The Manufacturer May 2011 issue by The Manufacturer

www.themanufacturer.com May 2011 Vol 14 Issue 05

Mind andmatter EPSRC builds an intellectual powerhouse for manufacturing wealth

Energy and Sustainable Manufacturing Environmental regulation worries REACH a head

IT in manufacturing

Customer is king: Manufacturers learn how to treat the tweet

Interview Sir David McMurtry CBE

Chairman and CEO, Renishaw

Manufacturing in Action Factory of the Month Morgan Motor Company

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Editor’s comment

EPSRC Centres add grist to the new industrial mill The launch of the Engineering and Physical Sciences Research Council’s Centres for Innovative Manufacturing in April was an eye-opener. Rubbing shoulders with some of the biggest brains in engineering academia, apart from feeling distinctly cerebrally challenged, I had a tangible sense of something really good happening. As part of its Growth Review for Advanced Manufacturing, the government has put £51 million into funding a further nine centres to develop applied advanced manufacturing knowhow – that’s the ‘D’ in R&D, as well as the ‘R’ – to add to the three centres the previous government launched in January 2010. The speeches of EPSRC kingpins John Armitt and David Delpy covered a familiar message – manufacturing must not be neglected; the need to invest in people, processes and equipment is paramount. The difference, compared with some events I have been fortunate to attend, was that this rarified audience of senior academics and industrial partners has the ability, knowledge and incentive to really do something about it. The 12 centres cover an impressive spectrum of engineering disciplines – from additive manufacturing to ultra precision optics, via through-life engineering services and photonics. Under-publicised stories popped up all day. Chatting to a professor at the University of Southampton’s photonics department, I learn that centre leader Prof. David Payne invented the optical fibre amplifier that revolutionised optical communications and enabled the development of fast internet speeds. How many people know that the world has Southampton University to thank for broadband? Prof. David Williams, who began his career in mechanical engineering, with partner Richard Archer pioneered large scale techniques for regenerative medicine manufacturing applications – i.e. how to make lots of stem cells. This is perhaps the next great innovation in healthcare. Professors Raj Roy and Paul Shore’s respective departments at Cranfield University are working with industry on projects that have commercial values in the hundreds of millions of pounds. It’s real, it’s all here in the UK and the markets are global – see the lead story from page 20. Funding for the EPSRC Centres was decided by competition. Credit must go to Cranfield and Loughborough universities for leading on three centres each, a fine achievement. Notable leader absentees include the Institute for Manufacturing at Cambridge University and Imperial College, although both are involved as academic partners to one or more centres. The challenge is now to ensure that the EPSRC fulfils the remit of the funding and generates real wealth creation from this work, which can be exploited by British SMEs as well as multinational blue chips.

Cover image: Some applications for the new EPSRC Centres

Will Stirling, The Manufacturer

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Editorial

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News and features 04 News

Manufacturing news

10 Manufacturing appointments On the move

Find out who’s heading where in manufacturing

14 The big picture

Knowledge is power, and it saves it too

Duncan McFarlane explains how IT can save your business money by reducing waste and increasing productivity

15 Economics

Reaching out for workplace flexibility Steve Radley at the EEF explains how flexible workplaces are vital for British manufacturers to be able to compete on the global market.

17 The legal low down

The Bribery Act: The clock is ticking Thomas Eggar talks about the new effects of the Bribery Act that is due to come into force on 1st of July 2011

18 Lead story

Centres for Innovative Manufacturing Will Stirling takes a closer look at the £51m Engineering and Physical Sciences Research Council funded Centres for Innovative Manufacturing

28 Interview

Measure of success

34 40

After 197 patents and more than 50 years working in manufacturing, chief executive of Renishaw Sir David McMurtry CBE discusses the road that took him to the top of the metrology business

34 Regional Focus South West

Jane Gray discovers that the South West supports a large and vibrant industry characterised by the aerospace sector, advanced manufacturing and food and drink

40 Energy and Sustainable Manufacturing

Environmental regulations worries REACH a head With changes to the REACH and RoHS regulation bringing in a whole host of added costs and red tape, few see sunny spells on the environmental standards horizon

46 Lean Manufacturing

Lean; the mother of invention? Don Reinertsen, president of product design process specialist Reinertsen & Associates, shows that just because you understand lean, it doesn’t mean you understand lean product development

51 Employee of the month

Despite being a late starter, Heather Fry is now the HR manager at MANN+HUMMEL UK’s Wolverhampton factory

Contents Finance, Insurance and Professional Services

When things go south 52

A business continuity plan can keep a company in business in the face of an emergency, but very few organisations have one ready to deploy when a disaster hits

R&D tax credits 56

Maximising R&D tax relief claims by Carmen Aquerreta of Deloitte

Finance News 57

A round-up of the latest finance news for UK manufacturers

IT in manufacturing

Intelligent action 60

Business intelligence is increasingly being used right across the manufacturing enterprise and it’s not just for big business either says Malcolm Wheatley

IT News 64

Keeping you abreast of what’s new in manufacturing IT

The value proposition of ERP 68

Total cost of ownership should be the overriding criteria for ERP selection, not short-term financial savings, as Ronan Martin-King reports

Customer is king 74

Roberto Priolo reports from Las Vegas on IBM’s newest solutions, designed to help companies adjust to new market conditions

Supply Chain, Logistics and Materials Handling 78 Sizing it up

Tim Brown looks at benchmarking as a mechanism for supply chain improvement

Special feature Made in Taiwan 81 TIMTOS 2011

The Taiwanese are coming. Will Stirling reports from Taipei on the 3rd biggest machine tool show in the world

EEF Insight 86

Absenteeism under the spotlight

Jill Davies, chief executive of not-for-profit health insurer Westfield Health, discusses the results and the significance of the EEF/Westfield Health Sickness and Absence Survey 2011

Manufacturinginaction Sponsored by Applied Angle

Factory of the month

88 Morgan Motor Company Moggie Magic Morgan Motor Company continues to defy convention and build cars that are seductive, distinctive, appealing and beloved by generations of the brand’s enthusiasts. And it does so in a contemporary way, Ruari McCallion learned from operations and sales director Steve Morris.

102 113 120 124

British Gypsum Rock steady Askeys Sprinkle, sprinkle, ice cream star TSC Foods Glorious! recipe for growth AJP At your service 3

Newsinbrief STEEL

Tata Steel has announced it will invest £8m at its Clydebridge plant in Cambuslang, Glasgow, to increase its capability to produce high-strength steel plate. Workers at Clydebridge carry out two processes – quenching and tempering – which strengthen steel plate. The investment – which includes expanding the plant’s two furnaces, and installing two new gas-cutting machines and a new stamping and marking machine – will boost the output from the specialist plant by up to 50% and lead to the creation of about 26 new jobs.

AUTOMOTIVE

The head of Vauxhall has warned that the UK car industry faces serious problems because of a scarcity of parts manufacturers in Britain. Nick Reilly, chief executive of General Motors in Europe, says the lack of components being made in the UK has made it difficult for companies to be competitive. “Frankly, I think it’s the most critical issue facing the automotive industry in the UK,” he told the BBC. “It’s not enough to have Nissan, Toyota, Vauxhall manufacturing the products because we’ll never be able to compete with another country where the suppliers are surrounding the car plants.”

FUNDING

Regional businesses receive £450m Deputy Prime Minister Nick Clegg has announced details of the first £450m of funding through the Regional Growth Fund and says the projects will safeguard or create 127,000 jobs. The RGF is designed to help businesses in areas of deprivation or that are susceptible to public sector spending cuts in government’s continuing bid to put more weight behind private sector growth. Applicants had to demonstrate how they would create jobs and garner further investment if successful in their bids. This first round of money has been spread among 50 different companies and partnerships and is expected to instigate a total of £2.5bn in private sector investment while safeguarding jobs. Projects that have received funding in the first tranche include an extension of the Haribo factory in Wakefield, a reconfiguration of Vauxhall’s van making Luton site to build its new Vivaro model and the construction of a manufacturing

plant on the Lotte Chemical site in Teesside to develop resins for food and drink packaging. Norfolk car manufacturer Lotus has expressed its dismay at missing out on £27.5m worth of funding through the RGF which it would have used to expand its production facilities and invest in R&D. Companies can bid for cash through the second round of the competition with almost £1bn left in the pot.

Nick Clegg at the launch of the Regional Growth Fund

RENEWABLES SKILLS

Jaguar Land Rover is recruiting 104 apprentices during 2011, across all its trades in engineering and manufacturing, and is encouraging more women to apply for the positions. The automotive group has been recognised as one of the UK’s leading employers of women by being placed in The Times 50 Top Employers for Women list. “We are extremely proud that our efforts to cultivate a talented and diverse workforce across Jaguar Land Rover have been recognised by this prestigious award,” says Jaguar Land Rover human resources director Des Thurlby. Details of the new roles have been targeted at local schools and colleges with the aim of increasing awareness among female applicants.

Will Hull be the wind capital? Siemens could create about 800 jobs in Hull if its project for a £80m turbine manufacturing plant on Alexandra Dock is approved, and Vestas may not be far behind. The factory, which could be fully operational by 2013, would see the manufacture of 5,000 turbines for the offshore farms in the North Sea. Although this might be completed by around 2024, Siemens has revealed that work on the service and maintenance of the turbines will continue in Hull until at least 2049. Siemens executive Dan McGrail, who told the Hull Daily Mail that most of the jobs will go to locals, said: “We don’t just build the turbines, we service them

and carry out operations and maintenance. This will last the lifetime of the turbines.” Through the supply chain, the project could generate thousands of local jobs. Matt Jukes, port director at Associated British Ports, which owns Alexandra Dock, said he “aspires” to have “a more binding agreement” with Siemens in the summer. “This is a significant investment for us and Siemens, so in that respect we hope this will be the start of a very long relationship,” he said.

ManufacturingNews SKILLS

Rolls-Royce to double apprentice numbers Rolls-Royce is building a new apprentice academy centre which will double the number of apprentices it can train each year, helped by funding from BIS. Based at the Learning and men and women who wish to Career Development Centre pursue a career in engineering.” in Derby, the 200 extra With a 98% retention rate, 90% apprentices will be employed of Rolls-Royce apprentices go on in the company’s supply chain to achieve higher qualifications. and manufacturing operations A third of the company’s senior across the East Midlands. RollsUK managers began their careers Royce has been awarded £6m of as apprentices. funding from the Department of Business, Innovation and Skills to support the development. Sir John Rose, Rolls-Royce’s outgoing chief executive, said: “A highly skilled workforce is essential to high value added manufacturing. This expansion will raise standards in our supply chain and among SMEs who do not have the capacity or experience to develop their own apprentice training. I am grateful to the Government for The wide chord their support and delighted that fan blade from the Rolls-Royce can offer greater Rolls-Royce BR725 opportunities to the many young

SKILLS

You do the maths Semta has launched a new Maths for Engineering (M4E) qualification to bridge shortfalls in the mainstream teaching of mathematics. The manufacturing sector skills council, Semta, has developed the qualification in response to reports from university teachers that maths skills among students are lacking with regards to applied engineering. A consortium has led to the development of the qualification including the Semta-led Engineering Diploma Development Partnership, the Engineering Professors’ Council (EPC) and the Royal Academy of Engineering. It is recommended that the M4E be taken as a stand-alone qualification by 17-18 year olds seeking to progress into engineering degrees. In response to the launch of the qualification Dr Geoff Parks, Director of Admissions at Cambridge University and an experienced engineer, said: “We see a lot of students applying through the A-level route whose applications are disadvantaged because the maths they’re studying is light on what we’d like them to be doing to prepare for an engineering degree. Often the relevant units have not been available to them or they have been ill advised. The content of M4E is guaranteed to be what’s needed.”

Newsinbrief STEEL

UK steel output in the first quarter of 2011 showed strong growth on the back of the strong manufacturing performance and the recovery in world economies. In particular, demand from the automotive and oil and gas sectors was strong, though demand from construction fell away in response to cuts in public sector investment. According to the latest figures on steel production released in April by UK Steel, a division of EEF, production in the first quarter of 2011 averaged 188,938 tonnes per week – 10.0% higher than Q4 2010. ENVIRONMENT

UK businesses can now apply for green equipment finance from Carbon Trust and Siemens as a part of the new Green Investment Fund. Worth up to £550m over the next three years, the dedicated low carbon finance scheme is the first of its kind and will enable UK businesses to invest in cost effective energy efficiency equipment and other low carbon technologies, such as new efficient lighting and biomass heating. SKILLS

Sector Skills Council, Semta has been nominated as the sole issuing authority for apprenticeship frameworks in England for the science, engineering and manufacturing technology sectors. Apprenticeship frameworks outline the statutory requirements of individual apprenticeship programmes in England and Wales. They are used by colleges, employers and training providers alike, to ensure all programmes, wherever they take place, are consistent in content and quality.

Bombardier has launched a new learning centre to support the professional development of employees and raise expectations around manufacturing opportunities. Transport engineering and manufacturing firm Bombardier welcomed Frances O’Grady, the Deputy General Secretary of the national Trade Union Congress, to its site in Derby to officially open the company’s new Learning Centre. The on-site centre will enable employees to access myriad courses either to complement their workplace roles, or build entirely new skills.

Newsinbrief

ENVIRONMENT

NE firms attack carbon cap

MIDLANDS

On April 14th, almost 70 Midlands manufacturers assembled at Walsall FC to demonstrate region’s industrial strength to more than 300 directors and managers of companies operating in sectors as diverse as manufacturing, aerospace, automotive, energy, construction and logistics. The Made in the Midlands campaign was launched in 2009 to support manufacturing in the region by encouraging them to work together by using local suppliers to keep businesses trading and protect jobs. RECYCLING

An SME company which recycles old car tyres to make colourful rubber bark chippings is celebrating after opening up its own manufacturing premises in Cheshire. ReBound recycles a million old car tyres each year to make the rubber chippings, which are also scented and are used primarily for children’s playgrounds and garden decorations. The company says its product is more sustainable than the wood alternative as they won’t rot away and are insect friendly.

Energy-intensive businesses in the North East fear the measures introduced by the Government’s Budget might lead to the loss of hundreds of jobs. Carbon-cutting policies will further penalise CO2 emitters and tax the oil industry, which invests extensively in the North Sea and, therefore, the North East of England. The sector warned that the measures could cost the region millions. Rio Tinto Alcan, one of the world’s largest producers of bauxite, alumina and aluminium,

Rio Tinto Alcan aluminium smelter in Lynemouth

based in Lynemouth, said it could end up spending an extra £40m a year, which would cancel its annual profits. This could put over 600 jobs at the company’s plant at risk. In a bid to abide by the new regulation, Rio Tinto Alcan is now looking at using wood rather than coal to operate the site’s power station. John McCabe, corporate affairs director at Rio Tinto Alcan, commented: “If we do nothing it would be very difficult to see how there could be a long-term future for the plant.” Meanwhile, bosses from the subsea sector, which employs a workforce of 10,000 in the region, said it fears major gas and oil companies could withdraw investment and even reduce existing operations in the North Sea because of a planned £2bn windfall tax on the industry.

The UK can be the top western economy for business investment, says a CBI report, if government will help industry to answer frontline investment needs like creating certainty, keeping business costs down and developing new markets. The UK possesses a clutch of high priority business advantages, including flexible labour laws and a welldeveloped innovation ecosystem which could make the UK the number one destination for business investment in the West.

St Helens cooker manufacturer Stoves and local MP Shaun Woodward are spearheading a campaign for the introduction of a new, standardised ‘Made in the UK’ logo to be displayed on products made on British shores. In an independent survey, 36% of people said they buy British whenever they can and more than a third said they would do so more often if it was easier to identify authentic, made in Britain products.

ENVIRONMENT

Green Guide for SMEs The Carbon Trust has issued guidance to help small and medium sized enterprises tap into the £112bn green goods and services market in the UK. According to research from the government backed organisation, less than a third of UK SMEs expect green opportunities to lead to increased profits and only 22% are investing in green products and services. What’s more, more than half see the green economy as a threat and a similar number believe accessing the market themselves requires access to capital. In response to this the Carbon Trust has created its Green your Business for Growth guide in a bid to change perspectives. It includes checklists, templates and advice on how to identify green growth opportunities specific to an individual organisation, develop a green growth strategy, reduce environmental impact, and make existing products and services ‘greener’. Ian Gibson, director of delivery programmes at the Carbon Trust said: “We want to help Britain’s small firms to seize the opportunities presented by green growth through cutting costs or developing greener products and services.” The free guide can be downloaded at: www.carbontrust.co.uk/publications.

ManufacturingNews AUTOMOTIVE

Honda struggles in Tsunami’s wake Japanese automotive manufacturer Honda halved production at its Swindon-based factory last month due to a shortage of parts sourced in its home nation. Like many automotive manufacturers Honda is only just beginning to experience the full scale of the repercussions of the series of disaster that have recently befallen Japan. It has taken some weeks for supply chain implications to surface but now, with distribution of components from Japan having only just resumed, Honda has been forced to halve the planned production schedule at its factory in Swindon due to a lag in arriving parts. Some 3,000 workers are employed at the Swindon-based factory and despite the uncertainty

in its supply chain Honda has stated that these employees will remain on full pay while hours are ‘banked’ for when production is scaled up again later in the year. Honda was optimistic that future up-scaling would allow it to claw back production targets, however it is anticipated that the move will create a 22,500 output deficit against annual goals. Lean principles will enable the company to tackle this challenge as the factory, which has the capacity to turn out 250,000 cars per year is adept at balancing utilisation with demand and variation.

FASTENERS

Employees at Gripple take a share Sheffield-based Gripple Limited, the manufacturer of wire joining devices, has made its 170 workforce, and all of its 105 overseas employees, shareholders. Staff members invested a proportion of their taxed income, each contributing an average of £12,500 during their employment. Shares, which are valued not on the whim of the stock market but on the financial performance of the business, have to be purchased, and are not awarded or purchased at a discount via share options.

Workers in production at the Gripple factory

An investment made in 1994 has increased in value by more than 20 times. The company’s staff are involved in every aspect of shaping its growth and development. Having invested for the long term, employees benefit financially from their own hard work, enjoying the ups, and also enduring the downs. Gripple managing director, Mark Edmonds, said: “The company is in the hands of entrepreneurial and innovative staff and, as such, we are custodians of each other’s money. Employee ownership fosters openness and trust and ensures everyone has an opportunity to learn about the business and become more involved, if they so wish.”

Newsinbrief AUTOMOTIVE

Since the earthquake and tsunami in Japan, Nissan has been assessing and planning for any disruption to its global overseas manufacturing operation. Despite an unavoidable interruption to production schedules, Nissan is wholly-focused on minimising any impact on customers or staff throughout this period, and every effort is being made to return to normal operation as quickly as possible. Due to an interruption to the normal supply of components, Sunderland introduced three non-production days into its schedule from 26 - 28 April.

FOOD AND DRINK

After weeks of speculation, Italy’s biggest listed food company Parmalat is now officially the subject of a Eu3.4bn (£3bn) takeover bid from French dairy company Groupe Lactalis. Last month, Lactalis bought 29% of the Italian company, which had revenues last year of Eu4.3bn and profit of Eu285m. This latter figure was down from Eu521.5m in 2009. Parmalat – which specializes in dairy products, fruit juices and vegetables - employs somewhere in the region of 14,000 people worldwide. Lactalis has now offered 2.6 euros per share for the rest of the company and trading on Parmalat has been suspended.

M etals

Braby, a 170-year old metal vessels manufacturer, has gone into administration with the immediate loss of half of its staff. The Bristol company – a supplier of aluminium and stainless steel silos, tanks and vessels to the food, plastics, chemicals and pharmaceuticals industries – was originally founded in 1839. It counts some of the UK’s largest manufacturers, including GlaxoSmithKline and Allied Bakeries, as customers. However, the company fell into difficulty and a foreign financing deal recently fell through. Administrators, Grant Thornton, are seeking a buyer but 27 of the firm’s 53 employees have been made redundant.

Datesfor yourdiary May

18 18-19

The CBI is holding its annual dinner at Grovesnor House hotel. See: www.cbiannualdinner.org.uk

IP Research will be featuring at Product Design & Innovation, a two day conference at ExCel in London. For further information visit: www.pdesigni.com

SayOne Media, publishers of The Manufacturer magazine, is holding ERP Connect 2011 at Ansty Hall in Warwickshire. For further information visit: www.erpconnect.co.uk

The Somerset & Dorset Manufacturing Network will be hosting a series of sessions which will provide another way of looking at your business using performance measures. For further information contact Sue Hinton on: 0845 608 3838

19-20

The Nuclear Industries Association is holding SC@nuclear workshops at the Royal Armouries museum in Leeds. For further information or to book contact Stephanie Longland on: 0207 766 6642

Cranfield University will hold a National Manufacturing Debate, focusing on investment and innovation. For further information visit: www.cranfield.ac.uk/sas/manufacturing/events/debate/index.html

June

EEF is holding a Managing Your Talent seminar, focusing on getting the training and development budget you require. For further information and to book call: 0845 293 9850

The Institute of Operations Management’s Developing a Culture of Continuous Improvement workshop takes place at the IMechE headquarters in London. For more information contact Leonie Edwards on: 01536 740 105

14 15 16

SayOne Media, publishers of the Lean Management Journal, is holding the Lean Management Journal Annual Conference at the Hilton Metropole in Birmingham. For further information contact Jon Tudor at: j.tudor@sayonemedia.com The Manufacturing Institute, in association with Leyland Trucks, holds a Lean Immersion day at the Leyland Trucks plant in Preston, gaining an insight into Leyland Trucks continuous improvement, quality control and waste elimination programmes. For further information contact Emma Holt at: emmah@manufacturinginstitute.co.uk

Thales UK wins Queens Award Aerospace and defence company Thales UK has been awarded the Queen’s Award for Enterprise for its optronics and missile electronics businesses. The Queen’s Awards for Enterprise are highly prestigious awards for outstanding achievement by UK businesses in the categories of Innovation, International Trade and Sustainable Development. The awards are made annually by HM The Queen and are only given for the highest levels of excellence demonstrated in each category. They are judged to a demanding level and winners receive a number of benefits and worldwide recognition. Thales UK’s optronics business designs and manufactures electro-optic day and night-vision equipment for use in land, sea and airborne applications. Founded in 1888, the optronics business was registered in Scotland in 1912 and is headquartered in Glasgow. Thales UK’s missile electronics business designs and manufactures target detection devices, fuses and safety arming units, which are installed in a range of missiles. With origins tracing back to the First World War, the business has risen to being a recognised world leader in its areas of operations and is based in Basingstoke. In a statement, Victor Chavez, CEO of Thales UK, said that above all the achievement “recognises the efforts, unique skills and commitment of our employees”.

The CBI is holding an Energy conference at the Royal Society in London. Visit: www.energy2011.eventbrite.com

MAS South East is holding a Lean Facilitator Training course, in East Malling, Kent. For further information contact Christine Whittaker on: 01256 741034

A D VA N C E D M A N U FAC T U R I N G

Thales optronics equipment in use

ManufacturingNews ADVANCED MANUFACTURING

Space industry to deliver 100,000 jobs

REGULATION

Trade organisation ADS has welcomed the publication of the ‘National Space Technology Strategy for the UK’ report by the Space Leadership Council. Made up of industry, academia and Government, the Space Leadership Council provides strategic advice to the new UK Space Agency, launched on 1 April 2011. The publication builds on the February 2010 Space Innovation and Growth Strategy that identified a way forward to maintain growth in the sector. Graham Chisnall, managing director of AeroSpace and Operations at ADS, said: “The UK space sector today is a £7 billion a year sector supporting around 70,000 jobs. It has demonstrated

Newsinbrief

its strong position for future growth by expanding at nine per cent per year even during the recession. “The Strategy forms part of the plan that the country has in place for further growth between now and 2050 that should deliver an additional 100,000 jobs from a sector moving towards a £40 billion per year contribution to the UK economy. This partnership will be crucial to ensure the longterm success of the industry. The support of David Willetts as the Minister responsible for this area has been crucial to sustaining the momentum of this work.”

Thousands have already seized the chance to submit ideas to the new Red Tape Programme, launched by government last week, to reduce the burden of regulation on UK businesses. Over 6,000 ideas and suggestions have poured into the Red Tape Programme’s website since it was launched last week and the feedback – direct from the mouths of business leaders across UK regions, sectors and sizes – will in inform future government policy. The Red Tape Programme is part of the government’s Plan for Growth which was announced in April and the initiative is being strongly backed by the manufacturer’s organisation, EEF.

Manufacturingoutput Despite a collage of negative statistics including feeble order books for April and a decline in financial confidence, Britain’s manufacturers are still on track for recovery says the CBI.

ts latest survey showed an 11% balance of firms reporting weaker than normal orders over the month, declining heavily from the 5% balance seeing stronger-thanexpected business in March. However the CBI’s quarterly figures also suggest the industry grew at the fastest pace for 16 years during the past three months, boosted by domestic and export orders. Manufacturers are still experiencing growth in demand but inflationary pressures are in danger of derailing the sector’s recovery. Strong domestic and export demand – with growth in both at the highest levels since April 1995 – led to a +20% balance for output in the last three months among

the 453 manufacturers that responded to the survey. Furthermore, output is expected to climb again for a balance of +22% of companies over the next three months. Head of economic analysis Lai Wah Co said: “Manufacturing orders have risen strongly over the past three months and output growth remains robust.” However, official figures have been weaker after February data showed Britain’s manufacturing output was stationary in that month. In comparison, The British Chambers of Commerce’s latest Quarterly Economic Survey (QES), released in March, found that the economic climate is currently “mediocre and disappointing, particularly

for manufacturing.” Manufacturers report much less confidence in their prospects for the next 12 months than they did in Q4 2010. Indeed, confidence levels are at their lowest since Q1 2009. Outlooks have been hit by adverse weather conditions, cashflow and price pressures and a fall in domestic and export orders, although the latter in particular remains relatively healthy. Four out of five manufacturing firms state that the cost of raw materials is intensifying pressures to raise prices. In addition, chief financial officers in the UK have expressed their lowest optimism about recovery and growth for two years, according to consultancy Deloitte’s annual CFO Survey.

High inflation and concerns about the effects of fiscal tightening are contributing to the dour sentiment, says Deloitte. CFOs remain cautious about the sustainability of the recovery, expressing a 29% likelihood of a double-dip recession – up from 27% last quarter. On average, CFOs expect the UK fiscal squeeze to reduce UK corporate potential profits by 7% this year. Eightythree per cent see the fiscal squeeze reducing their companies’ 2011 profits. This quarter’s survey of 137 large companies, including 46 finance directors of FTSE 100 companies, found that on balance CFOs remain positive, but optimism has dropped back to the lowest level in two years.

ManufacturingAppointments UK Appointments Exova Dr Roger Digby and Ian El-Mokadem

Exova plc, a provider of laboratory testing, advising and assuring services, has appointed Ian El-Mokadem as its new CEO. He was previously the UK & Ireland group managing director of Compass Group plc. El-Mokadem’s career

includes positions with Accenture and Centrica plc. Dr Roger Digby has also joined Exova as group technical director from Airbus, where he was head of materials and processes integration for aircraft programmes.

Season Group Steve Wilks

Global Electronics Manufacturing Services (EMS) provider Season Group has appointed Steve Wilks as business development director for Europe. Wilks will lead the group’s new business

development in Europe and will be responsible for setting up partnerships with other EMS providers in the UK and Germany. He will also be setting up a representative network across Europe.

Evolution Time Critical Graham Little

Emergency logistics specialist Evolution Time Critical has promoted Graham Little to the role of European sales manager. Little’s knowledge of automotive supply chains means

that he is able to work with new and existing clients at an early stage of their planning process to ensure that they have robust solutions to supply chain issues in place.

Barclays Corporate has appointed Mark Lee as Head of Manufacturing, Transport and Logistics. Lee joins Barclays Corporate from The Royal Bank of Scotland (RBS) where he was Head of Global Industrials Group, UK Corporate Coverage Global Banking & Markets – a role in which he had lead coverage responsibility for RBS’ UK large-cap relationships, primarily in the aerospace and defence and transport and logistics sectors. Hitachi Capital Business Finance has announced the appointment of Kelvin Briggs as marketing manager to support its continued growth in the business asset finance market. Briggs has over 35 years of experience within the asset finance and commercial vehicle industry gained with major market players such as Volvo Trucks, Lombard, Alliance & Leicester and General Electric. Leading refrigeration and air conditioning contractor Cold Service Group has appointed Andrew Baxendine as its new group managing director. This appointment is part of a strengthening of the senior management team which sees Adrian Westrup promoted to commercial director, Peter Cutcliffe become engineering director, Gary Mallet move to service director and Danny Ryan take on the role of operations director at the Ringwood-based business. Ranjit Boparan has become the non-executive chairman of Leedsbased Northern Foods. It is one of several changes made to the board following his takeover of the food manufacturer.

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

Microvisk Technologies, a uk developer of microelectromechanical sensors for sufferers of blood clotting disorders, has announced the appointments of Bill Moffitt as chairman and Peter Whitehouse as chief financial officer. Moffitt has over 30 years’ experience in the diagnostics and medical device industry and is the president and CEO of Nanosphere in the US and the chairman of Glysure in the UK. Whitehouse joins from IOTA NanoSolutions, a Unilever Ventures backed nanotechnology company, where he was commercial & finance director. BMW has appointed Frank Weber, former top engineer at General Motors, as head of vehicle architecture and integration. His new position gives Weber effective management of all electric drive issues at BMW. One of Weber’s previous roles was the leading engineer responsible for the development of the plug-in Chevrolet Volt, known as the Vauxhall Ampera in Europe. Dick Glover, McLaren Automotive’s technical director, moves to a new role as director of research. He will lead the development of new technologies, materials and production processes. Replacing Glover as technical director is Carlo Della Casa, who takes over after an 18 year career at Ferrari where he led various teams in vehicle development, V8 engine development, and chassis development. Della Casa takes responsibility for McLaren Automotive’s engineering programme on its future range of high-performance sports cars. The Food and Drink Federation (FDF) has appointed Terry Jones as its new director of communications. Jones has worked at the National Farmers Union for the last nine years and has extensive communications experience. He replaces Julian Hunt who has departed to join Coca-Cola Enterprises GB as VP for public affairs and communications.

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The Manufacturer of the Year Awards 2011 is a rare chance for you, your team and your company to receive industry-wide recognition for your achievements. Established over 10 years ago, The Manufacturer of the Year Awards competition is specifically designed to celebrate the strength and diversity of UK Manufacturing. So enter today and showcase your achievements. For further details and to register your interest contact Laura Williams on 01603 671 323 or email l.williams@sayonemedia.com

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The big picture Knowledge is power; and it saves it too Professor Duncan McFarlane Institute for Manufacturing

Think of information in manufacturing and your thoughts probably turn to data processing and profit and loss spreadsheets. But Professor Duncan McFarlane of the Institute for Manufacturing explains how information can be a powerful tool in driving down costs.

report by the Department of Energy and Climate Change recently revealed that UK industry is responsible for consuming 100TWh of electricity each year; that’s about the equivalent of the entire output of ten Sizewell B Nuclear Power stations. The 100TWh figure roughly works out at around a third of the UK’s entire output, and most of this (around 64%) is due to the use of electric motors. Continuing with the statistical theme, there are believed to be in excess of 10 million motors powering our manufacturing processes, with a collective running cost of £3bn per annum. Breaking this down even further, a 90kW motor may cost up to £30,000 per year to run, with a 110kW motor consuming around £1m worth of electricity over its typical 20 year working life. Most of these 10 million motors will have been sized to cope with ‘peak’ conditions, and typically run at full speed. But engineers will understand the laws of Affinity, and point to the fact that the slower a motor runs the less power it absorbs. This is where we begin to hit a snag. Around 90% of motors used in industry have no form of variable speed control. Even with financial incentives such as the Carbon Trust’s scheme Enhanced Capital Allowance scheme, which gives tax breaks for companies using energy efficient equipment, and the fact that a variable speed drive has a payback period of months, not years, acceptance of this technology has been slow. This is where information comes in. Francis Bacon coined the phrase “Knowledge is Power” in the 16th Century. The more we know about any given situation, the more we can dictate actions or exert control. Bacon’s statement has been taken on board by both the research and industrial communities.

