The Manufacturer June 2011 issue by The Manufacturer

www.themanufacturer.com June 2011 Vol 14 Issue 06

Demand-led

skills Building a picture of employers’ real needs

Regional Focus – North East

Net exporter of manufactured goods

Energy and Sustainability The real cost of carbon

The National Manufacturing Debate

Round up of Cranfield’s top level debate on long term job creation

Leadership, People and Skills Mediation for industrial disputes

IT in manufacturing

CMMs and OEE software reviewed

Interview Graham Chisnall

Managing director, Aerospace and Operations, A|D|S

Manufacturing in Action North East focus Johnson Controls Ford Aerospace

In partnership with:

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Answers for industry.

Editor’s comment

Market forces will help to fill skills gap and perception problem Two important events that The Manufacturer attended last month covered two big subjects: employers’ skills needs and the negative perception of a career in manufacturing and engineering. On the first, EEF’s sell-out Manufacturing Skills Summit took the results of a survey by the North East Regional Council’s Skills SubGroup as its main pillar. Inter alia, the main conclusions were that the skills provision and funding landscape is confusing, characterised by stop-start programmes, funding mechanisms that face closure and a lack of demand-led provision. Subgroup chairman Andrew Esson says that employers must be more independent when providing vocational qualifications (see page 16). The survey has helped a large group of employers in north east England to articulate their own skills needs to regional and national government and to map a route to acquiring these.

www.themanufac turer.com June

www.themanufa cturer.com June 2011

Vol 14 Issue

The perception of manufacturing is an enigma. As one who speaks to many industry professionals, I can tell you that few say they loathe their job and most speak evangelically about the creativity and job satisfaction that engineering (not the same as manufacturing) brings – see the Interview on page 32. This is true for young people and trainees too. It is a flat job market, engineering pays well and market forces, I believe, will drive more young people into manufacturing jobs. Teachers and parents, as well as the media, perhaps, are to ‘blame’ for not embracing this industry more. It is easy to forget that in parts of the UK the rather amorphous term ‘manufacturing’ has a bitter taste with many parents who can vividly recall mass redundancies in previous decades when large companies – ICI in the North East for example – were broken up. It will take time and a lot of hard work to re-educate a disenfranchised generation that much of modern manufacturing is vibrant, interesting and upwardly mobile. Parents and teachers need to see your companies first hand, if they will come, for perceptions to really change. But it’s not easy. One manufacturer in the North East told me his company had invited many local schools to visit the plant. Eight teachers accepted, but on the day only one showed up.

2011 Vol 14

Demand-le d

Issue 06

skills Building a picture of emp loyers’ real needs

Regional Focu

The North East s – Net exporter of manu

factured goods Energy and Sustainability of carbo

The real cost

The Deba

Round up ofte Cranfield’s top debate on long level term job creatio n Leadershi Mediation forp, People and Skills indust IT in manufac rial disputes turing CMMs and OEE softwa re reviewed

This is my last issue as editor, but I hand over to my eminently able colleague Jane Gray. Jane’s dad was an officer in the REMEs, so she should be an engineering expert, and she was editor of the Lean Management Journal. But you can’t get rid of me that easily, and I hope to visit your company or see at an industry event very soon. Keep making things and keep building UK industry.

Interview Graham Chisn

Managing direct all or, Aerospace Operations, and A|D|S

Manufacturing

in Action Factory of the Husqvarna Month -

In partnership

with:

Cover image: Skills provision must be far more demand-led

Will Stirling, Editor

The Manufacturer in partnership with EEF, the manufacturers’ organisation. Working together to secure the future of manufacturing. In order to receive your monthly copy of TheManufacturer kindly email c.woollard@sayonemedia.com, telephone 01603 671300 or write to the address below. Neither The Manufacturer or SayOne Media can accept responsibilty for omissions or errors. Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.

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Editor – Will Stirling

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George Archer

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News and features 04 News

Manufacturing news

10 Manufacturing appointments On the move

Find out who’s heading where in manufacturing

14 The big picture

Recognising when opportunity knocks

Dr Alan Cousens of the Institute for Manufacturing on how to recognise the X Factor

15 Economics

The true cost of renewable energy EEF’s Steve Radley questions the economic cost of the EU target of 15% energy from renewable sources by 2020

17 The legal low down

Acquire or consolidate Thomas Eggar LLP looks at the opportunities that exist to widen a company’s profile through acquisition

18 Lead story

Give me what I need

Skills provision in the north east of England is not fit for purpose, a Skills SubGroup of EEF’s Regional Council concludes. The model for its regional survey may be rolled out across the UK.

24 Regional Focus North East

Roberto Priolo discovers that research has provided manufacturers in the North East with a clear solution to critical issues for businesses

34 Interview

From anorak to campaigner With a 35-year engineering career, including as chief designer of aircraft programmes, and now influencing government policy via A|D|S, Graham Chisnall has fulfilled his boyhood dreams

40 Energy and Sustainable Manufacturing The real cost of carbon

As government has continued the staggered introduction of environmental regulations the strain on business is taking its toll

46 Lean Manufacturing Lean extremes

As with any management or improvement structure, focusing exclusively on lean techniques can be counter-effective

50 Leadership, People and Skills Strikes out

66 2

In the vast majority of cases disputes can be settled between employer and employee without the need for union intervention reports George Archer

54 JCB Academy Diary

Students Alice Trotman, Ella Pilsworth-Straw and Sarah Dorland share their views on life at the Rocester-based JCB Academy

Contents 55 Employee of the Month

82 Innovation, design and the product lifecycle

Carol Meddings, technical training leader at Power Panels Electrical Systems talks about her progression at the company

We have the technology

Jane Gray looks at latest advances in PLM – product lifecycle management – software and the capabilities of simulation

56 Finance, insurance and professional services Be safe not sorry with foreign exchange continuity

Dealing in foreign currencies can be fraught with danger if you play the markets by chance

63 EEF Insight

Agency Workers Regulations

Charlotte Hagestadt, principal advisor and solicitor at EEF, explains the primary issues presented by the Agency Workers Directive

UNIVERSITY SUPPLEMENT

66 IT in manufacturing A stitch in time

Better maintenance and better performance tracking can unlock the ‘hidden factory’, boosting reliability and output

IT News Keeping you abreast of what’s new in manufacturing IT

76 Supply chain, logistics and materials handling

Sustainability in the supply chain Richard Laverick of ADAS looks at the potential benefits of cascading sustainability down through the supply chain

Any attempt to make the UK globally competitive in manufacturing requires a renewed focus on the links between higher education institutions and industry. TM looks at some steps being taken to improve these links

Manufacturinginaction Sponsored by Applied Angle North East

106 Johnson Controls Seat of learning 112 Ford Aerospace Engineering the future

119 RailCare Train keeps a’ rollin 126 Stadco Pressing ahead 134 Senior Aerospace Aerospace seniority 142 Mitras ‘A’ Class strategy 146 Simmons UK Serious about sleep 149 Beagle Aerospace Composite capabilities 3

Newsinbrief SURVEY

Executive search consultancy Harvey Nash and The Manufacturer will run the 2011 Manufacturing Leadership survey, following the success of the debut survey last year. The 10-minute online survey, targeting senior manufacturing executives, covers employment trends, pay and rewards, job security and employment prospects, industry analysis and salary benchmarking information. Each respondent gets a copy of the report which provides up-to-date insight on job conditions, a valuable resource for the individual as well as manufacturing management. For more information, go to: www.harveynash.com/manufsurvey TRADE

Cogent, the UK skills council for the science-using industries, has announced further funding to support the training and development of 355 female employees across the UK Sector through its Women and Work programme. The Cogent SSC Women and Work programme is a successful and established initiative for the science-using industries to support the skills development of women, particularly into non-traditional technical roles. Where a skills gap or progression opportunity is identified among female staff, employers may be eligible for a maximum £600 grant (per person) for their development. SKILLS

UK manufacturers are being targeted by a high profile delegation from Latvia next month in a bid to help foster even closer ties between the two countries. The Baltic state will be on stands E4 and E45 at Subcon 2011 (7th-9th June) and is looking to attract local firms to meet with ten of its companies, including Dambis, Vikan Marketing, Nook Serviss, RD Alfa and Volburg. With input from the Manufacturing Advisory Service-West Midlands (MASWM), the link-up will explore mutual benefits of working together through supply chain development, collaborative R&D and, importantly, using Latvia as a potential gateway to the CIS block of countries.

STEEL

Carbon policy part-blamed for Tata restructure Tata Steel is to cut 1,500 jobs at two steel plants in the North East blaming the downturn in the construction industry and uncertainty caused by the introduction of green taxes. In a statement released on May 20, the company said it would close or mothball its Scunthorpe plant, putting 1,200 jobs at risk. A further 300 would be cut at the plant in Redcar, Teeside. Both plants make long steel products such as steel bar, rods and rails. “The continuing weakness in market conditions is one of the main reasons why we are setting out on this difficult course of The Tata Steel plant in Scunthorpe, Lincolnshire

action,” said Karl-Ulrich Köhler, chief executive of Tata Steel’s European operations. “Another is the regulatory outlook. EU carbon legislation threatens to impose huge additional costs on the steel industry. Besides, there remains a great deal of uncertainty about the level of further unilateral carbon cost rises that the UK Government is planning.” The firm said demand for structural steel in the UK was only two-thirds of the level seen in 2007 and “is not expected to fully recover within the next five years”. Despite the cuts, the firm also said it would invest £400m in its steel division over the next five years to help.

ENERGY

Manufacturers’ top concern is energy, IMechE says A recent survey conducted by the Institute of Mechanical Engineers has made it clear that the prime concern of UK manufacturers is the rising cost of energy. Energy costs are a bigger cause of unease than labour costs, falling consumer spend and the administrative burden of regulation, according to a new survey by the Institution of Mechanical Engineers. As the government continues to push its green agenda, rising environmental taxes are creating even more of a pressure on manufacturer’s ability to compete internationally. Institution of Mechanical Engineers president John Wood said: “The UK is showing clear international leadership by moving forward with its transition to a low carbon economy and this

is going to mean higher energy costs for everybody.” “Manufacturers are worried, and government needs to make sure it doesn’t force energy intensive industries out of the UK and into countries with more lax climate change targets. This is of benefit to neither the UK economy nor the environment,” he added. Of the 1,000 manufacturers polled 60% said that increasing energy costs were of “high concern” to their business, while 52.4% said the same about increasing cost of supplies and components, 43.2% on administrative burden or regulation and 35% said rising labour costs.

ManufacturingNews INNOVATION

Countdown to MACH 2012 After the success of Mach 2010 during which 20,000 visitors and 450 exhibitors flooded the NEC in Birmingham last summer, the Manufacturing Technologies Association (MTA) looks forward to hosting Mach 2012. Attending a lunch at the newly refurbished MTA headquarters in Bayswater, it was clear a number of things were on the agenda and worth getting excited about. The five-storey Victorian terraced building is situated in Central London with views over Hyde Park and is now complete. As the 100th anniversary of the event, MTA director general Graham Dewhurst seemed determined to make Mach 2012 the best and most successful yet, predicting an even bigger turnout than at the previous event. 50% of the available space at the 2012 event has been allocated, and the floor plans

for halls four and five have been drawn up, and are available at the Mach 2012 website. One of the focuses at the event is to be on the 2012 London Olympics, and Mr Dewhurst made it clear at the launch of the new building that the MTA will be looking at engineering and manufacturing innovations in the sports and leisure industry. “We want to bring a little part of the Olympics to Birmingham,” he said with a grin. “As always, the main focus is on ‘what’s new’, and we’re going to be looking at the future of manufacturing and the innovations that will take us forward over the next 100 years,” he added.

RESEARCH

UK and US collaboration proposed Prime Minister David Cameron and President Barack Obama have proposed a new relationship to strengthen collaboration between the UK and US in science and higher education. Image: UK and US governments have proposed a new relationship focussing on collaboration in science and higher education

The UK and the United States are to increase the links between their universities, including increased post-graduate student and researcher exchange programmes. Both countries will collaborate on a number of significant research projects and will embark together on an ambitious programme to create the world’s first combined space weather model. Universities and Science Minister David Willetts said: “Our

most productive science and higher education relationship is with the US and we are determined to strengthen it further. As globalisation gathers pace international cooperation in these areas has become even more important to boost Britain’s economic growth, and they are a key part of our overall relationship with the United States.” The joint statement agreed last month will lead to strengthened cooperation and new collaborative projects. It includes US company Johnson & Johnson and its company Janssen investing £5 million in a partnership with six leading British universities to undertake cutting edge neuroscience research.

Newsinbrief AUTOMOTIVE

At the eleventh annual emerging technologies showcase, Challenge Bibendum, the hosts Michelin committed to a greener future for mobility systems. The company also made the surprise announcement that it is currently working on fuel cell technology. Jean-Dominique Senard, a managing partner at Michelin said the leap into a new area for the company was consistent with its desire to “never hesitate to be at the forefront of technology that is moving our industry forward... We may not manufacture [the fuel cell]...but we must be involved in the development of the future of our industry.”

The SMMT has revealed the speakers for the low carbon vehicles session of its 2011 International Automotive Summit on June 28. At the Summit, to be held in Westminster, the technology-focused session titled ‘Moving towards an ultra-low carbon future’ will include presentations from internationally renowned experts in high-efficiency internal combustion, hybrid power, electric vehicles and lowenergy manufacture. The speakers include Constantinos Vafidis of Fiat Powertrain Research and Technology, Jon Goodman of Peugeot UK, and Peter Richings, Jaguar Land Rover’s chief engineer for hybrids. GAS

Durham-based GT Group has secured a £50m contract to supply Russia’s GAZ Group with a gas control systems for a new range of heavy duty diesel engines. The next five years is set to be characterised by serious growth for the GT group, widely considered to be leaders in their field. GT Group is contracted to manufacture and supply 100,000 of the gas control systems a year at full production to GAZ, and the contract is thought to help the North Eastern company, which currently employs 300 people. Geoff Turnbull, GT Group’s chairman, wants to achieve an ambitious growth programme of increasing its workforce to 500 by 2014.

Newsinbrief RENEWABLES

Renewable energy specialist EOS Energy has launched a new scheme where customers have access to free photovoltaic solar panel systems for their businesses. The company’s new scheme offers free fitting, maintenance and insurance of the roof top system, with the occupant receiving all electricity that the system generates free of charge for the 25 year period of operation. It includes roof rental, where suitable yields can be obtained. During the 25-year period the panels themselves will be owned by a green funding company, who will recoup their investment through payments generated from the feed in tariff.

With the help of Brabners and Reed Smith, Dutch wind turbine manufacturer Vestas has secured the lease of a site at the Port of Sheerness in Kent. Vestas has chosen the site as the base for a potential new manufacturing and assembly facility for the company’s new V164-7.0MW offshore wind turbine. The turbine will be the largest of its kind, with blades sweeping an area three times the size of Wembley Stadium’s football pitch. AUTOMOTIVE

MG Rover has announced that its new MG6 model, a two-door fastback, has receieved a better than expected public response since its launch in April. The release is the first of a range of new upcoming models to be assembled at the company’s Longbridge plant including a four-door saloon car. After a difficult six years since the company fell into administration in April 2005, the prosperity currently experienced by MG Rover comes as a relief for the company’s owners, China’s Shanghai Automotive Industry Corporation. FINANCE

Finance South East has awarded Ultramo two repayable awards totalling £60,000. The awards come on the back of an initial SEEDA grant for £88,740, which the company is using to develop a proof of concept for its ultra high-efficiency engine. The new funding has enabled Ultramo to work with innovation consultancy Pera to explore future market opportunities for its technology, which could prove to be the world’s most efficient engine.

AEROSPACE

BAE commences work on second carrier Construction of HMS Prince of Wales, the second of the two new Queen Elizabeth Class aircraft carriers for the Royal Navy, started last month at BAE Systems’ Govan shipyard on the Clyde. Employees and guests gathered at the shipyard as Secretary of State for Defence, Dr Liam Fox, was invited to press the button on the company’s plasma machine to cut the first steel for the vessel. Fox said: “We are committed to delivering this next generation of powerful British aircraft carriers that will mark a step change in our carrier strike capability and form the cornerstone of the Royal Navy’s Future Force 2020. This major construction project is creating and sustaining thousands of jobs in shipyards around the country.” BAE Systems is a member of the Aircraft Carrier Alliance, working in partnership with Babcock, Thales and the Ministry of Defence to deliver the biggest and most powerful surface

warships ever constructed in the UK. Sustaining thousands of skilled jobs throughout industry, work is well advanced with construction on the first of class HMS Queen Elizabeth underway at six shipyards across the country, including BAE Systems in Glasgow and Portsmouth, as well as Alliance partners at Appledore, Merseyside, Newcastle and Rosyth, where final assembly will take place.

BAE Systems beginning work on HMS Prince of Wales

AUTOMOTIVE

JLR records +£1bn profits Jaguar Land Rover has posted annual profits of more than £1bn, capping a remarkable turnaround for one of Britain’s most iconic manufacturers. The company reported that pretax profits had risen to £1.1bn in the year to March 31, up from £15m last year. The increase has been driven by a huge rise in Jaguar and Land Rover sales, particularly in China and other emerging markets. Indian based Tata bought JLR from Ford in 2008 for £1.1bn, but initially suffered heavy losses as the recession struck. However, it has overseen investment in new vehicles and facilities, including the Range Rover Evoque and Jaguar XJ, which have helped to drive

growth. JLR sales rose 26% in the year from 193,982 to 243,621 while sales in China rose by 43% to 29,600. JLR employs 17,000 staff in the UK but is looking to take on at least another 1,000, with Tata investing £1bn a year to expand production and develop new models. “Jaguar Land Rover is now a strong, profitable and innovative competitor in the premium car industry,” said CarlPeter Forster, chief executive of JLR’s parent company Tata Motors.

ManufacturingNews INVESTMENT

Government guarantees £3bn for Green Bank Further details of the government’s planned Green Investment Bank were unveiled last month including an initial £3bn funding. At the Climate Change Capital event in London last month, Mr Clegg talked about the workings of the world’s first Green Investment Bank, which will fill the gap between venture capital and the green economy. He said that the Bank will provide the finance for low carbon infrastructure, while laying the foundation for long-term, balanced growth in the UK. The government will bring forward legislation to ensure both

the operational independence and enduring nature of the Bank: “[The government is] determined this organisation will be part of the institutional architecture of this country. Legislation will ensure a long shelf-life,” said Mr Clegg. As well as establishing the bank, the government has announced a guaranteed £3bn for the initial capitalisation of the bank. The first investments from the bank will be made available from April 2012.

Green Investment Bank will fill gap between venture capital and green economy

Newsinbrief INNOVATION

Business Secretary Vince Cable announced the start of a competition to form an offshore renewable energy technology and innovation centre. The new centre will focus on technologies for offshore wind, wave and tidal power. The government has committed more than £200 million over the next four years to establish an elite network of at least six technology and innovation centres. The centres allow businesses to access equipment and expertise to help them commercialise new and emerging technology - and will help them capture a share of the global market. STEEL

An article in The Times newspaper in May reported that Tata’s boss Ratan Tata said British managers were “lazy”, in which he described how “nobody is willing to go the extra mile” at Jaguar Land Rover or Corus, two British firms which Tata bought in 2008 and 2006. According to a press statement, Tata Sons described the reports as “misleading and mischievous”, explaining that the interview in which Mr Tata spoke about the management ethos of Corus and Jaguar Land Rover was conducted “at the time of acquisition.” RISK

PHOTOGRAPHY

EEF launches new photo competition The 2011 photography competition run by manufacturers’ organisation EEF is open for entries! The public perception of manufacturing has not kept up with the high tech, highly skilled reality. Following the success of the 2010 competition, which received over 300 entries, EEF wants to attract bold, bright and myth-busting entries that reflect the inspiration and perspiration of the people, products and processes who capture the true spirit of manufacturing. The winner of each category will win £1,000 worth of Canon photographic equipment of their choice and a PIXMA printer. The runner up of each category will win £500 worth of Canon equipment of their choice and a PIXMA printer and all winners and runners-up will also receive 12 months membership of the Guild of Photographers worth £100. Winning entries will also be used in EEF’s PR and marketing work in nationwide locations.

Eversheds’ Industrial Engineering Group will host the third free webinar in its series looking at key issues facing manufacturers on June 22. The latest webinar will focus on threats and opportunities for insurance and risk management. It will be hosted by Jeremy Irving, John McGrath and Sahar Razi, leading lawyers from Eversheds insurance practice and will focus on whether corporate insurance buyers are getting the right deal from the UK market. For more information phone 0845 497 1990. MACHINE TOOLS

Unison, the Scarborough-based maker of allelectric tube bending machines, is celebrating a record business quarter. The company made six machine sales during the first quarter. Sales in the first quarter amounted to £1.5m, the company’s highest on record. “The surge in sales comes after the prolonged downturn due to the credit crunch, and is due in large part to the sustained marketing efforts we made throughout the period,” said Alan Pickering, Unison’s managing director.

Datesfor yourdiary June

The CBI is holding an energy conference at the Royal Society in London. For further information visit: www.energy2011.eventbrite.com

MAS South East is holding a Lean Facilitator Training course, in East Malling, Kent. For further information, contact Christine Whittaker on: 01256 741 034

EEF is holding Strategy for Sustainable Business Management and CSR workshop at Broomgrove in Sheffield. For further information and to book, call: 0845 293 9850

SayOne Media, publishers of Lean Management Journal, is holding the Lean Management Journal annual conference at the Hilton Metropole in Birmingham. For further information contact Jon Tudor at: j.tudor@sayonemedia.com

20-26

A|D|S is offering the chance to promote your company at the Paris Air Show. For further details on the opportunities offered, contact Gen Richards at: gen.richards@adsgroup.org.uk

27-29

MAS South East is holding the first part of a nine day 6 sigma Green Belt Course, which has been designed to enable a manufacturing business to apply 6 sigma. For further information, contact Christine Whittaker on: 01256 741034

The CBI and Management Today are holding a one day seminar, focusing on opportunities for growth within the UK economy. For further information visit: www.cbiandmtbusinesssummit.com

Cranfield University is holding an open day for prospective postgraduate students. For further information visit: www.cranfield.ac.uk/students/openday/page2312.html

29-30

Renewable UK is holding the tenth annual Offshore Wind conference at the ACC in Liverpool. For further information visit: www.renewable-uk.com/events/offshore-wind-conference

July

The Institute of Operations Management, in association with Amnis, is holding a master class focusing on successful running of various Lean events. For further information, contact Leonie Edwards on: 01536 740 105

Alumet, in association with EOS Energy, is holding an open day at their headquarters in Warwickshire showcasing their range of products with a range of exhibits and presentations. For further information, contact: emma.scull@alumet.co.uk

Sustainability at Siemens Earlier this month, the German electronics and electrical engineering giant Siemens AG released their Sustainability Report for 2010. The Manufacturer looks at some of the highlights. In the UK, Siemens has made a range of commitments in the past. These include a 15% reduction in CO2 emissions between 2008 and 2011, a 20% reduction in waste production between 2009-2011, a 20% increase in recycled waste 2009-2011, and a target of 1% of profit reinvested back into the local communities surrounding Siemens by 2012. Last year, Siemens IT Solutions achieved an outstanding score on the Corporate Assessment of Environmental, Social and Economic Responsibility, and Siemens plc was awarded the Carbon Trust Standard in June 2010. Focusing on energy, clean water, healthcare and sustainable urban development, one of Siemens’ projects in the UK is the Gunfleet Sands offshore wind farm – a source of renewable energy that has the potential to reduce the amount of CO2 released into the atmosphere by 400,000 tonnes a year. Siemens says in its report that the installed capacity of Siemens wind turbines in the UK exceeded 2,400 MW, dating to December 2010. The turbines are estimated to save 3.6 million tonnes of CO2 per year compared to fossil fuel power plants such as coal. Over the past three years Siemens has also tried its hand - arguably successfully - at providing clean transport for London with a hybrid-powered test fleet of traditional red London buses. The electric motor powering the buses is a BL5 type, which makes the buses more economical at the same time as making the engines a lot quieter compared to a conventional diesel bus. The hybrid engine produces up to 40% less CO2 emissions, and consumes around 30% less fuel. Siemens AG places emphasis on the fact that it is already addressing a Sustainable Urban Infrastructure approach with those in charge of transport and energy and security policy in London. Plans have either already been implemented or are in place to introduce charging stations for electric cars, toll collection systems across the capital, and a tracking system that monitors the London buses via satellite.

Image: Barbara Kux, member of managing board of Siemens AG and chief sustainability officer

Throughout July – EEF is holding workshops focusing on Agency Worker updates throughout the UK. For further information and to book, call: 0845 293 9850

SUSTAINABILITY

ManufacturingNews Advanced Manufacturing News

Hitachi rail event attended by aspiring suppliers More than 1,000 companies attended last month’s open day event for Hitachi Rail Europe’s Intercity Express Programme in the North East. The event featured speakers from local council, development companies as well as Agility Trains and Hitachi Rail Europe, who spoke publicly for the first time since the government gave the £4.5bn project the go-ahead in March. As the majority partner in Agility Trains, Hitachi is to invest in a new manufacturing facility at Amazon Park, Newton Aycliffe near Durham, creating hundreds of jobs and contributing millions of pounds to the local economy. Companies present at the open day learned about the future opportunities to supply components and services for the manufacture of Hitachi Rail Europe’s Super Express Train,

which will replace the UK’s ageing fleet of diesel Intercity 125s. Alistair Dormer, CEO of Agility Trains, said: “It’s great to see so many local firms interested in supplying to Hitachi Rail at this early stage in the project’s development. The local community in the North East has been instrumental in making IEP a reality, and we intend to use suppliers from this region whenever possible.”

A Hitachi ‘Javelin’ Train

Seeds of knowledge sown in Huddersfield The University of Huddersfield has been awarded £20m in funds for initiatives to turn R&D into business for the region, by improving their precision manufacturing capabilities. The new Enterprise and Innovation Centre (EIC) at the university is to be available to use for 100 small to medium sized businesses and corporates in May 2012, after agreeing to accept backing from the European Union and local government. As well as the new centre, £8m is being invested in an advanced research project for ultra-fine measurement. The university won funding for a five-year project backed by a group of 12 industrials, including RollsRoyce. Although the projects aren’t linked, the research will be shared with the EIC and could lead to spin-off companies being formed. The basis of the EIC is to build better links with businesses in the area and technical and research facilities on offer. The funding is coming from the European Regional Development Fund (£6.4m), managed in this region by Yorkshire Forward, Kirklees Council (£1.3m), and up to £3.8m from the university itself. One building on campus is to be completely renovated, with a large glass atrium being installed and a third floor added, creating space for an additional 100 firms and 300 people. There will also be an ‘innovation avenue’, a showroom of sorts where new ideas, equipment and technology are to be displayed alongside current research.

Newsinbrief FOOD AND DRINK

Food and Drink Federation president Jim Moseley has told food industry executives at a members’ dinner that he wants the government to show far greater ambition for the food manufacturing sector. The FDF annual president’s dinner was attended by over 200 parliamentarians, food manufacturing companies, media, education and science organisations. As it becomes clear that manufacturers are becoming ever more responsible for hauling the UK out of the recession, trade organisation representatives and companies argue that the government should pay greater attention to supporting growth in the sector. LEGAL

Two former managers at the Dutch electronics and hospital equipment manufacturer, Philips, are to stand trial for corruption in July, according to the national press in Holland. According to a whistleblower named Martin Kulig, he was made to deliver briefcases full of cash to hospital directors during a six-year period between 2000 and 2006. The managers are accused of paying a number of directors millions of Euros as kickbacks in return for the purchase of a large amount of Philips hospital equipment. HEAVY EQUIPMENT

Builder’s merchant Jewson has invested heavily in its tool hire business with a £5.5 million order for more than 450 JCB machines. Tool Hire, the rental division of Jewson, is buying a fleet of 300 JCB 8014 mini excavators, 100 JCB 8008 micro excavators, and 53 VMT160-80 vibratory tandem rollers. The company has also invested in 200 Thwaites mini dumpers in a deal worth an additional £2.2m. Jewson supplies a range of over 400,000 products and this year the company is celebrating 75-years of trading. RESEARCH AND DEVELOPMENT

The University of Huddersfield has been awarded £20m in funds for initiatives to turn R&D into business for the region, by improving their precision manufacturing capabilities. The new Enterprise and Innovation Centre (EIC) at the university is to be available to use for 100 small to medium sized businesses in May 2012, after agreeing backing from the European Union and local government. As well as the new centre, £8m is being invested in an advanced research project for ultra-fine measurement.

ManufacturingAppointments UK Appointments Nick Baird UK Trade & Investment

Foreign Secretary William Hague and Business Secretary Vince Cable announced the appointment of Nick Baird as the new chief executive of UK Trade & Investment (UKTI) earlier this month. Currently director-general Europe and globalisation at the Foreign Office, Baird’s appointment comes as the Department announces its

five year plan that will see UKTI adopt a more entrepreneurial approach to deliver growth.

Keith Williams Toyota Material Handling UK

Toyota Material Handling UK has announced the appointment of a previous Jaguar Land Rover employee Keith Williams as its new national parts manager. The role includes overall responsibility for managing the distribution of parts direct to

customers and to over 450 Toyota technicians in the UK.

Michael Allman Sean Blandford Arc Machines Inc (AMI)

World leader in automated orbital welding Arc Machines Inc (AMI) is further strengthening the service it provides clients in the UK and Ireland with new regional director Michael Allman. He bought in to build on AMI’s market-leading offer to existing

customers and develop new opportunities in key growth areas.

Edgar Rayner Tim Arbuthnot Theo Becker LTi Metaltech

Three new management appointments at Oxfordshire-based LTi Metaltech have given a boost to the company’s expansion plans. Edgar Rayner, Tim Arbuthnot and Theo Becker bring with them an in-depth knowledge of the precision engineering and high-tech manufacturing sectors.

Global testing group Exova has appointed a renowned expert in lean working practices to lead business improvement within its European aerospace division. David Brown joins as business improvement manager from a worldwide lean consultancy company where he assisted blue chip businesses including Mercedes Benz and Daimler. Prior to his consultancy role, Brown worked for Toyota where he became the first qualified master trainer (sensei) outside of Japan.

Dr Belinda Clarke joins the University of Cambridge’s ideaSpace Enterprise Accelerator (iEA) programme, which aims to support the early stage venture ecosystem throughout the east of England with a range of activities and projects.

Europe’s leading centre of excellence for food robotics and automation, CenFRA, has appointed a major figure in the food and drink industry to take over the reins as new managing director. Ian Nicholls has been involved in the food and drink sector for almost 40 years and is a highly sought after specialist consultant, bringing with him a wealth of experience in manufacturing, engineering and project management.

Baird has also worked as the Ambassador to Turkey and has extensive experience of working with both the European Union and emerging markets.

The Japanese car manufacturer hired Williams after his successes in improving the ability of past companies to deliver outstanding customer service.

Sean Blandford has, more recently, been appointed as general sales manager to lead sales activities for the UK market from the new site.

Rayner’s two-fold role as engineering manager will see him leading a team of engineers as new products are introduced and, at the same time, reviewing and streamlining existing manufacturing processes to improve efficiency and product quality.

Amarinth, a leading company specialising in the design, application and manufacture of centrifugal pumps and associated equipment to the industrial, chemical and petrochemical industries, has further strengthened its UK sales operation with the appointment of Harry Coldrey as UK OEM sales manager. Coldrey will be maintaining and developing the UK OEM business, working with existing customers, managing the sales cycles and opening up new opportunities for the company.

International Appointments Toyota Motor Corp. has appointed Shigeki Terashi, president of the Toyota Technical Center in Ann Arbor Michigan, as new president and chief operating officer of its U.S. manufacturing subsidiary, Toyota Motor Engineering & Manufacturing North America. Echotect BV has appointed international commissioning director John Flaye to oversee the design and installation of Echotect technology in manufacturing plants around the world. Flaye will be responsible for the delivery of these new plants and is working with a team of specialist designers to create the model for a series of factories, depending on the client’s exact requirements.

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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The big picture Recognising when opportunity knocks Dr Alan Cousens Institute for Manufacturing

Like most industries, manufacturing is always on the look out for the next big thing, but how to recognise which innovation, activity or prospect has the X Factor? Dr Alan Cousens of the Institute for Manufacturing might have the answer.

Manufacturing

has been described as the process of taking stuff and turning it into things. That’s a pretty prosaic explanation of an activity which is still the best avenue to achieve the goals laid out by the present government, these being the need for balanced, sustainable growth. It will be of no surprise to you reading this that Britain’s Got Talent. But rather than the ability to dance, juggle or deliver a punch line, I am talking about the UK’s science and technology research base. Manufacturing remains the best sector in our economy for developing trade, driving GDP growth and creating new jobs – not just for manual workers, also for skilled labour – for designers, scientists, engineers, managers. But unlike the TV show we can’t rely on David Hasselhoff to spot new trends and create new industrial stars. So how do we put in a place a system that enables us (the UK) to spot the moment that opportunity knocks? It tends to boil down to a series of, as Donald Rumsfeld so eloquently put it, ‘known knowns and known unknowns”. Let’s start with what we know. We know manufacturing is a series of interconnected activities, from R&D and Design, through supply management and production, to logistics and distribution, marketing and services. We also know manufacturing spurs innovation – not just shiny new products or technologies but also innovative new ways of doing things. Two examples are based here in Cambridge. ARM, one of the best British manufacturing success stories of the last 30 years, has pioneered Fabless manufacturing, and Abcam has found a new way to manufacture and sell antibodies. We know that when seeking new opportunities we need to consider all the stages of the manufacturing value chain, from the initial idea for a product – or indeed service – through design, production, distribution and sales, and finally disposal at the end if its useful life. Now we come to the ‘known unknowns’. We can see reasonably clearly when industries have emerged, but how do we spot one before it has? We need to answer this if we are going to help create sustainable new globally successful industries which will generate jobs. The IfM has been studying the process of emerging industries for some time. This work has helped develop ‘emergence maps’, visual aids which help to chart key interactions which can impact on the trajectory of emergence. It’s also assisting our understanding of how to support and accelerate emerging industries. We know it’s not a linear process. In emerging industries it’s more like a spiral, and a spiral that recognises not just

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

technology but the other conditions which need to be aligned if an industry is to emerge. This is important, if we can recognise these patterns, we may be able to hasten development of new industries which could have lasting significant, positive, implications for our economy. This is where academia enters the picture. Understanding how new industries emerge requires an understanding of economics, geo-politics, culture, finance, markets, products and manufacturing. It is a multidisciplinary challenge. There is now a wide recognition that some of the most intractable problems are best addressed by multiple disciplines working together. Research into manufacturing is no longer just a job for scientists and engineers; we will need a new generation of researchers and industrialists to take on these new challenges. The term Industrial Architects has been coined to describe them. We already have architects in construction and software – it’s time that we had similar roles within industry and manufacturing. We need to start putting systems in place which can help evaluate the skills needed to grow these new professionals. Dr Alan Cousens is an Industrial Fellow with The Institute for Manufacturing

Economics The true cost of renewable energy Steve Radley, Director of Policy, EEF

Recently,

we have seen much activity by the government to deliver its promise to be the greenest government ever. It has agreed recommendations from the Committee on Climate Change (CCC) on a target for reducing carbon emissions by 50% over their 1990 level for its fourth carbon budget, covering the 2023-2027 period. It has set out the remit for the Green Investment Bank. It has committed to a package to compensate energy-intensive industries for the loss of competitiveness associated with Britain moving ahead of the rest of Europe on carbon budgets and to review its position by 2014 if the rest of Europe isn’t following our lead. EEF will lobby hard to ensure that the government delivers on this commitment. However, this still leaves two key issues to address – whether the government has got to grips with trade-offs between promoting economic growth and greening our economy, and whether it is pursuing the most cost effective approach to addressing climate change. Our analysis suggests the price tag for curbing carbon emissions is higher than necessary and is weakening our competitiveness and ability to grow the economy. One particular issue stands out – whether pursuing the 2020 renewable target is the best way to cut carbon dioxide emissions. Currently 3% of the UK’s energy comes from renewables, with the previous government agreeing an EU target to raise this to 15% by 2020. Renewables will play an increasing role in our low carbon energy mix but, is the current target achievable without inflicting significant costs on our economy and, should we have a target at all? In essence, should the government intervene and decide what our future energy mix looks like? A report by the CCC does not answer these questions directly but sheds new light on them. There is a range of options beyond renewable energy to cut emissions. These include nuclear power, capturing and storing emissions from fossil fuel-based power generation, a plethora of energy efficiency options in industry, offices and housing and greater use of public transport. Yet, few dare broach the question of whether we should be putting so many eggs in one basket. Perhaps it would be better to have ambitious emission targets (which we do), strong incentives to invest in low carbon energy (which we do) and let the market select the best mix of technologies?

As the government ramps up climate change commitments, EEF’s Steve Radley questions the economic cost of the EU target of 15% energy from renewable sources by 2020. Money blowing in the wind

There is a very good reason to question the wisdom of the 2020 renewables target – cost. A key finding of the CCC report is that the majority of renewable energy technologies are likely to remain considerably more expensive than alternative forms of low carbon power generation. It predicts that in 2020 offshore wind, the technology many are pinning their hopes on to deliver the lion’s share of the renewables target, will still be 60% more expensive than new nuclear power stations and as much as 20% more expensive even than carbon capture and storage. The cost picture for earlier stage technologies like wave and tidal power is even less encouraging. Should we push so far and so fast with renewable energy? The potential consequences of avoiding the cost issue are significant. We risk piling unnecessary

There are two key issues: whether the government has got to grips with trade-offs between promoting economic growth and greening our economy, and whether it is pursuing the most cost-effective approach to addressing climate change costs on hard-pressed consumers and undermining the competitiveness for no environmental gain. More dangerously, we could weaken the widespread support for addressing climate change which currently exists. The previous government committed the UK to the 2020 renewable energy target without consideration of the alternatives. The CCC’s report provides the Coalition with the perfect opportunity for an investigation of whether this is appropriate. It is vital to take this opportunity as part of a wider review of whether the approach to climate change complements or compromises growth. With energy prices likely to remain high for some time, competitive energy prices are important to a range of manufacturers, not just those in energyintensive industries like steel. Failure to address this issue risks undermining much of the good work the government is doing to promote a stronger and more balanced economy.

