The Manufacturer December/January 2014

HOT TOPIC Go Direct Review of MDC 2013 Made to Make A tribute to UK manufacturing

SECTOR FOCUS Eat, drink and be merry UK food and drink manufacturing

MANUFACTURING LEADERSHIP Sustainability and growth The impact of Servitization

EXPORTS West Midlands meets world Thoughts from Export Week 2013

SUSTAINABLE MANUFACTURING Green edge Green credentials and competitive tendering

MANUFACTURING TECHNOLOGIES Keep your composure Composites recycling

IT IN MANUFACTURING Get outside your box Supply chain integration for ERP In partnership with:

Passion, ambition and achievement at TM’s awards INTERVIEW Jim Moseley President, Food and Drink Federation

www.themanufacturer.com | December/January 2013/14 | Vol 16 Issue 10

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WELCOME

EDITORS INTRODUCTION

Another year over…

First and foremost, congratulations to the victors of our Manufacturer of the Year Awards 2013, GE Aviation Wales.

The Nantgarw site was hailed by judges as “the unsung hero of British manufacturing” and is undoubtedly worthy of our award for the best all-round role model for competitive manufacturing in the UK.

32

34

51 HOT TOP IC

Go Dire ct Review of Made to MDC 2013 A tribute Make to UK man ufacturin g SEC

Congratulations too to all our category winners and highly commended companies (p32). The competition at our fifteenth annual awards was particularly strong and all finalists had strong claims to recognition.

The turning of a year always provides cause for reflection and anticipation.

Looking back over 2013 there are plenty of highs for UK manufacturers to celebrate – some lows too, like big job losses at BAE Systems and Pilkington Glass, but on balance, it seems there’s a lot to be positive about.

We have seen billions of pounds awarded by government to support R&D programmes via the Technology Strategy Board, supply chain competitiveness via AMSCI, skills via the Employee Ownership scheme and commercialisation of research via the Catapults.

When considering industrial strategy, the main impression is one of consolidation. Government, or at least BIS, has been staunchly consistent in pursuing the objectives it laid out in September 2012 and while a fiscal framework (p64) to accompany these aims leaves the strategy somewhat weak, the stability of messaging has run in parallel with mounting evidence of business confidence and growth.

TOR FOC US

Eat, drin k UK food and be merry and drink manufac turing

MANUFAC LEADERSHITURING P

Sustaina bility and The imp act of Serv growth itization

EXPORTS

West Mid Thoughts lands meets worl from Expo d rt Week 2013

SUSTAIN ABLE MANUFAC TURING Gree

n edg Green cred e competit entials and ive tend ering

MANUFAC TECHNOLOTURING GIES Kee

p your Composi composure tes recy cling

IT IN MA NUFACTUR ING

Get outs ide your Supply chain integbox ration for In partners ERP hip with:

INTERVIEW

Jim Mos eley Presiden t, Drink FedeFood and ration

Passion , ambitio n and achieve m TM’s awent at ards www.the manufac turer.com |

Decemb er/Janu ary 2013 /14 | Vol

16 Issue

From many perspectives, the attractiveness of the UK as a manufacturing location seems to be increasing. In 2013, big companies like Jaguar Land Rover, Nissan and JCB have committed to creating many thousands more jobs and there has been a swathe of factory openings by optimistic SME and medium sized firms including Adlens, the London Taxi Company and Unison. Meanwhile countless other manufacturers have announced intentions to expand and invest in the immediate future.

Reshoring has been a buzzword this year with more and more firms reporting that they are repatriating manufacturing from overseas to support total cost competiveness, better service provision and flexibility.

Skills gaps are still threatening, but investment in apprenticeships by government and the private sector has intensified and surveys, like the one published by BAE Systems at the Skills Show, indicate that the perception of apprenticeships with most parents is improving (p51).

Before we get very un-Britishly carried away with enthusiasm however, it should be pointed out that movement on business investment has not come before time. Industry commentators have highlighted the UK’s laggardly approach in this quarter, even when compared to unstable European economies like Spain and Italy.

There has also been a notable failure to make significant progress on increasing exports (p48) – though some would say that an overt assault on sending goods out of Britain will never achieve a sustainable balance of trade, a measure which never seems to get much air time these days.

I won’t make predictions about what 2014 has in store for industry; crystal gazing has never been a hobby of mine. But with the general election approaching, a Scottish referendum on independence and continuing energy security concerns its unlikely to be a year for complacency.

Jane Gray Editor

10

All the glitz and glamour from TM’s biggest event of the year, the TM Awards. p32

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 1

EDITORIAL ADVISORY BOARD

The Editorial Advisory Board The Manufacturer magazine has gathered a range of industry leaders to help it maintain and improve its relevance to the needs of manufacturing business leaders in the UK. The board gives regular advice and feedback to ’s editor and their insight shapes the direction of content in the print magazine and online at www.themanufacturer.com.

Two new members joined ’s Editorial Advisory Board in November building on its existing base of expertise and perspectives on UK manufacturing competitiveness. welcomes:

Deirdre Fox Director of Strategic Business Development, Tata Steel Deirdre has worked for Tata Steel (formerly British Steel and Corus) since 1985 in a wide range of roles including HR, marketing, strategy and sales in both the UK and overseas. She is now UK-based and committed to positioning Tata Steel in Europe as a leading supply chain partner in key sectors, particularly renewable energy. She is a strong advocate of business interaction with young people for industry skills development.

Tony Hague MD Power Panels Electrical Systems and Chairman of the Midlands Assembly Network A leading proponent of lean manufacturing and collaboration for competitiveness, Tony was a founding member of the Midlands Assembly Network (MAN) before becoming its chairman in 2012. Established in 2006, the now 10-strong consortium of non-competing manufacturers works together to access larger contracts than its individual members could otherwise achieve, maximising SME competitiveness. PP Electrical systems is a founder-owned manufacturer employing around 220 people in the West Midlands.

Steve Evans Director of the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability

Philip Greenish CBE CEO, the Royal Academy of Engineering

Hywel Jarman Director of External Affairs, EEF

Richard Lloyd Global Manufacturing Director, Accolade Wines

Ben Taylor Assistant CEO, Renishaw Plc

Andrew Peters Division Director, Drive Technologies, Siemens

Andrew Churchill Managing Director, JJ Churchill Pamela Petty Managing Director, Ebac Group Simon Edmonds Director, the Catapults Programme 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

2 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

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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

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

Tim joined SayOne Media in 2009 after working as a journalist for six years in Australia on a range of lifestyle and business magazine publications. Tim launched a new website for in late 2009 and has interests in the automotive industry and business development. In June 2013, Tim was appointed General Manager of SayOne Media. t.brown@sayonemedia.com

Henry Anson Sales Director 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

Elizabeth House, Block 2, Part 5th Floor, 39 York Road, London, SE1 7NQ Tel: +44 (0)207 401 6033 Fax: +44 (0)844 854 1010

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Art Director Martin Mitchell

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Designers Alex Cole Nick Bond Katherine Robinson

Sales and Events

Jon is an experienced events & training manager. He previously worked for the Manufacturing Advisory Service, learndirect and was responsible for launching the Shingo Prize for Operational Excellence in the UK. Jon joined SayOne Media in 2010 and is the company’s lean champion. He leads programmes for Lean Management Journal as well as developing ’s events and is also chair of the World Class Manufacturing category within ’s awards programme. j.tudor@sayonemedia.com

Will Stirling Contributing Editor Will edited until 2011 and then took on the role of Editorial Director. In 2014, Will shall again be changing roles and will assume an external position as contributing editor to . We wish Will all the best in his future endeavors. w.stirling@sayonemedia.com

The Manufacturer in partnership with EEF, the manufacturers’ organisation.

Working together to secure the future of manufacturing.

ISSN 1477-3201 BPA audit applied for June 2009.

Copyright © SayOne Media 2011.

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Jon Tudor Head of Events Tim Brown General Manager

Associate Editor Callum Bentley

Subscriptions Manager Grace Gilling g.gilling@sayonemedia.com

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In order to receive your monthly copy of kindly email g.gilling@ sayonemedia.com, telephone 0207 401 6033 or write to the address below. Neither The Manufacturer or SayOne Media can accept responsibilty for omissions or errors.

Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers.

Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.

EEF is dedicated to the future of manufacturing.

Everything we do is designed to help modern manufacturing businesses evolve, innovate and compete in a fast-changing world. www.eef.org.uk

The Manufacturer is working collaboratively to drive innovation and manufacturing excellence in the UK. Our partnerships with leading industrial research centres, further education providers and trade bodies is an important part of this and is distributed directly to the alumni and membership of the following organisations:

Cranfield University EEF Institute for Manufacturing, University of Cambridge

December/January 2013/14

08 News and regular columns A summary of manufacturing news and events with commentary on industrial research and policy 22 Lean on me Callum Bentley, editor of the Lean Management Journal gets under the clichés to reconnect with the realities of lean journeys.

24 Out & About goes to Adlens, Lotus Formula 1 and HSSMI 26 Best of Online What you wanted to read about most on ’s website in November 28 Hot Topic: Go Direct & Made to Make reviews learning and debate at the Manufacturer Directors’ Conference and revels in the passion, ambition and achievement displayed at The Manufacturer of the Year Awards 34 Eat, drink and be merry The festive period prompts a review of the strengths and weaknesses of the UK food manufacturing industry 40 Interview: Consuming Passion Jim Moseley, President of Food and Drink Federation admits his fear of retirement and expresses frustration with the stubbornly negative image of his industry despite its contributions to public health, wealth and convenience 43 60 Second interview James Bradshaw, The British Family, talks to about celebrating a UK-made Christmas as his family wraps up a year with no foreign-made products purchased

PILLAR FEATURES Manufacturing Leadership 44 Sustainability and Growth: The impact of servitization: Professor Tim Baines continues his explanation of the impact on manufacturers adopting truly service-driven business models Other topics in the section: Women in manufacturing and industrial culture and competitiveness

Exports 48 Snapshots: Reviewing UKTI’s Export Week and progress on increasing global business maturity in the UK’s industrial base

Workforce & Skills 50 Employee of the month: Paul Morgan, maintenance technician, Mondelez International 51 Other topics in this section: The Skills Show and an update on the D&T Association’s Skills Gap programme for teacher training

6 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

CONTENTS

Finance & Professional Services 52 To sell or not to sell, when is the question: Mark Bryant at the Business Growth Fund urges business owners to consider minority equity to maximise their company’s value before selling up

Sustainable manufacturing 54 Green edge: Peter Russell at RBS explores the rising use of green supply chain credentials in competitive tendering

Manufacturing Technologies 58-63 Insight and case studies from Automation Advisory Board

’s

IT in Manufacturing 86 Get outside your box: Malcolm Wheatley explores the hinterland of supply chain ERP integration as demands for data sharing grow Other topics in the section: Enterprise Resource Planning, IT outsourcing options and Customer Relationship Management 96 Last Word: Get the balls rolling – manufacturers need to man-up to meet export challenges and opportunities says Will Stirling

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NEWS

www.themanufacturer.com/news

ROYAL VISIT

HRH the Prince of Wales met Bedfordshire-based SME manufacturers to highlight their heritage and export prospects. Prince Charles met with leaders from six companies based in Jordans Mill, Bedfordshire as part of a UKTI initiative to promote exports of traditional products with Brand Britain selling power. Representatives from Boatswain Lighting, Brinkley Propeller Services, The Jordans & Ryvita Company Tusting and Burnett, Walter Wright and Charles Wells all met with the Prince to tell him about their exports to countries including the USA, UAE and Japan. All of these companies have received, or are about to receive, export support from UKTI.

MANUFACTURING TECHNOLOGIES Siemens Industry and Olympus Automation announced they will partner on delivery and installation of the PDX Reactor. This technology for the food and drink industry uses accelerated steam injection for advanced cooking and mixing processes. The equipment can inject steam at three times the speed of sound to significantly reduce cycle times and energy use in the production of soups and sauces. Olympus Automation owns the technology, but Siemens will now supports its installation with an accompanying control system.

GOVERNMENT INVESTMENT

Government revealed its National Infrastructure Plan. The plan committed £375bn of spending on UK infrastructure improvements and also unveiled intentions to sell off 40% of the UK’s stake in the Eurostar rail service.

Specific projects which will receive enhanced government support under the plan include a new nuclear power station at Wylfa, north Wales and the improvement of Staffordshire’s road network.

ICT in Manufacturing

Autodesk unveiled its CAM 360 software. The offering represents industry’s first cloud-based solution for computer-aided manufacturing and will be available in 2014. Autodesk says the software will allow users to take advantage of collaboration tools and shared data storage, while improving flexibility. Unlike existing standalone CAM tools, CAM 360 is an integrated cloud-based solution which will also give users access to Autodesk’s Digital Prototyping platform, which includes modelling tools found in the existing Fusion 360.

MANUFACTURING CONFIDENCE

EEF upwardly revised its 2014 sector growth forecast for 2014. The trade body’s decision came on the heels of its Q4 Business Trends Survey, compiled in partnership with professional services firm BDO. EEF now predicts that UK manufacturing will grow by 2.7% in 2014. This would put it ahead of the UK economy as a whole which is set to grow by 2.4%.

The CBI Industrial Trends Survey recorded the highest levels of manufacturing output since 1995.

The monthly survey of industrial orders, output and sentiment showed that in the three months to November 2013 all three measures of business health grew at their fastest rate in 18 years. The positive news applied to all subsectors represented by the 350 firms who gave input – with the exception of electrical engineering.

INNOVATION

Tata Motors announced a £30m investment in a new innovation facility at the University of Warwick. Tata Motors European Technical Centre will be located at the new National Automotive Innovation Campus and will open in 2016. The centre will also receive financial and management support from Jaguar Land Rover, WMG and the Higher Education Funding Council for England taking total investment to around £100m. Around 1,000 engineers and scientists will work at the new facility to contribute to the development of sustainable automotive technologies. Construction will begin in September 2014.

8 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

MANUFACTURING NEWS

INDUSTRIAL CULTURE

The All-Party Parliamentary Manufacturing Group published its Making Good report following a nine month inquiry into industrial culture and competitiveness in the UK. The report found that competitive business practices are far from commonplace in UK manufacturing and that a culture of investment-shyness is holding back the rebalancing of the economy. A lack of policy based on the needs the characteristics of the industrial user was identified as a key cause of this culture. The report’s main recommendation to improve the situation was the establishment of a 10-year fiscal framework to encourage manufacturing businesses to adopt more ambitious growth strategies. The report was welcomed by Calum Forsyth, CEO of IAC Accoustics who said: “If the manufacturing industry is going to succeed in the global marketplace, businesses must constantly challenge themselves to identify new ways in which they can introduce and institutionalise competitive behaviours in the workplace.” For an interview with the Thomas Kohut, a report author, see p24.

NEW FACTORY

Sir Robert McAlpine officially handed over the keys to AkzoNobel’s £100m factory in Ashington. Construction and civil engineering firm Sir Robert McAlpine was responsible for the civil construction phase of the greenfield factory investment which is now complete. The next phase will include the full installation and commissioning of equipment at the site which will be capable of producing 100 million litres of paint a year. The factory will be dedicated to production of AkzoNobel’s popular decorative paint brand, Dulux.

Adlens opened a new factory in Oxford for the production of its variable power optics technology, Focuss. The eye wear manufacturer has recruited around 19 highly skilled workers for the new facility which cost the company £1.2m. The semi-automated production line is capable of producing 30,000 pairs of adjustable focus glasses a year based on one shift. Adlens calculates that there is a $100m market for Focuss in the USA where the product, which allows the user to adjust near and near immediate focus, will initially be launched. Find out more about Adlens on p46.

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 9

NEWS www.themanufacturer.com/news

MANUFACTURING SUPPORT

The Manufacturing Advisory Service organised Manufacturing Matters, a week long campaign to promote the economic and social importance of SME manufacturing and boost competitive business behaviours. The initiative saw hundreds of SME firms attend 50 regional conferences. There were also dedicated days to address the lack of women in industry, encourage investment in innovation and promote the uptake of social media as a business tool.

Reshoring 68%

SKILLS INVESTMENT

The Manufacturing Technology Centre confirmed that it will open an advanced apprentice training centre alongside its Catapult facility in Coventry and that Lloyds Bank will provide £1m a year to support the delivery of training.

Government has committed to provide a further £18m for the centre which is due to open in 2015.

of SME reshorers report parallel sales increases

JOBS

Nestlé revealed the details behind its YOUth initiative, a job creation scheme designed to tackle youth unemployment in Europe. The scheme will create 20,000 positions over three years for people aged under 30 years old. 10,000 of the positions to be created will be apprenticeships and positions will be available in all functions at the global food manufacturer. 1,900 jobs will be created in the UK and Ireland while the rest of the commitment will be fulfilled across the firm’s European footprint.

INVESTMENT & JOBS

JCB announced a £150m investment in its Staffordshire operations which will create 2,500 jobs by 2018. The announcement came close on the heels of the publication of a new National Infrastructure Plan and the 2013 Autumn Statement. JCB’s founder and chairman Lord Bamford said the detail in these policy statements was an important influence on the company’s decision to invest.

“The Chancellor’s announcement of the major A50 road improvement project is good news for businesses in this area. It allows companies like JCB to plan ahead with confidence, knowing that the road network will not constrain business growth and future investment,” he commented. In addition to the 2,500 JCB jobs promised on the back of this investment, it is thought another 7,500 should appear in the company’s supply chain.

SME investment in machinery and premises increased by

1% 5

10% in 2013

of ha UK m in ve r an 20 es ufa 13 h or ore ctur are d p ing of r do in th odu SME ing e p ctio s so roc n es s

The Manufacturing Advisory Service’s Barometer showed increasing interest in reshoring manufacturing to the UK. The survey of over 500 manufacturers showed that 15% have brought production back to the UK from overseas in the last 12 months or are in the process of doing so. This compares to just 4% of manufacturers saying they had offshored production in the same time period. 68% of those firms that reshored production said they had seen sales increase in line with the decision. The MAS Barometer, which represents sentiment among SME manufacturers, also found that two thirds of firms expected to grow before April 2014 and that 39% were planning to take on new staff. Questions around investment intentions found that 51% of companies had recently invested in machinery or premises while a further 42% said they had embraced other new technologies in their businesses. The plant investment figure represents a 10% increase on 2012.

10 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

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NEWS www.themanufacturer.com/news

Autumn

Statement T

he Chancellor’s autumn statement won approval for its action on skills but drew criticism for its failure to address crippling energy costs for energy intensive businesses.

George Osborne’s biggest announcements should have a positive impact on the retail and construction markets with action to cut business rates, and provide loans to unblock stalled housing developments, particularly in the north of England.

However, his entire statement to parliament failed to once use the word ‘manufacturing’ and featured just a single use of the word ‘industry’ when referencing the insurance industry’s support for the new National Infrastructure Plan.

As such, it is unsurprising that measures to accelerate economic recovery failed to address critical issues for energy intensive businesses or to incentivise investment in heavy capital investment with measures such as enhanced capital allowances.

Highlighting this failure, Karl Koehler, CEO of Tata Steel’s European operations, said: “The Chancellor has offered no help on energy costs for foundation industries such as steel, which will continue to operate at a huge competitive disadvantage to other European countries.

“Capping and reviewing business rates as well as more investment in

infrastructure, while welcome, do little to improve the competitiveness of the country’s vital foundation industries.”

Mr Koehler said Mr Osborne had missed an opportunity to prove his commitment to manufacturing.

That said, many industry leaders approved of the Chancellor’s decision to provide funding for 20,000 more apprenticeships in the next two years – with funding delivered direct to employers via HMRC. However there’s a feeling that judgement should be reserved on the intelligence behind this move until further detail is available on the skills levels to be supported and for which age groups.

The Chancellor took a strong stance on the need to reduce youth unemployment by incentivising job creation for younger people. His promise to abolish National Insurance on all jobs created for people under 21 will cut the cost of employing a young person on a salary of £12,000 by £500 a year and take £1000 off the cost of an employee on £16,000 per annum.

Acknowledging increasing concern over the UK’s ability to meet its national export challenge the Chancellor also freed up an extra £50bn of export finance to be delivered via UKTI. More comment and reaction to the Autumn Statement Can be found at http://bit.ly/1jEtnlc.

12 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Manufacturing Collaboration Challenge The final session on day one of The Manufacturer Directors’ Conference (MDC) saw the first in what is planned to become a series of events titled The Manufacturer Collaboration Challenge.

The premise of the events is to ascertain whether the UK has the wherewithal to produce locally some of the products that are currently imported in large quantities. As an example, research conducted by The Manufacturer revealed that from June to August in 2013, the UK exported £13m worth of children’s scooters but imported almost £180m over the same period.

The challenge was kicked off by a presentation

by John Elliot, the chairman of Ebac, which is commencing production of a UK-made washing machine in 2014.

Following his thought provoking speech, the teams were then allocated products which included a bicycle, a torch and a child’s scooter, and asked to create a brand, a logo, a product design, identify local manufacturing suppliers, generate a list of competitors, allocate a budget for cap ex, and perform a cost analysis.

In the end the winner of the competition was the torch brand LIT, which scored very well in both the design and marketing elements. The bicycle brand Creepa also fared well but came a close second due to deductions caused by cap ex funding issues. The Scooter came in just behind in third place with a highly commended effort.

MANUFACTURING NEWS

Logos completed by graphic design company Optic Juice.

Product design completed by contract product designers Renfrew Group International.

Digital marketing completed by web designers Xanda.

4 201

Dates for your diary

FEBRUARY

12-13

Southern Electronics takes place in Farnborough. This exhibition for electronics manufacturers, purchasers and contractors showcases thousands of electronics solutions for a wide variety of requirements. A free technical seminar programme also runs alongside the exhibition. bit.ly/SouthernElectronics2014

25-26

The AGP Technology Showcase takes place in London.

This event gives defence industry professionals insight into the Aerospace Growth Partnership’s strategy to enhance sector competitiveness through investment in technology. bit.ly/AGPTechSchowcase

MARCH

3-4

The World Food Technology and Innovation Forum 2014 takes place in London. Focused on maximising the success of new product development in the food industry this event’s speakers include Pual Quinlan, open innovation director for beverages at Unilever and Josh Tetrick, CEO and founder of Hampton Creek Foods. www.foodinnovate.com

The Manufacturer is looking to run new versions of The Manufacturer Collaboration Challenge in the new year with real world products and is inviting UK manufacturers, who are looking to expand their client and product portfolio, to register their interest now.

We are also looking for OEMs, manufacturers and retailers to submit product ideas which will be considered in the next round of The Collaboration Challenge.

This is your chance to help start to swing the balance of trade in a positive direction. Don’t sit idly by, get involved by emailing Tim Brown t.brown@sayonemedia.com.

