The Manufacturer June Issue by The Manufacturer

www.themanufacturer.com June 2012 Vol 15 Issue 6

www.themanufacturer.com | June 2012 | Vol 15 Issue 6

Workforce and Skills

Lean dream: insight into the requirements of suppliers to Boeing’s Dreamliner UTC Diary: why study at the Black Country UTC?

Export Focus

There for the taking: Latin America

Manufacturing Technologies

Taking up tech: British manufacturing and the automation imperative What a Messe!: the Hannover trade show reviewed

IT in Manufacturing

Silva tongued salesman: an interview with Microsoft’s strategist for UK manufacturing solutions

Inbound supplement s

But will Beecroft’s proposals stimulate growth?

Recruitment and Retention Can manufacturing attract the wokforce it needs to grow?

Universities

Exemplars of collaboration between academia and industry uncovered

Interview Antony Sheriff

MD, McLaren Automotive

Factory of the month SCA Hygiene

ial Spec report, R und outbo A IN YOUle N b CHI availa ! HANDthis issue with

In partnership with:

“We acted quickly to help our customer rebuild after the fire. Because we were not only restoring a building, but a business.” John Parvin, Claims Manager, UK Claims Major Loss Team, Zurich Insurance plc

Expertise and foresight to minimize business interruption. At Zurich, we establish a relationship with our customers before dealing with potential losses. Because understanding risk management strategies and the roles of key individuals ahead of time gets businesses back up and running later. It’s an example of how Zurich delivers the help businesses need when it matters most. Watch the video to learn more. www.zurich.co.uk/expertise

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Editor’s comment

Can slashing employment regulation fuel growth? Employment law was all over the news in May. From Will Stirling’s lead article on the recent Beecroft bust-up over the right to ‘fire at will’ (p18) through commentary from EEF (p12 and p39) and our 2012 Retention and Recruitment supplement (p73), it’s a strong theme in this issue. It is not hard to see why this subject, bound and gagged by red tape for so long, has come to a head. There has been palpably greater frustration with the stubbornly sluggish economy over the last month – and no one seems certain of what to do to improve it. Blasting government policies as ill-conceived is often the first reaction, and the Institution of Mechanical Engineers’ 2012 manufacturing survey showed that just over half of UK manufacturers polled are happy to join in this government bashing (p108). But the International Monetary Fund’s assessment of UK policies for dealing with recession was kinder. IMF’s boss Christine Lagarde had little but good to say about the Chancellor’s measures for boosting the economy last month. Unfortunately, even if the policies are right, they are not working. When the macro picture is immovably dire, the nitty gritty of vexatious regulation that businesses deal with day-inday-out rankles all the more. And there can be no doubt that the niceties of hiring and firing staff is some of the most time-consuming regulation around – especially for ‘high-risk’ environments where specialist health and safety requirements (another layer of regulation) are so important.

www.themanu facturer.com June

www.them anufacturer. com | June

2012 | Vol

2012 Vol 15

15 Issue 6

Issue 6

To help manufacturers through the mire, The Engineering and Machinery Alliance has published its 2012 handbook of practical advice designed to help “manufacturers make it”. This includes tips for minimising employment headaches as well as numerous other industry bugbears. There are contact details for specific funding pots, skills solutions and more. There are real action points that manufacturers can take from this publication which has been made available on themanufacturer.com.

LEAD STORY

22 INTERVIEW

35 44

Export Focus

Workforce and

Skills Lean dream requireme : insight into the nts of supp Boeing’s Dreamliner liers to UTC Diary : why study Country at the Black UTC?

Export Focu s

There for the takin g: Latin Amer Manufac ica Taking up turing Technolo tech: and the autom British manu gies facturing ation imper What a Mess ative show review e!: the Hannover trade ed

IT in Manufac turing

Silva tongu interview ed salesman: an with Micro soft’s strate UK manu facturing gist for solutions INB

OUN D SUP PLE

Recruitme

MEN T S

Can manu nt and Retention facturing attract the wokforce it needs to grow? Unive

rsitie

Exemplars s of collaboratio academia n between and indus try uncov ered

Interview Anthony

MD, McLa Sheriff ren Autom otive

Factory of the

SCA Hygie ne

month

But will Bee stimulate croft’s proposals growth?

Special rt, repo outbound YOUR CHINA IN ble HAND availa ! with this issue In partne rship with:

Cover image: looks beyond sensationalist reactions to the Beecorft report p18.

But we don’t just have to make the best of existing regulatory frameworks. Government is now engaged in consultation over labour law reform and a more general initiative, Focus on Enforcement, is calling for comments on how government can ensure regulation fulfils its purpose without hindering employers. As I write, regulation in the chemicals sector and regulation effecting SMEs in the food and drink industry are focus points – but only six chemicals companies and 21 food and drink SMEs have engaged so far. Make sure your company doesn’t miss the opportunity to make a difference. Jane Gray, Editor

tECHNOLOGIES

The team Nick Hussey, Managing Director Nick has 20 years of experience in the publishing industry spanning titles in the UK, US, Asia and Australia. In addition to his commercial experience Nick has also worked in government, spending a year as Managing Director of Manufacturing Insight, a programme aimed at changing the image of Manufacturing. He holds several non-executive directorships and is a founder member of the IET’s Manufacturing Policy Panel. n.hussey@sayonemedia.com

Editorial

IT Editor Malcolm Wheatley malcolm@malcolmwheatley.co.uk

Associate Editor Roberto Priolo

r.priolo@sayonemedia.com

Editorial Assistants George Archer

g.archer@sayonemedia.com

Tom Moore

t.moore@sayonemedia.com

Design

Art Director Martin Mitchell

Henry Anson, Sales Director

m.mitchell@sayonemedia.com

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

Designers Alex Cole Vicky Carlin

design@sayonemedia.com

Sales and Events Head of Events Jon Tudor

j.tudor@sayonemedia.com

Marketing Executive Grace Gilling g.gilling@sayonemedia.com

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

Project Director Matt Chilton

m.chilton@sayonemedia.com

Sales Manager Benn Walsh

b.walsh@sayonemedia.com

Sarah Hough

s.hough@sayonemedia.com

Client Account Managers Élann Carel e.carel@sayonemedia.com

Peter Kealy

p.kealy@sayonemedia.com

Tina Bennett

Jane Gray, Editor

t.bennett@sayonemedia.com

Jane joined SayOne Media in 2009 for the launch of the Lean Management Journal, sister publication to . Reporting concurrently for , Jane focused on industry skills development features and lean enterprise until she became editor in June 2011. j.gray@sayonemedia.com

Tim Brown, Web Editor Tim joined SayOne Media in 2009 after working as a journalist for six years in Australia on a range of lifestyle and business magazine publications. His primary areas of interest include the automotive industry and business development. t.brown@sayonemedia.com

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

Elizabeth House, Block 2, Part 5th Floor, 39 York Road, London, SE1 7NQ Tel: +44 (0)207 401 6033 Fax: +44 (0)844 854 1010 info@sayonemedia.com www.sayonemedia.com

Joe Green

j.green@sayonemedia.com

In order to receive your monthly copy of kindly email g.gilling@sayonemedia.com, telephone 0207 401 6033 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.

EEF is dedicated to the future of manufacturing. Everything we do is designed to help modern manufacturing businesses evolve, innovate and compete in a fast-changing world. www.eef.org.uk

The Manufacturer is working collaboratively to drive innovation and manufacturing excellence in the UK. Our partnerships with leading industrial research centres, further education providers and trade bodies is an important part of this and is distributed directly to the alumni and membership of the following organisations:

Cranfield University EEF Institute for Manufacturing, University of Cambridge

Contents 04 News and regular columns A whistle stop tour of manufacturing news and events in the last month along with commentary on industrial research, legal issues and economic challenges for manufacturers

15 The Naked Engineer

NE throws his toys out of the pram as child- and family-friendly regulations take their toll on business

18 Lead Fire at will: Will Stirling stirs the political batter-mix that was ‘Beecroftgate’, surfacing the real potential of labour law reforms to stimulate growth

22 Interview Sheriff’s law for MP4: Antony Sheriff, the driving force behind the creation of the most talked about high-performing sportscar to be manufactured on English soil for decades, speaks to Tim Brown about his journey to the helm of McLaren Auotmotive

Pillar features 30 Workforce and skills

Lean dream: Roberto Priolo speaks with British suppliers to Boeing’s Dreamliner about collaborative efficiency as production of the gargantuan new plane ramps up

56 What a Messe! Will Stirling reviews

Hannover Messe 2012, a gigantic playground for manufacturing technology enthusiasts and the stamping ground of the German Mittlestand

46 IT in manufacturing

The main event: Malcolm Wheatley reviews the findings of ERP Connect 2012

48 Silva tongued salesman: Mike

Silva, Microsoft’s new sector director, UK manufacturing, utilities and services, talks to Will Stirling about where IT services and solutions for manufacturers are heading

50 IT news

Supplements 57

’s 2012 Universities Supplement: Find out what the UK’s Further Education network has on offer for the manufacturing industry

73 ’s 2012 Recruitment and Retention Supplement: Surveying the trends, trials and opportunities for businesses looking to sustain and expand skilled manufacturing workforces this year

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

33 UTC diary: Students at the Black Country UTC explain why they want to be a part of the new education model set to transform the skills pipeline for manufacturing

86 SCA Hygiene: Personal care products

34 Employee of the month Tom Silvey Production engineer, Renishaw

102 Vernacare: Medical devices

35 Export Focus

108 Last Word

There for the taking: Latin America; George Archer wraps up prospects for manufacturers in this region of rapid growth but, sometimes, challenging regulatory hurdles

42 Manufacturing technologies

Taking up tech: Tom Moore considers the competitive motivation for encouraging more automation investment in the UK and uncovers developing portfolios of automation technologies for the ‘manufacturing masses’ of SMEs

96 Thorntons: Food and drink

Jane Gray on the national occupation of government bashing and the value of industry surveys

line! Look on MA

EA See The 2012 for ok o b d n a H l tips on practica ake it’ in ‘m to how turing on manufac cturer.com fa themanu

44 Little miracles: Malcolm Wheatley

talks to UK nanotechnology manufacturers about the application of their products and the state of the industry in Britain

Manufacturing ENERGY BILL

Image courtesy of Department for Business, Innovation and Skills

EMPLOYMENT LAW The leaked Beecroft report turned a serious piece of labour market regulation reform into a political bunfight, obscuring the constructive points to cut red tape that employers welcomed. The row ensuing from Beecroftgate – the leaking of a report on employment law reform – culminated in May with the report’s author, Adrian Beecroft, calling the Business Secretary a ‘socialist’ providing ‘very little real use’ to business. The Beecroft report proposed 17 recommendations for reducing bureaucracy in employment law in order to encourage more firms to take on staff. By May 24, the leaked and then prematurely published document had descended into political handbag swinging, as Business Secretary Vince Cable referred to the notorious ‘fire at will’ proposal as “bonkers” and Labour accusing No. 10 of doctoring the report to soften the tougher proposals. The row hinged on one of the 17 proposals, no-fault dismissal, which advocates sacking workers without saying why, while avoiding compensation payments. A divisive subject for the coalition government, the row pitted right wing labour market reformists against LibDem employee rights sympathisers who claimed the British workforce was already super flexible. While the mud-slinging entertained the media, much of the rest of the report’s “excellent ideas”, in the Prime Minister’s words, remained ignored.

They included: Cutting the mandatory consultation period when companies want to make redundancies from 90-days to 30-days Employers with less than 10 employees should also be given the right to opt out of various current and potential regulations (if implemented), including flexible parental leave and the right to request flexible working arrangements. Scrapping provisions in the Equality Act which make employers liable for claims from employees for “third party harassment” and reform of employment tribunals. Employers bodies including EEF and the Food & Drink Federation said the Beecroft had many constructive proposals that employers would welcome. A cap on loss of earnings compensation for employees who are unfairly dismissed was reduced in the Enterprise and Regulatory Reform Bill, published May 23.

The draft Energy Bill, published May 22, has set out plans to meet stringent carbon reduction targets while improving energy security through Electricity Market Reform. It plans to accelerate Britain’s new nuclear industry and provide guarantees to investors in nuclear and renewables to encourage the private sector to fit the bill for nuclear, where the Government has said it will not bankroll the industry with public money. The draft Bill affirms Feed-in Tariff with Contracts for Difference (CfD) – long-term contracts that provide revenue certainty to investors in low carbon generation such as renewables, nuclear and CCSequipped plant. The bill committed to a Carbon Price Floor to increase investor confidence in green energy, putting a fair price on carbon and providing a stronger incentive to invest in low-carbon. The Carbon Price Floor was one reason given for the decommission of some energy intensive plants in 2011. The Bill also makes provisions for a measure to enable the sale of assets held by the Ministry of Defence (MOD), which pump aviation fuel to United Kingdom and United States airbases as well as some civilian airports - the Government Pipeline and Storage System (GPSS). “The timeline DECC has laid out looks very challenging to bring in wholesale change to the electricity market,” said Dr Gordon Edge, director of policy at trade body RenewableUK. “As this is coming at a time when traditional energy sources are coming to the end of their lifespan, DECC needs to ensure that they continue to consult in order that an energy gap does not appear. A gap means fewer options for the UK, which means we risk missing carbon reduction targets, continuing our dependence on imported fossil fuels and energy bills not being insulated from the rising costs of fuel.” Steve Radley of EEF said: “We need to strike a better balance between encouraging investment in low carbon energy and keeping a lid on rising subsidies for renewable energy. However, with government… showing that its policies are already adding 22% to electricity prices for business and forecasting this to rise to 34% by 2020, the focus must be on developing the most cost effective mix of low carbon energy.”

LEGISLATION A survey by accountancy firm Withers & Rogers has revealed that many companies could find new Patent Box legislation too complex and end up expecting more than they will actually get. From April 2013, any profits from inventions that are protected by a UK patent will be taxable at a significantly lower rate of Corporation Tax. However, the much-publicised rate of 10% will not actually apply until 2017.

News GOVERNMENT The Government’s industrial policies are falling short according to manufacturers and have been harshly criticised in a poll commissioned by the Institution of Mechanical Engineers. The survey of 1,000 manufacturers revealed that half of respondents believe the Government is performing badly on manufacturing policy, with just 14% of those polled saying the Government is performing well. This follows figures from the Office of National Statistics which show that the country’s manufacturing sector has actually shrunk by 0.9% since the first quarter of 2011 while the services sector as a whole has grown by 1%.

75% of manufacturers and 72% of the public said the Government should favour UK-based companies when awarding contracts

FUNDING The Government has launched a new £200m programme to support growth at 26,000 SMEs. Launched by Business Secretary Vince Cable, GrowthAccelerator will contribute towards the cost of consultancy to help firms to identify their barriers to growth and find ways to overcome them. The cost to firms involved will vary according to their size, with a team of growth coaches covering every sector. Companies will also be able to work with the Technology Strategy Board, Catapult Centres and relevant networks such as Angel Investors as part of the scheme. The Government has said that the programme will run for three years with help being provided around securing finance, commercialising innovation, management capability and developing leadership. The expected timeframe for each firm on the scheme is expected to be between six and 12 months. The programme has been designed through dialogue with business owners and business representative bodies such as the British Chamber of Commerce and the CBI. Almost 800 businesses have already contacted the consortium running the scheme to enquire about joining the governmentsubsided programme. “GrowthAccelerator is a new programme to help businesses deliver growth by increasing their chance of gaining access to finance,” said Dr Cable. “The £200m programme will deliver high quality coaching to a range of businesses that will help them grow and give the economy a real boost.” To join the project, companies must demonstrate to the Department for Business, Innovation and Skills that they are capable of rapid and sustainable growth.

How much will it cost the companies involved? Micro and start-up businesses (up to 9 employees) – £600 Small businesses (10 to 49 employees) – £1,500 Medium-sized companies (50 to 249 employees) – £3,000

www.growthaccelerator.com

PLAYING MUSIC IN THE WORKPLACE? MAKE SURE YOU’RE LICENSED. If you are playing recorded music in the workplace, including offices and factories, it is a legal requirement to obtain the correct music licences.

Music is good for business – the simple act of turning music on can make a huge difference to productivity and sales. 2 in 3 employees were more motivated in workplaces that played music versus those that don’t.* PPL and PRS for Music offer music licensing solutions for businesses that play recorded music in public – in most instances a licence from both organisations will be required. A PPL licence can cost your business as little as 19p per day,† for more information on how to obtain your PPL licence visit ppluk.com or call 020 7534 1095. For more information on PRS for Music, visit prsformusic.com. To find out more about how music can work for your business visit musicworksforyou.com.

ppluk.com

To qualify firm must: Be registered in England Employ fewer than 250 people Have a turnover less than £40m

*MusicWorks survey of 2000 people, conducted March 2009. † If you play recorded music in your business without obtaining a PPL music licence you could incur a 50% surcharge on your PPL licensing fee.

01430 PPL Ad The Manufacturer [Factories] Quarter page.indd 1

12/03/2012 14:20

Manufacturing news

Photography courtesy of Richard Cocks - Dairy Crest made a net loss of £10.1m last year

FOOD AND DRINK Milk producer Dairy Crest has announced a net loss of £10.1m for the year ending 31 March 2012. The loss comes after profit margins on milk products shrank to 1%. A spokesperson for the company told The Manufacturer that this is a result of aggressive purchasing tactics from supermarkets and increased prices from farmers.

BAE Systems, Rolls-Royce and Babcock are expected to receive most of the submarine contracts

AEROSPACE AND DEFEN CE The coalition government has spent £350m on contracts with UK firms to design the next-generation nuclear submarines. Most of the work on the Successor submarines replacing the current Vanguard Class vessels, which currently carry Trident, will go to BAE Systems, which has been awarded a £328m deal, and industrial partners Babcock and Rolls-Royce. As a result, managing director at BAE Systems John Hudson confirmed that it will create 280 jobs at its Barrow-inFurness site in 2012. BAE Systems has signed a £1.6bn deal to supply 22 Hawk Advanced Jet Trainers to Saudi Arabia. The contract covers the provision of equipment and training devices such as aircraft simulators, training aids and aircraft on which to train aircrew. The company was set to end the manufacture of the Hawk Trainer jets at its Brough factory in 2013, resulting in the loss of 845 jobs, but 218 jobs will now be saved following confirmation of the long-awaited deal. The UK-built Hawk aircraft will be delivered from 2016.

Business Minister Mark Prisk and Eric Le Corre, Michelin UK’s managing director at Michelin’s Stokeon-Trent factory

AUTOMOTIVE Business Minister Mark Prisk visited the new production facility at Michelin’s Stoke-on-Trent factory last month to assist with the inspection process as the first four tyres rolled off the line. The new production line at the Michelin Remix truck tyre retreading operation is the result of a £20m investment to upgrade machinery and equipment. The funding for the modernisation of the factory has been supported by the Government under the Grant for Business Investment. The project has been developed as part of a long-term plan to sustain manufacturing in the North Staffordshire region.

Manufacturing AUTOMOTIVE

AEROSPACE AND DEFEN CE

The P-8A Poseidon, a derivative of the Boeing 737-800 Huge numbers of counterfeit Chinese electronics have entered the global aerospace supply chain with over one million believed to have been in use on US military aircraft. The finding comes following a year long investigation by the US Senate Armed Services Committee which uncovered 1,800 cases of bogus parts, including on

the US Air Force’s largest cargo plane, special operations helicopters and Navy surveillance planes. The Committee tracked well over 100 of the approximately 1,800 cases of suspect counterfeit parts back through the supply chain with more than 70% of the suspect parts being traced to China.

Fears over the closure of Vauxhall’s Ellesmere Port plant in Merseyside have been quashed with owner General Motors confirming it will keep the site open for production of the new Astra model from 2015. According to the BBC the acceptance of new flexible working measures by Vauxhall employees was key in securing GM’s commitment to keep the site open, preserving 2,100 jobs. As plans get underway to build the new Astra, Vauxhall announced that it will double the number of technical apprentices its takes on next year at its Ellesmere Port plant. The site is set to receive over £125m investment which will create over 700 more jobs. Business Secretary Vince Cable said: “This is fantastic news and secures car production at Ellesmere Port until at least 2020. I am delighted for Vauxhall’s exemplary workforce and management who have all worked hard to make the cost savings needed and ensure that the UK remains at the centre of GM’s operations in Europe. “The unions and the Government played a significant role in demonstrating to GM’s board that Vauxhall has a very flexible workforce and making the commercial case for their continued investment in the UK.” GM UK has announced that its Vauxhall Ellesmere Port factory will manufacture the new Astra

News TEXTILES Luxury British clothing firm Burberry is investing £200m to fund its expansion into Central and Latin America with plans to open up to 10 stores in Mexico and Brazil. As well as opening new stores in Latin America, Burberry plans to increase its overall retail space by 14%. Burberry is admired by many successful businesspeople – at SAP’s UK & Ireland Forum in London on Wednesday this week (May 23) Robert Enslin, president of sales at SAP, praised the clothes manufacturer’s ability to innovate consistently, and remarked that “he would not like to be [Burberry’s] competition”.

PLASTICS Honeywell International, the US technology and manufacturing group, says it has discovered a cheaper process to produce plastic from natural gas rather than from the by-products of oil refining. According to an article by Plastics and Rubber Weekly, the technology could lower the cost of raw materials going into a range of plastics products and “give Honeywell a slice of the multi-billion dollar plastics raw material business.” Honeywell said the new technique is capable of producing ethylene from methane rather than pricier sources such as ethane and naptha which is created during oil refining.

A PP R E N T I C E S H I P S

Siemens announced that it will double its intake of UK apprentices to 160 in September

The number of new UK apprentices hired by the gloal engineering group will now be higher than its graduate intake, which has remained steady at around 100 a year. Siemens is now recruiting similar levels of apprentices in the UK as it does in Germany.

A PP R E N T I C E S H I P S UK vs GERMANY

Business Secretary Vince Cable has lambasted the Government’s apprenticeship programme for wasting taxpayers’ money.

Visiting Siemens’ gas turbine plant with Deputy Prime Minister Nick Clegg in Berlin on May 24, the ministers were hoping to learn from a German industrial strategy that produces around 1.5 million apprentices every year. “Youngsters taking the vocational route [in the UK] have been let down by weak courses in the past which wasted their time and taxpayers’ money,” Dr Cable said.

Datesfor yourdiary June

12-13

Subcon, the only exhibition in the UK dedicated to contract and subcontract manufacturing services, is taking place at the NEC in Birmingham, giving delegates the chance to meet over 300 local, national and international suppliers. Advice on offer will be how to remain competitive in a global market by reviewing your sourcing and supply chain strategies. www.eef.org.uk/events/current/ Subcon-2012 for more details.

Cambridge University’s Institute for Manufacturing hosts a workshop on Engineering and complex services. This introductory course to the ‘KT_Box’ service toolkit will take place at the Welcome Conference Centre, London and is free to attend. For information and booking visit www.eventbrite.com or contact Tomas Harrington (tsh32@cam.ac.uk) on 01223 338086

27-28

The Institution of Mechanical Engineers is organising a two day conference at Old Trafford football stadium, Manchester, entitled “Nuclear decommissioning 2012: From safe decommissioning to commissioning and generation.” For more information visit www.decom12.com

July

5-6

is hosting Flex for the Future, a conference investigating flexible workforce options for manufacturers. The event will be held at the Hilton Birmingham Metropole. Email Benn Walsh b.walsh@sayonemedia.com for more information and Sarah Hough at s.hough@sayonemedia.com for sponsorship details.

9-15

The week-long Farnborough Air Show will begin on July 9 with the trade exhibition lasting from Monday to Friday, and the famous air show taking place on the weekend. You can book your tickets online at www.farnborough.com/tickets/public-abouttickets or call 0844 858 6752

10-12

The Lean Management Journal invites you to a unique senior level lean development day at Europe’s most efficient car-plant, Nissan, Sunderland. By attending this event, delegates will not only see what excellence looks like, but also how to achieve it. Delegates can select from one of the three dates, but early registration is strongly recommended as places are strictly limited to 15 delegates per day. Full details and brochure will be available at the beginning of June 2012. For more information please contact Benn Walsh on 0207 401 6033 or email b.walsh@sayonemedia.com

is hosting Business Intelligence Connect at Ansty Hall, Warwickshire. Contact Sarah Hough: s.hough@sayonemedia.com for sponsorship details and Benn Walsh: b.walsh@sayonemedia.com for delegate information.

For all of the latest news in the manufacturing world visit www.themanufacturer.com

UK Appointments

Mike O’Neill The Knight Strip Metals Group

Mike O’Neill was appointed as group managing director of The Knight Strip Metals Group. He takes over the leadership of the precision strip metal suppliers from David Pearson, who retires after 19 years of service. A qualified engineer, O’Neill has

held a number of senior positions in blue chip, FTSE100, NASDAQ and NYSE listed corporations as well as SMEs, and has held various director positions for over 20 years in management, sales, marketing and business development.

John Crabtree OBE Brandauer

Brandauer, the Birmingham-based precision pressings and stampings specialist, appointed one of the West Midlands’ senior business figures, John Crabtree OBE, as its new chairman, as part of expansion plans that will see the company target a £10m sales milestone in 2012. Crabtree

replaces John Berkeley OBE, who retires after 18 years. It will be only the second time in 150 years that a non-family chairman leads the family-owned business. Trained as a corporate lawyer, Crabtree has held a number of senior positions in companies and associations across industry.

Hans-Herbert Schultz British Industrial Truck Association

The British Industrial Truck Association appointed Hans-Herbert Schultz, managing director of Jungheinrich UK, to its management board. Schultz has worked for Jungheinrich for 12 years. BITA secretary-general James Clark said: “Hans-Herbert further strengthens our

active and busy board of industry professionals representing the industrial truck sector nationwide. He has already attended his first meeting of the board, and has immediately begun to contribute his invaluable experience to the association.”

Tina Tillard Semta

Tina Tillard was appointed head of sales at Semta, the sector skills council for Science, Engineering and Manufacturing. Tillard has a 25 year proven track record in new business development, major account management, man-management, training, public relations, all aspects of marketing

and conference speaking. Prior to joining Semta, she ran her own sales, marketing and communication skills consultancy and before that was sales and marketing director for Key Travel, Europe’s premier travel management company dedicated to the not for profit sector.

Howard Wheeldon ADS

Howard Wheeldon joined ADS as managing director of policy, public affairs and media on May 1, replacing Derek Marshall who recently retired from this position. Wheeldon has been a specialist analyst of aerospace and defence

for the past 28 years, and is a well known speaker and commentator on global macroeconomic and geo-political affairs. Prior to joining ADS, Wheeldon was senior strategist of BGC Partners.

Neil Lewin Festo Training & Consulting

Neil Lewin was promoted to the role of business development manager at Festo Training & Consulting. He will work with Festo’s OEM customers to help them develop their people. Lewin has been with Festo since

2000 where he initially worked on business development for Festo’s automation products. Since then, the company has expanded into drives, controls and customised solutions and into training and consulting practices.

Matt Lay SGS Carbide Tool

Matt Lay joined the internal technical sales team at Wokingham-based SGS Carbide Tool, which specialises in cutting tool solutions. Having completed a four-year formal apprenticeship as a precision machinist at AWE Aldermaston, Lay stayed with the company in an engineering role that consisted of machining

and assembly of MoD training aid apparatus before going to Canada to work in various roles for a year. On his return to the UK he joined SGS Carbide Tool. His aim is to further improve the company’s response to customer demands, while project managing all of the various internal data streams and issue controls.

ManufacturingAppointments Jamie Fisher Pland Stainless

Independent stainless steel commercial products manufacturer Pland Stainless appointed Jamie Fisher as its new sales director. Working closely with the owners of the business, managing director Steve Duree and operations director Ian Hodgson,

Fisher will focus on the development of new and existing business. He has managed sales teams across a range of sectors and developed growth and profitability across accounts including key roles with merchant brand leaders Bostik and Twyford Bathrooms.

Richard Lloyd became global manufacturing director at Accolade Wines, the world’s third largest wine company. He previously held the position of general manager of Accolade Park, a purpose built £100m manufacturing and warehouse facility. Lloyd joined Constellation Brands (which became Accolade Wines in 2011) in 2007 from Imperial Tobacco where he had risen to the role of production manager. Richard’s professional passion is sustainable operational excellence.

The board of Renishaw appointed Dr David Grant CBE as a non-executive director. Grant has been vice-chancellor of Cardiff University since 2001. He will be retiring from that post in September 2012. Prior to that he held leadership positions at a number of international engineering companies including Dowty Group and GEC plc where he was group technical director. Among other roles, he is a governing board member of the Technology Strategy Board.

Jaguar Land Rover will fund a new professor at the University of Warwick as a key element in its strategic relationship with Warwick Manufacturing Group. The new chair will lead a new team with the aim to achieve international research leadership in simulation support of the hybrid and battery electric component and systems innovation. The appointment is part of a long term vision to ensure that JLR’s research base can deliver on key strategic areas.

Kommerling UK, a supplier of sealants and adhesives, appointed Julie Noquet as regional sales executive for the southern UK. She will have a specific focus on developing business across the industrial and automotive markets. Prior to joining Kommerling, Julie worked at specialist tape convertor Stokvis Tapes. She brings with her valuable knowledge and understanding of the challenges facing the industrial markets.

Professor Andrew Blake, professor Sir Richard Friend and professor Julia King CBE have been appointed to the Council of the Engineering and Physical Sciences Research Council (EPSRC). The appointments will run until March 31, 2016. Blake is a Microsoft distinguished scientist, managing director of Microsoft Research Cambridge and fellow of the Royal Academy of Engineering, the IEEE and the Royal Society. Friend is the Cavendish professor of physics at the University of Cambridge – he has pioneered the physics, materials science and engineering of semiconductor devices made with carbon-based semiconducting polymers. King spent 16 years as a researcher and university lecturer at Cambridge and Nottingham universities before joining Rolls-Royce in 1994 where she held a number of senior executive appointments (she is also a non-executive director of the Department for Business Innovation & Skills).

Geoff Stockley, Mark Stanley and Chris Sellars joined the board of rotational moulding company Orchid Plastics with the titles of, respectively, sales director, financial director and commercial director. The appointments come in response to increasing demand, and with the aim to grow the business. Sellars and Stanley join Orchid Plastics on a part-time basis from business consultancy service Mackenzie Spencer. Stockley previously worked at two rotational moulding manufacturers.

Michael Gibbons was appointed chair of the Regulatory Policy Committee after an open competition which followed the Commissioner for Public Appointments’ Code of Practice. The RPC has been an ad hoc advisory committee for two years. Recognising its importance to the regulatory agenda, the Government recently reconstituted RPC as an advisory non-departmental public body sponsored by the Department for Business, Innovation and Skills.

Lawrence Waterman was appointed as a member of the board of trustees of the British Safety Council. Lynda Armstrong OBE, chair and chief executive of the Council, said: “Lawrence will bring to this role a wealth of knowledge and experience built up over many years in health and safety management. He has been an inspirational leader not only in the construction sector, but also as an influential player in promoting health and wellbeing across all sectors.”

International Appointments Following 50 years with the company, Hermann Scholl, who has been chairman of the supervisory council of Robert Bosch GmbH since mid-2003, is to retire on June 30. Franz Fehrenbach will succeed him. At Robert Bosch Industrietreuhand KG, of which he has been a shareholder since 2003, Fehrenbach will be a general partner in the future.

Bernd Schnakenberg became managing director of Qioptiq Photonics GmbH & Co, in Germany. Schnakenberg was also appointed executive vice president of Qioptiq Photonics Germany and a member of the executive committee. He has held various management positions, mainly in the field of medical technology, one of Qioptiq’s core commercial businesses.

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

BacktoScuoler

Thebigpicture

Surviving turbulent times

Professor Andy Neely argues that a dynamic performance measurement system can be a powerful tool for coping in today’s fast changing world.