For more detailed analysis of the proposed carbon laws, turn to p40

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Thelegallowdown Acquire or consolidate

Now is the time

While

the UK manufacturing train gathers momentum, it may now be time to consider adding to your corporate profile. The May 2011 CBI Industrial Trends Survey provided further evidence of solid growth expected in the forthcoming quarter with a resurgence in demand restoring confidence in the sector. Order books and export orders continue to remain above their long-run averages. Add to that the additional prospects arising from the government’s “Plan for Growth”, which will see some fantastic plans implemented in relation to advanced manufacturing, including the launch of nine university-based centres for innovative manufacturing in 2012 and a £75 million programme of support to allow smaller manufacturers to access advanced and higher-level apprenticeships, to name but a few. Manufacturing in the UK is now starting to use the current economic instability of otherwise strong performers in the sector to its advantage. China’s growth in the manufacturing sector during January and February 2011 was not as prosperous as previous months due, not least, to rising commodity prices and a hike in interest rates. Japan’s falling inventory and supply chain issues have also led to a decreased level of stocks.

Growth by acquisition For companies that are cash-rich, there is a fantastic opportunity to look at some of your competitors or other like-minded companies to see if an acquisition or two could further increase your commercial bargaining power. Perhaps adding a further division to your existing business could help to strengthen your brand’s offering in the wider market? A shortage in skilled workers within the manufacturing sector is also a real problem which could be partially solved as a result of acquiring a solid company or business with good, knowledgeable employees within the same sub-sector.

Consolidate to save Where cost savings are part of your strategy and the squeeze on margins is proving to be too much, consolidation may be the way forward. Consolidation continues to be extremely prevalent in the manufacturing sector and is, for the most part, borne out of changing conditions in the market place and a growing amount of competition within the same space. Inflationary pressures will also continue to cause concern in the long-term. In order for a fast-paced manufacturing business to remain competitive on a long-term basis, savings have to be generated to use as a source for further re-investment. Processes and the workforce are streamlined and business models are re-assessed to make them more flexible in a highly competitive climate. A rigid business practice that does not move with the times will find it very difficult to contend with those that regularly take stock of their business processes and procedures. The important buzz words here are “growth capital”. Shareholders will often lack either the resources or the ambition to see the company or a project through to the next level, whereas new blood and additional funds will boost a company’s balance sheet in order to produce products or systems which will see the company maintain its competitive edge. A word of caution though and a thought spared for the highly skilled workforce which may be lost during the consolidation process. It is, of course, possible that some former employees may be approached to join competitors. It is important to ensure throughout that restrictive covenants and confidentiality clauses are set out in the employees’ contracts of employment to stand a chance of retaining the know-how and confidential information gained during an employee’s time in such an organisation, otherwise the competitive advantage could follow them!

For more details contact: Hayley Bevis, solicitor and member of the firm’s manufacturing team at: hayley.bevis@thomaseggar.com or: 0870 160 1300

Panellists from government, EU Skills, Semta, Siemens, Contitech Beattie and EEF at the EEF Manufacturing Skills Summit in May

Give me what I need Employers unite to expose flaws in skills provision landscape Demand-led provision of skills for manufacturers and engineers doesn’t sound like a difficult ambition to achieve. But a group of employers in north east England has proved, by surveying their regional peers, this is more ideology than reality. Will Stirling discovers that the research has provided them with a clear route to resolving some business critical issues.

Frustrated

with the complexity of the current skills and funding landscape, in January 2010 the EEF North East Regional Council formed a 12-strong sub-skills group to find out whether employers’ real skills needs are being delivered. The group spanned companies from Siemens to SMEs like Contitech Beattie and Metal Spinners Group, all of whom have a special interest in the skills and development agenda at regional and national level. The survey pooled the views of 146 manufacturing and engineering employers in the region, asking them directly which jobs they struggle to recruit and how they go about funding new jobs such as apprenticeships. The results were revealed at the EEF Skills Summit at Newcastle’s St James’s Park on May 12.

The three initial reasons for establishing a group to focus on skills were to:

1 2 3

Endeavour to identify and address some of the known skills issues. Support new job creation and replacement demand within the North East economy. Suggest policy and other practical interventions to stimulate and encourage employer demand.

The survey report says that “[EEF] members continue to be frustrated with the complexity of the current skills and funding landscape with which they are expected to engage. While there is widespread concern about the system as a whole, most Sector Skills Councils were singled out for specific criticism.”

Leadstory

The need for demand-led system of skills provision

Survey rationale Problem areas

Five particular problem areas were identified (some will be all too familiar with readers):The promotion of engineering and science within schools to provide the pipeline through to craft and technician apprenticeships. School leavers in the region lack interest in manufacturing, some even lack basic and personal skills. There is also a lack of systematic engagement with schools from employers – more must be done with relevant support. Apprentices and technicians – identified as a high priority. Diminishing finances [funding bodies] and little vocational emphasis are endangering this vital feed-stock to industry. Programme-led apprenticeships were successful but no funding was available. Upskilling, re-skilling and growing new skills in-house through the apprenticeship route have become increasingly important for manufacturers. Adult apprenticeships are popular but lack the necessary funding. Management development – Enhancing leadership and management competency is vital, but no support is available, for example, from Business Link. Managing dispersed supply networks and customer bases together with increased focus on innovation, product and process requires not just technical skills, but also leadership, project management, design skills and more. Talent needs to be nurtured at all levels.

1 2

Respondents to the EEF online survey on skills rely on funding from the RDA and Business Link agencies, which are under pressure to close

If you do engage with agencies, which are they?:

One North East 34% Skills Funding Agency 8% BENE 5% Business Link 19% Sector Skills Council 3% Training Provider 23% Other 8%

The skills system is overly complex and bureaucratic. Funding is bound by excessive form filling – particularly for assistance from the European Regional Development Fund, as an example. The need to de-couple funding from accreditation against the national programme outcomes and assess more against industry, sector and infrastructure requirements.

Survey results Summary

The majority of the respondents (57%) were Tyne and Wearbased. Companies in Durham, Teeside and Northumberland made up the balance. Most employers surveyed had 100 or more employees. Only 51% of businesses surveyed could be classed as local, the other half were less likely to be eligible for funding (for meeting the SME criteria) as they are either part of a larger company or part of an overseas owned business. 65% of companies engage with government agencies but of these only 40% received grant assistance. 60% did not receive support, possibly due to ineligibility issues and reflected in the fact that only half the companies surveyed could be classed as local SMEs. Could the eligibility criteria could be relaxed?

A large local company of civil project managers with over 600 employees has assessed that only 5% are equipped with all the skills needed for future work

A plethora of funding agencies are approached for help. One North East, the Regional Development Agency (RDA), has the highest level of individual approaches at 34%. The RDA & Business Link accounted for nearly 60% of all approaches and these organisations are either to be wound-up or under review for termination. A key question is what will replace them and how will they engage in supporting manufacturing industry in the UK and more specifically in the North East region? 58% of companies have apprentices. This is encouraging and there appears to be a similar appetite to invest in apprentices through 2011. 44% of apprenticeship programmes are delivered by a training provider. Only 26% of the programme come from an in-house company scheme. In addition, the survey found that: [Aggregate data shows that] the ability to recruit skilled tradespeople and project managers will affect nearly half of the membership companies within three years. Specific skills shortage issues with tradespeople are expected to affect more of the membership in three years time – notably welding, fabrication, CNC and electrical skills.

Only 4% of respondents who expect to have recruitment issues are not currently running an apprenticeship scheme = the vast majority are still expecting recruitment problems despite this. Project manager demand will increase among the membership and recruitment problems are expected. Anecdotally, a large company of civil project managers with over 600 employees has assessed that only 5% are equipped with all the skills needed for future work. These changes are expected within three years despite running many training programmes and increasing the numbers of engineers coming through universities.

Propositions

Report for the North East Regional Council on Manufacturing and Engineering Skills The report makes these general proposals, and a list of 22 specific propositions to answer the problems identified in the survey. The list is available in the full Report for the North East Regional Council on

Manufacturing and Engineering Skills, available from Tony Sarginson at EEF North East, email: tsarginson@eef.org.uk. The report’s overall point is that new models of co-operation are needed between industry, government and education establishments to transform the ‘skills landscape’ in support of economic prosperity based on wealth-creating products, infrastructure and services. EEF, the report says, is in a unique position not only to provide the ‘employer voice ‘ but to actively promote new partnership models with member support. The national voice needs strong regional input based on the foundation of employers speaking from a common agenda as exemplified by the senior business people attending our regional meetings. The sub-group says now is the time to push at the ‘open door’ of Government at a time when government is looking for solutions to today’s skills issues.

Members of the Regional Skills Sub-Group respond: Peter Bernard, Group Managing Director, Responsive Engineering “The survey has raised the profile of the major skills shortage that exists in manufacturing engineering that has been felt by many companies for years. It also raises serious concerns about the number of skilled people who will be retiring from the industry in coming years. Manufacturing is seen as a key element of our recovery and with the increasing emergence of global supply chain issues, it is absolutely crucial that UK manufacturing is put firmly back on its feet after years of disinterest. We are doing our bit in the Responsive Engineering Group and investing heavily (£4m) in new facilities and high tech equipment. However, without the skilled people to get the best out of our investments we are wasting both our time and money! The government is slowly cottoning on to the problem but instead of reducing funds for engineering apprentice training, they should be increasing it and getting on with it quickly.”

Geoff Ford, Chairman, Ford Aerospace “The survey findings give us a very clear steer as to where we need to concentrate our efforts and the messages we need to send to our workforces in the future, irrespective of age. Primary school students are most certainly not too young to be made aware of the myriad opportunities which exist in manufacturing and, especially, engineering. Firstly we need to address how we attract people, mostly young people, into engineering because I feel we have an image problem which we must overcome. In a recent straw poll of the public, when asked to identify who they regarded as being an engineer, the majority named an actor who plays the role of a motor mechanic in Coronation Street! A further problem exists in that more than 50% of UK engineering graduates end-up working in finance because they are headhunted for their intellect, rather than their engineering skills.”

The sell-out summit in Newcastle was a lively, high quality debate, marred by the late cancellation of John Hayes, Minister of State for Further Education, Skills and Lifelong Learning, who sent a video message in his place. EEF intends to duplicate the model in other UK regions, to gather intelligence from employers on real skills needs which they intend to feed to the strategic partners like Semta to shape skills provision more effectively. More comment on the summit can be found at www.manufacturer.com.

Lead story The National Manufacturing Debate 2011

Long term job creation and regional balance

On finance Preliminary thoughts focused on the financial environment for manufacturers in the UK. Debunking the myth that investment activity in British firms is slow due to reluctance to lend on the part of banks, a surprising two thirds of the audience voted to express that they had investment plans which would be funded through company revenues or those of parent organisations.

Business Minister Mark Prisk MP, speaking at the National Manufacturing Debate

On further exploration it was discovered that most attending manufacturers were discouraged from approaching banks, regardless of their willingness to lend, due to the high cost of borrowing and the administrative hoops they would be required to jump through. In addition a feeling of mistrust among SME manufacturers of centralised banking administration was vocalised. There was a consensus that the days of localised knowledge in banks, where local managers were familiar with business owners, business performance and the importance of individual businesses to the local economy, needed to be restored.

On Wednesday May 25, Cranfield University hosted its second National Manufacturing Debate drawing together academics and professionals from across a variety of different manufacturing sectors to discuss the most pressing challenges and greatest areas of potential for manufacturers in the UK

After

a morning of presentations from some of the UK’s leading manufacturing cognoscenti, delegates at this important event seized the opportunity to put forward their own views and experiences on the climate for manufacturing in Britain. The motion, which acted as a springboard for the afternoon’s discussion, asked “Can the manufacturing sector create a significant number of long term jobs and a regional balance?” The debate was led by a panel of experts including: Professor Sir Mike Gregory, head of the Institute for Manufacturing, Cambridge University; Sir Alan Rudge CBE, chairman of the ERA Foundation; Philip Greenish CBE, chief executive of The Royal Academy of Engineering; Andreas Pelz, global chief of service engineering at Rolls-Royce and Dr Gareth Williams, vice president R&T business development and partnerships for Airbus. This short article only scratches the surface of the issues discussed at the National Manufacturing Debate 2011. A full report of the debate will be published in July and will be circulated to TM subscribers. TM interviewed by video Business Minister Mark Prisk MP, head of manufacturing at Cranfield University Prof. Raj Roy and other panellists, see www.themanufacturer.com

Contributions from an audience profile ranging through manufacturing business owners to engineering students were lively and often impassioned. A perceived lack of esteem for the engineering profession and lack of understanding among the general public for the diverse opportunities available through a career in manufacturing, stirred up particularly strong emotions. It is a shame such testaments to the prospects for travel and the intellectual challenges inherent in manufacturing careers seem to be forever incubated in intra-community events such as this.

On skills Bringing the afternoon’s discourse to a close the final topic of discussion focused on skills for manufacturing in the UK. Several potent points were made on this issue. Sir Alan Rudge responded to assertions that the UK’s global competitive position could be saved through the protection IP with the comment: “We cannot assume we are superior in inventiveness.” Given that China is far outstripping the UK in terms of patent filings and engineering graduates year on year Sir Alan’s words should be taken as discerning warning to manufacturers not to rest on their laurels. In this context it was highlighted by one of Cranfield’s foreign PhD students, Mohammed Badawy that the UK is limiting its ability to harness all of the knowledge and expertise it turns out of its universities due to a regulatory and cultural environment that makes it difficult for foreign students to find work with British companies, particularly SMEs.

Have your say at www.themanufacturer.com

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North East Manufacturing At a glance Manufacturing constitutes 19% of the North East’s economy, which compares to a national average of 12.4%. Manufacturing accounts for around 150,000 jobs in the region, some 14% of the regional workforce (10.1% nationally). Total investment in research and development within manufacturing in the North East is half the national rate (Source: One North East).

The North East has discovered the power of reinvention, turning its attention to new, innovative sectors with a particular focus on sustainability. In order to tap into their potential, however, the region needs to fill its wide skills gap. Will Stirling and Roberto Priolo investigate.

Exports of physical goods in the region exceed imports by over 30%. 58% of the UK’s chemical processing industry is in the North East. The chemicals, chemical products and man-made fibres industry produced 22% of the total GVA of the manufacturing industries in the region in 2007. The healthcare and life sciences sector has an annual turnover of more than £4bn and employs over 170,000 people within the region.

Manufacturing is the most important part of our economy, and our products are very successful. Our diversified economy makes us more resilient, as we don’t depend on a few key sectors anymore Tony Sarginson, North East Region Head of External Affairs, EEF

Cathedral of dreams: St James’ Park is an iconic building in the North East, courtesy of EG Focus from flickr

RegionalFocus North East

Things

are changing for manufacturing in the North East of England. What once was a hub for heavy industry is quickly turning into a forge of innovative technologies, with an increasing focus on carbon reduction. These changes have never been more evident than today, with traditional sectors losing ground and new industries attracting investment and gaining momentum. Ship building and coal mining have left the North East, and steel production is decreasing. Renewables and technology-intensive industries are emerging as new grounds on which to build future growth. Tony Sarginson, EEF’s head of external affairs in the North East, says: “The jobs we lost in the more traditional sectors we made up for with jobs in emerging industries.” A sign of the evolving structure of the local economy is perhaps the situation of the steel industry. In May Tata Steel annouced it might axe up to 1,500 jobs in the North East following a slump in sales.

The North East continues to be at the forefront of engineering innovation in the UK, developing cost effective solutions with the potential to deliver benefits to global markets Tom Wilkinson, Chairman, IIT According to Tata Group, demand for structural steel in the UK is two-thirds of the 2007 level and this will not change over the next five years. The company will therefore concentrate on products that create value, and this strategy “includes a proposal to close or mothball parts of the Scunthorpe plant and puts at risk 1,200 jobs at Scunthorpe and 300 jobs at its Teesside sites”, according to a company spokesperson. Things got worse when Indian tycoon Ratan Tata was quoted by The Times newspaper as saying that his British staff are lazy. His denied the allegation, explaining how he was voluntarily misinterpreted and he was actually talking about management practice before he took over Corus and Jaguar Land Rover. Debate aside, this is bad news for the region, with Teesside constantly seeing its jobless count rise. The Northern Echo reported that Thai steel giant SSI, which acquired Tata’s plant in Redcar in March and is now in the process of hiring 800 steelworkers, is likely to receive several applications from workers facing the cuts Tata Steel has announced.

Tharsus-built advertising units and shopping centre wayfinders being tested

One to watch: Tharsus

ounded in 1964, Tharsus is a North East born and bred company that has transformed itself from a sheet metal fabricator to a highly specialised designer and manufacturer of complex electro-mechanical products. The business was recently awarded a grant of almost £700,000 as part of the Regional Growth Fund which will be used to continue its rapid expansion plans. Over £1m was recently invested in a new 31,000 square foot site which will house the assembly of Tharsus’ fully finished products and new high tech machinery. The company employs 100 people across its headquarters at Hebburn and its Blyth plant; the third site will be open later this year. Managing director Brian Palmer said: “The new factory will further enhance our ability to work with clients who need a new product developed and manufactured in the most efficient and cost effective manner. Further expansion on the site in the future will allow us to deliver even larger more complex orders and of course create new jobs in the process.”

Brian Palmer of Tharsus and Neville Bearpark of accountancy firm ‘unw’ at new company premises

Siemens Wind Power Training Facility

ased at Siemens Integrated Energy Service Training Centre at Shields Road in Newcastle, the wind power training facility was established in 2009 to meet the growing

Siemens has about 7,000 wind turbines installed in the UK

A change is necessary, and many sectors, even the most ‘old-fashioned’, understand this. Even automotive and oil and gas, which are still strong in the region, are transforming themselves into highly innovative industries: car companies like Nissan are looking at developing

needs of the renewables sector for skilled wind power service technicians. The centre expects to train over 1,000 technicians in 2012 (570 in 2011) and along with the company’s decision to build a wind turbine assembly plant in Hull, it is the strongest evidence of the UK’s conviction for a wind power industry. The centre trains Siemens and third party companies to maintain and repair wind turbine nacelles up to 3.6MW using a 2.3MW nacelle, currently Siemens’ largest turbine. By spring 2012, it will have a 3.6MW training nacelle installed, the next step towards training on the gigantic next generation 6 MW nacelles – these turbines stand up to 120m. The centre currently uses two training towers of 10m and 16m.

Training includes technical product training and health and safety training as part of Siemens’ zero harm safety policy. As well as repair and overhaul, safety is a very large component of the training. A five-day Advanced Rescue course trains technicians to evacuate injured personnel from awkward and difficult to access areas of a wind turbine in the event of injury or illness. The facility is used by Siemens’ technical partners including universities and the plan is to make it available for training by electricity utilities. Throughput of technicians trained to the Level 1 competence, specified by Siemens in Denmark, is about 12 per month. The centre will provide training for all Siemens Wind Power workforce – a round the clock service given that the company has about 7,000 turbines installed onshore and offshore in the UK to date.

ultra low carbon vehicles, while the subsea sector is turning to more sophisticated, safer equipment now that more expensive forms of extraction are considered viable options and the oil fields in the North Sea are becoming desirable. The North East, where manufacturing accounts for 19% of the economy (compared to 12% nationally), is a net exporter of manufactured goods. Sarginson confirms: “Manufacturing is the most important part of our economy, and our products are very successful. Our diversified economy makes us more resilient, as we don’t depend on a few key sectors anymore.”

Regional focus North East

Several companies are making innovation their leitmotiv, and this is starting to reflect on the image of the region as a whole, which is more and more perceived as a stronghold for what’s new in engineering and technology. Commenting on the latest product the company launched (see box), IIT’s chairman Tom Wilkinson says: “The North East continues to be at the forefront of engineering innovation in the UK, developing cost effective solutions with the potential to deliver benefits to global markets.”

Revolutionising automotive and engineering One in three cars produced in the UK in 2010 came out of Nissan’s Sunderland plant, the biggest car plant in the nation, employing almost 5,000 people. From 2013 the facility will also produce the revolutionary 100% electric car, LEAF. In addition, construction work is progressing well on a new battery plant in Sunderland, which will produce lithium-ion batteries for the Nissan LEAF. The successful performance of Nissan Motor Manufacturing UK is reflecting on the local supply chain. Parts supplier R-Tek, for example, saw sales increase by 35% to £64m last year and its workforce grow by 10% to 336 people. Traditional sectors (which include companies like Rolls-Royce, Caterpillar, Astrum and Cummins) are going through deep changes to respond to new market conditions in the area, and this is probably part of the overall transformation the North East is experiencing. Others are trying to do the same. In the North East, defence giant BAE Systems manufactures armoured combat vehicles for the British Army. The company is gradually reducing its workforce at the Newcastle site in a bid to reduce costs. The contract with the Army expires in 2013. Mike Sweeney, L&A Global Combat Systems at BAE Systems, says: “We are not sure about the future of the Newcastle plant, but it looks likely that it will close. When the contract expires, there isn’t going to be any demand for these vehicles in the UK.” Support operations would be moved to the company’s Telford site. But BAE is not leaving the North East altogether. Investment is being channelled in the construction of a modern, highly-automated, energy-efficient facility for the production of munitions at Washington. This will house workers who are currently employed in BAE Systems’ vintage shell factory in Birtley.

Process manufacturing, the Northern star The process and chemical industries form the most extensive manufacturing sector of North East England, representing more than 1,400 companies, employing around 190,000 and generating over £26bn in annual sales. The North East of England Process Industry Cluster (NEPIC) is owned by its member companies and represents over 500 businesses in the process industry

Key people Phil Kite, managing director at Astrum and chairman of EEF North East Regional Council Phil Kite FCA was elected regional chair for EEF North East in 2009. He is the managing director of Astrum, a leading designer and manufacturer of track systems and running gear for armoured fighting vehicles, in Stanhope, Co Durham. Astrum also supplies to companies in the earthmoving and general engineering markets. From 2000 to 2006 he was a board director of the William Cook Group with operational responsibility for the Global Defence Sales and Group Health & Safety. In 2006, he led the MBO of the Group’s defence business and the company was renamed Astrum (UK) Ltd. Tony Sarginson, North East Region head of external affairs, EEF Tony Sarginson is head of external affairs for EEF in the North East, which provides professional services to around 600 engineering and manufacturing companies in the region. He supports the EEF Regional Council, is EEF’s regional spokesperson and works closely with regional media. Tony represents business on the European Programme Evaluation Group, the regional STEM Board and is a member of the Manufacturing Advisory Steering Group in the region. Previously Tony worked for BT for 35 years and was the BT regional manager for the North East. He has served on the board of the Government Office (NE) as a non-exec director and four years on the board of NEXUS. The biggest names in the chemical and process industries are present here, from Saudi giant Sabic UK Petrochemicals to global chemical processor Dow, from bio-diesel producer Petroplus, the largest independent refiner and wholesaler of petroleum products, to Ensus, which operates one of the world’s largest cereal grain biorefineries in Wilton. Each year, Ensus refines locally grown wheat to produce over 400 million litres of bioethanol, 350 thousand tonnes of high protein animal feed, and 300 thousand tonnes of carbon dioxide for use in soft drinks and food production. Another big player in the process manufacturing sector in the region is the pharmaceutical industry, with Glaxo SmithKline, Procter and Gamble, Sanofi-Aventis and SSL International all running operations here. A third of all the UK’s pharmaceutical production is located in the North East. Finally, the food and drink sector is another important asset to the region: Greggs, Findus, Nestle and Marlow Foods are some of the companies that chose the North East for their sites.

Regional focus North East

Renewables: the future of the region? Power is a big concern for many companies in the North East, especially for the most energy-intensive ones. They were the first to complain when the government presented the 2011 Budget, the measures of which, they feared would push their energy costs too high. Carbon-cutting policies further penalise CO2 emitters and tax the oil industry, which invests extensively in the North Sea; therefore, the North East of England. These sectors warned that the measures could cost the region hundreds of jobs and millions of pounds. It’s no surprise, then, to see how much emphasis is put on renewable energy in the North East, where companies like Clipper Windpower operate. A US-based wind business that was recently acquired by United Technologies Corporation, Clipper Windpower will build turbines for offshore wind farms. There are several projects that would make the Teesside area in particular a hub for green energy: Sembcorp and waste management firm SITA UK announced a £200 million waste-to-energy facility at Wilton, while MGT will build a 300MW biomass power station, the Tees Renewable Energy Plant, that will burn woodchip and generate electricity for 600,000 homes. PYReco will have Europe’s first large scale tyre pyrolysis plant fully operational by the end of the year, on Teesside. The company received £2m from the £60m Tees Valley Industrial Programme (TVIP); it will initially process 60,000 tonnes of tyres per year, reaching 360,000 tonnes once at full capacity. Thanks to the pyrolysis technique, PYReco will turn tyres into high tensile steel, diesel oil, carbon black and syngas without creating waste and achieving 100% reuse of the material.

Don’t miss out on the Manufacturing Forum Manufacturing companies in South Tyneside who want to keep a finger on the business pulse are being encouraged to join the South Tyneside Manufacturing Forum, as a way of ensuring they are not missing out on new developments in the region. Set up in 2007, the South Tyneside Manufacturing Forum offers members a wide range of business advice and signposting services. This vital framework of support also extends to monthly meetings on a range of topics, where members can network and exchange best practice in a climate of trust. Forum manager, John Wood said “We ensure our meetings provide real benefits and look for speakers who can offer genuine and relevant business opportunities and information to our members.” Over the past three years the forum has grown steadily in size and reputation and now represents most sectors of manufacturing with large, medium and smaller employers all working together. “We are continually looking to expand the Forum, therefore over the coming months we would like to offer manufacturing companies who have not attended one of our events the opportunity to come along and find out how we can support them,” said John. The Manufacturing Forum encourages collaborative working with membership open to non-manufacturing companies who can bring added value, knowledge and expertise to other members. It has also forged strong alliances with local education and training organisations, to promote manufacturing as a worthwhile career and encourage manufacturing companies to offer job opportunities to apprentices. For more information on the South Tyneside Manufacturing Forum please visit www.st-mf.co.uk. To find out more about membership services, please contact forum manager, John Wood on 0191427 2324 or by emailing john.wood@st-mf.co.uk Made in South Tyneside Leather tablemats & coasters supplied to Marco Pierre White’s restaurants 3,300 wax jackets per week 40 tonnes of pork products in a week Precision components made for every helicopter gear box made in the UK this century Black Jack gaming tables used in Las Vegas 70,000 sunscreens exported to 56 countries Personal health records for every newborn child born in the UK Half of all electronic signs on the motorways and trunk network in Britain World’s leading independent cigarette filter manufacturer

A matter of skills Manufacturing in the North East has to cope with an ageing, lowskilled workforce: about 40% of staff are in low-skilled operator roles. According to a recent EEF survey on skills in North East England (see our lead story for details), over two-thirds of employers in the region need their staff to acquire new skills, both engineering and management ones, within the next year.

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Regional focus North East

One to watch: IIT

ateshead-based International Innovative Technologies (IIT) is a North East success story. A specialist in the design, precision engineering and manufacture of high output mills, classifiers and cyclones, the company has recently pioneered new technology for the grinding of bulk raw materials into fine powders. The m-series is thought to have the potential to bring significant cost and production benefits for a wide range of global industries. The new vertical milling system combines low energy consumption with a compact size to provide a highly efficient and versatile grinding system for a wide range of minerals processing applications. It can also convert what might currently be regarded as waste material into a commercial product. The machines are suitable for the milling of a wide range of natural raw materials and other industrial products. Tom Wilkinson, chairman of IIT, said: “It has significant potential in traditional materials processing markets and also has new and unique recycling applications, for example, by turning materials such as glass reinforced plastic scrap into a reusable product.”

IIT developed pioneering milling technology

One to watch: GT Group

he GT Group, based in Peterlee, County Durham, specialises in environmental engineering, exporting products and services to over 60 countries worldwide. With its head office in the North East, the group covers a diverse range of engineering activities including automotive products, project engineering and fabrication, composite mouldings, seals, process controls and coatings.

GT has recently secured a £50m contract with Russia’s leading automotive manufacturer, GAZ Group, to which it will supply exhaust gas control systems for a new range of heavy duty diesel engines. The deal, which will comprise 100,000 systems a year at full production, might allow GT to achieve its programme of growth and bring its workforce level to 500 (it’s now 300).

If the North East wants to reap the benefits of its investment in innovation, sustainability and renewable energies, the need for a highly skilled workforce must be addressed. Thousands of middle and high level jobs in engineering will be required to meet future demand. Growing sectors like plastic electronics and industrial biotechnologies are promising, but will need a highly trained workforce if they are to bring benefits to the regional, and national, economy. Low carbon industries have the opportunity to create over 16,000 new jobs in the region. By 2019, however, the off-shore wind industry will need 3,000 skilled engineers: to meet this requirement, one in three engineering graduates should enter this sector. Just like the rest of the UK, North East England faces a widening skills gap as new support for manufacturing and engineering apprenticeships struggle to plug the skills shortfall. Unless this problem is addressed, the region won’t be able to fully exploit the opportunities that new, lucrative sectors have to offer. EEF’s Tony Sarginson says: “If we are serious

Geoff Turnbull, GT group chairman, said: “This prestigious contract with Russia’s leading manufacturer will further cement GT Group’s rapid growth and its reputation as one of the principal suppliers of engine brakes and exhaust gas control systems for the heavy duty diesel engine markets.” Having worked for the last four years with GAZ on Euro 3 standard engines, the new engines will meet the latest Euro 4 and Euro 5 emissions standards.

Rendering of the Tees Renewable Energy Plant

about rebalancing the economy, we have to do something about the small proportion of engineeringrelated apprenticeships offered in the North East.”

Have your say at www.themanufacturer.com

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“When government makes these decisions, ADS has a job to make sure that the consequences to the UK’s advanced manufacturing sector of such decisions are explained. We are on that case 24-hours a day.”

From anorak to

campaigner Last year Graham Chisnall took on a big job at revamped industry body ADS following the merger of four separate trade groups. ADS has since secured better dialogue, and influence, with Westminster and has drawn in the security and space sectors under its ample wing, but a more disparate membership and big defence spending cuts present challenges. Will Stirling speaks to him.

the National Manufacturing Debate at Cranfield University on May 25, the debate became bogged down in some familiar mud. Protectionism, and whether the UK government should support British companies for public sector procurement. Some danced gingerly around the issue of government’s role in picking winners. Graham Chisnall

took the microphone for the second time that afternoon. “I’m frustrated with this debate,” he said. “We have to push every button that we can. We either play that game to its best advantage, or we don’t and face the consequences. I have no truck with “picking winners”, in specific cases. It seems eminent common sense.” It was a welcome dose of black and white in a high calibre debate that was straying into the realm of platitude. Mr Chisnall supports his sector – the aerospace, defence and security industries – vociferously and, albeit for a little judicious media training, wears his heart on his sleeve when speaking up those sectors’ needs. The leading UK trade association for the aerospace industry wouldn’t be much use if its top executives represented its members concerns in sotto voce.

Interview

Graham Chisnall, MD, Aerospace and Operations, ADS

Graham Chisnall is the managing director of Commercial Aerospace and Operations at ADS, the trade association for the aerospace, defence, security and space industries. ADS was borne of the merger of predecessors the Police and Public Security Suppliers, the Defence Manufacturers Association and the Society of British Aerospace Companies in October 2009, and it encompasses the British Aviation Group (BAG). The merger was driven by several forces, one of which was to improve the efficacy of the bodies’ lobbying powers through a united voice. Membership in May stood at 910 members and technical programmes like Supply Chain 21 are providing measurable benefits to companies of different sizes doing different things. Mr Chisnall acknowledges that a combined, larger ADS is now opening more doors to the corridors of power. “BIS [the Dept for Business, Innovation and Skills] has become more accessible at ministerial level and has started to really understand the importance of our sectors to their own growth aspirations. David Willetts [Universities and Science Minister] actively supports the whole STEM agenda and is a huge advocate of space. BIS is listening.” But with size comes difficulties. ADS now represents the security and space industries, which have their own set of problems – growth, regulatory, technical and skills – to finesse with its work in the more traditional civil aerospace and defence sectors. Defence spending is under pressure; think-tank RUSI expects cuts of at least 15% in the overall defence budget over the next four years. Part of ADS’s raison d’etre is to seek and communicate to its members the clearest possible picture of the long term spending plans of the Ministry of Defence; in essence, a detailed Defence Industrial Strategy. If defence spending cuts are deep, despite diversification into the security sector, ADS’s membership base will potentially fade – lean times cause companies to shed certain non-core business activities. Given the austere times, a new coalition government and the shifting needs of global defence programmes, it is a challenging task. Is Graham Chisnall up to the job?

Know your game He is certainly eminently qualified. A chartered engineer, Chisnall spent 35-years at two companies, BAE Systems and GKN, and is a Fellow of the Royal Aeronautical Society. A self-confessed aircraft anorak, he is a pilot and flies an original 1942 Tiger Moth biplane when time allows. He is also the nonexecutive chair of the Engineering Development Trust, a charity involved in science, technology, engineering and maths (STEM)-related school programmes. Engineering and education, as well as all things with wings, is obviously a passion. “We clearly have to support the government to improve the basic teaching of English, maths and science. We still see too many youngsters leaving school with inadequate skills in those basics,” a view that the media unearths more evidence of every day.

His career covered several important milestones, which gives him a deep insight into these sectors’ idiosyncrasies. As technical director and chief engineer for all BAe aircraft at Brough, he oversaw the rapid, private venture development of the Hawk 100 and 200 aircraft family. He then became project director of what became Nimrod MRA-4, a successful two-year bid for the £2.5bn Replacement Maritime Patrol Aircraft contract for the Royal Air Force, launched in 1997. He was also group head of strategy at BAE Systems from 1998 to 2000, which involved leading assessments of merger and acquisition opportunities. Joining GKN in 2000, Mr Chisnall was a director in the newly formed Aerospace Group and over the following 10-years held several senior jobs and launched some key initiatives, such as GKN’s Technology Forum, a board level group responsible for overseeing all GKN’s automotive and aerospace technology development – a weighty responsibility at the £5bn (2010) turnover company. His last job at GKN as Corporate Director - Strategy exposed him to strategy across the entire company, including M&A and group technology. A comprehensive career, from grass roots engineering skills to

We’ve got to get the message through to youngsters that engineering... is well paid and is one of the few occupations that is truly creative – something exists after you’ve done your job that didn’t exist before business management, in aerospace, defence and automotive, leading technology and group strategy at two iconic British firms. Why join a trade association following this stellar career? “I had done pretty much every job at a senior level in those two companies and I wanted to do something different. I also care passionately about the work that ADS does. I genuinely care that we ensure we leave a strong, vibrant aerospace industry for the next generations.” Is an engineering background essential to run ADS? “At the top level, engineering is a good training, an approach to problem-solving. How you make successful trade-offs can help you deal with complex situations. I haven’t done hands-on engineering for many years, but I’m sure the way that I approach situations is influenced by that early engineering training.” We talk about a familiar lament, the dumbing down of engineering skills in business and education. There are signs that this is changing; Chisnall acknowledges this but adds, “I am concerned that, because of the need for shareholder growth and

financial reporting required by the City, there is an increasing preponderance of financially-trained senior executives running engineering companies. Where engineering excellence is part of [these companies’] future, it’s important that engineers do not drop further down the pecking order.” He adds: “We need to drive a better collective understanding of the broader role of engineering in the value generation of these companies.”

New look ADS – in the zone ADS membership is growing on a net basis, especially in the security sector. Has the merger worked? “Yes, it has been a marked success,” Chisnall says. “There was a plan in place to merge the two main organisations [DMA and SBAC] over a period of a year, a very short time frame. There are still a few cultural issues that will take longer to resolve, but nothing insurmountable.” What is the evidence that the combined entity is working more effectively? “Two most striking things for me in the first year was, firstly the degree of senior political and industry access that ADS is now able to secure, in ways that SBAC and DMA couldn’t have done themselves. Also a combined aerospace, defence and security industry trade association has been remarkably prescient, given that the government used to mention defence and security separately. Now when MPs talk about this industry it’s almost one word, ‘defence and security’. That’s important because of the synergies.” And the group has stronger finances as a combined force, says Chisnall. “ADS continues to depend on Farnborough [Air Show] to a degree. Fortunately, this continues to go from strength to strength. For example we will have a security zone at FAS 2012.”

ADS plans to increase its remit for technical services, Chisnall says. Perhaps the best example of this is Supply Chain 21, the programme designed by predecessor SBAC for companies to benchmark their supply chain efficiency against ‘best in class’ standards. “SC21 is the only industryrecognised, all-embracing supply chain improvement programme. The government recognises it. It came from aerospace but it isn’t specific to aerospace companies. We have revised it to make it more relevant to a broader reach of companies who are now eligible.” One important improvement is the consultation in progress for ‘SC21 Light’, a less bureaucratic version of the full SC21 programme. This followed evidence that smaller companies, especially those for whom the management team might be 1-3 people, find it a burden to administer ‘full fat’ SC21.

Defence cuts and overspends One ADS message especially – to support the UK’s defence industrial base for economic as well as defence reasons – reaches an acquiescent audience, its members. But how is the group dealing with the negative press surrounding defence cuts and large projects that go over budget, often in the billions of pounds? “We just want an open and proper debate process, because the defence industrial sector is a vital part of the industrial landscape in the UK,” says Chisnall. “On the overspends, we need to try to inform people better when these stories break. They are usually a result of many decisions taken over a long period of time, which then get aggregated and announced at a certain point in, for example, the National Audit Office assessment cycle. A large part of overspend

“(On procurement] We have to push every button we can” Chisnall at the National Manufacturing Debate 2011

Interview Graham Chisnall, MD, Aerospace and Operations, ADS

on the [two Queen Elizabeth II] carriers, for example, was due to the previous government’s consciouslyplanned delay in the programme, to try to minimise year-on-year cash spend. When government makes these decisions, we have a job at ADS to make sure as far as possible that the consequences to the UK’s advanced manufacturing sector of such decisions are explained. We are on that case 24-hours a day.” In the 1990s, Chisnall was instrumental in securing the contract for the Nimrod MRA-4 Replacement Maritime Patrol Aircraft. The overbudget programme was pulled last year as the first round of defence cuts following the SDSR

Review. Chisnall says he has no personal regrets in his career, but the biggest regret “is for the team at BAE Systems doing the Nimrod MRA-4, a programme very dear to my heart. There are some highly skilled, very talented people I know personally who’ve worked on it night and day for the last 18-years, to produce the world’s best submarine hunter. It was cancelled within a year of getting into service. So I feel deeply for those individuals who spent long and hard years doing great work on that, just for it to run to nothing.”

