The Manufacturer - November 2009 Issue

12/11/2009

www.themanufacturer.com November 2009 Vol 12 Issue10

The Tower Hotel, London

THE SHORTLIST Once again the quality and quantity of entries to The Manufacturer of the Year Awards has been outstanding. Quite rightly UK manufacturers are proud to promote their successes and demonstrate that the industry has a resilient and vibrant future, despite the current challenging climate.

Our judges have worked very hard to ensure the companies which have been shortlisted truly reflect world class excellence and best practice standards, meeting the criteria set for each respective award precisely.

The judges complimented the overall field as a whole, remarking that despite the pressures companies have faced this year, the standard of entries has been remarkable.

We would like to thank everybody that entered this year and are delighted to announce that the following companies have been short listed:

Leadership and Strategy Drallim Industries Inspirepac Kerrygold Foods Pentagon Chemicals Seven Seas Design and Innovation Advanced Recycling Systems Alumet Systems Blueberry Foods e2v technologies Glen Dimplex Home Appliances Hozelock Nazeing Glassworks World Class Manufacturing e2v technologies Elekta Howard Hunt Group Sheffield Forgemasters International People, Skills and Productivity Alumet Systems Chesapeake Branded Packaging C-MAC MicroTechnology Drallim Industries Ginsters Hozelock

Supply Chain and Logistics e2v technologies Hozelock Pentagon Chemicals

The winners will be unveiled at The Manufacturer of the Year Awards ceremony at London’s Tower Hill Hotel on November 12th.

Book your table now!

Contact David Alstin on 01603 671307 or email d.alstin@sayonemedia.com

A must-know guide to environmental legislation

Sustainable Manufacturing Avon Metals Boss Design Kerrygold Foods Lush Manufacturing McCormick UK Paul Fabrications Pentagon Chemicals SME Manufacturer of the year Alumet Systems Avon Metals Drallim Industries Hawkshead Relish Company Hi-Technology Group Pentagon Chemicals Automotive Michelin Tyres Morgan Motor Company

Special report

Aerospace and Defence Alumet Systems Thales Training & Simulation

m at er i al s h an d l i ng f o r S u c c es s

Handling materials becomes a business-critical science

Food and Beverage Cranswick Country Foods Ginsters Hawkshead Relish Company Linpac Packaging Pharmaceutical and Medical Devices Catalent Pharma Solutions Seven Seas Export Manufacturer of the Year Boss Design Sheffield Forgemasters International

Design and innovation

How a design makeover increased one company’s sales by 54%

People and skills

ACAS on dispute management

www.themanufacturer.com November 2009 Vol 12 Issue 10

IT in Manufacturing Drallim Industries Flambeau Europlast Hansatech EMS Hozelock Pentagon Chemicals Renthal Witwood Food Products

Wastewatchers

Operations and Maintenance e2v technologies Ginsters Linpac Packaging Linpac Storage Systems

Interview Hugh Jones

The Carbon Trust

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Editor’s comment

Good vibrations In the same month as the US economy nosed out of recession, according to figures by the US Bureau of Economic Analysis, the UK remains the sick man of Europe. At least that was the consensus of the BBC’s Question Time panel on October 29 (the one after the Nick Griffin circus).

But there are real signs that things are improving for business. Factory output in the UK is at its highest level for two years, according to the CIPS/Markit UK Manufacturing survey of purchasing managers that rose to 53.7%, above the 50 no-change mark.

Accountancy firm BDO’s latest research says forward-looking confidence levels in manufacturing jumped in the third quarter, where 49.5% of respondents in Q3 were confident about the outlook for their business in the next six months, up on 37.3% who were confident in Q2. And the CBI’s Industrial Trends Survey says the decline in UK manufacturing output has eased considerably in the last quarter, with sentiment improving and modest growth expected in the three months ahead. One company which has flaunted recession and posted stellar growth is JS Humidifiers, whose stripdown-and-rebuild of its design, branding and manufacturing processes with help from Designing Demand is covered on page 30.

Designing Demand, the Design Council-administered programme to help business raise profits by making strategic design decisions, was given extra zip in New Challenges, New Opportunities, the Government’s Manufacturing Strategy which celebrated its first birthday in October. The Department for Business, Innovation and Skills marked the event with the official launch of Manufacturing Insight. This industry-led, government-backed initiative is tasked with improving the perception of manufacturing as a career choice, and its director outlined Insight’s strategy covering its main activities at the launch (see News page 4). In addition, the Government, with the two Midlands regional development agencies, has approved £40m to finance the Manufacturing Technology Centre in Ansty Park near Coventry, a world class centre for R&D, training and demonstration. Both elements of the Strategy arrive more than a year after the document was published, but the manufacturing cognoscenti have high hopes for both. Insight in particular has a big challenge, to explain the modern definition of manufacturing to Britain’s youth.

Cover image:The WEEEman, now installed at the Eden Project. Designed by and courtesy of Paul Bonomini

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The Manufacturer of the Year Awards and the Manufacturer Directors’ Conference take place this week. Our panel of judges, selected from industry, academia-linked to industry and government, are profiled in full on www.themanufacturer.com. I realy hope to see you at both.

Will Stirling, The Manufacturer

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1

News and features 04 News

Manufacturing news

11 Manufacturing appointments On the move

Find out who’s heading where in manufacturing

13 Manufacturing strategy

A manufacturing strategy needs Insight

Business minister Ian Lucas MP outlines the plan for Manufacturing Insight and the new Manufacturing Technology Centre in Coventry

15 Economics

Copenhagen – the competitiveness issue

EEF’s Steve Radley reveals planning for the future can now occur with more confidence

17 Lead story

Greener pastures: environmental law

TM investigates the torrent of green legislation which is redesigning the landscape of UK manufacturing

24 Interview

Not mission impossible

Director of solutions at Carbon Trust, Hugh Jones, on climate change and helping manufacturers become more productive and profitable

28 Special feature Mitsubishi All on Board

TM meets Mitsubishi’s John Quickenden to discuss empowering businesses through access to data

30 Design and innovation Better by design

Redesigning products and corporate branding can have a profound effect on a business – the J S Humidifier case study

34 World class manufacturing

Keeping a workforce committed to lean – part 2

Professor Peter Hines continues his exploration of how multi-site organisations can develop a durable lean approach

38 Special feature Royal Bank of Scotland

There are more ways to fund manufacturing than an overdraft RBS’s Peter Brotherton explains the available options for financing manufacturing

People, skills and productivity 40 Recession brings dispute management up the agenda TM discovers that recessions provide an optimum breeding ground for employee disputes

43 Employee of the month Paul Gorell of ABB

44 Inside Toyota

TM reports from series of seminars on the Japanese powerhouse’s world famous efficiency methodology, TPS

2

Contents IT in manufacturing

Coba Plastics 49

A guide to advanced planning and scheduling software

Synchronising your assets 55

The challenges of human planning and scheduling

IT news wrap 57

Keeping you up-to-date with what’s new in IT

Supply chain and logistics 68

Unlocking procurement savings through redesign to cost K Consulting presents a way to unlock cash

Opperations and maintenance 70 Out with the old, in with the new

Carbon Trust’s Big Business Refit offers businesses the opportunity to update and upgrade equipment without additional cost

Special feature Isle of man

Banking on manufacturing 74

The Isle of Man punches above its weight in manufacturing, especially in hi-tech

Star cluster 76

TM meets Adrian Moore from the Isle of Man Aerospace Cluster

78

m at eria l s h an dl i ng f o r Success

With product lifecycles shortening and worldwide competition increasing, success depends on effective material handling and logistics solutions to deliver the right product to the right market at the right time. Colin Chinery reports.

Manufacturinginaction Imperial Machine Company – 92

Catering equipment RGE – Injection moulding 96

Solvent Resource Management – 99

Organic recycling Ultraframe – Conservatories 104 Precision Disc Castings – Automotive 108

3

Newsinbrief Government’s Export Credit Guarantee Department (ECGD) launched a letter of credit guarantee scheme to assist UK exporters by boosting the availability of shortterm export finance. The EGCD will validate the letters to UK banks in order to give them the confidence to provide the company that has been served it short-term export finance.

The government agency will share up to 90% of the risk on individual letters of credit.

Business innovation in the UK has received a boost with the Government-backed Technology Strategy Board (TSB) announcing an investment of £82.5m in the development of innovative new technologies.

The announcement took place at the TSB’s annual showcase event, Innovate09.

Between now and spring 2010, businesses across the UK are invited to enter six competitions for the government funding in the following areas: regenerative medicine, transport and logistics, agriculture and food, infectious diseases and low carbon housing. www.innovateuk.org/

Manufacturing image makeover The director of Manufacturing Insight, the new organisation set up to improve the perception of manufacturing, has set out its strategy for providing young people with a better understanding of the sector.

Nick Hussey spelled out the new industry-led, governmentbacked programme’s key strategy at an event marking the one year anniversary of government’s Manufacturing Strategy: New Challenges, New Opportunities in London yesterday.

The strategy covers four target areas: to increase positive press coverage of manufacturing; to help simplify the number of government initiatives

for manufacturing; to help communicate the wide range of career paths within the sector, and, perhaps most importantly, to address the problem that young people don’t fully understand the concept of manufacturing. Hussey said Manufacturing Insight intends to leverage relevant existing activities in other parts of the Manufacturing Strategy.

The new initiative faces a big task. Hussey quoted several figures from the Engineering Technology Board’s research, which shows that, in a recent poll, just 12% of 11-16 year olds know what manufacturing is, 38% see engineering as undesirable as a profession and 68% view engineering as boring.

Panel fielding questions at Insight launch

The National Physical Laboratory will launch a large volume metrology training programme in response to industry demands. The service builds on the success of NPL’s dimensional measurement training programme, which has led to big efficiency gains in UK manufacturing. www.npl.co.uk/training.

The UK Border Agency is warning manufacturers they face large fines for employing illegal workers following a raid on a Portsmouth plastics factory.

Companies can face a fine of up to £10,000 per illegal worker they employ.

Manufacturers must prove to the UK Border Agency that they carried out the correct right-to-work checks to employ workers from outside the European Union such as asking for and taking documentary evidence of passports, work permits and documents issued by national governments. Guidance for employers is available at www.ukba.homeoffice.gov.uk/ employingmigrants, or by calling its helpline on 0300 123 4699.

4

Companies Act comes into full force The biggest overhaul of company law was completed in October, with the final elements of the Companies Act 2006 being brought into force.

Over two million British companies are set to benefit from a range of measures that simplify and strengthen the way they do business. To save business time and money Government departments now issue all their changes to business regulations on two dates per year – 6 April and 1 October.

This is part of the Government’s commitment to promote better regulation, doing so only where necessary, in a proportionate

and targeted way, and reducing bureaucracy wherever possible.

Key provisions of the Companies Act 2006 include: creating separate and simpler model Articles of Association for small companies, reflecting how they operate; enabling greater use of electronic communications with shareholders therefore avoiding unnecessary cost and time consuming administration; and making it an offence to carry on business in the UK under a name that gives so misleading an indication of the nature of the activities of the business as to be likely to cause harm to the public.

ManufacturingNews Government boost for manufacturing The Government has approved £40m worth of public funding for the world class Manufacturing Technology Centre (MTC), to be built at Ansty Park research and development site outside Coventry.

The Department for Business, Innovation and Skills (BIS) has confirmed the capital expenditure which will be jointly funded by Advantage West Midlands and East Midlands Development Agency. The MTC has the backing of some of the UK’s major global manufacturers and will support UK manufacturing companies. In total, £130 million of public and private sector contributions will be invested in the centre over the next ten years.

Since Manufacturing Strategy: New Challenges, New Opportunities was published in September 2008, the Government has indicated its support for a transition to low carbon and a move to high tech high value-added manufacturing.

In a speech to leaders from across the manufacturing industry, Business Minister Pat McFadden set out the need for an investment in skills as well as new technologies and said that, for the sector to continue to grow and succeed, it needs to have people with the right skills in the right place at the right time.

McFadden said: “Britain has a great manufacturing future, not just a great manufacturing past. But the face of manufacturing here is changing and we need to embrace and support the numerous opportunities created as a result.

That’s why we’re investing in centres like Ansty Park.”

Manufacturers named in Nimrod crash report BAE Systems and QinetiQ were cited in a report that claims the Ministry of Defence put cost-cutting before safety, leading up to the crash of an RAF Nimrod spy plane in 2006 in which 14 servicemen died.

A report authored by specialist aviation lawyer Charles HaddonCave, released on October 28, accuses the two British companies and the MoD of disregarding human safety in favour of preserving budget expenditure. The report maintains that this led to an unsatisfactory safety review of the ageing Nimrod MR2 fleet in 2004. In 2006 the 37 year old Nimrod XV230 crashed in Afghanistan shortly after a mid-air refuel, killing the 14 servicemen.

The report said BAE’s safety report was “riddled with errors” which were subsequently not picked up by QinetiQ, which was acting as an independent supervisor. As well as the improper safety procedures carried out by BAE, Haddon-Cave said the company had built up “a

wall of denial and obfuscation” since the event. Haddon-Cave said BAE Systems holds “substantial responsibility” for the tragic event and QinetiQ “a share of the responsibility.”

Summarising, Haddon-Cave said: “In my view, XV230 was lost because of a systemic breach of the military covenant brought about by significant failures on the part of all those involved. This must not be allowed to happen again.”

BAE Systems has acknowledged the report and said it “will consider and assess how best to support the Ministry of Defence in the implementation of the recommendations for improving processes to further enhance the operational safety of aircraft in military use.” In a separate statement, QinetiQ has expressed “its sincere condolences to the families and friends of those who lost their lives,” emphasising that it “will seek to learn from all that the report says.”

Newsinbrief Top tier manufacturers in different sectors were honoured for business efficiency gains by maintenance, repair and overhaul specialists Brammer in October. Five categories were awarded: Energy and Environmental Improvement (Cadbury); Reduced Maintenance (Tarmac), Increased Production Uptime (Crown Packaging); Business Process Improvement (Georgia-Pacific) and Supplier of the Year (SKF). Companies to make the shortlist across all categories included Allied Bakeries, Alcoa Fjaroaal, Amtico, Aunt Bessie’s, Cadbury Sheffield, Rolls-Royce, Scottish & Newcastle, Unilever and Brammer supplier Festo.

A weary TM editor Will Stirling arrived home having completed his epic cycle ride from Lands’ End to John o’Groats – knocking days off the average time.

It isn’t too late to sponsor Will and donate money to SolarAid, a charity that aims to reduce global poverty and climate change by providing solar energy equipment to under-developed countries.

Unilever it is to reduce its equity interest in US cleaning product manufacturer JohnsonDiversey from 33% to 4%.

Unilever will receive $158m in cash together with $250m senior notes with a 10.5% coupon, payable in cash or kind. This transaction follows on from the original 2002 sale of Unilever’s institutional and industrial cleaning business to Johnson Wax Professional.

Business Secretary Lord Mandelson announced plans for a unique new £37m Bioscience Campus in Hertfordshire which could create up to 1,500 highly skilled jobs. The estate, already host to a research centre owned by GlaxoSmithKline who are a partner in the initiative, will initially be home to 25 early-stage biotech companies. However, the plan is for this to increase five-fold over the next 10 years. The Campus will offer each company access to specialist skills, equipment and expertise, to help stimulate innovation in drug development.

5

Newsinbrief Gilbert Toppin resigned from his post of chief executive at EEF , the manufacturers’ organisation. The former Deloitte man has been in the job for almost two years, and has overseen the revamp of the organisation from a group of regional federation to a single centralised body.

Having completed his task, EEF said Toppin now feels the time is right to seek a new challenge.

The Chancellor, Alistair Darling, is being petitioned by the Federation of Small Businesses (FSB) not to propose tax hikes for SMEs in his pre-budget report amid fears that such a move will cause deeper unemployment. In its Pre-Budget Report submission, the FSB pointed to an independent report by the Centre for Economics and Business Research (CEBR) which states that raising taxes could cost UK businesses billions of pounds, leading to hundreds of thousands of job losses.

SME manufacturers in Scotland are to be given a £2,000 cash incentive to take on a new apprentice in a bid by the Scottish government to invigorate vocational skills provision. The ‘Invest in an Apprentice’ scheme is also open to small and medium textiles, food and drink and energy firms. It will be funded by the Scottish Government and the European

Social Fund.

Honda, Toyota, and BMW have come together with the Institute of Motor Industry’s (IMI) awarding body, IMI Awards, to develop the definitive qualification in maintaining hybrid technology cars under the new Qualifications and Credit Framework (QCF). The parties have developed both skills and knowledge based qualifications.

The skills-based qualification, a Level 3 Award in Automotive Internal Combustion and Electric Hybrid System Repair and Replacement, will be offered to mechanics across the car manufacturing industry at the Honda Institute.

6

New report on open innovation Cambridge University’s Institute for Manufacturing (IfM) has produced a new guide to show how other companies can follow in the footsteps of companies such as BP, GSK, Phillips and Unilever.

The report, “How to Implement Open Innovation”, is the result of a two-year study of some of the world’s leading firms. The research team looked at more than 30 major companies from a variety of sectors, including energy, aerospace and defence, software and media, electronics and telecommunications.

It is thought that open Innovation could be a way of improving a firm’s ability to create

and capture value by improving the rate and quality of innovation.

Rather than relying on internal resources firms share knowledge and technologies with other companies in a bid to create new commercial opportunities Report co-author Dr Letizia Mortara, of the IfM’s Centre for Technology Management (CTM), says that while Open Innovation is relatively new phenomenon, “it has started to gain traction in businesses across a range of sectors. We wanted to try and find out if there was a framework or guide for other firms to implement Open Innovation and to understand what people involved in its adoption did on a day-to-day basis.”

Energy prices mixed in Q3 The price of oil and gas fell in Q3 while electricity rose, according to the latest findings from accountancy firm BDO Quarterly Manufacturing Energy Tracker.

During the third quarter of 2009, oil prices fell by 7% in comparison to the previous quarter — from $70 a barrel at the end of June compared to $65 a barrel at the end of September.

Gas prices fell 10% in Q3, in comparison to end Q2, although after a low point in August 2009, the price is on the rise. Electricity prices rose 14% in Q3 compared with Q2, but are still 50% lower than at this time last year.

Tom Lawton, Head of Manufacturing, at BDO LLP commented: “High energy

prices will continue to put pressure on manufacturers’ margins for some time to come.

This is especially true as we appear to be headed for a scenario where manufacturing is more tightly regulated and environmentally-oriented.”

“It appears that while we might see some temporary fall-back, higher prices are here to stay. Energy use needs to be higher up on the corporate agenda, with manufacturers taking steps to introduce measures such as making existing plants and facilities more energy efficient and reducing energy costs by improving by initiatives such as the use of recycled waste-heat and highefficiency motors.”

The Manufacturer Awards 2009 are being held on November 12 in London. For further information please contact Alexis Catchpole on either 01603 671303 or a.catchpole@sayonemedia.com

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Newsinbrief Thirty nine per cent of an audience of 120 manufacturers and industry representatives thought manufacturing alone can save the UK economy, but won’t in its current form.

The responses came from a senior panel Q&A event held by EEF on Wednesday 21 October. The consensus view of a large group of industry representatives by EEF was that manufacturing is able to save the UK economy, but not within today’s policy and economic framework.

The Confederation of British Industry (CBI) has released what it is calling a “blueprint for balancing budget and supporting economic growth” outlining its recommendations for Alistair Darling’s impending Pre-Budget Report. The business support body says government needs to cut spending by £120bn in order to balance the books by 2015-16. This is two years earlier than government has declared it is aiming. The group also says that £50bn will need to be found between now and 2013 because of slow economic recovery and a further £70bn after.

Individual manufacturing firms are now losing less money to fraud than they were a year ago — and are losing less than companies from other sectors, according to the Annual Global Fraud Report for 2009/10 from corporate consultants Kroll.

Kroll’s survey of firms from around the world found manufacturing companies are losing an average of US$7.4m over three years, down 13% on last year’s figure which stood at US$8.5m.

The government-backed sustainability body

Envirowise has launched a new scheme

called Rethink Waste and says it could save manufacturers up to £1,000 per employee.

The initiative is an online training and resource programme which consists of three online modules, a virtual factory tour, audiocasts and an online resource efficiency conference. Envirowise says it will take businesses through the key steps of collecting benchmarking data, developing an action plan and then implementing a waste saving strategy.

8

Opportunities in Chinese aerospace UK Trade & Investment is hoping to secure a strong British presence in China’s budding aerospace industry after meeting with key industry figures from the Asian country last week.

A delegation of senior officials from the Chinese Aviation Industry Base, the Aviation Industry Corporation of China and the Commercial Aircraft Corporation of China has been visiting UK aerospace plants including Bombardier, GKN and GE Aviation as well as holding talks with UKTI officials about how Britain can share its growing expertise in fuel-efficient and green composites for the sector.

China is expected to need up to 2,800 new passenger aircraft

and freighters by 2026 and this is “an opportunity that cannot be ignored,” according to UK Trade & Investment chief Sir Andrew Cahn.

“China is set to become one of the major engineering powers of the 21st century,” he said.

“The delegation here wants to know about the strengths and technological know-how that have made the British aerospace sector so successful.

“The aerospace sector in China is being built virtually from scratch.

There are excellent prospects at virtually every point of the supply chain. We want to work together to help British companies make the most of it.”

Production to continue at Govan with Type 45 Destroyer launch The fifth of the Type 45 antiair warfare destroyers for the Royal Navy, Defender, has been launched from BVT Surface Fleet’s shipyard at Govan on the Clyde.

A joint venture between BAE Systems and VT Group, Defender is the fifth Type 45 destroyer of a six-ship fleet designed to be used by the Royal Navy for air defence.

With 47 megawatts of power, the Type 45s are the largest and most powerful air defence ships currently developed for the Royal Navy.

There have been concerns, however, as to whether production of the Type 45 Destroyers will signal a reduction of work at the Govan, facilities with a checkered history of such redundancies.

However, BVT is only half way through the programme, with a target to deliver all six ships to the Royal Navy by the end of 2013. Indeed, BVT recently signed a £309m, seven year support contract with the Ministry of Defence - in a move that will provide the high quality through life support for the Type 45 fleet.

The first of class, HMS Daring, will enter service later this year after an extensive round of rigorous sea trials. Her sister ships will also have to be proven at sea before they too are commissioned at their home base in Portsmouth. All six ships’ bow sections and masts are constructed at BVT’s shipyard in Portsmouth before being towed to Glasgow, where the ships are assembled.

ManufacturingNews Datesfor yourdiary November 10-11 Aero Engineering 2009 is being held at the

Central Convention Complex in Manchester. For more information please visit: www.aeroconf.com

11-12 Manufacturing Technology 2009 is being

held at the Tower of London hotel. To book your place at the awards contact David Alstin on 01603 671307 or d.alstin@sayonemedia.com

12 The Manufacturing Advisory Service is holding

23-24 Technology World09 is being held at the Ricoh Arena in Coventry. For further information please visit: www.technologyworld09.com 24 The Society of Motor Manufacturers & Traders

is holding their annual dinner at the London Hilton, Park Lane.

For further information, please contact: annualdinner@smmt.co.uk

December

a Manufacturing Conference 2009 focusing on innovation in product and design & technology at Rudding Park, Harrogate.

For further information or to book please contact Karen Dowd on 0113 368 5264 or karen.dowd@mas-yh.co.uk

2-3 SMMT are exhibiting at the second Platform Technology

18 MCP Consulting and Training in association Skills Academy for Food and Drink Manufacturing are holding an Engineering &

9 in association with the IET, National Physical Laboratory is hosting an afternoon seminar to look at some

with the National

Maintenance conference in Nantwich, Cheshire. For further information please contact Sarah James on 0121 506 9034 or training@mcpeurope.com

19 The Technology Strategy Board will be exhibiting at Science & Innovation 09, to be held at the QEII Conference Centre in London. For further information, please visit: http://www.govnet.co.uk/science/ 23-24 SAP is holding a UK & Ireland Group Conference at Manchester Central. For further information please visit: http:// www.sapusers.org/conference2009/ or contact charlotte@ama-limited.co.uk

for Military Vehicles conference, to be held at the Bristol Marriott hotel. For further information please contact Jason Williams on 020 7973 1273 or j_williams@imeche.org

of the measurement issues that need to be considered when using materials in extreme situations. For more information please visit: http://www.npl.co.uk/events/09-dec-09-materialsfor-extreme-environments

January 14-15 The Manufacturing Technologies Association will be featuring at Autosport 2010. For further information please contact Christel Moustacas on 020 7298 6416 or cmoustacas@mta.org.uk

21-23 SBAC will be featuring at the Bahrain Airshow. For

further information please visit: http://www.farnborough.com

Manufacturingoutput The Confederation of British Industry (CBI) says that the decline in UK manufacturing output has eased considerably in the past three months, and the sector’s prospects look brighter, with sentiment improving and modest growth expected in the three months ahead.

Domestic demand continued to slow in the three months to October, but marginal growth is expected in the three months ahead (a balance of +3%). Helped by a weakened sterling, the contraction in demand for exports was less than expected and firms expect export orders to grow over the coming three months (a balance of +9%).

Its latest Quarterly Industrial Trends Survey also revealed that the weakness of sterling is helping export competitiveness, although stocks are still being run down and difficult access to finance is constraining output and investment.

Sentiment about export prospects for the year ahead is, at a balance of +16%, the strongest since July 1995 (+21%). And a net 10% are now more optimistic about the overall business situation than they were three months ago, which is the first improvement in sentiment since April 2007 (+16%).

The volume of manufacturing output continued to fall in the three months to October, with 34% of firms saying it fell, and 26% saying it rose, giving a balance of -8%. This marks a much slower rate of decline than in July’s survey (-31%), Asked about the next three months, a balance of 4% of firms expects growth, which is the highest since January 2008 (+9%).

“Having endured a brutal recession, manufacturers appear to be turning the corner, with optimism up and mild growth in output and demand expected over the next three months,” says Ian McCafferty, CBI Chief Economic Adviser. “Firms finally seem to be benefiting from a weakened pound, as global markets recover, helping to lift demand for UK exports.

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ManufacturingAppointments UK Appointments Aston Martin Michael van der Sande

Aston Martin is pleased to announce the appointment of Michael van der Sande into the newly created position of chief commercial officer. Based at the company’s headquarters in Gaydon, United Kingdom, Van der Sande will report to Dr Ulrich Bez, chief executive officer and will be part of the

company’s executive board of management.Van der Sande joins Aston Martin from Tesla Motors, but is perhaps more well-known for his twelve years with Harley Davidson, where he held a variety of senior roles in marketing, dealer development, product development and commercial operations.

Sagentia Brent Hudson

Sagentia, the award-winning technology consulting, product development and IP licensing organisation, is pleased to announce it has appointed Brent Hudson as its new chief executive officer, succeeding Alistair Brown. Hudson brings extensive senior executive

expertise to the company, particularly in growing technology-focused companies.

Hudson has held either senior or board-level roles at technologyled companies including Cambridge-based electronic product developers Symbionics Ltd and Tality (UK) Ltd.

Redirack, a leading storage system and mezzanine floor manufacturer, has a new managing director. Andrew Forsythe takes on the role with present managing director Phil Culling becoming chairman.

Forsythe has worked with Culling previously and has been Redirack’s company secretary and commercial legal adviser since its acquisition by the current owners in 2004. Forsythe also previously owned a French storage business and has provided operational and re-structuring advice throughout the UK and Europe.

Jim Smart has named as the new finance director at Premier Foods, the UK’s biggest food producer and owner of the Branston Pickle and Hovis brands. Previously, he was finance boss at Boots. Smart also trained as an accountant with Coopers & Lybrand, before joining Abbey National, the mortgage lender, where he rose to group financial controller.

Gary Allen has been appointed as managing director of TT Electronics for their integrated manufacturing services’ plants in Rogerstone, and Aylesbury Allen will be responsible for overseeing the site’s daily operations while designing and executing regional sales strategies across Europe.

Allen possesses more than 23 years experience in management and business development, including over 18 years with Thales Avionics Limited UK. Jonathan Hodgson has been appointed as sales director at Lyons Seafoods, Europe’s leading processor of king prawns. Hodgson comes to Lyons Seafoods from international manufacturer of convenience foods and ingredients Greencore Plc where he was commercial director of the cakes and desserts category. His career also includes employment at Young’s Seafood, Geest Plc and Asda.

The Board of QinetiQ Group plc has announced that from 16 November 2009, Leo Quinn will join the Board as chief executive officer. He replaces Graham Love who is standing down after eight years with the Group. Quinn was previously group chief executive of De La Rue plc where he led the company’s transformation into a focused, market-leading security printer, serving governments and central banks.

International Appointments

Yukihiko Nagaoka has taken over responsibility as head of European operation and managing director for the European activities of the MISUMI Group. The branch in Schwalbach belongs to the European Division of the Japanese specialists for standard, purchased and custom-made mechanical parts.

The sales area covers all European countries and Africa.

Nagaoka worked in various posts in the audio-visual industry for the entertainment electronics specialist JVC, from 1983 until February 2009.

SAP AG has announced the appointment of S. Singh Mecker as the head of the global ecosystem and partner group (GEPG) for SAP AG. Mecker, as senior vice president of GEPG, reports directly to SAP executive board member John Schwarz, and is responsible for leading all strategic and operational aspects of the SAP ecosystem and partner programs on a global basis.

Dr. Jürgen M. Geißinger, Schaeffler group president and CEO, has been elected as president of the World Bearing Association (WBA) at the organisation’s fourth annual meeting in Tokyo. In September 2006, the WBA was established as an umbrella organisation for the American Bearing Manufacturers’ Association (ABMA), the Japan Bearing Industrial Association (JBIA) and the European Bearing Manufacturers’ Association (FEBMA).

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

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ManufacturingStrategy A manufacturing strategy needs Insight Ian Lucas is the Business Minister, Department for Business, Innovation and Skills

The

UK makes things. We are home to the sixth largest manufacturing industry in the world — pretty strong evidence that we are still a country that makes things. Manufacturing will remain as vital to our economy in the future as it is today.

And while this government still has a significant role to play in helping companies through the recession, we must ensure our industry is prepared for the new opportunities and challenges the upturn will bring.

Globalisation coupled with on-going advancements within the industry has changed our position in the supply chain. We make fewer products from start to finish and many of our manufacturers have become specialists in manufacturing key components and parts.

The growth of new sectors such as plastic electronics and biotechnology, have taken the place of traditional heavy industry. And over the next decade as low carbon changes the way we work, the way we heat our homes and the way we travel, we need to make sure our manufacturers are in a position to take advantage of the economic opportunities that brings.

The Manufacturing Strategy, launched last year, laid down the actions we are taking to achieve that. And along with the Advanced Manufacturing Strategy launched in July, it looks at how we can build on our strengths in advanced manufacturing and low carbon technologies.

We are twelve months on and I am pleased to say we have made significant progress. We have established the Offices for Nuclear Development and Renewable Energy Deployment – something that would not have happened without significant public sector funding. We have launched the low carbon strategy and provided funding for a competition that will see 340 low carbon vehicles trialled on UK roads in the next twelve months. These are all developments that will help manufacturers move forward.

Manufacturing Insight

But despite these achievements there is still a lot more to be done. One of the biggest challenges the industry faces is recruiting new talent. Many graduates and school leavers do not view the manufacturing sector as an exciting place to work – to say it comes low on

One year on from the launch of the Governments’ Manufacturing Strategy: New Challenges, New Opportunities, business minister Ian Lucas MP recaps on the focus areas, and outlines the plan for Manufacturing Insight and the new Manufacturing Technology Centre in Coventry. their list of career choices would be putting it lightly.

It does not matter how many engineering, science and technology-based degrees we make available or how many apprenticeships are out there, unless we have a regular stream of new talent putting those skills into practice within the industry. That is where Manufacturing Insight comes in. The body, which officially launched yesterday, will be tasked with changing the perception of manufacturing among youngsters, focussing on the positives and the career prospects the sector offers.