“M

ay you live in interesting times,” says the Chinese proverb. With current political, economic and technological disruption few would argue that we are not all doing so. But what does this mean for businesses and their management systems? Can they cope? I believe they can, but new ways of looking at problems and putting in place systems that can adapt quickly need to be adopted. This includes understanding performance measurement fully. A measurement system can give enormous insight into an organisation, and not just in terms of hitting targets. You can use performance measurement data to generate insights into the changes required for improvement. IfM’s research has been looking at how hi-tech firms are using their measurement systems to cope in very fast moving environments and we have found that these firms are very clear about their performance models and what drives success. We identified five enabling factors that happened in all the organisations we looked at: Strategic intelligence: scanning externally for ideas Continuous conversations: continually exploring and thinking about the relevance of this intelligence across the organisation Accelerated learning: follows from successfully deploying the above and learning faster what is working and what is not working for your business Organisational alignment: to provide a framework for continuous conversations and accelerated learning to take place coherently across the organisation Engaged leadership: to legitimise performance measurement and allow people to use performance data to drive improvement An additional enabler is ‘reflection’. Managers need to reflect on which projects they are going to execute to drive improvements, and whether those projects are delivering. They also need to be able to challenge others – even if things are going well. In times of rapid change, performance measurement systems must be as dynamic as possible. They should help you to evaluate whether the things you are doing are really adding value to your organisation. Professor Neely holds joint appointments at Cambridge University and Cranfield School of Management. He has recently published ‘Managing Performance in Turbulent Times’, co- authored with Ed Barrows.

Terry Scuoler, CEO of EEF urges government not to miss the detail as it fights for macro economic recovery.

hile struggling demand from the eurozone is causing business headaches for some, I am also picking up increasing concerns about the capacity of UK companies to keep up with growing global demand. This is not surprising given the damage that a severe recession inflicted on many manufacturers and addressing this is not easy. How to invest in new capacity and attract skilled workers receive a lot of focus in this battle, but there is another important area that gets less attention - ensuring that our workforce is fit and healthy and that people’s skills are utilised. Having employees off work, especially for long periods, not only means lost productivity for a company, it is also a large cost to the economy. For this reason, the issue of sickness absence is one that government, employers and other stakeholders have put considerable effort into tackling over the last decade. Companies have become far better at putting together strategies to manage absence and significant gains have been made with particular regard to short term absence. EEF’s latest research shows a continued year on year decline in short term absence over the last five years. In addition, the number of employees having no sickness absence increased to just over half in 2011, up from 46% in 2010. However, the overall sickness absence rate has now flattened off, remaining unchanged from 2010 (2.2%), while the average working days lost to absence has shown a marginal increase from five days per employee to 5.1 days. Of greater concern is the divergence between short and long term absence where almost 40% of companies saw an increase in 2011 – mainly due to rising incidences of stress, anxiety and depression. To address this, government needs do more to leverage a relatively new initiative – the fit note. This replaced the old sick note and looks at what people can do at work, rather than what they can’t. We need to see more GPs trained in how to issue fit notes appropriately. So far only 3,500 out of a UK total of 40,000 doctors have received this training. At the same time companies should get involved and make the fit note work for them. Gains made to date with regards to sickness absence have been considerable but a fresh approach is now needed. While the turmoil in financial markets inevitably attracts the headlines, the government must not lose sight of the smaller but important practical steps it can take to support our economy. See more on EEF’s Sickness Absence Report 2012 on p39

Back to Scuoler is abridged. For the full version go to

Monthly columns

Thenaked engineer: stripping industry issues bare

Family Fortunes This month NE throws his toys out of the pram as parental leave commitments mount

fter knocking back an industrial quantity of painkillers to soothe the after-effects of a night out at Cavendish’s, the local watering hole, I successfully reduced my hangover level to merely monumental. Thus fortified and after battling with a singularly unruly shirt for symmetric buttoning, I made it into Hemlock Engineering head-office just in time for our 10.00am personnel review. During the course of this pow-wow Dave the Donkey, operations & cock-ups director, proposed a new strategy to reduce sickness absence – fire anyone who takes two days sick a year (hangovers excluded). In my slightly hazy state I agreed that this was a perfectly reasonable approach – they’re here to work for crying out loud. I wasn’t sure we’d get it past the board, but it was worth a try. Disappointingly, Janice from HR not only disagreed but had another bombshell to drop. Drawing the group’s attention to ‘Agenda point 4’ she revealed that apparently it is imperative we improve our child- and family-friendly policy due to forthcoming shared parental leave laws. “What on earth are you talking about?” asked Dave – an unsurprising lack of understanding given that the only family policy Dave generally recognises is not talking to his wife unless absolutely essential. “Parents will be able to swap up to six months parental leave between them,” Janice informed us with what seemed to me to be an unnecessarily smug level of superiority and patience for her pitifully uninformed colleagues (I nodded sagely, fearful of revealing myself to be very much at one with my force of flunkies on this matter.) “And Dave”, Janice droned one, “we’ve already had an application from Grant Hathaway in your Structural Engineering group to swap six months of his barrister wife’s maternity leave, and

your lead structures engineer Yolande Singh is also going off on maternity in two months.” Dave is dumbfounded. “Both my senior engineers working on the Olympic BMX track in Stratford are going to bugger off for at least six months to sprog!” he spluttered. “Bloody hell! What are we supposed to do now? We’re just months from the opening ceremony and we still have critical FEA runs to do!” “We could always swap maternity leave for a P45,” I suggested, not entirely helpfully and not entirely to the amusement of Janice. “Or introduce a policy that all employees of child bearing age should be homosexual,” I added brightly, only to be withered with a single look from our PCconscious HR guru. She had a better idea. “Let’s get some contractors in.”

Both my senior engineers working on the Olympic BMX track in Stratford are going to bugger off for at least six months to sprog!

“But we’re running ANSYS 14 for God’s sake,” yelled Dave. “They’ll cost a bloody fortune!” Leaving Jimmy the Greek, our chief bean counter, to get some more precise numbers on the contractors scenario, Dave and I slunk off to Cavendish’s for some hair of the dog treatment and a spot of lunch. The experience was somewhat marred halfway through the second Montrachet however, by a text update from Jimmy. “Agency providing two ANSYS contractors. Six month contract, £256,000 including fees,” it reported. “Jesus Christ Almighty,” I blurted, knocking back the remaining plonk for fortification. “To keep the Olympic track on track is going to cost us an extra quarter of a mill!” “Doesn’t look like boy wonder Cameron applied the law of unintended consequences to that one does it Dave?” I asked, somewhat rhetorically – though I suppose it will be comforting for the wife and kids to know that, in Cameron’s words, family is now “front and centre of our national life,” when the old Hemlock gig goes under due to being bled dry paying engineering job-nannies and I am with them 24/7. What a delightful prospect!

Have your say at www.themanufacturer.com

Production lines 2 new messages

Letters to the editor

X Kate Keough of financial consulting firm Leyton responds to the ‘Naked Engineer’, May:

ay’s Naked Engineer expressed a common frustration with regards to legitimising R&D tax relief claims. The “pompous, puffedup doughnuts” mentioned must seem obstructive, but although the system shouldn’t come across in this way, if you look at the process from both sides you can see why it happens. In my experience there are a number of pitfalls that companies fall into when submitting a R&D claim which attract unwanted intervention from HMRC and lead to frustrations: The correct identification of qualifying projects and definition of the boundaries of R&D activities The appropriate allocation of eligible costs. Only specific categories of costs can be claimed, most of which are clear cut

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Tax inevitably incorporates grey areas, some controversial in terms of eligible activity and associated cost. Attempts to make a claim in these areas, while arguably valid, are likely to have you reaching for an aspirin. Examples of such claims are First of Class manufacturing or the making of a one-of-its-type machine sold without building any scrapped prototypes.

HMRC could argue that because the product was ultimately intended to be sold, not all of the costs incurred are eligible.

How to avoid pitfalls

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Establish the scope of the R&D undertaken. This requires a clear understanding of the definition and its application in a particular industry Appropriately identify the relevant costs, identifying what is claimable by law Contractual relationships can be a tricky area when companies need to ascertain which applicable scheme a project should claim under. Qualifying conditions for SME and large company scheme claims are not just applied to the company as a whole, project level investigation is sometimes needed. It’s critical to present a clear explanation of the R&D claim to HMRC both orally and in writing. It is best practice to seek specialist advice. We need to recognise that tax inspectors are in a difficult position. They are encouraged to give tax benefits away on R&D claims but they are also gate keepers. It is up to companies to demonstrate why they should be entitled to a claim.

Richard Bridgman of precision engineering firm Warren Services and chair of Semta East of England responds to ‘Semta Sendoff’, May:

hilip Whiteman was right when he said that Semta hasn’t yet “cracked” SMEs. Despite his claim that “employer engagement” was his greatest success as CEO of the manufacturing sector skills council, Semta’s own figures reveal that 87% of manufacturing and engineering firms in the UK still do not provide apprenticeships. Neither Semta, nor the large manufacturers which are always rolled out at its events, understand the

difference between delivering apprenticeships in multi-site, multi-national and multi-billion pound organisations, and delivering them in an SME. Semta urgently needs to employ a dedicated SME apprenticeship champion and ensure that it does not succumb to the attitude expressed by David Way of the National Apprenticeship Service during its 2012 Apprenticeship Week when he instructed NAS consultants not to approach any firm with fewer than 250 employees!

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

Monthly columns

Lean on me

sk anyone in the lean community, from line managers to CEOs, from ‘tool heads’ to lean champions, what the most important element in any business transformation process is and chances are the answer you will get from most of them is “people”. Still, an enormous number of continuous improvement programmes fail. Sometimes it’s the difficulty to get people involved when the implementation is in its infancy. Other times it’s the issues related with sustaining your lean efforts by keeping workforce engaged.

In this new regular column, Roberto Priolo, editor of ’s sister publication Lean Management Journal, shares a sneak peek into the next issue of LMJ and looks back at the best content in the previous edition.

Looking back If I had to pick four of the best articles in the June issue of LMJ, which was themed on lean services, these would be my highlights: Innovation: take the time, make the effort Craig Squire’s article on value engineering is an interesting introduction to a methodology that encourages a company to focus on the core function of the product or service it provides, while providing a platform to optimise the use of resources. America the Lean LMJ’s special on lean in the United States provides inspiring case studies on business turnaround and companies achieving what many would have thought impossible. Services: lessons from Toyota This article concentrates on how Toyota applied its experience in manufacturing and the principles developed in its factories to its Japanese dealership service. Bringing order to chaos Drew Locher discusses the importance of standards in an office environment. Find out more at www.leanmj.com

Why don’t we talk to our people more, to try and understand what lean and continuous improvement really mean to them? Roberto Priolo, editor, Lean Management Journal

Either way, people can be the main driver of change or its worst enemy. Then why don’t we talk to our people more, to try and understand what lean and continuous improvement really means to them? The July/August issue of Lean Management Journal will focus on people, trying to offer a view from the shop floor to help companies understand how their employees interpret and feel about the everyday issues they encounter and the policies deployed to solve them. You will be able to read contributions from line operators working on the shop floor. The issue will also explore something that some see as the future of business, self management (some refer to it as “lean on steroids”). In our regular international feature we will look at how Danish technical wholesaler Solar is rolling out its lean programme in its facilities around Europe, with a particular focus on how differences in culture impact on the implementation process. The journal will visit companies in Hungary, finding that in this country, less mature than others from a continuous improvement standpoint, the most important advocates of lean are subsidiaries of large international corporations with local operations in Eastern Europe (from GKN Driveline to IBM, Timken and car rental companies Avis/Budget). In a further attempt to help readers to learn from direct experience, LMJ will run another episode of its Lean Diary series, which follows the progress of a Serbian manufacturer, SCGM, in deploying its continuous improvement programme. Every month, the company shares with LMJ the most recent development in its transformation, providing examples of problem solving exercises, kaizen events and identifying the main results of its efforts to improve. @LMJEditor

Have your say at www.themanufacturer.com

Thelegallowdown Planning for the worst

the importance of succession planning

he majority of owner manager manufacturers we speak to have got the commercial strings of their business comprehensively tied up. However, as secure as their grip on the rudder of their business is, if personal matters intervene no amount of commercial planning can prevent significant disruption to the business and its organisation. Death is a subject which most of us would rather not contemplate. However, for the owners of manufacturing businesses, it will not only have a major impact on their families and loved ones, but can also pose a real threat to the future of the business. With considered and prudent planning, owners can protect the continuity of the business and its management in addition to providing their loved ones with financial security should the unexpected happen. In developing a succession plan for the business it will also be important to consider the potential tax implications arising on an owner’s death and devise strategies that allow business assets to be passed on tax efficiently with minimum deterioration to the business and the owner’s estate. Inheritance Tax Business Property Relief (BPR) at the rate of 100% is given to owners of most businesses for the value of their direct interest in the business

whether that is as a sole trader, as a member of a partnership or is shares in an unquoted company. As BPR can operate as a complete exemption from Inheritance Tax it is extremely valuable. However, in the absence of careful planning, BPR may be lost with the result that the owner’s estate is subject to an unnecessary charge to Inheritance Tax.

Cross option arrangements should be supported by life insurance that is written in trust so that the proceeds of the life policy on the death of an owner will be payable directly to the surviving owners in order to provide them with the necessary funds to acquire the deceased’s business interests. In this way, the business will be left with those who are committed to its future success whilst loved ones receive cash for the value of the deceased’s business interests to help them to move on and rebuild their lives.

Cross option agreements The constitution of many partnerships and private companies will often contain restrictions on the transfer of business interests, usually preventing an owner transferring their interest unless they have first offered this to their fellow owners. The mechanism is commonly referred to as “preemption rights”. Pre-emption rights can apply on an owner’s death, forcing the personal representatives of their estate to sell their business interests to the remaining owners. Regrettably, however, such an arrangement will prevent the operation of BPR. This is because HM Revenue and Customs regard such an arrangement as a binding contract for sale on death and where such a binding contract exists, BPR will be denied. An alternative solution is for the partnership or shareholders’ agreement to incorporate “cross option” provisions that provide the remaining owners with an option (but not an obligation) to acquire a deceased owner’s business interests and the personal representatives of their estate with a corresponding option to sell. Either party can, therefore, ensure that the shares are transferred without the risk of losing BPR (as there is no binding contract for sale).

Write a Will Preemption rights can apply on an owner’s death, forcing the personal representatives of their estate to sell their business interests to the remaining owners

In short, if you haven’t written a will, do so! The Will is a key tool in Inheritance Tax Planning. Where it is apparent that business interests attract BPR, the relevant business assets should, wherever possible, be left directly to the children or a discretionary trust (of which an owner’s spouse could be one of the beneficiaries) in order to maximise the estate’s BPR entitlement. This planning works particularly well in conjunction with a cross option arrangement whereby business interests will be sold to the remaining owners, with the cash proceeds being passed on tax efficiently either to the next generation or into a trust to which a surviving spouse will have continued access without exposing their own estate to a 40% Inheritance Tax liability.

For more details contact: Caroline Shelton, Senior Associate, Thomas Eggar LLP caroline.shelton@thomaseggar.com or 01293 742977

Fire at will misses the point In the circus that ensued from its premature publication, the true purpose of the Beecroft report on employment law will have been lost to many employers. Parking the political mud-slinging, Will Stirling asks whether the landmark report is likely to fulfill its aim: promoting growth.

t took just a few hours for a serious piece of legislation designed to benefit business to descend into political farce. Soon after The Sunday Telegraph broke details of the Beecroft report on employment law on May 20, the most contentious of its 17 proposals

– no-fault dismissal, giving employers the right to sack people on the spot – snowballed into a coalition-dividing hot potato, pitting right wing advocates of Adrian Beecroft’s reforms against left wing sympathisers of employee rights. Stuck in the middle, Business Secretary Vince Cable tried to

balance support for “the many sensible proposals” in the report while condemning the sacking plans as “complete nonsense”. While visiting the newly reopened SSI UK steelworks in Redcar, Dr Cable claimed the British workforce was already highly flexible – personified by the workers around him, whose moderation had assisted the return of steelmaking to Teesside. He said such reform would only scare workers. But as the story unraveled and the political point scoring rose, businesspeople rather forgot what the original report was meant for. Was it a bill or a consultation? Who was Beechcroft (sorry, Beecroft) anyway?

The Beecroft backstory Originally dated for October 2011 and now in its umpteenth iteration, venture capitalist Adrian Beecroft’s report into employment law is a comprehensive set of proposals on UK labour law reforms,

Leadstory Fire at will misses the point

intended to promote business growth. Its intent is to reduce red tape related fears for managers and owners looking to recruit. Shadow Business Secretary Chuka Umanna asked the coalition government for a preview of the report in advance of publication, a privilege under the Freedom of Information Act. The coalition refused, Labour objected and in the ensuing furore the document – whether or not the final version – was leaked to The Sunday Telegraph newspaper and then published in haste when the cat was out of the bag. No. 10 Downing Street was accused of ‘doctoring’ the report to dilute the heaviest criticism of the Conservative party’s support for ‘family friendly’ policies like parental leave. Conservative was pitted against Liberal Democrat and then Labour, in a circus that hung on a single element of the report – the so-called ‘fire at will’, or no-fault dismissal, proposal.

Business calls for employment law reform The story dominated the news for three days until the International Monetary Fund called for the UK to implement more quantitative easing and cut interest rates because growth was worryingly flat. A small irony when the raison d’etre of the Beecroft report purports to assist growth. But ex-employment lawyer Mr Umanna and other critics challenged this rationale. The UK already had the most flexible Labour market in Europe, he said, asserting that hanging hiring and firing rules was a “complete and utter distraction” from getting the UK out of recession. But is he right? Does relaxing employment law have any bearing on growth, or is it precisely what businessmen need to encourage recruitment, expand and reduce unemployment? Iain Maxted, managing director of Guardian Global Technologies, a manufacturer of oil and gas components,

Status of some of the Beecroft report proposals

You should be actively encouraging employers to take the risks of employing more staff, by reducing those risks to a more manageable level Business owner Iain Maxted to the Business Secretary

Proposal

Status

‘Fire at will’ legislation: enabling companies to make workers redundant for little or no reason

Does not exist currently in any form. Call for evidence closes June 8th

Cutting the mandatory consultation period when companies want to make redundancies from 90 days to 30 days

Primary legislation. Call for evidence closed in January, consultation later this year

A cap on loss of earnings compensation for employees who are unfairly dismissed

Ratified by the New Enterprise and Regulatory Reform Bill on May 22. Reduced compensation to those claiming unfair dismissal

Reform of the rights that workers are allowed to carry over to new employers when they are the subject of a takeover

The Transfer of Undertakings Regulations. Call for evidence closed in January, consultation expected later this year

Scrapping provisions in the Equality Act which make employers liable for claims from employees for "third party harassment"

Consultation was issued by Government’s Equalities Office (GEO) in mid-May. Closing date August 7

Giving responsibility for checking on foreign workers' eligibility to work in the UK to the Border Agency or Home Office, rather than employers

This is not happening. It is now the oligation of the employer to establish the foreign worker’s legality. Govt passed a commercial service to make checking this simpler for employers

supports employment law reform. “For many businesses some of the recommendations in the Beecroft report cannot come soon enough.” The owner-manager of an SME employing 80 skilled people, Maxted is precisely the sort of businessman the Beecroft report targets. “We desperately need a more flexible labour market in the UK,” he says. “Successive governments have brought in increasingly absurd and illconsidered legislation – the latest being shared parental leave – which make us less competitive in the world. I do not take a risk on employing additional staff precisely because it is so difficult to dismiss them if it does not work out.”

Policy Committee David Blanchflower, is that if people think they may lose their jobs, they will not consume. So no demand, and no growth. Iain Maxted dismisses this. In a stinging letter to Dr Cable following Beecroft’s publication, he chastised the LibDem’s toning down of the problems of unfair dismissal and tribunal compensation faced by SMEs. His company had to make an alcohol-related dismissal in which he had no choice as an employer under criminal liability laws. Despite verbal notification, he omitted to put in writing that the employee had a right to appeal, and was told that automatic finding of unfair dismissal and damages would most likely be awarded to his company. “Employment rights, the ease with which employers are taken to Employment Tribunals and the bias of legislation in favour of employees and against employers is a constant concern to every employer I know, and I meet many at various business events,” Bridgend-based Maxted told Dr Cable.

Scaring workers, or employers? Critics say that no-fault dismissal is wrong. It scares workers off taking jobs as they have no employment protection. The extended point, espoused by Labour market economist and ex-member of the Monetary

Lead story: Fire at will misses the point

Comment Andrea Rodney, Hone-All Precision, deep hole boring and drilling specialists “I very much doubt whether the claim that these recommendations will help boost growth is accurate. To boost growth in the UK, what we need is an effective tax system that encourages investment in capital equipment and the Government agencies to start providing the assistance they advertise by assisting and encouraging smaller companies to export”

Roger Marsh, managing director, Rediweld Plastics and Rubber “I believe that the more flexibility employers have, the more likely they are to take on new staff. More often than not this will help the company grow, ensuring longer term security and providing that essential work experience that young people are finding so difficult to get”

Simon Fenton, employment lawyer and partner, Thomas Eggar LLP “We have no fault dismissals during the first two-years of someone’s employment now. If you wish to dismiss an employee after that, there is nothing currently really stopping an employer doing so, but it will usually involve some form of pay-off – as is suggested by Beecroft”

Iain Maxted, managing director, Guardian Global Technologies “[To the Business Secretary] “You should be actively encouraging employers to take the risks of employing more staff, by reducing those risks to a more manageable level, rather than giving us incentives to absolutely minimise recruitment because of the risks relating to employment protection which each additional employee brings”

Behind the Beecroft bombast In the ‘Beecroftgate’ furore, it’s easy to overlook the many constructive proposals in the report that business, trade associations and, quelle surprise, MPs from both sides of the Coalition agree on. Putting off compulsory pension fund contributions for example, and the reform of Employment Tribunals. Many of which were already in the works before the report scandal broke. Indeed scratch the surface and much of Beecroft already exists in some variant. Simon Fenton, an employment lawyer and partner at Thomas Eggar, points out there is already a cap on compensation payments for unfair dismissal, currently standing at £72,300, which is calculated by reference to the employee’s losses. “We have no-fault dismissals during the first two-years of employment now,” he adds, “If you wish to dismiss an employee after that, there is nothing really stopping an employer doing so, but it will usually involve some form of pay-off – as is suggested by Beecroft anyway. What Mr Fenton does see as a problem in Beecroft are his proposals for small company exemptions. “The proposal that employers with fewer than 10 employees should be exempt

from unfair dismissal rules might make them less attractive to prospective employees. And will it reduce the likelihood of companies with 10 employees hiring the eleventh?” Employers’ organisations including EEF, the CBI, the FSB and the Food and Drink Federation praised many of the report’s proposals. EEF’s head Terry Scuoler singled out the reform of Employment Tribunals and collective redundancy rules, and the need to minimise red tape around any extension of flexible working – though again these were all reforms being pursued by the Department for Business Innovation and Skills prior the Beecroftgate.

What difference does regulation make to growth? Why did No. 10 commission Beecroft? To assist business growth. But critics say that there isn’t a single shred of international evidence that says regulation is the UK economy’s problem. Ex-MPC member David Blanchflower told the BBC that he sees no correlation whatsoever between regulation and employment. “In the UK we’ve seen incredibly flexible wages and hours. There is no evidence that regulation is a

Image courtesy of Department for Business, Innovation and Skills

problem. The BIS 2011 survey itself said that just seven per cent of firms said regulation was a problem.” In its last employment protection study in 2008, the Organisation for Economic Cooperation and Development showed the UK had the third lightestregulation among 10 developed countries, in front of Canada and the US. Turkey, the most regulated, had growth of nearly 8% in 2011. Andrea Rodney, managing director of HoneAll Precision, supports less red tape but doubts whether the Beecroft proposals will have any effect on growth. “What we need is an effective tax system that encourages investment in capital equipment and government agencies to start providing the assistance they advertise by assisting smaller companies to export,” she says.

Conclusion So is Beecroft a panacea for growth or a smokescreen? Some employers like Mr Maxted and many trade bodies feel strongly that less regulation is key to giving firms the confidence to recruit. Centre left politicians tend to see the British workforce as very flexible with no need for further deregulation, highlighting recent industry boosts – such as Vauxhall and SSI on Teesside – where workforce flexibility was crucial to the deal.

I do not take a risk on employing additional staff precisely because it is so difficult to dismiss them if it does not work out Iain Maxted, Guardian Global Technologies

Which areas will we see this legislation passed? It is generally felt that it will be the softer issues that go forward. Issues where LibDems and Tories see less compromise. It is thought LibDems are more likely to move towards the Tories’ view on those proposals that effect small businesses. Beecroft’s harder proposals are destined to divide businessmen, economists and politicians alike. The bigger question in a depressed economy remains: is full implementation of Beecroft necessary or even relevant to effect growth? @WRStirling Are you interested in learning about how other companies have flexed their workforce? Come to The Manufacturer’s ‘Flex for the Future’ conference on July 5-6 at the Birmingham Metropole. www.themanufacturer.com/eventsite/flex-for-thefuture-conference-2012

Inside the McLaren Production Centre

Sheriff’s law for

MP4 Antony Sheriff, managing director of McLaren Automotive, is one of the key people responsible for for creating arguably the fastest and most comfortable supercar on the planet, the McLaren MP4-12C. Tim Brown meets the American brains behind the car and tours the stunning McLaren Production Centre.

McLaren Automotive managing director Antony Sheriff completed a dual degree in engineering and economics

Coming from a stable, high level position in Fiat, there was a certain amount of risk involved in coming into a managing director role for something that didn’t really exist

bout nine years ago Antony Sheriff left Italian city-car manufacturer Fiat to head up McLaren’s fledgling automotive department. The aim was to create a road car division capable of semi-mass producing vehicles equal in performance to those driven on the race track by Formula 1 drivers Lewis Hamilton and Jenson Button. In the years that followed Mr Sheriff helped to transfer the technical capability held by one of the most successful names in motorsport from the racetrack to the road. The result was one of the most talked about supercars of recent years, the MP4-12C. “I love cars and have always loved cars. That’s why I’m in this industry,” says Mr Sheriff with complete conviction. A New Yorker, he says that although most of the cars he was familiar with during his childhood were bright yellow and came equipped with a driver and a

Interview Antony Sheriff

How it’s manufactured the McLaren MP4-12C

he McLaren Production Centre (MPC) is designed to be environmentally efficient. The roof collects rainwater and is designed to integrate photovoltaic panels in the future, and the building uses a low-energy displacement ventilation system. No soil was removed from the site, where all the excavated material has been used to help conceal the building within the landscape. Set low to minimise its impact, you could miss it all together. Taking 15 months to construct and at cost of £50m, is now in full operation having been officially opened by PM David Cameron in November last year. Components are delivered to the MPC where the cars are assembled, painted and then tested, passing through a rolling road and monsoon testing booth before leaving the building. Beneath this floor there is a full basement level for storage and plant and above is a mezzanine floor overlooking the production line. The whole 34,500m2 facility is white, designed to highlight anything that is out of place. It is a serene, clinical environment and before anyone has a chance to mention it, what is so apparent is

the absence of sound. An automotive manufacturing facility that is quiet is singularly impressive. This trick was achieved partly due to the decision to not automate much of the line and to use electric tools rather than compressed air powered tools. “We don’t need the automation because we have some very sophisticated production controls that allow the line to move at a constant pace, even though we don’t have a physical assembly line moving it,” says Sheriff. “Also, because of the volume that we have, it allows us to remove significant investment and put those funds into things that make a difference to the performance of our product.” Other than allowing McLaren to channel more resources into the car’s technology, benefits of this decision include a very clean and serene environment for its workforce, removing distractions and clutter to help hone the technicians’ focus on build quality. Finally, it has provided McLaren with a great showcase for buyers and visitors to see how it builds its cars. The body assembly line is very short; you can probably walk its length in 15 seconds. Sheriff says that this is testament to the innovation in the architecture of the vehicle and the way that the car ‘comes together’ which, he says, is unique in the industry. He believes that the McLaren Production Centre is the first ever car production facility that has been built around the architecture of the car. “The MP4-12C has very unique architecture, as will our future variants,” he says. “When we built the Production Centre it took into account the level of complexity and differentiation there would be from one model and one variant to the next. One of the advantages of having a flexible system is that as we introduce new variants and new models we can add or delete work stations without a fundamental tear-up of the entire production system.” Rolling off at a rate of about eight cars a day presently, McLaren says it is on track to produce in excess of 1,000 cars in its first full year. If you want to buy an MP4-12C, you’d be twiddling your thumbs for up to a year before delivery, such has been the demand.

The McLaren MP412C at the Dunsfold test track as used by the BBC’s Top Gear

meter, he was most certainly a petrolhead. He set about engineering his career with precision, the end game being a senior role at a high performance automotive company. He completed a dual degree in engineering and economics at Swarthmore College, Pennsylvania, before going to work at US car giant Chrysler. From there Sheriff went on to study at the Massachusetts Institute of Technology (MIT), mainly in order to access a research programme into the automotive industry which was being run there. After completing a Masters in Management, he spent six years as a consultant to car companies at McKinsey before wanting to get more hands-on.

Biography Antony Sheriff 1985:

Graduated Swarthmore College, Pennsylvania, US with Bachelor of Science in Engineering and BA in Economics

1985:

Product planner at Chrysler

1988:

Graduates from MIT, Massachusetts, with MS in Management

1989:

Strategic Management Consultant at McKinsey and Company

1995 – 2002: Joined Fiat Auto in Italy where he worked as Executive Director of Product Development for all Fiat, Alfa Romeo and Lancia cars and commercial vehicles 2002: Vice President of Marketing for Fiat 2003:

Joined McLaren Automotive as Managing Director

Antony was born in New York but now lives in London with his wife and three children.

“I got fed up of telling people how to make things and decided to put my money where my mouth was and got involved in making cars,” he says. To me, this was about the most exciting thing that one could do. I ended up at Fiat in Turin, Italy, where, for most of the time, I was director of product development.” “I spoke Italian before I took the job, and had actually done an apprenticeship as a designer with Italian car design and engineering firm Pininfarina a long time before. I’m a New Yorker and grew up in New York City but was fortunate that I was actually born in Switzerland and my family is half Italian.”

A change of pace

The closest thing in the auto industry to designing a great sports car is designing a great very small car because it is all about packaging

With a zeal for four wheels, Italian ancestry and an education geared towards the auto industry a move into the supercar world was probably assured. But 10-years ago, when the call came from McLaren to join them, the offer was welcome if a little disconcerting. “Coming from a relatively stable, high level position in Fiat, at a high level, there was a certain amount of risk involved in coming into a managing director role for something that didn’t really exist.” At the time, McLaren had built the F1 road car and was well on its way to completing the first phase of the SLR programme, a car jointly developed with Mercedes-Benz, which was to be followed by six years of production in Portsmouth and at the McLaren Technology Centre in Woking. McLaren did not have a firm plan to become a full-time road car manufacturer but was scouting for someone to build a team to assess the viability of such a plan, and Sheriff was chosen to guide the company down this new path following the end of the SLR production. To some it may seem an odd transition from Fiat to McLaren – from a low cost, high efficiency manufacturer of compact vehicles to a maker of low volume, opulent performance cars, famed at the time for its $1m McLaren F1 powerhouse. But this was far from the incongruous transition it might have seemed, says Sheriff. “Fiat is excellent at designing very clever small cars that rely on innovative architecture,” he says. “The closest thing in the auto industry to designing a great sports car is designing a great very small car because it is all about packaging, minimising components, reducing frontal area, thinking of innovative ways to use space. All the same things you do to make a light weight compact sports car are done to make a light weight compact, inexpensive city car. The mentality is much more similar than if I had spent my life making SUVs.” The McLaren Technology Centre, which houses the Formula 1 team and features a man-made lake providing water to cool the on-site wind tunnel, is one of the most iconic buildings in the UK. Designed by Sir Norman Foster, it represents much of what modern manufacturing aspires to be – clean, lean, high tech and ambitious.

Interview Antony Sheriff

The whole 34,500m2 McLaren Production Centre is white, designed to highlight anything that is out of place

It was certainly going to be a tough act to follow when McLaren Automotive needed a new building to manufacture its next generation of products. Local government restrictions meant that the new building – the McLaren Production Centre (MPC) – is, from the outside at least, nowhere near as iconic as its predecessor.

