Hot Topic Productive Debate What we learnt from this year’s National Manufacturing Debate
Manufacturing Leadership Fantastic Plastic The evolution of plastics in the UK
Workforce And Skills Taking it to the Top Female manufacturers stake their claim
Manufacturing Technologies Automatic for the People The arrival of driverless vehicles is closer than you think
IT in Manufacturing
Is the UK automotive sector’s momentum sustainable?
Game On Playing games at work has never been so productive
ALSO IN THIS ISSUE The First World War and its influence on UK manufacturing Positioning your business for growth National Catapults come under review How to make government and private funding work for you Supply chain guidance In partnership with:
INTERVIEW Michael Straughan Member of the Board – Manufacturing, Bentley Motors
www.themanufacturer.com | June 2014 | Vol 17 Issue 5
BUILT BY INSPIRATION. BAE Systems is a proud partner in the Aircraft Carrier Alliance, working together on the UK’s largest engineering programme to deliver the nation’s flagships to the Royal Navy.
www.baesystems.com
Welcome
EDITOR’S INTRODUCTION
Management matters
It’s been a fascinating month for manufacturing news. Not least, the AstraZeneca-Pfizer saga has panned out with room for a sequel should the US drugs giant try and re-launch its takeover bid in six months – the time it is now legally required to wait.
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34
Pfizer’s attempt to pull off the biggest takeover of a British firm to date, raised debate over the security of the UK’s science base. Regardless of your views on whether the Pfizer bid was a good or bad omen for British jobs, it threw this national asset into a public spotlight and forced high profile discussion of its value. This raised awareness of the importance of strong, STEM-based knowledge to our economy. The national press talked about Britain’s prowess in pharmaceuticals development and considered the fate of employees at AstraZeneca’s factory in Macclesfield. From a wider industry perspective this hubbub can only be a good thing – the whole story served as a reminder that the UK does indeed engage in high tech industry and talked about why it would be dangerous to let this slip away. Of course, it is controversial to suggest that by allowing a foreign firm to acquire AstraZeneca, we would necessarily be condemning its employees or the UK science base.
42
Some of the most prosperous and successful manufacturing enterprises in Britain lie in foreign hands – Tata is a case in point as we learned in ’s February edition (bit.ly/TataandBritain). Without it, our automotive sector, not to mention steel, would likely be a shadow of its present self (p34). And yet there is no denying that many have strong reservations about the effect foreign ownership has on the long-term security of jobs, knowledge and competitiveness.
Read about the amazing revival of the UK automotive sector and how it has its foot well and truly pressed to the floor on p43
The impact of foreign ownership on UK productivity was among the many topics discussed at the National Manufacturing Debate at Cranfield University on May 21 (p32). Comparisons were drawn between trends in performance management and productivity culture at large, foreign owned firms as compared to familyowned SMEs in the UK.
The conclusions of the debate were not sensational, but were level headed. It really doesn’t matter who owns a company. All that matters is that they are committed to its long-term sustainability and take responsibility for the welfare of employees, wherever they may be. These are not business traits which can be ascribed to any specific nationality – only to good management. With this in mind I look forward to a busy summer with readers at the magazine’s increasingly vibrant set of Future Factory events, each of which has something to add to the sound management of a manufacturing firm in the UK. From clarity on the steps to creating a flexible workforce – capable of working and innovating autonomously – to understanding effective energy management strategies and more, the programme is relevant to the UK’s manufacturing challenges (p16). There’s no doubt, there are many of these. But, as always, it is heartening to report that a heap of entries to ’s Manufacturer of the Year Awards are already piling up, demonstrating that firms large and small are finding ways to overcome these challenges and compete in a global marketplace. Don’t forget to get your entry in before July 31 and in the meantime, happy reading.
Jane Gray Editor June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 1
Editorial Advisory Board
The Editorial Advisory Board ’s editorial advisory board provides insight and guidance to the editorial team on a regular basis, helping maintain the relevance and quality of the magazine’s content, both in print and online. The board also provides diverse and expert comment on key industrial developments.
Deirdre Fox
Hywel Jarman
Tony Hague
Division Director, Drive Technologies, Siemens
Andrew Churchill Managing Director, JJ Churchill
Simon Edmonds Director, the Catapults Programme
Anna Schlautmann, 21: 3rd Year Logistics Apprentice, MBDA and ’s Apprentice of the Year 2013
Ross Meikle
Steve Evans
2 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
Global Manufacturing Director, Accolade Wines
Ben Taylor Assistant CEO, Renishaw Plc
Dave Mooney Managing Director, Drallim Industries
Pamela Petty Director of the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability
Philip Greenish CBE Quality Improvement Manager, Hayward Tyler and ’s Young Manufacturer of the Year 2013
Richard Lloyd
MD, Power Panels Electrical Systems and Chairman of the Midlands Assembly Network
Andrew Peters
would like to congratulate editorial board member Andrew Peters on his appointment as managing director of Siemens award winning motion control manufacturing facility in Congleton. We wish Andrew every success in his role there and thank him for his continued commitment to the editorial advisory board.
Director of External Affairs, EEF
Director of Strategic Business Development, Tata Steel
CEO, the Royal Academy of Engineering
Managing Director, Ebac Group
To find out more about our Editorial Advisory Board and the work they do to improve The Manufacturer magazine’s offering to its readers, go to: www.themanufacturer.com
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June 2014
08 News and regular columns A summary of manufacturing news and events with commentary on industrial research and policy 21 Apex column Why manufacturers are embracing automated dispensing as a best practice 24 Naked Engineer 28 Out & About visits Stadco, Marshall Amplification and Allied Bakeries 30 Best of Online What you wanted to read most on ’s website in May 32 Hot Topic: Productive Debate Jane Gray reports from the National Manufacturing Debate 34 Sector Focus: On the Road Again British automotive manufacturing is on a roll – but is the tread on its new wheels durable? 42 Interview: Crème de la Crewe Bentley Motors’ Michael Straughan talks to Callum Bentley about the lows and news found highs of his career and reveals what lies ahead for one of Britain’s best known luxury car brands 45 60 second interview: Chris Aylett, Motorsport Industry Association 46 From Flanders fields In the advent to the 100th anniversary of the First World War Scott Addington takes a look at the influence the world’s first global conflict had on armoured car development.
Pillar features Manufacturing Leadership 52 Fantastic Plastic: On his retirement as director general of the British Plastics Federation, Peter Davis assesses the importance of plastics manufacturing to the UK’s past, present and future industrial competitiveness 56 Learning to Lean: Victoria Fitzgerald brings you the best of Lean Management Journal. The latest issue explores lean applications in the public sector Other topics in the section: RBS explains how exchange rates are leaving the UK competing for competitive edge
Workforce & Skills 60 Employee of the Month: Lisa Parkes, quality engineer, Stadco 62 Taking it to the top: Victoria Fitzgerald reports on the launch of EEF’s second FTSE 100 Women in Manufacturing Report 64 Snapshots: The results from Renishaw’s Skills Gap programme pilot and news from the National Apprenticeship Competition Other topics in this section: Anticipation of National Women in Engineering Day, June 23
IT in Manufacturing 66 Game on: Malcolm Wheatley explains what gamification could mean for manufacturing firms
6 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
CONTENTS
Finance & Professional Services 69 Snapshots: Funding for operations and maintenance suppliers to the UK offshore wind sector and increased fund limits for ECFs at the Business Bank 72 When funding works: High tech printing equipment manufacturer LumeJet has seen the light
Manufacturing Technologies 74 Automatic for the People RDM Group is accelerating the arrival of driverless vehicles. James Pozzi reports 75 Hauser’s back Jane Gray brings news of the Catapult network progress review 76 Last Word: Jane Gray calls for the manufacturing sector to make a social contract
OUTBOUND REPORTS Energy Management How can renewable energy sources help you take control of your energy security and costs?
University Collaboration What does the UK’s academic community have to offer the manufacturing sector?
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NEWS
www.themanufacturer.com/news
Manufacturing investment
AMSCI received a £100m boost for automotive and aerospace. A research and development fund created for the automotive and aerospace industries received £100m from the Department for Business Innovation and Skills. The Advanced Manufacturing Supply Chain Initiative (AMSCI) will distribute the sum to around 49 successful companies across both sectors. It follows £245m allocated to the initiative since its inception in 2011. The money will also be used to help companies in UK rail, renewable energy, chemical and nuclear sectors. The AMSCI project is expected to create and secure over 11,000 jobs in UK manufacturing. The new technology director for the Institute for Advanced Manufacturing and Engineering at WMG aims to raise £5m for research funding in first year. The institute, which was founded as a collaborative project by Unipart Manufacturing and Coventry University, will focus on developing new forming, joining, metrology and simulation processes and has been dubbed the “faculty on the factory floor”. James Simester recently joined the Institute from Jaguar Land Rover and is keen to secure research support for the development of next generation fuels and powertrain systems for the automotive sector.
Manufacturing growth
Activity in UK manufacturing remained strong in May. According the latest CBI Industrial Trends Survey output volumes grew at the same rate as in the previous two months. Stronger growth is also anticipated for the coming quarter. Of the 437 manufacturers surveyed, 36% said output volumes had increased over the past three months. The report revealed firms expected output to grow in the coming quarter, with 39% predicting growth and 7% a decline, giving an overall balance of +32%. Total order books were above the longrun average. Export orders remained solid by historical standards but fell below normal, mainly driven by the chemicals and automotive sectors.
8 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
Fracking could allow the UK to access enormous oil reserves according to BGS
Energy
A new report claimed the UK is sitting on billions of barrels of oil requiring fracking to extract. A survey from the British Geological Society (BGS) states there is about 1329 trillion cubic feet of unexplored oil reserves in the UK. Large amounts of this is lying under Sussex, Kent and Surrey. Fracking has met popular resistance due to environmental concerns regarding subsidence and contamination of water systems. Controversy persists despite reports from the Royal Academy of Engineering and the House of Lords deeming the process a “national priority”, as well as safe if conducted responsibly. Government believes a fracking boom could help the UK’s economic recovery, bringing benefits to industry through reduced gas prices. This has been the pattern in the US where the exploitation of shale gas has supported a surge in manufacturing productivity in recent years.
Sony’s site in Wales will welcome young blood following a new recruitment drive
Manufacturing recruitment and skills
Sony’s UK Technology Centre launched an apprenticeship and graduate recruitment drive. The UKTEC centre is where the electronics giant manufactures its professional and broadcast camera systems. Situated in Pencoed, the firm is seeking young people with an interest in engineering and business to apply for its new education programmes, due to begin in September this year. Five apprenticeships will be available on a four-year programme, which will lead to a Higher National Certificate (HNC) Level 4 – the equivalent to one year of university study. Steve Dalton OBE, managing director of Sony UKTEC, said students would develop their technical knowledge at the nearby Bridgend College.
E20001-F460-M101-X-7600
Efficient automation starts with efficient engineering Totally Integrated Automation: Efficiency driving productivity. siemens.com/tia Efficient engineering is the first step for making things right: faster, more flexible, and more intelligent. Totally Integrated Automation saves time in engineering as a result of the efficient interoperability of all components. The result: lower costs, faster time-to-market and greater flexibility. Totally Integrated Automation Efficient interoperability of all automation components
Totally Integrated Automation spans the entire production process while significantly increasing productivity. Common characteristics create real value added, in all automation tasks: • • • • •
Integrated Engineering Industrial Data Management Industrial Communication Industrial Security Safety Integrated
Telephone: UK: 08458 507600 IRE: 1890 507600 E-mail us: Sales.gbi.industry@siemens.com (Product Sales, Quotes, Order & Delivery) Service.gbi.industry@siemens.com (Technical Support, Spares & Service Engineers) Website: www.siemens.com/industry
Answers for industry.
NEWS www.themanufacturer.com/news
Manufacturing investment
Aerospace manufacturer Cobham entered a conditional agreement to buy Aeroflex. The deal, announced on May 20, includes taking on the test and measurement equipment manufacturer’s £321m debt. If the deal progresses, Cobham will pay $10.50 per Aeroflex share, 26.1% more than the closing stock price on May 19, the day before the announcement. Aeroflex motors and wireless systems were used in the wheels, antenna and robotic arm joints of Nasa’s Mars rover, Curiosity. Northumberland-based fire systems manufacturer Advanced Electronics was sold to Halma Plc. Halma, based in Amersham, Buckinghamshire, acquired Advanced Electornics for an initial £14.1m with potential deferred consideration of up to £10.1m based upon earnings growth to March 2015. Halma, a safety, health and sensor technology specialist was described as a “perfect partner” by Advanced Electronics managing director Ray Hope. 15 year old Advanced trades in more than 60 countries and posted sales worth in excess of £14m in 2012.
Tesla now employs 6,000 people in California
International manufacturing
Tesla overtook Toyota as California’s largest auto employer. Electric car-maker Tesla has cemented itself as California’s largest automotive employer announcing that it now employs 6,000 staff in the state. According to Tesla’s Simon Sproule, the firm looks to add a further 500 staff by the end of 2014. The title of state’s largest car-maker was previously held by Japanese firm Toyota which currently employs 5,300 people in California.
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NEWS www.themanufacturer.com/news
Energy
Siemens won a £1.2b wind turbine project in the Netherlands. The German power equipment manufacturer will supply 150 turbines for the Gemini offshore wind power project in the North Sea, Netherlands. The firm will provide turbines with a capacity of 4MW and a rotor diameter of 130m to the 600MW, £2.4bn scheme. The contract includes a provision service and maintenance for 15 years. The project, once fully commissioned, is set to produce clean energy for one and a half million people, with a 2.6TWh of electricity capacity a year. The amount of energy is reported to equal an emissions decrease of CO2 by 1.25m tons annually.
Automotive
A Coventry-based firm was will make self-driving vehicles for UK pavements. RDM Group was announced as the manufacturing partner for the Low Caron Urban Transport Zone (LUTZ) Pathfinder project. The project will see electric powered pods used in Milton Keynes next year. The company was selected by project managers Transport Systems Catapult (TSC) following an open OJEU tender process, beating off competition from five other bids thanks to its track record for advanced vehicle design, niche builds and software development. This will allow Oxford University robotics experts to install their technology and begin test-track trials in early 2015, before being tested on the pavements of Milton Keynes. Read more about the driverless vehicles on p74.
Siemens offshore wind deal in the Netherlands is worth £2.4bn
Recruitment
Manufacturing growth
Tenneco-Walker to create more than 200 jobs in Merthyr Tydfil. The Wales-based manufacturer, which also employs 190 at its Tredegar site, is to create 224 new jobs in total while maintaining 36 people across its Welsh manufacturing workforce. The new site, due to open later this year, will focus on the manufacture of added value component parts and undertake sub-assembly and final assembly exhaust system production. Welsh economy minister Edwina Hart, whose government part funded the investment, said the investment is important both for the town of Merthyr and Wales as a country.
Manufacturing in Yorkshire outperforms the rest of the UK. Data compiled by insolvency organisation R3 showed 20% of the county’s manufacturing companies were at risk of insolvency, the smallest number of any of the listed regions. Despite all regions seeing a minor increase in the rate of high risk businesses in the sector since the previous month, research showed Yorkshire remained steady throughout the past six months. Yorkshire was followed by the North East region, which performed strongly with 21%, while the poorest performers were London (30%) and the South East (25%).
Bentley drives recruitment surge at its Crewe factory. Bentley Motors announced more than 140 new jobs would be created at its headquarters in Crewe. The manufacturer said it would include 90 skilled engineers and 51 new apprentices in its recruitment drive, the biggest single apprentice intake in ten years. The announcement follows Bentley’s record year in 2013, delivering 10,120 cars, the highest in the company’s 95-year history. 90 new engineers will work on an expanding model range as part of a £800m investment over three years on model and facility development. Bentley’s engineers bring together anything from traditional skills associated with natural materials with the latest developments in powertrain technologies.
12 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
UK poised to rival China as top manufacturing growth nation. Global manufacturing executives ranked the UK alongside China as one of the top destinations for future sales growth, a recent report has shown. In audit firm KPMG’s Global Manufacturing Outlook, the UK placed joint second with China as a country where global companies expect to derive the majority of their sales growth over the next two year. The UK ranked above countries including Germany, India and Japan. Of the 460 global executives surveyed, only the US (45%) bettered the UK and China’s tied score of 17%.
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NEWS www.themanufacturer.com/news
Automotive
Porsche to be sued over Paul Walker death crash. The luxury car manufacturer is reportedly being sued by the widow of a man driving one of its sports cars who was involved in the crash that killed Hollywood actor Paul Walker. Kristine M. Rodas, the wife of Roger W. Rodas, has reportedly filed a wrongful death lawsuit which claims design flaws in the 2005 Porsche Carrera GT were responsible for the deaths of both men in California last November. The lawsuit claims the 200mph top speed vehicle lacked a suitable crash cage and proper safety features in the fuel tank that would have saved the lives of her late husband and Fast and Furious star Walker.
BAE Systems has finished the 150th F-35 rear fuselage set
Exports
Lord Livingston urged investment in food and drink exports. The APPG for Trade & Investment held a seminar and reception at the Houses of Parliament to discuss export opportunities for the British food and drink industry. Trade Minister Lord Livingston spoke at the event, which provided a chance to praise the success of UK exports while highlighting barriers to driving growth. Other speakers included representatives from Nestlé UK and Ireland, Diageo, Quickes Cheese, the Wine and Spirit Trade Association and Scotch Whiskey Association. In 2013, UK exports grew by 5% to £12.8bn. Including alcoholic drinks, total food and drink exports were £19.4bn, up 3.7% on 2012.
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Aerospace
BAE Systems completed the manufacture of the 150th F-35 rear fuselage and tail set at its military aircraft factory in Lancashire. The 150th aircraft set, known as AF070, is a Conventional Take Off and Landing variant destined for the US Air Force. More than 500 UK companies partook in its construction. Following its assembly at BAE Systems’ site in Samlesbury, it will be married up with the rest of the aircraft at Lockheed Martin’s assembly facility in Fort Worth, Texas. Jon Evans, head of production delivery, F-35 at Samlesbury said the capabilities of the site are a result of recent investments made by the defence company.
With not enough young people taking Science, Technology, Engineering and Mathematics (STEM) at further education, many UK companies are facing a skills shortage. Independent, educational charity, The Smallpeice Trust is passionate about closing this skills gap and enthusing the next generation of engineers. Working in partnership with some of industry’s leading organisations, we offer students an engaging, hands-on introduction to the rewarding careers available to them. From sponsoring STEM Days and Clubs, to mini competitions and residential courses, there are many ways in which your company can get involved with The Smallpeice Trust. To find out more about the benefits of being a Smallpeice Partner, contact our Chief Executive, Dr. Kevin P Stenson on 07899 663 280 or email kevins@smallpeicetrust.org.uk.
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www.smallpeicetrust.org.uk 14 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
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MANUFACTURING NEWS
Company announcements
Sheffield Forgemasters joined the Wales Tidal Industry Advisory Board. The heavy engineering specialist has become the first manufacturer outside Wales to join a best-in-class consortium on the Wales Tidal Industry Advisory Board. The board, established earlier this year is made up of senior business owners and directors in Wales. Its aim is to maximise the potential of a tidal lagoon industry in the area. It opened its ranks to include representatives from skilled suppliers across the UK who can make critical components to support the proposed Swansea Bay Tidal Lagoon project. Gareth Barker, managing director of Sheffield Forgemasters’ forgings division, will take a seat on the board.
Textiles
Oliver Harvey won a contract to supply chefs’ attire to Claridges. The textiles manufacturer, founded in 2010, is one of only a few manufacturers of chefs’ clothing in the UK. The new contract with the prestigious London hotel will require delivery of more than 200 chefs’ jackets and almost 500 aprons over two years for the luxury establishment’s new restaurant Fera. The aprons will carry a bespoke design for the restaurant. Oliver Harvey’s Manchester-based factory produces about 1,500 items of chefs’ attire a month.
Manufacturing IT
Firms were urged to make cyber security a priority to improved online safety and reputation. According to new data from the government’s Cyber Security Tracker, 23% of UK businesses have suffered from a virus, trojan, malware or spyware attack in the last year. While 49% never or rarely monitor their IT systems for security breaches. Many businesses confess rarely or never using complex passwords (34%) or encrypting files containing confidential or business critical information (66%) despite 10% having incurred costs to restore affected IT systems over the past 12 months.
