The Manufacturer March 2013 by The Manufacturer

www.themanufacturer.com March 2013 Vol 16 Issue 2

www.themanufacturer.com | March 2013 | Vol 16 Issue 2

How well do trade bodies speak for you? o alsissuceial nt: isur spepleme th o ee sup

3 1 0 2 P R E

S und re bo t futu s u e o h o t em t intise systn tips h g i tio t ins rpr For f entereparaonnec o d p P C tes an for ER lega de

Manufacturing Leadership

In for a pound: How to make millions from a £1 investment What Women Want: Industry approaches to addressing gender imbalance

Interview Peter Digby CEO, Xtrac

Workforce and Skills

Talent Spotters: Progressing apprentices to post grad qualifications High Flying Dropout: Ditching university turned out to be a smart move for Devon Sumner

IT in Manufacturing

PLM: Suretank’s Sure Bet: A different perspective on quality control

Manufacturing Technologies

Britain’s Biotech Boom: UK strategy and strengths in the new multi-billion pound industry

Finance and professional services

Tribunal Trouble: What difference will fees make to the number of ET claims? RTI Update: Ensuring compliance with HMRC’s new real time reporting system

Sustainable Manufacturing

The Future of Emissions Disclosure: Mandatory carbon reporting and supply chain expectations

In partnership with:

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Editor’s comment

Hold onto your hardhats – March is going to be quite a month UK manufacturing has got off to a good start in 2013. The CBI reported in its Monthly Industrial Trends Survey in Feb that orders are up 15% and output moderately increasing – though getting export levels to budge upwards remains a struggle. The month closed with a refreshed show of commitment to the sector from government via its third annual Manufacturing Summit in Gaydon. In order to capitalise on modest wins however, we all know that investment from manufacturing firms in skills and technology are essential. March promises a whirlwind of events focused on encouraging and celebrating the former with skills and apprenticeship awards ceremonies from the Design & Technology Association (p18) and sector skills council Cogent among others.

The skills frenzy continues at exhibitions and events. The International Materials Handling Exhibition (March 19-22) includes a dedicated Skills Zone to encourage understanding of logistics and supply chain skills gaps for the first time this year and the well established Big Bang science fair (March 1417) and National Apprenticeship Week (March 11-15) return. International Women’s Day on March 8 will bring opportunities to access a broader talent pool into sharp focus. In this issue of The Manufacturer, we celebrate the contribution being made by high performing female employees in UK manufacturing firms (p52) and the way their experiences can change public perceptions of the sector (p54). But while the celebration is justified, much remains to be done to achieve gender balance in manufacturing, particularly at a senior level (p40). EEF is due to launch its FTSE 100 Women in Manufacturing report, researched in collaboration with Cranfield University, on March 19 with recommendations on how large firms can move faster to improve equality in the boardroom. Trying to develop more intelligent approaches to talent management and progression in manufacturing is a key trend for 2013. A recent Aberdeen Group report, Human Capital Management Trends 2013 observes a growing trend to elevate HR departments from back office to board level strategy discussions as a result of talent management concerns (p44). Developing effective Human Capital Management systems is a new holy grail for software vendors seeking to service industry will host its second Manufacturer needs and on March 21 Director’s Forum Dinner in 2013 with the remit of discussing the usefulness of such systems. Can predictive analytics really help? Or is successful talent management down to good old fashioned gut feeling and engaged leadership?

Cover image: There are 3,500 trade associations in the UK. Are they all doing a good job for members? (p22)

It’s a people-technology debate that is neither new nor unique to HCM solutions. It will certainly be a core theme at ERP Connect 2013 (March 20) where the appropriate selection of ERP implementation teams and consultant skills will be discussed by industry speakers from companies large and small (p29). Jane Gray, Editor

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The team Editorial

Nick Hussey, Managing Director

IT Editor Malcolm Wheatley

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

malcolm@malcolmwheatley.co.uk

Associate Editor Roberto Priolo

r.priolo@sayonemedia.com

Reporters George Archer

g.archer@sayonemedia.com

Tom Moore

t.moore@sayonemedia.com

Design

Art Director Martin Mitchell

m.mitchell@sayonemedia.com

Henry Anson, Sales Director

Designers Alex Cole Vicky Carlin Nick Bond

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

design@sayonemedia.com

Sales and Events Head of Events Jon Tudor

h.anson@sayonemedia.com

j.tudor@sayonemedia.com

Subscriptions Manager Grace Gilling g.gilling@sayonemedia.com

Will Stirling, Editorial Director

Project Director Matt Chilton

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

m.chilton@sayonemedia.com

Sales Manager Benn Walsh

b.walsh@sayonemedia.com

Sarah Hough

s.hough@sayonemedia.com

Marketing Manager David Farrow

w.stirling@sayonemedia.com

d.farrow@sayonemedia.com

Conference Producer Eva Lindsay

Jane Gray, Editor

e.lindsay@sayonemedia.com

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

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

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

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

Client Account Managers Peter Kealy p.kealy@sayonemedia.com

Joe Green

j.green@sayonemedia.com In order to receive your monthly copy of kindly email g.gilling@sayonemedia. com, telephone 0207 401 6033 or write to the address below. Neither The Manufacturer or SayOne Media can accept responsibilty for omissions or errors. Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.

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

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

Cranfield University EEF Institute for Manufacturing, University of Cambridge

Contents 04 News and regular columns A summary of manufacturing news and events along with commentary on industrial research and policy

17 Lean on me

58 IT in Manufacturing

PLM Suretank’s Sure Bet: Engineering manager David Keeley shows why product data management systems are not the best choice for solving quality control issues relating to product documentation

Roberto Priolo, editor of Lean Management Journal, on international lean deployments and getting back to basics with the tool set

62 IT news

19 Naked Engineer

Britain’s Biotech Boom: How UK manufacturing and society stands to benefit from the new multibillion pound global industry

ET phone home – fees for employment tribunal claims promise savings for Hemlock Engineering

22 Lead Body Language: How well do manufacturing trade bodies represent their members? Could the “littered” marketplace be consolidated to create more value? Jane Gray reports

30 Interview Top Gear: Petrol head Peter Digby talks to Will Stirling about supplying to formula classes, reaching into volume manufacturing and the impact of employee ownership on business culture at Xtrac

Pillar features Manufacturing Leadership 38 In for a Pound: A remarkable investment story.

66 Manufacturing Technologies

72 Finance and professional services Tribunal Trouble: Will the introduction of fees for filing employment tribunal claims encourage employers to create more jobs? Tim Brown reports

76 Sustainable Manufacturing

The Future of Emissions Reporting: In April it becomes mandatory for UK listed companies to include carbon emissions in directors’ reports. The Carbon Disclosure Project predicts growing pressure on supply chains to support emissions reductions

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

Four manufacturing companies, bought for a £1 each and now making millions in profit

84 TR Fastenings

enough to effect significant change in the sector’s gender imbalance? Jane Gray canvases industry opinion

posed to the manufacturing skills pipeline by government proposals for reform of the design and technology curriculum

40 What Women Want: Is voluntary action

88 Last Word: Jane Gray exposes the threat

44 Lead Huskies: Manufacturing Directors’ Forum

members discuss the feasibility of codifying leadership qualities and different approaches to progressing talent in their businesses

Workforce and skills 48 Talent Spotters: Semta highlights apprentice progression routes to postgraduate level and encourages manufacturers to stem the industry brain drain

51 Employee of the Month: Oliver Jukes, design engineer, Rolls-Royce

54 High Flying Dropout: Devon Sumner ditched

university to become an Airbus apprentice. Her experience has had far reaching consequences, changing her parents’ understanding of industry and transforming one school’s approach to careers advice

Manufacturing HEALTH & SAFET Y

MPs to tackle manufacturing competitiveness in major Parliamentary Inquiry The Manufacturer confirmed as sole media partner Chris White MP, Co-chair, APMG

he Associate Parliamentary Manufacturing Group (APMG) is to launch a parliamentary inquiry into future manufacturing competitiveness. Led by Conservative Chris White MP and Labour’s Jonathan Reynolds MP, it will examine how government and industry can work together to achieve a resilient and worldbeating manufacturing sector coming out of recession. Following Lord Heseltine’s report Leave No Stone Unturned, the APMG will shine a light on how government, industry, and business support structures interact with the manufacturing sector to drive growth (p22). Running from March to July, with a report due to be published in the Autumn, it will take evidence from key players in the debate including

Jonathan Reynolds MP, Co-chair, APMG

trade associations, civil servants, trade unions, and chambers of commerce. As official media partner, The Manufacturer magazine will have exclusive access to evidence sessions, and will feature regular updates on the inquiry’s progress. Readers of the magazine will also be able to contribute directly to the inquiry’s work. Chris White MP, co-chair of the APMG said, “We are delighted to be working with The Manufacturer magazine as part of this, our first parliamentary inquiry. Our work in Westminster must be as relevant as possible. Through this media partnership, thousands of manufacturers across the UK will be able to take part in this major piece of research.” Will Stirling, editorial director at The Manufacturer said, “The APMG 2013 Inquiry is exciting. Partly because it interfaces between parliament and industry leaders with a strong voice, and because the subjects it chooses to explore are nominated by industry. It is capable of being an essential part of the formation and delivery - of a manufacturing strategy.” Future editions of The Manufacturer will include details on how to be involved. Watch this space! For more information on the inquiry visit www. policyconnect.org.uk/apmg or follow progress on twitter on @designmfggrp and #apmginquiry

ECONOMY EEF estimated that the UK economy could be boosted by £880 billion between now and 2050, if companies fully exploit opportunities in manufacturing for the low carbon economy. A survey from the trade body found however, that the UK’s position as the sixth largest provider of low carbon goods and services is faltering. (p16) Britain is placed near the bottom of the OECD countries in terms of government spending on climate and energy research and development. “We need government to set out its vision of manufacturing’s place in the low carbon economy, focusing on innovation and providing greater regulatory stability to unlock investment in breakthrough technologies” said Gareth Stace, EEF head of climate and environment policy.

Will Stirling, Editorial Director, The Manufacturer

The Health and Safety Executive (HSE) published draft guidance to help employers comply with proposed changes to workplace first aid. Two pieces of guidance have been published on the HSE website following a consultation on proposals to amend the First Aid Regulations (1981) and remove the requirement for HSE to approve first aid training providers. The changes are expected to take effect on October 1, subject to final approval by the HSE Board and Ministers. HSE policy advisor Peter Brown said: “Removing the HSE approval process will give businesses greater flexibility to choose their own training providers and first aid training that is right for their work place, based on their needs assessment and their individual business needs. “Until the regulations are changed businesses requiring first aid training will still have to use a HSE approved provider.”

AUTOMOTIVE SMMT figures showed strong automotive production for the start of 2013. Car manufacturing rose 1.2% in January to 129,049 units. While 79% of cars produced were exported, strong domestic demand saw output of cars built for the UK market rise 26.1%. “UK car manufacturing grew modestly in January, up just 1.2% on the same period in 2012. Output is typically subdued in January as manufacturers extend holiday periods to upgrade plants and re-tool for new models,” said Mike Baunton, SMMT interim chief executive.

News COMPOSITES Assurances are being sought over the future of 2,500 UK jobs with Heinz Image courtesy of Nick Harris

ACQUISITIONS Berkshire Hathaway, owned by billionaire Warren Buffet, bought food giant Heinz with assistance from private equity firm 3G Capital. The deal, is worth £18bn. Heinz’ key manufacturing facility in the UK is located near Wigan. The site is the largest food manufacturing plant in Europe and the largest site globally for Heinz itself. The factory turns out over 1 billon canned products every year, including the company’s famous baked beans. Union, Unite, met with Heinz to seek assurances over its 2,500 UK jobs.

Planning approval for the Phase II extension of the National Composites Centre (NCC) was granted. Based at the Bristol & Bath Science Park, the new facility will see the NCC’s footprint double in size, making it one of the largest research centres of its type in the world. In December, Chancellor George Osborne announced £28 million of government funding for the Centre. Tom Hitching, NCC business development director, said: “The expanded facility will offer improved facilities for SMEs and a specialist composite hydraulic press focused on enabling the UK automotive industry to automate their composites processes.” NCC Phase II is expected to be operational by the second quarter of 2014.

Manufacturing News SKILLS A £6 million bursary fund was opened to pay for 500 new graduates and employees to study Masters level degrees in aerospace engineering. The bursary is backed by £3m from government and £3m from industry via the Aerospace Growth Partnership brought into being by trade body ADS (p23). Bursaries will cover the cost of tuition fees up to a maximum of £9,500 and will be awarded through a competition run by the Royal Academy of Engineering and the Royal Aeronautical Society. The UK companies sponsoring the scheme through the Aerospace Growth Parnership are: BAE Systems, Bombardier Aerospace Belfast, EADS/ Airbus, Finmeccanica, GKN, MBDA Missile Systems, MessierBugatti-Dowty, Rolls-Royce and Spirit AeroSystems. Paul Everitt, chief executive of aerospace, defence, security and space trade organisation, ADS commented: “This joint commitment of funding from government and industry to create this initiative is an important step – both in securing valuable high-level skills and in taking the successful Aerospace Growth Partnership forward.”

AUTOMOTIVE Exit the EU to boost UK’s car industry advised think tank Civitas. The UK car industry would benefit from an EU exit because an independent UK could attract more investment from car groups in fast-growing Russian and Chinese markets found Citvitas. In 2010 UK exports of cars outside the European Union were worth £9.5 billion, far more than UK exports to the EU26 group, worth £7.8 billion. European countries are also likely to cut a free trade deal with Britain as the EU supplies 84% of the cars bought in Britain, but absorbs under 60% of those Britain builds, giving the EU a strong financial incentive to keep trade open.

IAC members at its first meeting in Westminster

APPRENTICESHIPS A council of industry apprentices was launched to give trainees direct input into relevant policy and strategy developments in government. The Industry Apprentice Council (IAC) consists of 13 industry apprentices aged between 18 and 24. They represent organisations including; Airbus, BAE Systems, Caunton Engineering, DAF Trucks, Ford Dealerships, Ford GB, KMF, MBDA, National Grid, Nestlé and Vauxhall. In its first meeting with government, the IAC spoke to skills minister Mathew Hancock about member experiences of inequality in the promotion of vocational education as opposed to traditional higher education options. IAC findings will be fed into the All Party Parliamentary Apprenticeships Group (APPAG) which will be responsible for progressing ideas and suggestions. The next IAC meeting will give apprentice feedback on the Richard Review of Apprenticeships published last year. The IAC was convened by engineering awarding body EAL and motor industry awarding body IMI.

REGULATION

ORDERS & OUTPUT

Small businesses are not prepared for the introduction of real time PAYE (p75). Ths was the finding of small business accounting firm Intuit’s national survey of over 1000 PAYE-registered businesses. The research revealed that while nearly 60% of employers are now aware of real time PAYE, through communication from HMRC or other sources, less than a third (32%) have actually taken any steps to prepare. That figure drops to 26% for sole traders. This inertia appears to be driven by confusion and complacency, with one third (35%) not taking any steps because they don’t know what they need to do, and one third (33%) because they feel they have plenty of time to make arrangements. The changes to payroll mean that employers will have to start reporting PAYE information to HMRC in real time from April 6 2013.

CBI Monthly Industrial Trends Survey reported a rebound in manufacturing orders. The business organisation expects moderate growth in output over the next three months as a result. The Industrial Trends survey received responses from 436 manufacturers in February. Fifteen per cent said total order books were above normal, an improvement on January’s results and the long run average. Export order books slightly improved but remain well below December levels. Anna Leach, CBI head of economic analysis, said: “export order books are likely to remain relatively weak until global conditions, especially in the Eurozone, improve more markedly.”

Manufacturing News FINANCE

Boeing’s 787 fleet was grounded in January due to safety concerns

AEROSPACE Ray Conner, the president of Boeing’s commercial airplane division met with the head of the Federal Aviation Administration to propose fixes for the battery problems that grounded its innovative 787 jets. The 787 is the first commercial airplane to use large lithium-ion batteries for major flight functions. Boeing said it is confident that it has earmarked the risks to the lithium-ion batteries and identified a small number of changes which it hopes will mean the battery is ruled safe to use. On February 6, US Federal regulators approved one flight of a Boeing 787, with a flight crew but no passengers, to allow the company’s engineers to study possible changes to the plane’s electrical systems that could reduce the risk of another battery fire.

Editor’s choice Our favourite features and blogs on www.themanufacturer.com last month Bullseyes, not bullet points Will Stirling on the need for targets to support delivery of industrial strategy Skills landscape “very confusing” to youngsters Nick Clegg’s despair at the framework young people must fight through to find the right career Embrace alternative finance SMEs find new ways to overcome financial bottlenecks

Bloodhound gang All parts for the primary structure of the supersonic car are now in manufacture! NAS Apprenticeship showcase Video footage from the National Apprenticeship Service to celebrate strong uptake the Apprenticeship Grant for Employers

AUTOMOTIVE The McLaren Automotive announced new details on its anticipated P1 model. Touted as the world’s next hypercar, the McLaren P1, will combine a 3.8-litre twin-turbo V8 petrol engine with a low-weight electric motor to produce instant throttle response. The lightweight electric motor allows for the McLaren P1 to travel more than 10km with electric-only power that produces zero tailpipe emissions. When the battery is empty, the petrol engine will automatically start to maintain drive and charge the battery. The battery can also be charged via a plug-in charger that takes two hours to recharge from empty. McLaren has stated that emissions will be lower than 200g per kilometre despite offering 903 bhp.

Health and beauty products manufacturer DCS Europe increased its lending facility to up to £32m. The decision was taken to bolster the company’s growth drive. It aims to reach an ambitious turnover target of £150m this year. DCS Europe banks with Barclays. Its lending facility previously sat at £19m. DCS is the official UK distributor for Procter & Gamble, Unilever and Colgate among others. The company’s own brand ‘Enliven’, is produced in its new Staratford-uponAvon factory which also manufactures own-label products on behalf of retailers such as Superdrug, Next and Wilkinsons.

INVESTMENT Engineering firm Oliver Valves announced £700,000 of investment in its Cheshire research and development base. 10 new high-skilled engineering jobs will be created through the investment which will expand an existing R&D centre. Oliver Valve’s sales grew by 56% in 2012 and the company founder, Michael Oliver, attributes much of this success to steady investment in R&D. “The enhanced development capacity this new facility will give us will help ensure we retain our hard-won position at the forefront of valve technology in the years ahead,” he said. Oliver Valves employs 1,000 people worldwide, including more than 350 at its Cheshire base. It hopes to achieve a turnover of £100m within the next 12 to 18 months.

The McLaren P1 will be powered by electric hybrid technology confirmed the niche automotive manufacturer

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Enthuse young people to take up vital careers in engineering With not enough young people taking Science, Technology, Engineering and Mathematics (STEM) at further education, many UK companies are facing a skills shortage. Independent, educational charity, The Smallpeice Trust is passionate about closing this skills gap and enthusing the next-generation of engineers. Last year, a record 20,353 students participated in our university-based residential courses, in-school STEM Days and Clubs. Encouragingly almost 50% of our students were girls. Working in partnership with some of industry’s leading organisations, we offer students an engaging, hands-on introduction to the rewarding careers available to them. A corporate partnership offers a range of benefits including the chance to:

• Build a future talent pipeline and help you to achieve your HR objectives • Get employees involved to boost job satisfaction, motivation and skill development • Enhance your brand and profile amongst enthusiastic girls and boys, their families and their communities • Bolster your corporate social responsibility agenda • Maximise potential for PR and marketing opportunities • Offset charitable giving against company corporation tax From sponsoring STEM Days and Clubs, to mini competitions and residential courses, there are many ways in which your company can get involved with The Smallpeice Trust. Smallpeice corporate supporters include: ARM, Babcock, BAE Systems, EDF Energy, Google, National Grid, National Nuclear Laboratory, Senergy, Southern Water, Ultra Electronics Controls… and many more.

“At Babcock, we are very keen to encourage young people towards a career in engineering and the courses run by The Smallpeice Trust are a fantastic way of demonstrating the variety of options open to them as they start to think about their career choices. The wide choice of courses offered by The Trust gives students the opportunity to broaden their horizons outside of the normal curriculum.” Rosemary Prout, Graduate Training Manager Marine and Technology Division, Babcock International Group To find out more about the benefits of becoming a Smallpeice Partner, contact our Chief Executive, Dr. Andrew Cave on 07885 227 342 or email andrewc@smallpeicetrust.org.uk.

www.smallpeicetrust.org.uk

Big things happen with The Smallpeice Trust

News APPRENTICES An apprentice at BAE Systems cut the first steel for a new main section of HMS Prince of Wales, the second Queen Elizabeth Class aircraft carrier. The symbolic first steel cut is traditionally performed by senior members of the Royal Navy, but 21-year old fabricator Shaun Collins was given the honour after receiving a Personal Achievement Award at the BAE Systems UK Apprentice Awards. The main section of HMS Prince of Wales, centre Block 02, will contain part of the aircraft hangar that will house F-35 Joint Strike Fighter aircraft, as well as accommodation, recreational facilities, a laundry and bakery.

DEFENCE The Ministry of Defence committed to continue funding to develop a new diesel engine for the Royal Navy’s rigid inflatable craft. The prototype is being developed by West-Sussex-based Cox Powertrain in partnership with engineering R&D company Ricardo. The project has also been supported by £6.7 million of private investment. The outboard engine will limit the use of petrol at sea, which is expected to reduce the risk of fires and explosions while overcoming logistical problems that may result from the presence of different supply lines used in situations where more than one type of fuel is needed for different types of craft.

Correction “Delivering the data-driven business” published in February 2013: It was brought to our attention that the reference to the consumer business of Kimberly Clark in this article was incorrect. To clarify, it is Kimberly-Clark Professional, the providers of hygiene and cleaning solutions for the workplace, which is using PROS analytics software to support its sales growth in Europe. The article has been updated online and the reference to the Kimberly-Clark consumer organisation removed.

Datesfor yourdiary March

EEF holds its second National Manufacturing Conference at the QEII conference centre in Westminster. Ed Balls, Shadow Chancellor will give the opening keynote and the event will be chaired by Krishan Guru-Mathy, presenter of Channel 4 News. www.manufacturingconference.co.uk

6-7

LMJ Lean Immersion Programme, hosted by Accolade Wines in Bristol. This event, part of an ongoing programme delivered at manufacturing sites around the UK and abroad, offers a practical opportunity for delegates to improve their lean knowledge and skills through people who’ve been there, shared the pain and succeeded in achieving real, bottom-line results and workforce engagement. Contact Benn Walsh (b.walsh@sayonemedia.com) on +44 (0) 20 7202 7485

ERP Connect takes place at the Northampton Marriott. Delegates will learn about the variety of different ERP systems on offer from a broad range of leading vendors such as Columbus, SAP and Oracle. A conference programme with case studies from manufacturers already on their ERP journey will augment the day. More information available at www.erpconnect.co.uk or call +44 (0)207 202 4890 Sponsorship opportunities are available for future ERP Connect events; contact Henry Anson (h.anson@sayonemedia.com) on +44 (0)207 202 7482 or +44 (0)2033 974930

19-22

The International Materials Handling Exhibition (IMHX) takes place at the NEC Birmingham. There will be over 400 exhibitors in attendance with 40 free conferences to choose from. For more information go to www.imhx.biz

Spacetech 13 takes place at the National Printable Electronics Centre, NETPark in County Durham. Chaired by UK Space, the trade association for the UK’s space industry, the one day conference will focus on the new and developing opportunities within the global space technology industry.

April

Develop3D Live takes place at the Warwick Arts Centre, University of Warwick. A must attend event for all design engineers and users of CAD or PLM software. This year’s event will include a keynote from Autodesk president and CEO, Carl Bass as well as an exhibition displaying the latest in product development technology. To register at this FREE event visit: www.develop3dlive.com

Caterpillar hosts a Building Construction Products Factory Tour. The event focuses on lean and its successful application to manufacturing busineeses. Delegates will see and hear about the Caterpillar Production System and how six sigma is used across the business. For further information or to book your place, contact Benn Walsh (b.walsh@sayonemedia.com) on +44 (0)207 202 7485

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

ManufacturingAppointments UK Appointments Ian Davis Rolls-Royce

Aero engine manufacturer Rolls-Royce appointed Ian Davis as successor to Sir Simon Robertson as chairman of the company. He is to join the board as a non-executive director on March 1 this year, and take over from Sir Simon at the end of the Annual General Meeting

on May 2. Mr Davis commented on the appointment: “I am greatly looking forward to joining Rolls-Royce. Sir Simon has led the board with distinction during the past eight years. I am extremely excited by the prospect of building on the firm foundations that have been laid”.

Masaharu Hanyu Hitachi Europe Ltd

Hitachi Europe appointed Masaharu Hanyu as deputy chairman and chief executive of the Nuclear Power System Business in Europe. Mr Hanyu currently serves as vice president, executive officer and chief executive officer of Nuclear

Systems. He was also the general manager of Nuclear Systems Division and Global Nuclear Energy Business Division for Hitachi’s Power Systems Company. The appointment will be effective from April 1 this year.