And then there’s the car The MP4-12C is the company’s first wholly designed and built production car since the McLaren F1, the first series produced car by McLaren. It is 1,400kg of pure unadulterated power. Underneath its sleek curves sits some of the world’s most sophisticated automotive engineering, much of which has its roots in McLaren Formula 1. Like a Formula 1 car, and all McLaren vehicles for the last 30 years, the MP4-12C is built around a carbon fibre chassis and is the only car in its class with this feature. It is powered by a mid-mounted 3.8-litre V8, twinturbo engine made by Ricardo, which reins in 592 horse power and has an incredible top speed of 205mph.

One advantage of having a flexible system is that as we introduce new variants and new models we can add or delete work stations without a fundamental tear-up of the entire production system

Combine that with the fact that it produces just 279g/km of CO2, provides a supremely comfortable ride thanks to its advanced suspension system and features F1 technologies including brake steering and you have one of the most impressive cars on the road. Its rather utilitarian name might appear odd but the ‘MP4’ has been the chassis designation for all McLaren Formula 1 cars since 1981. The ‘M’ refers to McLaren, with the P4 referring to Ron Dennis’s Project Four Racing which merged with McLaren in 1981. The ‘12’ refers to McLaren’s internal Vehicle Performance Index through which it rates performance criteria for competitors’ and its own cars. The criteria combine power, weight, emissions and aerodynamic efficiency. Finally the ‘C’ is short for carbon and represents the carbon fibre MonoCell on which the vehicle is based. The MP4-12C sits second on Top Gear’s Powerboard behind the V8 Ariel Atom and is faster round the BBC show’s test track than the Ferrari 458, arguably its closest competitor, by nearly three seconds. Despite

this the car has had its critics. Most criticisms seems to revolve around the idea that the car lacks character because it is too perfect – a strange comment, perhaps, considering this was surely the aim. The nuances of supercar perfection are a mysterious art form.

Future view “McLaren aims to support future growth and inject new life into high technology manufacturing and engineering jobs in the UK,” says Sheriff. “We want to inspire future generations of designers and engineers to work in these fields in the UK and I have no doubt that the bright young engineers working on our Formula 1 and sports car development programmes will continue to do Britain proud.” Antony Sheriff has managed to successfully integrate a series automotive division into the F1 beast that is McLaren. With a promise of a new product every year for the near future, you can expect the roar of a McLaren engine echoing along roads and racetracks, home and abroad, to become a more common sound.

Have your say at www.themanufacturer.com

The Manufacturerâ&#x20AC;&#x2122;s Future Factory Series provides practical opportunities for manufacturers to learn from industrial experts, academics and government officials to gain insight into how best practice will look in the future.

www.themanufacturer.com/flexibleworkforce

With labour costs often singled out as the largest outlay for many businesses, Flex for the Future explores ways of improving workforce flexibility and reducing avoidable costs.

Flex for the Future Conference 2012 Thursday 5th July, 2012 The Hilton Metropole, Birmingham (NEC) Case study presentations from:

Researched and delivered by:

Supported by:

Sponsored by:

Clair Winder, Head of HR in Manufacturing, BAE Systems Derek McIntyre, Global Operations Director, Vernagroup Ian Greenaway, Managing Director, MTM Products Neville Henderson, Senior Consultant, Pasfield Curran Tracey Marsden, Senior Associate, Nabarro Simon Fenton, Partner, Thomas Eggar Geoff Evans, Production Manager, Aimia Foods Colin Watts, Lean Six Sigma Facilitator, Aimia Foods

Case study topics covered will be: Annualised hours Systematic approaches to workforce management Workforce forecasting and scheduling Employment law, legislation and EU regulations Trade Unions Strategies for managing and reducing the cost of agency staff Recruitment and retention strategies Lean Six Sigma and the flexible workforce Managing and sustaining change

To register and for more information contact Peter Kealy on 0207 202 4893 or email: p.kealy@sayonemedia.com

Interview 60 second

Rees Ward Chief Executive, ADS Jane Gray talks to Rees Ward, CEO of the aerospace, defence, security and space trade body, ADS, about the imminence of Farnborough International Air Show 2012, the world’s largest trade show for its sectors. : Why is Farnborough such an important event for those in ADS’ sectors? RW: It is a vital and unique opportunity for the sector’s fraternity to gather and communicate in an efficient and direct way. You can do so much business at Farnborough. 2008 was our record year when £88bn worth of deals were struck at the show. And even the 2010 show, which took place at a difficult time for our sectors, was strong with £47bn worth of business done. This year 25 per cent of exhibitors are new to the show, so we should expect plenty of appetite. : But Farnborough is not just about trade – how important are the public days? RW: This is the other side of the coin. It more important than ever to take opportunities to celebrate industry in the public eye and to engage with the public. A show like Farnborough which attracts a wealth of professional and technical expertise is the perfect place for the general public to familiarise themselves with the detail of the industry. Perhaps

Farnborough International Air Show 2012 will take place from July 9-15. 120,000 trade visitors are expected at the show in 2012 and there are around 1400 registered exhibitors. In 2012 Farnborough International Air Show will launch a new zone for aviation security sponsored by FLIR Systems. For more information visit: www.farnborough.com/airshow-2012 most importantly the public days offer a chance to enthuse our next generation of aerospace engineers. We can parade the advanced technology the industry is creating and using every day.

Farnborough has always been an international show, but this year the foreign delegations are particularly strong

: Exports have been a hot topic for government and industry as the economy seeks growth. Will this be reflected at Farnborough 2012? RW: Government has been very clear on exports. They are the only way we can hope to grow and create economic stability alongside attracting inward investment. Farnborough International Air Show brings both those agendas together. Farnborough has always been an international show, but this year the foreign delegations are particularly strong. Russia, China and Brazil will all be there in strength. India is sending a big delegation and Mexico too has sizably increased it presence for 2012 after exhibiting for the first time in 2010. Civil aerospace is booming and I expect a lot of the international business at Farnborough will be in this

area. But Japan has recently made important changes to its defence policy and this may prove significant for exhibitors. : Do you feel that Government recognises the importance of Farnborough International Air Show? At ADS’ annual dinner in February the trade body’s president, Robin Southwell, compared the commitment of the Prime Minister to Farnborough unfavourably with that of the French President to the Paris Air Show. RW: I can’t comment with regards to the Prime Minister. But so far a number of key ministers have expressed their intent to visit the 2012 show. More generally, there has been a marked improvement in ADS’ dialogue with government over the past three years. We are now recognised as the prime interlocutor for representing the interests of our sectors. This has come after several years of much needed consolidation in the trade body space for aerospace, defence security and space. We have now settled internally.

The 787 Dreamliner is touring the world to meet its future customers. On April 23 it visited Heathrow

Lean dream T

he first 787 Dreamliner was delivered in September 2011, and the newest addition to the Boeing fleet is now on everybody’s lips. The aircraft, thanks in part to the extensive use of light materials like carbon fibre, can travel longer distances than any previous Boeing model, while using 20% less fuel. The current production rate for the 787 Dreamliner is 3.5 planes per month, but the company hopes to reach 10 per month by the end of 2013. This production ramp up is big news for the UK supply chain. Perhaps surprisingly to some, the Dreamliner is 25% UK-made and British suppliers range from SMEs operating in niche markets to international players like Rolls Royce and Messier-Bugatti-Dowty which have longstanding relationships with Boeing. The latter, has previously supplied landing gears to Boeing’s military programmes, and is now responsible for the design, manufacture and integration of the main and nose landing gears for the 787. In its Gloucester plant, the company

In April the Boeing Dreamliner visited the UK as part a world tour. Roberto Priolo talked to two of the plane’s UK suppliers about the part they are playing in leaning production and the supply chain in order to deliver the huge backlog of orders for this record-breaking example of daring engineering. produces the 787’s truck beam, one of the components of the main landing gear.

Smoothly does it Boeing has strongly encouraged its suppliers to introduce new materials for the 787, and Messier-Bugatti-Dowty has developed a first-in-industry titanium inner cylinder for the landing gear in response. The company’s Gloucester site specialises in large titanium components and to better respond to increasing demand from Boeing, the site layout has been changed and new equipment has been purchased, to allow for the creation of a high speed titanium flow line. Once up to full production rate,

up to 20 truck beams could be coming out of the line every month. Matthew Taylor, production programme manager at Messier-Bugatti-Dowty, says: “Value stream mapping was one of the key tools we used in order to produce the flow line and to reduce the number of work centres each part visits. Hence reducing queue time for each centre. “Lead time is our main focus: a titanium forging is in the region of six times the cost of a steel forging. We needed to reduce lead time to control working capital,” he sums up. Messier-Bugatti-Dowty manufactures a truck beam in eight to nine weeks. In line with

Leanoperations Lean dream

787 Dreamliner key facts

value stream maps and what is considered a reasonable flow time, it organises operations in a way that helps smooth the workload while taking into account that production buffers need to be in place to plateau the rates. Taylor explains: “We don’t want to build three beams this month, seven the next, and one the month after. We have a master production schedule to smooth load over the course of a twelve month period. In a facility our size, the main problem in terms of schedule is the queue time of the machine. The less machine operations we have the quicker the product goes – the flow line has helped us reduce the lead time by about 30%.”

There are 850 orders for the 787, which are valued at £178bn. The plane’s noise footprint is 60% smaller than similar models, and 20% less fuel is used. The 787 will be able to fly non-stop from the UK to Honolulu or Santiago. The Trent 1000 engine, produced by Rolls-Royce, has 700,000 pounds of thrust and measures 112 inches in diameter. The first 787 was delivered to All Nippon Airways. It flew from Seattle to Tokyo’s Haneda airport partially using biofuel from cooking oil. Boeing suppliers for the 787 Dreamliner include: Messier-Bugatti-Dowty, Eaton, Rolls-Royce, Contour Aerospace, GKN, GE Aviation, Goodrich Actuation Systems, SIRS Navigation.

Share and share alike In a facility our size, the main problem in terms of schedule is the queue time of the machine

In 2007, ILFC placed an order worth $1.3bn at list prices for Rolls-Royce’s Trent 1000 engines to power 40 of the 787s it has on order

Boeing is a good mentor when it comes to developing a relationship with suppliers and encouraging lean activities for common benefit. MessierBugatti-Dowty has dedicated supply chain improvement personnel to carry over best practice and make sure suppliers are aligned with the company’s strategy and understand the requirements. This is the same practice Boeing adopts in dealing with its own supply chain. Taylor says: “We have Boeing representatives on site regularly, but they don’t get overly involved, as long as we do our job properly. It’s a learning experience, and a new way of working for us, but the benefits are clear.” Bob Eady, managing director of SIRS Navigation, a small manufacturer employing 24 people that supplies a standby compass to Boeing and other aircraft makers, agrees. “Control on our suppliers is our biggest challenge. We tend to pass on an understanding of the system we work with and the knowledge we have of working with a bigger customer to our suppliers. “But that can be quite difficult, especially with smaller companies and smaller volumes.

Matthew Taylor, Production Programme Manager, MessierBugatti-Dowty

But it is important because issues affecting the end product can often be traced back to a small supplier in the chain.” Boeing represents about 10% of SIRS Navigation’s business. The Kent-based SME is now exclusive supplier of the compass, which becomes useful when directional headings on the aircraft fail – for example in case of lightning strike. SIRS Navigation has a strong lean programme, which derives from both Boeing requirements for continuous improvement and the need to reduce costs while increasing quality. Eady explains: “We realised we weren’t getting good yield,

and identified the root causes in order to remove rejects. We were also looking at the way we processed the work, at flow, cutting down on unnecessary processes and duplication. From a planning point of view, in the first four months of this year our output was 10% up on the same period last year. And we achieved this with a lower headcount.” The order book for the 787 is 850 airplanes, of which only six have been delivered. There is no doubt both Boeing and its suppliers will have to work hard and focus heavily on supply chain integration if these orders are to be fulfilled on time.

Workforce and Skills Flexible working practices

Flex for the Future Flexible working practices are important when both parents work and companies are trying to retain skilled labour at all costs. But it creates problems for employers too. A new conference from will outline the main changes to labour law and share best practice flexible working methods.

n the Queen’s Speech last month, Her Majesty advocated the proposal for companies to use flexible parental leave to embed more flexible working. It means that maternity and paternity leave will be converted into one system, which does not differentiate between sexes. The problem for employers is that this system will make finding maternity cover more complicated. A couple with a new baby could in theory take seven months parental cover and split it into different sized blocks between them - making it impractical to train a replacement staff member for such a short period. The British workplace has never offered more flexibility to employees. EEF’s recent flexible working survey said that over two-thirds of 446 companies asked received a request for flexible working in the last 12-months. The most common requests were from parents of children under six years old. The survey said that employers saw the main benefits of flexible working as leading to a better relationship with employees, improved motivation and reduced staff turnover. Three speakers at The Manufacturer’s Flex the Future Conference 2012 explain how their methods have helped to shape a more flexible workforce while saving money.

Geoff Evans, Production Manager and Colin Watts, lean six sigma facilitator at Aimia Foods, have built a continuous improvement model in tandem with more flexible working. At Aimia we believe that everything starts and ends with the right people. The management team has taken the lean six sigma and kaizen ways of thinking to create their own bespoke systems of continuous improvement. This powerful tool has allowed management to eradicate non-added value streams and increase capacity through streamlining. A big part of this is enabling our workforce to flex up and down. We introduced annualised hours – our overtime costs were massive. We have moved a night shift using 16 people back to a day shift with 12, a big saving on hourly rates.

Clair Winder, HR Manager, Industrial Capability at BAE Systems on the company’s Employment Retention Scheme. As a global company employing around 90,000 people worldwide, BAE Systems understands the importance of listening to and working with our employees to sustain and improve our business performance. One good example of this is has been in north west England, where the partnership approach adopted by the trade union and management teams during redundancy consultation has resulted in the development of an Employment Retention Scheme. Through the scheme, employees will take up to one day per month unpaid leave for up to two years in order to mitigate job losses.

Tracey Marsden, a partner at law firm Nabarro LLP emphasises the weight of HR legislation.

’s Flex for the Future conference will be held at the Hilton Birmingham Metropole on 5-6 July. Contact Peter Kealy at (p.kealy@sayonemedia.com) or call 0207 202 4893 for more information.

www.themanufacturer.com/flexibleworkforce

In recent years, the manufacturing sector has faced a growing burden of employment duties and obligations. Some obligations are UK-led, others have their origins in European law. Employers are now obliged to offer equal pay and conditions to many agency workers; they face an increasingly complex system of family-flexible rights. With more coming, their duties towards disabled employees and job applicants have become more burdensome and they face daily hurdles in seeking to manage sickness absence and/or an ageing workforce. Despite this legislation that could constrict enterprise, some businesses have responded well, even turning some of these restrictions to their advantage. We will look at how some of these recent changes are likely to affect this sector.

UTC Diary

UTC Diar

The Black Country UTC is one of a tranche of new University Technical Colleges being established across the UK. The colleges provide specialist facilities and a focused curriculum to prepare 14-18 year olds for careers in industry. In this diary entry for , students at the college explain why the UTC education model appeals to them.

Adam Rogers, Year 12:

am currently the managing director of the Student Executive Board at the Black Country UTC. I chose to attend the college for a number of reasons. The first reason is that the day is structured differently to mainstream schools. The day starts at 8:30am and on Mondays and Fridays the day ends at 4:00pm. On all the other days it ends at 5:00pm. Within this structure there are six one hour sessions as well as two 15 minute breaks and a 30 minute lunch break. The increased hours mean I can get more work done at college and then have no home work. Then there is the specialist teaching and equipment. Nearly all of the teachers have a background in engineering and have not only worked in teaching but also have industry experience. All the equipment used is factory standard which gets us ready for the real world. Employer involvement allows us to use real problems from engineering businesses as part of our course. I want to be a rollercoaster engineer when I am older. The Black Country UTC offers me the best chance of getting the results in the subjects I need to do this. When I go to university I will have an advantage over everybody else that applies. That is what makes the UTC great.

Adam Rogers working on an engineering project at the Black Country UTC

Laura and class mates learn how scientific principles are applied in industry

All the equipment used is factory standard which gets us ready for the real world. Employer involvement allows us to use real problems from engineering businesses as part of our course Adam Rogers, Student Executive Board, Black Country UTC

Laura Jaggers, Year 12:

am currently in Year 12 at the Back Country UTC. I joined the UTC in September when I was 16 and I’m, currently studying Biology, Chemistry and Maths A levels, and a Level 3 extended diploma in engineering. The reason that I am able to study all these subjects at once is because of the UTC’s hours. I have at least six hours of lessons each day and the structure of the day resembles that of the workplace more closely than most colleges or schools. I hope having experience of this will help me perform better when I first enter the workplace. My ambition is to become a doctor or bioengineer, and being at the UTC enables me to study for both of these careers at the same time so I can choose which career path I want to follow later. Not only this, but my teachers here are specialists in both science and engineering, so I’m getting the best from each subject, putting me in a prime position when I go to university. Becoming prepared for work is a core involvement in the UTC, which is why all students must wear business dress, not just a uniform! The UTC is sponsored by Siemens which means there are many connections in place for when we have finished our courses and ready for work. I couldn’t have chosen a better education route. I am extremely happy and proud to be a student at the UTC.

Have your say at www.themanufacturer.com

f o e e y o l Empmonth the 012 2 June

Tom Silvey Production Engineer, Renishaw What is your role and what are the main responsibilities? At present I am working as a production engineer in the mill/turn team at the Renishaw machine shop. I am part of a team with responsibility for programming and supporting 20 Citizen sliding head lathes of various models (M32, M20, K16, B12.) My working week consists mainly of programming and proving out production processes that are required to produce large batches of components with minimal operator support. Being the shift’s first point of contact for the Citizen machines means that I am also required to deal with shop support callouts regularly, and solve any Issues that the operators may have during setup and running. Another aspect of my role involves the design of inspection aids and custom gauging.

CV in brief: Tom Silvey Age: 23

Education:

GCSE: A*, 5A, 4B

AS Level: Geography

A level: Physics, IT, Business studies

BA gold crest award for engineering

Advanced level apprenticeship in engineering - in the engineering and manufacturing sector.

VRQ - Engineering and technology (progressive mechanical)

Level 3 NVQ - Mechanical Manufacturing Engineering (CNC Machining)

PEO Level 2 (performing engineering operation)

Currently studying Mechanical Engineering HNC at Newport University

Interests:

Building and racing quad bikes

Motocross Cricket

Have your say at www.themanufacturer.com

What are the key skills you use? A good understanding of machining processes, process control and inspection are all vital. The utilisation of 3D CAD and CAM software is an integral part of the job and it’s important that I can use these tools to a high level. What do you consider to be your biggest personal success at the company so far? My biggest success is being voted Gloucestershire’s Outstanding Apprentice in the engineering and manufacturing category, and also receiving the Diamond Jubilee Gloucestershire Apprentice of the Year Award for best overall apprentice. Although the award was unexpected, it was nice to gain some recognition for the work I have done over the past few years. What first attracted you to a career in manufacturing? My dad is an engineer, so it was case of natural progression having been brought up in that environment. I’ve always enjoyed making things and being hands on, which is the main reason I chose an apprenticeship over the more academic route of university. The biggest attraction to a career in manufacturing is the balance between office based work and being involved in the actual process of making the parts.

What are the most rewarding parts of your job? Having engineered a process for a number of weeks in the virtual world of CAD/CAM, the most rewarding aspect is definitely producing the finished product and seeing it in metal. What will be your next career move? Being an apprentice the next career move is to take a full time position within the company. I’m enjoying the challenges and variation that the manufacturing services division has to offer and would definitely consider a full time role in this area. How do you think best to get more young people interested in manufacturing? I speak from experience when I say that manufacturing is not given the emphasis it deserves at GCSE and A level. Young people choosing both their GCSE and A-level subjects need to be more informed. The best way of doing this is to get them into manufacturing companies and see what it’s all about for themselves. There are many misconceptions about manufacturing and I think showing young people around modern manufacturing facilities will change their views on the profession. @themanufacturer

Exportfocus Latin America

HGL Dynamics manufactures specific parts for aerospace companies in Brazil,and looking to expand in the Latin American market

There for the taking:

Latin America George Archer wraps up the key opportunities and challenges for UK manufacturers exporting to Latin America.

Surveying the continent

Localised reselling

Giving a brief overview of Latin America as an export destination for UK goods Anthony Shepherd, director of market research firm, Shepherd International observes: “The largest market, Brazil, speaks Portuguese and has protectionist tendencies. The others are Spanish-speaking, and usually dominated by an American and more recently, a Chinese product culture.” According to Mr Shepherd, this deters the diffident business, but determined UK manufacturers are making inroads. To make advances in South American markets they tend to invest in sales specialists with indigenous language skills to train local distributors. The UK-based CAD/ CAM software producer Delcam provides a strong exemplar for this approach.

Pedro Léon, business development director for Delcam in Latin America talks about the company’s view of the South American market, pinpointing those countries that are enjoying buoyant economic times and those which are stagnant or inaccessible – Venezuela being one example. “For us, and I think a lot of other manufacturers, Brazil and Mexico are the biggest opportunities,” shares Mr Léon. “However, after 22-years of working for Delcam in this role, my experience tells me that placing your resellers in one place is not the best way to go about business on the continent.” Adopting a focused and localised approach to business is working well for Delcam. They have networks of resellers in

countries across the continent. Léon explains: “As much as we can, we try to develop local operations. Many manufacturers decide to place operations in Brazil and Mexico. In my opinion this is a mistake – they become immersed in the markets there and this ends up becoming a disadvantage to them.” The breadth of manufacturing sub sectors found in Latin America is far reaching, which means Delcam can rely on a network of industries as well

UK goods exports 2011 in £hundreds of thousands Year:

2010

2011

Brazil

2129

2322

Mexico

913

952

Chile

584

740

Argentina

330

383

Venezuela

256

301

Colombia

218

293

Peru

119

147

Trinidad

101

118

Uruguay

115

Falklands

Paraguay

Total:

4811

5471

São Paulo regularly suffers power cuts leading to a massive loss of profits for manufacturers with operations there - image courtesy of Rodrigo Soldon

In 2011 Brazil spent £429m on UK machinery, £384m on British cars, £269m on our pharmaceuticals and £108m on our drink Anthony Shepherd, Director, Shepherd International

as markets if disaster strikes. The effect on the automotive supply chain after the Japanese Tsunami was devastating, but Delcam is able to avoid damage to their business through a confident sectoral spread as well as a geographic one.

Getting your products out there Latin America is a long way off and getting products to market safely and cost effectively can be as much of a challenge as establishing a strong local reputation and brand awareness. Hellmann Worldwide Logistics is a freight company with extensive operations in Latin America. Matthew Marriott, commercial director of Hellmann Worldwide Logistics UK outlines the main difficulties of exporting there: “In terms of getting products to the continent by ocean freight or air freight, the main issues are primarily translation, legislation and

UK is Brazil’s 15th largest supplier, with a 2.05% market share

During 2011, UK exporters sold Colombia

£28m

Drinks

£19m Plastics

£11m

£9m Toiletries

Vehicles

Precision and medical instruments

£23m

The UK’s top 10 exports to Brazil in 2011 The UK is Brazil’s 15th largest supplier, with a 2.05% market share. Brazil is the UK’s most important trading partner in Latin America, with UK exports of goods and services valued at £5.4bn in 2011. 1 Power Generating Machinery 2 Medicinal & pharmaceutical products 3 Chemical Materials & Products 4 Plastics in Non-Primary Forms 5 Organic Chemicals 6 Road Vehicles 7 General Industrial Machinery & Equipment 8 Professional Scientific Instruments 9 Iron & Steel Cork & Wood 10 Machinery Specialised For Particular infrastructure,” he states. “Each South American country has its own set of entry regulations and requirements to consider – meaning that the paperwork often differs from nation to nation,” he explains. Possessing local knowledge of the different aspects of documentation to consider, including export customs, letters of credit, certificates of origin, and bills of landing is vital according to Mr Marriott. Another issue with exports to Latin America is cost efficiency, a challenge which will only increase as global fuel prices escalate. However, having endured the trade fallout from the financial

crises of 2008, export figures to South America have since recovered, testifying to the allure of the lucrative markets the region holds. November 2011 figures showing a 10% increase in European container exports to the continent. Shipment consolidation has had an important part to play in enabling this resurgence. Individual consignments are now combined for effective use of container space and this cuts costs for both manufacturers and logistics providers. Hellmann offers consolidated shipment space in both 20ft and 40ft container vessels. @themanufacturer

Exportfocus Latin America

Market hotspots: Business commentary on some of South America’s hottest opportunities.

Mexico Delcam

Pedro Léon, business development director for Delcam, Latin America offers his opinion of Mexico as an export destination for UK manufacturers: “It is the most buoyant market – many companies in the country are investing huge amounts and as a result the manufacturing sector is growing fast.” “Nissan and Volkswagen are two big automotive companies that we sell to in Mexico and they are investing huge amounts in new facilities there. For Delcam it’s a market where we are doing extremely well, mainly because of a taxation system that is not too complex compared to other Latin American countries, particularly Brazil.

RKM Enterprises Based in High Wycombe, RKM Enterprises is a manufacturer of specialised eco-friendly cleaning products. It first exported to Mexico in late 2011 and exports have grown since then. Company proprietor Nagendra Bhattacharya comments: “The Overseas Market Introduction Service report identified potential customers and distributors for our silver cleaning range and, crucially, advised that we rebrand and re-label our products to modernise their image for the Mexican market. “Having seen the demand for our products in Mexico, we are now investigating the potential in other Latin American markets with help from UKTI.” Bhattacharya concludes.

Brazil Delcam

Brazil is, by all accounts a very difficult country for native companies to make a profit in, according to Delcam’s Léon: “The cost of steel produced in Brazil is more than importing it! This is shocking, and it makes it very difficult for companies there,” he says. In addition Léon says that the Brazilian government’s approach to business policy and regulation is volatile. Furthermore, complex tax system and high interest rates compared to other emerging economies make it hard for companies to dedicate time to actually trying to improve their manufacturing processes and operations. The Brazilian government takes isolated measures

that don’t go far enough to actually change things, according to Léon. As well as taxation, Mr Léon says that labour laws, power shortages and the hoops investors have to jump through are detrimental to business growth in Brazil. The cost of energy is also relatively high compared to other countries, and supply is unstable, with regular power cuts in urban centres.

Shepherd International Anthony Shepherd talks about Brazil and the growing export market for British manufacturers: “Take Brazil’s BRIC economy, the world’s 8th largest. Purchases from Britain at £2.3bn have doubled since 2007, and this is despite punitive duties and bureaucratic hurdles. “In 2011 Brazil spent £429m on UK machinery, £384m on British cars, £269m on our pharmaceuticals and £108m on our drink. It likes our plastic products too, spending over £50m,” he adds.

HGL Dynamics HGL Dynamics manufactures niche products for the aerospace and automotive industry. Andy Law, director of technology at HGL Dynamics gives his view of the market prospects in Brazil. “Forecasts are that in the next 20 years Brazil will need to purchase more than 1,000 airplanes valued at $100 billion, and with the assistance of UKTI, we began evaluating the market, narrowing the search for potential agents ideally located either in the hubs of Sao Paulo or Rio de Janeiro. “For the Aerospace sector, we reached an agreement with AirMod Consulting, an established Brazilian Aerospace Cluster member company based in the San José dos Campos technology region,” continues Mr Law.

“Brazil isn’t the easiest market in which to do business, and it can take quite a long time to break into,” Law sums up. “Having patience and being persistent will eventually pay off, and we have great hopes for a successful future in the country.”

Columbia

Colombia is a sophisticated £300m market for UK exports. The country’s guns, bombs, and drugs reputation is clearing as FARC rebels become less active. Colombia’s legitimate exports to Britain include flowers and coffee. During 2011, UK exporters sold Colombia £28m of precision and medical instruments, £23m of drinks, £19m of vehicles, £11m plastics and £9m of toiletries. In the same year, exports of £5m in UK flat glass and paper towels worth £3m landed in the Columbia and Colombian food retailer Congrupo recently purchased British breakfast cereal production machines from Baker Perkins in Peterborough.

Baker Parkins Baker Perkins manufacturers biscuit production machinery. Managing director Jon Cowz says: “We have a long history of exporting to various countries in South America, and have found it a beneficial place to do business.” “These days, it’s harder to get value for money. In a lot of countries, particularly Brazil, there are real problems with getting businesses to make profit, so they often cannot afford to import the machinery we offer. Labour costs are actually higher in Brazil than in Mexico or China, which is a definite turn-off for us.”

SNAP UP YOUR CHANCE TO WIN A SHARE OF £5,000 OF CANON EQUIPMENT Focus your camera on British manufacturing and help transform the image of our industry by entering the EEF ‘Made in Britain’ Photography Awards. We want you to capture images of British products, components or processes your image could be of anything from turbines to silicon chips, or could portray any part of the journey in inventing, designing or making British products. Show us the best of what’s made in Britain before 28 September 2012 for your chance to win. Entry is free and open to everyone in three categories; amateur, professional and young person (14-19.)

For information and to upload your images visit www.eef.org.uk/photo or contact Stuart Biddle on 020 7654 1501.

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EEFInsight EEF Insights: Remedies for sickness absence

Paul Shires, executive director sales and marketing for not for profit health insurer Westfield Health, discusses the results and significance of the EEF/ Westfield Health Sickness Absence Report 2012

elivering growth has become an obsession of global governments and businesses in these difficult economic times. To achieve this, maintaining a fit, healthy and productive workforce is crucial. The EEF/Westfield Health Sickness Absence Report therefore provides a timely and highly relevant evaluation of the manufacturing sector’s approach to managing sickness absence, as well as highlighting what more can be done to tackle the issue. Encouragingly, this year’s survey has once again shown a decline in short term absence. This is the fifth year running that this downward trend has continued, a fact which bears testimony to the proactive work

60% of companies feel the introduction of fit notes in 2010 has made no difference to sickness absence

being carried out by employers throughout the sector to manage sickness absence. And taking a more proactive approach to employee healthcare is something that we as health insurers expect to see increase over the next 12 months.

The spur There is no avoiding the fact that the NHS is under significant pressure as it works towards its ambitious savings target of £20billion by 2014. Waiting lists are rising and services are being rationed or, in some cases, cut altogether. This will no doubt have an impact on sickness absence levels as employees are forced to take longer off work as they wait for diagnostics or treatment such as non-urgent surgical procedures or physiotherapy.

The response The natural solution is to look towards the private sector for treatment. As such, we expect to see more businesses implementing some form of health insurance scheme in order to manage the costs associated with private healthcare.

The NHS is under significant pressure as it works towards its ambitious savings target of £20billion by 2014 Paul Shires, Executive Director Sales and Marketing, Westfield Health

Health cash plans for example, have always existed to complement the NHS, and as access to some public sector health services is limited or withdrawn, cash plan providers will be looking to introduce more innovative and relevant benefits for employees that help bridge some of the gaps in NHS provision. Many health insurance schemes now offer counselling benefits as part of an Employee Assistance Programme (EAP), and with this year’s survey finding a rise in stress, anxiety and depression-related absences, it is important that early intervention and the valuable part that EAPs can play in delivering this is communicated to businesses and their employees alike. The survey also highlights the fact that fit notes have a key role to play in managing sickness absence. Disappointingly the report shows that almost 60% of companies feel the introduction of fit notes in 2010 has made no difference. But along with the EEF we feel that this shows a need for more GP training and more work towards better embedding the culture of fit notes rather than sick notes throughout the sector. We believe that a company’s workforce is its lifeblood and that investing in employee’s physical and mental healthcare – especially in today’s difficult climate – is a necessity. However, businesses need the right guidance and recommendations to be put in place from government. From communicating the value of EAPs and fit notes, to investing in better training for GPs and supporting companies proactively managing sickness absence, we need to work together to action the recommendations in this report and tackle sickness absence as one.

Have your say at www.themanufacturer.com

Globalising the supply chain Economic, geopolitical and environmental factors mean regular supply chain audits are essential to protect global procurement platforms, says Peter Russell, head of manufacturing sector coverage at Royal Bank of Scotland.

perating in a globalised environment brings a host of new challenges for manufacturers. Identifying emerging markets, applying design or process innovations across borders, and mitigating the risks created by political instability are just a few. So how might growing international remits shape the thinking of those responsible for procurement at UK-based companies?

