The Manufacturer - November edition by The Manufacturer

www.themanufacturer.com November 2008 Vol 11 Issue 11

When the

goi n g gets

Market conditions are always changing. Barclays Commercial Bank can provide a range of solutions to help your business prepare for that. From protecting against interest and exchanage rate volatility, to managing your cash and liquidity effectively, to bespoke funding solutions. Our specialist Manufacturing team has the industry specialism to provide your business with the tailored support you need. By thinking ahead we’ll help you face any storm. To speak to Ray O’Donoghue, Head of UK Manufacturing call 07775 540 741 or visit www.barclays.co.uk/manufacturing

tough... Team-working to success at W L Gore & Associates

Global variables

Juggling the economy

Manufacturing innovation Survival of the fittest

The Manufacturer LIVE 2008 Event and awards review

Appointments The sector’s top jobs

www.themanufacturer.com November 2008 Vol 11 Issue 11

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Interview

George Kessler CBE Group deputy chairman, Kesslers International

Source of Supply

CEO’s comment

Celebrating success Welcome to the November issue. This month we celebrate

the achievements of manufacturers from throughout the UK by way of our annual awards. The winners were announced during a fantastic evening at the ExCel Centre in London. The Manufacturer of the Year Award was presented to Willerby Holiday Homes by Alex Burns COO at the RBS sponsored AT&T Williams F1 team, and the category winners were Drallim Industries, Inspirepac, Converteam, C-Mac Micro Technology, Contour Premium Aircraft Seating, Boss Design, Pentagon Chemicals, and Willerby Holiday Homes with its second accolade of the evening. Turn to page 50 for our Manufacturer LIVE 2008 review, which includes details of all of the awards. We have another packed issue for you this month, including a lead interview with George Kessler CBE who discusses the changing face of the manufacturing sector and the need for cultural change within an industry that is faced with many challenges. We are also focused on how the recent economic turmoil has affected global manufacturers as well as providing ideas for beating the downturn, through energy improvement strategies and sensible recruitment processes for example. We also take a look at the team culture that has been pivotal in the success of Gore – manufacturer of the renowned GORE-TEX fabric. Don’t miss, also, the next instalments of our Lotus and Kanban Sheet Metal diaries. To conclude, a couple of invitations. Firstly, and proof that there is a such a thing as a free lunch (well, dinner actually), the next two Manufacturer Directors Forum dinners are scheduled for 4 December in Manchester and 11 December in London – if you would be interested in joining us just drop me a line. Secondly, I am pleased to announce the first in a series of Masterclass seminars will be held on 9 December in London. We have been working closely with Crimson and Co to provide a comprehensive one-day programme focused on the Red Line methodology that promises efficiency savings of up to 40 per cent with no capital outlay – again, if you would like more info do get in touch.

Nick Hussey – Chief Executive Officer

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Head Office Elizabeth House, Block 2, Part 7th Floor, 39 York Road, London SE1 7NJ T + 44 [0]207 401 6033 F + 44 [0]0207 202 7488 www.sayonemedia.com ISSN 1477-3201 ‘The Manufacturer’ is registered with the Audit Bureau of Circulations ABC application approved 16/05/08. Copyright © Say One Media 2008.

News and features 4 News

Manufacturing news

News in brief from the industry

11 Lean practice Just Jones

Recession is a perfect time to take advantage of lean, says Dan Jones

13 Economics

Are there any more shocks out there?

David Smith ponders over what post bank bailout life has in store for us

14 Interview

Skilled up in Stratford

George Kessler CBE, group deputy chairman of Kesslers International, calls for a cultural revolution to ensure sector longevity

18 Lead story

Global variables

Colin Chinery investigates the effect the economic climate is having on global manufacturing businesses

22 Leadership and strategy Rethinking the rule book

W L Gore & Associates (UK) explains how it has achieved success through employee appreciation

26 Design and innovation Survival of the fittest

Roy Pulley of MAS WM discusses the importance of innovation in today’s manufacturing sector

30 Regaining ground

The British are fighting back in the kitchen, bedroom and bathroom industry, says Tony Bodsworth of Daval

34 Skills and productivity Agents of choice

Becky Done examines the recruitment process and how it can be made easier and more efficient

37 Skills and productivity Case Study

TAC Europe explains how it can help manufacturers to meet their resourcing needs

38 Logistics and supply chain

Demand chain management – what’s in a name?

Demand chain management in manufacturing is changing, says Mark Greatrex of Lakeview

42 Operations and maintenance Maintaining competitive edge

How can a well-planned maintenance programme be of benefit to operations? Ian Ritchie of Brammer discusses

Contents Sustainable manufacturing 46

Energy improvement – the bigger picture

Russell Page of Picme explains how an holistic approach to energy improvement can result in real savings

The Manufacturer LIVE 2008 50

Catch up on all the action from this year’s event, including details of our award winners

Global focus 60

Asia’s latest economic star

As China’s manufacturing costs continue to rise, is Vietnam becoming a more popular alternative?

A diary of product development 66 The Evora journey

The second instalment in our diary series following the development process of Lotus’ new Evora model

A diary of a takeover 67

Kanban Sheet Metal: the next stage

The third instalment of our diary series tracking the developments at Kanban Sheet Metal

Appointments 116

Top jobs in manufacturing

The pace to look for industry job vacancies

Manufacturinginaction Automotive –

Precision Disc Castings 89 Packaging –

Presentation Products 92 Heating equipment –

Quinn Radiators 95

Catering equipment –

IMC 105

Valves –

Broady Flow Control 113

Factory of the month Willerby Holiday 70 Homes “Everyone involved in this business at every level feels extremely proud of our achievements at the 2008 Manufacturer Awards. Our success comes as recognition of a massive team effort”

Newsinbrief Rolls-Royce’s Dalgety Bay

plant in Fife has been awarded a £13 million share of a £235 million Ministry of Defence (MoD) contract. The site will be responsible for providing power and propulsion equipment for the new Royal Navy carriers. “This is welcome news for employees at Dalgety Bay,” said John Nicholson, managing director of the site. “We’re now working with our suppliers with a view to starting manufacture onsite early next year.”

Nestlé has been ordered to

take two of its milk powder products off the shelves in Taiwan over a dispute relating to the levels of melamine they contain. The firm said the products were safe and that “minute traces exist in the natural food cycle.” The Taiwan authorities didn’t appear to be insinuating that the products were dangerous but said the levels were higher than the laws there permit.

British Sugar, with its sister company Silver Spoon, has become the first sugar business to certify the carbon footprint of its product using the new PAS 2050 method – the world’s first method for assessing the lifecycle greenhouse gas (GAG) emissions of goods and services. The firm’s homegrown granulated white sugar was assessed to produce 0.6 grams of CO2 equivalent per gram of product.

Manufacturers that work

with schools and colleges have until the last week in November to submit their applications to deliver the new Diploma in Manufacturing and Product Design for 14 to 19 year olds from September 2010. The diploma has been developed to help equip young people with the skills and knowledge needed to pursue a career in manufacturing and related industries.

Specialist Glass Products

(SGP) has increased gross value added by £1 million in one year thanks to Manufacturing Advisory Service (MAS) advice and support. The company has also increased turnover by 18.5 per cent and created five new jobs, and the improvements have enabled the firm to invest in new equipment.

Awards: Ceremony success shows proof of UK manufacturing sector resilience

The Manufacturer Awards 2008 winners are announced! The winners of The Manufacturer Awards 2008 were announced on 15 October at the ExCel Centre ceremony, with Willerby Holiday Homes taking home the coveted Manufacturer of the Year award. The event was attended by over 400 senior figures from across all sectors of the UK manufacturing industry and was opened with a keynote speech from Alex Burns, Chief Operating Officer of the Williams Formula One team. Nick Hussey, CEO, said: “Given the current climate it was fantastic to have so many manufacturers attend this year’s awards. I’m delighted for Willerby Holiday Homes and all the winners and shortlisted companies. We all realise we are in for a tough couple of years but the quality and quantity of the entries demonstrated the strength of the UK’s manufacturing sector.”

Colin Jeffrey, production director of Willerby Holiday Homes, said for the company to be recognised by industry experts for its efforts was an accolade that made him very proud. He said: “This achievement is down to everyone who works for the company and is testament for details of all the to the effort awards winners in they put in. our Manufacturer It’s about LIVE 2008 review a clear message that everyone understands. Everyone knows where we’re going; everyone’s on board and everyone’s on message. “We recognise we’re in a very difficult time but that just means we had to do things even better when we were already doing them well.”

Go to page 50

Automotive: SMMT figures make more positive reading for troubled industry

UK car production five per cent up on last year As more and more car manufacturers move to cut production levels, figures from the Society of Motor Manufacturers and Traders (SMMT) reveal that 4.9 per cent more vehicles have been produced in the UK so far in 2008 compared with this time last year. In September there was a 2.5 per cent month-on-month rise in production made up of a 2.4 per cent rise in cars and a 10 per cent rise in commercial vehicles. This rise must be balanced in the context of the production figures from August though, when there was an 18.6 per cent fall in production. SMMT chief executive Paul Everitt gave a positive summary of the grand picture. “UK production continues to demonstrate its strength and resilience with output

up 2.5 per cent in September. We already know that production is being scaled back to reflect demand in global markets and we will see this more clearly in the months ahead,” he said. “It is essential that government works with industry to protect vital manufacturing capability. This includes measures to support domestic demand and sustain longer-term investment in skills and new technology,” added Everitt. Over 74 per cent of the vehicles made in the UK this year have been exported, reports the SMMT, with just over a million having been shipped overseas so far in 2008. The latter figure constitutes a six per cent rise on the numbers from this time last year. Almost 350,000 cars have been both made and sold here in the UK.

ManufacturingNews Funding: Bridgend factory to begin low CO2 engine production

Ford makes £70 million investment Ford has announced it is to plough £70 million into its engine factory in Bridgend, south Wales, to fund production of a new generation of low CO2 petrol engines. “The Bridgend team will play an important role in delivering these new engines, which add an innovative ingredient to petrol engine technology and deliver a combination of low emissions and efficient performance that will be vital to meet future customer needs around the world,” explained Ford Europe CEO John Fleming. The Welsh Assembly Government provided £13.4 million of the total investment, which First Minister Rhodri Morgan says will secure the site’s future “well into the medium-term.” The news has come as welcome relief in the surrounding economic gloom. Over the last five years, Ford has invested over £300 million in the Bridgend plant. “Yet again the plant has been successful in obtaining new investment and this is a fine tribute to the efforts of all those who work there,” said assembly member Carwyn Jones. Economy: External pressures impact on profits at GKN

Job losses are anticipated at GKN Major culls are expected to be announced at GKN as a bleak picture is painted today in its interim management summary. Reports anticipate the loss of around 1,400 staff, though it is not currently clear where the cuts will be suffered. The firm said group profit from the third quarter was down £4 million on last year – well below expectations for 2008 so far. The main underperforming industry for GKN is automotive. The firm said it expects a 30 per cent decline in profits from the sector in quarter four on the same period last year as consumers shy away from the new car market while a backdrop of economic uncertainty continues to cloud the western world. Input costs have further increased the pressure on the sectors performance. Scrap steel, GKN said, reached $870 per tonne in July before falling back to its current level of around $230 per tonne. The strikes at aerospace firm Boeing in the US have also had an adverse affect on the firm’s fortunes. It said it expected an eight per cent deficit in its original predictions for quarter eight, should the industrial action continue at its current level through to the end of 2008. GKN said its aerospace business “remains robust” despite of the situation.

Themonthinbrief Car component company Calsonic Kansei has been the latest firm to feel the credit crunch strain, announcing the loss of 60 jobs at its Llanelli factory. “This is a direct result of a reduction in volume orders by our customers and the current global economic uncertainty affecting the automotive industry,” said president and COO James Davies. He added that “[this] has come at an unfortunate time especially in the light of the recent positive news that the company has won substantial new business for new Nissan and Land Rover vehicles,” but that those orders are not due to enter production until the next financial year and so do not provide a way out of the current situation. The firm is now working with unions to decide the best course of action.

The National Skills Academy has been given

a UK National Training Award for partnership and collaboration for its work with a college in Norfolk and the near by car manufacturer Lotus. The NSA was declared the regional winner for the East of England and will now be considered for the overall national award. The scheme is backed by the Department for Innovation, Universities and Skills. Academy managing director Bob Gibbon said “By working in partnership with Norwich City College, the Learning & Skills Council and Lotus Group, we have showed how the right investment in skills training, made at the right time, will drive business success.”

Armor Holdings – part of BAE Systems – has agreed to

pay out $30 million (£17 million) to the US government following allegations it made and sold defective bullet proof vests. The US government claims that the material Zylon degrades over time and that Armor Holdings knowingly continued to use the material in the manufacture of body armour, despite being aware of its unsuitability. The company, which has been cooperating with the government as part of a wider probe, denies that is was aware of the fault prior to the production and sale of the vests. “This settlement will help ensure that first responders receive the highest quality ballistic protection,” said Gregory Katsas, assistant attorney general for the Civil Division.

Castle Cement is rethinking its staffing levels after a 20 per cent drop in demand. The firm, which employs 250 people, holds the credit crunch and consequent construction sector slowdown accountable for the situation. “There is a drastic economic downturn, which is affecting everyone, and we are feeling the pain as much as any other business,” said a company spokesman. “New building work is not being started and house building is at its lowest since the second world war, and we are certainly victims of the credit crunch. Fortunately, we have not had to resort to closing kilns at Padeswood, but we are having to review our distribution fleet.” Knowledge Transfer Partnerships programme has shown the majority

A survey conducted by the

of UK manufacturers recognise the value of innovation and knowledge exchange to the future of their business, especially during an economic downturn. Almost half of those surveyed by KTP said their focus on innovation and product design had increased due to the growth of global markets. The need for UK companies to have a strong profile in the global value chain was one of the issues highlighted in the Government’s new strategy for manufacturing earlier this year.

Newsinbrief Around 90 workers at the

Ford factory in Southampton went on strike to protest against the company’s plans to cut production of its Transit van at the plant. Ford has previously announced that production of the Transit at the site will be cut from 75,000 to 35,000 from 2011 and that the move will incur job losses in the city. Around a fifth of the 500 workers on site downed tools at midday in remonstration. The move was labelled as “unconstitutional” and with “no legal basis” by Ford.

Kinetic has been selected as winner of two awards at the North of England Business Excellence Awards 2008. The firm’s commitment to quality and excellence led to the accolades in the ‘companies with fewer than 250 employees’ and ‘customer results’ categories.

Chief executive of the

Chartered Institute of Personnel and Development Jackie Orme has spoken out against plans to delay the implementation of legislation to extend the right to request flexible working to the parents of older children: “The reality is that flexible working can deliver competitive advantage by improving employee engagement and attracting talented people to organisations that otherwise might remain outside the workforce.”

The online Waste Directory developed by NetRegs.gov.uk has been expanded to help manufacturing businesses comply with waste disposal laws in the UK. The free directory now includes additional licensed sites, showing businesses their nearest facilities to recycle or dispose of their waste.

A partnership between

Robert Wiseman Dairies, Tetra Pak and The Manufacturing Institute has provided school children with the opportunity to design a range of environmentally friendly milk packaging. Four children won the ‘Milk It’ competition to design a range of Guy Fawkes milk cartons, promoting firework safety – Emma Woodhouse, Molly Robert, Hannah Lewis and Alicia Wade.

Survey: Economic climate has now begun to affect manufacturer confidence

Survey shows slowdown to be worsening The latest quarterly CBI Industrial Trends survey has shown that falling demand for manufactured goods, coupled with a sharp fall in output, has resulted in the sharpest single quarter fall in manufacturing confidence for 28 years. During the last three months, 16 per cent of manufacturers reported a rise in new orders while 46 per cent said they had fallen. The resulting balance of -30 per cent signalled the fastest quarterly fall in total new orders since January 1999. Export orders, which had recently been seen to have been supported by the depreciation of sterling, also fell (a balance of -19 per cent) as the global economic slowdown choked demand. Manufacturing output dropped at its fastest rate in 10 years, with a balance of -29 per cent of firms experiencing a fall in the last three months. The gloom appears now to be seriously affecting manufacturers’ confidence, with four per cent

more optimistic about the general business situation than three months earlier against 64 per cent who were less so. The resulting balance of -60 per cent represents the fastest fall in confidence since July 1980. On the positive side, the number of job losses during the quarter was not as steep as firms had predicted in the previous quarterly survey, with a balance of -15 per cent reducing their workforces. However, a balance of -33 per cent predicted they will make cuts in the next three months. “The sharp falls in orders and output show that the slowdown in the UK economy is now spreading to sectors previously resilient to the weakness in the banking and housing markets,” said Ian McCafferty, CBI chief economic adviser. “We can but hope that the recapitalisation of banks and the cut in interest rates, which took place just as the survey closed, will prevent a further credit squeeze over the winter.”

