The Manufacturer February 2011 issue by The Manufacturer

www.themanufacturer.com February 2011 Vol 14 Issue 02

spikey

Retirement’s

SMEs fear administrative burden of default retirement age abolition

Interview Alan Dunn

Operations director, BAE Systems Submarine Solutions

Regional Focus – South East

Innovation clusters of the South East

Special feature – Manufacturing in Scotland

Business improvement with Scottish Enterprise

Energy and Sustainable Manufacturing Energy purchasing strategies

In partnership with:

SHARPEN YOUR COMPETITIVE EDGE. Boost your business intelligence with ours. And join the thousands of British manufacturers who benefit from our unique business services, insight and influence. Not to mention training, consultancy and more.

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Editor’s comment

Pfizer’s exit ‘beyond our influence’ but a timely nudge to Mr Cable Pfizer’s decision to close its 2,400-strong R&D facility in Kent was based on a long term global R&D strategy – a decision formulated perhaps years, rather than months, ago – and is not about the UK environment. This was a statement by Dr Richard Barker, director general of the Association of the British Pharmaceutical Industry (ABPI). But he also remarked that “it is clear that the life sciences sector in the UK must not be taken for granted. Looking at the bigger picture, there is an urgent need for the UK to make itself more attractive for investment, or risk growth in the world’s leading science-based industry going elsewhere.” A multinational closing a world-class R&D centre in the UK provokes the customary media speculation frenzy: “Will other companies follow? When production moves overseas, R&D eventually follows” – the latter taken from Larry Elliot’s comment in The Guardian, “Pfizer exposes Britain’s fantasies”. Global companies move their R&D centres and factories regularly if not often, and sometimes the decisions are made beyond the influence of the finer components of a host country’s business environment. But as Mr Elliot says, Pfizer has cast an unwelcome shadow over a sunny period for British industry. Esther Smith, a partner at Thomas Eggar LLP, says that Pfizer’s move reflects a wider trend of restructuring taking place behind the scenes at many big companies, who are “rightsizing” and preparing to move fast to jump on new opportunities. However, this does not always mean slashing headcount. “Many companies are redeploying staff around the organisation to become more nimble and lean, without necessarily reducing total headcount,” she says. Manufacturing operatives, for example, can be moved into sales and planning roles when processes become more automated. While the Government seeks input for its Growth Review for Advanced Manufacturing, the ABPI has submitted the pharmaceutical industry’s barriers to growth. Two stand out – the streamlining of regulation and government procedure in clinical trials, so that the NHS can put into practice the drug industry’s innovations more quickly, and the skills gap. Uptake of new drugs by the NHS is slow compared with other countries, the ABPI says. Even if Pfizer decided to wind up the facility in Sandwich years ago, a clear methodology for tackling these two big issues is vital to prevent more global companies jumping ship. This issue of TM tackles some meaty subjects, like whether abolishing the default retirement age has accounted for the cost of administration to SMEs (p32), and the savings to be made from an effective energy purchasing strategy (p46). I hope you enjoy it.

Cover image: Winning entry in EEF’s photo comp, youth category, Melissa Garratt’s photo of a missile test chamber at MBDA in Bolton

Will Stirling, The Manufacturer The Manufacturer in partnership with EEF, the manufacturers’ organisation. Working together to secure the future of manufacturing.

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News and features 04 News

Manufacturing news

10 Manufacturing appointments On the move

Find out who’s heading where in manufacturing

12 The big picture

Maintaining momentum

Professor Sir Mike Gregory of the Institute for Manufacturing asks how the momentum in manufacturing can be maintained

13 Economics

Apprenticeships are for life EEF’s Steve Radley discusses the long-term value and importance of apprentices

14 The legal low down Whose terms?

Thomas Eggar LLP discusses the importance of ensuring that contract terms are properly established before supplying an order

15 Business as unusual

UK vs China in innovation contest Anand Sharma urges companies not to neglect R&D

16 Lead story

Goodbye to all that Jane Gray discovers the pros and cons surrounding the intention to abolish the Default Retirement Age

20 Interview

The boy Dunn good Alan Dunn, Operations Director at BAE Systems Submarine Solutions, talks talent spotting, teamwork and tactics

24 Regional Focus

South East England

30 How do they make that? Furniture fit for a Pope

In 2010 specialist furniture makers N.E.J. Stevenson were commissioned to design and manufacture furniture for Pope Benedict XVI’s visit to the UK

32 Leadership, People & skills

Working hard or hardly working Tim Brown investigates some techniques to get the best out of your workforce

34 JCB Academy diary

32 2

Students Ella Pilsworth-Straw and Alice Trotman share their views on academy life

35 Employee of the month

Malcolm Holman of Brighton Sheet Metal on reaching 50 years with the company

36 EEF Insight

Health and safety issues

Contents Lean manufacturing 38

CRM results survey 72 IT in manufacturing Cut to size 74

Can we have it all?

Jane Gray asks if lean can really let manufacturers have their cake and eat it, or if there is always compromise to be made

Energy and Sustainable 46 Manufacturing

First comes the money, then comes the power

Coming to grips with the energy market can mean considerable savings but the devil is in the detail finds Tim Brown

Innovation, design and the product lifecycle

For smaller manufacturers, the best ERP solution combines flexibility and affordability, says Malcolm Wheatley

IT News 78

Keeping you abreast of what’s new in manufacturing IT

Training Supplement

CAM software takes next step

Brian Davis’s round-up of the CAM software market’s latest innovations

Special feature

Manufacturing in Scotland 64

Finance and Professional Services

Have a little patent

This year could finally see the introduction of a single patent law covering a multitude of European countries, Mark Young discovers

Produced in association with Semta, the Sector Skills Council for science, engineering and manufacturing technologies in the UK, TM’s Training Supplement explains why skills investment makes business sense for manufacturing.

Manufacturinginaction

Samworth Brothers Group Feature

Samworth Brothers Foreword Bringing manufacturing to the table – by Brian Stein

Tamar Foods The secret ingredients

102 Ginsters 21st century pasties 109 Kettleby Foods The real meal 114 Saladworks A tasty mix 118 Gripple Getting a grip on business 120 Mann+Hummel UK Engine of growth needs a best in class filter

Newsinbrief H u m a n reso u rces

Pay settlements for employees at UK manufacturing companies rose slightly in the three months to the end of 2010, data from EEF suggests. The manufacturers’ organisation’s latest pay survey shows settlements increased to 2.2% in the three months to the year end from 2.1% in the three months to the end of November. Pay freezes fell slightly but remained at one in five of all settlements. Ms Lee Hopley, EEF chief economist, said: “Historically these figures are at normal levels and continue to reflect a return to more normal patterns of wage negotiation.”

Almost half of Sheffield-based wire joiner maker Gripple’s employees recorded a 100 per cent attendance record in 2010. As reward, the 81 employees, out of a total of 170, received a store voucher and enjoyed special buffet laid on by the company. One of the employees received a £500 voucher through a ballot. Mark Edmonds, Gripple’s managing director, said: “I must congratulate these people not only for their dedication but also for their remarkable health!” L egisl a tion

EEF is calling on the UK to form an alliance with other EU countries to remove red tape around health and safety legislation. The European Commission has proposed extending regulations in risk assessments for back pain and for companies working with radiation. However, in its annual health and safety survey, the manufacturers’ organisation found that companies are keen to avoid further legislation, after they reported in heavy majorities that they feel the current rules are sufficient and that they would prefer a case study approach for any additional guidance.

The Government has proposed a plan to reform the employers’ tribunal system, in a bid to make it less costly and complex and to limit the number of spurious claims. The main change is an increased qualifying period (from one to two years) for unfair dismissal claims, which will give businesses greater confidence to hire new staff. The Government will also consult on the introduction of a fee to bring a tribunal claim.

A u tomoti v e

Ford of Britain to celebrate centenary On March 8, 1911, three years after Ford’s ‘Universal Car’ the Model T was unveiled in Britain, Ford Motor Company (England) Limited was incorporated to look after the most important market outside North America. Later the same year, Trafford Park, a suburb of Manchester, played host to Ford’s first UK factory with a disused tram works converted to Model T assembly opening in October. Four-man teams built individual vehicles until Henry Ford’s revolutionary introduction of the moving assembly line in 1913. Thus, next month the company celebrates 100 years in operation. Ford directly employs over 15,000 people in the UK, many in highly skilled roles developing and building high-technology, fuel-efficient, low CO2 engines. The Ford plants at Bridgend in South Wales and Dagenham in east London have the combined capacity to assemble two million engines annually and one in three Ford cars globally is powered by a

UK engine. A further 100,000 jobs are supported through the Ford supplier chain and dealer network. Ford of Britain chairman, Joe Greenwell, said: “Ford of Britain has been in the fabric of the nation for over a hundred years and no motor company has touched more lives in Britain. Ford plans a yearlong centenary celebration with themed marketing campaigns to flag up this special year.

Ford’s Model T assembly at Trafford park

G ro w th re v ie w

Call for open doors at manufacturing summit Business Secretary Vince Cable and Deputy Prime Minister Nick Clegg have asked factories to open their doors for a week to give the public a true flavour for modern manufacturing. The pair hosted 100 manufacturers at a behindclosed-doors summit in late January in order to pool ideas from industry for the ongoing growth review. Delegates, from companies including GKN, Jaguar Land rover, Airbus and Siemens, heard keynotes from the Coalition ministers as well as Brompton Bicycle managing director Will Butler-Adams, EEF chairman Martin Temple and Ford of Britain chairman Joe Greenwell before

attending break-out sessions on topics including skills, climate change and investment. Said Mr Clegg: “I want our young people to see that British manufacturing offers well paid and rewarding careers. Not many of them will know that many electrical engineers are almost as well paid as lawyers and solicitors. “Throwing open the doors of our factories to the engineers of tomorrow will show them the satisfaction of making things is hard to beat.”

ManufacturingNews Aerosp a ce & defence

BAE opens new site BAE Systems has received the keys to its new £75m munitions facility in Washington, Tyne & Wear, which will ensure better supplies of ammunition to front line troops and secure 350 jobs in the North East. Beginning in March, production want their suggestions on layouts will be transferred from Birtley and workflow. to the new site, located south of The move constitutes a Newcastle, and will be largely remarkable turnaround since 2002 complete by the end of the year. when Birtley was losing money Employees will make the move and facing closure. The change in batches over the same period. is largely 15 year £2bn partnering A new high tech 250-tonne agreement signed in August 2008 forge has already been installed in with the UK Ministry of Defence. the new factory and other Birtley will be redeveloped for new equipment is up and housing following its closure in running in Birtley to ensure a summer 2012. seamless switch. “These are exciting times for our people,” says site boss Lee Smurthwaite. “All the Washington buildings are now complete and we want to get on with the move. We are taking employees round the new plant BAE’s Les Cooper, Simon Miller and Kevin Patrick at the with their managers new BAE site in Washington this week because we

H e a lth & s a fety

Four killed in industrial accident Four workers at a Great Yarmouth, Norfolk industrial site were crushed to death in January after a steel structure they were building collapsed on top of them. The four men – named as Tom and Dan Hazelton, Peter Johnson and Adam Taylor – were working as contractors at Claxton Engineering Services, building an extension to offshore oil rig drill provider’s offices. Buried under hundreds of tonnes of steel, a crane was brought in to lift the metal but the men were pronounced dead at the scene. Post mortem analysis found that all four died as a result of “asphyxia due to trauma”.

A spokesperson for Claxton said: “Everybody at Claxton is deeply saddened by what has occurred and the company’s thoughts and sympathy are with the families of the four men.” Claxton, a former Queen’s Award for Export Achievement winner, employs 100 people at the site. The Health and Safety Executive confirmed that it has launched an inquiry into the tragedy.

Newsinbrief A u tomoti v e

Following a torrid year, Toyota’s woes continued in January with the global recall of 1.9m cars, including 19,000 in the UK, owing to fears over potential fuel leaks. It is thought that slight cracks have begun to appear in the fuel pipes on the Toyota Avensis and Lexus IS250 and that these could widen and cause a fuel leak. Toyota says no accidents have occurred as a result but that the fault should be fixed by mechanics. L o w c a rbon

The Manufacturing Advisory Service South East has launched a free carbon footprint calculator so that companies can improve their environmental performance and pass on their credentials to customers. The Carbon Footprint Calculator calculates environmental impact and provides a free assessment report which explains the results and maps out practical steps for immediate improvements. Government research found recently that businesses benefit from cost savings and better relations with investors and customers as a result of carbon reporting. The calculator is available at: www.mas-se.org.uk.

The Carbon Trust has created a new Green Growth Alliance with 30 of Britain’s biggest businesses with which it will lobby government to get Britain a bigger slice of the £3.2 trillion global low carbon market. In a survey, two in five UK manufacturing bosses said Germany is best prepared to take advantage of the £3.2 trillion global low carbon and environmental market. Only one in seven citing the UK as the most prepared nation. E x ports

High export orders are driving a strong manufacturing performance at the current time, according to the Confederation of British Industry. In the January Quarterly Industrial Trends Survey, a balance of +16% said that output had risen over the previous three months, compared with +9% in October. This was fuelled by growth in export orders (+13%), with domestic demand rising more modestly (+9%). Domestic demand growth was, however, stronger than had been anticipated in October (+2%).

Newsinbrief Aerosp a ce

GE Aviation, the US-owned provider of commercial and military jet engines and components, is creating 100 aircraft engineer jobs at its Wales facility. The increasing demand for servicing of the GE90 engine – one of the world’s most powerful engines, fitted to the Boeing 777 aircraft – is behind the creation of the new, highly skilled jobs at Nantgarw, Cardiff. The Nantgarw servicing facility turns over nearly £1.25bn and employs 1,100 people including 100 apprentices and interns.

Air refuelling equipment maker Cobham has acquired the share capital of Telerob GmbH, a privately-owned German-based defence equipment manufacturer, for Eu78m. Telerob manufactures medium and heavyweight explosive ordnance device (EOD) robots and response vehicles designed to deal with nuclear, biological and chemical threats. The company will become part of Cobham’s Mission Equipment business unit, strengthening the group’s ability to deliver robot products to fast-growing homeland security markets around the world. T echnology

Despite a short month and adverse weather, orders for machine tools and other production technology increased by 10% in December, according to the Manufacturing Technology Association’s latest survey. Technology providers also reported a 60% increase in invoiced sales and said they are confident of more business coming into the new year. With regards to employment, the trend remains positive with a number of MTA members looking to recruit in the new year. AU T O M O T I V E

Former trade minister Lord Digby Jones was on hand last month to cut the ribbon on a brand new £8m site in Stoke-on-Trent, North Staffordshire, for SME automotive supplier Olympus Engineering. The company, which makes precision machined parts for customers including Bentley and JCB, has moved to the new 82,000 square foot premises in Garner Street, Etruria from its old factory in College Road, Hanley, where it has been based since its foundation 11 years ago.

S kills

Insights and exaltation on offer during Apprentice showcase week Training is in the spotlight this month with National Apprenticeship Week 2011 (Feb 7-11) featuring over 450 events run by employers, partnering organisations and MPs. The week, organised by the National Apprenticeship Service, will see businesses, apprentices and partnering organisations come together to promote apprenticeships, celebrate achievements and discuss ways to improve the supporting infrastructure. It opens with a launch event at the BT Centre in St Paul’s where speakers will include Business Secretary Vince Cable, Skills Minister John Hayes, Mayor of London Boris Johnson and CEO of BT, Ian Livingston. Over 150 high profile employers have registered their attendance. Events then take place across the country, covering

all sectors. Many manufacturing companies are holding their own events throughout the week including Airbus which is holding an Apprenticeships and Work Experience Information Event at which attendees can speak to Airbus representatives about the Apprenticeships they offer. At Caterpillar’s Peterlee site in the North East, potential manufacturing and engineering apprentices will spend half a day working in a simulated environment, constructing a model of a caterpillar truck. For a full list of events see: www.apprenticeships.org.uk

P l a stic electronics

From Russia with chips Electronics company Plastic Logic, a Cambridge University spin-out, is set to receive up to $700 million in a deal with Rusnano – Russia’s state-backed nanotechnology corporation. In return, the Russian government will get a stake of around 25% in the UK company. For the first $300m, Rusnano is providing an initial investment of $150m as an equity stake in Plastic Logic and will provide partial guarantees for a further $100m of debt. This tranche will help finance the construction of a plastic electronics fabrication plant in Zelenograd, outside Moscow. Venture capital firm Oak Investment Partners, Plastic Logic’s lead investor, will invest $50m as part of the project investment plan.

Plastic Logic was co-founded as a spin-out from Cavendish Laboratory at Cambridge University by Professor Sir Richard Friend and colleagues in 2000. Its approach to electronics solves a problem in manufacturing high resolution transistor arrays on flexible plastic substrates by using a low temperature process without mask alignment. The company says its process simplifies the conventional amorphous silicon processes, using a novel mix of standard production equipment from display manufacturing and other industries.

ManufacturingNews E mployment

Remploy to trim payroll Workers at the Government’s Remploy factories – which provide employment for disabled workers – are set to be offered voluntary redundancy and help to find other work. There are 54 Remploy factories spread across the country which make a wide range of products including furniture, car parts and medical devices. Between them they employ 2,800 people. However, according to a statement from Remploy, the factories “have suffered the effects of the current economic climate and do not have the level of business that we need and anticipated.” It said many of its factories do not have enough work and are operating at less than 50 per cent capacity. “As a result Remploy is not fulfilling its mission to provide sustainable employment

opportunities for disabled people,” it continued. A voluntary redundancy scheme will now open, following consultations with unions. It is estimated that it costs the Treasury £25,000 per year for each Remploy factory worker. The company was expected to be bankrolled with £555m from the public purse over the next five years. Last year, Remploy’s Employment Services helped 10,000 disabled people find jobs across a network of 2,500 companies that it deals with. Remploy hopes to increase this figure to 30,000 annually by 2012/13.

Newsinbrief AU T O M O T I V E

Innovation for low carbon automotive success must broaden its horizon’s to look at opportunities for decarbonising fuel and exploiting opportunities outside the usual automotive supply chain. This was the conclusion of a MAS hosted event at MIRA, Warwickshire on January 29. Difficulties in transferring emerging technologies into viable large scale initiatives (technology readiness levels 8 and 9) were identified as major blockers to industry growth.

The iconic Michelin House building in London last month hosted celebrations to mark the 100 year anniversary of Michelin. with a host of events that honour its rich cultural heritage. On 20 January 2011, leading political, business and industry dignitaries attended a special evening of celebration at Michelin House as part of a series of landmark events.

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2nd February 2011 9th February 2011

Birmingham Reading

Oracle Offices Oracle Offices

23rd March 2011 30th March 2011

Manchester Nottingham

Chill Factore Snow Centre Bothe Hall

13th April 2011

Beverley

Beverley Racecourse

12th May 2011

Cambridgeshire

Duxford War Museum

9th June 2011 15th June 2011

Cosford Leeds

RAF Museum Yorkshire Cricket Club

6th July 2011

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Datesfor yourdiary February

A w a rds

Precision is king of the Castle

STOP PRESS: The 2011 A|D|S conference, planned for 20 January, has been postponed until later in the year to allow for greater UK Government involvement in the event. More details about the re-arranged date and speaker line-up will follow in due course. Throughout February: The EEF will be holding seminars throughout the UK focusing on new agency work regulations. For further information and to book call: 0845 293 9850

The FDF will be holding a seminar focusing on obesity. This seminar will discuss the next steps required to meet the challenge of obesity and assess the progress of regional and national approaches to obesity prevention in achieving lasting behavioural change. To book contact: 01344 864796

8-11

The Lean Factory Group is holding a Lean Factory seminar to be held at the SSI Schaefer (UK) site in Hampshire. For more information or to book please call Sally Burton on: 01285 863061

MAS West Midlands are holding a relationship analysis & workshop - this clinic will provide a step-by-step explanation of the methods and relationship questionnaire, it will include case studies to illustrate the management of successful supplier-customer relationship workshops. Contact Carrie Holmes on: 01902 838326

The Institute of Operations Management is holding a seminar focusing on understanding lean within the public sector. Contact Leonie Edwards on: 01536 740 105

15-16

The Manufacturing Institute is holding a workshop focusing on the Shingo Prize. For further information contact Emma Holt at: emmah@manufacturinginstitute.co.uk

The Manufacturing Technologies Association (MTA) in association with UK Trade & Investment (UKTI) are hosting a one-day seminar to provide business insight on the BRIC markets to UK manufacturers, to be held in Derby. For further information contact Christel Moustacas at: cmoustacas@mta.org.uk

16-18

The A|D|S are holding an information exploitation workshop, focusing on the delivery requirements to sustain the UK as leaders in the 21st century digital exploitation domain. For further information please contact: 0207 091 4500

22 27

UKTI is co-hosting UKTI International Aerospace Exchange 2011 in London

The Food & Drink Logistics Show is being held at the NEC in Birmingham. Visit: www.fdlogisticsshow.co.uk for more information

Castle Precision Engineering with The Manufacturer of the Year Award for 2010

The Manufacturer visited Castle Precision Engineering’s Glasgow factory last month to hand over The Manufacturer of the Year Award for 2010. Award judges Gordon McRae of Gripple and Will Stirling of The Manufacturer were on hand to present the top award to Castle chairman Marcus Tiefenbrun and director Yan Tiefenbrun in front of 125 staff, customers and partnering organisations including ADS, Scottish Enterprise, Integrity Matters, Selex Galileo, Rolls-Royce, Mori-Seiki, SMAS and SEMTA. Said Stirling: “Spending a day here, you can see why the senior judges picked out Castle Precision. The company trains its apprentices very thoroughly and guarantees them a job, it has invested in modern machinery through the downturn and its detailed business performance analytics help it to minimise downtime. Congratulations are richly deserved.” Marcus Tiefenbrun added: “For Castle, this award is an acknowledgement of the professionalism, skill and excellence that we apply to every aspect of our business.” Despite a tough trading year, partly caused by delays to the Boeing Dreamliner programme, the company won the award for its strong management and leadership, a clear company strategy and investment in both people and capital equipment. The chief judges for the main award were Joe Greenwell of Ford of Britain and Allan Cook of WS Atkins.

ManufacturingNews A w a rds

Cool customer takes top honours at EEF awards

Foster Refrigerator was crowned Winner of Winners at the EEF Future of Manufacturing Awards in late January, and also claimed the Environmental Efficiency Award. Held in partnership with software company Infor, the gala evening took place at the historic Merchant Taylor’s Hall, London. Hosted by BBC presenter Declan Curry, the packed venue featured some of the UK’s best manufacturers who were there to challenge for awards in nine categories. On receiving the top award Ashley Sword, regional business unit manager at Kings Lynn-based Foster Refrigerator, the leading refrigeration manufacturer in Europe, told the audience: “It’s very nice to get some recognition for this. The environment is not always a sexy area to put work and energy into, and it’s nice that our peers and competitors recognise it. Everybody in the company will be told about this and will feel proud.”

Snap happy Also announced on the night were the winners of EEF’s Photography Competition 2010 partnered by photography equipment manufacturer Canon. The aim of the competition was to display images that show a true representation of modern manufacturing in the UK. There were three categories up for grabs: Best photograph by a professional photographer; Best photograph by an amateur photographer; and Best photographer by a young person (14-19). The professional category was won by Tim Wallace for picture of an Aston Martin motor car which the judges described as spiritually British with high visual impact while the amateur category was won by Mark Tomlinson for an image depicting the UK’s largest ingot mould at nuclear reactor forgings company Sheffield Forgemasters. Finally, the young persons’ category was won by Melissa Garratt for a conceptual image of a group of apprentices at missile manufacturer MBDA. Over 460 entries were received across the three categories. The winners share £5,000 of cutting edge digital photography equipment supplied by Canon. See the category winners and runners-up on page 36.

The other winners were: Accrol Papers (toilet and tissue paper) – Business Growth Award — sponsored by Westfield Health DavyMarkham (heavy steel) – Skills Award — sponsored by Westfield Health Assa Abloy (locks and security) – Innovative Working Practices Award — sponsored by JAM Carl Zeiss (telescopes) – Innovative People Practices Award — sponsored by JAM Diodes Zetex Semiconductors (electronics) – Climate change Opportunity Award — sponsored by British Gas Business Apprentices at Cobham and BAE Systems won the Outstanding Achievement by a first and third year apprentice awards respectively — Ashley Sword (centre) of Foster Refrigerator with sponsored by EAL Infor’s Peter Stanley (left) and Declan Curry (right) from Over 300 companies BBC Business Breakfast entered the awards.

Newsinbrief M et a ls

Shearline Precision Engineering in Ely has put together a consortium of industry leaders to bid for European funding (FP7) that could see the company developing the largest facility for Magnesium Thixomoulding® in the UK. The thixomoulding process is a more environmentally friendly way to process magnesium than conventional methods. Products made in this way can be 75% lighter than steel, reducing energy usage when used for components in transport systems. In addition, the manufacturing process itself uses less energy than traditional casting and can produce less than half the waste.

SKILLS

The National Skills Academy for Process Industries is to extend its scope to cover two new sectors – biotechnology and composites. The Academy will cooperate with skills councils and employers to determine wich areas it focuses on and training will be provided through a network of Academy Accredited Training Providers. Over the next three years, this will include around 30 of the highest quality training providers in the UK. The Academy will also look to provide access to demonstration facilities and a Centre of Excellence in Biotechnology has already been announced at the City and Islington College.

Burton College, Staffordshire, has won national recognition as a specialist in providing training to the food and drink industry and has been accepted as a member of specialist network of training providers with National Skills Academy accreditation. The college’s primary expertise have developed around managing and co-ordinating large-scale training projects for multi-site organisations, particularly in areas such as business improvement techniques and lean process engineering. It has fulfilled training contracts with local brewing giants Marstons and Molson Coors, Unilever (Best Foods) and Kerry Foods.

ManufacturingAppointments UK Appointments Lord Drayson Motorsport Industry Association

The Right Honourable Lord Drayson of Kensington has accepted the invitation from members to become the new honorary president of the Motorsport Industry Association (MIA). Lord Drayson brings a

unique range of business, motorsport and parliamentary experience to the MIA. An engineering graduate of Aston University, his first degree was sponsored by BL Cars and developed his passion for motorsport.

Jim Moseley Food and Drink Federation

Jim Moseley, managing director of General Mills, UK, Ireland and the Nordic markets has taken up the reins as president of the Food and Drink Federation (FDF) – the voice of the UK food and drink manufacturing

industry. Moseley, who succeeds Ross Warburton as president, took up the role following four years as vice and deputy president of FDF and chair of its Food Safety and Scientific Steering Group.

John Cridland CBI

John Cridland is to become the new CBI director-general. Cridland will formally take the helm at the employers’ organisation at the end of January when Richard Lambert, who has led the CBI

since July 2006, steps down. Mr Cridland, 49, joined the CBI as a policy adviser in 1982 and became the CBI’s youngest ever director in 1991, when he took over the environmental affairs brief.

Professor Sir Mike Gregory Institute for Manufacturing

Professor Sir Mike Gregory, Head of the Institute for Manufacturing (IfM) at the department of engineering, has received a knighthood in the New Years Honours for services to technology. After an early career in manufacturing engineering

and management in the machine tool industry, Professor Gregory was the founder member of the manufacturing engineering group at Cambridge, the forerunner of the IfM, which he established in 1998.

Ross Warburton, of the family-owned bakery firm Warburtons, is the new chairman of the Institute for Family Business (IFB). Warburton is the outgoing president of the Food and Drink Federation and was awarded an MBE in 2004 for services to the food industry. He takes over as chairman of the IFB from Andrew Wates, of the Wates Group Ltd, who has been chairman for the last three years. McLaren Automotive has appointed Greg Levine as their new sales and marketing director. Levine has over 15 years automotive industry experience, including a successful five-year spell as Head of Audi South Africa and, most recently, at Audi UK as head of operations. Industrial conveyor belt maker Fenner has named its new chief executive as Nick Hobson, part of Fenner’s engineering division, who will replace Mark Abrahams on March 1, who moves upstairs, becoming non-executive chairman. Sheffield Forgemasters has further strengthened its burgeoning links with academia after a company director was appointed a professor at the University of Sheffield. Dr Jesus Talamantes-Silva, director of research and development (R&D) at Forgemasters, will take on a role as visiting professor for the department of Engineering Materials at the University of Sheffield.

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

Industrial fan manufacturer Woodcock & Wilson has announced that Mark Jones, the managing director, has been elected chairman of the UK’s Fan Manufacturers Association (FMA). The appointment is a change for the FMA, whose chairmen in recent times have all been from the commercial sector. Dunlop Aircraft Tyres, the world’s only specialist aircraft tyre company, has appointed Marcus Hancock as technical director. With 21 years’ experience in the tyre industry, Marcus joins Dunlop from Cooper Tire & Rubber Company Europe, where he was general manager for the company’s European Technical Centre with responsibility for overseeing all product development for the region. The company’s former technical director Martin Pye has moved into a new role as head of original equipment sales.

International Appointments Dassault Systèmes, a provider of 3D and Product Lifecycle Management (PLM) solutions, has announced the appointment of Jeff Ray as executive vice president, Geographic Operations. In this newly created position, Ray will oversee the company’s geographies in order to assist the Dassault Systèmes local teams to serve customers’ and partners’ growing needs and fully exploit the market growth potential. Bertrand Sicot has been named SolidWorks CEO. Sicot first joined Dassault Systèmes in 1997 where he was in charge of regional sales for SolidWorks in Europe.

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Driving Innovation Across Your Operations™

The big picture Maintaining momentum While UK manufacturing is on the up, Professor Sir Mike Gregory of the Institute for Manufacturing asks how the momentum can be maintained through the coming year. Professor Sir Mike Gregory Institute for Manufacturing

British

manufacturing is experiencing something of a renaissance. At the end of 2010, some terrifically encouraging statistics were emerging. The Office of National Statistics revealed that production levels were halfway up towards their pre-recession peak. In November, manufacturing output was the highest for 16 years. A recent EEF survey forecasted output growth of 3.8% — significantly higher than for the British economy as a whole. It also indicated that many companies were expecting higher levels of new orders and might also be looking to recruit new staff. All great news for manufacturers and the wider British economy. But the question is how can UK manufacturing continue to grow and retain the momentum that has been built up? One area with real potential is industrial sustainability. UK Trade and Investment (UKTI) certainly believe this is an opportunity for UK plc. Their recent Sustainable Manufacturing Conference at the Institution of Mechanical Engineers was designed to introduce the emerging field of Industrial Sustainability and highlight the opportunities for manufacturers — particularly those with sustainable products and processes — in China and India. These two nations have begun to focus on cleaner production in a big way, partly as a response to the need to reduce pollution and partly the recognition that closing down energy intensive plants and increasing the use of waste heat for power generation makes sound economic sense. The demand to cut costs and waste in these markets are what afford the opportunities to British manufacturing companies. UKTI predict China and India will invest significantly in a bid to help its manufacturing sector become more sustainable.

Opportunity knocks It is not just about selling products and services, of course. Doing more with less makes good business sense at home. Designing and implementing our own ‘low-resource industrial systems’ can save costs through energy saving, reduced need for materials and the efficiency benefits that often flow from

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

taking a cold analytical look at how we are actually making things in our own plants. Other nations — notably Germany and Japan — are already taking these opportunities to improve competitiveness, quite apart from the benefits to society and the environment more broadly. Suffolk-based brewer Adnams is one such example. It gained an early mover advantage by brewing a low carbon beer. The beer was brewed using less water, capturing and re-using heat and in creating a thinner glass bottle to contain the beer. These initiatives allowed the company to gain an exclusive deal with Tesco. 3M, the health care and highway safety to office products and adhesives firm, has also adopted a sustainable business mantra. It believes anything not in a product is a cost to the business, and has taken steps to reduce these costs as far as possible. As a results of its initiatives thus far, the firm estimates it has saved in excess of $1bn. 2011 offers some very exciting opportunities for developing scale and scope in manufacturing, serving new markets with innovative products while reducing our own costs. The low hanging fruit includes making our processes more efficient, reusing heat to generate power and so reducing our energy bills and seeking to understand and implement best practice. But there are longerterm opportunities, too. Can we develop new clean technologies and services to meet the global demand for cleaner and more efficient manufacturing? And can we deploy our science and technology capabilities to do this faster and more efficiently to create world leading businesses? The answer to these questions is almost certainly yes. The UK has the engineering and manufacturing expertise and know-how to achieve these goals. You only have to look at the automotive sector and our work in hybrid and electric vehicles, the work going on with the Nissan Leaf and the announcement of a £2.9m investment in the Eastern region on electric vehicle infrastructure as prime examples. What have been termed ‘low carbon initiatives’ are not the only response to helping maintain manufacturing’s upward trajectory, but they can make very good business sense.

Economics Apprenticeships are for life, not just a week

Steve Radley, Director of Policy, EEF

Talented

and passionate young people across the country have been developing high-level technical and leadership skills, supported by their employers through apprenticeship programmes. Our Future Manufacturing Awards recognised the outstanding achievement of two such individuals last month. Huge swathes of manufacturing also recognise the benefits of apprenticeship schemes to building a highly skilled workforce. Manufacturing accounts for more than its fair share of apprenticeships, with around one in eight employed in the sector. It is a tried and tested model that actually has its roots in the Middle Ages, and is familiar to employers and widely respected by the country at large. Apprenticeship Week offers an ideal opportunity to raise the profile of apprenticeships among both young people and employers. Research from the Apprenticeship Ambassadors’ Network shows the benefits of taking on apprentices: from staff retention and reduced recruitment costs through to higher levels of productivity and competitiveness. The value of apprenticeships has not gone unnoticed across government. Indeed, apprenticeship programmes are one of the few areas of government policy that consistently commands strong cross-party support. The pre-eminence of apprenticeships in the skills system has given them an advantage in the Spending Review over other programmes when it came to dividing up what will be, over the next few years at least, a smaller cake. Additional resources will, in fact, be targeted towards growing apprentice numbers in the coming years – with John Hayes, the Minster for Skills, recently saying that he has ambitions for over 350,000 apprenticeships during his term as Minister. Government support of apprenticeships is not just about the funding. While there is a long history of apprentices in the UK, so too is there a long history of government regulation of them. And the approach from the coalition is unlikely to make an exception to this. In its Skills Strategy, the government has committed to making Level 3 apprenticeships the programme of choice

Last month EEF hosted its annual Manufacturing Awards, celebrating how UK manufacturers have achieved success through innovating, investing and developing talent over the previous 12 months. And with the first week of February marking National Apprenticeship Week, this is a particularly good moment to put the spotlight on the last of these. and ensure that there are clear and accessible progression routes to other further and higher education opportunities. These are welcome commitments, but as yet a work in progress, and not the only aspect of the government’s skills agenda that still needs attention. EEF has long been calling for a much simpler skills system, with significantly fewer organisations trying to engage with employers or predict training demand. Again, we’ve had some encouraging statements that the government will be pushing ahead with reforms to finally deliver a demand-led system – one in which employers and individuals are given greater influence in a more responsive system. We need that system to be simple, not for the sake of organisational tidiness, but because it needs it to be efficient, not just to save money, but to ensure support is going where it can do most good. Equally, the overall skills system and decisions on funding must be in tune with how employers invest in training. For example, the skills funding system has been too much geared towards annual rounds of funding, whereas businesses have to be able to plan three or more years ahead in committing to training, particularly to programmes such as apprenticeships. The Skills Strategy sets out a broadly positive direct of travel for adult skills, but getting the final destination of a demand-led system of funding will be challenging as it will require significant organisational change. There are big gains to be had from pursuing such an approach, but businesses will want to see some early progress. Apprenticeship Week is a good opportunity to raise awareness of apprenticeships among business and anyone considering an apprenticeship as a route into a career in industry. In the coming years it may also provide a pertinent time to check government’s progress against its own objectives for the skills system. As far as growing apprenticeship numbers and having the right infrastructure to support them are concerned, a long-term outlook is essential if we are to guarantee that apprenticeships are valued for life and not just for this one week.