We need to create more opportunities to see exciting manufacturing projects in action, like the Bloodhound land speed record project, which has seen university students work alongside some of the world’s leading engineers, mechanics and manufacturers to build a super car. Local school children have also been invited along to the facility to see its progress. The aim is to inspire youngsters, to show off some of the skills our experts have to offer and to open up new career paths for graduates.

Using the media, feeding into the school curriculum and developing relationships with youth organisations, Manufacturing Insight will reach out to youngsters. It will receive £50,000 a year for the next two years from government towards start-up costs, with additional funding to come from the wider business community.

We have now also — in partnership with Advantage West Midlands and the East Midlands Development Agency — put in place £40 million to build the Manufacturing Technology Centre, a world-class research, development and demonstration facility, based in Coventry. Hosting seminars and open days, it will offer SMEs and universities the chance to participate in projects.

Initial projects will involve Rolls-Royce, Aero Engine Controls and Airbus UK and discussions are well underway with a number of other companies including Jaguar Land Rover and Bombardier.

The manufacturing sector has and will continue to change, but if we can make people aware of the opportunities that exist and ensure the right skills are in place to fill those opportunities, then I am in no doubt UK manufacturers have a bright future ahead. end

Have your say at www.themanufacturer.com

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Preparing for the recovery TM associate editor Edward Machin speaks to Graeme Allinson, Head of Manufacturing, Transport and Logistics at Barclays Commercial Bank, about the current state of UK manufacturing, our sector’s future, and the need to right-size effectively.

A pat on the back?

It seems almost churlish to say that the past eighteen months have been challenging for the manufacturing sector, with ONS figures revealing a decline in GDP of 5.5%. Indeed, the official ONS statistics highlight that manufacturing has, on initial viewing, performed significantly worse still, showing a fall in output, in the third quarter of this year, of 10.1% compared to the same period last year.

However, says Graeme Allinson, Head of Manufacturing at Barclays Commercial Bank: “On a comparative analysis, the UK has performed considerably better than that of Germany, which has, according to the German Federal Statistics Office, experienced an annualised fall in GDP of 15.2%. UK manufacturing has held up better than those economies we regularly benchmark ourselves against. This is, in part, due to their reliance on the export-based manufacturing which collapsed as a result of declining global demand.”

Similarly, the relatively low unemployment statistics for the manufacturing sector is a positive sign. The short, flexi and part time working patterns that manufacturing employers and employees have adopted as part of their ‘right-sizing’ strategies have aided this trend He continues: “It is also encouraging that there has been a noticeable lack of industrial disputes within the sector, despite the changes to employment patterns. This is to the credit of everyone associated with manufacturing who have adopted flexible working hours, thus lessening the impact on the sector.

Considering the below graph, which highlights the size of the challenge faced by UK business, the fact that manufacturers remain resilient and forward thinking is something to congratulate.

“It is for this reason that Barclays remain very much open for business within the sector. We see manufacturing as a hugely positive sector which has proven to be robust in this period of great economic difficulty. Moreover, we are delighted to have seen a pronounced uptake in the number of manufacturers that are coming to us to discuss their expansion plans.”

“It has been particularly pleasing to see that manufacturers have, and continue to, take action to address challenges while remaining cash-flow positive and profitable at operating levels. Perhaps this is somewhat unsurprising, given that UK manufacturing has been subject to continuous challenges over the past 10-15 years. Challenges such as the rise of low cost production areas (i.e. the China effect), sterling appreciation, and the quadrupling in oil and raw materials prices.”

“Where right-sizing is needed, I advise my clients to ensure that those strategic cuts have been made in the right places within their business. Therefore when the recovery comes - as it inevitably will - they will be best placed to take advantage and grow with demand. For example, we are seeing China’s growth earnings, according to the Chinese National Bureau of Statistics, reach 6.1% and a positive GDP of 6.5% throughout the Far East. There are also now clear opportunities for UK manufacturers in the export markets, particularly given the recent depreciation in Sterling.”

2010 and beyond

“Having spoken to many of my clients over the past few months, I have been pleased to feel a sense of cautious optimism which appears to be infiltrating across the sector.

However uncertainty remains and further change may be on the horizon as a result of economic and policy changes. When faced with such uncertainty the key is to have flexibility in your business model to ensure that you can absorb future change.”

Ultimately, however, says Allinson, if your business has remained profitable and afloat through this current recession, there is much to be proud of, and through ensuring you remain flexible and open to change, you are ideally positioned for the road to recovery. end Graeme Allinson Head of Manufacturing, Transport and Logistics Barclays Commercial Bank 07775 550635 graeme.allinson@barclayscorporate.com Visit www.barclaysturningthecorner.com

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Economics Copenhagen – The competitiveness issue Steve Radley, chief economist, EEF

This month has brought better news — activity on the high street and in the housing market has picked up, and surveys of businesses and consumers point to increased confidence about the future. While we are not out of the woods, we can start looking planning ahead for the future with a bit more confidence.

December’s

climate change summit in Copenhagen is now firmly in sight. The theoretical goal is to broker a plan to limit average global temperature increases to 2°C through legally-binding commitments to substantially reduce emissions of greenhouse gases.

However, if a credible deal is to be achieved it must not be at the expense of industry competitiveness.

Of course, as the debates played out in advance of Copenhagen have indicated, substantial commitments from all industrialised countries is currently looking unlikely. India, for example, has threatened to walk away from the talks if developed countries insist they reduce their emissions. And with 400 million Indians still without access to commercial energy, the pressures that they face are clear.

In the race to secure a political deal the needs of manufacturers are often overshadowed. The commitments made by individual countries and the “climate aid” each will provide to support developing countries in dealing with climate change dominate newspaper headlines. Yet it is absolutely vital that manufacturers’ needs and concerns are addressed.

But at the same time, manufacturing industries in developed and developing countries alike compete in the same world markets and face the same competitive pressures. For example, a steel works in China may be of an equivalent standard to one based in Europe, with both selling into the same global, highly-competitive marketplace. But the former may be in a position to sell cheaper product because its carbon-related costs are significantly less, given that the pressure to cut emissions is significantly less and it benefits from cheaper energy costs.

There is no doubt that after Copenhagen politicians will turn to manufacturers to enlist their help to deliver on any promises made at the summit: it is manufacturing that will supply the low carbon products and services that will help to turn political rhetoric concerning the fabled low carbon economy into a reality. But to do so, manufacturers must be set the right conditions to innovate. Key to this is to ensure that manufacturing sectors are subjected to comparable regulation regardless of where in the world they are located.

At the heart of this condition is concern over the spectre of ‘carbon leakage’— the prospect that companies will move to countries without regimes that restrict carbon. In other words, relocating trade flows in order to avoid the additional costs of regulation.

This leakage could also occur if market share is lost to companies based in unregulated regimes which, as a result, can undercut competitors.

Worry that jobs will be lost is at the forefront of these concerns. But it is not only jobs that risk being lost; greenhouse gas emissions also risk being lost to unregulated regions, so emissions are offshored rather than reduced, fundamentally undermining political efforts to limit global warming.

EU efforts alone are not sufficient No country with carbon-constraining legislation — including the UK — is immune. In September, the OECD estimated that if the EU acted alone to cut carbon emissions by 50% in 2050, almost 12% would be offset by emission increases elsewhere. However, if all industrialised countries were to act, this leakage rate would be under 2%.

In such cases, comparable regulation is the only solution to safeguard competitiveness. How to entice engagement from energy-intensive sectors in countries like China and India — while placating the fears of industrialists in developed countries — will be central to Copenhagen’s success.

We have already had a glimpse of what might happen if negotiators fail to achieve this holy grail of “comparable regulatory effort”. In the US, industry competitiveness has taken centre stage in debates around the American Clean Energy and Security Act. A last minute compromise in the Bill going through the House of Representatives saw the inclusion of a clause which allows the President to impose border tariffs on carbon intensive products from countries that fail to take comparable action. The clause remains in the bill currently under discussion in the Senate. A similar proposal has been advocated by the French.

So at present a deal in Copenhagen remains elusive.

That is probably not surprising. The agreement over 190 governments and their representatives are seeking to achieve by the 18 December is deeply ambitious. But it is clear that negotiators in Copenhagen must tackle the concerns of manufacturers based in developed countries head on.

The border measures, as advocated by the French and Americans, hint of a future of greater levels of protectionism if they fail. end

EEF Climate and Environment Adviser Susanne Baker will be blogging live from the Copenhagen summit (7-18 December). www.eef.org.uk/blog

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The big picture The innovative way to innovate Dr Letizia Mortara Institute for Manufacturing

As manufacturing processes and technology become increasingly complex and global markets more competitive, few companies can rely on internal R&D alone. Could Open Innovation offer UK manufacturers a chance to retain their competitive edge? Yes, says Dr Letizia Mortara from Cambridge University’s Institute for Manufacturing.

Traditionally

organisations had their own research and development teams tasked with producing the next must-have product or technology in a bid to secure a competitive advantage. But as manufacturing processes and technology become increasingly complex and global competition grows, few companies can now afford the luxury of going it alone.

Unilever and Procter & Gamble have embraced this approach and have openly said how much they have benefitted from access to fresh ideas and thinking.

Likewise the European electronics giant Philips has a similar view, seeing OI as a way of encouraging entrepreneurial thinking in the innovation process.

This is where Open Innovation (OI) comes in. For those unfamiliar with the term, OI is about sharing ideas and knowledge to enhance innovation capability. OI is an innovation itself, it was first described by Prof Henry Chesbrough of the University of Berkley in 2003 and aims to accelerate the development of technologies, products and services by working with external partners.

OI could be a key factor over the coming decades. As emerging economies evolve, so the competitive edge will most likely lie not in manufacturing capability but in idea generation and the ability to act on new ideas.

OI may help UK manufacturers gain that competitive advantage. It is apparent from the case studies that it can be a positive and successful method to innovate.

The problem seems to lie with execution.

It’s a simple, yet powerful idea and one that is gaining traction. You can see examples of OI across a range of business sectors including Electronics and Telecoms; Energy; Aerospace and Defence, Fast Moving Consumer Goods and Software and Media.

The benefits of collaboration appear obvious, especially in a period of tight budgets. It has often been said innovation is the best route out of recession, indeed there has been a raft of reports over the last 12 months saying exactly that. Yet, in a downturn, activities which don’t immediately add black numbers to the bottom line tend to get cut. With OI R&D activities, development risks and costs are shared, meaning companies have access to additional resource without additional expense. It also means firms gain access to markets and expertise which might otherwise only be achieved through costly acquisition.

Though it may appear to have some of the characteristics of a management fad, there are several examples of how it has worked effectively. The Japanese clothing retailer Muji, for example, uses its existing customer base to pre-evaluate designs before developing new products. In Germany, a country where OI has really taken hold, the automotive product development company EDAG unveiled its Light Car, a new vehicle developed with nine open innovation partners, at this September’s Frankfurt Motor Show.

And the phenomenon is not confined to small niche manufacturers or design groups.

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Problem: effective implementation

The challenge for manufacturers is not in accepting the potential positive benefits of OI; but rather in facing the challenges of implementing it effectively, an issue not unique to OI. When Toyota’s Just-In-Time techniques first transferred across from Japan little thought was initially given to how these should be adapted for UK industry, until the development of lean methodologies. The same can be said of OI. Firms contemplating adopting an OI approach need to think carefully about how to introduce it. For many employees, imbued with a set of company values, it represents a radical change. People don’t tend to like reorganisation or radical change especially when it involves an entrenched method of doing things — a culture of open innovation can’t be introduced overnight!

Some companies, such as Google, were created from the start with innovation as a central ethos, and may find introducing open innovation relatively easy. For most firms it takes time to evolve their OI approach.

These companies, for example Unilever – one of the pioneers of OI – have had to overcome obstacles such as motivating staff, developing processes and building the right skills set.

The IfM and other academic institutions continue to devote a great deal of research effort into OI as it clearly has the potential to have a big impact on industry. While it may not be a panacea to all business problems, it is certainly an approach that could help to ensure UK manufacturing maintains its competitive edge. end

The IfM has an active research programme on Open Innovation.

For more details go www.ifm.eng.cam.ac.uk/ctm/teg/openinnovation.html

Leadstory Greener pastures: environmental law Original image courtesy of Paul Bonomini

For companies, a doctrine of environmental protection represents arguably one of the most important and contentious geo-political agendas of the 21st century.

TM associate editor Edward Machin investigates the torrent of ‘green’ legislation which, with no sign of abating, is redesigning the landscape of British manufacturing.

Unsurprisingly,

the international community continues to dedicate itself to establishing long-standing commitments to the conservation of the environment. In December 2009, for example, the United Nations Climate Change Conference will meet in Copenhagen to ensure that, per UN Secretary- General Ban Ki-moon: “Tomorrow’s generations can look back and say: Our leaders rose to the challenge. They did what was right”.

While manufacturers may question whether such booming rhetoric applies to their day-to-day operations, they would be foolish to ignore the evermore forceful push towards a ‘greening’ of the sector.

Indeed, a vast body of environmental regulation — at both European Union and UK level — has been passed since the beginning of 2008, with the scope of legislation now expanding into hitherto unregulated areas. As manufacturers respond to these regulatory and market forces the availability, cost, and viability of the parts and materials purchased for use in products will continue to be heavily affected.

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Rethink waste to make cost savings Sustainability experts Envirowise launched an initiative last month to help manufacturers cut waste. Here, Michael Savage, Envirowise Production Specialist, explains how signing up to Rethink Waste and taking action on waste can lead to significant cost savings.

I

t is estimated that the cost of waste can be worth as much as 4% of a company’s turnover.

Coupled with the fact that landfill tax is set to rise to £48 per tonne in 2010/2011, the economic imperative to take action on waste is very clear.

For manufacturers in particular, waste is an area where significant improvements can be made. That’s why Envirowise has launched Rethink Waste, a new initiative that could help manufacturers to unlock thousands of pounds in cost savings and completely change their approach to the way they deal with waste.

Rethink Waste has been launched with support from manufacturers’ organisation EEF and is designed to help companies discover the ‘true’ cost of waste to their business. For example, Envirowise experience has shown that manufacturers taking action to reduce waste and improve their resource efficiency can save up to £1,000 per employee. Across the UK, around £500 million could be saved annually.

Companies are able to register at www. envirowise.gov.uk/rethink until the end of December and the course begins early in 2010. The course takes the form of three advice-packed online modules that will take businesses through the key steps of collecting benchmarking data, developing an action

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plan and then implementing a waste saving strategy. Participants will also have access to a virtual factory tour, audiocasts and an exclusive web conference.

The initiative will aim to help manufacturers take action to reduce, re-use and recycle waste wherever possible. Across the UK it is estimated that in some sectors as much as 93% of resource input might not make it into the final product and is lost as waste.

If resource efficiency practices are widely adopted the manufacturing sector could benefit from substantial collective cost savings.

A recent survey of UK manufacturers published by EEF and Envirowise showed that UK manufacturers do have clear environmental priorities and are committed to do more to reduce their environmental impact as part of a broader business efficiency agenda.

For example, while many UK manufacturers have enthusiastically adopted recycling measures , there are more opportunities to reduce and re-use materials as well – actions that could substantially benefit their bottom line.

Manufacturers must register for Rethink Waste before 31 December 2009.

Registrations can be made at www.envirowise.gov.uk/rethink.

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element, however, and are not applicable to spare parts for electronic equipment placed on the market before the coming into force date of July 1, 2006.

As with all environmentally-themed legislation, willful evasion of compliance is simply not an option for the law abiding manufacturer. These directives provide for a fine up to Eu50,000 for regulatory offences such as marketing non-compliant equipment, shirking or failing to report on recovery efforts, and failing to register with a competent authority before placing products on the market. Moreover, the Department for Environment, Food and Rural Affairs has begun its consultation on improving environmental enforcement in England and Wales. Its proposed civil sanctions will require polluters to restore any harm done to the environment, where possible, as well as including a monetary penalty and/ or criminal sanctions.

Upcoming legislation Environmental Sanctions Order 2010 Michael Barlow, a partner at Burges Salmon LLP, says: “There is a considerable body of empirical evidence to suggest that the strength of an organisation’s green credentials often represent the distinguishing factor for both customers and employees when choosing a company.” While undoubtedly correct, the reality of contemporary manufacturing dictates that many companies are compelled to place an ethos of environmental compliance at the heart of their organisational strategy.

This article explores those legislative instruments which have, and will continue to, steer the manufacturing sector towards ever greener pastures.

WEEE Directive

The Waste Electrical and Electronic Equipment Directive (WEEE) is an EU initiative which aims to minimise the impact of electrical and electronic goods on the environment by increasing re-use/recycling and reducing the amount of WEEE going to landfill. The UK Regulations implementing the WEEE Directive were laid before parliament in 2006, entering into law on January 2, 2007.

The Regulations state that producers, manufacturers, and retailers of electrical and electronic products will be responsible for ensuring any equipment sold or replaced on a like-for-like basis is reused or recycled at the end of life. Accordingly, if you are a manufacturer of electrical and/or electronic equipment (EEE) — or your product uses electricity for its main purpose — you will have obligations to discharge under WEEE. Closely linked to WEEE is the Restriction of Hazardous Substances Directive (RoSH, see below) which bans the market of electrical and electronic equipment containing more than agreed levels of lead, cadmium, mercury, hexavalent chromium, polybrominated biphenyl, and polybrominated diphenyl ether flame retardants. The regulations do not have retrospective

While currently in the proposal stage, when implemented the scheme will cover a wide range of existing environmental regulation in England and Wales, including waste, water, nature conservation, and related activities regulated under environmental permits.

The timetable for consultation closes on October 14 2009, the intention being to lay the Order and Regulations before parliament in January 2010 – with a view to their coming into force by April 2010.

Waste Batteries and Accumulators Regulations 2009

Stricter rules on manufacturing and recycling batteries and accumulators — rechargeable batteries — for UK businesses have been introduced through the implementation of the European Batteries Directive. These rules came into force on May 5, 2009, and producers will have to pay for the collection, treatment, and recycling of batteries from January 1, 2010, says Gordon McCreath, a partner in the Planning and Environment team at law firm Pinsent Masons LLP.

CLP: Regulation on classification, labelling and packaging

Linked to REACH, the CLP is an EU regulation which sets the rules for classification and labelling of chemicals. It aims to determine whether a substance or mixture displays properties that lead to a classification as hazardous. The date from which substance classification and labelling must be consistent with the community-wide regulations is December 1, 2010 and June 1, 2015 for mixtures.

Companies bear the cost

Manufacturers wishing to avoid such penalties therefore have two choices for legislative compliance, according to Geoffrey Bock, an engineer at the industrial machinery division of TUV Rheinland, a leading global provider of technical services. “One is for the organisation to develop its own processes and self-declare compliance. The other is to work

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Image courtesy of Envirowise

with third parties to handle the recycling efforts. Either way, the cost of compliance must be borne by the manufacturer, as the directives forbid charging end users for recovery and recycling,” he says.

Given that manufacturers are individually responsible for the collection and recycling of their products, concerns have been raised within the sector as to how these obligations will work in practice. For example, the British manufacturing industry cannot afford to absorb the cost of such directives — expected to be between ₤170m and ₤200m per annum — say trade bodies including the Association of Manufacturers of Domestic Appliances (AMEDA), the Intellect CE Council, the Radio, Electrical, and Television Retailers Association, and the Small Electrical Appliance Marketing Association.

The solution, they claim, is to follow the model adopted in Ireland, the Netherlands, and other European states by introducing an environmental recycling charge (ERC). Without this charge, it is argued, manufacturers will be forced to increase the price of goods, resulting in a mark-up of product costs as those transporting the goods, retailers , and Her Majesty’s Revenue & Customs seek to collect their overheads. Says Uwe Halleck, chairman of AMDEA: “We believe an ERC is the only way that the cost of historic waste can be shared among those who have benefited from its sale. Importantly, this view is supported by the overwhelming majority of manufacturers.”

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REACH

REACH (Registration, Evaluation, Authorisation, and restriction of CHemicals) is a European Community Regulation on chemicals and their safe use, dealing with the registration, evaluation, authorisation, and restriction of chemical substances. Enforced by law on June 1, 2007, the0placed to ensure that the chemicals it manufactures do not adversely affect human health or the environment. Consequently, manufacturers and importers which produce more than one tonne per calendar year are required to gather information on the properties of their chemical substances — ensuring their safe handling — and register the information in a central database run by the European Chemicals Agency in Helsinki.

Central to the framework is the requirement for producers and importers of chemicals to prove that their substances are safe before their entry into the marketplace. REACH therefore puts an increased onus on manufacturers to produce safe substances, in that under previous legislation it fell upon the authorities to prove that a substance posed a threat before it could be withdrawn. The fact that the burden of proof has been reversed “marks clear progress towards increased community-wide consumer protection,” says Joel Decaillon of the European Trade Union Confederation, Nonetheless, the most controversial aspect of the regulation’s passage through the European Parliament — the authorisation phase — remains a point of consternation for many manufacturers. Indeed, European Chemicals Industry Council Director-

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General Alain Perroy regretted that: “The unnecessary requirements added to the authorisation element of REACH” relating to the substitution of dangerous substances. “It will clearly add to costs,” said Perroy, denouncing the illusion that substitution could be governed by a command and control approach. “The end result will be legal uncertainty for business and, consequently, reduced investments and innovation.”

Image courtesy of Paul Bonomini

Equally worrying, a survey of electronics companies by the IPC, a trade association whose 2,700 member companies represent virtually all facets of the electronics industry, found that more than 40% of manufacturing and purchasing personnel have no understanding as to how REACH affects their companies. While this is indeed a damning reflection of the difficulty faced by manufacturers in adapting to the burdens of legislative compliance, there are nonetheless a range of solutions intended to ease such logistical difficulties.

Used by companies including Beckman Coulter, Cisco Systems, GE, IBM, Motorola, Sony Ericsson, Visteon, and Xerox, among others, software company PTC’s Insight Environmental Compliance is designed to track and improve the environmental performance of manufacturers’ products, parts, materials, and suppliers. As the sector has become well aware, product environmental requirements are subject to seemingly ad hoc changes, as new restricted substances are identified and existing exemptions expire.

For example, it is predicted that hundreds of REACH SVHC (Substances of Very High Concern) will disappear from the supply chain before official candidate substances are announced, due to a global blacklist effect. InSight Environmental Compliance is thus designed to manage and mitigate these supply chain risks, providing both an early-warning system and data to support effective decision making in design and production for regulatory standards including REACH, EU RoHS, ELV, WEEE, RoHS, PoHS, Halogen-Free, The Joint Industry Guide, and Global Automotive Declarable Substance List.

The WEEE and RoHS directives provide for a fine up to Eu50,000 for regulatory offences such as marketing noncompliant equipment, shirking or failing to report on recovery efforts, and failing to register with a competent authority before placing products on the market Similarly, Siemens PLM Software Teamcenter for Compliance Management includes Teamcenter for Environmental Compliance solution powered

by EMARS (Synapsis Technology), which helps companies meet environmental compliance requirements such as RoHS, WEEE, ELV, and REACH.

Carbon Reduction Commitment

Carbon law, generally defined as the regulation of greenhouse gases, represents the most widely accepted international mandate in preventing environmental destruction. Accordingly, in 2008 Parliament passed the Climate Change Act, establishing a legally binding obligation on the Secretary of State to ensure that the net UK carbon account for the year 2050 is at least 80% lower than the carbon emissions level in 1990.

As the first step in achieving such a target, the government launched the Carbon Reduction Commitment (CRC), a mandatory emissions trading scheme targeting emissions by companies currently not included in the EU Emissions Trading System or Climate Change Agreements. The CRC covers all organisations — manufacturers included — whose electricity

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Lead story

Image courtesy of WRAP

consumption through half hourly meters is greater than 6,000MWh/yr, equivalent to an annual electricity bill of £500,000 or more. All energy other than transport fuels will be covered, such as electricity, gas, fuel and oil.

CRC: While the scheme doesn’t officially start until April 2010, qualifying organisations will need to make preparations before that date to ensure that they comply with all legal requirements and fully participate in the scheme Company performance, based primarily on absolute carbon reductions since the start of the scheme, will be summarised in annual league tables – outlining the best and worst performers in terms of carbon emissions reduction. In order to avoid creating an additional financial burden, the auction revenues generated through the initial sale of credits will be recycled back to participants, with companies receiving payments back from government in proportion to their first year emissions, plus or minus a bonus or penalty, depending on their position in the league table.

Given that consumers are increasingly demanding strong environmental credentials of the companies

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Have your say at www.themanufacturer.com

they support, says Burges Salmon’s Barlow: “It remains particularly important over the coming months for manufacturers to understand fully the potential implications of the CRC, to budget and make preparations for it, and to ensure that the necessary systems and processes have been put into place to collate the information required for compliance.”

That said, recent legal developments have, while not as yet derailed the scheme, certainly raised troubling questions as to its future application., The European Court of First Instance in September overturned the decision of the European Commission, in calling for tighter limits on the amount of greenhouse gas emissions Poland and Estonia are permitted to emit for the period 2008 to 2012. Says Dr Anna Willetts, a solicitor at Greenwoods LLP: “The court’s ruling amazed carbon traders in Europe, as it went in complete opposition to the aims of reducing the European Community’s carbon emissions.”

Whether the ruling bleeds down to UK manufacturing’s operations remains to be seen.

Patently, however, it highlights the ever-shifting, seemingly contradictory nature of environmental jurispdrudence – developments central to both the legal and manufacturing communities throughout the European Union. Helen Loose, a consultant solicitor at Keystone Law, surmises: “It remains particularly challenging for manufacturers to keep abreast of the legislative and regulatory requirements which appear on an almost weekly basis. However, those businesses which accept this inevitability — and turn it their advantage — will ultimately be best placed to meet the challenges inherent in the greening of our regulatory world.” end

Corporate statement BDO LLP

Backtobasics Tom Lawton, head of manufacturing at BDO LLP, accountants and business advisers, recomends manufacturers maintain a focus on costs and working capital management as the economy starts a possible recovery.

We

have just been through a period of enormous economic uncertainty. The rapid contraction in activity across the world now looks set to be followed by a long road back to recovery. Whilst this is a cause for some optimism this is also a time in the economic cycle when a return to sales growth can provide immense pressures on working capital and cash flow - and can unfortunately lead to an increase in business failures. Manufacturers will need to keep a close eye on their business fundamentals.

1

Stay alert and respond quickly to early warning signs

Keep talking to customers, suppliers and advisers. Make sure that you respond to warning signals coming from your customer and key suppliers, and understand what those signals might mean. You need to ask yourself a few things. Are prompt paying customers becoming late payers? Are suppliers requesting advances in payment terms? Are there rumours that a customer or supplier has business or contract problems? Are you picking up worrying messages from the credit rating agencies?

These unusual trends might be alerting you to problems. Look for and understand these issues and develop appropriate responses and contingency plans. Panic is not required – but a strategy might be!

2

Maintain the focus on working capital management.

The crisis has already forced manufacturers to take actions to manage their costs, reduce inventories and generally improve their focus on working capital management. An increase in trading normally places additional pressures on working capital and funding requirements – and many businesses may find that they have significant cash flow pressures at the very time that business seems to be improving. My advice is to maintain the focus on cost reduction exercises, do not increase staff numbers until further into the recovery cycle,

continue to push hard to minimise stock levels and be even more cautious of your customers and their debts.

3

Monitor cash flow and profits

Make sure that your profit and cash flow forecasts are up to date and that they reflect the current economic conditions/ expectations for sales and costs. Keep your forecasts up to date and ensure they roll for at least 12 months ahead in some detail. This enables you to understand the performance and cash flows of the business and will identify any funding pressure points. If you foresee funding issues, develop a response strategy as far in advance as possible. In this nervous market your funders and other stakeholders do not like surprises, so they should be avoided at all costs!

4

Understand and optimise your funding arrangements

Although your funding arrangements may have built up over time, they may not reflect the current optimum structure for the business. Can you move “excess” short term higher risk funding to longer term loan arrangements? In addition make sure that you understand your security and covenant arrangements and build these into the assessments being made in point 3 above. If your covenants are under pressure or you think may breach, take advice sooner rather than later.

Finally this crisis has shown how important the credit rating agencies and credit insurers are in the business cycle. How often do you monitor your ratings? How often do you meet with your credit insurers to discuss your business?

Without wishing to be too gloomy, our recent research Industry Watch indicates that the level of manufacturing business failures will maintain at a very high figure in 2010. Many of these failures will be as a result of this stretch on working capital and available funding. Managing the basics may help your business through this next phase of our difficult economic journey. end

Have your say at www.themanufacturer.com

23

Not mission impossible: Carbon Trust has taken energy efficiency out of the ‘too hard basket’ The Carbon Trust’s mission is to accelerate the move to a low carbon economy now and develop commercial low carbon technologies for the future. With the likes of Director of Solutions, Hugh Jones (above left), having chosen to accept this mission, the Carbon Trust is tackling the problem of climate change, while also helping UK manufacturers to be more productive and profitable. Tim Brown reports.

24

Interview Hugh Jones

web publications offering energy saving advice for specific technology areas and industry sectors; free carbon surveys to help small and medium-sized businesses to reduce energy use in their premises; interest-free loans of up to £400,000 to enable businesses to replace inefficient equipment – cost free; and large scale, companywide carbon management programmes for assessing and tackling long term energy risks and opportunities.

Replacing and Refitting

Perhaps one of the most ambitious and successful Carbon Trust schemes is its interest-free loan initiative. Titled, ‘The Big Business Refit’, the campaign is designed to help businesses save energy by replacing outdated equipment with new energy saving models. With a minimum loan size of £3,000 and a maximum of £400,000, businesses are saving between £14,000 and £130,000 a year by replacing their old equipment. Of particular interest to businesses is that the scheme is designed so that the loans are repaid by the energy savings, over one to four years. Once the loans are repaid, these energy savings go straight back into the business.

economic downturn has caused “The a great many businesses to seek help on energy efficiency as a key way to tackle unnecessary cost

“

Hugh

Jones is well prepared for the interview, armed with a stack of data to reinforce the Carbon Trust’s many achievements. He is calm, collected and well informed, a demeanour that instils confidence in the belief that, while the issue of global warming is complicated, it is not insurmountable.

Assistance is available

Over half a million businesses and public sector organisations have been assisted by the Carbon Trust in the last 12 months. The Solutions department alone provides advice to more than 4,000 businesses every year on reducing their direct emissions by minimising unnecessary energy use. The Carbon Trust’s work also helps businesses save money which, in the current downturn, has meant there is vastly increased interest in its services.

The Carbon Trust Solutions department offers a range of different services to organisations ranging from one-man bands, to large enterprises. These services include: a free energy efficiency advice line; specialist

“The Big Business Refit can have a major impact on an organisation’s bottom line,” says Hugh Jones. “We’ve found that about 60% of UK manufacturers are forcing themselves to ‘make-do and mend’ with old outdated equipment due to lack of cash, despite the availability of interest-free funding to help them replace it. By refitting that equipment now, manufacturers can have new modern, more efficient equipment, and they save on their energy bills.”

The Carbon Trust is planning to loan out about £60m this year and £40m next year to UK SMEs and some larger organisations. The popularity of The Big Business Refit is growing. When this article was written in the middle of October, the scheme had experienced its busiest month ever in September, with over £5.5m lent in England alone. Jones says that they are looking to maintain that trajectory right through this financial year and into the next and, if successful, they will have provided loans to upwards of 2,000 businesses this year.

Every loan is predicated on an Energy Saving Assessment (ESA) which is undertaken by an accredited consultant on behalf of the Carbon Trust.

The loans are unsecured, so beyond a robust credit check, no other collateral has to be provided in order to obtain the loan. It only has to be demonstrated that the energy saving equipment is going to work.

Applications for the Big Business Refit are made via

25

the web, an offer can be received in 24 hours, and the money deposited within 10 days.