Legislation: UKWA gathers evidence to lobby parliament on empty property rates

Companies forced to demolish storage to save on tax The United Kingdom Warehousing Association (UKWA) – the trade association for the third party logistics sector – says that there is growing evidence that the Government’s recent move to scrap rate relief on empty industrial property is having a serious impact on the warehousing industry. “From the feedback we are getting, our members are clearly concerned about the effect that the new ratings regime is having or will have on their businesses,” commented UKWA chief executive officer Roger Williams. One UKWA member, East Coast Storage, has told the Association that, to avoid paying the tax, it has gone so far as to demolish an empty storage unit at its site in King’s Lynn. The company’s general manager, Kevin Bristow, explained: “We demolished the building so that our local council had to delete it from the rating list. I will continue to

liquidate our building stock due to the Government’s erroneous new business rating regulations. In fact it looks likely that I will knock down a second unit once the current tenant vacates.” Williams commented: “Industrial property owners are being tempted to demolish empty property as a way of avoiding paying the substantial amounts of tax that unoccupied sites now incur following changes to the Empty Property Rate Rules. It is, quite frankly, an absurd situation. “The fact that this new legislation not only encourages the early demolition of older empty warehouse buildings but also discourages the construction of new speculative warehouses, means that when the market recovers there will be a shortage of available warehouse space and that will result in higher rents.” UKWA is gathering evidence of how the new tax is affecting the sector before lobbying parliament on the issue.

ManufacturingNews Awards: Operational excellence to be rewarded by The Shingo Prize

US lean award is introduced to the UK The Shingo Prize – dubbed by Business Week as the “Nobel Prize of Manufacturing” – was introduced this week at a launch event held at the House of Commons and hosted by The Manufacturing Institute. The philosophy of the Shingo Prize is that world class performance in quality, cost and delivery can be achieved through the application of lean principles and techniques across the whole business enterprise. Julie Madigan, CEO of The Manufacturing Institute, stated: “In addition to recognising productivity and business success, The Shingo

Prize is also viewed as a catalyst for organisational change. As a result it can also act as an enabler for individual career acceleration within those companies.” An assembly of MPs, lords and ministers, alongside over 100 of the leading figures from UK industry, including Toyota, Heinz, PepsiCo, Airbus, Siemens, Oracle and BT attended Westminster for the launch where keynote speakers included Frank Hayden, director of integrated operations at BAE Systems, George Baxter, director of science and innovation at NWDA and Neville Chamberlin CBE. Named after one of the key figures involved in the celebrated Toyota Production System – Dr Shigeo Shingo – the Shingo Prize model and business guidelines provide companies with a blueprint for lean transformation and the attainment of operational excellence driven by deep cultural change. The Prize is open to enterprises of all kinds, whether they are starting their journey or have already embedded lean tools, systems and principles in their organisations and are seeing sustained business success. The 2009 UK/US Shingo Summit, introducing the Shingo Prize, will take place at the Hilton in Manchester from 8 to 11 June 2009.

Acquisition: Jobs are saved thanks to ice cream brand rescue package

Ice cream company celebrates buyout Sixty jobs have been saved at an ice cream factory in south Wales after a refinancing and takeover package was agreed. Hill Station plc, based in Cwmbran, went into administration briefly before an acquisition was agreed by David Lavelle and Acuity Capital. The company will now operate as Loseley Dairy Ice Cream Limited and will incorporate six brands – Granelli, Thayers, Yorkshire Dales, So-Real Ice and the Loseley and Hill Station brands themselves.

As managing director Lavelle said: “Loseley Dairy Ice Cream has one of the best equipped factories and has a highly motivated management team capable of meeting all of its objectives. “We look forward to providing all our customers with innovative products and the quality and service levels that they expect and to successfully working together.” The company said that when its growth plans are realised it will employ a further 20 staff at the site.

Newsinbrief Four Sector Skills Councils (SSCs) are joining forces to secure the future of the UK manufacturing and engineering sectors through the Productivity and Competitiveness (PAC) programme. This will involve a pooling of core techniques in lean process and manufacturing to create a new and different approach designed to help smaller companies.

Power Panels Electrical

Systems has won no less than four awards at the 2008 Best Factory Awards for Best Small Company, Best Electronics and Electrical Plant, the Skills Development Award, and the prestigious Barclays Factory of the Year. “Awards can be a fantastic benchmarking tool, as well as a real boost to everyone involved with the company,” said MD Tony Hague.

Premier Foods is reportedly considering selling off

some of its leading brands in a bid to even up its books. Shares in the company have fallen 87 per cent in a year and it is currently £1.8 billion in debt. Premier will look to offload brands like Mr Kipling cakes in a bid to recoup £200 to £300 million.

Welshpool, Powys-based

firm Trax JH is to shed 17 of its 90 staff due to a significant fall in demand. The company has blamed the situation on the economic climate. “The order book is quite flat and so I have had to stop the night shift,” said factory manager Neil Morrison, with commercial director Jim Booth adding: “We are trying to explore new avenues to boost sales rather than keep on cutting jobs.”

Honda’s Swindon factory

is to reduce production over four months to deal with the effects of the economic downturn. Production of the Civic model is to drop by 10 per cent, although the company’s plans to begin work on the new Jazz range in autumn 2009 are so far not affected. Honda maintains the output reduction will not pose any problems to its 4,800 Swindon workforce.

Haveyoursay Email your letters to Louise Hoffman at: letters@sayonemedia.com

Newsinbrief Envirowise is urging

businesses to consider rainwater harvesting as a way of reducing mains water usage and therefore costs. According to the organisation’s research, businesses in England and Wales use enough water to fill over 2.6 million Olympic-sized swimming pools each and every year. Rainwater can be used in many ways, from toilet flushing to cooling processes in manufacturing.

The Minister for the

South East, Jonathan Shaw MP, has opened the Renishaw Centre for Manufacturing Productivity at the University of Greenwich at Medway. The centre has been formed as a partnership between the University and Renishaw and will offer courses to businesses, develop manufacturing productivity teaching and research, and providing access to state of the art technology.

There has been an outcry

over plans to close the Eaton Electric factory in Holyhead – a move which would result in the loss of 265 jobs in the Anglesey area. The situation has been blamed on current market conditions and foreign competition, which is forcing the company to move its operations to Europe to “increase efficiency and continue to optimise global competitiveness.”

Channel 4 is currently

looking for privately-owned businesses with an annual turnover in the region of £500,000 to £10 million to take part in a new documentary series in which trouble-shooter Sir Gerry Robinson will offer advice and support. For more information please contact Tessa or Becky on 020 8233 2952 or email Tessa@goggleboxentertainment.co.uk

During the third quarter

of 2008, UK manufacturers saw electricity prices rise by 23 per cent in comparison to the previous quarter, according to BDO Stoy Hayward’s Quarterly Manufacturing Energy Tracker. The rise has meant that electricity prices have now increased by an overwhelming 243 per cent since the same time last year.

Efficiency: Manufacturing Institute programme to help eliminate waste

Lean Office could tackle 80% of business waste The Manufacturing Institute has launched a new Lean Office education programme, providing the know how to reduce costs, eliminate waste and boost efficiency within business processes. “Up to 80 per cent of waste in a manufacturing or engineering business can occur in the back office – providing huge and largely untapped potential for business improvement,” said Manufacturing Institute practitioner and course leader Bill Tiplady. “Our programme provides tried and tested practical lean tool kits to identify and strip out this non value added activity, which is less visible than in a production environment.” The three-stage Lean Office programme begins with a fiveday (over five weeks) practical foundation stage, after which participants can choose to undertake Lean Office Advanced then Lean Office Champion modules, a development pathway which qualifies them to lead lean office improvement programmes

and support organisation-wide improvement strategies. Research commissioned by The Manufacturing Institute showed that manufacturers considered that the application of lean to the office could reduce errors, rework and lead times, and boost competitiveness through improved response to customer demand. The top four office functions where they considered lean would have greatest impact were: (in rank order) customer service, sales, facilities/operations support and general administration. “Many businesses have made great strides to lean their production processes, but this can so easily be undermined in the customer service or sales office. As economic conditions toughen, no business can afford to ignore the scope to use lean to transform their whole enterprise,” Tiplady added. For further information contact The Manufacturing Institute on 0161 872 0393, or visit manufacturinginstitute.co.uk/ leanoffice

Economy: The credit crunch begins to have an impact on employee pay

Wages suffer as firms limit their spending An emerging tactic among manufacturers to minimise the threat of economic uncertainty is to defer settlement awards and freeze or reduce the increases of those they pay, according to the latest survey by EEF, the manufacturers’ organisation. One in 10 pay negotiations are currently being deferred – the highest level in five years – with the average settlement an increase of 3.2 per cent, slightly down on the last reported figure of 3.3 per cent. Freezes stand at 3.5 per cent. David Yeandle, EEF head of employment policy, said: “This very high level of deferrals, together with the slight fall in pay settlements, demonstrates that manufacturers are battening down the hatches and making every effort to control

costs in this period of increasing economic uncertainty.” The survey covers July, August and September with the comparisons above made against data for June, July and August. The trends are based on information from 115 settlements covering 13,579 employees.

ManufacturingNews Brands: : Bird flu and health scares impact on firm’s reputation

Bernard Matthews sees popularity plunge A report has shown Bernard Matthews brands to have fallen in value by £20 million, and dropped 38 places in the annual top 100 UK grocery brands chart. Now appearing in 98th place on the chart, which is compiled by independent brand valuers and is based on sales, market share, projected growth and customer loyalty, the company has been beset by problems in recent times. Three years ago its Turkey Twizzlers product was the target of attack for healthy food campaigner and TV chef Jamie Oliver, and in early 2007 one of its farms was found to be infected with the H5N1 strain of bird flu. “After bird flu and health scares it is perhaps no surprise Bernard Matthews brands would be affected negatively,” clarified consultants Intangible Business. A spokesman for Bernard Matthews said: “The company has recently unveiled details of its business recovery plan and brand relaunch... Bernard Matthews Farms will focus on British turkey farming and production, making products that better meet the needs of today’s consumers and championing British agriculture.”

Manufacturingoutput Output still falling

With the CBI quarterly Industrial Trends survey having reported back on the real effects that the economic slowdown is now having on manufacturers and their operations, the Office for National Statistics (ONS) figures for the three months to August 2008 deliver further proof of this gradual decline in trading conditions.

Manufacturing output decreased by 1.1 per cent during the quarter compared with the three months to May 2008. Output decreased in 10 out of the 13 sub-sectors and increased in three sub-sectors. The most significant decreases in output were 3.1 per cent in the electrical and optical equipment industries and 1.6 per cent in the food, drink and tobacco industries. There was one significant increase in the latest three month period of 1.8 per cent in the chemicals and man-made fibres industries. Production: Burnaston factory to take control of new Toyota model

Toyota Avensis saves jobs in Derby Toyota has thrown a lifeline to production workers in Derby by announcing that its Burnaston factory will be the only site to produce the new Toyota Avensis. The new model of Toyota’s flagship car, which was unveiled at the Paris Motor Show yesterday, is to be produced in Derbyshire, a move which has increased job security for just over 4,000 workers at the plant. Production at Burnaston – which has been home to Avensis production ever since the model was launched in 1997 – will start during November, with the finished article going on sale throughout Europe in January. Toyota has, however, advised that staff will remain on reduced working hours until sales pick up. The show was also the opportunity for Japanese car manufacturer Honda to announce that the latest version of its Jazz city car is to be produced in Swindon – the first time that the model has been manufactured outside Japan and China.

Overall production output decreased by 1.1 per cent on a three-monthly basis. There was a decrease in output of 2.1 per cent in the mining and quarrying sector and a decrease of 0.2 per cent in the energy supply sector. Within energy supply, output of the electricity supply industry decreased by 1.2 per cent in the latest three months. Within the mining and quarrying sector, there was a decrease in oil and gas extraction of 2.5 per cent following planned maintenance work in the oil industry. Between July and August, manufacturing output decreased by 0.4 per cent. Output decreased in 10 of the 13 sub-sectors and increased in three sub-sectors during the latest month. Within the widespread decreases, there was a significant decrease in the transport equipment industries where output decreased by 2.3 per cent. There were no significant increases in the latest month. Commenting on the figures Barclays head of UK manufacturing Ray O’Donoghue said: “The ONS statistics show decreases across all sectors with weakness in order books and output. “The export market, however, continues to remain robust and with a further drop in the value of the pound this is offering a key stabilising effect on the manufacturing industry. “The current market means all manufacturers are looking again at reducing volatility wherever they can, for example through the use of fixed-price contracting and hedging instruments.”

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JustJones Dan Jones

A recession action plan Dan Jones, founder and chairman of the Lean Enterprise Academy Email: dan@leanuk.org

A recession

Dan Jones provides his step-by-step downturn survival guide

is a good time for lean. Organisations can either postpone lean and resort to traditional cost cutting, or they can accelerate and redouble their progress with lean. I doubt the former will last the course. But the latter stand a good chance of surviving and laying the foundations for future prosperity as they turn the tables on their competitors. There is no time to lose and no more time for excuses! So how should we make best use of this important moment? Here is my five point action plan for turning this recession to your advantage.

Third, establish a Lean Council (like Toyota’s Quality and Cost Councils) of key function heads and value stream project leaders to initiate all cross functional projects, coordinate them, review progress and resolve conflicting agendas. They should also have responsibility for developing the lean experts to support these value stream projects and for spreading lean knowledge through networks of peers, workshops and an intranet database of projects.

First, correctly define the business problems you are trying to solve right at the top. In this case business problems are about closing performance gaps in order to survive and to take market share from competitors in challenging times. These gaps are now almost certainly bigger than they were. I recently asked the CEO of a large multinational why he wanted his company to go lean. He gave me a very general answer about rising input prices and squeezing margins. However the potential of lean is best understood in relation to specific value streams.

for the future now by getting “Prepare a high potential group to think outside

So what are your main value streams creating for customers and what are the key support value streams that enable them to flow? From examples elsewhere, what is the potential for significantly improving their performance – getting new products to market in half the time, producing 30 per cent more with existing equipment and no additional capital, meeting every delivery on time and in full and with no invoice errors, responding to customer problems in hours rather than weeks, reducing length of stay in a hospital by half, compressing the supply chain from 200 days to 20, eliminating 80 per cent of errors and effort to process approvals or payments in the back office, getting changes to the IT system in days rather than many months etc? What improvements in which of your value streams with which customers and suppliers will make the biggest contribution to closing your performance gaps? What are your vital few projects? You cannot do everything.

Fourth, prepare for the future now by getting a high potential group to think outside the box and make the currently impossible possible using lean. This means thinking back from the customer’s use of the product or service and exploring alternative routes to market. It also means challenging the design of the product or service, the right sized tooling to make it and the right IT systems to run it in the right location with a co-located supply base.

“

Second, give strong value stream managers endto-end responsibility for each of these value stream projects. Their role is to gain agreement on the right things to do for their value streams from all the functions and departments involved (who retain the authority over their resources). They also coordinate the implementation using all the lean visual project management tools and surface conflicts between functional and value stream objectives.

the box and make the currently impossible possible using lean

Fifth, use these value stream projects to teach everyone how to see the right things to do using A3 planning. This is also a great opportunity to teach line managers how to use visual management to track progress in real time and to respond quickly to problems. It is also a great opportunity for line managers to develop the capabilities of their staff to diagnose and solve problems – by using A3 thinking. This means asking the right questions to help them learn rather than telling them what to do! None of these steps are easy but they are all focused on solving the most important problems facing the business while developing the capabilities to sustain and significantly improve this performance into the future. This path will also begin to make sense of some of the apparent paradoxes of the lean management system pioneered by Toyota.

