The Manufacturer - July Edition

November

th 12 London

Call for entries!

We know the economic environment is tough but we also know UK manufacturing is strong and resilient - if there were ever a year when the successes of UK Manufacturing need to be recognised then surely 2009 is it!

Shout about your success! And let us help you be recognised by your staff, customers, suppliers, shareholders and the wider community as a world class manufacturer.

The Manufacturer Of The Year Awards scheme is specifically designed to recognise world class excellence and best practice being achieved throughout UK manufacturing. Previous winners include Smith & Nephew, InterfaceFLOR, Bombardier Aerospace, Boss Design, Willerby Holiday Homes.

For further details contact Alexis Catchpole on 01603 671300, mail a.catchpole@sayonemedia.com or download an entry form at www.themanufacturer.com/awards. The winners will be announced during a black tie gala dinner and awards ceremony in London on 12th November 2009.

And if you are interested in sponsoring an Award, contact David Alstin on 01603 671307 or email: d.alstin@sayonemedia.com

The awards categories this year are: Leadership and strategy Design and innovation World class manufacturing Skills and productivity IT in manufacturing Logistics and supply chain Operations and maintenance Sustainable manufacturing SME manufacturer of the year

Special supplement Collaboration for success

Automotive Aerospace and defence

Collaboration between manufacturing and higher education

Food and beverage

Lead story

The recession, manufacturing now and tomorrow

Supply chain and logistics Sustainable distribution

Pharmaceutical and medical devices Export manufacturer of the year

And the winner of winners category – The Manufacturer of the Year

www.themanufacturer.com July 2009 Vol 12 Issue 6

ENTER NOW, visit: www.themanufacturer.com/awards

www.themanufacturer.com July 2009 Vol 12 Issue 6

High flying sector hits First ence turbul Aerospace and defence industry faces tough challenges

Interview Ian Godden

Chief executive officer, SBAC

Source of Supply

Editor’s comment

Government between a rock and a hard place on defence The UK aerospace and defence industry dominated the news in June. It is the second biggest aero and defence sector in the world, generating over £20bn per year in value added revenue and employing over 463,000 people directly and indirectly, according to the Society of British Aerospace Companies (SBAC). The sector has a strong global position but is under threat. Falling orders for commercial aircraft is an unavoidable function of the recession, although Airbus was pleased with its $12.3bn book of orders and commitments at last month’s Paris Air Show, which was celebrating its 100th anniversary at Le Bourget.

But the defence industry is under intense pressure as government braces itself for the spending cuts that must come following the vast borrowing deficit announced in the Budget. The new aircraft carrier programme – the first steel for which is being cut today – has ballooned in budget to an estimated £5bn (from £3.9bn) and a report by The Institute for Public Policy Research says Britain cannot afford much of the defence equipment it plans to buy. The question is, can it afford not to? SBAC and other industry commentators say contracts for expensive warships and military aircraft achieve far more than just equipping Britain to defend herself. Thousands of manufacturers supply to the principle contractors and hundreds of apprentices are taken on by contractors like BVT annually to acquire high value skills, which are also transferable to commercial advanced engineering programmes. It is precisely the high-tech, skilled sector of the economy the Government claims to want to support.

Our interview with Ian Godden, chief executive of SBAC on page 16 highlights the strengths of aerospace and defence manufacturing, and how the IPPR report fails to recognise that defence has been financially squeezed for the last two decades and that there will be serious economic effects from cutting a world-leading high value manufacturing sector. Government is between a rock and a hard place when examining big defence cuts while supporting a rebalanced economy.

Yorkshire Bank hosted a dinner for manufacturing directors in May. The discussion was led by the bank’s chief economist, Tom Vosa, who gave an insightful assessment of the economy, the exchange rate, taxation, manufacturing and signs of recovery. The discussion on pages 20-17 is a good overview of the important issues facing manufacturers and provides expert explanations for how we got here and what needs to happen to hasten a recovery. You can add your comments to the website version at www.themanufacturer.com/leadstory.html.

Will Stirling – Editor

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News and features 04 News

Manufacturing news

10 Appointments On the move

Find out who’s heading where in manufacturing

13 Just Jones

Making hospitals work

Dan Jones looks at lean in the healthcare industry

15 Economics

Dangers of slipping back

EEF’s Steve Radley investigates the economic outlook and warns against market over-confidence

16 Interview

Flight plans

Will Stirling talks to Ian Godden, chief executive of the Society of British Aerospace Companies, about the pressures facing the civil aerospace and defence industries

23 Lead story

The recession and what it means to manufacturing now and tomorrow Manufacturers and bankers discuss the recession, the new economy, manufacturing and signs of a recovery at a roundtable dinner

28 Leadership and strategy

Emerging from the post-crisis world

Infosys Technologies says leverage partner ecosystems and implement sustainability to beat the downturn

30 Design and innovation

Design as a driver of excellence

Gus Desbarats of consultancy The Alloy talks up the importance of design from concept through production

34 Special feature

How to grow in a recession

A takeover that helped a battery manufacturer hitting tough times,

by Mike Halls

38 World class manufacturing

A healthy approach to health and safety

Planned, effective health and safety is crucial to operational excellence, says Suiko’s Andy Spooner

43 Special supplement – Collaborate for Success Special feature that examines how manufacturing is collaborating with higher education

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Contents People, skills and productivity 60

Training to gain a competitive edge

The National Skills Academy for Manufacturing helped Power Panels to develop core skills that has saved it hard cash

Employee of the month 65 Andrew Fielding

At ordnance manufacturer MBDA

IT in manufacturing

IT News wrap, July 67 Enterprise mobility 68

Chris Pope looks at IT solutions for manufacturers on the move

Fastening its future 72

Stainless Steel Fasteners and Exel EFACS E/8

Pioneering change 76

Microsoft Dynamics UK’s Gary Turner discusses change management

Supply chain and logistics

Sustainable distribution 80

A more sustainable supply chain makes your company more sustainable, argues Steve Wilson at Capgemini

Digging for green gold 83

Andy Smith at Davies and Robson explains greener distribution strategies

Operations and maintenance

RFID and barcoding 86

An overview by Zebra Technologies

Gaining an insite in Iceland 88

MRO specialist Brammer tells of a spares and stores maintenance service to the world’s biggest aluminium producer

Sustainable manufacturing 92 Small could be beautiful

Dennis Frize says Britain’s small wind system industry has the potential to be a world-leader

Manufacturinginaction Factory of the month Brintons 98 Textiles Operations director Phil Ellis on how a culture of continuous innovation has seen Brintons supply carpets for, among others, Buckingham Palace and the White House

Cleaning and hygiene – JohnsonDiversey 102 Scientific equipment – Oxford Instruments 109 Power conversion – Converteam 112

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Newsinbrief Airbus UK is set to receive a £28.66 million grant from the Welsh Assembly to support the company’s development of composite wing capability and advanced manufacturing technologies.

The announcement comes 13 months after an injection of £7.5m capital into the firm’s Composite Wing programme, the Assembly Government’s largest investment in research and development to date.

Airbus UK will simultaneously fund a new on-site facility for the development of environmentally-friendly technologies.

Lord Mandelson has announced changes which will mean more firms can now purchase top-up cover as part of government’s trade credit insurance scheme. Suppliers who have had their cover reduced since October 1 last year can now purchase six months top-up cover under the £5bn government scheme. Previously, only firms that had suffered reductions since April this year were eligible.

Lord Mandelson has outlined the future of the British nuclear industry in one of his first addresses in his amended role as Secretary of State for Business, Innovation & Skills (BIS). Speaking at the UNITE Nuclear Supply Chain Conference, Mandelson praised British manufacturing encouraging it to “compete and win in a global economy” for long-term economic stability. However Mandleson also said a “thriving nuclear sector” is crucial. It currently employs some 33,000 people across the UK.

The Aerospace and Defence Industries Association of Europe (ASD) has revealed that their Common Industry Standards model for ethical practice have been adopted by over 100 UK defence companies. The Common Industry Standard is a moral code drawn up by ASD member organisations, designed to uphold integrity within the industry, guiding on matters like corruption, political donations and consultancy engagement.

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Aerospace and defence special Paris Air Show - UK exhibitors chipper despite flat aero market The Society of British Aerospace Companies (SBAC) recently released its annual civil aerospace report predicting flat growth in the civil sector in 2009. The report also illustrated that further challenges to growth are expected in 2010, including prolonged delays to orders and greater competition from emerging markets in Brazil, Mexico and China.

But despite acknowledging that orders in the civil aerospace sector were falling, several UK companies had good news to report. UK suppliers to both civil and defence markets were quietly bullish about new business. Some companies have expanded their production facilities recently (home and abroad) and some revealed improving business prospects in the key emerging markets of Brazil, China and India.

Aero Sekur, a British-owned manufacturer of safety equipment and advanced flexible structures won a contract to supply its proprietary non-pyrotechnic inflation system (NIPS) to Eurocopter HAIG. Tom Crannan, the newly-appointed head of Aero Sekur UK sales, said interest in the company’s products at the show had been very encouraging. Managing director Mark Butler said business in general for the company was brisk and that it was planning to establish a manufacturing base near Oxford in 2010 for its space landing system.

Cobham, the global communications and safety systems

manufacturer for civil and military markets, received an initial contract from Airbus to supply high gain satellite antennas (HGA) for use on single aisle and long range passenger jets. Allan Cook, CEO, said: “The selection of our high gain satellite antennas by Airbus...is a further endorsement of our leading edge technology.”

Another antenna-manufacturer Cooper Antennas, reported several big contracts. The company, which makes high performance antenna systems for airborne and ground applications, mainly supplies the US military market. With their US affiliate, Aviatech Corporation, the company had received a $7.5m contract before the show from the US Air Force for a combined Satcom line-of-sight antennas. Also with Aviatech Corp, Cooper received a second contract from Defense Supply Centre Columbus worth over $500,000. CEO Geoff Cooper, who self-financed the business in 2005/6, said so far the company’s growth had exceeded his expectations.

Makers of electrical interconnection systems, Kembrey, had booked five important meetings to discuss several new contracts at the show. Kembrey is exploring a number of opportunities globally, not all of which are within the conventional manufacturing model.

The biggest opportunity they have identified is in Brazil, where the government has offered sponsorship of military contracts with foreign partner tie-ups.

ManufacturingNews Senior BAE executive resigns BAE Systems US director, Walt Havenstein, is to step down after two years in charge at the Rockville-based subsidiary of the British defence and aerospace conglomerate.

Havenstein will formally leave BAE on September 20, having spent 10 years at the firm serving as president, executive vice president, and CEO. He is credited with leading the resurgence of the company’s American division, which now accounts for over half of global business turnover.

Havenstein will take the chief executive seat at BAE’s San Diego-based rival Science Applications International Corp (SAIC), one of the country’s largest government-service defence contractors. SAIC’s

clients include the United States Department of Defense; Department of Homeland Security; the National Security Agency; and the Federal Bureau of Investigations. The news will be greeted with relief at SAIC, given that its CEO, Lawrence Prior, jumped ship a fortnight previously to become president and chief operating officer at Mantech International Corp.

Defence industry analyst Dr Loren Thompson says such moves are indicative of a shift in leadership throughout the industry. “With the drawdown in Iraq signalling a levelling off, if not decline, in defence spending, the reorganisation of the defence industry seems to have begun,” she said.

£100m pot for aerospace and defence firms via SC21 The Society of British Aerospace Companies (SBAC) is urging aerospace and defence companies to move quickly to access a £100m funding pot available to improve their supply chain performance. The funding is available from the Sector Skills Council for Science, Engineering and Manufacturing Technologies (Semta) to companies implementing the Supply Chains for the Twenty First Century (SC21) programme.

The SC21 programme is a collaborative scheme through which British supply chains will be protected and can prosper.

The scheme is free to join but firms must comply with certain values that it dictates and agree to best practice measures to ensure costs are minimal for suppliers as well as themselves.

Making the changes can take up man hours and other resources but firms can look to cover these costs by applying for the new line of funding.

The scheme “embraces a revised focus on in-company training that is fundamentally the right way to embed improvement which will lead to success for our industry in the UK through supply chains that perform to their optimum.” said Andy Leather, SBAC director responsible for SC21.

The money is being made available to other industries as well examples of which include automotive, marine and electrical. “Aerospace and defence companies need to move quickly,” warned Leather. “Other sectors, such as automotive, are already accessing the fund.”

Newsinbrief An independent report suggests clean coal could be worth £4bn a year to the economy and create 60,000 jobs in engineering, manufacturing and procurement.

These potential benefits could be realised by 2030 according to the report, ‘Future Value Of Coal Carbon Abatement Technologies To UK Industry’ by energy and climate change consultancy AEA Group.

The report was published alongside the Government’s consultation document ‘A framework for the development of clean coal’.

BAE construction capability manager Helen Barratt was last night named First Woman of Manufacturing at a CBI awards ceremony celebrating the achievements of women in business.

Held by the Confederation of British Industry in conjunction with Real Business magazine, the awards ceremony recognised female achievements in a range of areas such as finance, media, retail, tourism and science, along with manufacturing.

The BBC is seeking manufacturing firms that are looking to improve productivity to feature in a new TV series which sends business academic Dr Paul Thomas into struggling factories to assess processes and workforces with the aim of improving productivity by up to 300 per cent. The Journey is planned to air on BBC 2.

Research carried out by The Carbon Trust has found that 63% of consumers are more likely to purchase a product if action is being taken to reduce its carbon footprint. Just under half (47%) of those interviewed also said that companies should include information on how to reduce its products’ footprint after use.

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Newsinbrief Manufacturers are seeking clarification from government on skills funding to ensure they are ready to take advantage of a business upturn when one should begin. There has been strong take up of apprenticeships and Train to Gain programmes over the last year but the Learning and Skills Council (LSC), the body with overall funding control and which delegates the responsibility of overseeing the schemes, is yet to provide education institutions with budgets for next year.

A recent discussion held by The Royal Institution has revealed that shortcomings in entrepreneurial skills are thwarting the potential success of British inventions. The discussion topic, ‘How do you make a great inventor?’ also revealed a consensus among the esteemed panel that the key to inventing lies in the practice of successfully taking a product to market, rather than in the creative process.

The Royal Bank of Scotland (RBS) will, for the third year running, be the headline sponsor of The Manufacturer of the Year Awards. RBS’s continued support for the annual event provides welcome profile to the on – going successes of the UK manufacturing sector. RBS’s continued support for the annual event provides welcome profile to the on-going successes of the UK manufacturing sector.

UK exports of food and non-alcoholic drinks have hit record levels, boosted by strong performances in all product categories and a growing taste for British products in Central European countries. Research commissioned by the Food and Drink Federation (FDF) reveals that exports were worth £9.23bn in 2008, up 20 per cent in value terms on the year before. When alcoholic beverages – notably Scotch Whisky – are included, exports hit £13.6bn.

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Corus to shed 2,000 UK employees Steel giant Corus is reportedly set to wield the axe a further 2,000 UK employees, bringing its total redundancies for 2009 so far to 4,500. The cuts are to be suffered in the north of England at the company’s Rotherham and Scunthorpe sites. No official announcement has been made but one is expected later as Corus’ parent company Tata Steel reports its financial results.

Corus has suffered since the recession kicked in through the knock on effects of the ailing construction and automotive industries to which it supplies. The fate of a further 2,000 staff from Corus’ Teesside Cast Products site also remains in the balance after in May a four-way consortium pulled out of a ten year contract to buy most of the plants steel until 2014.

“Corus need to decide if they

really are trying to be fit for the future or just fit for the scrapheap,” said Community union general secretary Michael Leahy.”We have real concerns for the integrity of the British steel industry,” he added. “We fear its further erosion could fundamentally undermine UK manufacturing,” he added.

Government looks to aid growth Government has set up a Growth Capital Review to determine how Whitehall can help SMEs access funding to invest in expansion. The review, to be headed by venture capital expert Christopher Rowlands, will be the first measure to be implemented from the Government’s ‘New Industry, New Jobs’ strategic plan, unveiled in April One idea thought to be on the cards is a modern-day version of the Industrial and Commercial

Finance Corporation – a faction first initiated in 1945 by the Bank of England to provide small and medium businesses with capital. “This review will identify if there is a role for Government in facilitating public and private investment to address gaps in the market,” said Lord Mandelson “Our priority will be to ensure that high-growth businesses, which will be very important for the economy, are able to secure the capital they need.”

The Manufacturer Awards 2009 are being held on November 12 in London.

For further information please contact Alexis Catchpole on either 01603 671303 or a.catchpole@sayonemedia.com

ManufacturingNews Shingo Prize UK debut a success, BAE and Ultraframe triumph

Manufacturingoutput

The Shingo Prize for Operational Excellence, an award devised in the United States that recognises operational excellence and best practice in manufacturing, has been given to two British companies for the first time.

BAE Systems Military Air Solutions, makers of military aircraft and Ultraframe, a conservatory and glass roof manufacturer, were presented the bronze category awards at a gala ceremony in Manchester on Wednesday 10th June. The presentation followed day three of the Shingo Summit, a week-long conference programme on the principles and applications of lean manufacturing and focused business improvement. The summit was produced by The Manufacturing Institute (TMI), which also administers the Shingo Prize in the UK. It is the fourth time TMI has held a US/UK manufacturing summit but the first year that a Shingo Prize ceremony has been held outside the US. Ultraframe, a local business with 200 staff, began its lean journey in 2005 where it has focused on product quality, reducing waste and customer service. In 2007 it won the Best Factory in the UK award (Works Management) and has since created a benchmark report that has assessed the business on several measures.

Shingo was the next stage on the journey, says CEO Mike Price and when the opportunity arose to apply to the prize outside the US, he seized it. “This year has been difficult for the business, with a reduction in size of our market size with the credit crunch. So to have the opportunity of recording what we have achieved– motivationally it was good timing.”

BAE Military Air Solutions in Samlesbury won the bronze category of the Shingo Prize. BAE started a lean business plan several years ago. “The prize recognises the effort that’s gone in over a period of 4.5 to 5 years” says Nigel Blenkinsop, director manufacturing BAE Military Air Solutions. BAE also launched a lean learning academy at Samlesbury in late 2005 which has been a catalyst for equipping a lot of the company’s leaders with the skill sets needed to embed lean principles.

The prize assessment process is staggered over eight stages, from an eligibility assessment through to the awarding of the Prize. Once a company is eligible and has applied an initial assessment is made. This generates a 75 page achievement report. Once companies have a solid chance of making one of the three award standards (bronze, silver or gold), a more intense series of site assessment visits are conducted, from where results are produced and ultimately the Prize may be awarded.

UK economy shrinking at record rate Statistics released in late June by The Office for National Statistics (ONS) show Britain’s economy having suffered its largest quarterly decline for 51 years between January and March 2009.

The UK economy shrank by 2.4%, far worse than feared, given that analysts had initially predicted a contraction of only 1.9%.

Output of the production industries fell 5.1 per cent, while service industries fell by 1.6 per cent, with negative growth in all sub-industries except government and other services which grew by 0.2 per cent.

Andrew Goodwin, senior economic adviser to the Ernst & Young Item Club, said of the figures: ‘‘We had expected a downward revision to GDP, but the scale of it comes as a real shock, and highlights the extreme weakness of the economy in the early months of the year.’’

Conversely, some analysts are spinning the statistics more positively, James Knightley, economist at ING Financial Markets, accepting that, whilst the figures are: ‘‘Much worse than expected, they should only provide a temporary knock to sentiment.’’ ‘‘The services sector is already on positive territory, with the manufacturing and construction indicators edging close to the break-even level.’’

Govt aims for £1 billion investment in future businesses The Prime Minister has announced the creation of the UK Innovation Investment Fund to invest in technology-based businesses with high growth potential.

The new fund will focus on investing in growing small businesses, start-ups and spin-outs, in digital and life sciences, clean technology and advanced manufacturing.

The Department for Business, Innovation and Skills, with the Department of Energy and Climate Change and the Department of Health, will invest £150 million alongside private sector investments.

It is the Government’s belief that it could leverage enough private investment to build a fund of up to £1 billion over the next 10 years. The UK Innovation Investment Fund forms part of the Government’s strategy for Building Britain’s Future.

“This fund will help build Britain’s future by investing in key sectors,” Gordon Brown said. “It will provide crucial support for our most promising start-ups and existing small companies just when they need it most.

Venture capital finance is the lifeblood of innovation and crucial to ensuring the commercialisation of the discoveries coming out of our research base. The fund will boost future UK competitiveness.”

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Newsinbrief The Society of British Aerospace Companies (SBAC) has criticised Britain’s defence spending and called for a new Strategic Defence Review to be carried out ‘immediately’.

Ian Godden, SBAC chief executive, said: ‘‘The real issue is that as a nation, we no longer adequately fund our own defence. Threats to security do not go away simply because we are in a recession.’’

The Society of British Aerospace Companies (SBAC) and the Defence Manufacturers Association (DMA) will merge after members of both trade associations gave their blessing for the move.

The new conjoined organisation will operate from October 2009 will serve around 800 member companies in civil aviation, defence, space and public security, acting as members’ collective voice in engaging with politicians, the media and public.

EEF, The Manufacturers’ Organisation, has completed a new report titled Manufacturing Our Future.

The report’s suggestions for strengthening the UK’s manufacturing sector include the establishment of a new government committee, the reestablishment of an ‘Industrial Bank’ and the offering of a £1 billion prize for innovation in the commercialisation of low carbon technologies.

Supercar maker Koenigsegg leads a consortium that has agreed a deal to buy fellow Swedish automotive firm Saab from the troubled General Motors.

GM Europe will continue to support Saab during an extended handover period, it is understood, and the Swedish government will underwrite £365m worth of funding from the European Investment Bank (EIB) to enable the deal to go ahead.

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Weak overseas development holding back upturn Recent recommendations for UK manufacturers to concentrate on exports have been undermined by a Confederation of British Industry’s (CBI) survey which reports a continuing decline in demand from overseas.

Of the 566 manufacturers taking part in the June Industrial Trends survey, 6% said export order books were above normal, while 58% described them as below normal. The resulting balance of -52% is the lowest since October 1998 (-55%).

The British Chambers of Commerce (BCC) recently called for businesses to utilize a 500m strong EU market for their products and services in the belief that most businesses overestimate the risks and underestimate the benefits of exporting.

The Food and Drink Federation (FDF) revealed earlier this month that exports from UK food manufacturers are up 20 per cent in the last year but CBI’s survey suggests this is not a common experience.

Pay negotiations yield little during recession Manufacturing pay settlement levels fell once again to an historic low in the three months to the end of May, according to research by EEF, the manufacturers’ organisation.

Average manufacturing pay settlements for the quarterly period fell to 0.8%, down from 1.0% for the previous 3 months to the end of April.

EEF pointed out that this is a true measure of just how far the manufacturing industry has

suffered since the start of the downturn, with a 3.1% average pay settlement recorded just last September.

Two-thirds of all reported settlements in the three month period were frozen, the highest level reported since EEF’s survey began in 1987. The number of companies reporting that they had deferred their pay settlements in this period also increased to just under 13% of all reported settlements.

Toyota to build hybrid cars in UK for the first time Britain will be the first country in Europe to produce hybrid vehicles for Japanese manufacturer Toyota.

Production of an Auris hatchback will make the UK only the fourth country globally to undertake hybrid manufacturing for the automotive giant, with China and the United States producing a small number of the vehicles.

A confirmation of orders is expected in the coming months, with production starting at Toyota’s Burnaston-based plant by the end of 2009. Such developments make good on Lord Mandelson’s assertion that the UK will become a centre for the production of low emission vehicles.

Toyota’s flagship vehicle, the Prius, has sold 1m worldwide since its launch in 1997.

ManufacturingNews Electric car consortia to receive £25m boost On June 24th the Society of Motor Manufacturers and Traders (SMMT) announced £25m in government funding will be allocated to the winners of the Technology Strategy Board’s (TSB) Ultra Low Carbon Vehicle Demonstrator competition.

Each group – comprised of manufacturers, development agencies, power companies, councils and academic institutions – will receive a share of the £25m. The money is designed to assist in the production of roadworthy vehicles within six to eighteen months that capable of achieving tailpipe emissions of less than 50g CO2/km and a zero-emission range of more than 35km.

The vehicles being developed range from ‘smart electric cars’ and the battery-powered vehicles from the Allied Vehicle Project to the high specification electric sports cars produced by EEMS Accelerate.

While average car CO2 emissions are down 19% since 1999, TSB’s programme further encourages manufacturers to develop environmentallyfriendly vehicles, in line with government’s target of reducing carbon emissions by 26% in 2020 and 80% in 2050.

Paul Everitt, SMMT chief executive, said of the venture: “Ultra low carbon vehicles are now mainstream business for the UK motor industry and the TSB’s competition provides the ideal incentive to develop and demonstrate new technologies.

This marks the beginning of an important new phase for the UK motor industry.”

This move comes in conjunction with Japanese automotive giant Nissan outlining its intention to emerge from the global downturn as the leading producer of zero-emission electric cars aiming to produce 100,000 units a year by 2012.

Datesfor yourdiary July 8 & 9 The Rapid Manufacturing International Conference is being

held at Loughborough University. Further information can be found at: http://www.rm-conference.com

10 & 11 The Institute of Metal Finishing and Aerospace is holding a

conference at the RAF Museum in Cosford.

16 EEF is holding an HR Network meeting covering the Bedfordshire, Cambridge and Milton Keynes areas. For further information contact Zoe Langford on 01767 685925 or email: zlangford@eef.org.uk Throughout July EEF is holding various courses at its Sandy and Hook bases on HR and legal matters. For more information please visit: http://www.eef.org.uk

September Jubilant Leyland excels at MX Awards Leyland Trucks took Best Company and 14 other companies were honoured at IMechE awards on June 25th.

The great and the good of British manufacturing gathered at London’s Dorchester Hotel to vie for 12 industry awards recognising best practice in manufacturing, customer focus, logistics and resource efficiency, process innovation and more. Prestonbased Leyland Trucks, runners-up in two categories at MX2008, was the overall winner and multiple award winning Gripple, the wire fastener maker from Sheffield, won best small or medium sized enterprise. Leyland also scooped the customer focus award

and Gripple the National Skills Academy award for best small or medium enterprise.

Few shortlisted companies were left empty handed as five of the 12 categories awarded commendations as well as winners, and few companies took more one award. Repeatedly the judges emphasised how difficult it had been to decide on the winners, and the product innovation award was a dead heat with the award going to joint winners Randox Laboratories and Selex Galileo Edinburgh.

A full list of the winners of MX09 can be found at: www.mxawards.org

7-10 UK Trade & Investment (UKTI)

is part of the Euromat 2009 exhibition being held at the Scottish Exhibition and Conference Centre. For further information visit: http://www.euromat2009.fems.eu/

22-23 UKTI is part of Composites Meeting 2009, being held in Nantes, France. For further information visit: http://www.compositesmeetings.com/

23-26 UKTI will be represented at the

Beijing Air Show. Further information on the Show can be found at: http://cpexhibition.com/aviation/index.html

29 & 30 The eighth World Class Asset Management with SAP Conference, is being held at the Crowne

Plaza Hotel, Birmingham. For further information or to register, please visit: www.tacook.co.uk/wcam09

Throughout September EEF is holding various courses at its Sandy and Hook bases on HR and legal matters. For more information please visit: http://www.eef.org.uk

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UK Appointments Bowman International Paul Mitchell

Norbert Dentressangle Neil Adcock

The National Skills Academy for Food and Drink Manufacturing David Williams

Culina Logistics Mark Carrol

Leading polymer component manufacturer Icon Polymer has appointed Mark Satchwell as an engineer at its Silentbloc operation in Burton-onTrent. He joins the business from Caterpillar where he was a manufacturing and design engineer.

Satchwell holds a first class degree in mechanical engineering from Leicester De Montfort University, and previously worked for Trelleborg as a process technologist. He also gained Six Sigma Green Belt certification whilst with Caterpillar.

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Bearings and sintering specialist Bowman International has announced that Paul Mitchell has joined the company as technical director. Mitchell was previously managing director of Oilite Bearings Ltd, the assets of which were purchased by Bowman when the company went into administration at the end of 2008.

Norbert Dentressangle has appointed Neil Adcock to head up the continued development of its UK logistics business.

With 15 years’ experience in a variety of roles at both Wincanton and CEVA Logistics, Adcock will look after new business development across all market sectors, seeking to build on the company’s already strong presence and continue to develop new products and markets.

The National Skills Academy for Food and Drink Manufacturing has appointed a leading baker to its board of directors.

David Williams, managing director of Butt Foods Ltd, has joined the nine-strong board, which includes representatives from across the food and drink sector and is chaired by Paul Wilkinson, chairman of confectionary and cereals group Big Bear and Produce World.

Williams started his career as a delicatessen manager within Greater Nottingham Co-operative Society before joining start up company Butt Foods in 1990.

Culina Logistics, the multi-temperature food and drink supply chain specialist, has appointed Mark Carrol to the new position of chief financial officer.

Carrol was previously divisional finance director with Wincanton, and has held posts at the food sector at Dairy Crest and Northern Foods.

Paul Philpott has been appointed as chief operating officer at Kia Motors Europe following a major reorganisation of the company’s European head office.

Philpott, who was managing director of Kia Motors (UK), will take up his position in Frankfurt, Germany in August. He will be responsible for all of Kia’s panEuropean operations and will manage relations with the company’s manufacturing operations in Zilina, Slovakia where the Cee’d and Sportage are built.

ManufacturingAppointments Andy Walker has joined Oliver Wight EAME from international paper, packaging and building products manufacturer Georgia Pacific. Prior to this, Walker had spent over a decade working across a wide range of industries, including finance management and supply chain management.

Jeff Halliwell has been appointed the new UK managing director of Bernard Matthews Farms.

Halliwell joins the company following a three-year period with the dairy co-operative, First Milk, where he was managing director of First Milk Cheese Company, the UK’s largest cheese manufacturing business.

Invensys, the technology company, announces the appointment of Sudipta Bhattacharya as chief executive officer and business president of the newly formed Invensys Operations Management division (IOM). Bhattacharya previously had been the interim chief operating officer for Wonderware.

JJS Electronics, a UK-based EMS company, has appointed Nigel Burton as principle process engineer.

Burton, a time-served Harwell apprentice, brings with him 28 years experience gained in a host of manufacturing roles, including working with a leading broadcast systems manufacturer as a senior production & process engineer.

Peter Knight has been appointed chairman of the board of East Midlands business organisation The Food & Drink Forum. Knight is currently non-executive director of Camgrain. He takes over the reins of chairman of the board from David Williams, who remains as a board member.

The Manufacturing Advisory Service in the South West (MAS-SW) has appointed manufacturing experts Paul Gilbert and Andy Phillips. With over 50 years combined experience in the manufacturing sector, they are to provide dedicated ‘hands-on’ support in the latest lean techniques to the 9,000 micro manufacturing businesses in the region.

Helen Alexander CBE has been formally elected President of the UK’s leading business organisation, the CBI. Alexander, a senior advisor at Bain Capital, takes over the reins from Martin Broughton, chairman of British Airways.

She is expected to serve a two-year term in the unpaid role.

Chris Britton has succeeded Per Harkjaer as the new chief executive of the Findus Group, formally known as Foodvest. Britton has been in the consumer goods industry for 25 years generating substantial profitable growth across a number of highly regarded, multinational businesses. Until recently, Britton was an executive board member and president of the baby food division of Royal Numico.

International Appointments E2S Wolfgang Pfanner

Sanofi-Aventis announce the appointment of JeanPhilippe Santoni as senior vice president, industrial development and innovation, within industrial affairs.