New opportunities Working with OMRON, a manufacturer of Industrial Automation equipment, we are exploring how information and control systems generally, and wireless technologies in particular, can help to address ever increasing energy reduction demands. The company is experimenting with using inverters as an energy efficient means of controlling speeds of pumps, drives and fans by adding energy

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

monitoring units to the standard programmable control systems (PLCs). For example, modern PLCs now have the ability to upload scheduled production patterns from Enterprise Resource Planning (ERP) systems, allowing the control system to make intelligent decisions about which resources are required at any point in time, for any part of a process. It gives plant operators the ability to turn off systems in areas of a factory which are not being utilised. Within the research community in Cambridge our perspective is one of considering the complete energy picture in manufacturing: both in terms of production and non production energy issues but also considering the energy lifecycle of the manufactured product. Just in our research centre we now have a range of activities relating to gathering, analysing and responding to energy consumption information. Research is examining how information-based techniques are currently used for reducing energy consumption/carbon emissions in manufacturing operations. Work is also seeking to classify the different approaches being used and provide a framework to structuring future research in this area. Twinned with this is the move toward encouraging original equipment manufacturers (OEMs) to develop more efficient machines, to allow them to see the production and design of more efficient equipment as a key selling point for their goods. It’s something that has long been seized upon by the automotive sector and manufacturers of white goods. For consumers buying a washing machine, operational efficiency is becoming as important a criteria in the purchase decision as the performance and reliability of the product itself. Industrial machinery OEMs will eventually follow suit, but greater intelligence in the control software for making operational decisions, and ‘exposure’ of energy consumption data, will be the first steps towards building more energy efficient factories. Professor McFarlane is head of the IfM’s Distributed Information and Automation Laboratory. To find out more about the centres work go to: www.ifm.eng.cam.ac.uk/automation

Economics Reaching out for workplace flexibility Steve Radley, Director of Policy, EEF

the coming months, we will be focussing on an equally important issue – the need for flexible workplaces that will help manufacturers to complete in global markets and create high quality jobs. Central to this is a significant piece of new research we have just started on the Modern Manufacturing Workplace. This looks at what drives manufacturers’ need for flexibility, how they seek to achieve it, what is good and bad about the UK for securing flexibility. Are trends moving in the right direction? Our research will feed into our representation with government to ensure it delivers on its goals of developing a more effective approach to regulation and reducing the burden of regulation on business. In addition however, we will also looking at the wider range of ways that employers create the agile and flexible workforces that they need. These include manufacturers’ investment in skills, how they communicate with their workforce and how they involve it in their drive to secure change in their business. We will also be highlighting the types of flexibility employers provide to their own employees to help them balance their working lives and the demands on their time outside work. However, an important lesson for government is the need to give businesses the breathing space to develop their own solutions to these issues, rather than imposing bureaucratic and inflexible approaches on them. The reality so far has been that we have seen more, rather than less, employment regulation, with new rules on Agency Workers, new provisions for flexible working and the abolition of the Default Retirement Age. But there is now sign of the tide turning. The Budget contained some modest burden– reducing measures on dual discrimination, the rights to request flexible and time off for training and a three year moratorium on new regulations for micro firms. In addition, the government will be reviewing different aspects of employment law in a parliament-long project to identify areas that are ripe for reform.

In the early part of this year, we have talked a lot about what the government can do to encourage stronger and more sustainable economic growth. While March’s Budget represented a good start, the job is far from finished and you can help drive further improvements. Over a slightly shorter time frame, the government’s Red Tape Challenge has set up a website through which businesses, representative organisations and members of the public can challenge existing regulations. There is a three month window to comment on economy-wide issues such as employment, pensions and health and safety but a much shorter one in the last two weeks of June to feed in views on how regulation affects manufacturing specifically. EEF will be playing a full part in these initiatives and I would urge all manufacturers to get involved. Though all these measures will be potentially helpful in reducing the barriers to flexibility posed by bad and unnecessary regulation, the government also needs to go deeper and tackle its root causes. In part this means engaging more effectively with Brussels, particularly at an early stage, to ensure that only new regulations with clear benefits get off the ground and that there is a proper, independent assessment of the impact new measures will have. We need to see a similar change from own government but this will only come if it understands business and comprehends the full impact of potential new regulations. We want to play a part by getting as many manufacturers to host visits and short-term secondments from the civil servants who are likely to be working on these issues. Reducing the burden of regulation will not be easy – governments of all shades have talked about it for decades but have usually ended up delivering very little. But you can help to achieve a change. Two key ways to do this are to take part in the Red Tape Challenge and to sign up to our programme for getting civil servants to understand manufacturing better by hosting visits. Details on both of these can be found on our website at: www.eef.org.uk/ manufacturingagenda/flexible-workplaces.aspx I urge you all to get involved.

Have your say at www.themanufacturer.com

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Thelegallowdown

The Bribery Act:

the clock is ticking... The Government has now issued the much awaited guidance to accompany the Bribery Act 2010 and the Act is now due to come in force on 1 July 2011. Manufacturers take note!

The

stated aim of the Guidance is to outline the procedures a relevant commercial organisation can put into place to prevent persons associated with them from bribing. In recent weeks there had been speculation that the government would seek to water down the Act in the Guidance or even introduce an “acceptable” level of facilitation payment. In fact neither has happened. Instead the Government has sought to emphasise that companies, when reviewing their anti-bribery policies and procedures, should adopt a risk based approach. This effectively puts the onus squarely on manufacturers to assess the risks and tailor their policies and procedures to address those risks. Whilst the Guidance states that companies will not have to have policies in place where it does not believe there is a risk of bribery manufacturers will undoubtedly need to demonstrate that they have undertaken that assessment process in the first place.

So where does this leave us? Contrary to what many had hoped the Guidance does not provide a set of policies that a director is able to simply roll out, instead the Government has reiterated that companies need to assess and take action to prevent bribery. However, in its Guidance the Government appears to be seeking to provide reassurance that it does not intend to prosecute every instance that may fall foul of the Act. However, it is likely that the main ramifications of the Act will be felt by manufacturers in their day to day dealings with clients, customers, suppliers and rivals as each company, in order to protect itself, will require assurances and demonstrations from those with whom they have (or hope to have) business relationships that those people or organisations are themselves compliant with this far reaching Act.

What should manufacturers do now? The Government has stated that where there is no risk of bribery within a business it will not be necessary for that business to put anti-bribery policies and procedures in place. However, this assurance appears to raise at least two issues:

In the event that an offence under the Act does occur the business’s actions will inevitably be viewed with the benefit of hindsight. In these circumstances, a company will have to demonstrate how it analysed the risk and how it reached its decision as to what policies and procedures it was appropriate to implement. It is important therefore that any such decisions are carefully documented (and reviewed on a regular basis to ensure they are still correct and relevant). Policies and procedures are only one aspect of the measures the Government expects businesses to take in light of the Act. It would appear that other measures, such as a clear demonstration of the top level commitment within a business to preventing bribery, should be carried out by businesses regardless of the analysis of risk that it has carried out.

Therefore, if they have not already done so, companies should now start analysing the risk of bribery (under the broad definition of the Act) occurring within their businesses in order that any necessary measures can be taken and put in place in advance of the Act coming into force on 1 July 2011.

For more details contact: David O’Hanlon, associate, Thomas Eggar LLP on david.ohanlon@thomaseggar.com or 01293 742803

Ultra-modern fibre drawing tower, part of the £100m new clean rooms in the University of Southampton

Personal Protective Equipment, used in a number of contact and ball sports to reduce the risk of injury to the athlete or player, developed through Additive Manufacturing

Where

meet

Aircraft such as the Typhoon fighter jet can now potentially have a lower life-cycle cost whilst remaining reliable

science and business

“Any intelligent fool can make things bigger and more complex... It takes a touch of genius – and a lot of courage – to move in the opposite direction.” Albert Einstein

Announced

with the Budget this year, the government’s Plan for Growth included a strong manufacturing component, much of which focused on the collaboration between universities and industry in the need to exploit technology. The most eye-catching of these was the provision of £51m seed funding to kick-start nine new Engineering and Physical Sciences Research Council (EPSRC) Centres for Innovative Manufacturing (£45m) and fund new EPSRC Manufacturing Fellowships (£6m). Together with three existing centres, the 12 centres’ combined research themes – from additive manufacturing to ultra precision optics – were identified as the most promising areas of manufacturing research in terms of convertible value, with end-user sectors including aerospace, automotive, bioscience and pharmaceutical industries. The core purpose of the centres is to feed new ideas

New EPSRC centres to take engineering research to business, and open up new industries and markets in growth areas.

and discoveries through to business to stimulate new industries and markets in growth areas. On reviewing the 12 Centres, two things stand out. Firstly, they are all overwhelmingly built around a common purpose of practicably applying research to manufacturing industry. These are not flaky research projects that will remain locked up in university laboratories. On the contrary, they all need industrial participation to achieve qualified results. Companies – the usual big suspects but crucially small companies too – will benefit directly from this research. Secondly, the way the centres and the EPSRC’s Manufacturing Fellowships are devised and constructed are strongly aligned to the manufacturing mandate of government’s Plan for Growth. The centres are based on high tech industries, they target emerging market segments and have a strong focus on leadership. Almost certainly EPSRC was consulted in shaping the Plan for Growth. This special feature summarises the 12 EPSRC Centres for Innovative Manufacturing, looks at three of the centres in more detail, and attempts to identify the potential value of the some of this advanced research to the UK economy. Specifically, how will SMEs as well as big companies benefit from all this meritorious brainwork? Dr Mark Claydon-Smith, head of manufacturing at EPSRC explains the research council’s mandate, the nature of investment, the Manufacturing Fellowships, the new High Value Manufacturing Technology Innovation Centre – or TIC – and the new Industrial Doctorate Training Centres.

Leadstory

Lead story EPSRC Centres for Innovative Manufacturing

The EPSRC Centres for Innovative Manufacturing

Professor David Delpy talks about the benefits the new EPSRC Centres will bring to UK manufacturing

Professor David Payne, University of Southampton and Professor David Williams, University of Loughborough The three original centres launched in January 2010 are in the fields of:

Liquid Metals – developing innovative technologies for the reuse and recycling of metal. Led by Professor Zhongyun Fan at Brunel University, academic partners include Birmingham University and Oxford University.

Photonics – the science and application of light using optical fibres to revolutionise the internet and telecommunications. Led by Professor David Payne at the University of Southampton. It has numerous industrial partners including spin-outs SPI Lasers and Fibrelogix Intl, plus big firms like SELEX Galileo. Prof Payne is the inventor of the optical fibre amplifier that revolutionised optical communications and enabled the development of fast internet worldwide.

Regenerative Medicine – therapies to enable damaged, diseased or defective tissues to work normally again. Led by Professor David Williams at the University of Loughborough, academic partners include the University of Nottingham and Keele University. The work is particularly focused on scaling-up the manufacturing processes for regenerative medicine techniques like stem cell growth.

EPSRC Centre for Innovative Manufacturing in Additive Manufacturing

Will combine multi-material, multifunctional devices with amalgamated electrical, optical and structural properties in a single manufacturing process using additive manufacturing. Led by Loughborough University, the centre leader is Prof Richard Hague. The grant will total £4.9m, with an additional £3.2m from industry partners. Industrial partners include a range of organisations involved in additive manufacturing like 3TRPD, MTT Equipment Supplier, TWI, and the National Physical Laboratory.

EPSRC Centre for Innovative Manufacturing in Advanced Metrology

Will create and develop a ‘factory on the machine’ linking measurement and production to minimise cost and allow ever increasing complexity and quality in manufacturing. Led by the University of Huddersfield it partners with the National Physical Laboratory (NPL) and the Science and Technology Facilities Council. The grant will total £4m, with an additional £3.2m from industry partners. Centre leader is Professor Xiangquian (Jane) Jiang, industrial partners include Carl Zeiss, CIP Technologies, Renishaw and Rolls-Royce.

EPSRC Centre for Innovative Manufacturing in Composites

Will develop the next generation of composite manufacturing processes based on low cost, short cycle times, efficiency and sustainability. Led by the University of Nottingham, it partners with Bristol, Cranfield and Manchester universities. The grant will total £4.9m, with an additional £1.8m from industry partners. Centre leader is Professor Andrew Long, industrial partners include Airbus, Bentley, Caparo and Vestas, among others.

EPSRC Centre for Innovative Manufacturing in Continuous Manufacturing and Crystallisation

Will take forward the move from batch manufacturing to fully continuous manufacturing processes for high value chemical products. This will lead to higher levels of quality, lower cost and more sustainable production. Led by the University of Strathclyde, the grant will total £4.9m, with an additional £1.8m from industry partners that include the three biggest pharma companies in the UK, plus SMEs including Prosonix and Solid Form Solutions. Centre leader is Professor Alastair Florence and there are five academic partners including Heriot-Watt University and Cambridge University.

EPSRC Centre for Innovative Manufacturing in Emergent Macromolecular Therapies

Will create the capabilities by which UK companies will be able to select drug candidates for clinical trials, both on the basis of clinical efficacy manufacturing feasibility, resulting in greatly reduced costs. Led by University College London, the academic partners are Imperial College and the London School of Pharmacy and an assortment of other higher education institutions including 10 foreign HEIs. The grant will total £4.9m, with an additional £3.9m from industry partners. The centre leader is Professor Nigel Titchener-Hooker, industrial partners include 24 UK companies from blue chips to SMEs, and six Knowledge Transfer Networks.

EPSRC Centre for Innovative Manufacturing in Industrial Sustainability

Will rapidly reduce the resource and energy-intensity of the production of existing goods, and investigate options for a radical redesign of the industrial system. Led by Cranfield University, the centre leader is Professor Stephen Evans. It partners with the universities of Cambridge, Loughborough and Imperial College and has no less than 12 industrial partners from Shearline Precision Engineering to IBM and Unilever. The grant will total £4.5m, with an additional £1.3m from industry partners.

EPSRC Centre for Innovative Manufacturing in Intelligent Automation

Will capture and advance human skills and develop automated processes. Led by Loughborough University, it partners with Cranfield and industrial partners Aero Engine Controls, Airbus Operations, Ford Motor Company, one of the Manufacturing Technology Centres and Rolls-Royce.The grant will total £4.8m, with an additional £334,000 from industry partners. Centre leader is Professor Mike Jackson.

EPSRC Centre for Innovative Manufacturing in Through-life Engineering Services

Will design high value systems such as aircraft engines that require less engineering service, and incur less whole life cost. Led by Cranfield University with Durham University, the centre leader is Professor Rajkumar Roy. Its industrial partners include ARM Holdings, BAE Systems, Bombardier Transport, the UK Ministry of Defence and Rolls-Royce. The grant will total £4.8m, with an additional £3.5m from industry partners.

EPSRC Centre for Innovative Manufacturing in Ultra Precision

Will create ultra high precision manufacturing tools that can make products with nanoscale precision. Centre leader is Professor Paul Shore, and academic partners include the University of Cambridge and the NPL. Industrial partners are Microsharp Ltd, an SME, Hexagon Metrology and Fives – Cinetic. The EPSRC grant value will total £5.2m, with an additional £1.2m from industry partners.

In addition to the 12 Centres, the £6m-funded Manufacturing Fellowships aim to create more effective links between business and research. The five-year Fellowships will provide support for at least six exceptional engineers and technology specialists from business who are able to bridge university and industrial cultures.

Lead story EPSRC Centres for Innovative Manufacturing

MANUFACTURING THE

FUTURE Nottingham University is leading the development of a new generation of composite manufacturing processes

The

Engineering and Physical Sciences Research Council (EPSRC) invests around £800 million a year in research and postgraduate training in subjects from mathematics to materials science, and from information technology to structural engineering. Manufacturing research has always been a key part of our portfolio, covering underpinning science, simulation and design, production, fabrication, systems and services. The research we sponsor and investments we make are helping to drive the innovation in high-value manufacturing necessary for competitive aerospace, pharmaceutical, healthcare and other vital engineering sectors. EPSRC is unique in supporting basic manufacturing research through to the stage where applications can be developed by companies or agencies such as the Technology Strategy Board and the Energy Technologies Institute. The new EPSRC Centres will undertake the latest generation research to address major long-term manufacturing challenges as well as emergent market opportunities. The centres are supported by leading industrial partners and a range of high-tech small and medium-sized enterprises across a wide range of sectors. The new EPSRC Centres form part of EPSRC’s wider ‘Manufacturing the Future’ initiative through which we will invest £80m annually over the next four years in manufacturing-related research and training. We believe we have achieved a diverse portfolio – with a mix across sectors and disciplines, and a balance between product, technology and systems focus.

EPSRC Fellowships in Manufacturing In 2010 EPSRC commissioned the Institute for Manufacturing at Cambridge University to undertake a ‘competitor study’ of manufacturing innovation in successful manufacturing economies. One observation was that leading academics

Dr Mark Claydon-Smith, EPSRC’s head of manufacturing, describes the thinking behind the research council’s Manufacturing the Future initiative, including its latest investment in nine new EPSRC Centres for Innovative Manufacturing. engaged in manufacturing-related research in the USA and Germany were likely to have a more significant industrial background than is typical in the UK. Taking its cue from these findings, the 2011 Plan for Growth announced our intention to support at least six new Manufacturing Fellowships. These Fellowships will support exceptional engineers and technology specialists from business who are able to lead a £1m programme of university research with real commercial potential.

High Value Manufacturing Technology Centre EPSRC is collaborating more closely with the Technology Strategy Board; an important part of this is a new High Value Manufacturing Technology and Innovation Centre (TIC), announced in April, which will play a key role in further bridging the gap between universities and businesses, taking research to the next stage of the innovation chain, and helping to commercialise the outputs of Britain’s world-class research base. The TIC will allow businesses to access equipment and expertise that would otherwise be out of reach, and conduct their own in-house R&D.

Industrial Doctorate Training Centres in Manufacturing In January, EPSRC announced five new Industrial Doctorate Training Centres in Manufacturing . These will help engineering doctorate (EngD) students understand the needs of business, develop entrepreneurial skills, and undertake training in the most innovative future technologies in advanced manufacturing needed by business. Four of these Training Centres are associated with partners of the HVM TIC. (The full version of Dr Claydon-Smith’s overview of EPSRC’s work for the Plan for Growth is on www.themanufacturer.com)

Acloserlook

Through-life engineering services – Cranfield and Durham universities

Designing for total cost of ownership Manufacturing and services are now so well integrated that ‘manuservices’ has become the chief business model for several large manufacturers, especially for makers of very complex products. Rolls-Royce has become famous for selling ‘power by the hour’ rather than aero engines. BAE Systems, Bombardier Transport, GE and other big engineers do the same – selling ‘total cost ownership’ packages covering availability rather than equipment. “In 2010, 48 per cent of our revenue was derived from the delivery of ‘services’, which comprises readiness and sustainment – that is training, maintenance and upgrade of military equipment – and cyber and intelligence,” says Kate Watcham, head of external communications at BAE Systems in Farnborough.

It’s effectively insurance. You’re moving the risk from the operator back to the manufacturer Dr. Peter Matthews, Durham University The EPSRC centre for Through-life Engineering Services, led by Cranfield University, will analyse the interface of these disciplines in great detail. By doing so, the centre aims to save companies a lot of money in maintenance, repair and overhaul, or MRO. “Through-life engineering services is about understanding MRO and their relationship with manufacturing processes,” says centre leader Professor Rajkumar Roy of Cranfield University.“How can we select better manufacturing processes for maintenance, and similarly design products with better optimised through-life maintenance?” Cranfield partners with Durham University here, where Durham brings electronics expertise in areas like self-healing mechanisms and electro-mechanical systems. Lecturer in design informatics at Durham University Dr Peter Matthews says that throughlife engineering is capturing more MRO data and feeding back to the design stage. “There is a shifting paradigm from pure selling, where ownership of the device is transferred from the manufacturer to the user, to Rolls-Royce’s ‘power by the hour’ model where the manufacturer retains ownership

of the unit and effectively sells its functionality,” he says. “Now manufacturers are paying the bill for the product’s lifecycle costs. This changes the nature of how you design products – companies are now more concerned about how efficiently products run. Previously, while performance was important, they were more worried about just selling it.”

What specifically will the Centre do? One of the big shifts in making big mechanical assets like aeroengines and wind turbines is the introduction of availability-type contracts or total-care type contracts. “The manufacturer is taking more responsibility for longer through-life performance of the machine, and often they are expected to guarantee performance over a period of time, for a fixed price,” says Prof Roy. “Now they have to take responsibility for maintenance to achieve availability, and predictability, of systems. The centre is going to improve our knowledge by developing techniques to study what are the main problems in service, and how they link with actual manufacturing processes. For example; how do tolerances impact on life of components?” Simultaneously, the centre will look at the relationship between mechanical systems and electronic systems. “We will study what’s called ‘no faults found problems’, trying to find the root cause of those both from within mechanical, electronics and software interaction projects,” adds Professor Roy. The Centre will work on data analysis processes for mechanical components, self-healing algorithms for electronics, as well as physical demonstrators to show to industry how designs can be improved for better through-life availability. “It’s effectively insurance,” says Dr Matthews. “You’re moving risk from the operator back to the manufacturer. The manufacturer is able to take the responsibility and therefore change the design to improve reliability – it’s a virtuous circle.” Isn’t the danger that the better these assets are maintained, the fewer units will be sold? “Manufacturers get a lifetime of income now,” says Matthews. “So the change may be from the model where you had to sell many, to selling fewer but gaining revenue streams from the availability contracts.” Professor Roy says that the Centre plans to develop the discipline for energy, like wind turbines and maintaining nuclear plants. The third area is large medical equipment – CT and MRI scanners – which have regular maintenance to achieve demanding availability. “The overall objective is to reduce whole life cost for these big components,” he says.

1 Call for Manufacturing Fellowships http://www.epsrc.ac.uk/funding/calls/open/fellowmanufacturing/Pages/default.aspx 2 EPSRC Industrial Doctorate Centres in Manufacturing http://www.epsrc.ac.uk/newsevents/news/2011/Pages/growthinmanufacturing.aspx

Lead story EPSRC Centres for Innovative Manufacturing

Continuous Manufacturing and Crystallisation – Led by University of Strathclyde SME sees the benefit of collaboration to access lucrative market The EPSRC centre with the one of the widest groups of academic and industrial partners – seven universities and at least 10 companies – the Centre for Innovative Manufacturing in Continuous Manufacturing and Crystallisation will develop ways to scale-up from batch manufacturing to fully continuous manufacturing processes for high value chemical products. Dr Graham Ruefield works for Prosonix, a company based at the Oxford Science Park that manufactures improved performance drug particles for respiratory disease. He heard about the Strathclyde centre through NiTech, a spin out from Heriot-Watt University involved in oscillatory flow chemistry. What is this technique? “Too often in the past the industry has relied pon batch crystallisation,” says Dr Ruefield. “Manufacture is so dependent on the super-saturation history of the crystallisation; in some cases the last material coming out of solution is dissimilar to the first material, or you bring too much material out. Switching to continuous crystallisation should produce a consistent product in a continuous fashion, and represents a positive way forward for pharmaceutical manufacture.” Prosonix has some intellectual property in continuous manufacturing crystallisation, but is not in a position to develop fully-blown, scaled-up crystallisation methods. Their example shows why collaboration with universities is essential for the full exploitation of these technologies. “The opportunity is to look at a variety of methods, anything from microchannel reactors to bulk processing, and large scale continuous oscillatory flow where NiTech has a strong influence. Prosonix can assist in some of areas which apply our key skills, such as the use of proprietary ultrasonic (i.e. power ultrasound) equipment to help with the crystallisation. If we can help develop these methods with academia and other companies, with funding behind it, the potential rewards are great.”

and Smith & Nephew, Prof Williams says: “Research projects will be conducted in direct and indirect (via technology platform suppliers) collaboration with SME partners both using EPSRC Centre funding and Technology Strategy Board funding in regenerative medicine,” says Williams. “Projects are concerned with both hard technology and softer issues. The regenerative medicine sector shares many of the features of the medical device sector – particularly, that it is extremely heterogeneous and includes a large proportion of SMEs. “There is also an expectation that there will be an open innovation model and that ultimately many of the SMEs will be acquired by large companies and that these companies will provide the route to market for their technologies. This is an acquisition model rather than a supply chain model and probably reflects the emerging nature of the industry. The EPSRC Centre will also actively cultivate a network of SMEs, especially to listen to and understand their requirements.” CellMedica, Intercytex, RegenTec, TAP Biosystems and Tigenix are among the SMEs that the Regenerative Medicine centre works with. Assistance with regulation is another important role for the EPSRC centres. Prof Williams says that his centre will “champion the voice of SMEs within the reimbursement, standards and regulatory environment, another role we consider critical because emerging standards and regulatory approaches and reimbursement issues can add considerable burdens to small and fragile businesses. Communicating the perspectives of SMEs to government will also continue to be a key advocacy role for the EPSRC Centre.”

Regenerative Medicine – Loughborough University

With big names like Rolls-Royce, Ford and Unilever linked to the EPSRC centres, can the small guy get a look in? Yes – in fact, some centres have made it a mission statement to engage SMEs in their work. Professor David Williams runs the EPSRC Centre for Innovative Manufacturing in Regenerative Medicine at the Wolfson School at Loughborough University. It is one of the original EPSRC Centres launched in 2010. A well as working with blue chips like Pfizer

The Manufacturer.indd 1

19/05/2010 13:43:19

Have your say at www.themanufacturer.com

This lecture is free to attend

The IET Viscount Nuffield/Mensforth Lecture 2011 19 May 2011 at 18:30. International Manufacturing Centre, University of Warwick, Coventry, UK This is your chance to find out about the latest alternative energy technologies in development. UK industry has been inventing alternative forms of electricity for a hundred years. But as fossil fuel supplies dwindle, what’s next? Join us as Converteam explore today’s achievements in renewable power generation, tomorrow’s steps towards greater energy security, and the massive, futuristic steps, which are almost ready.

Speakers Steve Raynor, Senior Vice President and Derek Grieve, Director of Technology, CONVERTEAM NORTHERN EUROPE

Media partners

The Institution of Engineering and Technology is registered as a Charity in England & Wales (no 211014) and Scotland (no SCO38698). The Institution of Engineering and Technology, Michael Faraday House, Six Hills Way, Stevenage, SG1 2AY.

Free to attend – book your seat at www.theiet.org/nuffield

MSc Sustainable Manufacturing Developing future manufacturing leaders Developed with leading manufacturing organisations, this innovative course will enable you to become a future business leader, able to apply state-of-the-art manufacturing theory and expertise to sustainable manufacturing projects and initiatives. There is growing evidence that the manufacturing sector is responding to the challenge of sustainability. Increasingly Cranfield’s manufacturing research projects are focused on the promotion of renewable material use, remanufacturing, lower energy use and the minimisation of waste. With an acknowledged skills shortage in this area, graduates from the MSc in Sustainable Manufacturing are highly sought after by industry worldwide. For further details, and an application form, please contact:

T: +44 (0) 1234 754086 E: appliedsciences@cranfield.ac.uk W: www.cranfield.ac.uk/sas/msustm

CBIcomment Productivity growth rate of 5% in the UK

Productivity growth rate

of 5% in the UK Can the UK match Korea, and Germany, for productivity? Dr Tim Bradshaw, head of enterprise and innovation at the CBI, says yes – but manufacturing must become more of a knowledge-intensive activity, so that the UK can compete on value, quality, and innovation.

Manufacturing

is currently the shining light of the UK economy, leading the country’s recovery from recession. Official data from the closing months of 2010 revealed consistent and robust growth, with output up 6.8% year-on-year in January and a 1.3% rise in production over the previous three months. The CBI’s monthly Industrial Trends Survey in March showed how manufacturing continues to drive growth, outpacing the services sector. Order books are strengthening and firms are predicting a healthy rise in production over the next quarter. The question for policymakers now is how we build on this short-term growth and turn it into longer-term sustainable growth. The recent Budget and the Government’s Plan for Growth have helped secure the foundations for manufacturing’s continued recovery. Now, government and businesses must work together to create a competitive manufacturing base for the future that plays a full and increasing role in the UK economy and strengthens this country’s place as a lead player globally. The CBI recently published Vision and Ambitions for UK Manufacturing, our strategy for UK manufacturing to be at the forefront of economic development - a roadmap to creating the industrial capability the UK needs for future sustainable growth both in the home market and internationally. To achieve this, we believe progress must be driven through three key ambitions: Productivity – Achieving and maintaining a target productivity growth rate of 5% per year in manufacturing Innovation Leadership – Enhancing the UK’s reputation for innovation at all stages in manufacturing Exports – Doubling the growth rate of manufactured exports to at least match the OECD average by 2020. The UK must exploit its global reputation as a world class manufacturer by demonstrating that manufacturing is more than just production. There is a great deal of international competition to attract the knowledge-intensive manufacturing industries of the future. It is essential we harness our strengths in R&D, design and creativity, while building on

the massive improvements made in manufacturing productivity over recent years. We are now only just behind the US on productivity, but the race continues and we need to keep ahead of key competitors, such as Germany and Korea. Process innovation has helped us get ahead on productivity, but we now need to make sure the UK is seen as innovative right across the manufacturing value chain. It should be seen as the location of choice for innovative manufacturing investment – in everything from R&D and production right through to maintenance and service operations. We have solid foundations to build on and some amazing manufacturing brands like GKN, Jaguar Land Rover, Rolls-Royce and BAE Systems, but the policy framework needs to align better with the needs of businesses to encourage investment and growth. For the UK, manufacturing must increasingly become a knowledge-intensive activity, so that we can compete on value, quality, and innovation. Demand from export markets has been a key driver of manufacturing growth, and while this is vital to the long-term health of manufacturing, the UK starts from a low export base. Between 1997 and 2007, the UK’s average export growth rate in manufacturing was amongst the lowest in the OECD. Therefore, any upturn in exports must be set in this context and the Government must not become complacent when assessing our performance in this area. It needs to implement policies that improve our export performance in the long-term, including an expanded role for UKTI to help manufacturers access new sales markets, with a focus on sectors with the greatest potential for export growth. UK manufacturers have demonstrated their resilience and adaptability to survive and grow in tough economic conditions during the recession. Manufacturing’s importance to the health of our economy must not be underestimated and it’s crucial we take the right steps now to ensure the sector fulfils its potential and becomes a key driver of growth for the years to come. Dr Tim Bradshaw is the CBI’s Head of Enterprise and Innovation

Have your say at www.themanufacturer.com

Insight, inspiration & collaboration on your lean journey THE LEAN MANAGEMENT JOURNAL ANNUAL CONFERENCE 2011 This yearâ&#x20AC;&#x2122;s annual conference will again feature a cutting edge seminar programme designed to challenge the most experienced lean practitioner. Experts form industry and academia will explore the application of lean principles in environments from manufacturing to financial services, shaking lean leaders out of their everyday routines and discussing the latest approaches their research and real life programmes are taking. No matter which sector you work in or how long your lean career, this event will bring delegates new insight and reanimate the learning curve for programme owners.

Over 15 inspirational speakers and best practice case studies including: Steve Parnell Head of Service Improvement Liverpool & Broadgreen NHS Trust

Justin Watts Continuous Improvement Manager Burtons Foods

Eugene Murphy Lean Manager Delphi Diesel Systems

Dr. David Bamford Senior Lecturer in Operations Management Manchester Business School

SAVEÂŁ100

WITH THE EARLY BIRD OFFER

*Register before 20th May to qualify

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The Hilton Metropole Birmingham (NEC)

16th June 2011 - 09:00 to 17:00 In partnership with:

Sponsored by:

THE LEAN MANAGEMENT JOURNAL ANNUAL CONFERENCE 2011 LMJ Annual Conference - Closing Keynote Session

Conference Chairman

Dr Bill Bellows

Dr Nick Rich

President In2:InThinking Network

Honorary Fellow Cardiff University

Unlocking a Thinking Phenomena of The Toyota Production System Many current management practices naturally evolve towards sub-optimization while companies engaged in Continuous Improvement focus on seizing savings through an incremental "Faster, Better, Cheaper" attitude. By contrast, Bill, an Associate Fellow in the InThinking Network at United Technologies' Pratt & Whitney Rocketdyne will illustrate the distraction that TPS and other improvement methodologies, which have been adopted dogmatically by organizations across sectors, represent. He will clarify the unifying practice of continuous investment and solution tailoring which gives TPS its foundations and challenge delegates to consider whether their own lean implementations truly respond to their own business needs. Expanding on this theme Bill will encourage delegates to consider whether their approach to lean thinking is in fact limiting the scope of the competitive advantage available – he will ask “do we want to be able to travel down the same road faster, or should we be asking ourselves if there is a better road altogether.” Core to Bill’s beliefs is the idea that there are missing links in the lean fraternities understanding of the connections between organization thinking and the inherent systems which affect long term performance. Attendees will learn to better appreciate how their thinking is often causing them to focus on problem solving and not see a wider array of opportunities for valuable investments.

Nick Rich was a co-founder of the Lean Enterprise Research Centre with Professor Dan Jones and the Innovative Manufacturing Research Centre (Cardiff Business School). Nick still holds an Honorary Distinguished Fellowship at the University and he continues to write and supervise his masters/doctoral students. Nick has authored five books on lean thinking and numerous papers.

Peter Watkins Global Lean Enterprise & Business Excellence Director GKN Peter is responsible for developing, directing and implementing the Lean Enterprise and Business Excellence (EFQM) approach for GKN Plc (Aerospace, Automotive, Land Systems & Powdered Metals) in over 130 facilities 30 countries with over 38000 employees. In the role he has introduced “Flow of Value “ thinking into the organisation to break through traditional management thinking, works with a team of Global Continuous Improvement Leaders to support divisional CEO’s and Lean Directors develop their Lean capability and strategic direction and operates as key member of Lean Enterprise Sub Committee (chaired by GKN CEO) to develop strategic direction on structure , knowledge and process support . Peter is responsible for deployment of following Lean Enterprise approaches: People Excellence, Business Process Excellence - (Lean Office Processes), Production Excellence, Extended Value Stream – Supply Chain.

Professor Zoe Radnor

Martyn Craske

Professor of Operations Management Cardiff Business School

Head of Lean DWP

Lean in Services: Panacea or Paradox? This session will aim to challenge participants regarding the concepts of ‘Lean’, considering its use or intended use in service sector and, the degree which it is context-dependent. Based on research findings across the public sector including Central Government, Justice and Health the presentation will question and reflect on when, and how it is, possible and appropriate to transfer practices between not only organisations but sectors. The presentation will introduce the ‘House of Lean’ for public services as well as consider both the success factors and barriers in the sustainable implementation of Lean.