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Economics David Smith

David Smith, economics editor of The Sunday Times

Are there any more shocks out there? David Smith asks what life after bank bailout might have in store for us

Writing about

the economy in the past few weeks is a bit like being on the proverbial rollercoaster, except that most rollercoaster rides have the virtue of being limited in duration. Many of us will have been thinking “stop, I want to get off!” with each sickening lurch and dive this autumn. When I signed off last month’s column we were already well into the ride. I wrote then: “We still do not know how big an assault there will be on UK banks, and to what extent this will force mergers or even more drastic developments. The state of play was that the share prices of the banks had taken a battering, though nothing worse had happened.” It is testimony to the pace of change that even then, though allowing for drastic developments, it was impossible to predict what would transpire. In the intervening weeks we had, to remind you, the nationalisation of much of Bradford & Bingley, the forced merger of Lloyds TSB and Halifax Bank of Scotland (HBOS), with the Government waiving competition rules to nod it through. We also, of course, had the Government’s comprehensive rescue package for the banks. This included a £37 billion taxpayer-funded capital injection into Royal Bank of Scotland, Lloyds and HBOS. There were £250 billion of Government guarantees of bank lending – dependent on all the banks accepting the need for either publicly or privately funded additional capital. The final element – and a doubling from £100 billion to £200 billion in the amount the Bank of England was prepared to pump in to the system in liquidity. This was big stuff, matched in whole or in part by most other countries. The global banking system was, according to one well-placed insider, “staring into the abyss”. I am hoping that by the time you read this it will have remained well away from that abyss, thanks to the rescues. But where does all this leave us, apart from providing Gordon Brown with a much-needed political boost? There is optimism that the worst of the financial aspect of the crisis is over – after that rollercoaster most of us could not take much more – but there is quite a lot of pessimism about the economic outlook. We also do not know how the banks will behave in the future. Will they, as the Government hopes, move quickly to restore some sort of normality to their

lending behaviour? Or will they operate as the banks often have in past recessions, looking after their own interests at the expense of business customers? That remains to be seen. What is certain is that economic clouds have darkened considerably. Soon we will get the official verdicts of the Bank of England and Treasury, respectively in the November inflation report and Alistair Darling’s pre-budget report. Both will be much more downbeat than their last published reports, the Treasury dramatically so. A lot of water has flowed under the bridge since March, when the Chancellor’s mid-point prediction for 2009 was for 2.5 per cent growth, with manufacturing output rising by two per cent. We shall see how much he slashes those forecasts by, but the Ernst & Young Item Club, using the Treasury’s own model of the economy, gives a clear steer on the direction it will be heading. It predicts that Britain’s gross domestic product will fall by one per cent next year and edge back up by a similar number in 2010. Taking this year’s expected growth rate of just one per cent, it will mean three years, 2008 to 2010, of effective economic stagnation. It will, of course, feel worse than mere stagnation. “We now have to face up to the reality of an economy that has been seriously weakened by recent dramatic events,” says Professor Peter Spencer, the Ernst & Young Item Club’s chief economist. “The effects of the credit crisis are spreading out from the financial and housing sectors and impacting every part of our domestic economy.” Manufacturing will be hit by the weakness of export markets – all the advanced countries are in this together – very soggy consumer spending and a big fall in investment, projected to decline by seven per cent next year. So, according to Item, the manufacturing recession will be rather worse than the general recession, with output declining by 1.2 per cent next year after a fall of 0.9 per cent this year. 2010 will be better, it predicts, with a jump of 1.7 per cent in output. It is impossible to tell whether these numbers will be anywhere near right. The kind of events we have witnessed in recent weeks are unprecedented and their consequences hard to calibrate. Most forecasters, it should be said, are predicting a fairly shallow recession, for both manufacturing and the wider economy. We have to hope they are right.

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Skilledup

in Stratford

Manufacturing has come a long way since the ‘dark satanic mills’ of the industrial revolution. But government and manufacturers still have plenty of work to do, George Kessler CBE tells Becky Done

Fifteen years

ago, George Kessler’s father hailed a taxi at Zurich airport, commenting to the driver in German: “It’s a lousy job on a day like this.” Insulted, the driver turned around and replied: “This is not a job. It’s a profession.” For Kessler – now group deputy chairman of Kesslers International, Europe’s leading producer of point of sale display – this story illustrates perfectly why the image of manufacturing, which the Government recently pledged to improve in September’s Manufacturing Strategy Review, still represents a major problem in the battle to attract new talent to the industry. “Manufacturing itself has not been seen as a high-quality profession, partly because of the

Interview George Kessler CBE

But Kessler believes the current problem with sector perception and the skills crisis runs far deeper than the difference between pay scales. It started years ago, he says, with government training schemes. “The idea behind the YTS [Youth Training Scheme] was really just to get kids off the unemployment register,” he says. “A lot of professions used it as a source of cheap labour, which gave training schemes a relatively low value.”

are in Germany or Switzerland

“

Engineers here aren’t given “ nearly as much respect as they

Kessler believes this ‘cheap labour’ mindset has laid the foundation for a poor public perception of manufacturing. “Historically, people going into manufacturing have tended, at least until recently, to not necessarily be the best people, because of this low perception among schools, kids and parents.” Skilled migrant workers pose an additional threat to the likelihood of future generations in the UK stepping up to fill the skills gap. “I started an apprenticeship scheme because I couldn’t get the skills,” Kessler explains. “I can now get most of them from Polish, Lithuanian or other eastern European workers.” But he has resisted the temptation to swap his apprentices for a migrant workforce – a decision which has certainly paid off. The scheme – which last year earned the company a place in the finals of the National Apprenticeship Awards – has delivered multiple benefits. “When we started, we had at the time quite an aged workforce and a lot of them weren’t interested in training and learning,” he explains. “But they were interested in helping the youngsters. So an initial and unexpected benefit of the apprenticeship scheme was that it caused a cultural change in learning, because the workforce could see the point of helping the youngsters. It created more respect for learning; then we began to learn to use our equipment better and pass that on. We began to develop more innovation, because people understood it.” The scheme continues to facilitate greater integration within the Kesslers workforce. “It helps bring the organisation closer together. It also helps that, as part of their training, we involve the apprentices in some of the selling and the innovation, so again, the training is cross-cultural with an emphasis on cross-skilling.” All Kesslers trainees are encouraged to stretch themselves. Since attending a CAD/CAM training

course, one apprentice is now in charge of CAD/CAM systems company-wide. Another has been to Germany to undertake training on new machinery. “He’s showing everyone else how to use it; he’s experimenting with different ways of using it. And he had the time of his life! Who else would have had that much imagination and that much dedication? That’s what they’re giving me,” Kessler enthuses. Far more than cheap labour, Kessler’s apprentices are developing skills and abilities that he believes would be rare in a recruit from the marketplace. “Those people are incredibly hard to find – but we’ve got them,” he emphasises. “And that gives me a huge competitive advantage.” Despite the success of his own scheme, several areas of concern remain for Kessler. He is an ardent believer in workforce diversity, for example, but finds that gender still poses a challenge. “Gender stereotyping in particular is a terrible problem. In fact, we’ve only had one successful female apprentice,” he confesses. The business does make active attempts to attract more women to apply for its scheme but Kessler admits there is still much to be achieved in this area. He is also worried about the lack of part-time higher education courses available for apprentices. Once an apprentice has gained their skill at NVQ Level three or four, the only part-time courses available to them are typically in management or business studies. (Parttime polymer engineering, for example, has virtually disappeared, as have many of the practical courses taught by the old polytechnics). In addition, he is concerned by a lack of progression in the UK, which he attributes in part to two different agencies being responsible for the funding behind apprenticeships and university courses. “A lot more should be done here,” he asserts, “and the UK will suffer if it doesn’t happen.”

initial and unexpected benefit of “An the apprenticeship scheme was that it caused a cultural change in learning, because the workforce could see the point of helping the youngsters

“

image of ‘satanic mills’ dating back to the industrial revolution,” explains Kessler, “and partly because until fairly recently, engineers and manufacturing people have not been well-paid. It’s about where our values lie,” he adds, referring to those infamous and eye-watering City pay packets. “Recently we paid engineers pretty badly. And engineers here aren’t given nearly as much respect as they are in Germany or Switzerland.”

Kessler is tireless in pushing his point at the highest level, having served on the Government’s Apprenticeship Task Force, which made recommendations to resolve the progression problem. “But,” he insists, “there remains a large gap between thought and action.” He is now a member of the Apprenticeship Ambassadors Network, continuing his passionate promotion of apprenticeships to employers [information can be viewed at http://www.employersforapprentices.gov. uk/index.cfm]. Perhaps it is this passion, combined with Kessler’s talent for thinking laterally, that has ensured his business fares so well in the current climate. “We follow a very unfashionable model,” he admits. “Not

only do we manufacture, we manufacture using diverse processes. Wood, metal, plastic – we process all of it. So innovation and creativity is the lifeblood of our business. We live it.” Kessler has always put emphasis on the importance of creativity in manufacturing. “Eighty per cent of what I make each year is new. So design creativity is the lifeblood of our business; we wouldn’t exist otherwise. What affects long-term survival is creativity. What affects short-term survival is cash. If you haven’t got the cash, you’re bust.” Does he think it is important that more manufacturers introduce creativity into their processes in order to weather the current crisis? “It’s not that they should be taking it on board – those who are left, already have,” he asserts. “It’s essential, and there is a very effective Darwinian mechanism for manufacturers – they go bust if they get it wrong. It’s always the case in a tough industry that it winnows out the worst. Take the City until two years ago – it wasn’t that tough an industry so you didn’t have to be creative to survive. You had to be creative to grow. Now it’s a tough industry and if you’re not creative, you will go bust. When an industry is expanding, there isn’t a big Darwinian force. When it’s tight, or tough, there is.”

affects long-term survival is creativity. “What What affects short-term survival is cash

“

This realistic view of survival in a tough market has paid off. “The credit crunch has not affected us in terms of our viability. What it has done is begun to affect our customers, and I can see it getting a lot worse next year. But in previous recessions, Kesslers has always done well,” he adds. Kessler’s property business has recently benefited from assets situated in the compulsory purchase area for London 2012. I am curious to know what opportunities he expects the Games to afford UK manufacturing. He seems unconvinced by the purported prospects. “If you think about it, there’s not going to be a bias towards London, or towards the UK – they’re going to pick the best people to do the job in the right time. Certainly a lot of effort has been put in to make sure UK companies get a chance to compete and to educate them as to how to compete, but I don’t think it’s going to pump that much extra money into UK manufacturing.” Several years ago, Kessler chaired a DTI mission to the US, as part of a revamp of MAS (the Manufacturing Advisory Service). With MAS based on a US model, the idea behind the trip was to examine how the model had developed since its inception. Does Kessler think a greater emphasis on knowledge-sharing between economies could enable the UK to raise its game in the global marketplace? “To be quite frank, a lot of it is obvious,” he states, clearly convinced the answers to improving UK manufacturing

Interview George Kessler CBE

Biography George Kessler CBE

Kessler has firm ideas for what needs to happen within UK manufacturing going forward. “We need a change of both public and government perception. The latter I think is very likely because they’re beginning to see the importance of a mixed economy. I went to a breakfast meeting with Alistair Darling last September and there was some bad City news – not as bad as now – and he said, ‘If you’re worried about the economy, our manufacturing’s doing really well.’ I said, ‘Alistair, that’s the first time you’ve been complimentary about manufacturing.’ His response? ‘Maybe, but at least we realise it’s important now.’ So first of all, we need the Government on side. Secondly, we need to sort out the training. Thirdly, we need to keep the protectionism we’ve got, which the Government has been very slow to buy into,” he adds, emphasising the importance of protecting UK manufacturing from overseas predators.

1953

Education:

BSc philosophy and mathematics, University of Nottingham, 1974

1974:

Consultant, Logica

1977:

Joined Kesslers Group

1990:

Appointed operations director, Kesslers Group and managing director, Kesslers Manufacturing

2001:

Awarded CBE in birthday honours list

2004:

Appointed group deputy chairman, Kesslers Group

2004:

Awarded honorary doctorate from University of East London

every reason why UK “There’s manufacturers should prosper. We’ve got a bloody good design system, which is a real advantage

“

lie very much at our own front door. “There’s always a risk of picking up the wrong lessons.”

Born in:

According to Kessler, “there’s every reason why UK manufacturers should prosper. We’ve got a bloody good design system, which is a real advantage. We’ve got a big market in Europe and we’ve whittled off the worst manufacturers – those that are left are fitter. Unless of course,” he adds, “this current financial crisis changes the world as we know it. But I don’t think that’s going to happen. The next few years will be tough, but the really good firms will survive.”

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The financial meltdown is throwing up a complex of cost movements, volatile exchange rates, share prices and interest rates. Colin Chinery asks UK global players how they are managing

Across eastern

Europe, in the old hangouts of Dracula and Vlad the Impaler, investors flee from stocks, bonds and currencies. Contagion strikes Turkey and South Africa; extreme fear stalks Russia as credit default swaps on debt rise. Wall Street stocks record the seventh biggest fall in history. And on 23 October a speech by Bank of England Governor Mervyn King sends the pound into tailspin and its biggest fall since post-Black Wednesday, 1992; 6.25 cents against the dollar, with a two to three per cent drop against a trade-weighted basket of other currencies. Manufacturers are caught in what is essentially a meltdown of the financial banking systems, resulting in market uncertainty and general lack of confidence in the face of a threatening recession, says Ian Gerard, managing director of Vulcan SFM, a subsidiary of Sheffield Forgemasters International.

Leadstory volatility created by the global crisis is very complex and very difficult to deal with.” But while British manufacturers suffer from increased raw material prices, they tend to be better hedged against currency movement, says EEF chief economist Steve Radley. “It doesn’t mean they are not affected by it, but they have a greater cushion than in the past. Much of the value added of a manufactured product is now dispersed around the world.” In foreign currency dealings, planning ahead is vital to assure certainty of cash receipts and expenditure, says Ian Gerard. “Experience over the years indicates it is better to enter into exchange contracts and not speculate. “The ability to see out a financial storm on this global scale depends on a wide variety of factors, most of which unfortunately need to be firmly in place before the storm arrives.” And planning to survive is key, he adds: “This dictates good business practice as a matter of course in the years which lead up to the inevitable downside of the business cycle.” Forgemasters’ decisions have been centred on making firm choices on which market sectors to work in, researching them and targeting the businesses it wants to supply to. “And underpinning everything is the establishment of strong customer relationships.” Likewise, sustained year-on investment in innovation in processes and materials. “This ensures that what we offer the market is the best in its class, which provides significant safeguards. We continue to invest in plant and equipment to ensure we remain competitive – and this stands true for most manufacturing companies. Important for us is the establishment of supply chains for materials. “Our method of preparing accurate three-month rolling forecasts across all of the company divisions enables management to see what the immediate future has in store and act accordingly. “Unfortunately a large number of companies choose to capitalise on the good times, while order books, profits and cash flow are all buoyant – with little thought for what might happen in six to 12 months.” “This has placed a large number of companies into the most unstable markets and trading levels seen for generations. Fluctuating exchange rates, increased raw material costs and energy prices make life even more difficult for manufacturing exporters like ourselves.” Michael Kimberley, CEO Group Lotus, agrees. “Things have worsened. The dollar has swung massively against the pound and the euro, and foreign currencies in the Far East are all over the place. The global financial crisis is challenging us every single day and takes up massive manpower, knowledge and contacts. “Even then, you have to make calculated assumptions to try and protect your company in the selling of a product. If you know exactly the volumes and revenues you are dealing with you can hedge, and to some degree, protect yourself. On the exchange market the

For Nissan’s manufacturing division, the global crisis is intensifying the need for plants to control cost and manage inventory levels in a universally weakening market. “What is important is to protect the long-term sustainability of the company and take the necessary steps now to ensure we are well-positioned for strong future growth when the market and the economy turns the corner,” says David Swerdlow of Nissan, Sunderland. Although Nissan sales in Europe are 16 per cent up year to date on 2007, August and September saw a significant slump – chiefly through lack of customer credit and/or cash, factors impacting the entire auto industry. “This is unavoidable, but what is important is the action taken in the face of this slowing demand,” says Swerdlow. One example: the company’s Sunderland and Barcelona plants are implementing non-production days between now and the end of the calendar year.

Lead story

“This will reduce finished vehicle stock levels and then line speed for certain models will be adjusted to better match customer demand. And we’ll track what is an extremely volatile market very closely, with the usual monthly meetings between production and sales occurring once a week. “Currency is just one of many volatile external factors in our business. Hedging currency is not a strategy for Nissan but an opportunity, if conditions are right. Although we try to mitigate exposure through localised sourcing etc, the impact of currency is still substantial.”