The Manufacturer Directors’ Conference (MDC) took place on Dec 3-4 at The ICC in Birmingham.

See page 28 for a full wrap up.

4

EEF’s National Manufacturing Conference EEF’s will brings together a ‘who’s who’ of manufacturing, politics and the media. Focusing on reshoring and the drive to increase the level of exports from Britain, you’ll hear from the people and companies who are helping Britain become great again by bringing manufacturing home. www.manufacturingconference.co.uk

24-26

The AGP Technology Showcase takes place in London.

This event gives defence industry professionals insight into the Aerospace Growth Partnership’s strategy to enhance sector competitiveness through investment in technology. www.foodex.co.uk

APRIL

7-11

MACH, the exhibition for manufacturing technologies and machine tools, takes place the Birmingham NEC. The biennial event expects to attract over 20,000 visitors and 500 exhibitors. In 2014 MACH will include a dedicated 3D printing zone for the first time as well as its now well established skills zone. www.machexhibition.com

8-10

Alongside MACH the NEC will also house the Drives & Controls Exhibition, Air-Tech, Fluid Power & Systems Exhibition, Plant & Asset Management 2014, European Offshore & Energy 2014 and National Electronics Week.

MAY

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

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 13

4 201

EVENTS

UPCOMING EVENTS

25/02/2014

Future Factory Series: Workforce Development 25th February 2014, The Waldorf Hilton, London

It is well known that the UK manufacturing sector is suffering from an ageing workforce combined with the need to attract, recruit and develop over 80,000 engineers, technicians and scientists in the next three years. This one day conference will show you how to engage with further education facilities, upskill staff and retain them.

www.themanufacturer.com/skills2014

25/02/2014

Future Factory Series: Automate UK 25th February 2014, The Waldorf Hilton, London

An essential one day conference to attend if you are thinking about or already automating your factory. The UK is lagging behind the world in the race to automate. Find out how you can close the gap to improve your processes, cut costs and become more globally competitive.

www.themanufacturer.com/automateuk2014

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

Up-coming events presented by The Manufacturer and Lean Management Journal.

To keep up-to-date with our events please visit www.themanufacturer.com/events

March All paid subscribers of The Manufacturer now receive a complimentary pass to all Future Factory Series events.

Call 020 7401 6033 for details or visit themanufacturer. com/events.

LMJ Executive Development Programme Future Factory Series: High Performance Supply Chain Future Factory Series: Health & Safety

April

Future Factory Series: 3D Printing & Additive Manufacturing Future Factory Series: Manufacturing Sustainability

May

ERP Connect Automate Connect LMJ Annual European Conference

June

LMJ Porsche Lean Transformation Programme Future Factory Series: Manufacturing Innovation Future Factory Series: Flexible Workforce

14 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Midlands London London Midlands Midlands London London London Germany London London

APPOINTMENTS

IAN LIVINGSTON

UK Trade and Investment

Ian Livingston took on the role of Minister of State for Trade and Investment, succeeding Lord Green. Mr Livingston was formerly the chief executive of BT. He will now work to grow the UK’s exports and attract further investment

SCOTT WEBSTER

He is a co-founder of Orbital Sciences Corporation, one of America’s leading space system manufacturers, and has served as Orbital’s head of business development, president of its rocket systems division and chairman of the board and chief executive Officer of its satellite services subsidiary.

Antoine Bouvier, CEO of MBDA, paid tribute to Mr Webster’s predecessor.

“Along with the MBDA management team, I would like to warmly thank Jerry for his personal commitment, energy and dedication to MBDA,” he said.

helping firms make the most of their supply chain.

He is also responsible for leading a team of 80 advisors, who work with SMEs to overcome issues affecting business growth and ensuring they are in a position to capitalise on new market opportunities.

Stephen Peacock, director at Grant Thornton, one of the partners in the national franchise which administers MAS, said: “This is a powerful addition to our senior management team. Steven has fantastic industry knowledge, great expertise and contacts in key sectors that offer major potential for the manufacturing industry.”

Scottish Enterprise after it recognised the impressive success being enjoyed by LFH Engineering.

The company has built a strong reputation for the design, manufacture and supply of diesel engine coolant pumps, providing a range of products for

ship propulsion systems, diesel power plants and rail transaction installations.

Mr Hill said: “I am delighted to be joining the SMAS board and look forward to utilising my own experience within the manufacturing sector to contribute to the group.”

Manufacturing Advisory Service

The Manufacturing Advisory Service (MAS) appointed Steven Barr as its new national director. The chartered engineer is now responsible for delivering the MAS offering, which provides government subsidised assistance to SMEs with strategy, process improvement and innovation as well as

LES HILL

at BT, it is a huge honour to be asked by the Prime Minister to take on this role. The government has shown great commitment to the promotion of UK trade and investment. I am looking forward to the important work ahead.”

MBDA

MBDA appointed Scott Webster as chairman of the board, CEO and managing director of its subsidiary MBDA Incorporated.

Mr Webster, who has served on the board of MBDA since 2009, will replace the retiring Jerry Agee.

STEPHEN BARR

from overseas in order to improve Britain’s global competitiveness.

On accepting the appointment in June this year, Mr Livingstone said: “While it has been an immensely difficult decision to step down from my role

Scottish Manufacturing Advisory Service

Les Hill, managing director of LFH Engineering, specialists in the design and manufacturing of pumps, was recruited to join the Board of the Scottish Manufacturing Advisory Service (SMAS).

Mr Hill was approached to join the advisory group by the economic agency

Antonio Avalos, MMG Citrus Food manufacturer Citrus MMG appointed Antonio Avalos as general manger. Mr Avalos joins Citrus MMG from Associated British Foods where he was international marketing director. Avalos has also worked for a range of other food companies including Hero, Organix and Unilever and says he is looking forward to continuing his work in the “complex and challenging” UK retail market while leading the next chapter of growth at MMG Citrus.

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 | December/January 2013/14 | Issue 10| Volume 16

Neil McDonnell, FTA Ireland Freight Transport Association Ireland appointed Neil McDonnell as its new general manager. Mr McDonnell has over 10 years of senior logistics industry experience, having previously served in general manager roles at both Wincanton and Hoyer. McDonnell will now work closely with the Association’s key stakeholders on policy and campaigning issues.

Headline sponsor:

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TECH TALK & BACK TO SCUOLER

tech talk.

T

Back to scuoler.

Gordon Attenborough, sector head, design & production at the Institution of Engineering and Technology urges manufacturers to keep a weather eye on the advance of 3D printing and its implications for their value proposition.

he UK is leading the world in 3D printing research and there is huge future innovation potential in the technology.

Additive manufacturing or 3D printing is a process of making a three-dimensional solid object of virtually any shape from a digital model. It is achieved using an additive process, where successive layers of material are laid down in different shapes.

The UK has an exciting role to play in the development of 3D printing. We currently lead the field, partly due to UK government’s foresight and its investment in the technology.

Over the past three decades 3D printing has developed hugely.

The concept of 3D printing really began to be taken seriously in the 1980s. The man most often credited with inventing the language of ‘modern’ 3D printer is Charles W. Hull, who used the term stereolithography – defined as a “system for generating three-dimensional objects by creating a cross-sectional pattern of the object to be formed” – in a 1984 patent.

But what does the future hold for 3D printing?

Many people question the notion of a future where everyone has a 3D printer in their home.

Rather, the technology’s true potential lies in reducing waste and increasing efficiency in the future manufacturing supply chain.

Indeed experts, such as Professor Richard Hague at Nottingham University, and contributors to the Foresight report, Future of Manufacturing, expect, in the relatively near future, to see the exploitation of 3D printing for the production of whole systems rather than single function components, using topology optimisation and latticebased designs.

Such a leap forward could transform manufacturing supply chains. Companies need to be aware of progress toward this vision and its implication for their role in the industrial eco system.

18 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

A

EEF chief executive Terry Scuoler asks manufacturers to make export growth their New Year resolution.

mid more positive economic news, commentators and economists continue to press home the need for the UK economy to move away from growth fuelled by debt and consumption towards one built on net trade and investment.

Yet despite recent improvement in our trade performance we remain on the back foot when it comes to rebalancing our economy and achieving the government’s ambitious target to generate an annual £1 trillion from exports by 2020.

The average contribution of net trade to growth was minimal from 2010 to 2013 – lower than Spain, Italy and France. Achieving the £1 trillion target requires exports to grow by 9.2% a year from 2013.

The challenge is Olympian, but, as a nation, we proved last year that we can rise to such challenges effectively when the right combination of government support and business ambition is in place.

Manufacturing is the key export growth driver. It produces over half of all UK exports and 86% of goods exports.

Three times as many manufacturers export compared with the rest of the economy and this is more pronounced for small and medium sized companies with almost half of manufacturing SMEs exporting compared with just 19% for the average SME across sectors.

Encouragingly, this sector strength is set to grow. In recent EEF research, over half of the companies surveyed said they were planning to enter a new export market in the next 12 months. Yet, at the same time UKTI data shows that the percentage of export intensive companies in the UK is declining. In 2010, 40% of exporters were classed as export intensive. By 2012, this had fallen to 28%.

In order to meet that £1trn target and maximise the value of UK exports we need to do more than just getting more companies to dabble in international markets and last year our industrial strategy, Route to Growth, aimed to boost by a quarter the number of companies for whom exports account for more than 50% of their turnover.

Looking to 2014 we therefore need a governmentled crusade where every Department, British Embassy and Consulate gets behind the export effort to provide businesses with the confidence to be bold and ambitious in exporting to the world.

A longer version of Terry Scuoler’s December column is available at bit.ly/BacktoScuolerDecJan

Marketing

Celso Guiotoko Chief Information Officer

Nissan

Dealer Network

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Letters to the editor

Production lines

Letters to the Editor Simon Noakes Operations Manager, Hozelock

Simone Thomas Director, HT Brigham & Co

In response to David Cameron’s view that Britain should say no to migrant workers and boost the development of our British-born workforce through education and welfare.

One of the key problems experienced in a number of UK manufacturing companies is attracting a low-skilled or semiskilled workforce. At the heart of many manufacturing operations are roles requiring people to perform simple and repetitive tasks, but ones which are critical to meeting customer demand.

These roles do not require degrees, but require people with the right drive and attitude to perform at their best. Sadly, that gap is being filled by an increasing number of Eastern European workers, not because of any cost benefit, but because they ‘get’ manufacturing and slot into the roles very quickly. Meanwhile, UK workers tend to view manual assembly as a last resort.

They would rather work in a shop than on a factory shop floor.

If government wants more UK-born citizens employed in UK companies it must make a great concerted effort, in partnership with manufacturers and schools, to push the real value and benefits of manufacturing as a whole. There needs to be improved understanding of the industry’s significance and why it is a sector people should be proud to work in at all skills levels, not just in the higher-skilled roles which government rhetoric often refers to.

It must make a great concerted effort, in partnership with manufacturers and schools, to push the real value and benefits of manufacturing as a whole

I was extremely privileged to recently attend the Vitalise Business Women of the Year awards, where I was greatly inspired by the finalists. I took home an important message from Lord Digby Jones, who was the Judging Chair this year. He emphasised the importance that these women, who have achieved so much in business, go out into schools and colleges and act as role models for female students.

Women in business need to enthuse these students, who may feel that it is tough to achieve great things in the business workplace.

Margret Brigham, cofounder of HT Brigham & Co did this for me.

She was my mentor and to this day I continue to quote and try and carry out decisions in a manner that I think she would have done.

FURTHER READING: Read more from Simone Thomas on female leadership at HT Brigham: bit.ly/ Modelmanufacturingmentor

20 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Sir William Wakeham FREng Senior Vice President, Royal Academy of Engineering

A recent Royal Academy of Engineering debate tackled the issue of whether the UK needs to import high-quality science, engineering and technology skills from abroad.

Immigration is a complex policy area, but there is solid econometric evidence that the demand for graduate engineers exceeds supply across the UK economy. If we are to achieve growth and rebalance the economy, the government needs to be realistic about meeting these needs.

The consensus in our debate was that we need to import highquality, high-value skills to reduce the deficit in the short term, provide opportunities for an exchange of ideas and help train and mentor our young, home-grown engineers.

There is no silver bullet to fix the engineering and technology skills gap. Rectifying the current and projected shortage will require a combination of improvements in STEM education and careers advice, vocational pathways, training and, importantly, attracting more women into the profession.

But in the short-term, we need to change the perception that Britain’s doors are shut for business and streamline the immigration rules to enable the recruitment of highly skilled workers.

However, bringing in science and engineering skills from abroad in the short term must not be an excuse for not investing in them at home at any time

LEAN ON ME

We to hewant from ar you!

Lean on me Callum Bentley, editor of the Lean Management Journal, pulls back the clichés from lean journeys and urges companies to make a new years resolution to share their challenges through his publication.

As th e prog Lean M anag re eme impro sses on nt its unde vement jo own co Journal n rs to list tand ho urney, w tinuous w im e en to p o th rt So w e vo e ice o ant it is fo wou have se f our ld t cove like you up our ow read r us r ers. few m in the jo to tell us n sugges urna wha tions on

ths. t topi l and answ box W cs you ered? W hat are that our ev we shou and w ha en will al ould like t are th e questio ts in th ld e e We w ways wel to read issues yo ns you w next ab com prov ill try ou e your out? W u are fa ant r ci id e interv ing help best to ad suggestio believe ng that in fu iews dr and l, though ess ever ns and fe pull and featur t-pro ed Don’ vokingy reques back. es. t forg t by case open et th stud at ies, to sh to anybod our Lette are an y rs opin in the lean and co mm ion or Your an ex commun ent secti fe perie ity on is impr edback nce w who w ove ou is im an read po ith th er ex r public rtant to eir pe ts ati perie ers. nce. on, serv us as we If yo ices, st u and rive to the LMhave an over y all send J to feat suggestio be re an email ure in th ns for to e com pics to th ache yo +44 (0)20 d at c.be e editor, ing mon u would Ro ntle ths, 7401 lik 6033 y@sayo berto Prio please e . nem edia lo, who ca .com n or

What’s in this month’s issue?

Jeffrey K. Liker and Joseph Paris dissect the issue surrounding the Toyota Production System and the recent Toyota recalls Interviews with Dan Jones and New York Times bestselling author, Eric Ries US company FastCap shows how it uses lean in the most unlikely of places to reinforce its principles throughout the rest of its factory

R

ecently I had the privilege of visiting Hayward Tyler’s pump factory just outside London after the company’s manufacturing systems director informed me of the massive turnaround the business had undertaken.

The director in question was rightly proud of the transformations which had taken place in employee behaviour, production output and company profitability thanks to the application of lean principles.

Speaking to me in the company boardroom, where he has complete leadership buy-in, he told me that just shy of two years ago the manufacturing company was on the brink of financial ruin. He explained that despite a strong 198-year-legacy, in recent years a demotivated workforce and an uninspired leadership team had let efficiency and purpose slip out of control.

Now it’s a different story. An internal team was recruited to work full-time on embedding lean thinking, continuous improvement and engagement. They have achieved a great deal in a short amount of time and are still driving forward with common purpose to seek further improvement.

I know it’s a cliché to talk about ‘lean journeys’ but it’s easy to let commonly used terminology numb you to the reality of just how relentless and hard going, yet ultimately rewarding that journey can be. And there’s no substitute for going and visiting companies as they reach a variety of milestones to make that reality more tangible again.

22 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

The turning or the year is a great time to take stock and reflect on how far you have come on your own journey and where you would like to go in the next 12 months. When LMJ returns in the New Year our first 2014 issue will be dedicated to inspecting lean turning points and how to handle them.

The February issue will feature case studies from Hayward Tyler as well as other companies which have gone through the difficult yet endlessly rewarding process of taking a damaged business and turning it into something every employee, not to mention shareholder, can be proud of.

It’s easy to let commonly used terminology numb you to the reality of just how relentless and hard going, yet ultimately rewarding [lean journeys] can be

We will also be continuing editorial director Jon Tudor’s interview series as he talks one-on-one with lean champion and Toyota Production System specialist, John Shook.

I, for one, am looking forward to 2014 and my first full year on the journal. If readers are in search of a New Year’s resolution I urge you to promise you will send more ideas, case studies and insights into your experiences of implementing lean to LMJ and make 2014 a milestone in all your lean journeys.

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Half Page 170x105.indd 1

01/08/2013 16:59:05

National Apprenticeship Competition Manufacturing on the Moon Apprentices from all years are invited to work in teams to build a demonstration model and present their concepts to a panel of national judges on 20 May 2014.

Register your interest by 6 January 2014 For more information visit: www.national-apprenticeship-competition.org.uk

ManufacturerHalfpage.indd 1

11/11/13 17:24:36

December/January 2013/14 | Issue 10 | Volume 16 | 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 November.

One vision

Corporate responsibility is a necessary addition to commercial interests for many businesses – but not so for Adlens. At the opening of the eyewear manufacturer’s Oxford factory, Jane Gray discovered the company is founded on a vision for social change.

A

dlens makes glasses – but not just any glasses. Its range of variable power optics (VPO) products allow users to flex their lenses for variable focus, providing a welcome alternative to the dreaded progressive lenses and varifocals that so many people have to accept as they age and their sight deteriorates.

Unlike many of Adlens’ products that are made in Asia, the manufacturer’s newest VPO product, Adlens Focuss, is to be made in the UK at a new factory in Oxford.

The facility houses a semi-automated manufacturing line with rigorous in-process quality testing facilities. It is capable of producing around 30,000 pairs of glasses per annum based on one shift.

The facility, which represented a £1.2m capital outlay for Adlens,

is staffed with around 19 highly skilled people, many of whom have postgraduate qualifications and all of whom are heavily bought-in to the technology they are delivering.

Partly, this company commitment to a product which is designed and developed in Oxford, is based on economics and the hope of significant profit.

Research has shown there is a $100m market in the US for Focuss, which uses a unique combination of prescription lenses and silicon oil, held against the lens with tensioned polyurethane, to achieve near and near immediate variable focus with a higher field of vision than traditional progressive lenses, which over 80% of US users say cause them trouble.

But motivation and productivity at Adlens are far less driven by these kinds

24 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

of economic arguments, and far more driven by the philanthropic and social goals that led the company to come into being in 2005.

Company founder James Chens started Adlens with the desire to find a way of funding third world vision correction. In 2009 it became clear that the charitable and commercial sides of the business needed to function as separate entities and Vision for a Nation came into being.

With unusual focus, Chen decided that his mission to transform the lives of millions in the developing world by improving and sustaining their ability to see, and therefore work and care for their families, should dedicate itself to just one nation as a starting point.

He selected Rwanda, since it had the foundations of a coherent medical system in place and a government that supported of his aims.

When Vision for a Nation first landed in Rwanda, there were just 14 eye care professionals in the country with a population of 10 million. Today, every person living in Rwanda is within five kilometres of an eye care professional.

And via a ‘buy a pair give a pair’ donation model, over 33,000 individuals have received the glasses they need to remain self-sufficient members of society.

A few years ago, it was not uncommon to hear that older mothers and grandmothers working in Rwandan fields while also caring for infants, had accidentally maimed their children with hoes and mattocks because they could not see them.

Now, such incidents are rare and news like this is the real fuel in the belly of Aldens’ employees from management to shop floor.

Find out more about the Adlens factory opening at: bit.ly/AdlensFocuss

OUT AND ABOUT

Computational competition The raw data that powers the competitiveness of Lotus F1 blows Federico Ercoli away.

A ‘driver in the loop’ simulator was installed at Lotus F1 in 2012

E

nstone, situated just a few kilometres north of Oxford, houses the Whiteways Technical Centre, headquarters for Lotus F1. Built on the site of a former quarry and overlooking the Cotswolds, the facility employs over 500 workers.

The historical British racing team set its roots in Enstone in 1992 and has continuously developed its HQ, with some particularly notable additions in recent years.

Some of the most striking examples of upgrading are the expansion of the wind tunnel in 2011, the creation of a ‘driver in the loop’ simulator in 2012 and the recent construction of a new gearbox dyno facility.

The wind tunnel research centre has also taken a step further with the construction of a computational fluid

dynamics (CFD) facility that allows efficiencies to be gained in the car development process by reducing the number of physical tests and prototypes needed.

The computational power required to run the facility is staggering. Luca Mazzocco, senior account manager at Lotus F1, shared the stats. “To simulate the wind tunnel, the super computer operates at 32.5 teraflops, with a processing power of 10,000GB of RAM

and 1PB of storage, for a weekly data amount of 10TB.” The towering data centre, accessible by a wooden door situated at the foot of a hill, is reminiscent of the American NORAD centre – the home of the USA’s aerospace and defence command – or perhaps a Bond villain’s lair. The location and style of the facility impresses as much as the innovation and the whirring science of competition that takes place within it.

Institutionalised innovation

I

Coinciding with its first anniversary, the High Speed Sustainable Manufacturing Institute (HSSMI) opened its considerable doors to The Manufacturer’s James Pozzi.

n the space of just one year, the HSSMI has come a long way.

Funded as a public-private sector enterprise, the centre – based at the the Centre for Engineering and Manufacturing Excellence in Rainham, Essex – is a hive of manufacturing activity.

At its core is an ethos of research, collaboration and innovation. Focused on the application of simulation and virtualisation technologies to the development of competitive and sustainable manufacturing

processes, the centre is accelerating the commercialisation and adoption of game changing approaches to production.

With its member list now standing at 20, including Autodesk, New Holland Agriculture and Warwick Manufacturing Group, the centre’s team used the anniversary celebrations to showcase some of its work.

This included a presentation on energy and carbon reduction by Dr Axl Bindel, and a study of the centre’s work with Brompton Bicycle, which it helped reduce production time and increase efficiency.

Such varied projects show a versatility within the open collaboration objective, and 2014 will see the HSSMI continuing to think big.

With the centre under a remit to become financially self-sufficient by 2015, institute research director Dr Leslie Lee says the next year represents an exciting time for the centre as it aims to double its member base. “It’s fair to say we’ve been quite aggressive in our methods of attracting new partners, but at the same time, what we can offer sets us apart from other institutions.”

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 25

Best of http://www.themanufacturer.com

Money where their mouth is Plenty of banks have talked up their support for manufacturing in the past few years since government started acknowledging that a ‘deindustrialised’ economy was a dead end idea. But in November Lloyds Banking Group showed its promanufacturing marketing is more than empty words by committing £1m a year to training for the sector.

L

loyd’s commitment caused a flurry of activity on ’s website and social media streams. While the tone from many commentators was ‘about time’, the cynicism was matched with reactions of genuine pleasure and appreciation.