Have your say at www.themanufacturer.com

Thelegallowdown Whose terms? In the excitement of winning an order it can be easy to overlook the importance of getting the terms and conditions on which the supply is to be made right.

The

buyer may well have provided their standard terms of purchase – which naturally will try to make the supplier liable for anything and everything if things go wrong. And the supplier will also no doubt shoot off their standard terms of supply in their acceptance – which equally try to limit and exclude liability as much as possible. In most contracts this ‘battle of the forms’ will never become an issue: the relationship goes well, and if there are issues, an amicable negotiated solution is reached. But if things do go wrong, the issue of whether (or which) limitation provisions apply, can become key.

A case in point In a recent case GHSP Inc designed and manufactured electro-mechanical control systems for motor vehicles. AB Electronic manufactured automotive sensors. AB supplied a defective batch of sensors to GHSP, which led to the failure of the control systems, which GHSP then supplied to Ford. Ford made a substantial claim against GHSP, who sought to recover all of its losses from AB. When GHSP and AB had first started doing business, they had exchanged their standard contract documents, but had never agreed precisely

Please contact Caroline Armitage, a Partner and Head of Manufacturing Sector at: caroline.armitage@thomaseggar.com or on 0870 160 1300 for further advice.

which terms would govern their relationship. GHSP’s standard terms provided that AB would have unlimited liability under the contract; AB’s standard terms provided that AB would have no liability under the contract. In the circumstances, the judge found that neither party’s standard terms applied to the contract, because it was clear from the facts of the case that neither party had ever intended to accept the other side’s conditions. As a result the fallback position was that the Sale of Goods Act 1979 applied. The contract therefore included a term that the sensors would be of satisfactory quality and, if AB was in breach of this term, it would be liable to GHSP for all losses that flowed from that breach, subject to the usual rule of whether those losses were foreseeable at the time the contract was made.

Button down the terms So it is clear that if you don’t want terms imposed by statute you do need to button down the terms before the supply starts. While the Act does allow parties to agree express terms to exclude that implied term, or to limit its effect, if the contract is not agreed, then any such exclusion or limit will fall away and the supplier will be liable to the other party for any losses caused by a failure to meet that implied term.

businessasunusual UK vs China in innovation contest Anand Sharma, Chairman and CEO, TBM Consulting Group

First

of all, congratulations. Job well done. For the first time in years, manufacturing is the bright star in the UK economy. According to stats released in early January, industrial output surged upward between 3.8% and 4.9% last year, outpacing the 2.1% growth rate of the overall economy. The government is now expecting the industrial sector — and exports in particular — to take up the slack in 2011 as stimulus-funded construction projects wind down and the VAT increase and public sector job cuts crimp consumer spending. That’s the good news. The bad news is that the recession, if current trends continue, has created a research and development deficit that could be disastrous in the long term. According to data released in December by the Office for National Statistics, business R&D expenditures declined 4.1% in real terms to £15.6bn in 2009. That decline is undoubtedly the result of economic conditions, and further declines are likely for 2010. Further widening the R&D gap, the government’s scientific research budget has been frozen at £4.6bn for the next four years. It appears to have escaped the brunt of this government’s axe, but when inflation is factored in, that freeze translates into a 10% decline over the coming years. Need more evidence that there’s an impending R&D crisis? Patents are a decent indicator of research activity and the fruits of such investments. Total European patent application filings fell 8.3% to 134,542 in 2009. It was the first decline in 20 years. As an aside, government patent offices are notoriously inefficient, creating a drag on the innovation they are supposed to encourage. For example, it takes almost three years to receive a patent in the United States. The country has a backlog of 700,000 patent applications. I’d love to see an analysis of how much of that three-year cycle time is value-added work versus innovation-delaying wasted time. Then there’s China, where the majority of government leaders are engineers by training. Party leaders have long realised that the country can’t be the world’s low-cost manufacturer forever. Indeed, inflation and rising wages in the coastal areas, and a growing domestic middle-class, are changing corporate business models. The Chinese

With healthy cash reserves and solid growth prospects in 2011, British industry has an opportunity to plant the seeds of future economic growth by investing cash surpluses in research and development. government has even issued a patent development strategy for 2011-2020 that outlines a path for becoming an innovation-driven economy. It includes a staggering target of two million patent applications annually. Such ambitions are ironic in a nation with a decades-long history of ignoring intellectual property rights, but they are also a signal of the potential for a radically transformed global innovation landscape. Fortunately, there is an immediate solution to the UK’s R&D spending deficit, and it does not depend on government intervention or action. Recent growth in manufacturing output has boosted company earnings, bolstering the higher-than-normal cash reserves that many manufacturers have set aside as a buffer against economic uncertainty and weak

It takes almost three years to receive a patent in the United States, which has a backlog of 700,000 patent applications lending institutions. Companies flush with cash will eventually have to do something with it. They could give it back to shareholders by increasing dividends or buying back shares. Acquisitions are another possibility. I won’t be surprised if we see more M&A this year as manufacturers identify opportunities to merge operations, wring out efficiencies and gain market share. It would be a shame, however, for corporate leaders to squander this opportunity for driving real wealth creation through innovation. Investing in research and development is somewhat like sending your children off to university. The initial focus might be unclear, the immediate benefit might be invisible and somewhat questionable, and the returns might not become obvious for several years. But the sharp impact on future earnings is well documented. Reinvesting available cash back into R&D to create new and innovative products and services would ultimately create real corporate wealth and build a competitive advantage for UK industry that goes deeper and lasts longer than any short-term currency advantage. There’s no time to lose.

Have your say at www.themanufacturer.com

Goodbye to all that

A gold watch, a hearty smile and a firm handshake. Such are the traditional dignities of retirement after long service in the UK. With the forthcoming abolition of the Default Retirement Age in April this year, though, much of this may change. Jane Gray discovers the pros and cons around the intention to extend the potential of our working lives.

Thirty

per cent of the manufacturing workforce in the UK is currently made up of employees between the age of 50 and state pension age, and many sector sectors, such as food and drink, employ a broadly aging workforce. Hence, issues of succession planning and skills gap analysis are always of interest to HR professionals and business leaders plotting strategic direction for their organisations. However, the full impact of the government intention, confirmed on January 13, to phase out the Default Retirement Age (DRA) between April 6 and October 1 this year, may not yet have been realised by scores of manufacturing employers. The many facets of policy and practice which may be affected by the abolition of the DRA touch on issues of culture, communication, strategy and legal vulnerability. Gemma Taylor, solicitor and principle advisor with the manufacturers’ organisation EEF, explains why the changes in employment legislation are concerning some of their members and how employers across the board need to prepare: “Our view is that the majority of our members would very much like to retain the default retirement age but we recognise that the government has made it up its mind and the abolition will go ahead. Until January, however, there was still a question of how and when. “EEF strongly advised that the lifting of the DRA be delayed; the main reason being that the squeezed

timetable does not give employers anywhere near enough time to prepare and indicates that the government has not considered the costs implied. “One particular issue we are concerned about is the cost of benefits and insurance currently provided by a significant proportion of our membership. At the moment, employers cost the provision of these benefits, such as permanent health insurance and life assurance on the basis that employees will retire at 65 and they will not have to pay the extremely high premiums that come into play after that age.” With the abolition of the DRA this will no longer be the case but employers will be bound by discrimination law to provide the same benefits to their entire workforce. Taylor says the cost of this cannot be quantified currently. Another widespread concern among EEF members has been expressed in connection with the mounting administration and training needed for increased levels of performance management. Taylor elaborates: “Being better prepared and able to deal with declining performance in older workers without the natural backstop of the DRA is a real concern among our members. There are a number of perspectives on this; firstly employers are going to have to feel confident that – if they have to – they will be able to exit an older worker safely on grounds of declining performance. Although the law does allow for this, in reality the bar set by the courts for

Leadstory Abolishing the default retirement age

providing the necessary evidence to support this kind of dismissal is extremely high.” Of course, good employers will already monitor performance but Taylor asserts many will need to extend their performance policies and seriously re-consider how they operate them due to an unfortunate reality that management often have a fear of tackling performance management. Taylor says: “Having a performance conversation with someone can be difficult; it becomes more difficult when that person has previously had excellent performance and is a highly respected and long serving member of the workforce. We should not underestimate this cultural element. There needs to be time for employers to prepare and train management but we also need recognition from government that this incurs a cost.”

Plans and paybacks Blatchford, a medical devices manufacturer offering products and clinical services in prosthetics and orthotics, is just one of the many EEF member organisations which has voiced concerns like those referred to above. Isobel Pearce, head of HR at Blatchford, gives more detail on why the company is so dissatisfied with government plans for the DRA: “We have an aging workforce and already experience difficulty with succession planning to ensure that the skills and knowledge held by our longest serving employees are transferred and retained by the business. With the end of the DRA this challenge will be magnified. Pearce explains: “We won’t necessarily know when someone is planning to retire. Our industry is very technical and highly specialised and we feel it takes several years to prepare an incoming employee to take over an experienced position to the level that we require. For example, we have one employee in his late fifties who we have brought in a successor for now in order to train and transfer knowledge over the coming years. We would not be able to do this without the DRA, as we wouldn’t know when to start the succession process and we would not be able to offer the person we brought in any idea of their career prospects. Furthermore, without knowing when a current experienced employee will retire, employment costs could be doubled up for a longer and unpredictable amount of time. Blatchford are also concerned about the possible difficulty of implementing more rigorous performance management following the abolition of the DRA. It is possible the need will arise for disciplinary procedures in connection with emerging performance issues and Pearce reflects: “It is difficult to imagine a dignified way of managing this scenario. “Some may say that this will not be a significant challenge because not many workers will want to continue beyond 65. But the fact is that when discussing retirement plans with our employees we frequently hear them voice concerns that their feeling of self worth may diminish after retirement or that

they will become bored and increasing we hear that although they would like to retire financial pressures mean that they feel they must keep working. In addition there is the possibility that an employee with ill health may choose to continue working until the company intervenes with a decision that they are no longer able to continue in their role. The whole situation simply puts more time consuming bureaucratic and auditing pressure on HR departments and could put employers like Blatchford, which values all its employees very highly, in some uncomfortable nowin situations. “Other practical considerations which concern us are the potential rising cost of healthcare provisions, death in service payments, and the cost of having to make more reasonable adjustments to the workplace for employees with age related disabilities. Without wanting to cast stereotypes it cannot be denied that as we get older degenerative conditions like arthritis and sight problems become more common. Under discrimination law employers have to make allowances for these kinds of disabilities through actions like arranging flexible working, reducing shift hours or modifying equipment and tools, to name but a few. Pearce openly admits that the above concerns will not be the norm and stresses: “We have many brilliant workers in their

Fast facts The current DRA is 65. The DRA currently allows employers to enforce retirement for employees aged 65 and over regardless of their circumstances Employees can currently request to remain in employment but employers are free to decline From April 6 2011, employers will not be able to issue any notifications for compulsory retirement using the DRA procedure Between April 6 and October 1 2011, only people who were notified before April 6, and whose retirement date is before October 1 can be compulsorily retired using the DRA After 1 October, employers will not be able to use the DRA to compulsorily retire employees Any enforced retirements carried out after October 1, 2011 must be objectively justified with reference to proven health and safety or declining performance issues etc The abolition of the DRA does not mean that work beyond the age of 65 will become mandatory The abolition of the DRA will not (at present) affect the age at which employees can begin drawing their state pension Employers can look for advice on managing without the DRA through the Department of Business Innovation and Skills’ Business Link: www.businesslink.gov.uk EEF is also providing training and advisory seminars for manufacturers concerning the abolition of the DRA. For more information on dates and locations for these Beyond the Default Retirement Age events go to: www.eef.org/events

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Lead story Abolishing the default retirement age

sixties who are in excellent health and continue to be motivated and perform to the highest standards in their roles while also showing a genuine willingness to pass their knowledge to junior members. But, there will undoubtedly be rising instances of the scenarios I described earlier and it will be difficult for employers to work out ways of managing fairly and consistently across these individual cases without further guidance from government.” Blatchford were among approximately 500 EEF member organisations which submitted consultations to government on how to manage the phasing out of the DRA. Sixty eight percent of these organisations advised retaining the DRA, at least for the time being. Not all manufacturers seem to share Blatchford’s concerns however. Kevin Parkin, managing director of heavy engineering firm Davy Markham, welcomes the fact that the change in legislation will put pressure on employers to follow best practice performance management and communicate on a more sensitive individual basis with employees about their work plans. “We remain close to our employees and I think that is the key to this – good communication in both directions. Managers have to understand what people’s personal aspirations are and what their work-life balance looks like. If you take care to understand this for everyone in the company then you will have a good picture of what is required in terms of workforce planning.”

Although the Government has said there will be an exemption “so that there are not unintended consequences for employers that currently voluntarily offer group risk insured benefits” (BIS press release January 6) EEF remains dissatisfied with the clarity of the Government’s provisions in this area and indeed with other transitional arrangements.

Davy Markham’s 200 employees, including 100 shop floor workers, have an average age of around 47. However, this was not the case just five years ago, when Parkin remembers the company had a far higher age demographic and was becoming desperately short of skills as experienced employees retired. Having come through this skills crisis by investing heavily in a comprehensive apprenticeship programme, Parkin maintains that the abolition of the DRA should be seen as a positive step towards aiding industry skills retention “It is a shame that you lose skills because people are forced to retire. I welcome the opportunity to keep people on after the retirement age when they still have a lot to offer. People don’t just go from being capable of working to being incapable of working over night.” Commenting on the suggestion that younger workers might be demotivated by the idea that

their career progression was being blocked by the retention of older employees, Parkin says: “I do not see this as a problem at all. We make sure that people progress when and where opportunities arise and we recruit internally first.”

Mixed messages However, despite Parkin’s confidence, union members are raising concerns over career progression challenges. Roger Jeary, director of research for the manufacturing arm of Unite the Union, asserts that: “Many of our members, both old and young, have raised that this [the abolition of the DRA] might be a potential way of blocking promotion in the workplace and, even more importantly perhaps, stopping people getting into the workplace. It really does need to be considered that the numbers of apprentices and the number of young people being employed will presumably be affected if people stay beyond the end of the traditional working lifetime. Employers have a finite number of people they need.” This seems to openly conflict with government support for apprenticeship schemes and to undermine an already dire youth unemployment situation in the UK. Having said this, it must be taken into account that the UK’s age demographic is steadily rising and that the fastest declining group of economically active individuals is that for citizens aged 18-24. Furthermore government has recognised the need to up-skill and retrain the existing UK workforce to prepare them for a longer working life in a world where skills requirements are advancing apace. One of the few areas of skills funding protected from the rigors of the CSR was the provision of adult apprenticeships where government has committed to supporting 75,000 placements over the next four years. How the UK manufacturing sector, which currently employs a mere 3.5% of its employees beyond 65 compared to 6.7% in health and 5.4% in retail, will respond to the prospects of having more older workers is unclear. It has been suggested that the constraints of production line shift work and a high proportion of physical roles will make the challenge harder for manufacturing but in fact such claims are difficult to substantiate and most employers are willing to innovate for flexible working solutions. What is without doubt however is that age old assumptions about the manner in which we leave work are about to be fundamentally revised.

Have your say at www.themanufacturer.com

The boy

Dunn good

For Alan Dunn, more than a year into the operations director’s job at BAE Systems Submarine Solutions, humble beginnings as an apprentice caulker continue to influence his working life. Here he talks talent spotting, teamwork and tactics with Edward Machin.

Beginning

life as an apprentice at what was then Govan Shipbuilders in 1977, Alan Dunn was merely one of a 150-strong apprenticeship intake that year. “As far as I know, there are three of us left in the industry,” he says, “and two of them continue to work at the Govan shipyard in Glasgow. My career, in terms

of apprentice to operations director and board director, has certainly not been a sprint. I’m sure guys in the past have done it quicker, as will those after I retire, but it’s good enough for me!” While the evidence appears to suggest otherwise, “Managing my own career was not something I thought seriously about,” says Dunn, now operations director of BAE Systems Submarines Solutions. “But there are always people who are experienced enough in any business who are able to identify potential and develop it — in semi-formal ways, maybe, but it happens.” Having completed the apprenticeship in 1981, there were opportunities for Dunn and a number of his peers to develop into technical areas within the drawing office, as it was then known. The company picked the best people available and developed that talent, through job progression in the drawing office and academic study. And the fresh-faced apprentice, beginning his steady ascent through the ranks; how did he approach work? “I’d like to think I was a

Interview

Alan Dunn - From apprentice to the board

head-down kind of guy who valued effort and commitment. Perhaps someone saw a bit of raw talent in there, which has generally been my approach to both work and sport,” says Dunn, a “ropey” amateur footballer by his own reckoning. From boot room to dugout, though, times – and responsibilities – change. “My job now is to merge that raw energy and commitment with individual flair within any particular team, but it’s ultimately about talent. Whether someone holds that in a self-deprecating way or shouts from the rooftops, I don’t mind. The most important thing about confidence is that you deserve it; if a youngster is assured about their ability that’s cool with me, so long as they actually back it up.”

Astute looks ship shape Launched on December 16 at BAE Systems Submarines’ Barrow-In-Furness shipyard, HMS Ambush — the second Astute class vessel in a fleet not without a few well-documented teething problems — represents the fulcrum of Dunn’s current work. A 7,400 tonne nuclear powered attack submarine, Ambush will leave Barrow in 2011 to join its sister boat, HMS Astute, at the Faslane submarine base in Scotland. Sad to say goodbye? “Of course,” says Dunn. “When you see how the team corrals around a task and remains uniformly focused on what they need to achieve — it’s a tremendous accolade for the individuals involved, but also the whole business. Launches are always a special occasion for us. Thirty three years in the game and I still get butterflies thinking about it. Your team spends a great deal of their working life on these boats: I’ve got guys who’ve been on the project for the better part of eight years. All that hard work culminates in a great occasion where we can invite the general public and guests from the Royal Navy and MoD to thank those who have put their endeavour into the product. “While you get that bit higher up the food chain, and perhaps a little further removed from the day-to-day activities on the floor, my overriding emotion is pride for the team. There’s no feeling like reflected glory: you watch the guys and girls succeed, knowing that your time is, to a degree, passed — but you can stand on the touchline and watch them win.” With the third and fourth boats in the class — Artful and Audacious, respectively — yet to be built, the fifth as yet unnamed vessel currently in fabrication, and materials ordered for a sixth boat, the season is anything but over for Dunn and his team. Last October’s Strategic Defence and Security Review (SDSR) referenced a seventh boat, which he says will ensure, “A hugely exciting future for all the guys here” — one which will bring continued manufacturing challenges: sequence of build, and quality of parts, integration and resource, among many others. And given that the

environment the submarines will operate, it remains absolutely critical that the parts, system and vessel functions as required in terms of operability and timescale. “Sub-optimal is unacceptable,” says Dunn. “As a result, the skill level of the designer, manufacturer, integrator and tester needs to be as high as possible. Once the capability is optimised, in terms of human factors, the manufacture, construction and test plan needs to complement this fully.” As to the wider political climate and manufacturing’s place in the UK economy, “it’s early days, but witnessing the coalition’s support for UK exports is immensely positive,” he says. “Whether it be India or Brazil, for example, we see government and industry being mutually supportive in demonstrating the capabilities of UK manufacturing to the world. That said, the nature of BAE’s work at Barrow means that we are necessarily more focused on the UK customer, and the SDSR’s reference to seven Astute class boats and the successor vessels beyond that satisfies our business requirements going forward.” Dunn’s vision for total manufacturing centres on predictability and reliability. “What the customer demands of us, and we demand of ourselves, is the capacity to remain predictable in terms of cost, schedule and delivery. As a result we become a reliable provider of capabilities to the government,” he explains. “It’s a simple thing to say, but when putting products together that are as complex as nuclear-powered attack submarines there are always

Astute – the nuts and bolts The Astute class submarine is a more complex engineering project than the NASA Space Shuttle, with more than a million components and 7,000 design drawings. Advanced nuclear technology means the vessel will never need to be refuelled. The pressure hull of the Astute class is a 97 metre long cylinder which, when submerged, must withstand pressure equivalent to 400 family saloon cars pushing down on every square metre of surface area. With the nuclear reactor and four turbines, Astute is capable of generating tens of megawatts of power, yet less than a single watt of power is radiated into the sea. The thousands of subsystems built into Astute comprise 100km of cabling, 23,000 pipes amounting to 10 km of pipework, over 1 million individual components and over 5 million lines of software code.

Interview Alan Dunn, BAE Systems Submarine Solutions

going to be challenges, but nothing we see as being insurmountable. Like any good team you continually strive to be better; to that end we look to recruit talented people into the business and will continue to do so.”

Diving for pearls For those coming into the organisation — be they lateral hires or, like Dunn once was, a wet-behindthe-ears apprentice — is there an underlying BAE Systems culture? “Absolutely,” he says. “It is a tremendous company to work for, both in terms of the products we produce and the opportunities available. Why wouldn’t you want to be working on nuclear-powered submarines? What a manufacturing

Biography Alan Dunn 1977:

Apprentice steelworker, Govan Shipbuilders

1980:

Trainee draughtsman, Govan Shipbuilders

1986 - 90: Undergraduate (Naval Architecture & Offshore Engineering), Kvaerner Govan 1992:

Project manager, Kvaerner Govan

1994:

Outfit steelwork manager, Kvaerner Govan

1996:

Construction manager, Harland & Wolff

1998:

Steelwork Manager, Marconi Marine

2000:

Production services manager, BAE Systems

2004:

Head of construction, BAE Systems

2009:

Operations director, BAE Systems

challenge that is! I’m still blown away each and every day by what we do here, so for the young lads and lasses to come and witness it from an engineering point of view, you couldn’t get it better anywhere in the UK. It speaks volumes, too, that many of our employees are governors at local schools, so the company/community relationship is very much entwined. From bringing kids in at a young age, to taking sixth formers for summer placements, it remains vital for us to maintain links with the wider Barrow area. It’s a relatively small town, which BAE involves itself in through community projects and charitable giving, so we really are cheek by jowl in many respects.” With apprentice numbers having fallen to double figures during the 1980s, things are looking up for those considering a career in an industry charged with defending the UK’s honour, too. “When I started out the 100-plus apprentices in Glasgow was quite normal,” says Dunn. “While that approach to the development of young people diminished for a period, we’re exceeding that number in Barrow today. It has been especially pleasing to be involved in the submarines business because over the last decade we’ve seen the number of young people here starting to reach those dizzy heights again. We’ve got 5,500 employees within the submarines business, 10 per cent of whom are made up of those on the early career programme, so we’re talking about healthy numbers.”

You take risks with people, but do it in a safe, controlled and appropriate manner. Such an approach has paid dividends in the past, and will continue to do so in the future Ultimately, he says, the expectation at BAE Systems is that talent will out — whether graduate or apprentice, artisan or manufacturing management. Youngsters coming through the doors are expected to develop their domain knowledge: what the product is, why it’s important, where it goes and what they do on behalf of the customer. “Of equal importance, and something I say to all of them, is that if they seek an opportunity or wish to develop within the business they have to demand it. As adults we’re all keen to support the next generation, but the mind-reading aspect doesn’t work so well. You must take matters into your own hands and be demanding of both your career and the business; if you’ve got the capability to match then the world really can be your oyster. After all, if I had put my hand up a little bit more as a youngster perhaps it wouldn’t have taken thirty two years to get where I am now!”

Have your say at www.themanufacturer.com

RegionalFocus In association with:

South East Manufacturing value added 2008: £44.5bn

Diversity and surprising depth of both high tech and high value add manufacturing

No. employed in manufacturing: 687,000 No. of manufacturers: 44,555

The

Greater South East region is defined by manufacturers’ organisation EEF as East Anglia, London and the South East of England, roughly from The Wash in Norfolk south to Dover and across to Southampton. Combining the manufacturing output of these regions produced gross value added of £44.5bn in 2008, and the region employs about 687,000 in manufacturing related activities. The combined GVA and employment is the highest for any region in the UK. The manufacturing sector in the South East is highly fragmented and diverse. The headline industries – aerospace, and increasingly, space engineering; automotive including motorsport; pharmaceuticals and healthcare; advanced engineering and environmental technologies – are punctuated by many great SME companies in niche sectors that are hard to pigeon hole, such as Foster Refrigerator in Kings Lynn, Norfolk (see box) and Siemens MR Magnet Technology in Oxon. To simplify the region’s manufacturing make-up, taking London as the hub, to the north Vauxhall’s plant in Luton made 102,665 cars in 2010, and the Cambridge district is characterised by high growth and high tech businesses, such as Plastic Logic and Cambridge Display Technology; to the north-west lies Oxford with its space cluster and the BMW Mini plant; to the west and south of London is Farnborough’s aerospace cluster, the big pharmas like Pfizer and GlaxoSmithkline close to the M4, where the latter makes healthcare products in Maidenhead and Slough; while on the South Coast, Rolls-Royce Motor Cars dominates Goodwood plus many SMEs like Matt Black Systems and Drallim Industries supply to the marine, aerospace and defence sectors. US pharma giant Pfizer has just announced the closure of its UK R&D centre in

Kent, the plant that developed Viagra, with the loss of 2,400 jobs. Food companies, plastic injection moulding, general engineering companies and small high tech firms pepper the whole region, often feeding the bigger clusters like Farnborough.

Manufacturing statistics – South East Total manufacturing gross value added for the South East region, including East Anglia and London, was £44.5bn in 2008. Total manufacturing employment: 687,000 No. of manufacturers: 45,555 Manufacturing in the South East region (south and east of London) is estimated to be worth around £18bn, comprising 21,000 manufacturers employing 320,000 people. The South East employs more manufacturing workers than any other part of Britain (Source: MAS-SE and ONS). Estimates vary but the South East’s commercial and leisure marine economy is worth over £14bn, worth about 22% of the UK’s marine economy. There are over 3,400 aerospace and defence companies in the UK, and 750 or 22% are based in the South East (Source: Experian SIC Definition, ONS ABI, 2007). The UK’s £7bn space industry supports 77,000 jobs. Astrium, Europe’s market leading space technology company, with factories in Stevenage and Portsmouth, employs over 1,400 people. Surrey now possesses more manufacturing jobs than Manchester, according to MAS-South East.

RegionalFocus South East

The South East has a high number of breweries in proportion to its size, with big brewers like Shepherd Neame in Kent, Fullers of London and John Smith’s big factory in Reading, while Greene King and Adnams are synonymous with Suffolk.

South East Support While South East manufacturing is very diverse and quite fragmented, it also has an extensive regional supplier infrastructure. “As a region it is renowned for being a major contributor to productivity growth and a lead driver of innovation, where companies are developing and manufacturing many and varied products,” says Jim Davison, South East regional director for EEF. Overall the number of companies is in decline but, EEF says, heavily skewed in high technology sectors, manufacturing is clearly important for the long term prosperity and health of the region. The Government’s Manufacturing Advisory Service is very active in the South East. MAS South East claims to have delivered over £310m of added value to the manufacturing sector across the region to date. The service has responded to over 20,000 initial enquiries from businesses seeking advice and visited over 3,000 businesses to carry out initial diagnostic ‘health checks’. MAS South East has also arranged over 900 events designed to inform and train local businesses. The South East England Development Agency, SEEDA, links to several business support mechanisms, such as Business Link, and many trade associations. It is due to close down in March 2012 with some functions being wound down over the next 12 months.

Sector clusters Specific sector clusters exist in the region for: Advanced engineering and marine – the Solent area, Hampshire Aerospace and defence – centred on Farnborough and extending down the M3 and into London Pharmaceutical, health technologies and life sciences – M4 corridor, Herts, Home Counties Space technology – centred in Oxfordshire ICT and digital/ creative media, and environmental technologies, also have regional hubs. Marine industry: The Solent area, including South Hampshire and the Isle of Wight, is home to about 140 boat and ship companies that design and manufacture almost half of all the marine vessels made in the South East. The Solent’s marine sector accounts for nearly 20% of the value of the Solent’s whole economy. Marine South East is the regional marine initiative of SEEDA and was created to address the needs of the marine sector in the South East region. It works closely with the British Marine Federation, who runs the Southampton and London Boat Shows.

Key people Peter Hare, EEF South East Region Chair, managing director of MHH Engineering Peter Hare is the finance director of MHH Engineering, a Surrey-based company that designs, manufactures and calibrates industrial torque tools and torque measuring equipment. About 65% of the company’s turnover is exported. Peter has chaired the EEF SE Regional Council since 2009, working to promote manufacturing locally and nationally, with a focus on expanding membership and improving member services. Originally training as a food technologist, his career in began in 1990 with Dennis, the fire engine and coach maker, before moving to MMH. In 2003 he was appointed to the EEF South Audit Committee, then to the role of non-executive director for EEF South, before taking over as Chair of the SE Regional council. Peter is a Chartered Management Accountant. Andrea Rodney, EEF East of England Region Chair Andrea Rodney is a director of HoneAll Precision, a sub-contract machining company based in Leighton Buzzard specialising in deep hole boring, honing and CNC turning. Hone-All has a strong brand and is recognised throughout the industry for continuous improvement, regular investment, training and team building. Andrea has worked to influence the Government’s approach to long term manufacturing success, firstly through the EEDA Manufacturing Panel and the Automotive Academy Steering Committee and then through membership of the Skills Council NSAM / Semta for the Eastern region. She has chaired the EEF Eastern Council for just over a year and is also a member of the MTA Training and Education Committee. Jim Davison, EEF Region Director for the South East As region director for the South East, Jim leads the EEF member, influencer and media engagement activities across the region. A production engineer by profession, he spent 15 years working for EMI in optical disc manufacturing across a variety of engineering, production and operations roles. He has also worked for the Manufacturing Advisory Service South East, where he led a team of specialists delivering business improvement services to SME manufacturers. He joined EEF in 2003 as operations manager for the South East region before his recent appointment as region director.

Some winners in the South East Siemens MR Magnet Technology in Witney, Oxon, is the world’s leading designer and manufacturer of superconducting magnetic resonance imaging magnets for medical applications. Around 95% of the magnets produced here are exported and the business has been awarded several Queen’s

Awards for export success and the Innovation MX award in 2010. More than 30% of the MRI scanners installed in hospitals worldwide have a superconducting magnet manufactured by Siemens MR Magnet Technology at their heart. McLaren Automotive is close to finishing a new production centre, adjacent to the firm’s existing McLaren Technology Centre in Woking, Surrey. The £40m production centre will build the new MP412C supercar and phase one manufacture has begun. The McLaren Production Centre will use energy efficient processes developed during the McLaren SLR’s build programme to tailor-make up to 1,000 MP4-12Cs a year, and will create 300 new jobs mainly in design engineering, manufacturing and some support and administration. Rolls-Royce Motor Car’s headquarters and manufacturing plant in Goodwood, Sussex, designs, assembles, furnishes and tests every Rolls-Royce Phantom and Ghost car. Moving slowly through the assembly process, each stage of the hand-built process is meticulously completed and documented. Each car passes through at least 60 pairs of hands. It is a complex process to “lean up”, as most of both the Phantoms and Ghosts can also be highly customised. Buhler Sortex in Stratford, London, makes high speed optical sorting equipment for the food sector (sorting and grading of rice, nuts and other vegetables), and Domino Printing Sciences in Cambridge is a printing technology company. Both companies have recently posted strong export performance. Pursuit Dynamics is a small company set to grow, producing energy efficient vessel heaters for brewing industry technologies. See the box-outs for SMEs in the news.

Hot sector: Space research and engineering

International Space Innovation Centre Location: Harwell Science and Innovation Campus The International Space Innovation Centre (ISIC) is a new initiative funded jointly by the public sector and industry. It was designed to help focus the UK’s substantial, but fragmented, strength in the space engineering sector, contributing to the goal of doubling the UK space market – approx £7bn – by 2020. ISIC intends to provide a new environment where government, universities and industry can work together to make the most of scientific opportunities and create new technologies, applications, and intellectual property that exploits UK, European and global space programmes. ISIC will be an integral component of the Harwell Science and Innovation Campus. It will link space activities with the breadth of research undertaken at Harwell’s world leading large facilities such as the Diamond Light Source and the ISIS neutron spallation source. ISIC will act as a portal for international access, partnership and collaboration and a melting pot for ideas driven by open innovation. EADS Astrium designs and builds both scientific satellites and communications satellites from its sites in Stevenage and Portsmouth. Stevenage makes the main structure and the communications module, and integrates the thermal and propulsions systems, while

Portsmouth designs and installs instrumentation systems and the comms module to the spacecraft. Final assembly happens in Toulouse. “Astrium UK has received a lot of orders in the last four to five years and because of the build period – about three years – the forward order book is healthy,” says Alistair Scott, the adviser for Astrium’s PR and Communications. The company makes about six units per year, and currently has 10 in build, five science satellites and five communications satellites. Britain’s leading role in the space industry has a louder voice, but its real potential is still widely unappreciated. Most of the big communications satellites used by the big two satellite service providers, Inmarsat and Intelsat, are made by EADS Astrium, and other UK companies contribute to the supply chain. The satellites can cost from $150m to more than $275m. “Space is going to be a leading industry of the future for the UK,” says Mr Scott. “Last year the sector posted 9%-10% growth, and it used to be 15%, while many sectors have shown flat or low growth. But it needs a regular drip feed of cash and innovation to keep this position, as India and China are catching up.” Surrey Satellites also make satellites in the region.

Regional focus South East

One to Watch Sherborne Sensors

hile it may be a surprise to some, Basingstoke used to have many manufacturers but Sherborne Sensors is one of the few independent manufacturers left. Formed in 2002 from the MBO of the inertial product range of sensors of Measurement Specialities, the company still makes inertial sensors as well as force transducers – where it purchased the rights to several product designs in October 2006 – and accelerometers, all finely calibrated instruments for an intriguing and expanding range of applications. The sensors measure physical properties – the angle of tilt, temperature and pressure. Assembled and tested with extreme precision, it is a patient and demanding craft. What would use an accelerometer? “A good modern application is the Nintendo Wii console,” says managing director Mike Baker. “The technology that measures the speed and direction of your arm movements is totally reliant on accelerometers.” Another application is ordnance trajectory calculations for defence. After a recession that saw sales flatten rather than fall, the last 12 months have been the best in the company’s history. Despite being fairly new, the US is now its biggest overseas market where it has a sales and distribution centre in New Jersey. The global sensors market is very big; Sherborne’s formula for success is customisation. “We make niche products – only a handful of companies do what we do,” says marketing director Robin Wilson. “And increasingly we customise standard products – upwards of 50 per cent at the moment.” Mr Baker says they deliberately de-emphasise the firm’s nationality in the US, hosting a US website using American English where transactions are in dollars. “We’ve taken detailed care to encourage US contacts to place orders.” The firm operates in one third each aerospace, defence and civil engineering. New applications include making inclinometers to measure movement in steel girders used in a Chinese suspension bridge.