“While we are seeing countries like China continuing to rise up the economic table, issues such as the environment and higher employee costs are real issues for businesses sourcing partners in this region,” says Wright. “We are seeing issues such as the control of waste water and other environmental laws reducing the volume that many manufacturing plants in China can achieve. Combined with rising wage costs and recent employee benefits legislation, this rise in overheads and reduction in capability is a concern to UK manufacturers who may need to source new reliable manufacturers in low-cost economies.” To make matters worse, says Wright, Asian markets are seeing a slowdown as a direct result of the credit crunch. But on a positive interpretation this could start to ease inflationary pressures over the next few months. “One of the biggest issues facing global markets is the availability of cash. Despite geographical location, banks are pulling cash out of businesses in an attempt to reduce their own exposure. This, in turn, is having a big impact on businesses that are not financed in the right way. Manufacturers have suddenly found that the bank facilities they once had are no longer there, so there is little room for overdraft extension or investment.” With the ongoing loss of confidence in global financial markets, Wright says offshore suppliers are notably more reluctant to engage with new customers, and are spending far more time on due diligence. “As a viable gateway to low cost manufacturing, we are also seeing UK manufacturers turning to companies like ours with years of experience and a breadth of contacts that can spread risk in this inherently complex area. “Like many sophisticated global manufacturers, we trade in multiple currencies and are naturally hedging against fluctuations to minimise our exposure in this area.” Pound-euro movements have boosted this highly specialist UK-based manufacturing operation. “We are continuing to see a strong order book despite the vagaries of the global economy. Current exchange rates are making us more competitive and we are looking to penetrate the European market more aggressively.”

ability to see out a financial “The storm on this global scale depends on a wide variety of factors, most of which unfortunately need to be firmly in place before the storm arrives

“

Craig Wright, CEO of leading electronics outsourcing specialist Exception – 450 employees at Tewkesbury and Calne; annual turnover of £55 million – recently returned from a trade visit to the Far East where his business subcontracts most of its volume production.

But for Kimberley, these sometimes complex global calculations contain a home-grown rogue card – the undermining of UK competitiveness. While Group Lotus manufactures cars only in Britain, it has high technology engineering bases in Detroit, Kuala Lumpur, and Shanghai. A new plant is being developed in Saudi Arabia and Kimberley is currently in negotiations for another in India. And in a recent shot across British bows, parent company Proton Holding’s MD Syed Zainal warned about “the very high cost base in the UK.” “He’s absolutely right,” says Kimberley. At the time he was parachuted into Group Lotus two and a half years ago, Proton Holdings planned to switch production both of the Lotus Europa and a new model to low-cost Malaysia. But after “digging his heels in”, Kimberley secured continuing production for the Hethel, Norfolk site. But now there is “considerable pressure on me as CEO to move operations to lower cost countries. And at the moment the UK is pricing itself out of manufacturing: full stop. “If government looks to manufacturing – and not just the City – as a wealth creator, then British industry could be in for a re-resurgence. But there will have to be a significant reduction in the red tape and regulatory systems which are not only inhibiting growth in this country but forcing companies to relocate overseas.” Meantime, and like a news vendor shouting yesterday’s headlines, Bank of England Governor Mervyn King says the UK economy is entering recession, with the pound facing “larger and faster” adjustments in the coming months. The start of a “long march back to boredom and stability,” hopes King. So what lies ahead? “I want to make a profit, not be a prophet,” says Arcadia chief Sir Philip Green. British manufacturers will buy in to that label.

Have your say at www.themanufacturer.com

Rethi n ki n g the rule book

Bob Doak of W. L. Gore & Associates (UK) discusses how a high degree of creativity and innovation through flat hierarchies and unorthodox leadership concepts is what makes Gore so successful

“Make money

and have fun” was Bill Gore’s vision when he left his position as a chemist at DuPont in 1958 to found his high-tech company in Delaware, USA. He felt that it takes unorthodox organisations to make the most of people’s creativity and potential for innovation. He was convinced that he could do without common methods of employee supervision and control. He believed in a flexible team culture where the associates, as he called his employees, could grow in their individual strengths to create original solutions and inventions. By this approach, he wanted to assert and expand the technology leadership role of his young enterprise. In the beginning, this extraordinary entrepreneurial concept was regarded as pretty ‘exotic’. Within a short time, however, the success story of Gore products resulted in growing respect and widespread recognition in the business world.

Leadership & strategy

As a global leader in processing fluoropolymers, especially PTFE (polytetrafluoroethylene), Gore manufactures and markets innovative products and technologies, the most well known of which is arguably its GORE-TEX fabric. In the past 15 years alone, the company has received more than 40 awards, many recognising the success of its unconventional corporate culture. In the US, it has been among the top companies in the ‘Fortune List’ for more than 10 years. In the UK, Gore ranked number one on The Sunday Times ‘100 best companies to work for’ list four times from 2004 to 2007. In Germany, participating in the renowned ‘Germany’s best place to work for’ competition

having a share in the enterprise. This is reflected in the company name – W L Gore & Associates – and in the associate stock ownership plan introduced in the 1970s. Each Gore associate, irrespective of function, profits from the earnings of the company by means of Gore shares in addition to their salary. The longer you stay with Gore, the more you can profit from the growth of the company via your personal share account. The Gore world is based on a network of units each small enough to allow for direct communication. The ‘small is beautiful’ concept requires some investment in infrastructures but most associates feel the main benefit of the system is the personal atmosphere at work. As Bill Gore found out, a plant size in a range of 150 to 250 associates is the magic limit up to which communication works most efficiently. Therefore the leadership at Gore thoroughly considers which size and structure is best in which market and function to remain flexible and responsive to customer needs, while keeping an eye on team investments in infrastructure.

Gore believed in a flexible “ Billculture where the associates, as he

called his employees, could grow in their individual strengths to create original solutions and inventions

“

since its introduction 2003, Gore has always been among the top companies – ranking at number 11 in 2008. And Gore France ranked second out of 100 companies in the French ‘Great Place to Work’ competition in 2008. The company sees the unique culture that makes Gore a great place to work as being integral to its commercial success. With a worldwide turnover of $2 billion, Gore is focused on being a product leadership company. As such, it continuously develops innovative products providing unique benefits for its customers. Knowing that its key to success lies in the high innovative potential of its more than 8,000 associates worldwide, Gore invests on average eight per cent of its annual turnover in research and development and nurtures an atmosphere of creativity and continuous development. This is achieved by its special culture, combining sociological, philosophical and economic principles. But the guiding principle remains Bill Gore’s conviction that people work best in a team where nobody feels superior, everybody is closely linked with each other and interactions take place in a flat, grid-like ‘lattice’ structure. From the very beginning, all employees were associates, acting as entrepreneurs and

Bill Gore established four guiding principles which are valid for all associates: freedom, commitment, fairness and waterline.

Freedom means that within the given framework each associate should have the chance to work and grow in the field of his or her personal strengths. Work is organised in project groups, task forces and functional teams. When somebody has a good idea, for a new product for example, he or she can quickly launch a new project. The waterline principle serves as the regulating force. It compares the enterprise to a ship. Every associate on board is allowed to try new things, as long as the effects of a potential failure do not harm the long-term success or reputation of the company. Projects with uncertain outcomes are compared to drilling holes in the ship’s hull – only tolerable as long as it happens above the waterline. Two questions have to be answered before a new project may be launched: Is it worthwhile to invest the required energy and resources? If all goes wrong, could we live with the consequences? If the team answers ‘yes’ to both questions, the project can be launched. In such a culture, there is not much room for traditional job descriptions. It is not positions but functions that count. The associates take on flexible commitments, ie tasks, depending on the business and organisational requirements, sometimes even outside the scope of their main job. They are not specifically told what to do, but commit themselves to fulfilling their responsibilities in a self-motivated and team-orientated way. The attitude is: “I’ll take care of that.” There are no superiors in the conventional sense of the word. In the past, the principle of ‘natural leadership’ determined who could become a leader at Gore. Nowadays, the selection criteria are more differentiated. For decades, the principle was that only people who had previously worked as normal members in a project group could become the leader of that team and take

Leadership & strategy

view is that it is much less “Gore’s productive to focus on correcting a person’s weaknesses than to concentrate on amplifying existing strengths and talents

“

on responsibility for personnel. The thought was that in the course of time the appropriate ‘natural’ leader would automatically be recognised by the team itself, by his or her readiness to take calculated risks and by his or her social competence. This long-term process of maturing is still alive. However, in the meantime, it is also acceptable to hire external leaders, for example where there is an requirement for ‘economies of speed’. But no matter whether they have evolved from inside the group or have been hired from outside, leaders at Gore will have a different understanding of their role than in conventional companies. As “primus inter pares” (the first among equals) they act in and between changing teams. They communicate with all associates without being warded off by secretaries or intermediate reporting lines and can be addressed by everybody through an open door policy. One of the key objectives is to create an atmosphere of trust in which both sides feel responsible and respect the rules of fairness. Each associate has a sponsor who helps him or her orientate within the ample field of options and who assesses his or her strengths and potentials for improvement in a fair and critical way. The purpose of this relationship is to ensure that everybody finds the right place within the organisation and steadily grows to contribute as much as possible to the company’s success. Once a year, the sponsor collects feedback from

the people the associate closely works with. Technical competence, business performance and social skills are all important. The sponsor then gives the associate feedback and works out milestones for the next year. In a special leadership development process, a 360 degree feedback system analyses the special strengths, talents and goals of the candidates. Gore’s view is that it is much less productive to focus on correcting a person’s weaknesses than to concentrate on amplifying existing strengths and talents and make sure that each associate works on tasks which match his or her profile. In what could be described as a job sculpting process, weaknesses are only addressed if they seriously impede personal growth or interaction with others. Life within the Gore culture can be challenging for some. Not everybody will find it easy to work in such an environment of ample freedom and flat hierarchies. Some people will probably even feel uneasy – those who fear taking risks, who prefer clear and detailed instructions, who need firm structures which rarely change, or who aim at a steep linear career in which they can quickly climb the rungs of a ladder from rank to rank within a hierarchy. On the other hand, people who thrive most at Gore tend to be flexible, openminded team workers ready to try unconventional approaches and new methods and to think ‘outside of the box’.

Have your say at www.themanufacturer.com

InterfaceFLOR’s war on waste InterfaceFLOR leads the way in sustainable development with latest manufacturing innovations

eading carpet tile manufacturer InterfaceFLOR is regarded as an innovator in sustainability. The company has twice won a prestigious Queen’s Award for ‘Sustainable Development’, is a former Manufacturer Award winner and was again been nominated this year in the ‘Sustainable Manufacturing Award’ category. InterfaceFLOR’s pledge to have a zero environmental impact by 2020, known as Mission Zero, underlines its commitment to considering the environmental impact of every creative and manufacturing decision it makes. As part of this, InterfaceFLOR is actively moving away from the traditional approach of ‘take, make, waste’ towards one that mimics nature’s recurring cycles – recycling and re-using whatever waste is made. In line with Mission Zero, InterfaceFLOR is continually adapting and transforming its manufacturing processes to eliminate unnecessary waste. By waste, the company not only means product waste, but also “any cost that does not produce value to the customer.” InterfaceFLOR’s European headquarters, located in Shelf Mills, Halifax, has introduced numerous initiatives to help combat waste. To reduce the amount of material reaching landfill, the plant has recently opened a new recycling centre, which is named after Steve Martin – InterfaceFLOR’s UK manufacturing/operational director – who has been integral in developing waste management programmes throughout InterfaceFLOR. At the centre, all materials are segregated and materials such as cardboard, paper, plastic, textiles and metals are recycled.

Like all of InterfaceFLOR’s European facilities, Shelf has embraced lean manufacturing which uses overall equipment effectiveness (OEE) as a benchmark and tools such as total productive manufacture (TPM) and process flow analysis to measure, address and improve all areas of the factory process. In Shelf, the OEE has improved year on year since it was introduced in 2004, recording a 10 per cent total improvement to date. One of the early results from the lean manufacturing implementation has been the identification of a bottleneck within the Shelf facility’s packaging division, leading to unacceptable levels of downtime. By implementing tools such as OEE and TPM, downtime within this unit has been reduced by 71 per cent. Also in line with lean manufacturing, InterfaceFLOR is introducing Cool Green later this year, which will recycle manufacturing waste back into InterfaceFLOR’s products. Cool Green involves redesigning processes and products to close the technical loop using recovered and bio-based materials. InterfaceFLOR not only eliminates waste in its manufacturing processes, but also considers the environment in which the product is made. The Shelf plant’s building management system enables centralised control of heating and collects energy sub-meter readings every 30 minutes. This enables analysis and rapid reduction of unnecessary energy use. Also, InterfaceFLOR’s facilities in Shelf and Craigavon have had ‘intelligent conveyor systems’ installed that only operate when there is something to move. In addition, InterfaceFLOR has implemented intelligent lighting systems and compressor

management, which only operate when needed. Globally, innovations in production and design have reduced the total energy consumption per unit by 45 per cent. Since 1996, the company’s reduction, recycling and reuse programmes have resulted in a global 75 per cent reduction of waste sent to landfill. What is more, in this time InterfaceFLOR has globally saved more than $372 million in avoided waste costs – proof indeed that managing waste not only benefits the environment, but also the bottom line.

Published in association with: InterfaceFLOR Shelf Mills, Halifax, West Yorkshire HX3 7PA Tel: 01274 690690 www.interfaceflor.eu www.interfacesustainability.com

fittest

of the

Today’s, tomorrow’s and next week’s sector is heavily reliant upon a combined effort that fosters the right market for R&D funding, entrepreneurialism, collaboration with the universities and, above all, innovation, says Roy Pulley of MAS WM

Survival

The Government’s

Manufacturing Strategy delineates an ‘Innovation Nation’ – one that wields the considerable strength of the public sector’s purchasing power to drive innovation across the board. Infrastructure, design, process, product and technology are all areas that will benefit from and are cultivated out of a spark of innovative creative thinking. The Government is helping to build our reputation as a world class innovative nation through its network of business support agencies. These stem from the Regional Development Agencies (RDAs) who are responsible for SME business advice services such as Business Link, as well as the Manufacturing Advisory Service (MAS), which supports manufacturers. Through a series of funding streams, the RDAs can stimulate the innovative community by pulling together a number of resources from within the region that, when amalgamated, should produce ‘the goods’. What do I mean by ‘the goods’? Quite simply, I mean a sophisticated, well run sector that competes with the rest of the world in producing high value items that sell on the global market.

Design Design & innovation

development, and the initiative was aimed at assisting manufacturers to increase global competitiveness by drawing on the region’s world class creative capabilities. This involved looking at the best practice standards set by some of the global manufacturers in the region, as well as developing ideas using the latest technologies and testing methodologies in conjunction with the universities.

ideas alone do not make money; “But what we must improve upon is taking these ideas from the drawing board to market. Big business has the luxury of being able to invest capital in product testing, development and market research, but what about SMEs whose budgets are more constrained?