Dates for your diary JuneCranfield University will host the 4th UK Algae Conference.
17
The event will focus on the theme of ‘Transferring pioneering algae research into industrial applications’. It’ll bring together professionals from across the algae sector for sessions on the latest developments in algae science, genetics and applications to sectors including wastewater and food production. bit.ly/CranfieldConf
24-25
The annual Global Manufacturing Festival brings together over 1000 SMEs along with global industry names at the Advanced Manufacturing Research Centre in Sheffield, as part of the UK’s International Festival for Business 2014. www.globalmanufacturingfestival.com
JuLY
2-4
The 2014 International Conference of Manufacturing Engineering and Engineering Management will take place in London. The event is organised by the International Association of Engineers (IAENG), and serves as good platforms for the engineering community members to meet with each other and to exchange ideas. bit.ly/MfgandEngManagement
7-11
The Additive Manufacturing and 3D Printing International Conference takes place in Nottingham in July. Providing a platform for additive manufacturing users and researchers to keep abreast of latest industry developments, the event aims to impart to industry and academia how to exploit commercial advantages. www.am-conference.com
14-20
The Farnborough International Airshow returns this July. The event brings together the big names from the world of aerospace and celebrates 100 years of aviation history. It will also feature the newly introduced Farnborough Airshow Live, the interactive live stage show with fun and colourful presenting, competitions and interviews. www.farnborough.com
27-28
This year’s International Conference on Automation and Intelligent Manufacturing will take place in London. The ICAIM 2014 aims to bring together leading academic scientists, researchers and research scholars to exchange and share their experiences and research results about all aspects of Automation and Intelligent Manufacturing. bit.ly/AutandInteligentMfg
JuneThe British Family Fayre will take place in Kent this August.
30
The brainchild of the Bradshaw family, who lived solely off British goods for a year, returns for its second successive year following 2013’s event being attended by 4000 people. Manufacturers from across the UK will be on hand to provide workshops for guests. www.britishfamilyfayre.co.uk See more upcoming events at www.themanufacturer.com/diary
June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 15
UPCOMING EVENTS
5th Annual LMJ European Conference
Manufacturing Sustainability
25 and 26 June 2014, London
9 July 2014, Manchester
This year’s 5th Annual Lean Management European Conference brings to you a cutting edge programme designed to challenge the most experienced lean practitioners managing lean programmes across countries, sites or teams. During the conference you will hear from international keynote speakers, learn from breakout case studies, discuss thoughts during Ideas Exchange Cafe, participate in workshops and will have the opportunity to network during the LMJ leader networking dinner.
It is an important issue for every company with the focus on delivering innovation and installing sustainable manufacturing processes, with the ultimate goal to conserve natural resources for future generations and reduction of costs. This conference will look at reducing environmental impact of new production facilities, all existing factories and ensuring new goals exceed expectations. themanufacturer.com/ sustainable2014 In partnership with
leanmj.com/ annualconference2014
Flexible Workforce 9 July 2014, Manchester It is increasingly important for employers to be able to correctly manage and retain human capital within the manufacturing industry. Workforce flexibility can, if managed effectively, allow companies to maximise workforce effectiveness and productivity by altering the time, location and manner in which employees work to meet both individual and business needs. themanufacturer.com/ flex2014
Energy Management 9 July 2014, Manchester The rising cost of energy, the long term security of supply and environmental footprint are one of the most important challenges faced by manufacturers today as well as central themes in long term strategies. The one day conference will focus on areas of efficiency, procurement and security, aiming at sharing best solutions and practices in order to achieve right energy management strategy. It will also look at the wider energy trends and government regulations to see its implication for the future of your business. themanufacturer.com/energy2014
The Manufacturer of the Year Awards 2014
The Manufacturer Directors’ Conference 2014
Entries close: 31 July 2014, Birmingham
26-27 November 2014, Birmingham
The Manufacturer of the Year Awards is dedicated to recognising and celebrating industry achievement and highlighting the diversity and strength of UK manufacturing. The awards aim to spread best practice, inspire others and show the important role UK manufacturing plays in today’s economy. Showcase your achievements and earn industry-wide recognition for you, your employees and your business.
The Manufacturer magazine invites you to join senior manufacturers for the The Manufacturer Directors’ Conference. Now in its sixth successful year, The Manufacturer Directors’ Conference will bring together a wealth of knowledge from across industry, government and academia. With a mixture of debates, manufacturing case studies, hands on workshops and practical presentations.
themanufacturer.com/awards
themanufacturer.com/events
To see a full events listing please visit: themanufacturer.com/events 16 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
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APPOINTMENTS
Neil Grocock
Burton’s Biscuit Company
Burton’s Biscuit Company, owner of the Maryland and Wagon Wheels brands, announced the appointment of Neil Grocock as its new chief operating officer. Having previously held the role of chief supply chain officer, Mr Grocock’s
Andrew Stark
activities under Neil’s leadership since he joined us in 2010. “I am delighted to recognise Neil’s terrific contribution to the business with this new role.”
industry working for Multivac across several roles. PPMA Group chairman, Richard Little, said: “Andrew has many years’ experience of the packaging machinery market, including in-depth knowledge of end users and the supply chain.”
“He will add value to the already excellent PPMA team and allow us to build on our rapid progress in developing our PPMA Show and related events, and also facilitate the introduction of new strategic initiatives such as the PPMA BEST (Business, Education, Skills and Training) programme.”
across the breadth of the thematic innovation programme. Baughan joins from Virgin Media Business, where he was responsible for the company’s technical strategy, which included guiding the company into leadership positions through the rollout of
next generation broadband (DOCSIS 3.0) and TV (Tivo) platforms. Having achieved BSc, MSc and MBA qualifications, Baughan was also an honorary professor from 1999 to 2008 at Birmingham University, where he advised the University’s communications research team.
increased demand influencing Pets Choice’s growth plans. He will be charged with managing and progressing key retail partnerships to aid business growth ahead of the company’s move to a new facility later in the year.
Tony Raeburn, CEO of Pets Choice said: “Vic’s wealth of experience and enthusiasm for the pet food industry will be instrumental in building our business.”
With an extensive background in financing of securities, Gannon will play an active role in driving sales of the company’s consulting, advisory and processing services for trade receivables securitisation, supply chain finance and invoice discounting products. Demica CEO Phillip Kerle said: “Sarah’s abundant experience in driving better
client interactions and identifying growth opportunities, along with her background in finance, made her an ideal candidate for this role. “Her proven track record in developing strong relationships with key clients in her previous capacities will be an invaluable asset for Demica.”
PPMA
The PPMA Group confirmed the appointment of Andrew Stark as its new chief operating officer. Mr Stark, who started the role in May, comes from a sales and marketing background and has spent the last nine years in the processing and packaging
Kevin Baughan
Technology Strategy Board
The Technology Strategy Board appointed Kevin Baughan as the new director of technology and innovation. In his new role, Mr Baughan will lead the Innovation Programmes team and will develop and deliver innovation support for accelerating the growth of UK businesses
Vic Azam
responsibilities in his new role will broaden to include HR and IS. Ben Clarke, chief executive officer at Burton’s Biscuit Company, said: “This appointment recognises the highly successful transformation of all supply chain
Pet’s Choice
Pet food manufacturer Pet’s Choice appointed Vic Azam as its national account manager as part of its team expansion. The appointment of Mr Azam, who has experience working within Armitage Pet Care, comes at a time which sees
Sarah Gannon
Demica
Working capital solutions specialist Demica announced Sarah Gannon as its new director of business development. Ms Gannon will be responsible for establishing key customer relationships with financial institutions, private equity firms and large corporates across the globe, as well as developing strategic business plans to maximise sales opportunities.
To notify The Manufacturer of your company’s appointments, please contact James Pozzi at: j.pozzi@sayonemedia.com or: 0207 401 6033
18 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
HiETA
I
In our columns this year we have looked at the reasons behind the interest in additive manufacturing (AM) and the importance of skills and materials. Next? How is the technology currently being implemented?
n general the first step in the AM implementation process is the development of the business case. For large multinationals it is likely this process will be formalised; in SMEs and new start-ups, it is more likely to be based on the key decision makers opinion of the technology opportunities, benefits and financial tradeoffs. Once a positive decision is made the implementation cycle begins. Our research and experience has shown that trying to directly implement AM to produce very complex, optimised designs directly has often increased the implementation period, created issues and increased resistance to change. The introduction to AM can often be eased by using prototyping and tooling applications. These systems may have much lower capital investment cost. The ease of use and low running costs will also reduce the risk of failed implementation. At this stage it is not really about design for process, but getting parts out quicker or supporting a conventional development process. Companies may also look at AM production as a direct replacement to the conventional approach: Like-forlike parts. The challenge here is that such direct comparisons will often result in an uncompetitive AM offering unless the part selected is already suited to AM production – it has a high level of complexity, high skilled labour requirement or is an individualised or customised design.
3D IN FOCUS
It is important that these substitution applications are evaluated as a step to optimised design through AM production. So strong management support and a view of the strategic value is vital. The real business benefits of the process are achieved when the organisation starts to design-for-additive manufacturing and exploits its true advantages. This is where the mass fuel savings for the aerospace sector will be realised. It is where the possibilities for integration of many components can be achieved and the resulting product and supply chain performance benefits can be gained. This is the vision most of the advocates of the technologies offer. In reality, in most cases, the move from prototyping to full production is not going to be quick. Take GE for example. Arguably one of the best examples in current press is their AM fuel nozzle, with many thousands set to be produced for the LEAP engine with a design not possible through conventional methods. It has taken nearly 13 years to get there and they still have some distance to go. Nevertheless large OEM’s and agile SME’s are almost trail blazing the path and as a result generating capability resources and capacity to help other manufacturers understand, and then achieve, similar benefits. The industry is forecast to be worth $100bn by 2020. That’s a lot of trail blazing. Fortune favoured the brave in the industrial revolution of the 19th Century. It will be no different in the 21st.
HiETA will be at the Manufacturer’s Future Factory event on Additive Manufacturing ad 3D Printing. At the event there is an opportunity to explore some of these examples and the technology more interactively. Hosted on June 11th at the Nation Cycle Museum the conference is concentrating on recent developments and how companies can understand and exploit the new technology. To find out more contact Mike Adams at mikeadams@hieta.biz or go to www.hieta.biz June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 19
25th and 26th June 2014 Radisson Blu Edwardian Heathrow Hotel, LONDON
5th Annual LMJ European Conference 2014 A cutting edge seminar programme designed to challenge the most experienced lean practitioner managing lean programmes across countries, sites or teams The 5th LMJ European Conference programme has been created to challenge the most proficient lean practitioners. It will deliver workshops and presentations by experts from across the industry and academia to explore the application of lean principles in environments from telecommunications to manufacturing. This two-day conference will provide you with inspiration, learning and networking. It has been constructed to develop you and your team’s competency through: • International Keynotes • Workshops • Breakout Case Studies • LMJ Leader Networking • Ideas Exchange Café Dinner
ESSENTIAL CONFERENCE FOR: • Private and public sector • Process/operational excellence directors and organisational leaders managers • Leaders of improvement • Lean managers and or transformation directors initiatives in multi-site or enterprise-wide • Change management programmes managers and directors • Global or multi-site operations and Earl production directors di y boo
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APEX SUPPLY CHAIN
G
Why Manufacturers are Embracing Automated Dispensing as a Best Practice
lobally, millions of organizations spend billions of dollars per year on supply chain logistics. They rely on the same manual processes today to supply parts, materials and equipment to their employees as they used twenty years ago. All too often this leads to misuse, loss of productivity, waste and downtimes. More importantly, these inefficient processes can result in loss of productivity, out-of-stock scenarios, costly fees for rush orders, and sometimes-bloated inventories. These challenges are faced by many manufacturers around the UK, and are the leading cause of the acceleration of the adoption of Automated Dispensing Systems. Over the past several years, both manufacturers in the UK and their suppliers have recognized the need for and the benefits of deploying automated dispensing systems. From vehicle manufacturing, heavy equipment, pharmaceuticals to industrial manufacturers and food processors, a growing number of UK manufacturers including JCB, Stelrad and Bespak among many others have adopted Apex Connect n’ Go Technology. In addition to the general need to become Lean and reduce costs, the accelerating adoption has also been driven by Apex commitment to support users of its technology in the UK. From its support hub, customer experience center and build center in Worcester, Apex provides an unprecedented level of implementation and technical support previously unavailable in the United Kingdom. Automated Dispensing eliminates the challenges of traditional manual systems and places your mission-
critical supplies and materials at the Point-of-Work. Automated Dispensing devices ensure that mission-critical tools, supplies, materials, equipment and assets are always on hand, never out of stock, so that workers stay on the job, productivity remains high and your lines keep running. Automated dispensing devices can provide an immediate reduction in consumption, typically 25% or more. The most popular devices are Internet Appliances that include enterprise cloudbased technology platforms, such as the Apex Trajectory Cloud™, which gives supervisors visibility into each transaction in the device. The machines can limit access to high-cost items to workers whose roles require them. It can track if an asset or tool is not returned at the end of a shift. The system can also send an email alert to a manager. Workers, on the other hand, assume more accountability for these critical supplies, tools and assets and are less likely to waste or misplace them. Moreover, real-time reporting can notify management and suppliers of inventory levels and send alerts when restock is necessary. In this way, reordering is automated and production will never be interrupted because of a shortage of tools, materials and equipment. The benefits extend beyond costsavings on consumption. Significant productivity gains can be realized as well. In most current systems, employees to walk to a tool crib or storeroom each day, often multiple times a day. As the shift continues and tools and supplies are needed, several more walking trips may follow. Even more time passes while workers wait in line for these items to be handed out by an attendant. This lost “walk and wait” time keeps workers from
their primary job responsibilities. It can be a significant, and often hidden, drain on the overall productivity of the operation. Critical tools, materials and supplies that are consistently “lost” can be another source of waste. Time is lost searching for these items. Production may be delayed. Replacement costs and delay fees can mount. The solution comes from automating the supply of commonly used items through Industrial Vending devices that are strategically positioned at the Point-of Work. Employees waste less time walking to the distribution point and increase the number of hours spent on task. When adopted throughout the entire enterprise, the technology can quickly lead to immediate cost savings and a dramatic improvement in overall productivity. Automated Dispensing devices from companies such as Apex Supply Chain Technologies are available in customized configurations to match users’ inventory, access requirements, and many other variables. Breakthrough Connect n’ Go Technology™, developed by Apex Supply Chain Technologies has made automated dispensing much more affordable than ever before. It also makes implementation quick and easy. This has ignited a worldwide trend to replace outdate systems with these automated systems. The low-cost of Apex systems also enables new supply partnerships between manufacturers and their suppliers. Often suppliers provide the technology and various replenishment services to their manufacturing customers as part of a bundled supply program. It all begs the question – how to get started with an automated dispensing solution? Adoption of this technology can often be a collaborative process with the manufacturer’s supplier partner. Forward -thinking product suppliers who develop partnerships with Apex have access to the machines, the inventory to stock them, and the expertise to maximize their value. Talk to your supplier about the possibilities, and ask about solutions from Apex. www.apexsupplychain.com June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 21
POLICY POINT & BACK TO SCUOLER
Policy Point. Sahar Danesh, principal policy advisor for Manufacturing Institution of Engineering and Technology states why it is so important for manufacturing to maintain its recent increase in momentum.
‘‘F
orget the traditional image of a struggling manufacturing sector: UK manufacturing is thriving”. This was the message of the Engineering the Future report An insight into modern manufacturing, which was reinforced by manufacturing industry representatives at the report’s launch in May. Manufacturers are upbeat about their sector, which has become increasingly innovative and diverse, despite the economic slump in recent years. But although they are positive about their businesses now, they do have concerns about the skills shortages and want increased two-way dialogue with Government to ensure the sector can fulfil its great potential for growth in the future. In the report we aimed to find out what could be done better to help future development and growth in manufacturing. One of the manufacturers interviewed for the report was Andrew Churchill editorial board member of and managing director of JJ Churchill, a precision manufacturing company based in Leicestershire. His company is typical of the manufacturing businesses that have prospered in recent years. Seeing the recession as a golden opportunity to invest in long lead-time equipment at sensible prices, JJ Churchill brought forward its capital investment programme. As a result, it was able to boost staff morale during a difficult time. And then, as the recovery has started to happen, it was able to leapfrog competitors. In the report, manufacturers emphasised the fact that Government support needs to be long term and be accessible for smaller manufacturers, as well as larger ones. The priority now must be to make sure the messages from this report and the other major manufacturing reports are promoted extensively. The manufacturing industry is proud of its growth and development and we need to make sure that we can make more people aware of how much value investing in this industry can bring to the UK economy.
22 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
Back to scuoler.
T
EEF’s Terry Scuoler uses the approaching midyear point to reflect on recent UK export efforts.
wo years ago the Chanellor announced a target for the UK to double its exports to £1 trillion by 2020. This would involve the UK achieving almost Asian Tiger type growth of around 10% per annum between now and then. So as we approach the mid-year point, now is a good time to assess the UK’s progress. The latest monthly data shows goods exports rose in March but this was not enough to offset weakness earlier in the quarter. The first quarterly trade statistics for the year again presents a mixed picture of export performance, with some bright spots against a continued decline in the value of goods exports. Positively, we saw another narrowing of the goods trade deficit in the first quarter of this year, driven by an improvement in the trade balance with EU countries. Industrial production figures also show strong momentum in the manufacturing sector, which is responsible for approximately half of the UK’s overall exports. This strength has led to manufacturing output reaching its highest level in more than two-and-ahalf years and highlights the sector’s pivotal role in supporting the UK’s recovery. EEF’s Executive Survey 2014 and Business Trends Survey show manufacturing firms are confident of further production gains throughout the course of this year. Not content to just wait and see how export demand develops, manufacturing executives are actively seeking to improve their opportunities overseas and minimise risks and uncertainty. Whilst the Eurozone remained the top destination for market involvement in 2013, almost two thirds of companies were planning to increase their involvement in Asia, just over half in the Middle East and just over one third in both Africa and South America. This highlights that building resilience by selling into new markets and actively boosting their marketing efforts overseas are some of the ways in which manufacturers are responding to the economic environment. The figures highlight that business is committed to boosting UK exports but given the stretching target there is little doubt it will require continued and concerted action from companies as well as consistent support from government.
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June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 23
NAKED ENGINEER
Naked engineer Going postal going global In light of recent US/UK takeover attempts, our Naked Engineer shows that no matter the outcome, a silver lining can still be found.
S
tride manfully into Hemlock towers about 11.45am nursing something from Dante’s Inferno in my head - just in time to beat Sir P in the door. Red-eye back from Alabama with the Greek after failed takeover talks with a US metalbasher. Flight came as a blissful end to three days with chairman Billy-Bob Goetshagger and side-kick Wayne Horsflinger. Suffering incessant Gospel music interspersed with Country and Western, or God-forbid, that new fusion, Country and Gospel, saps our will to live and we realise it might not be such a great buy. Once our multi-zillion-dollar-a-minute US lawyers inform us that we have to take on a bunch of absurd liabilities, and worse, the so-called ‘special relationship’
I didn’t realise Camo had signed us up as the 51st State
24 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
means that, fine and upstanding British business as we are, we’d be subject to the whims of US state department size 11 shenanigans, decision’s made. Some confusion with our American hosts over the word shenanigans leads to an embarrassing moment involving Billy-Bob’s wife and her pet Chihuahua. “Bugger this for a game of soldiers,” I say to Jimmy. “I didn’t realise Camo had signed us up as the 51st State. Special relationship, my arse. About time he told Obama where to get off.” None of this endears me to their uberdemocratic chairman, so we hot-foot it out of town and catch the next flight to Blighty. Manage to wangle upgrades to first on BA through outrageous flirting with the check-in girl. Forgetting that Fairey Swordfish bombers have already done the job, down enough whoosh to sink the Bismarck. Early lunch and hair of the dog in Cavendish’s follows my close brush with Sir Patrick, but does nothing to ease the pneumatic drill in my head or help me come up with a convincing scapegoat for Bob the Builder’s over-
budget construction of a new factory. Bob has done his bit in that so far noone has been even slightly electrocuted to death. Technically-speaking though, it’s a bit of a balls up-on the finance front. Under some bloody nonsense from the clowns at HMRC we had to elect or un-elect, or waive or not waive, who sodding knows, something about VAT. We hadn’t, and ended up paying stamp duty on the VAT – tax on the tax, the thieving bastards. Cost us an unbudgeted £280k and Sir P was bloody furious. Rumour has it he’s after my cojones on a platter as he’d earmarked the ‘under-budget’ for his expense account. Down to four Grand Prix this year then instead of the usual dozen. Make a decision involving bull and horns and head for Sir Paddy’s office where he’s ranting about the dearth of ‘entertainment budget’ to his PA. Not the smartest cookie in the jar, says she rather fancies the idea of a Grand Prix. Looks rather disappointed when I tell her it’s not pronounced like that. “Ahh…good news,” I say, hoping I can snatch something from the jaws of defeat. “Transmat fell through – not a good strategic fit,” I lied “so we’ve freed up several million in the budget. We can easily cover the factory extension and no need to cut back on the entertainment budget next year.” Haven’t seen a faster U-turn since Brown and the 10% tax rate. “Excellent!” beams Sir P. “All internal accounting then, so no need to mention anything to the board eh?” Any similarity of characters to persons living or dead is completely intentional.