THE LEAN MANAGEMENT JOURNAL ANNUAL CONFERENCE 2011 16th June 2011 - 09:00 to 17:00 The Hilton Metropole, Birmingham (NEC)

The DWP lean challenge was staggering. 120,000 employees spread over 1,000 locations, but under Martyn’s leadership the DWP Lean Programme has engaged the business to generate impressive results. Getting the results has taken Martyn on a roller coaster journey of building lean capability and performance in one of the UKs largest public institutions. Join Martyn as he illustrates many of the leadership challenges he has faced on his five year journey, exploring many of the methods and techniques employed in a complex environment with many layers of management and stakeholders. Delegates will also get a greater understanding of how to develop cultural alignment in your leadership to ensure your lean journey keeps to the path. FOR THE PRIC E OF

To Register A Place Please Contact Benn Sponsored by: Walsh At:

Tel: 0207 401 6033 or 0207 202 7485 Email: b.walsh@sayonemedia.com

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Measure of

success Sir David McMurtry CBE went home one weekend to make a measuring device to better measure bent pipes. Four decades on his company is the leading metrology equipment brand in the world. Will Stirling gets the measure of a modest manufacturing leader.

I said hang on, there’s a commercial opportunity here, so I told John to forget answer phones 28

Everyone

is a fan of advanced manufacturing these days. But amid the clamour for nurturing more high technology companies and exports, remember what it takes to build a good company. Brains, an eye for a market, hard graft, thick skin, patience and a little luck and help. Sir David McMurtry’s story personifies what many people say UK manufacturing needs – large scale technology exploitation. In brief: a bright, young Irishman takes an apprenticeship with a small aircraft company in the 1960s. He climbs the ranks and becomes deputy chief designer at Rolls-Royce, working on the revolutionary Concorde engine. A spatial puzzle spurs him to invent a new method for precise measurement. Developing the product, he takes a leap of faith and leaves a very good job to commercialise it. Fast forward 35-years and the engineer has become a multimillionaire and chairs a market-leading global company with 94% export sales. But this freeze-frame oversimplifies brave decisions and the rigours of technology commercialisation in a cut-throat global market. Think about intellectual property protection alone. “In Renishaw’s history, at no time have we not been fighting a patent law suit,” says Sir David McMurtry, 71, in his office at the company’s New Mills headquarters in the Cotswolds. While the Renishaw story is in itself a good tale, Sir David’s early career is also a window into the evolution of the UK aerospace industry.

Interview Sir David McMurtry CBE, Renishaw

The perfect platform Born in Dublin in 1940, during his youth David Roberts McMurtry was a keen aeromodeller. He moved on to modelling and modifying engines and it was a natural step to pursue this interest into the aeronautical industry. “There wasn’t any knowledge, more enthusiasm!” he laughs. But his parents had other ideas and got him an interview with an insurance company. “I made a complete and utter mess of it. There was nowhere else to go.” He applied to Rolls-Royce, who turned him down, and the Bristol Aeroplane Company, who took him on, at 18, as a Craft Grade One Apprentice. Sir David, chuckling throughout, says they didn’t understand the Irish Leaving Certificate – equivalent to English ‘A’ Levels. The apprenticeship was designed for 16-year old starters and was broadly equivalent to ‘A’ Levels in maths and physics, which he found easy and achieved the next level quickly. He shone academically at Grade Two, whereupon he was transferred to the full-time engineering course at the Bristol College of Advanced Technology, which went on to become the University of Bath the same year McMurtry left. In the 1960s, these colleges were set up by aerospace companies to train advanced engineers – the kind of vocational education not seen in the UK since the launch of the Technology and Innovation Centres this year. In 2008, Sir David was awarded a doctorate in engineering by Bath University. Aged 30, McMurtry became deputy chief designer and assistant chief of engine design at the Bristol engine division at the world’s foremost aeroengine maker. He says this with modesty, almost apologetically: “For all the wrong reasons I managed to pop out at the top. And I found myself in charge of people, that was a challenge!” he jokes. He was in charge of the group who designed the “back-end” – nozzles and thrusters – of the 199, the Tornado engine. Firstly manufactured in Italy under a joint venture and then at MTU, all the conceptual design was done in Bristol. “It was the beginning of the collaborative programmes so common today,” he says. “Up to then, we did literally everything ourselves.”

The Eureka moment McMurtry’s job, simply put, was to sort out complex problems. One problem was the measurement of the pipe systems in the 593 engine, the Rolls-Royce/ SNECMA Olympus 593 used by Concorde. “The engines are dressed in pipes – instrumentation pipes, fuel, oil and air systems,” he says. “It looks like spaghetti. On Concorde the engine was square and the pipes could only come from the bottom, so the density of the piping was intense.” With the tolerances they required, there was a problem with fretting between pipes. The team were about to use the first automatic pipe bending machines, and needed to calculate how to measure the pipes accurately to make them in these machines which produced multiple, subtle kinks.

Mocked-up pipes were placed on a simple coordinate measuring machine (CMM), to measure the flat lengths, in order to write a programme for the bending machine. “We brought one of the first manual air-bearing LK CMMs with a hard probe – a solid ball on the end of a stalk. You literally held the probe against the pipe you wanted to measure, pushed a button and took a reading,” says Sir David. But with the smaller pipes, the engineers had to literally push them out of the way, making it impractical to get a sensible reading. The shop floor couldn’t make the pipes because they couldn’t measure them. “In those good old days, design and manufacture was separated by a wall – we’d say, don’t give me problems, just make what I told you to make! I went down there to take a look. It was obvious; they needed a touch probe,” ironic, as at the time no omnidirectional sensing probe existed. These pipe configurations demanded an omnidirectional probe, as the single axis probes could not access the sections in such cramped confines.

In those good old days, design and manufacture were separated by a wall – we’d say, don’t give me problems, just make what I told you to make! It was quite obvious; they needed a touch probe Applying his considerable brain, the solution was to build a probe to take multiple readings at the point of touch. McMurtry went home and made a touchtrigger probe over the weekend. The principle has remained essentially the same ever since. “The first one was crude but worked well out of the box,” he says. “Norman Key from LK saw it and asked me to make a dozen of them.” A colleague at Rolls-Royce, John Deer, was keen to set up a company making telephone answer machines. At the time, McMurtry was earning good money in a job you would be crazy to walk away from on a whim. His employer was aware of his work, and as soon as the invention worked, he patented it – with a Rolls-Royce patent. “I said hang on, there’s a commercial opportunity here, so I told John to forget answer phones.” The colleagues started a company with a simple structure – McMurtry (2/3) supplied the design and Deer (1/3) would get everything made and sold. At first McMurtry worked three days a week for RollsRoyce and two days on the company. How did he negotiate such terms? “I don’t think they wanted to lose me. Also, my boss was convinced it would flop and that I’d be back full-time within a few months.” In 1987 he bought the patents for the trigger probe from Rolls-Royce, and Renishaw was unleashed on the world market. For many, the rest is history.

Interview Sir David McMurtry CBE, Renishaw

Renishaw plc – Made in Britain Renishaw blows apart the stereotypes about UK manufacturing – a market-leading British manufacturer of equipment for manufacturers, based in the Cotswolds. It designs, makes and sells touch probes, CMM sensors, motion control encoders and more, all over the world. Volumes produced relative to competitors vary but as the original inventor, Renishaw’s reputation is world class. It has 50 offices in 31 countries, but most of the R&D and manufacturing is done in Gloucestershire, with assembly facilities near Dublin and in Pune, India. Half year turnover in the 2010/2011 financial year put the company on course to post revenues of well over £200 million, which would be a record. But it has not always been a smooth road to success. Sir David has worked through several

Biography Sir David McMurtry CBE 1958:

Joined Bristol Aero Engines (subsequently Bristol Siddeley Engines, and later Rolls-Royce) as Apprentice Machinist and Fitter

1964:

Graduated as a student apprentice to become Junior Designer, Rocket Design

1966-76:

Held various key roles in design and product development. His final role was Deputy Chief Designer, RB.401 and Assistant Chief of Engine Design

1976:

Became Chairman and Chief Executive of Renishaw plc with additional responsibility for group technology

1986:

Institute for the Advancement of Engineering, Los Angeles, USA - International Contribution to Engineering and Scientific Community Award

1989:

Awarded Royal Designer for Industry (R.D.I)

1994:

Received a CBE for services to science and technology in the Queen’s Birthday Honours

2001:

Appointed Knight Bachelor in the New Year’s Honours list for services to Design and Innovation and became Sir David McMurtry

2008:

Received a Lifetime Achievement Award at the annual West of England Business Awards, a special honour recognising Sir David’s contribution to the entire business community in the South West as well as his own company.

2010:

Recieved the General Pierre Nicolau Award from the International Academy for Production Engineering (CIRP) for contributions to the field of production engineering

Sir David has patented (or co-patented) over 197 inventions; approximately 47 in his time with Roll-Royce and 150 with Renishaw. Sir David is an honorary fellow of Cardiff University and holds honorary engineering degrees at the universities of Bath and Birmingham. He is also an active follow of the Institution of Mechanical Engineers and the Royal Academy of Engineering.

downturns, but had experienced nothing like the 2008/2009 recession. “It was brutal. We returned from the Christmas break and in January 2009 orders fell off a cliff.” The company had to make 20% of its employees redundant, a process that was reported less sympathetically by some of the media than others. Some local press seemed to mark out the company for particular vilification – senior Renishaw staff, already upset by the cuts, felt disappointed that little attention had been paid to the company throughout 35 years of growth until now. After building a company on values like strong community engagement, it seems fair to say the episode took its toll on Sir David. But by early April 2011, the company had over 200 job vacancies. The problem is finding the right people. “I support more STEM education in the UK, but we have to look abroad for engineers to fill vacancies while the appropriately skilled people here are in deficit,” Sir David says. The company has lobbied government, directly and indirectly, to relax the rules on immigration caps because its specialist skills needs are not always covered within the EU, let alone within the UK. Renishaw hosts university groups and schools all the time who visit to get an insight into a manufacturing company. Last year it launched its Applications Academy. “It’s not just the technology you have, it’s how you apply it,” says group marketing services manager, Chris Pockett. “Today we go direct to market more, so we do a lot of CMM and machine tool retrofits, and we’re selling the new Equator gauge – this needs a different skill set. The Academy is training staff to be more customer-facing.” Now in his sixth decade working in manufacturing, what does the future hold for Sir David McMurtry? “Its business as usual – I’ll be in the office tomorrow! Now, I leave the City to Allen and Ben [group finance director Allen Roberts and assistant chief executive Ben Taylor]. In the past I did my stint supporting industry, but Renishaw is involved lobbies government through the MTA [Manufacturing Technologies Association] and we support the skills agenda.” And for Renishaw? “Asia is the engine of growth. China represents an enormous opportunity, providing that you make things they don’t. The future of UK manufacturing is in advanced products like ours, selling to existing customers but increasingly emerging markets.” China is now Renishaw’s single biggest market, surpassing the US in sales in 2010. Contrary to some views, Sir David says, the Chinese covert top brands. “There’s a rising middle class and they want to buy famous British brands like Bentley and Burberry. This extends into machine tools and Renishaw is a favoured name for metrology in China.” Does this modest and cheerful engineer who has captained such a famous British brand have any regrets? “I have no regrets, but I have made many mistakes. Fortunately I’ve been able to cover them up with the positives.” The full version of this interview is available at www.themanufacturer.com

Have your say at www.themanufacturer.com

Disruptive thinking Why should a mature lean practitioner attend a conference on their topic of their expertise? Jane Gray talks to those responsible for delivering the Lean Management Journal’s Annual Conference to get a flavour of the challenges to be addressed and the value to be gained from an event which aims to shake up complacent thinking in the lean community.

The

Lean Management Journal (LMJ) will be a familiar publication to many TM readers. An increasingly popular sounding board for cross sector approaches to lean thinking, organisational improvement and transformation, LMJ is a resource aimed at confident lean practitioners. For such an audience, with a regular literature resource at hand and a wealth of knowledge and experience in the bank, what possible use could there be for a lean conference event, the likes of which litter the portfolios of most consultancies? Such events are generally aimed at building knowledge of the lean tool kit and demonstrating structures for spreading waste elimination techniques into the business beyond the manufacturing function. The LMJ Conference is not for the same delegation.

Sit back and make yourself uncomfortable To explain why the serious lean practitioner will not be disappointed in LMJ’s Annual Conference, the event chairman, Dr Nick Rich, Cardiff Business School states: “If you can come away saying you haven’t learnt anything from this event, you probably haven’t been listening. As markets speed up and the world becomes more uncertain

there is an ever greater role for innovation and being quite radical in our thinking. A lot of the speakers at this event are talking about transformations; radical changes that they have made to their business models – as opposed to continuous improvement. “In addition, a lot of the speakers come from lean environments that are well matured. These are companies that have sustained lean – not just implemented it – and it will be fascinating to hear more about the challenges that face the mature lean organisation. Not many people are aware of these.” Giving an overview of some other discussion areas he hopes will be raised at the event, Rich says: “I would really like to see how small businesses are ignoring their size and taking a greater role in the supply chain. I think it is important that companies double their improvement efforts and think beyond the factory to their supply chain. Another issue is how companies are using lean to cope better with regulation and bureaucracy.” Clarifying the call to action that this event puts out to lean leaders across all sectors, Rich adds: “The speakers at this event will be challenging – particularly those toward the end of the day. It is mandatory, absolutely mandatory,

that lean leaders engage in opportunities to shake up their thinking. If you do not, you will get stuck in a rut, complacent in your own method, ticking boxes and not really creating any value for your customer.”

Rattling the cage One of the “challenging” speakers that Rich anticipates will shake delegates out of this complacency is Dr Bill Bellows, Associate Fellow at United Technologies’ Pratt & Whitney Rocketdyne and president of the In2:InThinking Network, a non-profit dedicated to pioneering organisational improvement. Speaking for himself about the limitations of many current lean implementations Bellows states: “I suspect many organisations are practicing lean because their MD said ‘go do it’, and the MD said this because perhaps his peers on the golf course made it sound good. GE’s Jack Welch was known to have evangelized 6 sigma on a golf course. “I don’t doubt that the audience at this event will include those who are confident that their understanding goes beyond this and that they have contextualised TPS for their environment. But I would ask those individuals if they are absolutely confident that peers in their respective organisations have likewise

Dr Bill Bellows, Associate Fellow at United Technologies’ Pratt & Whitney Rocketdyne and President of the In2:InThinking Network

are broken” as opposed to innovating new business models which will give organisations the same progress trajectories that disruptive innovations have given to technology development and energy markets. Bellows will explain how the wealth of knowledge available across a variety of improvement communities has informed his framework for thinking; a framework without which: “the advanced tools and techniques which companies and individuals invest so much in will be underutilised, if not counter productive to the aim of the improvement efforts. Dr. Deming captured this essence in his so-called Second Theorem, “We are being ruined by best efforts, not guided by Profound Knowledge”. As to Profound Knowledge, this theory of management was the essence of Deming’s last book; a need to appreciate systems, people, variation, and knowledge,

plus their many interactions. ” Bill Bellows’ controversial provocation of lean adherents will be a highlight of LMJ’s annual flagship event, however the day will also include contributions from speakers representing lean advancement in a broad range of industries and environments. Martyn Craske, head of lean at the Department of Work and Pensions, will share his experiences of lean leadership in a programme aiming to engage with 120,000 employees spread across 1000 locations and presentations from GKN, Burton Foods, the Royal Mint and many others will showcase a variety of best in class applications of lean learning systems, tools, culture building, performance management and strategic alignment.

Lean Management Journal Conference

moved on in their understanding.” Bellows questions if there is enough being done within the “lean community” to create a curriculum that makes the organisational relationship with lean “accessible to people from all walks of life,” and says the largely US belief in root causality and sharing practices to eliminate waste are inconsistent with the thinking Dr. Deming’s original work. What Bellows is keen to see is a much more conscious effort on the part of improvement professionals to broaden their awareness of the different approaches available for exploration and exploitation; that is, beyond the lean community. He suggests that it is the responsibility of such individuals not to be content with the accepted wisdom of their community: “Lean practitioners tend to benchmark against themselves. That is, they benchmark within their community and they are unknowingly content to accept these boundaries. “I know the temptation to be like that. I was firmly entrenched, for a time, in the Taguchi community (Genichi Taguchi developed the concept of the quality loss function so central to robust design techniques) and experienced the same phenomenon of comparing notes with the fraternity on who was doing what. When I stepped back I was blown away by what was outside our tiny, insular world. I encourage those in the lean, 6 sigma, Deming, De Bono, systems thinking, and all other organisation improvement communities to accept that they have only got a piece of a greater solution.” Without this broader perspective Bellows asserts that companies will continue a trend of “fixing things that

If you would like to join us at the LMJ Annual Conference on June 16 please contact Benn Walsh for full conference details and booking: 0207 401 6033 or b.walsh@sayonemedia.com

RegionalFocus In association with:

The South West The South West of England is famous as a popular holiday destination and some may see its main economy based on tourism and farming, rather than busy factories and manufacturing. But Jane Gray discovers that the South West supports a large and vibrant industry characterised by the aerospace sector, advanced manufacturing and food and drink, while renewable energy has potential but needs much more work.

Fast facts and figures (All figures are for 2008) Number of manufacturing enterprises: 12,325 Regional manufacturing gross value added: £12.3bn (7.9% of the national GVA of approximately £155bn) Number of manufacturing employees: 263,500 (10.5% of national manufacturing employment) Largest sub-sector by employment: Aerospace and defence manufacturing Growth: 63% of SW manufacturing companies have recorded growth in the last six months Sources: ONS and EEF

addition to the tertiary sector organisations involved in tourism and leisure, there is much for the manufacturing industry to celebrate in the South West. Indeed the South West’s varied manufacturing base, with its unusually high proportion of SMEs across a broad range of sectors, has been a saving grace for the region throughout the recession and the slump in manufacturing. With the lowest number of large company headquarters compared with any other UK region, the South West is a good example of why government is trying to encourage entrepreneurial start-ups and grow small businesses. That is, a broad-based economy with a thriving network of smaller companies is far less prone to the ravages of economic collapse than one which is dependent on a handful of multinational firms in one or two sectors, providing those smaller firms are not over-reliant on a very small number of large customers. The South West region covers the Isles of Scilly and Cornwall right through to east Wiltshire, and Herefordshire and some of Oxfordshire at

RegionalFocus The South West

Key people Terry Slater, Director, EEF South West Terry Slater has been EEF’s regional director for the South West since 1998 following 26 years of experience in manufacturing. His career began with Lucas Industries in Birmingham and he progressed through jobs at General Electric and Ferranti International before he came to the South West as HR director at marine engineering company Devonport Management in Plymouth, which at the time was responsible for overseeing the refitting of Royal Navy nuclear submarines.

One to watch: Yeo Valley Organic

eo Valley Organic, the dairy products company based in the eponymous Somerset valley, is today a household name after humble beginnings back in the 1970s. The company nearly trebled its turnover in the last decade from £71m in 2000 to year-end figures of £186m in 2010. Forecasts for 2011 predict turnover of £210m from the company’s four production sites in the South West that collectively employ 1,400 staff. Amid this prosperity, however, the privatelyowned company has not lost sight of its local roots or its founding ethics, reflected in several accolades and awards including three Queen’s Awards in 2001, 2006 and in April this year. The awards, all for Enterprise in Sustainable Development, acknowledge the company’s commitment to supporting best practices for, and demonstrating outstanding performance in, sustainability across its operations. The latest award recognised Yeo Valley’s further sourcing of renewable energy, via an anaerobic digestion system, beyond its production sites to its offices. Managing director Tim Mead says: “The sustainable farming and manufacturing philosophy runs through everything at Yeo Valley and our renewable energy project is the latest development to help reduce our impact on the environment.” its northern limits. Apart from aerospace and defence manufacturing that combined is the largest subsector in the region (18,000 full-time employees in the region in aerospace alone), there is also a very strong food and drink sector, and the region is excelling in the emerging sectors of biotechmanufacturing for the biomedical and marine biotechnology markets.

Paul Goodhand, managing director, Knorr-Bremse Rail Systems (UK) Ltd Managing director Paul Goodhand has been nominated by EEF as a regional role model for the manufacturing industry. Beginning his career with Hiti International, Paul worked in UK, Korea, Japan and Hong Kong, in 2000 becoming MD of Knorr-Bremse Asia Pacific for three years. He joined Bruel Kjaer AS, the instrumentation subsidiary of Spectris plc, as vice-president before returning to the Knorr-Bremse Group in 2009, to take up his current position.

Sector overviews: Aerospace Key names: AgustaWestland, Airbus, BAE Systems, Beagle Aerospace, Boeing, GKN, Goodrich, Meggitt, Messier Dowty, Moog Controls, Rolls-Royce, Stirling Dynamics, Thales UK, Tods Aerospace The South West is home to one of the biggest clusters of aerospace and defence companies in the world – producing about 35% of all aerospace R&D investment in the UK. Uniquely within the UK, the South West of England is a world leader in manufacturing airframes (particularly wings), aero engines, rotorcraft and unmanned aerial vehicles. The South West aerospace cluster is big across both civil and defence sectors and includes 10 of the 12 world’s largest aerospace companies as well as over 800 SMEs supplying to the aerospace sector.

Food and Drink Key names: 2 Sisters Food Group, Badger Breweries, Constellation Europe, Dairy Crest, Gerber Juice, Ginsters, Yeo Valley, Tamar Foods, Wiseman Dairies, Wyke Farms Food and drink manufacturing in the South West employs around 37,000 people in over 3,000 workplaces. These businesses turn over about £5bn annually and punch above their weight nationally, contributing 6% of the UK’s food and drink exports and 8% of its productivity. Other important sectors: Bio-manufacturing and nanotechnology, ceramics, construction industry manufacturing, furniture manufacturing, glass manufacturing, paper production and printing, yacht building.

Regional focus The South West

Big hitter: Airbus

ircraft manufacturer Airbus is undoubtedly one of the biggest manufacturing names in the South West region. Its Filton base employs around 4,500 people in design and support functions, while more than 2,000 engineers work on a wide range of activities including wing integration, flight physics, structures and systems. The Filton site is also responsible for wing assembly and fitting out for the much delayed A400M military multi-role airlifter. Commendable though all of this frontline manufacturing activity is, none of it would be possible without the core research work which goes into devising engineering solutions, new manufacturing methods and investigating alternative materials. The aerospace sector in the South West accounts for about 35% of all aerospace R&D investment in the UK and Airbus is one company at the forefront of this, spending around £300m on R&D annually. In addition to Airbus’s specific research, the company is lucky to have its parent company EADS’s Innovation Works co-located at Filton. This site recently won a bid with the Regional Growth Fund to support its additive layer manufacturing research. “We were very pleased that the West of England was successful in its bid to become an LEP and the aerospace and defence community in the region played a huge part in supporting the bid,” says Katherine Bennett, VP political affairs at Airbus. “We also have a place on the board of the LEP. They have placed a big focus on supporting the sector and are keen to engage with business in a strategic way.”

Across these sectors, statistics from manufacturer’s organisation EEF, the Manufacturing Advisory Service (MAS) South West, the South West Investment Group and other bodies show that the positive trend in the region reported by The Manufacturer in October 2010 has continued over the last six months. The manufacturing barometer taken by MAS South West reported last month that 63% of companies have experienced increased sales in the last six months and that 60% expect to see the same pattern continue. Furthermore 43% of manufacturers, across all sectors in the region, are planning to hire more staff in the near future with 50% anticipating that employment will remain stable.

Somewhere, beyond the sea Such indications of confidence make a stark contrast with national employment trends. Nor is the optimism here a mere flash in the pan. Steady growth has been recorded since the beginning of 2010 across most sectors in the region and many contributors to the MAS South West barometer report that they expect stable sales to continue

at least into the next two financial quarters, with exports dominating slower domestic sales. This export strength is extremely positive and as Terry Slater, director of EEF in the South West, says: “It fits with the Government’s growth plan,” for long term economic wellbeing. Mr Slater says EEF is encouraging manufacturers in the region to innovate and diversify for export markets, with a particular focus on economies like Brazil and India. But such aspirations will mean overcoming, in part, the concerns which press-in on everyday operations, such as rising input costs. One of the South West’s sectors caught out by the swing in favour of exports over domestic markets is construction manufacturing. The recession hobbled the UK construction industry and, says Tom Bowtell, deputy CEO of Proskills, the sector skills council for process industries, orders are yet to return to anything similar to prerecession levels. Hope for this sector is, however, at hand in the South West as the planned new build nuclear power station at Hinkley Point in Somerset is expected to re-energise order books.

Airbus spends about £300m on R&D annually. The Filton-based aircraft maker was one of several aerospace companies behind the West of England group’s successful bid to become a Local Enterprise Partnership.

Regional focus The South West

In preparation for this upswing, manufacturing companies like Aggregate Industries have been investing heavily in skills and training.

One to watch: Stirling Dynamics

To pastures green

Alongside the generally buoyant outlook for the South West there are still many day-to-day challenges to face in business and operations. Just as with the rest of the nation, the well received 2011 Budget has been tarnished by the pressure to comply with a range of new environmental legislation. The carbon floor price, introduced at £16 per tonne in 2012 and rising to £30 per tonne by 2020, is the biggest elephant in the low carbon room. However, despite complaints about how environmental legislation is putting cost pressures on manufacturers and is being poorly managed in terms of timing and consultation, there is no denying that there are big benefits to be gained through exploiting low carbon technologies, reducing energy consumption and breaking into new, fertile green product markets. According to EEF’s Slater, opportunities are strong in the South West for the low carbon supply chain with an already strong renewable energy presence and obvious potential for further wind and wave development along the region’s ample coastline. But much more work needs to be done for local companies to realise their potential in the emerging low carbon economy, either in product and process innovation or through new markets, according to statistics from MAS South West. A massive 84% of respondents to the MAS barometer survey said that they felt the low carbon economy would have no impact on their business; a figure which has only dropped by 5% since Q1 and the intervening announcement of the carbon floor price, another green tax. Simon Howes, managing director of MAS-SW says: “The fact that most [manufacturing] businesses do not expect to see any impact from the low carbon economy suggests that many are yet to realise the benefits of low carbon, which could be as simple as improving product design or processes. Perhaps businesses do not fully understand what it means, and how embracing the opportunity can help a business grow.” This lack of confidence in understanding opportunities is unsurprising, given the increasingly complex landscape of environmental legislation which is being rushed in to try and push UK industry into a low carbon economy: “No one would argue that the move to a low carbon economy is not a good thing,” says Slater. “We need an economically sustainable approach. The trick, however, will be to move towards that in a way that doesn’t damage growth. We need an approach that looks deeply at impact analysis and helps sectors manage their specific implications.” Slater suggests that this is not yet being done; the whole green compliance landscape needs rationalising and that directives like REACH (Registration, Evaluation, Authorisation and restriction of Chemicals) and

tirling Dynamics is the UK’s leading independent landing gear specialist. The 90-employee company is a key player in the South West aerospace cluster and contributes to both domestic and international aerospace projects. Stirling Dynamics recently celebrated a new contract with Bombardier Aerospace to provide ground loads, flight loads and component loads analysis for the C-Series aircraft programme being manufactured in Montreal, Canada. Technical director Andrew Pfeil, says: “We are delighted to have the opportunity to work with Bombardier on their industry leading aircraft development programme. The C-Series contract is the realisation of a long-running dialogue with Bombardier and provides an exceptional opportunity for us to demonstrate our key strengths.”

WEE (Waste Electrical and Electronic Equipment) need to make industry understanding, in both directions, a priority. He recently reassured regional members that EEF will be on hand to give advice about how to act on these directives. Adapting manufacturing methods to shifting markets and regulatory requirements on a large scale would be difficult if not impossible without a strong network of industry support. While there has been a consistent presence from the South West arm of MAS to highlight national and international trends in competitive manufacturing, the abolition of the Regional Development Agencies and their staggered replacement with Local Enterprise Partnerships has left many manufacturers across the UK feeling that sources for advice and support have been very much in flux over the last year. According to EEF, however, this is now changing in the South West and, after some initial skepticism the new regional LEPs are bedding down with their industry partners to good effect. One South West LEP making the quickest impression on the business community is that in Devon and Somerset. Officially sanctioned in April, the LEP is now identifying and supporting important enterprise zones and transport projects. Paul Goodhand, managing director of Knorr-Bremse Rail Systems UK, has a vested interested in seeing the South West’s participation in such transport projects increase. Speaking of existing projects with high value to his company, the region and the country, Mr Goodhand says: “Knorr-Bremse is ready to be involved in the UK’s exciting high speed rail replacement project and we are well placed to do this. We are confident that through investment in our UK facilities we can not only supply the world class products and systems required for any [rail] application, but importantly we have what I believe is an unrivalled ability to locally support the in-service operation of the new trains over their entire life.”

Have your say at www.themanufacturer.com

Environmental regulations worries

REACH a head The storm brewing for manufacturers over environmental regulations is quickly turning into a tornado. With changes to the REACH and RoHS regulations bringing in a whole host of added costs and red tape, few see sunny spells on the standards horizon.

The

aims and objectives of REACH – the Registration, Evaluation, Authorisation and Restriction of Chemicals directive – are commendable, sure. But there are growing concerns among manufacturers that compliance rests too much on the actions of suppliers. In a nutshell, suppliers of substances covered by REACH must provide the customer with information on how to use the substance safely when sourcing from the EU. If the buyer wants to use the substance in a way that isn’t stipulated by the supplier they have to carry out a risk assessment to prove it is safe to do so. They have a year to complete this and any risk assessment could be subject to inspection by the Health & Safety Executive. Things stipulated might include the use of protective clothing when handling the substance or time limits per day for working with it. Around 3,500 substances – including commonly used solvents and ethanol – were put on the registered list last year. In 2013 a further tranche will be added before a third in 2018 brings the total number to around 100,000.

So far, not too many problems have been reported as the registered chemicals are mostly well known. But Jo Lloyd, director of ReadyReach, a sister organisation of the Chemicals Industry Association which advises firms on compliance, says issues are beginning to arise. “There seems to be a mismatch between what’s going in at registration as regards assumptions over how substances are used down the supply chain compared with what happens in practice. That’s a concern,” she says. “A lot of the communication part of REACH hasn’t happened yet, it’s only just starting – data sheets are being updated and information is beginning to flow down the supply chain including a lot of risk management measures which are not what the customers would do in general practice.” Ms Lloyd says this bureaucracy is starting to transpire into its dreaded paper form too. The standard registration paperwork consists of a 16 question safety data sheet but any additional notes on usage have to be detailed in the annexe. Most of the time this only amounts to one or two pages but, in cases where a substance has a wide range of applications across different industrial processes and ends up in variety of different end products, annexes have already reached several hundreds of pages. It will be the manufacturers’ job to sift through this documentation and find the bits that apply to them. The second part of REACH could begin to cause a few headaches too. Here, consumers can ask retailers to check if anything they buy in the shops contains any of a list of 46 ‘substances of very high concern’. The retailer has 45 days to comply and the request for information moves back through the supply chain. The problem is, a manufacturer might bring in components from the EU which were

Energy

and Sustainable Manufacturing

originally put together outside of it. The chain of information will be very hard to track at this stage but the manufacturer will still be obligated to state whether any of the substances are present. This list is expanding twice a year and Jo Lloyd says it will reach “a couple of hundred” within the next two years. “If you’re at that end of the supply chain you often don’t know if the plastic or alloy or paint coating contains these substances or not,” she

There seems to be a mismatch between what’s going in at registration as regards assumptions over how substances are used down the supply chain compared with what happens in practice. That’s a concern Jo Lloyd, Director, ReadyReach

says. “Manufacturers aren’t trained chemists or formulators. They buy something because of its efficiency, not because of its chemical composition.”

RoHS recasts, and widens, the net The RoHS recast (Restriction of Hazardous Substances), agreed in September last year, is to open its scope quite significantly. The original RoHS directive from 2006 covered eight out of the ten product categories defined under the Waste electrical and electronic equipment directive: household (large and small); IT & telecom; consumer; lighting; electronic tools; toys leisure & sport; and automatic dispensers. The recast brings in the other two – medical and monitoring & control – along with a new category 11 – all other electronic and electrical equipment not specifically excluded. The first two additional categories will come into force from 2014 while the third will be from 2019. What’s more, the original RoHS covered equipment which uses electric or electromagnetic fields to fulfil its primary function; the recast changes this to items that use electronic or electromagnetic fields to fulfil any of its functions. This means something like a gas oven which has an electric clock could now fall under the scope of RoHS. One of the main concerns for industry was that testing equipment used in research and development – particularly low cost, printed circuit board evaluation kits – would fall under the scope of RoHS following the recast. We now know this isn’t the case. They have been included in a list of exemptions effective as of 18 months from June.

Autodesk and Granta team up to offer sustainability from the outset Companies that use Autodesk’s Inventor product design software should at least be able to ensure that they are RoHS compliant more easily through the advent of the company’s new Eco Materials Adviser. The system – a free add-on for the Inventor software – allows users to analyse the energy required to build, the carbon footprint, the water use, the cost, the RoHS compliance and the end-of-life considerations for the whole product and each individual material within it. The user then has the option of swapping materials for ones that are more environmentally friendly which they can find by setting certain criteria or parameters. The new product has been developed in conjunction with Granta Design – a self styled materials information technology expert which was born out of a Cambridge University project in the mid nineties. The Eco Materials Adviser is linked by the cloud to Granta’s Materials Universe database which contains extensive details on 3,000 different materials, including properties, applicable processes, environmental performance, costs and aliases. An in depth report on the product’s environmental performance can be generated at any time with one click of the mouse using Autodesk’s Inventor Publisher feature. This makes it easy for designers to communicate findings with other members of the team.