Ian Shelley Roemheld

Roemheld, a Germany-based specialist in delivering work holding solutions, appointed Ian Shelley as area manager for the south and west of the UK. Mr Shelley previously spent 22 years as a fixture designer at Bartling Designs and hopes to use his experience to excel in his new job. He commented: “This role offers an ideal

opportunity to become more involved in liaising with customers and helping them solve their work holding problems. Having used many Roemheld products in my fixture designs over the years, I had first-hand experience of the company’s high standards of quality and service so was delighted to join the team.”

Dr. David Parker UK Space Agency

The UK Space Agency appointed Dr. David Parker as its chief executive. He will be responsible for leading Britain’s efforts to take part in and conduct missions in space. Commenting on his new role, Dr. Parker said: “The last two years

have proved what we can accomplish in space through collaboration and targeted investment. Britain is working together for a remarkable future in space, and at the UK Space Agency, we are leading the way.”

Malcolm Diamond MBE SELEP

Malcolm Diamond MBE joined the Board and Executive Group of the South East Local Enterprise Partnership (SELEP) as an East Sussex business representative. He is currently executive chairman of Trifast plc, whose Sussex-based trading arm, TR Fastenings, manufactures, stocks

and distributes world class fastenings and associated components (p84). The new role holds exciting challenges; primarily to get different manufacturers to work together and determine strategic economic priorities while making investments and delivering activities to drive growth and create local jobs.

BM Catalysts appointed Daniel Burton as the company’s new European regional sales manager. Due to a surge of interest in the company’s aftermarket Cats, DPFs and Front Pipes exports, BM has taken the step to accommodate increased demand. Commenting on his new role, Mr Burton said: “I hope to build on BM Catalysts’ strong foothold in mainland Europe, with particular focus on gaining traction in the emerging markets of Eastern Europe. My new position offers me an excellent opportunity to learn about distribution channels and routes to market in new regions.”

Raymond Mitchell was appointed as chief operating officer of Doncasters Group, the global precision engineering group. The appointment is effective immediately, and Mr Mitchell will be responsible for operations in the multi-national group. Tariq Jesrai, chairman & chief executive officer at Doncasters Group said of the new appointment: “Ray’s past experience and accomplishments in similar businesses and markets as well as his operational acumen make him a valuable addition to our executive team.” Mr Jesrai also commented that Mr Mitchell’s previous experience as vice president of Alcoa and the president of Alcoa Power and Propulsion made him perfect for the role.

To notify The Manufacturer of your company’s appointments, please contact George Archer at: g.archer@sayonemedia.com or: 0207 401 6033

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Annual Manufacturing Report

Annual Manufacturing Report editor Tim Brown finds signals of renewed sector confidence in the 2012 industry research.

nvestment in machinery and new product development are key priorities for UK manufacturers over the next 12 months, with 46% of manufacturers reporting they are ‘quite optimistic’ about the economic prospects for UK manufacturing in 2013. The Annual Manufacturing Report (AMR), produced by The Manufacturer magazine in association with Barclays and eBECS, surveyed over 240 manufacturers in late 2012. The report shows signs of increased confidence in the sector, with a considerable increase in companies seeking to spend more on investment activities. As seen over the past year and continuing into 2013, UK manufacturers are strongly focused on research and development in order to create new products. Over a third (36%) plan to increase spending in this area in 2013, and more than half (62%) of UK manufacturers will spend over £100,000 on machinery and tools this year. Importantly, only 2% of companies reported an intention to spend less on new product development over the coming 12 months, showing manufacturers are looking to couple new product development with investment in new equipment to bring innovation to the marketplace. In the last 12 months almost half of manufacturers increased their expenditure on IT, with 48% reporting an increase over prior year IT spend. This is a significant transformation from 2010, when only 13% of surveyed firms had increased their IT costs over the previous year. But compared to 2010 when only 6% of companies planned to reduce their IT expenditure, we see that 38% of companies are forecasting a cut in IT spend over the next year. Cost is reported as the biggest barrier to IT investment, cited by 53% of respondents, followed by lack of management buyin, at 39%. In many areas of the Annual Manufacturing Report 2012, the responses from manufacturers more closely reflect the pre-recession AMR figures from 2007/08. While the macroeconomic issues continue to have a negative impact on UK manufacturing, the perception of manufacturers is that the situation is improving.

BacktoScuoler

EEF’s chief executive Terry Scuoler sets alarm bells ringing over UK competitiveness in low-carbon technologies.

uch has been made of the UK’s position as the sixth largest producer and provider of low-carbon goods and services in the world. But there are signs that its position is faltering. Manufacturing, which accounts for the largest slice of activity in this sector, contracted in 2010/11 – by one percentage point on the previous year. Meanwhile, China, the States and others are experiencing rapid growth in their lowcarbon industries. Let’s not be negative. There remains a real opportunity for UK plc and UK manufacturers. We are well positioned to prosper in sectors relating to energy technology which could be worth £189.5-£877.5bn by 2050. In EEF’s report, Tech for Growth: delivering green growth through technology we outline the steps we think government must take to realise such potential and unlock investments in breakthrough technologies, helping manufacturers decarbonise. Firstly, we argue that government should set out its economic vision for manufacturing and use this to drive a coherent set of policies. The need for this vision is evident in the vacuum in the government’s Carbon Plan where a strategy for the transition of key industrial sectors ought to be. These “hard-to-treat” sectors are often heavy green house gas emitters - as a result of their processes, rather than their energy consumption and, so far, the question of how to decarbonise them has been ignored. This is untenable. These sectors need to understand what is expected of them to form a clear plan of action: 2050 is just one or two investment cycles away for some. A strong culture in innovation is central to minimising the cost of meeting climate change targets, reducing energy costs, capitalising on the opportunities available through green growth. It is critical in overcoming technical challenges to decarbonisation. But innovation is being undermined by eroded investment in R&D. We need to ensure we are spending enough and that the money is targeted at the right place in the innovation cycle. This must be underpinned by a clear push on skills. Manufacturing is on the brink of a skills crisis. Many are experiencing real difficulties in recruiting skilled workers - without whom we won’t be able to innovate. To encourage investment and attract skills we need to ensure that finance for green technology and R&D works. Manufacturers have implemented technologies that deliver paybacks within the normal investment horizon – now we must unlock the next tranche of technologies with payback periods beyond this. Our report sets out some initial solutions: a better Capital Allowance system and a more responsive Green Investment Bank. Get this right and we anchor green industry, with a strong export market, in the UK. Failure to respond could see us lose some manufacturing sectors entirely and miss out on a tremendous opportunity for green growth.

This version of Back to Scuoler is abridged. For the full version go to:

Monthly columns

Thenaked engineer: stripping industry issues bare

ET, phone home Hemlock Engineering welcomes the introduction of fees for employment tribunals

p at the crack of a sparrows fart this morning – roughly 9.15 – and straight to the gym. Everyone, including Sir Patrick (Hemlock Engineering’s chairman), is big into High Intensity Training at the moment – cuts down the time you need to exercise apparently so more time to spend in the bar exercising the right arm and discussing racing tips. Count me in! Got into HQ full of the joys of spring, only to be shot off my perch by an announcement from Janice (HR director) about Sir Patrick’s latest initiative. “He wants to put every new employee on zero hour contracts to cut down on employment tribunal claims. He wants to go through it all with you now.” I winced. Sir P’s had a bee in his bonnet about this since we used the same trick last year to ditch our agency workers and the increasingly tiresome regs they bring along with them these days. I was dreading the meeting on it as I knew I’d be required to sit looking at the small print on the new contracts and discussing the finer points of ‘mutuality of obligation’ long after opening time down at Cavendish’s. Not a prospect that would sit well with me at the best of times but I was still feeling the need for more than my average dose of daily fortification following last week’s workforce engagement fiasco. The half-term bring your sprog to work day had left some harrowing marks after I failed to convince the fiercer half that I could leave the Junior Terrorists at home with her. The whole experience had led to an uncomfortable conversation with our head of compliance & corporate affairs. A great shame since it made her a lot less compliant or affair-orientated than I’d been hoping for.

Brought back to earth by Janice lobbing figures at me - a role she’s taken on in the absence of Jimmy the Greek who’s waltzed off to quaf Lambrusco in Lanzarote or somewhere foreign. “We finished the year with twelve ET’s. We won every one of them but it still cost us over £90 grand in legals and costs,” announced Janice just as Dominic, our S&M director (well named by all accounts), wandered in with a plate of oozing Danish pastries – my favourite slimming ones. “That’s more than your expense account. Bloody disgraceful!” spluttered Dominic, jabbing a pastry pointedly in my direction. I ignored him – best thing to do with S&M directors I find.

We used the same trick last year to ditch our agency workers and the increasingly tiresome regs they bring along with them these days

“Trouble is there’s just no disincentive for anyone getting the boot not to go to an ET,” I moaned. “A couple of trumped up allegations – absurd to make in a top notch work environment like Hemlock’s – and there’s a few grand in the bank. It’s a licence to print money and we never get any bloody costs back. Sir Patrick’ll be livid.” “But that’ll all change if they bring in fees this year,” said Janice cheerfully. “Huh? Whaddya mean,” I mumbled, simultaneously splattering Dominic liberally with partly chewed pastry. “Yup, the coalition is actually threatening to do something half-arsed sensible for a change and bring in fees for ET applicants,” reported Janice, wiping a well-aimed piece of Danish from her blouse. Dominic snorted cynically. “The tossers’ve been talking about it for years and done nothing – time to shit or get off the pot if you ask me.” “It’s looking a dead cert for this summer actually,” Janice pouted. “Maybe you should start reading some of those HR memos.” “A good idea from the coalition? And so soon after they told the EU to shove their budget where the sun don’t shine!” I skipped off, sticky-fingered, to meet Sir Patrick. Any similarity of characters to persons living or dead is completely intentional.

Have your say at www.themanufacturer.com

Production lines 2 new messages

Letters to the editor

Richard Green, CEO, The Design and Technology Association

he draft programme of study for Design and Technology (D&T), published by the Department for Education on Thursday February 7, threatens the future supply of vital skills to a wide range of manufacturing sectors and will exacerbate wellpublicised skills gaps facing these industries. The draft curriculum lacks academic or technical rigour, challenge or ambition. It will fail to inspire or equip talented young people to pursue careers in design, technology, manufacturing, engineering, fashion or the many other thriving sectors. D&T offers a unique environment in which to engage students of all abilities in practical and applied maths, science and engineering, helping to raise their academic attainment. Unfortunately this draft curriculum with its focus on basic craft and maintenance skills will do nothing to engage students or raise their attainment. D&T provides an essential foundation for further or higher level study and a wide range of vocational qualifications and apprenticeships. It is an enabling subject, which expands and enhances other core subjects - it should be challenging. Yet the draft

D&T curriculum is neither rigorous nor challenging. It undermines D&T as a route into further and higher education for talented students by failing to provide the skills they need. It will result in the under-selling of design, engineering, manufacturing and technology as career choices. Fortunately this misguided draft Design and Technology curriculum is not a foregone conclusion. It is open for consultation until April 16. We urge all readers to write to their local MPs expressing their concern over this draft curriculum. We would also encourage them to join the debate on our forum at http://www.believeindandt.org.uk/ and contact the Department for Education directly by writing to: Elizabeth Truss, MP, Parliamentary Under Secretary of State for Education, Department for Education, Sanctuary Buildings, Great Smith Street, London, SW1P 3BT. You can find a copy of the draft Design and Technology programme of study on the Department for Education website: http://www.education.gov.uk/.

Aneela Rose, managing director of Aneela Rose PR

any manufacturing companies are not taking full advantage of the marketing and PR opportunities available to them during the difficult economic conditions that continue to impact the industry on a daily basis. Marketing and manufacturing can co-exist contrary to what many in the industry believe. Although reports this quarter suggest UK manufacturing output has increased, it’s vital that companies increase their efforts in highlighting competitive advantage to secure new business and implement a joined-up approach to marketing, public relations and sales. It’s frustrating that, after working in the industry for 17 years, it’s still common for me to see sales activity budgeted for and prioritised at board level, and more often

than not discussed in isolation from PR and marketing. The latter could yield a far higher return and deliver measurable results that complement sales initiatives. Meeting target audiences head-on across all the available communication routes will open more doors! Companies need to understand that the evolving nature of manufacturing means seizing opportunities now that will help growth. Combining traditional with modern marketing routes is a clever move as, united, they are a stronger force capable of delivering engagement and driving sales. For example: using digital and social media platforms, such as online industry forums; LinkedIn; and Twitter, in addition to traditional print articles and advertising. Raising awareness will not only secure business now, but will put manufacturers in a stronger position when the economy finally turns around.

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

Monthly columns

Leanonme

Roberto Priolo, editor of ’s sister publication Lean Management Journal, on international lean deployments and not forgetting the fundamentals of lean’s core tool set.

n a recent interview with LMJ Mauro Pino, head of world class manufacturing at Chrysler Group (p46), made an interesting distinction between understanding the importance of communicating lean methodology and the way the methodology is communicated. The truth of his observation is made starkly clear when national cultural differences come into play in lean implementations. While the problems people encounter in deploying lean techniques and establishing lean behaviours may be similar the world over, the way in which tools and approaches are communicated can vary widely – sometimes simply due to available vocabulary – let alone national attitudes. Fiat’s World Class Manufacturing model provides a framework for improvement that is successfully applied in 170 plants around the world. The WCM Association comprises organisations including Unilever, Iveco, CNH , Chrysler and Royal Mail. The interview with Mr Pino is a huge bonus to the March issue of LMJ which focuses on how to deploy and measure the success of lean across international boundaries with consistency. Another company featured in the March edition, logistics specialist Panalpina, tells how each geographical area of the business contributes to the achievement of global goals and to the refinement of ideas, sometimes created elsewhere. This is how a KPI board, travelling from the United States to China and then to the Netherlands, became a KPI communications cube – an enhanced solution that better responded to the overall company needs. As ever, the core challenge in international lean success is involving people. If you get it right this can create a flexible, powerful lean enterprise. Leadership is essential and the March issue of LMJ demonstrates this with a great example from Coskunoz, a Turkish automotive supplier, which revolutionised its entire front-line leadership structure to allow for increased employee motivation. And although getting culture change and reforming traditional business structures is painful,

results can multiply once the ball gets rolling. LMJ saw this in the story of Tuscany’s healthcare system. After a hospital in Florence successfully applied lean techniques, the regional government decided that was something worth exploring throughout the region. Two years later, 12 out 16 Trusts operating in Tuscany have launched an improvement programme. I am not sure how familiar you are with Italian stubbornness, but as an Italian national let me tell you that what the Tuscans did to transform one of the most static and wasteful public structures in Italy is quite extraordinary. Yes, it’s all about culture. But what about the tools? Every lean practitioner and expert will warn you against the risk of seeing lean simply as a bunch of tools that you can use to magically make your company more profitable – an error still made by a large proportion of those who see themselves to be ‘doing lean’. But the fact is that the methodology would not exist without its valuable tool set. The tools need to be used with sensitivity to context and for the right purpose. But they must be technically understood! Can you imagine how wasteful it would be to draw a value stream map or fill in a balanced scorecard in the wrong way?! We need to know how to use the tools as well as appreciating why. To get back to basics and make sure we are not making simple errors in the use of tools

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LEAN WITHOU BORDERST

Investigating how global firms can deploy lean consistently across cultu res

Organisati ons Chrysler Grou featured in this editio n include: Flinders Med p, City of Melbourne, Panalpina ical Centre, , Coşkunöz, Tuscany’s Coopers Brew hosp SCGM, Vista ery, Dassault ital trusts, print, GKN Systèmes, IN THIS ISSUE World class, : the world over: How apply Fiat’s did Chrysler world class successfully manufactur techniques ing princ acros WCM, speak s North America? Maur iples and s with LMJ o Pino, Head of Glocalisin g lean: Logis tics specialist developed an Panalpina has lean progr effective way to roll amm out countries worlde across 500 branc its LogEx hes in 80 wide Lean down under: For LMJ travel this month’s speci country’s leane s to Australia and speaks to some al, st organisatio to the muni of ns, from a cipality of pioneering the Melbourne hospital Changing the paradigm: European Lean could coun Sofiane Bouc tries to repatriate theirhelp France and other heikh of the service indus Institut Lean try, says Success down France. front-line leadethe line: The devel opment of rship is the a thriving Coşkunöz’s cornerstone lean progr amme. Nilay of Turkish company Çetiner expla ins why.

which will influence the success of lean in our organisations, the April edition of LMJ will let the ‘tool-heads’ loose. Among others, we’ll hear from Professor John Bicheno, author of The Lean Toolbox and Alice Lee, vice president of business transformation at Beth Israeli Deaconess Medical Centre in Boston, who will explain the hospital’s use of visual management. We will also travel to India for our It’s a lean world special and get an exclusive insight into product development at Harley Davidson. Finally, I would like to remind you that the LMJ Annual Conference will take place in Birmingham on May 21-22. It will be a tremendous opportunity for companies of all sectors and sizes to hear from some of the world’s most enthusiastic lean thinkers and get invaluable insight into what it takes to become a true lean enterprise. Purchase a one-year subscription to Lean Management Journal (£295; 10 issues) and you will receive an exclusive Priority Pass Card to access airport lounges around the world. Scan the QR code for more details:

For more information about LMJ, please contact the editor, Roberto Priolo, at r.priolo@sayonemedia.com

On the road again

AND ABOUT

’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 last month.

Bitter sweet Observations on EU market mismanagement and the fate of Tate & Lyle Sugars.

nce upon a time, the east end of London was a hive of manufacturing activity, with ships flooding the Thames to bring in commodities and export goods. Deindustrialisation decimated the area, leaving Tate & Lyle Sugars as one of the last remaining stalwarts of London’s industrial past. But will it last much longer? In Silvertown, just outside the Thames Tidal Barrier, one of the world’s most efficient refineries is taking a last stand against EU rules that restrict where it can import raw sugar from. “Since the UK joined the EU, our refinery in Plaistow closed – although we are still there making syrup. This was swiftly followed by our site in Liverpool,” said Tony Bennett, government affairs manager at Tate & Lyle Sugars. “That has all been caused by the EU. It has closed

Convergence, innovation for all and Babel fish Jane Gray; still feeling bowled over by Nimbus Ninety’s Feb technology and market trends event.

access to raw sugar by placing restrictions on where we can buy sugar from.” Tate and Lyle Sugars is treading new legal ground by suing the European Commission €198m for mismanaging the sugar market. Its historic London refinery could go out of business within the next five years unless it wins the case or the EU alters its food policies.

ith the slightly eerie sounds of London’s Science Museum by night in the background – the interactive display voiceovers keep going when there’s no one there you know! – delegates gathered on Feb 13 for the launch of a new report Market Trends 2013. The publication, from technology community group Nimbus Ninety, focuses on convergence in multiple

The money made from Henry Tate’s industrial empire helped to build one of the world’s most famous art galleries, the Tate Modern – a better use for a great industrial building than dereliction. But how many factory-sized art galleries does London need? Unless the EU makes some changes soon, the Silvertown site will be lucky to become a similar relic. @themanufacturer

technologies and finds that, on average, businesses now use 5.8 different technologies to achieve any one strategic goal. It sounds like a headache for anyone trying to prioritise IT investment, but happily we are also told that thinking about IT as a capital expenditure is waning. ‘Democratisiation’ of technology and considering IT spend as user empowerment is on the up as more companies realise the power of the ‘big

Out and about

Innovation in the carbon killchain

he conference drew a powerful crowd. All the speeches focused on CO2 saving innovations, a good thing considering that Lord Drayson, managing partner of Drayson Racing Technologies, labeled car pollution the “invisible killer in our cities.” “It is not a question of if, but when cities ban high-polluting cars,” he added. Lord Drayson

stated that it is only a matter of time before only electric cars are allowed to drive in urban areas as harmful exhaust particulate can never be eliminated. The audience fought back with a vengeance, accusing Lord Drayson of not knowing his facts and using a single outdated source for his claim. Mobile phones came out when Lord Drayson mentioned London Air, an app created by King’s College in London that visualises pollution levels. The red lines replicate London’s road network. Coincidence? Lord Drayson thinks not. The former petrolhead turned political activist and advocate of the electric car believes that if sales don’t take off for battery powered cars, then legislation will subvert consumer choice. Turning a narrowed eye on Government, Jerry Hardcastle, technical director at Nissan, said that most business support is too small-scale to benefit car manufacturers. “The Patent

Box wouldn’t make much difference,” he stated, while Professor David Hughes from the Business Innovation Group commented that he “couldn’t see how the Patent Box would boost innovation in automotive R&D.” Many manufacturers wore a worried expression when Mark Walker, general manager at vehicle hire company ZipCar, said that young people don’t want to buy cars any more. As the only audience member that fell into his ‘millenials’ category, I found out that none of my friends agreed with this sentiment at my local pub. For the record, no one was driving that night. Furthermore, the gleeful look on a certain bearded journalist’s face after cheekily blagging a ride around the block in the £195,000 McLaren MP4-12C which sat outside the event, suggested that car ownership as an aspiration is far from dead. There are perks to the job! @thomasmoore88

four’: cloud, big data, mobile and social. All these converging and interconnected technologies can be picked up intuitively, require little or no physical infrastructure and roll out “quicker than some organisations are ready for” according to one panellist at the report launch event. The launch of Market Trends 2013 was surrounded with presentations from speakers who put a buzz of enthusiasm into the cross sector audience of IT professionals. I wonder if everyone made it home still believing that anything was possible for them and their company in today’s world – or that it soon will be. It’s a belief which David Rowan, editor of Wired magazine and chair for the evening, says lies at the centre of the enviable success of Silicon Valley-

based organisations. “They maintain a healthy disregard for the impossible,” he said before blasting his audience with a reel of incredible recent technology achievements – not just from Silicon Valley’s cradle of innovation, but from companies large and small the world over. Some of these mind-blowing bits of science-fact manifest in inspiring products, innovated and leveraged through the use of collaborative tools and crowd funding. Others were outstandingly intelligent business models – often managed by teenage mini-magnates – which exploit social media and mobile payments to turn a quick profit and keep an agile market strategy. These models are forcing large firms to rethink their routes to market says Rowan. In fact, observing the explosion in mobile payments over PayPal for all sorts of products and services in the last few years, Rowan

says, “If you have a business and you are not making mobile a priority, go home.” A personal favourite though – to an avid fan of Hitchhikers Guide who spent her schoolday French lessons wishing hard that someone would get on with inventing the Babel fish – was the recent revelation of Google’s updated real time voice translation technology. The new ‘conversation mode’ picks up inflections in a human voice and can immediately translate and broadcast into 15 different languages. It’s not faultless, but it’s pretty good. Imagine the time and expense it could take out of international business – no longer the need to be slowed down by intermediaries and pay for interpreters. It could be a door-opener for aspiring exporters, particularly in emerging markets where English is not the de facto language of commerce. @janefagray

Tom Moore reflects on debate at Innovation in Automotive, a Royal Academy of Engineering event.

Have your say at www.themanufacturer.com

The Prime Minister at Farnborough International Air Show last year where he stated that the Aerospace Growth Partnership, convened by trade body ADS, would be a model for future government engagement with all sectors

Body Language “I n general sectoral representation in the UK is fragmented, duplicative and often poorly resourced.” This was Lord Heseltine’s observation of the UK landscape of trade associations in his recent review Leave No Stone Unturned in the Pursuit of Growth. The report, published in October last year, was commissioned by government and has become a key reference point in policy making for the coalition. It also holds a great deal of advice on and observation about the role of industry support networks for the private sector in achieving a robust, balanced economy. Referring to a 1972 report from Lord Devlin, Lord Heseltine’s report highlights the importance of establishing “world class support systems” for a competitive, progressive private sector. Trade bodies, and the chambers of commerce, are named as existing systems that should step up to this world class status. However, as the opening quote indicates, while the UK’s network of trade bodies has proliferated since the 1970s, the extent to which more industry representation reflects high quality, coherent representation is questionable.

Jane Gray asks whether the crowded manufacturing trade body space could be consolidated for a clearer voice to government and better value for fee paying members.

In a time of austerity businesses cannot afford to pay for duplicative or poorly resourced services. Trade bodies – large or small – must be more than talking shops.

to us for access to advice on health and safety, for example.”

Trade association responses

‘Gentlemen’s club’ trade associations do still exist. But they are a dying breed, shown up by dwindling memberships

Terry Scuoler, CEO of manufacturing trade association EEF, considers Lord Heseltine’s criticism of trade bodies. “I do think the marketplace is littered,” he says. “But it is a free marketplace and people will join the organisations they feel are most suitable. For large organisations like EEF there will be a wide range of motivations behind membership. Large companies tend to be more interested in our ability to influence policy, smaller companies may be drawn

Graeme Philp, CEO, Gambica

The Trade Association Forum estimates that there are

3,500 UK Trade Associations representing UK businesses across sectors.

