and that it was not going to happen anytime soon. 12 months later and aluminium was being processed and now has the potential to become a large part of the burgeoning metals additive manufacturing industry.

Another exciting area of potential is the possibility of additive manufacturing high performance ceramics. Soon it may be possible to have greater manufacturing control over the properties of ceramic components, combined with highly complex design not possible through current powder forming or machining processes.

The successful uptake of production in this field is highly dependent on the development and adaptation of both current and new materials. For the manufacturer, a robust powder supply chain that has the quality and consistency required in today’s highly competitive global marketplace in most cases does not yet exist in additive manufacturing.

However, the exciting potential in so many areas of new products makes it a challenge worth pursuing.

To find out more contact Mike Adams at mikeadams@hieta.biz or go to www.hieta.biz April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 17

POLICY POINT & BACK TO SCUOLER

Policy Point.

Sahar Danesh, principal policy advisor for manufacturing, Institution of Engineering and Technology discusses the importance of proper communication between government and manufacturers.

O

ne of the issues raised at the recent EEF manufacturing summit was that there were plenty of government initiatives aimed at helping manufacturers, however many organisations have not heard of these initiatives or don’t know how to apply for them.

From our research for our upcoming Understanding Manufacturing report we spoke to manufacturers about the issues that are the most important to them and what government can do to help.

One of the areas highlighted was that manufacturers avoid government schemes because they believe the support is not robust enough, or is tied so heavily in red tape that it is not worth filling in the complicated application forms to apply.

As noted at the conference, business needs to think long term and relying on initiatives that could be short-lived is too risky to build a business model around. There is a strong sense of continuity and long-term planning that characterises manufacturing business and therefore any government intervention must also be long term.

However, playing devil’s advocate; by avoiding government initiatives, manufacturers are also distancing themselves from government and not giving organisations like the Manufacturing Advisory Service, UKTI and BIS enough feedback on what are the best ways to help UK manufacturing.

Is there a breakdown of communication or are there a set of manufacturers which are familiar with government schemes while others are left unaware and unsupported? If there is a breakdown, who should be responsible for improving this situation?

There are many players involved in the sector, including manufacturers, Government and institutions such as the IET. A more collaborative approach will help to share knowledge of the initiatives and funding available.

18 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

Back to scuoler.

O

EEF’s chief executive officer Terry Scuoler addresses the need for financial support to boost innovation in the UK.

ur executive survey, published earlier this year, showed that one of the key growth opportunities for UK manufacturers in the year ahead would be the commercialisation of new products and services.

According to the survey, 37% of companies expect new product development to drive growth in the year ahead, whilst for smaller companies new product development was the most frequently cited growth opportunity.

This chimes with what we found in our Innovation Monitor survey last year, where manufacturers reported increasingly ambitious innovation strategies. However, we also saw that many long-standing challenges to innovation remained in place. Manufacturers reported concerns about access to skills, facilities and finance as well as difficulties with speed to market.

Many companies responded to this by collaborating with customers, suppliers and other external organisations such as universities. But innovation support schemes were also important, with 56% of manufacturers saying they used the R&D tax credit, and 27% saying they used Knowledge Transfer Partnerships. The next most commonly used form of support was European support with a fifth of manufacturers stating they had used European Funding for innovation.

The UK has historically done very well out of European innovation support. In Framework Programmes 5&6 – the most recent funding rounds for which there is complete data – the UK received 15.9% and 14.2% of available funds. And data suggests that the UK will have received at least 14% of Framework Programme 7 (FP7) funds as well. Only Germany has received more.

The FP7 programme has now ended, and in its place launched recently was Horizon 2020. This is an ambitious and well-funded programme to support science and innovation across Europe. With nearly €80bn committed between 2014 and 2020, the UK stands to receive over €11bn worth of funding for science and innovation projects in that time.

In the context of Ed Miliband’s speech on the EU last month, the benefits to jobs and investment in the UK from European support from schemes such as this are one of the issues that often slip under the radar. It’s why it is now essential that politicians of all parties lead a constructive debate about the benefits of EU membership so that the public understands the very real benefits that membership brings to our economy. We also need to see all three parties articulate clearly what our future relationship with the EU will be and how schemes such as this will benefit our economy in terms of jobs and investment for many years to come.

How can you deal with the skills shortage?

How can you improve quality?

How can you grow your business?

How can you increase your company’s competitiveness?

How can you give your staff greater job satisfaction?

How can you decrease wastage in production?

The Manufacturer magazine in conjunction with the leading automation equipment suppliers has established The Automation Advisory Board to educate ownermanagers and factory directors about what automation equipment can do and the benefits it can bring to UK manufacturers.

where the capital equipment could make a profound difference to winning contracts.

Companies in non-auto sectors, who are unfamiliar with the range, capability and simplicity of automation kit, need and deserve to know what automation options are available.

Automation needs to rise to the board level in companies of all sizes, but especially larger SMEs

In 2013 it is a business risk not to be informed about the benefits this technology can bring.

Automation is not the question, it is the answer!

For more information contact Henry Anson, Managing Director, The Manufacturer E: h.anson@sayonemedia.com T: +44 (0)20 7401 6033 The Automation Advisory Board is proudly supported by: ABB, BARA, Festo, Gambica, Innomech, Kuka, Lombard, Manufacturing Technology Centre, Omron, Rockwell, Schneider Electric, Siemens, Staubli

Automation can provide the answer to all these questions and many more‌ For more information please visit: www.themanufacturer.com/ automation-advisory-board/

A manufacturing fairytale

O

Story time Can we conjure a fairy tale ending for the UK’s manufacturing recovery?

20 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

nce upon a time there were two Fairy Godmothers, Valerie and Michaela.

Every five years Valerie and Michaela were granted the power to make a really important wish come true.

On the appointed day of the fifth anniversary they decided to have dinner to discuss the worthy cause they were going to help.

It was during the time of the Great Crash and times were hard so even Fairy Godmothers had to make do with gruel and dripping for this feast; they had however, put aside a really good bottle of Claret for the occasion.

Sipping their wine, they thought long and hard about whom they should help when all of a sudden the leg fell off Godmother Valerie’s chair, depositing her painfully on the floor.

Shaken, she called for help. Another decrepit chair was brought in and she asked the minion carrying it if he could have the broken chair repaired.

The minion replied that he would try his best, but that after years of poor support from government, regulation and banks the skills for fixing the chair had almost disappeared. Furthermore the tools available were old and the furniture makers had no money or motivation to spend on inventing new tools or ways to build chairs.

In a moment of inspiration the Fairy Godmothers knew what they must do.

With one wave of their magic wands they would bring manufacturing back to life. With satisfaction, they considered how this would create thousands of jobs and win the gratitude of the nation.

They might even get a free set of chairs, for the use of government and the public good, of course.

The wish was granted, but some time later, the Fairy Godmothers returned their attention to the manufacturing industry to see the benefits of their generous gift.

To their dismay, they discovered that their magic had not brought the expected results.

Story time

They found that manufacturing was still hamstrung by expensive and poorly implemented regulation, patchy investment and a shortage of skilled staff.

Worse still, the exceptional government initiatives their magic had conjured, were failing to penetrate the strata of manufacturing deeply or effectively.

Disappointed and confused the Fairy Godmothers were debating what to do next with manufacturing when an old paint maker interrupted them.

He had overheard their conversation and offered his opinion that, while their wish for manufacturing was good, it could never come true because of the way in which the wish had been granted.

“How could you know?” retorted the offended Fairy Godmothers sceptically.

Patiently, the paint maker explained that leaders in his sector had special knowledge about the complexities of different manufacturing needs across sectors and across the nation because paints and coatings were on almost every product in the land and used by manufacturing companies large and small. Their curiosity aroused, the Fairy Godmothers asked what they should do.

The paint maker pointed out that they had granted their first wish for manufacturing using their individual wands which only had local or regional power.

To have a real impact, they must work together to wield the fabled National Wand. In so doing they would be able to impact every sector and enlist the help of national organisations and trade federations who could divert their magic down the many different avenues necessary for a truly strong manufacturing force.

Abashed that they could have missed something so obvious, the Fairy Godmothers hurried to the tallest tower of government’s castle where the National Wand was kept and performed the wish granting ritual for a second time.

Low and behold Manufacturing regained is central role in the economy and prospered happily ever after.

Getting the right contract, meeting carbon targets, monitoring consumption…

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Helping our customers.

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Letters to the editor

Production lines

Letters to the Editor Richard Warren, Senior climate & environment policy adviser, EEF Some commentators viewed the energy related announcements in the Budget as a regression of climate change action and capitulation to polluters and big business. But, it is disingenuous to portray it as such.

EEF supports the need for action to cut global emissions.

But, this must be done in a way that does not leave the UK with the highest carbon price, the most burdensome climate change legislation and the highest targets for which we pay a price in lost investment and jobs. This is not to call for a reduction in UK climate change ambition, far from it as the move to a low carbon economy is a significant business opportunity for manufacturing.

It is merely recognition that we remain a long way from reaching a global binding agreement for all countries to reduce emissions, and that until we reach this point climate change policy must reflect this.

The Budget announcements are a positive step forward in terms of establishing a climate change policy framework that will facilitate the transition to a low carbon economy, whilst allowing UK manufacturing to benefit and contribute effectively to this transition.

The freezing of the carbon price support rate and the measures to shield our vital energy intensive foundation industries from the most damaging excesses of high energy costs are a common sense approach. Furthermore they are no more or less compared to what other countries across the EU, Germany in particular, are doing to support their industries.

Far from an about turn on climate change I believe this year’s budget represents a realistic view of the challenge we are facing, strengthens the UK’s ability to reduce emissions, and the manufacturing sector’s ability to contribute to this and provide the solution we all desperately want.

Send your letter Letters to the editor from manufacturing professionals and stakeholders in the industry are welcome and encouraged.

Please send them to j.gray@sayonemedia.com

22 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

Dominic Brown Head of GROW:OffshoreWind The announcement from Siemens and UK Associated British Ports regarding the production of its wind turbines in the UK is a fantastic boost for our offshore wind sector and further evidence that international companies are confident in our ability to deliver capacity and ‘green energy’.

It sends out a global message that the UK is ready to lead the way in this field and will undoubtedly act as a catalyst for future investment opportunities - some of which are already at an advanced stage.

There has been a long-term commitment to making this happen and the £310m investment will immediately create 1,000 new jobs with the potential for hundreds more in the associated supply chains.

This is where companies such as GROW:OffshoreWind can really make a difference. Our service has been shaped by industry leaders to deliver the technical expertise, market intelligence and access to technology centres that can help SMEs take advantage of this growing opportunity.

The £310m investment will immediately create 1000 new jobs with the potential for hundreds more in the associated supply chains

GROW:OffshoreWind can provide grants of up to £500,000 to firms looking for upfront investment to get ready for entry into the offshore wind sector.

To find out more, visit www. growoffshorewind.com/the-opportunity

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PLAYING MUSIC? MAKE SURE YOU’RE LICENSED. 77% of businesses say playing music in the workplace increases staff morale and creates a better working environment.* If you play music in your business, it is a legal requirement to obtain the correct music licences.

In most instances, a licence is required from both PPL and PRS for Music. PPL and PRS for Music are two separate companies. PPL collects and distributes money for the use of recorded music on behalf of record companies and performers. PRS for Music collects

and distributes money for the use of the musical composition and lyrics on behalf of authors, songwriters, composers and publishers.

A PPL licence can cost your business as little as 19p per day. For more information on how to obtain your PPL licence visit ppluk.com or call 020 7534 1070.

To ďŹ nd out more about how music can work for your business visit musicworksforyou.com *MusicWorks survey of 1000 people, conducted May 2012.

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April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 23

’s editorial team is out and about at a wide variety of industry conferences, debates and factory tours month in, month out.

Let’s get a snapshot of the most interesting trips in March.

Rolling in luxury Callum Bentley jumps at the chance to mollify his inner car geek as he visits the home of luxury British car maker, RollsRoyce Motor Cars.

A

s a selfconfessed car nut, I must admit I might have let out a little (yet very manly) squeak when an invitation to visit the home of RollsRoyce Motor Cars at Goodwood landed in my inbox.

The invitation was part of a press day at Rolls-Royce HQ to simultaneously launch the latest automotive statement of the British motoring marque, the Ghost Series II, with the concurrent unveiling at the Geneva Motor Show.

But a huge draw card for those in attendance, myself included, was an all-access tour of the factory’s production line and paint shop.

The latter of the two was our first point of call. Unlike other luxury/ super car manufacturers that hold firm beliefs their vehicles should be purchased from

the maker in one of only a handful of heritage colours, Rolls-Royce will bend over backwards to ensure the paint you want is the paint you get. Of course, there is a price to pay for this privilege. And part of that cost goes to paying the wages of the 80+ paint engineers whose job it is to ensure the shade of gold the Middle Eastern oil tycoon wants for his new Sunday driver is exactly what he gets - even if this means adding 19 grams of pure gold to each of the 35 litres of paint it takes to cover the car.

It is this entirely bespoke approach Rolls-Royce takes to creating every vehicle that appeals so much to the marque’s client base and has established the company as the pinnacle of luxury car manufacturers across the globe.

Each car takes at least 2 months to create – needless to say there is little to no automation on this plant floor. Everything is handmade and put in place using a just-in-time model.

Whether that is the team expertly crafting the 15-18 half (organically sourced) cow hides into the interior coverings for a luminescent pink Phantom, installing the hundreds of tiny lights into the interior roofing to give the impression of a night sky directly above your head or squeezing a twin-turbo

24 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

V12 engine into the bay of a £300,000 motor car, everything is created from a highly-skilled workforce, many of which come from the company’s internal apprenticeship scheme.

Whether a Rolls-Royce is your choice of car or not there is no way of denying the absolute craftsmanship that goes into creating these cars which have been part of British motoring heritage since 1906.

OUT AND ABOUT

Commanding controls Jane Gray visits Autotech and discovers the intelligence behind the workings of an array of Britain’s biggest and best factories.

Here comes A the fizz

I

James Pozzi tours Coca-Cola Enterprises’ Wakefield facility, the largest of its kind in Europe, and strolls through the evidence of heavy UK investment from the global drinks giant.

n the twenty five years since opening, Coca-Cola Enterprises’ vast Wakefield operation has undergone a raft of changes.

Currently the largest soft drinks manufacturing site in Europe – third in the world – the expansion juggernaut continues to move at seemingly breakneck speed.

With investment at Wakefield set to top £100m for the five years leading up to 2014, with CCE also recently committing to putting £1m a week into UK operations, the site displays an impressive range of manufacturing capability.

This includes a new £30m automated storage and retrieval warehouse, and the addition of a new production line to the tune of £12.5m, adding to the existing seven manufacturing and two pre-form injection lines. This is with the intention to produce the contour Coca-Cola bottle in polyethylene terephthalate packaging, across the 1.25 litre and 1.75 litre formats.

With a commitment to the green agenda, this year will also see the introduction of a combined heat and power (CHP) system, which will reduce CO2 by 5.6%, around 1,500 tonnes.

The site’s operations director Ian Johnson, who started at Wakefield in 1989, used the analogy of the British Olympic Cycling team’s quest for marginal gains to describe CCE’s on-site mentality. At a site producing 6,000 soft drink cans a minute, Johnson also highlights the skills of Wakefield’s 419 staff as a key factor behind its success.

“If you look at the changes the site has been through over the past 25 years, from the first pre-form manufacturing at CCE to now producing 100 cans a second, it’s ultimately the employees that make doing all of this possible,” he said. “I genuinely believe we have a fantastic set of people.”

utotech stands out from the fragmented crowd of technology integrators and control systems companies that are the oft-unsung heroes of automation success stories in the UK. These middle men can make or break the value of technology investments by manufacturers, bedding new kit into existing infrastructure and tweaking systems to suit specific, environmental, regulatory and productrelated criteria.

On the whole, integrators and control systems companies tend to be small and niche. Averaging around £5m turnover, they are often lifestyle businesses with specific expertise working with one or two sectors.

Autotech is different because it is bigger – at about £40m turnover – more diverse and more holistic in its determination to provide complete control solutions to its customers who span sectors including: automotive, food and drink, oil and gas and power generation.

It started out in 1996 as a simple controls company, but grew in capability and ambition thanks to the “ballsy” riskchasing leadership of founder and CEO Andy Robinson.

Autotech is the magic behind the movement of production lines at some of the UK’s biggest industrial employers and a relatively recent acquisition makes its knowhow even more valuable to Britain’s industrial infrastructure.

Two years ago, Autotech bought Igraphic, a process industry controls specialist. As well as opening up new markets, Igraphic has put Autotech in a position to offer end-to-end solutions to big industrial enterprises that include control systems for substations and utilities entering the plant, through to the high speed drives and other automation equipment making products.

This makes the spread of business on the shop floor at Autotech’s headquarters in Flitwick a mish-mash of bulky high power solutions and smaller, low power cabinets – the metal work for which is carried out at Autotech’s Bedford factory.

It also means that demand for widespread skills sets is intense and so the company has its own training academy supporting about 40 apprentices at time of writing.

With a track record of 25% year on year growth over the last decade and more, Autotech never noticed the recent recession but carved a name for itself as a comprehensive and commanding controls authority.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 25

Best of http://www.themanufacturer.com

200,000 jobs by 2020 thanks to reshoring

F

ollowing the launch of The Manufacturer of the Year Awards 2014 at a VIP reception in the House of Commons, ’s awards website received almost 2,000 hits from visitors keen to find out more about this year’s competition.

You can read more about the launch of our 2014 awards on p28. Now, let’s take a look at other popular content in March.