More information is available at www.autodesk.com

There’s a lot of information that needs to be retained. There will be a lot of technical files that will need to be kept for ten years, including on obsolete products. But it’s no surprise; it’s the way things are heading Gary Nevison, Head of Legislation and Regulation, Farnell

eMerge IT

Case Study: Dunlop Background Dunlop is a name that has been steeped in the manufacturing history of the UK for over 100 years. In 1890 the Dunlop Tyre company first opened its gates in Coventry and it has been a part of the landscape ever since. In 2007 Dunlop Systems & Components was formed after a management buyout of the Dunlop Coventry suspension Division from Trelleborg AB. Today at their state of the art Coventry facility they design and manufacture Advanced Electronic Control Systems and Air Suspension components for the automotive and ancillary industry. Their chief products include: Air Springs (One of the first companies to produce these), Electronically Controlled Air Suspension (ECAS), Air Suspension Conversions, Mobility Systems, Testing Services and Electronic Design. They currently employ close to 100 people in their engineering and manufacturing operation and turn over approximately £10 million per year. They have sold over a quarter of a million ECAS systems worldwide, with over 10 million Air springs sold since they began producing them in the 1950’s.

The Issues The senior management team, the driving force behind the new ERP development coupled with the ERP team and project manager Carl Richards, saw the need for a more robust and efficient system to replace their old, outmoded legacy system which was left over from the days when they were a division of Trelleborg AB. The drivers for change included: DSC wanted a more flexible ERP system compared to their legacy system. The legacy system was overly expensive to maintain. The legacy system had data accuracy issues relating to BOM’s, routings and core part data. Most importantly the legacy system had a poor MRP mechanism resulting in operational inefficiencies.

data flow solutions that provided smooth and efficient work flows in the challenging environment of a manufacturing platform in a multi company set up. A concious decision was made by DSC to perform extensive data cleansing before migrating to the new system. This ensured the ease of use of the various data analysers to get accurate results every time with a press of a button in every area of Priority. The priority implementation has provided: Project Management - The project management module is now an integral part of the system rather than a stand alone unit in the software. This allowed transparency for the engineering department towards the other users of the system. Executive Reporting - Dunlop have the Business Intelligence module as part of their package which allows executive dashboards within the Priority environment as well as on the personal outlook interface, allowing the management an excellent snaphot and drill down capability on the business processes and performance. Production Efficiency - During implementation, Dunlop timed all operations and reviewed BOM’s for all parts. As a result of this data review and input, accurate product prices are now available through Priority. Operations on the shop floor are constantly reviewed and adjusted as part of DSC’s continuous improvement strategy. There is a growing trust towards the data coming from the new system as opposed to the old system which was often misleading. Inventory Management - Both final products and raw materials are managed effectively using FIFO and lot control and are easily traceable. Manufacturing and raw material procurement is closely monitored and managed utilising full benefits of the Priority MRP and purchase planning modules.

Dunlop aim to implement a full ERP package concentrating on production, logistics and project management. Their plans for the future include extensive use of shop floor data collection, PDA’s, bar coding and live reporting of production.

Our Solution eMerge Information Technology provided an overall standard system with pertinent modifications to suit the business processes at DSC. We put together processes and

Tel: Email: Web:

+44 (0)845 230 6740 info@www.emerge-it.co.uk www.emerge-it.co.uk

Energy and Sustainable Manufacturing

But Gary Nevison, head of legislation and regulation at electronic components maker Farnell, says we shouldn’t count our chickens. “There’s every chance that these, like most of the exemptions, will indeed be included with the open scope in 2019,” he says. “This could well just be a period of grace.” Industry’s concerns are that this is just another barrier to growth. Another bonus is that, after pressure from industry, this recast includes no new substance restrictions, although three plasticizers and a flame retardant have been put onto a list for urgent review. A Commission has been tasked with reviewing the directive and will report back within the next three years on the scope, the substances and how the assessments will be done. The latter could either follow the REACH way of risk assessments or RoHS based as now, which is just defining hazards and whether alternatives are available. The route they choose will have a big impact on the amount of data firms will need to collect and process. Gary Nevison says the fact that the RoHS is now going to become a ‘CE Mark’ initiative, meaning products must display their compliance, will bring concern enough for SMEs in this regard. “This looks like it could be a bottleneck,” he says. “A lot of small firms approach me and say ‘God, this is horrific’, and it could well be. There’s a lot of information that needs to be retained. There will be a lot of technical files that will need to be kept for ten years, including on obsolete products. But it’s no surprise; it’s the way things are heading.” An independent review is currently being carried out for the Department for Business, Innovation and Skills on the cost burdens of RoHS on industry. We await their findings.

Manufacturer spotlight: Renishaw Engineering company Renishaw had the vision to start early on its RoHS compliance. If it hadn’t, Peter Satchwell, director of product compliance & quality, says the company “would certainly have its work cut out for it now”. Only one of Renishaw’s products fell under the original scope but many of its metrology products will fall under the control & monitoring category of the recast. As these products fall under the industrial side, they’ll have to be compliant by 2017. Because of the foresight that this would indeed be the case, Renishaw has already put a lot of resources in to ensure its design, sub contract work and supply of proprietary parts across all of its products are leading to compliance. Following calls from the market place, it already declares its compliance on a number of lines. Renishaw’s investment into RoHS has included Michael Gambie’s dedicated role as RoHS project manager, along with further buy in from many other personnel. “What we’ve learned is that the tail is quite long,” says Gambie. “Some people see the length of time as quite a way away but in effect, think about the length of the supply chain, the earlier you start the better.” He recommends companies start talking to suppliers, customers and partners now to gauge where they are at and where they need to be. Of course, many industries have a lot less time than Renishaw’s to become compliant. Most of the company’s work so far has been in support of non-electrical items and this can be down to things as small as checking the inks and adhesives on product labels. This has presented some bottlenecks. Gambie says many suppliers outside of the electrical industry – particularly the smaller companies – have a limited knowledge of the directive. “This means it can be difficult to get the data we need and sometimes means we have to undertake assessments on their behalf,” he says. Peter Satchwell adds that the quality of the data sometimes does not meet Renishaw’s standard and there have been times when the company has felt the need to validate it. “To some extent there’s a lack of information available over what is acceptable information,” he says. “Perhaps there could be more readily available and easy to understand guidance for suppliers.” The deadlines in themselves aren’t necessarily a bad thing, according to Satchwell. “At least there is now clarity,” he says.

Have your say at www.themanufacturer.com

Profitable. Secure. Paperless.

Celtrino

Supply chain automation made easy

the Smart Admin way

the outset or subsequently, that integration isn’t for them.

Transitioning suppliers to on-line trading can take a lot longer than you think, says Celtrino’s John Behan. But it doesn’t have to be that way, he tells Malcolm Wheatley.

Simply put, explains Behan, Celtrino’s Smart Admin range of e-solutions permit trading partners to exchange information electronically, but make their own decisions as to how and when to integrate those transactions into

their respective systems. For a supplier, for instance,

is, it seems, a truth that is

IT budget having been spent on

rarely acknowledged: an

other priorities. Or the cost of

receiving a customer’s order can

awkward fact that tends to get

integration might be unaffordable,

be as simple as logging onto the

swept under the carpet.

given the nature of the systems

Celtrino Smart Admin trading

But for all of that, it’s a very real

to be integrated—especially in

platform and printing the order off—

issue, stresses John Behan, sales

the case of legacy or custom-

entering it manually into whatever

director of Dublin-based supply

built systems. Or the volume of

systems they desire, exactly as they

chain document automation

business might be too low to

would if the order had arrived by

vendor Celtrino, which numbers

justify the expense.

post, fax, or over the phone.

companies such as Unilever,

“It’s one thing for a customer

Similarly, the supplier can

Coca-Cola, Imperial Tobacco,

to say: ‘We want to deal with you

respond electronically—sending

Mars and Heineken among its 600

electronically’, and quite another

out an order acknowledgement,

or so customers.

for that to make sound business

for example, or an Advance

sense to every supplier involved,”

Shipping Notification, or alerting

of supply chain automation

says Behan. “As a result, time and

the customer to a change on

projects is underestimated, or take

again we see automation projects

quantity or price.

years to deliver an ROI that turns

that take longer than expected,

out to be only a fraction of what

with only the very largest suppliers

is that you don’t need back office

had been anticipated,” he says.

having made the effort.”

integration to do these things,”

“Time and again, the complexity

“And the problem? It’s difficult to

And an automation project that

“The pure genius of Smart Admin

stresses Behan. “You just need

get suppliers on board: they aren’t

runs over, in short, is one that by

a desktop computer and a web

willing to make the investment in

definition will only deliver a fraction

browser such as Microsoft’s Internet

effort and resources to integrate

of the anticipated benefits.

Explorer. If you have a computer

into their own back office systems

There is, though, another way.

and a printer, you’re all set—and the

the flow of documents that comes

One that delivers many of the

time taken to switch all your paper-

from customers.”

benefits of automation, but without

based transactions to the platform is

requiring ‘Day One’ integration

minimal. Supplier ‘on-boarding’, as

perspective, though, that

with back-end systems. And it’s a

it’s termed, just isn’t an issue.”

reluctance can be understandable.

way that allows suppliers to move

There might, for instance, simply

towards that integration at their

electronic trading get any simpler?

be no budget available, with the

own pace—or decide, either at

It’s hard to imagine.

Viewed from the supplier’s

Can business-to-business

For more information please visit: www.celtrino.ie

Lean;

the mother of Don Reinertsen, president of product design process specialist Reinertsen & Associates, shows that just because you understand lean, doesn’t mean you understand lean product development.

Don regularly lectures on lean product development

all know the story of the spread of lean principles. Starting in Japan and spreading around the world, lean thinking and the values of the Toyota Production System have revolutionised manufacturing. With the appearance of, Lean Thinking, this revolution expanded beyond manufacturing. But alas, the world isn’t always friendly towards new ideas and when lean methods first arrived in product development the reception was not warm. Unenlightened engineers grimaced and complained, “You don’t understand. That won’t work here; we are not manufacturing.” And in fact, although some of the grimacing was due to the ineptness of the initial efforts, the engineers were right, inept? Isn’t that a bit harsh? I’ll let you be the judge, but I saw lean consultants visit engineering departments and draw outlines on desks to mark the location of staplers. This 5S approach brought great value to manufacturing, but being able to find staplers quickly had no meaningful impact on product development performance and so the use of this tool was flawed.

Context is everything Such attempts to impose lean practices in product development environments did not work because they assumed leverage for value creation would be found in the same places that it was found in manufacturing. It is not. The way product development makes money is fundamentally different from the way manufacturing makes money. Understanding what drives economic results in any environment is the first step to improving economic performance. One key difference between manufacturing and product development has huge implications: manufacturing is repetitive; product development

never covers the same ground twice. To consistently produce an identical product a thousand times in manufacturing will make you money. In design replication it is 100% waste. This introduces a need to constantly change the recipe of day-to-day work and change introduces uncertainty. It is self-evident that variability is a negative for manufacturing, but it is a bad assumption that what is negative in one environment will be negative in another. In product development variability is the companion of innovation, and innovation is the engine of profit. Taking this into consideration it shouldn’t surprise you that the early efforts to eliminate product development variability had some rather embarrassing side effects.

Learning from mistakes Today we have progressed to what we call, Second Generation Lean Product Development. While many lean manufacturing ideas require absolutely no modification for use in product development, it is my belief that mixed with these good ideas are others that misbehave when they are taken away from a manufacturing setting. These non-transportable ideas are a great danger and must be left behind. Starting with the positives, it is clear that reducing in-process inventory shortens cycle time. Reducing batch size is the key to reducing in-process inventory. Reducing transaction cost enables batch size reduction. These are solid ideas which can be applied to the product development process for great advantage. For the consideration of our non-transportable ideas however, let’s return to the single most toxic idea for product development, the idea that variability is bad. No lean manufacturing expert would question this belief; their experience repeatedly proves to

Lean Manufacturing

them that it is true and this raises a big challenge for companies with a deep understanding of lean manufacturing to unlearn some of their core beliefs. The intrinsically high variability of lean product development, and its beneficial influence on innovation, motivates product developers to be clever in handling variability. This can be achieved by using queuing theory, a branch of applied statistics dating back to 1909. Queuing theory lies at the core of the design of modern telecommunications systems, and it gives us deep insights into how to achieve flow in the presence of variability. In fact, the more we understand queueing theory the more we realise that telecommunications systems are probably more useful role models for product developers than manufacturing systems. Another idea from lean manufacturing requiring major overhaul for lean product development is the concept of first-in, first-out or FIFO. This is optimal whenever all work has the same delay cost and the same task duration. But, what happens when we deal with non-homogeneous work – as in product development? Just imagine a hospital emergency

room that decided to use a FIFO processing. A patient with a heart attack would be told to wait while a patient with an earache was treated. FIFO is fundamentally wrong for non-homogeneous flows. Other prioritisation approaches make much more

Product development work in progress on the Isle of Man

Ebly Sanchez comments: This article illustrates the most fundamental differences between lean product development and lean manufacturing and their impact in the overall innovation of the product creation process. The reader should however be aware that the customer focus, which is at the centre of lean thinking, links to three important variables in lean manufacturing which in turn make it essential that lean thinking is intrinsic with product development. These variables are: manufacturing feasibility (both people related and product), parts availability, and uptime (via an effective reliability and maintainability process). Making the product creation process a consistent part of the manufacturing feasibility process will secure both product quality and efficiency. As a reference for better understanding of the lean product-process development I refer readers to the works of Prof J. Liker, University of Michigan. Peter Watkins adds: Lean product development cannot use all the same methods and approaches as manufacturing and this article gives many good reasons as to why this is so. Manufacturing methods or systems such as “pull” and leveling are put in place to improve the way we move towards a process target condition, not as the means of the end results themselves. Can we still count the kind of product development described in this article as ‘lean’ even though it diverges from certain lean manufacturing tenets? Resoundingly, yes! The number one lean principle is ‘value’ and making it flow, not simply variability reduction. Lean product development principles for value creation should focus on setting target process conditions to improve cadence and flow as well as creating reusable knowledge through set based development. Following this article, further points readers might want to explore are the methods and processes which can be used and how they are preformed in a product development environment. Three key areas are: Visualisation of work for daily resource and demand planning. As engineering man hours required are hard to plan it is crucial to manage resources and demand daily to see if the project needs resource support and if work is on schedule Traditional product development thinking is around gate review stages versus lean thinking. Mini kaizen events can be helpful for making decisive action points in the process Simplification of the use of current product development tools such as: voice of customer, risk analysis, limit curves, component selection and design, design for assembly, design for manufacture

Lean Manufacturing

sense. For example, in product development it is often optimum to prioritise work on the basis of cost of delay. This issue of costs brings us on to the lean manufacturing belief that it is better to prevent a problem than it is to correct it. This is the foundation for our drive to minimise defects and to achieve 6 sigma quality levels. Is this appropriate in product development?

Roger Callister, a Six Sigma Black Belt and consultant to the Isle of Man Aerospace Cluster’s Journey to Process Excellence Programme comments on Reinertsen’s viewpoint: Lean methods can fail in any environment especially when they are implemented as quick-fix initiatives. Process improvement projects can show great short term performance only to be “forgotten” due to the lack of corporate process control and standardisation. To sustain process improvements and reap the benefits year on year a company needs to have a continuous improvement culture based on standard processes which are followed, controlled and regularly reviewed. The Isle of Man Aerospace cluster, with Government backing, has started a project to help its members get the basics of process control correct and create continuous improvement cultures. Then, and only then, will the use of lean and six sigma methodologies be used to drive the cluster to true world class performance.

Manufacturing environments favour a focus on prevention because they have long run lengths. This means the cost of avoiding a problem is paid back hundreds or thousands of times. Product development is often a one-time activity – this makes it much harder to recover the effort invested in prevention. To use a simple analogy, most of us use the spellcheckers in our word processors. If prevention was really a universally superior strategy we should teach ourselves to become perfect typists and perfect spellers. This makes no sense because the cost of prevention far exceeds the cost of correction. In fact, whenever the cost of prevention is higher than the cost of correction it makes no economic sense to prevent problems. Such ideas are sacrilege to lean manufacturing experts. Sacred lean manufacturing concepts like “pull” also break down in product development, where we must anticipate demand. Why? Product development lead times are much longer than acceptable customer response times. To prevent customers from waiting we must start working on a product long before customers ask for it, or risk being late to market. Imagine a baker using “pull” and waiting for a customer to order a baguette before they started baking it. And this brings us to the most fundamental difference between the approach of lean product development and that of lean manufacturing. Lean manufacturing is, at its heart, a qualitative system. Its rules are treated as tenants of faith. It is a world of ‘always’ and ‘never’. Always eliminate variability, always let the customer pull, always front-load decisions. In lean product development there are no absolutes and this requires quantitative rather than qualitative approaches. Should we operate the CAD areas at 80% utilisation with a two week queue, or 90% utilisation with a four week queue? We can’t compare a two week difference in queue size with a 10% difference in utilisation unless we can express them both in the same unit of measurement. In practice, we evaluate such decisions by translating all performance changes into their impact on lifecycle profits. Rigorous economic decision making is one of the key hallmarks of second generation lean product development.

Be bold

Process control is bringing improvements to product development at the Isle of Man’s aerospace cluster

Lean product development is an exciting body of knowledge and probably the only management approach that can simultaneously improve cycle time, quality, and efficiency. Furthermore lean product development is rapidly evolving and therefore a challenge for companies that don’t like using ideas until they have become stable. Yet, we should recognise that there is a difference between stability and usefulness. The original IBM personal computer was introduced in 1983. If you decided to wait for it to stop improving before you bought one, then would you still be without a computer today. Consider the implications for competitive wellbeing.

Heather Fry HR Manager, MANN+HUMMEL (UK) LTD A late starter, Heather Fry joined German company MANN+HUMMEL UK’s Wolverhampton factory as a production assistant with no formal qualifications at the age of 38. That makes it all the more impressive that less than 15 years later she’s now in charge of all HR across the factory.

Within

months of joining MANN+HUMMEL on the shopfloor, one of Heather Fry’s line managers noticed a talent in her which, she says, she herself never knew she had – an intuitive adroitness at interpersonal management. She was quickly moved across into training roles; first as coordinator and soon after as officer – a role she carried out for five years. She then spent another five years as HR officer before moving to the manager role and taking full control of the department in 2008 with overall responsibility for employee remunerations, training, disciplinary & grievances, pensions, health & safety and quality auditing. During this time Heather embarked on various training schemes which included finding herself on a University degree course with fellow students half her age. “They had the academic nous but it was always me they came to when they wanted to find out how something worked within a real business!” she says. Heather’s biggest success to date has been her introduction of a scheme which lowered sickness leave rates from above nine per cent to less than two per cent. Tasked with finding a solution to the growing absence problem at the company, Heather’s research led her to the Bradford Factor system; an absence monitoring method which objectively takes into account both the number of occurrences and the amount of time taken off for absence in a rolling twelve month period. Calculation: No of Occurrences x No of Occurrences x Number of hours off divided by 12 to give the average score for the twelve month period. Heather tailored the system to fit MANN+HUMMEL’s needs and monitors the average scores of all employees against a trigger point that then brings employees in for review. “Before, the company paid 25 days sick leave per year and it was up to the line managers’ discretion whether any action needed to be taken,” explains Heather. “This led to all sorts of problems including that some staff members complained of favoritism

towards others. We took away the 25 days and introduced statutory rates and introduced the Bradford Factor system across the board. The new system is fair to everyone, it’s easy to monitor and it takes away any difficult decisions from managers.” Heather’s other accomplishments include driving the company’s success in achieving the Gold Standard in the Investors in People award and CV in brief – introducing a range of Heather Fry employee benefits including a performance-related bonus scheme for the operators Title: HR Manager and flexi-time. Age: 52 Heather says the biggest Skills and achievements: skills she uses in her role Post Graduate Certificate in Human are communication and Resources Development understanding. “It’s not just Post Graduate Diploma with about pandering, it’s about distinction being fair,” she says. “The Finance for non-financial managers worst thing you can do is give the impression that Coaching and mentoring you’re on someone’s side Interpersonal skills during a dispute meeting Introduced health & safety in the if it turns out later that you work place have to take disciplinary Career Summary: measures against them. But 1997 - Feb Production Operator what I ensure I do is talk to 1997 - 1998 Training Co-ordinator everybody on the same level, 1998 - 2003 Training Officer whether they’re a director or a shop floor operator. I’ve 2003 - 2008 HR Officer seen both sides of the coin 2008 - to date HR Manager and and that’s been a great asset introduced Bradford Factor System to me. Interests: “I really want people to Gardening, socialising and spending know that I’ve worked hard time with grandchildren/family to get to where I am today, but this would not have been possible without the support and investment from MANN+HUMMEL, therefore I thank them for giving me the opportunity to develop and grow within the company.”

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A business continuity plan can keep a company in business through times of crisis, but very few organisations have one ready to deploy when a disaster hits. Roberto Priolo investigates.

is vital for a business to be able to recover quickly and effectively from a disaster, be it natural or man-made. To do so, it is necessary to be prepared and ready to take measures that ensure the business is up and running as soon as possible. Figures show that almost half of companies hit by a disaster never recover, despite these numbers, 59% of firms in the UK don’t have a business continuity plan (BCP). The threats that hover, like Damacles sword, over businesses range from IT systems going down to the destruction of a key site (caused by a fire or floodings, to name a couple), from the loss of staff due to pandemics to the loss of important equipment. The development of a BCP consists of five stages: analysis, design of the solution, implementation, testing and maintenance. According to Philip Coley, senior strategic risk consultant at Zurich, the first step tends to be the one that creates most problems. “Analasys can be the trickiest – companies often want to get immediately

to planning, but you need to understand the organisation and how it operates first. How it is structured, how it is divided up, the number of facilities it has are all important pieces of information, without which you can’t determine what the most critical parts of the business are,” he says. The analysis is, above all, a risk assessment. It means understanding the activities that are critical to the business, identifying the areas where the company needs more protection and determining the recovery time which operations would need to be restored – usually from 24 hours to a week. Charlotte Smith, a consultant at business continuity specialist Teed, adds: “Any process that is critical needs to be understood, and contingencies need to be thought through, pre-incident, in order to ensure that the loss can be managed effectively and is not going to impact on customers post-incident.” In the analysis phase, also known as business impact analysis, it is fundamental to maintain the right balance: firms frequently see everything as a priority

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Zurich’s manufacturing case study A UK manufacturer of plastic packaging had enjoyed significant growth, largely as a result of supplying a successful major food retailer. The retailer had begun to demand a better understanding of its suppliers’ business continuity plans but the manufacturer knew it had little detailed knowledge of how to satisfy that demand on its own. A Zurich risk engineer worked with the company by facilitating a Business Impact Analysis (BIA). This involved direct input from senior management, who were given a framework in which to express the key areas of vulnerability and to prioritise areas for action. As a result of the BIA, the firm was able to produce and present to its major customer an outline response plan and a demonstration of the measures being put in place to mitigate other inherent business continuity vulnerabilities.

and ask for plans that go in to too much detail, and ultimately focusing on processes that aren’t critical at all. On the other hand, being too generic can make a business overlook potential problems. When a business continuitity plan is produced, different levels of management might disagree on what is critical and what is not: strong communication is the best way to overcome such problems and let the company speak with a single voice. “You want to focus your plan on priorities, which is very hard to do. Some want to plan everything, others too little. For example, imagine a firm has more than one location: the BCP might be good for one facility and not so good for others,” Coley says.

Risks and responses Compared to other types of businesses, manufacturers often face greater risks, including supply chain disruption, health and safety problems and loss of key equipment, among others. According

to Supply Chain Resilience 2010, a survey by Zurich, manufacturing counts adverse weather and product quality issues as the major causes of supply chain disruption, which impacts the sector so heavily. Andy Osborne, consultancy director at Acumen, explains: “In some ways – assuming we’ve planned and prepared adequately – recovering computer systems and office accommodation is relatively straightforward. Obtaining replacements for bespoke equipment with long lead times can be more problematic and therefore there is often more emphasis on the risk management element of business continuity – on prevention rather than just cure.” Many manufacturers see a conflict between business continuity planning and Just In Time practises, but the two can work together if the right approach is deployed. Smith confirms: “If you rely on Just in Time you need to understand your relationship with suppliers, work with them to ensure they can maintain their agreement with you. There are contingencies they can put in place, and contingencies you can put in place. They might not conform with a JIT process, but they help in the sense that you know that you have what you need when you need it. You are not going to change your practices, but you can make them work for you.” Overviewing the plan helps to determine whether there is an actual need for a separate area for each threat, or if some of them can easily be put together under the same area, like adverse weather conditions and supply chain disruptions. Creating a clear, effective plan can save a company hundreds of thousands of pounds, sometimes millions, and can ensure the survival of

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the business itself – according to the Zurich survey, supply chain disruptions (which 72% of respondents experienced at least once) cost 10% of companies at least €500,000. The concepts of business continuity planning and disaster recovery are often kept separated, but they actually represent two different aspects of the same process, and consequently two different approaches. Coley explains: “There is a danger in concentrating too much on the recovery in the first 24 hours following a disaster. Yes, business continuity planning is about survival, but it also focuses on long-term recovery. With this in mind, non-priority areas should wait and risks affecting the company as a whole should be tackled.” The response put in place in the first, critical hours following a disaster will determine the future of a business, but prevention can also contribute to its well-being. From this point of view, a business continuity planning exercise can be an occasion to identify the worst risks and start mitigating them. Osborne adds: “Business continuity management isn’t just about disasters and crises - it includes reviewing operational processes, and improving procedures and practices to increase resilience and reduce errors and downtime.”

Gold, silver and bronze For a business continuity plan to be efficient, coordination among different levels of management is of vital importance. Like in the public sector, these levels can be referred to as gold, silver and

In this article you can find out: Half of companies hit by a disaster never recover. However, 59% of UK firms don’t have a business continuity plan. Supply chain disruption is one of the biggest threats to manufacturing businesses. It costs 10% of companies at least £500k. To be effective, a business continuity plan needs to be simple, useable and practical, it needs to speak to everybody in the company. Only 16% of those executive teams that take organisations through major changes, apply business continuity management to understand the implications of their decisions.

bronze, which translate into strategic, tactical and operations levels. Most senior – or ‘gold’ – managers decide the overall strategy deployed to respond to a disaster; silver management represents those people who have a responsibility for entire departments or sites; the bronze level, when present, makes for a much more detailed plan. Smaller companies tend not to need the bronze level, as it could overcomplicate the plan. If looked at from the right perspective, this separation of levels can lead to a very well-designed response, keeping in mind that not all disasters are caused by a piece of equipment breaking down or the loss of a site. Coley adds: “You want to plan for every possible scenario. People think of BCP as related to a merely physical loss, but there are also major public relations incidents, for example like damaging information being published in the local paper. That needs a coordinated response too.” A more pro-active approach from boardrooms would also prevent businesses from being unnecessarily exposed to risks. According to the Business Continuity Institute (BCI), while 75% of executive teams took their organisation through major changes, such as a merger, barely 16% applied business continuity management to understand the implications of these choices before making the decision. Companies should concentrate on the value add a business continuity plan can bring and the impact it can have on the future of the business. However, like anything related to planning, BCP can turn into a bureaucratic exercise very quickly. It is important to keep a plan simple – bearing in mind the company as a whole needs to understand it – and then keep it up to date. Coley explains: “They [BCPs] quickly become obsolete, so they need to be practical, useable and easy to maintain. They also need to be concise and relevant, and they have to speak to the right people.” Teed’s Charlotte Smith agrees: “Everybody needs to be able to pick up the plan and understand who should be doing what. It might be a classic phrase, but keeping it simple really does apply here. A plan needs to be useful and effective, people need to understand how to use it.” Testing is fundamental, and it can start as a desktop review before it moves to a large scale assessment. This helps to understand the plan, and underlines the importance of communication within a business. The practical things revealed during a test can be as simple as figuring out who to talk to if a person is on holiday when an incident happens. Andy Osborne concludes: “Experience shows that, unsurprisingly, businesses affected by a disaster or major disruptive incident who have a plan recover far quicker, more effectively and maintain their reputation far better than those without one. To use an old army adage: ‘Proper Planning and Preparation

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Finance R&D tax credits

R&D tax delivers a shot in the arm

for UK manufacturing

Carmen Aquerreta is a partner and David Clarke a senior manager in the R&D tax services team at Deloitte. They have assisted a number of clients in delivering substantial cash benefits by maximising their R&D relief claims, particularly in the manufacturing sector.

Maximising

cashflow has increasingly been at the heart of many companies’ agendas. Research & Development (R&D) tax credits are one of the most important funding mechanisms provided by government to encourage innovation in the UK. Since their introduction, the R&D tax relief schemes have supported nearly £52 billion of R&D activity by UK companies. Identifying what constitutes R&D activity for tax purposes is not always straightforward; the definition is much wider than is often realised. R&D is about resolving challenging technological problems and the relief is available to all industries, not just those traditionally linked to research, such as pharmaceuticals. Since 2000, companies have been able to claim valuable enhanced tax deductions for staff and consumables costs incurred on R&D projects. Broadly speaking, R&D takes place where new, or significantly improved, products or processes are being developed, and continues up to the point where the technological uncertainty is resolved. The manufacturing sector is rich in activities that fulfil the R&D tax eligibility criteria driven by the need to introduce new and improved products, meet demanding new regulatory hurdles and customer demands, or improve processes to reduce their environmental impact. Whether developing a product or a manufacturing process, real technological challenges frequently appear, and a process of technical investigation and trials will be required to solve these challenges. Historically, a contentious issue faced by companies making R&D claims has been to determine where R&D activity ends and production, which does not qualify, begins. After a period of denying that eligible R&D can take place in the production environment, HMRC has recently reviewed their position leading to potential opportunities for organisations involved with manufacturing activity to significantly extend the scope of their claims. For many, the transfer from lab to full scale production, or the development of working prototypes

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presents a major technological hurdle within an overall project. Since the introduction of the R&D tax relief, a number of manufacturers have made claims for both the materials and staff costs they have committed to these large scale trial activities. HMRC had accepted these claims where the end products generated in these trials was not sold, but refused claims where the product was sold, even if at a loss, on the basis this represented ‘production’ and was therefore excluded from the scope of R&D tax relief. Recognising the position was open to interpretation, HMRC issued further guidance at the end of 2009 which prevented claims if any intention to sell the end product generated existed. Frustratingly for many companies, this blocked R&D claims, even where the trials ended in failure and the product generated had to be scrapped. HMRC recognised this approach was not necessarily identifying the real distinction between production and R&D activities, and realised the end point of R&D would be specific to the nature of the individual trials and each company’s fact pattern. Recent constructive dialogue with companies to help resolve this issue resulted in HMRC agreeing to review the fact pattern of claims where full scale trials are performed as an integral element of an eligible R&D project, even where the end product generated is sold. This approach, along with emerging common principles, is likely to result in new guidance from HMRC on this matter over the next few months. So, how does this impact the R&D tax relief potential for manufacturing companies? Well, it opens up new possibilities that did not exist until recently. Regardless of the type of product, or the mode of production (batches or continuous) the many technical challenges faced by manufacturing companies have the potential to drive substantial levels of R&D activity. The costs of both labour and materials associated with scale-up and development activities may now be claimed after appropriate assessment, even where the end product generated by the trials is sold.

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INDUSTRIAL TRENDS

INSOLVENCY

Inflationary swings and output roundabouts

Manufacturers buck insolvency fears trend

Manufacturers are still experiencing growth in demand but inflationary pressures are in danger of derailing the sector’s recovery, the latest Quarterly Industrial Trends Survey from the Confederation of British Industry suggests.

In Q1 2011, manufacturers witnessed the strongest growth in domestic and export demand since April 1995 with a +20 per cent balance. In response, employment went up for the third quarter in a row and output is expected to climb for a balance of +22 per cent of companies over the next three months However, production costs have gone up markedly, with average unit costs up for a huge balance of +53 per cent of manufacturers. As a result, domestic and export prices are up for balances of +29% and +30% of companies respectively – the biggest rise for the latter since April 1984. Prices are expected to increase sharply again over the next three months. This story was largely consistent with the tale told by smaller manufacturers in the CBI’s Quarterly SME Trends survey, released at the start of May.

The number of manufacturing companies deemed to be in financial distress dropped in the first quarter of 2011 – significantly in some areas – although the number across all business sectors went up. Insolvency experts Begbies Traynor’s Red Flag Alert shows the number of food and drink manufacturers with ‘significant’ or ‘critical’ financial problems was 42 per cent lower in the first three months of this year compared to the final three months of 2010. There were 14 per cent less automotive companies in difficulty, 11 per cent less print and packaging and 15 per cent less in all other manufacturing sectors. Conversely, there was a 26 per cent increase from Q4 2010 to Q1 2011 when all business types were taken into account.