The amount of the loan is dependent on the equipment that is being purchased and the carbon that is being saved. According to Jones, the Energy Savings Assessment is a rigorous process which is based on known results for the type of equipment involved. For those that are sceptical that the energy savings will match the size of the loan, Jones says that in a large number of cases the savings exceed the required repayment within three years. Hugh offers the Stewart Company, a Croydon-based manufacturer of gardening and catering products which has received three loans up to upgrade its operations, as such an example. “Stewarts took out loans of up to £400,000 to replace three old injection moulding machines, plus process heating and cooling equipment, they are now saving £120,000 a year, as well as having the benefits of working with more reliable machines,” says Jones.

“Clearly in their case they are on track for a payback of under three-and-a-half years, and then anything beyond that is profit.”

In addition to energy saving, Jones says that replacing old machinery has the potential to vastly improve productivity. “We have witnessed productivity improvements ranging from 5% to 20%. We see this as a double benefit of the Big Business Refit, especially for manufacturing, where productivity is as important for profitability, if not more so, than saving money through energy efficiency.

Time to engage

Jones says that while interest in the environment has certainly improved, encouraging businesses to actively engage with ecological improvements is not always simple. “We are finding that in terms of awareness of the science surrounding climate change, there has been a step change in the last three or four years. Regardless of environmental awareness, the economic downturn has caused a great many businesses to seek help on energy efficiency as a key way to tackle unnecessary cost.”

message overwhelmingly “Our for any business not yet fully engaged with energy efficiency is that it is not too late to become involved

“

Biography Hugh Jones

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1963:

Born in Bristol

1985:

Graduated from Cambridge University with Modern Languages, and a specialism in European languages

2003:

Post graduated Imperial College in Environmental Technology MSc

1988:

Joined IBM, worked in international sales

1999:

Joined PwC Consulting as Associate Director, Business Development

2005:

Joined the Carbon Trust

2008:

Currently positioned within the Carbon Trust Solutions team which has worked with half a million UK organisations to implement annual savings of 2 million tonnes of CO2, equivalent to annual cost savings of £227million

Jones suggests that now is the perfect time to engage with environmental improvements, and that such commitments should be considered as opportunities not just responsibilities. “We are finding that particularly among larger businesses, the vast majority have now taken significant steps towards improving the carbon efficiency of their businesses.

We are finding that among SMEs, the proportion of companies that have actually taken those steps are somewhat lower, but that is across a broad spectrum of SMEs. “What we have also found is that many businesses still don’t have the resource or the access to capital to make some of these changes. As a result, we suggest starting with simple steps that will save money – we help businesses to understand just how much, and over what period. Then with the help, for example, of a Carbon Trust interest-free loan, it is possible to take the next step, which is to replace old machinery, for more efficient models.

While Jones says he has witnessed great progress being made, he acknowledges that UK industries can certainly achieve a great deal more. “Our message overwhelmingly for any business not yet fully engaged with energy efficiency is that it is not too late to become involved. We are finding that in every single business there are, at the very minimum, 5-10%

Interview Hugh Jones

Carbon Trust believes that there is an economic benefit in every case for businesses through energy saving improvements. None easier than simply undertaking a carbon survey or, for larger businesses, carbon management. Currently the Carbon Trust undertakes approximately 4,000 surveys per year and Jones describes them as a “sure fire” way to save money and carbon.

“We typically recommend a host of different measures and we can quantify both the carbon savings and monetise the measures so businesses can see both the environmental and economic benefits for them.

We then work with businesses to assist them to implement as many of the measures as possible.

One example is Mueller Europe, which makes copper tubes. We worked with them to identify a number of recommendations focused around monitoring, targeting and energy management. They are now projected to save about £76,000 pounds per year off their energy bills as a result of implementing the measures that the Carbon Trust advised through a carbon survey. In that case, improvements were made around policy and energy management measures, rather than equipment and clearly in many cases, companies can do both.”

Waste not, want not

Jones says that engaging with the issue of energy wastage should be of particular benefit for manufacturers. According to figures from the Carbon Trust, SMEs in England alone are wasting over £3bn per year on energy lost through inefficient equipment.

The average saving for a business taking a Carbon Trust energy efficient loan is about £14,000 per year, but the greater the replacement project paid for by the loan, the greater the potential savings. Roberts Mart is a manufacturer of flexible packaging products.

The company borrowed £300,000 for a printing press drying system and a number of other measures.

According to Carbon Trust, the company are making savings of £130,000 per annum off their energy bills, which Jones correctly points out is “a significant sum off any business’s bottom line.”

The Carbon Trust predicts that the £100m loan funds available is expected to fund replacement projects for approximately 3,000 businesses, helping them save a total of £40m a year. The loans are first come, first served, and there is a limit on the available fund.

As a result, Jones says that it is very important that organisations apply as soon as they possibly can. But that that line of thought does not just apply to the Big Business Refit. “With regards to all of our work ranging from advice to loans, the sooner you contact us and apply, the sooner a company can start making savings and the more quickly you will start to see the money on your bottom line.”

Licence to save money

Clearly, legislation around energy use is a major

factor for manufacturers. The Climate Change Levy has been in existence since 2001, and it effectively puts an extra price on fuel bills for all businesses, in order to encourage businesses to reduce greenhouse emissions. Other legislation, such as the Carbon Reduction Commitment, which is coming into force next year, will affect around 5,000 businesses that normally have an electricity bill of over £500,000. For the moment, for businesses smaller than that, in the SME range, there isn’t a specific applicable piece of legislation apart from the Climate Change Levy.

With future compliance presenting an opportunity and a challenge for business, Jones says that the Carbon Trust would encourage every business to “take the opportunity to control energy usage, which should

of UK manufacturers are forcing “60% themselves to ‘make-do and mend’ with old outdated equipment

“

energy savings that can be made just through nocost and low-cost energy efficiency measures and that is leaving aside equipment refitting and other process changes.”

be treated as a variable, not a fixed cost.” Adding that, “as well as saving money, the reputational benefits of being an environmental performer mean that other businesses often want to do business with you.” Jones says that with the help available from the Carbon Trust, there is really no reason not to mitigate the impact that energy and carbon cost increases will have on your business in the future.

Look to the future

“This issue should be taken with a long range view, the same as other business risks,” says Jones.

“As well as there being business risk, there is also opportunity.” While onsite operations are the primary focus of initiatives, such as The Big Business Refit, Jones suggests that it is important for businesses to also consider their supply chain and start factoring potential changes into plans for the future. He suggests firms, “look at where the pressure points may be in the future,” using the likelihood of carbon or fuel increases, the potential scarcity of certain raw materials, or how the effects of climate change, such as increased flooding or agricultural damage will impact a supplier.

“The environment is a very complex issue,” says Jones. “It requires long-term thinking because we can take a step in one direction, while there can be an unforeseen side effect that can cause a shift in another. There needs to be a commitment. We need to plan beyond the next few months or next year. We need to be thinking about three year plans, five year plans and beyond if we want to achieve the changes that need to be made. It is not going to be easy but I think we have to take a positive view. We can’t put our heads in the sand. A new economy will be borne out of this recession, and responsible, cost effective energy use will be fundamental to successfully doing business within it.” end

Have your say at www.themanufacturer.com

27

All on

Board One of a company’s greatest assets is the data held within its systems.

Enabling business users to easily access this data and empowering them to use the information delivered to make better, more informed decisions can help bring success to an organisation. However, extracting data from complex ERP systems and turning it into useful information that can drive business change, support decision making processes, and give you a better insight into how your business is performing has never been simple.

TM meets Mitsubishi’s John Quickenden to learn more.

Situation

“Mitsubishi initially implemented its SAP system in 1998,” says John Quickenden, Business Support Group, Mitsubishi Electric Europe B.V. “When the system went live, however, a number of significant problems soon became apparent. For example, because we were operating without a suite of reporting programmes written specifically for our users, we had to rely on the SAP standard reports — which were not satisfactory for the users’ requirements.”

Accordingly, Mitsubishi embarked on a programme of compiling detailed reports at its in-house facility and, says Quickenden, over the course of the following five years wrote approximately 500 bespoke SAP reports. This proved to be a particularly challenging process for all involved.

Users would provide Mitsubishi’s IT team with the specifications for a report. Once written to requirement would need to be reviewed several times by the Key User Group to gather relevant feedback and amend the reports accordingly.

28

“First and foremost, such processes were hugely time consuming for our programme technicians, taking anything from hours to days to produce, depending on the complexity of the variants of the reports” says Quickenden. “Equally, it became evident that we were simply presenting the same data in different formats and layouts, thus restricting the ability of our users to act independently and with an acceptable speed of process.

It was at this point that Mitsubishi decided to look for an alternative way of reporting from our ERP system.”

“Mitsubishi required a system which users could operate without highly technical programming experience and with the ease of use to extract and present data from our framework in the ways which most suited their requirements. We considered a number of business intelligence systems, many of which we found to be large, slow, cumbersome, and expensive. The toolkit from BOARD stood in clear opposition, given its speed, simplicity, flexibility, and ease of integration.

Indeed, BOARD represented a future-proof platform to manage our Business Intelligence and Corporate PerformanceManagement needs.”

Specialfeature Mitsubishi

The eventual purchase decision was made easier by the fact that Mitsubishi had a continuing investment with BOARD, the provider of a unique programmingfree toolkit for rapid and cost-effective development of Corporate Performance Management and Business Intelligence applications. As a result, Mitsubishi undertook three days of ‘concept’, which was carried out after Quickenden had undertaken an analysis of the 50 most frequently used reporting programmes on the company’s system.

He explains: “Having listed by frequency the objects that were reported, our results thus represented the basic data requirements for the reporting of Mitsubishi’s business units. Accordingly, the proof of concepts enabled us to locate many of the reported objects in SAP, and utilised them to load the primary data into a BOARD database — demonstrating that the system would function effectively.” Following this initial process, Mitsubishi took the project to its key user group, seeking to involve them at every stage of the implementation process and encouraging users to write their own reports.

Says Quickenden: “As testament to the agility of the BOARD toolkit, once Mitsubishi rolled out the project we are able to deliver to completion in less than three months. Moreover, arguably the system’s most tangible benefit is its ease of use, a sentiment echoed both by our staff and the external users.”

“Indeed, Mitsubishi needed to train employees on the system for less than a day, given that we had previously constructed a malleable reporting framework from which to work. As a result, users are able to simply modify the reports according to their bespoke specifications and present the data in the ways which are best suited to their user base.”

Business Benefits

Having implemented the BOARD system internally, Mitsubishi’s users have already created approximately 700 self-generated reports — and are continually finding innovative ways to utilise the system for their reporting needs. Explains Quickenden: “By way of example, we developed an in-house order and customer management function in the SAP framework called System 42, designed to enable Mitsubishi’s sales department to produce quotations for customers’ equipment and materials requirements.” When System 42 produces a quotation which is accepted by the customer, it is possible to simply press a convert button, automatically creating that order on the SAP system. Mitsubishi utilised the BOARD application as a staging database connected to System 42, merging its data with post-sales SAP information and importing the results back into the BOARD framework.

Says Quickenden: “System 42 has been instrumental in easing the organisation’s growing pains, especially with regard to the expansion of business with our Air Conditioning division. However, BOARD’s toolkit also enabled Mitsubishi to make advances which we hadn’t foreseen prior to purchasing the

system — the liberating effect it had on our credit control department being one such example.” To quantify, the company’s automotive division sells equipment to operational facilities and manufacturing warehouses across Europe, which are required to transport that equipment from the warehouse to production line three or four times a day. As a result, purchase orders are generated and sent to Mitsubishi on a daily basis, a process which was done entirely by hard copy faxes prior to acquiring BOARD — taking approximately three weeks per month for the company’s credit control team to input. Now the distributors are now able to send us all the information on a simple file, enabling the department to process a month’s worth of orders in less than a week.”

Mitsubishi’s original aim was, says Quickenden, to free the company’s departments from the restrictive merry-go-round of compiling reports which would be used for a limited period simply to be discarded for alternatives which would present the same data in marginally differing formats. “One of the most

became evident that we were “Itsimply presenting the same data in different formats and layouts, thus restricting the ability of our users to act independently and with an acceptable speed of process

“

Meeting the challenge

pleasing aspects of the implementation, however, was the degree of ‘buy in’ we received from our user base. Indeed, they are continually investigating new ways of using BOARD’s capabilities to their benefit, particularly in the fields of pre to post-sale activity and accurate forecasting.”

“Ultimately, the BOARD toolkit puts the solution in the end-users’ hands, thus alleviating the pressure on other departments within any given organisation.

This is largely attributed to the programming-free and integrated environment which Mitsubishi now enjoys, and will continue to do so going forward.”

Conclusion

Ever changing business requirements can cause your reporting processes to become reactionary.

Utilising a Business Intelligence solution enables your business users to gain insight to the knowledge they require to make informed and timely decisions.

The ability to rapidly change reports, budgets and forecasts, and furnish users with the tools they need to do this can allow your IT team to engage much more with business users and deliver real value add projects. Delivering the right information and knowledge to the right people in a timely manner, as Mitsubishi have demonstrated, can only be of value to your business. end

For more information visit www.board.com

29

Better bydesign 30

Redesigning products and corporate branding can have a profound effect on a business. In the case of JS Humidifiers, it led to over 40% increase in UK and overseas sales last year, a reduction in manufacturing costs and a more collaborative buzz between staff. Will Stirling gets the story from JS Humidifiersâ&#x20AC;&#x2122; Tony Fleming.

Design and innovation

In

2006 JS Humidifiers had a problem. The Littlehampton-based maker of humidifying equipment had a majority share in the UK market, a 25-year track record and a well respected name. Humidifiers, which maintain ambient air humidity essential in many commercial and public environments such as textile mills and warm air curtains in modern office buildings, have many applications and a global market. But competition was intense and the foreign competitors were bigger companies with marketing budgets to match their size. How could JSH crack it overseas?

In addition, as part of a broad look at the global market and market risk, including cheap competition from Eastern manufacturers, the company realised it needed to raise its game on several levels. It set out five main targets: to safeguard its home market; develop new overseas market including product innovation; new five year targets for turnover and to increase net profit to 10%; improve the environmental impact of the product range, and to target sustainable applications for product. Part of this business plan was to reassess the company’s design and brand strategy.

Designing Demand

The company contacted SEEDA, the South East England Development Agency, who advised it to join the government-funded Designing Demand’s Generate service. Designing Demand is a programme aimed at helping companies to make strategic design decisions and to set up and run design projects. Design associate James Duguid arrived, like a business angel parachuted in to liberate the company from its design torpor. The effect was immediate, says Fleming. “James helped us to clarify our design brief keeping the specification tight and became a design mentor to our own graduate designers, nurturing our designers’ talent.”

Beginning in early 2007, he identified the company’s design needs into defined objectives – covering product, packaging, company identity, function, sustainability – and disseminated the needs into timescales. The main objectives were to:

1 2

Completely redesign the range of industrial humidifiers and improve the product designs in both form and function, and create a strong corporate identity – style, shape, lines, and colour.

Use design to optimise manufacturing and quality, which would reduce costs and stock levels through commonality of components, use of sub-assemblies and maximising their 3D CAD capability.

As a manufacturer you’ve constantly got to look at the design of your products as well as manufacturing processes and material costs

3

Future-proof the products by meeting updated product legislation and becoming more sustainable — by reducing energy consumption, increased recycling and cutting down waste packaging.

The company had already brought in a young designer with a product design degree from Brighton University, Stanislav Brahir, on a 2-year government-funded Knowledge Transfer Partnership. Working with him, James mapped out a branding strategy and helped to focus the design specification for the re-designed product range, considering materials, functionality, recyclability and carbon footprint. The company looked at other, external designers but stuck with Stanislav

impact of the re-design was “The immediate. The launch of the new JetSpray range in 2007 resulted in 300 new leads

“

The humidifying equipment is effective but not much to look at. Having an aesthetically dull product should not exclude design change and improvement, however. JSH realised that its products, packaging and whole company branding had not been modified since the 1970s. The board took the plunge with a bold, bottom-to-top design and branding makeover and manufacturing process overhaul. ”Good design sells, without a doubt. If you can put well-designed product in front of a customer that’s half the battle,” says JS Humidifiers’ technical director Tony Fleming. “As a manufacturer you’ve constantly got to look at the design of your products as well as manufacturing processes and material costs.”

because he knew the company culture and there were cost advantages. “I worked with Stanislav and Matt (his boss) to guide them through projects, which is typical of Designing Demand” James says. “The objective is to assist in-house staff to achieve as much as they can, though we did use an external agency for the corporate ID resign.” Fleming says the entire redesign journey was a whole-team effort.

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Find out more about Autodesk Inventor and how it can take you beyond 3D to Digital Prototyping.

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Image courtesy of Prensa Jundiai, Brasil Autodesk, AutoCAD and Autodesk Inventor are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. All other brand names, product names or trademarks belong to their respective holders. Autodesk reserves the right to alter product offerings and specifications at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document. © 2009 Autodesk, Inc. All rights reserved.

Design and innovation

Designing Demand Designing Demand (DD) is a business support programme from the Design Council. It helps businesses discover how to become more innovative and competitive by giving managers the skills to exploit design by spotting opportunities, briefing designers and running design projects that deliver. The programme has worked with about 1,200 companies. There are three main services within the programme: Designing Demand Generate, Innovate and Immerse, depending where in the business maturity cycle the company is. While it is open to all sectors and historically manufacturing has contributed a modest part, about 60% of the companies going through DD now are manufacturers, says the Design Council’s Paul Cannon.

What difference can design make?

The impact of the re-design was immediate. The launch of the new JetSpray range in 2007 resulted in 300 new leads.

In the last year (2008-2009 tax year), the company’s UK sales increased by 44%, and its export sales by 54%. And new markets have been accessed, such as low energy cooling applications.

Manufacturing cost has been reduced by over 20%.

“Our inventory stock levels have fallen considerably through smarter operations which have helped us to strengthen our bank balance during the credit crunch,” says Tony Fleming.

Design capability

The firm is better equipped to produce a bespoke or prototype system by increased use of 3D CAD. “This has allowed us to rapid prototype ‘on screen’ and sends drawings straight to the metal work machines, reducing lead times and cost of development.”

The company’s corporate identity has been comprehensively overhauled and updated. Its brand has been strengthened, which included redesigning the company logo from a 1980s designed pixel dot logo to a new version with stronger lines.

“Applying a consistent branding strategy of lines, colour and logo presentation has given us a family of products and rationalising components, improving complexity of assembly has reduced our costs and improved our lead times,” says Fleming, “and we have also set design guidelines and a blue print for future product design.”

Design Associate James Duguid was appointed to JS Humidifiers: “Designing Demand is currently helping several manufacturers in FMCG goods, consumer sector moulded products, construction products – it’s more than 20% of the work I know of. In the last 12 months there’s been a surge of interest from manufacturers because there is a need to compete harder.”

Recent manufacturing companies that have been through Designing Demand include Gripple, Naylor Industries, Baldwin & Francis, Interior Surfaces, Neptune Outdoor Furniture and cleaning products maker Challs.

Links: www.designingdemand.org.uk/ Challs case study: www.designingdemand. org.uk/case_studies/challs

Bottom line

Turnover has increased this year by almost a £1 million, from £6.5m to £7.5m. Bottom line profit has also increased to the target 10 %, from 4% to 10% net profit.

Ancillary benefits have spun off the exercise, says Fleming. “From my point of view the difference in product and brand is dramatic and has shown us the value of properly resourced product design.

Design harnesses the power of innovation, stimulates collaboration and creates a real buzz in the business.”

Rik Prowen, operations director at JSH, endorses that view. “The impact of good design has been substantial, reinforcing visually the quality that our products have always had, resulting in greater confidence amongst our salespeople, higher sales in the UK and abroad, and – perhaps most significantly – higher margins. Good design has proven to have a direct impact on our bottom line.” end

Have your say at www.themanufacturer.com

33

Staying Lean Keeping a workforce committed, Part II In the second of a two part series, Professor Peter Hines, chairman of the Lean Enterprise Research Centre at Cardiff University and consultancy S A Partners explores how multi-site organisations can develop a durable lean approach.

As

we discussed in the first part of this article (October 2009), firms in the lean world have moved from asking questions like “where do I start?” and “who should I involve?” to more pragmatic questions such as: How long is it before the benefits start fading away?

Why do people seem to have lost their enthusiasm for Lean here?

How do you ensure continued buy-in from the workforce?

The previous article started to explore answers to these questions. We looked at two of the critical hidden or ‘below the water’ areas of Strategy & Alignment and Leadership. Here we will review the third ‘below the water’ element of Behaviour & Engagement as well as the more visible ‘above the water’ features of Processes and Technology, and Tools & Techniques.

Behaviour & Engagement

34

He notes that “(To achieve) waste elimination and continuous improvement….the organisation as a whole (needs to have) the attitude, the culture and the capabilities at all levels within the organisation to achieve continuous improvement and sustain itself in the future. It is an organisation that does not require a management initiative, a customer initiative, a shareholder initiative to improve – it comes from the desire and the will of the people inside the organisation. This requires a commitment everywhere in the organisation to improve and to eliminate those obstacles that delay, prevent or inhibit improvements.

It is management and leaders’ responsibilities to ensure that the organisation takes actions on all employees ideas and suggestions for improvement, and that good ideas for improvement are acted on quickly so that wastes can be eliminated and improvements generated. It takes a whole cultural change to make this happen. This is our desire, and our goal.”

To do this required a self propelling organisation that paid careful attention to behaviours and engagement.

Why focus on the employees? Organisational change for many people is associated with feelings of insecurity, uncertainty and anxiety, often leading to lack of buy-in and employee resistance. Getting all employees on board from the outset is crucial to sustaining Lean change. Michael Hammer, reflecting on the failures of BPR (business process reengineering), told The Wall Street Journal (Nov 26, 1996) that he and other re-engineering leaders forgot about people. “I wasn’t smart enough” he says. “I was reflecting my engineering background and was insufficiently appreciative of the human dimension. I’ve learned that’s critical.”

Examples of the necessary Lean behaviours to do this include: trust, honesty, openness, consistency, respect, reflection, observation, objectivity and listening. Wasteful behaviours include: blame, ego, distrust, cynicism, sarcasm, ambiguity, subjectivity, insincerity, self-imposed barriers and negativity. So how do we create Lean behaviours? Well, you can recruit people that exhibit Lean behaviour and then you can equip everyone with the right skills through training and development; but this is not always enough to achieve the right change in culture that is necessary to ensure that the change sticks.

Marcel, CEO of Cogent Power had a vision for the business as a self-propelling organisation. He recognised that to achieve this required a change in culture, encouraging the right attitudes and developing capabilities. His leadership helped to inspire a set of appropriate behaviours and high levels of engagement.

Would you show your family your work toilet?

How do you build an environment for sustainable Lean? It involves examining all the elements of the organisational structure with its policies, procedures,

Worldclass manufacturing

measures and rewards to see if any are acting as roadblocks and stifling progress. Changing behaviours involves changing the culture of the organisation. So let us consider culture for a moment.

Culture is like the wind. You can feel the strength of it, you can see the effects of it, but there is nothing tangible for you to describe. So we tend to think about culture as the social, moral and behavioural norms of a group or organisation, which are based on the beliefs, attitudes, values and priorities of the members.

The culture of the organisation is typically created unconsciously, based on the principles of the top management or the founders, of an organisation, and it exists where a group of people have been together long enough to have shared problems and have had the opportunity to solve them.

To make any significant organisational change, such as Lean, stick involves creating the right culture; a Lean culture. Marcel would say to employees, “Look at your environment and ask yourself these questions.

Would you be proud to show your family your workplace? Would you dare to show them the rest rooms, the toilets, the canteens?”

The upgrading of the toilet facilities at Cogent Power is symbolic; part of the visible artefacts, but it has demonstrated Marcel’s values and his respect for people. The tale has now been passed down as one of the stories that support the cultural change.

An atmosphere of inclusion

Traditionally organisations have concentrated all their efforts on the things that improve performance: productivity, profits and growth. They have undervalued the influence of their employees’ emotional attachment to the business as a driver of profitability and growth. One thing that is very clear at Cogent Power is the high level of employee engagement; at all the plants employees comment on the ‘family atmosphere’. This engagement has built up over time.

Part of the engagement is also down to the work of Peter Rose and other HR managers, in developing the atmosphere of inclusion by holding family barbeques, including families in the Lean Award prizes and including contractors in the eligibility to apply for awards. Like behavioural change, communication is the key to engagement. People need to be aware of what needs to change and why. Everyone needs to be told the same story at the same time.

To maintain progress and engagement Peter Rose used the Seven Lean Skills described by Doug Howardell as part of the recruitment and annual appraisal process. Employees are reviewed formally by their line managers and their competence in each of the seven skills is assessed. As a result the high levels of behaviour and engagement were reinforced by the management system that was put in place.

Figure 1 – the Seven Lean skills

Seven LEAN Skills 1: Customer consciousness 2: Enterprese thinking 3: Adaptaion 4: Taking initiative 5: Innovation 6: Collaboration 7: Influence Source: Doug Howardell

Above the Waterline

Above the waterline are all the visible features of a Lean implementation. Organising around key business processes and engaging in process improvement are the cornerstones of a Lean Enterprise. Applying Lean tools, technology and techniques to improve, sustain and maintain business processes is the route commonly taken by organisations attempting to enhance performance. Visit any ‘Lean’ organisation and you will see examples of process management and the application of Lean tools. Visit any ‘Real Lean’ organisation and you will still see process management and Lean tools; what you won’t see is all the effort that has been put in below the waterline; to strategy and alignment, leadership, behaviours and engagement that sustains the Lean transformation.

We will now have a look ‘above the waterline’.

Another important mechanism for engagement is training. This took place early in the Lean implementation at Cogent Power. The first session was for the senior management, over two days at the Mathern Palace Meeting in December 2003. All the senior managers and divisional directors were given an intense introduction to Lean, covering policy deployment, value stream management, crossfunctional teams and Lean tools. The second phase involved developing and training the Lean coaches.

The emphasis here was on ‘train the trainer’. The Lean coaches were equipped with the knowledge and skills to run improvement projects and train others in the Lean concepts and tools.

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World class manufacturing

Processes

Many companies applying lean never get past the shop floor, let alone the Order Fulfilment process.

‘Real lean’ companies look at all their processes over time. Two things are important when first looking at businesses processes.

Which processes are key to the core business?

How do you design and optimise key processes to deliver value to the customer, business or value stream?

Each business process comprises a number of steps, tasks or activities that convert a series of inputs into outputs. Our example shows some common processes, but you should always define and agree your own for your organisation.

Figure 2 – Key business processes Key Processes

Definition

1 Product lifecycle management

Managing customer needs for new products. Designing and developing new products, bringing them to market and retiring obsolete products.

2 Order creation

Winning new business with new or xisting customers.

3 Order fulfilment

Transforming raw materials into products that meet customer orders including taking orders, order processing, production planning, production, delivery to the customer and payment management.

4 Technology, plant Developing, managing and maintaining operating equipment, including IT and equipment management 5 Human resource management

Developing, managing and maintaining employees, including training, recruitment and retention.

6 Strategy and policy deployment

The strategic management of the company, focusing on change and management of critical success factors.

7 Supplier integration and development

Integrating suppliers into other key business processes, developing new suppliers and managing supplier relationships.

8 Continuous improvement

Continuous radical, or incremental, improvement of other key business processes.

Although much of the early focus at Cogent Power was on getting stability in the Order Fulfilment process, there was also some initial Lean work with commercial departments to standardise the Order Creation process. Mindful of the first Lean Principle, ‘Understanding value from the customer’s perspective’, Cogent Power began engaging with key customers at the outset, discussing the basic value requirements in terms of quality, cost and delivery of both products and service.

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Prof Peter Hines can be contacted at peterhines@hotmail.com or visit: http://www.linkedin.com/in/professorpeterhines, www.leanenterprise.org.uk and www.sapartners.com.

So why were both of these processes addressed?

Well, we believe that you need to focus on both waste reduction and value adding. Let’s explore further: Ask yourself the following question. What is the saving from a typical Lean Order Fulfilment improvement project, such as changing the material flow in a manufacturing cell, which reduces the requirement for people by 25%?

There are three potential responses: What we hear

What it means

Longer term result

We have saved 25% of direct labour costs as we have made a quarter of our shop floor in the cell redundant.

We have unwittingly disengaged our workforce and almost certainly removed the opportunity for future successful improvement.

Lean has become synonymous with job cuts and has created floor shop opposition.

We have saved 25% of direct labour costs from the shop floor cell as we have moved these people 'somewhere else'.

In most cases this means that there has been no real cost savings as 'somewhere else' does not imply increasing output.

Firms fail to realise real benefits from the application of Lean thinking as they focus on savings that are too often unreal.

We have reinvested the 25% of people who were freed up in new business in another area where new work has been bought into the business.

The benefit of the freed up people has been multiplied by getting them to work on new business with their 'free' labour.

A multipler effect is produced when waste removing and value creating processes work in tandem that greatly enhances the benefits and results in profitable growth.

The third systematic approach requires expert project management skills and strong cross-functional management to ensure that the additional capacity is released in time to meet the extra sales. Failure to achieve the right balance could lead to a worsening on-time delivery performance and customer satisfaction, with a consequent loss of repeat new orders. However, it is the understanding and ordering of which processes to improve that is critical for success….few firms get this right!

(The fifth element of the Lean sustainability iceberg, Technology, tools and techniques, is covered in this article online at www.themanufacturer.com)

Conclusions

Cogent Power’s journey to Lean involved addressing all elements of the Sustainable Lean Iceberg, but the progress that they made reflected local decisions and corporate policies. It was contingent on local needs but centred around one corporate vision across the group.

The key to their success was in addressing all elements of the Iceberg. A number of key lessons can be drawn fro their experience in creating a sustainable lean journey. These are summarised in the final table. end

A new dawn This autumn SayOne Media, publishers of The Manufacturer, are proud to announce the launch of The Lean Management Journal; an exclusive and pioneering new publication which aims to bring you the best and broadest consideration yet of the advances being made in an increasingly diverse and dynamic lean community.

Avoiding the insularity of silo thinking we aim to encourage a fluid, agile approach to lean thinking across industry and service sectors. Spurning codified doctrine we will explore the following issues and more through providing research, thought leadership and case studies.

The Lean Management Journal is supported by the Lean Enterprise Research Centre at Cardiff University

How does lean apply in sectors further and further away from the automotive roots?

What are the key processes that need to be leaned.

How do you consistently engage your employees in your lean journey?

How do you deal with and learn from failure?

Subscribe today!

Is the accepted wisdom of the Five Lean Principles still right or have things moved on?

Introductory offer £200 – usual rate £250 Additional benefits for subscribers will be VIP rates to forthcoming LMJ events – Launch event to be Spring 2010 with a special masterclass hosted by Norman Bodek.

How do you sustain your changes?

Submit your details online at www.leanmj.com

Thereâ&#x20AC;&#x2122;s more ways to fund manufacturing

than an overdraft For decades companies relied upon their bank overdraft facility for core funding. A coincidence of new bank regulations and the credit crisis has seen margins increase and limits reduce. Banks have worked with their customers to create other options.

The overdraft is not dead but it is not the only show in town writes Peter Brotherton, Director of Client Coverage in RBSâ&#x20AC;&#x2122;s Manufacturing and Infrastructure sector team.

The

UK bank overdraft has long been acknowledged as one of the most flexible funding tools. Once agreed it can be drawn and repaid on a revolving basis without notice to the lender.

Although companies will often use term lending for larger projects, the overdraft continues to be used by many businesses for capital expenditure as well as day to day working capital. Whilst bank capital was plentiful and margins were moderate, there was no need to amend the reliance upon overdraft lines. What has fundamentally changed?

European banks are now obliged to sign up to a new regulatory framework known as Basel 2. This accord was introduced to provide greater visibility and consistency in the level of capital required to support different types of bank lending. Going forward this now has to be a factor of the relative riskiness of any given type of facility combined with the credit quality of the borrower. Together these are known as the Loss Given Default.

