HOT TOPIC Confident for 2014? A review of New Year reports and surveys
Manufacturing Leadership We can rebuild him Talking productivity, reshoring and exports at the EEF National Manufacturing Conference 2014 AIA awareness Why aren’t manufacturers making the most of investment incentives?
Manufacturing Technologies Standard Errors UL standards are tripping up exporters of machinery to North America Prepare for Industry 4.0 What’s the technology readiness?
IT in Manufacturing Not your father’s CRM Pushing the envelope of CRM performance
ALSO IN THIS ISSUE Women in manufacturing Skills Gap programme update Technology trends for 2014 In partnership with:
The UK’s relationship with its biggest industrial employer INTERVIEW Dr David Landsman OBE Director, Tata Ltd
www.themanufacturer.com | February 2014 | Vol 17 Issue 1
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Welcome
Editor’s Introduction
And they’re off!
The coming of the New Year sounded a starting pistol for business. January felt like being part of a frenzied land rush as firms put faith in the stabilising economy and grasped hold of opportunities (p28).
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Reports of business vibrancy have come from all stakeholders. Business owners, banks, trade bodies and government. They have all approached with news of big orders and new projects. From the finance world came confirmation that requests for investment support sky rocketed – most encouragingly, there has been a notable increase in enquires to support capital investment, according to our sources. It is crucial now that the banks respond to those enquiries with funding propositions which make sense to manufacturers. They must show they have spent the recession re-educating themselves about what manufacturing businesses need. In an interview with James Pozzi last month, Mark Eastwood, head of manufacturing at NatWest, assured that product innovation is taking place (bit.ly/MarkEastwood). And NatWest’s relationship managers around the country certainly sharpened their understanding of manufacturing in January as ’s Nick Hussey and Henry Anson toured the regions with presentations to clarify what a competitive industrial base in the UK should look like – its needs and its potential. Making sure that manufacturers, whether they need finance or not (midsized firms are sitting on £800bn), are able to make good on their investment intentions is crucial if we are to make this new found optimism count in the long term. Strategic investments in manufacturing technologies, as well as skills and innovation, are fundamental to increasing UK productivity, prosperity and competitiveness (p20).
Take a look behind the scenes of Tata, the UK’s largest industrial employer. (P32)
At EEF’s National Manufacturing Conference on March 4, investigation of the “productivity puzzle” will underpin discussion of reshoring and export growth. It promises to be a provocative day led by some engaging industry
figures, and with the ear of government, it’s an important platform to be on (p52). Seeing and being seen. Networking can sometimes seem like a distraction to business leaders. But as Paul Everitt pointed out at ADS’ Annual Dinner at the end of last month, robust communication lies at the heart of competiveness – and this includes communication with all stakeholders in the business and industrial community – not just with your supply chain. The huge competitive potential of becoming a better networked, connected industrial community was the topic for debate at the recent thought leadership dinner I attended in Cambridge with analyst firm Cambashi (p70). Delegates there were serious about unlocking the value of business ecosystems. This is a complex challenge and one which will require open mindedness they found, but there was real excitement about the idea of revisiting competitive propositions and formulating new operational infrastructures to support them. Such ambition is of a piece with the movement towards servitization, the Internet of Things and the flexible factories of Industry 4.0 (p58). Expect to hear more about them all in 2014.
Jane Gray Editor
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 1
Editorial Advisory Board
The Editorial Advisory Board Next generation guidance for
Deirdre Fox Director of Strategic Business Development, Tata Steel
Hywel Jarman Director of External Affairs, EEF
’s editorial advisory board provides insight into the real concerns and interests of manufacturing leaders. The board guides the editorial team in developing relevant, accessible and useful content which can help British industry keep competitive. With the challenge posed by skills gaps and talent retention a key obstacle before this ambition, decided that the board should include direct input from the next generation of industry leaders and so we are pleased to announce the following two additions to the editorial advisory board.
Tony Hague MD Power Panels Electrical Systems and Chairman of the Midlands Assembly Network
Richard Lloyd Global Manufacturing Director, Accolade Wines
Andrew Churchill Managing Director, JJ Churchill
Ben Taylor Assistant CEO, Renishaw Plc
Simon Edmonds Director, the Catapults Programme
Andrew Peters Division Director, Drive Technologies, Siemens
Steve Evans Director of the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability
Pamela Petty Managing Director, Ebac Group
Anna Schlautmann, 21: 3rd Year Logistics Apprentice, MBDA In addition to her apprenticeship, Anna is also studying for a Business Management BA (hons) part-time. She enjoys applying the knowledge gained in her studies to the work environment and is a keen advocate of apprenticeships in local schools and colleges – including those where she used to be a student. Anna believes her hard work in reaching out with careers advice and experience to young people was the main factor which led to her being named ’s Apprentice of the Year 2013. “I am greatly interested in the future of MBDA and I am interested in ensuring that the next generation of manufacturers have the right skill set and knowledge,” she says.
Ross Meikle Quality Improvement Manager, Hayward Tyler Ross laid claim to ’s Young Manufacturer of the Year Award in 2013, when he was a continuous improvement engineer at Hayward Tyler, thanks to his enthusiasm for his job and his willingness to learn. “I think my keenness to take anything head on and with a winning attitude made an impression on the judges,” he says. Ross is now building his expertise in hunting out manufacturing and business improvements and recently achieved his ambition to lead positive change in the business with his promotion to the position of quality improvement manager. His long term ambition is to become managing director of a manufacturing firm. Anna and Ross will join the board for one year, at which point the 2014 winners of the Apprentice of the Year and Young Manufacturer of the Year Awards will take the places.
2 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
Philip Greenish CBE CEO, the Royal Academy of Engineering
To find out more about our Editorial Advisory Board and the work they do to improve The Manufacturer magazine’s offering to its readers, go to: www.themanufacturer.com
How can you deal with the skills shortage? How can you improve quality? How can you grow your business? How can you increase your company’s competitiveness? How can you give your staff greater job satisfaction? How can you decrease wastage in production?
The Manufacturer magazine in conjunction with the leading automation equipment suppliers has established The Automation Advisory Board to educate ownermanagers and factory directors about what automation equipment can do and the benefits it can bring to UK manufacturers.
where the capital equipment could make a profound difference to winning contracts. Companies in non-auto sectors, who are unfamiliar with the range, capability and simplicity of automation kit, need and deserve to know what automation options are available.
Automation needs to rise to the board level in companies of all sizes, but especially larger SMEs
In 2013 it is a business risk not to be informed about the benefits this technology can bring.
Automation is not the question, it is the answer! For more information contact Henry Anson, Managing Director, The Manufacturer E: h.anson@sayonemedia.com T: +44 (0)20 7401 6033 The Automation Advisory Board is proudly supported by: ABB, BARA, Festo, Gambica, Innomech, Kuka, Lombard, Manufacturing Technology Centre, Omron, Rockwell, Schneider Electric, Siemens, Staubli
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ABOUT US
Meet the team Nick Hussey Chairman
Editorial
IT Editor Malcolm Wheatley
malcolm@malcolmwheatley.co.uk
Jane Gray Editor
Nick has 20 years of experience in the publishing industry spanning titles in the UK, US, Asia and Australia. In addition to his commercial experience Nick has also worked in government, spending a year as managing director of Manufacturing Insight, a programme aimed at changing the image of manufacturing among young people. He holds several non-executive directorships and is a founder member of the IET’s Manufacturing Policy Panel. n.hussey@sayonemedia.com
Tim Brown General Manager Tim joined SayOne Media in 2009 after working as a journalist for six years in Australia on a range of lifestyle and business magazine publications. Tim launched a new website for in late 2009 and has interests in the automotive industry and business development. In June 2013, Tim was appointed General Manager of SayOne Media. t.brown@sayonemedia.com
Henry Anson Sales Director Henry is responsible for SayOne Media’s commercial activities, developing new concepts and products for ’s readership. Henry is keen to build a bridge between the manufacturing community and the service sector which supports it. h.anson@sayonemedia.com
Jane joined SayOne Media in 2009 for the launch of the Lean Management Journal, sister publication to . Reporting for , Jane focused on industry skills development features and lean enterprise until she became editor in June 2011. She is a trustee of the D&T Association. j.gray@sayonemedia.com
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February 2014
CONTENTS
08 News and regular columns
Manufacturing Technologies
A summary of manufacturing news and events with commentary on industrial research and policy 17 3D in Focus The world of additive manufacturing - or 3D printing – seems to be coming whether manufacturers embrace it or not. 20 Naked Engineer Is too much talk on skills putting the cart before the horse of industrial development? 22 Lean on me Victoria Fitzgerald takes the helm at LMJ and discusses why great ideas need landing gear as well as wings. 24 Out & About goes to Tata Steel, Autosport International and Pai Skincare 26 Best of Online What you wanted to read about most on ’s website in November 28 Hot Topic: New Year reports What should business leaders make of the splurge of optimism reported in surveys and studies at the start of 2014? 30 Export focus starts a new monitor to track export performance among UK manufacturers 32 Tata Special: Tata and Britain Jame Gray explores the UK’s relationship with its biggest industrial employer and most prolific foreign investor 40 Interview: Ever the diplomat Dr David Landsman, former Ambassador to Greece and now director of Tata Ltd, talks to Jane Gray about long term investment, energy costs and how his career has prepared him for his current role 43 60 second interview: Tom Bowtell, CEO of the British Coatings Federation on UK industrial strategy, REACH and reshoring in the coatings industry
56 Standard errors: Power Panels Electrical Systems’ MD Tony Hague uncovers some common misunderstandings about the electrical standards required for machinery exported to the USA 58 Prepare for Industry 4.0: Dr Graeme Philp calls for industry leaders to map their progress towards establishing factories of the future and sets up debate for the Future Factory: Automate UK conference 60-64 Case studies from the Automation Advisory Board
IT in Manufacturing 66 Not your father’s CRM: Malcolm Wheatley explores how new systems and capabilities are expanding the remit of Customer Relationship Management in B2B as well as consumer facing organisations Other topics in this section: Manufacturing Execution Systems, technology trends and Enterprise Resource Planning 72 Last Word: What David did at Davos. Jane Gray considers the importance of the Prime Minister’s reshoring speech
Pillar features Manufacturing Leadership 44 We can rebuild him: What else do we need apart from technology and capability to make British manufacturing more competitive than ever before? EEF’s National Manufacturing Conference wll focus the minds of business leaders on actions that matter Other topics in the section: The outlook for 2014, women in manufacturing and the image of industry in the public eye
Workforce & Skills 54 Employee of the month: Lucy Stedding, Deputy Production Coordinator, Tata Global Beverages 55 Snapshots: The BAE Systems Apprentice Innovation Challenge and an update on the D&T Association’s Skills Gap programme for teacher training
6 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
OUTBOUND REPORT Energy III 2014: Energy optimisation Energy III 2014: What manufacturers can do to maximise the value they get from their energy against a backdrop of rising prices.
10 tonnes of product. 80 pallets. 5 times a day on the fork lift truck. 0 problems. Frank Miller, freight forwarding company owner
Trust your Machine. Rely on Quality. Your complete peace of mind with the latest technology, many years of experience and German build quality. This comes as standard with our diesel and LPG fork lift trucks, since 1958. www.trustyourmachine.com
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February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 7
NEWS
www.themanufacturer.com/news
Manufacturing technologies
US-based 3D printing company Stratasys launched the first and only 3D printer to combine colours with multi-material 3D printing. The Objet500 Connex3 Colour Multimaterial 3D Printer features technology that combines droplets of three base materials to produce parts with virtually unlimited combinations of rigid, flexible, and transparent colour materials as well as colour digital materials – all in a single print run. The ability to achieve the characteristics of an assembled part without assembly or painting could potentially save large amounts of time for manufacturers. The printer’s designers say the new technology could help product manufacturers validate designs and make good decisions earlier before committing to manufacturing, and bring products to market faster.
Manufacturing demand
British crude steel production in 2013 averaged 228,000 tonnes a week, 23.7% higher than the previous year (184,000 tonnes per week) according to data released by UK Steel, the sector’s trade association. However production remains well below pre-recession levels. Output in quarter four averaged 238,000 tonnes per week, a 1.3% increase on the previous quarter (234,000 tonnes per week) and 23.1% better than Q4 2012 (193,000 tonnes per week). UK manufacturing grew at its fastest rate in nearly three years in the three months up to January, according to the CBI’s quarterly Industrial Trends Survey. The business organisation, which released its findings today, confirmed domestic orders rose, uncertainty about demand fell and investment intentions for the year ahead picked up. In the survey of 367 manufacturers, it found growth in total order books and domestic orders was the most rapid since April 2011. Growth in output also remained solid, albeit slightly lower than that recorded in November and December, while growth expectations among manufacturers was at its highest since April 2012. Figures from ADS showed 2013 was a record year for UK commercial aerospace orders. In the first of a monthly orders tracker for commercial aerospace, trade body ADS showed orders for commercial aircraft leaped 28% in 2013 compared to the previous year. The data also showed that there is now a backlog of orders for 11,000 aircraft and 20,000 engines to support UK jobs for the next nine years.
8 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
The new Objet500 Connex3 Colour Multimaterial 3D Printer from Stratasys. See more on 3D printing advances in ’s March issue.
Reshoring
Prime Minister David Cameron launched ReshoreUK, a new orgnasation to support more reshoring of manufacuturing. Mr Cameron made the announcement at the World Economic Forum in Davos where he stated an ambition to make Britain the “reshore nation” and bring “more of the benefits of globalisation home”. ReshoreUK will be run in partnership by UKTI and the Manufacturing Advisory Service. (Read more on p72)
INDUSTRIAL RELATIONS
More than 5,000 Ford UK workers were balloted for strike action by the union Unite in a dispute over changes to job security and pensions. The dispute centres on the car manufacturer’s hourly paid workforce across five UK sites, who are demanding commitments to job security and calling for improvements to Ford’s pension scheme.
EXPORTS Minister of State for Trade and Investment Lord Ian Livingston launched a new export support imitative. Lord Livingston used a factory tour at digger manufacturer JCB in Staffordshire to issue news of the campaign which is targeted at mid-sized businesses in the UK. “Every
mid-sized business in the country will be offered tailored trade advice and an intensive programme of support to help them start exporting or break into new markets.” The initiative comes following evidence that by focusing on export, mid-sized business can expect to grow their sales by £1.8 million.
MANUFACTURING NEWS
INDUSTRIAL RELATIONS
The threat of strike action at Gaymer Cider’s Somerset facility was dropped following a resolution to a dispute over pay. More than 100 production workers at the Shepton Mallet site have been offered an unconditional 3% pay increase by company owner C&C Group, following claims they had not received a payrise since 2010. The dispute started in January after management made the wage increase offer on the condition of a pay freeze for 2013-14, causing the dispute.
Mary Portas, pictured with the team at Headen and Quarmby’s Greater Manchester factory, helped launch the Kinky Knickers brand in 2012.
NEW COMERS
A new factory manufacturing high-end bicycle components is set to open in the UK this month. Entrepreneurs Cy Turner and Mike McDermid have set up their new South Yorkshire-based company, Bicycle Manufacturing, which they say will become an efficient, cost effective local source of components to UK buyers. They also believe by adopting the latest automated techniques and equipment, the company can rival the mass production facilities in Far Eastern countries such as Taiwan and China, which currently dominate the global bike manufacturing industry.
COMPANY ADMINISTRATIONS
Headen and Quarmby, the 79-year-old British underwear manufacturer backed by retail expert Mary Portas, went into administration with the loss of 33 jobs. The company, which won Portas’ backing after featuring in the 2012 TV series Mary’s Bottom Line, was behind the launch of the Scot’s Kinky Knickers lingerie range. The brand, which secured contacts with some of the high street’s leading retailers, accounted for 25% of Headen & Quarmby’s sales, with the remainder in the manufacturing of nightwear and lingerie.
PLAYING MUSIC? MAKE SURE YOU’RE LICENSED. 77% of businesses say playing music in the workplace increases staff morale and creates a better working environment.* If you play music in your business, it is a legal requirement to obtain the correct music licences. In most instances, a licence is required from both PPL and PRS for Music. PPL and PRS for Music are two separate companies. PPL collects and distributes money for the use of recorded music on behalf of record companies and performers. PRS for Music collects
and distributes money for the use of the musical composition and lyrics on behalf of authors, songwriters, composers and publishers. A PPL licence can cost your business as little as 19p per day. For more information on how to obtain your PPL licence visit ppluk.com or call 020 7534 1070. To find out more about how music can work for your business visit musicworksforyou.com *MusicWorks survey of 1000 people, conducted May 2012.
ppluk.com
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February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 9
NEWS www.themanufacturer.com/news
ACQUISITIONS
Footwear business Hotter Shoes was bought by a private equity firm in a deal worth £200m. Hotter Shoes, based in Lancashire, is the UK’s largest shoe manufacturer. It was sold to Electra Private Equity by rival firm Gresham, which has owned it since 2007. The 55-year-old company currently sells more than two million pairs of shoes a year and employs 1,000 people at its site in Skelmersdale.
Image courtesy of David Brown Automotive
IT IN MANUFACTURING
Dassault Systèmes launched SolidWorks Mechanical Conceptual, on its 3DExperience platform. The new offering was revealed at SolidWorks World in San Diego. Its launch was accompanies by user testimonies from customers who have helped develop the solution in design and test phases. The solution ais to enhance conceptual design capabilities enabling users to quickly capture and develop their ideas digitally and create winning designs that build market share. Read about ’s trip to SolidWorks World in San Diego in the March issue and online.
MANUFACTURING INVESTMENT
Premier Foods committed to investing £20m in a new production and packaging facility for its Mr Kipling products. The investment at Premier Foods’ site in South Yorkshire will safeguard jobs and double capacity according to the firm. With the new line in place the factory will be able to produce 300 million cake slices a year. Jason Ramsay, factory general manager for the Carlton site, said: “This investment is a strong vote of confidence by Premier Foods in the Carlton site and the Carlton workforce.
10 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
NEW COMERS
An all-new, British luxury automotive brand is to be launched in April. Successful British businessman and car enthusiast, David Brown, has created a brand in his own name – David Brown Automotive – to deliver his vision for a new take on the British sports car. The result – code-named “Project Judi” – will be revealed in April and is to be made available for sale in limited numbers. Mr Brown sought out industry talent to create the new car, with the design team led by former Land Rover chief designer Alan Mobberley, while automotive engineering firm, Envisage Group, has developed the car for production. Mr Brown said: “I wanted all the impact and style of a classic sports car, but with modern capabilities and conveniences. This is what I want in a car, but it’s not something anyone really offers. So, I’ve created it myself.” He also confirmed he commissioned a completely original exterior and interior design, sourced from British suppliers for interior trim and materials.
EMPLOYMENT
Rogue employers who do not pay their workers the National Minimum Wage will face an increased penalty of up to £20,000 as part of Government’s crackdown on employers who break the law. Currently employers that break National Minimum Wage law must pay the unpaid wages plus a financial penalty calculated as 50% of the total underpayment for all workers found to be underpaid. The maximum penalty an employer can face is £5,000. Last year 708 employers were subject to fines and forced to pay backdated wages. Year
21 and over
18 to 20
Under 18
Apprentice*
2013 (current £6.31 rate)
£5.03
£3.72
£2.68
2012
£6.19
£4.98
£3.68
£2.65
2011
£6.08
£4.98
£3.68
£2.60
2010
£5.93
£4.92
£3.64
£2.50
free to attend for subscribers of the manufacturer
See website for more details.
Engaging and retaining a skill base in UK manufacturing
Workforce Development
25th february 2014 The Waldorf Hilton, London
Arguably employees are the most critical part of any manufacturing company. Attracting, training and retaining the very best talent will ensure you will remain in a competitive position but this can be the most challenging aspect of any business. This one-day conference will explore best practice methods and latest thinking in developing a skilled workforce that can meet the needs of UK manufacturing in 2014 and beyond.
Hear from leading authorities, including:
The Rt Hon. Lord Baker of Dorking CH
Richard Close, Chief Executive, Briggs Equipment UK Ltd
Carol Burke, Managing Director, Unipart Manufacturing Group
Charlotte Tingley, Manufacturing Team Leader, BAE Systems
Researched and developed by:
Sponsored by:
www.themanufacturer.com/skills2014 @themanufacturer
#tmSkills2014
NEWS www.themanufacturer.com/news
NEWS: F1 SPECIAL
F
ormula 1 fans around the world watched intently in January as months of uncertainty about design and performance changes to their favourite teams’ cars were revealed. The engines have been downsized from a 2.4 litre naturally-aspirated 750 BHP V8 to a turbo-charged 1.6 litre V6. These major changes accompanied with a raft of aerodynamic and design change regulations has made the lead up to the kick-off of the 2014 season one of the most anticipated in recent F1 history.
