The Manufacturer December 2012

www.themanufacturer.com December 2012/January 2013 Vol 15 Issue 11

www.themanufacturer.com | December 2012/January 2013 | Vol 15 Issue 11

NEW THIS ISSUE: On the road again

Follow ’s editorial team as they visit factories, industry conferences, debates and political events around the UK and further afield

Manufacturing Leadership

Masterful: Cranfield University celebrates ten years for its Operations Excellence MSc Demand and Supply: Airbus works with suppliers to increase capacity Steel yourself for change: Scrap metal trading laws overhauled

Workforce and Skills

It’s good to share: Employers don’t have to go it alone in apprenticeship provision

We are the

champions

Supply Chain and Logistics

Chain reaction: DHL’s role as a catalyst for supply chain management improvement

Award winners show what the UK is made of

IT in Manufacturing

Missing link: The bankable benefits of workforce management systems

Interview Sir Anthony Bamford Chairman and owner, JCB

Factory of the Month The Royal Mint

nt Eve iews! two to v Pre eks ins in the e t p n ve ak Sne iting ew Year y: exc Ne tor

c K e Faate U r u Fut utom D A AN 013 X2 IMH

In partnership with:

Delighted. Proud. Ready to use our Manufacturing expertise to help you achieve more.

Having won this award for the second time in three years, we’re naturally delighted and proud.

We’re also very grateful to our clients, partners and staff for making it possible. Indeed, what gives us greatest satisfaction is that the award criteria recognised the powerful combination of eBECS’ business acumen, technological expertise and the very positive feedback from our clients.

As specialists in Manufacturing, our aim is always to delight clients by implementing proven Microsoft Dynamics® AX and Microsoft Dynamics® CRM solutions that drive efficiency, profit and growth. This award inspires us to achieve even more on behalf of existing and new eBECS’ clients. Thank you.

If you’d like to achieve more with Microsoft Dynamics AX and Microsoft Dynamics CRM, let’s talk. Call Stephen Wilson on 08455 441 441 or email swilson@ebecs.com

eBECS Limited, Enterprise House, Bridge Business Centre, Beresford Way, Chesterfield, Derbyshire S41 9FG Tel: 08455 441 441 Fax: 08455 441 728 Email: info@ebecs.com www.ebecs.com

Offices in: United Kingdom | North America | Kingdom of Saudi Arabia | Jordan | China

Editor’s comment

The new world order Firstly, bags of congratulations to all the winners and shortlisted companies who revelled with us on November 21 at The Manufacturer of the Year Awards 2012 (p26).

Well done everyone!

Our awards broke records for entries and attendance. Comments emphasised just how much talented manufacturing professionals enjoyed the opportunity to recognise their prowess – but also showed that sponsors and guests from organisations that support and service the manufacturing industry felt privileged to observe your enthusiasm and passion for your achievements.

But while we celebrated, the world did not stand still.

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Our awards ceremony was preceded by ’s annual conference, MDC2012 (p20). Presentations here made very clear that after a year of ups and downs in 2012 (p92), the road ahead will require even greater intelligence in strategy, from both companies and government.

Noticeably in the two weeks before this issue went to press, industry commentators emphasised that evolving strategies must include a rethink of the way the UK interacts with Europe and the way that Europe collaborates as a competitive bloc in the global marketplace.

Lord Digby Jones at ’s Awards, president of SMMT Nigel Stein at the motor trade association’s annual dinner and Lord Oxborough, president of the Institute of Measurement and Control, at a debate in the House of Commons over the future of the UK’s National Measurement System. They have all recently urged industry and government to push for more influence in Brussels and across Europe in order to redefine the Union’s competitive profile.

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They highlight a need to balance the declining economic clout of Europe against the need to compete with and benefit from aggressively expanding economies in a new world order.

www.themanufac turer.com Decemb er 2012/Ja nuary 2013

www.thema nufacturer.c om | December

2012/Janu ary 2013 |

Vol 15 Issue

Vol 15 Issue 11

NEW THIS ISSUE: On the road

again Follow ’s visit facto editorial team as ries, indus they debates and politic try conferences, al events UK and furthe around the r afield

Manufac Masterful: turing Leadersh Cranfield ip celeb Unive

rates rsity Excellence ten years for its Oper ations Demand MSc and Supp with supp ly: Airbus liers works Steel yours to increase capa city metal tradin elf for change: Scrap g laws

overhauled Workforce and Skills It’s

good to have to go share: Employers it alone in don’t apprentices provision hip

Supply Cha in and

Chain react Logistics catalyst for ion: DHL’s role as improveme supply chain mana a gement nt

W

chae arme thpeion s

IT in Man

Missing ufacturing link: The bank workforce manageme able benefits of nt systems

Interview Sir Anthony

Bam Chairman and owne ford r, JCB

Factory of the

The Royal

Mint

Month

Award win show wh ners UK is ma at the de of

EvEnt ! ws PrEviEks into two pee in the sneak events r Yea exciting new ory:

Fact uK Future mate auto D An 2013 ImHX

In partne rship with:

Cover image: For a wrap-up of ’s annual conference and awards go to p20.

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Michael Fallon, the new Business Minister, assured delegates at MDC2012 that government is working to align different departments so that there is a commonly agreed and expressed route to growth for the UK, with manufacturing front and centre. And we have the consensus of all political parties in the UK on this key point – witness the letter from the All Party Parliamentary Committee to the Chancellor in the run up to the Autumn Statement (p5).

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Good news, but as we work domestically on making industrial strategy and industrial networks more joined up – and there is a lot of work to be done – we must not forget how closely we are tied to Europe and how her fate influences ours.

If supporters of manufacturing want a challenge in 2013 it should be this. Forget inventing new initiatives and concentrate on making what we have work in a co-ordinated and collaborative way – both at home and abroad.

Season’s best to you all!

Jane Gray, Editor

62 1

The team Editorial

Nick Hussey, Managing Director

IT Editor Malcolm Wheatley

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. He holds several non-executive directorships and is a founder member of the IET’s Manufacturing Policy Panel. n.hussey@sayonemedia.com

malcolm@malcolmwheatley.co.uk

Associate Editor Roberto Priolo

r.priolo@sayonemedia.com

Reporters George Archer

g.archer@sayonemedia.com

Tom Moore

t.moore@sayonemedia.com

Design

Art Director Martin Mitchell

m.mitchell@sayonemedia.com

Henry Anson, Sales Director

Designers Alex Cole Vicky Carlin Nick Bond

Henry is a shareholder in SayOne Media and is responsible for the company’s commercial activities, developing new concepts and products for ’s readership. Henry is keen to build a bridge between the manufacturing community and the services sector which supports them.

design@sayonemedia.com

Sales and Events Head of Events Jon Tudor

h.anson@sayonemedia.com

j.tudor@sayonemedia.com

Subscriptions Manager Grace Gilling g.gilling@sayonemedia.com

Will Stirling, Editorial Director

Project Director Matt Chilton

Will edited for two and a half years and now is working to expand the SayOne Media publishing portfolio. He is responsible for the launch of new reports and special and for the maintenance of editorial supplements for standards across SayOne Media publications. Before joining SayOne Media, Will worked for Euromoney and IPC Media.

m.chilton@sayonemedia.com

Sales Manager Benn Walsh

b.walsh@sayonemedia.com

Sarah Hough

s.hough@sayonemedia.com

Marketing Manager David Farrow

w.stirling@sayonemedia.com

d.farrow@sayonemedia.com

Conference Producer Eva Lindsay

Jane Gray, Editor

e.lindsay@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 Brown, Web Editor 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. His primary areas of interest include the automotive industry and business development. t.brown@sayonemedia.com

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Working together to secure the future of manufacturing.

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ISSN 1477-3201 BPA audit applied for June 2009.

Copyright © SayOne Media 2011.

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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.

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Contents 04 News and regular columns A summary of manufacturing news and events along with commentary on industrial research and policy

18 Lean on me

Lean on me: Roberto Priolo, editor of Lean Management Journal previews key themes and content for 2013

20 Lead

26

MDC2012: Jane Gray reviews findings and opinion from ’s annual conference and recounts the record breaking celebrations at The Manufacturer of the Year Awards 2012

28 Interview Digging out a trade surplus for UK plc: Sir Anthony Bamford talks to Will Stirling about what the UK needs to learn from Germany, JCB’s success in India and his pride in The JCB Academy

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34 60 Second Interview Dick Elsy, CEO, High Value Manufacturing Catapult

Pillar features 35 Manufacturing Leadership

Masterful: Ten years of transforming careers and businesses for Cranfield University’s Operations Excellence MSc

36 Demand and Supply: Airbus COO G nter Butschek explains how the Aerospace giant is working with suppliers to increase technical capacity and meet growing demand

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46 Workforce and skills

It’s good to share: Jane Gray discovers how textile manufacturer Fox Brothers and its key customer Jack Wills shared responsibility for the development and support of a bespoke apprenticeship scheme

46 Employee of the month: Josh Brough, production engineer, Siemens Industry 58 Manufacturing technologies Event Preview – Future Factory: Automate UK: Including insight into the automation strategy and technology at plastics re-processing company, EcoPlastics

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62 Supply Chain and Logistics

Chain reaction: Cross sector experience and international reach have made DHL a knowledge hub and a catalyst for boosting manufacturing performance through innovation in supply chain management

65 Event Preview – IMHX 2013: Revealing the attractions planned at Britain’s premier intra-logistics and materials handling exhibition

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68 IT in manufacturing

Missing link: Malcolm Wheatley discovers that there is a whole lot more to workforce management systems than tracking time and attendance

72 IT news

Manufacturinginaction Each month conducts interviews and case studies with companies from the whole gamut of UK manufacturing, from large multinationals to niche SMEs across sectors. This month visits:

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78 The Royal Mint 88 Siemens Congleton 92 Last word

Will Stirling’s best bits for UK manufacturing in 2012

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Manufacturing http://bit.ly/TMnewspage

Tractor manufacturer New Holland Agriculture won The Manufacturer of the Year 2012 at a glittering awards ceremony in London on 21 November. Accolade Wines and Milliken Industrials claimed joint runner-up place. See the full wrap up of the The Manufacturer of the Year Awards 2012 on p24.

Colin Larkin and the team from New Holland Agriculture with Lord Digby Jones at The Manufacturer of the Year Awards

APPRENTICESHIPS

AWARDS

The Richard Review of Apprenticeships said that an apprenticeship should last a minimum of one year, it must require doing a real job, and should be funded through tax credits. Authored by businessman and ex-Dragon’s Den investor Doug Richard, the 140-page report criticises the current apprenticeship system for including too many qualifications and says it is often too expensive for colleges to deploy via awarding bodies. Responses to the report have been mixed. It was welcomed by business groups such as EEF (p12) but some in industry are confused as to why it was needed in addition to other similar reviews (p14).

Draeger Safety UK was crowned the Institution of Mechanical Engineers’ overall winner at the MX Awards 2012. Imaging technology company FFEI took the Best Small to Medium Enterprise. Blyth-based Draeger Safety, a wholly owned subsidiary of Drägerwerk AG, also won the award for Financial Management and the Professional Engineering award for Logistics and Operational Efficiency

Lancashire-based aerospace firms which make parts for BAE Systems’ factories at Warton, Samlesbury and Barrow can now send their workers to BAE’s training centre as a part of a new a £2.8m apprenticeship scheme. The plan is part of a new Employer Ownership Pilot scheme funded by the Department for Business, Innovation and Skills and the UK Commission for Employment and Skills.

INVESTMENT The UK Green Investment Bank officially opened for business on November 28. The new financial institution is headquartered in Edinburgh and is funded with £3 billion of government money. It will attract private capital to help fund green economy projects. Its first investment has committed £8 million to a project in the North East of England that will generate energy from waste, and this will be matched with a further £8m from private sector.

WORKFORCE On 15 November The Women’s Network at GE Aviation Wales held its annual conference. For 2012 the event focused on developing for career success. The one day event, Developing Yourself for Success, gave delegates the opportunity to hear from peers within GE, and from external speakers, how they define success and how they have set and achieved their own goals.

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Eight winners received awards for business achievement at the South East EEF Future Manufacturing Awards 2012 ceremony in November, held at Mercedes-Benz World in Weybridge. The annual event hosted by manufacturers’ organisation, EEF, awards British manufacturers for excellence in enterprise, innovation, environmental performance and skills development.

NUCLEAR Hitachi announced completion of its acquisition of Horizon Nuclear Power from RWE npower and E.ON UK. Global technology firm Hitachi now plans to build at least four nuclear power plants in the UK. Following the acquisition, Hitachi owns two sites at Wylfa, Anglesey, and Oldbury, Gloucestershire. Before starting the build Hitachi will need to secure approval from UK regulators for the use of its Advanced Boiling Water Reactor (ABWR) technology.

AUTOMOTIVE The former supplier of steering boxes to London taxi manufacturer Manganese Bronze has agreed to provide new supplies of vital parts to get up to 400 stricken London taxis back on the road. Until four years ago Reading-based Magal Engineering was the main supplier of the steering boxes but the contract was switched to a supplier in China to cut costs.

News THE ENERGY BILL Big, energy intensive companies will avoid paying for the energy levy on the switch to greener energy sources set out in the Energy Bill, which commits £7.6 billion to low carbon energy infrastructure in the UK. The long-awaited Energy Bill is designed to foster energy security at the same time as reducing UK emissions.

But the Bill controversially avoids commitment to a 2030 decarbonisation target. It was feared by industry groups that the Bill might place the burden of cost for the switch to green, but energy minister Ed Davey said “decarbonisation should not mean deindustrialisation.” Ian Rodgers, director of UK Steel, said “I am delighted that the Govt has promised to shield energy intensive industries… This is no more than other manufacturing economies such as Germany have been doing for many years, and will help towards retaining a steelmaking industry in the UK. Dr Tim Fox, head of energy and environment at the Institution of Mechanical Engineers, said “The publication of this new bill is good news for engineers, investors and the general public as it means we are a step closer to getting on with the job of building the major infrastructure projects needed to keep our homes warm, the lights on and industry working.”

JOBS

Triumph’s production has remained steady despite a drop in profits

MOTORCYCLES Triumph Motorcycles revealed steady turnover but declining profit in its annual results. The motorcycle manufacturer has invested heavily in R&D and overseas expansion in 2012 but as a result operating profit before interest and tax reduced to £15.7m in 2012 from £22.3m in 2011. Group turnover for the year remains stable at £342.3m and the number of motorcycles it sold remained steady at 49,000. The company attributed the profit decrease to its increased level of investment with an additional £2m being spent on R&D operations. Investment in product development rose from £22m in 2011 to £24m in 2012.

SHIPBUILDING

EDUCATION

BAE Systems has confirmed it is considering closing one of its three shipyards after it completes construction of the UK’s two new aircraft carriers. The company’s group managing director, Nigel Whitehead, told The Sunday Telegraph a decision would be made by the end of the year.

The CBI has called for a radical shake-up of schools from nursery to sixth form to ensure all young people achieve their potential. According to the CBI, much of 35 years of education reform has focused on measures of performance, such as exams and league tables, rather than teaching standards, has allowed many young people to fall behind.

Tata Steel axed 580 jobs at its Port Talbotbased production hub in South Wales and 320 across the rest of the UK. The company is closing 12 sites, including Tafarnaubach and Cross Keys in South Wales. Shift levels at the company’s Rotherham and Hartlepool operations will be reduced to match production to lower demand for bar products and pipelines.

Up to 500 staff across Britvic and AG Barr operations will be made redundant over the next three years after the two companies announced a £1.5bn merger will go ahead. The two companies admitted in a corporate statement that 8%-12% of the combined group’s 4,300 staff, mainly those in “corporate activity”, will go in a restructuring that aims to realise £35 million annual savings.

GOVERNMENT An influential group of cross-party MPs published an open letter to Chancellor George Osborne urging the Treasury to place manufacturing at the heart of the Autumn Statement.

In the letter, the Associate Parliamentary Manufacturing Group insists there is ‘substantial cross-party consensus on policies to support our manufacturing industries’. The group believes these policies will contribute greatly to the UK’s industrial renewal.

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Manufacturing SKILLS Two ex-school teachers are seeking business partners from the logistics community to help develop an innovative board game that has been devised to teach young people about logistics while they play. Andy Page and Pat Smedley hope that their game – Business on the Move – will also excite and inspire young people to develop their understanding of broader business and enterprise issues and environmental matters.

EMPLOYMENT Businesses can bid for a share of £150 million to create training schemes in the second round of the Employer Ownership Pilot (EOP) scheme. Skills Minister Matthew Hancock announced the second round of the EOP, an initiative designed to give employers more control over training funds and the design of training courses as well as to boost quality and uptake in vocational learning. The pilot scheme is currently distributing about £70 million to companies including Nissan, Whitbread and GE Aviation. Projects range from providing skills training to local suppliers, to doubling the number of female apprentices.

NETWORKING Tony Hague, managing director of multiple awardwinning PP Electrical Systems, was appointed chairman of Midlands Assembly Network (MAN).

A founding member of the Midlands consortium of engineering businesses, MAN, Tony has targeted an additional £2 million of new business in three vertical sectors under his chairmanship. Automotive, aerospace and electronics are the three main sectors that could benefit most from the networks’ capabilities in mechanical, electrical and electronic engineering solutions (see p10 for more manufacturing appointments).

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The Defence Secretary Philip Hammond surveys militarised vehicles at JCB’s HQ

DEFENCE Defence Secretary Philip Hammond visited JCB’s headquarters for an education in its military product range. Accompanied by JCB chairman Sir Anthony Bamford (p28) and JCB CEO Alan Blake, Mr Hammond saw examples of almost 2,500 military machines JCB has sold to over 20 nations globally since 2005.

INSOLVENCY

FINANCE

Aerospace tooling and manufacturing group Hampson Industries has entered administration.

The board of Hampson Industries has filed a notice of intention to appoint Simon Ian Kirkhope and Chad Griffin of FTI Consulting LLP as joint administrators of the company in line with the Insolvency Act 1986. The board put the company up for sale on 14 February 2012 but could not find a suitable buyer and terminated the formal sale process in July. Hampson has been responsible for building the rear chassis for the Bloodhound SSC project.

Global information services company Experian published its latest BusinessIQ analysis suggesting that an average of £4.7 billion in unpaid debt may be left behind every year by UK firms that simply choose to close down.

The analysis reveals that among business closures previously thought to be benign, billions of pounds worth of debt is left still owing to existing firms. Experian looked at millions of supposedly solvent firms that have decided to close down voluntarily and have applied to be struck off the Companies House register since 2000. It found that each year around 13% of these firms had debts that exceeded their total assets just before they closed.

Magna Seating, which has a dedicated factory for making seats for Ford Transit vans in Southampton, will close as a result of Ford’s decision to shut its Transit van plant. An operating unit of Magna International, Magna Seating is closing its facility in Southampton with 30 jobs set to go.

LITIGATION A settlement of $4.5bn was reached between the US Department of Justice and BP to account for the oil company’s culpability in the fatal Deepwater Horizon disaster in 2010. The settlement includes a record criminal fine of $1.26bn as well as various payments to wildlife and science organisations which, it is hoped, will help redress some of the environmental damage done by the disaster. The payments are to be made over five years.

News AUTOMOTIVE Jaguar Land Rover will produce cars in China starting in 2014, following the agreement to form a £1.1bn joint venture with Chinese car maker Chery. The company has recorded a 58% increase in sales to China in the second quarter of 2012.

JLR and Chery have started the construction of a factory near Shanghai. The facilities will include a new research centre and a plant to manufacture engines.

JOBS Norwich-based electronics manufacturer Syfer Technology slashed 100 manufacturing jobs as it relocates production to China. The company’s electronic equipment for defence markets will stay in the UK for security reasons but its work for other industries will be outsourced to China and Taiwan despite the company’s latest results showing profits over £5m.

Element Six, a manufacturer of synthetic diamond supermaterials, will recruit 60 new scientists and technicians for its new Global Innovation Centre near Oxford. The jobs will be as materials and physical scientists, engineers and technicians for its new centre under construction near Oxford.

FOOD AND DRINK UK drinks company Diageo, which produces well-known brands including Johnnie Walker, Guinness and Smirnoff, will buy a 53.4% stake in India’s United Spirits for £1.28bn.

The deal is expected to help Vijay Mallya, the owner of the Indian group, to reduce the company’s debt and free up funds to rescue Kingfisher Airline, whose planes are currently grounded.

Editor’s choice Our favourite features and blogs on www.themanufacutrer.com this month Best bits from SMMT Annual Dinner A round-up of Nigel Stein’s inspiring speech at the trade association’s member gathering in Chengdu: Building an industry hub from scratch George Archer’s report from his trip to China (See p16 for more coverage from ’s editorial trips) China’s changing: and we’ve got what it needs UK companies can teach the art of innovation says Dr Stephen Hillier No fault found: taking a look inside aircraft maintenance Thought leadership in MRO and through-life service engineering Vocational talent gets the respect it is due!

The Skills Show celebrates ‘nonacademic’ stars in style Making equipment and skills go further Tom Moore’s report from Philadelphia and the Rockwell Automation Fair (more on p56)

Cranfield University will share in a £60m EPSRC fund to promote science in business

RESEARCH Cranfield University was named as one of 31 UK institutions to share in a £60m fund to promote science-based business development. The funding comes from the Engineering and Physical Sciences Research Council (EPSRC) and will be structured as Impact Acceleration Accounts (IAAs). While the way in which these will be used in each selected university varies, the common aim is to help commercialise existing and future research.

UNIVERSITY COLLABORATION High-performance plastics manufacturer, Victrex, and The University of Manchester embarked on a collaborative project to reduce waste in monomer production.

The programme was kick-started with the help of the Knowledge Centre for Materials Chemistry and aims to develop more sustainable, resource efficient manufacturing processes for monomer raw materials.

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News AUTOMOTIVE Toyota launched a campaign to market its Made in Britain credentials. The scheme will educate its staff and the public to increase awareness that most of the cars it sells in Europe are built in Europe, especially in the UK. “There is a growing awareness among customers that we build cars in the UK, and that’s something we are going to make more of in the future,” said Jon Williams, managing director of Toyota GB, speaking at the European launch of the Auris in Portugal. According to Automotive Management Online, to get the message across more than 1,600 sales staff from Toyota dealerships will attend factory tours at the Burnaston, Derbyshire, plant where the Auris and Avensis models are built.

SUPPLY C HAIN The Business Continuity Institute has cautioned companies to be more careful in their outsourcing decisions to protect against supply chain vulnerability. The advice comes following research from the institute which revealed that three in four firms recorded at least one supply chain disruption in 2012, with service failures in outsourced operations one of the top three causes after IT telecoms failure and adverse weather. Respondents from 532 organisations across 68 countries also revealed that 73% of organisations recorded at least one supply chain disruption in 2011 with 39% of analysed disruption originating from below the immediate supplier.

Datesfor yourdiary January

10

The IET hosts a lecture on the Nuclear Power Industry in Edinburgh at the Apex European Hotel. Mr Ian Cathro, special projects manager at Torness power station will deliver the lecture which is free to attend

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Semta, the sector skills council for manufacturing, hosts another in its popular series of Awareness of Composites courses. The course will take place at Cambridge College. Contact customerservices@semta.org.uk for details

23-24

The London Textile Fair takes place at the Business Design Centre in Islington. The Fair attracts textile mills and accessories suppliers from across Europe. www.thelondontextilefair.co.uk

February

7

The Institute for Manufacturing at Cambridge University hosts Building Better Businesses: Practical Workshops for SMEs. Contact Jo Griffiths (jg393@cam.ac.uk) on 01223 766141 for details

13

Cranfield University hosts an open day for prospective students to find out more about its courses and how they are aligned to industry (p35). Contact enquiries@ cranfield.ac.uk for details

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hosts two co-located events in its Future Factory Series.

Automate UK and Driving Skills Development in the Workforce will take place in London. The former event will help manufacturers identify opportunities for automation and plot automation strategy including sourcing finance and redeploying skills in the factory. The latter event will clarify opportunities and methods for youth outreach programmes and explain the process for establishing apprenticeships or other vocational training courses. Contact Sarah Hough (s.hough@sayonemedia.com) on 0207 4016033 for details

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The National Manufacturing Summit will take place at the Heritage Motor Centre, Gaydon, Warwickshire. This will be the third such summit gathering all senior business ministers and ministerial economists to focus their attention on manufacturing and develop government support structures for areas such as technology development and access to finance. Check the BIS.gsi.gov website for more information

HEALTH & SAFET Y An employee at Countrywide Farmers, a supplier of products and service to the rural community, was sacked after he asked a work colleague to climb to the top of a fork lift truck to retrieve a pallet. The request risked death or serious injury, a tribunal heard.

Terry Phillips, 64, had worked at Countrywide Farmers for 16 years leading up to the incident and was considered to have a good track record as a warehouse operative. He unsuccessfully filed a claim for unfair dismissal against his employers.

March

5

EEF holds its second National Manufacturing Conference at the QEII conference centre in Westminster. Ed Balls, Shadow Chancellor has been confirmed as the opening keynote speaker and the event will be chaired by Krishnan Guru-Murthy, presenter of Channel 4 News. www.manufacturingconference.co.uk

19-22

The International Materials Handling Exhibition, IMHX takes place at the NEC Birmingham. More information is available on p65 or go to www.imhx.biz This event is free to attend

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The Manufacturing Technologies Association Annual Dinner and Awards take place at the ICC, Birmingham. Book at www.mta.org.uk

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ManufacturingAppointments UK Appointments Peter Tichbon Edme

Mistley-based miller and food ingredient producer Edme appointed Peter Tichbon, formerly of Allied Bakeries, as managing director. Mr Tichbon’s management experience in the FMCG sector includes

manufacturing and distribution as well as sales and marketing. Edme supplies bakers and food manufacturers across the country with malted wheat, barley, rye and oats.

Philippe Mellier Element Six

Element Six, the synthetic diamond supermaterials specialist, appointed De Beers Group CEO Philippe Mellier as chairman.

Mr Mellier joined De Beers in July 2011, and has since overseen a strategic review of the business and its integration into the Anglo American plc Group. Previously, Mr Mellier was

president of Alstom Transport and executive vice president of Alstom s.a. As the leader of one of the world’s largest infrastructure and transport businesses, he was committed to developing a culture of innovation and investment in R&D, and earned a strong reputation for manufacturing excellence.

Terry Paterson Kenard Engineering

Precision engineering specialist Kenard Engineering appointed Terry Paterson as managing director of the company’s Tewkesbury facility. This is a new position within the company, which will support the existing management structure. Mr

Paterson’s appointment is expected to add to Kenard’s reputation within the aerospace sector given his wealth of experience in the industry. For 18 years he has held senior management positions at several large UK organisations.

Neil Middleton Bisham Consulting

Neil Middleton was appointed new chief executive of Bisham Consulting, succeeding Derek Bell who will continue on the board of the company he founded 20 years ago. During his 12 years as a director of the company, Mr Middleton has worked across the range of Bisham

clients, which includes companies such as Argos, Boots, Brammer, M&S, River Island and Waitrose, to help them achieve supply chain improvements. Prior to joining Bisham, his career has encompassed senior management roles in food manufacturing, retailing and wholesaling.

To further strengthen the McLaren GT technical team, and to support expanding operations, the British race car manufacturer announced three high profile appointments: Andrew Bailey as operations director, Ian Morgan as chief engineer and Tim White as engines operations manager. Mr Bailey joined from the Vodafone McLaren Mercedes Formula 1 team, while Mr Morgan moved from his recent position at Red Bull Racing Formula 1 team. Mr White has more than 25 years of experience in top level motorsport.

Hewland Engineering announced four appointments to support the company’s growth targets for 2013 and beyond. Malcolm Rooker became a non-executive board director. Ken Wallace was appointed business development manager, working closely with Alex Thornton who has joined the company as sales co-ordinator. Quality remains paramount for the firm, whose goal is to attain ISO 9001 certification in 2013. Hewland hopes to achieve this under the direction of Dave Hawke, the new operations manager.

Norbar Torque Tools appointed Jeremy Tucker as its UK and Ireland business manager. Mr Tucker will be responsible for managing sales and profitability throughout the company’s existing distribution network and is tasked with maximising torque solutions opportunities within the UK and Irish markets. He joined Norbar from BSS Industrial where he worked for 27 years.

Engineering mobility specialist SCHAD expanded its leadership team with the appointment of Dave O’Reilly as its global alliances director, a newly created senior management role. Mr O’Reilly will be responsible for building SCHAD’s global ‘Go To Market’ channel strategy for strategic partners, resellers, OEMs and system integrators. Before joining SCHAD, Mr O’Reilly was EMEA managing director at software developer Voxware.