A fine balancing act For many manufacturers, global supply chain management has increasingly dominated forward-planning. My colleague Mark Ling, head of trade and supply chain financing for Corporate & Institutional Banking, says, “Volatile input costs, rising fuel prices and higher labour costs make it difficult to manage supply chains which rely on a degree of predictability to perform efficiently.” Natural disasters and geopolitical developments don’t help. While earthquakes, tsunamis and revolutions are not new, global supply chains increasingly incorporating just-intime systems mean their impact is much more immediate and severe. Sudden shortages of tiny components can be calamitous, as suppliers rush to catch up and manufacturers cast around for alternative sources.

Emerging markets: new opportunities Manufacturers with supply chains concentrated in geographical clusters have been focusing on how newer or emerging markets might prove advantageous, and not just because of reduced

exposure to risk. “The extent to which the Indian Ocean tsunami affected so many countries really trained attention elsewhere,” says Mark Ling. “Today, you might find Chinese suppliers establishing factories in sub-Saharan Africa, so as not to lose out when their customers seek to spread their geographical risks. Countries like Turkey, Morocco and Oman illustrate how North Africa and the Middle East are also gaining prominence, partly as they offer lower shipping or transport costs than Asia Pacific locations. “However, Indonesia, Vietnam and the Philippines have also been eager to step in as the costs of employing people in China and India continue to rise. For some manufacturers, these countries enable them to continue enjoying the benefits they originally sought by bringing Asia into the supply chain in the first place.” Of course, there are other considerations, says Mark: “If your organisation is using more currencies to buy supplies, you’ll be subject to greater foreign exchange volatility. If you’re now buying from, say, Brazil or Mexico, your treasury teams may want to review the feasibility of your current sterling or euro purchasing models, depending on the stability or otherwise of the markets you’re exploring. You might also want to more closely examine the relevance and enforceability of your traditional contracts in certain jurisdictions, and as a rule, remain vigilant for early warning signs that trouble could be brewing.’

Procurement: at the heart of strategy and performance As global supply chain strategy has become a higher priority for CEOs and CFOs, many of the individuals leading procurement teams in the largest multinationals now enjoy representation at board level, alongside their business partners in operations and production. That in turn calls for seamless interaction between heads of procurement and their peers in finance and technology.

Supplychain “Today, procurement enjoys a greater voice in the boardroom,” says Mark Ling. “Currency risks, reputational risks and commercial risks – even those associated with ethics or corporate governance – are inevitably linked to procurement and supply chains. As those risks can impact directly on revenues, costs and profitability, global supply chain strategy is integral to virtually every aspect of business.”

Absorb the shock, mitigate the risk Diversification may be the watchword for supply chain strategies – but doesn’t that create greater risk? Not, says Mark Ling, if manufacturers apply tactics to integrate suppliers more closely on an international scale: Become a buyer of choice: “Shrewd manufacturers work hard at supplier onboarding and relationship management to ensure they’ll be given favourable treatment; if events beyond their control mean your suppliers find themselves forced to choose between delivering components to you or one of your competitors, you want them to choose you.” Focus on your supplier’s suppliers: “Having a Plan B is of little use if your Plan B supplier doesn’t have credible risk-mitigation mechanisms in place itself; but rigorous examination of their own supply chains should be undertaken supportively; what risks can you identify and help to offset? How might your financial buying power make your supplier’s chain more efficient or less costly, ultimately proving more effective for you?” Build in stock buffers: “Add flexibility into your inventory systems to absorb shocks and enable you to finance unexpected purchases, ideally without impacting adversely on your working capital.”

Collaboration in action: UK industry sets a worldwide example The steps required to optimise global supply chains are wide and varied – but what many have in common is a dependence on proactive collaboration, among teams within organisations, and amongst organisations within sub-sectors. Take the UK’s aerospace, defence, security and space industry. For some time now, it’s been at the vanguard of finding solutions to greater complexity and diversity in global supply chains. Its SC21 framework was devised by trade body ADS, which identified that a disjointed industry-wide approach was holding it back from its potential to fully command world markets. SC21 standardises previously disparate, onerous systems. The end result is a set of uniform definitions and measurements for improving everything from production design, inventory management and working capital management, through to the effectiveness of customer-supplier relationships, order delivery and sustainability objectives. Graham Chisnall, deputy chief executive at ADS and the organisation’s SC21 champion, explains, “Manufacturers tend to push obligations back down the supply chain, especially in relation to investing in design, production and assembly technology. SC21

provides aligned, verifiable metrics that encourage continuous performance improvement, with risks and benefits shared throughout the supply chain.” Today, nearly 600 companies – overseas as well as in the UK – have implemented SC21, or are well on their way to implementation. “There have been some stunning results,” says Chisnall. “One organisation says its turnover tripled; others have found that SC21 has been a key factor in winning contracts, as it provides extra, recognisable reassurance to customers.” SC21 was developed by the very people – heads of operations, heads of procurement, factory managers – involved at every step in the supply chain, giving it endorsement right from its launch. That’s why it’s already being examined closely by manufacturers in other sub-sectors, from automotive and heavy engineering firms to companies making prototype testing equipment and precision engineering goods and components. Chisnall says SC21’s ready application to the SME and MSB environments means benefits need not be confined to major players. “It’s not costly to get off the ground, and as it’s scalable, it’s easy for smaller firms to use when collaborating with each other. There are certain improvement principles that have to be followed – but otherwise it’s a toolkit that can still be flexed to accommodate the specific demands of different sub-sectors.”

Going global for good As UK manufacturing strives to reinforce its standing, the farsightedness its constituent members apply to global supply chain strategy is likely to be a key driver for competitiveness, regardless of size, turnover, national or international presence. The indications are that we’ll see more UK-based MSBs and SMEs adapting procurement principles to their advantage, while our large, multinational players continue to set standards for improving global supply chains.

To find out more about how RBS can support your manufacturing business, contact: Peter Russell, Head of Manufacturing Sector Coverage, Corporate & Institutional Banking Tel: +44 (0)20 7672 1007 Email: peter.russell@rbs.co.uk To find out more about how RBS can support your supply chain or implement a supply chain finance programme, contact: Mark Ling, Head of Trade & Supply Chain Financing, Corporate & Institutional Banking Tel: +44 (0)20 7678 3734 Email: mark.ling@rbs.co.uk

ADS has a dedicated SC21 team. To learn more about how SC21 might be best adopted for your business, contact: Tel: +44 (0) 20 7091 4500 Email: enquiries@adsgroup.co.uk

tech? Taking up

Rockwell has launched a new mid-range that shrinks technology down into more compact and cheaper devices

Tom Moore examines why the UK lags so far behind other countries in the race to automate.

ries for the UK to increase the level of robotics and automation within the manufacturing sector reverberate among the technologically intrepid. But are they being heard? It’s an old call to arms. Is anyone listening? There has been a tepid approach to implementing robotics in the UK that places the country well behind Germany, Italy and France. The danger is that these economic rivals, competing to make and sell products to the same customers, have gained a competitive advantage over the UK.

Outdated worldviews

Spain

France

The fact is that, for many the money just isn’t available to invest in the automation of processes And there is also a lingering perception that automation is only for big companies. It is this thinking that the Government is trying to eradicate with a £600,000 pot to fund free site assessments. These are designed to identify realistic opportunities to improve production operations by using automation.

Italy

A window of opportunity

Number of robots installed by country

Germany

And the problem extends much farther afield than Europe. It is an exercise in repetition to say that the UK should embrace robotics to lower labour costs and increase productivity so that it can compete against the new manufacturing power houses in the East and elsewhere. Furthermore, that argument is now redundant. China is implementing robotics and automation faster than anyone else. Although wages have risen by 22% across China over the past two years, Chris Buxton, CEO at British Automation and Robots Association (BARA), says that this is not the only driver behind China’s rapid automation of manufacturing. Mr Buxton explains that there is a clearly expressed Chinese strategy to standardise

processes and improve quality. China is following the same path that Japan took in the 1980s. It is shedding the shoddy reputation that stereotypically accompanies products embossed with Made in China and is taking aim on high value, advanced sectors such as aerospace. Buxton warns that the UK risks playing catch up, or simply being sidelined, unless something changes soon. Cash flow problems, he says, are a major barrier to effecting this change. Especially for the UK’s wealth of small companies – the same segment which represents Britain’s only realistic hope for significant economic growth.

The uptake of this offering has been strong, with 171 firms making use of the review so far, with the option to receive 50% off of a further stage that looks at what machines would be best suited to the company’s needs. However, Grant Collier of the Processing & Packaging Machinery Association (PPMA) has warned that “funding is due to be exhausted by October this year despite an end date of March 2013 because demand has outstripped expectation.” A lack of knowledge and skills, plus an aversion to risk, have been cited as the primary causes of the technological gap between the UK and its European counterparts. But use of the government review has proven that interest and appetite for automation do exist. Buxton says that “there is a little bit of parochialism going on here,” so technical support is needed to accelerate understanding and use of automation.

Manufacturing Technologies

13,900 Robots installed in the UK

144,100 Robots installed in Germany It is no coincidence that a resurgent automotive sector and manufacturing heavyweights in the UK’s pharmaceutical and food and drink sectors have the highest levels of automation within industry. A 68% year-on-year increase in the sale of robots during 2011 was driven by dramatic growth in the automotive and automotive components sectors with growth of 235% and 176% in each. It is a virtuous cycle, the more robots can aid the sector to cut costs, the more sales companies can achieve and the more money they have to invest in further automation. Speaking at Automation University, an event hosted by Rockwell Automation, Buxton gave a rousing account of the benefits. “Robots are faster and more reliable than humans, plus they don’t carry union cards,” he said. “There is not a lower quality product on a Monday morning or a Friday afternoon. Adopting robotics leads to better operational ability and utilisation of space.”

Next generation automation Buxton asserts that programming improvements have also added the flexibility that robotics previously lacked, leading to quicker changeover times and higher yields. Bringing this improved capability to the masses, Rockwell Automation recently launched a new midrange portfolio to help machine builders design better-performing machines for medium-sized companies.

We still need to close the gap with our rivals in the rest of Europe if we are to realise our growth potential Terry Jones, Director, FDF

The range is scalable with integrated control for every size of machine and represents a flow-down of technology that is available at cheaper prices. Where drives and controls for mid-sized operations have lacked the ability to capture and record data in the past, automation firms such as Rockwell have worked on incorporating this to bring increased control to industrial processes to a wider audience. For example, the company’s new PowerFlex range of AC drives are more compact to optimise space in smaller factories and feature sensorless vector control to meet low speed torque demands, helping to improve application performance. In a world where robots increasingly talk to each other, there are now higher levels of integration between motion controls and drives over EtherNet/IP. Chip-maker McCain Foods recently installed £6.5m worth of robotics and automation equipment to boost capacity as it had to import chips despite having six manufacturing sites in the UK. Paul Derbyshire, electrical, control and automation engineer at the firm explained that the adoption of Integrated Architecture means that it has developed a standard set of engineering objects to use across all its applications. This improves the flow of data between the production floor and the enterprise system, uptime and enables quicker production changes to be made to meet market demands. Director at the Food and Drink Federation (FDF), Terry Jones, comments that “Though UK food and drink manufacturers are already major users of robot applications – we still need to close the gap with our rivals in the rest of Europe if we are to realise our growth potential.” Surprisingly, a drop in sales to both the food and drink and pharmaceutical sectors has been reported. “Such technology may not be right for every company, but it is clearly an important area to promote as we look to boost the competitiveness of UK manufacturing,” says Jones. “We are pleased to be working with BARA to help smaller food and drink companies explore new ways of improving processes and increasing efficiency.” Buxton admits that the link between job losses and robotics is still a contentious issue, but asserts that efficiencies gained by automating processes can create jobs in the UK. “The application of automation is good for business as a successful organisation will employ people. If you fail you make them redundant,” he says. Derbyshire adds that, at McCain Foods, “We have not lost the labour but redeployed them with new skills.” With the cost of robotics coming down and the cost of wages going up, even manufacturers that are happy with their existing setups are will have to sit up and take notice. @thomasmoore88 For more on government support, visit: www.automatingmanufacturing.co.uk

P2i developed its moisture repellent nanotechnology for the MoD but the innovation now has far wider applications.

Little

miracles Nanotechnology has arrived. But what is it, and how do manufacturers exploit it? Malcolm Wheatley finds out.

hoes, clothing and electronic devices that repel water, as if by magic. Handheld sensors that screen the female breast for cancer, identifying individual lymph nodes that carry the disease. And innovative materials that turn waste heat from car exhausts into electricity, powering the car’s electrical systems, and reducing the load placed on its carbon dioxide-emitting petrol or diesel engine. In each case, the underlying technology, nanotechnology, was not so long ago regarded as the stuff of science fiction. In short, it’s the ability to manipulate materials in the scale range of one to a hundred nanometres, where a nanometre is onebillionths of a metre. Or, to put it another and perhaps more impressive way, nanotechnology is the engineering of functional systems at the molecular scale. And science fiction it most certainly is not. Oxfordshire-based P2i, for instance, is a nanotechnology business that spun out of that most hard-headed of institutions, Britain’s Ministry of Defence. The liquid repellent nano coating technology it produces is based on Ph.D research carried out by chief technical officer and co-founder Stephen Coulson while at Durham University in the late 1990s. The goal: making soldiers’ protective clothing more effective against chemical attack.

Handily though, a material that repels liquid chemicals also does a decent job of keeping out a more ubiquitous substance: rainfall. To do this, P2i’s patented technology employs a special pulsed ionized gas, created within a vacuum chamber, to attach a nanometre thin polymer layer over the entire surface of a product. This dramatically lowers the product’s surface energy, so that when liquids come into contact with it, they form beads and simply roll off. The coating is molecularly bound to the product surface at a nanoscopic level, which means that it becomes inseparable from it, and is as durable as the material it protects. Even better, because the coating is one thousand times thinner than a human hair, it is invisible to sight or touch. Perhaps not surprisingly, the result is that this particular

Science fact, or science fiction? To those working in the industry, the hype and occasional lack of clarity around nanotechnology is sometimes seen as unfortunate. “There’s a lot of myth and misunderstanding about nanotechnology,” says P2i’s co-founder and chief technical officer Stephen Coulson. “The phrase was coined about some new and exciting developments that then lay in the future, but was loosely defined. But now, the future has arrived.” “It’s not about ‘nanobots’,” agrees Endomagnetics’ chief executive Eric Mayes. “‘Nanotechnology’ isn’t really any one thing. It’s the multi-disciplinary convergence of various things that are happening at the nano scale: chemistry, physics, biotechnology and engineering.”

Manufacturing Technologies

strain of technology has proved attractive to some of the world’s top clothing and footwear brands. Adidas, Mizuno, Hi Tec, Timberland, Ecco, and Teva, for example – each uses P2i coatings on their products. What’s more, P2i technology also coats 60% of all hearing aids today, and can be found on Motorola RAZR Droid phones and Zoom2 tablets. “Hi-Tec was our ‘breakthrough’ first partner,” says Coulson. “Back when nanotechnology was very new and not understood, Hi-Tec – a British sporting success story – took a risk with a small British manufacturer, and led the way.” But although understanding and application of nanotechnology has come a long way since those days, it remains technically challenging. Leicestershire-based European Thermodynamics, for instance, which is working to turn waste heat into electricity, has research partnerships with over half a dozen leading science universities, explains technical director Kevin Simpson. But the partnerships aren’t overlapping, he stresses: each university is working on a particular aspect of the technical challenges that European Thermodynamics faces – typically, although not always, the temperature range in question. And again, some hard-headed businesses and institutions are working closely with the company on joint projects. Jaguar Land Rover, for instance, and the European Space Agency. But mastering the nanotechnology aspect of the equation is still only solving part of the problem, warns Victor Higgs, managing director of Enfield-based diagnostic medical device manufacturer Applied Nanodetectors. “The trick is translating the concept into something that can be readily manufactured, and in volume,” he stresses. “It’s about scaling up, and reducing

Is Britain losing the nanotechnology race? Governments with an eye to the future love nanotechnology, or at least governments other than the British government appear to. Reportedly, the United States government has invested $3.7bn through its National Nanotechnology Initiative, and even cash-strapped Japan is pumping $0.75bn into applied nanotechnology research. Singapore offers nanotechnology technology companies tax breaks to locate there. So should the British government be doing more to foster nanotechnology? Professor Ravi Silva, director of the advanced technology institute of the University of Surrey, believes emphatically that it should. “The government should be doing more, and that’s the conclusion of a task force that I set up in 2006,” he says. “Other governments are putting more resources into nanotechnology, and here in Britain we need to develop a manufacturing policy that reflects nanotechnology’s importance. We

the cost, and integrating the nanotechnology aspect into other products and solutions that meet a commercial need.” The good news is that venture capitalists, who still fund many nanotechnology startups, now appreciate that message more than they used to. “Venture capitalists learned a lot of lessons from the 19952000 era when nanotechnology hype was at its highest,” says Eric Mayes, chief executive of Cambridge-based handheld nanotechnology-based cancer sensor manufacturer Endomagnetics. “Now, the focus is much more on finding markets and solving problems, and not just developing interesting particles and then looking for a need.”

need a plan: it won’t just happen on its own.” Certainly, speak to nanotechnology manufacturers and it seems that finance can be a problem. While far from certain that government seed-capital funding is the answer in every case, Endomagnetics’ chief executive Eric Mayes points to a definite lack of venture capital funding due to the recession. “The venture capital funds are there, alright, but investors aren’t investing in venture capital – so the funds don’t have as much capital to invest,” he points out. Down on the factory floor, meanwhile, European Thermodynamics’ technical director Kevin Simpson points to the physical reality of the problem. “We’re only an SME, so we’re always stuck for resources. If we had more spark plasma sintering equipment, we could prepare more samples that would allow us to build more prototypes more quickly,” he says. “We have the skills we need – but not the equipment.”

$3.7bn has been invested by the United States Government in nanotechnology through its National Nanotechnology Initiative

ROI The mainevent The of ERP

Delegates deep in conversation with ERP Connect sponsors during one-to-one meeting sessions

How do you leverage an ERP system for maximum benefit? How do you get it to deliver maximum ROI as well as maximum productivity, maximum business intelligence, and maximum competitive edge? asks Malcolm Wheatley

uch questions were undoubtedly what brought delegates to TM’s latest ERP Connect event, held on May 3 at the Ansty Hall Hotel, Coventry. It was a day packed with case study presentations, expert insight, one-to-one meetings and rich networking opportunities. For, as many manufacturing businesses know to their cost, the answers to such questions aren’t easily found. While it’s difficult to run a modern manufacturing business without an ERP system, the challenges of leveraging ERP for maximum benefit are easily underestimated. Simply put, mis-steps are costly, sapping efficiencies at a time when business conditions are tougher than ever. How do you choose the right system? How do you implement it and get that implementation right the first time? How do you minimise the risks of that implementation? And how do you leverage the system so as to deliver sustainable best practices? Of delegates seeking answers to such questions, few if any will have gone away empty-handed.

anufacturers contemplating putting in a new ERP system face a dilemma familiar to anyone who’s bought office furniture or a new internal telephone system. And it’s this: while the ROI of a new investment may appear derisory, try doing business without it. Yet, as speakers at ERP Connect confirmed, a new ERP system can actually throw up opportunities for enhanced ROI. Even if the system in question is replacing an existing one. A single ERP system across a dispersed business, for instance, offers centralisation opportunities, points out Claire Stillie, information systems programme manager at Marshalls. “Putting in central billing and central credit control was a big thing, generating a lot of savings and we couldn’t have done it without having one ERP system across the business,” she says. And today’s generation of ERP systems provide powerful new report-writing and Business Intelligence opportunities, which management can be slow to recognise the value of, says John Haslam, a senior consultant from the ERP Advice Centre. “Time freed-up from generating and analysing spreadsheets – especially by senior people – can be very valuable indeed,” he points out. “It’s not difficult to find real-life opportunities where the prize has been additional revenue, or additional margin.”

Eventreview Eleven insightful presentations, supported by networking meetings and question-andanswer sessions, showed how some of Britain’s best manufacturing businesses had adroitly leveraged ERP to boost competitiveness, drive down costs, and deliver undoubted bottom-line benefit. Chris Mulvihill, manufacturing director at EMS Manufacturing, for instance, set the scene by describing how implementing Exel’s EFACS E/8 ERP system “has really changed how we do things. The customer base wants speed, more than we’ve ever experienced before,” he said. “We’re now having to supply customers on timescales that you’d associate with a distributor, not a manufacturer – from six weeks, down to just four hours, if required.” Claire Stillie, information systems programme manager at paving manufacturer Marshalls, highlighted how the company had worked with trusted partner eBECS to replace a highly complex IT environment – characterised by multiples instances of Baan, Sage, Opera and ManMan – with a “single version of the truth: Microsoft Dynamics AX.” Similarly, Graeme McNaught, project planning manager at fire-control radar systems manufacturer Selex Galileo, a former BAE Systems business, described how a clever use of SAP’s project capability underpinned the entire company. “The whole business is run as a series of projects, with 4,0005,000 active at any one time – even the canteen is run as an ongoing project,” he enthused. Did it work? The compelling contrast between a complicated-looking ‘before’ slide and a much simpler ‘after’ slide told its own story. Impressive, too, was the keynote presentation by Peter Robinson, head of information systems at organic yoghurt manufacturer Yeo Valley. Most ERP projects, he noted, can be

Secrets of a perfect implementation

RP Connect events provide a powerful opportunity to hear first hand just how manufacturers have gone about the business of implementation – the good, the bad, and the ugly. Ugly? How about a massive power failure at the very point of the ‘live’ switch over? As Claire Stillie, information systems programme manager at paving manufacturer Marshalls explained, things don’t come much uglier than that. And yet, she reported, the implementation survived the trauma. How? Built-in resilience, and careful planning, she told a packed room in a wide-ranging presentation that covered a group-wide, multi-site implementation of Microsoft Dynamics AX across widely-divergent business models. Planning is vital, echoed Michael Mortiboys, commercial manager at printing machine manufacturer Muller Martini, reminding delegates of Winston Churchill’s famous observation that “failing to plan is like planning to fail.”

Three of Mortiboys’ favourite planning tips? We’re now having to supply customers on timescales that you’d associate with a distributor, not a manufacturer Chris Mulvihill, Managing Director EMS Manufacturing

First, adhere as closely as possible to the as-provided business processes that come with the system. (“It’s not that there’s a right way, and a wrong way. There’s a right way, and a costly way,” he explained.) Second, every implementation team should have an ‘objector’. Someone whose natural inclination is to ask awkward questions. Third, “think outside the box: spend time considering tomorrow’s requirements, not just today’s.” Remember, too, to think about risk – ideally through formal risk management processes, added Peter Robinson, head of information systems at organic yoghurt manufacturer Yeo Valley. As with the power cut at Marshalls, some risks are unlikely, but that doesn’t mean that they won’t occur. Finally, David Warburton-Broadhurst, CIO at telematics manufacturer Masternaut, added: “Keep it simple. Break the project down into bite-sized chunks, and don’t reinvent the wheel. The vendor will have invested a lot of money in developing the in-built processes contained in the ERP system - don’t think that you will automatically be able to come up with better ones. You probably can’t.”

’s next ERP Connect event will be held in October 2012. For delegate information please contact Benn Walsh (b.walsh@sayonemedia.com) on 0207 401 6033 For sponsorship opportunities please contact Henry Anson (h.anson@sayonemedia.com) on 0207 401 6033 counted as failures – delivered late, over-budget, and with constrained functionality. But it doesn’t have to be that way, he explained. And just six reasons account for two-thirds

of all such failures. His message? Follow proven processes, manage risk, regard ERP as a business-wide project – not an IT one – and use your best people. @themanufacturer

Microsoft recently partnered with the Manufacturing Technolgy Centre to drive innovation in UK manufacturing

Silva M tongued salesman Can Microsoft’s $9.5bn annual, global R&D budget help the UK economy by providing IT solutions with the best customer feedback in the world? It’s Mike Silva’s job to try to make that happen. Interview with Will Stirling.

ike Silva landed at Heathrow Airport in February with a huge job to do. As a United States lifer, Microsoft UK’s new boss of Manufacturing and Utilities was new to the country and British business culture. The UK was in a double-dip recession, many companies were still reluctant to invest heavily in new business systems and the business IT market was intensely competitive, with the Cloud helping to ‘democritise’ big, expensive ERP (enterprise resource planning) solutions for many users. Unfased, he is fronting up with characteristic American ‘can do’. Mr Silva had been through a big reappraisal of the core approach to business when he joined Microsoft six years ago. “I joined at a fascinating time,” says the ebullient Silva. “Microsoft was saying ‘We think we listen to our customers, but we could do a much better job.’ Others, including my previous company, were also going through that. We started to scrutinise customer issues and macro trends more closely.” Mike Silva is responsible for the largest of the three Microsoft industry sectors in the UK – financial services, retail and consumer goods and manufacturing and utilities – and is overseeing Microsoft UK’s nascent involvement with some new partnerships, including the Manufacturing Technology Centre in Coventry.

“I’ve met several global CIOs in the UK, and there seems to be a fairly unique approach,” he says. “They see themselves as business people who happen to run IT organisations. That’s a refreshing perspective and a self-fulfilling one. I’m mainly about business, I can get myself in trouble with technology. But it’s a huge asset to have the two.” The next step is to find out more about the infrastructure of British industry and the key relationships between some of the prime stakeholders. “There are three core principles to my job: stewardship, assessing the macro perspective

Two thirds of that senior roundtable took the approach of cloud first, that is: “We’ll put it in the cloud unless there is a small box of key reasons why we can’t

IT in

manufacturing: Interview: Mike Silva, Microsoft UK

and feeding the R&D engine,” says Mr Silva, who joined Microsoft from Ingenix, a division of United Healthcare. Stewardship is a strong pillar of the whole Microsoft enterprise thanks to the philosophies of its founding father, Bill Gates. Taking this principle forward Mr Silva is reviewing appropriate opportunities where the company can help projects and foster better community engagement. The second and third principles go hand-in hand. Microsoft Corporation, with revenues of nearly $70bn a year, has an annual R&D budget of $9.5bn. Think about that for a minute. Microsoft’s R&D spend is bigger than the market capitalisation of 42 companies in the FTSE-100. R&D on this scale needs great market intelligence to be effective. Silva has to collate the intelligence which the companies in his sectors feedback to Microsoft. For example, which aspects of MS Dynamics work well, should be faster and could be turned off. “We’ll take global market trends and see how they apply to the UK.” says Silva. “We feed this perspective back to the product and services groups, and R&D teams. This helps to influence product design development, the Roadmaps i.e. where we are going, and to customise our software.”

Mike Silva on: Microsoft Partnerships Microsoft has tens of thousands of partners around the world; how do you make sure the customer benefits fully? “We work hard to know absolutely where we begin and end. If we walk in to a meeting and the partner is just walking out, that’s a miss for the customer. So we have purposeful strategy with our ISV and SI community – joint knowledge sharing between ourselves and technical partners like Siemens or Rockwell, for example.”

Microsoft recently embarked on a strategic partnership with the Manufacturing Technology Centre in Ansty Park, Coventry. More details will follow on themanufacturer.com.

Some CIOs of large UK companies see themselves as business people who happen to run IT organisations. That’s a refreshing perspective Mike Silva, Sector Director, Manufacturing, Utilities and Services

Do CIOs sit on the board in UK companies? “There is one global logistics company and several big defence contractors who I know are IT-led businesses, who see IT as a board function versus an operational cost. [In some companies] there is a culture that understands that IT enablement is different to IT cost structure. It’s Gartner’s maturity model. The US is different to the UK but I can’t yet assess the situation here.” “This is not sequential anymore, its parallel – your IT and your business architecture have to be aligned, one has to help the other to innovate and chase new ideas. We help customers access new markets, for example using the cloud helps customers to innovate up, and to roll out change without the heavy cost component structures that some new market strategies demand.” What’s in the Cloud? “There has been a paradigm shift. I hosted a roundtable recently with a mix of vertical companies. Two thirds of that table took the approach of cloud first, that is: ‘we’ll put it in the cloud unless there is this small box of key reasons why we can’t’. “While the UK is a little behind the US, how international the company is will define cloud adoption more. Cloud should improve global communication, but globalisation fractures some of this thinking – laws and regulations on IP rights and disclosure issues are complex from country to country. For a UK-only business it should be a little easier because the regulations are the same across all counties. “Microsoft has helped the Boeing [the 737] and defence

contractors test products in different parts of the world using cloud, linking parts of the world who communicated less frequently before. From a macro perspective, the economy and technology are pushing manufacturers faster on things like cloud and product lifecycle management.” BIG Data – Business Intelligence “The complication is that big data is both structured and unstructured. It’s important to understand what this means to extract value from BI. We also see manufacturing companies starting to take influence from customer- and social-influenced design. Real time or structured data reaches out to influence product development. Today you’re dealing with so much data, from so many sources. How do you meta-tag it, how to make it meaningful? Humans can’t do this anymore, it’s too much.” Working with MS Consumer; Workforce issues “We’re fortunate. We’re in a unique position to maximise earnings from one uniquely dynamic world combining consumer and commercial. The millennials [demographic] are pushing us to do that too. They have a different demand in the work environment and their customers have different challenges to keep good employees. “We’re learning a lot from the millennials, the Generation X-ers. Microsoft has recognised the need for a flexible workforce and is developing tools to enable more flexible work practices. Also we need to innovate and improve our own business to keep the best employees when competition for good people is fierce, especially in software development.” Look on .com for more from Mike Silva on workforce issues, collaboration and manufacturing strategy. @WRStirling

ITnews... BUSINESS INTELLIGENCE

Smart tractors for smart growth Mike Evans, research director for industry analyst firm Cambashi asks if government really understands the pervasive use of IT skills in modern manufacturing. Just after the local elections in May, David Cameron and Nick Clegg gave a press conference at the Fiat-owned New Holland tractor plant in Basildon. The message they were trying to convey was that they understood the electorate wants growth from engineering and manufacturing not financial services. The choice of Basildon is interesting. It is an excellent plant. Last year, it won ’s World Class Manufacturing Award and the Manufacturing in Action Award. It exports much of its production. It has apprenticeships and jobs for recent graduates as well as experienced engineers. Agricultural machinery is a highly cyclical business. New machines trump older versions by scaling up power and functionality and are crammed with software and electronics. For example, the gear boxes are push button operated, with some 20 gear ratios. They are smart tractors, and the design and production process is changing to reflect this. So too are the jobs of the designers and manufacturers involved. In 2009, this affected the Basildon plant in the form of 150 redundancies. Roberta Barba, spokeswoman for

Case New Holland, said: “All product engineering functions actually based in Basildon, with the exception of a restructured Product Evaluation Group, will be absorbed and consolidated into other Case New Holland and Fiat Group product development organisations. Workers in the manufacturing industry know that being restructured is an occupational hazard. Their general engineering and production skills need updating to transfer to design and operate new design and production processes. One example is testing for Noise Vibration and Harshness (NVH): now assessed before manufacture on a simulator rather than on the first prototype tractor. Both this and the last government said they wanted a bigger manufacturing sector. However, when it comes to the strategy to achieve this it’s much more difficult find joined up thinking. It is not clear to what extent our rulers understand how manufacturing has changed. Do they realise that future manufacturing employment is mostly for knowledge workers, well versed in simulation technologies, CAD/CAM and other IT tools - whether on the shop floor or in the design office? What support is provided to manufacturing workers who want to maintain their skills to keep up with this trend? What support is given to manufacturers who want to invest in training their workforce?

SAP’s in-memory database technology gains traction, with new applications and new users. The highlight of enterprise computing vendor SAP’s annual Sapphire user conference in Florida in May was a series of releases and announcements regarding the company’s HANA in-memory database.