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June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 25
Letters to the editor
Production lines
Letters to the Editor Anonymous
The recent National Manufacturing Debate at Cranfield University discussed the UK’s productivity performance and ways to improve this. It is my view is that main problem is that the threat of takeovers causes public companies to be short-termist, which leads to the loss of manufacturing and the problems of the current account and fiscal deficits. Takeovers also lead to the loss of manufacturing companies. But I think that this is the lesser problem. The threat affects all companies, not just those being taken over. I believe that any benefit from foreign investment is far outweighed by the short-termism which results when public companies are constantly under the threat of hostile takeover. Furthermore, the words “takeover” and “investment” are not synonymous. In my experience “takeover” often ultimately leads to the export, not the import, of ideas, technologies and skills.
26 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
Tony Hague MD, Power Panels
There is much discussion and debate, quite rightly, on the need for UK manufacturing to take a more proactive and long term view of investment when it comes to automation. We often gaze with envious eyes at our colleague’s overseas – particularly Germany – who have stolen a significant lead over the majority of UK firms when it comes to investment in machinery. However, it should not be overlooked, that investment in machinery alone is not the answer. ‘People-power’ is also key. Many UK companies take a rather apathetic approach to developing their people, both in terms of technical skills and process knowledge. At best, they look for training that is ‘free’, but are not prepared to invest their own money. Narrowing their view to only look at fully funded schemes means employees often recieve a founding in ‘vanilla’ text book theory. They will not be helped to understanding its application to their particular environment. The benefit of this kind of training is not, or cannot be measured. Results will be scarce and company culture will not be improved. But who cares? It was free! We must do more to spread the belief that training is an investment, not a cost. It is just as important as looking at automation and process improvement as a means for sustained improvement and competiveness.
Joy Smith The Imagineering Foundation
For the UK to maintain a thriving competitive economy in the future it will need a dynamic, innovative engineering-based manufacturing sector and a pool of skilled engineers at all levels. Developing these skills has never been more urgent but these are not created overnight – and there we have the rub! I asked a classroom of 10year olds recently ‘What does an engineer do?’ I received a variety of responses from ‘repairs cars’ to ‘fixes Mum’s washing machine’, but amongst them was a little gem; ‘they design things’! Apparently this young chap’s dad is an engineer. This underlined the fact that we cannot wait until youngsters are 14 or 15 years old before we broaden their knowledge about engineering. We need to bridge that gap in understanding amongst youngsters when at a more impressionable age – a fact increasingly being recognised by a wealth of organisations from SMEs to global manufacturing giants and utilities. The National Curriculum may incorporate essential subjects but they are not always set in context with everyday life and the needs of modern manufacturing.
’s editorial team is out and about at a wide variety of industry conferences, debates and factory tours month in, month out. Let’s get a snapshot of the most interesting trips in May.
Go Go Stadco
I
Thumping, stamping, champing at the bit. There’s a lot going on at Stadco finds Jane Gray.
f you like seeing ‘proper’, gritty manufacturing involving massive chunks of kit, loud noises and pounding metal. Look no further than a tour of Stadco’s factory in Telford – or indeed its other sites. Yet this traditional image is also representative of a very modern firm – one which was bitten hard in the recession, losing around 40% of staff and turnover, but which has bounced back with sound management, strategic resolution and investment in people and technology. Stadco is the only Tier 1 supplier of bodyin-white panels in the UK – something of an indictment for the UK’s automotive supply chain but not a bad position for Stadco. The Telford site is a resurrection of an old competitor’s factory. Stadco bought the site in 2011 when Japaense stampings giant Ogihara decided there was not enough life left in the British car making industry to warrant its presence.
Today, Stadco is straining at the limits of its capacity. It’s in the midst of a £30m investment spree which will bring in four new Stamping lines. The first will undergo commissioning tests in June and the first two are already stacked to capacity with work for Jaguar Land Rover, Stadco’s key customer. Stadco does a lot for JLR. It produces panels for every JLR model to varying degrees – for the F-Type it makes all the panels and undertakes significant assembly work. But the relationship is not just about delivering product on time in full. It’s also about showing willing to collaborate on advances which will bring benefits to the industry as a whole, and to the environment – such as closed loop recycling of aluminium. In 2012, Stadco turned over £200m, up from £92m in 2010. What’s next? The world beckons. Stadco has a number of international joint ventures under its belt which prove its abiity to take a greenfield site through development and into production anywhere from Russia, to India and Brazil. Now the firm wants to go solo. And with a certain OEM also expanding production internationally, there are some obvious places to start. For an interview with Stadco’s manufacturing engineering director Paul Meeson go to bit.ly/ HighTechStampingGround. Stadco’s Lisa Parkes features as Employee of the Month p60.
28 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
Stadco used simulation technologies to refine the design of its new press lines
OUT AND ABOUT
A Marshall turns it up to 11 James Pozzi tours the home of Marshall, the iconic British manufacturer of music amplification equipment.
s far as surroundings go, for a brand so synonymous with rock and roll, the peaceful Buckinghamshire town of Bletchley isn’t the first place you’d expect Marshall Amplification to call home. Nevertheless, for almost 52 years, this has been the epicenter of many waves of music history. Founded by the late Jim Marshall in a West London music shop in 1962, Marshall has grown into a cultural icon. Having helped create sounds for everyone from Jimi Hendrix to Slash over the decades, Marshall’s manufacturing operations are an intriguing parallel of tradition and innovation. While there has been investment in new machinery and equipment, a lot of the assembly practices are reliant on the human touch. The wiring of an amplifier’s circuit boards resembles the same method used to assemble radios in the 1920s. What is palpable when touring the site is the profound influence Jim Marshall still has on the company two years after his death. Despite having a supply chain spanning many areas of the UK and out to Russia, the company ethos is to do as much as it can
in-house, including R&D and prototyping. The recipient of multiple Queen’s Enterprise Awards for Export and last year turning over £23m, the vast warehouse complex of Marshall’s factory illustrates the size of its global appeal. While the USA still accounts for the largest proportion of its sales, Germany is an expanding market. Danny Thomas, who has worked for the company for over 30 years, says Marshall is a key local employer with a high retention rate. “We very much have the mentality of a family-run business on site,” he explains. “There are people who have worked here for 40 years, and this extends from husband and wives, to parents and children.”
Allied Bakeries breaks bread at West Bromwich James Pozzi tours the newly upgraded Kingsmill factory in West Bromwich, the recipient of a £25m investment from parent company Allied Bakeries.
S
ince beginning in 2011, Allied Bakeries’ £210m UK wide improvement programme has so far seen large scale upgrades to other sites such as Walthamstow. Now it’s the turn of its West Bromwich site, the company’s main roll producing factory, to receive the improvement treatment. At the crux of a £25m investment is the installation of a new bread plant for increasing capacity. By doing this, West Bromwich now possesses the capability to produce 8,500 loaves an hour. Another
key objective of the upgrades has been to improve consistency and quality in products. Crucial to this is the use of band slicers to replace the old reciprocals, which has resulted in more even slicing of loaves. This is just one of a string of technology investments also including new ingredient mixing equipment and scales for more accurate batch weighing. Equally impressive is West Bromwich reducing its carbon footprint by 10%. This is aided by a decrease in energy used to reach the right baking temperatures through recycled air being placed back into the ovens used to bake bread. Midlands regional general manager John Jackson says the completion of the upgrades marks the start of an altogether more modern and efficient bakery.
“Investment and innovation has long been a real focus for Allied Bakeries as we look to the long term, and we’re excited to have finished the plant investment programme at West Bromwich – a programme that was started in 2011 with the installation of a new roll plant.”
June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 29
Best of http://www.themanufacturer.com
The topological view of the “goat’s head” front suspension component. Image courtesy of Bloodhound SCC
I
t seems rather appropriate this month’s edition is focused on the UK automotive industry, especially considering the majority of our most popular online articles were related to the power and drive of the sector in all its shapes and guises. Let’s take a look at what caught the attention of themanufacturer.com readers in May.
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Bloodhound brings them in Are the speedfreaks at Bloodhound SCC using animal parts in the construction of their land speed record vehicle? Surely not…
E
very time more specs about Bloodhound SSC’s incredible build process and vehicle are released, the more the public’s interest is captured. This was the case last month when themanufacturer.com hosted the latest blog and update from Bloodhound engineering lead, Conor La Grue. La Grue took the opportunity to talk about the latest addition to the land speed record vehicle – a “goat’s head”. No this isn’t some kind of ritualistic sacrifice the team from Bristol is using to please the 1000 MPH gods, it is in fact the hardest working, land-based vehicle suspension component in human history. “As a team we have a good or bad habit - depending on your viewpoint - of giving key assemblies for Bloodhound SSC nicknames,” La Grue wrote. “In this case, when the topological optimisation study was done on the front suspension, what the computers spat out looked spookily like a goat’s skull and the name has stuck ever since.” The suspension assembly was one of several milestones Bloodhound SCC ticked off in May, also adding the physical fulfilment of a four year development programme when the first desert spin test wheel arrived. It wasn’t with the team for long, as it was shipped back out the very same day for spin tests at Rolls Royce Derby. The test is a vital step to getting the car operational. When this test is a success the team can release the final design and machine the remaining wheels to make up both a full car set and a spare set. Read the full report from Conor La Grue at http://bit.ly/bloodhoundGoatsHead
30 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
Tracking your top reads on www.themanufacturer.com last month
Best of Online
UK Vs China Global manufacturing executives ranked the UK alongside China as one of the top destinations for future sales growth.
Get your motor running
I
Power, top speed and diesel. When we’re talking about cars, one of these words doesn’t really belong with the others. Or does it?
f there is one thing that is becoming obvious about theamnufacturer.com’s readers, it’s they love a good automotive article, especially in 2014. So far this year we have witnessed some massive movements in automotive including record profits across the sector coupled with some astonishing product launches such as the awe-inspiring P1 from the mechanical masterminds at McLaren in Woking. But it was a much more, shall we say, economical automotive product launch which caught themanufacturer.com’s readers’ attention this month. British sports car brand Trident announced the global availability of its Iceni sports car, the world’s fastest and most fuel efficient diesel sports vehicle. The vehicle, which has a top speed exceeding 190mph while being able to run for 2000 miles on a single tank of mineral or bio-diesel, uses torque multiplication technology to achieve its feats. Trident also unveiled two additional vehicles, the fastback Iceni Magna and the Venturer, its estate model, with each car now available with a starting price of £96,000.
Trident, which designs and manufactures its vehicles in Norfolk, patented a method of using torque multiplication to reach performance and efficiency, which it says it incorporates into all of its vehicles. German car maker Porsche also came under the microscope this month by readers, however for much more controversial matters. It was revealed that the wife of the driver of the Porsche Carerra GT which crashed, killing Hollywood star Paul Walker had filed a wrongful death lawsuit against Porsche, allegedly claiming the 200mph top speed vehicle lacked a suitable crash cage and proper safety features in the fuel tank that would have saved the lives of her late husband and Fast and Furious star Walker. Mrs Rodas claimed her husband was driving at 55mph and not at 94mph determined by crash investigators from the Los Angeles County Sheriff’s Department and the California Highway Patrol. Read more about the Trident Iceni at http://bit.ly/tridentdiesel and the Porsche lawsuit at http://bit.ly/1nTochM
I
n audit firm KPMG’s Global Manufacturing Outlook, the UK placed joint second with China as a country where global companies expect to derive the majority of sales growth over the next two years, beating the likes of Germany, India and Japan. Of the 460 global executives surveyed, only the US (45%) bettered the UK and China’s tied score of 17%. In a further boost to the UK, it ranked third (16%) as a country where companies expect profit growth over the next two years, coming behind second placed Germany (15%) and China, which scored highest with 18%. Stephen Cooper, KPMG’s UK head of industrial manufacturing, said the news is encouraging for domestic manufacturers and is a reflection of the UK’s growing confidence. “The UK economy overall is showing positive economic signs, while comparatively, some of our overseas competitors are on more shaky ground,” he said. Mr Cooper cited the fact the UK has a higher profit growth forecast than Germany as a particularly interesting statistic. “Germany traditionally has a reputation of being efficient in manufacturing processes, so one would expect them to rate perhaps higher than the UK as a naturally more profitable country for investors,” he said. “The wider Euro crisis and European debt issues may still have a lag impact on Germany.” Read more on the UK’s growth at http://bit.ly/UKsalesgrowth
June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 31
Productive debate Speakers set a high bar for discussion at the National Manufacturing Debate with insight into the productivity imperative, the wonders of incremental gains and the challenges of quantifying productivity in design.
‘‘P
assion alone is not enough,” Professor Rajkumar Roy told his audience at the National Manufacturing Debate at Cranfield University as he implored them to embrace global competitiveness through increased productivity. Yet as fundamental as productivity is to Britain’s competitive profile in the global marketplace – and as carefully as it is often monitored on the factory floor – the issue is one which has been glossed over in many industry debates in recent years. Instead, factoring challenges like skills gaps and access to finance have stolen the limelight. But this year Cranfield University felt the time was right to tackle this important issue head on. Other nations around the world, from China to eastern European nations and Australia have, or
Manufacturing Well-Being Profile UK vs US
A comparison between US and UK quality of life, as assessed using Cranfield’s new wellbeing index. The index is explained in the university’s white paper on UK Manufacturing Productivity
32 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
are developing, national productivity improvement programmes to boost them up the industrial value chain. Britain, says Cranfield, must not be complacent. To provide a foundation for debate on the best measures of productivity, Cranfield produced a white paper which it launched on May 21. Prof Roy communicated its findings. The report is challenging. It questions traditional or historically simplistic measurements of productivity, and the way in which these have been reported in the national press, distorting popular perceptions of industrial output and value add. Building on arguments made in the Foresight report Future of Manufacturing, Cranfield shows the merits of using a Total Factor Productivity measurement to reflect the activities of a high value manufacturing workforce. Under such a measurement, says Cranfield, the UK
Cranfield University’s leaders greet David Willett’s, minister for science (second l left), at the Nationa cturing Debate nufa Ma
is second only to the US for its rate of productivity growth, even though labour productivity is relatively poor. Cranfield’s white paper also builds on Foresight’s analysis of the social impact of manufacturing with a suggested “wellbeing index” which reflects how industrial robustness relates to wages, work-life balance, employment levels, safety and more (p76). Such considerations are important for a mature industrial nation as Professor Kagermann, German industrialist and leading light of Industrie 4.0 told delegates at a Royal Academy of Engineering event in February. The ability to demonstrate to German government that pushing out the boundaries of automation, the industrial internet, big data and analytics in a unified movement would bring sustainable industrial competiveness as well as social benefits was fundamental to gaining support from all parties, he said. Industrie 4.0 is now referenced as a matter for national interest in all major political manifestos in Germany.
Does size matter?
The white paper piqued the interest of delegates during the afternoon debate with questions interrogating the data involved and the consequent recommendations which were split into company size brackets. The data seemed to suggest, as Prof Roy put it, that family-owned manufacturing SMEs tend to struggle in creating a “culture of productivity” in their organisations, a theory which was explored in later debate. Ways in which to help create a productivity culture and provide a
Productivity
We must not shy away from productivity. Passion alone is not enough Professor Rajkumar Roy Head of Manufacturing and Materials Department Cranfield University
structured framework for productivity improvement were highlighted by Tracey Marsden, an employment lawyer working at Nabarro LLP. She showed how a proactive approach to performance management could increase output, innovation, quality and work satisfaction, amounting to complex productivity gains. A strong theme in Ms Marsden’s presentation was the powerful effect that responsibility can have on productivity and this was consistent with the message Richard Kenworthy, plant director at Toyota Deeside, communicated when he spoke to delegates.
Aggregation of marginal gains
Mr Kenworthy’s story of aggregating marginal gains to reduce engine manufacturing takt time by nine seconds without any additional staff of capital investment struck a strong chord with the audience. It’s an achievement Kenworthy insists is founded on giving responsibility and autonomy to employees to contribute small improvements to a common large goal. You can read more about this improvement journey at bit.ly/ToyotaDeeside Kenworthy’s contribution also made a strong impact on fellow speaker Warren East Former CEO of microprocessor design and IP company ARM Holdings. Like Kenworthy, Mr East expressed a high value for increasing productivity via an aggregation of marginal gains. He drew well documented comparisons with the evolution of competition in sport and the advance of competition in business to show that the era of great leaps in capability is largely over and that those who can see opportunities in the detail of operations are those who will continue to push the competitive envelope.
HOT TOPIC
Innovation and Productivity David Willetts, minister for science and universities visited the National Manufacturing Debate and primed the audience for an afternoon of discussion. He updated delegates on government’s efforts to support innovation, taking lessons from the US and Germany to establish a “richer mix” of research institutions in the UK including organisations which “fund projects much closer to market than we have traditionally done”. Successive publications have recognised the link between innovation and productivity. Specifically, researchers has drawn links between the intensity of trade-mark and patent activity in firms and their productivity.
Focusing on the alignment of gains in different business Therefore, in a question and answer session with the minister, it disciplines or was pertinent that questions focussed on government measures departments, East to support patent filling and the conversion of innovation into told his audience “I commercial capital. hate trade offs” and explained how he One question challenged the minister to explain why the UK has filed sought to optimise so few patents around the exploitation of innovations like grapheme, which was discovered in Manchester, compared to competitor efficiency and nations including Chain. Another question asked the minister if there productivity across is any evidence to show that the Patent Box has yet spurred more a business without patents to be filed in the UK. an advance in one area compromising In response to the first matter, Mr Willetts acknowledged that it was “a another. fair challenge” and made two points. He explored the difficulty Firstly, he said some would argue the UK is “smarter” in the patents of optimising it takes out, supporting quality rather than quantity. Secondly he productivity in the observed a lack of available leadership from sector primes in design “intangible” some areas to support the exploitation of patents. For example, he suggested Samsung, which does not manufacturer in the UK, process and urged would be the obvious prime to explore applications for grapheme. designers and In this scenario Willets said a “second best strategy” of becoming a manufacturers to European R&D centre for the prime is advisable. work more closely to find mutual On the impact of the Patent Box Willets said the Life Sciences sector productivity gains. has been strongly influenced by the policy, with GlaxoSmithKine Finally, East investing significantly on the heels of its announcement. considered the UK’s competitive However, looking more broadly, the minister said he was not aware position in of any evidence to link increased patent activity in other sectors with the global the Patent Box. market place. Despite being characterised with smaller firms that the US, East insisted that a high value FURTHER INFORMATION: business proposition can allow British firms to punch above their weight. You can read more about all the “We have a challenge of scale,” he presentations and interactions said. “But we can become very significant with the audience at the National within global industry structures.” Manufacturing Debate in the Other morning presentations were forthcoming report on the event. delivered by Dr Martin Howarth of Sheffield Hallam University’s National To access Cranfied’s White Paper on Centre for Food Engineering and UK Manufacturing Productivity go to David Caddle, area director for the bit.ly/UKMfgProductivity Manufacturing Advisory Service. June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 33
sectorfocus On the Road Again As Europe’s fourth biggest car producer, the UK automotive industry has benefited greatly from foreign investment over the last ten years. But can this boom be sustained over the coming decade? investigates.