Len Palmer joined PP Electrical Systems, a provider of electrical, electromechanical and electronic assemblies and control systems, as its new operations director. The former technical apprentice and black belt six sigma specialist will be responsible for reinforcing world-class performance across the company’s 220-strong workforce and ensuring it can cope with plans to double turnover to £50m by 2015.

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Star Prototype, the British-owned China-based rapid prototyping house, appointed Dave Moir as its UK project manager. Mr Moir has previously worked for Omega Plastics, Thermodynamix, Nusurgix and others during his 17-year career. He is tasked with delivering significant growth in UK project work for Star.

To notify The Manufacturer of your company’s appointments, please contact Roberto Priolo at: r.priolo@sayonemedia.com or: 0207 401 6033

UnLock The poTenTiAL in yoUr peopLe When the next race in the Formula 1™ circuit looms and pole position is the goal, Lotus F1™ Team Technical Director James Allison shifts into overdrive. Microsoft Dynamics gives James proactive, easy-to-use tools that adapt to the way his team of engineers and designers work. So the Lotus F1™ Team can coordinate 500 team members and over 15,000 highly specialised parts to build one very fast car. Get ready to transform your workforce in record time with business solutions from Microsoft. microsoft.com/uk/dynamics

Actual Lotus F1™ Team employee and Microsoft Dynamics user

Monthly columns

BacktoScuoler

Thebigpicture

Capturing value from global value networks

For large manufacturers, global value networks are a vital source of competitive advantage. Dr Jagjit Singh Srai, head of the Centre for International Manufacturing at the University of Cambridge’s Institute for Manufacturing, explains that in today’s interconnected world, companies should be designing their networks with a view to developing ‘meta-capabilities’.

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hat do we mean by a global value network?

Essentially, it’s the activities undertaken by a network of businesses across the globe, from basic R&D, through all aspects of the supply chain to marketing and after-sales service.

Today, these activities are likely to be dispersed among a network of interacting players scattered around the world, creating a complex industrial system that needs to respond rapidly to changing market, technological and geopolitical conditions. Therein lies the challenge.

The Centre for International Manufacturing at the IfM has been researching how companies might best design and operate these geographically dispersed networks.

We have focused on two separate but linked themes: how to develop critical capabilities and organisational routines to manage the network, and how to design and set-up the right configuration of resources to underpin those capabilities. Results from our work with more than 30 multinational companies suggest that – counterintuitively, perhaps - it may be easier to reconfigure a supply network to deliver a particular outcome rather than invest in capability development processes alone.

Our other key finding is that it is the combination of specific individual capabilities that creates distinctive competitive differentiation. For example, a company aiming to compete via innovative product leadership might need to combine capabilities such as new product development, defect minimisation, manufacturing processes and customer connectivity. It is the way in which companies optimise and combine these individual capabilities that is important.

We have developed a process for operationalising the ‘meta-capability’ concept for international manufacturing businesses. Our work with companies suggests they need to do more than just manage their global operations at a functional or firm level – they need processes to develop inter-firm meta-capabilities that are valuable, difficult to imitate, and by doing so, achieve real competitive advantage.

EEF chief executive Terry Scuoler responds to the publication of the Richard Review of Apprenticeships.

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hen the government announced it had commissioned an independent review on apprenticeships, led by entrepreneur Doug Richard, the general feeling at EEF was ‘not another review’ (p14). The Holt Review was still due to be published and the Business, Innovation and Skills Committee was still conducting its inquiry into apprenticeships.

Fast-forward five months and we have the Richard Review before us. And we are happy to report it is pretty impressive – a true reflection of where manufacturers see the future of apprenticeships.

In recent years boosting apprenticeships has been a numbers game. This year the number of apprenticeship starts hit the half-million mark – but what about focus on quality and relevance?

The Richard Review and subsequent recommendations should bring balance to a revival of the key elements of what an apprenticeship used to be and the need to develop apprenticeships which maximise the opportunities of today and the future.

The Review quite rightly covers a lot of ground, but with relevance to industry we believe recommendations around redefining and clarifying apprenticeship ‘levels’ to be key as well as re-routing funding through employers and creating new industry standards.

With regards to funding, Richard’s recommendations build on existing Richard goes work to give employers more further with his model for driving ownership – observe the Employer apprenticeship Ownership of Skills Pilot. But Richard investment goes further with his model for driving through the apprenticeship investment through national the national insurance or tax system. insurance or tax This really would give employers system greater purchasing power.

As we acknowledged in our Skills for Growth report, a reduction in national insurance contributions gives employers of all sizes the ability to draw down funding, to use with their own money, which will then drive further investment in apprenticeships. Such a model will also ensure that funding remains stable – not subject to short-term political change.

On creating a new industry standard the Richard clearly advocates establishing an industry standard that all employers can understand and own. This will drive up levels of ambition and ensure that qualifications are relevant to employers, which a recent EEF survey revealed is not yet the case.

Doug Richard has sent a positive message to the industry, and offers real recommendations that employers can relate to.

www.ifm.eng.cam.ac.uk/research/cim

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This version of Back to Scuoler is abridged. For the full version go to:

High Value Engineering The Future of

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he public debate is ongoing. Meanwhile, a quiet industrial revolution is providing a clear answer. High Value Engineering (HVE) companies in the UK are launching cutting edge innovations that will help transform global manufacturing forever.

Groundbreaking inventions such as nanotechnology, 3D printing, smart materials, structural batteries and a new generation of composites have the potential to fundamentally change world economies. The positive news: the UK could once again be one of the top workshops, globally, of a brave new high-tech world.

UK HVE companies have the potential to position themselves as key players in a global manufacturing market of game-changing technologies that will be worth €1 trillion ($1.3 trillion, £805.8bn) by 2015.

A new research report from The Royal Bank of Scotland, based on research conducted with UK manufacturing leaders, provides an intriguing insight into a manufacturing segment that has still to reach its full potential. It also presents a series of recommendations that could provide a blueprint for success for these leading-edge engineering companies.

How strong is the UK’s manufacturing industry? Could it help lead the country’s recovery from recession? What needs to be done to bring it back to its old glory?

Key findings of the 36 page report include: Positive market outlook: Eight out of ten businesses expect their turnover to grow over the next five years, with 27% of SMEs predicting growth of more than 30% Vital strategies for growth: Investment in technology, sophisticated data capture, product diversification and customisation are key to position the UK’s HVE firms at the forefront of a new hightech world Cities of excellence: Birmingham, Sheffield and Manchester will lead a new High Value Engineering revolution Mastering key challenges: 74% of businesses worry that skill shortages will impair future growth and competitiveness. A contract between industry and universities for new apprenticeship schemes is needed to defuse the twin time bombs of a widening skills gap and a depleted supply chain Addressing the R&D dilemma: 98% of the survey respondents agree that research and development is crucial to UK growth, but only 10% plan to increase their R&D spend in the short term Reality check: Over three quarters (78%) describe their business as equipped to face the challenges of 2025 yet 88% of respondents are not planning to invest in key growth strategies such as improving their supply chain or investing in current staff.

To read the full report, please visit the RBS website: www.rbs.co.uk/futureofukhve

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Letters to the editor

Production lines 3 new messages

Letters to the editor

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Richard Bridgman, chairman of Warren Service and Semta chair for East of England on apprenticeship reviews

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he endless stream of reports being published to review and analyse the apprenticeship landscape is uncoordinated, repetitive and a waste of public money.

Earlier this year we had the Holt Review, last month there was another select committee report and now Doug Richard has published his review of apprenticeship provision.

These are all government commissioned reports – presumably paid for by the tax payer. But there are numerous others from the likes of EEF and the Federation of Small Businesses.

The reviews all seek to serve a good purpose – I thought the recent FSB report was particularly

insightful. It is extremely important that we make it easier for more employers, particularly SMEs, to higher more apprentices and that we make sure the quality of apprenticeships has the confidence of employers.

But, this uncoordinated littering of reports means we spend far too long reading about well established problems instead of trying to make the situation better.

Someone in government ought to be responsible for coordinating the findings of all these publications and ensuring they are acted on.

Government is throwing money at the skills challenge but it is not spending it wisely.

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Adam Cropper, project engineer at hydroelectric business Ellergreen on the Energy Bill

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llergreen welcomed the proposals for the Energy Bill in November with relief. In the long term paying more on our electricity bills now will mean lower bills in the future. The costs in importing gas, oil and coal are steadily going up, and our reliance on imports puts our economic wellbeing at risk.

Generating our own power has benefits on top of reducing carbon emissions. We have a moral responsibility to think about generations to come and we must not allow them to poignantly wonder why we did not invest in renewables. In addition of course, we will benefit in our own lifetimes through the creation of jobs and economic growth from a buoyant indigenous renewables industry.

The UK has fantastic energy resources for hydro, wind and tidal energy. Both hydro and wind are well proven and already on their way to providing our future energy needs. Tidal energy will be more and more significant in the energy mix looking to the future.

The Energy Bill perhaps gives undue emphasis to wind over hydro power but as a general commitment to renewable power sources, rather than fossil fuel-based technologies, it is welcome.

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Tom Crotty, director, Ineos Group on cross-departmental alignment in government

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t was a great pleasure to attend the Manufacturer Directors Conference (p20) last month and to have a chance to hear the new business minister, Michael Fallon, outline his hopes for the future of UK manufacturing.

Ineos is one of the UK’s largest manufacturing companies and proud to be part of the UK’s chemical industry – a significant contributor to the country’s balance of trade. If we are to see a major manufacturing recovery in the UK then we need government to be supportive, so to hear the minister say that growth is the government’s key priority is a good thing.

But we need is to see that priority influence all government departments – not to have BIS as a lone voice crying in the wilderness. The Treasury, DECC, DEFRA and the rest all need to be fully aligned if we are to see the sort of resurgence in manufacturing that this country so desperately needs.

Such alignment will only come if it is driven from the top of government. Treasury must be persuaded to beat the table for this cause as they hold the purse strings.

If you would like to respond to one of ’s articles or comment on current manufacturing trends and events please email your letter to j.gray@sayonemedia.com

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On the road again ’s editorial team are 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 events they got to in November.

AND ABOUT

S

ee p56 for Tom Moore’s review of his editorial trip to Pennsylvania with Rockwell Automation last month. For more news on what ’s editorial team are up to and where, visit www.themanufacturer.com

Skills that make sense On November 14 The Skills Show, celebrating vocational training as a route into careers across all sectors, officially launched for the first time. Jane Gray recounts the excitement and its significance.

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he Skills Show represents a consolidation of existing skills initiatives from the National Apprenticeship Service and it may mark the beginning of a wider move to concentrate and simplify communication on vocational training and career opportunities that The according to the show’s CEO, Ross Maloney. He told Skills Show is already in talks with EngineeringUK – organiser of the successful STEM skills event The Big Bang – about how they could align for clarity of messaging to employers, educators, children and parents about the value and practicalities of vocational training – including apprenticeships.

The Skills Show’s organisers indulged in an extravagant opening ceremony which also co-hosted the National Apprenticeship Awards and National Training Awards. The ceremony was attended by finalists in both of these contests as well as show sponsors and exhibitors and celebrity guests - Dragon’s Den star Theo Paphitis for example.

Government was represented by Business Secretary Vince Cable who made a clear statement of his belief that vocational training can and should be seen as equal to university education for vocational careers.

The launch of this skills event is significant as a statement of determination in building on the massive success of the WorldSkills contest which was hosted in London last year, attracting more than 200,000 visitors over four days. It became the largest event ever hosted at the ExCel arena.

WorldSkills is an international biennial competition which pits the best young talent in a broad range of vocational disciplines against one another in a kind of skills Olympics. The Skills Show brings together the selection process for WorldSkills’ Team GB for the first time – previously these national heats have taken place as disparate and rather low key affairs.

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A budding engineer

Skills soar above the pressures of austerity at an extravagant opening ceremony

Manufacturing and engineering skills received special attention at this first Skills Show. There was a snappy pavilion which housed interactive displays from BAE Systems, JCB, JLR and more.

This pavilion was a hotspot for excited school children visiting the event. Exhibitors were in no doubt of the value of engaging with young people across a broad age range and emphasising the excitement that an industrial career might hold for them. @janefagray

Out and about

JD Edwards is back.

“But we never left!”

On the UK leg of its European roadshow, Will Stirling finds out the Oracle-owned platform has a loyal following and is pushing hard to lift perceptions in the UK.

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hen it was bought twice – by PeopleSoft in 2003 then when Oracle bought that company in 2005 – rumours circulated that JD Edwards, the ERP system with a strong manufacturing genesis, would wilt away in the shadow of the world’s third biggest software company.

“There are competitors who try to play on that,”

says Lyle Ekdahl, group vice president general manager at JD Edwards, speaking at the company’s Reading convention in November. “Referring to eight years ago, they say, ‘JD Edwards was bought, they’ll go out of business and won’t be relevant.’

In fact we’ve proven them wrong, time and again.”

In recent years, JD Edwards has scored some big successes

Transforming Porsche In mid-November 2012, Lean Management Journal (the sister publication of ) teamed up with Porsche Consulting to provide a twoday continuous improvement course at Porsche’s Leipzig factory. Tim Brown went along for the ride.

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n day one the 10-strong group arrived at the striking 32-metre high Porsche customer centre affectionately known as the diamond due its small base, slanting angular sides and broad roof. Attendees had come from far and wide including Canada, the Czech Republic and...Bristol. But everyone was keen to see how a supercar company implements lean.

We were quickly ushered in and welcomed by the Porsche Consulting team and the course commenced with a look into the development and functions of the Porsche Production System. For those who were not familiar with Porsche’s history over the last two decades, it was a surprise to learn that Porsche hadn’t always been so efficient and successful. Indeed, in 1992 the company haemorrhaged €122m.

among global and mid-market companies. For example, customers for its EnterpriseOne ERP product include speaker-maker Sennheiser, United Streetcar and Senco Brands. A typical JDE customer is in mixed-mode manufacturing. “If you run some process, some repetitive, some discrete lines, then JDE will make a good fit,” says Mr Ekdahl.

Customers that have remained loyal to JDE say they feel they have a well-designed base product for manufacturing, with modules which easily scale up “both functionally and technically” as a business grows. “We are a full suite Tier One ERP at a price point that is more in line with a Tier 2 ERP,” says Mr Ekdahl.

That has resonated with JD Edwards’ European business, where it has had some of its best years ever – wine making in Italy and food and beverage in the Benelux stand out – despite being less well known in the UK. “We can do better here, and we are doing better,” Ekdahl says. “We had about 150 visitors to this conference a few years ago, now we’re getting over 312 registered participants.” Look up JD Edwards in your next ERP review. @WRStirling

At that time, the company enlisted the help Japanese consultancy firm Shingijutsu to help with the turnaround.

The results were remarkable and only a decade later in 2003, the firm turned a profit in excess of €1bn – a striking reminder of the true potential of process improvement.

In the afternoon, the group were treated to a lesson on personal development. The session demonstrated how formulaic military-style briefings can be used to effectively communicate plans to managers or the wider workforce.

The second day was a more hands on experience including

a simulation of the Porsche supply chain and logistics operation using the components of toy trucks to represent the production line. Following a presentation from head of Porsche Consulting, Holger Ludwig, the group were then taken on a gemba tour of the Leipzig operation where what they had heard over the past day and half was illustrated in practice.

Overall it was an insightful programme showing not only how the best in world operate but how the application of lean principles can successfully create growth. @BrownNewsUK

LMJ’s delegates learn Porsche’s turnaround secrets

Have your say at www.themanufacturer.com

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Leanonme Issue 6 Volu me Issue 8 Volum e2

Roberto Priolo, editor of Lean Management Journal sums up what 2012 has meant to the publication and what readers can look forward to in 2013.

| October 2012 | www.leanm

2

| July/ Augu st 2012

| www .lean mj.c om Issu e 5 Vol ume

j.com

THE NAT OF LEANURE

Examining the lean thinking synergies between and a green strategy

Companies featured in this edition Toyota, MITIE, include: Gemalto, Tesco, 3M, Brasil Foods IN THI S The future I S S U E : of on a strong supermarkets: Tesco’ lean and Cardiff Busine green ethos. s success relies Experts from the UK explainss School and Cranfie ld Univer sity in Green, lean… management and clean: MITIE is Europe. Jon company that operatea facilities Lightowler s in Britain lean and green within talks about the interac and the busine tion of Lean’s Wester ss article, Richar n beginning: In the final part d Schonb account of of his erger provides the history an interes of lean ting Leaning and booming: Brazil to This month LMJ analyse the travels to American adoption of lean in country the South A new paradig Netherlands-b m for assessment: Denis Becker ased digital shares his of securit view a new model on lean assessm y specialist Gemal to ent, and explain is needed s why LMJ in confere in São Paulo nce: Roberto Priolo organised reviews the by the Lean summit Institute Brasil

THE VOIC E OF THE GEM BA

Letting wor kers

speak for them selves.

IN THIS ISSUE Let employees: drive innov to consider people’s ideas ation: Too often we fail 2 Innovate . Andy Broph Thinking y of Lean discu manageme nt is to drive sses how important improveme idea nt and innov A view from ation. teams and the shop floor: LMJ meet mach and asks what ine operators from s practioners, three comp their take on lean is. anies, A lean educ ation: Koot Nelson Mand Pieterse of role of lean ela Metropolitan UnivSouth Africa’s in tertiary ersity analy education ses the .

First steps: In Europe, for this issue, the journ al its special on lean in travels to Eastern Hungary.

Bicheno’s Hansei: In this sums up the most impo new column John the latest issue of LMJ. rtant lessons we can Bicheno learn from The stead y expansion Lean Diary of , manufactur a lean programme: recent progr In the er SCGM shares the ess made lean progr by the comp most amme. any throu gh its

The Lean Managem ent is supported Journal by the Lean Enterprise Research Centre, Cardiff Business School

A

nother year over, a new one just begun. Such times are made for reflection and anticipation.

What a year has it been for Lean Management Journal!

We have shared the stories of dozens of companies, analysing the most important issues facing the lean community worldwide and offering practitioners pragmatic advice on how to progress their lean journeys.

I recently completed the list of themes for coverage in the new year and let me tell you – I can’t wait for January to get started.

In 2012 we have seen LMJ editions focus on very specific topics and practical subjects, from scheduling to assessment methods, from setting a lean strategy to supply chain collaboration in continuous imporvement.

In 2013, we will adopt a more conceptual approach.

For example, an entire issue dedicated to dispelling lean myths: is Toyota still the Holy Grail of lean? The latest news coming from the company seems to suggest the contrary.

Is lean just common sense?

If it is, why don’t all lean programmes succeed?

We will let the case studies do the talking and get practical as we cover the implementation of lean in small businesses.

We’ll also analyse how large corporations ensure their

18

2

| Jun e 2012 | ww w.le anm

j.co m

SERVICIN G LEaN

Examining the adoptio n of lean in the service industry.

IN THIS ISSU Services: lessoE: of companie ns from Toyota: How s did the leane manufacturingapply the principles it developed st and Pär Åhlst to services? Niklas in Mod about Toyo röm of Stockholm Scho ig, Ryusuke Kosuge ta Sales Logis ol of Econ omics talk tics.

Services and Lethbridge standards: stand off or stand up?: , senior resea Enterprise Sarah Research Centrch associate at the Lean standards re, discusses in a service envir continuous improvem the role of onment. ent programm e in a a value creat ing paradigm: with LMJ the Dr ahmed al-ashaab leading at research on lean prod Cranfield Univ uct developm shares ersity. ent he is american the Lean: LMJ look at exam crosses the ples of lean atlantic Ocea States. The five case studi implementation in the n to world spec United es included ial and CEO of are introduced by John in this It’s a lean the Lean Enter Shook, chair prise Instit man ute.

The Harada Method: Norm talk about an Bode a new meth odology to k and David Fennig company focused on develop peop improving le in a .

The Fifth Colu (in disguise) mn: In this month’s column, John addr misconception esses some of the most com Bicheno s about lean mon in services.

The Lean Management is supported Journal by the Lean Enterpri Research Centre, se Cardiff Busines s School

In 2013, we will adopt a more conceptual approach. For example, an entire issue dedicated to dispelling lean myths: is Toyota still the Holy Grail of lean?

Roberto Priolo, editor, Lean Management Journal

global lean programmes deliver sustainable and consistent results across borders and cultures.

One of the things that seems to be most difficult for companies in all sectors is to see the entire value stream and realise that, while value flows horizontally in a business, most are still organised in vertical silos.

How do you make a smooth transition from traditional, hierarchical management systems to a lean system where people are engaged, autonomous and empowered problem solvers? Read LMJ in 2013 to find out.

The final edition of 2012, which is also the first of 2013, is a perfect example of the mix of lean experiences that readers will have access to next year. Organisations of all sizes and from every sector have contributed to the December/ January edition: among others, we have heard from; a research institute in Rome, yogurt manufacturer Yeo Valley, a UK NHS Trust and even an entire city (Irving, Texas, which has saved $45 million thanks to its lean six sigma programme).

Learning comes from observing what others do and benchmarking your own experiences or performance against what others have achieved. And sustaining to learning culture in a lean business is essential for true improvement and returns on investment.

In recognition of this the February issue will be entirely devoted to lean training and learning including an exclusive interview with the Head of the Lean Academy at Airbus’ Broughton plant.

In 2013 we’ll keep bringing you thought provoking commentary and analysis, and case studies from around the globe. Personally, I look forward to hearing what our Lean Diary company in Serbia, SCGM, will be up to next year – I can already tell you that the Serbian manufacturer will present its lean journey at the LMJ Conference, on 21 May. Save the date and stay tuned for more details.

This year LMJ has expanded its scope and coverage, sharing its content with an increasingly international and diverse audience. It is my sincere hope that, as a reader of The Manufacturer, you will consider joining our expanding group of readers – you will learn valuable lessons on how to improve your business and change the culture on which it builds its success.

In the meantime, I wish you a Merry (though probably not very lean!) Christmas and a Happy New Year.

If you are interested in learning more about Lean Management Journal visit www.leanmj.com, or email the Editor on r.priolo@sayonemedia.com

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How are manufacturers navigating today’s challenges to optimise long term success and competitiveness? Jane Gray reviews findings and feedback from The Manufacturer’s annual conference.

Networking at MDC 2012

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rom economic outlook and government industrial policy through to focused advice on energy strategy, productivity improvement and the exploitation of social media in business, the Manufacturer Director’s Conference 2012 (MDC2012), on November 21, offered insight and provoked debate.

The event was attended by almost 300 manufacturers and representatives from trade bodies, academia and supporting service organisations. Feedback reports that the speakers were strong, the networking beneficial and that the opportunity to exchange experiences and knowledge with peers – during what is an uncertain but potentially very exciting time for British industry – was relished by delegates.

The event was opened and chaired by Professor Sir Mike Gregory of Cambridge University’s Institute for Manufacturing, who welcomed delegates and joked that the last time manufacturing had been fashionable in the UK “I was wearing flares”.

Sir Mike urged delegates to seize the opportunities of the day in networking and asking pressing questions of speakers.

He said that there is much for the manufacturing sector in the UK to be optimistic about if it can learn to exploit its assets and better understand its globalised marketplace.

Ross Walker, senior economist at Royal Bank of Scotland helped to clarify this environment with an overview of EU and global growth prospects. Mr Walker warned delegates of a growing dichotomy between European markets and those in developing economies where growth rates have broadly held up through the recession (see box). Walker played down concerns over slowing growth in China saying that it was expected.

This led to an analysis of the UK’s export performance and strategy. Walker termed UK export growth as “disappointing” given the advantage of a weak sterling. He admitted that this

Leadstory Manufacturer Directors’ Conference 2012

was closely linked to weak world trade but said that it was also a fault of where UK companies are broadly aiming to export to.

While it would be fair to say this economist’s insight into global GDP outlooks, inflation and consumer spending was not received enthusiastically by delegates, feedback did admit the importance of acknowledging macroeconomic conditions when planning day-to-day operations.

Perhaps Mr Walker’s most important observation was on what he termed “the great hope for British recovery” in the balance sheets of “non-financial corporates”. Walker said that UK corporates are sitting on “unprecedented cash piles”, and that until they can be moved to start spending and investing “UK growth will remain around 1% at best.”

But the institution most often charged with responsibility for growth is government and, stepping into the spotlight at MDC2012 the new minister for business and enterprise Michael Fallon assured that every department in government is now “a department for growth.”

His assurances fell on a dubious audience however, and Tom Crotty, director at speciality chemical manufacturer Ineos Group and chairman of sector skills council Cogent said that he saw “you [Mr Fallon] and Vince [Cable] as voices crying in the wilderness”. Mr Crotty asked what more could be done to break down silos in government and bring key departments behind manufacturing.

Mr Fallon assured that a forthcoming Growth and Infrastructure Bill being formed in collaboration between BIS and five key departments will deliver further on this. He also said that Lord Heseltine’s recent growth review has been fully acknowledged by government and that its advice, including devolution of power from central government into the regions, has influenced the Chancellor’s Autumn statement.

Et alors?

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[Other Parties] see that if [the industrial strategy] is going to work then it has to be longer term.

And let’s be fair – some of the changes we have seen in the turnaround of automotive didn’t suddenly start in May 2010 Michael Fallon, Minister for Business and Enterprise

s well as drawing attention to growing distinctions between the health of European economies and those in the developing world, Ross Walker, RBS, noted “clear signs of contagion [from the eurozone crisis] in semi-core countries such as France and Belgium”.

Even Germany’s confidence is being effected said Walker – and he is not alone in noting these worrying signs that the instability in Greece, Spain and Italy are starting to spread.

As MDC2012 took place, an article in The Economist termed France a “time-bomb in the heart of Europe,” and warned that its lack of business-friendly policy and the very high proportion of GDP reliant on public spending could lead to a complete disintegration of its economy as early as the New Year. “Because of the failure to balance a single budget since 1981, public debt [in France] has risen from 22% of GDP then to over 90% now,” said the author.

Lee Hopley, chief economist at manufacturers’ organisation EEF does not deny the outlook is grim. “[The French] have recently had their own ‘Heseltine Review’ of competitiveness led by former EADS Chairman Louis Gallois and the conclusions were stark.

Their share of global trading is falling, costs are rising and the government is faced with twin deficits – current account and public finances,” she observed.

Should France’s economy fail could core nations like Germany afford similar intervention to that arranged for Greece to maintain the euro community? If not, what would the fallout be for UK manufacturers feeding into French markets or supported by French supply chains?

Ms Hopley commented: “For UK companies involved in supply chains through French industry prospects are probably sector dependent”. Focusing on aerospace and the strong core of panEuropean production in EADS, Hopley reassured: “The order pipeline there looks pretty solid because of demand from the Middle East and Asia. Therefore the domestic issues in France are very unlikely to be a major factor for UK manufacturers.”

Pondering what might be done to forestall such a disaster as a French economic collapse, Ms Hopley echoed the words of Lord Digby Jones at The Manufacturer of the Year Awards (p26) saying: “Europe needs to focus on how it competes [collaboratively] in the new global economic landscape.”

Roundtable debate at MDC2012

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Leadstory Manufacturer Directors’ Conference 2012

Toyota Production System workshop

Our favourite tweets from #MDC2012

@Dr_JAH: Bloody Inspiring ! ... Just had talk from Richard Noble on @Bloodhound_SSC at #MDC2012 ... immense interaction with schools #ukmfg @PESPerformance: @TheManufacturer Directors event. Real debates and challenges.

Met some great people and already talking collaboration #MDC2012 #bizitalk @AngryDansRants: Proud to have met a real hero and inspiration - Richard Noble OBE at #mdc2012 @Thomasmoore88: @GEAviation named as an example of a manufacturer using social media to good effect with From the Factory Floor albums #MDC2012 @allanbehrens: This is smart. Financing capex through ‘energy performance contracting’.

In fact #rbs will do it for you http://lockerz. com/s/263134513 #MDC2012 @UnitedBiscuits: Great day at The Manufacturer Directors Conference. Especially AMAZING presentation from Richard Noble of @ bloodhound_SSC #MDC2012 @gmacrae:: #mdc2012 Great thought provoking presentations today @jasonlippitt: “Hope is not a strategy” couldn’t agree more #MDC2012 Brian Davidson

Moving away from policy and economy the final two keynote speakers at MDC2012 spoke with firsthand experience and passion on the challenges facing UK manufacturing.

Brian Davidson, non-executive chairman and former CEO of Crown Paints gave pragmatic but encouraging insight into the potential to transform the prospects of apparently failing manufacturing businesses.