Eight new specialised HANA applications were announced, covering areas such as sales pipeline analysis, planning and consolidation, and cash forecasting. Increasingly, too, SAP is aligning HANA with the buzz surrounding ‘big data’, and announced that the latest HANA service pack now provides integration with Hadoop, the increasingly popular open source framework for large scale data processing. In addition, SAP demonstrated a 100 node HANA cluster, built with IBM hardware, that had 100TB of RAM, 4,000 Intel CPU cores and 150TB of solid state disk memory. Costing $4 million for the hardware alone, the cluster is reportedly the world’s largest in memory database system ever assembled. Can’t afford $4 million? Helpfully, SAP also announced that HANA developer instances can now run on Amazon’s web services platform, although moving to the cloud involves a performance degradation of around one-fifth. And customers are increasingly signing up for HANA: also announced at Sapphire was a deal with motor racing firm McLaren Group, which will use HANA technology as a testbed to highlight how the technology can help small and medium-sized manufacturing businesses. “At McLaren, we’re accustomed to handling big data,” said Ron Dennis, executive chairman, McLaren Group. “On every lap of every Grand Prix, qualifying/practice session or test run, our Formula 1 cars generate vast quantities of performance data. Our ability to process that data and act on it rapidly is crucial to creating the kind of prescriptive intelligence that enables us to transform the outcome of races.” McLaren Group is to try to prove the application of SAP’s HANA technology in a medium-sized business environment

IT in

manufacturing

BUSINESS CONTINUITY

Only half of industrial firms confident of disaster recovery abilities. Despite 2011 experiencing record levels of environmental, economic and political upheaval, only 53% of manufacturers are confident that they could recover quickly in the event of a disaster, according to survey by business continuity specialist Acronis.

Many still use multiple disparate tools spread across multiple sites, with just over a third of manufacturers relying on three or more different solutions to protect their critical data. Such solutions may also be employed for diverse tasks, such as data backup, system imaging, patching, migrations and testing. This can lead to mistakes and inefficiencies, said Acronis. David Blackman, general manager for Northern Europe at Acronis said: “The pressures on the industrial sector are escalating. It has a reputation for quality management, optimisation and automation, yet it’s clear that its backup and DR strategies are not keeping up.”

PLM

What is PLM and is it for you? The Manufacturer and Oracle will host a webinar on Wednesday July 4 at 12.30pm looking at The Real Value of Enterprise Product Lifecycle Management (PLM). This half-hour webcast will address the key elements of a successful PLM approach which can help tackle the challenges found in complex manufacturing supply chains. Who should register? If your role is in: Product Development, Research and Development, Supply Chain, Procurement, IT, or Management then this event is for you. To register for the event visit: www. themanufacturer.com/oracle-and-the-manufacturer/ Oracle has extended and developed its PLM applications portfolio to create applications for full, enterprise-scale PLM throughout the product value chain. Oracle PLM products are fully scalable and suitable for mid-tier firms through to multinational organisations. For more information visit www.oracle.com

ITNIBS New mobile printer solutions from Brother boost warehouse and logistics productivity Printer manufacturer Brother is expanding its range of mobile printing solutions to support logistics and warehouse workers who require high quality on site print-outs in busy, fast paced environments. The company’s new RJ 4030 and RJ 4040 models are claimed to provide a robust, durable mobile print solution, while withstanding harsh conditions. With print speeds of 127.4mm/second and high level of connectivity (the RJ 4040 has USB, serial and wireless communications protocols), warehouse and logistics employees can produce high quality print outs, wherever they are working from.

Oxford Instruments opts for Infor Oxford Instruments, a provider of high technology tools and systems for research and industry, has selected Infor’s Infor10 ERP Business suite of applications to support its global operations. Infor10 ERP Business, formerly known as SyteLine, is an ERP solution specialised for the hi-tech companies, and will be integrated with Infor10 PLM Discrete PLM solutions to help Oxford Instruments track, manage, monitor, and analyze products throughout the product lifecycle.

Workforce Management helps beat sports-mad skivers With Euro 12 out of the way, the Olympics coming up, the cricket season underway, and attention already turning to the new football season, employers might like to bear in mind the results of a survey from workforce management IT firm Kronos. A significant number of UK employees – a shocking 24% - admitted to calling in sick, so they could stay at home and watch or attend a sporting event. A further 23% said that they had called in ‘sick’ the day after a sporting event – either because they were up late watching it, or hungover after celebrating it.

RedPrairie introduces enhanced product suite to improve supply chain visibility and execution New releases from RedPrairie Corporation, the global supply chain and retail technology provider, provide enhancements to supply chain execution capabilities that are already among the most advanced in the world. Enhancements include new integration capabilities; global labour standards compliance and enhanced support of industry standards such as GS1 barcoding requirements, VMI, VAT, GSIN, SSCC and others; and a new traceability offering.

Have your say at www.themanufacturer.com

Professor Brian Cox will answer delegates’ questions at The Energy Event 2012

Slashing energy costs: a manufacturing masterclass Concerns over rising energy costs topped the Institution of Mechanical Engineers’ 2012 survey of the most worrying issues for UK manufacturers. Stepping into the breach, The Energy Event 2012, last year shortlisted for the UK’s Best Trade Show Award, aims to clarify this challenge and put delegates in touch with the right solutions for their businesses.

he 2012 event will cover manufacturing but also stretch across industry and commerce, making it one of the most relevant exhibitions to all energy users in the country. With bigger seminar theatres, better networking areas, a networking dinner, and more European and market leading speakers among the benefits for show visitors this September, it stands to be a bigger and better event than ever before. Opportunities abound for manufacturers to network while a mix of exhibitors means that those interested in a wide range of subjects along the supply chain will be well provided for. The Energy Information Theatre, hosting seminars and speakers throughout the event, is a superb resource for energy managers with keynote speakers offering a perfect opportunity to better understand the Government’s approach to energy efficiency and likely direction of future legislation. Speakers include: Trevor Hutchings, head of strategy and delivery, Energy Efficiency

Preview The Energy Event 2012

Deployment Office at DECC; Chris Pook, deputy director green economy, Department of Business Innovation and Skills; and Phil Wynn Owen, director general, International Climate Change and Energy Efficiency, DECC. Another highlight is the opportunity to hear from James Woudhuysen, Professor of Forecasting and Innovation at De Montfort University, who will express his frank view of the future of energy, including the fact that power cuts are coming, the fallacy of smart meters and green jobs, and why subsidies don’t work. Visitors will also have the chance to hear from Professor Brian Cox (pictured) and Alastair Campbell – both there to answer the fundamental to most challenging questions about the connections between science, politics, spin and business. Last year, the average visitor to The Energy Event represented a multinational company with a turnover of more than £69m, with nearly a quarter generating at least £25m annual revenue. Smaller companies with less than 25 employees accounted for a third of all attendees, highlighting the importance of energy and its implications for UK and international businesses of all sizes. Visitors this year will once again benefit from the high calibre and wide range of exhibitors who will showcase their latest innovations and newest FC-HALF-PAGE-PRESS-AD-230512_Manufacturer_PrintReady.pdf products - including suppliers like E.ON and

npower, brokers such as BIU and M&C, and ancillary product and service providers such as Spirax Sarco and t-mac. Two notable new exhibitors for 2012 include Scottish Power and WINGAS. In an additional development, this year’s Energy Event will sit alongside The Renewables Event (RWM) – catering to onsite energy generation – and the long established RWM in partnership with CIWM, which will run concurrently in neighbouring halls. The three shows have a natural crossover and are expected to attract more than 20,000 visitors and play host to over 800 exhibitors. Alison Jackson, managing director, The Energy Event, said: “Energy is a major consideration for manufacturers. We have an exhibitors list that will ensure that innovative and cost effective solutions are showcased at The Energy Event. It is a great 1 23/05/2012 09:47:53 opportunity for not just seeing

Manufacturing plant ﬁnance up to 100% LTV.

With over 800 exhibitors these events are a ‘must visit’ of the manufacturing industry calendar

what is available in terms solutions and technology but to also demonstrate the strides taken by manufacturing and major energy users to make energy saving possible for businesses of all sizes.” Jackson claims it is this breadth of appeal that has allowed the The Energy Event to become the most influential energy event in the UK. The Energy Event will take place at the NEC Birmingham on September 11-12. To register your free place or for more information about the show, please visit www.theenergyevent.com/PR

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Have your say at www.themanufacturer.com

2 1

What a

Messe

Hannover Messe is a vast, bewildering playground of manufacturing technology. Will Stirling joins Siemens at the 2012 Messe, observes Germany’s devotion to engineering first-hand and experiences the powerful China connection. Image 1

f you haven’t been to the Hannover Messe, you should go. Technophobes, perhaps don’t bother. But if you need, or have an interest in, manufacturing technologies, it is a giant Aladdin’s cave of solutions to improve your factory’s productivity and reduce carbon emissions. Here you can eyeball and buy sensors, drives, motors, cables, industrial switches, linear motion gear, metrology, lightning monitoring systems, ‘flying boxes’, and even visitor-counting equipment for your own trade show back home. The sheer array of industrial solutions is staggering. The Messe (meaning a fair) combines eight trade fairs in one location: Industrial Automation Energy MobiliTec Digital Factory Industrial Supply CoilTechnica IndustrialGreenTec Research & Technology

Festo’s SmartInversion Cube drew crowds Image 2 Industrial Automation trade fair at Hannover Messe 2012 Image 3 There was a high concentration of Chinese visitors at Hannover Messe 2012 Image 4 One of Siemens’ lavish stands at Hannover Messe, featuring a Red Bull Racing F1 car

Hannover’s conceptual themes this year were energy saving solutions and China, the partner country for Hannover. The single common proposition for the solutions here is saving money and time. And money, in many cases, equates to energy. “When you’re developing technology that addresses a range of industrial control applications, you have to bring in innovation that competes at every level and every year brings benefits to the users of the technology. The pressure is to reduce the cost,”says Brian Holliday, divisional director, Siemens Industry Automation and Drive Technologies. In the Industrial Automation Hall, 1,040 companies from around the world sit alongside global giants like ABB, Bosch and Siemens. The Mittelstand is everywhere. Mid-sized, familyowned German companies, who are relatively unknown as brands outside Germany – firms like sensor manufacturer ifm electronic and cable maker Lütze – occupy vast, expensive stands you might associate with a +£2bn company, an endorsement of the size of the German market for these products. Hannover is an international show, but this is also the biggest trade fair where German companies deal with each other.

China goes green The Chinese came to Hannover in force this year. Prime Minister Wen Jiabao opened the Messe jointly with German Chancellor Angela Merkel.

Eventreview Hannover Messe 2012

Hannover Messe: Die Tatsachen

5,000

Approx exhibitors from

countries

>185,000

visitors

Product innovations and solutions for industrial applications

500 Nearly

Chinese exhibitors

>100 billion yuan (Eu11.4bn) China’s planned investment in making electric cars You have to bring in innovation that competes at every level and every year brings benefits to the technology’s users. The pressure is to reduce the cost Brian Holliday, Siemens

products like ball valves, solenoids, valve terminals, controllers and pressure transmitters. A big crowd thronged Festo’s lavish stand to marvel at ‘SmartInversion’, aka ‘the flying box’. Part of its Future Concepts series, Festo develops new or relatively unknown motion and drive concepts. SmartInversion is a flying object filled with helium, which is similar to a chain, and moves forward by inverting itself – the rhomboid-shaped device folds out and in on itself. The intelligent combination of very lightweight design, electric drives and open-loop and closedloop control makes endless, rhythmically pulsating inversion in

€

German companies are increasing investment in China

€

China: focussing on environmental protection and clean energy

€

Nearly 500 companies from China exhibited, a big increase in comparison to 2010 (294). Not including China, the number of exhibitors from Asia matched 2010. “We have to compare even years because the exhibitor programme features different sectors in odd years,” says Brock McCormack, spokesman for the organisers Deutsche Messe AG. The main theme of China’s showcase was intelligent solutions for sustainability, branded “green + intelligence”, a reflection of the Messe’s own main theme, “greentelligence.” China used this trade fair, the world’s biggest, to project its devotion to sustainability and intelligent green technologies which, the organisers say, should underscore its attractiveness as an international trading partner and foreign direct investment location. China and Germany have developed an important symbiosis. This was prescient given the eurozone’s woes. Bosch Rexroth AG chose Hannover Messe for its annual press conference and chairman Dr. Karl Tragl and Fo-Wai Lau, managing director of Bosch Rexroth in China, jointly presented the company results – sales up 27% on 2011 with almost 3,500 additional jobs created. Some companies are simply not seeing signs of the double-dip. Certainly the number of Sino-German summits and events underlined the bonds being forged between the two manufacturing powerhouses. The German-Chinese Future Forum, the China-Germany SME Forum and the German-Chinese Conference on Electrical Mobility were just three of the 12 different themed Germany- or EU-to-China events over the show’s five days.

>600 companies registered for Hannover 2013 to date

the air possible. Visitors gawped in wonder at the floating shape achieving a state of sort of neutral buoyancy in the air. “The mechanical principles of rotation and linear motion are the basis for many solutions in automation and Festo’s engineers work with universities, institutes and industrial partners to transfer mathematical and scientific principles to industrial applications,” said a spokesman.

Siemens makes its mark It’s hard to miss Siemens at Hannover Messe. The engineering group’s exhibition space is some 4,400m2 – 1,800m2 bigger than the entire

Festo’s SmartInversion Festo is big in automation technology and claims to be the world market leader in basic and advanced technical training. Its pneumatic and electric drive technology covers a big range of

Magic: Siemens managed to juggle a lot of balls at the Hannover Messe

Event review: Hannover Messe 2012

documentation

the plant operator? “The innovation, for a machine builder for example, who might be equipping a machine to operate outdoors, or in a brewery or a dairy where the machine could be hosed down, is that the controller can cope without having to be built into a control panel,” says Siemens’ Brian Holliday. “The benefit to the machine builder is in not requiring a separate control panel that’s been manually wired with more components. In the operation, you’ve also got an intelligent device that reports diagnostics as a whole. You get uptime benefits with fewer components so your mean time between failures improves, and you’re making use of the diagnostics and remote intelligence that you gain from bolting this onto the side of a machine rather than paying someone to build extra panels. “That innovative step means a machine builder lowers his costs, improves reliability and has a competitive edge to pass on to his customer. Our product, in this case, is merely a component in that system.”

COMOS is plant asset management software that connects planning and operating environments for more efficient work flows as well as energy management. It interfaces with PCS7, the Plant Wide Process Control System, during operation of the plant. The term “as built documentation” used to be popular, says Heinz Eisenbeiss, head of marketing and promotion, Siemens Industrial Automation Systems. “It’s not ‘as built’ now, its ‘as is’ documentation. It’s real-time.” “For Comos to work best, you can’t have sequential projects – all activities must work in parallel,” says Herr Eisenbeiss. “When you design the flow of material and energy inside your process [with Comos], you are not just making a drawing; you’re creating objects in the Comos database. These objects become more detailed throughout the project – you move from a process flow scheme to D&ID – the objects become rich with more detail, where each can be navigated. The automation and electrical criteria are also being designed within here – as soon as the object is created, you can start working on hook-up diagrams and wiring. There is a hierarchy, objects within objects, depending on the complexity of your assembly. “The key point, though, is that control functionality is directly related to all the process information. By specifying it all within Comos you have all the information that you need to do programming. So why not have an interface to do that automatically? We now have that as a product. We generate all the software in a system called PCS7 automatically via the interface.” “This has to work in both directions,” Eisenbeiss explains. “As soon as you go to commissioning and start-up you make changes, which are made in the engineering of PCS7. Changes made in PCS 7 during plant commissioning are fed back to Comos to update your documentation. This works over a bidirectional data interface between the two.” It is a version control loop that improves data integrity. “This is a really common issue in a manufacturing environment; where’s the single version of the truth; does this data actually reflect what’s going on in my plant or my product?” adds Holliday. The software was born in the pharmaceutical industry, to answer its high regulatory needs, but Eisenbeiss says there is clear economic value-add. “When you generate software automatically you can save about 30% in engineering cost directly, and that inherent data integrity clearly gives a lot of time-saving.” @WRStirling

Plant Asset Management – “As is”

Go to www.themanufacturer.com to read more about Siemens’ solutions at Hannover Messe.

This is a really common issue in a manufacturing environment; does this data actually reflect what’s going on in my plant or my product Brain Holiday, Siemens, on plant asset management

Coiltechnica trade fair in the next door hall. Siemens’ main stand in Hall 9 is a giant, open-plan ellipse, telling an oval-shaped story of the fully integrated, automated business; from design, PLM (product lifecyle management) and planning, through process control, automation and energy management to material handling and distribution. All bases are covered. The stand explains Siemens’ Totally Integrated Automation, or TIA, philosophy.

Two of Siemens’ myriad solutions on show: Control with diagnostics The functional appearance of many products belies multiple benefits to the user. The Simatic ET200 Pro is a very small, ruggedised and highperformance I/O system with IP67 degree of protection. An I/O control system controls the inputs and outputs to your process, interfacing with the incoming digital and analogue signals. IP means ingress protection, in this case its submersible to one metre. The ET200 Pro controls signals and gathers diagnostics. What does this mean for

UnIvErSITIES supplement With UK firms facing more competition from overseas than ever before, there is a real need to optimise the relationship between universities and industry. The Manufacturer explores the diďŹ&#x20AC;erent ways for companies to tap into the technology and skills they need through collaboration and partnership opportunities.

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Introduction

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ABB

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The University of Durham

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The University of Sunderland

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The University of Hudddersfield

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The University of Cambridge

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The University of Warwick

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The University of Covenrtry

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The University of Loughborough

Introduction UnIvErSITIES supplement

InTrODUCTIOn

BrIDgIng THE gAP – THE rELATIOnSHIP BETWEEn UnIvErSITIES AnD InDUSTry

he Manufacturer’s report on the link between academia and business comes at a time when industry comments that it is difficult to access the skills needed to sustain productivity and create growth. Bridging the gap between educational institutions, students and industry to ensure that research is accessible and properly matched to specific industry needs is vital.

In an ideal world there would be no obvious gap between our universities and industry. Academics and industrialists would move frequently and seamlessly between the two; every university would fuel networks of Professor Fred countless spin-off companies and students would enter the workforce armed with Maillardet is a Fellow all the practical knowledge they need to of the Institution of hit the ground running and drive British Mechanical Engineers manufacturing forward.

(IMechE) and currently chairs its Education Advisory Group.

The UK has many examples of this ideal becoming a reality. The royal Academy of Engineering’s (rAEng) visiting Professors Schemes are encouraging senior engineers across the country to become involved in the teaching process, while Cambridge’s hugely successful ‘Silicon Fen’ is filled with spin-off companies from the neighbouring university. The Institution of mechanical Engineers’ Formula Student competition gives thousands of students every year the chance to get real-world, practical experience with the help of over 200 volunteers from industry.

universities to get their funding, encourages universities to appoint staff primarily on their research record irrespective of whether they have ever actually worked in industry. We need industry to step in. Engineers working on new technologies and practices need to share that crucial knowledge with the next generation. One tried and tested way to make this happen is for local companies to provide real industrial projects for students to address in design studies during their early years or final year undergraduate project. Using company staff to supervise and assess these projects not only ensures that the students enter the workforce with the latest practical knowledge, but also helps to forge fruitful links between potential employees and the local business community. But we also need to see academics moving the other way. In continental Europe it is common to see professors holding industrial directorships or advisory roles, yet this is still surprisingly rare in the UK.

yet, for the most part, the gap between universities and industry in the UK remains frustratingly wide. Ever since Finniston’s 1980 Engineering our Future report, engineering degree courses have included ‘engineering applications’ work to better prepare students for a career in industry. However, due to the rapid changes taking place in many technologies, engineering departments are finding it increasingly difficult to demonstrate the best current industrial practice to students.

Bridging the gap between universities and industry can build a relationship in which everyone wins. Lecturers and researchers have access to the latest industrial best practice while manufacturers can ensure the next clutch of graduates walking through their door have the skills and training they need. The UK boasts one of the world’s most advanced manufacturing sectors and some of its best universities. Together they can both achieve even more.

reflecting industrial trends in teaching is made all the more difficult when coupled with another worrying trend in our universities – more and more full-time academic staff in engineering departments across the country have little or no industry experience. The government’s new research Excellence Framework, one of the primary means for

Fred Maillardet Fellow of the Institution of mechanical Engineers (ImechE)

UnIvErSITIES supplement

ABB

InDUSTry InvESTmEnT In UnIvErSITIES

he £1m partnership between ABB and Imperial College London set to last 10 years has supported a new carbon capture pilot plant.

Robot-maker ABB has invested close to £1m and signed a 10-year agreement with Imperial College London – so how will each party get their monies worth? Tom Moore speaks to both parties as hands-on teaching moves up the agenda to bring industry into UK universities

The plant, which has a capacity for 50 kg/hour capture of CO2, is part of the College’s £8.9m ChemEngSpace Project for undergraduates and forms part of the department’s new international summer school for chemical engineering.

Using a combination of ABB’s instrumentation, drives, motors and process automation equipment, the control room provides students with hands-on experience of pilot-scale industrial plant operations and is the only facility of its kind at an academic institution in the world. The agreement between ABB and Imperial gives the university access to the most advanced control and instrumentation technology available from a number of suppliers, as well as life cycle services

and support for the installation. With communication protocols including Foundation Fieldbus, Profibus DP and PA and wireless Hart all being utilised, the technical team at ABB explains that although a plant wouldn’t have this, the pilot has been deliberately designed in this way so that students can compare different suppliers. The control and instrumentation technology is used to measure and monitor conditions around the plant and to ensure optimum performance of ancillary equipment such as pumps and valves through accurate and energy efficient operation. Students are able to test various scenarios for capturing and storing carbon dioxide in an industrial process, building a skill set in the UK that will help to capture growth in the environmental technology market. In return, ABB has access to the carbon capture pilot plant for its own use and will use the facility for customer demonstrations and training, staff learning such as inter-divisional training, hands on experience for its apprentices and product testing and software evaluation.

UnIvErSITIES supplement

ABB

The extended operator workplace (EOW) lies at the heart of the ABB Control Room which acts as the nerve centre for the carbon capture plant

“The pilot plant is a global showcase for the latest and best process control and instrumentation technology in use at one of the world’s leading engineering institutions,” says martin grady, general manager, Oil, gas and Petrochemical - UK, ABB. “We will be able to trial new technology in a low risk, well-managed environment to gather Beta site test data. It is a valuable space for us as it is not high on our customer’s list of priorities to let us come and test on site.” He continues: “It gives ABB a great platform to train its staff and customers on a real pilot plant. There are very few industrial companies that have utilised all the leadingedge technology that Imperial College is featuring within this pilot plant.”

By investing in the pilot plant and the awards, we are effectively investing in our own future, by making sure that ABB will have ready access to a stream of bright young engineers Martin Grady, General Manager, Oil, Gas and Petrochemical - UK, ABB

With skills in high demand, grady says that ABB’s involvement will help to boost the profile of a career in control and instrumentation engineering among chemical engineering graduates at a top university. The investment is seen as a shop window for presenting the opportunities available throughout ABB, particularly at one of its main execution centres for oil, gas and petrochemical automation in St neots, Cambridgeshire and its measurement products activities in Stonehouse, gloucestershire and Workington, Cumbria. “By investing in the pilot plant and the awards, we are effectively investing in our 4

Some of the instrumentation from ABB Measurement Products in use on the plant

own future, by making sure that ABB will have ready access to a stream of bright young engineers,” comments grady. “One of our biggest problems is finding enough suitably qualified engineers to fill the ever growing range of opportunities we can offer. Obviously if engineering in the UK flourishes, then we flourish too.” grady asserts that there has been a dearth of skills in the UK following the exit of big apprenticeship schemes during the 1980s but senses a renewed commitment from the top down. “The move by ABB is partly in response to government initiatives aimed at rebuilding the manufacturing base of the UK and re-establishing the important contribution that engineering makes to people’s everyday lives,” he says. “The UK needs to increase its base of skilled engineers if it is to grow its manufacturing sector towards its potential. We believe that the pilot plant will support education by giving tomorrow’s engineers hands-on exposure to real-life technology. This pilot plant really brings the real world into the classroom for the first time. Imperial has named the hi-tech centre-piece of the installation the ABB control room, which builds awareness of its “brand name” and technologies among a global audience. “Our aim is to use the plant to create a lasting association between the real-life problems that students will encounter once they qualify and the technology and capabilities available from ABB that can help solve them.”

Dr. Daryl Williams, director of the pilot plant project at Imperial, wanted to make the student experience more relevant to industry so the university redeveloped it curriculum. “It’s not always clear that students get good lab experience in schools and colleges,” he says. “There is a lack of hands-on teaching within higher education so Imperial made the decision to invest in a discovery space. The first thing we do is build the foundations and teach the basic skills that all students should know.” The lively academic explains that students and parents want to know what they are paying £9,000 a year for. “There will be real questions about whether students will want to come to universities to do their education in the future as they can go online and download the entire lecture course for free. We need to make sure there are good reasons for engineers to come and study, and these include, working with other students, opportunity to engage with industry, work with staff and hands-on teaching.” While he argues that scientists and engineers are not as proactive as others when it comes to promoting their profession, he maintains that universities need to recognise the skills needs of manufacturers and supply those it. “Engineering is more than just a book. When engineers move from here to industry they need to have worked with valves, sensors and motors so that it isn’t all new to them when they turn up for their first day at work.”

UnIvErSITIES supplement

THE UnIvErSITy OF DUrHAm

SPInnIng TOP

GRoWTh In sPIn-oUT ACTIvITy SPin-OutS

2008/09

2009/10

GROWth

new

215

273

27%

Active

1,311

1,340

Employment

14,180

16,942

19%

turnover

£1,5bn

£1,7bn

17%

investment

£700m

£1.1bn

63%

Source: www.spinoutsuk.co.uk

While UK universities are internationally renowned for their education quality the relevance of their research to industry and their ability to produce IP with commercial punch has a more questionable reputation. But academics are now addressing this weak spot head on with a generation of spin-out companies creating jobs at a time of high unemployment.

SPin-OutS

A report from the university of Cambridge called university spin-out companies: Starting to fill the evidence gap found five instances where the spin-out route was appropriate. (1) For platform technologies. (2) Where the inventors are very keen to commercialise the technology themselves. (3) When the idea needs to attract substantial investment to develop intellectual Property relating to the technology for subsequent licensing. (4) When the technology is not readily licensable. (5) For a generic technology with many different applications.

The physics department at the university of Durham

he chances of success for many startups are low – the Federation of Small Businesses says one in three fail in their first year. But university spin-outs are often dealing with the added uncertainty of launching new technologies and products, which may not have mature supply chains or an established customer base.

FEAR oF RIsK TAKInG

Andy Todd, co-founder of the Commercial Edge Initiative, an academic investment broker says that there is a poor return on the sums of money spent on research in the UK. “Between £4-6bn has gone into research at UK universities over the last five years, producing a return of £84m. This is a failure. Universities need to share commerce and business acumen to build value.”

Investment firms like the Commercial Edge Initiative are vital to funding technological innovation. The British government puts a vast amount of funding into research, but there is a shortage of UK investors financing the transfer of that research into innovative products and services.

X-RAy vIsIon

Dr Arnab Basu, CEO at digital colour x-ray imaging firm Kromek, says that the company’s strategy of hiring experienced staff as soon as possible helped to commercialise its technology. Kromek commercialised technology developed in the physics department at Durham University over a 20-year period. Boasting a management team with over 100 years combined experience in relevant commercial and technical fields, the company has now applied its expertise in Cadmium Telluride to make x-ray products for medical imaging, security screening, industrial inspection and space exploration - allowing for very precise identification of materials. Basu explains that Kromek wouldn’t exist had it not been for the support of Durham’s University’s Technology Transfer Office during the early days and that spin-outs naturally seek further collaboration with academic institutions.

Between £4-6bn has gone into research at UK universities over the last five years, producing a return of £84m. This is a failure

Andy Todd, co-founder of the Commercial Edge Initiative

According to the Institute of Patentees & Inventors, the loss to the UK economy from intellectual property created in Britain but developed abroad is up to £174bn a year. However, there are a growing number of academics who are smashing the idea that they don’t know how to commercialise intellectual property.

After starting out as a team of three, the company successfully secured finance from a number of sources and now employs 70 people; often returning to the university to recruit from the same department from which it was spawned.

According to the Higher Education Statistics Agency (HESA), the number of formal spin-outs is relatively unchanged but the level of investment raised by these firms increased from £700m in 2008-09 to £1.1bn in 2009-10. This is helping to drive commercial activity and boost the number of people employed by spin-out firms.

To replicate the company’s success regarding the creation of jobs in the local area, it is important that young people are able to draw on the kind of advice and support that can help to commercialise their knowledge. 5

UnIvErSITIES supplement

THE UnIvErSITy OF SUnDErLAnD

TAKIng On LOCAL SKILLS SHOrTAgES TM: WhAT ARE yoU doInG To AddREss LoCAL sKILLs IssUEs?

dd: We need to make sure that we are thinking about the skills needed in the local economy early enough because of the timescales involved in changing or bringing in new academic programmes.

david donkin, assistant director for student recruitment and business partnerships at the University of sunderland discusses the pressing skills needs within manufacturing.

One of the pressures that we have at the moment is trying to get people in schools to choose STEm subjects so that they keep their options open for some of the possible careers. maths is a subject we are particularly concerned about; if people are not doing enough maths then they are not going to get very far.

TM: hoW ARE yoU PLAnnInG FoR FUTURE sKILLs nEEds?

dd: We tend to plan for the next 3 to 5 years. As I go around the region I hear a lot about the potential shortage of engineers, partly because of the aging profile of engineers. They won’t be naturally replaced with the level of people studying engineering. We have the same level of uptake from UK students but growing interest from overseas. We need greater uptake. COuntRy OF DOMiCiLE

2009/10

2010/11

% ChAnGE

China

56990

67325

18.1%

india

38500

39090

1.5%

nigeria

16680

17585

5.4%

united States

15060

15555

3.3%

Malaysia

14060

13900

-1.1%

hong Kong

9945

10440

4.9%

Saudi Arabia

8340

10270

23.1%

Pakistan

9815

10185

3.7%

Thailand

5505

5945

8.0%

Canada

5575

5905

5.9%

Source: HESA Students in Higher Education Institutions 2009/10, 2010/11

The university of Sunderland has a close working relationship wit h nissan’s Queen’s Award winning plant nearby

TM: WhAT ABoUT WhEn sTUdEnTs hAvE GRAdUATEd – WhAT ARE yoU doInG To AId ThE TRAnsITIon FRoM ThE LIBRARy To ThE FACToRy?

dd: We offer internships as we think it’s helpful for young people to get six months experience to demonstrate to employers that they can work. We didn’t expect the sheer number of people that were kept on by the companies offering internships, with 84% of the 120 graduates securing long-term graduate employment upon completion.. We will increase the scheme as far as we can but the ErDF funded programme, which is specifically to work with small companies, is capped at 50 a year.

TM: ARE APPREnTICEshIPs And dEGREEs In CoMPETITIon oR CAn ThEy CoMPLEMEnT EACh oThER?

dd: Skills shortages can be immediately solved at apprenticeship level. They are the people that are needed in the economy, people that know businesses from the bottom up. We would like to see a progression so that they do an apprenticeship at college but might start a foundation degree that we work in partnership with the college on. There are elements of this taking place at the moment but to convert that into a full honours degree you would have to come to university full time. One of the things we looking to do is continue this learning at degree level on a part time basis.

UnIvErSITIES supplement

THE UnIvErSITy OF HUDDErSFIELD

The EPSRC Centre for Innovative Manufacturing in Advanced Metrology changing the face of precision engineering

Our world-leading research in metrology, machine tool accuracy and diagnostic engineering is creating novel technologies for the next generation of metrology instrumentation and applications, leading to significant improvements in manufacturing quality and productivity.

PUSHIng InDUSTry’S nEEDS In ACADEmIA

otted around the country are a series of collaborative hubs between industry, government and academia called EPSrC centres. For many years manufacturers have complained that government doesn’t understand the needs of industry but the sun is now rising for a new dawn.

will help precision engineering companies to improve quality and productivity. Current technology typically involves making a component, taking it off the machine at the end, before using another piece of equipment to inspect it. This means that faults are only detected once the full cost of manufacture has been spent to create the product. Continuing to send a product through the production line that already has a fault

wastes time and costs money. There is a massive financial benefit to being able to spot and pull a product from the line at an earlier stage so the Centre’s research team are in the process of developing new sensors, instruments and techniques that will enable component measurement to take place during the manufacturing process. There are some serious challenges in achieving this in terms of the robustness and levels of accuracy required in a production environment, but solving these problems will deliver a step-change in manufacturing quality, efficiency and accuracy, and that has a real impact on competitiveness and economic success.