FUNDING COMPETITION

HSBC’s Business Thinking – now open for entries Thinking businesses across the South of the UK could each be awarded a financial reward of up to £120,000 and be invited to take part in an overseas Thought Exchange Trip for networking and business development by entering Business Thinking, courtesy of HSBC Commercial Banking. The winning entrants will gain insight and knowledge from business leaders around the world and have the chance to double their initial financial reward by being crowned overall Business Thinking winner at an International Insights gala. Businesses with turnovers of £2million or more can log onto www.hsbc. co.uk/businessthinking to find out more. Closing date July 10 2011.

FINANCENIBS PAINT

FILM

BANKS

Paint manufacturer Stretford Holdings has received a £4.45m cash injection from Centric Commercial Finance, a provider of asset-based lending. Stretford Holdings has carved out a reputation for buying underperforming coatings companies and making them profitable. Its portfolio includes automotive supplier Carrs Paints, and Trimite, one of the UK’s leading industrial coatings companies. Trimite now sits under Weilburger Coatings (UK) Limited, which is part of Stretford Holdings.

Cheshire based monochrome film and photochemistry products manufacturer HARMAN Technology will branch out into the antimicrobial and medical industry after securing a £4.95m asset-based refinancing deal. The 132 year old company, which trades under the name Ilford Photo, employs around 260 people at its manufacturing base in Kutsford and has an annual turnover of £23m. With the rise of digital imaging, demand for HARMAN’s core monochrome analog film products have waned in recent years though its specialism in this area means the company will continue to serve the market.

The major UK banks have started to deliver on their October Business Finance Taskforce commitments to improve relationships with businesses. They pledged adherence to a new Lending Code for micro-businesses, lending principles for larger SMEs, and a monitoring and appeals process for declined loan requests. These are part of the Better Business Finance campaign launched by the banks. Commenting, EEF chief executive Terry Scuoler said: “The new Lending Code and lending principles show genuine intent from the UK’s major banks in addressing the fraught relations with business.”

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The UK’s International Subcontract Manufacturing Show Featuring the Manufacturing Technology Zone PLUS:

• Meet with world-class suppliers from the UK and Overseas • Get instant quotes • Revisit your make-buy decisions • Learn from experts in the FREE seminars

“The cross-section of suppliers from the UK and overseas means you can get so much done in a day that you wouldn't be able to otherwise.” Graham Walker Procurement Engineer, High Performance Transmission Products, Ricardo UK Ltd

Subcon is the only UK exhibition where you can do all this on a regional, national and global basis.

Subcon attracts leading subcontractors from around the world, such as leading European foundry Thoni Alutec

With more and more UK companies relying on subcontract manufacturers to help them grow and stay flexible, this year’s Subcon exhibition looks set to be one of the most successful yet.

The

event, which takes place at the NEC Birmingham from 7 to 9 June, has doubled in size since 2007. This year’s event will attract over 300 exhibitors and around 4000 visitors. By turning to subcontractors, manufacturers can respond quickly to changing demand without having to make difficult decisions on capital investment – or take on more staff. And because subcontractors are experts in what they do, and have the economies of scale to make effective use of the advanced manufacturing technology, they can often offer a service that would be hard to match in-house in terms of quality, price or delivery. Visitors come to Subcon from every sector of manufacturing to source subcontracting services that include all kinds of machining and metal forming, plastic moulding, electronic assembly, prototyping, toolmaking and surface engineering. The show’s strong focus on subcontracting, broad range of

technologies and industry sectors covered have given it a strong track record as the place where visitors and exhibitors alike know they can do business. This has allowed Subcon to expand beyond its strong core of UK exhibitors to be the UK’s only event in this sector to offer a strong international exhibitor base. Subcon 2011 features overseas exhibitors from eighteen countries including Belgium, Italy, France, Germany, Spain, Denmark, Ireland, Latvia, Lithuania, The Czech Republic, Poland, Estonia, The USA, Turkey, China, Taiwan, Thailand and India. This gives visitors access to international expertise and the cream of the world’s low-cost suppliers. Visitors to Subcon 2010 included supply chain managers and sourcing professionals from companies such as BAe Systems, JCB, Rolls-Royce, Schneider Electric, Babcock, and Siemens. Nearly two thirds followed up their visit by asking companies they had met at Subcon to quote for contracts.

Subcon also provides visitors with the chance to learn from the experts in the Subcon Seminar programme. This combines case studies from leading OEMs with updates on the latest market opportunities, supply chain thinking and technological developments. Headline sessions include Force Protection Europe, on creating the supply chain for Foxhound, the British Army’s new light protected patrol vehicle; Eaton Aerospace on supply chain rationalisation and General Dynamics on the benefits it has received as a cluster leader on the SC21 programme. Other sessions include renewable energy, protecting IP, collaborative working, new technologies and the stories behind two world speed record attempts. As an added incentive to visitors, the popular Manufacturing Technology Zone returns to this year’s Subcon. This covers vital ancillary items to support the outsourcing process – such as metrology equipment, packaging, marking, prototyping, scheduling software and so on. And for visitors who also have in-house manufacturing operations it presents a showcase of the latest manufacturing technology for machining, metalforming, CADCAM and prototyping. Complementing this, and new for this year, The Tooling Show @ Subcon will present the latest developments in tooling for advanced manufacturing. Subcon is also co-located with Logistics Link Live on 8 and 9 June, giving visitors access to a complete event for manufacturing and production professionals from all parts of the supply chain.

Subcon 2011

Subcon helps manufacturers grow

To get your free ticket and book seminar places please visit: www.subconshow.co.uk www.toolingshow.co.uk and www.logisticslink.co.uk

Intelligent

action Business intelligence is increasingly being used right across the manufacturing enterprise — and thanks to user-friendly advances such as dashboards, these days even smaller manufacturers can benefit, says Malcolm Wheatley.

Dashboard business intelligence tools can pull operational and financial information from multiple data sources — such as accounting packages, MRP systems, and supply chain solutions — and easily disseminate this to the relevant people, from management to the shop floor Neil Rushby, Supply Chain Divisional Manager, Access

When

Southampton-based sailmaker Bainbridge International needed a better handle on its customers’ buying habits, the company turned to a business intelligence solution from QlikTech. The goal: a sales tool that would help the company track and increase customer spend and profit — “a real ‘finger on the pulse’ solution,” as Bainbridge IT manager Nick Irvine puts it. At the touch of a button, he explains, the business could see which customers were buying fewer products than previously, as well as spot opportunities for cross-selling. “Deploying the QlikView powered solution has allowed more far reaching benefits than we initially expected,” says Irvine, pointing to a six-month payback period. “Never before have we had so much detailed information on customers and sales at our fingertips so effortlessly.” As luck would have it, Bainbridge’s experience goes right to the heart of a debate which, for many manufacturers, summarises the whole notion of an investment in business intelligence. And it’s a debate that revolves around two key questions. First, can smaller manufacturers benefit from business intelligence? And second, how exactly can business intelligence provide insightful information that will deliver a meaningful return on the investment involved? First, though, what exactly is business intelligence? While individual definitions vary, talk to experts and the core messages are remarkably similar. James Robbins, Accenture’s North American head of industrial consulting, sees it “as the ability to use quantitative data to shape decisions and outcomes”, noting that the ‘outcomes’ part of that definition is critical. There is little value in business intelligence that doesn’t lead to clearly defined actions. At Capgemini, head of business analytics David Pardoe talks of “gathering data from business processes and employing analytics tools to improve those processes.” Similarly, IBM’s Jonathan Crenner, an associate partner in the firm’s business analytics and optimisation service line, defines business intelligence as the “use of analytics tools to make better business decisions.”

IT in

manufacturing

Choice All of which sounds not a little rarefied. Yet there is little doubt that manufacturers can — as at Bainbridge — most certainly benefit from business intelligence applications: the body of evidence, in short, is just too strong.

At British Sugar, for instance, a business intelligence application from BOARD has been used to replace complicated and difficult-to-control spreadsheets used in financial planning. Meanwhile, at Sennheiser Electronic, a business intelligence application from Business Objects — now part of

Intelligent excellence

alk to John Hammann about business intelligence for

manufacturers, and he’ll point you to a French food flavourings business called Metarom, which first implemented SAP’s BusinessObjects business intelligence solution back in 2006. To Hammann — head of

Don’t spend a year working on something before delivering anything: aim for a continuing stream of deliverables Andrew Spence, Director of Business Development for Supply Chain, Oracle

business development for manufacturing at SAP — Metarom

instance,” says Hammann. “And

is also very much about rapid

sums up a number of lessons

the opportunities in particular

implementation, adds Andrew

about the successful deployment

industries can be enormous — in

Spence, Oracle director of

of business intelligence.

automotive, for example, warranty

business development for the

costs are a significant burden.”

supply chain.

“They’ve raised revenues by 12% over three years,

QlikTech’s Telford agrees.

“Go for a three month project,”

even as they’ve reduced

“The use of business intelligence

he urges. “Be prepared to accept

inventory holdings, streamlined

in sales and marketing is certainly

data issues, don’t try for 100%

procurement and improved

popular,” he notes. “But there

coverage, but aim to cover a

manufacturing efficiencies,” he

are a lot of applications in the

few important KPIs and metrics

says. “You can’t credit business

supply chain, too: strategic

and expand from there — both

intelligence with all of that, but it’s

sourcing, sales and operations

in terms of metrics covered, and

certainly had a big impact.”

planning, collaborative

areas of the business targeted.

forecasting, and supplier

Don’t spend a year working

performance, for example.”

on something before delivering

Talk to experts such as Hammann, and a recurring theme is that business intelligence

That said, such forays into

anything: aim for a continuing

these days isn’t just about

supply chain and manufacturing

delivering better insights into the

performance data streams

sales process.

underscore the fact that business

starting point for a business

Metarom, for instance,

stream of deliverables.” And sage advice about a good

intelligence these days isn’t about

intelligence project comes from

tackled sales data in its first

‘big bang’ deployments any

Timo Burkard, managing director

year, the link between sales

more. As at Metarom, it takes

of specialist SAP business

forecasts, purchasing forecasts

time to extend roll-out business

intelligence consultancy PIKON

and production planning in its

intelligence across the enterprise.

International Consulting.

second year, and manufacturing

“The mode of roll-out has

“Dashboards and ad-hoc

improvements and production

changed,” says Dunacan Fitter,

reports are still very popular with

costs in its third year.

business development director

managements, because it gives

for business intelligence within

them the information they need

are going beyond the sales

Oracle UK. “These days, it’s about

in a quickly digestible form. But

and marketing arena to apply

‘incremental discovery’ rather than

often, what makes the difference

business intelligence tools to

‘big bang’.”

to a business is that one ‘killer

“Increasingly, companies

any aspect of the business

Yet that doesn’t mean that the

report’ — a report that used

where there is a rich data

benefits of business intelligence

to take a considerable effort to

stream: purchasing, quality, and

are delayed — for today’s

compile manually, but which can

manufacturing operations, for

approach to business intelligence

now be produced automatically.”

SAP — simplifies and automates the company’s reporting processes. But if those are some of the benefits that the application of business intelligence delivers, there’s less agreement on how business intelligence actually does it.

Margin and cost pressures have had a huge impact on the take-up of business intelligence among smaller manufacturers: they can’t afford not to follow up any opportunity to influence profit Håkan Ebersjö, Director of Product Marketing, Epicor

To some, for instance, business intelligence calls for a significant investment in data warehouses, expensive analytics and reporting software, and high-power teams of specialist analysts. To this school of thought, the goal of business intelligence is the gaining of insights not readily available otherwise — such as which customers might be interested in which other products or services, for instance. To others, business intelligence means the reporting, ‘dashboard’ and scorecard systems that are now built as standard into most modern ERP systems, or available through bolt-on packages and niche solutions. Here, the focus is on business intelligence as the presentation of pre-digested data into actionable insights, often for performance management purposes. And a third school of thought sees business intelligence as a kind of ‘half way house’ — highpowered, and capable of advanced analytics tools, yet falling short of the burden of duplicate third-party databases and data warehouses. To this school of thought, business intelligence is often about projectcentric improvement programmes, targeting specific areas of weakness. Yet this multiplicity of flavours of business intelligence need not be a problem. For a typical manufacturing business wondering which way to go, suggests Capegemini’s Pardoe. According to him, the pragmatic reality is that the chosen nature of the solution depends largely on both the nature of the problem and the scale of the opportunity. In other words, for any given business, there’s a spectrum of choice stretching from simple problemcentric business analytics to full-scale business

intelligence — beginning, if needs be, with the humble spreadsheet as a starting point. “For all the criticism that spreadsheets get, they can do some very powerful things,” says Pardoe. “But if you’ve got thousands of product lines to analyse, then a spreadsheet will probably be difficult to use. If it’s tens, or hundreds, then a spreadsheet can greatly help.” Dashboards, too, can help to make even the most indigestible mass of data intuitively easyto-read. “Dashboards offer real time management information, and dashboard business intelligence tools can pull operational and financial information from multiple data sources — such as accounting packages, MRP systems, and supply chain solutions — and easily disseminate this to the relevant persons from management to the shop floor,” enthuses Neil Rushby, supply chain divisional manager at specialist ERP vendor Access.

Opportunity All of which will be comforting words for smaller manufacturers, who may well balk at the apparent costs and complexity of full-scale business intelligence solutions involving dedicated analyst teams, data warehouses, and high-powered software. Business intelligence on this scale, for

Business intelligence has democratised quite dramatically over the last few years. It’s not just that it has become more accessible to smaller companies, it’s also been reflected in the types of users employing it — they’re no longer ‘power users’ and dedicated business intelligence analysts George Mathew, Group Vice-President and Global Manager of Business Intelligence, SAP

many smaller companies, will be a daunting — not to say expensive — proposition, especially if uncertainty surrounds the benefits. The good news? While once true, things have moved on. “Business intelligence has democratised quite dramatically over the last few years,” notes George Mathew, group vice-president and global manager of business intelligence at SAP. “It’s not just that it

IT in manufacturing

has become more accessible to smaller companies, it’s also been reflected in the types of users employing it — they’re no longer ‘power users’ and dedicated business intelligence analysts.” And what is striking, adds Håkan Ebersjö, director of product marketing at Epicor, is the nature of the impetus behind that move. In short, the recession and associated tough times. “Margin and cost pressures have had a huge impact on the take-up of business intelligence among smaller manufacturers,” he says. “They can’t afford not to follow up any opportunity to influence profit.” Natasha Judge, a marketing and business development executive at business intelligence provider Board UK, agrees. “The economic conditions of the last three years have focused companies on how they can deliver, without cutting service,” she points out. “Some mid-tier manufacturers are investing quite significantly in business intelligence, recognising that spreadsheets and the like aren’t giving them the information that they need. For smaller manufacturers, it depends on the particular challenges that they are facing: correctly allocating costs and profits to particular product lines, for instance, is complex — but it’s the sort of thing that we’re seeing a demand for.” “Implementing BI requires commitment, dedication and resource to realise its potential benefits, sums up Stuart Anderson, director of sales and marketing at specialist smaller-company ERP and accounting vendor Pegasus Software.” “But as economic conditions remain tough for smaller manufacturers, business intelligence currently represents an untapped means of achieving a substantial competitive advantage.”

Dashboard deployment

or a smaller manufacturer wanting an easy-to-use, easy-to-deploy business intelligence solution, dashboards are an obvious way forward. Presenting management with pre-formatted, easy-to-digest information, dashboards are business intelligence at its most basic level. What’s more, they’re cost-effective from an IT perspective. Using dashboards as a business intelligence tool puts analytic power directly into the hands of management, while cutting the bulk and cost of traditional reports programmed by IT departments. So when 135-employee Biggleswade-based AWA Bathrooms recognised that its management reporting was taking too long to complete, and that it didn’t provide the clear and comprehensive overview of profits and costs that the business required, dashboard technology from the company’s ERP provider Solarsoft seemed the obvious solution. “The previous system that we were using had a traditional report writer that was limited in its capabilities and was extremely time consuming. Since implementing the dashboard technology from Solarsoft we can access data

Getting reliable and up to date information about what is happening within a business can be complicated. Using a business intelligence tool, manufacturers have much faster access to management information from any department Steven Hargreaves, Group Product Director, Solarsoft.

far more quickly than before and the reports are always up to date,” says Fred Colborne, financial director at AWA Bathrooms. “With just few mouse clicks, dashboards let us analyse past transactions, inspect current activities and make ‘what if’ forecasts about where the business is heading. Using this information we can target sales and marketing campaigns to help improve turnover and we can see which product lines contribute most to growth and profitability.” According to Colborne, the Solarsoft dashboards have transformed the way that people carry out day-to-day activities. The dashboards give a clear view of company performance, he explains, and because they are fed directly from operational data in the ERP system, are always up to date and accurate. “The ability to drill into a report on screen means that we are always confident that the information is accurate and can be tied back to our ERP system,” he says. “What’s more, it has saved the company vast amounts of time spent creating and maintaining dozens of reports, many of which were rarely used. Previously the IT Manager would have to write, test and deploy every single report, with each report taking an hour or more to prepare. With dashboards it is all done at the click of a button.” None of which comes as a surprise to Steven Hargreaves, group product director at Solarsoft. “Getting reliable and up to date information about what is happening within a business can be complicated,” he notes. “Using a business intelligence tool, manufacturers have much faster access to management information from any department — whether that’s Sales, Production, Finance or Warehousing. They also have a much deeper insight into sources of profit and cost. You can now quickly compare current and historic performance or ask ‘what if’ questions about the future with just a few clicks of a mouse button.”

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ITnews... ERP

Takeover rush hits enterprise application sector Consolidation continues apace in the enterprise applications sector with two major mid-tier software companies agreeing to be bought during the past four weeks.

In separate moves, both Epicor Software and Lawson Software fell to acquisitive venture capitalists – Epicor to Apax Partners, one of the world’s leading private equity firms with a strong heritage of technology investment; and Lawson to Infor, via Golden Gate Capital, its backers. Both acquiring parties were keen to stress their

intention to develop the companies. “Infor and Lawson will create a rich, integrated enterprise application suite. We have a long list of ideas to improve the customer experience and deliver value through a singular focus on enterprise applications, accelerated investment, and a strong incentive to challenge convention,” said Charles Phillips, Infor’s CEO and the former number two at Oracle. For its part, in a parallel move, Apax also acquired privately-held mid– market retail and wholesale distribution company Activant Solutions, and

Cloud computing

Advanced planning and scheduling

SAP helps midsize businesses run e-commerce in the cloud

Brazilian Preactor users earn rapid ROI

Enterprise software giant SAP has joined forces with two German SAP partners to launch a cloud based e-commerce solution for small and midsize enterprises running SAP’s Business All in One solution.

Brazil’s manufacturing industry is now the world’s sixth largest – two places ahead of the UK. And the country is no less interested in advanced planning and scheduling, it seems. According to Preactor, customers speaking at recent Preactor seminars in São Paulo and Porto Alegre have claimed significant business benefits.

The solution sets up a company with an e-commerce site that is hosted in the cloud, with web orders processed alongside traditional sales channels in the SAP Business All in One solution’s back end. The on demand webshop has been developed by ePages GmbH, one of the world’s foremost providers of e commerce cloud service platforms, while integration of the pre-configured online shop with SAP Business All in One is enabled by HONICO eBusiness GmbH, a specialist for SAP system management products. The offer is available to SAP Business All in One customers in two versions. The base version, priced at $539 per month, supports up to 10,000 products in a maximum of 1,000 categories, while with the ‘flex’ version, costing $949 per month, customers can sell up to 200,000 products in up to 2,000 different categories. “With the integration of our on demand shops, we are making the entrance into professional e commerce much easier for SAP Business All in One users – with straightforward monthly costs and little technical effort,” says Wilfried Beeck, CEO, ePages. Setup is easy, adds SAP. Companies that run SAP Business All in One can order the new software packages ePages Base for SAP Business All in One or ePages Flex for SAP Business All in One online and either install it themselves, or have a partner, such as ePages, do the set up and configuration.

intends to combine Activant and Epicor to create a single provider of enterprise applications, focused on the manufacturing, distribution, services and retail sectors, operating under the Epicor brand. “This merger is extremely positive for Epicor’s customers, employees and shareholders alike,” said George Klaus, Epicor chairman, president and CEO. “It offers great value to our current stockholders and represents an endorsement of the business strategy, products and technology leadership we have established in the market.”

Unicasa, a manufacturer of kitchen and living room furniture, delivered a $4m inventory saving and $2.5m in increased production achieved in a matter of months, it reported. Preactor has helped increase productivity by nine per cent, which represents $2.5m in additional production, while simultaneously reducing inventory by over 50%, from a value of $6.5m to $2.5m. Susin Fransecutti, a manufacturer and supplier of camshafts, crankshafts, axles and other parts to the automotive sector, has gone further. Benefits include a 25% increase in productivity, a 50% reduction in delivery delays, a 40% reduction in lead times, and a 15% reduction in work in progress which has freed up 30% of space within the factory. “South America is a growing market for us,” says Preactor chief executive Mike Novels. “Not only do these results prove how effective Preactor advanced planning and scheduling solutions are in the real world, they also show that Preactor solutions leverage any existing investment in ERP.”

IT in

manufacturing

Job shop production and control

Jobshop delivers growth and productivity 120 year-old Aish Technologies, based in Poole, Dorset, has become the latest small manufacturer to sing the praises of Planit’s Jobshop ERP and advanced production planning and control system. “We’ve increased turnover by more than £5m – with no increase in overheads or staff,” says operations director Nigel Barnes. “We’ve increased turnover to £12m, and we haven’t needed to increase our headcount.” Put another way, he adds, the company used to process around 4,000 work orders a year. Now, since bringing in Jobshop, the same number of staff manage 10,000. Aish, which develops and manufactures purpose built, multi function consoles, cabinets and electronic racks for the protection of electronic equipment in harsh environments, first introduced Jobshop three years ago, says Barnes. “We recognised that the business was heavily dependent on non added value staff to make it work,” he explains. “We were carrying a high burden of overheads to make the company function as it did. Our long term solution was to say that if we’re going to implement Jobshop it had to provide the capacity to grow the business without increasing this overhead burden.” Accordingly, Aish makes full use of many of Jobshop’s extensive suite of functions, including Sales Order Processing, Material Requirements Planning, Purchase Orders, Work Orders, Scheduling, Shop Floor Data Capture, Materials Control, Costing, and System Management. “It’s made a monumental contribution to our recent success,” sums up Barnes. “We couldn’t have grown the business without the step change improvements in both procurement and progressing the scheduling work load without Jobshop.”

PLM

Siemens PLM adds SharePoint-based social networking capabilities Siemens PLM Software has announced that the community collaboration capabilities built into its market-leading Teamcenter software now support Microsoft SharePoint 2010, further expanding popular social networking concepts into the product development process. Using such tools, teams can increase their productivity by coordinating their daily activities through shared project workspaces enhanced with social networking tools such as wikis, blogs, profiles, surveys and more. “Through its strong alliance with Microsoft, and its own internal development, Siemens PLM Software is introducing the next generation of social product development to its users, and helping manufacturers enhance collaboration among their employees, suppliers and customers to streamline the introduction of new products using corporate social networks,” says the company. “Companies are applying the concepts and lessons learned from social networking to connect people and enhance business interaction,” notes Jim Brown, president and founder of Tech Clarity, an independent research and consulting firm. “This shift towards corporate social networks promises significant business value, particularly as social computing technologies are applied to PLM.” “Working side by side with our own development team, Siemens PLM Software has done an outstanding job of weaving Teamcenter into the fabric of SharePoint 2010 in a way that feels seamless and natural to the end user,” adds Sanjay Ravi, managing director for worldwide discrete manufacturing industry at Microsoft. “As a result, manufacturing companies using Teamcenter with SharePoint 2010 can boost productivity in all departments – not just engineering – while they use social networking technology to collaborate with clients.”

Have your say at www.themanufacturer.com

Automotive excellence “We’ve worked closely with

In-depth industry knowledge and expertise is the key to IT success in the automotive sector, finds Malcolm Wheatley.

eBECS to improve how we receive our customers’ orders, how we schedule those orders, how we manufacture them, and how we pass our raw material and

many in the

of ‘past due’ shipments plummet.

component requirements on to

automotive

Best of all, perhaps, inventory turns

our suppliers,” he says. “And our

industry, Northampton-based

have risen from around 4 times a

management reporting systems

vehicle seat manufacturer KAB

year to a level of around 11 or 12

have been transformed, as well: we

Seating had an uncomfortable

times—with a target of 15 looking

now know how we are doing day-

recession. Revenues, for instance,

increasingly attainable.

by-day—and not finding out at the

dropped by 60% in a matter of

end of the month.” In short, the transformation at

months. An industry that had

amount of cash,” sums up

thought it was already lean, in

Jordan. “And we believe that

KAB is precisely the sort of step

short, found itself rapidly required to

the cash we’re saving is going

change in improvement urged on

become much leaner still.

to finance our capital investment

the UK’s automotive industry by a

“These days, there’s a lot less

programmes for the next year—

recent government-backed report

inventory in the system than there

meaning that we won’t be having

co-authored by the University

was before the recession,” says

to borrow money.”

of Cambridge’s Judge Business School and the Society of Motor

KAB Seating finance director Peter

It is, in short, a remarkable

Jordan. “Our customers’ schedules

transformation—and one where

aren’t as firm as they used to be,

Jordan is quick to play tribute

but they still want their deliveries

to the role played by Microsoft

out, buy-in about 60 75% of the

from us to be on time, and in full.

partner eBECS, which has worked

value of a finished vehicle from the

So we’ve had to change the way

alongside KAB optimising and

component supply chain. What’s

that we work.”

leveraging the performance of the

more, the cost of materials and

company’s Microsoft Dynamics

parts is around six times the cost

effectiveness of those changes. ‘On

AX ERP system. No wonder,

of final vehicle assembly. Taken

time, in full’ despatch measures

then, that eBECS is now delivering

together, it’s clear that success

have improved significantly,

Dynamics AX throughout KAB

of the UK’s automotive industry is

reports Jordan, while a host of

parent company Commercial

inextricably linked to performance

manufacturing and supply chain

Vehicle Group Inc’s global

of its supply chain and component

improvements have seen the level

operations.

manufacturing plants.

And there’s little doubting the

“We’ve freed up a significant

Manufacturers and Traders. Vehicle manufacturers, it points

emerge, says Philip Stride, eBECS’

management and better customer

with its partner-centric, customer-

group commercial director.

service, he stresses.

driven software development

Connectivity within the supply

In just two weeks, he relates, a

process, values its close links with

chain, for instance, is an important

joint eBECS-Yuasa team built a

eBECS, explains Rakesh Kumar,

deliverable, and one which calls

system that used the CRM Module

the software giant’s global industry

upon a whole host of relevant skills

within Dynamics AX to process,

director for manufacturing industry.

and capabilities. At KAB Seating,

investigate and resolve 20 different

for instance, eBECS helped deliver

types of complaint, routing each

the people who have the direct

and roll-out a web-based supplier

case to the relevant departments.

contact with the customer,” he

portal that has revolutionised

points out. “It’s they who are in

supplier communications.

“Partners such as eBECS are

touch with the customer’s detailed

“EDI is fine for links between

And coupled to photographs taken of each outbound pallet of batteries, electronically called-up

requirements, and their domain

tier-1 suppliers and the automotive

within Microsoft CRM, the result

expertise helps us to see which

OEMs, but is something that tier-2

was a £500,000 annual saving in

developments we should be

and tier-3 suppliers struggle with,”

respect of batteries despatched

investing in. Working with eBECS

notes Stride.

to customers following ‘short

has been very good for us: it’s a

No longer: these days, says

mutually-beneficial relationship.”

KAB’s Jordan, the company’s

shipment’ complaints. Lean, too, is an important driver,

suppliers simply log onto the

adds eBECS’ Stride, with the work

industry sectors begin to deploy

Dynamics AX-based portal,

at companies such as KAB Seating

advances that the automotive

see their ‘fixed-firm-forecast’

and Yuasa highlighting the extent to

sectors has pioneered—such

schedule, print-off barcode labels

which the capabilities of Dynamics

as lean manufacturing, ‘cradle-

to accompany their shipments,

AX can be leveraged to streamline

to-grave’ traceability, and recall

and enter Advanced Shipping

administrative and logistics

management—eBECS’ close

Notifications to update KAB with

processes to make them both more

links with customers such as

expected deliveries.

responsive and more efficient.

Indeed, stresses Kumar, as other

Aston Martin Lagonda and Team

And Customer Relationship

“Electronic data capture,

Lotus are increasingly central to

Management (CRM), in the shape

‘tweaks’ to Dynamics AX screen

the whole strategic thrust of

of Microsoft CRM, is another

forms and tables, running MRP

Dynamics AX.

capability that is finding favour in

more frequently, greater visibility

the automotive sector, says Stride.

at shopfloor level—like lean itself,

and prized customers are

What’s more, it’s also one that is

none of the changes are major

customers of partners such as

delivering undoubted bottom line

ones in their own right, but they

eBECS,” he notes. “They’re really

value, as well.

add up to something that is very

“Some of our most referenceable

helping us gain traction.”

At Yuasa Batteries, for instance,

significant,” says Stride.

a CRM solution developed by

“Coupled where necessary to

has helped automotive customers

eBECS using Microsoft Dynamics

capabilities such as Business

such as KAB Seating and

AX is credited with generating

Intelligence, the result is something

Swindon-headquartered battery

savings of £500,000 a year,

genuinely transformational.”

manufacturer Yuasa Batteries

says Yuasa information systems

And in an industry still battling

deploy and leverage Microsoft

manager John Cook. And that’s

one of the steepest downturns in

Dynamics AX and Microsoft

on top of the harder-to-quantify

decades, that transformation is very

CRM, and some common themes

benefits of improved complaint

much on the ‘to do’ list.

Look closely at how eBECS

eBECS

Which is precisely why Microsoft,

For more information please visit: www.ebecs.com

The value

propositi o n of

ERP

Total cost of ownership should be the overriding criteria for ERP selection, not short-term financial savings, as Ronan Martin-King reports.

Manufacturers have long been used to assessing total cost of ownership when they are evaluating options for equipment and machinery. Fewer however, use the same thinking when making software purchases despite the ease of application. There is little doubt that a modern ERP system can breathe new life into any sector of manufacturing, but what if the business is struggling to raise the necessary funds to invest? Total cost of ownership should be a key factor in the decisionmaking process, says Craig Such, head of the manufacturing division at consultancy-led business software supplier Access. A typical ERP solution may be replaced every seven or eight years, he says, so manufacturers should calculate the cost of

IT in

manufacturing

ownership over that period. However he also warns that businesses should be aware that the most significant investment is often their time and the potential disruption to their business. There are various rental options on the market but these may not provide the best long-term value, even if the initial offer appeals. “Quite often, some of the rental models may appear attractive at first,” says Such, “particularly if you can stop paying for it if you decide you don’t like the product. What many fail to take into account though is that this doesn’t address the investment of your time. “Once you have invested time and effort, you are unlikely to want to throw that away and so will persevere with the system, even if it isn’t proving to be the best fit. The price may have looked low at the outset, but the full cost of ownership may mean that renting is not the best solution. The bottom line is, do your homework first, and compare offerings on a like-for-like basis.” Return on investments is a critical part of the total cost of ownership equation, no more so than now as the economy recovers. Businesses are straining to release precious funds and senior management teams must make a call on investment requests across the organisation. There are recognised methods with which to justify payback on any capital purchase, but the biggest barrier to the capex model for a new ERP system is the fact that there are so many finance options on the market. While it’s commonplace for manufacturers to fund investment from cash reserves, there are others for whom a £50,000 purchase, for example, is impossible without finance from an external source. “ERP vendors have to recognise that they need to offer a range of finance options to suit different situations,” says Such. “Because of this we have flexible financing options available.” For any reputable supplier, their objective is to help the customer realise swift return on investment – and this is achieved by ensuring the purchase or finance option aligns with the anticipated improvements to efficiency and productivity. For a system as critical as ERP or supply chain software, one size definitely does not fit all. Reliability, affordability and, most importantly, choice are vital. Enter cloud computing, which has been a hot topic within the IT sector for some time. Such is keen to point out that a pragmatic approach is required if this is to pay dividends: “Cloud can play a key part in your manufacturing IT strategy but don’t automatically think this has to apply to all of your systems,” he says. “Manufacturers need to carefully review each area of their business and where a cloud application might be the most appropriate option. It’s could be the case that a combined cloud and on-premise solution is the ideal answer.” One of the underlying concepts of cloud is the provision of software as a service (SaaS) and,

while there is an increasing number of software providers offering ERP on demand, the fact remains that for many manufacturers, core ERP functionality is just too business-critical to relinquish control in this way. A company may have invested a great deal in their IT infrastructure, on-premise manufacturing solutions and, for example, robotic control systems that need to be physically on site. As a result, the cloud may not be a suitable alternative for certain manufacturers. The combination approach, therefore, may prove fruitful with core ERP remaining on premise and specialist areas provided on demand via

ERP vendors have to recognise that they need to offer a range of finance options to suit different situations, because of this we have flexible financing options available Craig Such, Head of Manufacturing Division, Access

the cloud. “Areas such as CRM, document management and HR are ideal for cloud,” agrees Such. “They lend themselves to the cloud environment; it removes the need to have this software installed on in-house servers, so avoiding need for hardware investment. It also provides manufacturers with flexibility over future capacity, so they only pay for what they use.” Access, in fact, has recently announced its cloud computing strategy for document management and HR. This means not only is there a finance option to spread the initial outlay, but the solutions themselves will be managed in the cloud, removing any potential hardware or infrastructure headaches for the customer. It’s vital, says Such, for suppliers to be able to offer the breadth and depth of technology, service and finance to suit manufacturers who, themselves, have to offer flexibility and responsiveness to secure and retain contracts. As the manufacturing sector continues its slow climb out of recession, businesses will need to invest in equipment and technology to ensure they are sufficiently agile, highly efficient and capable of seizing new opportunities and fulfilling customer demands. This is enabled by true company-wide visibility which, in turn, comes from accurate, real-time data. Putting off an ERP purchase or upgrade may in fact damage competitiveness which is already fragile. Investing in a top-class ERP solution through one of a variety of cost models could be the catalyst to a more secure future.