Aeroplanes remain one of my great fascinations and loves. I’ve been lucky enough to be chief designer of new aircraft platforms, I’ve run aircraft programmes – I’ve fulfilled my boyhood dreams Engineering: Get beyond the word

Biography Graham Chisnall 1974:

Joined British Aircraft Corporation, a predecessor of British Aerospace on an undergraduate apprenticeship. Graduated with a BSc. (Hons) in Aeronautical Engineering in 1978.

1978-85:

Had a series of engineering positions in BAe’s military aircraft division in Warton.

1985-87:

Deputy Chief Engineer on the Eurofighter programme, based in Munich.

1989:

Appointed Technical Director and Chief Engineer for all BAe Brough aircraft.

1994:

Project Director for the RMPA/Nimrod MRA-4 Royal Air Force project bids.

1998:

Group Head of Strategy, BAe/BAE Systems’ headquarters in Farnborough.

2000:

Director of Group Operations in engineering and lead GKN board director on the AeroSystems International Board.

2002:

Aerospace Group Director of Sales and Marketing and Director of Group Strategy, engineering and technology at GKN.

2004:

Corporate Director of Strategy at GKN.

2010:

Managing Director of Commercial Aerospace and operations at A|D|S.

Graham was a member of the SBAC Council from 2003 to 2008, is a long-standing Chartered Engineer, Fellow of the Royal Aeronautical Society, is the non-nxec chair of the Engineering Development Trust, the largest national charity involved in science, technology, engineering and maths related school programmes, and is a non-exec director of the legal regulator the Solicitors Regulatory Authority. Graham is married with two teenage daughters. He is an active private pilot, sharing ownership of a vintage Tiger Moth biplane.

Chisnall is very close to the skills debate. He is non-executive chairman of EDT, the Engineering Development Trust, the UK’s biggest charity running schemes to motivate young people to choose a career in STEM subjects. “We have to get past the word, engineering. Show youngsters before they take options at school that engineering is one of the most creative disciplines that you can work in,” he says. “Stats now show that for first year postgrads, engineering is the best or second best paid profession. And its one of the few occupations that is truly creative – something exists after you’ve done your job that didn’t exist before.” On the status of the engineering profession, Chisnall is concerned about how well university equips people for the modern workplace: “It worries us that there is still an erosion of graduate engineers coming out of UK universities, but also the skill sets of some of those graduates need additional support from companies before those companies find them very useful. Action needs to be taken at every level to tackle this.” There are lots of positives at ADS, but where does it need to improve? “You can always communicate better. From small SMEs to some of the biggest global companies, getting communications right with all of that variety is a never-ending challenge. We must continue to deliver relevant services, including big technical services like SC21, so they remain what the member companies want and not to allow them to become prescriptive programmes.” And is the Tiger Moth the aircraft anorak’s way of venting executive stress? “I love old aeroplanes. I knew I’d always have a Tiger Moth at some stage and I co-own it with others. It’s completely authentic, with no brakes, no electrics, no engine starter – it’s a beautiful thing. We flew it to Toulouse last summer, it took a week but it didn’t miss a beat. That’s a bit slower than a Hawk.”

Have your say at www.themanufacturer.com

Come and see the very best in UK manufacturing

THE MANUFACTURER OF THE YEAR FACTORY TOUR Thursday 22nd September 2011 | 9:30-15:00 | Castle Precision Engineering Ltd, Glasgow

LEADING THE WAY Are you looking for practical ways to improve competitiveness? Are you seeking to boost innovation, quality, change and continuous improvement?

This exclusive one day tour for manufacturing and engineering professionals is an excellent opportunity to see and hear the working practices and systems of the 2010 winning Manufacturer of the Year. Castle Precision Engineering will be opening their doors for just 30 delegates to share the latest tools and techniques that have helped them achieve world class status. Castle Precisionâ&#x20AC;&#x2122;s team of over 150 highly trained personnel, operate an advanced, fully-computerised manufacturing facility based in Scotland. Castleâ&#x20AC;&#x2122;s exceptional facilities, machinery and systems sets it apart as one of the most advanced in the sub-contract machining sector.

EARLY BIRD

OFFE R

£50

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Castle Precision Engineering was crowned Manufacturer of the Year 2010 after beating over 150 entrants, winning both the Best SME and overall Manufacturer of the Year awards. Delegates will have the opportunity to speak to the senior management team and see just what it takes to become The Manufacturer of the Year 2010. You will hear their approach to innovation, IT and the manufacturing systems they have developed as well how they are creating a culture of continuous improvement across the site. Further insight will be provided on the following areas: the approach to staff training and development, apprentice programme, lean and operations improvement programme and SC21 partnerships.

› MDs, CEOs looking to benchmark themselves against the UK's Manufacturer of the Year

› Operations, HR and Finance Directors seeking inspiration and insight into becoming a world class manufacturer

› Companies entering this year's awards programme looking for advice and tips to help them along their journey

At this event, you will: › Understand what it takes to become The Manufacturer of the Year

› Share knowledge and explore new ideas and opportunities for your company

› Learn best practice from the factory tour

› Meet other manufacturers who share many of the same challenges and issues you face in daily operations and decision-making

‘‘

› 150 employees › £15million turnover › The Manufacturer of the Year 2010 and Best SME award winner

› First sub-contractor in Scotland to be awarded SC21 bronze status

Despite being one of the most difficult years for industry in living memory, we can look back on 2010 with great pride. It will be remembered for the demonstration of our strong culture that took the downturn not as a hindrance, but as an opportunity, to make step change improvements in the company through investment in capital, training, our own continuous improvement programme and involvement in industry change programmes.

‘‘

Who should attend?

KEY FACTS

Marcus Tiefenbrun

MD, Castle Precision Engineering EARLY

To register a place, please contact Benn Walsh at: T: 0207 401 6033 E: b.walsh@sayonemedia.com

Delegate fees: £295 +VAT per delegate Early bird offer: £245* + VAT per delegate *if booked by 31st July 2011

The Manufacturer magazine reserves the right to preclude delegates from participating in the tour due to the nature of information released. Please speak to Benn Walsh if you have any queries regarding conflicts with the host site.

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The Tata Steel plant in Port Talbot, Wales

The real cost of carbon When Prime Minister David Cameron said in May 2010 that he wanted to create “the greenest government ever”, no one expected it to be a simple task. But as the coalition has continued the staggered introduction of environmental regulations and taxes in an attempt to stimulate green growth, the strain on business is already taking a toll. Tim Brown reports.

mid-March the government set a floor price for tradeable carbon emissions credits in a move designed as a key part of the government’s proposals to reform the electricity market. In essence the government hopes that providing greater economic certainty will help generate more investment in new lowemission power projects, including nuclear power. Research released by Thomson Reuters Point Carbon suggests that the UK’s proposed carbon floor price will cut carbon emissions from the UK energy industry 5.3% by 2020. The prediction says that the government’s plans, confirmed in last month’s Budget, will cut carbon emissions by 67m tonnes between 2013 and 2020, a saving equivalent to carbon emissions from six 400MW gasfired power stations. Presently, about half of Europe’s emissions are covered by the EU Emissions Trading Scheme (EU ETS), in which allowances are traded on carbon produced beyond a capped limit. The carbon floor price is

effectively an extra tax designed to come into effect if the price of carbon falls below £16 per tonne from 1 April 2013 or £30 in 2020. However, following the carbon floor price announcement, analysts at investment bank Citigroup wrote: “On reading an accompanying policy costing document it becomes clear that the actual tax paid...will be higher, as the published prices are referenced as real prices in 2009 money. Applying inflation estimates from the office of budgetary responsibility results in an estimated nominal carbon floor of Eu21 (£18.33) in 2013 and Eur46 (£40.66) in 2020 at current exchange rates.” Thomson Reuters Point Carbon says that those estimates may even be too cautious estimating a UK carbon floor price as high as Eu54 a tonne by the end of the decade – a significant premium on the €36 a tonne price that is expected across the rest of the EU.

A potentially damaging measure The group set to suffer the greatest impact as a result of the introduction of a floor price

Energy

and Sustainable Manufacturing

are the energy intensive users including the steel, aluminium, cement, paper and chemical industries. Some manufacturing firms are already showing that the cost of a tight environmental doctrine may come in the form of British jobs. When Tata Steel announced late last month its plans to cut production and axe up to 1,500 jobs at two sites in the north east of England due to weak demand for its products, many were crestfallen at the news but few in the steel industry were shocked. While the company has publically blamed the slump in the UK construction market as the primary reason for the cutbacks, the added pressures imposed by the government’s new green taxes certainly exacerbated a delicate situation. Earlier in May, The Times quoted managing director and CEO of Tata Steel Europe, Dr Dr Karl-Ulrich Köhler: “European steel makers already face the prospect of deteriorating international competitiveness because of the proposed unilateral imposition by the European Commission of very significantly higher emission costs. The carbon floor proposal will impose additional unilateral emission costs, specifically on the UK steel industry. This is an exceptionally unhelpful and potentially damaging measure.” Runcorn-based chemical company Ineos, a major energy consumer, issued similar concerns saying that the higher costs could force it to move production abroad. In a worst case scenario, the company’s energy bill could rise by as much as £30m a year by 2020, which would have a “considerable impact” on its ability to compete, the firm said. “The Runcorn site is very important to Ineos and we have invested more than £400m in the site to date to secure its future,” Ineos chief executive Chris Tane said in a statement; “Our business has weathered the economic downturn and has real potential for long-term growth and prosperity, however this can only be realised if we remain competitive, internationally,” he said. He said Ineos and other energy intensive manufacturers were working with the government to ensure their needs were reflected in any legislation: “The government is listening and discussions so far have been very positive. We are therefore hopeful that the legislation will provide support for energy intensive manufacturers as the UK moves towards a low carbon economy. This will be vital if we are to remain competitive versus other European and global manufacturers.” Voicing similar concerns, Lynemouth firm Rio Tinto Alcan says that the proposed floor price would cost an additional £40m per year, eliminating its profit margin. The company says the plans cast doubt over more than 600 jobs at the aluminium plant, which contributes more than £100m to the UK’s north eastern economy. Jeremy Nicholson, director of the Energy Intensive Users Group, has warned that the UK’s energy policy is a severe risk to the economy. Speaking at an annual lunch hosted by the ERA Foundation in

The real cost of carbon at a glance According to government the carbon floor price will come into effect if the price of carbon falls below £16 per tonne from 1 April 2013 or £30 in 2020. Thomson Reuters Point Carbon says a UK carbon floor price could be as high as €54 a tonne by the end of the decade The energy intensive users including the steel, aluminium, cement, paper and chemical industries will suffer the greatest impact of a carbon floor price. The Energy Intensive Users Group has warned that the UK’s energy policy is a severe risk to the economy. Nearly half (45%) of businesses want the CRC scheme scrapped. Between 2011 and 2020, the 90m tonnes of carbon dioxide savings the CRC participants are expected to achieve will be emitted instead by heavy industry.

May, Mr Nicholson said that legislation and initiatives like the CRC Energy Efficiency Scheme and the Carbon Floor Price have increased energy costs to an uncompetitive level. “With some of these manufacturers, 20%-70% of their production costs are from energy. Even a slight rise in cost or an extra environmental tax can be very damaging,” he said. “If we tax too much and make fossil fuel energy generation expensive, we won’t decarbonise the economy by reducing carbon from power stations, we’ll decarbonise it by shrinking the economy.”

A growing list Although the UK floor price won’t be introduced for 18 months, the move is the latest environmental cost burden for businesses which have already been subjected to a number of green taxes and regulations. Depending on the size of the business, a company might already be subject to the Carbon Reduction Commitment Energy Efficiency Scheme (CRC), the Climate Change Levy (CCL) and associated climate change agreements (CCA), building regulations, and the EU emissions trading scheme (EU ETS). The considerable regulatory list has caused unease. The CRC in particular has been labelled a ‘green stealth tax’, since money raised through the scheme is now going to government rather than to those firms who cut their bills the most as was originally promised. Research released by electricity and gas supplier npower to mark the first anniversary of the implementation of the CRC revealed that nearly half

the CRC scheme

are you on top of it? 29th July is the deadline for both annual and footprint report submissions - are you ready? Are you aware of the consequences of inaccurate registration? • Penalties of £40 per tonne of CO2 can be levied against you • Initially carbon allowance purchases will cost a minimum of £40,000 p.a. for participants - at £12 per tonne CO2, can you afford to miscalculate your emissions? Do you have the resources to comply fully with the CRC legislation? The data for registration needs considerable work before you are fully compliant: • energy usage needs to be collated across all your sites and any subsidiaries • original bills organised and checked against actual meter readings • everything filed in your evidence pack and double checked, ready for internal audits by you and external audits by the environment agency What can Apollo Enviro do for your company and its CRC obligations? • Compile your evidence pack and submit footprint and annual reports • Conduct internal audits of your registration and evidence pack • Analyse and trade CO2 allowances on your behalf • Help improve your performance league table position • Propose ways to reduce your energy consumption so helping to avoid future phases • If necessary, complete and action your online registration for Phase 2 onwards

For more details call Thomas Ridgley on 01257 239504 or visit www.apolloenviro.co.uk

Apollo enviro saving today • protecting tomorrow

Energy and Sustainable Manufacturing

(45%) of businesses want the scheme scrapped. More than half of the respondents feel the CRC places unnecessary financial burden on businesses while 57% would like a simpler process for carbon footprint reporting. Dave Lewis, head of business energy services at Npower, says that the results of the company’s latest research reflect much of the feedback the company receives on a daily basis from its customers. “It is concerning that the changes to the CRC have resulted in businesses putting less priority on reducing emissions, which was one of its key aims. We feel it is important that organisations focus on the best practice behaviour the CRC sets out to encourage, as energy efficiency and effective energy management make sound commercial sense, with or without the scheme.” Behind all the potential for economic damage lies a greater good, the sustainability of the human race. But there are additional issues with the myriad of interrelated regulations which draw into question the proposed benefits.

Figuring out exactly which carbon regulations currently apply to you can be daunting but the general rule is as follows. Small businesses: Building Regulations, CCL Medium businesses: CRC, Building Regulations, CCL Large businesses and energy intensive users: EU ETS, CCA Energy suppliers: EU ETS and the Renewable Energy Strategy From April 2012, businesses will be subject to the carbon floor price

One of the main problems with the structure of the current regulations is that companies buy their electricity from power providers who themselves hold permits under the EU ETS for every tonne of carbon emitted. These permits are limited but can be bought and sold depending on the need of the company. If companies under the CRC reduce their electricity demand it could simply free utilities to give their permits to someone else, perhaps another power provider or an energy intensive user, allowing them to increase their carbon emissions. A report by Carbon Retirement estimates that “between 2011 and 2020, the 90m tonnes of carbon dioxide savings the CRC participants are expected to achieve will be emitted instead by heavy industry”. “The benefits of the CRC are limited,” says Liz Morgan, carbon solutions manager at energy consultancy firm EIC. “The cancellation of the recycling mechanism has turned the scheme into an administrative and financial burden. The legislation however, does push participants to monitor and report their carbon emissions, which in turn forces a better understanding of energy usage and carbon emissions data. The additional financial impact and legislative requirements of the scheme will also ensure that the CRC will be discussed at senior management level. In the long term, pushing energy efficiency purchasing decisions up the management chain should encourage better results.” In the end, the requirement to reduce the amount of carbon in our atmosphere is absolute and until that takes place, the regulations are here to stay. The only mechanism for reducing the regulatory burden is to make the changes necessary to reduce carbon emissions. Until those savings are made and sustained, the government will continue to enforce restrictions to encourage change.

Tata steel’s new wire rod warehouse and distribution centre at Scunthorpe

Have your say at www.themanufacturer.com

MIND THE GAP Understanding risk is key to managing it – but many manufacturers may not be fully aware of their exposure, or of the complicated legislative framework. Phil Moore, of Zurich Engineering, helps Ruari McCallion to pick a way through the maze.

comprehensive knowledge and understanding of every aspect. “The prime purpose of a manufacturing company is to make goods they want to sell and they want to be as safe as possible,” he says. “They need knowledge of the framework but they aren’t experts – it’s not their business.” For specialists like Zurich Engineering, on the other hand, it is their business. They have skills and resources that can make the job of compliance easier – and can help their customers to get more from their equipment, machinery and

“In an ideal world, all our customers would

working environment, as well. Even the largest

understand risk – but we don’t live in an ideal

companies, who may have in-house resources,

world,” says Phil Moore, head of engineering at

can get things wrong – as the catastrophic

Zurich Engineering. “It is a question of helping

explosion at Buncefield demonstrated. Expert

customers to understand what their risks are.”

help and analysis in understanding and managing risk is a key element in Zurich Engineering’s offer

This may seem like a pretty bold statement to

to its customers – They help the customer to

make. Executives and managers in manufacturing

identify any gaps in their risk controls framework

companies know their jobs and are generally

– legislation is such a complex maze, an expert

aware of the raft of legislation that covers

guide is as valuable as a Sherpa on Everest.

health and safety, explosive substances, machine operation and so on. But Moore is making

Untangling the alphabet

the point that the business environment is so

“Customers at the lower end, the smaller

complex that it is difficult for anyone to have a

organisations, understand enough to know that

they need someone to provide safety inspections and they come to us for that. Regular inspections ensure that any serious defects are picked up and rectified,” says Moore. Of course, there is more to it than just inspections. The raft of legislation can look

“We seek to achieve balance with our customers, to develop a cost-effective range of solutions”

like an alphabet soup, with HSWA (Health & Safety at work Act); LOLER (Lifting Operations and Lifting Equipment Regulations); COMAH

Understanding the whole risk – and

(Control of Major Accident Hazards), to name

developing solutions

but three. And a further trap for the unwary

“One of the services we offer is TRP – total risk

is the fact that not all regulations – or all of

profile,” says Moore. “we look at the various

a particular set of regulations – apply to all

types of machinery, at how they fail and what

companies, all the time.

causes them to fail – for example, is it designed for the number of operating cycles it has

“Companies can drift into regulated areas

completed when it fails? Do the operators fully

without realising it,” says Moore. “While

understand how to operate the machinery? What

businesses will know that a large installation is

about maintenance – lack of it can cause failure.”

going to be subject to various regulations, the

Some of these aspects are covered in normal

problem is that organisations grow organically.

management operations but not always in the

Take propane tanks, for example. The number

optimum manner.

and size can just drift up until they reach the point where they become major and that point

“We seek to achieve balance with our customers,

could be reached without anyone realising they

to develop a cost-effective range of solutions,”

have breached the threshold. It could be just an

Moore continues. “It’s not just about inspections

additional one or two per cent in storage capacity

but if something is failing often, then maybe the

that takes you over the line where you need a

inspection regime needs to be more frequent.

raft of additional plans and have to meet many

If we go through TRP we can help to identify

more requirements.”

what the underlying cause is and to understand it – whether it is not being operated properly,

Practical resources

or maybe it isn’t designed for what it is doing,

Zurich has created a range of factsheets to help

in which case the answer may be to get a

businesses to understand their potential risks.

new machine – or it could be to change the

They are distributed to the company’s thousands

material in the tool, for example.” Customers

of customers and are also available online. They

will know they have a problem if they are faced

cover everything from pressure systems, through

with repeated failure but they may be using

lifting equipment, fork lift truck operation and

sledgehammers to crack nuts. Zurich will help

across the whole gamut of operations, activities

with root cause analysis, which can identify

and regulations.

routes to improvement – which could be about procedures, training programmes, operations,

“Most businesses, once they understand the

maintenance or any of a number of reasons.

need, will make the effort,” he continues. “When businesses find they are not complying,

“The objective of TRP is to stop wasting money,”

it’s generally a sin of omission, rather than

he says. “If you understand risks, you can get

deliberate avoidance. They either didn’t realise

to the root cause of problems and develop and

they were covered by particular legislation

define optimum solutions. There may often be

or were unaware of the need for a disaster

more than one solution – it’s like travelling from

recover plan, for example. Our position is one

London to Birmingham; there are a number of

of offering education, in both the legislation

ways of getting there but only one will be the

itself and in the area of ‘gaps’ – where people

fastest, only one will use the least fuel – only one

have not thought through or appreciated the

will be the right one. Our objective is to work

potential consequences.”

with our customers find that optimum solution, whatever it is. We have the expertise and

The ‘gap’ in understanding or knowledge is one

resources to bridge that gap.”

that Zurich seeks to bridge. The factsheets are straightforward and accessible but individual

For more information on engineering

circumstances are exactly that – individual.

inspections, please visit:

The only way to get a complete understanding

www.zurich.co.uk/engineering or contact

of risks in particular workplaces is to look at

your insurance broker to learn more about

it individually.

our range of covers.

Lean extremes Management by extremes Bill Bellows, associate fellow at United Technologies’ Pratt & Whitney Rocketdyne and president of the In2:InThinking Network This extract is taken from the introduction to LMJ issue 08. Following discussion of the lean ambitions to eliminate waste and variation coupled with the “conflicted thinking” in continuous improvement, Bellows went on to say: “A wholesale ambition to achieve either zero or an infinite amount of something has consequences that can easily be more expensive to the system than the local savings achieved by well-intended work. Try applying the same attitude to eradicating fat (a common synonym for waste), what would happen to the world’s population of whales? Whales need fat for a reason; insulation. Without it they cannot function or survive. At the opposite end of the spectrum we can see that extreme focus on infinite goals can be paralysing. Consider home improvement. A homeowner who hopes to profit from their property will not make improvements indefinitely. Instead specific changes are made to optimise for the market context. Infinite improvement out of context will make the property unsalable and the owner’s hard work useless.

In this article Jane Gray takes a look at different perspectives on what lean looks like when its trajectory has become warped or its focus too myopic. The article extracts below are taken from TM’s sister publication, Lean Management Journal, issue 08.

Lean

manufacturing has become far and away the favourite methodology in the world for gaining efficiency and effectiveness in production, and for many other manufacturing business functions. But as with any management or improvement structure, focusing exclusively on lean techniques can be counter-effective, and some would say, through bitter experience, disastrous.

Lean without limits Julian Wilson and Andrew Holm, directors of defence manufacturer Matt Black Systems

The extremism of zero and infinity as goals for the performance of products and processes extends from the focus of the elimination of waste and variation and continuous improvement to include a desire for zero inventory, zero cycle time, zero cost, and zero delivery time. I refer to this well intentioned bravado for achieving “faster-better-cheaper” as management by extremes.”

This article recounted a lean implementation project at Matt Black Systems which was undertaken in response to pressure from a customer. The consequence of this was a singular focus on the manufacturing processes which affected the products of the customer in question.

Bill Bellows will be a keynote speaker at Lean Management Journal’s annual conference, June 16.

“Our choices were constrained.

Contact Benn Walsh at: b.walsh@sayonemedia.com or on 0207 401 6033 for full agenda details and booking.

We undertook a cost benefit analysis and ended up with a plan for some easy and beneficial (sometimes both)

Lean Manufacturing

Lean without limits continued

After 12 weeks we had we had rearranged work spaces, introduced new production tooling, working practices and test equipment, repaired and modified machinery and established a new visual management system. The consultants calculated that the benefits represented a saving of £100,000 per year, of which a significant proportion was attributable to the sponsoring customer’s product. The programme was deemed a great success and we were able to offer our customer the necessary price reduction linked to our savings. Only we didn’t see this money appear on our bottom line. Perhaps this was due to the costs of implementation; perhaps it was due to mistakes in our approach. Whatever the case, the savings trickled away through a thousand unforeseen routes. For example, new inspection equipment highlighted problems we never knew we had resulting in the need for more expensive parts from suppliers. Each unintended consequence like this didn’t add up to much in itself, but when combined meant we were no better off... This is an effect of boundaries. Grand claims can be made about the efficacy of a project when measures are kept within tight boundaries, yet overall the benefits may be few. So it is with the bottom line. A lean project may make savings, but it’s difficult

to squeeze these savings through the complicated systems of a business and see them appear intact on the bottom line. Our advice is to beware the measures and boundaries that you allow to be set for a lean project, make sure they are not too narrow and that they reflect your wider goals. Lean tools often highlight more problems than they solve and these new problems quickly drift away from what is immediate. Like untangling a ball of string, it doesn’t matter what thread you start with, pretty quickly you are led to the heart of the tangle. We all have problems we don’t know we have, some small and directly linked to the issues in hand, others more complex, systemic or even cultural in nature. The lean toolbox comes equipped with some great tools to help but again the issue of boundaries impacts on how much benefit you will gain from their use. If you bound your lean activity to discrete areas the underlying causes of the problems and therefore the symptoms will remain... After our false start, we vowed to use the lean tools to dig deeper. This more profound approach took us down a very unconventional route as we looked to address our underlying dysfunctions and indirectly deal with the symptoms. It took time to develop this holistic approach, one that results in the lean techniques (and others) being drawn in by our people from wherever they can be found, but the results are far more enduring. A quick search of the internet will reveal all the business improvement techniques you

Julian Wilson

projects. This plan was then introduced to everyone in the firm, both to educate and allay fears that the changes were simply a ploy to lose jobs, cut overtime or to make them work harder.

could ever want; the question is; why aren’t they being implemented in your organisation already? Our answers guided us in cutting away the hidden anchors within our organisation and we achieved much greater improvements in important areas like quality, delivery, profit and conformance- things our customers care about. Going back to that original customer who sponsored our lean journey; we went from being one of their bottom 19 suppliers, to their second best global supplier in four years. The deep changes we made to our business means our improvement efforts didn’t stop with the official lean programme. Dozens of self generated changes take place every month as our organisation continues to innovate, optimise and cut costs as the world around us changes. To anyone seriously considering embarking on a lean journey I recommend reading the seminal work by Taiichi Ohno, Toyota Production System: Beyond Large-Scale Production. Reflect long and hard on the boundaries of their journey, not on the tools that were discovered along the way, for it is here where the secret of lean lies.”

Lean Manufacturing

Lacklustre lean Chris Daffy, founder of The Academy of Service Excellence

ith a heavy focus on efficiency, lean manufacturers do not always appreciate the role of service within a truly lean system. This is despite value creation for the customer being the first lean principle. In this article Chris Daffy explained to readers the benefits manufacturing companies can gain by incorporating approaches to service excellence into their lean programmes. “Why is it that so many manufacturers make great products that are incredibly reliable, yet deliver a service experience that is flawed? We see this everywhere – a car that hardly ever goes wrong but a routine service experience that’s awful, a laptop that’s fantastic but a helpline that’s anything but helpful. It’s something that’s interested (and irritated) me for a long while.

I have a passion for helping organisations to deliver service excellence and, having worked with companies in many different sectors, over the past year or so I’ve had the opportunity to collaborate on service improvement projects with a variety of manufacturers and I think I now know some of the reasons why the anomalies between product and service excellence occur. I’ve also had the opportunity to test and develop what works. I am convinced that the problems result from the way manufacturers naturally approach improvement projects. They are usually highly skilled in the application of process improvement techniques, like lean and 6 sigma, so they understandably turn to them when confronted with the challenge of improving a service experience. These approaches are undoubtedly excellent for what they were designed for, improving a process, but my experience is that they are nowhere near as good at improving a

There is a great deal more to discuss about the dangers of lean ‘extremism’. Practitioners of lean in all environments should bear in mind, however, that, as systems-thinking advocate John Seddon is fond of saying, Taiichi Ohno rejected the codification of the Toyota Production System. Lean approaches are a part of the puzzle but the authors featured

Have your say at www.themanufacturer.com

service experience; which they may have been adapted for, but were not designed for... The opportunities for manufacturing businesses to use service as a source of differentiation and competitive advantage are I believe, immense; especially in today’s ever more competitive markets. It’s also a fact that in most markets, if one supplier gets a reputation for having a service experience that is substantially better than the competitors, it can lead to many other benefits. I would therefore encourage all leaders to investigate this and discover for themselves how they too could make service excellence a key element of their competitive strategy.” Daffy made clear in this article that: “The goal is not to replace the science-based approach [of lean and 6 sigma] with an emotional one, it is just to ensure that both key components [to efficient and effective organisational performance], competence and character, are given equal prominence and attention.”

here would argue that an appreciation of broader system dynamics and alternative improvement methodologies will create a more balanced and robust end to end capacity for success. To find out more about Lean Management Journal visit www.leanmj.com

Although

the Carbon Reduction Commitment (CRC) was introduced over a year ago, many participants are still unclear on the complicated legislation and intensive administrative requirements of this scheme. What effectively should be a simple carbon dioxide monitoring and trading scheme has turned into a highly complex burden for participants. There was confusion from the outset, with the registration process being considerably more complicated than initially expected due to the misinterpretation of many aspects of the qualification criteria. These misinterpretations related to organisational structures, types of exemption and identification of the supplies to be included. Post registration audits have proven this to be the case, resulting in the Environment Agency requiring many organisations to amend their CRC registrations. The complicated registration process was just the beginning, as ongoing compliance requirements proved just as complex. With an extensive range of guidelines directed at different aspects of the scheme and the constantly changing rules, it has proved difficult for participants to keep up to date with the latest adjustments and obligations. Many believed that the scheme was in such disarray that it would not continue, but the government has always been insistent that the scheme is here to stay as it will address their main carbon reduction goals.

Scheme complexities Some of the complexities of the scheme have been caused by the continual updates and reviews. Just six months into the first reporting year, the government spending Review announced the cancellation of the recycling mechanism. This was a significant adjustment that caused huge concern, as well as an additional financial burden. Instead of revenues, estimated at ÂŁ1 billion per year, being returned to scheme participants, these funds are now to be retained by the government to support public finances. Although the CRC was intended to be a revenue-neutral scheme, in effect it has now turned into an energy tax, with significant and unexpected costs for participants. As a consequence to this announcement, additional changes to the scheme were required. In November 2010, the Department of Energy and Climate Change (DECC) released a consultation to review some of the proposed amendments and to consider further simplifications to the scheme. Even DECC acknowledged the complexity of the scheme and the general confusion it was causing.

Consultation In February 2011, DECC released further discussion papers in reaction to feedback about the operation of the CRC scheme. These, in themselves, were extensive and complicated. Whilst it was obvious that simplification was needed, some of the proposals actually caused further

EIC

CRC changing the goal posts confusion. Many participants believe that the hard work has now been done. However, whilst some changes are obviously required, others at this stage are not welcomed. It is apparent that a clearer vision of the scheme is needed. But the CRC has not remained unchanged for long enough for participants to understand it or the impact it will have on their organisation. The scheme needs to be finalised so that all participants can proceed with the knowledge necessary to ensure their compliance and an understanding of the impacts on their businesses moving forwards. Time and effort can then be focussed on energy efficiency and carbon reduction which are surely the main aims of the programme.

Liz Morgan, Carbon Solutions Manager

For media enquiries or further information on EIC please contact: Chris Taylor: chris.taylor@eic.co.uk on 01527 511 700

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

The

Fringe benefits can be effective when small to medium enterprises are in competition with manufacturers who can afford to pay top percentile wages Andrew Churchill, Managing Director, JJ Churchill Engineering

juxtaposition between Unilever employees standing waving banners outside the Queen Elizabeth II Conference hall and the smartly dressed Westminster dons on their way to the House of Parliament was profound. Protesting against the closure of their final salary pension scheme, the Anglo-Dutch manufacturer’s workers were resorting to direct industrial action after the company announced its plans to move all members of its Final Salary Pension scheme over to a career average revalued earnings scheme – with the somewhat ironic acronym ‘care’. Banners demanding ‘Hands off our pensions!’ and ‘Don’t wash our retirement plan down the drain – we deserve better!’ would suggest the employees might harbour some scepticism of the care they’ve been afforded by their employer in this particular scenario. One of the workers at the rally told The Manufacturer that he stands to lose out on around £70,000 if he lives for ten years after he retires. Actions like the Unilever situation are becoming increasingly rare though, despite the myriad of redundancies and pay cuts that resulted from the recent recession. Law firm Pinsent Masons’ ‘Focus on industrial action’ report shows just 1% of private sector workers took part in any form of industrial action in the 12 months prior to being asked and 61% have never even belonged to a union. Jenny Formby, national officer at the union Unite, points out: “The general perception is that unions like to initiate industrial action every five minutes, but this isn’t the case. Members prefer to avoid industrial action through mediation with the company. Employees would much rather go to work than strike all the time.”

Leadership People and Skills

Yet when the threat of industrial action transpires into reality, the consequences can be severe. As well as any potential lost productivity, you could have a damaged reputation and a disassociated workforce on your hands. Heinz and Coca-Cola Enteprises are two companies who will have learnt a thing or two about that over the past twelve months.

CBI’s proposed reforms In October last year, the Confederation of British Industry (CBI) proposed a raft of reforms to industrial action law. In his report ‘Keeping the wheels turning: modernising the legal framework of industrial relations’, Jim Bligh, the CBI’s principal policy advisor, argues that with strike action gradually decreasing over the past 20 years, manufacturers are expected by their customer base to continue to provide services and maintain output. The working relationship between employer and employee has ‘grown up’, according to Bligh. The obstacles and challenges faced by companies are now clearer to their workers and proposed changes in terms of remuneration, processes and regulations are now seen in a better light. The CBI’s report on employment trends in Spring last year found that 87% of employers felt their employees “recognised the need to cut costs and change work patterns in response to economic pressures”. When asked about the state of industrial action law, Bligh said: “We think an overhaul of law governing industrial action is long overdue, particularly given that only 15% of the workforce is represented by a trade union. Far too often strikes go ahead on a low [vote] turnout and we believe the bar should be set higher, so strikes require the backing of 40% of those balloted, as well as a simple majority. The organisation has taken its proposals to the Government and is now waiting to hear whether Number 10 decides to act on them. “It is clear that the mood is changing following recent transport strikes,” adds Bligh, “especially given recent comments from the Mayor of London and Dominic Raab MP proposed a parliamentary Bill to raise the threshold for strikes in emergency services.” Another of the reforms proposed by the CBI in the report was increasing the notice period which must be given to employers ahead of strike action from seven to fourteen days after the ballot takes place, in order to give the company more time to prepare. But on this note, Ms Formby says a culture of better communication on employers’ behalf could prevent industrial action from occurring in the first place. With good dialogue between employer and employee, any widespread discontent within the workforce should surface quickly, and mediation could begin immediately, she points out. The issue of agency workers is an important one for manufacturers, given that so many experience seasonal swings in business. However, there are differing views on the benefits and ethics of using

temporary workers while industrial disputes are ongoing. Pinsent Masons said that employers are able to use employment agencies to supply workers and employ them to temporarily replace workers on strike, as long as they’re employed directly by the company and not by the agency supplying the workers. The CBI has proposed that this rule be changed so that businesses can quickly and easily minimise the impact of strikes. Ms Formby argues that using agency workers to replace those that are on strike contributes to poor industrial relations within a company. “Instead of actually sitting down and talking to employees about their problems, worries and needs, employers can just fall back on agency workers and essentially forget about it,” she said. Brendan Barber, general secretary of the Trade Unions Council (TUC) has labelled the CBI’s proposals as “a fundamental attack on basic rights at work that are recognised in every human rights charter”.

Members prefer to avoid industrial action through mediation with the company. Employees would much rather go to work than strike all the time Jenny Formby, National Officer, UNITE

EEF cash plan The industrial action at both Heinz and Coca-Cola Enterpises were both in part because the employees were unhappy about pay rise offers. Firms are not always in a position where they can buckle into wage demands of course. However, they may be able to offer fringe benefits to workers instead. In October last year, Leicestershire-based aerospace and defence precision engineer JJ Churchill was unable to offer its workforce of just over 100 a pay increase as asked for by its employees’ union representatives in the annual pay round negotiations. Instead, managing director Andrew Churchill introduced the EEF Cash Plan, a scheme where for just £1 a week, an employee is covered for up to £55 a year for new glasses; £55 a year for dentistry; and is covered for any MRI, CT and PET scans they need, among other benefits. Employees can pay £2 a week and roughly double the amount they are covered for on an annual basis. According to Churchill, introducing such a scheme was a huge factor in keeping employees at the firm content last October; “In the negotiations last year I was scrapping around for fringe benefits in response to a 7% pay rise request,” he says. “These benefits needed to be real and valuable – this plan is roughly ten times cheaper because it is in effect a bulk buy and therefore much more competitive.

Leadership, People and Skills

As well as the EEF Cash Plan, there are other schemes being introduced for members of the trade organisation. The Advantages Programme includes a scheme whereby workers are encouraged to ride to work. The company buys bicycles for workers out of their pre-tax wage. “Straight away this is a substantial saving [for the workers] and I get happy, healthy employees,” said Churchill. “Fringe benefits can be effective when small to medium enterprises are in competition with manufacturers that can afford to pay top percentile wages” he adds. “The key is to have a flexible, outside the box view about what things they can offer to their workforce.”

Specialist legal advice While the press often draws attention to action taken by disgruntled workers, often in a distinctly negative light, cases like Unilever’s are something of a minority. Negotiations that do take place are often a lot more cordial than those reported on in the press and more often than not they don’t involve unions, as often only a part of the workforce is unionised. Where union representatives are involved, Martin Warren, head of the human resources practice group at the law firm Eversheds, recommends a non-confrontational approach. “If you’ve inherited a union, then clearly you have got to manage that relationship with them, while generally looking to work in a collaborative way,” he said. “If you haven’t got a union, what makes for the best industrial

Unilever employees demonstrate about pension entitlements in London in May

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relations is to have some sort of employee forum because you want them to understand why you are making certain decisions, why you are making changes and so on. If people get what you are doing, they will generally go along with the change. It’s all about communication.” Warren reiterates that regular contact with your employees is essential if you want them to understand the challenges your business faces and accept the need for changes. He uses the example of a bank adapting to the work habits of customers. As they have started to work longer hours, banks find themselves needing to accommodate this by opening for longer and at weekends. Springing these changes on employees and asking them to work weekends and evenings would most likely annoy them acutely. Good industrial relations require these changes to be outlined, explained and discussed. Industrial disputes and action should be a very last resort for both employers and their employees. As well as a damaging losses for plants and factories, workers usually end up out of pocket to some extent too. Firms that are serious about maintaining good industrial relations need to give thought to establishing and preserving channels of communication between themselves, their workers and the unions that represent them. Development of positive working relationships between management and the workforce is one of the most important initiatives for firms to undertake.