Mr Davidson was firm in his advice to failing firms saying that many manufacturing owners and managers are still “in denial about the business environment returning to that of 2007”.

Without a doubt the most moving presentation of the day was the last keynote from Richard Noble OBE, founder of the inspirational Bloodhound supersonic car project.

Mr Noble has become a ubiquitous speaker at industry events as the collaborative manufacture of the car which aims to exceed 1000 miles per hour progresses apace.

However, the update delivered at MDC2012 moved even those who had heard Mr Noble speak many times before.

One delegate, Richard Lloyd, global manufacturing director at Accolade Wines said: “I have heard Richard speak several times but today was somehow different again.

Truly his presentation made me determined to do something different [on schools engagement and outreach to young people] in our business.” Dr John Homewood, a lean expert formerly of Tata Steel, exclaimed over Twitter that the presentation was “Bloody inspiring!”

Cross party consensus Following his presentation to delegates at MDC2012 Michael Fallon talked to Tom Moore about government interdepartmental tensions, aligning a remit for growth and gaining cross-party support for the Coalition industrial strategy. Here’s an excerpt from the interview.

TM: As we approach the end of this government’s term in a couple of years, what will BIS be doing to encourage Labour and other partners to get behind the industrial strategy announced by the Business Secretary in September?

MF: They see that if this is going to work at all then it has to be a longer term strategy. And let’s be fair – some of the changes we have seen in the turnaround of automotive didn’t suddenly start in May 2010. They started earlier, actually under a previous Conservative government which attracted Nissan to come to the North East in the 1980s and then followed through with Toyota coming to the Midlands in the 1990s. That’s a very good example of how you need a long term policy that both parties can support. Vince Cable’s door and mine are open to anybody, from any party, who wants to get behind the industrial strategy and support it.

23

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Leadstory Manufacturer Directors’ Conference 2012

MDC2012 was the fifth annual conference sponsored by Royal Bank of Scotland. Peter Russell, head of manufacturing at the bank comments on what he feels had changed, and what had not, in the attitude of manufacturers at this year’s event.

“T

he sessions on energy and environment were well attended and delegate questions reflected what we see in the wider market as rising interest in the subject of energy.

It is now clearly in the top three to five issues on boardroom agendas and there is an acknowledgement that while steps have often been taken to reduce consumption and increase efficiency – such

as changing light bulbs and looking at voltage optimisation – these steps are not enough.

Presentations and questions showed that there is a will to push further in mitigating exposure to energy costs.

Exploring the use of waste products as a source of energy is one way in which companies are attempting to find further protection from energy costs.

Both presentations in this section of the conference mentioned

The Bloodhound SSC has now visited over 5,300 schools to inspire young people with a desire to enter manufacturing and engineering careers – bridging damaging skills gaps. Mr Noble’s presentation importantly highlighted that these skills gaps are not only in core engineering competencies, but also crucially in IT – a fundamental part of business today but a subject which is drastically undersubscribed.

Cisco, a partner to Bloodhound SSC says that there are 100,000 skilled IT positions in Europe unfilled today due to lack of skills.

“This is simply not competitive,” stated Noble.

The challenge of supplying the skills needed for today’s and tomorrow’s industry is massive.

But Bloodhound is making serious inroads into addressing it. Just look to the fact that the University of West England, a supporter of the project, has doubled its engineering intake since becoming involved.

Study sessions Following the keynote presentations, delegates at MDC2012 attended a range of more focused conference sessions and workshops which homed in on key issues around business strategy, investment and productivity.

A stream of interactive workshops garnered particularly positive feedback. Peter Robertson, COO of food manufacturer Dailycer UK, said of the Toyota Production System workshop for process improvement, “The best part of this was a breakout to share real experiences. The session gave me some ideas and a structure to proceed.”

In a workshop exploring the use of social media in manufacturing businesses, GE Aviation, the maintenance, repair and overhaul arm of GE’s UK business, was praised

this. It was clear however, that there is a lot more RBS can and should be doing to communicate the opportunities and promote confidence in the fact that companies are already finding solutions to fund investment and source new technologies to further reduce energy costs. I saw a lot of people making notes in these sessions and I doubt anyone went away without having learnt something useful to take back to their business.

With regards to the sessions on finance, I didn’t sense from the questions that there was any more enthusiasm for buy-in or buy-out solutions to growth than there has been for the last few years. No one present admitted to being involved in a MBO or similar. This is indicative of a mindset, particularly in the mid-market, in which businesses are still looking inwards. They are looking at cost cutting, efficiency and maintaining market share as opposed to looking outward for expansion. More MBO activity in the sector would be a welcome indicator of greater confidence and focus on growth.”

In the round Running as fringe events to MDC2012 a number of sector specific roundtable discussions also took place on November 21.

Bringing together sector representatives from trade bodies, government and industry, these round tables provided focussed insight into challenges and potential solutions to industry issues.

The sectors covered were: Automotive, Advanced Engineering, Composites, Food and Drink and Power Generation.

Findings from these round tables will be compiled for a Sector Reflection report and published in February 2013.

Dick Elsy, CEO of the HVM Catapult attended both the Automotive and Advanced Engineering roundtables and said: “These debates were excellent. Input was focussed thanks to some accomplished chairing. I look forward to seeing the reports.” as a leader in this field. GE Aviation uses From the Factory Floor albums to promote staff engagement, and give customers visibility of shop floor processes.

For manufacturers weighing up which social media platforms are worth getting involved in, Danny Bermant of Brainstorm Media, who hosted the workshop, claimed LinkedIn

is 277% more effective in generating business than other social media platforms.

Powerpoint presentations from all the sessions at MDC2012 are available to delegates on the event website: www.themanufacturer. com/mdc2012. Requests from non-delegates to access these assets should be sent to g.gilling@ sayonemedia.com

25

ar f the Ye cturer o Systems fa u n a M Young llagher of BAE a Sean G

New H won olland A T g the Y he Manu riculture fa ear A ward cturer of 2012

lis globa g the nes in s lo in is

by Jo “Brita Lord Dig ” e c ra

ny pa om ped c on scoo egy uti t trib ines Stra s i d W d ne lade ip an i W co sh Ac ader Le

ation

“You don’t know how important you are”

Sian of A Bishop a p Man ex Linva nd Mich a ufac turin r, winne el Rudn r g in iak Actio of the n Aw ard

MDC2012 was followed by the most successful Manufacturer of the Year Awards to date. Over 700 people crowded into the London venue to celebrate the achievements of their teams, their businesses and their industry.

T

he Grange Tower Bridge Hotel was bursting at the seams on the evening of November 21. Cynics about the value or viability of competitive manufacturing in the UK would have been stumped to learn that the 700-odd revelers were there to congratulate themselves and their peers on some striking demonstrations of ingenuity in business, strategy and manufacturing knowhow.

Judges of this year’s awards, many of whom have regularly adjudicated for The Manufacturer,

26

spoke of how conspicuously the calibre of entries had risen – perhaps a proof that necessity truly is the mother of invention and that, in the most trying economic times in living memory, proactive UK manufacturers can defy the odds.

Nick Hussey, managing director of SayOne Media, publisher of The Manufacturer welcomed attendees and gave a good introduction to proceedings.

He observed that those manufacturers who continued to persevere in improving their

the bed grab crown. ls ia r e dust xcellenc en In E Millik ly Chain p Sup

manufacturing processes in the UK and innovating new business models to compete in a post-financial crisis, globalised marketplace were investing in a long term future. “Those companies who moved to China for cheap labour will soon find that they must move on. And they will keep finding that they have to move on,” he said.

Barring the awards presentations themselves, a rousing speech from Lord Digby Jones was the highlight of the evening.

Sailing characteristically close to the wind with his punchy humour, the former trade minister and director general of the CBI allowed no grey areas in defining exactly why his audience are so crucial to the national economy.

“You don’t know how important you are,” he told them as he described how, without wealth creators there would be no taxes, and therefore no money for public services. He argued convincingly

Leadstory The Manufacturer of the Year Awards 2012

All of the award categories at The Manufacturer of the Year Awards highlight the contribution that different business disciplines bring to the success of a company. But there is one which stands proud as a category whose winners have perhaps more influence than any on prospects for economic rebalance and competitive industrial growth: The Young Manufacturer of the Year Award.

BAE Systems’ Sean Gallagher won the Young Manufacturer of the Year, beating fierce competition from sister company and missile manufacturers MBDA (who also won two IMechE MX Awards in November), AkzoNobel, Green Tweed & Co, Honeywell Electrical Systems, and Robert McBride.

The words manufacturers and sponsors used to describe The Manufacturer of the Year Awards 2012 on social media. that business, and manufacturing in particular, is truly the linchpin of our society. But ‘Diggers’ was not all platitudes and predictability. He spoke with insight and urgency on the need to reposition UK manufacturing in “Asia’s century”. He also urged government to push harder in Brussels for a new understanding of the EU’s collaborative potential for boosting business.

Lord Jones, likened the current attitude of EU member states to a team of runners in a race who, rather than riding one another’s strengths to achieve a better overall result, try to break each other’s legs to even things down and claim sole glory. He advised leaders in Brussels to adopt a more open minded approach which leveraged core strengths in member nations – such as the French training system which he pin-pointed for its excellence despite other national weaknesses.

And then the awards themselves Each category announcement was greeted with outbursts of delight as teams who had worked hard throughout the year, took well-earned glee in the public recognition of their achievements.

On winning the top award, Colin Larkin, plant manager at Fiat Group-owned New Holland Agriculture, said: “Over several years, the hard work that I personally and the team have put in has come to fruition.

“This award says that we are recognised as doing really special things in manufacturing, and good things within the UK. Four or five years ago people didn’t know who we were. They didn’t know that our factory in Basildon was producing 25,000 tractors a year.”

Earlier in November, the Basildon plant – which was visited by the Prime Minister in May – won the CNH global group’s coveted Bronze World Class Manufacturing award. Just five of its 15 plants around the world have achieved this standard.

From the whole team at The Manufacturer, massive congratulations to all the winners and

While the others came close, Sean, 22, snuck it with his worksponsored project for a novel but simple medical device, based on a rubber band, that assists with holding dressings together in military theatre. The device has been given patents in seven countries.

Commenting on the importance of his win, and of recognising the contribution of young talent to business, Sean said: “It is the people that breed the ideas in a business, not the hierarchy, and people at all levels can breathe a lot of life into a business.”

Winners at The Manufacturer of the Year Awards 2012 Award Category

Winner

The Manufacturer of the Year Award

CNH UK (Runners-Up: Accolade Wines & Milliken Industrials

Leadership & Strategy

Accolade Wines (Highly Commended Parker Hannifin Manufacturing, domnick hunter Process Filtration Division)

Innovation & Design

Entek International

ICT in Manufacturing

Origin Enterprises

People & Skills

Caterpillar (Highly Commended: Apex Linvar)

Young Manufacturer of the Year Award

Sean Gallagher, BAE Systems, Military Air and Information

Supply Chain Excellence

Milliken Industrials

World Class Manufacturing

CNH UK

Through-life Engineering Services Rolls-Royce SME Manufacturer of the Year (under 125 employees)

Trolex

SME Manufacturer of the Year (over 125 employees)

Tharsus Group (Highly Commended: Vernacare)

Sustainable Manufacturing

Coca-Cola Enterprises (Highly Commended: Premier Foods)

Manufacturing in Action

Apex Linvar

shortlisted companies at The Manufacturer of the Year Awards 2012. We hope the recognition of your achievements this year will buoy you into 2013 and allow you to face its inevitable challenges with confidence in your ability to form deft strategies, apply skills

intelligently and innovate in all areas of your business. Finally, thank you to the sponsors of this year’s event for their generosity and commitment to UK manufacturing. Without your support this justified celebration of British industrial excellence could not take place.

27

Digging out a trade surplus for UK plc

JCB was founded on the day of Sir Anthony’s birth

Big, iconic and privately owned, digger manufacturer JCB has a unique position in British industry. The government wants more companies like it, so JCB’s owner and chairman Sir Anthony Bamford advised to learn from the Germans, bring back the Techs and get on your bike.

“H

ave you got your iPhone 5 yet?” asks Sir Anthony Bamford DL chairman and owner of JCB, adjusting his tie for the photo.

“I’ve just been given one by Jony Ive.” ‘Jony’ or Jonathan Ive, Apple’s British chief designer and personal friend of my interviewee, will receive many endorsements but he would relish this one. “Are you a technofile?” I ask. “Not in the least.

I’m petrified, scared stiff.” A touch ironic, perhaps, given that JCB’s products have won several awards for design and technology.

We are in the plush office of Britain’s preeminent industrialist on the third floor of JCB World Headquarters in Rocester. The view through the floor-to-ceiling glass is stunning; the Staffordshire fields fall away in a rural vista that reminds you of JCB’s simple roots, born in a farm shed in nearby Uttoxeter in the 1940s.

Bamfords was then a well-established agricultural engineering business. Joseph Bamford, Sir Anthony’s late father, engineered an

Sir Anthony’s direct influence on British manufacturing is arguably unmatched.

28

Germany have a trade balance – when was the last time Britain had a positive balance of payments.

The early-80s? That is ridiculous. This matters to the Germans

Interview Sir Anthony Bamford, JCB

early backhoe loading device to an old tractor. His family stuck to simple farming engines which had a proven market, while Joe decided to go it alone, founding JCB on the day his son Anthony was born. Son succeeded father as chairman in 1975, and both man and company turned 67 in October.

Such humble beginnings are a far cry from the global empire it is today. JCB is now the third biggest manufacturer by volume of earthmoving machinery in the world, after Caterpillar and Komatsu. It has 22 factories, 11 of which are abroad. It is the number one brand of construction equipment in India, Sir Anthony’s personal strategy that began in 1978 with his first factory. “In India, we are regarded as an Indian company,” he says.

Sir Anthony Bamford’s direct influence on British manufacturing is arguably unmatched.

JCB employs over 10,000 people worldwide, 6,000 in the UK – more than any other privately owned manufacturer in Britain. He is not answerable to shareholders nor, one

A BIC strategy

J

CB’s strategy is to have a manufacturing footprint in countries with the biggest demand which border other growth markets.

The decision is driven mainly by tariffs. “You really need to “be American” to sell a mundane product – a piece of construction machinery – in America,” says the boss, intensely relaxed and perhaps a little tired. “In India tariff barriers are the reason we are there, in China that is definitely so. We are not outsourcing, as some other companies might, in India we manufacture products sold in Africa, Chinese products are sold in Indonesia.”

In late September JCB opened its latest factory, a $100m facility in Sorocaba near São Paulo with parts supplied by JCB plants in the UK. Prime Minister David Cameron, who opened the plant, said that it would secure British jobs rather than displace them thanks to a 1,000 machine order from the Brazilian government which equates £100m worth of of work for the UK. The Sorocaba plant will supply the the booming Mercusor region and support a construction renaissance in Brazil, spurred by the 2012 World Cup and the 2016 Olympics.

But, “That’s an impetus, not the rationale,” says Sir Anthony. “This is long term; here is a market of a few hundred million people that is expanding. Brazil has had about 17 years of growth with either left wing or right wing governments, and a common financial policy.”

Sorocaba was followed in October by the announcement of a £62m investment in Jaipur, India. Sir Anthony got into India early, beginning operations there in 1978, three years after taking the helm of JCB aged just 30.

Jaipur will be the company’s fourth factory in India. “It was a love affair with India since the 1960s when it was a very basic place – tourism didn’t exist, hotels hardly existed, communications were terrible, one airline covered the country. If a minister boarded the plane you were booted off,” he reminisces.

“When we started in India we made 50 machines. No-one could have foretold the growth. It would be nice to say it was clever of me to spot what was happening there – I didn’t. The population is growing quicker than China. At this moment the economy is in a lull but still growing at 5%.”

Sir Anthony says that JCB is well positioned to access new markets from “major centres” and singles out Vietnam as a growth market accessible by JCB’s operations in Shanghai, China.

The JCB JS360 long reach excavator at the Lancaster Bomber recovery site

29

Defence Secretary gets insight into JCB’s military product range

The man behind the machines

S

ir Anthony Bamford is married to Carole Bamford (Lady Bamford OBE) and has three children and four grandchildren. He is a devoted family man. Famously wealthy and very private, he lists fairly mundane activities of gardening and farming among his interests. Perhaps his most public weakness is his love of cars. Sir Anthony is an avid collector of classic cars and has a fondness for Ferraris. A life-long lover of racing, he still enters his Ferrari GTO, one of the world’s most expensive sports cars, into rallies but doesn’t race the cars these days.

assumes, to banks – only his finance director. And after a very tough recession, sales grew 40% in 2011 and topped £2.75bn this year. When demand allows, he can build a factory where he likes in the world and create jobs. He is an ambassador for UK Trade and Investment, has a keen interest in politics (donating funds to the Conservative Party) and when he speaks on business policy, people listen.

Prime Minister David Cameron invited him to share his views on how manufacturing in the UK can grow. In Sir Anthony’s ensuing report, published in February this year, he pulled no punches, criticising the UK’s policy-making,

George Osborne wants to get to £1 trillion in UK exports by 2020. It’s fine to say that but you have to do the brick-building.

British companies should get on their bikes

30

education and banking systems as being disconnected from the needs of industry.

German lessons In his report, Sir Anthony says the UK should “look towards Germany and follow their approach”. He calls for a greater commitment in the UK to make manufacturing a more central part of the economy and the report’s 10-point plan calls for systemic change in areas like education and banking to provide more deliberate, strategic support for companies that make things.

The report is unashamedly pro-Germany, embracing more family-owned companies, more banks and therefore more competitive finance, devolved power from central government to the regions, and schools that work in concert with companies.

“We can learn from them [Germany],” he says. “Germany has the highest net balance of payments in Europe, perhaps in

There is no point having 29,000 students doing hairdressing or beauty therapy in higher education, when there are fewer than 4,000 jobs available in this field

the world. There are over 1,900 credit institutions in Germany, like the Sparkassen – in a little town like Uttoxeter there would be two or three. They don’t only provide mortgages but actually help businesses.”

He opens up. “There is almost an arrogance that we can’t learn from them. We can, they’re only next door. There has been a common [industrial] policy since the 1950s – Mittelstand helps Mittelstand. The unions are strong but they understand the importance of exports and work with companies. Even the town mayor is heavily involved with local manufacturers.”

He also cites the number of people qualified in engineering and doing engineering training in college as another measure where Germany wins. “[My report] shows how Germany performs against us.

Germans are not Japanese, Germans are Europeans like us, they had a strong currency until they got embroiled in the euro, they have a trade balance – when was the last time Britain had a positive balance of payments. The early-80s? That is ridiculous. But this matters to the Germans.”

Sir Anthony has also pushed for the appointment of a manufacturing champion in government, tasked with building the manufacturing base, in the mould of the job done by Lord Green for UKTI. Is there any progress from Westminster on the pillars of your report? “[On education] It’s a good start, but it would help enormously to have cross-party agreement on 10 things that are important for manufacturing,” he says. “This goes far beyond Vince Cable’s five pillars in his strategy.”

But is there cross-party synergy on these points, could the UK really close the trade deficit?

“Definitely, but only if there is a plan with more meat. George Osborne wants to get to £1 trillion in UK exports by 2020.

Interview Sir Anthony Bamford, JCB

Educating engineers – The JCB Academy

T

he young Anthony Bamford completed an engineering apprenticeship in France and is passionate about the merits of the profession. “Engineers can be anything; atomic engineers, hydraulic engineers, hydro engineers – it’s such a broad church,” he says. “The great thing about engineering is you can practise it anywhere in the world. It is more versatile than architecture or medicine – an engineer is an international commodity.”

Frustrated by shortcomings in the education system, in the early 2000s Sir Anthony decided to create a new school, an engineering academy. The school for 1418 year olds would follow the GCSE and ‘A’ Level national curriculum, but place a greater emphasis on engineering and science disciplines.

He marshaled a group of companies in the greater Midlands region including

Bentley, Bombardier, Toyota, Rolls-Royce and National Grid, got the principal funding from the Department for Education and local council and covered the balance.

This September, 99% of Year 11 students at the JCB Academy received GCSE grades A* to C. The national average for these grades is 68.4%. “It has fulfilled more than I imagined,” says the modest chairman, quick to divert credit from himself to the Academy’s industrial partners. “We have proven that the Academy model works. It is done under the wings of the Department for Education so there is nothing mysterious about it,” he says, to quell any fears that the system is challenging the curriculum.

“But everything the pupils do has an engineering bent to it and that’s my interest. We are not educating people at the Academy to join JCB, we are educating them to be engineers and go on to higher education

That’s fine to say but you have to do the brickbuilding. Someone asked me if British companies should go to Brazil. British companies should get around the world. They should get on their bikes, see if there is a market for what they’re making and get out and sell it.”

Sir Anthony declines the suggestion that he and JCB could play a role here, driving a quasiUKTI trade mission programme for ambitious SMEs. “There are enough organisations. Frankly I’ve got enough on my plate with our own business. But we are a good example, if anyone wants to come and see us and our people about manufacturing, exports and export finance, we are very open.”

Many in industry would like to see this man assume the job of a manufacturing tsar, with a peerage to facilitate this. With a global company to run and emerging markets to help construct that seems unlikely, which is a great pity given his huge achievements and conviction for real change.

A fuller interview with Sir Anthony Bamford including a biography is available at themanufacturer.com.

– either university or into management or higher apprenticeships. Some are coming to us but also to our partners such as Rolls-Royce.”

Why did it get to the point where you had to personally intervene in the education system? “[Ex-prime minister] Tony Blair at the time, for the reasons he thought were right, thought that more people needed to go to university. The target was 50%. When I was young it was more like 20%-25%.

There is no point having 29,000 students doing hairdressing in higher education when there are fewer than 4,000 jobs available in this field. There are lots of imbalances like that.”

Sir Anthony would like to see the UK return to the technical colleges (Techs) that were abandoned in the great university reform. “Derby was one of the best Techs for engineering,” he says. “They have TV ads now that don’t even mention engineering.

We have become debased. It started with Tony Blair’s idea, but then Lord Adonis (former education secretary) realised it wasn’t helping education, and became keen on academies.

The problem, as often the case, is political.

“Local authorities are where education is invested in, but politicians of all stripes don’t like the power of local authorities,” he adds. “The Department for Education would like to divest that power so that schools would report direct to them. Even the curriculum is determined in some cases by the county councils. It should be centrally governed.”

The JCB Dieselmax.

The car achieved 350.092mph to break the land speed record for a diesel powered vehicle

Have your say at www.themanufacturer.com

31

Automate UK and Driving Skills Development in the Workforce are the first in the Future Factory series to be co-located. Each conference will run with a separate programme but will benefit from a shared networking space, allowing for insightful discussion to be shared between conference attendees.

26th February 2013, London

The co-location will allow attendees to benefit from the added exposure created by bringing these communities together to tackle common challenges faced when modernisation occurs.

AUTOMATE UK What is Automation?

It is the autonomous operation of machines or industrial plants and factories by utilising data from sensors to control key output components, such as motors, pumps, heaters and valves.

The state of the machine or plant is monitored by the sensors and compared with the desired state, and a decision-making device, usually electronic, drives the key output components to achieve that desired state. Automation helps to improve the consistency of industrial processes and operations, thus improving overall quality. It also reduces costs by making the process more efficient than labour-intensive alternatives.

By making manufacturing competitive on a global stage, and by maximising quality and value for money, automation helps build employment in a modern economy by enabling a stable manufacturing community and supporting high valueadded jobs in the manufacturing company itself and through the supply chain.

Chaired by: Dr Graeme Philip, Chief Executive, GAMBICA

BENEFITS OF ATTENDING: Understand what cost and time efficiencies can be achieved through automation Manage the process of securing private public finance Understand what human capital changes are required to necessitate automation Learn how automation is essential to compete in world manufacturing Understand how to accurately forecast cost when implementing automation: equipment, time, and people Supported by:

AGENDA 09.00

Welcome and introduction by the chairman

09:05

The spread of automated manufacturing around the world and why the UK has been left behind

09:35

The business case for automation: savings, efficiency, quality and higher safety standards

10:05

Using automation to enable competition on a global scale

10:35

Coffee break

11:05

Planning and implementing automation

11:35

Forecasting the cost of automating manufacturing processes

12:05

Public and private funding for automation

12:35

Networking lunch

13:35

Automation and data transmission and processing

14:05

Automation systems integration to product lifecycle management

14:35

Coffee break

15:05

Small automation solutions for SMS

15:35

Workforce planning and skill redistribution

16:05

Panel debate: Does automation really encourage economic growth and increase employment?

16:45

Closing remarks by the chairman

16:50

Networking drinks reception

18:00

Close

Call Benn Walsh on 020 7202 7485 or email b.walsh@sayonemedia.com

SPONSORSHIP OPPORTUNITIES

The Future Factory Series of events offer an excellent opportunity to raise the profile of your company through direct contact with senior executives working within the UK manufacturing industry across a range of sectors.

To discuss your company’s requirements or for more details please email: sales@sayonemedia.com or telephone 020 7202 4899.

SPEAKER OPPORTUNITIES

26th February 2013, London

Future Factory series features the key decision-makers, professionals and academics in their field. We are happy however to receive proposals from potential speakers who feel they will make a strong contribution to this or other events. Please call Eva Lindsay on 020 7202 7483 to discuss your potential inclusion.

DRIVING SKILLS DEVELOPMENT IN THE WORKFORCE Why is the development of skills so important to the manufacturing industry?

Research conducted by Semta indicates that the manufacturing industry needs to recruit and train 82,000 engineers, scientists and technicians across the UK by 2016, and 363,000 people in the current technical workforce are below world class standards in terms of qualifications, and need to be upskilled.

AGENDA 09:00

Welcome and introduction by the chairman

09:05

Addressing how the changing economy will affect companies skill requirement

09:35

Upskilling – moving from worklessness to sustainable employment

10:05

Linking your talent plan to your business strategy

10:35

Coffee break

11:05

Addressing the barriers to attracting apprentices and entry-level talent

11:35

Increasing engagement with schools, colleagues and universities to promote technical qualifications

12:05

Addressing skill re-distribution as the workforce is increasingly modernised

12:35

Networking lunch

13:35

Developing skills for growth and linking expansion to skills provision

14:05

Emerging technologies and the need for new skills

14:35

Coffee break

15:05

Teaching the teacher: ensuring that trainers continually develop their own skill set

15:35

Assessing the quality of the trainer provider

16:05

Learn how new technologies will affect your personal development plan

Panel debate: Shop-floor to top-floor how do you attract, develop and retain a highly skilled workforce?

16:45

Closing remarks by the chairman

Monitor the success of your training providers

16:50

Networking drinks reception

18:00

Close

Only 9% of the UK workforce, in Semta’s footprint, is aged 16-24 compared to 14% for all sectors. While 14% are over 60 compared to 12% in other sectors and only 21% of the workforce are female compared to 48% in other sectors. In England, only 18% of companies have or offer apprenticeships.

Semta is responsible for 132,000 companies and 1.7 millionstrong workforce that make up the UK’s advanced manufacturing and engineering sectors: Aerospace and Defence, Automotive, Marine, Metals and Electronics, with a total turnover of £289 billion.

Chaired by: Lynn Tomkins, UK Operations Director, Semta

BENEFITS OF ATTENDING: Appreciate the range of development strategies and solutions available in order to stretch performance in your team Understand how to integrate talent management into your business strategy to maximise output

Understand how to get the best out of your human capital

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60 second Interview

Dick Elsy CEO, High Value Manufacturing Catapult

HVM Catapult Locations: Across seven centres including; Advanced Manufacturing Research Centre (Sheffield), Nuclear Advanced Manufacturing Research Centre (Rotherham), Manufacturing Technology Centre (Coventry), Advanced Forming Research Centre (Glasgow), National Composites Centre (Bristol), Centre for Process Innovation (Wilton & Sedgefield), WMG (Warwick) Total committed government funding: Government has committed at least £140m for the period 2012-2017. To date the seven centres have benefitted from around £350m from government. This investment is further leveraged with private sector investment and funding bids for collaborative R&D won in competition Progress on engagement with industry: The three newest additions to the HVM Catapult (Nuclear AMRC, MTC and NCC) have secured over 100 industrial partners.

In addition the HVM Catapult has engaged with around 1000 SMEs in the last year Total number of employees across the HVM Catapult: 700 staff are employed across the HVM Catapult. Future growth is dependent on industry demand for Catapult services and the types of projects undertaken Find out more at: catapult.innovateuk. org/high-value-manufacturing

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: Why did you leave Torotrak and the private sector to lead the HVM Catapult?

I felt it was time to plough something back into the industry which fed and clothed me for so long. The HVM position came up and it seemed ideal.