He started his career at Servier in 1984. He joined Synthélabo in 1990 as cardiovascular development director, then Sanofi-Synthélabo Research as vice president international clinical operations. After the merger with Aventis, he was appointed vice president of international clinical development.

E2S, the UK-based leading independent manufacturers of audible and visual warning devices for the hazardous area, marine and industrial sectors, has appointed Wolfgang Pfanner, to the newly created position of Sales Manager Central Europe. Pfanner, based in Reutlingen, has an impressive track record in the electronic and electromechanical components industries, having previously held senior sales positions for leading Japanese and European groups.

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

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12

JustJones Making hospitals work

We

all glimpsed the huge potential of lean to improve the working of healthcare and also began to realise how much hard work it would take to make this a reality. What followed was a wave of hospitals interested in lean and a stampede by every consultant to learn about hospitals.

For our part we quickly concluded we would have to roll up our sleeves and conduct our own experiments to learn what it would take to create a truly lean hospital. Two years later after deep involvement in two hospital transformation projects in the UK we have produced our own progress report in the form of a new lean workbook called Making Hospitals Work: How to improve patient care while saving everyone’s time and hospitals’ resources. We hope this will set the scene for the next phase of the lean healthcare journey.

Experience in other sectors tells us that the power of engaging staff in rapid improvement events has to be seen within the context of the end-to-end patient journey through the hospital and beyond, and by looking at the work done by the many shared resources used by each clinical pathway. Our action research led us to focus on two important value streams followed by patients admitted to most general hospitals, the emergency medical and elective surgical value streams from admission to discharge, plus the key enabling support activities.

The key was to focus on the value streams going through the shared resources rather than follow every type of patient. In diagnosing the root cause of the seemingly chronic instability in hospitals we found that typically 28 per cent of patients were ready to be discharged at any one time and that a further 11 per cent were in the wrong wards because there was no free bed for them. Freeing up the emergency pathway for medical patients, with actually quite predictable demand, by simplifying discharge would eliminate all the postponement and rescheduling of elective patients.

This may be the hardest place to start but it is the key to meeting all the hospital’s performance targets.

The second key is establishing a visual management system throughout each value stream.

It also became clear that an end-to-end perspective has to be led from the top, in a way that complements and focuses bottom-up improvement activities. This workbook outlines the A3 method our fictional top

Two years ago I organised the first Global Lean Healthcare Summit in Stratford. It was the first time all the hospital pioneers from around the world had come together.

It was both an inspiring and sobering event.

management team uses to define the core problems facing the hospital, to learn to see these value streams and analyse where and why they are broken, to come up with the possible countermeasures and create an overall action plan for realizing a future state for these value streams. It also introduces the role of the value stream manager in gaining agreement from each of the departments on the right actions to take.

The A3 planning process used in the workbook follows Deming’s ‘Plan, Do, Check, Adjust’ cycle that is used

by Toyota for planning and problem solving at every level in the organisation. This is the same scientific method applied to management problems that doctors use to diagnose and treat medical problems. Think of it as evidence based management to complement evidence based medicine.

diagnosing the root cause of the “ Inseemingly chronic instability in hospitals, we found that typically 28% of patients were ready to be discharged at any one time and that a further 11% were in the wrong wards because there was no free bed for them

“

Dan Jones, founder and chairman of the Lean Enterprise Academy Email: dan@leanuk.org

This book draws on practice rather than theory. We have tried and tested all the building blocks described in this workbook in isolation and in combination and we know they all work. It also describes how lean tools have to be modified for a situation where the patient is at the same time the ‘product’ being diagnosed and treated and the customer experiencing the process.

Over time it is quite possible to eliminate unnecessary waiting time for patients, remove the overburden on clinical staff so they can spend more time caring for patients, while freeing up the capacity to treat more patients by significantly reducing length of stay. It confirms that lean is the most promising way for healthcare systems to meet growing demand without escalating costs. end

Have your say at www.themanufacturer.com

13

Real help for manufacturers The Manufacturing Advisory Service (MAS) provides extensive support to manufacturers in all industries. Whether you are a small or medium sized company, MAS can improve your productivity and competitiveness. MAS delivers practical support and advice, ensuring that your business receives bespoke and specialised manufacturing expertise to meet your business needs.

To register for your free one-day on-site diagnostic with a MAS adviser call 0845 658 9600 today.

For more information on MAS visit www.mas.berr.gov.uk/welcome or email info@mas-uk.org.uk Commissioned by

Economics The dangers of slipping back Steve Radley, chief economist, EEF

Talk

has returned, not simply as to whether the recession is over, but equally with regard to potential exit strategies from the support that the economy is receiving, amid speculation over interest rates going up by the end of the year. Nonetheless, the question remains as to how much hard evidence exists to justify such conjecture, and, more worryingly, is there a real danger that we could simply slide back into recession?

The reasons to remain cautious about the outlook are twofold. Firstly, there is little hard evidence to suggest that the economy has stopped contracting, let alone started growing again. The majority of indicators suggest that the pace of decline has slowed, but crucially, not that it has ended outright. For example, whilst jobs are not being cut as fast as they once were – and the peak in unemployment could be less than forecast a matter of months ago – employment is still contracting. Similarly, the purchasing managers indices of global manufacturing activity are thankfully edging back towards to the 50 mark (with any score above this indicating growth), but nonetheless remain some way below it. Lastly, surveys such as those undertaken by the Royal Chartered Institute of Surveyors on housing, or the German Ifo survey of business confidence, suggest that more people are expecting a return to growth, but that current conditions are still poor.

The other worry is that we remove support before the economy is ready to stand on its own two feet.

Experience from previous credit crises highlight that their effects tend to be long-lasting, recoveries weak, and the risks of policy mistakes very high. We only have to look back to Japan’s ‘lost decade’ to see how rapidly the economy lost momentum once the brakes were applied. One of the key lessons, therefore, is that fixing the banking system is necessary to jumpstart a flagging economy, but, ultimately, not sufficient in itself.

Once households and businesses have started to pay down their debt, government spending plays a key role in substituting for weak consumption and investment.

In addition, very low interest rates are needed to encourage people to spend rather than save.

At the same time, pressure on the authorities to claw back fiscal support is immense. In the UK, public

Recent weeks have seen more encouraging news on a range of fronts, including the labour market, the housing market and from business surveys. Talk of a recovery is premature however as Steve Radley warns against the risks of sliding back into recession.

sector borrowing is to set to peak at over 12% of GDP, and whilst Britain started the recession with relatively low levels of debt, this is clearly not sustainable.

Failure to develop a credible plan to reduce it is likely to lead to further downgrades in the agencies’ rating of government debt, and thus increases in the cost of borrowing. Whichever government is returned after the election will seek to establish that it has a plan to deal with the deficit. There will be similar pressures in post-election Germany, where aversion to government debt is greater still. Closer to home, there are already measures in place to increase the burden of taxation, with the VAT cut and the car scrappage due to end, and income tax on top earners national insurance payments for employers and employees set to increase within the next 18 months.

On the monetary policy front, central banks will face mounting pressure to reverse direction once there are signs that their economies are growing again. This could come in the form of raising interest rates, ending the quantitative easing programmes to expand the money supply, and withdrawing or scaling back measures to support bank lending. There are a number of reasons for this. Primarily, there is an increasing nervousness as to how far central banks’ balance sheets have expanded, coupled with the dangers of allowing inflation to spiral out of control. This represents a legitimate concern, and central banks will need to develop and articulate their exit strategies in lieu. At the same time, the large amount of spare capacity in the economy – together with the downward pressure on wages – mean that inflation will be muted for the foreseeable future. Indeed, arguably the greater danger lies in prematurely reversing fiscal and monetary policy from stimulus to contraction.

Whilst this may sound excessively gloomy, especially at a time when the outlook has become more optimistic, it doesn’t mean that companies should postpone their preparations for capitalising on the upturn when it comes, as it inevitably will. However, it does mean that firms need to maintain a tight control on costs, remain alert to any signs of weakening in the economy, and be ready to take swift action if a downward turn does materialise. In such uncertain times, therefore, business needs to be prepared for the best and the worst. end

Have your say at www.themanufacturer.com

15

SBAC plots course to minimise turbulence Ian Godden, chief executive officer of the Society of British Aerospace Companies, faces an uphill task this year as economic and political pressures converge on the UK’s successful but vulnerable aerospace and defence industry. Will Stirling asks him which are the most crucial projects for the industry to secure, and how manufacturers have helped the UK aerospace sector to be number two in the world.

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When

Ian Godden joined the Society of British Aerospace and Defence Companies (SBAC) in mid-2007, the world looked very different. The UK’s aerospace and defence (A&D) industry, the second biggest in the world behind the United States, had peaked following eight years of high growth, mirroring the global boom economy. Airbus, the pan-European aircraft company with big operations in the UK, was launching its flagship A380 superjumbo with the first airline, ahead of arch-rival Boeing’s equivalent, the 787 Dreamliner — despite various technical hiccups, the A380 came to symbolize the vitality of civil aerospace globally. The Government had approved the construction of two new aircraft carriers, the biggest and most powerful warships to be built in UK history. And several UK defence manufacturers of all sizes had full order books, bulging from continued US and UK operations in Iraq and Afghanistan as well as orders for military aircraft, vehicles and vessels from governments worldwide. UK Trade & Investment says orders in 2007 for the A&D sector were up 65% to £43.8bn.

Fasten your seatbelts

Then the credit crunch hit, banks imploded, lending dried up, taxpayers fitted the bill and public finances were stretched to their limit. Today the world is a very different, more cash-strapped place. When public borrowing needs to be reduced, a popular and arguably easy target for spending cuts is defence.

Recently, a memo written by the chief contractors on the Queen Elizabeth Class aircraft carrier programme was leaked to the BBC, which said the costs

Interview

Ian Godden, Society of British Aerospace Companies

associated had blown about by more than £1bn and allegedly mentioned a number of factors that posed serious threats to the project’s future.

In defence aviation, much of the UK’s manufacturing supply chain is waiting intently for news on the UK’s contribution to the Airbus A400M military aircraft – 25 new aircraft – which SBAC believes is vital to both the UK’s military capability and, as a signal to the global defence industry, that the UK is a viable player in modern, large scale military aircraft contracts. The Government has kept the industry and its European Airbus joint partners guessing as to when and even if it will climb aboard. As the Government faces up to the reality of spending cuts, the worry is which of the big defence contracts is it likely to axe or at least curtail?

In the civil aerospace sector, conditions are hardly better despite some lucrative projects in the potential pipeline. SBAC’s recent Civil Aerospace Strategy Report 2009 (June) identified Britain’s great strengths in aerospace manufacturing, including over £20bn per year produced in value added revenue and employing over 113,000 people directly, and a further 350,000 indirectly. The report also highlighted a number of high value projects capable of consolidating the UK’s place in a world market and securing jobs, including exciting opportunities in emerging markets better placed to invest in new aircraft than some traditional customers.

Shifting needs

Facing falling global demand for civil aircraft and a vulnerable defence budget, SBAC has a heavy burden. As an organisation which – along with the Defence Manufacturers Association – represents A&D manufacturers’ interests and lobbies government to support its industry to do what it can to ensure the vital contracts are not delayed or cancelled, it has his work cut out. Beyond that, its core services remain the same as before the downturn: in promoting technology; in skills; in business development; and in promoting the industry. Overall, however, its offering has shifted focus during the recession to reflect members’ changing needs.

Ian Godden says there are five main areas where the key issues of the aerospace and defence sector have changed with the economy:

1

The shift (which had been predicted in the boom time) towards productivity, supply chain and lean manufacturing has clearly taken off with greater emphasis now. “An example is the Supply Chain 21 initiative which companies have been implementing. “We’ve got some phenomenal improvements in productivity, partly from better working practices and partly due to investment,” he says.

2

Industry has realised in this downturn there is a need for fundamental emphasis on continued technology investment and to seek the next generation of products. There are some risks there, including government cutbacks in defence research in the last two years. “There is a real nervousness that this is an area that will hurt us in the long term, and it’s one that’s exercising our members’ minds a lot,”

Gooden says.

3

The environment. Important for several years, but the emphasis has increased in the last two years.

4

The skills area. The industry realises that there is a lot of risk in the skills gap in basic engineering apprenticeships and capabilities of various natures.

5

A shift in the geographical interests of the companies.

“For example, we are in the process of setting up representative offices in India, and are looking at expanding our position in the Middle East,” he says, “and we’re seeking to increase our relationship with Mexico, Japan and Brazil to help many of our medium sized companies who believe that their future growth is going to come from those areas rather than the traditionally areas of the US and Europe.’’

Biography Ian Godden 1953:

Born in Edinburgh, Scotland

1974:

BSc Hons Chemical Engineering at Edinburgh University

1974-79:

Engineer and manager, British Petroleum, US, UK and Middle East

1981:

Gained MBA from Stanford University, California

1982–87:

Principal at consultancy Booz Allen & Hamilton, New York, Houston and Washington

1998-2000:

Founder and chairman, IPG Strategy Consultants

2000-04:

UK managing partner and senior partner, Roland Berger Strategy Consultants

2007:

Joins Society of British Aerospace Companies as chief executive

Oct 2009:

Chairman-to-be of new organisation to be formed from the merger of SBAC and the Defence Manufacturers Association.

Will also become non-executive chairman of Farnborough International Limited, a wholly- owned subsidiary of the new SBAC / DMA alliance.

Ian is a Fellow of the Royal Aeronautical Society He is married with two children. In rare moments of spare time, he enjoys sailing and writing.

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Interview Ian Godden

Innovation in discrete manufacturing

While one can visualize the application of process innovation and lean manufacturing techniques in process and FMCG manufacturing, it is less easy to do so for small batches of highly engineered, discretely manufactured goods – like aircraft engines and wings.

Has aerospace and defence engineering benefited from advances in manufacturing techniques?’

“As a sector [A&D manufacturing], the UK has had a huge benefit in the last 15 years from three things. Firstly, companies have been able to invest in capital in a way that UK industry wasn’t in the 1960s, 1970s and 1980s.

Then the difference between our industry and others is twofold. One is, bluntly, that we haven’t had competition notably from Japan to wipe us out. Secondly, we’ve had time to adjust to new manufacturing techniques in a way that the car industry struggled with and also the combination of a strong manufacturing base, high value engineering and the need to be flexible in adopting multiple technologies. If you look at an aero engine, it has absolutely every technological feature in it, with the exception of biochemistry: it’s got software; computing power; heat and combustion; hydraulics; electronics and sensors. As a nation, we’re not used to large scale,

high volume manufacturing, or have not been for a while.

Aerospace is a fundamentally more mixed and balanced, multiple-skilled manufacturing and engineering ability which suits us culturally very well.’’

Skills gap nears top of agenda

All the sector-specific manufacturing trade bodies have identified skills fulfillment and replenishment as a big issue. How is SBAC working with government, the sector skills councils and industry to encourage more people into engineering to be best placed to fulfill global opportunities in A&D? Godden highlights three ways that SBAC’s work is crucial to the skills issue:

1 2

The SBAC has a people management board focused on the skills subject

Equally importantly, it is working with John Denham’s group in BIS [the Department for Business, Innovation and Skills] and on the skills future of the industry. “We have a 20 to 25 year view about what skills are required and we’re pioneering some work on how to specify and create the demand for the supply of those skills that we have identified,” he adds.

3

Working through the many, disparate skills initiatives for engineering and manufacturing.

“We’re doing our bit ourselves, many joint things with government and we’re focused on larger industrywide initiatives.’’

Strong foundation, uncertain future

In late June, a report from the Institute for Public Policy Research recommended that the UK should consider slashing defence spending by up to £24bn and revisit plans to renew its Trident nuclear deterrent.

Britain cannot afford much of the defence equipment it plans to buy, the report said. Godden responded, cannily agreeing that spending was in need of proper strategic review but that widespread cuts would be an overzealous, damaging reaction.

Government faces a difficult balancing act with defence spending. A public spending squeeze is inevitable after the 2010 general election. Defence, and big defence contracts in particular, are high up on the list. The sector itself, voiced by the SBAC and DMA – which will be merged in the autumn to form a single company – says this is an over-simplistic and shortsighted approach. Cutting defence saves money, but it cuts a manufacturing sector that adds value to national output with strong exports, at a time that industry is being championed in a new ‘rebalanced’ economy. Going forward, Ian Godden and his team are focused on lobbying to secure those key contracts like the NSR replacement programme, the QE Class carriers and A400M can benefit the UK economy and its manufacturing base, as well as new markets for British-made aerospace products in Brazil, Mexico, India and beyond. end For the full interview with Ian Godden go to www.themanufacturer.com/uk/audio_visual.html

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Paris Air Show Sir Andrew Cahn, UK Trade & Investment

Paris Air Show comment Sir Andrew Cahn

Sir Andrew Cahn, chief executive of UK Trade & Investment, gives his views on the UK aerospace sector in the build up to the Paris Air Show 2009 at Le Bourget.

He identifies Japan as an exciting trade partner for UK aerospace and points to British expertise in reducing the environmental impact of flying.

Words

of caution are likely to be the first words you will have heard at the Paris Airshow this year. The past 18 months have been rocky. But despite the whispered warnings the aerospace sector can look to the future with more confidence than perhaps one would imagine.

UK aerospace, like most of our manufacturing, has felt the affect of the global economic slowdown. But even last year at Farnborough the orders continued to be placed, notably by airlines in the Middle East and Asia. They will drive future demand in the sector. Their airlines have continued to invest and place orders for aircraft. Their business plans stretch 20 years into the future. What to us seems like being caught in the economic equivalent of a perfect storm may actually be seen as a squall on the way to a bright future.

The UK, with the second largest aerospace sector in the world, is watching these developments acutely. The global composition of the sector, in which the UK has such a stake, means we have to be open to partnership, investment and trade. British firms, with their world-class research and skills, solve challenges posed by countries from all over the world.

International relations – Japan

Research by UK Trade & Investment and the Society of British Aerospace Companies (SBAC) has identified Japan as a place where British companies can prosper in the next few years. The UK’s place at the top of the global aerospace supply chain is critical to future success of our aerospace sector. With most of the supply chain for Airbus in the UK and with about half of every A380 built in the UK it is of vital importance to Britain. Britain is also heavily committed to Boeing and the firm’s investment in its Integrated Vehicle Health Management Unit at Cranfield University is proof of that. Over the next few years we want to see British firms taking their place in the supply chain for the Mitsubishi Regional Jet (MRJ).

The strategic importance of the Japanese aerospace

sector makes it a natural partner for Britain. Both are at the cutting-edge of technology. Why not then work more closely together? It is exactly ideas like this that I will be exploring at the Paris Show. UK Trade & Investment (UKTI) and the SBAC have put in place a long term strategy of engagement with the Society of Japanese Aerospace Companies (SJAC) to market the UK as a partner of choice, especially around exciting opportunities such as the MRJ. Lord Davies, minister for trade and investment, will discuss future cooperation with the Japanese industry when he meets SJAC at Paris.

There is more to British aerospace than being able to profit from the future. British companies are helping to shape it. Britain has cutting edge design facilities and expertise in avionics, engines and wing design that is recognised the world over. UK manufacturing represents 75 per cent of research and development spending in the UK.

UK’s input to greener skies

This unparalleled research and development base means that British engineers, scientists and the companies they work with are solving the challenges facing the industry. British companies have taken the lead in making the aerospace sector as environmentally friendly as it ever has been. The UK is running a £95m project into more environmentally friendly aero-engines as part of the National Aerospace Technology Strategy.

This year at Paris, UKTI, the Aerospace and Defence Knowledge Transfer Network and the SBAC hosted a special breakfast briefing highlighting British capabilities in the future of flight – unmanned aerial systems (UAS). Our partnership approach has been unique with major companies co-operating to create a future platform for civil UAS. end www.uktradeinvest.gov.uk/ukti/advancedengineering

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19

The Yorkshire Bank Manufacturing Directors’ Forum dinner, Manchester, May 2009

The recession and what it means for manufacturing now and tomorrow

At a dinner in late May hosted by Yorkshire Bank and The Manufacturer, directors of several manufacturing companies based in the north-west talked to Yorkshire Bank representatives about the events that caused the recession, current economic indicators, pension deficits, relationship banking, global competition, regulation and other issues affecting manufacturers today. Tom Vosa, chief economist at National Australia Bank (Yorkshire Bank) provides an economic overview of the last 12 months and a glimpse of what the future may hold.

Participants: Brian Colquhoun, regional director, Yorkshire Bank Peter Davies, regional head of credit, Yorkshire Bank Brian Dew, finance director, Thumbs Up David Grant, managing director, Moorhouses Brewery William Hogg, local chairman, Yorkshire Bank LSC Tony McManus, finance director, Ritrama Mike Peters, managing director, Universal Products Manufacturing Ltd (UPL) Tom Vosa, head of market economics Europe, National Australia Bank Peter Weidenbaum OBE, executive chairman, Trumeter

Tom Vosa, Chief Economist, Yorkshire Bank and Clydesdale Bank

Glen Walmsley, operations director, Remploy Henry Anson and Will Stirling, The Manufacturer

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gives a comprehensive assessment of the British economy in late May 2009.

Leadstory Manufacturing Directors’ Forum

He began by saying: “First the people around this table should congratulate themselves that their businesses are still standing despite some hard choices that they may have had to make, during some very difficult circumstances that we’ve all felt in the last 12 months.”

1970s and 1980s, the UK’s key problem has always been that in a downturn all the capital equipment and capital stock was exported and was never replaced. This time around we’re not seeing that. (for an explanation why Europe differs in this regard, read the online version on our website).

Highlights of Tom’s assessment of the economy follow:

The fact that the UK will start in this weakened currency position means that, even though the world dinner plate, with very weak global growth, is not the most appetising it has been for the past decade, we can still scrape a lot off with a competitive exchange rate and anyone that hasn’t looked at export markets that might be relevant to their business really should do so.

The views expressed here are those of Yorkshire Bank unless otherwise stated.

Background - The 2008/09 recession

In the year to March 09, UK output collectively fell by 4.9%, meaning that the recession is now deeper than that seen in the 1980s. In Q1 2009, the UK measured its biggest fall in output since 1958 Q2. What we saw in the fourth quarter not only carried over into 2009, but actually worsened.

All global manufacturing indices and survey data are falling at more or less an identical rate. No-one was immune.

General prognosis

The worst is behind us. Survey data suggests lowest point in the curve was around Jan or Feb, but the output is still falling. But any talk of green shoots is grossly premature; my concern is that the green shoots that we have don’t grow up to be ‘triffids’. Even if the contraction in the supply chain has stopped, a restocking cycle by itself will not be strong enough to drive a self-sustaining upturn.

“In our minds any hopes of a V-shaped recovery or a swift upturn are misplaced.”

Fiscal stimulus: The UK is likely to see growth this year, probably in Q4. Partly a reflection of government policy and unprecedented levels of fiscal and monetary stimulus; Bank rate is now at 0.5% – the lowest levels since the Bank of England (BoE) was formed in 1694 – we’re now printing money electronically. Quantitative easing is creating electronic cash and feeding it into the banking system to try and encourage the banks to lend to businesses and households.

Manufacturing

Regionally there is little pattern; it seems to be more sector-specific than which region you’re in. For example, steel-relevant manufacturers in Sheffield are doing OK, they have the contracts for building the London Olympics’ bridges. In the south-west in the munitions, ordnance or weapons industry, companies are also doing reasonably well because of the continued conflict in Afghanistan.

Clearly though, the automotive sector has been badly hit as have energy intensive sectors.

Manufacturing has benefited from the crisis as follows:

1

Cost of debt is low – The markets are still dislocated and that will continue but Libor spreads are narrowing and the companies around this table who are on Libor- based funding should benefit from that in due course.

2

Sterling valuation – This is the first recession in the post-War period when sterling has not been overvalued. From the deindustrialisation of the UK in the

Signs of recovery

In global terms, the UK cyclical position is probably behind the US, and ahead of the rest of continental Europe. It’s difficult to see growth coming out of Europe for a while. The labour and product markets are far less flexible, they have an overvalued exchange rate and the European Central bank is doing far less quantitative easing (QE). US interest rates have a floor of one per cent, in terms of QE they’re only going as far as buying covered bonds = this might be good if you are a German bank with a large mortgage portfolio but we can’t see how this flows into continental businesses, particularly manufacturing and SMEs. These companies are not going to benefit from any of this because it’s not going to affect their own borrowing costs. On that basis, the BoE’s decision to buy gilts, try and pull down the whole yield curve and therefore swap rates should certainly benefit UK industries more.

It’s not too pessimistic to think of a recovery, but we need to carefully consider how going forward we will generate the growth that we’ve been used to in the 10 years to 2007. Two big elephants in the room as we start to recover in 2010:

1

Level of household debt: How can we still consume when banks will be curtailed in their lending activity going forward?

Level of public debt – The UK was put on negative watch by Standard & Poor’s (rating agency) for its sovereign debt = first time in post-War history. Public sector demand will not be the driver of growth that is has been in recent years and it will not be there to support the economy; we must get used to being in a world in which consumers have less ability to spend and government will have a reduced ability to replace that gap because it has already borrowed significant amounts.

2

Taxes

Government’s ability to raise more from taxes is limited.

We’d agree with the Institute of Fiscal Studies that we’re ‘to the left’ of the Laffer curve, meaning if the government increases taxes further they could end up collecting less revenue as companies use more aggressive avoidance measures.

The ability to increase corporation tax is very limited because we’re already seeing companies changing domicility.

Spending cuts across the board will bear the burden of the adjustment. When and how? Not certain, but I suspect that the negative threat by the rating agencies will be enough to force them to start acting this year.

“I would be very cautiously optimistic about the future.

But it is far too early to talk about green shoots.”

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Tony McManus, Ritrama: Most manufacturers will have a pension deficit as a result of the crisis and were watching for equity markets to rally around, but to then see them wiped out again was a body blow.

We’ve just had our latest scheme valuation and the pension administrator is working to suggest alternatives to minimise future impact. The drop in equity values is the prime cause of the reduced value and it was a shock to see such a dramatic drop. We expected a reduction but it’s such a big deficit now. The public sector deficit on Final Salary schemes needs urgent attention – not by larger taxes but by reducing benefits.

Tom Vosa: For private sector pension schemes, higher bond yields would be the thing that saves them.

Because your discount rate suddenly increases, so a fund that is in deficit finally switches into a surplus via a great bit of compounding interest. It’s the way the actuaries account for it. The Brian Colquhoun exact distribution will matter, Yorkshire Bank but essentially an increase in interest rates will start to swing funds back towards surplus, because the discounted rate of return will suddenly go up.

On the public sector pension deficit – If the government wanted to raise bonds to fully fund it they’d have to issue between £800bn and £1tr depending on who you listen to. This is almost as much as we produce, where national output is about £1.4tr. It is a huge vulnerability.

My suspicion is some of the [credit] downgrading of the UK is part of this issue. For the next two parliaments in the UK, it won’t really matter who is in power because their ability to actually spend money, your discretionary spend, is simply going to keep falling because every year the tax you’re taking is all going off to pay pensions – that is your first liability.

Employment regulation and global competition

Peters: [the UK may remain the world’s 6th biggest manufacturing country but] the challenges are multiplying hugely. It’s getting more and more difficult to be an employer. It’s legislation, regulation, the way in which we interpret these versus anybody else. With every piece of legislation that is imposed, we have to go to the nth degree. That’s in any area of the business.

This regulation problem is not a European thing, it’s a British problem.

TM: Is manufacturing overregulated?

Peter Weidenbaum, Trumeter: I think so. I carried out a study on this a couple of years ago – I concluded that UK regulation costs as much as 11% turnover. If you compare it with France and Italy it’s not that different, I think Germany is very high.

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Pension deficits and taxation

SME Manufacturer of the Year award

William Hogg, Yorkshire Bank: It’s a lot worse in France than in the UK. The legislation in place to protect the employee is far higher than it is here. Public finance / tax costs are much higher Vosa: In places like France, don’t they get by with this because the land prices are so much lower?

Hogg: That’s true, but to adjust your work force in France is much harder than here.

Is regulation a key issue at the moment? Fundamentally, it’s the consumer demand side of the economy that is going to be the biggest influence in the recovery.

The building sector has been absolutely decimated, we are seeing a very sector-specific type of economy now, whether its automotive, construction or trades associated with building, they are having a really tough time.

We’re in for a protracted period of less money at a time when consumers will be faced with an increasing tax burden.

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Weidenbaum: It’s becoming more difficult to remain competitive globally. We had to move some production abroad in order to protect our markets. But it brings other benefits. If you’re trying to share in the growth in Asia for example, you can’t export from the UK, you’ve got to manufacture goods there. And that’s the route we went.

We’re getting tremendous benefits – contracts that we wouldn’t have had if we didn’t have that presence. My point is that whatever the regulation, whatever the expense here, if you want to expand you have to expand globally. And we are only an SME. When we looked, the Chinese wanted 51 per cent of the equity. But in Malaysia you didn’t have to part with any equity, they just wanted two Malay directors on the board, David Grant which was no problem. Without Moorhouses that plant we wouldn’t have Brewery had the input of orders which we’re getting now because in the UK we’re seeing a 25 per cent reduction on our traditional products. We’ve been in business since 1937 and every 10 years we’ve had to reinvent ourselves.

Finance

TM: At the brewery and with your expansion there, what is your finance – cash or borrowing?

David Grant, Moorhouses Brewery: Partly cash, partly bank, partly grant funding that we’ve been able to secure because it’s a viable proposition. It started about four years ago, its been a long process and we’re still not there yet because of the hurdles put in front of you by banks or the local authority, but we’re gradually overcoming those.

TM: Had you started this process now would it have been different?

Grant: The issues we’ve had to overcome would have been the same. We might have had more of a problem with bank investment if we were to start it now. We are about 90 per cent down the route with our investors. But everyone now is looking at the potential upturn, whenever that’s going to be, and let’s say there’s an upturn in 18 months time, we’re in a pretty good position to exploit that. And this sector of the market is still improving so we’re in a fortunate position really.

Changing consumer behaviour

TM: That’s due to the speciality nature of your product?

Grant: It’s the speciality nature of what we produce but it’s also to do with the economy. When people are threatened with unemployment they turn to alcohol, they turn to going to the pub more and talking to their friends more often in a public house environment.

Certainly within our sector is people are looking for premium quality ales or drinks that they’re prepared to pay the price for because they get value for money. UK microbrewers are seeing a 15% increase across the industry in turnover this year.

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It’s minute what we produce, compared to what Inbev and Coors do in the UK – we don’t have a share of the big lager market, which is down. English wine and even ‘champagne’ is doing quite well at the moment. When there are issues in the country, particularly if our political leaders are fiddling their expenses, people turn to comfort and to things they know. That’s quite difficult when the thing we all believed was safe, the institution of the bank, is no longer safe. A question mark has been put over that because certain banks have not been safe. But there are other industries in the UK that people do turn to.

Mike Peters, UPL: Also people are not buying large ticket items like new houses William Hogg and cars etc, but they have Yorkshire Bank more of a smaller disposable LSC income and feel at the end of the week they can treat themselves with a better beer or a better shampoo.

Hogg: Let’s not underestimate the impact of the reduction of interest rates on the disposable income of households.

They’re using that in two ways; they’re not using that to buy high ticket items, but to trade up a little in the food and drink they choose to buy. Also they’re using it to pay down some of the debt that they’ve accumulated over the last 10 years.

Relationship banking

TM: How has the bank and customer relationship changed in the last 12 months?