With approximately 13,000 employees, Vaillant Group develops and manufactures products at 16 sites in eight countries and sells them in more than 80 countries. The final assembly plant at Belper, Derbyshire is a highly efficient factory, with domestic boiler production growing year on year.

With

absence costing UK companies over £17bn a year, no organisation can afford to ignore the impact that it can have on business. The Vaillant Group takes staff retention and absence management very seriously and has worked with Kronos over a number of years to support the organisation’s own challenges.

Offering flexibility helps retain employees Vaillant has seen its absence levels drop to 2.8%, well below an industry and regional norm. Although there is strong competition for good workers in the area with Rolls Royce and Toyota nearby, Vaillant has no trouble in finding and retaining good employees. The solution, according to Vaillant’s Continuous Improvement Manager, Allan Harley is: “Offer good, flexible working conditions and people will want to work here. And the key to being able to offer a high degree of flexibility is a good time and attendance system.” “We give clear and concise messages on what you can and can’t do and people appreciate it if you’re unambiguous about what’s acceptable and what is not,” continued Harley. “If you turn up and work hard you will be paid correctly. But more than that, we will try to accommodate whatever time off you need. Kronos is invaluable in helping with proactive

planning, highlighting the workforce and skills gaps to ensure that the correct number of appropriately trained agency staff are called in when we need them.”

Proactive planning At its basic level, Kronos lets the Vaillant plant plan proactively to cope with things like peak holiday demands. But it also helps to manage requests for flexibility from individual employees who simply cannot work the standard shift patterns, often because of their home situation. Vaillant understands that these employees need supporting and provides a 24/7 absence line which employees can call. “It allows us to help and also gives us a heads up for planning,” says Harley. To Vaillant, there are two critical elements in successfully reducing absenteeism: first a

Vaillant Group

A flexible working environment helps retain staff and reduce absence levels at Valliant clear, concise absence policy that is understandable to all and, secondly, making sure it’s enforced. And that means the same rules for everyone – manager, supervisor, shop floor and agency worker alike.

Proactive management Using Kronos to help analyse absence and underlying causes of absence helps to spot trends for general improvements both in the management of healthcare and in helping to redesign the working environment. Harley concludes: “Our focus at Vaillant is to encourage attendance, rather than simply managing and punishing absence, with a wide range of flexible working options and a willingness to listen to the needs of individual employees in order to provide working conditions that work for both the employee and for Vaillant. The focus in manufacturing is around quality production, planned attainment and efficiency. However, if you haven’t got a satisfied workforce, all three will suffer. Kronos allows us to proactively manage absence and enables us to offer a wide range of flexible working conditions which I firmly believe improves attendance levels and staff retention at Vaiilant.”

For more information please contact Louise Atkinson, Kronos Systems on: +44 (0) 1302 381534 or Louise.atkinson@kronos.com

JCB Academy

diary

Students Alice Trotman, Ella Pilsworth-Straw and Sarah Dorland share their views on life at the Rocester-based JCB Academy for 14-18 years who want a more vocational secondary education.

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

The

JCB Academy provides us with practical skills which will not only be of substantial use to us in the real world, but will undoubtedly also look good on paper when it comes to the time for us to enter the workforce. At the Academy we have a number of workshops such as machine workshops, prototype workshops, electronics workshop, plastics workshop and the welding workshop. The school provides us with state of the art machinery, which is used in the manufacturing

industry worldwide to help us complete various tasks within our challenges. We are also proud to be known as the only school in the UK to house its very own plasma cutter. Also, the fact we have ten pillar drills makes manufacturing a product much more efficient as we do not need to queue to use the drill every time we need to make a small hole as a part of a project. The curriculum also involves students learning how to use all the machines to complete our challenges. To ensure the machines

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are correctly operated, each student must prove competency with each individual machine. When the teacher is satisfied with their ability to use a machine or tool correctly, students are awarded a safety card. The card signifies proficiency with that particular process and allows the student to progress with their challenges. In the workshop we have 20 lathes to cater for 20 students. This allows us to work independently in the workshops as well as in the class room. The ability to work autonomously is a critical skill that we will take with us to industry. The JCB Academy has much to offer in the way of technical excellence and allows students to work independently and blossom into bright young engineers and business leaders of the future. The wide range of tasks undertaken as a part of the JCB Academy education prepares us for a diverse range engineering opportunities and also helps to broaden and develop an interest in business operations.

Martin Laffey Apprentice Welder A&P Group Award winning apprentice Martin Laffey joined A&P Group – Tyne Yard in 2009. Though sickness delayed his enrolment on the Advanced Apprenticeship scheme for Welding and Fabrication Martin quickly proved he has a healthy dose of talent and ambition.

Martin

Laffey started his apprenticeship at A&P Group later than his colleagues in the 2009 intake, having been held back by a bout of the infamous swine flu. Notwithstanding this however, his apprentice supervisor, Marcel Lundy, says Martin not only caught up on the work he missed but he completed all units well before the specified deadlines. “Martin made an instant impact, so much so that he has been given responsibilities far beyond any other apprentice in such an early stage of development. Due to Martin’s maturity and ability to motivate others, teamed with his awareness of health and safety he has been given the role of lead apprentice,” says Lundy. The role, the first of its kind at A&P Group – Tyne Yard, has led to the training area being run by the apprentices with Martin in charge. Some of Martin’s responsibilities include acting as fire warden; delegating tasks amongst his peers; and ensuring that at all times the training area is safe and tidy and according to regulations. “Through the attitude he portrays and his approachable nature, Martin has gained the respect of both the second and third year apprentices and has become a role model they look up to. He has a natural ability to encourage and motivate all who work with him and drive them to successfully achieve both their individual and group objectives,” explains Lundy. Martin says following his apprenticeship he wants to work his way up to a supervisory role at A&P Group.“The thought of becoming a supervisor and wearing white overalls is what pushes me every single day to learn and improve my skills both practically and theoretically in my trade,” he says.

In 2010, EEF, the manufacturers’ organisation announced Martin as the North East winner of its Outstanding Achievement by a First Year Apprentice award. Martin was then announced as the highly commended recipient of the award at the national competition. Martin says he is proud to follow in his family’s footsteps, forging his own career in the shipbuilding industry: “I am from a family that has three generations of ship yard tradesmen and I’ve heard great stories as a child about the ships my father, his father and grandfather helped build. I cannot help but want experiences like these of my own to pass on to the next generation.”

CV in brief – Martin Laffey Title: Apprentice welder Age: 24 Skills and achievements:

Lead apprentice; overseeing fellow apprentices whilst in the training area EEF Future Manufacturing Awards outstanding achievement by a first year apprentice 2010 Assist health and safety advisor to identify possible accident zones and assess training area workshop for potential hazards First aid training MMA & MIG welding certificate Achieved certificates in abrasive wheels, manual handling, working at height and fire warden training

Education:

Ongoing: Advanced Apprenticeship in Welding and Fabrication (EAL) Member: The Welding and Joining Society 2003: St Joseph’s Comprehensive GCSEs x 6

Career Summary:

2009 - Present: A&P Tyne, Lead apprentice 2006 – 2009: Pyeroy, asbestos removal

Interests:

Watching and playing football, and spending time with family and friends

Have your say at www.themanufacturer.com

Be safe, not sorry with foreign exchange Dealing in foreign currencies can be fraught with danger if you play the markets by chance. But you can reduce your risk and save money by using specialist currency brokers.

Hunting for the right price – brokers at Smart Currency Exchange

The

manufacturing industry is at the forefront of globalisation. Exports are now more important than ever, with the most recent Purchasing Managers’ Index findings leading analysts like Lee Hopley at EEF to venture that manufacturers’ success in the immediate future could soon be largely dependant on their strategies for sending goods abroad. Coupled with this, manufacturers now need to buy in stock and components from all corners of the globe, for cost, quality and availability reasons. And, with the pound weak – against the euro in particular but other global currencies too – many businesses who might previously have been able to pay their suppliers in sterling will have found they are no longer afforded this luxury. This can cause major headaches. A company might line up a deal to buy several thousand of a certain component from the same overseas company for a year,

Finance

Insurance and Professional Services

which it will pay for in monthly instalments in the home currency of the supplying business. The price will be agreed when the deal is made, but if the currency goes up in value over the year the business will ultimately end up paying more in real terms. One way to mitigate this risk is to agree with overseas customers and suppliers that any losses that arise because of exchange rate fluctuations should be shared between the two parties. However, currencies don’t just go up in value: sometimes they go down. If you’ve agreed a deal to share the losses – and the finance director of the company is worth his salt – you’ll also have to share the spoils in the event that the exchange rate works out favourably for you. Banks and currency specialists offer services that can also reduce the risk. Most of the high street banks offer bank accounts set to a specific foreign currency. In operation, they are the same as a normal bank account, with all of the same features, but everything is displayed in the designated currency. Customers with these accounts can generally hope to enjoy favourable exchange rates with the issuing bank when they convert foreign currencies to sterling and vice versa. The banks also offer spot deals, whereby you can arrange to buy a set amount of foreign currency, either immediately or on a set date in the future for whatever the market rate is on that day. Similarly, forward contracts are available; these fix the rate for the future purchase at whatever the rate is on the day that you sign the deal. With these types of deal, you could be quids-in (or dollars-in) if you can accurately predict the way that the value of the currency in question will change. Of course, there’s also a risk that you could lose money. Also, the banks don’t give much away lightly; to profit to any real extent you’ll need to know something they don’t. This in itself could be quite a feat. One guaranteed benefit of spot deals and forward contracts though is that you usually don’t have to pay straight away. You arrange the deal and pay a small percentage of the total value of the order as a deposit. You then pay the balance when the time comes to buying the currency. This means that your money isn’t tied up between the time that you sign a deal and the time that you have to pay, which can be months.

Why pay more? It is possible to avoid the high street banks altogether, though, and it may be beneficial to do so. Foreign currency specialists like Smart Currency Exchange and Moneycorp offer the same services as the banks in this area but they say that by using them instead you can save significantly; in time, as well as money. The general design is that they offer more favourable exchange rates by vastly cutting their margins and seek to reduce the processing fees for international money transfers – typically £20£30 per transaction at the bank – or eradicate them

entirely. Some, including Smart, also closely monitor the market in order to select the right time to buy on its customers’ behalf. Carl Hasty, head of trading at Smart and a founding member of the company at its inception six years ago, explains: “Though they don’t tend to operate on fixed margins, the banks add anything form one per cent to four per cent to the price they buy foreign currency for when they sell it on. We typically add on just a half a per cent or less and then rely on sheer volume of business to make money.” The banks often just set their rates once a day, first thing in the morning, Hasty says. This means they need the high margin level to ensure they won’t incur losses if the rates drop heavily throughout the course of the day. Businesses like Smart which keep a close eye on the rates all day and adapt their own rates accordingly circumvent this pressure. Another benefit of using a currency specialist instead of a high street bank is the time that it takes money to clear in the beneficiaries account. “A bank will guarantee the money will be cleared in four working days” says Hasty. “For US dollars,

For US dollars, for instance, if we push the send button in the morning, it’ll be cleared by the afternoon Carl Hasty, Smart Currency Exchange

for instance, if we push the send button in the morning, it’ll be cleared by the afternoon.” In a world where time is money, this seems to represent pretty good value.

Rubber stamped savings One company that has benefited from utilising Smart’s services is Worcestershire-based hose and tubing manufacturer Goodflex Rubber. Last September, the company lined up an agreement to import €100,000 worth of rubber from Europe, working out its margins based on the then rate of €1.2 per pound. However, the company didn’t need to pay until January. “We didn’t want to tie up £84,000 for four months by buying the full amount of euros there and then,” says Mark Dufty, Goodflex Rubber’s managing director. “Unfortunately, when we came to place the order, the exchange rate had dropped to €1.19 per pound.” All of a sudden the deal was looking less attractive. However, the company contacted Smart who advised that the market looked like it might recover again soon. Goodflex instructed Smart to buy its currency when the rate peaked again. Sure enough, the exchange rate promptly grew

Finance Insurance and Professional Services

to €1.2160. Goodflex placed a forward contract order fixed at that rate and immediately saved itself almost £2,000. It proved a shrewd move – when January came around and with it the time to pay, sterling had weakened considerably against the Euro to €1.13 per pound. Had the company waited until then to order its currency it would have been over £6,000 out of pocket and its margins would have been obliterated. As well as spot deals and forward contracts, currency specialists offer stop loss orders and limit orders. It is with these facilities where the organisations’ eagle eyes on the market come into their own. With a stop loss order, a company can instruct the currency firm to buy a certain amount of stock if the market rate goes down to a level which the business deems is the lowest it can afford to

Smart Currency Exchange has put together a list of check points which it says you should consider when looking for a foreign currency specialist Ask yourself the following:

We didn’t want to tie up £84,000 for four months by buying the full amount of euros there and then. Unfortunately, when we came to place the order, the exchange rate had dropped to €1.19 per pound Mark Dufty, Goodflex Rubber

pay. This protects the company from suffering if the market nosedives. Conversely, a limit order is for companies that do not necessarily need foreign currency at any set point in time but are happy to buy it if the rate goes up to a level at which the company thinks it can then profit from it.

Spoilt for choice There are many foreign currency specialists on the market and all offer similar services which they will process in much the same way. This is because the industry is regulated by the Financial Services Authority, just as the banking industry is. Smart says its niche and its advantage over its competitors is that it is the only UK company which doesn’t use a commission structure for its brokers. “Our unique selling point is that none of our guys receive individual commission and this in the best interests of the trader,” says Hasty, “because the broker can’t look at a deal today and see exactly how much they are going to make off that deal and see what will be in their pay packet at the end of the month. This means that although they want you to do the transaction with us they’re not inclined to push you into making a deal there and then – it’s better for all parties concerned if we watch the market for you and make sure we buy at a better rate.”

Do they charge some kind of set-up (upfront) fee? There are a few that do this, but the majority do not. The only thing you should pay for is: 1. The money (at the agreed rate) 2. The transfer fee imposed by your bank 3. The fee the overseas bank might charge to accept transfers 4. Some exchange specialists charge a fee for transfers under £10,000 Does the company specialise in currency exchange only or are they a ‘jack of all trades’, trying to sell insurance and other products to dilute their offering? When calling the company, do you deal with anyone that picks up the phone or do you have a dedicated account manager and/or trader? Does the company offer helpful resources such as daily currency updates or educational reports? Do the currency traders make commission on selling you currency? If the trader makes commission on your currency purchase it’s possible that it’s in their best interests to make the most on the transaction and get you to trade even if the currency is at a poor rate. When asking the specialist about rates or the market do they come across as knowledgeable & talk in terms that anyone can understand rather than financial jargon?

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UK manufacturing needs to focus on Emerging Asia Trevor Williams, chief economist at Lloyds Bank Corporate Markets, provides expert analysis of the economic outlook for UK with specific focus on the manufacturing sector.

After a decade of economic growth driven by internal demand the UK needs to focus on external demand and net investment if it is to expand as strongly in the next 10 years. What are the chances that UK manufacturing can assist in this rebalancing? Latest figures for trade showed that net exports (exports minus imports) contributed 1.7 percentage points to growth in Q1 2011, the biggest contribution since 1955. Even if this is not sustainable, it is nonetheless impressive. It may be surprising to know but UK companies are currently sitting on around £300bn of cash, accumulated since the second quarter of 2002. What is noteworthy is that this net cash accumulation was taking place before the recession started in 2008 and continued ever since.

With the fall in output in services and manufacturing came a fall in profitability as measured by the rate of return on capital employed, (see Chart B). But with the recovery in output has come a rise in profitability, especially in the manufacturing sector. And although the profitability gap between manufacturing and services has narrowed, it remains wide.

Chart C:…as manufacturing recovers strongly

Chart A: UK companies cash pile still rising… In some senses, a build up of cash during the recession was to be expected as companies were keen to ensure that they rode out the recession and because of a desire to reduce debt in the context of the financial crisis. But the fact that firms started to build up cash well before the downturn suggests that they had begun to worry about debt levels well before the financial crisis began. This was the right strategy. Indeed, but for that rise in firms’ financial surplus ahead of the crisis, the effects of the recession would surely have been worse than the 5% fall in GDP recorded in 2009.

Chart B: …and profitability is recovering…

The recession of 2008/9 was led by the manufacturing sector, which saw output fall by nearly 15% (see Chart C). And although manufacturing has been leading the recovering, the level of output is still some 8% off its peak prior to the downturn. This is both good news and bad. The good news is that it means there is plenty of scope for further growth. The bad news is that the longer it takes for this to happen, the less likely it is that some of this capacity will come back into use. That said, the prospects for a UK economic recovery remain favourable. Strong growth in the rest of the world is persisting in spite of the sharp rise in oil prices to well over $100 a barrel, the rising risk of debt default amongst so-called peripheral Euro zone economies and earthquakes in Japan. Even high price inflation has not derailed the recovery in manufacturing. Whilst price inflation is not leaking into wage inflation the Bank of England is willing to sit tight, and may not raise interest rates until well into 2011 or even delay any rise until next year. Since manufacturing is expected to lead the recovery in output, investment spending is expected to lead the recovery in the expenditure measure of economic activity. To this end, the results from the survey by Lloyds Bank Corporate Markets and The Manufacturer suggest that investment intentions have improved. Evidence from the CBI paints the same picture, with investment intentions amongst UK firms the highest since 2007. What is more, order books and industrial confidence are also at their highest levels since 2007 (see Charts D and E) suggesting that further gains in both manufacturing output and business investment spending are likely in the coming year.

Chart D: Industrial confidence is high and order books are strong…

Chart E: …boding well for further output gains A sense of perspective is required, however, about the scale of the task that lies ahead. The manufacturing share of the UK economy continues to decline, and is now about 13%. Employment is down from 3.6m in 2002 to 2.4m. One problem is that the UK’s share of total global trade continues to fall, and that is because it has failed to sell enough goods to the fastest growing economies in the last 20 years and because the currency has been overvalued. Over the last decade the UK share of goods destined for the emerging market economies has barely risen, at a time that their share of global GDP has climbed by over 10%. Focusing on these markets, whilst maintaining existing links to developed markets, seems the way forward for UK manufacturing. This strategy will require a supporting infrastructure of educational skills and a renewed focus on productivity. Looking ahead, the UK needs to be less reliant on domestic demand to lead growth. Consumer spending will be held back by the high burden of debt resulting from a decade where it was the key driver of UK economic expansion. That period is now at an end, and new growth drivers need to be found, otherwise, the economy will only be able to grow by about 2% per annum rather than the 2.9% recorded in the decade to 2007.

Chris Chambers and Stuart Apperley, both relationship directors specialising in manufacturing at Lloyds Bank Corporate Markets, provide further insight. UK Manufacturers Cautious Feedback to date from clients suggests a certain caution in undertaking significant investment either in capital expenditure or M&A activity whilst economic conditions remain mixed in certain major economies. Dealing with Volatility Volatility whether in foreign exchange, commodities or input costs remains a challenge for UK manufacturers, especially exporters. An ongoing hedging programme can help reduce risk and smooth volatility. Liquidity is Key UK corporates seem to be keen to ensure sufficient liquidity hence cash is being held on balance sheets. Support for Exporters The Export Credits Guarantee Department’s (ECGD) decision to cover a broader range of goods may assist export efforts. This will include finished manufactured and intermediate goods with a contract value of £20,000 upwards for UK businesses looking to export to nonOECD countries.

The new shape of corporate banking

Manufacturing matters

PROFILE:

We’ve also been drawing on the expertise and knowledge of EEF - the manufacturers’ organisation to gain a more holistic view. With this insight we have developed a bespoke proposition to support the specific needs of the industry. Firstly, we have come to understand that manufacturers have really suffered from uncertainty around bank funding and future funding rates. We heard that uncertainty makes it especially tough for manufacturers - with their high capital requirements - to invest for the future.

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So manufacturers can be confident that Santander has the capital to lend, the willingness to lend it, and the commitment to help you feel secure.

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As a result, we’ve looked at how we can give manufacturers more security about rates, fees and future financing. We now commit to keep the same rate on the overdraft we offer for two years, and committed facilities for invoice financing for three years – three times the industry norm of one year. And to support capital investment, we offer preferential rates on asset finance for manufacturing businesses. We’ve also opened up extra streams of funding for manufacturers, with a dedicated tranche of European Investment Bank capital set aside specifically for lending to manufacturing clients. That means, as a manufacturer,

you can go straight to the front of the queue for discounted rate finance. As well as funding, specifically for manufacturers, we’re also increasing our overall lending. We’ve made a firm commitment to lend £4 billion to SMEs this year, which is 25% up on last year’s lending. So manufacturers can be confident that Santander has the capital to lend, the willingness to lend it, and the commitment to help you feel secure.

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So over the past year, we’ve been talking to manufacturers up and down the country to understand the challenges they face, what opportunities exist, and what we can do to help them achieve their goals.

Santander has been really proactive at helping us develop the business…

The second critical area for the manufacturers we talked to was exports, which was the part of their business that they were keenest to develop. And manufacturing exports are crucial for the wider economy - indeed EEF has found that manufacturing is responsible for 55% of all UK exports. To help support exporters, we offer six months’ fee-free international payments, as part of a package to help businesses develop overseas. We were also instrumental in developing, and are committed to supporting, the Government’s Export Enterprise Finance Guarantee Scheme, which offers a specialist range of trade finance services for exporters. In addition, our international network lets us help our clients with the contacts to expand. Rakesh Sharma is CEO of Ultra Electronics, a niche supplier of smart electronics and software. He says, “Santander has been really proactive at helping us develop the business, particularly with exports. When we moved into the Brazilian market, Santander helped us set up meetings we’d never have had the contacts to arrange for ourselves.”

Damian McGann Head of Business Development (UK), Santander Corporate Banking Having joined Santander just over 15 months ago I’m relatively new to the company but not to the industry. With 22 years’ experience, I have covered a variety of roles within the banking sector. My last two roles have been running businesses headquartered in Birmingham and Aberdeen, where they know a thing or two about the changing landscape and cutting edge manufacturing. One aspect that has spanned my whole career is working closely with customers and developing lasting customer relationships, something that is central to the Santander ethos. At Santander we have been successful in attracting some excellent manufacturing companies across the country who value a genuine partnership with their bank. Our team pride themselves on building long term relationships with customers which can only be done by taking the time to truly understand how the business works and its aims and objectives. Only then are we in a position to apply our sector expertise and recommend a solution that will help them achieve their goals.

The dialogue doesn’t stop here - we’re still working with EEF to respond to manufacturers’ changing needs and support the UK’s broader economic recovery. So if you’re a manufacturing business looking to invest, come and start a conversation with us.

If your business could benefit from a personal approach to corporate banking, contact us today:

Damian McGann Head of Business Development

Damian.McGann@santander.co.uk or on 07809 493 806 www.santandercb.co.uk

TM MAY 11

At Santander we know that manufacturing businesses will play a fundamental part in rebuilding the UK economy and we appreciate that as a bank we have a crucial role to play in supporting manufacturers.

EEFInsight Agency workers regulations On October 1 this year the Agency Workers Directive will come into force. This will mean changes for all businesses that use agency support. Charlotte Hagestadt, principal advisor and solicitor at EEF, explains the primary issues for hirers in manufacturing.

The

latest figures for 2011 show that 50% of manufacturers in the UK use agency workers to some degree. The reasons for this vary from company to company but major motivators include; seasonal flexibility, access to niche skills in high demand by the industry (particularly common in aerospace), a way of getting around head count freezes (particularly common in subsidiary companies of large groups). According to Charlotte Hagestadt such rationales will have to be reviewed before October this year and all hirers will have to change their practices to some extent when hiring agency workers. The most obvious change will be the requirement for hirers to give agency workers equal pay with comparable in-house employees after 12 weeks of employment. Although this sounds simple Hagestadt explains that there are potential stumbling blocks and further considerations: “It is not as easy as it sounds to give the right information [to an agency]. For jobs with a set pay scale it is easy to see what wage you should be telling the agency to supply. But often employers have people doing a certain kind of job who are paid all sorts of different rates.” Bonuses, shift allowances and overtime rates must also be matched and it is therefore quite possible for a hirer to make a judgement about agency worker which would not be upheld by a tribunal. Hagestadt says that EEF have received a high volume of enquiries from members unsure about what the correct rate of pay for a particular agency worker is. In addition to equality of pay the directive will demand equality of access to facilities, such as canteens, from day one of their employment. In terms of employee benefits hirers will find that their responsibilities to agency workers will remain largely unchanged with regards to benefits like sick pay, and pensions (for the moment). The one big area of change however, is the necessity of providing equal holiday allowances to in-house and agency employees. Hirers will have the option of offering pay in lieu of non statutory holiday but, as Hagestadt points out, this will effectively incur an additional cost and therefore another administrative hoop to jump through. Another area which will be of particular importance to large employers will be the requirement to advertise relevant internal vacancies

The Agency Workers Directive: what does it mean for hirers? The administrative burden tied to using agency workers will increase The cost of using agency workers will increase for the vast majority All hirers will have to change their internal procedures for the use of agency workers Some of the reasons why hirers have traditionally used agency workers will no longer be valid or the benefits diminished The Department of Business Innovation and Skills has issued advice for hirers on how to conform with the new regulations. This guidance can be found at www.bis.gov.uk/policies. EEF have broadly supported this guidance but have called for clarification on certain issues such as such as the scope of different bonus structures. To help manufacturers deal with the Agency Workers Directive EEF is running workshops for employers (see www.eef.org.uk for details). EEF also offer individual advice to members concerned about the impact of the new Agency Workers Directive.

to agency workers. Hirers will still be able to pick criteria for their vacancies which include requirements like time in service but they will have to be careful not be provoke discrimination claims. Furthermore, Hagestadt says that while the process of advertising may not be challenging for hirers the process, for some, of dealing with a large number of applications will be considerable: “The difficulty for companies who use a lot of agency workers, and are popular places to work, is that they will be inundated in applications.”

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The fit men

of Europe? A year after the introduction of the fit note, EEF has published its annual figures on sickness absence. And there is evidence to show that the UK is no longer the sick man of Europe, says Roberto Priolo.

Aneurin

“Nye” Bevan, the Labour minister who in 1948 gave the NHS to a Britain worn out by years of war, once said: “We shall never have all we need and expectations will always exceed capacity. The service must always be changing, growing and improving.” He was referring to the problems affecting what was one of the world’s most advanced pieces of social legislation. The government must have taken Mr Bevan’s words literally last year, when it decided to reform a 62-year old system changing one of its more wellknown elements: in April 2010 the familiar sick note was replaced by the fit note. The decision came as part of an effort to reform the work system in the UK and to promote wellbeing at work. It was also a measure that the Government hoped would help reduce the estimated £100bn that sick leave costs Britain every year, while preventing work-shy employees from staying off work for too long. Just over a year after the introduction of the fit note, EEF, the manufacturers’ organisation, has published its annual survey on sickness absence, which seems particularly timely: manufacturing is being looked at as one of the sectors that can accompany the country through the recovery

and secure growth. A healthy workforce and a low absence rate can ensure companies take full advantage of the key skills their staff have to offer. The Sickness Absence and Rehabilitation Survey 2011 carried out by EEF and not-for-profit health insurance provider Westfield Health seems to bear encouraging news. First of all, it reveals how 20% of employers have already seen some practical benefits from the introduction of the fit note. Sayeed Khan, EEF’s chief medical adviser, comments: “Within a year of a brand new system, it’s impressive that 20% of employers are saying it’s already improving communication and helping employees return to work earlier. It’s encouraging that we’re already seen improvements, but there is still a long way to go so that all companies reap the full benefits of the change.” The number of days off British workers take on average has gone down 27% to 5.0 per year (it was 6.7 in 2007). An even more positive piece of data is that 45% of employees didn’t take any days off in a year, while the recession may have played a role in this, EEF believes there has been a trend towards less and less absence for years. In general, the proportion of companies indicating an increase in absence has declined steadily, from 39% in 2007 to 32% in 2010. Khan says: “There are a lot of good British workers out there. We are often labelled ‘the sick men of Europe’, but we are not. There may be some people who are a bit work-shy, but 45% of workers didn’t have a single day off, and many others too no more than one or two days off in the last year.”

Down with stress According to the EEF survey, the reasons why people take days off tend to remain the same over

Specialfeature Sickness absence with EEF

time: 90% of companies agree that minor illnesses are the most common cause of short-term absence, while more serious conditions are major causes of long-term absence. However, there is a key point the survey raises that seems to contradict the common belief that stress is one of the most frequent causes of absence: at least for EEF members, the level of absence caused by stress is stable, if not slightly decreasing. The number of companies placing it in the top three of causes of sickness absence is half that of 2006. Khan believes this is not a chance finding. “We have five years worth of trends that attest stress has been less and less a cause of absence. EEF spent a lot of time and effort getting employers to accept that there is stress in the workplace, and giving them guidance on how to tackle it and manage it in a sensible way. This guidance is bearing fruits,” he says. Stress and other conditions like back pain are good examples of cases when early intervention by the employer can bring benefit both in terms of reduction of absence and employee wellbeing. According to Steve Pointer, head of health and safety policy at EEF, picking up an issue early on can make a big difference. He says: “It’s very important that line managers have some training in managing sickness absence. Identifying when a person has an issue with stress, depression or anxiety disorders and picking it up immediately before it becomes a big problem is very important, and occupational health services can help with that. It’s one of those cases when investing £200 or £300 in some basic treatment can actually save a lot more money in the long term.” Setting targets and implementing policies are key elements to a good management of sickness absence, and employers need to do more in this direction: policies have proven extremely beneficial, and training managers can help them detect unjustified absence during return-to-work interviews and identify steps that would help a worker going back to work sooner. In addition, the EEF survey found an increase in the number of companies, especially SMEs, that use occupational health services. Often these are provided by external bodies.

Private vs NHS In 2010, over two fifths of companies who EEF interviewed made use of private healthcare to speed up rehabilitation. Jill Davies, chief executive of Westfield Health, says: “We suspect that private provision may prove a rising trend as the UK comes out of recession and as health service reforms continue to create public uncertainty about the availability of NHS services. The government certainly has a role to play here. At present, treatments such as physiotherapy may be taxed as a benefit in kind,

particularly if it treats a condition not caused by work. This is a major disincentive to their provision. Changing this would have only a small impact on tax revenue, but would send an important signal to employers about the importance of their role in providing for rehabilitation.”

Fit for purpose The area where the fit note can really make a change is rehabilitation. For this to happen, however, a change in culture is necessary. Both GPs and employers need to modify their approach. General practitioners need to learn how to use the fit note to its full potential. At the same time, employers need to become more proactive and flexible in terms of the tasks they can have their workers perform. The purpose of the fit note is to allow people back at work earlier, and this can be achieved only through a collaboration between GP and employer. The first needs to specify the types of tasks an employee can and cannot perform; the latter has to figure out ways to modify the tasks and deploy a member of staff even when they can’t carry out their usual activities. Khan emplains: “Employers just need to be a bit more creative about what can be done to make people go back to work earlier. They can’t slow down a production line, of course, but they can put employees back to work on the line for a shorter time and then having them do a nonmanual job.” Pointer agrees. “If a GP says people can go back to work if they can sit down or work from home, employers should look for opportunities to do it rather than at reasons why they can’t,” he adds. The survey found that employers proactively engaging with their local GP tend to receive much better fit notes back. Promising as it is, the fact that fewer companies see GPs as a barrier to rehabilitation doesn’t mean that practitioners don’t need to make an extra effort. Many tend to write on fit notes things like “light duties”, which is a general and unclear recommendation. “Needs to seat” or “no lifting” are much more helpful. With funding from the Department of Work and Pensions, the Royal College of General Practitioners has trained 3,000 GPs. This has been very useful, but a lot more needs to be done: there are 45,000 GPs in the country. EEF hopes to reach at least one practitioner in each practice in the UK, to make sure information spreads. Pointer adds: “GPs need to understand they don’t need to know everything about a workplace to provide constructive and helpful information.” Several steps in the right direction have already been made, but only better communication and a change in culture can ensure we reap all the benefits the fit note can bring, while meeting Mr Bevan’s desire for an enhanced health system.

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A stitch in time Recognising

that better maintenance of its plant and equipment would help it on its journey to manufacturing excellence, Heinz Frozen Foods turned to an enterprise asset management application (EAM) from Infor. The goal? Better maintenance—and, what’s more, lower-cost maintenance, too. But having implemented the EAM solution, the business quickly realised that a significant opportunity, linking its maintenance activities to its ongoing lean programme, was being missed.

Better maintenance — and better performance tracking — can unlock the ‘hidden factory’, boosting reliability and output. But how best to do so, asks Malcolm Wheatley. “We started to identify maintenance waste elements—those that didn’t add value—and to use Infor EAM as it was meant to be used: in concert with lean manufacturing and lean maintenance,” says Heinz maintenance manager Milton Slagowski. “What we learned was that lean practices are instrumental in implementing an EAM application to achieve excellent results quickly and cost effectively, and that asset reliability is a key tool for successful lean manufacturing operations,” he explains. “In other words, lean manufacturing and asset reliability have a mutual relationship.” Summing up, Slagowski says: “We saw lean maintenance as the way to preserve our assets in good operating condition, and to improve their reliability in both the short term and the long term.”

There’s a lot of ‘technology avoidance’ going on: we see manufacturing managements spend an awful lot of time and attention on ‘lean’ and people development, and relatively little on asset-related opportunities Brian Holliday, Divisional Director of Industrial Automation, Siemens This thinking led Heinz management to recognise that reactive maintenance—namely repairing machinery when broken—is itself inherently wasteful, typically costing up to five times as much as planned maintenance. This maintenance, incorporating lean practices, on the other hand, was not only cheaper, but could also enable an estimated 30% more actual maintenance work to be completed. The upshot? The business achieved considerable gains in process efficiency while also cutting the cost of the maintenance activities that it carried out—a virtual cycle that quickly drove benefits to the bottom line. Slagowski details: “We’ve realised 10% to 11% efficiency improvements,

IT in

manufacturing

and our maintenance costs have dropped by 5% to 10%. “We’ve also reached world class levels of maintenance inventory management: 1% of estimated replacement value.” All of this paints a picture that is undeniably tempting in its combined promise of better asset reliability, lower maintenance costs, and greater operating efficiencies. But for all of that, evidence shows that, in practice this promise is proving eminently resistible to most manufacturers. Time and again improvement initiatives within manufacturing plants seem to side-step equipment-related issues, and focus their attentions elsewhere.

A gearbox failure that happens twice a year gets logged, but the sealing machine which jams twenty times a shift doesn’t. Because it takes only a couple of minutes or so to correct the problem, it’s deemed too trivial to record Steve Knight, Associate Director, Newton Europe

Technology avoidance Around since the late 1980s and early 1990s, Computerised Maintenance Management Systems (CMMS), EAM systems and Overall Equipment Effectiveness (OEE) systems could have been expected to do much more to address this opportunity. Each, in their own way, acts to direct management attention towards pieces of equipment that require corrective actions or maintenance activities - OEE systems by highlighting performance shortfalls, and CMMS and EAM systems by identifying when and how to best carry out maintenance activities. Yet uptake on the factory floor is patchy at best— especially in small and medium-sized manufacturers, where such approaches have generally yet to make much headway. The result? For most manufacturers, the ‘hidden factory’ is a huge opportunity, and one that lean manufacturing on its own has only gone so far to address. “There’s a lot of ‘technology avoidance’ going on: we see manufacturing managements spend an awful lot of time and attention on ‘lean’ and people development, and relatively little on asset-related opportunities,” says Brian Holliday, divisional director of industrial automation at Siemens. “There’s a culture of managing by clipboards and whiteboards, rather than a reliance on an automated solution to

maintenance or equipment effectiveness that can deliver highly reliable data at a far higher level of granularity and reliability.” Worse, adds Steve Knight, associate director at operational and financial performance improvement specialists Newton Europe, clipboard-based approaches to data capture can be actively misleading. The problem? Humans, despite managements’ best endeavours, typically take note only of interruptions or breakdowns that they deem to be significant. What’s more, they are highly subjective when it comes to interpreting failure modes and ascribing causes. “The result is that the gearbox failure that happens twice a year does get logged, but the sealing machine which jams twenty times a shift doesn’t,” says Knight. “Because it takes only a couple of minutes or so to correct the problem, it’s deemed too trivial to record—yet the overall loss of predictive capacity is many times greater.” Better still, he adds, systems for tracking OEE can usefully supplement whatever maintenance regime a plant is running, by identifying instances when periodic, planned or preventative maintenance practices haven’t succeeded in preventing performance degradation. “When OEE declines, it’s often an indicator that maintenance might be required,” says Knight. “In an ideal world, best practice should call for OEE metrics to directly feed into maintenance systems—although the companies that do this are few in number.” Indeed, adds Andy Bates, a director of Artesis, a supplier of condition monitoring solutions, performance indicators can provide a highly accurate indication of asset condition, and therefore the applicability of maintenance activities. “Several decades’ of in-depth research has identified that planned maintenance—carrying out maintenance activities at fixed intervals of either time or production volume—isn’t necessarily the best or most economic way of scheduling maintenance,” he notes. The familiar ‘bath tub’ failure curve, in short, turns out to only apply to a minority of industrial equipment—perhaps as little as 10%. For the other 90%, there’s no significant increase in failure rates when maintenance intervals are extended. “The technical case for condition-based maintenance is pretty well proven—provided that you’ve got the people and processes in place to properly interpret it, and implement appropriate corrective action. Sadly, when companies possess actionable information, they don’t always act on it.”