Our your tweets favo , Som e urite @Th of the eMa m s nufa ost ‘fa vour ctur

ite er in The G Mar d’ twee som reat Un ch ts fro m own e resear loved: E ed f ch o n irms n the dless re in th e UK performcently c @Co ar l bit.ly i a b r iT whe /Gre nce of ried out re # ool ma a tUnlo foreig #gro m k n ved wthh fg talk es it so e abo acki ut # asy to f n g in colib UKm £2m fg Se d plac ri.io/ jobs RGF sem r e f erra e for yo es : l/2f6 bit.ly RGF ha icondu 39 urself: ctor /Sem s inv inve icon ested st duc The torjo in NXP S ment to B emic bs c and ig Bang ond reate 10 ucto 0 sinc words: T Fair 201 r e 20 09 b he Big B 4 – first m it.ly/ a BigB ng Fair orning Man a u n gLau has be in pictu reac facture e r nch h r s t , h 2014 n runni es l #UK e ng mfg rough # arn ho w TM bit.ly /TMS Social to grow ocia Med your lMed ia. mar To se ketin i a g visits e twee t s f a f r @jan ctorie om lean efagray s and in ’s edito , ri d man ufac @Cal_Be ustry ev al team as it turin ntley ents g tw f eets and @J ollow: e follo w @ gPozzi.

LMJE F dito or r

26 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

I

Our coverage of PwC’s recent report on the potential effects of reshoring manufacturing on the UK economy was an unsurprising favourite with readers.

n ’s March issue, our Hot Topic took a level headed look at reshoring, reviewing real stories from firms which have done it but questioning its ability to make a big impact on economic rebalancing.

Reshoring is the populist manufacturing topic of the moment. Already in 2014 we have seen the Prime Minister launch ReshoreUK – a UKTI-MAS initiative to help more company’s move production back to Britain.

EEF released its reshoring report Backing Britain in tandem with a special debate on the subject at its National Manufacturing Conference where 65% of almost 700 delegates said they were mildly hopeful that the trend would make a difference to manufacturing growth in the next five years.

PwC’s report added to this mounting attention for reshoring. The professional services firm, well known for its high quality research, claimed that if trends for the reshoring of manufacturing, particularly in sectors like textiles and advanced manufacturing and associated services, continued over the next decade then it could boost UK GDP by around 0.4-0.8% by the mid-2020s. This equates to £6billion-12 billion in the economy and the creation of between 100,000 and 200,000 new jobs in the sector according to PwC. “This trend to reshore is still at a very early stage, but our analysis suggests that the impact on jobs and output could build up gradually to material levels over the next decade or so,” said John Hawksworth, chief economist at PwC. “Of course, some jobs will also still be offshored over this period, but it should be much more of a two way street going forward.”

These words echo those of EEF chief economist Lee Hopley at EEF’s National Manufacturing Conference when she admitted during a reshoring panel debate that the trade body’s research showed no net growth in reshoring compared to offshoring.

Read more about PwC’s reshoring report and predictions for related growth in UK jobs at bit.ly/PwCreshoringreport.

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

A technology twist Will Stirling’s report on a new wind power generation technology turned heads.

L

ove it or hate it, wind generated electricity in the UK is growing at a rate of knots. A total of 2,841,080 MWh of electricity was generated in December 2013 – supplying 10% of the UK’s electricity demand. In 2012 it was about 5.3% of the UK’s needs, demonstrating the vast amount of wind power capacity that was brought online during 2013.

That’s good news for the government, which has said that 15% of the UK’s total electricity should be from renewable energy in just six years.

But, whether onshore or offshore, these turbines are almost exclusively the windmill-like, horizontal axis wind turbines or HAWTs, and are all imported into the UK, with some turbine towers and certain components manufactured here.

Commercial grade vertical wind turbines are now appearing in the UK and, refreshingly, they are being manufactured in Britain.

Designs for vertical axis wind turbines, VAWTs, have been around for years. VAWTs are more efficient than horizontal axis turbines but most of the early research into VAWTs terminated in the 1990s due to physical shortcomings in the early designs.

As well as being more efficient in terms of energy generation potential, VAWTs have the added benefit of being easier to maintain since the main moving parts – the gearbox, motor/alternator and controls – are located at ground level. They are also more environmentally friendly than horizontally configured turbines, as they are easily detected by birds and bats and they don’t need the same concrete intensive foundations.

With materials advances as the enabler and long term cost reductions as the driver, a broad range of VAWTs are now appearing on the market with large firms often backing their development.

It’s not all plain sailing however, as Will Stirling’s report on 4Navitas’ experience shows.

Banks have been risk averse and reluctant to offer funding for the alternative wind generation concept. Selling up stakes in the business for equity investment provided this particular business with some of the cash it needed for proof of concept and scaling up of production.

There’s now enough international business for the Blackpool firm to aim for the production of one of its 4N-55 turbines per week – with the support of an almost exclusively UK-based supply chain.

To read more about 4Navitas and VAWT technology go to bit.ly/4NavitasVAWTs

Best of Online

Minimum wage rise Lots of readers eagerly clicked in to find out more about government’s commitment to raise the national minimum wage.

B

usiness secretary Vince Cable made the announcement that the minimum wage for adults in the UK would rise by 19p to £6.50 per hour. This increase will take effect in October, along with a range of other rises for younger age groups in the workforce.

Details of other wage increases are as follows: a 10p (2%) increase in the rate for 18-20 year olds (from £5.03 to £5.13 per hour) a 7p (2%) increase in the rate for 1617 year olds (from £3.72 to £3.79 per hour) a 5p (2%) increase in the rate for apprentices (from £2.68 to £2.73 per hour)

Business Secretary Vince Cable said: “The recommendations I have accepted today mean that low-paid workers will enjoy the

biggest cash increase in their take home pay since 2008. This will benefit over one million workers on National Minimum Wage and marks the start of a welcome new phase in minimum wage policy.”

The CBI, which used its 2013 Christmas message to employers to urge them to increase pay for employees as the UK recovery strengthens, also welcomed the mandatory minimum pay rises, saying they were manageable for employers.

Katja Hall, the CBI’s chief policy director said: “The Government’s decision to accept the Low Pay Commission’s recommendation of a 3% rise in the national minimum wage is a sensible one and will not put jobs at risk.”

Read more about the increases to national minimum wage at bit.ly/NMWIncreases2014.

Core competence The news that heavy engineering firm Sheffield Forgemasters passed its final audit to achieve ASME NPT accreditation sparked industry interest.

T

he new accreditation means the Sheffield Forgemasters is now one of a handful of UK companies able to fabricate safety critical cast components within nuclear power stations.

David Street, group quality director, at Sheffield Forgemasters reacted enthusiastically to the approval. “The audit to gain NPT status is a significant landmark for the company,” he said. “[It] is the culmination of several years of work to establish enhanced requirements and disciplines embracing all our processes, employees and sub suppliers.”

Sheffield Forgemasters’ accreditation puts it in a position to benefit from an anticipated surge on global civil nuclear business. According to the nuclear industrial strategy document, The UK’s nuclear future, which was published by government last year, about £930billion will be invested in new nuclear power plants globally by 2030.

Read this strategy document in full at bit.ly/UKNuclearFuture

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 27

Awards Launch

Margot James MP, Minister for Business Michael Fallon MP, Mike Patton of GE Aviation Wales and Nick Hussey of The Manufacturer

Game on! recently launched its 2014 awards in the House of Commons, bringing together figures from government and industry to kick off the entry process for this year’s campaign.

The Rt Hon Michael Fallon MP, Minister for Business and Enterprise and Minister of State for Energy, at the launch of The Manufacturer of the Year Awards 2014

T

he Manufacturer of the Year Awards, which aim to raise ambition and competitiveness while also improving the image of UK manufacturing, will once again descend on Birmingham this November.

Following last year’s awards, which attracted over 800 senior manufacturing leaders, the Houses of Parliament played host to the launch of 2014’s event, with the entry process now open until the end of July.

Again demonstrating increased government support for the sector, business and energy minister Michael Fallon addressed over 200 senior business figures

28 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

EVENT REVIEW

Kinnerton Confectionery celebrate after taking out the Innovation and Design category at last year’s awards.

including an eclectic mix of manufacturers.

Household names present included Rolls-Royce, BAE Systems and Coca-Cola Enterprises, all of which were joined by industry players including Mulberry, MDBA and Lander Automotive. Speaking at the event, Business and Energy Minister Mr Fallon, said the awards were a celebration of the ambition, creativity and innovation prevalent in British manufacturing.

“Manufacturing is critical to the UK: it’s responsible for 52% of UK exports and over 2.6 million workforce jobs,” he said. “The Government is working closely with the sector to give businesses the confidence to invest – securing high skilled jobs and a stronger economy.”

MP for Stourbridge Margot James, who sponsored the event, added: “Representing a Black Country seat and having family connections to the automotive sector, I have a great admiration for those in the manufacturing sector.

“Rebalancing the economy and championing industry has been a key priority for this government, and I am only too pleased to support these awards which recognise the wealth of talent and excellence in this vital sector.”

Also present was last year’s overall winner GE Aviation Wales, with general manager Mike Patton urging UK manufacturers to apply to the 13 categories which include People and Skills; Sustainable Manufacturing;

Innovation and Design; and Young Manufacturer of the Year.

“I encourage all of you to apply for The Manufacturer awards here in 2014 as it is a great honour.

We’ve been recognised back in the US for what we’ve done here from a GE Aviation Wales standpoint, so I really challenge you all to look at it very hard and put the application in. It’s a great investment that you can make for your company.”

Two new awards categories were announced at the 2014 launch event: Exporter of the Year and the Health and Safety Award.

Another previous winner, Gordon Chetwood, manufacturing director of 2013 Innovation and Design victor Kinnerton Confectionery, said the award provided excellent recognition for the company.

“Innovation is one of our key business strengths and to have this externally recognised by The Manufacturer was immensely satisfying, particularly as this was competing against some brilliant businesses and products from across the UK,” he said.

Entries for the coveted awards are now open and factory tours with last year’s winners will take place throughout the year to help demonstrate the award winning qualities judges will look out for.

FURTHER READING: For more information visit: www.themanufacturer. com/awards

A GREAT

BRITISH

BUSINESS

Business as usual, only smarter. EXEL COMPUTER SYSTEMS

Budget 2014 The annual Budget delivered by Chancellor George Osborne in March exuded enthusiasm for manufacturing. But how were government’s announcements received by industry? investigates.

T

he last year has shown UK manufacturing and the wider national economy moving on an upward trajectory.

Domestic industry grew for the eleventh consecutive month in February, with sector employment expanding at its fastest rate in nearly three years. Exports are also on the rise, performing above expectations for February. In this positive environment and with government reaffirming its commitment to rebalancing the economy, the eyes of industry were firmly fixed on the Chancellor when Budget day came round.

Billed by Mr Osborne as a Budget for “makers, doers and savers” the

Government’s biggest challenge lies in effectively marketing the opportunities it creates

30 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

Chancellor’s annual part piece presented the coalition with the opportunity to demonstrate its pro-manufacturing credentials by tackling some of the issues most detrimental to UK industry’s long term industrial prowess. These issues included energy costs, access to finance, exports and skills.

And on the whole, the chancellor’s fifth budget was met with approval across manufacturing sectors.

Terry Scuoler, chief executive of manufacturers’ organisation EEF, said the Chancellor deserved “a pat on the back” for delivering on his promise of a Budget for manufacturers.

Mr Scuoler focussed on Osborne’s actions to reduce commercial energy costs with a £7bn package to cut bills.

The issue of energy and punitive energy costs, particularly for energy intensive manufacturers had been EEF’s

central pre-Budget campaign issue, but other trade bodies too expressed approval for Osborne’s energy costcutting proposals.

Melanie Leech, director general at the Food and Drink Federation, said the decision to freeze the Carbon Price Support (CPS) would be helpful to all manufacturers in the food industry, Britain’s largest manufacturing sector with an annual turnover of £92bn.

“These changes will provide welcome relief to businesses large and small throughout the UK’s largest manufacturing sector and reward those who invest in energy efficient technologies,” she predicted.

AIA: all in the message?

Another key Budget announcement for manufacturers was the substantial temporary increase to the Annual

Budget 2014

Investment Allowance (AIA), rising from its already enhanced rate of £250,000 to £500,000 per business.

Tony Attard, chairman of the Institute of Directors North West, feels the increase presents a great opportunity for businesses. “The increase in capital investment allowance from £250,000 to £500,000 will be a great incentive for business to invest in new equipment and technology,” he said.

Manufacturers echoed Mr Attard’s sentiments with Mark Ridgway OBE, MD of specialist press manufacturer Group Rhodes, as well as president of the Manufacturing Technologies Association, (p50) calling for the rate to be made permanent.

But while such a significant increase can only serve to benefit businesses seeking to grow, perhaps the government’s biggest challenge lies in effectively marketing the opportunities it creates.

A Lombard survey conducted earlier this year showed that only a third of 400 SMEs were aware of the increase made in the 2013 Budget, which saw AIA upped from £25,000 to £250,000. Andrew Churchill, managing director of engineering firm JJ Churchill, told he attributed the absence of manufacturing awareness to both a lack of communication and the complex nature of the available tax incentives. “The current level of AIA is valuable and should be used by SMEs, however it needs to be made permanent and backed-up by a proper plan of communication,” he said.

Enhancing export culture

The same could apply for the equally contentious issue of exports.

New announcements from Osborne included an increase in direct lending to promote exports which doubled to £3bn.

Interest rates on that borrowing were also cut by a third.

But can government address widespread experience of difficulty in gaining visibility or access to export advice and support? The Chancellor acknowledged that government is traditionally seen as the last port of call for businesses looking for advice.

He is set on changing this, an ambition welcomed by the British Chambers of Commerce which recently published a survey showing UK export confidence at a record high, but which

also identified that more support was needed for businesses to successfully break into emerging markets.

Jayne Hussey, partner at international law firm Pinsent Masons which specialises in advising manufacturers on overseas expansion, observed that while government has shown commitment to exports, finding the right support is difficult particularly for SMEs. “There is not enough clarity around eligibility for funding and how to access it. On a very practical level, there is a need to communicate the help that is available better and to appoint one central body to take the lead,” she said.

One SME, East Midlands manufacturer Surface Generation, producer of fibre reinforced composite processing solutions, dismissed Osborne’s Budget policies as “too little too late”.

“The announcement that the Government is going to double the available finance for companies exporting to £3 billion and that interest rates on this will be cut by a third is welcome news but the amount is not enough and we will have to wait and see how easy it is to access,” commented Ben Halford, CEO of Surface Generation.

The UK as an innovator

Also under scrutiny were Chancellor Osborne’s announcements on innovation, a key component in UK manufacturing’s long-term prosperity.

While R&D tax credits rose from 11% to 14.5%, Dr Sarah Main at the Campaign for Science and Engineering, believes the UK needs to do more to encourage company investment in R&D. Osborne also earmarked £222m for research programmes such as the Alan Turing Centre for Big Data research, but Dr Main said: “In order to be in the global race, the UK needs to be able to compete to attract scientists, engineers, students and international R&D businesses. Our restricted investment in research over the last four years is in danger of affecting the UK’s international appeal as companies look to government investment plans before committing to locate new R&D facilities.”

This view is backed up by the latest HSBC Trade Forecast, which shows the UK has consistently invested around 1.77% of GDP in R&D over the last 20

HOT TOPIC

Eyes on industry: the key Budget announcements Direct lending from government to UK businesses to promote exports doubled to £3bn and interest rates on that lending cut by a third Business rate discounts and enhanced capital allowances in enterprise zones extended for three years R&D tax credit rising from 11% to 14.5% Up to £7bn cut from manufacturing energy bills A freeze on carbon tax charged to large CO2 emitters at £18 a tonne for ten years from 2016 Doubling the investment allowance to £500k per annum The setting up of a new Oil & Gas industry regulator to ensure companies work together to maximise the amount of natural resources they extract

years, while developing nations in Asia have more than quadrupled their spend to nearly catch up with Europe (bit.ly/ HSBCTradeForecast).

While Mr Osborne’s Budget doesn’t signal the silver bullet for UK manufacturing, it delivers in the preannouncement remit of being probusiness. The challenge now lies in promoting the benefits of these changes to business, especially SMEs, and in simplifying often complicated processes for exploiting them. This could prove far more problematic than finding the money to write the cheques.

FURTHER READING: For a blow by blow account of Budget 2014 commitments to support UK manufacturing see James Pozzi’s live blog at bit.ly/ Budget2014Blowbyblow For more industry comment on Budget 2014 announcements go to bit.ly/Budget2014IndustryReacts April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 31

sKILLS focus

Skills ‘‘A sense explores the impact of “engineering propaganda” on young people and recent efforts to make industry skills campaigns more effective.

32 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

s a student who has been on the receiving end of almost all of the engineering propaganda aimed at schools, I genuinely couldn’t describe what I am supposed to think about a career in engineering. Other than the need for more engineers, there are no clear or pragmatic messages being put across.”

So said George Edwards, an A level engineering student and our lead interview this month (p38).

18 year old Mr Edwards caused a stir with these words, which have been used to support parliamentary debate on the actions needed to resolve industry skills gaps and increase the competitiveness of UK manufacturing.

March was an extravaganza for all kinds of the “engineering propaganda” Mr Edwards referred to.

We had National Apprenticeship Week, National Science and Engineering Week, the Big Bang Fair, the launch of the annual BAE Systems

Schools Roadshow and a variety of supplementary competitions and awards to celebrate young talent and inspire it to come into industry and plug our increasingly worrying skills gaps.

But, as Edwards calls us to question, is it working?

Conflicting evidence

The data available to answer this question is conflicting. On the one hand, National Apprenticeship Service tells us that annual engineering and manufacturing apprenticeship starts have more than doubled in number compared to 10 years ago with 66,410 starts for the sector in the 2012-2013 academic year.

It’s a positive story which is backed up by results from the Big Bang Fair – the UK’s biggest STEM careers inspiration event – which shows it is increasing the desirability of engineering careers in the minds of young people and causing them to think about studying career enabling STEM subjects.

SKILLS FOCUS

At the same time however, the sector research and skills promotion organisation EngineeringUK, says that apprenticeship uptake among under 19s – an important segment for priming industry’s skills pipeline – has declined by 11.9% since the start of the 2011 academic year.

Furthermore, the anecdotal experience of attracting and retaining talent among many small and medium sized manufacturers does not seem to be changing. As visits these companies, complaints of a shrinking skills pool and fierce competition for limited talent with big brand names still dominates.