Leadstory Trade Association Value

Case for consolidation: ADS Members said they were fed up with having to communicate their business needs across several different organisations

The ADS annual dinner in January 2013 drew in an engaged membership crowd

Graham Chisnall, Deputy CEO and MD, ADS

Graham Chisnall, deputy CEO, ADS

n his review, Heseltine identified ADS – formed in 2009 from a merger of the Association of Police and Public Security Suppliers, the Defence Manufacturers Association and the Society of British Aerospace Companies (SBAC) – as leading the way in consolidating industry representation. What prompted the merger? Graham Chisnall, deputy CEO and MD of ADS, explains: “The big drive behind the merger was the fact that many members of the

Paul Everitt, CEO, ADS

associations involved had both defence and civil operations. They were fed up with having to communicate their business needs across several different organisations.” Government also said that it was finding it difficult to talk to a fragmented representation of UK defence companies, Chisnall adds. Recently appointed CEO Paul Everitt says ADS undoubtedly has more clout as a consolidated entity. “Consolidation brought a resource base which can sustain industrial partnerships in a way that the individual merger bodies

could not have done. In addition, government can have more confidence that our advice to them is truly in the broad interests of the sectors we represent because our membership base is more comprehensive.” Proof of this has been the success of the Aerospace Growth Partnership (AGP), points out Chisnall. “This has brought the whole spectrum of industrial stakeholders together on a common platform of engagement with government. Over 80 senior executives from industry have given their time to the AGP and [prime minister] David Cameron, when he opened Farnborough Air Show last year, said that he will use its process as a model for engagement with other sectors.” So could more be done to stop manufacturers having to maintain multiple memberships and add value to industrygovernment relations? “I am not an expert on the trade body landscape but I can see why Heseltine made his observation,” admits Chisnall. “ADS now represents a natural span of companies. But members still subscribe to other trade associations. Intellect, for example, has defence interests and a number of our members are also theirs. I don’t think this necessarily indicates there is room for more mergers. We cooperate with Intellect, and others, where it makes sense.”

Lead Story Trade Association Value

Different values

ot all trade associations are driven by the need to speak to government. The more technically focused have other priorities. “Heseltine focused on trade body responsibilities to represent member interests to government. But providing technical information and advice is also

In his growth review, Heseltine advocates the formation of “lead associations” which can act as an umbrella over a range of niche interest groups. “With some justification, EEF could claim to be in this umbrella position,” says Mr Scuoler, explaining that an awareness of its responsibility to capture a complete voice of manufacturing and convey this to government was behind the launch of its affiliate membership option for other trade bodies in September 2012. “The affiliate membership programme has been well received,” he says. “Around 10 organisations have joined so far. It was an important step to take at a time when government officials acknowledged they want to speak to fewer bodies, making it hard for smaller organisations to get their messages across.” Graeme Philp, CEO of Gambica, the trade body for automation technologies, is among EEF’s new affiliate members. “So far the relationship

central to MTA’s purpose,” says Paul O’Donnell, head of external affairs at the Manufacturing Technologies Association. Sarah McCann-Bartlett of the British Constructional Steel Association (BCSA), with about 150 members, is similarly keen to express the value of trade bodies as drivers of sector competitiveness rather than as political entities. Indeed BCSA is so committed to this that it demands rigorous membership requirements, regularly updated, to attain relevant industry standards. “Every member must undertake an on-site technical assessment every three years as well as annual financial assessments,” says Ms McCann-Bartlett. “Companies must prove capability and capacity to undertake certain jobs before they can become

members and be listed on our two registers, – the Register of Quality Steelwork Contractors and the Buildings Register.” BCSA does not make these requirements from a regulatory stand point, but to raise competiveness and help companies win contracts. “We are pushing to make it a condition that constructional steel work for any government funded infrastructure project should be procured using one of our quality schemes,” says McCann-Bartlett. “We have already aligned our membership requirements with the current government procurement standard, TAS 91, so all BCSA members are compliant with that.” The next big drive will be to ensure all members become CE compliant by 2014 to fall in line with new EU legislation. “This level of rigour is an extremely effective way of driving improvement, quality and competitiveness in an industry,” she says. “More trade associations could benefit their members by requiring more of them.” Other trade bodies referenced in this article did not feel such an approach would be suitable for their memberships.

Professional bodies

rofessional bodies are distinct from trade associations in that they are focused on advancing knowledge about a certain discipline and providing professional accreditation, rather than representing commercial and employer-specific interests or lobbying government. But nonetheless, they are another group of membership organisations with a remit to represent the interests of their membership base – and there are 36 such engineering bodies in the UK. On the potential for

consolidating the array of professional engineering bodies, Stephen Tetlow MBE, director general of the Institution of Mechanical Engineers, says: “Technology never stands still and professional bodies need to move with it. Therefore, I would not be surprised if some bodies merge in the future but equally, as new technologies develop, we may see new bodies established.” It is important that professional bodies work together to track and respond to cross-discipline developments, says Mr Tetlow. The IMechE and the Institution of Engineering and Technology signed an MOU to tighten their relationship in January and Tetlow insists collaboration on interdisciplinary projects by professional engineering bodies is generally strong. “There is a broad professional panel and a range of jointly hosted learned society events.” One focus for collaborative work is E4E – Education for Engineering. “This brings together a combined view for government of what our members need from the education system,” explains Tetlow. But collaborative or not, industry seems to value IMechE’s services and representation. In 2012 the institute signed up more professional engineers than any other UK engineering institution and an increase of 25% on 2011.

Lead Story Trade Association Value

RDM GROUP Automotive and healthcare

t is difficult for David Keene to define exactly how many trade associations RDM might admit membership to. The MD of the SME manufacturing group does not define trade associations distinctive from a general “sea of initiatives and organisations” offering to help his business in one way or another. He says most SME leaders probably take the same view. “It doesn’t matter to me whether they are technically a trade association or some other form of lobbying group or alliance. The extent to which I value them depends on whether they help me win business.” For this reason, Mr Keene is hugely positive about the Niche Vehicle Network and a range of local manufacturing alliances, which cluster SMEs around contract or funding bids that might otherwise be out of scope, and supports trade show attendance. “There’s no question of cost versus value in being a member of groups like this,” says Keene. “They are free to join and you’ll get the value of the time and effort you put in, multiplied by the input of other members.” Keene adds, “A lot is offered at the large trade associations is wide of the mark when it comes to SME value. Their membership offers a reputation. But what I need is local, practical groups.” But what about the business advice that Norman Hay’s Salisbury thought smaller firms must need? “For around £120 a year I am a member of the local Chamber of Commerce and that gives me all the updates I need on regulation, tax and HR developments,” states Keene. And what about the opportunity to discuss the big issues facing your sector? “Concerns and expectations get fed down the supply chain. But the way in which this is done has markedly improved in recent years. This is probably linked to the work OEMs and tier ones have done with bodies like SMMT and the Automotive Council, so I can see the value in bigger firms being members of the larger bodies.”

What manufacturers say Norman Hay Chemicals and coatings

orman Hay, through its divisional companies, is a member of various trade associations including SMMT, FESA and Midlands Aerospace Alliance. Membership decisions are largely made by division heads dependent on the value they see in relevant associations. The SMMT membership, costs the company around £1k per annum – the fee relevant to its turnover and employment base of 450 people. Jeremy Salisbury, group head of marketing at Norman Hay comments, “There are good and bad bodies out there and on resource, I would say that some associations seem stretched. But what Lord Heseltine neglects in his review is that trade association relationships need a two way street to create real value. You get out what you put in as a member.” In terms of what membership value should look like Mr Salisbury defines two types of trade association, industry focused and technically focused. The former is generally of greater value to Norman Hay, he asserts. “For Norman Hay the key motivation in being a member of a trade association like SMMT is to network, learn how the industry fits together and, ultimately, to win business through this. This makes its work on bringing the UK automotive supply chain together very important.” In terms of value derived from trade body service, Salisbury says, while access to market research, business briefings and events can be valuable, other services are less motivating for Norman Hay. “For a smaller company I can see that access to this kind of advice and support might be helpful. For the ‘M’s in SME and for larger companies there is less benefit because they will usually have access to their own legal advisers and quality audit processes.”

Siemens Industry UK Electronics

iemens is a member of around 10 UK trade associations. Brian Holliday, director of industrial automation, Siemens UK says that he is in no doubt of the real value they all bring to the business, whether in niche pockets or across broad issues. “Trade associations allow firms to work together and make the case for growth,” he observes. That said, Mr Holliday does see that the associations could be better coordinated, “to develop a more consistent message to government about what needs to be done to get the British economy moving. We have seen steps in the right direction, for example Gambica is now working together with BARA [British Robotics and Automation Association] to achieve a common goal - the promotion of automation technology and investment across our sector. They have built a powerful case that is being heard by key stakeholders.”

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Lead Story Trade Association Value

Manufacturing Alliance Members ADS British Plastic Federation British Printing Industries Federation Chemical Industries Association Construction Equipment Association Construction Products Association EEF Food and Drink Federation Intellect Manufacturing Technologies Association SMMT Is your trade association on this list? Could it bring you more value if it were?

What do membership figures say about the value of trade associations and professional bodies? Organisation

2010 Membership

2011 Membership

2012 Membership

EEF

5,000*

ADS

896

944

951

SMMT

500

520

555

MTA

260*

Gambica

182

194

199

IMechE (international membership)

97,000*

100,000*

106,000

IET (international membership)

152,929

152,916

153,834

*Approximate membership figures “Smaller trade bodies must work hard now to show the value of their insight beyond the general voices of EEF and the CBI.”

Collaboration

Members must judge for themselves how to use these opportunities intelligently. Don’t simply join for an easy debate over coffee Terrey Scuoler, CEO of EEF

is working really well,” he says. “Our members get access to a limited number of the EEF’s publications and Gambica is consulted and has an input into the formulation of representational positions where the issue will affect both Gambica’s sector and a wider swathe of UK industry. Gambica had sought the opportunity of affiliate membership for some time. “Teams of civil servants have been pruned back and can only afford to spend time with bodies that are going to make a difference,” Mr Philp says.

EEF’s affiliate membership model is a positive step in maintaining the ability of smaller bodies to bend the ear of government when they need to – as well as pumping up the value that smaller bodies with fewer resources can offer their members. But what about collaboration between the more established sector and technology bodies who still have strong individual voices in government? What is being done to ensure they are not working at cross purposes? Paul O’Donnell, director of external affairs at the Manufacturing Technologies Association, says “I don’t think Heseltine’s comment is fair when it comes to the manufacturing space. The sector’s trade bodies have already consolidated, or are in the process of consolidating, their voice to government,” he comments. “The MTA, along with ten other associations, is a member of the Manufacturing Alliance. We meet regularly to discuss matters of shared interest and we submit a joint proposal to government ahead of the Budget and other key

policy announcements.” But is collaboration enough? EEF’s Scuoler admits that other business representation systems have benefitted from more transformational action. “If you look at the trade unions you can see that consolidation there has made a few key bodies considerably more potent,” he observes. Is EEF on the acquisition path? “I do not want to appear predatory,” Scuoler emphasises. “Our affiliate programme is strictly limited to affiliate activities and collaboration. But who knows, in the future, closer relationships may be formed.”

You make your own value Beyond mergers, a more important and urgent angle to work on to ensure that trade bodies create value, says Scuoler, is raising employer appreciation of the relevance and value of being a member. “As well as the opportunity to shape the future of industry, trade association membership should offer access to a lot of useful information on current industry topics. And don’t forget the chance to meet with customers and suppliers. Members must judge for themselves how to use these opportunities intelligently. Don’t simply join for an easy debate over coffee.” @janefagray

Ea pay A bef ll del rly B ore e Frid gates ird a F ay 8 th who r Offe R egi Ter EE K Marc ste r ms r and indle h 20 13 and con e wil diti -rea ons l re d app er. cei ly. ve

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gear You may not have heard of it but Thatcham-based Xtrac is the world’s biggest designer and manufacturer of motorsport transmissions, supplying all the main formula classes. Energetic devotee of motor racing and engineering Peter Digby is at the wheel. Interview by Will Stirling.

Peter Digby left school at 16 to become a British Airways apprentice

Apprentice training Xtrac takes three to four apprentices a year (100 applicants in 2012), and three to four graduates a year. The apprenticeship is four years long. “I have heard people say several times that we are the Rolls-Royce of motorsport for training,” Digby says. “This is especially relevant when designing for low cost – anyone can design a gearbox with cost no objection.” “We provide good training but then it is in at the deep end. They go to race circuits, they deal with customers, they can get secondment to our US operation where they work allnighters for demanding customers. They work hard – they are not making the tea.” Today, every F1 team has an Xtrac trained engineer working for it. “That’s a lot of guys who have been stolen, but you have to take a wider view on it,” laughs Digby, who has given a lot back to the industry. “It’s a young man’s game, travelling the world. But once they settle down with families, then Xtrac is the next best thing because you’re in the industry but most of your weekends are your own.”

hen Dario Franchitti stepped out of his Target Honda/Dallara at the Indianapolis Motor Speedway on Sunday May 27, 2012, he wasn’t the only Brit on the winning team. But success at the Indy500 for Xtrac last year was a given. Since 2003 the world’s largest designer and manufacturer of motor racing transmissions has produced all the gearboxes for the IndyCar race series. “We go to motorsport organisers and offer the cheapest solution for the end user,” says Xtrac CEO and veteran motorsport supplier Peter Digby. “I stress that because in some cases we are not the cheapest gearbox supplier, but we’ll work out where components need improvement so they last much longer. We have proved time and again we can be the cheapest in the long run.” Xtrac is a market-leader and supplies transmissions to Formula 1™, IndyCar, Le Mans, the Baja Rally, Touring Car, Rallying, and other formula. But, while motorsport dominates, the company has also diversified into marine and aerospace, and is making big strides in mainstream automotive with technologies such as hybrid electric gearboxes. This 275-employee company’s secret at first sounds no different to the challenge faced by many engineers: to design and manufacture lightweight, precision engineered components with all the clients’ specifications but at the lowest total cost.

I have heard people say several times that we are the Rolls-Royce of motorsport for training

Interview Peter Digby, CEO, Xtrac

Motorsport demands, however, get fanatically tighter. “We have to be the first to make our products obsolete because if we don’t our customers will,” Mr Digby says. Fast talking, ebullient, focused, Peter Digby was destined to be a petrol head. At 16, having already owned two cars and a motorbike, he got bored of grammar school and became a British Airways apprentice. Finishing there, he wrote to every F1™ team for a job. He joined Frank Williams’ team, learned a lot about F1 and in 1986 found himself at Xtrac, then a two year-old business. Peter Digby clearly loves what he does and the industry he works in, devoting 27-years to his company and four years as president of the Motorsport Industry Association in the 2000s.

challenge. We can produce up to about 1,500 units [of each design] per year. Beyond that other people can probably do it more viably,” says Mr Digby. Although it has the IndyCar monopoly, the Le Mans 24hour race is now Xtrac’s biggest market. “It is very demanding. Le Mans today is a Formula One standard car, driven incredibly hard and fast, that has to last 24-hours,” says Digby. Xtrac supplies 36 cars of the 55 starters with gearboxes. “It is effectively a whole Formula 1 season in a single day.” Demand here for the lightest, most reliable gearbox has fallen into Xtrac’s sweet spot and it has supplied transmissions to the winning car nearly every year for the last 10-years.

The sweet spot

Accessing mainstream automotive

Xtrac specialises in proving the prototype, the zone between concept and mass market. From a one-off design, through a series of batches, Xtrac qualifies designs for the next production scale. A typical project was a recent marine propulsion unit. “This clever guy came to us with a new drive system he’d patented that couldn’t be made. We said hold your patents in place; we designed it, we made six off, tested it and he liked it.” Xtrac made another 20, then 40 then 100. Meanwhile the client was speaking to a mainstream supplier to go to mass market. “Xtrac is very good at very short lead times, very high specification, where the packaging is more of a

With the help of the Motorsport Industries Association, Xtrac has been able to tap new markets. The biggest difference has been made by the Motorsport to Automotive programme. Xtrac has developed a new 1010 hybrid electric automated manual transmission for this. “Road cars nowadays need lightweight, very compact, very efficient transmissions,” says Digby. “That’s exactly what our motorsport customers want. “We have taken the specification and packed some nice electric motors to run on hybrid transmissions and done it very quickly. Time to market is very important now, especially with hybrid and electric.”

Xtrac is 49% employee owned following a MBO in 1997

Employee ownership pays off

trac was founded in 1984 by Mike Endean, Peter joined in 1986 and they built the business up to about 150-employees by 1997. Endean worked very hard and, for his health, needed to back off. Digby’s succession plan, inspired by Sir Peter Thompson’s book about buying the National Freight Corporation [Lynx] from the government, was 49% employee ownership. In 1997, Digby and the employees bought the company from Endean with Endean’s backing. “He said if you make some profit, pay me, if you don’t, don’t worry. Don’t give yourselves silly pay rises. It was brilliant.” Soon after the buy-out, Xtrac needed a massive capital investment including new premises to take on IndyCar, so Montagu Private Equity (then HSBC) took a 25% stake in the company. After 12-months, employees are given shares and each year thereafter. The trust will pay a bonus when it can afford to do so and until recently the company paid all medical and dental insurance for employees. There is an internal share trading platform. “It has been a fantastic motivator,” Digby says. “I remember saying to a guy on the shop floor six months ago that we need a new machine here. He said: ‘If it was my money, I would…’ I stopped him there, and said it is your money – tell me how I should spend it.” Spending disputes are mitigated by “a fantastic management team” who liaise between the staff and the trustees. There seem to be few of them. Xtrac has invested £5.5 million in the last two years, and £2m-£2.5m per year is average. Despite the recession, in September 2012 Xtrac recorded the best turnover in its history. The post-recession years knocked 15% off turnover. “But the recession drove us to get costs out of the business. You may think of yourself as efficient and wonderful, but over time slack builds in. At the end of 2008, I put a big sign up on the board saying ‘SURVIVAL MODE’. Everyone bought into it and we saved £1 million of costs very quickly.”

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Interview Peter Digby, CEO, Xtrac

The Xtrac build shop. The perfect environment for ‘proving the prototype’

Biography Peter Digby, Xtrac Pre-1978:

Grammar school

1976-1979:

Apprentice for British Airways

1980:

Joins Frank Williams’ Formula One team

1985-1986:

Assistant Managing Director Haas Formula One Team

1986:

Joins Xtrac

1991:

Becomes Managing Director, Xtrac

1997:

Leads MBO where ownership is converted into employee ownership structure

2002:

Established Xtrac Inc based in Indianapolis

2005-2008:

Chairman of the Motorsport Industry Association (4 year tenure)

Peter is also an associate member of the British Racing Drivers Club and a vice president of Chelsea Football Club.

The challenge is to be ahead of what people want. And cost is becoming far more of an issue today. People want it to be the lightest, strongest, greenest – they want all those things, but cheaper

When, for example, Ford is putting out a new Fiesta, the transmission will get rubber stamped fast, he says. It is a very big ask to get buy-in from an OEM’s board for a hybrid electric gearbox. But Xtrac is up to 400 units for some of these now. “In automotive industry terms, these are ultra low production runs but [this role] fits into our business model when we’re supplying race teams,” Digby says. “Our challenge at the moment is to bridge that gap between mainly small volume and larger volume production. So we’re trying to partner up with a volume manufacturer. When we make those 20-off we do them on specified tooling and machinery so that when the customer has run 20-30 prototypes, and wants to ramp up production, he is not starting from scratch again. The NVH noise regs and the basic principles for higher volumes are all passed.” Being responsive and accurate is the key. Every year, F1 teams will have a new gearbox design, because there will be new exhausts, step floors, or Coke bottle back end. Top sports cars also want new designs regularly. “The challenge is to be ahead of what people want,” says Digby. “And cost is becoming far more of an issue. People want it to be the lightest, strongest, greenest – they want all those things, but cheaper.” @WRStirling

For a fuller interview with Peter Digby, including details of his time as chairman of the Motorsport Industry Association, go to www.themanufacturer.com

60 second Interview

Neil MacDonald Sheffield region and nationally. I travel to London a lot, where there is a Cutlers Company. Outside London we are almost unique, there is one in Bristol. The Company’s role is very active and evolving. In South Yorkshire, we changed where we are active to mirror the Sheffield LEP, so it is now South Yorks, Derbyshire, a bit of Nottinghamshire. The DNA is in advanced engineering and metals, but the role has broadened out to support other sectors. Automotive is growing strongly, construction business Polypipe has just joined the Company. You have to remain relevant. We recruited more freemen last year than we had done for years.

The Master Cutler Neil MacDonald is The Master Cutler. Since 1624, The Company of Cutlers in Hallamshire has existed to protect and promote the craftsmanship of Sheffield’s manufacturing industry. What is the Cutlers Company? To join the Cutlers Company you have to be involved in manufacturing, and I was a Freeman while at Firth Rixson. I joined as junior warden in 2010. Its principle purpose is to represent the interests of manufacturing industry in the

Sheffield is a very integrated community. How do all the business support organisations avoid duplicating their work? If you go back 10-20 years in Sheffield you wouldn’t see the same integration – we were not pulling together. We had the infamous “Republic of South Yorkshire”, the councils who were not interested in business and local politics. We’ve formed some new bodies yes, but today we are all pulling in the same direction. Richard Wright has set out the Chamber, Barnsley and Rotherham have joined in a truly private sector-led partnership. The universities are heavily involved with the Advanced Manufacturing Park. Everyone is working in a coordinated way. Sheffield is pulling together now – the AMRC, on the education side, the Cutlers Curriculum, Workwise – we are all off our backsides and doing it. Do you play a part in making sure these parties work more efficiently? That is exactly the role. The Cutlers Company is apolitical, with no hidden agenda. In a sense we are the voice of quality and credibility to make this work. The Global Manufacturing Festival is a classic example. We don’t have the resources to do it alone, but we can be there and we have a huge network within our team to pull it together. Do we need more trained professionals like chartered accountants running manufacturing businesses? Some grow nicely and then stop; is management a reason? AESSEAL was unique. It’s a different sort of business because here, Chris (Rea) had all the entrepreneurial spirit and the ambition in the world. The key was to put some professional guidelines in place that didn’t restrict the

growth vision, but covered the governance and reporting aspect. Contrast that with Firth Rixson; we were very successful but by the time we looked at going public to private my previous CEO had been overpromoted several times and we needed an influx of new blood, some accountants, but other new skills as well. Some thrive in a private equity environment, some can’t hack it. In some of the SME engineering firms in this region, the finance directors are not first class. In a couple of the roles I do now, I’m mentoring FDs. When things [the economy] are going well they are fine, but when times get tough they are not really able to cope with it. What needs to be done to make The Global Manufacturing Festival the “Farnborough of advanced engineering”? Moving it to the Advanced Manufacturing Park is crucial. I pushed for this because that is the future of Sheffield manufacturing. Here, they are selling the future. It is a long way to go to get to a Farnborough. The main issue we need to overcome is that Sheffield does not make many final things like cars and aeroengines, so it doesn’t get a very strong association. To attract foreign delegates, we need to tell our supply chain and academic research story properly. Ultimately all you can do is have the Festival and keep evolving – just like the Cutlers Company. Go to themanufacturer.com/ articletype/interviews/ for the full interview with the Master Cutler.

Part-time post grad

Steve Hartley, manufacturing engineering programme manager at Rolls-Royce describes his experience of Cranfield University’s professional MSc in Operations Excellence – the breadth toolbox.

n 2011 I was identified by my current employer, Rolls-Royce Plc, as having the potential to succeed at a higher level within the management structure. Having secured funding, I was able to grasp an opportunity to be part of the next intake on Cranfield University’s professional MSc in Operations Excellence. I had heard of the course in despatches and been fortunate to work for and with colleagues from previous cohorts. I had seen that they possessed something different in their approach to work that seemed to open doors for them and accelerate success. As a time served technical apprentice and degree qualified mechanical engineer with fast approaching 20 years experience working within the aerospace

The library on campus at Cranfield University

industry, I never imagined I would be where I am today – back at university. Now I know that there are no real boundaries to what I can still achieve within the business, it really is up to me. I have had many jobs over the years, attended many training courses in various disciplines and worked tirelessly through a four year part-time mechanical engineering degree at Manchester Metropolitan University in the early noughties. I have always challenged myself to do my best and I have been very fortunate to come across people in industry who have given me time, opportunities and shared knowledge. This has given me a platform on which to grow – building on the best parts of what I have learned to create my own style of people

I have just taken on a new and challenging role at Rolls Royce which I am convinced would not have been offered to me without my learning from the MSc Steve Hartley, Manufacturing Engineering Programme Manager, Rolls-Royce

and task management. The Operations Excellence course has augmented this foundation. There are now just six months of the two year course left and I feel I am becoming fluent in a new language; Cranfield calls it the ‘language of leadership’. It is a broad language that emphasises and embraces change. It is the language that affords us the chance to deliver business and manufacturing strategies, technological innovation, effective factory design and allows us to understand the impact and interaction of factors in business such as people, finances, social and market forces and performance management. The course is well balanced. It allows the opportunity to learn the theory, and then to use it in a series of well prepared scenarios during residential weeks, before taking the knowledge back to our business units. I feel I am better prepared to engage in conversations that two years ago I would not even have had a seat at the table for – let alone be able to articulate my views on change and the future. I am able to confidently run workshops, guide my teams to feel empowered to deliver commitments that we have shaped together. I can convince people of the need to protect the bottom line while also mainting a view of the bigger picture. I have just taken on a new and challenging role at Rolls Royce which I am convinced would not have been offered to me without my learning from the MSc. I am embarking on an exciting journey to deliver a potentially disruptive technology aimed at enabling growth, competitive advantage and manifesting design intent in reliable, value for money products for customers. Only now do I understand what that ‘something different’ in the colleagues who had gone before me through this course was. They had breadth, a competency that is not easy to define and even harder to gain without help.

manufacturers Calling !