In this environment certain types of customers and facilities require much higher levels of bank capital than historically. Many would argue that this was

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prudent and should have been enforced much more strongly and sooner during the excesses of the credit boom in 2005-07. Unfortunately, the overdraft facility and many of the customers which relied heavily upon it were most impacted. A drawn overdraft, for instance, now requires the same level of capital as a short to medium term loan and this has made overdrafts more expensive for banks.

Then came the credit crunch. From the summer of 2007 the capital markets became very fragile and banks stopped lending to each other as freely as they once had. This meant that the cost at which banks could borrow in the market (based off LIBOR) rapidly overtook the UK managed funding rate (or Base Rate) which dictated overdraft pricing. Historically they had been much more closely aligned. This is illustrated by the following graph which reflects that 3 month LIBOR was around 1% higher than UK Base Rate from September 2007 until December 2008 (with a spike in October during the most extreme phase of the banking crisis when it was almost 150bp) and has only very recently started to come more into line as central government funding initiatives (including Quantative Easing in the UK) have finally taken effect.

Specialfeature Royal Bank of Scotland

The net effect was that banks (raising funds at LIBOR + an ever increasing margin) were losing money on overdrafts (traditionally charged at Base Rate + a margin). With the trading prospects for businesses also deteriorating as the current recession took hold in 2008, the amount of capital required to support lending (dictated by Basel 2) increased. This became a vicious and costly circle for customers and banks alike.

The imperative has been to support credit worthy businesses caught up in this scenario and to explore other types of lending which worked better in capital terms but achieved the desired level of support.

Basel 2 for instance gives more favourable treatment for lending which is directly supported by or related to tangible assets. This has the added attraction

to lenders in difficult trading conditions as it better matches exposure to assets. Two avenues which we have seen become more popular have been:

a) Asset Backed Lending

Typically based off a companyâ&#x20AC;&#x2122;s debtor book (invoice discounting) or stock register â&#x20AC;&#x201C; and sometimes a combination of both. Technology has made this a more user friendly type of lending and it is much more widely used than many clients realise (particularly those who associate this with old style credit factoring). In RBS for instance we have seen a steady increase in the uptake of asset backed lending as the market itself has also grown.

Set out below is a graph which reflects this growth:

b) Leasing

Overall asset finance has seen a sharp reduction in volumes in the UK as businesses and individuals reduce capital expenditure but we have seen evidence of banks being more willing to consider leasing lines as a substitute for overdrafts especially where the latter is known to have been used to fund capital expenditure.

Leasing benefits from improved capital treatment under Basel 2 so enhancing its attractiveness to lenders.

Even allowing for the above, however, there can be no doubt that tighter credit markets and recessionary pressures have made it more difficult for many industries and shaken board room confidence. In response to this RBS is looking at innovative ways we can provide further support to the UK manufacturing sector. We recognise the role we have to play in providing finance to encourage businesses which have previously deferred new investment projects, because of a perceived lack of bank lending, or feel that now is the time to invest in order to gain competitive advantage as markets return.

This, coupled with better use of appropriate options such as asset backed lending and leasing should help businesses navigate around the comparatively high cost (versus the past) of UK overdrafts. The latter is not dead but is no longer the only show in town. end

Have your say at www.themanufacturer.com

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Dispute management it’s good to talk If scarce credit, curtailed insurance, cautious consumer spending, indefinite market uncertainty, slashed investment budgets and all the rest of it wasn’t quite enough, there’s something else that manufacturers might have to suffer during the credit crunch; recessions provide optimum breeding conditions for disputes, says Mark Young.

The

way in which workplace disputes are dealt with changed in April of this year, following the Dispute Resolution Review – an independent study commissioned by the then Secretary of Trade and Industry Alistair Darling. The Review recommended a host of changes to the way that ACAS (Advisory, Conciliation and Arbitration Service) – the independent and impartial nondepartmental dispute resolution service backed by the Department of Business, Innovation and Skills – conducts itself. These include changes to ACAS’s code of practice and a revision to its non-statutory guide.

The point of the changes is said to be to simplify the process of dispute management so that conflicts

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have a better chance of being dealt with internally.

Convoluted statutory procedures which were deemed to be weighted against employers have been dropped in favour of non-statutory guidance on what constitutes “fair and reasonable” action. The new code focuses heavily on mediation – a service ACAS itself can provide.

The new way had best be effective because there’s fair demand for it. ACAS says its helpline handled 100 per cent more calls in the year to March 2009 than it did in the previous year, with 10,000-15,000 individual calls coming in per week. Employee tribunals were up 18 per cent while unfair dismissal claims were up 22 per cent.

Says ACAS chairman Ed Sweeney: “The consequences (of the downturn) for many employers and workers have been clear – job insecurity, battles over pay and tensions in the workplace.”

It is certainly fair to say that many manufacturing sites will not have been blessed with the happiest of atmospheres over the last year and a half. The latest figures from EEF, the manufacturers’ organisation, covering the three months to the end of October, show four out of five UK manufacturers are now freezing pay. This has led the average settlement to remain at a historically low level of 0.3 per cent for the third consecutive month. Official figures from the office for national statistics show there were 2.63 million employee jobs in manufacturing industries in the three months to August this year, down 223,000 on a year earlier.

People skills and productivity

The best way to avoid disputes and minimise the effects of the ones that will inevitably rear their heads is to instil a certain culture within the company.

That culture, according to Keith Mizon, director of individual dispute resolution at ACAS, is one of open and honest communication.

“Communication breeds trust,” he says, “and trust breeds empathy. If employees are in tune with the company’s goals they are more productive and happier in their work. Disputes are therefore less likely to occur than in a place where employees do not know what is expected of them and what the state of play is for the business.”

Murray Meeuwis, development director at HR Insights – a subsidiary of Kingston Smith LLP – is a man of Mizon’s own ilk. Tony Blair once famously proclaimed: “education, education, education.” Just as vociferously, Meeuwis expounds: “communication, communication, communication.”

Here are a few ways to keep the conversation flowing:

Mediation

Mediation, ACAS says, is ‘morally binding but has no legal status’. It is generally supposed to be a fast and informal way of feuding parties finding a way that they can restore a functional working relationship. “A resolution that doesn’t serve either party perfectly but is one that both parties can live with is sometimes better than no resolution at all,” says Mizon.

It works by bringing in a third party to listen to both parties side of the story and then attempting to reunite them with shared interests and a common goal.

There is statutory and non-statutory mediation. The former is for when an employee tribunal is imminent.

ACAS is obliged to begin a mediation programme as a last attempt at reconciliation. The latter can take place at any point in a dispute on a voluntary basis.

A survey on the effectiveness of mediation by the Chartered Institute of Personal Development (CIPD) conducted a survey into the benefits of mediation on firms who had experience of it. Eighty-three per cent of respondents said it improved relations between staff. Sixty-three per cent said it helped to retain valuable employees, 55 per cent said it developed an organisational culture that focuses on managing and developing people, and 33 per cent said it helped to reduce sickness absence.

ACAS outlines a general five step guide for how mediation will be carried out, consisting of an initial meeting between the mediator and each party involved in the dispute separately and four meetings with both

parties present thereafter. The process is designed to allow both parties to express their true concerns and ‘shift the focus from the past to the future and begin to look for constructive solutions’. The organisation says “the beauty of mediation is that this is a process that can be introduced at any stage of a conflict” though the earlier it is brought into a dispute the more effective it is.

Some firms try to train mediators internally and often choose human resource managers for the role. The Ministry of Justice advocates this too. It says: “It’s good to have a cross-section of staff trained as mediators,

like to feel listened to. And valued “People too. Their grievance may be displaced but providing them with a route to discuss it at least shows the company is reasonable enough to discuss concerns, even should it not ultimately share them

“

So disputes are inevitable during the current economic climate then? Maybe. But the attitude of ‘prevention is better than cure’ must be adopted and there are a few simple and easy bits of housekeeping which can minimise the risk of disputes occurring and, when they do, stop an already inconvenient dispute becoming even worse – a hostile dispute that could end in tribunal.

Keith Mizon, director of individual dispute resolution, ACAS

because then you have got all levels of the department working with mediation and promoting it. If you do have a mediation involving a senior member of staff, then it can help to have a senior mediator.”

“You have to be a bit careful though,” warns Mizon.

“Both sides have to fully trust the mediator.”

Accreditations and recognised mediator registers are available and should be researched if a third party is to be appointed as go-between.

Open channels

There are infinite grounds for misconduct charges to be levelled at an employee. Only a select few though – punctuality, workmanship, work rate – are the ones that crop up the most often. These are the types of ‘offences’ which do not warrant dismissal by themselves and are also ones that could most feasibly have extenuating circumstances at their roots. It is therefore pertinent to give parties the opportunity to respond to the charges before you take precipitous action.

“It might just be that a situation can have been rectified with a little bit of understanding, like temporary flexitime for instance,” says Mizon. “Maybe this conversation will identify a need for further training so that the employee can do their job properly in future,” if you don’t have the conversation you’ll never know.”

One potential outcome of wading in with disciplinary action before checking whether an employee has a personal issue which is affecting their work is that other colleagues could revolt, should they deem one of their peers to have been dealt with unfairly. What began as a small timekeeping concern for one individual could then evolve into a mass dispute across the workplace

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People skills and productivity

Similarly, it is “sensible”, in Mizon’s view, to provide workers with a route to voice their concerns. Things like appointment based surgery sessions, regular appraisals, open group forums and employee morale surveys show workers that the company is open to feedback. This may mean a potential grievance is brought to the fore and solved before it evolves into a more difficult situation.

“People like to feel listened to,” says Mizon. “And valued too. Their grievance may be displaced but providing them with a route to discuss it at least shows the company is reasonable enough to discuss concerns, even should it not ultimately share them.”

Clarify expectations…

Companies must clearly set out what they expect of employees and just as clearly identify how they, the company, will behave in return.

Internal codes of conduct will inspire trust in employees that the company can be held to account if it does not keep its side of the agreement and can act as a safety valve for the company to justify why certain action has been taken. When the expectations are set in stone, well documented and ingrained into the company culture, you’ve got a point of reference for when it’s time to give the drunken sailor a taste of the old Captain’s Daughter.

…and clarify procedures

“Small firms often fall foul because they don’t have decent grievance procedures in place, they don’t use them or they don’t train their managers properly to implement them properly.”

Make sure that everybody knows exactly what the standards are and exactly what the process is when those standards are not met, with no ambiguity or grey areas.

“If you don’t have proper procedures in place it can be difficult to underline the problem in the first place and then determine how to address it,” says Mizon.

Keith Mizon feels it most prudent to warn smaller companies especially that they need decent procedures in place as, he says, they are disproportionately over-represented in employee tribunals. If a small firm does not have the knowledge or expertise to draw up their own procedures they should outsource the job to a private firm or get help from organisations like EEF or ACAS itself.

Don’t brush bad news under the carpet

“Constant communication is vital, even if the message is not good news,” says Murray Meeuwis.

“The effect on employees is ten times worse if they are told nothing at all rather than being informed of negative circumstances.

“Invariably what sometimes happens is leaders retreat into the office and close the door rather than stand up and face the music. But it is uncomfortable situations which require strong leadership most of all and a true leader must be able to step out of his or her comfort zone. People will make assumptions and will usual jump to the worst case scenario.

They will start focussing on other things other than getting the company back on track because they are distracted by rumour.”

Do not lose sight of longer term goals, he says.

“Talk about the better times ahead and reaffirm the vision.

“People need to connect to positivity. If they see no future they become demotivated and lose empathy for the cause. Remind people of their potential; what they can achieve; what they and the company can become together.”

Visibility

Meeuwis says the more senior people that can be seen on the shop floor the better. And as regularly as possible too, as it gives the impression that everybody is truly involved in the same process, rather than a situation where two differently coloured collars are working independently of one another.

Disputes in the workplace can be a minefield.

The best form of defence is diffusion. Communication could just be the tool that stops the bomb from going off. end

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Have your say at www.themanufacturer.com

Paul Gorell ABB Limited ABB’s 2009 ‘UK Apprentice of the Year’, Paul Gorell, joined ABB Limited’s robotics division in 2006 on an engineering apprenticeship. Four years on, the ABB engineer has successfully completed the course and the choice to study on-site has been fundamental to his success.

With

his school-life finished and a fist full of A-levels to his name, Paul Gorell was faced with the same conundrum that an increasing number of young people these days deliberate on. He wanted to continue to learn and gain an advanced skill set but he also felt ready to enter the world of working life. The traditional degree route did not appeal. Instead, Paul began to look into the engineering industries and discovered that an apprenticeship was the best approach to gain a balance of work and study in real-life engineering environments.

In 2006, Paul joined ABB’s robotics division in Milton Keynes, where he would spend the next four years balancing the practical and theory work required for an apprenticeship. During his first year, Paul studied full time with Milton Keynes College to complete a basic engineering skills course, while simultaneously studying on a two-year Business and Technology Education Council (BTEC) national certificate in electrical and electronic engineering.

Just a year later, and three years into his apprenticeship, Paul had successfully gained a BTEC national certificate and began the final stage of his apprenticeship with a Higher National Certificate (HNC) in electrical and electronic engineering.

In the final year of Paul’s apprenticeship, the time spent at college was dramatically reduced, enabling him to take up a full-time position with ABB. From this point on, Paul was able to fully immerse himself in the engineering process and the installation and commissioning of robotic systems. This role quickly gave Paul exposure to an expanded range of tasks, encompassing everything from the mechanical installation of a system through to the electrical integration of specific hardware and the programming of the robots themselves.

Throughout Paul’s apprenticeship, he has demonstrated the determination and skills pivotal to professional development within the sector. During the apprenticeship, Paul was recognised as the intercounty apprentice of the year award, while gaining his Performing Engineering Operations (PEO) qualification, BTEC national certification and HNC in electrical and electronic engineering. Paul’s latest accolade was achieved following completion of the engineering

apprenticeship, when he became ABB’s 2009 UK Apprentice of the Year.

“I’ve been so fortunate to be able to study and learn from the years of experience offered by the ABB team,” says Paul. “I’ve been given the opportunity to process my education on specific subjects, whilst gaining much valuable experience of the engineering trade with ABB. By combining the theoretical and practical sides of engineering, I’ve been able to regularly apply the knowledge gained at ABB with the practical experiences learnt from Milton Keynes College.”

CV in brief – Paul Gorell Age: 24 Employment:

September 2009 – Elegant Windows, installing double glazing September 2005 – Begins part time with ABB as an engineering apprentice February 2004 – Prior to his studies, Paul joined Hays as an operator assistant September 2003 – Appointed full-time distribution operative for Universal Music

Education to date:

2009 – Recognised as ABB’s 2009 ‘ UK Apprentice of the Year’ 2009 – Awarded BTEC national certificate in electrical and electronic engineering 2008 – Gained a HNC in electrical and electronic engineering at Milton Keynes College 2008 – Succeeded in gaining his Performing Engineering Operations (PEC) qualification 2006 – Joined Milton Keynes College and began his four year apprenticeship in engineering

Working as Engineering Technician for ABB Robotics, Paul is determined to keep climbing the career ladder. “With more experience gained over the forthcoming months, and years, I would like to see my job role improve to systems engineer, and ultimately to reach Lead Engineer status.”

Chris Withey, Managing Director of ABB UK robotics business, said ABB’s apprenticeship scheme is pivotal to the company’s future as an advance engineering firm in the new green economy. He points to Paul Borrel as a perfect example of the scheme’s success.

Says Chris: “Paul demonstrated his hunger for success and through this scheme was given the tools to identify the opportunities for a career path within a global engineering company. We were delighted to offer him a more permanent position and look forward to learning how tomorrow’s new apprentices will continue to shape the industry”. end

Have your say at www.themanufacturer.com

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Inside

Toyota

Total immersion in TPS

In the second half of this year Toyota Manufacturing UK (TMUK) opened the doors of its plant in Burnaston, Derbyshire, for a series of one-day seminars to share with manufacturers the inside track on the world’s most famous efficiency methodology. The company is proclaiming the seminars as the most in-depth insight into its business that it is has ever offered. TMUK invited The Manufacturer along for the ride. Mark Young reports.

The

day starts with an opening address by Carl Klemm MBE, deputy managing director of TMUK who provides an introduction to the company to delegates from Denmark, Ireland, Norway, the US and from across the UK. Two keynote talks follow; the first by production operations director Marvin Cooke and the second by quality assurance assistant general manger Mick Lalley. Delegates are then given a tow-train tour through one of two production line shops at the site before returning for a third keynote by human resource general manager Jim Crosbie. After lunch, a workshop of the delegate’s choosing is completed on kaizen — ‘improvement’ in Japanese —, practical problem solving or visual control. The day ends with a Q&A featuring all of the morning’s speakers.

To accurately regale the full experience of my day at Toyota would fill more space than is available, so

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for brevity’s sake, I’ll stick to simple adjectives. ‘Eye opening’ instantly springs to mind. Business theories are easily fawned over and until they are seen in practice there will always be sceptics who dismiss them as fables. I hadn’t doubted the truth behind all I had read about Toyota Production System, but I would never have imagined the extent to which it is completely ingrained into everything the company does. Even the training room we were in had a 5S checklist for end-of-session procedures.

The keynote addresses provide invaluable insights into the history and logic behind TPS and how the values developed over the last 40 years are applied to both the business of making cars and the business of nurturing people. But these insights only truly take on their weight when they are seen applied in practice, through the line tour and workshop.

People skills and productivity

How Burnaston works

The Burnaston site has two assembly lines, each currently handling around 200 cars per shift. The first makes the Auris model and operates on day shifts only, the second makes both the Auris and the Avensis simultaneously and operates day and night.

A new electric version of the Auris will be factored in from 2010. On our tour around the Auris line it was enthralling to see the principle of just-in-time in action.

Workers and robots beaver away side-by-side to ensure that every single task happens exactly when it is scheduled to, between a 7:45am to 3:48pm shift.

Automated kanbans synchronise seamlessly with the travelling chassis. All of the favourite ice cream van hits play out across the line to denote certain stages of action or calls-to-arms. If you’re not mesmerised yet just try and take in as much of the multitude of quality control sheets, best practice instruction, KPI updates and other documentation that accompanies the length of the line.

Opting for the practical problem solving workshop, I soon learned that a problem does not hold the same connotations for Toyota as it does for the rest of us.

The word ‘problem’ should probably be replaced by ‘opportunity’. The company embraces ‘problems’; it actively seeks them out. Each member of staff completes problem solving training over several months which involves identifying and implementing real improvements to processes. The company has built a standard eight-step model which is used for identifying the root cause of a problem, the ‘containment’ (its temporary solution), and the countermeasure to fix it. By this standardisation, every single member is able to feed into the improvement of the production process; everybody makes a difference. After my two hour workshop, during which I heard all the reasoning behind keeping every member of staff truly engaged, I was surprised to find myself feeling slightly melancholy that I will never begin the process myself.

Delegate views Kieran Noonan Value stream manager for medical product manufacturer Boston Scientific’s Ireland site.

“My role is to make people understand that there is a real, efficient way of manufacturing that is better than traditionally happens in the medical device manufacturing industry. So I brought a team over today to expose them to it. Watching my guys carrying out the tasks today I saw a level of excitement and engagement which I haven’t see in years and there’s now a huge level of excitement to get back to the factory and try and implement some if the initiatives. We’ve come away with thousands of ideas today; concepts that we’ve thought about previously but only seen come to life here. It’s shown us that yes, we do some things well, but there are so many more things we can do and we’ll now go back to our senior leadership team and decide which ones to go with.

I was hugely impressed with the people. We had a line tour with a demonstration of a problem solving issue and the member of staff that took it displayed a level of knowledge, passion and engagement which we haven’t experienced before. They really understand the process and exude confidence that you wouldn’t usually get in a team leader with 20 years experience.”

Teaching the truth about TPS

One of TMUK’s event organisers, Karen Bradley, explains that one of the main reasons why TMUK decided to open its doors is to give lean enthusiasts a real insight of how TPS operates today at Toyota, rather than the quasi- or modified versions of it that are taught by some consultants.

“Because of its very nature, TPS is evolving all the time,” she said. “To teach it you really have to have learned it firsthand but, even then, many of the former Toyota engineers now working for leading consultants were last employed here perhaps 10 years ago. The knowledge they are passing on is therefore not TPS, it is a shadow of TPS. We just wanted to give people a true insight of the culture as it is right now.”

I have no trepidation in labelling the TMUK factory the Disney World of manufacturing, a place where advocates are totally immersed in their environment.

I’d even offer that any quality manager visiting the former would find the experience more fascinating than would any 5-year old at the latter. My advice – Genchi Genbutsu – go and see for yourself! end

Tina Nielson Lean change agent for global apparel brand ECCO Shoes.

“Toyota is our inspiration so naturally there’s much to see, much to learn. What I was looking most forward to seeing was the production itself and seeing if it all works like how you read in the books. And it was absolutely the same, which surprised me a little. Production was quiet, even for a car factory, and everything flows according to takt time. But what most surprised me was the people and the problem solving; the fact that they actually effectively use the end-line calls. This is a something we are struggling to implement because usually it is not nice for people to say they have a problem. Overall, coming today has reinforced to me that the theories really can work in practice.”

Two more seminar days are scheduled for this year. The next one on November 26 is fully booked but there are spaces available for the final one on December 8. Call Mandy-Jayne Evans on 01332 283613 or email her at mandyjayne.evans@toyotauk.com to reserve a place.

45

Medical equipment company finds clinical IT solution for Lean operations Talley Group, makers of medical equipment, had expanded their product range and markets rapidly in recent years and needed very specific operational requirements from their IT. Talley’s Tyrone White tells TM why the business chose Microsoft Dynamics AX delivered by MS gold partner and Lean manufacturing solutions provider eBECS.

Matching

information technology to a business’ needs can be straightforward. Often though, a business has very particular needs – a big, diverse product range; a rental business that requires product tracking; or the need for the IT solution to incorporate Lean manufacturing criteria, like waste identification. The best solutions can then be narrowed down to a special few, who are not always the obvious tier one ERP vendors.

Talley Group manufactures a large range of medical equipment products for global healthcare markets from its Romsey, Hampshire base. Its core products are pressure ulcer prevention and therapy products, including dynamic alternating pressure mattresses.

The product range has expanded to include negative pressure wound therapy devices and dressings, TECcare antimicrobial fluid technology, specialist pillows and duvets and more. The product expansion has been driven by success in all healthcare markets and Talley have direct sales and service operations in the UK along with distribution partners in most European countries, and the US. The company now boasts a 50 strong product range in six geographical markets, with over 10,000 individual items rented to its two core customer markets, the NHS and private institutions like hospitals. It is now in its 55th operating year.

In early 2009 Talley, supported by Microsoft gold partner eBECS, implemented Microsoft Dynamics AX, its Lean manufacturing module, and the eBECS rental module customised to Talley’s requirements. When it went live with the Lean module on October 5, it became the world’s first company to operate AX 2009 with Lean manufacturing.

46

Tyrone White, manufacturing manager at Talley Group, has 15 years experience of Lean manufacturing and had overseen the transition of Talley in to a Lean business. The time came to consider changing its incumbent ERP system, Epicor’s Vantage, and Tyrone and his team explored the options rigorously.

They visited Convergence, a demonstration event for business IT solutions, and tested several options.

“We looked at different applications and Microsoft AX really fitted all of our functional requirements for the business. It is familiar with the office interfaces because its MS and it also offered the Lean principles that we were looking for.”

He continues: “We needed the benefit that a modern Lean system would offer the business. So finding an organisation that had experience with Lean to help us introduce a Lean system was really important. Then there was the opportunity of having AX that would give us full end-to-end visibility on the reporting side that we needed to go that little step further with our customers and improve the business.”

Other strong features of the Microsoft AX product were: Mobile-based system – eBECS-developed handheld devices.

“These scan products delivered in the field, which feeds data back into the system with the installer’s details and where he is. A real-time record of what’s going on,” says White.

A strong front end CRM system – eBECS had some CRM experience the other vendors didn’t, regarding its Lean module.

Reporting and ROI – more analysis enables customers to see more clearly what they’re paying for, especially when renting equipment.

Good usability – “Among all the packages we saw, MS seemed to have what we were looking for.”

Has freed-up time so key people can get on with business growth.

Cost was very competitive. “All ERP solutions are ferociously expensive in isolation, but factor in the measurable return on investment and MS AX came out on top.”

Why eBECS? Lean expertise

eBECS has a background in Lean manufacturing software consultancy, as well as experience in the medical equipment market. Microsoft bought Lean Enterprise for Microsoft Dynamics AX from eBECS, whereupon the partners created the Lean Centre of Excellence. “That in itself shows to us their commitment to Lean manufacturing,” says White. The Centre, a virtual resource for the Microsoft partner community, serves as an educational outreach and training facility for companies that need training on Lean capabilities within MS Dynamics AX so as to further Lean projects within their companies. This venture and eBECS’ experience of Lean manufacturing was a big draw for Talley Group. Its Lean module has fulfilled the main waste identification and removal criteria that Talley had specified.

One of the key ‘dealmaker’ factors for Talley was that eBECS was able to develop their rental module to support their specific requirements. “The Microsoft AX out-of-the-box rental module is good but it didn’t really offer us all of the functions we needed,” says White. “We did a separate project with eBECS to write a totally new AX-based rental module. We got

the opportunity to really tailor the package to exactly what we and our customers needed and eBECS then pretty much designed and built that themselves.” It was a joint venture, and the investment from Talley, while significant, was minimised because eBECS has ownership of the design architecture. This module can be adapted to future customers’ needs.

White is delighted that the Lean-enabled MS AX solution has perfectly matched the company’s needs and sees several more business benefits in the future including enhanced reporting and quicker invoicing.

“It has actually been a really interesting experience because I think it is the first time I and the company have had this much commitment from a provider to get a programme off the ground,” he says.

www.leancentreofexcellence.com

47

Accelerating Improvement Leading Your Lean Transformation LeanSigma® and the TBM logo are registered trademarks of TBM Consulting Group, Inc.

As the global leader in LeanSigma® consulting and training, TBM is ready to facilitate your lean transformation. We partner with you to drive culture change, transfer knowledge and generate immediate, hands-on improvement providing sustainable results and profitable growth.

With global operations on five continents, you get a consistent implementation across the entire enterprise.

Learn more about TBM

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We have a proven track record working with a broad range of clients from discrete to continuous process industries. We’re ready to help you accelerate improvement and build game-changing competitive advantage.

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IT in

manufacturing

Coba Plastics

achieves deep cost analysis A guide to Advanced Planning and Scheduling software

Is yours a complex operation with thousands of part numbers, synchronising labour and materials with inventory and multiple other factors that needs full cost analysis to justify your customer pricing? Antony Bourne, global industry sales director at software developer IFS, highlights the advantages of advanced planning and scheduling software over traditional MRP and other manufacturing IT solutions.

Advanced Planning and Scheduling (APS) is a planning tool that can absorb the enormous complexities of the manufacturing environment to produce optimal decisions for the business. In concept, APS was born from materials requirements planning (MRP) and constrained production scheduling processes.

However, unlike previous systems, APS simultaneously plans and schedules production based on available materials, labour and plant capacity.

this turbulent market, but in times such as these, businesses are taking time to consider the value of investment and asking themselves whether they are spending their money on the right applications and systems for the job at hand.

A report on supply chain management in Advanced Manufacturing Research, March 1998 claimed that APSâ&#x20AC;&#x2122;s impact on the manufacturing and scheduling process is â&#x20AC;&#x153;more revolutionary than evolutionary.â&#x20AC;? The author rightly claimed that the key to understanding APS was to remember that it is a new technology, not a rehash of ancient MRP programmes. He compared the impact of APS on the manufacturing world to that of the microwave oven on cooking, or the compact disc on the way we listen to music.

An APS application takes advantage of the huge technological leaps forward in data analysis and storage capacity over the last decade; it can calculate and analyse a wide range of factors to arrive at the best possible solution for the business bottom line. Factors taken into consideration might include material availability, machine and labour capacity, due dates, inventory stock limits, cost, distribution requirements and many others.

These tools are today a common feature in the manufacturing environment. In the current financial climate where time and cost efficiencies are critical for business success, the slickest, leanest operators are those who thrive. All software developers will tell you that their product can help you compete in

Synching materials, labour, inventory and more

Since its inception in the 1990s, APS has been proven to achieve phenomenal improvements to time and cost efficiencies for manufacturers, particularly those working in the most complex environments.

Despite this, APS is by no means the standalone solution for every manufacturing business. Its true value lies in its capacity to unwind the complexities

49

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IT in manufacturing

of an operating environment, effortlessly taking on decisions that would otherwise take planners days or even weeks to reach manually.

At IFS we have a heritage in providing excellent supply chain solutions for manufacturing customers.

Our customers work in a wide range of different industries, from defence to food manufacturing. One of our customers, Coba Plastics, is a good example of how APS can help manufacturers improve their processes and streamline business operations.

APS is most effective in environments where

stock and capacity are constantly changing and being updated. This could include make-to-order manufacturing, production of products that require a large number of components or manufacturing tasks and environments where frequent schedule changes are common.

Like many revolutionary software tools, APS is heralded as a miracle cure and criticised as a waste of money in equal measure. But unlike other tools, APS can reap enormous benefits for companies that take the time to consider whether the end fits the means. end

Case Study: Coba Plastics Coba Plastics specialises in manufacturing thermoplastic extrusions in accordance with QS 9000 standards, chiefly for the automotive industry. Other products include a range of standard and bespoke components used for seating, sealing systems, airbags and windscreen wiper mechanisms.

determine the best course of action to achieve the most efficient production plan whilst always delivering on time and in full. These calculations happen in the background and in fractions of a second.”

Improved quality of information

To ensure continued success as a manufacturer of plastic components, Coba Plastics implemented IFS Applications.

The system, which included APS as a module within the IFS Application product suite, helps to drive improvements at all levels, in particular by achieving greater efficiencies in financial, sales and manufacturing management.

Mark Goodwin, IT Manager at Coba Plastics, outlined some of the key benefits of the APS system.

Improving efficiency

“Coba Plastics has been using IFS Constraint Based Scheduling (APS) since 2003. During the pilot stages of implementation, APS was able to identify bottlenecks in our processes. This enabled us to reallocate ancillary equipment to overcome these bottlenecks – so even before the system actually went live it was generating production plans to make our manufacturing facility as efficient as possible.”

Managing change

“APS is used constantly throughout the day to generate a dynamic plan. It enables us to receive new or modified customer requirements and to allocate these requirements to production to see the knock-on effect.

We can then manage these effects days in advance of stumbling across them. With traditional planning methods a plan is developed on a Friday afternoon for the week ahead. By around lunchtime on Monday, that plan is no longer valid as mechanical breakdown and customer requirements have changed things. With IFS APS, minor adjustments can be made within seconds to handle these changes.”

Dealing with complexities

The APS system is used with around 3,000 part numbers each having many characteristics. The characteristics matrix consists of 14 million combinations. “The IFS APS system therefore has to run millions of calculations to

“The system allowed us to put in place a very good costing model with a breakdown showing every element of cost, even down to the amount of electricity consumed in the manufacture of the product. Using this analysis we can assess the true manufacturing cost of any particular product. We now have a clear understanding of our bottom line. And more importantly we have the information needed to justify our pricing to any customer. The improved costing capability means that Coba can now offer competitive pricing while safeguarding its profit margins.”

Shorter lead times and more proactive sales

“The software brings all the management functions together in a single integrated system that enables Coba staff to be more proactive in dealing with availability and supply issues. With real-time production data available the sales team can quote accurate lead times, and customers will be able to track their orders throughout the production process. And the master scheduling component will enable us to reduce our stockholding significantly, while also satisfying a larger proportion of repeat orders ex-stock.”

Conclusion

Leveraging the planner’s knowledge APS makes use of responsive decision-support tools. This is a departure from traditional tools like MRP which use a step-by-step procedure for material allocation and production capacity and require exceptions to many requirements or rules to be inputted manually.