Responding to the data on declining under 19 apprenticeships, Karen Woodward, deputy director for apprenticeships and employer policy implementation at the Skills Funding Agency – the administrative back end of the National Apprenticeship Service – says, “small increases and decreases [in apprenticeship starts] can sometimes be explained by the changes in the activity of one very large engineering company.”

(See Helping SMEs box) Pointing to a longer term snapshot of data however, she observes: “Our data for the numbers of people in this age group starting engineering and manufacturing apprenticeships shows an increase of over five per cent, from 23,510 to 24,820, between 2009 and 2013.”

Paul Jackson, CEO of EngineeringUK, whose organisation is in the process of compiling research into the drivers and blockers for engineering apprenticeship uptake among various age demographics, explained further, “There are a number of factors behind why this has happened but first and foremost we believe that it is because, when an employer is looking for a candidate they want the best and most experienced that they can get. Today, there are far more applicants for apprenticeships with A level qualifications – rather than those who have left school at 16.”

Consequently, says Mr Jackson, employers are opting for the more qualified candidates with more life experience, at the expense of the younger age bracket.

Interestingly, Jackson points out, they are doing this in spite of the fact that apprenticeships for under 19 year olds are fully funded while older candidates require more financial outlay on the employer’s part.

So does the dip that EngineeringUK identified in under 19 apprenticeships

Helping SMEs If SFA’s Karen Woodward is right in saying that the actions of large engineering firms still make a significant impact on the annual record of apprenticeship starts, then we must question what progress has been made on motivating, educating and connecting SME employers with schools and their next generation of employees to raise the profile of local opportunities for rewarding work. readers In the past, the National Apprenticeship Service has been criticised by from SME firms for focussing on big ticket apprenticeship investment from larger companies in order to fulfil government targets.

But Woodward assures that, whatever may have been true in the past, NAS now has a strong focus on improving SME apprenticeship provision in both quality and quantity via its dedicated Small Business Service.

“This delivers specialised information, advice and support to SMEs online and by phone to guide them through the process of hiring and training an apprentice,” Woodward explains.

NAS is also busy developing other SME offerings in line with the recommendations of jewellery entrepreneur Jason Holt who published his SME review of apprenticeship accessibility in May 2012. (bit.ly/HoltAppReview) . These SME offerings include: An Apprenticeships for Small Businesses toolkit The Find an Apprenticeship Training Organisation web tool The Apprenticemakers mentoring service But while these services are good news, it’s not just the formalities of apprenticeship provision that SMEs need help with.

Their issues with attracting and retaining talent are down to a more fundamental problem – lack of engagement with schools and reciprocal interest from teachers and careers advisors.

In addition to Tomorrow’s Engineers, which was recognised in Professor would like to John Perkins’ Review of Engineering Skills (see main article), highlight a number of other best practice examples of skills action by SMEs and schools which are priming local talent pools and helping smaller firms fulfil their skills requirements: Skills Gap: A programme established by the Design and Technology Association which delivers industry training and support in lesson planning to teachers. Skills Gap’s work with Midlands-based Alumet demonstrates its accessibility to SME firms The Market Bosworth School Year 5 Science Fair: Winner of the Best Secondary School Event awards from the British Science Association in 2013, this event reaches out to local primary schools and employers. The physics and engineering zone at the fair is supplemented by zones exploring applications for biology and chemistry and for learning about future social challenges which can be overcome by scientists and engineers Scarborough Engineering Week: Last year this industry-led regional skills event attracted over 2,100 young people. The event highlights opportunities for international, challenging careers within the Scarborough region in an attempt to counteract a ‘brain drain’ as local talent moves to Leeds and London to find satisfying jobs Norbar Torque Tools Engineering Open Evening: The 240 employee firm attracted 122 visitors to its annual open evening this year. The event includes tours of the factory and the opportunity to discuss career opportunities in engineering and manufacturing, both through apprenticeships and graduate routes. Unusually for an SME skills initiative Norbar’s careers evening is not only about recruiting talent for itself, but inspiring a more general enthusiasm for industrial enterprise

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 33

SKILLS FOCUS

It’s the strong engagement factor behind much of EngineeringUK’s work which won it the praise of Professor John

Perkins in his recent, highly acclaimed, Review of Engineering Skills (bit.ly/ PerkinsReview).

In particular, it was the EngineeringUK initiative Tomorrow’s Engineers which drew his attention.

“For engineering and manufacturing, which are not taught as part of the national curriculum, it is really important that young people can see that their maths and science can lead to a pretty sharp future doing a well-paid job with great variety,” says Jackson.

Even more important to Perkins however, was that Tomorrow’s Engineers is not just another initiative acting alone and potentially in competition with other skills promoters.

“Tomorrow’s Engineers has brought together many engineering institutions and companies so that it looks much more like one programme of activity,” says Jackson. “It was very important to Perkins that we move away from having lots of different activities on offer and loads of initiatives approaching schools individually – with those activities rarely being evaluated or sharing data – and toward supporting schools as a unified engineering community.”

Before attending the Big Bang Fair 2014 50% of 11-14 year olds said they thought a career in engineering sounded attractive.

After attending the Big Bang Fair 2014 69% of 11-14 year olds said they thought a career in engineering sounded attractive.

matter? “What’s interesting is that while we have seen the under 19 apprenticeship uptake drop we have seen a parallel rise of around forty per cent in uptake of the engineering BTech.”

So, says Jackson, let’s not scratch our heads too hard about apprenticeship uptake, but just focus hard on ensuring employer engagement is in place. That way, whatever STEM qualification a young person takes, they are familiar with career options and prepared for the world of work.

“Young people are voting with their feet and taking more interest in STEM subjects generally” – a trend which retiring MTA director General Graham Dewhurst also identifies (p50).

“There is a challenge to our sector to make the most of all young people choosing engineering,” continues Jackson, “particularly if they are studying in further education colleges, so that they are ready to be really effective when they enter the workforce.”

Engagement matters

34 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

Perkins’ plan

Following a unanimous vote in parliament in January to support the implementation of Professor Perkins’ recommendations, there is now a plan to extend the reach of Tomorrow’s Engineers by partnering more closely with STEMNET to take advantage of its excellent education contacts. An action plan is also in development to make employer engagement more effective – a specific action plan for this is expected imminently and is based on research with around 200 employers of varying sizes in the engineering and manufacturing sector.

Extending the reach of Tomorrow’s Engineers should help to create greater consistency and clarity of message for George Edwards and his peers – but it will also help to spread that message more evenly.

“About a third of employers find they are tripping over other companies as they try to engage with schools because they are all focusing on the same institutions,” Jackson said.

Tomorrow’s Engineers aims to collect and leverage data to focus employer engagement more effectively and create a bigger overall impact.

Furthermore, this is only one facet of a wider range of recommendations around refining employer messaging and improving experience of engineering in schools which were issued in Perkins’ review and which are now being carried forward by a set of task groups, coordinated by the Royal Academy of Engineering.

There are also task groups for developing cutting edge skills in FE and specialist skills. Each group is chaired

in association with

and

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SKILLS FOCUS

The pipeline for engineering skills leading to professional registration

by a leading industry or academic figure and all groups have now defined initial action plans and identified early collaborative channels through which to deliver 18 of Perkins’ recommendations to facilitate the flow of appropriate skills into industry.

A further 22 recommendations were made to government to augment its support for industry

Source: Review of Engineering Skills, 2013

Immediate aid While priming the pipeline of industry skills is undoubtedly essential for the long term security and competitiveness of UK manufacturing, there are many employers who reasonably point out, that their skills shortfall is far more immediate.

What’s the point of inspiring school children to seek out engineering careers if the industry has fallen to pieces by the time they are ready to enter the workplace, they ask.

They’ve got a point. But this problem too was addressed by Perkins’ Review of Engineering Skills and has recently captured reanimated government attention.

In his speech to industry leaders at EEF’s National Manufacturing Debate in March Business Secretary Vince Cable said: “There has long been a skills shortage in the UK. It has probably got worse because of the economic crisis – there are far too many skills engineers that now go around driving taxis because they were made redundant at the peak of the problem.”

To try and tap into this existing pool of talent and experience, Dr Cable held up the Talent Retention Solution as a potential mechanism for transferring skills back into industry.

The TRS was set in up in late 2011 specifically to divert skilled employees being made redundant in the defence sector into the newly resurgent automotive industry. The scheme has since broadened its scope and has had some notable success stories. Rolls-Royce found around 70 new employees via TRS in the year after its launch.

Professor Perkins recognised the value of TRS in his review and recommended investment in its expansion and development. He suggested that a combination of the TRS model with the services offered by the Daphne Jackson Trust, could help industrial businesses answer their more immediate demand for skilled employees.

The Daphne Jackson Trust is a charitable institution which supports academic scientists, engineers and mathematicians in returning to work after a career break.

Find out more about the Daphne Jackson Trust at www.daphnejackson.org

36 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

skills development.

Early action on these recommendations includes new funding for the Employer Ownership Fund and the development of its offering to make it more SME friendly. There are also plans for more elite training institutions like that at the Manufacturing Technology Centre in Coventry (bit.ly/ MTCTrainingCentre).

But critical to the success of all these initiatives is their

effective marketing and a deep set acknowledgement of the fact that noise and cage rattling about skills shortfalls is not the way to convince young people that they should dedicate themselves to the sector.

FURTHER READING: To find out more about the implementation of Professor Perkins’ Review of Engineering Skills contact stephanie.fernandes @bis.gsi.gov.uk To find out more about Tomorrow’s Engineers go to www.tomorrowsengineers.org.uk

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INTERVIEW

Bright young thing George Edwards, 18 years old and a recent sensation in manufacturing and industrial policy circles talks to Jane Gray about his ambitions and how to bridge the skills gaps by increasing empathy with his generation.

38 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

“T

he financial side is great.

But the fact that this product which I thought up is going to be made – that’s what is most meaningful,” enthuses George Edwards as we discuss a recent deal to licence the manufacture of Gas-Sense, his invention, to Irish pump maker Whale.

Gas-Sense is a simple but valuable product which accurately measures the amount of gas left in canisters by using a string of temperature sensors to find the cold area between the liquid and the gas level in the container.

Mr Edwards developed the product as part of his A Level engineering course work but was prompted to patent it and seek out commercial opportunities after receiving intense interest at the Big Bang Science Fair’s annual Young Engineer for Britain Competition where his project was highly commended.

“It was actually really moving,” says Edwards, recalling his return to school after his first visit to Whale. “That was the first time that it became really apparent that this was actually happening – the real thing.

“Before that, despite what a lot of people had said, I still only really saw Gas-Sense as a school project. And then the penny dropped. This is going to be a real product, on shelves, which people will buy and use.”

Edwards now looks forward to a year working with Whale two days a week to develop Gas-Sense for market entry in early 2015. Sales of about 20,000 units are expected in the first year.

Alone, this achievement for such a young individual would be remarkable.

But Gas-Sense might merely be called a platform for the activities that have recently shot George Edwards to

George Edwards, Engineering Student, King’s School Canterbury

It took five or six prompts for me to have a look at apprenticeships. To be honest when people first suggested it I was a little insulted

prominence in the world of engineering and industrial policy.

In December 2013, Edwards delivered a compelling, no-holdsbarred, presentation at The Manufacturer Directors’ Conference in Birmingham which criticised the incoherence and lack of empathy for young people in the majority of engineering outreach work.

Listening to his presentation was fellow conference speaker and MD of BAE Systems, Nigel Whitehead (p40).

“He decided to champion my views,” explains Edwards. “He summarised them and sent them to an MP he is in regular contact with, Peter Lough, who then took a series of quotes from me to help support an upcoming debate in the Commons.”

That debate was the session which saw a unanimous vote to support the implementation of recommendations in the Perkins Review of engineering skills, a highly acclaimed publication released towards the end of last year (p32).

Mr Whitehead has also taken it upon himself to champion Edwards’ professional development by offering a placement for several months at one of the defence manufacturer’s UK factories.

“I’m touring BAE’s facilities at the moment deciding where and what I want to do when I get there,” says a delighted Edwards.

More irons in the fire

But, unsurprisingly for such a proactive young man, there are other commitments, beyond his schooling, that will need to be completed before the BAE stint can begin.

Edwards has already spent a summer holiday working for international cosmetics manufacturer Coty, developing a robotics training cell where existing and new staff can get to grips with new manufacturing technologies (p62).

INTERVIEW

Speaking out Much of the recent attention and acclaim George Edwards has received is due to his articulate analysis of the failures of engineering outreach programmes and careers advice for his generation.

Edwards is also scathing about the quality of careers advice available for engineering and manufacturing – even in his own public school environment or in well-funded state schools.

A great deal of what he says has been identified before in skills reviews and industry thought leadership forums, but coming directly from a young person, whom adults too often try to speak for, his words have added potency and insight.

“Engineering is particularly poorly served for careers advice,” he confirms. “Even in a school with quite a good careers department, you’d only come away with a couple of pages of information about engineering, while you’d come away with reams if you said you were thinking of becoming a lawyer or an investment banker.”

“There’s not a lot of empathy in the engineering community for my generation,” comments Edwards. “I don’t think they understand how and why my generation perceive things or how to address that.

“Education has changed dramatically from when the vast majority of engineering executives were at school. People don’t understand engineering today as they did then,” he says.

What Edwards means is that his peers don’t believe anything is made in the UK anymore. Of course today’s industry executives are acutely aware of this misconception, but Edwards’ point is that they aren’t going the right way about altering it.

“There is a lot of ‘noise’ made by education and schools outreach programmes in the engineering and manufacturing sector, but little coherent message as far as I have experienced – at least not that really makes an impact on my peer group.”

Greater centralisation and standardisation of the modes of engagement between manufacturing companies and schools would make things easier on both sides says Edwards. It would help to create a more consistent and rational message that young people can follow about the kinds of career opportunities available and the perks of the jobs involved – like pay scales, opportunities to travel and the chance to contribute to sustainability and environmental challenges.

And when it comes to teachers delivering effective careers guidance, an anecdote from George’s own experience shows how even the most well intentioned tutors are simply out of touch with the reality of the rapidly evolving work environment of a modern factory.

“At King’s Canterbury we have form tutors who are responsible for helping us think about our education more holistically and looking to the future.

“My tutor is a maths teacher who studied Chemical engineering at Cambridge – not that long ago.

Yet when he had a factory tour at Coty after I’d presented the results of my work there, he said he had completely forgotten how exciting manufacturing is.”

Driving his point home, Edwards concludes: “If someone with relatively recent experience of industry and a technical degree in a relevant field can feel out of touch with manufacturing and engineering today, just imagine how disconnected other teachers are!

And yet they are expected to advise us on our careers.”

Part of the solution is to increase the visibility of industry role models, says Edwards. His own personal hero is Mark Oscar, an engineer who developed a new type of disposable syringe which has been credited with saving 60 million lives by halting the spread of AIDs via contaminated needles in developing countries.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 39

George Edwards, Engineering Student, King’s School Canterbury

BIOGRAPHY George Edwards engineering student, King’s School Canterbury 2012:

2012:

GCSEs 12A*s and 1B (Edwards says “French was never one of my stronger subjects”.)

Attained an Arkwright Scholarship for young engineering talent sponsored by the ERA Foundation

2013:

Received a Highly Commended award for an early version of Gas Sense in the Big Bang’s Young Engineer for Britain competition.

2013:

Patent application filed for Gas Sense

2013:

6 weeks work at Coty, designing robotics training cell

2013:

Delivered speech at The Manufacturer magazine’s Manufacturer Directors’ Conference, successfully attracting an internship offer and patronage from Nigel Whitehead, MD of BAE Systems

2014:

Secured partnership with Whale for the licensed manufacture of GasSense product

40 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

Training will be formally rolled out to employees this summer and will help them learn about working with robots and overcome misconceptions about the consequences of automation for their work.

Once A Levels are out of the way, Edwards will spend a few more months with Coty improving the flexibility and capability of this cell.

“I’ll also be working on one of their ‘trouble lines’ to look at process engineering opportunities to make it more efficient,” he says.

Working with automation technologies at Coty, a factory Edwards raves about for its ability to alter the negative preconceptions many of his peers have about manufacturing has made a strong impact on Edwards.

“I absolutely love working at Coty.

My friends were completely taken

Early inspiration “I get very excited and motivated every time I go and see a new factory,” comments George Edwards. “It’s what keeps me engaged with engineering – the incredible diversity.”

Of course many of Edwards’ peers have no awareness of this range of opportunity – but Edwards was lucky to have relatively early exposure to the potential excitement wrapped in an industrial career thanks to his scholarship from the Arkwright Foundation, a charitable trust which identifies young people gifted with innate engineering ability and supports them in exploring their potential.

“It was a stamp of approval that came quite early on,” before he was actively thinking about career choices Edwards implies. “It was a confidence boost and my sponsor, the ERA Foundation, was a great network to get involved in. They gave me the opportunity to be involved with a range of trips and activities, in the UK and abroad, which helped highlight the diversity of engineering.” is proud to have sponsored its first Arkwright Scholarship in 2013, supporting Samuel Whaley from Swanage, Dorset.

INTERVIEW

aback when I took them round by the technology, the whole environment.

“It’s amazing and challenging work,” Edwards continues. “It’s often understanding the interface between the human element and the technology which is fundamental to solving problems in complex automated manufacturing systems and the problem-solving approaches for that were something I had never encountered before my time with Coty.”

Edwards’ experiences at the Kentbased factory have had a major influence on his ultimate career ambitions. “I’d like to work at a high level, either developing and selling my own system solutions or working as a systems design engineer for other people’s solutions – ideally I’d also like to work autonomously, to be self-employed.”

The academicvocational divide

So what further education options will Edwards follow to accelerate him towards this goal?

A university degree has been the de facto choice. While the alternative of a higher apprenticeship has raised its head, Edwards admits that despite his relatively enlightened knowledge of manufacturing and engineering career paths, he still had strong preconceptions about vocational qualifications being unsuitable for the academically gifted.

“It took five or six prompts for me to have a look at apprenticeships,” he shares. “To be honest when people first suggested it I was a little insulted.”