Get g hand overnin the a in mak g and p mbit ing m lay y ion o o f theanufactuur own amb r itiou ing s.

has launched a campaign to get one manufacturing leader appointed to the governing board of a secondary school in every county in England and Wales.

n 2012 Autotech, a UK manufacturer of automation equipment had to turn away £10 million worth of business because MD Andy Robinson knew he did not have the skills in his business to fulfil the contract. It was a risk the MD had seen coming and at the time the company was already midway through setting up an apprenticeship academy with Semta to secure its skills needs in the future. The academy aims to make at least 10% of Autotech’s workforce apprentice trained. We know that Autotech’s skills dearth was not unique. One shudders to think how many more millions of pounds have slipped through the fingers of UK manufacturers, particularly SMEs who find their competitiveness eking away as their workforce ages and retires while technology and markets bound ahead. The rebirth of apprenticeships in manufacturing and engineering is crucial in addressing faltering UK industrial capability. Progress is being made. In January Semta reported that apprenticeships across its footprint have grown 85% in two years.

But increasing the availability and quality of apprenticeship training is just one link in the skills supply chain. The root cause of industry’s skills problems lies in the apathetic if not negative attitude of young people towards the prospect of a career in a manufacturing business – particularly in a technical role.

has launched its Back to School campaign which aims to get one manufacturing leader onto the school governing board of one secondary school in every county in England and Wales

This is not ground breaking news. Reports and initiatives abound and are doing excellent work in setting up careers fairs, school visits, competitions and more. EngineeringUK, TeenTech and WorldSkills (or The Skills Show in the UK) and Scarborough Engineering Week sees as are just a few of those most notable.

action e r r e r tu c fa u n Ma nge with elf a big challe

setting its uld make TM knows it is onvinced it co c re a e w t u B . this campaign ce. a real differen the campaign

y leaders to se from industr r governor . is looking fo The initial respon ive sit po en be rgely on education concept has la and passionate ive ct oa panies. pr e ar ufacturing com an m candidates who y ar pl em in Bridgend leading ex l Technologies issues and are ba lo G n ia es rd ua D of G stic technologi Iain Maxted, M rector at acou di ce an fin to n, ” de me in and Laura Bow th said “count e rbyshire have bo anufacturers ar m of ol po g firm TMAT in De in ow gr a d an rnors becoming gove interest every day. ive at nt te g rin eat registe hat is such a gr involved with w portance be im to e d th se d ea an pl rst “I’m so ildren unde ch ol nities ho sc po lp career op rtu campaign to he e exciting future my th d te an ca g di rin de tu to an happy of manufac th e or n of m I’m t. ne esen e next ge ratio that it can repr encouraging th to e nc rie pe n. time and ex ” says Ms Bowde manufacturers. out designing, ters fired up ab gs un yo g tin et oducts is so “G anufacturing pr e ring is one of th creating and m ac use manuf tu a to e lu va e important beca s which adds tru very few activitie Maxted. omy,” says Mr on country’s ec

Backtoschool Governor campaign

School governor responsibilities

ue to recent changes in the school governing constitution, maintained schools in England and Wales (schools in receipt of government support) have gained far more independence in being able to choose who they appoint to their governing board. Manufacturing leaders can join governing boards as co-opted governors – or potentially as parent governors if they have children attending the school. The responsibilities of school governors

But it has often been observed that the best way to change a system is from within. has launched That is why its Back to School campaign which aims to get one manufacturing leader onto the school governing board of one secondary school in every county in England and Wales. The rules governing the appointment of school governors have recently changed, allowing schools more independence in deciding the make-up of their governing bodies. With the right approach this should allow manufacturers to develop a new collaborative, rather than combative as has sometimes seemed the case, relationship with teachers. “It is essential that manufacturing leaders show they want to work with teachers and schools,” said Andrew Churchill, MD of SME engineering firm JJ Churchill and an advocate of ’s Back to School Campaign. “We are facing skills shortages and an uphill struggle in improving the image of manufacturing and communicating the progression that a career in the industry can offer. But if we seem to blame schools and teachers for this

may vary from school to school but it is usually expected that a governor will: Attend a termly board meeting Collaborate with teaching staff to guide the development of a particular year group and/ or subject Provide/suggest opportunities for curriculum enrichment Hold office for a standard four years – shorter terms are possible but cannot be for less than one year It is worth noting that a school governor does not have to live or

It is essential that manufacturing leaders show they want to work with teachers and schools Andrew Churchill, MD, JJ Churchill

run their business within a school catchment area in order to join the governing board. Rukhsana Sheikh co-principal at Ernst Bevin School in Tooting, London is supportive of TM’s campaign. “Since the rules around the governor constitution changed we had been thinking that a governor from industry would be an asset to our board,” she told the magazine. “We have a good engineering department and send a relatively high number of students to study engineering at university each year. However, the teaching would benefit from greater insight into real world use of engineering.”

they will become understandably defensive.” Questioning the quality and content of the national curriculum (p18/88) in Westminster and through consultation with Department for Education is one thing, but schools and teachers must conform to the framework they are given on a day to day basis to the best of their ability. Manufacturers can help them optimise their efforts. “Schools perform the way they do because of how they are measured – just as our businesses do,” observes Churchill. “If we know that there is not room within the national curriculum for emphasizing which skills sets are important for manufacturing and why, then we need to find different ways of communicating that. Stepping inside the system seems to be an excellent way.”

? edia.com) oxr press d e v l e o et ingvray@sayoneemdia.com) toor or to g o t Wanil tJane Gray l(ijn. g@sayonesmchool govef,rannd open . ard Ema ling (w.stir oming a n need o its bo i c r o i l t t e r S o b l e o l Wi ad st in sch dary ring le intere your t a secon anufactu m es sugg ointing a p to, ap

There is a lack of basic business knowledge in UK manufacturing. The guys from the shop floor who rise through the ranks have never had training in how to run a business

Boiling point Wall Street held buzz but no challenge says Mark Nunan. Now he’s a “junkie” for making manufacturing deals

In for a

pound

Tom Moore meets Mark Nunan, the man who swapped Wall Street for Walsall, to find out what made the city boy exchange stocks for machines.

reating a business empire with an initial investment of just £4 sounds like the premise for a Hollywood movie. And in fact, Mark Nunan’s story of buying four small, failing manufacturing firms for £1 each and restoring them to health, might make a good next gritty British flick project for Danny Boyle to export over the pond. Mark Nunan isn’t your typical manufacturing type. A public school rebel, expelled three times, he walked the trading

floors of the London Stock Exchange before making his way over to Wall Street. Always a deal-maker, he names his best investment as the spontaneous decision to buy 2,000 commemorative crowns for the royal wedding of Charles and Diana before his trip to Singapore. They sold in a day with a £1,500 profit. But what made him leave the “glamour, sex and girls” in the city? “The trading itself is dull. You get a burst for one hour, then it all dies down. There was no real challenge.”

In 2001, not knowing anything about boilers, heating steam or much about manufacturing in general, Nunan was offered French steam and hot water equipment manufacturer Collard et Trolart for just £1. “It had knackered old steam boilers, a knackered old factory and had massive arrears. Who would want it,” he asks rhetorically. He took the deal and started to brush up on his French. The 84 year-old company had been left to rot by the previous owner, an Englishman, who had “taken the best part of £400,000 out of the business” via a direct transfer and accrued a bill of €640,000 from the French Government for unpaid taxes. Enough to put most people off, particularly if it requires leaving a well-paid job at financial outfit Credit Lyonnais. But Nunan yearned for the challenge. “The worse they are, the more problems they have, the better I like it.” The logic was this: “If you’ve got a company that is managing to survive despite having antiquated systems, antiquated equipment and antiquated cultures, there’s got to be something there that’s worthwhile.” With risks aplenty, Nunan soon realised he had stumbled upon a diamond in the rough. Rising energy bills and increasing CO2 regulations prompted a surge in demand

Manufacturing Leadership: Business Turnarounds

for heat recovery and exchange. The company had the know-how and developed innovative new products to capture sales. Collard et Trolart is now worth considerably more than the £1 Nunan paid for it eleven years ago. It made a record profit of over £400,000 in 2012 but Nunan is optimistic profits can cross the £600,000 barrier this year.

Poundland Nunan had whetted his appetite for manufacturing with Collard et Trolart and there was plenty on offer at the poundshop. As the economy crashed and credit crunched, 4,664 manufacturing firms became insolvent between April 2008 and December 2009 according to the Association of Business Recovery Professionals. Long-established companies were going down the drain but for Nunan opportunity was knocking hard. “You turn it around and then there’s nothing to do. Like a junkie you need new deals,” says Nunan, describing the entrepreneurial appetite that led him to make a series of £1 acquisitions, turning companies around to amass a manufacturing business empire with a combined turnover of £32 million. All for an initial investment of just £4. In 2009 Mark came across BSC Diecasting. He paid off the company’s existing debt - it was loosing £80,000 a month - and bought it for £1. “When I walked around the factory for first time everyone was just staring blankly at me, a posh boy in the middle of Walsall. I was told I had to give a speech to everyone, which was an awkward situation bearing in mind their salaries were three weeks late. They got paid in full that week and now they get bonuses too.” Next on the shopping list was maker of nuts and bolts Bartons Cold Form in 2010. Then came metals component manufacturer Sarginsons Industries in Coventry and pressure vessel maker for the air compressor

It does surprise me how many people put money into restaurants but won’t put money into manufacturing. There is money to be made and it’s a crying shame how many companies are going down

industry Rednal Phneumatics, both of which were bought out of liquidation. With a lot of hard-work, factory investment and a heavy dose of optimism, Nunan’s rescue mission saved 320 jobs at companies on the brink of extinction and looks set to make a £1.5 million profit in 2013. “Someone else could have bought the companies and saved the jobs, but given the price I got them for it was quite unlikely,” states Nunan. “It does surprise me how many people put money into restaurants but won’t put money into manufacturing. There is money to be made and it’s a crying shame how many companies are going down.” Nunan saw that BSC Diecasting, which makes the signage for Fosters’ beer pumps in pubs, had been making £1 million a year in 2006 and was confident the business could regain profitability. “They were producing fabulous products but they didn’t know what a KPI was. On time and in full delivery was probably less than 40%. It was absolutely appalling. But the quality of the products made on shit-old equipment was absolutely amazing.”

Fade to black Nunan and the management team repositioned BSC, bought new equipment, implemented a new ERP system to change the way it operates and invested in marketing. It now supplies metal castings for the sensors and probes made by metrology firm Renishaw. After three years of making a loss, Sarginsons Industries has

just won a contract to make parts for the supply chain of aircraft manufacturer Bombardier. Contracts such as these demonstrate that Nunan isn’t in it just to make a quick buck, but committed to his businesses for the long-haul, funding degrees for the companies’ future leaders. “I was a city boy so everyone I knew had a degree, an MA or a PhD. You go into manufacturing and they think a HND is a quality qualification,” he says. “There is a lack of basic business knowledge in UK manufacturing. The guys from the shop floor who rise through the ranks have never had training in how to run a business.”

Unjust corporation tax Describing his “passionate hatred” for import-distributors, Nunan says it is unjust that his companies pay the same level of corporation tax as an importer not investing, training or employing anyone in the UK. But the injustice is not putting Nunan off. He is firm that there is no exit plan from his new manufacturing acquisitions. “It’s a long-term investment. You can’t get into manufacturing for a quick turnaround. It’s totally different from what I was in before but it’s still hunting deals.” Although his vulture capital attitude may be derided by some, his £1 deals have kept companies in business and created growth. So has Nunan’s foray into industry persuaded any of his city boy mates to invest in manufacturing? “Not a chance. They want glamour, sex and girls. You don’t get that in Walsall.”

What women want Voice from the talent ladder Lauren Attley (24), joined ErlingKlinger in 2011 as a technical assistant in the commercial department. After just four months she was invited to shadow the current applications engineer until his retirement in December 2013, with a view to taking over the role in 2014.

Positive discrimination: Yes or No? Jane Gray canvasses industry feeling.

e know there is a problem with gender imbalance in manufacturing and engineering businesses. The EngineeringUK Report 2013 ranks the UK as the worst performer in the EU for employing women in engineering and manufacturing with a female workforce representation of just 8.7%. The proportion of female applicants for jobs in aerospace engineering, mechanical engineering and electronic and electrical engineering is particularly low (see Figure 1). In addition, this small percentage of female employees

face a problem – generic across sectors – of being confined largely to junior and middle management positions. This was identified in a 2011 report Women on Boards (see figure 2) and the drain has been attributed to several causes including what EngineeringUK terms as “a persistent labour market penalty associated with becoming a mother” and a general tendency for women to be less competitive or outwardly ambitious for seniority. If we accept that this is an important issue to address – that the manufacturing and engineering sector is not optimising its

Figure 1: Proportion of female applicants by subdiscipline (2001/02-2010/11) – all domiciles

“I don’t believe that there needs to be positive discrimination for women in industry. It is more a case that some employers need to stop underestimating the level of interest that women can have in engineering. In addition, companies recruiting for engineering roles could broaden their horizons in terms of advertising – this may be where women are missing out on opportunities. “I have not, and do not envisage that I will, hit any glass ceilings with ElringKlinger. The company is more than willing to progress my training and has invested a lot of time into ensuring that my future is with them – this is really motivating. It drives me to work harder and make the best contribution that I can to reach an executive position through my own merit rather than to meet a quota.”

General engineering Civil engineering Mechanical engineering Aerospace engineering

Electronic and electrical engineering Production and manufacturing engineering Chemical, process and energy engineering

Source: UCAS, published in EngineeringUK Report 2013

Manufacturing Leadership: Gender balance

Figure 2: The talent gap

Source: Women on Boards, Department Department for Business Innovation and Skills, 2011

available talent pool at a time when skills are stretched – then what is being done about it? Most large organisations in the sector have established women’s networks to encourage discussion and experience sharing among female staff. GE, Coca Cola Enterprises and BAE Systems are just a few prominent companies to have taken this step. Donna Halkyard, head of diversity and inclusion at BAE Systems explains the principles behind its multiple women’s networks. “The networks are there to allow mutual support between BAE’s female employees. They also provide a vehicle for company insight into the experiences of employees and help in overall talent management.” Around 400 women participate in BAE’s global virtual forum which holds regular teleconferences and webinars for the discussion of topics relevant to female progression. Sometimes guest speakers from academia or other industries join the group, explains Ms Halkyard and she says this environment has helped a number of female role models emerge within BAE. These individuals now assist with mentoring – a crucial capability in any voluntary system to address gender imbalance.

Voluntary versus enforcement But is voluntary action enough? Halkyard says BAE Systems is supportive of the UK government approach which sits firmly on the voluntary action side of the fence in the positive discrimination debate. She stresses, however, that this does not indicate lack of ambition. “We believe in positive action rather than positive discrimination,” says Halkyard. “We have set ambitious targets for gaining gender balance at board and senior management level for instance, and our chairman Dick Olver is a mentor with the FTSE 100 Cross Company Mentoring Programme.” Currently 15% of management positions at BAE Systems are held by women and the company aims to double this by 2015. Others in UK industry however, are less than satisfied with the voluntary approach. One male individual from an international manufacturing firm with UK factories, is particularly strident on the matter but did not want to be named as his views run counter to company policy. “We recently held a supply chain leadership meeting with over 100 representatives from across

Can SMEs take action on gender balance in industry?

an Ward founded Corrotherm, SME manufacturer of niche metals for oil & gas applications, 20 years ago. She has never lost a member of staff in that time and prides herself on the tailored approach to career development and flexible working that the company offers. Part of the motivation behind this, Ms Ward admits, is to mitigate the impact of female staff leaving the business on maternity leave – the single biggest fear for a small business trying to address gender ratios she says, but not an excuse for SMEs to stand back from the challenge. “I think in some ways SMEs have an advantage over large organisations when it comes to their ability to tackle gender balance,” comments Ms Ward. “They can form flexible policy, created by a small group of people who are within the business every day. In large organisations policy often is often ordained by a group of people disconnected from operations.” However, Ward says that it is understandable SMEs are wary of embarking on pro-active gender balancing policies. She says they should think carefully about the way this policy is devised and be prepared for the consequences when, inevitably, a female member of staff needs paid maternity leave. “I am facing this problem right now,” says Ward. “I have two female employees who have worked for me for ten and two years respectively. Now they are both pregnant and both need maternity leave at the same time. There are only eleven of us in the office – so that is a massive proportion of my workforce to loose, particularly since they are both very highly trained.” With a her small team already overworked Ward says that the absence of two colleagues will simply mean later nights than are already the case. She can only hope that the culture of flexibility and fair play among colleagues will be enough to placate those who remain behind and attract her two critical staff members back as soon as possible.

Europe. There were nine women in the room. You don’t change that with encouragement and mentoring,” he stated. “Because of the nature of manufacturing organisations, which function and perform on KPIs and measurement, you will never alter that kind of imbalance until you force a disruptive change in what is measured and how those measurements are acted upon,” he continued. The source says this disruptive change might take different forms, both in recruitment and “in the way we choose to

push careers”. He advocates mandating that at least one woman be on each “recruitment slate” for jobs at every level and that a woman be on the interview panel for each position. “I accept that this raises concerns around diluting talent. But it is a risk we have to take.” Currently the source asserts that too much recruitment and promotion allows incumbent managers and executives to recruit unconsciously in their own image. “So often that is white male,” he sums up. @janefagray

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EEFInsight Environmental Management Standard ISO14001 is changing

Greg Roberts, EEF Consultant and the UK Expert on the ISO Technical Committee overseeing the revision of guidance to ISO14001 urges manufacturers to prepare now for revisions to the widely used standard for Environmental Management Systems.

he revised standard will not be published until early 2015, but manufacturers must start considering the potential changes sooner rather than later. Preparing now will save disruption, time and money in the long run. As previously reported, the main changes to the standard are already known. The revision will follow the ISO high level structure for management system standards, which, in time, will harmonise all management systems including, for example, ISO9001. The main changes include: Incorporating the affect that wider business factors such as political and economic will have on the success of the Environmental Management Systems (EMS) A greater emphasis on leadership The development of a communication strategy Consideration of the impact the environment has on the organisation rather than solely the converse Knowing this, manufacturers can, even at this early stage, greatly benefit from considering the affect the changes will have on their business.

Turning oil tankers How long will it take to implement the changes in ISO14001:2015? Starting implementation early not only ensures timely completion of the new standard but allows you to do it efficiently. It is better to transition the ISO14001 changes alongside the routine tweaks and alterations required to meet the principle of continual improvement, rather than making a specific change to meet the revised standard. There is also a question of resource. By planning now companies can predict their resource requirements, including expert external assistance and ensure this is included in 2014 budgets. Large and small businesses may have different reasons to start early. Given time large organisations, particularly those with numerous sites operating autonomous EMS, can develop a corporate response to the ISO14001 changes which can then be adapted locally. This efficient approach saves each site having to start from scratch. Smaller companies with less dedicated resource may need longer to implement the changes, and will greatly benefit from an early start.

The early birdâ&#x20AC;Ś. There will be great kudos for those manufacturers and their environmental managers who are recertified against ISO14001:2015 first. Customers may use it to differentiate between leaders and laggards and there will be plenty of opportunity for media coverage â&#x20AC;&#x201C; but only for those making the changes early. Furthermore, ISO14001:2015 will provide added value to the business. The sooner the changes are made, the sooner the benefits can be realised.

Leadership There will be great kudos for those manufacturers and their environmental managers who are recertified against ISO14001:2015 first. Customers may use it to differentiate between leaders and laggards Greg Roberts, EEF

ISO14001:2015 will help rectify common problems with EMS, specifically that they have limited senior level support, are marginalised from the core business strategy and are often the sole responsibility of an environment manager or similar. ISO14001:2015 will require wider engagement with leaders who will have to take greater responsibility for the EMS. In order for this to be achieved, capacity at all levels needs to be built, including human and financial resources, knowledge and skills. This takes time and careful planning. On a positive note starting early will help identify existing good practice, which will support the implementation of the changes.

Find out More and Get Involved EEF has an established track record of helping organisations implement ISO14001. If you want to prepare for the changes, attend the EEF Member Briefings on Health, Safety, Climate and Environment being held across the country in May. For more information and to book your place please visit www.eef.org.uk/events. If you would like to feed into the revision process, which is still ongoing contact groberts@eef.org.uk

Have your say at www.themanufacturer.com

Manufacturers discussed talent progression frameworks over dinner at Malmaison restaurant in Birmingham

Lead

huskies Talent is a stretched resource in UK manufacturing, but there are techniques which can help to maximise its potential. Industry leaders at a Manufacturer Directors’ Forum dinner swapped tips on how to leverage lean thinking for more strategic HR and human capital management.

“A

t Toyota, my mentor met me on my first day in Japan and worked alongside me for five years – even moving back to the UK with me when my job relocated.” This was the insight given by Mark Gregory, now head of transformation and engagement at BAE Systems but previously of Toyota and then Ford. His point was this: UK manufacturers tend not to be brave enough in dedicating time and senior resource to the continuous development of leaders

Attendees at this dinner represented: BAE Systems, Coca Cola Enterprises, GKN, Jaguar Land Rover, National Express, Norman Hay, Renishaw and Stadco. The Manufacturer thanks Oracle for its sponsorship of this event. within their organisations. Without demonstrating commitment, from the top down, to succession planning Mr Gregory says talent, and therefore productivity, will remain suboptimised. In a word, Gregory sees sustainable productivity as reliant on ‘engagement’ – an overused term in management mantras, but one which Gregory insists is at the heart of efficiency tool kits like lean. “The vast majority of businesses still try and ‘implement lean’ as a productivity proposition,” observed Gregory as he kicked off debate over dinner in Birmingham. “What they need to realise is that lean is first and foremost an engagement proposition – the engagement leads to productivity.” Gregory’s insight is far from being fluffy consultant talk.

He has years of experience in operations roles applying the principles of the Toyota Production System, including a three year project which made substantial savings on the manufacturing costs of the Typhoon jet at BAE. He is now responsible for consolidating BAE System’s federated HR services into areas of synergy to create a rationalised shared service for the business. “It’s very enjoyable for me, coming from an operations background, to work with HR. It’s a little bit less enjoyable for them,” he joked to fellow forum members as he spoke about the challenges of using lean principles to elevate HR from a back office function to one which is central to delivery of business strategy.

Manufacturing Leadership: Human Capital Management

Strategic HR BAE Systems is not the only business going through this process. According to a recent Aberdeen Group report, Human Capital Management Trends 2013, 55% of surveyed companies said HR was repositioned in 2012 to become a more strategic business function and is now critical to growth plans. Experiences and opinions shared at this Manufacturer Directors’ Forum dinner corroborated the trend. Vic Bellanti, CEO of specialist chemicals, sealants and coating company, Norman Hay, shared that his company had recently elevated the HR manager role to director level. It is perhaps surprising that it has taken so long for manufacturers to realise the potential power of linking HR with business strategy. The industry is deeply concerned by its skills gaps but, until now has often ignored the opportunity to link recruitment, training and succession planning with productivity data and growth strategy. Attendees at this forum event observed that this can, in part, be attributed to a communication gap between the engineers and finance professionals who tend to drive strategy in manufacturing firms and HR. “We like to see everything in terms of metrics and equations” said one guest. Whereas talent development is often driven by difficult to quantify characteristics – work ethic, confidence and, critically, leadership.

Systematising talent management With most guests at this dinner coming from large organisations with less flexibility to act on the instinct of a small leadership team, conversation turned on the feasibility of creating a human capital management system which could allow HR to capture both perspectives – progressing both technical and management talent into positions where individuals will feel their skills are valued and make a difference. Understanding what information such a system should capture, in what format and who would need to access it is something of a holy grail for software company Oracle who sponsored this dinner. “We can all be guilty of focussing on transactional business data to make decisions,” observed Guy Cunnington, HCM lower case director at Oracle. “But we need to give more time to factors like talent and I believe there are real opportunities to capture information about talent and use, for example, predictive analytics to help a business understand what changes are

needed to grow in an identified strategic direction.” While there was little experience among guests of using tailored IT systems to manage talent along these lines, there was plenty of insight into a variety of competency frameworks for talent management. It was admitted by all that these tended to be paid lip service and the leaders present were largely dissatisfied with their effectiveness. One framework for leadership development identified by Peter Watkins, global lean enterprise director at GKN, intrigued other guests however. “When I worked at [automotive supplier] ArvinMeritor we had a progression system based on the coaching abilities of individuals,” he explained. “You could only progress to a new role once you had successfully coached a proportion of you team in certain capabilities and behavioural standards. And it was those being coached who judged the success of their coach – not an external observer. A leader had to have the support of their team behind them to gain promotion.” The challenge of trying to systematise deployment and development of talent was agreed by all to be complex but full of potential value creation. Key factors in successful human capital management emphasized the importance of respecting the ambitions of individuals and appreciating the reactions of different teams to different types of leadership style. While social media was discussed as a means for large organisations to efficiently gain

visibility in these areas, face to face meetings and appraisals were generally felt to remain an essential element in talent management. Jo Lopes, head of technical excellence at Jaguar Land Rover also stressed that defining a process for talent management – as with any operation or function – requires stability. He shared useful insight into the way in which Tata ownership, despite the diversity of the business, has brought this stability to JLR.