APS is most effective in environments where stock and capacity are constantly changing and being updated. This could include make-to-order manufacturing, production of products that require a large number of components or manufacturing tasks and environments where frequent schedule changes are common.

Like many revolutionary software tools, APS is heralded as a miracle cure and criticised as a waste of money in equal measure. But unlike other tools, APS can reap enormous benefits for companies that take the time to consider whether the end fits the means.

Have your say at www.themanufacturer.com

51

Full business insight: how a hub and spoke approach keeps IT wheels spinning Alexander Pond at Avanade, explains how Microsoft Dynamics AX can extend unified ERP to offices around the world, increasing visibility and control while decreasing costs.

The problem: integrating IT in large manufacturing organisations

Whether your organisation has grown organically or through acquisition, the chances are that over time, different offices are using different technology for Enterprise Resource Planning (ERP). Many manufacturers have made large investments in SAP or Oracle, but as belts have been tightened during the recession, the budget simply doesn’t exist to roll out full implementations to smaller offices or plants to have one view of your company – even if there is a mandate from the top to do so.

Organisations today need visibility of what subsidiaries/plants or local small offices are doing in order to make the right strategic decisions. So if your strategy is to move towards a fully integrated ERP you can be faced with a complex problem. How do you ensure offices are working together to make the business more efficient when you don’t have the budget or local IT expertise to implement one of the market’s megalithic solutions?

The technology: introducing Microsoft Dynamics AX

The answer might lie not in your SAP or Oracle investment, but from your Microsoft estate. Users are already familiar with the way Microsoft applications work, and IT knows how to run SQL servers and other backend systems. So if you could have a Microsoft-based solution that’s fully integrated with your ERP system, users across the company could easily begin using ERP, inputting data necessary for cross-company reporting and analysis and in return receiving vital data for local decision-making.

With the arrival of Microsoft® Dynamics™ AX, this concept has become a reality. Microsoft Dynamics AX is a multi-language, multi-currency ERP solution with core strengths in manufacturing. It’s an excellent all-in-one solution, enabling small, mid-sized and large enterprise companies across the globe to gather and share the information they need for better business decisionmaking – and ultimately, for competitive advantage.

While AX can be used as a stand-alone ERP system, it is also an excellent team solution with systems such as SAP or Oracle in circumstances where one

52

consolidated solution is not practical. For example, AX can be integrated as a departmental “spoke” to extend an existing enterprise “hub” system – a central ERP infrastructure that has already received massive investment in time, money and skills. These existing systems are often difficult, time-consuming and expensive to customise or extend, or might simply be out of capacity.

Microsoft AX in action: Fresenius Medical Care

Fresenius Medical Care (FME) is the world’s largest provider of medical products and services for people with chronic kidney failure. FME has continued to grow its operations in EMEA and Latin America by acquiring sales offices and clinics throughout the region. As a result, FME EMEA inherited legacy IT systems and disparate ERP solutions.

FME selected Dynamics AX because it offered lower maintenance costs, greater ease of use than the complex SAP system, and better integration with the current ERP environment. The solution can be implemented within a short project time, and as a result, the implementation costs are significantly less than that of a comparable SAP system within FME. The new ERP solution leads to significant time saving in reporting by streamlining business processes.

Prior to implementing AX, it was difficult for individual companies to extract and share financial data with regional management at the head office in Germany. The regional management team had very limited visibility into current inventory and distribution levels, and the related financial picture.

The solution had to fit the size of its sales subsidiaries – around 15 to 20 users – but would scale easily to accommodate future growth and the outfitting of offices acquired in the future. It also needed to be easy to implement, affordable, adaptable, and able to provide multicurrency and multilingual capabilities.

Efficient data sharing and sales processes were also required to provide a more consistent service delivery across all operations.

The big challenge was to find a solution that could be implemented in EMEA and also in Latin America. The solution also had to help FME’s subsidiaries improve

their financial reporting to the headquarters according to US-GAAP (US Generally Accepted Accounting Principles) regulations. Finally, the solution needed to work with the ERP system (SAP/R3) used at FME’s European headquarters.

Avanade recommended that, in order to retain a decentralised business model where the subsidiaries make autonomous decisions, FME needed to fully integrate AX into its logistic and financial flow. AX also enables communication with the headquarters running SAP. Microsoft AX was also chosen because it offered a user-friendly interface, impressive scalability for processes and users, better functionality out of the box, and bilingual and multicurrency support. FME also recognised that the total cost of ownership (TCO) of AX is much lower than SAP. Avanade used AX to create a standardised template with pre-defined business processes that correlated with FME’s needs. Once this template was built, FME and Avanade could quickly implement AX across several of its subsidiaries, without further customisation.

FME has applied a hub-and-spoke implementation model, with the central sales information system and product replenishment system at HQ acting as the hub and Microsoft AX in the subsidiaries as the spokes.

The hub and spokes are currently integrated using a file transfer protocol (FTP) interface, through which management at headquarters or local subsidiaries can share information about orders and goods. In addition, regional management is always aware of local sales and their development, in terms of quantities and key performance indicators (KPIs).

The key benefits for FME are:

1.

Reduced total cost of ownership: FME spent one euro on Microsoft AX, it would have had to spend between a minimum of 2 euros on SAP/R3 to get the same functionality, when considering all the hardware, maintenance and customisation costs

2.

Simple implementation for streamlined business: having created the template, the roll out to new countries or offices coming on board is extremely easy, and upgrades are also much more straightforward

3.

Improved time to report: pre-defined reporting processes in AX have dramatically reduced the amount of time required to carry out financial reporting, and support FME in meeting its US-GAAP reporting regulations

4.

Enhanced ease of use: as employees were already familiar with running processes in a Microsoft environment, the new solutions was quickly embraced by employees, who found it easier to create reports

5.

Cut duplication of manual work: increased automation reduced the manual workload of its employees and removed incidents of work duplication. With a streamlined order process, FME can track orders from the time of entry through to completion. As a result, the company’s finances have been transformed.

6.

Optimise collaboration across all groups and boundaries—help establish optimal

Hub and spoke: the definition

Hub and spoke is defined as a business process that is shared between a central managing “hub” and departmental or business unit “spokes”. The hub and spoke run their own software implementation, within a single company or corporation.

About Avanade

Avanade provides business technology services that connect insight, innovation and expertise in Microsoft technologies to help customers realise results. Avanade’s services and solutions help improve performance, productivity and sales for organisations in all industries. The company applies Microsoft expertise from its global network of consultants, drawing on the right mix of onshore, offshore and nearshore skills, which together are designed to help deliver results faster, at lower cost and with less risk. Avanade, which is majority owned by Accenture, was founded in 2000 by Accenture and Microsoft Corporation and serves customers in more than 20 countries worldwide with more than 8,600 professionals. Additional information can be found at www.avanade.com.

For more information contact: Nicole Forsbrey T. +44 (0)20 7025 1172 E. Nicole.forsbrey@avanade.com

www.avanade.com 53

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IT in

manufacturing

Synchronising your assets The challenges of human planning and scheduling The phrase “our most important asset is our people” has become something of a worn cliché, a sign hung on walls in offices and production facilities to remind staff of their ‘value’ in increasingly automated manufacturing businesses. For some manufacturing companies, however, human operator skills are not only appreciated but are vital to the successful creation of a specific product or task and the overall success of the business.

Chris Pope reports.

However,

the very skills and flexibility which enables an experienced machine setter to analyse the precise set of conditions to correctly set up a complex machine operation also creates an operating window of considerable variability in time — that task may take a range of times to complete. Then add the fact that employees don’t work a 24/7 week and they fall ill, go to college and take holidays, and it is easy to see why people can be a difficult asset for many manufacturing IT systems to deal with, especially for planning and scheduling.

Planning headache

A case in point would be Mode Lighting, makers of lighting control systems, transformers and LED systems and part of the TCL Group. Here, according to general manager Ian Hodgson, success relies “very much on the dedication, accuracy and skill of our people due to the labour intensive nature of much of our production.” With offices and manufacturing facilities in the UK and associated companies in Asia, Mode Lighting manufacture is split 80/20 between in-house manufacture of Mode product and subcontracted product and prides itself on its service and design capabilities as well as quality. Achieving the high quality is complicated by production, which begins in many different locations, but more than

55

IT in manufacturing

The system successfully went live in July 2008. The new found visibility delivered had what Hodgson describes as a profound transformational effect on the company, especially in its use of its all-important human resources. As a result, staff utilisation levels have increased from a guestimate of 60% to over 82% which in turn has enabled the company to cope with the fluctuating levels of demand in today’s economic climate. The ultimate beneficiary is the customer.

Hodgson is rightfully proud that that the quality of customer service has improved, with On Time and In Full delivery dates now being 85% and with plans in place to drive this even further.

Matching skills with machine resources

anything by a variety of products that require different skillsets at different stages. Mode Lighting’s personnel have a diversity of skillsets as well as a wide variety of working practices, all of which create a substantial planning and scheduling challenge. So much so that the monthly production generated by complex, manually completed spreadsheets was described as “educated guesswork” by Craig Hastings, the company’s planning manager.

The resulting lack of visibility had a direct bearing on the quality of customer service levels due to manufacturing’s inability to keep to its customer delivery dates. While noting that the means to properly monitor ‘On Time and In Full’ delivery statistics didn’t even exist, Hastings guesses that complete and ontime deliveries were as low as 50%. The company had already begun looking at computerised planning and scheduling solutions, as well as ERP replacements for the company’s existing Fourth Shift ERP system.

The search had been less than positive as solutions were inevitably too expensive, would create significant disruption to the business and still not deliver the powerful planning and scheduling functionality required.

Scheduling by human resource

After seeing a working proof of concept of the Preactor production planning and scheduling system using live data by Preactor reseller Adrian Birt of Planning Board, Mode Lighting decided that this was the way ahead. Following a decision to invest in Preactor in February 2008, Hastings spent a month working with the planning team distilling all his unique planning and routing information into a comprehensive spreadsheet.

A key aspect here was programming in the 15 different calendar permutations that cover every worker in the company and adding this to the other planning information. Hastings says: “Much of our potential to optimise our human resources rests on the accuracy of the data we use, concerning how long every action takes. Because we schedule by human resource, this meant accurately measuring how long each person takes on every task and basing routing times from this.”

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Have your say at www.themanufacturer.com

It is a similar situation at Preformtools, a leading solutions provider for companies requiring very high quality tools and components in the medical, high pressure fuel and hydraulics sectors. While technically a low volume engineering company, being 100% Make to Order means that Preformtools has to deal with anything from single process jobs, one-off design and manufacture projects, as well as batches in excess of 15,000 which may form part of an ongoing order spread over several years.

In terms of machine resources, the specialist nature of Preformtools’ processes can often result in set-up times in excess of a day for an operation that may only last ten minutes. The greatest challenge lies in matching the required level of skill with the process and machine resource. Some machine resources require different skill levels depending on the nature of the work and often a resource requires one skill level to set up and a different one to operate. Before investing in Preactor, the company had relied on a manufacturing IT solution called Paragon (Job Shop) which had little ability to deal with the availability of the appropriately skilled personnel.

After attending a Preactor workshop, production controller Alan Roden was put in touch with Preactor Reseller Kudos Solutions which started working with Preformtools on the implementation in late 2007.

After a brief period of parallel running, Preformtools went fully live with Preactor in January 2008. From the outset the new system consistently delivered reliable and accurate plans which made it possible to identify the true identity of where many of the company’s problems actually stemmed from. Preactor also now provides much improved visibility about the state of production on any job, which allows for important fine-tuning and optimising of the company’s human resources. Instead of a highly skilled operative waiting unnecessarily for a process to be completed in order for them to begin the next task that requires their skill level, they can be deployed on a different process during this time. Consequently tasks that might literally have taken an entire day to schedule given the complexity of processes involved can be scheduled in under 15 minutes.

These examples suggest that if people really are your greatest asset, it pays to have in place the right manufacturing IT to help get the best out of them. end

IT in manufacturing

ITnews...

PLM

Siemens PLM Software purchases Rulestream engineer to order software Siemens PLM Software announced the purchase of the Rulestream software technology and brand assets, an engineer-toorder (ETO) software application for streamlining the business processes associated with custombuilt products.

ETO business processes are employed by a large and growing number of manufacturing industry segments, including power generation, HVAC, fluid flow technologies, heavy equipment, machinery, and the automotive and aerospace supply base.

Siemens will offer the solution to its customers under the Rulestream brand name, assuming full responsibility for technical development and support. Through ongoing software enhancements, the company also plans to tightly integrate Rulestream with NX software, its digital product development offering, and Teamcenter software, its digital lifecycle management portfolio.

Said Chuck Grindstaff, executive vice president of products and chief technology officer of Siemens PLM Software: “The Rulestream

ERP

technology’s ability to assist in simultaneously increasing revenues and lowering operating expenses makes it a compelling solution for the marketplace. As the newest member of our product family, it will serve as an ideal complement to our comprehensive suite of product development and lifecycle offerings.”

CAD

Electro-Mechanical company selects Infor for ERP

Autodesk expands options for Mac users

Infor announced that Grupo BTM, a company that manufactures and assembles switchboards and low and medium voltage electrical panels, has selected Infor ERP VISUAL to gain better visibility of transactions across the enterprise.

Autodesk announced the signing of an agreement to make Parallels Desktop for Mac Autodesk’s preferred Mac virtualisation software.

The deal between Infor and BTM was closed in June 2009, with the ERP solution expected to be implemented in 4 to 6 months. BTM has a revenue of R$ 50 million per year (approx U$D 26 M) and will invest approximately R$ 167,000 during the first year (approx U$D 90,000) including licenses and services.

“Each of BTM’s products has its own engineering process, which varies according to the characteristics of each project.

We needed a robust ERP solution that could support our complex customised production, and the other solutions we evaluated were more focused on the finance and administration operations, and not on the manufacturing process. ERP VISUAL offers us an integrated approach to all our core manufacturing requirements,” says Wallace Vidal, IT manager, Grupo BTM.

Autodesk will now support use of AutoCAD software; AutoCAD LT software; Autodesk Inventor Professional software; Autodesk 3ds Max software; Autodesk 3ds Max Design software; and the Autodesk Revit software platform for building information modelling (BIM) on Mac OS X via Parallels Desktop.

Said Chris Bradshaw, Autodesk chief marketing officer. “We are pleased to welcome Parallels as a partner and Parallels Desktop as our preferred Mac virtualisation software. This is the latest step in Autodesk’s ongoing efforts to support our customers on the Mac, who will now be able to use some of our most popular 2D and 3D design, engineering, and entertainment software alongside Mac OS X, in addition to the five native Mac applications we currently offer.”

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Rapid rollout on a global scale Employing over 2000 people, AMCOL International is a leading manufacturer of value-added, specialty minerals and related products. With operations ranging from Minerals & Materials to Environmental products and from Oilfield Services to Transportation, their wide portfolio of products and services includes detergents, pet products and building supplies.

Established in 1927, and now operating out of Asia, Australia, Europe and North America, AMCOL International has successfully grown to over 60 sales and manufacturing sites across 25 countries around the world.

Challenge

AMCOL’s business challenge was its rapid growth through the acquisition of complimentary companies.

This proved to be a winning strategy in terms of growing revenue and expanding footprint across the world, but it left the organisation in a situation where each country was running different systems and processes.

Specifically, AMCOL was running numerous different finance applications and many other operational systems across the business. As well as the escalating support and maintenance costs and the time taken to do any consolidated reporting, there was also the concern of non compliance with the Sabanes-Oxley Act of 2002.

AMCOL’s factories needed to ensure raw materials used during the manufacturing process could be lot tracked, so their origin could be traced should there be a problem with the final product. This lot tracking is the responsibility of the Quality Assurance team but numerous legacy systems meant it was a very time consuming and manual process.

Radical changes to AMCOL’s business systems were needed to ensure management information was available, easily consolidated and competitive advantage fully realised.

The Solution

The scale of AMCOL is large, with many countries to consider. They needed a common platform across the world to share resources and experiences.

AMCOL wanted to operate in many different countries embracing their different cultures and languages, and encouraging the entrepreneurial spirit that came with the acquisition of smaller companies. At the same time AMCOL wanted to introduce standard procedures

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and processes. “We needed to bring our different companies together under one system to ensure we remained competitive, maximising the opportunity of being a multinational company,” explains Jim Butz, AMCOL’s global IT Director AMCOL recognised they needed to replace their many disparate systems and processes with one ERP application including an agreed set of uniform processes for each country. Butz goes on to say, “In the past, we have had a dozen different ERP systems and different accounts. The key is to standardise and expedite month end closing and consolidation.”

Microsoft Dynamics NAV was selected, as AMCOL needed a solution that could be quickly implemented and adopted by any new company acquisition.

“Dynamics NAV was rich in functionality but flexible enough to adapt to AMCOL’s changing business needs,” says Butz. The product had the backbone of support from Microsoft, and this gave AMCOL the confidence of a robust solution. “Easy integration with other Microsoft products, such as Microsoft SharePoint, Microsoft Exchange and Microsoft CRM was a major consideration,” continues Butz Microsoft Dynamics NAV also supported AMCOL’s multi-country, multi-currency and multi-language requirements. This was essential to their business, and the familiar Microsoft look and feel made user adoption across the business easier.

AMCOL selected Tectura, as they needed a partner who could support them on their rollout from Europe, through to Asia Pacific and on to North America.

“Being a global player as well as a Microsoft Gold partner was essential,” highlights Butz.

From the outset, AMCOL and Tectura’s project teams worked together to agree a plan. AMCOL’s existing processes were modelled to establish any possible gaps within Microsoft Dynamics NAV with Tectura providing advice and guidance on configuration where absolutely necessary. Tectura designed and configured Microsoft Dynamics NAV to fit AMCOL’s requirements and trained AMCOL staff. “The Tectura Solution Framework was used to ensure our project was planned, managed and implemented on time, with minimal disruption to AMCOL’s business operations,” explains Butz.

AMCOL now has a core Dynamics NAV instance, and this is used as a starting point for each country. Any local regulatory changes are added on top of this. “We let the local team manage the implementation and take ownership. We only get involved if we see something needs to be addressed,” explains Butz. All the different regions now have support agreements in place, providing a Dynamics NAV helpdesk.

Tectura has a good understanding of the AMCOL business. With global Project Management in place,

BUSINESS PROFILE:

An international manufacturer of speciality minerals

BUSINESS CHALLENGE:

Successful growth across 25 countries Each country was running different systems and processes Escalating support and maintenance costs Consolidated reporting very time consuming Concerns over non compliance

SOLUTION

Microsoft Dynamics NAV

BENEFITS:

Introduced standard procedures and processes Minimal localisation of the product, limited only to local statutory requirements Simplified operational support and maintenance cost reduction Auditing is now more efficient as there’s only one system Compliance with Sarbanes Oxley Act of 2002.

the processes are known and the issues addressed head on. The global steering committee has regular meetings to discuss the rollout, deciding whether changes happen at a local or global level. “I’m confident that if we need something escalated, there is room to make that happen effectively,” continues Butz.

Tectura has also implemented procedures and policies to address version control and ensure all the different installations remain synchronised. It is a positive relationship providing a solid process.

By standardising the accounting structure it is now possible to do cost analysis, financial consolidation and reporting at the summary and account levels.

Auditing is now more efficient as there’s only one system and the same business processes are used in each country. The organisation is confident it now complies with the Sarbanes Oxley Act of 2002.

AMCOL now has the framework in place to analyse business results, and identify opportunities to improve operational performance and monitor the organisations key performance indicators.

Summary

Both AMCOL and Tectura are proud of the successful roll out of the new system with uniform processes to twenty two locations in nine different languages with no major disruption to the business.

AMCOL can now implement Microsoft Dynamics NAV in any new location within four months of the acquisition. “We have comfort and confidence that we can implement an ERP system fairly quickly and mean it,” highlights Butz. AMCOL has the standards in place, and is happy with the direction and support Tectura’s providing.

About Tectura: “We needed to bring our different companies together under one system to ensure we remained competitive, maximising the opportunity of being a multinational company.”

Jim Butz, AMCOL’s global IT Director

The benefits

AMCOL was determined to adapt their business processes as far as possible to work within the standard functionality of Dynamics NAV. The result is that AMCOL’s solution is 85% Dynamics NAV “vanilla” product with only 15% development. This has been rolled out to AMCOL’s sales and manufacturing operations in fourteen countries.

The organisation is now experiencing the benefits of a staged global roll-out. There’s been minimal localisation of the product, limited only to local statutory requirements. Butz goes on to say, “The core solution has been enhanced in a controlled manner.

All work is approved by the business and by Tectura.

Now when we talk about financing and systems, everyone around the globe will be on the same page, once North America is implemented.”

Across the world, AMCOL significantly saves time and effort adding newly acquired business units to the organisation. Butz continues, “The complexities of supporting the operations critical systems have been simplified and the associated maintenance costs reduced.”

“In the past, we have had a dozen different ERP systems and different accounts. The key is to standardise and expedite month end closing and consolidation.”

Jim Butz, AMCOL’s global IT Director

“The Tectura Solution Framework was used to ensure our project was planned, managed and implemented on time, with minimal disruption to AMCOL’s business operations.”

Jim Butz, AMCOL’s global IT Director

“The complexities of supporting the operations critical systems have been simplified and the associated maintenance costs reduced.”

Jim Butz, AMCOL’s global IT Director

About Microsoft: “Dynamics NAV was rich in functionality but flexible enough to adapt to AMCOL’s changing business needs.”

Jim Butz, AMCOL’s global IT Director

“Easy integration with other Microsoft products, such as Microsoft SharePoint, Microsoft Exchange and Microsoft CRM was a major consideration.”

Jim Butz, AMCOL’s global IT Director

www.tectura.co.uk

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IT in manufacturing

ITnews...

Business intelligence

Mobile telephony

SAP and HP Help customers attain business intelligence benefits SAP AG and HP announced an agreement through which the companies will integrate the SAP NetWeaver Business Warehouse (SAP NetWeaver BW) component and the HP Neoview enterprise data warehouse platform.

The integration of SAP NetWeaver BW and HP Neoview is designed to address the challenges associated with the continuous distribution and growth of data volumes while obtaining increased returns on existing BI investments.

Accordingly, the HP Neoview platform’s capability is complemented by SAP NetWeaver BW and highperformance SAP NetWeaver Business Warehouse Accelerator (SAP NetWeaver BW Accelerator) software for the data warehouse layer, as well as by software from the SAP BusinessObjects portfolio, which act as the BI front-end tools to provide high-speed analysis of data.

“With broader visibility across their business networks, companies can gain the insight needed to act decisively in today’s global economy,” said John Schwarz, member of the Executive Board, SAP AG. “Working together, SAP and HP are enabling customers to achieve visibility by delivering integrated solutions that offer increased scalability and greater flexibility for any data environment.”

Saint-Gobain Glass deploys private mobile network supplied by TeleWare Saint-Gobain Glass UK has installed a private mobile network using DECT handsets, expanding the PMN coverage to nearly 100% of its Selby, Yorkshire site.

The site extends from the furnace through to the float line, laminating and coating lines as well as offices and extensive warehousing. Effective communication services on-site are seen as essential to maintain health and safety standards.

A PMN was installed as part of a voice services replacement programme delivered by Saint-Gobain’s telephony supplier, Central Telecom. DECT handsets have been replaced by standard ruggedized mobile phone handsets.

The PMN installation integrates with the Saint-Gobain PBX, enabling calls to external destinations to be made from a mobile at the company’s standard landline tariff while internal calls incur no call charges. The solution was configured so that incoming calls ring at the employee’s desk phone and mobile concurrently.

Coverage has increased from 50%-60% with the previous DECT handsets to almost 100% coverage of the site. This has been achieved using just eight base transceiver Station units compared to the 17 base stations required for the previous installation.

ITNIBS Xtrac continues winning streak with Epicor Epicor Software Corporation announced that Xtrac has implemented and gone live with the Epicor ERP solution.

Xtrac provides a unique blend of design, engineering and manufacturing to motorsport teams in Formula One, World Rally, and Indy Racing League. As part of their continuous improvement policy the company decided to update their ERP system as the existing solution had reached its ceiling for further developments.

Said Ross Brumwell, implementation project manager for Xtrac: “We chose Epicor not only because of the system functionality and the company’s pedigree, but because they are a Microsoft Gold Certified Partner. This assured us that our solution would be built on the latest technology and able to communicate with some of the other systems we run alongside such as our Unigraphics CAD software.”

Gemba help Gripple triumph at Best Factory Awards One of Gemba Solutions’ long-term customers, Gripple, has triumphed at the recent Best Factory Awards, winning several accolades, including Best Small Business and Best Engineering Plant.

Gemba Solutions has been working with Gripple since 2005, and has supplied them with software and services to support their success in improving production efficiency.

“Using Gemba’s OEE IMPACT, with its automated data collection, enables us to rapidly identify key production bottlenecks and take action to remove them. This has resulted in a 20% improvement in OEE for the company,” says Gripple’s director of engineering, John Joyce.

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Customers and Shareholders Benefit as Global Manufacturer Deploys Management Solution Global manufacturer Sevcon needed to replace ageing and disparate IT systems running at its five international sites. A lack of integration meant that business managers were unable to get an accurate, up-to-date view of the company. Sevcon worked with Microsoft® Gold Certified Partner Columbus IT to deploy Microsoft Dynamics™ AX business management software, supported by the Microsoft server infrastructure. The new solution is easily customised to meet manufacturing needs, can grow with the business, and offers flexibility at Sevcon sites in different countries.

E

mployees can connect to the network and use one single source of business information no matter their location. Customers and shareholders are getting greater value from a system that both supports and adapts to business needs.

Situation Sevcon designs, manufactures, and markets electric motor control systems. Since its inception in 1961 in the United Kingdom (U.K.), Sevcon has been at the forefront of electric vehicle technology. The company’s success has resulted in expansion to France, the United States (U.S.), Japan, and Korea where it has manufacturing and sales facilities.

But despite its success, the organisation’s staggered expansion created new challenges.

Each Sevcon location used different IT solutions, from Novell and UNIX, to the Microsoft® Windows NT® operating system.

The incompatibility of these systems meant that information had to be transferred from one system to another manually. Simple data sharing among employees across different sites was time consuming and error prone and, as a result, critical business information was slow to be relayed across the enterprise.

Darren Errington, Management and Information Systems Manager, Sevcon, says: “Separate systems often resulted in duplication of data and identical information being presented differently at each site, causing confusion among employees. Even when discussing the same project or item, what they could see on screen could differ significantly.”

A lack of visibility of data meant that senior managers had to manually calculate accounts information, sales figures, and inventory and stock levels. Financial reporting across the business was slow, and the inconsistent nature of charts of accounts forced the company’s technical team to develop a complex financial reporting solution.

But the business systems Sevcon used were not flexible enough to adapt to market changes, effectively ruling out major upgrades. To improve its business processes and maximise efficiency, the group required a business management solution with strong reporting features, so users could extract information easily. Not only would this

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improve the day-to-day operations of employees, but it would also support efficient inter-company trading to create a leaner stock control process and improve customer service.

Errington says: “We saw that our systems were preventing us from improving, developing, and increasing the size of our organisation.

Sevcon continually explores new technologies to benefit customers.

Now we needed a new technology solution for clearer, global visibility of information for employees.”

Solution Alleviating stockholder concerns was a priority for Sevcon. It is a public company that trades on the American Stock Exchange, and needs to assure investors that the correct processes are adhered to and are supported by reliable systems. To allay any concerns, the company independently researched 40 management systems, including Sage, Scala, and Microsoft Dynamics™ technology.

Sevcon employed a team of consultants who interviewed users to understand their needs and developed a shortlist, paying particular attention to functionality, scalability, and cost.

Microsoft Dynamics AX was chosen as the most suitable solution.

Errington says: “Microsoft Dynamics AX was the only solution that gave us a single view of all data, held on a single database. It helps to connect our employees, processes and business information no matter where they are located around the globe.” Sevcon chose to work with Microsoft Gold Certified Partner Columbus IT because of its experience in Microsoft Dynamics AX solutions and strong presence in the U.K., U.S., and France. Errington says: “Columbus IT added a lot of value to this solution and worked closely with us throughout the process, delivering training, resources, and consultancy advice.”

Microsoft Dynamics AX provides Sevcon with a centralised solution that automates accounting, manufacturing, sales, and stock management processes, and provides clear, up-to-date information at any time to any user across the enterprise. Keen to get the most from its new software investment, the technical team at Sevcon invested in the Microsoft stack of integrated technologies.

Errington says: “We now have one database located at our headquarters in the U.K., and have centralised our system and infrastructure. All five sites run Microsoft Dynamics AX and, as a result, we can operate efficiently as one organisation regardless of the distance between our offices.”

Benefits Since implementing Microsoft Dynamics AX, Sevcon has gained clearer visibility across its business worldwide. The solution improves inter-company trade and stock control and, as a direct result of improved business efficiencies, customers benefit from a faster, more responsive service.

Employees Gain Greater Business Visibility Across Multiple Sites Sevcon now hosts all business information on one, accessible system. The modern, graphical user interface makes viewing detailed information far easier. Andy Turnbull, Production Supervisor, Sevcon, says: “Navigation is simple. Compared to our previous system where you could only have one screen open at a time, this solution offers a vast improvement. I can drill into the information and compare data side by side without having to leave my main area of focus.”

Senior managers and decision makers gain complete visibility of the business across departments, teams, and international locations. Matt Boyle, President and Chief Executive Officer, Sevcon, says: “I now have a consistent overview of our global business on one screen. With a click of the mouse, I can switch between subsidiaries and compare real-time data in seconds. This is a huge improvement that adds significant value to the strategic decision making process.”

Easy Customization Delivers a Low Total Cost of Ownership With development and system maintenance time significantly reduced, the organization has already benefited from low total cost of ownership.

“With Microsoft Dynamics AX, we have the development framework we need to extend the technology’s functionality and customize it to meet specific manufacturing needs without disrupting day-to-day activities,” says Errington. “The powerful development environment has let us rapidly build our own Service Returns, Engineering Control, and Maintenance modules.

Microsoft Dynamics AX is also so adaptable and scalable that it is already helping us to support our commitment of leading the field, and improve customer service, product quality, and shareholder value.”

Accurate Financial Reporting Complies with Regulations and Cuts Audit Costs Regulatory and compliance legislation, such as the Sarbanes-Oxley Act, creates additional requirements for transparency and control across businesses. Sarbanes-Oxley enforces internal accounting controls, stating that all business records, including electronic records and electronic messages, must be saved for five years.

Errington says: “For a company of our size, this could have turned into a massive expense. With so many different business systems, the audit fees to make us compliant would have been huge.” Creating and maintaining corporate records cost-effectively is easy with Microsoft Dynamics AX. The standardised processes and reporting features mean that Sevcon can introduce consistency of financial reports and automate record keeping across the entire group, reducing further expense.

Greater Control Results in Leaner Stock Line Sales employees can clearly see the status of products in the supply chain and new orders placed by contractors in real time, making it easier to assess stock levels or predict market trends.

Errington says: “A user’s screen can be switched to an operations company in another country so the user can see what purchases have been made to satisfy customer demand. This is another step forward for us. We have been able to significantly reduce the amount of stock we hold, and can now distribute the stock much more efficiently.”

“Previously, our manufacturing resource planning/material requirements planning process would take six hours. Now, it only takes 20 minutes due to easier user interfaces, navigation, and data entry.”

“There is a massive feel of assurance in dealing with Microsoft.

You know that the company isn’t going to disappear tomorrow, and the technology is only going to improve. That gives us a great deal of confidence.”

One Complete View of International Operations The distributed nature of the business means that Sevcon has a real need for country-specific features. Multi-language and multicurrency functionality help ensure information complies with local legal and accounting standards. Similarly, costs and prices can be converted to local currency values at the click of a mouse.

“Our users in France can access the central system and see the information presented on their screens in French.