Polypipe Maximising Project Opportunities with Microsoft Dynamics CRM The Company Polypipe is one of Europe’s largest and most innovative manufacturers of plastic piping systems for residential, commercial and infrastructure sectors. With a reputation for reliability and value, Polypipe’s customers (whether specifiers or endusers) know it can provide plastic piping solutions for whatever they need to carry - from water to telecoms, air to energy and chemicals.

The immediate need was to deliver a replacement for this quotation system however the team were always mindful of the potential extension of use across the whole Polypipe Group. Any extension would need an easy to use, fullyfunctional, up-to-date CRM solution with the flexibility to meet the needs of several very different Polypipe operating divisions – Civils, Terrain, Ventilation and Building Products.

Requirement – a flexible CRM system

Meeting construction-specific needs

Polypipe’s existing CRM solution was really only used for the preparation and progressing of quotes for major projects. It provided no visibility of the project pipeline, customer contacts, visits or calls, or any sort of useful management information. The system had other faults as well, as Polypipe Group’s Head of IS, Mike McKay, observes: “It wasn’t very user-friendly and couldn’t be accessed out in the field - so we found we had to limit it to a small group of office-based users. It really was on its last legs.”

Typically for a business supplying construction projects, Polypipe also needed a solution that could: Track and manage all their sales and marketing activity by project – as well as by customer, specifier and influencer Automatically pull in data from third party lead providers such as ABI and Glenigan – and then quickly filter it, analyse it and identify the actual opportunities the sales team wanted to bid for Be easily used by staff both in the office, out in the field and via hand-held devices such as Blackberrys

Polypipe Sector: Construction Business: Building products manufacturer Software deployed: Microsoft Dynamics® CRM with the Construction Industry Solution Key benefits: Quick & easy reporting to maximise all project opportunities Improved visibility of customers, specifiers, projects and opportunities to prioritise sales activity In-depth analysis to understand market trends and minimise risk An accurate and up-to-date customer and specifier contact database

Microsoft Dynamics CRM with the Construction Industry Solution from Maxima scored highly across all three requirements.

Initially up and running in just 8 weeks Microsoft Dynamics CRM with the Construction Industry solution was initially implemented in Polypipe Civils – and was defined, customised and implemented to a core team of users in just 8 weeks. Additional users were then added over the following weeks and months. Microsoft Dynamics CRM with the Construction Industry solution was effectively installed ‘out of the box’, with some additional specific customisation within the quotation functionality to reflect Polypipe’s specific terms and extensive product mix. “The implementation went very smoothly overall”, recalls Mike McKay. “Maxima were extremely helpful and supportive throughout, and demonstrated a really flexible and can-do approach.” He adds, “The fact that Maxima understood the needs of project-orientated companies such as ourselves, and had customised Microsoft Dynamics CRM specifically for that requirement, ensured a successful implementation.”

Casestudy Maxima and Polypipe

From 25 to 115 users - right across the group The initial Microsoft Dynamics CRM with the Construction Industry Solution implementation was for 25 users in Polypipe Civils. Now there are there are 115 users across four Polypipe business areas – Civils, Terrain, Ventilation and Underfloor Heating – each with Microsoft Dynamics CRM with the Construction Industry Solution meeting their own specific business requirements.

An accurate and up-to-date customer and specifier contact database The management focus and reliance on all the reporting produced from Microsoft Dynamics CRM with the Construction Industry Solution means any incorrect or out-of-date information is very quickly identified and corrected. As a result, Polypipe now have a reliable and much improved customer and specifier contact database on which to further improve their sales and marketing effectiveness.

Four key benefits

Into the future

According to Chris Bewster, Commercial Director for Polypipe Civils, the deployment of Microsoft Dynamics CRM with the Construction Industry Solution has delivered four very clear benefits:

Based on the success of their implementation to date, Polypipe has plans to expand the use of Microsoft Dynamics CRM with the Construction Industry Solution further within the Group, leveraging the key information that is now much more readily available.

Quick and easy reporting to maximise all project opportunities Using the automatic export into Microsoft Office Excel functionality of Microsoft Dynamics CRM, Polypipe can map any project (and the associated project opportunities and products) against their own Excel template of key product ranges – and quickly identify any possible additional opportunities. In the words of Chris Brewster, “As a company with multiple product ranges and multiple divisions, it’s fundamental to our success that we maximise every possible sales opportunity. Microsoft Dynamics CRM to Excel reporting makes it quick and easy to identify any additional opportunities.”

Improved visibility of customers, specifiers, projects and opportunities to prioritise sales activity Monthly reports produced directly from Microsoft Dynamics CRM on individual sales activity – by customer and specifier size and type, number of visits, progress on current projects and opportunities – provide the basis for the monthly sales reviews and allow the sales team to better understand where to focus their time and resources.

In-depth analysis to understand market trends and minimise risk High level sales forecast reports track all project opportunities by building type (a hospital vs. a hotel vs. an office etc.), funding type (public vs. private), sales stage and conversion rates across the group. This provides valuable insight into the markets within which Polypipe operates to identify potential areas of risk and allow Polypipe to plan accordingly. Robin Appleby, General Manager for Polypipe Gulf FZE and previously Commercial Director at Polypipe Terrain explains, “Across the group, we are driving the business towards improved visibility and management of an increased number of opportunities given the extensive portfolio of products and solutions as a business Polypipe now have to offer. The reporting from Microsoft Dynamics CRM with the Construction Industry Solution provides that information very effectively.”

About Microsoft Dynamics CRM with the Construction Industry Solution Microsoft Dynamics CRM with the Construction Industry Solution enables every Outlook user in your organisation to share information on customers, specifiers and project leads to improve sales and marketing effectiveness. It is part of the MAXcel suite of products from Maxima that leverage the power of Microsoft Dynamics AX and CRM as well as Microsoft SharePoint specifically for contractors, consultants, building products manufacturers, service/facilities management providers. With over 300 clients in the Construction and related sectors, our clients include Balfour Beatty Rail, Balfour Beatty Infrastructure, Curtins Consulting, Dimplex, Galliford Try, Heyrod, Hill & Smith, Leach Lewis, Murphy Group, Polypipe and SPI nPower.

About Maxima Maxima (AIM:MXM) is a leading IT business systems and managed services company, providing Business Solutions and Unified Infrastructure services to over 1,400 organisations. Core service offerings include cloud computing, web connectivity, virtualisation, infrastructure management, IT managed services, business intelligence and comprehensive Microsoft Dynamics AX ERP & CRM solutions. Microsoft Dynamics CRM with the Construction Industry Solution is available on-premise, hosted or in the cloud. For more information, please visit: www.maxima.co.uk/construction

Have your say at www.themanufacturer.com

IT’s a

thing

As companies race to seize competitive advantage in a tentative economic upturn the need for ever finer degrees of efficiency is pushing the use of IT and automated analytics up the strategic priority list. But what does this mean for manufacturers? Jane Gray chewed the fat with industry representatives.

The

latest of The Manufacturer’s Director’s Forum (MDF) dinners, held on April 7 in Nottingham and sponsored by Columbus IT, provided a timely opportunity to ask attendees how the recently reported slump in economic optimism was affecting their operations and the motivations behind their use of technologies like enterprise resource planning (ERP) systems, business analytics and business intelligence. After all, our gathering was taking place just days after the British Chambers of Commerce’s Quarterly Economic Survey had announced dolefully that Q1 2011 was “mediocre and disappointing, especially for manufacturing” and the UK PMI figures for manufacturing declined again from the January high of 61.2 to a less buoyant 57.1. Yet the overwhelming response from diners was that full order books and escalating customer expectations on lead times are what’s driving efficiency hunts, as they look to glean even the most minute competitive advantage in order to fulfil exacting demand. Even representatives involved in luxury consumer markets, said to be suffering most in the current economic climate, reported feverish activity.

A means to an end As conversation over dinner unfolded it became obvious that this is translating into pressure for IT systems to be more intelligent in identifying trends and for users to be savvier in their manipulation of data. Describing how he hoped added intelligence would change the game for his organisation, George Ewen, global production director at CPL Aromas, said: “We call ourselves a global company, but the fact is that, although all sites manufacture the same product, they do it in different ways. We are not truly linked up – just standalone sites. We are trying to change that, through introducing standardised bar coding, for instance, but we need a system that can support us.” Ewen said a desire for better global warehousing strategies and management of the 15,000 raw

materials used in its product range had driven CPL Aromas’ decision to buy a new ERP system. Microsoft Dynamics AX was chosen because of its demonstrated success in leveraging value. One such example of this is Balfour Beatty Rail, represented at this MDF Dinner by project manager Emma Holland. Holland spoke of the benefits of viewing inventory information from different perspectives at both global and local levels. In addition to analysis of materials movements both Ewen and Holland advocated analysis of labour costs in terms of direct and indirect hours, and the effect of downtime. However, not all organisations will gain benefits through searching for efficiencies in

As we upgrade to new versions we expect to see any modifications we have done in the past fall away until we have as standard a package as possible Tony Carlisle, IT Manager, Fairfax Meadow

stock purchasing and warehousing practises. A few words from Simon Charlton, sales director at Columbus IT, raised the imperative of understanding what makes a difference to your organisation’s competitive position. Charlton recalled his work with catering butchers Fairfax Meadow’s ERP implementation and observed: “If we talk about [Fairfax Meadow’s] business in this respect it needs to be considered that the product, prime beef, is far more expensive than the labour on the shop floor. This means that, the priority is capturing costs related to

Specialfeature

Manufacturer’s Directors’ Forum dinner sponsored by Columbus IT

meat processing compared to the overall cost of delivering the product. You can’t just pull in a system which is meant to be fantastic and assume that it is going to bring benefits. You need to understand how to capture information that is relevant to you.” Tony Carlisle, IT manager at Fairfax Meadow, agreed with this assessment and explained why having assurance about his ERP system’s ability to quickly and consistently process high volumes of transactions as well as analysing product yield were the main considerations in his ERP adoption plans. This leads naturally to a consideration of how individual business processes differentiate one ERP provider from another and to the question of whether custom built systems are better than ‘out of the box’ offerings. For Carlisle, a member of the Microsoft Technology Adoption Programme (TAP), the advantages of standardisation offered by the latter approach are too attractive to be missed. He reflects: “As we upgrade to new versions we expect to see any modifications we have done in the past fall away until we have as standard a package as possible. The challenge then is to persuade system users to work in a particular way.”

The human side Attendees were confident that this “particular way” laid out in future releases from Microsoft will be effective, mostly as they have been engaged in technology adoption and testing. It seems we are no longer in the dark days of IT systems and upgrades arriving on the doorstep of masses of users for them to take through a painful period of integration during which ill-fitting solutions could damage competitive advantage. Initiatives like TAP mean that each new version of a technology is carefully developed in partnership with industry representatives who can bring upto-date information around market conditions and capability requirements to software vendors. According to Carlisle there is a “tremendous difference” between the current version of Microsoft AX and the 2012 version due to be released later this year. Of course every new ERP implementation and, to a lesser extent, every upgrade means a financial commitment and consequent expectation for ROI. With understanding of business priorities having been identified as a crucial element in successful technology exploitation table talk soon fell to the varying roles and responsibilities of IT and business professionals within any implementation. The challenge of engaging the right people and communicating the right message about the motivations behind technology implementations provoked some of the evening’s most animated debate. While there are many dynamics to be considered here, for example the technical knowledge of IT departments, as well as the

You can’t just pull in a system which is meant to be fantastic and assume that it is going to bring benefits. You need to understand how to capture information that is relevant to you Simon Charlton, Columbus IT

Bite sized review Key topics discussed at this event were: The importance of visibility across manufacturing sites in order to form a customer centric, economically sound, business strategy The importance of understanding how product and market will effect analytics The advantages of optimising ‘out of the box’ capability versus customisation The importance of thoroughly preparing data in order keep to budget and time plans The importance of understanding user engagement issues and securing implementation champions in the business The need for business ownership of IT projects

engagement and training of key groups in data preparation and system use, all attendees agreed that the role of the CEO in implementation was still often badly managed or understood. Charlton commented: “The CEO must champion the project. Not just sign the cheque.” The MDF dinners provide a valuable opportunity for informal discussion around important industry trends and policy developments. To find out more about the upcoming schedule of dinners contact Laura Williams at l.williams@sayonemendia.com

Thanks to Columbus IT for their sponsorship of this Nottingham-based dinner, and to all attendees for their contributions to the evening’s discussion.

Have your say at www.themanufacturer.com

Customer is

Business IT addresses a world ruled by consumers

“For

once, let’s hope that what happens in Vegas doesn’t stay in Vegas,” Marie Wieck, IBM’s general manager of application and integration middleware, told the crowd of 8,000 delegates in the opening session of Impact 2011, the company’s global IT conference, in Las Vegas in April. Judging by the case studies provided at the event, IBM is doing a pretty good job in taking its solutions to the four corners of the world. Government bodies, manufacturers – such as the Irish Dairy Board, see box – retailers, even hospitals, from the US to Spain and Australia, use IBM’s IT products for tasks ranging from supply chain optimisation to e-invoicing. In many cases, these are inspiring stories of resilience and the smart application of technology. Like that of the Madrid city council, which after the 2004 terrorist train bombings decided to deploy technology to coordinate the response of firefighters,

In this customer-centric world full of tweets and online product reviews, manufacturers can learn something from the retail sector. Roberto Priolo reports from Las Vegas on IBM’s newest solutions, designed to help companies adjust to new market conditions.

police and ambulances in emergency situations. The most interesting story is, however, that of footwear manufacturer Crocs, which years ago saw its stock price plunge to nearly zero and managed to reinvent itself by using solutions developed by Sterling Commerce, a company that IBM acquired last year, to solve its inventory problem and manage orders. Impact, a five-day event held from April 10 to 15, was an occasion for IBM to showcase its best work but also to launch new products, the most important of which were the Business Process Manager platform and the Smarter Commerce solution. The customer-centric mantra IBM repeated throughout the conference was that we are living in a world where customers are more empowered and demanding than ever before. They want to be able, for example, to place an order using their smartphones and then track it online in real time.

IT in

manufacturing

Panels were held throughout the conference

Irish Dairy Board Case Study The Irish Dairy Board (IDB), a manufacturer of dairy products with annual revenues of £1.8bn, exports to over 90 countries. It had experienced challenges with invoicing and, simultaneously, adhering to different national regulations. Already using Sterling Commerce’s enterprise integration solution, IDB started implementing the company’s e-invoicing system after a client required that it send a signed e-invoice (now an EU requirement). “In our business, delaying a million dollar invoice for a week represents significant money,” commented John Nugent, IDB’s systems development manager. “We have outsourced the complexity by implementing the Sterling solution.” Digitally signed invoices in PDF format are sent to customers and sent back to the company, which archives them. The IDB doesn’t own warehouses or transport infrastructure. Its supply chain is therefore very complicated. Sterling Commerce’s integrator feeds the company’s ERP system, linking all the partners. “The day you stop investing in IT is when you start going backwards,” Nugent concluded.

Craig Hayman, general manager, industry solutions at IBM, explained: “Customers use social networks, mobile devices, websites and influencers to make buying decisions today. These businesses must connect to these customers where, and how, they prefer to buy to be successful. At the same time, they need to make sure they have the means of managing their supplier and trading partner network effectively to ensure they have the products at the right time and place to meet this new customer demand.”

The power of re-invention This new world order where customers are empowered to rule as never before presents global businesses with new challenges. Manufacturers are no exception. Asked what lessons can manufacturing learn from retail, a sector with direct access to customers,

Richard Douglass, global manufacturing executive, said: “Manufacturers should look at the way retailers interact with their customers and think of the buyer as a person, and not simply an entity or more business. Even if you are a business buying from another business, you expect that kind of interface with suppliers. It is not about gift cards, but about how you customise your response to the single customer.” Smarter Commerce represents a market that IBM expects will grow to a value of $20bn in software alone by 2015. It is a solution designed to help companies adapt to the complexity of business and to customer demands in today’s digitally transformed B2B and B2C marketplace. According to Douglass, IBM’s products can also help manufacturers tackle traditional challenges such as price volatility and changing markets. “There are two ways to respond to these problems. At a strategic level, in these changed market patterns, manufacturers need to make important decisions on postponement, optimising their inventory, changing the flow of products and where to place their assets. On a more tactical level, we have fulfilment applications like that for transportation management, which can contribute to cutting out inefficiencies and lead times,” he said. If manufacturers want to survive in the new environment where information is abundant and constantly updated, where a bad review transmitted virally via social media can spoil months of work and where the customer has a new attitude to the buying experience, they will need to re-invent themselves and the way they do business.

The world’s leading Microsoft Dynamics ERP provider for Manufacturers Columbus IT specialise in Microsoft Dynamics ERP for the manufacturing and distribution sectors. We have a team of highly skilled consultants with deep-rooted industry knowledge and have successfully implemented over 5,000 globally. With customers in over 100 countries, Columbus has won the most partner awards from Microsoft globally. Columbus has a proven track record in providing low risk implementations, fast return on investment and exceptional customer service. Columbus helps Manufacturers and Distributors to:  Increase Operational Efficiency  Provide Insight into Business Intelligence  Collaborate across Supply Chain  Improve Customer Service  Increase Competitive Edge  Reduce the Cost of Compliance

Columbus and Aberdeen Group have teamed up to deliver a self-assessment tool that will allow you to identify areas for future improvement and investment. Benchmark your company against best in class discrete manufacturers and get analysts’ recommendations specific to your business. It’s FREE and you get your results immediately in a downloadable report. Get your custom-tailored assessment at: www.columbusit.co.uk/aberdeen

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IT in manufacturing

Hayman added: “Smarter Commerce can help manufacturers orientate themselves around customers rather than products and understand where customers place value – which is not where manufacturers place value. It’s like the joke: when you buy a drill, what you actually need is not a drill but a hole in the wall.” IBM, which celebrates its centennial this year, knows a thing or two about re-invention. Over the past century the company has invented the bar code, helped create the standard airline ticketing system, contributed to the US space programme, and designed and built PCs. Now, it develops IT solutions for companies that want to stay competitive in an increasingly complex marketplace.

Managing processes The two main solutions unveiled at Impact 2011 are good examples of IBM’s ability to create a comprehensive portfolio of solutions able to suit different business needs. Smarter Commerce offers advanced analytics, cloud computing, cross-channel commerce, social business and supply chain optimisation and execution. Business Process Manager is focused on giving both large and small companies visibility into their business operations so they can model, automate, monitor and adjust plans instantly.

The time needed to develop IBM products goes from days or weeks for mobile or device applications to months for more complex solutions. Joel Reed, executive director, product line management, B2B and commerce, industry solutions, said: “This is the complexity we take away from our customers.

Manufacturers should look at the way retailers interact with their customers and think of the buyer as a person.... It’s not about gift cards, but about how you customise your response to the single customer Richard Douglass, Global Manufacturing Executive, IBM

Another difficulty is to make tailor-made solutions: for instance, do they want to deploy them on premise, or use it though the Cloud?” According to Reed, the often strained partnership between business and IT is becoming stronger. “In many companies, IT people and supply chain people finish each others’ sentences,” he concluded.

Have your say at www.themanufacturer.com

Sizing

it up

The old adage: ‘If you can’t measure it, you can’t manage it’, has been applied to all areas of business. But where does quantification fit within supply chain management and how does a company ensure it is making the most of its supply chain opportunities?

Just how effective is your supply chain? In

today’s highly competitive global marketplace, the pressure on organisations to find new ways to create and deliver value to customers grows ever stronger. According to Martin Christopher, Emeritus Professor of Marketing and Logistics at Cranfield School of Management, there is a growing recognition that through logistic efficiency and effective management of the supply chain both cost reduction and service enhancement can be achieved. In his book Logistics and supply chain management: creating value-added networks

Benchmarking basics Benchmark your supply chain against the world’s best known organisations Compare your performance to your peers and best-in-class Provide analysis tailored to your particular industry sector and/or supply chain type Analyse cost and service by individual supply chain functions (from purchasing to transportation through inventory management and warehousing) Provide hard data and demonstrable metrics Quantify ‘the size of the prize’ - the real financial benefits to be gained Provide an improvement plan with key recommendations for short, medium and long term action

Christopher says the goal of supply chain management is to link the marketplace the distribution network, the manufacturing process and the procurement activity in such a way that customers are serviced at higher levels and yet at a lower total cost. As transport and raw material costs continue to increase and generate greater competitive pressure, the need to maximise logistical efficiency will undoubtedly grow. According to consultants Davies & Robson, benchmarking a supply chain can begin with a simple comparison of easily identified factors, such as transport rates. This can then be extended right through to an in depth exercise looking at how processes operate and comparing them to best practice for similar processes in another organisations. It is important to realise that benchmarking in general and supply chain benchmarking in particular don’t have to be completed within the same industry. For example, benchmarking a defined process such as order processing using process mapping can be done across different sectors, allowing best practice developed in one industry to be transferred to another. Detailed benchmarking can review costs, measures (service levels, productivity) and processes. Process mapping your operations and then benchmarking them against another similar best practice operation enables the setting of internal targets for which you can aim.

You can’t improve what you don’t measure Oliver Wight partner, Jerry Shanahan, says that benchmarking your supply chain performance can improve service and reduce supply chain costs by as much as 50%, and argues that it is a critical activity to keep competitors at bay.

Supplychain Logistics and Materials Handling

In recent years, benchmarking has become one of the most popular management tools. In some instances, taking precedence over strategic planning, because it allows organisations to improve service at the same time as reducing costs. Shanahan comments: “This may seem counter-intuitive but Oliver Wight’s own experience bears this out. In fact our data shows that supply chains which deliver best-inclass service to customers, do so at half the cost of their peers. And of course if you can deliver a superior service, you can charge more for it, so it becomes a virtuous circle.” But if you don’t know how well you are performing, or what best-inclass looks like, how do you know where you can improve, or by how much? Critically, benchmarking your supply chain performance will allow you to identify performance gaps and provide a financial evaluation of the gains that can be made off the back of performance improvement. Typically you can expect the potential savings to be at least ten times the cost of benchmarking. So it’s not really surprising that benchmarking is such a popular tool. Oliver Wight has an online supply chain benchmarking tool, which is used globally, by all sizes of organisations in all industry sectors, including matrix structures and multiple supply chains. It comprises over 200 questions, which allow clients a deep-dive evaluation of supply chain performance, using their own data to both quantify their current position and to compare it to best-in-class. Using the principle of delivering ‘The perfect order’, a detailed report then reveals (in financial terms) precisely where and how big the improvement opportunities are, and what can be done to take advantage of those opportunities. The gains can easily run into millions of pounds. Of course, if you aspire to be the best you need to know what best looks like. Benchmarking performance is critical if you want to defend and improve your competitive position. And if you are performing well, it allows you to demonstrate to customers (and prospects) that your performance is superior to your peers.

Removing the supply strain @logistitcs provides a new opportunity Geodis Wilson, Italsempione, Fiat and a leading UK food group use the @logistics Reply WMS product suite to run their warehouse operations. Its software as a service (SaaS) warehouse management solution (WMS), SideUp, provides complete visibility of the supply chain from warehouse to delivery. It supports ideal stock placement through to route and fleet management. Geodis Wilson, a leading freight forwarding company has achieved an Approved Economic Operator (AEO) certification as a result of increased accuracy in traceability gained by installing SideUp Reply. SideUp Reply’s cost containment, extremely fast activation times (the system was activated in two weeks), ease of use and flexibility prompted Geodis Wilson’s choice to select this solution. “We chose SideUp Reply because it guarantees shorter delivery times and, above all, flexibility in managing operating costs thanks to the ‘on demand’ supply model” says Mauro Baldoni, IT Manager of Geodis Wilson Italia. “Another aspect that influenced our decision was the fact that you are able to use the system without it having to be installed at the premises of individual customers and the possibility it offers in terms of sharing information with our customers, via the internet.” In addition, a leading UK food group, supplying major UK retailers, is now saving £4,000 - £5,000 in supplier fines each week since deploying SideUp. This is the result of accurate order delivery; improved date rotation to ensure the delivery of optimum shelf life products and the virtual elimination of costly ‘special transports’, which have to be borne by the supplier. Inventory control and customer service are also improved, while scrappage is reduced. “SideUp presents a new paradigm for the supply chain sector, particularly for warehouse environments with very high density transaction requirements and rapid start-up needs,” says Jez Tongue, partner, @logistics Reply UK. “Because it can be purchased as a hosted (SaaS) option there is limited upfront cost. A WMS on demand is also a cost-effective route for businesses with a limited budget for hardware and software investment, and limited IT personnel. It provides companies with the customisable scalability to pay as little as they wish for the functions they need - with no contractual constraints. SideUp Reply provides: Reduction of stocks with the same level of service Reduction in the number of errors Reduction in order delivery times Real-time visibility over the progress of your operations Automation of operational processes Automatic acquisition and transfer of information in real time Integration with company IT systems or those of your partners

Supply chain, Logistics and Materials Handling

Measure, improve, measure again Supply chain benchmarking tool ranks you against the best

the Bain and Company, Management Tools and Trends report 2009, which surveyed nearly 1,500 executives on the most important business tools, benchmarking came out on top, higher even than strategic planning. In the recovering economy, benchmarking against global peers appears to be more popular than ever. Jerry Shanahan, a partner at business improvement specialist Oliver Wight, says his company is phenomenally busy as more organisations want to benchmark themselves against the world’s best. There are a number of very good reasons to benchmark yourself against the competition, but chief among them is establishing where the bar really is. Companies typically are good at defining what the key measures of business performance need to be, but without benchmarking they will struggle to understand what targets the business needs to set against these measures. “Many organisations operate comfortably on the basis they are improving year-on-year but it’s no use settling for double-digit growth, if your competitors are expanding at 25 percent and you are losing market share, or they are operating with a lower cost base and will eventually overhaul you,” says Shanahan. “Benchmarking places a different lens on a company from an external perspective.” He believes benchmarking can fundamentally change the vision of the organisation. “Business leaders typically ask their people ‘what can we do to improve’,” he says. “But the question becomes, ‘what will it take to become best-in-class’. That establishes a very different organisational motivation and people start to come up with initiatives they otherwise wouldn’t have.” Oliver Wight is renowned for its Integrated Business Planning (IBP) or advanced S&OP model and in helping organisations optimise their supply chain. The consultancy firm has worked with hundreds of companies and is able to offer customers a substantial database of

Supply chain costs as a percentage of gross sales

Have your say at www.themanufacturer.com

organisations against which they can benchmark their supply chain performance. There is sufficient critical mass in the database for companies to be able to select which types of organisation and/or supply chain to be measured against, according to their size, sector and nature of manufacturing and distribution. With the guidance of Oliver Wight and using their own data, companies use an online benchmarking tool, comprising some 128 criteria, to perform a deep-dive evaluation of their supply chain performance relative to their specified competition. The measures against which supply chains are assessed, are the global standards set by the Supply Chain Council’s SCOR® model, and using the principle of delivering ‘the perfect order’, the Oliver Wight tool evaluates performance against: order accuracy, inventory availability, on-time in-full delivery (OTIF), customer acceptance and accuracy of invoicing. The resulting ‘improvement report’ reveals (in financial terms) precisely where and how big the improvement opportunities are. The gains can easily run into millions of pounds. The opportunities are identified across individual supply chain functions, from purchasing administration through to customer service, and targets are set to show the performance level required for decile unit improvements relative to the organisations’ peer group. “Delivering on service will naturally reduce cost,” says Shanahan. “And the data proves that supply chains providing best-in-class service, do so at half the costs of their peers. ” On top of the hard data analysis, the improvement report makes recommendations, on how and where to make gains in the short medium and long term, identifying the priorities, training needs and the opportunity for quick wins. The ‘financialisation’ makes benchmarking a powerful tool in justifying the cost of any improvement activity. “Financial people always want to know what the return will be and benchmarking in this way makes it clear from the outset,” says Shanahan

What type of companies use the tool? “As long as it has a complete end-to-end supply chain system from order to delivery, any company could use it,” Shanahan says. “But they tend to be mid-size to large, and/or publically-listed companies.” Why is supply chain benchmarking increasing in popularity? “Because it is critical if you want to defend and improve your competitive position. And of course once you have made gains it then becomes a useful sales tool. Being able to demonstrate you are in the top decile for your sector has got to be good for business.” To use a simple sporting analogy, if you intend to be the fastest man in the world, you know you have to beat Usain Bolt’s 100m time of 9.58 seconds. It is an unambiguous goal.

Specialfeature TIMTOS 2011

Made in

sold

everywhere

The Taipei International Machine Tool Show 2011 is a big, bold window into a booming and heavily integrated manufacturing industry, backed by myriad trade bodies and government, with lofty ambitions to become the third largest machine tool export country in the world. Will Stirling joined over 40,000 other visitors and finds little to dismiss the claims.

‘Made

in Taiwan’ is a moniker that many of us grew up with, especially for products like consumer electronics, bicycles and toys. But many Westerners might be surprised to learn that Taiwan’s machine tool industry is the country’s most important industry by value. Visit the Taipei International Machine Tool Show 2011 (TIMTOS) – Asia’s second biggest manufacturing technology show and the third biggest in the world – however, and it becomes clear how important, and how fast-moving, this industry is. Taiwan’s machine tool output reached $4.8bn in 2008 and grew at 11.3% since 2007. That value crashed to $2.42bn in 2009 (of which exports made up $1.7bn) following the global financial crisis, but has rebounded strongly. From January to October 2010, the export value of Taiwanese machine tools increased 68.4% compared with the same period in 2009. Forecasts, internally produced, estimate that Taiwan’s machine tool output will grow by 50% in 2010 and regain its $4bn level. The country is now the world’s fifth largest machine tool exporting

From left to right: Huang Ming-Ho, General Manager of Victor Taichung; Ma Ying-Jeou, President of Taiwan; Hsu HsiuTsang, Chairman of TAMI; Wang Chih-Kang, Chairman of TAITRA

country, after Japan, Germany, China, and Italy and nearly 75% of this output is exported. Furthermore, the Taiwan External Trade Development Council, or TAITRA, expects machine tool exports globally to increase from $4bn in 2011 to $7bn by 2015, which (allowing for normal growth elsewhere) would make Taiwan leapfrog to third place in the world rankings.

Big industry, vertical integration The sheer diversity of machinery and components on display at TIMTOS is staggering. Not just the different types of machines, but the number of domestic companies competing in the same class of machine tool. There are more than 600 machine tool manufacturers and over 200 manufacturers of components and accessories – such as ball screws, tooling and bearings – in Taiwan. Many of these companies are congregated in the Taichung Industrial Park, a cluster of high-tech companies over 370 hectares in Taichung City which accommodates 926 companies. But machinery companies are everywhere here; science and technology parks have

The Taiwan International Machine Tool Show, the 3rd largest in the world, attracted 40, 819 visitors in 2011. By comparison MACH 2010 in the UK attracted 20,117 visitors.

been established all over the country, including the Hsinchu Science and Technology Park, Central Taiwan, Changhua Erlin Precision Machinery Park, Neihu Technology Park and more. The industry is very well-represented by trade associations – at least seven for the domestic machine tool industry alone – and seems very well integrated, or at least it put on a convincing united front for TIMTOS. President of Taiwan Ma Ying-Jeou opened the show, supported by five senior executives from the Taiwanese machinery industry, including show organisers TAMI, the Taiwan Association of Machinery Industry, and TMBA, the Taiwan Machine Tool & Accessory Builders’ Association. These were also supported by senior visiting executives from Japan and China. Judging by the size of the show – over 90,000m2 of floor space occupied by 928 exhibitors, 676 of which are

Taiwanese – the manufacturing technology industry is highly integrated and supported by its trade bodies and universities. The website ‘4 International Colleges and Universities.com’ lists 111 universities and higher education institutions in Taiwan, many of which are technical in orientation, and TAMI says there is a big programme linking them to the machine tool sector. At the top of this collaborative tree is the Industrial Technology Research Institute. Founded in 1973, ITRI is a national research organisation with a mission to conduct technological research, promoting industrial development, creating economic value and improving social welfare for Taiwan. More than 60% of ITRI’s 6,000 employees hold either a Master’s degree or PhD in their respective field of studies, ranging from information and communication technologies to electronics and optoelectronics (with semiconductors, one of Taiwan’s two existing ‘trillion New Taiwan dollar’ industries), to mechanical and systems technologies. ITRI has spawned several spin-outs, some of which are successful machine tool makers, such as WELE Mechatronic Co (see below). The driver for all this collaboration? The Taiwan government has listed precision machinery as one of the key industries in its sixyear national development plan, and has designated the Central Taiwan Science Park as a national centre for developing the precision machinery and aerospace industries. The Ministry of Economic Affairs’ new “Trillion NT Dollar High-value Machinery Industry Development Plan” calls for the machine tool sector to achieve double-digit growth, and claims it will help parts and component suppliers to attain a high degree of self-reliance and increase product added value. President of TAMI C.C Wang says the organisation helps its members in several ways. “Each year we help our members at more than 10 international machine tool shows in the world – next month in Beijing, then India, Turkey and other countries. We can help maybe 20 small SMEs access foreign shows as one group, lowering the cost.” Is the Taiwanese government supportive of this industry? “The government provides some money through the association to our members. This subsidises maybe 10%-20% of total cost of our marketing activities. It helps, but the German government also does this for their trade associations, and it’s the same in Korea, in China – it’s competitive.”