Edwards is not easily satisfied by any of the further education options at hand in the UK however, and has set his sights on a spot at the prestigious Massachusetts Institute of Technology in America.

Explaining why this is, Edwards observes, “Engineering degrees in the UK are funny. I don’t like the idea that you have to specialise right away. When you’re at school it’s hard to get a grasp of all the different variations of engineering – so how can you make a decision about what you want to end up doing for the rest of your life? Also – I want a degree that is hands on – not just theoretical.”

Whatever the education choice, one thing is in no doubt, George Edwards’ career shall be watched by many of the most influential figures in industry and industrial politics with interest.

6Osecond Nigel Whitehead, MD, BAE Systems

interview

Nigel Whitehead,

MD, BAE Systems : You’ve recently opened up a number of opportunities for George Edwards (p38) to explore career opportunities at BAE. Do you often take such a direct interest in a talented young individual?

George’s experience is probably the exception rather than the rule, but I certainly take a keen interest in helping promising individuals further their careers. As a company we do try and give as many young people as possible a direct experience of our business.

Every year we provide hundreds of work experience and industrial placements and we also support ‘Take your Son and Daughter to Work Day’. In addition, our schools roadshow will inspire 30,000 pupils at 350 schools this year to consider science and engineering as a future career. : Would you say it is important for industry leaders to occasionally take a direct interest in giving a young person a ‘break’ – do you think it helps to inspire others?

Yes, I believe it can be inspiring to see other young people being bold, taking a chance on something they believe in, and ultimately being recognised for it.

Over half of the senior leadership team in our military air business is made up of former apprentices – an apprenticeship really can be the start of an exceptional career!

: What qualities in a young person are most likely to make an industry leader take this kind of action in your opinion?

A keen interest in the subject and a very enquiring mind. : George has said he felt “insulted” at first when he was advised by some quarters to take an apprenticeship.

What do you think this says about progress on levelling the value of vocational and academic education?

It says to me that we all need to work harder to continue to alter the perception of apprenticeships.

Some great advances have been made in recent years but there is clearly more to be done. An example I often use is the fact that over half of the senior leadership team in our military air business is made up of former apprentices – an apprenticeship really can be the start of an exceptional career! : Do you believe there are distinct roles for graduates and apprentices in manufacturing organisations and if so, why?

Whilst it’s true that our craft apprentices will often start their careers on the ‘shop floor’ as it were, there are no restrictions placed on them in terms of future career moves, and the same holds true for our graduates. If a capable individual is enthusiastic about pursuing a particular area of engineering or manufacturing we encourage and help them to do that.

: What should employers do to manage the career progression of an outstandingly talented young person – would you worry that singling them out too obviously would isolate them from their peers, while not giving them enough opportunities that might lead to them getting bored and moving on?

At BAE Systems, our SIGMA programme has been set up for exceptional young people, whether they joined as an apprentice or graduate. We have not experienced any problems in singling out particularly talented people. Our employees are mature and understand that some people thrive in the more intense and demanding experience offered by our SIGMA programme.

Read a brief biography of Nigel Whitehead at bit.ly/NWBiog.

FURTHER READING: Read recent articles featuring BAE Systems’ apprentices and skills programmes.

Report from Voice of Apprenticeships conference bit.ly/VoiceofAppsDebate Launch of the BAE Systems Schools Roadshow 2014 bit.ly/BAERoadshow2014 BAE Systems 2014 recruitment drive for cyber security skills bit.ly/BAECyberrecruitment

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 41

Learning L to lean

Lean Management Journal editor Victoria Fitzgerald reflects on some of the recent articles featured in the journal to emphasise the possible impact of lean methodology and culture.

Is su e 2 V ol um

e 5

| M ar ch 20 14

ean has well and truly established itself as the dominant valueadding methodology in the manufacturing world. The fascination with Toyota’s exponential growth and waste elimination up until, and now after the recent financial crisis, has compelled leadership everywhere to reevaluate its processes.

At a World Bank Conference in October last year, economist and Nobel Prize winner, Joseph Stiglitz said the winning solution to modern industrial policy

Casting your own burning platform

| w w w .le an m j.c om

Uncove rin and succ g the challenge s es sustainin ses of applying and g lean.

Organisa tions an d intervie Industry Fo ws featu red in th Solutions rum, The Kare is ed nM , Sarah Le Jeff Liker, Joseph artin Group, Pa ition include: thbridge yc Pa and John ris, Karen Mar hex, Arbed tin, Kary Bicheno. n Ross, IN THIS ISSUE: The folly of sustain the valu in g the ga e in lean cultu “relate, repeat ins of lean: Jeff Lik and refra re. me” in m er highlights aintaining The lean a generatio Mary O smolski n effect: Karyn Ro an importa nce of m d Leslie Heckler ss and her teach entoring , underli ers, within an ne in consol y organi idating a the sation. legacy of It’s a mar lean ath perennial on, not a sprin t: Joseph problem whilst fai Pa ling to en of attempting to ris, discusses th the com ap e ga pany wo ge in honest co ply lean strate gies, rks in un nversatio ison. ns that en Cafés, re sure sta the anti- urants and lean: ca restauran fé and the increa Sarah Lethbridge t sector. s tackles sing popu larity of lean in th e

42 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

was “learning to learn” and with every article we receive at LMJ, it is clear that focus always returns to the alteration of organisational culture. Lean is something that an organisation is, not something it does.

As the UK works towards a zero waste economy, leadership is taking the best elements of lean and creating bespoke systems that specially cater to it.

To reveal how more firms are adopting these systems we are sharing a cross section of articles from February and March’s LMJ to showcase how management is utilising and personalising lean. February’s issue looked at turnaround situations and March examined ways to sustain lean, both issues revealed that lean success depends on a firm’s ability to change its culture.

Lean consultant Jeremy Butler embarked on a journey to save his family’s 50-year-old engineering business from collapse.

J

eremy Butler returned to the Midlands in the late 1990s after stints in the US and London.

He said of the experience: “With a degree in economics and two jobs under my belt, I was bright-eyed and bushy-tailed. I had visions of shaking up the fuddy duddy old engineering world.”

His grandfather had started the business in 1952 and his father had developed the organisation into one of the largest independent aluminium foundries in the UK. “Our quality statistics were actually very good, however we achieved this by inspecting the defects - not designing in ‘right first time’ quality.”

Butler delivered training sessions on lean, waste, flow, internal customer/ suppliers concepts; he organised kaizen events and he reorganised the factory floor.

However, Butler attributed the turnaround to the people that accepted and adopted the lean intervention.

“The people made it happen. The knowledge of how to better organise ourselves was within us, we didn’t need telling. We just needed to listen, and then provide the leadership and support to help make it happen.

“Our lean journey achieved so much, we took cost out, improved logistics and made our customers happier. The powerful part was how people’s lives were impacted.”

He turned to author and poet Maya Angelou, to sum up the lean journey: “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

Read the full article at: www.leanmj. com/2014/02/casting-your-ownburning-platform-2

Lean Management Journal

Warehouses: investment worthy or waste?

Dr. Payam Dehdari, senior manager of corporate sector purchasing and logistics at Bosch collaborated with Prof Kai Furmans, head of the Institute of Material Handling Systems and Logistics at the Karlsruhe Institute of Technology, to provide LMJ with the case study results of a two-year project in 16 Bosch warehouses in seven countries.

A

n internal Bosch survey showed a serious gap between the lean maturity level achieved in production compared with the level achieved in the warehouses. To close the gap, Bosch began the Warehouse Excellence (WE) project to evaluate the adaption of the Bosch Production System.

The impact measurement would form the basis for a worldwide rollout in 800 warehouses.

The project ran from November 2010 to March 2012 and contained 16 warehouses as part of the WE group compared to a control group of 56. The WE group were given access to:

1 2 3

Bosch logistics workshops, providing a mix of theory and practice in a training warehouse; Guided learning groups enabling rotational visits to different warehouses; Visits from Bosch interdisciplinary local teams (BILT) where experts coached beside the warehouse manager.

The WE group increased its productivity by 14% compared to a three per cent increase in the control group.

The study proved lean had a positive impact on performance indicators, which Dr. Payam Dehdari concluded should support managerial decisions to invest in lean activities in warehouses.

Read the full article at: www.leanmj.com/2014/02/ warehouses-investment-worthy-or-waste

Lean manufacturing

The fascination with Toyota’s exponential growth and waste elimination has compelled leadership everywhere to reevaluate its processes

The lean generation effect Lean Six Sigma black belt Karyn Ross, along with her teacher Leslie Henckler and her mentor Mary Osmolski shared their unique journey spanning three generations of lean.

F

rom Taiichi Ohno, to Shingijutsu, Mr. Iwata, Mr. Nakao and Mr. Nagamatsu, through Mary Osmolski, to Leslie Henckler, to Karyn Ross. Three individuals learning to think and teach by asking questions enables others to learn, think and solve problems.

Mary and Leslie spent most of their careers working in manufacturing. Karyn has been entirely in services.

Speaking of what she learned from her mentors Karyn said: ”By having an open, inquiring mind, I could just let them teach me at the same time they were figuring out a better way.”

The Toyota Production System is fundamentally about asking people to change. Change is never easy. TPS taught the trio that if they wanted lasting, sustainable change they needed to work with a group; not mandate to a group. Mary said: “In order to do that, I had to really learn about people and take the time to understand where they were coming from and what was important to them.

“I also learned that asking a question is always more effective than shutting down and arguing. Once I did that I could always find a common ground. That has been a life lesson.”

Read the full article at: www.leanmj.com/2014/03/the-leangeneration-effect

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 43

The small Assistive Control, a branch off company of Malvern Scientific, employs only two people but aims to raise 70% of overall company revenue alone

Professor Tim Baines from the Aston Centre for Servitization Research and Practice shows that you don’t have to be the biggest fish in the pond to offer the best service and create new relationships with your customers.

This is a significant opportunity for us to deliver benefits to our customers and enhance revenue. Since the start of the year our revenues from service and spares have already gone up by 25-30% Mark Brian Haigh Engineering Ltd

44 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

I

n earlier articles we explained how companies such as RollsRoyce Aerospace, Xerox and Alstom were all offering advanced services incorporating maintenance, repair and overhaul contracts where revenue generation is directly linked to asset availability, reliability and performance. But how relevant is the concept beyond a few large organisations?

Starting small

Haigh Engineering Ltd helps to demonstrate that servitization is not just for large corporations producing

large and complex products. Based in the West Midlands and employing about 100 personnel, the company manufactures maceration machines and waste separation systems for the waste and waste water sector. Over the past year the company has moved away from just selling its equipment, to offering performancebased lease agreements.

These incorporate proactive maintenance, equipment upgrades, and a monthly payment plan, with development of web enabled remote monitoring now underway.

Haigh is already seeing the benefits of services, with managing director Mark Brian stating the obvious impact the move is having on the company’s customer base. “This is a significant opportunity for us to

Servitization

deliver benefits to our customers and enhance revenue,” he said. “Since the start of the year our revenues from service and spares have already gone up by 25-30%.”

Going smaller

Waste Spectrum Ltd is smaller still. With just 35 employees, it manufactures incinerator machines that provide bio-secure disposal of animal carcasses and medical waste. Similar to Haigh, it is moving away from transactional sales to longer-term service contracts typically lasting five years. These contracts offer guarantees to customers based around equipment availability and reliability, along with capped maintenance costs and monthly payment plans. Again the benefits have been dramatic, with revenue from services set to exceed 20% of turnover from almost a standing start in 2013. Managing director Neil Rossiter, captures the situation well; “Just being an OEM isn’t it anymore, it’s not enough. People want service and they want support and they want back-up,” he said.

Smallest

Malvern Scientific provides still further evidence that servitization is applicable to companies of all sizes. This is a micro company in comparison to other leading examples, employing only eight people in rural Worcestershire, and focusing on the design and production of technologies that assist people with disabilities.

Manufacturing Leadership

In particular, it specialises in computer-based systems that help people with severely limited mobility to access music and photographs, carry out word processing, access the web, send emails, and other IT based activities.

Until recently, Malvern Scientific had set out to do business by trying to sell these systems to its customers as a conventional transaction. The competition however is tough, with the market dominated by three large North American companies who sell similar technologies.

Malvern Scientific’s break through into services has come about through conducting audits of the technology needs of disabled people.

Initially this was simply a means to win extra revenue, but in doing so, the directors realised that users frequently failed to get the value from the systems they purchased. All too often expensive equipment was unused, perhaps because of a simple fault or lack of adequate training and support.

Malvern Scientific used this knowledge to develop an innovative services contract based around the monthly rental of its technologies and support delivered by occupational therapists. To deliver this they have created a new company, named Assistive Control, which employs only two people. The company hopes to achieve 70% of revenue from this service alone.

Overall benefits

Although the potential and impact is becoming clearer both for manufacturers and their customers, these are better documented for the larger companies. Our previous article on servitization draws from the Xerox Impact study, to cite a range of benefits such as improved commercial resilience and growth for the manufacturer, and reduced financial risk and improved focus and asset management for the customer. In addition to these, servitization benefits the economy as a whole through the localisation of value capture.

The small manufacturers mentioned above are part of a cluster of 18 companies in the West Midlands which, through their services strategies, have collectively contributed around

Just being an OEM isn’t it anymore, it’s not enough.

People want service and they want support and they want back up Neil Rossiter Waste Spectrum

In May this year Aston Business School is working in partnership with The Manufacturer to deliver the Spring Servitization Conference where thought leaders from industry and academia will come together to debate the challenges of organisational transformation.

To get involved in the Spring Servitization Conference visit www.aston.ac.uk/ssc2014 To read more about Aston Centre for Servitization Research and Practice’s work with Xerox and other companies, visit www.aston-servitization.com.

two million pounds of gross value add to their local economy in just over a year. Although minuscule compared to a multi-national such as Jaguar Land Rover, we should remember there are around 3000 such SMEs in this region alone.

We are in no doubt that the potential of servitization is immense.

Manufacturers are rapidly moving to a world where it is not simply a competitive choice, but rather a strategic imperative. The challenge is to explain, encourage, and guide the adoption of servitization. Not an insignificant task.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 45

EEF Insights

Manufacturing Leadership

by manufacturers. Encouragingly, many manufacturers are already alive to the opportunities energy efficiency presents and have started to make important changes. Almost two thirds of manufacturers surveyed have undertaken energy audits, for example, while more than half of manufacturers have adopted lighting efficiency strategies.

With this in mind it is good to see that energy efficiency has made its way to the top of the corporate agenda, with the report revealing that an increasing number of CEOs and managing directors are taking direct control over the energy strategies of their organisations. Energy usage and energy efficiency is no longer a minor operational matter – it is a key strategic lever for business success.

Competitive efficiency

I

Wayne Mitchell, director of industrial and commercial sales and marketing at npower explains that staying competitive is all about how you make the most of your energy.

f you are to believe the latest economic forecasts the boom times are – if not quite back – then certainly a lot closer than they have been for years. As the economists keep reminding us, however, growth is tentative and even the smallest adverse breeze could sail us right back into the economic doldrums we have only just left. In this context, the UK’s manufacturing sector, which accounts for around a tenth of the total economy has a huge role to play. If secure growth can be created in this sector then the UK will have a solid foundation on which to build a sustained and powerful recovery. For this to happen however, the manufacturing sector has to be competitive. It is here that energy efficiency will prove crucial.

As one of the biggest industrial users of electricity, there is no escaping the fact that success in the sector is inextricably linked to

46 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

how well organisations manage their energy requirements. It is a no brainer really – energy efficiency is more than an environmental nice-to-have for manufacturers; it is absolutely fundamental to their profitability.

The good news is that this message finally seems to be making headway, and this can only bode well for the wider competitiveness of the sector.

As part of our on-going dialogue with major UK energy users, npower recently issued a research report, jointly undertaken with EEF, which questioned business leaders at 200 UK manufacturers.

With 96 per cent of companies surveyed quoting the reduction in energy bills as a reason for implementing energy management, it is clear from the report that energy efficiency feeds directly into the strategic business decisions made

As one of the biggest industrial users of electricity, there is no escaping the fact that success in the sector is inextricably linked to how well organisations manage their energy requirements This is not to say that the whole picture is rosy however; there are still some important barriers that need to be overcome if manufacturers are going to be able to better manage their energy. 64% of manufacturers cited extensive payback periods as the main barrier to implementing energy efficiency measures, for example, with others noting their company had limited scope to increase efficiency and that other investments sometimes took greater priority.

Such barriers are not insurmountable however, so long as the energy industry and government can cooperate to get the correct policy framework in place. If such cooperation occurs, then manufacturers will be free to make their energy strategies work for them, helping to reduce costs and ultimately keep manufacturers from leaving the UK for less expensive shores. From the perspective of securing our long termeconomic growth this can only be a good thing.

National Manufacturing Debate 2014 5th Annual Debate

Tuesday 20 May & Wednesday 21 May UK Manufacturing Productivity • Where does UK manufacturing productivity rank against international competitors?

• How can UK manufacturing productivity be improved?

• Join us to hear from industry leaders and network with key manufacturing professionals from a range of sectors y of

rtes

Cou ta

o Toy

20 May Tour of Cranfield Facilities 21 May Opened by Sir Peter Gregson, Chief Executive and Vice-Chancellor Keynote presentations chaired by Lord Alec Broers Manufacturing Debate presented by Jane Gray (Editor of the Manufacturer)

Keynote speakers and panel members are: • Rt. Hon David Willets MP, Minister for Universities and Science • Dr. Martin Howarth, Director National Centre of Food Engineering, Sheffield Hallam University • Tracey Marsden, Partner, Nabarro • Ian Waddell, National Officer, Unite • Richard Kenworthy, Director Engine Manufacturing Division, Toyota UK • Warren East, Ex CEO Arm Holding Plc and Non Exec Director BT and other engineering companies

Register now. Attendance is free.

www.national-manufacturing-debate.org.uk

Media Partner

A white paper on UK Manufacturing productivity based on Cranfield research will be published.

Sponsors #mfgdebate

A productive debate A guru to many adherents of lean manufacturing, Peter Drucker once said “Nothing is less productive than to make more efficient what should not be done at all.”