At Torotrak I had discovered just how challenging it can be to take a leading edge technology from readiness level 4 to level 8.

By comparison my experience of industrialising products at Jaguar and Land Rover was relatively straight forward. : What are your first impressions of working for government?

I am very impressed. There is a great clarity of thinking at TSB from high quality people who are absolutely on message about the importance of industry to the UK. I have seldom come across such a clearly expressed and well thought through initiative as the Catapults. Those I have met in the BIS [Department for Business Innovation and Skills] team are looking for continuity and, no matter what rosette they wear, every politician I have spoken to about HVM has expressed solid support for the Catapults. : How well are the HVM centres doing so far at engaging with industry?

Very well I’d say. We have a lot of big ticket tier one clients in place and there is a community of SMEs building as well. Feedback from smaller companies does suggest that they are finding the different

membership tariffs give them value. Some prefer the payas-you-go model for using the facilities but this can end up being more expensive if they use a centre a lot. We do need to work on accessibility however – not all the centres have the variable tariff options - and another area to work on is how to support cross-centre projects for big clients. : What can we expect of the HVM in 2013?

It’s all about satisfying demand and communicating the value-add being created.

At the moment we are still developing our metrics and exploring ways of recording the centres’ benefit to industry.

‘Lead’ measures will be based on indicators like value of collaborative R&D secured and SME engagement while ‘lag’ measures will include GVA creation and number of jobs created. Progress on these will be reported to the TSB’s oversight committee.

In terms of new facilities coming online the next thing for industry to look out for is the WMG facility for the investigation of energy storage and management. Looking forward – as the other Catapult centres progress there will also be a responsibility for me to support cross-Catapult working. For instance, the Offshore Renewable Energy Catapult could benefit from the composites and large component machining expertise in place at the NCC [Bristol] and the Nuclear AMRC [Sheffield].

Leadership in manufacturing

Masterful It may not take you back to the student days you remember – but a mounting track record shows that a professional MSc with Cranfield University can transform you career opportunities and your business.

S

eptember 2012 marked the tenth anniversary of Cranfield University’s professional MSc in Operations Excellence. Over 110 students have now graduated from the two year, part time course and it has deservedly gained esteem in industry as a rigorous test of talent and a value-add opportunity for employers.

Dr Patrick McLaughlin, programme director for the Operations Excellence MSc explains why it has proved such a hit. “The MSc was the first of a small range of professional masters programmes that Cranfield now offers,” he says.

“These are designed to work for people with busy day jobs and to enable a direct benefit for the business they represent. They focus on the application of knowledge in new and innovative ways and require a level of self management which you will not find on a bachelors degree.”

The Operations Excellence course develops scientific techniques to deliver real productivity gains, asserts McLaughlin. A reality check which is supported by the course structure.

“The course is split into eight modules over two years. These modules include a group study in the first year and an individual thesis in the second year.”

While the other modules last for an intensive one week period of learning on-campus, the other two course segments take place over a number of months and in an industrial setting. They tackle real operational issues which have elicited significant bottom line gains for the companies under scrutiny states McLaughlin.

While the majority of students on the Operations Excellence programme have been budding high-fliers in the aerospace industry, other sectors - including food and drink - now augment the student mix.

Being able to share knowledge and experience with small but varied cohorts sets students up well for the delivery of their deep-dive thesis in the second year says McLaughlin. This study brings the focus of each individual student squarely back onto their own business and weaves their study into the day job.

“The theses that students have produced over the past ten years have tackled a multitude of business issues. Often operational, but also strategic issues.”

Problems around production readiness of design, productivity improvements, health and safety issues

Extending the family Thanks to the success of the Operations Excellence MSc programme, and to meet the changing needs of professionals in engineering and manufacturing businesses, Cranfield University recently added two new courses to its family of professional MScs. The first is the Integrated Vehicle Health Management MSc which examines the application of sensors and sensor techniques for the monitoring and maintenance of assets. “Largely this course focuses on applications for ships, planes, trains and satellites,” says McLaughlin. “But the principles are also highly relevant to static assets such as wind turbines.” The first cohort to complete this course will graduate in the summer of 2013.

The most recent addition to Cranfield’s professional MSc offering is the Through Life Systems Sustainment course. Designed specifically for the fast changing world of maintenance and asset management professionals.

Both these courses have the same modular structure as the Operations Excellence MSc and come at the same cost – almost always shouldered by the employer – of £17,000 for the two years. and how to build a culture which facilitates productivity improvement have all been addressed.

“The course structure, the student mix and the access to Cranfield’s facilities – including its academic staff and through them a wealth of operations businesses – give students a full chance to master the art of the possible in operations excellence,” sums up McLaughlin.

To enrol on the Cranfield Operations Excellence MSc usually requires full time employment and employer support. Students are also largely

required to have attained a bachelors degree in engineering though McLaughlin assures that, on a case by case basis, other qualifications may be acceptable.

“The focus of the course is on the application of knowledge,” he says. “So proven industrial experience is obviously very beneficial. Over the past few years we have taken several students onto the MSc who have arrived with apprenticeship training and no first degree. They have all done extremely well and successfully graduated.”

35

We always hold the supplier accountable but we offer our support and we even make our support mandatory if required Günter Butschek

Demand A and supply Airbus has set up special intervention programmes with its suppliers to ensure that the demands of production rampup do not translate as late deliveries.

Airbus COO Günter Butschek explains the process to Will Stirling.

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irbus has a problem, but a nice one. The aircraft maker has an order backlog for nearly 4,500 aircraft.

Its A320 family aircraft is the world’s most popular single aisle aircraft, with over 8,500 sold. Earlier this year, production rate hit 42 aircraft, the highest production rate for a commercial aircraft ever. And with other aircraft, like the giant A350 also in high demand the pan-European company is in full ramp-up mode.

Like any big manufacturer, Airbus looks for opportunities in productivity and performance

improvement while limiting additional capex.

Therefore much of the burden of ramp-up falls on Airbus’s suppliers. Acutely aware of this, and of the almost irreplaceable status of certain key suppliers, Airbus works closely with them to ensure it hits delivery targets.

Günter Butschek, chief operating officer of Airbus, explains how the company thinks. “We have intensive discussions with our suppliers to make sure that they fully understand their own technical capacity framework and, within this framework, their production improvement opportunities.

“After all,” he continues, “we would like to see some benefit from this volume increase. If our suppliers just automatically translated higher volume into additional capex, the benefits on the cost side [for both parties] would be very limited.”

How deeply does Airbus intervene into suppliers’ capability? The company runs a range of joint productivity improvement activities, sometimes including on-site support from Airbus.

“This is completed before we actually approve any additional investment,” says Mr Butschek.

“We actually go beyond the expectations of the suppliers.

We spend valuable time with them to jointly understand their capacity framework. If we can’t do it any other way then we go for investment.”

While operational support is common, it’s unusual for Airbus to provide financial support to suppliers. Most of Airbus UK’s suppliers are tier one companies of a critical mass.

Leadership in manufacturing

“The base assumption is that our suppliers are in a stable financial condition,” says Mr Butschek.

But the plane manfuacturer does not take this entirely for granted. “[Financial capability] gets intensely discussed and monitored, by a kind of ‘watch tower’. We monitor whatever [financial] information is accessible and available to us, so we get an early warning in case a supplier might experience some financial issues or get into financial trouble.”

If this happens Butschek says a case-by-case decision is made as to what extent Airbus will support the supplier. “There are plenty of opportunities before it comes to the worst,” he states.

But far more suppliers have struggled to comfortably keep pace with the rate increase, than have had financial issues, especially on single aisle aircraft production.

“We carefully monitor the performance of the suppliers. We perform regular audits to gain a deep understanding of what are the weaknesses and strengths – and what is our contribution to the problem?” Butschek says.

Having analysed the specific supplier situation, Airbus sets up a comprehensive set of actions where the ‘problem suppliers’ issues have the most commonality.

A Joint Improvement Programme or project is the most commonly used approach for a specific programme, or where there are certain technical or capacity constraints for a particular component.

“Airbus specialists form a joint team with suppliers, it goes into the details of project, to explore what would drive joint improvement,” says Butschek. “Typically you see a sustainable improvement in delivery performance.”

A Transformation Project is a more severe intervention, launched if major shortcomings in the supplier’s organisational setup – their methods, processes and tools – are identified.

Magellan’s big league investment to keep pace

A

irbus’ interventions with suppliers may stave off capex for themselves by focussing on effieiciency and productivity techniques. But at some point rising demand requires capital spend. Canadian engineering group Magellan Aerospace is one of Airbus UK’s most important suppliers and it is taking the plunge in this area in a big way.

Magellan manufactures the 18-metre wing spars for the popular A320 airframe. It also makes the new Sharklet wing tips for the A320 and central in-box ribs for A350 wings. In July the company, which has facilities in Bournemouth and Wrexham, was awarded a massive £370 million seven-year contract extension for making these titanium and aluminium parts for Airbus UK. The company is preparing for a huge piece of capital investment to cope with its primary customers’ demands. Foundations are being dug for a 22-metre bed, high speed axis spar milling machine from Cincinatti Hypermill, which will be installed by March 2013. The investment, including the long implementation, totals over £4.5m.

Haydn Martin, corporate director of business development at Magellan, says Airbus’s delivery schedule is a little irregular, which makes the investment necessary. “[For the A320] its not 42 sets of spars every month, it fluctuates, and can be more. So we’ve take a decision to invest in this high capacity machine.”

Magellan UK’s growth has shadowed that of its top customer in recent years, with turnover rising from £40m in 2005 to £130m in 2012. “We say we have become a Tier 1.1. We are growing and constantly being challenged, for investment, skilled people and delivery.”

And it is continuously investing in equipment to keep up, says Mr Martin. In the last year or so Magellan UK has bought a big Akuma multi-axis lathe, two Unisign 5-axis CNC machines, specifically to machine new, sharper version of special wing parts for the A320. The Wrexham factory this year has made a £2.5m investment in a DST (Doris Sharman) horizontal milling machine.

Martin says while his company has not needed to enter into one of the Joint Improvement Programmes, they’ve worked with Airbus in other ways. “They have asked us to find partners to take on certain contracts. On the smaller components it’s easy, but with large components; there are sometimes only three companies who can supply those parts in the UK. To go offshore is not a solution.”

Twenty years ago, Airbus UK would have had from eight to 12 suppliers for the type of large structural components that its tier one companies, like Magellan and SPS Technologies, manufacture. Due to the economies of scale of Airbus’s relentless ramp-up, that number is now three. Such demands are good for those companies who can deliver.

Most of these suppliers cannot be easily replaced so intervention is part of risk mitigation for us Günter Butschek

In these cases, rate response difficulties are not just linked to production. “We might talk to a supplier where there’s need of support across the border [in transportation] or at least in more than just one function.”

The solution is similar to before; a support team from Airbus, a dedicated support team from the supplier forming a joint team that work from action plans derived from the findings of a very detailed audit performed with the supplier.

Mr Butschek insists that the intervention is not about seizing

control. “We do not invade the supplier. We always hold the supplier accountable but we offer our support and we even make our support mandatory if required.

Most of these suppliers cannot be easily replaced so intervention is part of risk mitigation for us.” @WRStirling Read more about how the demands of civil aircraft programmes are creating a niche league of responsive, well capitalised ‘super tier ones’ like Magellan Aerospace on themanufacturer.com.

37

Pricing for manufacturing: Holy Grail or just good policy?

A good pricing strategy can drive value and growth. But creating one presents a difficult balancing act for manufacturers. If you’re successfully increasing prices with some customers, chances are you’re losing others. Understanding that dynamic will add an important tool to your competitive armoury.

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ny business can win or lose when it comes to pricing strategy and ultimately pricing policy implementation. But at a time when growth remains scarce and the eurozone has slipped back into recession it is an important area to address. A well managed strategy can stimulate demand, create a value perception with customers and increase revenue.

PMSI Consulting has undertaken a number of pricing strategy reviews for clients over many years, and has found that, in the current climate, their support in this area is becoming more sought after – particularly when it comes to the implementation of a pricing strategy.

Patrick Mosimann, joint founding director at PMSI says, “It’s obvious to everyone that if you can push pricing, you can grow your business. The difficulty is how to manage the value perception with customers, and how to support your front line staff when they’re the ones facing the real pressure during implementation.”

A cost plus ‘x’ versus a customer pricing strategy can drive a focus on costs versus customer relationships.

Understanding this difference from the outset can help you see the horizon you’re facing Patrick Mosimann, Joint Founding Director, PMSI Consulting

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Mr Mosimann goes on to assert that pricing strategies are often defined by the culture of the business. “For instance, a cost-plus ‘x’ versus a customer pricing strategy can drive a focus on costs versus customer relationships. Understanding this difference from the outset can help you see the horizon you’re facing.”

Having said that, continues Mosimann, nine times out

of 10 such nuances can be overcome and implementation supported, through issuing a clear set of guidelines. “Sales staff simply need to know where the boundaries are and how to manage pricing beyond just cost plus ‘x’ which is where you inevitably end up in tough times.”

Pricing in a cold climate Of course pricing during a recession is particularly challenging. For many customers, says Adam Slader, manager at PMSI Consulting, the immediate question wasn’t around how to design or implement a pricing strategy, but how to react to diminishing demand.

“For one customer the question about pricing began with a slow-down in Europe, explains Mr Slader. “They saw a 3-5% drop off in sales revenue across three of their top five markets. But there were no obvious changes in either volumes or product mix at a high level, so understanding the dynamic was our first step. What was really happening?”

With anecdotal evidence from sales staff focused on contracting economies, the first challenge was to understand the actual drivers of this performance and what could be changed within the new economic environment Europe was presenting.

Figure 1: An example of the PMSI VVA™ (Visual Variance Analysis) on performance.

Pricing A number of customers were quickly identified as cutting back volumes, while sales staff were overcompensating on price as a result.

Figure 2: European Pricing Performance Example

Pricing and sales Often competition is where pricing control faces the most pressure, as markets begin to contract and the urgency for share increases. This can drive a change within the wider dynamic of the market as a whole, which can change how pricing and customer relationships need to be managed.

Slader goes on to explain how PMSI set about understanding those pressures as a distinct part of designing the pricing strategy.

“Looking at competitive pressures, there was no clear distinction on specific categories where pricing needed to be addressed as a result,” he says.

“This lead the project team to believe that the downward vicious cycle of price versus volume was not being driven by the market but rather the sales process.”

Pricing is a key tool for the any sales force and understanding how that tool is being used, or should be used, within the economic environment a business is operating in, is vital.

Slader explains what happened next. “A single question emerged from our initial discovery. ‘How are we pricing?’ We needed to understand the gap between customers’ value perception and willingness to pay; how individual sales territories were performing; and collect an overview of the actual behaviours at a local sales team level.”

Through this process the PMSI client was able to begin benchmarking sales performance and drive awareness around pricing policy.

“This is where we were able to begin taking best behaviours and building appropriate pricing guidelines for almost every scenario that a sales rep could find themselves in,” recalls Slader.

“And it wasn’t just the good, it was the bad and the ugly that

The downward vicious cycle of price versus volume was not being driven by the market but rather the sales process Adam Slader, Manager, PMSI Consulting

we were able to learn from. The change management programme allowed all performance levels to be managed upwards.”

Forming a pricing process As a result of its work on pricing with PMSI the manufacturer was able to gain a deeper understanding of the culture of pricing. The most immediate action was to embark on creating a pricing process by integrating: • Basic customer segmentation • European pricing risk models to manage the most extreme price differences • Profitability modelling • And support for rigorous data driven analysis to create and review pricing rules to communicate targets and floors.

Risk and ‘what if?’ scenarios are key in planning pricing changes.

Understanding the potential downsides and upsides to policy implementation can help manage

the impact on the business, as well as the culture.

Furthermore, Mosimann says it is crucial to take the whole business with you on the journey towards a ‘Holy Grail’ pricing strategy.

“Setting out to find the holy grail of pricing success can be a painful process for any business.

There will be losses. However, the key is to obviously get more wins. Easier said than done, of course, but good change management and scenario planning can help communicate the role that not only sales reps can play, but also how to best communicate to customers.”

The answer to the age-old pricing success question won’t be an easy one. The journey is complex and littered with pit-falls.

Starting the journey can also be a difficult decision to make, but with economic pressures continuing to change the way business is done, it is sometimes a decision that is made for us.

Have your say at www.themanufacturer.com

39

Take steel – the report says that imposing circular design models for recapturing products and materials at end-of-life could release 100 million tonnes of iron ore globally by 2025.

But while creating closed loop systems for products such as cars, washing machines and even buildings has massive potential, creating such systems will require radical changes in design concepts and business models.

For manufacturers in some other sectors, the opportunity is far more immediate and is supported by a fast growing manufacturing subsector – plastics recycling.

An economic diamond in the rough

A storage silo for recycled PET pellet

Waste or

resource?

What potential does recycling have to support manufacturing risk mitigation and boost the UK’s economy?

F

rom oil-based plastics to minerals and rare earth metals, price volatility and availability of many raw materials are putting pressure on manufacturers of a huge range of products.

Yet many have not grasped existing opportunities to relieve themselves of these burdens by simply reusing the materials which they – and others – have already bought and sold.

There are massive opportunities for manufacturers to reduce risk and increase visibility of input costs through creating closed loop product cycles - wherein materials and products are perpetually

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recycled. There is also huge scope for the economy to benefit as new subsectors of manufacturing accommodate closed loop product systems, creating employment and reducing geo-political risk exposure in accessing certain raw materials.

A report, Towards the Circular Economy, commissioned by the Ellen MacArthur Foundation and published by McKinsey in January, identifies potential annual net material cost savings of over $380 billion across a selection of EU manufacturing subsectors.

How? By moving their products to closed loop cycles.

The plastics recycling membership of the British Plastics Federation turns over in excess of £226m a year and employs around 2500 people. The UK is also home to the world’s largest postconsumer plastics processing facility, EcoPlastics in Leicestershire.

EcoPlastics’ £40 million turnover operation processes around 150,000 tonnes of plastic every year. This has required £30 million of investment in automation (p60) to date and supports the employment of 160 people on site.

The mixed plastic feedstock for EcoPlastics is sorted, cleansed and processed to remanufacture several plastic base products, most commonly recycled PET for use in the food and drink industry.

EcoPlastics even hosts a £15m joint venture extrusion facility with Coca-Coca Enterprises to protect consistency of access to quality recycled PET for the bottling giant.

Other grades and types of plastic produced at the site (including recycled clear and coloured HDPE and mixed polyprothene) finish up as products as diverse as piping, wheelie bins and plastic bags. EcoPlastics CEO Jonathan Short says that he expects these applications, particularly piping, to grow as a proportion of his total business in the next year. The firm already supplies two piping manufacturers in the UK and more in Europe. It has just signed a new contract in this sector worth around £3m a year.

And EcoPlastics is not the only plastics processor on the rise.

Yorkshire-based R3 Products started making substitutes for concrete and wood construction products from recycled post-commercial plastics last year and was the UK’s biggest manufacturing start-up in 2011. Its early success has since attracted more investment from specialist equity firm Iona.

But despite displaying several rising stars with hi-tech capability and financial backing, Mr Short says the UK plastics recycling industry is hamstrung by government policies that incentivise the export of waste. These give no regard to the reclamation value materials gain once they exit the country.

Leadership in manufacturing

The pain of PRNs The guilty legislation is the system for issuing Packaging Waste Recovery Notes (PRNs) and Packaging Waste Export Recovery Notes (PERNs).

PRNs and PERNs were introduced around 15-years ago with the admirable intention of ensuring packaging producers paid for the development of recycling infrastructure to deal with their waste.

But the government’s approach does not support a level playing field for UK plastic processors and is holding back the development of recycling infrastructure in the UK, Short asserts. “The government subsidises the export of waste plastic – and that is lost business to me.”

Restrictions put on UK plastics processors incentivise the export of waste – or raw materials from EcoPlastics point of view.

Under existing laws plastics processors in the UK can only issue a PRN – which packaging producers are obligated to buy – if they are seen to produce a finished product. To claim this, they must satisfy a long list of requirements to the Environment Agency including; certificates of conformity, invoices, delivery notes and confirmation of product specifications from both EcoPlastics and its customers.

With no such requirement needed for exported plastics and with UK PRN prices becoming massively inflated this year, packaging producers are far more likely to send their waste abroad, says Short.

“The PRN system is full of good manufacturing best practice which I have no objection to,” says Short. “But a man with a van can take a tonne of waste – which may be dirty, contaminated and with no quality checks – put it in a box, export it and generate a PRN for the producer. That is not a level playing field and it is holding back the expansion of the UK recycling industry.”

Short calculates that around 300 jobs in the plastics

Resource efficiency: New designs for a circular economy The bigger picture for a closed loop economy is under scrutiny.

A competition run by the Technology Strategy Board hopes to encourage business-led collaboration on new designs which reduce reliance on strategic materials and challenge our acceptance that products have to go through a ‘disposal stage’.

The competition is backed by a £1.25m fund and has just accepted its first submissions. Another round of applications to the competition will be held in February 2013.

The competition is being supported by a campaign from the Royal Society for the advancement of Arts Manufacture and Commerce (RSA). The Great Recovery aims to raise awareness of the requirement for “design for disassembly” which, the sponsors hope, will grow alongside interest in closed loop product systems.

The campaign will run for three years and will include research into how service design models, systems thinking and continuous professional development resources can help the design community collaborate with industry better in the advancement of a circular economy.

The government subsidises the export of waste plastic. That is lost business to me Jonathan Short, EcoPlastics

processing industry and 450 jobs in the supply chain could be created if the UK retained the 200,000 tonnes of postconsumer plastic currently exported every year from Britain.

Jonathan Short is not the only one to protest at the unfairness in the current PRN system. The British Plastics Federation’s Recycling Group is pushing for reform as is the Royal Society for the Advancement of Arts, Manufacture and Commerce (RSA) as part of a wider campaign supporting progress towards a circular economy (see box).

“The government’s most recent waste strategy was poor,” says Sophie Thomas, co-director of design at the RSA. “It was a very safe strategy which did nothing to incentivise a change of perspectives about how waste is viewed as a raw material or how the opportunities available through reprocessing waste are acted upon,” she says.

EcoPlastics will deliver a presentation on its use of automoation technology at TM’s Future Factory: Automate UK event on Febraury 26. See p60 for more.

ECO Plastics’ sorting facility See p60 for more

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Steel

yourself for change Jane Gray talks to Nicola Guest, marketing manager at scrap merchant Alchemy Metals about recent changes in scrap dealing regulation and the vast opportunities for manufacturers to reap more value from their scrap.

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he UK scrap metal processing industry is officially worth around £5 billion per year. But in fact, this is just the tip of the iceberg when it comes to the true value in metal scrap that has been used to change hands without trace.

Bad practice is consistent in the sector, both from unregistered and registered dealers and is made easy for those so inclined by out of date legislation and cash transactions.

Nicola Guest, marketing manager at Alchemy Metals, a fully registered scrap metal merchant

Scrappy segregation limits the value of scrap metal

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based in Hertfordshire, says that cash payments are generally agreed to have accounted for £1 billion per year of the transactions passing through many scrap metal merchants – but no longer.

As of December 3 paying cash for scrap metal is illegal. “Twenty per cent of business will change because of trading difficulties due

to the enforcement of traceability and accountability,” says Ms Guest and, she asserts, “it is about time”.

In recent years Alchemy Metals has become a vocal campaigner for alterations to the 1964 Scrap Metal Dealers’ Act which, it claims, fuels the laundering of scrap metal and exploits the industry’s customers.

Leadership in manufacturing: Managing scrap metal

Last month Alchemy played host to Damian Green, Policing and Criminal Justice Minister, to lobby and help raise awareness about malpractice in and around scrap metal trading. And this is just the latest in a long string of television and radio broadcasts, which Alchemy has participated in over the last 12 months. The Minister commented: “People who deal in stolen metal are criminals, pure and simple. That is why we’re putting a stop to cash payments and imposing heavier fines on anyone who breaks the law.” But new laws must be supported by effective enforcement admitted Mr Green before commending the achievements that police have already made in cracking down on metal thieves and fraudsters. “Through the work of the National Metal Theft Taskforce and the partnership work of Operation Tornado we are now seeing significant reductions in metal crime.”

It is activism from Alchemy Metals and like minded parties which has brought on a full review of the 1964 Act and in November the new Scrap Metal Dealers Bill had its third reading in the House of Commons. The Bill entered the Lords on November 30 with Baroness Browning taking it through the House on behalf of Richard Ottaway, MP. It is hoped that all final stages necessary for the Bill to pass into law will be completed by February 2013.

New Scrap Metal Dealers Bill The new bill will: Introduce a ban on cash payments for scrap metal Oblige scrap metal dealers to verify photographic ID of sellers at point of sale and to record transaction details, retaining records for two years Oblige all scrap metal dealers to gain a license from their local authority. This will have to be renewed every three years Give local authorities the power to refuse and revoke licenses In partnership with the police, local authorities will receive greater powers to act against unlicensed metal trade by using court orders to close premises down Punitive and unlimited fines may be imposed in cases of persistent unlicensed metal trade or where other illegal activities are proven Make available a public register of all licensed scrap metal dealers

A turning point Alchemy Metals believes the new Bill and the banning of cash payments, which has already been implemented to be major steps forward in regulation of the scrap metal industry – though it warns it is only the start of a journey.

With the introduction of mandatory electronic payments for scrap will come the ability to more easily audit and keep records of payments.

Other revisions to the 1964 Scrap Metal Dealers Act will increase police powers to close down unscrupulous merchants, both registered and unregistered.

Guest welcomes this warmly. “Scrap metal needs a clear audit trail if we are to crack down on metal theft,” she says. “Metal thieves are brazen at the moment. Just last week a customer of ours – an aerospace manufacturer – had an individual with a lorry turn up at the gate, claiming to be their metal merchant arriving to collect their scrap. Our customer then proceeded to take the individual through their extremely high security works to the scrap,” exclaims Guest.

“Fortunately for them somebody realised in time that the con artist was not their merchant and he was escorted off site. But others are not so lucky.

This sort of thing happens all of the time.”

Indeed other examples of fraudulent activity among scrap merchants are even more underhand – even including examples of manufacturers being scammed out of revenue from their scrap by trusted business partners over the course

Scrap carbide has a value of £12-£17 per kilo

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Need to Improve your Waste Metal Management?

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Quite simply you will get from us the best scrap metal service you have ever experienced.

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From December 3rd 2012 it became illegal to pay cash for scrap metal

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Manufacturing Leadership: Managing scrap metal

of decades. Guest gives the example of a manufacturer who found that, over twenty years, their metal merchant had been inventing weights for the scrap they sold him. The merchant claimed to be using lorry scales to measure the amount of scrap in each skip load – but it was finally discovered that the lorry did not posses any scales.

Over 20 years the manufacturer estimates that hundreds of thousands of pounds were lost to the fraudulent dealer. The company is now conducting an internal investigation into how the scam was able to carry on for so long. There are suspicions that staff were paid off to turn a blind eye to the activity.

Alchemy have uncovered many such occurrences and stories like these show just how badly the UK is in need of better regulation when it comes to scrap dealing.

But Guest says the authorities must show a firm hand in applying new powers if they are to instil confidence in commercial bodies to report metal theft and fraud.

“It is officially estimated that the UK loses around £1 billion a year through metal theft,” says Guest. “But we believe the real figure may be a lot higher as many thefts still go unreported.”

Guest asserts this is due to despondency and a lack of confidence in police ability to bring the perpetrators to justice.

“Some manufacturers also fear that by reporting a theft they will only publicise themselves as a target,” continues Guest.

The new Scrap Metal Dealers Bill ticks all the theoretical boxes in laying out its tactics for regaining confidence and truly addressing criminal activity in the scrap metal industry.

With rigorous implementation Guest says that manufacturers should see greater opportunity to transfer their scrap into value on their bottom lines while respectable merchants will gain a greater share of legitimate trade, boosting the scrap industry’s recorded contribution to GDP.

Sort it out!

And get value on the bottom line.

S

Metal needs a clear audit trail if we are to crack down on metal theft Nicola Guest, Marketing Manager, Alchemy Metals

crap metal can hold immense value as a tradeable commodity. But this is often overlooked by manufacturers who tend to concentrate more on maximising efficiency in processes to reduce waste, rather than on how to maximise the value of it when it exits the factory.

Ms Guest hopes that new levels of traceability, encouraged by the banning of cash payments, will help manufacturers realise the value of their waste metal - and treat it accordingly.

“We understand that it is not a top priority with manufacturers,” says Guest. “But income from scrap metal sales goes straight onto the bottom line – and if you take materials like carbide, that value can be very significant.”