Force India
The first team to unveil its 2014 charger – the VJM07 – the Silverstone-based outfit made bold new changes to its livery which will make it stand out aesthetically from the pack this season. But it will be the engine that will be the real focus for Force India this year. After finishing sixth in 2013, the team has started to make a name for itself in Formula 1. Technical director, Andrew Green, said: “Almost every single part is a new design, from the front wing right back to the diffuser. The genetics of the VJM07 still lie in the 2013 car, but we’ve had to achieve the same results in a slightly different way.”
The Redbull team is wary of the impact 2014’s F1 engine requirements will have on its performance. Image courtesy of Getty Images
Red Bull
The RB10 race car was the most anticipated unveiling of all the teams. Red Bull has been at the forefront of pushing technology and design in their racers over recent years and with such drastic changes to the rules in 2014, this year’s Red Bull challenger was going to be no different. However, team principal Christian Horner said he was wary of the impact the new engines could have on the team’s performance. “I think the key elements this year are obviously the engine is going to be a crucial factor. I think that reliability of the power units is going to be critical and I think that obviously whoever has the most powerful, reliable power unit is going to come out on top.”
Williams
The Oxfordshire-based outfit has a lot to live up to in 2014. It was the first team to reveal computer-generated images of its car’s front nose cone while the major aerodynamic regulatory changes to this part of the car in 2014 meant a lot of teams kept their designs very much under wraps. However, it is obviously something Williams believes will be an advantage to the team this year after the mid-season signing of Pat Symonds to the role of Chief Technical Officer was followed by five key technical arrivals from leading rival teams over the winter.
12 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
McLaren
The Woking-based team has not had the smoothest run into the 2014 season. The MP4-29 was unveiled in a low-key online event without a title sponsor. The team also took on a last minute change in leadership, with ex-Lotus team principal Eric Boullier joining McLaren at the eleventh hour in the same role. The move will either go in one of two ways - the disruption could push McLaren even further down the constructor’s board, or Boullier could impart some of the knowledge that saw his former team wipe the grid with McLaren last season.
MANUFACTURING NEWS
Dates for your diary Ferrari
Arguably the team with the most to prove, it will no doubt be a rollercoaster of a year for Ferrari and its F14-T race car. The team has not won a championship since 2007, and with the raft of technical changes in 2014, this could be the year the team makes its comeback. Ferrari was the first manufacturer to reveal a car that didn’t feature the “anteater” style nose cone, instead featuring a more subtle, “vacuum” style shape, similar to close rival Mercedes. But it will be the relationship between former world champions turned team mates, Fernando Alonso and Kimi Raikkonen that could be the determining factor to Ferrari’s success.
Mercedes
Mercedes was the first team to hit the tarmac in its new W05 race car in front of a live audience in Jerez, signalling the Brackley-based team’s enthusiasm for the 2014 regulation changes. Coming off the back of a successful second place standing in the 2013 manufacturer’s championship, Mercedes executive director Paddy Lowe has been very forward in expressing his enthusiasm for rising to the challenges set by the new rules. “For 2014, we have probably the greatest change in regulations in F1 history and the start of a new era for our sport,” he said. “From a technical, and also a racing, perspective, this is an incredibly exciting time for F1.”
Lotus
The biggest news for Lotus is the departure of team principal Eric Boullier to McLaren. Whether his departure was a contributing factor or not is still unclear clear, however the Enstone-based team held off testing at Jerez, waiting until the Bahrain round of testing on February 19 to unveil its car in the flesh. The team did, however, make a surprise unveiling of its 2014 charger – the E22 – via Twitter only moments after McLaren launched its racer online, making it clear that a strong rivalry between the two manufacturers would be a certainty in 2014.
MARCH
3-4 4
The World Food Technology and Innovation Forum takes place in London. This year’s content and debate themes include: extending shelf life, new product development methods, managing health claims and more. www.foodinnovate.com EEF’s National Manufacturing Conference takes place in London. Key themes at this year’s event are reshoring and exports. The conference puts the policy and regulatory landscape for UK manufacturing into perspective and highlights how to leverage knowledge of this landscape for competitive advantage. Find out more on p44 or online at www.manufacturingconference.co.uk Resource, the first in a new annual series of events for the recycling industry, takes place in London. With the strap line ‘Realising the opportunities of a circular economy’ this event promises attendance from waste management giants Sita UK and Biffa as well as manufacturing and retail names like Proctor & Gamble and Marks and Spencer. www.resource-event.com The Birmingham NEC plays host to Foodex. This exhibition is targeted at the food processing, packaging and logistics industries. Updates on the latest legislative requirements add to the offering of product displays and networking opportunities. www.foodex.co.uk
4-6
24-26 APRIL
7-11
MACH takes place at the Birmingham NEC. Organised by the Manufacturing Technologies Association, this exhibition of machine tools and wider manufacturing technologies has dedicated OEM and skills zones among others. See ’s March MACH supplement for more exhibitor and industry trend information. www.machexhibition.com Five exhibitions – Airtech, Drives and Controls, Fluid Power & Systems, Plant and Asset Management and European Offshore Energy will co-locate with MACH at the Birmingham NEC providing a comprehensive view of industrial capability and technology developments. The following link will give access to information on all these events: www.airtech-expo.com
8-10 MAY
13 14-15 20-21
The Institute for Manufacturing Briefing Day takes place at the IfM building in Cambridge. The day is designed to bring together senior industrialists and policy makers to update them on recent research and applications from the Institute. www.ifm.eng.cam.ac.uk/events/ifmbriefingday Medtec takes place at Olympia in London. This event for medical device manufacturers includes a conference programme covering technology and regulatory updates for industry. Over 100 exhibitors are expected in 2014. www.medtecukshow.com The National Manufacturing Debate is hosted by Cranfield University. This year’s theme is ‘manufacturing productivity’. bit.ly/CranfieldNMD2014
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 13
UPCOMMING EVENTS
Social Media and LinkedIn for Manufacturers
30th January - Manchester, 27th February - Newcastle, 20th March - Birmingham & 17th April - Glasgow
Social media is absolutely everywhere and you have probably wondered what it means for your company and how you can effectively utilise it to grow your manufacturing business. Correct use of social media will provide you with an
improved channel to target potential customers and strategic influencers. Fact: manufacturing companies can reap the same benefits of social media just as any other company.
www.themanufacturer.com/social-media
20/02/2014
Factory Tour: Winners - SME Manufacturer of the Year 2013 (Under 125 employees) 20th February 2014, Andover, Hampshire
Preformed Line Products (PLP) has been manufacturing in Andover for over 50 years, providing equipment for national electricity grids and power utilities across the EMEA region.
Join this factory tour to discover how they won the SME Manufacturer of the Year 2013 (under 125 employees).
www.themanufacturer.com/factory-tour-winner-sme-2013
25/02/2014
Automate UK Future Factory Series event
25th February 2014, The Waldorf Hilton Hotel, London
An essential one-day conference to attend if you are thinking about or already automating your factory. The UK is lagging behind the world
FREE to attend for subscribers of The Manufacturer
in the race to automate. Find out how you can close the gap to improve your processes, cut costs and become more globally competitive.
www.themanufacturer.com/automateuk2014
25/02/2014
Workforce Development Future Factory Series event
25th February 2014, The Waldorf Hilton Hotel, London
It is well known that the UK manufacturing sector is suffering from an ageing workforce combined with the need to attract, recruit and develop over 80,000 engineers, technicians and scientists in the next three years. This one day event
FREE to attend for subscribers of The Manufacturer
will focus on workforce development, equal opportunities and the importance of changing the perception of manufacturing to the wider world to ensure the industry attracts the very best talent.
www.themanufacturer.com/skills2014
20/03/2014
Factory Tour: Winners - The Manufacturer of the Year 2013 20th March 2014, GE Aviation, Wales
GE Aviation Wales was crowned The Manufacturer of the Year 2013 after beating over 150 entrants, winning the People & Skills and overall Manufacturer of the Year awards. This is
an unique one-day event covering best practice and a site tour and was regarded by the judges as ‘...the unsung hero of British manufacturing.’
www.themanufacturer.com/ge-factory-tour
14 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
There’s more to Swindon than you think
Big name brands and SMEs enjoy a vibrant business network, skilled workforce and fabulous connections in Swindon. Change direction and join us.
For a free, bespoke relocation service call 01793 429250 or visit www.swindon.uk.com
APPOINTMENTS
Marcus Bryson
ADS
ADS, the aerospace, defence, security and space trade organisation, announced Marcus Bryson will become its president for the next two years. Mr Bryson takes up the role alongside his position as CEO
Alan Murray
strong governmental relationships will be an asset to ADS as we look to strengthen the economic importance of the UK’s aerospace, defence, security and space industries throughout 2014 and beyond.”
British Safety Industry Federation
The BSIF announced that its Federation Council appointed Alan Murray as its new chief executive officer to succeed the retiring David Lummis. Mr Murray comes to the BSIF with
Jason Price
of GKN Aerospace and Land Systems. He is also co-chair of the Aerospace Growth Partnership. Paul Everitt, chief executive of ADS Group, said of the appointment: “Marcus’ industrial experience and
many years’ experience working in the safety industry. An experienced senior manager, he has worked in a number of organisations including Marigold, MG Safety and Scott Safety and brings
a wide range of experience of both the manufacturing and distribution sectors.
managing director Greville Coe said of the appointment: “Jason brings valuable skills and knowledge to Isotrak. We needed someone with a
real depth of experience and drive to spearhead our ambitious growth plans over the next few years.”
Isotrak
Isotrak appointed Jason Price as sales and marketing director as part of its push to expand global sales and push into new markets. Isotrak’s UK
Matt Bristow, BMW UK Matt Bristow was appointed general manager, corporate sales for BMW UK, succeeding Steve Chater, who has become general manager of product and market planning. Mr Bristow, a chartered accountant, was previously general manager of used cars and internal sales. He has over thirteen years’ experience operating at a senior management level for BMW Group in the UK in financial, operational and sales roles. Commenting on the appointment, Richard Hudson, sales director for BMW UK, said: “Matt brings with him a wealth of experience in retail financial services and leasing and will be working directly with our corporate customers and leasing companies as we enter a period of growth through exciting new model launches.” Judith Hackitt CBE, The High Value Manufacturing Catapult The High Value Manufacturing (HVM) Catapult, which stimulates and supports the commercial application of new technologies, appointed Judith Hackitt CBE as non-executive director to its Supervisory Board. Ms Hackitt is currently chair of the Health and Safety Executive, responsible for all UK policy on workplace health and safety regulation, as well as president of the Institution of Chemical Engineers. She received a CBE for services to health and safety in 2006 and in 2013 She was named First Woman of Manufacturing by Real Business magazine.(For an interview with Ms Hackitt on receipt of her Real Business accolade go to: bit.ly/60SecJHackitt)
To notify The Manufacturer of your company’s appointments, please contact James Pozzi at: j.pozzi@sayonemedia.com or: 0207 401 6033
16 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
Jerry DeMuro, BAE Systems BAE Systems, Europe’s largest defence company, appointed Jerry DeMuro to run its $12bn US operation.He replaces Linda Hudson, who announced plans to retire in August last year. Mr De Muro took on the jobs of president and chief executive officer from February 1. He was previously executive vice president and corporate vice president at General Dynamics, overseeing the Information Systems and Technology unit, after joining the defence contractor in 1999. 4 Appointments, Cosworth High performance automotive engineering group, Cosworth, announced the appointment of four new non-executive directors: Carl-Peter Forster, Adam Parr, Alan Donnelly, and Zak Brown. The experience of this group brings further international automotive expertise to Coswroth, from both road car and Formula 1 perspectives. Mr Donnelly, who has served three consecutive terms as an elected member of the European Parliament will also bring expertise in interacting with government bodies and industrial policy development. Richard Semmens, CAB Automotive Richard Semmens joined Midlands-based CAB Automotive as managing director having stepped on from his position as MD of the Fasteners Division of Caparo Group. Prior to Caparo Richard was MD of Trelleborg Industrial where he worked for over 10 years.
HiETA
Adding to its success
F
The world of additive manufacturing - or 3D printing – seems to be coming whether manufacturers embrace it or not. How they choose to embrace it, however, will determine exactly how influential this technology can be. Mike Adams, CEO at additive manufacturing firm HiETA Technologies explains.
rom its origins in the early 1980’s additive manufacturing (AM) or 3D printing has grown into the next overnight sensation. There is a variety of processes but with the same principle - a product is “grown”, layer by layer, using a 3D digital model, hence the more common description 3D printing. It allows greater degrees of design freedom and from those early days working only in polymers, it has now moved on with the build material including ceramics, metals and composites. AM has been successfully used to shorten the development life cycle by providing a rapid prototyping service for prototype parts and in the support of traditional manufacturing by producing molds, tooling and even packaging. In recent years AM has started moving into mainstream manufacturing, specifically
in dental and medical fields producing dental crowns, copings and bridges. ASDA is even rolling out 3D printing into some of its stores. 2013 could be considered a good year for the additive manufacturing industry. Substantial investment through the Technology Strategy Board (TSB) and other government agencies has pushed it towards full commercialisation. A lot of the investment has gone into SMEs, encouraging burgeoning entrepreneurs. There has been a constant stream of publicity within business press and social reporting driven by progress in the hobbyist and open source communities as much as by mainstream manufacturing. As an example, at the CES exhibition in 2013 there were three machines on display. A year later there were 30.
3D IN FOCUS
This may seem insignificant, but it is creating an eco-system of innovation and development for a new generation of young engineers. Supporting tools (such as 3D scanners) and software are being developed alongside consumer AM machines and materials. This innovation is being developed including intellectual property (IP) protection capability as well as open source builder and development communities. Just as important, particularly for the UK, is that it is bringing design and manufacturing skills back to the next generation of engineers. Significantly for manufacturers, 2013 brought other key announcements that have shown increasing confidence in the process. GE announced that part of their £3.5Bn supply chain will use AM to produce 85,000 units for their new Leap engine. The trend has continued in 2014 with the announcement of £30m to be invested in AM and the Manufacturing Technology Centre (MTC) in Coventry. Aerospace has long been one of the biggest users of the technology, with BAE Systems announcing it is already flying metallic AM parts on its aircraft. AM parts are also moving into the automotive sector. Ultimately AM is a manufacturing technology and its success will come from combining its design opportunities with the reality of its production capability and the demands of its customers. It will fit into the manufacturer’s toolbox in association with existing and emerging processes. It will also drive existing processes and companies to up their game. It will nevertheless still need solid implementation of the manufacturer’s credos of quality, cost, performance and durability to deliver the proposed benefits. Successful exploitation will still require great design skill, knowledge, delivery capability and experience. The challenge for manufacturers is how to acquire such gold dust. To find out more contact Mike Adams at mikeadams@hieta.biz or go to www.hieta.biz
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 17
POLICY POINT & BACK TO SCUOLER
Policy Point.
The outlook’s good for manufacturing Sahar Danesh, principal policy advisor for manufacturing at the Institution of Engineering and Technology, calls for a reinterpretation of the UK’s manufacturing industry.
A
t the end of 2013, growth of the global manufacturing sector was at a 32-month high according to the JP Morgan Global Manufacturing PMI. Within these figures, UK manufacturing performed particularly well, and this year looks set to see continued growth in the sector, which last year grew faster than the economy as a whole. Manufacturing is a vital part of our economy. It employs 2.5 million people, and it generates more than 50% of our annual exports, yet there are large areas of manufacturing that still do not get enough recognition and fall between the gaps of government support initiatives (p43). Today’s manufacturing is often capital-intensive and automated, with a highly-skilled and educated workforce that is smaller in number than the old labour-intensive factories of the past. Many of our older manufacturing sectors have been replaced by industries where margins are greater and our technologies are at the leading edge - in electronics, design systems and services, bioengineering and more. We have also maintained global competitiveness in important sectors such as automotive and aerospace. But in addition to these evolutions of technology, other more fundamental shifts in the way we understand manufacturing have started to bed-in. For instance, the distinction between manufacturing and service sectors used to be clear-cut; manufacturers were responsible throughout the product lifecycle for the conception, design, production and sale of a physical or virtual product, while service sector companies provided the customer with the final service. A significant trend in recent years has been the blurring of this distinction. Manufacturing companies now find new sources of revenue in “servitization” and providing after-sales service and support to customers. Sceptics who persist in saying that UK manufacturing is on the decline do not understand these changes or the huge potential they bring to our nation’s industrial competitiveness if they are harnessed and accelerated effectively.
18 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
Back to scuoler. EEF’s chief executive brings news of a campaign for manufacturing recognition which he intends to be more than just a slogan.
T
welve months ago, the best even the economic optimists could manage was that things wouldn’t get worse and might improve a little. A year on, growth forecasts and house prices are going up and unemployment and public borrowing are falling. In manufacturing, firms of all sizes and sectors are feeling more upbeat. EEF’s 2014 forecast for manufacturing growth of 2.7%, is the strongest in the EU and the second best since 1994. But while the mood in business is now more positive, it is a long way from celebratory. This is no bad thing – past excesses have led to some pretty nasty hangovers. So while a year of steady, modest progress, may not get pulses racing it may be what we need. While bearing this in mind however, we must project a message that gives confidence. We must communicate that, though the slog to recovery may be hard, it will eventually bring a more durable economy which can offer better, more stable living standards. No single sector of the economy can deliver this alone but I do believe passionately that a larger, more vibrant UK manufacturing sector is key to improving quality of life for all. This wider social and economic purpose behind our businesses must be recognised and encouraged by applauding those who invest, create permanent jobs and push to grow their sales at home and abroad. In 2014 we will recognise it in our new campaign Make It Britain. We will shine a light on the traders and innovators that drive our economy forward and celebrate increasing instances of reshoring manufacturing. We will also highlight the opportunities that a career in manufacturing offers young people. Bringing in new talent is the lifeblood of business yet we lost a generation of young people in manufacturing as a result of poor educational policy and planning and as skilled, talented young people were discouraged from following technical and engineering careers. We must claim a generation back! EEF will make sure that those who govern us, in Westminster and Brussels know about this campaign, doing all we can to make it a reality, not just a slogan.
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NAKED ENGINEER
Naked engineer This month’s lashing from industry leadership asks if incessant mithering about skills gaps isn’t putting the cart before the horse of evolving industrial competitiveness.
A
sk any SME manufacturer about the skills issues facing their business you are guaranteed to be drawn into a long, often circular, conversation about lack of funding, skills shortages and the fact the country will end up with more hairdressers than engineers in years to come. Everyone in the manufacturing sector has an opinion on skills and everyone talks about skills gaps incessantly. What confuses me is that, despite all the passionate rhetoric and the government crowing about the increase in the number of young people signing up to apprenticeships, our industry continues to suffer. The number of people starting engineering and manufacturing technology-related apprenticeships in 2012/13 dropped to 66,400 from 69,700 in 2012/13. If you add that there only 46,000 engineering graduates each year for the predicted 87,000 jobs requiring engineering skills each year that will be created up to 2020, things don’t look like improving. And because they don’t improve people keep talking and talking and talking.
20 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
So, right here, in this column, I am going to draw a line in the sand and not enter the debate any further because it’s simply drowning out other important issues for our sector that deserve serious discussion and where action can be taken more tangibly and effectively. The most important issue, that affects all of the others, including skills, is how UK manufacturing can gain a competitive edge that will allow it to succeed on the global stage. Devoting a large part of our time to the skills debate is putting the cart before the horse, because if we don’t create a more competitive infrastructure then we’ll only be training people for a dying industry. In my mind, infrastructure is not the facilities and equipment we invest in. It’s about creating a knowledge-based industry network. You can invest in kit and technology that catches the eye, such as nanotechnology and 3D printers, but these will not set you apart from the competition on their own merit; it will be the knowledge that is applied in using this kit to getting a better offering to your customers than your competitors can. A knowledge-based system will enable a manufacturer to look beyond just production and see how it can expand and evolve into other areas of the manufacturing value chain that can
Devoting a large part of our time to the skills debate is putting the cart before the horse, because if we don’t create a more competitive infrastructure then we’ll only be training people for a dying industry. In my mind, infrastructure
help increase market position and sales. And, to humour the skills debate fanatics, creating a knowledge-based industry will have a dramatic effect on the type of people we need. Rather than recruiting for skills, we should be recruiting for attitude and aptitude. Skills can come later. Skilled people don’t evolve a business. They may be more efficient, but to compete on a global stage, we need to be more than just efficient. Those with ambition, creativity and the ability to think laterally will be required to form the core of the UK’s next generation manufacturing industry. So, the next time someone tries to draw you into the skills debate, ask them first if they’ve considered how their industry might look in 20 years if we don’t change. It might just start a discussion that’s actually worth having.