Snapshots from the 2013 National Manufacturing Debate

D

elegates at this year’s National Manufacturing Debate (NMD), hosted at Cranfield University, might do well to bear these words in mind as they gather to tackle this year’s topic, UK manufacturing productivity.

This focus comes as the NMD enters its fifth year. Previous events have discussed the need for a national industrial strategy, the requirements of the manufacturing supply chain for economic growth, the effectiveness of incentives for investment and innovation and the importance of manufacturing to economic recovery.

Now, with that recovery building momentum the event’s organisers felt the moment was right to address the very pragmatic issue of productivity in enabling competitiveness in a global marketplace.

Confusion and conflict

As Professor Rajkumar Roy, head of manufacturing and materials at Cranfield points out, productivity is a somewhat thorny issue for the UK. “There is conflicting information on the productivity of manufacturing,” he told in the run up to the debate.

“There are multiple sources of data about it. Each one of them uses a slightly different basis and sometimes the duration of the data is also different.

This often creates ambiguity in observations about sector performance and productivity.”

48 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

To resolve confusion about productivity trends in the sector in the UK, how these compare to global competitors and what can be done to improve productivity, Prof Roy says this year’s debate will “explore patterns in the last 25 years of UK manufacturing productivity data,” guiding delegates through recent research before allowing them to bat questions back and forth with a panel of experts from industry and supporting stakeholder groups.

These experts will also give presentations prior to the main debate, laying out their experiences of what influences manufacturing productivity.

With representation from union leader Ian Waddell, Toyota UK’s Richard Kenworthy, Sheffield Hallam University’s food manufacturing expert Dr Martin Howarth and more, standpoints on the key challenges to increasing productivity in UK manufacturing should be diverse. But will the proposed

National Manufacturing Debate

solutions be equally varied? Or are similar actions needed in all sectors and across the workforce to boost output and effectiveness?

NMD 2014 Lord Alec Broers, chair of the ERA Foundation will chair the morning presentations at NMD 2014 while Jane Gray, editor of The Manufacturer magazine will chair the afternoon debate.

‘Starters for 10’ – provoking the productivity debate

Undoubtedly the impact of skills levels on manufacturing productivity will resonate across manufacturing sectors.

But the route to increasing skills, and which skills should be improved is less easy to agree upon.

EngineeringUK’s 2014 report on the state of engineering in the UK cited economic analysis which shows “that a 1% increase in the share of the workforce with a university degree raises the level of long-term productivity by 0.2-0.5%”.

Between 1994 and 2005 the number of people in the UK workforce with a university qualification rose by 54% - yet it would be controversial in industry circles, where a decline in vocationally educated employees has recently been loudly bemoaned, to praise this trend as a wholly good thing for British industry.

Can we similarly measure the probable impact of a 1% rise in engineering apprentices on UK manufacturing productivity? Research by the Centre for Economics and Business Research shows that completing an engineering apprenticeship will increase an individual’s productivity by £414 per week – a rise which compares favourably with apprentices in business administration and retail where the added productivity value is £268 and £83 respectively.

But of course the productivity of the UK manufacturing sector no longer solely relies on increasing physical output.

As more manufacturing firms develop service-based business models, the skills sets and technologies required to bring productivity benefits to the sector will alter too. Focussing on technology, Prime Minister David Cameron recently announced £45m of government investment in the Internet of Things, an industrial advance which is essential to the delivery of advanced service systems and which Cameron said, in his speech on March 10 (p72), will also increase productivity.

But to hone in on this relatively blue-skies technology-based productivity enabler is to leap frog more fundamental changes to UK manufacturing kit and IT infrastructure which could transform competitiveness.

Event preview

Delegates can submit questions for the panel in advance by emailing manufacturingdebate@cranfield. ac.uk.

Full speaker and panellist details can be found at bit.ly/ CranfieldNMD2014

UK Maufacturing Productivity

Source : OECD ,CONFRENCE BOARD , World Bank

Data after 2009 are estimated.

Abbreviation

Source

Description

1

MFP

OECD

Growth of UK manufacturing multifactor productivity in %

2

Capital

OECD

Growth of capital input in %

3

GVA

World Bank

Growth of Gross value added in % UK Manufacturing

4

OPH

Conference Board

Output per hour in UK manufacturing (Indexes: 2002 = 100) Index Converted in to Growth

It is widely recognised that investment in automation, in production and business processes, leads almost inevitably to productivity gains – it is also now commonly refuted by economists that the same investments lead to net job losses (see The Economist’s January article on the matter bit.ly/Techinnovationandjobs).

And yet the UK has become a laggard in its investment in manufacturing automation technologies when compared to other industrialised nations - 2012 saw a big uptick in investment, but from a low base and money was largely being spent by automotive suppliers clamouring to meet the demands

of rebounding OEMs. What about other sectors with rapidly increasing demand – like food and drink for instance? How else can the industry hope to meet the challenges of global population expansion and urbanisation if not through increased automation for increased productivity?

These thoughts on skills, service growth and technology offer some taster ideas on the influences and actions that could alter Britain’s productivity and competitive profile in a world of change and challenge for industry.

What other factors would you call to debate? Join your peers at Cranfield University on May 21 and let us know.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 49

Goodbye Graham

Jane Gray talks to Graham Dewhurst about his career achievements and his hopes for the future of British industry as he prepares to retire as director general of MTA.

“F

rankly there was a ‘golden age’ when we used to produce a lot of apprentices and didn’t have jobs for them,” says Graham Dewhurst, director general of the Manufacturing Technologies Association, with a wry laugh as we try and conduct an interview above the hubbub of hundreds of school children attending the Big Bang Fair (p32).

Our discussion takes place in the light of Mr Dewhurst’s recently announced retirement but given our location, his views on skills gaps leap to the top of our agenda. Looking back over a varied industrial career, including 11 years in senior positions at MTA, does Dewhurst really believe that it is so much harder to find skilled people today than it has been before?

“There certainly is a skills gap today,” he confirms. “But the only people who can really address that are in industry. MTA and its members recognise that.”

As proof of this commitment to closing skills gaps, Dewhurst points to various apprenticeship commitments made by his trade association, including the development of a new executive apprenticeship in partnership with the Advanced Manufacturing Research Centre in Rotherham. This higher level qualification defines an exciting vision for the skillsets an engineering leader of the future should hold – from languages, through service and sales skills and of course including technical knowledge and experience.

As well as increasing the visibility of this kind of qualification in schools the major remaining skills challenge on Dewhurst’s mind is the gender gap. “The real remaining skills gap for industry lies in the ratio of boys to girls taking engineering qualifications. That is why it’s fantastic to see that STEM subjects are on the up, with more girls getting involved, and to

The central remaining challenge is to cement our brands in the view of the industrial public

50 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

MTA director general retires

Manufacturing Leadership

I’ve enjoyed every minute of each MACH during my time as DG and it was immensely satisfying to lead MTA through the anniversary of the one hundredth show

see more girls here,” he concludes, pointing out toward the NEC piazza where a ravening horde of 11 year olds are tearing into packed lunches in paper bags.

Legacy and leadership

The Big Bang is making a big impact inspiring young people to take up engineering careers – but despite Dewhurst’s deep interest in supporting that agenda, it’s not the Big Bang that has drawn him to the NEC today.

While his days as deputy general of MTA are now numbered, Dewhurst has no opportunity to wind down the pace of work. He’s just concluded a planning meeting for the 101st MACH exhibition – the biggest machine tools and manufacturing technologies show in the UK which has been held at the NEC in Birmingham since 1976.

MTA has been the organising power behind MACH throughout its long lifespan and Dewhurst singles it out as a key perk to his role as DG of the trade body.

“I’ve enjoyed every minute of each MACH during my time as DG,” he says.

“And it was immensely satisfying to lead MTA through the anniversary of the one hundredth show.”

Dwelling on the historical significance of this anniversary, Dewhurst continues, “It was amazing to look over the very first show brochure and see that there are thirty or forty brands that still exhibit today who were there at the start – that’s what I call longevity.”

The heritage of MACH and of MTA, which was founded as the Machine Tools and Engineering Association in 1910, is naturally a great source of pride to Dewhurst, and to all MTA staff.

But this is not a pride that Dewhurst has allowed to be an excuse for stagnation or hide-bound traditionalism in the organisation. Indeed, it is the role

MTA President presents special award to Graham Dewhurst

Why now?

After a successful career in industry and 11 years with MTA, first as honorary treasurer and then as director general, why is Graham Dewhurst stepping down this summer?

“It’s a natural time,” Dewhurst explains. “I’ve just turned sixty and we’re expecting our second grand daughter to arrive soon.

“I’ve enjoyed all of my time with MTA, but I’ve spent most of my career travelling or staying away from home and enough has become enough.”

Nothing to argue with there – but having invested so much in the recent restructuring

and modernisation of MTA, Dewhurst must have some exacting expectations of his successor?

Honing in on the key challenges he sees in consolidating recent progress, Dewhurst says that strong brand awareness and the ability to raise profile will be essential in the next DG. “A prerequisite for my successor will be to work hard on delivering our two key brands – MACH and MTA – more publically,” he states.

“The canvas is never finished but the management team is now much stronger and more focused.

Our processes and

infrastructure are modern now and we have strong revenue streams which allow us to act for the benefit of members.

“So, the central remaining challenge is to cement our brands in the view of the industrial public.”

Speaking with welcoming positivity, Dewhurst urges committed industrialists to step up and seize this baton.

“If there is someone out there who would like to contribute to the sector in an additional or different way than they have been to date – let us know because this is a great job,” he sums up.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 51

he has played in modernising MTA that Dewhurst counts as the greatest achievement of his time in office there.

The canvas is never finished but the management team is now much stronger and more focused. Our processes and infrastructure are modern now and we have strong revenue streams which allow us to act for the benefit of members

The making of a modern MTA

Life before MTA Prior to joining MTA, Graham Dewhurst had an extensive career working in industry – always in finance, until becoming managing director of Renold’s machine tools division.

“I’m what I like to term ‘an industrial accountant,” comments Dewhurst. “I trained with British Gas and, more or less, I have always worked with capital equipment firms.”

From kit for the North Sea oil industry to precision engineering machines for the high volume air conditioning sector, Dewhurst has supported some landmark deals for his employers including his piece de resistance – a partnership worth over £20m with Carlyle Compressors, part of United Technologies, while working for Holroyd Machine Tools.

“That was a fantastic project to be part of – a team of five supported by around 150 engineers. The partnership started with university research to develop a unique technology offering.

We developed a cell that had never been created before to deliver the lowest cost screw compressors to one of the best companies in the world.”

A finance view on finance Given Dewhurst’s extensive experience in financial roles in industry, how does he view the commonly mourned issue of access to finance for UK

52 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

manufacturers and its influence on investment in the sector?

“There are two strands to this question.

There are those companies that want to grow. If these companies educate themselves so that they know what they need and what banks need in order to develop their business sustainably then finance is there.

“There is no doubt in my mind that finance is available to companies with a clear plan for growth,” Dewhurst states categorically.

“The trouble is that many businesses in our sector are lifestyle businesses which are run solely to bring money home for the family. Quite often these companies are not really interested in a growth path which will disrupt their lifestyle.

“I don’t know how to break into that,” admits Dewhurst. “We’ve just got to work harder at uncovering the companies that do want growth and are capable of growth and concentrate our efforts on supporting them.

“In terms of finance provision it would be helpful to see the development of more solutions which do not require companies to give up a proportion of their business,” Dewhurst concludes.

“Companies can then know that they are growing for themselves – not for a third party.”

“The big changes to MTA started just before I joined MTA,” acknowledges Dewhurst, referencing the decision of former president Paul Maynard to change the association’s name to the Manufacturing Technologies Association from the Machine Tools Association.

“The move changed and broadened our focus to include a wider range of technologies,” explains Dewhurst. It also acted as a catalyst for an overhaul of the internal governance structures and business processes which Dewhurst has been at the heart of.

“A good example of this is the restructuring of the governing board,” points out Dewhurst.

“We used to be directed by a council of twenty members which was very difficult to manage. The new arrangement is much more fit for purpose.

“And at the same time as restructuring, we have reinvigorated,” continues Dewhurst enthusiastically.

“We’ve brought in new people, upskilled and reskilled existing staff – the driver has been to ensure that everyone in the association, and everything we do is directed towards creating value for members.”

Dewhurst admits that the drive behind this reinvigoration has been a fundamental sink or swim argument.

“Trade bodies can be split into two distinct groups today. Those that are really struggling in the aftermath of the recession,” – those who won’t last long unless they take radical action.

“And those that are vibrant, who have restructured with growth. We fall into the latter category,” states Dewhurst.

As proof of this, Dewhurst cites a 33% increase in membership during his seven years as director

MTA director general retires

general. “We knew we would struggle, as many smaller trade associations are struggling now, if we did not realign our activities to ensure, completely, that the money members part with will bring them real value.”

This has meant increasing capability to help members tackle skills problems, access grants and find business – particularly on the international stage.

Manufacturing Leadership

revealing the crux of MTAs ambition. “In the application of government growth funding and the provision of finance we need to understand it’s not about ‘bums on seats’ but about leveraging the best capability we have for the maximum return for the UK.”

Industrial Strategy

Having issued this criticism of government strategy however, Dewhurst mellows in his assessment of what has Quality not quantity been done in recent years to support Dewhurst is a keen advocate of economic rebalance and a resurgence in growth for his sector via exports, UK manufacturing. and importantly, he emphasizes he is “There has been a really confident interested in making economic impact, shift across UK manufacturing during not just creating strong-sounding my career toward high value, high end engagement figures. activities,” says Dewhurst.

“MTA’s been talking to UKTI about “Where there has also been a strong export growth recently,” he says. push on technology I see cause for “They have targets to ‘touch’ a very great positivity. The flourishing of the high number of companies to. In our Catapults today is an important part of view, for added value to the economy, that technology focus,” he continues, they should be aiming to engage with congratulating the current government less and to focus on those that can for developing the Catapult concept yield more. which was first clearly defined under the “Then we will start producing a body previous administration and the direction of mid-sized companies that can rival of1Peter Mandelson. the Mittelstand,” Dewhust continues, Chief exec MTA Recruitment advert v2_Layout 19/03/2014 17:52 Page 1

“It’s really very significant that the coalition government picked up many of Mandelson’s ideas and continued with them,” comments Dewhurst.

“We are seeing the foundations of longtermism in industrial support from government.”

It doesn’t seem as though this is widely recognised by manufacturers however – why is that?

“We’ve not seen a full term go by yet,” Dewhurst responds. “After the next election, whichever colour gets in, we’ll see more acknowledgement and faith from industry in the long term commitment of government – if they do continue with the current industrial strategy of course!”

So Dewhurst is stepping out of industry at a formative time for the sector. Does he have a parting message?

Letting his characteristic modesty take over Dewhurst speaks with sincerity, “I just hope you think I have helped to modernise and improve the association. I’ll be watching with interest to see what happens next, for MTA and for the sector.”

The core of engineering based manufacturing

AT THE HEART OF THE UK ECONOMIC RESURGENCE Chief Executive – Manufacturing Technologies Association SIX FIGURE PACKAGE • UK WIDE REMIT WITH A LONDON BASE As the UK economy moves firmly into growth, the Manufacturing Technologies sector is leading the way. New ground is being broken as Government and markets recognise that the sector is absolutely key to the balanced and vibrant economy the UK needs.

The sector’s trade association, the MTA, is also resurgent with a growing membership, a widening range of activities and a thriving, commercial, trade exhibition - MACH. A retirement has created an opportunity for a new Chief Executive to lead the next stage of the MTA’s journey. It needs someone who is passionate about British Manufacturing and can deliver the message as an articulate and compelling spokesperson. The new Chief Executive

will be capable of leading the MTA’s team, delivering value for members and building on the MTA’s already strong financial position.

Based in Central London but with a UK wide remit your prior experience could be in a trade association but equally could be in Industry. Knowledge and understanding of UK manufacturing is a given and the credibility to inspire others with a vision of its future a must.

The Manufacturing Technologies Association 62 Bayswater Road London W2 3PS www.mta.org.uk

If you are interested in this role please email Ian Day at iday@ciglondon.co.uk or Neil McLaughlin at nmclaughlin@ciglondon.co.uk or call us on 0207 127 8180.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 53

Consider your alternatives Where could you go to source non-bank finance for your growth and investment plans? A new web portal just made the question much easier to answer.

L

ast month a group of seven alternative finance providers launched alternativebusinessfunding.com, a new portal which does the hard work for those searching for non-bank funding.

Between them, the seven collaborative members account for around 85% of the alternative finance market in the UK and have collectively lent £580m to British SMEs. The website launch marks the start of a wider campaign to encourage a more collaborative environment for the provision of business support. The website itself is highly collaborative with each member sharing and recycling applications for funding which they do not feel they can cover alone or which are not suited to their particular funding structure.

The concept was welcomed by the CBI with Matthew Fell, the lobbying group’s director for competitive markets saying: “There are lots of innovative alternative finance products on the market in the UK for growing firms but the simple fact is that most businesses aren’t aware of what’s available, or how to get hold of it.”

54 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

He said the new website would make the process much more straightforward for busy SME business leaders.

2013 saw a rising interest in alternative finance providers as bank lending to SMEs proved stubbornly stagnant – or indeed declining.

Meanwhile, a report published last year by the National Association of Commercial Finance Brokers (NACFB) showed that alternative finance options including asset finance and peer-to-peer lending had hit a five year high.

Since 2011 the use of peer-topeer lending as a means of backing business plans has shot up by 80% said the NACFB. The seven founding organisations behind alternativebusinessfunding.com are: Collectively, CrowdCube, Funding Circle, Market Invoice, Platform Black, Seedrs, Zopa and Pensionledfunding.com.

Observing news of the launch of this portal David Keene, CEO of automotive and medical device manufacturer RDM

Group and also founder of the peer-to-peer lending service Thincats commented: “This is a very good idea because no one funding solution fits companies these days and anything which can provide more funding avenues for companies who are turned down by one quarter is very welcome.”