Brian Colquhoun, Yorkshire Bank: We are unchanged in our approach. It’s been said that some banks have had a “one night stand” with their customers as opposed to a relationship, whereas I’m sure that is why we have fared better than some of the high street names. We believe very much in the relationship, it’s not fancy or convoluted, it is traditional prudent banking.

We really intend to retain that adviser status by talking, like this evening, unearth the problems and resolve them; rather than come in, quote a cheap price, do a deal and walk away. We say that we are “a Yorkshire bank with a Scottish accent”. We make no apologies for this.

Peters: Are you still doing the same number of deals and still (ending up) with the same amount of money?

Colquhoun: The volumes have fallen. The sector split of that has changed, but I’d also say that the requests upon us are a lot less than they were before. I can comfortably say at the moment, out of every 10 deals presented to us we’ll do nine of those deals, as we did this time last year, or two years ago, but there is not the same multiples of 10 deals coming to us. Our good long-standing clients are standing back and thinking is this the right time to move on a deal? Other people in the market are thinking “should we be thinking of changing banks at the moment, or is it better to stick to what you know?” A lot of what you see in the press is self-fulfilling, and we have not been asked on a regular basis to do the same volume of deals as we were.

Leadstory Manufacturing Directors’ Forum

Corporation tax

Brian Dew, Thumbs Up: Headline taxes will not be raised this side of an election, so are we going to get more indirect tax increases? On capital allowances, when the first year allowance for capital purchases has gone, and the WDA allowance has fallen from 25% to 20%, it’s a big hit for manufacturers. My issue is because it was introduced 12 months ago for accounting in this year’s returns, for a tax that might get paid 10-12 months after Year End, you tend to forget about it. But it hits you two years later – it’s basically a stealth tax.

Vosa: My suspicion is that with corporation tax the Government is running at its limit.

It’s interesting, the size of some of the companies which have moved abroad – these are not huge players.

If you look back at the 2007 Budget, probably one of Tony McManus the worst in recent years, Ritrama rates on property were interesting.

They decided to tax property and hotels because you cannot move these offshore. Anything that could move was going to go, so the allowances that were increased were to the benefit of less capital-intensive, intellectual property right holders who threatened to move overseas.

I think there is no more to be squeezed out from that particular stone. It won’t prevent the Inland Revenue from trying to come up with new ideas. But there’s a realisation that with corporate tax, that fact that so many were prepared to move so quickly means that they’ll treat it far more sensitively. The general view is they’re more open to debate and changing the tax afterwards, whereas with personal tax they’re not – the 10p tax rate was an example of the Government refusing to admit they’d been very daft for a long time. They felt they could tax people because they are less likely to leave the country, and despite threats of leaving, very few actually do leave.

Mergers and acquisitions

TM: It’s the bottom of the market if you want to buy. Is this a good time to consider a merger or buyout?

Colquhoun: M&A for SMEs has been one of our strongest areas over the last six to 12 months, mainly because a lot of the bigger players have withdrawn.

Again, deals that we would have done 3-4 years ago still look good today, but deals that some of the others would have done 3-4 years ago, we would not have done then or today. There are Ebitda multiples within that (Earnings Before Interest, Tax and Amortisation) and a fair number of that would be in the three to four multiple, similar to the mortgage multiplier. But we heard of a deal done within the last 12-18 months where the multiple used was 17. We would never have countenanced that, even in the good times. We have a strong corporate finance team – they have punched above their weight recently.

For M&A recovery in the downturn, out of every challenge there is an opportunity.

Mike Peters Universal Products Manufacturing

Vosa: With valuations being so low and if AIM listings are out of the question, if you have to have a look at changing ownership then management buyouts become more viable.

Again it’s about bank financing; as the banking system repairs itself and funds come back online, one would expect to see some increase in MBOs, but the days when maybe private equity or AIM flotations were worthwhile rather than simply a good old fashioned MBO, may have changed.

Colquhoun: It’s not just about senior debt, but mezzanine and sub-debt, much of the availability of that has gone too. For many of the venture capitalists and private equity guys, the finance is not there.

Private equity and privatelyowned businesses

TM: The UK manufacturing sector is granular – a base of mostly privately-owned SMEs with little debt and little equity owned by third parties. Is this changing?

• Unanimously, the participants believed the role of private equity in family-owned SME manufacturing businesses was nearly non-existent, in spite of the pressures on working capital exerted by the recession.

Vosa: Arguably this is all about expertise in niche markets where, if you’re a good SME, you’ll perhaps be one of the best companies of your type. Where really is your competition if you’re at the frontier? You have none.

McManus: In my limited experience, if you are privately owned you don’t want to go anywhere else.

From our company’s point of view I would say no, not even a last resort. The owners remain passionate about the business.

Dew: I agree with the others, it’s about the passion. With a family-owned company you’ve gone through the market with two or three generations so you’ve probably seen a few recessions before. So I see very little case for firms like this and private equity involvement.

Peters: It’s also your life’s work. It’s what you’ve done.

Labour, employee loyalty and short hours

Peters: I started my business 33 years ago and I could not understand why we get the level of commitment, support and heartbreak from staff right throughout the company.

I ask them: why do you go through this heartache, time and time again, particularly in the last two years? It’s down to the passion in what they do, they’ve grown up with it.

Its probably the same for most of you, staff have worked with you for 10, 15 or 20 years – maybe their mother or father worked there before. It supplies a lot to the wider

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Leadstory Manufacturing Directors’ Forum

community, and the company is a community in itself.

Weidenbaum: We’ve got to differentiate between a family business where the family is working in the business, and businesses where they just own it. It’s not quite the same.

Glen Walmsley Remploy

Hogg: I think it rubs off on management in a family business and the management then interacts with the workforce in a way where they treat people with respect, with dignity, will be considerate to them. And they get repaid in spades in the passion and effort they put into the business.

Peters: That’s a two-way thing that becomes a loyalty of place. They asked me recently if a guy who was sick could go off for six months. That’s six months out of 25 years service – that’s all. You support people like that because they’ve already given you 20odd years of their life. You know this man.

TM: Does this loyalty aspect transfer if you asked them tomorrow to go down to a four day week – would they stick with you?

Some: Yes without question. Some: In the main.

TM: Has anyone here had to implement shorter working hours?

All: No. McManus: We know about the automotive sector taking shorter hours. People still get paid, but just shut factories down say 20 per cent of the time. Rather than pay people in automotive plants to sit around and make them turn up for work, it’s better to take some time off. We’ve looked at doing some flexi-hours. We’re OK working at local level but we’re quite unionised so at the national level that can creates a few problems. But our local unions they are no problem at all.

What is ‘normal’?

Glen Walmsley, Remploy: Looking ahead, when is ‘normal’ going to appear and what is it going to look like for both manufacturers and individuals? What do we need economically to ensure the UK is a world player in manufacturing?

the degree of over-indebtedness that is currently hurting consumer spending.

For manufacturers, it is important to realise that the UK remains the 5th largest manufacturing nation. And that this is the first post-War recession which we have not entered with an over-valued exchange rate.

Although global demand remains depressed that the moment, those looking to export could gain substantial advantages as the recovery eventually starts to arrive. We would Peter expect Asia to lead the upturn, Weidenbaum with Europe the last to see any Trumeter significant upswing.

Some key points in brief: The size of public debt is too much to help the burden of society. Technology will carry on and develop further. How will the financial sector respond, will credit be freed up? – there are signs of that happening now with more capital markets deals.

Energy – In manufacturing, there are great gains to be made in technology such as in the renewable energy sector. We’ll have to change our energy policy radically.

Nuclear power will be a much greater part of the mix, which will open opportunities to UK manufacturers if we have the skills. Wave power and more renewables in general will come to the fore.

Credit and government loan schemes

TM: Is there any experience of applying for bank credit in the last six months?

Weidenbaum: I know of a case where someone put a business plan forward hoping to get the enterprise loan (Enterprise Finance Guarantee) and the bank asked for personal guarantees. Now I believe things are changing, but initially certain banks were very reluctant to take it seriously. There is, however, reluctance by the banks to lend, which harms business and stifles a recovery.

Colquhoun: It was rolled out without much clarity from government. The devil is in the detail. It is still being unravelled as we speak and some people are finding it more of a barrier involved than an opportunity.

Vosa: We will look at the 10 years to 2007 as the Roaring Twenties were to the Great Depression, because we had 10 years of overconsumption where we spent more than we earned, which we paid off by massive house price inflation. And Germany shows us that you can have house price falling for 10 years, if you get the demand and supply wrong. If you look at one- and two-bedroom flats across the UK there’s about five years worth of oversupply.

Weidenbaum: Politicians and financial institutions don’t understand this properly: if you have an opportunity to do an export deal, you need to move fast and you can’t get quick decisions to support contracts. People can’t put up with having to bargain or negotiate for weeks on end while foreign competitors are there. You need quick decisions. end

The new dawn is one in which junk mail is not given to you by banks who tell you have can claim an authorised credit card with a £20,000 limit. Credit will be rationed and much more expensive. Hopefully, we will not see

Other discussion topics are covered in brief in the online version, visit www.themanufacturer.com/leadstory.html

Have your say at www.themanufacturer.com

27

Emerging from the post crisis word BG Srinivas of Infosys Technologies offers four strategies for manufacturers to be leaner and more nimble when the economy improves.

THE

current economic downturn is global, broader, and deeper than any other in decades, creating adverse impact across countries and industries. Credit crunch, housing market collapse and massive job losses have collectively shaken the world markets. The pace and magnitude of the downward shift has caught companies in a painful economic hangover leaving them unprepared to adapt and respond quickly.

The numbers are sobering. This recession is considered the worst since the Great Depression of the 1930s and considerable parallels can be drawn to it. High fixed costs and steep declines in demand have left manufacturers scrambling to cut capacity or risk holding high-inventory levels. The US GDP contracted at a sharp 6.1% in the first quarter, much steeper than the 4.9% annual rate expected by the economists. The Euro GDP has fallen by 2.5% as per Eurostat records.

Unemployment rates are staggering at about 9% in the US and Euro regions, according to the respective labor statistics agencies.

Signs of optimism

Amidst all the troubling economic data, fledgling signs of optimism are emerging from several key economies across the globe. The Composite Leading Indicator index that tracks forward looking economic data ticked up slightly for March ’09 in UK, France and China. Such evidence of “green shoots” of recovery are, however, based on surveys that track expectations of businesses and households, not their actual behaviours.

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shape their businesses to survive and emerge stronger from the post-crisis world. Governments of developed and emerging nations recognise their interdependence and have acted in a concerted manner to restore the smooth flow of credit and stimulate the economy.

The injection of economic stimulus must be followed through by manufacturers with bold steps to shape their businesses and avoiding the mistakes of the past: operating with huge fixed cost structures, poor inventory focus and visibility, and slow response to rapidly changing market would be prescriptions for failure.

Here are four strategies for manufacturers and how exemplary companies have adopted these strategies to gain competitive advantage:

the business for better 1 Restructure flexibility not just lower cost:

Manufacturers are all taking cost saving measures to conserve cash. However, they need to alter their cost structures to make these variable, and utilize pricing models that provide flexibility to scale up/down to navigate uncertainty. As Forrester Research puts it: “Companies are up against the brick wall. They’re facing strong margin pressures, 10% to 15% pricing pressures, and cross currency volatility. They have only one option left: Cut costs. But never at the cost of the ability to execute a long-term vision.”

Furthermore, German business confidence moved above its low point, and US consumer confidence recovered from its absolute lows. These indicators are still lower than a year ago, but may be viewed as further signs of a trend towards optimism.

A heavy equipment manufacturer had its spend for certain parts spread across a large supplier base. The value and volume for these parts made it difficult to extract cost benefits. The company restructured its procurement to a variable model where they paid an IT service provider a fee contingent upon achieving preset cost saving targets. The company expects potential savings of $2 million, in addition to rationalisation of suppliers over a larger spend base.

Despite signs that the recovery may have begun, there’s still time for manufacturers to position themselves to

A semiconductor manufacturer that primarily sells to OEMs wanted to increase direct consumer

Leadership Leadership and strategy

engagement to influence consideration and purchase.

The company decided to use social media technologies to engage consumers, create a consistent user experience, and enhance its brand image with endusers. It deployed a social media platform using a scalable model that makes costs variable based on interactions / transactions.

2

Improve information visibility to de-risk and maximise opportunities:

Manufacturers need better visibility across their operations to make informed decisions to mitigate potential risks and capitalise on opportunities quickly. For example, tools that provide intelligence into inventories and enable collaboration can improve supply-demand matching and free up working capital.

A digital imaging company launched a new consumer printing product with a different revenue model.

The company needed a mechanism to analyse product performance by aggregating information across manufacturing, assembly, repairs, returns, printer usage, supplies usage, sales and purchase.

It deployed a platform for service intelligence and performance management to gain 360-degree visibility of the service supply chain. The company improved product quality, increased customer satisfaction, and scaled the platform for other service initiatives.

A consumer electronics firm faced long supply chain lead times and low responsiveness to demand changes, causing inventory build-up and lost sales opportunities. The company analysed lead time and replenishment policies, identified inventory management process enhancements, and integrated the supply chain planning system with the shop floor scheduling system. The result: reduction in supply chain lead time by one-third leading to improved responsiveness to demand shifts, and projected onhand inventory reduction by 20%.

A manufacturer of mobile phones and wireless network solutions captured $60 million in revenue leakage by investing in information stewardship and analysis. To prevent revenue leakage, a dedicated team used the information analysis tools to cleanse data, analyse billing and provisioning, and reconcile revenues.

partner ecosystems to 3 Leverage drive growth:

As growth stalls, innovative partnerships can create winwin opportunities. Manufacturers should expand their ecosystems to accelerate new product introduction or gain faster access to new and alternative markets with lower investment. For example, manufacturers could partner with service providers for developing products or taking them to market in exchange for a share of revenues, which aligns objectives.

A global supplier for aerospace OEMs was to provide design services for a landing gear program for a jet.

The company adopted an “international-purchasingoffice-in-a-box” approach where the IT service provider manages the sourcing program, supplier selection and performance. The company identified cost savings of 2% to 70% compared to its target price, while paying the IT service provider a share of the savings. Besides

direct cost savings, the company gains access to Indian supplier network with lower overhead and expenditure, and reduced risk.

A communications solutions company wanted to develop and take to market a critical new product while under pressure to significantly reduce its R&D budget.

The company’s engineering service provider invested R&D resources to develop the product in exchange for a share of revenues from future product sales.

sustainability initiatives that 4 Implement impact the bottom-line:

Many manufacturers view sustainability through a compliance or corporate social responsibility lens.

Manufacturers should leverage technology and prioritise initiatives that improve the bottom-line while also delivering “green products” or reducing the carbon footprint. The International Energy Agency estimates, on average, each additional $1 spent on more efficient electrical equipment, appliances, and buildings avoids more than $2 in investment in electricity supply.

A global manufacturer of aluminum was looking to increase efficiency of its melt furnace operations in the face of financial losses due to wasted energy, loss of molten metal, high labour overheads, and knowledge retention issues due to aging workforce. The company automated and optimised its melt furnace operations and integrated using wireless sensor networks, saving about $1 million per furnace per year from reduced energy needs.

A communications solutions company and a software solutions company sought to reduce the complexity of their IT infrastructures and make these “greener” in the process. The companies leveraged virtualisation and blade technology to consolidate over 200 servers in the data center to realise direct cost savings of $2.5 million and energy cost savings of $0.2 million, with significant reduction in carbon footprint. The data center consolidation increased ROI and reduced ownership costs, while making the infrastructure futureproof in terms of scale, flexibility, and robustness.

The way forward

While the current economic downturn is severe, manufacturers that turn this into an opportunity to reshape their businesses will have tremendous competitive advantage emerging from the crisis. They must look in to the future and prepare themselves for the upturn. The importance of innovation in creating business flexibility, harnessing information, expanding business networks and embracing sustainable practices cannot be underestimated. These operational shifts, with top management commitment and support from the partner ecosystem, could generate ideas to slowly but surely put manufacturers back on growth path.

Despite all the market turmoil and weak economic climate, organisations will need to leverage the underlying “pillars” of strength that fuel their competitiveness and create the foundation to reinvent, recover and rebuild. end BG Srinivas is head of the manufacturing business unit for Infosys Technologies.

Have your say at www.themanufacturer.com

29

Design as a driver for excellence

The impact that design can have to drive excellence in manufacturing means that it should be integrated into the manufacturing process from concept to production, argues Gus Desbarats, chairman of design consultancy TheAlloy.

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Depending

on which research you choose to believe, somewhere between 50% and 90% of products fail to deliver on expectation. Whether this is market expectation or customer expectation is debatable, but few would argue that the impact of a less than successful product roll out can have devastating consequences for a business.

If you search the Internet for the term “why products fail� you will find more than half a billion answers.

Poor execution of marketing, incomplete research, a flawed sales strategy and over ambition by product planners are just a few of the reasons cited. But each of these fails to address the most fundamental truth: commercial results are often driven by human decisions, and human decisions are not always rational.

Understanding human reaction and anticipating it is a difficult thing to get right.

Design and innovation

be marketed well. Yet it may still fail because not enough consideration has been given to critical non essential items that drive human psyche.

A good example of a critical non essential can be demonstrated by the electric tooth brush. Two brushes may be engineered to fulfil the same task. One might have an alarm that signals when two minutes’ of brushing has taken place, whilst the other might not.

The ability of the product to do its job is not impacted by this item, yet customer satisfaction may well be. For the sake of a non essential component, which costs next to nothing, the product might fail. Despite its ability to deliver its function well, a lack of consideration of user needs has let the product down.

Well executed design is the application of the cognitive science of how people and things interact. By ensuring that design creativity is directly inspired by detailed empathy for other people’s behaviours; knowing what to ask them and how to apply this learning, better and smarter solutions can be created.

TheAlloy was recently tasked with designing a thermal imaging camera for fire fighters. Before putting pen to paper, the design team attended a fire fighting course to understand the environment in which the product would be used. The insight that this provided, both in terms of the environment in which the product would be used, the challenges that the fire fighters faced and the extremes to which the product would be challenged helped to shape the final design significantly.

Adding value throughout the supply chain

A simple example of this was demonstrated in a market research focus group. Those present were asked to choose which of two colours variants of a product they liked most. The majority chose the first. At the end of the session, the same group was offered a free sample to take home. Most chose the second colour option.

The difference between how people think and how they act can be stark.

Understanding user requirements

Products do not fail because they do not meet their objectives. They fail because they do not recognise enough necessary objectives. The finished product may be engineered to outstanding levels of excellence.

It may do an excellent job at its required task. It may

The drive to lower costs has challenged manufacturing industry in much of the western world. The cultural and logistical issues around outsourcing manufacturing are significant, so too the disconnect that many companies experience between engineering and marketing. In an engineering led company, marketers can end up selling products that, whilst technologically leading edge, are unsuited to actual customer needs. In a marketing led organisation, engineers may find themselves trying to create solutions that cannot possibly match the marketing promise at the designated price point.

Designers with a balanced approach to innovation are in a unique position to fulfil the role of ‘customer champion’ within the supply chain process.

They can ensure that that the original The BT Home Hub

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BT Home Hub engineering detail

commercial goals from marketing are enhanced with detailed customer experience goals and then

brand value “ A company’s is only as strong as the

“

experience of the product that carries its name, and in the digital age, the importance of getting things right first time cannot be overestimated

proactively manage risk to ensure these are met not only in the look, feel and behaviour of the original design concepts, but also in the reality of what is brought to market, with minimum duplication of effort.

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Never was this more important than in a recent project to create a new identity for BT’s Home Hub 2. Having worked with BT for more than 10 years, TheAlloy is a trusted design partner, but the level of complexity within limited time scales for Hub 2 provided a significant design challenge.

Central to this challenge was to deliver a product that had a mass market appeal (BT supplies broadband services to more than four million people) and yet looked nothing like a typical router. With two different manufacturing partners in two different countries, it was essential that there was no compromise to design or functionality, which has to look great and work exceptionally well. The overwhelmingly positive reaction to the product, coupled with a high level of demand is testimony to the ability of the designer be the voice of the user through a challenging process.

The case for complementing engineers with industrial designers is widely recognised within many industries, but not all. To penetrate more widely, and convince a more sceptical audience, the ‘human benefits’ need to be completed by efficiency gains.

New technology driving new efficiencies

The latest digital engineering processes, used optimally, can achieve productivity and time to market breakthroughs in the realisation of product development and design can play its part in bringing these efficiencies to the manufacturing process.

Early visualisation and rapid prototyping techniques enable manufacturers to explore more concurrent options quickly and cost effectively at low risk. This enables decisions to be made based on real models rather than 3D screen images at a fraction of the traditional cost of creating multiple prototypes.

Organisations that TheAlloy has worked with have even gone beyond using computer aided design visuals to gauge customer feedback on alternative product options – they are using computer visuals to promote the actual product, before the prototypes are complete.

The collaboration techniques available to the designer through 3D enables the same ID data to be reused

Calling for entries: Is your company meeting the challenge of turning an idea into a best selling product?

This award will go to the manufacturing company or plant that, in the opinion of the judges, best demonstrates how it has met the challenge of turning an idea into a best-selling product; by taking it from blueprint or the laboratory, via CAD models and physical prototypes to the test bed and into a working production model. Some may have had to repeat this process multiple times to maintain a competitive edge or in order to apply advancing technologies. This award will recognise those who can show how they have become and remained competitive by increasing their rate of innovation, anticipation of and responsiveness to changing market conditions influenced by shifting design tastes, fashion, technology, legislation and economics.

ensuring that design creativity “ Byis directly inspired by detailed empathy for other people’s behaviours; knowing what to ask them and how to apply this learning, better and smarter solutions can be created

“

directly in the production of CAD assembly, reducing mechanical engineering effort by up to 60%. Because the same data is being used across the supply chain, enabling totally precise implementation, risks are lowered as well as costs.

By embracing these techniques designers play their part in delivering real efficiencies to the manufacturing process. The additional benefits are also significant.

enter at www.themanufacturer.com/awards

Design and innovation award

options, so right from the first decision point; management had a clear vision of risks and rewards of different designs. Photo realistic renderings enabled the marketing team to test a number of newspaper advertisement options long before the product was ready to be photographed, enabling marketing campaigns to be planned in advance of product availability.

Design as a driver of brand

In the case of BT Hub 2, one of the challenges was to ensure that the preferred iconic curved design could incorporate the presence of a flat circuit board. By creating the early designs in 3D it was possible to find a solution to this issue and overcome engineering concerns about the product shape by sharing the internal layout at an early stage, reducing the risk of re-engineering at a later date. The unique design, which the engineers initially declared to be impossible (before reviewing our data) also made the product harder to copy, a critical requirement of the project.

Design is a powerful tool in delivering more user centric products, quickly, efficiently and effectively to market.

This is reason enough for a manufacturer to embed design into its processes. But in the age of global competition and instant internet comparisons there is an even more powerful argument. In an environment where choice is abundant and the internet has enabled the user to become a product advocate, there is no space to get things wrong. Instant judgements are made on solutions and reputations are impacted by this. A company’s brand value is only as strong as the experience of the product that carries its name, and in the digital age, the importance of getting things right first time cannot be overestimated. The role of user centric design in this process has never been more important, regardless of industry sector. end

The same 3D process was applied to all the concept

www.thealloy.com

Have your say at www.themanufacturer.com

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How to

grow

in the teeth of a recession

The move into receivership of UK distribution firm, Energy Batteries, highlights the opportunities that other firms can make even when times are difficult. The successful tie-ins with Trojan in the US and Union Power in India show too how often, when one door shuts, another one can be opened.

For

the 46 staff who turned up to work at Energy Batteries Limited on the bitterly cold morning of Wednesday February 11, it had looked like any other day. They knew that their firm was in trouble but had little idea quite how badly it was faring.

They were in for a shock.

Brutal news awaited them as two receivers who had been appointed the day before — Mark Orton and Richard Philpott of KPMG Restructuring — addressed the staff at the firm’s three depots in Belfast, Northern Ireland, Glasgow, Scotland and the headquarters at Corby in England.

By lunchtime 38 of the employees had been laid off and the company had formally been taken into administration.

Eight staff were to keep their jobs for the final winding up of the company. The task for the two insolvency practitioners was to retrieve as much money from the skeleton of Energy Batteries as possible — and to do it as quickly as they could. It was impossible to save the company but they could stop the debts growing larger and hopefully reduce them.

It would be unfair to say that Energy Batteries had been a badly run company. Rather it had been the victim of being unhappily positioned when the recession hit. It had previously been one of the largest UK distributors.

Trading difficulties arose as a result of a decline in sales in key sectors — the bulk of its sales had been to the automotive sector; one of the first hit and worst hurting casualties of the economic downturn around the world. It closed with debts of around £2 million.

Moreover, as the administrators were soon to discover, the industrial side of the business had some valuable assets.

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International exclusivity arrangements

The firm had an exclusive distribution agreement across the whole of the UK and Ireland with Trojan, a leading manufacturer of deep cycle batteries. It also had an exclusive arrangement with Union Batteries Pvt based in Pune near Mumbai in India. Union supplied individual 2v cells that were custom configured by Energy Batteries for forklift trucks.

The firm also had another crown jewel — again an exclusivity agreement — to sell VRLA (valve regulated lead acid) batteries from Chinese manufacturer Fulriver based in Guangzhou City.

But although the 38 staff sent home from Energy Batteries were quite clearly shaken by their dismissal, and the remaining eight knew that they had only weeks at best with a job, other forces were at work.

Rumours of the close of Energy Batteries had started circulating at almost the same time as the first redundancies were announced. And one firm, the rapidly growing UK Batteries, reacted immediately to the situation.

Rush meetings

“Within a couple of hours of hearing the news our managing team had called a rush meeting to decide what to do,” says Neil Warren, the marketing and communications director of UK Batteries. “We realized immediately that Energy Batteries’ operations in Ireland would prove an immediate fit to our distribution and sales network.

“Moreover, there were other assets — both physical ones, such as the stock, which would need to be sold

Specialfeature Case study of an acquisition

off rapidly, as well as the distribution agreements that we thought were of real interest to us.”

A rush team flew to Belfast the following morning, concluding the lease agreement of the Belfast site of Energy Batteries’ operations that morning. By Thursday lunchtime Hector Johnston, the head of the Northern Ireland operation, was back in his office and the remaining eight staff were being phoned to say that UK Batteries Limited would like to offer them employment in the same site as it was now under new management.

Although ultimately there are, of course, losers in such fire sales, for the Belfast operation and UK Batteries the combination proved an excellent fit.

UK Batteries’ deputy managing director, Bob Price, said: “We jumped at the chance to take the business over. We already have distribution both north and south of the border but having a local branch will help us to significantly enhance our market share.”

In one leap the acquisition achieved three things for UK Batteries.

First, its previous distribution agreement — effectively shipping over weekly containers of batteries from the UK mainland to Ireland — had been awkward in terms of servicing its Irish customers.

For a firm that prided itself on being reactive to its customers’ needs, the weekly shipping arrangement was far from desirable. Now it had an operation base covering both north and south of the border.

Second, it had acquired a potential new network of customers that its salesforce could immediately start marketing its own batteries too. Moreover, these were customers ready to look at a new supplier. They had had difficulty with obtaining the goods they wanted from Energy Batteries as the firm found itself sinking under the weight of its bills.

UK Batteries’ Warren: the management structure had “been poised to leap in”

First thing Monday morning five containers of new batteries arrived at the Belfast site to ensure customers’ immediate needs were met and that the level of availability matched the levels achieved by UK Batteries on the mainland.

Beyond Belfast to Trojan

If the pace of change at the Belfast operations was rapid, other opportunities by UK Batteries were being explored equally as rapidly. On February 20, UK Batteries approached Trojan president and CEO Rick Godber to discuss the value of the exclusivity agreement. Could UK Batteries step in and act as Trojan’s representative? And if so when and how?

Hardly had the call been put in before the US firm was booking flights to the UK.

And third, it had acquired some of the existing Energy Batteries’ stock in Belfast to assist in the process.

On the Wednesday morning California time, Dave Godber, executive vice president of sales and marketing at Trojan and his legal team were on the long flight heading east to Manchester.

But it wasn’t just UK Batteries that was proving a winner. Eight jobs had been retained, the leaseholder of the Belfast premises had a new tenant and disgruntled customers were being brought into the fold of UK Batteries, a reputable supplier.

The two companies met at UK Batteries’ head office in Manchester to see the premises, take the tour and meet the people. “We sat down in the morning and we’d shaken hands on the deal by the early evening,” says Warren.

The two new partner firms then headed off to the local pub to celebrate the deal and introduce the American visitors to the joys of warm English beer and the deceptively mild taste of Manchester’s master brew Boddingtons.

Now operating on little sleep and ever larger cups of coffee, UK Batteries was already knocking at other doors in seizing the next moment. Union Power in India had been contacted at the same time as Trojan and a negotiating team between the two firms had arranged to meet the following Friday.

Dave Godber (left), executive vice president of sales and marketing at Trojan and Chris Taylor, managing director of UK Batteries.

It was still dark as the UK Batteries team drove south from their Manchester headquarters to the meeting. Meanwhile, Union directors Nachiket Paranjpe and G M Patwardhan flew in from their long haul flight from Mumbai.

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Meanwhile, another part of UK Batteries’ management team was looking at what was left of Energy Batteries’ Glasgow and Corby operations. In Glasgow, a deal seems unlikely to happen for either the operational premises or the stock.

But at Corby, there was clearly business to be done — not least because Energy Batteries’ leased premises were sufficiently large for the 2v battery assembly required to customize Union’s batteries to continue.

The alternative would have been to have found more room and equip new facilities at UK Batteries’ headquarters in Manchester.

There are clear lessons to be learnt here, in terms of trading during the present economic downturn says Chris Taylor, managing director of UK Batteries.

“In our business we tend to compete on a number of levels — we fight on price, we fight on quality of products the distribution and the battery programme that is offered. And these get ever more important in times like now when every pound is stretched.”

The two companies met at a central London hotel.

“Again,” says Warren, “the speed of what we achieved was amazing.

“We sat down at 11.30am that Friday and by 8.30pm Union Power of India agreed to sign an exclusive distribution agreement for the UK and Europe with a new business UK Batteries had set up. The new firm called Union Power Systems was, however, completely owned by UK Batteries.

The final piece of the transformation of Energy Batteries into a fully functioning component of UK Batteries has been an agreement between UK Batteries and Fulriver over the exclusivity rights of distributing the Chinese firm’s VRLA battery range. This will act as a supplier to the Union Power Systems business.

The creation of Union Power Systems — with handy initials when the firm moves into the UPS business — was perhaps the tactical masterstroke behind the acquisition.

New business direction

“In one fell swoop, UK Batteries, which had previously worked solely in the automotive side of the business moved into the field of industrial batteries,” says Warren.

“We had acquired three new strong product areas with the partnerships with Trojan, Union and Fulriver.

“Moreover, because we had little experience of the sector, we were delighted to hire five strong individuals — Tony Porter, Keith Joughin, Dave Wallace, Paul Anderson and Denise Rainford — from Energy Batteries to the management, sales and marketing team of the new company

36

one fell swoop, UK “ InBatteries, which had previously worked solely in the automotive side of the business moved into the field of industrial batteries. We had acquired three new strong product areas with the partnerships with Trojan, Union and Fulriver.

“

UK Batteries’ new acquisition, the Corby depot

Speed of the essence

Taylor says: “But there’s more to it than this. There’s also competition by being fleet of foot. If you don’t run ever faster than your competitors, then don’t be surprised when you find yourself behind them at the finishing line!”

“Perhaps one other factor is interesting to bring in,” says Warren.