Our users in the U.S. and the U.K. see the same information, but presented in a way that suits them,” says Errington. “Microsoft Dynamics AX was the only solution that was designed using a modern, elegant architecture that fully supports the needs of our worldwide locations.”

For more information about Microsoft Dynamics, go to: www.microsoft.com/dynamics For more information about Sevcon products and services, visit the web site at: www.sevcon.com

For more information about Columbus IT contact: Email: info@columbusit.co.uk Freephone: 0800 0433 054 www.columbusit.co.uk

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What if a wind farm could grow more customers?

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IT in manufacturing

ITnews...

ERP

DigiMIS provides seeds of change for the Stewart Company Cloud computing specialist DigiMIS is helping injection and rotational moulder The Stewart Company sustain its business growth and efficiency, following a management buyout and the company’s return to profitability.

The cloud application service from DigiMIS provides a critical platform for the business in sustaining future growth and profitability. As well as delivering the company’s Syspro enterprise resource planning (ERP) solution as a cloud application, DigiMIS is also hosting its Microsoft applications and Crystal reports.

The applications are hosted using high-end data centre infrastructure and accessed on demand via the internet, so the company only pays for what it uses — and without the worry or cost of managing and maintaining a complex IT infrastructure or employing specialist staff.

The Stewart Company’s commercial manager, Shirley O’Connell, says: “DigiMIS is focused on first-time fix, 99% of the time, whether telephone or email queries. If five of our people have a query simultaneously, all are dealt with at the same time; that could never have happened before.

Epicor announces Epicor iScala 2.3 SR2 Epicor Software Corporation, a provider of enterprise business software solutions to the midmarket and Global 1000 companies, announced the general availability of Epicor iScala 2.3 SR2.

The release features a number of new modules such as Credit Control and Distribution Planning.

With Credit Control, finance departments can work smarter, mitigate risks, and control credit globally. The Distribution Planning module enables organisations to manage their logistics processes efficiently in order to save money, increase customer satisfaction, and reduce their carbon footprint.

“Epicor iScala 2.3 SR2 focuses on providing a robust platform for growth through business agility while driving down cost to help companies cope with regular changes in local business requirements,” said

Adam Prince, senior director product marketing for Epicor.

“We consulted closely with our existing customers during the development process to ensure that the scope of what we’re delivering removes barriers to their business growth by helping eliminate non value-add activities and improving support for better cost management without jeopardising customer service.”

ITNIBS uehne + Nagel Commits to INTTRA eInvoice Platform INTTRA, the e-commerce platform for the ocean freight industry, announced that Kuehne + Nagel is collaborating with INTTRA for INTTRA eInvoice implementation.

INTTRA eInvoice is an electronic invoicing, dispute resolution, and payment processing solution designed to enable freight forwarders to receive, process, and pay carrier invoices and offers the potential to cut average transaction processing costs by more than half.

“There are an estimated 150 million invoice transactions processed a year for ocean shipping, with average costs ranging from $20 - $60 per invoice. Logistics Providers and their ocean carriers can benefit from standardising the process, improving visibility to their cash liabilities, and providing a more transparent invoicing process saving time and resources,” said Otto Schacht, senior vice president global seafreight at Kuehne + Nagel.

1,000,000 starts of Cocreate Personal Edition from PTC The Product Development Company announced the 1,000,000th start of CoCreate Modelling Personal Edition, the world’s first free explicit 3D CAD software.

Since its release in January 2007, users have experienced the explicit modelling approach in over 100 countries, with more than 50% of companies who order CoCreate Modelling as a result of trying the Personal Edition being new PTC customers.

Have your say at www.themanufacturer.com

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Wholesale Distribution reaching for new opportunities The Wholesale Distribution market Wholesale Distributors seek to build and manage relationships with both downstream customers and upstream trading partners. Accordingly, their businesses revolve around efficient and effective purchase, storage, reselling, and distribution of goods – and as with other organisations with narrow margins, cost reduction and operational efficiencies remain a vital target for retaining competitive differentiation.

In the twenty first century, successful wholesale distributors must offer a broad product mix and meet increasingly sophisticated demands from more suppliers and customers – all while facing increased competition to gain and maintain customer loyalty. The success of the wholesale industry is highly dependent on successfully managing the relationship with customers and trading partners. It is crucial, therefore, that wholesalers are able to access the right inventory at the right time, optimise service levels, and streamline operations between warehouse, transportation, and order management to deliver the experience their customers require.

Says Iain Fox, SME Consultant at IBM Global Business Services: “IBM continues to serve the manufacturing industry in both considerable the margin and client-value challenges. It does so by providing a product set that enables businesses to compete with effectiveness and efficiency; promote integration; and develop a structure of interconnectivity, the result being that when clients touch your business they receive the best experience possible”.

Trends, challenges, and solutions

1

Price pressures

In the buyer’s market, expectations for quality, customisation, and delivery speed have never been higher. Most companies or supply networks cannot compete on the basis of price alone. To remain profitable, wholesale distributors must demonstrate their overall value to customers with services and support such as one-stop shopping, valueadded service operations, end-to-end materials tracking, compliance documentation, and customer self-service.

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IBM can help organisations to reduce operating costs, facilitate day-to-day management and decision-making activities, and support long-term strategic planning. IBM has the potential to remove costs from the business immediately.

Services include design, integration and implementation of finance and accounting ERP solutions. Similarly, IBM helps its clients optimise financial processes, improve efficiency and productivity, and eliminate non-value added tasks.

Ultimately, says Fox: “Having an instrumented approach to the bottom line is a mutually beneficial undertaking, in that not only is your organisation put on stronger footing for both the challenges now and the opportunities ahead, but your customers will enjoy continuity of service and supply — together with improved deals in the future.”

2

The Need for Accurate Information

Accurate information and the ability to respond with fast, informed decisions are key requisites for agile, low-cost wholesale distributors. Many wholesale distributors however continue to operate with aging and unconnected information systems.

This inevitably leads to issues such as (i) limited visibility of data in the context of overall enterprise processes and information (ii) manual forms and unstructured data not readily integrated or understood in relation to other data and systems, and (iii) labour-intensive and untimely report generation.

To combat such challenges, IBM helps organisations streamline business processes and manage their business around an integrated base of information. Similarly, the company offers its clients an enterprise-wide business intelligence approach that links strategy with performance measures using state-of-the-art technologies to cascade these measures and analysis throughout the organisation quickly and cost-effectively.

Says Fox: “Only IBM Information Management has the end-to-end capabilities to help organisations manage your data and content, pull together trusted information that cuts across diverse silos, and also gain valuable insights to optimise businesses.”

3

Perceived Difficulties of Change

Old, unsupported hardware and software are expensive to maintain, and systems designed 10 or 20 years ago can rarely serve today’s real-time data exchange requirements.

Says Fox: “Aging systems which aren’t interconnected will almost certainly experience problems with their own internal process due to the noise that these legacy applications create.

By going through an ERP single integrated platform, extraneous noise is removed, allowing management to make more informed decisions.”

“This is particularly important for manufacturers who may not have implemented a new set of business processes or applications for some time. Such organisations tend to be very disjointed — the result being that communication across the business suffers, be it between employees sitting in the same room or trading with a subcontractor in China.”

Core solution areas

1

Supply chain management

IBM’s supply chain management services focus on the margin-generating processes and high-cost areas of their clients’ value chains. These areas include product development, supply chain planning, procurement and logistics. IBM delivers value-based, industry offerings that contribute to operational improvements and financial gains.

As a result, SCM addresses clients’ challenges through seven service areas: Supply Chain Strategy; Supply Chain Planning; Logistics; Procurement; Product Lifecycle Management; Supply Chain Enterprise Applications, and; Asset Management. These solutions enable wholesale distributors to eliminate excess inventory; improve on-time delivery performance, and; maximise the value of electronic procurement.

2

Financial management

The role of finance in sustaining and creating value is changing dramatically. Finance’s traditional guardianship and risk management roles are facing increased scrutiny. At the same time, finance is being asked to become

more effective and efficient in supporting core needs across the enterprise to: Deliver faster and more accurate transaction processing Provide more responsive budgeting and forecasting Execute a faster close for real time reporting Deliver the right information quickly to the right people at the right time IBM’s financial management service areas include (i) finance strategy; (ii) performance management and analytics; (iii) finance transformation; (iv) business risk management, and; (v) information management

Why IBM? IBM has a proven track record of helping to deliver lasting change to thousands of customers around the globe, both large and small. IBM’s experience in business applications is second to none, and when you are planning something as significant as a business-wide ERP implementation, that’s crucial.

IBM is a systems integrator for packaged ERP software with mid-sized companies. IBM’s industry-specific accelerators help clients realise value quickly and affordably, allowing them to remove cost and complexity from their business on their path to growth.

“We pride ourselves on delivery excellence and the value that we attribute to client relationships, not simply through the initial implementation, but everything that comes thereafter,” says Fox. “The market is awash with companies who see ERP as a technological application alone. They implement the technology and expect to see autonomous results. It’s about peoples business and peoples process and that’s the route that we take and it’s why we are successful at what we do.”

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Unlocking procurement savings through Redesign to Cost Tim Slorick of procurement and operations consultancy K Consulting presents a way to unlock cash through a procurement savings model called Redesign to Cost.

What

is the relationship between your procurement team and your technical, R&D or engineering department? If it is an armâ&#x20AC;&#x2122;s length, servicebased relationship, namely one where a specification is drawn up by the technical team and is then â&#x20AC;&#x2DC;thrown over the wallâ&#x20AC;&#x2122; to procurement to source from the supply market, then there could be a huge opportunity to unlock a significant amount of cashable benefit in your organisation.

Redesign to Cost (RTC) is an approach used to identify the difference between the actual and perceived cost in a product or service, with a view to designing-out the unnecessary or non value-adding elements. It can yield a number of benefits to an organisation, including:

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Cashable, sustainable savings Better innovation, both internally and with the supply market Increased competitiveness Better working relationships between procurement and technical departments

The chart below shows the typical savings that can regularly be secured through traditional approaches (strategic sourcing activity) and a combination of sourcing and redesign activities.

When to use RTC?

There are several positive and negative situations where using RTC might be an appropriate tool to use. On the minus side, if there has been little encouragement with existing suppliers to propose technical improvements to yield better productivity or, as a result of specific constraints, a monopolistic supplier situation exists, then RTC is an excellent candidate. On the plus side, for progressive organisations wishing to innovative to improve competitiveness, i.e. not only decrease costs but also increase attractiveness to the final customer, or where technical alternatives are starting to emerge in the market, then this approach is certainly worth considering.

Supplychain and logistcs

How does RTC work?

RTC follows a number of logical steps to identify and design-out unnecessary cost, and it can operate to different depths of intervention: Basic

Intermediate

Advanced

Description

Challenge technical choices (thicknesses, material, technology etc) without changing fundamentally the design

Technically redefine a component or a sub-assembly with potential significant impact on the overall performance of the product

Substantially redefine the overall product getting back to the final customer needs (from a functional specification) > New design/ concept

Example

Replace a machined piston with a cold forging

Make a valve cover from a single plastic moulding

Move from CRT to LCD technology

Depending on where you are as an organisation and the relationship you currently experience between the commercial and technical sides of the business depends on how deep you go into this approach. A big factor in a successful RTC initiative is the relationship with the customer, and how possible it is to incorporate their voice into the process, bearing in mind that a significant part of the approach takes the customer’s perceived value as one side of the equation.

The approach takes two angles: a functional analysis and a value analysis, and combines these to determine where the value is, where it should be, and the opportunity to align the two.

Taking an extreme example to demonstrate the principle: a carbonated drinks producer that believes its customers value a solid gold bottle top; very expensive, but it is what the customer supposedly wants. In reality, the functions a customer expects are for the bottle to be secure (tamper proof), leakfree and to stop the drink going flat. The solution: a plastic, tamper-proof cap with a seal.

Starting with the functional analysis, a cross-functional team should consider the expected functionalities and then take its assessment from there.

By first establishing the expected functionalities of a product in order of importance, it is then possible to conduct a detailed technical analysis to determine the critical items that need to be optimised. Then, by converting engineering costs into functional costs, the cost per component can be apportioned to the function it fulfils. Comparing those elements which represent a large proportion of cost with the value expected by the customer quickly identifies the discrepancy between the two, and builds the case for redesign opportunities for these elements, as shown in the example above right.

The elements where designed costs are higher than perceived costs (the customer’s perspective) represent opportunities for redesign. Statistically it has been shown that the total of the differences for each ‘over

designed’ element represents the size of the prize for potential savings.

While more complex, both technically and organisationally, the RTC approach is an extremely powerful method to identify misalignment of cost and value, unlock savings opportunity and sustainably secure the benefits for your organisation. end

Case Study: Twenty per cent savings by redesigning a smoke treatment facility A company that was in the process of building a new smoke treatment facility as part of an incineration plant was looking to deliver savings through innovative approaches. From the outset, the context was complex: a diverse range of direct and indirect customers, including local authorities, the engineering consultancy firm which specified the owner’s needs, local associations and the operator itself. In addition, there was a double-edged sword of continuous, expected price erosion, but within an industry with commonly used and proven technology. Finally, due to the existing design of the overall plant, other elements of the scheme (furnace, boiler, energy recovery etc) had already been designed, so the ‘interface’ constraints were also extremely tough.

By following the functional analysis assessment of RTC, which included a series of workshops with the design authority, the customer and other key stakeholders, the customers’ requirements were established and compared against the current design scheme to highlight the value created for them. The comparison between the expected value and design value highlighted a number of discrepancies on the critical components of the important sub-systems. By taking these critical elements, and working with the design team to establish alternative approaches — which included swapping with newer, cheaper technology, and an overall reduction in some working areas (which had the knock-on effect of reduced civil engineering costs) — both the expected value by the customer and the actual cost of the facility were optimised. Cashable savings of 20% were secured and the value expected by the customer was designed in to the scheme.

Tim Slorick is a director at K Consulting, a procurement and operations specialist that works with organisations to secure efficiencies and increased effectiveness. www.kconsulting.co.uk

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Out with the old, in with the new 70

Planning for replacement of infrastructure is frequently undertaken due to the loss of productivity and increased maintenance costs. However, all too often companies put off capital replacement simply due to cost. This mentality is flawed because one very important cost factor has not been taken into account...energy usage. Tim Brown reports.

Operations and maintenance

Mastmead: double glazing was the key to saving

Energy efficiency wasn’t an architectural priority in the 1900s, as Mastmead Ltd has discovered. An interestfree Energy Efficiency Loan from the Carbon Trust helped the business install double glazing throughout its 100 year-old building, and reduce its energy bill by over 25%.

The business case

Based in north London with three staff, Mastmead Ltd offers 88 business units for rent as office spaces.

Founded in 1987, the company and its tenants are housed in a building dating from the 1900s, complete with rattling window frames. “The windows were as old as the building,” explains the Manager, Sharon Pines.

“They were in metal frames which didn’t fit, and leaked whenever it rained.”Replacing the windows had been a long-term plan, but until Sharon discovered that the Carbon Trust offered interest-free loans for energy efficiency projects she was unsure how to fund it. The Carbon Trust provided a loan of £53,715, half the cost of installing double glazing throughout the building. Mastmead met the remaining costs itself. Since the installation, the company’s energy bill, originally £65,000-£70,000 a year, has fallen by 28%. Mastmead is on target to save £24,231 a year, which means it will see a return on investment in just over two years.

The technology

According

to the Carbon Trust, businesses waste more than £3bn every year on energy which could be saved if businesses employed more energy efficient structures, equipment and practices. Enter the Big Business Refit, a Carbon Trust interest free loan scheme aimed at assisting businesses to make infrastructure changes and scrap old power-guzzling equipment in favour of newer and more efficient kit.

The Carbon Trust provides expert guidance and has interest free loans available from £3000 up to £400,000, which can be paid back through the energy savings the new equipment delivers. Three businesses that have taken up the Big Business Refit challenge are Mastmead, Hadleigh Castings, and Precision Engineering Plastics. The three companies differ greatly but each has experienced a considerable benefit from their association with Carbon Trust.

Double glazing does more than keep the rain out. By reducing the amount of heat lost through windows, Mastmead is able to save on heating bills and prevent wasted energy. “We’ve tried to discourage tenants from using individual heaters, as there are radiators in the rooms, but before we replaced the windows lots of them had their own,” says Sharon. “They don’t need them now – when the windows fit properly and are double glazed the building is warm enough.” By reducing heat loss and therefore eliminating the need for extra heaters in the building, the company should save 138 tonnes of CO2 a year. Mastmead is now considering applying for further Carbon Trust loans to install more efficient lighting and to insulate the roof.

Savings at a glance

Loan amount: £53,715 Payback period: 3 years Return on investment: 2 years, 2 months Annual cost savings: £24,231 Annual CO savings: 138 tonnes

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Building Operational Excellence

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Operations and maintenance

Hadleigh Castings Ltd: compressing the carbon footprint When an air compressor at Hadleigh Castings Ltd had to be replaced, the company turned to for an interestfree Energy Efficiency Loan. Through the assistance of the Carbon Trust to help purchase an energy efficient compressor, Hadleigh Castings now saves over £11,000 a year.

The business case

Based at Hadleigh, near Ipswich, Hadleigh Castings Ltd is an aluminium foundry employing 120 people and serving industries ranging from aerospace to life sciences. The foundry is heavily dependent on a regular supply of high quality compressed air, produced using compressors which consume large amounts of increasingly expensive electricity.

The decision to update the system with a more efficient alternative was made for the company when the largest compressor fell over. With an interest-free loan from the Carbon Trust of £30,000, Hadleigh Castings replaced the fixed speed compressor with a variable speed option, ensuring that energy is not wasted. Installed at the end of 2008, the new compressor is on target to save the company 78.92 tonnes of CO2 a year, reducing the energy bill by £11,330 – based on today’s prices.

The technology

Hadleigh Castings previously had six compressors of various sizes, three of which were controlled by specialised software to generate the right amount of compressed air. A certain amount of power was inevitably wasted as the levels could not be altered on individual machines. Three fixed-speed rotary screw air compressors were replaced with one large variable speed machine. The company also held onto several smaller compressors to top up the air supply if necessary. So far these have not been needed, as the single compressor provides all the compressed air required for the foundry, and the supply can be precisely controlled. As well as significantly reducing the amount of electricity used by the company, the new compressor is quieter, will need to be serviced far less frequently than the old machines, and delivers a much better quality of air to point of use. On the back of this success, the company is exploring the financial cost and projected energy savings involved in replacing at least one of its furnaces.

Savings at a glance

Loan: £30,000 Annual energy savings: £11,330 Annual CO2 savings: 78.92 tonnes Loan payback: Three years Return on investment: 2.6 years

Precision Engineering Plastics (PEP): energy efficient loan fits the mould

By using three interest-free Energy Efficiency Loans from the Carbon Trust to upgrade equipment, Precision Engineering Plastics has stayed fighting fit to face the recession.

The business case

Founded in 1985, PEP started life as a 2,000.sq.ft unit with a couple of machines for producing injectionmoulded plastic components. Nearly 25 years later, the company employs 45 people in its 24,000sq ft factory in North London, which runs 24 hours a day, five days a week, and has an annual turnover of £4 million. Initially focusing mainly on the automotive and engineering sectors, PEP’s customer base now includes companies within the electrical and medical sectors, as well as the Ministry of Defence. The machines provide batches ranging from 50 samples to many millions.

In terms of energy efficiency, the business faces two common challenges: it needs machines that are modern enough to compete in their chosen markets, and sufficient cooling equipment to keep those machines running through relentless production cycles. When the company’s equipment supplier recommended the Carbon Trust interest-free Energy Efficiency Loans scheme, it was the beginning of a long-term partnership to modernise PEP.

The technology

PEP initially applied for a £10,900 interest-free Energy Efficiency Loan from the Carbon Trust to fit energy optimisers to 19 motors used on injection moulding machines and chillers around the site. This change went on to provide annual energy savings of £3,114.

In February 2008, in line with its continued growth, the company approached the Carbon Trust again, this time for help to replace two injection-moulding machines with newer models. We provided a second interest-free loan, of £47,285 to help fund the purchase of the new machines.

Besides being quieter and more energy efficient, the replacements are also quicker – reducing cycle times and running costs. This has reduced PEP’s annual energy bill by £18,700. At the end of 2008, the company used a third Carbon Trust loan – this time £10,500 – to buy a power factor correction unit and regulate the amount of power consumed by the plastic moulding machines. This change should deliver annual energy savings of £4,600. The company is now considering relocating its factory, at which point it will look at further efficiency measures such as lighting and insulation.

Savings at a glance

Total loans value: £68,685 Total annual energy savings: £26,414 Total annual CO2 savings: 223.65 tonnes Overall average payback period: 3.5 years per loan end

Have your say at www.themanufacturer.com

73

Banking on manufacturing Small in terms of geography, the Isle of Man punches above its weight in manufacturing, especially high tech engineering. Ruari McCallion visited the island and returned better informed and highly impressed with its government’s efforts to attract and support productive industry.

TT motorbike race, financial services, tourism and kippers. What else is there to like about the Isle of Man? How about a business-friendly environment with no corporation tax, a system of grants for existing as well as new businesses, and personal access to policymakers, including ministers and department heads?

This is the reality of the Isle of Man: not so much a tax haven, more a progressive place to do business. There are tax advantages, without a doubt, but what is more attractive to manufacturers is the island’s engineering history, present and future. Everyone in the DTI — the Isle of Man has its own Department for Trade and Industry — was at pains to point out that manufacturing is a very important part of its economy. And it isn’t low tech or entirely motorcycle-oriented either.

High flying engineering

“There isn’t an Airbus or Boeing flying around without an Isle of Man part on it,” says Martin Perkins, director of Manx Engineers, based in Ramsay. With fewer than 30 employees it remains small but it has a 50-year history. It focuses on precision engineering, works with exotic alloys like Incomel and has been able to build a valuable niche in the aerospace supply chain. The Rolls-Royce Trent 1000 engine and Martin-Baker ejection seats both use components made on the Isle of Man; so do many of the oil and gas exploration companies. The world’s leading manufacturer of controls and cordless interfaces for kettles, jugs and water boiling products is located here. Some aspects of Isle of Man manufacturing are truly out of this world.

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“CVI Technical Optics [in Onchan, IoM] provided optical equipment that is being used right now by the Mars Explorer,” says Malcolm McDonald, nonexecutive director with GE Aviation. Its IoM facility was acquired when it took over Smiths Aerospace in 2007.

According to McDonald, there are several reasons why a company of GE’s stature retains a presence on a relatively small island in the Irish Sea.

the pupils “Before would just come in and grab all the brochures and leave; now, we have children coming to Malcolm McDonald, GE Aviation the stand and asking about manufacturing

“

The

“They looked at all their sites and they considered the pros and cons of locating here and elsewhere and the Isle of Man came out positively,” McDonald says.

“We have a good product range, a skilled workforce and support from government. Taking into account the capital equipment grants and the business case is very strong. The site here is a centre of excellence

Specialfeature Isle of Man

Changing the stereotype

The offer of capital grants and government support are enough to gain the attention of any business.

Grants up to 40% are available for new buildings, building improvements, plant and machinery, first year expenses, marketing costs, energy conservation measures, micro-processing technology and quality assurance improvements and accreditation.

The rate can rise to 50% for training. The grant application pack is quite slim and the DTI people are ready and willing to help complete the forms.

Small wonder then, that companies like GE Aviation, Swagelock, Assysteme, CVI Technical Optics and SITA chose to locate facilities on the island. It attracts entrepreneurial businesses, too. Bladon Jets makes tiny gas turbine engines for hybrid vehicles and power generation.

“We’re talking to two motor manufacturers, one a prestige vehicle producer; the other makes electric vehicles,” says Courtney Heading, Bladon’s business development director. He’s a motorbike enthusiast who moved to the Island in 2008. Its axial-flow engine, shaft and generator assemblies weigh just 25kg — about one tenth the weight of a reciprocating engine — and are designed to provide extended range to electric and hybrid vehicles.

Going for growth

The Isle of Man’s manufacturing sector may be smaller than its financial sector but it has been growing faster in recent years.

“The traditional perception of the Island is probably 20-30 years out of date,” says Adrian Moore, development manager for manufacturing retail, Isle of Man DTI. “It’s much more than a financial centre.

Engineering and manufacturing contribute around 7% of GDP — 11% if you include support activities — and it has grown by 30% in real terms over the past four years. That’s more than any other sector and more than anywhere else in the UK.” The financial sector, by contrast, has grown just 15% and total GDP growth on the island has been 21% over the same period. One measure of how keen the island is to see manufacturing grow is the effort the DTI, the Government and the Chamber of Commerce is putting into the Aerospace Cluster (see box) and the manufacturing sector as a whole.

“We have 52 manufacturing businesses, with around 2,800 direct and indirect employees,” says Malcolm McDonald. That may seem small but the total population is only around 80,000, so it is significant. Malcolm is also heavily involved with the Chamber of Commerce. With the DTI, the Chamber hase been building an initiative called Awareness of Careers in Engineering (ACE), which reaches out to schools to let both students and their families know that there are alternatives to banking and they don’t necessarily involve dirty fingernails. It starts with projects in the final years of junior school.

Educating the youth

“We believe we have to start at an early age, just to help children to understand that this might be something they’d like to do,” says McDonald [yes, this is a McDonald quote]. “We’re now going to careers evenings as a sector, rather than as individual companies. As a collective, we’re sharing skills and resources. Before the pupils would just come in and grab all the brochures and leave; now, we have children coming to the stand and asking about manufacturing.” Access to government is a real advantage to companies on the Isle of Man. With it, they can have a real influence.

“We have the opportunity to meet the Tynwald, the people we elect,” McDonald explains. “We believe that some of the money and some of the courses the students take should be more

and “Engineering manufacturing contribute around seven % of GDP — 11% if you include their services — and it has grown by Adrian Moore, Isle of Man DTI 30% in real terms over the past four years. That’s more than anywhere else in the UK

“

for prismatic manifolds — the valve blocks in titanium and aluminium for Boeing and Airbus.”

tailored to the island’s needs.”That means getting involved with the Isle of Man College, in order to help ensure that training courses are oriented to longer-term sustainability for the Island. The manufacturing sector committee meets every month and two representatives from the DTI are on it.

“In the past, manufacturing wasn’t even on the radar screen,” says McDonald. “It’s about having the awareness and the options and building a balanced approach.” The minister for trade and industry, David Cretney, has commercial experience and combines his government duties with running his own business. He is a committed supporter of the initiatives to help manufacturing and engineering on the island to grow and needs no convincing of the sector’s importance.

He is accessible and open to ideas. With this atmosphere of support for manufacturing, financial as well as rhetorical, an existing skills base and access to further academic resources on the UK mainland and through the North West Aerospace Alliance, the Isle of Man is an irresistible place to do business.

And the kippers aren’t bad either. end

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Isle of Man

Star cluster

The Isle of Man Aerospace Cluster

The Isle of Man Aerospace Cluster is a focused sub-committee of the Chamber of Commerce and is supported by the Manx Department of Trade and Industry (DTI). Adrian Moore, from the DTI’s permanent staff, is the Cluster Manager.

Now

in its third year, the Cluster consists of 16 companies, ranging in size from large multinational organisations to small, native Manx businesses. Representatives from GE Aviation, Swagelok, Ronaldsway Aircraft Co and Manx Engineering sit on the committee. Some of these companies are prime suppliers to big global OEMs, including Boeing, Airbus, BAE Systems, Thales and Martin-Baker, the ejection seat manufacturer.

The Cluster is part of England’s Northwest Aerospace Alliance (NWAA) and collaborates with NWAA businesses on specific projects. Academic support comes from Coventry University and from the Isle of Man College’s links with Liverpool John Moores and Lancaster universities.

The Cluster has originated and developed a unique, four year apprenticeship scheme. Apprentices move from one company to another to acquire a range of skills and knowledge. It opens up wider opportunities for young

people and makes the financial burden easier.

“Initially, we weren’t too excited that the lads would go round from one company to another with everything they learned,” says Bob Ringham, director of Manx Engineering. “Essentially, we are small and felt we would lose out, that the big companies would mop up good candidates. But if we want to get all the good things from the scheme, we have to accept it. Our hope is that even if apprentices leave for a couple of years they will come back, and be better qualified. That’s the view we take.”

French-owned Assysteme UK’s facility in Braddan specialises in aerospace component CAD and holds signature status with OEM clients. It is currently working on the trailing edge of the Airbus A350 main wing and a package of work for the A400M military transport.

“In the future we would love to see ourselves winning an ‘Isle of Man package of work’,” says Brian Mettle, Assysteme’s Companies in the Isle of Man Aerospace Cluster operations manager. “We ACLAI Design Ltd Design, development and engineering consultants could design and other companies could manufacture Assysteme UK Aircraft design and deliver to the customer.

Cloud Nine Ltd Quality business solutions It’s a question of winning the first contract and who would CVI Melles Griot Laser Optics Laser optics and coatings own it – which could be EBIS Engineering and Plastics Ltd Precision engineers and injection mouldings the responsibility of the Element Six Ltd Synthetic industrial diamond product manufacture Island government.” & development

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GE Aviation

Aerospace manufacturer; systems integrator; project manager

JB Precision

Precision manufacturing

Manx Engineers Ltd

Precision engineering; prototyping

Ronaldsway Aircraft Company Ltd

Aerospace manufacturer

Precimatic Ltd

Precision machining

Swagelok Ltd

Precision manufacturer

TAC Europe Recruitment

Technical recruitment

Target Tools

Cutting tools and supply solutions

Tritec Ltd

Toolmaking, prototyping

Zenith Industrial Products Ltd

Engineers merchants

Have your say at www.themanufacturer.com

The Aerospace Cluster is now in its third year. “We are working to break down barriers and misconceptions,” says Adrian Moore. “We have events every quarter, we have launched initiatives like the apprenticeship and ACE — Awareness of Careers in Engineering. It’s a great demonstration of how the companies are open to building the concept of a strong cluster.” end

m at e r i a l s h a n d l i n g f o r S u c c e s s

With product lifecycles shortening and worldwide competition increasing, success depends on effective material handling and logistics solutions to deliver the right product to the right market at the right time.

Colin Chinery reports.

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m at e r i a l s h a n d l i n g f o r S u c c e s s

Can you handle it?

Materials handling becomes a business critical science

T

he link between effective materials handling and competitive advantage has never been clearer or more compelling as manufacturers search for new ways to sweat assets, minimise costs and maximise operational performance.

A controlled and monitored materials flow brings a better understanding of usage, waste and cost, while materials handling equipment and the way in which it is used, is playing an increasingly significant role in the drive towards sustainability.

“The costs related to materials handling are critical to efficiency, productivity and profit in any manufacturing environment and our experience demonstrates that identifying the right machine for the right application saves time and leads to increased productivity,” says Tony Wallis, operations director at Toyota Material Handling UK. “The combination of the right equipment, good process and motivated operators can be a major influence on business success. Improving your material handling processes reduces your costs and supports your ability to meet customers’ needs.

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And the right processes will give you the agility to get the right product in the right place no matter what the future throws at us.”

The Draper facility near Eastleigh, Hampshire holds what is probably the largest single stock of tools in Britain, and Toyota’s Radio Shuttle automated handling system combined with BT Reflex reach trucks, has enabled Draper Tools to increase available pallet space in its new warehouse.

The traditional vehicle based order-picking processes include numerous unproductive sequences such as picking up empty pallets or roller containers and delivering filled pallets, as well as driving and alighting from the vehicle.

The Radio Shuttle — available only from Toyota — works in conjunction with standard reach trucks, transporting each pallet along custom-designed racking and placing it ready for the handling task.

Controlled by a radio signal, the shuttle brings the next available pallet to the pick face for picking operations, or during pallet put-away, transport the pallet to the rear of the racking and positioning it in the next available station.

m at e r i a l s h a n d l i n g f o r S u c c e s s

The trucks operate from a central aisle, improving space utilisation and minimising the risk of damage to the truck and racking. Up to 50% of the handling process is automated, and Draper Tools has increased available pallet space in its new facility by 20 per cent.