O
nce an example of British industrial failure, the UK’s automotive sector is now the darling of politicians, a major source of UK employment and a busy technology investor. After the demise of Birmingham’s MG Rover, the industry hit its nadir in 2009 with output falling below one million cars for the first time in decades. But in the period since, it has turned its fortunes, risen like a phoenix from the still smouldering ashes of recession and reached new productivity highs. And it looks set to continue on this positive trajectory for the foreseeable future. In January, the Society of Manufacturers and Motor Traders (SMMT) announced UK car production had risen 3.1% on the previous year, marking a six-year high. Further findings show UK production levels are set to reach an all-time high of two million by 2017. This would better the national all-time high of 1.92m in 1972. Even to the staunchest of cynics, the UK
34
www.themanufacturer.com | June 2014 | Issue 5| Volume 17
as a centre for automotive design, engineering and manufacturing excellence sees its stock riding high. £6bn of investment in the past few years alone bears testament to this.
British made, foreign owned
From a consumer point of view, product demand is high, with new car registrations rising 8.2% in April to 176,820 units, the 26th consecutive month of growth. This followed on from the previous month, where new registrations reached their highest levels since 2004, carried forward by a wave of returning consumer confidence. Germany aside, the UK is an anomaly compared with the rest of Europe, which still continues to feel the effects of an automotive slump. So why is the UK an attractive place for automotive OEMs to do business in ways that France and Italy are not? Workforce flexibility and low corporate taxation are a starting point. The fact that the UK outperforms every country
Automotive
in Europe in attracting the most Foreign Direct Investment confirms this, with financial services firm KPMG labelling the UK ‘destination of choice’ for global automotive investment. Over the last year, investment and production in British icons such as Bentley, MINI and Jaguar Land Rover (JLR) has only increased, while Japan’s Nissan has increased its UK manufacturing presence. Germany, Europe’s automotive behemoth, has seen its automotive giants increase UK production in the past 12 months. Volkswagen, parent company of Bentley, this year announced it was moving all production of its W12 engines to the UK, creating 100 new jobs at it’s the luxury car maker’s Crewe headquarters. After a record 2013 for sales which saw the delivery of 10,120 cars, Bentley has cemented its status as world’s largest producer of 12-cylinder engines. Britain’s engine production rates are also healthy at 2.5m units annually. Companies including Ford, Toyota, BMW and Honda are among the main contributors to the 62% of the UK’s exported engines. As a job creator, perhaps the best illustration of the UK automotive turnaround is Jaguar Land Rover. Sold by Ford in 2008 to TATA, the Indian conglomerate has seen the resurrection of the JLR brand result in record sales and mass job creation. Investment in JLR’s three UK manufacturing sites over the last year alone
SECTOR FOCUS
A new Rolls Royce Wraith moves along the production line at the Goodwood factory
The growth of its two Midlands plants in Castle Bromwich and Solihull have seen the region re-emerge as one of the UK’s automotive hubs
UK automotive nails its colours to the EU mast A factor potentially stunting UK automotive’s growth is the scenario of the UK leaving the European Union. With Prime Minister David Cameron promising an election to decide the country’s EU membership by 2017, the UK withdrawing as a member state is a distinct possibility. Opposition to a UK withdrawal from the automotive sector is conclusive. The UK Automotive Industry and the EU, a recent survey published by the SMMT, showed 92% of automotive companies believe remaining in the EU is best for business. Reasons cited as key EU benefits include access to a single market, integrated European supply chains, EU innovation funding, free movement of labour and the ability to influence harmonised technical regulations and product standards. Furthermore, almost 70% believe a withdrawal from Europe would have a negative impact on their business in the medium to long term.
SMMT chief executive Mike Hawes believes the advantages of being in the EU outweigh the negatives for the industry. “The position of the UK automotive industry is clear — being part of a strong Europe is critical for future success,” he says. He believes the UK’s competitiveness is enhanced by a supportive business environment at home and access to the huge single market. This view is shared by automotive giants Ford and Toyota, with both already stating that any UK exit from the EU could lead to companies reassessing and potentially withdrawing all operations from the country. While the consensus shows industry wishes to prolong the automotive-EU relationship, it’s a coupling that remains far from perfect. Reform is very much on the agenda for the continent’s industry. The survey discovered an industry desire to both reduce regulatory complexity and increase consistency, and encourage financial reform to increase Eurozone stability.
June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 35
The Revolution of F1®’s Trackside Comms Formula 1® is hugely demanding for both drivers and engineers, but coordinating the teams internationally is an even bigger challenge. Each race is a huge logistical challenge, with teams bringing more than 100 people to each race. Communication is essential – but it can prove challenging. Take Caterham F1® Team, for example. Poor quality calls between their factory and races hampered efficiency, especially as engineers handle more and more data on mobile devices. And, because the car requires huge investment, roaming costs were a key concern. However, by partnering with Truphone Caterham F1® Team solved these problems once and for all. Truphone’s improved connectivity led to increased productivity and enabled the team to send data back to base for analysis much more efficiently. Plus, Truphone’s global bundles mean users don’t have to monitor usage or worry about cost.
“ We’re targeting a 30 per cent saving on our previous supplier and are well on the way to achieving that”. Bill Peters, Caterham F1® Team’s Head of Group IT
The Truphone Zone The Truphone Zone includes the UK, US, Germany, Spain, Poland, Australia, Hong Kong and the Netherlands. In the Zone, you’re effectively local and can always use your phone as you would at home, at local rates. Extend this with a Truphone World plan and you can use your bundled allowance across a total of 66 countries. That means you don’t have to think twice about making a call or checking your emails whether you’re at home or abroad. Using patented technology, the Truphone network offers a better international experience all around the world by routing calls and data to give you clearer calls, faster internet access and lower-cost roaming.
Caterham F1® Team at a glance* -
100+ users at each race 20+ heavy data users at each race 50 GB of data generated at every race International calls increased from 46% to 57% of all calls - 6 times more data used from an average of 2181 MB/month to 12943MB/month *Results from 2013 survey comparing Truphone with old supplier’s comparative price plan
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Best of British Automotive
SECTOR FOCUS
From a consumer point of view, product demand is high, with new car registrations rising 8.2% in April to 176,820 units, the 26th consecutive month of growth
UK Automotive OEM map
The Nissan Leaf power train is prepared for installation. Image courtesy of Nissan
Scotland 1: Alexander Dennis North East 2: Nissan 3: Cummins 4: Plaxton 5: Optare
1
Midlands 13: LTC 14: Toyota 15: Jaguar Land Rover 16: Jaguar Land Rover 17: Jaguar Land Rover 18: Morgan 19: Dennis Eagle 20: MG Motor 21: Aston Martin 22: BMW
2 3
6
4 5
7
Northern Ireland 6: Wrightbus
8 9 10
North West 7: Leyland Trucks 8: Jaguar Land Rover 9: Vauxhall 10: Bentley
11
17
14
15 16 22 19 13 20 21 18
23
East 23: Lotus
27 12
Wales 11: Toyota 12: Ford
24 25
26 28
31 32
30
33
South 24: Honda 25: Mini 26: Mini 27: Vauxhall 28: Ford
38 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
29
29: McLaren 30: Caterham 31: Alexander Dennis 32: John Dennis Coachbuilders 33: Rolls-Royce
demonstrates its parent company’s confidence. Halewood in the North West has seen production accelerate following a £45m investment in a new stamping line, the first of its kind in the UK. The growth of its two Midlands plants in Castle Bromwich and Solihull have seen the region re-emerge as one of the UK’s automotive hubs. Last September JLR announced 1,700 new jobs at Solihull as part of a £1.5bn overall investment. This will be complemented by a new i54 engine production site near Wolverhampton, which will see an additional 1,400 jobs created as a result of a £500m investment. It is the North East however, that has the largest car manufacturing plant in the country in Japanese company Nissan’s Sunderland operation, home to a workforce of 7,000. With Sunderland the recipient of investment to the tune of £250m at the end of 2012, Nissan has accelerated its production levels at Sunderland over the past 12 months and now produces over half a million cars annually. Most recently, it started making the Note vehicle at Sunderland, adding to its existing production lines which include the Qashqai. Further afield, its expertise has extended beyond manufacturing. In the Midlands, it is designing the latest London taxis to be assembled in Coventry by ADV Manufacturing, which will see the vehicles rolled out across the streets of the nation’s capital by the end of 2014.
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>Start.Check.Move Improve. Progress.Grow.Monitor.Shift. Innovate.Drive.Develop.Nissan< Maintenance Technicians £competitive + benefits | Sunderland We’ve one of the UK’s fastest automotive production lines. So when something stops, it’s more than a second. It’s a lifetime. That’s where you come in. You’ll fix it. Fast. And develop your career at (almost) the same pace.
careersatnissan.co.uk June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 39
Best of British Automotive
The automotive sector is the UK’s largest exporter by value at £30bn annually
The UK supply chain: built to last?
The boom of automotive OEM manufacturing in the UK has naturally resulted in opportunities for suppliers. The industry of supplying to car makers is big business in itself, generating an estimated £4.8bn of added value annually for the UK. Recent data shows it also employs 82,000 people across 2,350 UK companies identifying themselves as automotive suppliers. The culture of sourcing parts locally has risen to such an extent that 70% of all OEM suppliers manufacture products in the UK. And this figure could rise further over the coming decade, should the rate of growth experienced recently by both medium and SME-size companies continue. Success stories include Stadco, a tier one supplier of automotive Body-in-White products and services to JLR among others (p28). It recently announced an investment of up to £30m to expand its two facilities in Shrewsbury and Telford as a result of growth and aims to create 200 new jobs. Announcements of supplier investment have been commonplace in the last 12 months and Stadco is at the tip of a very large iceberg. But despite the boom of automotive suppliers, there remain visible chinks in its armour. Concerns persist over the ability of the UK automotive supply chain being able to keep up with increasing demand.
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Bentley chief executive Dr Wolfgang Schreiber has been vocal about such concerns. Dr Schreiber said he believed despite the government taking steps to boost industry growth, greater investment in the UK labour market was needed to ensure basic parts were readily available, instead of firms having to rely on imports from abroad. As is common in industry, the automotive industry is no exception to facing potential hazards in the form of skills, despite being one of the more desirable manufacturing industries for young apprentices. The rise in advanced automotive technologies coupled with an increased industry focus on low carbon emission means skilled engineers and technicians will only become more sought after. Efforts to tackle this problematic issue are ongoing, with the government announcing £25m for training and skills development in the automotive supply chain in April.
Seizing future opportunities
While it would be easy for the automotive industry to revel in its current success, all eyes are firmly placed on future opportunities. The strategy published last year - Driving success: UK automotive strategy for growth and sustainability – highlighted the full extent of the industry’s potential.
SECTOR FOCUS
The Advanced Propulsion Centre, a collaboration between industry and government, is seen as one method of strengthening the UK’s supply chain. As part of the coalition’s industrial strategy, the investment aims to establish the UK at the forefront in developing new low carbon propulsion technologies. Jointly funded by government and the automotive sector to the tune of £500m each, the 27 companies backing the initiative aim to recruit more than 7,600 apprentices and 1,700 graduates over the next five years. Demand from overseas for luxury British brands such as JLR, Bentley and Rolls Royce ensures more room for growth. As the largest UK exporter by value at £30bn annually to over 100 markets, the automotive sector is at the forefront of the export economy. Also under consideration is the recovery of the Eurozone. A strong region is paramount to further strengthening the UK automotive manufacturing sector. With the European car market’s expected forecast to grow by 3% in 2014, there is optimism the continent will finally exit its six-year slump. Chris Aylett (p45), CEO of Motorsport Industry Association (MIA), says the automotive industry is increasingly collaborating with the motorsport industry to draw on its expertise for carbon reduction. “In the last five years, there’s been an explosion led by the automotive industry around the world having signed deals with governments that they are going to be more energy efficient,” he says. “Because we specialise in R&D and prototype engineering solutions, a whole chunk of them approach motorsport companies.” As a thriving industry, UK automotive cannot allow itself to become complacent in the face of recent success. And going forward, there is little to suggest one of Britain’s star performers is about to slow down. With consumer sales rising, global economic factors improving and manufacturing production increasing, the government’s recognition of the industry shows it is integral to its plans for rebalancing the economy. It also sets an example for the benefits of committed foreign ownership. Looking across to other industries illustrating the pitfalls of foreign takeovers – think Kraft’s takeover of Cadbury - it is the automotive industry that continues to lead the way.
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INTERVIEW
Starting out his career at Nissan and working his way to the height of automotive luxury at Bentley, it’s fair to say Michael Straughan knows a thing or two about the UK’s automotive manufacturing industry. Callum Bentley reports.
‘‘W
e’ve had a fantastic year, we’ve done really well but next year is going to be an even bigger challenge.” Clichéd words, I know. But despite having had words very similar to these spoken to me many, many times throughout my writing days, this time I have every inclination to believe what is being said. These are the words of Michael Straughan, member of the board – manufacturing, at Bentley Motors. The reason I so easily buy in to his ardent promotion of his company’s recent success is because, as anyone who has been following the UK automotive industry’s phoenix-like ascension from the ashes of recent
42 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
recession, things are generally looking positive for car manufactures in the UK – whether high-end luxury vehicles or mass-produced runabouts (p34). 2013 was particularly fruitful for Bentley, with the company posting a 19% rise in global deliveries - the highest in the company’s 95 year history and the fourth consecutive year of double digit growth for the Crewe-based outfit. The company also announced it would begin production of a new SUV model due to land with customers in 2016, coinciding with the announcement that all Volkswagen W12 engines would now be produced at the Crewe plant, making the Bentley the world’s largest producer of W12 engines. “Success brings confidence and what we are seeing now is a much more confident organisation,” Says Straughan, convinced that 2013 was
Michael Straughan, Member of the Board – Manufacturing, Bentley Motors Limited
Knowing what the customer wants While Bentley, like all automotive manufacturers in the UK, still has its fair amount of obstacles pushing back on the momentum this industry is currently experiencing, it appears there are plenty of good years ahead. Fortunately for Bentley, as Straughan says, the fact the company’s customers don’t necessarily “need a new Bentley, they want one” puts the historic manufacturer in a privileged position. But as indicated earlier, Straughan is not one for complacency, and despite the monetary worth of your customer base, a good product will always be a good product. This is what is driving what is poised to be the manufacturer’s next big automotive statement – the Bentley SUV. “Coming out of the recession, double digit growth over the three years since the depth of the recession is unbelievable,” Straughan says, highlighting the triggers leading to the new SUV’s inception. “The profit level that we’ve got to know is good, but we’re pushing for much more and it wouldn’t have happened without the workforce really getting behind what we had to do.” According to Straughan, once the gap in the high-end SUV market was identified, it was a matter of convincing the right people in the group to push the project forward. “We had a very famous meeting with Professor Martin Winterkorn, the head of Volkswagen Group. While he walked around our factory, one of our trade union representatives stopped him and said, ‘Professor Winterkorn, this is what we’d like to offer in terms of securing the SUV’ and it went down very well in the group. What resulted was the Crewe facility securing the both the assembly and painting processes.
a fundamental year in Bentley’s future progression. “We can make good returns to the group (Volkswagen), which has always been important.” The importance of these returns is the potential it unlocks for further investment in Crewe and the Bentley brand as a whole, Straughan explains. Since the purchase of Bentley by German automotive giant Volkswagen Group, Bentley has understandably had to prove its worth in order to make the necessary steps to progress and promote itself as a forerunner in the luxury car market. “With that confidence comes investment,” he says. “We really fought hard to secure the SUV. It’s always right that a Bentley is made in Crewe, but we should never become complacent.” Complacency and career contentment is something Straughan appears to have discarder from his succession plan early on in his career, a trait which makes up part of a man whose automotive production knowledge and experience is comparable to the marque for whom he now works – refined yet varied and very highly regarded. Since beginning his career at Nissan in 1987, Straughan has worked with Volvo in Sweden, LDV and Jaguar Land Rover before making the move to Crewe to oversee the manufacturing side of Bentley.
INTERVIEW
“I started working in this Japanese environment back in the 80s when lean techniques were only just being brought into the British car industry,” he reflects. “It was completely different to anything else I had done. We all wore blue uniforms and while we all didn’t necessarily do the exercises, we had swallowed the Japanese lean principles. But my biggest problem was that I thought that was the rest of the car industry. I was a young engineer and I started in that environment and I didn’t know that what I was doing was completely different.” It wasn’t until he made the move to Sweden as production director at Volvo Cars in Uddevalla, that he saw a completely different way of producing cars. “This was my first role working in premium manufacturing and working with the sell-build concept,” he says. “So an operator would take a car from the body stage right the way through to final assembly. We would be looking at cycle times of eight hours. It was an incredibly difficult environment to manage but one of the most interesting things you could ever do.” An eight year posting with Jaguar Land Rover followed, where Straughan oversaw the production and release of the Freelander and the rise of what is currently now arguably Britain’s most
Traditional skills such as cabinet making and leather work make up a large percentage of the skills of the Bentley workforce
“The XP9F (SUV concept), love it or hate it, doesn’t matter,” he says. “The publicity and the response we got from that was enormous. That was to test the water. We had 2000 preorders straight off the bat. We actually said at the time, ‘it may not look like this, we can’t give you a price or powertrain details’, yet straight away we had 2000 people who registered interest.”
June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 43
Michael Straughan, Member of the Board – Manufacturing, Bentley Motors Limited
BIOGRAPHY Michael Straughan
1980-83: Coventry University, BSc(Hons) – Engineering, Sponsored Student/ Graduate TI Group 1987:
Joins Nissan Motor Manufacturing UK Ltd
1993:
Plant Engineering Manager
1995:
Paint Shop Manager
1997:
Final Assembly Manager
1999:
Production Director - Volvo Cars Udderalla
2004:
Freelander Launch Manager – Jaguar Land Rover
2006:
Operations Director - LDV
2008:
Operations Director – Halewood Operations – Jaguar Land Rover
2011:
Member of the Board – Manufacturing – Bentley Motors Limited
successful automotive manufacturer. It was here that Straughan could finally begin putting the pieces of what was already a multifarious career in the sector together. Despite the excitement of moving to one of the country’s most prestigious automotive marques, Straughan says it was not an easy decision to leave Jaguar Land Rover. “It was a difficult time to leave Jaguar Land Rover because it was a really exciting time. We fought hard to secure the product and were at the point of launching the car and I left the company to come to Bentley,” he says.
44 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
INTERVIEW
The new W12 engine Centre of Excellence is predicted to create another 100 jobs across the company
“But what an exciting place to come to. I think in the three years I’ve been here we’ve refreshed every model. A new Mulsanne, new Continental, new GTC and new Flying Spur. It’s been an exciting time.” Since moving to Crewe, Straughan has overseen the implementation of a full lean programme, one he believes the Bentley workforce has completely embraced and one which brings together all of the pieces of his automotive production career. But his work doesn’t stop at the shop floor or when he walks through the factory doors at night. Straughan is also chairman of the Northwest Automotive Alliance, a group made up of the big three car makers in the region – General Motors, Jaguar Land Rover and Bentley. The Alliance, among other facilities, offers a chance to strengthen the rather weak supply chain in the North West, according to Straughan, by developing business opportunities for SMEs. “There’s a big gap between the tier one suppliers and the SMEs,” Straughan says, his speech becoming more pertinent while a passion for the conversation topic becomes more than evident. “What we’ve found is that a lot of SMEs in our area could have ‘automotive’ in their tags, but they don’t supply the car makers in the North West. We’ve got manufacturers which make carbon fibre material which goes into Ferraris and Porsche 918 Spiders, but won’t necessarily supply to the big three. So we’ve got this big chasm between a few good tier one suppliers and the SMEs. We have the bizarre situation, for example, where the tailgate for the Land Rover Evoque is painted in France and fitted in the UK. Trying to get a supplier to relocate from Europe to the
Michael Straughan’s best and worst career moments Worst: Although I had already resigned and was working my notice period, witnessing the demise of LDV, another British vehicle manufacturer, was very difficult. As the recession bit, light commercial vehicle sales were hit hard. The support from GAZ, the Russian parent company, was stopped and financial support from the British Government was not forthcoming. Although the company limped on for several more months, it eventually stopped trading and over 1,000 people lost their jobs. Best: Last year for Bentley was a record year in terms of volume and profit. We manufactured over 3,800 new Flying Spurs in six months to give us a fantastic result. It was hard work but the spirit within the company was incredible. This was coupled with news of approval of the SUV and W12 engine manufacture for Group to Crewe. It doesn’t get much better than that! North West of England is impossible – they wouldn’t do it. “Following the crisis it was very difficult to get anyone to invest, even now we’re not getting that inward investment in the supply base that we need. All of the car manufacturers, while predominately foreign owned are investing a lot of money in the country, but we’re not seeing the same investment from the tier ones. It’s on the government’s radar, but at the moment it’s not working. We haven’t made any inroads in that.”