“And that’s our management structure. In the past we’ve heard comments that we’re top-heavy in terms of managers but this kind of event shows that that’s not the case. We would never have been to have done this if we hadn’t all been poised to leap in.

“We needed one set of decision makers ready to evaluate the battery stock, another to look at the leased premises, another to liaise over the legal side of things, another to conduct the international negotiations and so on.

“This was a fantastic opportunity to make our business more successful and grow in the teeth of a recession.” end

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A healthy approach to to health and safety Improving health and safety performance is a business issue that needs to be on everyone’s agenda and can be linked to how businesses make and lose money. Andy Spooner, business development director at Suiko, looks at how developing a planned and proactive approach to health and safety should be an integral part of the business’s operational excellence strategy.

SO

where does health and safety sit on your list of priorities? For most senior executives the response will be it is their number one priority, but are these efforts as proactive as they could be or is there scope to further improve overall business performance by raising the profile of health and safety? We need to understand the context and why health and safety should be on everyone’s improvement agenda. In many businesses too often it remains tactical and left to the H&S manager.

This article will explore the subject and present a case for making health and safety an integral part of the operational excellence agenda and challenge the WhyWhat-How cycle, by answering 3 questions: Why is the integration of health and safety into the operational excellence agenda valid?

What are the principles and methodologies that need to be in place?

How do you approach health and safety to maintain the necessary pace and ensure sustainability of the solution?

The article explores the approaches of Toyota Manufacturing UK (TMUK), Linpac and Twinings all of whom lead their sectors when it comes to health and safety performance.

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Worldclass manufacturing

Diagram 1: The Why-What-How cycle

Why is the integration of health and safety into the operational excellence agenda valid?

Let’s start from the premise that we must move away from simply delivering the HSE statutory requirement, reacting to problems as they arise, to a position where leaders spend the majority of time carrying out systematic continuous improvement, thinking strategically about how to exploit the synergies of a joined up approach.

How does it fit in with what you do now?

The solution should build on what is in place and working well, integrating new practices as needed to drive performance improvement. The challenge is to make sure it delivers the right outputs and considers both the tangible and softer benefits. We need to understand the gap in performance and practices and consider health and safety as a business issue in the context of how to make and lose money in addition to the standard metrics. It is not just about prevention costs, but also the cost of not doing it, which can potentially be much larger, in terms of personal injury, the subsequent impact on morale and personal liability.

vision with the management team for the future. Safety was at the top of the agenda and was integral to the manufacturing vision. With pride Bailey emphasised: “I don’t see safety sitting on its own; it is integral to what we do. Five years on and commitment is the hub of our success and can be seen to cascade to all levels of the business.”

Mike Salkeld, head of lean enterprise at LINPAC Packaging shared the corporate line, “It’s ‘safe’ to say that HSHE performance would have been ‘business as usual’ had we not taken a proactive approach to safety improvement at the sites. In other words it would have been an unpredictable ‘draw’ with ‘industry average’ results!” he continues. “Health, Safety, Hygiene and Environment are at the top of the Operational Excellence agenda for Linpac, not only at a local site level, but across the globe. Within the deployment of our policy, HSHE is the ‘first in line’ when it comes to setting objectives and a strategic approach to improvement.”

What are the principles and methodologies that need to be in place?

Suiko’s advice is that to improve the likelihood of lasting change requires a stepped approach; doing things at the right time and in the right order. The methodology is about people and process, with an emphasis on developing the right behaviours not simply deploying more tools. In most instances, many of the tools will have been tried before, so it will not be about reinventing the wheel, rather it is about getting people to develop the right habits. The business spin off is that these behaviours and approaches used today for HSE can also be used tomorrow for quality management, reliability and more.

Start with the end in mind

TMUK delivers exceptional HSE performance and at the same time creates an environment and practices where overall business performance can excel with health and safety integrated into the ‘Toyota Way’ and a part of their policy of continuous improvement.

Health and safety is the number one priority at TMUK plants and they adopt an holistic approach, committed to designing safe processes and maintaining safe equipment to ensure they provide a safe and healthy working environment for all.

David Bailey, plant manager at Twinings, joined the Andover site five years ago and one of his first actions was to carry out an audit to understand the gaps in performance and practices. The next step was to gain management commitment and he set about creating a

Getting the foundations in place

It requires a consistent approach, starting by ensuring the basics of operations management are right and in the context of health and safety; it is about people working to standard. “It starts with getting the structure right, and then ensuring everyone understands their roles, what they are accountable for and what they are expected to do” reiterates Bailey. “Measuring performance is critical for success, and by involving the local team in establishing the targets will lead to greater ownership for the results.” Salkeld supports

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this view, “In the packaging division this is reflected in our daily, weekly, monthly, quarterly and annual process of objective setting and routine performance review.

Of course, performance is nothing without the correct behaviours and we have underpinned the behavioural change by adopting a why-what-how approach, in pursuit of the desired target – zero accidents.”

In all three businesses, employees own the numbers.

Tracking of performance is made visual, kept simple, easy to understand and maintained at a local level which makes the whole process manageable. Focus is maintained, starting every day – and indeed every meeting – with scheduled time for review and preview of HSHE. Having the foundations and basic systems in place, it is important to set the boundaries to enable people to take control at the right level and enable teams to apply other best practices, tools and Lean thinking when appropriate.

Like Linpac and Twinings, Toyota talks about the basics - ‘safe working’.

“

Engagement is key and commences immediately upon starting employment with Toyota, during the induction programme and continues throughout an employee’s career. Safety is a part of everyone’s working day. Each day starts with a pre-shift meeting where safety is the first agenda item and pre-safety checks are carried out on equipment. Employee’s health is confirmed ahead of each shift and for some employees pre-shift exercises are undertaken to ensure muscle groups are warmed up ahead of production.

Toyota ‘safe working’ is split into three key areas: safe processes and equipment, safety kaizen and training and confirmation. For all three areas to be effective, employees require a safety mind, which is enhanced via KYT (hazard awareness training) and near miss reporting. A fundamental part of the Toyota Way is genchi-genbutsu (go see) and is a key part of the accident prevention process. This allows senior management to witness first hand any safety related issues and to heighten awareness of health and safety issues.

Applying a common problem solving approach

There is agreement too that embracing basic problem solving is arguably the biggest win organisations can get in improving HSE performance in the short term; mobilising employees and better utilising their innate knowledge and expertise in their processes.

The organisations that foster a ‘no blame’ culture,

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Workplace organisation (5S) and Total Productive Maintenance (TPM)

Whilst there is no single answer, workplace organisation (5S) and Total Productive Maintenance (TPM) are two methodologies under the umbrella of operational excellence that can make a significant impact on health and safety performance if embedded effectively.

The HSE see 5S as a particular application in addressing three of its priorities, namely: workplace transport accidents musculoskeletal disorders slips, trips and falls

“

There is agreement too that embracing basic problem solving is arguably the biggest win organisations can get in improving HSE performance in the short term

where the focus is on understanding the flaws in the process rather than rooting out the individual to blame will be best positioned to engender a ‘problem solving’ culture.

Have your say at www.themanufacturer.com

Both 5S and TPM should result in improved plant reliability which should in turn reduce the need for human interventions with equipment. Reducing the level of human interventions will, in turn, reduce accidents as many accidents occur when operators try to intervene when the process or equipment isn’t running correctly.

Salkeld advocates “The principles of 5S, Asset Care (TPM), audit checklists and worker-to-worker handover have all helped embed the improved way of working and are core to the belief system at the St Helens site, fundamentally because it’s the safest way to work.

They are the principled standards of the whole team at St Helens and they are the results of a combination of great buy-in at team level and great leadership.”

Bailey concurs with this view and emphasises the need for commitment and effective communication. “With our technicians having a better feel for how 5S and Maintenance links into the whole production process, they have far better judgment when it comes to making on-the-spot decisions that can drastically affect safety, performance and efficiency.”

The watch out for both 5S and TPM is that it is a philosophy and way of thinking rather than just another set of tools, so unless the thinking and habits are embedded in the culture there is a strong likelihood that people will drift back to old habits.

How do you approach health and safety to maintain the necessary pace and ensure sustainability of the solution?

Salkeld summarises his position: ‘Safety’s No Accident’ is the mantra, HSHE best practice implementation is mandatory and change has to happen, but there is now an appetite for improvement, and the adoption of best practice solutions continues to increase with pace. The whole division is seeing a shift towards HSHE pro-activity

The case for making a commitment to the health and safety agenda should be based on the logic of adopting a structured approach, which when applied will be the ‘way of working’ not an add on ‘initiative’. This again supports the view that it should be integrated into the overall plan, with a prerequisite for success being to have clarity around the expected commitment that people need to make; after all, it should be about embedding a ‘way of working’ that involves everyone throughout the organisation.

Optional inclusion?

Linpac - Some of the results: 2007 50% fewer accidents y-o-y – a significant improvement to well below industry average Overall Equipment Effectiveness pushing beyond World-Class levels Staff turn-over improved by 24% Employee involvement in improvement projects increased to above 70% All reported near-misses had 100-year fixes (root cause countermeasure) put in place

Calling for entries: Is your company making quantified, sustained progress towards being world class?

This award will go to the manufacturing company or plant that, in the opinion of the judges, best demonstrates that it is trying to achieve world class manufacturing standards – generally understood as scoring a minimum score (from 95%98%) on an absolutely true measure of efficiency. Judges will look for evidence of benchmarking against best practice and will examine measures like lead times, customer returns, work content, labour minutes per unit, inventory levels and cycle times, checking that action has been taken to improve these.

30-second corrective actions to address potentially hazardous situations and pre-task risk assessments embedded into the safety ethic of the whole work force Continuous self-assessment against challenging standards driven hard. end

enter at www.themanufacturer.com/awards

that would otherwise have taken a lot longer had we not made the relatively easy step of making HSHE part of everyday life and using why-what-how.”

World class manufacturing award

Twinings – Some of the results: The basic precepts of 5S Six Sigma Japanese

Western translation with explanation

Seiri

Sift – Clear out what isn’t required. For example: Get rid of everything that is no longer used or required, the things that often lead to cluttering the workplace, risking unnecessary human intervention, knocks, trips and falls. For example: obsolete stock, redundant jigs, fixtures and fittings.

Seiton

Sort – Organise ‘a place for everything and everything in its place’. Work out what you really need to do the job and locate in the right position. For example: hygiene stations, work stations and shadow boards. Ergonomics, motion and conveyance should be considered to support smooth working.

Sieso

Shine – Inspect and clean as you go and work to the agreed standard work as a continuous process. It is about creating ownership and pride in the workplace.

Seiketsu

Standardise – Develop and agree the current best practice for the work to be carried out and make standard work.

Shitsuke

Self discipline and sustain – The most difficult of the S’s as it requires behaviour change and is entwined with the continuous improvement mindset.

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for Success An in-depth analysis of collaboration between the UK manufacturing sector and colleges and universities

New initiatives in collaboration, new and established courses, learning options and funding for innovation

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The Lean Enterprise Research Centre (LERC), part of Cardiff Business School, has for the past ten years actively assisted UK manufacturers to improve their operations, reduce costs and build in value and efficiency to their production and value chains.

LERC is renowned for its exceptional research, world class educational courses and industry renowned training programmes. The MSc in Lean Operations was the world’s first lean masters programme and continues to educate some of the world’s most valued lean champions.

LERC is now developing specialist networks, in-house training support and Training Within Industry (TWI) courses. Later this year, it aims to become the UK examiner of the AME-SME professional exams system.

It is an example of how true turnarounds are only effective through attention and success with both the above and below the ‘waterline’ activities.

P

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a multi-national organisation’s journey to lean and

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adigna feum dolenim dio dolore euisi. cortism olobort ionsequam quisim howdolore they successfully implemented and sustained upstream manufacturing process in thewisim aerospace tetum nulluptatem acip exerit eum dolorting euipsum zzrit digniam included alit voloborationsenis dip Ulputem quipisisim do odionsed do conse min et del the ea amconum lean to help turn organisation’s financial sector.

The benefits 30% reduction in exeros erostrud dolortisi. ming eugait in vullute venismod sandignim quissequat. Rud performance around’. lead time and 40% reduction in WIP, contributing to eliscilisit at praesse dip ectet, eugiam, si.

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ElenimModel dolum vulla feu faci eui nim vel iuscingaround eum quatue tat nismodit acidunt velenis non tat. Ut adit ut praeseq uismolobore tie aliquatchange aliquatum quisl of conum sustainable and addresses the often henis aut iuscip et, senim venim duis alis ea faccum dunt nim vullan doloreet dolortinit lor sequi te con invisible, and hard to copy, ‘enabling’ elements of amcommy nit wis aute dolenit vel henim ilit wis exero odolenim volorem dolor alit inci bla cons enis successful lean organisations: etumsandre faccumsandre magna vullaore tie ting exero enibh eros duis er augiat luptate esequi blaor faccum quisl dolorer in ullam augait alit irit augiat. Ut num zzrilla am ipit vulla conullandrem zzriustrud magnaon feuisim voloborperat vel ent lum zzrit lum For further vendre information these quisi. projects, or if you tat. Ut lut nim ercipit luptat. iuscipsum vent in vent nonswish ad to contact LERC to see how we can improve Veleniscin henis alitand velitAlignment nibh enit, • Strategy Ipissectem nullan please exerostrud tat autatet velestrud magna your con business quissit, volore tet irilit laor alit utem performance, contact • Leadership magna feu feum quis ea facillan voloboreros doluptat nit at veriustio quipism oloreet, conullaortie facip info@leanenterprise.org.uk • Behaviour Engagement vero odiatet nulputat illandre enismod olobore dolor aci tat eraesequis nim iustrudand do ex eugait faci estrud dolorer aestrud tatem dolore dolestie dolobor vel velendipisManagement autpatem do and loborem • utem Process the application

www.leanenterprise.org.uk Tel: er 029 2064 7028 numsan henit lore venibh susto secte molor ing ero del ea facilit ing od estie eum aciduis augue minis

of Lean Technology, Toolseugiamcore and Techniques. odit ut ad ese consenisi blam modiamet, quatuerat nostism olumsandiam aci tis eugait zzrit lorper ad diatio od tat, cons lor sequis euguer autet ad velis nit eugiam dolortionse dunt el digna feugiatet lut adiam dit tatuerosto con eleniat dolestisl del ipsustion ut lore digniat augiame aliquisit dunt ing ent nis erit velis dit alis dignisl dolum diam, qui tat. tuercidunt ad erciduis dolortie nos duis do doleniamet, venit vel ut Ut num autpat, consequisim deliqui moluptation ulla accummy nullaore aciliscinim quat laore velit laortio smodolobore dolore min el ip molor in et loreetu mmodoluptat.

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Mind games Universities and manufacturing are getting better at working together, but there remains room for improvement. Ruari McCallion reports.

I

n his 2006 report, Prosperity for all in the Global Economy: World Class Skills, Lord Leitch highlighted that the UK is falling behind its global competitors. The UK lies 17th out of 30 OECD countries in low skills, and 20th in intermediate skills. Nonetheless, at the higher level skills, it fares slightly better in standing 11th. Better still, the UK is currently positioned in the top six in terms of both GDP and output.

Crucially however, the skills shortfall remains ominous: five million adults in the UK lack functional literacy; 17 million have difficulty with numbers; and more than one young person in six leaves school unable to read, write or undertake basic mathematics effectively. In

essence, if skill levels aren’t significantly improved – which can only be realised through more effective training – Britain risks sliding dangerously down the ladder of global prosperity.

Lord Leitch stresses the point that the industrialists of Victorian Britain invested heavily in skillsets. Indeed, it led the world in creating a national – and much lauded – system of education. In the face of global competition, therefore, and where China and India in particular are turning out well-qualified graduates in their millions, slacking on skills is simply not an option.

In launching his report, Leitch said: “Without increased skills, we would condemn ourselves to a lingering decline in

competitiveness, diminishing economic growth and a bleaker future for all.” ‘‘The case for action is compelling and urgent. Becoming a world leader on skills will enable the UK to compete with the best in the world. I am optimistic”, he added.

Many of the UK’s older universities, especially in the North of England, were established with the help, financial support, and strong encouragement of the country’s industrialists. With the passing of time, however, such close relationships have become worryingly strained.

While isolated examples of excellence were identifiable, Cranfield University, to name but one, many manufacturing firms felt themselves isolated from a

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collaborative process. And whilst collaboration didn’t necessarily stop altogether – indeed, academia based around metals and materials; pharmaceuticals; chemicals; aerodynamics; and DNA contributed enormously to progress in several centres – the all too common experience of industrialists was that university support in the latter twentieth century was deeply unsatisfactory.

One respondent gave the example of a project run in conjunction with a university, in which a means of predicting demand was being developed. The company wanted to use it to speed up the quotation process, with the academics confident that they could deliver viable results.

Perhaps unsurprisingly, the experience, said the company, was ‘a disaster.’

University staff working on the project took a three month summer holiday, and with a breaking down of communication between the parties, the collaboration was ultimately abandoned after two years.

Understandably, such experiences are likely to leave commercial operators extremely reticent in their support for universityaffiliated projects.

Thankfully, the situation in general has improved in recent times.

Studies indicate that more young students are interested in careers in engineering and the sciences.

Given the current apoplectic sentiments felt towards financiers, it comes as no great shock that the City has lost its – once considerable - glamour. Yes, the process has been hesitant at times, but understanding has grown with experience. As a result, both sides have a better grasp of expectations, timeframes, and the processes necessary to deliver acceptable work. Indeed,

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one struggles to find a university in the country that does not now have a KTP (knowledge transfer partnership) programme, coupled with projects for industry-led research, and funded by private companies, the government, or the universities themselves.

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“One of the best indicators of collaboration is Innovative Manufacturing Research Centres (IMRCs),” said Dr John Petzing, senior lecturer in Metrology at the Woolfson School of Mechanical and Manufacturing Engineering at Loughborough University

University collaboration – IMRCs June 2009 IMRCs Innovative Manufacturing Research Centres (IMRCs) were formed through consolidation of existing grants.

They receive block grants from the Engineering and Physical Sciences Research Council to be flexibly allocated between projects, which provides the UK’s leading manufacturing researchers with a base of flexible – but ultimately stable – funding, freeing them from the uncertainty and longer lead times of projectbased applications. The objective is thus to enable each centre to be responsive to the needs of UK industry, and to pursue strategic research themes as appropriate.

There are a total of 16 IMRCs in the UK, covering a broad spectrum of research topics, and intended to create or improve existing processes, from business strategy and construction management to free-form fabrication processes and bio-processing. Similarly, individual IMRCs vary considerably in their remits, from narrow focus on a single topic – such as e-business – right through to those involved in the full gamut of manufacturing research.

Typically IMRCs are centred at one university – such as Cambridge Engineering Design Centre; Cardiff University Innovative Manufacturing Research Centre; Cranfield Innovative Manufacturing Research Centre; and Warwick Innovative Manufacturing Research Centre – but regularly collaborate with other academic institutions. By way of example, whilst the Innovative Electronics Manufacturing Research Centre (IeMRC) has its administrative hub at Loughborough University, the ‘executive functions’ are shared by the Universities of Bath, Brunel, Greenwich, Lancaster, Loughborough, Sheffield and Strathclyde. Loughborough also hosts the Innovative Manufacturing and Construction Research Centre (IMCRC).

Industrial partners – who also provide funding – range from UK manufacturing giants such as BAE Systems and Rolls-Royce, to SMEs. Further information: www.epsrc.ac.uk

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“The IMRCs provide an opportunity for companies and academics to get together. They are platforms for looking at research that is a bit further away from market reality, although the government obviously wants to see realism,” said Pelzing. They reflect changes in the way research funding is provided. “Rather than lots of small grants, the government gives fewer, larger grants to university centres. But we don’t get a slice of the action unless commercial companies are on board. We have a plethora of research projects including Grand Challenges, which are very much marketoriented. They are a vehicle for funding projects in manufacturing disciplines with typical funding of £1- £4 million.”

Loughborough’s Sports Technology Institute serves the sports goods industry, unsurprisingly, given the university’s reputation as Britain’s premier centre of excellence for physical education. In collaboration with Adidas, it produced the 2006 world Cup football, which was more spherical, accurate and, controllable than any previous soccer ball. It also produced the Euro 2008 ball and has a number of projects going forward.

The university’s Rapid Manufacturing Research Group, founded in 1992, is a worldleading research group in the field of rapid manufacturing, through the development of rapid prototyping and rapid tooling technologies, together with the application thereof. Staff involved in the management of rapid manufacturing are currently investigating future supply chain scenarios, cost models, and makeor-buy models for a range of applications.

Pelzing was very keen to point out that Loughborough tends to get more than its fair share

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of engineering undergraduate students – around 200 a year.

“Loughborough has the country’s only sponsored manufacturing degree programme,” he said. A university with strong industrial and research links has to be an attraction and for those interested in the automotive field, its ‘glass engine’ will be fascinating. “It has been around for about 20 years. It’s a fully-firing single-cylinder engine that is used to verify simulations.

Once design engineers are happy that their computer models are correct, they can use the glass engine to examine combustion characteristics and continue development, based on their CFD (computational fluid dynamics) codes. It runs on diesel, petrol, biofuel, anything, and just about every engine group in the world has worked with us, including Lotus, Perkins, Jaguar and so on.”

Less than three hours up the M1 is the Keyworth Institute at Leeds University, one of the leading KTP universities in the country, and which offers a spectrum of engineering degrees.

“We have put a lot of effort into knowledge transfer,” said Derek Hurran, operations manager at the Keyworth Institute, which has been running since 1975. “We have tried and tested various mechanisms for getting universities and business to collaborate in a structured way.”

Among the resources Leeds has, is a selective laser sintering machine: “We were the first university in the UK to have this type of machine – we got it in the early 1990s. It’s available for companies to get their parts machined – anything from a prototype hubcap to a shallow internal insert. We have 60-70 commercial partners during the course of a year, including repeat orders.”

Of particular note is the established placement programme at Leeds/Keyworth, which sees the classes most proficient engineering students undertaking summer secondments to leading

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manufacturing firms. Through actively contributing to ‘live’ projects, both parties reap the benefits of collaboration. The hosting organisations are assisted on technically-heavy processes by competent young engineers, while the internship forms 25% of a student’s final year assessment.

“In general, employers are happy with their technical skills but there have been shortfalls in ‘soft skills’ – leadership, communications and business management,” said Hurran. “Since 1999, we have been running our course, and have just done a run of graduates from 2007.

We have good results on feedback, including how well our graduates are prepared. Eighty-five per cent are still working in engineering – at one time, the number was fewer than half.” Keyworth has also developed an Executive Masters Degree in Manufacturing Leadership, in association with Yorkshire Forward (the RDA) and with MAS in Yorkshire and Humberside. ”It’s a three-year, part-time course with half its modules in business and the other half in engineering – in essence, an MBA for the manufacturing sector.”

Yorkshire is developing a formidable reputation for the quality of its university science departments such as metallurgy – Sheffield, especially – and is simultaneously expanding its nanotechnology expertise. In lieu of such advances, 2005 saw an initial investment of £5 million in nanotechnology and microsystems research at Sheffield, York, and Leeds universities. The York-JEOL Centre for Nanolithography and Analysis – a joint venture with with government of Japan – has received £1.65 million to help create a world-class facility that will be available to industry. The balance of the £5 million has been awarded to the Polymer Interdisciplinary Research Centre, based at the Universities of Sheffield, Leeds and Bradford, to develop its focus on commercial development of nanotechnology in the fields of polymer and composite materials. Finally, Yorkshire Science, founded and supported by Yorkshire Forward, the regional development agency

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What would really give your organisation ‘the edge’?

Original Thinking Dr James Wilkie, Director of Research & Commercial Services at the University of Birmingham asks “What would really give your organisation ‘the edge’? Try accessing 3000 academic brains, original thinking and a passion for making a difference.”

Regional Engagement One of the fundamental issues affecting manufacturing competitiveness is access to advanced technologies.

Whether looking for product development or process improvement, manufacturers hoping to maintain a competitive edge by using the latest innovations can face formidable barriers, including the high cost of the technology itself and the expertise required to use it.

British universities, home to some of the most advanced technology research in the world, have long been recognised as a potential solution. The problem has been one of access and knowledge transfer. The University’s Business Engagement Team focuses on just this - helping companies innovate by accessing the University’s expertise and technology portfolio. Start ups to regional companies have all benefited from this support and collaboration, eg. D&A Steering Ltd, Reynolds Technology Ltd, Teer Coatings Ltd, Ergohome and Rondol Technology Ltd.

Case Study: Ergohome Ltd. ErgoHome Ltd. specialises in providing high quality, affordable and convenient, factory built homes that are delivered next day and ready to use with low maintenance running costs.

Initially inspired by the housing shortage pressures it has evolved to meet other needs such as the environment and energy independence. The homes use carefully selected materials and systems that minimise the impact on the environment not just at initial construction but also in longterm use. Groundbreaking Structural Insulated Panels (SIP’s) were specified to deliver the very high structural and insulation performance needed in the product but the company did not have the technical resources or equipment in-house to conduct important R&D activity.

Collaboration between ErgoHome and the College of Engineering & Physical Sciences at the University of Birmingham secured initial regional funding to look at feasibility and testing the results of which then levered funding from EPSRC (Engineering & Physical Science Research Council) to

As a small company, we have found working with the University of Birmingham to be of major benefit when developing new products Keith Noronha, Managing Director, Reynolds Technology Ltd

Put a century of original thinking to work in your business The University of Birmingham has long recognised the benefits of collaborating with industry and for over 100 years has been working with some of the world’s best known companies, such as GlaxoSmithKline, PepsiCo, Birmingham Forward, Procter & Gamble, Cadburys, Joseph Rowntree Foundation, The Environment Agency and Unilever.

Part of the Russell Group, an association of 20 major researchled universities, and attracting £85 million of funding per year, what distinguishes Birmingham is our commitment and passion to making a difference.

Focussing on the big issues on the world’s agenda, our achievements have far reaching implications. According to the results of the Research Assessment Exercise 2008 (RAE) 89.9% of the University of Birmingham’s research activity has international impact.

Everyday we improve lives by focusing on health care, climate change, energy, politics and the manufacturing challenges we face. provide the resources to recruit a full-time PhD student based in Civil Engineering. The key objective of the research project will be to develop and validate innovative connection systems for Structural Insulated Panels (SIP’s) construction.

The project is also looking into the feasibility of building two ErgoHomes on the campus at the University in 2009 to facilitate testing and to help raise the profile of the Company.

Testimonial

Excellent ground work by Dr Jimmy Yang at the University of Birmingham led to successful PhD hire and background work relating to SIP’s technologies. Knowledge gained from these studies ensure that the final product will be thoroughly resolved, reducing both technical & commercial risks going forward.

Paul Chadwick, Managing Director, ErgoHome Ltd

Case Study: Drywite Ltd Drywite, a small family owned business, have been manufacturing vegetable preparations for the catering and vegetable industries since 1933.

Their main product is sulphite based and over the years has developed strong UK and export markets, however the increasing trend is for organic non-sulphite products. In order that they retain their position in the marketplace, they required expert help, and funding, to enable them to develop an organic sulphite free vegetable preparation that is effective and economical to use.

chemical route, using environmentally acceptable chemicals, that will provide a six day shelf life for peeled potatoes, whilst retaining key product characteristics such as colour and implement this in a commercial operation.

This research project has been used to provide background material for the company to apply and get approval for a KTP (Knowledge Transfer Partnership) project under Dr Tony Hasting.

Testimonial

Most fresh fruits and vegetables have a pronounced tendency to discolour to a greyish-brown after periods of storage, producing an appearance that is unacceptable to the majority of consumers. The main focus of academic work carried out has been on enzymatic browning, one of the primary reactions responsible for such discolouration.

We are grateful … to use the expertise of Dr Tony Hasting and the resources of the University of Birmingham for a project that our company may not otherwise been able to afford. We were very happy with the report that Dr Hasting produced, we would like to continue to develop links with Universities.

Dr Tony Hasting in the College of Engineering and Physical Sciences developed a scoping project for designing a

Kelvin Lee, Managing Director, Drywite Ltd

Over twenty years of original research, collaborating with experts at the University of Birmingham has contributed to the delivery of Unilever’s research agenda Dr Jonathan Powell, Platform Director, Nutrition and Health, Unilever Discover

Birmingham Science City In order to further underpin the University’s commitment to the region and to developing world-class research and technology, we are working in collaboration with University of Warwick to make best use of the complementary strengths of the two institutions.

Six major collaborative research and knowledge transfer programmes have been developed focusing on energy, advanced materials and translational medicine in order to develop and use science and technology to improve prosperity and quality of life.

The project is part of Birmingham’s ‘Science City’ agenda, a government initiative to promote growth in science research in cities across the country and aims to create additional income and jobs to the region. This project is sponsored by Advantage West Midlands and represents the biggest R&D project in the region, apart from the investment in New Street Station, Birmingham.

Want to know more?

Achieve your commercial potential by contacting the Business Team today

Telephone:

0121 414 3898 or email:

businessteam@bham.ac.uk

(RDA), has been developing a strategy to support and encourage innovation in the region.

Encouragingly, the developments in Yorkshire are far from unique. As well as boasting, in Manchester, one of the world’s largest universities, the North-West has a well-established funding network, especially with regard to venture capital (VC).

Wales, with its ‘Technium network’, is an area widely considered to be at the forefront of the manufacturers/academic axis.

The scheme seeks to bring small businesses together in order to facilitate the exchange of ideas related to development, whilst simultaneously providing the firms with access to a wealth of academic resources.

Lastly, science parks and innovation centres are sprouting with regularity throughout the UK. By way of example, Caparo has established the The Caparo Innovation Centre (CIC), a joint venture with Wolverhampton University, and intended to help small inventors and innovative companies to develop ideas – through collaborative design and marketing – into cogent business plans. As well as KTPs, Caparo also works with KITTS (Knowledge, Innovation, Technology, Transfer Scheme), a West Midlands regional initiative, involving 10 partner universities within the West Midlands and part-funded by the European Social Fund (ESF), and Advantage West Midlands (AWM).

Projects typically run for 10-12 weeks.

Lord Leitch radiated optimism about the future of the manufacturing and higher education sectors, including a strengthening of its previously tense relationship. And whilst the blossoming of networks between universities and industry operators must represent only a signpost towards the direction in which the UK is headed, it is fair to say that Leitch is right to be confident.

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Knowing how to collaborate with SMEs Knowledge Transfer Partnerships and Knowledge Transfer Networks are established forums for manufacturers to gain benefits from universities.

Collaboration between universities and manufacturing may erroneously be thought of as being limited to blue chip organisations, that is, those firms that can afford to fund big ‘blue sky’ research grants. However, the Knowledge Transfer Partnerships (KTPs) prove that this is not the case. Although technically open to manufacturers of any size, SMEs — broadly defined as companies with up to 250 employees — are especially favoured.

Automating thermoforming Consider the example of CR Clarke & Co, of Ammanford in south Wales. Established in 1974, the firm manufactures products for use in the educational and commercial sectors, including machines designed for bending; vacuum forming; dip coating and diamond polishing. In line with the KPT ethos, it recently collaborated with the University of Swansea to develop an innovative and fully automated line-bending machine for the thermoforming and fabrication of thermoplastic materials. The project was implemented due to a recognition that, in order to increase efficiency within the organisation, CR Clarke needed to reduce labour costs, wherever possible. The developed machine thus automates the loading, heating, folding, and uploading steps, with computer simulation helping to minimise the timeframe from initial design to production.