Sherborne Sensors’ T233 DC-operated 2-axis servo inclinometer in use on a tunnel boring machine guidance system

One to Watch Foster Refrigerator

n January, Foster Refrigerator of Kings Lynn received top honours at the EEF Awards 2010. The judges said, “If every manufacturer in the UK followed Foster Refrigerator’s example, Britain would be in a very good position in the fight against climate change.” The secret to its success? “The most important thing has been developing refrigerators with very low energy requirement, that are green and sustainable,” says food service director John Savage. “We’ve grown the smaller customer segment, supplying those who used to say they couldn’t afford a Foster, because we can demonstrate the money saved on energy will offset the price premium on a cheaper import.” Customers get the price difference between these new models and an imported product back very quickly, so they make savings through the life of the cabinet. “It’s a triple whammy,” says Mr Savage. “The customer gets a better product and lower energy costs, less energy used is good for the environment and Foster wins the sale.” Electricity savings can amount to £200 a year per unit. How? Partly in the cabinet lining, but in 2004 a typical Foster fridge took a 9.4kW motor. Today the same unit needs a 3.7kW motor. Many of the foreign imports still use >8kW motors. Some of the components Foster uses are more expensive than their competition, but cost savings have been achieved through lean manufacturing techniques. “The green agenda will drive manufacturing and after 10 years of manufacturing investment we are ahead of the curve,” Savage adds. The products are listed on the Enhanced Capital Allowance scheme so customers can claim back the tax on the capital cost of his purchase, equivalent to just over an 8% discount.”

Regional focus South East

One to Watch - Mylands

Managing director Dominic Myland with his father and semi-retired company chairman John Myland Mylands is the last privately owned paint manufacturer in London

ylands is the oldest paint manufacturer in the UK that is still owned and managed by members of the founding family. Located in West Norwood, London, the firm has manufactured interior and exterior paints, coatings and polishes over four generations since 1884. It is the last independently owned paint manufacturer in the capital. South London used to be home to many small paint companies, but from the 1970s nearly all gravitated north, taken over by big players like Crown (now Akzo Nobel), Darwin and Silver Paints. Turnover is up 8% from 2009-2010 in what were difficult trading conditions. Mylands had a little growth last year in the decorative paint market, and it is about to launch a new range of super high quality decorative paints which are “a little different to the existing designer paint brands in the market place,” says managing director Dominic Myland. The firm has been investing in manufacturing processes and will be implementing more plant and equipment in the next two months. “We are moving from a business-to-business position in our marketplace to selling to the consumer market, which will be challenging,” says Mr Myland. “We’re taking complete control of a family business into the fourth generation of ownership, in a modern competitive market. We’ve invested in new sales people recently so overall, yes, we are optimistic.”

One to Watch - Rediweld

f you can thermal inject and compress plastic and rubber, you can adapt where the demand is. Rediweld in Alton, Hants, operates two main divisions, rubber moulding services and traffic calming / traffic management products. It offers thermoplastic, thermoset (compressor moulding) and elastomer mouldings for aerospace, medical and general engineering applications, from design, product introduction, to moulding, testing and inspection reports. Managing director Roger Marsh is proud of the company’s achievement in winning the SC21 Bronze award in November 2010, and he says “we see ourselves as much an aerospace company as a moulding company.”

Having got ISO9001, Rediweld secured AS9100 in August 2009, now the universal aerospace standard. SC21 was a route to reduce lead times and measure and improve quality and and delivery metrics. While aerospace and defence accounts for over 50% of the business, Rediweld has developed a fantastic business making traffic products – traffic calming and management systems, like temporary kerbing. Up to 40% is exported to markets including France and Ireland. “They are portable and there is a health and safety aspect of a temporary product installed quickly,” says Mr Marsh. Group turnover including its sister company Redivac in Daventry is about £7m.

Dates for your diary February 15-16: Logistics Link South 2011, Esher www.logisticslink.co.uk February 16: Sustainable Transport 2011, Westminster www.greeningtransport.co.uk February 16-17: Southern Manufacturing 2011, Farnborough April 7: Kent 20/20, Dealing, Kent www.kent2020.co.uk May 24-26: KSustainability Live 2011, Birmingham www.sustainabilitylive.com

A family of plastic mouldings and assemblies for a mine disposal system, converted from aluminium parts as the product moved into full production

Range of Aviation Fuel Probe components that are moulded with inserts and machined to tight tolerances by Rediweld

MAS South East

What’s on the outside? Need some external advice? Dominic Brown, senior manufacturing specialist for the Manufacturing Advisory Service (MAS) South East, pinpoints the characteristics to look for when recruiting external resources for business improvement in manufacturing.

Amid

a still fragile economy, manufacturing is beating the odds with regular reports of increasing output and order balance levels, improvements within export markets and a steady rise in recruitment and investment. The general feeling across the sector is positive, despite spending cuts, with many manufacturers choosing to look forward –– working to the UK manufacturing’s strengths in innovation, research and development, customer service and fast response times to emerging trends. More and more manufacturers are taking a step back in order to focus on improvement activities within their business, a hard task during stressful periods of sector uncertainty.

Pause for thought The downturn has allowed many manufacturers the opportunity to take a look at their business and decide where efficiencies can be made. For example, stock control, which is directly related to cash flow, is now a higher priority area for improvements. Companies have been taking the opportunity to understand how they compete, address their skill levels, their own value within the market and what makes companies buy from them. Consultants have to be able to respond with solutions that will add value and have both an immediate and long term benefit to the company. otherwise, the cost of bringing in external support cannot be justified. Manufacturers choosing to get outside help need to look for support organisations that can offer real, tangible business benefits and provide straight talking, hands-on support and advice. A fresh pair of experienced eyes looking at a business is invaluable. There are no prejudices, no ‘sacred cows’ and this enables a company to take a step back from their day-to-day business operations to look into the heart of an issue. Business support can come in all different sizes, shapes and packages –– if a manufacturer wants help, look for support that knows about manufacturing! Do your research first and speak to companies that have used similar services. Find support that is

A look at the characteristics of business improvement providers

not based on just parachuting in, solving a problem and walking away, but about delivering sustainable improvements and changes that can be continued and developed –– continuous coaching to ensure skills transfer is vital to any workforce. What makes the difference between business support being successful or not? Understanding what the real issues and needs are and looking at the business as a whole rather than just focusing on one problem can make the difference between the success or failure of change. It’s important to make sure that action taken is always driving towards resolving a problem or improving a process. Setting goals and targets is vital, and re-measuring to ensure you’re on the right course will keep things focused on the right activities.

The MAS way How is MAS South East different from other support agencies? Some business specialists have a tendency to take root in a business, making it more dependent on them, rather than providing the tools and techniques for the business to take forward itself in order to achieve truly sustainable improvements. As a government funded programme, we are much less commercially focused and are measured on the success of the businesses we work with. Every piece of work we do with a company is measured against a set of key metrics and we have a strong track record of success at taking non-value added activities out of a business. As a group made up of manufacturers who have moved into business support our focus is on identifying real solutions to real problems, and providing long term benefits rather than short term wins. Our work is carried out through an extended supply chain so we’re able to support manufacturing at all levels and through all phases of the product lifecycle. We also have a strong network of business support partners such as UKTI, WRAP and so on, that we can call upon to enhance the service a manufacturer receives.

Have your say at www.themanufacturer.com

Furniture fit for a Pope In 2010 specialist furniture makers N.E.J. Stevenson were commissioned to design and manufacture furniture for Pope Benedict XVI’s visit to the UK. The chairs, lecterns and even an altar, tested the craftsman’s skills to their limits and the outcome was some divine pieces of Papal furniture.

N.E.J.

Stevenson Ltd has re-fitted the lavish interiors at some of Britain’s best known buildings, including the Houses of Parliament, Eltham Palace and Dover Castle, as well as modern contemporary interiors like the David Wilson Library at Leicester University. The Rubgy-based bespoke furniture maker is used to receiving interesting enquiries from high profile clients. In summer 2010 the company was commissioned to help produce six specially commissioned items of furniture for Pope Benedict XVI’s first state visit to Britain. While the visit itself made headlines, little has been discussed about the pontiff’s seclusion while here in the UK. Six dedicated pieces were used by the Pope for private ceremonies while he resided with his envoy to Britain. They were an altar, lectern, tabernacle stand, two server chairs and the Celebrants chair which includes the Pope’s coat of arms etched into the glass panel. The project was led by Neil Stevenson the managing director, but credit must also go to the contributors of the materials. Arnold Laver Timber World was asked by the Timber Trade Federation to supply timber to NEJ Stevenson. Prime European oak was specified, a durable timber with ideal properties for high quality joinery applications. The provenance of the timber was of particular concern, as Stevenson wanted to ensure that the wood was both legal and sustainable, so it was Forest Stewardship Council certified. Glasgow-based Arnold Muirhead provided the leather for the seating in a vibrant hyacinth blue. Proskills, the Sector Skills Council for the Process and Manufacturing sector which includes the

Furniture and Wood industries, say it is delighted that small, artisan manufacturers can secure highly lucrative and prestigious contracts demonstrating that the great skill and talent the UK has. British furniture manufacturers have been at the forefront in supplying furniture to UK retailers for generations and British manufacturers are renowned for producing some of the finest furniture in the world. For supplementary information visit: www.nejstevenson.co.uk Reproduced with kind permission of the Papal Nuncio in Wimbledon

Stage 1: An NEJ craftsman rip saws prime European oak into basic sections for the Papal furniture

Stage 2: NEJ craftsman staples a vibrant hyacinth blue leather from Glasgow-based Arnold Muirhead to the basehead of the chairs

Stage 5: Dry assembly and fine fitting of components

Stage 3: Squaring out the corners of a mortice

Stage 6: Chiseling a chamfer for the Papal furniture

Stage 4: Using a drawknife to shape components

Finished product: Close-up of the chair which contains the Popeâ&#x20AC;&#x2122;s coat of arms etched into the glass panel

Have your say at www.themanufacturer.com

John Caley of Gripple training a new recruit to check quality of product being produced on bespoke machinery

Working hard or hardly working No matter whether they are on the shop floor, in sales, logistics or sitting in the corner office, a manufacturer’s employees are not only the powerhouse of the business, but often also the biggest cost. Tim Brown talks to a number of experts and discovers some techniques for enhancing employee productivity.

the Advanced Manufacturing Summit, last month, Deputy Prime Minister Nick Clegg stated that “the satisfaction of making things is hard to beat.” While the pronouncement may have been aimed more at encouraging the next generation of manufacturing workers and engineers, it surely rings true with the current generation of workers. Clegg isn’t, of course, speaking from personal experience — he is not an industrialist per se. He has, however, as Member of Parliament for the manufacturingrich Sheffield Hallam constituency, undoubtedly witnessed the high level of fulfilment and pride that is found in his local manufacturing sector.

Ownership breeds continuity While a good level of job satisfaction will do much for morale and staff productivity, it is the process of maintaining that level of employee interest that is often difficult. “The most significant thing we have found is that employee productivity correlates exactly with the amount of involvement employees have in maintaining the machinery they operate,”

Leadership People and Skills Employee productivity

says Jennifer James, senior training consultant for MCP Consulting and Training. “This extends to providing training in those areas its. It’s about involving employees in asset care and management rather than doing it for them or telling them to do something but rather getting them involved.” According to James, developing ownership requires not simply the provision of responsibility but, to ensure success, operators need to be properly trained in how to perform operations, cleaning, inspecting and changeovers. “Only low level maintenance skills are required but they need to be trained to do it properly,” she says. “The problem with most areas that I’ve worked before is that operators have a go because they are being urged to keep the machines running. However, in the long term that leads to more downtime if employees are not performing the tasks correctly.” Andrew Pownall, engineering and manufacturing operating director of recruitment agency Michael Page, says it is just as important for workers to know why they are being trained. To do this, employees “need to understand the whole business and understand the impact that their own work performance actually has on the whole manufacturing process.” Doing this, he says, allows staff members to see the contribution their responsibilities make to the complete project — and thereby ensures training has a greater impact. In addition, if a staff member appreciates the reasons why things are done in a certain way and also the end result impact of a procedural failing, then the rules are more likely to be followed. The importance of ownership is a sentiment echoed by Linda Rawson, learning and development manager at Sheffield-based Gripple. As the 2010 winner of The Manufacturer’s People and Skills Award, the construction and agricultural materials producer is well placed to comment on staffing measures to increase efficiency. “Everybody has ownership of their own area and staff that use equipment have empowerment in that area and have responsibilities to look after that equipment,” says Rawson. “We actually work on a very lean and continuous improvement ethos, which means that everybody gets involved in continuous improvement. Improvements won’t be driven by management; it will be driven by a team of people that have a vested interest in that particular area.” Gripple has taken the idea of area ownership a step further by implementing a system under which every employee actually owns a portion of the company — having a vested interest in its productivity as a result. About 98% of its employees in the UK are now shareholders, and while at present they are non-voting shares, that is set to change. In April, the company will implement the ‘Glide Board’, which will represent the workers and allow them to have a say in the kind of place they work. “Every employee has to hold a minimum of £1000 worth of shares because our chairman believes that

if you are given something, you don’t value it, but if you buy it you do,” says Rawson. “Employees can buy more shares but have to hold a minimum of £1,000. There are low interest loans available to enable people to buy the shares. Employees must partake in the shareholding programme after they have been with the company for a year.”

Communication and community Providing easy mechanisms for communication is vital for individual and business productivity. Gripple operates an open office system where there are no barriers from one employee to another, so there is a direct line of communication throughout the hierarchy of staff. In addition, information is fed fluidly through the company via a range of meetings. “The management board of directors meets every week and team leaders and other managers meet either daily or weekly and information is cascaded down,” says Rawson. “Because we have a very open office and we are an open organisation, information is often communicated very naturally and easily.” This function is formalised when, at the end of each of Gripple’s eight accounting periods per annum, the company holds a communications meeting that includes the entire staff of about 175. Keeping the staff informed of the direction of business operations is certainly important. Equally so, however, is the act of engaging for the purpose of actively seeking employee opinion. “You will often find that the staff are best placed to make improvement suggestions,” says Pownall of Michael Page. “It might only be one in twenty suggestions that you take forward, but it might be the one that saves you £50k or it might improve a process for you. Devising a method to allow that to happen such as a suggestion box and perhaps offering incentives will encourage it further.” This level of communication feeds back in to developing a sense of ownership and control for staff and promotes commitment. In addition to a healthy level of communication, the actual physical layout of a work place is extremely important when it comes to maximising productivity. While many managers and business owners choose to suffice with a certain minimum level of office facilities, they may be ignoring what can amount to a major obstacle on the path to increasing employee productivity. Improving work flow processes and reducing waste is important to prevent feelings of disillusionment amongst workers. There are any number of tools and mechanisms that can assist in getting the most from employees, and the right combination will vary from business to business. What remains certain is that staff productivity is key to business continuity and success. Facilitating staff engagement and allowing them to ‘own’ their particular processes is, however, an excellent and highly recommended place to start. Delegating responsibility is not enough, and in-depth training and communication will assist to ensure the nurturing of an industrious and dynamic team.

JCB Academy

diary

The JCB Academy in Rocester, a new school part-funded by the nearby global digger manufacturer, provides a new concept in education. Students aged 1419 years are given the opportunity to pursue a fulltime, technically oriented course of GCSE and A Level study. Here, students Ella Pilsworth-Straw and Alice Trotman share their views on academy life.

From

the word go, we have been outnumbered in this school; sometimes it is good and sometimes less so. But we won’t let this stop us, and will always strive to do our best. If you have not already noticed, we are the girls at the JCB Academy and the two of us are talking on behalf of all 11 of us at the Academy. Even though this may sound like a challenge we have taken it in our stride and used it to our advantage. Since September when the school opened, we have undertaken many aspects of engineering and business roles, from making a 4X4 vehicle to organising and holding a meeting. This included the privilege of working with the

Ella Pilsworth-Straw and Alice Trotman, students at the JCB Academy

best companies in the country such as Network Rail and Rolls-Royce. From the start we have learnt many business principles that will help us gain a job in years to come. For example, learning to work in a team and the benefit of having many of our teachers coming straight from industry preparing us for the future. Even though there are many excellent aspects of going to such a ground-breaking academy, there are a few aspects that are not so good, such as the long hours we have to work. We attend school for the equivalent of a normal working week and this can be tiring for a 14-year old – but it will help us in the future. Also, from a socially active teenager’s point of view, the large catchment area has its downside

Have your say at www.themanufacturer.com

because it is not as easy to see your class mates out of school (JCBA’s catchment area is an 18 mile radius). There are many good aspects about having a new school, but this also brings added pressure on us to give the school an excellent reputation for the future, and we all hope such an innovative Academy works for us. A good aspect of having a new school is the amazing technology and facilities we have access to, such as the 3D image room and 3D printers, that help us visualise our work in so many more dimensions than before. On the whole it is a great school, and even though there aren’t many of us girls, it was worth the move here and for the challenges we now face.

Malcolm Holman Brighton Sheet Metal

At the same time as Brighton Sheet Metal celebrates 100 years in business, its technical sales director, Malcolm Holman, reaches his 50th year working with the firm.

Malcolm

Holman is technical sales director of Brighton Sheet Metal, an SME specialist in subcontract sheet metal fabrications and presswork with full assembly and finishing facilities. This month, Malcolm celebrates 50 years with the company, having joined straight from school as an apprentice tool maker. His career progression took him first into tool design before becoming engineering manager, then engineering director, and finally into the dual role of technical sales director which he started in 1996. As Malcolm notches up his half century, it is fitting that Brighton Sheet Metal reaches another extraordinary milestone. Having first started trading in 1911, the company celebrates its centenary this year. Malcolm’s key role has been to develop the widest possible customer base for Brighton Sheet Metal – something that has served to protect the company in times of recession. With his help, customers are now drawn from industries as diverse as computer, electronic, medical, generator, compressors, banking and laboratory equipment. His firm but persistent manner, and refusal to ever “close a door” has kept him in contact with the same customers, suppliers and, indeed, competitors for many years, as well as identifying new growth sectors for future development. His wide knowledge of the market has given him considerable technical expertise and, in recent years, he has also been responsible for assessing emerging technologies. Part of that involves working with the many blue chip companies among Brighton Sheet Metal’s customer base and using their influence to maintain the latest in management principles and technological advances. Recent

investments Malcolm has helped the company make include a robotic forming cell and an automated punching system which were brought in to implement a “lights out” automated machining operation – resulting in efficiency CV in brief – and productivity Malcolm Holman improvements. Says Malcolm: Age: 65 “Apart from enjoying close Position: contact with so Technical Sales Director many customers Previous Roles: and suppliers Apprentice tool maker that I now think Tool designer of as friends, and working alongside Engineering manager a great team at Engineering director BSM, I have found Hobbies: the assessment of Brighton & Hove Albion new technology Football Club particularly Fishing satisfying. Improvements in efficiency have not only benefited the company, but has enabled our workforce to become multi-skilled. To see the company still thriving after all these years is very satisfying.” Bill Taylor, managing director of Brighton Sheet Metal, adds: “There are too many personal successes to mention, and Malcolm will be a hard act to follow. His extraordinary service to the company, technical knowledge, dogged persistence and extensive contacts will be hard to replace as he starts to plan for a well earned rest over the next couple of years.”

Have your say at www.themanufacturer.com

Capturing the spirit of manufacturing EEF Photography Competition 2010 EEF, in partnership with Canon, and supported by the Department for Business Innovation and Skills and the Guild of Photographers, set out in October 2010 to develop a photography competition to capture the spirit of modern UK manufacturing. On January 27th the results were unveiled at the EEF National Gala Dinner at Merchant Taylors’ Great Hall in the City of London.

The

competition was open to professionals and amateurs from within manufacturing companies and elsewhere, as well as young people aged 14-19. From 461 entries, the judging panel consisting of photography and manufacturing experts selected 43 images for their shortlist. These were whittled down to a final shortlist of 12 images before the runners-up and winners were decided. Images of an iconic British car, the UK’s largest Ingot mould and a collection of young apprentices are the three winners of the EEF Photography Competition, Capturing the Spirit of Modern UK Manufacturing. EEF launched the competition as part of its ongoing campaign to help dispel the outdated image of UK Industry by showcasing its excellence through high end visually

striking technology, processes and people. EEF will now use the winning photographs in its media and PR work, and to support Manufacturing Week. Canon supplied photographic kit as prizes to encourage future photography and promotion of the modern manufacturing supply chain in action, and the Guild of Photographers have offered 12 months’ free membership to each winner. Commenting, EEF chief executive Terry Scuoler, said: “For too long there has been a stereotypical image of manufacturing which is way out of line with reality. Modern manufacturing is a successful and vibrant arena in which to operate and the winners have captured the essence of this spirit with a range of striking images.”

“These entries just go to show the power of image – they have really captured the spirit and sheer diversity of the industry. Despite the last few years being one of the toughest on record, it’s clear to see that the manufacturing industry still leads the way in terms of innovation and driving the economy.” Clare Want, Marketing Director at Canon UK

Award category: Professional NER N I W Tim ce Walla

The judges felt that this image displays Aston Martin as a flagship British marque in this visually impactful shot.

RUNNE R-U

P Mike B rookes Roper The judges liked the cooperation of spirit, teamwork and passion in total harmony. The great sense of scale and use of bold colour provide visual impact.

Award category: Amateur

R-UP NNE

WINN ER

Mark Tomlin son

The judges were impressed by the dimensionality, with the huge ingot mould standing proud in the foreground, with the background featuring a dramatic skyline and the striking vertical lines of the chimneys. The photographer’s image robustly fulfils the product and places element of the competition brief, and clearly demonstrates the UK’s ability to manufacture large, world class components.

Award category: 14 to19 year olds

RU The judges particularly liked Stevtets the ‘man operating machine, Wa making machine’ essence of this photograph. Contrasts of the well established machining technology against the advanced manufactured components. And, from a composition perspective, the monochromatic finesse of the engine block against the subdued colourful surrounds. The Judges Simon Young The Guild of Photographers One of the country’s most sought after photographers and tutors, his work has been commissioned by members of the Royal Family as well as major companies including the NHS, HP, American Idol and Selfridges. Alastair McDavid Managing Director, The Digital Asset Lab Establishing his reputation in the ‘90’s as a PR photographer, he pioneered digital imaging production for the global Travel Trade in Australia, Asia, USA, the Caribbean, plus most of Europe.

This image offers a great initial impact; strong use of colour results in this conceptual photograph drawing the viewer in and provoking questions about its content. The judges felt that the photographer had captured the people element of UK manufacturing’s future.

WIN N Meli ER Gar ssa ratt

The judges were impressed that this image was learly identifiable as the manufacturing facility of P U the iconic London taxi. The R E RUNN photo is well composed Emmaer and demonstrates the Weav manufacturing process.

Frankie Jim Pro Imaging Professional, Canon Consumer Imaging, Canon Previously a professional photographer, he joined Canon nearly three years ago and supports Canon’s professional users from news agencies such as Reuters and Getty and industry bodies such as the Association of Photographers. Will Stirling Editor, The Manufacturer magazine A journalist with editorial experience at several publishing groups including Euromoney and IPC Media, Will joined SayOne Media as editor of The Manufacturer in January 2009.

The EEF Photography Competition 2011 is open for entries from May

Can we

have it all? Lean improvement programmes have become an almost universal characteristic of manufacturing organisations in the UK, yet it is undeniable that many fail to achieve the returns reported also often in case studies. Jane Gray asks if lean can really let manufacturers have their cake and eat it, or if there is always compromise to be made.

Despite

a few examples of true lean transformation and exponential improvement, many organisations find that lean improvement in one area merely causes problems elsewhere — and most struggle to make lean programmes incur any impact on the bottom line. The reasons for this vary, but a common problem is the difficulty companies have with understanding the end-to-end dynamics of their business and the interdependencies that make getting meaningful improvement more complicated than optimising parts for a better whole. Counter-intuitive thinking and localised trade-offs are often needed. To explain this thinking further and suggest some scenarios where counter intuitive thinking might be useful, the following individuals have submitted their observations for TM readers to consider:

Julian Wilson, director, Matt Black Systems – A big picture analogy Imagine you are a skilled mechanic and have a fine tool kit. Some jobs stretch your skills and tools, others are simple. Some mechanics restore cars they have an emotional attachment to. Others restore vehicles that command a high value. The latter must consider issues like work, his family life, how long he will keep the car, its market and the financial cost — even the lost opportunity to do something else with his time. For a hobby this compromise is about self expression; in business it’s about investment return. These are the same big picture trade-offs that must be struck to if you have a chance of achieving your lean goals. Lean is not an end in itself, and should not necessarily be applied indiscriminately to areas that have no impact on your business aims. At Matt Black Systems we found that some improvements will actually undermine your overall goals, even if they appear to make a localised improvement. Ask yourself whether you are just implementing lean because “improvement” and “efficiency” sound good. If the answer is yes, your lean programme is vulnerable to failure.

Mical de Boer, business continuity director UK, De Boer Structures – Lean alone could leave you vulnerable

As well as having a strong business in supplying temporary facilities to events and exhibitions such as the Olympic Games and Farnborough International Air Show, De Boer also has a thriving business continuity arm supplying disaster

recovery services to companies brought to the brink of destruction through natural disasters, terrorist attacks and other unplanned calamities. As more companies invest in lean management principles to improve operations, eliminate waste and seek competitive advantage, we have seen

Lean Manufacturing

Mical de Boer continued a tendency on the parts of some to think less about the impact of these unplanned scenarios, focussing instead on perfecting the present. I would offer that for a true resilience of value provision a rigorous business continuity plan is an indispensible part of overall strategy and needs to be budgeted for alongside lean improvement. After the Boxing Day tsunami in 2004 we saw a peak in companies with extended global supply chains investing in disaster recovery plans however the impact, even of a disaster of this magnitude, quickly fades in people’s minds

and the continuity planning activity soon declined again. This is a general trend. While a lean mentality to problem solving and empowerment of frontline staff will undoubtedly be of assistance in the event of a disaster, enabling a company to get its processes back on their feet efficiently, there will simply be no business if a plan is not in place to conjure a new work environment on demand. Trade-offs should not be made between business continuity plans and lean agility; the two must support one another.

Paul Wildman, supply chain director, AB World Foods – Lean in the real world As we’ve expanded lean from a start base on the shop floor to include functions like planning logistics and finance we have inevitably found that there can be conflicts between areas which have started working in a lean way and those that have not. However, our way of thinking about this is not that progressing lean is causing problems so much that it is highlighting opportunities.

Where lean operations (which are being expanded with one consistent approach) interface with non-lean there is a catalyst for change not a constraint on lean potential. Of course our work with lean is pragmatic. In a purely theoretical sense we could become leaner in our capacity utilisation and streamline our production for further reduced costs.

But we live in a real world and in the food business, for example, short notice on promotion opportunities with the supermarkets will come up and we want to be able to say yes to them. As a consequence we think of lean as a way of enabling our response to the realities of our business rather than as a constraint on that or as a movement towards a text book lean ideal.

Old management is about “or”, lean management is about “and”. For example, quality AND low cost. This way of thinking is counter-intuitive to a western business ethos dominated by mass production principles. At the heart of this challenge to conventional western business is the fact that lean focuses on the long term rather than short term. A short term advantage is of limited value; quick wins are useful for getting buy-in but are not end goals for a sustainably lean organisation. Lean leaders take time over decisions in order to discuss, confer, and probe alternatives - but take a short time to implement. This reverses traditional western approaches which perpetuate macho decision making and “botched” implementation. Lean managers know that a machine is at its worst when new and the sense of choosing the smallest (right sized) machine, rather than a big, fast machine. The big machine may have lower unit cost of production but it results in a

build up of inventory and longer lead times. At the operational and tactical level, operators, rather than industrial engineers, do the line balancing and timing. Schedules are based on small batches and frequent changeovers rather than the reverse and even when there is no changeover, mixed model assembly (ABCABCABC) is better than non mixed model (AAABBBCCC). Lean operators adopt responsibility for quality, rather than relying on an inspector downstream. They are empowered to stop the line when defect are found thereby building an attitude of zero tolerance to defects, rather than an ‘it’s good enough’ mentality. Focusing on efficiency and cost reduction often inadvertently results in worsening efficiency and driving costs up because there isn’t necessarily an understanding of the importance of addressing root causes. A focus on effectiveness – delivering value for customers will reap far greater benefits.

Acknowledgements go to John Bicheno, author of The Lean Toolbox and Introduction to Lean, for influencing this response.

Barry Evans, senior research associate, Lean Enterprise Research Centre – Lean counter-intuitives

March 24, Ansty Hall, Warwickshire

Where do we go wrong? Jane Gray investigates lean failure and success ahead of Lean Connect and talks to speakers about their hopes for the event and the further development of the lean practitioner community. Lean has arguably been the dominant method for creating efficiency and gaining improvement in manufacturing for several decades now. Certainly its power for competitive advantage has been recognised in the Western world since Daniel Jones and James Womack published their seminal works ‘The Machine That Changed The World and Lean Thinking’ in the early to mid nineties, translating the business mentality that brought Toyota such exponential success. However, despite the celebrity that lean has gained as a favourite cure-all to manufacturing maladies many companies have found that simply committing works like those of Womack and Jones to memory and becoming word perfect in the definition of lean tools and their uses does not bring about the hoped for cost reductions, growth of market share or efficiency in production and distribution. Why is this? Has something been lost in translation as Japanese lessons have alighted on Western shores or are companies failing to recognise fundamental failings in their approach to lean implementation?

These are the questions which the Lean Management Journal, sister publication to TM, hopes to answer at Lean Connect on March 24th at Anstey Hall in Warwickshire. The event aims to jolt conventional improvement thinking out of accepted modes in a thought provoking conference and will also provide a unique opportunity to assess the external resources available to support lean improvement in one-to-one meetings with potential improvement partners. While the message given by speakers emphasises that the critical mass for change, both in terms of employee buy-in and technical knowledge, must be built internally, there are undeniably moments when fresh eyes and professional help are needed. Choosing the right partner for your culture and business needs will be crucial. Here the chair and introductory keynote for Lean Connect explains how they hope delegates will be challenged to reconsider their thinking about lean — either as they start on that improvement journey or as they try to take existing programmes to a new level of effectiveness — and advise on what delegates should be looking for from the providers they meet.

Jeff McGowan

Sourcing manager, Johnson and Johnson LifeScan – Lean Connect chair I recently re-read this quote from Taiichi Ohno on the subject of improvement and it struck me that this is exactly what people need to be considering when they come to this event: “What we need is a sort of revolution of awareness. Unless we change how we think, there is a limit to how much we can accomplish by continuing the same thinking.” “This revolution of awareness will become exceedingly important. Without it we are at risk of being happy with achieving only an improvement of 10% or 20% of productivity as a linear extension of our current ways.” (Taiichi Ohno, Workplace Management (Gemba Press, 2007)) Delegates need to think about what they are trying to achieve through improvement activity. Do they want to gain 10-20% improvement in particular areas or do they want transformation? If they want full transformation then they need to think differently and really understand their

objectives. It is not enough to say ‘lean is a good thing for the business’ and leave it at that. How do you gain this understanding of what you want from lean? Everyone begins their lean journey by trying to define their current state, usually through typical Rother and Shook style value stream mapping. This then progresses to future state mapping and the whole process is very much at a tactical level rather than a business and organisational level. This is necessary and valuable work but what often happens is that organisations create these maps, analyse the gap and implement lean only to find that in two years time the same problems and inefficiencies have come back. What has not been talked about much before is the need, before you try and move away from your current state, to understand why that current state has come about. Whatever you’ve got is a result of your current thinking, the existing beliefs of your organisation and the policies which enforce these. Accounting methodologies are a classic example of policies which cause lean improvements to revert. Are you still using absorption to drive product costs and therefore driving the wrong measures? What are you policies around remuneration? What criteria do you employ for rewarding staff – short term improvements or long term outcomes? If you try and move to a future state without changing these beliefs and policies you will only undermine your work.

Keith Copeland MBE Nissan UK, primary keynote

How do we integrate lean and continuous improvement into an organisation? I have undertaken a great deal of research around this, during my PhD and on secondment with the regional development agency One North East, to discover what it is that manufacturing organisations do right and wrong with lean. Why, in some organisations, does lean simply not return what magazines and books tell us it will? Two major areas for concern came out of this study. One was a lack of business acumen; the second was a lack of what I term ‘lean acumen’. By the former I mean a company’s ability to understand its position in terms of the issues in their business (and their customer’s businesses) that place it in relationship to its competitors. This business acumen also requires that companies recognise both where they must be and where they want to be – which are similar but different – and align this with their mid-term business plans. I have seen strong evidence that most senior managers make important strategic decisions on less than factual information and perceived problems rather than real understanding of the issues within their business. Lean acumen is a phrase I coined to define what it is to know where, when and how to use lean. People have a

limited understanding of the tool kit for lean which they have gained through reading books or through some contact with a consultant but what they often don’t have is an in-depth understanding of what these tools are for or a rationale for how they will be used. Added to this there is a tendency to underestimate the level of lean understanding needed throughout the organisation in order to get real results. I particularly find that companies fail to realise the important influence and position of employees at a supervisor level. This is easily as important as buy-in at a senior management level which is what we hear a lot about these days. When looking for external help in implementing lean it is crucial to understand where your business is and why. Ideally I think this should be done through self assessment but there is no denying that having a facilitator to act as a third party devil’s advocate can have a massive impact. Subsequently, after a company’s intentions have been identified you can start discussing what will be needed to achieve change. Again this is likely to require someone to teach and facilitate some kind of policy deployment approach. The final step is to go into the detail of which tools and techniques you will need and how they will be used. You will need to identify the right people to train and more than likely engage a consultant or training organisation to help build this knowledge. Be sure that this provision is not just classroom based learning but is supported learning in the workplace. An understanding of all this is the absolute minimum I would expect delegates to take away from this event.

For delegate information please contact Benn Walsh at: b.walsh@sayonemedia.com or: 0207 401 6033 For remaining sponsorship opportunities please contact David Alstin at:

d.alstin@sayonemedia.com

Vorsprung Durch Manufacturing What can the UK learn from Germany? Manufacturing has been generating very positive headlines recently with the dawning realisation of politicians of all parties that the UK needs a vibrant and growing manufacturing sector as part of a balanced economy that can deliver export lead growth.