Alchemy Metals has recently invested in capital equipment for recycling and processing used carbide tips from machine tools.

Guest says, “Big companies will spend around £1.5 million to £2 million on these parts every year. They will invest in stock dispensing automation so that they can track how many tips are being drawn down – but incredibly they often have absolutely no traceability of how the used tips exit the factory.”

This is a massive blind spot considering the substantial value of used carbide tips and inserts.

“We have seen cases where staff have been pocketing the used tips to sell on, or where they are simply placed within the general scrap bin” says Guest. “Cumulatively, this means employers are losing out on a significant revenue stream” Another example of missed opportunity when it comes to managing scrap and maximising its value is obvious in manufacturers’ reluctance to spend time sorting their scrap.

“We can provide secure sorting containers suitable for both internal or external locations,” comments Guest. “We will visit a customer’s site and see what is most convenient for them. And yet most manufacturers still see sorting their scrap as a hassle.”

It is their loss. Guest explains that scrap metal often falls into a variety of grades and qualities – for which scrap merchants are willing to pay widely varying prices. Top quality scrap is often worth several hundred pounds more per tonne than its lower grade cousins – but only if it is segregated before it reaches the metal dealer. If not – then a bulk price relevant to the lowest grade scrap included in the sale will be offered.

Some of the worst offenders for non-segregation and lost value to manufacturers are stainless steel and aluminium – commonly used metals in many sectors, including automotive and aerospace.

Stainless Steel 316 grade is worth around £500 per metric tonne more than stainless steel 304 grade – but the two are often lumped together for sale to scrap metal merchants who buy the lot at the 304 grade price.

The case is similar for aluminium which has a wide range of grades which go from around £600 per tonne to £1100 per tonne. With appropriate, secure sorting containers in place there is little excuse for manufacturers not to sort their waste metal. “A manufacturer will always know what grade metal they are running a machine on,” says Guest. “Not to do so would be a costly exercise. So training staff to sort scrap should be as simple as matching the schedules machine grade of metal with the appropriately labelled container.”

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Fox Brothers is cut off from the provision of specialist weaving skills due to its location in the South West

It’s good to share Imagine a company divided from its sector hub, manufacturing a product in an area with few peers, in an industry largely perceived to be in national decline – yet determined to forge a future for itself through reviving investment in technology and skills.

S

uch was the case at Fox Brothers & Co just three years ago before a change in management breathed new life into the two hundred and fifty year old manufacturer of woollen and worsted fabrics.

A not inconsiderable influence in the company’s revival has come thanks to investment from Dragon’s Den star Deborah Meaden, now a Made in Great Britain Champion and joint owner of Fox Brothers. She saw

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potential in the SME and was moved by a fear that Britain would lose traditional capabilities in industries such as weaving if companies like Fox Brothers were allowed to go to the wall.

She, and company management, were keen to reanimate investment in apprenticeships to ward off this danger.

But despite its long heritage, Somerset-based Fox Brothers is not located in an area well recognised for textiles – and it therefore sits in something of a

The way [the apprenticeship scheme] has evolved has really cemented the relationship between our two companies and improved knowledge on both sides about the process map from yarn to finished product Sarah Hicks, Operations Director, Fox Brothers

weaving skills hinterland where none of the local colleges supply specialist courses.

To add to the challenge, management at Fox Brothers desired something more from their training investment than technical weaving skills. They wanted a scheme which would develop individuals with forward thinking and creative business skills who could help the company face industry challenges in the future.

It seems an incompatible set of requirements. But through luck and hard work Fox Brothers has created a scheme which overcomes its disadvantages and is proving highly valuable to the business. The key in the equation has been to partner for delivery of the scheme with its customer, British fashion and lifestyle brand, Jack Wills.

Collaboration With the decline of textiles manufacturing in the UK Jack Wills had become increasingly interested in the production processes at its British suppliers says Sarah Hicks, operations director at Fox Brothers. “Just over eighteen months ago they approached us with an idea for sharing an apprenticeship scheme. The way it has evolved has really cemented the relationship between our two companies and improved knowledge on both sides about the process map from yarn to finished product,” she comments.

This mutual will to understand and improve the supply relationship between Fox Brothers and Jack Wills has been a driving force behind the shared apprenticeship scheme – which has just produced its first fully fledged employee: Robert Kennedy.

Under the shared structure the apprentice is officially registered as an employee at Fox Brothers where the majority of the training takes place (see box). However, while he sits on the Fox Brothers pay roll, Jack Wills supports the cost of employment.

Workforce and skills

Outside the box

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onventional thinking around apprenticeship frameworks includes day release for training at a local college as a standard feature. But Fox Brothers, relatively isolated from much FE provision, and certainly a long way from its sector hub in Yorkshire, needed to find a different solution for the non-workplace aspect of its apprenticeship scheme.

Luckily, Ms Hicks was aware of Yeovil College from a previous role. “It’s an innovative and flexible provider,” says Ms Hicks. “Instead of our apprentice having to travel a significant distance on the unreliable public transport system we have here in the South West, they agreed to come here weekly and deliver all of his training on-site.”

In addition, although Yeovil College had no standard training package for the weaving Helena Feltham, HR Director at Jack Wills explains why the arrangement works for them. “It is important that we continue to work with our suppliers so that we understand how they operate and this scheme offers the chance to support knowledge sharing as part of Rob’s development.”

Ms Feltham continues, “We are pleased that Rob has chosen to stay with Fox Brothers and we are delighted that the insight gained during his time with Jack Wills will enable him to work closely on our product lines there.”

In addition, part of Mr Kennedy’s apprenticeship included a project to find ways of improving aspects of the supply relationship and collaboration between Fox Brothers and Jack Wills. “We are now working with Fox Brothers to make sure that we continue to track the benefits of our investment in this exciting apprenticeship scheme,” says Ms Feltham.

The expectations of both parties involved in this shared scheme have had to be flexible and much has depended on Rob Kennedy’s own developing ambitions. Ms Hicks admits that this held something of a risk for Fox Brothers. “We were

industry, they were able to take the structure of the well known Performing Manufacturing Operations NVQ and tailor it to Fox Brothers’ requirements.

Because of the bespoke nature of the scheme, and because the selected apprenticeship candidate was a post-graduate student, there was very little funding available to support this relatively expensive training structure.

But again collaboration with Jack Wills helped make ends meet.

“Yeovil College found us what subsidy they could and then Jack Wills and Fox Brothers paid fifty per cent each,” explains Ms Hicks. Overall the training – spread over one year – cost £1000.

“We would have gone ahead with training Rob [Kennedy] even if we had not been partnering with Jack Wills on this programme,” continues Ms Hicks. “He was such a high calibre candidate that we would have wanted to retain him. But the help from Jack Wills meant we were able to take on three apprentices last year. Rob and two others on the scheme we run independently.” aware that our manufacturing environment was not as glamorous as that offered at Jack Wills – a top UK fashion brand,” she accedes. “There was a risk that when Rob went to them on secondment he would find it a

more attractive career prospect.

But that is just a risk that you have to take as a business. Our approach is always to make clear that our apprenticeships offer progression – a permanent role – if the trainee wants it.”

You are not alone Finding that a local college or training provider does not provide the courses a single company needs for staff development is a common frustration – particularly for SME employers. But it is not a new frustration, nor one which has been left unaddressed.

In the 1960s GTAs – Group Training Associations were formed under the Industrial Training Act to support groups of employers who did not have the capacity to deliver skills training programmes by themselves.

Despite many alterations to the skills landscape, GTAs still exist today. There are 40 in England with over 10,000 employers supporting them. GTAs are strictly employerled and governed, not for profit organisations. The huge majority are dedicated to supporting the delivery of quality engineering training.

The Midland’s has a particularly strong representation of well established GTAs, including Training 2000 – England’s largest GTA – which recently helped establish a joint apprenticeship training scheme for Rolls-Royce and telecoms technology company TTG in Derby.

Robert Kennedy is the first employee at Fox Brothers to emerge from its shared apprenticeship scheme with Jack Wills.

To find out about the work being done to spread understanding and of GTAs and grow the employer led network see our interview with GTA England CEO Mark Maudsley at www.themanufacturer.com.

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A training

template Sarah Sillars, the new chief executive of Semta, the sector skills council for science, engineering and manufacturing, highlights an example of best practice in addressing a potentially devastating skills gap.

M

rs Sillars knows more businesses need to be made aware of and benefit from the expertise of the organisation she now heads.

She joined Semta after leaving her role as executive chair of the Institute of Motor Industry and so is well versed in the challenges facing companies in the UK. “I am delighted to join Semta at such an important time for the organisation,” she says. “We are in a changing skills landscape where employers have the opportunity to shape provision and co-invest in the design and delivery of vocational training.

“Semta is well-positioned to make a real difference to the sector’s productivity and competitiveness with a range of targeted services and programmes.”

A striking example Mid-sized manufacturer Autotech is a case in point and its journey has particularly struck Semta’s new CEO. Andy Robinson, chief executive of Autotech, recently had to turn away around £10m worth

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of business that went abroad because he couldn’t get the right skills or the right people. He knew his company had to do more to grow its own talent to capitalise on these opportunities, and needed help to kick start the process.

Until last year he had never even heard of Semta. Now his company has a fruitful partnership, which is starting to make a real difference to the business.

“I attended the Automated Britain event where Semta’s UK operations director Lynn Tomkins was speaking,” he said. “She was telling the audience many wonderful examples of the big companies like BAE and Jaguar Land Rover that Semta are working with.

“She also mentioned work with SMEs so I grabbed her

afterwards and asked given that she was working with some of our key customers and that we had very similar issues why had we, the largest independent control systems company in the UK, not heard of Semta?”

Since then Autotech has been exploring ways of building further on this early success.

Mr Robinson believes “the partnership can only grow stronger from here.”

Working with Semta, Autotech drew up a structured approach to recruitment and development which saw 70 young people tested and interviewed.

In October the first 21 recruits entered the newly-created Autotech Academy to be trained to meet demand from clients in

Workforce and skills

Semta is responsible for 132,000 companies and a 1.7 millionstrong workforce that make up UK advanced manufacturing and engineering including aerospace and defence, automotive, marine, metals and electronics.

However, 363,000 of the current technical workforce are qualified below world-class standards and 14% of the sector’s workforce is aged 60+. Just 9% are aged 16-24 compared to a national average of 14%. £1,000 grants are currently being offered to SME’s who recruit an unemployed graduate for a minimum of 12 weeks.

For further details please contact Semta Customer Services on 0845 643 9001 or visit www.semta.org.uk

automotive, logistics, airports, food & beverage, metals, utilities, oil & gas, mining & aggregates and power generation industries.

Semta will help deliver the Advanced Apprenticeships, Higher Apprenticeships and Graduate Programme offered by the Autotech Academy.

Mr Robinson said: “Apprentices are essential to our future. We always took three or four on every year but I felt we needed to do more, to do something on a much bigger scale.

“I want to be in a position where 10% of the workforce are apprentices,” he continues.

The academy initiative has taken Autotech to about 8%.

“It has not been easy – it requires investment, restructuring and commitment,” warns Robinson. “But it is the right thing to do, if we are to sustain our business growth of more than 20% year on year.”

The Autotech Academy will provide structured training to fast-track both school leavers and graduates. It will bring high calibre engineers into the business to ensure it can continue to expand. It will also give young people nationally

I want to be in a position where 10% of the workforce are apprentices Andy Robinson, CEO, Autotech

recognised qualifications and transferable skills in addition to a proper salary in a cutting edge technology business.

“Without Semta’s involvement, we couldn’t have got this far,” asserts Robinson. “We wouldn’t have known how to use the different skills, techniques and funding initiatives available to support our aspirations.”

Based in Silsoe, Bedford and Birmingham, Autotech acquired Igranic Control Systems and PSJ Fabrications earlier this year to form the Automated Technology Group.

The group with a combined turnover of around £35 million now has more than 350 engineers and technicians with a wide range of skills, including welding, fabrication, electrical engineering, mechanical design, software/ robot programming, electrical assembly and installation.

Robinson likens his business to the inside of a computer – not being the visible brand but providing the vital component to help the systems people encounter every day run smoothly.

“Whether it be at Heathrow’s Terminal 5, Jaguar Land Rover, BMW, Cadbury’s, Amazon, Asda, Scottish Power or Thames Water, wherever, we are helping to make their systems work to the maximum potential,” he said.

He is now working with Semta to recruit five graduates and is very interested in the innovative Advanced Skills Accreditation Scheme that will allow him to put employees with

no prerequisite qualifications to study individual Masters level modules that are applicable to his business which will help him upskill his existing workforce.

Spreading the word Sarah Sillars believes the work of Autotech should help convince others to engage with Semta and design solutions for their own business - which will, in turn, help the sector and the UK economy as a whole.

“ATG’s academy is an excellent example of how SMEs can respond to the skills challenge,” she said. “We are delighted that ATG has taken on 21 apprentices this year – 8% of its workforce – who we will support through a combination of on-the-job training and technical learning to acquire the skills, knowledge and confidence required for a successful career in engineering.

“Semta research indicates that to deal with retirements alone, industry needs to recruit and train 82,000 engineers, scientists and technicians across the UK by 2016 and 363,000 of the current technical workforce are qualified below world class standards and need to be skilled up.

“Under my stewardship we will work even harder to make it easier for employers of all sizes to take on apprentices - from securing quality candidates to developing the frameworks that truly add value to businesses.

Our work with ATG is an excellent example of this in action.”

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Workforce and skills

Kids rule OK Scarborough shows the regions how to run schools outreach for engineering

In just its third year Scarborough Engineering Week has grown from a small parochial event that attracted 400 school kids to a champion exemplar of how educationalengineering outreach events should be done in the regions.

“H

EY!” a 12-year old girl shouts in to a decibel meter at the Castle Group stand, while behind more children watch how a Fanuc pick-and-place robot moves small parts precisely.

Their peers swarm over a Formula 1 car, quiz the technician about a tube-bending machine made from Lego Technic while other kids try operating the robotic arm taken from a subsea roving device.

Companies gave their time for free to show what engineering means to 1,400 school children over three days in October at Scarborough Engineering Week.

“I feel that I have learned more about science and engineering today than in all of my lessons.”

“I thought engineering was dirty and underpaid before the event, now I know it’s a lot cleaner and there are well paid opportunities.”

“It was epic.”

These are a random selection of comments from some of those school children who visited this inspiring outreach event on the North Yorkshire coast.

The brainchild of two local businessmen – Alan Pickering, MD of tube bending machine manufacturer Unison and Peter Wilkinson who runs a local recruitment company – Scarborough Engineering Week was designed to show young people what engineering companies actually do and, in time, inspire them to pursue careers in this field. The event may therefore, act as a talent feeder for a region largely overlooked by qualified engineers and its success in capturing the attention

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of schools makes it a valuable template for other regions with skills challenges.

The festival pulled in 400 visitors in its first year, 750 visitors in 2011 and 1,400 visitors this year. “We hope very much the show will continue on this trajectory,” said the euphoric Peter Wilkinson while Alan Pickering commented, “Scarborough is a little like an island cast off from the mainland when it comes to recruitment.

The quality of life here is high but it is a long way from Hull and York and it is not easy to compete on salaries with some companies further south.

Attracting this many visitors is a huge achievement.”

Now organised by the Scarborough Ambassadors Forum in conjunction with Scarborough Borough Council and NYBEP (North Yorkshire Business and Education Partnership), the 2012 event was well supported. Local employer York Potash, which is building a new mine in the area, was headline sponsor while a host of companies including Fanuc, Moog, Festo, Plaxton and Siemens supported the event directly.

Twenty-five exhibitors filled the regal venue of the Spa Grand Hall on the seafront, fully restored to its Victorian glory in 2011 at the cost of £10 million.

New exhibitors this year included North Sea Winches, Firmac, Atlas Ward – makers of the London 2012 Olympics’ iconic Orb tower – and F1 in Schools.

A full scale model of the Bloodhound SSC was also on show – though it raised its own engineering challenges for the event organisers. Problems manoeuvring the car, which weighs over three tonnes, into the venue prompted local coach building company Plaxton to fabricate a tailor-made cradle to hoist the car into the building on the eve of the exhibition.

Looking forward, Scarborough will need to exploit this kind engineering excitement for all it is worth. The region is expecting the demand for technical skills to increase greatly when York Potash sets up in the town next year.

US oil company Aramco has also been courting for skilled workers in Scarborough, Whitby and the north Yorkshire coast, as it plans for further North Sea oil development.

f o e e y o l Empmonth the ber 2012 m Dece

Josh Brough Production engineer, Siemens Industry A government select committee review of apprenticeships was published in November which called urgently for an elevation of the status of apprenticeships to become par with university education. Siemens, along with many other manufacturing companies, has long held this belief and here Josh Brough, now a production engineer at Siemens Industry explains why being accepted on its apprenticeship programme enhanced his career expectations.

What is your role and responsibilities?

I’m based at the Siemens plant in Congleton and as a production engineer my role is to support the production team as a whole. The role requires innovative problem solving and great teamwork – sharing expertise among the team enables us to tap into a huge wealth of knowledge.

What personal characteristics help your role?

I’m very hands on. I like being able to learn as I go, picking

CV in brief: Josh Brough Age: 21

Employment:

September 2008 – Present Siemens Industry

Education:

South Cheshire College, FdEng Engineering (Electrical / Electronic)

Interests:

Music, singing and playing the guitar in an acoustic band Sunday league football and going to the gym

up tips and advice from experienced engineers and working with them to solve challenges. I’m also quite independent and like being given the responsibility of coming up with my own ideas.

What do you consider to be your biggest personal success in your career so far?

Although it was at the very beginning of my career, being accepted on the Siemens apprenticeship programme was an extremely proud moment for me. I’d always been interested in engineering, but knew that an apprenticeship with a company such as Siemens would involve a competitive recruitment process and so when I was offered the role I was over the moon. The programme allowed me to learn on the job for three years while also completing a foundation degree. There is no way I would be in the position I am in now without being given the opportunity to learn the ropes as an apprentice.

What are the most rewarding parts of your job?

I can honestly say I’ve never had a bad day. Through my three-year apprenticeship and now as a production engineer I’ve learnt something new every day. I’m really proud of my work. Being able to use my ideas to support the production line is really rewarding.

What first attracted you to a career in manufacturing?

While at school, I spoke to one of my teachers who had previously been an engineer. He gave me a bit of an insight into what it was all about. After leaving school I was keen to start earning and so began work repairing mobile phones. I really enjoyed the job but wanted to get some more experience, and also gain some qualifications.

What will your next career move be?

I finished my apprenticeship in September 2011 and was offered the role of production engineer. At the moment, I’m happy building on the skills I learnt in my apprenticeship and taking on more responsibility on the production floor. My career ambition however, is to be the head of an engineering team. I would like the responsibility of being a team leader but I’d still want to remain hands-on.

What is the best way to get more young people interested in manufacturing?

I think the image of manufacturing and engineering needs to be improved. A lot of school leavers don’t know what the job opportunities are, and I think the sector as a whole can be viewed quite negatively when compared to other career routes, such as those in the professional services.

There are some real opportunities to be successful in the manufacturing industry, and young people just need more advice as to the possibilities available to them, and to hear from past apprentices like me about why this career path is so fulfilling.

Have your say at www.themanufacturer.com

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UTC Diary

UTC Diar

Bill Williams, CEO of the Centre for Engineering and Manufacturing Excellence – the location for a new University Technical College – puts out a plea to employers.

Calling all CEO’s and MD’s your industry needs you!

In May of 2012 the University Technical College in East London (ELUTec) was approved by the Department for Education. Its partners, University College London, CEME and Prospects Learning Foundation immediately got to work on planning the detail for a successful opening in September 2014.

ELUTec will be based at the impressive CEME business and skills campus in East London and will specialise in manufacturing, engineering and product design alongside the national curriculum.

There are two unique aspects to a University Technical Colleges. One being the sponsorship by a University (UCL is one of the top 5 engineering Universities in the world).

The second defining feature is the opportunity for employers to develop a deep involvement with the UTC in the development and delivery of the curriculum. For many years, if not decades, employers have frequently criticised the lack of opportunity to bring their influence to bear in shaping school curricula and, as importantly, the way in which teaching is delivered.

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Engagement in development gives employers the chance to ensure that the skills students learn while at school equip them to become economically productive individuals. To contribute to real businesses and their needs.

Participating in the delivery is much more about influencing attitudes and behaviours, sometimes without even realising it! Employers frequently cite poor attitude to work and/or the workplace as a key challenge when recruiting and investing in young talent – a UTC deals with this in a new and refreshing way.

If ever there were an education initiative that employers must support from the top down, the University Technical Colleges are it.

In establishing this network of specialist schools, commiting to invest in 30 UTC’s already, it could be argued that government has done its bit. Now is the time for employers to make the most of that promised investment.

The rewards available to those employers willing to invest in their UTC’s can be remarkable.

Any employer can consider being a core employer partner for a UTC – it’s probable that the employer’s activity will bear direct relevance to the specialism of the UTC itself. An employer partner would be expected to

y

help shape the design and participate in the delivery of a course module. The design of the module and the outcomes of the delivery remain the sole responsibility of the UTC and its teaching staff.

In very rough numbers a core employer partner, sponsoring one teaching module, could expect to invest between 12 and 20 engineering man days per annum in supporting a UTC. A common benefit cited by employers which comes from working with UTCs and their young students in this way is that their own employees find it tremendously uplifting. They thoroughly enjoy the opportunity to go and share their knowledge in a learning environment. Secondly it allows employers to make young people aware of their products and services and their plans for the future.

It’s a wonderful way to make young people aware of your organisation.

ELUTec has made a cracking start and our employee sponsors include Ford, Network Rail and, most recently, we have confirmed that BP will be joining as core employer partner. We have further commitments from Selex Galileo and The National Grid.

However, in my experience successful sponsorship of a University Technical College by an employer must have the full support, interest and backing of the chief executive or managing director of the respective organisations. Without this the efforts of others will always tend to become diluted which is a great, great shame.

So, with 20 months to go before we open in September 2014 we are approaching six employee partners confirmed and we’re looking for another 6 to 10 who are equally passionate about what this revolutionary new education model could achieve for industry.

CEO’s and MD’s - your industry needs you.

ELUTec will be calling!

R&D Tax Claims

Get credit where it’s due

R&D Tax Specialist Mark Evans of R&D Tax Claims Ltd; managing director Mark Wingfield, A&M EDM Ltd

R&D Tax Claims Ltd has helped a West Midlands based specialist engineering company claim back over £95,000 from HMRC for money spent on research and development.

R

&D Tax Claims, based in Wolverhampton, worked with A&M EDM Ltd of Smethwick to claim back corporation tax on money spent on R&D (research and development). The company provides high specification precision-made parts and tooling to the aerospace and automotive sector using wire and spark erosion and CNC manufacturing processes.

A&M was founded in 2002 by Mark Wingfield and Arthur Watts, both precision engineers, with no bank borrowing and a £17,000 loan from Mark’s brother-in-law.

The company now occupies a 10,000 sq ft site and employs a team of 35 skilled engineers.

“Our main business is spark erosion, EDM and wire erosion”, says managing director Mark Wingfield. “This has led us into precision engineering, pressed tool manufacture, mould tool making, extrusion tool making – we have the machinery to make anything, and our global clients include JLR, Goodrich Aerospace, Marstons Aerospace and Hadley Sections. We also help other companies across the UK who need our skills and precision machinery to overcome tricky problems. Our intellectual property lies in skills built up over decades.”

Missing out “Pretty much all of our output is R&D led”, continues Mr Wingfield. “But our accountants had said claiming for R&D

could be difficult to prove, and we thought it would be time consuming and costly.”

But this assumption was shown-up as false after a visit from R&D Tax Claims for a no obligation chat. “They operate on a no win, no fee basis so we knew we had nothing to lose,” shrugs Wingfield.

Mark Evans, managing director of R&D Tax Claims says, “It was clear that A&M were eligible for a tax refund as their work is R&D driven. We met with Mark in early January, submitted to HMRC on 6 February, and got the reclaim within two months.”

“We were really surprised at the speed of the reclaim”, says Wingfield. “We have invested it in a 1,000 sq ft two storey extension and inspection area, so that when our clients visit, they see our quality precision work showcased to perfection.”

Explaining why help from professionals can be so helpful in a successful R&D tax claim Evans says, “We take the technical elements of what a company does, and present the evidence to HMRC in a clear manner. The clarity of the message is vital in proving the case beyond doubt.”

and opportunities for the next generation of skilled engineers.”

However, Evans asserts that many companies like A&M don’t realise that such work can constitute R&D. But a refund can encourage them to carry on investing in activities which are important to the future of their own companies- and British industry as whole.

“The future looks great”, concludes Wingfield. “The recession’s been good to us.

In 2009, our turnover dropped by 17 per cent but we still took staff on and bought more machines. I see problems as opportunities; when a runaway milk delivery lorry demolished our offices we seized the opportunity to build better ones.

Business is looking good and we have a large contract ready to sign. At the end of the day, it’s about giving people jobs, opportunities and a future.”

More than a one off Evans says that it is a pleasure to help a company like A&M. “We’ll be working with them again next year to process a further refund”, he assures.

“A&M are committed to constant reinvestment in the business, creating new jobs

R&D Tax Claims Ltd T: 01902 783172 www.rdtaxclaims.co.uk contains case studies of other successful claimants and further details of the HMRC scheme.

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What is the GMF?

Business opportunities put Festival on global map After two years of remaining fairly provincial, there are signs that the Sheffield City Region’s three-day Global Manufacturing Festival is really going global. And there is proper value-add for visiting SMEs as the organisers plan to fix business networking meetings with multinational companies.

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The Global Manufacturing Festival was conceived in 2008 as a showcase of manufacturing capabilities in the Sheffield region. The Sheffield Chamber of Commerce and Marketing Sheffield assembled the main players, ably supported by pro-manufacturing organisations including the University of Sheffield, the Advanced Manufacturing Research Centre (AMRC) with Boeing, the Cutlers Company of Hallamshire, NatWest, Tata Steel, patent attorneys HGF, and law firm Nabarro.

The Festival (or GMF)’s aim is fundamentally to highlight and create business opportunities for manufacturers in the region. In addition, it has served to showcase some of the large scale project work being done at the AMRC and the Advanced Manufacturing Park, especially the capability of the Nuclear Advanced Manufacturing Research Centre and the new Rolls-Royce aerospace single crystal blade factory.

The main trade fair and factory visits are preceded by ‘Get Up to Speed’, an event at the Ekspan Blue Shed that showcases the manufacturing sector to school children, students and parents, aiming to build confidence in the sector as a good place to work. The Made in Sheffield brand, which has amassed 120+ members, supports the GMF each year and hosts its annual dinner during the event.

The GMF has hosted keynote speeches by senior industrialists including chairman of Boeing UK Sir Roger Bone OBE, Director of technology at Rolls-Royce Professor Ric Parker, Jurgen Maier of Siemens, the Head of the AMRC with Boeing Prof Keith Ridgway and the Vice-chancellor of the University of Sheffield Prof Keith Burnett.

GMF Sheffield

What’s new for 2013?

This event is endorsed by big names and companies and has become a firm fixture in the Yorkshire business calendar. But is the GMF truly global?

Not yet. But it plans to be and is making steady progress on its fiveyear plan. This year the festival is inviting business delegations from China, India, Mexico and Thailand.

These delegates have plans to both sell and buy manufacturing services, a sound reason for some subcontract SMEs to attend.

The GMF is being marketed and promoted earlier this year, and its official launch in Westminster on January 22 will bend the ear of the political elite.

In 2013 the GMF will be hosted on the Advanced Manufacturing Park near Rotherham, a modern venue fitting for the progressive, hi-tech, multi-discipline engineering activities the GMF hopes to promote.

The 2013 Festival is divided into four industry sub-sectors: Aerospace, Medical Equipment, Nuclear Power and Renewable Energy. These themes offer knowledge transfer and, crucially, clarity on business opportunities within each. For example, utility EDF will be there to explain as much as possible about accessing supplier opportunities for their nuclear power station at Hinckley Point.

New for 2012, the Festival plans to arrange ‘speed dating’ business meetings between visiting companies and up to six multinational, prime contracting companies. Details of these will be announced shortly – follow the Twitter handle @GMFSheffield.

The GMF 2013 will again provide high level keynote speeches from both industry and senior government, and includes a strong trade show which provides delegates with the opportunity to talk to domestic and international manufacturers. “In our experience the event has been a strong catalyst to driving forward new partnerships and business,” says Harry Hutchinson, a partner at HGF.