6Osecond Chris Aylett, Chief Executive, Motorsport Industry Association
interview
Chris Aylett
Chief Executive, Motorsport Industry Association Chris Aylett, chief executive of the Motorsport Industry about the motorsport Association (MIA), talks to sector, one of the UK’s largest growth industries. : The MIA recently announced UK motorsport’s value has doubled since 2000 to £9bn. Have you noticed an increase in recognition of the sector’s worth to the economy? The outcome of the report published in January allows opinion formers and key influencers - including those in government - to have a better understanding of the broad and high level landscape of the sector. I know from observations that people are surprised at the number of employees, size of turnover and the amount of export that motorsport offers. Engagement has increased and through the MIA, people are being drawn into increasingly higher level discussions that can help the sector play a more complete role in the engineering and manufacturing future of the UK. Read about MIA’s January report at bit.ly/Drivingrevenues : The motorsport industry spends a much higher percentage of turnover on R&D than other industries. Why is this? One team owner once said anything we don’t invest in R&D is a waste of money. The culture of high R&D investment is because the industry makes its real money through the entertainment side of the business and by supplying the winning solution. If you can supply this to a winning team, you are paid significantly more than if you supply the solution that’s at the back of the grid. With all
Motorsport will be at the forefront as the world looks for more energy efficient solutions to any kind of propulsion competitors chasing success, you can only get the right solution if you spend money on research and development. If a team relaxes its R&D spend then it’ll simply be overtaken. We only race prototypes that are permanently in development, never moving into large scale manufacturing of any kind. People are starting to realise that the motorsport engineering industry is a specialist group heavily focused on R&D innovations. : The MIA has helped commercialise a range of advanced technologies for other industries. Which areas represent good opportunities for motorsport going forward? Motorsport has an exceptional capability of providing solutions focused on the efficient use of energy. This is its heartland of knowledge, as teams have always won competitions by using energy more efficiently than their competitors. Motorsport will be at the forefront as the world looks for more energy efficient solutions to any kind of propulsion. In terms of a specific sector
with whom we are growing fast, then that’d be the automotive sector, which is particularly interested in energy efficient solutions. The defence industry is similar in that they are massive users of energy and they need solutions. Gaining knowledge of delivering engineering solutions in faster times is also becoming valuable. The aforementioned sectors don’t have time to waste on finding solutions and look to us for this, as the fastest deliveries come from motorsport. : At present, do you feel there are any weaknesses that need addressing in the UK supply chain? I think there’s always a danger of it becoming a victim of its own success. Britain has sometimes had a bad habit of becoming complacent following success. The MIA aims to ensure no one becomes complacent. However, given the high profile of Formula 1, we benefit from the fact we’re under the microscope, with every part of the operation tested in front of hundreds of millions of people on TV. Local engineering and technician skills are also issues. The ability of teachers to teach the skills needed for the sector are pretty remote and there aren’t that many people with the sufficient knowledge. In general terms, there isn’t a weakness in the supply chain, but there may be pieces that could be strengthened and we are working with government to identify these and strategise how to tackle them. June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 45
Armoured Autos With the 100th anniversary of the start of the First World War rapidly approaching takes a look at the impact the conflict had on British industry â&#x20AC;&#x201C; in particular, automotive manufacturing.
Armoured cars were most effective in a mobile war, over relatively flat terrain, and did make a number of effective appearances in the early skirmishes of the First World War
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he First World War was the first conflict that had a truly global reach. It was also one of the most deadly with 35 million casualties, of which 14 million were killed. It was also a war of technology. Of invention. The science of killing advanced so rapidly during the four years of war that the weapons and tactics employed by the relevant armies, navies and airforces of 1918 were unrecognisable from those that originally went to war in the late summer months of 1914. To help show how those technologies shaped British industry and products or processes we now take for granted, asked Scott Addington, product marketing manager at ERP vendor Epicor but also an acclaimed First World War historian, to pinpoint some key moments and innovations. In line with his monthâ&#x20AC;&#x2122;s sector focus on the British automotive industry (p34) Mr Addington has honed in on the development of armoured cars and the role they played in the worldâ&#x20AC;&#x2122;s first global conflict:
M
any technologies that are now the staple of modern warfare can trace their beginnings back to the First World War; such as the tank, the fighter plane, and the armoured car. The first recognisable armoured cars started to appear just after the turn of the twentieth century, less than twenty years after the appearance of the first petrol driven vehicles. Most of the vehicles at this time were nothing more than civilian cars with bits of armour plate bolted to the sides and the roof. They were very bespoke and very experimental in nature, put together using whatever raw materials were to hand. The vast majority of them had normal wheels and ran on normal tyres, only a few Russian vehicles sported half tracks to enable them to go off road. Not surprisingly, only a small number ever found their way any way near a live battlefield.
stuck ar gets oured c ester arm A Lanch
ud in the m
Automotive, a historical perspective
SECTOR FOCUS
DID YOU KNOW?
I WAS THERE
Canadian Automobile Machine Gun Brigade, which was the first fully mechanized unit in the history of the British Army. The brigade was established on September 2, 1914 in Ottawa, as Automobile Machine Gun Brigade No. 1 by Brigadier-General Raymond Brutinel
Two armoured cars were ordered forward to cooperate with and assist “A” and “B” Batteries, which had been instructed to advance towards Bossu. In spite of what appeared to be a favourable opportunity for the employment of mobile forces, the advance of the Armoured Cars and Batteries was completely stopped by a huge Mine Crater...’
ARMOURED CARS TODAY The UK plays an important role in the production of several armoured vehicles currently in use by a number of Armed Forces including the British Army. Around 80% of the Scout SV, for example, is made in the UK under a programme headed by Lockheed Martin but incorporating a large number of suppliers. The vehicle has won acclaim for its agility over a wide range of terrains thanks to a combination of an extremely powerful 805bhp engine and a 7 wheel-station running gear, incorporating a sophisticated dualrate suspension. The Foxhound is a wholly UK made armoured vehicle developed to help protect troops in transit in Afghanistan. Key manufacturing partners for Foxhound are General Dynamics - Force Protection Europe and Ricardo. Ricardo’s bespoke engine for Foxhound can be removed and replaced within 30 minutes making the Foxhound a handy piece of equipment for aggressive driving environments.
Driving progress
As the years rolled by the design and development of armoured cars improved. They were mostly manufactured by civilian car makers; Rolls Royce, Lanchester and Wolseley were the main producers in Britain with Daimler and Ehrhardt making similar cars in Germany, Peugeot and Renault working in France and Fiat and Lancia in Italy.
Canadian Motorised Machine Gun Brigade - Unit diary. 7th November 1918. Taken from When Your Number’s Up: The Canadian Soldier in the First World War. Logan and Levy. (Toronto: Random House of Canada, 1993)
Early uses of the armoured car, preWW1, were intelligence gathering, scouting and reconnaissance, launching fast ambushes and counter-attacks and pursuing a fleeing enemy. They were most effective in a mobile war, over relatively flat terrain, and did make a number of effective appearances in the early skirmishes of the First World War, before the race to the sea and before the onset of static trench warfare. Many cars were very heavy with all the armour and often badly underpowered by their primitive engines, traction and grip was poor and these cars were defeated by even the slightest muddy slope in the smashed grounds of the Western Front. Range Rovers these were definitely not. The armour wasn’t up to the job either, It was ok with rifle and small arms fire, but didn’t stand a chance against any kind of artillery. Armament was typically a number of light machine guns, but some carried heavier cannons. It was obvious that further development was needed if armoured cars were going to play any significant part in the war. Britain, and more specifically the Royal Naval Air Service, led the way in innovation, when they started to request purpose built cars to help with the rescuing shot down pilots and report on the movement of the enemy. As these journeys became more and more dangerous the need for professionally designed armoured vehicles became ever more urgent. The
s Tank
n ars o red c rmou a d ste ly ou large
6 st 191 nt po rn Fro te s e the W
request for ‘fighting cars’ was given to Rolls Royce and by the end of 1914 the first vehicles arrived in the fighting zone. Unfortunately by then the Western Front had bogged down into a static war not really suited to mobile vehicles. After the development of tracked tanks in 1916 to overcome the terrain issue, the use of armoured cars was restricted to areas such as Palestine and Mesopotamia where the ground was flatter and they performed a cavalry role of pursuit with great aplomb. It was not until the resumption of a more mobile war in 1918 that the armoured car made an impact on the Western Front. Despite these obvious limitations each major belligerent got in on the act of producing their own armoured cars, some were fully enclosed with armoured roofs, some were more open to the elements (and enemy bullets) and armament ranged from a single machine gun, to a number of machine guns, up to small caliber cannons. One of the most competent armoured vehicles was the German Panzerkraftwagen Ehrhardt which boasted an engine that produced 85BHP (compared to the first Rolls-Royce cars which had 50BHP), had a top speed of almost 40mph, could carry a crew of 8-9 over a range of over 150miles and packed 3 machine-guns. June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 47
At the top of the game Apex Supply Chain Technologies Ltd has been developing systems that track and manage inventory and assets to new levels of accuracy. Its Trajectory Cloud system is platform-independent and even removes the ‘option to forget’. Ruari McCallion found out more.
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pex Supply Chain Technologies Ltd, which is headquartered in Worcester, was established to design, build, and deploy what it describes as reliable, versatile, and affordable industrial vending solutions, along with hosted software and services. From outset, it has had an emphasis on ease of implementation and use, as well as scalability; its goal is to deliver only the functionality that customers need and want and to relieve them of the burden of paying for functions that they may never use. It claims that its Apex Connect n’ Go™ Technology does exactly what it says on
the tin. Plug into the power supply, connect to the Internet, and it’s up and running. Can it really be that simple? “Once a client orders a machine we have a strong process to capture their product and user information, configure the Trajectory Cloud, configure the machine to suit the exact products that will be stocked, liaise with the site owner and prepare for machine delivery,” said Kent Savage, Founder and CEO of Apex Supply Chain Technologies. “The install time is just a few hours.” Typical timescale from order to completion is 25 days – and note the name there: Trajectory Cloud. This is a new system from Apex that seems to be as close to fool proof as you can get with today’s technology.
Simple, secure and swift
“Our systems do not rely on a user at the point of consumption having to record something that he or she could forget, or choose not to do!” Savage said. Users will normally use the same ID card or fob to log into the Apex system and vending machines as
Apex Supply Chain Technologies Ltd
Our systems do not rely on a user at the point of consumption having to record something that he or she could forget, or choose not to do! Kent Savage Founder and CEO, Apex Supply Chain Technologies
they use to enter their place of work. Without it, they cannot access any material at all. The system automatically records and logs activity – it eliminates time-consuming form-filling and thus makes stock access easier, while simultaneously improving monitoring and control. “Apex Trajectory Cloud captures in real time what’s being consumed, by who and where they are using it. The interaction with the Apex device is designed to be intuitive and unobtrusive to the normal daily work routines.” That all sounds pretty good but what is Trajectory Cloud? It is a secure, cloud-base software service that manages stock usage, inventory, and replenishment according to parameters established by the user. It issues alerts when stock levels get low, orders are late, or usage patterns change. It monitors the flow of items
Because of its scalability, Trajectory Cloud has been designed to automate the supply of data to an ERP system, through methods such as XML files or Web Services Kent Savage Founder and CEO, Apex Supply Chain Technologies
to the workforce and allows users to track item usage by job, work order, cell, cost centre, or other chosen variables from a desktop, laptop or smartphone. It has an ‘intelligent management system’ that alerts users when usage patterns fluctuate outside established limits. Comparisons of usage over multiple periods up to years can be viewed on-demand or sent as scheduled reports.
Easy to install – and to access
Upgrading or installing new IT systems is often a fraught affair but Apex machines are Internet appliances. Their software and operating system are stored remotely and accessed through the Trajectory Cloud, which is built on a robust enterprise-grade technology stack including Oracle, IBM Websphere, and J2EE. Apex devices don’t use Microsoft Windows, so there is no need for software reboots and the chances of data corruption or virus infection are greatly reduced. There’s nothing for customers’ IT departments to install or support. Customers use their Browser to sort and
SuPPLY CHAIN
sub-total data in the form they prefer and to access it from anywhere with an Internet connection, at any time, and to link to existing management systems. The system provides a 100% audit trail for both assets and consumable material, within a standard, costeffective solution. Trajectory Cloud automates the supply of data to a customer’s suppliers or to an ERP system, through methods such as XML files or Web Services,” Savage explained. “Most of the well known ERP systems are able to communicate with Trajectory.”
Stretch to fit
Apex claims that Trajectory is suitable for all sizes of enterprise, from SMEs to large corporations. The fastest-growing application areas for its machines are within industrial distribution with safety and Personal Protection Equipment leading the way. Customers who have installed Apex systems report some pretty spectacular results. A soft drink manufacturer said that its inventory has been significantly reduced and MRO spends cut by over 35%. A large pharmaceutical site achieved savings of US$13,000 in labour costs in a single month, and an auto components manufacturer, targeted 25% reduction in stock use with Apex point-of-use vending machines. “We often see over 20 inventory turns per year within the system,” said Savage. “The behaviour of operators also tends to change. Because the machines’ replenishment is based on accurate data users will reduce their consumption, because there is no need to hoard stocks of supplies and material. They know that the machine won’t run out of stock and consumption is automatically monitored. Apex is all about reducing inventory levels and replacing inefficient processes with data.” www.apexsupplychain.com
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Positioning for growth series expensive in euro terms. In fact the pound is already around 10% higher against the euro from its post-crisis low. The immediate effects will be felt by companies either selling price-sensitive products or selling to price-sensitive markets. At the commoditised end of the sector, where customers have a simple choice between a UK OEM, and French or German or Spanish competitor, they are likely to choose on price and the UK may lose out. But if Sterling continues to rise – and we think it will – then all companies, whether at the commoditised or highvalue ends of the business, will begin to feel the competitive squeeze.
UK manufacturers could be about to lose their competitive edge. And it’s not down to a management issue – it is a macroeconomic one. Peter Russell, head of manufacturing and industrials for RBS explains.
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terling is appreciating against the dollar and the euro, making UK products less attractive on price. The coming year or so will see all manufacturers challenged to find new ways of improving competitiveness. Yet could this turn out to be just the catalyst they need to make a step change improvement? Until quite recently, UK manufacturers have weathered a stormy ride with recessionary conditions impacting their main export markets and weakened home demand. But one thing has been on their side the value of Sterling. In the wake of the global financial crisis, the UK pound fell precipitously by about 30% against the US dollar and the euro, creating a competitive advantage for UK manufacturers. However Sterling is on its way back up, and the price advantage that UK manufacturers have enjoyed is being eroded.
Eurozone trade is critical
According to the Office of National Statistics just over half (53.5%) of the UK’s merchandise export trade (that is, non-agricultural goods) is with the 27 countries of the EU, and over 90% of that trade is with the 17 countries of the Eurozone – indeed, the UK exports over £190 billion worth of goods and services to the Eurozone, making it the UK’s most important export destination and almost three times as big as the US market. The rate of Sterling against the euro is steadily making UK exports more
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Winners will react early
Industry needs to recognise at an early stage how significant the currency challenge is and act accordingly. In the short-term manufacturers will need to tackle the challenge of an appreciating currency - which will include working with their banking partner to implement the best available tools, techniques and strategies to manage the currency impact. In the longer-term manufacturers will have to balance potentially competing priorities in areas such as operational effectiveness, cost competiveness, geographical focus and product differentiation to ensure that future currency fluctuations do not impede growth.
Looking To New Horizons
Angela Potter, Managing Director of RBS’s Transaction Services UK business which delivers domestic and international banking services to UK customers operating in overseas markets, explains how exporting can offer UK businesses a huge growth opportunity – if executed correctly. The UK may be the world’s eighth largest economy, but more than 97% of
The proportion of R&D in UK manufacturing and services which is funded from overseas sources is about five times as high as it is in Germany
Positioning for Growth Series
global GDP is generated outside of the UK. The opportunity for UK companies to develop their brand and grow their business in new markets is therefore sizeable. Diversifying geographical spread helps to reduce the risks associated with over-reliance on any one market – with one successful market compensating for poor sales in another. Furthermore companies exposed to greater competition are often more willing to embrace innovation, new technology and best practices. According to a survey of UKTI trade clients, companies that export become 34% more productive in their first year alone. Some 85% felt that exporting led to a ‘level of growth not otherwise possible’, 78% believed exporting had given them exposure to new ideas; and 70% said they had developed or modified a product or service due to doing business abroad. While the benefits are clear and understood, picking the right market is crucial. The EU and US markets will continue to be important for the UK in the medium- to long-term, not least because they are wealthy and offer good opportunities for high-value consumer products and advanced manufactured goods. However, the BRIC economies are likely to become larger than the US by 2015, and larger than the G7 by 2032, so future success will increasingly rest on exporting to less-indebted, faster-growing parts of the world. As emerging market incomes rise, so too will demand for consumer durable goods, especially high-end goods, as well as services. This development cycle means that UK businesses are well placed to capture growing demand for the types of goods and services in which they enjoy a comparative advantage.
Re-shoring – Or not?
Non-price factors such as product quality and delivery schedules are important in determining competitiveness. In response some manufacturers are already bringing some manufacturing back to the UK – a move that can confer benefits, in terms of shortening the supply chain, shrinking the time to market and making manufacturing more responsive to shifting customer demand. But these benefits typically impact highervalue manufacturing operations. For
more commoditised businesses offshore manufacturing is still a very effective low-cost option. In the modern world, UK exporters can’t compete against companies in Asia and Africa which can produce low-value, labour intensive products, much more cheaply. Growing demand for electronic consumer goods (such as mobile and smart phones) has benefited emerging markets that have a cost advantage in their production, raising their exports and increasing their global market share. The success of UK manufacturers will increasingly be focused on areas of strength in terms of high-value, quality products and companies’ ability to innovate and be productive to meet customers’ needs.
A double-sided investment strategy
It is widely recognised that companies that shape new high value products are in businesses with longer life-cycles that produce better returns, and this is an obvious way of compensating for currency appreciation. High value products usually have the kind of pricing power that insulates companies from currency fluctuations. Yet this will take investment on a significant scale. That kind of investment is not that visible in the sector. In the UK, expenditure on manufacturing R&D and capital investment ranks poorly when compared internationally, indicating a reluctance to invest
ROYAL BANK OF SCOTLAND
If Sterling continues to rise – and we think it will – then all companies, whether at the commoditised or high-value ends of the business, will begin to feel the competitive squeeze
for long-term growth and innovation. The proportion of R&D in UK manufacturing and services which is funded from overseas sources is about five times as high as it is in Germany, making UK companies vulnerable to any changes which might lead to a relocation of these potentially mobile funding sources. To improve competitiveness, companies must define their high-value product strategy and maximise the investment impact.
Companies need to choose
The big picture here is that currency appreciation is adding a new dimension to some long-standing challenges in UK manufacturing. I believe many companies will agree that our manufacturing sector is still fighting a legacy of chronic underinvestment in training, technology and processes. The currency squeeze is now highlighting those longterm weaknesses. For many companies a proactive approach is going to mean a mixed strategy. They will have to cut some existing costs, but in my experience there is always opportunity to develop new higher-value markets. Something is needed to unlock the investment cycle, because that is the key to securing what looks like a renaissance in UK manufacturing. Will the currency squeeze turn out to be just what we need to concentrate minds on the biggest challenge of all? RBS works with manufacturers in all sectors and is committed to helping UK businesses position for growth by supporting their investment needs.
further information Peter Russell Head of Manufacturing & Industrials, RBS Corporate & Institutional Banking T: (0)20 7672 1007 E: peter.russell@rbs.co.uk Angela Potter Managing Director, Transaction Services UK T: (0)20 7672 1428 E: angela.potter@rbs.co.uk
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The ability to mould into any shape or colour gave plastics a tremendous advantage over competitive materials. Plastics put petrochemicals to good use – though plastic production only accounts for 4% of oil and gas use. Once ‘captured’ as a plastic, this oil and gas use can be considered as ‘borrowed’ as it can be recovered through recycling or as energy from waste. For us the circular economy does not just mean recycling a plastic bottle into another bottle it can also become part of a car bumper with a much longer life than a bottle.