“

The original response recorded 90 expressions of interest, which was whittled down to 50 and then 18 companies to go through the rigorous process proposed by PIC. Importantly, the process was designed to not only promote great ideas and get them out to market as quickly as possible, it was also there to stop companies wasting time and money on ideas that were never going to work, which is often a tough call to make if passion and time have gone into the project. A number of the companies involved realised very quickly that success is not simply realising the potential of an idea, but also realising the boundaries and limitations of an idea. That’s not to say that we encouraged giving up at the first hurdle – precious time and hours were spent developing a number of products which are, as we speak, being brought into the marketplace. We are already competing: 25 per cent of the UK’s technical R&D funding comes from overseas. Contrast this with Germany at only five per cent and France at 10 per cent and you’ll see that we’re stretching ahead of our European neighbours. Other countries want to invest in what we do. Why? Because we have a number of outlets to develop ideas and turn them into consumer and business products the rest of the world wants. But ideas alone do not make money; what we must improve upon is taking these ideas from the drawing board to market. Big business has the luxury of being able to invest capital in product testing, development and market research, but what about SMEs whose budgets are more constrained? In the West Midlands, for example, we have successfully piloted the Product Innovation Consortium (PIC), delivered by the regional MAS and Advantage West Midlands. The region’s RDA funded this project to the tune of £500,000, with the goal of encouraging entrepreneurial and innovative spirit and turning it into realistic, workable and profitable products. The challenge for PIC was for manufacturers to take a more sustainable and innovative approach to product

One company that worked with PIC is Cobra Automotive. Cobra’s innovation was not only environmentally beneficial but also offered significant commercial opportunities to the automotive industry – one of the traditional West Midlands sectors that has changed drastically over the past two decades. Providers of a successful niche service, Cobra works with leading automotive manufacturers such as Volvo, VW and General Motors and is at the forefront of innovation in the automotive interior sector with high-level investment in leading-edge technology such as laser inspection. The use of either plywood or very complex composite structures, made from polyurethanes and glass fibre to manufacture load-floors, is common practice in this sector and Cobra worked with PIC to investigate, design, develop and test a completely radical departure from existing load-floor technology. Cobra’s structural load-floor made from a mix of EPP as an outer casing, which encapsulates a structural polypropylene core, and not only gives superior loadfloor is deflection characteristics but is also completely

recyclable when used in conjunction with polypropylene carpet. PIC worked with Cobra to not only identify technical partners to help develop the product, but they also part-funded the prototype tooling for the outer casing, which involved supporting costs for testing and validation for industrial testing. This was especially important so that rigorous testing procedures could be

of the companies involved “A number realised very quickly that success

implemented in the types of environment they will be used in, not just in factory surroundings. Where PIC was able to help most was in the speed of the process – Cobra needed to pull the product through quickly, to satisfy customer demands, and the project lead time was around six months. The automotive sector is not dead and buried in the West Midlands – it’s diversifying in order to keep up with

Another automotive company PIC worked with was Concept Mouldings. Established in 1991, the company is a manufacturer and specialist in the creation of engineering solutions for the automotive sector as well as a wide range of other markets as diverse as the leisure, medical and office furnishing industries. Basing its research and innovation on a 2005 European study that showed one in five people killed on the UK’s roads were pedestrians, the company realised that safety developments in this sector is one of the fastest growing areas in the automotive industry.

“

is not simply realising the potential of an idea, but also realising the boundaries and limitations of an idea

demand, meet ever more stringent safety regulations and give the big manufacturers what they want.

Car manufacturers are constantly developing new and unique systems to make motoring safer for pedestrians and Concept Mouldings’ latest developments supported both this and the meeting of European legislative requirements for Frontal Protection Systems for Motor Vehicles. In the run up to May 2007, Concept Mouldings launched frontal protection systems for a number of vehicles including 4X4s, SUVs, pick ups and light commercial vehicles (LCVs). On the 25 May that year non-compliant bull bars and FPSs to the regulation 2005/66/EC became illegal.

Design & innovation

automotive sector is not dead “The and buried in the West Midlands –

Concept Mouldings’ Ian Finney commented: “[PIC] were a helping guide to the right answers. In particular, we found access to government funding quite cumbersome – PIC guided us through the system to help us with the process.” So there’s money to be made in producing high value products, but is there a future in getting rid of waste products? The short answer is YES. The WEEE directive came into force a little over a year ago to encourage not only the reduction of waste electrical goods being produced, but also the reuse, recovery and recycling of them – no mean feat but an important one if we are to aggressively reduce our collective carbon footprint.

“

Working with PIC allowed Concept Mouldings to streamline internal processes ensuring the business was fit and lean. PIC also helped create an infrastructure; an element recognised as a key influencer in moving the company from an SME to being regarded as a larger business. Before PIC started work with Concept Mouldings, the products themselves were well developed; however, the manufacturing side was not in a fit state. This is where we were able to help. By streamlining and improving the efficiency of the operations, we were able to help Concept Mouldings meet their customers’ demands.

it’s diversifying in order to keep up with demand, meet ever more stringent safety regulations and give the big manufacturers what they want integrated refuse solution is a timely innovation for contractors and householders to prove waste collection via GPS technology. PIC supported Central Weighing by providing advice and funding assistance, allowing work to progress more quickly. The integrated refuse solution provides a range of data via a web based solution, capturing real time data ranging from which bins are being collected and when, to the weight of each bin. In addition, the system will identify individual bins to a householder’s address via a chip tag located in the lid of each wheelie bin. The future of manufacturing will depend heavily on seeking out and capitalising on niche opportunities.

One company that has caught on to both central and local government’s ongoing commitment to refuse collection and recycling is Kidderminster-based Central Weighing, a specialist in vehicle weighing, tracking and management systems. In the UK it offers nationwide coverage and is represented internationally by trained distributors in over 30 countries.

These are just a selection of not only the companies helped by PIC, but the companies that are spending their resources wisely on R&D. Furthermore, these companies also have the following factors to contend with: high labour costs, increasing energy prices and expensive transportation overheads – they’ve had to therefore adjust accordingly in order to stay in business. They’ve done this through seeking prudent support and advice and have concentrated on highvalue, knowledge-intensive goods that are attractive to domestic and global markets.

With moves muted towards a ‘pay as you throwaway’ approach to domestic waste, Central Weighing’s

Roy Pulley is the specialist product innovation advisor at MAS WM

Have your say at www.themanufacturer.com

Regaining

ground Tony Bodsworth, operations director at Daval, examines the kitchen, bedroom and bathroom (KBB) manufacturing industry, its decline over the years and how, today, the British are fighting back

Traditionally,

kitchen, bedroom and bathroom (KBB) manufacturing has been predominantly a European domain, with a peppering of British contenders. However, in the kitchen market specifically, British manufacturers have triumphed at either end of the spectrum; from successfully selling less expensive high-volume products to the shed retailers including B&Q and MFI, to supplying the most expensive and highest quality products at the top end of the market. Around 10 years ago, an obvious gap had emerged in the British market for a mid-range product that paired designer styling with a high-street price tag. Yet none of the British manufacturers stepped forward to fill it. German manufacturers, however, exploited this opportunity using independent retailers to provide the service and products needed to fulfil the requirements of customers in this space. By increasingly pushing the boundaries of the manufacturing processes, operating on a 20 per cent flatpack and 80 per cent rigid product base – the opposite to the British manufacturers – and taking advantage of cheap labour, developing innovative new technologies and ultimately producing kitchen products more cheaply, the German kitchen manufacturers entered the British mid-market with gusto. So why didn’t the British manufacturers adapt to actively target this middle ground themselves? One theory is that they simply didn’t have the resources or the knowledge to innovate and offer the design and choice the consumer wanted, at the right price. So British manufacturers continued to concentrate all their efforts at either end of the scale, developing the speed with which they could deliver products through to the end consumer, at the cheapest possible price, and providing one-off, bespoke pieces of furniture for a premium at the top-end. But it became starkly apparent that continuing to ignore the opportunity in the mid-market was no longer viable. The British KBB industry had to adapt to stay alive. External market trends have impacted the downward spiral of the industry over the past 20 years, for example DIY became very popular in Britain during the 90s. TV shows such as Changing Rooms and House Doctor inspired people to maximise the potential of their homes, and to revamp older, tired areas with a designer-looking kitchen, but without paying designer prices. And so the mid-market gap grew.

Fast-forward to the millennium, and the face of British manufacturing for the KBB market was changing. British companies began to challenge their European rivals for this mid-market space. By adapting skill sets and extending product portfolios, carpenters and specialist kitchen manufacturers were slowly repositioning themselves as ‘home furniture providers’. With a midmarket price tag, they tried to become all things to all people, but failed to deliver. Following on, the need for innovation became greater than ever. As the euro grew stronger against the weakened pound, the cost of raw materials increased and suddenly, producing the same quality furniture at a similar price point to the Europeans was becoming increasingly unrealistic for the British to achieve. Europe had British manufacturing held in a vice grip with nowhere to go. European manufacturers within the KBB sector had always focused their efforts on innovation, bringing new and exciting products to market, and the British desperately needed to catch up. So, British manufacturing went back to the drawing board. There has not been any real innovation within the KBB market during the last 20 years. Products have merely evolved, taking technology developments from other industries and integrating them with another. For example, soft close technology is now available throughout the entire home, whereas 20 years ago it would only be available on top-quality kitchen units – even soft close lavatory seats are available now.

Design & innovation

So, looking to the future, how can British manufacturing impress the unimpressed British consumer? At Daval, we have approached the market slightly differently, and believe we have set the benchmark for innovation in British manufacturing. The company has created and developed a design technology system that allows customers additional flexibility for sizes, designs, colours, finishes and interiors. The technology allows Daval to create semi-bespoke furniture on a mass level. With the majority of new-build homes occupying a smaller square footage, (in a recent report, it was found that room sizes are smaller now than in the 1980s*) interior living space has to work harder. Instead of separate rooms, space is often maximised to incorporate living, dining and cooking within one area. According to a survey carried out by Halifax Home Insurance, open plan living has contributed to the loss of 2.9 million rooms in British homes over the past five years, with a further 2.1 million rooms to be lost by the end of the year. And with integrated rooms comes the prevalence of integrated appliances, as more and more customers look for a ‘hidden-away’ kitchen, so as not to distract from their living area. Population trends are also a contributing factor to the developments in the KBB market. According to the BBC there are currently 20 million over-50s living in the UK, holding 80 per cent of the nation’s wealth - the potential of this market simply couldn’t go unnoticed. So the development of soft close hinges, lighter lifting mechanisms and now, remote-controlled and motionsensor reactive appliances are helping to make the lives of the burgeoning mature market easier. Clever storage solutions that eliminate unnecessary bending, stretching and reaching make for a happy customer. Looking to the future, what lies in store for the KBB market and British industry? Over the next 20 years, many industry insiders believe manufacturing across most sectors will come full circle and come back to Britain. However, in turn, Britain needs to be ready, by developing the right infrastructure for people to return. Market analysts are predicting a backlash against the ‘one-size-fits-all’ approach to consumerism. Consumers increasingly don’t want their purchases to be instantly recognised, or be the same as the proverbial Jones’s. They want to be different, to stand out and to be recognised as individuals. There is an argument that provenance-driven consumers, already conscious of where their food and clothing is sourced, increasingly search out UK manufactured products for other aspects of their life. Consumers are likely to become even more environmentally aware and will prioritise locally sourced products, not only because they appreciate exactly where it was made, but to fulfil an inner drive to ‘give something back’ to the community.

However, even with good intentions, price will always remain a key driver. Look at how well Primark performs, regardless of all the negative press and derogatory exposé documentaries the firm endures. Some British suppliers will continue to set up operations in China simply to exploit the price of labour, raw materials and general running costs. In a clearly price-segmented market, consumers at this end of the spectrum will always welcome products that can be bought at a lower price. Back in Europe, it’s widely acknowledged within the manufacturing industry that the Europeans – the Germans to be precise – dominate NPD and innovations across the entire manufacturing spectrum. It’s perplexing really, as Britain is hailed as the Mecca for engineering talent, yet innovations are so often spearheaded from mainland Europe. Take the car industry as an example. German manufacturers offer choice and technical innovation as well as quality. If consumers were simply looking for choice alone, then eastern European manufacturing, with its cheap labour and cheaper products, would suit their criteria better. However, Germany has previously been unbeaten for its marriage of choice and quality. And this is what Daval has modelled its offering upon – choice matched with uncompromised quality.

increasingly don’t “Consumers want their purchases to be instantly recognised, or be the same as the proverbial Jones’s

“

The wave of unashamed consumerism that started in the 1980s is still evident today – the majority of consumers believe that they deserve life’s little luxuries. Soft close drawers, leather sofas and remote controlled garage doors, once only found within homes of the glitterati, are now a firm favourite with the Joneses, Johnsons and Smiths.

So how did we create a point of difference? Shed retailers were offering better service, more choice and cheaper alternatives to European products. So we did our homework, and wanted to find out exactly what consumers want, and what the sheds were lacking. The answer was simple: choice. Our in-depth research highlighted that consumers crave choice. They don’t want to be restricted by set measurements or colours, and don’t want to be told what the interior options are; they want to be able to choose. So that’s exactly what we have enabled them to do! Daval has revolutionised the British manufacturing industry by creating, developing and realising the very real possibility of producing one-off pieces of furniture, on a mass scale. Option-I – the technology that enables this – has flipped the manufacturing industry on its head and turned the focus back to the consumers’ needs. In a society where consumers desire individuality, a more personal service and understanding of the provenance of their consumables, the British manufacturing industry must react to these needs. By innovating we can once again make British manufacturing the best in the world. * Croydon Guardian, New Homes Are Too Small, 16 September 2008

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Remaining competitive in challenging times With the latest UK manufacturing production figures having fallen for the sixth month in a row, only adding to the general economic and business unease, manufacturers and consumers alike are feeling the pinch. Actually, the pinch felt by many manufacturers feels more like a stranglehold as orders dry up, customers become more cautious yet more demanding, and raw material prices and availability fluctuate violently in response to local and global pressures.

anufacturers have long been aware of the need to become ever more competitive, and the past decade especially has seen a real concentration on improving efficiency and driving out waste from the business. Lean manufacturing philosophies and ever more sophisticated enterprise resource planning (ERP) systems have helped considerably, the latter especially in providing visibility and insight into the day-to-day running of a company. Significant cost savings are commonplace from reductions in raw materials and finished stock and there’s no doubting the time saved by removing the duplication inherent in ageing disparate IT and/or manual processes. But all too often, the weakest link still remains handling the complex world of production planning and scheduling. And it’s production planning and scheduling that lies at the heart of delivering true efficiency on the production floor by minimising or removing work in progress (WIP). In other words, accurate planning and scheduling facilitates just-in-time (JIT) manufacturing by enabling the right component(s) from the right order to be at the right resource at the right time. What’s more, such planning and scheduling control needs to be completely consistent in order to continue to inspire confidence, not just on the production floor, but in the board room too. After all, it’s easy to see just-in-time (less than helpfully) as synonymous with “by the skin of your teeth”.

And while some ERP systems claim to have powerful and robust internal planning and scheduling capabilities, the reality is that even where this might be the case, these are often not flexible or agile enough to deal with the rapidly changing business world that manufacturers are fighting to survive and remain competitive in. Is it any surprise then that Preactor has partnerships with at least 18 ERP companies and over 130 ERP distributors? Is it also any surprise that so many of our 2,300 customers have used their investment in Preactor to add value to their existing ERP systems by using Preactor as an enabling technology? The plain fact is that in these desperate times, a powerful, flexible and scalable planning and scheduling solution that can integrate quickly, seamlessly and cost-effectively with your existing ERP solution can begin saving you money, fast. By visiting www.preactor.com you’ll find over 90 case studies across most industry sectors of companies like yours that are saving money and remaining competitive, thanks to getting to grips with their production planning and scheduling. If you want to find out more about how production planning and scheduling lies at the heart of just-in-time manufacturing, then visit www.themanufacturer.com/ uk/preactor for a free mini white paper complete with examples.

Published in association with: PREACTOR INTERNATIONAL Tel: +44 1249 650316 Email: sales@preactor.com www.preactor.com

Agents choice of

In times of economic turbulence, it is more vital than ever for manufacturers to ensure that money spent on recruitment is money spent wisely. Becky Done outlines the options

With manufacturing

suffering from a drastic skills shortage and finances increasingly tight, it is crucial that firms’ recruitment programmes are expertly planned, accurately directed and efficiently implemented. Vacancies should be filled within an appropriate and defined timescale, and – most importantly – with the right candidate. Ensuring a full and proficient workforce at all times will assist in driving innovation and maintaining that crucial competitive edge; cutting costs may be important, but all areas of the business should be scrutinised before the decision is made to pare down on people – a company’s most valuable asset. That said, there is no doubt that recruiting costs. Placing an advert, time spent short-listing and liaising with candidates and – a costly mistake – choosing the wrong candidate for the job and having to rerecruit all incur expenses at a level which can easily be underestimated.