Professional approach Many different definitions and characteristics of effective leadership, and the influence this has on business performance, were swapped over the course of dinner but one in particular seemed to resonate. “We look for the lead husky,” said Peter Bowler, group HR manager at metrology firm Renishaw. “A lead husky will be the most adept. It responds to the calls and direction of its driver to lead the pack from the front. It puts in as much, if not more effort, as the team behind it to get the sled to its destination.” How does Renishaw find its lead husky’s? Mr Bowler says the firm uses a number of recruiters, but in essence talent management relies on the company’s lack of hierarchy, on a “very short chain of command”, and on the culture defined by its family runpublically owned management history. Professionalism in human capital management is a core value for the company, “Highly skilled engineering professionals expect and deserve professional management,” Bowler summed up.

The Manufacturer Directors’ Forum ’s Directors’ Forum is a growing community of manufacturing leaders who regularly meet at regional dinners to discuss shared sectoral, regional or strategic business challenges.

Highly skilled engineering professionals expect and deserve professional management Peter Bowler, Group Human Resources Manager, Renishaw

If you are interested in being invited to a forum event or have a discussion area you would like to see raised at a forum dinner please contact Grace Gilling (g.gilling@sayonemedia.com) on 0207 401 6033.

Lean

frontiers Where now for lean? As globalisation and technology trends change the way manufacturing networks function and measure success, how is the sectorâ&#x20AC;&#x2122;s favourite efficiency tool set and philosophy evolving? Two interviews from Lean Management Journal give insight.

associates and suppliers. It is still the model to learn from in using the scientific approach in everything we do. RP: Many struggle to understand that value flows horizontally in a business, across departments and functions. Vertical silos persist as typical business structures. Why? DTJ: Toyota itself is as vertically organised as any organisation. This is the right way to deploy knowledge and resources. But the company has also found a way to manage the horizontal flows of value creation that cross these vertical pillars. Strong value stream engineers gain agreement across functions on the actions necessary to streamline the whole end-to-end value stream, with strong top management support but no authority over the resources necessary to accomplish these actions. This is a conundrum other organisations will have to learn to solve. RP: Supply chain security and complexity are rising concerns. How can companies use lean to tackle them? DTJ: As we wrote in The Machine that Changed the World, the logic of lean is to build design, production and supply bases in each major region. Long supply chains across oceans in search of low wages can never ultimately compete with closely integrated supply chains responding quickly to demand. This is now beginning in all kinds of organisations, from GKN to Bosch, GE, Apple, Nike, Hugo Boss and so on. The challenge is for multiple organisations and different functions within those organisations to see the whole value stream together in order to design the appropriate, compressed supply chains for the next generation of products.

Professor Daniel T Jones, a founding father of lean in the West, talks to LMJâ&#x20AC;&#x2122;s editor Roberto Priolo. Roberto Priolo: Is lean evolving as a methodology? Daniel T Jones: I think the lean movement is facing an important threshold. There is a growing incompatibility between external and internal consultants â&#x20AC;&#x201C; and staff-driven programmes to teach tools to eliminate waste and the essence of a lean transformation. At its core, a lean transformation is about solving specific business problems in their context by developing the skills of

line managers and team members to unblock the flows of value creation in their value streams. But while solving a problem is fine, the lasting value is the capability to solve the next set of problems. RP: Do the recent recalls issued by Toyota discredit lean as a methodology? DTJ: Toyota is not perfect and it grew faster than its ability to grow the capabilities of its

RP: New lean solutions are a growing feature of the business IT market. Do they really get results? DTJ: Trying to automate processes before leaning them out leads to disaster. Strong line management able to define the needs of the process is the right basis for designing IT systems that enhance the flow and speed up communication along it. The ultimate contribution of IT and the web is that they open up quite new process opportunities and business models for helping consumers create more value in their lives. The key is to see consumers and the processes they go through to create this value as an integral part of the extended value stream, from design through to production to ongoing support in use.

Manufacturing Leadership: Lean frontiers

LMJ Annual Conference Want to learn more about the future of lean and how its application is changing? Join delegates at Lean Management Journalâ&#x20AC;&#x2122;s fourth Annual Conference on May 21-22 at the Hilton Birmingham Metropole. Mauro Pino, head of world class manufacturing at Chrysler Group, will deliver a keynote presentation. Key topics will include: how to integrate practical and cultural approaches to create a technically equipped and engaged workforce across the enterprise. Website and more detail coming soon. Register early interest with r.priolo@sayonemedia.com

Mauro Pino, head of world class manufacturing at Chrysler Group, tells Roberto Priolo about international approaches to lean and moving forward through a global merger with Fiat. Roberto Priolo: From a lean perspective, what happened at Chrysler after Fiat came into the picture in 2009? Mauro Pino: One of the keys to our future was the implementation of World Class Manufacturing (WCM), a production system that Fiat developed with great success. A very important aspect of the contract between Chrysler and Fiat was that the labour unions were involved from the very beginning and that the application of the World Class Manufacturing system in all North American manufacturing facilities was provided for. This represented a clear path for Chrysler to get out of bankruptcy, and of course helped a lot in terms of leadership engagement. RP: Chrysler had and existing lean system before the merger. How did you get past the difficulties of replacing that exisiting approach with the WCM model? MP: Introducing WCM represented a huge change. The WCM system has 20 pillars, of which ten are technical that include quality, safety, people development, environment, logistics, and maintenance. The other ten are, crucially, managerial. These focus on having the correct people in the correct place and the motivation of operators.These are

critical when you consider there are more than 49,000 hourly and salaried employees in manufacturing within Chrysler around the world. This was the real big difference from what we had before. The system is based on people, and this changed the perspective of the lower levels of our organisation deeply. Until then, workers were considered executors of the technical system we put in place to manage lean and change the business. After WCM was introduced they were seen as a key part - 50% effectively - of that system. They were on our side. RP: What is the difference between the Toyota Production System and WCM? MP: The Toyota Production System is the foundation of World Class Manufacturing. WCM started with the collaboration between the Japanese and the Europeans, in particular the Swedes and the Italians. This melting pot produced a rigorous, technical framework that is based on working with people. TPS is a great system that fits very well with the Japanese reality. In America and Europe,

perhaps, we need more of the managerial side than they do in Japan. RP: How can you deliver a consistent lean programme globally in the face of differing business regualtion? For example workforce and health and safety regulation. MP: This is a very important point for the global application of WCM. Differences in regulation are in place and sometimes they are huge. Think about diesel application in Europe and the US and the percentage of cars sold because regulation differs. Or think about the pollution limits you are allowed to have in California or in the Shanghai area today. For WCM, these differences are only reflected in the KPI levels that we set as our goals, but they canâ&#x20AC;&#x2122;t change the way we deliver improvement. Levels of pollution may be very different in the two places, but the approach to performance is the same. As well as being a system, WCM is a language, a way to communicate easily between us. And as with all languages, you need to study it.

Fuller versions of both these interviews are available at www.leanmj.com

Missile Systems, having started at the company from school. She went on to get a higher apprenticeship – a degree through learning while she earned, enabling her to buy a Mini Cooper and enjoy a holiday to South Africa – something many of her peers could only dream of. Here was a confident, articulate young woman who has become a role model for others to follow and someone who has helped explode the stereotypical image many have of what an apprentice in an engineering or manufacturing company looks like. In schools, colleges and universities there are many as yet undiscovered talents who we must unearth for the sake of UK plc.

Bethan Sherbourne, senior procurement officer at MBDA Missile Systems

Stirring ambition

Talent

spotters Semta’s UK operations director Lynn Tomkins describes the work being done in partnership with employers to stem the brain drain.

ecuring the talent pipeline is a theme which is already dominating this year’s thinking in the advanced manufacturing and engineering (AME) sector. The first quarter of 2013 has been extremely encouraging with widespread media coverage of the 85% increase in apprenticeship starts in the past two years. We have also had the winners of the EEF Future Manufacturing Awards announced (p54) – young people who have made a

real difference in the workplace. However, the highlight for me so far was the signing of our Apprenticeship Ambition at the House of Lords in the presence of Skills Minister Matthew Hancock MP. In a five minute speech, a young woman did more to promote the apprenticeship route than many of us could hope to do in years. Beth Sherbourne (p52) told an audience of employers how at the age of 22 she is now a senior procurement officer at MBDA

In a five minute speech, a young woman did more to promote the apprenticeship route than many of us could hope to do in years

Government recently announced that from next year, changes to the Specification of Apprentices Standards for England (SASE) will mean level 6 and 7 apprenticeships – equivalent to bachelors and masters degree level – will be available for the first time, making vocational learning an attractive alternative to the traditional higher education route. A recent survey by Roevin, a recruitment firm specialising in engineering, suggested four out of five professional engineers were prepared to leave the country to work overseas – citing pay, lifestyle and valuable work experience as key factors. And last year 31% of hi-tech manufacturing firms said they had to recruit workers from overseas due to the lack of available skills in the UK. That is why Semta committed to work with the National Apprenticeship Service and other partners to double the number of level 3 and higher level apprenticeships by 2015/16 from our current levels. We are ahead of target but there is much to be done if we are to achieve the Apprenticeship Ambition with our partner employers playing a key role.

Workforce and skills:

Gary Griffiths is head of apprenticeship programmes for aircraft manufacturer Airbus – a company that has long recognised the importance of the duration and quality in apprenticeships. “We are extremely proud of the progression routes available at Airbus. We have developed progression from a foundation apprenticeship at level 2 through level 3 and 4 apprenticeship programmes and now up to the level 6 Undergraduate Apprenticeship” says Gary. “Someone who joins us as a craft apprentice can progress to the Higher Apprenticeship with opportunities to complete an Honours Degree, then work towards an MSc and chartered status. “All our apprentices will be gaining practical experience of working for a major manufacturer, earning a salary while also gaining qualifications that will help take their career much further.” MBDA Missile Systems also has a proud record of apprentices going on to achieve great things. Beth Sherbourne was named national Higher Apprentice of the Year and she is in good company. Gareth Humphreys MBE MBDA’s HR adviser for education says: “Apprentices are the lifeblood of a company and we believe in giving them the best possible training, work experience and opportunities to progress their careers. “Beth is a great example for others to follow. Our whole approach to apprenticeships underpins our long term strategy to secure the significant knowledge base of our manufacturing community into an ever more demanding and changing future.”

Stimulating flow The UKCES Employer Investment Fund (EIF) was created to stimulate employer investment in skills and to improve the use of these skills in the workplace in the most effective way.

National Apprenticeship Week Semta is partnering the Society of Motors Manufacturers and Traders for a National Apprenticeship Week event. The event will consist of a seminar, with Q&A, followed by a reception and will take place on Monday March 11 between 16:00 and 20:00 at SMMT’s office, 71 Great Peter Street, London, SW1P 2BN. The seminar will include introductory remarks from a government official on the future of the apprenticeships scheme in the context of government’s industrial strategy and the recent Wolf, Heseltine and Richard Reviews, and comment from SMMT and Semta representatives. The event will be attended by both large organisations and SMEs working within the automotive sector and promises to be a lively discussion. Following the seminar, a reception will be held in the SMMT exhibition space, where Matthew Hancock MP, Minister for Skills has been invited to speak. The reception will showcase work produced by apprentices from a number of automotive companies who will also be in attendance. Last year 31% of hi-tech manufacturing firms said they had to recruit workers from overseas due to the lack of available skills in the UK

Through our employer engagement Semta has directly supported the recruitment of some 1,053 apprentices within the AME Sector - 719 of these apprentice starts are with employers who had ceased to recruit apprentices or never have previously.

We have also: Supported 962 supply chain companies to produce a Skills for Growth plan Through the Regional Council work and media campaigns we have supported an increase in engineering apprentice starts of up to 130% in two years. Directly levered an increase of employer cash investment in skills through the new graduate & apprentice jobs totalling £1.9 million in wages, to date Facilitated 169 unemployed graduates to gain employment with small to medium sized companies by offering £1,000 grants to employers Worked with SMEs in the AME sector to recruit their very first STEM graduates: 21 recruited to date with a further 200 places identified Provided engineering and STEM careers advice to over 7,000 students through partner events

Produced eight EIF case studies to date on ‘Skills for Growth’ successes, and produced two DVDs. Directly managed on behalf of NAS the eight engineering WorldSkills Competitions across the UK, which culminated with the finals taking place at the Skills Show at the NEC. Showcased and managed the ‘Engineering & Manufacturing Tent’ to inspire the 20,000 students who visited the Skills Show Worked with NAS to promote the £1,500 apprenticeship grant offer to new employers, which has supported massive growth in the engineering apprenticeship numbers. Signposted employers to Manufacturing Advisory Service (MAS) to promote ‘Growth Innovation’ Working with the Trade Union, Unite and Unionlearn, Training Providers and Awarding Bodies to drive up investment in skills Supported the above with £1 million investment from Semta So the message is clear – the talent pipeline is flowing and everyone is pulling in the right direction but we all must keep up the momentum. We cannot afford to let the pipeline run dry.

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f o e e y o l Empmonth the 2013 h Marc

Oliver Jukes Design Engineer, Rolls-Royce Oliver Jukes was the winner of the Outstanding Achievement by a Final Year Apprentice Award at the EEF Future Manufacturing Awards in February 2013. Since his application for the award in 2012, Oliver has now graduated from his apprenticeship and is a full-time design engineer at Rolls-Royce. Oliver explains how a passion for engineering made him the first person to become a fully fledged member of the Rolls-Royce design team while still an apprentice. What is your role and responsibilities? We produce aircraft engines and I design engine components. My responsibility is to come up with new designs and see them through to completion.

refine a component and make sure it is actually usable and manufacturable. In terms of the academic side of things my best subjects are maths and physics. Strength in those areas has definitely helped me.

What are the key skills you use as a design engineer? I use CAD (computer aided design) which can often be used to illustrate a concept in 3D. It is a very good way to

How did you get into your role? I left school at GCSE level. During my GCSEs I studied maths, physics, chemistry, biology and design and technology resistant materials. I did well in all those subjects and I’ve always been fascinated with engineering. As a result I applied for an apprenticeship straight away. Finding there were funded education schemes available alongside the apprenticeship made me extra keen.

CV in brief: Oliver Jukes Age: 21

Employment:

Rolls-Royce: 2008-present

Education:

GCSE maths, physics, chemistry, biology and design and technology resistant materials, BTEC national certificate in mechanical engineering, planning to study mechanical engineering at University of the West of England

Interests:

Powered hang gliding (Oliver built his own aircraft),Riding motorbikes, boxing, compact 2-stroke combustion engines

What personal characteristics help your role? I’m very creative and I’m always coming up with new ideas and new projects both engineering related and non-engineering related. I’ve always been interested with how things work. That, and a keen take to maths and physics means that I can’t help but always create engineering solutions and look to improve mechanisms.

What do you consider to be your biggest personal success in your career so far? I’ve invented a novel 2-stroke internal combustion engine and I’ve applied for patent protection for it. I’m now in the process of designing the engine to be prototyped and tested. Aside from winning outstanding achievement by a final year apprentice at the EEF awards, my biggest achievement so far in my career at RollsRoyce was just getting into the design department while still being an apprentice. I was actually offered the fulltime role before I’d completed my apprenticeship which has apparently never been done before. What will your next career move be? This September I plan to start my Rolls-Royce funded degree. I haven’t selected a course yet, but it will likely be in mechanical engineering. I will study at the University of the West of England and be given a day off per week for this. I’ve been given my job at Rolls-Royce because potential has been seen in me, not because I’m fully competent. I still have a lot to learn. My ultimate goal at the moment is to also get my 2-stroke invention to market. What is the best way to get more young people interested in manufacturing? My Dad suggested taking this route and I was probably the only person in my class that even considered an apprenticeship. Following that I researched it a bit, weighed up the options and was quite drawn to it. Companies should go into schools and inform school students before they choose GCSE subjects about the benefits you can get from apprenticeships.

Have your say at www.themanufacturer.com

Womanufacturers As we celebrate both International Women’s Day and National Apprenticeship Week in March goes talent spotting for some of UK manufacturing’s brightest young female stars. What led them to take the plunge into a traditionally male dominated arena and how are they getting on?

Beth Sherbourne

Age: 22 Company: MBDA Position: Senior Procurement Officer Qualifications: Studying for an MSc in Procurement, Logistics and Supply Chain Management Awards: Won Higher Apprentice of the Year at the National Apprenticeship Awards 2012. “My dad was a technology teacher and my grandfather worked at British Aerospace but I wasn’t interested in engineering at school. My college tutors were really against me taking an apprenticeship and wanted me to go to university. Now I’ve got my Bachelors, am working for my Masters and getting paid at the same time. My job at the moment is great I spend my time on multi-million pound contracts buying batteries for missiles. Winning Higher apprentice of the Year was a complete surprise.”

Charlotte Tingley

Age: 23 Company: BAE Systems Position: Production Engineer specialising in helmet technology Qualifications: Left school at 16 to take up BAE apprenticeship Awards: Won the Institution of Engineering and Technology Young Woman Engineer of the Year Award 2012 “When I first started six years ago I was one of the first female apprentices for ten years but in the last three years we have taken a female apprentice every intake. In the six years I’ve been here everything is changing and there will come a time when it will be 50/50.The apprenticeship has given me the chance to meet David Cameron and give a conference speech at the Royal Opera House. I feel like I’m committed to BAE for life and my aim over the next few years is to move up to production manager.”

Emma Roberts

Age: 19 Company: Fairfield Control Systems Position: Engineering Apprentice (5yr apprenticeship) Qualifications: Studying mechanical engineering at college “At the moment I am doing an HNC at Lincoln College which is a year and a half. After that I will do another year and a half for my HND and finally two years to get my full degree. When we are in the factory we get to try out different departments which is great. I was stuck over whether to go to university or not but I definitely don’t regret my decision. I really enjoy coming here and I don’t have the student debt which is a bonus.”

Workforce and skills : Women in manufacturing

Melissa Lyon Age: 19 Company: Terasaki Position: Electrical Engineering Apprentice Qualifications: Highers in Maths, English, Chemistry, Music “I’d been studying psychology at university but decided it wasn’t for me. I saw the electrical engineering apprenticeship and it was the only thing that sparked my interest. At the moment we are getting rotated through different sections of the shop floor. I get to try loads of different things that I might not get if I was at a bigger company. Working on the shop floor has taught me how everything is put together. It’s great to know everything about the product that I’m putting out there if I end up in sales or marketing.”

Nikki Cusworth

Ashleigh Richards Age: 22 Company: Siemens – Subsea Division Position: Apprentice Qualifications: Highers in Maths, English and Chemistry “University wasn’t for me. I like the practical side of working more than sitting behind a desk. At the beginning I didn’t know a lot about engineering so I was scared about applying but you’re taught everything and your confidence grows as you feel competent. The apprenticeship has given me a career as well as taught me so many things that will help me throughout life.”

Olivia Richards-Smith Age: 17 Company: Sunseeker Qualifications: Six months into a four year advanced apprenticeship in marine engineering “I didn’t study engineering at school but I’d been interested in it since I was young because my dad is a mechanic. I’m on the first stage of my rotation around the business at the moment working in systems where I link up all the plumbing and electrics. Our first four weeks was a boot camp, which was brilliant because I learnt a lot in the first four weeks. It meant when I went into the factory I knew what to do right away.”

Age: 23 Company: Rolls Royce Position: Just completed a three year apprenticeship. Now doing a three year assembly and manufacturing leadership development scheme in Germany Qualifications: Studying for a Masters in engineering business management at Warwick University “I’m practical minded and getting life experience was more important to me than having an academic experience. The three year program that I’m on now is for the top two per cent of Rolls Royce apprentices and they are funding my masters so I’m getting the best of both worlds. I was really apprehensive about there not being many other women doing the apprenticeship but as soon as I started I realised it didn’t matter. Everyone is passionate about engineering and manufacturing and that’s what’s important.”

Holly Broadhurst Age: 19 Company: Apprentice Design Engineer at JCB Compact Products Position: Took the apprenticeship after taking A-levels at the JCB Academy Qualifications: Studying for a BEng in Mechanical Engineering “I always got told to go into engineering; being a girl you don’t automatically think you could go into engineering but it was perfect for me. Women have a perception that engineering is going to be this gritty, greasy job and it’s not like that at all. If you asked me five years ago where I thought I would be at 19 I would have said university because that is what people drill into you. As it happens, I am at university, but through apprenticeship so I’m avoiding debt, getting a wage and a degree at the same time.”

High flying

drop-out Last month, straight A student Devon Sumner won the Outstanding Achievement by a First Year Apprentice category at EEF’s Future Manufacturing Awards. She looks back with relief on her decision to ditch university and so do her parents.

Devon Sumner made the right choice when ditching university to take an advanced apprenticeship with Airbus UK

evon Sumner is flying high. Poised and professional, she was unphazed by the attention 500 manufacturing leaders and members of the press turned on her in January as she took hold of her EEF award for the most Outstanding Achievement by a First Year Apprentice. But just over a year ago Miss Sumner’s recognition for her work at Airbus in Broughton would have seemed an unlikely scenario. At the time, having achieved straight As in four A levels, she was engrossed in a degree course at Leeds University where she had been encouraged to go by her teachers and parents. Understandably they were ambitious for her and keen that she optimise her talents. But Devon did not respond well to the university environment and a year and a half into her course, confessed her unhappiness with the direction it was taking her to her tutors and parents. She also told them she thought she had found an alternative education option: an apprenticeship. “I had always had an interest in aerospace,” she at the EEF Awards ceremony in London. “I told grew up living next to an RAF base and I still have an ambition to learn to fly. The idea of building aircraft was therefore very exciting and when I met people from the Airbus training school and the apprentices I fell in love with the job and set my heart on getting a place.”

If I am honest, before Devon’s experience with Airbus there was a stigma attached to apprenticeships for me and teachers generally Wendy Sumner, Devon Sumner’s mother

By September of the year that she quit uni, Devon had begun her apprenticeship training – a testament in itself to the strength of her application given the intense competition for Airbus apprenticeship placements from thousands of applicants each year. “It was the right decision for me – winning this award confirms that more strongly than ever,” states Devon. Looking forward, Devon is taking things one step at a time. She says it is an exciting time to be working in aerospace and speaks of the privilege of working on the development of Airbus’ cleverly engineered A380 and A350 models. Ever the proud professional, she aims to achieve chartered engineer status as soon as she can and lives by the simple philosophy that “things can only get better”. Her achievements so far this suggests we have not heard the last of Miss Devon Sumner.

Workforce and skills: Industry image

Parental Guidance

or the proud parent of an outstandingly bright child, the news that they want to drop out of university is rarely welcome. But Devon’s experience with Airbus has transformed the outlook of her parents, converting them into pro-active supporters of apprenticeships as a route to work and of the UK’s “fantastic” community of manufacturing employers. Looking back over this change in perspective Wendy Sumner, at the EEF Awards ceremony, “Devon was Devon’s mother, told always such a high achiever at school that we and her teachers naturally assumed she would go to university and that she would want to do so. “In fact she was very disappointed by the whole experience. She didn’t feel the course gave her any drive and did not challenge her.” Naturally concerned, but sensing the seriousness of Devon’s dissatisfaction, Mrs Sumner supported her inclination to quit the course. Not the reaction that every parent would take, but one which has been pivotal for Devon, her mother - and now perhaps many other potential apprentices who may never have had the route promoted to them. Mrs Sumner explains, “I am a PE teacher and head of year 11 at my school which means I have responsibility for careers advice among other things. If I am honest, before Devon’s experience with Airbus there was a stigma attached to apprenticeships for me and

The Young Manufacturer of the Year Want to recognise the talent of a young person in your company? Entries open this month for The Manufacturer of the Year Awards 2013 including the Young Manufacturer of the Year category. Last year Sean Gallagher from BAE Systems scooped the prize confidently that and told “I think it is of the utmost importance to recognise young people in business. It is the people that breed the ideas in a business, not the hierarchy, and people at all levels can breed a lot of life into a business.” Please visit themanufacturer.com to hear more from Sean about his career since winning the award and his tips for this year’s hopeful entrants.

teachers generally. They were considered only as options for the less academically able.” That attitude is now a thing of the past. “The way Airbus has fostered Devon’s abilities, the way she has simply flown with them, has completely changed my understanding of what apprenticeships can offer. I now actively promote them, alongside other education and qualification options, to all of my students.” Mrs Sumner says she would urge all parents to reach out more and explore all the options that their children could take to find the job that fits their abilities and enthusiasms. “Explore all horizons – for everyone. Don’t accept that university is necessarily the right or only choice for the very bright. I used to. Now I believe in finding the best fit.” And what about manufacturing specifically as a place the parents might aspire for their children to work? “The industry is full of bright, intelligent, driven people. Devon’s sister has now started an apprenticeship with Siemens and I just wish I had more children to put into manufacturing jobs!”