Coupled with a significant increase in sales volume, the experience has improved CR Clarke’s development processes for all future products. The company currently employs around 35 people.

A truly new Morgan Morgan Motor Company of Malvern also sought to make use of a KTP for the development and production of its Aero 8 model, which, while reminiscent of a traditional Morgan, in effect represents a startling break with convention. Principally, the model displays a more complex design specification, resulting in the company needing to significantly increase its design and analysis capabilities, both for the Aero 8, and all future new vehicles.

The KTP project focused chiefly on the car’s introduction into the American market, covering detailed design and component analysis, together with the implementation of a bespoke vehicle testing programme.

A KTP Associate, Matthew Welch, came from Birmingham City University as a graduate in automotive engineering. He sought to compress development lead-times and costs, thus achieving compliance with the manufacturer’s technical and legislative requirements. Similarly, the project developed advanced computer models to pinpoint noise and vibration sources.

Such targeted preparation paid dividends, and following the successful management of a co-ordinated measurement machine, Morgan felt justifiably confident enough to invest in its own machine, thus enabling the company to address any potential implications of new designs on manufacture. The KTP has been integrated with the corporate strategy for the development of Aero * and other Morgan cars up to 2009. If further proof were needed that such collaborations are, in fact, mutually beneficial, Morgan reports that Welch was hired as an homologation engineer upon completion of the project.

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A formal structure KTP is funded by the Technology Strategy Board, together with 17 other national organisations, including the devolved governments in Wales and Scotland; Invest NI (Northern Ireland); regional development agencies (RDAs); Defra and two EU bodies. Its focus is on helping businesses to improve competitiveness and productivity through the better use of knowledge, technology, and skills available within the UK knowledge base.

A KTP is a formal partnership between a business (company partner) and an academic institute (knowledge partner), and will generally involve a graduate KTP Associate seconded to the company, and working alongside its employees for a stipulated period of time, generally the length of the project.

How much?

Government grants are available to cover part of the total cost. SMEs should expect to pay around onethird of the total, depending on the size of the company, an average annual contribution that starts from

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£20,000. This investment secures the services of the KTP Associate, and the time and specialist expertise of academics and researchers at the knowledge partner.

Knowledge Transfer Networks (KTNs) KTNs are differentiated from KTPs — focusing, as they do, on individual, structured, fixed-term partnerships — in that the former consists of a group of individual parties with a shared interest in a particular area of emerging technology. Their ultimate objective is to provide an easy means of acquiring and facilitating knowledge and, in doing so, help to shape the future of technologies central to Britain’s long term manufacturing health.

There are 25 KTNs in circulation with total membership of around 45,000. Members include universities, businesses, RDAs, and funding bodies. They cover a vast range of sectors and areas of interest, including aerospace and defence; bioscience and health technologies; industrial mathematics and materials and resource efficiency, to name but four.

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Their stated objectives are to: deliver improved industrial performance through innovation and new collaborations; drive knowledge transfer between supply and demand sides of technologyenabled markets; and facilitate innovation and knowledge transfer through established networking structures. Furthermore, they seek to provide forums for a coherent business voice to inform government of the country’s technological needs, issues, and polices, including those regulatory matters which are either enhancing or inhibiting innovation in the UK. Among the projects the Integrated Products KTN has been involved with is an electric thruster for underwater vehicles and marine turbine applications. Developed at the University of Southampton with a £5,000 Spark Award and support from the Engineering and Physical Sciences Research Council (EPSRC), the thruster is being produced by TSL Technology and, given its success, now sold globally.

Further information: www.ktponline.org.uk www.ktnetworks.co.uk

Engineering & Manufacturing Degrees listing

Institution 1. Engineering - first degreees

Qualification key: 1, 2, 3, 4, 5 = Years:

FT = Full Time:

PT = Part Time

The University of Aberdeen Engineering (H100)

4FT Hon BEng

Engineering (5 years) (H104)

5FT Hon MEng

Engineering (Electrical & Electronic w. Euro St) (H602)

4FT Hon BEng

Engineering (Electrical & Electronic with Mgt) (H603)

4FT Hon BEng

Engineering (Electrical & Electronic) (H620)

4FT Hon BEng

Engineering (Electrical) (H601)

3FT/4FT Ord BScEng

Engineering (Electronics w. Comp & Software Eng) (H6GP)

4FT Hon BEng

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(The University of Aberdeen continued) Engineering (General) (H102)

3FT/4FT Ord BScEng

Engineering (Integrated Eng with European St) (H106)

4FT Hon BEng

Engineering (Integrated) (H105)

4FT Hon BEng

Aston University, Birmingham Engineering (Foundation) (H102)

4FT/5SW Hon BEng

Birmingham City University Engineering Foundation Year (H108)

1FT Fyr

The University of Birmingham Engineering with Foundation Year (H100)

4FT Hon BEng/MEng

Blackpool and The Fylde College Electrical / Electronic Engineering (006H)

2FT HND

Bournemouth University Design Engineering (H100)

4SW Hon BSc

Design Engineering Top-Up (H150)

1FT Hon BSc

The University of Bradford Engineering and Management (HN1F)

4SW Hon BEng

Engineering and Management (HND2)

3FT Hon BEng

University of Brighton Engineering Foundation Year (H108)

1FT FYr BEng

Engineering Foundation Year - (Civil and Environmental) (H108)

1FT Hon BEng

Engineering Foundation Year - (Construction) (H108)

1FT Hon BEng

Engineering Foundation Year - (Design/Sports Technology) (H108)

1FT Hon BEng

Engineering Foundation Year - (Electrical and Electronic) (H108)

1FT Hon BEng

Engineering Foundation Year - (Mechanical and Manufacturing) (H108)

1FT Hon BEng

University of the West of England Aerospace Systems Engineering (H430)

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3FT/4SW Hon BEng

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Brunel University Communications Networks Engineering (5yrThk SW) (H645)

5SW Hon MEng

Foundations of Engineering (H100)

4FT Hon BEng

University of Cambridge Engineering (4 years) (H100)

4FT Hon MEng

Engineering (4 years) - (Aerospace and Aerothermal Engineering) (H100)

4FT Hon MEng

Engineering (4 years) - (Electrical and Electronic Engineering) (H100)

4FT Hon MEng

Engineering (4 years) - (Electrical and Information Sciences) (H100)

4FT Hon MEng

Engineering (4 years) - (Energy and the Environment) (H100)

4FT Hon MEng

Engineering (4 years) - (Information and Computer Engineering) (H100)

4FT Hon MEng

Engineering (4 years) - (Instrumentation and Control) (H100)

4FT Hon MEng

Engineering (4 years) - (Management Studies) (H100)

4FT Hon MEng

Engineering (4 years) - (Manufacturing Engineering) (H100)

4FT Hon MEng

Engineering (4 years) - (Mechanical Engineering) (H100)

4FT Hon MEng

Cardiff University Engineering Foundation Year (H101)

4FT Hon BEng

University of Central Lancashire Engineering (H100)

2FT Fdg FdSc

Engineering Business Enterprise (H190)

3FT Hon BSc

University of Cambridge Engineering (4 years) - (Manufacturing Engineering) (H100)

4FT Hon MEng

University of Derby Manufacturing Engineering (top-up) (H700)

1FT Hon BEng

Mechanical and Manufacturing Engineering (HH37)

2FT Fdg FdSc

This is a smalll section of a much more comprehensive chart.

To view the full listings please visit: www.themanufacturer.com/pdf/manufacturing_degrees.pdf

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Training to gain a competitive edge

Power Panels, makers of electrical and electronic assemblies, learnt its lessons from the previous recession and has devoted time and money in skills and training with several measurable benefits. The National Skills Academy for Manufacturing applauds the company for seeing skills as an investment not a cost in a tough economy.

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Some

UK-based manufacturers need to change their mindset about training in the current recession to avoid hindering progress towards a more highly skilled workforce. According to The National Skills Academy for Manufacturing (The Skills Academy), fear and pessimism generated by a deep recession may thwart the Government’s commitment to the UK becoming a world leader in manufacturing. A more strategic approach to training combined with a good understanding of the nature of long term value creation, however, could ensure that the UK is well placed to capitalise on the upturn.

“Manufacturing companies hit hard by the economic crisis could be making a huge mistake by cutting back on training,” warns Bob Gibbon, managing director of The Skills Academy. “In a longer, deeper recession many businesses are forced to make redundancies,

People skills and productivity

Reason to invest

Importantly, The Skills Academy believes there is a reason to actually increase training investment in a recession. Gibbon says: “A recession intensifies competition. International competition, in particular, is increased during a global downturn. Businesses are competing for a market that is contracting globally and the quest for competitive advantage becomes the holy grail of survival.

theory, there is very little “ Indifference between theory

David Fox, Power Panels

“

and practice; in practice the difference is enormous

“Competitive advantage is achieved by understanding the value drivers of a business, such as skills and capabilities. This allows businesses to compete on innovation, performance and value creation. And this means creating strategies that require a greater investment in training whereby these drivers are leveraged to deliver customer and shareholder value.”

To ensure that operational activities, such as training, are aligned with strategy, the more enlightened companies make sure that learning and skills are part of the key performance measures of their business.

Such companies thereby ensure their training strategy creates customer and shareholder value and delivers long term cash-flow.

The Skills Academy is working with research bodies, academics and employers at the forefront of workbased learning to help manufacturers accelerate their competitive advantage through investing in skills.

Through its Learning Engine tool as well as its new webCase Study Power Panels gains the edge through training thereby losing part of their highly skilled workforce.

In addition, companies may also be tempted to save money by reducing investment in training their remaining employees, because they cannot see the immediate benefit,” he explained.

Power Panels Electrical Systems, the 2009 winner of The Skills Academy’s Skills Development Award, has learnt from skills protection failures during the last recession. Subsequent investment in skills has enabled it to increase turnover four-fold, triple profits and achieve unprecedented 99.97% quality levels.

The last two severe recessions, in the early 1980s and in the early 1990s, shed some light on the problems facing manufacturing today. The recession of the early 1980s provides evidence that when employers cut back on their investment in training their workforce, there was a noticeable fall in the number of apprenticeships and other trainees in the manufacturing industry.

However, evidence of only a small drop in training in the recession of the early 1990s shows that lessons were learnt and training had become less vulnerable to economic cycles.

Based in Walsall in the West Midlands, the company designs and manufactures electronic, electrical and electromechanical assemblies and systems for a wide variety of industry sectors including food processing, semiconductor, power generation, printing and medical. In the last eight years it has achieved unprecedented business success through taking a strategic approach to skills development and developing a culture of learning across the business.

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People, skills and productivity

based learning portal, the Academy gives businesses access to the latest systems and processes to ensure that any investment in training delivers measurable improvements in business performance.

To raise industry awareness of the crucial role of skills and learning in helping manufacturers to outperform and out-innovate their global competitors, The Skills Academy has established the new Skills Development Award.

Organised in conjunction with Cranfield University School of Management, the award aims to recognise companies who have built sustained competitive advantage and value creation through investment in training.

Collaborative change

PP Electrical Systems’ story of change began in 1990.

The company had a history of high performance in making control systems for the automotive sector.

But as the recession deepened, work dried up.

Turnaround was achieved after PP Electrical Systems first introduced Japanese manufacturing techniques and later, six sigma processes.

Although these initiatives had a big impact on quality improvement levels and improved business performance, the company was frustrated with its inability to exceed the 98% quality level. Although it considered itself world class at the time, PP aimed higher because it saw quality as a competitive advantage.

Chairman and chief executive David Fox elaborates: “We soon realised that to accelerate performance to the next level we needed to look at attitude, competences and skills; we had gone as far as we could by improving processes.

“In 2000, we set up an in-house training school run by a six sigma black belt trainer. We needed to make it clear that all our people needed to contribute and collaborate to PP’s success.

“Within a year we were seeing a change in behaviour. From being used to working in silos and not challenging things, they were truly working in teams and solving problems collectively through collaboration.

“We developed a training ‘road map’, which aligns our strategic objectives with the competences that we need to get there. It is a structured approach to competency development and takes our people through a number of development levels from the shop floor through to leadership.”

Compulsory training

To maximise real time improvements in the work place, PP Electrical puts a strong focus on the practical application of training to ensure that learning has a return and employees quickly put their new skills to use back in the workplace.

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People, skills and productivity

Training is compulsory at Level 1 and 2 with all employees participating. Beyond that, Level 3 and 4 training (in the form of NVQ Level 3 and 4 B-IT) is optional for those who want to take it further, when they are ready and competent to do so. Essentially this means that anyone who reaches a managerial role, including team leaders and supervisors, are trained to six sigma green belt level.

Panels sees learning “ Power as a strategic decision and believes that it is an investment rather than a cost

“

Rita Davey, The Skills Academy

As well as giving each employee a compulsory 200 hours training per year, the training attains a 40/60 split between classroom theory and practical application.

“I have a favourite quote for this,” says Fox. “In theory, there is very little difference between theory and practice,

The Manufacturer half page AW.indd 1

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in practice the difference is enormous.’ The difference in our training is in how we relate the theory to the practical application of the learning. People are shown how to use the skills they have learnt. Learning in this respect is continuous and ongoing throughout the organisation.”

“The impact of training on the bottom line can be measured in what we have saved on rework and the overtime we have eliminated. Our 99.7% on-time delivery levels relieves the need for buffer stock and helps the customer to reduce their costs. And the tangible improvement in increased employee motivation leads to measurable customer satisfaction improvements.”

Rita Davey, West Midlands regional manager for The Skills Academy, is delighted to be working with a company whose driving force for success is training.

“Power Panels sees learning as a strategic decision and believes that it is an investment rather than a cost.”

“This has brought measurable benefits to the company and significant return on investment. It is highly innovative in how it involves its supply chain in this, training its suppliers to pass on the value of this learning down the supply chain. This is what gives PP the edge.

“Power Panels is an exemplar of organisational learning and its numerous external awards are recognition of this.” end

29/5/09 13:03:31

Employee of the month

Andrew Fielding MBDA Andrew Fielding, 19, is an apprentice for missile developer and manufacturer MBDA in Bolton.

Committed to the training the company provides, he now manages all the young apprentices on site and has designed and delivered electronic design projects that have saved the firm several thousand pounds. He is our Employee of the Month for July.

As

an electronics engineering apprentice in a large missile development firm, I support the manufacturing team across a range of activities, including the completion of drawings, job layouts and worksheets.

Given the developmental and highly confidential nature of many of the projects on which MBDA works, I am often required to modify and update job layouts, together with assisting in the general assembly process.

During my apprenticeship at MBDA, I have undertaken a number of technical processes which were, despite my previous training, largely new to me. The PCB design tool is one such example – this fascinating project required me to design and manufacture an environmental test facility for three electronic circuit boards. Conducting research into all aspects of PCB manufactures, I devised a circuit to measure the boards’ voltages and current outputs. Lastly, I designed the test facility’s wiring, power supplies, and electronic circuitry, and compiled a datapack so that the circuit board and panels could be manufactured effectively. Upon the project’s completion, it was calculated that I had saved MBDA a total of £75,000 of engineering time, coupled with my research into PCB manufactures, which saved a further £5,000.

Due to the project’s success, I was chosen to work on a further assignment, delivering a system that would identify to the user those pieces of equipment in the electronics assembly area that were uncalibrated.

Again, my solution saved the organisation approximately £8,000.

Undertaking an apprenticeship in a prestigious and advanced technical firm such as MBDA represents a considerable signpost in my personal development.

Having started a young apprentice scheme at the firm aged fourteen, I am currently assigned to manage all the young apprentices on site, further developing the management skills which I feel will be crucial to my planned career trajectory.

For example, I won the ‘Best Northwest Aerospace Apprentice Award’, and, as a result, was appointed as the Northwest Aerospace Youth Ambassador.

Similarly, I am a science and engineering representative for MBDA, for whom I deliver workshops on engineering at local schools. I am tremendously passionate about the work I do, and this is reflected in the fact that I received the Gold award in the UK Skills National Electronics Competition.

As a result, I have been successfully entered into the UK Squad and hopefully if chosen will travel to Calgary, Canada to compete in World Skills Calgary 2009.

Given that my colleagues are considered to be the leading young engineers in the UK, I am extremely proud of this achievement, and it simply confirms that it is within the engineering and manufacturing sectors that I wish to continue my career.

CV in brief Andrew Fielding Age: 19 Placements: Feb 2009 – current – Manufacturing Engineering systems project support Oct 2008 – Feb 2009 – producing a pilot calibration recall system at RFID. Aug 2007 – Oct 2008 – Test Engineering Development, working on the Meteor Generic MDI personality card April 2007 – Aug 2007 – production line placement for Sea Wolf Block 2 missile loop.

Education to date: NVQ Level 2 – Performing Engineering Operations BTEC National Certificate

Interests:

Duke of Edinburgh award Air Training Corps – awarded rank of Sargent and staff cadet

Finally, the practical training and experiences that I have received from my time at MBDA are, I feel, positively reflected in many other areas of my work and life. For example, I was appointed to the rank of sergeant and staff cadet in the Air Training Corps, and am also successfully completing my gold Duke of Edinburgh. end

Have your say at www.themanufacturer.com

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IT news IT News Product lifecycle management

Aberdeen Group ranks PTC as top PLM industry performer

Parametric Technology Corporation (PTC) has emerged as top ranked performer within the product lifecycle management (PLM) industry, according to the PLM Solutions Axis for Hardgoods Manufacturers, Q2, 2009, compiled by technology research and consulting firm The Aberdeen Group.

PTC, who provide discrete manufacturers with software and services that help to meet the time-to-market and operational efficiency objectives of product development, achieved the highest scores for both market readiness and value delivered to customers, the report praising its “ability to partner globally and focus on enabling customer processes.”

ERP

SAP reveals its vision of the Future Factory

SAP Research, the global technology research unit of software company SAP AG, has launched the Future Factory Initiative, a collaboration with industry and academic partner organisations to foster R&D for the manufacturing sector.

Based in Dresden, the Future Factory Lab facilitates research, testing, validation, and demonstration of processes in a living laboratory environment. A RealWorld Testbed, showcasing leading edge software, hardware and prototypes, and a centre of excellence, which promotes communication between manufacturing experts, make up the initiative.

By focusing on data and information in real time, to both individual workers and the production line, the Future Factory technologies aim to eliminate human errors and ensure optimal efficiency throughout the manufacturing lifecycle.

SAP says the entire project will enable its customers to reduce costs and maximise effectiveness across a wide range of manufacturing processes, such as logistics, goods receipt, production and picking.

Moreover, the report highlighted the efficiency of PTC’s business processes, its architecture, development strategy and Windchill solutions, coupled with their synergy to other applications in the PTC Product Development System.

Key projects at the Future Factory include: real-world integration of business management systems; adaptive manufacturing software; and innovative user interaction for shop floor workers, foremen, and plant managers.

Rob Gremley, executive vice-president marketing, PTC, said: ‘‘It is rewarding to be recognised for our commitment to deliver maximum value to our customers through superior technology.’’

IBM holds business software conference

Siemens announce launch of latest manufacturing software

Siemens PLM Software simultaneously launched the latest versions of its Teamcentre and Tecnomatix software tools this June, aimed at boosting productivity in global manufacturing.

Teamcentre 8, the world’s most widely used PLM system according to Siemens PLM, aims at driving productivity throughout the product lifecycle, and is used across every sector of manufacturing. Tecnomatix 9, Siemens PLM’s suite of digital manufacturing solutions, is designed to improve planning processes while enabling users to maintain high levels of quality within shorter development cycles.

“In today’s difficult economic climate it is more important than ever for product producing companies to elevate and optimise their overall productivity,’’ said Chuck Grindstaff, executive vice president of products and chief technology officer at Siemens PLM Software.

At IBM’s Rational Software Conference 2009, held in June in Orlando, Florida, the multinational computer technology company announced a raft of new products and services to help organisations more effectively align their business strategies with their investments in software.

New products include IBM Rational Insight, an investment and project management solution to help business leaders measure and manage team performance across an entire organisation, IBM Rational Focus Point for Project Management, and a Measured Capability I m p r o v e m e n t Framework.

‘‘We are constantly trying to squeeze greater levels of efficiency from our manufacturing planning process and Tecnomatix has played a key role in that effort,’’ said Alexander Schmeh, managing director EBZ SysTec GmbH.

The new software thus aims to enable clients to lower costs and IBM’s Rational Insight reduce risks by providing increased visibility of the status of software projects, coupled with the capacity to monitor and improve the performance of these investments. end

http://www.plm.automation.siemens.com/en_us/ products/teamcenter/teamcenter8/index.shtml

http://www-01.ibm.com/software/rational/products/ insight/

Have your say at www.themanufacturer.com

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Enterprise mobility Taking time and space out of the equation

Business is increasingly being carried out by people on the move. Success for many manufacturers is therefore directly related to their ability to do the business of business, wherever and whenever they happen to be. Step up Enterprise Mobility. Chris Pope writes.

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IT in

manufacturing

It’s

often said that the only constant is change and the world of work is undergoing yet another transformation. Just as globalisation forced manufacturers to adopt different working practices and technology to remain competitive, they are now facing a similar period of challenge from mobilisation.

this is especially the case in the current economic and business climate. “You have the paradox where those within manufacturing companies charged with responsibility for reducing costs and delivering efficiency gains are also being encouraged to play it safe for fear of failure.”

Enterprise Mobility (EM) essentially relates to the means by which a manufacturer is able to achieve this ‘anytime, anywhere’ working capability. And the potential benefits touch virtually every area within a business. According to Emil Berthelsen of industry analysts Analysys Mason, “the greatest benefits come from being able to perform the necessary work activities where the work is; i.e. receiving and/ or capturing information at the point of work.” For example, at a production level, the progress of orders across the plant floor including in and out of premises for sub-contracting can be updated in real time providing real time visibility of what is happening and where. The same is true for distribution and stores, where goods in and out can be updated, again in real time and with less paperwork. Mobile sales teams are able to take advantage of increased Customer Relationship Management (CRM) capabilities by having live access to customer profile information to help win orders. If successful, these can be placed in real time, scheduled for production, and the customer given an accurate delivery date there and then. One area showing a particularly strong uptake is Maintenance and Field Service Management (FSM) where jobs can be dispatched to mobile specialists at short notice enabling companies to provide the best possible levels of service.

For Jonathan Orme of Exel Computer Systems, UK author of the EFACS ERP and EAGLE FSM solutions, there is a strong sense of déjà vu in this. Both he and Berthelsen see a comparison with the issues facing manufacturers now, regarding EM, and those regarding ERP fifteen or twenty years earlier. “For many Small to Mid size Enterprise (SME) manufacturers, any consideration of EM is likely to be their first and consequently there are a lot of unknowns out

Unsurprisingly, Paul Westmoreland, Managing Director of Psion Teklogix (UK) Ltd, sees reliability as a key ingredient to any successful EM implementation, especially when looked at from a Return on Investment (ROI) perspective. While acknowledging that cost and affordability of any solution needs to be balanced against reliability and its impact on ROI, he has the following sobering advice for manufacturers. “It’s naïve to think that organisations can carry out reliable and robust EM activities if they do not invest the right amount in the EM solution in the first instance.”

This has more than just a short term effect because success or failure at a first or second attempt at EM will directly influence the decision making over any future investment in this area within an organisation and ultimately whether the company achieves the benefits it needs to remain competitive. Berthelsen adds that

manufacturing companies charged with responsibility for reducing costs and delivering efficiency gains are also Emil Berthelsen, Analysys Mason being encouraged to play it safe for fear of failure

“

Achieving this within an enterprise and then out into the value chain may look simple from an information flow perspective but delivering it is highly complex.

From a technological perspective it involves the company’s back-office systems, typically including an Enterprise Resource Planning (ERP) and/or an FSM system, being able to communicate with an appropriate mobile device complete with appropriate mobile application(s) and vice versa via a network, mobile and/or Wi-Fi. For companies looking to adopt a fully unified communications approach, this would also involve its telephony requirements also. And as with any communication chain, EM can only ever be as strong as its weakest link.

have the paradox “ You where those within

there. The risks are therefore higher than if they were implementing a new ERP system alone as many SMEs are second or third generation ERP users and have acquired the experience, knowledge and expertise about how to get the best from such systems. It is therefore imperative that they develop a relationship with a solutions provider that can offer the experience and expertise they themselves may lack.”

Inherent in this is the need for a company to have a clear idea of what it is happening to achieve through EM and how this integrates into its wider business strategy.

Yet for Berthelsen, this can be a significant barrier for a variety of reasons. “For EM to be successful, technology needs to work hand in hand with business practices which for some manufacturers which will be difficult for them to grapple with. For example, a company that is still locked into an ‘individual silos of information’ mentality may well have problems adapting to the collaborative approach required for EM to truly work.” In a list that looks remarkably similar to reasons why ERP implementations often fail he adds poor system specification, a lack of vision and understanding at a management level, as well as resistance to change at an IT, business management and individual employee level.

He also remarks on the communication gap that exists between IT and business managers.

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“Manufacturers are run by highly skilled business managers enabled and facilitated by technology managed by highly skilled IT managers. The problem is they don’t often talk and when they do, they speak a different language.” Gerard O’Neill from BT Global Services Manufacturing Practice notes something similar concerning the separation of technology and process describing this as the “suboptimising of a business.”

He goes on to say that a key barrier to EM success is where this sub-optimising is taken to such a degree that no-one can take responsibility within the organisation for the project as a whole.

The issue of responsibility is also critical when it comes to dealing with the solutions providers themselves and not just in the unhelpful situation where something goes

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wrong and everyone points the finger at someone else.

Effective EM relies on each product or system fulfilling its own requirements correctly while also interacting successfully with those it connects with. In the world of ERP this is where heated discussions take place along well worn lines about the benefits of a single solution provider versus a best-of-breed approach.

Yet when it comes to EM, the reality is no-one can provide a complete solution hence manufacturers are left having to co-ordinate an often complex supplier ecosystem.

It is here, especially for larger manufacturing organisations, that the managed services approach offers a positive way ahead, which for O’Neill begins with focussing on the communications network itself.

“Manufacturer companies may be full of smart people but when it comes to communication, it is the network that sees everything, that can track everything, that can record everything – whether data or voice, inside or outside the physical structures of the enterprise.”

He continues, “Irrespective of the background business processes, the business strategy that these are designed to fulfil, the workflow which derives from them, it is the network that enables and facilitates the flow of information which makes EM both viable and successful. By focussing on the network and working in partnership with a managed service provider, companies can then determine the hardware and software that will work best in order to deliver the EM reality they need to achieve.”

While acknowledging the role of the network, Orme maintains that for the majority of SMEs, the critical component must ultimately be the back office

systems. “In most parts of the UK and many other business locations worldwide, the reality is that unless you need 100% real-time, mission critical connectivity, the mobile networks are now reliable enough to do the vast majority of things, the vast majority of the time. Choosing the right ERP or FSM system is therefore paramount in how to makes best use of that connectivity by providing the right information to the right person at the right time.”

Looking ahead, Berthelsen sees Mobile Enterprise Applications platforms and the related issues of security as being pivotal to unlocking a wider and more successful uptake in EM. Assuming they are, his predictions for EM in manufacturing include a much greater acceptance and use of Software as a Service (SaaS) with business managers making investment decisions increasingly on a usage cost per person. He also anticipates mobile devices being able to run and switch between a number of different applications.

Calling for entries: Have you shown ROI from a well designed, planned and implemented IT project?

This award will go to the manufacturing company or plant that, in the opinion of the judges, best demonstrates that it has made significant progress in designing, implementing and successfully operating an information technology infrastructure spanning all its business processes, which is able to show returns on the investment it has made in doing so.

All agree Enterprise Mobility is here to stay and that it will be those manufacturers most willing and able to adapt to the application of technology to liberate EM’s many potential benefits that will succeed and be around when the next change arises. end

enter at www.themanufacturer.com/awards

IT in manufacturing award

A communications triumph

O

ne thing the mobile enterprise and the extended enterprise share in common is the need to keep that all important business data moving in a reliable, secure and timely way. Doing this over multiple locations in one country can be a challenge but when like Triumph Motorcycles Limited you have 1000 dealers in 60 countries to keep connected, the scale of that challenge can be immense.

At the heart of the iconic motorcycle brand’s requirements was the need to support the global business and manufacturing systems, optimise performance and offer future flexibility and scalability. Central to this was the ability for each international location to effectively communicate with the centralised core IT systems at the company’s headquarters in Hinckley, UK. When its existing infrastructure began to let the company down, Triumph turned to network solutions specialists Convergence Group for assistance because of its proven track

record in commitment to clients and its 24 x 7 x 365 global support package.

After a series of workshops between Triumph and Convergence Group’s technical and commercial teams, Convergence Group designed and implemented a solution based on connecting the Triumph global locations to a dedicated private data network (MPLS).

The network would provide contractual guarantees and performance parameters that would ensure the business applications that maintain the day-to-day running of Triumph, were consistent, reliable and always available.

The new private Wide Area Network (WAN) delivered dedicated fibre connections to all the international locations from Bangkok to Madrid. This boosted the efficiency of communication for the back office systems that personnel use and ensured reliability of the manufacturing systems and processes that are responsible for all the motorcycles manufacturing practices.

Implementing the new infrastructure globally was the next challenge and involved the management of multi-lingual suppliers across a number of different time zones, as Neal Harrison, Convergence Group’s Commercial Director explains. “In Triumph’s case, equipment had to be ordered from UK vendors and configured by our engineers before being relocated to numerous locations across the world. Our engineering team then personally travelled to all locations to install, commission and test each system, liaising directly with Triumph personnel in each country.”

The result is a superior and more reliable network infrastructure that delivers substantial costs savings, whilst at the same time enhancing performance, consistency and reliability. Triumph is also now utilising spare capacity on the network to enhance its video conferencing facility to Thailand, Japan, America and its European Subsidiaries. This new application reduces air travel and carbon footprint, as well as improving communication between offices.

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Fastening

its future TM discovers how Stainless Steel Fasteners have improved connectivity and visibility with Exel EFACS E/8

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Stainless

Steel Fasteners (SSF) is worldwide market leader in the field of special fastener manufacturing with a unique blend of traditional manufacturing machinery and the very latest CNC and computer technology. With a heritage spanning over 40 years, the ÂŁ9m turnover company employs 82 skilled personnel and supplies high integrity, high quality products and services primarily to the oil, gas and associated industries. When SSF needed to replace its ageing disconnected business systems, it knew it needed a fully integrated solution and a supplier that was totally dependable. It found the exact fit in EFACS E/8 from Exel Computer Systems.

IT in

IT in manufacturing

In addition to exacting quality standards, flexibility lies at the heart of success for SSF. A 100% make-toorder (MTO) manufacturer, SSF has a potential range of product permutations in excess of 20 million, taking diameter, length, materials and finishes into account.

Orders extend from one-offs through to batches of 10,000 with multiple call-offs, with a number of products being able to be manufactured in a variety of ways depending on urgency and cost. Typical lead

essential that we maintain “ It isexcellent customer relations

Stephen Wilkinson, SSF

“

by delivering product and service of the highest quality

times for the 20 orders processed on average each day are two to three weeks although this can be as low as 24 hours for extremely urgent orders that can physically be manufactured in this time.

Focusing on the customer

In terms of business flow, much of the value-add is done before the order is dispatched to the production floor and its collection of 50+ production resources with subcontracting possible at any stage of the process depending on the nature of the product.