With

manufacturing now languishing at around 13% of UK GDP it is sometimes difficult to believe that the UK was a manufacturing superpower from the time of industrial revolution through to the 1960s – and then began its long and seemingly unstoppable decline. But at the same time as UK manufacturing started to lose its edge, Germany started to develop a powerhouse manufacturing sector that is still delivering massive benefits to the German economy today. Germany is the world’s fourth largest economy, fourth largest manufacturer (manufacturing still accounts for around 20% of GDP and is approximately twice the size of UK manufacturing GDP) and second largest exporter. Many of its companies, products and brands are world leaders and it has a reputation for quality that helps build the “made in Germany” brand and obtain a premium price for its products. Germany also manages to be successful as a manufacturing economy despite its high labour and infrastructure costs, its high levels of unionisation, the required involvement of workforce representatives in management strategy and decisions in larger companies and its high levels of regulation. Finally it has developed a “mittelstand” of medium sized manufacturing companies which provide a huge drive to the

manufacturing sector and the economy as a whole. Germany is also managing to maintain its success in the light of competition from China and the other emerging economies. According to UN Data, manufacturing output (by value) increased by 57% in the UK between 1990 and 2008 but in Germany it increased by 75%. Even with China’s astronomical rise as a global manufacturer, Germany’s share of output amongst the world’s leading manufacturers has still remained above 10% - the UK has slumped to just 4.3%. It has to be said that many of the fundamental issues faced by Germany in the last 50 years around costs and global competition are the same or very similar to the issues faced by the UK. So, why has the manufacturing sector in Germany performed so much better than the manufacturing sector UK? Clearly there are many factors that influenced the decline of manufacturing in the UK and the growth of manufacturing in Germany and this short article cannot cover all the complexities and issues. However, we summarise below five, often inter-related, factors that seemed to have been fundamental in the building and maintaining of a vibrant manufacturing sector in Germany.

1 Strong national commitment to manufacturing: Successive German governments have been clear on and consistent in their support for the manufacturing sector and this has helped build the framework that has provided both national champions with a global footprint and the mittelstand. As part of this support the German government has provided or facilitated incentives and subsidies for manufacturing with a focus on the development of key sectors. The obvious example being the massive growth of the automotive sector and world leading vehicle brands in Germany compared to the relative decline of automotive in the UK. To support the sector there are strong connections between industry and Universities and this has helped manufacturers develop world leading processes and products. The German system of research institutes stems back to the Kaiser Wilhelm institutes of the 19th century and continues today. Perhaps because of the success of the sector engineering is recognised as one of the leading career options and company CEOs tend to be engineers rather than finance trained people. 2 Focus on advanced engineering: As noted above, there are long standing connections to the education system that provides research and innovation to the sector and also provides a consistent pool of highly qualified engineers as well as an involved and committed workforce. Germany has a superb reputation in engineering and is renowned worldwide for the quality of its products. This has been supported by the fact that savings are disproportionately

3 Availability of bank funding: The stock market and private equity is not as important in Germany as it has been in the US and the UK and a large element of the corporate funding required in Germany is delivered through the banking system. This funding, particularly to the mittelstand, is often provided through the Hausbank system where companies have a longstanding, largely exclusive banking arrangements with one-main bank that is often locally based and understands and supports the local market and economy. The banking system in Germany has been more understanding and supportive of the long term nature of the sector and the requirement for longer term funding. One of the differences in the German economic model seems to be the use of debit cards rather than credit cards which gives a better profile for bank funding and savings – giving the banks the ability to invest. Finally as manufacturing is a much more highly regarded sector in Germany banks (and other funders) have been more inclined to be supportive of what is a key sector in the economy. 4 Employee “voice” and loyalty: German employees enjoy a high rate of pay and a high level of job security which seems to be part of the national culture. In times of stress German companies will try to use work-sharing (kuzarbeit)

rather than making significant job cuts which in turn helps maintain loyalty and all important skills within the workforce. Union influence is still significant within the private sector in Germany and in larger companies half of all seats on supervisory boards are reserved for employee representatives and through this the workforce enjoys considerable veto power. However, the workforce appears to exercise their power responsibly and have been a key part of the success of the sector. 5 More effective manufacturing processes: As noted manufacturing (engineering in particular) is regarded as a valued occupation and helps drive the education system at school and university level. German manufacturing companies tend to be lead by engineers, and combined with the strong connections to Universities, there is an inbuilt understanding of how to make manufacturing processes deliver quality and efficiency. The support from the banking system has enabled a high investment in machinery and technology which has helped offset the higher cost of labour and infrastructure. In addition German manufacturers were early users of low cost economies to help them maintain their competitive edge. In recent years German companies have become significant global players and were early investors in China. For example Volkswagen established operations in China more than 25 years ago and became very successful very quickly. It is still the largest foreign car assembler in China with something like an 18% market share.

Lessons to be learned? Clearly the German manufacturing sector is not perfect and has had its share of problems and difficulties. But it has to be said that it has proved to be impressive and resilient - and has given a major foundation to the success of Germany as an economic superpower. There is

also no doubt that the German government is committed to ensuring the continued success of its manufacturing sector. It is no wonder that the current UK government (and to be fair the last government) has concluded that having a strong manufacturing sector is a good idea. The manufacturing framework concept gave the Government a great opportunity to clearly establish its support for the sector and give guidance on how it would provide the framework to help support the long term success of UK manufacturing. Therefore the delay and cancellation of the manufacturing framework was a disappointment. Developing the UK manufacturing sector in future years will not be easy and many commentators consider that the damage of the last 50 years has been too deep to reverse, particularly in the face of ever increasing competition. Unfortunately this may be true. But we must be able to build on the excellent companies and skills that we have in UK manufacturing to maintain a vibrant sector that has a key role in the UK economy and what might end up being a niche place in the world manufacturing economy. In my view this will mean that government understands that it does have an important role to play in establishing a framework for the success of manufacturing in the UK. Perhaps we should learn from and adapt the factors that have made German manufacturing a success over the past 50 plus years?

BDO

channelled (via Germany’s bankdominated system of long term capital) into supporting advanced manufacturing. Over the last half century, each succeeding recession has left many US and UK manufacturers more financially exposed and needing to reduce costs, labour and investment. Whilst the same conditions have applied in Germany the longer term view has enabled German manufacturers to better maintain their levels of investment and they have consistently increased their market share in advanced manufacturing.

Tom Lawton Head of Manufacturing at BDO LLP Accountants and Business Advisers tom.lawton@bdo.co.uk

For more information please visit: www.bdo.co.uk

24TH MARCH 2011 Ansty Hall Hotel, Coventry, 09:00 to 17:00 The Lean Management Journal and The Manufacturer magazine invite all lean and operational excellence professionals to a unique one day event of lean networking and learning. Whether you are well advanced on your lean journey or just starting out this event will challenge the way you think about lean best practice and organisational change. The Lean Management Journal (LMJ) provides valuable insight into thought leadership and real life implementation challenges for all companies and individuals seeking improvement. With contributions drawn from across the public and private sector the diversity of information and inspiration available in LMJ makes it the ‘must read’ publication for those lean leaders in all environments.

Who should attend LM Connect?

• Champions and sponsors of lean/ continuous improvement programmes

Lean Management Connect will put delegates in touch with a diverse range of lean and operational excellence service and support and allow them to identify the right external resources they need for their lean

• Global or multisite operations and production directors

programme whatever its maturity.

• Trainers and coaches

By attending delegates will be able to:

• Process/Operational excellence directors and managers

Listen to over 10 lean best practice case studies and keynotes. Share ideas and approaches and learn from battle scarred lean leaders in panel debates and networking sessions

• Lean Managers and directors

Discover the approaches and methodologies for lean success through best practice case study presentations and thought leadership keynotes

• Leaders in HR, Procurement, Supply Chain

Identify new services, products and approaches to support their companies or individual lean journey

• Change management managers and directors

CONNECT FORMULA One to One focused meetings

The connect element enables each attending company to meet vendors across the spectrum in short one to one meetings. Delegates attending the one to one networking meetings will receive the discounted networking rate of £95 + VAT per delegate, which included lunch and refreshment, delegate pack and access to all the breakout case studies and presentations. The nonnetworking delegate rate is £295.00 + VAT.

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SPEAKERS INCLUDE: CONNECT CHAIRMAN Jeff McGowan, Johnson and Johnson

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This workshop will teach you the steps to do it right the first time (or at least THIS time) and connect you with organsiations who can support you and your company on your lean journey.

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LEAN MANAGEMENT PROGRAMME – 24TH MARCH 2011

Jeff’s presentation will give insight into the intricacies of planning your improvement trajectory. Do you really understand your current state? What are the intrinsic policies and practices within your business that mean previous programmes for efficiency and effectiveness have not been sustained or failed to return the anticipated results?

MORNING KEYNOTE: BUSINESS AND LEAN ACUMEN AND THEIR PART IN DEVELOPING A LEAN AND SIX SIGMA STRATEGY Keith Copeland MBE, Nissan Motor Manufacturing (UK) Ltd

The presentation will discuss the importance of good Business and Lean acumen. Keith will explain what the two terms entail for both at a strategic level and for critical players in lean and continuous improvement programmes. Failure rates for lean initiatives are still high and Keith will give insight into the reasons why this is so.

THE CHALLENGES OF CREATING A LEAN STRATEGY DESIGNED TO EXPLAIN, ENGAGE AND ALIGN THE BUSINESS TO THE REQUIRED CHANGE. Richard Lloyd, General Manager, Constellation Park The presentation will aim to highlight challenges of creating a lean strategy based on real experiences in the competitive and fast paced FMCG industry. Richard will offer ideas for how these challenges can be overcome and couple his insights with the latest views and thinking from lean academics such as Mike Rother and David Mann. The persistent problems of senior management buy in, aligning functions within a business, the balance between tools and behaviours will all be addressed.

BUILDING AND EMBEDDING A BUSINESS WIDE LEAN CULTURE THROUGH EDUCATION AND ENGAGEMENT Ben Salder, Senior Business Improvement Manager, BAE Submarine Solutions

Build durations of 6-10 years, takt time of 26 months, some of the staggering statistics at BAE Submarine Solutions. In this presentation Ben will illustrate their approach to building a lean culture, The Transformation Toolset Programme (TTTP). Over the past three years this training programme has been aimed at building internal capability and facilitating change and improvements across the site. Ben will give insights into this lean learning model and the lessons learned from the development of TTP.

To view all the speakers and case study presentations visit

www.themanufacturer.com/lmconnect Early Bird Offer – Register before 18th Feb 2011 All delegates who register before the 18th Feb 2011 will receive a FREE Amazon Kindle reading device. Offer available to all delegates who register before early bird date and who attend Lean Management Connect. Cannot be used in conjunction with any other offer.

THREE WAYS TO REGISTER: 1: Book online by visiting: www.themanufacturer.com/lmconnect 2: Telephone Ben Walsh on: 0207 401 6033 3: Email: j.tudor@sayonemedia.com RESEARCHED BY

SPONSORED BY

Power

broking

Energy purchasing strategies explored Understanding the free market for buying energy can make a big contribution to a company’s bottom line. But simply knowing when to trade energy is only the tip of the iceberg for a successful energy purchasing strategy. Tim Brown investigates the complexities to overcome when devising a competitive energy contract.

The

increasing cost of electricity and gas is of considerable concern for UK manufacturers who, as high volume consumers, are particularly susceptible to the market’s volatility. While all businesses have a range of outgoings to manage, it is important to remember that for most established companies the single biggest cost after manpower is energy. For this reason, managers are continually searching for energy savings: either through consumption reductions; or by manipulating the way in which energy is purchased. While reducing energy consumption —and, in turn, the carbon footprint of a company — is important and now a legislated necessity, other savings are also available. These may be found simply by market-testing a company’s current energy contract against the raft of different choices that are available. Within the two primary options of fixed or flexible contracts are a myriad of options that reflect different levels of risk and return. While this engagement with

the market is key, it is not the first step towards a less costly energy bill.

A little help can go a long way Deciding on the level of assistance required to enter into the energy market is the first priority. This likely depends on the size of the operation in question and the level of risk a company wants to undertake. Some larger companies have a high level of in-house expertise — and the ability to monitor markets and purchase accordingly. Others, with less internal specialisation, may seek the assistance of consultants with the requisite monitoring infrastructure, knowledge of pricing and contractual arrangements. Derek Dixon, CEO of consultancy group Energy Services Partnership (ESP), says his company’s key services are based around “energy procurement, the timing of deals and ensuring the right contract structure so that it fits with a customer’s operation and risk profile.” “The key,” he says, “is to know what to buy and when to buy it. In other words determining what is a good price, when to go to market and for what time duration should you contract.” According to Mike Beavis, senior plant engineer at Essex-based tractor manufacturer Case New Holland (CNH), an energy consultant is an invaluable resource in the procurement of energy. “If you go it alone and go straight to the energy companies and start buying energy like you would at home, I think you will pay more than you need to. If you get the right consultant with whom you build the right working relationship, then you will get excellent advice.” Although a consultant is certainly not a requirement for a successful foray into energy trading, even the suppliers admit they play an important role. According

Energy

and Sustainable Manufacturing

to Wayne Mitchell, head of corporate clients at energy supplier npower, under the right circumstance a consultant can be an important resource. “We sell both directly to end users and through consultants,” says Mitchell. “For us as a supplier, the consultant is useful and valuable where the end user isn’t certain of what they are doing. In that case we get a better level of data when a consultant is involved and get a better understanding of the customer. In those cases the consultant can actually negotiate a good deal on behalf of the customer and introduce functionality to the end user.”

A matter of choice When it comes to energy pricing, the ideal would be to secure a long term contract fixed at a rate at which the market never falls below – the bottom of the market, in other words. The tumultuous period of economic decline over the last two years saw the dizzyingly high energy prices of 2008 come crashing down. Those companies savvy enough to have estimated the pricing trough, such as CNH, took the opportunity while prices were low to purchase energy in bulk. “Two years ago we took the decision to move to a fixed contract because our analysis of the market said that the price was going to decrease, bottom out and then take off again,” says Beavis. “Working with a consultant at the time we managed to hit the bottom of the market.” The current view of fixed contracts is strong. The experience of consultants such as Apollo Energy is that a majority of customers are looking to fix at the moment as they are unlikely to gain anything on the flexible market. “Experts in the industry are generally predicting that the energy price is going to rise,” says Apollo Energy director Jackie Gray. “Companies are considering the percentage chance of getting the price any lower is a much greater risk compared to the chance of it increasing. From an accountants perspective a fixed price also makes everything much simpler if they are not aware of how to operate flexible purchasing schemes.” Short of a double dip in the economic cycle or the advent of cold fusion, it would seem that energy prices, over the course of this year, are destined to only travel one way – up. However, on the scale of life’s definitive outcomes with death and taxes at one end, the predictability of a free market is certainly at the polar opposite end of the spectrum. Npower’s Mitchell says the benefits of a fixed contract are obvious, if a company manages to purchase at the right time. He adds, though, that a flexible contract offers the same ability to buy for an extended forward period, but allows a company more time to react. “If you wanted to fix for two years your price is locked,” says Mitchell. “If you are concerned and your view is that prices are going to go up, then that is a good thing to do. You are, however, removing any possibility of taking advantage of any decreasing movement in price. The majority of the products we

sell to the industrial market are flexible: you buy for the period you want when you see fit.” To take full advantage of a flexible product, a company operating independent of a consultant needs a good deal of knowledge and time. Dixon says for many companies “a fixed price structure is precisely what their business risk profile dictates but they sometimes get sold in to a flexible arrangement because people convince them that with such an arrangement they can’t lose irrespective of whether prices go up or down. Very few consultants fully understand traded commodity markets and therefore cannot properly manage the risks such structures present to their customers. It is absolutely key therefore that customers focus on the bottom line impact their energy purchasing strategy could have and then choose which contract structure best fits the bill.”

Give and take The main focus with most energy purchasing ventures is to secure the best possible energy pricing for each unit purchased. For this reason, many energy contracts are structured as volume purchase agreements which are an integral part of a fixed contract — and are also often applied to flexible contracts. Essentially, the buyer agrees to purchase and use a minimum amount of units within a given time frame. In exchange for this commitment, the seller extends a highly competitive rate per unit. There is a cost to this agreement, and it comes in the form of what is known in the industry as a volume tolerance — or to the user, a take or pay clause. The concept behind the clause is straight forward and designed to provide suppliers with a level of security. Essentially, it means that you will pay for the electricity you agree to take, within an agreed scope for variation (10-20%), regardless of whether or not you use it. This includes a tolerance for overuse, too, with excess usage charged at a day rate: often double the contacted rate. Usually tolerances are spread across a company’s

Tractor maker Case New Holland opted for a fixed electricity contract in 2009.

annual usage, but monthly take or pay clauses are beginning to emerge. Having only really come in to force in the last 24 months, there is some disparity in the market place as to whether or not volume tolerances are strictly enforced. “If you had asked me two years ago how common take or pay clauses were and how often they were invoked,” says Dixon, “I would have said they weren’t common and they were never invoked.” He admits that the lenience for tolerances has now shifted, and penalties for veering outside the agreed consumption range are strictly enforced. In comparison, while Gray admits that take or pay clauses are an important consideration for companies, she says that the occasions when the clauses are invoked are still few and far between. But just how complicated is it to predict how much power a company might need? “The reality with volume tolerance,” says Mitchell, “is that if an end user knows how they use energy at their site and how that energy consumption changes according to the processes that they are running, it is possible to forecast within the volume tolerances. The volume tolerances are there as a protection to us so that if a customer turns off its processes, we are not left stranded with the energy that we purchased on behalf of that customer.”

The concern among many companies, even with the most accurate forecasting, is the impact of something that they cannot predict. For instance, a long period of unscheduled downtime due to a strike or the loss of a major contract could vastly impact the ability to consume its agreed quota of energy. Of course, the beauty of the free energy market is that if a company is over supplied it could simply utilise its load management provisions and sell back its excess energy in to the market. This ability must, however, be a stipulation of the original contract. Other factors — including the CRC Energy Efficiency Scheme which mandates that companies must improve their energy efficiency — complicate the matter of volume tolerances further. “If you are trying to reduce your usage for CRC, and that takes you down to 80% of your usage, it is unfair if you are penalised,” says Gray. However, she admits that suppliers are open to communication. “If you know something is going to happen to impact on your consumption, the sooner you let your supplier know the more flexible they are going to be about it. This is because some of the suppliers might only buy a portion at a time of a contracted load from the energy producer.” Dixon says that companies that are trying to reduce their energy consumption for CRC purposes

Energy and Sustainable Manufacturing

could fall foul of take or pay if they are not careful. “Customers should make sure that when they are putting contracts in place is that they are quite clear as to what the consumption forecasts are based on. For our clients we try and make the numbers as robust as possible by factoring in efficiency savings and agreeing the estimates with suppliers from which the contract prices are then based.” Gray highlights however that when tendering for a contract most suppliers base their offers primarily on historical data may make communicating a change

to the forecasted usage slightly more complicated. According to Nick Grant of British Gas Business, the setting of a volume tolerance should be made in discussion with the customer, and ought to be looking forward primarily. “In absence of data or discussion with a customer, we will use historical data and usually the industry standard 15 per cent tolerances. However, we are not just open, but proactively want to engage with our customers, because that is one element of the cost that the customer can directly influence.”

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Energy and Sustainable Manufacturing

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The Nuts and Bolts

Over the last two years there has been a large amount of variation in the market, which has been up to 5% week-on-week. Despite this the difference in prices between suppliers on large contracts can be as little 1%. If a company already has a strong relationship and an open communication line with a supplier, focusing on such a small saving could be counterproductive. The extent to which a strong rapport has been developed is important and, according to Apollo’s Gray, the industry is not renowned as an arena where personal business relationships are particularly common. The price at which you make the deal in the first instance is only one consideration in comparison to the whole contract with volume tolerances and load management provisions being an important consideration. Like Grant says: “It is a bit like if you are looking for a builder; a cheaper builder may end up costing you more at the end of the day because they are hiding the extras.” If you suffer a take or pay penalty, for instance, because the cheaper contract has a much tighter volume tolerance, it may erode the entirety of your saving. Remember, you often you get what you pay for.

What you need to know from this article Large energy cost savings can be made by simply market-testing a current energy contract against the raft of different choices available in the market. An energy consultant can help negotiate a good deal and better contract functionality on behalf of the customer Many energy contracts both fixed and flexible feature a minimum and maximum amount of usage known as a volume tolerance or take or pay clause. Volume tolerance penalties can be considerable and are being enforced more frequently. Load management provisions such as the ability to sell back excess energy in to the market must be stipulated in a contract. Early communication with your energy supplier is vital if a company’s forecasted usage is likely to change.

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PLM for profit Small steps

As TM gears up for the next of its technology Connect events in February, Product Lifecycle Management (PLM) Connect, Jane Gray talks to end users and technologists to find out whether this technology really delivers all it promises for product innovation, portfolio management and business agility.

Chris Collinson, engineering systems administrator at DEK Printing Machines, will be sharing his experience of evolving PLM potential at PLM Connect on February 17. In particular Collinson hopes to share the realisation that PLM has just as much value for business functions and processes

Product

outside the design and engineering Lifecycle Management (PLM)

departments, as it does within this

systems have experienced a boom

traditional user base. Collinson

while other markets have struggled in the recession. Large enterprises,

tells TM: â&#x20AC;&#x153;Our PLM capabilities

who invested before the downturn, continue to upgrade and seek new

have emerged as a natural

benefits and a growing segment of mid-sized companies are now taking

progression. When I joined DEK

advantage of lower priced systems with web based services

14 years ago we had very little

and capabilities which were beyond their financial reach in

control over the CAD data that we

traditional formats.

were then using. So we started

The growing popularity of PLM throughout the recession has been

implementing a PDM [product

driven primarily by the quick ROIs it can give by controlling costs (like

data management] system, as we

prototyping costs) and increasing operational efficiencies through

managed to control our data better

better product data management. However, as the dismal economic

and to use it correctly new thinking

environment of 2008 and 2009 begins to lighten, longer term strategic

has opened up around who else

interests in PLM are becoming more dominant and the bite-sized,

might be able to use the data sets.

function specific investments which previously characterised many

What controls do we need and at

purchases, particularly by mid-sized companies, are beginning to look at

the same time how do we open

the broader enterprise picture.

the data up? This thinking has made a full PLM system the next logical step.â&#x20AC;? Collinson gives an example of

When we get down to the specifics of manufacturing companies we need to understand how PLM can help add value through managing the assets

how this expansive thinking has

Allan Behrens, Founder, Taxal

redrawing images in programs like

brought benefits: â&#x20AC;&#x153;For technical publications featuring images of our machines people used to go around taking pictures and CorelDRAW. Suddenly we were

to reduce material costs, get

for implementation. Who do you

those images and that there was no

suppliers to deliver on time, and

go to for advice? Where are the

reason not to use the engineering

effectively monitor and manage the

information sources?

data. We’ve now opened up the

performance of a workforce. These

“When we get down to the

system so that those responsible

are business issues and most

specifics of manufacturing

for the publications can create

companies struggle to see how

companies we need to understand

the necessary quality images

new technologies are really going

how PLM can help add value

from the 3D CAD data before the

to help address them.

through managing the assets

physical object has been made.

“This challenge is not helped

inherent in and around your

This really reduces our time to

by the fact that many IT vendors

products throughout their lifecycle.

market because we are all working

present such a complex view

This is a very complex challenge

concurrently; nobody has to wait

of available technologies when

and turning that complexity into

for anyone else.”

actually, in essence, things

simple value is what we want to

like social media and cloud

achieve through the use of the new

technologies are very simple

technologies that PLM offerings

to understand and, given an

are starting incorporate and

opportunity and a clear description

interface with.

Great leaps DEK have come a long way in their ability to control and optimise their product data but there are still further steps to be taken. Collinson identifies an area for next steps in exploring the possibilities for interfacing more closely with suppliers and other supply chain partners through their PLM system. Allan Behrens, founder of technology analyst and consultant company, Taxal, and the closing speaker for PLM Connect, has more ideas about what interconnecting technology developments might mean for the benefit of companies, supply chains and business networks. Behrens talks about the challenges for companies looking to exploit technology investments

the value proposition becomes

When thinking about PLM

self evident – I will go into this in

and its potential as an enabler,

more detail at PLM Connect but

it must be understood that we

what companies need to do when

are not talking about a discreet

approaching new technologies is

technology; there are many

cut away the jargon, look at each

stakeholders involved. Nor is

individual technology in its own

PLM a single tool, it is more of

right, look at where each can be

an environment. Remembering

used practically and consider what

this, a company would be best

sort of valuable, as well as how

placed to think about all available

much value it will bring.

technologies and consider how

“There needs to be a rationale for measuring this value at the

PLM Connect

able to see that we already had

they might enhance collaboration internally and externally.”

same time as acknowledging that certain benefits will be very intangible. I hope that at PLM Connect we can have some discussion around these points and then start looking at routes

as part of a long term strategy for ROI and business improvement: “There are a lot of new media out there in terms of social media and cloud technologies and many companies struggle to see how these will be of tangible value to their business. Common business issues and questions

PLM Connect is being hosted by TM on February 17. If you are interested in attending please visit:

www.themanufacturer.com/plmconnect For full event information or call 0207 4016033 to book your place.

are more often around how

Mastercam’s brand new ‘PortExpert’ module for automated 3 and 5 axis head porting

CAM software

takes next

step

Productivity needs push software capability further

Computer-aided manufacturing (CAM) software is a fast moving area of IT where small improvements can save companies thousands of pounds. Brian Davis’s roundup of the latest innovations in the CAM software market focuses on ease simpler programming for ease of use, faster processing times and flexible manufacturing.

Operating

in very competitive global markets, UK manufacturers are under constant pressure to keep up with the latest machining technology. As the bar is raised, new and innovative CAM programmes are being introduced to improve machine efficiency, save programming time, generate more efficient tool paths and reduce machining time, as well as reducing waste and improving ease of use. The move towards ‘lights out operation’ also demands high levels of reliability in a fully automated plant environment.

Stock model approach Delcam marketing manager Peter Dickin says, “Companies want new users to become productive as quickly as possible for fast, high quality machining.” He sees three key trends. “Growing use of multi-core (multi-processor) computers allows faster calculation times and background processing. Machine tools are also getting more sophisticated,

so software must be capable of handling multitasking, and finally easy to use software is vital.” Delcam deploys the stock model approach in PowerMILL, which gives a precise representation of how much material remains on the part after each machining stage, to ensure that the cutter is never asked to remove more material than it can safely cut, or is left cutting air. Feature-based machining offers a more automated approach to programming. This breaks down the model geometry into features such as holes, pockets or cuts, so the software can select the appropriate tools and speeds to match the model, material and other parameters. Delcam’s 2011 version of PowerMILL CAM for five-axis and high speed machining claims to make programming of safe tool paths faster and easier using new stock model options that protect the cutting tool and the machine from excessive loading. New editing facilities simplify the machining of duplicate items, with more versatile control of the feed rates and links, and extra functionality for sketching.

Innovation design and the product lifecycle

FeatureCAM, CAD/CAM software from Delcam which markets on its ease of use, now incorporates 64-bit processors and improved data exchange to support direct translation of 3D-design models from Catia V5, Siemens NX and Solid Edge, Pro Engineer, Autocad Inventor, SolidWorks and others. Also stock models can be used to select appropriate operations from turning to five-axis machining

Flexible manufacturing and measurement Increasingly, machining plants are looking for flexible manufacturing. Mastercam software supplier 4D Engineering is receiving a lot of interest in new hybrid machining software. “Mastercam V5 features new tool path engines for hybrid machining, i.e. automatically selecting whether to use three or fiveaxis tool strategies,” explains sales director Stewart Roney. “New tool paths have also been developed for the ISCAR range of tooling for rapid mill turn, roughing and other features.” There are also new developments in Robotmaster, which works within the Mastercam environment for six-axis machining. US metrology software developer Verisurf partners with Mastercam. Verisurf X5 features a new Catia interface which is able to extrapolate the engineering tree directly from Catia 5 into the Verisurf tree, so defined feature inspection can be carried out directly off the CAD model. The operator can also inspect live the general dimensioning and tolerancing (GD and T) for model-based definition, or MBD. MBD offers the ability to define feature characteristics of a 3D blueprint including surface hole location, edge of part and anything defining the component. “The inspection time can be reduced by 70%,” claims Verisurf director James Barnes. Verisurf has also introduced Master3DGage, a six-axis articulating arm which interfaces with Verisurf software as a portable computer-based measuring machine (PCMM) solution suitable for any engineering workshop.

their high end machine controllers for significant time savings. According to Phil Juhasz, strategic account and engineering manager at Mori Seiki, “integrated CAM software provides simple programming for complex work pieces, and a machine-specific post processor. Feature based programming means it only takes a few steps from the 3D CAD module to complete the machining programme.” ESPRIT 2011 features an updated core system with improvements on the calculation side, for machining impeller and gear addings, and new mould cycles for spiral finishing, radial finishing and plane finishing. MAPPS iV offers a new generation of controls with a duo-core-processor and CAM module. For lights out operation, Mori Seiki also provides Morinet to monitor machines and issue automatic alerts by text or email.

Increased automation Demand for higher automation goes hand-in-hand with two trends. Companies want to run more efficiently, often 24/7 and reduce their skilling requirements. “People are increasingly looking for lights out machining to have the clever bits [included] – from entry level to high production machines,” says Martin Doyle, UK sales and marketing manager of Hardinge Machine Tools.

The Master3DGage from Verisurf

De-skilling Geoff Bryant, managing director of Citizen Miyano UK sees increasing demand for simpler programming solutions, particularly in the sub-contract sector. “The key driver is to de-skill as much as possible, enabling shopfloor personnel to programme, set and operate machine tools themselves,” he says. Consequently Citizen Miyano has developed the CNC Wizard, now version 5, which features code libraries to provide help facilities. As a low cost solution – it is about £600 – the CNC Wizard does not aim to be a fully fledged CAM system, but allows the user to create programmes and shapes using a simple interactive programme.

Better control Several companies have identified the need for better control of machine programming. Mori Seiki has started linking ESPRIT 2011 as a CAM package to

Innovation design and the product lifecycle

In the mid-range of machine tools, Hardinge has introduced a dedicated automated cell, the GS51A which comes with a Fanuc or Siemens control. The gantry loader works with an automated pallet loader, with two-axis as standard and up to three-axis live tooling. “Traditionally, standalone systems always had the potential for compatibility and integration issues, which the GS51A cell eliminates,” says senior applications manager Steve Brown. Companies are also looking for scalability. “People buy for today in preparation for tomorrow when investing in automation,” says Doyle. Block lookahead is an important issue for high end machine operators. The latest Hardinge CAM software is designed to identify the implications of processing several thousand lines of machine movement ahead, down to 0.5 millisecond processing time. ‘The further you can look ahead the better the finish,’ reflects Brown. Hardinge’s mid- and high end machines feature three types of controls: Fanuc, Heidenhain and Siemens. The Siemens 828D control features Advanced Surface Technology, which offers mould-making precision down to one nanometer, reducing component cycle times from 48 to 33 minutes in tests and achieving a better surface. On the Fanuc side, a new machine overload torque detection system protects mechanical elements, calculating disturbance torque through the motors of the machine, and monitoring these points every millisecond. The latest Heidenhain 620 control is also cost effective. The super precision T-series multi-axis lathe features twin spindles and offers two micron repeatability.

Addressing utopia “Everybody wants utopia – cheap systems which do everything!” says Solidcam director Gordon Drysdale. In the real world, SolidCAM has launched an

entry level product, SolidCAM Xpress, which offers basic milling capabilities and is easily upgraded to higher versions for 3D and five-axis milling. At the high end, Solidcam iMachining is aimed at the aerospace engineering sector and offers 2.5D milling with intelligent tool paths, and reduces cycle time by up to 70%. The PLM vendors have also been very active in terms of innovation. Ian Pilkington, UK technical manager at PTC, explains that Pro-NC is designed to handle milling, turning and wire EDM, and NC Sheetmetal handles sheet metal manufacture. “The latest version of Pro-NC is focused on process reuse, using CAM software in concert with the CAD model to decide what machines to use, tooling and best manufacturing process.” The system allows users to save off best practice, e.g. for machining a cylinder head, or for complex trajectory milling, or profile milling of a bore. This removes the risk of data interpretation, and cuts cost by reducing the time to programme machines. Manufacturing processes can be embedded in the CAD model, and the interface is more user-friendly, with full NC machine simulation and post-processing provided. Dassault Systèmes’ Delmia V6 allows manufacturers to simulate all elements of factory production. Delmia’s Prismatic Machining capability can programme a machine to produce 3D parts requiring advanced 2.5-axis milling, axial and probing operations. Delmia Turning Machining is an extension to programme turning and mill turn machines. Delmia Milling Machining is an extension to Delmia Prismatic Machining to programme milling operations for advanced 3-axis milling, including the ability to switch to five-axis motion, and a lifelike immersive experience to validate the milling programme. V6 offers multi-position machining, worn cutting tool management and simulation, in-process model creation and support for parallel processing computation of tool paths. Siemens PLM Software has introduced industry specific applications in NXCAM version 7.5. This includes a five-axis application to programme multi-bladed rotational components like blisks and impellers. NXCAM can generate NC programmes automatically using NX design model data. “Future versions will be able to read data from other CAD/ CAM models,” says Vynce Paradise, director of product marketing at Siemens PLM. CAM Xpress version 7 is aimed at the CAD independent market and is closely paired with NXCAM, with a full range of CAM functionality including five-axis impeller machining and feature based automation. Although no single size fits all, CAM software providers are moving closer to a vision of automation which is easier to use at all levels of operator ability, offering greater, leaner efficiency in terms of reducing material waste, process time and cost reduction. Cost reduction gains are in terms of unit cost productivity and energy.

Specialfeature Scottish manufacturing

The Falkirk Wheel is a unique rotating boat lift, which carries boats 35 metres vertically from the Union Canal to the Forth and Clyde Canal.

Northern lights of British industry Scotland’s manufacturing base is not dissimilar to the rest of the UK. A few big, well-established industries underpin a band of new, emerging 21st century enterprises, like steel fabrication for renewable energy infrastructure and small scale, high tech companies in areas like life sciences and optoelectronics. Will Stirling finds that Scotland’s traditional industries are modernising to keep pace with demand.

Much

like the whole of the UK, Scotland’s industrial landscape has changed profoundly in the last 50 years. Where Glasgow once produced over half the UK’s entire shipping tonnage, Scotland’s shipyards now focus mainly on defence contracts and refits. Scotch whisky, of course, provides a lucrative injection to national GDP and the recession-busting growth of the single malt whisky industry is well documented. Other food and drink manufacturing also features prominently on Scotland’s list, with foodstuffs like oat-based products, drinks like Barr’s Irn Bru and start-up Brew Dog beer, smoked seafood and a booming global farmed salmon industry, if one counts this as manufacturing and not farming.