With an initial five-year plan in place, the EPSrC Centre for Innovative manufacturing in Advanced metrology at the University of Huddersfield has received around £9m worth of investment. With £4.5m from the EPSrC, the main UK government agency for funding research in engineering and the physical sciences, and £1m coming out of the university’s own wallet, the fact that 13 industrial partners have stumped up £3.5m already is testament to the sector’s belief that there will be commercial benefits to emerge from these centres. The Huddersfield team aim to develop new measurement technology and techniques that

Demostrating measurement on a 5-axis machine tool

See www.hud.ac.uk/cimam for more information.

Come and meet us at Farnborough Air Show in the Innovation Zone, 9-15 July 2012 and learn how we can help you gain a competitive edge.

THE UnIvErSITy OF CAmBrIDgE

MEt students on a visit to motorsport company Prodrive. Students visit a number of firms, representing a diverse section of manufacturing in the uK Photography: Cambridge University Institute for Manufacturing

COLLABOrATE TO InnOvATE

t is essential that skills, knowledge and technology are transferred between universities and manufacturers. Whatâ&#x20AC;&#x2122;s clear is that there needs to be an open relationship in order to do this effectively. A protectionist stance from industry around data only limits the success of such relationships. An open approach will help to inform the research and skills that come from academic institutions that will ultimately benefit manufacturers and universities alike.

Leading figures at the University of Cambridge come together to assess the success of university-industrial collaboration at present and discuss how it can improve in the future.

MEAsURInG CoLLABoRATIon

As manufacturers will know, success needs to be measured. With key performance indicators measuring everything from energy usage to the number of near miss accidents in UK factories, replicating that science to identify problems in the relationship between academic institutions and industry is crucial if things are to improve. Without this, there will be a lack of coordination in addressing the issues that exist, and curb the innovation that comes from UK universities.

49,550 Total Higher Education Qualifications obtained in 2010/11

Figures from the Higher Education Statistics Agency for 2010/2011 show that the number of engineering students has been rising year on year with 92,580 full time undergraduates enrolled on engineering courses in 2010, a 3% increase on 2009/2010. With universities investing in new facilities for engineering students and the subject gaining greater traction with the profile it is now being given within the media, there are reasons to be hopeful that more students will enter industry.

measuring collaboration, something very dependent on ideas, and spotting where technology can be implemented, is not so simple. Dr Tim minshall, senior lecturer within the Institute for manufacturing (Ifm) at the University of Cambridge, explains that this is very much a multi-stakeholder problem. â&#x20AC;&#x153;For each of the stakeholders there will be different measures of success for 8

UnIvErSITIES supplement

different types of relationships over varying timeframes. These will have a range of ‘hard’ and ‘soft’ aspects,” he says.

LonG-TERM nEEd

How successful is the relationship at present? “There are some great examples of collaborative success from various universities,” says minshall, giving the longstanding relationship between rolls-royce and the University of Cambridge as an example. The collaboration involves over 100 staff and graduate students in the Energy, Fluids and Turbomachinery groups of the Department of Engineering at Cambridge University, producing the integrated approach to research necessary to apply technology to aircraft engines.

recognition of the importance of industrial engagement has increased over the past ten years Dr Tim Minshall, Senior Lecturer within the Institute for Manufacturing (IfM) at the University of Cambridge

“Success for long term strategic relationships such as these combines joint involvement in long-term research projects that may drive the emergence of new industries and redefine the current technology landscape. Success may also be the development of trusted relationships that can be called upon in response to particular emerging issues,” comments minshall.

CASE StuDy LEvEL: Corporate OBjECtivE: How to maximise the engineering contribution to the business not just within individual sites but across the enterprise. ACtiOn: Configured an organisational modeling tool in partnership with BAE Systems to paint a clear picture of what capabilities it should be good at to support the delivery of business strategy based on critical success factors to the business. RESuLt: Aided the company’s Engineering Function in setting organisational development implications in response to the Corporate Strategy, including the increased element of service provision.

Services, a wholly owned subsidiary of the university, states: “A lot of work here is industrially sponsored but it remains important to ensure that research doesn’t sit on the shelf. One of our roles is to disseminate this knowledge.”

A BAd REPUTATIon

Despite having some of the best universities in the world, commercialisation activities in the UK have long been thought of as poor compared to the industry-focused higher education system in the US. However, minshall contends that “recognition of the importance of industrial engagement has increased in the past ten years,” with a rise in the volume of activities and in the implementation of structures and frameworks supporting research commercialisation. “Adding application to the traditionally core missions of research and teaching in the late 1990s started to heighten this recognition,” he says. minshall concludes: “Instilling a culture in universities where the application of knowledge is given equal importance to the generation of knowledge would be the most important way of enabling the on-going transfer of technology.”

There is a need for long-term agreements between individual companies and universities so that trusted relationships are established. This would reduce the time taken to negotiate collaborative partnerships, which can presently take months or even years to complete. The Technology management lecturer argues that such partnerships also provide a mechanism for helping firms recruit talented researchers, and for academics to ensure that their research is impactful and relevant. When such research is produced, British manufacturers should seek to invest in finding, developing and deploying the fruits that can be plucked from the UK’s high quality universities. Andrew gill, a principal industrial fellow within Ifm Education and Consultancy

Students undertaking a practical team exercise at the ifM’s state-of-the-art Automation Lab Photography: Cambridge University Institute for Manufacturing

UnIvErSITIES supplement

THE UnIvErSITy OF CAmBrIDgE

However, following the development of policies that encouraged universities to exploit their own inventions in the 1990s, much of the focus on the third mission – application – was on encouraging spin-off and start-up activities within and around universities. minshall explains: “This was a valuable thing to stimulate but may have led to an overemphasis, in some cases, on creating new firms rather than building relationships with existing firms. In addition, some of the metrics used for assessing third mission encouraged the development of a short-term transaction rather than a long-term relationship based approach to working with industry.”

TALKs nEEd To TAKE PLACE

Since then the increasing number of technology intensive and technology contingent firms has led to more interest in working closely with universities. So how can the relationship be improved? “There needs to be more open conversations about opportunities for collaboration, raising awareness on both sides of what universities can and can’t offer, what industry does and doesn’t need, and the wide range of possible modes of engagement,” says minshall.

It remains important to ensure that research doesn’t sit on the shelf Andrew Gill, Principal Industrial Fellow at IfM Education and Consultancy Services

He adds, “Instilling a culture in universities where the application of knowledge is given equal importance to the generation of knowledge would be the most important way of enabling the ongoing transfer of technology.” The ideal scenario is jointly developing areas for collaboration that lead to academics accessing the resources they need to undertake relevant research, and industry partners having relationships with academics that fit within a broader open innovation strategy.” Andrew gill asserts that there can be great value in working with the university’s Education and Consultancy Services arm which partners in a very different way from the major consultancies, and can provide benefit from taking on leading edge, new and fresh thinking. 10

A femtosecond titanium Sapphire Laser, used in the direct machining of micro and nano components, at ifM’s Centre for industrial Photonics Photography: Cambridge University Institute for Manufacturing

Having worked with the Technology Strategy Board on establishing national manufacturing competencies, gill says “the ability to identify, realise and add value from technology is a very substantial competence in itself.” The University of Cambridge helped identify which areas of activity the UK might develop in order to most effectively support high value manufacturing. gill, who has over two decades’ experience of working within industry, spending 18 of those years at energy giant Shell, says that the TSB Hvm Catapult is now working to build this support on a cross-sector basis.

ThE vALLEy oF dEATh

“There is this ‘valley of death’ that people talk about a lot and that’s to do with timeframe,” says gill. “Technological development takes place within a long timeframe and industry in the current climate, and perhaps in many cases more generally, focuses on the shorterterm, but wishes there was a pipeline coming through to meet longer-term needs. Linking the development pipeline to profitable product and service opportunities is the key in this respect” The report, titled A Landscape for the Future of High value manufacturing in the UK is

now helping to shape a long-term vision that will help to forge a closer link between the research base and industry. “High value manufacturing is a good expression of things that are hot topics for a lot of people in a lot of sectors. Everyone is going for high value. We didn’t try to pick sectoral winners; we looked at which races to be in from the perspective of national capabilities.” According to the report, these areas include: energy generation, biotechnology, aerospace, through-life engineering and the design and manufacture of lightweight vehicles, structures and devices. Demand for successful collaboration between universities and industry might be expected to be high in such areas. Brian Kirby, research & innovation manager at renewable energies firm Alstom grid UK, illustrates this point when he says that his firm is “looking to reduce risk by getting universities to take research on for us.” Incorporating collaboration into a more flexible innovation strategy could help to develop new products and technology in these sectors and elsewhere. But ultimately, universities must be able to provide a good return on investment just like anything else.

UnIvErSITIES supplement

THE UnIvErSITy OF WArWICK

Supply Professionalism Programme – Open to New Companies Developed in partnership with the process industry, WMG’s Supply Professionalism Programme is now the key educational platform for supply managers at AstraZeneca, Syngenta, PZ Cussons and Fujifilm. Your staff could join them. Delivered on a part-time, modular basis, it is a globally applicable education programme enhancing integrated contributions throughout the supply chain. Delegates include: Global Project Leaders, Site Managers, Factory Managers, Process Technology Managers Dedicated modules are delivered at the University of Warwick: ■ Strategic Decision Making ■ Personal Leadership and Change

Networking and cultural learning opportunities with peers are invaluable, with delegates coming from a variety of countries including The Netherlands, Indonesia, and Nigeria.

■ ■ ■ ■ ■ ■

Operations Management and Lean Supply Chain Supply Chain Strategy Compliance Management Performance, Evaluation and Control Product Lifecycle Management Innovation 2009

COLLABOrATIOn TO ExPLOIT HIgH vALUE mAnUFACTUrIng In THE UK

arwick manufacturing group (Wmg) at the University of Warwick has a thirty year track record in collaborative r&D, delivering numerous innovations. These developments have been successfully embedded within products and processes in a wide range of sectors and the Wmg centre within the High value manufacturing Catapult will build on this research pedigree. Wmg’s success is the result of cutting-edge research and knowledge transfer and working collaboratively with companies to reach a common goal. The centre is primary focused on the international challenge of developing low carbon mobility. It has with a whole systems approach to exploiting leading edge capability in lightweight product and system optimisation. Structural optimisation, the manufacture and performance of advanced materials and energy

The vehicle Energy Facility can test any hybrid vehicle architecture

storage and management will all be exploited at the unique vehicle energy facility run by Wmg and a new £3m building in the pipeline to test, research and develop energy storage. These areas will be supported by the development of digital simulation technologies that will address key priorities in the technology roadmaps of the automotive, commercial vehicles, rail, marine and consumer products sectors. The Wmg centre will bring together global companies and SmEs, enabling them to access cutting-edge equipment and expertise, as well as new funding streams that would otherwise be out of reach. It will act as a bridge between academia and manufacturing by engaging the UK’s industrial community in applied r&D projects.

Wmg

is one of seven centres that makes up the High value manufacturing Catapult, which includes the Advanced Forming research Centre (University of Strathclyde), the Advanced manufacturing and nuclear Advanced manufacturing research Centres (University of Sheffield), the Centre for Process Innovation (Wilton & Sedgefield), the manufacturing Technology Centre (Universities of Birmingham, Loughborough and nottingham and TWI Limited) and the national Composites Centre (University of Bristol) .

See www.go.warwick.ac.uk for more information.

To find out more about the Supply Professionalism Programme please visit our website or call us w go.warwick.ac.uk/wmgptmasters/bespoke e wmgptmasters@warwick.ac.uk t +44 (0)24 7652 3976

Professional learning and development for Engineering and Manufacturing professionals Credible training, taught by leading experts from a reputable institution. Coventry University offers a wide range of expertise for engineering and manufacturing professionals working across many sectors, including specialist areas within the automotive, aerospace and advanced manufacturing sectors. Acclaimed as the number one UK university for working with business (HE-BCI 2009/2010), Coventry University has a proven record of delivering real impact to its clients. We develop and deliver both bespoke short courses and tailored programmes of learning. By working closely with our clients, each of our courses are infused with crucial industry and company specific insight as well as cutting-edge knowledge from our relevant experts.

We have particular expertise in the following areas: • Low carbon vehicles • Intelligent transport systems • Metrology (including NPL training and measurement uncertainty) • Engineering management (including lean processes)

Pro dev fessi pro elo ona bes gram pmen l pok mes t ava e trai and ilab ning le

The course has totally changed the way I approach Metrology and Measurement, not just for my company but for its customers too Fd in Metrology student, Technical Support Engineer

Current courses available: • Business Improvement Techniques • Lean and Just in Time – JIT • Current State Value Stream Mapping • Future State Value Stream Mapping • Introduction to production planning and control – PPC • Introduction to Total Preventative Maintenance – TPM

• Introduction to Statistical Process Control – SPC • Quality Function Deployment – QFD • Kaizen • Failure Mode and Effective Critical Analysis – FMECA • Introduction to A3 Problem Solving

For more information about our courses, visit our website or contact the CPD Unit Email: cpdenquiries@coventry.ac.uk Tel: +44 (0)24 7688 7798

www.coventry.ac.uk/cpd www.coventry.ac.uk/clearlycoventry

UnIvErSITIES supplement

COvEnTry UnIvErSITy

TM: WhAT ARE yoU doInG To ATTRACT LoCAL sTUdEnTs To ThE UnIvERsITy?

mB: The university is keen to engage with the local community and prides itself on the partnerships it has within Coventry. We work with many local schools and colleges to ensure young people know about the benefits taking STEm subjects. We are also working with many key local employers on student placements, research opportunities and professional learning and development programmes for their workforce.

BUILDIng A BETTEr FUTUrE Professor Mike Blundell, associate dean for enterprise at Coventry University’s faculty of Engineering & Computing discusses the university’s £160m investment in new facilities.

he stunning new £55m centre for the Faculty of Engineering and Computing at Coventry University will be innovative both inside and out. Its visually stunning, futuristic exterior is set to mark it out as an iconic building at the heart of one of the UK’s most historic engineering cities and the university hopes that the use of space will encourage group learning.

TM: WhAT Is ThE MIssIon BEhInd ThE nEW CEnTRE?

mB: The £55m investment is proof of the university’s commitment to the STEm subjects and will provide an innovative and technologically enabled environment that stimulates creative thought, team work and interdisciplinary collaboration.

TM: WILL yoU BE RUnnInG Any nEW CoURsEs WhEn ThE BUILdInG oPEns?

mB: The new building is on track for completion this summer and will open its doors to new students in September. We are currently developing a suite of new professional development courses and are keen to engage with industry to inform the content of these. The new engineering and computing building is not just a new space for existing approaches to learning and teaching but a building design focused on the provision of learning spaces for the delivery of a re-defined teaching pedagogy - ALL (Activity Led Learning). It truly is a building designed around the learning experience.

As a result of our interaction with businesses, both big and small, we have gained a fantastic reputation for real business impact and won the Times Higher Award for most Enterprising University in 2011. This means that the education we are offering our local students is informed by industry, preparing them for a career where they are ready to hit the ground running and tackle the key challenges of tomorrow.

TM: WhAT CAn yoU oFFER dIRECTLy To MAnUFACTURERs?

mB: We are recognised as the number one university for working with business, assisting over 9,500 SmEs and 500 large and global companies each year. Our partnerships include both global companies and SmEs across a range of sectors including automotive, aerospace, digital, ICT, finance, health, government and construction. In 2009/2010, 37% of SmEs working with a university chose to work with us rather than one of 197 other higher education institutions in the UK. We have an award winning focus on supporting unique and exciting start-up companies, helping them to shape the business models, products and technologies of the future. As a forward-looking, modern university, we are advising how to develop and sustain the right set of skills for the workforce of the future. Our professional development courses, often bespoke for our client’s specific needs, are in high demand both in the UK and overseas. We recently launched our first professional development programme thE nEW BuiLDinG OFFERS OvER in manufacturing 3,000SQ² OF LABORAtORy AnD management techniques, WORKShOP SPACE inCLuDinG: kick-started by a workshop Mercedes GP Petronus sub sonic wind tunnel; with lean guru, Professor AvL engine dyno test cell; Peter Hines. We created and are delivering the world’s first Foundation Degree in metrology. metrology is one of our most successful training programmes within the manufacturing community as we offer practical, expert knowledge and training.

Composites facility; high performance computer; Eight tesslar Cryogenic Magnet; Metrology facility; Flight simulators and air traﬃc control suite; Electronics laboratories; Machinery and metal workshops; Welding facility; Rapid prototyping and desk-top milling Shaker rig; Motorsport centre.

LOUgHBOrOUgH UnIvErSITy

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 Technds Systems, risk & reliability Thermofluids

UnIvErSITIES supplement

LoUGhBoRoUGh EnGInEERInG: ACAdEMICALLy ChALLEnGInG – IndUsTRIALLy RELEvAnT

The Wolfson School of mechanical & manufacturing Engineering provides one of the country’s best 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.

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 four Innovative manufacturing Centres with a total concurrent value of £30m+. 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 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 is focussing on the area of High value manufacturing (Hvm).

For more information go to: www.lboro.ac.uk/departments/mm 15

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R E C R U I T M E N T A N D R E T E N T I O N s u p p l ement

With over 50% of manufacturers expecting to increase the size of their workforce in 2012, The Manufacturer takes a comprehensive look into how to recruit and retain the skills that companies need. Finding the right person · Funding apprenticeships · Improving workforce relations · Training existing staff · Adopting flexible work patterns · Regional skills gaps

RECRUITMENT AND RETENTION

Foreword Tom Moore introduces ’s 2012 Recruitment and Retention supplement.

John Morris, chief executive of JAM Recruitment, said that manufacturers are “not seeing margins depleted by excessive upwards pressure on wages but there remains a significant disparity between the salaries that manufacturing businesses are prepared to offer, and how much candidates think they’re worth.”

Flexibility to switch products With the UK unable to compete with many countries on

ince the economic downturn, businesses have

cost, firms have responded by moving their competitive

had to become a lot more mindful of short-term

offerings towards innovation, new products and

issues such as cash flow and fluctuating demand

services. With many manufacturers forced to adapt to

for products.

seasonal demands, it is clear that firms can benefit from

The knock-on effect is that the importance of flexibility

within the workforce has risen significantly. Manufacturers need to work with employees and recruitment agencies

having a multi-skilled workforce to call upon so that factories can swiftly switch between products. Flexibility for the employer and employee may

to establish a flexible workforce as market instability has

mean different things, but with retention levels

resulted in a wariness to commit to permanent additions.

correlating strongly with the amount of training on

Yet firms need to be able to call on a capable skills base

offer at a firm, arranging time out for learning can

at all times. Businesses need to be able to flex so that

benefit both parties. The timing of skills delivery

workforces are at optimum levels when compared to order

is vital to achieving success in fast-paced markets.

books. The ability to ramp up production at short notice in

The rising number of apprenticeships (p 78-80),

order to exploit niches in the market and react to customer

encouraged by new government initiatives (p.81),

needs is vital.

will help to refresh the skills base and increase

The good news, according to Tony Burke, assistant general secretary at Unite the union, is staff are happy to be flexible if overtime and changing shift patterns are

the UK’s industrial capabilities – hopefully before competitive advantage is lost. However, the Government’s proposals for flexible

communicated effectively (p 84), pointing to the sacrifice in

parental leave have been less than welcome. The

pay and hours that many accepted as evidence of this.

Government is considering offering an additional

Data from 305 settlements compiled by manufacturers’

seven months of parental leave to be shared between

organisation EEF and recruitment firm JAM found a

parents in addition to the existing six month period of

prevailing sense of economic realism on both sides of the

leave for the mother and six weeks for the father.

negotiating table with the average pay settlement for the period still below the long term average.

Is this a case where social interests conflict with the needs of business? Equality in parenting arrangements is a laudable aim but the offering will

Employment Statistics: Nine out of 10 companies said they needed to be flexible in order to respond to their customer needs Over 50% of manufacturers said that they needed to switch between markets or have short order books A quarter of firms use temporary or agency workers but only 13% of companies make changes to permanent staff

be disruptive to business and make it difficult to provide appropriate cover. The recently released Beecroft report (p18), which supports slashing employment bureaucracy, recommends that parents should not be able to take flexible leave from work until 2017, when it hopes that Britain’s economy and public finances will have recovered.

to respond to changes in demand 80% of firms said that co-operation between management and their workforce has helped in achieving the flexibility they needed over the past three years, with 94% of companies commenting that this will be vital in the next three years Some 30% of firms think the UK environment provides the flexibility that their company needs and 41% disagree Source: EEF Report: Flexibility in the Modern Manufacturing Workplace

Tom Moore, Reporter This supplement accompanies The Manufacturer’s Flex for the Future conference, which will take place on 13 June in Birmingham. www.themanufacturer.com/flexibleworkforce

DON’T JUST CALL US ABOUT A JOB. CALL US ABOUT A CAreer ThAT wiLL BOTh ChALLeNge AND rewArD yOU. Working as a recruitment consultant for Michael Page Engineering & Manufacturing will: Offer you an opportunity to apply your technical know-how to a fast-tracked commercial role within the world of recruitment. • Use your developed problem solving skills to achieve consistent eye-catching results against challenging business targets. • give you the support and career progression you’d expect from a brand ranked 39th in the 2012 Sunday Times Top 100 Companies to work For.

Find out how some of our most successful consultants made the move into recruitment by visiting our website: www.michaelpage.co.uk Contact our MD, Colin Monk on 07920 580596 or email colinmonkuk@michaelpage.com

Work for us. Grow with us.

Specialists in Engineering & Manufacturing Recruitment 162 offices in 34 countries | www.michaelpage.co.uk

RECRUITMENT AND RETENTION

Hiring for a role that may change Tom Moore discusses the core issues in manufacturing recruitment with Colin Monk, managing director for Engineering & Manufacturing at recruitment firm Michael Page.

: What recruitment trends have you observed over the last six months and what are the

200%

Job Flow

concerns of manufacturers?

The regional increases

recruitment are availability and

in job flow within

Scotland

Michael Pageâ&#x20AC;&#x2122;s Engineering & Manufacturing business for the first three months of this year compared with the corresponding period in 2011.

CM: Key issues in manufacturing attraction of the best candidates. With restrained levels of domestic consumer demand, many manufacturers are scrutinising their production processes to make them as lean as possible in order to gain a competitive edge. As a result, many of our clients, keen to make the most of opportunities in growing sectors,

27%

20%

are investing in automating their

North East

processes and implementing training programmes to up-

North West

skill their workforce so they can

17%

perform multi-tasked projects.

Yorkshire

With streamlined processes on the factory floor, manufacturing companies across the board are investing in additional engineering professionals that

54%

work around quality, meaning

Midlands

that the war for top talent is as competitive as ever.

53%

South West and Wales

: Is the number of jobs

0.05% South East

available in the sector going up or down? CM: Job volumes are up within Michael Pageâ&#x20AC;&#x2122;s Engineering & Manufacturing business in

RECRUITMENT AND RETENTION

2012 compared with the same period last year. We have seen a 40 per cent increase in number of jobs

Market Insights

available with the most significant increases recorded in the aerospace sector [up 88 per cent], materials [78%], electronics [69%] and automotive [45%].

More than half of respondents expect their employee numbers to increase in 2012 88% of companies say that a candidate’s

: What disciplines are highly sought after at the moment and where are the gaps between demand and supply? CM: We are seeing a shortage of people who

alignment to team values was more important than simply their pure technical ability 32% of firms said promotion opportunities were the most important retention strategy, followed by

have two to four years post degree experience in

a comprehensive benefits package (23%)

production, operations, quality, engineering and

In 2011, 55% of all ‘quality’ jobs placed by

continuous improvement. Quality engineers are the most highly sought after including roles such as quality control, quality assurance, supplier quality, and quality engineering. In 2011, 55 per cent of all ‘quality’ jobs placed by Michael Page’s Engineering & Manufacturing business were in

Michael Page’s Engineering & Manufacturing business were in automotive and industrial manufacturing Source: Michael Page Engineering & Manufacturing Salary and Insight Report (February 2012).

automotive and industrial manufacturing. It’s not only the hard skills but also an individual’s

Candidates will always require a minimum

ability to interact with suppliers and customers.

technical ability but we are finding that most of

The interaction of people responsible for delivering

our clients would consider training a candidate if

projects and continuous improvement is vital as

there is a strong fit with the team. In the recent

customers want to feel confident in and understand

Michael Page Engineering & Manufacturing Salary

where their methodologies are coming from.

and Insight Report, 88% of respondents said that

The automotive industry has been leading the way in continuous improvement but companies

a candidate’s alignment to team values influenced recruitment decision-making.

in other sectors are now seeing the benefit of having dedicated staff in this area. This is changing

: Are you seeing a need for flexible and agile

the dynamic of the skills market and diluting the

management within senior positions?

qualities currently concentrated in one particular

CM: Appointments are still very much skill led but

area of the market so we need to see an increase in

flexibility of management style is having a major

skills in this area.

part to play when hiring individuals for senior level positions. How management deals with the

: Are firms more open to taking on staff with

flexible requirements of new market penetration,

lower skills sets and training new staff themselves in

new projects and slowdown of projects as well is

order to fill job voids?

increasingly important.

CM: Increasingly so. If packages being offered

Management has traditionally interviewed with a

are not attracting someone of the right seniority,

specific mandate and job specification when filling

primarily because of the tight market conditions,

roles within a company. What we are seeing now is

clients have to consider what else they can do

that the landscape is changing very quickly in what

to look at the long-term promotion of capable

is a turbulent economic environment. Managers are

individuals as well as how to initially attract them

thinking, “Yes, we are looking at you for ‘x’ but it is

and bring them up to speed.

quite conceivable that we are going to call upon you for ‘y’ as well.”

: Is it difficult to find skilled staff within growing

People managing staff on flexible contracts

sectors such as renewable energy and areas of high

have said that it can be a challenge to maintain

innovation?

motivation levels as there is a strong element of

CM: The difficulty level is dependent on the

uncertainty. Many understand that empathetic

specific technical qualifications and salary

management is required to try and be as open and

packages available rather than the sector. More

communicative as possible, particularly if hours are

often it is the inherent skill set and aligning

going to be reduced or there is a change in demand

values that underpin the challenge of selection.

that requires overtime.

N ationa l A p p rentice s hi p Ser v ice

Rolls-Royce apprentice in action

A new era for apprenticeships The manufacturing sector is completely dependent on apprenticeships and now, against the backdrop of an ageing workforce and growing demand for higher skills their importance has never been greater, says Tom Moore.

ince the economic downturn, the ability

demands and apprenticeships are a vital way of

of apprenticeships to improve Britain’s

achieving this,” he says.

skills base and increase the nation’s international competitiveness has been

increasingly lauded. Apprenticeships often lead to better staff retention

he understands that manufacturers are equally concerned by the quality of the training. “NAS is not

and workforce motivation than employment

only committed to increasing the number and range

straight from school or university. Employees often

of apprenticeships on offer, but also to ensuring the

start from a low skill level so there are continuous

quality of apprenticeships,” he states.

promotion opportunities as their career progresses.

Following a long period where manufacturing was

A sense of loyalty to the company that has trained

subordinated by the services sector, manufacturing

them is a common outcome of apprentice training.

has been earmarked by most commentators as

Nearly 49,000 people started an apprenticeship

a driver of growth. Everyone knows that the UK

in the engineering and manufacturing sector in

cannot compete with other nations on cost, so it is

2010/11, 11,000 more than more than the previous

vital that those people going into technical jobs in

year (Source: Semta). Of these, 65.6% were

industry, whether apprentices or graduates, have the

Intermediate Level Apprenticeship starts (Level 2),

skills to add value to and accelerate the advanced

the remainder were Advanced and Higher Level.

manufacturing sector.

David Way, chief executive of the National

The Government has introduced several initiatives

Apprenticeship Service (NAS), says that there is

here but there is no quick fix in a world that

a huge demand for technical skills in industry

increasingly demands instant results. Plans to

and that reviving the apprenticeship system will

increase the amount of Higher Level Apprenticeships

provide the impetus to get more young people

that go up to degree level, rigorous new standards

into work, in a sector that they may not have

and the launch of a new financial incentive for

previously considered.

small firms to hire their first apprentices are signs

“For a strong and growing economy we must have a high level of skills to meet employer

But Mr Way adds that, although the increase in the uptake of apprenticeships is impressive,

that government is finally listening to industry and understanding its long term needs.

N ationa l A p p rentice s hi p Ser v ice

New government funding is set to support

Government alignment with industry

thousands of new Higher Apprenticeships that

Following the introduction of the first ever statutory

last for between three and five years, enabling

standards for apprenticeships last autumn, the

employers, colleges and universities to deliver the

Government has introduced a minimum duration

advanced skills critical for growth.

of 12 months for all apprenticeships and actions to

Higher Apprenticeships

“An advanced economy needs advanced skills, so we want to improve progression routes through apprenticeships into higher level skills,” says Way. The funding is part of a £25m fund for Higher

drive up quality so that every apprenticeship meets rigorous minimum standards. “The vast majority of apprenticeships are excellent quality but we are raising the bar to ensure a first

Apprenticeships announced in July 2011. The

class experience for every apprentice and employer,”

first round of bids resulted in the development of

says David Way. The new minimum duration will

19,000 new Higher Apprenticeship places through

come into force for all age groups from August 2012.

250 employers. Semta, the sector skills council for science,

Measures have also recently been announced to make it easier for small businesses to take on

engineering and manufacturing technologies, has

apprentices, including the introduction of a new

led the development of the Higher Apprenticeship

financial incentive, administered by NAS, to help the

Framework, issued in April, which goes up to Levels

smallest firms recruit their first apprentices.

4 and 6, which can incorporate an HNC, HND or an Honours Degree. Despite the downturn, Bill Twigg, apprenticeship

Funding is now in place for those that have not employed an apprentice in the last three years and meet the eligibility criteria to benefit from

director at Semta, comments that industry must

a new grant called AGE 16 to 24. The National

also pull its weight if it wants manufacturing skills

Apprenticeship Service is now offering up to

to remain at the same level and expand in the

40,000 Apprenticeship Grants worth £1,500 to

future. “Apprenticeships provide real benefits in

SMEs, classified as those employing fewer than 250

terms of skills, productivity and motivation, but

employees, which recruit their first apprentice aged

only 11% of companies in our sectors currently offer

16 to 24 years.

apprenticeships,” he says. This raises the question ‘why?’ Are employers not

“Smaller firms have been deterred from hiring an apprentice due to perceived logistical, training and

taking apprenticeships because they are sitting on

administrative costs in the past but the new incentive

the fence, or are the apprenticeship places on offer

is encouraging greater involvement,” says Way.

not really well suited to these companies’ needs? Mr Twigg says that “the UK needs to develop higher level skills to compete globally, so this [low uptake] needs to change. This higher level

To find out more about AGE 16 to 24, go to www.apprenticeships.org.uk or call NAS on 08000 150 600.

apprenticeship in Advanced Manufacturing will give employers, particularly SMEs, something they really need and will encourage more apprenticeship starts. It is an important step in achieving our ambition to double apprenticeships at Level 3 and above across our sector.” Due to the nature of apprenticeships, there needs to be industry buy-in. Rolls-Royce introduced Higher Apprenticeships to their apprentice programme in 2006 to develop higher level technical skills. Graham Schuhmacher, head of development services at the global firm states that “the programme ensures a crucial supply of higher technician level skills into the company while participants have the opportunity to gain degree level qualifications and are being paid to learn alongside some of the best engineers in the world.”