Lloyds’ funding will be delivered via the Manufacturing Technology Centre, part of the High Value Manufacturing Catapult.

It will help support the establishment of a fully equipped Advanced Manufacturing Training Centre at MTC’s Midlands site and back the delivery of training to 1,000s of level 3+ manufacturing and engineering apprentices following the centre’s opening in 2015.

This pro-active step from Lloyds shows that it understands building a solid skills pipeline is fundamental to the long term competitiveness of UK manufacturing businesses.

Furthermore, other investments by Lloyds suggest that this understanding is not isolated in a central bank office, but growing across the organisation. For several years now Lloyds has sent groups of relationship managers on a special Manufacturing Awareness course devised by WMG at Warwick University to help establish widespread appreciation of the special banking needs of manufacturing companies.

To find out more about the new Advanced Manufacturing Training Centre at MTC go to bit.ly/LloydsbacksAMTC or bit.ly/MTCTrainingCentreconfirmed

26 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Government foresight welcomed Evidently the publication of the most comprehensive study of UK manufacturing for many years, arguably ever, had been long awaited by ’s readers as our news story covering the launch of Foresight’s report Future of Manufacturing: a new era of opportunity and challenge for the UK attracted thousands of hits.

T

he report makes it starkly clear that the days when the remit of a manufacturing business could be summed up by the word ‘production’ are long gone.

It details myriad convergent forces, such as data explosion, mobility, machine to machine communication and the appearance of technologies including 3D printing, to paint a picture of the industrial eco system of the future. It describes what this new system might mean for the developing economic and social role of manufacturing businesses.

The report, which was commissioned by the Office for Science, has been taken seriously by government.

Business Secretary Vince Cable spoke at the report’s launch at the Royal Academy of Engineering on October 30, and although he was dubious about the report’s call for the establishment of a US-style Office for Manufacturing in the UK, he was generally positive about the its recommendations.

In particular, he welcomed the fact that many of these recommendations recognise and seek to build on the foundations of industrial policy and support that government has put in place in recent years including the Technology Strategy Board, the Catapult centres and the Manufacturing Advisory Service.

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

Outside government, others have indicated that the Foresight report has already become a landmark, cross sector resource and research and strategic planning.

The Centre of Excellence for Food Engineering at Sheffield Hallam University, for instance, includes the publication among its most influential reference points as it prioritises the themes for its research to support growth and long term competitiveness in Britain’s largest manufacturing sector.

The Catapults, which received positive reviews in the report, will be able to place Foresight’s recommendations for the network’s growth squarely at the centre of growth strategy. And, as Dr Hamid Mughal, global manufacturing director at Rolls-Royce plc, pointed out for industry leaders generally, “This report will leave manufacturers better informed and better able to define and articulate what their business strategies should be.”

BEST OF ONLINE

To read the report go to bit.ly/ ForesightFutureMfg. It is worth noting that sources close to the report recommend that business leaders read the full report, even if only parts of it, rather than the summary versions due to the depth of information involved.

To read our news story covering the launch of the report go to bit.ly/ Foresightreportlaunch.

Popular blog contributions last month included: Market demand will shape Factory of the Future Modular and flexible factories which respond to consumer demand to manufacture a wider range of products and models than can be achieved using conventional methods. This is the future of production and Buzz Kross, senior vice president of Design, Lifecycle and Simulation at technology vendor Autodesk says it’s closer to becoming reality than many think. bit.ly/FoctoryofFutureBuzzKross

3D printing, friend or foe?

How would your CFO react if you told them you can reduce your inventory holding by 25 per cent, simply by replacing easily replicated stock with a 3D printer in the warehouse? On the other hand, how will they react when you tell them that the company’s been stripped of its IP assets by tech savvy thieves? Antony Bourne of ERP vendor IFS discusses the pros and cons of 3D printing. bit.ly/3DPrintingFriendFoe

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All good things must come to an end While there lots of talk about how manufacturers can perfect their new product introduction processes, there’s little acknowledgement of the importance of product retirement as a part of this. Keith Nichols, principal at technology analyst Cambashi, says manufacturers are letting profit margins be eroded by overworking worn out products. bit.ly/Cambashiblog December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 27

Go direct

The Manufacturer Directors’ Conference empowered and inspired industry leaders to tackle their challenges and targets head on in an environment of growing optimism and opportunity.

Nuts & bolts The key topics covered in this review are: Reshoring Servitization Skills and youth engagement

T

here were glamour models and economists, fish finger makers and nuclear submarine builders – what a motley crew of overachievers we drew in to the Manufacturer Directors’ Conference 2013.

The two day conference was chaired consecutively by two of the UK’s leading industrial academics, Professor Rajkumar Roy, head of the manufacturing and materials department at Cranfield University and Professor Sir Mike Gregory, head of the Institute for Manufacturing at Cambridge University.

Their in-depth knowledge of the UK’s evolving industrial eco system helped contextualise the subject matter of speakers, bringing new developments in industrial strategy, trends and technology to the forefront of delegates’ minds and challenging them to apply those developments to their business plans.

Broadening the scope of contextualised thinking, Neil Parker, market strategist at Royal Bank of Scotland, which acted as headline sponsor to the event, drew attention to economic patterns and forecasts.

His observations on the relative level of business investment in the UK compared

28 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

to major global competitors should have given any investment-shy attendees pause for thought about their competitiveness, as should his challenge on exports.

“Developing economies will gain $55trn of spending power in the next 10 years as the balance of global GDP generation shifts in their favour and away from the developed world,” he observed. “How are you going to access that?”

Mr Parker also asked his audience of manufacturers to remain aware of economic developments outside their immediate sphere of business interest, sharing statistics on mortgage rates and the performance of the housing market and linking them to quality of life, job creation and demand for manufactured goods.

His information provided a strong sense of the social significance of the manufacturing industry and its interaction with other parts of the economy, providing a rounded foundation for the progression of business strategy for manufacturers in all sectors.

Against this background, two days of presentations and workshops helped manufacturers share experiences, knowledge and ideas with peers in diverse sectors.

Manufacturer Directors’ Conference 2013

Sessions were focused around key topics including supply chain management, marketing for manufacturing, reshoring and servitization. There was also a whole afternoon dedicated to the next generation of manufacturing which was led by young industry talent.

Reshoring and Servitization

These were two of the hottest topics at MDC 2013 with a hands on, competitive workshop on day 1 challenging teams of delegates to develop a business plan with supply chain strategy for the manufacture of a range of products not currently made in the UK. (See Further Reading box) On day 2 a popular presentation from the animated Nikki Hesford provided insight into her experience of bringing production of her lingerie products back from China to the UK in order to launch her Made in Preston brand.

Ms Hesford’s move was primarily motivated by the trend for ‘fast fashion’ and said that reshoring had cut the concept to sale cycle time from around six months to six days as products could now respond to a fashion trend and take a design from drawing board to the hanger in less than a week.

Ms Hesford acknowledged that she was lucky that the equipment costs and facilities needed for her production processes made the task of reshoring easier than other manufacturers might find, but said that the cost of repatriating manufacturing of her products came to just £15,000. Unsurprisingly, she said finding skilled workers with good general business capability, like phone manner, was the hardest task.

The subject of servitization was first introduced by Professor Roy in his introduction to day 1 when he observed the UK’s relatively laggard approach to the provision of services around manufactured products compared to key global competitors.

The topic was tackled in earnest on day 2 however, when Professor Tim Baines guided delegates through the appearance of servitization as the new paradigm in industrial competition. He showed how organisational structure, business metrics and systems need to alter if a company is to move through the stages of providing basic, intermediate and advanced services.

Prof Baines showed profit models which demonstrated the strong growth trajectory manufacturers, large and small,

can enjoy if they get an advanced service offering right. But, he warned, failure to acknowledge the need for changes to organisational structure is likely to cause a company to “crash and burn” due to the heavy penalties usually attached to any failure to provide an agreed capability to the customer.

Baines further explained that the traditional KPIs of cost, quality and delivery were not necessarily the correct metrics for advanced service providers because they were generally associated with the delivery of an artefact, not a capability.

Instead, Baines urged manufacturers exploring their servitization potential to build their metrics in collaboration with customers, discovering what improvements they were seeking to achieve and committing to deliver them.

In an interesting parallel to discussion at TM’s ERP Connect event – which took place concurrently with MDC 2013 – Baines highlighted that transactional ERP systems will need to integrate far more closely with technologies measuring product performance in the field in order to support profitable and efficient service provision by manufacturers.

Baines’ keynote was followed by two case studies from different sides of a servitized manufacturing business model. Mark Binns, group board director

HOT TOPIC

Developing economies will gain $55trn of spending power in the next 10 years as the balance of global GDP generation shifts in their favour and away from the developed world Neil Parker, Royal Bank of Scotland

at transport and logistics company Hoyer, gave customer insight, reviewing the establishment of an advanced service contract between his business and truck manufacturer MAN. Mr Binns was followed to the stage

by Stuart Hayward-Higham, technical director at SITA (UK) who described the elevation his waste management organisation had achieved in recent years by transforming from bin men to industrial partners. His presentation gave fascinating insight into the growing value of waste and SITA’s thirst to extend its reach and profits by putting technology in place that allows it to create new materials and energy products from a wider range of scrap

Structure of an advanced service

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 29

Manufacturer Directors’ Conference 2013

Nick Hussey, chairman, SayOne Media (publisher of The Manufacturer)

From the horse’s mouth Thoughts from

Servitization was first introduced by Professor Roy in his introduction to day 1 when he observed the UK’s relatively laggard approach to the provision of services around manufactured products compared to key global competitors

and rubbish, collected from customers in an increasingly intricate dance of optimised route plans and operations which respond to varying service demand – like a customer’s decision to host a staff party, change its purchasing strategies or implement a seasonal shut-down.

Conference delegates can review presentation slides and notes used at MDC 2013 at using the password emailed to them post event. If you did not receive a password, please contact Eva Lindsay (e.lindsay@sayonemedia. com) on 0207 401 6033.

HOT TOPIC

’s Next Generation workshop

Recent years have seen extensive comment, research and speculation on UK manufacturing skills gaps and the industry’s ability to attract and retain talent due to its image with young people.

Too often however, conclusions are drawn with apparently little interaction with young people, or respect for the opinions they express. decided to put young talent at the heart of the skills debate at MDC 2013 in an afternoon workshop where they presented their reasons for entering the industry, how their current employers managed to attract their attention and what will keep them loyal.

Speeches from David Firth, craft apprentice at Marshall Aerospace and Defence Group, John Butron, manufacturing engineering manager at Jaguar Land Rover and Cat Brownlie, project engineer at AkzoNobel confirmed that a well-established training scheme with a strong track record will give a young person confidence in stepping outside the current education main stream to take a vocational route into industry. Mr Firth shared how he was able to justify his rejection of a place at Sheffield University to his parents on these grounds, highlighting that Marshall has run its apprenticeship for almost 100 years.

For Mr Burton and Ms Brownlie, who both joined their employers as graduates, the promise of immediate responsibility, travel and clear career progression were primary motivators.

Ms Brownlie also stated emphatically that AkzoNobel’s commitment to sustainable and ethical business helped her pick it out as a desirable employer over and above other contenders for her attention.

While these messages are not a departure from most advice on recruitment and retention strategies, there is great power in hearing them from the horse’s mouth. The confident and articulate presentations from these young people should have acted as a wakeup call to delegates who do not provide apprentice training, or have wavered in their commitment to it. It also makes clear that, whatever sceptics may say about young people’s work ethic, the best talent has high expectations around clarity of opportunity and career destination.

For a blog on the Next Generation session at MDC 2013 including details of 17 year old George Edward’s challenging presentation on the weaknesses in existing education outreach programmes go to bit.ly/Diectfromyoungpeople

FURTHER READING: More coverage and supporting content from MDC 2013 is available at www.themanufacturer.com Highlights include: Review and results from The Manufacturer Collaboration Challenge Interview with Nigel Whitehead, MD programmes and support at BAE Systems on the interaction between technology developments and changing working practices at the defence contractor Workshop reviews from TM’s editorial team Outcomes from the exclusive sector focused round table debates held during MDC 2013 will be published in February in TM’s Annual Manufacturing Report.

They will also inform sector specific open letters to government to support usercentred policy design.

30 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Manufacturer Half 105 x170w_Manufacturer half 105 x 170w 01/11/2013 11:57 Page 1

Linde Industrial Park

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Merthyr Tydfil, South Wales |

CF48 4LA

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PLAYING MUSIC? MAKE SURE YOU’RE LICENSED. 74% of factories agree that playing music increases staff morale.* If you play music in your business, it is a legal requirement to obtain the correct music licences.

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

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.

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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01710 PPL The Manufacturer Factories half page.indd 1

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December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 31

if I was coming as a dancer, a singer or a piano player. No, I said. I’m a speaker and I run a manufacturing business.”

Apparently this caused some surprise.

Winning smiles

Perhaps it was due to the increasingly optimistic economic environment around UK manufacturing, or to the fruition of intense effort in recent years to improve culture and engagement in the industry, but the bursts of excitement as awards were announced at #TMAwards2013 seemed more exuberant and heartfelt than ever.

It was excellent to see so many manufacturers arrive with large teams of employees all raring to recognise their collective determination to excel in

Passion, ambition and achievement created an atmosphere of rarefied excitement for guests at The Manufacturer of the Year Awards 2013.

CATEGORY WINNERS FOR THE AWARDS WERE: Leadership and Strategy: Sheffield Forgemasters Sustainable Manufacturer of the Year: Crown Paints

T

oo often, Britain’s industrial power is spoken of in the past tense, harking back to the days of Brunel and Arkwright.

The record breaking crowd of confident, competitive and innovative companies that gathered in Birmingham on the night of December 4 provided fierce proof that British manufacturing might is a present reality, and it is champing to reclaim recognition for this fact in wider society.

Over 800 guests attended The Manufacturer of the Year Awards 2013 (TMYA2013) ceremony at the Birmingham ICC. The event was compered by TM’s chairman Nick Hussey with assistance from Richard Noble OBE, leader of the Bloodhound supersonic car programme and Nikki Hesford, founder of Made in Preston, the lingerie company for well-endowed women which recently reshored its manufacturing from China to take advantage of ‘fast fashion’ trends and brand Britain.

Mr Noble was inspiring as ever, never ceasing to amaze his audience with the sheer ingenuity behind his

People and Skills: GE Aviation Wales initiative, now supplied by 260 UK manufacturers who have faith in the project’s ability to transform the image of STEM subjects and manufacturing and engineering careers.

Ms Hesford, a former model and single mum, graced the crowd with a light-hearted account of the trials and tribulations she had faced in securing finance, skills, equipment and knowledge of the UK manufacturing landscape in order to bring manufacturing of her products back from China.

“Perhaps naively I expected support for creating jobs,” she quipped before speaking about how unprepared she found herself to manage and motivate staff – particularly young people.

Tenacious to the last however, Hesford carved her way towards her ambitions, searching out industrial sewing machines on ebay and learning about the business tax and regulatory environment on the hoof.

Ms Hesford’s parting shot to the audience before the awards began in earnest, chastised the industry for allowing stereotypes to endure. “I was asked by three guys on my way in here

32 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Innovation and Design: Kinnerton Confectionery Manufacturing in Action: Xaar (highly commended), Jaguar Land Rover (winner) World Class Manufacturing: Milliken Through Life Service Engineering: Monarch Aircraft Engineering Supply Chain Excellence: Herman Miller ICT: Hayward Tyler SME of the Year: Preformed Lined Products GB (Sub 125 employees), EnviroVent (over 125 employees) The Authentic Food Company (highly commended in the over 125 employees category) Young Manufacturer of the Year: Ross Meikle, Hayward Tyler Apprentice of the Year: Anna Schlautmann, MBDA

The Manufacturer of the Year Awards 2013

meeting new business challenges.

The 2013 awards also stood out for the unprecedented range and diversity of manufacturers represented. Old hands in the competition were there in force, but importantly there was a significant cohort of newcomers among the finalists too. (See the full list of finalists at bit.ly/TMYA2013Finalists) Again, this injection of fresh blood in the competition speaks volumes for the swelling confidence in the sector, particularly in the SME base. As, Mr Hussey referenced in his opening comments, the CBI recently reported that SMEs are leading the charge on

HOT TOPIC

A record crowd of 800 attended The Manufacturer of the Year Awards 2013

Photos of the Awards available here:

bit.ly/TMAwards2013Photos

It’s great to work at a small company where you get given responsibility quickly and can prove yourself even at a young age the urer of nufact The Ma r Award 2013 Yea

economic recovery with the manufacturing sector’s smaller businesses outstripping the growth of peers in the retail and construction sectors.

But companies large and small at #TMAwards2013 revelled in the human element behind achievements in business strategy, supply chain management, the application of information and communication technologies and responsiveness to newer influences on competitiveness like sustainability and through life engineering services.

Recognition of the dedication, talent and resourcefulness of employees was the name of the game – and so it is no surprise that some of the heartiest celebrations took place at the tables of the winners of the People and Skills, Apprentice of the Year and Young Manufacturer of the Year Awards.

Anna Schlautmann at MBDA was ecstatic as she grasped her trophy for Apprentice of the Year, “I can’t believe the judges said I was an inspiration to women in manufacturing,” she said.

“That’s one of my greatest ambitions!” Ms Schlautmann said she felt her success in transforming her school teachers’ perceptions of manufacturing so that they now actively promote apprenticeships was one of the strongest elements in her application for the prize.

R WINNE

While recognition of young talent and individual achievement is essential to inspiring tomorrow’s leaders, the decision of the judges to The Manufacturer of the Year 2013, give the overall GE Aviation Wales employs 1,200 people.

It swept to victory at the 2013 awards as Manufacturer of the best overall ambassador for competitive manufacturing in the UK. the Year Award to the winner of the People and Skills category, GE Aviation Wales, demonstrated Both Ms Schlautmann and Ross Meikle, the fundamental importance of teamwork in from pump manufacturer Hayward achieving manufacturing excellence.

Tyler who scooped the prize for Young On receiving the site’s awards Mike Manufacturer of the Year, paid tribute Patton, plant manager for GE Aviation to their employers for providing the Wales said: “I’m excited. It’s a testament to foundations for their own successes. my team. Hard work, dedication, they know “I get pushed hard to keep achieving,” what we need to do. I’m just proud of the said Mr Meikle. “It’s great to work at accomplishment and of what a small company where you get given they’ve done.” responsibility quickly and can prove yourself even at a young age.”

FURTHER READING: Where is Meikle hoping his mounting achievements and experience will lead More winners’ comments, him? With a father who progressed from photographs and news from the the shop floor to become managing awards ceremony are available at director of another manufacturing firm, he www.themanufacturer.com has no hesitation in saying, “I’d like to be the boss one day.”

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 33

SECTORfocus Eat, drink and be merry What better time of year to celebrate the health and wealth of food and drink manufacturers in the UK than over the festive period of Christmas and New Year? As we glut on turkey and mince pies let’s save a slice of celebratory cake for Britain’s biggest manufacturing sector.

FACTOIDS The UK food and non-alcoholic beverage industry exported goods to the value of £6.1bn in the first half of 2013 UK food and drink manufacturers used TWh40 of energy, equating to a sector energy bill of £1.4bn, in 2012

W

hile other manufacturing sectors have struggled to avoid contraction in recent years, the food and drink sector has proudly posted growth figures, for both domestic and international sales, throughout the recent recession.

Of course, you say. Everyone’s got to eat. Food manufacturers have got it easy – not so.

The sector has had to respond to reduced disposable income, pressure to influence consumer waste, rising expectations over delivering nutritional value and escalating energy costs in order to remain competitive.

In certain areas it has responded in magnificent style. Product innovation has made food generally cheaper, healthier and more convenient for an increasingly time-pressed, urban population, both in the UK and abroad.

The chilled ready meal is a particular UK success story with British supermarket shelves stocked with a far wider variety of meal options, representing varied global cuisines and catering to more dietary requirements than almost any other nation.

The upshot of this is that recipe and packaging development is the daily bread of the average UK food and drink manufacturer. The sector as a whole introduces 1,500 new products every year, either to appeal to developing

34 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

consumer desires – and spending power – or to accommodate new regulation and targets on salt and fat content.

Facing up to challenges in other areas is taking longer, though islands of excellence – usually in larger firms with more resource – do exist.

For instance, while energy efficiency in food manufacturing is improving, the sector still holds huge scope for more widespread adoption of energy efficient production, distribution and storage technologies which could reduce its costs and increase its competitiveness.

The food and drink sector accounts for around 20% of UK greenhouse gas emissions, so there is a strong incentive for government to encourage more food manufacturers to invest in becoming more energy efficient, thereby helping to meet its stringent environmental targets.

In 2012, food and non-alcoholic drink manufacturers spent around £1.4bn on energy, compared to just short of £1bn on automation–including instrumentation and low voltage control equipment – despite the fact that these kinds of technologies often have significant energy saving propositions.

For instance, the PDX Reactor, a technology which uses high pressure steam to cook soups and sauces far quicker than is conventionally possible, has the following energy saving propositions across a variety of products:

Food & Drink Christmas Special

600kg meat sauce, 20% energy saving 1000kg béchamel sauce, 40% energy saving 1000kg cheeses sauce, 40% energy reduction 1000kg Tomato Sauce, 20% energy reduction 1000kg Goulash Soup, 25% energy saving Yet PDX equipment, which has been on the market for a decade or more, is used by just 20 food and drink manufacturers globally.

In 2012, food and nonalcoholic drink manufacturers spent around £1.4bn on energy, compared to just short of £1bn on automation

In part, this poor uptake is due to an unpopular marketing strategy pursued by the technology’s originator Pursuit Dynamics (see box), but it is also down to a general reluctance in the sector to make capital outlay when margins are tight and contracts with supermarket customers unstable.

In TM’s Automation and Robotics supplement earlier this year, Grant Collier, marketing director at the Process and Packaging Machinery Association told the magazine: “We hear time and again that the ability of supermarkets to withdraw contracts at short notice is putting food manufacturers off making up front investment in automation. Some food manufactures have even said they do not wish to disclose information about their enquiries into automation because they fear supermarkets will make it an excuse to squeeze them further on margins.”

For Jim Mosely however, this is no excuse for holding back on investment.

The CEO of the Food and Drink Federation and managing director of General Mills UK says: “That tension between manufacturer and retailer will always be there. There will always be tough negotiations to be had over who gets what sized slice of the pie.

But that is not a reason for a manufacturer to not invest in a technology which is going to make them more efficient or could grow their business.”

Mr Mosely says SME difficulty in accessing cash and an economic background which discourages

SECTOR FOCUS

age of steam A

new

The PDX Reactor was invented in 2005 by Pursuit Dynamics, a Cambridge-based technology company which went into administration earlier this year.