Stephen Wilkinson, managing director of SSF, has been with the company for 26 years and explains the key business challenges his company has to deal with. “Let’s begin with the customer, as ultimately everything revolves around the customer and their requirements. It is essential that we maintain excellent customer relations by delivering product and service of the highest quality.” He adds “Because our customers may make annual purchases, it is also paramount that we keep just the right balance between continually being in our customer’s mind for when it comes to them making a purchase and not being a nuisance. This is especially the case where specific customers require very exotic materials which may have long lead times that we might need to pre-order.”

with the need to process orders and have them on the shop floor as quickly as possible in order to meet the tight lead times that are involved. Visibility is also a major challenge and not just as expected on the shop floor as Wilkinson explains. “Having access to historical information, at a customer, order and stock level, is important to be able to make the best strategic and tactical decisions.” He continues, “By having a historical record of who tends to buy what, and when, we can time our buying to take advantage of particularly favourable conditions.”

As mentioned, flexibility is central to successfully making those all important delivery dates which is why SSF has a wide range of what Wilkinson refers to as “flexible routes of product realisation.” Quite often however, this is highly specialised information known only to key personnel in the company who can then make the decision as to which production route to use and in what circumstances. It is imperative that resources are utilised efficiently although as Wilkinson adds, “always with a strong sense of the cost/benefit involved.” Finally, traceability is essential with different products requiring different degrees of testing in order to conform to customer requirements.

Prior to investing in EFACS E/8, SSF had relied on an ageing Sage Line 100 system, a separate Customer Relationship Management (CRM) program, and a range of spreadsheets for production control. Despite various Visual Basic (VB) tie-ins, there was no sense of integration with data duplication being rife, along with the potential for data variance in each system. In terms of stock control, the system at best was able to keep limited stock availability information but even here, the information was difficult to get to. Data issues hit the critical area of CRM hard with typing mistakes leading to several entries for the same customer with vital buying information spread across different records, all of which could be potentially missed or which took significant time to double check. In addition to looming obsolescence of its Sage system, it was

Another key challenge is the need for absolute accuracy at every stage of the business, especially at the early order processing stage. A single typing error may render an entire order unusable which can not only be costly given the nature of materials used, but also result in a customer not getting their order as expected. This is held in tension

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the quality of its product and service, SSF therefore bought two EFACS E/8 licences and began a high level mapping of the company’s business processes with EFACS’ capabilities. Wilkinson brought in key personnel within the company to add their expert insight into what EFACS E/8 would need to do in order to replicate their existing processes.

A fundamental issue for SSF was the need to quickly and accurately allocate product numbers from the 20 million possible permutations. The only viable method was to do this dynamically but as a skilled operator might take half a day to do this manually for 10 items, this was clearly an area that could be improved on.

The solution lay in Wilkinson and team spending 9 months distilling their expert knowledge into an in-house configuration program which now enables a skilled operator to generate a part number in twenty seconds by answering 8 questions with 9 mouse clicks. As Wilkinson is quick to acknowledge, it is the technological infrastructure of EFACS E/8 that makes linking this data very straightforward.

becoming increasingly clear that the company’s all important flexibility was being compromised by rigid and complex systems which were heavily reliant on the expert knowledge of its users to get meaningful information out.

Quality a priority

As two companies within the group were already successfully using EFACS E/8, Wilkinson and SSF naturally were drawn to this. Given the company’s commitment to allow nothing to negatively impact on

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Once this was in place, the company invested another year testing and developing every aspect of its EFACS E/8 system. An intense month of testing in December 07 including parallel running with Sage proved the viability of the system and following final data imports, SSF went live with EFACS E/8, as planned, in January 2008.

Most importantly for SSF, there was no impact on its existing business and by the end of the first day there was no backlog of work on the system at all. Matthew Tongue is SSF’s resource manager and he comments on where the benefits were felt first in the company.

“From the outset we found all the material control data to be totally accurate and providing the variable route flexibility we needed in order to deliver the quality and flexibility required by our customers.”

IT in manufacturing

Other benefits however were gradual and reflect the reality of change within any company, as Wilkinson explains. “Purchasing took approximately 6 months of using and trusting the system before they began to see additional ways that EFACS E/8 could help them do their job better. This was largely as the system gradually accumulated historic data which could then be easily accessed and mined to provide genuine business intelligence benefits.” It is estimated that EFACS E/8 has on the whole led to increased efficiency resulting in an increased focus on purchasing strategy.

The same was true concerning the company’s customer focus with the integrated CRM capabilities of EFACS E/8 having proved to be one of the most significant areas of benefit. Now the Sales team is able to monitor and analyse to great depths, all the company’s customer facing activity. This has brought visibility on buying patterns and trends and allowed much more strategic purchasing as well as ensuring that the company is best placed to meet the demands of its customers. This is especially the case when responding to customer queries concerning existing orders where Wilkinson says there has been a spectacular 90% reduction in time taken to be able to get the customer the information he or she wants.

By incorporating the expert knowledge previously held in different individuals throughout the company within

EFACS E/8, SSF is now able to train replacement and additional staff much, much quicker. Tongue remarks that whereas previously it could take six months for a new employee to be proficient in knowing the complexities of how the company works, now with EFACS E/8 they can make a valid contribution within a very short timescale.

the outset we found all the “ From material control data to be totally accurate and providing the variable route flexibility we needed in order to deliver the quality and flexibility required by our customers

“

Streamlined for success

Matthew Tongue, SSF

Looking to the future Wilkinson and Tongue see further benefits to be had from a deeper use of EFACS’ existing functionality, especially in the area of CRM. Machine timings and routings may well be added into wider MRP/ERP considerations in addition to further streamlining of Export documentation where EFACS E/8 has already saved one week per month. end

Increase your organisation’s agility by going mobile M

anufacturers are constantly seeking cost reductions through economies of scale as well as advances in materials and methods and, increasingly, information systems.

As Netbooks become even smaller and lighter and phones have more computing power onboard than Apollo 11, the key question is “just what are we trying to achieve with mobile technologies?”. We need to be clear about where technology can add real business value – not just as another toy to play with or, as so often with e-mail, another means of flooding individuals with unnecessary information.

We need to re-think how users want to receive information and process transactions. Simplifying processes has advantages across the business, not just for mobile users, and helps optimise performance and response times.

The advantages for mobile sales teams, field service engineers and distribution and warehouse staff have been extensively debated and documented, but the potential to generate real business advantage doesn’t stop there. On-site specification checking, product configuration and order placement whilst with customers; collaborative design and engineering with dispersed teams, all have a part to play.

Cost reduction and quality improvements are obvious benefits when real time issue / problem logging and updates from the shop floor involve mobile users to ensure swift resolution and minimise disruption to production.

to create USPs in service and customer satisfaction by reacting smarter and faster than the competition.

At Sage, mobile is a huge focus for us.

If you’re interested in building your competitive advantage with Sage Mobile Solutions then give us a call to find out what we’re doing and how we can help.

Published in association with: Sage (UK) Ltd

Mobile technologies can be a major step towards creating more agile and competitive businesses.

Successful manufacturers are already utilising mobile technology to help address real business needs and opportunities and

Tel:

Steve Tattum Product Manager 0845 111 9988

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Pioneering change Is the impetus for business change stronger than ever?

Gary Turner, product marketing director for Microsoft Dynamics, explains how manufacturers can lead the way in times of change and uncertainty

The

meaning of the word ‘change’ has gone through something of a transformation over the past two years. Until relatively recently, it had been parked firmly in the lexicon of ‘management consultancy speak’, derided by many in the small and medium-sized business community because it was so frequently used as empty rhetoric.

As we have seen during the first six months of 2009, however, the impetus for business change is stronger than ever. For organisations around the world, the collapse of the global financial system, a major recession and increasingly disruptive technologies make change a fact of life.

Of course, manufacturing has gone through its fair share of changes over recent decades. The sector is arguably more flexible and open to change than sectors such as professional services that have done very well in recent years, without the economic and business pressures that have sent domestic manufacturing into decline.

That’s not to say that manufacturers are always ahead of the game, but as a recent Microsoft Dynamics survey and whitepaper shows, even very small technology-enabled changes can have a very positive business impact on even the most risk-averse and traditional organisations.

As we have found, even seemingly negative change – a need to reduce staffing levels, for example – allows imaginative and positive businesspeople to re-shape and re-invigorate their companies. Our research shows that those businesses able to stimulate change internally – rather than simply react to external forces – are likely to be more successful.

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IT in

manufacturing

Change in manufacturing

Mid-market manufacturers have had to get used to massive change over the past 30 years. The most noticeable trend has been for less skilled labour to move to the Far East, with the UK retaining more highlyskilled posts.

Yet despite the rapid erosion of the manufacturing base in the 1970s and 1980s, the sector is still highly vulnerable to external change. Manufacturers have also seen technological advances in planning and production; new markets for environmental, IT and communication products; and, of course, a massive impact from the recession.

According to a report by the Engineering Employers Federation, 140,000 skilled manufacturing jobs could be lost in the UK during the downturn. Smaller and mid-sized manufacturers may be badly hit, although it is the largest, least flexible companies that appear to be taking the brunt, with orders falling to their lowest levels since 1990.

The negative statistics are seemingly endless and it is very easy to get carried away by the doom and gloom. But the latest commentaries and surveys seem to highlight critical requirements for manufacturing businesses looking to ensure their future and come out of the recession in great shape to capitalise. Two of these requirements are flexibility and visibility.

Businesses that are able to flex their approach to suit external change will be better placed to thrive, whatever the circumstances. For example, many manufacturers are looking to bring production closer to home to avoid both the working capital impact and excessive leadtimes of Far East production – and reduce their exposure to fluctuations against the dollar.

Bigger manufacturers are more likely to find this flexibility hard to achieve. Some car makers and other large firms have sought to reduce workers’ hours in an attempt to cut costs. But it is in the smaller and mid-market firms that true flexibility – of markets, products and processes – is most attainable.

Exploiting that flexibility is another matter. Manufacturers able to forecast orders (and their own financial position) accurately will be best placed to make the right changes internally to adapt to external forces. Only by having true transparency – into areas such as input costs, efficiency, margins, currency exposure and so on – can SMEs make sure their size delivers a competitive advantage.

Companies with the capabilities to react quickly to external change and to drive internal change rapidly ahead of domestic and global competition can and will define the UK’s manufacturing base for years to come.

Change pioneers

So how prevalent is a culture of change in UK manufacturing companies? Well, quite far according to a recent survey of 500 businesses by Microsoft Dynamics.

We asked directors of organisations from a variety of sectors about their attitudes to change, strategy when implementing change programmes and champions of change in their businesses. Of all respondents, 37% were what we term ‘change pioneers’ – those companies that are ahead of the change curve and push change from inside the business, regardless of external pressure.

Among respondents in manufacturing, the proportion of Pioneers rises to 43%, the highest of all sectors. As a result, 85% of manufacturing companies – again, more than any other sector – claim to actively promote operational change within their organisations.

Looking at the type of change they have experienced, it’s clear that smart manufacturers have been addressing both their cost base and seeking new opportunities for sales:

1

2 3 4

New product development 57% (highest of all the sectors) Technology infrastructure 51%

Marketing 48%

Business systems and processes 47%

The Microsoft Dynamics survey shows that the UK’s small and mid-sized manufacturers are being proactively managed through these difficult times, whether it’s in developing new products, streamlining processes or improving customer service.

research shows that those “ Our businesses able to stimulate change internally – rather than simply react to external forces – are likely to be more successful

“

As Andrew Birch, IT director at I’Anson Brothers – a 100year old feed manufacturer – told Microsoft, “Our business was very risk averse and change was not something that I’Ansons was used to. We started by implementing a new financial and accounting system and it is amazing the cultural impact the technology has had on our business... we are now complete change zealots.”

One of the manufacturers interviewed for the research, I’Anson Brothers, has turned its 100-year-old business into a change-focused organisation to ensure business continuity.

Technology is a key enabler of change, and once businesses successfully deploy technology that helps them gain visibility of their internal processes and financial health there is often a knock-on effect, where technologydriven change permeates through the business culture.

As I’Anson Brothers has shown, small improvements to systems and processes can have large positive knock-on effects.

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A new IT system, based on Microsoft Dynamics AX, allowed I’Ansons to remove manual processes, reduce headcount and gave the board more insight into their business operations than ever before. “We are rolling out software and looking to start projects that will change all parts of our business: we now want to procure raw materials more efficiently; need to improve our website and information access; analyse factory

technology can facilitate “ Clearly, change in a business, delivering

and machine performance; reengineer our supply chain; and move to using analytics and key performance indicators so we can manage by exception,” Birch says.

Another example of a ‘change pioneer’ is Allgood – a manufacturer of bespoke ironmongery for clients including Mercedes, London 2012 and Heathrow Terminal 5. For Allgood, it’s all about providing the best in quality, but justifying the associated cost to customers is no longer predicated on quality of product alone.

As Allgood’s head of IT Jan Dragosz told Microsoft: “We offer the highest quality in workmanship, but that makes us expensive compared to other lower-quality suppliers.

In the current climate we justify that expense through our workmanship, but also by demonstrating to customers that we can change and respond to their needs quickly.”

Allgood needed to change the way they worked internally to allow them to respond more quickly to customer needs and shorten order turnaround times. The only trouble was that their technology was part of the problem.

“Our inventory system, customer management, and quotation systems didn’t interoperate,” says MD Peter Hill. “Gaps in the flow of sales, purchasing, inventory, and contract data forced people to re-enter data and chase information to deal with issues after they occurred.” Employees had developed a complex web of workarounds and localised solutions to supply chain issues.

Using Microsoft Dynamics AX, Dragosz was able to pull all of these processes together on one platform. “Because the

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Allgood are now rolling out change programmes with their suppliers and partners to manage stock and shorten lead times.

Change and technology

“

a flexible platform that helps decision-makers understand what their options are

system is adaptable, we can liberate people from unproductive labour,” he says. “Purchasing spends less time sorting out problems and more time securing better discounts. Contract management teams aren’t doing data entry; now they are liaising with our clients.”

Have your say at www.themanufacturer.com

Clearly, technology can facilitate change in a business, delivering a flexible platform that helps decision-makers understand what their options are, how their actions will affect their company and helping them commit to those actions quickly.

A strong technology platform is therefore a prerequisite of change. According to the Microsoft Dynamics survey, 51% of directors claim that their finance, inventory, HR and management IT systems are all integrated, yet the figure is just 42% for the group identified as ‘change followers’. There is a direct correlation between smart use of technology and both willingness and ability to effect change.

In manufacturing, Microsoft Dynamics provides an integrated suite of applications that give companies the tools to plan, manage, and execute operations and manage the entire manufacturing process from product configuration, supply and capacity requirements planning, to scheduling and shop floor.

Companies with the capabilities to react quickly to external change and drive internal change rapidly ahead of domestic and global competition will define the UK’s manufacturing base for years to come. Flexible and responsive businesses will also be able to do so without compromising their business models or margins.

As manufacturers like Allgood and I’Anson Brothers have found, a robust, yet flexible software platform can improve agility, promote innovation and instil a culture of change throughout an organisation. end

The complete Microsoft Dynamics Change whitepapers are available from: http://www.microsoft.com/uk/dynamics/change/ default.mspx

£208m up in smoke for UK manufacturers every year As manufacturers increasingly look to cut costs and increase productivity during the economic downturn, they should be aware of the substantial costs of poor employee health.

I

mplementing workplace health initiatives makes business sense and there is free support available from the local NHS Stop Smoking Services for those organisations who want to improve their employee wellbeing and boost their bottom line.

In the first ever study of the detailed impact of smoking on UK business, the London School of Economics has estimated that smoking directly costs manufacturers £208.2 million per annum. These costs are dominated by illness absences for smokers (estimated at 1.77 excess sickness days or £108.6 million) and by smokers taking work-breaks to smoke (taken as £99.6 million per annum).

These new findings provide a compelling business case for the implementation of stop smoking programmes for employees.

Drew Collins is a local NHS Stop Smoking Service adviser in Bournemouth and Poole.

He has worked with organisations such as Proctor and Gamble and J P Morgan on their stop smoking programmes, and urges more businesses to make use of free support offered by local NHS Stop Smoking Services to help employees quit.

Drew Collins says: “There is a strong commercial and ethical case for

employers to help their employees quit smoking. Our local NHS Stop Smoking Service advisers have already worked successfully with many manufacturers across England, and we take a very flexible and tailored approach towards working with organisations. We will always develop a programme that suits their needs, and we can offer one-to-one or group support sessions held in the workplace or at a convenient site in the local community.”

“I would encourage employers to get in touch with their local NHS Stop Smoking Service and see what support their employees can get. They will be up to four times more likely to stop smoking successfully if they use NHS support”

Stop smoking support in action Airbus has been working with its local NHS Stop Smoking Service to provide its employees with stop smoking support.

Lucy Tully, Occupational Health Nurse at Airbus, said: “Our occupational health team worked alongside local NHS Stop Smoking Services to learn how to run successful quit sessions. They understood the complexities of our business and were able to help us develop a customised programme to suit the varied needs of our employees.

How much is smoking costing your organisation?

Smoking costs UK manufacturers £208.2 million per year.

This is largely made up of excess smoking related sickness days (£108.6 million) and smokers taking work-breaks £99.6 million).

Free Help Available Trained NHS stop smoking advisers can offer free group or one-to-one stop smoking sessions within a company workplace, or at convenient sites in the local community. Advisers can also attend company staff health events, or run introductory sessions to assess staff interest, if that better suits business work patterns. In addition, they can train a company’s HR or occupational health team to deliver stop smoking advice.

Smoking impacts on your bottom line.

Call 0800 731 5977 for information on how NHS support can help your employees to stop smoking.

“For instance, with so many of our employees working in complex shift patterns, we had to adapt our stop smoking programmes to suit. Therefore, we now run sessions at night so all of our workers can access support. We try to make quitting as easy as it can be for our employees.”

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Sustainable distribution options

Steve Wilson, vice president of supply chain and logistics at Capgemini explains that if you make your supply chain sustainable, it may just return the favour and do the same for you.

The

global economic downturn presents more challenges for the supply chain function than ever before, as supply chain managers strive to comply with unprecedented cost pressures. However, a striking conclusion from Capgemini’s Supply Chain Agenda 2009 report was that sustainability both populated the agendas before (32%) and after the beginning of the financial crisis (30%). In many projects both sustainability and logistics costs reduction were achieved, which most likely explains why companies keep on putting effort in it.

Changing consumer behaviour and increased information availability is adding to the pressure on businesses to improve the sustainability of their supply chains, and now more than ever there is a need to adapt and update

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old models to shape up for the changes required if the current manufacturing value chain is to remain viable.

This can be achieved through various measures such as information sharing, collaborative warehousing and distribution, and transport optimisation.

One of the key ways to ensure efficiency across the supply chain is by sharing inventory and sales information from retailer to supplier. This helps to improve product availability whilst requiring less inventory.

Capgemini analysis has shown that in addition to the benefit of lower working capital, reducing inventory also saves direct cost as warehouse space; stock management and stock obsolescence are all simultaneously reduced.

Supplychain and logistcs

companies in that region, collaboration has become more prevalent. The overall benefit to both companies is not just present in the form of a reduction in operating cost, but also in the environmental and reputational advantages.

Another significant development in the development of an eco-friendly supply chain are the “green warehouses”, which are continuing to be built, with a focus on reducing energy demand through modern warehouse design and generating renewable energy through solar panels and / or wind turbines. A recent example of using wind power to make a distribution site ‘energy neutral’ is Nike’s 9MW generating capability at its main European distribution centre in Belgium. Nike implemented six wind turbines, each 1.5MW capacity around the periphery of their 57 hectare site. Nike selected lattice towers rather than cylindrical towers as this uses less steel and allowed taller towers (111m to hub) and larger turbine blades (39m long), thereby increasing generating capacity per tower.

For many, sustainable distribution is all about doing what would have previously been called ‘lean logistics’ – the difference is doing it well. The concept of Lean is fundamentally centred on taking out non-valueadded effort, with the “value” being what the customer values about the product or service. The unnecessary activity that lean aims to remove consumes effort and energy and removing it achieves the double benefit of reducing cost and improving the sustainability of the whole operation.

Increasingly though, our clients see taking out cost in conjunction with taking out carbon. Carbon costs money – taking it out reduces waste and saves not just the environment but also hard cash. An example of this is the increased usage of double decked vehicles for dedicated fleets in the UK as they become refreshed.

Tesco and Asda are among several UK retailers that have invested in double-deck vehicles to reduce cost

double-deck vehicles give “Typically 70% more carrying capacity for

In these challenging economic times it is enlightening to see companies looking beyond their immediate spans of control to find operating cost savings. An example of this in the transport arena is the collaborative transport arrangements that Boots the Chemist and TK Maxx have put in place. In specific regions where it makes sufficient economic sense to justify the additional complexity involved in dovetailing the deliveries of both

limited cost. When looked at over the operating life of the asset, it is not a surprise to see increasing numbers of these vehicles on the roads as companies renew their fleet

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Nokia and O2 are among the leaders in this exchange of information to ensure that availability performance on mobile phone handsets can be maintained at high levels without the need to build large stocks of inventory. This “collaboration” model is becoming increasingly common and will be essential in managing down overall working capital, particularly for electronic products where product value is high and lifecycles are short. Managing the information flow across the whole supply chain requires closer integration – particularly in the planning processes of manufacturers.

and carbon. Typically double-deck vehicles give 70% more carrying capacity for limited cost. When looked at over the operating life of the asset, it is not a surprise to see increasing numbers of these vehicles on the roads as companies renew their fleet. Other major users of transport, such as Marks and Spencer, are investing in aerodynamically profiled articulated trailers which are 10% more fuel efficient and have up to 9% more carrying capacity than standard vehicles.

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By increasing average vehicle fill in this way, businesses can drive significant cost savings and reduce transport miles. For example, Asda have a sustained focused on this area and have increased average vehicle fill by more that 25% over levels achieved 4 years ago.

sustainable distribution is “ Forall many, about doing what would have

“

previously been called ‘lean logistics’ – the difference is doing it well… The unnecessary activity that lean aims to remove consumes effort and energy and removing it achieves the double benefit of reducing cost and improving the sustainability of the whole operation

Other companies, particularly retailers, have been increasing the sustainability of their distribution by reducing the use of “one trip” transit packaging.

For some, this is a transition from cardboard “onetrip” cartons to reusable plastic totes and wheeled merchandise units. Others, such as B&Q, have extended the concept to the delivery of kitchen

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worktops as these are high value, easily damaged large and previously had been packaged in cardboard which was then thrown away as waste after the delivery. B&Q are now using reusable plastic packaging, generating the economic benefit of reduced packaging and also less scrapping of damaged worktops, with the damage rate falling from around 6% to less than 1%. The sustainability benefits include less transit cardboard waste and all of the additional benefit of avoiding the need to produce and distribute new worktops to replace those damaged in transit.

Continuing this quest for green transportation options, there is growing interest in the use of electric vans for their sustainability and economic benefits – both in the sub 3.5 tonne and 9 tonne categories. The area where electric vans seem to be getting the most traction is in the urban delivery with DHL, UPS and Royal Mail undertaking trials for parcel delivery and the major food retailers including Marks and Spencer, Tesco and Sainsbury’s all trying out electric vans for their short route deliveries.

So in the unprecedented environment we live in today, where many organisations have tried all the traditional levers with some short term gain, leading organisations are applying sustainable and lean principles diligently to their warehouse and transport operations whilst also keeping an eye on the long term strategic network configuration. As such, sustainable distribution represents a new leaner horizon. end

Supplychain and logistcs

Digging for

green gold

Andy Smith, senior consultant with Davies & Robson, outlines sustainable delivery options for manufacturers

The

UK government’s Sustainable Distribution Strategy document emphasises the need to define sustainability in environmental, economic and social terms. Central to this `triple bottom-line`approach are the trade-offs that have to be made between preservation of the environment, prosperity and the quality of life.

In some cases however, so-called ‘green-gold’ measures will yield both environmental and economic benefits without the need for cost benefit trade-offs.

A potentially rich seam of ‘green gold’ is often to be found in the area of delivery vehicle utilisation.

At a time when cost reduction is so important, many businesses are focussing their efforts on their core activities and often overlook the opportunities to save cost in their transport fleet operations. Putting a few measures and disciplines in place can quickly allow a company’s distribution function to make its contribution to savings and even survival.

Distribution activities can quickly become sub optimal especially when business profiles alter and distribution patterns change; a feature being experienced currently by many manufacturers. Taking every opportunity to maximise vehicle utilisation will reduce costs and continue to make a contribution to environmental improvements.

Listed below are a few key items companies should ensure are considered and put in place to ensure delivery fleet utilisation is maximised and the asset is ‘sweated’.

1

A good starting point is always to measure current transport utilisation as part of your transport KPIs.

Important measures are empty miles, vehicle fill, time usage, drops per route and routes per day.

These tell you where you are starting from and allow improvement targets to be set. Make these visible, so staff can see performance and achievement towards targets.

2

Consider the use of own fleet versus alternatives such as subcontractors for one way journeys;

or pallet networks to make those small deliveries to outlying areas; or even outsourcing the whole operation. Getting the balance right between own fleet levels and the use of contractors will make a difference. Over many projects, Davies & Robson has experienced a wide range of savings that have been achieved, and many factors will determine the level of these. In recent examples, the company has been able to identify savings up to 15% in overall cost.

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Is your business using the best size vehicle for its delivery profile

3

Consider the specification of vehicles in light of current and future delivery profiles.

If drop sizes are getting smaller then a vehicle route will become more time constrained and smaller vehicles may become an option. Corollary, if drop sizes increase (perhaps through order taking policies or customer/ product profile changes) then higher capacity vehicles become more appropriate to maximise utilisation of route times.

a few measures and disciplines “inPutting place can quickly allow a company’s

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“

distribution function to make its contribution to savings and even survival

The operation of delivery vehicles can often be improved by considering the following:

a. Look to increase the drop density of customer deliveries by: Nominated day delivery schedules. This will allow a greater clustering of drops.

Longer distribution lead times will have the same effect, if this can be made available within the overall order fulfilment lead time.

Reducing any delivery time window restrictions for delivery. This could include the approach to booking deliveries with the customer or exploring out of hours deliveries.

Be careful regarding fixed routes unless customer orders are consistent. You can often find a fixed route is optimised on certain days of the week but sub-optimal for the other days.

b. Attempt to increase drop sizes or at least hold any slide towards smaller drop sizes by: Consider minimum order or drop size accepted.

Small drops may lend themselves to network or even parcel network deliveries.

Look at product pricing structures to reflect the distribution activity required to fulfil the delivery, such as premiums for smaller drops. Customer profitability should always take into account the full cost of logistics fulfilment.

c. Work with customers to reduce delivery problems such as: Is the drop time excessive and can it be reduced?

What can be done to speed up unloading and reduce any waiting time? Examples may include a pre-delivery advance warning call, ways to reduce access restrictions or the availability of equipment. Reducing this time may allow more drops on a route.

Are there any vehicle access restrictions that are no longer relevant or could be challenged?

Calling for entries from companies embracing supply chain integration as a whole business process.

This will be awarded to the manufacturing company or site that, in the opinion of the judges, is making measurable progress towards realising a fully integrated network of supply chain partners that demonstrably reduce costs and increase efficiencies.

The judges will look for an integrated supply chain strategy that embraces the whole business process from raw materials or component procurement to customer delivery.

drop sizes are getting “ Ifsmaller then a vehicle

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route will become more time constrained and smaller vehicles may become an option

5

Larger fleets, generally over 10-15 vehicles, can sometimes benefit from computerised routing and scheduling systems.

These systems when properly calibrated can reduce the time and distance of planned routes through optimal sequencing of deliveries. They can be particularly useful where a number of orders come to the planning process with later and later cut off times; and a manual planning exercise struggles to fully re-plan effectively before release to picking and load assembly processes.

6

It is important to monitor driver performance.

7

Work with suppliers to collect inbound raw materials and packaging.

Do drivers keep to scheduled routes and do they maintain planned delivery times? Some businesses utilise vehicle tracking systems to provide this information in ‘real/near time’ and for use in debriefing and planning.

The data can also be used to identify trends in delivery problems that need to be addressed.

Where suppliers are located within close proximity to customer delivery points it may be cost effective to negotiate factory gate prices and collect with your own fleet. An important consideration will always be the cost and service impact on your own fleet availability and customer deliveries. Many businesses do undertake this activity and achieve a clear net benefit. However, it is also an issue for manufacturers

enter at www.themanufacturer.com/awards

Supply chain and logistics award

where customers, particularly in the retail sector, are looking to exploit this opportunity; clearly having an impact upon your own fleet capacity.

8

Businesses with other operational sites or sister companies should look to maximise opportunities to integrate movements

allowing, for example, triangulation of routes, shared deliveries, combined routes and sharing of resources.

This often requires some co-ordinating action by senior management to get teams to co-operate and work together. Many businesses through the current recession are increasingly working to exploit these opportunities. Some are finding that, as a previously unexplored area, there are some initial easy ‘quick wins’, such as return load opportunities and vehicle sharing.

Sustainability refers to the ability of a process to be continued indefinitely without damaging or degrading the environment on which it depends. Keeping track of fleet utilisation and ensuring that it is aligned with current business profiles is one of the ways in which this can be achieved.

And, as luck would have it in the current economic climate, a more sustainable distribution operation will not only help save the planet but might just do the same for your business. end Davies & Robson specialises in all aspects of supply chain management, working with domestic and international businesses across a range of industry sectors.

Have your say at www.themanufacturer.com

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The benefits of

asset tracking

As manufacturers continue to move towards developing global supply chains, they increasingly need to be able to efficiently track all their resources. Effective asset tracking does not merely improve supply chain management, nor is it simply about avoiding inconvenience it also increases productivity, profitability and ultimately a manufacturer’s competitiveness. TM Talks RFID with Zebra Technologies.

What is RFID?

In order for a manufacturer to understand how RFID and bar code technologies could help them improve their business, it is first necessary to understand how the two products differ and which is more suited to an individual company’s needs. RFID stands for radio frequency identification, which is an automatic identification technology that relies on the transmission through radio waves of digital data embedded into tags. It is similar to bar code technology in that it relies on the data that has been embedded into these tags, or “smart labels”, but it uses radio waves to transmit this data instead of optical scans of labels. RFID therefore requires neither the tag nor the label to be actually in view for the information to be read.

RFID vs bar coding

As concepts, bar coding and RFID are quite similar. They are designed to offer swift and reliable asset identification and tracking capabilities which can be used across a wide

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range of industries. However, due to the comparatively low cost of bar code labels, the development of RFID has so far been slow to pick up. Despite developments in technology that have resulted in more cost-effective production of RFID systems, this has not led to a change in this situation. This is because bar codes and RFID technologies are not designed to be mutually exclusive, nor will one replace the other. They are both enabling technologies with different physical attributes. Bar codes utilize one-way, serialized, and periodic data. RFID utilizes two-way, parallel, and real-time data. They are thus geared to different functions and their use will be entirely dependent on the needs of the company.

Crucially, it is important for companies who are looking into developing these technologies to understand that RFID is supplementary to bar codes. Effective systems should be established using bar codes before the move to RFID takes place. RFID is an enabling technology and in order to extract all the benefits of this technology, fundamental business changes, system changes,

Operations and maintenance

and data changes need to take place first. With early adopters, there is evidence that this technology has, however, led to significant improvements in day-to-day business operations.

The benefits to manufacturers

RFID and barcode technology can assist manufacturers in gathering and managing asset information on both a local and a global scale. These technologies can record not only the movements of assets but also provide real-time data on the assets themselves. With wireless transmission of real-time data, the need for costly human intervention is limited.

Basically, RFID should be deployed just like any other technology—when the benefits justify the cost and effort involved in implementing it.