Skills & productivity

There have been significant recent developments in the recruitment market. In particular, an explosion in online advertising has seen the UK’s online recruitment spend more than triple over the past two years. With candidate supply now starting to outstrip job availability, agencies have responded by updating their own business models, resulting in a range of available fee structures and packages designed to provide a personal and effective service to cater to the particular needs of the client. Now could, therefore, be the ideal time to seek their expertise, as increased competition often points to a better deal for the client, accompanied by a superior level of service. Recruitment agencies are perfectly placed to answer the needs of employers, as Monson explains: “During the current economic downturn, recruitment becomes even more critical, because organisations still need people with the right skills, knowledge and attitude through that difficult period. Then, when there’s an upturn again, they will want the right people on board to push the business forward. So when recruiting, employers should be looking to maximise their ability to track down talent and acquire high-performing individuals – which agencies can help them do.” Agencies are also a logical choice for manufacturers seeking temporary workers – for example, on the shopfloor in the run-up to Christmas and other peak periods. Agencies will already have a well-established and reliable bank of workers whom they know well; in addition, they are often the first port of call for jobseekers seeking temporary contracts. If workers with language or other skills – such as proficiency on a particular piece of machinery – are required, an agency may well already have a number of suitable candidates on their books. There are additional benefits: agencies will be able to share their market knowledge and assist with manufacturers’ long-term resourcing plans; they will be able to advise on updates in legislation and can also be extremely useful during the transition period after a candidate has been placed, ensuring

that things run smoothly for both the employer and the new employee, being on hand to advise should problems arise. It is clear, therefore, that agencies can provide far more than potential job candidates; and such a comprehensive service is something that manufacturers should look at carefully when considering value for money, as Monson advises: “Employers should be looking at getting added-value from the recruitment agency – things like reduced bottom-line costs, increased efficiency, enhanced employer brand and the delivery of strategic goals, as well as getting the quality candidates and being able to employ the right people in the organisation.” Recruitment agencies can also be extremely valuable if firms are forced to make redundancies. At a very traumatic time for the workforce, teaming up with a suitable agency can help to mitigate distress, as Kevin Green, chief executive of the Recruitment and Employment Federation (REC) explains: “Recruitment agencies can work with employers to move people directly into new jobs. Those that are planning to make redundancies should work with local recruiters to make this transition as painless as possible. These are difficult times, but there are still plenty of vacancies in the economy and recruiters can play a vital role to swiftly move people onto new opportunities.”

should be looking at getting “Employers added-value from the recruitment agency – things like reduced bottomline costs, increased efficiency, enhanced employer brand and the delivery of strategic goals

“

The time factor is a major consideration for manufacturers, many of whom are currently juggling a range of complex financial, legislative and resourcing issues. Internal human resources (HR) departments are multi-faceted and therefore have a range of issues to deal with, from legislation and training to recordkeeping and employee relationships. There may not be the required hours available to dedicate to chasing references, setting up interviews and providing feedback, but taking too long between any stage of the recruitment process can frustrate prospective employees and potentially damage a company’s reputation – inadvisable in even the most buoyant of markets. This is where external recruitment agencies can play a crucial role, as Nicola Monson, research associate at the Chartered Institute of Personnel and Development, explains: “At the moment there is a clear emphasis on having a strong employer brand and the benefits that can bring to an organisation. Where two parties are working together collaboratively – the agency and the employer – this will ultimately bring benefits to the brand.”

The potential benefits of this are threefold. Firstly, and most importantly, it can provide staff facing redundancy with an easier transition period. Secondly, it can reassure remaining employees of the company’s concern for the welfare of those departing – key for maintaining morale. Thirdly, it can be a valuable first step in establishing a relationship with an agency that could prove very useful once the economy begins to recover and staffing needs begin to increase again. Before choosing a recruitment agency, shop around for the best possible deal on fees, and seek testimonials from other firms about which agencies they have found to be efficient and effective. It is also wise to pinpoint a company that is an expert in recruiting within your sector. Finally, it goes without saying that you should ensure your chosen agency is reputable – try the directory listed on The Recruitment & Employment Confederation website – see www.rec.uk.com for details. Turn the page to find out how one recruitment provider helps to meet manufacturers’ resourcing needs

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...to piece together your complete team TAC Europe is one of the largest dedicated providers of technical staff operating in the recruitment market today. For more information on how we can help you or your organisation, please contact us at info@taceurope.com or alternatively call us on +44 (0)8700 600 822 quoting â&#x20AC;&#x2DC;TACMAN08â&#x20AC;&#x2122;.

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the core Partnering with industry at

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As one of

the largest specialist providers of technical recruitment solutions operating in the UK today, TAC Europe works across a broad spectrum of industries, including the aerospace, automotive, defence and engineering sectors. Having established a strong reputation for reliability and expertise, the company is continuing to cement its foothold in the global recruitment marketplace through its membership of a number of key trade bodies and industry associations. This approach allows the company to continuously expand and grow its specialist expertise, enabling it to share substantial and relevant market knowledge with clients. John Reynolds, membership manager at Farnborough Aerospace Consortium (FAC) explained how long-term membership of the FAC clearly demonstrates TAC Europe’s continued commitment to the support and development of UK-based businesses. “As a corporate member of Farnborough Aerospace Consortium (FAC), TAC Europe is able to reach a wide audience from the aerospace and defence sectors. Events such as the Farnborough International Air Show further facilitate its presence in the market and expose it to contractors and other potential clients. In addition, as part of our consortium based in Dubai, TAC Europe is also

able to expand its presence in the global market. Contractors interested in doing business with TAC Europe are afforded the confidence that membership to a consortium such as FAC provides.”

registered lead auditor for SGS explained: “SGS provides certification services which verify that TAC Europe meets the exacting standards required by its client base. Being able to demonstrate compliance with the ISO 9001:2000 standard confirms The company has also helped facilitate the company’s commitment to going the progression of trainees in their the extra mile to ensure that clients chosen industries, as president of SAE- receive what they are asking for.” UK Derek Reaney explained: “SAE-UK has a strong appreciation of companies The combination of TAC Europe’s such as TAC Europe and is indebted to unwavering drive for quality, extensive their sustaining company membership industry knowledge and high of SAE-UK. The aim and objective of marketplace visibility underscores its SAE-UK is the provision of technical ability to source the best candidates skills and engineering resources for all clients at all times. in support of the mobility industry sectors. Organisations like TAC Europe can be key in assisting newly qualified graduate engineers to obtain the first foothold onto the ladder of engineering and design, developing skills that will be of real-time contribution to the everchanging needs of the industries they will serve. SAE-UK commends the support offered by TAC Europe via their corporate membership; and trusts that mutual benefit is recognised by both organisations in the preservation and supply of technical resources for the future.” Finally, TAC Europe is firmly committed to quality at the highest standard, an attribute reflected in its ongoing full ISO 9001:2000 accreditation, as Mike Swanson,

Published in association with: TAC EUROPE Tel: 08700 600 822 Email: info@taceurope.com www.taceurope.com

Demand chain management –

what’s in a name?

A personal view, by Mark Greatrex, product and services director, Lakeview

From the

earliest days of manufacturing, the emphasis has been on managing the organisation’s supply chain in meeting the twin needs of running an efficient production operation and meeting customers’ delivery requirements. However, over the past decade there has been a growing, if slow, shift in best practice thinking away from supply to demand as the focal point of a truly effective business. For today’s market-leading manufacturers therefore, there is no longer an exclusive focus on capacity plans, finished goods stock levels, material supplier schedules and minimum batch quantities. Though still important, they are now assessed in the context of what market demand is likely to be over the next six to 12 months, or over as long a horizon as the individual business can sensibly project.

Logistics & supply chain

Since the mid-1990s, the principles of demand chain management have gained an increasing foothold in enterprise manufacturing businesses, though it must be said the concept has yet to have a similar impact at SME level. So why should demand chain management be recognised as, in effect, an example of leading edge supply chain thinking today? First, by focusing on customers’ existing and future demand, the business is likely to provide a greater level of order fulfillment – delivering in full and on time more often. This has become of critical importance in a harsh economic climate in which more demanding customers are insisting on measurability of performance in the form of strict KPIs – and are more likely to ‘vote with their feet’ and change supplier if these high-level service requirements are not met. Equally importantly, internal efficiencies also benefit, as supply can be modelled on a more accurate view of demand, enabling pressure to be put on production and raw materials suppliers to match these precise requirements. This is a radical departure from the traditional way of thinking – that of setting minimum batch or order levels supported by a volume of finished stock and raw materials holding which allows the business to feel ‘comfortable’. The problem with this less informed and more inflexible stance is that it risks costly overstocking and obsolescence on the one hand, and an inability to respond to rapid changes in ordering patterns on the other. With demand chain management, by contrast, the manufacturing unit is able to provide improved delivery performance, while at the same time cutting stockholding, production and purchasing costs.

An evangelist for change

As with any major change, there are typically two main hurdles to overcome if the business is to successfully adopt a demand-led approach in this way. In order to overcome the inertia of a production and stock control operation satisfied with the status quo, an internal senior level ‘evangelist’ will be required to describe the change, promote the benefits and drive it through. And this will need to be supported by the right systems and processes, which in this case means the implementation of an appropriate demand forecasting and MRP solution. This needs to provide visibility of both the demand forecast and supply situation and then in response create suitable works orders for finished goods and purchase orders for materials and sub-assemblies. Critically, the forecasting process needs to be capable of ensuring that the demand history is both clean and accurate, as it is pointless trying to base future requirements on flawed data, and be capable of ‘intelligently’ learning from the past. This will need focus from your planners and sales people working closely together – often a weak team in many traditional businesses.

At the same time, the production planners need to work with a software partner in understanding and implementing the forecasting/MRP system. This too is central to any project’s success as, in our experience at Lakeview, third-party consultancy support – together with the internal project ‘champion’ – is at least as important in effectively embedding the concept of automated forecasting and planning based on a common platform throughout the business.

on customers’ existing “Byandfocusing future demand, the business is likely to provide a greater level of order fulfillment – delivering in full and on time more often

“

Matching supply to demand

First steps

For any company looking to adopt a demand chain management approach, there are a number of key issues to consider from the outset. An implementation plan will be needed to address such questions as whether forecasts can be secured from key customers and if the current computer system and database can provide a true demand history over the previous two to three years, taking into account distortions by, for example, and problems of availability. Adopting Pareto’s 80/20 rule, it is important to start with the highest volume customers and products. However, this should be undertaken with some caution: any proposed change should initially be tested in parallel with the existing system in order to ensure that customer service levels do not dip during the early phase of implementation. It is also sensible business practice to select the right combined consultancy and service partner. They should be experienced in your particular marketplace – SMEs, for example, have markedly different IT requirements to their enterprise competitors – and be able to provide strong reference customers to support this. Finally, how important is demand chain management? In a commercial environment, in which most markets are more competitive in terms of price and service and customers more demanding and promiscuous than five years ago, it is not perhaps too fanciful to suggest that the adoption of a demand-led approach will become a business-critical issue, to the point where it becomes a case of ‘adopt or die’.

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Logistics & supply chain

“Changing over from our previous solution was the most complex task the business had undertaken. Yet the combination of Lakeview’s flexible, easy-to-use software development approach and comprehensive training and support meant that the two-month period of parallel running went smoothly and staff were able to derive real benefit from our investment almost from day one.” At the outset, some modifications were made to the reporting and documentation tools to meet specific works order requirements, including detailed picking list and quality information, together with inspection status card data. Once established, DMS Technologies added additional functionality such as fixed asset register. “However, in extending our investment in this way, our goal has remained the same,” says Winter, “namely to put in place a cost-effective accounting system with extended manufacturing capability which meets the needs of a company the size and type of DMS Technologies.”

Critically, the forecasting process “needs to be capable of ensuring

“

that the demand history is both clean and accurate

Since implementing a Lakeview solution DMS Technologies has doubled its turnover, yet now manages the enlarged business with a smaller accounts team than previously. At the same time, Lakeview has provided a level of service support which, believes managing director, Malcolm Winter, “is as good as you’ll get.”

Challenge

DMS Technologies typically manufactures around 300 different products from more than 2,000 parts. In supporting this process, the new management system enables manufacturing to maintain tight control over bills of materials and all other aspects of the procurement and assembly process.

a commercial environment it is not “Inperhaps too fanciful to suggest that the adoption of a demand-led approach will become a business-critical issue

“

In looking to overcome the drawbacks of the previous accounting system, DMS Technologies wanted a management system which would provide better manufacturing control. “We recognised that a full-blown MRP system would be inappropriate for our size,” confirms Winter, “and, after researching the market, we identified a suitably scalable software solution for our accounting and manufacturing needs.”

Solution

Results

“When we implemented the new system, there was great emphasis on training our staff to get the most from the enhanced management capabilities offered,” he recalls.

The initial software purchase was DOS-based, with the subsequent transition to a Windows-based system smooth and seamless. Similarly with hardware, DMS Technologies has purchased two replacement servers and associated support, which Winter describes as, “an object lesson to other, much larger, IT suppliers.”

The standard solution offered most of the functionality required, with little customisation needed. For example, its inherent ability to drill down and ensure complete records of materials was particularly important, as DMS Technologies required full traceability to meet both customer requirements and its ISO9001 quality standard.

Since implementation, the now 40-strong company has doubled in size to nearly £6 million annual turnover, yet the new management system allows DMS Technologies to continue to manage and grow without a similar increase in staffing.

Have your say at www.themanufacturer.com

competitive edge Ian Ritchie, managing director of Brammer UK, looks at how a planned and proactive approach to all aspects of maintenance can deliver significant financial and operational benefits to companies across all manufacturing sectors

While every

manufacturing company has a maintenance department, often, because of time and resource constraints, its role is primarily based around firefighting, with very little in the way of planned or preventive action to avoid further downtime in the future. And, while many companies realise that an improved maintenance programme can help reduce downtime, the majority are still some way off the type of approach that will deliver long-lasting benefits to the companyâ&#x20AC;&#x2122;s bottom line.

Put simply, developing and implementing a maintenance management programme across all aspects of production is one of the most cost-effective actions a company can take â&#x20AC;&#x201C; especially when the costs of production downtime are taken into consideration. These costs can vary tremendously across industries, but can typically range from a few thousand pounds per hour, to hundreds of thousands per day, and even completely lost production in sectors such as food and drink.

Operations & maintenance

One way in which companies can start to tackle the issue of avoiding unplanned downtime, helping to maintain production schedule adherence and maximise their production efficiency and asset effectiveness, is through the process of condition monitoring. Using condition monitoring equipment on production critical machinery can help identify a problem before it leads to a line stoppage, allowing for maintenance to replace the component with minimal disruption during the next convenient plant downtime. The application of condition monitoring has been made even simpler by the introduction of wireless systems that can now detect and report excessive vibration or temperature from even the most inaccessible or inhospitable production critical locations. Furthermore, it removes the need for components to be changed on a time basis – possibly when change may not be required – and instead allows for change on a condition basis, which can extend service life and maintenance intervals. Condition monitoring can also help companies plan what spares they need to keep in stock as they have a better idea of how long key components are lasting, reducing the need to tie up working capital in large stocks of spare parts. This has the further benefit of avoiding unused spare parts deteriorating or becoming obsolete over time and needing to be written off.

Reducing costs in the purchasing supply chain

Manufacturing input costs are currently running around a third higher than last year, with high raw material costs, fuel and energy costs all impacting on the profitability of manufacturing business. While it is often difficult to control rising input costs, many business process costs related to maintenance management can be addressed to improve efficiency and deliver cost savings. Indeed, with maintenance now typically a top 10 indirect spend for most manufacturing companies, it is clearly an area where major savings can be made. One area to address is the purchasing supply chain. The sourcing of spare parts in today’s competitive manufacturing environment is an increasingly critical element of a company’s total strategy affecting cost, efficiency, safety and productivity. The MRO business can be highly transactional, with buyers shopping around a number of suppliers to get the best price for the same item, but a successful procurement strategy and rigorous implementation can make a significant difference to the bottom line of any company. To really deliver value and ensure total cost of ownership savings, buyers should seek to reduce the number of suppliers of similar products and services – focusing on the bigger cost base picture, rather than looking to shave a small percentage off a price through supplier proliferation.

As an example, one customer in the food and drink industry used to have 3,000 parts suppliers which it recently reduced to a more manageable 230, and now plans to consolidate further to less than 10. Reducing supplier numbers impacts very positively on costs and helps to streamline business processes, consolidating expenditure, and eliminating many of the duplicated costs associated with multiple suppliers, such as purchase orders and payments. Suppliers providing a comprehensive range of components and services will therefore be attractive to manufacturers seeking to rationalise a supply base to bring economies of scale and consistency of service.