The event sponsor says: Patent and trade mark attorneys HGF is working at the heart of innovation with many global manufacturers. We are delighted to be sponsoring the GMF and bringing manufacturers from all industries together to drive growth for the future

Where and when: The Advanced Manufacturing Park, Catcliffe, and various Sheffield venues, from April 17-19, 2013.

Sponsors: Industrial group Tata, The University of Sheffield, NatWest and law firm Nabarro are confirmed as headline sponsors for the second consecutive year.

Patent attorneys HGF are event sponsors. Siemens are discussing their support for the GMF with the organisers.

For more information on the Global Manufacturing Festival 2013, follow the website www.globalmanufacturingfestival.com and follow @GMFSheffield, @MarketingSheffield and @WRStirling over the next four months.

Have your say at www.themanufacturer.com

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Automation in the information age Attending the Rockwell Automation Fair in Philadelphia, USA Tom Moore finds that producing the same amount with less labour and energy is just the beginning of automation as data collection technology and applications progress to complement cloud applications and mobile devices.

S

o why is this one of the largest single company shows in the world? One reason is that Rockwell Automation customers, such as Apple, Ford based in the US and contact lens manufacturers CooperVision in the UK, want to maintain relations, show off case studies and find out the latest products and services. Knowledge foraged in these sessions can be parachuted into

factories helping international peers raise to their game in overcoming challenges at home – UK companies at the Rockwell fair were focused on potential ways to mitigate energy costs.

But information sharing was a focus at the Rockwell Automation

Fair in more ways than one.

Complex requirements from global customers which are looking to standardise technology and processes across locations, as well as pressures on costs and compliance, have required Rockwell to develop new offerings including more mature methods of data collection and application.

Thus Rockwell, traditionally better known for its hardware, has poured investment into supporting software which plugs knowledge gaps in remote locations that previously went unrecorded. It is pulling energy and equipment usage data and is now beginning to put it into the cloud, for instance.

There has been good uptake for this kind of technology from the oil and gas sector, giving the equipment seller a head

Servicing a skills gap

C

ompanies such as Rockwell Automation are ever more important in providing skilled automation services amidst a heavily depleted pool of engineering talent (there are 10 million manufacturing jobs unfilled throughout the world due to sub-standard local skills according to Deloitte).

Outsourcing can be contentious but, in a similar way to logistics and IT, it can often make sense for highly specific engineering skills outside design and manufacture to be sourced on an as-needed basis from companies that have tentacles all over the world. These skills can then be shared across many companies rather than inflate in-house wages.

Keith Nosbusch, CEO of Rockwell Automation, touched upon a common theme in what is now a globalised world where design sticks and manufacturing moves. “Services are very important in emerging markets where there isn’t a lot of skill or knowledge to apply automation. In mature economies engineers are retiring and not being replaced in the same way, so they too are looking for providers to give that support,” he commented.

“Manufacturing is growing outside of Europe and outside of the US so we have to be where our multinational customers are and they want a similar execution model wherever they go. They don’t have people [with automation skills] to put into China, Latin America and Eastern Europe,” he added.

Peter Daenan, manufacturing engineering chief for Ford South America, explained that the US manufacturing icon is looking to use its global positioning to create factory clones so that production can be moved or altered to suit demand. This means having the same automation system, the same machines and the same level of skills wherever possible.

“We want to move away from having non flexible lines with three typical models and move to a much higher level of flexibility,” said Mr Daenan.

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Manufacturing Technologies

Manufacturers are going to start competing on [energy labeling] Sujeet Chand, Chief Technology Officer, Rockwell Automation

Safe speed Balancing safety with growing pressures on productivity was an area of focused interest for customers at the Rockwell Automation Fair.

Acknowledging safety requirements is a necessity – but it can sometimes feel like a limitation on productivity.

Recognising customer frustrations over this, Rockwell Automation has implemented a number of changes to speed up maintenance.

Derek Jones from the safety division of Rockwell says that “if safety interferes with productivity and becomes an obstacle, then that is the worst thing as there is a temptation to override it.”

Rockwell has been used to using uniquely coded RFID techniques to make it harder to override safety protocols – so that when a machine is in stop mode it stays in stop mode.

start in the lucrative service market. Rockwell can monitor its products in use as Rolls-Royce do, enabling it to know before its customers do, when new parts are required.

Energy wheels Sujeet Chand, chief technology officer at Rockwell Automation, says that we are only seeing the start of energy-reducing regulations and that more will come. With manufacturers being asked to report energy consumption, an automation system needs to be accurate as there could otherwise be fines.

Mr Chand expects to see labels on products in the near future, signalling the energy involved in the process to get it to the store it’s sold in, counting energy in a similar way to calories on food products.

“It will most likely start with food stuffs in a way that colour codes indicate calorie content and consumers may start buying based on this,” he predicts.

“Manufacturers are going to start competing on that as a result.

“Manufacturers look at entire plants not specific machines,” adds Chand. “We need to

Now the case is different. Safe speed and safe direction allows for machine cleans to be a lot faster as it moves the often heavy piece of equipment, such as a roller used in the paper industry, for the maintenance team. This saves time exiting the area, locking it, moving the equipment and then re-entering to complete the rest of the job, with production resuming more quickly.

With the Health and Safety Executive (HSE) implementing charging for ‘interventions’, Mr Jones explains that the carrot for investing in this capability to improve productivity is matched in size by the stick for falling foul of compliance.

“If you are found at fault over an incident then you are made to pay the HSE an hourly rate for time spent investigating,” he says. “They’ve always had a stick to beat you with but now they’ll have an expensive stick to beat you with.” provide visibility because today there isn’t much. Once you know where energy is going then you can replace inefficient machines and devices.”

Supporting this search for visibility, Rockwell is starting to bring out products that embrace Common Industrial Protocol (CIP). This is an initiative which is transforming the model for information and communication technology in the industrial ecosystem. CIP allows companies to integrate I/O control, device configuration and data collection across multiple networks. It allows automation hardware running through factories to report

what power is being used by the equipment.

“Every drive measures voltage, current and power,” states Chand. “Drives have voltage and power information in factory but they don’t have a mechanism to report that today. If we build a standard way of reporting, where drives can communicate that...”

Chand envisages a fast approaching time when it will be commonplace for manufacturers to be able to push individual devices to lower energy modes as necessary – based on drive information provided by CIP over Ethernet. @thomasmoore88

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The UK instrumentation and automation sector is strong says trade body Gambica. But why is UK manufacturing not reaping the benefits that it can offer?

T

he UK instrumentation and automation industry is suffering a sad paradox in the UK. The sector has recovered well from the recession, business levels are back above 2006 levels and, in some sectors, above their pre-recession 2008 levels. But a key market, UK manufacturing, is not taking full advantage of this indigenous asset, nor benefitting from the efficiencies automation technology can bring.

This situation is limiting growth prospects for both parties.

Ready and waiting The UK automation industry In November Gambica, the trade association for instrumentation, control, automation and laboratory technology in the UK, published its index for the UK Instrumentation and Automation industry. The index is plotted from Gambica’s own market data, most of which is submitted by its members. Gambica’s Chief Executive, Dr Graeme Philp believes it’s the most reliable market data available on this sector.

The data shows industrial automation following the economy quite quickly as it slid into recession during 2008 and then gradually climbing back, while process automation, with its longer project timescales, continued to grow for some time after the recession hit, before dipping slightly and then recovering and growing strongly.

GAMBICA Index

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There’s more to automation than robots. These account for just

2% of the UK instrumentation and automation industry.

EventPreview Automate UK

The UK industrial automation market is broadly split into two major sectors – industrial automation, covering the discrete manufacturing industry, and process control, covering the continuous process industries.

Gambica estimates that process control represents approximately 46% of the market, industrial automation 41% and fluid power and robotics making up 11% and 2% respectively.

With doom and gloom pronouncements on the UK economy being so popular, it is perhaps not surprising that some recent confidence surveys have shown a touch of pessimism in Gambica’s industries. But with news of the UK climbing out of recession, the trade association expects this to give way to a continuation of modest but real growth for its members into 2013.

Gambica and The Manufacturer Gambica is a leading partner at The Manufacturer’s Future Factory: Automate UK event.

Gambica CEO, Dr Graeme Philp, will chair the event which will take place on February 26 in London.

Attend to understand the automation imperative for UK manufacturing, identify where automation might assist in your business and learn how to overcome the challenges inherent in establishing a successful automation strategy.

2% 11%

46%

41%

Process Control Fluid Power Robots Industrial Automation

The UK manufacturing industry Sadly, this confidence has not yet percolated into every aspect of UK manufacturing and Gambica reports continued under-investment from this segment. This contrasts starkly with the situation in other countries, notably Germany and China where investment in machines and automation has held up through the global financial crisis.

“It’s not the larger manufacturing companies where this failure to invest is most pronounced”, said Gambica’s Chief Executive, Dr Graeme Philp.

“Rather it is in the manufacturing heartland of middle-sized and smaller companies”.

Dr Philip goes on to say that this trend is making a past strength of UK manufacturing – technological maturity - become its weakness.

“UK companies are very good at ‘make do and mend’ and maybe the benefits of further automating the manufacturing process seem less compelling than leaving the money in the bank, particularly in the current economic climate,” says Dr Philip. “However, our competitors are making those investments and reaping the benefits of more efficient production, higher energy efficiency and lower emissions. UK companies risk being left behind”.

Gambica, being part of a network of European Trade Associations, is able to compare industrial automation investment across other European countries. It probably won’t surprise you that German industry invests over 5 times more in automation than we do in the UK. Italy and France also both invest between 3 to 4 times more than the UK.

German industry invests over

5 times more in automation than the UK

the risk out of investigating the benefits of manufacturing with an initial consultancy paid for by the government.

Larger automation companies have set up their own equivalents of these schemes, often with money being lent to the end-user on a contingent basis with payment being linked to the delivery of efficiency improvements. “These schemes have made a difference”, said Dr Philp. “But it has been surprisingly difficult to get manufacturing companies to take them up”.

There is clearly inertia in the system – one of the more difficult control problems to overcome, as any automation engineer will tell you.

Stopping the slide The UK government is alert to the problem and have set up a number of initiatives, one of which, Automating Manufacturing, is designed to take

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What we’ve got here is a state of the art manufacturing facility which people come from all over the world to see.

Jonathan Short, CEO, EcoPlastics

EcoPlastics CEO Jonathan Short says, “People generally underestimate this industry. They think of plastics reprocessing as a grubby, ‘man in a van’-type low tech industry. But EcoPlastics throws those assumptions out of the window.”

An international benchmark

Automation:sorted!

The word ‘automation’ tends to summon up images of regimented lines of hefty robots, pneumatic arms twitching in a synchronised dance of efficient, clean production. But this image represents a tiny proportion of automation technology and its potential applications.

E

coPlastics, a postconsumer plastics recycling facility in Leicestershire, is perhaps an unexpected showcase for automation investment (p40). But none-the-less the company has invested around £30 million over the last four years in automation technologies, without which its £40 million turnover business would be entirely unfeasible.

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EcoPlastics processes around 150,000 tonnes of mixed plastic every year and contributes to a fast growing manufacturing subsector for recycled plastic products – predominantly in the food and drink industry. Its high volume of mixed feedstock and the uncompromising quality standards of its core market mean that high-tech automation and monitoring systems are essential.

Mr Short goes on to assert, “What we’ve got here is a state of the art manufacturing facility which people come from all over the world to see. I have visitors from Japan, Australia, Egypt, America, Europe.” The world outside the UK seems to value recycling as a key manufacturing sector of the future says Short.

For those looking to benchmark their plastics processing technology against what has been implemented at EcoPlastics, the sort line is the linchpin.

“The sort line has been our biggest single piece of automation investment – around £13 million – and without it there would be no point turning all the other kit on,” says Short.

How did EcoPlastics get this investment kickstarted? “We did have a loan from the Waste and Resources Action Programme of £1.5 million. But apart from that there was no funding or tax breaks,” says Short. Instead, EcoPlastics has used a mixture of asset backed lending (£10m) and equity (£5m) to buy the technology it needs to produce quality plastics.

The all-important sort line autonomously separates plastic

EventPreview Automate UK

bottles, ice cream tubs, plastic bags, meal trays, polystyrene and more. All of these standard items in household waste have different material qualities and cannot be mixed in reprocessing.

Using a system of elevated conveyors with sorting stations which use near infrared and cameras to trigger valves which blow unwanted items into new sorting routes, the most valuable plastics, like clear PET, are progressed to granulation, cleansing and extrusion.

Optimisation But getting the best out of such kit is not as simple as setting it up and switching it on. Short says that achieving the right combination of technology and then connecting it in a way which supports commercial needs is a real challenge for anyone starting out on an automation journey.

German company Stadler and Norwegian firm T-Tech were the two key partners involved in the configuration of the sort line at EcoPlastics. Other technologies used on site come from Italy and Austria. “There’s no one in the UK that can provide this kit at the quality that we need so we have no choice but to import,” says Short.

In terms of integrating automation technologies with the company’s IT infrastructure, EcoPlastics has recently invested in a SAP ERP system and the next step is to implement CMMS as a bolt on to the ERP. “This is an automated maintenance system which prompts maintenance and helps scheduling,” explains Short.

After this system is up and running Short says that the company needs a continuous

We do over two thousand quality tests a day here to ensure that we don’t put anything which is out of spec onto the market Jonathan Short, CEO, EcoPlastics

Unleashing the power of automation To find out more about EcoPlastics’ automation journey come and hear Jonathan Short speak at The Manufacturer’s Future Factory: Automate UK event on February 26, 2013.

The event will be held in London.

For sponsorship enquiries please contact Henry Anson (h.anson@sayonemedia.com) To enquire about presenting a case study please contact Eva Lindsay (e.lindsay@sayonemedia.com) For delegate enquiries please contact Benn Walsh (b.walsh@sayonemedia.com) All of the above contacts can also be reached on 0207 401 6033.

monitoring system to support quality production on a 24 hr cycle. “We do over two thousand quality tests a day here to ensure that we don’t put anything which is out of spec onto the market,” he explains.

“What we need is an automated system which trends these tests and tells us when we come within a certain percent of our control parameters. Our testing system at the moment is more reactive.”

With such combinations of IT and automation investments Short warns that you must be willing to invest time to reap value. “It’s all very well getting a software package,” he says. “But in this plant we have 400 motors, 800 gear boxes and 4000 bearings. And information from all of them needs to feed into the CMS system.”

And then of course there are skills issues.

As the technology used on shop floors across manufacturing progresses apace so must the skills profiles of operators and technicians. At EcoPlastics Short says they

have found there is now a need for a PLC expert on every shift to effectively diagnose problems in the automation equipment and software.

“In a plant like this we don’t have unskilled operators anymore,” states Short.

“Everyone must have a level of technical expertise that allows them to understand the machinery – not just drop a bale on the line.” This bar-raising on skills has meant a mixture of retraining and recruitment, but all technical training has been undertaken from scratch on site as Short explains. “You can’t just call up the job centre and ask for two guys who know their way around a caustic hotwash process.”

It’s difficult to put a figure on the amount EcoPlastics has invested in such training says Short. “A lot of it comes down to calculating management time spent on it as we do all the training in-house.” But without such spend in time and resources the cash investment in technology would certainly be empty.

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Chain

reaction DHL can act as a catalyst for altering perceptions about the importance of supply chain management and realising benefits to productivity and cash flow. finds out how.

I

n November it was confirmed that the eurozone has double dipped back into recession. Predictions for a return to growth in the bloc for 2013 are extremely modest and even global growth powerhouses like China are slowing down (in September growth slipped to ‘just’ 7.4%).

In such an environment, where input costs are volatile and demand weak, it is unsurprising

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that many businesses say cost cutting and streamlining operations remains firmly at the top of their agendas.

Much of this focus on cost and efficiency has been made pressing by competition from low labour cost economies and has often felt like a losing battle for UK manufacturers.

But, argues DHL, the global slowdown, matched with growing demand for short lead times and security of supply, may offer an opportunity to stem and even reverse the flow of offshoring.

How? Through innovative supply chain management.

Government’s approach to supporting UK manufacturing since the financial crisis has been to focus on high value-add exports. But DHL says, while this

is important, the UK must also grow capability in manufacturing its own commodity items cost effectively if it is to tackle its unsustainable trade gap.

Such an achievement would boost employment.

Research suggests that for every manufacturing job it is estimated that four to eight more are created in the supply chain. At a time when there are over 2.5 million people unemployed in the UK (7.9% of the population) a significant increase in manufacturing jobs would therefore offer massive knock-on benefits.

Making it happen But, says Mark Wilkinson, business development & strategy director at DHL,

Supplychain Logistics and Materials Handling

whether manufacturing businesses are discrete or process, high or low volume, an effective and efficient supply chain plays a key role in creating a truly competitive proposition for manufacturing in the UK. Both for today and for the future.

“Supply chain management needs to be recognised as being far more than transport and warehousing,” says Mr Wilkinson. Rather it needs to be seen as “an enabler to support meeting operational, financial and environmental performance targets”.

And, continues Wilkinson, DHL can act as a catalyst in realising that change of attitude and to help its customers reap the benefits.

What makes DHL so confident of this? Broad experience is a big factor. Size and technological capability are others.

DHL was founded in 1969 and is the largest logistics and supply chain provider in the world.

Some of the world’s leading manufacturers are in the customer base spanning a multitude of sectors including; automotive, aerospace, chemicals, industrial engineering & manufacturing, utilities & infrastructure.

“Our breadth of experience and knowledge is fundamental to our value-add proposition,” says Wilkinson. “Every sector has its differences but there are lessons about controlling inventory, gaining visibility of stock and improving material flow which are of interest to all.”

This puts DHL in a unique position as a hub for manufacturing and logistics best practice. Sharing this knowledge is an important remit for the business – recently it helped transfer best-practice principles developed with automotive customer Jaguar Land Rover to heavy engineering customer JCB. “Lack of knowledge drives waste,” says Ian King, VP operations, engineering & manufacturing at DHL. And both for its customers and for itself, waste is an enemy DHL strives to remove at every opportunity – the company even has its own award winning operational excellence programme, First Choice, which utilises lean and six-sigma to support this culture.

In terms of waste in manufacturing, Mr King says that it tends to emanate from production and painful periods of downtime.

“But often we can help achieve huge improvements here by optimising inventory requirements, increasing material visibility and making sure parts arrive Just-in-Time, rather than just in case.” says Wilkinson.

Where existing manufacturing facilities become size constrained, outsourcing to a DHL facility can allow flexibility that many manufacturing facilities don’t have due to the fixed space that they occupy. “Rather than finding a new site to expand, companies can take all the logistics activity off site and feed in on a Just-in-Time basis. The opportunity for manufacturers to increase their manufacturing footprint can drive

Purchasing power

O

ne of the greatest pressures on manufacturers today is price volatility and security of supply in key core and noncore materials.

Recognising this, and realising an opportunity to create value further up the supply chain, DHL is able to utilise it’s procurement skills and purchasing power to optimise the product sourcing, acquisition and possession costs of materials on a customer’s behalf.

“We can leverage our sourcing category expertise together with our size and scale of traditional logistics operations to help our customers realise even greater efficiencies. By acting as a ‘procurement agent’ in some instances, DHL can offer an integrated, yet transparent end to end supply chain solution for certain product categories, for example maintenance and repair operations (MRO). “It is not all about sourcing the cheapest item price - having an impact on the quantity purchased at the right time can drive bigger benefits” says Wilkinson.

This kind of purchasing option may prove particularly popular with Small and Medium-sized Enterprises, (SMEs) – a segment which DHL is eager to do more business with. “We want to grow with the UK’s SME base,” asserts Wilkinson, “We are very aware of how important it is that this segment grows in the wider challenge of rebalancing the economy.”

Other DHL services which might appeal to this smaller business group, and which again exploit DHL’s massive resources, include its integrated collection service. This transport network encourages logistics sharing which reduces costs as well as the adverse environmental impact of moving good and parts.

“We carry products from customers who may be competitors in the same vehicles on this network, says Wilkinson. “Once customers understand the benefits they are more than happy to collaborate.

They don’t worry about us carrying competitive product as long as we create the desired value for all participative customers”.

increased output and the potential therefore for increased sales.” Wilkinson suggests.

DHL operations are underpinned by advanced IT systems which allows it to accurately pinpoint, via track and trace, where items are in the supply chain. It will also flag potential problems so that DHL can work with customers to find alternative sources or routes for parts, minimising the potential impact of supply chain disruptions on productivity. Basically, improving decision-making.

Importantly, DHL does not use this IT capability in isolation, but integrates with customer ERP systems so that information can be acted on in real time.

DHL ensures that data passing between the two systems is

By enabling a more holistic view of a company’s supply chain operations and how they integrate with production, far more value can be unlocked Ian King, VP Operations, Engineering & Manufacturing, DHL

actionable and visible across departmental boundaries.

“Manufacturing businesses often operate in silos – each department looking after their own profit and loss,” observes King. “By enabling a more holistic view of a company’s supply chain operations and how they integrate with production, far more value can be unlocked.”

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EventPreview IMHX 2013

IMHX 2013 predicted to be ‘the best ever’

Held once every three years, the International Materials Handling Exhibition (IMHX) is the UK’s premier intralogistics event and one of the leading storage and handling shows worldwide. To be held at the NEC in Birmingham from 19-22 March, space sold already exceeds that of the last show, making the joint organisers – Informa Exhibitions and the British Industrial Truck Association (BITA) – confident that the 2013 show will be the best ever.

I

MHX is expected to feature over 400 exhibitors and will showcase the latest products and services to optimise materials handling, storage and transportation.

Visitors will benefit from an expanded conference programme and brand-new feature areas.

The IMHX ‘Logistics Excellence’ Conference will have two streams: seminars at strategic level delivered by renowned industry experts, plus case study presentations at operational level to demonstrate examples of best practice. Details of the seminars will be available on the show’s website at www.imhx.biz.

For the first time ever, IMHX will have a Skills & Apprenticeships Zone in a bid to bring together talented young people and companies needing new recruits. Situated in Hall 17, the zone will be spearheaded by the BITA Academy, a dedicated apprenticeship training facility operated in conjunction with City of Bristol College. The zone will feature the winning vehicles from BITA’s ‘Enduro Challenge’ engineering competition for

RTITB Operator of the Year Competition will take place over the four days of the show, with forklift operators from across the UK and Ireland competing in a special arena designed to test their skills to the full

secondary schools, some handson engineering activities and a consultation area for employers.

Also brand-new at IMHX will be the UKWA 3PL Zone, hosted by the United Kingdom Warehousing Association, and the International Visitors’ Lounge, where visitors from overseas can relax in comfort or hold meetings with clients or suppliers. In addition, with many exhibitors using IMHX as the launch pad for new products and services and over 40 first-time exhibitors already confirmed, visitors are guaranteed to see a whole host of new technologies and innovative ideas.

A number of features will be making a welcome return to the show. The heats of what promises to be another hotly contested RTITB Operator of the Year Competition will take place over the four days of the show, with forklift operators from across the UK and Ireland competing in a special arena designed to test their skills to the full. The show will once again feature the AMHSA Pavilion, hosted by the Automated

Material Handling Systems Association. AMHSA Members will be giving short ‘Meet the expert’ presentations in the pavilion to give visitors an overview of key automation topics. Also returning to show are the Design 4 Safety Awards, which recognise the importance of product design in improving safety. Entry is now open – via the IMHX website – to all exhibitors in seven award categories. Three entries from each category will be shortlisted early in 2013, with the winners celebrated in the Design 4 Safety zone at IMHX and in the show catalogue; visitors will then be invited to vote for an overall ‘People’s Choice’ award, to be announced at the exhibition.

Visitors who pre-register to attend IMHX 2013 for free at www.imhx.biz will receive an exclusive Priority Pass pack containing everything needed to maximise the benefits of their visit – a delegate name badge, the Little Black Book of handling industry contacts, a fold-out exhibition floor plan and key details of the show’s seminars.

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care Handle with Rob Fisher, director at Informa, the organiser of intralogistics exhibition IMHX, describes the critical nature of materials handling solutions within efficient manufacturing operations and the tailored messaging manufacturers can expect on ‘best-fit’ solutions at the 2013 show.

: Why is it important for IMHX to speak specifically to the manufacturing community about materials handling solutions?

Look at the stats and it becomes obvious the manufacturing is a massively important sector for the UK’s economy and therefore just as important to IMHX and its exhibitors.

Manufacturers are constantly moving products throughout their operations – whether it is components for line-side assembly or the finished product which then needs to be shipped to the customer.

Manufactured goods and components will at some stage of their life come into contact with a piece of materials handling equipment: whether it is the humble pallet truck or a very high tech fully automated warehouse system.

Inherently, manufacturers will want to move products, components and finished items along the supply chain as quickly and cost-effectively as possible – and this is where IMHX can help.

With over 400 exhibitors the event provides the opportunity to evaluate every element of supply chain operations – both for today and for the future. This includes automated handling systems, conveying and storage solutions, forklift trucks and warehouse IT, to name but a few. Visitors will also be able to engage with providers of third party logistics services such as Unipart Logistics and, for the first time, we have a 3PL Zone, run in association with the United Kingdom Warehousing Association (UKWA).

Other visitor attractions include the IMHX Supply Excellence Conference, which is free to attend, and our case study theatre where visitors will be able to hear from their peers. : Why does IMHX feel it is useful to strengthen its communications with the manufacturing sector through collaborating with ?

The Manufacturer is a respected and established title and the close relationship that it has built with the EEF makes it a great media partner. We will be using The Manufacturer to promote the multitude of reasons why manufacturing executives across the UK should visit IMHX 2013.

Visitors and exhibitors at IMHX 2011

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: In terms of strategic investment – how do IMHX feel investment in materials handling solutions and technology is viewed by manufacturing management?

UK manufacturers work in highly competitive markets and are constantly looking for ways to eliminate waste and reduce cost. They have had to adapt to fight off competition from around the globe – what doesn’t kill you makes you stronger – and I believe that manufacturers are very open when it comes to new ideas and solutions.

As with any strategic investment, it is paramount that you can demonstrate why the

EventPreview IMHX 2013

investment is needed and the anticipated ROI. This is where our exhibitors excel.

The level of supply chain expertise that visitors will find at IMHX is second to none. Our exhibitors no longer just see themselves as suppliers of ‘kit’.

Their businesses are very much service- and solution-focussed.

For example, providers of forklift trucks no longer talk to clients in terms of the number of machines they need. They will delve a lot deeper and evaluate what the business needs to run at optimum levels of efficiency.

This may well mean reducing the number of FLTs at one site or changing the mix so that the correct type of machine is deployed. Now it is much more about working in partnership with the customer to deliver what they need.

IMHX provides visitors with a unique opportunity to engage with suppliers who can help improve their materials handling and logistics operations and ultimately save them money.

Investment in new technology can deliver massive savings, with return on investment often achieved within a couple of years. : How does this view compare to other sectors?

Retailers are often seen as the trailblazers within the supply chain community.

Their warehouse and logistics operations tend to be on a larger scale. They have a greater variation of product, that comes in all shapes and sizes, which needs to be stored and moved.

So naturally there is a greater emphasis on getting the right solution in place.

However, the principles they adopt apply to any business sector. Businesses need to ensure that raw material is available when needed and that finished goods arrive in the right location, at the correct time.

In between, stock needs to be stored, tracked & traced and delivered on demand. Inventory levels are critical: too much

Manufacturing: Employs around four million people, roughly 14% of everyone working in the UK Output accounts for about Generates more than

20%

of the national economy

£150bn a year in GVA Provides

Inventory levels are critical: too much stock cripples cash flow and the balance sheet Rob Fisher, Informa

60% of UK exports

stock cripples cash flow and the balance sheet, while too little can mean not having that vital component on site. Getting your logistics operations right can save millions. : What key questions should manufacturers be asking themselves about the quality and efficiency of their materials handling solutions today? What are the telltale signs that current solutions are inadequate?

Manufacturers have embraced the principles behind lean manufacturing and these can also be applied to logistics operations. The key questions are: can it be done better, more efficiently and more quickly and can cost reductions be made along the way? They should be asking when the last time was that they sought expert help and advice to evaluate their supply chain needs. Also when was the last time that they evaluated their materials handling and

logistics suppliers? And when they have asked themselves these questions, they should block off some time in their diaries and schedule a trip to IMHX where they will find the answers and updates they need.

Tell-tale signs that the current way they are operating isn’t up to the job are: Too much stock Production is being slowed due to components not reaching the production line at the right time Stock errors – both goods-in and goods-out : Why should manufacturers attend IMHX 2013?

It’s a bit of a truism but “You only know what you know”.