Enthuse young people to take up vital careers in engineering With not enough young people taking Science, Technology, Engineering and Mathematics (STEM) at further education, many UK companies are facing a skills shortage. Independent, educational charity, The Smallpeice Trust is passionate about closing this skills gap and enthusing the next generation of engineers. Last year, 17,495 students participated in our university-based residential courses, in-school STEM Days and Clubs. Encouragingly, almost 50% of our students were girls. Working in partnership with some of industry’s leading organisations, we offer students an engaging, hands-on introduction to the rewarding careers available to them. A corporate partnership offers a range of benefits including the chance to:
• Build a future talent pipeline and help you to achieve your HR objectives • Get employees involved to boost job satisfaction, motivation and skill development • Enhance your brand and profile amongst enthusiastic girls and boys, their families and their communities • Bolster your corporate social responsibility agenda • Maximise potential for PR and marketing opportunities • Offset charitable giving against company corporation tax From sponsoring STEM Days and Clubs, to mini competitions and residential courses, there are many ways in which your company can get involved with The Smallpeice Trust. Smallpeice corporate supporters include:
“At Babcock, we are very keen to encourage young people towards a career in engineering and the courses run by The Smallpeice Trust are a fantastic way of demonstrating the variety of options open to them as they start to think about their career choices. The wide choice of courses offered by The Trust gives students the opportunity to broaden their horizons outside of the normal curriculum.” Rosemary Prout, Graduate Training Manager Marine and Technology Division, Babcock International Group To find out more about the benefits of being a Smallpeice Partner, contact our Chief Executive, Dr. Kevin P Stenson on 07899 663 280 or email kevins@smallpeicetrust.org.uk.
ARM, Babcock, BAE Systems, EDF Energy, Google, National Grid, National Nuclear Laboratory, Senergy, Southern Water, Ultra Electronics Controls… and many more.
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LEAN ON ME
Lean on me Victoria Fitzgerald, recently appointed editor of Lean Management Journal, explores why lean programmes, like all great ideas, need landing gear as well as wings.
What was in the last issue? LMJ delves into the successes of TM’s 2013 World Class Manufacturing award recipient, Milliken European Airbag Products Director of management consultancy firm One Wigwam, Jeremy Butler, reflects on using lean strategies to turn around his family’s 50-year-old engineering business LMJ’s editorial director, Jon Tudor, catches up with CEO of the Lean Enterprise Institute, John Shook, to quiz him on some tough questions from some of the most prolific manufacturers and lean experts www.leanmj.com
22 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
P
sychological war expert, C. D Jackson once made the comment that “great ideas need landing gear as well as wings.” In other words, there must be a thought for safety, destination and survival attached to the thrill of innovation. Jackson’s advice holds true in relation to lean journeys. Many businesses will comment that they have ‘done lean’ having sent employees on lean training days or courses and put some signs with lean language up around the factory. These organisations have taken off with lean, but their short term commitment often leaves the fledgling programme – and individuals – circling in the air with no place to fix their new found knowledge or enthusiasm. Often this ends in the exhaustion of their verve and the programme, with all its potential for positive change, falls out of the sky. With this metaphor in mind, the March issue of LMJ examines best practice for sustainable lean flight. Exemplary lean companies like Toyota do not take part in sporadic lean initiatives, they cultivate and foster a lean culture that relentlessly focuses on ways to improve value for the customer. For a company to be truly lean; the organisational culture has to shift. Leadership should endow front-line staff with the skills to both diagnose and alleviate problems when they arise. If a workforce starts believing that they cannot achieve what is expected of them, self-esteem can be affected and confidence sent into tailspin. In March LMJ will examine the role of designated lean practitioners in
sustaining lean flight through imparting knowledge and skills to the workforce in a way that allows individuals to develop those skills in line with their environment before passing them on to future generations within the company and beyond. We will hear from lean six sigma black belt and lean coach Karyn Ross, who lives by the mantra “lean should be the way we do our work, not just something extra to do.” Karyn will give us an invaluable insight into her proud lean career and the chain of events that shaped her into the continuous improvement specialist she is today. Karyn’s article will be part of a three piece study of three generations of lean within the same company and how best practices were passed down and personally developed. Karyn’s mentor and fellow lean six sigma master black belt, Leslie Henckler, as well as, Leslie’s mentor Mary Osmolski will share their personal lean journeys and their successes in sustaining and passing on the culture of lean. We will also feature an interview with Karen Martin, president of The Karen Martin Group, who will reveal her secrets on how to make organisational changes that will keep a business lean for the long haul. Finally, the March edition will see the return of the LMJ book review from editorial board member John Bicheno. Lean can and should be something that gets people excited in kaizen events and on training days in the vacuum of a hotel meeting room. But its true value is dependent of something more than the thrill of new ideas.
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Develop your manufacturing business leaders In its 11th year, the MSc in Operations Excellence is a part-time executive programme developed to help your manufacturing leaders realise their full potential and equip them with the skills to respond to change and advances in the operations supply chain. Flexible, focused learning • Inspires professionals who will lead the development of the operations supply chain. • Develops the knowledge required to initiate the implementation of change in business. • Encourages contribution to the transformation of businesses into world class organisations.
To find out more www.cranfield.ac.uk/sas/opsex E: appliedsciences@cranfield.ac.uk T: +44 (0)1234 754086 Manufacturing Open Day Wednesday 12th February 2014
“
The Operations Excellence MSc course is challenging and rewarding. It has encouraged the team to explore and review aspects of our business with new understanding. It is great to be part of such a motivated and enthusiastic team of people
“
• Fosters the skills to build a new strategic perspective.
Alison Price Principle Manufacturing Engineer Rolls Royce
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 23
’s editorial team is out and about at a wide variety of industry conferences, debates and factory tours month in, month out. Let’s get a snapshot of the most interesting trips in January.
Tata Steel Europe’s £15m investment in Steel Park, Wolverhampton is part of a £800m UK-wide spree.
Real Steel
I
Callum Bentley witnessed the mettle of Tata Steel Europe’s commitment to UK manufacturing as it opened its new profiling line in the West Midlands.
t takes real long term commitment and confidence to throw massive investment into a tough environment like the steel industry in Europe. It takes even more commitment to a location’s finer points of attraction to do so when it has the highest energy prices in the region. (p42) But despite the challenges to growing an energy intensive, heavy industrial business in the UK, Tata Steel Europe, part of the UK’s biggest foreign investor Tata Group, has just opened the UK’s largest steel profiling plant just outside of Wolverhampton. The profiling facility is the result of £3.1 million of investment out of a larger £15 million investment in the Tata Steelpark area. Furthermore, this represents just a fraction of the £800m investment programme currently
24 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
in progress across all of Tata Steel’s UK assets. The new plant, which mainly produces steel components for the lifting and excavating market, results from the consolidation of two of Tata Steel’s former steel profiling plants in Cradley and Wombourne. These sites reached their output capacity some time ago and the move to the bigger, more modern site aims to create 50% more headroom. It will also significantly improve lead times according to the appropriately named Paul Steele, managing director at Tata Steel Distribution UK and Ireland. Mr Steele has been responsible for much of the relocation project and says the challenge of keeping
the old sites operational while developing the new one – especially since some equipment was transferred – was something of a headache. But with the steel market picking up, Tata evidently feels the availability of new capacity will make the effort worthwhile. As I am shown around the facility, large pieces of steel-cutting equipment including two new plasma-profiling machines, worth upwards of £400,000 and capable of cutting steel at temperatures up to 25,000°C, are still wrapped in protective plastic. But everything will be fully operational by July I’m told. Read more about Tata Group and Tata in the UK on p32.
OUT AND ABOUT
Autosport International 2013 The annual Autosport International event celebrating the UK’s motor racing industry wheeled in to Birmingham’s NEC in January. James Pozzi attended.
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s the number one motor racing exhibition in the country, Autosport International showcases everything from the glitz and glamour of Formula 1 teams to the engineering firms which keep them racing. Taking up the vast exhibition halls of Birmingham’s NEC, the show really does pull everything you’d ever want to know about the British motorsport industry under one roof. Naturally the Formula 1 teams drew heaving crowds. A particular attraction was provided by the McLaren F1 5D simulator which
enabled users to take a fast lap around a circuit. There were also product unveilings aplenty. Jaguar Land Rover, recent recipient of ’s Manufacturing in Action Award, showcased its Defender Challenge car for the first time. The vehicle is designed and engineered to compete in a tough one-make rally championship. Alongside the grittier side of motorsport, a host of academic institutions also smattered the list of exhibitors. The recently opened Silverstone University Technical College (UTC) stood out from the crowd with its offering of industry-led schooling for 14-19 year olds. The UTC is supported by Formula 1 teams such as Caterham and located a stone’s throw from the home of UK motor racing. With such sponsors and setting it will no doubt keep the fire in Britain’s love affair with high performance engineering for motorsport for many years to come. While touring the show I took the opportunity to speak with Chris Aylett, chief executive of the Motorsport Industry Association (MIA), representing 45,000 members. We talked about the industry’s achievements and prospects,
More Pai! S Jane Gray catches up with Organic cosmetics manufacturer Pai Skincare
arah Brown has been keeping busy since last spoke to her in June last year. (bit.ly/ SenseandSensitivity). A drop-in at the firm’s factory in Ealing, London gave me the chance to see the gleaming new homogeniser installed with the help of Kruger engineers just before Christmas and to observe preparations for the imminent arrival of a new filing line. Less tangible ground work is also being laid for the purchase of the firm’s first ERP system this year I discovered as I chatted with the petite but tenacious CEO.
touching on the development of low carbon technologies and weak points in the industry’s supply chain. Given the publication of a British motorsport review at Autosport International which valued the industry at £9bn –double what it was just a decade ago – Aylett was understandably chipper. “British motorsport companies are proven world champions. Highly-publicised victories on race tracks around the world are a strong promotion for this ‘jewel in the crown’ of UK advanced engineering,” he said. Read more from our interview at bit.ly/ Racingahaead.
Investment plans are being carried forward on the back of a strong 2013 – boosted by an exceptional run of business over Christmas. A bank loan of £80,000 received last year is also doing its part though Ms Brown says she asked for £250,000 and the current facility only really takes her a third of the way into her plans. International growth was the focus in 2013 and the Pai team (now 11-strong and with hopes of welcoming an apprentice soon) has invested a lot of time in refining its approach to market research and development. In 2014 it hopes to roll out a methodical export expansion plan for Sweden and Germany. Brown has been asked to share her export experiences with delegates at EEF’s National Manufacturing Conference on March 4 and says she is excited about the chance to talk at the high profile event. “It seems like a great opportunity,” she told me as we chatted through her plans to share thoughts on the financial burden of IP and brand protection on internationally ambitious SMEs. Read more about Pai Skincare’s recent investments and export business at bit.ly/LifeofPai February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 25
Best of NatWest for manufacturing http://www.themanufacturer.com
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he car launch spree from a series of Formula 1 teams in January put these news stories at the top of the charts for ’s online content last month. McLaren’s launch of the MP4-29 was particularly popular – but you can read news of McLaren’s last Mercedes powered F1 offering, and of launches from rivals in a dedicated news section on p12. Beyond the lure of F1 glamour some of the subjects which attracted notable attention in January were automation, promise of banking support for manufacturing, and supply chain trends
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Newly appointed NatWest head of manufacturing, Mark Eastwood told he is committed to supporting the growth of manufacturing clients.
M
r Eastwood talked about his career experience to date with ’s James Pozzi and summed up his views on bank lending to UK SMEs, risk aversion and the outlook for 2014. Eastwood arrived at NatWest via RBS where he spent 25 years looking after SME accounts across sectors. When challenged on the perceived reluctance of banks to lend to this base, and to assess the significance of the rise of alternative finance as a means to supporting SME growth, Eastwood commented: “From the perspective of our ability and desire to lend money, we’re very much open for business…our lending strategy means we are always looking to innovate, to use new products and services aligned to the wider issues facing manufacturing. We’ve also got a strong working relationship with [asset finance provider] Lombard, which has been doing strong stuff within the manufacturing space to support capital finance objectives.” Miserly bank lending has often been blamed for Britain’s sluggish return to growth since the recession, and for the fact that UK manufacturing firms have fallen behind in their capital investment levels – this is particularly true in terms of automation where the UK dropped in a global ranking of robot density to 19 in 2013. Down from 17 in 2012. With economic conditions improving globally however, several major banks have approached in the new year to talk about the surge in enquiries from UK manufacturing firms seeking support for capital investment. At NatWest, Eastwood revealed that, in a recent survey, 60% of its SME manufacturing customers said they are looking to make capital investments in 2014. Talking about NatWest’s broader strategy for industry support, Eastwood said there are five key priorities: supply chain, exports, apprenticeships, renewables and technology and innovation. One important way in which NatWest is hoping to promote its willingness to support businesses which show vibrancy across these areas, is through its partnership with EEF. It’s a working relationship which also helps the bank understand industry developments and tailor its products accordingly. NatWest is a lead sponsor at EEF’s National Manufacturing Conference on March 4 which you can read more about on p44. To see ’s interview with Mark Eastwood in full, go to bit.ly/MarkEastwood
26 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
Tracking your top reads on www.themanufacturer.com in January
Prepare for Industry 4.0 An interview with Dr Graeme Philp gave some insight into the conversations he hopes to provoke at ’s event Automate UK which takes place on February 25.
“I
t’s time to move off the well-worn path of improved repeatability, quality and general manufacturing efficiency when we talk about automation in manufacturing,” Dr Philp, CEO of Gambica, told . “To really inspire and extract the maximum potential from automation investments we need to be aware of more strategic and innovative uses of automation,” he continued. “How can automation support the reshoring of more manufacturing to the UK? How can we use wireless networking technologies, associated with the establishment of Industry 4.0, to increase flexibility in plants and factories, rather than simply improving our ability to make the same part over and over again?” Dr Philp then went on to identify a range of rapidly advancing process and industrial automation technologies which are bringing the vision of Industry 4.0 – the German concept for a connected world of intelligent manufacturing technologies – closer to reality. He included truly distributed computing power and the wireless networking of sensors through the adoption of technologies developed in the mobile phone industry. He also highlighted energy harvesting as a technology to watch for manufacturers who want to get the best competitive pay back from their factory investments. Philp recognised that some manufacturers might feel weary of being promised competitive advantage through these technologies since many have been a long time in the making but, specifically in the case of wireless networking he
Another automation feature which attracted significant attention in January was an introduction the ’s Automation Advisory Board (p3) by Professor Ken Young, technology director at the Manufacturing Technology Centre. The article sets the scene for the launch of the Automation Advisory Board which convenes automation vendors and connects them with users, finance partners and key industry support bodies in a non-competitive environment. Read Professor Young’s article here: bit.ly/Leadinautomation
It’s time to move off the well-worn path of improved repeatability, quality and general manufacturing efficiency explained. “There is enough proprietary product around now to allow industry-led innovation and manufacturers should not be put off by the fact that plant have been promised distributed computing power from their investments since the 1970s. “It’s only with the advent of wireless digital networking and the introduction of technologies developed in the mobile phone industry that decentralised computing has really become achievable in rugged environments like manufacturing plants.” Philp stated his belief that the next few years will see a significant transition in the uptake of Industry 4.0-type technologies from being largely about technology push to being much more about industry pull. “It is inevitable that we have to go through this stage of technology push,” he said. “You have to understand that this vision is not based on a single technology offering, but on a suite of networked technologies. These are at varying stages of technology maturity and, while islands of excellence in the exploitation of isolated technologies do exist today, we will not truly be able to understand the benefits of Industry 4.0 until we are able to bring that full suite together.” Read the full interview with Dr Philp here: bit.ly/PrepereforInd4-0
Best of Online
Supply chain 2014
An opinion piece submitted by Adrian Chamberlain, chief executive of Achilles, predicted key trends for supply chain in 2014.
M
r Chamberlain pinpointed six major trends which he believes will impact they way in which supply chain are managed in 2014. These trends included: supply chain mapping, monitoring and benchmarking for sustainability, conflict minerals, worker welfare, new Procurement Directives and the desire for a single global view of supplier data. “[Achilles believes] that in 2014 consumers, governments and industry watchdogs will put pressure on big businesses, across a whole range of sectors, to scrutinise their operations in terms of health and safety, ethics and compliance,” said Chamberlain who took the opportunity to raise awareness of key watershed moments approaching in 2014 – for instance, from May 31 this year companies will be required to file reports on their use of conflict minerals.
If you’re concerned about developments in supply chain management and performance measurement, save the date for ’s Future Factory: Supply Chain event on April 29 in London. This event is free to paid subscribers of the magazine. Read Mr Chamberlain’s article in full here bit.ly/6SupplyChainTrends. February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 27
Confident for 2014? How much stock should we put in January’s flurry of optimistic predictions of manufacturing resurgence in 2014? Callum Bentley investigates.
There is no such thing as enough Government support. The UK manufacturing industry will always be in need of more support. However, it must also support itself
A
new year; what better time for a fresh start? Finally we can put all of the economic adversity of recent years behind us and see the glitter of gold on the path ahead – right? With the New Year came a flood of industry reports identifying resurgent confidence in the UK manufacturing industry. Even having to acknowledge slightly disappointing manufacturing output figures for November, released by the Office for National Statistics last month, didn’t dim the prevailing jubilation.
And it seems that the warmth of several months of economic optimism really is coaxing industry leaders to believe that better times are upon us. According to EEF’s Executive Survey, which was published in January, 70% of manufacturing firms expect the economy to improve this year and their hopes for increased sales, at home and abroad, are growing in ambition accordingly. Ms Lee Hopley, chief economist at EEF, urged business leaders to continue putting faith in “the raft of more upbeat surveys since the start of the year”. She said there were plenty of reasons to “forecast a continued recovery across manufacturing this year.” She continued with the mandatory plea to government to play its part in the recovery, saying; “With production levels across much of industry still languishing below their pre-recession peak, policy makers need to focus on creating the right business environment to ensure the recovery is sustained this time.” And she is right. There is no such thing as enough Government encouragement and the UK manufacturing industry will always be in need of more support. However, it is important to remember that it must also support itself. A fine example of the efforts of industry and government pulling together for great results can be seen in the UK automotive sector. Companies such as Jaguar Land Rover, RollsRoyce Motor Cars and Caterham have had record years for sales, both at home and overseas.
2014 expectations for UK manufacturing senior executives
Survey conducted by EEF and Aldermore bank of 200 senior executives at British manufacturing businesses.
% expect the UK economy to improve over the next year
% expect manufacturing to improve
28 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
% expect the global economy to improve
% expect their domestic sales to improve
% expect their exports to increase
% expect their export increase to be significant
2014 Outlook
JLR’s full year retail sales for 2013 stood at £425,006, up 19%, with strong growth in all major regions and new records set in 38 markets, including Russia, Brazil, Korea and Canada. Commenting on the company’s sales performance, Dr Ralf Speth, Jaguar Land Rover CEO said, “Our unrelenting focus on design, technology, innovation and quality has seen Jaguar Land Rover reach global consumers in more markets than ever before thanks to its most desirable product line-up.” But of course the power to invest lavishly in innovation for a high value consumer product that is becoming more desirable as people across the world once again find disposable income becoming a reality is a fortune not all manufacturers have. Even so, the CBI Industrial Trends Survey has noted the particularly broad sweep of returning confidence in manufacturing. Its November 2013 survey recorded growth in all segments bar one – electrical engineering – and the steady reports of rising orders and output have remained largely inclusive since. CBI’s January survey showed general levels of uncertainty about demand dropping away and recorded the strongest growth in domestic orders since April 2011. The British Chambers of Commerce also noted that Q4 2013 actually showed the domestic market for UK manufacturers to have peaked above pre-recession levels in 2007.
HOT TOPIC
Now is not the time to relax and take our foot off the gas. There are still risks ahead and our manufacturers need help to break into high-growth export markets Stephen Gifford CBI director of Economics
The CBI’s director of economics Stephen Gifford says the recovery in the manufacturing sector is building. But he also urges for vigilance in protecting the fledgling recovery. “Now is not the time to relax and take our foot off the gas. There are still risks ahead and our manufacturers need help to break into high-growth export markets.”
No time for complacency
In summary then, the message to those wondering if they can put real stock in the optimism of the New Year, is unsurprising and simple. Confidence is high, but complacency is not an option and help is still needed to stabilise the recovery for all sectors and for the longer term. Positive news on the latter front came last month as Lord Livingston, minister for Trade and Investment, announced his campaign to support
mid-sized businesses in the UK while speaking at a ‘Meet the Mittlestand’ event in Derbyshire. His plan is for every mid-sized business in the country to be offered “tailored trade advice and an intensive programme of support to help them start exporting or break into new markets.” Lord Livingston said prior to the event that he would personally write to all of the UK’s 8,900 mid-sized businesses to offer assistance from United Kingdom Trade and Investment (UKTI). We’ll have to wait and see if this promise is carried through – but if and when it is, what’s really important is that those businesses that can make the most of this opportunity, do so. If companies and trade bodies are prepared to shout for assistance from the government, they should also be prepared to jump on help when it is presented.