The Silicon Glen between Glasgow and Edinburgh at one time produced more PCBs and electronics than Singapore. In the 1990s, production migrated East and now only pockets of high tech manufacturing, albeit successful ones like Polaroid, Kelvinside Electronics and Raytheon, remain. “Electronics companies in Scotland today make high value products, reflecting the wider trend for the future success of manufacturing,” says Dr Lindsay Branston of Scottish Enterprise. Some companies have grown rapidly, such as Burntisland Fabrications, the offshore power generation components fabricator, which trebled turnover to £95m from £30m in two years, and Lab901, which designs and makes automated analysis systems for the life sciences sector, has also done well. The growth of Castle Precision Engineering in Glasgow was halted in 2010 partly by delays to big aerospace sector contracts, but that failed to prevent it from winning The Manufacturer of the Year 2010 award. Many eyes, not least those of First Minister of Scotland Alex Salmond, are trained on the wave and tidal energy sector where the East Coast cluster including Aquamarine Power and Pelamis Wave Power await serious investment to develop large scale, seaborne power generation. Growth prospects for Scottish manufacturing are becoming increasingly dependent on exports as the domestic market slows, according to CBI Scotland’s latest industrial trends survey. New domestic orders in the three months to January fell unexpectedly. However, export orders grew for the fourth consecutive quarter, and are expected to grow again in the next three months and local manufacturers are more optimistic about their export prospects for the coming year than they were at the time of the previous survey. Scotland is a big land area with many isolated towns, making business networking and support both

Many eyes, not least those of First Minister of Scotland Alex Salmond, are trained on the wave and tidal energy sector where the East Coast cluster including Aquamarine Power and Pelamis Wave Power await serious investment to develop large scale, seaborne power generation challenging and very important. Scottish Enterprise provides free business surveys and then programmed support in the form of the Scottish Manufacturing Advisory Service, or SMAS. Over 12 months from 20092010, SMAS contributed £16m to the Scottish Economy and carried out 365 free manufacturing reviews. The Manufacturer spent three days in September visiting some of the companies that SMAS has worked with.

Manufacturing in ScotlandWilliam Grant and Sons

One of the Scots’ best loved manufacturers must surely be William Grant and Sons – distillers of Grant’s, Glenfiddich and The Balvenie whiskies as well as Hendrick’s gin and Sailor Jerry rum. And William Grant’s fame extends well beyond the UK. The company won both the ‘Distiller of the Year’ and ‘International Distiller of the Year’ at the International Wine and Spirit Competition Awards at the Guildhall in London last November. It also won the Trophy prize in the ‘Single Malt Scotch Whisky Over 15 Years Old’ category for its The Balvenie Portwood, 21 Year Old Single Scotch Whisky, and was given 33 distinctions across its spirit portfolio. The awards were the pinnacle of a rip-roaring year for Grant’s. It saw sales of Glenfiddich rise to 950,000 cases, compared to 804,000 the previous year, while also distributing five million cases of flagship brand Grant’s, 200,000 cases of Hendrick’s, and 750,000 cases of Sailor Jerry. The company also showed its ambition in April when it splashed out Eu300m buying Irish cider maker C&C Group’s spirits and liqueur brands, including the 600,000 cases per year Tullamore Dew. It then recouped Eu129m by selling the liqueur brands which didn’t fit within the portfolio. Brian Gray, team leader of Spirit Supply at the Glenfiddich Distillery in Dufftown, Banffshire, says the company’s success can in part be accredited to a strong efficiency drive within the bottling factory. For example, the company embarked on a 5S housekeeping project to bring the bottling halls up to the standard of the rest of the site as a five star visitor venue. Engineers designed and built bespoke shadow boards and storage solutions in order to remove clutter. “This resulted in improved aesthetics, organisation of required parts next to the point of use, and removes the chance for items to be misplaced,” says Mr Gray. The removal of racks now that the boards are in place also gives the operatives more floor space around machines to perform changeovers quicker and they can store cleaning materials on the board too.

Special feature Scottish manufacturing

Business improvement

Replacing racks with shadow boards at the Glenfiddich Distillery has allowed for more floor space and improved access to tools and means changeovers can be performed quicker

Last year, the Dufftown distillery introduced overall equipment effectiveness (OEE) as a performance metric and implemented hourly control monitoring of the performance of the manufacturing lines. The introduction of these techniques helped the company improve efficiency across the three lines by 15%.

William Grant and Sons has wasted no time in 2011 having already set in motion the next step of its growth strategy. The firm is pushing ahead with global launches of its latest brand – Monkey Shoulder – which it says is the world’s first triple malt whiskey.

Babcock, Rosyth Project director for Business Improvement at Babcock Marine & Technology, Alan Milby, beside the BI project board that spans an entire wall. By implementing the Integrated Business Management system (Oliver Wight), a systems architecture to support business processes and improving interdepartment communication, the 10-strong BI team and Rosyth’s 1,400 employees expect to realise build efficiency savings of £36 million.

Babcock has created a Business Improvement Team who are working with SMAS to find big process efficiency savings to building parts of the QE Class aircraft carrier project in Rosyth. Each warship will weigh 65,000 tonnes.

West and East Scotland Tullis Russell Papermakers

Part of the Tullis Russell Group, this 201-year old papermakers, coaters and converters is one of five remaining paper mills left in Scotland. The employeeowned company has made energy and waste reduction its number two business priority, just a fraction behind customer service. Located in scenic Glenrothes, Fife, its 550 employees operate a continuous manufacturing process that produces 150,000 tonnes of paper and board a year, split roughly 50% coated and 50% uncoated. Tullis Russell Papermakers (TRP)’s exports in 2010 were about 60%, and is growing outside Europe – it opened its first sales office and warehouse in China and another sales office in Barcelona in 2010. Its main markets are premium packaging, cover materials, greetings cards and security papers, like cheque book paper. Group turnover to March 2010 was £156m. In 2009, TRP experienced an “extraordinarily rapid and steep rise in energy and raw material costs” set a target to save £3m in 2010/11 from energy and waste reductions and yield increases. “We are not able to pass anywhere near all of this onto our customers so we’ve been working hard to take cost out of our operation,” says Alan Gibson, HR director at TRP. SMAS were engaged in March 2010 and have helped to support some of the savings projects. TRP says it is on target to make the identified savings for 2010/2011. Concurrent with the £3m target savings, the company received planning approval to build a new £200 million biomass plant in partnership with RWE npower Renewables, who took over the site in mid-November.

Construction of the combined heat and power plant, which will provide 40 permanent jobs, has begun and it will provide the mill with electricity and steam, required for paper drying, while reducing the mill’s CO2 emissions by 250,000 tonnes a year. The plan is to link the power plant to the factory and offer it as an education facility for regional schools. “It’s important that we use the biomass plant to introduce school children to manufacturing too,” says marketing services manager Derek Guthrie. Paper pulp, the raw material, comes from sustainably managed forests in Scandinavia. No pulp derives from the UK. “We see that as an advantage, it gives us more buying flexibility,” says Guthrie. “It has allowed us to introduce more recycled pulps into our product portfolio – today about 50% is postconsumer waste pulp.” TRP’s mill is Forest Stewardship Council certified.

Savings are no pulp fiction The plant has implemented a series of green and efficiency measures, some involving SMAS practitioners in areas like lean manufacturing and sales and order planning improvement. Rod Cooke, manufacturing manager, says: “Our operation has two main aspects, manufacturing using paper machines and an off-machine coater, and converting. This takes paper from the main machines and turns it into

rolls or sheets of paper, arranged in bundles or pallets.” Savings are being realised in different areas, but mainly on yield. After losing about 600 tonnes of paper material a year before the new measures, the company wants to reduce this to 250 tonnes. “Using a PVCA format, we’re engaging with operators and create affinity diagrams to map all the possible issues that cause a problem, work through these and apply an 8/80 rule: if we can pass through this solution in eight to 80 hours, we’ll do it. If not, we’ll break it into smaller pieces.” Employee share distribution began in the early 1980s. The structure dovetails well with lean, says Mr Gibson. “Workers are effectively the shareholders. We can take a longer term view than some PLCs, less concerned with profitability and more about sustainability. People become more receptive to change.”

Special feature Scottish manufacturing

The Edrington Group

Being the best selling whisky in Scotland for the last 30 years is no idle boast. The Famous Grouse is one of seven Scotch whisky and rum brands, including The Macallan and Highland Park, distilled and distributed by the Edrington Group, an independent whisky maker established by the Robertson family in the 1850s. The Macallan is the second biggest single malt whisky in the world by value, and Highland Park 18 year old – distilled on Orkney, the most northern distillery in the UK – was voted best spirit in the world by whisky writers in 2010. Edrington has about 8% of the Scotch whisky market and produced 85m bottles in 2009/10. There are five malt distilleries across Scotland and 85% cent of the whisky is blended, while 15% is single malts. The malts are more expensive to make but are more profitable. The Edrington Group has grown a lot in the last 12 years through acquisition and organic growth. In 2008, it acquired 60% of family-owned rum producers Brugal in the Dominican Republic, which more than doubled its size. It took control of three markets, Taiwan, Nordic and Korea, adding another 250 people. Global headcount today is 2,200 people. The popularity of Scotch whisky in emerging markets such as China is well known – in March 2010, a record year, group turnover was up 11.5% to £468.3m, and profits before tax rose 25.1%. Nearly all its UK employees own non-voting ‘B’ shares. In 1966 all blending and bottling operations moved to a 35-acre site on Great Western Road, Glasgow. The company has made a £7.5m investment in a new tank farm, due for completion in May. There are two aims, to increase blending efficiency and use part of the new area for maturation. “This is driven by strong demand for the single malts,” says director of supply chain, David Donaldson. “We invested £20 million in warehousing in Macallan, and now need to do more here.” In the last few years, overall Edrington has seen a steady increase in shipment volume, but growth was

Martin Aerospace

Bernie Phimister joined GT Martin & Sons from MB Aerospace in 2004. In early 2005 he organised an MBO and Martin Aerospace was born. It’s an exemplar of the small, nimble precision engineering business that feeds the supply chains of a handful of big aerospace programmes. Supplying precision components and assemblies, from small threaded parts to more complex machined structures, the company is quite reliant on a small number of big customers such as Rolls-Royce and Pattonair. It uses a range of

Master blender Gordon Motion in the blending warehouse

dented by recession. Single malts have grown rapidly, while Cutty Sark has declined a little. The supply chain department supports four business objectives at Edrington: cost reduction, brand support, operational excellence (covering H&S, safety, environment as well as lean manufacturing) and people development. This extends to the procurement and quality of packaging, and synching with the Single Service Centre. “This juggling helps optimise what we do, and it has improved visibility,” says Mr Donaldson. The pace of change is getting faster, he says, as all the main whisky brands in Scotland have redesigned packaging in the last year or so. “We have worked on value engineering to take the cost out of packaging but we think we’ve hit the bottom of this with some brands. Changing a bottle shape can help boost sales considerably.”

Manufacturing Blended whisky makers have to marry the different whiskies. The £7.5m investment involves transferring this marrying process from wooden casks to stainless steel vats, used by many whisky companies because wood adds nothing to the whisky at this stage. The whisky arrives and is transferred to the bottling vat and is reduced from 62% alcohol content in cask to 46% alcohol in marrying, then down to 40% in bottling. “Each time you add water there’s a danger it can go cloudy from chemical reactions,” says Donaldson. “We marry to allow filtering before it’s bottled at a slightly higher temperature, because cooling whisky can take some flavours out, which we clearly don’t want!”. Says Donaldson

the latest inspection equipment and holds all the main accreditations including Nadcap, AS9100 Rev B, and is about three months away from audit for the SC21 programme, which SMAS encouraged it to join. SMAS has worked on 5S exercises and factory configuration at the Lanark-based company. Mr Phimister says quality and delivery performance standards have always been very high with no margin for error. For example, Rolls-Royce lorries make daily collections and they have a precise 15-30 minute window to make the pick-up – if you’re late, they don’t wait.

While top service is a constant in this industry, Phimister also says events of the last decade have improved supply chain communications. “9/11 was a watershed which caught a lot of people out, orders stopped and no-one knew what would happen,” he says. “Since then, customers like Rolls-Royce make it super clear what they expect and when to have it ready by.” The company has just taken delivery of a new Nomura sliding head autolathe. [Martin Aerospace will feature again in a forthcoming article on the SC21 initiative]

Special feature Scottish manufacturing

Highlands and Islands of Scotland AJ Engineering

Maclean’s Highland Bakery

AJ Engineering in Forres started life in 1999 when managing director Alan James’ previous employer closed. Setting up an independent steel fabrication firm, business grew and he moved to the current site in 2002 and now employs 40 staff in administration, the workshop and site engineers. Nearly all the work is done in the Highlands and Islands for sectors like timber, whisky distilleries and civil engineering. Flexibility is crucial, says Mr James. “My mantra is we can’t specialise in any one thing, we don’t have the consistent level of work.” Contracts in new markets, like building housings for wind turbine electrical substations, are keeping the company busy. Turnover in 2009/10 was £4.5m. It recently finished building a second factory to accommodate a tenant, CNC machining firm and subsea specialists Firscot, which will create a good foil for AJ Engineering on multi-discipline engineering projects. High Murray and SMAS made the match and encouraged Firscot to relocate from Newton More, fairly isolated on the A9 road. “We had the land and put some money into the company, Firscot had no space but a good contact list which they were not able to fully develop,” says James. AJ Engineering has worked with the big distilleries, and has just signed a deal for the last remedial steel work in this sector with Balvenie in Dufftown. In the last two bad winters many commercial buildings in the North collapsed under the weight of snow. Hundreds of barrels need to be removed, making it an expensive logistical job, further complicated in that these are bonded warehouses that have restricted access. AJ Engineering has about four trainees, who are first, second and third year apprentices, “sadly benefiting from others misfortune,” says James. The trick is avoiding losing them to Aberdeen’s bornagain oil industry. “The demand for good skilled labour in that sector now is frightening,” says MAS regional lead practitioner, Barry Mole.

The Maclean family came to Moray in 1938 from the Isle of Lewis and has been baking for four generations. The company moved to larger premises six years ago, a decision partly driven by Tesco. The old site, a shop with a flat above and bakery at the back, couldn’t satisfy Tesco’s needs for artisan bread and baguettes. But owner/MD Lewis persuaded the retailer to buy bread rolls, and losing one account for bread led to supplying rolls to six separate Tesco stores, worth about £500,000 a year. SMAS, supervised by Highlands lead practioner Barry Mole has helped Maclean’s achieve British Retail Consortium (BRC) food safety accreditation and has also helped to reconfigure the factory layout for more efficient production. Benefits have included better health and safety procedures, higher profits and better staff morale. As with neighbours AJ Engineering, Maclean’s has to be a jack of all trades. Freshness dictates the business, Lewis says, and top-loading with fresh bread reduces the firm’s options. “We’ve gone about as far as we can with ‘morning goods’. The main target now is biscuits including shortbread and oatcakes,” says Lewis. “These have a longer shelf life and are easier to schedule. We want a more predictable flow of orders.” The business has 130 staff including its retail shop, a high headcount compared to turnover of £2.5-£3m in 2009/2010. Labour at Maclean’s is very flexible. Some jobs are not high skilled, margins tend to be low and escalating wheat prices dictate tight wages. Food production in Scotland is heavily geared to temporary staff – about one third at Maclean’s are transient. “Staff are potentially your biggest asset but simultaneously your biggest liability,” Lewis says. Business is in good health and exports are up following some successful marketing at European food exhibitions where sporting the kilt, sporran and bagpipes has paid off well for Mr Maclean.

Industry in the north of Scotland faces several challenges. Workflow is irregular, and skilled workers are often seduced by the bright lights and fat pay cheques of Aberdeen’s oil industry.

Lewis Maclean starts work at 5.00 am but spends less of his time in the bakery now. SMAS advised that he was more useful actually managing the business, despite the strong urge for hands-on.

SMAS has worked with many other Scottish manufacturing companies to improve business performance.

For enquiries about SMAS, contact the team on 0845 607 8787 or email scottishmas@scotent.co.uk

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After 40 years of back and forth, 2011 could finally be the year when a single patent law covering a multitude of European countries is introduced. But we’re talking about Europe, after all, and not everyone’s playing ball. Mark Young reports.

applying to the European Patent Office (EPO), companies and individuals get can get patents registered in up to 40 countries with one application. Yet the process remains highly convoluted and costly. “There’s an awful lot of bureaucracy involved,” surmises Paul Foot, a chartered and european patent attorney and partner at UK law firm Withers and Rogers. “You’ve got this European patent which goes through the EPO as one but you end up with a bundle of individual national patents. There are then discrepancies over how these are regarded and what constitutes a violation. Each has to be renewed each year which cots money and each is subject to its own national court. Although it’s all supposed to be harmonised, different courts can come to different decisions so where a patent is recognised in one country it might not be in another. Given that we’ve had the EU for 40 odd years, the fact that we don’t have a real European joined up patent is a bit of a drag.” There’s also the cost and time of getting patents translated into the specific language for each country it is being sought in. What’s more, patent attorneys like Foot are an obligatory constituent of the process for any company or individual from an EU member state and have to liaise with counterparts in each country to bring the patent into force. All things considered, the cost

of getting a patent in all 27 EU member states is somewhere in the region of €80,000 and EU companies collectively spend an estimated £1bn per year on translation services – something branded “ridiculous” by Dr. David Hill, chief executive of the World Innovation Foundation Charity, since the majority of business is conducted in English anyway. “As soon as we accept English as the official business language of Europe, the quicker everyone, everywhere, starts to save money,” he says.

Breakthrough But now 12 EU member states (Denmark, Estonia, Finland, France, Germany, Lithuania, Luxembourg, the Netherlands, Poland, Slovenia and Sweden and the UK) are claiming a breakthrough after 40 years of fruitless discussions and say a single patent covering all 12, which will be presided over by a single authority, could be in place by the end of the year. The move has been made possible because the notion of “enhanced co-operation” – introduced in the 2009 Lisbon Treaty – stipulates that a group of as a little as nine EU member states can make an agreement between them. The European Commission has put forward the plan on behalf of the group and a detailed plan will now be drawn up. Yet all is not plain sailing. Spain and Italy, as major European economies, are conspicuous by their absence from this list. Language remains the sticking point. They reason that their mother tongues should be automatically covered by any extended patent. The other countries see the extra languages as superfluous, though. English, French and German vernacular – as the three languages ordained long ago as those which Europe can get by on in such affairs – are considered sufficient, especially since streamlining the process and costs remains the driver for the move. If the latest round of talks does come to fruition, the cost of getting a patent in all 12 countries would

Finance

Insurance and Professional Services

be reduced at least 10 fold, according to Michel Barnier, EU internal market commissioner, who is heavily involved in attempts at pushing through the development. “European inventors can afford no further delay,” he says. Patents don’t have to be obtained in every country, of course. Explains Foot: “If you are a car company you’re not going to make a different component for the models you sell in places like Romania or the Netherlands than the ones that go to bigger markets like Germany or France. So just obtaining the patent for the bigger places where something could conceivably be copied will suffice.” Spain and Italy, though, are less clear cut when making that analysis. It is hoped that those countries will see that the benefits are too large to ignore when the scheme is up and running and join later. The development of a multi-national patent coalition certainly finds favour among manufacturers. “As an engineering company that develops cutting edge technologies for industries such as defence and automotive any change that reduces both the complexity and cost of the IP application process is good news for both us and our clients,” says Chris Reeves, business development manager for collaborative projects at MIRA. “MIRA is a global business so reducing the need to replicate IP applications in individual countries is definitely something we would welcome.” Paul Titley, managing director of R5 – the formulation development business of fast growing Tyneside company Aesica Pharmaceuticals – adds:

“Easier access to a pan-European application can only be a good thing. Making it easier will also make it more attractive.” But he warned: “Simplifying the bureaucracy of applications going in must be matched by the capability to handle information and decisions coming out.”

You’ve got this European patent which goes through the EPO as one but you end up with a bundle of individual national patents. There are then discrepancies over how these are regarded and what constitutes a violation Paul Foot, chartered and european patent attorney and partner, Withers and Rogers

Barnier says the parties involved are hopeful that the single patent will come into force by the end of this year but there are still issues that need to be ironed out, such as whether there would be any overlap between the new system and the existing EPO one, and which authority would take precedence in administration. Remember, this is Europe, and riddled as its legislature is with confusions dating 40 years and counting; a little more patience may be required before the patent problem is solved.

What you lose on swings… Government bodies are not always lauded for their efficiency in the UK and rarely are they accredited with cutting red tape. However, the UK Intellectual Property Office is given a good press in most quarters and there are instances where it bears the brunt of some of the bureaucracy from Europe. Paul Foot describes it as “quick and user friendly”, compared with other countries’ state patent offices. In Brazil, for instance, he filed a patent a decade ago and suspects it probably hasn’t even been looked at yet. From the start of this year, the EPO is stipulating that applicants must submit the results of searches by national patent offices to ensure that the development is not already registered. The IPO has decided to file the information directly, rather than individual or company having to pay a Patent Attorney to retrieve and send the information on to the EPO themselves. This means businesses will save money on the fees and the process should become quicker. So long as a patent has been filed in the UK – as it will have been in an estimate 5,000 cases of European applications that originate here – businesses won’t notice any discernible change in the process. But the situation won’t have got any worse. The EPO isn’t quite so helpful, it appears. Foot says the decision to put the onus for supplying the results of previous searches onto the individual or company rather than carrying out the work themselves is consistent with its usual habits. “The EPO has been faced with backlogs in the past,” he says, “and the way that they have tried to deal with that is to push more of the work away from themselves onto applicants. They structure their fees to force us down certain avenues which don’t benefit applicants. Although our trade bodies lobby from time to time for changes and to minimise the negative impact, the EPO isn’t really answerable to anybody so we just have to put up with it.”

Outlook for currencies in 2011 Charles Purdy Director, Smart Currency Exchange

of the same is my initial thought for 2011 but without the transport problems. Ash clouds and snow seemed to turn the UK into an airplane free zone at times. In 2010 we also saw the emergence of the new coalition government led by the Conservatives and supported by the Liberal Democrats. You never know with politicians if the rhetoric will match the reality but at the very least they recognised that there was a very sizeable problem as the UK government was living beyond its means and there was a need to make drastic cuts in expenditure. Initial market reaction was positive as the market appreciated the sense of realism. But sterling was undermined when the Bank of England considered another round of quantitative easing in autumn.

EUR/GBP

Sterling’s movement against other currencies continued to be volatile with movements often significant, multi directional and at times quick to take effect. But compared to 2008 and 2009 last year was a period of calm for sterling, given the absence of any cataclysmic events, such as the rescue of Northern Rock or Royal Bank of Scotland. The same cannot be said for the euro zone where the debate at the end of the year seemed to be centred on it’s very survival. Greece was the first to be forced to ask for aid and the resulting enforced austerity cuts led to widespread civil unrest. Ireland received its rescue package in late 2010 with similar obligations. Other euro zone countries, such as Portugal and Spain, are still in the firing line and could be “forced” to do the same. In the US we have seen a slow and jobless recovery which has led to a further bout of quantitative easing and a continuation of the tax breaks originally introduced by President Bush. The quantum

of funds that have been pumped into the US economy are truly extraordinary and the aim of this latest bout of “printing money” is to boost the economic recovery and reduce the unemployment level from the 10 million level.

So why do I see it as a more of the same in 2011? My starting assumptions are that the slow recovery in the western world will continue in 2011 and there will be no major event that results in significant economic fallout. I am also assuming that interest rates in the UK, the US and the Euro zone will be kept on hold throughout 2011 given the still tentative recovery overall. Here in the UK this seems sensible. The Government is very clear on the problems and has a clear plan of action. Most people understand the depth of the problem and accept that tough measures are inevitable. And what is good to see is a resurgence in exports, due in part to sterling’s loss of value and due in part to a

Smart Currency Exchange

USD/GBP

realisation that a country cannot survive on financial alchemy alone. Recent UK economic data has been mixed with inflation above target which puts the possibility of further quantitative easing on the back burner. The normal way to control inflation is to raise interest rates. The effect of this could be positive for sterling as interest rate differentials between currencies are important or it could be negative as it stalls the economic recovery. The joys of trying to predict exchange rate movements! In the US we wait to see if the US recovery starts to increase employment given the extent of the stimulus being applied. Recent economic data is better than expected but still falling short when compared to what is required. Reducing employment will be key. Now to the Euro zone. Will there be enough political will power to keep it all together as one trading unit? The political rhetoric says yes but who will fund it? That is where the squabbling starts. The German economy continues to power ahead. The main problem seems to be is how do you get the many disparate economies found in the Euro zone to march to the same beat? In many ways the three currencies; sterling, the US$ and the euro are as bad as each other.

The western world has gone through a major trauma and the recovery process is slow.

So what about actual predictions? Market sentiment, as in previous years, seems to suggest that sterling will appreciate against the euro and push toward €1.25/£1 plus. I am probably a bit more circumspect and would suggest that until proved otherwise then the range we have seen in 2010; €1.12 - €1.23/£1, is what I would expect in 2011 for the €/£ exchange rate. With regard to sterling’s movement against the US$ there are two extremes; sterling weakening to US$1.40/£1 or strengthening to US$1.80/£1. In truth I find it much more difficult to get any clear feeling for what 2011 holds for the US$/£ exchange rate. At the time of writing the exchange rate has hovered between US$1.53 – US$1.60/£1

for quite a few months. So until some clear reason or catalyst arises that will cause the exchange rate to move one way or the other then I think it is a case of keeping your options open. The Far East is where the real economic growth is happening and is certainly a key reason behind the strength of the commodity based currencies. Although the first part of 2011 has seen sterling strengthen it is difficult to see this as a long term reversal. In fact it may well be a long time buying opportunity.

Smart Currency Exchange produces on a monthly basis an update and market forecasts on exchange rates. Please contact Smart on the details below to get their detailed report for February 2011.

Visit website: www.SmartCurrencyBusiness.com Or call: 0207 898 0500

For more information please visit: www.smartcurrencybusiness.com

17TH FEBRUARY The Belfry, West Midlands, 09:00 to 17:00 Are you considering Product Lifecycle Management (PLM) for your company? Have you heard about PLM but don’t know whether it is right for you? Do you want to know how PLM can alter the way your organisation competes and innovates? If the answer is yes to any of the above, then attending this one day event will provide you with essential knowledge and insights you need. You will discover why manufacturers of all sizes and in all sectors are embracing PLM, making it the fastest growing market for enterprise software. PLM Connect is a fantastic, FREE* one day event for end users in the manufacturing industry. The event will bring manufacturing professionals together to further knowledge about the benefits and potential of a mature approach to PLM.

Who should attend PLM Connect? • Engineering • New Product Development • Operations and manufacturing • Supply Chain • Design & Innovation • Project management • Marketing and brand leaders • IT and systems professionals • Business leaders and owner managers

Key Event Benefits::

Key Event Features: Programme specially created for manufacturers who have yet to use PLM software but want to know more

• Discovering how to improve product development processes across all value chains

Access to high quality conference content including the latest insights from technologists, academic research and industry

• Solving key business problems through a better understanding of PLM and the software capabilities

Practical, informative and relevant case studies delivered by professionals in NPD, design, engineering, manufacturing, supply chain, IT and marketing

• Developing your innovation capacity and exploiting opportunities for innovation in both products and processes

One-to-one meetings between delegates and PLM professionals to uncover the potential it can have in your business FREE to attend, including free parking, lunch and conference pack*

CONNECT FORMULA One to One focused meetings

The connect element enables each attending company to meet vendors across the spectrum in short one to one meetings. Delegates from companies participating in the one to one meetings receive free entry to the PLM Connect conference programme, free parking, lunch and delegate pack.

• Unlock the potential and value within your product development , getting your products to market quicker than the competition

ho nd s w ngs te ate eti at eleg me to d ne * ring -to-o EEfactu one FRanu r for m e r st fo egi r

PLM CONNECT PROGRAMME – 17TH FEBRUARY 2011

PLM Connect is an ideal first step for any manufacturing company who has yet to use PLM software but want to know more about the tangible and measurable benefits achieved through its application. Danny McKendry

Type 26 Combat Ship Information Management and Technology Manager, BAE SYSTEMS Surface Ships Limited.

From Product Lifecycle Management Vision To Implementation – how PLM can make a difference BAE Systems Surface Ships adopted their Product Lifecycle Management strategy early in 2000. The business has witnessed continuing evolution of PLM and the presentation will highlight improvements in the design, build and through-life support of our products by using PLM. This presentation will outline why the company embarked on this PLM journey in the first place and will give examples as to how projects and processes are effectively managed on a day to day basis, as well as the vision of how PLM will support the Surface Ships programmes of the future. The impact on the business of technological and cultural change will also be discussed including how those involved in PLM have changed their perceptions over the years. Additionally, you will hear how important it is for the success of any company to have the utmost control over the elements in their development process and its lifecycle.

SPEAKERS ALSO INCLUDE: James Harris 1

Head of New Product Development, PZ Cussons (UK) Ltd

Steve Nevey

Business Development Manager, Red Bull Racing 4

Nina Dar

Managing Director, Cheeky Monkey Business Solutions

John Stark

What is Product Lifecycle Management? Product Lifecycle Management (PLM) is the process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal. PLM integrates people, data, processes and business systems and provides a product information backbone for companies and their extended enterprise A major part of PLM is the co-ordination of and management of product definition data. This includes managing engineering changes and release status of components; configuration product variations; document management; planning project resources and timescale and risk assessment. Today, manufacturing companies must address a variety of complex challenges: frequent design changes, disparate systems with incompatible data, regulatory compliance, and more. At the same time, globalization and changing workforce demographics are driving new demands for optimized product development processes, more effective collaboration, and distributed data management. PLM is increasingly helping manufacturers to solve these problems, saving money, time, resources and materials, while making better products, quicker.

President, John Stark Associates (JSA)

To view all the speakers and case study presentations visit www.themanufacturer.com/plmconnect

FREE* to attend for UK manufacturers *Delegate fees are £295+VAT per person, manufacturing delegates who register for one-to-one meetings can attend for free.

THREE WAYS TO REGISTER: 1: Book online by visiting: www.themanufacturer.com/plmconnect 2: Telephone Ben Walsh on: 0207 401 6033 3: Email: j.tudor@sayonemedia.com PLATINUM SPONSORS

Formula for success Choosing an ERP system can be complex and risky. Here’s how to avoid some of the pitfalls.

hen Brierley Hill, West Midlandsbased manufacturer Brandenburg UK recognised the need for a new ERP system, IT manager Marcin Szczepanik made what was to be a fateful decision. Selecting the wrong ERP system, he recognised, could be a very expensive mistake. But selecting the right ERP system was not necessarily a simple matter. Quite simply, today’s ERP landscape—while rich in choice—is also littered with bear traps and pitfalls. According to recent research carried out by IDC Manufacturing Insights in conjunction with ERP vendor Infor, for instance, a third

Simon Charlton

Sales Director, Columbus IT

Management information limited to a stack of reports generated when the clock is stopped —such as at month end — isn’t true management information

of manufacturers in Western Europe see no measurable benefit from their ERP system— hardly an encouraging omen for what would inevitably be a complex and resource-consuming selection and implementation process. And quite apart from avoiding joining the ranks of those businesses whose ERP implementations had turned out to be out-and-out disasters— think Nike, Hewlett-Packard and America’s

Hershey Foods, for example—Szczepanik knew that a successful ERP implementation must provide users with meaningful information. Yet according to a recent survey of 700 manufacturers by analyst firm IDC, a common regret among buyers of ERP systems is not spending enough time investigating the reports and screens that a system provides by way of management information. “The ability to get data out of a system is absolutely critical,” stresses Andrew Kinder, director of solutions marketing at ERP vendor Infor. “Does it provide, at a user level, the information that people actually need in order to do their job?” What’s more, that information had to be timely—and not out of date and obsolete at the point of reading. “Management information limited to a stack of reports generated when the clock is stopped— such as at month end—isn’t true management information,” warns Simon Charlton, sales director at global IT consultants Columbus IT. “Newer systems turn that approach on its head, notifying exceptions via ‘alerts’—it’s a totally different paradigm.” In short, selecting an ERP system today is a much tougher proposition than it used to be— and even as recently as five years ago. “The scope of today’s solutions are much wider, with capabilities such as Customer Relationship Management, Product Lifecycle Management and Supplier Relationship Management now bundled in as standard,” notes Steve Tattum, ERP product manager at ERP vendor Sage. “The solution is more rewarding—but selecting it is a tougher process.” Hence, in Szczepanik’s eyes, the attraction of a free event, located nearby in Coventry, that aimed

to help manufacturers cut through the confusion and risks associated with selecting an ERP system.

Fact-filled day Organised by The Manufacturer, and sponsored by a panel of leading ERP providers, system integrators and implementation consultants, ERP Connect brings together—at a single venue on a single day—a wealth of advice and experience. By taking a day out of their agendas and spending it at ERP Connect, manufacturers can listen to success stories and implementation advice from fellow manufacturers, engage in exploratory one-to-one discussions with ERP providers and system integrators, and keep up to date with technology and other developments through briefings from academics and other experts. And all, of course, free. Take the most recent ERP Connect event, held in Manchester in October 2010. An opening keynote address from IT authority and analyst Dr Simon Moores set the scene. A huge transformation in technology, he noted, was being matched only by an equal transformation in the way that this technology was being consumed and leveraged. The moral? While standing still wasn’t an option, developments such as cloud computing and Software as a Service lowered the technology barrier faced by businesses, making it easier to compete with the giants of industry. And speaking of those giants, the keynote address that followed came from Jeff McGowan, a sourcing manager at Johnson & Johnson, who described how ERP could be leveraged to identify and eliminate complexity—and in the process, enhance competitive advantage. After which, the event split into twin ‘work streams’, with delegates free to mix and match between the events on offer in each track. Before lunch, for example, delegates could choose between a session on technology roadmaps from Dominic Oughton, of the Institute for Manufacturing at Cambridge University, or a discussion of the role and benefits of cloud computing, from Steven Hargreaves of ERP vendor Solarsoft. Another choice: an implementation case study at electronic whiteboard manufacturer Promethean, versus a similar case study at electronics manufacturer Hansatech, delivered by the firm’s managing director, Paul Gill. Lunch was followed by a chance to have one-to-one meetings with vendors and

implementation experts, followed by further presentations. More one-to-one meetings followed afternoon coffee, with a closing keynote from Microsoft’s Matt Eckersall, head of manufacturing for Microsoft Dynamics AX, looking at the vendor’s operations roadmap for the future.

Return on investment All in all, a day packed with actionable information and insights, together with a chance to network and interact with peers drawn from right across manufacturing industry—as well as meet and talk with ERP vendors and implementation consultants.

Steve Tattum

ERP Product Manager, Sage

The scope of today’s solutions are much wider. The solution is more rewarding—but selecting it is a tougher process And all, of course, free of charge, with the only investment being the time taken to attend. So was it worthwhile? “Absolutely,” says Brandenburg’s Szczepanik. At the point that he attended ERP Connect, he explains, the company had decided on an initial list of likely vendors, topped by Microsoft and SAP. But attendance provided an opportunity to talk to all the vendors in the frame, and to decide there and then which were worth pursuing. “They were all there, and it made sense to talk to them, and to find out abut their solutions,” he says. And the judgement made on the day, he adds, turned out to be the right call. SAP’s Business One is being implemented right now, and is scheduled to go live in June. For Brandenburg, in short, attendance at ERP Connect served to connect the business with every ERP vendor they wished to investigate— painlessly, and in the course of a single day, bracketed by insightful presentations. So could it connect your business to a future ERP system? If you’re in the market for such a system, or are likely to be in the near future, why not go along and find out?

Not fit for purpose A survey of British manufacturers highlights worrying shortcomings in critical aspects of sales and marketing. But it doesn’t have to be that way, says Malcolm Wheatley

Britain’s manufacturers struggle to recover from the worst recession in 60 years, many of them show disturbing deficiencies in how they interact with their customers. That’s the worrying conclusion to emerge from a survey undertaken by The Manufacturer in conjunction with Customer Relationship Management (CRM) specialists ConsultCRM. The bottom line? Customer-specific data that is stored and maintained in a bewildering variety of systems — ranging from spreadsheets to homebrew databases — is acting as a brake on sales and marketing functions. And as a result, they are operating inefficiently: multiple-rekeying of data is common, senior management time is wasted, and customer issues aren’t being adequately addressed. What’s more, the lack of CRM systems is holding businesses back from proactively marketing themselves to both existing customers and new prospects. We see more manufacturers harnessing the automation facilities in CRM. A simple example is driving more after-sales revenue through automated email prompts when equipment needs servicing or renewing. Most companies fail on this as they are relying on inadequate manual systems.