The technology cost around £60m to develop and relies on a clever bit of IP which injects accelerated steam into recipes at incredible speeds and then quickly manipulates the flow of liquid foods to slow, mix and cool them, thereby controlling the cooking process. The innovation has no moving parts.

As demonstrated in the main body of the article, the technology offers significant energy savings on conventional cooking processes.

But these savings are matched, if not exceeded, by efficiencies in cooking cycle time, and manufacturers often also find that integrating the technology frees up shop floor space for additional capacity or other operations since the equipment is quite compact.

With such an array of investment incentives behind it, it seems astonishing that just 20 manufacturers worldwide have embraced the opportunities it offers to redefine competitive advantage in the production of soups, sauces, pasty dished and beverages (see a video about the implementation of PDX at brewer Shepherd Neame at bit.ly/PDXatShepNeame).

Those close to the technology development and marketing strategy say the slow uptake is partly due to a miscalculated sales strategy which was unattractive to manufacturers.

Sources say this involved demands for ongoing revenue cuts per unit sold after installation.

Technology solutions provider Olympus Automation plans to rectify the damage done and maximise the latent potential of this UKpatented innovation.

Olympus bought the IP behind the PDX Reactor from a failing

Pursuit Dynamics for £160k this May. It now hopes the technology will form a core strand in its strategy to triple its business in the next three years. Exports will be a key component in achieving this, as will a new partnership with Siemens and funding from the Technology Strategy Board.

The deal struck with Siemens extends an existing relationship between the two companies and ensures PDX is backed by a strong delivery and installation proposition with an accompanying control solution (bit.ly/PDXPartnership).

The TSB grant will deliver almost £700,000 to Olympus and its research partners, the University of Lincoln and manufacturing company Bakkavor, to support a £100,000 research project into advanced mixing and cooking technology.

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 35

Food & Drink Christmas Special

SECTOR FOCUS

Wasting away The food industry has recently come under intense pressure to reduce the amount of wasted food as population growth puts new stress on global food security and governments seek to eliminate unnecessary greenhouse gas emissions.

What are manufacturers doing to help?

experimentation are bigger barriers to a more technologically sophisticated food and drink manufacturing sector in the UK. “In recession, when cash is hard to come by, people are easily tempted to go back to tried and tested methods for improving their products, rather than experimenting with the implementation of something entirely new,” he observes.

Anecdotally, Mosely agrees that this could put the UK at a disadvantage compared to global competition in the international food market.

“The levels of incredible capital investment I have seen abroad are fantastic,” he enthuses. “The automotive and aerospace manufacturing industries are renowned for being technologically advanced, but food manufacturing is equally deserving of that reputation – or should be. I’ve seen factories where there is barely a single person on the shop floor.”

Perhaps this is part of the reluctance?

Food manufacturers don’t want to run into trouble with unions?

“Not at all,” says Moseley – as long as investment is closely linked to a growth agenda.

“General Mills’ Jus’ Roll factory in Leeds is the biggest local employer – you might therefore expect resistance every time we implement an automation solution. But in fact, our investment is linked to maximising sales, therefore the business grows and in reality you often find you could keep everyone employed and take extra people on because you are meeting the demands of a bigger business.”

In January this year the Institution for Mechanical Engineers published a shocking report which revealed as much as 50% of all food produced around the world never reached a human stomach due to issues including inadequate infrastructure, overly strict sell-by dates and buyone-get-one free offers.

Global Food: Waste not Want Not mainly criticised the excesses and profligacy of supermarkets and consumers, but manufacturers too were made to think again about what they can do to reduce waste, in the factory, at the retailer and after sale.

The battle against waste in the factory has long been waged by food manufacturers whose market is generally characterised by slim margins and, more recently, very volatile ingredient prices.

But rising expectations around influencing waste in the distribution network and in supermarkets, as well as with the consumer are newer trends.

The manufacturer’s main weapon in these areas is shelf life, which it can extend either through the use of preservatives, or through packaging innovations.

The latter is a less controversial route and, in the wake of the IMechE report, the Waste and Resources Action Programme (WRAP) launched a ‘Fresher for Longer’ campaign to put renewed energy into packaging innovation to reduce waste.

Experimentation with barrier films and new methods for modified atmosphere packaging are core activities in the programme. But there is also exciting research taking place into the use of nanotechnology to make packaging which indicates when food is beginning to spoil.

The Courtauld Agreement, a voluntary action programme on food waste stewarded by WRAP, recently released figures which indicate smarter packaging is making an impact. Between 2010 and 2012 it helped reduce avoidable household food waste by 5.3%.

Festive free-for-all But despite manufacturers’ best efforts to curb consumer wastefulness, certain times of year, namely Christmas, seem to provoke particularly wanton squandering of food.

Our lead interviewee this month, Jim Moseley, is quietly confident that food waste at Christmas is on a downwards trend – partly helped by reduced disposable income (p40).

However, even if this is true, last year’s figures from Wrap show that there’s s a long way to go before the

36 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

amount of food thrown in the bin over the festive period ceases to turn the stomach with moral disgust.

According to WRAP Britain bins and annual average of: 2 million turkeys 5 million Christmas Puddings 74 million mince pies To read more about manufacturer action on food waste see Will Stirling’s article ‘Beneath the bin lid’ at bit.ly/Beneththebinlid.

numa limite fund ber of d are ed pla fully to q availabces comualifyin le g See panies we bsit etails e .

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Unleashing the power of automation in UK manufacturing

automate uK 25th February 2014 The Waldorf Hilton, London

Automation can enable UK manufacturers to compete with any counterparts, including those based in low labour cost countries. It also increases quality and can help attain higher safety standards through the production process. This event will also demystify the fear that automation will lead to large scale redundancies. Moving into 2014 it is a business risk not to be informed about the benefits that automation can bring to your business.

Benefits of attending: Recognise the cost and time efficiencies that can be achieved through automation Find out how to manage the process of securing private public finance Identify the human capital changes required to facilitate automation Learn how automation is essential to compete on a global level Understand how to accurately forecast cost when implementing automation: equipment, time, and people Find out how to develop and extend the life of existing equipment

www.themanufacturer.com/automateuk2014 @themanufacturer

Researched and developed by:

#automateuK2014

Supported by:

Sponsored by:

Food & Drink Christmas Special

SECTOR FOCUS

It’s not unusual for manufacturers of pastry, party food and alcoholic beverages to make 40%-50% of their annual sales in December , while manufacturers of more overtly seasonal products like Christmas puddings rely on the festive period for even more of their revenues

SANTA’S

little helpers How do manufacturers cope with Christmas consumer demand?

Many food and drink manufacturers come under intense pressure to meet demand over Christmas. It’s not unusual for manufacturers of pastry, party food and alcoholic beverages to make 40%-50% of their annual sales in December, while manufacturers of more overtly seasonal products like Christmas puddings rely on the festive period for even more of their revenues.

This creates big cash flow management challenges – not to mention production capacity conundrums, but manufacturers have become practiced in planning for the festive peak.

The increasing use of ‘implants’ with retail customers has been a big factor in improving responsiveness.

Many manufacturers of key brands or products now have employees who work within supermarket planning and marketing teams.

They help them to understand the production implications of mooted price campaigns or shelf positioning and feeding back final decisions to their organisations in a timely and coherent manner.

Of course, building stock is an option for some manufacturers, but for those seeking lean operations the option is unattractive. Laying down large amounts of finished goods months in advance of their sale is also unkind to cash flow and so is best avoided where possible.

38 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

As with many manufacturing challenges, successfully overcoming them finally comes down to people and the determination and skill of shop floor workers.

This is why one UK-alcoholic beverages manufacturer chose to implement a workforce solution which is unusual for the sector, but which guarantees it has its best staff on hand to help at times of greatest need – rather than diluting its expertise with temporary workers at Christmas.

The manufacturer’s system places all permanent staff on salaried pay – so they receive 12 even payments throughout the year, smoothing cash flow despite volatile demand for labour.

Shift plans are plotted annually – with some room for flexibility. On average, each employee will work 40 hours a week, but in reality, this is reduced in periods of low demand and increased at peaks like Christmas so that employees will work a maximum of 48 hours – or four consecutive 12 hour shifts in a week.

The result is a win-win situation according the company’s manufacturing director. The employer gets reduced variability in cash flow and access to an experienced workforce when it most needs it. Employees get regular pay and the ability to plan their work-life balance clearly.

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INTERVIEW A consuming passion Jim Moseley, president of the Food and Drink Federation, speaks of both his pride and frustration in representing the UK food industry. Jane Gray interviews.

“T

here are no healthy or Pack it in unhealthy foods,” says Jim Moseley is keen to emphasise that food Moseley as he urges me to manufacturers do not blindly pander join him in topping up our either to supermarket or consumer coffee with blue-top milk. “Everyone goes demands for more of their products in for the green and red stuff,” he winces. order to fuel their businesses.

“That’s not milk.”

“No industry can, or should, rely on In an era of dietary obsession, waste for increasing sales,” states Mr his down-to-earth pragmatism is Moseley. “Manufacturers certainly have refreshing – especially in the run up a responsibility to reduce waste, in the to Christmas when supermarkets and factory, the supermarket and after sale.” food manufacturers tempt us to partake It’s a topic that has come under generously in all kinds of sumptuous intense scrutiny this year following the festive fare. publication of a report from the Institution “It’s perfectly OK to treat yourself of Mechanical Engineers in January at Christmas, and other times,” which showed that, globally, 50% Moseley says as we settle in his of food is thrown away. This high profile report threw a office at General Mills where longstanding issue into the he attends to the day job of spotlight and added fuel UK managing director. “It’s See Will Stirling’s all about balance.” to existing programmes article ‘‘Beneath OK. But how easily to combat waste. the bin lid’ at bit.ly/ does that measured Moseley says that FDF Beneaththebinlid stance sit in a world of already had a strong antagonistic pressures on track record in this area food companies? but has subsequently They must support worked with the Waste & relentless supermarket Resources Action Programme promotions of their products at (WRAP) on a Fresher for Longer the same time as shouldering more campaign to promote understanding of responsibility for consumer waste and how advances in food packaging can nutritional intake. reduce consumer waste.

40 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Jim Moseley’s career

highs and lows “Moment to savour: It’s difficult to pick a best moment. I have always ben interested by my work. But I suppose in the last three years that interest has been magnified by holding the FDF presidency. This has added a whole new dimension to my work, getting me deeply involved in industry challenges and with government. In business, you come at challenges and problems from a company perspective. What is fascinating is that, since there will be many perspectives on a certain issue within the food and drink industry, from an FDF perspective I am challenged to take all of them into balance, understand them, and form a majority view.”

Bad taste in the mouth: “I haven’t experienced my worst moment yet, but I know what it will be – retirement.

When I come to work I am consumed by the job. I simply don’t have a clue what I will do when I retire.”

Jim Moseley, president, Food and Drink Federation

An exciting possibility in this department, which brings together the world of food production and nanotechnology, is the development of packaging that can demonstrate when food is beginning to spoil.

Bye-bye BOGOF

A more sensitive area in negotiating a reduction in food waste and maintaining the integrity of industry messaging on food, is supermarket promotion Moseley admits.

“Clearly ‘buy-one-get-one-free’ offers, which have been very popular in the UK, can be seen to encourage waste – particularly of shorter life products,” he observes.

“It can be difficult,” he continues, “to come to mutual promotional strategy agreements with supermarkets.”

Particularly since these notoriously competitive retailers have only become more voraciously deal-driven since the recession brought a decline in supermarket loyalty and increasing consumer tendency to shop around for value.

However, a reduction in disposable income and a rise in price consciousness slowly altering promotional strategies says Moseley. “There’s an argument that a consumer who is concerned about cost, and about waste, is more likely to go for a lower price point than for buyone get-one-free,” he says. “Therefore, we’re seeing more ‘round pound’ deals replace buy-one-get-one-free as the favourite UK promotional model.”

The impact of these kinds of promotional cycles on the competitiveness and efficiency of UK food manufacturing is significant according to Moseley.

“The UK food industry sells an unusually high proportion of its products ‘on deal’, compared to other markets,” he explains. “The problem this presents for food manufacturers is that retailers, obviously wanting to buy as aggressively as they can for their consumers, will shop around to see what deals can be made with suppliers.”

This drives short term volatility into the marketplace, forcing manufacturers to hold more inventory than they might like because they are not sure whether, or when, a deal might be struck. Moseley explains, “A few years ago General Mills would have a clear business plan with a retailer with anticipated production

INTERVIEW

Jim and the beanstalk

J

im Moseley’s highly successful career in the food industry was, for many years, something of an accidental distraction from his primary ambition to get into agriculture.

The agricultural ideal stuck with the young Moseley through university, where he studied agriculture and food marketing.

“I grew up in north London.

But despite living in that urban environment, I started cultivating my back garden and growing runner beans as a child. I was also deeply impressed by a school trip to a model farm. I thought the idea of battling the elements every day and working outside was my dream,” Moseley recalls.

“After that, I joined FMC on a management training scheme and that was as close as I got to agriculture – everything just seemed to steer itself towards sales and marketing which I knew I had an instinct for.”

peaks and troughs throughout the year.

Today, we see that business plan being ambushed by other offers coming in from competing suppliers.”

Understandably, retailers are taking ample advantage of this, says Moseley.

“But it means that we are not as planned in our production and has added some flexibility into the supply chain at the very time when we really don’t need it.”

Bad rep

Responding to this mixture of social, ethical and commercial pressures is the lot of the modern food manufacturer and Mosely is proud of the industry’s record on facing up to the challenge.

“In my president’s speech at FDF’s annual dinner this year, which marked the body’s centenary, I spoke of the contributions the food industry has made

FDF maintains a strong presence at the annual Big Bang Fair to try and tackle the poor image of the food industry among young people.

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 41

Jim Moseley, president, Food and Drink Federation

BIOGRAPHY Jim Moseley President, Food and Drink Federation 1976:

Graduated Newcastle University with a BSc Agriculture and Food Marketing

1976:

Joined FMC (Meat) as management trainee

1977:

Promoted to assistant manager of meat manufacturing plant

1979:

Progressed through various sales and marketing roles to become junior national accounts manager

1982:

Joined Wander Foods as sales representative and progressed to become chief sales coordinator

1986:

Joined Tulip Meat Company as sales and operations manager

1988:

Promoted to sales and marketing manager

1990:

Appointed general manager at General Mills

2010:

Appointed president of the Food and Drink Federation having also served on its Food Policy Resources Committee and its Food Safety & Scientific Steering Group

Jim is married with two children. A keen sportsman, he is a former English international athletics competitor and now lectures on food and nutrition for the Amateur Athletic Board. Jim has also served as chairman of the UK Provision Trade Federation.

to society in the last hundred years in terms of money, time and health.

“In real terms food is cheaper, taking up a smaller proportion of the average income than ever before. Ready meals and processed foods also mean that it is faster to prepare food than ever before and, despite concerns about obesity, the average person is certainly better nourished, with a longer life expectancy than they had a hundred years ago.”

But even as Moseley’s litany of praise for the food industry’s achievements goes on, it becomes clear that pride is mixed with deep frustration.

“I don’t think that any of this is recognised by the general public. I don’t think the food sector’s resilience against recession, its nine consecutive years of export growth or the UK’s leadership

There’s an argument that a consumer who is concerned about cost, and about waste, is more likely to go for a lower price point than for buy-one get-onefree. Therefore, we’re seeing more ‘round pound’ deals replace buy one get one free as the favourite UK promotional model on the reduction of salt content in manufactured foods are appreciated.

“Nor is the fact that we have quadrupled the number of apprenticeships in the sector since 2011 and launched the first food engineering degree this year to raise skills and standards in the industry.”

Instead, says an incensed Moseley, food manufacturers are by turns criticised for making people fat when they don’t move fast enough to adjust recipes in response to research findings, and then for greedy profiteering if they reduce portion sizes at the behest of the Department of Health.

“The reputation of the industry is poor and I don’t think it has improved at all in the last few years,” he sums up. “That is incredibly frustrating when you know all the positive things that are being done and the benefits they bring in allowing people to have convenient, affordable, increasingly nutritious and safe food to an extent which other markets openly admire.”

42 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

INTERVIEW

Food strategy Having spent his early years hankering after a farming career, and his first professional steps managing food production at FMC, Jim maintains a fascination for the relationship between growing or rearing food and processing and manufacturing it before the marketing stage. He has strong views on the need for end to end strategic management of food supply chains.

This being the case, Moseley admits he is disappointed with the reach of government’s recently launched Agri-tech Sector Strategy, given that it has been made clear a formal Food Manufacturing Sector Strategy is unlikely.

“Government’s current approach doesn’t make sense to me,” says Moseley. “We recently had Nick Clegg [deputy prime minister] and Danny Alexander [chief secretary to the Treasury] visit General Mill’s Berwick factory and I took the opportunity to talk to them about the imperative of establishing a whole food chain strategy – not one that only deals with the primary end.”

Moseley demonstrated the inextricable link between the quality and consistency of General Mills’ pastry production, and the quality or type of flour delivered by suppliers.

“Flour can change quite considerably from season to season – due to the type of wheat and the weather. This means we have to work incredibly closely with our suppliers to understand how we might need to change our recipe or manufacturing process to eliminate variation.”

Moseley sums up: “It has not been made clear where the Agri-tech Strategy will cut off, but clearly we need to make the argument to government that there must be a strategy that covers the entire food production chain.”

6Osecond James Bradshaw, The British Family

INTERVIEW

James Bradshaw The British Family

Find out more about the family’s experiences as they rooted out all imported goods from their shopping lists at: www.britishfamily.co.uk

: How difficult are you finding it to celebrate Christmas with only UKmade products?

James Bradshaw: Keeping everyone fed and watered is relatively easy and, it may surprise you to find, cheaper than buying all your ingredients without thinking where they are from. We’ve generally found that our food bills have reduced by about twenty per cent since we started buying British.

Our biggest concern is finding a suitable present for our son Lucan. He’s three years old and this will be the first Christmas he really understands and gets excited about – but we’ve found that there is little to no toy industry in the UK. We were excited to find that Air Fix had brought back about ten per cent of its manufacturing to the UK. And there’s Orchard Toys which makes basic cardboard games. But the toy industry in the UK is in a tragic state when you compare it to Germany and much of Scandinavia which have retained their ability to make proper toys that kids want. : What about decking the halls?

JB: Finding Christmas decorations and festive ‘tat’ is proving difficult.

We can get high end decorations like hand blown glass baubles, but you can’t

In January this year, James and Emily Bradshaw made a New Year resolution – for twelve months gets they would buy only UK-made products. a festive view on the commitment.

buy tinsel and fairy lights. I know that stuff’s crap but we all love it. : Isn’t it good that Britain is focussing on high quality and high value manufacutring?

I can see that argument. Not being able to buy cheap, throw-away items means that we are investing in decorations that will last for years and which we will cherish for their craftsmanship, quality and design.

But there’s a part of me that wishes we did manufacture more for the masses.

We let the manufacture of light bulbs, for instance, which we made from the day they were invented, move abroad relatively recently. The death of that kind of consumer industry in Britain is a great loss.

I’m also unconvinced that it’s OK to retain manufacturing but sell off ownership of British brands.

It’s great if we can retain the manufacturing, but there is a need for us to maintain control of the brands which, in some cases, have been built up over 100 years and more. It’s not just about economics – there’s social and cultural aspects to this, which for us as a family is more important.

Our brands represent us around the world, and if we lose control of them, we lose control of the way we are represented as a nation.

Our brands represent us around the world, and if we lose control of them, we lose control of the way we are represented as a nation

: Are you looking forward to your commitment to British-only products lapsing in the New Year?

We’re calling this our first year as The British Family. It would be silly to give up what we have found to be a great lifestyle choice – but we won’t be pursuing British-only products with the same militancy in the future. : If you could have a Secret Santa UK-made gift this year, what would be top of your list?

A pair of Alt-Berg boots please! They’re high performance hiking boots made in Yorkshire. We also published a list of our list of top ten British-made Christmas buys, any of which would be great.

To read the Bradshaw’s list of best British-made Christmas buys go to: bit.ly/BritishXmas

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 43

Steam Turbine Rotor, Alstom Power Systems Turbomachines Group

Sustainability and growth; the impact of servitization Professor Tim Baines of Aston University’s Centre for Servitization Research and Practice continues his series explaining the servitization of manufacturing and its relevance to companies, large and small.

M

y previous article introduced the concept of servitization, where a manufacture delivers a ‘capability’ to its customer, and couples this to special features around long-term, risk and revenue sharing payfor-use contracts. (See this introductory article at bit.ly/ServitzationExplained) In this article I explore the benefits to customers and manufacturers.

The findings presented are based on an investigation structured around a panel of 31 senior executives from 28 successful organisations in the UK .

The expert panel helped to explain that the benefits of advanced services fall into two categories: Defensive: Improvements in business efficiencies, cost savings and predictability Offensive: Improvements in business competitiveness, focus and growth

The principal benefits that companies achieved are summarised in Table ONE.

Benefits for manufacturers

Manufacturers benefit from improved commercial viability. By responding to the demands of their customers, they can prevent competitors from gaining a foothold in their markets. As a representative from Alstom Power put it, “Once a third party’s into one of our machines here, they can possibly attack around the world and that’s what we try and stop with these contracts.”

Servitization also delivers increased customer numbers and growth with existing customers through closer and stronger relationships. Product development is enhanced through the gathering of data, as exemplified by MAN Truck and Bus UK, “The truck is a mobile R&D centre…I’ve now got a ten billion kilometre database of all categories of

44 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

transport where I can show quite clearly what our vehicles cost to operate”.

Benefits for customers

Customers of servitized manufacturers benefit from reduced financial risk and improved asset management. Hoyer, for instance, has a pay-per-mile-driven contract with its provider MAN Truck and Bus UK, making overall contract costs more predictable. Moreover, MAN’s data gathering and product improvement have enabled customers to improve fuel consumption by 10% and reduce CO2 emissions by 10-15%.

Another key advantage for customers is that servitized contracts allow them to focus on their core business, improving their competitiveness through better service quality to their own customers.

Alstom Transport describes how the West Coast Mainline was smaller than the East Coast when Virgin (and partners) took it over. Today it is twice the size of the East Coast because of the improved standards of rail travel; it now carries up to 32 million passengers a year. The partnership between Alstom and Virgin has delivered these improved standards.

Concluding remarks

Resilience and growth in the UK economy can be impacted positively by servitization. There is quantifiable revenue growth amongst OEMs that deliver services successfully, and consequently, leading executives see significant economic potential if the opportunity presented by these servicesfocused business models can be harnessed more effectively.