UK automotive at full throttle IN 2013 Jaguar Land Rover sold cars worldwide, the highest in the company’s history
Rolls Royce also recorded record sales with cars sold globally
Two out of top 10 selling cars were made in the UK
million
new cars registered in UK the best figures in 5 years
Caterham Cars sold 61% of units overseas, more than ever before February 2014 | Issue 1| Volume 17 | www.themanufacturer.com
29
Exports in 2014 Exports in 2014 Launching ’s new UK manufacturing exports tracker
Frustrated with export obsession? On reading EEF’s export analysis (opposite) Pamela Petty, MD of air conditioning systems and washing machine manufacturer Ebac Group, immediately asked “Why is the focus only on exports and not the things being imported that we could make here in the UK?) Instances of manufacturers reshoring production to the UK from overseas, often making products some would have assumed would inevitably be unviable here due to cost and labour intensity, increased in 2013. In 2014, the will to promote more reshoring has been instantly palpable from a number of sources. EEF has made reshoring a key theme at its annual conference on March 4 and David Cameron used the global stage of the World Economic Forum in Davos to launch ReshoreUK, an advisory body to assist investors in new UK production capacity (p08). will host its Future On April 29 Factory Supply Chain conference in London and bring more news from ReshoreUK about its work to anchor manufacturing supply chains in Britain. If you have a reshoring story you’d please email: like to share with j.gray@sayonemedia.com or tweet to @TheManufacturer.
30 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
I
n 2013 the UK government spent £420m on promoting British exports. Yet despite this weighty investment the year closed with grave concerns being voiced by industry representatives, such as EEF’s Terry Scouler, that it is looking more and more likely the UK will miss meeting Chancellor George Osborne’s target of doubling the value of UK exports to £1trn by 2020 (bit.ly/BacktoScuolerExports). Discontent with progress on increasing international entrepreneurialism among UK firms – particularly SMEs – returned with vigour after the New Year. In January, the Public Accounts Committee found that the two major government bodies for supporting export growth were failing in crucial aspects. The PAC said the Foreign and Commonwealth Office lacked the appropriate information to prove the effectiveness of its campaigns and that UK Trade and Investment needs to work harder on finding real new opportunities for SMEs abroad – again the practical assistance being supplied to SME came under special scrutiny. Representatives in the FCO and UKTI defended their efforts, highlighting a strategy to pursue high value opportunities and improve the network of advice and support to SMEs across sectors. Just last month, Lord Livingstone, the recently appointed Minister for Trade and Investment launched another new initiative to boost export ambition among mid-sized firms. But if data shows that such efforts are having little impact, can we really blame government for the UK’s stubbornly stagnant export performance? However strongly they are urged to do so on the merit of national economic benefit, no company is going to launch into the risk and bureaucracy laden arena of market expansion unless they feel confident in their management skills and capacity and in the financial security of their existing business. Until relatively
EXPORT TRACKER
recently, these factors have been far from ‘givens’ for many UK firms, but as we enter 2014, confidence indicators in regular industry surveys like those conducted by EEF, the CBI and the Manufacturing Advisory Service, show more manufacturers than ever before are feeling good about their market position (p28). According to EEF’s Executive Survey 2014, published in January, this has prompted 55% of industry leaders to expect growth in exports this year with 10% predicting “significant” growth.
But will this intention turn into reality? And if it does, where will we see exports increasing most notably? Government would urge exporters to focus on emerging markets for big ticket export opportunities, but Europe remains the UK’s single largest export market by some distance suggesting exporters still find it attractive to deal with. In 2014, will keep a closer eye on export trends, making use of data from EEF and the Office for National Statistics to provide a regular export tracker.
No company is going to launch into the risk and bureaucracy laden arena of market expansion unless they feel confident in their management skills and capacity and in the financial security of their existing business
Here’s the breakdown from January: Goods Export Value Indicator £ billions
0
Trade with China reached a record high, with exports rising 2.4% to £3.3 billion in the period September to November 2013, and South Korea also saw a big increase in exports over that period.
100
Falls were seen in exports to the US, Canada, Norway and Hong Kong.
2013 Oct 2013 Nov
Indicator: Goods exports 3 months ending Source: National Statistics Goods Exports by Market Indicator £ billions
Survey Indicator
Up 0
50 Non-EU EU
Indicator: Goods exports 3 months ending Sept 2013 Source: National Statistics
Down
Indicator: % balance of companies expecting change in export sales in 2014 Source: EEF Business Trends Survey
Fact of the Month
In 2012 the UK exported £4.9 billion worth of toiletries, cosmetics and purfumes, and ran a small trade surplus.
Indicator: Exports of toiletries, cosmetics and purfumes, 2012 Source: National Statistics
EEF analysis January’s trade figures showed a slight deterioration in the trade deficit, which increased from £10.4 billion in the three months to October 2013 to £10.5 billion in the three months to November 2013.
in November compared with October, the more stable three monthly figures show exports strengthening £0.1 billion to £75.2 billion between September and November 2013 compared with the three months to October.
This increase was largely driven by a fall in the services surplus and was only partially offset by a small improvement in the goods deficit.
A fall was seen in exports to the EU but non-EU markets saw goods exports increase over the three month period.
Looking underneath these headline figures we see that while goods exports fell
Digging down yet another layer shows continued variation in performance by market.
In the EU, the biggest rises in exports in the three months to November 2013 were to Spain, Italy, Germany and Ireland, but these were more than offset by falls in exports to the Netherlands and Sweden. Total exports for the year to November 2013 were £502.6 billion, up £0.5 billion or 0.1% on the year to October 2013. Observing these figures, Philip Greenish, CEO of the Royal Academy for Engineering and a member of TM’s Editorial Advisory Board said: “These results are both encouraging and concerning. “The encouraging element is the proportion of companies that expect to see an increase in export sales during 2014. This mirrors the growing confidence in the UK economy and data for both growth and unemployment that has exceeded expectation. “However,” he cautioned, “the improvement in economic performance seen in 2013 was based too much on traditional UK factors such as housing and consumer confidence. The strong export performance in some critically important engineeringbased sectors such as automotive needs to be reflected elsewhere if we are to achieve the sustained export growth needed.” February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 31
TATAspecial Tata Steel’s new furnace in Port Talbot cost £185m
A global firm Impressions from ’s trip to India with Tata in December 2013. The manufacturing sector in Tata’s homeland of India is going through a distinct rough patch.
Tata and Britain A special focus on the UK’s largest industrial employer
“B
ritain doesn’t own any of its industry anymore.” The negative connotations behind this commonly voiced complaint are clear. As we lose control of our brands and the power to make decisions about
investment, we lose control of our fate and industrial decline is inevitable. Or is it? Tata, Indian by origin but now marketing itself as a fully globalised firm, says ‘no’. Which is a relief, given that an Oxford Economics report in 2010 showed that Tata is now the UK’s biggest manufacturing employer and most prolific foreign investor. Via its 19 companies operating in the UK, Tata supports over 50,000 British jobs and, since 2000 it has invested £19.4bn in making its businesses here – both those it has acquired and those which have grown organically – more competitive. (See p34 for a map of Tata locations in the UK)
A long term presence
million Tata Global Beverages brands are consumed daily around the world 32 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
But Tata’s commitment to the UK has far deeper foundations than those laid down in its recent investments and acquisitions. Tata Ltd was first registered in the UK in 1907 as a means for developing the British interests of Tata Sons (est. 1868), the Indian
In August last year the HSBC purchasing managers index for India showed the nation’s manufacturing in contraction for the first time in over four years of growth. The index, which measures output and order figures, returned a result of 48.5. Any measurement of 50 and above marks sector growth. Since this low point, Indian manufacturing has managed to grapple its way back up above the 50 mark. But the environment remains challenging. The domestic market for consumer goods – particularly cars – remains sluggish thanks to wider economic woes which have seen India’s growth projections drop below 5% for the first time in a decade. But despite this challenging environment, Tata Group is going through an exciting period of change and is hotly pursuing global ambitions. The new zest is partly the result of the appointment firm which is still the holding company for the larger global group. Over the years, Tata Ltd has also become responsible for representing an expanding portfolio of European companies and supporting their local development. The ability to bring benefits to communities
TATA Special
of Cyrus P Mistry as Tata Group chairman in December 2012. This change of leadership tends to be a generational event for Tata which has only had six chairmen in its 100+ year history. The recent switch has created a logical moment to take stock and refresh medium term strategic targets. toured with Tata in India, several of As the companies we visited were in the processes of formalising new fiveyear missions. While details were not revealed, it became clear the growth outside India was a common theme. In many cases, global growth will not immediately or necessarily raise the profile of Tata companies in Europe. Tata Motors, for instance, is focused on exploiting the potential of emerging economies in Asia and Africa first and foremost – though it was notable on touring the crash test facilities in Pune that Tata Motors is taking care to ensure all of its cars meet the requirements of Europe, not just those needed for less demanding markets. But other Tata companies less well-known in Europe, might soon make an impact. Titan, which makes watches, spectacles and jewellery among other products,
acquired Swiss watch maker Favre-Lueba in 2011 and plans to use the brand to springboard some of its own products into Europe – previous attempts have been dogged by perceptions of low quality in Indian manufacturing according to Titan’s management. It’s two of Titan’s subsidiaries which are likely to garner the most attention from British industry however. Titan Automation Solutions and Titan Precision Engineering both have remarkable growth stories to tell and big global ambitions. Both divisions were established on the back of employee suggestions that Titan’s skills in creating precision engineered watch parts, to tolerances of less than one micron, and developing bespoke automation solutions like its one of a kind diamond sorting machine, could be commercialised. The ventures have both made very promising starts and provide a cage rattling challenge to the idea that niche, employee-led innovation is the preserve of Western engineering firms. Since 2005, Titan Precision Engineering has experienced 30% year on year growth and now achieves around $40m
Tata
in
India
in annual revenues. It has targeted supply to the aerospace industry and worked with big global partners like Pratt and Whitney to get up to speed on the sector’s demanding compliance regime. The division now employs around 600 people, 80% of whom are engineers, and it is unequivocal about its desire to become a leading supplier of engine accessories to big global players – it already works with Rolls Royce in the UK. Titan Automation Solutions is equally determined to make a name for itself outside India. A company representative in India told “We plan to be a global leader in factory automation.” Watch this space.
Inside Tata’s Indian factories
through its businesses is central to the Tata Group strategy – and looking at the long list of contributions Tata has made, not only to UK industrial infrastructure and job creation, but also to education, skills and public health, it is clear that this does not just mean taking benefits home for its Indian dependents. The first endowment to a UK university by Tata was made in 1912 by the group’s founding father Jamsetji
Tata who funded research at the London School of Economics into the causes of poverty. His generosity led to the foundation of the Sir Ratan Tata Department, now known as the Department for Social Sciences. Later, investments to support important areas of industrial research also gained momentum – often because Tata recognised the UK as a global centre of learning where it could develop expertise and source talent.
But despite their longstanding, these kinds of investments in the UK have a relatively low public profile. This is largely thanks to a rather reserved management culture at Tata. “It’s a company than much prefers to ‘do’ rather than ‘say’” observes Dr David Landsman, recently appointed director of Tata in the UK (p40). Such modesty is laudable, but has its drawbacks when it comes to quelling naysayers who continue to suggest it February 2014 | Issue 1| Volume 17 | www.themanufacturer.com
33
TATA Special
Where’s Tata in the UK? This list includes only Tata’s manufacturing and industrial sites. Tata also has UK sites for its consultancy, communications and hospitality businesses. 5
8
14 19 9 10
13
15 17
24 27
25
1: Ammanford
Tata Steel – profiled steel sheets
2: Birmingham
Tata Steel Projects
3: Bristol
Tata Technologies
4: Caerphilly
Tata Steel Building Systems
5: Clydebridge
Tata Steel Construction and Industrial
6: Corby
Tata Steel Tubes
7: Coventry
Tata Technologies, Jaguar Land Rover Engineering centre
8: Dalzell
Tata Steel Construction and Industrial
9: Darlington
Tata Steel – special sections
10: Eaglescliffe
Tata Global Beverages manufacturing site (Tetley)
11: Gaydon
Jaguar Land Rover product development centre
12: Greenford
Tata Global Beverages UK/EMER regional head office
13: Halewood
Jaguar Land Rover manufacturing plant
14: Hartlepool
Tata Steel Tubes
15: Haydock
Tata Steel Kalzip
16: Luton
Tata Technologies
17: Manchester
Tata Steel Projects;
18: Newport (Llanwern and Orb)
Tata Steel Strips Products UK – rolling mills
19: Newton Aycliffe
Tata Global Beverages distribution centre (Tetley)
20: Northwich
Tata Chemicals Europe
21: Pontarddulais
Tata Steel – integrated steelmaking / strip products
22: Port Talbot
Tata Steel Strip Products UK – integrated steelmaking
23: Reading
Tata Steel Projects
24: Rotherham
Tata Steel Engineering Steels – electric arc furnace steelmaking
25: Scunthorpe
Tata Steel Construction and Industrial – integrated steelmaking
26: Soihull
Jaguar Land Rover manufacturing plant
27: Sheffield (Stocksbridge)
Tata Steel Engineering Steels
20
6
2 26 7 11 1
16
4
21 22
Tata’s commitment to the UK has far deeper foundations than those laid down in its recent investments and acquisitions
18
3
23
12
is only a matter of time before Jaguar Land Rover – famously acquired by Tata in 2008 – moves production wholesale to India. Such mutterings are still made, despite billions of pounds of investment now anchoring JLR’s UK sites. Does such doubt frustrate Tata’s central management? During a visit to Tata’s global headquarters in Mumbai last year, posed this question to Dr Mukund Rajan, brand custodian and chief ethics officer at Tata as well as a member of the executive board.
34 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
“Tata has brought to Jaguar Land Rover [and its other companies in the UK] the same values that it brings to any group company – whether it is one we create, grow or acquire.” Dr Rajan clarifies, “This means ensuring a company is putting out excellent quality products and services that people across the world can buy. It means giving back to the local community in the same way that any Tata company in the world would do. It means creating jobs and being responsible in responding to national issues that the local government and industrial community say are important, from skills development to investment in industrial capacity, building the right supply chain,” the list goes on.
TATA Special
JLR started the recruitment drive for its new engine plant in Wolverhampton this year
“If a company is doing all of these things,” sums up Rajan, “what does it matter whether it is in British hands or not? It is a company that will be admired around the globe.”
The family
JLR has become the crowning glory of Tata’s UK investments, but the celebrity it has gained as the hero of a resurgent automotive industry should not detract from Tata’s other UK businesses. In terms of manufacturing, these include (in order of acquisition): Tetley Tea – part of Tata Global Beverages (TGB), Tata Chemicals and Tata Steel. Other non-manufacturing, but engineering-relevant Tata companies working with UK partners include: Tata Technologies, Titan Precision In Sept 2013 JLR committed
£1.5bn to the development of new production technologies in the UK
36 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
Engineering and Titan Automation Solutions (see Tata in India box). Tetley was a landmark acquisition for Tata. It was the group’s first major brand acquisition in the UK and TGB’s first global strategic buy. Today Tetley’s Eaglescliffe factory sets the benchmark for global best practice across TGB and demonstrates how investment in automation, alongside workforce upskilling, can make the production of low-unit-value consumer products in the UK, not only a viable option, but a competitive one. (Read more about the relationship between technology and training at Eaglescliffe at bit.ly/Competitivenesstoatea) Tata’s experience in enabling Tetley’s growth is distinctive of its approach to all branded companies across the group. While all group companies operate very independently, particular care is taken to preserve the heritage and character of acquired brands. Harish Bhat, CEO and MD of TGB told , “Brands must be authentic to their origins. Tetley was born in Leeds and must remain true to this.” A similar understanding of consumer love affairs with brands is clear in Tata’s management of Jaguar Land Rover where both sides of the business
JLR has become the crowning glory of Tata’s UK investments, but the celebrity it has gained as the hero of a resurgent automotive industry should not detract from Tata’s other UK businesses have maintained very distinct brand cultures. But although Tata is not aggressive about associating its name and logo with all its branded companies, it is adamant that all Tata companies will adhere to a certain set of values. Dr Rajan explains: “Tata has never been fussed about having its name or logo on every product it owns. As long as the Tata values are maintained in the way that each business operates and as long as it is recognised on some level that the Tata Group is behind the success of branded products, we are happy.” Is this true in the UK? In India, the ‘feel’ of the Tata value system and communication of the principles it
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TATA Special
Tetley employees get 27 training days a year
upholds are palpable and consistent. Tata’s name is a potent presence on every street corner and, thanks to its economic and social contributions it has created a ‘Tata family’ ethos which has real integrity – quite simply, as Dr Bhat put it “in India, Tata is magic”. Is there a desire to create a similar impression in the UK? Do UK workers, in branded and non-branded companies alike, feel that they are part of the global Tata family? “It’s a good question,” ponders Tata’s UK director Dr Landsman. “Clearly Tata is nowhere near as well
Since 2000 Tata has invested
£19.4bn in its UK companies
38 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
known in the UK as it is in India and we would always want to remain true to the ‘Tata way’ which promotes the independence of its companies. “But at the same time, if you ask people at Tetley and Jaguar Land Rover what they feel a part of, there is strong recognition that it is Tata which is making their success possible,” states Landsman. But of course, not every company has the fortune to be growing as strongly as Tetley and JLR. Tata Chemicals and Tata Steel both have significant challenges in the UK (p41). Has the workforce embraced Tata ownership as firmly in these companies? “I have been particularly struck when visiting Port Talbot, by the strength of belonging to Tata that is expressed there,” says Landsman. “People at Tata Steel in the UK often get to meet and work with their colleagues in India. They are all steel people and they do feel that they belong to a family.”
The ability to benefit communities through its businesses is central to the Tata Group strategy
FURTHER READING: Read more about with Tata
’s trip to India
At home with Tata: bit.ly/AthomewithTata Competitive complacency: bit.ly/Competitivecomplacency Of steel, energy and politics: bit.ly/TataUKandenergy
FRee to attend for subscribers of the manufacturer
See website for more details.
Unleashing the power of automation in UK manufacturing
automate uK 25th February 2014 The Waldorf Hilton, London
Automation can enable UK manufacturers to compete with any counterparts, including those based in low labour cost countries. It also increases quality and can help attain higher safety standards through the production process. This event will also demystify the fear that automation will lead to large scale redundancies. Moving into 2014 it is a business risk not to be informed about the benefits that automation can bring to your business.
Hear from leading authorities, including:
Dr Graeme Philp, Chief Executive, GAMBICA
John Morton, Group Project Manager, Burton’s Biscuits
Brian Holliday, Divisional Director, Siemens Industry Automation
Neil Burns, Director, Croft Filters and Croft Additive Manufacturing
www.themanufacturer.com/automateuk2014 @themanufacturer
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INTERVIEW Ever the diplomat Dr David Landsman OBE, director of Tata UK, talks to Jane Gray about coordinating the interests of Britain’s biggest foreign investor.
A
swift skim of Dr David Landsman’s CV (p42) is likely to raise images of towering pyramids of Ferrero Rocher and fraught negotiations for peace in Europe. What is unlikely, is that less than a year ago, you would have predicted the career move which has him sitting where he does today; at the hub of Britain’s largest industrial employer, co-ordinating the interests of manufacturing and engineering firms in diverse sectors including beverages, steel, automotive and chemicals – not to mention Tata’s myriad of other business interests in the UK (p38). But in fact, says Dr Landsman, the transfer from diplomacy to diversified business leadership made a great deal of sense. “The large part of what a British diplomat does these days, especially when they are working overseas, is to support British business. This involves getting your mind around the essence of the challenges being faced by diverse sectors in a particular
40 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
geography or business environment and identifying how you can help.” With this in mind, Landsman was immediately intrigued when he saw the availability of the Tata UK directorship, “It appealed to my experience of diversity and globalness in my work,” he says. Additionally, Landsman says his interest was clinched by Tata’s strong corporate values and its deep entrenchment in the UK – “Tata has a long history here and is very keen to become part of the economic furniture – not to be an outsider,” he asserts.
Occupying a space
As we sit in his wood panelled office in central London, trying to maintain a sense of business despite lounging in a sumptuous set of club-style Chesterfield’s, it has to be admitted that Tata is certainly wearing the quintessential British look with confidence.
It is my ambition to see Tata fully occupy its space in British industry
Dr David Landsman OBE
But, says Landsman, he is not yet satisfied with its assimilation and, increasingly, his role as director involves representing the corporate face of Tata in the UK, raising general awareness of its contributions and commitment to the British economy, jobs and wider community. “Personally it is my ambition while in this role to see Tata fully occupy its space in British industry,” continues Landsman. This involves taking every opportunity to emphasize Tata’s commitment to long term investment in the UK. Landsman wants Tata to be seen as a key player in debate over the development of the British business environment and how to improve its competitiveness. “To be seen as an obvious and natural part of this debate would be a real sign of success,” comments Landsman – though he admits that Tata Group is instinctively cautious about engaging with the political sphere for influence over the business environment in any nation where it operates. “The political scene in the UK is very different to what it is India,” he says, referring to the concern of the Group to remain unsullied by accusations of corruption in any of its geographies. “But of course we do speak to the UK government – as the UK’s largest manufacturing employer it would be deeply remiss of us not to voice our aspirations and concerns about the conditions for doing business here.” And of course UK government would be deeply remiss not to listen when Tata voices these concerns. Not only is the firm largely responsible for Britain’s great automotive turnaround story via its acquisition of Jaguar Land Rover, it is the UK’s biggest source of foreign investment overall. Its tea manufacturing facility at Tetley, Eaglescliffe is an award-winning site and a testament to the power of automation in making UK manufacture of commodities a competitive proposition. And Tata Chemicals and Tata Steel have both sunk significant amounts of money into UK facilities since Tata Group acquired Brummer Mond Group and Corus in 2005 and 2008 respectively. But, it doesn’t take much awareness of industrial news to note that these latter two businesses have also faced significant challenges since they joined
INTERVIEW
the Tata family. Both have made big job cuts in the UK – most recently, in December 2012 Tata Chemicals confirmed 220 job losses from its Winnington site in Cheshire.