Poor performance In four out of ten manufacturers, for instance — 43%, to be precise — survey respondents considered that inefficiencies in their marketing, sales or customer service functions impaired their business’s effectiveness. Almost two thirds of respondents — 64% — reckoned that senior management within their businesses needed to spend more than a minimal amount of time collating sales forecast information. Worse, almost one in five businesses — 18% — spent what was described as a ‘considerable’ amount of time on the activity. Likewise, over half of the respondents — 52% — admitted that their companies spent an unacceptable amount of time and effort duplicating data entry, when updating customer records and processing sales/quotes/orders. Just 48% were able to say that the time taken on this was ‘minimal’. In one in ten companies — 10% — the time spent was declared to be ‘a considerable amount’.

How much time is spent collating sales forecast information each week/month by senior management?

Almost two-thirds of respondents — 64% — reckoned that senior management within their businesses needed to spend more than a minimal amount of time collating sales forecast information. Worse still, in almost one in five businesses - 18% - of senior management needed to spend what was described as a ‘considerable’ amount of time on the activity. Similarly, in only a third of companies — 32% — was the sales team able to spend only a minimal amount of time maintaining the pipeline. In two thirds of companies, the amount was either ‘fair’ or ‘considerable’. And in fully 15% of companies — one in seven — the amount was considerable. And finally, in just 15% of companies were customer issues and complaints tracked inside a CRM system. Almost one in five companies — 20% — did so through multiple databases. Over half of respondents — 51% — used Excel spreadsheets or in house developed systems, a proportion of

Survey Consult CRM

which can be assumed to be largely or partly manual in nature. By far the largest proportion of respondents — 59% — used quality control or returns systems. But while admittedly a significant step forward from spreadsheets and manual systems, quality and returns systems aren’t appropriate in all instances: not every customer issue is related to product quality, for instance, or involves a physical return.

Opportunity ahead So what might explain this state of affairs? One clue comes from the fact that just 16% of respondents stored their customer data in a CRM system. Disturbingly, 25% stored their customer data in either Excel spreadsheets or multiple databases, with a further 18% using in house developed systems. And of the 41% of respondents who replied ‘other’, one third of these said that they actually stored their customer data in a combination of Excel spreadsheets, multiple databases, and in house developed systems — massive duplication, in other words. “We see a lot of silos of customer information: these findings are worryingly typical,” says Karl How much time and effort is spent duplicating data entry when updating customer records and processing sales/quotes/orders etc?

FREE Microsoft Seminar – CRM for Manufacturers Wednesday 16th March 2011, 10am at the National Motorcycle Museum, Birmingham To register go to:

www.consultcrm.co.uk Newman, managing director of ConsultCRM. “The result is that each function has its own view of the customer — yet no function has a single, holistic view of the customer.” CRM changes that paradigm — and forcefully so, he adds: “Think of CRM as a customer portal, where every piece of customer-specific data comes together in one place, offering a single view of the customer.” Efficiency is an obvious win. 70% of survey respondents with a CRM system, for instance, reported spending only a minimal amount of time of data entry when processing orders and quotes. Similarly, 70% of survey respondents with a CRM system were able to report that inefficiencies in their marketing, sales or customer service functions were not impacting their business’s effectiveness. But the real gains lie elsewhere, suggests Newman. “The relationship with the customer is transformed,” he enthuses. “You’re able to serve customers better — but also offer them products and services that they haven’t bought, but which they might need.” “Marketing through e-mails, letters or targeted phone calls is enhanced by an ability to automatically tailor the offering to individual customer profiles, which is something that marketing departments have found tricky in the past. But with CRM, it’s straightforward.”

Education

Likewise, over half the respondents answering the question — 52% — admitted to spending an unacceptable amount of time and effort duplicating data entry, when updating customer records and processing sales/quotes/ orders. Just 48% were able to say that the time taken on this was ‘minimal’. In one in ten companies — 10% — the time spent was declared to be ‘a considerable amount’.

That said, CRM is still relatively new, notes Newman. Around for just over a decade, it’s yet to become mainstream, especially with small to midsize manufacturers. But a growing number of ERP systems — including Microsoft Dynamics AX — now offer sophisticated CRM capabilities, and offer them fully integrated with every other relevant aspect of an ERP suite — sales administration, finance, logistics and quality, for example. “We tend to spend a lot of time educating manufacturers as to what exactly CRM is, and how it can help them,” he sums up. “When they find out, it’s often quite a revelation.” And a free Microsoft seminar — CRM for Manufacturers — aims to continue that education process. It’s being held on March 16th 2011 at the National Motorcycle Museum in Birmingham.

www.consultcrm.co.uk

Have your say at www.themanufacturer.com

For smaller manufacturers, the best ERP solution combines flexibility and affordability.

Prior

to a management buyout in 2009, Poole-based electronics manufacturer Hansatech had invested heavily in a large ERP system from a wellknown ERP vendor. But it was a system with which the business felt increasingly uncomfortable, explains Hansatech’s IT manager Steve Ching. “The business was growing, and we were looking to recruit more employees, but we felt that our choice of system was impeding our progress, not enhancing it,” he notes. And it wasn’t difficult to see why. “As a business, we need to change how we do things extremely quickly, in order to both win new business, and keep existing customers happy,” Ching points out. “And we don’t want to pay a software company to make those changes: we want to be able to do it in-house, as and when we need to do it. With our previous system, we were always talking to the software company about the specification of the changes that we needed—and by the time that they were complete, it was often too late.” It’s a common complaint. Scratch a typical smallto-medium-sized manufacturing company, and you’ll often find dissatisfaction with the ERP system that the business is running. The reasons, though, are many and varied— and sometime surprising. For although smaller businesses can in theory make just as good a use of ERP systems as can their larger brethren, in practice it’s not quite that easy. Business processes aren’t as defined or formalised, for one thing. Smaller businesses, too,

typically don’t want—or need—the breadth of functionality offered by a full ERP system. In both cases, manufacturers lumbered with such a system are liable to be complaining about ‘bloat’, unnecessary administrative burdens, and too much complexity—especially when it comes to training new employees in how to use the systems. Workflow, too, can be a problem. With much flatter organisation structures, one person in a smaller company can sometimes be responsible for roles carried out by several people in a

We don’t want to pay a software company to make changes: we want to be able to do it in-house, as and when we need to do it Steve Ching, IT Manager, Hansatech larger business—giving rise to complaints about employees needing to access multiple screens and modules in order to carry out seemingly simple tasks. And finance is a factor, as well. To put it bluntly, ERP systems aren’t cheap, with the major vendors liable to charge an eye-watering several thousand pounds per user—or ‘seat’—in the jargon. Indeed, look closely at those companies cited by the software industry as leading the charge towards more flexibly-funded solutions such as cloud computing and Software as a Service, and

IT in

manufacturing

you’ll often find that they are smaller manufacturers, cutting loose from what they complain of as the high costs of mainstream solutions.

Going for gold So what does a good ERP system for a smaller business look like? What financing and deployment options are available? And which providers offer these systems? The big picture isn’t difficult to discern. “Large companies often have very fixed requirements,”

The typical small manufacturer doesn’t have a big IT department, or a big IT budget. They need ERP systems that work out of the box, and which are flexible and configurable Matt Muldoon, Vice-President for Product Marketing, Epicor

notes Jonathan Orme, sales operations manager at Exel Computer Systems. “The requirements of small companies are much more fluid—so they need their systems to be able to change and adapt as they grow.” And much more than is the case with larger companies, he believes, it’s important for smaller manufacturers to have ERP systems that they can configure and customise themselves. Nor is it simply a question of simply a question of ‘tweaked’ data entry and reporting screens. The very nature of a smaller manufacturer’s business model can change quite radically over the likely lifetime of an ERP system—especially when, as now, the wider economy is under pressure. “Whereas a manufacturer may have formerly received several large orders each month, they might now receive orders on a weekly basis, as customers order small quantities more frequently,” says Craig Such, head of the manufacturing division at ERP vendor Access Supply Chain. “And as well as order quantity, the order type may change dramatically, too, as companies diversify and offer bespoke products to meet customer demand.” And smaller manufacturers also typically have much lower levels of IT resource—both in terms of IT skills and staff, as well as the

financial resources to fund what might be a significant expenditure. “The typical small manufacturer doesn’t have a big IT department, or a big IT budget,” stresses Matt Muldoon, vice-president for product marketing at Epicor. “They need ERP systems that are actually aimed at the mid-market, with bundled best practices that work out of the box, and which are flexible and configurable.”

Affordable solutions After something of a slow start, software giants SAP and Microsoft have both made the running in providing those systems, with each of them offering not just one but three distinct offerings aimed at the smaller manufacturer. Microsoft, for instance, bought specialist midmarket ERP company Great Plains Software in 2000, and followed up by acquiring Navision in 2002—with Navision bringing with it the Navision ERP product as well as Axapta ERP, acquired in a merger with former rival Damgaard. Today, the three systems have been extensively developed and respectively renamed Microsoft Dynamics GP, NAV and AX. SAP, too, has three offerings. SAP Business One is aimed at the very smallest companies— typically those with 10-50 employees. SAP Business ByDesign, in contrast, aims at meeting the needs of somewhat larger businesses, typically with 50-500 employees. Finally, SAP Business All-in-One aims to meet the needs of the very largest businesses: very much medium-sized, rather than small, and generally employing over 500 employees. Nor have ERP vendors—big or small—been left on their own to make all the running. The first computer system that most small businesses start with is a basic accounting system, offering invoicing and accounting essentials. Not surprisingly,

It’s about giving people choice in terms of affordability: the trend at the lower end of the market is definitely towards hosted software and a monthly subscription Stuart Anderson, Sales and Marketing Director, Pegasus

then, vendors of such systems have spotted the opportunity to tap into customers’ brand loyalty. Swansea-based Gower Chemicals, for instance, has recently moved to accounting software vendor Pegasus Software’s Opera 3 ERP system, having previously relied on the same vendor for accounting and finance functionality.

The world’s leading Microsoft Dynamics ERP provider for Manufacturers “Columbus IT is the leading Dynamics reseller in manufacturing with strong expertise in both process and discrete manufacturing.” Thomas Parbst Worldwide Industry Principal for Manufacturing Microsoft Dynamics

“The level of work that we do now is in the order of three times more product going through the factory, which has been absorbed by a similar number of people.”

www.columbusit.co.uk 0800 0433 054

IT in manufacturing

“We’re getting accounting out of it—but also quick and efficient control of the business,” says finance director Ian Butcher. What’s more, he adds, its flexibility has helped the company to win new business, making it easier to offer bespoke mixtures of chemicals, together with their associated labelling. The ability to output to Microsoft’s Excel spreadsheet, too, is popular with Pegasus customers. At Gower, for instance, different cost centre managers wanted subtly different versions of the same report. “A standard report wouldn’t do,” says finance director Butcher. “Pegasus made it easy.” And by adding limited-but-adequate functionality to an accounting system, significant cost savings are possible, reckons Mark Ramsay, managing director of Infoplex, an independent developer of add-ons for TASBooks, a leading accounting package. “Smaller businesses are more sensitive to software prices than larger companies,” he says. “For those sorts of businesses, spending £5,000 for a system instead of £30,000 represents a significant price difference. It might not deliver a fully-featured ERP system, but the savings are big enough to make it an attractive option nonetheless.” And cost savings, of course, are also obtainable through alternative means of software deployment: cloud computing, Software as a Service, software rental and so on.

Whereas a manufacturer may have formerly received several large orders each month, they might now receive orders on a weekly basis, as customers order small quantities more frequently Craig Such, Head of Manufacturing, Access Supply Chain “It’s about giving people choice in terms of affordability—in other words rental and Software as a Service as well as traditional ‘on premise’ solutions,” says Stuart Anderson, Pegasus’ sales and marketing director. “The trend at the lower end

of the market is definitely towards hosted software and a monthly subscription.” And not just for cost reasons. “Often, the attraction is easier budgeting,” says Roland van Breukelen, SAP’s UK business development manager for Business ByDesign, itself an Internethosted on-demand cloud computing offering. “What people want are predictable costs, so that they can forecast their outgoings as the business grows, without worrying about sever farms, backup centres and other costs. Offer them predictable costs, and it becomes attractive— because they can get the SAP brand, at an affordable cost.”

What people want are predictable costs, so that they can forecast their outgoings as the business grows, without worrying about sever farms, backup centres and other costs. Offer them predictable costs, and it becomes attractive Roland van Breukelen, Business Development Manager, SAP

Quick results So back at electronics manufacturer Hansatech, how did such requirements play out? In the end, reveals IT manager Steve Ching, it was the need for configuration flexibility that provided the impetus for the business to make the decision to abandon its existing ERP system and go in search of something more suited to its needs. That said, he adds, the realisation quickly dawned that a suitable replacement would need to tick more than just one box. Flexibility, ease of use, the ability to support agile manufacturing processes, rapid implementation and a low cost of acquisition and ownership—these were all important objectives, he explains. And the eventual choice of system—selected from a shortlist of four—was Epicor 9 from ERP vendor Epicor. And once selected, the new system was up and running in only four weeks—an exceptionally short timeframe, ensuring minimal disruption to manufacturing. “We were really surprised at how well employees made the move,” he says. “Because Epicor’s user interface is very intuitive, we didn’t have to arrange for as much training as we thought. We knew what we wanted, we knew the costs of running an ERP system, and Epicor has proved to be a third of total cost of ownership as opposed to our previous system.”

Have your say at www.themanufacturer.com

ITnews... ADVANCED PLANNING AND SCHEDULING

Strong demand for free planning tool Advanced planning and scheduling specialist Preactor International has revealed that several hundred companies have already downloaded and activated its new entry level solution, Preactor Express.

Available since January 4th 2010, Preactor Express is aimed at providing smaller companies with access to what it calls ‘next generation’ planning and scheduling functionality, and is based on the company’s latest version of its flagship product Preactor 11. Completely free of charge, and supported by training videos, Preactor Express comes with a perpetual license, renewable annually. The only

drawback? In contrast to Preactor’s ‘paid for’ products, Preactor Express lacks the ability to plan and schedule around multiple constraints, being limited to a single constraint. The ability to configure the underlying database is also restricted. Nevertheless, Preactor executives stress that the free tool is perfectly adequate for the needs of many smaller manufacturers presently using spreadsheets or outdated planning tools — who they hope will move up to the ‘paid for’ Preactor products as they grow and expand. “We are delighted but not surprised by the tremendous response to the launch of Preactor Express,” says Mike Novels, CEO of Preactor International.

DEMAND PLANNING

BSW Timber chops inventory with Infor SCM Demand Planning Berwickshire-based BSW Timber, the UK’s largest saw-milling business, has selected Infor SCM Demand Planning to reduce inventory, improve customer service levels, and more tightly manage the seasonal peaks and troughs in demand for its products. The move comes after rapid growth through acquisition and escalating customer demands had placed the company’s existing spreadsheet based planning system under pressure. Infor SCM Demand Planning is intended to increase visibility of the company’s 6000 SKUs which span fencing, decking, pallets and cladding for large DIY retailers, builders’ merchants and specialist outlets. Combined with improved accuracy in its demand forecasts, this will help to reduce inventory and cut costs, while delivering better stock availability. “The acquisition of a number of additional production sites, combined with continued pressure to meet escalating customer service level agreements, has added complexity to our supply chain in recent years,” says Howard Jones, financial director at BSW Timber. “Infor SCM Demand Planning will provide us with better visibility of customer demand, while maximising efficiency and helping us to plan for the seasonality which is inherent in our industry.”

“Smaller companies face a unique range of challenges and opportunities, and Preactor Express gives these manufacturers the best possible chance to gain agility, visibility and competitive advantage.”

PLM

Aston Martin selects Siemens PLM After spending two years extensively analysing the Product Lifecycle Management (PLM) software market, British sports car maker Aston Martin has selected a PLM solution from Siemens PLM Software. “The increasing complexity of vehicles, coupled to fastchanging economic conditions, are forcing automakers to re evaluate their existing PLM applications to align with the best available in the market,” notes Sanjeev Pal, a PLM analyst at IDC. Accordingly, Aston Martin is standardising its global sports car development process around the Siemens NX CAD platform for product design, and Siemens Teamcenter software for PLM—thereby combining integrated computer aided design, manufacturing and engineering analysis with award-winning workflow, enterprise-wide information sharing, and rapid information dissemination. “Luxury automotive manufacturers like Aston Martin must make their product decisions earlier and more efficiently in today’s marketplace,” says Chuck Grindstaff, president and chief technology officer at Siemens PLM Software. “This company wide deployment will enable Aston Martin to drive productivity improvements, create common processes and deliver enhanced global collaboration for product design and development.”

IT in

manufacturing

ENTERPRISE RESOURCE PLANNING

Marshall Aerospace re-engineers with Epicor Cambridge-based Marshall Aerospace has selected Epicor 9 as the ERP solution to underpin its business during an enterprise-wide business re-engineering project.

With an annual turnover of over £250m, 1,800 staff and over 80 years of experience in the aviation engineering and support industry, Marshall is one of the UK’S largest aircraft maintenance, engineering and operations companies. Epicor will replace a ten year old finance system, as well as many of the functions of an internally-developed system which has been evolved over the last 20 years. A core team of seven business managers from across Marshall Aerospace will work full-time on the

project, along with two IT consultants. On completion, Epicor will take over all human resource, purchasing, inventory, warehousing, sales processing and project management functions across the business. Additionally, within the company’s aerostructures and systems division, Epicor will also be providing full manufacturing functionality to enable the production and management of medium-volume manufacturing runs— something that the division has not had before. “This is a huge business transformation project for Marshall Aerospace,” says Alan Paul, Marshall’s head of information technology and security. “It will not only unify our systems and processes across the organisation, but provide

an ERP platform to support our long term strategic goals in line with our ‘Horizon 2020’ company-wide growth strategy.”

BUSINESS INTELLIGENCE

ENTERPRISE RESOURCE PLANNING

NEC Display Systems goes live with BOARD

SAP reveals bumper financial year

To meet the needs of a dynamic and competitive market, computer monitor manufacturer NEC Display Solutions has implemented a supply chain monitoring solution from specialist business intelligence and performance management vendor BOARD in order to monitor its global supply chain.

Boosted by three new ranges of ERP software aimed at smaller manufacturers — including its cloud-based offering solution SAP Business ByDesign — enterprise software giant SAP has announced record revenues for 2010

The move followed a realisation that the company needed a flexible planning and reporting solution to map and consolidate its planning modules across a global environment. NEC had previously been using spreadsheets, which had disadvantages in the areas of data consistency, security, collaboration and the merging of planning data. BOARD was selected after carefully vetting over 20 other solution vendors, and the solution is now the central global planning, forecasting and analysis environment for the business, providing transparency across the supply chain and balancing sales demand with inventory management. “Thanks to BOARD we were able to replace an Excel based sales and purchasing system with a database supported operational planning and reporting system,” says Andreas Grossmann, senior controller in NEC’s finance division. “BOARD convinced us primarily due to the ability to map integrated planning workflows in a way that is descriptive and interactive.”

“We finished 2010 with the highest fourth quarter for software revenue in our history,” says SAP chief financial officer Werner Brandt. Software revenues for the year were €3.27bn, an increase of 25% on 2009, while service revenues were up 19% at €9.79bn. Total revenues were up 17% at €12.46bn. But full year 2010 operating profit was €2.59bn, unchanged on the year due to restructuring charges of €198m and an increase of €980m in provisions for the litigation it faces in the United States, where the company stands accused of stealing propriety information from Oracle. “Our results prove that SAP is back to being a growth company,” said Bill McDermott, Co CEO of SAP. “We showed rock solid revenue across the globe, particularly in the fast growing emerging markets where customers still have the most choice and are rapidly expanding their businesses.”

Have your say at www.themanufacturer.com

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

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

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

Training Supplement Produced in association with Semta, the Sector Skills Council for science, engineering and manufacturing technologies in the UK.

Training makes its case Philip Whiteman, chief executive of Semta, Sector Skills Concil for Science Engineering and Manufacturing Technologies explains why skills investment makes business sense for manufacturing.

ewly released industry data

In times of change and austerity, it can be

demonstrates the valuable contribution

tempting to stop training. But we find that

manufacturing makes to the UK

companies who use our National Skills Academy

economy. Semta represents 130,000 UK

for Manufacturing productivity programmes get a

sites employing 1.8 million people who each add

6:1 return on investment. Clearly, then, there are

value which is well above the national average.

opportunities for manufacturers who want to see

It’s Semta’s role to help make these companies more competitive through skills improvement

sustainable business growth. There are many ways that Semta can help. We’re

— challenging of late, as the skills landscape

leading on simplifying the skills landscape to

undergoes radical change to reduce public

make it easier for employers to access high quality

spending. I remain confident, however, that it

programmes and materials; working with partners

is achievable, what with Semta’s track record in

and in clusters to ensure national standards for

providing solutions that provide a strong return on

training delivery; and that students are more

investment. We have, for instance, supported 6,000

employable when they leave education. As older

companies to start business-focused training. Our

workers retire and emerging technologies —

Compact, which funds training priorities identified

including composites and biotechnology — create

by our sector skills agreements, has created training

the need for increased technical and higher level

plans with 2,000 companies — 85% of them smaller

skills, we’re working with colleges and universities

companies — who traditionally struggle to find

and creating apprenticeship frameworks that provide

the right training resources. Without doubt, such

innovative development pathways from apprentice

interventions have helped increase the number

to degree and masters levels.

of people registering for National Vocational Qualifications: by 25% to over 100,000.

Over the course of the next few pages, we will reveal how changes may affect manufacturing, what support is available to employers and how you

Gross Value Added per employee in:

should go about training planning, implementation and measurement in 2011 and beyond. Ultimately, our job is all about listening to you, the employer, understanding your skills needs and

UK economy - £35,500

providing solutions either on an industry-wide or

Aerospace - £76,100

company basis. I welcome your feedback so keep in

Automotive - £59,600

touch through: customerservices@semta.org.uk

Electrical - £45,300

or Twitter: Semta_PWhiteman

Electronics - £59,300 Mechanical - £53,000

At what price?

Metals - £49,900

Hard to fill vacancies are costing the UK almost £120m a year in lost productivity according to

Training Supplement

Semta. Engineering employers say that the main

of young talent with theoretical and practical skills

impacts of being unable to successfully fill these

to step into the gap created by those employees

vacancies, all of which are likely to impact the

who, in the near future, will be retiring from

bottom line profitability of businesses, are: loss of business

industry. Working in partnership with other agencies and employers, we can ensure that employers are

difficulties in developing the business

able to identify and address their specific skills gaps

increased workload for existing workforce

and training needs and so assist them to compete in

missed deadlines, and

an international market.”

loss of quality of service/products and increased running costs

Semta is supporting employers to access the Regional Growth Fund, and expects the sector to benefit from the new Growth and Innovation Fund,

The government has stated that it clearly recognises

following the success of Semta’s £100m sector

the importance of manufacturing and engineering

Compact. The Growth and Innovation Fund will

in rebalancing the economy. It is making funding

provide up to £50m co-funding a year to support

available through successful sector skills councils like

employers in training and to promote workplace

Semta to support skills, innovation and growth.

practices to improve development and deployment

Semta’s chairman, Allan Cook CBE, said recently

of skills. It will pilot new initiatives to increase the

that, “Semta has a key role in ensuring UK business

contribution of skills to growth in these specific

has the necessary skills employers need to help

sectors. It will, too, give early priority to those

rebalance and stimulate the economy. The sector

looking raise skills and performance through new

needs well educated, skilled, motivated people

professional standards — including occupational

who have been suitably trained and are capable of

licensing and the uptake of apprenticeships. Semta

working with today’s technology as well as with the

will also be helping to shape a new employer skills

new and emerging technologies. We need a pipeline

pledge to suit the needs of the sector.

Lerc & Lean The Lean Enterprise Research Centre (LERC) has been providing leading edge learning in lean thinking since 1994. Our MSc Lean Operations was the first in the world to offer a dedicated executive lean Master’s programme. Course modules are held in Cardiff and at student workplaces where learning is applied to real world situations alongside company staff. The manufacturing stream attracts a global audience with representation from some of the world’s largest and most successful companies. Student feedback consistently points to the excellence of the lecturers, unique external industrial speakers (from the UK and abroad) and the networking opportunities the course provides.

What our students say...

In addition to our flagship programme, LERC also runs public executive programmes, bespoke courses, coaching and a lean assessment and accreditation service called the Lean Competency System (LCS). This in-house assessment and qualifications system enables organisations to embed lean training at all levels and has been taken up by such companies as Boots, Mars and Nestle.

‘The power of the course structure run at each other’s factory sites was incredible. I saw Lean applied from exhausts to nuclear fuel rods to the Ordnance Survey. The quality of the teaching is very high with subject experts attending the sessions to provide a different perspective. I also have made a very strong network through the other course members as well as the staff at LERC’

Critical to all LERC’s courses is the repositioning of the customer as the most important focus of their activities. In the Manufacturer Survey, June 2010, LERC lecturer Barry Evans found that most improvements in the companies surveyed had an incredibly low sustainability rate – 95%. Despite their best efforts, they only achieved marginal, transient benefits at best. The main issue seemed to be that these companies were not starting from a position of lean customer ‘value’. Companies like Tesco and Toyota put value at the heart of everything that they do and attempt to understand what it is that customers really value and the mechanisms to deliver it. Our courses reflect this thinking, with a focus on purpose, the system as a whole and continuous innovation and improvement, rather than on unit cost reduction and efficiency improvement.

‘The spirit between the class and lecturers has been first class’ ‘The structure attracted me to the course. I have not been disappointed’ ‘After spending 30 years in production management I thought I knew something about manufacturing. How wrong I was. Since joining the Lean MSc I am continuously amazed at how simple concepts can result in tremendous improvements ‘

‘Having worked in the automotive industry for a number of years it was refreshing to understand in more depth lean thinking from the perspective of a range of industries. The structure of the course and the teaching method allow good use of sharing of ideas and approaches whilst challenging the individual to both learn and contribute in a positive manner. I learnt a lot and have applied much of the thinking to my everyday way of working, realising great benefits to all in the organisation’ ‘I would strongly recommend this course to anyone embarking or continuing to develop a career linked to manufacturing operations.’

Lean Enterprise Research Centre

Education The Lean Enterprise Research Centre (LERC), part of Cardiff Business School, has for the past ten years actively assisted UK and European manufacturers to improve their operations, build in value and reduce waste. LERC is renowned for its exceptional research, world class educational courses and industry renowned training programmes. It is a Shingo Prize for Research recipient (2010) and one of its flow projects won the Bombardier Award of the Year 2009.

The MSc in Lean Operations was the world’s first lean masters programme and continues to educate some of the world’s most valued lean champions. LERC is also credited with running the globally recognised Principles in Lean Thinking course, a ten day introductory course.

Contact us for more information For further information on these courses, or if you wish to contact LERC to see how we can improve your business performance, please contact: Email: info@leanenterprise.org.uk Tel: 029 2064 7028 Web: www.leanenterprise.org.uk

www.leanenterprise.org.uk

COURSE DATES FOR 2011 MSc in Lean Operations Exclusive 2 year part time Masters degree; modules held in student workplaces, reaping real company benefits. • Next intake: 19 September 2011.

The Principles of Lean Thinking A 10 day course in the concepts of Lean Thinking, suitable for senior managers, production managers, change agents and team leaders. • w/c 28 March & 16 May 2011 • w/c 6 June & 18 July 2011 • w/c 17 October & 14 November 2011

Lean Competency System (LCS): Structured workplace-linked qualifications; assistance with in-house training models, as adopted by Nestle and Mars Academies. • Assessments throughout the year

LERC Annual Conference 2011: • 5 July 2011

Training Supplement

Source: ONS, ABI 2008 SIC2007

Semta works closely with Skills Development

in productivity and competitiveness, strategic

Scotland, DELLS in Northern Ireland and Welsh

workforce planning, technical skills and leadership,

Assembly Government, and recently secured more

management and entrepreneurship.”

than £1m funding from the Welsh Assembly to deliver the training manufacturing employers

Managing for success

need. The funding, which is part of a £7m skills

Semta has commissioned the design and delivery

project to support business growth in Wales, will

of a leadership and management programme

see Semta work in partnership with Cogent, the

— Managing for Success — specifically aimed at

Sector Skills Council for Science based industries,

supporting managers and supervisors employed

and Proskills, the Sector Skills Council for the

in the industry. Semta, through its National Skills

process and manufacturing sector, to develop new

Academy delivery partner, QED Consulting, has

ways of training that will better support the needs

successfully delivered 8 programmes with over 100

of employers.

managers and supervisors supported.

Said Semta UK operations director, Lynn

‘Managing for Success’ was designed and

Tomkins, “Semta will be supporting businesses

tested by industry experts to ensure it turned

and the UK Commission for Employment and

good managers in to great business leaders, so

Skills, working with the National Apprenticeships

that those going through the programme would

Service and the Skills Funding Agency, to put

have the rights skills to supervise their teams,

manufacturing and engineering at the forefront

solve problems and make those tough everyday

of a rebalanced economy. We are the sector’s

decisions. The programme has recently been

voice on skills across the UK and have made

updated to reflect the new challenges a manager

their priorities clear through our sector skills

from this industry now has to face, and to ensure

agreements. So our focus is on improvements

managers working through this programme can

for. This accusation sits uncomfortably

specific business needs. This

with PP. Business leaders must

strategy should, wherever possible,

shoulder responsibility.

include tailored training material

Why listen to PP? ossibly because they are a

Training plays second fiddle in

and be delivered in-house to

real manufacturing business.

almost every business we encounter.

Maybe due to the fact that

What’s the first step in changing this?

they have helped an energy

Well it’s not appointing a training

without jumping on the saddle. The

solutions company in Manchester

manager or setting a training budget,

same is true for training. Sitting in a

raise productivity by 36%. Your ears

but belief. Belief from the top that

classroom will only get you so far.

may prick open to the news that PP

training is the most important aspect

A good training strategy will

have saved the Ministry of Defence

within the business

include plenty of opportunities for

over half a million pounds, or that a

It is not easy for manufacturers

achieve sustainability. You can’t learn how to ride a bike

new skills to be applied during and

Midlands manufacturer is glowing

to buy into this belief. They’ve

after a million pound loss transformed

been stung by the sharp tongue

into a two million pound profit upon

of many a training consultancy.....

When

the creation of their very own in-

spending significant amounts of time

Sir John Lubbock, the 19th Century

house training school with PP’s

and possibly money, with a gnat’s

baronet, is quoted as saying “In truth,

expert assistance.

impression left on culture or

man generally makes time for what he

bottom line.

chooses to do. It’s not really the time

If none of the above impresses, PP hopes its passion for UK

For culture to flourish, boardroom

after training.

but the will that is lacking” Manufactures may or may not

manufacturing will ensure you read

belief in training is paramount.

on. A passion so strong that PP

Followed quickly by answering three

have a training budget. They may

believes, with the right formula, UK

questions - Who, What and When?

or may not have their own training

manufacturing will pull the country

department. They may or may

out of the dire financial mess.

Who

Fantasy or fact – you decide.

If training’s first pitfall is lack of

business plan. They must have

Gurjit Kang, PP’s Head of Business

belief from the top, a close second

spare capacity and schedule training

Improvement explains.

is “who you train”. Put simply,

into it. This is the true test of boardroom belief.

not have a training section in their

Culture is key. It unlocks day to

there are some employees who

day frustrations related to efficiency,

are not worth training. They will

quality, productivity, cost, lead time,

not learn but they will disrupt. The

in training every year with debatable

on-time delivery, client satisfaction,

world’s best trainer will not reform a

rewards. UK manufacturers need to

inventory levels, profitability...you

genuinely bad attitude.

accept responsibility of this issue,

get the point. Manufacturing leaders across all

What

Vast sums of money are invested

think up a training strategy right for their business needs and then hold

industry sectors seem to be looking

“We need to develop our team

for the magic formula on how to

leaders”. “We want better IT skills

develop the culture within their

across the shop floor.” It astounds

asking what the government can

workforce. Ten years ago, PP

me how fluffy a company allows

do for their business, and start

found this formula and the

its vison on training to be. Every

asking what their business can do

subsequent spell of 20% growth

manufacturer should develop a

for UK manufacturing. After all,

year-on-year has been nothing short

training strategy that fits their

culture is key.

true conviction to see it through. It’s time business leaders stop

of phenomenal. Again and again, we read that the biggest challenge facing UK manufacturing is the skills shortage and how the government and education system have a lot to answer

Gurjit Kang: E: kangg@ppbusinessimprovement.co.uk W: www.ppbusinessimprovement.co.uk T: 01922 419109

PP B u s i n e ss I m p r ov e m e n t

Your Country Needs You

Training Supplement

achieve an Institute of Leadership and Management

training can play in helping to improve

Level 5 Award.

business performance.

The programme provides opportunities for return

Mark Kempton, Bipolar business unit manager

on investment for the organisations as managers are

for Dynex Semiconductor Ltd, says, “Straight away,

required to apply tools and techniques explored in

Semta helped us to identify our training needs

the workshops back on the ‘shop floor’ through the

and worked to get us funding for our training

completion of a work based project .

programme before recommending us to a National

The “Managing for Success” Programme has been supported in the West Midlands area by the Iron and Steel Training Trust who provide a grant of £800 towards the programme cost.

Skills Academy approved training provider who delivered the training to staff. “From the outset, the entire process was seamless. The training was easy to implement and the business benefits have been substantial. Whilst

For more information on the Managing for Success

Dynex’s significantly increased revenues cannot be

Programme, contact Semta customer services:

solely attributed to the training, there’s no doubt

T: 0845 643 9001

that it played a significant role.”