Integration Talk to experts such as Bates, Knight and Holliday, and the vision they paint is of a manufacturing environment where maintenance happens when it should, and is driven not by simplistic assumptions about equipment degradation over time, but instead

IT in manufacturing

by real-life equipment usage, production output and environmental conditions. The problem? “Companies—especially smaller ones—can quickly find themselves with an information overload,” says Bates. Talk to some of the leading exponents of EAM and CMMS systems—companies such as Infor and

Computers help to bring intelligence to condition-based monitoring and predictive performance. Tracking energy consumption is not only an indicator of asset performance, but also a useful way of reducing energy consumption Rod Ellsworth, Vice President of Global Asset Sustainability, Infor

Epicor, for instance—and it soon becomes clear that the future direction of those systems revolves around not just digesting masses of conditionbased equipment data from HMI, SCADA and OEE systems, but also intelligently interpreting it so as to generate actionable information. “Computers help to bring intelligence to conditionbased monitoring and predictive performance,” says Rod Ellsworth, vice-president of global asset sustainability at Infor. “Tracking energy consumption, in particular, is not only an indicator of asset performance, but is also a useful way of reducing energy consumption.” Globally, for instance, over 80 companies have added energy consumption indicators into their Infor EAM and CMMS systems in the last eighteen months, says Ellsworth - driven not primarily by the green agenda, but by asset performance. The logic? As equipment components wear or oil viscosity breaks down, or bearing failure induces vibration, the consequent change in energy consumption can be detected long before any other signs become apparent. “And the next generation of EAM systems will make it even easier to incorporate real-time energy consumption into the maintenance decision,” promises Ellsworth. Epicor, too, sees change ahead, driven by a heightened awareness among manufacturers that maintenance matters. “The recession has really changed companies’ views on asset management, especially in the midmarket,” says James Norwood, senior vice-president of product marketing at Epicor. “They’re running equipment longer and harder—and whereas once they could go out and just replace broken or worn out

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assets, tighter finance availability means that they now realise they have to maintain their assets better.” What this means in practice is making appropriate time available within busy production schedules for technicians to actually carry out maintenance activities. As both production and maintenance mangers know to their cost, all too often it seems as though maintenance is scheduled for precisely the wrong time, in terms of workload and customer commitments. Finite scheduling specialists, such as Preactor, have long known that an important rationale for moving to an optimised scheduling tool is precisely this ability to construct schedules that permit both maintenance and manufacturing to co-exist, without adversely impacting customer commitments. Talk to ERP vendors - or at least, those with credible and sought-after EAM or CMMS offerings - and a similar story emerges. Epicor customer Thermotech, for instance, openly credits the tight integration between Epicor’s EAM solution and its scheduling capabilities as a decisive factor in the selection of the solution. With eight manufacturing plants around the world, and 270 expensive injection moulding machines to maintain - each costing up to half a million dollars - the ability to integrate the planning of preventative maintenance with the planning of production schedules was undeniably an important capability on its ‘wish list’; says chief operating officer Matt Mahmood.

The recession has really changed companies’ views on asset management, especially in the mid-market James Norwood, Senior Vice-president of Product Marketing, Epicor

“We did look at other systems, but the lack of integration wasn’t attractive, as it would have meant managing two different systems, which would have required additional human resource,” he relates. “Now, we have global visibility into metrics such as uptime, downtime, asset performance and availability - and, what’s more, we can schedule preventative maintenance knowing that it won’t affect customer commitments.” The best of both worlds? Undoubtedly. Yet, such examples of excellence are in the minority. EAM and OEE systems are rather like GPS-based SATNAVs, sums up Siemens’ Holliday: “Before you got one, you didn’t realise just how much you needed it.”

IT in

manufacturing

ITnews.. ERP

New release of Dynamics AX offers ‘mixed mode’ and better handling of lean Anticipated to be released in August, the latest version of Microsoft’s popular AX-badged Dynamics ERP system— Microsoft Dynamics AX 2012—is expected to contain a number of features likely to be of great interest to manufacturers. With the release just weeks away, Microsoft White Papers and blog postings from the company’s executives are providing tantalising glimpses of what the future holds. So what do we know? According to insiders, Microsoft Dynamics AX 2012 will allow companies to run process and discrete manufacturing models in a single solution. What’s more, the mixed mode capability will also permit manufacturers to better model the implementation of lean manufacturing practices in the way best suited to their own individual circumstances. Specifically, they will be able to model and execute lean manufacturing production flows so as to reduce delivery lead times, trim excess inventory between work centres, treat contract labour as a service—not a Bill of Materials component—and better define kanban rules to view, plan, and run kanban jobs. A new operations resource model will also enable companies to efficiently use resources at multiple locations. What’s more, they will be able to schedule the resources—vendors, people, machines, tools, or locations—that are particular to individual jobs and operations based on their capabilities, with a scheduling engine handling resource selection. Other features include pricing enhancements to manage mass changes, smart rounding rules based on currency and amount, and translation of prices in multiple currencies based on a reference price list. When exactly in August will it be released? Now that we don’t know.

Cloud computing

Plex Systems continues to achieve in cloud computing The provider of the Plex Online service was awarded the top prize in the ‘Best Operations Management Solution’ supercategory at the annual Software & Information Industry Association awards evening.

Plex Online was also awarded ‘Best Business/Competitive Intelligence Solution’, and was named a finalist in the Best Cloud Management Solution and the Best Supply Chain Management Solution categories. The CODiE Awards are presented annually by the Software & Information Industry Association to showcase the industry’s finest products and services, while honouring excellence in corporate achievement. CODiE is an acronym that combines CODE with the symbol for information (‘i’), and represents the event’s focus on the software and digital industries. Plex Systems CEO and president Mark Symonds was present to accept the awards on behalf of the company. On receiving them, he said: “We are extremely proud to receive the top recognition in the ‘Best Operations Management Solution’ category, given the strong nominees in all the CODiEs categories, [and] we are especially pleased to have been recognized in four separate categories as Plex Online is designed to assist manufacturers in meeting business needs across all departments and business functions.”

Benchmark your business against the best—with a free on-line benchmarking tool from one of the world’s top analyst firms.

Ever

wondered how your manufacturing company compares to ‘best-in-class’ manufacturing businesses across a whole range of operational excellence metrics? You have? In which case, have you ten minutes to spare? Because if you do have ten minutes or so to spare, then a free on-line self-assessment benchmarking tool aims to tell you exactly how you measure up to some of the world’s very best manufacturing businesses. And aims to point you, what’s more, at what you can do to close the gap. That, in short, is the promise extended by high-profile analyst firm Aberdeen Group, who have placed on-line a free survey and analysis tool for readers of The Manufacturer to try out. “The idea is to help companies really understand what it means to achieve operational excellence for discrete manufacturers -- and to provide them with customtailored recommendations as to how to improve,” explains Aberdeen senior research analyst Matt Littlefield. Sponsored by global IT consulting specialists Columbus

IT, the on-line survey tool probes the pressures, priorities and problems faced by discrete manufacturers. Simply log on and enter your responses, says Littlefield, and the result will be a free downloadable PDF report—for you to study, circulate to the board, or debate with your team as appropriate. The intention, he says, is to ‘square the circle’ between the strategic and operational excellence challenges faced by companies, and the corresponding business capabilities and IT enablers that they have on hand to address those issues. “Every respondent receives a personalised scorecard telling them how their business ranks against hundreds of others,” he says.

So what does ‘best-in-class’ actually look like? “We’re definitely seeing the best-in-class businesses deploy standardised business processes,” says Littlefield. “And we’re seeing executives who think of themselves first and foremost as manufacturing executives, and who have a passion for manufacturing.” “And on the performance side, they’re getting real-time visibility into the supply chain, their manufacturing operations, their customer requirements and their new product development process—usually, although not always, through some kind of dashboarding or visualisation tool. In short, they know what matters in their businesses, and they make sure that they have the metrics on hand in order to know how they’re performing.”

Wondering how your business compares? To find out, take the test at: www.columbusit.co.uk/aberdeen

The Aberdeen Group

Insights into operational excellence

And lightweight it isn’t. Not only does the benchmarking survey carry the imprimatur of Aberdeen, one of the world’s top analysts firms, but manufacturing and operational excellence specialists from Columbus have worked with Aberdeen to refine and condense the survey into an action-oriented tool designed to deliver value in the time it takes to drink a cup of coffee. “We do not know of a better way to gain actionable manufacturing insights in just ten minutes,” says Chris Green, Columbus’ marketing manager. And for those who complete the benchmarking survey, the insights that they gain can prove compelling reading. The gulf between best-in-class and the rest is very real, insists Aberdeen’s Littlefield—although, he adds, it’s very capable of being closed.

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PLM

ITnews...

Relationship between Siemens PLM and Daimler AG renewed Siemens PLM has announced a new 10-year contract with car manufacturer Daimler AG. It entails a commitment to Siemens PLM Software and its products a pledge to an extensive rollout for the replacement of its current computer-aided design (CAD) environment with new NX software. As part of the worldwide 10-year agreement, Daimler AG will begin using Siemens PLM Software’s technology in its first vehicle series beginning in 2012. Siemens PLM Software will begin enabling Daimler’s network of suppliers

in July 2011. Daimler’s overall objective is to improve the support of its business processes by implementing a seamlessly integrated CAD suite. Professor Alfred Katzenbach, information technology management research and development at Mercedes Benz Cars said: “Our 10year agreement reinforces the clear objective of Daimler AG to use the most advanced technology in the industry to deliver unsurpassed quality products to our customers.” “Our objective is to further improve the support of our business processes by implementing a seamlessly integrated CAD suite,” he added. “Daimler’s clear commitment and

APS

Production planning

Tower Automotive benefits from Preactor’s APS technology

Planit releases software to help users with their MRP data

Preactor has announced that that is has helped to deliver significant benefits Tower Automotive’s Malacky plant. A significant part of the Tower Group’s growth has been the Preactor Advanced Planning and Scheduling (APS) system first implemented by Preactor and QAD partner Minerva. Minerva representatives in the Czech Republic and Slovakia recommended Preactor to the Tower Automotive plant in Malacky to accompany its new QAD ERP system. This system was also implemented by Minerva. Previously the company had been using Microsoft Excel to make plans, which had numerous disadvantages including involving a highly labour intensive process. Tower Automotive planning and purchasing manager Marian Szabo said: “In retrospect, I see the fact that production was launched along with the planning as very positive. It was a great advantage for us in terms of time saved, with the preparation of data for planning and launching of new items being evenly distributed in time.” Previously the planner used to spend up to 10 hours per day with the preparation of just one plan. Now the complete planning process takes only one hour a day. The most impressive benefit has been the reduction in stock turnover, which used to be 25 days and is now only nine days. Mike Novels, Preactor CEO, commented on the long term success achieved at the plant: “A key strength of Preactor is its ability to enable and enhance existing investments in ERP and this is an excellent example of Preactor working in harmony with QAD to deliver sustained, combined benefits. We share the company’s optimism looking to its future and expanded use of Preactor.”

implementation plan for NX highlights the enhanced strategic relationship we initially announced in November 2010 and underscores the long-term relationship that we’re both looking for in this union,” said Chuck Grindstaff, president and chief technology officer, Siemens PLM Software.

The latest release of the Javelin advanced production planning and control software from Planit marks the beginning of a drive to help users make even better use of their MRP information. Javelin general manager Paul Holmes said that while all users of the MRP engine generally agree it’s a powerful tool, the introduction of the MRP tree view and the latest addition of the MRP Action Plan (MAP) in Javelin takes the concept even further. “When you’re on a sales order line within Sales Order Maintenance, you can use the MAP button to simply drill down into how that sales line is planned to be fulfilled. It not only displays the works orders that will provide the product, but can drill further to see where the materials or components for those orders are expected to come from,” he explained. Other features of the new software include an ‘Eagle Eye’ facility which gives a quick overview of the status of colour-coded selected machines. There is also a new Request for Quotation facility whereby enquiries can be raised with suppliers about the price of any number of parts or amounts of raw material. These can then be emailed and progressed in the same way as a conventional purchase order. Suppliers can also supply the information in a spreadsheet, which can then be imported directly back into Javelin.

IT in

manufacturing

BUSINESS INTELLIGENCE

SAP named Business Intelligence market leader The enterprise software company has been named worldwide market share leader in Business Intelligence, analytics and performance management software by software analyst Gartner. The combined Business Intelligence (BI) market encompasses BI platforms, corporate performance management (CPM) suites, analytic applications and performance management. Gartner reports that SAP ranks number one, with a 23% share of the worldwide market based on revenue. This reflects a 16.8% growth from 2009. Steve Lucas, general manager of Business Analytics at SAP said: “We believe our performance – which is ahead of the market growth rate – demonstrates how customers are looking to SAP as a trusted business partner.” “Not only do we bring innovative technologies to market, we also help customers apply them to solve their business challenges. Our technology and business expertise enable customers to go beyond what they seek to achieve,” he added. SAP held its World Tour UK in Twickenham in May, where delegates heard how technology will help drive innovation by bringing clarity, enabling optimal performance and sustained growth. Gartner commented that the recession had a major impact on markets, and for a period of time, especially in 2009, it immobilized them. While IT spending overall was negative during that time, the BI market managed to grow 4.2 percent in 2009. In 2010, the global resurgence from stimulus packages, general improvement in the wider economy and new product releases contributed to a surge in spending. As a result, BI software growth accelerated to 13.4 percent in 2010. While BI spending far surpassed IT budget growth overall for several years, it‘s now obvious that BI continues to be a at the center of information-driven initiatives, claimed Gartner.

CAD

Sony Ericsson switches to PTC Mobile phone manufacturer Sony Ericsson has switched its CAD and data management products to PTC Creo/Pro and Windchill 10.0. Implementation has begun in Sweden and will be finished by summer. The company has done this in order to standardize their global platforms for mechanical and electronic design, with the changeover also facilitating the use of PTC as a PDM solution. In the past, the company has used Pro/Engineer at its design centres in China and Japan, while in Sweden and the United States they have made use of Siemens PLM Software’s competing NX. PTC’s director of electronics & high tech industry vertical, Mårten Gustafsson said: “Product development of smartphones and mobile phones are today under extremely heavy pressure.” “Complexity is increasing, while the model’s lifecycles become shorter and the demands of consumers for individual variants will be greater. It is in light of the tougher climate that Sony Ericsson has chosen to standardize their platforms to more effectively manage and collaborate around product data,” he added. Such major changes in company’s software use are relatively rare, so this is seen by many as extremely noteworthy for those in the manufacturing sector.

Have your say at www.themanufacturer.com

Bringing order to

chaos Who

Uncertainty in the economy must not be allowed to spread to uncertain leadership in the manufacturing businesses that will lead the UK into recovery. Martin Wing, European regional managing director for Process Improvement Consultancy, Kepner-Tregoe recommends a model for a more certain way ahead.

business and their impact upon one another. Good drivers and mechanics know about the dynamics of a car and how different components and subsystems work in harmony to get someone from A to B safely, whatever the conditions. Good doctors will provide the right advice and knowledge on how all the different organs and limbs impact on one another when a virus attacks the human body. They are calm in their diagnosis and confident in their recommendations. Through these uncertain economic times, good business leaders need to provide that same level of assurance to their staff, suppliers, customers, partners and shareholders. This becomes difficult if people within the business don’t understand how their organisation works when they get knocked off their course. It is not good enough to understand The benefits of a system-wide view one element, one component. Treating a stomach I’m not talking here about the simple economics of ulcer with the latest drug has side effects which must supply and demand … and if the order book isn’t be understood and managed. Leaders have to look full then we won’t need as many people. I’m talking holistically at the whole system. about all of those interconnected elements of the For Kepner-Tregoe and some of our clients the reference is a simple Component View System-wide View Enterprise Model that describes the different subsystems of a business and an understanding how external influences, which bring about the need for change, may impact on different components in unexpected ways. The most recent and vivid events of the Japanese earthquake and ensuing tsunami bring this home to roost. One senior executive from an international manufacturer recently said to me “well if this sort of disaster was is right? Ed Miliband or David Cameron? They can’t even agree on how to interpret economic data. Is the economy flat lining - or are we on the steady path to recovery? Politics has long been a source of entertainment to industry as the opposite sides of the house squabble for front page headlines. However, both men are very clear in their own minds about who is right and who is wrong. Whatever the uncertainty in the economy and whatever opposing politicians ultimately think, they have to provide strong leadership and certain footing for their parties and members. Today, more than ever, the economy needs strong and decisive leadership to create an air of purpose and certainty about the future. But it becomes very difficult to talk with confidence if people don’t understand how the uncertainties of the outside business environment will impact them on the inside.

Specialfeature Kepner-Tregoe

going to happen anywhere, it may as well have been in Japan. They are able to deal with issues and consequences so very well. Their completely decimated factory will be back on line in September”. Now that sort of external influence really focuses the mind, there is not that much more to think about. There are big physical and practical issues we are faced with rather than the mind games of predicting the future, predicting the next earthquake or tsunami.

So what questions should businesses ask themselves? So when some politicians are playing mind games; talking the economy up and others talking the economy down, who do we believe? For most organisations, the answer lies in nine primary questions: 1. What data-driven market assumptions are we going to let shape our strategic decision making? 2. How does that influence the basic beliefs of our organisation and the various leadership teams? 3. What processes should we focus on that will continue to add business value for us? 4. How should our measurements and control systems adapt? 5. Which roles and responsibilities need to be adapted or clarified? 6. How are our knowledge and information systems going to cope? 7. How does our culture need to adapt to react to these influences? 8. How well does our organisation structure support our ability to react? 9. How can we ensure our ability to resolve issues in a timely, effective and efficient manner is maintained? The Kepner-Tregoe Enterprise Model provides a reference point to ensure all these questions get answered and we are able to drill down to the right level of detail. It ensures both current and emerging leaders consider the broader organisational and business issues before leaping for the first piece of surgical

apparatus at their disposal, thereby delivering a holistic perspective over a single-dimensional one. Re-defining a job role defines the need for different capabilities, reporting lines, performance management disciplines and a whole raft of issues that come with behaviour change and change management. Our business leaders need to provide that cool and calm composure of the seasoned and practiced physician whilst they brief you for the operation. We have to be clear on where we are going and stick to our values. Steve Wright, now managing director at Hallmark Cards UK once told me “leading an organisation through uncertain, changing times is like swimming the English Channel as a team. One minute you can see them on the crest of the wave, the next you can’t see them because of the wave. You just have to believe what you are doing is right, be decisive and keep on swimming. If you’ve got the right people with you and they believe in you and what you are doing then the team will come through”. Decisive, committed leaders with followers that believe in the strength and credibility of the leadership is at the heart of creating the calm and certainty any organisation needs to get through the unpredictable choppy waters that are ahead. Now what is the next question Mr. Speaker? Martin Wing is the European regional managing director for international process improvement consultancy, Kepner-Tregoe.

For a discussion on how Kepner-Tregoe can improve effective leadership in your organisation: Tel: 01628 58 7875 Email: european.enquiries@kepner-tregoe.com Web: www.kepner-tregoe.com Linked in profile: http://uk.linkedin.com/in/martinwingkt

www.kepner-tregoe.com

An encouragingly high level of sustainability activity is occurring across a broad spectrum of industries, much of which is being driven by the larger corporates. Richard Laverick, Director Corporate Responsibility at environmental consultancy ADAS, says that more can be done particularly if the sustainability message cascades down throughout the supply chain. its own activities and that the footprint of the ‘use’ phase of its products is one hundred times the size of its own footprint. In order to implement supply chain improvements it is necessary for all parties to cooperate in a transparent manner and within an atmosphere of cooperation and trust, so supplier engagement programmes should focus on sharing best practice.

Richard Laverick at ADAS project in Uganda

Supply chain engagement

Sustainability

in the supply chain Many

businesses now publish environmental reports or statements expressing their ambitions and goals with respect to issues such as environmental protection, climate change, community, waste minimisation, water use and biodiversity. However, these often relate to the activities of the company itself without taking into account the activities of others in the supply chain. Encouragingly, now that many organisations are starting to take control of their own sustainability performance, the focus is starting to move to the supply chain. However, supply chain sustainability is more complicated to address, particularly if the number of suppliers is large and multi-layered. On the other hand, the opportunity for organisations to create beneficial effects through their supply chains is enormous. For example, one of the UK’s major supermarkets has found that the carbon footprint of its supply chain is ten times the size of that for

Sustainability activity in the supply chain can deliver energy efficiency and waste reduction but even if the benefits to individual members of the chain are relatively small, the sum of all the benefits can be enormous. Public expenditure, even after the recent cuts, represents over 12% of GDP, so the Government’s supply chain represents an enormous opportunity to influence the sustainability of thousands of organisations. ADAS is a major supplier of services to Defra and as such became heavily involved in Defra’s own supplier engagement programme, developing a ‘Joint Sustainability Action Plan’ that specified a broad range of actions with targets, areas for improvement and deadlines. The Plan included participation in Defra workshops in addition to Defra supported workshops at ADAS premises. One of the tools employed by ADAS is the ‘Flexible Framework for Sustainable Procurement’ which sets out the actions required to make progress along a defined path in the five key areas: people; policy, strategy & communications; procurement process; supplier engagement; and measurements & results. The framework has been particularly useful for ADAS and has been the catalyst for a broad range of sustainability initiatives. A second major tool being employed by ADAS is a prioritisation methodology which is designed to help organisations identify those elements of the supply chain that offer the best opportunity for benefits. These are assessed on the basis of risk (potential

Supplychain Logistics and Materials Handling

We have a 160 year history of doing the right thing; from making healthcare products affordable in our earliest years, to investing in recycling machinery in the 1930s and becoming a founder member of WWF’s 95+ Group to work towards sustainable forestry practices and wood products Alex Gourlay, Chief Executive, Health & Beauty Division, Alliance Boots for harm, to the environment for example), scope (the scope for improvement against a number of sustainability issues that they affect) and influence (the extent to which the organisation is able to affect the market and its own supplier base). The supplier workshops that ADAS has run have demonstrated the benefits of a partnership based approach. Suppliers are given assistance in finding ways to evaluate the sustainability of their own activity and that of their suppliers. In addition, workshops provide an opportunity for ADAS and its suppliers to share examples of best practise.

Sustainability at Boots UK With manufacturing and logistics are located in one Nottingham location, Boots UK provides an ideal exemplar for the examination of sustainability. Alex Gourlay, chief executive of the Health & Beauty Division of Alliance Boots says: “We have a 160 year history of doing the right thing; from making healthcare products affordable in our earliest years, to investing in recycling machinery in the 1930s and becoming a founder member of WWF’s 95+ Group to work towards sustainable forestry practices and wood products in the early 1990s. However, as a business we have to fully understand consumer trends and our customer’s expectations, including their attitude to complex issues like sustainability. We know that, along with all the usual value for money and quality considerations for example, they simply expect trusted brands like Boots to behave sustainably. And that is exactly what we are doing.” Head of CSR at Boots UK, Ian Blythe, believes that climate change is one of the greatest challenges facing the world today. “This places an enormous responsibility on each and every one of us - as individuals, government and businesses,” he says. “For its part, Boots is a business that

has a history of dealing with the big issues. But whilst we’ve made great steps to improve the sustainability of our operations, we know that this is an ongoing journey with a direction – not a destination.” The sustainability challenge for Boots is complex but Ian believes that the solutions are clear when the journey to sustainability is approached through the assessment of complete product lifecycles. Boots has established a system which looks at each product’s life cycle and identifies the areas of greatest environmental impact. However, the system does not simply look at carbon emissions; it also looks at other issues such as water, waste, biodiversity and social issues. The sustainable product assessment model scores some 23 sustainability indicators across the lifecycle of an individual product, including customer use. It creates a sustainability profile ‘footprint’ of a product to compare relative performance and identify hotspots and thereby enables anyone to make sustainability decisions. The model also enables improvement targets to be set by product type or by brand and establishes a database of sustainability performance data which, in turn, enables the identification of opportunities and

Concept

1. Materials 2. Production 3. Distribution 4. Retail 5. Use 6. Disposal/ Reuse/Recycle

The product journey as described by Ian Blythe, Head of CSR at Boots UK

Supply chain, Logistics and Materials Handling

reporting or analysis, at an individual product, brand or company level. By adopting a lifecycle approach, Boots ensures that sustainability work is focused on those areas that offer the greatest potential for improvement. This is vitally important because the location of the greatest impact within the supply chain varies from product to product. In some cases, for example, the largest part of a product’s carbon footprint is in the use stage, so strategies to improve the overall footprint will have to address these issues through product design and consumer education.

Supply chain sustainability at Boots The Boots holistic approach is exemplified by a wide range of initiatives within its supply chain logistics operations. Blythe explains: “We want a cost efficient, time efficient, emissions efficient warehousing and distribution system. One of the ways we can do that is to simply avoid the delivery of air. We do this by optimising packaging design, by using square packages and reusable crates, by using a variety of double-deck trailers, by utilising the latest picking and consolidating technologies in our warehouse, by using vehicle return journeys to pick up more products or return materials for recycling, and by sharing space with other businesses in delivery vehicles for the more remote areas in the UK.” Alongside, modern fuel-efficient lorries; driver training in eco-efficient driving techniques; in-cab driving-style monitoring equipment; policies and processes to minimise air freight, all adds up to an operation that’s good for business as well as doing the right thing for the environment. Boots products are also sourced and manufactured outside of Nottingham and in several regions of the world. It therefore operates supply chain verification teams in the UK and Asia. These teams have four key objectives: 1. To enforce the Boots code of conduct for ethical trading 2. To improve the sustainability of the supply chain 3. To cascade sustainability further down the supply chain 4. To help suppliers find ways to improve The Boots audit team routinely visits suppliers, sometimes unannounced, and occasionally conducts a ‘deep dive’ – visiting suppliers further down the chain.

Commodity Supplies It can be very difficult or impossible to identify the provenance of commodity goods that have been stored or shipped in large containers. Andrew Jenkins works on the sustainability of the materials sourced by Boots. He says that “the main problem with running our own supply chain for commodity ingredients is that, due to the wide range of products, we require small quantities of lots of ingredients. This makes managing our own supply chain for a particular commodity impractical. The

key to improving the sustainability of commodities is to establish partnerships with organisations that are seeking the same goals. “Take palm oil for example; the most widely used vegetable oil in the world, for which there are concerns with issues such as deforestation, biodiversity and human rights. By working with others we can substantially improve the sustainability of palm oil from both an environmental and an economic perspective. “We are a member of the RSPO (Roundtable on Sustainable Palm Oil) and have been working with suppliers to use only Certified Sustainable Palm Oil (where palm oil is a listed ingredient) by 2014, or to use alternative sustainable materials.”

For its part, Boots is a business that has a history of dealing with the big issues. But whilst we’ve made great steps to improve the sustainability of our operations, we know that this is an ongoing journey with a direction – not a destination Ian Blythe, Head of CSR, Boots UK

Producers of Certified Sustainable Palm Oil are able to register a quantity of their output with the GreenPalm programme which awards them one GreenPalm certificate for each tonne of palm oil which has been sustainably produced and these certificates are tradeable. Boots is also a member of the WWF Forest Trade Network, which seeks to improve the management of the world’s production forests by using the purchasing power and influence of UK businesses.

Partner progress Just as stakeholders within business need to be fully engaged in internal sustainability work, so external stakeholders need to be engaged in supply chain sustainability. It has been the experience of both ADAS and Boots that a partnership approach offers the best way forward. Improvements to the sustainability of supply chains deliver financial advantages but they also produce more resilient supply chains and create a more reliable source of supply. Many companies are now looking to improve the sustainability of their supply chains and the ADAS sustainability team has been expanded significantly to accommodate this heightened demand. At Boots, Ian Blythe says: “There is still an enormous amount of work to do, but we are on the right path – our customers expect nothing less.”

Have your say at www.themanufacturer.com

Article by Nick Grant, director of corporate markets and energy services at British Gas Business

The untapped opportunity of energy efficiency measures Cost

control is a priority for nearly all businesses as the UK economy comes out of recession. Energy bills are an unavoidable overhead and the second biggest cost for manufacturers after staff costs, according to a recent story in the Manufacturer. Despite energy bills comprising of almost a fifth (17%) of a company’s operational running costs, in too many cases energy usage decisions are a backroom discussion instead of a business priority discussed at the very top table. There has never been a more vital time for manufacturers to prioritise better energy management as a tool for controlling costs. The UK’s economic recovery is far from assured with only one in six of our business customers telling us they expect to see an improvement in their business performance over the next six months. Alongside this, the government’s commitment to cut carbon emissions requires businesses to play their part. This is a necessary step for the country, but will mean additional costs for businesses. Within the last couple of weeks alone, the government has made the UK the first country to make legally binding carbon reduction commitments up to 2027 that will see carbon emissions reduced by 50 percent compared to 1990 levels. Add to this volatility in the wholesale market exasperated by the natural disaster in Japan and the unrest in the Middle East and Africa and there has never been a more pressing time to escalate energy efficiency up the manufacturing agenda as a means of reducing costs and gaining a competitive advantage.

An untapped opportunity Against this backdrop, a recent poll we conducted showed that the majority of businesses are not taking advantage of potential savings through better energy management. Only 23% of the financial directors surveyed said that they felt confident in managing their energy costs. Over two thirds also admitted that energy efficiency is discussed in the board room very occasionally or hardly ever because it is simply not seen as a priority. As the leading energy services provider to both the private and public sector, British Gas Business recognises the crucial role we can play in partnering with businesses to help them make energy management a top-table priority. With 10,000 large industrial and corporate business customers, we also understand the challenges preventing organisations with high energy consumptions from implementing energy efficiency measures. From continually talking to our customers, we know that businesses often do not have time to immerse themselves in understanding their energy use.

In many cases they are paying the same estimated bills month on month rather than feeling the benefits of a more flexible approach to energy procurement and the significant savings that could be made through better energy management and a more coherent energy efficiency strategy. Although short-term business decisions are inevitable when finances are constrained and time is short, businesses need to adopt a long-term approach to energy that encompasses the key components of a suitable contract and an efficiency strategy that optimises their energy use.

Taking advantage of market fluctuations The first step in creating an efficient energy strategy is for manufacturers to identify how they can optimise their energy supply through choosing the right contract for their business’s specific needs. This means thinking about risk and whether they want certainty of cost through a fixed contract or whether they want to take advantage of price movements in the market through a flexible contract.

Unlocking the potential of energy efficiency The second step, which often has a far bigger impact on costs, is to identify the efficiency measures that will make significant savings to a business’s usage without impacting on its output or productivity. In our experience, these efficiency measures can create savings of up to 20 percent to their bottom line, in comparison to price and contact choices that vary by 1-2 percent. This potential saving amounts to a transformative cost management tool for the manufacturing industry. The starting point is to understand how much energy is being used and the areas of the business that are consuming the most energy. Manufacturers can now work in partnership with their energy provider to assess and optimise their energy consumption in order to generate energy savings through more efficient management. This requires setting targets for energy savings in the short, medium and long-term and identifying the strategies that will ensure the business achieves these targets. These strategies may start with the installation of a smart meter which is essential to understanding and managing energy use in real time. Smart meters cut the amount of time businesses spend on administration by allowing them to pay accurate bills, based on accurate readings. With the right support from suppliers, they also allow businesses to understand where they are wasting energy and help set targets for energy reduction that will drive behaviour change within their organisation. At British Gas Business, we have already installed 150,000 smart meters in UK businesses, with another 80,000 planned for the end of 2011. However, smart metering and understanding energy usage is only the beginning of the journey for those that

want to make significant savings. Businesses can also benefit from installing the latest energy saving technology. This includes programmes like Automatic Monitoring and Targeting - a service that collates energy usage patterns into a single, clearly presented system and helps manufacturers identify the areas where energy is being wasted at any one time. Many of our business customers have also benefited from installing a Building Management System - a computer-based solution that controls and monitors the building’s mechanical and electrical equipment, such as ventilation, lighting and power systems, at optimum levels. These technologies in combination with our expertise demonstrated through visits from energy experts and energy audits are all designed to help manufacturers identify opportunities to save money.

British Gas Business

At British Gas Business, we have a unique range of contract options to give our customers the best deal dependent on the product they want, the level of risk they are comfortable with and the service levels they require to help manage their energy costs. We also support our customers on flexible contracts with market and buying reports that help inform their strategy. Fixed price – Customers are protected from price fluctuations as the unit rate they agree at the start of the contract is the price they pay throughout. Quarterly block – This is for companies who want to take a more active role in their purchasing through deciding when to fix the rate of each quarter. Customers could fix the rate for each quarter as they go, or equally they could lock down a rate for two or three quarters at a time. Monthly block – This is for companies who want the opportunity to benefit from price movements. It gives them the option to pre-buy 100% of each month’s consumption in advance or leave the rates at day-ahead floating prices. Full flex – This is for companies that understand the energy market and want maximum control of purchasing. It allows them to buy and sell any part of their energy requirements at any point. Manufacturers are intensive energy users, meaning there is a significant opportunity for them to cut costs through a more flexible contract if they are willing to invest their time into watching the fluctuations in the energy market in order to take advantage of the best prices.

Removing the barriers We do however recognise that financing this investment is often the biggest barrier for manufacturers in implementing these measures as it is paid back over the long-term. But we also know these measures make a transformative difference. We are therefore working with many of our customers in ‘payment by results’ arrangements where we cover the cost of the upfront investment and take on all of the risk. These costs are then repaid from the savings that are made throughout the duration of the contract. There has never been a better time for manufacturers to invest in their energy management strategy as a means of controlling costs. Through working in partnership with their energy provider, there is a significant and so far untapped opportunity for manufacturers to make savings of up to 20 percent through choosing the right contact and implementing a coherent strategy of energy efficiency measures. However for these savings to be achieved and maintained, energy management has to move up the agenda in the board room, and become a business priority that is reflected in the actions of every single employee.

For more information please visit: www.britishgas.co.uk/Business

We have the

technology...

Simulation software allows testing of increasingly complex scenarios

Is it possible to take an iceberg from the Arctic to Africa? Can we walk through our factories before they are built or train staff on equipment that does not yet exist? Jane Gray looks at latest advances in PLM – product lifecycle management – software and the capabilities of simulation for manufacturing and engineering solutions.

The

progression of simulation technology for product design and testing has transformed the way manufacturers and engineers approach their work in recent years. Speed to market, reliability and cost effectiveness have all been amplified exponentially by the ability to put products through their paces and cut out resourcehungry physical prototyping stages. With the growing maturity of product lifecycle management (PLM) however, the scope for innovation using simulation has taken another leap forward. Companies don’t have to have to have invested in PLM to be aware that most computer aided design and engineering (CAD and CAE) programmes now come equipped with the ability to simulate the performance of a new product in the field. Aerospace and automotive manufacturers in particular now rely heavily on the ability to be able to create life-like recreations of extreme weather conditions, road

Innovation design and the product lifecycle

surfaces, surface qualities and more, in order to minimise the need for expensive physical prototypes. All the major PLM vendors say that the scope for using simulation technology to allow manufacturing innovations is now far greater. The development of system controls which protect core engineering data means that design teams can work concurrently with teams in production, marketing sales and support services. Many vendors are even now providing simulation software which takes production design back to ‘ground zero’ and allows manufacturers to design their factories in beautifully presented and intelligent 3D representations. Autocad’s recently released Factory Design Suite 2012, for example, is capable of analysing factory functionality in 3D and of optimising material flow by measuring the balance of movement, flow and cost throughout production. The new release also includes access to Autodesk’s new Eco Materials Advisor, in its premium and ultimate packages, so that manufacturers can visualise and optimise their sustainable factories of the future ahead of time. Kevin Ison, business manager UK and Ireland for Autodesk’s Manufacturing Solutions, talks about innovation in the application of digital prototyping and simulation technology: “We are good at product development in the UK but I don’t think UK manufacturers always appreciate what can be done with 3D simulation and visualisation to innovate in other areas of the business. Sales and marketing, for instance, can be evangelised through the application of this kind of technology. There needs to be a broader understanding of what simulation can do to set you apart from your competition. How could you better position your products by being able to show your customers, whether they are consumers or other businesses, that you have considered all the ‘what if’ aspects?” In guarding against ‘what if’ scenarios, there can surely be no industry with a greater need for confidence in both its people and its equipment than the new nuclear sector. This strategically important UK manufacturing and engineering sector is working hard to recruit accredited suppliers and skilled workers. However with new-build power plants still in the realms of imagination, how is this supply chain meant to ready itself to hit the ground running? In the past, if there was not convenient access to the real operational environment engineers would be trained in expensive, purpose-built training environments. According to Dassault Systèmes however, this is no longer necessary. At the software developer’s UK user conference, on May 12, a compelling case for the use of simulated avatars for training was made using the example of maintenance work on equipment in a nuclear reactor. Bringing the relevance of this kind of technology application to more mainstream manufacturing, luxury carmaker Bentley has realised massive benefits through leveraging simulation software in production design and training. The innovative

Pretty pictures It is all very well to simulate beautifully rendered visualisations of product concepts and to simulate flashy demonstrations of their supposed performance. But as many experienced engineers have found, the mere availability of software functionality does not guarantee good results. Thorough management of data and deep engineering knowledge of what inputs to use, where to take core samples during analysis and the ability to realise when manufacturability has been compromised are absolutely critical. Kevin Ison, business manager in UK and Ireland for Autodesk’s Manufacturing Solutions explains the balance that is now being reached between software capability and engineering knowhow: “In the use of any software, a company still relies on the skills and experience of engineers and analysts. There is no substitute for that. However, it is now possible to build some of that knowledge into your software, he says. “You can build in testing loops that make sure changes make sense within certain parameters. With finite element analysis we can identify what a good mesh looks like by running some simple quality tests on that work. Then there are in-built ‘wizards’ or advisors which will highlight any possible glitches to the user.” Such capability frees up the engineers’ time from the minutiae of engineering and allows them greater freedom to explore engineering solutions which would not have been given prototyping goahead if physical testing and prototyping were necessary. Tim Bush, a design engineer at Dyson, describes how confidence in the ability of the company’s software to create and subdivide dense mesh designs sped up the development of its air multiplier fan: “We use ANSYS FLuENT software to simulate fluid flow without the need for a physical prototype. Being able to visualise fluid flow throughout the solution domain helps the engineers gain an intuitive understanding of the design, leading to rapid improvements. The software’s ability to divide the domain into sub-domains substantially speeds up the process of making design changes.” In total Dyson’s air multiplier fan went through 200 different design solutions in simulation before it was considered ready for manufacture. This is ten times the number which would have been possible if physical prototyping had been used.

application of technology, which Bentley has used in product design for some time, allowed the manufacturing team to go through the assembly process of assembly for the new Mulsanne model and feed back the need for changes where one design configuration made access for fitting parts difficult. Ian Swann, Bentley’s senior virtual assurance engineer, recounts the experience: “By modelling a total of 831 build operations across 30

Innovation design and the product lifecycle

stations, the complete build process was simulated in 3D. Using this simulation, a detailed assessment of the build process was then carried out and any potential build concerns were identified and then resolved much earlier in the design process.” Giving more detail on some of the problems to which simulation was applied in this digital build project, Swann says: “The ability to innovate and retain design intent has been enhanced. The front headlamp design is an important feature [in the Mulsanne] for functional and styling reasons. We used DELMIA to assess assembly options within the given design envelope and worked closely with engineering and production to develop an optimised solution.” In another example, Swann tells how an efficient assembly sequence for the 204 parts in each aluminiumskinned door was optimised using Dassault’s DELMIA software for digital manufacturing and production.