The energy question
The driving force behind these cuts has been the debilitating cost of energy in the UK – and there are many who are deeply concerned about the future of Tata Chemicals’ and Tata Steel’s UK sites, and the staff they employ for this reason. Landsman acknowledges these fears, but stands firm on Tata’s commitment to its UK operations. “Energy is at the top of my agenda when it comes to improving our business prospects in the UK,” he says. “But Tata is fundamentally about investment for the long term. This partly comes down to mind set and its commitment to create value for all stakeholders – not just shareholders. It is also supported by its governance – in Tata’s entire history it has only had six chairmen.” It’s a challenge to maintain this philosophy when you have to look after the business of the day Landsman admits, “We are not different from any other firm in having to worry about doing good business today,” he explains. “But for us, doing good business today is about enabling good business in the long term. This isn’t a boast. It’s just the way it is.” Returning specifically to the challenge which energy represents to competitiveness in the present, Landsman says, “In my experience governments in many countries think companies are bluffing somewhat when they say a particular aspect of the environment is making business untenable for them. They look at an outwardly successful firm and think to themselves ‘it can’t be that bad’. “This is foolish and risky, because thresholds can be crossed.” Quickly clarifying Tata’s approach however, Landsman emphatically states, “We are committed to the UK. You don’t invest as Tata Steel has done in recent years, in a difficult environment and in a business that has had historical problems, if you are not seriously committed.” And so, Tata has tied its colours to the cause of seeking solutions to the
We are keen for ideas to bring more Indian Tata companies into the European market
Highs and lows Dr Landsman’s best and worst career moments. Worst: In Montenegro early in 2000 (another era), I was mugged in daylight in a park in the centre of the town. Fortunately, I wasn’t hurt. But for one moment, I thought I was being arrested rather than mugged. I was terrified at this prospect as it would have led to big trouble for me and caused a diplomatic incident. Best: November 2000 – was Charge d’Affaires in Belgrade, Yugoslavia – after Kosovo conflict and fall of Milosevic, I represented Britain at the formal re-establishment of diplomatic relations with Yugoslavia. That was almost certainly the last time anything like that will happen in Europe and it showed me that relationships can be repaired, even after conflicts. It emphasised the importance of building and maintaining human contacts, a lesson which has stood me in good stead in business.
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 41
Dr David Landsman OBE
BIOGRAPHY Dr David Landsman OBE Director, Tata UK Ltd Education: MPhil and PhD in Linguistics, Cambridge University; MA in Classics, Oxford University 1989:
Joined the Foreign & Commonwealth Office
1991-2000: Various diplomatic positions in Greece, Serbia, Bosnia, and Hungary 2000:
Appointed Charges d’Affaires in Belgrade
2001:
Appointed ambassador to Albania and received OBE
2003:
Took a secondment to industry as international affairs advisor at De la Rue Identity Systems
2008:
Rejoined the Foreign and Commonwealth Office as director for the Balkans region
2009:
Appointed ambassador to Greece
2013:
Joined Tata Group as director of Tata UK Ltd
Dr Landsman has a keen interest in music – especially choral and Eastern European – and is also fond of swimming and travelling. He has a particular interest in European culture and history and is an accomplished linguist.
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quandaries of energy intensive users in the UK – often via industry bodies like the Energy Intensive Users Group, but also independently. The biggest challenge in moving this cause forward says Landsman is altering a broad underlying assumption that it is right and proper that heavy engineering should move to China or other emerging economies – that it is not part of the advanced manufacturing revolution of political rhetoric. “This is not true,” says Landsman. “It is simply the case that an energy intensive business in the UK must make the right choices about how to function in that environment. “Tata Steel has very deliberately become a part of the high value landscape. It develops specialist products for specialist applications. This kind of business works in the UK. It is not an inevitability that steel manufacturing will move to China.”
Youth and ambition
Having stated clearly that Tata is committed to staying in the UK, our conversation turns to plans for further development here. “The group of companies that now comprise the Tata family in the UK – and increasingly Europe – is relatively young, despite the fact that some of those companies have brands with significant heritage,” observes Landsman. While Tata is keenly sensitive about preserving the independence of every business within its expansive family, especially those with strong independent brands, a central ambition to be seen today as a truly global firm – not Indian – is driving an exploration of opportunities for collaboration and growth. “There is a definite intention both in specific regions – like Europe – and across the group as a whole, to seek out more synergies and opportunities for collaboration between Tata companies,” explains Landsman. In terms of sharing best practice, the Tata Quality Management System has already facilitated knowledge sharing across the group on a global scale.But Landsman’s concerns are more strategic. “All the CEOs of the European businesses meet three or four times and year – as do functional directors,” he elucidates. “It’s exciting now to start seeking out more
INTERVIEW
Tata is fundamentally about investment for the long term. This partly comes down to mind set and its commitment to create value for all stakeholders – not just shareholders
synergies, to share knowledge among such a diverse group.” On a global scale,TM learned during a trip to Tata Group’s headquarters in Mumbai, India, that there are plans to introduce structure pan-Group data sharing through the implementation of a central CRM system. But Landsman says his own focus is on exploring economies of scale and collaboration within verticals to promote innovation. Tata’s investment in the National Automotive Innovation Campus at WMG is an example. Tata Motors and Jaguar Land Rover have both poured money into the facility and other companies such as Tata Technologies and Tata Automation have also weighed in with expertise to help drive the automotive industry into a new low-carbon era. Landsman is keen to emphasize that, while more opportunities like this will emerge, independence of Tata Group companies will always be preserved. “We’re a federal kind of family,” he says. “We don’t want to establish group uniformity, but it is exciting to see this family growing up and finding synergies.” And, as is the way with families, from time to time you can expect more new arrivals. “We are we are keen for ideas to bring more Indian Tata companies into the European market. “Not much news on that yet,” Landsman qualifies. “But it’s an exciting prospect that I’m looking forward to being a part of.”
6Osecond Tom Bowtell, CEO of the British Coatings Federation
interview
Tom Bowtell
CEO of the British Coatings Federation construction and housing markets. A survey of our members at the end of last year showed that sixty eight per cent are confident about the year to come compared to just forty seven per cent at the close of 2012.
: How important is the British coatings industry to the economy? We’ve calculated that coatings are responsible for the creation of £150bn in GDP for the UK each year. That’s around seventeen per cent of the economy. This statistic is based on the mission critical use of British coatings in high value, advanced manufacturing sectors like aerospace and automotive where they provide all-important corrosion protection as well as paints used for decorative purposes. The British coating industry is still about six per cent behind its prerecession performance levels but we closed 2013 with a very positive Q4 thanks to increased activity in the UK
We’d like to see REACH include an appreciation of the risk management measures companies can take when using potentially harmful substances
: Is the sector’s importance recognised in government’s evolving industrial strategy? Not to the extent we would like. We welcome the fact that it has become fashionable again to talk about manufacturing in politics but we would like to see more tangible commitment to enabling industries like ours. At the moment there seems to be a lot of ‘picking winners’ going on with aerospace and automotive receiving a great deal of attention. But our members find it hard to benefit from the funding packages aimed at the growth of those sectors, despite the importance of coatings to their competitiveness. In part this is because our members tend to be smaller companies. : Does BCF have any particular campaigns for 2014? We are concerned about the potential impact of REACH on the British, and wider European, coatings industry and we are keen to raise awareness of the threat it could pose. REACH has placed a number of commonly used chemicals on a ‘high concern’ list which could see them banned. This list includes chemicals like strontium chromate which is used to protect aircraft engines from corrosion and azodicarbonamide which is used in certain wall coverings. If chemicals like these are banned whole industries might
disappear from Europe as manufacturers simply seek out locations which let them use the chemicals they want. We appreciate that REACH aims to prompt innovation in the development of alternative products to existing, potentially harmful substances, but the way it is being implemented means there is not a level playing field. We’d like to see REACH include an appreciation of the risk management measures companies can take when using potentially harmful substances, rather than simply assessing how ‘nasty’ a chemical is. : There’s a lot of interest in reshoring at the moment (p08). Have you observed any reshoring of coatings manufacture despite the difficulties posed by regulations like REACH? We recently had a good news story on this head. Hornby, which owns Airfix, used to source the paint for its models from China but about six months ago it decided to reshore this element of its supply chain and the contract was awarded to Rustins, an SME paint manufacturer based in London. Actions like this, and the £100m investment being made by AkzoNobel in its new Dulux factory in Ashington, show that the UK is still a good location for coatings manufacture.
FURTHER READING: For a longer interview with Tom Bowtell go to bit.ly/Glossycoat
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 43
We can rebuild him What’s in store at EEF’s National Manufacturing Conference 2014?
W
e have the technology, we have the capability to rebuild British manufacturing and create an industry that leads the world – now we just need more commercial tenacity, resolve to export and the will to make good on investment intentions. There’s optimism, dynamism and ambition among the team putting together this year’s National Manufacturing Conference – from the speakers, including industry leaders, senior politicians and financial experts, to the organisers at EEF. The vibrancy comes on the back of multiple positive indicators for growth in the year ahead. In January, EEF, Lloyds bank, Deloitte, the CBI and the British Chambers of Commerce all issued reports on the increasingly clement economic climate and the rising spirits of business leaders (p28). “But optimism and investment intention needs to translate into real activity on the ground,” says Terry Scuoler, CEO of EEF, “and at this year’s conference there will be some focused debate on exactly how growth is to be achieved. I strongly believe it will only be achieved when we see an increase in capital investment and when we address the productivity puzzle which has been troubling Britain in recent years.”
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Mr Scuoler hopes that networking, knowledge exchange and inspiration at the trade body’s third national conference will provoke business leaders to grasp these nettles. Nigel Stein, CEO of British manufacturer GKN is looking forward to playing his part in achieving this objective. “It can’t be emphasized enough how much the country needs to rebuild its manufacturing base,” he told . “Progress has been made but there is still a long way to go.”
Conference themes
In January, David Cameron launched of ReshoreUK, a new advisory service to help bring more manufacturing investment back to the UK (p72). The announcement invigorated debate around a topic which EEF had already identified as hot for discussion. “Reshoring is one of two major discussion areas on our agenda at this year’s conference,” comments Scuoler. “Last year, a conversation around reshoring would have been based mostly on a few anecdotes. We have moved on from that. But we need to understand the decision points for reshoring more thoroughly. “There have been tragedies in supply chain – Fukushima, the cyclone in the Philippines – transport costs are rising
and governments are working to make their business environments more attractive. We know that these are concerns for leaders in our sector. But we need to understand better how Britain is positioned when relocating manufacturing is considered.” Scuoler says there needs to be more hard data collected on this topic and he looks forward to seeing more efforts on this throughout the year. At the conference however, insight will be given by manufacturers and other stakeholders in businesses that have reshored, helping delegates with similar potential in their operations to understand the business case. It’s important to emphasize the debate EEF wants to host with regards to reshoring, is not about parochialism or protectionism. It is aligned closely with the second major theme at the 2014 conference – exports. “We’ve been involved in supporting export growth for a long time,” says Scuoler. “Long before the current Chancellor set the £1trn export target we argued that increasing net trade is good for the economy and good for competiveness.” Scuoler explains, “It takes a measure of leadership to sell your products around the world. If you are selling your
EEF National Manufacturing Conference
Manufacturing Leadership
Images from the National Manufacturing Conference in 2013. The event was attended by around 700 people. This year is set to attract even more according to EEF.
goods and services overseas, de facto, you have to drive productivity, efficiency and investment.” EEF’s panel of speakers for the export session at the National Manufacturing Conference are an eclectic bunch. There’ll be representation from UKTI, providing insight into the support available for exporters, as well as real stories of troubles and triumphs from companies as diverse as BAE Systems and SME organic cosmetics maker Pai Skincare. Sarah Brown, CEO and founder of Pai is excited about taking part in the session. “It’s a great opportunity,” she says. “This is a high profile event.” Pai gains about 50% of its revenues from exports, at the moment largely through online sales, but it is working hard to expand its international retail presence in selected outlets (p24). Finding the right partners can be tricky says Ms Brown but her real bug bear about exports is the cost of protecting her brand and IP and she is full of suggestions about ways in which the cost of filing patents and securing trade mark protection could be eased for smaller firms. Her ideas may be of interest to EEF’s headline sponsor for the conference, NatWest. Acknowledging the positive indicators which have been pouring in from various surveys for growth across manufacturing sectors and company sizes, Mark Eastwood head of manufacturing, commercial banking at NatWest has promised that “One of our key aims in 2014 is to support export and international trade for manufacturers across our UK wide team.”
Action not words Will industry skills gaps be up for debate at EEF’s National Manufacturing Conference? The availability of skilled workers to take forward the UK’s industrial ambitions is a never ending source of passionate talk at industry events (p20). But Nigel Stein, CEO of GKN and a keynote speaker at EEF’s National Manufacturing Conference urges this year’s delegates not to dwell on the topic. “We have to touch on skills of course. The issue is crucial. But I think the problems have been recognised and it is now time for employers to get on and do what needs to be done in order to build a strong skills base.” This raises the opportunity to give more air time to some other, equally important issues which are holding back a widespread increase in the competitiveness of UK industry says Mr Stein. “I think there is a problem problem with short term thinking in the UK,” he asserts. “This has translated into a residual reluctance for many, to make the incremental investments in capital equipment and innovation that need to be made to keep ahead of competition.” This argument is of a piece with Scuoler’s concerns over UK productivity. “Have we seen productivity dip because employers have preferred to invest in relatively cheap labour during the recession, rather than making capital investments which will support sustainable growth in productivity?” he asks.
EEF’s conference partner Canon is determined to address the productivity conundrum and is working alongside EEF to promote smarter ways of working which Barrie Street, European and UK customer marketing manager at Canon, says can help “power productivity”.
Compete for a treat Win Pai Skincare and Hotel Chocolat products at the EEF National Manufacturing Conference by participating in the trade body’s Twitter competition. Throughout February @EEF_Press will be asking followers to pick their favourite or most influential UK-made products from a selection nominated each day. The products will be grouped alphabetically and will range from the well-known to the obscure and humorous. Casting a vote will enter you into the ballot and a winner will be picked on the day of the National Manufacturing Conference Just follow @EEF_Press to join in the competition. EEF’s National Manufacturing Conference will take place on March 4 in London. Find out more here: www. manufacturingconference.co.uk
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 45
The Outlook for Reasons to be cheerful? What a difference a year makes. As the UK’s economic recovery embeds with more credibility than many dared to hope 12 months ago, Peter Russell, head of manufacturing & industrials at Royal Bank of Scotland, examines the sectors set to outperform in the more positive environment.
46 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
U
K GDP is widely expected to build on last year’s positive performance, with growth of 2.4% forecast for the current year1. The economy is performing better as unemployment falls and consumption spending is supported by renewed activity in the housing market and a strengthening currency. However, growth remains vulnerable to ongoing risks to financial stability and ‘stop/start’ global growth patterns, threatening the crucial export market. This begins in the US, the biggest export partner for most of our regions, where uncertainty revolves around attempts to ease the economy off quantitative easing stimulus and the difficulties surrounding debt ceiling and deficit issues. In Europe, the strength of the euro could undermine recovery for peripheral nations and subdued inflation potentially lead to even more ‘unprecedented’ intervention by the ECB. Demand from UK consumers follows the same pattern – upturned confidence boosted by a surging housing market mitigated by inflation which outstrips wages. Developing nations look set to continue leading the charge in global growth and strengthening their transition to becoming the new global power base
for growth, nevertheless substantial improvement in the overall economic growth rates of the UK and the Eurozone are anticipated in 2014.
The way we were
2013 marked a year of improving performance for the manufacturing sector, although it lagged behind the construction and services sectors. There remains significant spare capacity in manufacturing which will limit inflationary pressures and credit availability for businesses has improved, supported by policy measures and the upturn in economic activity. December 2013’s Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) eased only slightly to 57.3 from November’s three-year high of 58.1 and the same report highlighted an eighth successive monthly rise for manufacturing employment. Sterling’s recent five-year high in the trade-weighted index has raised concerns that interest rates may be increased sooner than anticipated. However, sufficient spare capacity in both output and the labour market remains to underline the case for no interest rate increases before the end of 2014. As Mark Eastwood, head of manufacturing for NatWest Commercial
The Outlook for 2014
Banking comments: “After some challenging years, many indicators are pointing to a positive 2014 for the manufacturing industry. “In 2013, output and orders for the sector showed positive balances and strong signs of improvement. In a recent report2, 96% of manufacturers said they had engaged in some form of innovation in the past three years and there are strong indications that SMEs are looking to continue activity in this area. Our focus in 2014 is to ensure that we are supporting growth across the sector and helping manufacturers to achieve their ambitions.”
A work in progress
In 2014, the manufacturing sector is expected to continue broad-based growth, boosted by the improved outlook for the UK and many of our trading partners. Aerospace should continue to outperform the sector average with very high growth rates of circa 6% expected to continue in 20143, driven by an increase in global air traffic and strong order books. RBS aerospace and defence specialist, Andrew Garvey, expects very favourable prospects for civil aerospace in particular. “There is strong demand from Airbus and Boeing including the ramp-up of production for the new A350 wide body passenger jet,” he observes. “This will create demand for a host of components, materials and testing services, not to mention the skills and labour needed to deliver the huge forward order books. “The key challenge for the UK is to grow its share of the aerospace supply chain against stiff competition both from within Europe and further East.” A more moderate growth rate of around 3% is expected for the automotive sector, with both the retail and manufacturing automotive markets expected to continue performing relatively well this year, according to Richard Hill, head of automotive UK sector coverage at RBS. “The UK automotive industry had a much improved year in 2013, with a good deal of positive activity in the sector, including output from car plants which increased by 4.5% over 2012 and new car registrations rising for 21 months in a row4. We also saw investment announcements into the sector totalling over £2.5 billion during 20134.”
ROYAL BANK OF SCOTLAND
Looking overseas, over 80%4 of the UK’s car production is exported, with growing demand recorded both in the EU and globally last year. China, the biggest car market in the world, remains an important source of demand notwithstanding Beijing’s announcement that it will slash its new car sales quotas by nearly 40% in 2014 in an attempt to reduce vehicle emissions, a move likely to be replicated in other Chinese cities. Food manufacturing is a vital component of the UK’s exporting and employment prospects. The industry accounts for 15% of the UK’s total manufacturing output and is the fourth largest food and drink manufacturing industry in Europe, with 400,000 direct and 1.2m indirect employees in the UK5. Roy Bawden, a sector specialist for RBS, expects some downward pressure on margins due to the combination of constrained household budgets and greater regulation and oversight of supply chains by the major retailers and food-service companies, leading to vital, but expensive, compliance costs. However, he also sees room for optimism. “An increasing focus on exports, recent investment in skills training and recognition of the value of the UK’s key brands by acquirers from all corners of the globe all attest to an industry that has strong resilience and growth potential,” he says. “This will be best exploited by those businesses that can access funding
to drive investment both in their product proposition and the costcompetitiveness of their offering.”