Plastics, planes and automobiles
Preparing for retirement this summer Peter Davis OBE, directorgeneral of the British Plastics Federation, reflects on the evolution of an industry.
Peter Davis meets George Osborne at the Conservative Party Conference 2013
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headhunter once said I had a zig-zag career and she was probably right. You can boil down my work experience to: manufacturing; marketing; local politics; healthcare products; adviser to a Minister; architecture; packaging and plastics. But keeping pace with my zig-zagging from start to finish, manufacturing has remained a constant interest. I became an enthusiast as an eleven year old, visiting Ford’s factory at Dagenham with a school party. As I prepare to retire as director-general of the British Plastics Federation I feel I have a ripe moment to evaluate the progress of the UK plastics industry over the decades and look at the opportunities and challenges ahead.
Pervasive plastics
We are all familiar with iconic plastic household objects such as the Jif lemon, Lego brick, Barbie doll and Bic biro.
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When I joined the BPF in 1997 our industry had benefited greatly from a wave of investment as US and Japanese companies that took advantage of the new EU Single Market. In the automotive sector we were achieving 8-10% per annum growth as more and more plastics were used in cars. Today 105kg of plastics are used in place of traditional materials in a car weighing 1000kg. This makes possible a fuel saving of 750 litres over a lifespan of 90,000 miles (p34). Looking into the future electric and dual fuel car will largely be made of plastics where light weighting, fuel economy and durability are essential. Lightweight qualities also mean that plastics are essential to progress in aeronautical design. The Boeing 787 Dreamliner is the first ever aircraft to be made of 50% carbon fibre composite material, reducing the aircraft weight and giving a 20% saving in fuel costs. Many Dreamliner components are made in the UK.
Packing in value
The largest single market for Plastics at 38% is packaging. Today’s plastics packaging is 80% lighter than it was 20 years ago. In 1945 an LDPE squeezy bottle introduced
The UK plastics sector employs around 180,000 people and has an annual turnover of
£19bn
Peter Davis OBE, Director General, British Plastics Federation
Manufacturing Leadership
Exports
There are around 5,000 companies in the UK plastics sector. for washing up liquid caused a rapid expansion for shampoos and liquid soaps in such containers. The PET drinks bottle was introduced in 1973. At the 2012 London Olympics alone 10.5 million PET bottled drinks were consumed and recycled into 42 million bottles each containing 25% recycled PET. But plastics packaging does bring some image issues. Thin plastic supermarket carrier bags are often seen as an environmental hazard. But in fact, 80% are re-used in the home and account for only 0.02% of household waste while other plastics contribute far more. Despite this DEFRA wants to impose a 5p charge on plastic bags. This does not solve the issue of plastic bags reaching landfills or being littered, which no one in industry wants. We want the materials back for recycling. During my time at the BPF plastics recycling has increased enormously. Around 77% of HDPE milk bottles in the UK are collected and recycled now and about 40 leading UK recyclers are members of the BPF. We are, however, concerned about plastics in the marine environment and are working with stakeholders to try and prevent the littering and illegal dumping that occurs.
Plastics potential
The UK plastics industry is composed of about 5,000 companies most of them quite small. We reckon there is at least one plastics business in every parliamentary constituency. Prime Minister David Cameron has three BPF member companies in his constituency and he has visited them all. The UK has a number of natural advantages for plastics manufacture. We are still a significant oil and gas producer providing the chemical building blocks for plastics raw material production. Our rich geology provides a wide range of additives. We have world class universities specialising in polymer studies and a world class design sector which understands fully the potential of plastics. Looking to the future, the exploration and extraction of the UK’s considerable reserves of shale gas will not just produce local energy but also provide the plastics industry with valuable raw materials.
Wake up to the Land of the Rising Sun Composite plastics SME highlights export opportunities in Japan.
S
urface Generation is an SME composite manufacturer based in the Midlands employing 20 people. Around 90% of Surface Generation’s revenue comes from overseas, and in 2012 25% of turnover came from Japan. This year it could rise to a third. The company is a firm believer in the Chinese market and is distressed to see that in 2013, UK manufactured exports to the country declined by 16.5% compared to 2012. The decline is no doubt due to Japan’s continuing economic slump. But, says Surface Generation’s CEO Ben Halford, giving up on the Japanese recovery now could mean missing out on big prizes in the near future thanks to a new economic plan from Japanese Prime
This gives the UK plastics industry a great opportunity to put itself at the centre of the development of materials and technologies which will transform tomorrow’s world. Plastics will, for instance, be essential carrier materials for Graphene and the revolution in flexible plastic semi-conductors. Elsewhere, implantable polymers will be used in
Minister Shinzo Abe. “Under its restructuring, the Japanese government has already spent around £60 billion on public projects and it plans to spend a further £30 billion in 2014,” explains Mr Halford. “At the same time, the Bank of Japan aims to double the country’s monetary base within two years, which should also fuel the economy.” Halford is keen to promote the benefits of exporting to China to his peers in industry, pointing out that, despite the supposed allure of emerging economies, GDP per person in Japan is 10 times that in China. “More British manufacturers need to wake up to the growing opportunities in the Land of the Rising Sun and realise that it is coming out of its period of stagnation and in many ways should be seen as a new emerging market,” Halford sums up.
neurological applications to help control Epilepsy and Parkinson’s disease. Lightweight plastic solar cells will replace traditional solar panels and plastics are essential to 3D Printing. In the late 1960’s plastic credit cards were introduced. In 2016 we will get durable plastic banknotes with more security features. Why not bring in plastic coins? As I leave the BPF, which was formed in 1933 as the world’s first plastics association, I am confident the UK plastics industry has a tremendous future ahead spurred on by enterprise and innovation. June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 53
Gap Personnel
Manufacturing Leadership
Bridging the gap There are some genuinely niche skills in various areas of a manufacturing environment that people need to learn and understand. We work with a company of its forecast and planning and work in how we can effectively train and upskill workers throughout their employment with that customer Chris Howe Gap Personnel
Chris Howe, operations director at industrial recruitment firm Gap Personnel, talks to about manufacturing’s strive for efficiency through utilising its workforce. : Manufacturers are striving to be more efficient than ever. How has Gap Personnel helped companies achieve this through its onsite managed solution? The fact we’re based on site allows us the opportunity to have a much better understanding of the customer’s business in the first instance. The expectations of me and my onsite team is making them part of the customer’s management team, being part of things like daily planning meetings and health and safety committees. Being heavily involved ensures an understanding of the mechanics an operation. We also try and find people from the relevant industry sectors. We see it as vital to place a team onsite that has sector experience, as having managers who come from manufacturing backgrounds means they can talk the customer’s language. : Has the way companies go about employing their staff changed in the last few years? We have to accept we need to recruit to a certain skillset, but I’ve found more
54 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
and more that in lower skilled roles, it’s more about attitude towards the work. Around 7080% of customers are talking to us more now about this side of our recruitment process and how we can attract the right people attitude wise. To determine this, we run assessment centres which can see how they can work as a team and interact with colleagues. We also offer online behavioural assessments which view everything from social skills to behaviour under pressure. These factors are becoming all the more important. : Are employers continuing to see the benefits of multiskilling in order to deliver cost efficiency and productivity improvements? Absolutely, as there are some genuinely niche skills in various areas of a manufacturing environment that people need to learn and understand. We
work with a company of its forecast and planning and work in how we can effectively train and upskill workers throughout their employment with that customer. This ensures that when there are peaks and troughs, we have that transient skillset within our workforce to be able to move work around. When one line gets busy, we can offset and deploy people from line to another, ensuring new people aren’t always being introduced. If a company doesn’t have certain skillsets right, then you can only rely on either people that haven’t been trained in that area or worst case scenario, somebody brand new to the recruitment process. Inevitably they won’t be as efficient as someone with on-site experience of the operation. : Your onsite solutions span across a range of manufacturing sectors. Where are you currently seeing strong recruitment activity? Food manufacturing has always been a strong agency user within the market. More recently, there’s been a buck in the trend with the automotive industry taking an upturn coming out of the recession. There’s also been a requirement within high end technology industries, which should continue to increase. With a big focus on ensuring the UK grows on its gross domestic output through manufacturing, confidence has increased across the board.
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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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Learning to lean
Lean Management Journal editor Victoria Fitzgerald reflects on some of the recent articles featured in the journal to emphasise the possible impact of lean methodology and culture.
I
t seems UK manufacturing is at its most buoyant of late. At the start of May, the CBI reported the highest levels of optimism in small to medium sized manufacturers since records began in 1988. Total orders and output increased for SMEs from January and April and new data has revealed mergers and acquisitions in UK manufacturing have
increased significantly in the first quarter of this year compared to the same time last year. With confidence high, companies everywhere are taking advantage of a thriving manufacturing sector by investing in their people and processes. However, it’s not just manufacturers hopping on the lean gravy train, May/ June’s issue of LMJ considers lean in the public sector, and where public spending is more strained than ever. Coupled with an impatient electorate, it is not surprising that lean’s promise of doing more with less is luring many areas of the public sector in.
Lean enforcement The UK police force
Harry Barton, professor of human resource management at Nottingham Business School shares some of his findings from his 2013 study of the implementation of lean in five police forces across the UK. He highlights the lean values as a mechanism to reinstate trust and confidence in policing, while enhancing police employee engagement. 56 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
T
he Home Officesponsored process improvement programme adapted for use in the police service utilises “the combined experiences of the team to identify inefficiencies in key systems and processes and to acquire skills and techniques to prioritise and develop improved ways of working”. In addition, its application is identified as an opportunity “to engender and embed a culture
of continued improvement, where culture change is the essence in successful process improvement work”. To investigate the impact of such business improvement initiatives on individual police forces in July 2010, funding was secured to finance a pilot study of five police forces in England and Wales to identify the reality surrounding the nature, variety and scope of business improvement initiatives being pursued across the UK police service. In the first instance 14 chief officers and borough commanders (London) were contacted and five agreed to participate in an initial pilot study. Read more at http://bit.ly/ leanenforcement
www.leanmj.com
The leaning library
Pumping lean
Eaton Hydraulics
The British Library
With budget cuts and increased customer expectations, several areas of the public sector are deploying lean methods to add value and reduce waste. Head of document delivery and customer services at the British Library, Andy Appleyard, documents part of the 42-year-old institution’s lean journey, relaying its successes and challenges.
T
he British Library considered the classic seven wastes defined by Taichii Ohno and noted that in manufacturing, inventory is the worst waste, hiding problems such as defects, rework, out-dated products, while tying up capital. “A service function is reactive and while it doesn’t carry stock, when no targets exist, waste is concealed the way stock is, inhibiting productivity improvement. “Every year we hold a continuous improvement convention where a selection of teams present their lean stories to a mixed British Library audience, including directors. This serves to showcase activities, share best practice and provides recognition for colleagues.” The library has so far completed 500 team-based kaizen improvement activities totalling savings in the region of half a million pounds. The savings have delivered other tangible benefits such as health and safety, environmental improvements and morale. Read more about the British Library’s efforts at http://bit.ly/leaninglibrary
Lean manufacturing
T
Manufacturing manager at Eaton Hydraulics, Tyrone White, tells LMJ about the firm’s lean journey, highlighting its achievements, difficulties and revealing the secret to attaining measurable results.
he Havant plant discovered lean in 1999 during the Vickers-Aeroquip acquisition when Eaton integrated its global Hydraulics operations. Since embarking on its lean journey, the organisation has implemented eight tools to ensure it is continually eliminating waste and adding value.
1 Value stream mapping (VSM) A value stream map is all the actions (value adding and non-value adding) required to bring a product through the essential process flows. 2 5s A 5-step technique to stabilise, maintain and improve the safest, best working environment to support sustainable lean improvements. 3 Standardised work The optimum combination of operators, machines and materials to ensure a task is completed the same way every time with the minimum of waste. 4 TPM To ensure the machine keeps making good quality parts at the desired production rate every time you want it to. 5 Error proofing A systematic approach for anticipating and detecting potential
defects and preventing them from reaching the customer. 6 Set up reduction Reduced set up times makes smaller batch sizes possible, without the economic penalty, resulting in reduced overall lead times, inventory and storage needs, and reject rates. 7 Continuous flow manufacturing Movement of material from value added process to value added process without transport time or storage in buffers. Processes are organised such that one person can build the entire product. If volume increases, additional people are added to match the tact time. 8 Pull system Acts as a system of information that integrates the plant, connects all processes one to another and connects the entire value stream to the customer demand.
To ascertain the effectiveness of the lean tools, the firm regularly audits itself internally to understand how effectively the tools are being deployed and whether the desired results are being achieved. Continuous improvement is deeply embedded within the organisation’s culture and has ultimately become a way of life, resulting in better control of quality and cost, as well as better products and services for the customer. Read more at http://bit.ly/pumpinglean
June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 57
EEF Insights
Manufacturing Leadership
A spoonful of healthy advice
A
Iain Laws, managing director – UK Healthcare at Jelf Employee Benefits gives his prognosis on managing sickness absence in the workforce.
ccording to the Department for Work and Pensions, sickness costs UK employers a staggering £9bn each year, equating to an average cost per employee of nearly £600. Health and wellbeing strategies can deliver significant returns both in terms of reduced sickness absence and also greater productivity and profitability. This is recognised by many UK manufacturers, who according to the latest EEF/Jelf Employee Benefits Absence Survey Report offer health and wellbeing benefits to staff to reduce absence and improve employee health. But, for an organisation to manage absence effectively, it’s essential that it understands the scale and nature of the issue, and has an efficient process in place. Recording sickness absence data is an essential element of any employee health strategy and an online absence management system can help
Recording sickness absence data is an essential element of any employee health strategy
58 www.themanufacturer.com | June 2014 | Issue 5| Volume 17
an organisation find the most effective ways to reduce absence across the workforce, as well as achieve a number of additional benefits.
Creating consistency
First and foremost, having an online system ensures consistency. This is very difficult to achieve with a manual system where employees are asked to call their line manager when they are off sick. Dealing with absence can also be a considerable drain on a line manager’s time. As well as speaking to the employee, they may need to complete paperwork and inform HR. With an online system, the line manager and any other relevant parties will be informed quickly when an employee is absent. Online absence systems can also mean employees’ health problems are dealt with more efficiently. They can be designed so that a referral for medical treatment is automatically triggered when an employee calls in with certain conditions. With many conditions, providing this rapid intervention can significantly improve the chances of a fast and full recovery and a return to work.
Identifying issues
Identifying potential problems is another key advantage of using an online absence recording system. Absence data is stored and can be used to identify trends and introduce interventions to address problems and reduce absence. It can also highlight problems when there are changes in working environments.
Optimising health benefits and services
Having a formal process of recording absence can also optimise an organisation’s healthcare benefits. It enables an employer to take a more proactive approach; better supporting employees and helping to keep them healthy and in work. It also supports an organisation’s group income protection. Any potential claims and opportunities to provide effective support or treatment, can be identified much more quickly where formal absence data is collected.
Introducing a system
Advances in technology have benefitted online absence management systems. A customised system can be up and running in a matter of days and, as they’re intuitive, there’s no need for extensive training for employees and line managers. The user-friendliness of these systems also means it’s easier for effective absence management to become a core competence of line management. With the administration as well as some of the more sensitive aspects of recording absence taken out of their hands, line managers can focus on ensuring sufficient resources are in place to enable business as usual. While easy to implement, it is important to position a new system within an organisation as the way it is communicated to employees will shape results. Rather than being regarded as part of a tough line on absence, organisations can achieve the best results if they position it as supporting employees and helping to keep them healthy and in work. Costs have also fallen as a result of technology. Running an online absence management system can cost as little as £1.25 a month per employee. This is a small cost in itself but the benefits of monitoring sickness absence mean that implementing a system should produce a return on investment very quickly. An online system can provide an organisation with real insight into the causes of absence across the workplace. It could also lead to far-reaching changes that reduce absence, improve employee engagement and drive up profits.
FREE for attendees from manufacturing companies See the website for more details
EnERgy ManagEMEnT and ManuFacTuRing SuSTainabiliTy Power Your Future
11 June 2014 Birmingham Energy management and creating manufacturing sustainability process are two of the biggest challenges faced by the manufacturing industry today. The energy management stream focuses on procurement, security and efficiency. While, the manufacturing sustainability conference will address issues
such as reducing environmental impact of new production facilities, all existing factories and ensuring new legislation goals exceed expectations. Attending these conferences will provide you with the insight, practical advice and the opportunity to network with likeminded individuals from within the industry.
EnERgy KEy SpEaKERS:
SuSTainabiliTy KEy SpEaKERS:
EnERgy STREaM HigHligHTS:
SuSTainabiliTy STREaM HigHligHTS:
Sponsored by:
Sponsored by:
Myles McCarthy, Managing Director, Carbon Trust Richard Warren, Energy Advisor, EEF Julia Cohen, Chief Executive, British Ceramics Confederation Important Considerations in Planning Energy Purchasing, Discussing Risk and Best Practice Decision Making Case Study: Applying Good Procurement Practice to Avoid Unnecessary Risk Government and European Union Energy Regulatory Agenda and Its Implications for the Manufacturing Industry
Researched and developed by:
Craig Astfalck, Managing Director, Ecopare Ltd Ronaldo Ronaldo, Manufacturing TPN, IET Andrew Woods, Manager, Tata Steel
Building Sustainable Practices to Support, Attract, Develop and Retain A Highly Skilled, Diverse Workforce Making the Most of What You Have and Gleaning Lessons From Your Global Competitors â&#x20AC;&#x201C; Understanding the Need to Constantly Adapt Your Processes Sustainability at Inception - Proved by The Proving Factory
www.themanufacturer.com/Energy2014 www.themanufacturer.com/Sustainable2014 @TheManufacturer
#TMEnergy2014
#TMSustainable
Lisa Parkes, Quality Engineer, Stadco
Employee of the Month JUNE 2014 Lisa Parkes
Quality Engineer, Stadco
CV in brief Lisa Parkes Age: 25 Education: BTEC National Diploma in IT Career to date: Started as a trainee quality engineer at Stadco Powys in 2008. Moved to Stadco Shrewsbury site to support transfer of products in 2009, before returning to the Powys facility in 2010. Hobbies and interests: Spending time with friends, music, travelling, gym & fitness
: What is your role and what are the main responsibilities? I work within the quality department at Stadco’s Powys facility. We manufacture body in white pressings and assemblies for the automotive industry and supply to the likes of Jaguar Land Rover (JLR), General Motors and BMW. In my role as an
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EMPLOYEE OF THE MONTH
APQP quality engineer, I’m responsible for the APQP/PPAP activities in line with plant and customer requirements. I am currently working on the new Range Rover Evoque convertible door assembly which is due to be launched next year. : What are the key technical skills you use? I have a sophisticated knowledge of the Production Part Approval Process (PPAP) and associated core tools. My role also requires a high level of control and understanding of CAD data and engineering drawings critical to what we do. I also perform process audits in line with TS16949 technical specification, and analyse variable measurement data produced off the co-ordinate measurement machine. : What personal characteristics help you in your role? Attention to detail is very important to me. I am thorough when completing tasks and aim for all work to be completed to the highest standard to meet those agreed by both the plant demands and customer requirements. : What do you consider to be your biggest personal success at the company so far? During the past few years, a great amount of work and effort has gone into improving our PPAP process with guidance and support from JLR, one of our main customers. From
a personal perspective, my biggest achievement was gaining my role as an APQP quality engineer and continuing my development over the course of nearly six years. : Why was it a success? Mainly due to the training I received along with the contribution from all Stadco employees and guidance from companies like JLR. It has now led to a situation where all submissions have a virtual 100% right-first time metric. We ensure this by carrying out internal reviews identifying and resolving any potential issues prior to presentation to the customer. This is an excellent improvement over a very busy period of time and puts Stadco Powys in a good position to enable selfcertification following the award of JLRQ, JLR’s supplier performance measurement system. : What are the most rewarding parts of your job? I really enjoy working on new projects coming into the plant. This is from concept stage to the launch of a successful product that has met all customer and quality requirements. Also being heavily involved in assisting Stadco Powys towards gaining JLRQ accreditation from such a prestigious company was extremely rewarding. : What will be your next career move? I want to excel further in my current role which is demanding but also a great source of motivation. I would like to gain more experience in all areas of the automotive industry outside my current role, including design. I am interested in exploring programme management and coordinating new programmes from feasibility through to launch. : What first attracted you to a career in manufacturing? I had the chance to do work experience at Stadco Powys while in high school back in 2005 and became interested in the automotive industry products that were being made here. Following the completion of my college education, an opportunity for a trainee quality engineer became available which I successfully applied for.