TSB provides financial support For manufacturers looking to invest in PLM technology for through-life digital prototyping, but who may not have the budget, the ability to prove their intention to apply simulation capabilities in innovative ways could be a gateway to funding from bodies like the Technology Strategy Board (TSB). The TSB has a range of funding available to UK manufacturers for the support of innovation across different priority platforms. Funding can be awarded to collaborative R&D projects as well as to individual companies. Both have to provide evidence of how the funding would enhance their capability in a way that is unique in the market. Dr Will Barton, head of technology at the Technology Strategy Board, told the Dassault user event delegates that, “We would support the use of simulation technology if it were being applied on one of our priority platforms.” Robin Wilson, lead technologist for high value manufacturing at TSB, gave further clarification of the requirements for TSB funding: “Since technology like Dassault’s is available commercially, we would have to be sure that the application would be deployed in a really innovative way – not just doing something new for one particular company.” TSB’s pre-requisite that an idea must demonstrate innovative deployment to qualify for funding challenges manufacturers to think Rendering of a 2D factory layout with an overlay of 3D factory content. Autodesk(R) Factory Design Suite and Autodesk(R) 3ds Max(R) Design software products were used in the design process.

Being able to visualise fluid flow throughout the solution domain helps the engineers gain an intuitive understanding of the design, leading to rapid improvements Tim Bush, Dyson

Have your say at www.themanufacturer.com

more inventively about how to exploit technology to differentiate themselves. And the chance to prove any such intentions is now at hand, since the TSB is taking applications for its ICT in Manufacturing funding competition. The competition will put £7m of funding up for grabs to UK construction and high value manufacturing companies. (see the TSB website for more information: www.innovateuk.org.) The power of simulation to make the impossible possible and create freedom for innovation is being demonstrated with more and more compelling case studies by technology vendors every day. But perhaps the most inspirational, or ambitious, story to date is that being undertaken by Dassault in conjunction with visionary engineer Georges Mougin, as part of Dassault’s Passion for Innovation programme. In a sideways slant on the idea of Richard Prior’s character in the 1985 film Brewster’s Millions, Monsieur Mougin’s dream is to capture a drop of the 350bn tonnes of fresh water ice which break away each year from the Arctic ice cap, and tow an iceberg to Africa to alleviate fresh water shortages. Initial budget scoping for piloting this inspirational dream pointed to a figure in excess of Eu10m. However, after partnering with Dassault to make a detailed feasibility study of the engineering challenges involved, which included simulating the iceberg’s journey using advanced virtual reality capabilities, Mougin now has a robust case to take to potential financial partners and is ready to begin full-scale operational trials. To read more on this innovative application of simulation technology and understand how your organisation might dare to revolutionise the scope of your simulation performance, see: www.3ds.com/icedream

Innovation design and the product lifecyle

It was Peter Drucker who once famously stated, that great business is made up of only marketing and innovation. Yet many SME’s think of marketing as superfluous. Viewed as the ‘make-up’ department, marketing is the first cost to disappear when times are tough. Yet marketing holds the key to success says Justin Levine of marketing firm Futurestech.

Marketing as a key differentiator for manufacturers

some of the world’s most respected manufacturers, the function and processes exist to align the whole business. It is an inside-out process, as opposed to something that is simply ‘bolted-on’. many other business segments, marketing Ultimately, upstream marketing is probably the one is a discipline that is embedded in the core definable difference between achieving sustainable, of the business, yet in manufacturing, far less so. profitable growth, and mediocrity. Ask yourself, how many manufacturers do you know In an economy that is stumbling on the path to grow, who have a Chief Marketing Officer on the Board? it could be argued that creating competitive advantage Marketing is a much-maligned concept within should be the number one Boardroom discussion. manufacturing, particularly within the SME. Yet there Embedding marketing in the DNA of the organisation is is a hidden part to marketing that is often completely the key to potentially solving this dilemma. overlooked. And that is upstream marketing. And of course, there is the question of resource. Times are tough. Budgets are squeezed. How much Upstream marketing? should be spent on marketing? This is the part of marketing that explores the big As a comparison, the retail industry typically questions. Which markets do we wish to participate spends between 2%-5% of revenue on marketing, in? How much of the market would be available car manufacturers between 2%-3.5%, packaged to us? Which products does the market need or goods 4%-10% and professional service firms want? What features will people buy? What price leading the way spending upwards of 15%. Faced would they pay? What experience do we wish with a challenging economy, many manufacturing our customers to have? How do we create real SMEs struggle to register 1%, forsaking long-term competitive advantage? growth for short-term profitability. This relative Upstream marketing is the part of marketing that lack of investment stifles both the ability to create facilitates the creation of new products and services. competitive advantage as well as leaving the door It is both creative and analytical. It is a process that open for more enlightened competitors to grow. prepares a strategic foundation for a business as Adoption of the Internet and the growth of well as providing the underlying data and analysis social media are the trends that are driving these to support informed decision-making. It should be a fundamental shifts in the way manufacturers continuous process, not a one-off event. Upstream connect with their audience. Smart industrial marketing is one definable function that is found in marketers have moved from the classic 4 P’s (product, price, place and promotion) to the more appropriate 4 C’s (content, connection, communication and conversion – see graphic). CONTENT CONNECTION Is this a compelling narrative to invest Creation of a steady-stream Connecting with the in marketing? SMEs will undoubtedly of engaging content audience you wish to attract want to know, what is the return on investment? The answer of course, depends. It depends on the commitment to integrating marketing and of course the skill to which it is utilised and deployed. But the most insightful question is this: what will be your competitive position in COMMUNICATION CONVERSION 5 years time if you simply treat marketing Communication with them is Converting them at the as the ‘make-up’ department? History an ongoing conversation illusive moment of need is littered with manufacturers who didn’t keep one step ahead of the market. Don’t be one of them.

Have your say at www.themanufacturer.com

Intelligence brings its own reward Business intelligence has never been so powerful— nor delivered as much value to the bottom line. And you don’t have to be an existing SAP user to benefit from SAP business intelligence, discovers Malcolm Wheatley.

Every

manufacturing business generates data: sales data, production data, quality data, performance data, procurement and supply chain data. And for SAP, business intelligence solutions to unlock the hidden insights buried in that data is fast becoming big business. “Quite simply, the evidence is that companies which regard data as a strategic asset outperform those that don’t,” says Colin Sharp, UK & Ireland director for Business Objects at SAP. “They can achieve more, and the stock market values them more highly.” No wonder, then, that sales of business intelligence software are booming, as companies strive to use it to simultaneously grow sales volumes while cutting costs—and thus deliver a double helping of profit to the bottom line. It’s a message, though, that’s probably been a little slow to gain traction. After all, business intelligence applications—or business analytics applications, as SAP prefers to call them—have been around for over a decade. For too long, though, they’ve

been associated with FTSE 100 giants, and deployments in sales and finance. No longer, says John Hammann, head of business development for manufacturing at SAP. “The message is getting across,” he insists. “On the factory floor, in the supply chain, in the warehouse, and in the distribution network— business analytics can deliver value, and do so for small and medium-sized companies just as much as large ones. It’s about identifying the critical information at the right time to deliver meaningful change.” And the secret of success, says Sharp, lies in pursuing two separate—yet linked—strategies. First, he explains, business analytics isn’t a niche solution, undertaken in isolation. “It’s not just about business analytics,” he stresses. “It’s about delivering a strategy to manage data in its entirety: structured data, unstructured data, data inside and outside the firewall, and data drawn from right across the business. And then, crucially, being able to harness that data to deliver actionable

insights to people as they do their work.” And second, says Sharp, these days business analytics is no longer—if it ever was—about power users, data warehouses, and impenetrable reports intended for the few. “The technology has advanced enormously,” he enthuses. “The arrival of ‘in memory’ processing, pre-built industry-specific solutions, and ‘on device’ mobile applications is a game-changer. It’s business analytics when you want it, where you want it—and for whoever wants it. In other words, it’s for the business, and not just a select few in the IT function.” And it’s also, adds Hammann, business analytics that is available in a very flexible range of options. Traditional ‘on premise’ applications, for instance, are on offer for manufacturers who prefer to own and run their business analytics applications inside the firewall. Yet equally, he stresses, SAP is completely at home in the cloud, offering business analytics ‘on demand’. Best of all, concludes Sharp, SAP business analytics “is data agnostic and system agnostic.” In other words, you don’t have to be an existing SAP user to benefit from SAP business analytics. Any ERP system; any database; any range of business applications. “And we have an awful lot of customers who don’t use any other SAP application,” he emphasises. “But when it comes to business intelligence, we’re their first choice.”

B usiness I ntelligence S ur v e y

Intelligence Here

at The Manufacturer, the buzz surrounding Business Intelligence is difficult to ignore. Once the domain of power users and IT geeks—and requiring expensive software and data warehouses—Business Intelligence has undeniably gone mainstream. But that doesn’t necessarily mean that there’s total clarity into what benefits manufacturers perceive in its use. Or indeed, much visibility into what exactly they use Business Intelligence applications for. So we’re keen to find out more which is why we have compiled a short survey to throw light on the use of Business Intelligence within manufacturing industry. The questions for which we are seeking answers are detailed below and can be answered at: www.themanufacturer.com/uk/bi/

(1) Do you have an ERP system, and if so, from which vendor? Yes No The vendor is: ........................ Don’t know (2) Which description of business intelligence, reporting and analytics best describes the approach taken by your organisation? An enterprise-wide business intelligence implementation employing specialist business intelligence software and/or a data warehouse. A niche business intelligence implementation, employing specialist business intelligence software, but limited to certain functions within the business. A limited business intelligence implementation, using ERP-based report writing tools. A business intelligence solution characterised by spreadsheets, populated by data feeds from enterprise applications and/or an ERP system. No formal use of business intelligence at all. Don’t know (3) In question 2 above, if you responded that you did have a specialist business intelligence system, which vendor supplied it, and approximately how long has it been in operation? (Please list all that apply.) Less than 1-4 Over 5 Name(s) of vendor(s) a year years years ............................. ............................. ............................. .............................

The Manufacturer Business Intelligence Survey

with

Getting Business

(4) In general, what do you see as the benefits that business intelligence can or does offer your organisation? (Please tick all that apply.) Identifying sales and marketing opportunities Identifying cost reduction opportunities Identifying operational improvement in manufacturing Identifying potential supply chain opportunities Other (state: ..................) (5) In which areas of the business is business intelligence presently deployed? (Please tick all that apply.) Finance Sales and marketing Manufacturing Logistics and distribution Human resources Purchasing Other (state: .................) (6) In which business functions could you honestly state that business intelligence is delivering tangible business benefits to your organisation? (Please tick all that apply.) Finance Sales and marketing Manufacturing Logistics and distribution Human resources Purchasing Other (state: ..................) (7) Which of the following ‘data-driven’ approaches to identifying potential manufacturing performance improvements are in place within your organisation? (Please tick all that apply.) Continuous improvement teams Six Sigma Kaizen/ lean manufacturing initiatives OEE metrics and/ or plant historian applications Business intelligence (8) Thinking of the business intelligence implementation that most impacts your own sphere of operations, from where did the impetus for this arise within your organisation? Finance Sales and marketing Manufacturing Logistics and distribution Human resources Purchasing IT Other (state: ..................) (9) Over the next twelve months, will the ‘footprint’ of business intelligence in your organisation.... Stay the same? Shrink? Expand? Don’t know? (10) Could you realistically see your organisation contemplating a move to cloud-based business intelligence, or business intelligence obtained through ‘Software as a Service’? Yes No Don’t know (11) If you responded ‘no’ in question 10, why not?

We would be delighted if having reviewed these, you would then go to www.themanufacturer.com/uk/bi and complete the survey online. Thank you!

UNIVERSITY SUPPLEMENT To create an environment where manufacturers can thrive, the UK needs to make the most of the fact that out of the top 10 universities in the world, four are British. This has been reiterated time and again by EEF, the CBI, the government and many other leading figures in all parts of the industry. Effective collaboration between universities and manufacturers has an effect that is profound, wide ranging and has very significant benefits, in both the short and long term, and this is starting to become evident in the new EPSRC centres around the UK. The Council for Industry and Higher Education wants to see the government promoting advanced manufacturing enterprise clusters, with universities at their heart. It says that universities should radically open their intellectual property banks; and that big businesses need to work with universities to create smarter supply chains.

UNIVERSITY SUPPLEMENT

Powering Up Bioinformatic solutions, such as â&#x20AC;&#x2DC;Lab-in-a-pillâ&#x20AC;&#x2122;

Universities and business collaborating for success in the next industrial revolution.

technologies, that could transform the treatment of bowel cancer, and which contain sensors to monitor bodily fluids for the disease and then transmit the information to a computer. Second generation bio-fuels using non food-stuffs such as husks or stems, or industrial

waste such as woodchip. he starting gun has sounded on a New

Low carbon engine technology that develops

Industrial Revolution. Policy and investment

lighter fans to reduce fuel consumption, simulation

decisions taken in the next five years will

technology for virtual engineering also creating

position economies for success (or failure)

new, affordable high temperature alloys to improve

in that race. Smart manufacturing - which combines

fuel efficiency.

advanced scientific knowledge and business models based on design and support of products

These examples, a handful taken from the thousands

and services - will be as important to growth in

currently being worked on in university and industry

the New Industrial revolution as steam was to the

labs, illustrate the need for close and systemic

First and mass production to the Second. Therefore

interactions between manufacturing businesses and

innovation and knowledge-creation are fundamental

universities. Given that some of the worldâ&#x20AC;&#x2122;s best

factors of production.

smart manufacturing businesses are based here, and

There are many exciting initiatives: Jet engines created using Computer Aided

the UK university system is ranked second only to the United States, should policy-makers be worried? Yes. Because manufacturing businesses are worried on the UKs behalf.

design, leased to an aircraft manufacturer, and

In response to these concerns, the Council for

whose life-cycle is monitored digitally to support

Industry and Higher Education (CIHE) convened a

long-term maintenance.

task force of senior industrialists, vice chancellors

UNIVERSITY SUPPLEMENT

and research leaders to explore solutions to

at the same time helping to develop the capacity

the challenges facing manufacturing in the UK.

of innovation-rich SMEs. The former is exemplified

In its report, Powering Up, it made three core

by the Systems Engineering Innovation Centre

recommendations about joining up policy and

(SEIC). Established in 2002, the SEIC is a structured

practice. First, that the Coalition and devolved

partnership between Loughborough University,

administrations should promote the co-ordination of

the East Midlands development agency and BAE

the range of current economic initiatives to promote

Systems to create a centre of excellence in systems

advanced manufacturing. In particular, they should

engineering. The Centre offers access to a range

explore Advanced Manufacturing Enterprise Zones

of facilities including research and synthetic

that reward knowledge-based entrepreneurship and ensure that universities are at the heart of these development challenges. Second, universities should open their digital doors and use Web 2.0 networking technologies to offer advanced manufacturing entrepreneurs

“If the UK does nothing, it risks its resources being drained as significant capabilities relocate to countries like Brazil”

and businesses systematic access to university research, rather than lock knowledge away in

James Faroppa, Chief Technology Officer, BG Group

patents that often lead nowhere commercially. Glasgow University’s Easy Access IP deals, where the university has taken a decision to make at least 95%

environment laboratories, virtual engineering

of their IP available for manufacturing businesses,

capabilities, office accommodation, conference

particularly those in the West of Scotland, points the

facilities, a lecture theatre, an exhibition area and a

way to a more fluid method of managing IP.

highly integrated communications infrastructure.

www.gla.ac.uk/businessandindustry/technology/

One of the keys to success of the collaboration

And finally, global manufacturing should

is co-location - academics work side by side with

contribute to contribute to local entrepreneurship

BAE staff and experience the unique, complex and

by collaborating with universities to aggregate and

high-risk industrial challenges of the defence and

increase the quality of ideas in their supply chain,

security industries.

particularly in supporting graduate-rich SMEs building knowledge-intensive businesses.

Smart Manufacturing and Universities

Small, graduate-rich, innovative manufacturing firms need a more organic level of support, as exemplified by BioCity in Nottingham. BioCity Nottingham is a not-for-profit company established in 2003 by Nottingham’s two universities and the

THE UK’s universities must be the intellectual

RDA to develop the bioscience and healthcare cluster

powerhouses to drive the New Industrial Revolution.

within the East Midlands. It works as an incubator,

In Ric Parker’s phrase, they must ‘top up the

offering laboratory and office space for SMEs that

hopper’. But, of course, they cannot do so without

have up to 80 employees, and offers practical

strategic, secure and long-term partnerships

mechanisms such as flexible tenancy agreements

with global advanced manufacturing businesses, entrepreneurs and innovators. This partnership should be based on the following four principles. Create a collaborative culture that revels in shared success, with co-location or virtual networking, long-term and often rolling contracts, easily accessible support resources including laboratory facilities, trained and dedicated staff – both academics and business people - who understand research and business and can translate.

Think Big, Think Small

“Industry needs clear policy signals from government about which sectors are important, and without them will move R&D activities to countries where the focus and policy is clear - for example Korea, Singapore and Germany”

The challenge for such partnerships is

Ric Parker,

simultaneously to think big and build long-run

Director of Research and Technology, Rolls-Royce

relationships with major industrial partners, whilst

Wolfson School

of Mechanical & Manufacturing Engineering

The Wolfson School of Mechanical & Manufacturing Engineering provides a rich environment for industrially relevant, academically challenging, Learning, Research and Knowledge Transfer, in Engineering and Technology.

Study full-time at Undergraduate Level: Engineering Management (BSc) Innovative Manufacturing Engineering (MEng) (6 company industry sponsored programme) Manufacturing Engineering (BEng) Mechanical Engineering (MEng/BEng) Product Design Engineering (MEng/BEng) Sports Technology (BSc) Diploma of Industrial Studies (DIS)

Study full-time and part-time at Postgraduate Level (MSc): Advanced Engineering Advanced Manufacturing Engineering and Management Engineering Design Engineering Design and Manufacture Mechanical Engineering Sustainable Engineering

Research and Knowledge Transfer with our multidisciplinary Research Groups (PhD/EngDoc/MPhil) : Applied Aerodynamics Dynamics Healthcare Engineering Optical Engineering Manufacturing Engineering Materials and Structures Physical Ergonomics Process Engineering Sports Technology Systems, Risk & Reliability Thermofluids For more information go to: www.lboro.ac.uk/departments/mm

Loughborough Engineering: Academically Challenging – Industrially Relevant The Wolfson School of Mechanical & Manufacturing Engineering provides one of the country’s leading environments for academically challenging, industrially relevant, engineering teaching and research, with over 120 members of staff and approximately 1,200 undergraduate, postgraduate and research students. Teaching Excellence The School brings together expertise in engineering management, engineering science, manufacturing processes and technologies, product design, and sports technology, with the six full time accredited undergraduate degree programmes being regularly placed in the top of their relevant subject league tables, and six full time / part time postgraduate MSc degrees providing enhanced specialist knowledge. Over 50% of the undergraduate students spend a year on industrial placement as part of the degree programmes, in multinational companies both in the UK and overseas. Research Excellence The School’s research role is to define new engineering related theories, techniques and technologies across a large array of industrial sectors. At the heart of these activities are key UK Government and Industry funded research centres, with the School hosting five Innovative Manufacturing Centres with a total concurrent value of £40m+. EPSRC Centre for Innovative Manufacturing in Additive Manufacturing EPSRC Centre for Innovative Manufacturing in Intelligent Automation EPSRC Centre for Innovative Manufacturing in Regenerative Medicine Innovative Electronics Manufacturing Research Centre Innovative Manufacturing and Construction Research Centre These collaborative centres are cornerstones for fostering and developing new ideas, in conjunction with a large array of supporting and sponsoring companies. New collaboration between the School, the Universities of Birmingham and Nottingham, and a number of key manufacturing companies has led to the development of the £40m Manufacturing Technology Centre (MTC), based at Ansty Park (Coventry). The MTC is now a core partner of the UK’s first £200m+ Technology innovation Centre (TIC), which will focus on the area of High Value Manufacturing (HVM). For more information go to: www.lboro.ac.uk/departments/mm

UNIVERSITY SUPPLEMENT

- allowing companies to increase or decrease the

their knowledge through a range of open fora,

amount of space they need as they find their feet.

databases, short courses, workshops, technical

Crucially, BioCity includes companies not typically

advice, and business planning.

found in single-sector incubators, such as a patent agent, a PR firm, regulatory affairs consultants and a web design company. As a result, BioCity has created a more effective start-up environment by

International Competition and Smart Manufacturing We have become used to concerns about India and

recognising the value of different kinds of companies

China overtaking us as a manufacturing nation,

interlinking and supplying each other.

but others are developing their own models.

This model of open, organic innovation is of vital

Brazil’s government, for example, insists that

importance as universities interact with others in

any business that exploits its oil and gas reserves

advanced manufacturing enterprise zones, and seek

invests one percent of net turnover in research and

to partner with major businesses to increase the

development, and the government tops this up with

knowledge-intensity of smaller firms. But we need

a special research tax. This put over half a billion into advanced manufacturing research and development

“The oil and gas industry is a global business. If you don’t get things right in the UK, businesses and talent will move”

in 2009, half of which went into universities and research institutes. If we are to meet the range of international competitive developments, the UK must rigorously explore ways of aligning our knowledgebased institutions, without the dirigiste policies of

Robert Booker, Executive Vice President Human Resources, BG Group

our competitors.

Conclusion In a revolution, you can lead or you can follow.

to transform the IP model of universities really to

If the UK is to lead it must address systematically

generate and power the new industrial economy.

the challenges facing it, including the role of

Develop an open-innovation business approach that reduces the friction around intellectual property

support for advanced manufacturing clusters,

exploitation. In a recent survey 56% of businesses

promotion of the right university research culture for

cited potential conflicts with regards to IP as a

smart manufacturing, and tax and planning policies

barrier to interaction with universities. In England,

that support innovation in the sector.

universities have spent nearly £300m on patent

The tens of thousands of jobs that manufacturing

protection and specialist lawyers in the past ten

businesses in the UK are currently creating still can

years, and when fully-costed, have not seen a return

end up in China…or Brazil. Therefore businesses and

on that investment, despite the occasional high-

universities need policy makers to understand the

profile success. By contrast, their consultancy and

vital importance of their collaborations, and support

collaborative income in the same period was around

them through clear and consistent policy initiatives.

£10bn. Universities should protect the minority of

Global businesses – as well as local manufacturing

their IP that is valuable, ensure business has as much

entrepreneurs – require the highest quality research

access to the rest as possible and be fundamentally

and graduate talent, and it is to this latter theme that

measured on their contribution to business, rather

our Task Force will turn in the next few months in its

than on spin outs.

Manufacturing Talent 2030 report.

However, it’s not enough just to make the IP available. Universities must work to create Web 2.0 social networks of entrepreneurs and use advanced communication tools to ensure that manufacturing business leaders know and understand the research emerging from departments. Increase the overall ability of businesses to absorb university research by being realistic about the level of knowledge within a business and working with companies to increase

government in procuring high end manufacturing,

James Watt Institute Innovative Manufacturing Research Centre Conference Heriot-Watt University is showcasing its research activities in Agile Manufacturing. International guest speakers include:

LOCATION Postgraduate Centre, Heriot Watt University, Edinburgh

Dr. Kevyn Jonas, Renishaw plc, on the Equator Concept

PROGRAMME SUMMARY Thursday 7 July 2011 19.00 Conference Dinner Friday 8 July 2011 08.15 Registration 08.50 Welcome 09.00 Start of Technical Programme 16.00 End of Technical Programme

Prof. Richard Hague, Loughborough University, on Rapid Prototyping Prof. Clement Gosselin, Laval University, on Adaptive Robotics The Conference provides an opportunity to learn about research undertaken in Agile Manufacturing by our research groups and the importance that a University-Industry relationship can offer in terms of advancing the development and adoption of technology and competitive advantage within a company.

If you would like to attend please register online at http://jwi.eventbrite.com There is no charge for attending the Conference or for the pre-conference Dinner. However numbers are limited and places will be allocated on the basis of early registration.

Friday 8 July 2011 at Heriot-Watt University Theme: Agile Manufacturing

Distinctly Innovative www.jwi.hw.ac.uk/conf2011.htm

UNIVERSITY SUPPLEMENT

University Collaboration EPSRC is the main UK government agency for funding research and training in engineering and the physical sciences, investing around £800 million a year in a broad range of subjects – from mathematics to materials science, and from information technology to structural engineering.

Research The UK research base is highly productive and has a global reputation for excellence: with just 1% of the world’s population, the UK earns 12% of international citations; a positive sign that UK research is being taken seriously. World-class university research is an invaluable resource supporting the growth of new and existing knowledge-intensive businesses in the UK and worldwide. There is strong evidence that considerable benefits have flowed to the economy from sustained public investment in

excellent research. From JJ Thompson in 1906 ur mission is to promote and support

at Trinity College, Cambridge for the discovery

high quality basic, strategic and applied

of the electron, to Andre Geim and Konstantin

research and related postgraduate

Novoselov in 2010 at the University of Manchester

training in engineering and the physical

for their discovery of graphene, researchers at UK

sciences with the aim of making the UK to be the

universities have long been recognised for their

most dynamic and stimulating environment in

breakthroughs – in these cases through the award

which to engage in research and innovation.

of Nobel prizes.

We advance knowledge and technology

Future initiative, we are investing £45 million in

exploitation of research outcomes), and provide

nine new national EPSRC Centres for Innovative

trained scientists and engineers, which meet

Manufacturing, bringing the total to 12.

the needs of users and beneficiaries, thereby

The EPSRC Centres will undertake cutting-edge

contributing to the economic competitiveness of

research to address major long-term manufacturing

the United Kingdom and the quality of life. There

challenges and/or emergent market opportunities,

is a wealth of examples where original research

and will enhance the global profile and significance

undertaken at UK universities has led to significant

of UK manufacturing research.

economic returns and wider social benefits. We can only do all of this through effective

As national facilities, EPSRC Centres for Innovative Manufacturing will create a nationwide

collaboration with universities and industry in both

network of expertise in manufacturing knowledge

helping us to set the research agenda and deliver it

with outreach to other centres and relevant

to the benefit of the UK. In an increasingly global

research groups. The Centres are based at

higher education market, UK universities attract the

Brunel, Cranfield, Loughborough, Nottingham,

very best academics and students from around the

Southampton, Strathclyde and University

world, as well as investment from multinational,

College London.

research intensive businesses. Our close partnership

100

As part of the EPSRC’s Manufacturing the

(including the promotion and support of the

EPSRC Centres for Innovative Manufacturing

with universities allows us to spot, develop and

are supported by leading industry partners and

promote research excellence to keep the UK at the

a range of high-tech small and medium-sized

top of the world standings and find innovative

enterprises across a whole range of sectors;

solutions to global challenges.

in fact most of the research areas are potentially

Driving innovation. Research working within industry The University of Southampton is one of the world’s leading entrepreneurial universities, with an impressive track record as a partner to business and the public sector and as a source of invention and innovation. As businesses face increasing global competition, moving towards higher-value, knowledge-based activities and increasing innovation will ensure the UK’s future prosperity and the ability to tackle major challenges like climate change. The University is well-positioned to help businesses meet these challenges: − Southampton was recognised in the top three worldwide for the quality of our spin out companies. An independent report by the Library House drew favourable comparisons between the Universities of Southampton, Stanford in the United States and Cambridge, placing Southampton in the top three worldwide for the quality of our spin out companies − Currently we are engaged with businesses in a huge range of collaborative research and consultancy. These contracts were worth £35 million in 2009, and have been built on substantial, longterm relationships in many cases − We host five University Technology Centres in collaboration with leading organisations – Microsoft, Airbus, RNLI, Lloyd’s Register and Rolls-Royce. These centres enable intensive research and development and technology innovation between the University and industry − The University has an on campus business incubator which provides specialist business development support and facilities for high-tech start-up companies. Established in 2003, the centre has incubated over 30 companies, helping them raise millions of pounds in investment

www.southampton.ac.uk/business

Exciting research with impact at the University of Southampton

Dr Christopher Holmes’ has developed the world’s first integrated optical micromachining facility.

Dr Nikitas Papasimakis’ work on photonic metamaterials could revolutionise the internet and mobile communications.

Sparking a new generation of innovation

A worldwide revolution

A ground-breaking research project in the University of Southampton’s Optoelectronics Research Centre is set to have a dramatic global impact on almost every piece of hightech equipment in use today. The world’s first integrated optical (IO) micromachining facility has been developed in Southampton which has significantly reduced the time and cost of producing IO circuits. IO circuits are increasingly taking over from the Integrated electronic circuits (miniaturised silicon chips) the latter usually taking more than a month to make using traditional fabrication methods.

A revolution of the photonic technology, which underpins the global internet and mobile communications networks, could be fuelled by investigations into the use of photonic metamaterials.

However, using this revolutionary, ultra-precision micro-machining technique the production time can be reduced to just minutes. IO circuits manipulate light instead of electrons, allowing signals to be processed at light speeds and are already being developed for commercial use in chemical and physical sensors deployed in telecommunications routers. Dr Christopher Holmes, who has been leading the process, explained: “We are the only people in the world to have developed such a system and one day everybody could be logging on to a computer that is powered with micro-machined integrated optical circuits that have been developed thanks to this research at the University of Southampton.”

Metamaterials are artificial crystalline materials engineered to exhibit properties that are usually not found in naturally available materials. These materials are created by assembling meta-molecules, the elementary building blocks of metamaterials, in bulk arrangements designed to operate at wavelengths much longer than the scale of the structuring. As a result, in the case of photonic metamaterials the metamolecules need to be defined at the nano-scale, a requirement that was only recently met with the advent of nanotechnology. Within this broad field of artificial photonic structures, a new class has recently emerged, termed coherent metamaterials, where interactions between individual constituents are particularly strong, leading to exciting collective phenomena. Such manifestations of coherent behaviour are crucial for losscompensation in metallic metamaterials as well as for the development of metamaterial-based novel light-emitting devices. Dr Nikitas Papasimakis explained: “My overall vision is to develop novel, dynamically-controlled metamaterial photonic devices with unique and enhanced functionalities, ranging from slowing down and concentrating light to cloaking and lasing.” Such developments could be at the forefront of nextgeneration mobile communication devices.

www.southampton.ac.uk/business

UNIVERSITY SUPPLEMENT

relevant to more than one sector which could

At the launch of the new centres, Minister for

result, as one of the Panel members assessing

Business and Enterprise Mark Prisk said:

the bids said, in exciting and unexpected research outcomes. Each EPSRC Centre will receive five years’ funding, allowing for resources to undertake a suite of research projects and also enabling the Centre

“Manufacturing generates £140 billion a year for the economy and accounts for 55 per cent of total UK exports. And increasingly, it is high-tech, advanced manufacturing that leads the way. “But we need to do more to rebalance our

to retain key staff, undertake feasibility studies,

economy. These exciting new partnerships

network with other EPSRC Centres in the UK and

between our universities and businesses will play a

overseas and ensure the research knowledge is

vital role in keeping UK manufacturing ahead of the

appropriately disseminated. EPSRC support will

game internationally.”

also be used as a platform from which the Centres can secure further investment from industry and

Training

other funders.

World-leading research requires world leading

As national EPSRC Centres, it is expected they will act as leaders in their areas: be high profile, lead

researchers. EPSRC is committed to helping the people we support achieve their maximum potential and our close partnership with leading research

Work at the EPSRC Centre for Regenerative Medicine, led by Professor David Williams at the University of Loughborough

institutions promotes and supports leaders who can inspire others. Through our developing leaders goal we will develop the next generation of scientists and engineers. In particular, we are committed to further increasing the quality of doctorates through a cohort based training approach. Cohort learning most commonly takes place on workshops, open days and networks and drive

at Centres for Doctoral Training. These centres

forward the innovative manufacturing research

represent a new approach to training doctorate

agenda, influencing policy and contributing to

students. They aim to create new working/training

national debate in manufacturing.

cultures, build relationships between teams in

In addition to training highly-skilled people to

industry and forge lasting links with business.

be the research and industry leaders of the future,

Students at these centres carry out a PhD-level

the new EPSRC Centres will act as a national

research project together with taught coursework

focus for research in specific areas, focusing on

in a supportive and exciting environment. These

key challenges facing major industry sectors by

students are particularly sought after my academia

adopting original approaches to manufacturing not

and business due to their employability, quality

being addressed elsewhere.

and potential impact. The Centres are co-funded

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UNIVERSITY SUPPLEMENT

A cross section of an Airbus A380. The EPSRC centre for through-life engineering services is led by Professor Rajkumar Roy of the University of Cranfield

Industrial CASE (co-operative awards in science and engineering) awards provide funding for PhD studentships where businesses take the lead in arranging projects with an academic partner of their choice. The aim of these awards is to provide PhD students with a first-rate, challenging research training experience, within the context of a mutually beneficial research collaboration between academic and partner organisations e.g. industry and policy making bodies. Industrial CASE studentships encourage productive engagement between partners who benefit from a motivated, high-quality PhD student undertaking cuttingedge research relevant to the organisationsâ&#x20AC;&#x2122; priorities and objectives. The studentship provides opportunities to explore novel research collaborations and strengthen current partnerships.

Working together for maximum impact As well as training and research, we work with universities and industry to devise, develop and test our policies and priorities. Through a network of strategic interactions with universities and industry, we are able to discuss and help to identify activities we between the university and EPSRC. There are

can work on together. By building appropriate

currently 76 centres covering a range of subjects,

collaborations across the sector, the UK can maintain

ranging from wind energy systems in Strathclyde to

and develop the strong research base that is needed

web science in Southampton.

to support the UK economy and society.

Doctoral Training Grants are four-year awards provided to universities for the provision of postgraduate study. Grants are provided to universities, not specific departments or individuals, which allows flexibility for the university to support students in a range of areasperhaps across departments or provide partial of whole funding. 42 universities currently hold Doctoral Training Grants. These studentships can be co-sponsored with industry through enabling companies to collaborate on PhD studies of relevant scientific and engineering challenges.

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Manufacturinginaction Sponsored by Applied Angle

Putting UK manufacturers under the spotlight aerospace automotive parts

Senior Aerospace BWT 134

Johnson Controls 106 As a supplier of seats to Nissanâ&#x20AC;&#x2122;s Sunderland plant, Johnson Controls is a model of just-in-time manufacturing.

Senior Aerospace BWT is a manufacturing firm rich in history and heritage that has been a part of the North West business landscape for 175 years.

automotive

Mitras 142 David Montague of Mitras explains how this thoughtfully innovative manufacturer is approaching competition in volatile times aerospace

North East

Ford Aerospace 112 Ford Aerospace is a leading global supplier of pressed components and precision machined components to the aerospace industry and is most definitely not a company stuck in the past.

FURNITURE

Simmons UK 146 Collectively known for their high quality bedding products, which are widely available throughout the UK, Simmons is certainly not a company that is lying down on the job

aerospace

Beagle Aerospace 149 As British aerospace manufacturers strive to stand out from the international crowd, the sector is positively thriving, with innovation in composite components adding huge amounts of value. Beagle aerospace is a valid example

vehicle overhaul

RailCare 119 RailCare, a rolling stock service provider, is breathing new life into its train business and has won over 153 contracts in a little over three years.

automotive

Stadco 126 Jane Gray finds out how automotive supplier, Stadco, has emphatically committed itself to making sure manufacturing has a future in the UK.

All companies featured will be entered into the MIA Award 2011

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Final inspection stage of the JUKE rear seats

You think you know just-in-time? Johnson Controls in Sunderland must deliver correct seat variants to neighbour Nissan in precisely the right order, 170,000 times a year, where errors are not tolerated. Operations manager Neil Fairley shows Will Stirling the meaning of JIT manufacturing.

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Seat of

learning Nissan

Motor Manufacturing UK produced over 448,000 cars in the 2010 financial year, and is about as lean as any manufacturing system in the world. Component parts need to arrive in narrow windows, there is no margin for error. The best way to achieve that? Build the component factory right next door and develop a fully synchronised production system. That’s what Johnson Controls did in 1984. The US engineering group originally had a joint venture here with Ikeda Busan, called Ikeda Hoover, located next to Nissan’s 800-acre site, before Johnson Controls Inc (JCI) bought out the company in 2001. The company manufactures automotive seating in a full-seat kit – two front seats, a rear cushion and a 60/40 split seat – and supplies to one customer, Nissan, for two models, the Note and the superpopular Juke. It’s a long established, symbiotic relationship

Automotive Johnson Controls

which demands ultra-accurate delivery schedules and zero defects to fulfil customer needs. Touring the factory with operations manager Neil Fairley, the watertight operation is a window into what UK factories have to do to retain business in today’s fiercely competitive global automotive market. “To hit the tough quality target, we are only allowed two defects per month in the entire delivery of 170,000 seat sets per year to Nissan. It’s extremely challenging,” says Mr Fairley, a six Sigma Black Belt with 12-years service at the Sunderland site. “Quality is very focused in this plant.” Johnson Controls has competitors and big seating contracts for UK-based carmakers do exchange hands. Each contract is vital and Nissan UK – manufacturing about 136,000 Jukes and 40,000 Notes per year – waits for no-one, so it is essential to hit key performance indicators (KPIs) as close as possible, all of the time (see box). To achieve such razor thin delivery and quality requirements, in 1984 Ikeda Hoover developed synchronous supply with Nissan. Today, this is a finely tuned machine based on a four-stage parts ordering process. This is honed down to real-time data, the synchronous broadcast, which arrives via EDI transfer to printer stations around the factory. “When a vehicle comes out of Nissan’s paint shop, we receive the synchronous broadcast as live data,” says Mr Fairley. “From receipt of the broadcast to seats fitted in the vehicle at Nissan, we have 2.5 hours. We are truly just-in-time.”