Mr Keene said this concept was discussed with mainstream banks a couple of years ago “but it seems that you have to have entrepreneurial companies like those that have come together here to actually make it happen.

Banks are too slow and too stuck in rigid internal sign off procedures to really help today’s businesses,” he summed up.

FURTHER READING: See more about the launch of alternativebusinessfunding.com at bit.ly/Altfinanceportal

Snapshots

The Great Unloved Research from Endless LLP shows 41% of foreign owned firms in the UK are loss making or only marginally profitable.

E

ndless’ recently published findings are based on research with firms turning over between £25m and £500m.

There are 2,096 foreign owned firms in this bracket in the UK and 596 of them are manufacturers.

Of those manufacturers more than a third were found by Endless to be underperforming, incurring a total operating loss of around £310m for the UK economy.

Endless has dubbed these underperforming, often neglected firms The Great Unloved.

While admitting that there are obvious examples of extremely beneficial foreign investment in the UK – Tata’s various businesses are a case in point – Endless proposes that for many, local ownership would be preferable. Its research shows that among UK owned SMEs just 27% are rated as loss making or marginally profitable.

Citing an example of how a transition from disengaged foreign ownership to active local ownership can turn a company’s fortunes around, Endless cites its recent investment in James Briggs a leading UK aerosol and specialty chemical manufacturer.

FURTHER READING: To read more about this investment and The Great Unloved research see bit.ly/GreatUnloved

Finance & Professional Services

The currency of risk

D

Guido Schulz, global head of strategy at AFEX, the leading non-bank provider of global payment and risk management solutions, talks about currency risk management for manufacturers.

ealing with foreign currency fluctuation is commonplace for manufacturers and in recent years UK firms have had to manage the implications of sharp movements in the value of the pound.

Currently, sterling is on a run, which is causing headaches for many in the manufacturing sector.

While those importing large quantities of goods and services will have seen their purchasing power increase, firms looking at export markets to drive growth may have seen their profit margins squeezed and a tailing off in demand.

Whether you are a net importer or exporter, currency fluctuations are a perennial issue, so what can manufacturers be doing to mitigate their risk?

Know where you stand

Firms need to have full visibility of their overall exposure.

Those with multiple cross-border trading partners will quickly develop a complex web of currency liabilities.

Managing those and recognising the current value of future payments or receipts, is hugely important.

This has not been easy historically but good FX solutions providers now provide online treasury functions that provide consolidated, real-time views of currency exposures.

Tactics to consider

Actively manage risk. Appropriate solutions will vary case by case and manufacturers need to think carefully on the approach they take.

The basic Forward Contract - locking in a rate of exchange for a future payment - remains the most popular

approach. It’s a basic but sensible strategy for businesses with scheduled payments or receipts, offering a hedge against unpredictability and allowing for fixed, reliable forecasts from expected cash flows.

Foreign Exchange Options (FX Options) offer a more sophisticated means of hedging against currency volatility. They basically limit the downside of adverse currency movements while retaining some potential upside if exchange rates move favourably.

A Forward-Extra (sometimes known as a Risk-Reversal or Forward-Plus) would offer a ‘protective rate’ – effectively guaranteeing you a price if the base currency weakens. If the market moves the other way however, you may also have the opportunity to exploit that shift and buy at a cheaper rate.

Mix it up

It’s very unlikely that dealing only with FX Options will be the best approach. For our larger clients we typically recommend a combination of Forward Contracts, options and buying in the market at the spot rate. Doing so creates a diversified currency portfolio with the obvious riskmanagement benefits.

Play it straight

There is a temptation when handling currency to employ strategies in a bid to beat the market. But doing so with long-term success is a hugely difficult task and heavily loaded with risk.

The strategies described above may involve potential upside – increased margins or opportunities to discount on price – but their core benefit is the certainty they offer for cashflow and business forecasts.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 55

Rob Shaw

Employee of the Month April 2014 Rob Shaw

Plant Engineering Technician, Allied Bakeries

CV in brief Rob Shaw Age: 37 Education: HNC Electric Engineering, HNC Mechanical Engineering, and NVQ Level 3 Electro Mechanical Engineering. All courses undertaken at General Motors Career to date: Apprenticeship & career at General Motors (17 years) Dürr Limited (1 year) Allied Bakeries (2 years) Hobbies and interests: Sports, particularly cycling. I also enjoy building and flying radio control models

56 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

EMPLOYEE OF THE MONTH

: What is your role and what are the main responsibilities?

As an engineer my role is to support our manufacturing function to make sure we get consistently great products. This involves a broad range of responsibilities; anything from responding to when a machine breaks down, installing and making modifications to equipment, to assisting with the commissioning of any new equipment. : What are the key technical skills you use?

Perhaps the most obvious but important skill in my job is to have an in-depth knowledge of the bakery systems that we use. If something goes wrong with these machines, it’s my responsibility to get to the root of the problem and find a solution in the shortest time possible. Our newest plant makes three loaves per second, which is an impressive 10,000, 800g loaves every hour. Every second matters if something does break down, which is why I need to fully understand the machines to fix them quickly. : What personal characteristics help you in your role?

I’m very analytical and tenacious when there is an issue. It’s important to keep asking ‘why’ a problem is occurring, as that leads to the best solution. It is essential to be able to keep calm and confident in a pressurised situation. The ability to communicate clearly is also important. I’m often speaking to bakery operatives and other personnel across the business and need to explain an issue using non-technical terminology so that they understand. : What do you consider to be your biggest personal success at the company so far?

Allied Bakeries recently opened a new bread plant at Walthamstow, as part of our national capital expenditure programme, which is the biggest long-term investment in the sector.

I assisted in the commissioning and optimisation of the packaging plant, and I’m very proud of how well it ran from day one. We’ve seen low fault and waste levels, so a great result for the business. I’ve also just been promoted – moving from a shift engineer who responds to day-to-day issues into a managerial role.

: What are the most rewarding parts of your job?

Seeing good quality bread coming off the end of the line with high efficiency rates and no damage. It’s vital to maintain quality for both our customers and consumers. Engineering plays a big part in this, as it makes sure that the systems are optimised for our colleagues in manufacturing roles. : Do you have a grand career ambition?

My immediate ambition is to excel in my newly appointed role as plant engineering technician. I’ve worked in manufacturing and engineering across several sectors for just over 20 years but have only been in the bakery sector for a year, which is why I’m keen to gain more experience in this area. Ultimately, I’d like to progress into central engineering to work across some of the other Allied Bakeries sites, and move to a senior management role. : What first attracted you to a career in manufacturing?

I’ve always had a passion for modern technology, so working in an industry, which allows me to be close to this every day is what motivates me.

It’s also been great to have the foundational skills and qualifications that I do because these are transferrable across manufacturing in different sectors. This has meant I could move from motor manufacturing to bakery manufacturing, and still retain and use the same skill set.

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Women in manufacturing

Coming off the back of International Women’s Day last month, Victoria Fitzgerald takes a look at some of the young women looking to make waves in the UK manufacturing world.

I

nspiring change was the theme for this year’s International Women’s Day held last month and with the UK currently experiencing the lowest percentage of women in manufacturing roles in the EU, it is evident that now is the time for that change to happen.

Women represent a mere 8.7% of engineering professionals in the UK, compared to 26% in Sweden and 29% in Bulgaria. More concerning is

the fact these numbers have remained consistent since 2011.

School-aged girls are less likely to study STEM subjects at GCSE, this trend continues through A-level and usually these subjects are a prerequisite for studying engineering at university or embarking on an apprenticeship in a manufacturing discipline.

However, the gender gap is not passing unnoticed. Initiatives are

Attainment of boys and girls across key stages

Men

58 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

WORKFORCE & SKILLS

Women

Source: DfE, Statistical First Releases.

What’s your relationship with ERP?

Engaged Still Looking

It’s Inspiring In a Relationship It’s Complicated

ERP should inspire your business, not complicate it.

Update your status. Epicor ERP is built to bring out the best in you and your business. www.epicor.com/uk/compatibility

Questions? Contact us at: Phone 01344 468 468 E-mail ukmarketing@epicor.com Copyright © 2014. Epicor Software Corporation. Epicor, the Epicor logo, and Business Inspired are registered trademarks of Epicor Software Corporation.

appearing across Britain to inspire young women to pursue STEM subjects and drive them into manufacturing roles.

In January, trade association British Glass launched Women in Manufacturing, an action aimed at uniting education, government and industry to raise awareness of well-paid, fulfilling jobs within the sector and to push a cultural shift through education to eliminate gender stereotyping from school to industry.

British Glass CEO Dave Dalton said: “Modern manufacturing and engineering is a technologically advanced and innovative sector in which to work, however young girls and women are not inspired to take up STEM related studying or careers.

“Initiatives like this are crucial in helping to dispel preconceived ideas about the reality of jobs in engineering and manufacturing, and to encourage the next generation of women to consider these sectors as a possible career.”

In addition, Cranfield University, producers of the Female FTSE Report since 1999, in collaboration with EEF released the first FTSE 100 - Women in Manufacturing in 2013, to identify opportunities and successes available to women in the modern manufacturing workplace, while highlighting female role models in the industry. The 2014 report was released at the end of March.

Professor Elena Rodriguez-Falcon from the University of Sheffield champions women in manufacturing and is instrumental in the university’s efforts to influence policy and work with schools to raise the profile of women in manufacturing. Rodriguez-Falcon told : “During the Second World

Young women are currently lacking career guidance and positive role models from the sector. We need to change the culture and influence media, but we can’t do this on our own Professor Elena Rodriguez-Falcon University of Sheffield

60 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

War, women were bombarded with posters telling them they could succeed in manufacturing. After the war the promotions disappeared and they were expected to return to the home. Many of them didn’t want to.

“Young women are currently lacking career guidance and positive role models from the sector. We need to change the culture and influence media, but we can’t do this on our own.”

Born in Mexico, Rodriguez-Falcon’s goal was to help people and she was able to do that in an engineering role.

She said: “I spoke to a girl of 13 recently

who told me that she wanted to be a nurse because she wanted to help people. I said ‘do you know you can help people by pursuing engineering?’

I used the example of engineers that design and produce prosthetic limbs.

She was shocked because she had no idea that manufacturing had anything to do with this.”

Thanks to the endeavours of such people and initiatives the landscape is changing. has identified three women and a group of students at different stages in their careers who are an inspiration to young women everywhere.

Profiles

Vex Impact

H

annah Ansell, Jo Foley, Bella SauchellaTice, Hannah Nixon, Lizzie Oakley and Phoebe Hancock are all GCSE students studying product design or engineering at East Barnet School in north London. The students comprise Vex Impact, winners of the VEX Robotics Competition 2013 at Birmingham’s Big Bang Fair. The win saw the team travel to Los Angeles to compete

in the VEX Robotics World Championship against the winners of 500 tournaments from across the globe.

Vex Impact missed out on the trophy but scooped a special judges’ award for their efforts.

Hannah Ansell and Bella Sauchella-Tice, who between them are studying product design, engineering and ICT, both agreed that they have more opportunities for the future after choosing these subjects. The pair hope to pursue careers as rollercoaster engineers.

Jo Foley is the only girl in her engineering class, an environment in which she thrives. “Being surrounded by boys makes me want to prove that I can do better,” she said.

Team Vex Impact returned to this year’s VEX Robotics Competition at the Big Bang Fair in Birmingham.

Women in manufacturing

WORKFORCE & SKILLS

Ciara Norris

1

8-yearold Ciara Norris is an A-level student at St Helen’s school in Middlesex. She was recently offered a place at Cambridge University to begin studying engineering in September.

Norris’ ultimate goal is to become a bridge engineer, she told : “As a child my parents took me to see bridges all over the world, including the Golden Gate Bridge in San Francisco. Since then I have been fascinated by them and knew I wanted to some day be a bridge engineer.”

Anna Schlautmann

A

s ’s 2014 Apprentice of the Year, Anna Schlautmann is a trailblazing role model for young women. Not only is Ms Schlautmann a third year logistics apprentice, studying for her Business Management BA (hons), she is on ’s editorial advisory board. Schlautmann is passionate about promoting apprenticeships, particularly for women. She has given numerous talks at career events and believes that it is “vital for students to see female apprentices promoting apprenticeships themselves.”

She adds: “I have visited various girls’ academies in Manchester to promote logistics. The girls were aged between 13 and 16 and were very keen to find a career path that suited them.”

She told : “I would never have imagined myself working in manufacturing, despite my dad working in that environment.

You always assume it’s going to be dirty but it’s not like that. Fifty per cent of apprentices at MBDA are female, so you can ensure that there is no problem with females working in a manufacturing environment.”

Schlautmann’s short-term goal is to achieve a first in her degree as well as excellent reviews in all her placements.

“At MDBA we have an experienced workforce. I need to ensure I contribute to this meaningfully, gaining logistics and business knowledge from the skilled, retiring engineers.”

Ciara told that the teachers at her school have been supportive of her and her classmates in studying design.

She has also had the opportunity to take part in extra curricular engineering courses with independent educational organisation, SmallPiece, which runs hands-on STEM activities and engineering courses for pupils in Years 6-12.

Norris said that it was a “surreal but exciting experience” being accepted at Cambridge, especially because of its reputation.

When asked the solution to getting more women into engineering and manufacturing, she said: “People know about engineering and manufacturing but they don’t know about the different disciplines. Making everyone aware of exactly what each discipline entails will draw more women in.”

FURTHER READING: Women in Manufacturing Cranfield University www.som.cranfield.ac.uk/som/n254/ Women-in-Manufacturing The Glass Academy www.theglassacademy.org/events/ women-manufacturing-westminsterlaunch SmallPeice Trust www.smallpeicetrust.org.uk/ April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 61

Engineer Nick Laughton established the Coty training cell for George Edwards’ work experience.

Making a name in manufacturing Mark Springer, engineering director at Coty International explains how a new training cell, developed as a student work experience project, is challenging employees and developing critical robotics skills for the company.

C

oty’s Ashford factory is a colour cosmetics plant making lipsticks, foundations, mascaras, lip glosses, eye and face powders and more for the UK and global markets.

Products are sold under brand names including Rimmel, Miss Sporty, NYC, Astor and Manhattan.

The manufacturing process at Coty, Ashford is highly automated.

Among other technologies Adept Cobra S600 robots carry out the assembly of pressed powders into receiving packs.

The robots are controlled via V+ language and software and in order to meet the needs of the business it is

62 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

essential that employees are familiar with this language, understand it and, when necessary, can manipulate it.

In an attempt to strengthen in house skills Coty decided last year to establish a robotics training cell to challenge and develop staff.

Taking a leap of faith, the company also decided that it would use a work experience placement from a local school to establish the cell.

The logic was that if we could train a secondary school student within a six week period with a focused development plan, we could definitely deliver development for our existing staff.

Coty contacted The Kings School in Canterbury and was fortunate enough to recruit, on a six week period during the school holidays, George Edwards, an enthusiastic and talented engineering student (p38).

Mr Edwards was challenged to develop training material which would raise aptitude in general fault finding among the workforce, laying the foundations for confidence in resolving more complex issues.

Nick Laughton, a mutli-skilled engineer who has worked with Coty for 15 years set the facility up, converting a redundant robot cell into a fully functional training cell before asking Adept Technology UK to help develop Mr Laughton’s training management capabilities and outline a framework for Edwards’ ongoing development.

Edwards undertook some initial training with Laughton and was given the following short term objectives and goals: Learn V+ Language basics Understand the benefits and impacts of automation within a manufacturing environment Write basic programs to….

Pick & place componentry Stack & de-stack componentry Analyse cycle times to establish the benefits of speed vs. accuracy Basic count sequences Introduce external influences via sensors to simulate “real life” operational environment Tooling selection including complex processes like removal and assembly of mechanical applications The writing and use of sub-routines that could be called on depending on the various tasks required Edwards was also given a stretch goal – which challenged him to write the name

Robotics training and composites

In an attempt to strengthen in house skills Coty decided last year to establish a robotics training cell to challenge and develop staff George in three colours using the training robot. It’s a simple-sounding request, but is in fact an extremely complex operation.

Edwards completed all of the above objectives including the stretch goal during his six week placement.

Business benefits

Coty has benefited from the establishment of this training cell in many ways.

It has brought personal development for Laughton and the engineers assigned to powders, but below is a list of other benefits: Improved interrogation of the software to aid problem solving Use of existing sub-routines to improve calibration techniques and therefore overall equipment recovery and reliability Improved understanding of associated equipment such as Cognex vision systems and how they integrate and influence the robot cycles and actions Resolved several long standing issues with regards to equipment performance Developed processes and procedures to ensure a consistent approach to fault finding and rectification on the Adept systems The engineers have gained a new level of confidence with their interaction with the Adept robot system Improved the technical relationship with the machine providers ADMV. Engineers are able to communicate with confidence and understanding

Next steps

Coty has arranged for Edwards to return to the factory for a short stint during his gap year.

During this placement he will further develop the robotics training programme and expand the use of the cell.

Given the benefits gained from the first phase of the training cell’s development, Coty’s management is very excited about the potential value of adding new technology to the cell and including more staff on training initiatives.

Manufacturing Technologies

Composites for the masses New technology from Moorfield, developed with help from the Technology Strategy Board is democratising the manufacture of composite films.

Via nanoKTN, the UK Knowledge Transfer Network for nanotechnology, the Technology Strategy Board delivered around £90,000 to Cheshirebased Moorfield to support proof of concept for its nanoCVD equipment – money which was also used to host awareness raising workshops which educated potential users about the benefits of its technology.

Moorfield’s nanoCVD promises to make commercial production of composites accessible to small and medium sized manufacturers and research facilities. Until now, if a company started to develop a product using graphene they would either have had to buy samples of material produced by a third party, set out to construct their own production system, or look to purchase a commercially available unit according to Moorfield’s product manager Jon Edgeworth.

These options are costly in time or money however. “Moorfield’s new technology, which uses a production method called chemical vapour deposition, allows users to gain in house graphene production capability quickly and affordably,” says Mr Edgeworth. Furthermore, running costs for the equipment are low and its cycle time for the production of graphene films is around 30 minutes compared to the 8 hours many machines need.