Armed with a better understanding of the servitization concept, and the potential benefits, the next challenge is to understand what it takes for a manufacturer to be successful in the delivery of advanced services. This is the topic of my next article.

Defensive: Improvements in business efficiencies, cost savings and predictability

Customers Improved financial, risk and asset management, through: Initial cost savings

Providers (OEMs) Improved commercial viability through: Response to customer demand Competitor lock-out

On-going cost reduction Transfer of fixed costs into predictable variable costs

Smooth revenue streams Response to legislation Product life-cycle extension

Improved asset security Improved asset reliability Improvements in safety Environmental improvements (e.g. energy cost/legislation) Organisational change Improved focus, investment and performance, through: Focus on core competences Higher capital investment Advanced technology adoption and access to associated skills Improved service quality to the end user

Improved growth through: Greater customer intimacy Market adoption of product innovations Market adoption of business process innovations Growth of customers New (market entrant) customers Improved product design

TWO

Customers

Providers (OEMs)

Cost reductions that can be attributed to advanced services

Business growth attributed to adoption of advanced services

Business growth attributed to adoption of advanced services

Alstom Transport: increase in passenger numbers from 13 million per year to 32 million per year

Xerox: Last year 6% growth in services revenue, due to advanced services, though total growth held back by decline in product sales revenue;

BA – 30% saving in printing and reprographic costs Islington Borough Council 28% reduction in printing costs over 4 years Sandwell Borough Council 30% reduction in printing costs over 5 years, delivered through Transform Sandwell BT 40% saving on reprographics over 4 years BAE Systems: “UK National Audit Office recognised significant cost savings for MOD”

BAE Systems: “RAF Aircraft in theatre with enhanced capability”

Table 1: Benefits of services strategies - How did customers actually benefit through services?

How did OEMs benefit? What additional, unexpected benefits were realised?

Nevertheless, there are drawbacks with servitization. For the customer, the long-term contracts associated with advanced services can disrupt innovation and technology adoption.

Furthermore, the number of people employed in the delivery of services can reduce, especially within customer operations. This may be a desired change, but may also inhibit adoption.

For manufacturers themselves, conventional revenue streams are likely to reduce. Sales of spare parts will decline, and the internal consumption of spare parts (for repair and overhaul) reduces as these become a burden on the host. Alstom Power has seen its concentrated product development and support organisation shrink significantly.

Offensive: Improvements in business competitiveness, focus and growth

Business trade-offs

ONE

Defensive: Improvements in business efficiencies, cost savings and predictability

Although quantifiable performance data is too commercially sensitive for many organisations to divulge, Table TWO captures the data that some organisations were willing to share.

Customers have experienced significant cost reductions through the adoption of advanced services, ranging from 25-30%, but impact is stronger for OEMs themselves.

A range of companies indicate that they have either achieved, or are striving to achieve, a 50/50 split in product/ service revenues. Although it is difficult to establish the precise make-up of these service revenues, there is clear indication of a ‘balanced economy’ within manufacturers, which increases resilience against economic downturn.

Offensive: Improvements in business competitiveness, focus and growth

Quantifying impact

Manufacturing Leadership

Current product/ service mix BAE Systems: 50% product 50% services Rolls-Royce: 50% product 50% services Xerox: 46% product 54% services Alstom Power: 60% product 40% services Evidence of range of companies aspiring to a split of 50% product and 50% services; (e.g.

Alstom Power – ‘by 2020 it will level out at around 50/50; MarchantCain Design - “we are aiming for a 50/50 split in five years”; W.E.T – “I foresee the business operating at roughly an even split of product vs. service in the future”)

MAN predicts 50% growth in services in the next 3 to 5 years Evidence from Alstom Energy suggests a 9% compound growth in services over the foreseeable future.

Table 2: Impact on business performance through service strategies

Sustainability and growth; the impact of servitization

FURTHER READING Made-to-serve; how manufacturers can compete through servitization and product-service systems. Baines and Lightfoot, 2013, Published by Wiley

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 45

Sex, work and ambition

The first Everywoman Advanced Manufacturing and Engineering Academy drew in women from across industry and fuelled their ambition to reach the top.

T

he latest addition to the successful Everywoman franchise, this event aimed to help female professionals in the manufacturing and engineering sector to articulate and pursue their career ambitions more effectively.

Workshops, hosted at the Royal Academy of Engineering, on career planning and perfecting your personal ‘elevator pitch’ to improve professional confidence, gave practical tips.

Meanwhile, a panel debate with women at various stages on their career ladders and from organisations such as GE, Cobham and BAE Systems, shared real insight into the tactics to employ and qualification routes to pursue to ensure women achieve their goals. It was felt this is important in helping to balance the proportion of senior women in technical engineering and manufacturing roles in the UK and alter the male dominated image of industry which potentially limits its talent intake.

Keynote presenter Jenny Body OBE shared the highs and lows of her career. Ms Body was the first female to be appointed to an executive engineering position with Airbus UK and is now the first female president of the Royal Aeronautical Society. While proud of this last achievement, Body said she is amazed to “still be the first woman doing anything at this stage in my career.”

She went on to tell TM that she feels the industry has only changed superficially since she joined it in the 1970’s. “There are fewer girly calendars. But young women entering the industry will still be faced with an overwhelmingly male environment.”

Body is adamant that, as industry business models evolve, greater effort should be made to build in the new social norms of employees, both male and female, so that more value can be extracted from employees who take mid-career breaks, whether to raise families or for other reasons.

46 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Making In late November the All Party-Parliamentary Manufacturing Group published a report based on its six month enquiry into industrial culture and competitiveness in UK manufacturing.

Jane Gray speaks to the APMG’s Thomas Kohut about what the report hopes to achieve.

Question and answer sessions at this Everywoman event were active.

Ms Body was grilled by delegates on the pressures her ambitions brought down on her relationship with her husband, who is also an engineer, while the expert panel was asked to identify specific strategies to overcome career lows and job boredom. Supply chain dynamics were also discussed with representatives from larger firms saying they felt primes had a responsibility to make diversity requirements of their suppliers.

Unsurprisingly, the UK education system and government came in for criticism for its poor careers advice system. It was disappointing to learn from one delegate, a member of the 30 under 30 Champions Group established by government in 2012 to act as trail blazers for manufacturing ambition, that little commitment has been demonstrated to follow through on the group’s desire to take its message to schools nationwide.

For more event review go to: bit.ly/EWMfgEngineering

Snapshots

What were the primary findings and recommendations of the report?

“Extensive evidence sessions showed us that, while islands of excellence exist in manufacturing, the sector overall is not wholly competitive. There are still too many firms unwilling to invest in innovation and skills or who are unaware of the support available in the UK’s industrial landscape.

“Our primary recommendation to help address this was the establishment of a 10-year cross party fiscal framework to encourage manufacturing businesses to adopt more ambitious growth strategies based on longer-term investment.”

What can APMG do to ensure action is taken on the findings of the APMG enquiry into culture and competitiveness in UK manufacturing?

“We all know it is critical for any industrial strategy that it is supported across parties so that long-termism can be embedded.

“The APGMG’s primary remit is to support cross-party communication, so we aim to be a vehicle for progress on the report’s recommendations, using our relationships with industry and parliament to convene the issues.”

What does the report mean by ‘user centred’ policy design and how will it help the UK’s industrial competitiveness?

“The report makes clear that there needs to be a radical revision of the way in which government listens to SMEs and involves them in policy design if we are to create an environment in which competitive business practices can become commonplace.

“International contributors to the inquiry gave us examples of systems where there is structured interaction between government, business and trade bodies in the design stage of policy formation.

This ensures that policy is relevant to the way the majority of businesses function – user centred.”

Where does Making Good sit in relation to other recent reports – particularly the Foresight Future of Manufacturing publication?

“We hope that Making Good will be complimentary to Foresight because it does not step on its toes. Our inquiry is much more involved in the underlying cultural issues in and around industrial trends. If our recommendations are taken forward, they will create the enabling environment for progress on the business model and technology transformations which Foresight has identified as being so critical to industrial competitiveness in the future.”

FURTHER READING: Read more about action points called for by the report Making Good: a study of culture and competitiveness in UK manufacturing at bit.ly/MakingGd The full report can be downloaded from: bit.ly/MakingGdfullreport

History

DECEMBER

Good

MANUFACTURING LEADERSHIP

THIS MONTH IN

Remembering UK manufacturing news in:

December 2003

Manufacturing statistics were positive in December 2003 with Markit/CIP’s purchasing managers index recording an eight year high in investment spending and ONS production figures indicating a good quarter overall.

British Glass opened new offices and

production research facilities in Sheffield this month while, in the food sector, Premier Foods completed its £106m acquisition on Ambrosia.

Elsewhere in the food industry things weren’t so heavenly with a seasonal scandal erupting over the conditions in Turkey slaughterhouses across the UK as a result of the rush on the festive bird.

December 2008 In the grips of the global financial crisis, unemployment figures in the UK rocketed to almost 1.9m, around 6% of the UK’s working population.

Commatech was one company which added to the rising unemployment toll in December as its Leicester factory closed on Christmas Eve. At Vauxhall, an attempt was made to

forestall redundancies by offering over 2,000 employees the option to take eight months leave on 30% pay.

The gloomy outlook was compounded by tragedy in the aerospace industry when one man was killed and another badly injured at Brookhouse Patterns factory in Lancashire.

The pair were crushed by metal girders.

December 2012

BAE System to supply In a year of spectacular Typhoon and Hawk sector tive automo aircraft. The deal helped investments, the final make 2012 the best export word was had by Nissan which announced a £250m year in half a decade for the UK defence sector. investment and 1,000 new Exports were a hot topic jobs at its Sunderland plant across business and industry on Dec 19. with the CBI’s John It was a fine month Cridland putting the subject for the defence sector at the core of his Christmas with the announcement message to members. He of Steve Wadey as chair urged them to support the of the Defence Growth brokering of a free trade signing the and ship Partner agreement between the EU of a £25m deal with the and the US. government of Oman by

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 47

West Midlands to the World

In the

work shop at ex port h ungr y Hag ue Fa stner s

UK Trade and Investment’s Export Week sparked hundreds of regional events to encourage more UK firms to send more of their products to more international markets. Will Stirling reviews Export Week’s hit success in the West Midlands which mustered the largest regional turnout.

F

rom November 11-15, about 1,250 West Midlands firms attended events as part of UK Trade and Investment’s Export Week – more than in any other region.

ExploreExport on Thursday 14 November at Edgbaston Stadium, Birmingham, was attended by 350 companies, many of whom had one-to-one meetings with commercial trade specialists from 65 countries.

Paul Noon, UKTI’s regional director for the West Midlands, said: “We have seen around 1,250 dynamic companies engaged across the region looking to grow their exports. We know the UK’s future prosperity will not come from relying on domestic markets alone and exports are vital to our continued growth.”

“There’s huge interest from West Midlands companies in the opportunities arising from the upcoming major sporting events and infrastructure projects in places like of Brazil and Qatar. The London Olympic Games showed the world that we could deliver a successful and complex project on time and on budget.”

Mr Noon’s comment was borne out in ONS statistics that showed from Q1 2011 to Q2 2013, exports from the West Midlands grew over 30%, the highest growth in any UK region by a margin of 15%.

48 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Hague Fasteners is a good example of the West Midlands export bonanza.

Managing director Jon Hague has seen the good times and the bad with his firm since setting up in 1971. But the company, which designs and manufactures special fasteners in critical alloys, is now reaping the benefits of the faith invested in its potential during harder times.

“We have grown about 20 per cent since the start of the year and 75 per cent to 80 per cent of this has been exports,” says Mr Hague.

What investments have been key to achieving this success? Hague refers to IT, social media and SEO [search engine optimisation], but adds that a lot of foreign business still comes from word-of-mouth.

FURTHER READING For more on Hague Fasteners’ export-led growth, visit: www.themanufacturer.com/exports-haguefasteners

Snapshots

EXPORTS

The world’s Mind your local bank language HSBC’s well known marketing tagline has made it amply clear that it wants to be known for its expertise in supporting international trade. In Export Week the bank demonstrated continued commitment to this cause.

F

rom November 11-15 HSBC supported 80 Export Week events across the UK, tying these in to its own national marketing campaign for more British exports.

Despite sluggish movement on this goal in the last two years, HSBC’s Trade Confidence Index, along with other surveys and reports, as has given the bank cause to be optimistic that UK exports are on the brink of a big increase. Its latest index figures showed that 61% of businesses expect trade volumes to rise over the next six months, up from 54% in the second half of 2012 and the largest increase in the last three years.

Mark Emmerson, UK head of trade and receivables finance at HSBC says that the time is ripe for this step change. “With increased urbanisation in the emerging markets creating demand for more and better infrastructure, coupled with the rising middle classes, creates opportunity for the UK. But to seize them we’ve got to get serious about trade and reaching out to new export markets.”

Furthermore, Mr Emmerson says, increasing exports is not just an opportunity for individual companies but a national economic imperative.

“As the Prime Minister has said: if we can raise the number of SMEs that export to one in four from one in five it would add £36 billion to GDP, effectively wipe out the trade deficit and create 100,000 jobs.”

Hammering home a now well-worn record to UK SMEs, Emmerson states that this means more smaller firms, which account for the majority of UK enterprise, need to become more globally mature.

To help, HSBC has made a £5 billion fund available to internationally ambitious SMEs across sectors. Last year this fund helped 28,000 UK businesses boost their export activity – particularly to nations outside the traditional comfort zones of Europe and the USA. Who has the best chance of leading the charge? HSBC predicts that machinery and transport equipment manufacturers will be the fastest movers, accounting for around 50% of total forecast growth of exports of goods to China which is voraciously investing to support infrastructure development for its urbanising and upwardly mobile population.

This upward mobility is the key foundation of export growth opportunities for a gamut of other sectors, particularly consumer and niche British branded goods.

To give an impression of the size of the emerging middleclass market, HSBC says that around £3bn people will join the global middle-class by 2050 – almost 40% of the current global population.

Entering a new market can be difficult for an array of reasons from local regulatory nuances and tax to cultural niceties.

Fundamental to mastering all such obstacles to export success is language, says Sophie Howe, MD of Comtec Translations, during a Birmingham Export Week event.

“

Almost everyone I have interviewed regarding language and culture in international business has said that it is worthwhile to take the time to learn something about the country’s language – even if the other person speaks your language fluently,” comments Ms Howe at a UKTI Export Week workshop for business leaders.

“It’s unlikely that you’ll immediately be able to conduct business negotiations in the language and no-one expects you to, but it is worthwhile to make the effort – it can make you stand out from your competitors.”

But investing in language expertise is not just about training individuals to make a good impression Howe continues. “We are very aware when we see a website that has been translated into English in a rather clumsy way. What impression does it give? Are you less likely to trust them? What if you are spending £1000s with them?” Howe urges businesses to give real consideration to the impression their existing marketing, sales and other company literature might make in new markets – and to acknowledge that direct word for word translations are rarely successful due to different cultural references and language structure.

A couple of Sophie’s tips to internationally ambitious executives include: Even if your customer speaks your language fluently – learn a greeting and a few other words as a minimum. A little knowledge of their language will help you understand better when they speak yours – e.g.

Finnish doesn’t distinguish between genders, Chinese has no tenses.

Web users are four times more likely to purchase from a site that communicates in their own language, so consider translating your website to attract more international customers. Use professional translators – your reputation and brand are at stake

For more of Sophie’s language tips for first time exporters go to: http://bit.ly/1gludn4 December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 49

Paul Morgan

EMPLOYEE OF THE MONTH December and January 2013

Paul Morgan

Maintenance Technician, Mondelez International

CV IN BRIEF Paul Morgan Age: 26 Education: Electrical Installation Apprenticeship (Level 3), Engineering Apprenticeship (Level 3), Foundation Degree in Electronic Engineering (Level 5) Career to date: Temporary operator, Cadbury; engineering apprentice Mondelez International Hobbies and interests: Spending time with family, outdoors activity, football

50 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

EMPLOYEE OF THE MONTH

Paul’s dedication to developing his skills, getting the best results possible for his company from improvement projects and contributing to his community were recently recognised with an award for Apprentice of the Year at the Food and Drink Federation Awards. : What is your role and what are the main responsibilities?

I’m responsible for cost saving continuous improvement projects at Mondelez’ plants five and six in Bourneville where we make Cadbury’s Dairy Milk bars and Freddos among other products.

I’m also responsible for responding to breakdowns in the plants. : What are the key technical skills you use and what personal characteristics make you good at what you do?

I use a lot of the electrical and mechanical engineering skills gained through my apprenticeship, but really every day is just about trying to absorb as much new experience as possible. On a personal level, confidence and communication help me to do well. You need to have the confidence to try new things and since two heads are often better than one in solving a problem, you have to be able to communicate with people around you. : What do you consider to be your biggest success so far?

Winning the FDF Apprentice of the Year Award has to be my best moment. It came on the heels of winning the Mondelez internal

award for apprentice of the year so it was a double recognition that I am very proud of. The main thing I feel the award recognised was my contribution to the Brathay Challenge which is all about giving back to the community and that is very important to me. I think gaining the award has made me more confident in my career ambitions – it certainly seems to have inspired some of the other apprentices here, many of whom have come and congratulated me at work. : What will be your next career move and do you have a grand career ambition?

I’ve just complete a foundation degree and I’d like to go on to complete the full course. I really enjoy working in plant 5 and 6, but would like to gain experience in plant 1 and 2 which have the newest production technology and are where we make the Cadbury Marvellous Creations products. Eventually I’d like to become an engineering manager and to take up the opportunities for international travel that working for a global company like Mondelez can offer – but not for a few years as I have a young family. : How do you think best to get more young people interested in manufacturing?

We need to get more young people visiting factories – at Mondelez this is supported through our Taste of Work programme. The problem is that people have very little about what does on in a factory – about the jobs in between goods coming in and products going out. Also, the learn-while-youearn proposition of apprenticeships needs to be promoted more actively in schools.

Find out more about the Food and Drink Federation Awards at bit.ly/FDFAwards2013

Snapshots

Skills on Show

Putting vocational careers on the map

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he Skills Show was established in 2012, bringing together the National Training Awards, the National Apprenticeship Awards and the WoldskillsUK competition. It then added a huge new exhibition to create the UK’s largest showcase for vocational career paths and success stories.

75,000 school children and adult learners attended the event this year to find out about the qualification routes for vocational careers. TM’s James Pozzi attended this year’s Skills Show and shared the practical fun and excitement he witnessed as youngsters were encouraged to uncover their ‘secret skill’ and understand the importance of their abilities to their own futures, but also to business and the national economy. (Read James Pozzi’s Skills Show 2013 review at bit.ly/SkillsShow2013) The Skills Show spans a range of sectors, including manufacturing and engineering. Crown Paints, BAE Systems, Toyota and HS2 were among the 2013 industry exhibitors while stands from training and education organisations like Semta and the University Technical Colleges helped to close the loop between education and the career destinations on show.

Acknowledging that industry’s ability to attract and retain young talent relies heavily on the attitude of parents, the Royal Academy of Engineering hosted a provocative debate at this year’s Skills Show titled Apprenticeships: for other people’s children? The debate was prompted by research conducted by BAE Systems and the RAEng which suggests that while perceptions of apprenticeships are improving among the majority, higher earning parents tend to view them as undesirable for their own children. (bit.ly/Apprenticeshipimageresearch) To see a video produced by BAE Systems and Semta at the Skills Show which profiles female manufacturing and engineering apprentices and young professionals go to bit.ly/BAEGirlPower.

WORKFORCE AND SKILLS

Calu was m Knott winn among from M id ers a th t the e World dlesex U Sk Skills n Show illsUK goiversity 2013 ld me dal

mme t progra Gap pilo The Skills cast tours Alu

Closing the Skills Gap: Pilot Update 1 Cheryl Philips, programme director for the Design and Technology Association’s Skills Gap initiative updates TM on its teacher training initiative.

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he first teacher training sessions took place at Alucast, Renishaw and Airbus in November. SME Alucast and its partner school ACE Academy, Tipton, were the first to complete the inaugural training.

The Skills Gap programme, which links schools with an industry partner, is designed to develop the knowledge and skills of D&T teachers, helping them contextualise their curriculum requirements.

Preparatory work and foundation workshops have now been carried out with all three schools and partner businesses in the pilot programme to identify the specific skills and knowledge each wants to gain and embed relevant industry knowledge.

During its workshop ACE Academy received a guided tour of Alucast’s foundries, enabling teachers to consider how they could use the company’s expertise in developing a relevant project with their pupils.

The workshop inspired teachers to consider a range of potential projects. Glenn Bates, head of the DT Department at ACE Academy commented: “The session was positive and productive. It was great to hear lots of ideas coming from everyone. We’re looking forward to firming these up and moving on to the next stage where we get the pupils involved.”

For more information about this inaugural Skills Gap training session and next steps in the pilot programme go to: bit.ly/SkillsGapUpdate1 December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 51

Business Growth Fund

Finance & Professional Services

VTL Group recently received a £4m investment from Business Growth Fund

To sell or not to sell: When is the question Mark Bryant, business director of the Business Growth Fund explains why his organisation offers business owners two bites of a cherry – the means to continue building their company for a profitable future and the immediate benefits of some cash out.

T

he reasons why a business owner might choose to sell are varied but often it comes down to capital requirements.

Either additional financing is needed to take the business forward but is not readily available, or not on terms that is attractive to management, or shareholders are keen to realise the benefits of their hard work and cash out.

However, whether to sell is not the only critical decision that a business owner needs to make. When to sell is equally important.

Is now the right moment?

When you started your business, you had an ambition and a clear vision.

Have you accomplished all that you hoped or is there long term potential

still to realise? What might your company look like in three, five or 10 years time?

Could you double your workforce or treble your turnover? Could you expand out of your home region through organic or acquisitive growth and develop a national or international footprint?

Turning aspiration into reality

These could be more than just aspirations, and it is here that the Business Growth Fund (BGF) aims to help.

Backed by the major UK banks and with up to £2.5 billion to invest in companies typically turning over between £5m and £100m, BGF’s purpose is to help owners grow their businesses and, in so doing, increase value.

52 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

We do this by offering companies an injection of long-term growth capital and our hands-on support as a minority equity partner.

To date, BGF has backed 36 companies, of which 11 are manufacturers, across the UK. So, if you believe that now is not the time to sell all your business, might you consider selling a minority part of it in order to raise money and bring in a partner who can strengthen the senior management team?

Many business owners fear that taking on external investment will result in a loss of control, but we only buy minority stakes – and at a fair price.

As equity investors, we take a calculated risk on the future success of your company and are therefore focused on its growth potential.