The Manufacturer magazine in conjunction with the leading automation equipment suppliers has established The Automation Advisory Board to educate owner-managers and factory directors about what automation equipment can do and the benefits it can bring to UK manufacturers.
For more information contact Henry Anson, Managing Director, The Manufacturer
E: h.anson@sayonemedia.com T: +44 (0)20 7401 6033
Automation needs to rise to the board level in companies of all sizes, but especially larger SMEs where the capital equipment could make a profound difference to winning contracts. Companies in non-auto sectors, who are unfamiliar with the range, capability and simplicity of automation kit, need and deserve to know what automation options are available. This year it is a business risk not to be informed about the benefits this technology can bring.
http://bit.ly/AABautomation The Automation Advisory Board is proudly supported by:
Taking it to the top On May 13, EEF launched its second annual FTSE 100 – Women in Manufacturing report. Women in enterprise champion and liberal democrat, Lorely Burt MP, opened the event at EEF’s Broadway House in central London. ’s Victoria Fitzgerald reports.
F
or anyone paying attention, it is becoming obvious that the ongoing skills debate is beginning to show a raft of different, yet equally important offshoots. All of these issues, whether it be apprenticeships, curriculum adjustments or industry involvement, must in some way be adequately addressed in order for this industrydebilitating issue to be overcome. Of all these issues, it seems as though one is at the forefront in 2014 – the presence, and even more important, the influence of women in the manufacturing sector. According to EEF’s latest report every FTSE 100 manufacturer has at least one female director on its board. The study also revealed over a third of manufacturing companies are at or above the Davies minimum 25% female board representation target, up from 31% last year.
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There needs to be more interaction between schools and companies. STEM subjects need to be taught with passion and with particular effort to encourage young women In addition, women now account for 21% of total directorships, a 2% increase from last year. Trail blazers from the industry, policy makers and apprenticeships turned out to support the launch of the report. Anna Stevenson, Made in the Midlands council member and managing director at Millennium Pressed Metal, was also in attendance.
Ms Stevenson is the owner of numerous accolades including Young Entrepreneur of the Year, Inspirational Business Woman Award, Champion of Enterprise and Institute of Sheet Metal Engineering (ISME) Achievement Award. From a small startup 14 years ago in a 4,000 sq ft rented unit, Stevenson has taken the business to nearly £3m annual turnover, supplying presswork, turned parts and mechanical assemblies for end use by some of the world’s biggest global brands in automotive, construction and off-highway. Speaking proudly about her achievements, Stevenson told the key to thriving in manufacturing as a woman was to take the necessary time to dig deeper into the industry in order to have a firm and broad understanding of the manufacturing environment. “I have spent time learning everything I need to know in detail so when I arrive at my meetings I am totally prepared,” she said. Flo Wood, managing director of Datalink Electronics, is another exemplary lady paving the way for females in the industry. Ms Wood believes it is important for women starting out to see examples of how they could progress: “This is what will make it believable for them: they need to be able to see it happening.” Datalink has a prominent female presence in senior management with a woman managing director, finance director and financial controller. The organisation has a cohesive mentoring programme in place to provide a clear path for all employees moving up the ranks. Last year’s report identified two manufacturers with an absence of female board representation. The companies, Croda International and Melrose Industries, have since dropped out of the report but now have one female board member each. The percentage of non-executive roles going to women has grown from 23% last year to 25% in 2014, while executive roles remain static at 8%. Just under one in ten female board members are EDs, compared to one in three amongst their male peers. Terry Scuoler, CEO of EEF, said while it was promising to see a stronger female presence in managing levels, more could still be done. “Our job is
Taking it to the top
Directorships within FTSE 100 Manufacturing companies
WORKFORCE & SKILLS
Women to stage Twitter coup
T
he Food and Drink Federation is planning a Twitter takeover to celebrate National Women in Engineering day on June 23.
The takeover will involve 24 hours of dedicated tweets to raise the profile of women in the field and celebrate their achievements.
EXECUTIVE DIRECTORSHIPS 2014 2013
2013
7
(8%)
6
80
(8%)
(92%)
2014
69
(92%)
NON-EXECUTIVE DIRECTORSHIPS 2013
52
2014
(23%)
58
2013
(25%)
170
2014
(77%)
172
(75%)
TOTAL 2013
59
2014
(19%)
62
121 GlaxoSmithKline and Unilever are leading the way with five female board members each, while Diageo has the greatest proportion at 44%
(21%)
2013
2014
250
241
(75%)
(75%)
491 far from done. Women continue to be under-represented at most levels, including apprenticeship and graduateentry level,” he said. “The female role models in the report are from SMEs, these women advocate increasing gender diversity through encouragement and development. They do not agree with quotas of a forced solution. “There needs to be more interaction between schools and companies. STEM subjects need to be taught with passion and with particular effort to encourage young women.”
FDF will play its part using the Twitter handle @FDFTasteSuccess. Through this channel it will share the stories of female members making their mark in the food and drink industry and exerting influence at a senior level. Taste Success is FDF’s careers campaign aimed at showcasing opportunities for good pay and prospects in the food and drink industry. The Twitter takeover will give young people an invaluable insight into the lives of the UK’s most talented female engineers and an opportunity to ask what it’s like to work in the industry. “The aim of the Twitter takeover is to dispel myths about the industry,” explains Avni Raval, media and campaigns officer for FDF. Doing this via a medium they are familiar with will make a strong impact, hopes FDF. FDF is also supporting government’s Your Life campaign, which aims to get more young people into STEM subjects, particularly women. Whether you are a company, an engineer, an apprentice or a student there are many ways to get involved with events to promote National Women in Engineering Day. For more information on creating an event in your area visit: http://www.wes.org.uk/nwed
SAVE THE DATE
As work continues on altering industry image, promoting STEM career routes and advocating vocational qualifications the particular challenge of achieving gender balance and widening the potential skills pool has come into focus. In 2014 it seems to be a vivid part of all skills discussions. Adding rigour and ambition to this topical problem EveryWomanUK, a network which supports female progression in male dominated professions, has launched a new Advanced Manufacturing and Engineering Academy. The first event took place at the end of last year. In 2014 it will take place on November 13 at the Royal Academy of Engineering. Female manufacturing professionals with ambition to progress and take on management or executive responsibilities should attend. More information at bit.ly/EveryWomanAMEAcademy
June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 63
Stuffing the skills gap
I
Renishaw helps teachers inspire a new generation of engineers with the D&T Association’s Skills Gap programme.
n recent months has carried a number of insights from Cheryl Philips, Skills Gap programme director for the Design & Technology Association. Ms Philips’ project is designed to influence and educate teachers about the modern day realities of manufacturing careers and the kinds of skills employers are urgently in need of from their students. In pilot schemes with SME Alucast and metrology firm Renishaw, she has attempted to prove the scheme’s concept, training teachers to develop pertinent lesson plans through engagement with partner companies before organising class outings to factories and setting exciting challenges for pupils.
proved themselves able in this field. Specially developed training enhanced the teachers’ skills in computer programming, advanced electrical and electronic systems and intelligence in products. With further input and advice from business coaches at Renishaw, teachers were then able to support their year 8 classes through their robotics projects and explain the relevant use of the techniques they were applying in the ‘real world’.
Buggie bonanza
Renishaw recently completed its pilot programme with Skills Gap.
Celebrating the conclusion of the project, students were proud to show off their individual buggies. They went into action with a presentation to Renishaw employees and the Skills Gap team.
It partnered with Marling school and devised a challenging project for its students to create programmable robot buggies following a six week engagement period with the school’s D&T teachers and volunteer ‘coaches’ from within Renishaw’s business. During this time, Renishaw’s skills gaps and requirement for programming capability were explained – as were the career trajectories for students that
Students explained their learning journeys, describing the knowledge and skills which they had developed during the project and detailing problems they had encountered and how these had been solved. Renishaw coaches gave positive feedback, commending the teachers’ enthusiasm and applauding students for the impressive standard of
Pepping programming
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Snapshots
presentations, individuality of designs and range of working models. “The programme was very challenging for both students and teachers as they were learning, coding and compiling their programmes , then downloading on the RenBED microprocessor board so that they could get their individually designed buggies to move around,” explains Dave Collingwood from Renishaw. “These are all skills that industry needs and that at Renishaw we often find missing from university graduates,” he adds. Both teachers and students appreciated the business partnership which facilitated their achievements. Steve Berry, head of Design and Technology at Marling school says, “The support from the business was fantastic and their expertise was invaluable for all of us. “The students have been inspired by working with engineers and are eager to do more. “The project was demanding but very rewarding, particularly when the pupils saw what they could achieve on their own, creating something from first principles rather than a kit,” he adds. “It has been great for the staff too, sharing new skills and working as a team.” Ms Phillips is delighted with the outcomes from this pilot project. “There has been a very high level of commitment from both the teachers and business,” she says. “The enhancement of staff knowledge, skills and confidence has translated into an ambitious and very successful project with the students.” ACE Academy, also participating in the pilot programme in partnership with Alucast, will present its school project later this month. Teaching resources created as a result of both schools’ projects will shortly be trialled by other teachers and available on-line later in the year.
further information Read previous articles on Skills Gap and its purpose at: Closing the Skills Gap – An introduction: bit.ly/ClosingSkillsGapExplained Closing the Skills Gap – Update 1: bit.ly/SkillsGapUpdate1 Closing the Skills Gap – Update 2: bit.ly/SkillsGapupdate2 Closing the Skills Gap – Update 3: bit.ly/SkillsGapupdate3 To register your interest in the scheme, please contact Cheryl Phillips, Skills Gap Programme Director for the D&T Association@ Cheryl.phillips@data.org.uk or 07903502768
Workforce & Skills
One giant step for Bombardier
Aerospace and transport manufacturer, Bombardier, took the crown at Cranfield’s National Apprenticeship Competition.
B
ombardier apprentices battled it out with teams from engineering company Reliance Precision, and high technology tools and systems provider, Oxford Instruments. They took the top prize after a gruelling six month slog that saw them through the portfolio submission stage to the final model presentation. Engineering and manufacturing apprentices from across the nation were invited to represent their employers and demonstrate their skills in innovation and manufacturing in the competition which is in its second year. The 2014 brief required teams to use existing materials on the moon, which included the lunar base contents, old Apollo mission vehicles and lunar materials, to build a vehicle which could function in lunar condition and allow them to rendezvous with a rescue craft. The teams had to design and build a mechanism to transport and hold them at an altitude of 1000m for five minutes. James Lobley from Bombardiers winning team told : “The biggest challenge we faced was working with the time constraint. So we researched extensively to overcome this. “For example, we realised by researching the NASA website exactly how much fuel we had access to from a previous Apollo mission.” Dr Will Barton, chairman of Oxford Biotrans, was on the judging panel. He said: “There are no disappointments here, we have been extremely impressed by all three teams. “The competition is a great opportunity for teams to come together to practice their skills, take them back to the workplace and build upon them.” Senior lecturer in manufacturing management at Cranfield University and event coordinator, Patrick McLaughlin told : “The aim of the competition is to give the apprentices an opportunity to create something out of the ordinary in a safe environment. It’s an opportunity for them to gel as a team, develop as leaders. “It isn’t a part of their apprenticeship assessment so they can be as radical as they like.” The challenge for the 2015 National Apprenticeship Competition is yet to be announced but final judging will take place on May 19 2015 prior to the next National Manufacturing Debate (p32)
June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 65
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Applying gamification principles to IT projects is becoming increasingly common, reports IT contributing editor Malcolm Wheatley.
hen Lancashire-based hitech plastics manufacturer Victrex implemented Microsoft Dynamics CRM through fixed-fee CRM implementation specialists Zero2Ten, Victrex group IT director James Fleming knew that getting end-user buy-in and user engagement would be a vital part of ensuring that the project was a success. Hence the decision to trial a concept known as gamification - a concept that Mr Fleming freely admits to slightly sniggering at when he’d first heard it mentioned at an IT user conference. “But the more we thought about it,
Gamification takes gaming principles, and applies them to a commercial environment, in order to motivate users and drive behaviour change William Grobel Deloitte & Touche
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the more we realised that gamification could perhaps solve the problem of user engagement,” he recalls. Accordingly, Victrex had an element of gamification built into the new system. Every time that someone transacted with the new CRM system, ‘points’ were allocated to them based on the calibre and nature of the transaction. “The more transactions people made, the more
points they earned - and there were prizes for the people with the most points,” he explains. Better still, he adds, gamification didn’t just positively impact upon user engagement with the new system, but it also helped with users’ training, familiarity, and ability to fully engage with all aspects of the new system. “Encouraged by the possibility of winning prizes, people did indeed use the system more - and the more that they used the system, the better they got at using it,” says Fleming. “Plus, when they encountered things that they didn’t understand, they were more likely to phone someone up and ask for help.”
Project testing
At systems implementation specialists K3 Syspro, operations director
of the world’s largest 2,000 companies expected to deploy at least 1 gamified application by end of 2014
By 2018 the overall market for gamification tools, services, and applications is projected to be
Gamification
IT in Manufacturing
Serious business made fun Welcome, in short, to an idea that is fast going mainstream in the world of IT and enterprise systems. It sounds wacky, but a growing number of testimonials - as with Victrex - suggest that gamification is a very real step forward. “Gamification takes gaming principles, and applies them to a commercial environment, in order to motivate users and drive behaviour change,” says William Grobel, customer engagement manager at business advisors and accountants Deloitte & Touche. “Gamification has proven particularly beneficial with the introduction of new IT systems. These systems require a behaviour change which gamification can enable - helping users to use the technology correctly, and to its best advantage. “It can really help to deliver greater adoption and participation. User acceptance and adoption is where new IT programmes often fall down, and gamification can help to prevent this.” Indeed, he adds, a properly targeted gamification programme can drive system engagement among several distinct IT-using groups, including the internalfacing workforce (delivering benefits such as increasing productivity), outward-facing employees (generating
Cathie Hall also sees gamification as comprising a useful tool during implementation, in areas such as testing, and training. Better still, she points out, by encouraging proper gamification, companies can avoid the pitfalls associated with other incentive methods. “We’ve seen customers link project progress to external financial rewards, which can drive people to get the project across the line at all costs, without proper testing, training, or debugging,” she notes. “Gamification provides incentives, but throughout the project lifecycle, not just at the end.
improved sales), and supply and product development partners (improving collaboration and business alignment). Which is why, it seems, a growing number of software providers are encouraging customers to consider gamification as part of their implementation strategy. “We’re recommending that customers use it,” says Gil Bouhnick, vice-president at workforce management specialist Click Software. “It helps the user experience, and if users enjoy interacting with an application, then they’re more likely to use it, and work productively with it.” Infor, too, has built gamification into its Ming.le business process social collaboration tool, on the basis that the more that users interact with it, the more the power of a business collaboration tool can be amplified. “Gamification helps to leverage collaboration, especially when it encourages the identification and use of skills that can benefit the organisation,” says Emily Williams, senior product manager of Ming.le at Infor. “It’s more than just encouraging people to post into an application - it’s actually about rewarding behaviours that get problems solved, and which identify ways of getting results.”
Encouraged by the possibility of winning prizes, people did indeed use the system more - and the more that they used the system, the better they got at using it James Fleming, Victrex
It’s a point underscored by Deloitte & Touche’s William Grobel. For gamification to succeed, he emphasises, it’s important to consciously think through what it is that management wants to achieve. Handing out points and prizes without this step, he stresses, can result in only partial success. “Gamification really comes down to programme design,” he concludes. “First, you must define the behaviours that you want to change; then you identify the activities or achievements that identify the behaviour; then you identify the intrinsic and extrinsic rewards and recognition, and then define how those rewards are made apparent to users.” June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 67
Time Management Systems - Crown Computing
IT in Manufacturing
Time to W change Time is money. So what can you do when your company’s time recording system is no longer up to the task? Unilever Ice Cream shares its experience. Unilever’s Wall’s Ice Cream factory Gloucester
10 production lines
486
employees
3,000,000 products a day Products include the Cornetto, Magnum and Viennetta
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hen Unilever first acquired the Wall’s Ice Cream Gloucester factory - along with three former Birds Eye Wall’s frozen food sites - there was an old barcode-driven time recording system in place. “Our ten-year old system was hugely manually-intensive and all it did was produce paperbased reports, the main purpose of which was to capture whether people had attended work or not,” says HR manager Andrew Hurcum. The allocation of staff costs against specific product lines was a complex manual process involving four fulltime clerks and a HR department administrator. The costs were accrued against each unique stock keeping unit (SKU) code although this was problematical due to many obsolete product variants.
New Activity-based Costing Model
Unilever UK Ice Cream then decided to replace the legacy system and switch to a time-based activity management solution. This would extend the analysis capabilities from the simple categories such as production or training to more detailed activity codes. These would show which production line or officebased task was involved. “We wanted to get everybody to clock including the site manager,” Hurcum says. “Our business drivers were about simplification and moving to an activity-based costing model. We needed a new system to help us plan our production activity.” Although this had to monitor attendance, absenteeism, and sickness effectively, it also had to reduce administration and be easyto-use. Responsibility was to be devolved to managers and team leaders, people best placed to understand the hours and activities of their staff. They would also handle any administration online rather than through paper-reports. Several solutions were reviewed including Crown Computing’s Open Options advanced employee management system. Of particular concern was simplicity: Was the system easy to use for production line managers? And could it be adapted quickly to reflect local rules changes as the business evolved?
Our business drivers were about simplification and moving to an activity-based costing model. We needed a new system to help us plan our production activity Andrew Hurcum Unilever UK Ice Cream
Rapid Implementation
The system was originally installed for several locations - only Gloucester remains owned by Unilever. Crown Computing consultants provided software installation, training, and assistance with configuration for the Activity Management and Workforce Management modules. The new system was live within four months. “A Crown Computing consultant helped us to manage the whole of the project, implementing what we’d designed on paper and showing us how to configure the rules so the system accurately reflected our requirements,” says Hurcum.
Good Understanding
Whenever an employee clocks in, the system allocates their working time to a pre-scheduled task set through Open Option’s Activity Planner. Last-minute changes are possible to cope with absences or to switch staff around to cover production demands. Through Activity Management, managers now appreciate labour costs at activity, production line, or factory level thanks to built-in and third party reports. And, if needed, help is just a phone call away. “Crown Computing has built up a good understanding of our business and their approach to training was excellent. Open Options is very easy to use and does exactly what it says it does. The help desk is extremely friendly and helpful too,” says Hurcum. There’s no need for dedicated administrators, absences are down though immediate access to better information, and the payroll is accurate. The company is now deploying people more cost effectively too.
Snapshots
Finance & Professional Services
Winds of change £3bn of funding for operations and maintenance innovations in offshore wind.
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he new funding for the UK’s renewables supply chain was announced by GROW:Offshore wind, a collaborative enterprise supported by professional service firm Grant Thornton, MAS, the trade body RenewableUK and Sheffield University. The Knowledge Transfer Network is also supporting delivery of the funding which emanates from the Regional Growth Fund.