Moorfield’s nanoCVD is ideally suited to the production of highquality continuous graphene films that are particularly promising for applications in high-performance electronics, sensors and as transparent conductive layers – for touchscreens and photovoltaics for example.

Commenting on where the strongest interest in Moorfield’s nanoCVD has come from so far, Edgeworth says: “So far, our system has been particularly appealing to academic groups

working in graphene R&D. But we have also seen interest from industrial teams who want a ready, flexible supply of CVD graphene for product development. We expect this industrial interest to grow as graphene research moves further towards application.”

While graphene was hailed as a “miracle material” when it was discovered in 2004, commercial uptake has not been rapid as some would have hoped in the UK. Last year, research was released which showed the UK, the birthplace of graphene, had filed just over 50 patents for its commercial use since its discovery.

Meanwhile, scientists and industrialists in China had filed 2,200 patents on the material, in the US more than 1,700 patents had been registered and South Korea had almost 1,200.

Government investment in the commercial development of graphene has increased under the current administration, but is it enough to make Britain a leading light in this field? Paul Mason, head of emerging technologies at the Technology Strategy Board comments “The UK science base in graphene has identified a wide range of potential applications for the material, and our approach now is to help UK companies evaluate the potential of the new material in their specific applications.”

Mr Mason continues, “Business will know more about the precise performance requirements and price points in their markets, and we are helping them to test the feasibility of using graphene as a material in them.”

TSB’s go-to method for delivering this assistance is through competition funding and the organisation is still open for applications to the ‘Realising the grapheme revolution’ competition.

Contact the TSB competitions team on 0300 321 4357 or to find out more go to the competition web page at bit.ly/GrapheneCompetition Read more about Moorfield’s nanoCVD technology and TSB’s support for its development at bit.ly/Compositesformasses

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 63

Future factories today T

Will Stirling reviews some next-gen technology being developed for Industry 4.0 on display at the world’s biggest industrial technology show, Hannover Messe 2014.

he future of manufacturing or synchronised, grand scale marketing campaign? If you are unsure about the importance or relevance of Industry 4.0, the line-up of German companies aligning their products and services to the move at Hannover this year should convince you ‘Integrated Industry’ is real and it’s coming.

Beckhoff

Beckhoff’s Google Glass application allows you to see the status of a machine from a remote location

Automation company Beckhoff has developed several products around PC-based control technology, convinced that, as the “generally accepted technology platform”, PCs will run factory automation like condition monitoring and robotics. One eye-catching product is its Google Glass for industrial automation, where Beckhoff has developed the sensors and interface to see the status and the specific events of a machine. “You can document what you see, and because it is hands-free you can

control the machine anywhere, for example at home you can see the status of a machine at work,” says Martina Fallman of Beckhoff. “You don’t need to use Google in an open network but can communicate directly via a WLAN network.”

Google Glass is voiceactivated, allowing the user to not only switch the machine on and off, but also ask questions about its operating performance.

not what is bad,” says Dr Nestle. “It’s very difficult to teach a machine what is bad because you have to define what is bad – there are lots of reasons for what might be bad in the production process. You want to produce goods, not errors.”

Festo’s SupraMotion suite of technology will demonstrate the linear and rotary motion of levitating objects in all directions and all spatial positions

Festo Typically putting on head-turning exhibition stands with slick, animatronic-themed displays of automation equipment, Festo is demonstrating several applications of Industry 4.0 at Hannover. One is an air preparation device that monitors the air consumption of complicated production processes. “By using methods of artificial intelligence on this device you can ensure the quality

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of your production process easily,” says Dr Volker Nestle, head of future technology at Festo. That’s a typical example of how intelligence can today be integrated into standard components of production today quite easily.” The technology on display uses compressed air but it could use an electrical current.

How does the artificial intelligence (AI) work? “It will learn what is a good process,

For example Festo is working on several AI methods to measure flow consumption. Powerful processors on the component receive data from sensors and compare statistics to check if the data is good, or typical, or if there’s something wrong with the process. “Because you always monitor the same signal, by doing some statistics such as algorithms, on the signal, it reveals when there are sup-optimal flows,” says Dr Nestle.

As well as its AI technology, Festo will demonstrate education solutions for integrated automation, using the “Transfer Factory” by Festo Didactic, superconductors for automation technology and developments from the Bionic Learning Centre at the Hannover Messe.

Hannover Messe 2014 preview

Manufacturing Technologies

The new GA VSD+ is smart, efficient, quiet.

Harting A big family-owned manufacturer of connectors, cables and automation equipment, Harting was an early engager with Industry 4.0. “How do you automate?” asks Philip Harting, a partner and senior vice-president for connectivity and networks at Harting. “In Germany we talk about the automation pyramid, which means over the next 10 years it will look different, it will be diluted. Communication then will not only be vertical and horizontal but in all directions.”

Harting has moved from being an engineering company manufacturing hardware such as transponders and switches, to developing software as well, now providing complete packages via a new company launched in January, Harting IT System Integration. “These [Industry 4.0] developments are being driven by IT,” says Mr Harting, whose company is using industry applications like predicative maintenance to demonstrate Industry 4.0.

Collaborating with software company SAP’s HANA data cloud, at the Deutsche SAG meeting in September Harting demonstrated to 3,000 people the simulated operation of a pumping station. The demonstration showed that specific maintenance process were initiated directly from data monitoring. Equipment operating data was transferred via sensors to the HANA database. “In a microsecond it can compare [this station’s performance] to the equivalent data generated in more than a hundred other locations, forecasting, for example, at this location in five hours within a certain probability the pumping station will stop working,” says Mr Harting.

Such accurate, automated predictive maintenance could save a lot of expensive downtime in the automotive and power generation industries.

Small compressor, big ideas Atlas Copco has taken a huge leap in compressor technology. The GA VSD+ is an oil-injected, rotary screw compressor with Variable Speed Drive technology that brings unprecedented benefits to the general industry.

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The biggest innovation in small compressors in 20 years New Atlas Copco IE4 motor technology Increased energy savings - 50% on average Canopy size 55% smaller through innovative vertical design Running quieter than ever at 62 dB(A) A 12% leap in Free Air Delivery (FAD)

For more information please visit: www.atlascopco.com/gavsdplus

In Germany we talk about the automation pyramid, which means over the next 10 years it will look different, it will be diluted.

Communication then will not only be vertical and horizontal but in all directions Philip Harting

Atlas Copco Compressors

Atlas Copco Ltd Swallowdale Lane Hemel Hempstead Herts HP2 7EA Phone: 0800 181085 Fax: 01442 234791 E-mail: compressor.sales@uk.atlascopco.com www.atlascopco.co.uk

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 65 Atlas Copco VSD+ ad 93x214.25.indd 1

19/03/201

Lombard

Right tools for the job I

Manufacturing Technologies

How tooling manufacturer and service provider A & S Tooling secured more contracts and expanded its operations through carefully planned automation investment.

About A & S Tooling A & S Tooling manufactures and services cutting tools for the engineering and woodwork industries. Established in 1990 by Jeff Smith, A & S Tooling provides products and bespoke tool manufacturing services to a range of businesses, from SMEs to multinational companies across sectors including aerospace, automotive, motorsport, medical and engineering.

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n a hugely crowded marketplace, regularly investing in new machinery is imperative and with technology becoming more advanced, staying up-to-date is the only way to remain competitive. Many large cutting tool manufacturers produce the highest standard products with world-leading equipment, making it difficult for companies like A & S Tooling to service them.

This, combined with a vastly increasing workload, encouraged owner Jeff Smith to invest in a fully automated production line in order to adapt to ever-evolving technological advances. This would also allow him to keep in line with customer demand and therefore acquire equipment of the same calibre as that of his larger competitors.

Having always been aware of the need to invest, Smith has regularly purchased machines that help with the development of his company.

More recently he made the decision to invest in a Walter Helitronic GWC CNC grinding machine, complete with a fully automated robot arm to control the machine.

A fully automated production line such as this minimises the risk of errors and each end product is quality checked twice, once by the machine itself and then by human operators. The use of robotics enables A & S Tooling to run production 24 hours a day, seven days a week, tripling productivity and allowing the company to run more efficiently.

Our success is due to our continual investment in new plant – the cost of which would wipe out our cash flow without funding support The increased productivity has enabled A & S Tooling to fulfil its backlog of work while taking on more contracts.

It also offers the capacity to fulfil these contracts in a shorter time frame. As a result the company is looking to employ additional staff and forecasts an increase in turnover of 25%.

In order to preserve the company’s cash flow during the acquisition, Smith worked with asset finance provider Lombard, to secure a hire purchase facility worth £220,000, which was combined with a government initiative to fund the new equipment.

Traditionally a lot of standard tools are bought abroad and exported due to low costs, but this investment gives A & S Tooling the capability to move into this market with competitive price points, making them more competitive on a global scale.

A & S Tooling’s customers will also benefit from the acquisition. Thanks to the overnight and automated production, the company’s overheads are lower, which will enable it to offer lower prices.

Smith said about the move: “There are many reasons why investment is so important, from the ever-adapting range of tools that we need to keep up with, to the simplicity of just remaining competitive and even in business.

Our success is due to our continual investment in new plant – the cost of which would wipe out our cash flow without funding support.”

FURTHER READING: Find out more about Lombard at www.lombard.co.uk

Kuka

Manufacturing Technologies

“We had quite a task ahead of us as there were several physical factors working against us: firstly, the location for the cell offers a very small footprint,” he said. “Add to that the challenges of a low sloping roof and a busy fork-lift truck access area and we knew we had our work cut out.”

Barber’s is also a major employer in the local area, and it was paramount that no jobs were lost as a result of introducing robots into the plant - a feat which the company successfully achieved, according to Mr Ing.

The solution

“The KUKA name is synonymous with robots, so we were confident that with KUKA we would be able to concentrate on robots and not let extraneous ideas interfere with the central aim of the project,” Mr Ing said.

The first system was installed by Gudel. SCM Material Handling Ltd., a KUKA system partner, is conveniently local so it made sense to approach them for the second robot cell.

The installation of the first robot in 2010 enabled the plant to go from producing 35 to 65 Tonnes per day, an increase of 93%

Perfectly aged and automated KUKA palletizing robots have enabled dramatically increased production levels at one of Britain’s oldest Cheesemakers.

A

J and RG Barber is a farmhouse cheese producer based in Somerset in the UK. The Barber family have been farmers and cheese producers in the area since the 1800s and now produce a specialist range of cheeses including West Country Farmhouse Cheddar, Red Leicester and Double Gloucester.

The issue

Within the manufacturing plant at Maryland Farm, the cheeses are packed into boxes and loaded onto pallets before being moved to the stores where they are matured for anywhere from three months to three years.

Production had been restricted to 35 tonnes per day due to the physical limitations imposed by manually handling the boxes. Barber’s was looking for a way to increase capacity without incurring any health and safety issues or losing staff, as Julian Ing, Barber’s head of engineering explains:

Two KUKA KR100-2 PA models are currently being used at Barber’s Maryland Farm in Somerset in separate areas of the plant. The installation of the first robot in 2010 enabled the plant to go from producing 35 to 65 Tonnes per day, an increase of 93%.

Mr Ing said at the time: “It is a real success story and everyone is very pleased with the way the system is running. We spent quite a lot of time on developing the right solution given the physical limitation of the space. As well as helping to address health and safety concerns by reducing the amount of manual handling, the switch to automation has also achieved a more efficient strapping process, an important part of the operation that had previously been problematic.”

A second KUKA KR100-2 PA robot has now been installed in the Packaging Plant with the cooperation of local KUKA’s System Partners SCM Material Handling Ltd. In this area, the matured cheeses are de-stacked and fed into the cutting and packing lines. There are extra cleanliness regulations here compared with the box packing line, and the introduction of a robot reduces the risk of contamination. Similar benefits have been seen in potentially increased production levels.

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Rockwell

Manufacturing Technologies

Cyber security and your systems Does your company have information, recipes, Knowing that all connected designs and manufacturing techniques in systems are inherently vulnerable, different locations or countries? The chances are there is a strong call to action to that the more spread your operations, the more cyber risk you face. Rockwell Automation explains. develop a robust security culture and a proper security strategy

I

n the fast-changing world of cyber threats, it may well be that companies will increasingly consider cyber security as a good reason supporting the case to reshore manufacturing to the UK, but where that is not possible, it is vital to understand the risk and mitigate it as much as possible.

According to our own Doug Wylie, Certified Information Systems Security Professional and director of product security risk management at Rockwell Automation, every time a new connection is added to a network, the cyber risk expands along with potential attack points available for those who seek to benefit from damage, disruption or information theft.

“It’s essential to recognise cyber security is not a one-time investment,” Mr. Wylie suggests. “Millions of new devices and new users are becoming connected and interconnected around the world every day. Security is a commitment that commands vigilance and an ongoing investment in people, process, product and technology.”

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The increased potential attack points means that the availability (up time), integrity and confidentiality of information held on any connected devices, or importantly, any systems which link to connected devices are more vulnerable to attack from anyone given the means, motive and opportunity to gain from a cyber-attack.

Knowing that all connected systems are inherently vulnerable, there is a strong call to action to develop a robust security culture and a proper security strategy. Although there is no quick-fix or one-size-fits-all solution, the best risk mitigation does not have to be a painful exercise. What’s more, with an improved security infrastructure and better control of information flow comes many opportunities to take advantage of new technologies such as cloud, mobility and virtualisation – not to mention being better able to take advantage of the Internet of Things securely through smart devices.

So what about this industrial security strategy and security culture? At Rockwell Automation we talk about and

deliver services based around layered security and defence-in-depth principles which can help forward thinking companies to embrace, rather than fear, the leading technologies and open platforms that promise greater control, flexibility and efficiency. The defence –in-depth security strategy is applied to a system design to complement the physical, electronic and procedural protective layers. This approach is a deterrent and can slow and thwart unauthorised activities against a control system. In turn this increases the likelihood of attacks being detected before any information is lost or before any damage can be done.

FURTHER READING: For more information about defencein-depth, layered security or the security services available from Rockwell Automation, visit www.rockwellautomation.com/ rockwellautomation/services/ security/overview.page

ABB

Manufacturing Technologies

To help companies to assess the scope for introducing robotic automation into their processes, ABB offers a free, no-obligation productivity & efficiency appraisal service. Lasting half a day, the appraisal includes a visit by an ABB engineer who will help to spot potential areas where robots could help deliver productivity and efficiency savings. For more information, or to book an appraisal, email robotics@gb.abb. com or call 01908 350300 ref.

‘Free appraisal’.

Taking the automation plunge A recent survey from ABB Robotics reveals cost of ownership and lack of experience as major obstacles to advance of robotic automation in the UK.

T

he survey received responses from 221 companies of all sizes, including SMEs. Of these, 134 are not currently using robots, with 65 ruling out introducing a robot in the near future. When asked to specify their reasons, 21 cited cost of purchase and ownership and 38 gave lack of experience as major reasons for shying away from investing in robotic automation.

“The survey reveals the need for more to be done to educate UK manufacturers both about the case for investing in robots and the help available in the market to enable them to get the most from their investment,” says Mike Wilson, general industry

sales and marketing manager for ABB’s UK Robotics business. “Despite significant falls in the cost of robots and robot systems in recent years, there is a lingering misconception that robotic automation is prohibitively expensive for UK companies, particularly in the SME sector.

“There is real evidence to show that an investment in a robot can often be recouped within just 12 to 18 months.

This, coupled with the ready availability of training and support services from many UK robot suppliers and their partners, means that many companies in the UK could be missing out on the very real benefits of introducing robotic automation to their processes.”

The survey results show that those companies that are seeing real benefits from their use of robotic automation are highly likely to make further investments in additional robots

The survey highlights a clear divide between the experiences of those who have used and benefitted from robotic automation and those who are yet to try it.

Key benefits reported by the 87 respondents that are currently using robotic automation include reduced operating costs (75%), improved product quality and consistency (68%) and increased production output rates (75%).

“The survey results show that those companies that are seeing real benefits from their use of robotic automation are highly likely to make further investments in additional robots,” says Wilson. “Of the 87 respondent companies currently using robots, 75% were either likely or highly likely to invest in additional robots in the next 18 months.”

Quickly estimate the potential return on investment in robotic automation using ABB’s online ROI calculator. new.abb. com/products/robotics/roi-calculator.

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Siemens

Manufacturing Technologies

Cost reduction and efficiency in the can Coca Cola Enterprises teamed up with Siemens Industry to automate its canning process and boost overall efficiency.

C

oca Cola Enterprises (CCE) and Siemens Industry are embarking on a process of standardisation of automation and controls as a result of a recent partnership agreement.

The strategic approach is based on standardisation to support CCE’s drive to increase the production efficiency of its bottling and canning lines; reduce levels of maintenance and training requirements across its production sites; optimise

After we analysed the installed base we came to the conclusion that a standardised approach could help us in many areas such as cost reduction, training and maintenance needs, spare parts and efficiency gains Noel Corry, CCE

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spare part stock and future proof investment in its facilities.

Standardisation of Siemens automation controls at CCE’s Sidcup plant has been implemented as part of the commissioning of a £14.3 million production line newly up and running for canned products.

The new KHS canning line with a capacity of 120.000 cph is one of five new canning lines supplied by KHS to CCE Europe during the past three years. It will increase capacity at the Sidcup plant by another 20 million cases per annum and support future growth.

When building a new plant or line, end users will use several OEMs to supply individual machines to add to the line. This means a multitude of different control systems, components, software and methods of interfacing to the operator and plant. Taking such an approach can lead to three potential issues.

Firstly, numerous control system architectures for machines and interfaces

can lead to lower efficiency, as maintenance staff and operators have to work with and be trained on a range of machines.

Secondly, costs are higher because of a substantial spare parts inventory. And finally, because of an inability to network the individual components within the machine or network the machines together, manufacturers are unable to obtain the level of data required in a real time format.

Higher line efficiency, reduced training costs and less capital tied-up in stock of varying spare parts - which also reflects the achievement of the new KHS line - can be achieved through the application of Siemens’ standardisation strategy called Optimised Packaging Line (OPL).