This ensures that the relationship is a real partnership. We bring not only capital, but also a book of contacts and broader financial and operational expertise.

All of this will benefit your business and put it in a much stronger position for sale in the future, should that be an option you wish to pursue. www.bgf.co.uk.

BGF invested almost £4m in luggage manufacturer Trunki

M&A news in brief: Brief news of recent acquisitions in the UK manufacturing sector: Burton’s Biscuits sold to private equity firm Ontario Teachers Pension Plan for £350m.

Allied Glass sold to private equity firm CBPE for £120m+ NorthEdge Captial invested £25.5m in diversified chemicals manufacturer Fine Industries Find out more about these deals at www.themanufacturer.com/news

Pinsent Masons

Finance & Professional Services

A claim free Christmas Neil Black, partner, and Asha Cook, solicitor, at law firm Pinsent Masons provide a brief guide for employers to hosting employment tribunal claim-free Christmas parties.

W

ith the festive season in full swing it is time for the traditional “Bah Humbug” employment law article. So, let’s inspect the ways in which giving in to frivolity might land you in legal trouble – and how to avoid them.

Invitiations

Christmas is a Christian holiday, so do not pressure someone to attend Christmas work events if they do not want to on religious grounds. If the event is out of hours, remember also that some people have family responsibilities that may prevent them coming.

Decorating the office

As long as a proper risk assessment is carried out you will not normally fall foul of health and safety rules. However, your insurance may not cover damage caused by untested electrical equipment, so switch off tree lights before going home.

disciplinary process. Do not discipline any employees at the party itself - send them home, if appropriate, and deal with the incident when you are back at the office.

Limit the spirit

A free bar throughout the evening will encourage excessive alcohol intake - consider restricting the amount of free alcohol available and be prepared to ask individuals to take it easy if necessary. Be respectful of employees who do not drink and keep an eye out too for the office junior - employers cannot allow under-18s to drink.

Party policies

The office Christmas party is, in reality, a workrelated activity so make sure you provide clear written guidance to all employees about acceptable standards of behaviour at work-related social events and on the disciplinary sanctions that could result from breaches of the rules. Make it clear that fighting, excessive alcohol consumption, use of illegal drugs, inappropriate behaviour, sexist or racist remarks, and comments about sexual orientation, disability, age or religion will not be tolerated.

Misguided by mistletoe

An office Christmas party is legally an extension of the office environment so employers are likely to be vicariously liable for acts of harassment, discrimination, assault or other unwanted conduct carried out by their employees. If any such allegations are made during or after the event, employers should follow their usual

An employer might still be responsible for their employee driving home from an office party.

Issue advice in advance about not drinking and driving

Criminal offences and drugs

It is an offence for an employer to knowingly permit or even to ignore the use, production or supply of any controlled drugs taking place on their premises. In addition, employees who are convicted of criminal offences may also damage their employer’s reputation or undermine trust and confidence.

Promises, promises

Managers should avoid conversations about performance, promotion, salary or career prospects. Remember, a promise made at a Christmas party is still a promise!

Getting home

Consider how your employees will get home after the party as an employer might still be responsible for their employee driving home from an office party. Issue advice in advance about not drinking and driving. Think also about providing transport home, or at the very least, encourage employees to think about how they will get home.

The morning after

Be clear about your expectations regarding absence the next day. Ensure that all staff know the extent to which you will be lenient about coming to work late and that, if your expectations are breached, disciplinary action may be taken.

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 53

Peter Russell, Royal Bank of Scotland’s head of manufacturing & industrials, discusses the crucial role of ‘green’ supply chain credentials within competitive tendering.

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anufacturers investing in the sustainability or ‘green credentials’ of their supply chains are not just staying on the right side of regulation and public opinion. They are also finding that it is a crucial determinant of competitive success.

Research from the Carbon Trust shows that £1.6bn is spent unnecessarily each year by UK businesses on their energy bills and that most could easily reduce these costs by around 15% (and often more) by adopting energy efficient technologies.

Standing still is no longer a viable prospect for any business, as rising costs will inevitably have to be passed on to customers, potentially making businesses less competitive than their rivals.

Furthermore, under the Climate Change Act 2008, all FTSE 100 listed companies are required by UK law to report their carbon emissions annually, something every firm will eventually have to do as the government policy on reducing greenhouse gases is rolled out.

However, leaving the potential cost savings and legislative aspects of implementing energy efficiency measures to one side, we are now finding that the majority of Requests for Proposal (RFPs) are demanding extensive information about supply chain sustainability.

What this means is that the success of tenders is becoming increasingly influenced by manufacturers’ in-house environmental policies; in fact it is becoming a prerequisite for tendering. This is now about much more than simply cutting costs; it has become central to generating profits in a world where difficult questions are being asked of OEMs, not just about their own global footprint but also those of their suppliers.

We see this happening in many different locations – from Apple’s decision to bring more manufacturing back to the United States, to Marks and Spencer’s aim of making its supply chain environmentally sustainable by 2020, to the German government’s ruling that public sector procurement must consider not only the hardware price but the hardware price plus lifetime electricity. The question now for corporations is not so much whether they can afford to ‘green’ their supply chain, but whether they can afford not to.

54 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Green edge

How green is your supply chain?

The concrete effects of these demands are exemplified by the transformation of the Westbridge furniture factory in Wales, Marks and Spencer’s first dedicated UK eco-factory.

Since 2008 it has reduced its CO2 emissions by 48%, energy use by 56%, water consumption by 30% and diverts 95% of all waste away from landfill.

According to Marks and Spencer, the factory now produces the ‘world’s most sustainable sofa’, featuring the husk fibre of coconuts blended with natural latex to replace the PU foam traditionally used as sofa stuffing.1 In 2012 the DHL Supply Chain was awarded a contract extension to continue managing UK warehousing and goods distribution for BP’s UK convenience retail business arm until 2018, building on their eight-year track record of introducing efficiency improvements for BP UK. During this time DHL implemented a number of sustainability schemes to create cost and carbon savings – for both companies. In 2008, a joint initiative saw DHL and BP embark on a carbon neutral initiative to implement recycling, backhauling and vehicle sharing to cut both companies’ carbon emissions, resulting in meaningful carbon and carbon tax savings.2 It’s an example of the benefits experienced when companies work closely with their suppliers to strengthen the supply chain and introduce initiatives which benefit everyone.

Smarter supply chains incorporate sustainable policies throughout their products’ life cycle using real time connectivity and ‘smart object’ reporting systems which allow supply chain partners to achieve a prompt and coordinated response to potential problems.

For example, when Airbus, one of the world’s largest commercial aircraft manufacturers, was finding it increasingly difficult to track components sourced from suppliers in ever more geographically far-flung locations, the company created a smart sensing solution to detect when inbound shipments were deviating from their intended paths.

From the suppliers’ warehouses to the assembly line, smart containers fitted with RFID tags hold information which are regularly checked by automated readers.

This has greatly reduced the incidence and severity of delivery errors. This feature

ROYAL BANK OF SCOTLAND

also enabled Airbus to reduce the number of containers they use by 8%, significantly impacting on transport costs.3 These sophisticated analytics are aiding sustainability of supply chains by optimising energy and resources in order to operate more efficiently. Supply chain executives are thus able to demonstrate that environmental awareness is embedded within the ‘DNA’ of their supply chain with a high degree of transparency.

Smarter supply chains incorporate sustainable policies throughout their products’ life cycle using real time connectivity and ‘smart object’ reporting systems Walking the walk

Transport is naturally a key area: logistics and transport emissions account for up to 15% of a product’s lifecycle emissions4.

It’s therefore vital to work with transport companies to ensure that carbon emissions comply with standards, reduce fuel consumption (especially given current price volatility) and evaluate how customers can be most efficiently reached. With alternative fuels such as biofuels providing the potential to reduce transportation costs by as much as 30%4, transport providers are adopting fuel-efficient vehicles and technologies to remain competitive.

The containers used also require consideration – according to Hewlett Packard, a simple move to replace wooden shipping pallets with plastic pallets (weighing less than a quarter of the wooden ones) is estimated to be saving 7,000 tons of CO2e (carbon dioxide equivalent) emissions per year on AsiaEurope routes5.

Counter-intuitive as it might appear, the plastic pallets, despite costing more, deliver significant environmental advantages over the traditional wooden equivalents.

Another important area is the use of packaging: Companies such as Hewlett Packard are heavily reducing their use of polystyrene and PVC packaging alongside substituting air freight with ocean freight and shifting road shipments to rail.

According to Blair Chikasuye, Hewlett Packard’s environmental programme manager for Global Logistics “we’re finding that any time there are logistics cost savings, there are typically environmental savings as well”.5 Many new materials being developed to replace the PVC in wires and cables and reduce the use of polystyrene substitutes which are cheap, durable and biodegradable, using everything from agricultural waste to recycled paper – unpack your new TV and throw the packaging on the compost heap.

It is becoming more vital to look down your own supply chain and ensure that the products and services you purchase and manufacture minimise damage to the environment. However, this is not just about reputational risk – although a recent World Economic Forum survey showed that 85% of consumers are extremely or somewhat concerned about climate change - it is about the ability to demonstrate sustainable credentials as it becomes an increasingly necessary component in the tendering process.

Combined with the competitive edge gained by reducing costs and the inexorable regulatory and societal pressures bearing down on companies’ sustainability agendas, it means that greener supply chains could ultimately become compulsory for doing business.

References 1

corporate.marksandspencer.com/investors

2 http://www.logisticshandling.com/ articles/2012/06/06/1892-dhl-extendsrelationship-with-bp-until 3 IBM: The Smarter Supply Chain Of The Future, Global Chief Supply Chain Officer Study 4

World Economic Forum: Supply Chain Decarbonisation Report 2009

5 Accenture Report. Hewlett Packard: Sustainability as a Competitive Advantage

further information To find out how RBS can support your manufacturing business contact: Peter Russell Head of Manufacturing & Industrials, RBS Corporate & Institutional Banking T: (0)20 7672 1007 E: peter.russell@rbs.co.uk

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 55

The future: coming soon, to a business near you Malcolm Wheatley finds out why manufacturers concerned about the future relevance and resilience of their supply chain management strategies should attend Oracle’s Supply Chain Debate in February 2014.

W

hat will the supply chains of the future look like? How will we manage them? And what role will information technology play in actually helping us to manage them?

One thing is certain: we can only guess at the answers to all three questions. As ever, the future is unknowable.

But that doesn’t mean that we shouldn’t be thinking about that future, and its impact on supply chain management. For if, as they say, fortune favours the brave, then it must assuredly also favour the prepared.

Put another way, the future is getting ever closer. And there’s ample case study evidence of companies losing out due to strategic mis-steps in response to those changes in supply chains that we’ve already seen in the last few years.

But how best to prepare? An event to be held in London on February 4, 2014 hopes to offer a way.

Knowledge exchange

Kicked-off by a keynote presentation from Cranfield School of Management professor of supply chain strategy

Logistics and supply chain management have changed enormously in just a few years, and it’s clear that further change is inevitable Vikram Singla

56 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Richard Wilding OBE, the event will see 30 or so attendees engage in ‘round table’ debate and discussion, concluding with networking drinks.

Free to attend, and hosted by Oracle, the event is one of a series of such get-togethers planned for the coming months, each led by an eminent guest speaker from the world of supply chain management.

“Logistics and supply chain management have changed enormously in just a few years, and it’s clear that further change is inevitable,” explains Vikram Singla, business development leader for supply chain applications at Oracle. “The idea behind these events is to better understand where companies’ supply chain strategies are heading, and how companies will have to respond in the context of that change.”

And certainly, he adds, it’s not difficult to see some of the factors that are at work, shaping and influencing that future.

Altered expectations

More than ever, for instance, supply chains – and effective supply

Trends and leadership

Oracle Supply Chain Debate When? February 4, 2014 Where? Oracle Offices, London Why? Get expert insight into the trends shaping the future of supply chain management and debate their potential impact on business with peers To find out more contact: Petra Fynn at petra.flynn@oracle.com

In large part, this began during the financial crisis and ensuing recession of 2008-2009, of course. Needing to cut costs, companies took a hard look at where many of those costs arose – their supply chains.

But today’s focus is different.

Efficiency and effectiveness are still on the agenda, of course, but CFOS – and senior supply chain executives – realise that there are strategic decisions that must be made in order to align corporate strategy, finance, tax efficiency, and operational performance.

And so on. As always, the business world isn’t short of hypotheses about what might happen, and how events might transpire. The important thing, stresses Singla, is for businesses to have considered the eventualities, so as to avoid being behind the curve when the future arrives.

Which is why, he adds, Oracle is delighted to have secured Cranfield School of Management’s Richard Wilding as the inaugural keynote speaker.

For whatever the future holds, it’s vital to have technology that’s fit-for-purpose, rather than being forced to scrabble to play catch-up Intellectual invigoration Vikram Singla

chain management – differentiate businesses competitively.

In the decade just gone, globalisation and low-cost country sourcing have redrawn supply chain networks significantly. In the decade ahead, though, the evidence suggests that there’s likely to be a renewed focus on agile responsiveness, and on meeting customers’ needs through a broader range of fulfilment mechanisms and routes to market than is now the case.

And whether you call it ‘omnichannel’ or not, says Singla, behind the buzzword lies a very real challenge: ensuring that products are available at the point of sale without increasing supply chain costs in the form of additional inventory, higher logistics charges, and the costs of writing-off obsolete or surplus materials or products.

And speaking of costs, adds Singla, several recent studies have highlighted the way in which the costs of supply chains, and supply chain management, have in recent times leapt sharply up the corporate agenda. CFOs, in short, are taking a distinct interest in supply chain costs.

Cranfield’s Supply Chain Research Centre is one of Europe’s largest centres dedicated to research into logistics and supply chain management, and works closely with businesses at the cutting edge of supply chain best practice.

So what will attendees hear from Professor Wilding on February 4th?

One thing is sure: given Wilding’s welldeserved reputation as an engaging and insightful speaker, boredom is unlikely. In a 45-minute slot, the pace will be lively, and the content sharp and focused.

Peppered with real-life examples, it’s likely to give those listening ample food for thought.

His presentation will provide he spark for the more intimate round table debates among small peer groups.

“At Oracle, we’ve an obvious interest in technology,” sums up Singla.

“But technology can’t exist, or be developed, in isolation. If businesses are to use technology to maximum effect, then businesses and technology providers alike must drill down to the real meaning behind the buzzwords, and figure out the real use case, and the real benefits. For whatever the future holds, it’s vital to have technology that’s fit-for-purpose, rather than being forced to scrabble to play catch-up.”

SuPPLY CHAIN

Past performance Oracle’s event in February is by no means it’s first foray into hosting peer debate on supply chain challenges.

On October 16, Oracle, in partnership with The Manufacturer, hosted a supply chain thought leadership dinner debate designed to help supply chain managers elevate their concerns on the board room agenda.

This dinner event was introduced by a keynote from Professor Steve Evans, director of the EPSRC centre for Industrial Sustainability.

Professor Evans shared insight into his involvement in the Foresight report Future of Manufacturing and suggested that the sector is on the brink of transformation.

He highlighted eexperimental ideas being investigated companies like Marks & Spencer to use 3D printing for in store manufacturing – a revolution which could alter the supply chain structure we know today beyond recognition.

Evans observed a historical lack of innovation and forward thinking in supply chain management and urged diner guests to think more creatively about the potential of leveraging social and technology trends to develop new competition models.

After this challenging introduction, guests split into four discussion groups for peer debate covering the following themes: Product innovation: why is it important to revenue growth?

Sales and Operations Planning: Getting stated and securing executive buy-in Logistics: Is it time to insource logistics or outsource the supply chain?

Superior order fulfilment: why is it critical now?

For a review of discussion and key findings at this dinner debate go to: bit.ly/OracleDinnerDebate

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 57

Automation Abroad

MANUFACTURING TECHNOLOGIES

Robots Abroad Will Stirling assesses attitudes to automation in Germany and presents a case study to demonstrate the national norm for maturity in technology adoption.

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ermany is the largest robot market in Europe with 17,500 units sold in 2012, nearly six times the 2,900 sold in the UK. But 2012 was still 10% lower than the all-time-high 2011, according to the International Federation of Robotics.

The automotive industry has been the main driver of growth in robot installations in Germany. But in 2012, automotive reduced its investment in industrial robots while ‘general industry’ applications in welding and food picking, for example, ordered more.

Opening doors for efficiency

Meiller Aufzugtüren is a medium-sized door panel manufacturer.

More than 80,000 door panels leave the plant of Meiller Aufzugtüren in Munich every year and no two door panels are identical. Passenger and goods elevators are always tailor-made, precisely adapted to the technical requirements of the building they are

destined for. Production is in small to ultra-small batch sizes in an endless procession of variants.

Klaus Schafranietz, factory manager, rose to this challenge with an intelligent system developed and built by Schneider Maschinenbau of Lennestadt.

The system is highly, but not fully automated: “We are deliberately using a hybrid system concept, because we are firmly convinced that our enormous production spectrum would be beyond the capabilities of a fully automated system and that it would negatively affect re-tooling times,” comments Mr Schafranietz.

“The combination of robot-assisted and manual activities has proven highly effective in producing about 1,500 door panels every week,” he adds.

The work packages are deliberately distributed unevenly. An operator’s activities are restricted to loading the sheet metal and sections as well as clamping the parts while the two

58 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

industrial robots – provided by Kuka Robotics – carry out all the requisite production steps: projection welding, spot welding, handling, stamping, forming and finally placing the ready-toinstall door panel.

The operator, on one side of the changing table, loads and clamps.

The other side is already prepared for assembly.

In the first step, both robots can start on the required welds. Robot 1, pedestal-mounted for maximum reach and equipped with a special welding gun, carries out the projection welding. This process offers the advantage that two welds can be carried out in one stroke, connecting the top and bottom of the outer shell with the outer rail simultaneously.

At the same time, robot 2 spot-welds the open U-rail to the underside of the door panel. This procedure takes less time than the projection welding, so while robot 1 is still welding, robot 2 quickly swaps over its welding gun for a vacuum gripper.

“With our new system we achieve maximum flexibility and we set a benchmark for our production,” says Herr Schafranietzhe. “The welding robots and the welding that is used ensure perfect welds and a precisely defined energy input. The panels only become hand warm during welding. We have very little thermal distortion, deformation or rotational offset any longer.”

Examples of robot usage at small and mid-size design and fabrication companies like this can be found all over Germany where there seems to be a better inherent understanding of the productivity advantages of robotics among smaller and midsized manufacturers than in the UK.

Automation Advisory Board ’s Automation Advisory Board was formed to help UK manufacturers better understand the potential in their processes for automation.

For more information about the board’s members and how they might help you contact Henry Anson: h.anson@sayonemedia.com.

Automation Index

MANUFACTURING TECHNOLOGIES

Automation Index

Gambica industry segments explained: Industrial Automation: Any technology which automates a factory process which is not a continuous manufacturing process. The segment immediately reflects downturns and uptick’s in the discretionary spend of its user base. The segment is highly dominated by multinational companies selling into the UK and has less UK-based sales value creation than other segments.

Dr Graeme Philp, CEO of Gambica, explains the trade association’s 2013 index of member prosperity.

E

ach year, Gambica surveys its members’ sales figures in order to compile an index which reflects the amount of wealth generated in the UK by automation companies based in Britain.

These automation companies range across three industry segments: industrial automation, process control and laboratory technology. The wealth index includes both value generated by the design and manufacture of equipment in the UK, and value generated by the location of sales offices in Britain since this signifies employment and commitment to the UK as a market and skills base.

Tracing technology sales in the UK back to the pre-recession days of 2006, the index shows an impressive long term upwards trend across all of Gambica’s industry segments.

In the midst of excitement over a general return of confidence to UK manufacturing, Dr Graeme Philp, 150 145 140

Gambica’s CEO, says the index has two important messages to communicate, firstly to technology vendors and secondly to the UK user base.

“To companies in the sectors we represent, this index is a bolster to confidence. It confirms that automation is a growth industry and with understanding growing around the potential of the internet of things and Industry 4.0, vendors can be sure growth will continue internationally.”

For the UK user base, Dr Philp’s message is more urgent.

“It’s a shame that the UK user base doesn’t seem to have fully got the message about the value about of automation. At one stage we were at the forefront of investment in manufacturing technologies – indeed this historical strength in investment is the foundation for the presence of so many multinational automation companies in the UK, for skills and revenue creation if not production.

Index

Laboratory technology: Equipment to support both academic and industrial chemical and biochemical laboratory research. This segment includes large multinationals, which are highly acquisitive, but also a healthy UK-based SME community.

Segment sales are export-led but there is a strong UK market.

“If automation has been important to competitive manufacturing in the past, it is about to become more so. If investment does not pick up in the UK, the industry risks falling behind, but also losing its attractiveness as base for the generation of international automation revenues.”

Gambica Index

135 130 125 120 115 110

FURTHER INFORMATION:

105 100 95 90 85 2006

Process control: Automation technologies for continuous processes. The pre-recession oil-price bubble drove high sales for this segment in 2007-2008. A ‘fly wheel’ effect cushioned the segment from recession since programmes tend to include large civil engineering projects which cannot be easily abandoned. The segment is characterised by large foreign-owned companies but sales for global markets are often made via UK offices.

2007

2008

Gambica Index Laboratory Technology

2009

2010

2011

Industrial Automation UK GDP

2012

2013 est

Process Control

Gambica is the UK trade association representing instrumentation, control, automation and laboratory technology manufacturers. It recently joined TM’s Automation Advisory Board. www.gambica.org.uk

Source: Gambica/ ONS December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 59

Automation Strategy

MANUFACTURING TECHNOLOGIES

Champion ? or Gary Wyles, managing director, Festo Training & Consulting identifies the different personality types which will affect the success of an automation project.

A

utomation increases efficiency and helps make better products for less as well as allowing employees to be redeployed into higher value-add roles.

People are essential to the successful implementation of automated systems – yet few manufacturers consider them when planning or executing an automation project.

The key to taking the human element in automation into account effectively is to understand the character groups that technology projects draw out. Festo Training and Consulting has identified key personality traits and developed the 3 Dimensions of Employee Engagement to help businesses manage their automation programmes better. The three dimensions are: Alignment Personal Satisfaction Drive (Proactive or Reactive) These scales enable employees to be identified as engaged, not engaged or disengaged to varying degrees:

Fully Engaged – Champions & Ambassadors

Champions and ambassadors will be fully engaged in any automation project. They will add drive and will be proactive.

Champions are aligned to the organisation and love their job. They will endorse the project and work hard to bring people round to their point of view.

It’s very useful to have someone from the shop floor as a champion, as they will be more trusted than senior management.