Whole life costs are a true measure

While supplier reduction will almost certainly reduce costs, it’s just as important to examine the whole life costs of spare parts and equipment. In almost all cases, this is as important as the upfront price of the individual component. Buying through authorised distributors guarantees quality assurance, consistent part numbering, instant confirmation of availability, total product traceability, and full manufacturer’s warranty. Each of these elements is critical to successful spare parts management and is just as important as the initial cost.

many companies realise that an “While improved maintenance programme can help reduce downtime, the majority are still some way off the type of approach that will deliver long-lasting benefits to the company’s bottom line

“

Identifying problems before they occur

However, the relentless drive to stay competitive tempts some companies into decisions based on unit price rather than total cost and performance; and ultimately to choose unauthorised distributors that have lower overheads and seemingly lower costs. Any decision to choose an unauthorised distributor, though, can potentially compromise machine performance and safety. Products from an unauthorised source are often not to the latest specification, and may have been incorrectly stored and handled, while a lack of industry-specific expertise can result in an incorrect fault diagnosis being made. It could also mean unknowingly receiving products which are counterfeit, such as bearings – something which is a growing global menace. The most immediate risk is that counterfeit parts can fail – potentially causing severe damage to machinery, and resulting in costly downtime, lost production, delivery delays and expensive repairs. Health and safety can also be catastrophically compromised for those using

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Operations & maintenance

the machinery. Recent discoveries in Europe have highlighted the growing nature of this problem, with more than 3,500 industrial accidents per year due to poor quality fake products. And it goes without saying that anyone who has bought counterfeit products can expect no redress from the manufacturers for any costs, liability or claims. Indeed, it is clear that any company that cares at all about quality, brand reputation and social responsibility ought only to buy genuine and fully branded products.

Creating savings on energy

Well-managed maintenance – in particular not ‘overspecifying’ in terms of the parts needed for a particular job – can play a significant role in reducing energy costs and so impact positively on profitability. In the UK, for example, industrial electric motors and drives account for more than two thirds of power consumption in industry. Yet many motors are unnecessarily oversized for the machines they power. The annual energy cost of running a motor can be up to 10 times its purchase cost. A 10kW motor operating at 87 per cent efficiency could cost £1,500 more over its lifetime than one that is just five per cent more efficient. And, fitting the correct drives can save as much as 50 per cent in energy. Clearly, specifying parts that will do the job more efficiently in the long-term can save money and pay big dividends. In particular, cost-efficient energy management is a real opportunity for manufacturers. Yet a recent major survey of several hundred UK manufacturing companies revealed that only 50 per cent have a formal energy management policy and action plan in place. A further 30 per cent admitted to taking ‘opportunistic’ steps to improve their energy efficiency and reduce their carbon emissions, while the remaining 20 per cent take no action Reducing of any kind.

numbers impacts very positively “on costs andsupplier helps to streamline business processes,

“

Best practice in this area suggests consolidating expenditure, and eliminating many of the that to deliver the duplicated costs associated with multiple suppliers maximum benefit, time needs to be taken to identify the specific areas of the business where the biggest improvements and potential cost savings are achievable, rather than focus on changing just one or two individual components. The challenge in all of these areas is to identify ways in which manufacturers can improve their production output and efficiency, while reducing costs. A streamlined supply chain, reduced time and money spent on administration, lower capital cost and fewer parts to manage in stock – while having essential parts available immediately they are required – is the smart way to manage maintenance operations.

Have your say at www.themanufacturer.com

Russell Page, senior improvement consultant at Picme, examines how a holistic approach to energy improvement can deliver real savings

There is more

to saving energy than fixing steam and compressed air leaks, investing in energy efficient motors and having boiler efficiency surveys. After all, if reducing energy consumption were industryâ&#x20AC;&#x2122;s only concern, then the simple solution would be to turn everything off! Obviously that is not an option, so in order to make savings it is important first of all to investigate exactly how we use our energy supply. Many large companies will already employ an energy manager, but to achieve maximum energy efficiency, a holistic approach should be taken with representatives from all departments involved. Different departments all impact on a businessâ&#x20AC;&#x2122; energy costs. For example, the purchasing department will determine the price paid for energy; the production department for how it is used; engineering for how it is distributed and technically used; finance to assign financial resources to achieve energy returns from investments; and so on. Once a suitable team has been gathered together, the next step is to start to define and understand where and how your site consumes energy. This is best achieved by mapping out your energy distribution systems and what is connected to them. During this process, it is important to remember that energy distribution systems themselves consume energy. From the mapping stage, you will have identified points of energy consumption, but now you need to begin to quantify the amounts. How and why is the energy

consumed? What is the pattern of energy usage at these points? This data should be delivered by an onsite metering system, which will ideally measure at 10 or five minute increments. Add in other relevant data: what are the shift patterns you use? When are production lines or units manned up and running and when are they normally idle? What is overall equipment effectiveness like (OEE)? What is the production plan and sales forecast like? All these, and more, are relevant to a holistic energy improvement. Remember, it is not how much energy you use, but what use you make of it; and all these things impact on how you use energy. Once you have gathered your data, the next step is to analyse it. Energy is often mistakenly considered as an overhead by organisations. If we take the time to look at patterns in energy consumption, it soon becomes clear that this is rarely, if ever, the case. Start to look for relationships between consumption and some other variable. For example, if your factory is heated, try relating energy consumption (electricity, gas, or steam) to degree days per week or even degree days per day (degree days are a way of measuring heating requirement against the outside weather). This is done by plotting consumption against degree days and asking Excel to identify a relationship. Graph One shows a plot of boilerhouse fuel against degree day weeks. Excel will also tell you the level of confidence, indicated by R2 on Graph One. 0.9304 indicates a very good correlation. Inspect the plot for any outliers in the data which may legitimately be

Sustainable manufacturing

removed because they relate to special circumstances such as a shutdown, short running, or even a major problem on a piece of kit which significantly impacted consumption. This will improve the level of confidence and the model of the steady state energy consumption.

The energy cost is therefore enormous, and wasted. The future state in this case would be to re-arrange the production facility and HVAC system through zoning and partitioning so that the HVAC system controls can be matched to production requirements.

Other variables to look at include occupation (are people present in the factory?), output, and any others that might occur. However, your mapping exercise will highlight the relevant variables to you.

Example two

With this modelling, and with the mapping, you and your team will now have a ‘current state’ map of your energy consumption. Along the way you will have learnt a lot more about how and why energy is consumed at your site, and you will have the knowledge to begin changing it such that the energy consumption and/or cost of energy per unit of product is reduced. You can target areas of waste energy use to reduce consumption, and you can generate a future state map of how energy should be used on site.

All businesses have different energy needs, but by way of example, consider the following: Example One

A pharmaceutical plant with a large production hall housing several different production lines but where all of the HVAC equipment is common. Most of the production units run for five days per week, but one runs 24/7. This necessitates all of the HVAC systems running 24/7, most of the time purely for one production unit.

a suitable team has been “Once gathered together, the next step is to start to define and understand where and how your site consumes energy

“

In a factory similar to a pharmaceutical site, I would expect steam consumption to be related to weather (where steam is used primarily for HVAC) and electricity to be related to occupation. For instance, if a factory is occupied and running, then a fixed amount of electricity is likely to be used. Also, consider smaller areas than the gross site energy consumption, as here the relationship to the variable will likely be clearer.

Many chemical plants these days have legacy infrastructures, with steam services running to and through facilities that are no longer used, not used as much as others (similar to the pharmaceutical example), or even in some cases are no longer there. The heat loss, and hence the energy consumption, in running steam through pipework unnecessarily is surprisingly costly. By working through a current state map and then creating a future state map, the steam infrastructure can be modified through the use of valves to zone off portions so that steam is only fed to areas that require it.

Example three

Centralised steam-generating systems are common (and very wasteful compared with new technologies). Understanding where energy is consumed can quickly lead to energy saving improvements. I have worked on a site where steam consumption could be directly related to the weather (degree days). Graph one shows this done in practice. Through observation the lagging was in a poor state, and for some very extensive runs completely missing. Through a steam trap survey it was identified that a large number of steam traps were passing, also adding to the overhead cost of running the steam systems. Where steam

Graph one

number of target areas: from your measurement of energy for a specific process you may find that the base load for it when not operating could be as much as 70 or 80 per cent of its running load. This may be due to pumps left running, agitators stirring, ventilation running, etc. Putting together a small team of operators to look at ways of reducing base load consumption, with the right management support and data, will always generate ways of reducing the base load. And if it is their idea they are more likely to follow any procedures for turning off equipment to reduce consumption than if it is imposed upon them.

consumption does not relate to weather but is production dependant, the cost of running the steam infrastructure can still be measured by looking over a period such as a shutdown, or a period of nil or low steam demand for whatever reason, and measuring the steam demand for that period (it is easier to measure steam demand through boiler fuel consumption than actual steam usage – steam meters are notoriously hard to use, expensive, and difficult to install). Also, do not discount the use of theoretical information for things such as heat losses from pipework, available from sources such as the Carbon Trust.

Example four

Energy bought during the day is different from energy bought at night. And energy bought at short notice is different from energy bought ahead of time. This is a very complex area, but for the purposes of this article, suffice to say that the purchasing strategy used for energy (electricity and gas supplies) is capable of having a significant impact on energy cost. Add into the mix other variables such as when particular operations are carried out and energy could be preferentially used when it is cheaper. This could result in an energy cost saving of 10 or 20 per cent, depending on your contract.

Poor OEE (overall equipment effectiveness) will always impact on energy consumption per product unit. In batch chemical production, the performance aspect of OEE is typically around the 60 per cent mark when measured against the best the process has demonstrated it can do. This means that batches have taken 40 per cent longer than they should have done, consuming energy in doing so: vessel left mixing too long, refluxed for an extra hour or two, and so on (the reasons why are myriad but all too common). Poor quality and re-worked product is the worst culprit. Again, teams of operators are very good at tackling these issues, and Picme’s Masterclass product has an excellent track record in this area.

Example five

Never underestimate the value of your personnel – they are your best asset, but only if you use them. From your future state map you may identify a 001469_np e3_Manufac 125x178.qxd:Flip flop ad

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Graph two

The final stage of holistic energy improvement is control. With the modelling of the site consumption done earlier, it is possible to now compare actual consumption to the modelled consumption and differences to be tracked. A cumulative sum graph (CUSUM) is a good way of highlighting and amplifying differences between the model or benchmark and actual. Graph two shows the boilerhouse fuel CUSUM from example three, with the effect of weather accounted for. As energy consumption improvements were achieved, this translated into a downward sloping line indicating energy savings. The effectiveness or efficiency of steam use has improved, and the overhead cost of running the steam systems has reduced. Graph three shows an electricity CUSUM where consumption is based purely on occupation and not affected by weather or even production volumes. Any consumptions greater than the model predicts indicate a worsening energy pattern, whereas any consumptions less than the model predicts indicate an improving

energy pattern. If your site has a key variable that indicates likely energy consumption, for example the weather, then you will now get clarity of what is going on with energy without the clutter of the unknown. You may be over budget for energy in a particular month, but if the weather was cold you can now explain why. If your energy saving activities are bearing fruit you can even claim a hefty saving while simultaneously being over budget! If you add in energy cost per unit into your model, you can even isolate the impact of unit price movements against those budgeted for. This will give variance reporting on energy similar to accounts use for management accounts. Finally, in the team you set up in the beginning, you have a ready-made energy steering group to continue monitoring and driving energy consumption improvements. Collectively, they can identify and commission energy projects and initiatives, taking into account all the different aspects of energy improvement work: holistic energy improvement.

Graph three

Have your say at www.themanufacturer.com

LIVE2008 On the 15 and 16 October delegates, exhibitors and speakers headed to the ExCel Centre in London for the Manufacturer LIVE 2008 awards ceremony, conference and exhibition. Read on for a review of this year’s event...

Nick Hussey,

managing director of The Manufacturer’s publisher SayOne Media, said: “This year’s LIVE conference was well attended, with standing room only left at a number of presentations. Considering the event took place during one of the most turbulent times in recent history this is testament to the strong line-up of speakers and presentations on offer to the visitor. “Manufacturers from all over the UK attended, demonstrating that there is a continued need for focused educational events and a readiness on the sector’s part to seek out new ideas for their business.”

The conference and exhibition kicked off with a joint keynote speech from sponsor Royal Bank of Scotland’s Ross Walker and Stephen Radley of EEF, where the threat of recession – estimated as half to one per cent in terms of economic decline – was touted as a likely realisation over the coming year. The analysts forecasted this to be only a temporary situation, however, and said British industry would resume its growth from the beginning of the next decade. Delegates then dispersed to presentations spread across four main streams and two additional ones in the main arena.

Manufacturer LIVE 2008 Event coverage

Your People

The Your People stream attracted many manufacturers keen to enhance and improve their skills and those of their workforce. It offered insight into what other manufacturers are doing to ensure their teams are fully equipped to handle the challenges and opportunities that the market presents. In the first session, Tony Salt of Swizzels Matlow looked at an interesting collaboration with the University of Derby that has resulted in a re-energised and motivated workforce, an improvement in retention and a strong training culture among its 600 staff. The next slot saw a high-energy, interactive workshop delivered by Tony Hall, colleagues from e2v and two actors! The company has recently teamed up with the London Academy of Music and Dramatic Art to offer leadership development courses to staff, affording them the opportunity to direct a play using real actors with the aim of facilitating enhanced leadership skills and behavioural insight. The session gave the audience themselves the chance to collaboratively direct a scene from the well-known television series Sex and the City.

Finance

The Finance stream provided an informative and important examination of the financial issues affecting manufacturers today. The first session was delivered by Jeff Whittingham of British Gas Business and covered the global energy crunch and energy services in the market today, as well as how to reduce and manage energy costs. It also considered what carbon is costing UK manufacturing.

The final session was a presentation by George Kessler CBE, of point-of-sale producer Kesslers International. This covered the issue of apprenticeships and how these can prove an effective vehicle for nurturing talent, encouraging a learning culture in the workplace and improving retention levels. Kessler called for manufacturers to put pressure on the Government to continue support for skills. “We have huge strength in design and tacit knowledge,” he said. “All we need to do to keep manufacturing as an important sector in the UK is to strengthen and change our training system – and more importantly, use it!”

The next presentation, from Rolls Royce, looked at the role of IT in financial operations, and how this can be optimised to its maximum potential. The talk was pitched at finance directors and financial management staff, as well as those interested in the use of IT as a tool to facilitate excellence in business. Paul Bell of Kanban Supplies then gave his uncensored account of the first 19½ weeks of the turnaround of this previously loss-making pressing and fabrication business. See page 67 for the next installment of the Kanban turnaround diary. The penultimate talk was by Jan Ward of Corrotherm, whose presentation centred on how manufacturers can develop their export sales to really help them succeed and thrive on a global scale. Christian Schirmeister of RBS Sempra followed, with a talk focused on the London Metal Exchange which also gave case study examples of manufacturers using the exchange. It offered an insight into margining systems, hedging risk and optimising factory gate prices, as well as giving valuable tips for the future.

Production Strategies

Dave Ward of BAE Systems presented to delegates in the Production Strategies zone. Ward’s presentation was based on supporting and enhancing complex products throughout their lifecycle and he talked about how modern tools and processes are used to service military aircraft that are sometimes up to 40 years old. His presentation was recorded at the event and will be featured in full on our website – www.themanufacturer. com/uk – in the coming weeks. Afterwards he said: “I believe that The Manufacturer LIVE 2008 gave a fantastic opportunity for organisations to come together and showcase what is great about British manufacturing. The wide range of companies on display, along with the informative and thoughtprovoking speeches, made this event highly useful in terms of networking and strategic planning. “I would recommend that companies from all of our manufacturing industries get involved with The Manufacturer LIVE 2009 and make it the biggest event yet.” John Vigar of Lotus Cars was in attendance watching his colleague Tony Shute present to delegates. This presentation boasted one of the best attendances of the day. Shute told delegates all about the origins and development of the new Lotus model, the Evora, including the next generation production techniques they implemented. Shute brought along a chassis of the Evora for everybody to have a look at. “All in all, an excellent event,” said Vigar. “We all enjoyed it.” See page 66 for the next installment of the Lotus Evora diary.

Other speakers in the zone were Liam Malone from Amtek Group, who discussed the implementation of a new initiative from The Process Excellence Academy (PEx), called PEx in a Box, encouraging internally-led lean programmes as opposed to contracting external consultants; Sid Holian from Consilium who presented case studies based on reviewing strategy, product mix, technical specification and physical requirements of production facilities in order to optimise the manufacturing link of the supply chain; and Chris Ellins from Total Flow who held an interactive session based on realising lean implementations to their full potential and creating ‘purple cows’ – “products and services that people want to talk about.”