However, companies will need to explore the various benefits of these technologies on a case-by-case basis as RFID cannot provide a one-size-fits-all solution.

There is therefore a need to establish a robust business case for implementing this technology. Nevertheless, it is clear that automated reporting of real-time, accurate data can provide huge advantages across a wide range of industries.

“Having the ability to swiftly process large amounts of data at long ranges across a big group of items is obviously a massive benefit to manufacturers who are usually dealing with huge quantities of products”, says Richard Powlesland, custom applications and product manager for ard at Zebra Technologies.

According to Powlesland, the type of data that can be embedded in smart labels is almost limitless. “Life cycle information, date of production, manufacturer information, delivery information, batch information – all of these are the kind of data you can include on these tags.”

The ability to be able to immediately capture this level of detail is particularly significant for larger manufacturers, who can at any one time be managing tens of thousands of items. Managing this process becomes infinitely complex when one minor mistake can delay an entire manufacturing process, thus delaying the delivery of a product and ultimately resulting in a loss of productivity. Powlesland cites the example of global car manufacturers, which waste over millions of dollars each year simply trying to locate and manage inventory within their supply chains.

Tags, readers, and smart labels

It is, of course, much more effective to ensure asset availability by carefully managing information. However, this relies on a consistent approach to data management which is ultimately vulnerable to human error. Companies lose millions of pounds every year in time spent by employees physically tracking down assets.

Manufacturers need to truly understand the various technologies available to them before investing in a system, thereby ensuring that the correct systems and infrastructure are in place before this investment is made.

Process automation is not, therefore, simply about reducing the amount of manual labour or intervention.

Product identification as it goes through the entire trail is very important - it means manufacturers can determine how many parts they need, resulting in less upfront costs and better cash flow management, and fewer parts sitting around taking up plant space. If this identification is done effectively on an automated scale, the potential for savings is huge.

When should I invest in these technologies?

Forward-thinking companies are using their current bar code systems to benchmark RFID technology in order to gauge impact on performance. This baseline is a crucial measure in determining the effectiveness of a new RFID system. The determination of when to use RFID technologies instead of bar codes should be driven by whether RFID can improve an existing business process.

As more and more companies look towards RFID and asset tracking systems to improve their business productivity, it is evident that there is a clear need for manufacturers to truly understand the various technologies available to them before investing in a system. Powlesland suggests that manufacturers start with bar coding before moving up to RFID, thereby ensuring that the correct systems and infrastructure are in place before this investment is made.

Tags can come in many different shapes and sizes. They are available as read-only, the data of which can be read but not changed, read/write, the data of which can be edited, or a combination of the two in which some data is permanently stored while other memory is editable. RFID therefore offers a wide variety of options that will appeal to different manufacturers based on their needs.

RFID readers, more commonly known as “interrogators”, capture data from tags which they then transmit to a computer to be processed. Like tags, the readers vary in shape and size; they can be fixed in stationary positions or totally portable. The style of reader required is therefore entirely dependent on the individual needs of the manufacturer.

Companies who are interested in improving their supply chain management may wish to seek an option that combines the best of both worlds. “Our printers are not limited to just bar codes or just just RFID; we offer dual printers that enable you to print everything from simple bar code labels to full RFID tags”, says Powlesland.

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Gaining an‘insite’ inIceland Ian Ritchie, managing director of Brammer, a leading UK supplier of maintenance, repair and overhaul (MRO) products and services, looks at how a unique international partnership in spares sourcing and stores management is delivering big benefits to the world’s leading aluminium producer.

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Setting

up a completely new manufacturing facility poses a unique set of challenges, even in a location where much of the infrastructure and supply chain is already in place.

However, the challenge is intensified when the facility is extremely large, situated in a remote location and facing inhospitable and often extreme weather conditions.

This was certainly the case when Alcoa, the world’s leading producer and manager of primary aluminium, fabricated aluminium and aluminium facilities, took the decision to construct its first new greenfield primary aluminium smelting facility for 20 years at Reydarfjordur in eastern Iceland.

Construction of the facility, named Fjarðaál (‘aluminium of the fjords’), started in 2004, with the aim of creating one of the most efficient, environmentally-friendly, and safest smelting plants in the world. The plant, operational since 2008, has a capacity of some 346,000 metric tons per year, and measures a massive 2.5km from end to end.

Operations and maintenance

chain services to Alcoa. The contract was awarded on a combination of the proven operational benefits Brammer had already brought to Alcoa in the UK and the tender proposal to deliver best practice in supply chain and stores management to the Fjarðaál project.

This project involved the establishment of what is effectively a Brammer branch – known as an ‘Insite’ – at the Fjarðaál site, to handle every possible aspect of spares and stores management and so free up Alcoa personnel to concentrate on production operations.

To manage the project, a team of Brammer employees were deployed to Fjarðaál in February 2007. They were supported by dedicated staff in the UK to undertake a highly complex data management project, complicated further by the distance and wide range of products involved.

During 2007, the Brammer team researched and audited more than 50 Icelandic suppliers, establishing a local supply chain with 30 suppliers for consumables, PPE and site maintenance. A small order system for this local supply chain was set up, with initial logistics links guaranteeing same day delivery commitments.

up a completely new “ Setting manufacturing facility poses a unique set of challenges, even in a location where much of the infrastructure and supply chain is already in place

“

Establishing local and international supply chains

To optimise supply chain efficiency and reduce operating costs, Alcoa planned to outsource stores management, spares sourcing and a range of related services for the Fjarðaál site to a third party. Already enjoying a successful partnership with Brammer in the UK for the supply of maintenance engineering spares and related services, Alcoa invited Brammer to tender for the contract.

The project brief was to create a sustainable and cost-efficient source of supply, managing the stores, warehouse and supply chain to ensure excellent availability of spare parts with transactional costs kept to a minimum. The criteria for the contract also required potential suppliers to demonstrate how a strategic longterm partnership would help reduce costs.

In November 2006, Brammer was awarded a contract covering the provision of stores, warehousing and supply

Simultaneously, Brammer established a supply chain for 120 global suppliers covering well over 5,000 individual product lines. This assisted Alcoa with its vendor reduction programme as the company only has to deal with Brammer rather than each of those suppliers individually, and has thus helped to significantly reduce working capital and transactional costs. Indeed, by October 2007, some £185,000 of cost savings had been achieved for Alcoa, all before the plant was fully operational. To cater for the often unexpected and unplanned nature of maintenance spares supply, a next day delivery capability to supply from the UK was also established.

Centralising operations

The initial project had involved the establishment of two off-site, remote maintenance and engineering stores facilities. While this arrangement was effective during the start-up phase of the plant, the ultimate aim of both Brammer and Alcoa was to develop the operation into one on-site, best in class, semi-automated warehouse facility to create further economies of scale and reduced turnaround times in picking and delivery.

Brammer planned and managed the entire warehouse design and relocation project for Alcoa, developing a complete understanding of Alcoa’s needs and expectations from the on-site facility, and then providing a comprehensive stores design and management

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optimum use of space and provide easy access for picking, and longitudinal racking for pallet storage.

site of alcoas new primary aluminium smelting plant

Iceland

consultancy to deliver the optimum warehousing solution.

This involved evaluating existing customer plans for the stores and making recommendations on the best configuration in terms of storage capacity, picking, work flow, location, space utilisation, health & safety and welfare issues.

The overall requirement from Alcoa was for more than 800 pallet locations and in excess of 6,000 locations for medium-sized and smaller items. Brammer’s proposal included high-density storage units to make

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The design placed fast-moving lines near to the door to minimise movement, with carousel racking for smaller items.

Locations are also colour-coded to different areas of the site, with a trailer system providing delivery to line-side/plant areas - absolutely essential in a 2.5km long site.

The Insite facility also features a touch screen product identification and selection capability in English and Icelandic, allowing staff to view stock levels and order product with ease.

This facility is now fully operational on a 24/7/365 basis to support Alcoa’s production operations, with a 10-strong Brammer team handling all ordering, storeroom replenishment, goods receiving, inventory management, internal delivery, kitting and staging services and technical support for the site.

Continuing to add value

Insites are becoming increasingly common among Brammer customers and the operational and financial benefits achieved for Alcoa in Iceland are clear evidence of the reasons for this trend.

In most instances when establishing an Insite, Brammer is working with its own existing supply chain of leading engineering component manufacturers. For Alcoa in Iceland, however, Brammer had to quickly

Calling for entries: Is your operation flexible, effective and efficient and well maintained?

and successfully establish a robust international supply chain that included many new suppliers, whilst maintaining a clear focus on continuity of supply combined with delivering on supplier reduction, inventory management and technical support from day one.

An Insite allows Brammer to provide a full range of technical help and advice, and also to implement continuous improvement projects to deliver enhanced production efficiency and reduced working capital, with services provided either by the permanent in-house team or through other Brammer technical specialists brought in when required.

One major area where Brammer is successfully reducing total acquisition costs for Alcoa is through an OEM parts conversion project. This project involves Brammer identifying spare parts that are being

project brief was to create “ The a sustainable and cost-efficient source of supply, managing the stores, warehouse and supply chain to ensure excellent availability of spare parts with transactional costs kept to a minimum

“

sourced from an original equipment manufacturer, where Brammer is then able to provide the same part at lower cost due to it’s purchasing economies of scale, or can identify a fit for purpose alternative that assists an engineering standardisation programme.

OEM parts conversion has already benefited Alcoa with increased productivity and reduced total cost of ownership for the spare parts. This is helping Alcoa to achieve efficiencies by reducing inventory and thus the total cost of component acquisition. As usage patterns

This award will go to the manufacturing company or plant that, in the opinion of the judges, is making quantifiable progress towards having fully integrated factory operations that identifies and utilises to good effect the interaction between machines, processing steps and the tasks that need to be performed.

This may include use of flexible process and operations techniques, which allow for adjustments that are required to meet shifting manufacturing and demand scenarios and that implement effective maintenance programmes.

enter at www.themanufacturer.com/awards

Operations and maintenance award

continue to emerge, further reductions in working capital will be achievable through product and brand rationalisation and optimised inventory profiling.

Brammer is also helping Alcoa to achieve cost savings in the important area of energy consumption. One example of a successful project has seen Brammer recommend the changing of the V-belt drives on blower fans to reduce energy consumption and improve the efficiency of the production line.

The evidence in terms of verified cost savings is clear.

By the end of 2008, through its focus on reducing total acquisition costs and improving production efficiency, Brammer had delivered close to £1 million in operational cost savings to Alcoa. These cost savings being generated through a combination of the activity during the establishment of the local and international supply chains, savings in the purchase of both capital equipment and spares based on economies of scale and Brammer’s purchasing power, and individual projects to reduce energy usage and spares inventory.

Tomas Sigurdsson, managing director of Alcoa, sums up the relationship as follows: “Brammer’s approach to business aligns very well with ours. The Brammer MRO offering is a good fit for our requirements and we have high expectations for their storeroom operation processes and systems at Fjarðaál. The two operations have been seamlessly integrated and this approach is also new to Icelandic industry.

Our co-operation with Brammer will be one of the cornerstones in our operational effectiveness and long-term sustainability.” end

Have your say at www.themanufacturer.com

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Small could be beautiful in UK wind energy

The UK small wind system manufacturing industry is robust but at risk. As other countries’ governments wake up to the potential benefits of a domestic small wind industry, the UK industry cannot afford to be complacent and government must engage with it to capitalise on a sound base as the global market expands.

Dennis Frize reports.

Wind

Week 2009, an event celebrating wind energy technology organised by the British Wind Energy Association (BWEA), took place in the UK between June 13 and 21. Supporters championed wind power applications, with events organised across the country. Wind Week coincided with Global Wind Day on June 15, marked by thunderstorms and poor weather throughout the UK, emphasising the point made by BWEA’s chief executive Maria McCaffery, that ”We are at a crucial stage in the development of wind energy in the UK. Wind Week 2009 is an opportunity for everyone to find out the truth about this amazing free, clean energy that blows through the UK in abundance.”

It is a poignant time to recognise the UK’s small wind system (SWS) industry, manufacturers and distributors of small wind energy conversion systems, using blades up to 15m in diameter, at heights of up to 40m and electricity generation capacity up to 100KW.

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Twenty years ago, British companies led the world in research at this scale of renewable energy generation.

Like many other stories of British ingenuity, this success can be traced to a few individuals who pioneered what is now a robust SWS manufacturing sector. By 2009, there are 18 SWS turbine manufacturers operating in the UK providing 1,880 jobs (see box) and five or six of these are considered to be among the top 10 SWS turbine manufacturers in the world.

But there is a growing possibility that this position could be lost. Industry insiders are concerned that SWS companies must avoid suffering the same fate as the UK large wind turbine manufacturing base which petered out after a promising start in the 1980s. The recent BWEA Small Wind Systems UK market report shows that these manufacturers are doing pretty well both domestically and internationally. Domestic manufacturers currently hold an 82% revenue share

Sustainable manufacturing

of the UK market (a market worth £13.5m in 2008) and export over 50% of their output to more than 100 countries worldwide.

BWEA’s Small Wind System UK market report — headline figures: UK SWS installed capacity now exceeds 20MW, with 7.24MW installed in 2008 alone The UK micro and small wind industry now provides 1,880 UK based jobs Over 500 UK based jobs were created between 2007 and 2008 Over 10,000 small wind systems deployed in the UK since 2005 Export revenue for UK manufacturers doubled between 2007 and 2008 Over 10,000 small wind system exported by UK manufacturers since 2005 UK manufacturers now export 50% of output to over 100 countries UK manufacturers hold an 82% revenue share of the UK market

construction, 7GW have planning consent and some 8GW are waiting approval. These projects will up UK wind power generation to 20GW and even though 15 GW short of BWEA’s estimated requirement they nonetheless represent the largest — and quickest — conversion to renewal energy production undertaken to date.

The London Array, envisioned as the UK’s flagship project, when completed will have 341 turbines contributing 1 sole GW but still represents the world’s largest offshore wind farm project.

David Sharman, managing director of SWS manufacturer Ampair, says: “The value capture of these large offshore wind projects announced in the budget for the British tax payer is very low.” In effect, with no domestic large turbine manufacturers — and only one UK owned electricity producer — the onus is on foreign-owned companies, almost single-handedly, to realise the government’s wind vision.

Consequently, any state investment is likely to be fulfilled by non-domestic energy providers. In managing wind farms on or in UK waters, and by using imported wind turbines, the UK’s offshore wind capabilities are essentially analogous to that of a developing country selling its offshore oil resources. Given that offshore production costs approximately twice that of onshore projects, and coupled with the global demand for wind power systems continuing to rise sharply, Britain now finds itself competing for these projects to be built in the UK.

The UK SWS industry is currently the world’s third most important SWS manufacturing base, having only recently been overtaken by the US and China’s manufacturing capabilities. As was seen with Large Wind Turbine manufacturing (see TM, May 2009) the UK enjoyed an early research-leadership position, but just as the industry is set to boom — providing projects that should commence with government funding approved in this year’s Budget are not derailed by planning constraints — there are no native UK large wind turbine manufacturers left to meet this demand.

Those large wind turbine manufacturers that operated here have had severe difficulties with the British system, namely the planning process for new wind farms which effectively put an end to large wind turbine manufacture in the UK. Even the Danish owned Vestas Isle of White manufacturing site is set to close down, the company citing the domestic planning process which effectively has inhibited the creation of a UK onshore wind market which Vestas was positioned to supply.

Whilst the energy price spike may have made these plans viable at one time, the current squeeze in finance and lower general demand remains a significant cause for concern. Such is demonstrated by the London Array’s flagship project partners’ difficulties in securing firm financial backing, with both German-owned EON and Danish partner Dong Energy as yet uncommitted to providing the £3bn needed to build it.

Big plans to benefit foreigners and UK

The problem SWS manufacturers in the UK face is compiled of three main issues, says Alex Murray, small wind systems manager at BWEA:

According to targets set by the UK Government, by 2015 15% of electricity will be generated from renewable sources. BWEA estimates that 35 GW is the necessary contribution wind power must make in order to reach the Government’s greenhouse gas reduction target. There are currently just over 200 operational wind farms in the UK, with 2,500 turbines generating just over 3GW of installed capacity. A further 2GW worth of schemes are currently under

It is widely thought that the Government must make the UK wind market more attractive in order to attract foreign investment. Perhaps unintentionally, however, such a deficit may well actually have a positive impact on the UK’s SWS manufacturing industry. Given that SWS is treated by planners as comparable to Big wind, the up-coming Low Carbon Industrial Strategy will thus address the primary challenge faced

by UK-based SWS manufacturers; the creation of a domestic market.

Wanted: Clear industrial strategy

1

The UK planning process is out of date

SWS planning policy is the same as large wind systems. Most infrastructure projects normally have a 16 week maximum planning and approval period — 70% of non-wind farm project decisions meet the deadline; with wind projects only 5% of decisions are made within this timescale

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Preparing for CRC – don’t leave it to the 11th hour

Carbon Reduction Commitment: From Compliance to Competitive Advantage

BIRMINGHAM

LONDON

MANCHESTER

MASTERCLASS MASTERCLASS MASTERCLASS TO BOOK YOUR PLACE CALL LAURA WILLIAMS NOW ON 01603 671 232, DATES AVAILABLE THROUGHOUT JULY AND AUGUST

With its mix of compliance, financial and reputational levers, the Carbon Reduction Commitment (CRC) comes into effect on April 1st 2010. This new legislation poses a complex set of compliance and commercial risks and opportunities for manufacturers.

THIS MASTER CLASS IS SPECIFICALLY DESIGNED TO PREPARE MANUFACTURERS BY: �

Demystifying the CRC and highlight the key compliance features and timelines of the legislation

�

Looking beyond compliance issues and exploring a strategic response

�

Identifying the financial, competitive and brand exposure to the CRC

MASTERCLASS AGENDA: � � �

MORNING Overview of CRC Case study – Are you in?

Early action measures

� � �

AFTERNOON Designing a CRC strategy Time table of on-going responsibilities Review Q&A and close

THE CRC MASTER CLASS WILL HELP YOU ANSWER THE FOLLOWING QUESTIONS: � Have you reviewed your company in terms of the CRC? � Is your organisation’s data accessible and of sufficient quality? � What does your CRC team look like? � Do you have a financial plan in place – for permit procurement, recycling payments and potential bonuses and penalties? � Have you calculated OPEX and CAPEX associated with a compliance strategy? � Have you identified your company’s brand exposure? � What are your competitors doing and what is your response?

TO BOOK YOUR PLACE AND TO FIND OUT MORE PLEASE CALL LAURA WILLIAMS ON 01603 671323 OR VISIT:

www.themanufacturer.com/masterclass/crc 94

2 3

Wind on-grid applications are not competitively priced

A feed-in tariff is needed to make this commercially viable. In effect it’s a subsidy to make electricity derived from wind competitive.

The UK is very well placed to dictate the certification process

With a little support, the UK industry could set the standard for the US, France, Ireland, Germany, Spain and the rest of the world.

EEF, the manufacturers’ organisation’s energy adviser, Roger Salomone, corroborates the same points and adds: “The noises coming from BIS, Department of Business, Innovations and Skills (formerly known as BERR) are very positive with regards to the Low Carbon Industrial Strategy to be published in early July. It seems that the policymakers are intent on actual delivery rather than reiterating vacuous visions that don’t actually mean anything on the ground. For SWS in particular, this strategy could be the ‘make or break’ turning point: if the obstacles are not removed and an actionable industrial strategy formulated, this market is likely to become someone else’s success story.

SWS manufacturers have not relied on the policymakers.

In fact, despite the lack of government support they have managed to largely serve the domestic market and generate substantial export orders. The current problem for them is the same one facing many other manufacturers in the UK; there is little access to finance. Financing any substantial order is still proving very difficult and banks, like the Government in the past have seen renewables as too risky. This risk aversion, although addressed by BIS’s (BERR) Export Guarantee, first requires the exporter to identify a bank that is willing to provide finance before the guarantee can be made. In the current climate this is easier said than done.

Mandelson’s pledge to support

Should the Low Carbon Industrial Strategy help SWS manufacturers overcome the obstacles they face, the good news is that these manufacturers are in a very good position to maximise value capture for any contribution by the taxpayer. A feed-in tariff and the relaxation of the planning process would release the domestic SWS market, which is essential for any emerging industry.

This is demonstrated clearly by Spain’s big wind system success. With a strong and growing domestic market, observers say even multiple increase in demand could be serviced by the spare engineering capacity in the automotive, aerospace and marine supply chains — in theory. It remains to be seen whether such skills would be transferrable in a short to medium timescale. The smaller size of SWS turbines, compared to large wind turbines, means that the existing distribution network can easily handle UK and export orders from around the world.

In a speech delivered by the then business secretary, Lord Mandelson, last month on the politics of climate change, he said that: “where appropriate, government will intervene in the market to generate demand,” and he expressed his belief that “government has a responsibility

Calling for entries: Are you reducing your carbon footprint?

This award will be given to the manufacturing company or plant that, in the opinion of the judges, best demonstrates how it has improved its environmental performance and reduced its carbon footprint. This may take the form of a single highly effective initiative, or a wide ranging portfolio of smaller improvements. For example, switching to a renewable energy source, or increasing energy efficiency through simple but demonstrable methods such as minimising unnecessary lighting; reorganising the shopfloor to save energy; powering down equipment that will be dormant for periods of time; reducing packaging and designing recyclability into its products.

enter at www.themanufacturer.com/awards

Sustainable manufacturing award

to ensure that UK-based companies are equipped to compete for the new demand created by government climate change policies.”

A recent global study released by the American Wind Energy Association (AWEA) highlighted significant international growth in demand for small wind technology.

Its author, AWEA’s Ron Stimmel, said: “The UK currently exports more small wind systems than any other country in the world and has a great potential domestic market.

In the US, the world’s largest small wind market, the federal government recently enacted a long term financial incentive for small wind turbine consumers that could bring a 30-fold growth to the US industry in as little as five years. With the right policies, the UK market could see similar growth.”

Should BIS follow the US federal government’s lead, the UK small wind market could play a part in achieving Lord Mandelson’s stated beliefs, and the opportunity is there for the UK to have a little piece of its low carbon economy future now. British people have got used to the proliferation of mobile phone masts as a necessity for the digital age, and the countless CCTV cameras following our every move as a necessity of the antiterror age. Similarly is there a green age necessity for a landscape peppered by wind turbines generating green energy? If planning barriers can be reduced sensibly, and a feed in tariff introduced, British manufacturing could benefit manifold.

Have your say at www.themanufacturer.com

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Manufacturinginaction Putting UK manufacturers under the spotlight Brintons

Factory of the month

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Operations director Phil Ellis on how a culture of continuous innovation has seen Brintons supply carpets for, among others, Buckingham Palace and the White House

JohnsonDiversey

Cleaning and hygiene products

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Environmental transformation – and a community-minded ethos – is central to the success of Europe’s largest cleaning and hygiene supplier, as TM discovers

Oxford Instruments Scientific equipment

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Ruari McCallion finds that the first commercial spin-out company from Oxford University continues to lead the market in the supply of microanalysis systems

Converteam

Power conversion

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Continuous improvement and specialist skills have driven rapid growth for a company with a truly global reach, as TM discovers

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Weaving magic

Carpet weaving company Brintons has come a long way since its establishment in 1783. TM talks to group operations director Phil Ellis about how quality, service and value have propelled the company to five-star status.

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Residential and commercial carpet manufacturer Brintons was established in 1783 and, unsurprisingly, began life as a very locally-driven business. 225 years later, and the company is now a major player on the global stage – but it is still owned by family shareholders, and Michael Brinton is one family member who is very active in the running of the business today as president.

On the residential side, which makes up 30% of its business, Brintons carpets can be found in most high street retailers; on the commercial side, its customers include Buckingham Palace; the White House; Las Vegas-based casino Caesar’s Palace; the Sydney Opera House; international airports and all

Factory of the month Brintons

So how did Brintons come from being a locally-focused company all those years ago to the global operation it is today, with a £100m turnover and 1900 employees in the UK and overseas? The company’s journey can be mapped out using a number of significant milestones, characterised by pioneering innovation, and from this it is clear to see how it has reached the market-leading position it finds itself in today.

“When Brintons was originally formed by the Brinton family it pioneered many of the modern weaving processes that you’ll see around in carpet weaving today,” explains group operations director Phil Ellis. “Weaving technology has always been very much at the forefront of modern weaving and it’s pretty much stayed there. In 1890, Brintons patented the technology behind its gripper Axminster loom, which was leading-edge at the time and is still very much in use today.

In 1909, it introduced the industry’s first broad loom - broad looms revolutionised weaving in terms of efficiency and manufacturing output. In 1950, Brintons pioneered the use of 80/20: 80% wool and 20% nylon. Prior to that it was all wool; the nylon content gives it a better appearance and more durability. In 1976, Brintons became the first company in the world to exploit CAD [computer aided design] within the weaving industry.

Brintons began to evolve as a global manufacturing business when in 1991, we opened our Portuguese plant and in 1999 we opened our plant in India.”

A bespoke approach

Specialising in Axminster and Wilton wool-rich woven carpets, the successes for Brintons continue. “We’ve delivered the world’s largest ever woven carpet order,” explains Ellis, “and that was about 23 acres of carpet installed in the Chep Lap Kok International Airport in Hong Kong. The installed carpet has to withstand the wear and tear of around 35 million passengers a year.” The company is currently working on the newest, largest Axminster project in the world – a highly prestigious project of around about 170,000 square metres of carpet.

Brintons does not consider its product to be a commodity whatsoever, and sees each new commercial order as a “blank piece of paper” requiring bespoke, specialist design. It is within this area that Brintons sees itself as standing

apart from the competition in terms of its design capability, technical expertise and project management skills. “We are very much a project management business,” confirms Ellis.

The company sees its other key specialist areas as being design innovation and manufacturing excellence.

In recent years Brintons has become a truly global company, with operations in Europe, the USA, Australia and the Middle East. It is also currently building a new facility in China, which will be operational in 2010. The location here is key in terms of route-to-market and low-cost manufacture, which translates into reduced lead times for the customer and improved profitability for Brintons. “Strategically, those plants are very well placed and service all of our global markets,” confirms Ellis.

Brintons prides itself on the quality of its products, and to achieve this, it sources its carpet components from the best providers around the world. Wool is sourced predominantly from the UK; nylon fibre from the US; and the backing material - such as jute, polyester and polypropylene – is bought from India and Bangladesh. The company does not buy through traders but sources direct, giving it better access and control of the best quality base materials which go into the manufacture of its carpets.

Continually improving

Brintons is rapidly developing its culture of continuous improvement in order to stay ahead of the competition. “The foundation for lean enterprise and continuous improvement is the Brintons Operating System [BOS],” confirms Ellis. “BOS is our dashboard. It provides a consistent reporting process for operations and focuses on those things which ‘truly move the needle’ in terms of business performance.

Recognising and identifying value streams has been a key part of managing Brintons’ manufacturing operations and associated global supply chain. Lean enterprise is in turn, a key component of the Brintons’ global manufacturing strategy. Kaizen and Six Sigma activity form part of daily work in the Brintons manufacturing plants with increased focus in transactional areas of the business. “There are two lean leaders here in the UK,”

“

Over the last nine months we’ve managed to keep our motivational level within the plants high and the reason we’ve been able to do that is by making sure that we engage with our people

“

the major five-star hotel names – that is, Marriott, Hilton, Hyatt and Four Seasons.

It is hard to see how a client list could get any more prestigious than that.

explains Ellis, “who have developed our kaizen promotion office [KPO] both in Kidderminster and Telford. They will be developing further KPOs in our overseas plants in due course. We’ve also just started training our first four six sigma black belts.”

The benefits have been clear for all to see. “We’ve reduced our working capital significantly,” he confirms. “Understanding our value streams and identifying areas for improvement has generated sustainable benefits, including inventory reduction, reduced manufacturing costs, increased efficiencies and reduced warranty costs. BOS and lean enterprise have KPIs linked to profit and cash generation, and that’s how we drive our business.”

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Standard Wool

Standard Wool

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Factory of the month Brintons

Brintons’ people have had a key part to play in the success of lean enterprise.

“Our people have been very receptive and engaging in terms of driving improvements throughout the business,” confirms Ellis. “They’ve been extremely supportive of the many business initiatives we’ve introduced and accelerated in the last fifteen months.”

People development is a major focus for Brintons and has been for many years. It has a dedicated training and development function within the human resources department. “We do not sell ourselves short on people development here,” says Ellis. “It is a remarkable business in terms of what it does in terms of training and developing people.” All employees have an employee development review (EDR), in place to identify internal and external training requirements. The company has work-based NVQ programmes for employees at all levels of the business, and comprehensive training programmes for manual workers to facilitate multiskilling and flexibility. There is even the opportunity for employees to undertake university degrees.

“Over the last nine months we’ve managed to keep our motivational level within the plants high and the reason we’ve been able to do that is by making sure that we engage with our people,” explains Ellis.

“We value their views and their input into the business. Whilst we might have some excellent technology around us, that technology would be pretty worthless without the goodwill and flexibility of our highly motivated employees. At the end of the day it is our employees who offer the most opportunity to make further step changes in business performance.”

Always looking forward

The excellent technology Ellis refers to certainly enables the business to further its innovation agenda. “We have our own bespoke ERP system. We also have CAD which is extremely useful within the design function which is directly linked to some of our electronic jacquard machines [the same as a CNC machine]. We’re always looking to improve our IT systems,” he confirms. “We feel we are the market leaders due to innovation, technical expertise and speed-to-market and IT plays a major part in our ability to differentiate as a business.” The company is also currently investing in new loom technologies which will deliver further benefits in improved quality, reduced manufacturing costs and reduced lead times to the customer, not to mention further reductions in working capital.

Brintons is clearly focused on initiatives that will enable it to maintain its expertise and quality, rather than chasing rapid growth. “That’s just not something that we would pursue,” says Ellis. “We achieve our growth through product excellence, speed-to-market, design innovation and technical skills: these are the key areas in which we differentiate as a business and which will continue to provide us with a competitive advantage in increasingly difficult trading conditions.”

While Brintons believes it has a business model that works, it is keen to guard against complacency. “We have to keep focusing on doing the right things” says Ellis. “The future will continue to present challenges but by maintaining our focus of continuous improvement I’m confident we will continue to prosper as a business.” end

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JohnsonDiversey

Cleaning up in more ways than one JohnsonDiversey, global manufacturer of cleaning and hygiene products, says its corporate ambition is to “protect lives, preserve the earth and transform our industry” – three very commendable yet very challenging objectives.

TM looks into whether the company walks the way it talks.

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the UK operation of global cleaning and hygiene products manufacturer JohnsonDiversey, one of four separate companies controlled by the Johnson family of Racine in the USA, is proving to be something of a trailblazer in its industry. The company is the largest cleaning and hygiene products supplier in Europe and is one of the leading experts in sustainable and superior performance.

With 700 staff, a UK turnover of around £115m and manufacturing commercial cleaning and hygiene products used by such prestigious customers as InBev, Diageo, GSK, the NHS, Rentokil and Tesco, you might not necessarily expect JohnsonDiversey to be leading the way in environmental transformation. But on the contrary – the company is one of only 17 businesses worldwide signed up to the Worldwide Wildlife Fund Climate Savers programme, which aims to mobilise companies to voluntarily reduce their greenhouse gas emissions. But this is no small nod to CSR, or a tickbox exercise to satisfy shareholders – globally, the company has committed an investment of no less than $19m in order to reduce its greenhouse gas emissions by around eight per cent, or 89,000 tonnes, between 2003 and 2013.