The future is now
Perhaps the sub-sector with the greatest potential to accelerate manufacturing’s contribution to the revival of UK plc is High Value Engineering (HVE). Influential innovations, from structural batteries to lightweight materials and a new generation of composites, are helping to kick-start a global manufacturing market estimated to value £800bn by 20151. The promise of high economic value that HVE represents to the UK as a whole is clear: Data from the Office for National Statistics (ONS) shows that the HVE segment of UK manufacturing contributed £150 billion to the UK balance of payments in 2012, and accounted for around a third of all UK exports. In the UK, HVE producers face intense and growing competition from emerging economies and an unparalleled, across-the-board transformation of UK HVE is imperative. The ‘twin time bombs’ threatening the UK’s participation in the HVE manufacturing renaissance are a critical skills shortage and supply chains depleted by off-shoring. Some very positive steps have, and are, being taken to help address these issues but the focus needs to be relentless if we are to make ground.
further information
Sources 1 OECD 2 2013 NatWest and EEF Innovation Monitor Report 3 RBS National Sector Analysis 2014 Sector Economic Outlook 4 Society of Motor Manufacturers and Traders (SMMT) 5 Food and Drink Federation
Peter Russell Head of Manufacturing & Industrials, RBS Corporate & Institutional Banking T: (0)20 7672 1007 E: peter.russell@rbs.co.ukk Richard Hill Head of Automotive UK Sector Coverage, RBS Corporate & Institutional Banking Birmingham T: (0)7789 616 201 E: richard.hill@rbs.co.uk Mark Eastwood Head of manufacturing, NatWest Commercial Banking T: (0)7900 661 376 E: mark.eastwood@natwest.com
February 2014 | Issue 1 | Volume 17 | www.themanufacturer.com 47
Women in industry special
Feedback from Everywoman’s delgates showed women want more visibility of their successful peers in industry. Image courtesy of Everywoman Ltd
The Manufacturer magazine acted as media partner to the first Everwoman Advanced Manufacutirng and Engineering Academy
48 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
What women want
I
Survey results show women want more from their peers
n November last year, the Everywoman network, which promotes female career progression, particularly in traditionally male dominated sectors, held its first Advanced Manufacturing and Engineering Academy. The event was attended by around 100 women at various stages in their careers and from businesses including Rolls-Royce, BAE Systems, GE and GlaxoSmithKline to name a few. You can read more about the event here bit.ly/EWMfgEngineering and can access an interview with keynote speaker Jenny Body, the first female president of the Royal Aeronautical Society, here bit.ly/Pathtodestruction. But another outcome of the event was a survey of delegate views on the biggest challenges in their work and what they felt their employers could do to help them overcome those challenges. The feedback showed that 48% of those questioned felt they faced great challenges in stepping into management roles, a finding which echoes the evidence of the Davies report of 2011, Women on Boards. This report highlighted the high levels of female attrition when reaching management roles, suggesting that more work needs to be done to revisit the business practices and cultures around those roles if more women are to realise their full professional potential. The Everywoman survey also reflected that 30% of respondents felt employers could provide more training and development for female staff so that they would be more confident in applying for management positions 23% said they would like to see more female mentoring programmes. Overwhelmingly however, it seems that, rather than relying on employers, women want to see more support from their own peer group, without necessarily needing a formal organisational mentoring scheme. Seventy two per cent of attendees said they would like senior women in industry to make themselves more visible and to share their views and experiences in order to help debunk stereotypes about the manufacturing sector and give inspiration to the ambitions of others.
Snapshots: Women in Industry Special
Manufacturing Leadership
The Paula Principle
If more men worked part time, would it be more feasible to achieve gender balance in business?
T
his is the hypothesis of a University of London Academic who spoke at the Institute for Education in January. Dr Tom Schuller, a visiting professor at the Institute of Education, University of London and an expert on workforce development talked about the inability of women to realise their full potential in the workplace, with significant benefit to the economy, until traditional male work patterns are changed. This means more men should work part time he says.
Dr Shuller’s presentation gave insght into a body of research which has led him to formulate what he calls the ‘Paula Principle’ – an allusion to the Peter Principle, a 1960s management theory that employees (at that time, usually men) are generally promoted to their level of incompetence. Shuller is in the process of pulling together a book on this subject. According the a report from the Equality and Human Rights Commission, it will be 2080 before an equal number of men and women directors in Britain’s top 100 companies if progress continues at the current rate. Shuller’s recommendation to accelerate the balancing of workforces
Executives doubt diversity benefits Executives Online research shows doubting Toms are unconvinced about the benefits of balancing gender ratios in the board room.
T
he research from Executives Online, an interim management provider, showed that while 71% of surveyed executives advocate seeking a balance of female and male board members in the companies, a significant 29% doubt the value of such efforts. Indeed, rather than subscribing to theories that gender balance brings better governance, innovation and risk management these doubters say seeking to balance boardrooms could lead to increased conflict and undermine strategic direction. James O’Brien, managing director of Executives Online, FURTHER READING: Read more about this research at bit.ly/EOGenderdiversity
was concerned to see these views expressed at a time “when gender diversity is a hotly debated issue and the number of females in top executive roles is still low, having dropped from 6.7 per cent to 5.8 per cent internationally.” O’Brien concluded ”The lack of progress towards achieving boardroom gender diversity has brought renewed attention to the question of whether companies are taking appropriate measures to provide equal opportunity to women and whether failure to do so is putting their firms at a disadvantage. Our research shows that a significant proportion of top UK executives dismiss the idea that boardroom gender diversity provides value, helping to explain why so few senior executive roles are held by women.”
is that more focus is placed on changing the role of men in the workplace, as well as making more room for women. “Too much of the emphasis on gender equality at work involves helping women to work more like men,” he says. “It is time to enable more men to work in ways that are currently the preserve of women.” This will necessitate a less vertically-driven career mind set for men according to Shuller. “Men need to stop thinking about a career only in terms of continuously moving up a vertical ladder and think positively about lateral moves, perhaps working part-time.” Before taking up his post with the University of London, Schuller was head of education research at the Paris-based Organisation for Economic Cooperation and Development.
COMING SOON March 8 is International Women’s Day which celebrates the social, political and economic achievements of women while focusing world attention on areas requiring further action. The theme for 2014 is ‘Inspiring Change’ and businesses up and down the country are planning special events to address the topic, raising the profile of contributions made by female staff to changing their industries. In March, EEF and Cranfield School of Management will publish their second FTSE 100 Women in Manufacturing report. To read ’s coverage of the first report, published a year ago go to bit.ly/FTSE100WomeninMfg. FURTHER READING: On January 21, the British Glass Makers Confederation launched it new Women in Manufacturing initiative at the Houses of Parliament in London. ’s Victoria Fitzgerald attended the event. Read her report at bit.ly/ WiMBritishGlass February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 49
A contest that clicks
Attendees at EEF’s 4th annual Photo Awards
A review of the engaging images that won the EEF’s 4th annual Photo Awards, a competition which sets out to tap into the vibrancy of UK manufacturing, challenge perceptions and capture the interest of young talent.
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ea roving vehicles, molten metal, filters and socks were the triumphant subjects in EEF’s 2013 photography competition with Lombard and the ERA Foundation. This year’s competition asked entrants to demonstrate why ‘Made in Britain’ is so vibrant, and the eclectic mix of finalists’ subjects reflected this. Now in its fourth year, the contest has widened beyond traditional steel making and automotive subjects to new areas such as textiles and FMCG manufacturing.
Prize pics
Colour was a strong theme this year, exemplified by the bright oranges and blues of ‘Completion’, Mike Smith’s eye-catching shot of a remotely operated HD plough, which lays subsea cables for offshore wind turbines. Mr Smith also won the professional category in 2012. ‘Corgi socks’ by Young Photographer entry Sophia Campion showed that winners do not need to focus on big, ambitious engineering subjects. The Jones family-owned Corgi Hosiery has been trading continuously for 121 years, and the judges enjoyed the abstract nature of this mesmerising image which displayed a terrific mix of lines and colours.
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Professional h, winner of the professional Completion, taken by Mike Smit gory cate er photograph
There was a sense of déjà vu as Robert Watkins, another winner from 2012, won a prize for his evocative black and white photos of welding industrial filters at Croft Filters of Warrington. This year he prevailed in the new mobile device category and showed that ‘vibrant manufacturing’ can mean traditional fabricating processes, although Croft is now
working on additive manufacturing techniques for its filters. And there was also a throwback to the popular fire and steel of previous years’ winners in Shane Butler’s stunning ‘Molten Man 2.0’. While these strong images of open cast forging do not at first seem to symbolise modern manufacturing, the judges rated the intensity and concentration involved in a
EEF Photography Awards
Manufacturing Leadership
centuries’ old process that is still key to modern manufacturing through the tools it produces. ’s own Arkwright Scholar Sam Doyle was runner-up in the Young Photographer category with an artistic shot of white Lotus Evora cars taken from a shelf looking down the production line, taken one-handed using a Go Pro camera.
Mobile Device Perf – ect…, taken by Robert mobile Watkins, winner of the amateur photographer category
Amateur Butler, Molten Man 2.0, taken by Shane er category aph togr pho teur winner of the ama
An inspiring vision
“It’s all part of developing the image of how important and how modern, manufacturing is and what a positive career it can be,” said Terry Scuoler, chief executive of EEF, of the competition which attracted nearly 800 entries. A bi-product of the EEF Photography Awards is to portray the diversity of jobs in manufacturing to women. “We have to be honest, we still do not have enough women in manufacturing,” said Mr Scuoler. “Encouraging young women to take the right subject choices at 13-14 years, taking them through school into FE and college and at various stages we encourage them to enter manufacturing – that’s all good. A bigger apprenticeship intake is encouraging. But there is more we can do and we need to be leading the way.”
hia Sop g n b y h e yo u n e k n g c ks , ta e r o f t y u o Y i So inn gor C o rg p i o n , w e r c a t e h m p a C t o g ra pho The EEF Photography Awards 2013 were partnered by Canon, Lombard and the ERA Foundation. February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 51
EEF Insights
Manufacturing Leadership
EEF National Manufacturing Conference 2014 Richard Hemsley, managing director of Lombard, on the need for increased capital investment and awareness of investment incentives for UK industrial competitiveness.
AIA Awareness A
refreshing optimism is colouring debate in industry as we run up to the EEF National Manufacturing Conference (p44) and as we consider prospects for the year ahead. Markit’s figures released in January demonstrate that a surge in manufacturing continued strongly at the back end of 2013, while figures from the Office of National Statistics (ONS) show that the deficit between exports and imports is narrowing. EEF’s conference theme this year is ‘Make it Britain’, a focus which should bring the importance of investment in appropriate technologies to the forefront of our minds. Strategic capital investment should support the ability of companies to make products in Britain and send them to international markets. It should also support the feasibility of growth in reshoring manufacturing to the UK. Making these investments will require appropriate and varied financing models. We are keenly aware of this need but have recently found concerning evidence that investment incentives such as the temporarily increased Annual Investment Allowance (AIA) are being underutilised by industry – specifically at an SME level where growth is all important. When the Government announced that the AIA was to temporarily increase from
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£25,000 to £250,000 between 01 January 2013 and 31 December 2014, it was hoped that this would boost the acquisition of the capital equipment and deliver growth manufacturing and other sectors. However, research carried out by Lombard in December, out of over 400 surveyed SMEs, less than a third were aware of the increase. Furthermore, only a fifth of respondents had made use of the allowance last year while 43% said that awareness of the increased allowance would have influenced their decision to invest. These figures also reflect the experiences of our teams in the field who report an overall low awareness of the temporary increase to AIA. We would encourage all manufacturers to speak to their financial advisers to ensure you are making the most of the benefit while it is still available. A very good illustration of a company that has benefited is Leicestershirebased Bluesky International, a privately owned company that provides aerial photography. At the beginning of 2013 the company purchased some state of the art equipment using a Hire Purchase agreement which enabled the company to benefit from the increased AIA. Rachel Tidmarsh, managing director of Bluesky, explains, “We will be able to receive a full deduction against our taxable
Lombard is delighted to once again act as headline sponsor to EEF’s National Manufacturing Conference. In an improving economic environment Lombard feels it is essential to raise awareness of the importance of maintaining levels of capital investment. Investing in the best technology will allow the UK to compete at its best in the most promising markets. “We have worked closely with EEF over the last three years, on both a national and regional level, to build a better understanding of the daily challenges facing UK manufacturers,” says Richard Helmsley. “This has helped us to ensure that we offer the right funding solutions to allow our customers to fulfil their goals, at home and abroad, ultimately supporting the overall recovery of the UK economy and providing a platform for sustainable growth.” The EEF National Manufacturing Conference 2014 will take place on March 4 in London. Find out more at www.manufacturingconference. co.uk profits on the first £250,000 of the cost of the equipment which for a business of our size is a substantial benefit. Significantly, it will enable us to reinvest in additional equipment that we otherwise wouldn’t have been able to afford so soon. The acquisition of additional aerial equipment will allow us to accelerate our growth plans and open up new markets for our business, particularly in Europe.” FURTHER READING: To find out more about the Annual Investment Allowance find out what saving you could realise through exploiting it go to www.lombard.co.uk/ourexpertise/aia-calculator
EEF Insights: Industry Observations
Manufacturing Leadership
Industry
observations Following the publication of Lombard’s research on awareness of AIA benefits, asked SME representatives on it Editorial Advisory Board (p02) what they thought of the findings. Here are their responses: Andrew Churchill MD, JJ Churchill I am not surprised at these findings. We use every penny of the AIA but as this is an area of policy that I’ve been seeking to influence for at least the last eight years, so I should be expected to. I would observe however, that I’ve seen no government to SME directed publicity or communication on AIAs since the substantial increase. This, taken alongside the fact that tax incentives are complex, layered and in constant flux has compounded the problem of uptake. The current level of AIA is valuable and should be used by SMEs. However, it needs to be: made permanent backed-up by a proper plan of communication (possibly with a trusted brand such as MAS). That said, the capital allowance is not really competitive when considered against the tax regimes in our peer group manufacturing economies in Europe and I would in fact urge an overhaul.
The current level of AIA is valuable and should be used by SMEs. However, it needs to be made permanent and backed-up by a proper plan of communication
Tony Hague MD of Power Panels Electrical Systems and chariman of the Midlands Assembly Network The changes in AIA were communicated dreadfully by HMRC. I’m not surprised that less than a third or respondents knew of the changes, in fact I’m surprised it was that high! In my opinion, I would seriously question the magnitude of the AIA incentive compared to the effect of confidence. or lack thereof, in influencing investment. In my view, if a company is at a point in time when it has both the confidence and the available finance to make a capital investment, it will do so. If it doesn’t - it won’t. Following this line of reasoning it’s likely that the enhanced AIA is seen by many as a potential bonus for making a decision they were going to make anyway, rather than the reason for making it – although the 43% of respondents who said they might have been influenced to invest had they known about the AIA enhancement clearly feel differently.
Pamela Petty MD, Ebac Group I would be one of those that weren’t aware of the increase. As an SME we rely on our accountants being experts in all tax matters, we meet quarterly with them to review our business and plans for the future so that they can then advise us on options.
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Lucy Spedding
EMPLOYEE OF THE MONTH
Employee of the Month February 2014 Lucy Spedding
Deputy Production Coordinator, Tata Global Beverages
CV in brief Lucy Spedding Age: 31 Education: Train the Trainer CMI (Level 2) Three A-Levels, Stockton and Billingham College Career to date: Production operator, Hibernia foods; deputy production coordinator, Tetley GB Hobbies and interests: Spending time with my 3-year-old son, shopping
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Tetely was acquired by Tata Global Beverages in 2000. The Eaglescliffe site was nominated for a Best Factory Award in 2013.
: What is your role and main responsibilities? I work in the speciality teas side of the business which is mainly herbal and fruit flavoured beverages. As a machine operator my role is to work within a team to follow the plan and produce the amount of product needed. My main responsibility is to make sure we follow the correct procedures so that we make good quality teabags, something monitored by carrying out regular quality checks. : What are the key technical skills you use? As a qualified machine operator, the technical skills I use are centred on planning and organising the production line. The workforce has to follow a plan but this can be subject to change quite quickly if an urgent order comes in. We have to be organised about which job we are going onto and account for other scenarios such as differing product amounts, so we know when we will need to changeover onto the next job. New job bags need to be ready so we can get our changeovers done efficiently. : What personal characteristics help you in your role? Being a team player helps as we are all responsible for the completion of a job. Responsibility should never just fall on one person. You need to be able to challenge things as this could improve the way things are done so new ideas are always welcome. You also need to be able to prioritise tasks to help you see what actions are more important and should be done first. Good communication skills are essential so everyone knows what’s going on; not just within our team but across the wider team of Tata Global Beverages.
: What will be your next career move and do you have a grand career ambition? I don’t have a set career ambition as I am very happy within the job I do now. But I’ve undertaken training to advance my skills to do my job to the very best of my ability. This has most recently included completing my Train the Trainer CMI (chartered management institute level 2) in team leading, which has greatly enhanced my qualities on the production line. : What first attracted you to a career in food and beverage manufacturing? I’ve worked in factories ever since leaving college 11 years ago, and I have always liked this type of work. This is partly a lifestyle thing, as the set hours appeal to me and allow me to spend time with my family. The company itself, as a big local employer and a global leader in its industry, is also an attraction. It has a strong emphasis on team ethics, and this is reflected in the people I work with. It’s a fast paced environment, particularly in the speciality production, which constantly keeps me on my toes and ensures there’s never a dull moment.
Snapshots
Workforce and skills
Serious competition James Pozzi reports on the launch of BAE Systems’ Apprenticeship Innovation Challenge
Skills Gap update 2 Cheryl Philips, director of the Design and Technology Association’s Skills Gap programme, gives an update on teacher training at Renishaw
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he Skills Gap pilot programme is developing new ways to ensure teachers deliver their curriculum requirements in a way that helps grow relevant skills and experience for industry. The pilot is being run with three schools, each matched to an industry partner which provides structured support for teachers and teaches them about the most current industrial applications for their subject matter. The D&T Association hopes this will help inspire young people to study D&T and highlight its importance as an applied STEM subject. The first formal training session for the Skills Gap pilot took place in late 2013 when staff from Marling school in Stroud were introduced to C Programming and a microcontrollers used for industrial prototyping by Renishaw. A comprehensive series of practical workshops were developed to help the teachers get up to speed with these technologies and their uses in industry. Steve Berry, head of Design and Technology at Marling school, was delighted with the training: “It was brilliant and FURTHER READING: inspiring for staff, particularly those with no previous Read more about the programming experience who skills gap pilot online at did not believe they could bit.ly/SkillsGapupdate2 achieve what they did.
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he Royal Academy of Engineering played host to BAE Systems as the UK defence giant launched its annual Apprenticeship Innovation Challenge. Taking place at the Royal Academy of Engineering’s Carlton Terrace HQ in the heart of London, the venue was a fitting showcase for the ingenuity of BAE’s next generation. Six teams of apprentices from the defence company demonstrated dexterity in tackling briefs from Help for Heroes and The Royal British Legion to build a new hand-bike for disabled athletes or a device to support the posture of disabled sailors. The competition exhibited the full scope of BAE’s UK operations; with participants from its Barrow, Glascoed, Rochester, Scotstoun and Warton units vying for top honours. Given just nine months to choose, research, design and build their product, the participating teams presented their solutions to a panel of judges, who picked the winner based on their project management abilities, application of life-cycle-management and teamwork. With BAE having recently announced a 2014 recruitment drive for 568 apprentices its group managing director Nigel Whitehead said both the scheme and the innovation challenge were of high importance. “It’s not just important to me that our apprenticeship scheme works really well, but that it is seen as a benchmark for other apprenticeship schemes in the UK,” he commented.
It’s not just important to me that our apprenticeship scheme works really well, but that it is seen as a benchmark for other apprenticeship schemes in the UK Mr Whitehead, who started his own career as an apprentice, added: “One of the runners up from 2011’s competition, BedFleX, went on to achieve the Chairman’s Gold Award. And for those not at BAE Systems, that is serious. So our hats go off to them. Everyone knows this is a serious competition with serious outcomes.” February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 55
Standard Staying the right side of the UL standard in the US and North America. Tony Hague, managing director of PP Electrical Systems, explains why compliance confusion can be costly for machinery manufacturers.
UL 508A applies to any company that is supplying control panels or building machinery for export to the United States and North America
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s a manufacturer of machinery, how confident are you that you are meeting the legal and technical requirements of the US and North American markets? Confusion in respect to UL508A and NFPA standards can be extremely costly. As a specialist in electrical control systems and automation – with 15 years’ experience of designing and building systems to meet (Underwriters Laboratory) UL508A standards – at PP Electrical Systems we are amazed at the level of confusion that still shrouds what does and does not constitute a UL certified product. UL 508A certification is an industrial control panel directive, which is sought by electrical inspectors. The UL 508A Listing Mark on an industrial control panel provides evidence of third party certification to the municipal inspection authority and to the purchaser of the panel. In essence, it shows that the panel complies with an acceptable safety standard. This applies to any company that is supplying control panels or building
machinery for export to the United States and North America. This could be firms involved in food processing or packaging equipment, machine tool manufacturers, pharmaceutical, scientific or semiconductor plant. It can carry a far reaching remit.