Why did Devon win the Outstanding Achievement by a First Year Apprentice Award?

ary Griffiths, apprenticeships manager at Airbus UK, explains why Devon’s application shone. “Her apprenticeship programme is extremely challenging, yet she completed the first year of the foundation degree by gaining lower case in every module.” Modules included: Performing Engineering Operations NVQ level 3 (Completed early) Engineering Leadership NVQ level 4 Essential Skills Wales and Key skills (testing application of number, communication and ICT skills) ILM level 3 in Service Improvements EAL Industrial Environmental Awareness Award CIEH – Health & Safety Award level 2

In addition to completing all these modules with distinction, Devon has supported Airbus in promoting apprenticeships in schools and colleges around the UK - especially acting as an inspiration and a role model to young girls. She has also already entered the political arena, representing Airbus in a meeting with several politicians to endorse its new Undergraduate Apprenticeship scheme. In addition to the EEF National Award for Outstanding Achievement by a First Year Apprentice, Devon has also been awarded the Welsh Livery Guild Award for best first year apprentice and received internal recognition at Airbus for the best performance during the first year of an apprenticeship.

Events Upcoming events Lean Immersion Programme (LIP) 6th and 7th March 2013, Accolade Wines, Bristol

Lean practitioners will take you on a two-day course exploring lean tools and techniques right through to cultural enablers to cut your costs and run your business more efficiently. Find out how to implement change management throughout your organisation with best practice presentations, Gemba tours, subject area specialists and group facilitated learning activities.

www.themanufacturer.com/lip-accolade-wines

ERP Connect

Wednesday 20th March 2013, Northampton Marriott Hotel, Northampton This unique event offers a one-of-a-kind opportunity for you and your team to see the best Enterprise Software Solutions in the world all in one place, all at the same time. For further information or to book your place, contact Benn Walsh on 0207 202 7485 or email b.walsh@sayonemedia.com

www.erpconnect.co.uk

CNH UK Factory Tour

Wednesday 20th March 2013, Basildon, Essex, 09:30 to 15:30 Winners of the World Class Manufacturing Award and The Manufacturer of the Year 2012. CNH UK will be hosting a unique one-day event at their plant in Basildon, combining a best practice site tour together with a deep dive development session to illustrate the 10 World Class Manufacturing Pillars that have helped them achieve world class status and contributed to these coveted award wins.

Caterpillar Building Construction Products Factory Tour Tuesday 30th April 2013 Desford, Leicester, 09:30 to 15:30

Caterpillar, winners of the People and Skills Award at The Manufacturer of the Year Awards 2012, will be hosting a unique one-day event combining a best practice site tour together with a deep dive session. For further information or to book your place, contact Benn Walsh on 0207 202 7485 or email b.walsh@sayonemedia.com

Future Factory â&#x20AC;&#x201C; Energy Conference

Wednesday 8th May 2013, The Hilton Metropole (NEC), Birmingham Volatile energy costs, security of supply and environmental responsibility has required many UK manufacturers to create and implement an integrated strategy focused on energy procurement, efficiency and security. The third Future Factory Conference of 2013 will provide delegates with the knowledge and expertise in developing their own successful energy strategy.

Lean Management Journals 4th Annual Conference 21st 22nd and 23rd May 2013, The Hilton Metropole (NEC), Birmingham

This yearâ&#x20AC;&#x2122;s conference will focus on how to create and sustain a culture of continuous improvement. Case studies and speakers will be asked to provide their insights into how they have supported a cultural transformation whether at departmental, plant or organisational level.

The Manufacturer and LMJ events feature key decision-makers, professionals and academics in the field. If you would like to get involved and have a unique story to tell - I would love to hear from you. Jon Tudor

Head of Events, The Manufacturer

Email: j.tudor@sayonemedia.com

Workforce and skills: Apprenticeships

Apprenticeshipsevolve MTA Member response to the Commercial Engineering Apprenticeship

MTA and AMRC have launched a new apprenticeship which responds to real business trends in manufacturing and the evolving job description of the modern engineer.

he job description of the average engineer has changed a lot in recent years. Now MTA and AMRC have launched a new apprenticeship which recognises the evolution. Some in industry complain that apprenticeship training, as delivered by many colleges, is too often a relic of a by-gone age, focusing on craft skills delivered on outdated equipment. Step in The Advanced Manufacturing Research Centre and the Manufacturing Technologies Association. Both are intimate with the very latest, and indeed future, developments in machine tools and automation and both have taken care to listen closely to the business needs of their members – particularly with regards to skills.

It’s a recipe of expertise, knowledge and facilities – AMRC is ‘tooled-up’ to the teeth with top of the range and sometimes unique manufacturing technologies – which has allowed the two organisations to launch a new apprenticeship pathway. A pathway fit to develop leading engineers with commercial capability – ready to compete in globalised markets. Graham Dewhurst, directorgeneral of the MTA, which represents several hundred precision engineering and technology companies in Britain, said: “There is a member need in our association for more suitable, modern skills. We need high trained salespeople, because now manufacturing is about customer solutions.”

The New MTA Commercial Apprenticeships, developed with the AMRC, is a great initiative for the industry and helps address the skills gap in training available. Having attended the launch event, I spoke with a number of other MTA members who will be putting individuals forward for this apprenticeship Simon Pollard, Managing Director, Kyal Machine Tools Ltd

Alison Bettac, director of training at AMRC, agrees and explained that this is why CPD and leadership are essential parts of the new Commercial Engineering Framework. “These [streams] were developed with companies such as GlaxoSmithKline and Rolls-Royce in mind. There is a technical need for leadership in industry as an integral part of professional training,” she added. The apprenticeship was launched at AMRC, where its off-the-job elements will be delivered, on February 8. Initial responses from industry have been very positive about the framework, applauding its strong technical foundations, supplemented by commercial focus and language skills.

Technical Sales Pathway The learning framework for the new Commercial Engineering Apprenticeship Year One

Year Two

Functional skills

Performing engineering operations level 2

Year Three NVQ level 3 Business / technical discipline

Engineering master classes Business awareness introductory classes

Level 3 Technical certificate – business / technical Employment rights and responsibilities level 2

Business master classes

Language, culture and international business ethics and methods Import and export law, regulations and protocols Creative thinking Teamwork Communication

Personal learning and thinking skills Problem solving Personal responsibility

Independent learning and thinking Leadership Equality and diversity

PLM

Suretank’s sure bet

a truly global company with manufacturing capabilities in Ireland, the UK, Poland, Thailand, China, Brazil and the USA. Suretank manufactures a variety of off-shore containers. In 2012 it found unnecessary costs were arising due to poor product documentation

Don’t accept traditional options for solving quality control issues in a growing company says David Keeley, engineering manager at container manufacturer Suretank. You may find changing the way you look at cost centres will present more effective solutions.

uretank is a rapidly growing company. In 2012 our business grew by 36% and in 2013 we are projecting growth of a further 25%.

Our success over the past decade has enabled us to invest in overseas manufacturing operations through a combination of acquisitions and joint ventures. We’re now

Optimising the Strategy for Change Problem

Cause

Solution

Enabler

Costs Due to Poor Product Documentation

Information errors Better product information management

PLM

Design errors

Document errors

Better product documentation management

PDM

With the biggest centres for costs due the poor product documentation in information management across the enterprise - not the product documentation itself - PLM rather than PDM became a priority for Suretank.

Growing pains The success of the company and the resulting growth presents Suretank with some big challenges as a manufacturing organisation. The transition to becoming a global company must be coupled with a strategy to enable the change without impacting negatively on the quality of our products and the services we already provide to customers. This necessitates becoming leaner and we are rapidly moving from a practice-based culture to a more streamlined process-based one. While the former culture served our customers well when we were a smaller company, the latter is required to sustain growth with accompanied continuous performance improvement.

Quality control Suretank’s growth has put, and is putting demands on every functional area within the organisation. There is an emphasis on eliminating incidents of poor product quality while also enabling all employees to become more efficient in their day to day activities. It’s a huge challenge and it is the responsibility of the Suretank technical management team to put in place a strategy that

IT in

Manufacturing: PLM

not only facilitates both, but can also be rolled out easily to the entire Suretank group worldwide. From a basic viewpoint one could say that poor product quality is a symptom of one of two things: Something has gone wrong in the processing of the physical product itself from manufacturing to delivery There are problems with the quality of the product definition data (drawings, technical specifications, bills of materials and other process outputs) In trying to eliminate problems related to the latter scenario, the solution that immediately comes to mind is PDM (Product Data Management). PDM applications manage the CAD documentation and EBOM (Engineering Bills of Materials) data and most applications also have visualisation, collaboration, configuration management and engineering change management capabilities. They are excellent at improving the quality of engineering documentation and generate efficiencies around the creation, searching, modification and consumption of engineering data. Design quality is also improved by facilitating standardisation, increased part re-use and enabling robust revision control. It follows, therefore, that implementing a PDM solution at Suretank should be the place to start in helping us meet our objectives. Indeed in my experience, this is exactly where most manufacturing organisations that have problems similar to Suretank’s would start.

Beyond product data – the real cost centres However, focussing on improving product data management may well be leaving bigger areas of inefficiency and cost untouched in the design to manufacture process. It became obvious that this was true at Suretank when investigating the costs of poor quality at that were attributed to ‘poor engineering documentation’. We found that, in 2012, almost 70% of the total cost resulted from issues that would not be solved by employing PDM. The ‘big ticket’ items were all related to problems with the management of product-related information between enterprise functions throughout the lifecycle of individual contracts. Examples include: Customer requirements were incorrectly communicated from sales to engineering Quality issues were not effectively communicated to the responsible engineer during the design process A customer change was not communicated to the correct person An engineer was not made aware of a customer preference Information related to a previous similar contract could not be found or was incorrect Not all contract stakeholders were aware of the most recent project delivery schedule

Suretank at a glance Turnover: €61m in 2012 Number of employees: 625 globally Key products: Offshore containers, specialist ISO containers, Cryogenic tanks Driver for IT investment: Costs associated with poor product documentation Budget for PLM implementation: £31k for first 2 phases of implementation (6 months)

While these issues ultimately manifested themselves in drawings, bills of materials and other documents, a PDM system would not have stopped them from occurring. The issues were caused by poor information management and would not have been addressed by using the kind of document management, bills of material and visualisation functionality offered by PDM. To gain control of these costhungry issues, we realised a PLM (Product Lifecycle Management) solution is required. Such systems provide management capabilities for product-related information and processes across the entire enterprise and beyond.

Matching requirement with budget and resource Suretank needed a PLM solution that was affordable, scalable, easily set up and maintained – we could afford no expensive system administration - and easily rolled out to all global sites. It was also important that the PLM application could be easily integrated with a PDM application at a later date. After a short evaluation process we selected the only solution we could find on the market that met our requirements – Autodesk PLM 360. It is affordable. It allows us to employ a ‘PLM first strategy’. It is scalable, and its cloud infrastructure means that it requires no system maintenance. It is available immediately and can be easily rolled out to all global Suretank

sites. Furthermore, when we were evaluating PLM 360, Autodesk provided us with a fully functioning PLM system within hours of requesting it for a three month trial free of charge. This allowed Suretank to practically consider its investment at no risk and no cost.

Early days Suretank is at the beginning of its PLM implementation – a process which will be managed in its entirety by just two of our mechanical engineers. As a cloud-based system, PLM 360 functionality is deployed through modular ‘apps’ which we can select for implementation as we need them. In February 2013 we went live with our first app – a problem reporting tool that allows users at all Suretank sites to report issues that need to be resolved. Later we’ll use this information to automatically spawn NCRs, ECOs, Tasks, and Audits – all within PLM 360. In March we plan to introduce apps that will manage customer product configurations right through the contract lifecycle with integrated change management. This will ensure that we’re always meeting our customer’s most upto-date requirements. We’ve got a PLM roadmap in place for the next six months. Beyond that we’re going to develop the application depending on business needs. We’re confident that once we start getting the rest of Suretank using PLM 360 they’ll be as excited about it as we are.

IT in

manufacturing

Pricing management hits the boardroom

Failing to keep up with a rising interest in pricing strategy will leave manufacturers sidelined as commoditised suppliers with eroding margins says Niels Skov, managing director, Europe at revenue management solutions provider Model N.

n today’s manufacturing businesses, optimising supply chain and production processes are recognised as strategic issues for the boardroom agenda. By contrast, until recently, pricing and profit processes have been among the least automated across manufacturing industry, with little or no visibility at C-level. Spread sheets, word documents and even pen and paper have remained dominant for rudimentary management of pricing plans and policies. As a result, it has not been unknown for sales staff in large multi-national businesses to casually offer discounts which have severely eroded margins. Not only can this push individual customer profitability below target, in the worst cases it can result in net losses. However, as the latest European Pricing Platform’s Pricing and Profit Optimisation Forum

It has not been unknown for sales staff in large multi-national businesses to casually offer discounts which have severely eroded margins

held in Cologne highlighted, the importance of optimising pricing and profitability strategies is undergoing a radical reappraisal. Attendance was up 60% on the previous year, and included a higher proportion of director-level attendees with responsibility for pricing issues.

Take control Conference debate centred on how to get key departments to provide the necessary visibility for senior management to take control. This represents a fundamental shift for many businesses and demands boardlevel sponsorship. But for those successfully undertaking such transformational change, the rewards are proving immense. This was emphasised by the findings of a survey of attendees, which showed that more than one quarter (27%) believed greater oversight at senior level – getting pricing on the CEO’s/ CFO’s agenda – would ensure corporate performance was both more competent and effective. This was reinforced by the further finding that almost one half (46%) of respondents believed such improvement also required a structured and co-ordinated pricing team, an initiative which can only be effective with boardlevel sponsorship. Furthermore, many of the manufacturers attending the forum operate indirect sales models. How to drive different aspects of pricing execution to enable distribution partners to become true value-added resellers, rather than simple box-shifting logistics companies, was therefore a hot talking point. Attendees were seeking to create truly collaborative demand generation through more effective management and incentivisation.

How do we do it? It is fundamental to work with good quality data. Across business departments, there is a tendency for isolated, selfoptimised islands to appear in the

absence of consistent processes or support tools. This can result in momentum for change – but too often in the wrong direction. Centralising the process of setting and executing pricing and profit strategy demands a re-design and re-engineering of business processes. For many businesses facing this challenge, a good place to start is to achieve the necessary degree of control. This means putting the right technology in place as part of a defined process to record all aspects of pricing transactions. Not only will this guarantee full auditability, it will provide control and consistency over rebates, free goods, discounts and other aspects of pricing. Connect this with customer and product master data, and you can ensure traceability for every pricing deal.

Behavioral change Typically, this will require a change of behaviour and mindset throughout key departments. A systematic approach is needed to help staff move away from instinctively thinking about discounts, towards ensuring the delivery of value added services. This requires pricing teams to take a strategic view of how customers define value and how they can deliver it in a way that makes commercial sense. Enabling a pricing team to think in this way relies on building an in-depth understanding of how each customer is trying to secure competitive advantage and then providing one or more of the key components in achieving this goal. Ideally you should aim to make your products and services embedded and indispensible in realising competitive advantage as perceived by the customer. Become a strategic partner. The increasingly stark alternative is to go down the road of discounts and rebates, eroding margin as a commoditised supplier, offering little or no real differentiation.

ITnews... ERP

Cable manufacturer finds ‘gap analysis’ drives renewed ERP ROI The average user, apocryphally, makes use of just 5% of a spreadsheet program’s functionality. Something similar is sometimes said of ERP systems, where manufacturers upgrade to the next version without fully exploiting the features contained in their present version.

Such a concern lay behind a decision by wiring harness and cable assembly manufacturers Swansea Industrial Components to ask Syspro specialist K3 to confirm that the business was making best use of its existing Syspro system. The result: a ‘gap analysis’, showing those Syspro modules that were being used successfully, and those modules that were not being fully exploited. Two years on, the analysis is still paying dividends,

with the company reporting increased productivity and profitability from the procedure. “We still pick up the gap analysis report in our management meetings and continue to identify ways to further streamline the business through better use of Syspro,” says Clive Smith, financial controller at Swansea Industrial Components. One of the areas identified for improvement: the use of Syspro reporting. By adding modules, relates Smith, the company was able to take advantage of Syspro Reporting Services using Crystal Reports. Other improvements identified areas where the company could further automate particular processes, freeing up employees for more important tasks. “By identifying areas of the software we were not utilising fully, we have been able to save administration time and increase the profitability of our business,” sums up Smith.

ITNIBS

Syspro performed a gap analysis for Swansea Industrial Components to highlight suboptimised functionality in its K3 ERP system

Construction and agricultural equipment manufacturer JCB implemented Infor Enterprise Performance Management, to make it easier for the group’s business units to report and share business critical information in a timely manner. With a turnover of £2.7 billion, 10,000 employees, and manufacturing operations in 22 countries including Brazil, China, Germany, India, the UK and the US, JCB has long since outgrown its original Staffordshire roots. Web-based, the Infor Enterprise Performance Management replaces a spreadsheet-centric system, and permits users from across JCB’s global business units to upload financial information directly. “Infor EPM is easy to implement and intuitive to use,” said David Brown, director of group finance at JCB. “As we operate in a fast-changing industry, it is particularly important that we can produce timely and accurate information for the JCB board.”

IT in

manufacturing

IT eye Dan Roberts at analyst firm Cambashi considers traceability in supply chains in the midst of the horse meat scandal. Horse meat contamination of beef products in Europe has raised a number of questions. Chiefly, “don’t companies track which batches contain which shipments of meat?” alongside “each slaughtered animal has to have a passport doesn’t it?” I recall being told a few years ago that food companies would be able to show you a picture of the animal that went into your pie, if you wanted. Beef farms can track which fields their cattle graze, using RFID tags, so they can optimise their diets and supplement them if necessary. And, to an extent, this level of traceability applies to supply chains too – but only for simple supply chains and high quality meat products. For the low-cost food products, supply chains have become so complex that full traceability becomes almost impossible. It is a by-product of today’s supply chain optimisation strategies. The retailer wants to pay less to its suppliers for the

Alexir Packaging, one of the UK’s leading direct food carton manufacturers, selected the Epicor AVP packaging ERP solution from Epicor Software Corporation. Privately owned, Alexir Packaging produces approximately 150 million cartons per year, as well as operating a specialist cosmetics, toiletries and pharmaceutical packaging service. The Alexir Packaging rollout will be Epicor’s first complete end to end implementation of the Epicor AVP suite in the UK. “It was evident that we needed a business system that could streamline our operations, increase productivity, and provide business-critical information to aid us in making informed decisions,” said Robert Davison, managing director at Alexir.

same products; those suppliers need to make savings in their already streamlined operation, so they pass the cost reduction burden onto their suppliers – ground beef producers for example. The ground beef suppliers need to find a cheaper source of beef meet cost targets; the abattoirs then need to pay less for their beef cattle. But if farmers are unable to sell them cheaply enough, there is an impasse. In this case, it appears that horse meat that was not able to be sold as horse was passed off as beef in order to make those savings. Whatever the motivations, there is still the issue of how the value chain is optimised. If beef farmers are unable to produce beef cheaply enough to make a profit at market, they will eventually stop producing beef. This would reduce availability, pushing the price up. This price rise would need to filter all the way to the consumer in more

Oracle announced the general availability of MySQL 5.6, the world’s most popular open source database. With increased performance, scalability, reliability and manageability, MySQL 5.6 is intended to help users meet the most demanding application requirements, says the company. Significant improvements have also been added to the no-cost, freely-downloadable MySQL Community Edition, including simplified query development and faster execution, better transactional throughput, and enhanced instrumentation. “The MySQL 5.6 Release Candidate received great feedback from the community and helped us to efficiently mature the technology to announce General Availability,” said Tomas Ulin, vice president of MySQL Engineering.

expensive products. It’s an unsustainable model based on optimising local value chain nodes. You might expect the existence of agents and meat traders in the current model to link the local nodes and thus help optimise the entire chain. But, apparently, even wellintentioned suppliers can be caught out. Perhaps chain-ofcustody systems will have to be allied with more visibility of risk and reward across the whole industry network. The goal is clear enough - a sustainable model in which each supply chain member can make a profit by adding value, not by compromising quality. @Cambashi

Enhanced decision making and cost reduction are the main drivers of predictive analytics and process simulation in 2013, according to manufacturers polled by simulation vendor Lanner. Its research, which was conducted among manufacturers across a range of industries, shows 72% of companies pointed to optimised processes as the main reason for using the technology. Cost savings were cited by 52%, and tackling complexity was identified by 49% as a driver for deploying predictive simulation capabilities. In terms of return on investment, 59% of the manufacturers said that simulation had helped their businesses to remain competitive by cutting costs, while 52% reported an increased confidence in decision making. “Building better processes in order to strip out costs from a business has overtaken innovation as a driver of simulation,” summed up David Jones, chief executive of Lanner.

Have your say at www.themanufacturer.com

WHAT WILL YOU GET FROM The Global Manufacturing Festival 2013?

he Sheffield City Region has a deep and broad range of manufacturing expertise, centred on advanced engineering, materials and metals technology. Think of the following organisations: Tata Steel, Rolls-Royce, Sheffield Forgemasters, AESSeal, Firth Rixson, Outokumpu, The Advanced Manufacturing Research Centre with Boeing, Surgical Innovations, Newburgh Engineering and many more. These companies and others are key parts of supply chains for critical components in global markets like aerospace, nuclear and renewable energy and medical applications. From April 17-19, the Global Manufacturing Festival will provide a unique opportunity for many types of manufacturing companies to: “understand the supply chains of these high value end products and how to access them”. Exposure to companies such as Boeing, Rolls-Royce, Siemens and Tata will make the criteria for entering these supply chains much more transparent.

AEROSPACE

Regional business support: Sheffield City Region LEP

RENEWABLES

MEDICAL

NUCLEAR

The Sheffield City Region Inward Investment team supports SMEs through: Business Rate Relief and Enhanced Capital Allowances for plant and machinery on the UK’s number 1 Enterprise Zone for Modern Manufacturing Local expertise and introductions to relevant networks through the Local Enterprise Partnership covering nine Local Authority areas Property search and location tours for businesses looking to expand or locate in the region Soft landing packages, routes to funding and business aftercare support

The University of Sheffield: Advanced Manufacturing Research Centre with Boeing Through the AMRC with Boeing, Tier 1, 2 and 3 sponsors can access some nearly unique technical facilities for research and development in the engineering of metals and composite materials, for applications in aerospace, nuclear & renewable energy and machining for other power generation applications. Non-sponsors can also access some AMRC research facilities via the Technology Strategy Board.

Organised by:

Event Preview GMF 2013

Legal advice: Nabarro LLP Renewables With broad experience across conventional and alternative energy sectors, Nabarro is well-equipped to advise SMEs on all aspects, from financing, construction and operation, to regulatory, licensing and policy issues. Nuclear Nabarro is one of the few UK law firms with a proven track record in the intensively regulated nuclear sector. Expertise cover complex planning, procurement, engineering and supply chain strategies. Healthcare From IP licensing and brand protection to venture capital arrangements and equipment supply contracts, the Nabarro specialist healthcare team has breadth and depth. Aerospace In-depth experience of working with precision engineering and manufacturing companies makes Nabarro well-placed for supporting SMEs in the aerospace supply chain.

Business process consultancy: Huthwaite International Medical The complexity of the healthcare market calls for a range of skills to ensure companies create value for their customers and build lasting business. Huthwaite provides these value-building skills in sales, negotiation and outstanding service. Renewables When initial investments involve high upfront costs, a company must build a strong, all-round value case with its customers. Huthwaite helps SMEs and manufacturers articulate persuasive propositions and make the profitable sale. Nuclear Buyers demand to work with manufactures they can trust: ethical, reliable, safe, precise and measurable. As Huthwaite’s values too, we develop your skills to help SMEs generate business from them. Aerospace Long sales cycles and multiple stakeholders put a premium on the ability to sell consultatively in complex circumstances. Huthwaite provides the behavioural and process skills to sell and negotiate in this challenging environment.

Tata Steel Regional business support: Rotherham Investment and Development Office (RiDO)

For over 60 years Tata Steel has been supplying high-integrity steels to manufacturers in Aerospace, Oil & Gas, Industrial Bearings and power generation sectors. These advanced steels, delivered as ingot, bar and cut pieces, are used in production of following components: Aerospace

RiDO offers a comprehensive range of support services to investors: High quality property options HR consultancy service Access to finance A funded Soft Landings programme for international companies Range of Enterprise Zone Incentives.

Gas turbine engines, landing gears, controls and aero structure components Oil and gas For deep down drilling, drill bits, mooring chains and other drilling equipment

Industrial automation and power gen advice: Siemens Siemens works throughout the manufacturing supply chain, as a manufacturer across the UK and working with manufacturing partners too. Many of the businesses Siemens supports are SMEs and they form the backbone of the UK economy - an integral part of the British supply chain that is destined for strong growth over the next 10-years as ‘industry’ seeks to boost British exports. “We take pride in our collaboration with SMEs, whether by increasing efficiency through automation or helping small businesses access finance to make their plans a reality,” says Siemens’ Jon Stewart. Through collaboration and investment we believe that this market will be a central selling point for UK plc.”

Power Generation (Coal, Oil, Nuclear and Renewable): For gears, bearings, bolts, fasteners and other critical components.