Organisational structure Johnson Controls Inc is split into three separate divisions – Automotive Experience, Building Efficiency (building management and air conditioning) and Batteries. Automotive has four satellite assembly, or JIT plants, in the UK. Sunderland looks after Nissan, Burton near Derby serves Toyota, Halewood serves Jaguar Land Rover and Ellesmere Port supplies to GM. Sunderland used to be a fully integrated plant. “Now big automotive suppliers tend to have business units in Centres of Excellence, for example foam manufacture and metal parts, with assembly or JIT (just-in-time) plants right next to the customers.” This plant still has a metal welding department, mainly operating robot welding for the Note seat frames.

Sunderland is unique in the UK in having its own design office. “We’re lucky to have it. If we have any questions about design programmes for models we can ask on site,” says Fairley.

Total synchronicity Synchronising production with demand is at the heart of all manufacturing. At Sunderland, it has been perfected into a science. There are four stages: • Plant receives forecasted volumes over six months from Nissan. • A 15-day forecast provides more firm data. • CAT 3 – three-day data, as accurate as possible. • Real-time synchronous broadcast from Nissan. This data-driven system is designed primarily to guarantee the customer receives the correct seat variants at the precise time. It also eliminates stock, saving space and working capital.

When a vehicle comes out of paint shop, we receive the live data Broadcast. From receipt of the Broadcast to seats being put in the vehicle at Nissan, we have 2.5 hours – we are truly just in time Neil Fairley, Operations Manager, Johnson Controls Sunderland Sub-components like the welded frames of the Nissan Note are manufactured from CAT 3 data. “But for the seat manufacture we can only build to broadcast, otherwise we would need to keep a lot of stock,” says Fairley. “We have zero work-in-progress for seats and zero finished goods. An order comes in for manufacture and it goes out straight away. We have just that 2.5 hour window within Nissan.” In volume terms, Sunderland has about 80 sets of seats between the picking stage, on receipt of broadcast, and the point-of-fit in Nissan. Current line speed is 50 sets per hour, or about 1.5 hours worth of stock in the line. The completed seats arrive at Nissan not only just-in-time, but customised to order because there are several seat variants. “Synchronous means one vehicle could be a Note, the next a Juke, the next two a right hand drive Note, etcetera,” says Fairley. “Seats are delivered to the Nissan point of fit as a perfect reflection of what vehicles are being finished there. Therefore it’s crucial we receive the Broadcast after it leaves the paint shop; there are no faults, no issues, that vehicle will definitely be finished.”

Fusion of labour and automation On the factory floor, crews of Manufacturing Team Members (MTMs) work flat out. Every operator knows his job. The Juke line is a seamless picture of synchronising man and machine to make the precise product variant on time. The term Standardised Work is a mantra at JCI, says Fairley. “Every operation has an operator’s description sheet, for how to complete a job within strict parameters. This minimises the chance of making defective products.”

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LA Services Ltd. has worked closely with Johnson Controls UK Ltd. for many years which has developed into an excellent relationship and a complete understanding of their requirements. During this period HLA Services Ltd. has been engaged in various project works with our Water Hygiene division also providing guidance on L8 (The control of legionella bacteria in water systems) All key Personnel at HLA Services Ltd. have many years experience and we employ

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only fully qualified staff that are capable of providing a full â&#x20AC;&#x2DC;turnkeyâ&#x20AC;&#x2122; service. We have a commitment to designing and installing the most efficient and cost effective quality products at competitive prices, with

an after sales service to match. Our services are by no means unique; however we feel our understanding of customer requirements and our ability to best fulfil these requirements to be second to none.

Published in association with: HLA Services Ltd Tel: 0191 548 6699 Email: admin@hlaservices.co.uk Web: www.hlaservices.co.uk

Automotive Johnson Controls

It’s clear the plant is lean in practice, and theory. KPI boards – updated weekly with metrics like Customer PPM (product delivered to the customer), Internal PPM (product post-assembly line that needs rework or repair), Build schedule, Zero defect days, the JCMS radar chart, etc – are posted in each department. Stations where seat kits are kitted are linked to the assembly line by an automated guidance cart, operated by a magnetic strip, which removes non-value added labour. Small parts are replenished at stations continuously. For larger parts such as trim, a satellite printer also receives the broadcast to eliminate unnecessary walking to read a single broadcast. Sunderland has developed its own kanban. When large part boxes need replenishing, the operator moves a card from below to above the red line, and a flag is raised. “This ticket system tells the fulfilment operator what, how much and where to get the part from, saving time from random checking.”

Ergonomic investments Several innovations have been implemented to fine-tune the man/ machine interface. Small Parts Centres, kits of small parts like fasteners, have been raised to the optimum hand level to reduce bending. Work stations are ergonomically designed for a person of average height. There are simple visual management aids, like clear water bottles so that team leaders can check no coloured liquid is near the line. Because standardisation is so important, Sunderland introduced the Shop Floor Control System. At the point where a seat is fastened to the frame, the number of fastens, the torque strength and angle of torque of each fasten is fixed. Operators use a DC control wrench fitted to the Shop Floor Control System, which prevents the seat from being released until the correct number, power and angle of torques on all fastenings are correct. More recently, all data associated with any Juke seat made is captured on an internal server, so any defects can be traced back. Rear seats are assembled separately, but both front and rear seats are built in the same product sequence, based on the broadcast. For inspection and despatch, for the last three years Sunderland has used a robot to lift finished seats at the inspection station,

and put on a dispatch pallet. This saves unnecessary manual lifting and is more efficient. As part of a continuous improvement programme, the new Note assembly line will feature overhead lights on every station, both manufacturing and inspection, making it easier to stop a defect before it passes on to the next station. Seats are shipped in magazines of 24-seat sets, where each set mirrors precisely the car variant being finished at Nissan. Loading for dispatch and unloading at Nissan is fully automatic and the broadcast ticket follows the product throughout.

People and training The plant constantly measures value added and non-value added analysis, including line balance reviews. “MTM data tells us how much time operators should spend on each station as a benchmark,” says Fairley. “In the climate we’re in, there’s no more money to burn. We have to ensure that what we budget for in manning and cost is achieved. The way to do that is monitor our manning – can we move any non-value adding aspect of that?” All new MTMs are trained in the nine modules of the Johnson Controls Manufacturing System, or JCMS, within

Johnson Controls Sunderland at a glance Product

Front and rear seats for Nissan’s Note and Juke models

Location

Adjacent to NMUK near Sunderland

Headcount

230 employees, a little higher than the recent average

Output

Approx 170,000 seat sets per year

Automated lift off robot for the Nissan JUKE front seat

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Kendall Poole Consulting S

ince 2007 Kendall Poole Consulting have been awarded sole supplier status for Johnson Controls Automotive and are firmly established as the strategic recruitment partners for resourcing technical and executive positions supporting UK JIT Operations and Business Units. Following a strategic review of the supply chain and more specifically HR and recruitment policies across the UK, JCA decided to improve the external recruitment and selection process, ultimately ensuring a consistent approach to selecting new talent and controlling the cost of external hiring within individual plants. As one of the leading technical recruitment and HR consultancies operating in the manufacturing and engineering sector, KPC have been instrumental in aligning their service offering with JCAâ&#x20AC;&#x2122;s Group HR and Line

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Managers in terms of devising and implementing recruitment strategies. Since July 2010 we have resourced 4 new Plant Managers for JIT Operations and placed over 60 managers and executives. Our knowledge and understanding of the permanent and interim technical recruitment market and ability to find high calibre candidates with the relevant competences has been a success story. We also design and facilitate assessment centres UK wide ensuring a consistent approach to evaluating competencies for both internal and external candidates. Assessment centres are attended by line and HR Managers and have been successful in terms of evaluating technical competence and team fit, typically over the course of 3 events including group exercises, technical presentations and competency based interviews. Since July 2010 we have placed

60 executives and in addition over 40 interims are employed through KPC in the UK, Europe and Russia in a variety of disciplines from Quality, Program Management and Engineering. The benefits of the sole supplier relationship have become apparent and with a 98% success rate in external hiring we pride ourselves on being truly world class. Alison Poole CIPD, Managing Director, Kendall Poole Consulting Ltd

Published in association with: Kendall Poole Consulting Ltd TS2 Pinewood Business Park, Coleshill Road Marston Green, Birmingham, B37 7HG. Tel: 0121 779 0934 Email: info@kendallpoole.com Web: www.kendallpoole.com

Automotive Johnson Controls

12-months of joining the company. JCMS is a proprietary toolbox that covers the core principles of lean, including 5S, problem-solving, VSM, culture and awareness, and quick tooling and die changeovers. And 5S score cards between departments are published in league tables to spur some internal competition. Loyalty is important at Sunderland. “The plant regularly has recognition events where we reward long servers. We’ve got people who’ve been employed since it opened almost 25-years ago,” says Fairley. This extends to management. Johnson Controls’ European General Manager for JIT used to be a team leader in the Sunderland factory and several production managers have been with Sunderland for 20-years.

Capital investment Investment here is also supersynchronised with the customer. JIT sites benefit from a five to six year investment programme that begins before a customer launches a new model. Juke was very good news for

the site, which was suffering from reduced volumes. “It was very fortunate that we landed the Juke contract in midrecession,” says engineering manager Paul Swainston. “It coincided with the automotive industry slump, at a time when the company was trying to minimise spending.” Seat manufacture is a labour-intensive process. Rather than invest in capital machinery, most investment at the JIT sites has been to automate processes to reduce human ergonomics and low value-add activity. Part of this is the Shop Floor Control System, but Sunderland has also introduced a visual management tool called Strike Zone, adapted from a popular Japanese method designed to reduce avoidable bending and lifting plant-wide. Looking ahead, Sunderland plans to adapt the Note ‘TEM 10’ cells, where seat trim is bonded to foam (they’re compressed to the seat in 10 seconds). The plant plans to decommission them to free-up floor space. Mr Swainston says it is also investing more into quality control and process repeatability, and to make Strike Zone an effective philosophy that bears return on investment. “Strike Zone provides an efficiency gain, but it is mainly for ergonomics. Health and safety has always been paramount here.” Johnson Controls Sunderland is a very tight ship, an exemplar of just-in-time manufacturing. Manufacture and delivery to a customer within 2.5 hours of order demonstrates just how lean plants need to be in today’s automotive industry if OEMs and their suppliers can survive, and thrive, in the UK.

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Geoff Ford receiving the large company category award at the Culture for Success awards at the Northern Stage theatre in Newcastle this May

Engineering

the future

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Aerospace Ford Aerospace

South Tyneside-based Ford Aerospace was established as one company over 100 years ago. However, this doesn’t mean that it is stuck in the past and chairman Geoff Ford has his eyes firmly set on the future. Jane Bordenave reports.

While

1910 was the founding year for what would become the Ford Group, probably the most important date for Ford Aerospace was 1982. “That year, one of our competitors went out of business and we took the decision to purchase the company’s assets,” says chairman Geoff Ford. “This enabled us to manufacture a material called laminate shimstock and ultimately afforded us entry into the UK aerospace industry.” In 2008, the Ford Group split into Ford Aerospace and Ford Component Manufacturing. While they both have the same board, each company is entirely independent of the other. With an annual turnover of £6 million, Ford Aerospace is now a leading global supplier of pressed components and precision machined components to the aerospace industry. As well as pressed and machined components, it continues to produce its laminate shimstock brand, Easipeel. “Easipeel is a very innovative product. It is comprised of layered foils that can be peeled off layer-bylayer to allow for a precise fitting of shims,” says Ford. As one of only two manufacturers of this type of product in the UK, it has a firm hold on a niche market. It is therefore no surprise that Easipeel clients include such big names as Agusta Westland, BAE Systems and Airbus. As well as innovation, another contributing factor to Ford Aerospace’s success is expansion. “Expansion in tandem with Ford Component Manufacturing is at the heart of our company strategy, as the two companies do inter-trade,” says Ford. “However we put great emphasis on it being a controlled expansion.”

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Simplicity drives up performance at Ford Group S

martspeed Consulting Limited has worked with the Ford Group over the past five years. Each project Smartspeed has delivered has supported the Ford Group in implementing the next change required for delivering their strategy and achieving their targets. In the past twelve months the demands placed upon the Ford Group in terms of on-time delivery performance, volumes and lead times has never been greater. Smartspeed worked closely with staff at all levels of the Ford Group

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to come up with a new, simpler, more effective way of managing their day-to-day operations. Smartspeed firmly believe that their clients should never be left guessing what the next step should be. Therefore, once the new operations management system had been developed, Smartspeed used their practical experience to help staff at the Ford Group through its implementation, making sure they got the results they needed.

Smartspeedâ&#x20AC;&#x2122;s experience in working across all sectors of manufacturing gives them the ability to develop bespoke solutions to improve the operational performance of any business.

Published in association with: Smartspeed Consulting LTD Tel: 0191 428 3386 Email: info@smartspeed.co.uk Web: www.improvingbusinesses.co.uk

Aerospace Ford Aerospace

Helping to achieve this expansion and growth are two factors – location and independence. “Being located in the North East of England is a great advantage to us. Per head of working population, this area exports more than any other region in the UK, both traditionally and currently. We believe that our future clearly lies in export and we count China as one of our main export markets for Easipeel, which is quite a coup. Brazil is also a flourishing market for aerospace and we are looking very seriously at exporting our full range of components there too.” The business also has agents in Italy, India and South Africa, with a view to adding France, Germany and Scandinavia to the portfolio.

Ford Aerospace at a glance Company

Ford Aerospace Ltd, South Shields

Employees

Products

Pressed and machined components, mechanical assemblies, treatments and laminated shimstock

Annual Revenue

£6 million

History

Founded February 1910

Market

5% export, 95% domestic

Niche

Supplies global aerospace companies

Branding

Ford Aerospace, Easipeel

Lean machines To manage such a global network requires a strict manufacturing strategy. For Ford Aerospace, lean manufacturing is the keystone to success in this area and something it takes very seriously. “We began to implement lean strategies approximately five years ago and we haven’t looked back,” says Ford. “I say ‘began to’ as the implementation of lean is not something you can ever complete – it’s an on-going process. It’s also an all-encompassing strategy that does not start and end on the factory floor. When you implement lean strategies in your company, yes it’s lean manufacturing, but it is also lean administration, lean accounting and being conscious of the need to eliminate waste throughout the whole organisation. We have on display a set of photographs from before and after the initial ‘lean attacks’. These, of course, show the improvements in our manufacturing process, but also people’s desks, the contents of their drawers and so on. It is important to take a holistic approach if you want lean to really work.” Inseparable from the lean business policy is the concept of continuous improvement says Ford. “Those two elements go hand in hand. You can’t have one without the other.” Rather than having a set system in place for this area, Ford Aerospace has teams who meet once a week and identify areas in need of attention. Teams are formed on a rotating basis and include all members of staff, including management. “No one is exempt, not even me,” he says.

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is why one of the standards they are determined to achieve is the Supply Chain of the 21st Century (SC21) Bronze award. Also in their sights are accreditation to the Environmental Standard ISO 14001, and the Health and Safety Award ISO 18001. Ford had to forego their Investors in People accreditation when the group was restructured in 2008, but it is their intention to reapply during the course of 2011.

The importance of perception

This is another area that is perceived as an on-going process and further improvements are constantly sought. “The company is continuously evolving and so, in the same way that the implementation of lean processes is never finished, nor is continuous evaluation and improvement, ” he explains. The Board and management at Ford Aerospace are keen to see the company measured against others, which

Ford Aerospace is one of only two British companies capable of making the Easipeel range of composite product for aero applications

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When it comes to training and professional development, Ford is just as passionate. “At any one time, we will have at least a fifth of our employees taking part in a learning programme run by a local business support organisation. In May, we also had eight of our managers across Ford Aerospace and Ford Component Manufacturing participating in programmes run by the North East Management Academy.” This is another area the company sees as an on-going process that is vital to future success. Mr Ford explains: “Engineering is increasingly less labour

Aerospace Ford Aerospace

intensive. The result of this is that we will need to employ fewer people, but those people will need to have a wider range of skills. This is why training and up-skilling is never ending and why we are so heavily committed to it.” Yet Ford Aerospace’s belief in the importance of training goes beyond the borders of the company. Geoff Ford is something of an evangelist for the importance of manufacturing and the organisation works closely with local schools and the local educationbusiness partnership in South Tyneside. “We want the people of South Tyneside to consider a career in manufacturing,” he says. “We find a major hurdle is that the sector has a real image problem – people regard it as being dirty, smelly, noisy and unattractive and this simply is not true. They also don’t realise that there is a wide range of career opportunities within manufacturing.” He believes that the key to overcoming this lies in educating teachers. “They are the people who will be providing careers advice so if they don’t have a clear and realistic image,

then we have no hope. So we work with them to enable them to understand the real opportunities engineering can offer.” One scheme that the company has implemented to raise the profile of engineering and attract more people to the industry is Ford awards ceremonies. “It is a sad fact that 50% of engineering graduates are head-hunted by the finance sector, not for their engineering skills, but for their intellect. This is a trend we want to reverse. We hope that these awards and our work with local schools, colleges and universities will encourage more people to consider engineering as a career.”

A new day And what of the future? In 2011 Ford won the Culture for Success Award, organised by business support organisations Service Network and Entrust. As the award is traditionally given to organisations working in the service sector, this is a real source of pride and achievement for the company and an important marker to a new era. “We are very proud to have earned this award. 2010 was our centenary year and as such celebrating 100 years of success was the focus of our company profile in that year. However, 2011 is the start of our next centenary. Our profile now is about our plans for the future.” These plans Ford explains, include becoming “leaner, meaner and greener”, increasing market share, particularly in terms of export, and adding new processes and products to its portfolio. And if the past 100 years are anything to go by, exciting times lie ahead for Ford Aerospace.

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Vehicle overhaul RailCare

Train keeps

a’ rollin

As well as coded repair work, the company has expertise in incident repair, spares and logistics and component overhaul

RailCare, a rolling stock service provider, is breathing new life into its train business and has won over 153 contracts in little over three years. Ed Machin reports.

Formed

in February 2007, RailCare is a private limited company and has four generations of one family working within the business. This is a fact of which RailCare is particularly proud as it enables decisions and communication between RailCare and its customer to be more personable and faster. This, the company says, can be

vital when in the process of contract negotiations or when the customer’s project is being managed. RailCare operates sites at both Wolverton in Milton Keynes and Springburn in Glasgow, a factor the company considers to be a great unique selling point due to its wide geographical availability. Traditionally RailCare was known for coded repair work of rail vehicles including vehicle refurbishment. Today it also has expertise in incident repair, spares and logistics and component overhaul. This allows the company to offer customers a total rolling stock solution. RailCare works with its associated companies RDS (Rail Door Solutions), Albatros and TXM Recruit in order to provide an optimum client service. These partnerships allow RailCare to source material quickly for its facilities and, if needed, recruit the correct capabilities and skill levels required for a customer project. Robert Baxter, RailCare’s managing director says: “We are immensely proud of what we have achieved over the last few years and it is down to having a great team of people who are equipped with the correct skill sets. We operate as one business with our two sites at both Wolverton and Springburn and communicate on a regular basis so that everyone is on the same page and understands the needs of our customers.”

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‘Sell it Right’ with Cincom AcquireTM It all starts in the front office: Is it taking weeks to close business that could take a few days? Are your sales cycles stretching from weeks into months? Are your engineers re-configuring the same products multiple times trying to meet a customer’s complex requirement? Maximise your sales effectiveness with Cincom’s solution for Product and Sales Configuration and Pricing and Quotation Management: Cincom Acquire accelerates sales cycles, reduces costs and boosts your profits. You can depend on Acquire to: Achieve 100% quotation accuracy Eliminate mistakes in configuration regardless of product complexity Assure maximum efficiency in both direct and indirect sales channels Fully integrate with existing CRM or ERP investments.

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With CONTROL:2010 you will Gain up to 80% improvements http://get-it-right.cincom.com in process throughput Maximise your user effectiveness through role based delivery of information critical to the user’s specific responsibilities Minimise response times by assuring critical information Published in association with: gets to the right Cincom Systems (UK) Ltd person 1 Grenfell Road Maidenhead Provide instant Berkshire, SL6 1HN access to execution tools within the user Tel: +44 (0)1628 542300 individualised role Fax: +44 (0)1628 542300 based dashboard. Get it right the first time. Get it right every time.

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Vehicle overhaul RailCare

Jamie Borgeat, RailCare commercial director, says: “We have a good level of skill base at both our Wolverton and Springburn facilities which enables us to be a successful rolling stock service provider to our customer base. We are supporting and encouraging our apprentices on a daily basis as they form the future of the rail industry.

A service business In charge of Service, Spares & Logistics, Bob Knowlson was charged with developing a long-term sustainable business on the back of the vehicles that RailCare refurbishes, moving from primarily project-based work to a seamless model of longevity. “Our job going forward is managing the supply chains, not just to sell parts,” Mr Knowlson confirms. Working closely with the rail industry’s rolling stock companies (ROSCOs), train operating companies (TOCs) and OEMs, RailCare also has the capacity to overhaul a considerable amount of products internally. This is in addition overhauling and/or supplying

the components direct to lineside in the customer’s depot. The company can conduct full overhauls including NDT testing, repairing, cleaning, shotblasting, modifying and testing as well as specific work on a range of train components including but not limited to: gearboxes, valves, pressure vessels (including door actuators and brake modules), compressors, couplers, power packs, and soft trim-including seat covers. RailCare also has the design and engineering capability to modify and fabricate parts.

Incident repair RailCare Incident Repair operates as a separate business in order to provide the dedication service required for train repairs. The work conducted by the group is not treated on an ad-hoc basis but each project has a dedicated and skilled workforce. Colin Gray heads Service, Incident Repairs and has over 40 years experience in the rail industry. “We have a team who I believe are the best in the business and, to me, that generates success,” he says. With an average annual revenue of £3.5-£4.5m, the group has worked with all of the train operating companies, which is a source of great pride at the company. “The fact that we have a 94% hit rate for bid contracts means we are not doing things too badly either,” says Mr Gray. Gray highlights a particular challenge for those working in incident repair as being the fact that each vehicle is, broadly

RailCare operates from both Milton Keynes and Glasgow, giving it a wide geographical base

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Chamberlain Transport LTD Customer service puts Chamberlain on the right track

HAMBERLAIN Transport is a family owned haulage and distribution business based in Crewe, Cheshire, which provides a range of transport solutions to firms in various market sectors. Dedicated to the highest levels of efficiency and customer service, Chamberlain has an annual turnover of over £4million, and a client base ranging from small local businesses to multi national companies. Over the last year one of their major contracts has involved delivering materials for leading rail maintenance and repair company Railcare.

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The work has involved managing the distribution of all rail components from the company’s headquarters at Wolverton, in Milton Keynes. Simon Chamberlain, managing director of Chamberlain Transport, said: “Railcare is a major blue chip company that requires a flexible and responsive service to meet their needs quickly. “Chamberlain Transport has worked with the rail industry for many years and we understand that time is a key issue and the window of opportunity for repairs to be made is often a small one – this makes the delivery of materials extremely important. We aim to provide the highest levels service for all our customers and pride

ourselves on our efficiency and dedication to quality,” said Simon Chamberlain.” The contract has seen the appointment, by Chamberlains, of a dedicated onsite manager to oversee the distribution of all rail components from Railcare’s headquarters, along with the provision of a specially designed vehicle allowing the company to make deliveries more efficiently.

Rob Baxter, Railcare managing director at Wolverton, said: “The contract with Chamberlain Transport re-enforces Railcare’s commitment to providing its customers with the highest levels of service and delivery.”

Vehicle overhaul RailCare

RailCare also offers interior refurbishment like on the Strathclyde train

speaking, different, “Considering that within the UK there are over 50 classes of vehicle, in reality you have to be an expert at everything,” he says. “The fact that we are successful means the guys are continually honing their skills; it is very much a self-perpetuating cycle.” “From an objective viewpoint, however, we deliver what we promise,” he says. “It’s no more complex than that. If I say to a customer that there is going to be a 16 week timescale, then it will be 16 weeks or less. This is also due to a good working relationship with our suppliers which is demonstrated by the fact that RailCare has had a 97% on time delivery rate for the 153 contracts this part of the business has undertaken since its inception. Customers are given the confidence to know that their vehicles will be back in service when we say they will be.”

Engineering Supporting all aspects of the RailCare business, the company undertakes detailed design with vehicle life extension, enhancements and renovation and integration for all of its projects. This includes electrical integration of new

on board train systems, specification and integration of new components and thorough corrosion assessments.

Project management RailCare have a dedicated project management team. The team is involved from the negotiation stage of a contract through to managing the project and right through to the completion of the customer project. This ensures that the same people are involved from start to finish and so can provide input throughout the operation and know what specifications have to be met.

Train to gain with apprenticeship schemes RailCare dedicates a sector-leading 5% of its total staff number to trainees. “RailCare has 23 apprentices in total: 17 at Wolverton and 6 at our Springburn facility,” says David Hilliard, RailCare’s training and development manager. Approaching his 40th year in the rail industry, and rising from the ranks of apprentice himself, he is well versed to understand the benefit of skill retention. “The youngsters we take on are predominately craft-based trainees, with a selection of business administration and IT staff,” says Mr Hilliad. Life skills are also very important for RailCare apprentices. Mr Hilliard explains: “Given that we look to develop people into rounded individuals who can play a key role in taking RailCare forward, we expose our apprentices to outside activities wherever possible. Whether this be presenting in front of one hundred directors at South East regional meetings (SEDA), or talking about their training experiences

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Faiveley Transport The Faiveley Transport business focus is on systems and products with high added technical value, which provide our customers with the highest standards of quality, comfort, safety and reliability.

aiveley Transport operates from two main facilities in the UK, Birkenhead and Tamworth. Both facilities are focussed on customer service as this contributes to 80% of the UK business, with Birkenhead servicing Brake control, Bogie brake, AGTU, Pantograph and Coupler systems and Tamworth servicing Door, HVAC and Electronic systems. United by the Faiveley Transport brand, we aim to distinguish ourselves through innovation and flexibility. Faiveley Transport aim to be more than just a supplier, Faiveley Transport is a hands-on long term partner for installation, commissioning and

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maintenance contracts with clear agreed commitments.

a turnover of over â&#x201A;Ź900 million. 74% of its activities taking place in Europe, USA and Asia where the organisation is quickly growing its presence.

Having celebrated its 90th anniversary in 2009, Faiveley Transport today offers one of the widest and most diverse portfolios of products in the rail Published in association with: industry. With a strong orientation Faiveley Transport towards turnkey solutions, meeting the needs of its broad Tel (Birkenhead): +44 (0)151 649 5000 client base, the organisation draws Fax (Birkenhead): +44 (0)151 649 5002 on its international experience to Tel (Tamworth): +44 (0)182 730 8430 innovate and expand its offering. As a global brand, Faiveley Transport has influence in over 20 countries worldwide generating

Fax (Tamworth): +44 (0)182 730 8431 Email: sales@faiveleytransport.com Web: www.faiveleytransport.com

Vehicle overhaul RailCare

at Wolverton, one thing is for sure and that is that RailCare apprentices become equipped with many valuable skills.” RailCare Group CEO Laurence Seward and commercial director Jamie Borgeat both began their careers as trainees. “Quite simply, if you demonstrate an aptitude there will be opportunities, and you will be supported all the way,” says Mr Hilliard.

Cincom technology Like many in the rail sector, RailCare recognised that an ERP (Enterprise Resource Planning) system was critical in ensuring the growth strategy it had set. RailCare, having reviewed the ERP market, approached Cincom - one of the vendors with domain expertise in complex manufacturing environments they are RailCare’s long-time ERP provider. The choice of Cincom was made in order to leverage the company’s lean capabilities for RailCare’s future requirements. Following a meeting between RailCare’s Robert Baxter and Darryl Gillett, Cincom’s director of professional services, a partnership was established between the companies. This recognised that the provision of key management information was a significant factor in RailCare’s past success, and would continue to play a key role in the future. New areas have been explored to support a new e-commerce enterprise and for the processes of bid management within the overall tender-toorder process. The system will be driven both wider and deeper and the RailCare/ Cincom partnership will continue supporting RailCare’s objectives.

In summary RailCare strives to maintain and exceed customer needs and wants in order to be the preferred rolling stock service provider. This is demonstrated through the company’s product portfolio. It includes incident repair; coded repairs of rail vehicles including refresh and refurbishment; and service, comprised of spares and logistics, and component overhaul. In addition, due to the companies location, its facilities at both Wolverton and Springburn are able to easily accommodate the UK franchises and both sites are looking forward to continuing the good work of the last five years.

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Pressing

ahead Does manufacturing have a future in the UK? Jane Gray finds out how automotive supplier, Stadco, has emphatically committed itself to making sure the answer is ‘yes’.

many UK manufacturers, and particularly those in the automotive industry, Stadco was hit hard by the recent recession. As demand for its services fell toward the end of 2008 and the credit crunch became full blown recession in 2009 the company was forced to release 40% of its workforce and the future looked uncertain. Looking back at those uncertain times Dinos Andreou, sales and marketing director at Stadco, remembers the tough decisions that he and his colleagues on the management team had to make. As he explains, these decisions were not only in relation to people but also with regards to the way the organisation operated: “We undertook a fundamental strategic review process to identify where

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we needed our focus and attention for the future of the business.” This review process resulted in the streamlining of operations. One of their plants in Coventry was substantially downsized with the work transferred to other sites in order to better utilise available capacity. Activities in electro-coating were discontinued and a phased withdrawal from certain specific stamping segments which were no longer deemed competitive was initiated. In discontinuing such non-core areas however, Stadco pared back operational burdens and freed up resources to exploit what the management team had identified an island of opportunity in a market largely characterised by austerity. Andreou elaborates: “We saw model proliferation on the behalf of our OEMs as a trend which is going to continue. We also saw that that a big facilitator for the OEMs would be the ability to bring those vehicles to market in an investment efficient manner. “What this meant for us was the creation of two central strategy strands. Firstly the creation of low investment

Automotive Stadco

solutions to support the introduction of more models to the market place. Very much related to that, the second strand of our strategy focused on being able to provide smart flexible facilities.” The latter is an enabler for OEMs, allowing them to utilise Stadco’s technical capabilities in order to lower the traditionally high cost involved in the development of new model derivatives.

Opportunity knocks Stadco stuck firmly to these principles throughout 2009 and 2010 and achieved enough success to be confident their choice had been right. It was not until early this year however, that the chance came to properly capitalise on the new focus and also to strike a compelling blow in the battle between UK-based manufacturing and the gradual migration of industry to foreign shores. In February this year Stadco acquired a new site in Telford. But this was not just any site. Stadco’s supply chain director, Chris Fisher recounts the turn of events: “The Telford site had previously belonged to one of our main competitors, Ogihara, who had opted to withdraw from manufacturing in the UK during the downturn. When we took the site over it had been lying dormant for 14 months and most of the facilities had already been stripped out and transferred overseas, capacity which has been lost forever to the UK. Fisher continues: “What were left on the site were two fully automated, modern stamping lines and a fully equipped tool room in a 33,000 square metre plant. All this empty space provides a huge opportunity for us to develop low cost, smart, flexible manufacturing processes.” Since February the Telford site has been a hive of activity. Significant investment has gone into equipping the plant. The stamping lines were swiftly re-commissioned and just five weeks after the purchase was made, Telford was turning out product for key customers such as GM and Jaguar Land Rover (JLR) whose demand for services had returned with vigour during 2010, putting pressure on the capacity of suppliers. Giving more detail on the kind of capacity which they have now reopened for the automotive market Andreou comments: “The Telford site

Company heritage Stadco can trace its roots in the production of metallic forgings back to 1812. In 1825 the company’s headquarter were established in Shrewsbury, were they still reside today. The focus of operations moved decisively toward the automotive sector during the vibrantly productive years of the 1960s when the company became known as the Shrewsbury Tool and Die Company. This name evolved into the acronym STADCO, though today the derivative is no longer used and the marque ‘Stadco’ is independent of any further meaning. Initial forays into automotive supply say Stadco invest in tool making capabilities. In the 1980s however the company developed expertise in of body-in-white stampings and assemblies. Stadco still prides itself on a particularly diverse range of offerings in this area. With regards to stamping, Stadco can turn out the smallest bracket through to the largest body panel. In assembly the simplest sub-assembly and the most complex modules and even complete body structures in steel or aluminium can also be accommodated. Stadco has a particular expertise in the stamping of aluminium, including skin panels, with more than 20 years experience dating back to the first generation Land Rover Discovery vehicle. Furthermore, whereas most manufacturers will limit themselves to supplying one volume range, Stadco will supply for niche orders of a few 100 parts per year through to high volume supply of around 400,000 vehicle sets per year and anything in between. Such range is a central differentiator for Stadco. Today, Stadco supplies over 70 million such parts annually to the world’s leading automotive manufacturers. Looking to the future, Stadco has streamlined and focused its business model. Core strengths in the production of aluminium and steel stamping and assemblies will drive future business while product and process development will in turn be driven by demand for lighter weight architectures to support fuel efficiency.

provides specialist capacity in the area of large stampings – 1000 tonnes plus. This puts Stadco in a unique position in the UK. We are the only supplier that is capable of supplying, in volume, exterior skin panels to OEMs at that tonnage and size – typically this type of work is undertaken in-house by the OEM’s since they regard it as a core capability. “However, with certain core customers we have struck strategic relationships to provide this kind of work. We have stamping lines at our Shrewsbury and Castle Bromwich plants that are already doing this but the acquisition of Telford was prompted by a critical need to increase capacity in order to service growing OEM demand.” Primary among the customers now relying on Stadco for the supply of its large pressings is JLR, a company with

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Automotive Stadco

Stadco and JLR have both worked hard to bring off shore manufacturing back to the UK

which Stadco has a long running and extremely close relationship. Stadco had been supplying pressings to JLR since the early 1980s. Both Stadco and JLR have a real will to develop British automotive manufacturing and, throughout the recession, the two companies have worked together to develop business cases for bringing offshored manufacturing back to the UK. Of course such ambitions have to be based on something more than patriotism but Andreou is firm in stating that, so far, JLR has reaped benefits from such relocations, both in terms of logistics savings and green credentials. Andreou says activity on such projects is high: “In the last 12 months we have moved significant amounts of work from Canada, Germany and Sweden, back to the UK.” Such actions defy the popular perception that UK manufacturing has no future and make a strident statement for the value which local supply can bring to markets like automotive.

Better together Unsurprisingly, Stadco’s close work with its customers in supplying unique

services to the UK automotive industry, and its work in bringing more manufacturing activity back to the UK, has also necessitated strong communications with and support from its supply base. The context of recession has made strong relations here all the more paramount as David Watson, purchasing director at Stadco, explains: “During 2009 and into 2010 we were losing a lot of our supply

Stadco at a glance Overview

International supplier of Body-InWhite products and services to the automotive industry

Site locations

UK: Shrewsbury, Castle Bromwich, Telford, Shrewsbury, Powys, Coventry Germany: Saarlouis India: Chennai

Employees

920 (UK & India)

Turnover

£92m 2010 (UK & India)

Import/Export ratio of sales

90% of UK production supplied to UK based OEM’s

Key customers/ markets

Jaguar Land Rover, GM, BMW, Ford, Nissan, Magna, Benteler, AGCO

Points of interest

Stadco is due to celebrate its 200 year anniversary in 2012

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Profil UK & Stadco P

rofil Verbindungstechnik and its daughter company Profil UK Ltd have enjoyed a mutually successful business relationship with Stadco for nearly 15 years, beginning at first with the BMW Mini upon which there are nearly 150 Profil pierce nuts and studs assembled on to sheet metal panels directly in the press process. The design, development and manufacture of pierce nuts and studs and the associated automated installation tooling and feeding equipment is Profil’s strength, the cost and process quality advantages this technology brings is utilised by all the leading Automotive OEM’s in Europe and their Tier suppliers such as Stadco.

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Following on from the Mini Profil also supplies pierce nuts and studs for over 150 applications on the Land Rover Freelander and on the new Evoque in sheet materials as diverse as Aluminium, Mild Steel and High strength steel. Indeed the successes above have convinced JLR to use over 300 pierce nuts and studs in the Body in White panels for the Discovery 4 and Range Rover Sport models. The consistent technical performance and superior positional tolerances achievable with Profil products used in the press tools has enabled Land Rover to improve its customer satisfaction and reputation for build quality.

Stadco have recently ordered a number of new Profil feeders for their newly acquired Telford facility and these will undoubtedly serve Stadco well in future years as they enhance their reputation in the supply of BIW panels the world’s leading Automotive OEM’s. Profil looks forward to continuing to building on past successes in partnership with Stadco. Published in association with: Profil UK

Unit 6 Whitwick Business Centre, Stenson Road, Coalville, Leicestershire LE67 4JP

Tel: 01530 276515 Web: www.profil.eu

Automotive Stadco

base. Now our key suppliers in the UK have been reduced to a few large organisations. Our main raw materials are aluminium and steel which are provided by the likes of Tata, Arcelor, Steel & Alloy and Novelis.” Watson suggests: “Just as Stadco benefitted from Ogihara’s decision to close its UK manufacturing base, our suppliers have benefitted as we have moved business from others which succumbed during the recession.” Andreou agrees and adds perspective: “There is a direct parallel between the deliberate consolidation strategy we have seen among our customers in placing work with a smaller base of reliable suppliers, and the strategy we have ourselves followed. The result is that we have much deeper and wider relationships with those which still support us.” For Watson, what these “deeper and wider” relationships entail is the opportunity to form far more interdependent business models. He explains: “With key suppliers we are sharing expertise and collaborating, for example, in the development commercial proposals for new business. We are also working with

During 2009 and into 2010 we were losing a lot of our supply base. Now our key suppliers in the UK have reduced to a few large organisations. Our main raw materials are aluminium and steel which are provided by the likes of Tata, Arcelor, Steel & Alloy and Novelis David Watson, Purchasing Director, Stadco

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Tata Steel Automotive T

ata Steel Automotive Service Centre is uniquely positioned to assist automotive manufacturers, JIT Service of High Quality Products is maintained alongside a Continuous Improvement Process. Continual monitoring of quality, service and New Product development to ensure maximum cost benefit is achieved. Offering a broad range of processing capabilities on top of our slitting and decoiling lines we offer multi strand, trap and press blanking lines which boasts large full finish skin panel capabilities, this complemented by our 2D non linear Laser Welding Cell enables us to truly offer one of the most comprehensive ranges of products and services under one roof. At the heart of our business are our

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business, part of the newly formed customers, which is why Tata Steel Automotive Sector within Tata Steel, Automotive have dedicated cross driving greater emphasis on customers, functional account teams comprising service, manufacturing performance, of sales, technical and manufacturing customer support and product services ably supported by our design development, meeting our customer and engineering experts. evolving needs and demands. We use this expertise in developing Call us today to see how we can relationships with our customers make a difference to your business. supporting their needs and aspirations, a dedicated team will work together Published in association with: with you on projects Tata Steel Automotive such as consignment The Steelpark, Steelpark Way Wednesfield stock warehouses, Wolverhampton new tooling design West Midlands WV11 3SR and manufacture, as well as overseas Tel: 01902 631163 ventures. Fax: 01902 608853 We truly are a Web: www.tatasteel-servicecentres.co.uk customer-focused

Automotive Stadco

key suppliers, for example, Tata, on joint health and safety policy reviews, this exchange of expertise supports continuous improvement and performance of both organisations.” Speaking in more general terms about the importance of supplier relationships Watson emphasizes: “Particularly with raw materials supply there has been exceptional support throughout hard times. Tata is a great example, in addition to the health and safety reviews, we are also working with them on a number of projects, consignment stocks at our Telford facility being one.” With input prices remaining volatile it is likely that we will see more manufacturers creating supportive networks like those Stadco is now collaborating in. Andreou says: “With rising utilities and materials prices we have had to work hard to strip cost out of our business on a year on year basis.” This includes working with suppliers and customers in triumvirate on some purchases to ensure that the most cost effective procurement solution is chosen.