Businesses need be open to new ideas and cost-saving initiatives and many industry pundits believe that the greatest area for potential cost reduction lies within the supply chain. This makes a visit to IMHX 2013 a worthwhile investment of time for any manufacturing concern.

Register for a FREE priority pass to IMHX 2013 at www.imhx.biz

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Missing link A Workforce management applications are increasingly popular – and offer a surprisingly high ROI, finds Malcolm Wheatley.

Clever workforce management systems will help a business achieve better planning, training and compliance

It’s no longer enough for a business to be able to say: ‘Person X assembled this product’: you need to be able to prove that Person X was properly trained. Companies are turning to automated solutions to provide that assurance.

Mark Carleton, Service Director, Mestec

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t defence and aerospace electronics manufacturer Ultra Electronics, a new ERP system has made a significant difference – not just in areas where improvement could naturally be expected, but in the humdrum area of workforce management.

“We’ve got rid of a lot of spreadsheets and manual systems,” says David Shannon, Ultra’s support programmes manager. “Overtime sheets, too, have gone. The ERP system handles all that.”

But equally, he adds, there are aspects of workforce management where the new system doesn’t do everything that might be required of it.

This has left Ultra’s management team all too aware that there remain opportunities for further improvement.

“If you know your workforce better, then you can do a better job of predicting the future,” sums up Shannon. “You can do a better job of capacity planning, you can do a better job of training, and you can do a better job of dealing with day-to-day issues such as holidays, maternity leave and absenteeism.” In other words, with a better picture of what’s going on, you can come up with better answers than you can through ‘gut feel’ alone.

And Greenford, Middlesex-based Ultra is not alone in this realisation.

Talk to British manufacturers, and there’s a new level of interest in workforce management software.

Applications, either standalone or as part of ERP or manufacturing execution systems, which handle workforce-related issues such as time-and-attendance, skills management and training, rostering, and workforce/task scheduling.

So what lies behind this fresh impetus? Is the focus on time-and-attendance, or is skills management seen as more pressing? Where does the ROI lie? And which companies, specifically, are implementing and gaining benefits from workforce management software?

IT in Bankable benefits Look at the experience of manufacturers who have adopted a workforce management system, and one thing is immediately clear: a workforce management application offers a very bankable return on investment.

“The ‘warm and fuzzy’ benefits are very real, but we tend to emphasise the ‘cold hard cash’ benefits more,” says David Hughes, head of marketing at Crown Computing, a major force in the workforce management application market.

“Typically, we talk in terms of a saving of around 3-4% of payroll cost, arrived at through reduced absenteeism, reduced payroll administration, fewer errors – and significantly reduced absence. The mere act of putting a workforce management system in drives down absenteeism, and then you don’t have to pull in people on double-time to make up for the lost activity.”

Take 600-employee Birmingham-based consumer products manufacturer Hozelock, well-known for its ranges of gardening and spraying products. Across a wide range of metrics, it turns out that a workforce management application from Kronos, another leader in the field, has delivered improvement on improvement.

The business initially used a number of different systems for both time and attendance and shop floor data collection, explains operations director Simon Noakes. But although these systems had been fit for purpose at the time of initial purchase, as the business moved forward they were proving unable to support its seasonal but growing needs.

“A great deal of time and effort was required to obtain the necessary information, by which time it was days out of date,” he notes. “With our ever-fluctuating workforce and changing demand, we needed to be able to make decisions based on real time data. It was time to change.”

The requirement for better employee engagement is gathering momentum, with manufacturers keen to allow employee access to the workforce management system, so as to request holidays, check and swap shifts, and view payslips.

Rob Hiron, Manufacturing Sector Lead, Kronos

Flexibility and clarity for productivity Improved time and attendance functionality, for instance, has enabled the business to deliver a standardised system across all employees, including salaried office workers as well as temporary agency staff.

“We wanted to promote a fair and equitable work environment regardless of whether employees are hourly paid or salaried. A single system now provides us with a single source of hours which helps us accurately manage our labour costs and increases overall operational visibility,” says Noakes. He adds that the system also makes it easy to manage the company’s flexible working contracts, designed to increase the number of working hours available during peak periods, and reduce the amount of hours worked during the quieter months.

Better data gathering has also delivered improved profitability through a more detailed understanding of where hours are actually worked.

“We had anticipated that Kronos would confirm to us where lines were underperforming against standards in QAD Mfg/Pro, our ERP system, enabling us to identify root causes and take steps to resolve them,” says manufacturing manager Alan Murphy.

“What we hadn’t expected was for Kronos to confirm our suspicions that some lines were consistently running above standard cycle times. This information has allowed us to

take approximately 12% off the labour cost for certain product lines by resetting the standard.”

Writ large, benefits such as these are seeing manufacturers take a fresh look at workforce management systems as a means of delivering not only rostering and time-andattendance tracking, but also enabling employees to work more productively.

“There’s still a growing market for automated time-andattendance, with manufacturers understanding that you have to start somewhere. That this is a stepping stone to building a much more sophisticated tool for people management,” says Rob Hiron, manufacturing sector lead for Kronos.

“The requirement for better employee engagement is also gathering momentum with manufacturers keen to allow employee access to the workforce management system, so as to request holidays, check and swap shifts, and view payslips.”

Access to real-time data is another important impetus behind the move to workforce management systems, adds Nathan Bowles, chief executive of Smart Solutions, which has developed a workforce management system as a spinoff from its traditional contract labour business.

“We saw a growing demand, among specific categories of manufacturer, for immediate access to data,” he explains. “In food processing, for instance, a manufacturer might have a line working for Tesco in the morning, and Sainsbury’s in the afternoon.

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IT in

manufacturing

Or might be working on open-book ‘cost plus’ contracts, which are becoming more common. Either way, it’s vital to be able to identify labour costs quickly and clearly.”

Skills management Yet increasingly, it seems that manufacturers are turning to workforce management solution providers for help with another, more pressing, requirement: skills management. In the era of the computer, the humble skills matrix has taken on an electronic identity – helping to power manufacturers to new levels of productivity.

Scarborough tube-bending machine tool manufacturer Unison, for instance, has its eye on several potential advantages from acquiring an improved skills management capability.

“If one operative takes significantly longer than another to perform a task, we need to understand why, and to see if training could help,” says Steve Roper, Unison’s IT manager.

“We also want to be able to take advantage of any slack in the order book, or our day-today schedules, so as to quickly identify training opportunities.”

Better still, some manufacturers are seeking to incorporate skill levels within production scheduling decisions.

A relatively rare capability within ERP systems, although more common in specialist advanced planning and scheduling systems such as Preactor.

“Talk to some of the customers who are using our solution most extensively – such as Princess Yachts, in Plymouth, which manufacturers luxury oceangoing motor yachts – and you’ll hear the same story,” says Crown Computing’s Hughes.

“They need to be able to make sure that the people with the right skills are in the right place, at the right time.”

“It’s a capability that we’re getting more and more requests for,” agrees Kevin Bull, product strategy director at Microsoft Dynamics AX ERP

Hozelock’s Birmingham plant

The mere act of putting a workforce management system in drives down absenteeism David Hughes, Head of Marketing, Crown Computing

implementation specialists Columbus. “Manufacturers say: ‘We want to be able to specify that only operatives at – say – skill level eight or above can perform certain tasks’. The scheduling engine goes away and delivers that. And as of a year ago, Microsoft Dynamics AX can do that.”

But one of the biggest skills-related drivers behind workforce management is compliance: the need to be able to prove, beyond doubt, that the operatives working on particular tasks or machines have received appropriate training and, indeed, have been certificated as receiving such.

In short, if you’re a pharmaceutical manufacturer, or in aerospace and defence, or food processing, then skills management compliance is very largely non-negotiable.

“In certain industries, we’re seeing a strong demand for the ability to demonstrate to customers and auditors that the operatives performing specific tasks have been properly trained to an acceptable standard.

And are able to carry out those operations to a consistently high standard,” says Gordon Fleming, chief marketing officer

at manufacturing-centric ERP vendor QAD, which offers just such a capability as part of its ERP system.

Factory-floor data collection and optimisation vendor Mestec points to customers such as aerospace and defence manufacturer Thales which are using just such a capability as part of Mestec’s ‘Manufacturing Smart Box’ system.

“Mestec gave us the ability to link people to work centres,” explains Brian Abernethy, head of manufacturing at the Belfastbased missile manufacturer.

“Which not only gave us the ability to ensure that the people performing tasks were appropriately qualified and ‘current’, but also gave us log-on and log-off times, from which we could capture manufacturing cost and efficiency metrics.”

“The world of compliance and traceability is changing,” says Mark Carleton, service director at Mestec. “It’s no longer enough for a business to be able to say: ‘Person X assembled this product’ – you need to be able to prove that Person X was properly trained. So increasingly, companies are turning to automated solutions to provide that assurance.”

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ITnews...

IT eye Model based engineering Cambashi research director, Mike Evans on Siemens ambition to create the Totally Integrated Automation portal.

When Siemens reported its fourth quarter results in November, the headlines were all about a Eu6 billion cost cutting plan. However, at the same time, Siemens announced continuing investment in the Industry Automation division of its Industry Sector business.

Siemens Industry Sector is still best known as an automation hardware supplier. However, it has gradually been moving the emphasis of this business towards software. Siemens’ ambition in automation is the Totally Integrated Automation portal, an engineering framework, enabling design of all automation processes from a single computer screen.

The deployed design provides a consistent view of manufacturing operations, along the entire value supply chain, and connecting from field level to company management level. In addition to software for their SIMATIC controller range and Manufacturing Execution Systems, there are software tools that simulate a production environment before it is built, for example, Tecnomatix.

Siemens larger vision is Siemens Industry Software a portfolio of products covering the entire value-added process for product development and production.

Since 2011, eight acquisitions have extended this portfolio. The latest, LMS International, adds a range of test and mechatronic simulation solutions. It will bring Siemens clearly into the market for model based engineering of smart devices and products.

In 2007, Siemens purchased Product Lifecycle Management supplier UGS to become the Siemens PLM business unit in its Industry Automation division. This business was neither a stranger to simulation and analysis nor to Siemens. UGS had acquired SDRC, known for defining Mechanical Computer Aided Engineering and one of the first Product Data Management solutions. In the mid-90s, SDRC itself had acquired Siemens’ Computer Aided Design businesses.

Siemens PLM has widely respected tools for Mechanical Simulation and Analysis. Combining the Siemens PLM and LMS portfolio will move the design emphasis from Mechanical Computer Aided Engineering to Systems and Model Based Engineering. @Cambashi

ERP/LOAD PLANNING

William Say opts for custom-built load planning application When independent tin box manufacturer William Say & Co needed a tool for use in load planning deliveries, it turned to ERP vendor K3 Syspro.

Even though K3 had no off-the-shelf solution, said the company’s operations director, Garth Wilkinson, the company knew K3 Syspro well, and was happy to turn to it for expert support.

The vision, he explains, was that pick lists would be used to verify the actual quantities picked, together with the associated packaging used for the items. These details would then be entered into the load planning interface to generate actual despatch notes, which would then be stored against the Syspro load reference and become visible from within the standard load plan query screens.

After examining the company’s requirements, K3 designed a customised load planning solution that would provide a seamless fit with its K3 Syspro ERP system.

Vital to the project: DataSwitch, K3 Syspro’s solution for processing data from EDI files or database transactions.

As DataSwitch runs in the background, explains Wilkinson, customised ‘panes’ developed for the load planning solution were designed to display data, prompt for entries, validate entries, and then pass data through DataSwitch for processing seamlessly into Syspro.

“We are able to present and manipulate our own information in the custom ‘panes’, and then submit it all through DataSwitch, with the system producing despatch notes, purchase orders and receipts automatically,” summed up Wilkinson.

Under the ‘Wilkinson’ and ‘William Say’ brands, the London-based company has been making cans since 1930

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manufacturing

ERP

Pantherella opts for Microsoft Dynamics NAV and Trimit Fashion Sock manufacturer Pantherella is investing in a new ERP system: Microsoft Dynamics NAV and Trimit Fashion – a fully integrated industry ‘add on’ designed for fashion manufacturing, which streamlines the creation and management of Bills of Material when producing products that come in different sizes, colours, and styles.

Sourced from In2grate Business Solutions, the investment will support Pantherella’s growth while

enabling new efficiencies. In2grate is also providing special functionality for yarn control and machine groups to reduce waste, provide tighter control of raw material stocks, and optimise machine use.

“With Microsoft investing heavily in its software, we have confidence that we are getting a solution that could feasibly be the last ERP system we would ever need to buy and implement,” said Richard Gray, Group IT Manager.

ITNIBS

A

utodesk Fusion 360, a cloud-based 3D modelling offering, was previewed at Autodesk University 2012. Autodesk claims the solution is the first of its type offering anytime, anywhere access, from virtually any mobile device or web browser. Autodesk Fusion 360 supports an open design environment, allowing designers to readily incorporate and modify CAD data from virtually any source. The new solution will sit on the Autodesk 360 cloud platform in addition to existing solutions: Autodesk PLM 360 and Autodesk Simulation 360. The solution will be available in the New Year.

S

iemens acquired Belgium’s LMS International, a provider of test and mechatronic simulation software for the automotive, aerospace and other advanced manufacturing industries. Siemens said it is the first PLM software company to provide a closed loop product development solution extending all the way to integrated test management.

Intended to improve simulation accuracy, the integrated solution will improve decision making, and enhance customer ability to design products ‘right first time’.

S

Autodesk Fusion 360: available in 2013

upply chains are unable to cope with volatile demand according to a report by consultants KPMG. The report says that most UK organisations are adopting short term tactics in the hope of keeping their supply chain ticking over. The findings, based on the views of supply chain directors, suggest that a minority are fully reorganising supply chain operations to ensure they are able to cope with volatile levels of demand. “New patterns of customer behaviour are combining with a range of game changing pressures on the supply chain,” said Andrew Underwood, head of supply chain at KPMG Management Consulting. “Now is not the time to batten down the hatches and weather the storm: instead, the time is right for adopting an agile approach and accepting that a ‘one size fits all’ approach is no longer relevant.”

C

ompliance is being jeopardised as workers struggle to cope with increasing email traffic. This finding comes from research conducted by data governance specialists Varonis. Sixty two per cent of those participating in the research reported they had suffered mishaps due to staff being inundated in email. Emails had been sent to the wrong person, or with improper or unauthorised content. One in 20 companies has faced serious compliance issues as a result of a wrongly-sent email.

With 78% of respondents receiving up to 100 emails per day, and nearly a quarter receiving between 100 to 500 daily emails, the results underline the mounting pressure digital communication places on employees. Nearly 85% of those surveyed spend 30 minutes or more every day organising their mail – over one and one half weeks of work every year.

“Every data disaster now seems to involve an email,” says David Gibson, vice-president of strategy at Varonis. “It’s clear that organisations shouldn’t take it for granted that employees know intuitively how to manage their massive inboxes, nor should they underestimate the consequences of email mismanagement.”

Have your say at www.themanufacturer.com

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Crystal clear

Urgently needing to boost on-time delivery performance, glass processor Romag turned to Columbus and Microsoft Dynamics AX. Malcolm Wheatley discovers why.

W

hen North of England social housing company Gentoo Group acquired specialist glass processor and photovoltaic manufacturer Romag, the priorities for the new management team were clear: re-engage staff, re-open the factory – and put in place a comprehensive new ERP system, in order to put the business on a sound financial footing, going forward.

“Under our previous ownership, there had been a lack of visibility,” says ‘Dex’ Rimington, Consett, County Durham-based Romag’s systems coordinator. “We’d been using an old DOS-based system, which was no longer supported, and not fit for purpose.”

It was clear, too, that a number of operational improvements could be made.

On-time delivery, for instance, was an important business requirement, and was one where the business’s performance left something to be desired.

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For as well as solar photovoltaic glass and glass for transport applications, a product range of architectural and security glass is a major line of business for the company – including bullet-proof glass, and blastresistant glass utilising glass polycarbonate laminating technology. And with specialist teams of third-party installation contractors pre-positioned on building sites ready to install Romag’s glass the moment it arrived, the ability to promise a reliable delivery date – and keep to it – was an important competitive differentiator.

“There wasn’t really a formal production planning system,” explains Rimington. “We were relying on the experience of long-serving staff in order to schedule production and promise deliveries to customers: it was all based on ‘gut feel’ and experience, rather than on a detailed understanding of the factory’s workload and each customer order’s individual work content.”

Exhaustive search And so, in summer of 2011, Romag’s management team began surveying the ERP market, looking for a solution that would be a good fit for their needs. What’s more, stresses Rimington, those needs were fairly precisely specified.

Glass processing, he explains, is a fairly specialised business, and obviously the solution selected would need to be able to conform to the business’s technical requirements in this respect. Just as important, though, was the calibre of the ERP vendor in question, and the skills and capabilities of the implementation partner selected to deliver the solution.

“We had some very specific questions to ask of each potential supplier,” says Rimington. “How long had they been in the ERP business? What was the technology roadmap?

And how was the product supported? And all of that was before getting into the specifics of how the solution addressed our particular manufacturing requirements, and what benefits we could expect.”

Similarly, he relates, a separate set of questions probed the capability and suitability of potential implementation partners.

Columbus Crystal clear

“Again, it was important to go with a business that had been around for a long time, and which showed every sign of continuing in business for the foreseeable future: longevity was very important to us. And then, we wanted to establish how much experience they had of working with our kind of manufacturing operation, the support that they offered, and how in particular they went about the implementation process.”

By September 2011, the decision had been reached.

The solution selected: Microsoft Dynamics AX 2009, implemented

by Columbus, a ‘Top 3’ worldleading specialist in implementing Dynamics AX in manufacturing industry, with more than 6,000 successful implementations over a 22-year history.

And it soon became clear, says Rimington, that the combination of Columbus and Dynamics AX was a solution that was readily capable of exceeding expectations. Yes, Dynamics AX would deliver solid functionality in respect of sales order processing, financial accounting and production planning and scheduling – but undeniably, it also turned out to be able to neatly solve a number of other headaches that troubled the business.

“As our implementation team began working with their counterparts within Romag’s management, we quickly saw other opportunities to add value,” says Columbus project manager Rosalind Dechant.

“Month-end accounting was labour-intensive, for instance, material shortages were a problem, and work-in-progress tracking was a challenge.”

What’s more, she adds, actionable management information was in short supply – holding out the prospect that Dynamics AX’s embedded analytic and reporting tools could deliver valuable business intelligence to in order to boost productivity, profitability, and material utilisation.

The approach that we’ve taken is to provide the business with muchneeded functionality, rather than trying to calculate savings ‘Dex’ Rimington, Romag

Time-to-benefit And so it has proved, says Rimington, with the new system going live in July 2012, after a short but intensive implementation process, structured around Columbus’ proprietary implementation methodology SureStep+.

“Yes, the timescale was tight,” concedes Rimington. “And did we get every last detail correct, down to the very last bill of material? No: in any implementation, there will always be small niggles remaining after you’ve gone ‘live’. But the bigger picture was about putting in

place a controlled manufacturing process, alongside back office functions to match – and there, we’ve been extremely successful.”

And what of the system’s ROI? It is, as yet, too early to say.

“The approach that we’ve taken is to provide the business with much-needed functionality, rather than trying to calculate savings,” he concludes. “There have been savings, and we’ll calculate them in due course.

But the bigger benefits are clear: how do you put a value on reliable delivery dates, financial accounting, and instant visibility into work-in-progress?”

Six ways manufacturers are boosting production capacity A free report from Columbus highlights how reallife manufacturers are leveraging ERP to boost their production capacity. Based on customer case studies, the report shows how manufacturers are unlocking the ‘hidden factory’—through pursuing six innovative strategies: 1. Scheduling Resources 2. Production Flow Optimization 3. Project Visibility 4. Integrated Project Management 5. Preventative Maintenance 6. Integrated Maintenance Planning To learn more, and to download your copy, visit: http://ukpromo.columbusglobal.com/production/

www.microsoft.com/en-gb/dynamics/default.aspx

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Manufacturinginaction Putting UK manufacturers under the spotlight Supported by:

Factory of the month

The Royal Mint 78 Find out how this 1,000 year-old organisation is aiming to achieve a Shingo Award by 2015 Discover how new coin plating technology is protecting the Royal Mint from volatile alloy costs Learn how the Royal Mint is adapting to compete in a world where the use of paper currency and card transactions are on the rise Find out how the organisation slashed coin production time from nine weeks to nine days and where it is seeking further improvements Learn about the Royal Mint’s use of flexible working and outsourcing to maintain on-time-in-full delivery performance and quality while searching for cost savings

ELECTRONICS

Siemens Congleton 88

Manufacturing in Action

Discover how a culture of continuous improvement allows Siemens to continue manufacturing electronics components competitively in the UK Learn about the site’s strategy for reductions in energy consumption and how it is leveraging the technology available across the Siemens group to this end Read about the staff-led redesign of the factory floor which has increased efficiency and capacity Discover how a 50% female intake rate at graduate and apprenticeship level differentiates Congleton from other Siemens sites and wider industry

All profiled companies in The Manufacturer are automatically entered into the Manufacturing in Action category at The Manufacturer of the Year Awards.

For 2012, judges nominated, storage and racking manufacturer Apex Linvar as winner.

Congratulations to all the team!

See a wrap of the awards ceremony including a full listing of winning and highly commended companies on p26.

All companies featured will be entered into the MIA Award 2013

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CoinRush

The Royal Mint produced 4.1 billion circulatory and blank coins in 2011

Tom Moore visits the Royal Mint to discuss how the 1,000 yearold company has redesigned the metal in your pocket to slash coin costs and shorten manufacturing times.

F

illing wallets and pockets across the world, the journey of every coin begins at the Royal Mint’s Ministry of Defence-guarded site in south Wales.

From the two pence coins dropped into coin machines in arcades along the coast to the coins used to buy your groceries, it all begins here in this Aladdin’s cave of manufacturing.

Royal Mint has a mighty lineage. It started life under Alfred the Great around 1,000 years ago the company has continually adapted its business

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and improved manufacturing processes while maintaining its marriage with tradition that provides a USP and keeps it making medals for acts of valour.

An example of how the Royal Mint, which used to be housed at the Tower of London, has moved into the 21st century is its aspiration to attain the Shingo Prize by 2015.

Some people may question why the Royal Mint is changing its culture and the way it operates to attain this prestigious award. But for Gail Roberts, supply chain director, it is simple. “We are now saying this is what the Royal Mint does and it’s who we are,” she explains.

“We are looking to change so that we are held up as a global industry leader that consistently demonstrates best practice. The Royal Mint is not just setting itself up against its competitors but some of the best manufacturers in the world too. We are proud to be seen as a leading edge minting organisation but we also want to understand how we measure up as a global manufacturer.”

With the average length of service at the company among its 800 employees standing at 26 years, the management team admits it’s a challenge to get staff to think in a different way. To overcome this each employee

Factory of the month The Royal Mint

now has a personal development plan connecting them to and giving them ownership of the company’s vision.

The Royal Mint is backing up its cultural progression with the drive and hard objectives to achieve the Shingo Prize that you would associate with the stalwart of UK manufacturing.

Shingo is about identifying things to improve, quite the opposite of the common perception held by many manufacturers that cultural change programmes are as woolly as the sheep that roam the Welsh hills and a HR gig rather than delivering hard value to the business.

One objective to achieve the level of operational excellence required to achieve a Shingo prize is to increase the sales of aRMmour technology by 32% and has set a date of April 2013 to achieve this. aRMmour technology is the plating of steel with the coin’s more expensive finish metal, such as nickel for silver-looking five, ten, twenty and fifty pence coins, rather than the traditional method of creating a copper and nickel alloy.

aRMmour is a single layer of material that is electroplated directly onto the steel core, which results in a very strong bond between the plated material and the steel core. aRMmour coins have a typical lifetime of 25-30 years in circulation.

Armoured protection from alloy prices Since the end of World War II all ‘silver’ coins have been made from an alloy 75% copper and 25% nickel. However, this make-up has become increasingly expensive so the Royal Mint’s adoption of steel and nickel will save it between £7m and £8m a year, following a surge in copper prices.

The Royal Mint believes that adapting its business in the face of the sometimes volatile alloy market will attract new customers. The Royal Mint is looking to withdraw and replace five and ten pence coins in the UK with nickel-plated coins. Uptake at home is essential if the company is to meet its Shingo target and convert another 10 countries to plated coins.

The price of copper has risen by so much over the last three years that low-end coins were worth more in scrap value than they were at face value.

With 15,000 tonnes of plated coin made this year, the Royal Mint’s new plating and manufacturing processes have improved its cost base and better managed variability, taking between 30% to 35% of the cost out, depending on the coin.

With holiday makers taking pound sterling out of the UK on their return home, only to be left in a draw collecting dust, £7m worth of coinage disappears each week – probably a fair exchange considering the British love of hoarding that has left my coin box spilling with euros, Swedish krona, East Caribbean dollar and the currency equivalents to the Dodo such as the Drachma and the Spanish Peseta.

Pressing on With coins flying out of shoots everywhere you look, Royal Mint’s operations in an isolated pocket of South Wales are something of an Aladin’s cave, with rattling coins quickly filling boxes destined to purchase a Halwa Bahraini (a jellylike desert made with saffron and nuts) in Bahrain to jerk chicken in Jamaica, which has a roaring trade in pound sterling too during Notting Hill Carnival.

The building, often battered by rain as you would expect in Wales, has a slight feel of a scout hut about it with tens of flags hanging around the manufacturing facility. It would be a kid’s dream factory visit with the tinging sound of the

We’ve made a predictable manufacturing system that has reduced inventory and cut what we scrap by 66% over the last two years David Bowles, Head of Operational Excellence metals resonant with a jackpot win at an arcade or casino.

The site has 30 high volume presses that make circulatory coin for the UK and up to 60 other countries at a highly secure site managed by the MOD. With the Royal Mint planning on opening a Visitor Experience Centre in 2013 many people are wondering (as with any good idea) why this hasn’t been done before. I wouldn’t be surprised if I’m not the only one to be tempted to jump in a box of coins while throwing my arms in the air screaming “I’m rich! I’m rich!” a la countless movie scenes.

“A large proportion of people that travel to Wales pass our building, so why shouldn’t we engage them with one of the oldest institutions in the world,” says Martyn Smith, supplier development manager. The arrival of paper notes, debit and credit cards has, seen no change (apologies for the pun) in the importance of the Royal Mint to the very fabric of society.

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Factory of the month The Royal Mint

As well as pound sterling the Royal Mint produces currency for up to 60 other nations around the world

However, with David Bowles, head of operational excellence admits that demand from the Treasury has halved over the last ten years for coins issued into circulation because of paper and card payments and the trend towards cashless economies in advanced countries.

Circulating the work With exports accounting for 70% of sales at the Royal Mint, the famously British company is witnessing strong growth in Africa as economies on the continent grow and countries without monetary systems set them up.

It is a completely different picture, with more demand for coins in developing nations because there are often problems with inflation. This causes coins to go out of circulation as they no longer have any value so the country has to bring a new coin in above it.

The Royal Mint’s exports are, as a result of historical ties, large in former British colonies. Political links may have loosened but the trade links remained with strong readymade relationships translating into the modern day requirements of circulatory coin. Nigeria, Kenya and SriLanka are now the Royal Mint’s biggest customers.

Paper-based economies have been adding coins to the currency mix recently, with Vietnam one example, opening up new export markets. “As economies mature they may require coinage at some level as they skip to card-based trading systems and that will continue to challenge the Royal Mint.”

The Royal Mint produced 4.1 billion circulatory and blank coins last year, taking on the challenge from its modern rivals and has done this by reviewing and reworking its entire manufacturing processes and systems.

Nine weeks to nine days The process, which previously took nine weeks with coins stored at various stages of the process, has been cut to nine days. Creating a nine day start to finish period for all products, David Bowles, head of operational excellence is looking to drive that down by a further two days.

“We’ve made a predictable manufacturing system that has reduced inventory and cut what we scrap by 66% over the last two years,” he says. Three years ago the manufacturing process left 10% waste. This has now been slashed to just 2%.

“Waste coins are picked up a lot quicker now,” explains Bowles. “The shorter manufacturing time means that messages [such as a machine breakdown and other common reasons for waste] can be passed back in less time and doesn’t take so long to correct. “[The process] didn’t run very well at all,” admits straight-talking Bowles. “We could get traffic between the different parts of process that meant you had to park coins and change operations within the process flow to complete other products. It was

1.1billion The Royal Mint issued

coins into the UK economy last year

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IES and what we do for our clients At IES we work with our clients to provide a solution that meets with the clients’ needs. We work from first principles without any fixed ideas of how the problem should be solved. The first step of this process is to listen to the client, establish their requirements and tailor a solution. In our laboratory we are able to analyse the effluent and carry out treatability trails.