Pick and Go In most material handling operations, picking represents the biggest cost since it is often the most labour intensive, says Wallis. “European customer trials suggest that a new system from Toyota can drive around 80% of the cost out of a picking operation, a potential saving that organisations cannot ignore. Pick and Go combines established AGV (Automatic Guided Vehicle) technology with existing warehouse management systems to dramatically increase the time each picker actually spends picking.”

Effective materials handling is all about productivity, with the best systems and solutions cutting the time, effort and staff numbers needed to move goods from point A to point B. And with the continuing pressures, “staying ahead of the game in a very competitive market means we must look at the complete material flow of our product,” says Nissan IFA senior supervisor Kirk Kitching – “how the part is delivered, packaged and presentation from the warehouse up until the point of fit to the vehicle.

been improved so much over the past three years and it is helping plan our future.”

Specific material handling challenges include: Tracking products: With more diverse specifications and smaller lot sizes, engineers need the ability to track individual products through each step in the manufacturing process to facilitate customisation, status review and onthe-fly changes.

The Eye that Never Sleeps: A visualisation management system to monitor line equipment, track stop counts and identify and quantify malfunctions.

Co-coordinating logistics: A pushbutton or automated supply chain management system to ensure the right parts get to the right place.

Minimising the human factor: Error proofing – or poka-yoke – requires looking at each step involving manual intervention Automation that supports change: Product life cycles have shrunk dramatically – flexible automation is a must.

But the extent to which a manufacturer automates can be a contentious issue.

“Our frustration as an organisation,” Our frustration is that we see says Mark Daniels, the kind of automation technology manager for Rockwell Automation’s applicable and the benefits we can architecture and software provide. But the take up is slower in the business UK and Republic UK and Ireland than we think is sensible of Ireland “is that we see to maintain competitiveness the kind of automation technology applicable Mark Daniels, Rockwell Automation and the benefits we can provide. But the take up is slower in the UK and Ireland than we think is “By implementing kitting style systems within sensible to maintain competitiveness.” our delivery process it has opened a lot of new Tony Wallis sympathises. “We find there is some windows of opportunity, one motion set by the scepticism towards automation at the moment operator, strike station within each location, pick to as many customers perceive it will involve a high light systems to eliminate wrong parts, automated investment with a long payback period. delivery for both primary and secondary supply “It may also affect their ability to meet changes in and even automated picking. demand further down the line. But we believe there “The logistics side of the business has never are still options available which combine tried-and-

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m at e r i a l s h a n d l i n g f o r S u c c e s s

tested technologies in new ways, giving impressive savings without compromising flexibility.”

According to Dr Peter Baker, senior lecturer, Logistics and Supply Chain Management at Cranfield School of Management, automation is a cost/accuracy issue to be considered in the overall supply chain. “By automation a lot of people often talk about automated information flows rather than the handling, and both may be important.”

Look at the whole supply chain Citing automotive as an example, Baker says it’s important to consider the whole supply chain and not just the assembly component. “If you look at where inventory is in the supply chain, it’s no longer at the assembly plant – where it used to be.

It may be in the suppliers’ who are going to feed the just-in-time process or in the finished cars that are unsold afterwards. So the whole supply chain needs to be integrated.

“My experience is that people take a considered view on whether to automate or not based on cost pay back and on the issue of a possible inflexibility of automation. For a lot of companies, especially in warehousing, automation is looked at with some concern as to whether it’s flexible enough to cater for whatever the future may bring. And I think the pendulum has swung a little way towards hesitancy.”

C-Mac of Gt. Yarmouth specialises in the design and manufacture of customised electronics equipment. “For our type of business — high mix low volume, very much customised — I’d say we are highly automated. We have a high design input

we’ve put investment and effort in this area. Far back, C-Mac was into spot purchases and a fairly simple approach to materials management. Now we have a comprehensive and holistic view of materials management, monitoring on a real-time basis all the way through to supply chain and manufacturing.”

Asset or liability?

Freeing capital and the smooth functioning of flow and systems are critical says Sue Talbot, purchasing and supply chain specialist at MAS South East.

“This has a special significance for smaller companies.

Some are struggling My experience is that people but many are doing take a considered view on whether very well and are ideally placed in a to automate or not based on cost pay recession because back and on the issue of a possible they are flexible. inflexibility of automation Here they are trying Dr Peter Baker, Cranfield School of Management to reduce overheads while getting more work through. and a high degree of specificity around the products “From my perspective I always look at stock as we develop,” says Paul Hill, general manager, a fine balance between ‘Is it an asset or a liability?’

Aerospace and Defence Electronics at C-Mac. And with too much of the wrong stock it becomes “We have a seamless approach to materials a real liability. It’s tying up cash and space, and if handling, at the front end the forecasting and order you’ve got space you’ve got to handle stock more placement, and we link this in as seamlessly as we often. Then there’s heat, lighting and all the rest can to supply and materials. Over the last two years of it.

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You don’t need to splash out to get results.

“We’ve worked with Palletline since the very first delivery of One Water. They really do understand the pressures that we are under with big, last minute orders that need to go out at a moment’s notice, especially at peak times such as the summer music festivals where our products prove particularly popular.”

Logistics Manager Monique Pugh, One Water

The People Driving Palletised Distribution

www.palletline.com

www.onedifference.org

m at e r i a l s h a n d l i n g f o r S u c c e s s

“A key is to optimise stock, have what you need and manage your suppliers. So you get regular deliveries on your high value and large items while holding stock of small items you will never wish to run out of but will not involve tying up a fortune.

“Storage and space are very important factors in materials management. I’ve worked with companies that actually have to hire Portacabins or containers to store extra material, and that’s costing them a lot of money.” And where does she find the underutilised space? “Usually where’s there’s an awful lot of stuff covered in dust!”

Planning how to react to economic recovery and capitalize on every opportunity as and when it arises, is crucial says materials handling, logistics and supply chain consultant Gideon Hillman, whose clients include BE Aerospace, Jaguar Cars, Balfour Beatty and Premier Foods.

“Where measures have been taken to rationalize and contract to combat recession, businesses need to be sure that they can react to the inevitable upturn in trade as and when needed and not be found wanting or lacking in resource and strategy when the time comes.

“Long term security will be highly dependent on a robust and sustainable logistics and warehouse strategy within your business and within that of your customers and suppliers throughout the supply chain.

“To survive, companies must undertake the widest review possible to ensure all elements of their warehouse processes and facilities are not ‘sub-optimized’ and that inventory levels are minimized yet remain effective.”

Real time, real information ‘Date rich and information poor’ is proverbial, but says Mark Daniels, there are software tools providing “simple information to human beings saying this is what is going on, this is the likely cause and this is the corrective action. It makes it very easy.

“But often manufacturers are not getting real time information back. So the forwardthinking companies are now spending a lot more time and money investing in technology which gives them a better real time view of overall equipment effectiveness of a line or have in place

Toyota Material Handling’s new hybrid forklift featuring System of Active Stability

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Driving Innovation in Palletised Distribution It may seem as though pallet networks have been part of the distribution scene for a long time, but in fact it’s less than two decades since Palletline, the pioneers of the sector, shipped their first 51 pallets back in February 1992.

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oday, Palletline regularly moves over 10,000 pallets around the country each and every night – but dramatic growth in volume isn’t the only advance made by this dynamic and forward-thinking organisation.

No other network has moved as fast as Palletline to optimise services and opportunities for customers nationwide. Astonishingly, Palletline now provides a technology solution which is more advanced than many of the leading European 3PLs, offering reliable distribution services incorporating total freight transparency from collection through to delivery.

So how is Palletline different?

Equipped with entirely new and market leading technology, the Palletline service has taken on the value and scope of a more expensive 3PL solution, offering a realistic alternative to less flexible cost plus contracts.

In short, the technologically enhanced network can provide all the same services, yet on a far more economical basis.

What’s more, these services are available on an ‘as required’ basis, stripping cost out of the equation.

“It’s not just a vision,” states Managing Director Kevin Buchanan. “It’s already happening; changing patterns in the industry make the Palletline solution very attractive to customers who need to achieve best value in a very demanding economic climate.”

How does it all work?

In 2008, Palletline took the sector by storm, introducing a range of groundbreaking technological developments that have revolutionised the way the network controls and manages its operational systems.

The changes have impacted across the business, increasing efficiency, further enhancing quality control systems and opening the door to a range of new services offering added value for customers.

In October 2008, Palletline moved to new Central Hub premises, implementing totally revised business processes to deliver unparalleled levels of quality, performance and safety. By mid-2009, development and integration of a range of highly innovative technological advancements was enabling the organisation to function more efficiently than any other palletised distribution network in the country.

Key innovations included the introduction of combined scanning and image capture equipment, injecting added efficiency into the process and increasing freight visibility as well as contributing towards an advanced, real time, automated service failure system. Alongside this, Palletline successfully implemented digital signature capture across the system, introducing a robust and reliable solution yielding defined commercial benefits.

These levels of transparency have enabled the organisation to act beyond the limitations of the conventional pallet networks, operating as a freight facilitator for Member Companies. As a result, Palletline customers are already benefiting from more cost effective full load and groupage services, integrating with the network solution.

It’s a fresh, new approach for the industry. Palletline is now coming to market with better, smarter solutions, pushing the boundaries of freight distribution, successfully challenging the more expensive 3PLs on a level playing field and delivering flexibility and performance well in excess of market expectations.

Tel: 0121 767 6870 Email: info@palletline.com www.palletline.com 83

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KPI dashboard which will be visible to senior management. This means they can respond and react to situations as they occur in the manufacturing environment in a real time basis, minimising the impact to downtime, and driving up the operational productivity.”

The critical issue with data management in manufacturing is ‘who manages the data?’ says Cranfield’s Baker. “The assembly plant may be quite reliant on first tier and lower tier suppliers for data,

We have a seamless approach to materials handling, at the front end the forecasting and order placement, and we link this in as seamlessly as we can to supply and materials Paul Hill, C-Mac

and a lot of that may now be handled through third party logistics providers set up to manage say, the inward supply chain.

“So there is a critical question over who manages the date to ensure that this is managed correctly and doesn’t fall through the gaps.

Data quality is also an important issue when it is passed between people. Every time a new product line appears quite often the actual data from manufacturer to retailer doesn’t coincide.

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RFID – still waiting An effective first in-first out (FIFO) system using bar-coding all the way through the process from raw materials coming in to finished goods going out of the door, is a key issue. “Automated identification is becoming more and more important. Bar coding has been standard for some time and people have talked about RFID as coming soon – and has been used for some time for specific applications,” says Baker.

“But it’s hardly overwhelmed supply chain logistics and replaced the bar code as some had expected. But I think this is a technology that will come in and it’s just a matter of when.”

“I’ve been working in the industry for more than 20 years and when I first started we were working with RFID exclusively in the automotive industry,” says Mark Daniels. “There you are dealing with large products and the challenge was environmental – the cost of RFID tagging was not a prohibitive factor.

“But start moving this into mainstream operations where you are dealing with all shapes and sizes of materials and packaging and so on, then the cost and physical side of RFID was

m at e r i a l s h a n d l i n g f o r S u c c e s s

prohibitive. But over the last 20 years that’s changed a lot. The size and cost issues have been driven down, and the ability to use RFID in the industrial environment has increased. RFID is definitely on the rise.”

Greening the flow

single pallet in and out, and we are achieving scanning on 99 per cent plus of all freight that comes through,” says Buchanan. “A rolling floor process means freight moves quickly through the hub with at any one time six to eight vehicles constantly unloaded while 22 vehicles are re-loaded.

“Most hub operations have a large footprint of space where freight is unloaded on to the floor with waiting vehicles. We unload and re-load simultaneously.” Overall the Solihull model has resulted in Palletline reducing its fork truck fleet by 20%, with operatives now handling an average of twenty five plus pallets an hour – up from twenty one.

Environmental concerns may have risen up the corporate agenda but recession has deflected much attention away from green issues. Yet efforts to ‘green’ the supply chain are linked to improved financial results through reduced energy costs and subsidies from the use of alternative energy.

And the supply chain probably represents the largest area of potential or reducing carbon footprint, with the main focus on transport and warehousing transport accounting We achieve over 99 per cent for about two thirds successful correct day delivery ratio, of the supply chain’s overall energy over 10,000 pallets a day. We know consumption. real-time when every pallet’s delivered Kevin Buchanan, right through to end delivery point MD of Britain’s leading Kevin Buchanan, Palletline palletised distribution specialists Palletline, says the 20 year growth of pallet networks is arguably the supply chain’s most significant contribution to making British industry competitive.

“Since the end of the 1980s we’ve probably done more for the green agenda than any other organisation. The number of road miles we’ve taken out with the consolidation of small shipments is very considerable.

“Over that time British heavy industry has declined and we have much more high quality niche manufacturing, and it’s very relevant that we get goods to market quickly and cost effectively.

Before Palletline began there were no pallet networks, and manufacturing still exists only as a result of the skills basis and because overseas competitors cannot get the rapid stock to market movement we have in Britain as a result of pallet network provision.”

Founded in 1992, Palletline is the only network wholly owned by its member companies, with 75 member operations across Britain. Its new central hub at Solihull handles around 10,000 pallets in a 24 hour period backed by comprehensive on site bespoke scanning and quality control facilities.

“This means we can scan and check every

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But one of the most impressive features of the “We achieve over 99 per cent successful correct factory is the vast automated warehouse which day delivery ratio – that’s over 10,000 pallets a holds more than 282,000 pallets making it one of day to every postcode in the UK,” says Buchanan. the largest automated warehouses in the world.

“Other networks don’t even monitor this because Computerised cranes travel down narrow lanes at they don’t have the technology. We know real-time four metres per second between rows of pallets when every pallet’s delivered right through to end stacked to 35m high. Such is the high level of delivery point. automation that the entire warehouse can be run “The second point on reliability is we have with only two people. significantly better investment in IT. We have up to ten scans on any one pallet recording its life history from collection to end delivery, a legally compliant POD uploaded Storage and space are very within minutes of delivery, the important factors in materials first in the UK and probably management. I’ve worked with the world.

“This is light years ahead companies that have to hire Portacabins of our competitors and means or containers to store extra material – manufacturers can invoice for that’s costing them a lot of money goods quicker, something that has a dramatic impact on cash Sue Talbot, MAS flow for us and our customers and is incredibly powerful, “If you’ve got a plant that’s running at 97 per particularly when conditions are hard.” cent efficiency as a result of adopting some of the principles we are talking about, you are gaining A glass act competitive advantage; not only for your company The £300m Quinn Glass plant at Elton, Cheshire overall but also within your company group,” says is one of the most modern and efficient container Daniels at Rockwell Automation. glass and filling operations in the world. It is also “And this is becoming more and more important. one of the biggest, with 700 employees producing The trend is to require fewer but more efficient and more than 1.4 billion bottles a year. productive manufacturing facilities.” end State of the art materials handling equipment includes automated warehousing and automatically guided vehicles throughout the operation.

An electrostatic precipitator (EP) and catalytic converter ensures emissions of Sulphur, Nitrogen and particulate are the lowest in the sector, and established a new Best Available Technique (BAT), which ensures the plant is running at the highest of eco-friendly standards.

Recycling and green issues are key to the operations. Quinn uses recycled glass – cullet – to produce new bottles, which is melted and combined with limestone, sand and soda ash, the ingredients of glass, at 1600°C. The filling hall, the size of five football pitches, its five lines supplying beers, ciders, soft drinks, is also equipped with Automated Guided Vehicles.

Previously, bottles were shipped oversees to be filled and then returned to the UK for consumption, but this is now done on site, cutting down on transportation costs and making the factory a lot greener.

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More forklift in a smaller package The new Toyota Traigo 48 is the most compact Toyota 48-volt forklift yet. Joining a range of what are considered to be the safest forklifts in the world, the Traigo 48 is engineered to satisfy customer demand for a powerful electric forklift with the capacity to manoeuvre easily in the tightest of spaces.

The Toyota Traigo 48 has load capacities from 1.5 - 2.0 tonnes and offers 3-wheel and 4-wheel models.

All trucks feature unique Toyota technologies, including the Toyota System of Active Stability (SAS) and Toyota AC2 power, proving that sometimes, less, really is more.

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More safety in a smaller package It seems hard to believe, but it is now 10 years since a Toyota forklift protected with SAS made its debut on the BBC Tomorrow’s World programme. Then and now, it represents a unique way of improving the safety of forklift operators, but is safety now a luxury for businesses in the current climate asks Dave Rylance, counterbalance product manager at Toyota Material Handling?

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any businesses in the UK have always prided themselves on exemplary safety records, but no one would be surprised to see those priorities change as pressures on margins grow.

In 2009, Toyota celebrated not only the 10th anniversary of their unique System of Active Stability (SAS), but also the launch of the new SAS equipped Traigo 48 electric counterbalance range.

Genchi Genbutsu

One of the famous Toyota guiding principles is Genchi Genbutsu, or “going to the source”. In new product development this manifests itself as extensive customer research – the source of our innovation. We commission independent surveys of hundreds of truck users across Europe, to determine the buying criteria they believe are key to the success of their business.

Unsurprisingly, factors such as productivity, durability and ease of use are considered to be very important, but safety still consistently appears at the top of the buying list, across markets and across product ranges.

42% of those surveyed during the development of the new Traigo 48 rated safety as their top single buying criteria. This is a substantial lead over the next most valued feature – reliability; rated top by only 15% of respondents.

The rear axle is free to pivot creating a triangle of stability. The truck is stable if the centre of gravity remains within the triangle.

If the centre of gravity moves outside of the triangle of stability, the truck may become unstable

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The commitment to providing safe equipment seems to extend beyond the counterbalance market.

Toyota carried out a similar survey of warehouse truck users in 2008. Again, there was a resounding message that safety is as valuable as ever, with over 60% of respondents from this sector citing it as their single most important consideration.

A clear challenge

I think in the current climate, our customers deliver a clear challenge to the Toyota design team; find a way to deliver the highest level of safety, but without affecting productivity. To this end we examine not only the truck and driver, but also the operating environment, the pedestrians, the goods and the racking; the real applications where our products will be used, to identify ways to reduce risk.

This practice of continuous improvement means that with each new product launch, Toyota strive to deliver new solutions, even on tried and tested systems such as SAS. For example, the three-wheeled model of the new electric counterbalance range will incorporate a new SAS feature, specifically designed for the model.

The mouse trap

One of the biggest risks of forklift operation is the potentially lethal tip-over. This type of accident has earned the grisly moniker amongst drivers of a “mouse trap” because of the tendency of the operator to become trapped by the overhead guard as they attempt to jump clear of the tipping truck.

Under normal travelling conditions, the rear steering axle of the truck is free to pivot, coping with uneven terrain. This effectively creates a triangle of stability between the front wheels, and the pivot point of the rear axle. Instability is caused by the interplay of truck speed, load weight, turning angle and slope causing the centre of gravity of the truck to pitch outside its own area of stability and potentially tip.

One of the most widely known integral features of SAS on a four-wheeled truck is the swing-lock cylinder on the steering axle. If the truck’s centre of gravity moves outside of a stable position, this locks, helping to create a larger area of stability between all four wheels. This stabilises the steering axle and the truck itself.

But many operations require forklifts with compact dimensions and small turning circles, to negotiate tight spaces in stores and on the factory floor. Here there can be a preference for three-wheeled trucks.

To meet the challenge of improving the stability of a three-wheeled truck, Toyota has tailored SAS with a dynamic speed reduction system. Turning rate can be a big factor in causing a truck to become unstable and tip laterally. The speed reduction system slows the truck through corners, using information from the steering position. The rate at which the truck slows can be configured allowing businesses to match the performance of their trucks to the priorities of their site, or even parts of their site.

However forklift trucks can also tip forwards, and in some cases topple backwards with equally disastrous effects. Dynamic mast control is a less well known set of features common to all SAS equipped trucks. Again SAS is actively monitoring and controlling factors such as mast tilt speed and angle when the forks are raised.

This helps to reduce the risk of tipping and the risk of the load being dislodged from the forks and injuring the driver or pedestrians in the area.

This is a perfect example of a safety feature that actually boosts productivity. Drivers can operate confidently, knowing that SAS is in the background ready to “step-in” to help stabilise the truck if needed.

A safety boost

Another challenge to the idea that safety is being relegated to a “nice to have” is the uptake of the Safety + Package. Since the launch of the Tonero gas and diesel counterbalance range in 2007, Toyota has

CASE STUD Y : a focus on safety

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rom the moment you enter the extensive Cummins Turbo Technologies’ Huddersfield site, it is clear they are a company who strive to provide the safest possible working environment for their employees and guests.

The safety culture extends to every area of operations from the loading dock to the production floor, where they produce class leading Holset turbo-chargers destined for some of the hardest working commercial vehicles in the world.

Cummins Turbo Technologies has an outstanding reputation for bringing new technology to the field.

The large Huddersfield site, housing the worldwide headquarters and technology centre undertakes precision grinding and balancing of new units, alongside reconditioning and parts supply for the aftermarket division.

In a truck fitted with SAS, the swing lock cylinder locks, creating a rectangle of stability, helping to keep the truck in a stable state

offered a series of optional +Packages.

Safety +, featuring extras such as a load weight indicator and travel speed limiters, has easily the best selling package on the Tonero since launch. Early orders indicate the same will hold true for the counterpart package on the new Reflex reach truck.

A clear direction

Even ten years on from SAS, Toyota believes that trucks like the Traigo 48 are still a clear sign of the direction of the market; a continuous evolution of improved safety and productivity. Safety systems that were once considered optional will become standard and the innovations developed by the market leaders will eventually be adapted by all. And through continuous research and dialogue with customers, leaders will push safety standards forwards.

A large materials handling fleet supports their operations and they have worked with Toyota to ensure they offer their team the highest levels of safety and quality.

John Tinker, technical supervisor for maintenance, explains: “We have a requirement to move parts and finished inventory across our 16 acre facility, with over 30 units in total.

Working with Toyota means we have a technologically advanced fleet that supports our safety ethos.”

The gas and electric trucks at Cummins Turbo technology are protected by the unique System of Active Stability (SAS), actively monitoring key parameters of the truck’s performance.

Paul Atack from Toyota explains how the latest IC forklifts are helping to protect operators: “A fleet of Toneros are at work in the loading

dock, assisting the fast-paced loading and unloading of the transport fleet.

The instrument panel and overhead guard have been re-designed to give the operator the clearest view when the forks are at ground level, lorry bed height and at maximum height.

In addition, the Tonero has one of the widest mast channels on the market, significantly improving visibility for the operator, vital for operations where drivers make frequent changes of direction.

Fitting with the site safety ethos, the Toneros are enhanced with the Safety+ package, a range of factory fitted options designed to ensure drivers have as much support as possible to operate safely. Maximum speed and acceleration are limited when the forks are elevated and a load weight indicator helps operators to ensure they drive within the capabilities of the truck.”

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WHAT DOES THE FUTURE HOLD FOR UK MANUFACTURING? BDO and RBS are delighted to announce a new seminar, The Future of Manufacturing, for UK manufacturers on Tuesday 1 December 2009.

Featuring keynote speeches from Angad Paul, CEO of Caparo and Rt Hon Richard Needham, International & Commercial Director of Dyson, and a panel of industry experts, The Future of Manufacturing will provide fresh insights into what is happening in manufacturing and what the future might hold.

For enquiries regarding this seminar, please contact: Chris Parsons BDO LLP chris.parsons@bdo.co.uk

Roy Bawden RBS roy.bawden@rbs.co.uk

Manufacturinginaction Putting UK manufacturers under the spotlight Imperial Machine Company Catering equipment

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Developing a strong niche in commercial catering through innovation and bespoke manufacturing.

RGE

Injection moulding

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Growth during an economic downturn is a rare phenomenon. RGE is one manufacturer bucking the trend.

Solvent Resource Management

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Organic recycling

Consolidating its market lead while enforcing best environmental practice is all in a dayâ&#x20AC;&#x2122;s work for Solvent Resource Management Limited.

Ultraframe

Conservatories

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A culture of lean operations has been central to the companyâ&#x20AC;&#x2122;s success.

Precision Disc Castings Automotive

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Continuous company-wide training has been critical to the effective on-site operations.

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Catering to clients’ needs

Developing a strong niche in the commercial catering market through innovation and good customer relations has consistently been the remit of the Imperial Machine Company (IMC).

Tim Brown talks to Tim Tindle, Managing Director, about how the company’s focus on innovation has continued to strengthen their differentiation and a new Welsh Government initiative has assisted them to weather the downturn.

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The client is the number one priority for IMC. In essence,

and counter to most companies, IMC offers product individual customisation options on its product offerings. This ensures its end customers are always completely satisfied with their purchase. While IMC sell to dealers around the world , they take orders on an individual basis and while the company has a set range of base products, each can be modified both internally and externally depending on the needs of the customer.

“In our industry we fill gaps in the market where the main manufacturers choose not to go and we focus on those areas and we focus on flexibility,” says Tim Tindle.

The provision of commercial catering equipment for the hotel and restaurant industry is IMC’s market. The original company was founded in 1906 by Harold Beckett and its early products were potato peelers and silver burnishers. In the 1950’s the company launched a range of food waste disposers and in 1984, IMC diversified into bar equipment, with the launch of the Bartender Stainless Steel Underbar System, which was followed with the introduction of bar refrigeration. In December 1994, IMC became part of Lincat Group, a public company quoted on AIM that owns two other catering equipment manufacturers.

Currently IMC produce four main product ranges: Vegetable Preparation Machines; Food Waste Management Systems; Back Bar Refrigeration; and Under-Bar Serving Systems.

While IMC have a considerable market within the UK, the

Catering equipment Imperial Machine Company

company has also experienced extensive international infiltration with products used by exclusive customers including a host of hotels in Dubai and the Ritz Hotel in Paris and also supplies to an increasing customer base in India. Overall in excess of 40% of their production is exported.

In comparison to the standardisation of most of their competitors, including those overseas, Tindle says that the IMC product range features an enormous number of possible variations. “With our range of Food Waste Disposers for instance we have eleven base models. However, when you multiply that by all the options that are available we have probably thousands of different variations available. We build those to order and we will ship them to any site in the world for installation and tailor the electrical needs to those that the client require for their market.” With this bespoke option, standard machines only comprise approximately 60% of IMC sales with the remaining sales requiring some modification.

Attempting to run a manufacturing plant in such a manner while maintaining the

principles of Lean is undoubtedly complicated. However Tindle says that being able to produce the vast majority of their products and components onsite means that Lean is achievable. “When people visit our factory, they are always interested and impressed by what we do because we do so much in-house,” says Tindle. We are a high value manufacturer. We have our own fabrication shop, our own paint shop and our own machine shop so if anything needs to be constructed in a slightly unique way we are capable of doing that. As opposed to buying in our wiring looms, we also have our own wiring shop which can manufacturer about 200 variants of wiring and if it is 201 by next week, because it means we get another order, then so be it.”

Partly due to this flexibility and partly due to the high quality of the product, IMC’s Food Waste Management is a product area that is currently experiencing a particularly high level of growth. IMC’s food waste disposal solutions now include food waste recycling via composting which is proven to reduce food waste volume by up to 80%, thereby substantially reducing the associated costs and environmental impact of food waste disposal. Currently most commercial food waste in the UK has to be incinerated or land filled, which is not only an environmental issue but also a considerable cost issue with landfill charges increasing every year. The eco-friendly system uses IMC’s food waste disposers and de-waterers in conjunction with a “Big Hanna” in-vessel composter to recycle the waste into high quality compost.

IMC recommends that any commercial catering establishment, but especially organisations such as schools, universities, hospitals, prisons, Ministry of Defence sites, retail parks, hotels and restaurants can benefit from this system. The system operates by first macerating the waste into consistent particle sizes and then passing the waste through one of IMC’s de-waterers in order to extract the solid fraction.

According to Tindle, the IMC range provides the perfect recipe for disposing of food waste and its benefits have been consistently recognised within the industry.

The end compost more than satisfies the requirements of the Compost Protocol under BSI PAS100 test conditions making it one of the most nutrient rich composts available and is, most importantly pathogen free.. The system was originally designed in conjunction with Imperial College in London and has won multiple environmental industry awards. Installations to date, says IMC, suggest that the savings made on direct and associated waste disposal costs can offset the cost of IMC’s equipment and the in-vessel composter in little more than 2 years.

The major benefit of IMC food waste recycling, says Tindle, is to decrease the volume of food waste. “For any business that means a considerable decrease in disposal costs.

Alternatively, if the venue has a flower bed or garden, which is common, the composted waste can be utilised on-site. This means you’re recycling your food waste and you’re reusing it, which is the holy grail of recycling.” According to IMC there are also no issues with this system with regards to odours or hygiene as it is a closed vessel system.

In addition, to continually developing and delivering new products to the market IMC continues to invest in new technology and training initiatives, to help it become, more flexible, leaner and more able to offer customisation. For instance at the end of last year, IMC further invested in its fabrication shop buying two new pressbrakes from sheet metalworking tool company, LVD. “We bought two new state of the art machines in December of 2008,” says Tindle.

“The machines feature Easy-Form® Laser, a laser camera based, ‘real-time’ angle monitoring and correction system that measures each and every bend that we do to make sure that it is absolutely accurate. The machines have a number of benefits including very fast set up times. With an increased bed length of 3 metres we can have multiple set-ups on the one machine. This together with the fast set up times means that we can reduce from large batch sizes to smaller ones and on occasions do single piece flow for bespoke client orders. The investment has increased both our flexibility and efficiency.

LVD Company LVD Company Congratulates IMC on its “Integrated Thinking”

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VD Company, based in Belgium, is part of the worldwide LVD Group. It is a leading manufacturer of a comprehensive range of sheet metal/plate working machine tools and software solutions including: laser cutting systems, punch presses, press brakes, guillotine shears and mid-level automation systems.

Supporting the LVD range of products is their CADMAN® PC-based Windows® compatible software.

“Our equipment contributes to the creation of an extremely large range of products,” says Matt Fowles, group marketing manager at LVD. “Our research and development efforts are focused on providing integrated sheet metalworking solutions to industry-wide problems as well as individual customer applications.”

Companies like IMC use LVD

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equipment to improve their productivity, efficiency and end-product quality. IMC’s “Integrated Thinking” applies two LVD Easy-Form® Series press brakes, each featuring the CADMAN® Touch touch screen control and LVD’s CADMAN offline software to produce precision bar and catering equipment.

The exclusive Easy-Form® Laser system measures and controls the bend angle in real time during the forming process and makes continuous adjustments to ensure that the correct bend angle is achieved. Using Easy-Form Laser, IMC is assured of constant bend angles from the first bend to the last.

Changes in material characteristics no longer influence the bending results.

LVD’s solution for IMC includes integrated offline CADMAN®-B 3D

software that enables direct 3D CAD file import, intelligent unfolding, bending simulation, and automatic program generation. Combined with “real” part bending on the Easy-Form press brakes, IMC has the ultimate solution to ensure in process accuracy, increased flexibility and a shorter concept to product time. The end result is consistently superior bar and catering equipment.

Published in association with: LVD Limited Tel: 01295 676800 Email: sales@lvduk.com Web: www.lvdgroup.com

Catering equipment Imperial Machine Company

“Waste deficiency also improved markedly because we used to typically end up scrapping our first offs because the set up wouldn’t be exactly right. Now because the Easy-Form laser units are doing the measuring, it is set up right the first time. All the programs are loaded in to the offline CADMAN B-3D system, LVD’s offline programming solution for the press brakes. Now if a client has an end user that needs something particular, we can design that in our drawing area, the CADMAN B 3D software will tell the designer if the product can be bent in that way and it will go straight on to the machine. The operator uploads the programme, including which tools to use, where to fix them and the order in which to process the part. All this is proved before we punch any material. So we have less waste, a faster cycle time and we get more flexibility.”