Vendor beware
We have customers, past and present, who believe that by simply selecting components that are UL listed and integrating them into a control panel that also carried a UL (NEMA) rating, that was the start and end of the exercise. In fact, a number of machinery manufacturers have adopted this approach and depending on which US states
UL standards
they have been exporting to, may have managed to escape any serious issues. But that is until they come across a more stringent inspection, whether state specific or just a more detailed and thorough site inspector. Then the problems then can be huge. There will be re-working, supplying new components and even the time and financial cost of dispatching engineers on a plane to go and sort out the problem as quickly as they can. And this isn’t even taking into consideration consequential penalties from the customer due to late installation of machinery and the impact this can have on future business relationships. All of these issues can be easily avoided by taking a more proactive approach and working with companies that can offer a complete UL solution in line with specific needs. Prior to manufacturing a ULapproved electrical panel, we will first undertake crucial checks of customer’s submitted designs. Some examples of checks and considerations and the common issues of non-compliance are described below. It is very important that the design is checked for compliance with the UL 508A standard prior to manufacturing the panel, in order to ensure UL compliance and thus enable us to apply a UL mark to the electrical panel. Defining the required SCCR (short circuit current rating) Electrical panels must be designed to achieve a rated minimum short circuit current rating. A 5000 Amp prospective symmetrical fault current rating will be sufficient in many cases. Some applications require a much higher SCCR and these higher fault current withstand ratings can be achieved with the right design. The SCCR is one of the most important electrical panel design factors as AHJs (US Authorities Having Jurisdiction) can prevent connection and use of an electrical panel if its SCCR rating is not greater than the symmetrical fault current rating of the power supply that it will be connected to. Voltage rating and end customer site electrical power network configuration Electrical panels will normally either be connected to a single-phase 115V or
Manufacturing Technologies
three-phase 460/480Vac 60 Hz public power supply network in the USA. Sometimes system voltages of 575V or even 690Vac three phase may be seen. Power network connections may be star or delta configuration and the point of connection could, for example, be a ‘grounded delta’ supply. Further design considerations here will include adequacy of proposed transient voltage surge suppressor modules or components. In the case of a grounded delta network configuration for example, prospective transient impulse voltages of 6 kV can appear between incoming phases and the panel’s earth connection (perhaps due to a nearby lightning storm or switching on and off of large electrical loads on the local power network). The electrical panel rated impulse voltage withstand rating requirement will be agreed and the design checked to ensure it complies. Note that standard UL compliant electrical panels will be rated up to 600Vac maximum (normally 115Vac, 230Vac or 480Vac). Connection to a 690Vac power network requires special assessment and design. AHJ’s can prevent connection of electrical panels that do not have suitable impulse voltage withstand rating. Wire bending space Electrical panels must be designed to provide the necessary minimum wire bending space in accordance with UL 508A requirements. The bending space is the distance between a field wiring termination point inside the panel and the directly opposite metal wall of the panel. The distance required depends on the ‘ampacity’ (current rating) of the field wiring cables. AHJ’s will prevent connection of electrical panels that do not have sufficient wire bending space. Clearly, the cable size calculation is important and it can affect the dimensions of the panel in some cases. US NFPA 70 NEC and NFPA 79 code compliance The UL 508A standard incorporates many requirements that are derived from the US NFPA (US National Fire Prevention Association) standard no. 70 - the ‘NEC’ (US National Electrical code). An example is cable ‘ampacities’ (current ratings). Whilst checking an electrical panel design to the many
Some benefits of incorporating an electrical control panel carrying the UL 508A certification include: The UL 508A certification provides the inspection authority and your customer evidence that the control panel complies with nationally recognised safety standards, which ensure public safety and compliance with national and local electrical codes Manufacturers that carry the UL 508A certification are subject to periodic unannounced inspections of their facilities by UL personnel. Through periodic audits, UL makes sure the manufacturer continues to meet the UL requirements for 508A certification The UL mark on a component means that UL has evaluated and tested samples of this component and has concluded that they meet the necessary requirements, thus protecting the quality and integrity of the control panel.
clauses of the UL 508A standard, this does not guarantee that a design will be in accordance with the relevant NEC articles and many of these are application-specific. This is yet another example of where electrical panels can be prevented from connection to an electrical supply by the authorities, if they are found to be noncompliant with the US NFPA 70 NEC or NFPA 79 machine safety codes. As you can start to see, there’s a lot to take in when considering all of the implications associated with UL508A and the potential significance of getting it wrong. @pp_electrical
FURTHER READING: A longer version of this article is available at bit.ly/Standarderrors
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 57
Prepare for Industry 4.0 “I
Dr Graeme Philp, CEO of Gambica, the trade association for automation technologies, sets up the debate for delegates at Automate UK and identifies the principles which will enable the creation of factories of the future. 58 www.themanufacturer.com | February 2014 | Issue 1| Volume 17
t’s time to move off the well-worn path of improved repeatability, quality and general manufacturing efficiency when we talk about automation in manufacturing,” asserts Dr Graeme Philp as we talk ahead of Automate UK, an event for users of process and industrial automation which Dr Philp will chair on February 25. “To really inspire and extract the maximum potential from automation investments we need to be aware of more strategic and innovative uses of automation,” he continues. “How can automation support the reshoring of more manufacturing to the UK? How can we use wireless networking technologies, associated with the establishment of Industry 4.0, to increase flexibility in plants and factories, rather than simply improving our ability to make the same part over and over again?” Philp knows that this line of discussion is challenging, with limited proofs of concept to point to. “I know that the case studies we have at this iteration of Automate UK are unlikely to be able to demonstrate much in terms
of realisation of these kinds of benefits of automation,” he admits. “But it is very important that we lay down the challenge. We need to put a clear idea around what the factory of the future will look like and identify the principles already being used in industry which will help get us there.” Philp has sympathy for the weary manufacturer being bombarded day by day with news of ‘the next big thing’ which will transform their industry. Especially when the same promise of transformation seems to have been made for years with little noticeable change. But he does have an answer to cynics. “We are certainly still at a stage with the Industry 4.0 vision which means there is more technology push than industry pull,” he acknowledges. “But this is inevitable because you have to understand that this vision is not based on a single technology offering, but on a suite of networked technologies. These are at varying stages of technology maturity and, while islands of excellence in the exploitation of isolated technologies do exist today, we will not
Automate UK
Automation trends Recent research into automation investment trends in UK manufacturings showed: Improving business efficiency is the most common reason for investment
Just 17% of respondents are using automation to achieve factory flexibility today
43% of respondents invested in automation in 2013 compared to just 3% in 2010 Around a quarter of reported investments cost between £100k and £250k
33% of reported projects achieved ROI within 3 years
25% of respondents are planning on spending more on automation this year This data is sourced from the Annual Manufacturing Report 2013 available to download at www. themanufacturer.com/reports
Manufacturing Technologies
It’s only with the advent of wireless digital networking and the introduction of technologies developed in the mobile phone industry that decentralised computing has really become achievable in rugged environments truly be able to understand the benefits of Industry 4.0 untill we are able to bring that full suite together.” So should manufacturers bother investing in automation offerings which claim to be essential to the factory of the future today? “Yes. There are elements of the Industry 4.0 suite which are have been around for some time and which end users can be innovative in reaping more benefits from.” As an example, Philp points to the wireless networking of sensors for process automation. “There is enough proprietary product around now to allow industry-led innovation,” he states – and manufacturers should not be put off by the fact that plant have been promised distributed computing power from their investments since the 1970s he continues. “It’s only with the advent of wireless digital networking and the introduction of technologies developed in the mobile phone industry that decentralised computing has really become achievable in rugged environments like manufacturing plants – if you need a fan to cool a processor it can’t really be placed in a rugged environment very usefully.” This thought moves Philp on to another potential game changer that has seen boom and bust in terms of technology promise and slow delivery – energy harvesting. “Again this has been talked about for some time but the appearance of really usable technologies in the past three years has been significant. As a whole I would put energy harvesting at a technology readiness level 4-5. So there’s some way to go, but those looking at next steps for investment should keep in touch with developments in this area.”
Automate UK and AAB Graeme Philp is also keen to use Automate UK as a call to action for both technology vendors and users to support the establishment of an independent council in the UK to drive the progress of Industry 4.0 technology adoption. Gambica recently joined ’s Automation Advisory Board (AAB) with a view to taking this mission forward. “The UK has lacked a mechanism for pulling together automation technology vendors and users in a scenario which is not vendor driven,” observes Philp. “This is not the case in Germany where there is a structured council with about 100 members, comprising users and vendors and other stakeholders, which regularly comes together to facilitate education and plan the implementation of Industry 4.0.” Philp does not advocate a copying and pasting this council structure in the UK but he does see the establishment of a British equivalent as critical to the future competitiveness and relevance of UK manufacturing in a world affected by parallel trends for globalisation, localisation and mass customisation. “We need to establish a structure which is sympathetic to British industrial culture but which is equally effective in achieving the results the German system can already display. AAB may be part of the answer,” he concludes. www.themanufacturer.com/ automation-advisory-board
FURTHER READING: A longer version of this interview with Dr Graeme Philip is available at bit.ly/PrepereforInd4-0
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 59
Automation Case Study
Manufacturing Technologies
We are specialists at solving quirky problems for unusual applications
Automation with vision
A creative machine builder minimised equipment footprint with a hanging ABB robot at contact lens manufacturer CooperVision.
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cell measuring just 0.8 by 1 metre, with an ABB IRB 120 robot hanging upside-down from the ceiling, is used at global contact lens manufacturer CooperVision’s R&D facility in Southampton. The cell provides a reduced cycle time of 30% by enabling faster transfer of soft contact lenses, which CooperVsion makes for customers in around 100 countries worldwide, between the moulding and curing processes. “I wanted to make the most of the available space and suspending the robot from the ceiling seemed the best way to minimise the footprint,” says Rod Mitchell, technical director of Midlandsbased machine builder Notio. His company specialises in bespoke solutions for applications where production equipment is not readily available. “We are specialists at solving quirky problems for unusual applications, typically the ones that larger companies are reluctant to tackle because there is too
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I wanted to make the most of the available space and suspending the robot from the ceiling seemed the best way to minimise the footprint Rod Mitchell, technical director
much engineering and not enough sales involved,” asserts Mr Mitchell. Notio does the whole job - drawings, sourcing of parts, documentation and everything else up to commissioning.
A visionary approach
CooperVision’s Southampton facility, where the new robotic cell is installed, develops production processes a wide range of lens types for introduction into serial manufacture in the company’s plants worldwide. The robot used, the ABB IRB 120, is a small multipurpose industrial robot that weighs just 25kg and can handle a
payload of 3kg. It is also certified for ISO 5 cleanroom areas (Class 100). The robot was selected for its small size and speed; the requirement was eight parts in ten seconds. The cell is made even more cost-effective as the robot’s built-in controller is used to manage the whole cell, eliminating the requirement for a PLC as well as an HMI. The cell at CooperVision is used to transfer contact lenses moulded to curing. It’s a process which requires high precision as well as high volume.
Time and space saver
The robot cell has been introduced to remove a manual step from the process, saving time and freeing up staff. The reduction in cycle time has been achieved by using the robot to transfer parts from the injection moulding process that arrive in batches of eight, to a tray with over two hundred parts, which are placed and orientated to a specific pattern ready to go into the cure process. As the target tray is fairly large, this impacted on the footprint of the installation and the solution was to suspend the robot from the ceiling of the cell. “Operating the robot from the ceiling of the cell was a novel idea to us. It’s a creative approach that saves space, the whole cell now takes up no more footprint than the robot baseplate,” says Robin Frith, R&D project engineering manager at CooperVision. Looking forward, Mr Firth anticipates a varied working life for the cell, maximising the return on CooperVison’s investment. “The cell will be used for about a year here,” he says. “But it’s quite an adaptable cell so we will probably reconfigure it and get more use from it somewhere else.” FURTHER READING: A longer version of this article is available at bit.ly/AutomationwVision
Automation Case Study
customer confidence
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stablished in 2005 Cotswold Manufacturing, which makes doorsets, doorkits and screens, recently invested in new automated equipment in order to streamline its production process. Ken Napper, who with Stuart Burnett and Barry Ditchburn is one of the company’s three founder owners and directors, explains: “In 2008 we took the decision to make a £200,000 investment in a five axis CNC machines with a robot arm to load and unload the doors into the machine. This made us the first joinery company in the UK to bring in a robot to work in conjunction with a CNC machine.” Napper says this piece of technology leadership helped the company gain significant efficiencies and kept it moving forward competitively. Customer service is fundamental to Cotswold Manufacturing and attention to detail and delivering increased productivity are important factors in ensuring that customers receive their orders on time to the quality they expect. The investment Cotswold Manufacturing made in a leading technology solution has successfully enhanced consistency, quality and capacity safeguarding and improving the customer service it is able to offer.
Manufacturing Technologies
A case study from asset financier Lombard regarding the automation investment at Teeside-based Costwold Manufacturing.
The CNC is robotically controlled within an IT network which is fully integrated across all functions of the company. Cotswold Manufacturing has ambitious growth plans and the introduction of the automated system has helped the company to establish itself as a core supplier. Napper explains: “Our lead on innovation with our ability to provide unrivalled accuracy has captured customer confidence. Our proven commitment to quality and sustainability has enabled us to grow and offer greater job security to all our employees.” The company anticipates a period of growth over the next 18 months and to take a greater share of the market. As a consequence it hopes to increase its staff numbers from the existing 59 person workforce to accommodate this growth, including offering a number of apprenticeships. The company also puts a great deal of emphasis on ongoing training to ensure that its employees are skilled to deliver the standards its customers require. This includes training in the use of automated equipment. Napper concludes: “In order to enable the UK to reduce imports and start making more goods domestically it is important to have the right
processes in place in order to provide a reliable service. Automation is the way forward in moving towards this becoming a reality.”
About Lombard Lombard is the largest asset financer provider in the UK and was voted Best Leasing & Asset Finance Provider by Business Moneyfacts for five consecutive years from 2009 to 2013. Lombard provides a range of different asset finance options to businesses of varying sizes – from SMEs to large multinational corporates. Products range from Hire Purchase, Finance Lease, Operating Lease, to Sale and Leaseback, as well as multi-specialist divisions that providing funding for sustainable energy, marine, aviation and technology products. Security may be required and product fees may apply.
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 61
Automation Case Study
Manufacturing Technologies
Robots provide exceptional flexibility in complex handling operations at very reasonable cost Steve Badger Director of Secure Technologies
About Omron Established in 1933, Omron Corporation has more than 35,000 employees in over 36 countries
Swab-bot To eliminate tedious manual handling in the manufacturing process for water-testing swabs, manufacturing automation expert Secure Technologies has developed an efficient and costeffective solution based on an Omron SCARA robot.
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he swabs, which are manufactured by one of the world’s leading healthcare suppliers, resemble cotton buds with a specially formed end and are first dipped into a liquid reagent, and then allowed to dry for several hours. After the drying process is complete, each swab is placed in its own test tube. Until recently, the process was extremely manual, which is not only time consuming, but also repetitive and boring. “Industrial robots are often thought of as expensive and complicated,” said Steve Badger, a director of Secure Technologies, “but the truth is that robots provide exceptional flexibility in complex handling operations at very reasonable cost.”
Simple and flexible
Swabs emerging from the production line fall onto a conveyor where their position is determined. The robot then picks up each swab and transfers it to a 500-compartment tray, ready for dipping. When the tray is full – a process that now takes just eight minutes compared
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with the 30 minutes or more needed for manual loading – the robot dips it into the liquid reagent and then transfers it to the drying shelves. At the end of the drying period, the same robot retrieves the trays of swabs and unloads them one row at a time, each row being made up of ten swabs. Finally, the robot transfers the swabs to a vibratory feeder that conveys them to the test tubes. Between processes, the robot automatically changes the end effector that it uses to pick up the swabs from a type that handles swabs individually to a type that handles ten swabs simultaneously. This is an excellent example of the versatility and flexibility that can be achieved easily and economically with robot-based solutions. A touch screen operator interface unit is used to display real time performance information, as well as historical operational statistics. The screen is also used as the front end for a sophisticated engineering diagnostics and programming toolkit.
A global leader in the field of automation, Omron provides a comprehensive sales and support service for a vast range of industrial automation products including control components, switches and relays, sensing and safety products, automation systems and drives. For more information, visit Omron’s website at www.industrial.omron.co.uk
Exceeding expectations
Before it was delivered to the end user’s site, the performance of the new system was carefully evaluated using product samples – 10,000 swabs were processed and the results 100% checked. The result was remarkable; not a single defect was detected. Furthermore, the system has exceeded its target of producing at least 1,500 swabs without any manual intervention. On average, only one manual intervention is needed per 16,500 swabs. “While it would have been possible to develop a handling system that didn’t use robots for this application,” said Steve Badger, “it would have been bulkier, less flexible, more complicated and more expensive.
FURTHER READING: A longer version of this article is available at bit.ly/Swab-botOmron
Automation Case Study
Keeping Britain in business Martin Walder, UK manager, industries at Rockwell Automation talks to about the potential of Automation to boost instances of reshoring to the UK and keep British industry globally competitive.
: What’s driving the development of industrial and process automation technologies today? Automation solutions are developing in parallel with growing demand, in many markets, for ever higher levels of customisation in ever shorter lead times. This means that investment in automation should not be led by traditional considerations for improved repeatability or efficiency alone – but also flexibility.
Manufacturing Technologies
Flexibility requires intelligent automation where the smart factory and smart devices become an extension of the on-line consumer to business communication in this one Global Internet of Things. Rockwell Automation was at the forefront of Internet of Things connectivity in the industrial space as early as the 1990s when it pioneered EtherNet/IPTM networks. This allowed for the networking of industrial devices in order to raise efficiency within plants by sharing realtime information on the status and health of equipment for plant-wide optimisation and reduced down time. : Chinese manufacturers are investing heavily in automation as they seek to move up the industrial value chain. Does this threaten the future of factories in the UK? Whilst it may be easy to share data across the world in milliseconds it’s still slow and expensive to transport bulky goods halfway around the world, and far from green! So, no – I can comfortably state that highly automated, well-run manufacturing centres have a long term future in the UK. What’s more, forward looking manufacturers that use modern automation techniques to produce a good product cost effectively for the home market will often find that overseas demand will follow. The associated increase in UK exports helps create wealth for the country and economic sustainability for our long-term. : Do you have any examples of companies that have successfully protected the future of their UK factories by investing in Automation? Yes. A company which springs to mind is PZ Cussons, which makes personal wash products. It recently invested in a state of the art high speed liquids manufacturing facility which significantly increased capacity and delivers a more efficient process. PZ Cussons told us that the savings achieved by this automation project vindicated its decision not to move manufacturing to alternative locations outside of the UK. : Why were alternative sites being considered for PZ Cussons? It became obvious that the old UK site, which had grown organically over time, was unable to deliver the production
PZ Cussons told us that the savings achieved by this automation project vindicated its decision not to move manufacturing to alternative locations outside of the UK
volumes at a cost which still made sense to the company. In addition, as demand grew, straining capacity on the old line, quality was being affected by the need for increasing operator intervention at practically every stage of the production process. In order to safeguard jobs and UK production, investment in a new process plant with more reliable, efficient technology was the only way forward. PZ Cussons chose Rockwell Automation for its Integrated Architecture offering and worked with our Alliance Partner Endress+Hauser to complete the investment project. The ends result has been increased process visibility and control. Almost every stage of the recipe creation process as well as the mixing, processing and packaging lines was automated, bringing significant savings. FURTHER READING: Read more about the technologies PZ Cussons implemented at bit.ly/ PZCussonscasestudy
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 63
Automation Case Study
Manufacturing Technologies
The new automated production system has taken crash test failure below 0.1%
Axis of efficiency Automation first timers at TRW Systems Peterlee found an investment in a cell sequence populated with Staubli robots increased efficiency, reduced failure rate and was warmly embraced by staff.
T
RW Systems, Peterlee, County Durham is a global leader in automotive safety, manufacturing intelligent systems for all the leading automotive OEMs that help to keep passengers, drivers and pedestrians safe. When a new production line for airbag control sensors was required, TRW turned to St채ubli and their system integration partners Grohmann and IPTE to provide the robots required in the automated sequence of cells. TRW had manufactured airbag control systems for several years using a combination of in house and outsourced components for the final assembly. Increased demand and an objective of bringing more of the supply chain
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in house generated the need for new investment in a dedicated manufacturing line however. Initially, a manually based system was considered but when TRW looked into the economics of using multi axis robots, a decision to fully automate the new line with a combination of four axis and six axis robotics provided the best cost solution.
The automated process
The new line consists of several connected cells each using St채ubli robots. The initial operation inserts a metal bush into the PCB performed by two TS60 4 axis SCARA robots: the first picking up the metal insert and placing into position and the second pressing the bush securely into place on the PCB.
The boards then pass into the adjacent cell where the electrical contacts are inserted into the PCB. After this process the individual sensor components are separated from the board and proceed to a vision checking station handled by a TS60. The position of the electrical contacts is extremely critical and needs to be within +/- 0.1mm to ensure correct operation of the sensor. After passing through a heating station, the sensor components enter the overmoulding cell serviced by two RX160 six axis robots. These were chosen by TRW for their exceptional reach and speed of operation. The RX 160s execute the fast demoulding, positioning and placing required, all within the IMM cycle time of just 30 seconds. Each component is then fed by the robots into a final functional testing station which replicates the shock that would be experienced in a crash; a response time of just 19 milliseconds for the airbag signal to be emitted is required. Failures at this stage are rare with the new production system less than 0.1%. This is a big improvement on the old system.
Back for more
This was the first investment in automation using multi axis robots at TRW Peterlee and initially there were some concerns about ease of use and the training that could be required. These fears soon proved groundless however, with the operators recognising and embracing the benefits of the new system. With a payback of less than one year, TRW has been impressed by the performance of the automated line and particularly the St채ubli robots. A second line with the same level of automation is now planned. FURTHER READING: A longer version of this article is available at bit.ly/ AxisEfficencyStaubli
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Business Excellence Through Inspired People
Not your father’s CRM CRM has changed. Manufacturers are pushing the envelope in extracting value from a new generation of systems discovers Malcolm Wheatley.