ECFA gives Taiwan a leg-up Following a comparatively moribund 2009, the signing of the Economic Cooperation Framework Agreement, or ECFA, in June 2010, was undoubtedly the most important event for Taiwan’s machine tool industry. ECFA allows more Taiwanese companies to export products to China, Taiwan’s biggest machine tool export market (31% of total exports in 2009), with reduced or zero tariffs. So far the impact is modest

Special feature TIMTOS 2011

Tooled-up: Selection of Taiwan’s headline machine tool companies Luren Precision Founded in 1994 Luren Precision Co Ltd. began production of gear cutting tools at Hsin-Chu ScienceBased Industrial Park, Taiwan. Again, key members of the team came from the Industrial Technology Research Institute (ITRI) who had experience in developing high precision machinery to produce aircraft gears and components. The company set up three main departments which focus on gear cutting tools, spin pumps and machinery. In addition, Luren has established a technology development team which integrates universities, especially Tongtai University, and ITRI to assist with product development. Today many PhD students work on their engineering dissertations at Luren. The company stopped taking IP from ITRI 17-years ago. “At the start we focused on hob and shaper gear cutters. We brought together six gear companies to form a union and a technology team from ITRI,” says Luren president Chuck S.D Chen. “The aim was to supply gear cutters for local gear manufacturers so they wouldn’t need to buy from Italian and German companies.” Luren then developed a machine it needed for its own product development; now its second product base is a vertical-type gear grinder, with a 10mm to 800mm range Y-axis. The biggest export market is China – ECFA means it can avoid the expense of building a factory there – and now Japan, Korea, Europe, the US and South Asia, and increasingly India and Turkey, are strong markets. In 2010, turnover was NT$560m and it expects to sell about 50 machines this year and hopes to hit NT$700m this year. Its newest machine for TIMTOS is designed for machining gears used for applications like machine tools and high speed trains, up to 800mm diameter. “A new machine in development is 1.2m in diameter. And we may go up to two metres – this size cutter currently only comes from Germany and Switzerland, not even Japan,” says Mr Chen. Luren has also invested heavily its CNC software. A built-in computer transfers any AC code from different controller types into the code needed to control all the movements.

Four-year old WELE won the Supreme Excellence award at TIMTOS 2011, for its VTC-2500H vertical multitasking turning centre. It was promoted as being internationally competitive on price, completely Taiwan-made and ideal for aerospace and wind energy applications.

WELE Mechatronic Co Ltd. Makers of large vertical type, bridge type and gantry type machining centres, Wele, has an interesting provenance. Spun-out from Taiwan’s venerable Industrial Technology Research Institute (ITRI) founder and president YongChang Kuan and a team from ITRI wanted to form a company in which the management and ownership was independent, so they could concentrate fully on technology. They created AWEA, which ran for 22 years, but when the main shareholder wanted to take over the company management, Mr. Kuan and the management team quit the company they founded. Four years ago Wele, derived from “We Lead”, was born. Since then, partly thanks to sizeable investment from the JTEKT Corp of Japan (owned by the Toyota), a 40% shareholder, it has developed a strong reputation for large machining centres. Wele won the Supreme Excellence Award for its VTC-2500H vertical multi-tasking turning centre at the 2011 TIMTOS Awards for Excellence in Research and Innovation. The VTC2500 vertical turning centre has a large, 2.5m turning table with hydrostatic bearing, which can do servo-turning to 1,000th of a degree. It is particularly suited to machine big gear bearings for wind turbines and trains. “It has several new patented concepts,” says president Y.C. Kuan. “We’ve engineered the horizontal tooling head to the vertical ram with a self-locking mechanism. It needs a very small hydraulic force to lift to the vertical position, engage and self-lock. The tool changer, which allows a range of smaller tools to be selected, is also patented.” Wele did not sell any large machines at TIMTOS, “but we had several interested customers and follow-up action is still ongoing,” he adds. An interview with Y.C. Kuan of WELE, YCM and Luren Precision is available on www.themanufacturer.com.

Luren Precision, makers of gear grinding and finishing machines, wins the Taiwan Excellence Award 2011, held at TIMTOS.

Tooled-up: Selection of Taiwan’s headline machine tool companies Hiwin Technologies Corp Hiwin is arguably the world’s leading linear transmission technology brand. One of Taiwan’s biggest technology companies, it designs and develops numerous high precision transmission elements, like micro- up to large ball screws, linear guideways and robot components. Senior executive vice-president Sean Yang was keen to demonstrate Hiwin’s new linear guideway RG series. The high rigidity roller series is designed with computer simulation to optimise the roller’s circulation pathway. The patented design, Hiwin claims, delivers, less impact, smoother movement and steady torque output. The RG series uses a roller as the rolling element instead of steel balls and features very high rigidity, low elastic deformation and is capable of supporting loads from four directions. Applications will tend to be high end automation systems, transportation equipment, CNC machining centres and heavy duty cutting machines. The company has also developed a programmable robot that can play the piano! Hiwin recently completed its corporate HQ and new plant in the Taichung Precision Technology Park, and to protect its top position in linear transmission it has established R&D centres in Germany, Japan and Russia. It has overseas subsidiaries in these countries as well as the Czech Republic, France, Switzerland and the US.

Yeong Chin Machinery Industries Co Ltd (YCM) YCM is well-known in Europe, competing at the high end in vertical, horizontal and bridge type machining centres and CNC lathes. Established in 1954 it was the first Taiwanese machine tool company to be awarded ISO 9001 QA certification and has developed its own production system, the YCMPS model, to check quality at every checkpoint and ensure on-time delivery. Two new flagship machines were on show at TIMTOS. The TCV3000A is a travelling column, multi-face vertical machining centre with an integrated 800mm diameter rotary table. It can accommodate long workpieces and machines parts up to 3,000mm, so has been designed specifically for aerospace applications. The split cabinet allows you to machine large pieces separately, in 3-axis on the left and 5-axis on the right side. The NTV158A is a new, high efficiency T-base vertical milling machining centre with a large Y-axis that makes it well suited for large mould makers and general job shop applications. YCM sold one FX380A model and one NT2000SY at TIMTOS. More YCM machines will be on display at the EMO trade show Hannover in September.

YCM’s TCV3000-5AF is a split compartment, travelling column multi-face vertical machining centre that can machine parts up to 3,000mm length. It has been specially designed for large aerospace components.

Yeong Chin Machinery Industries (YCM)’s new high efficiency, T-base vertical machining centre with a large Y axis, well suited to mould makers. YCM is represented in the UK by YMT Ltd.

Special feature TIMTOS 2011

– of 54 items related to machine tools on the ‘Early Harvest List’ of ECFA’s first phase, only 17 are pure machine tool models. More is to come though. “Perhaps about 100 items will be covered by ECFA by the year end,” says TAMI’s president C.C Wang. We aim to have 600 items, on both sides, included over the ECFA period. We plan to do about 200 per year, out to 2014. Maybe, but it’s a good start.” TAMI says the agreement will also help improve communication and cooperation between companies in the two countries. This is important. Since 2004, which heralded a bull run for emerging Asian markets, China’s demand for machine tools has increased by 42% and TAMI says China consumes about 100,000 units per year. This vast appetite has made China a target for producers globally, and while Taiwan’s footprint is strong, augmented by ECFA, competition is fierce. The Chinese like high quality brands and while the quality of Taiwanese machine tool makers is high, more work is needed to match the reputation of certain Japanese, German and US brands that Chinese manufacturers have the cash to pay for (see interview with Renishaw chairman Sir David McMurtry on page 28).

So why is this relevant to me? UK companies using CNC machine tools, especially metal cutting machine tools like machining centres

and lathes, and metal shaping tools, will know about Taiwan’s offerings. Some Taiwanese makes are wellestablished in the UK. YCM Industries is represented in the UK by YMT Ltd, while Dahlih, Tongtai and several of the big names have distributors or subsidiaries in the UK. Hiwin, the big linear motion control and systems manufacturer, acquired Matrix Machine Tool in Coventry recently and Soco, the world’s second biggest tube bending brand, also bought Langbow in the UK last year. “Taiwanese machine tools are definitely increasing in popularity in the UK,” says Neil Williams, sales director at Ward Hi-Tech, who represents Dahlih in the UK. “They have closed the gap on the prestigious Japanese and European makes. In fact, the quality of these machines has been high for a long time, but historically some buyers have been a little suspicious about Taiwanese quality compared with Japanese machine tools. Now Taiwan brands are more familiar in the UK market, and in some cases they’re available at up to a 20 per cent discount to Japanese makes, these views are fading.” Figures from the Manufacturing Technologies Association’s survey actually show a small dip in machine tools imported from Taiwan between 2009 and 2010, but anecdotally UK buyer interest in machines from South East Asia is growing.

Have your say at www.themanufacturer.com

EEFInsight Absenteeism under the spotlight Jill Davies, Chief Executive of not-for-profit health insurer Westfield Health, discusses the results and the significance of the EEF/Westfield Health Sickness and Absence Survey 2011.

Against

the backdrop of one of the most talked about Budgets for many years, the ongoing anxiety surrounding the UK’s financial buoyancy and the ‘paused’ NHS reforms which are causing much debate, the EEF/Westfield Health 2011 Sickness and Absence Survey is more than timely and highly relevant. It is an often spoken mantra that a company’s workforce is its biggest asset. This well recognised phrase is, of course, absolutely true, but not for many a generation has it been loaded with as much significance, with the bottom line of every business being scrutinised with an even finer tooth-comb. With the importance of a slick and productive workforce facing extra emphasis, the absence rate – the raison d’être for many a HR Director – has now gone beyond its already important KPI status in a company’s performance. It is now firmly positioned as an essential component when considering forecasts, business development and company strategy. An employer’s ability to intervene or control absence is of course influenced by a variety of external factors, including the cost of everyday preventative healthcare, and the speed with which NHS treatment can be accessed by their staff. However, it’s fair to say that the current healthcare reforms and drive for NHS efficiency savings are weakening public confidence in the NHS, at least for the short to medium term. The overall results of the survey are certainly encouraging. The main finding, that sickness absence rates continue to fall, shows that the right steps are being taken to continue this positive trend – but there is still plenty to be done. As a health insurance provider, we were particularly encouraged to see that most companies are using some form of health insurance scheme to tackle absence rates. We envisage this trend continuing as providers develop benefits that complement the NHS in areas where provision is limited or unavailable, while also offering highly

Have your say at www.themanufacturer.com

relevant health plans for businesses to help negate the impact of sickness absence. EEF companies continued to take on a more proactive role in employee healthcare during 2010, and over two fifths are already making use of private healthcare to speed up rehabilitation. We suspect private provision may prove a rising trend as the UK comes out of recession and as health service reforms continue to create public uncertainly about the speed of access to NHS services. The Government certainly has a role to play here. At present treatments such as physiotherapy may be taxed as a benefit in kind, particularly if it treats a condition not caused by work. This is a major disincentive to their provision. Changing this would have only a small impact on tax revenue, but would send an important signal to employers about the importance of their role in providing for rehabilitation. Westfield’s recent experience has been one of robust corporate demand for health benefits, with employers in recovering sectors such as manufacturing valuing cost-effective healthcare insurance to help them maintain a healthy and productive workforce. As the healthcare reforms bed in, the recovery takes hold and Dame Carol Black’s new sickness absence enquiry moves forward, we expect that more employers will pick up the absence management baton, recognising the impact of facilitating early intervention. We remain optimistic that combined action by the Government, the health profession and employers to address the issues and recommendations highlighted by this report, will result in continued progress towards reducing the impact of sickness absence on UK manufacturing industry.

Manufacturinginaction Sponsored by Applied Angle

Putting UK manufacturers under the spotlight Factory of the month

Morgan Motor Company 88 Moggie Magic Morgan Motor Company continues to defy convention and build cars that are seductive, distinctive, appealing and beloved by generations of the brand’s enthusiasts. And it does so in a contemporary way, Ruari McCallion learned from operations and sales director Steve Morris.

CONSTRUCTION MATERIALS

British Gypsum 102 Applying new business processes, driving out waste and embracing change, British Gypsum is focused on the next phase in its efficiency mission reports Will Stirling.

FOOD AND DRINK

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Askeys 113 Ice cream accompaniments manufacturer Askeys has a rich history that dates back over 100 years. Mark Young talks to site manager Abdullah Khan about the company’s recent change in direction following its 2004 buyout by the retail arm of British Sugar.

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FOOD AND DRINK

TSC Foods 120 North Lincolnshire–based food manufacturer TSC Foods was founded in 1991 by foodie entrepreneurs Chris Copestake and Paul Smith who had a bright idea for creating chilled and frozen soups and sauces.

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CONSTRUCTION

AJP 124 MD of AJP Services, Andy Groom, talks to Tim Brown about the changing skills landscape and the growing trend for companies to outsource their maintenance requirements.

124 All companies featured will be entered into the MIA Award 2011

MoggieMagic

Factory of the month Morgan Motor Company

Morgan Motor Company continues to defy convention and build cars that are seductive, distinctive, appealing and beloved by generations of the brand’s enthusiasts. And it does so in a contemporary way, Ruari McCallion learned from operations and sales director Steve Morris.

was Friday evening in Newport, South Wales, at the end of a rain-soaked first day of the Ryder Cup. An American visitor was gazing across the car park, trying to find his car – a Ford, a silver one’, he says. I looked across the shining sea of silver European cars stretching out to the horizon and wished him good luck, before setting off to find my own silver conveyance. Our American visitor would have done better to hire a Morgan. Its distinctive shape is unmistakable, they come in a wide variety of colours and even the silver one has a contrasting black roof. The Morgan’s shape, all swooping wings and 1940s style, is so unusual that it has actually been patented. The 4+4 and Plus 8 Roadsters have been familiar sights on the roads of the UK and overseas since the late 1950s and look very much the same as they always did – purchasers can

We have grown very gently and organically. Eight or nine years ago, we were making 400-500 cars. This year, we will make between 1000 and 1100 Steve Morris, Operations and Sales Director

The shape of things to come - Morgan EvaGT

even specify a vintage-style leather bonnet strap, if they so wish. The Aero platform, now manifested in the £120,000 Aero SuperSport, is different. Launched in 2000, it is not a radical departure from the established, classic silhouette but rather a very effective reworking and updating of an enduring design. Underneath the exterior is a thoroughly modern car, with a bonded aluminium chassis and a 4.8-litre 367bhp BMW engine, with top-end tuning undertaken by Morgan itself. With a power to weight ratio of 315 bhp/tonne, it burbles and growls in a very purposeful manner and is capable of pushing the car to 170mph. Racing versions have enjoyed success in GT and Britcar competition.

Factory of the month Morgan Motor Company

Passionate pursuits Morgan is a small company but it has its place in the motoring marketplace, a fact recognised by no less a person than Soichiro Honda, who says that, in the future, there would only be a few large auto manufacturers – and Morgan. The name is all about passion. Its customers are passionate about their cars and the marque itself. Purchasers often own more than one – when they

After the basic ladder frame has been built up into a rolling chassis, the Morgan Roadster is wheeled to the next stage to acquire its bodywork

want a new vehicle they buy another and keep what they already have. The price of the entry-level 4+4 tops £30,000 and even the new three-wheeler, with an iconic frontmounted 1800cc V-Twin two-cylinder engine, will lighten your wallet to the tune of £25,000 ex VAT or so. Buying a Morgan is not simply about practicality; it is about passion, an emotional relationship with the badge and its products. The feeling extends to the company itself, whose premises nestle at the foot of the Malvern Hills in Worcestershire. “Passion is a big part of the business,” says Steve Morris, operations and sales director. He has been with

High-performance Heritage Goldline Bearings was established in 1972 and over the last thirty years has worked closely with Formula 1 designers and operators to offer a worldwide service for high-performance bearings and allied products.

he Ampep Goldline * X1 and XLNT F1 generation of rod end and spherical bearings, introduced into the performance car market, are based on the current ‘state of the art’ aerospace materials technology, applied to configurations and size ranges which have been established in high-performance car applications.

The Ampep X1 liner system is qualified to the American Military Standard (MIL-B81820) and when bearing life is determined by a backlash limit criterion, the reduced wear rate of the unique liner system, compared with the Fiberslip liner technology, will increase life by a factor of X5 for a .004” backlash value.

Goldline Bearings and Morgan Cars have worked closely together in the design and development of components for the Aero Supersport generation cars. These include unique rod ends and spherical bearings with independent, long, cantilever, upper arms and lower wishbones. X1 liner system performance levels, established by Goldline for Formula 1 applications, were selected to best suit the car offering an extended bearing life with a kerb weight of 1180kg along with 367bhp at 5750 rpm.

Morgan Cars have long demanded the very best in quality and longevity and Goldline Bearings was able to offer race proven quality and performance as part of its commitment to excellence. * SKF aerospace registered trade mark Published in association with: gOLDLINE bEARINGS ltd Stafford Park 17, Telford, Shropshire TF3 3DG

Tel: 01952 292401 Fax: 01952 292403 Email: mikej@goldlinebearings.co.uk Web: www.goldlinebearings.com

Factory of the month Morgan Motor Company

the company for nearly 30 years and started as an apprentice. “We employ 185 people and that attitude, that passion, feeds through to the results, what we get out at the end of it.” Head of the company, Charles Morgan, is the grandson of the founder. When asked ‘what are you most proud of?’, Charles Morgan’s father’s reply gives an indication of the company’s core values. He responded that he was most proud of never having made anyone redundant, and that record continues right up to today. “We have grown very gently and organically,” says Morris. “Looking back eight or nine years, we were making 400-500 cars. Three years ago we made around 700; this year, we will make between 1000 and 1100.” This is an interesting statistic. Morgans are discretionary purchases – they are non-essential and you can’t really

Crafted leather seating

In 1997 we could just Superform the wings; today, we can do the whole of the Aero platform range bodywork in Superform Steve Morris, Operations and Sales Director Crafts remain a Morgan core value

‘downsize’ to a smaller or cheaper model if times are tight. The results from other luxury or specialist car companies show that their sales fell off a cliff in the aftermath of the credit crunch; Morgan sales did not just stay steady, they actually grew. We discussed the contrasting fortunes of other names in the same price bracket and Morris offered some interesting observations.

Traditional values, advanced techniques “For me, exclusivity is part of that magical formula. I’m not saying [Brand X – a luxury car manufacturer] is not exclusive but perception is a wonderful thing,” he says. “Our differentiation includes the way our cars are put together, the way our customers

Handcrafted wood and leather traditional Morgan materials

Banner BANNER AGM BATTERY ADVANCED TECHNOLOGY ACKNOWLEDGED BY AUDI, BMW & VW.

anner’s ‘Running Bull’ AGM batteries are fitted by Audi, BMW & VW as OE, chosen for their exceptional power to meet the high energy demands of Start/ Stop systems. Banner have been at the forefront in the development of AGM (absorbent glass mat) technology which is a major advancement in the development of the lead-acid battery, facilitating more flexible and extensive energy management in modern vehicles contributing to a reduction in CO2 emissions and fuel consumption. ‘Running Bull’ AGM batteries lead the field due to better cold starting characteristics, massively increased vibration resistance and an operating life three times longer than a standard lead -acid battery. ‘Running Bull’ also incorporates a closed system which

ensures zero maintenance and maximum of companies worldwide in a diverse protection against leakage. range of manufacturing fields including As a consequence of its advanced Car, commercial vehicle and motor home technology and superior power ‘Running manufacturers such as Audi, BMW, Bull’ is mainly used in vehicles with high Chrysler, MAN, Mitsubishi, Skoda, Scania, energy requirements. In this area the Aston Martin, Morgan, Porsche, Caterham, battery provides flexible power vehicles VW, Volvo, Mercedes, Leibherr, KTM, with Start/Stop systems, premium Detleffs, Pilot, Rapido, etc... class cars, emergency vehicles, taxis, The comprehensive range of Banner motor homes or vehicles with retrofitted “Running Bull” AGM batteries cover most equipment (sound systems, heaters, TV and makes and models with Stop/Start systems. communications, etc.). Since its foundation in Published in association with: 1937 in Austria, Banner has Banner Batteries (GB) Ltd remained an independent family run business with Tel: 01889 571100 an incredible reputation for Email: office.bgb@bannerbatteries.com supreme quality and technical Web: www.bannerbatteries.com innovation. Today it supplies OE equipment to a vast number

Factory of the month Morgan Motor Company

perceive how the cars are made, that is all part of it.” The way the cars are built is, indeed, both unusual and crucial – and it attracts around 500 visitors a week, who pay for a factory tour. Morgan is a craft-based company but it has never been averse to exploring new technologies and new ideas. It had a substantially GRP-bodied car as long ago as the early 1960s. When the Aero first appeared, in 2000, it was something of a revelation and its dramatic looks were the manifestation of new ideas. “We were the first users of Superform in the auto industry, in 1997, for the Classic [model],” says Morris. “We have seen changes, big changes, over time, but they happen bit by bit. It’s only when we look back that we realise how far we have come. In 1997 we could just Superform the wings; today, we can do the whole of

the Aero platform range bodywork in Superform.” What is Superform? It uses air pressure and heat rather than conventional beating, to form panels into complex shapes.

Superform “The aluminium is heated to 450 C, – to the point where it is malleable,” he explained. “It is then blown by air

The site may be prohibitive in how far we can ultimately go and it is a continual battle to make ourselves more efficient and effective Steve Morris, Operations and Sales Director

pressure and formed over the steel tools.” Body Panels are designed and the forming shapes are made in cast steel in-house. Forming itself is carried out by Superform Aluminium, located a few miles away, in Worcester. The Classic models use Superform for their wings and cowls; most of the Aero’s curvaceous and aerodynamic

The latest iteration of the bonded aluminium Morgan Aero platform - the SuperSports

Factory of the month Morgan Motor Company

bodywork is produced in the process. It is expensive but it offers high quality and guaranteed repeatability. Underneath the seductive shapes are further examples of the crafts that are Morgan core skills. Ash – the wood, not the by-product of burning – is still an integral part of the cars’ frames. They are made and shaped using a blend of traditional wooden presses and contemporary bag techniques. In the latter process, a former is used to create the shape for the part and a vacuum sucks the wood down onto it. The process produces very strong components – the central spine for the AeroMax’ roof is made this way and if it is good enough for a 180-mph sports car, it is good enough for pretty much anything. The company does not have robots and is unlikely to in the foreseeable future. Part of the reason is the capital commitment but the company’s traditions also weigh heavily in the balance. The basic chassis frame – ladder in the case of the Classic and bonded aluminium in the case of the Aero platform, including today’s SuperSports – is brought into the top end of the factory (in the case of the Classics) and placed on two trestles. One operative then has the responsibility of building it up to a rolling chassis, adding the differential, axles, suspension, electric wiring loom and much else, short of the bodywork and engine. It is then wheeled down the hill to the next stage, which is painting.

The Morgan ‘waterfall’ grille is a copyrighted design

Achieving a balance “Above the chassis, the two models have very similar construction processes,” says Morris. “We are trying to build-in flexibility in manufacturing. If I want to, today I can

Electric motors at the heart of the Morgan Life Car concept

Continuous product improvement MB Components (SW) Ltd is a specialist in the design, manufacture, and supply of steel products specialising in stainless steel.

ith products ranging from exhausts to horse carriages, MB Components prides itself on offering clients quality products at value for money. MB Components formed in 1999 as a family run business to supply Morgan Motor Company stainless steel exhausts for their production cars. This first order was delivered on time and in budget. MB has since designed and supplied exhausts, water pipes and seat frames for their standard production cars as well as having great involvement of the Aero 8 and super car range. MB Components is proud of its status as a top tier supplier to Morgan. A strong and successful partnership has been forged by continuous product improvement

the product and commitment to value. Despite this success, MB has retained its emphasis as a family run business, giving personalised attention and support. Our skilled workforce operates from a 5000 square feet manufacturing plant in Devon and we can offer a range of products and services including CNC tube manipulation from 15mm dia to 76mm dia; inspection and measuring data; mig and tig welding; metal forming right; and powder coated finishing â&#x20AC;&#x201C; with the product delivered direct to you. Demonstrating our expertise in tube manipulation and fabrication for many diverse markets, MB also produces balcony railings, hand rails, ornate balustrade to customer

requirements. Attesting to our finesse, Fenix Carriages recently used an MB produced horse carriage while winning the 2009 British Open National Horse Championships. All-in-all, MB Components prides itself on a truly complete service, from design right through to finished product.

Published in association with: MB components (sw) ltd Tel: 01884 35562 Fax: 01884 34251 Email: brownmbc@aol.com www.mb-components.com

Factory of the month Morgan Motor Company

schedule five more SuperSports next week, or six to seven Classic cars.” There are differences in processes between the two models and also in location – the SuperSports have their own dedicated facility but the personnel are trained to build either or both and can move easily between the two lines. So how does the company balance the line? Morris indicates a large chart on the wall in his office. “This is the master planning chart although we have it on the IT system, too. It controls the different model line-ups, different colours and so on,” he explained. Different colours can be an issue in itself; there are thousands of different paint and trim options. “In September each year we go out to the dealer network to get their forward forecast, of numbers and product mix. That’s not to say it then never changes – it does, especially in today’s markets. We have increased production in the last three years and our planning has been fluid, to an extent – but the planning chart schedules the model mix and how many we are building each week.” The waiting list is currently six to nine months. “We see seasonal variation. In the last fortnight, it has been like turning a tap on,” he says. “January was a bit busier than usual and then the sun comes out and more and more orders come in.” The cars are currently painted after the body panels have been added and then move onto final finishing, with trim, instrument panels, carpets,

seating and everything else required for completion. There is a trend towards painting the panels separately and then meeting them up but Morgan is about evolution, and lean is a driving principle.

Continuous improvement “It is a never-ending journey,” Morris says. I am a believer in challenging the things we do. We have come a very long way in recent years and all those good things have come Morgan cars may look retro but there’s nothing oldfashioned about their performance, which has taken them to success in international and UK GT racing

Morgan electric Life Car chassis

MWS Wire Wheels are supplied as original equipment to the Morgan Motor Company International was originally established in 1927 as Motor Wheel Service and Repair Company of Shepherds Bush, London, has been privately owned by the same family since 1947. We have a firm commitment to supply a complete service to the industry world wide, including the manufacture and restoration of vintage, veteran and MWS classic wire wheels, available in fully polished, chrome plated and quality paint finishes.

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Our highly skilled craftsmen also specialise in the restoration of wheels for Ferrari, Maserati, Aston Martin and others fitted with aluminum rimmed wire wheels. A wide range of component parts, (hubs, rims, knock-on caps), a comprehensive range of tyres, tubes and accessories, (tools and cleaning kits), with our specialist fitting and balancing service, including the UniflateNitrogen tyre inflation system, completes MWS’s service to our customers.

More details, including the ‘Fitment Guide’ can be found at: www.mwsint.com

Published in association with: MWS Tel: +44 (0)1753 549360 Fax: +44 (0)1753 547170 Email: info@mwsint.com Web: www.mwsint.com

Factory of the month Morgan Motor Company

out of continuous improvement. The site may be prohibitive in how far we can ultimately go and it is a continual battle to make ourselves more efficient and effective. The low-hanging fruit has now been taken, the challenge is now to look at peripheral activities. Morgan has been an ISO 9001-accredited company since 2009. Each vehicle has a build book with it, which starts with the high-level BoM (bill of materials). It governs and drives stocking procedures and practices “Anything that goes down the line from the warehouse is added to the BoM, consumed and then ‘backflushed’ to say it has been consumed,” he says. “Lineside items come along to meet it. The build book ensures good quality control, covers the standard time required for each task – we have standard operating procedures – and as soon as the car goes through a certain point it is all backflushed. If, at any time, one of the operators is not happy with something on the car, he can raise it with the supervisor. It then goes back through root cause analysis, we raise

care points, identify them and pay attention.” At the back of the book is the PDI (pre-delivery inspection) sheet, which is copied to the dealer. The dealers themselves also identify any points they encounter and alert Morgan. It is another manifestation of the emphasis on quality, which also involves purchasing and the supply chain. “Purchasing can mean the difference between a good year and a dreadful year,” says Morris. This is because the company is small and does not have the leverage that larger OEMs can command. It can be the case that the company would have to take on more stock than it would normally want, in order to secure good prices. But every issue is being addressed. “We have three people at the core of purchasing and it is important to have them involved with our suppliers,” he continued. “We pull our suppliers in, make them aware of the BoM and are always looking for improvement – and we are getting across to them that there is more work for them here – we have just launched the new three-wheeler, for example. We will give them as consistent and solid schedule as they will get from anyone in the world. We have done supplier presentations and supplier forums and made clear that the people we invite to them are the people who we value as strategic, long-term partners.” Altogether, the Morgan approach is very much like Morgan cars. Underneath that traditional exterior is something modern, effective and efficient but still firmly attached to its roots and origins.

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Rock

steady

Mining gypsum rock for BG’s range of industry grade plasters and plasterboard

Until the recession hit the construction industry, British Gypsum had grown its business year-onyear since 2002, applying new business processes, driving out waste and embracing change. Now it is focused on the next phase in its efficiency mission – multi-site, fully integrated business planning to join-up better sales forecasting with marketing, supply, manufacturing and superaccurate delivery. Will Stirling talks to British Gypsum’s Steve Smith.

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Construction materials British Gypsum

Plaster

and plasterboard maker British Gypsum has been transformed since 2002. It has improved its manufacturing processes, taken staff through a company-wide culture change programme, and has hit new heights of production efficiency. Every year BG produces enough plasterboard to make a 1m wide path all the way to the moon and back – TWICE! (Or to London and back - every day). Each week BG makes enough plaster that, if stacked flat, would make a pile nine times the height of Everest. British Gypsum, owned for most of the 20th century by stock-listed British Plasterboard Ltd (BPB) and taken over by international construction materials group SaintGobain in 2005, has always been involved in high volume manufacturing and gypsum mining at four of its five UK factories; manufacturing the gypsum rock into a range of industry grade plasters and plasterboard (the sixth site is a standalone mine that makes product for the cement industry). Before 2002, the factories were operating at far from optimum efficiency and the opportunity to improve was high. The company began its transformation in this year. Following an unsuccessful takeover bid by Saint-Gobain in summer 2005, BPB accepted a revised bid and was bought by the group in December 2005. The changes made in the interim period are profound, says Operations

On a disaggregated level we’re going down into minute detail, on an aggregated level we’re trying to give them the same forecast as for the factories Steve Smith, Operations and Supply Chain Director

and Supply Chain Director Steve Smith. “Back then the UK factories were in the bottom half of the benchmarking league tables within Saint-Gobain Gyproc, but now plants like East Leake are considered the shining stars of the group.” The improvements at British Gypsum have been year-on-year, cross-departmental and far reaching. Steve Smith originally looked after the group operations and focused on increasing factory efficiency. This was a big task – in the early days, breakdowns, quality complaints and even accidents were thought of as inevitable, he says. “As of November, one of our proudest achievements is that we have achieved one full year with zero accidents across BG sites,” says Smith. “And we were recently recognised as a good employer for our teams’ work with the HSE [Health & Safety Executive] and the FOILE initiative.” Pre-2002 breakdowns were accepted as the day to day norm, he says, and most people had been rewarded as good fire-fighters, that is, just to get plant up and running again as soon as possible. Now it’s more about lengthening the time between two failures. “Maintenance is an investment; it is core to our business. How many accidents, quality failures, productivity, and delivery precision problems can be attributed to breakdowns and unplanned stops?”.

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Construction materials British Gypsum

Simple objective, complex delivery Maintenance is just one component of the complex story behind this new look manufacturing business. Smith crystallises British Gypsum’s Operations mission statement simply as this: “We have five factories and a big asset base; how do we manage the factories across BG to get the lowest delivered cost possible?” Smith and his team – which covers all manufacturing operations, supply chain, planning and the customer service team at the East Leake Head Office – are leading a multi-strand business improvement plan, coordinated by a customised version of Oliver Wight’s Integrated Business Management method, with the objective of joining-up the activities of five factories to better serve the real-time needs of the market with targeted delivery performance of 98% accuracy. British Gypsum’s vision

is simple in essence, but devilishly complex to achieve: to deliver the correct product to the customer inside 24-hours within the UK. An order placed before 4pm for a next day item – which is 85% of their stock keeping units – with British Gypsum guaranteed next day delivery anywhere in the UK, a promise that has been pledged for some time, and most of these are timed deliveries. British Gypsum sells about 800 SKUs (stock keeping units). While just 300 are manufactured in-house, some items are locally sourced, others from sister factories across Europe, China and the Middle East. Part of the IBM’s goals, says Smith, are to dovetail lead times of up to eight weeks for parts like screws from China with this next day delivery guarantee. Factory planning teams schedule production in a five day window. Central Planning plan the factories from five days to three months at a SKU level and three years at a family level. Capex is planned out to five to 10 years and mining and geological exploration out to a 25-year time frame. All this is synchronised with greatly improved sales forecasting, using Integrated Business Management. It is also dovetailed to an extraordinarily demanding delivery schedule which manages approximately 400 plus deliveries a day from British Gypsum’s five surface factories.