Noel Corry for CCE said: “After we analysed the installed base we came to the conclusion that a standardised approach could help us in many areas such as cost reduction, training and maintenance needs, spare parts and efficiency gains. Coinciding with the need to increase capacity, the move to a standardised approach and the implementation of Siemens’ OPL concept will, I believe, deliver real benefit in the future.”

Mat Campbell for Siemens comments: “OPL and standardisation are highly beneficial for production sites as CCE is finding out. A prime example is the ability to develop a flexible production line more easily.

With all the elements of the line networked together it is much simpler to implement changes and respond to market needs.”

Schneider Electrics

Manufacturing Technologies

The cream of automation Dairy product manufacturer South Caernarfon Creameries turned to automation experts Schneider Electrics when it faced the difficult task of modernising its dated equipment.

S

outh Caernarfon Creameries is a dairy manufacturer based in the foothills of Snowdonia, North West Wales. With a history stretching more than 70 years, the cooperative now proudly boasts more than 125 member farmers and distributes products to a diverse customer base both locally and abroad. The group manufactures 7,500 tonnes of cheese annually and sourcing in excess of 80 million litres of milk from local memberbased farmers each year.

The Challenge

South Caernarfon Creameries had a large array of legacy equipment, having previously updated its facilities at various stages. The combination of outdated systems and increasingly obsolete and expensive parts was resulting in crippling maintenance costs for the group. Additionally the former equipment presented some fundamental limitations in production, with vat cheese controllers restricted to a set number of recipes. This meant that any variations had to be manually managed, giving rise

to possible inconsistencies and errors in recipe batch production.

South Caernarfon Creameries was also managing increasing variances in demand caused by a number of factors such as seasonal peaks, retailer promotions, increasing nutritional education, packaging variations and changing export regulations. In combating spiralling maintenance costs, eliminating the risk of expensive equipment failures and being proactive to variances in production demand, the group had no choice but to modernise its systems to ensure on-going effectiveness and safeguard any future expansion.

The Solution

After a detailed review process, South Caernarfon Creameries selected Schneider Electric and local system integrator M.A.S.T. Systems, with extensive experience in the food and dairy industry, as its automation solution providers.

The solution comprised of a PlantStruxure™ architecture consisting

of a central Modicon M340 PAC controller for each of the six cheese vats, a Modicon STB distributed I/O island, each with local Magelis HMISTO colour touchscreen operator interface unit. The site-wide industrial ethernet network is interconnected via a number of Connexium managed switches.

Since the new system was commissioned, South Caernarfon Creameries has expanded its recipe range to 24, compared to the four recipes it was previously limited to.

This newfound flexibility has driven and enabled the extension of its product range, with the addition of two completely new product lines recently introduced to supermarket shelves.

Since the new system was commissioned, South Caernarfon Creameries has expanded its recipe range to 24, compared to the four recipes it was previously limited to The Benefits

The new recipe management system has provided South Caernarfon Creameries complete flexibility to be able to respond quickly and efficiently to the variable demands of supermarkets and retailers. Recipe adjustments and variances in production output can easily be actioned, ensuring all orders regardless of their volume can be met.

Product consistency is also maximised through the modular nature of the system and repeatable recipe batch functionality. This flexibility has also facilitated the recent product expansion for the group.

Recipe edits on the former equipment were becoming increasingly time consuming and with LED readouts and switches, could often take up to 40 minutes to execute. With the new system, an operator can now alter a recipe in less than three minutes.

With such a marked return on investment, South Caernarfon Creameries is now able to focus its efforts on further innovation into production efficiencies and on-going expansion into new product lines.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 71

Q&A

IT in Manufacturing

Every thing to play for Thomas Svensson, senior vice president ThingWorx EMEA, discusses David Cameron’s recent commitment to fund research into the Internet of Things and the implications of this movement for manufacturers. : Is government investment in the Internet of Things focussing on the right areas? Where is the Internet of Things likely to make the biggest impact in industry and society?

We believe the biggest impact will first be felt within manufacturing.

As the Internet of Things [IoT] era begins to take shape, the manufacturing industry is being faced with yet another set of challenges to remain competitive in a smart, connected world.

Experts tell us that the IoT is gauged to potentially create US$6.2trillion in new economic value by 2015, and it is clear that those not prepared and supported to engage will ultimately be put out of business.

Mr Cameron’s vision for the UK is spot on, but now we have to see what concrete steps he and his ministers take to begin forming reality from the vision.

Combining efforts with Germany to

Experts tell us that the IoT is gauged to potentially create US$6.2trillion in new economic value by 2015

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boost both countries’ fast-expanding IT industries certainly makes sense. : What does the Internet of Things mean for manufacturing business models?

Beyond being able to offer more proactive monitoring and services, entirely new business models are beginning to take shape.

Responsibility for maintaining products is shifting from the customer back to the manufacturer. Manufacturers are developing business models where the customer no longer buys or even leases the asset from the manufacturer. The customer pays for the uptime and use of the product while the manufacturer still holds and maintains the asset. : Many are sceptical about the IoT as another ‘next big thing’ in machine-to-machine technology which has been promised as a ‘revolution’ in manufacturing tech for years now. What’s different today?

Item-level RFID tags and smart ocean containers to revolutionise supply chain management were part of the Internet of Things one decade ago. You’re right, these never really happened, or not to the scale envisioned. It is also well known that the first generation of IoT failed, as companies didn’t know what

Government backing On March 10 Prime Minster David Cameron opened the CeBIT technology fair in Hannover with a speech which committed £45m to the development of the Internet of Things.

Mr Cameron described how he intends experts from the UK to work with counterparts in Germany to investigate commercial and social applications for the Internet of Things which he said has “enormous potential to change our lives“.

Read David Cameron’s CeBIT speech in full here bit.ly/ CameronCeBITopening. to do with the vast amounts of data they were collecting.

One decade on, things are different.

The technologies behind IoT are smaller, cheaper and more powerful than ever before – and getting more so every day.

Unlike a decade ago, we’re all walking around with wireless computing devices in our pockets, making us another smart ‘thing’ on the network. : Technology vendor PTC recently acquired ThingWorx (bit.ly/ PTCThingworx) to bring Internet of Things capability to its tech portfolio, in particular its Service Lifecycle Management solution. How exactly will this acquisition differentiate your SLM offering and help manufacturers deliver advanced service solutions?

The idea is to transform service from being reactive to proactive by monitoring and predicting events via connected devices and sensors.

In addition to smart asset management, there is also an opportunity in avoiding one necessary step in a traditional service workflow, whereby a field technician wastes a trip by having to diagnose the problem first and then having to make a second trip with the necessary parts for the fix.

The ability to diagnose and fix the problem in one visit will be far more economical for both the vendor and the customer.

FURTHER READING: Read a longer version of this interview online at bit.ly/Everythingtoplayfor

ERP Connect 2014

IT in Manufacturing

Connect with knowledge ERP Connect, the event bringing together the world’s leading implementation specialists under one roof, arrives in London this May. Now in its ninth outing, James Pozzi reviews why it is a must-attend event for manufacturers looking for the right ERP system.

I

n today’s business environment, the importance of the right ERP system to a manufacturing business is so vital that it can make or break a company.

Just ask any of the manufacturers who made that big decision and are now reaping the benefits. By implementing the correct system, manufacturers can maximise ROI as well as productivity, business intelligence and competitive edge. But there is no easily identifiable solution, and implementing the right ERP system is no quick fix.

But this process can be made easier by attending ERP Connect, the biannual event run by The Manufacturer magazine returning for the ninth time.

The event sees the convergence of a number of different manufacturers in a single venue sharing their experiences of ERP, providing unparalleled insight into companies which have worked with a wide variety of systems. ERP Connect offers one-to-one meeting time for manufacturers with pre-classified potential for suppliers, enabling direct comparisons to be made between systems and partners tailored to a specific business’s needs.

At ERP Connect on May 20, the opportunity to listen to first hand ERP experiences from manufacturing companies presents itself once again. With the professional yet relaxed atmosphere, the event provides the perfect opportunity to gather knowledge from those who have successfully implemented ERP systems in their business.

Taking place at the Ambassadors Bloomsbury Hotel in London on May 20, ERP Connect promises a line-up of renowned, industryleading ERP vendors complimented by a strong nucleus of speakers. Previous speakers have included representatives from Aston Martin and Rolls-Royce, who have shared how their world-renowned companies benefited from correct ERP implementation.

“Sixteen pages of notes is testament to the volume and quality of guidance and support generously offered by all of the speakers at ERP Connect,” said Steve Roper, IT manager of Unison, who attended ERP Connect in 2012. “Having all of the main players in ERP in a single room was a real enabler for me at this early stage of our journey; each and every one of them provided insight that has deepened my understanding of the challenges and possibilities that lie ahead.”

Visit www.themanufacturer.com/erpconnect or call 0207 4001 6033 for more information and booking.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 73

The pace of innovation

At a glitzy gathering in Atlanta, Georgia in the US last month, Microsoft showcased the latest technologies on the horizon for businesses, manufacturers included. Malcolm Wheatley went along to see what the future holds.

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H

eld in the American city of Atlanta in early March, Microsoft’s annual Convergence bash brought together more than 12,000 delegates from across the globe.

Kicked off by Microsoft veteran Kirill Tatarinov, who heads Microsoft Business Solutions, the multi-track event aimed to deliver something for everyone with a blend of workshops, user group sessions, presentations and high-profile keynote speeches.

And underpinning all this, quite literally, was a vast subterranean exhibition hall showcasing independent solution providers, including the UK’s own eBECS and Columbus implementation and solutions specialists.

For manufacturers, there were several pieces of news. For one thing, Microsoft is mid-way through an aggressive upgrade programme, and this spring will see new upgrade releases of both Microsoft’s flagship Microsoft Dynamics AX 2012 suite, as well as Dynamics GP 2012 – the latter being Microsoft’s financially-oriented ‘out of the box’ midmarket solution.

“We’re delivering innovation,” enthused Tatarinov, pointing to Windows 8.1, Microsoft CRM 2013, and a host of other new releases and scheduled new releases including Microsoft Dynamics Marketing, which aims to do for businesses’ marketing campaigns what Microsoft Dynamics CRM does for their customer relationship management.

Take the tablets

Perhaps not coincidentally, much of the excitement on show revolved around either Microsoft CRM or Windows 8.1 (in the form of tablet computers), or a combination of both. What’s more, Microsoft was also keen to emphasise that Windows 8.1 made it easy to develop and deploy custom apps designed to interface with Dynamics AX, without presenting users with the full breadth of Dynamics AX capabilities.

Take fashionable Fort Collins-based microbrewery New Belgium Brewing for instance, at which on-the-road salespeople are dubbed ‘rangers’, and headquarters is known as the mothership. IT director Travis Morrison

Microsoft Convergence 2014

IT in Manufacturing

Under the bonnet For manufacturers, the latest release of Microsoft Dynamics AX 2012 has some interesting developments. Malcolm Wheatley finds out more.

So what exactly can manufacturers expect to see from the R3 release of Microsoft Dynamics AX 2012 when it becomes available later this spring? Pepijn Richter, Microsoft’s amiable head of product marketing for Dynamics AX lost no time in enumerating the goodies on offer.

To begin with, he says, there are new, fully-integrated modules for transportation management and warehouse management. Incorporating intellectual property acquired from specialist Dynamics AX solution partner Blue Horseshoe, the highlight of these new capabilities are their support for mobile warehouse-floor or remote tablet computers, enabling instant and full ‘out of the box’ connectivity with Dynamics AX from any mobile tablet.

Android too Microsoft does mean any mobile tablet device too, Richter stresses. While Windows 8.1 tablets were the showcased devices of choice being demonstrated at Atlanta, support for Apple’s IOS and Android is only a matter of months behind.

Better still, he adds, those same Windows 8.1, IOS and Android tablet computers will also interact with Microsoft’s factory-floor and CRM applications, extending manufacturers’ ability to connect such devices either to native Dynamics AX applications, or manufacturers’ own custom-developed applications.

“You can work and collaborate in real time, very

was on hand to demonstrate on stage to all 12,000 delegates, a nifty CRM application as well as a warehouse management and inventory management application underpinned by Windows 8.1 tablets and custom apps.

And for the future, he adds, Microsoft is working to incorporate images taken with tablet computers’ cameras, providing the ability to not only report waste, damage and quality issues but also instantly capture photographic evidence, making it part of the Dynamics AX system of record.

Core, blimey Whizzy technology apart though, Microsoft has also invested quite heavily, hints Richter, in boosting its capabilities in demand forecasting and product change management.

In the case of demand forecasting, he explains, Microsoft has taken its existing demand forecasting capability, for which Microsoft Research (the company’s R&D arm) had developed an extensive suite of forecasting algorithms and added the ability to incorporate external data sources and external review and forecast manipulation.

“We’ve taken the core SQL forecasting ability and allowed users to mesh the forecasts with other data sources, such as weather information, in conjunction with Microsoft Excel,” explains Richter.

The new product change management capability also leverages an existing capability, in this case CRM, he notes.

There was, he explains, an overlap between the internal business process required for CRM case management and those involved in product change management. Rather than reinvent the wheel, says Richter, it made sense to leverage something that was already in place and working well.

And from warehouse management to demand forecasting, and transport to product change management, these new capabilities are built into the core, standard product, stresses Richter.

“Third party solutions via independent software vendors will remain on offer,” he sums up. “But these new capabilities, going forward, are part of our core product.”

“Mobility is important for our rangers, and important for our shopfloor people too,” said Morrison. “It’s all about the unification of the front end and the back end – and tablets help us to achieve that.”

Grapevine

Perhaps not coincidentally, much of the excitement on show revolved around either Microsoft CRM or Windows 8.1…or a combination of both

quickly,” he enthuses. “Reporting, for instance, you can notify the start of a job, the end of a job, any waste, and any other information of choice – right from a low-cost $200 device. Plus, operatives can pull up manufacturing documentation, special instructions and so on, again from this same $200 device.”

New Belgium Brewing also handily happens to be among those consumerfacing manufacturers most likely to benefit from one of the convergence event’s biggest announcements – the launch of a Microsoft ‘social listening’ tool, acquired when the company bought Swiss-based Netbreeze, which specialises in the technology.

Social listening, as the name implies, involves tracking and proactively dealing with consumer concerns across a wide range of social media – Facebook, Twitter and so on.

Will it be a hit? Microsoft obviously hopes so, given the attendant hype. But it’s got a tough act to follow. Microsoft Dynamics CRM, pointed out Tatarinov, now has four million users across 40,000 customers, and has delivered 38 consecutive quarters of high doubledigit growth.

For a company that is sometimes accused of misjudging customer needs, that’s an impressive number of businesses voting with their budgets.

April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com 75

LAST WORD

Let’s go round again A revolution waiting to happen?

O

n March 26 the All Party Parliamentary Sustainable Resource Group presented its new report Remanufacturing: Towards a resource efficient economy, to parliament (bit.ly/ RemanufacturingAPSRG).

The result of months of research with manufacturers, industrial academics, engineering institutions and more, the report put this most fundamental of sustainability concepts at the heart of

USA’s remanufacturing industry is worth $43bn and employs 180,000 people

76 www.themanufacturer.com | April 2014 | Issue 3| Volume 17

parliamentary debate, for a moment at least.

It’s a moment that has been a long time coming and which needs firm action in its aftermath to make it matter.

Remanufacturing involves taking an existing product – or part – at end of life and putting it through a series of processes in order to return it to a like new or improved state.

It requires design for disassembly, the development of advanced service business models and poses the challenge of a complete overhaul to our existing manufacturing value chains – but what it offers is a reduced reliance on virgin raw materials, reduced consumption of energy by industry, large scale economic and environmental benefits and enhanced end user experience.

APSRG says that the USA’s remanufacturing industry is worth $43bn and employs 180,000 people. It also says the UK’s remanufacturing industry should be worth £5.6bn annually and create jobs for thousands if only we upped our game in reforming regulation and directing funding to the development of new product lifecycle systems.

It all sounds very utopian and futuristic, but, like many supposedly new and disruptive concepts, remanufacturing has been around for a while.

According to a recent article in The Guardian, Renault’s Choisyle-Roi factory has been dabbling in remanufacturing since 1949 (bit.ly/ GuardianReman).

Rising interest among industrial sustainability pioneers has since led to the establishment of the UK’s Centre for Remanufacturing and Reuse and

contributed to the arrival of APSRG itself as well as the Ellen MacArthur foundation, the EPSRC Centre for Industrial Sustainability and more.

Over the past decade a broad effort has been underway to prove the concept and benefits of remanufacturing in a wide range of industries from automotive to consumer goods and renewable energy generation. Evidence of remanufacturing’s ability to reduce costs and increase margins has built up – not with little eco-warrior types, but with large industrial powers like Caterpillar and Rolls-Royce.

The past year has brought another crescendo for the topic. The Technology Strategy Board partnered with the Royal Society for the Advancement of Arts, Manufactures and Commerce last year to support its Great Recovery initiative (www.greatrecovery.org.uk) and remanufacturing was mentioned 16 times in the highly acclaimed Foresight report, The Future of Manufacturing.

It was recognised as a force which will shape the way manufacturers operate and compete in the all too imminent future.

But are the requirements of remanufacturing recognised by the everyday manufacturer?

SMEs tend to be deeply dubious.

They are sceptical about the lip service paid to high minded concepts like this while they still experience the thumb screw of cost-down contracting from their customers – the very same companies that preach on the need for supply chain collaboration to facilitate a remanufacturing revolution.

And what of the next generation of industrial leaders? Since the topic of sustainability was deemed “non-core” to the new design and technology curriculum for key stages 1-3 it seems unlikely that a spontaneous challenge to the status quo of make-sell-use-destroy will emerge from an optimistic and informed younger generation.

To APSRGs list of recommendations to government for the advancement of remanufacturing, including a cross party commission and the establishment of a centre of excellence for the discipline, I would urge a review of our ambition to educate young people about the challenges facing the society they will inherit and arm them with the knowledge and spirit to subvert the norms we perpetuate today.

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