When the recession was approaching, IMC also decided to increase their sales and engineering teams and as a result have been able to release new equipment for niche markets such as the CS range, specifically for fish and chip shops. The company is planning to launch further new products in the new year to further help fight against the recession. “We have increased our employment levels in sales and design during the recession,” says Tindle. “History tells us that recessions end and if you want to exit a recession stronger than when you went in, you increase your engineering resource, you don’t decrease it. When the market slows down, you need to sell harder, innovate better and develop faster with market winning reliability.”

IMC has also benefited from its adoption of a new training initiative introduced by the Welsh Assembly called Proact. The Manufacturers Forum in Wales developed a proposal to assist the fortification of the Welsh manufacturing industry against the impact of the recession and help it emerge even stronger. One of the areas that was identified as needing attention was skills upgrading and training. The Welsh Assembly has used European fund money to offer funds to train people in companies which can see that their sales have slowed down and are considering right-sizing.

At IMC, every shop floor staff member, a total of 48 employees, is currently receiving training from Deeside College, one of the top training colleges in the UK used by Airbus and Toyota as well as IMC. The trainers attend the IMC site twice a week, training staff to level two and level three NVQ standards in a whole variety of subject areas over a nine month period.

It has been in operation at IMC so far for three months and by the end of the period

IMC at a glance Location

Unit 1 Abbey Road, Wrexham Industrial Estate, Wrexham, Wales.

Sector

Commercial catering equipment for the hotel and restaurant industry.

Employees

85

Turnover

£9-10million

Output:

Vegetable Preparation Machines, Food Waste Management Systems, Back Bar Refrigeration and Under-Bar Serving Systems.

History

The original company was founded in 1906

by Harold Beckett. The early products manufactured were potato peelers and silver burnishers. In 1984, IMC diversified into bar equipment, with the launch of the Bartender stainless steel underbar system. In December 1994, IMC became part of Lincat Group plc.

Lincat is a public company quoted on AIM. In 2006, IMC combined all of its manufacturing into one site in Wrexham.

Key Geographical The Middle-East, India, UK Markets all those involved will have received a total of 40 days training.

“That training will be paid for by the Welsh Assembly and we will receive a wage subsidy for each day’s training of £50,” says Tindle. “Effectively it’s costing the Welsh Assembly £177,000 and it’s costing IMC around £100,000. That is as opposed to the alternative of laying people off or introducing short-time working and we are very thankful for that and it means that our employees will exit this recession stronger. Our direct costs and efficiency have continued to be under control, whilst maintaining our staffing levels. With those costs under control it’s much easier to find the upfront funds for investment in extra salesmen and engineers From the company’s point of view, they benefit by being able to maintain their skilled workforce while further improving the skill set of their employees. As a result IMC are in good stead to exit this period of economic uncertainty with even greater flexibility due to the acquisition of a standard skill set across the factory.

“From our point of view it is immensely valuable,” says Tindle.

“It’s really is a win for us, a win for the Government and a win for our employees. It’s brilliant.” end

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Are you sitting down?

Growth during an economic downturn is a rare phenomenon indeed.

RGE Engineering is one manufacturer bucking the trend, however, as TM associate editor Edward Machin discovered.

Founded in 1963, Cambridgeshirebased RGE Engineering is a best in class manufacturer of plastic injection moulded components; injection moulded tooling, and associated plastic design.

The company’s expertise is founded primarily on two sectors: white goods — i.e. washing machines; tumble dryers; door trims; and shower enclosures, among others — and ergonomic office seating components, which comprise 35% and 35% of annual turnover, respectively. Anything not caught by the aforementioned RGE calls ‘trade moulding’, and includes the supply of products and components to the leisure; computing; electronics; childcare; garden machinery; heavy duty; and agricultural industries.

RGE’s corporate headquarters are located in Godmanchester, Cambridgeshire, a 120,000 sq ft manufacturing facility with 56 injection moulding machines.

The company also has UK facilities in Alconbury, Whittlesey, and Yate, together with purpose built factories in Tennessee, USA, servicing both North and Central America, Lithuania, and China — offering low cost, ‘speed to market’ manufacturing.

Says Dan Leach, RGE’s Commercial Director: “While approximately 70% of the group’s turnover is currently UKbased, we have seen a major upturn in global manufacturing and solutions in recent years.” As a result, RGE targeted the development of low cost, offshore

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facilities to enable the company to continue its work with global brands such as for domestic garden products, medical machine enclosures, office and domestic seating furniture.

To highlight, RGE serves a global manufacturer’s Power Tool division with the manufacture of moulded lawnmower bodies.

Says Leach: “Once you become accepted as a valued first tier supplier for one division of a multinational company, it often opens up into other divisions — giving you a pathway to becoming a premium partner, and thus greater traction to new territories. By way of example, having served exclusively the UK division of major electrical services manufacturer, RGE has recently been granted permission to supply the customers Central Europe and American divisions additionally.”

Share and share alike

To further enable this interconnectivity within the business, in 2006 RGE implemented a SAP business management software solution, both within its UK and offshore facilities. As a result, from the group’s headquarters RGE can instantaneously access data from each of its sites — especially significant given that the company has recently established a central costing centre in Godmanchester. Concedes Leach: “As seems to be the common experience, we found the transition somewhat challenging. However, now that we are fully understanding of the system, it represents one of the most vital aspects of the company’s winning new business.”

He explains: “In many instances we implement a multi-continent strategy for our customers. Similarly they may seek to move between territories due to currency fluctuations or logistics requirements. That RGE has a central costing centre which allows us to access complete sets of offshore facility costing data at the touch of a button gives a world class degree of flexibility to the service we offer our customers. Indeed, when taken with the ‘live’ auditing schemes and practices that RGE utilises, the odds of securing new business when a client visits one of our facilities are high.”

Injection moulding RGE

Coupled with the technical processes of data interconnectivity, central to RGE’s remaining as a best of breed manufacturer is the degree to which implementing ‘headquarter culture’ throughout the group is seen as vital.

Consequently, key personnel from RGE’s offshore manufacturing teams in China, Lithuania, and the US regularly visit the UK headquarters and have been heavily inducted into the RGE ethos. Moreover, says Leach: “We have developed an initiative whereby our Chinese employees reside in the UK for between three and six months, working alongside our teams in a unique, practical knowledge sharing programme.”

in the health of business as a whole, and aren’t particularly enthused by an over-reliance on one sector — however successful it may be.”

While the initiative initially extended only to managerial staff, such was its effectiveness that general toolmakers are now encouraged to take sabbaticals within the group, bringing their considerable experience of productivity and engineering to bear on their British counterparts — and vice versa. Says Leach: “Perhaps only naturally there was a degree of skepticism prior to their arrival. The impact they made, however, was both immediate and tangible, and that both parties are able to recognise the positive influence of the other on their day to day work is testament itself to the initiative’s success.”

Central to enabling growth in the most demanding economic conditions in living memory is the company’s business development department, which Leach heads. “Given the sector-leading expertise of RGE’s design and engineering team, and coupled with the aforementioned, the vast majority of new business is won thanks to our design, tooling and manufacturing as a complete bespoke proposal,” he says.

Tellingly, while the recession has been challenging for many UK businesses, manufacturers included, it has been RGE’s greatest opportunity for growth. Explains Leach: “The companies that continue to win new contracts have been those who re-evaluated their costs, opened streams within the supply chain which were traditionally closed, and considered new partners with flexible and unique offers. We are proud to say that RGE can count itself as such an organisation, having seen one of the largest growth years in our history during the economic downturn. Indeed, thanks to the preparation of senior management, not only have we been successful in expanding our portfolio significantly, but the company’s traditional accounts have each grown in value through the credit crunch.”

“As such, RGE is largely unique in the sector, and it is this dedication to providing a total solution package that enables us to remain ahead of the chasing pack.” end

Future

While RGE’s seating portfolio principally concerns the manufacture of office furniture, the company has been diversifying into adjacent sub-sectors with, says Leach: “Fantastic growth in the UK.” Moreover, the RGE’s global accounts expansion strategy continues to go from strength to strength, retaining its flagship blue chip contracts while simultaneously expanding into other accounts and territories. The group thus targeted an expansion of the number of ‘premium partner account’ it holds as central to any mid and post downturn strategy. In essence, says Leach: “Businesses through the credit crunch have rationalised so as to streamline the flow of superfluous links on the supply chain. As a result, paring back to a smaller number of premium supply partners will enable faster turnover and sharper profits for both parties.”

One caveat to such unbridled development, cautions Leach, is that: “Our white goods sector is diminishing as an account, but RGE see that as both a good and bad thing. Of course any diminishing of market penetration is disappointing, but as a company, we arguably, had too large a proportion of our business in one sector, thus creating an imbalance of risk. Indeed, when tendering for new accounts, our potential customers are greatly interested

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This is where HFL Risk Services can help. Our systematic and structured approach to assessment of Process Safety Management allows gaps to be readily identified, whether they are against specific areas of legislation (COMAH, PSSR, DSEAR, EPR (IPPC), etc.) or industry best practice. Audits can be undertaken at any stage, including ahead of Intervention Visits from the Regulators, to ensure resources are targeted effectively.

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Organic recycling SRM

Recycling?

Problem Solvent Consolidating its market lead while enforcing best environmental practice is all in a dayâ&#x20AC;&#x2122;s work for Solvent Resource Management Limited (SRM). As Tim Brown discovered from operations director, Tony Walmsley and commercial director, Richard Butcher.

Solvents are used in industries including chemical,

pharmaceutical, agro-chemical, printers, paint production and in everyday items such as paint, cosmetics or cleaners. The solvent market has changed dramatically over the past two decades. Infamous chlorofluorocarbons (CFCs) were once the overwhelming solvent choice for many market segments.

Today, there are heavy restrictions on CFCs and chlorinated solvent use due to environmental concerns including ozone depletion. Over the same period, waste minimisation and sustainability have become everyday parlance and the waste hierarchy has become enshrined in environmental legislation.

Solvent recycling is very much in tune with achieving such aims and meeting these directives.

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Organic recycling SRM

UK based Solvent Resource Management Limited (SRM) operates one such solvent recycling business. As one of the largest organic waste material recyclers in Europe, SRM processes nearly 400,000 tonnes each year, employs over 300 people on seven sites and has an annual turnover of approaching £40 million. “Our biggest product line is solvent recovery,” says Walmsley, “which involves taking in waste solvents and recovering them back to solvents that can be sold and re-used within the market as equivalent or similar to virgin products.”

SRM treats waste in accordance with the European waste hierarchy and recycles or disposes of it by the best practicable environmental option. The company is committed to respecting and protecting the environment and preventing pollution.

In doing so its activities are covered by an environmental management system certified to the requirements of ISO 14001.

The company has developed rapidly over recent years through organic growth and strategic acquisition. One sign of this is the development of its European activity and SRM now employs multi-lingual agents in all the main markets in Europe.

It is committed to providing customers with a specialised waste management service in the chemical and waste-toenergy markets in which it operates. It handles material in any quantities and has the capacity to handle entire shiploads.

Impressively, the environmental advantages of engaging in solvent recycling are matched by the commercial reward. According to Butcher: “The main drivers for companies using us, as well as wanting to be environmentally friendly, is the commercial benefit. As in, they can get paid for the waste rather than having to pay to dispose of it and then we can unlock the value within that waste... in some cases up to several thousand pounds per ton.”

“

“

SRM is able to use the organic waste from its solvent recycling process to create an alternative energy substitute for use in cement and lime kilns The recycling method encompasses a distilling process which relies on the different boiling points of the waste components to separate the different end products. According to Walmsley, the process is extremely effective and solvents can be returned to market in near virgin state for almost indefinite re-use.

SRM Ltd at a glance Location

Middleton Road, Morecambe, Lancashire.

Sector

Organic material recycling.

Employees

300

Turnover

£40m

History

SRM was established in 2000 from the acquisition and merger of 2 independent recycling companies, namely CMR and SolRec. In 2003, SRM acquired a further distillation facility from Croda. Profuel and MRM operations were set-up in 2003 and 2008 respectively.

Geographical areas of operation:

UK, Ireland and Western Europe

“Very often there is more than just one solvent component in the waste stream that can be recycled. The distillation process separates individual components which can either be returned to the originator or sold on the open market.

We can recycle many different solvents including alcohols, hydrocarbons, acetones, acetates as well as more exotic chemicals such as tetrahydrofuran (THF), dimethylformamide (DMF), pyridine and acetic acid.”

As part of Heidelberg Cement, the worldwide building materials group, SRM has access to a valuable international network of expertise and experience.

SRM’s customer service centre is based at Morecambe in Lancashire. From here it co-ordinates operations for its sites in Morecambe, Sunderland, Tyne and Wear, Knottingley in West Yorkshire, Rye in East Sussex and Ketton in Rutland.

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Organic recycling SRM

The company also incorporates two further products. Profuel is another alternative fuel for cement kilns which is made from paper and plastic predominantly from municipal inputs.

Companies take municipal waste, treat it, sort it and if it can’t be directly re-cycled, SRM can convert it into another calorific substitute alternative fuel. SRM’s sister company, MRM, runs their Alternative Raw Material program which takes minerals and inorganic materials and re-cycle them as alternative raw materials within the cement industry.

It is without a doubt that SRM’s active continual improvement program has contributed to their holistic and

highly successful approach to recycling. Part of the continual development and improvement in the business is demonstrably as a result of their project based approach to problem solving and the well organised project reviewing process. “Everybody is actively engaged in a continuous improvement effort,” says Butcher. “This includes top to bottom regular reviews across all operational areas of the business and all active projects are reviewed quarterly by the board of directors. Furthermore, our CI approach has been successfully adapted to meet the needs of our customers through the introduction of Stream Improvement Plans (SIPS) with many of them.”

“

Our CI approach has been successfully adapted to meet the needs of our customers through the introduction of Stream Improvement Plans

“

It is this connection with the cement industry that provides the second major element of SRM’s business model. The manufacture of cement and lime is very energy intensive. SRM is able to use the organic waste from its solvent recycling process to create an alternative energy substitute for use in cement and lime kilns. The substitute fuel, called Cemfuel, replaces the need to burn coal and in some cases has achieved a reduction in emissions. Not only is there an environmental benefit but in the same way as with the solvent recycling, there is also an economic benefit as the Cemfuel is a cheaper energy source than coal.

As an environmentally sensitive and economically sensible operation, SRM demonstrates the kind of initiative that will be vital as the world moves towards a low carbon economy.

By focusing on the needs of a particular niche market, SRM have developed an effective means of contributing both to the effective operation of industries producing organic waste while also providing an effective alternative fuel for the cement industry. The company’s rapid growth is testament to its market comprehension and its future outlook is promising as the organic waste and alternative fuel markets grow and the company’s capabilities continue to expand. end

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Beyond the

glass ceiling

Lancashire-based Ultraframe are market leaders in the design and manufacture of conservatory roofing systems, with over one million roofs installed on conservatories throughout the UK to date. A culture of lean operations has been central to the company’s success, says CEO Mike Price.

Ultraframe design and manufacture conservatory systems.

Historically, it has focused primarily on the roofing element of the conservatory, and, as such, is recognised as the company that firstly designed and developed the conservatory roofing system. However, the company is currently diversifying into other related products, using its core competencies to expand the business.

As part of its lean journey, and by improving space utilisation, the company has consolidated back to fewer manufacturing, warehousing, and

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distribution centres over the last few years and is based in Clitheroe with approximately 250 employees.

Says Ultraframe CEO, Mike Price: “I joined in 2005 as part of a restructure within the UK board – at that time the business was part of a plc with a turnover of £73m and made £5m profit. This had reduced from a peak turnover of £90m in 2003, with a profit of ₤28m. Before the business was floated it became successful very quickly, and was essentially a monopoly as there was no real competition.”

With the emergence of competition from 2003 the business started to decline, resulting in changes at board level. The new boards plan was to stabilise the sales and to implement lean to become more profitable. Ultraframe managed to stabilise turnover in 2006/7 — at around £55m — and

Conservatories Ultraframe

Shingo Prize

“We started our lean journey when I arrived in 2005,” says Price. “My background was that I’ve led other award winning companies in the past, e.g. MD at PAC International which won the Best Electronics Factory in 1998 and was head of the Manufacturing Advisory Service in the North West — delivered

by The Manufacturing Institute — when it was formed in 2002. I originally came to Ultraframe on a consultancy basis in order to identify a suitable strategy for operational improvement. I was then invited to join the business and lead the implementation of the changes. From 2005-2007 we implemented what we have called the vision programme which is a serious of projects to implement lean, across the whole enterprise.

In 2007, Price decided to put Ultraframe in for the Best Factory Award for benchmarking purposes. The company won the Best Engineering Plant award, which was the first recognition in terms of best practice in manufacturing excellence.

More importantly, it gave Ultraframe good benchmarking feedback and identifying some areas where it could further improve.

Towards the end of 2008 Price were approached and asked whether Ultraframe would be interested in participating in the Shingo Prize, which for Price was: “Another good opportunity to have some even better benchmarking. We’d made some further improvements and we wanted to see where we were at - the Shingo Prize was a good vehicle for that purpose. We entered the process which is quite robust – firstly we entered a 150 page report documenting our lean journey.

The report achieved a level sufficient to warrant an audit, so then a team of UK and USA manufacturers and academics visited us for two days to look for evidence of what we’d said in the report and dig deeper. Following the audit, they scored us against the model criteria and we were delighted to achieve a bronze medallion.”

Lean

Says Price: “The first thing in terms of Ultraframe and lean is that we didn’t have a choice. We could not continue to operate in the ways we had previously because the landscape had changed.

When I joined in 2005 the business was

in difficulty, and we had to take a “top down” approach to implement lean and generate savings for the business in order to retain a reasonable margin.”

“We had a structure that was quite hericarchial, and there were communication issues between the board and the shop floor. Guys on the shop floor initially didn’t really know where the business was at because they were still quite busy and they hadn’t been told the long term implications and the fact that the roofs were having to be sold for a lower price.”

In 2006 the company broke even, but it turned a profit of £3.5m in 2007 from lean improvements and rapidly implementing a series of projects which enabled it to improve the profitability of the business. In 2005, Ultraframe created a vision for where the business could get to operationally, with “spaghetti diagrams” showing the product routes through the premises. The first steps in the lean journey were thus to reorganise the factory and relocate the various manufacturing process steps to achieve better flow of products. By the end of 2006 the company took a more enterprise wide view and implemented value streams and value stream managers with “end to end” ownership and also started to look at the whole business and not just manufacturing.

“

On Time In Full delivery to its customers in now in excess of 98%. Every roof the company makes is bespoke to order because each conservatory is designed for a specific application

“

improved profitability relative to sales by successful lean implementation. Since 2008 the company started to see the effect of the credit crunch reduce the size of the market, as consumers think twice about a “big ticket spend”. Despite its turnover reducing, however, Ultraframe retain a larger share of the market now than it did have in 2006.

“We launched the vision programme which was 12 projects which were interrelated and tackled different areas of the business in parallel,” says Price. “The major benefit is the culture change, and now everybody understands where the business is at, good or bad, and we’re all harmonised in our objectives from the boardroom to the shop floor.”

“We’re very open now in the way we communicate with the team, and have gained a lot of trust and respect across the organisation, whereas in the early days it was quite confrontational because the employees on the shop floor didn’t perhaps understand the issues we faced. Now we’ve engaged the whole workforce in lean. So far it’s been mostly driven “top down” by necessity, but what we’re trying to do is to build from the bottom up, and have started taking more of a focused approach now on the shop floor level to build up a fuller understanding of the tools, systems, and principles across the board.”

The company is doing NVQs in business improvement techniques and lean office training, in addition to the more radical step change projects. Similarly, it implemented a project called “Lean Classic” in 2006. The Classic product is Ultraframe’s most popular roofing systems, and represents the bulk of our volume, selling over 1m in the UK. Says Price: “The way that it was manufactured prior to 2006 was very traditional, in that we had 22 skilled roof assemblers who would effectively make the roof on their bench, their way.

The components were cut and profiled on CNC machining centres, but were then fed into an “accumulator” where work

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Conservatories Ultraframe

in progress would queue for about a day, waiting for a roof fabricator to complete the product. There was a very little standardisation because each roof builder had their own way of doing things.”

Over a period of 12 months in 2006 Ultraframe implemented a number of manufacturing cells, with operatives now able to move around different cells and work from standard operating procedures that are pc based. The accumulator work in progress has been taken out completely, and the company has squares marked out on the floor close to the point of use where components are “pulled” from the machining centre into the space.

Essentially, therefore, Ultraframe moved from a traditional one person, one roof environment to a world class cellular manufacturing environment.

Product quality

One of the key objectives of the Lean Classic project was to help Ultraframe increase its productivity. Price benchmarked the company’s productivity against other manufacturers, finding that it averaged 3.2 roofs per person per week.

Says Price: “That was only mediocre, with some of the best in class producing five or six. The objective was therefore to get to that point by implementing lean. As a result of doing the project, we very quickly got to in excess of five roofs per person per week, and we believe we are now best in class at six roofs per person per week.”

He continues: “We used to have a work in progress that would take one day that we’ve reduced to a matter of hours.

Previously we had an issue with our machining centre quality supply into the manufacturing area, which had a reject level of 14%. When we implemented lean and took away the stock, this forced us to then focus on improving the machining centres and supply into the cells – we reduced rejects very quickly down to 6%, and now it’s down to virtually zero defects.”

In terms of capacity, this increased on a single shift from 49 roofs to 65, which in turn has enabled Ultraframe to improve on time delivery performance. On Time In Full delivery to its customers in now in excess of 98%. Every roof the company makes is bespoke to order because each conservatory is designed for a specific application. Ultraframe draws the roof on its CAD system, and the product will be manufactured and delivered to the customer typically within 3-5 days.

Suppliers

Says Price: “The reason why we’ve had a warehouse in Bedford is because it’s

full of PVC stock as a result of overproduction by our suppliers – one of the deadly “seven wastes. What we’ve done is encourage our suppliers to implement shorter batch runs and to reduce order quantities to be more in line with customer requirements. We’ve now made enough progress to remove one of our warehouses from our supply chain. Having said that, there’s still lots more opportunity for further improvement!”

The company has always been aware of its traditional core competencies in engineering design, which the success of the business has been built on. However, it is only been very recently that Ultraframe has been recognised as having a core competency in operations. The company is 26 years old, and has been borne from innovation and, says Price: “We’re looking to retain that going forward, so we’ve continuously invested in innovation and the development of our products.”

“Next month we’re releasing a new product range which is the next step in the evolution of the roof and its going to be far better than anything else in the market place. It has a number of features which are unique to Ultraframe and will address some of the potential environmental issues associated with having a glass box on your house, which could result in being too hot in the summer, or too cold in the winter. So we’ve overcome those issues by engineering the roof to incorporate a range of shading products into the design, so the roof for the first time is designed to provide shading or to provide heat gain from the sun, as appropriate, to suit the environmental conditions. We have the IPR on the design.”

As a business, Ultraframe has core skills which can be used in other applications, but is diversifying into other areas with related products and alternative materials. The company’s current products have an aluminum structure with PVC cladding, which still has a place in the market. However, given that there are other products which customers require Ultraframe is diversifying into alternative material types and composites for both roofs and windows and doors.

Says Price: “We’ll shortly be manufacturing some of those products here in Clitheroe. We are the UK market leader, but the market has clearly reduced in size, so we have developed a three year plan that will get us back to £50m turnover in the next 3 years by introducing new products and markets.

“We’ve recruited an export director, and he is currently fine tuning his plan for growing our export sales. We have been exporting for a number of years, but it has been a little ad hoc in the past. We currently sell to 12 countries in the world, but we’ve never really taken a structured approach to the way we do it – it’s about understanding what product requirements we need for certain markets, and designing in those special needs for those markets. Our highest export sales at the moment are to France and we’ve recently produced some new developments which will further enhance our French product base.” end

107

gai n train On the

With one of the foremost ferrous foundries in Europe, Precision Disc Castings places a culture of continuous companywide training as central to its operations.

TM investigates.

Based in Poole, Dorset, Precision Disc Castings (PDC)

specialises in the design, development and casting of automotive break discs for clients including Audi, Bentley, LDV, Lotus, Mitsubishi, Renault, and Rolls Royce. The foundry specialises in the manufacture of — predominantly ventilated — automotive brake discs, utilising two Disamatic moulding lines, and with a total annual capacity of 50,000 tonnes.

PDC operates under a global holding company, EURAC, one of Europe’s leading integrated producers of automotive brake discs and drums, offering a full design and manufacturing service from casting through to finished product. Through its two foundry operations, PDC (UK) and BAK (Czech Republic), and machining companies HPM (UK) and P.B.S. (Germany), the group is positioned as a world leader in the manufacture of brake discs and drums.

What has enabled PD Castings to remain as a best in class manufacturer, despite, as senior site manager at Poole, David

108

Automotive

Precision Disc Castings

“For example, PD Castings is technically categorised as an SME, despite the fact that as a group we are considerably larger. As a result, we retain the most positive aspects of a small company mentality — i.e. flexibility and responsiveness. This enabled us to react quicker than many to disparaging signs in the marketplace, taking very difficult decisions in terms of right-sizing the business, but which ultimately has allowed PDC to maintain its position as a best of breed manufacturer of automotive brake discs.”

Train to Gain

In line with PD Casting’s dedication to lean and efficiency processes, in June 2008 Eggleston was appointed as process improvement manager, replacing his previous role as technical manager.

Such a position is, he says: “Significantly more focused on developing a culture of lean thinking within the business.”

As part of a company-wide initiative, Eggleston was trained in Six Sigma black belt, designed for those who “lead, deploy, and implement” an organisation’s lean business strategy.

approximately 23% of the workforce trained to this NVQ Level 2. This means that in any one department there are between two and four people formally accredited by Train to Gain, and able to lead projects in their area of specialisation.

In the three projects that made up PD Casting’s initial training, Eggleston estimates that the company has saved over £100,000 in productivity gains, together with vastly improved workflow and floor space utilisation. He says: “Especially given the current economic climate, to realise

“

PD Castings has secured funding for another twenty employees to undertake the Train to Gain initiative. As a result, by the end of 2009 the company expects to have approximately 23% of its workforce trained to NVQ Level 2

“

Eggleston concedes, a reduced order book due to the fall off in automotive sales? “While constant benchmarking is crucial to our continuing success, being able to operate with the agility of a smaller company has also been particularly important,” he says.

such substantial cost savings was particularly pleasing for the company. More than that, however, our commitment to staff development has effected a noticeable culture shift within the business, as employees across all levels of seniority ensure that Precision Disc Castings is positioned as the worldleading manufacturer within our industry.”

PD Castings runs a concurrent business improvement techniques course with Train to Gain, a government initiative which seeks to improve the skills of employees as a route to more effective business performance. The company has recently welcomed the return of ten employees from the scheme, with a further ten then completing their initial classroom training over a period of three days. Once the academic training has been signed off, employees undertake three practical projects, lasting two days each, upon completion of which accreditation is awarded. With practical projects running for a month in total, it is a four month period from initial training to final completion.

Such a focus on lean processes is, says Eggleston: “A pronounced effort within the company to create a multidisciplinary, multi-departmental culture of continuous improvement — inclusive of those from senior management down to the shop floor.” PD Castings has just secured funding for another twenty employees to undertake the Train to Gain initiative. As a result, by the end of 2009 the company expects to have

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Precision Disc Castings

A sustainable future?

PD Castings recently featured on an extended news feature documenting the visit of Liberal Democrat MPs Nick Clegg and Vince Cable to the plant.

Says Eggleston: “In their accompanying interviews, both Clegg and Cable highlighted the absence of a level playing field with regard to electricity chargers

“

20 years ago our company represented 1% of the UK’s grey iron production — we currently represent 25%

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across Europe. Given that we are a hugely electricity-intensive manufacturer, part of our future strategy concerns the regular lobbying of MPs and ministers to highlight what might be our ultimate plight.”

Indeed, further highlighting the potentially perilous state of British heavy

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manufacturing, the number of UK-based foundries has decreased dramatically in the last two decades. Laments Eggleston: “20 years ago our company represented 1% of the UK’s grey iron production — we currently represent 25%.”

Given the necessity for an industry-lead focus on sustainability, therefore, does PD Castings walk the walk, so to speak?

Confirms Eggleston: “The nature of our business means that we have waste products that as a company we seek to minimise the impact of wherever possible. For example, because PD Castings manufactures cord products and ventilated discs, as a by-product we produce a considerable volume of moulding/green sand — an aggregate of sand, bentonite clay, pulverised coal, and water.”

Because PDC seek to dispose the equivalent amount of byproduct as is used in its operations, the company targeted the road building sector as an industry with which it could achieve this. As a result, PD Castings were the first company in the UK to successfully complete, a government scheme to sell excess green sand to road builders. Says Eggleston: “This commitment remains particularly important to a sustainable future, not only for PDC, but the industry as a whole.”

“Together with our training and continuous improvement drives, we feel this aspect of the company’s future strategy to be especially important in ensuring a thriving heavy manufacturing sector. Moreover, as a recgonised leader in the industry, we must lead by example with regard to the minimisation of waste — anything less would be a shirking of our responsibilities.” end

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12/11/2009

www.themanufacturer.com November 2009 Vol 12 Issue10

The Tower Hotel, London

THE SHORTLIST Once again the quality and quantity of entries to The Manufacturer of the Year Awards has been outstanding. Quite rightly UK manufacturers are proud to promote their successes and demonstrate that the industry has a resilient and vibrant future, despite the current challenging climate.

Our judges have worked very hard to ensure the companies which have been shortlisted truly reflect world class excellence and best practice standards, meeting the criteria set for each respective award precisely.

The judges complimented the overall field as a whole, remarking that despite the pressures companies have faced this year, the standard of entries has been remarkable.

We would like to thank everybody that entered this year and are delighted to announce that the following companies have been short listed:

Leadership and Strategy Drallim Industries Inspirepac Kerrygold Foods Pentagon Chemicals Seven Seas Design and Innovation Advanced Recycling Systems Alumet Systems Blueberry Foods e2v technologies Glen Dimplex Home Appliances Hozelock Nazeing Glassworks World Class Manufacturing e2v technologies Elekta Howard Hunt Group Sheffield Forgemasters International People, Skills and Productivity Alumet Systems Chesapeake Branded Packaging C-MAC MicroTechnology Drallim Industries Ginsters Hozelock

Supply Chain and Logistics e2v technologies Hozelock Pentagon Chemicals

The winners will be unveiled at The Manufacturer of the Year Awards ceremony at Londonâ&#x20AC;&#x2122;s Tower Hill Hotel on November 12th.

Book your table now!

Contact David Alstin on 01603 671307 or email d.alstin@sayonemedia.com

A must-know guide to environmental legislation

Sustainable Manufacturing Avon Metals Boss Design Kerrygold Foods Lush Manufacturing McCormick UK Paul Fabrications Pentagon Chemicals SME Manufacturer of the year Alumet Systems Avon Metals Drallim Industries Hawkshead Relish Company Hi-Technology Group Pentagon Chemicals Automotive Michelin Tyres Morgan Motor Company

Special report

Aerospace and Defence Alumet Systems Thales Training & Simulation

m at er i al s h an d l i ng f o r S u c c es s

Handling materials becomes a business-critical science

Food and Beverage Cranswick Country Foods Ginsters Hawkshead Relish Company Linpac Packaging Pharmaceutical and Medical Devices Catalent Pharma Solutions Seven Seas Export Manufacturer of the Year Boss Design Sheffield Forgemasters International

Design and innovation

How a design makeover increased one companyâ&#x20AC;&#x2122;s sales by 54%

People and skills

ACAS on dispute management

www.themanufacturer.com November 2009 Vol 12 Issue 10

IT in Manufacturing Drallim Industries Flambeau Europlast Hansatech EMS Hozelock Pentagon Chemicals Renthal Witwood Food Products

Wastewatchers

Operations and Maintenance e2v technologies Ginsters Linpac Packaging Linpac Storage Systems

Interview Hugh Jones

The Carbon Trust