David Way, NAS Chief Executive

N ationa l A p p rentice s hi p Ser v ice

Worldskills UK – The Skills Show NAS, in partnership with City and Guilds, will produce its Top 100 Apprenticeship Employers list for the second time this year to recognise those that have invested in the creation of high quality apprenticeship programmes. Chris Jones, CEO and director general of City & Guilds, hopes that this will encourage more

Top 100 Apprenticeship Employers 2012 will be revealed at the opening ceremony of a new annual showcase to celebrate vocational skills. Worldskills UK – The Skills Show, taking place between November 15 and 17 at the Birmingham NEC, will provide an opportunity for engineering and manufacturing sector employers to connect with the individuals they need to take UK manufacturing to the next level. Visitors to the show, which has City & Guilds as its premier sponsor, will be able to have a go at new skills, get careers advice and access apprenticeships or real job opportunities from employers and see the UK’s most talented apprentices and vocational learners demonstrate their skills.

firms to train an apprentice. “Top 100 Apprenticeship Employers is part of our Million Extra campaign and aims to inspire other employers to take on apprentices by recognising and celebrating those employers who set an exceptional example to other businesses,” he says. The winners of the National

To find out more about employing apprentices, call the National Apprenticeship Service on 08000 150 600 or visit apprenticeships.org.uk Find out more about The Skills Show by visiting www.theskillsshow.com Employers looking for advice and practical support to help start or grow their business can search online for “Business in You” or go to www.businessinyou.bis.gov.uk

Apprenticeship Awards and the

Apprenticeship Grant for Employers of 16 to 24 year olds Would you like your business to? • Increase productivity and efficiency • Develop a skilled and qualified workforce • Reduce training costs All of these could help your business through the tough economic climate. • Are you interested in recruiting your first 16 to 24 year old apprentice? • Do you employ under 250 employees? • Would you be interested in a recruitment grant of £1500?

If you are ready to recruit an apprentice call • The National Apprenticeship Service on 08000 150 600 • Or visit apprenticeships.org.uk for more information about recruiting an apprentice and the Apprenticeship Grant for Employer’s eligibility.

Apprenticeships deliver.

RECRUITMENT AND RETENTION

Are the pipes flowing? Tom Moore dives into the stats to find out if the skills industry needs coming and from where?

and result in long careers in industry. Over 75% of learners that start an apprenticeship within Semta’s sectors achieve their qualification, a rapid improvement on an achievement rate of 43.3% in 2004/05. The success rate of the Semta Apprenticeship Service has increased steadily over a four-year period. What is promising is that its 88% overall completion rate scores well against the national average of 77% despite having a greater number of long-term courses than other sectors. This indicates that people find an enjoyable and challenging set of skills when they train for a career in industry, providing a motivated workforce for the future.

he UK needs another 82,000 scientists, engineers and technologists by 2016

Struggling at the bottom

according to Semta, the Sector Skills

Growth in the number of apprentices being taken on has

Council for Science, Engineering and

largely come from big companies with plenty of resources

Manufacturing Technologies. With many of these

while more than half of all micro businesses, employers

needed to cope with the high number of imminent

with one to 10 employees, say that the recession has limited

retirements in the sector, apprenticeships can

or prevented them from taking anyone on.

provide long-term skills stability and a smooth

At a time of restricted cash flow, 43% of the 500

transition of skills between outgoing and incoming

managing directors surveyed by the award body for

generations. However, there has been an emphasis

industrial qualifications EAL cited the time needed to

on numbers over quality in the campaign to ramp

achieve results and the cost of training and managing an

up apprenticeship numbers. This has resulted in a

apprentice as reasons putting them off taking someone on.

sharper rise in level two apprenticeships starts that

“Micro employers make up around 90% per cent of all

level three, a disparity which must be addressed if

businesses in England and Wales,” states Ann Watson,

vocational work-based training is to fulfil its remit of

managing director of EAL. “Government initiatives, such

securing the UK’s manufacturing future.

as £1,500 payment incentive for businesses of up to 50

Not just a numbers game Alex Jackman, senior policy adviser at the Forum of Private Business, recently commented that

employees, go some way towards encouraging the wider use of apprenticeships but more needs to be done to support micro businesses.”

apprenticeships are being devalued with shorter

Retention rates

level two schemes that don’t offer the same value as

The emphasis on continuous improvement in manufacturing

longer courses.

means that the learning doesn’t stop at an apprenticeship,

A swift rise in level three apprenticeship starts

with firms spending around £4bn a year on training.

this academic year should help to dull the alarm

Employer demand points to a variety of needs from IT and

bells. However, start figures are not the end of the

CNC training to sales, marketing and presentation skills.

story. Courses need to be engaging, completed

Flexible top-up training can play an important part in refreshing skills that may otherwise be put off and increase

Engineering framework starts Level 2

retention levels with personal development. “There is a strong link between retention and

Level 3

appropriate training and development,” comments

All

Susan Evans, business development director at Semta. “According to the Chartered Institute of Personnel and Development, one of the top three causes for a premature departure from an organisation is the desire to learn new things. However providing time off the job for training can be a challenge, particularly in a lean manufacturing environment, so bite-sized chunks are helpful.” The challenge now is to focus on increasing the number of level three apprenticeship starts and find a way to engage with small firms, whether locally or nationally, so that skills aren’t absent at the bottom of the food chain.

RECRUITMENT AND RETENTION

Switching lanes John Bowan, head of manufacturing at Elevation Recruitment, tells Tom Moore how workers in declining areas of British industry are looking to jump ship and find roles in more buoyant sectors of manufacturing.

However many people are wary of switching jobs at a time of such uncertainty. “People are still cautious of the market so they’re not ready to leave their job,” says Bowan. “We’re seeing candidates staying in their roles for longer, taking more time over decision-making and looking at a business in more detail.”

Should I stay or should I go For those looking to recruit this is a major problem. However, there are those who see job insecurity not in moving jobs but staying where they are. There is a skills drain away from struggling sectors such as construction towards the buoyant power, aerospace and process industries. In Sheffield, Bowan notes that not only is construction looking less attractive, so are the sectors supplying it such as the steel industry. “It can be difficult to attract candidates for those sectors,” he says. “Some industries struggle to meet the wages paid

stablished to recruit for the financial services

within the process industries and aerospace. They will

industry, Elevation Recruitment launched its

struggle to attract the candidates they want as they

Engineering and Manufacturing division to

are competing directly with these industries. People

try and take a slice of growing demand in

looking to make that step into another sector tend to be open-minded about the idea of taking a step

the sector. “We have seen encouraging signs of growth from within the engineering and manufacturing sectors, notably at companies like AESSEAL, and the imminent

backwards in terms of job title in order to gain access to better prospects in the future.” Despite uncertainty for both employers and

arrival of Rolls-Royce at the Advanced Manufacturing

employees in the current economy, last month’s figures

Park near Sheffield,” says Greg Parkinson, managing

confirmed that the UK is now in the second dip of a

director at the Yorkshire-based recruitment agency.

double-dip recession, Mr Bowan asserts that most

This influx of jobs comes at a time when the UK has failed to replenish industry skills over the past decade. This has left employers fighting it out to

companies prefer to hire someone permanently rather than on a temporary basis. However, running counter to employer desires,

catch the limited amount of fish available in the

Bowan sees a developing trend for canny individuals to

skills pool. “There are individuals happy in their

look for lucrative short term and temporary contracts.

current job but their skills are in high demand. Some

Particularly those working in technical disciplines where

candidates are not aware of the opportunities in the

experienced professional are hard to come by. “There is a

market,” says John Bowan, head of manufacturing at

trend towards short-term and temporary roles in design,

Elevation Recruitment.

production engineering and continuous improvement that has emerged, post-recession,” asserts Bowan. Bowan is critical of the recruitment sector for not

Lack of candidates in: Metallurgy Process engineering within the chemical and oil industries Senior mechanical and electrical roles

understanding industry and the poor service that companies frequently end up with. “Many recruitment firms just send through a nominal amount of CVs and feel that is a worthy service for quite a large fee. There is a lack of value for money across the sector.” With fierce competition between recruitment firms, consultancy rates are dropping. Bowan says that this is not a reason for cheer, as many recruitment firms are not providing a good service. He says that more firms need to visit the actual manufacturing sites and understand how companies manufacture their products in order to match staff appropriately.

RECRUITMENT AND RETENTION

A united front Quick-fire Q&A on relations between management and the workforce with Tony Burke, assistant general secretary at Unite, the UK’s largest union.

TB: In manufacturing in Unite we have had more requests for dispute ballots than ever before, not all of which result in industrial action as settlements are reached. Workers don’t just wake up one morning and think – “I’ll go on strike!” Some employers act illegally, stupidly and in a cavalier fashion. Others refuse or offer pitifully low pay increases when the

: There is a massive skills gap in

colleges and academia and argue

workforce knows the company

industry - what more do parents,

that there is nothing wrong with

has done well and see senior

schools, universities and industry need

making things!

managers getting big salary rises

to do to fill this? TB: We have to get the message out

and riding around in brand new : How can industry make

cars. Workers are not daft - they

that manufacturing is high tech, highly

itself more attractive to workers

know when a company is doing

skilled and well paid. The problem is

so that it doesn’t lose skills to

well or doing badly. Many times

that schools don’t push young people

other sectors?

the company has misjudged the

towards manufacturing and parents are

TB: By paying decent wages

feeling among the workforce and

influenced by a media that still portrays

and salaries as well as providing

end up having to do a deal they

manufacturing as oily and dirty - in

worthwhile and secure jobs. It

could have offered on their own

dying industries. Nothing could be

is important that workers are

terms in the first place.

further from the truth.

kept informed and consulted on

When I talked to some apprentices

activities within the company.

aerospace sector, they considered

: Is enough being done to train existing staff? How do we compare

who had recently come into the : How have relations been

with other nations on this issue?

themselves to be paid well with decent

affected by the recession?

TB: Overall there are some

and safe conditions. They work at a

TB: Some firms used the

excellent companies that take

unionised company and received good

recession to drive down pay

on apprentices and train their

training. One of them described how

and conditions just because

staff. But too many companies

her brother had gone to university, got

they could. Other companies,

‘make do and mend’, muddling

his degree, was saddled with debt and

as witnessed in the automotive

through with an ageing

was working at a fast food outlet after

sector, asked for the help of the

workforce and then complaining

a series on low paid jobs. We have to

workforce to see them through

that they can’t get skilled workers

promote manufacturing in schools,

the worst, and they got it. Many

when they need them.

workers took pay cuts and

Too many companies ‘make do and mend’, muddling through with an ageing workforce and then complaining that they can’t get skilled workers when they need them Tony Burke, Assistant General Secretary, Unite

I can hear the howls of anguish

freezes, agreed to work longer

now but I believe that companies

hours, took fewer holidays

that don’t train, poaching their

and cut shift premiums. Those

skilled staff from other companies

that did that deserve to be

that do, should be made to pay

rewarded for their sacrifices. It is

via a levy. Something has to be

about working with your staff,

done for the long term. Germany

understanding their problems

has a training system that

and being prepared

works as a collective, regulated

to compromise.

by employers, the federal governments and the unions.

: There has been a rise in the

It has 1.6 million apprentices

number of disputes recently -

undergoing technical training

are workers being too demanding

and education over a three year

considering the fragility of

apprenticeship, with transferable

the economy?

skills. I think that is the way to go.

Manufacturinginaction Putting UK manufacturers under the spotlight Supported by:

F ood and drink

Thorntons 96 Factory of the month PERSONAL CARE PRODUCTS

SCA Hygiene 86 SCA Hygeine attained three accreditations in October last year: ISO 14001, ISO 9001 and OHSAS 18001 Find out why the company was awarded the SCA Eurostar award for best safety performance across all European mills Read about SCA’s acquisition history, specifically its purchase of five of Proctor & Gamble’s paper mills in the UK Find out how the company has used technology to increase productivity. The next increase in speed will come from equipment improvements, according to the Mill manager

Find out how Thorntons is dealing with its somewhat public problems, including the move from high-street to online retailing Thorntons is now selling more to supermarkets than directly to customers – this has seen production volume increase by 5-10% Despite the recession, revenue at Thorntons has grown consistently over the last five years, rising from £186m in 2007 to £218m in 2011

MEDICAL INSTRUMENTS

Verna Group 102 Read about the company’s transformation before 2005: previously it was was made up of seven divisions, but after a strategic review it was decided that in order to consolidate the business, the group should sell off six of their businesses Find out about the niche status Verna Group occupies in the healthcare manufacturing industry Read about how the company has used automation to retain business, and prevent manufacturing from going overseas

All companies featured will be entered into the

MIA Award 2012

SCA is the world’s third-largest supplier of tissue

Through M the mill and on a roll Being a jewel in the crown of paper making giant SCA is no mean feat and its Manchester Mill is just that. Tom Moore meets mill manager Colin Popplewell to discuss how it gained three of the toughest pieces of accreditation in manufacturing at one fell swoop.

anchester Mill lies deep in the industrial heartlands of the region, Trafford Park, an industrial estate that ranks as one of the largest in Europe, occupying an area of 4.7 square miles. The mill site stands tall among its neighbouring manufacturing heavyweights such as Wiseman Dairies, Tate and Lyle and Proctor and Gamble, the company that SCA purchased the site from just four years ago. Mill manager Colin Popplewell could be considered a stalwart of the site, a sturdy leader who handled its integration into SCA’s paper-making business portfolio and has been a guiding force in establishing the facility’s position as a manufacturing centre of excellence for SCA in Europe. The process takes paper pulp at one end and finishes with the final product in an integrated process that both makes and packages the toiletry products all on one site. Big brand names in the UK’s kitchen and toilet paper market such as Plenty and Cushelle start their lives this way here in Manchester, with production of supermarket home brands

Factory of the month SCA Hygiene

SCA Hygiene at a glance Location

CA’s mill on Trafford Park Road, Manchester, is one of five sites across the UK. The other four mills are based in Chesterfield, Derbyshire; Skelmersdale in Lancashire; Oakenholt in north Wales and Prudhoe in Northumberland.

Workforce Size

145 staff based in Manchester. There are approximately 720 employees across the five mills and a total of 1,300 in SCA Hygiene UK & Ireland.

Core Products

Cushelle toilet roll and Plenty kitchen roll.

for Asda and Tesco also taking place. The volumes are vast with 100% of the UK’s market for Plenty and 90% for Cushelle being manufactured by Popplewell and his team.

Safe hands “Whether it is safety or production results, we have consistently got better over the last four years,” says the mill manager. Popplewell has presided over Manchester Mill’s ambitious target to achieve three of the most stringent pieces of accreditation in manufacturing. Having already signed up to meet the high environmental standards set by ISO 14001and the join those ranked as having the best quality management systems in the world by going for ISO 9001, the mill added OHSAS 18001 to the list. The massive volume of work required to achieve this heady target began on July 3 2008 and the relevant awarding bodies granted all three accreditations in October 2011. “Going for the OHSAS 18001 safety accreditation was a conscious decision

from the UK management team,” says Popplewell, who says that the safety record has improved leaps and bounds in the three years since the acquisition. He places health and safety as the first thing on his list of priorities and something that is essential, not a choice, an approach that has seen the mill rank in the top ten of Confederation of Paper Industries’ (CPI) annual safety statistics for every year of SCA’s tenure. “It’s a moral thing more than anything else. There is a huge emphasis on proactive safety with a high number of risk assessments and quick risk predictions carried out every day. We want people to stop and think about what they are doing before they rush in and do something.” Manchester holds the SCA Eurostar award for best safety performance across all European mills and has racked up over one million hours without a lost time accident (LTA). This equates to three years without an accident, something that SCA class as an individual’s inability to carry out full duties on their next shift. Popplewell’s focus on safety is something that is present right the way throughout the site’s operations with stop points with thousands of cards urging staff to undertake risk predictions and think about what they are doing. As we tour the factory each movement of the workforce has been carefully considered and gone over meticulously. Forklift paths are well planned in bold black and yellow stripes

Tissue parent reel production

KTonnes

The volume of tissue manufactured in the UK is growing quickly after a fall following the economic downturn in 2008.

Accelerating managers’ development As well as investing in continuous improvement of its manufacturing processes, SCA invests in the continuous development of its people. A culture that appreciates the value of managers that can empower their teams has led to SCA partnering with Accelerator across Europe since 2006.

he Management Accelerator Programme (MAP) is one of Accelerator’s longer term programmes, that SCA has invested in. The programme, usually lasting 18 months, requires commitment from the business and participants, but the rewards repay that investment with invaluable strength of leadership for the future. Designed to intensify the development of a small number of people who have demonstrated high performance and the potential to fulfil leadership roles, MAP is positioned as an award for those who have delivered results, shown commitment and demonstrated future potential. Similarly, it’s

aspired to by those who are ambitious and eager within the organisation. As the operating context of the UK business has changed over the past six years, MAP has also evolved over its eight UK programmes, with enhancements such as an online learning environment modelled on Facebook to encourage discussion and sharing of ideas in a collaborative atmosphere. Mark Mannering, now Site Manager at SCA Skelmersdale, comments: “Looking back, I can see that the programme came at just the right time in my career and was influential in helping me take the next step up into my

current role. I now mentor current participants on the MAP programme. It’s fantastic to see how people embrace the process, often making big leaps in their performance and confidence as leaders.” “It’s not like any other course I’ve been on,” comments Paul Vale, Operations Leader at SCA Trafford Park. “It really opens your mind to the way you approach situations at work. It gives practical ways to improve your own performance, as well as that of your teams.”

This is just one example of Accelerator’s capabilities and how they deliver results that have a lasting impact for their clients. For more information, or to arrange a meeting, call Accelerator on: +44 (0)845 260 6886 or visit: www.acceleratorsolutions.com

Factory of the month SCA Hygiene

An ergonomic plant design enables the quick flow of products around the site

with a strict rule in place that trucks stop if anything or one, ventures into those boundaries. Even with this rule, every member of the team that I pass seems fully aware of their positioning in comparison to everything else going on around them. There is a ‘lock out tag out’ system (LOTO) in place to ensure safety when people enter certain areas, such as when crossing a plane of a guard. Popplewell explains that this makes people aware of where they are and potential hazards.

Follow the leader SCA has a strong acquisition record which has seen it become the largest maker of paper-based products in Europe. Because of this there was a variation of different standards in use across the business but Manchester’s safety record has led to a consolidated strategy that regards Manchester as the gold standard. “There were differences between what P&G and SCA were doing, we’ve taken the best of both” says Popplewell. “Things have evolved since the acquisition; it’s not a Proctor and Gamble system any more it’s an SCA system.” If you have ever wondered why Bounty was rebranded as Plenty and Charmin as Cushelle, look no further

than SCA’s purchase of P&G’s European paper making arm. The American firm retained the two brands as they still make and sell tissue products in North America. So why did P&G decide to sell up and scale back their global paper-making business? “SCA has forty five sites in eighteen different countries. Proctor and Gamble are huge in America but they only had five sites in Europe. They didn’t have scale, it was either buy another fifteen paper mills at £200m a go or sell the business.” As the size of the paper industry in the UK has retracted in recent years, SCA has gone from strength to strength. “The sector has shrunk over the last few years but we’re making more paper than we ever have. While newspaper print has declined substantially we are making essential products. “It’s a recession proof product. People use our product all the time so retailers use our product to get people in the shop. The way the supermarkets operate, with promotions across industry, as it is an essential product.” With the company increasing its share within a stable market, the Manchester Mill is running at full capacity. ““Every tonne of paper we make here can be sold in the UK,” states Popplewell. “We have plans to increase capacity and if you are a high performing mill then you earn the right to expand.”

Rolling out expansion He adds: “It costs a lot less to speed up technology than spend £200m on a new paper mill. We quickened our production by implementing a new drying process five years ago. Seeing a five and a half metre wide tissue machine with paper that can run a mile a minute is quite a sight.” Looking towards future improvement, Popplewell says that the next increase in speed will come from equipment improvements, despite already using a paper machine that won an award

SCA Hygiene, Trafford Park DELTA NEU specialises in supplying industrial ventilation and process extraction systems to meet customer requirements and at the SCA Trafford Park plant three specific installations have been completed.

he paper machine main drive control room had two requirements, to control temperature by dissipating heat and prevent dust ingress. The solution involved air conditioned air input, carefully distributed to the main heat sources and an air extraction system, collecting the warmed air from control cubicles. The system operates in a balanced manner to create a positive pressure in the room, preventing dust ingress, and varies according to the internal and external temperatures. In the paper mill was a requirement to reduce condensation, a common production problem which can be detrimental to

buildings and equipment. The solution involved extraction of humid air along the length of the roof and heated air input. Where possible, existing equipment was re-used and a number of previously deemed waste heat sources from items such as compressors and the exhaust air from the control room project above saved energy heating the input air. Notwithstanding the size of the mill, condensation issues are now greatly improved. In the final product conversion, tissue waste is produced and extracted at source then conveyed to a central reclaim area before being recycled on the site. Dust is also created

in this process which is filtered using a wet process to enable recycling without impact on the environment. These three projects at SCA are typical of the work undertaken by DELTA NEU.

Published in association with: DELTA NEU Tel: 0161 456 5511 Email: mail@delta-neu.co.uk Web: www.delta-neu.co.uk

Factory of the month SCA Hygiene

as s best performer in the company’s fleet at a European awards ceremony in May. The mill manager, well versed in the industry, explains that every paper machine is different. “This one has a slightly wet profile. We need to flatten that out as it incurs additional costs during the drying process. If we could flatten out the moisture profile across the machine we could work faster.” The site has one of the highest performing machines which is seeing a consistent step year on year in machine efficiency (ME). The quality improvements that come from more efficient machines have contributed to the company’s impressive waste reduction figures.

Scrapping the scrap SCA’s crown jewel has cut 2% of its waste since the acquisition three years ago resulting in a £2m saving. Although the company doesn’t lose any raw material costs – as all waste is recycled back into the process – the rising price of energy combined with the heavy industrial nature of the work means that cuts to the number of reworkings save substantial sums. “Even though everything is recycled we don’t want to make the same product twice as it doubles the energy cost,” says Popplewell.

When you consider that the ratio between water and pulp sits at 96:4 during certain stages of the process, it is unsurprising that SCA’s investment in sustainability has led to significant savings from reduced energy use and water consumption. “The two biggest impacts on a paper mill are the fibre quality in the raw material and energy,” asserts Popplewell. “We’ve looked at using more recycled product to make the product even more sustainable and cut costs, but there are quality issues to consider in using recycled paper for premium products.” There is a good return on investment around energy saving, demonstrated by the multimillion pound return that on a £500,000 system that recycles steam. It works by taking heat from the Yankee Dryer and puts it back through the paper machine. The purchase has led to a 10% energy reduction and there are plans in place to utilise the system still further by putting the steam back into the process. “The less water we use the better. Manchester is investing thousands of pounds in water saving projects as the more we can recycle it around the process on a continuous loop the more money we save,” says Popplewell.

Green credentials that stack up The size of SCA enables strong spending in R&D with the company currently investigating a number of technologies linked to reducing electricity use. If successful, those innovations could be implemented in Manchester. While benefitting from its size, Popplewell explains that the site has focused on small group activities, skills matrix and team leader capability to find improvements on site. Planned shutdowns for maintenance and site inspections are relayed to energy companies in advance so that energy is capped. There has been a real drive to cut the level of transportation used to move goods. The double stacking of palettes has been implemented so that there is less truck movement.

Packing at the mill is fully automated

TYLDESLEY DISTRIBUTION SERVICES Tyldesley Distribution Services Limited is a family run distribution and warehousing specialist that has been trading for almost forty years

e are aware that our customers have an infinite choice when it comes to placing their goods in the hands of a logistics provider. So we invest a great deal of time and money in creating the environment that allows seamless and high quality customer service. This is achieved by investment in staff training, unique equipment and quality support systems. We believe that by developing a partnership with our customers, we can ensure that our pro-active operation provides more than just getting goods to site on time, safely and in good order. Our Head office is based in Tyldesley,Manchester . We also have additional heated warehousing available perfectly situated close to the North Western motorway networks.

We have worked with major trailer manufacturers to develop innovative trailer designs for special applications and continue to invest in the company to maintain our own high standards. Tyldesley Distribution Services have a broad customer base in very diverse industries. Our customers range from all areas of the paper industry to chemicals that require very precise transport and storage protocols. We have recently expanded into pallet distribution, which is supported by computerised traffic systems that can interface with our customers’ systems. In order that we can offer a comprehensive and reliable service, we operate an “open book” policy, which allows our customers to access our systems to track their goods.

We deliver to all parts of the UK and the distinctive logo on our livery will be seen on are the major roads. Tyldesley Distribution Services can offer services that customers can contract with confidence.

Published in association with: TYLDESLEY DISTRIBUTION SERVICES Tel: 0161 703 8523 Fax: 0161 703 7865 Email: office@tdsltd.com Web: www.tdsltd.com

Factory of the month SCA Hygiene

Each stack of tissue products are double stretch and shrink wrapped using three new robots that cost over £1m to install. Edinburgh-born Popplewell explains that there are added benefits other than the fact that more products can be transported by fewer vehicles. “We make a light product so if you compress it slightly on the palette it becomes a lot more stable.” Although there’s little room to improve its on–time-in-full delivery (OTIF) figure, which currently stands at 98%, fewer truck movements makes the logistics operation more manageable and will help the mill meet its 99% target. There is also the (not so) small matter of money. With the price of crude oil predicted to rise further still, transportation costs are only going to grow; reducing this has and will save significant costs.

Roll reversal Due to the vast amount of tissue from Manchester Mill that ends up in homes and properties across the UK, SCA uses demand and capacity forecasting to meet its distribution challenge. “We have to make two products on the paper machine and need to use different fabrics on the machine to achieve this. There is a regimented process for changing between brands with downtime at twelve hours.” SCA’s Manchester site is a victim of its own success and is expanding rapidly

Huge rolls of tissue are made in the mill before being tranformed into final products

to cope with demand for its tissues. “Given that the business is sold out we do understand that we have to change over. We typically change between Cushelle and Plenty on a three weekly basis but, from a manufacturing perspective, I would like to see this fall to five changes every quarter.” The mill is producing a Best of British range with patriotism at an all time high with the football championships Euro 2012, the Olympics and the Queen’s Jubilee all taking place this summer. Once the tissue is made, print plates apply the ink to the embossed sheet to provide a range of patterns that add value to the company’s products. The factory is using the lean manufacturing 20 keys programme, an overarching Japanese-developed tool that covers 5S, quick changeovers, scheduling, reducing inventory, maintenance, skill building activities, eliminating waste, quality, developing supplier. Each key is divided into five levels and acts as a road map for manufacturers to reach world class status with precise analytical

Paper and board – mills and employees Employees Mills

‘000 Employees

No of mills

There has been a dramatic fall in the number of paper mills in the UK but SCA declare that they are here to stay.

Factory of the month SCA Hygiene

measurements that rank a firm from novice upwards.

Skills reel People development is a key part of the 20 keys programme. Despite some firms opting to cut the amount of money it spends on training and investment in new staff – SCA is investing heavily. With no degree in the UK for paper making, SCA has sought to take on process and electrical apprenticeships, and hire graduates from chemical, mechanical or electrical engineering courses. “The graduates from chemical engineering courses have been very successful as papermaking is a thermal process requiring knowledge of energy and mechanical movement,” explains Popplewell. “The paper-making process is quite chemical-focused.” The site has proved to be a home for nurturing talent, with 17 people going on to join other mills within SCA’s portfolio. When asked if this has left a gap in skills in Manchester, Popplewell states that the training programmes and attitude to taking on young people mean that there is a continuous conveyor belt of skills. His reasoning is that there is only a skills gap if there is no pipeline in place. What SCA does is elevate those who have the skills, propelling home-grown talent further up the ladder. “We have a ‘promote from within’ philosophy,” Popplewell says proudly. “There used to be specific papermaking courses in the UK that produced UK graduates, but, because the size of the industry has shrunk, this no longer exists. We went through a stage of employing graduates from Grenoble, France but we have been upping our intake from the local universities.” Manchester runs a number of internships with Grenoble that run at various points between October and June and UK-based students are undertake a mixture of three and six-month internships. The company has a good track record for hiring interns and the procedure works well for both parties. The internships give young people an opportunity to gain a job within a global firm and explore the paper making industry with a view to turning it into a career. For SCA, it gives it the chance to uncover an individual’s potential and is a valuable hiring tool.

It is not a wishy-washy intern scheme but one that is producing a great return on investment. With 10 interns being hired on full time basis in the last five years, this equates to a high proportion of the team’s 145-strong workforce having started off on an internship. Popplewell says that the benefit to SCA is that it gets to see skills in action, rather than just a CV. “We don’t treat hiring interns any differently to hiring permanent staff. It is this philosophy that has led to such a high recruitment rate as the people we bring in have the skills to make a real impact and are given responsibility that provides them with a wealth of experience. We’re not afraid to take people on if they prove their worth to the company.” Popplewell has worked in many roles within the mill, which is typical for everyone who has developed their career through the site and company. The philosophy of working hard and continuously improving results through each position in the Mill is clear. This attitude doesn’t just seem to belong to him but also to the rest of the team. The team can rest easy that the mill has all the systems in place to stay at the top of the tree for years to come. Speaking of trees, SCA acts as it talks and replaces three trees for every tree it uses for its Velvet brand. SCA runs a localised strategy to keep transportation low for environmental and cost reasons. For Manchester Mill, they get the best of both worlds. There is strength to invest and a structure that transfers skills and R&D throughout the company’s five plants in the UK and 20 in mainland Europe. The march of these makers has a bright future.

A taste that packs a punch Tom Moore discusses how Thorntons has boxed a better game in leaning out its packing factory with factory manager Chris Blackwell.

nder pressure since the economic downturn struck in 2008, the high street has been hit by a loss of available credit and a more reserved shopper in town. With Clintons Cards the latest casualty, following established names such as Woolworths and Zavvi off the street, it has been a time to evolve or die. Chocolate-maker Thornton’s has done just that. The company’s products have been used to woo lovers, celebrate special occasions and bring smiles to the faces of children for over 100 years following the first shop being opened in Sheffield by travelling confectioner Joseph William Thornton in October 1911. The brand has come to represent luxury yet accessible, finding its way into the British public’s heart in the process. This is certainly something that is true in my case as I tell David Proctor, business development director, and Chris Blackwell, factory manager at Thorntons’ packing facility, about the first time I ever purchased of a box of Thorntons.

The pair smile as I describe how, with newspaper round money in hand, an 11 year old boy struck by puppy love asks the shop assistant what chocolates girls like. ‘Thorntons,’ responds the curly haired lady behind the counter. After paying up I shyly placed the chocolates in my school bag before hiding the gift in Helen Dubber’s school tray. I learnt a valuable lesson that day … girls really do like Thorntons. My first kiss proved it.

A new direction Thorntons has increased its number of sales channels so that gift-givers and chocolate lovers can buy its products in a wider variety of places. The company has tapped into the buying habits of modern consumers by setting up online and diversified its sales channels by growing its sales in supermarkets, decoupling its manufacturing operations from its own stores. Almost 80% of the entire production of chocolates at Thorntons was sold through its own stores and franchise network in 2006, but, anticipating the risk of this vertically

We are in an environment where consumers are very sensitive to price so the need to be efficient is heightened Chris Blackwell, Factory Manager

Food and drink Thorntons

integrated retail model, the company accelerated the level of its sales to supermarkets, as well as growing its online sales through Thorntons Direct. This strategy has proved highly successful with sales from the commercial channel growing strongly over recent years, demonstrated by a 25.9% increase from £62.6m in 2010 to £78.8m in 2011. Through our Commercial channel we now lead the inlaid box chocolate market in terms of market share and, through our actions, are also the main driver of growth in our market. Reducing manufacturing costs now takes on a greater importance in order to tie into this strategy and maintain margins, says Chris Blackwell, who assumed the role of factory manager for the company’s packing factory, which is collocated alongside its chocolate-making facility at Thorntons Park, almost a year ago. With purse strings being tightened by shoppers across the UK, Mr Blackwell explains that the company’s has adapted by producing and selling more product to tie in with the company’s new strategy. “Production volume is up 5-10%, quite a nice level for an operations guy,” he says. “We are in an environment where consumers are very sensitive to price so the need to be efficient is heightened. Our margins are lower when selling to the trade but Thorntons is selling more through the supermarkets so we end up making a greater volume of chocolates.” Despite the recession revenue at Thorntons has grown consistently over the last five years, rising from £186m in 2007 to £218m in 2011, which includes a respectable 1.7% sales increase between 2010 and 2011, making up £4m of this overall gain. “Our biggest selling products in inlaid boxed chocolates are Thorntons Classics and Classic Collection, Premium Collection and Continental,” says Blackwell. “We are also famous for our Special Toffee, seasonal products such as Easter Eggs and Christmas gifts and we are seeing excellent growth in our decorated models.” The chocolate-maker is in the process of closing up to 180 stores in restructuring that is being balanced against strong sales growth in the supermarkets and online, which will leave a sustainable and profitable level of around 200 stores. A favourable lease expiry profile means that 179 of its leases expire over the next three years with two-thirds of the companies own store closures set to occur gradually over this period. “The guys in the factory used to pay a lot of attention to what was happening in our stores but we can’t influence what goes on there. We play our part by continuing to produce high quality luxury chocolates so we never compromise quality but have found ways to while improve taste and find efficiencies in how we do it. We have been focusing on margin improvement and that is starting to come through now.”