E: customerservices@semta.org.uk

Dynex Semiconductor Ltd improves productivity

Sheila Revill, a senior operator at Dynex Semiconductors, was one of the members of staff to undertake the B-IT training. She adds, “The training gave us an opportunity to find solutions

Lincoln-based Dynex Semiconductor Ltd called

to the day-to-day challenges we face. For example,

upon Semta to help it improve efficiencies, drive up

when materials stocks are running low, we now

productivity and return to profitability.

make sure we reorder promptly, helping the whole

Semta carried out a full analysis of the company’s

team run more smoothly. It’s all these small steps

goals, and investigated what training should

that add up to the huge efficiency improvements

be implemented to help the company achieve

we have seen and for me, everyday life has

these ambitions. As a direct result of carrying out

become easier.”

business improvement techniques (BI-T) training, individual staff productivity has been increased

Securing a pipeline of talent

helping to double unit output in bottleneck

Semta research shows that 32,000 new employees

manufacturing areas — demonstrating the role that

will be needed across its sectors each year between

now and 2016. A third of these need higher skills,

of loans for further education at Level three

in stemming the outflow of talent caused by

and above for adults from 2013-2014. This will

retirements in a workforce where nearly a third is

include adult apprenticeships at Advanced Level

aged over 45.

in response to employers such as Airbus and Rolls

Set against the backdrop of rising university fees,

Royce. Understanding that growth will follow if

Semta expects that apprenticeships will have a

apprenticeship frameworks meet employers real

greater role than ever before in ensuring businesses

needs, Semta was one of the first Sector Skills

have the right skills to grow. The government’s

Councils to offer a Higher Apprenticeship with clear

recent skills strategy announced funds for 75,000

progression from Young Apprenticeships. Semta’s

new adult apprenticeship places per year. Last

Higher Apprenticeship in Engineering Technology

year more than 30,000 apprentices started in

will increase the number of high-level engineering

engineering and manufacturing technologies;

technicians and incorporated engineers by 1,000 a

only 15% of engineering employers currently offer

year in England and Wales.

apprenticeships, however, so Semta’s innovative

Ann Watson, managing director of EAL, the

approach to apprenticeships will be critical in

UK’s leading award organisation for engineering

finding the 10,000 higher skilled employees needed

qualifications, comments, “Every qualification we

each year between now and 2016.

award is created after careful consultation with

Semta has already run programmes which

Government proposals outline a new system

highlighting the importance of apprenticeships

industry experts and with the real life needs of

stimulated apprenticeship growth, where smaller

firms on the ground taken into account. Many

employers share apprentice workplace development

top employers started as apprentices and are

or where larger companies do the initial training of

concerned that changes may lead to a watering

more apprentices than they need to help smaller

down of quality. They trust EAL to deliver

companies in their supply chain.

candidates who are fully prepared for life as skilled

Training Supplement

employees in a highly innovative industry. Semta’s

Legislation and Policy’, to Six Sigma. The cost of

apprenticeship frameworks do just that and build a

e-learning modules starts at £5 - £10.

transferable competence which is vital to industry standards.”

Getting return on investment from training

What does Semta do for us? As a sector skills council, Semta is responsible for a range of sectors including: aerospace; automotive; bioscience; electrical; electronics; maintenance;

No sensible business decision would be taken

marine; mathematics; mechanical; metals and

without looking at return on investment. Training

engineered metal products. Its effectiveness in

should be no different, yet only a third of

representing industry is underpinned by strong

manufacturing, engineering and science companies

employer leadership with the direct support of 375

started last year with a training plan or budget.

top organisations. Semta works to improve the

Semta’s approach in helping individual companies is to start with business objectives and work out skills priorities that will give pay back. Companies working with Semta’s National Skills

competitiveness of these sectors through: Intelligence: researching skills issues Influence: ensuring government and education understand the skills employers need to achieve

Academy for Manufacturing have seen, on average,

improved performance and growth including more

a 6:1 ratio of return on their skills investment.

science, technology, engineering and maths students

Indeed, since its announcement in 2007, the National Skills Academy for Manufacturing has approved over 80 programmes and 500 accredited trainers and assessors who have trained 12,300 learners. John Hayes, Minister for Further Education, Skills and Lifelong Learning, says, “The UK has a rich manufacturing heritage and the National Skills Academy for Manufacturing has a vital role to play

properly prepared for work Infrastructure: developing industry standards, designs apprenticeship programmes and approves vocational qualifications to meet industry needs. Investment: helping employers across the UK find available support funding for skills. Impact: supporting employers get a return on investment from training

in ensuring a prosperous future for the sector.

How Semta can help you

Through working with employers and partners, the

Semta works with individual employers to identify

Skills Academy has been able to support businesses

and support their skills needs. There are four simple

in achieving real benefits, enthusing companies

steps:

and workforces.”

1 Make an appointment with one of our sector experts

David Fox, chairman and chief executive of Power Panels Electrical Systems of Walsall, developed his company into a world beater, winning the Best Factory Award in 2005. He’s such a believer in return on skills investment that he set up PP Business Improvement, a National Skills Academy training provider. “On a recent project, it took us 30 hours of training to save 200 hours, so the return was almost

2 With Semta’s advice and guidance, create a plan which: a Addresses the skills needs of the individual

business

b Identifies sources of training to meet these

needs

c Helps them access any available funding to

support the training

7 to 1,” says Fox. “Do that continuously and you

3 Implement the plan

more than pay for the cost of training. This is my

4 Evaluate the success of the training and consider

strongest conviction. Training is not a cost.”

further skills needs.

The National Skills Academy offers a wider range of quality approved programmes specifically designed to deliver real benefits to individuals and their companies. There are programmes and qualifications in business improvement techniques,

To find out how employee skills training can boost your business, contact Semta Customer Services

leadership and management, employability, health and safety, and technical skills. To support

Tel: 0845 643 9001

individuals there is an e-learning centre with

Email: customerservices@semta.org.uk

over 1,000 courses ranging from ‘How to Make

Web: www.semta.org.uk

Presentations’, through to ‘Environmental

EEFInsight All systems go Edward Machin investigates EEF’s range of environmental services, including a management system which keeps manufacturers ahead of the legislative curve.

the UK’s largest sectoral employer’s organisation, making regular representations to both UK government and the EU on behalf of British manufacturing, one would expect EEF to have its sustainable bases covered. And with representation, nationally accredited courses, in-plant training and environmental consultation but a fraction of its current offerings, it really is a case of take your pick for manufacturers wanting to increase their green credentials with EEF’s help.

Higher and more detailed environmental standards are increasingly been seen all the way along the supply chain — from-blue chip to the smallest SME Mike Baron, EEF There is, moreover, one feature which the organisation believes must sit at the heart of any long-term strategy: an Environmental Management System ISO14001. Traditionally, only large or high-risk businesses — chemical manufacturers, for instance — considered such systems worth their time and effort. According to Mike Baron, an HSCE advisor for EEF, this has all changed. “Higher and more detailed environmental standards are increasingly been seen all the way along the supply chain — from-blue chip to the smallest SME,” he says. And for those manufacturers only now beginning to think about their environmental management journey, EEF offers a comprehensive gap analysis service to identify areas around which to focus an energy reduction strategy. With an improvement programme produced, including the identification of targets, objectives and KPIs thereafter, EEF’s team of ISO14001 trainers can begin educating each company’s employees to enable autonomous operation and system maintenance going forward. With audit and regular compliance checks central to such training, EEF offers continued bespoke awareness courses for those on the shop floor — machine workers, supervisors, managers — so they can further understand the management system, how it impacts upon day-to-day work and,

ultimately, what they should be doing as part of their regular duties to ensure its smooth running. “Each system is, of course, different, and tailored to a unique risk profile; it is also dependant on how the business operates,” says Baron. And because numerous factors determine how any one management system looks, EEF’s approach offers a wide range of environmental training and consultancy services, including: CRC, consultation, waste minimisation, environmental permitting, energy services and carbon footprinting, among many others.

Heads up With the best will in the world, however, many businesses may be oblivious to much of the environmental legislation they are required to comply with. While understandable, given the torrent of ‘green’ regulations hitting industry, prosecution and enforcement cases largely concern manufacturers unaware that a particular provision applies to them — with ignorance seen as no defence by the judiciary. Designed to combat this minefield, perhaps the key feature of EEF’s environmental management system is its ‘legislative register’. This allows manufacturers to anticipate, monitor, track and plan for those provisions directly applicable to their organisation. “Because our policy team works alongside the stakeholders crafting environmentally-themed legislation for the UK, and unlike many of our competitors, we are especially proactive in advising companies as to their legal requirements,” says Baron. As a result, EEF members enjoy significantly more advanced notice of key regulatory provisions set to affect them in coming weeks or months — avoiding the scramble of last minute compliance. And being able to offer such critical information where others can’t; does it amount to cheating, so to speak? “Certainly not,” he says. “It’s simply one of the many benefits of our membership. At EEF we’ve consciously taken a decision to represent the manufacturing industry and become ever more involved in environmental efficiency. Most other organisations choose not to offer this service or are just not interested, it seems.” With a focus on all things environmental only intensifying, too, those manufacturers ambivalent about the benefits of sustainability may well soon find themselves green with envy. And nobody wants that, do they?

Manufacturinginaction Putting UK manufacturers under the spotlight Samworth Brothers Group Feature Samworth Brothers Foreword 94 Brian Stein, chief executive of Samworth Brothers, talks to Tim Brown about the company’s origins, its impressive range of group businesses and the company’s plans for the future.

Tamar Foods 97

constr u ction prod u cts

Gripple 118 Jane Gray talks to Mark Edmonds, managing director of Gripple, find out what differentiates the entrepreneurial company from its competitors.

filtr a tion systems

Edward Machin speaks to Tamar Food’s Anil Ahir about his company’s recent growth — with lean manufacturing, considerable investment in automation and company-wide training programmes all playing their part.

Ginsters 102 Jane Gray talks to Mark Duddridge, managing director at Ginsters, to find out how the company is satisfying the nation’s growing appetite for its products.

Mann+Hummel UK 120 As pressure on the UK divisions of foreign companies to perform increases, Will Stirling meets a German company in the UK beating its European competition to win contracts.

Kettleby Foods 109 Mark Young finds Kettleby Foods’ success is down to a steady supply chain, innovative process improvements and a commitment to its people.

Saladworks 114 Jimmy Mark, MD of Saladworks, gives Ruari McCallion an insight into what makes his company a tasteful choice.

All companies featured will be entered into the MIA Award 2010

Bringing manufacturing

to the table

Brian Stein, Samworth Brothers’ CEO, Courtesy of Leicester Mercury

Brian Stein, chief executive of Samworth Brothers, talks to Tim Brown about the company’s origins, its impressive range of group businesses and the company’s plans for the future.

With

more than a century in food production, Samworth Brothers is a family-owned company with 13 businesses producing high quality chilled foods mainly for the UK with some export market. Employing 7,000 people in modern and well capitalised production sites in Leicestershire, Cornwall and Bedfordshire, the company has developed a large and diverse portfolio of food products and cultivated strong relationships with the UK’s biggest food retailers. The Samworth Brothers story began in 1969 when the Samworth family purchased Nottingham-based Pork Farms. Eight years later, following the retirement of Frank Samworth Snr his sons purchased Ginsters Cornish

Pasties and sold Pork Farms to Northern Foods. In 1985, the name of Ginsters’ holding company was changed to Samworth Brothers, after which the company acquired Leicesterbased pork pie maker Walker & Son. The main focus for Samworth Brothers became Cornish pasties and Melton Mowbray Pork Pies from Leicestershire. The Cornish pasty has a strong heritage, originally being made for Cornish miners. With a large hand crimped pastry edge the design allowed the miners to eat the pasty with dirty hands, holding it by the edge which could then be thrown away. Twelve years ago, Samworth Brothers began an exercise to achieve protected status for some of its products. In a similar way that some sparkling wines can only be labelled champagne if they are made in the Champagne-Ardenne region of France, Samworth Brothers successfully achieved protected

Food and drink Samworth Brothers foreword

Samworth Brothers at a glance Employees

over 7,000

Turnover

£669m (2009)

Main products lines

Pies, Cornish pasties, ready meals, sandwiches, sausages, processed ham, desserts and salads

Key people

Brian Stein (CEO), Alan Barton (finance director), Mark Duddridge (executive director), Lindsay Pownall (executive director), Mark Samworth (executive director)

Group companies Bradgate Bakery, Dickinson & Morris, Ginsters, Tamar Foods , Walkers Charnwood Bakery, Kensey Foods, Kettleby Foods, Melton Foods, Walkers Midshire Foods, Saladworks, Blueberry Foods geographic indication for Melton Mowbray Pies. The company is in the process of attaining the same approval for Cornish pasties. “If you go back over the years, Spain, Italy and France have been very strong at getting protected status for their traditional foods, while the UK has not,” says chief executive Brian Stein. “Now you will now find several British companies that have protected status for their products.” In the last two decades, the company has also expanded into other markets such as ready meals, desserts, salads, sandwiches, sausages and ham. Indeed, at 3.5 million sandwiches a week it is the second biggest sandwich maker in the UK. According to Stein, Samworth Brothers is the most diversified chilled food manufacturer in the UK. In line with the company’s product expansion, the vast majority of the company’s businesses are focused on producing own label chilled food for Waitrose, Marks and Spencers, Tesco, Sainsbury’s, ASDA, Morrisons and the Co-op. “Our main branded product, Ginsters, is very important to Samworth Brothers, it is what we are famous for,” says Stein. “But Ginsters is now only about 20-25% of the business. The reality is that over the years as the retailers have demanded more and more own label they have also demanded better and better standards. Samworth Brothers has been in a good position to cope with that.”

this separated structure, the group does leverage its scale by coordinating its purchasing to achieve least cost as well as share best practice. Every business is run by its own board of directors with the full support of dedicated sales, personnel, finance and other teams on site. This provides the sites with individual ownership and allows customers to benefit from fast response times and specialist knowledge. “We expect the managing director and directors of individual sites to run their business and be very close to its customers, staff and their particular sector, whether that be desserts, sandwiches or pork pies,” says Stein. “It is only by those people being experts in those particular sectors that we have developed the strength that we have.” Stein also believes that this specialisation has allowed the company to excel and be competitive particularly in the own brand sector, a term used to describe food produced by a manufacturer using the retailer’s branding. “Specialisation has been good for manufacturing as it brings about particular skills,” he says. “People then become better and better at very small areas and also more efficient. The whole of the supply chain relies upon that and it works incredibly well with people performing the tasks that they are good at.” In addition, he says that the level of expertise needed for the manufacturing of chilled food also acts as a protective barrier against start-up competition. The plan on both the macro and micro levels of Samworth Brothers is to continue to develop and grow. Using its large diverse portfolio of products, the group companies are endeavouring to exceed the expectations of their customers and by doing so further develop the company’s reputation and generate subsequent interest. “With the recession, our strategy is to do the day job well so that the retailers can see that the company is always delivering on time with the right technical standards with the right product development. By doing that more people will come knocking at our door, as they already are.”

Close to the action Samworth Brothers is largely a decentralised company with operational decisions usually being made by the individual businesses. Each managing director reports directly into a member of the group executive board, and only six people are based at its central office in Melton Mowbray. While it operates

Food and drink Tamar Foods

Food Safety standards drive trust with customers and provide a reputation of excellent hygiene conditions for food manufacturing

The secret

ingredients

Increasing

turnover while operating in a sector only now emerging from a brutal recession: an unlikely story? Not so for Tamar Foods, a subsidiary of Cornwallbased Samworth Brothers, which has realised precisely such success. Indeed, the producer of own-label pastry products including pies, sausage rolls and hot, cold and crimped pasties for the UK’s largest food retailers has seen the accolades rolling in of late. Recognised as the UK’s leading manufacturer of prepared foods at the

Food Manufacturing Excellence Awards 2010, the industry’s equivalent of the Oscars, it also scooped the Best Household and General Products Plant Award at Cranfield University’s Best Factory Awards in September, among others. “The growth Tamar has experienced over the last three year means that we’ve had to create more capacity on the site, be that through technological advancements such as automation or increasing the utilisation of the bakery over a 24/7 basis,” says Anil Ahir, the company’s operations director. Behind this, though, the business has been developing and supporting core skills around bakery, pastry knowledge, meat technology and procurement — the two very much go hand-in-glove. Given that Tamar’s business plans revolve around longterm, sustainable growth, “We strive to be competitive not only in terms of low-cost manufacturing, but by ensuring that our customers are offered the widest range of product flexibility — be it in terms of packaging design, shape or format, to name three,” says Ahir. And with investment in a range of robotic automation tools last year, Tamar now offers improved performance that simply would not have been possible with human interface. “So, while we have focused on the business development side of things, the company has simultaneously taken the opportunity to upskill our people in this new technology,” he explains. “Historically the skill base might have been lower down the technology food chain; now, a range of highly-focused training programmes mean that our staff are competent to operate the gamut of high-technology packing machinery. Coupled with the benefits to the business, therefore, we are developing employees’ careers and further reinforcing job security.”

Bosch Packaging Systems State of art packaging system

with large gaps and a high

Bosch Packaging Systemsâ&#x20AC;&#x2122; latest

percentage of overturned products

robotic installation in the UK,

etc. Bosch Packaging Systems

consisting of two robotic systems,

reworked all the transitions on the

allows the customer to reduce

transport system beginning at the

packaging cost and maximize

oven discharge and continuing

output by automating the former

to the chiller outfeed to generate

manual packaging processes.

an evenly distributed product

Moreover, this robotic packaging

carpet with no significant gaps

line represents the state of the

and very few overturned products.

art in hygienic design capable of

The product carpet passes over

be done is to change the tools of

coping with the steadily increasing

spreading belts to ensure that

the robots and tray denesters, to

hygienic requirements in the food

only baked together products

adjust the magazine of the tray

processing industry. Professional

remain touching when entering

densesters, and load a new format

project management and active

the robots. Trays are denested

on the HMI. This process requires

support from the customerâ&#x20AC;&#x2122;s

and placed automatically and the

only a few minutes, and is also

maintenance team enabled Bosch

robots detect the position and

supported by soft factors like

Packaging Systems to install

quality of products and trays by

change part trolleys or transparent

each of the two robot systems

means of vision systems. The

training documents.

within a 48 hour window. The

products of good quality are

customerâ&#x20AC;&#x2122;s project team ensured

picked gently and placed into

To ensure a quick and effective

that the workers were regularly

the trays, either flat or on edge.

sanitation various hygiene

informed and prepared prior to the

The last robot ensures that every

features are built in. These

installation of the impact that the

tray is completely filled, before

features, such as integrated cable

automated solution would have

the trays are transported to the

trunking, sloped surfaces, good

upon production.

wrapping section, and finally to

accessibility and process visibility,

secondary packaging.

tool-free disassembly of the

System overview

A typical robot application from Bosch Packaging Systems

vacuum system and many others,

The key to success for a robot

Scheduled downtime was

simplify the cleaning process and

pick and place system in the

yesterday

ensure easy hygiene auditing.

quality and consistency of the

As the customer runs a wide

product presentation to the

variety of products and packaging

robots. The challenge is this case

formats that are frequently

was that the products, chilled

changed during the shifts it was of

savoury products different shapes

paramount importance to ensure

and sizes with large tolerances,

short change over and cleaning

leaving the chiller were chaotically

durations. To apply a new format

presented: uneven distribution

on the system, all that needs to

Published in association with: Bosch Packaging Systems Switzerland Roland Czuday Tel: +41 58 674 6554 Email: roland.czuday@bosch.com Web: www.boschpackaging.com

Food and drink Tamar Foods

With labour retention touching a shade under 90%, it seems to be working, too. Ahir explains how such enviable levels of staff satisfaction play out in practice: “We spend a considerable amount of management time ensuring that not only are communication channels clear and transparent, but that our business objectives are communicated at every team level.” Tamar has, he says, a disarmingly simple, non-hierarchical, management structure which has come into being during the last twenty four months. This restructuring programme has seen healthy internal promotion numbers, as well as creating defined lines of accountability, authority and responsibility. “From a macro point of view, the senior directors deliver a quarterly brief to all staff, whereby we shut the bakery for a few hours and communicate our business plan, performance year to date and answer any and all questions from the floor. More than anything, it’s a practical example of how, even at a senior level, we have to be both approachable and seen to be walking and talking the organisation’s objectives.”

‘live’ issues the people would encounter during their day-today work.” Tamar identified, for example, that it was experiencing weight control issues on a particular depositor — and sought to identify the variability’s root cause. As well as maintenance issues that arose when stripping down the technology, “Each operator was setting the line up differently,” says Ahir, “so we didn’t have clear and precise

Making waves One such objective has, and continues to be, a focus on company-wide training. Ahir takes up the story: “Tamar’s approach to the NVQ in Business Improvement Techniques was to undertake a gap analysis of our training and skills, which clearly identified the need to bring in external support. We engaged with a local education provider, part of Cornwall College, to establish a Tamar-specific programme of introducing those Lean tools applicable to our business environment. With lectures and workshops conducted onsite, the ‘Tamarised’ curriculum meant that all work undertaken concerned real,

Quality is built into the design of the product by the excellent knowledge of the NPD chefs

Tamar Foods at a glance Background Tamar Foods was created in 1999, producing out of what had previously been Ginsters Tamar Bakery. Building on their reputation for quality pastry products, the range has continued to expand, with over 110 products now being produced at the site. The company is proud to source produce locally wherever possible, from farmers in and around the Devon and Cornwall areas. Products

Savoury pastry products including pies, pasties and rolls

Location

83 Tavistock Road, Callington, Cornwall PL17 7TA

Employees

420

Contact

www.samworth brothers.com

Fish Engineering Ltd T

he pie industry is enjoying growth with exceptional demand for new innovative snacking and sharing products as the market extends from meal-centred pies. Tamar Foods had identified the need for new machinery to meet this demand and establish them as leading suppliers of bite and snack sized products. In addition to the innovative snack product requirement Tamar Foods also had a further set of challenges to advance their pie production operation to a new level.

Easy run user friendly HMI control Flexible from Snack to Plate size Rapid Exchange of Change Parts Simple to Perform Deep Cleaning

In choosing Fish Engineering they were confident of a partner with the experience and resources to not only meet but to exceed the challenging brief within the limited timescale.

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By establishing a close working relationship with Tamar Foods throughout the project Fish have produced a very flexible machine that is both easy to run and deep clean. In fact the new pie line at Tamar Foods is their easiest to hygiene. To complete the project Fish installed and commissioned the line and provided full training for all staff involved with the line. With years of experience Fish are the leading designers and manufacturers of pie, quiche and pasty machinery. From their UK base they provide everything from spare parts and service support through to full turnkey lines. Fish are also expert in the design and manufacture of changepart pie, quiche and pasty tooling using the latest CAD/ CAM and multiaxis inhouse facilities. The unique press station that was first introduced some seven years ago forms the solid basis for the standard servo driven machines. The first machine is still running at high stroke rates with all the

original press station bearings in place. Fish place great emphasis on detail at the design stage and the lines employ the very latest in new technology from servo drives through to camera and RF tagging for tooling recognition. Screens are configured to be userfriendly and also have help and information pages. Via password protection access is also given to engineering pages where detailed indepth technical information is provided. Fish lines are hygienic, quiet, quick to tool change, easy to maintain and economical to both buy and run.

Published in association with: Fish Engineering Ltd 14 Gateway, Crewe, Cheshire, CW1 6YY

Tel: 01270 251200 Email: info@fishgroup.co.uk Web: www.fishgroup.co.uk

Food and drink Tamar Foods

operating procedures. One of the NVQ teams took it upon themselves to identify what levels of variability we were getting; after having undertaken a Fishbone analysis on its root causes, they presented their solutions to the senior team and board of directors. Some of that meant re-educating and re-teaching; some was rewriting procedures; and some of it actually meant capital expenditure and upgrading technology that was no longer fit for purpose. Most importantly,

People often ask me what Tamar’s secret ingredient is and, for me, it remains the commitment and passion of our people — it’s a simple as that Anil Ahir, Tamar

the solution to their peers. “Take the example of improving output on a manufacturing line,” he says. “The action team will take ownership of understanding its current state, thereafter taking the required Lean principles to the area. Having analysed and produced a critique of the issue, and achieved an acceptable target, the team will communicate and train it out across the other shift patterns.” With a significant reduction in changeover times as a result, lost time is rapidly being eliminated across Tamar’s operations. While Ahir says that having the right tools at the right time and right place can be directly traced to the company’s Lean culture, the work is far from done. “Can we go further? Absolutely! We’re very much at the tip of the iceberg; the plan is to (i) introduce action teams around the clock and (ii) identify more root/cause/analysis work across the floor, the result being that an ever increasing number of staff become involved in the drive towards continuous improvement. In fact, that’s our primary motivation this year: getting more people involved in making our business fitter for the future.” “People often ask me what Tamar’s secret ingredient is and, for me, it remains the commitment and passion of our people — it’s a simple as that. Our people — and their passion, skill and dedication in meeting flexible customer demand. The growth success over the last three year can be directly traced, in one form or another, to staff from all parts of our company, which makes our success taste all the sweeter!”

the process was real-time, and for the NVQ team to be leading such an endeavour created a wave of momentum which was felt throughout the company.” This is but one instance of how Tamar’s recent success is founded on its adoption of an integrated, businesswide culture of lean manufacturing. By establishing what Ahir calls ‘small, multi-functional, action teams’, local units in local work patterns resolve local issues. “At its essence, we’ve been able to pull together these teams and identify their bottlenecks, whether that be productivity, quality or waste reduction,” he says. “By giving them both time and training, including the NVQ, staff enjoy a comprehensive knowledge of Lean tools: 5S, Fishbone and root cause analysis, among many others. With a toolbox bulging with such knowledge, our people are able to pick the most appropriate tools to combat particular problems they may encounter in each local area.”

People power According to Ahir, such an approach means that staff truly own their solutions: whatever they recommend will translate over a 24/7 operation, having taken responsibility for communicating

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21st

century Jane Gray talks to Mark Duddridge, managing director at Ginsters, to find out how the company is satisfying the nation’s growing hunger for its products while also feeding its own prospects for future growth.

With

winter firmly set in, there are few to whom the thought of a piping hot pasty does not seem deliciously appealing. Thanks to Ginsters, the oldest and largest member of the Samworth Brothers food manufacturing group, the prospect of satisfying this cosy nutritional mirage is now available in wide variety at a multitude of corner shops, supermarkets, service stations, leisure centres and other points of retail right across the country. Mark Duddridge, managing director at Ginsters explains how the company has grown over the past three decades, from a modest Cornish enterprise, into one of the nation’s best known food brands: “When the Samworth family bought Ginsters back in 1977 the company was operating out of a very modest facility in Cornwall and totalling about £1m turnover a year. That would now represent less than half a week’s sales. “The growth has been made possible through investing in a modern bakery, modern manufacturing practises and in the brand. The brand is what makes us a little unusual in the [Samworths] group. It is very predominant nationally whereas many of the other members are own label

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operations or less recognisable brands, like Dickinson & Morris the pork pie brand.”

Winning the name game Ginsters has used direct consumer marketing and “non-standard retail markets” in an aggressive push towards securing a place in the 50 national brands, food or otherwise. Investments into machinery and workplace skills have also been absolutely essential. Without them, Duddridge knows the company could never have secured its current market share or output capabilities. “The amount of units we can now make per week has gone up three or four-fold thanks to the automation investment. The direction of investment over the years has always centred on unlocking

Food and drink Ginsters

production bottlenecks by being more efficient. Our only other option was to keep growing floor space and doing things the same way as ever. The technology route was very risky for us because, although the equipment we are using is fairly common in other food industries, we had to work hard on making it bespoke to the special needs of savoury pastry products which are more fragile. The benefit, however, was that at the same time as significantly growing productivity we were able to maintain the same site footprint.” Ginsters decision to dedicate the £20m odd that it has in its bakery equipment has not solely been led by productivity considerations however. Duddridge says the second key driver has been the lean principle of valueadd: “Like many markets now ours is extremely competitive so anything we can do to remove processes that do not directly add value to our products is critical. Putting things into packets, putting packets in boxes, labelling and palletising aren’t adding much to the finished product as far as the consumer is concerned. Our philosophy is that once a good product has been baked we really don’t want to have to touch it again. We are now pretty close to achieving that. We have automated three high care lines and palletising and the work is continuing.” Furthermore each new investment, which also now includes baking and cooling technologies, has been carefully optimised using lean principles to minimise downtime and maximise process consistency and flow. “We have not just looked at the investment in terms of bits of kit,” says Duddridge. Optimising processes and equipment in this way has not been easy though and Dudridge knows that the improvement battle will never be over due to the constantly changing demands of customers and the innovation of new products. “Keeping up with sales growth efficiently has been our key driver but we have had to adapt our improvement focus over the years,” he says. “The product range we are selling now is quite different to what we might have expected three of four years ago. Changes in customer base and consumer demand have meant alterations in shapes and sizes and pack formats. In the first bits of

kit we got I don’t think we built in enough flexibility for this kind of thing but we have got a lot better at that. We have learnt lessons and had a small team really focusing on this problem so that the last two lines we have put in are extremely flexible to allow for the dynamic conditions we didn’t anticipate with the first. Particularly in the three high risk high-care lines this has meant we have been careful to use the same supplier for each; a company which understands our business hugely well and with which we have a good learning relationship.”

Leave nothing to chance There is no doubt that the high-tech bakery Ginsters has been able to continue building throughout the recession has been the fortuitous product of its strong growth in recent years and the relative ease of access to finance that this has brought with it. Duddridge though is proud to say that, although Ginsters has benefitted from fortunate timing in some ways, careful planning, hard work and rigorous reporting have meant that, in the long run the company

When the Samworth family bought Ginsters back in 1977 the company was operating out of a very modest facility in Cornwall and totalling about £1m turnover a year. That would now represent less than half a week’s sales made its own luck: He says: “We have invested some £20million in the last four years. Because the business has been growing and Samworth’s overall has been growing it has been – I will not say easy – but it has been OK to secure the funding and to put the case to lenders and investors. However, on an ongoing basis because we have been very careful in the projects we have chosen to do and have worked hard to make each one a success we have been able to build confidence. When we are looking for funding there is a track record that demonstrates when we say a certain piece of automation will achieve X, it will do so. We do a lot of post capital justification activity.” Making propositions for what current and future investments will deliver in terms of business capability and customer value is however getting harder Duddridge says: “It is very tough out there. Consumers have less disposable income and are being very careful how they spend their money. This impacts on the behaviour of retailers and the pressure on us for cost reduction is quite intense. Although we are very keen to continue our improvements this cost pressure means we have to be very careful how we invest and vigilant in ensuring that every project will enable us to keep driving efficiencies up.”

Power to the people Although this automation and efficiency talk may sound alarmingly like a Skynet style ‘rise of the machines’ to some readers concerned for Ginsters’ 770 Cornwall-based

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Ginsters Crowning Glory C

rown Construction has 30 years experience in the design and installation of insulated panels, forming acoustic enclosures, cold stores, production areas and clean rooms for the food, drinks and pharmaceutical industries. We have completed major construction projects throughout Europe either directly with many blue chip clients or through close co-operation with principal building contractors. We have the experience to undertake large scale contracts involving multiple disciplines, where other specialist contractors interface with our core business, ensuring the completion of critical projects is a streamlined and controlled operation. Backed with substantial Professional Indemnity Insurance, our clients have the confidence to award our company prestigious business on a continuing basis.

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For the past 18 years, Crown Construction has enjoyed preferred insulation contractor status to the major manufacturing group Ginsters of Cornwall. This long, ongoing relationship relies on the consistency with which Crown provide unrivalled service, flexibility and commitment in technically difficult environments where installation is often completed without interrupting production. Many projects have been completed, their success being attributed to achieving challenging budgets and timescales whilst maintaining the highest standards of quality, safety and hygiene. Crown Construction has recently re-aligned its business objectives to provide clients with environmentally responsible and energy efficient solutions.

We develop and utilise innovative designs to improve our construction techniques, particularly in relation to panel stability, fire resistance and aesthetic appearance. If you are considering a new project, or refurbishing your existing premises, please contact us via email at: crown@crownconstruction.co.uk where documentation and full scale drawings can be accepted electronically.

Published in association with: Crown Construction Insulation Ltd

Gores Road, Knowsley Industrial Estate North Merseyside, L33 7XS

Tel: 0151 549 1353 Fax: 0151 549 1562 Email: crown@crownconstruction.co.uk Web: www.crownconstruction.co.uk

Food and drink Ginsters

Ginsters at a glance Key products

Original Cornish Pasty, Chicken & Mushroom Slice, Peppered Steak Slice, Large Sausage Roll

Employees

770

Number and location of UK sites

Manufacturing based at Callington, Cornwall. 15 regional sales offices around the country

Other points of interest

Currently producing over three million products a week, with over 90 SKUs. Sources over two thirds of its fresh beef and fresh vegetables from Cornish suppliers

employees, Duddridge would be quick to dispel any such fears. Throughout the four years of investment in new technology and automation Ginsters has maintained a steady staff turnover with retention rates consistently in the mid 90 percentiles. Duddridge clarifies: “Throughout the investment we have not lost staff, we have redeployed. The key thing with the automation initiative was to reduce handling costs. We have been lucky that we have continued to grow so that we still need every employee and what we have thankfully been able to do is create a far more skilled workforce of technical operators. We have an extensive training and personal development programme which helps staff develop the process, engineering and product knowledge they need to get the best out of a bakery which is very different to the one which existed five, or certainly ten, years ago.” A key area where skills have changed dramatically is in packaging. Duddridge recalls: “Five years ago everything we baked was fed into a wrapping machine, each product being presented by hand. In addition the products were then placed in boxes by hand and the boxes themselves where made up by hand. Now nobody touches any of that. It is all done by robots and machines. What this means for the people involved in packaging is that as well as retaining all their knowledge of the product, which they needed to do their job before, they have to know how to operate some very complicated bits of kit in terms of knowing how to set up the rights programmes, doing elements of preventative maintenance and managing the process by making use of the data which is automatically collated by the machine.” The front end area of the bakery is another area that Duddridge identifies as having undergone a similarly dramatic transformation in terms of the skills needed by front line staff. It is a change which the MD sees as hugely empowering but one which has required careful management. “Building technical skills has been one thing but building confidence has proved to be, in many ways, more important,” he says. “People have responded very readily to learning and training but it one thing knowing the facts about how to do something and quite another to apply that knowledge independently and with confidence. A lot of our staff have been with us for many years and all of a sudden they are being asked to do a very different job. With the right support most people have responded brilliantly.”

Delivering all of this personal and professional development has been achieved through a number of different routes. Work has been done with the regional Cornwall colleges to develop bespoke courses for the training that needs to be done off-site, other technical skills have been taught onsite using Samworth’s own academy for employee development and other

The key thing with the automation initiative was to reduce handling costs. We have been lucky that we have continued to grow so that we still need every employee and what we have thankfully been able to do is create a far more skilled workforce of technical operators

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WMH UK Ltd WMH UK Ltd. have continued to work closely with the Samworth Group of companies and have supplied turn key systems as well as integrating with other major equipment suppliers to reduce handling costs. Supporting Samworth’s “automation initiative” WMH have been able to design, build, install and commission high speed, high care, product handling and wrapping systems through to automatic box and palletising systems.

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In partnership with Samworth’s project team, WMH were able to originate revised factory layouts to include the installation of the latest high-speed automation equipment. This involved an in depth understanding of the production requirements and detailed liaison with the other primary equipment suppliers. WMH’s ability to originate design concepts and integrate with other manufacturers enhanced the successful installation of

major automation projects. Their enviable track record within the frozen and chilled food industry has been enhanced by helping Samworth’s to achieve their objective of reducing manual labour and unit cost price.

Published in association with: Western Mechanical Handling UK Ltd Moss Side Industrial Estate Callington, Cornwall, PL17 7SD

Tel: 01579 383788 Email: enquiries@wmh-uk-ltd.com Web: www.wmh-uk-ltd.com

Food and drink Ginsters

third-party resource has been recruited for specialised personal development schemes. Duddridge says: “The development provision is a matrix of in-house and third-party provision but where we are using external help we have always made sure it is with people we have worked with for donkey’s years. So people know who they are working with and there are no strangers coming in.” The attention to employee progression throughout a period of such tangible change in the way Ginsters works is an area of particular pride for Duddridge and reflects a broader appreciation of people and community within the company culture. “Both Ginsters and the Samworth’s family want very seriously to be responsible members of the community. We want to reinvest in the local community as we grow. We work with local suppliers for beef, pork, vegetable, flour, cardboard – the list goes on. If we can get a local supplier then we do. This is of benefit to us as well as the local economy as it helps keep food miles down and everything is as fresh as possible with deliveries coming several times a day.”