S
pend any time talking to those who are close to the topic of Customer Relationship Management (CRM), and it’s not difficult to detect the new buzz surrounding the topic. CRM has come a long way – and today, it is delivering a suite of benefits firmly outside what was originally seen as its core area of competence. CRM used to be about large and often consumer-facing businesses, and generally involved a heavy emphasis on salesforce automation. But these days, that characterisation of CRM no longer fits. “There’s a strong realisation that CRM isn’t just about salesforce
What does it mean to me? If you’d like to find out more about the potential of CRM to help your business, or discover new ways to exploit value in an existing system, attend CRM Connect on May 6 in London. Contact Sarah Hough (s.hough@ sayonemedia.com) on 0207 401 6033 for more details.
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automation anymore,” says John Hammann, industry value engineer for manufacturing at SAP. “We’re starting to see companies which are seeing applications for CRM that sit quite outside the job of managing and monitoring the sales cycle.” Aidan Salter, managing director at CRM and lean manufacturing experts The Consultancy Company, agrees. “CRM is being used much more imaginatively,” he notes. “And it’s not just the sales and marketing people using it – it’s a much broader set of people within the business, all working with CRM to achieve more within their own particular roles.” Look closely, in fact, and you’ll not only see CRM being effectively deployed in a B2B context, but also being used to capture marketing and product design information, and to offer aftersales service and highly targeted pricing and bundled deals. “We have a client utilising CRM to take information about how customers are using products, and providing that information to the people designing those products - and seeing in CRM a way to short-circuit the enormous number of barriers that normally exist between customers and designers,” says The Consultancy Company’s Salter.
Even more impressively, businesses are using CRM to manage not just customer-facing relationships, but also relationships between suppliers, stakeholders and other third parties. In short, they’re taking CRM and pushing its capability envelope, stretching its remit and testing the limits of just how much CRM can deliver.
Fresh ideas
So what new challenges are businesses throwing at CRM? And in which ways are they pushing the envelope? At CRM specialists The CRM Business – Microsoft’s number one partner in Europe for cloud-hosted CRM – marketing manager Becky Carr points to Microsoft Dynamics CRM’s tight integration with the ubiquitous Microsoft Outlook corporate e-mail and workflow client as the basis for extending CRM’s capability set. “We see customers initially use the product for customer interaction, and then discover that the level of integration with Outlook is so good that it makes sense to use the combination of CRM and Outlook for other types of communication – such as with suppliers,” she says. “The integration is so good that it can be difficult for users to see where Outlook ends, and CRM begins.”
Customer Relationship Management
SAP’s Hammann makes a similar point, highlighting that SAP knows instances where businesses are using CRM to manage the process of preparing a bid or tender, seeing in it an ideal way to bring together all of a bid’s stakeholders, including sales people, technical specialists, finance people and any external third parties, in a structured and organised manner. “Centralised information, the ability to see ‘one version of the truth’, communication tracking, and integration with other systems are all key wins for manufacturers, allowing employees across departments to view historical activity and information relating to each of their contacts,” notes The CRM Business’s Carr. “What’s more, Microsoft Dynamics CRM now includes dedicated smartphone and tablet applications as standard, making it really easy for users to record and access information whenever they need it.” Indeed, adds John Anderson, CRM pre-sales consultant at specialist Microsoft Dynamics ERP and CRM provider M-hance, with Microsoft Dynamics CRM 2013’s ability to run on Android, Surface and iPad tablets and devices, CRM really has become a ‘go anywhere’ solution, taking the enterprise backbone direct to a customer’s premises. What’s more, he points out, it is also capable of being tightly integrated with ERP systems other than Microsoft’s own Dynamics ERP. At family-owned multi-fuel stove and chimney specialists AJ Wells & Sons – owner of the ‘Charnwood’ range of multi-fuel and wood-burning stoves – M-Hance has recently integrated Microsoft Dynamics CRM with AJ Wells’ Syspro ERP solution.
IT in Manufacturing
As long as CRM systems have been around, the challenge has been getting the user buy-in that is fundamental to their success. ‘Gamification’ tries to make ‘systems fun to use Cassandra Whobrey UK Product Manager for Microsoft Dynamics CRM, Microsoft
The combination of ERP and mobile CRM has enabled AJ Wells to deliver orders a week earlier than previously. Self-service, too, is fast becoming a CRM ‘must have’, notes Charlie Shaw, managing director of Esteiro Business Solutions, developers of the Gold-Vision CRM solution. “Thanks to the ubiquity of Internet sites such as Amazon, companies are finding that their customers are quite happy to use self-service systems to find out when their orders are going to be delivered,” he says. “Previously, businesses saw CRM as an optional extra. Now, they’re realising that it can enable them to do things that more usually require ERP.”
Games people play
Even so, any new system will only deliver value if people actually use it. And as many businesses know to their cost, that’s not always easy. Look at the reasons behind failed ERP and CRM implementations, and there’s often a failure of adoption involved. Simply put, people carry on doing things outside the system, with paper documents and spreadsheets,
There’s a strong realisation that CRM isn’t just about salesforce automation anymore John Hammann Industry Value Engineer for Manufacturing, SAP
rather than embracing change. Hence the interest in another way that CRM is pushing the envelope, using a concept known as ‘gamification’ to encourage user adoption, explains Cassandra Whobrey, UK product manager for Microsoft Dynamics CRM. “As long as CRM systems have been around, the challenge has been getting the user buy-in that is fundamental to their success,” she notes. “‘Gamification’ tries to make ‘systems fun to use, so that users actually want to engage with them.” First, though, those IT executives actually buying and implementing new systems have to accept the logic of gamification – and James Fleming, group IT director at hi-tech plastics manufacturer Victrex, freely admits to sniggering slightly when he first came across the concept at an IT conference. “But the more we thought about it, the more we realised that it could perhaps solve the problem of user engagement,” he recalls. And so it proved. When implementing Microsoft Dynamics CRM through fixed-free CRM specialists Zero2Ten, Fleming had an element of gamification added to the package, with users being awarded points for each system interaction. It was a tactic that not only encouraged interaction, but also incentivised users to explore all the new system’s options and tools, in order to maximise their interaction and thereby earn more points. “There are prizes for people with the most points, and the more they use the system, the better they get at it,” sums up Fleming. February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 67
How do you maximise the ROI of an investment in a Manufacturing Execution System? Fraser Thomson, automation and Manufacturing Execution Systems consultant at Cimlogic, outlines the questions to ask.
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Quest for value A ccording to some estimates, the global market for Manufacturing Execution Systems (MES) is growing at almost 14% a year, and will reach $8.9 billion by 2016. Undeniably, such figures underscore the growing importance that is being placed by manufacturers on addressing what is increasingly seen as manufacturing’s missing link – the gap between a company’s production plans, and the means of bringing those plans to fruition. For as the name implies, the role of an MES is to do just that: take a customer order at the ERP level, and translate it into manufacturing instructions on the factory floor, thereby turning aspiration into deliverable reality. But more than that, and just as importantly, MES acts as a system of record, capturing a wealth of data about what happens on the factory floor, and transforming it into productivity-boosting dashboards, charts, and performance metrics. But the stark reality is that an investment in MES isn’t a one-way bet. MES implementations can, and do, fail. MES implementations can, and do, underperform on expectations. And MES implementations can, and do, become
MES implementations can, and do, fail. So how is a manufacturer to avoid such an outcome?
less and less relevant to a business’s current requirements. Put another way, you don’t have to look too far to find MES implementations that are seemingly functional, yet which are delivering little of value. In such situations, the usual problem is that the MES capability in question was bought and implemented to meet what were seen as the MES requirements at the time. Turn the clock forward a couple of years or so, and that initial MES requirement has been overtaken by events and business change. So how is a manufacturer to avoid such an outcome? What steps can they take to ensure that their particular MES implementation is counted as an undoubted MES success? And one with an ROI that has been maximised? Cimlogic recently-published its free-to-download guide entitled 20 tips when selecting an MES system and
Manufacturing Execution Systems
IT in Manufacturing
integrator. It’s a guide which seeks to demystify the process, and answer such questions. Simply put, it urges manufacturers to carefully consider three aspects of a proposed MES implementation. First, the product itself. Second, how the business’s own requirement roadmap matches the vendor’s technology and development roadmap. And third, the proposed implementation and implementation partner. Let’s look at each in turn.
Product-specific issues
When considering product-specific issues, manufacturers will have two broad areas of concern. One is to do with the product’s breadth, structure and antecedents. The other relates to their own immediate requirements, and how the proposed product meets those requirements. When considering a product’s breadth, structure and antecedents, for instance, manufacturers will want to know who owns the product, where it came from, and how it got to where it is today. Is it a single system, developed from the ground up, or is it a series of different systems, perhaps from originally different vendors which have now merged together? And to meet its own specific requirements, what exactly does a manufacturer have to buy? An entire system? A single module? Or multiple modules? How is integration with other systems – ERP and quality, for instance – to be achieved? What are the hardware requirements, what are the fault tolerance requirements for this hardware, and should such hardware be virtual or on-premise? Finally, turning to the product’s vendor, manufacturers will want to be assured that the vendor is financially stable and creditworthy, has security and other policies that are acceptable to them, and offers acceptable maintenance and upgrade practices. What’s more, in our view it’s always wise to choose a vendor for whom MES is a core line of business, not an afterthought.
Where are we heading?
As consumers, most of us buy products that match with our existing needs. With their long life spans, enterprise applications are different, and especially
It’s always wise to choose a vendor for whom MES is a core line of business, not an afterthought so in the case of manufacturers venturing into MES for the first time. A manufacturer might start with modest requirements – electronic batch records, for instance – but find in two years’ time that they would like to add an Overall Equipment Effectiveness (OEE) capability, and a quality capability. It’s obviously bad news if your chosen MES doesn’t offer those capabilities. But it’s even worse news if the vendor’s technology roadmap makes it clear that the vendor has no intention of offering that capability—ever. Likewise, the same goes for a hosted, cloud-based Software as a Service offering, support for mobile devices such as tablets, and SMS alerts. In short, take a long, hard look at your own likely requirements roadmap, and an even harder look at the relevant vendor’s roadmap. Are the requirements you need on offer? And what are the upgrade costs?
Implementation issues
Finally, a manufacturer needs to think about how they want their new MES system implemented. How well-equipped with implementation staff is your proposed vendor or implementation partner? How well qualified are they? What experience do they have? How much postimplementation support will you get, and how will it be charged?
More fundamentally, what sort of implementation do you want? Quick and inexpensive, or protracted and detailed? And what implementation methodology will be used? Consider, too, the approaches that will be taken to testing. Will there be a small scale ‘conference room pilot’? Will other forms of simulation play a role? How is the switchover to be managed, and how is the integration with ERP to be handled?
Bottom line
In many cases, the answers to such questions, ranging from the product itself, to the vendor’s technology road map, and the approach taken to integration, will be straightforward. In other cases, less so, and in still further cases, the answers will be disturbing enough to prompt either a more searching dialogue, or a decision to look elsewhere. But that is what maximising the ROI of an MES implementation is all about: asking the right questions, and making sure that you get the right answers. FURTHER READING: To get more guidance on what questions to ask in order to safeguard ROI on an MES investment – and to learn how to interpret and evaluate the answers – download Cimlogic’s free guide, 20 tips when selecting an MES system and integrator at bit.ly/20tipsMES www.cimlogic.co.uk or call 01274 599955
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 69
Technology trends
Tech
IT in Manufacturing
2014
Tony Christian, director at industry technology analyst Cambashi, assess the most important technologies for manufacturing in 2014.
A
s we open 2014, fully six years into a long-running economic downturn, with only the beginnings of recovery to buoy our spirits, there’s a strong feeling of déjà vu. Our position at the beginning of 2013 was remarkably similar – patchy recovery, but not out of the woods yet. Despite the optimism which has run rife in industry commentary in January, the pressures on manufacturers haven’t let up much. This means there will be a continuing focus on efficiency and effectiveness and the technologies that will interest manufacturers in 2014 are likely to be the ones focused on delivering these benefits. Such technologies have come a long way in recent years. Manufacturers can now take advantage of unprecedented access to technical applications and collaboration tools for engineers involved in product development as well as business systems like ERP, CRM and supply chain management which drive greater efficiencies across business processes. New possibilities are also opening up in terms of what
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can be achieved through automation of manufacturing operations. The technology drivers that will continue to shape the exploitation of IT in manufacturing in 2014 are: The cloud and mobility The Internet of Things Social networking Integration The cloud makes sophisticated applications, which used to be out of the investment reach of smaller companies, eminently accessible and the major technical and business applications vendors continue to invest in making their applications available in cloudbased environments. New announcements pop up regularly; for example Autodesk, already leading the way in the technical applications space, recently introduced the latest member of its cloud-based 360 suite, CAM 360 – the first ‘CAM in the cloud’ solution. Mobility goes pretty much hand in hand with the cloud. So, in parallel with making applications cloud-based, vendors have made substantial progress in embracing
Manufacturers can now take advantage of unprecedented access to technical applications and collaboration tools for engineers involved in product development mobile devices – either as access to the enterprise applications or in the form of reduced-scale (low end) versions of applications that will run on mobile devices. The mobility/access trend approaches new heights with the Internet of Things. The possibilities for a network of smart devices all communicating over the internet are huge but while there are some great examples of exploitation for in-plant automation, the surface has barely been scratched yet. Then, whatever one thinks of social networking, those technologies are beginning to be exploited to great effect to facilitate collaboration, from new product development projects through to after-sale maintenance of products – for example, the ability for field personnel to access product information held in the PLM environment has been a major focus for Siemens PLM. While social networking is a form of integration, there have also been tremendous advances in ‘traditional’ integration between applications. Whether it’s integrating individual applications for different phases of the design and development workflow or integration between different organisations’ business systems to streamline the transfer of information, the impact is faster, more accurate and less costly business processes. It could be argued this this technological progress is accompanied by significant risks for Western manufacturers as the much greater numbers of skilled designers and engineers in emerging countries ramp up their use of leading applications to take over the ‘knowledge-based’ end of the product lifecycle while exploiting existing cost advantages at the production end. Whatever your views on this conundrum, one thing is certain - the adoption of technology for competitiveness remains a necessity.
Enterprise Resource Planning
IT in Manufacturing
Helping Techflow grow About Techflow Flexibles Location: Cramlington, Northumberland Products/services: Analysis, design, manufacture and supply of hoses for the oil and gas industry
A new ERP system is supporting growth and business improvement at Techflow Flexibles
I
n February 2013 Techflow Flexible moved into a new 183,000 sq ft manufacturing facility in order to meet the growing demand for its wide range of products and support services. But growth is not only about increasing footprint and capacity. To keep up with expanding demand Techflow identified the need for a fully integrated IT infrastructure to help maximise its profitability and support the delivery of customer satisfaction. And so, ahead of its move to new premises in 2012 Techflow Flexibles decided to replace its existing, manuallymaintain and basic IT system and install a K8 Enterprise, an integrated ERP solution which matched the needs of its technically demanding sector and the company’s growth ambitions. K8 Enterprise won out over other systems Techflow Flexibles assessed thanks to its flexibility and tailoring capabilities – it’s a standard system without the need for bespoke developments. Clearly, implementing a new system represented a major change for the company. Terry McDonnell, commercial manager, recalls: “We needed to improve the quality of our processes for everyone’s benefit. It was also essential to have accurate, real-time management information covering all areas of the business.”
Key customers: BP, Total and Samsung Markets: 90% export with Brazil and the Middle East representing two significant growth areas
One step at a time
K8 Enterprise went live in September 2012 and by taking a step-by-step approach to transform functions in each department, the company ensured that everyone was comfortable with each phase before rolling out the next module. “We took the decision to go for some quick wins, particularly in accounts and purchasing, and be able to demonstrate the benefits to everyone,” explains Mr McDonnell. “There were no major issues as we progressed. Virtually from day one, K8 Enterprise began to prove its worth.”
K8 Enterprise delivering
There is little doubt that K8 Enterprise is delivering the value and benefits that Techflow Flexibles requires. “The job card and bill of materials functions give us complete control of every order and our production planning processes have been improved and are much easier to administer,” says McDonnell. The company is also able to use K8 Enterprise to effectively manage lean manufacturing. Just-in-time ordering from suppliers is saving the company money, resulting in lower stock holdings. On time delivery has also improved. A significant aspect of implementing any new system is the extent to which a business has to adapt its processes to suit but for K8 Enterprise, Techflow
To an extent, implementing the new system was a leap into the unknown, but with the support of KCS Datawright, we were confident of achieving the results we were looking for Terry McDonnell Commercial Manager, Techflow Flexibles
Flexibles found there was a close fit, “We were able to ensure continuity and the system’s capability in terms of audit and full traceability means that controls are much tighter now, particularly if an issue occurs,” comments McDonell. Furthermore the K8 Enterprise system is just part of the story. Fundamental to Techflow Flexibles’ strategy is the continuing role of KCS Datawright as a business partner. We are going through an exciting phase of development and it is particularly reassuring to know that no matter what, we can call upon the KCS Datawright team to support us as we move forwards,”McDonell sums up. FURTHER READING: See a longer version of this case study at bit.ly/ HelpingTechflowgrow
February 2014 | Issue 1| Volume 17 | www.themanufacturer.com 71
World Economic Forum
LAST WORD
Whether it’s the shift from manufacturing to services, or the transfer from manual jobs to machines, the end point is the same dystopian vision; the East wins while the West loses; and the workers lose while the machines win
What David did at Davos Jane Gray on the prime minister’s speech at the World Economic Forum.
“T
hey say we can’t make anything anymore. “Whether it’s the shift from manufacturing to services, or the transfer from manual jobs to machines, the end point is the same dystopian vision; the East wins while the West loses; and the workers lose while the machines win. “I don’t believe it has to be this way.” These words, spoken by the prime minister at the world Economic Forum in Davos sent a shiver down my spine. Gutsy, defiant and emphatic, they echo the message that disseminates day by day and which we hear regularly from passionate, savvy manufacturing business leaders. In his address to global political and economic influencers at Davos, Cameron promised to prove the ability of the UK to respond to major trends in technology and business strategy by making it the “re-shore nation” – a demonstrator for the concept that any
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product, made in a flexible, high tech factory capable of rapid reaction to customer demand, might potentially be made in a ‘dull, old’ economy. Cameron announced the establishment of ReshoreUK to help prove the point. The organisation, run in partnership by UKTI and the Manufacturing Advisory Service, will help investors in new manufacturing capacity develop business cases for a UK location, highlighting favourable sites and potential suppliers.
Responding to evidence
Such a body has been a long time coming. Whispers that manufacturers who had offshored production to China were seeing the cost arguments diminishing and were struggling to support quality and agility have been growing for several years. It took until last year however, for any really credible analysis of the scale and motivations for UK reshoring to be undertaken – I’m thinking mainly of the YouGov survey published in July last year (bit.ly/YouGovReshoring) and the MAS report published in November (bit. ly/MASReshoring). Without this kind of research, collating instances of reshoring and their drivers, the concept is an optimistic piece of hearsay based on anecdote and government cannot be expected to pull behind such sentiment. The fact that government has acted swiftly and positively to support reshoring now that firm evidence has emerged is very encouraging. It shows that government is aware of developments in manufacturing strategy and that it is keen to use research
in taking practical action to support manufacturing growth. It is often said that the UK needs a long term industrial strategy to enhance its competitiveness in a sustainable way. This is true, but, with a long term ambition in mind, it also needs swift action that responds to market information in the short term. To give the work of ReshoreUK credibility however, government must take similarly decisive moves to reduce the cost of energy in the UK. This is the nation’s biggest detractor as a manufacturing location. At Davos, Cameron firmly sided with shale gas exploration as a means to reducing European and UK energy prices. It’s good to hear he has a plan, but it needs equally well defined backups – fracking is still a highly controversial means of extracting gas and, whatever the opinion of business, without public support this energy strategy could fall on its face.
A message to the world
Yes – flaws can easily be picked. But I for one was deeply impressed by Cameron’s speech at Davos – I’d recommend reading the full version which can be found here: bit.ly/ CameronDavos Most importantly, it expressed, on a high profile, global stage, that UK government has an understanding of the political, economic and social importance of a healthy manufacturing base and that it understands what that base should look like in a developed nation – something which cannot be said of every manufacturing business owner.
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Getting the right contract, meeting carbon targets, monitoring consumption… We understand that you need more from us than just energy. With us, you’ll benefit from a strong, long-term relationship with someone who really understands your business. And with our expert knowledge and experience, we can help you monitor, analyse and control your energy use. Our products and services are tailored around our customers, so whatever your business needs, your dedicated account manager will help you find the right solution. Find out more at eonenergy.com/corporateenergy Or call 0330 4001 089 We’re here Mon–Thurs 8:30am–5pm, Fri 8:30am–4pm
Helping our customers. We’re on it.
E.ON UK plc. Registered Office: Westwood Way Westwood Business Park Coventry CV4 8LG Registered in England and Wales No. 2366970