The taste of success With an expanding number of people treating themselves to a box of Thorntons and 80% of all sales being produced at Thornton Park, Derbyshire, lean efficiencies and quality improvements at the company’s two factories have resulted in the company being shortlisted for the Ambient

Inlaid Boxed Chocolates Total Inlaid Boxed Chocolate Market £227m annual sales Market share 41% Thorntons Classic collection £8.4m Thorntons Continental collection £21.6m Manufacturer of the Year prize at the Food Manufacturing Excellence Awards in late 2011. The company introduced a waste reduction initiative that identified a number of areas that the Blackwell, Proctor and the rest of the 1,600 employees there began to zone in on. With £30m spent on raw materials every year material costs and wastage was targeted as an area to cut costs. “There were a series of enablers,” says Proctor. “First we made changes to the management team to improve accountability - it was vital for everyone to understand their roles and responsibilities in the turnaround.” “One of the foundations we built on was a commitment to make things “right-first-time”. We created a waste square as we needed something visual to show the changes we were making. We locked all of the waste skips and corralled everything into “waste squares” in the middle of the shop floor so that everyone could see what the size of the opportunity was. Meetings were held daily in these areas to measure, analyse, improve and control the levels. The presence of both the physical waste, the teams from upstream in the process and management on the shop floor was critical to show commitment to the venture. It was dramatic how it changed our way of working.” The waste square gave people next day feedback and led to quick in depth analysis that refused to cut corners. “We had a look at size of the problem and recorded it every day,” adds Proctor. “We added up the costs of the raw materials, weighed it and then worked out the energy and workforce cost that had been applied to each item in the waste square. We then used problem solving tools to go back through the manufacturing chain and pick apart and improve our processes.” Due to the rigorous quality standards that Thorntons has in place and the complex nature of making chocolate, it was predominantly food rather than packaging ending up in the waste square. “We’ve saved over £1m in each of the last three years,” asserts Blackwell. “The improvements came from a wide range of areas including working with new product development to tweak packaging so that they can be manufactured more efficiently.”

Food and drink Thorntons

With a steep rise in the price of raw materials, it has been imperative that manufacturers cut costs at a time when the pockets of shoppers have a lot less in them then they have in the past. Dairy products increased by more than 20% over the last few years and sugar by more than 50%. Packaging materials and diesel have also experienced significant price increases. This means that any wastage in the manufacturing process is pricier than ever. Lean improvements and product and ingredient re-engineering have helped to reduce the impact of increasing costs of raw materials. Refusing to rest on his laurels and celebrate the massive savings that have already been made, Blackwell states: “There is still a big job left to do, we know we are not at the end of the road yet.”

Maintenance The packaging factory headed up by Blackwell has changed its approach to maintenance with a new programme that was driven by its overall equipment effectiveness (OEE) project. Its new programme has cut the amount of shut down time on the machines by implementing more frequent periods of maintenance, meaning that Thorntons are now able to utilise the robotics capacity more thus producing more boxed chocolates. Around 30% of its boxed chocolates were hand packed in 2008, a figure that has now been cut to 10% saving a huge amount of cost associated with time and labour in the process. Blackwell explains: “It was a classic lean project. We set a goal to improve OEE by 20% and installed measurement techniques, analysed data and created an improvement plan.” The team spent six weeks analysing where improvements could be made before making enhancements to the way it planned its lines and carried out product changeovers and maintenance. The level of preventative maintenance that takes place has increased and the fixed two week shutdown period dedicated to repairs has been ditched. “When you take your car to a garage you don’t strip all of the components down and put it all back together again but that’s what we were doing. We now do a little bit of the car every week.” Although there were initial costs associated with implementing some of the changes, Proctor says that the

Chris Blackwell Factory Manager Education: Holds a post graduate degree in Business Management from Sunderland University. Industry Experience: Fifteen years’ experience in the fast moving consumer goods (FMCG) and food industries, having started his career at Black & Decker in 1997. He has a wealth of supply chain experience with his last role being production scheduling and warehouse manager. Chris has a strong background in continuous improvement and problem solving techniques and is a black belt trained in Six Sigma. Thorntons: Joined in 2007 as a production manager and has since been head of supply chain planning before being recently promoted to factory manager. Outside of work: A keen footballer and golfer. An avid Manchester United supporter.

David Proctor Business Development Director Education: Graduated from Loughborough University of Technology with a degree in Mechanical Engineering. Received an Executive MBA from London Business School in 2011. Industry Experience: Has over twenty years’ experience working in the electronics, automotive and food industries. His main expertise is in operations, global supply chains, business development and management, with experience of leading teams of over 1,000 people. Having held senior roles in the UK, USA and the Czech Republic, David says that he has benefited from working in both multinational corporations and start-ups. Thorntons: Joined in 2006 having entire responsibility for the manufacturing and planning operations. David was promoted to business development director in July 2011 and is looking at opportunities to take the Thorntons brand overseas. Outside of work: David runs marathons, skis and is a fervent Newcastle United supporter! company will be left with lower maintenance costs after 18 months. He explains that the quality improvements that emerged from the waste square also enabled the change in the sequence of the production line in what became a virtuous circle where “the more things improved the more things we could fix.” “We rejigged our production line to what we believe is the right sequence and now have the ability to run for a longer period of time, enabling us to reduce the headcount and save £80,000 a year,” says Proctor. “We used to apply the tamper-evident seals after we weighted the box, which was a slower process but allowed flexibility in terms of reworking. But by increasing the quality of our production line through

Apprenticeship drive Number of apprenticeships and at what level:Level 2 Apprenticeship in IOM (Improving Operational Performance) Completed: 103 In Progress: 27 Level 3 Apprenticeship in FME (Food Manufacturing Excellence) Completed: 19 In Progress: 32 The enrobing process accounts for 168 products including mousses, pralines and truffles

Formula 1 Grand Prix tyre change as an inspiration for the team to believe that massive step changes could be made. Members of the team designed bespoke tools and used shadow boards in order to make machine changes quickly,” states Proctor. “We have also improved the mapping of equipment, provided training, made more parts interchangeable and started best practice visits to encourage people to do to do it quicker. People can’t believe the change in changeover time but it’s about mind set too, letting people know that they can do it quicker and faster.” Seeing one of the changeovers in action, the word clockwork springs to mind. There is a high degree of organisation with everyone knowing their role and which products go at which station. Both Proctor and Blackwell are bullish that this time can still be driven down further; stating that 20 minutes is a realistic target. They are urging their teams to brainstorm in order to find the next ways to cut time, getting people to think about their jobs and the process.

Teamwork

the Waste Square, which solved the root cause, we can now seal the lid earlier in the process as we have no need to rework it which makes the packaging process run more smoothly.”

Changeovers Reducing changeover times has proved particularly valuable due to the level of product rotation to meet seasonal demand. Thorntons deployed a graduate from its Graduate Trainee Scheme to help find innovative ways to reduce the number of changeovers between products and the time spent on them. The length of time has since shrunk from 55 to 33 minutes after introducing a series of improvements. “We used a whole range of techniques to improve the speed and quality of changeovers, using the

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In a world full of management jargon, Blackwell doesn’t beat around the bush, something that is epitomised by the Waste Square initiative. His direct style is a quality that has helped to improve communication and change behaviour at Thornton Park by visualising the operations. There has been a conscious effort to reduce the amount of email traffic and talk to one another. Although a simple step, boosting teamwork and interaction between team members is an important move that the team hopes will improve the flow of ideas and create the right environment for continuous improvement to flow from. “I was sick of powerpoint,” says Blackwell. “We can sit here and look at all these reports from finance or do something to have an impact on the behavioural patterns of the workforce. Some people didn’t understand what we were recording and why we were recording it. When you do this analysis you have to teach the basics first.” Thorntons paired up with CQM training and consultancy as it upped the skills level across the workforce. So far, 103 individuals have taken on and completed NVQ Level Two Business Improvement Techniques, covering things like data capture and analysis so that staff can have a bigger input. 19 people have now completed a modern apprenticeship at NVQ Level Three and were recently presented their certificates by the East Midlands Skills Minister John Hayes, and there are currently another 32 still in training, CQM have provided technical support to ensure that the company benefits from the myriad of initiatives on offer from the government. “Historically, we have been exceptionally happy with government support but it is slowing down,” says Proctor. “We have been told by our training partner that we have to start paying a registration fee for level two registration candidates, which is unsurprising given the austerity cuts, but overall, there is a significant amount of help out there.” Proctor believes that the company are getting a great return on the level three training programme and says that, given the length and intensity of the course, “people really commit.” Thorntons manages the challenges of producing certain products designed for seasonal markets by strict scheduling

Food and drink Thorntons

and maintaining a flexible workforce, which varies between 1,200 and 1,600 employees throughout the year. “We run a little bit lighter around this time of year but then are at full capacity from July right round to March,” says Blackwell. “Demand is exceptionally high at Christmas and then peaks again for Valentine’s Day and Easter.” Chocolate lovers are showing their love for Thorntons products with the manufacturing site ready to switch to 24/7 production in June after market share rose year-on-year to from 7.1% to 7.7% in the boxed and seasonal chocolate through the peak sales season. The company has tapped into a lucrative market and been creative with its new products. It has capturing the essence seasonal events and diversified to create quirky Advent Calendars and Santa and Reindeer models, to mean that luxury chocolate isn’t just a box once a year but something that can be the norm. “We track and manage the skills base on the site so that everything is in place for when we ramp up production,” adds Blackwell. “We’ve lengthened the training of short term and temporary staff so that there is greater cohesion within the workforce and a better blend between experienced and less experienced staff.”

Special Toffee production

next five years, particularly in the travel retail market. “It is a great way to showcase the brand and there are a lot of expats who want a taste of home,” Proctor says enthusiastically. Thorntons can serve this desire as a great British brand, with sales rocketing in Dubai and elsewhere. Thorntons’ share of the UK chocolate market grew to 7.7% in 2011 from 7.4% in 2010. With increasing availability of the brand in supermarkets and elsewhere the expectation is that this percentage will rise further. The story goes that the original Mr Thornton, on handing the keys to his teenage sons Norman and Stanley, said “Make this the best sweet shop in town!” Well, the target now is not just to be the best sweet shop in town but also the best manufacturer. After tasting some of the chocolate and watching a changeover in the packing factory, I’d say they’re doing a pretty good job.

Biting into the next challenge He believes that the London Olympics will create a spike in demand for its products in the capital as well as in travel retail. Thorntons has released a quirky Best of British chocolate box to capture the fun of the Games and has seen duty free sales of British-themed products grow by 40% over the past year with rising patriotism ahead of a number of major sporting events and the Queen’s Jubilee. Thorntons makes all of its products here in the UK, enabling it to react quickly to fluctuations in demand as well as maintain a 99% on time delivery in full (OTIF) record. “One thing that overseas manufacturers can’t replicate is our geography,” says Proctor. “We always have advantage of location so we are trying to improve our lead times and lower inventory even more to leverage this position.” Around 2-3% Thorntons’ sales come from overseas but the firm is optimistic that this figure will grow drastically over

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Without being touched by a human hand, the products are packed and ready for distribution

Pulp fiction

Tom Moore visits manufacturer of human waste hospital products Vernacare as it aids the fight against hospital acquired infections, discussing the firmâ&#x20AC;&#x2122;s automation revolution with global operations director Derek McIntyre.

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f you have ever had to have an overnight stay in a hospital, you may well have used a product made by Vernacare. The company invented single use pulp moulded products back in 1960s and Vernacareâ&#x20AC;&#x2122;s bedpans and bottles have been a fixture within hospitals across the world ever since. With government purse strings being tightened around the world Vernacareâ&#x20AC;&#x2122;s business has remained fighting fit with its reduced overall usage costs over products made with plastic. Pre-2005 Vernacare was made up of seven divisions, but after a strategic review it was decided to divest non-core businesses, selling off six businesses as the firm undertook a period of consolidation to refocus on its core offerings. Despite the economic downturn Vernacare is producing an essential product for health organisations with two unique selling points highly desirable in the 21st Century. Its single-use niche reduces the risk of patient infection and the product now falls well within the global drive towards a more environmentally friendly solution, having replaced a system of reusable plastics. The result of the divestiture has led to a single focus of resources on its core pulp moulding business, which has led to a major revamp of its manufacturing facilities. The firm, which is the biggest producer of medical pulp mouldings in the world, continues to invest heavily each year to maintain its leading position and increase capacity by driving down costs and transforming processes.

Medical instruments Vernacare

Company Stats Workforce Size

192

Factory size

12,300 sq m

Core products

Washbowl, bedpan and bottles

Paper weight The operations management team have spearheaded the firm’s move to become a more streamlined and dynamic business. Vernacare uses 100% recycled newspaper, or over issue newspaper as it is known to those in the industry, to form the basis of its pulp. To ensure that the quality to the end user is of the highest standard, the company has invested heavily in state of the art screening equipment. Derek McIntyre, global operations director, describes the process from raw material through to packed product as a transformation of “Recovered waste paper to saving lives.” With the price of over issue newsprint having trebled since 2005, rising from an average of around £65 per tonne of paper in the early 2000s to a figure around the £170 mark today, the team at Vernacare have sought to remove costs from other areas of the supply chain and optimise processes. Vernacare invested heavily in automating its factory four years ago, introducing high tech inspection and packing capabilities for both bottle and open moulding products. This has transformed what was a 100% manual process into an operation that McIntyre explains has resulted in “The manufacture of products that are untouched by human hands until the nurse or patient requires them.” He continues: “The investment has reduced the headcount on site to cut costs while also producing higher quality products to give a better service to the customer. Productivity has increased while the cost to manufacture has reduced.” During the automation process, 50 members of staff were released through voluntary redundancies but McIntyre views automation as a protector of UK manufacturing jobs rather than a threat. While there has been a trend over the last 10 years for labour intensive manufacturing firms to move or outsource to countries with lower wages, automation can act as an equaliser. Countries such as China are able to compete at price level because wages are significantly lower than in the UK, but investment in automation can help to keep UK firms be globally competitive by reducing costs, standardising and improving product quality. “In terms of ratio, we have a high robot to operator mix per shift” says Graeme Topping, engineering manager at Vernacare.

From labour intensive to lean machine Due to the unique nature of the product, an off-the-shelf technical solution was not readily available which required the operations team in conjunction with third parties to specify, source and install bespoke manufactured equipment to meet the project scope. The difficulties presented required in-house expertise to develop, design and manufacture a patented solution to the problem of inspection R&D manager Garry Partington led the team using lean 6 sigma principles to design the necessary experiments and solutions to overcome some extremely challenging technical issues. The system is capable of identifying defective

Vernacare’s free-flowing factory floor which couldn’t be any straighter!

products which are then automatically rejected. Products which pass the inspection are stacked and then packed automatically to ensure uniformity of a quality product delivered to Vernacare customers. The automation gathers data and distributes this in realtime through a SCADA shop floor control system to react more effectively to any out of control (OOC) event, which uses mobility so that the system can also be viewed remotely. This hands-on approach ultimately proved vital as the learning curve towards becoming a highly automated plant was made a lot steeper after the machinery supplier went into receivership as the final piece of equipment arrived. Left with the challenge of mastering their new automated factory on their own, McIntyre comments, “We were left with technology that we didn’t know and machines that we didn’t have drawings for. This was a very difficult period for the operations team; however, the outcome has resulted in a workforce which now has full mastery of the equipment. The result has also meant a better solution than what was originally supplied.” The investment has changed the nature of the job for employees on site with Topping stating that there was a desire to get sleeves rolled up during the implementation. “Employees have gone from sitting on a production line, picking the bottles up and hand-inspecting them, to driving millions of pounds worth of machinery and using 6-axis robots. Think about the buzz that he or she is getting.”

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Kensington Consulting Kensington Consulting, a market leading engineering & manufacturing recruitment consultancy are working in partnership with Vernacare. They have successfully worked together to bolster the capabilities within the engineering function during a period of sustained change and development at Vernacare.

rior to Kensington’s involvement, Vernacare had a number of issues in recruiting the calibre of staff required to satisfy the demands of the developing business: Recruiters sending unsuitable CV’s, simply acting as a “CV passing service” Lack of understand of needs, they did not fully appreciate; The manufacturing process and relevant requirements from an engineering perspective. The culture of the business and the effects on the company of the change management / development programme. The technicalities / skills match for the organisation However given Kensington’s industry knowledge and best practice approach, Kensington’s were engaged to manage a senior engineering role that was considered critical to the future success of Vernacare. Their project management

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approach was refreshing where the consultant met the key stakeholders and understood the core competencies for role, the cultural requirements of the business and the manufacturing process. Kensington’s managed the assignment and were ultimately successful in sourcing a candidate who matched the requirement and who has continued to add real value to the business. Since then, their success has continued and has resulted in the following positive feedback: Consistent matching of the right candidates to the role including the technical requirements and cultural aspects, as these are considered critical by Vernacare. Successfully managed the recruitment process against the project plan. CV’s were provided when stated, communication occurred at set points on a consistent and regular basis Post placement service added benefit to the process

Kensington’s vast industrial experience allowed them to make a real contribution when walking the process to understand Vernacare’s requirements. The recruitment methodology addressed the real source of the problem rather than just sending a candidate that fitted a spec. Kensington industry backgrounds are not only a benefit to understanding needs, but have consistently delivered: A better than industry average Time to Hire A vast reduction in the number of CV’s sent to generate an interviews (>2:1 for 2011) Candidate Retention (84% of candidates placed complete 12 months service) Kensingtons measured approach to every assignment brings real waste reduction and efficient recruitment process. The Recruitment Industry has also recognised Kensingtons for providing best practice with 6 national awards in the last 3 years including best overall recruiter competed for by three and half thousand recruiters across the UK. To find out more how we can add benefit to you business please contact Matthew Ackers on 01257-268440 or e-mail matthew.ackers@ kensingtonconsulting.co.uk

Medical instruments Vernacare

McIntyre adds: “The team essentially has remained as was when I first arrived. I have a great bunch of people and with the right direction and the necessary tools and education that has been provided they have proven themselves to be a highly capable group, able to master any problem that is thrown at them.” Giving people responsibility can sometimes be rhetoric based with no tangible way of assessing change. Processes have changed at Vernacare so that staff have more responsibility in a number of areas. The firm has restructured the way capital expenditure is actioned so that the voices of the eyes and ears on the factory floor are listened to and their request promptly acted upon. A maximum decision time of 10 days has been placed on capital expenditure forms, with a priority system in place so that the company acts quicker upon the advice and ideas of those within the factory. A traffic light system of red forms for immediate requests will be processed on the same day while amber forms take between one and five days and green forms between six and ten. Vernacare has invested heavily in Six Sigma training that has resulted in seven black belts and seven green belts. With a manufacturing headcount of 102, Vernacare has a higher percentage of black and green belts than at many other firms that have also invested in Six Sigma training.

Down with downtime Topping states that this training has played a large part in the company reducing downtime by 52% over the last two years, significantly increasing the capacity of the plant as a result. The company has undertaken a massive overhaul of aging machines, replacing them with newer technologies that have had an instant impact on reducing downtime. “There has been a significant amount of work carried out to improve product line and replace old machines,” says McIntyre. “This is almost complete after five years and will now require a reduced spend to maintain the facility and equipment for the next few years.” The introduction of Single Minute Exchange of Die (SMED) practices has resulted in a halving of the total tool change time per machine. Topping explains that this has given the firm more flexibility to rotate products on the production lines, and so offer a much more flexible service to our customers. This has allowed Vernacare to reduce stock levels which McIntyre says were “based on historic unchallenged assumptions.” The operations team has managed to reduce inventory and run at a more optimised stock level while retaining an On Time In Full (OTIF) delivery KPI of 99.87% to the NHS. Through the introduction of TPM methodologies, a more proactive approach has yielded significant benefits such as reducing robot repair time from 3 weeks in the very early days to 3 hours today. The management team view the investment in an asset management software package as vital to upholding a high delivery service while reducing costs and space as it can organise and track inventory, generate and track work orders and requisition and purchase parts while also managing equipment costs and history to schedule preventative maintenance tasks to minimise downtime. “It helps to drive the right activity at the right time at the right costs,” says Topping.

Vernacare’s CEO Karen Haslam with Garry Partington, R&D Manager, holding The Queens Award for Excellence and Innovation awarded for the washbowl

Garry Partington R&D Manager 1978: Joins Vernon & Co (Pulp Products) Ltd as technician apprentice 1980: Becomes drawing office junior draughtsman 1982: Promoted to R&D engineer charged with the development of a new generation of pulp moulding equipment & products. 1985: Joins Vernaware divisional ceramic moulding company as production engineer 1987: Transferred to Vernacare as macerator development engineer 1998: Engineering manager for Clearfume, part of the Vernagroup 2000: Becomes product development manager 2012: Assumes the role of R&D manager With 34 years experience in the pulp moulding industry Mr Partington is now tasked with evaluating emerging technologies and materials to ensure that the company never stands still. Garry was the lead in developing the world’s first pulp moulded product able to take hot water and soap solution. This resulted in “The Wash Bowl”, which was developed in direct response to customer demand and resulted in Vernacare being awarded The Queen’s Award for Enterprise: Innovation in 2011. A recent study undertaken by the Royal Salford Hospital and published in The British Medical Journal has proved that the product, along with other measures, has helped to reduce Clostridium difficile (C.difficile) by 56% by improving hygiene in hospitals. C.difficile is responsible for 8,000 deaths in the UK each year and costs the NHS £1bn per year. Garry is married and includes flying light aircraft, sports cars and football amongst his hobbies. The next stage will be to integrate the asset management software with the ERP system, giving the engineering and procurement team’s full visibility on parts consumption and stock levels. According to McIntyre, “The shop floor data management system has given the company tighter

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control of key process parameters and allows a faster response to any out of control (OOC) instances. With access to this real-time information, operators can see if there is a problem with the process. All of the above allows for tighter quality control and faster reaction to reduce waste, save time and cost”

Graeme Topping Engineering manager 1989: Project engineer at GEC Alsthom Ltd. 1996: Joined T&N Technology as Principal Engineer. 2000: Moved to Ultraframe as Group Engineering Manager 2004: Joined Milliken Automotive as Engineering Services Manager 2006: Became Engineering Manager at Vernacare Graeme has an MBA and BSc in Mechanical Engineering. Outside the office he is married with three children and his hobbies include rugby union, football and DIY.

Steve Birch, Production Manager, taking local MP on a tour as part of the Queens Award celebrations

Steve Birch Production Manager 1992: GShift Team Leader at EMI Compact Disc, Swindon 1996: Promoted to Production Manager at EMI Music Services, Hayes 1997: Pre-Print/Print Manager at EMI Compact Disc, Swindon 2002: Production Manager at Vernacare, Bolton Steve moved to Lancashire in 2002 following EMI’s decision to exit from manufacturing its own recorded music. He is now responsible for the manufacturing operation of Vernacare’s medical pulp moulding facility based in Bolton Lancashire. He is a keen follower of motorsport and regularly attends Formula One events.

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Environmental “Recognising the increasing costs in energy, coupled with legislative and environmental requirements, the team have created an extensive energy reduction programme which with the appropriate investment will allow us to remain cost competitive,” McIntyre says resolutely. As part of our environmental programme and with water being a precious commodity, it is recycled multiple times within the manufacturing process to reduce consumption to a minimum level. “As part of an on-going programme of quality improvement and cost reduction, the company has invested a six figure sum in a new pulp consistency control system. This allows an extremely controllable tolerance variance between the ratio of paper fibre to water” explains Steve Birch, production manager.

Cuts at home “With the environmental and legislative demands placed on our business and the UK manufacturing as a whole, we do not have a level playing field in comparison to some overseas competitors who do not have to comply with the same stringent constraints. Vernacare fully complies with the European Union Emissions Trading Scheme (EUETS) and also has a Climate Change Levy Agreement (CCLA) in place to reduce its carbon footprint while the company has also achieved accreditation to ISO14001,” says Birch. Much like other manufacturers within Europe, Vernacare products have to compete with overseas suppliers who are not as constrained as UK manufacturing is regarding compliance with both UK and EU legislation. The buyers of products such as ours do not necessarily take this factor into account when making a procurement decision. The NHS, Vernacare’s main customer, has been asked to save over £20bn by The Chancellor, George Osborne during the October 2010 spending review. During the announcement he told MPs that his government had chosen to protect the National Health Service and that, “By 2014 we are aiming to save up to £20bn a year by demanding better value for money.” In light of the health budget cuts across the world following the economic downturn in 2008, it set up Austerity Partnerships deals (much to the delight of Mr Osborne!) to maintain its contracts so that when spending increases, it is in prime position to benefit. Vernacare’s USP is that they offer a complete system including macerators, pulp products, racking, commode chairs, patient wipes, cleaning wipes and foams for the safe management and disposal of human waste within a hospital environment. Questioned whether repeatedly buying in single use pulp products for human waste over the re-useable plastic products in hospitals means more costs over the long-term, he explains, “It has been proven that if you take into account not just the unit cost but the nurses’ time and energy savings it actually works out cheaper.” The pulp products such as the urinal bottles are put in the disposal unit (essentially a mechanical toilet) which is also designed and manufactured in Bolton by Vernacare. The pulp disposal unit and pulp products allow the nurse to perform their tasks in such a manner that both the patient

Medical instruments Vernacare

and nurse dignity are maintained. The machine has been designed to minimise contact between nurse and pulp disposal unit, so a foot operated sensor will allow the lid to open automatically allowing for fast and safe disposal of the used pulp product, so aiding in reduction of cross contamination. Vernacare is planning to re-locate the pulp disposal unit assembly from a satellite facility to its Bolton operation later this year after reducing inventory levels, enabling the company to save on property costs.

International ambitions New product innovation is key to the company’s global growth strategy. Vernacare recognised that there was a need for a single use disposable pulp moulded product which was resistant to hot water and soap solution for the safe washing of patients. Currently, plastic bowls are used which can be transferred between patients so providing the opportunity for cross infection to occur. Garry Partington R&D Manager, developed the first disposable pulp moulded wash bowl in the World. Like all Vernacare pulp products these are designed specifically to be macerated in the Vernacare machine (which Garry also designed). Although the research took two years, the design and manufacture of the product was completed in 6 months. This product has been very well received globally by customers and sales are growing rapidly. As the domestic market stalls in the UK, manufacturers increasingly have to look to elsewhere to find growth. Because of the tough regime that the NHS is under at the present time, Vernacare has plans to export greater volumes to increase security of income by diversifying its revenue stream. Derek recognises, “The world is a bigger place so if we can expand while maintaining what we have in the UK then we will be a stronger business for it.” With 30% of the company’s revenue coming from exports and 70% from the domestic market, McIntyre says he would like to get to a 50:50 ratio with the Vernacare. With ambition by the bucket load, McIntyre concludes, “A lot of companies are scared to put money in as they don’t know what’s around the corner, we’ve taken the view that tomorrow’s always there and we’re ready for that future.”

Derek showing the Lord Lieutenant of Greater Manchester the pulping process

Derek McIntyre Global Operations Director 1983: Became the first graduate taken into the production department when he became Graduate Production Foreperson at Motorola Semiconductors 1989: Promoted to Operations Manager when he moves to Hughes Microelectronics Europa, having started in the wafer fab as Production Manager followed by a period in Hybrids and Flex Circuits 1992: Plant manager at Avex Electronics 1993: Operations Manager at Motorola Cellular, running 3 lines within the facility producing mobile phones 2001: European Operations Development Manufacturing Manager at Jabil Circuit, working in Liverpool for one year before carrying out roles in Southern Italy and Hungary to turn acquired facilities around. 2005: Operations Director at Vernacare 2011: Global Operations Director at Vernacare, joining the board and focusing on the strategic alignment of the Operations offering and growing demand within the International division. Derek who has recently joined the board of Vernacare has a BSc in Production Engineering and an MBA .He is embarking on the Institute of Directors Certificate and Diploma in May, leading to Chartered Director status. Derek joined Vernacare with two main goals, to instil a process driven philosophy and introduce a more modern management approach, marrying the two together. This has resulted in culture that is more business focussed and willing to take on any challenge it is set.

Coming to a hospital near you

Derek has a 21 year old son and an 18 year old daughter and in his spare time likes to read, cycle and keep fit.

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lIfayoustwant word The

to whinge, participate

Like discussing the weather and drinking industrial quantities of tea, Brits love to ‘government bash’. But can the lambasting be a distraction from efforts to reduce regulation and a get-out clause for those who fail to proffer solutions to the problems they are so quick to complain about?

ublished in May, the Institution of Mechanical Engineer’s report, ‘Manufacturing a Successful Economy’ showed that, of 1,000 manufacturer’s surveyed, half said that government was doing a poor job of creating manufacturingfriendly policy. In addition, 72% of respondents said that, despite offering warm words to manufacturers since coming to power, government still favours the financial services sector over industry and put the concerns of that sector first. Does the state favour banking? Or are manufacturers churlishly mourning the inability of government to meet the inflated expectations which emerged post-election? Is government simply doing what it can to avoid returning to deepening deficit and financial crisis? Some argue that what’s needed is a rethink of policy on finance, for example a harder-nosed version of Project Merlin, which is needed in order

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to ensure its policies for industry can bear fruit. And it has put good policies in place. A favourable tax regime and an environment conducive to investment in plant and R&D are consistently listed as commentators. necessities by While government actions on these points may be far from perfect, post-match analysis of this year’s Budget was, in the main, positive. Decisions to lower corporation tax and introduce the Patent Box received praise. The Beecroft report is designed to cut employment red tape to make it easier to recruit staff. If these policies are not what manufacturers need, it is arguable that they have little recourse to blame anyone than themselves. Not a single manufacturer responded to Government’s call for input into IP regulation reform through the Red Tape Challenge. Input to the Red Tape Challenge was pitifully low overall. During the ‘spotlight’ period for

Have your say at: www.themanufacturer.com

manufacturing regulation, which ran in late 2011, only 38 responses from manufacturers landed. And this was despite the period being extended and EEF being brought in to help promote the Challenge among its members. A BIS spokesperson also revealed that getting industry buy-in to similar initiatives, namely Focus on Enforcement, is proving hard going. Manufacturing leaders’ defence that they might have missed the Challenge, or that they had little trust in the effectiveness of such initiatives, wears thin when there are regulatory issues at stake of real importance to manufacturers which are preventing them from identifying and taking opportunities

Red Tape Challenge: During the ‘spotlight’ period for manufacturing regulation, which ran in late 2011, only 38 responses from manufacturers landed

for growth. If this is the case then there is clear motivation, indeed a duty of care, for manufacturing leaders to find out about the channels available for engaging with government. Time and resource are barriers, particularly for the overstretched SME. But many SME owner/ managers feed into government policy formation despite battling tough times. In the lead article this month (p18) Will Stirling spoke to Iain Maxted of Guardian Global Technologies and Andrea Rodney of Hone-All Precision engineering. Neither company has a largesse of human or financial resource to throw into banter with government over the niceties of regulation. But what Maxted and Rodney both recognise is that government needs all the guidance it can get. And industry needs hundreds more like them, if it is to overcome the vying interests of different government departments which warp policies as they develop. The temperature gauging which IMechE’s survey – and many other industry surveys – represent is very useful up to a point. But when we read the results of such polls, bear in mind that criticism is a starting point not an end game. There are mechanisms for asserting influence over policy formation – there are advice initiatives, consultations, steering groups and more. How many are using them? Manufacturers of all sizes and in all sectors must ensure they understand and make use of these channels if they want to see the needs of their industry appropriately addressed.

www.themanufacturer.com/flexibleworkforce

With labour costs often singled out as the largest outlay for many businesses, Flex for the Future explores ways of improving workforce flexibility and reducing avoidable costs.

Flex for the Future Conference 2012 Thursday 5th July, 2012 The Hilton Metropole, Birmingham (NEC) Case study presentations from:

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