Headline Sponsors:

Britain’s biotech

boom Industrial biotechnology is growing, creating new jobs and radically altering expectations about the world’s ability to move away from petrochemical and fossil fuel reliance. Tom Moore explores the brave new world of biomaterials.

s the world seeks to wean itself off fossil fuel, there has been a frantic search for alternative solutions. New technology often creates a wave of excitement, shortly followed by a period of disappointment that the hype didn’t manifest as we’d imagined. The application of biotechnology for industrial needs is already worth £4bn to the UK economy. It is applied in a broad range of everyday activities, with enzymes used to break down long chains of starch to reduce the time needed to bake bread and reduce the temperature at which we wash our clothes. Industrial biotech is revolutionising the pharmaceutical and healthcare sectors, slashing CO2 and discovering new materials for innovative products. The chemistry allows manufacturers and consumers to do more with less, but the Government’s prediction that the global market for industrial biotech will reach £150 billion by 2025 is also based on its power to replace materials deriving from oil. The UK has set a target to take a £12 billion slice of the global pie through the creation of the Industrial Biotechnology Innovation and Growth Team. It has also set up a £12 million demonstrator facility in Wilton, Wiltshire.

Biotech could reduce the amount of destruction caused, oil exploration

Green dreams

Harnessing industrial biotech is key to future of a better balanced, more sustainable manufacturing base Michael Fallon, Business Minister

Biotechnology isn’t just potential, it’s a reality. Tyre manufacturer Goodyear has developed a process to manufacture an alternative to petroleum-based isoprene, which consumes seven gallons of crude oil for each gallon of isoprene, with US industrial biotech firm Genencor. With 800,000 tonnes of isoprene used every year, over 70% of which is used to make rubber tyres, a car’s carbon footprint is sky high before you even turn on the engine. Genencor uses a variety of feedstocks (such as sugar) to mix with enzymes that ferment to create bioisoprene. Goodyear will swap this with isoprene for all tyre production in 2015, slashing its use of petroleum-based materials. According to the EU’s advisory group for bio-based products, one third of chemicals will be produced from plants and food

rather than petro-chemical feedstocks by 2030. But there are huge risks as well. Sir Jonathon Porritt CBE, author of the report Sustainable Returns Industrial: Biotechnology Done Well, says that “The food versus fuel debate around first generation biofuels is as alive and current as ever and fears about GM are never far away.” Sir Jonathon argues that for the UK to be at the forefront of Industrial Biotechnology, “companies should be more open about how their products are made,” so that bio technology isn’t smeared with a brush of fear. Europe already holds the leading position in the development and production of enzymes (with Denmark out in front), and is strong in biochemicals and some biopolymers. However, countries are tussling to get ahead in the bio race. With the aim of creating green jobs, the US Department of

Centre for Process Innovation

Manufacturing Technologies: Industrial Biotechnology

Energy has committed more than $1.5 billion (£960 million) for commercial-scale bio-refinery demonstration projects. Brazil and China have similar investment programmes. But despite this, the lure of British scientists is tempting huge investment from companies. Pharmaceuticals giant GlaxoSmithKline has invested £500 million in a new biomanufacturing facility in Cumbria and other companies in the sector are creating new drugs (such as Dr Reddy’s) at a time when drug patents are expiring.

Vanity fair The pharmaceutical sector is leading the way, with Viagra held up by Pfizer for its green credentials after it created a new reaction process that cut out a number of polluting materials and reduced waste by 75%. Enzymes and other biological organisms can perform industrial processes with significantly less energy, without the use of aggressive chemicals and with less waste, compared with traditional manufacturing systems. Industrial biotech doesn’t only replace oil-based chemicals but can create new possibilities. Yorkshire-based chemicals group Croda, which also has a large factory in Cheshire, has undertaken an ambitious series of acquisitions to boost the impact of biotechnology on its business. “Over 10% of raw materials are now bio-based,” says Dr Surinder Chahal, research and technology director at Croda. Dr Chahal says that there is a behaviour change among consumers to become carbon neutral. The company’s hair softeners and skin lightening and moisturising products sit within a booming marketplace as more of the world’s population gain disposable income to spend on vanity products. One market research firm reported that sales of skin lightening creams have outstripped those of Coca-Cola in India as people try to replicate the look of Bollywood stars. O.D.A.white, produced by Croda’s subsidiary Sederma,

The UK has set out to take a £12 billion slice of a global biotech pie valued at £150 billion by 2025

The incredible seven

usiness Minister Michael Fallon has set up a £140m pot for biotech and six other technologies. While speaking at a recent event, Leading IB: A UK Showcase, Mr Fallon described how industrial biotech is “opening up new opportunities for products that were not possible to make using conventional chemistry.” The minister added that “the UK’s success in harnessing industrial biotech is key to future of a better balanced, more sustainable manufacturing base.” Ian Fortheringam, CEO and co founder of biotech firm Ingenza, noted that “predictability in fermentation scale-up is a major hurdle.” But transforms vegetable acid into dioic acid, a main ingredient for lightening skin. Croda has set up chemical farms where it “cultures plant cells so that it doesn’t take up farmland,” such as natural proteins that make peptides for hair conditioner. Biotechnology can extract value from something with no value. When you drink a litre of orange juice there is an equivalent volume of waste. Dr Mark Gronnow, process development manager at the Biorenewables Development Centre, has helped to create a process to extract value out of orange peel. After sending microwaves though it (and this even works on a small scale with a conventional microwave), the resulting liquid contains limonene and a-terpineol. What are these? Some of the

despite these obstacles big companies are investing and start-ups emerging. In the face of challenges to this modern sector Ian Shott, chair of Industrial Biotechnology Leadership Forum says, “there is a new industrialisation based on biotechnology.” With a large amount of innovation stemming from new materials, industrial biotech isn’t an isolated sector of growth but a technology that will undoubtedly feed through the whole of industry. Mr Fallon declared that “the development of industrial biotech across chemicals sector can enable the transition from a petroleum based economy to a bio based economy.” Let’s hope he’s right. gobbledegook ingredients listed on the back of perfumes, cosmetics and cleaners. Biome Bioplastics, which makes polymer from potatoes in the UK, is one of a number of companies making green plastic. Although manufacturers are tentative in using the material in expensive machines, the early signs are that biopolymer does no damage. With rising oil prices and pressing environmental concerns, Biome Bioplastics’ CEO Paul Mines says that manufacturers are increasingly seeking viable natural alternatives. “Modern bioplastics can already be used in a wide range of sometimes-surprising applications, from phone cases to flags and packaging, but with emerging technologies we can take this even further.” @thomasmoore88

R&D investment

Investing for Growth The R&D challenge Growth

After examining strategies to grow through new production processes and customisation in January, Peter Russell, head of RBS manufacturing and industrials, turns the spotlight to exploring growth opportunities through investing in three key areas of R&D, which can enable UK manufacturers to keep pace with their international competitors.

istorically, R&D budgets were among the first casualties in economically challenging times. Encouragingly however, UK industry appears to be undergoing a research and development renaissance, perhaps in acknowledgement that continuous and, in particular, anti-cyclical investment in R&D is crucial to corporate growth and the global performance of UK manufacturing.

R&D is gaining momentum In a recent RBS survey, conducted as part of a wider report into the Future of UK High Value Engineering (HVE), almost all (98%) of those surveyed agreed that R&D is crucial to growth, and the survey results showed that manufacturers are clearly prepared to back up these sentiments with substantial amounts of capital. Three quarters (78%) invest up to 20% of their turnover in R&D, and nine out of ten (89%) have an R&D budget of between 1% and 59% of their turnover. Corporate forces are joined by government initiatives, this includes The Technology Strategy Board which has doubled its direct HVE innovation investment to around ÂŁ50m a year and, in 2010, announced the establishment of seven socalled HVM Catapult centres. These are designed to support UK manufacturing by allowing companies to access equipment and expertise that would otherwise be out of reach, providing R&D resources and facilitating access to new funding streams.*

Asia forging ahead in high tech manufacturing In comparative terms the overall spend on R&D in the UK, relative to GDP, has been steadily weakening over time and remains concentrated in the hands of relatively few very large firms (The Council for Industry and Higher Education, March

2012), whilst our international competitors, especially in Asia, are further gearing up for growth. In 2011, for the first time in history, total R&D spending in Asia Pacific moved ahead of R&D spending in the US with Asia Pacific countries accounting for 36.7% of the global spend, the US for 36% and Europe for 27%*. Additional threats to Europeâ&#x20AC;&#x2122;s established and sophisticated manufacturing base arise from the likes of Brazil and China whose governments launched during 2011 the latest in a succession of manufacturing plans, which are explicit in developing sustainable, high tech manufacturing industries whilst downgrading and moving away from the high volume, lower quality goods end of the spectrum. For the UK to gain a more prominent position on the global manufacturing stage, UK manufacturers need to commit to a sustainable programme of investment in three key areas of R&D, which will help drive their future growth: new product development, resource efficiency and materials integration.

New product development â&#x20AC;&#x201C; collaboration and speed matters Competing both domestically and globally requires a continuous focus on developing new products. Both the telecoms and food industry come to mind when looking at new product development strategies. Regulatory pressure, such as the need to reduce sugar or salt content in products has added to the competitive pressure for new or reformulated *RBS The Future of UK High Value Engineering report, November 2012

Investing for Growth - RBS products in the food industry. Similarly Nokia or Blackberry make for interesting case studies in how revenues and market share can be dramatically influenced by product design and competitor activity. “Design, prototyping and production of new products are critical areas of investment if UK manufacturing is to grow,” Roy Bawden, director of RBS Manufacturing & Industrials, points out. “The costs associated with these activities can be significant and companies are finding innovative ways of meeting this challenge.” Collaboration within the company as well as with customers and supply chain partners spurs new product development (Forbes Insight/WIPRO, 2012). Toyota’s kaizen or ‘continuous improvement’ methodology is increasingly being adapted to support improved product focus in a company. Product development kaizens bring together engineers, marketers and suppliers to problem-solve the weak points of a product and further develop strong features, applying them to other product, market or customer groups.

Resource efficiency Resource efficiency plays a decisive role for manufacturing-competitiveness and in saving costs. A number of resource efficiency initiatives showcase UK manufacturer’s commitment to achieving both sustainable and environmentally friendly production of goods whilst improving bottom line earnings. One example is the Resource Efficiency Action Plan (REAP), administered by Composites UK. REAP aims to encourage an improvement in the resource efficiency of composite products and materials through a combination of primary resource consumption reduction, material substitution, waste prevention through design and reduced product damage (Composites UK 2012). With 7,400 plastics companies in the UK and an industry turnover of approximately £17 billion – £4.5 billion in exports - the British Plastics Federation is also focusing on the topic and is funding six major R&D projects. These aim to help its members further develop their manufacturing processes and master new techniques to not only match UK and EU Government targets for reducing waste and increasing energy efficiency but also to help create competitive advantage by providing exclusive access to project data thereby stimulating further innovation. Ongoing projects include researching recycling solutions for Expanded Polystyrene and Polycarbonate and to the development of a plastics pipe system using novel technology which can be used for heating, under floor and drinking water applications (British Plastic Federation, 2012).

A high profile example of this is the use of such materials in Boeing’s 787 passenger jet, constructed with a high proportion of composite materials. The 787’s three plastic composite fuselage sections offer superior strength and allow the passenger cabin to withstand higher pressurisation. Maintenance costs are indicated to be 30% lower than for a comparable conventional aircraft and the all important fuel costs are estimated to reduce by 20% (British Plastic Federation, 2012). After weathering the worldwide recession, the global composites market – with 30,000 composites applications worldwide - registered double-digit growth in 2010. Although the pace of the market subsided in 2011, it is expected to regain pace and reach US$29.9 billion by 2017 with a compound annual growth rate (CAGR) of 5.4% over the next five years (Lucintel, April 2012). A recent study from Lucintel says that the Asian region is the largest growth area for the composites industry and it is expected to consolidate its leadership. North America and then Europe will follow as key composite markets. UK manufacturers are gearing up: The Composites Leadership Forum has been formed to deliver the UK Composite Strategy which sets out how the UK should build on the foundations of a successful composites sector in the UK and contribute to economic growth in a rapidly developing global market. A major milestone was the opening of the National Composites Centre in Bristol, which provides world class R&D and manufacturing capability to all UK composites companies.

R&D: no turning back R&D has long been a ‘must do’ for sustainable growth and corporate success. The R&D quartet of new product development, resource efficiency and material integration present an exciting opportunity to improve bottom line, reputation and global competitiveness - all of which are vital if the UK really is going to stay ahead. For further insight into how manufacturers are thinking ahead to stay ahead please visit www.rbs.co.uk/futureofukhve.

To find out how RBS can support your manufacturing business, please contact:

Peter Russell Head of Manufacturing & Industrials, RBS Corporate & Institutional Banking T: (0)20 7672 1007 E: peter.russell@rbs.co.uk Roy Bawden Director Manufacturing & Industrials RBS Corporate & Institutional Banking T: (0)20 7672 1082 E: roy.bawden@rbs.co.uk

Material integration – composites achieve double-digit growth A major driving force behind material integration has been to produce composite materials with improved specific mechanical advantages over existing materials.

FIND OUT NOW IF YOU ARE ELIGIBLE FOR A REFUND Could you be one of thousands of Midlands based manufacturers overpaying corporation tax?

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THE PROVEN ROUTE TO YOUR MAXIMUM REFUND

Finance and Professional Services: Tax

How lean is your company tax bill?

fter 20 years working as a FD for companies ranging from SMEs to blue chips I launched Myriad Associates to provide fully out-sourced services for business tax. I can honestly say that the opportunity for investing in R&D has never been better, especially for start-up businesses. With a little bit of careful tax planning it is possible to mix and match the below HMRC tax incentives in order to deliver an outstanding funding package – here’s why.

The Patent Box New, fresh and full of promise. The PB makes its debut on the April 1 and it promises to be as big as the R&D Tax Relief Scheme The PB will be phased in over a 5 year period and ultimately will provide a reduced corporation tax of 10% on qualifying IP profits Revenues from worldwide royalties, license fees and sales of products incorporating patented technology will be allowable The PB regime benefits companies that have qualifying Patent rights that derive a profitable income stream

RDAs (Research and Development Allowances) The undiscovered opportunity. RDAs represent an excellent opportunity for companies that have built/ refurbished development facilities and spent money on plant, machinery, fixtures or fittings associated with R&D activities RDAs provide for an uncapped 100% capital allowance deduction. This is of great benefit to companies that have invested in fixed assets associated with R&D activities especially when you consider that Industrial Building Allowances have been phased out and Plant & Machinery Allowances are deducted at only 18% on a reducing balancing method The actual monetary value of claiming RDAs depends on your company’s cost of capital. However, based on a cost of capital of 5% over a 25 year period, RDAs represent a net present value saving of 28% over P&M allowances

The current level of tax incentives from HMRC is unprecedented and with the Patent Box launching April 1, there was never a better time to review your company tax affairs than now says Barrie Dowsett, CEO, Myriad Associates

R&D Tax Relief Scheme A mature tax incentive that is getting better with age. The R&D Tax Relief scheme was born in the year 2000 and now provides over £1bn of support per year to over 10,000 companies The R&D Tax Relief scheme rewards both SMEs and Large Companies that undertake qualifying development activities. Loss making SMEs can also benefit by receiving a tax credit payable in return for surrendering tax losses Eligible costs include staff wages, agency workers, sub-contractors, materials, consumables and software expenditure that is spent on qualifying development activities HMRC have recently boosted the tax relief levels (from 1st April 2012) and it is now possible for SMEs to recover back corporation tax at a rate of 25p to 30p per £1 of eligible costs

SEIS (Seed Enterprise Investment Scheme) Aimed at small SME’s but delivering a big punch. SEIS is a great opportunity for a start up company that has been trading for less than 2 years, has total assets lower than £200k and up to 25 employees Each shareholder that has less than 30% shareholding can obtain a 50% income tax relief on their investment. Therefore a 25% shareholder investing £37,500 would obtain income tax relief of £18,750 A company can raise up to £150,000 in total under the SEIS incentive The SEIS works incredibly well with the R&D Tax Relief scheme and when combined together can provide up to 75% of a high-tech start up funding needs The SEIS big brother EIS (Enterprise Investment Scheme) caters for larger funding requirements although the tax incentive is not as generous

Tribunal

trouble 1 Employment Tribunal claims are a fear-factor for many businesses, and the Government says this fear is stifling job creation. By making it harder for employees to lodge claims, it hopes employers will be more confident in hiring new workers. But will proposed changes have a real impact on UK unemployment? Tim Brown reports.

86,000 claimants issued employment tribunal (ET) claims in the year ending March 31 2012, a drop of 15% on the year before and a 33% drop from 2009-2010. Though because claimants can bring more than one claim, there were actually 321,000 jurisdictional claims lodged. On average only 25% of claims get as far as a tribunal and the rest reach a settlement or are withdrawn. But even so, those headline numbers are staggering and an understandable concern for employers. With approximately 62 million workers in the UK, that equates to 3 claimants per thousand workers. The Government picked up on employer concerns in its consultation paper Ending the Employment Relationship. “Such concerns are driving various Government proposals to give employers additional tools to hire

and fire staff more easily,” says Nikki Duncan Partner at law firm Michelmores. “The combination of these changes is undoubtedly likely to make claimants think twice about lodging claims.” These tools include: The planned early introduction of capped compensatory awards An increase in the minimum period of employment for unfair dismissal to two years (already in place) The introduction of Employment Tribunal fees The requirement for mandatory consultation with the Advisory, Conciliation and Arbitration Service (Acas). However, it is unclear whether these changes will actually result in the outcome they have been designed to achieve: more jobs. Paula Whelan, employment law partner at law firm Shakespeares, says that in its current form, the unfair dismissal claims process is

Finance

and Professional Services: Employment Tribunals

often perceived as being weighted in favour of the employee, but that the changes should help reduce the risk for employers. “Access to justice is still a priority for those bringing more serious allegations,” says Ms Whelan. “But the combined effect of the changes, particularly the requirement for employees to have two years service in order to proceed with the claim, undoubtedly discourages time wasters. At a time when all employers are focused on cost management, this should help encourage more hires.”

Capped compensation Currently the maximum compensatory amount for unfair dismissal is £74,200. The proposals, which come into force this summer, suggest that the maximum payment will be one year’s pay or £74,200, whichever is the lower. Considering the national average salary is approximately £26,000, this will essentially be the cap on unfair dismissal payments for most workers. On the other side of the coin, less scrupulous employers could be tempted to unfairly dismiss higher paid employees because it is cheaper than going through the proper disciplinary procedure.

Tribunal fees The fees due to take effect this summer will include a £160.00 charge to lodge a claim plus a £230.00 hearing fee for straightforward cases such as those for notice pay. A £250 to £950.00 fee will aplly for more lengthy cases such as unfair dismissal. There has been a discussion about an exemption for those on low incomes but this would mean the original intentions behind the fees may become diluted. The fees might achieve the objectives of stimulating job growth, but they might also deter genuine claimants who, having lost their job, dare not risk, or cannot afford to pay fees. According to David Beswick,

A decision to settle tends to be reached when you are actually staring down the barrel of a day in court David Beswick, partner at Eversheds LLP

partner at Eversheds LLP, most employment tribunal cases settle in the last three days before a hearing. He says that the idea of bringing the hearing fee in is “to get those settlements a greater distance than four weeks before the hearing date to help the efficiency of the tribunal service.” Mr Beswick says he believes in the merits of the system but is not convinced it will help bring settlement dates forward. “Everybody believes that early settlement is the right way for everybody to go. However, as in most litigation, a decision to settle tends to be reached when you are actually staring down the barrel of a day in court.” Moreover, Tony Burke, assistant general secretary at Unite the Union, says the tribunal fees might actually reduce the instances of settlement and further clog up the tribunal process. “It’s going to make it much more difficult to achieve pre-tribunal dispute resolution. If people are convinced by their cases and have to put money up they are less likely to reach a compromise. What you’ll find is that people are more likely to go all the way to the tribunal.” Mr Burke says that any suggestion that the fees will weed out vexatious claims is “nonsense”. He says that the existence of such claims are highly overstated.

Acas early canciliation Whether Burke is correct or not it is certainly true that some tribunal cases could be better dealt with outside of the tribunal system. Independent research has found that the Acas helpline helps avert around 14,000 employment tribunals a year. Last year this voluntary helpline dealt with 925,000 calls from employers, employees or their representatives. The introduction of mandatory consultation with Acas will mean parties will initially be encouraged to work through their problems via mediation.

There were

186,000 ET claimants in the year to March 31 2012.

Where a solution cannot be found, parties will then be assisted in reaching settlement, rather than progressing immediately to tribunal, as a part of the Acas Early Conciliation Scheme. This should reduce the number of claims that actually require a tribunal at all. However, this system does seem to shift the workload from the Tribunals to Acas and doesn’t suggest to employers that they will be less likely to have complaints lodged against them. Indeed some employees might see the Acas route as an easier option to make an initial claim for settlement.

Will the changes help get more people into work? All the upcoming changes to the employment tribunal rules are designed to lower the risk of tribunal costs for employers by discouraging frivolous claims. The frequency of such vexatious claims is relatively low, but Acas should help reduce the number of tribunal cases by helping to resolve cases before the tribunal stage. However, it is feasible that legitimate claims could become easier to lodge through Acas. While the risk of tribunal costs would be reduced, the potential settlement costs could be even greater under the new system. The real question is whether these changes will actually result in the creation of more jobs. When asked, the response from manufacturers has been mixed and it appears that only time will tell. If the employment tribunal measures fail, the introduction of fees will reduce worker access to justice while providing little benefit to employers. @BrownNewsUK

Cranfield University presents

National Manufacturing Debate 2013 4th Annual Debate

Monday 20 May & Tuesday 21 May National Strategy for UK Manufacturing • How could manufacturing contribute 20% of UK GDP by 2020? • Can rebalancing the economy and growing UK Manufacturing happen without a National Strategy? • What should a National Strategy for UK Manufacturing include? • Join us to hear from industry leaders and network with key manufacturing professionals from a range of sectors. • 20 May: 14:00 – 17:00 Tours of Cranfield’s facilities • 21 May: 09:00-16:00 Keynote presentations chaired by Lord Alec Broers Manufacturing Debate presented by Maggie Philbin (BBC Reporter and CEO of TeenTech) Keynote speakers and panel members are: • Adam Buckley, Managing Consultant, The Manufacturing Institute • Mark Claydon-Smith, Lead - Manufacturing, EPSRC • Dick Elsy, CEO, High Value Manufacturing Catapult • Michael Fallon, Minister of State for Business and Enterprise • Brian Holliday, Divisional Director - Industry Automation, Siemens plc • Martin McKervey, Partner, Nabarro LLP • Peter Marsh, Financial Times • Mike Rigby, Head of Manufacturing, Transport & Logistics, Barclays

Book here:

www.national-manufacturing-debate.org.uk

Media Partner

registrations are free Sponsors

Regulation update: HMRC Reporting

RTI goes live

n April HMRC enters the final stage of the Real Time Information (RTI) implementation. Put simply, RTI is a new system for reporting to HMRC, employee pay, PAYE, national insurance contributions (NIC) and other prescribed details. Rather than submit these details at the end of the tax year, through a P35/P14 return, employers will be required to submit the data to HMRC every time a payment is made to the employee or the employer remits the tax and NIC to HMRC. All employers will be required to be live on RTI by September 2013. As the final employers go live between April and September, the focus is now on how to process the submissions in a business as usual situation. For many manufactures this will involve changing their current processes and procedures:

New joiners With the removal of the P46 form, if a new joiner does not submit a P45 how will the employee answer the questions which were formerly on the P46? How will the payroll department determine the tax code to be operated? Many Manufacturers are updating their new joiner

Are manufacturerâ&#x20AC;&#x2122;s prepared to operate under HMRCâ&#x20AC;&#x2122;s new real time information systems for employee pay, PAYE and national insurance reporting? Rebecca Mullins, payroll consulting lead at Deloitte looks at what compliance requires.

forms to include the questions which were previously on the P46.

Completeness of employee records

All employers will be required to be live on RTI by September 2013

All employee data will need to be set up correctly before their first payment. No longer will payroll administrators be able to set up partial records just to be able to pay the employee and complete the record at a later date. For a weekly payroll this will mean there is a very short window to collect all the required details from an employee. If the RTI submission file does not contain the required data for an employee the whole file will be rejected!

Submission of timesheets For positively paid employees in receipt of Universal Credits (UC), if they do not submit all of their timesheets in a month and instead submit more the following month, this will have an impact on the amount of UC they receive each month. This is because the RTI data submitted to HMRC is shared with DWP who will be able to calculate employee UC in real time. Employees and the payroll team will need to be made aware of this change and ensure that communications are issued so

that employees know how and when to submit their timesheets and the implications of missing the cut off date.

Submission of RTI files This new activity will need to be added to the current Payroll processing schedule. The payroll department will need to determine who is going to create, review, approve and submit the returns and then deal with any queries from employees or the HMRC.

Compliance RTI will give the HMRC greater transparency of what is being paid to employees; as all earnings are being reported, not just those which are subject to PAYE and NICs. Manufacturers will need to ensure they have current dispensations from the HMRC for all payments made which they do not subject to PAYE and/or NIC. Employers who set up cross function project teams to manage the implementation of RTI are encouraged not to disband these teams once they are live, but continue working together to ensure that the business as usual operations have been thought through, documented and put into practice.