Cleaning and hygene JohnsonDiversey

Such a firm commitment to the programme is underscored by JohnsonDiversey’s approach to supporting its customers’ environmental awareness. Products such as Aquacheck, for example – where JohnsonDiversey helps its customers to understand their water usage, in addition to making recommendations for improving water efficiency – have been a massive success within the food and beverage industry. Also successful is a product used in a similar way which helps customers optimise their use of caustic soda; as well as Securecheck, which examines hygiene management for plant cleaning.

Supply Chain Director Helen Cooper explains how these initiatives are embedded into the overall company objectives: “There are so many people in the world that haven’t got access to drinking water,” she says. “It’s such a precious resource; so working on

“

“

Transforming our industry is very much about doing sustainable things. Yes, you need profitability; but it’s also about working with our community. We have various ventures around the world where we’re working very closely with communities to give back, which is the vision that the Johnson family have always had Helen Cooper, supply chain director

programmes such as Aquacheck – not just in the UK but globally – sets us apart. Transforming our industry is very much about doing sustainable things.

Yes, you need profitability; but it’s also about working with our community. We have various ventures around the world where we’re working very closely with communities to give back, which is the vision that the Johnson family have always had.”

Johnson Diversey’s cleaner maufacturing processes are part of its $19m global investment to reduce carbon emissions

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TDG and JohnsonDiversey TDG and JohnsonDiversey a highly productive modern partnership

T

DG and JohnsonDiversey have established a highly effective strategic partnership based on trust and collaboration. Operating with a highly skilled and dedicated team TDG have assisted in transforming all areas of the JohnsonDiversey supply chain. The partnership has delivered

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sustainable improvements in service levels and cost savings meeting everyone’s aspirations.

The JohnsonDiversey and TDG team have created a continuous improvement ethos that works to identify new opportunities to benefit JohnsonDiversey and it’s clients.

Published in association with: TDG Email: businessenquiries@tdg.co.uk Tel: 0800 0288 834

Cleaning and hygene JohnsonDiversey

But JohnsonDiversey is not only about helping its customers strive for environmental excellence. Site Operations Manager Neil Goddard explains how the company applies the same principles to its own sites: “We have an ongoing programme of environmental and sustainability initiatives on-site. We’re a chemical business producing hazardous waste, but currently, all our waste is zero landfill,” he reveals, “which we’re now looking to roll out on a regional basis.”

This is certainly an impressive achievement, especially given the nature of the industry. Goddard explains how other local businesses are able to make use of JohnsonDiversey waste that cannot be recycled: “We’re working with a waste management company which is providing the local expertise in terms of other companies that can use our waste. We do standard cardboard baling, plastic baling and so on; but cement manufacturers, for example, use a lot of energy in their process, so a lot of our waste is now being used to fuel that.

“Not everything that we’re sending off-site is being recycled but it is either being recycled or used in somebody else’s process,” he confirms. “For example there’s a technology called pyrolysis that is being used to clean up soil on brownfields sites, and some of our waste is used in that process. So again, it preserves the planet and transforms our industry – which is a direct fit with our purpose.”

JohnsonDiversey also has other environmental initiatives in the pipeline, including an application in process for a borehole to supply the site’s water and in addition, research into a wind turbine to supply the site’s electricity.

“If you talk about product development,” explains Goddard, “we put a lot of focus and effort into systems in terms of how you use the chemicals. We probably do more innovation there, and more R&D in that kind of area, helping our customers to use the products that we sell from a product efficiency and a cost-ofuse perspective.”

JohnsonDiversey’s storming and continuing success in the UK has seen the volume of product being produced at its UK plant triple over a five-year period – even taking into account the closure of two other UK plants and the consolidation of some other volume from plants around Europe. In addition, the company used to have four warehouses in the UK – and now it only has one.

With the UK factory now making triple the output it is designed for – no small feat – it comes as no surprise that lean has a big part to play in JohnsonDiversey’s processes. “We use many of the traditional lean tools that you’d expect to find,” confirms Goddard. “This was introduced back in 2003.

So the company is certainly committed to preserving the earth.

But it is also leading the way in protecting life, something of which Cooper is particularly proud: “The products we offer protect against infections such as MRSA and against footand-mouth. These are products that we’ve had tested that we can prove are very effective in stopping the spread of those sort of infections and diseases. We are very much about protecting lives.”

The company focuses on developing services to assist its customers and innovating products that deliver cleaning performance improvement. For example, the company’s award-winning range of TASKI floor cleaning machines has evolved to incorporate water and energy saving technology and has been doing well as a result: “Last year in particular,” confirms Cooper, “we outstripped the sales we’d anticipated.”

Another example is the company’s J-Flex controlled dosing system that allows customers to dilute concentrated products with water accurately and safely – whether in a machine, bucket or spray – for optimum cost control and cleaning efficiency. Although the product is not a new launch, it has been a great success over the past year “We cover such a broad range of products but we continue to innovate to improve cleaning performance and hygiene standards for our customers,” Cooper explains. “We are focused on the sectors we serve but there are opportunities to increase sales in these and in new markets as well. Our technical teams are working on development all the time, often alongside customers, to identify ways to improve existing products or create new ones for specific applications. We have an R&D department based in Utrecht which is divided into the various sectors we’re serving and the ways we do business.”

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Gesix and JohnsonDiversey S

pecialising in SAP Mobile Data Capture Gesix Services Limited (formerly Datavision EMEA Limited) was chosen by JohnsonDiversey to implement Bar Code Data Capture in its manufacturing facility at Cotes Park in 2003 and subsequently in The Netherlands.

After building a strong relationship with JohnsonDiversey Gesix has been consulted on many aspects of SAP integration and has been instrumental in helping JohnsonDiversey improve material movements within its SAP Supply Chain systems.

Systems implemented include: • Goods Receiving • Putaway • Picking for Production • Material Movements • Production Recording

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• Returns from Production • Loading Bay Scanning All using Bar Code Scanning, with real-time connectivity to JohnsonDiversey’s Worldwide SAP system.

Other areas where Gesix has provided creative solutions within the SAP Supply Chain: • Voice Enabled Material Movements for SAP - Using topSPEECH-Lydia® we integrate Voice Enabled Material movements by directly connecting with SAP (no Middleware). Using core SAP we offer fully “Hands Free” operations for any Material Movements within the Supply Chain.

• Pick by Voice and Verify by Weight - Having picked by Voice we use modified forks in trucks with

embedded weighing scales, verifying the amount by checking SAP Master Data for the weight in real-time to eliminate Picking Errors.

• Dimensioning for SAP - Using an integrated Dimensioning tool we automatically select the correct Packing Case for each order and provide 3D Packing instructions to ensure containers are packed in the most efficient manner.

Published in association with: GESIX SERVICES LIMITED Please contact Raymond Batey: Tel: +44 (0)1276 66567 Email: rbatey@gesix.com

Cleaning and hygene JohnsonDiversey

“As a company globally, we’ve run a lean initiative and trained a number of people; fortunately we’ve got someone here who was trained as part of the company’s global roll-out in value stream mapping and so on.”

Such a commitment both to excellence and to its customers has seen the company become the proud recipient of many awards. In 2004 it won JohnsonDiversey Factory of the Year [there are 32 factories globally] alongside a commendation for Most Improved Plant in the Best Factories Awards. It also won a commendation for People Management in the Best Factories Awards 2005. It considers its greatest achievement, however, to be winning the Manufacturing Excellence Best Factory Award in 2005; and in fact, it has just been informed that it has been shortlisted for the Best Factory Awards 2009. “We try to use awards as a recognition of the milestones in the journey of improvement, to recognise the step changes that we’ve made,” explains Goddard.

JohnsonDiversey’s own internal manufacturing excellence programme has allowed it to benchmark itself in preparation for entering awards. Involving an internal audit across categories such as facility capacity operations; sourcing and vendor relations; people organisation; quality; environment; health & safety and planning and scheduling, the audit looks at how the site is performing in each area, but equally, how it is improving.

Currently the UK factory is the only site performing and improving across all of the audited areas. “We’ve deliberately not gone for anything for the last three years because we thought we needed a break; we needed to try and move to the next level,” explains Goddard. “But now we feel the time is right to try and pitch our hat in the ring again and try and win some awards.”

Clearly, such successes could not be brought about without a dedicated workforce, an area in which JohnsonDiversey is happy to invest.

“We’ve got a leadership and development programme that we run as a site that we’re putting a number of our leadership team through,” confirms Goddard. “And we run mature apprenticeship programmes, so people who were operators are now technicians; and we’ve got people who were operators who are now team leaders. About 70% of our workforce is now up to the level of NVQ 2 standard both in manufacturing operations and business improvement techniques. We’re spending quite a significant amount of money on training this year, in the region

of around £80,000 – so that’s quite a significant investment for a site of this size – and that’s to fund our internal and external training programmes.”

An ongoing training plan is compiled on an annual basis covering all areas of the factory. This is not just to enable implementation of the training but to evaluate the effectiveness of training already undertaken. Everyone on site also has an annually-reviewable Personal Development Plan that is linked to skill and competency development.

“We see that as very important to delivering success on site,” confirms Goddard. “We’re doing the most training that we’ve probably ever done and that’s no coincidence to me that we’re getting some of the best results we’ve ever had.”

As if to underpin this effort, JohnsonDiversey’s UK site was accredited as an Investor in People in 2004 and re-accredited in February 2007.

“What I see now,” explains Cooper, “is a real focus on the customer. We’ve done a lot of research to understand our customers internally and externally; as a result of that we can now focus our efforts on meeting customer needs because we understand them so much better. We can think about really adding value – about what makes a positive difference to customers and what doesn’t. If it doesn’t add value do we need to do it? If we don’t, let’s cut out the waste. And we’re also about working in partnership with customers, so rather than just relying on the one-to-one salesman’s relationship, it’s more about multi-functional teams involving finance, sales, marketing – everybody. It’s all around getting consistency and becoming more effective and therefore more efficient.”

“We’ve got a really powerful data-driven global strategy,” confirms Goddard, “and now we’ve got the global organisation to deliver it.”

This is certainly a company that is making great strides and breaking boundaries. While some companies are focusing on cost cutting and headcount reduction, JohnsonDiversey is concentrating on the one thing that will help to steer it through the current crisis – its customers. It is clear that the company has the people, skills, vision and products to help it deliver results and drive through its powerful vision into the future. end

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A true partnership Oxford Instruments choose acs, a Microsoft and HP GOLD partner, to supply and pre-configure 6,000 HP desktop PCs over three years.

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O

xford Instruments specialise in the design, manufacture and support of high-technology tools and systems for industry, research, education, space, energy, defence and healthcare.

acs manages a secure environment with restricted access to the configuration centre and secure imaging server. In addition, all hard copies of the images are kept in a fire safe off-site.

At the heart of every Oxford Instruments healthcare product is a HP PC supplied by acs and pre-configured with additional memory and components. As part of the procurement process, acs installs one of a number of pre-configured ‘images’ containing all of the required software in one of seven languages. Due to the highly sensitive nature of this software,

Continuity of supply is critical to ensure Oxford Instruments is able to meet its own supply commitments on time. As a HP GOLD partner, acs has a close relationship with Hewlett Packard and liaises directly on Oxford Instruments’ behalf to manage availability. Each machine is pre-configured and shipped within a 3-day window.

acs is proud of its continued partnership with Oxford Instruments and the part it plays in the supply of critical tools to key industries.

Published in association with: acs Please contact Lisa Ross: Tel: 01604 704000 Web: www.acs365.co.uk

Scientific equipment Oxford Instruments

Clear This year Oxford Instruments celebrates 50 years of scientific innovation and excellence.

Ruari McCallion talked to Nigel Salter about the latest developments.

In

1959, Oxford Instruments became the first commercial spin-out company from Oxford University and set a trend that everyone else has followed since. Since then, it has grown to into a worldwide business supplying high technology tools and systems for industrial analysis, research, education, space, and energy. Its USP, to use an advertising term, is the resources, expertise and capability to design and produce equipment able to identify and manipulate matter at the smallest scale. Dr Nigel Salter is operations director of Oxford Instruments NanoAnalysis, the global market leader in the supply of microanalysis systems. It produces around 1000 systems a year and turns over about £35m annually; its target is to reach £50m by 2011.

is used for materials analysis, in the silicon wafer industry, for example. “Full systems consist of a detector, which measures and captures X-rays; pulse processing electronics for signal processing; and software for analysis. We manufacture the detectors but there’s a lot of clever stuff in the software, too, which we develop ourselves here in the UK and that is the expensive bit.”

“We make X-ray microanalysis equipment for use on electron microscopes,” he says. “Our customers are the microscope manufacturers like Zeiss, Jeol, FEI and Hitachi – as well as universities, research laboratories and other commercial organisations.” Nanoanalysis is about looking at what makes up materials and objects; Oxford Instruments’ systems tell the user about the chemistry and structure of materials on the micro- or even nano-scale.

Oxford Instruments commits around ten per cent of revenues to R&D annually, necessary to maintain its position as a producer of leading edge tools and systems. There are no markets for 20-year old technology; even 10year old technology tends to be past its sell-by date. The last five years have seen a major new development that has pushed older technology into the shadows.

“Oxford Instruments technology is concentrated on two types of analysis: EDS (electron dispersive spectroscopy) which tells you about the elements in the material; and EBSD (electron backscatter diffraction) for probing a materials structure,” says Salter. EDS tells you what type of currants there are in your bun; EBSD tells you how they are distributed. The equipment

“EDS uses two different sensor technologies. Traditionally sensors use silicon-lithium crystals. They operate at very low temperatures and are cooled with liquid nitrogen. Recent years have seen the emergence of silicon drift

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Scientific equipment Oxford Instruments

detectors (SDD),” he explains. “They are more advanced and they don’t have to be so cold so there is no need for liquid nitrogen. That means a saving in energy for a start and it also means the equipment is smaller, safer and easier to operate, as well as being more productive for the user. Oxford Instruments has developed the concept and technology to make it even more powerful.”

“Our new X-Max Large Area Analytical EDS SDD sensors provide a larger-area detector than anyone else has, which means the user can get more X-rays onto a sample, and that means faster results,” he says. “The analogy is with camera optics: the bigger the lens, the more light comes in. Our SDD has a detector area up to 80 sq mm; before the X-Max, the typical detector size was just 10 sq mm.” There are other products on the market that advertise larger detectors than 10 sq mm however. “That’s true but they do it by putting several smaller sensors together and that inevitably creates design compromises. Ours is a single sensor, which makes for more efficient detection of X-rays.” The X-Max was launched in October 2008, started shipping in January and has exceeded our expectations!”

they do the fabrication, we do the analysis. They and their customers use our equipment.”

Although Oxford Instruments products are very high specification and use the latest technology, they are still able to source some components from lower-cost areas, like Malaysia. Its facility at High Wycombe near Oxford undertakes design and development, final assembly, configuration and testing.

“It is similar to the OEM model,” says Salter. “The total part count may be 150 or so but they arrive as nine or 10 subassemblies. The PCBs come in completely populated to our design, for example.” Business improvement programmes have their role in Oxford Instruments’ development; its key measures are customer service and lead times. Even with its ultra-high tolerances, it manages 97 per cent in full within a week; 85 per cent on the actual day. It builds to forecast but uses a sophisticated sales and operations planning process to control it.

“We have to strike the balance between lead time, inventory control, on-time delivery and the pressures of build to order,” says Salter. “Our core competencies are design, software and assembly, configuration and testing – but our real strength is in product design.” Its continued leadership in its markets is testament to that. end

“We passed our planned production volumes in March this year. The market can’t get them fast enough!” says Salter.

“People with older-style detectors are upgrading to X-Max; there is a big upgrade market for us.” Its markets are global, with an equal split between Europe, the Far East and the US. Products are manufactured in the UK but it has strong representation in all its markets, with offices in Japan, China, USA, and in Europe. Another X-Max product will be launching soon.

“In July, we will be introducing a version of X-Max for transmission electron microscopes, which is a different market again,” he says.

“Scanning electron microscopes look at the surface of materials; transmission electron microscopes use even higher magnification and can approach the atomic scale. It will be used in semiconductor plants, and advanced materials research and in nanotech applications like thin film coatings, including polymer coatings and photovoltaic (PV) cells.

There’s a lot of research going on at the fundamental level to get Solar pv more effective and less expensive.

That research uses our equipment.”

Another division of Oxford Instruments is Plasma Technology, which makes plasma coating machines. “They build up materials one atomic layer at a time;

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Team power For power conversion specialist Converteam, the last few years have been characterised by rapid growth into new markets and continuous improvement. TM talks to Duncan Johns, vice president of Converteam’s Systems Engineering and Drives division, to uncover the secrets of the company’s success.

Converteam is an engineering company specialising in power conversion, boasting more than 100 years’ experience in this arena. The company is derived from industry giants such as Alstom, Cegelec, Jeumont Schneider and GEC; in late 2005 a management buyout from French company Alstom produced Converteam as we know it today, and in the threeand-a-half years since, the company has gone from strength to strength.

Converteam prides itself on offering reliable, cost-effective and environmentallyfriendly electrical solutions that are designed to suit the exact needs of any one particular customer.

Duncan Johns, vice president of the company’s Systems Engineering and Drives division, explains how the outlook of the company has evolved since the buyout process: “We are very focused on what we do,” he says. “We’ve been able to define what we are, who we are, where we want to go, which markets we should be aiming at and how we do

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it. We have the flexibility of being smaller and the drive that you automatically get from being a leveraged buyout (LBO) company,” he says.

And the company’s growth is certainly impressive. In 2005, when the company separated from Alstom, orders totalled Eu777m. Three-and-a-half years later, and the orders for the group as a whole have reached Eu1.3bn. Staff numbers have also increased substantially, in order to meet the requirements of the company’s rapidly growing order book, a large proportion of which is made up of contracts from the oil and gas industry. Last year, for example, the UK division of the company took on no less than 400 new recruits, most of them engineers, bringing employee totals in this area to 1500 and the percentage of engineering staff up to 51%. The total headcount for the group worldwide is 5300 and colleagues operate across 14 countries. Needless to say, production and output has swiftly grown alongside these numbers – the rotating machines plant at the Rugby headquarters for the company’s Northern Europe division, for example, was making less than 40 machines per year four years ago; this year, however, it will manufacture over 200.

A global impact

Converteam’s global span is no less impressive. Worldwide, it boasts 22 sales offices, 10 engineering offices, 4 rotating machines facilities, 8 drives facilities and no less than 40 service

Power conversion Converteam

The organisation is split into four regions – Northern Europe; North America; Southern Europe/Middle East/Africa and Central & Eastern Europe/Russia.

Headquarters for each of its regions can be found in Paris, France; Rugby, England; Pittsburgh, USA; and Berlin, Germany. In addition, there are three manufacturing plants in France, three in the UK, two in the US, one in Brazil, one in Germany, and one – soon to be two – in China. There is also a major engineering centre in India and a large office in South Korea, as this is where the majority of LNGs and drilling rigs for the worldwide market are now being built.

There is also Converteam presence in Austria, Russia, Singapore, Norway, the UAE and Canada. Johns estimates that around 90% of the company’s products are exported all over the world.

The company’s expertise lies in power conversion, which means either taking mechanical power and converting it into electrical power; or taking electrical power and converting it into mechanical power.

This involves motors and generators on a large scale, as well as the electronics and conversion systems that accompany them.

More broadly, Converteam’s capabilities encompass consulting, manufacturing, design, system integration, installation and commissioning.

“We are differentiated by our specialist skill as a system integrator,” Johns explains. “The overall expertise of the company is not as a product manufacturer – though we do manufacture our own products – it’s as a systems engineer, to design complete systems that integrate our products, to adapt our products to particular needs,” he says. “So we are not a serial manufacturer; we are a bespoke manufacturer of systems that we design ourselves. We are far more specialist and would claim leadership in certain areas where we specialise.”

Market strength

The company as a whole can be said to serve four major markets – marine, oil and gas (including offshore), energy and industry.

Within the marine market, the company provides solutions for merchant vessels (including tankers and LNG ships), cruise ships and naval combat and research vessels. For these customers, it provides a range of solutions, including electrical power and propulsion systems, ship automation, power management

systems, dynamic positioning systems and auxiliary onboard solutions. From its UK plants for example, it provides electrical power and propulsion for both the Royal Navy and the US Navy; from its French plants, the company supplies the French Navy.

In the oil and gas exploration market, Converteam works within refineries, extraction and pipelines, offering high-speed motors, motors and drives for compressor pumps and drilling systems, energy quality and management systems and control and automation systems.

The company also has a strong presence within the process industries. Broadly, this covers aluminium, steel, cement, glass and paper; solutions include systems for steelmaking, hot and cold rolling mills and processing lines. It also offers solutions for material handling and water treatment, as well as test benches for the automotive and other industries.

It is clear that the company has a wide global reach, with a comprehensive range of solutions for application within the most demanding of markets. But perhaps the most significant area of growth for Converteam, now and for the future, is in the renewable energy market. Providing solutions for onshore and offshore wind turbines, wave and tidal energy and powergeneration auxiliaries, it offers a range of solutions that includes generators, power conditioning systems, and electrical drives for pumps and fans.

“

We expect to expand in all our current markets but the big area of expansion for us in the future will be wind power and the manufacture of generators for wind turbines

“

centres. Through the latter, Converteam is able to offer hotline assistance, remote diagnosis, customer training, technical support, consulting and other services.

“We expect to expand in all our current markets but the big area of expansion for us in the future will be wind power and the manufacture of generators for wind turbines,” confirms Johns. “We’re already a pretty substantial supplier of the power converters that go with the generators, but the offshore market – which is the market that will see massive growth over the next five years – will require a different type of generator and we believe that we’re extremely well-placed for that with some of the new technologies that we have. To be specific, [the offshore market] requires a generator without a gearbox, which means you need a low-speed machine. We have, with a permanent magnet generator, a very, very effective answer to that problem.”

The company’s firm foothold in the renewables sector has further heightened its awareness as an environmentallyconscious organisation. With strong environmental policies already in place, it is accredited to ISO 14001, and is currently looking very carefully at a number of methods by which it can further reduce its carbon footprint, and therefore its environmental impact. One way in which it is doing so at the moment is by finding ways to reduce travelling to meetings, by investing in new technologies that allow remote or virtual meetings to take place. “We’re attempting to reduce our carbon footprint all the time,” confirms Johns, “and we have a major initiative at the moment to reduce the amount of international travel we do by replacing that with net meetings, processes and using new telecommunications media, rather

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money that we spend this year, for obvious reasons, we’re not reining back at all on what we spend on R&D. We see this as a fundamental differentiator for Converteam in the future.”

People are power

With such highly skilled and talented staff in place, it is clear that Converteam sees its people as its greatest and most valuable asset. To this end, every individual has a training programme which is reviewed each year during an annual assessment. The company also has its own in-house academy – the Converteam Academy – that runs specific training courses covering a diverse range of business skills including quality, leadership and sales. Some of these courses are delivered in-house and some using outside training agencies, but whatever the method, Converteam sees them as a crucial ingredient to success. Just like investment into its R&D programme, the company does not hold back when it comes to investing in its people.

than getting on an aeroplane every time.

[The initiative is] just starting but I think we have potential to reduce our travel budgets significantly,” he says.

Cutting-edge research

With such a vast range of offerings and solutions for its customers, it is hardly surprising that one of the areas of its business in which Converteam invests most heavily is research and development (R&D), where the true cutting edge of innovation at the company is beginning to reveal itself. Exciting new technologies are being researched and are coming to the fore. “As far as technology is concerned, we do put a lot of money into R&D,” confirms Johns. “In the UK we’re doing the most fundamental R&D in the group; even to the extent where we’re working with cryogenics and superconducting materials now for our next generation of products.”

Such exciting developments are helping to propel Converteam ever-higher within the marketplace, thus enabling the company to attract an extremely high calibre of staff.

Johns believes that, combined with other factors, it is this – the quality of the staff – that places the future of the company in an extremely firm position. “We have some absolutely world-class, worldleading brains now and we believe that this is really securing the future growth of the company,” he says.

The fruits of Converteam’s investment in R&D are also evident in the company’s relationship with its customers: “Certainly, when we allow customers a glimpse of some of the new technologies that are coming along, they get very excited by it,” Johns confirms. “So even though times are tough [due to the global financial crisis] and we’re being cautious with any

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“This is somewhere where we are prepared to invest,” confirms Johns. “These are week-long courses and we see them as being among the best investments we could make.

They help our staff adapt to the changing markets, as well as giving them new skills, or upgrading the skills that they’ve already got.”

With such cutting-edge technologies at the heart of its success, Converteam sees skills as vital to enable the effective development and delivery of its highly bespoke solutions.

“We are a company that relies on the skills of individuals,” emphasises Johns. “In some of our manufacturing plants, we rarely make the same thing twice, so there’s not much room for automation.”

The company believes that to underscore the skills that have been developed and nurtured, lean must also play a key role in day-to-day operations. It has therefore implemented lean company-wide and places a firm emphasis on its importance, both as a driver to the company’s success thus far, and to its future development. “The development that we see in our manufacturing plants is allied to improving efficiency through our lean activities,” confirms Johns.

The company has ensured that lean is not something that is dipped in and out of; rather that it is a robust process firmly embedded in Converteam’s processes, with everybody taking it on board. “We started on our lean journey about three years ago,” explains Johns. “It’s something we’ve done very much ourselves, and see it as being a way of life rather than a management system. We’re very, very pleased with some of the results that we’ve achieved from it.”

The company opted not to use external lean consultants during the implementation process, choosing to employ instead several staff members from the automotive industry – including Johns – who already had a good working knowledge of the subject area and how best to implement it. “That has helped us a lot,” Johns explains. “Of course, our environment [at Converteam] is completely different in that we’re a project rather than a volume manufacturing environment, so what we’ve had to do is take the basic principles of lean – that is, the elimination of waste – and look at how we apply them within our environment. But we do use standard lean tools like value stream mapping and we have got huge benefits out of that.” By way of example, Johns cites a product that Converteam manufactures in Glasgow. Before ‘going lean’, the product took 156 days to manufacture; now it takes only 19.

Power conversion Converteam

Converteam has been bold and forward-thinking enough to apply lean in areas of the workplace where other companies fail to appreciate its true value and thus often fall short of complete conversion. “We started off in the plants and lean has now spread into the engineering areas and into the offices,” Johns explains. “We’ve even leaned our finance organisation and got benefits out of that so, yes, it is applied across the whole company. And really, if lean is to be a way of life then it has to be everybody’s way of life,” he adds.

This growth pattern will no doubt be supported effectively by the systems and processes that Converteam has taken great care to implement and refine, including lean.

“When the markets come back, people will be wanting fast delivery on their orders and lean is going to help us to do that, by reducing manufacturing lead time and increasing our flexibility,” Johns emphasises.

Intelligent investments

It is clear that Converteam has achieved its current levels of success through a firm commitment to continuous innovation, investment and improvement. Doing so has allowed it to secure contracts from major customers – its biggest in the UK, for example, is the Ministry of Defence. Having just secured the contract to provide power propulsion systems for the Royal Navy’s new aircraft carrier, which will involve supplying the generators, switchboards, motors and much of the electrical architecture on the boats, it is clear that Converteam has no time to sit back and reflect on its success thus-far. Instead, it will keep moving forward, adapting, looking ahead and innovating.

The company has been careful to be prudent with its investments in technology and IT, to ensure that they do not clash with its lean ideals. “Our philosophy now is that MRP is a very useful tool but it shouldn’t be the only tool,” Johns emphasises. “If you’re going to work in a lean environment – if you’re going to work in an environment where you’re daily reducing your manufacturing lead times – then actually it is very useful to still have some manual systems within the context of the plant itself. What MRP will do is to bridge the plant and ensure that you’re ordering the materials you need from your suppliers; once those materials are in the plant, the actual daily workflow is better defined by individuals with pieces of paper on the shopfloor than being instructed to do something by a computer,” he says.

Despite this, Converteam still sees the value in investing in highly sophisticated and often cutting-edge technology – if it is appropriate for the needs of the business: “Within the design area, we have a vast range of tools, a lot of which have been developed in-house. A lot of our design work is done on 3D modelling and we now have the capability to do 3D printing, where you get a facsimile 3D object made straight out of a drawing,” Johns enthuses.

“Due to the nature of our business, each project is a new challenge and we adapt to that. We’re continuously refining and adapting our offer to the market,” Johns concludes. end

Recognition of success

Being so forward-thinking in its outlook and being able to boast such rapid growth over the past few years, the company has – perhaps unsurprisingly – graced the stages of several awards ceremonies over the past year alone. Among those recognising its achievements was The Manufacturer itself, awarding Converteam’s Kidsgrove plant with the highly-coveted World Class Manufacturing award at The Manufacturer Live Awards ceremony in London last October. Converteam’s Glasgow plant was both a finalist and commended in the Manufacturing Excellence Awards, run by the Institute of Mechanical Engineers.

Two additional awards that Converteam is particularly proud of are a gold award from the Royal Society for the Prevention of Accidents (known as ROSPA), which was awarded for a fourth consecutive year, and a recent International Award from the British Safety Council (BSC).

Such glowing achievements and industry recognition are surely indicative of impressive achievements in difficult financial times: as the world tightens its belt, Converteam is continuing to perform successfully. Johns has a positive outlook: “Of course it’s no secret that the world is in a financial crisis, and I don’t imagine that there are many businesses that are not affected by that. For our business, it is not so much that there are not the projects out there, but that the projects that we would supply into – such as new wind farms or new vessels being built – are being delayed. But we’re in the happy position that we went into the year with a very strong order book, and we’re still taking orders. Eventually the vessels will get built, as will the wind farms. We are not so much ‘suffering’; but we are aware that the market itself is suffering from lack of capital.

Once that capital is freed up, then our business will go back onto a very strong growth pattern,” he confirms.

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Appointments

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Source of Supply

November

th 12 London

Call for entries!

We know the economic environment is tough but we also know UK manufacturing is strong and resilient - if there were ever a year when the successes of UK Manufacturing need to be recognised then surely 2009 is it!

Shout about your success! And let us help you be recognised by your staff, customers, suppliers, shareholders and the wider community as a world class manufacturer.

The Manufacturer Of The Year Awards scheme is specifically designed to recognise world class excellence and best practice being achieved throughout UK manufacturing. Previous winners include Smith & Nephew, InterfaceFLOR, Bombardier Aerospace, Boss Design, Willerby Holiday Homes.

For further details contact Alexis Catchpole on 01603 671300, mail a.catchpole@sayonemedia.com or download an entry form at www.themanufacturer.com/awards. The winners will be announced during a black tie gala dinner and awards ceremony in London on 12th November 2009.

And if you are interested in sponsoring an Award, contact David Alstin on 01603 671307 or email: d.alstin@sayonemedia.com

The awards categories this year are: Leadership and strategy Design and innovation World class manufacturing Skills and productivity IT in manufacturing Logistics and supply chain Operations and maintenance Sustainable manufacturing SME manufacturer of the year

Special supplement Collaboration for success

Automotive Aerospace and defence

Collaboration between manufacturing and higher education

Food and beverage

Lead story

The recession, manufacturing now and tomorrow

Supply chain and logistics Sustainable distribution

Pharmaceutical and medical devices Export manufacturer of the year

And the winner of winners category – The Manufacturer of the Year

www.themanufacturer.com July 2009 Vol 12 Issue 6

ENTER NOW, visit: www.themanufacturer.com/awards

www.themanufacturer.com July 2009 Vol 12 Issue 6

High flying sector hits First ence turbul Aerospace and defence industry faces tough challenges

Interview Ian Godden

Chief executive officer, SBAC