Reinforced ambition Within Stadco such rationalisation and improvement in cost efficiency is a key driver in the business and is supported by initiatives like Stadco’s lean programmes. These programmes focus on providing lean capabilities at operator level but, as HR director Stan Meiklem, say: “This is just the latest incarnation of a process that has been going on for years.” Stadco supports an integral culture of improvement and due diligence at all times, not just when the going gets tough. This is a work culture which will become more accessible to a new generation of employees as Stadco prepares to re-introduce its apprenticeship programme. Telford College of Arts and Technology will support the delivery of this programme by taking on a large part of the administrative burden while Stadco concentrates on ensuring that it has the resource to provide a rigorous management structure for apprentices who find a home with the company. All in all it must be said that the storm clouds are rapidly dispersing for Stadco. Commitment to a well thought through strategy and a fundamental belief in collaboration as a tool for resilience, have put the company on a firm footing as the UK swings in to economic recovery. Chris Fisher sums up the situation: “We were forced to consolidate, take stock and re-organise. But we have come out as a stronger and more focussed organisation with a clear vision of where our future success lies.”

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Aerospace 134

Aerospace

Senior Aerospace BWT

Senior Aerospace BWT is a manufacturing firm rich in history and heritage that has been a part of the North West business landscape for 175 years.

For

a sizable chunk of that time the company was known as Baxter Woodhouse and Taylor (BWT), before becoming a part of Senior PLC in 1999. Starting out in 1836 James William Baxter set up an agency dealing in cotton goods from his home at 69 Cannon St. in central Manchester. By 1876 the company was well established in a newly-built warehouse in George St, a developing area now part of Manchester’s ‘China Town’. James had now begun the process of adding value rather than merely selling cotton on. In 1887 James retired and his brother Fredrick took over as MD with Robert Woodhouse investing in the business as a sleeping partner and John Crawshaw Taylor acting as secretary. From this point on the company was formally known as Baxter Woodhouse and Taylor or Baxter’s for short.

The driving philosophy behind Senior Aerospace BWT is one of adding value and delivering a complete design, development and manufacturing service to its customers David Beavan, CEO As time went on Baxter Woodhouse and Taylor began to develop their own products using the Falconia and Windak trademarks. Products such as silk blouses and shirts, gabardine cloth golf ware and sports jackets, waterproof clothing aimed at the expedition arenas as well as casual jackets for ladies fashion. The Windak ‘Safesleeper’ electric blanket was made for the domestic market right up until 1979. As with many things, war time drove creative thinking and product creation like little else and Windak products were

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increasingly developed for the rather more specialised needs of the Air Ministry. As a result, many more doors opened where opportunity was ripe, setting the business on to the road that leads us to the current day. The company eventually moved to Poynton in Cheshire after the Second World War and turned its attention to the manufacture of specialised equipment for the aviation industry. It became involved in developing items such as heated flying suits for high altitude flying and immersion suits for the crew of bomber planes; both required at the time by the Air Ministry. All this work in the aerospace world inevitably put Baxter Woodhouse and Taylor in a good position to

take advantage of the future growth in passenger aircraft; which was to become a major part of their future. In the 1950’s and 1960’s the company began to use the knowledge it had gained from the clothing industry to develop insulation panels, electrical heater mats, lightweight tubing and other products for the aerospace industry. As the availability of air travel for all became a reality, Baxter Woodhouse and Taylor entered a new phase in its history and the production of garments ceased. Since then the company has predominantly supplied the aircraft industry but has occasionally been involved in an array of one off specialist projects including things as diverse as medical, motorsport and Richard Branson’s hot air ballooning exploits. One of their heated flying suits even made a cameo in one of the early Star Wars films and their pressure suits and helmets were actually worn under pressure by the actors in the H G Wells classic science fiction film ‘First Men in the Moon’. Such a strong history of evolution and innovation has driven the current business and is part of the DNA of the place. Keeping the Baxter Woodhouse and Taylor name alive was seen as an important part of the transition to becoming Senior Aerospace BWT and it is easy to see why. The philosophy embraced in 1836 of adding value rather than straight forward buy and sell, is at the very heart of what Senior Aerospace BWT does today.

Senior Aerospace BWT In 1996 Baxter Woodhouse & Taylor was sold to a venture capitalist company Cork Industries Ltd, bringing to an end the involvement of the Taylor family. In 1999 the firm was acquired by Senior plc, an international manufacturing group now with facilities in 11 countries, employing over 5,800 people across the world. From this point on they were known as Senior Aerospace BWT and in 2002 the company relocated to a purpose built facility in Aldington, Cheshire. The main thrust of the business today is the design and manufacture of ultra-lightweight air conditioning ducting for Customers predominantly in the regional jet, business jet, helicopter & military aircraft markets. Their products distribute air around the interior of aircraft

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Aerospace

Senior Aerospace BWT with mind bending complexity; keeping passengers and the crew comfortable whilst cooling important equipment such as avionics and computer systems. The management of how the air arrives in the right places at the right pressure is anything but simple and requires the routing of rigid and flexible duct work to wind its way in and around pretty much every other component like wiring and hydraulics. Factor in the need for durability, flexibility and lightness and you can begin to get a grasp of just how tall an engineering order it is. Each individual part can be unique in size and shape which, from a manufacturing point of view, means literally thousands of different pieces, in fact 10,000 individual parts every month. To do all of this relies absolutely on the people on the factory floor’ so Senior Aerospace BWT is an almost entirely machine free zone. The complexity of the lay-up process used in the construction of components, added to the diverse nature of them is such that automation is virtually impossible. Senior Aerospace BWT have a manufacturing process unique to them of using thermo-plastic rather than thermo-set technology to create a durable, flexible and light product and with the fire retardant properties inherent in the materials used, it makes them ideal for use in aerospace

applications. The origins of the process can be traced back to a man by the name of Arthur Dudley, who pioneered a process now known as Plastics Dudley or PD, back in the 1950’s. Without Arthur Dudley’s PD process, Senior Aerospace BWT wouldn’t be the company it is today. PD is a technique employing a sacrificial mould around which the layers of material that make up the components are laid and then impregnated with a thermoplastic.

The biggest indicator of the quality of the company as a whole is its commitment to achieving world class levels in quality, cost and delivery by using a structured approach to improving its products, processes and its people The technique enables fast, cost effective and accurate production and allows different grades of material to be used to suit each product. Using the PD process, the weight saving and flexibility over other, more traditional methods is significant and it allows products of almost any complexity to be made easily. One of the other ways Senior Aerospace BWT has retained its leadership position in the market is through partnerships with key supply chain companies. One such collaboration has been with Teledyne CML which specializes in high-quality precision machined products and the manufacture of complex composite assemblies. Over the past several years Teledyne CML has worked with

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Senior Aerospace BWT on a number of major commercial and military aircraft programmes and both parties are currently in the middle of the design phase of another major project. This collaboration has not only helped Senior Aerospace retain its edge in the market but has also assisted it to provide more diversified product offerings.

Lean Kaizen and focused improvement The man management of how all of that is achieved is a celebration of the benefits of both Lean working and Kaizen improvement programs to get the workforce involved with improving the overall efficiency of the company, as well as ensuring the high quality of the end product. As with all good organisations, it is a constantly evolving

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process with the well being of its people at the very centre. As an example, there is a lot of chemistry involved in the manufacturing process so good ventilation is vital. The local exhaust ventilation systems are continually audited and upgraded to ensure they keep the workplace well within exposure limits. Not only that, but employees themselves are actively involved in monitoring the systems. It wasnâ&#x20AC;&#x2122;t always so and the introduction of Lean processes was a painful one at first. After a number of stalled attempts, with its introduction being met with cynicism from those at the coal face, the arrival of current CEO David Beavan some six and a half years ago set in motion a change in culture that would eventually see a shift in balance towards pro-Lean thinking among employees and build new foundations for the future. Now the company use a three pronged approach to overall business improvement that is companywide; Lean manufacturing, Kaizen ideas implementation and focused Improvement groups. All are designed to engender the involvement of all employees across the factory in delivering real business improvements.

Aerospace

Senior Aerospace BWT Introduction of Lean John Fleming was the man tasked with taking Lean across the entire workforce when he joined the company at the beginning of 2008 and his is a story of patient success. Working hand in hand with manufacturing director Simon Ashley, a program of Kaizen meetings and focus groups was implemented to encourage the cross pollination of ideas from department to department, something that had never been done before. It helped people to look outside their own areas and into those of others, giving them a much better understanding of how everything fitted. The introduction of Lean practices became much easier when employees had the chance to be actively involved in planning and implementation. At least six Kaizen sessions are now scheduled every year, each aimed a improving a different area of the business meaning that regular time is dedicated to the well being of the whole business, something that David Bevan says would have been difficult to achieve without a structured approach to Lean. “The reluctance to release employees for up to four days to take part in a Kaizen workshop has long since passed now that the benefits are clear to everyone.” All that effort has brought rewards in efficiency as well as in employee morale. Employees now feel involved in the business and are actively encouraged to come forward with ideas that are then properly investigated. The cynics are still there but John claims that 90% are now advocates of Lean practice. As John Fleming put it “100% of our employees are trained in Lean methodology and at least 50% of the workforce has now also been involved in a Kaizen event.” The work also continues outside of the factory with the Senior Aerospace BWT team actively helping suppliers to raise their game, a vital factor in driving the business forward.

These skills can only be gained through on the job training and Chris Mead and her dedicated team of trainers lead new employees through a five week programme in the training school, which forms part of a 13 week company induction program. However, in takes many years to gain all the skills required, so Chris’ team work tirelessly transferring their skills and knowledge. The aerospace industry is as cyclical as any other and subject to the ravages of global economies so, as growth follows slow down, Senior Aerospace BWT are currently recruiting and have taken on 42 new starters already this year with at least as many again being sort. Great lengths are taken to ensure that new people not only have the aptitude and dexterity for the job, but also that they will be happy and comfortable in their new role before they even get to the interview stage. Sally explained that recent advertising resulted in an avalanche of applicants leaving a big task to whittle those down. To help an online initial application system is being created to streamline the whole process.

New things bring new problems The driving philosophy behind Senior Aerospace BWT is one of adding value, a full service to their customers. From

Introducing new people The Senior Aerospace BWT team have recognised the benefits a structured induction and training programme has on employee morale and retention. Sally Kennedy, HR manager and her team have developed a structured process of bringing new people into the business that will quickly provide the skills necessary to work in this unique hands-on production environment.

One of their heated flying suits even made a cameo in one of the early Star Wars films

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Teledyne CML Group Limited In 2010, Teledyne Technologies Incorporated expanded its UK presence with the acquisition of Intelek plc. The CML Group division was renamed Teledyne CML Group Limited and placed under the direction of Teledyne Brown Engineering Inc., a leader in advanced manufacturing and engineering. Today, Teledyne CML has the resources, strategy and capacity for even greater success.

eledyne Technologies, a company with annual revenues of $1.9B, has been a sustaining member of the business community in the United Kingdom. With the addition of Teledyne Intelek Ltd., Teledyne Technologies has more than 16 facilities and approximately 700 employees in the United Kingdom. Teledyne CML is a complimentary addition to the Teledyne family which boasts many customers in the commercial and military aerospace industry. Teledyne CML and Teledyne Brown share a rich history in the industry dating back to the early days of flight. CML has built an outstanding reputation in precision machining for commercial aircraft. Teledyne Brown was established to support Dr. Wernher Von Braunâ&#x20AC;&#x2122;s rocket team and is a developer of space hardware.

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Teledyne CML has just opened a state of the art 6,000 sqm facility devoted entirely to the manufacture of advanced composites. Their primary focus today is on precision machined components for commercial aircraft and advanced composites for military and commercial aviation customers. With TBEâ&#x20AC;&#x2122;s design capabilities, Teledyne CML adds designbuild and design for manufacture to its portfolio. Teledyne CML also brings a history of project and supply chain management and lean manufacturing techniques to ensure a right-time-first-time product with continuous improvement in quality, cost and delivery. Teledyne CML has received customer quality approvals from Airbus UK, AgustaWestland, BAE SYSTEMS,

Bombardier Aerospace, GE Aviation, GKN Aerospace, Hawker Beechcraft, Senior Aerospace and Raytheon Systems. Teledyne Brown and Teledyne CML together provide a full range of engineering and manufacturing services from concept to production and delivery. The companies plan to cross leverage their capabilities to increase customers in the US and UK.

Published in association with: Teledyne CML Group Limited Tel: +44 (0) 151 647 5531 Email: enquiries@cml.tbe.com Web: www.cml-group.com

Aerospace

Senior Aerospace BWT concept & modelling, detail system design, tool & fixture development, test & system balancing, certification and finally serial production. Head of engineering is Dave Dollan, a man with a life time of aircraft experience and a deep passion and pride for Senior Aerospace and its Baxter Woodhouse and Taylor heritage. Keenly aware that the history and the future of the company are at stake Dave is determined that the company remains true to its roots in terms of quality and service. ”Senior Aerospace BWT is about offering a service rather than just a product.” The process of introducing new product into the business is key to delivering this service and in 2007 a focused improvement team was formed with the brief to develop a new product introduction process that would embrace design for manufacture. Mike Novak, head of product design and programme launch now leads a team of project managers, designers, toolmakers and product developers that ensure all aspects of the NPI process are followed and product is ready for handing over to Simon’s manufacturing team.

Mark Jenkins, commercial director, knows only too well that the industry has historically been cyclical with peaks and troughs occurring every 10 years or so, the most recent being post the 11th September 2011 tragedy and then the global economic crisis during 2008 and 2009. in addition to this the future is being shaped by the requirement for air travel to be cleaner and quieter for the environment and more efficient due to both depletion of natural resources and the increasing price of oil per barrel. For now the market recovery is set to continue and grow over the next few years the future looks bright. With a customer base that is a who’s who of the aerospace world, Senior Aerospace BWT is a forward thinking, well managed company with good historical foundations. The biggest indicator of the quality of the company as a whole is its commitment to achieving world class levels in quality, cost and delivery by using a structured approach to improving its products, processes and its people. Furthermore the company’s commitment to the environment is demonstrated by its ISO 14001 accreditation and further commitment to achieving the OHSAS 18001 occupational health and safety management system standard in the next 12 months. Their philosophy is simply stated as “Quality products, on time at a profit.” It’s safe to say that the Baxter Woodhouse and Taylor founders would be proud of the business they created and happy that it is in safe hands, growing towards the future.

Cost control Clearly you cannot have a lean production line without looking very closely at your purchasing. That falls to CFO Darren Butterworth and purchasing manager John Wilkins. Buying represents 30% of the cost base and Darren and his team continue to follow a stringent cost mitigation process that includes everything from introducing new processes, through re-sourcing and energy management within the plant. This has included installing a voltage optimiser and smart lighting. Managing waste helps with cost reduction and overall efficiency and gains have often been found in the detail.

ERP and the future The final piece of the puzzle is the introduction of a new ERP system. The current one is some 10 years old and a lot of functions happen outside of it meaning a number of job duplications. Provider selection for the new system is in its final stages and Darren hopes that it will begin integration within six to eight weeks. That means it should be fully up to speed within 12 months and Darren is very keen that this time it will be as near to future proof as possible.

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Know your market. It is the first lesson in the school of business success and Mitras have taken it to heart. Jane Gray talks to David Montague at Mitras to gain a little more insight into how this thoughtfully innovative manufacturer is approaching competition in volatile times.

‘A’ class

strategy Cheshire-based

composites manufacturer Mitras Automotive has been in business since the 1970s. Its forte has always been the manufacture of ‘A’ class body panels for Automotive Cars, commercial vehicles and off highway industries using SMC (Sheet Moulding Compound). However a facility with available technologies, an inquisitive and exploratory culture and, more recently, the pressure of recession, have brought diversification to the company’s markets and production output.

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A down to earth company with a pragmatic focus on quality, Mitras is not among those organisations prone to issuing mantras and mission statements about its operational goals. When asked to describe the driving values of the organisation David Montague, director of sales at Mitras stated: “Our driver is to be the market leader in providing body panels and structural components to our markets.” Nothing more, nothing less. This simplicity of vision should not however, be taken to reflect a lack of ambition. Rather, it shows a clear sighted dedication to delivering specified quality on time, in full. Perhaps this standard expectation of efficiency and effectiveness in service was fostered during the company’s time as part of a different European group [Mitras is now part of the Senata gmbh Group of Companies, see the Mitras at a glance inset for more details] with a high proportion of German Automotive Car business. As montague recalls: “The 90s saw us doing a lot of Germanled business with Mercedes. We have benefitted a lot from that experience with technologies coming into the UK factory that weren’t there before. Being able to offer that technology brought us UK contracts with Renault, Ford and Aston Martin.” What exactly do these contracts involve? Montague explains: “Our business runs across three major

Automotive Mitras

Mitras manufactures body parts and bonnets for automotive cars and off-highway vehicles

sectors: automotive cars, off-highway vehicles and general industrial. For the first two sectors we produce ‘A’ class body panels and structural components. Structural components being any kind of hidden panel within a vehicle, like heat shields or an inner wing. For off-highway we also make bonnets, floors and a broad range of other components. We also do assembly work for this sector so that a bonnet might also include assembly with a frame, grill, lock, sound insulation and so on. So we are not just supplying panels but modules and sub-assemblies which are delivered straight to track-side and fitted directly to the vehicle.” “Our third sector, general industrial, is the newest addition to the business and it is very broad. It includes any opening I can see in the market place where composites would be useful. It includes the building sector and the solar energy sector, where I have done business

before, and there are a couple of recent developments that I can’t talk about just yet!” The opportunities here seems endless. Montague says: “It is just a matter of uncovering the opportunities and targeting them very specifically. It is a small side of the business as far as sales are concerned but the work is more off-the-wall and there is lots of room for innovation.” Of course with every piece of diversification more variety is added to production. But Mitras seems to take this in its stride. Nonchalantly, Montague brushes the challenge aside: “Everyone has their own specifications and requirements and every product we make is custom designed for a specific application and customer. As far as the manufacturing process is concerned the basic process is the same. The same presses are used for all orders, the same paint plant, and the same employees. The differentiation in terms of the time it takes us to complete certain order depends largely on individual customer quality specifications, and these rely on the market application and the cost they are looking for.” And what about differentiation from others in the market? Montague is confident here: “We are unique in the UK. We use two materials in production. SMC [sheet moulding compound] and, more recently DCPD [dicyclopentadiene]. We have invested in DCPD over the last four years to create

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a second manufacturing site for that process.” It is not these materials themselves which make Mitras unique but rather the company’s ability to process both and the range of offering which run alongside them as Montague explains: “Using SMC and DCPD and offering our paint shop as well as design capabilities and so on really sets us apart. There is no one else in the UK that offers all that we do as part of one

Mitras UK at a glance

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Location

Winsford, Cheshire

Turnover

£15m+

Employees

170

Key markets

Automotive cars, off-highway vehicles, general industrial

Key products

SMC and DCPD body panels and structural components including bonnets, floors, heat shields etc.

Points of interest

Mitras is part of the Senata Group which has eight group companies based in Germany, Spain and UK

business and there are only a handful of companies in Europe. This offers customers the opportunity, not only to come and see which material is best for them in terms of performance and cost [DCPD IS slightly more flexible and the tooling costs are slightly lower] but also gives them the opportunity of combining the different materials within one module and getting it delivered – ready to use – as part of one order.” The company is also exceptional in the UK in terms the capabilities of its equipment. No other competitor has the same range and size of presses for compression moulding, and a new press for DCPD has just been purchased which will increase the company’s capacity for DCPD moulding by around 25%. Montague comments on this new introduction to the factory: “This represents several hundred thousand pounds of investment in our DCPD capabilities and there will be further investment to follow in terms of supporting facilities and reworking the factory layout. There is a lot of work going on and there are some significant

Automotive Mitras

changes being made to the plant. We have brought an ex-employee back in on a contract basis to manage the redesign, and he has been pouring in a lot of manufacturing expertise, alongside our incumbent manufacturing team, to make sure we optimise the layout for efficiency and the company’s plan for growth in coming years.” Growth has not been a consistent over the recent past however, as many readers may well imagine. The recession necessitated more than a 25% reduction in staff and, although Montague was not with the oraganisation at the time he says: “It was a difficult recession for Mitras, but we benefitted from being part of a group and from the diversity of our markets. We have come through well and the way the group managed the difficulties during recession has made a good impression on customers.” The tipping point for recovery came in the second quarter of 2010 when demand took a sharp upturn. Looking back, Montague is pleased with the regulated way in which the company managed its mini renaissance: “Luckily we have quite good visibility from our customers on the schedules - about three to six months – so we were able to bring staff back on in a controlled manner and train them in the roles that they were going to be doing. The increases in staff have almost exclusively been on the shop floor, we simply needed more feet on the ground in order to be able to supply the number of parts being demanded.” More than 20 new staff have been taken on in 2011. And now that the company is back up to speed and prospering its ambitions are turning further afield than its traditional domestic market. Exports are growing all the time and the company now sends its products to France, Sweden and Poland is soon to join the list. “The proportion of our business taken up by exports as opposed to domestic orders is set to change a lot going forward,” says Montague. This is in response to significant business won over the last 18 months, mainly in the off-highway sector, and Montague is aware that this makes the business a prime example of the kind of enterprise now being advocated by government. Awareness of the macro political environment is also impacting on the

company’s desire to re-engage with apprenticeships, which used to be a route for recruitment. “I used to be an apprentice myself,” say Montague “and I am a big believer in the process. We have has some discussions about restarting our apprenticeship programme. However, we need to think carefully about it. There is a lot of management around providing apprenticeships. With the lay-offs we have had to make in the past we simply didn’t have the people to provide the training and mentoring that an apprentice needs, or the job for them when they qualified. Apprentices are not supposed to be short term cheap labour. They are an investment and you should deliver them properly or not a tall. Now that we are returning to stability we would like to start again.” Properly or not at all. This seems to sum up Mitras’ approach across its business and it is why it is now succeeding in winning new business in the select areas where it has diversified as well as its more traditional sectors. However first and foremost for Montague the focus is on delivering a reliable service to those whose trust the company already holds. After all, as Montague himself puts it, repeat business is the greatest accolade.

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Serious

about sleep Kent-based Simmons UK is the parent company to four of the country’s biggest bed brands: Sleepeezee, Simmons, Nestledown and Cumfilux. Collectively known for their high quality products, which are widely available throughout the UK, Simmons is certainly not a company that is lying down on the job.

Simmons

has manufactured and designed beds since 1870 and its products are available in more than 60 countries world-wide. In the UK the company is the producer of over 12,000 pieces every week, which are then delivered nationally. Simmons UK supplies many of Britain’s leading bed retailers and premier hotels groups. Cauval Industries, the largest furniture manufacturer in France, own the license for Simmons throughout Europe. During its global history, Simmons has remained committed to helping attain a higher quality of sleep through a proactive development of sleep technology. This has given rise to many of today’s advancements in Simmons’ current range of quality beds and mattresses,

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each of which provide exceptional support and comfort for a healthier life. Simmons’ success has given the company status as one of the largest bed brands across America, and a leading name throughout Europe and the UK.

The full spread While Simmons Bedding Company is best known for its high quality mattresses, the company has furthered its portfolio. Its commitment to providing a good night’s sleep

Furniture Simmons UK

Foundations: In addition to the traditional box spring foundation, Simmons offers several ranges of specialty foundations. These include two different styles of adjustable foundations designed to work with Simmons mattresses and allow for supreme sleeping and working comfort, as well as a Low Profile foundation designed for those who want the mattress closer to the floor. Furnishings: Knickerbocker and Simmons have teamed up to produce Simmons Bed Support Systems, a new type of bed frame that is designed to extend the life of any mattress. Featuring steel support, centre beams and rails, the Bed Support Systems are designed to absorb weight and lengthen the life of your mattresses.

A therapeutic focus If you often deal with back pain, the culprit could be your mattress, say experts at Simmons Bedding Company. Most mattresses donâ&#x20AC;&#x2122;t offer the level of support needed to keep your spine properly aligned during sleep. Thatâ&#x20AC;&#x2122;s why Simmons designed their line of BackCare mattresses especially for people who experience sore backs and aching muscles from lying on the wrong mattress all night long. BackCare mattresses are made using Simmons Zone Support system, a combination of Pocketed Coil support and special foam zones that is designed to offer just the right level of support to your entire body. BackCare mattresses take into account the fact that your lumbar

has led them into other product lines including pillows, foundations and furnishings that work with their well-known Beautyrest, Comforpedic, BackCare and Natural Care mattress lines. Pillows: Simmons offers the perfect pairing with their Comforpedic beds - Comforpedic pillows, available in traditional and ergonomic contour styles. The Comforpedic pillows are all made with Simmons NxG Next Generation Memory Foam to make sleeping a pleasure.

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Simmons UK

A Simmon’s history When Zalman Simmons originally founded the Simmons Company in 1870 in the US state of Wisconsin, his intent was to manufacture wooden cheese boxes and insulators. Had he not changed that direction in 1876, the world of bedding would be a very different world today. Over the years, Simmons Bedding Company has been responsible for most of the major innovations in mattress making, and has helped shape the way the world sleeps today. Among the landmarks in the history of Simmons Bedding Company are: 1889 - Simmons introduced spiral coil springs for woven mattresses. The manufacturing process dropped the price of store-bought woven wire mattresses from $12 to 99 cents, making it possible for everyone to afford a comfortable night’s sleep. 1900 - James Marshall of Simmons Bedding Company patented a wrapped coil spring which would become the basis of pocketed coil spring mattresses and other innovations. 1925 - John Franklin Gail, a Simmons engineer, designed a machine that automated the process of making pocketed coils. His innovation became the basis of the Simmons Beautyrest mattresses that are still manufactured today. That same year, Simmons Bedding Company commissioned the first ever scientific sleep study to help them make better mattresses. 1930 - Simmons Bedding Company introduced the Studio Couch, which was a sofa by day and a bed by night. 1958 - Simmons Bedding Company introduced the first queen and king size mattresses, offering more sleep room to millions of people worldwide. 1995 - Simmons Bedding Company introduced the Simmons BackCare Mattresses, designed for proper spine alignment. 2001 - Simmons introduced the Olympic Queen Size mattress, offering more sleeping room on a standard queen size bed frame. 2004 - Simmons introduced the Health Smart line of mattresses, designed for cleaner, healthier sleep environments.

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region needs special support to help keep your spine aligned so that you get a more restful sleep that doesn’t put a strain on your back. They’re made with a combination of three comfort zones and two support zones so that your body is cradled and supported throughout the night, and you wake up refreshed and restored in the morning. Simmons has also been one of the prime movers behind sleep research in the mattress industry. Various research studies commissioned by Simmons have helped them to create mattresses that provide the best night sleep possible. According to some of this research, nearly 70% of adults are at least marginally sleep-deprived - even though they believe that they are getting a full night of sleep each night. Simmons says that choosing a supportive, comfortable mattress can help you get the sleep that you need to function at your best. Two of the most common sleep interrupters are partner movement and discomfort. If you sleep with another person, every time they shift their position, the bed underneath you moves and your body has to adjust for that movement. When you consider that the average person shifts their position 60 to 80 times per night, it’s no wonder you wake up feeling exhausted. Simmons mattresses with their patented Pocketed Coil construction are specially designed to keep your partner’s night time restlessness from disturbing your sleep by isolating the motion, removing one of the major sleep disturbances. The other most common reason for sleep interruption is discomfort. According to Simmons, most of those 60 to 80 position changes per night are triggered by discomfort, either from poor support or from excess pressure against your joints and skin. Simmons Backcare and Ortho Care mattresses are designed to reduce discomfort with a unique Zone Comfort System that provides support where your body needs it, and reduces pressure where your body doesn’t need it. As Simmons says, replacing your mattress with one that’s especially designed to support good sleep is one of the best things that you can do to improve your quality of life.

Aerospace Beagle Aerospace

John Taylor, managing director of Beagle Aerospace. Picture from Bournemouth Echo, reproduced with permission

Composite

capabilities As British aerospace manufacturers strive to stand out from the international crowd, the sector is positively thriving, with innovation in composite components adding huge amounts of value. Beagle Aerospace is a valid example, as George Archer discovers

Based

in Christchurch, Dorset, Beagle Aerospace specialises in the maintenance and manufacturing of components for aircraft. It is easy to prepare yourself for a grimy, oily crowded and dark environment before factory visits, especially when youâ&#x20AC;&#x2122;re on the train riding through leafy forests

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The autoclave at Beagle Aerospace

and rolling hills. However, these days it is often not the case. Andy Elford, head of technology at Beagle, pointed to a section of the factory where technicians sat at worktables, collaborating with their colleagues and working on aircraft components. Passing a freshly cleared section of the factory on the way through to the meeting room, it became clear that Beagle had plans for the future The UKâ&#x20AC;&#x2122;s aerospace sector is the second largest in the world, with 2006 annual revenues exceeding ÂŁ20 billion. Those involved in designing, maintaining and repairing components are consistently ploughing efforts into developing new production and treatment processes. As emerging economies like China and India grow and are able to do similar jobs for less, the need for British innovation and specialisation in specific areas is ever more important. For John Taylor,

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managing director at Beagle Aerospace, the importance of retaining Beagleâ&#x20AC;&#x2122;s existing specialist knowledge and investing in technology and equipment to provide new capabilities is priority number one. As an established manufacturer of out-of-service parts supporting both military and civil aircraft, Beagle Aerospace is consistently making efforts to add to its repertoire of services for the aircraft industry.

Components of the machine Managing director at Beagle, John Taylor, is relatively new at the company. Business consultancy Ramsey Hall placed Mr Taylor in his role at the company leading the sales and marketing team. Ramsey Hall provides a range of business consultancy services where they place people at the heart of the organisation. They focus on helping their clients recruit, develop and harness leadership capability and provide the framework, as well as expertise, to manage talent through all aspects of the employment life cycle from attraction to exit. After the previous managing director left in September last year, he jointly ran the company, and became managing director of Beagle Aerospace in February this year. During this time the board was also strengthened by the addition of two new non-execs, Simon Luxmore and Tony Edwards.

Aerospace Beagle Aerospace

The first thing that Taylor focused on was key market areas for customers. Understanding what customers really need was the question Beagle was asking itself. Adding the facilities to create the potential for a broad set of production and maintenance processes was viewed as a necessity. “There was a consensus within the team that Beagle needed to increase capabilties within the composite area.” He added: “We also wanted to focus on improving the scope of the metal fabrications that we already do.” Taylor and his team have taken the strength of Beagle as a brand and concentrated on its profile, while increasing the presence of the brand on an international stage by attending international air shows. The previous management team weren’t as focused on the brand as much as the current team and this is one of the examples of the changes at Beagle. The attention paid to customers has increased, and responding to their demands is a serious priority for Taylor. In January 2011 The company achieved AC7118 “B” accreditation from NADCAP for their work on composites. This is something widely sought after in the aerospace industry, and it fits perfectly with Beagle’s aim of continuing to specialise in certain areas while differentiating from competitors.

Visible capabilities Raising the profile of the company involves making yourself heard and seen. Beagle has taken a proactive approach, and recent events attended include the Aero Engineering show at the NEC in October, the International armoured vehicle show at Excel in London, the Southern Manufacturing show in February and JEC Composites show in Paris. Taylor defends the cost of running such shows: “Although it’s expensive, we’re making people aware of what our capability is. Although people know the Beagle name, no one actually knows what we’re doing. It generates an awful lot of interest.” “It’s not just about showing people the present capability, but what the future capability is going to be,” he added. Although Beagle deals with a lot of companies based in the UK, their focus on components mean they have customers as diverse as BAE,

Rolls-Royce, Fokker and Bombadier and within the MRO Aerospace sector, KG Aircraft Components, British Airways & Virgin Airways. Some of the parts produced at the plant are distributed all over the world, so it’s a company with a sizeable export market. The continued emphasis is on the repairing and maintenance of structural and engine components for their customers.

Current projects Beagle was a victim of the Strategic Defence and Security Review, and was hit reasonably hard. The company had to back fill existing orders for Harriers and the Nimrod aircraft. Taylor said: “The Harrier was one of our key lines, so confirmation it was being shelved came as quite a shock and had a big impact. On the plus side, though, an outcome of the government review was the need for a range of composite components for a new hi-tech armoured vehicle. Technical capabilities at the plant made Beagle one of only three other companies that could provide the expertise needed.”

We have a very low turnover of staff here which is quite exceptional. A challenge that we face is an ageing workforce. We do have an apprenticeship programme and those on it are very successful John Taylor, Managing Director

“We looked at the requirement as a standalone project, and adopted a different, volume orientated, approach. So, we came up with a solution; we used existing site space for a dedicated production facility to do the work. We won that in the early part of this year, and we’ll be ready for production in the first week of August,” Taylor said. Beagle has invested heavily in equipment to suit this project, as a way to further increase capabilities for the future. Taylor said: “We have invested heavily in production composites processing equipment to suit this project, including investments in automated pre-preg cutting equipment and laser projection systems for enhanced speed of ply positioning. This is in addition to a recent investment in new clean room facilities (Class 8, ISO 100,000) to meet NADCAP requirements and further enhancements to our recently purchased large (8.5m x3m) second autoclave.” A pre-preg cutter replaces the need for a template when cutting composites, and therefore saves time and money. Also, as Mr Elford pointed out: “Even though this equipment is being used for a specific project, it means that we have the added capability for the rest of the market. We have spare capacity in the system that can be sold elsewhere.”

Looking up and ahead In addition to the recent investments within the composites area the company has plans to acquire a small to medium sized machining facility. “The current facility is principally used for fabrication processes with a small number of machine

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Beagle Aerospace components being manufactured. We want to significantly increase machining capability,” said Taylor. Elford added: “The new machine shop will be used for small prismatic machining, cleats, brackets, attachments and a general range of aerospace components” While seeking to increase capability, Beagle has made changes to the way the business is run. John Taylor is a staunch believer in business excellence. Working closely with the European Federation Quality Model (EFQM), a Brussels-based global not-for-profit membership foundation has allowed the company to provide a unique platform for organisations to learn from each other and improve performance. The pay offs from being a member are huge, according to the team at Beagle. “We want to want to work with people who want to do a better job tomorrow than they have done today. We put a lot of time and effort into training and educating people in business excellence tools,” said Taylor. “We have had a really good response from that perspective. There has been an increase in the number of customers who are pleased with the new approach captured within the EFQM,” he added.

Learning to fly Concerns are well established among British manufacturers about ageing skilled technicians and workers, and the government has pushed lightley for a larger number of people to opt out of a degree course and instead pursue a vocational occupation. Beagle is currently training four apprentices, and has plans to take on either six or seven additional apprentices this year, and then the same number every year after that. “We have a very low turnover of staff here which is quite exceptional. A challenge that we face is an ageing workforce. We do have an apprenticeship programme and those on it are very successful,” said Taylor. Apprentices at Beagle are able to train in a wide range of skill sets, from project engineering through to processing and product design. Elford believes the apprenticeships offered at Beagle are hugely beneficial: “I think one of the main drawing factors when it comes to apprenticeships at this company is the fact that there is such a wide range of skills to specialise in.”

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Ethics and responsibilities When I asked John and Andy about the company’s approach to environmental issues, sustainability and emissions, they expressed that it was an absolute key concern for them, largely because of the close relationship with the community. As with any manufacturer, waste material can sometimes be quite bulky and moves have been made over the past 12 months to reduce waste and implement recycling programmes. “A lot of the composites we use are consolidated in vacuum bags, so instead of throwing away the bags we have invested quite heavily in re-usable bags. It’s things like this that have a really big impact in terms of waste,” said Andy Elford. In late December 2010, all the lighting in the plant in Christchurch was replaced with low energy photocell controlled lighting, so if there’s no movement the lights switch off. It’s initiatives like these that first of all reduce energy use, but for Taylor it is primarily because it makes for better corporate social responsibility. Beagle is a company that is determined to widen its capabilities, this much is clear. But while expanding and taking on new and more challenging projects, it stays true to corporate social responsibility, maintains links with the community, and views emissions, waste and environmentalism as priorities.

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EEF PhotograPhy ComPEtition 2011 Heroes of Manufacturing. At EEF the manufacturers’ organisation we want you to capture the essence of what makes manufacturing great – its people, products, processes and places of work. Show us how you would capture the image of manufacturing heroes before October 31, 2011. Entry is free and open to everyone. For information and to upload your photograph visit

www.eef.org.uk/photo or contact Stuart Biddle on 020 7654 1501

Snap up your chance to win £5000 worth of Canon photo equipment.

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