Ambassadors are positive and aligned, but will be less proactive - they will not overtly seek to change people’s opinions.

Not Engaged – Prisoners & Passengers

While aligned with organisational objectives, the prisoner lacks satisfaction with their job. However, they can be moved to engagement by working alongside champions or ambassadors.

A passenger is really just along for a ride. They will be unsatisfied with their career and although they might understand the rationale for automation, they will not proactively engage with the process.

Not Engaged – Challengers & Sceptics

Challengers are satisfied with their job but will question the validity of any change.

Lower in the alignment scale, they can be negative about automation. However, all is not lost. Challengers will seek facts and figures and if an automation project makes sense to them, their opinions can be changed.

Sceptics are not aligned to the organisation. They will have a lower sense of personal satisfaction in their role and will show little drive, often overtly opposing the strategy. Other team players will find them difficult to work with.

60 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Actively Disengaged – Saboteurs & Thieves

Saboteurs are unsatisfied with their job and responsibilities. They are not a lost cause as they are often highly motivated and clear explanation of the rationale for automation can convert them into challengers.

Thieves are the most disengaged and dissatisfied group. They will be completely out of alignment with the organisation. The term ‘thief’ implies their covert nature, stealing time and satisfaction from others as well as, potentially, physical items. Hopefully an automation project will not have a Thief. If there is one, the best advice is to eject them as soon as possible.

Identification of the personalities involved in an automation project is usually only done when problems arise.

This is too late. Employees need to be considered at the start of an automation project. Early involvement will ensure a successful implementation meaning that the organisation reaps the benefits of increased production and productivity – with the additional bonus of increased engagement of its people.

FIND OUT MORE www.festo-didactic.co.uk

Case Study: Kuka

MANUFACTURING TECHNOLOGIES

Vaillant UK Vaillant UK has achieved a 20% increase in production and improved health and safety records thanks to a Kuka robot solution.

About Vaillant

The Kuka robots will have paid for themselves within 2.5 years

Vaillant Group is a heating technology manufacturer, employing over 10,000 people worldwide. The company has a 140 year legacy and is recognised in the industry for pioneering the ‘combi’ boiler 35 years ago.

Richard Sainsbury Industrial Engineering Manager, Vaillant UK

www.vaillant.co.uk

A

s one of Europe’s leading heating technology manufacturers, ‘thinking ahead’ is a culture which is embraced throughout the business.

As such, when Vaillant UK, based in Belper, Derbyshire, found itself enjoying rising local customer demand, it looked to find an innovative solution to increasing production without increasing labour costs.

Solution

By introducing automation to the assembly of heat engines and palletising of Vaillant boilers, Vaillant UK r ealised that it could make significant production improvements.

A Kuka palletising robot solution would reduce the need for manual intervention in the manufacturing process and increase both the efficiency and capacity of the manufacturing track.

For the heat engine cell, the need to pick, place and secure rapidly was essential to Vaillant UK to keep up with the requirement of the track. The demand was a maximum cycle time of 45 seconds between assemblies.

For the palletising cell, Vaillant UK had to manage the need to pick and gently place the finished products in different configurations while ensuring no mixing of products on a single pallet. The requirement was to process a minimum of 25 pallets every hour.

With its powerful motors and high performance gear units, and the ability to stack multiple pallets up to great heights with ease, the Kuka KR180-2 palletising solution was chosen for both installations to ensure shorter cycle times and greater productivity.

Results

By removing manual handling from both the front and back end of the manufacturing process, Vaillant were

able to increase the production of its heat engines by more than 20% without the need for more staff.

Richard Sainsbury, industrial engineering manager at Vaillant UK was impressed with the results.

“Looking holistically, the Kuka robots will have paid for themselves within 2.5 years,” he asserts.

Since implementation, Vaillant UK has also seen a significant reduction in operator fatigue with health and safety claims so far eliminated. “This is a huge step forward in terms of meeting our health and safety objectives,” continues Mr Sainsbury.

Why KUKA? A strong recommendation from trusted integrators led to Vaillant UK choosing KUKA Robotics for this project. Since then, key personnel have undertaken KUKA training and KUKA robot solutions are now the standard choice for all future Vaillant UK projects. www.kuka-robotics.com

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 61

Case Study: Rockwell

Manufacturing Technologies

Singleton Birch A single-point information system for factory and automated processes has cut emergency call outs at Singleton Birch by 95%.

L

incolnshire-based Singleton Birch supplies lime products to the steel, chemical processing, waste and building materials sectors among others. Key products include: quicklime, hydrated lime, natural hydraulic lime, graded chalk, aggregates and other specialist products and services.

The company is 200 years old and experiencing a period of outstanding growth with turnover doubling in 2012 and on a similar trajectory of 2013. But this success has not been achieved without challenges.

Singleton’s quarries are very large, and the size of its Melton Ross site, alongside scale of production potentially make control, data logging, asset management and the implementation of disaster recovery procedures unmanageable.

Before its meeting with Rockwell Automation and implementation partner InControl Systems, Singleton Birch certainly found that this was the case and inefficiencies and quality issues were creeping into operations due to a fragmented technology infrastructure which was not properly secured and which did not support remote access or

centralised data backup. A major issue was an escalating number of emergency call outs to fix equipment faults.

In an attempt to resolve these issues Singleton Birch called on Rockwell Automation and InControl Systems to develop a new site-wide infrastructure which could securely and centrally manage factory and automation processes.

Ken Hebdon, electrical engineer, maintenance and Projects, at Singleton Birch explains “I wanted a network that would let me talk to all the controllers and associated hardware from my computer in the engineering block; and I wanted to make this information available to all the electrical and mechanical engineers on site.”

To achieve this goal, InControl Systems set about establishing a foundation Ethernet network which pulled together all of the existing SLC, PLC and SCADA technology on site.

From a software perspective InControl Systems recommended the installation of FactoryTalk AssetCenter from Rockwell Automation. This software provides asset-centric tools to give the control and management that Singleton Birch was seeking. The technology secures access to control systems and tracks user actions, managing asset configuration files, configuring process instruments and providing backup and recovery of operating asset configurations.

Mr Hebdon is pleased with the results of the technology infrastructure change.

“Using FactoryTalk AssetCenter I can access the network remotely and issues or required code changes are resolved much quicker,” he says.

62 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

“We also have a total audit trail now, which documents the date, the time and the person making the changes – all overseen by a permissions-based system, which I have control over.”

Singleton Birch also has a backup facility, which allows it to backup all the PAC and SLC PLC code automatically.

“The solution was up and running very quickly,” Hebdon elaborates, “and disaster recovery is now a lot easier.”

What was implemented?

A Rockwell Automation solution was installed, which included: Allen-Bradley MicroLogix PACs Allen-Bradley ControlLogix PACs Allen-Bradley FactoryTalkn AssetCenter

What were the benefits?

Callout hours reduced by 95% Problem resolution time reduce by 85% Greater visibility of all automation assets Single-point, on-site/remote access to information Comprehensive back-up solution and disaster recovery plan Greater plant availability Greater quality control due to less, unsanctioned operator intervention For more information, contact www.singletonbirch.co.uk

Case Study: Innomech

MANUFACTURING TECHNOLOGIES

To validate a special purpose machine, every aspect of its functional requirements must be traceable to tests carried out on the built machine

Validating automation Peter Woods, head of medical device manufacturing, GB Innomech discusses the challenges involved in designing flexible automation for medical device and regulated production environments.

I

t is not uncommon to specify and supply special purpose automation for assembly or testing of a new product line while the design of the new product itself is still evolving. The challenge for the automation provider is to provide flexibility in machine setup while still enabling the required control of process when the finalised product is in production.

The ability to fine tune manufacturing processes is vital to maintain consistent quality while achieving best possible yield, but in the manufacture of medical devices the possible impact on human health of a faulty assembly means that almost every step on assembly and testing must be shown to be operating

Machine validation is a far from trivial task, but one that can be significantly simplified if validation is anticipated in the design of the automation

need to be established using specially prepared set of examples of the product, including examples spanning the range of acceptable variation as well as samples outside the acceptable range.

At the start of the project though, there are no production samples, and truly representative examples might only be available once the production line is constructed and capable of producing them.

Let’s use this example to illustrate four possible pitfalls that can result:

1

correctly within a well-defined range of process parameters.

The exercise to formally document that the machine, as well as the overall manufacturing process, achieves this is at the heart of the validation process which applies in these industries.

Machine validation is a far from trivial task, but one that can be significantly simplified if validation is anticipated in the design of the automation. The techniques that can solve these issues in regulated production environments can also be helpful in other industry sectors.

Anticipating product design

To validate a special purpose machine, every aspect of its functional requirements must be traceable to tests carried out on the built machine, with clear and objective criteria laid out for passing each test.

For example, an end of line test function to prove the correct assembly and operation of a probe used in keyhole surgery may incorporate sensors to measure the force the surgeon needs to apply to operate a slide valve.

The validity of the measurement will

The acceptable range of a test will be different to the range specified when the testing system is first specified.

2

Implementing ‘lockdown’ to prevent unauthorised changing of system parameters and operation of a machine function will interfere with testing to show the function itself is operating as intended.

3

The output from an externally calibrated sensor, once integrated into the machine control system, may require a secondary calibration of the machine as a whole.

4

The manufacturer’s abstract requirement for a machine function might only become crystal clear when the machine itself has been designed. www.innomech.co.uk FURTHER INFORMATION: For examples of these pitfalls and suggested ways to avoid or overcome them go to bit.ly/ InnomechAAB for a longer version of this article.

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 63

Keep your composure

Justyna Rybicka and Professor Ashutosh Tiwari of Cranfield University describe the emerging understanding of approaches to composites recycling.

C

omposite materials, mainly glass and carbon fibre, have become dominant in the landscape of many industries due to their impressive functionality.

But this dominance has not reached a peak.

A recent Earnest and Young report estimates that production of composite materials is likely to double globally by 2020 in response to increasing demand in existing and new applications.

This creates waste management challenges, as the degradation process for composites is a relatively nascent area of understanding and, until recently composites scrap has simply been sent to landfill in the absence of any real knowledge about other potential ways of dealing with it, or infrastructure for doing so.

But now pressure from sustainability conscious governments is forcing more investigation into the disposal and potential recycling of composites waste.

Sending scrap to landfill is expensive due to increasing burdens of regulation and taxation and increasing volumes of composites scrap mean it is becoming a painful disposal option for many.

In parallel with these trends, other options for composites recycling, which were either not known about or were unviable due to cost-volume ratios in the past, are becoming feasible.

Understanding recycling options available today and the types of waste management options allow industry to identify opportunities for viable long term composite scrap waste management solutions.

Research conducted at Cranfield University as a part of EPSRC funded EXHUME programme is concerned with landscaping recycling technologies to developing composites recycling opportunities.

64 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

The project, which stands for Efficient X-sector use of heterogeneous materials in manufacturing, attempts to contextualise composites recycling options in a range of legislative and compliance environments. The result has been the creation of a Waste Management Hierarchy which can help manufacturers using composites to understand which waste management strategy might be most appropriate to their business.

This hierarchy is relevant to the the EU Waste Framework Directive which defines different types of waste processing and grades their desirability from a legislative perspective.

It outlines five broad waste management strategies. In order of ‘desirability’ these are: Prevention Reuse Recycling Recovery and disposal Landfilling is currently most practiced waste management method and falls under the ‘disposal’ category.

Incineration is a ‘recovery’ option as it allows materials to be burnt for energy. However, it has been identified that incineration as an alternative to landfill can be unattractive since composites carry a much higher incineration cost than general waste.

Keep your composure

It costs £150 per tonne to incinerate composites compared to £30 per tonne for general waste.

‘Recycling’ strategies are represented by the following waste processing technologies: solvolysis, microwave heating, pyrolysis, mechanical grinding, fluidised bed.

Those processes focus mainly on fibre separation and preparation for reuse, mostly as a lower quality material.

‘Reuse’ strategies focus on options which require change to the manufacturing processes or supply chain. Reuse strategies tend to be quite bespoke to individual production lines.

Finally, ‘prevention’ as a strategy involves looking at a whole system approach to minimise the creation of composite waste in the first place.

From technology development perspective the area of ‘recycling’ and ‘recovery’ offers greatest immediate scope for the trialling and testing of new technologies.

‘Prevention’ and ‘reuse’ activities are linked to the creation of large scale systems or services.

Establishing an informed overview of the options for recycling composites waste is essential for any manufacturer using these advanced materials which are so essential to the future competitiveness of many products and industries.

Manufacturing Technologies

Next steps

This is the frontline research informing the EXHUME project and its industrial partners about the recycling options in existence and their relevance to the industry choices in the recycling of composites.

There will however, be follow-up work and this will focus on development of novel technologies for cross-sector use of heterogeneous scrap material in manufacturing.

This will require understanding of microstructure-properties in scrap materials and their relationship to manufacture. The follow-up work will also define and optimise the energy, water and material footprints of adapted manufacturing and waste management processes and model resource flows across sectors.

This piece of research is vital for identification of opportunities for innovation in composites recycling on the wider scale. It will facilitate recycling of composites and the development of commercial offerings for recovering resources from composites waste. It will also identify new markets for recycled composites.

Some organisations are already taking advantage of this opportunity.

Filon UK successfully developed a process for recycling glass fiber used

Prevention (A)

A

Resource Efficiency

Fluidised Bed

Prevention (B)

B

Production re-design

Supply Chain re-design

Fluidised Bed

Prevention (C) C Prevention (D) D

Pyrolysis

Mechanical Grinding

Microwave Heating

Solvolysis

Incineration

Figure1. Composite recycling options allocated on the Waste Management Hierarchy framework.

There will however be follow-up work and this will focus on development of novel technologies for cross-sector use of heterogeneous scrap material in manufacturing Funding for composites recycling projects

The Composites Strategy 2009, led by BIS, established an initiative to grow the composites industry in the UK, including recycling efforts.

Several government funding opportunities for research and development in composites recycling have been made available to industry and academia via this strategy.

For example, Supply Chain Innovation for Circular Economy, run by the Technology Strategy Board, is an initiative which invests up to £5m in projects that aim to preserve the value of materials for longer and cut the general waste stream in half.

Additionally, the Advanced Manufacturing Supply Chain Initiative makes £125m available to improve the global competitiveness of UK advanced manufacturing supply chains by supporting innovative projects. Composites recycling is one of the research areas outlined as desirable for the initiative.

Composites recycling has become an important impact area for industry if it is to support its growing demand for composites use in the face of environmental and legislative changes.

However, it also opens up opportunities for new business via sophisticated composites recycling services.

FURTHER READING

Prevention (C) E

in its manufacturing and is reusing reclaimed materials in its roof products.

Also, PAMELA, a project funded

by Airbus, has looked at methods for reclaiming materials from aircraft at the end of their useful life and reintroducing them into the service of active fleets.

Landfill

The EU Waste Management Directive is available here: bit.lyWasteManagementDirective

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 65

EEF Insights

MANUFACTURING TECHNOLOGIES

The digital switch-on M

anufacturing is in the midst of a digital revolution.

The size and significance of the change has been compared with mechanisation and mass production in previous centuries.

It represents a milestone in the evolution of manufacturing processes and business models.

In recent years, economic conditions have been tough to say the least. But a variety of reports and economic indicators show that growth, rather than cost cutting, is now back on the agenda for many companies – and digital technologies can help.

Barrie Street, customer marketing manager, Canon UK & Europe explains the challenge of the digital revolution Challenges of a digital world for the manufacturing The amount of information that is being generated by manufacturing equipment industry. and by products in service is growing

Manufacturers are finding it increasingly difficult to manage the documents and information that are increasingly important and valuable to the operation of their business

Photography Awards Canon is a lead sponsor of EEF’s annual Photography Awards.

For news of the 2013 winners go to bit.ly/PicturePerfectEEF or see the February issue of .

exponentially as a result of digitisation, sensors and embedded electronics.

This explosion in data inevitably brings new challenges and, it is clear from Canon’s own research as well as recent studies conducted with EEF, that manufacturers are finding it increasingly difficult to manage the documents and information that are increasingly important and valuable to the operation of their business.

Data generated by equipment and products needs to be analysed, ordered and properly managed if it is to be turned into valuable, actionable information by manufacturing businesses.

Yet, generally speaking, the UK manufacturing industry is still largely reliant on paper and, even where data is stored digitally it is large in volume, spans operations and product specifications to supply chain information and is often completely unstructured.

In fact, the research organisation IDC found in its Manufacturing Insights 2013 report that as much as 80% of operational data is not stored in a database as the documents are

66 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

unstructured and complex. Smarter ways of working are desperately needed to address and minimise this complexity.

It is not only damaging inefficiencies that manufacturers need to be wary of.

It is vital that they stay up-to-date and compliant with constantly changing regulations governing the management of information. Any mismanagement can lead to fines or interruptions to their business – such as lost contracts.

Smarter ways of working

Embracing new technologies and smart information management can help the industry address these issues.

Proactive document and information management solutions can transform how information is captured, shared and managed within an organisation.

It saves time – and therefore money – which would otherwise be wasted by inefficient processes. It can ensure that the right information is available to the right people at the right time; optimising production, logistics, supply chains and service processes.

Sharing information speedily around the organisation means that organisations will deliver faster and better informed decision-making. It will also bring manufacturers closer to their customers; enabling them to be more responsive and improving the quality of service that they are able to provide.

While growth in digital technology has the enormous potential to boost integration, interactivity and innovation, organisations need to address the complexity it creates if they are to grow in the competitive global economy.

By boosting customer-centricity and operational effectiveness, smarter ways of working can help to deliver the two greatest priorities for the industry.

Competitiveness and growth will follow, helping manufacturers to propel their business forwards in this digital world.

Engaging and retaining a skill base in UK manufacturing

Workforce Development

25th february 2014 The Waldorf Hilton, London

Arguably employees are the most critical part of any manufacturing company. Attracting, training and retaining the very best talent will ensure you will remain in a competitive position but this can be the most challenging aspect of any business. This one-day conference will explore best practice methods and latest thinking in developing a skilled workforce that can meet the needs of UK manufacturing in 2014 and beyond.

Benefits of attending: Appreciate the range of development strategies and solutions available in order to increase performance in your team Understand how to integrate talent management into your business strategy to maximise output Learn how new technologies will affect your personal development plan Understand the importance of creating a equal opportunities workforce Leadership programmes and the importance of creating in-house programmes

Researched and developed by:

numA limite fund ber of d are ed pla fully to q availabces comualifyin le g See panies we bsit etails e .

for d

www.themanufacturer.com/skills2014 @themanufacturer

#tmSkills2014

Get outside your box

IT IN MANUFACTURING

Get outside your box Exchanging digital transaction data with suppliers and customers has never been more vital. Malcolm Wheatley explores the art of the possible for ERP that extends beyond the four walls of an organisation.

N

eeding to replace its ageing UNIX-based ERP system, Kent-based precision engineer HV Wooding happily upgraded to a newer version of the same solution.

Out went Exel Computer Systems’ 1990s-era ‘green screen’, keyboardoriented EFACS E/3 – which had been implemented in 1994 – and in came a modern, browser-based EFACS E/8.

“Reporting and customisation were the biggest wins with the new system,” says Simon Harre Young, IT manager at the £14 million turnover business. “The old EFACS was ‘as is’, whereas the new EFACS could be quickly and simply adapted to our exact requirements. For us, this meant we could simplify and combine business processes into a single interaction within EFACS E/8.”

For instance, he explains, HV Wooding can now receive sales orders as spreadsheets, with the data being checked and imported directly from the spreadsheet without the need to manually enter anything into the system.

“Each time something like this happens, it saves us time,” says HarreYoung. “We are now looking to add an EFACS E/8 touchscreen terminal in the cab of our forklift, so that the driver can update the system immediately, every time any item is received or issued.”

Deconstructing walls

The standard approach to integration used to be Electronic Data Integration (EDI), but these days companies are doing it more cheaply Andrew Spence, Enterprise Pre-Sales Manager, Oracle

68 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Such small and incremental pieces of integration are re-shaping the way that business operates. That’s because for many manufacturers, it’s the ability to efficiently and effectively collaborate and communicate that delivers superior business performance. Customers, suppliers, partners: in each case, exchanging digital information speeds the transaction flow.

“Integration is seen as increasingly important,” agrees Jonathan Orme, sales operations and marketing manager at Exel. “Good companies are already doing it – and the rest are actively wanting to do it.”

So how exactly are today’s ERP systems responding to this need to reach out beyond the four walls of the enterprise? Which approaches are finding favour – with what benefits? In short, what does the art of the possible look like today – and how might it change tomorrow?

One thing is certain: change is afoot, and businesses today have far more opportunities when it comes to linking their ERP systems with the suppliers and customers beyond their own four walls.

“The standard approach to integration used to be Electronic Data Integration (EDI), but these days companies are

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Get outside your box

doing it more cheaply, using XML (Extensible Markup Language) and web services,” sums up Andrew Spence, enterprise pre-sales manager at Oracle.

“EDI worked well in long-established, static relationships, but was less suited to more fluid situations, especially for smaller businesses,” agrees Malcolm Fox, vice-president of product marketing at Epicor. “And from an integration point of view, the problem isn’t so much outputting an EDI message, as inputting it into your own systems. Companies used to get EDI messages, and then retype them into their systems - and some still do that. The implications for cost, error, and delays are obvious.”

One alternative is to use a dedicated business-to-business integration platform. These provide offer ‘off the shelf’ connectivity, generally via the Cloud, and are readily plug-compatible with the major ERP systems. GXS, GT Nexus, Ariba, E2open – these and others provide easy access to tens of thousands of trading partners, providing

Why can’t MRP be extended from a single plant to a network of plants, connected to suppliers and customers in real-time, using in-memory technology – several times a day, if not continually John Hamman, Industry Value Engineer For Discrete Industries, SAP

IT in Manufacturing

not just ease of transaction, but also ease of sourcing as well, if required.

But of course, those tens of thousands of trading partners might not include all – or any – of a business’s own set of customers and suppliers. And, of course, as with EDI, there’s a cost: a set-up and licensing cost, but also, as with EDI, a per-transaction message cost.

So in industries where larger customers aren’t actually mandating either EDI or one of the major businessto-business integration platforms, businesses have been taking a more flexible approach.

Building bridges

XML and web services, for instance, can be used over a wide range of Internet connections, and generally don’t involve payments to third-parties.

Even better, XML can act as a ‘wrapper’ for a wide range of transaction-related data – including drawings, PDFs, and other documents – and is a relatively easy, low-tech alternative to EDI. And, as at HV Wooding, those documents can include spreadsheets, automatically passed and entered into an ERP system for subsequent action.