As a technology focused company we use the latest technology and innovation where possible.

The solution provided to the client varies from supply of chemicals or bacteria, to upgrade of existing treatment plants, to design and supply of new treatment plant.

In addition to providing the solution we provide ongoing technical and engineering support including service contracts, training and monitoring of effluent plant performance.

We establish long term relationships with our clients so that we are the first port of call for any issues connected to their effluent treatment.

The Royal Mint The new Effluent Plant has been fully commissioned and has been operational for over a year. The filter cake is currently being composted and other reuse options are being investigated.

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This reduces the Royal Mint’s waste management’s costs and carbon footprint.

The next stage of the Effluent Plant Project is to commission the reverse osmosis plant; this will allow the Royal Mint to recycle up to 50% of the Effluent as demineralised water. Not only will this see a saving in the cost of Effluent disposal it will save the cost of purchasing town’s mains water and converting it. The demineralised water is used in the Plating Plants on site.

Other projects included on site are Cyanide Oxidation and improvements in Electroplating efficiency.

Investment in technology We have invested heavily in our laboratory facility and analysis instrumentation includes state of the art ion chromatography and trace analysis for metals and other contaminants using voltammetry, this allows analysis down to parts per billion.

We have a team of chemically qualified personnel that has been expanded with the addition of an experienced graduate chemist and a laboratory technician.

We are building on the sulphate technology we developed by sponsoring a pHD student at Northumbria University. It is our intention that the pHD student will join the company as an employee

at the end of their studies. The research includes filter cake re-use, advanced oxidation, improvements in biological treatment efficiency.

What our clients say.

“IES have provided the Royal Mint with a number of technical solutions to challenges encountered within our effluent treatment system. This has allowed us to refine our effluent treatment processes to make them more efficient and cost effective. IES is a forward looking company who provide state of the art techniques that allow process optimisation whilst delivering environmentally sympathetic results.”

Steve Clode, Engineering Project Programme Manager, The Royal Mint At IES we are committed to providing our clients with innovative, technically advanced, tailored solutions with ongoing support. We deliver improvements in environmental performance and optimize efficiency.

Contact details: Integrated Effluent Solutions Ltd

Unit 32 Enterprise City, Meadowfield Avenue, Spennymoor, County Durham, DL16 6JF

T: 01388 827395 E: info@effluentsolutions.co.uk W: www.effluentsolutions.co.uk

Factory of the month The Royal Mint

what we would describe as organised chaos but with the improvements made we now have much more control and decisions are made more scientifically based on capability, capacity and availability.”

But what enabled such a rapid improvement? Quite simply, it was being bold. The Royal Mint has implemented an entirely new way of manufacturing coins, a process which had remained largely unchanged for quite some time. It has substantially reduced the time it takes to perform both the old and new process.

The operational excellence team agreed a go live date for the process change and went out and did it. As part of

Royal Mint at a glance Location

Llantrisant, Wales

Revenue

£313m

Operating profit £9.2m Employees

800

Customers

Supplies coins, blank coins, commemorative coins and medals to around 60 countries every year.

Markets

30% domestic, 70% export.

Key export markets

Africa, Eastern Europe & Asia

Points of interest

The Royal Mint can produce 90 million coins and blanks a week

History

The Royal Mint originated more 1,000 years ago during the reign of Alfred the Great and begun a 500-year stint in the Tower of London in 1279. The Royal Mint’s current headquarters in Llantrisant, South Wales, in 1968 ahead of the UK’s move to decimal coinage.

ensuring that the changes become business as usual, the company holds daily flow meetings to ensure that operations are uninterrupted with no delays.

Bowles, who joined from Tata Steel, which supplies the Royal Mint with 20,000 tonnes of steel a year from Port Talbot, just west of Cardiff, established detailed capacity planning. A bespoke materials resource planning (MRP) system supported the transformation of a mindset from how many tonnes are made to the speed at which it can deliver.

Different coins have different manufacturing times due to complexity and size. “The capacity planner looks at how long it takes, the forward order book, the forward forecast and instantly tells us where we are under and over capacity because it knows how long each process takes.”

We are looking to change so that we are held up as a global industry leader Gail Roberts, Supply Chain Director This has resulted in an improved stock management and cash flow, reducing its stockholding by 50% over the last two years.

Led by Roberts, the Royal Mint has forged closer partnerships with its suppliers as it moves towards a just-in-time philosophy, something that takes a lot more bravery to implement than other companies due to the importance of its product.

The Royal Mint is proud of its long-term relationships with suppliers and works closely with them through its ‘working together’ programme to identify the value stream and focus on total acquisition cost rather than price. This programme has delivered in excess of £8m value improvement to the business in the last three years.

The former Tata man adds that a lot of engineering projects have been undertaken to improve the reliability of machines both internally and with suppliers. “We have a new impetus and are pushing to do more for customers, providing more reliable delivery as the manufacturing times have been shortened. Being more reliable and having taken a lot of the cost out is helping us to win more contracts.”

New steel Spurring this new impetus was a wave of new management figures that arrived with new ideas.

In 2009 Bowles arrived from Tata Steel, while just two weeks after Gail Roberts was brought in as supply chain director after roles at Tarmac and Allied Bakeries. Senior management had a complete makeover with Adam Lawrence

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Cookson is a leading supplier of fabricated precious metals in the US and Europe with blanks for coins and medals supplied to major Mints all over the world.

Cookson’s international reputation for quality precious metal blanks production is unsurpassed due to their peerless expertise in casting, blanking, rolling and thorough quality control procedures.

Cookson Precious Metals.

Specialist suppliers of precious metal blanks to major mints worldwide www.cooksoncoinblanks.com

Cookson Blanks ad FINAL.indd 1

We ensure that our blanks are manufactured to each customer’s unique specifications providing a bespoke service for a product that needs to be tailored for your production needs and methods. We have large scale capacity in our new production facility producing blanks in all alloys, shapes and sizes either rimmed of unrimmed.

We provide a customer service experience that is aimed at working in partnership with our clients.

Working together to deliver the exact product required to your delivery needs cost effectively, with great metal management and finance procedures.

13/11/2012 17:45

Cookson Precious Metals & Sempsa C ookson Precious Metals & Sempsa were proud to announce the opening of their new coin blank production workshop in Madrid in August 2012. The new production facility was designed using the tools of the companies Six Sigma ethos to provide an increase in capacity to enable Cookson’s to keep pace with its growing coin blank business. The workshop dramatically improves material flow and has had the result of increasing stock turn for commodities such as gold and silver which need to move fast through the business to minimise cost.

The company supplies precious metal blanks for coins and medals to major mints across the world and the new production facility will help build on Cookson’s international reputation for quality precious metal blank production

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which is unsurpassed due to two primary objectives says David Fletcher European Product manager.

“Firstly we ensure that our blanks are manufactured to each customer’s unique specifications providing a bespoke service for a product that needs to be tailored for their production needs and methods. Secondly we provide a customer service experience that is aimed at working in partnership

with our clients. Working together to deliver the exact product required to their delivery needs cost effectively with great metal management and finance procedures” The cooksoncoinblanks.com website gives more information on their coin blank services including the latest metal fix prices, customer testimonials, news and events. It also has a free download of their latest brochure.

For further details Cookson / Sempsa can also be contacted as follows: David Fletcher Tel: +44 7971 112618 Email: david.fletcher@cooksongold.com Carlos Gutierrez Tel: +34 629 585 963 Email: cgutierrez@sempsajp.com

Factory of the month The Royal Mint

appointed chief executive on January 1 2011, having joined the Royal Mint in 2008 following roles at Catalent Pharmaceuticals and Sterile Technologies.

The message was process, process, process – with new eyes being cast upon traditional ways of manufacturing coins to make more money for everyone. At the same time, the Royal Mint has a long-serving and loyal workforce that know the business inside out, carrying the business into the 21st century.

The word enabler is thrown around a lot by businessmen but there is no doubting that the three letters Ltd has supported the company’s heavy investment, with The Royal Mint officially vested as The Royal Mint Ltd on December 31, 2010.

If a product never reaches the replenishment point then it never gets manufactured David Bowles, Head of Operational Excellence

What does this mean? First of all the company can now borrow money on the open market rather than from the Government, vital for securing the capital needed for longterm growth. Although it is still government-owned it is more free to operate and has taken several responsibilities away from government, such as pensions. Summing up, Bowles states, “It is a commercial entity in its own right now rather than an extension of the civil service.”

The Royal Mint issued

434million pennies last year

Flexing manufacturing muscle And the Royal Mint’s new business flexibility is being matched in the skills department too. To support the massive reduction in manufacturing times, the company has upskilled a wide number of staff so people can move between different operations, such as annealing finishing and striking.

While boosting labour productivity, another knock-on has been that this has created a greater awareness of operations before and after a person’s usual station, supporting a higher volume of continuous improvement ideas. It has also made the Royal Mint more efficient in it use of agency staff, which it can have up to 150 (on top of its 800 employees) at any one time. Why is this important?

There is a cycle in commemorative coin making that has boomed in the UK at various points over the last few years with the Queen’s Jubilee and the Royal Wedding of William and Kate. Take regular coin-boosters like Christmas into account and it’s easy to see the benefits improving labour flexibility.

Time is of the essence and the Royal Mint is set to have improved despatch to commemorative wholesale customers to 100% on time, will have recorded despatch of commemorative coins through its own sales channel to 90% of individual

Cycles in commemorative coin demand impact workforce management at the Royal Mint

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customers within 3 days, supported by the production of 100% of circulating coin orders on time by the end of 2013.

Buying time

by using plating rather than copper and nickle alloys the Royal Mint has cut production costs

The Royal Mint sells most of its commemorative coins during an event so quicker processing times is enabling it to make less in anticipation of the even and replenish stock to tighter replenishment figures. It takes less than a day to make commemorative coins and Bowles explains that “if a product never reaches the replenishment point then it never gets manufactured, reducing the amount of stock that gets either doesn’t sell, or sold at a reduced cost.”

One challenge is that commemorative coins come with bespoke packaging that can take up to three days to produce as the box, certificate and booklet is all outsourced. The design and operations team work closely with the supply chain team to speed up its time to market.

“There is a shortage of European sources for our type of packaging products and no doubt our lead times could be significantly reduced if a more local source were available,” says Bowles. “But the Royal Mint has a strong supply partner based in the Far East that consistently meets all the required ethical, social and environmental policies as laid down by the supply chain team.”

“The products we buy from Asia are high quality and low cost, [the UK’s] got to compete with that. People say it’s much better quality if you buy from the UK but that’s not what we find,” adds Bowles.

With exports making up 70% of the Royal Mint’s sales, it needs to plan for all occasions thrown up around the world.

Whether it be political changes, the passing of a head of state or an Olympics coming to town that the country would like represented on its 50 pence – the flexibility of skills and workforce size

The products we buy from Asia are high quality and low cost, [the UK’s] got to compete with that David Bowles, Head of Operational Excellence

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Factory of the month The Royal Mint

The Royal Mint aims to increase sales of gold bullion by 65% by 2014

enables the Royal Mint to react to demand that can come from the unlikeliest of places that are hard to predict.

With minting’s important contribution to the very fabric of society, the Royal Mint, with its status as one of the world’s top five minting operations, has a plan in place should there be any significant change within the eurozone.“We are one of the only facilities that could possibly step in and help out should the situation for certain European partners become untenable [and need to leave the euro],” says the man from Swansea.

The Treasury and the government plan for different scenarios, one of the past political debates being whether Britain should join the euro. The Royal Mint is kept abreast of decision making so it can evaluate how long it would take to carry out a certain project – such as adding £2 coins into circulation, or other any major changes.

Processing a new era As fluffy as culture transformation may sound to the metric driven or the cynical pragmatist, Royal Mint’s excellence programme has built an infrastructure with a ‘get things done attitude’ around the site.

Most business activity is now carried out and aligned to the operating principles of the Shingo model.

The Royal Mint has made some large investments over the last few years, with a state of the art effluent plant, new plating technology and new furnaces all up and running.

Each investment has not been about just replacing old with new but about understanding what the best available technology is and how it helps the company with its aspiration to be seen as the best mint in the world.

In five years the Royal Mint plans to be a zero harm and zero waste to landfill site. It is lowering its landfill targets each year, aiming to send no more than 500 tonnes to landfill in the year to April 2013.

Following the recent start-up of the new effluent plant things are now up and running and Roberts, along with

the rest of the management team, has her eye on coming in under this figure. Waste to landfill from the site currently stands at 300 tonnes but with the chemistry balance of the effluent plant now clearly where it needs to be going and nothing from it going to landfill, Roberts’ may well be right.

Plans are afoot to recycle water from the effluent plant that is currently discharged as it is clean of all chemicals. The Royal Mint will connect it to a reverse osmosis unit that will reuse water back into the process so that it doesn’t need to extract water.

The company has set in stone a web of targets across the business, including reducing energy usage by 5%.

Golden Eye One of its more ambitious aims is to increase sales of gold bullion by 65% by 2014. It already has the expertise so now it is taking the yellow bar road by buying in gold bullion blanks and striking a sovereign to add value.

Admittedly the Royal Mint is a small player at the moment but it is investing and will use its 1,000year strong reputation to enter the market.

Gold tends to double in value every 20 years.

There aren’t many investments where you can guarantee that sort of return.

The Royal Mint is paving the way for a better, shinier future. You don’t become an old company without making new money and it is doing exactly that. I’d put money on the Royal Mint being here after I am, with strong export growth guaranteeing it a long future despite the growing use of card payment.

The case for physical money remains with the fragility of our digital banking system being severely tested over the last four years, propped up only by government intervention. @thomasmoore88

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The lean cell designs cost £1m to build and saved 50% space on previous layouts

Enter the

O dragon Tom Moore visits Siemens’ award winning Congleton plant to find out how a UK manufacturing facility can make ubiquitous electronics components competitively in the UK

n my way to the Siemens factory I’m woken by a phone plugged into a Siemens socket.

Leaving the house I’m captured on film by numerous CCTV cameras, the likelihood is that one of them was made by Siemens. Arriving on a Siemens train with my laptop in another Siemens plug, I ride the taxi through countless traffic lights operated and maintained by Siemens.

Siemens is everywhere and nowhere at the same time. Its broad reach into our daily lives goes almost unnoticed, yet the inverter technology at the Congleton site in Cheshire alone reaches thousands if not millions of people a day. Variable speed drives controlling the speed of motors driving production lines and baggage-handling systems around the world came from this quiet pocket in the North West.

Competing with the Japanese “Manufacturing electronics components more cost effectively than Far Eastern suppliers is unusual,” asserts proud Finbarr Dowling, managing director at Siemens Congleton, which exports 98% of its products. Tech-hungry China is its largest market.

“The ‘Made in UK’ brand is more respected elsewhere in the world than it is on British shores,” says Mr Dowling.

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Electronics Siemens Congleton

“My most successful products sell best in China, which has grown rapidly. The Chinese know the value of world class engineering and are prepared to buy it. Products stamped with ‘Made in the UK’ are something we should be singing about from the rooftops.”

But Dowling is irked that Siemens’ Crystal, London’s newest landmark building, a glittering glass structure dedicated to improving knowledge of urban sustainability, is literally and culturally overshadowed by the high rise towers of Canary Wharf. Many of these financial hives are filled with ranks of the qualified engineers the UK needs in industry if Osborne’s vaunted March of the Makers is ever to become a reality.

Competing with the City for a shrinking talent pool is a challenge. But Siemens Congleton has, and continues to attract some of the bigger available fish. Its 60 on site R&D engineers design a lot of the products that are made at Congleton and the team has just finished developing a new range for manufacture in Chinese factories as it “had the skills and they didn’t.”

Skills ladders With 500,000 boxes of electronics leaving the door every year, the plant is a hotbed of talent feeding many of the top jobs throughout the company’s 60 UK sites. Martin Hottass, UK skills partner at Siemens explains that the competitive pressures on Siemens Congleton have made continuous improvement a speciality for its staff.

Strolling through the canteen which, Dowling notes, serves food that is all produced within 15 miles of the site, pictures from previous eras show Congleton’s success in developing the people that keep it in the UK. Above Congleton sits Jürgen Maier, managing director of Siemens UK industry sector, whose journey is tracked from the back of the Congleton crowd as a young graduate on the left side of the canteen wall to the forefront in a more colourful image taken when he became head of the invertermaking site.

You may remember The Manufacturer’s factory visit to Sudbury, which makes point-of-care testing from diabetes checks to high-volume urine lab testing platforms. Yes, you’ve guessed it, managing director Neil Eardley arrived from Congleton in 2011.

“To be a manufacturer of electronic products in Cheshire is really bucking the trend,” explains Congleton’s boss Dowling. A lot of people like to describe themselves as passionate but this man really is, going into detail about the company’s cleaning arrangements and the site’s decision to set up a wormery, areas that wouldn’t come within the scope of most senior managers. “We take the

50% of new apprenticeships and graduate job at Congleton are filled by women

Siemens has spent a large portion of its capital expenditure on PCB machines

topic of sustainability extremely seriously, whether it’s the contribution from the worms towards our zero landfill target or the deployment of the latest Siemens building management technology. We’re all over it.”

The search for productivity Dowling took the hot seat at Congleton in the knowledge that it had a sturdy framework of best practice in place. But even so it would be hard to deny that he is doing well for the site.

“To survive as an electronics manufacturer in this country you have to be world class,” he says.

So would you define Congleton as world class?

“No, not yet and that’s not really the point,” Dowling answers. “Our mantra is simple, we need to do something better today than yesterday, it’s about continuous improvement,” states the MD tasked with finding 5% productivity gains each year.

The Made in UK brand is more respected elsewhere in the world than it is on British shores Finbarr Dowling, Managing Director, Siemens Congleton

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Siemens Congleton at a glance Established

Began in 1971 as a warehouse and switchboard workshop, the company now manufactures in excess of 1.3m motor drives each year

Core markets

The inverters produced at the site are used in a wide variety of applications, including baggage handling, pumps, factory automation and heating, ventilation and air conditioning

Central 2% domestic 98% export. China geographical and Germany are its biggest markets customers with Siemens Congleton exporting to 78 countries Workforce

Employs 500 people, including 60 R&D engineers

Did you know?

Siemens Congleton provides drives and gears for hybrid buses and wind turbines made in the UK

Congleton delivered 6.1% productivity savings last year, with a lot of those savings coming from different divisions of Siemens, one benefit of being part of the giant German manufacturing collective that is Siemens.

“I can’t determine if gas prices increase, what I can determine is our use of electricity and gas,” asserts Dowling. The site has recently been fitted with the latest sensory and lighting equipment from Osram, another Siemens company.

Electricity usage has dropped by 5% and gas by 50% over the last year. When you make a product to save energy in other factories, you inevitably have your finger on the pulse for the latest innovation at home.

When a new energy saving device rolls off the production line in Congleton, the site is one of the first to benefit. Dowling notes the installation of its own inverter technology so that electric charge can change direction and move around the factory more efficiently. “A factory full of electrical motors not using inverter technology typically spends around 50% more on electricity than it needs to,” says Dowling. “Motors are the biggest reason for electricity consumption so by using our technology you can save money and we’ve done that ourselves.”

But after plucking the low hanging fruit by fitting more energy efficient boilers, lighting controls and air compressors, Dowling needed to forage for further productivity gains.

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A breath of fresh air “You have to question existing thinking,” he says. “Certain processes had to be air conditioned and you ask why.

Then you find out somebody 15 years ago produced a report saying that surface mount [printed circuit board manufacture] needs to be air conditioned, which turned out not to be true. After finding this out we moved from air conditioning to Breezair technology.”

Breezair, which uses evaporation to cool air, claims it can be up to 90% cheaper to run than air conditioning. Dowling happily throws his weight behind the technology by saying that “the energy saving is impressive, reducing costs by £100,000 per annum.”

Next on the factory’s shopping list will be an energy management system with real time data as information currently arrives at 30 minute intervals and is hard to trace.

“We’re deploying more meter points to see [our usage] in real time. We need that data. As an example, all our printed circuit boards (PCBS) are coated with material to protect them in nasty environments. It’s energy intensive and new technology will be able to tell if our wave soldering machine should be turned off, put on standby, or left on at weekends.”

The site has spent between £3m and £4m on capital equipment each year for the past decade to keep the plant competitive. Even “when times got tough nearly four years ago and the workforce to a man and woman were prepared to give up 20% of their salary to take a four day week for three months,” said Dowling.

A large chunk of recent investment has gone on surface mount, purchasing five £700,000 machines that can place a lot more components on the PCBs, automating more of the process. The machines, made by ASM Pacific Technology, are more accurate (so less wastefull) and quicker and place components smaller than any human could attach on both sides of the board.

As we stand and take in the speed at which the PCBs whizz through the process, Chris Rowlands, head of manufacturing at Siemens Congleton, informs me that the factory would have looked completely different had I been standing in the same spot just one year ago.

Cell evolution As a result of a 26 lean cell design this year, the factory has doubled output on a control unit in its Sinamics drives product family. The employees redesigned the area themselves, starting with cardboard and tape and then planning out the cells and where they fit on the production floor with mechano-like structures.

Spending £1m on the new design, the factory has seen a 50% space saving that has given it more manufacturing space to produce new products and existing ranges.

Asked what technology excites him the most, Dowling explains, “Our existing product is integrated with the control board and power module in one box. Future products have modularity so that the customer can mix and match, perhaps choosing to have separate control units as that is where a lot of the communication technology is.”

Regenerative drives also feature on his list, quite understandably given the energy savings that the technology can provide. “It is a bit like Kinetic Energy Recovery Systems [KERS] in Formula One. When the brakes are applied, it

Electronics Siemens Congleton

regenerates electricity - putting it back on the grid. Not only is it using motion control to save energy but when applying the brakes to the motor regenerates it.”

Time is of the essence A lean redesign of Congleton’s warehouse has cut its size by 50%. Having a smaller warehouse saves time and keeps storage more organised. With the Japanese earthquake and tsunami crisis affecting Siemens ability to send its variable speed drives on time and in full (OTIF) in 2011. Its performance during this period sat at around 85%. But the warehouse redesign has played its part in driving this up to a 95.2% average over the last 12 months and 99% over the last six.

Less man hours are required in production due to the more efficient layout. Supporting the in full requirement of OTIF, the new pictar lighting system indicates each component, connector, label and information leaflet that needs to be packed before a product leaves the factory.

The storage space is modular so uses minimal space, lighting up each cubby hole in the sequence required for packing, ensuring that nothing is left out. Almost like an arcade dance machine, lighting up to show the dancer which steps to move onto, the site has installed 10 systems in the last two years at a cost of £10,000 each.

Around the world If the factory wasn’t in this leafy region of the north west, it would most likely be in Germany or China, two of the most popular destinations for goods made here.

After the size of the workforce shrunk during recession, the Congleton team is now larger than it has ever been, employing 520 people.

However, having learnt from the lessons of the recession, 25% of operators are third party workers. This has allowed for greater flexibility at a time when the Chinese economy has cooled. “There’s been a lot of recruiting in the last 12 months but we’ve experienced a slowdown in China and Germany so we’ve been able to flex third party workers.”

As at most companies, shop floor engineers are on variable hours so that when a particular cell is quiet, people go home and Siemens trade back the hours.

Keeping a keen eye on its biggest geographical marketplace and with China going through a once in a decade leadership change, Dowling says that the slowdown has been hard to get to the bottom of. “China has been pretty flat all year. There is a deceleration of the economy but not at a rapid rate.” While Congleton exports to 78 countries, 10 countries make up 90% of that. Dowling predicts that India will be a large growth market as more of the country benefits from electrification.

The future Repeating the problem faced by many manufacturers, both Hottass and Dowling are most worried by skills as the supply of young people dwindles. From 2010 to 2020 the amount of 18 year olds entering employment, apprenticeships or higher education will fall by 110,000 from 800,000 people to 690,000.

Despite this, Dowling and Hottass are convinced that lessons of the past have been learned. Deputy Prime Minister Nick Clegg and Business Secretary Vince Cable both visited a Siemens plant in Berlin, showing engagement

The new PCB making machines can components more accurately in less time, which equals less waste all round

Manufacturing electronics components more cost effectively than Far Eastern suppliers is unusual Finbarr Dowling, Managing Director, Siemens Congleton with manufacturers at the highest level not just in the UK, but internationally, in order to address a rebalancing of the economy and perceptions about skilled career destinations.

Hottass explains that a substantial amount of post-graduates at English universities studying Electronics are non EU-based and return to their home country, a problem that further concentrates an already small pool of talent in the UK. But Congleton does all it can to make the most of every skilled individual available. With the number of women in management roles a topic of hot debate in the UK, Congleton differed from the rest of the sector and its sister Siemens companies (where women made up 8% and 12% of new recruits). For the last two years 50% of Congleton’s intake for graduate and apprentice positions have been women.

With Congleton’s history of producing leaders in industry, its factory floor could be harbouring the future managing director. And guess what? That individual could be female. @thomasmoore88

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lastword The

2012:

when manufacturing drove business policy

While resisting use of the word ‘watershed’, 2012 was an important year for UK manufacturing, and for Great Britain, says Will Stirling.

N

o review of 2012 would be complete without mentioning the London Olympic Games. Great Britain won 65 medals, 29 of them gold – an outstanding achievement relative to our population.

And Bradley Wiggins won the Tour de France, the first Brit ever to do so. It’s a shame he wasn’t riding a bike made in Nottingham and not Taiwan, but hats off to Wiggo.

Manufacturing had a mixed year with output up and down but overall flat. Employment in manufacturing rose in the first two quarters of 2012 but Europe dominated the news.

Thoughts turn to a difficult 2013 in our major export market – though happily exports to nonEU markets were up 10% on the year to September. Still room for improvement, but a positive step.

Some sectors had a sticky year, but others punched above their weight. Output of electrical equipment was up by 21%; metal products up 23%; motor

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vehicles up 27%; mechanical equipment up 36% and other transport, including trains, up a massive 43%.

And despite the lamenting that larger companies are “sitting on unprecedented cash piles” (p21), manufacturers invested at a faster pace than the rest of economy. Since 2009, spending on capital equipment in nonmanufacturing sectors rose 7%; in manufacturing it rose 14%.

Policy which pleases It’s so easy to pick holes in government business policy but, in the round, there were some very important and encouraging announcements in 2012.

Vince Cable announced his Industrial Strategy in September, a framework built on five pillars: sectors, skills, technologies, a business bank and government procurement.

Work within some pillars was established before the announcement – for example, the establishment of the Aerospace Growth Partnership – and more work is scheduled.

What is missing is rock-solid evidence that all parties, and departments within government, recognise the Strategy and give it their unambiguous support.

Funding for Lending was introduced early in 2012 as the latest scheme to kick-start the economy. Banks borrow from the Bank of England about one per cent cheaper than the market interbank rate, and they have to pass the savings on to borrowers.

Have your say at: www.themanufacturer.com

Supported by business groups like EEF, by September the scheme had signed up 13 banks to borrow cheap funds totalling £60bn. This is short of its £80bn lending goal but nevertheless, Richard Holden, head of manufacturing at LloydsTSB, said the FLS is the reason that his loan portfolio to the manufacturing sector rose “quite significantly” in 2012.

On skills, 500,000 people started an apprenticeship in the 2011-2012 year – more than the number who became undergraduates. There were two reviews, the Holt Review and the Richard Review, a BIS Select Committee report and several business group surveys on apprenticeships. The conclusion? Apprenticeship standards should rise, employers should have more control of the funding and the composition of their own apprenticeships, and they should last for one year minimum. While some will say “I could have told you that”, the Richard Review proposes a useful, business-friendly means to finance them via tax credits.

The Heseltine Review in November proposed devolving power and money from Westminster to the regions. So why did you abolish the Regional Development Agencies? Some business groups warned that giving the volunteer-based Local Enterprise Partnership board members a load more money and responsibility in areas like skills funding might not be so prudent. But the principle of devolving power to the regions will be popular with manufacturers.

The Technology Strategy Board launched a string of competitions to stimulate and help fund company projects in fields like supply chain, low carbon vehicles, composites, marine R&D and the digital economy. When it comes to funding, some people feel that manufacturing projects are at a disadvantage to science research; the science budget is ringfenced, and the Research Councils are well capitalised. In 2013 with growth so flat, there will be calls to increase and ringfence an “Engineering and Manufacturing Budget”. @WRStirling Visit themanufacturer.com/2012highlights for more highlights of 2012

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