Factory planning and its integration with overall business strategy has been revolutionised by BG’s IBM approach

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St Regis The UK’s largest manufacturer and recycler of paper and strategic partner of British Gypsum

very year St Regis turns 1.3 million tonnes of waste paper into a range of high quality recycled papers making us, by far, the largest papermaker in the UK and one of the biggest recycling operations in Europe. All our products are 100% recycled and 100% recyclable. Our mission is to support UK manufacturing industry by supplying high quality, efficiently produced recycled papers. Underpinning our mission is our commitment to continuous investment in the latest technologies – increasing productivity, product quality and cost-efficiency. Recent investments of over £30M have helped establish Kemsley Mill in Kent as one of Europe’s leading sites for the

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manufacture of plasterboard liners with an annual production of up to 300,000 tonnes. Plasterboard liner is a technically demanding product that must perform well to ensure the finished plasterboard is perfectly flat and free of visual defects. A sophisticated pulping and fractionation process turns carefully graded waste paper into a high quality pulp.

Our sales teams provide a high level of personal service to our customers and our technical support staff are on hand to assist customers with any technical issues. St Regis has developed a close working relationship with British Gypsum to drive continuous improvement and strengthen the supply chain.

Published in association with: St Regis Paper Company Ltd Tel: 01795 518913 Email: hannah.williams@stregis.co.uk Web: www.stregis.co.uk

Construction materials British Gypsum

British Gypsum uses four haulage contractors and it now forecasts deliveries by post code at least three months in advance. Like sales, delivery forecasting is getting more scientific. “On a disaggregated level we’re going down into minute detail, on an aggregated level we’re trying to give them the same forecast as for the factories,” says Smith. “Targets for our hauliers are very hard, 99.5 per cent OTD (On Time Deliveries). That is higher than the national retailers.” As an overview, the following list summarises the most important processes the company is implementing to achieve its aims:

Integrated Business Management British Gypsum’s Integrated Business Management structure comprises five departmental reviews that are synchronised by the IBM method.

Product Review – led by the Marketing Director. It defines the strategic road map for British Gypsum’s brands, products and services as well as the introduction of new products and services. “The most critical aspect for us in BG relates to ‘insight’, i.e. understanding what it is the customer really wants so that we can then ensure we have those new products available in the market place for them. This is fed into the Demand Review as a key input,” Smith says.

one of our proudest achievements is that we have achieved one full year with zero accidents across BG sites Steve Smith, Operations and Supply Chain Director Demand Review – led by the Sales Director. This is about delivering the Strategic Marketing and Sales Plans on a tactical level. A key aspect of this is gathering a wide set of inputs to formalise the forecast assumptions. These assumptions together with statistical techniques are used to create the forecast. “We don’t expect the Sales team to get the forecast exactly right but we do expect them to get it right within set limits,” says Smith.

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“Currently some of our limits for plaster are +/-2 per cent, plasterboard +/-5 per cent. A key aspect of forecasting is getting the phasing correct. In our experience, variations to forecast are generally caused by us and not the customer e.g. rebate offers, sales incentives and commercial projects which produce responses different from our expectations. As we learn we get better at forecasting and better forecasting means fewer surprises!” he adds. Supply Review – led by the Supply Chain and Operations Director. This is about ensuring BG’s factories have the manufacturing capacity to meet demand forecasts and product launches or deletions. “We also plan the procurement of materials and external services,” says Steve Smith. “With an accurate sales forecast, the right amount of manufacturing capacity, inventory and transport can be made available to ensure we have the lowest cost (the sum of Total Product Cost, Inventory, Capex and Transport). As we are planning over a 36-month period, we

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have a much better view of Capex requirements over the long term. One of the most important activities is Network Planning for supply, this involves making sure that we have the lowest delivered cost to the customer, i.e. low Total Product Cost and Transport costs. This is driven by World Class Manufacturing and the 30*20*6 F Matrix.” This matrix derives the significant cost savings year-on-year. Integrated Reconciliation Review (IRR) – led by the Finance Director. This takes the outputs from the Product, Demand and Supply Reviews as well as any decision requests and ‘quality checks’ them before taking them to the Executive Managers. They have to present recommendations with costings and impacts and cannot present unresolved problems. If there are any conflicts between the reviews they either resolve them at the IRR or ask the Executive to decide if conflict still exists. The IRR also adds all of the financial calculations from the previous steps together to present the overall financial impact to the executive. Additionally, the IRR is responsible for managing cross-business improvement projects. Management Business Review – led by the Managing Director. The focus of the MBR is longer term strategic decisions, rather than what happened last month or short term decisions. This Executive meeting takes the decision requests, key information and unresolved conflicts from the IRR and makes decisions on those recommendations. The MBR also agrees the plans put forward by previous meetings.

Construction materials British Gypsum

Cost Reduction World Class Manufacturing - The process British Gypsum uses to drive out waste. Smith is rolling this out from manufacturing operations into the supply chain division. British Gypsum factories continue to hit significant savings year-on-year. “The WCM toolkit is being rolled out to all of BG within the next 18-months,” says Smith.

People and Leadership Project leadership - BG operates a maximum “2 and 5 rule” for taking on projects. Employees are capped on the number of projects they can lead and or be a part of. “This is about choosing what we do but more importantly what we do not do,” says Smith. “As managers it is our job to prioritise based on facts. To lead a project you have to be formally trained and it may be that you are leading a project in a different area or department.” Behaviours - Systems are great but without people who have the right skills,

Integrated Business Management Multi-site visibility for a several hundred million pound business How does a company this size achieve total business visibility to hit its performance targets? BG selected Oliver Wight’s Integrated Business Management (IBM) tool to manage this. IBM is most simply described as advanced or next-generation sales and operations planning (S&OP). The aim is to balance demand with supply capability. Unlike plain vanilla S&OP, IBM brings a more strategic perspective and the integration is what distinguishes it from the legacy Oliver Wight IBM method. The tool is multi-faceted, delivered in stages and the current path used is called Business Planning and Control, which Smith says is Step Two of BG’s 10-year journey to become a truly Class A company. “This Oliver Wight method is used to link new product development with sales, manufacturing, and supply chain over a 36-month rolling horizon,” he says.

BG is using its World Class Manufacturing methodology to drive out waste in its process, from manufacturing to supply chain operations

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Construction materials British Gypsum

With its IBM approach BG is on track to acheive its major strategic goal of synchronising production across its regional sites

knowledge and behaviour they are a waste of money. Smith says: “Systems in themselves solve nothing – you have to make sure the team understand how to use them. We have invested heavily in making sure we understand ourselves. We acquire knowledge on the subject matter and put in place our own knowledge transfer processes, and we only buy-in where we want to understand in a new area or subject. At the moment one of our Plant Logistics managers is putting together a knowledge package to make sure the planning teams really understand the principle of “time fences” in detail. He will deliver this to all of the teams around British Gypsum.”

IT strategy SAP - IT systems are being upgraded and synchronised across several divisions. British Gypsum implemented SAP across the group in 2007 and is currently implementing SAP Advanced Planning and Optimisation (APO) (Demand Management and Strategic Network Planning). On planned maintenance, the company is implementing SAP Computer Maintenance Management System (CMMS), where it currently uses Inform EAM, and is also implementing SAP WMS. BG also has a rolling programme of PLC and WINCC upgrades across all mines and surface factories. “We are also implementing airport screen technology and EPOD to improve our customer satisfaction further,” says Smith.

Summary – Priorities define business planning So much is happening at British Gypsum in all departments that it is difficult to summarise the new business activities succinctly. The World Class Manufacturing Process (see TM March 2009, p29) is another story and the roll-out of WCM from operations to the whole enterprise will be the subject of a forthcoming feature. For now, IBM and the various business process tools being deployed at BG are on track to achieve the company’s top goal; to synchronise production at five regional sites with a more accurate sales forecast plan to consistently hit 98% on time delivery. Steve Smith also summarises the top three priorities for the British Gypsum Supply Organisation: Safety, Product quality and Delivery precision. Following these is the ability to deliver British Gypsum’s new product introduction programme. To this end, British Gypsum is investing heavily in its people, the company’s core asset, says Smith. “The lead time for the people asset is the longest. We are investing heavily in apprentices, generally we have about 35 in BG Operations at any one time – and are also investing in business processes. For example, group-wide, British Gypsum is spending in excess of £1m this year on IT systems, from SAP Advanced Planning and Optimisation, WMS and SAP PM to its new airport screen delivery scheduling technology. Over the last eight years, direct labour at the company has become very lean and the manufacturing processes are about as automated as they can be to achieve target productivity. The next chapter in British Gypsum’s book will be for this rock steady business to harness IBM, the Supply Review’s work and these investments to maintain ongoing cost reduction in 2011 and uncover even greater efficiencies.

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Food and drink Askeys

Sprinkle, ice cream star

Ice cream accompaniments manufacturer Askeys has a rich history that dates back over 100 years. A takeover in the mid-noughties heralded a change of culture and a raft of much needed investment; the company has gone from strength to strength since. Askeys has had to work hard to get where it is today, but it’s certainly now benefiting form the Silver Spoon in its mouth.

Britain

sure does like its ice cream. In peak season, Askeys makes one million cones per day at its factory in Aylesbury. It also produces wafers, sprinkles, biscuit baskets, flavoured crumbs and sauces under its brand. Today, the business is positively thriving, with a turnover that has increased from £6.5m to £8.5m in the last three years. It has an 80% share of the UK retail market for ice cream peripherals and a significant share of the market for restaurants, cafés and ice cream vans. But things haven’t always been quite so sweet for Askeys in its 100+ year history. The company was founded in 1910 when Italian immigrant Laurens Tedeschi set up his family business in London and, with it, introduced the ice cream cone to the UK for the very first time. Soon after arriving, the family changed its name to Askeys and that’s how the brand began. The business was moved to Scotland before settling at its current manufacturing base in Aylesbury, Buckinghamshire in 1965 when it was acquired by Kellogg’s. It stayed under the famed cereal maker’s ownership until 1995 when it was

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Pinnacle Consulting Pinnacle’s partnership with Askeys started in early 2010 when Ashley Haywood Silverspoon’s Factory Standards Manager introduced Pinnacle to Jo Blood - Site Technical Manager. After a thorough site survey and the necessary paperwork the operational plans were put in place. Pinnacle’s leading project manager, Larissa Demidova took charge of the work and stamped her unique mark on yet another site with her strong work ethic (named the “Larissa experience” as she is known countrywide for her dedication to her work). Since Pinnacle’s initial visit, they have returned to maintain a high of level cleaning on a regular basis. Pinnacles partnership with Askeys works because all of the Pinnacle team take pride in their work and take ownership of their important role within the factory. Pinnacle Contracting has a wealth of experience in a wide range of specialist cleaning situations in the food and beverage processing industry. With the back-up of their own technical and health & safety experts, they are confident in tackling any cleaning job, no matter how large or small. Training All staff receive the highest standard of training which includes confined space, high level access equipment, risk assessment, pressure washer equipment, confined space entry, mainsfield mines pit rescue, food hygiene and COSHH training. Method & Risk Statements Specific method & risk statements are provided where appropriate, guided by their experts. Reducing any form of risk will help to ensure the job gets done safely and on time. Equipment Having the best tools for the job is not only essential but can reduce cleaning times and make the job safer to accomplish. Production downtime for cleaning and maintenance increases costs. Their equipment suppliers can design bespoke and innovative cleaning equipment at short notice. This allows Pinnacle to complete the job efficiently to high standards. Support Pinnacle can project manage the whole cleaning job. They ensure their cleaning

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teams comply with site regulations and work in conjunction with your staff. Pinnacle contracting understands the demands of your business and will design cleaning programs based around your audit and maintenance schedules. Specialist Hygiene cleaning To maintain 100% audit compliance operations within your location, Pinnacle can carry out pre audit deep cleans and have already assisted many businesses achieve favourable results with EFSIS/ BRC and Supermarket audits.

guidelines, but also that our technicians will provide a first class job. Fire and flood damage Careful planning ensures this work is safely and efficiently carried out. Pinnacle provides the necessary back-up where necessary, helping to ensure a safe and professional approach to your problem and a quick return to business.

Silo cleaning A thorough cleaning service for flour, sugar, dry and wet food storage silos ensures all residues are completely removed. PROVEN SPECIALIST CLEANERS Industrial Deep Cleaning We offer this service to order to conform to Health and Hygiene Regulations. Professional cleaning and disinfection includes de-greasing of all surfaces, filters, ovens, fryers etc. We can also clean and degrease ventilation and extraction systems in order to comply with environmental and fire insurance specifications. High level and Evaporator cleaning Health and Safety concerns are paramount in this type of work, our customers not only have the peace of mind that Pinnacle Cleaning meets all current

WORKING WITH WELL KNOWN MAJOR BRANDED FOOD BUSINESSES THROUGHOUT THE UK CASE STUDIES AND REFERRALS AVAILABLE ON REQUEST FULL VERIFICATION REPORT WITH BEFORE AND AFTER PICTURES Published in association with: Pinnacle Contracting Co. Ltd Thurston Road, Beyton, Suffolk, IP30 9AE

Tel: 01359 270467 Mobile: 07966 292010 Email: bob.wyer@tiscali.co.uk Web: www.pinnacle-contracting.co.uk

Food and drink Askeys

taken over as part of a management buyout. Though this takeover seemingly heralded a fresh start for the firm after a period of underinvestment, it wasn’t long before cracks began to appear. “Short term profit was really the name of the game at that stage and not a lot else,” says Abdullah Khan, site manager, who joined the company three years ago. “The new owners weren’t really in a position to put the necessary investment in for long term sustainable growth.” After more than a decade treading water, in 2004 the business was bought out again – this time by The Silver Spoon Company, the retail trading arm of British Sugar. It was with this acquisition, Khan says, that the company was finally in a position to begin to realise its potential. The Silver Spoon culture is based around five values: customer focussed; open and accountable; one team; creative solutions; and ‘can do’ attitude. “The introduction of this culture has completely revolutionised the way we work at Askeys and it’s been the cornerstone of our recent success,” says Khan. “Now we’ve got owners who have the supporting infrastructure and who are ready to make the investments we need to grow.”

The cream of the crop The Aylesbury factory has certainly taken to the task with aplomb. Last year it won an annual award given to the team or site across the Silver Spoon group which best displays its values. And its efforts haven’t gone unnoticed outside of the company either. Also last year, it was given the Judges’ Special Award at the Food Manufacture Excellence Awards for its innovation in redeveloping a product line. The company had foreseen that its coloured ice cream cones – a fringe product – would have to be redeveloped as they contained one of the Southampton Six – a group of food colourings which research suggested could have adverse affects on hyperactivity in children. The business couldn’t find a substitute colouring with the same vibrancy, so, it took the bold step instead of relaunching the product completely as a chocolate cone with no artificial colours. The move was a roaring success and the new product became one of Askeys’ biggest sellers last year.

Khan accredits the marketing and technical departments as having played an integral part in this success. “One thing we’ve been able to pick up from Silver Spoon is their very mature understanding of customer insights in the home baking arena,” he says. “Our marketing department recognised that there’s a growing trend in people wanting to provide wholesome foods for their children and taking pride in preparing foods themselves.” He says there is also a upward movement in people wanting to spend time having fun in the kitchen with their kids, because of both austerity measures and the fact that people can control what goes into their children’s food. This has inspired innovation in not just ice cream cone offerings but also in the area of cake decorations. Overall, the business launched 12 new SKUs, under the Cakecraft brand, in 12 months with a total investment of £120,000. “This has been a massive challenge for us,” says Khan, “but with the support of our parent company it’s been a massive success. The cake decoration market is growing but we are far outperforming that growth.”

Khan estimates that less than one in ten consumers who receive defective goods will complain – the silent majority will simply stop buying the product Packed with new ideas The other main area of innovation Askeys has concentrated on is packaging design. The company has reduced its packaging by 15% over the last two years by looking at different kinds of materials and density. It has also now committed to using 100% recycled cardboard where possible. “We’re trying to do everything we can in terms of the environmental impact of our packaging,” says Khan. “This is even more important, given that the shape of our products means we have to transport a lot of air.” As you’d expect, Askeys has had to pay breakages a fair bit of attention when it comes to packaging. Last year, it launched a project on its highest breakage item – waffle cones – of which it makes 39,000 packs per week. As a result of the programme, complaints-per-million-units (CPMU) have been reduced by 63% in a year. Work on impact testing and breakage testing was completed in Askeys’ own laboratories and the business came up with a number of variables in shape and size – both of the thermoform tray which the cones sit in and the outer cardboard boxing. It transit-tested the different designs before choosing the one with the best results. It has also added protective corner posts to the pallets it uses for transportation. Says Khan: “We went through the supply chain to ascertain where the breakages were occurring, sampling at our own warehouse and at each stage of the distribution process. What was clear to us was it wasn’t just one place – that’s why we had to redesign the packaging. It was a very robust exercise.”

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MP Recruitment has worked with Askeys for over a year now and was brought in to gain improvements to the provision of temporary labour. We commenced by using our Client Needs Analysis process to assess fully the problems, and to understand what Askeys wanted from a labour provider. The assessment process identified a number of issues that labour provision was causing; these issues ranged from the basics of supplying the right people, to ensuring there were appropriate levels of trained labour to meet the needs of order flexibility. The introduction of daily team member control logs and the provision of an on-site supervisor has seen vast improvements. Additionally, the establishment of a labour pool as given continuity of supply

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and a reduction in labour turnover thus giving benefits such as improved team member competency and less re-training. We have also worked jointly to improve audit scores from Askeys clients and the likes of SEDEX/BRC. The introduction of a focused number of KPIâ&#x20AC;&#x2122;s allow both Askeys and ourselves to monitor daily/ weekly performance and to look for lean improvements in operating processes; something that we think is key and that very few other labour providers offer. Our company culture is one of leading not following. We are a highly ethical company whose workers are all employees of the business thus allowing them greater benefits than the â&#x20AC;&#x153;Normal Agency Workerâ&#x20AC;?; this combined with the above leaves us pleased to be associated with a forward thinking company like Askeys.

Want to find out more? Call us on 0870 2427528 or email our dedicated development team on sales@pmprecruitment.co.uk

Published in association with: PMP RECRUITMENT Web: www.pmprecruitment.co.uk

Food and drink Askeys

The programme means the company has incurred significant costs, initially, because of the time spent on the effort and the recalibration of the plant and processes. But the cost benefits lay in repeat business. Khan estimates that less than one in ten consumers who receive defective goods will complain – the silent majority will simply stop buying the product. This year the company has seen strong growth in waffle cones and Khan says the breakages programme must be apportioned at least some of the credit.

The art of engagement Breakages have also been a concern at the production level and this provides a perfect example of how Askeys’ employees have embraced the company’s improvement culture. Recently, an employee on the hand packaging and inspection line noticed that an oven producing 180 cones per minute was breaking cones in a specific area at regular intervals, to a degree of around one per cent. He worked

with an engineer to fabricate a new part for the conveyor on the oven which guided the cones around the area they were snagging and breaking. “It was a sizable amount of damage for us and this employee took it upon himself to not only perform the root cause analysis but also design and implement the fix, after getting the go ahead from managers,” says Khan. “This signifies the change in culture that we’ve seen on site in the three years that I’ve been here. The employees are now proactively looking to feed into and improve processes and the company is ready to listen to a good idea.”

Askeys at a glance Formed

1910

Based

Aylesbury, Buckinghamshire

Ownership

The Silver Spoon Company

Key products

Ice cream accompaniments – cones, sauces, sprinkles etc

Markets

Mostly UK, some exports to Middle East

Key stat

In peak season, the factory produces one million ice cream cones per day

Askeys’ employees now ‘pull’ imporvement techniques into their every-day work – sometimes literally!

The employees are now proactively looking to feed into and improve processes and the company is ready to listen to a good idea Abdullah Khan, Site Manager

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Food and drink Askeys

The senior managers have implemented an initiative where each must nominate an employee for demonstrating strong use of the company’s values at a weekly meeting. The employee described above made a perfect candidate. Out of the nominations, two to three are selected to receive a thank you card from Khan and a voucher and all go into an annual draw for bigger prizes like a large flat screen TV. “This scheme is a good indicator of how far we’ve come,” says Khan. “Initially the mangers were struggling to come up with nominations. Now, I’m constantly fighting to ration them to one. People used to wait for instructions and they weren’t encouraged to think. In the past three years that has changed markedly. People are engaged a lot more and they are ready to challenge. And they are ready to offer their time and solutions.” To instil the culture of productivity efficiency throughout the business, the company brought in an external consultancy to give the employees the tools to take control of improvement in their own work areas. One improvement that came out immediately was the need for short interval performance monitoring and reporting. “Before, we were very good at reviewing the last day’s performance,” says Khan. “But that was too late; we couldn’t do anything about it then. Unless you’re capturing information and the people on the line are aware of how well they are doing you’ll never change performance.” When regular monitoring began, an employee noticed that the tins for the Café Curls crispy rolled wafers product we’re being over filled by five per cent every time. As soon as it was registered, the problem was rectified immediately. Through this productivity improvement programme, labour costs were reduced by 20% in two years. This year, productivity is up by eight per cent and if this level is sustained the company will hit its annual target, meaning each and every member of staff will receive a cash bonus of £450.

The Askeys family Profit and productivity are one thing, but people, says Khan, are Askeys’ primary concern. It’s fitting then that Silver Spoon has been investing heavily

in health and safety in recent years. Around £250,000 of investment has been put up so far for things, like replacing the antiquated guarding around some of the machines. There has also been a big emphasis on behavioural safety in an effort to continually drive down the chances of an accident. The company is in the middle of a project now to move all of its machinery and appliances over from 240 volts to 110 volts. “240 volts could kill you; 110 volts will only shock you,” says Khan. Major accidents have come down markedly over the last few years – the site has now gone just shy of 500 days without a major accident. It celebrated at 365 days by giving everybody a day off. But recorded minor accidents and near misses have gone up lots. This isn’t because the employees have become clumsy all of a sudden, it’s because Askeys has implemented a no-blame culture for reporting any accident at all, however small, or, indeed, a near miss. “If we know about things then we can do something about them,” says Khan. “We even promote small paper cuts and grazes as being reported as small

Unless you’re capturing information and the people on the line are aware of how well they are doing you’ll never change performance Abdullah Khan, Site Manager

accidents just so we can analyse the root causes. Now everyone who handles cardboard wears gloves because we had a record of the problem.” He adds: “People don’t come to work to get hurt. You can make money, you can lose money, but when you injure somebody its unforgivable. We will not compromise the safety of our Askeys family.” Recently, Askeys was awarded the Royal Society for the Prevention of Accidents ‘Order of Distinction’, achieved by earning 15 years of gold awards consecutively. So far this year, only 79 companies in the UK have been given the accolade. Fittingly, given the nature of its product, Askeys loves to throw a good shindig whenever it gets a chance. To celebrate its centenary last year, the company held a “huge” fun day for all of its employees and their families with activities, games, a BBQ, and a childrens’ dancing competition. Even the town’s mayor got in on the act. This focus on employee engagement, reward and well being has led to absence rate of less than two per cent, against an industry average of 2.5 – 3%, according to figures from EEF, the manufacturers’ organisation. In terms of employee turnover, “the only people I’ve ever known to leave are those that retire or leave for personal reasons,” says Khan. “It’s a nice place to work. I’ve always been a great believer in engagement activities. Our people come to work to do a good job and we look after them.” That’s cause for celebration in anyone’s book. Make mine a 99 with a flake, nuts, strawberry sprinkles and chocolate sauce please!

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GLORIOUS! recipe for growth Award-winning soup and sauces manufacturer TSC Foods boasts a strong recipe for success in a competitive and complex market. The North Lincolnshire -based food manufacturer was founded in 1991 by foodie entrepreneurs Chris Copestake and Paul Smith who had a bright idea for turning a traditional batch process into a continuous process for chilled and frozen soup and sauce production.

TSC Foods at a glance Company TSC Foods, Scunthorpe Staff

350 employees inc 40 temporary agency staff

Turnover

£40 million (2010/11)

Products

Chilled and frozen soups and sauces, risottos, dips, etc, including GLORIOUS! soups and sauces

Output

50% Retail, 50% Food Services; 25,000 tonnes a year, 1000 products a year

History

Founded 1991

Owner

KCP and management buy-out

Market

Predominantly UK, low export levels

11% of the UK chilled soup & sauce retail market; the largest manufacturer of soup & sauce to the food service sector

Niche

Supplies retail and food services

Stats

Retail - 60 SKUs Food Services - 700 SKUs

KPIs

OEE: 35%-40%

OTIF

99% on-time in-full delivery

Branding GLORIOUS!

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The

company has changed hands a number of times since its foundation. It was recently acquired in a £24 million management buy-out and is now owned by Key Capital Partners. The launch of the GLORIOUS! brand of chilled soups and sauces in 2008 has proved a real success within the highly competitive retail sector and the company has won three Grocer Gold Brand Excellence Awards and two Quality Food ‘Best Soup’ Awards in the past three years. A focus on manufacturing excellence and customer service has seen total business turnover climb from £35 million to £40 million in the past year, and is on track for £45 million this year.

Secret ingredients “TSC Foods is at the cutting edge of chilled and frozen food development,” says supply chain director Chris Taylor. Consumer taste is a constantly moving target and the company introduces 1,000 new products a year – three a day on average. But it’s not just a matter of throwing in a few spices or different vegetables for variety. The sixstrong Process Development team has to ensure that the chefs’ tasty concepts are also produced consistently during manufacturing scale-up. “We’ve increased our investment in the Process Team to ensure products can go efficiently from the kitchen to the plant, while ironing out any creases in process. There is a lot of complexity involved in introducing so many products. Our team ensures that all of the products we launch are ones we can make,” says Taylor. Variety is certainly the spice of life, given the likes of Diablo Sundried Tomato and Chilli; Spanish Tomato and Chorizo; and New York Alfredo Sauce. TSC Foods has also increased its

Food and drink TSC Foods

Complexity is one of the barriers to entry to this market Chris Taylor, Supply Chain Director, TSC Foods

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portfolio with a range of risottos, dips, dressings, gravies, marinades and an innovative new range of sous vide and pulled meat products. TSC Foods serves both sides of the market, manufacturing chilled and frozen soups and sauces both for retailers and the food service sector including restaurants, hotels and pub chains. TSC Foods has invested in specialist technology to produce sauces in large scale with a variety of packaging options including pouches, dip pots, tubs and buckets, to one tonne pallecons. The company also produces large volumes of chilled products such as pasta, meat and fish sauces, soups, gravies and dips in a variety of shelfready packaging formats for retailers.

Handling complexity There are three main business units within the North Lincolnshire site. The Flexibles Unit delivers products into the food service and food manufacturing market. The Pots Unit produces shelfready products for the retail market. The Deli Unit delivers innovative cold-filled

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products including sauces, dressings, dips, marinades, sandwich fillings, couscous, salads and vegetables. Planning and processing is complex, involving 60 SKUs on the retail side and about 700 SKUs on the food service side to cater for regular menu changes and reviews. “Products typically churn every six months,” says Taylor. OEE runs at 35-40 per cent as a lot of downtime is associated with cleaning. In any given week there will be over 200 changeovers. “Complexity is one of the barriers to entry into this market,” says Taylor.

Continuous improvement TSC Foods is working closely with food industry specialist Applied Acumen on a programme of continuous lean improvement. “Our main focus has been around labour planning, driving OEE through an increased level of planning activity,” says Taylor. “We are trying to maintain a better fixed plan. Historically there was a lot of movement in plan, and we are now trying to lock-down the next 24 - 48 hours as a firm schedule.” The company operates a CDC data capture system to analyse downtime in support of this initiative. Taylor adds: “We now work to a fixed 48-hour plan, from raw materials through to the finished goods warehouse. The plan is to achieve an improved labour cost per tonne by planning the labour in more detail for the next two days and flexing the agency staff to suit.” One of the company’s most valuable recent initiatives has come from focus on first line management. “The

Food and drink TSC Foods

supervisors are critical to ensure that everybody is doing what they should be doing, in terms of adherence to procedures. So we are focussed on a retraining programme for all first line managers, and have introduced a higher level of technical auditing, working in partnership with the Kingsway Group,” remarks Taylor. Health and Safety is crucial, and TSC Foods recently introduced a calendar approach to address a different topic each month, in accordance with a raft of historical data on where they need to focus, such as chemical handling and forklift awareness. “Auditing and supervisory training have proven vital to ensure that people adhere to set procedure and thus prevent errors,” Taylor comments.

Flavours of the world TSC Foods is a very ‘foodie’ business. Innovation is paramount and the company likes to set trends as well as follow them. “We like to delight our customers, introducing up to three products a day is not untypical,” comments Taylor. The company markets ‘Flavours of the World’ in store as well as exhibiting at major consumer food shows like ‘Taste of London’.

Production process The food production process is conventional and closely monitored to maintain high quality and efficiency. Raw material warehousing handles ambient, frozen and raw materials, including vegetables, meats, dairy products, spices and alcohols. The preparation department consists of a batching process with weigh scales, ready for cooking. Cooking is carried out using 15 large 0.5-1.5 tonne cooking vessels. Last summer, £1.5 million was invested in two new BCH vessels, a CWM filler and a Starfrost spiral chiller to increase retail capacity, as this sector has been growing at about 15 per cent a year. Once the product is cooked, it is transferred to the fillers, which either feed into plastic pots for retail, film packaging for food service, or bulk filling into one tonne pallecons, buckets or pails for further processing by other food manufacturers. Chilling is carried out either in brine cooling tanks for the film pouches or by spiral chillers for retail pots. There

is a fully automated cleaning-in-process (CIP) for pre-rinse, caustic rinse and final rinse between every product. All products are manufactured to the high standards required for certification by the British Consortium Global Standards for Food. The company prides itself on using no preservatives or modified starches in the product.

Logistics Retail delivery is carried out by Northern Food Transport or by local haulage for the food service sector. “We continue to work closely with our customers to optimise efficiencies throughout the supply chain,” says Taylor.

Sustainability TSC Foods has made concerted efforts to move away from landfill. “We are now recycling finished goods waste. Contractors separate plastic from the product. Product is rendered and used for fertiliser and plastic is recycled. Furthermore, any raw material plastic is bailed for recycling.” Wastage of raw materials has been halved over the last two years. However, finished goods are more of a challenge as many products de-list each month.TSC has also taken measures to improve efficiency of the blast freezing units with better loading.

Recession proof Taylor reckons that TSC Foods has managed to weather the recession well because it covers two distinct markets – retail and food service. “Consequently, when we saw a downturn in people going to pubs and restaurants, there was an upturn in retail demand. Nevertheless, we have managed growth in both sectors.” Looking to the future, Taylor admits there is increasing pressure on margins driven by the rising cost of raw materials and energy. “However, as demand for the GLORIOUS! brand rises we have more control on production complexity.” With an aggressive growth plan of 15 per cent per annum, the future certainly looks GLORIOUS!

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AJP Services

At your With a strong background as a manufacturing factory manager Andy Groom knows firsthand the importance of plant maintenance to ensure a sustainable work environment. He talks to Tim Brown about the changing skills landscape and the growing trend for companies to outsource their maintenance requirements.

lot of peripheral jobs exist within a factory that relate to the maintenance of the fabric of the dwelling. According to Groom, MD of AJP Services, in today’s environment many companies are relying on outside help to ensure the completion of those jobs. He says that although companies might have previously completed maintenance internally, more and more are now outsourcing these roles. “Once upon a time manufacturers used to retain those skills in-house but now factory engineers are as much accounts and finance based as they are skills based. This has resulted in the requirement for outside help.” “In addition to this,” according to Groom, “more and more managers are looking for a one-stop-shop to provide services which years ago might have been supplied by several different companies.” His company is one such operation offering industrial and commercial businesses assistance with projects including roofing, gutters, flooring, utility work as well as the relocation of offices or production lines. AJP Services also provide a holistic project management and management services function which includes aspects such as health and safety and CDM. The AJP Services workforce is made up of a core group of engineers as well as a select group of contractor partners who are used when requiring specific skills. “While there are some roles where maintenance experience will suffice,” says Groom, “other jobs such as welding or roofing require specific training and we offer that speciality.” An example of an ongoing project has involved a facility in which the operation has changed from a manufacturing company to a white goods and packaging company. “In that instance,” says Groom, “we removed the old production lines, installed the new machinery and altered the services accordingly. In addition we also installed the loading docks to improve the logistical capability of the company. That is typical of the kind of work we do where we change the type of usage of a building and we are able to assist the outgoing and incoming owner and tenants.” AJP provide a wide variety of disciplines from emergency call outs for repairs, to the planned replacement and

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AJP Services thrives on providing the services manufacturers are now increasingly choosing to outsource

improvement of a range of items covering utility supply to office refurbishment. The full range of services AJP can offer cover disciplines from turnkey projects and project management through to all disciplines of factory maintenance - heating, electrical, mechanical, construction, groundwork and fabrication. Flexibility, quality and price encapsulate the AJP offering as a fast response company which acts as a problem solver and solutions provider. “We are used to getting a call at short notice to come in and provide a quote and then execute the project,” says Andy. “A lot of our customers are people that need a solution very quickly. As a result we have consistent and ongoing working relationships with several well established customers that are only too happy to verify the highquality of the work we do.” For more information or to see if AJP Services can help you contact Andy Groom on 01536 738018 or via email ajpservices2@aol.com.

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