We’ve made the process as simple and straightforward as possible so applicants could potentially be accessing funding by the end of July Richard Ousey GROW:OffshoreWnd
It is thought that operations and maintenance (O&M) work in the offshore wind supply chain could be worth upwards of £2bn by 2025 and GROW:Offshore wind is urging UK firms to take a significant share of the action. Recent analysis shows that the UK has the capability to do this. Some 86% of the O&M content for the Robin Rigg in Solway Firth is UK sourced. GROW:OffshoreWind’s Richard Ousey assures that the application for this funding is simple, targeting accessibility for smaller firms. The funding can be used against a number of different business costs including: • Personnel costs • Equipment • Building and land • Contractual research and patent acquisition or licensing • Other operational costs Applications which propose to use funding for work with external technology partners will find particular favour according to the application brief. Applications for this RGF funding must be submitted by June 20 and must be utilised between August 1, 2014 and July 31, 2015. FURTHER INFORMATION: Find out more at www.growoffshorewind.com
UK will M in the25 wind O& 20 Offshoreh over £2bn by be wort
Access the funding brief at bit.ly/GROWOWFundingbrief
Business time The Business Bank doubles ECF limits and raises initial investment bar.
T
he British Business Banks, set up by government to boost economic development and bridge funding gaps for smaller firms has doubled the potential commitment it can make to new Enterprise Capital Funds to £50m. At the same time, the maximum initial investment that can be made by each fund has been raised from £2m to £5m. ECFs were established to address a UK market weakness in supplying equity finance to SMEs. The Business Bank provides up to two thirds of the finance for a new ECF with the remainder supplied by partner financial institutions. To date, 16 ECFs have been established to deliver commercially focussed growth finance to British SMEs and around 170 firms have benefitted. The aggregate ECF value stands at over £530m. According to Business Bank research however, the bank may have a struggle increasing utilisation of these funds. A report published in late 2013 showed that most SMEs tend to use overdrafts and loans to fund expansion and business costs, rather than equity and other nonbank finance. Furthermore, SMEs do not tend to look far for their funding according to this report. About 70% of SMEs only visit one finance provider when seeking support. Furthermore, only 20% seek external advice to optimise their funding application. The existing ECFs are largely regionally focussed with a number in the Midlands. Others target specific business or technology types including science and engineering and software. FURTHER INFORMATION: Find out more about existing ECFs at bit.ly/BBECFs
June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 69
International Tax Benefits
Finance & Professional Services
than that. But the US is now unusual in continuing to operate a global system, while at the same time making it relatively easy for US companies to earn low-taxed income overseas. This leads to significant amounts of cash being held offshore – Pfizer is estimated to hold some $63bn – and a very high tax cost if the money is paid back to the US. Pfizer is carrying a balance sheet provision of around $19bn. In contrast, eBay recently announced that it would pay US tax of $3bn on bringing back $9bn of earnings into the US. The US tax system therefore provides a subsidy for US companies to make overseas acquisitions rather than US ones: they can use the gross funds, rather than having to pay US taxes. In some cases (such as the GE/Alstom transaction) it is simply a
With US pharmaceutical giant Pfizer recently making a significant play to take over its UK counterpart AstraZeneca, Heather Self, partner at law firm Pinsent Masons explains the tax benefits for US firms looking to make a move in the UK.
T
here have always been US takeovers of European companies – the US is probably still the largest capital-exporting economy in the world. But recently, there seems to have been a particular focus on the tax benefits of some major deals – the proposed bid by Pfizer for AstraZeneca; the potential acquisition by GE of part of Alstom, and the recently failed merger proposal between Publicis and Omnicom, to name but a few. Broadly speaking, most countries’ tax systems are either global or territorial. A global tax system taxes companies on their worldwide income, while a territorial system focuses primarily on income earned in the home country.
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In order to stop income being taxed twice, the global system allows a credit for foreign taxes paid against the home country tax on the same income. So if a US company earns $100 in the UK, the UK tax paid of $21 can be offset against the US tax of $35. A territorial system simply gives an exemption for foreign income, so income is taxed once wherever it is earned. Of course, the detail is always more complicated
US inversions are not new, but there are proposals to tighten up the rules later this year, which may be a driver in the current spate of deals
case of spending funds on European assets. But in more extreme cases, the whole group may “invert” by putting a European holding company on top, as was the proposal in the Pfizer/ AstraZeneca bid. This means future profits can flow back to shareholders, or be reinvested, with a much lower US tax cost. US inversions are not new, but there are proposals to tighten up the rules later this year, which may be a driver in the current spate of deals. Meanwhile, is it a problem if the UK is seen as the best place for a new holding company? Not at all, provided it comes with real jobs and real activity in the UK. But if the UK is just seen as a convenient place to hang a brass plate for tax purposes, that could be a different story and may lead to tougher UK tax rules in future.
When funding works LumeJet sheds light on what makes government and private investors stick with you.
R
ead industry news and you will soon be overwhelmed by the sheer number of announcements touting funding for technology, process and business development. Cynics, and there are many of them, say these stories are nothing but irritating gusts of hot air designed to provide politicians with something to boast about when they’re trying to convince industrial leaders that they really care about them. In reality, the cynics complain, extracting cold hard cash from such schemes is akin to alchemy – and just about as valuable a use of time. But, however cynical you may be, there’s no denying that there are companies out there that have made the system work for them. They’ve tapped government funds, convinced venture capitalists and lured in High Net Worth Individuals with tech-
In 2014-2015 there is
£50m of SMART funding available from the Technology Strategy Board
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bugs to support their ambition to change the world with a new product or process. LumeJet is one such company. “I’ve spent the last 25 years building up printing technologies companies,” says LumeJet founder and CIO Trevor Elworthy. “LumeJet is now squarely into production mode and we expect to turn a profit for the first time next year. We are immeasurably grateful for the patience and belief of our investors, and to bodies like the Technology Strategy Board, who have helped us reach this stage.” Emphasising that government funding initiatives really can make business dreams come true, Elworthy says “I’ve never found it overly onerous to apply for TSB funding. I’ve used three grants, one with a previous incarnation of the company and two with LumeJet. “As with our funding from government backed investors MidVen and AngelCoFund, we have
The technology So just what is it about LumeJet’s technology that gets investors and funders excited? Essentially, what the concept achieves, is the highest yet quality of printing - all without the use of ink. Instead of jetting ink onto paper, LumeJet ‘jets’ channels of light – hence the name. Lumen means light in Latin and the ‘jet’ element should be self-explanatory. In the first product, red, green and blue light is projected at very high resolution from tiny LED chips on the print head onto a broad range of coated photographic media. Three layers of emulsion on the media then react to form different shades of cyan, magenta and yellow. The depth of colour is controlled by the amount of energy applied by each different coloured light. The result is the highest possible quality print in an incredible range of colours, previously unseen in commercial print. Of course it’s not quite that straight forward. In order to gain absolute precision and clarity in end image, the light from the LEDs needs to be focused using an elaborate fibre optic reduction lens which takes the beams of light emitted from 300 LEDs down to a 60 micron light dot for 400 ppi resolution – as good as the eye can see. In other applications, LumeJet can print with UV light, or with smaller dots – for example, the technology is scalable down to 5 microns for electronics applications. Read more about the technology at www.lumejet.com/technology. To find out more about TSB funding for photonics and other technologies go to www.innovateuk.org/funding-support.
When Funding Works
Finance & Professional Services
LumeJet’s funding history in brief
The inner workings of LumeJet’s printer which is now on the market and selling internationally
found applications for this funding involves a responsible level of due diligence, but no more than other institutional investors.” Success depends on the breadth of potential impact you can show a technology is capable of, says Elworthy. Show that your technology has the potential to disrupt an industry by making it more efficient, offer leaps in capability or reduce environmental impact and you’re halfway there. Show that it could disrupt multiple industries and massive markets and you’re really onto a winner. And LumeJet’s technology promises all these things. Its concept is novel, challenging the accepted truths of printing – i.e. that digital has to be inferior to conventional print, and that you can have great photos or text, but not both together. LumeJet’s light based printing on photo-sensitive substrates creates the best quality seen to date. Its first product caters to a growing market for short-run high-quality printing for applications such as commercial pitch books and coffee table books. Furthermore, a new phase of TSB funding for the ‘LumeBar’ high throughput print head will broaden the impact of LumeJet’s light printing technology; potentially also making waves in the display industry by bringing progress to the development
2000:
Spurred by an idea that originated while helping ColourCare transform its business for the digital age, Mr Elworthy secures £50,000 of Smart funding from TSB for a 12 month research programme at Warwick University. The project was supervised by Dr Duncan Billson.
2001:
Elworthy and Dr Billson set up spin-out DigePrint with £250,000 of seed funding from Mercia Fund Management. The LumeJet concept wins the Lord Stafford Award for Innovation bringing another £5,000 into its coffers (and a nice bowl).
2002:
Elworthy secures over £1m investment from Catapult Venture Fund, EMBAN, and private investors.
2006:
Following some years of technology development in collaboration with an Italian firm Elworthy secures over £1.5m from ESynergy, Pre-X, Catapult Venture Funding, EMBAN, LBA and private investors to develop a Mark II machine.
2010:
Backed by a group of shareholders and venture capital provider MidVen, Elworthy acquires the IP and assets of DigePrint after its joint venture with German firm JOBO AG falls through when the latter enters administration. He founds LumeJet.
2011-13: A further £6m from MidVen, AngelCoFund, Wren Capital, Martlet, ERA Foundation and other angel investors, as well as a £100,000 TSB grant to support print engine development, bring the new digital print head and LJ S200 machine into being. 2013:
LumeJet receives a £250,000 of TSB Smart funding for its LumeBar technology. The company also receives a £30,000 grant from UKTI to support marketing of its technology overseas.
2014:
Following exhibitions at the London-based IPex and Germany-based INPRINT trade shows LumeJet sells four machines and begins another funding round with investors to raise £1.5m. It aims to manufacture and sell over 500 machines over 5 years and grow print head sales and licensing, generating £75-100m of revenues.
of flexible and short run screens and other plastic electronic products. Of course, LumeJet has not become the company it is today, employing 30 people, purely through government support and a lot clever enthusiasts. Venture capital and the tenacious investments of private angel investors have been critical over the past 14 years, and public backed funding really helped secure private investment. CEO Paul Anson led much of the fund raising and engagement with investors. Mr Anson came on board to lead the company into commercialisation and had credibility with investors thanks to a track record in the print industry. “Paul has led four significant rounds of fund raising and at each point, the company has been able to demonstrate progress and build evidence that the commercial proposition is valid”, says
Elworthy, who admits that LumeJet is somewhat unusual in its strength of shareholder support, predominantly from business angels like those that coinvested with AngelCoFund and Midven. The company’s success in maintaining shareholder support from different investment groups resulted in being awarded the 2012 UKBAA Syndicate Deal of the Year. The next phase of commercial development, alongside a core focus on ramping up production and continuing R&D, is to invest in marketing and channel development – “It’s time to raise awareness and build routes to market,” says Elworthy – not something all manufacturers are notably good at, but the experienced team at LumeJet is highly motivated to maximise market impact and build a globally significant business now that the technology is ready. June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 73
The future of driverless vehicles, RDM Group
Manufacturing Technologies
Automatic
for the people Driverless vehicles, once confined to the reels of Hollywood films and pages of sci-fi novels, are set to become a reality thanks to a Coventry manufacturing firm. James Pozzi looks at the project.
W
hen Milton Keynes was built as a satellite town in the London overspill of the 1960s, its image resembled that of a futuristic urban landscape. And as such, it’s quite fitting that it is to serve as the location for road testing the futuristic Low Carbon Urban Transport Zone (LUTZ) Pathfinder project, which will see electric pods used in Milton Keynes from next year. The selling point of the project is that the vehicles are completely driverless. The aim is for them to automatically navigate the pavements of Milton Keynes, transporting passengers around the town’s key places of interest. And if their road test around the streets of the Buckinghamshire town proves successful, they could pave the way for a new way of getting from A to Z. Making this possible on the manufacturing side is Coventry-based RDM Group, engineering specialists for the automotive industry. After an open Official Journal of the European Union (OJEU) tender process, the company beat five other bids to be chosen by project managers, the Transport Systems Catapult, to become the manufacturing partner for the LUTZ Pathfinder project.
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Having recently celebrated its 21st anniversary and expecting turnovers of £8m this year, RDM will collaborate with Oxford University’s Mobile Robotics Group to create three test vehicles with the first set for completion by the end of the year. Each electrically powered pod can carry up to two passengers at any one time while reaching top speeds of 7mph. The vehicles will be assembled at the company’s new £400,000 advanced engineering centre in Coventry, a 20,000 sq ft site acquired earlier this year. David Keene, CEO of RDM Group, says the ambition of the project gives the firm the chance to test its skills and abilities on a larger scale. “The LUTZ Pathfinder project represents an opportunity for us to showcase our technical abilities in advanced vehicle design, development and build to both a UK and global audience,” he explains. Following assembly of the pods, robotics experts at Oxford University will install their technology and begin testtrack trials early next year. Mr Keene says every base is covered for the undertaking of such an ambitious project. “We have invested heavily in attracting the right people with skills in advanced
Mobile apps and vehicle engineering and all of these attributes will be brought into play to make sure this ambitious vision becomes reality
electronics, software development, mobile apps and vehicle engineering and all of these attributes will be brought into play to make sure this ambitious vision becomes reality,” he adds. But before the vehicles go automatic, they will remain manually operated by humans throughout the duration of the assessment programme. Neil Fulton, programme director at Transport Systems Catapult, says the aim of the project is to redefine how the general public thinks of the term driving. “The LUTZ Pathfinder project will redefine how people think of driving, and therefore fits in perfectly with our mission to promote UK business growth in the field of intelligent mobility,” he says.
Hauser Review
Manufacturing Technologies
Hauser’s back Jane Gray reports on the start of the national Catapult review programme.
“H
ermann’s back on tour. This is his first gig!” joked David Willets as he took the podium at the Royal Academy of Engineering for a select meeting of industry leaders in early May. “It’s like the return of The Rolling Stones,” he quipped brightly. With Dr Hermann Hauser sitting calmly, in navy jacket and polka-dot neckerchief, the comparison was perhaps a little far-fetched. But nonethe-less, Mr Willets was right to imply that Dr Hauser’s return to the UK is an exciting occasion for industry.
The backstory
In 2009 Hauser was called on by Peter Mandelson, then Business Secretary, to investigate the state of the UK’s industrial innovation landscape and to formulate a plan to strengthen it. This result, in a 2010 report, was the concept for a series of Technology Innovation Centres (TICs), which would be funded in triumvirate by government, industry and competition funding. In an encouraging display of continuity and commitment to a stronger British industrial base, this concept was picked up and developed by the current government when it came to power – it was a turn of events which Hauser himself says was a surprise, but a welcome one.
The review
The TICs are of course now the Catapults, of which the High Value Manufacturing Catapult is the longest standing having opened its doors in October 2011. There are seven other Catapults today, and two more to come on line next year – Energy Systems and Precision Medicine. The network is young, some would say too young to require an in-depth review. But that is exactly what Hauser has returned for, following a commission from Business Secretary Vince Cable. Over the next few months he will visit all of the burgeoning centres,
assessing how well they are doing and evaluating where gaps between Catapult disciplines might point to a new Catapult being formed. Hauser will make suggestions around where the two new Catapult’s might best be located and propose ways in which the Catapults could link better with other government initiatives to form a more tightly woven industrial infrastructure – initiatives like the Business Bank, for example. Willett’s speech at RAEng, which welcomed Hauser’s insight, also called for the future strategic direction of the Catapults to take into account the Eight Great Technologies identified by the Science and Universities Minister for priority science funding. “Some of these technologies are already covered by the Catapults,” he said “But is there an argument, for instance, for a Robotics and Automated Systems Catapult?” However, while enthusiastic about the idea of growing the Catapult network, Willetts was also cautious of overstretching it. He suggested that, while government support for the Catapults must be long term, we should be wary of “fossilising” technology centres. Government and industry, in partnership, should not be afraid to
Dr Hermann Hauser. Image courtesy of SirCam
A selection of findings from the RAEng Catapult review day Catapults need to refine their methods of engagement with SMEs – but one model should not be made to fit all Catapults should collaborate more closely with existing R&D facilities across the UK to make the most of the installed research base Catapults should aim to become “iconic” centres for the inspiration of next generation professionals in their fields The Catapult funding model works well but the centres could do more to put forward collaborative bids for competition funding – such as Horizon 2020 A wider view of the group’s findings will be reported by the Technology Strategy Board. close a centre should a technology avenue fail or be superseded he proposed. Broadly, Willett’s audience – and Hauser – agreed and during an afternoon of workshops which gave guests the opportunity to share their observations on the operation of the Catapults, a recurring warning was made against investing in new centres at the expense of the capability of those which already exist. Hauser’s first port of call for his Catapult review will be the High Value Manufacturing Catapult. June 2014 | Issue 5 | Volume 17 | www.themanufacturer.com 75
LAST WORD
Ask not what your country can do for you... Jane Gray calls for a sector CSR ambition.
‘‘T
here is no such thing as society. There is a living tapestry of men and women…” A year after Margaret Thatcher’s death, these words - so often and infamously paraphrased – came back to me in a month where a white paper from Cranfield University sought to understand better the relationship between productivity, quality of life and the measures businesses use to express their competitiveness (p32). It’s far from the first time that a symbiosis between our living standards and industrial health has been explored. For years academics have tried to pinpoint the perfect balance between leisure and structured working time to return optimum levels of productivity. Some companies, famously Google, have exploited the benefits of leisure within that structure; creating play areas to help nurture innovation. Others have used pleasant working environments to try and lure in talent – both approaches essentially amount to
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productivity improvement strategies for enhanced competitiveness. Speaking generally, manufacturing companies – which tend to be quite conservative – have been slow to trial these approaches to improving productivity on either an individual or collective level. They have also missed opportunities to flip the productivity-quality of life relationship on its head to promote the contribution of the sector to wider social wellbeing. Why does this matter? Firstly, there is matter of influencing government policy. As we seek to rebalance our economy, economic arguments have been the primary basis for convincing
politicians that the idea of a postindustrial age is untenable. Advocates of manufacturing have shown government that relying too heavily on financial smoke and mirrors creates an economy without substance. “It is not the creation of wealth that is wrong, but the love of money for its own sake” – another sage observation from Mrs Thatcher. At the center of government, I believe this argument has been well-absorbed. But it could be strengthened and given added potency in the regions with a more explicit explanation of what the economics of a strong, well regulated manufacturing sector lead to – increased employment, higher wages, reduced stress, improved occupational health records and a clear driver for education, according to Cranfield University’s white paper (bit.ly/UKMfgProductivity). These issues are vote winners, they are relevant to local politics in a way that macroeconomic observations are not and they could capture the interest of MPs in their constituencies – many of who have been left unmoved by the rhetoric of support for manufacturing expressed in Westminster. Secondly, there is industry’s image problem. Far too many people in the UK associate manufacturing with negative social experiences. Unemployment, poor working conditions, lack of aspiration in education and so on. Changing these preconceptions requires more than anecdotal evidence or assurances from individual employers that they are different. A strong evidential base with a structure – like Cranfield’s new wellbeing index – for demonstrating a positive correlation between manufacturing and quality of life could make it easier for industry to attract talent – a challenge which is time and again identified as its biggest barrier to sustainable competitiveness. It is too easy to assume that economic arguments for a strong manufacturing base make its social benefits implicit. Perhaps it is time for industry to agree a sector CSR ambition to express this explicitly? Robust and holistic CSR strategies have gradually gained credence as powerful competitive tools in a wide range of sectors. We have called for years for an industrial strategy to tell us what government is going to do for us. How about a strategy which tells government and society what we can do for them?
FREE for attendees from manufacturing companies
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Maximise the potential of your human capital to gain maximum ROI
FlExiblE WoRkFoRcE
9 July 2014 Old Trafford, Manchester Workers are key to unlocking your success and taking advantage of the opportunities available to your company. The Flexible Workforce Conference will provide you with practical opportunities to gain knowledge and understanding of the best methods of forming and sustaining an engaged and flexible workforce. During this one day conference, you will be presented with examples from innovative manufacturing case
studies and gain an understanding of their approach to the practices of human capital management, including annualised hours. The event will highlight the benefits and challenges of changing working practices and raise your awareness of obstacles which can prevent a smooth transition and the solutions to overcome them. Other discussion topics will focus on the legal issues of employment contracts, working hours regulations and the effects it may have on your workforce strategies. Gold sponsors:
Themes and topics included: Systematic approaches to workforce management Workforce forecasting and scheduling Strategies for managing agency staff Annualised hours Recruitment and retention strategies Entry level engagement strategies Managing and sustaining change in the workforce An aging workforce and its impact on the way manufacturers operate Improving skills to create workforce flexibility
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