The future of emissions disclosure In April businesses listed on the London Stock Exchange will officially be required to report their greenhouse gas emissions. Dexter Galvin, head of the Carbon Disclosure Project’s supply chain programme welcomes the move but looks to a day when more will also be required of suppliers.

wenty or so years ago few organisations monitored or managed their greenhouse gas (GHG) emissions. These days it would be hard to find a major corporation that does not include details of its sustainability or environmental policy in its public communications. Soon it will be mandatory for them to do so in their director’s reports. In June 2012 at the Rio + 20 Conference on Sustainable Development, the UK Government announced the introduction of regulation which will require businesses listed on the London Stock Exchange main markets to report GHG emissions data for their global operations in annual director’s reports from the start of the next financial year (April 2013). The declaration was made as part of the Climate Change Act 2008, under which the secretary of state was obliged to legislate on the corporate disclosure of GHGs and related information in annual reports, or explain why not.

The majority of companies listed in the UK’s FTSE 350 index already report their carbon emissions through the Carbon Disclosure Project (CDP), the world’s largest natural capital disclosure system. These companies are responding to the 722 investors representing US$87 trillion in assets who request that company carbon emissions and strategies are reported through CDP. Last year, 64% of the FTSE 350 companies reporting through CDP also included GHG data in their financial reports. By adding GHG emissions to the directors’ report, in which companies are legally required to inform their shareholders of their principal undertakings, the legislation should enable investors, analysts and commentators to incorporate climate risk into their analyses. Around 1,100 companies will come under the new law’s remit, so there will be a significant jump in the number of companies positioned to capitalise on this opportunity and the related economic advantages, such as reduced energy consumption and operating costs. However, many companies feel stretched by multiple requests for information. With climate change alone, UK companies are already subject to multiple reporting rules and practices related to carbon disclosure, such as the CRC regime, GRI and the investor requests through CDP. To ease the reporting burden and maximise the benefits of company efforts, there should be

policy coherence between all the different rules that require GHG emissions data.

Dig deeper Additionally, by covering a company’s direct operations only, the legislation touches just the tip of the iceberg: the vast majority of the leading manufacturer’s emissions lie beneath the surface, in increasingly globalised supply chains. UK manufacturers such as Jaguar Land Rover, Diageo, SAB Miller, Unilever and Imperial Tobacco are managing supply chain carbon emissions and climate change related risk by asking suppliers to disclose their climate change governance, risks, and detailed GHG emissions data through CDP. This richer reporting leads to better performance. Reducing risk and driving business value, newly released research from CDP based on information from 2,363 suppliers to 52 major global purchasing corporations with a combined

Sustainable Manufacturing: Emissions reporting

According to the Carbon Trust, UK consumption emissions are 34% higher than production emissions. This means that the UK economy consumes

Second opinion Caroline Pitt, consulting director at energy consulting company Utilyx, comments: “At first sight, the UK Government’s new greenhouse gas reporting legislation might look like yet more red tape. Manufacturers which are complying with the EU Emissions Trading System or Climate Change Agreements already know how much energy they use. Those schemes also encourage industry to manage why and when they use energy to reduce their costs. “However, formal reporting on a company’s wider carbon footprint is a step forward. Not a bureaucratic burden. Firstly, it is a clear statement that a company’s environmental impacts need recognition in the boardroom. Secondly, reporting on the environment is now business as usual; being a leader in 2013 means taking action.”

more carbon emissions than it produces spending power of almost US$1 trillion, reveals that companies communicating beyond mandatory reporting requirements are twice as likely to realise monetary savings from emissions reductions initiatives, and are twice as successful at raising investment for them. In addition, those at the head of supply chains stand to benefit financially from urging suppliers to reduce their emissions. For example: In 2011 Eaton invested US$17 million to reduce its emissions and is now enjoying annual energy savings of US$6 million BASF now offers customers a large number of sustainability services including consultancy on energy management and assessment of products and value-chains Dow Chemicals believes it can grow sales of clean-energy enabling products from $5 billion per year to US$15 billion per year.

Risk mitigation Carbon emissions pose a risk to manufacturers. Large purchasers are increasingly interested to understand the regulatory agenda of the countries that their key suppliers operate in. If squeezed suppliers are faced with regulatory cost increases due to carbon or climate change legislation, the ensuing cost increase will invariably have to be absorbed by the end customer. Then there’s the physical risk of climate change. The 2011 flooding in Thailand cost $45 billion; hurricane Sandy cost $50 billion. There is a general

Kirsty Braines, partner at supply chain design and optimisation consultancy, Oliver Wight observes: Companies communicating beyond mandatory reporting requirements are twice as successful at raising funding for emissions reductions initiatives

“As far as sustainability is concerned, we are on the start of the curve from compliance to commitment. Reporting emissions has been a focus for many years; the mechanics are well established, but for most it is yet to become a driving force for business. “The proximity of organisations in the supply chain relative to the consumer, or how much influence they have over the consumer, can determine how actively they think about sustainability. Further upstream, companies may be focused on understanding where they should be positioning their activities, so they are both closer to the customer and operating with a more local supply base. But it’s cost with a conscience rather than, ‘sustainability; what does that mean for us?’ “The chemical sector is an example where all the big organisations have moved from compliance to commitment. Companies in this sector believe in ‘doing the right thing’. At the same time, they were driven to design their processes to reduce waste at source because the cost of compliance became so high. This may well happen elsewhere but it could be 10 years or more before it does.” trend in increasing frequency and severity of extreme weather events around the world and over 70% of the companies analysed in CDP’s latest supply chain report now identify a current or future risk related to climate change that they believe could significantly affect business or revenue. The report, Global Risks 2013 from the World Economic Forum notes a similar trend. The GHG reporting legislation is a welcome development,

but it does not go far enough. Carbon and climate reporting from key suppliers will improve their performance while enabling supply chain managers to monitor and minimise risk in their supply base. If UK plc is to prepare for a climate constrained world it needs to follow the leadership of major UK manufacturers and widen the scope of the regulation to include the supply chain.

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Enthuse young people to take up vital careers in engineering

With not enough young people taking Science, Technology, Engineering and Mathematics (STEM) at further education, many UK companies are facing a skills shortage. Independent, educational charity, The Smallpeice Trust is passionate about closing this skills gap and enthusing the next-generation of engineers. Working in partnership with some of the industryâ&#x20AC;&#x2122;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. Andrew Cave on 07885 227 342 or email andrewc@smallpeicetrust.org.uk.

www.smallpeicetrust.org.uk

Big things happen with The Smallpeice Trust

choice for field and supply yBox is the UK chain solutions. market leader for With an award winning in-night parts and service that not only consists equipment distribution, of the complete outsourcing specialising in delivering items of supply chains, we can pre 8am to a network of 1,500 provide individual distribution, locker locations across the UK. returns and repairs, inventory Our network also extends to management and warehousing. France, Republic of Ireland and Our reliable returns the Benelux. You will find ByBox process allows field engineers lockers at convenient sites such to send parts back to the as supermarkets, petrol stations original manufacturer via our and sports grounds and with locker network; a simple and them being accessible 24/7, secure system that creates engineers can collect items at a faster return loop and their convenience saving them guarantees all parts arrive at valuable time and money. the correct destination. We make around 20 million deliveries a year and more than 20,000 Contact us today: mobile engineers use ByBox, Unit 1 & 2, Central City Industrial our platform daily. We Estate, Red Lane, Coventry, CV6 5RY maintain an enviable first time pre-8am Tel: 0844 800 5219 delivery success rate Email: distribution.revolution@bybox.com of 99.77%, positioning Web: www.bybox.com us as the preferred

Experts at the Institute for Manufacturing are responsible for deploying the EU funding granted to SME stainability initiative PrISMS (see box)

It’s not easy being green; especially for SMEs Reaching beyond flowery expressions of corporate values, Dai Morgan, research associate at the Centre for Industrial Sustainability, Institute for Manufacturing, investigates the practicalities of sustainability for manufacturing SMEs.

A firm can be profitable without being sustainable, but it cannot be sustainable without being profitable

arge corporate powers such as supermarkets and car manufacturers are developing ever more advanced sustainable offerings and assurances for their customers. Whether this is driven by true customer understanding of the importance of sustainability or simply by fashion, it is inexorably leading to the introduction of new standards for suppliers to live up to. This means that, by domino effect, sustainability is no longer a nice-to-have but a requirement further down supply chains. In increasingly challenging marketplaces, cash-tight SMEs need to understand how they can accommodate this trend, marshalling their limited resources to meet new requirements while remaining competitive. But do many companies really understand what becoming ‘sustainable’ will mean for their business? What does compliance with new, stricter guidelines on business practices, processes and policy really require and can SMEs cope?

Lost in translation Sustainability is no longer a niche interest. Every business wants to be seen to be involved in sustainability in some way – to the point that the word is often stripped of its meaning through being applied in so many different scenarios. Definitions of sustainability that pepper corporate mission statements refer loftily to meeting the evolving needs of the global population or societal and environmental concerns. There are aims, but somewhat short on practical application for most manufacturers.

Sustainable Manufacturing: SME survival

In the end, in its simplest sense, sustainability is about survival. For businesses this means; can the company continue for several more years? Can the staff be paid? Can the stock be purchased and the goods shipped? However, the term now relates not just to profit and survival, but encompasses different elements. Stainability covers economic, environmental and social domains - sometimes called the ‘triple bottom line’. To move towards true sustainability, a firm needs to address all three elements.

Connections and consequences Environmental and social issues are important for a firm’s finances and so can be key to survival. Reducing energy bills can be beneficial to the bottom line and, apart from reducing the impact on the environment, can increase business resilience to future shortfalls in energy production. Thinking more broadly about what your stakeholders really value can help identify new business opportunities. From customers to employees and from other local businesses to distant suppliers, there may be opportunities to deliver more value using fewer resources. A firm can be profitable without being sustainable, but it cannot be sustainable without being profitable. Maintaining the economic lifeblood of the organisation is the most pressing reality faced by businesses on a day-to-day basis and one which is challenging with limited resources at one’s disposal. Under such pressures, waste management and energy reduction will not always seem an immediate priority.

New requirements, new challenges The problem is that so many large customer-facing companies are now giving increased prominence to sustainability in their core business plans. They are sometimes required or chose to report on issues like the Carbon impact of products throughout their lifecycle. In many cases they expect to find savings from their supply chain, demanding a commitment to sustainability from their partners (p76). But while it is easy for large supermarket chains to employ expensive consultants to guide them through the carbon measurement and reduction process, SMEs in the supply chain may not know where to start and often have no budget to hire a consultant to come in and analyse processes and practices as they struggle to comply with any new standards or guidelines. In some cases there is some help from government bodies. Programmes like PrISMS (see box), which is designed for manufacturing SMEs and start-ups based in the east of England and supported by the European Regional Development Fund and other funding bodies. PrISMS provides SMEs with advice and help on

Help at hand, and its funded!

ractical & Innovative Solutions for Manufacturing Sustainability (PrISMS) is a programme for start-ups and small and medium-sized manufacturers in the east of England that want to grow their business while reducing their costs and overall carbon footprint. Funded by the European Regional Development Fund and other funding agencies, and managed and delivered by IfM Education and Consultancy Services (IfM ECS), PrISMS gives companies free access to the support of experienced practitioners. These experts work with start-ups and SMEs to identify and prioritise the areas that will have the greatest impact on their businesses and support them in improving their capabilities in these areas. For example: Start-ups: Assistance in developing a sustainable business model or ensuring they the skills and resources needed to scale up with growth are in place Established SMEs: Help in determining the most appropriate markets and products around which to leverage sustainability and highlighting opportunities to increase profit by reducing both costs and environmental impact Fully-funded places are available for 70 manufacturing SMEs with 10 to 250 employees and 50 product or technology-based start-ups. To be eligible, companies must be based in the east of England, want to grow their revenues and create jobs and be able to show they have the potential - and commitment - to reduce their resource and environmental impact.

Feeling left out? Even if you are not based in the east of England you can benefit from the PrISMS programme. A team of expert consultants from IfM ECS is available throughout England and Wales, and some of their work may be covered by other funding programmes, often supported by regional and local government bodies. To find out more about what help is available to you contact Anna Rowntree, 01223 339814 or email prisms-enquiries@eng.cam.ac.uk how to make their business more sustainable without the financial burden.

A new opportunity to invest in your future Difficult as it may sound to find ways to meet new market demands for sustainability, the benefits can outweigh the effort. Firstly, by complying with your clients’ standards, you have a

competitive advantage over other suppliers and are more likely to be chosen in a tender. Secondly, and perhaps most importantly, by doing things like reducing cost and waste and improving production and distribution processes, you will help your business stay profitable for longer making it more sustainable, in all senses of the word.

By law, you need to be licensed to play music at work.

You probably haven’t thought much about it. You’ve just got music on for your staff or customers. But did you know you need permission from the music’s copyright owners if you play music, TV or radio aloud at work? It’s the law. But don’t worry, to get that permission you simply need a licence from PRS for Music* (and in most cases, one from PPL** too). PRS for Music is a membership organisation that acts on behalf of songwriters and composers to ensure they’re paid for the use of their work. So if you have music playing, ask PRS for Music how you become licensed to listen today.

Contact PRS for Music on 0800 694 7304 or at prsformusic.com/musicatwork *PRS for Music licences cover the vast majority of music originating from the UK and all over the world. However, if you play music that is outside of PRS for Music’s control, you may need an additional licence from the relevant copyright owner(s). You will require a TV licence as well if you are using a TV in your premises. You do not need a licence from PRS for Music in the unlikely event that all the music you play is out of copyright or is not controlled by PRS for Music. **PPL collects and distributes royalties on behalf of record companies and performers. Further info at ppluk.com. All music licences are required under the Copyright, Designs and Patents Act 1988 which stipulates you must gain the permission of the copyright owner if you play music in public (anywhere outside the home environment).

Manufacturer HP APRIL 2012.indd 1

13/02/2013 10:34:34

Manufacturinginaction Putting UK manufacturers under the spotlight

TR Fastenings 84 Learn how this company is keeping competitive mass manufacture of basic products in the UK Understand how a combination of automation and reliable staff allow millions of products to be turned out every day by the 16-man team at TR Fastening’s Uckfield factory Read about a reinvigorated training regime for staff which is driving continuous improvement – particularly in extending the life of parts Read about TR Fastening’s and Trifast Group’s acquisition and expansion strategy to exploit boom regions

Manufacturing in Action

ll profiled companies in The Manufacturer are automatically entered into the Manufacturing in Action category at The Manufacturer of the Year Awards. Entries for The Manufacturer of the Year Awards 2013 open this month.

All companies featured will be entered into the MIA Award 2013

A staff of 16 keeps TR Fastening’s Uckfield factory productive and competitive

Fixed to the UK Tom Moore explores how TR Fastenings has kept the core of its nuts and bolts manufacturing in the UK to maintain a competitive advantage.

umans are born to build, why else would kids instantly reach for Lego as soon as they can move. From huts made of wood, stone and straw thousands of years ago, we are now assembling what people could never have imaged just a century ago. Having the vision to put two parts together and create something new is the most basic element of manufacturing, but also the most essential. After all, what’s more frustrating and dangerous than a part falling off broadband boxes, mobile phones or cars! Connecting different parts, materials and now software that heats our food, powers computers and allows us to phone people from anywhere in the world, humble nuts, bolts and screws are vital in connecting the building blocks of our world.

On Sussex Downs Most people would assume that the manufacture of these essential items has moved overseas. Not true. TR Fastenings has kept hold of its factory in Uckfield, East Sussex, which makes fastenings that provide a strong fixing for thin pieces of sheet metal used to make electronics. With electronic goods continuing to develop at the rate of Moore’s law, their complexity requires ever smaller and more intricate components. Although TR Fastenings has seven manufacturing operations in Asia, its main source of competition is still in the UK, so it uses its Uckfield factory to supply the domestic market. “We often get asked ‘why are you making things in the UK?’” says Geoff Budd,

Nuts and bolts TR Fastenings

managing director at TR Fastenings. As a global company making over 150 million components every day, from vacuum cleaners to car seats and steering bag assemblies, Mr Budd responds with a simple answer… economics. “Everyone is making stuff in the Far East. We have factories there but the Davenport machines we have in our UK factory are designed for making small internally threaded components,” says Budd. “In Asia, they typically use single spindle machines. The cost of the machine is more and you have to train your people to a very high standard, but their cycle times are five times longer. We make the part costeffectively and because we are making it locally we can respond quickly to customers’ demands,” states the loyal MD, 37 years in the job. With the UK chasing high-value manufacturing, Budd also emphasises that while the fasteners are a “little bit humble,” it’s vital that you don’t put defective joints into sheet metal. The factory in Uckfield has 41 multi spindle machines that drill, machine, turn, knurl and tap five steel and zinc components into fasteners in one smooth operation. Its principle product is the Hank rivet bush, with three million made every month by just 16 people primarily for the UK market.

seriously and putting it forward as a core goal for the business, then you can guarantee that filters down the chain of command. And it has, with just three out of 16 people directly involved in the company’s UK manufacturing not trained to technician level. Two of these technician assistants are currently taking a modern apprenticeship in engineering and the surge in skills over the last three years is already paying dividends.

We have huge opportunities overseas with global automotive customers Geoff Budd, Managing Director

“It doesn’t change their day-to-day job, but it will give them a much broader base of engineering knowledge and competency than we would normally train in-house,” says Lockyear. “This gives them a much better chance of diagnosing faults. Should a problem arise within the factory, their skills can help to cut downtime.” The new batch of skills has expanded the operatives’ knowledge of different materials, pushing continuous improvement forwards and creating tooling efficiencies on the shop floor. The site has changed the type of knurling wheels on the machines from steel to cobalt, which has improved the life of that wheel by 300%. By swapping from £10 stainless steel wheels to £11 high cobalt wheels, the life of the part has extended from one to three days.

Getting more from the floor Lockyear is encouraging guys on the shop floor to come up with the ideas and it seems to be working. The factory’s multi spindle machines have five bronze slides that open and close to release raw material. The

South country stock Simon Lockyear, factory manager, says that the high output compared to the number of people is not only a testament to superior machines, but the people that oversee them. The Manufacturer is always inundated with PR companies trying to sell how good their client is to its staff. You visit the factory the next day and the operators look glum and directors try to shield you from talking to disgruntled workforces. Not so here. Although TR Fastenings admits training was put on the backburner when the recession first hit, there aren’t many publicly listed companies that mention skills in the fifth paragraph of its interim statement: “We are now utilising skills and knowledge more effectively which, in turn, is further shaping TR’s ongoing senior executive development and succession planning programmes.” If the moneymen are taking skills

The factory in Uckfield has 41 multi spindle machines for manufacturing fasteners

revolving spindle erodes the slides over time so they have to be replaced once every three months. However, Lockyear describes how “one worker has trialled refurbishing the slides with a composite material called tufnol. We now put this on the face of the bronze bearing and there is no sign of wear on it after five months. This extends the life of an expensive part that we have to import from the US.”

Location, location, location

Sales by Geographic area:

51% UK

21%

Europe and USA

An employee suggestion to use compsite material tufnol as a coating for bearings has extended the life of expensive parts at TR Fastenings

With over 400 employees in the UK and +1,000 worldwide, the Trifast group that owns TR Fastenings has set up apprenticeships right across the business, from the warehouse to purchasing in head office. Despite a decline in electronics in the UK, with many household appliances now made in Eastern Europe or Turkey, global demand is increasing outside of the UK as companies push new innovation into the hands of the iConsumer.

The BRIC picture has long been painted, but with new factories continuing to spring up in Asia and Germany’s engineering sector remaining the strongest in Europe, TR Fastenings has used an international acquisition strategy to buy companies making fasteners to increase sales of premier products in boom regions. For instance, it bought Power Steel and Electro-Plating Works Asia in Malaysia during 2011 to expand the group’s range of safety critical components demanded by the rapidly expanding automotive sector. Describing the move, Budd retells how he visited the Malaysian site six years ago and his first thought was “It seemed an absolutely ideal company

28%

Nuts and bolts TR Fastenings

TR Fastenings employs around 400 people in the UK and more than 1,000 globally

to acquire because of the equipment, products and high quality there.” “They make fasteners for gearboxes and engines, safety critical parts that need consistent, reliable quality,” he says. “They have always found innovative ways of making complex parts and that means they are very competitive but yet extremely profitable.” Budd, a well-travelled MD who clocks up thousands of air miles every year by visiting outposts of the company, hints that “you can probably expect further acquisitions”. Naming Singapore, Malaysia, Taiwan, China, America, Norway and Sweden, Mr Budd needs to take a deep breath before adding Holland and Hungary to the list of TR Fastenings sites. And with strong growth in Vietnam, Taiwan, India, Thailand, Indonesia and China, the strategy seems to be working. “We have huge opportunities overseas with global automotive customers because our service capability exceeds what they currently enjoy,” asserts Budd. “The companies that make car seats have a two-hour window to manufacture and put it in the sequence of the car’s assembly line.” Trifast group has a logistical advantage in an age of Just in Time as it makes and distributes fastenings. After all, no one wants to halt a manufacturing line because they’ve run out of low-value parts, including TR Fastenings itself as some customers, particularly those in the automotive sector, fine suppliers for tens of thousands of pounds per hour for production stoppages.

40 candles Its operations around the world are staggering, with machines making fastenings smaller than one millimetre in diameter that are used in high volumes for the tiny hard disc drives employed in so many applications worldwide. Its operating profits in the UK alone were up by 11.4% to £2.74m after winning a number of new contracts.

Following the ban of cigarettes on display, the theft of cigarettes by sales assistants has been on the rise, so TR Fastenings has won a new deal to supply fasteners to a company making locks with registration code to counteract the thieves. As one of the few fastener manufacturers left in

You can probably expect further acquisitions Geoff Budd, Managing Director

the UK, Budd doesn’t envisage any repatriation of work. He welcomes the recent increase in capital allowances to £250,000, a rate which he says allowed the company to invest in the machines that have kept the factory in the UK. Having heard about the Company way back in 1975 through its very first employee, “an ex-milkman who told me that he got this new job working for these guys that were a bit of fun,” Budd has been at the company through decades of growth and a floatation. Reminiscing on days gone by he says he looks forward to celebrating the company’s 40th birthday this year, with a sense of pride.

Contact TR Fastenings: Tel: 0845 481 1800 Email: sales@trfastenings.com Web: www.trfastenings.com

lastword The

Unintelligent

“What a fiasco!” – The words used by a source close to the national curriculum consultation process to describe the Department for Education’s U-turn last month over scrapping GCSEs and the draft curriculum for 2014. Jane Gray reports.

he U-turn in itself may not be such a bad thing. “The great thing about the education system in Germany,” said Juergen Maier, MD of Siemens Industry UK, “is that I can have a conversation today with a student about what exams they are taking and why, and I will completely understand the process because it is the same process I experienced. This gives employers confidence in the qualifications of the young.” We are just reaching a stage in the UK where it is feasible that business leaders will have taken GCSEs rather than O Levels when they were at school. Chucking away the beginnings of consistency in the English education structure would be churlish. Especially if the alternative is the proposed English Baccalaureate; a complicated set of subject multiples, confusing to students. But while we should aim to standardise the national education framework for the long term, the curriculum itself can and should be changed

Proposals have ignored the founding principles of D&T as a school subject by moving focus from functional design to decorative arts

Have your say at: www.themanufacturer.com

and updated to reflect advances in science, technology and the changing needs of society. Yet February’s draft curriculum limits the ability to do either of these things. Let’s focus on STEM subjects for the interest of an engineering audience. The Wellcome Trust, a charitable organisation for the advance of global health, while approvingof the growing emphasis on experimentation at an early age, says the plan for science at key stage 1 and 2 “has introduced unhelpful and unnecessary inaccuracies which could potentially create misconceptions in young peoples’ learning of scientific concepts.” Reaction to the maths curriculum has been mixed. A return to memorising times tables will please traditionalists but it has no reference to identifying and classifying patterns, accurate mathematical diagrams, graphs and construction. And the fact that the syllabus at key stage 3 is summed up in just two and half A4 pages is surely a concern to anyone aware of how integral mathematical principles are to the way we all function in a hightech world.

Enabling subject disabled The real loser in the curriculum review though, seems to be design and technology and this should raise alarm bells for manufacturers and engineers. Design and Technology (D&T) is what the CBI termed an “enabling subject” in its First Steps report. It is for developing future engineers and technicians. D&T provides the opportunity to apply the principles learned in science and maths to physical objects and to understand the relationship between materials, design and function.

Over the last year or so the Design &Technology Association had been working closely with to inspire a really exciting vision for D&T up to key stage 3. It placed the concept of user-centred design at the heart of what it proposed and encouraged the inclusion of challenging elements like embedded control systems in the curriculum. What came out in February’s draft blew the Association’s work out of the water and it will undermine the subject’s ability to inspire UK manufacturing’s future employees. Proposals have ignored the founding principles of D&T as a school subject by moving focus from functional design to decorative arts. There is no ambition here to inspire future industrial leaders or to communicate modern manufacturing principles and technologies. Such a blunder by the DfE directly counteracts the work of the Department of Business, Innovation and Skills to elevate vocational skills, qualifications and career routes. Michael Hancock, under secretary of state for skills, is meant to bridge the two departments, bringing the voice of business into the development of education. I would urge all readers who are concerned about the image of UK manufacturing and their ability to recruit skilled workers to contact Mr Hancock, write to their local MP or join the campaign being led by the D&T Association in order to halt the progress of this regressive curriculum before it is too late. Consultation on the proposals of the draft curriculum is open until April 16. @janefagray

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