‘Portals’, too, have found favour. In effect a transaction website hosted by a company, portals provide another way for suppliers and customers to interact with a manufacturer, says Peter Mrock, European business development director at ECi Solutions, a supplier of ERP solutions for smaller, make-toorder manufacturers.

“We’re finding that customer portals are finding favour, as more manufacturers discover that they offer a low-cost and straightforward way to provide customers with a ‘self service’ capability – which can include on-line product configuration, as well,” he says.

But increasingly, say ERP insiders, such point-to-point integration is giving way to more open and collaborative types of connection. The model behind such an approach is loosely based on social networking – although most vendors, when pressed, concede that the term ‘social networking’ doesn’t quite capture the essence of the idea.

“Why can’t a supplier ‘follow’ anything that’s relevant to them in their customer’s organisation? Why can’t a customer ‘follow’ anything that’s relevant to them in a supplier? For example,

The future is about taking information from people, applications, machines, data repositories and document repositories, bringing it all together, and making it available to whoever needs it – wherever they are Phil Lewis, Business Consulting Director, Infor

their order status, likely completion date, and location once shipped?” asks Phil Lewis, business consulting director at Infor. “The future has to be about taking information from people, applications, machines, data repositories and document repositories, bringing it all together, and making it available to whoever needs it – wherever they are.”

John Hamman, industry value engineer for discrete industries at SAP, agrees, arguing that the era of point-topoint integration is passing fast. Even carrying out MRP as individual companyspecific processes builds walls where there should be bridges, he argues.

“Why can’t MRP be extended from a single plant to a network of plants, connected to suppliers and customers in real-time, using in-memory technology, several times a day, if not continually?” he asks. Internal tests at SAP, he adds, show that the idea is theoretically possible.

In short, the era of EDI isn’t dead yet – but a bold new future certainly beckons.

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 71

Victrex was drawn to Dynamics’ CRM and its integration capability, which offered a system where existing applications such as sales order processing, invoicing, BI and marketing would talk to each other.

Fleming says: “We were essentially looking for something with more functionality. Dynamics was something I was already familiar with so it made sense to look here first, once we did, we never looked back.”

With the new Dynamics CRM solution, Fleming has reduced the resource requirement to 0.5 of a full time head and this is simply to manage new projects.

“Ultimately I’ve been able to shift the focus of my time from being reactive to proactive,” he says.

Rapid deployment

To Victrex, the spoils How Victrex optimised growth opportunities and found saving through adopting CRM with Zero2Ten.

A

gainst a backdrop of economic instability, Victrex a global manufacturer of high performance polyaryletherketone materials, continues to buck the market trend with year on year revenue growth.

But despite this positive performance and outlook, company leaders recently became frustrated at their inability to seize all the growth opportunities they perceived due to a legacy CRM system which could not support real-time account intelligence.

Realising the need to take advantage of revenue opportunities from existing accounts and the surrounding ecosystem, Victrex turned to Microsoft Gold partner Zero2Ten to implement Microsoft Dynamics CRM Online.

Victrex now has an integrated CRM solution that delivers the accurate business and market intelligence needed to accelerate growth.

Out with the old, in with the new

As is common with many CRM implementations, Victrex’s growth and business evolution outstripped the functionality of the existing Saratoga CRM. It was no longer providing the value the company needed.

“We evaluated the current CRM system, it was pretty old and heavily reliant on IT to keep it breathing and to provide any reasonable source of flexibility.” says James Fleming, group IT director.

Mr Fleming and his team were spending too much time fire fighting and building bespoke reports, in fact, it took 1.5 full time heads just to keep the CRM system working at its existing levels of capability, “We found ourselves having to write functionality that was already standard in Microsoft Dynamics CRM,” Fleming explains.

72 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

With a recognised need and growing appetite for a change, the demand to deploy quickly led to Victrex engaging Microsoft CRM Gold partner Zero2Ten, which has a strong track record in this area.

Victrex met with the Zero2Ten team for an initial scoping exercise. Fleming had found historical engagements with more traditional CRM providers cumbersome and but admits he was refreshed by Zero2Ten’s value-led attitude.

“We liked everything that Zeron2Ten were saying,” recalls Fleming. “They immediately understood our business challenges and the need for a fast turnaround.”

A follow up engagement was arranged where Zero2Ten demonstrated the functionality within the Dynamics CRM solution and went into more depth around its delivery methodology. “Once we knew there was synergy between us, we quickly made the decision to go with Zero2Ten.” says Fleming.

The end result was a project delivered in 12 weeks and delivered to budget.

Greater insight, greater control

Microsoft Dynamics CRM has enhanced Victrex’s ability to take advantage of new business opportunities, ably supported with the tools needed to measure, manage and track all engagement processes. “The insight we’re now able to gather is helping us identify changing mark trends and spot new opportunities,” comments Fleming.

This will prove vital in supporting Victrex’s plans to extend its operation into India, Russia and Brazil.

“The key has been the agility of the project delivery, moving away from a traditional approach and focusing on addressing the real business challenges. Our need was to see benefit straight away, Zero2Ten have helped us achieve that. I would have no hesitation in recommending them,” Fleming concludes.

With a global footprint and highly dispersed workforce, the intelligence that can now be gathered and displayed has enabled the Victrex board to make resource placement decisions based on real, rather than speculated, forecast information.

“For the first time at a board meeting, the Managing Director was able to turn up with sales forecasts that were accurate and a true reflection of what was going on.” Fleming found that the decisions being made during

Zero2Ten

board meetings were now far more relevant; “The insight we’re now able to gather will help us identify changing market trends, spot new opportunities and become more strategic in the placement of resources.”

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IT IN MANUFACTURING

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With the CRM-focused IT headcount that Fleming has been able to free up, Victrex has been able to save £35,000 per year in resource alone. Fleming says: “Over time it’s certainly going to further release the resource requirement on IT and allow people to become much more autonomous with the way they consume information.”

Companywide adoption

Gaining large scale adoption was essential if the CRM was going to become a valid tool for supporting the key business drivers and Fleming says he is pleased with the way Zero2Ten has helped it manage internal adoption.

This hurdle is eased by the fact that Dynamics CRM’s integration with Outlook means Victrex’s staff can use CRM straight from email, rather than a separate system. Calendar and contact management is simplified via sync functionality.

One of the key requirements for Victrex was to ensure that the internal team were sufficiently skilled on the solution so as to be able to manage it themselves once the project had finished and Fleming confidently states that: “Zero2Ten are very much about making sure we are as self-sufficient as we can be. They spent the time training up our guys to ensure there was a very smooth hand-over.”

Leverage the Microsoft platform with:

About Victrex Victrex is a leading manufacturer of high performance polyaryletherketone materials comprising:

WHY ZERO2TEN? 100+ manufacturing customers

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To find out more about how Zero2Ten can help you build your business, email Adam.Spurr@zero2ten.com or, better still, call us now on 0203 608 1445

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 73

The perfect host At Norland Managed Services, a leap in growth has been supported by enterprise system management and a model outsourcing partner. Malcolm Wheatley finds out more.

W

hen facilities maintenance and support services provider Norland Managed Services took the decision to move to a Microsoft Dynamics AX ERP system in 2005, IT director Barry Robinson knew he needed to add both manpower and specific extra skills to his team. ​Just as clearly, he needed a hosting solution for the AX system. This solution would need to offer an advanced IT infrastructure that could be supported 24/7 without becoming a burden on the busy company. Mr Robinson needed to be able to assure both board members and the wider business of system availability in excess of 99.95%.

My team see Insite as a natural extension of our internal network of skills Barry Robinson, IT Director, Norland Managed Services

“​ The scale of the implementation was more than we could handle internally, both initially and in terms of on going support,” explains Robinson. ​The Microsoft Dynamics AX system would be the enabler for Norland to deliver the exceptional levels of service that have seen the company achieve one of the highest customer retention rates in the facilities management sector.​ ​But piecing together the very specific infrastructure and skill sets required for the project presented a major challenge. A challenge that Robinson knew was too big and too complex for his internal IT resources.​ ​“We had no Microsoft SQL Server skills in house, but for the AX implementation we needed an SQL Server expert for around one day a week,” continues Robinson. ​​“Similarly we needed terminal server expertise, but again only for a few hours a week. It simply wasn’t going to be practical to employ part time people with this level of expertise.

What we needed was a packaged external solution that delivered all of the elements in a very flexible and cost effective way.”

74 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

​Specialist expertise

​​ Fortunately, the Microsoft partner Robinson had brought in to design and implement Norland’s Dynamics AX system introduced Insite at the outset of the system planning process.​ ​A specialist in hosting and managing business critical applications – with a particular emphasis on Microsoft applications and technologies – Insite takes responsibility for supporting its clients’ business applications, giving them the peace of mind and the breathing space they need to focus on developing competitive advantage and growing their businesses.​ ​“It was clear that Insite had the specialist Microsoft platform and hosting skills we needed – and they were flexible too,” says Robinson. “I really did get the

Outsourcing

feeling that, individually and collectively, they could work as an integral part of our team.”​ ​Insite also had its own Tier 3 datacentre in the UK, and a wellproven Dynamics AX hosting and managed services solution delivered via that infrastructure.​ ​Robinson didn’t need to look any further. A simple cost benefit analysis and common sense convinced him that Insite was the ideal partner to de-risk both the initial deployment of Dynamics AX, and to ensure high availability of the system when it went live, and in the months and years ahead.​ ​That logical conclusion was backed up by a strong gut feel that this was the right solution: “There was an immediate synergy between our team and Insite’s people,” Robinson recalls.​

Trusted partner​

​ o did Insite deliver all that they S promised, and how has the relationship developed over the past seven years?​ ​“Insite has delivered everything we envisaged, and more,” confirms Robinson, simply. ​​“On the AX system hosting and managed services side, Insite delivers a full solution that means the Dynamics AX applications are always available and constantly monitored. Internally we have an IT staff of six supporting 3,000 users – so we simply couldn’t deliver the service levels we achieve without Insite.” ​​What’s more, he stresses, Norland views Insite as much more than just a hosting company. ​​“Insite is a true partner, delivering a complete managed solution that meets our enterprise needs,” he says. “We trust Insite implicitly to just get on with it, which frees up our internal team to provide other support for our users.” ​​This confidence in Insite’s capability to maintain AX system uptime under a strict Service Level Agreement has resulted in Norland turning to Insite to deliver other equally critical services. ​​“Insite now hosts and manages all of our business critical enterprise systems,” explains Robinson. “Many are web based, and all are global operational systems which enable us to meet and exceed our customers’ expectations and deliver the highest levels of service and efficiency.” ​​As well as hosting and managing all of Norland’s enterprise systems,

IT in Manufacturing

Insite looks after business continuity services. “That underlines how much we value and trust Insite’s expertise and responsiveness,” says Robinson. ​​“When we began working with Insite our turnover was £60m, now it’s £384m. That year on year growth is down to the quality and reliability of our people and our enterprise systems,” he continues. ​​“Insite also provides much valued input to innovation and strategy. I can call them any time and they also attend our internal planning meetings.” ​

Responsive

​​ Then there are more informal but no less valuable benefits that flow from the relationship. ​​“My team see Insite as a natural extension of our internal network of skills,” says Robinson. “In fact, they regularly talk to the Insite team on IT matters outside of the business agreement. ​​“For example, we were putting in Microsoft Exchange Server 2010 and our guys wanted to know what to look out for, so they called Insite. This happens all the time, it’s a kind of technical guru forum with information and expertise sharing between two teams working as one. It’s very much a business relationship built on one to one people relationships, which works very well for us.” ​​​The relationship also gives Norland a virtual direct line to expertise within Microsoft itself. As a Gold Partner, Insite can talk to the right technical specialist at Microsoft, for any given issue, on Norland’s behalf. ​​Ultimately, in Robinson’s view, this complete yet flexible package of Insite services and personal service translates into a powerful business advantage for Norland. ​​“We can be responsive to our customers because Insite is very responsive to our business needs,” he says. “I have a critical responsibility to my customers and I know I can rely on Insite to help me deliver. It’s a huge comfort factor.” ​​In fact, a Norland customer recently faced a similar enterprise systems deployment, hosting and support challenge. ​​“I had complete confidence in recommending Insite,” concludes Robinson.

When we began working with Insite our turnover was £60m, now it’s £384m. That year on year growth is down to the quality and reliability of our people and our enterprise systems Barry Robinson, IT Director, Norland Managed Services

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 75

AX-Men Origin Malcolm Wheatley follows the evolution of the ERP backbone at agribusiness manufacturer Origin Enterprises as it responds to the company’s growth.

I

n 2012, Origin Enterprises scooped the ICT in Manufacturing Award at The Manufacturer of the Year Awards.

Why? Quite simply, says chief information officer Derek Wilson, the judging panel had been impressed by Origin’s use of Microsoft Dynamics AX together with a number of associated ‘best of breed’ systems, which combined to help the group build an ERP platform that had delivered standardised processes, reduced costs, and higher efficiencies – all of which resulted in an impressive return on investment.

In the beginning

Yet when Wilson arrived at Origin at the end of 2007, as the company’s first-ever chief information officer, such ambitions lay a long way off.

“It was very much part of my brief to find replacements for a number of systems that had served the business very well for many years, but which were no longer cutting-edge,” he recalls. “It had become very clear that we weren’t capitalising on what new technology could offer – either to us, or to our customers.”

In particular, explains Wilson, the business lacked a formal ERP system, relying on standalone ‘best of breed’ applications chosen for their fit with Origin’s needs at the time, and which had interfaces built between them.

“Finances were on one application, stock control on another, and sales order processing on another,” he says. “And in addition, we had two custom-built applications to handle the specific needs of our manufacturing process: a ‘least cost formulation’ calculator to develop formulae for particular fertiliser or feed requirements, and a distribution application to handle our transport and despatch requirements.”

Adapting to environments

What’s more, the disparate parts of Origin had very different requirements.

As a focused agri services group, Origin’s mission is the provision of sustainable and profitable food production solutions for primary producers such as farmers. This includes: fertilisers, seeds, fungicides, herbicides and advice. But the company also has interests in food and animal feed – and a reach that embraces Ireland, the United Kingdom, Poland and Ukraine.

76 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

d of r o c Re llence s Exce es wa

in erpris n Ent f ’s ICT 2012 i g i r O ner o d r a win turing Aw d for the fac tliste Manuwas shor in 2013. d and awar same

Consequently, it was decided in February 2010 that all the requirements of the various Origin businesses could be met by Microsoft Dynamics AX. What’s more, of the competing implementation partners that Wilson had been speaking to, Columbus stood out as by far the best fit for Origin’s needs.

It had become very clear that we weren’t capitalising on what new technology could offer Derek Wilson

Columbus

“Columbus combined an in-depth knowledge of manufacturing with a corporate culture that we really bought into,” explained Wilson at the time. “The Columbus people know what they’re talking about, they work as a team, and they are confident and self-assured – because they’ve done it before, and can be upfront and honest about what will and won’t work.”

Accordingly, a number of Origin businesses went live on Dynamics AX during 2011: first, Hertfordshireheadquartered Origin Fertilisers UK, together with P.B. Kent, a specialist fertiliser products firm also based in the UK; and then the company’s Masstock operation and its Goulding Chemicals subsidiary in Ireland, which both went live in November of that year.

a national distribution and warehousing operation,” he explains. “What’s more, UAP also had its own set of business processes. So in merging the combined businesses into a single entity – to be called Agrii – we wanted best-in-class processes, based on the best from each business.”

Evolution

Accordingly, Origin acquired Manhattan Associates’ SCALE warehouse management system and integrated it with Dynamics AX. Similarly, a software application from Paragon Software Systems was also integrated with Dynamics AX. The combined rollout went live in November 2012.

But meanwhile, Origin had acquired another business – United Agri Products (UAP) – and had decided to merge it with Masstock. And this generated a fresh set of requirements, says Wilson.

“UAP had a customer service centre, which we needed to support, and also

IT in Manufacturing

The Columbus people know what they’re talking about, they work as a team, and they are confident and self-assured

Next on the agenda: Business Intelligence. And again, says Wilson, a decision to go for what was absolutely right for the business had raised the bar in terms of the challenge that needed to be met.

“As implemented, we had included additional fields in our Dynamics AX SQL Server database, and both Columbus and ourselves judged that the analytics ‘cubes’ supplied with Dynamics AX 2009 could be improved on in terms of taking advantage of these new fields,” explains Wilson.

The solution: TimeXtender, an ‘extract, transfer and load’ (ETL) utility; and Targit, a specialist Business Intelligence reporting and dashboarding tool. Both products were recommended by, and bought from, Columbus.

Combined with Microsoft’s own SQL Server Reporting Services utility (delivered as part of Dynamics AX), these then provided the required sales and margin reporting capabilities, says Wilson.

Subsequently, the same reporting and analytics capabilities were extended to finance, purchasing, and inventory management, he adds.

In all, sums up Wilson, the ERP-based IT DNA at Origin has transformed in a little over three years, delivering a rich set of capabilities- from route planning to analytics – that perfectly complement the core Microsoft Dynamics AX solution.

Furthermore, the business isn’t standing still now, he stresses. A web-based ordering solution is being rolled-out to the company’s field-based agronomists, extending origin’s ERP solution, literally, to the fields of its farming customers.

December/January 2013/14 | Issue 10 | Volume 16 | www.themanufacturer.com 77

Customer Relationship Management

IT IN MANUFACTURING

new ground C

ustomer Relationship Management (CRM) has come a long way. In a few short years, it has revolutionised how many businesses approach their markets.

And it’s not just all about selling more product, either. As consumers, most of us have benefitted because, in being better at building relationships with consumers, organisations have become more skilled at understanding us as individuals, and tracking our changing needs and wants.

But if CRM has clearly benefitted some businesses – and their customers – it hasn’t benefitted every business.

And the gap is easily identified. Quite simply, business-to-business (B2B) CRM is often regarded as something of a No Man’s Land. Go there at your peril and with minimal guidance.

In part, that’s understandable.

Building and nurturing a relationship with a living, breathing human being in the shape of a consumer is one thing. Attempting to do the same with a business is quite another, especially when the individuals involved can move to other roles and responsibilities.

But that doesn’t mean that B2B CRM isn’t a goal worth striving for. Because if business-to-consumer companies and their customers are able to jointly benefit from CRM, those same benefits are surely desirable in B2B sales relationships.

The question is, how to work towards better B2B CRM? And on November 13th 2013, at the Churchill War Rooms where Winston Churchill guided the nation through some of its darkest hours, a small group of B2B businesses – manufacturers, distributors and service providers – sat down to debate the issues surrounding best practice in B2B CRM. Sponsored by four complementary organisations, each focused on a different aspect of B2B engagement - CRM consultants Customer Attuned and Deep Insight, training provider Star Commercial Academy, and Microsoft Dynamics CRM implementation experts eBECS – the event saw just under 50 delegates spend a day listening to presentations, networking, and debating how best to extend CRM into B2B business relationships.

78 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

Business-to-business CRM can be challenging. In the setting of the Churchill War Rooms, businesses debated how to overcome those challenges.

Malcolm Wheatley sums up the day.

Two presentations in particular stood out. Mark Williams, head of IT at Pegler Yorkshire, the Yorkshire-based manufacturer of high quality, commercial and residential, plumbing and heating products, provided much food for thought. Is B2B CRM possible? Does it deliver significant benefits to both business and customer? And can B2B CRM also deliver revenue-boosting Sheila Case, customer service manager at Talley Group. “A great opportunity, and a very interesting and informative day,” added Angela Marshall, sales and customer support manager at De La Rue.

Missed out?

If you’re feeling frustrated that you missed out on the insight and thought leadership on tap at this event, fear not. A follow-up event will be hosted at Lord’s Cricket Ground on February 11th 2014.

To find about more about both events and B2B CRM from Microsoft Dynamics, contact Stephen Wilson, marketing director at eBECSs at swilson@ebecs,com.

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, 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

Trade and Investment

LAST WORD

The success of the London Olympic Games has led to hosting nations turning to the UK to help deliver their own events with supply opportunities running into the billions

Get the balls rolling Manufacturers need to man-up to the export challenge says Will Stirling.

R

un by UK Trade & Investment, Export Week was a nationwide series of events from November 11-15 designed to inspire and assist more companies to export.

Paul Noon OBE, director of UK Trade & Investment West Midlands, was bullish following Export Week. The West Midlands’ event franchise was a success: 50 events took place across the region with 1,250 West Midlands firms attending. 350 firms went to ExportExplore, a one-day event to match

Many companies say they want to export but lack the balls to try it

firms to commercial trade specialists from 65 countries.

A few themes emerged from Export Week in the West Midlands, a region that is riding on an export wave according to figures from the ONS. “There’s huge interest from West Midlands companies in opportunities arising from…. major sporting events and infrastructure projects in places like Brazil and Qatar,” said Mr Noon.

The success of the London Olympic Games, says Mr Noon, “has led to hosting nations turning to the UK to help deliver their own events with supply opportunities running into the billions.”

But despite all this effort, Britain is off course to hit Chancellor George Osborne’s ambitious export target of £1 trillion in goods and services by 2020 (p18). Think tank Reform said in its November report Delivering the UK’s export ambition that exports in 2013 are expected to come in at just above £500bn and are growing at just 5% a year. The £1 trillion target would need a compound annual growth rate of 9%.

The Government also wants to increase the number of exporting firms by 100,000 and to raise the number of

80 www.themanufacturer.com | December/January 2013/14 | Issue 10| Volume 16

SMEs exporting from the current level of one in five to the European average of one in four, by 2020.

UKTI will say the global economy is partly to blame for slow movement on these targets - and it’s got a point. The current economic rally is a recent thing.

But some, both in or out of UKTI, will whisper there is a lack of ambition from the private sector to export. Think tank Reform pointed this out in its study, supported by Barclays, saying the private sector is not ambitious enough to reach this target. Frankly, in not so many words, they identify that many companies say they want to export but lack the balls to try it.

Why is there still such a general inertia on exports?

Reform’s Lauren Thorpe, the report’s co-author, points to several issues, the chief one being the need for a more joined-up approach in government (déjà vu?).

Reform devised a flow chart that illustrates the programmes of nine government departments and agencies being run concurrently, often in parallel or with contradictory aims. The Department for Education, for example, wants science undergrads from foreign countries but the Home Office wants to cut immigration.

Reform also concludes that Britain needs to secure stronger free trade agreements. It points out that, while the Government has identified 18 ‘emerging markets’ to target for exports, only four of its 18 special trade envoys are deployed there – 14 work with countries who are not on the ‘hot’ list.

It’s easy to sit back and pick holes in government efforts to boost business and trade. Credit to UKTI for its activity, but what Reform calls a “step change” in approach needs to happen urgently if Britain is to come anywhere near achieving its national export challenge.

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