With such an holistic vision it is hard to see Ginsters’ growth trajectory meeting with much resistance as the broader economic outlook begins to brighten and the British government throws its weight behind the concept of a rebalanced economy in which manufacturing has a prominent role to play.

Aerial View of the Ginsters site at Callington

The big picture Not all links between community engagement and business benefits are so clear cut, but Ginsters remains committed to the belief that if they show they care, the rewards will return sooner or later. Duddridge says: “We do a lot of volunteer work with the homeless, with schools, with an initiative called Chicks – Country Holidays for Inner City kids – and we do a lot of care challenges. We also now have a strong programme with staff to get them to be more conscious about their lifestyle and activity levels. That initiative is now used as an example of best practice nationally and the great thing about it is that it represents a low financial investment but has managed to engage a huge number of staff and has made a big impact on activity levels in the workplace. We do all this work because it makes a difference but it is also linked in to our training and development of staff and it reinforces our position as local employer of choice. Looking to the future we can be confident that our reputation for how we treat and develop our staff will enable us to capture the best talent.”

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Food and drink Kettleby Foods

The real

meal Having added at least 10% to its turnover in every year since its inception a decade ago, Mark Young finds Kettleby Foods’ success is down to a steady supply chain, innovative process improvements and a commitment to its people.

Based

in an East Midlands town perhaps most famous for pies, the Kettleby Foods bakery in Melton Mowbray was the first chilled ready meals site opened by Samworth Brothers, back in 1999. As a completely new entity at that time, Kettleby was created to take advantage of a growing appetite for good quality meals that are conducive to the busy modern lifestyle of today’s Britain. Setting up this dedicated division has proved to be a savvy move by Samworth. Kettleby has added at least 10% to its turnover every year since its inception, in some years doubling it. This year is expected to be no exception. Having initially opened with a 60,000 sq ft new-build factory on a nine acre site, Kettleby has steadily expanded over the last ten years. Its main site is now 72,000 sq ft and in June last year it opened up a 32,000 sq ft satellite site 800 metres away from the main site. This new facility, enabled with £4.5m investment from Samworth Brothers, gives it capacity for a further 400,000 meals per week. The next development will be a storage facility also on the existing site which will consolidate storage in one area

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Mettler Toledo M

ETTLER TOLEDO is the leading supplier of quality weighing and measuring solutions. The organisation is the worldâ&#x20AC;&#x2122;s largest manufacturer of weighing technologies for use in food, industrial, laboratory and retailing environments. The company has been working with Kettleby Foods, Walkers Charnwood Bakery, Saladworks, Blueberry Foods and Ginsters, part of Samworth Brothers Group, for many years supplying them with a variety of industrial weighing equipment. The Samworth Brothers Group uses only the finest ingredients so accurate portioning and weighing are vital processes to their business. They count on METTLER TOLEDO to supply the latest in portioning,

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take-away and floor scales along with tailored service contracts to ensure optimum product uptime, instrument accuracy and regulatory compliance. The industrial scale range for the food industry is made from stainless steel and IP69K rated, specifically designed for hygienically sensitive areas. ColorWeightÂŽ technology, the coloured weight control system, increases productivity during production processes, it helps improve throughout, minimises product giveaway and prevents errors. All weighing solutions fulfil the international food hygiene design standards and will be individually configured to your needs. Scales

are important identification points in traceability processes. Various interface options offer easy integration into existing management systems. Relevant weighing and calibration data is stored and can easily be retrieved and reviewed. Please contact us for a product demonstration or to discuss your requirements further.

Published in association with: Mettler Toledo Ltd Tel: 0116 234 5005 Email: enquire.mtuk@mt.com Web: www.mt.com/Industrial

Food and drink Kettleby Foods

instead of spread over the site. This too could potentially house production facilities when growth necessitates; Building is due to begin this spring. The justification for this is the significant increase in raw materials and packaging to deliver exciting new product development and thus sales growth. Kettleby’s product portfolio consists mainly of traditional British dishes like cottage pie, beef stew and liver and bacon. It supplies these to Tesco and Morrisons under the UK supermarket giants’ own brand labels.

Snow problem Kettleby supplies chilled ready meals – as opposed to frozen ones – and freshness is its concern. The company has always been under pressure to maximise shelf life without the use of preservatives, but it is a challenge it has more than conquered. The company has a constant source of supply, including at least three deliveries of potatoes and two of meat, onions and carrots each day. This allows it to remain flexible to the needs of its customers, who place estimate orders at 6am and firm orders at 4pm for delivery first thing the next day. However, that isn’t to say that life doesn’t throw in a card or two as a test every now and again. Take December, when heavy snow engulfed the UK, as a case in point. Kettleby’s main beef suppliers found themselves snowed in and unable to deliver from Sheffield and Lincolnshire. It was looking as though production might have to stop but, as Kettleby and Samworth Brothers keeps good relationships with a secondary tier of suppliers in addition to its main ones, managing director Ian Arnold was able to arrange a last minute emergency supply from a company in Lancashire. “Because we have a good relationship with them, they are prepared to help us out at short notice,” he says. “Samworth Brothers as a group has always been dedicated to working with suppliers to improve efficiencies and is dedicated to paying on time. This means suppliers are ready to make us their priority when they have limited goods or a situation arises like we had in December.” Consequently, no order was delivered short as a result of weather which brought much of the rest of the country to a standstill.

Kettleby Foods at a glance Established

1999

Products

Chilled ready meals

Customers

Tesco and Morrisons own brand products

Location

Melton Mowbray, near Leicester

Employees

720

Our employees are at the point where if they see a quick and easy fix for something on their line – in terms of quality, efficiency or health and safety, they come forward because they know we’ll do something about it quickly Jo Carver, Personnel Manager Standard practice at Kettleby is to have key ingredients delivered from at least two main sources. “That’s a big part of our risk management,” explains Arnold. Consistency in the supply base is also a key factor for success. Kettleby’s main potato supplier has been the same company for the past eight years, and one of its meat suppliers has been on board for the entire 12 years since Kettleby set up shop. Supermarket promotions also offer the company a chance to test its steel. On a half price or buy one get one free promotion, Kettleby can expect demand to increase by as much as 30 times its usual levels. To meet this demand, Kettleby has to continually work very closely with its suppliers to ensure they are ready to react. Hence, the technical manager spends one day off site each week working with the supply base on quality, demand and process development. “Unless you’ve got a very stable supply base you can’t go out and buy in the open market when you’ve got variation in demand like ours,” says Arnold. For consistency and quality assurance, all suppliers have technical specification which they have to achieve. Potatoes, for example, only have a 3% range for dry matter.

Getting better all the time Kettleby has put much effort into creating an employee led culture of continuous improvement over the last few years and has profited from greatly improved efficiency in its processes as a result. One team leader, Joseph Kumirayi, found a way to save significantly on raw materials while also increasing product quality. Part of the system Kettleby uses for cooling its sauces involves a paddle which stirs and agitates the sauce during the process so that it retains the correct

111

consistency. Joseph noticed that the design of the paddle meant that when it was stirring sauces like onion gravy, much of the solid material was getting trapped around the arms of the paddle. He suggested an altered design which would circumvent the problem. Now installed, the new paddle saves the company several kilograms of onions per batch – amounting to an annual monetary saving of around £75,000. In another example, Kettleby uses one machine to cut its jacket potatoes and another to insert fillings. Previously, it was using two members of staff to transfer the potatoes from the first machine to the second. However, John

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Kettell, an assistant team leader, realised this was needlessly inefficient and worked with a team of external designers to create an automated conveyor belt system to improve the process. The system cost only £2,000 to implement and takes away the need for two employees to perform a routine task. Recently, shadow boards were introduced onto the shop floor which show where each tool should be kept, as a result of an ongoing focus on 5S. The next stage of this involves two operatives, trained as kaizan leaders, who have been given open brief for blue sky ideas on how to improve the flow of people around the changing room and boot room areas. They will be looking at things like the positioning of overall lockers, boot rack s and overall hangers as well as the layout of hand wash and boot wash stations. They’ll be consulting with cross functional teams from around the site – seeking suggestions from the workers affected – and will feed back their recommendations in three months. Personnel manager Jo Carver says: “We began a big focus on continuous improvement training and brought in external training providers at the beginning of 2008 as a way of demystifying the process and obtaining common buy-in from the staff. Since then, 280 of our employees have completed the Business Improvement Techniques (BIT) NVQ to level two. “It’s fair to say that not absolutely everybody buys in first time around but it is vital to get a critical mass of people who are confident in their own scope for making a difference and confident that the business is encouraging them to come up with ideas and solutions – that really breathes life into what we want to achieve. “We’ve now got a real breadth of knowledge and experience. Our employees are at the point where if they see a quick and easy fix for something on their line – in terms of quality, efficiency or health and safety, they come forward because they know we’ll do something about it quickly.” Monthly continuous improvement meetings are held between senior managers and cross-functional teams of employees where all ideas are sounded out and progress from ongoing programmes is reported.

Food and drink Kettleby Foods

Community centred Kettleby likes to show its employees that they are valued and it rewards good work and service milestones. Five years at the company, for instance, is celebrated with lunch served by Arnold and his senior management team, who also donned their aprons to serve up Christmas dinner to each and every employee over a week long period in late December. Ten years’ service is rewarded with a boat trip, band and a barbeque. “Our staff are really important to us,” says Carver. “People work hard here and we like to give something back.” The prospect of Arnold dishing up must be an appealing one; Kettleby’s annual labour turnover is just 8.7% – extremely low for the food manufacturing industry. Shortterm absence last year was below 2% – another indicator of good morale. Supporting the local community is also important to Kettleby. A recent example saw 24 volunteers from the company spend a day transforming a local community hall for a day with expenses – including wages – paid by Kettleby and with Arnold returning covered in paint. Every week nine employees go to a local primary school to engage in reading classes for 6-7 year olds in a scheme run by Leicestershire Cares. Kettleby has been involved in the programme for nine years. “It’s part of our corporate social responsibility in that it really helps the school children, but we find that it also helps our employees to build their own self-confidence and

sometimes even helps some of them with their own communication and reading skills,” says Carver. In December, the staff raised £630 for the MENPHYS Collect for Christmas appeal and also donated 150 presents. The money will go towards supporting a new transport service to take kids to and from community centres. Arnold has targeted growth of over 25% within three years – a feat that looks entirely achievable, given Kettleby’s track record. Some of the credit for this must go to Samworth Brothers, though. Arnold says: “I’ve worked for other companies within a group but I’ve never worked anywhere which gives you the tools and the support to get on and grow your business quite so much as here.” If the owners are an asset to the company, the same is certainly true vice versa. Kettleby Foods’ growth record speaks for itself, but when you look beyond the surface it’s clear that all the key ingredients are here for a company which is only going in one direction.

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Mix

Perhaps

strangely, given its name, Saladworks is not in the salad business. Maybe it should be called something that reflects ‘agile’, ‘adaptable’ or ‘flexible’, because that is what the company has proved itself to be. It was founded in 2003 in a purpose-built factory on the outskirts of Leicester, with the intention of supplying pre-packed salads to high street retailers — hence the name; but it soon found that its chosen business area was not as attractive a proposition as it had first appeared. Rather than shut down and put the experience behind it, Saladworks looked for, and quickly identified, an area where its skills, experience, resources and expertise would enable it to build a strong presence and it went for it, with full commitment. “Our business now is 100 per cent chilled short-life ready meals,” says Jimmy Mark. Salads ceased being any part of its operations in 2005. “The shelf life of our products is, at most, 10 days – they are generally sold within a week.” So freshness remains a cornerstone of its business model. “Our product lines are predominantly pasta based. We make macaroni cheese, spaghetti bolognese, pasta carbonara, lasagne, as well as traditional British favourites like shepherd’s pie.”

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Jimmy Mark, MD of Saladworks, gives Ruari McCallion an insight into what makes his company a tasteful choice. Ready meals have been growing in popularity for decades, as the habits and demographics of the UK’s working population have shifted. Most households now have – and need – two incomes, and full-time working is not compatible with sumptuous dinners, cooked from scratch every evening, but the population does not want to give up taste, quality and variety.

A taste of Italy “Ready-meals are broken down by cuisine and Italian-style meals represent a large proportion,” says Mark. “Saladworks is quite a big player in that market, and also in the premium and diet sectors. These products still have pasta as their core and pasta products represents around 70 per cent of our range. Our customers are high street retailers but Saladworks has grown

Food and drink Saladworks

through being prepared to adapt and it is always seeking to find new markets and to both refine and expand its offer. Some things will remain constant, however, chief among them being a commitment to quality — and that begins with recipes and ingredients. “We cook all our sauces on-site,” he explained. “We buy-in our raw materials and get through around 40 tonnes of chopped tomatoes a week. We buy joints of beef from UK sources, which may be from a specific site or supplier, depending on the product and customer.” The Leicester factory minces its own beef. “We believe this gives us a better product – it’s about quality. We have found in the past that mince has ‘clumped’ when we have had it supplied in. We like to be in control of texture and mincing on-site means that we are. We also have ingredients like butternut squash and capsicum peppers supplied whole. Where we believe we can add value by prepping it ourselves, we will. ”On the other hand, the company does not peel onions, nor does it wash or peel potatoes. It doesn’t have the infrastructure to deal with the starch byproduct, so it leaves it to those who are better-equipped.

to the sauces or packed separately, depending on the meal being prepared. ‘”Ready-meal factories are actually quite complex operations,” he continued. “One finished product may have four, five or more components, which means that we will have a number of operations in progress, which all have to be brought together at the same time. Macaroni cheese is quite straightforward but, at the other extreme, we have dishes that consist of sauce with vegetables, meat, a

A bit of sauce Some chefs maintain that it is the sauces that are the crowning glories of any meal. Saladworks takes its raw materials, batches them and cooks them in 8 kettles, of varying sizes, and three ovens. Meat may be cooking in one, vegetables in another and potatoes could be cheerfully roasting away in a third. Rice is prepared in measured bags, with a prescribed amount of liquid for a perfect finish. There are also three machines for blanching vegetables and pasta. “Vegetables or dry pasta will be transported into the cooking chamber and held for a set period of time, depending on what the ingredient is. Broccoli is different from carrots, for example,” Mark explained. “They then go to a quenching chamber, where they encounter cooler water, and proceed to a chilled water chamber, where they remain for a period of time before being dispensed to trays and tubs. It’s a cook/ quench/chill method. Vegetables are blanched, chilled and are ready to use. The pasta goes in raw at one end and comes out cooked and ready to pack at the other.” Vegetables may be added

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Where we believe we can add value by doing it ourselves, we will do it sprinkling of cheese, another mix of vegetables – maybe up to eight raw materials that come together.” Some manufacturers, with bills of materials running into hundreds and thousands of components may raise their eyebrows at the idea of five to eight components constituting ‘complex operations’ but it has to be borne in mind that prepared and cooked ingredients cannot be put on a shelf until the product is ready to receive them. Perishable items cannot be left lying around.

Timing is everything “Planning and scheduling is very important, all the way from when produce arrives,” says Mark. “Meat is minced and left to rest before it is cooked and cooled. We arrange for pasta to be ready at the same time as the sauces. We don’t use preservatives; we rely on chill chain management and hygiene standards and have a strategy based on critical control points (CCPs), to manage food safely throughout the process. Our products are stored at less than five degrees C, which ensures the shelf life. Delivery is by chilled lorries, which are maintained at three degrees. The supermarket shelves are kept at three to five degrees – we rely on the chill chain being intact.” Generally the raw materials received in the morning are cooked in the afternoon and assembled into finished products

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overnight or the next morning. “Some beef, for example, needs to be 14-days matured, which dictates our ordering from the abattoir,” he continued. And that timetable can be challenging. “We are ordering meat today, which we will use in two weeks - but we don’t know what the orders will be! That makes the forecasting from our commercial and planning teams very important. We need the right amount of packaging and stock — if we have too much we have to throw it away.” Although Saladworks has only been in business for seven years, it has just as much experience in the ready-meal business as most of its competitors. That comes from a combination of its own experience and the accumulation of knowledge within the Samworth Brothers group. “Most of the companies in our supply chain have been in the business as long as we have. They have grown up with it and recognise what is required,” says Mark. “Good relationships and strong communications are important. We communicate our stock control schematic with our suppliers’ stock control people daily.” A lot of the supplies are sourced locally, although pasta comes from Italy and chopped tomatoes originate in Spain.

Lean forecasting “A lean supply chain is about getting forecasting right, ordering right and delivery time’s right,” he explained. “It’s quite a precise science — we get anything up to 35-40 deliveries a day. All deliveries are booked in advance — some are for materials we need at a certain time, in order to get the process through.” Packaging is bought-in and is mostly microwavable or oven-tolerant C-PET. Most products have cardboard sleeves, ordering of which is also a sophisticated process. “We don’t want too many at any time — a product line might be delisted by our customers and we would not like to be left with 10-12 weeks of stock! Six to eight weeks’ supply is the norm.” Ready-meals enjoy pretty steady demand, year-round, although some particular lines may see a seasonal dip from time to time — fewer people are interested in shepherd’s pie in the summer, for example. That means that labour needs are also pretty steady, which removes one headache. Five years ago, when Saladworks moved into ready-meals, forecasting relied heavily on the retailer customers. Now, the company relies more on its own experience; it understands pretty well what the forecasts look like. “When we have a new product launch, we still use retailer information, primarily,” he continued. “A product may, for example, be launched into 300 stores, at 10 units per store.” Deliveries are made seven days a week. “Less stock is ordered Sunday, Monday and Tuesday, then there is a significant pick-up on Wednesday and Thursday, ready for the big sale days, which are Friday and Saturday.”

People power Saladworks’ operations are largely manual, rather than being automated, which fits in with the factory itself. When it was originally constructed, pre-packed salads were the intended product and the level of automation was not as high as some other areas. This turned out to be a benefit, as the switch to ready-meals was not complicated by the presence of specialised machinery.

Food and drink Saladworks

“We have people and that is one of our core strengths,” says Mark. “We assemble over 100 different products a day, so changeovers are key. We don’t want big automated lines, for that reason.” Saladworks’ standard ready-meal production runs can be quite short — maybe just half an hour or so in some cases. “We don’t want to spend a lot of money on equipment that won’t pay for itself. People are flexible – but we are looking at automation where we can drive efficiency. As the business matures the range inevitably expands to include products that lend themselves to automation. The factory is big enough, if we develop core products that are produced in volume.”

Investing in improvement Saladworks has invested in increased capacity at its Leicester plant and has plans for improving efficiency. “Really, we are just getting started on formal business improvement processes,” says Mark. “We have over 60 of our team leaders and front line staff going through the process. Over the next six months, four groups of 16 front-line operatives will be progressing towards NVQ qualifications. We are not calling it black belt, Six Sigma,

Ready-meal factories are actually quite complex operations

Lean or World-Class Manufacturing, we want to keep it simple, with small, incremental continuous improvement steps.” Saladworks is using a training provider and has obtained some government funding for its NVQ courses. The ultimate objective is always customer satisfaction, which applies to both the end consumer and the retailer. “We have a very open, very involved relationship. It’s about quality and customer service, so we are continually talking about getting the basics right,” says Mark. “As we get continuous improvement bedded in, we will get more efficient at making our products, improving yield and cutting waste. We are passionate about this, we aren’t seeking to change things overnight – we want it to be driven from the bottom up. We’re focused on getting things right, delivering 100 per cent service to our customers, ensuring health and safety standards and delivering consistent quality. Our change of direction five years ago was about quality and service. It still is today.”

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Getting on business New Gripple C-clip for Catenary Wires

Jane Gray talks to Mark Edmonds, managing director of Gripple, the award winning manufacturer of construction products, to find out what differentiates the entrepreneurial company from its competitors and what new opportunities are now in its sites.

For

those as yet unfamiliar with The Manufacturer magazine’s 2010 winner of The Manufacturer of the Year Award for People and Skills and the proud recipient of a 2010 Queen’s Award for sustainable development, here is a brief history. The company has evolved since its establishment in 1988, when founder Hugh Facey developed a new wire joining device for the agricultural industry. Over 20 years later, Gripple is now a global market leading

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manufacturer of wire joiners and tensioners, anchoring and suspension systems, pipe clamps and a myriad of other products, primarily sold into the commercial construction industry. Despite the fluctuations of this notoriously volatile market, steady growth has become a firm characteristic for Gripple thanks to the company’s eager approach to identifying market prospects around the world. Gripple now exports 90% of the products produced at its three Sheffield sites to foreign markets with expanding commercial construction opportunities, and has established local production facilities in Chicago and New Delhi. Another plant in Brazil is planned to open later this year. Mark Edmonds, Gripple’s MD explains the growth pattern: “Growth in the commercial construction sector has provided a road map for our own international expansion. The range of industrial suspension systems has grown very rapidly, driven by customer needs in many different countries and now makes up around 70 per cent of our business. We have chosen to launch in New Delhi and San Paolo this year because of the dramatic and on-going developments in their built environments, and we are working on our plans for Russia and China. We are not investing in these new sites for reasons of manufacturing cost quite frankly that is irrelevant in our decision making. We are investing because we need to be close to our customers and to be able to respond rapidly to their local needs.” “International expansion is no trivial matter for Gripple – this is not an out sourcing exercise and the fact that a new factory may be located thousands of miles from the company’s homeland is not, as far as Edmonds is concerned, an excuse for compromising on Gripple’s

Construction products Gripple

well established business ethos and relationship with its staff: “Everyone who works for Gripple is a direct Gripple employee and in fact they are now all share holders as well. We do not discriminate based on location so this will be the same in India and Brazil. Equally, all the new sites, wherever they are located, will have the same DNA and be founded around the same Gripple family principles. We will expect the same standards to be maintained in every factory around the world. “We take our brand and our culture very seriously and it can be a challenge to take this into a new environment but I think we are managing pretty well. We parachuted in UK employees for the establishment of the Delhi and Chicago sites, and although we are employing local people for the set-up in Brazil, these employees first had an extended introduction in Sheffield in order to marinate them in the culture here. We welcome the influence of national cultures, and this has blended well with the global characteristics of commitment and excellence which are

rooted at the Old West Gunworks in Sheffield which has been, and always will be, our mothership.” One of the defining characteristics that makes up the Gripple DNA is the company’s commitment to open plan working. There are no closed offices at Gripple – a policy which the company firmly believes in to foster productivity and innovation, the latter being the lynchpin in organisational strategy. Edmonds comments: “We have a target to generate 25 per cent of our sales from products less than four years old, so we are always looking for new ideas and do not allow ourselves to rest on our laurels in terms of aging products and technologies. Each year we invest a figure close to 5 per cent of our top line in Ideas & Innovation – we have to keep feeding the innovation machine, otherwise businesses can starve.” Edmonds says Gripple has built its success on a culture of excitement about the future, on an ethos that looks at uncertainty and sees opportunity not danger. It is an attitude that carried the company through the recession in 2009 when UK commercial construction came to a virtual standstill. Recognising the importance of nurturing patentable ideas and encouraging staff to engage creatively with the future of the company (in which of course they have a financial stake), Gripple has recently invested in an upgraded 5000 sq foot facility for Ideas and Innovation in Sheffield. Edmonds says “The key to growth will always be new products and new applications. This will be true no matter how much the commercial construction market fluctuates.”

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A technician performs quality checks on a part

Engine of

growth needs a best in class filter

As pressure on the UK divisions of foreign companies to perform increases, Will Stirling meets a German company in the UK beating its European competition to win contracts. Its secret? Operational Excellence, yes, but also its total commitment to the professional development of its workforce. This above all, says managing director of MANN+HUMMEL UK, Ivor Ng, gives his company the edge.

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Manufacturing

output is in the ascendancy and one reason for this is that UK-based manufacturers are obsessed with productivity. They need to be, as the UK divisions of foreign-owned companies have to compete for work both with other companies and with the European sites of their own parent organisation. The pressure to hit productivity metrics and delivery targets is even higher when sites across Europe are competing more fiercely than ever with OEMs who have no regional loyalty. MANN+HUMMEL (UK) Ltd (MHUK) is a good example of such a company. The parent, original equipment supplier MANN+HUMMEL Group, employs 13,000 people at 41 locations worldwide and posted a record turnover of Eu2bn in 2010. MHUK makes filtration systems and plastic components for automotive OEMs and industrial applications and provides aftermarket distribution for the UK and Ireland. For OEM production, Europe is the larger market – the Volkswagen Group is its biggest customer. MANN+HUMMEL has factories across Europe, where some would have a location advantage over MHUK and certainly a labour cost advantage in countries like Bosnia. Yet MHUK has won new business from European customers this year. How? “We need to prove that we are better, in terms of quality, in terms of efficiency, in terms of service and speed,”

Filtration systems MANN+HUMMEL UK

MANN+HUMMEL(UK) Ltd at a glance Location

Wolverhampton (240 employees), Chard in Somerset (60 employees)

Sector

Automotive

Main products

Filters – air filtration systems, intake manifold systems, expansion tanks, fuel filtration components and associated components, mainly injection moulded. Centrifugal oil filter systems (Chard)

Employees

300 in the UK

Turnover

£65 million forecast for 2010. This would be a record for the UK division. MANN+HUMMEL group Eu2bn worldwide in 2010.

Key productivity metrics

HSE; Quality focus with zero time defects (full-time team); CI; Lean principles implementation; Zero non-compliance in TS16949 certification; internally benchmarked Supply Chain Management; Benchmarking within the Group shares best practices

Main business improvement system

MANN+HUMMEL Management System (internal)

Awards

Investor in People Gold Award, Wolverhampton Employer of the Year, EEF South West Region (Chard site).

Collaboration with education

Partnerships with City of Wolverhampton College, the University of Wolverhampton and Polymer Training and Innovation Centre

says managing director of MHUK Ivor Ng. “This year we have won major contracts with auto OEMs to secure the manufacturing base in the UK in the mid-term, even as some of our current projects are ramping down – we have secured replacement business for the existing high volume work, against European competition.” How exactly has it done this? Mr Ng distils the reasons into two main parts: corporate culture and Operational Excellence. Neither of these are unique to manufacturers, but the efforts poured into both have delivered external recognition for MHUK for people development, as well as the ultimate prize, new business. Large companies often have their own proprietary system of business improvement, which for manufacturers can be a rebranded interpretation of ‘The Toyota Way’ or TPS. MANN+HUMMEL Group devised the MANN+HUMMEL Management System, or MMS, as an internal business system and lean programme, aimed at achieving world class manufacturing standards. In 2003-2004, it rolled this out globally.

People development Putting culture at the heart MHUK has made its people a core business pillar. This costs time and

money, but the decision has paid off. In 2010 MHUK was awarded the ‘Investors in People’ Gold Standard, a standard achieved by only 2% of the companies who apply. On December 10. MHUK was named Employer of the Year 2010 by The City of Wolverhampton College. It is one of six finalists in the Midlands Excellence competition in the Training and Development category. “Our entries for these awards always cover the whole approach to training and staff development, not just on one area or programme,” says chief financial officer Neil Davies. Internal promotion is a big part of MHUK’s people focus. “We’re proud that almost the whole management team has been internally developed and promoted,” says Ng. “Neil, who was recruited externally due to specialist expertise, is the one exception but everyone else, myself included, has held previous positions within MANN+HUMMEL UK.” This fortifies employee loyalty and focus, Davies says, with labour turnover year-to-date at just 0.66%. The company has a Management Leadership and Development Programme which appears to be working – 57 employees or 43% of the staff have been promoted at some point since they joined MHUK. Absence rates, year to date, are 1.6% while the (automotive) industry average is 2.7%. It seems that employees at MHUK are keen to come to work, put in full days and want to stay here. Several programmes have contributed to this success. The company has a Learning and Development (L&D) model which aims to recruit, develop and retain the right employees in the right jobs in order to achieve MANN+HUMMEL Group business objectives. Part of this is to develop MHUK into a learning organisation and an employer of choice, i.e. “a great place to work”. In 2002 the company first chose to be assessed by an external auditor against the independent ‘Investors in People’ (IIP) standard, which provides a benchmark of HR management

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strategies and practices. MHUK has held the IIP accreditation ever since and was awarded the IIP Gold standard in 2010. “It’s important to know, this is based on employee feedback,” says Mr Ng. “The auditor is not just talking to the directors, but 25 per cent of our workforce were interviewed for this.” It has made employee empowerment one of the pillars of its Learning & Development model. A good example of this was in 2007 when the plant layout was reconfigured following a thorough workflow analysis, comprising building several one-piece flow cells and a one-way “train track” for inventory delivery and collection. Staff at all levels of the organisation were fully involved in the planning process and in moving and locating the equipment, including at weekends, so when the finished lay out was installed they had true ownership of its design and function. By December 8th, MHUK had delivered 764 training days to staff

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ZERO DEFECT TEAM with support from Management and Directors

(shop floor and administration) year to date, and it also runs an Employee of the Quarter Programme. There are currently seven apprentices at the company. The apprenticeships map out a clear career path which includes continuous educational and technical support throughout. MHUK has a clear business and education support mandate, where it offers factory tours to other local businesses where its work in continuous improvement in manufacturing and corporate culture are showcased to third parties. It also delivers and participates in seminars and job fairs for local universities. It has close ties with local Wolverhampton higher education, supporting Wolverhampton University Business School’s Human Resource and Development course by offering a placement within MHUK. And it partners with City of Wolverhampton College on its apprentice programme, and on the Skills for Life initiative which offers regular training sessions to operators and staff alike in Wolverhampton site. MHUK also runs incentive bonuses, occupational health courses and hosts an annual family day in the summer, all in an effort to get the best from its extremely loyal workforce.

Return on investment How does it measure the return on this investment? For one energy consumption and saving exercise, the company

Filtration systems MANN+HUMMEL UK

tracked the hours invested to train and invested in the time spent on the project. It totalled the hours at a rough cost of £20 per hour and added the training materials cost. Savings were in cost avoidance – the measured Climate Change Levy – and in reduced energy consumption of 555,600 kWh. The net saving less costs was over £50,000 p.a. Ivor Ng says the loyalty and high promotion rates pay off also in achieving productivity targets, where staff and operators are always prepared to give that little bit extra to meet a target as they are proud to be part of the MANN+HUMMEL family. MHUK had to lay off 45 employees during the crisis in 2009. The company is now hiring again and over a third of those redundant staff have been rehired. “It’s interesting that the ‘Investor in People’ audit, which is employee-led, was carried out just after the cutbacks and we still achieved a Gold standard,” says Ng. MHUK’s other manufacturing site in Chard, Somerset implemented short-time working to minimise redundancies,

which operated on a bank system. The time not worked was banked and employees were given an opportunity to make up for those hours that were banked, as business hours recovered. This won Chard the EEF’s South West Region award. Mr Ng emphasises that some parts of MANN+HUMMEL’s HR programme are group initiatives but several are devised within MHUK, such as the Management Leadership and Development Programme.

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MANN+HUMMEL UK Operational excellence World Class Manufacturing – the MMS way The second pillar for MHUK’s business after HR is Operational Excellence, the area which Ng says needs continual focus to compete at greater cost parity with Eastern European and other low cost countries. The company has broken down the component parts of its business to achieve what it perceives to be world class manufacturing standards. MHUK’s World Class Manufacturing structure, rolled out by Group in 2010 under the name ‘Production Basics’, forms a circle with five interlinking components: People Development (see above) Safe, Organised and Clean Work Area Robust Processes and Equipment Standard Work, and Rapid Problem Solving Some of the parts of this Operational Excellence model are familiar, such as targeting exemplary health and safety records and using Continuous Improvement tools. But MHUK has also created a full-time Zero Defect Team, whose job it is to scour the UK sites for any product defects, trace the source of defect and eliminates it. Filtration systems and technical components, by their nature, need to fulfil the highest technical specifications. Large orders from the auto OEMs are contingent on super-high product reliability. For serial production of the volume items, part of MHUK’s competitive advantage lies in material flow and low inventory. “Many of the tools you’d find in the Toyota system come out in the MMS System – kaizen rules, value stream mapping, kanban systems,” says Plant Manager at Wolverhampton, Paul Chapman. “The UK needs to be ‘best cost’ – in the last six years we’ve concentrated a lot on material flow through the site, with a high emphasis on logistics and removing waste from our processes.” Mr Chapman demonstrates the U-shaped factory lay out, parts delivered in one end and smooth flow through the production zone via assembly cells into finished goods. This is fed on a simple pull-flow system, with a specific stocking profile for finished goods. “When a customer takes a single box, it sends a message to production to make another set.

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When a box of parts is close to empty, it signals to the materials department to replenish – we are aiming to keep inventory to a minimum using pull flow systems to control our production.” To improve Health and Safety and reduce waste, forklifts are banned in the production zone, and are only used in finished goods. Everything is collected and delivered on a train system, where the driver has an optimum cycle takt time. “Material flow is fluid, all collections and replenishments are made on an 18-minute cycle,” says Chapman. “As long as I have the set level of stock in finished goods it will control production and allow us to meet any fluctuations in demand we get.” Low volume orders of discontinued parts, where batches can be in the 10s of units, are produced in a separate OES production cell which is isolated from the volume manufacturing lines. MANN+HUMMEL may support parts for certain models (auto and industrial) for between 10 and 20 years after it has ceased production. Kaizen and Value Stream Mapping have been done to the nth degree in MHUK’s production cells, to establish the best cell configuration and the optimum working position of the operators. “This considers both health and safety and lean concerns, giving good ergonomic design and reducing waste in excessive movements,” says Paul Chapman. Lean is good, but Ivor Ng acknowledges that being very Lean on inventory puts enormous pressure on the reliability of the processes and the supply chain, to ensure customer deliveries running on such low levels of stock.

Clean means lean The Safe, Organised and Clean Work area basic is essentially 5S with some important additional parts; there is a health, safety and environment committee, each department has a qualified representative and there are regular risk assessments. Zoning demarcation within assembly cells is very heavy at MHUK, “so equipment that is out of position flags that we are running away from process,” says Chapman. It’s a fine level of analysis, but it is done to eliminate defects. MHUK also uses techniques like the 4-eye principle and 5Y and 2H approach to identify root cause. Crucially, for the staff, there is also a monthly bonus incentive to keep working areas in 5S perfection, and results are displayed clearly in the factory. Combining, and crucially synchronising, all the components of the MANN+HUMMEL Management System, expressed as MMS Production Basics, at Wolverhampton and Chard, is a big challenge. But it is working, exemplified by new and big orders. For example, MHUK recently won the contract to provide a large European OEM with all the air filters for its new vehicle platform, launching in 2011. Ivor Ng, Neil Davies and Paul Chapman are convinced that this success can be credited to the company’s efforts driving People Development and the Operational Excellence components like Robust Processes and Equipment and Standard Work. Is inter-site competition healthy, for M+H Group? Its part of the natural sporting culture in the UK, says Ng. “Whenever we are benchmarked against other sites, we like to win. Or if we don’t win, to know why not and where we can improve.”

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Answers for industry.

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