Sustainable Manufacturing

In a popular stream given the high exposure of the subject matter as a burgeoning concept in relation to the current economic and business climate in both the media and academic circles, this zone saw a strong lineup deliver practical advice, solutions and case studies to aid firms in their quest for the holy grail of sustainability. Matt Davis of IMServ presented the case of a decent energy management strategy as a way to alleviate the

Manufacturer LIVE 2008 Event coverage

threat of the credit crunch. He discussed best practice tips in terms of simple installations and maintenance along with ownership and measuring issues. Delvin Lane from the Carbon Trust talked of the financial support and advice available from his governmentfunded organisation for manufacturers and urged them to seek all the help they can get. The economic provisions include interest-free loans while the advice ranges from free, generic best practice tips for smaller companies through to fully bespoke and uniquely devised strategy plans for larger businesses. Steve Martin, operations director at InterfaceFLOR, regaled his audience about his company’s implementations of overall equipment effectiveness (OEE) and total productive maintenance (TPM), and explained the process behind the adoption of renewable energy at European sites. He also discussed the endof-life process and infrastructure needed for recycling the firm’s product line – carpets – and the benefits of doing so both for the company and the environment. David Ellison of Morgan Professional Services outlined his firm’s vision of ‘Factory of the Future’ and impressed upon delegates the effectiveness of modeling production and energy processes to ensure efficiency before operations begin. Finally, Richard Barnish from Valpak lectured delegates on producer responsibility. The main topic of his presentation was environmental legislation, including its origins, what it involves and how it applies to businesses. The additional streams featured talks from the likes of the British Chambers of Commerce, the Institute for Mechanical Engineers, Fasset, MAS South East and the Technology Strategy Board.

strengthen that so many took time away from work to attend. Proof also of the sector’s ability to sail through stormy seas was invoked only by listening in to the various best practice stories that resounded around the ExCel. Congratulations to our award winners, who provide evidence enough of the innovation, efficiency and drive that so many firms in UK manufacturing possess. Those companies and all the nominees are an inspiration to those looking to emulate their success and are great ambassadors for UK industry. Finally, many congratulations to the Manufacturer of the Year winner, Willerby Holiday Homes, and special thanks to our sponsor, Royal Bank of Scotland.

Following a final keynote by lean guru Dan Jones, the event wound down with a lean panel discussion featuring Jones with Keiven Zokaei of Cardiff Business School, Liam Malone from Amtek Group and Chris Ellins of Total Flow. Undoubtedly, the most popular attraction at the exhibition was the computer simulator model of the AT&T Williams Formula 1 car supplied by LIVE sponsor Royal Bank of Scotland, in which delegates were given a chance to try their hand at high-octane motorsport in a replica car with 180 degree screens attached. Some got on better than others but suffice to say the decision to turn ‘damage to the vehicle’ off on the simulation was in retrospect a prudent move. A close second was Manufacturing Excellence’s stand where teams of three attempted to change a tyre on a kit car as quickly as possible. The three victors were rewarded for their efforts with a track day prize at their choice of racetrack. We offer our warmest thanks to all delegates, speakers and exhibitors who attended LIVE across the awards, conference and exhibition. For an industry that is constantly told it is staring down the barrel of a gun in the context of a wider economy already plugging bullet holes, it was not so much a revelation but a reaffirmation of UK manufacturers’ proactive desire to

AWARDS2008

Manufacturer of the Year 2008

Willerby Holiday Homes

Sponsored by:

The Manufacturer of the Year 2008 is Willerby Holiday Homes, selected by the judges as an exemplar of manufacturing improvement

The company is no stranger to The Manufacturer Awards. Three years ago, Willerby was shortlisted for an award and pipped to the post by Land Rover – one of the giants of UK manufacturing – losing out by just the tiniest of margins. At that stage the company reported that it was only 18 months into a five year strategy to achieve world class manufacturing status. It is now four and a half years into that strategy; the changes have been impressive and have earned the recognition of the judges.

The story was not, however, always rosy. At the beginning of the new century, the company had a five to six week manufacturing lead time, poor industrial relations, few time standards, outdated piecework pay structures, high rework rate, poor schedule adherence and deteriorating quality. Manufacturing processes and routings were complex, with high levels of inventory as buffers against planning and process deficiencies, and batch sizes were variable – anything between 40 and 200. Things had to change.

This year Willerby has been shortlisted for three awards: Leadership & Strategy, Design & Innovation, and of course the Manufacturing Operations award which it carried off in style.

The board took up the challenge, and initiated the strategy that would transform the company. The migration toward a lean, efficient and happy workplace began on the shopfloor with lean training and the introduction of 5S. But the company decided on an unusual approach to gaining control over production. Preactor (APS) was implemented to centralise process flow decision making and schedule all shopfloor activity.

The company has a long history of manufacturing, which began in Hull in 1946 mass producing caravans for a postwar population that was just beginning to taste the need for relaxation and leisure. Over the years, Willerby has migrated away from caravans to high specification static holiday homes, and is a leader in the field today, employing 800 people at its Hull plant and achieving a turnover of approximately £120 million.

The large varying batch sizes were gradually reduced to nominal sizes of 10, lead times fell from six weeks to seven days and the massive reduction in inventory revealed vast areas of space on the shopfloor. This then created

Manufacturer LIVE 2008 Awards coverage

a great opportunity to reorganise and move plant and resources and create a fluid product flow aligned to the value streams. The company has now moved away from reliance on IT, and kanban lies at the heart of the operations, lead time has been further reduced to five days and manufacturing occurs purely on demand. Parallel with this, staff issues were tackled. A works committee, for example, meets every month, chaired by the production director, to communicate important issues and to air concerns or discontent. Grievances are now down from 62 a year to just five. HR has been improved, and management restructured and aligned to the value streams. Piecework pay systems have been removed and replaced by standard hourly rates. Training is an integral part of the business strategy, and the company’s apprenticeship scheme has proven very popular locally. Industrial relations are now excellent, and employees make a major contribution to improvements in the company. The Manufacturer of the Year 2008 award was presented by Alex Burns, COO at the RBS sponsored AT&T Williams F1 team.

Leadership & Strategy award Drallim Industries

Sponsored by:

The opening of a new facility in January 2004 and the appointment of a new managing director, David Mooney, marked the beginning of a dynamic business turnaround for contract and niche product manufacturer Drallim Industries. The company had been facing a series of crises and substantial losses. But four years on, the implementation of a clearly documented, reviewed and updated company strategy, has changed all this. A £459,000 trading loss has become a £252,000 trading profit, and sales which had fallen to a low of £3.3 million are now at £4.3 million and growing. Under the inspirational and clearly focused leadership of its new managing director, Drallim put a series of longterm initiatives in place to communicate and motivate the staff and improve management at all levels. A staff forum, introduced in 2004, was supplemented by personal briefings from the managing director and a company newsletter, meanwhile, management review processes and staff appraisals were put in place. Improvements have been initiated across all areas of the company. For example, MAS was brought in to help implement lean manufacturing from the shopfloor through to the offices, rapid prototyping techniques were introduced through the Brighton University Product Development Centre, and new technologies are constantly being explored. The company is embracing continuous improvement and has worked to develop a ‘no blame’ culture to promote change. Meanwhile training is well managed and strategically driven, including the introduction of an apprenticeship scheme and continual shopfloor training.

In this year alone, the company has recorded record sales growth of 30 per cent and profits have trebled. The Leadership & Strategy award was presented by Tim Richardson of The Consultancy Company.

Design & Innovation award Inspirepac

Sponsored by:

Formed through a management buyout just over a year ago, Inspirepac is doing exactly what its name indicates. It designs and creates bespoke packaging products which, in the words of CEO Allan Goodall, “provide exactly what the customer wants, not what we want”, and inspires and tempts the consumer. The company’s strategy, following MBO, was to concentrate on three specific segments of the fast moving consumer goods sector: confectionary, snack and beverages. A team of talented designers work very closely with a growing number of household names, defining their needs, offering innovative suggestions and developing design-led packaging solutions to fulfil those needs. Still working closely with the customer, the company then monitors product performance and manages ongoing product development. With shopping behaviour and customer tastes constantly changing, the company is quick on its feet to adapt its designs. For example its retail-ready packaging is designed for the now proliferating ‘convenience’ store, and promotes the customer’s brand in smaller unit sizes that can be filled on the shelf with the minimum disruption. It is also focusing on environmental considerations; reducing the amount of material used to the minimum while continuing to protect the goods, and using fully recyclable materials, including non toxic inks and varnishes. Investment in machinery and training over the last year alone has exceeded £3 million, including the installation of the world’s first Bobst seven colour Masterflex-L flexo printer that provides litho quality. By pushing the boundaries of high quality print and design, and providing a reliable service, Inspirepac is attracting and retaining blue chip customers such as Diageo and Unilever. The Design & Innovation award was presented by Jonathan Ball of the Design Council.

World Class Manufacturing award Converteam UK Kidsgrove

Sponsored by:

When Converteam’s Kidsgrove plant won a large order for variable speed drives from the up and coming renewable energy market, the company realised that if it was to be

competitive, meet the deliveries and prepare for future growth, it had to change its working practices. Its aim was to be the best-in-class designer and manufacturer of AC power converter equipment. For a number of years the company had been successfully using small batch manufacturing methods. In 2006, with full support and involvement of the parent company and site management, the lean journey began. At management level, a comprehensive set of 43 key performance indicators (KPIs) covering all aspects of the business were developed and reported on a monthly basis to the Northern Europe sector and headquarters. Meanwhile, current state and future state value stream maps were developed, along with a plan to migrate from one to the other. Progress was monitored via a comprehensive site roadmap. From 2006 to the present, the manufacture of the two parts of the AC power converter – the cubicle and delta module – have progressively migrated from batch manufacturing to single piece flow, working to a single takt with continuous flow between delta and cubicle lines. Kitting trolleys, sub assembly benches, flow racks for material and shadow boards for tooling have all helped to optimise flow. The appointment in early 2007 of a lean engineer helped inspire and crystallise the lean drive and a continuously monitored and reviewed training plan has improved skills. Although there is still much to do, delta production has increased from five to over 150 a week while costs have reduced by eight per cent per annum. Cubicle production has increased from six to 19 per week, and costs have fallen by 20 per cent. Major reorganisation of the production area has saved considerable space. The World Class Manufacturing award was presented by Mike Hickey of the Process Excellence Academy (PEx).

Skills & Productivity award C-Mac Micro Technology

Sponsored by:

C-Mac Micro Technology, a high-tech manufacturer of electronics for harsh environments, does not pay lip service to the adage ‘your people are your greatest asset’, it acts on that to ensure they are upskilled, motivated and involved in business management and development. Driven by top management, a formal set of HR policies have been embedded in company procedure and are aligned with business requirements. Access to these has recently been opened up to all staff through online HR Self-Service. Good communications are, however, most effective face-to-face, so on a monthly and quarterly basis, staff are updated on company performance and the opportunities and challenges the business faces. At each of these meetings one member of the management team gives a short biography to reveal the person behind the manager.

An Employee Forum provides an informal environment for open discussion of issues employees believe important. Meanwhile, cross functional Tiger Teams identify and initiate improvements both in the manufacturing and supporting departments. Techniques such as value stream mapping have realised significant cost saving and these are then shared with all employees. A 50 per cent increase in output was achieved for one key aerospace programme. Attracting and training staff to the right skill-sets is of critical business importance. Direct operatives are continually monitored, trained and updated. Indirect operatives take part in a performance management cycle that generates a personal work plan and development targets that are monitored and assessed annually. Meanwhile, the company operates a schools liaison programme, and regularly takes on new apprentices and retains them as engineers. The Skills & Productivity award was presented by Steven Whittle of Rolls-Royce.

IT in Manufacturing award Contour Premium Aircraft Seating

Sponsored by:

Contour Aero has contradicted the long held belief that lean and IT are completely incompatible through the implementation of a production planning and scheduling system, tightly integrated with an existing ERP solution, and supporting the move to lean manufacturing. The sheer scale and complexity of Contour’s manufacturing operations made the traditional lean visual signals difficult. For example, each finished seat comprises up to 4,000 top level parts from a range of almost 100,000. Seventy per cent of all components are manufactured in house to ensure the quality, and 200 seats are made per month, the majority of which are highly customised. All of this was handled by 40 CNC machine centres, a range of metal working cells, six vacuum forming areas, 10 fabrication related centres and further departments dedicated to composites and electronics. There are also further sub assembly stages at various points in the manufacturing process before main assembly. Bottlenecks were presenting a continual challenge. Preactor advanced planning and scheduling system was implemented and integrated with the existing ERP system to provide five local area schedules and one master schedule, providing a more efficient workflow and better resource utilisation. Bottlenecks are now correctly identified and addressed. Working hand in hand with the lean manufacturing the composites area, for example, has seen a 70 per cent reduction in work in progress. Although still in the early stages of developing the system, significant cost savings so far include an £8,000 a week reduction in costs in the vacuum forming section. Output has increased by 10 per cent and work in progress fallen by 40 per cent. The IT in Manufacturing award was presented by Emma Taylor of Obis Omni on behalf of Microsoft.

Manufacturer LIVE 2008 Awards coverage

Manufacturing Operations award Willerby Holiday Homes

Sponsored by:

Having made significant steps towards reducing lead time and inventory through finite scheduling, Willerby Holiday Homes began the migration away from IT control four years ago. Kanban control has now been placed at the heart of the operation and with excellent results. Significant time and capital investment have been made across the plant. Using Preactor and value stream mapping to identify bottlenecks on the process, the company was able to reorient plant more effectively. Upgrading the CAD/CAM systems to an integrated barcode system that pulls information to where it is needed, means operators can make rapid process responses. A dedicated information centre was created on the shopfloor and this produces information on a JIT basis using kanban philosophy, resulting in reduced downtime and error proofed processes. Operations now only have the information they need when they need it. Investment in plant has created three fully independent value steams supplying to three assembly lines. And to support the frontline workers, the management was also restructured into the three value streams and open plan offices built to accommodate the new personnel. Kanban is now beginning to control the operation. Manufacturing lead times originally fell from six weeks to seven days with the implementation of Preactor and have now faller even further to just five days under kanban control. Inventory has been slashed, finished stock holding has fallen and there is better product availability. The Manufacturing Operations award was presented by Graham Smith of KPMG.

Green award Boss Design

Sponsored by:

Last year was a landmark year for quality seating firm Boss Design. After years spent working with suppliers, customers and staff it achieved the status of a carbon neutral company, and significantly reduced waste to landfill. Environmental issues have been tackled across all areas of the business, and across the entire life of the product. For example, Boss has introduced an end of life management programme which puts old chairs to use for charitable activities, and those that are not fit for purpose are broken down and recycled. Similarly, the company is pioneering reusable packaging, and where that’s not appropriate it compacts and recycles it. A schedule of planned energy management steps has significantly reduced power consumption. Simply turning down the heating thermostats by a degree, for example, reduced gas consumption by eight per cent.

Looking outside the plant, the company has introduced low emissions vehicles, schedules deliveries to reduce carbon output, and sends drivers on a fuel efficiency course. Meanwhile, it has installed video conferencing, and is systematically reducing the amount of business travel the staff have to do. Boss also works with companies in its supply chain to help them to reduce pollution and waste. The company also reaches out to local schools and communities to show them what manufacturers can achieve and to promote environmental awareness, even funding a wind turbine for the local primary school. All of this means the company is on target to reduce emissions by over 150 tonnes by the end of 2010. The Green award was presented by Peter Flinn of the Technology Strategy Board.

Best SME award Pentagon Chemicals

Sponsored by:

Like all chemical companies, Pentagon Chemicals has suffered from the huge rises in energy costs. But in early 2006, 20 per cent of its revenue disappeared in one fell swoop when a key customer took its business to India, and the company was faced with the realisation that its business was unviable. With serious infrastructure problems and difficulties with stakeholders, Pentagon was facing a tough decision. In September that year, supported by key customers, it chose to fight back and embarked on a restructuring plan. The plan was simple: to deliver ‘right first time’, eliminate waste and optimise cycle times. The key to the transformation was good leadership, a focus on projectby-project implementation, energetic team working and fully engaged staff. With a working environment that promotes productivity ownership, employee engagement and development, improvements have been made across all areas for the business, including moving from make-to-stock to make-to-order. Waste has been tackled in all its forms, leading to working capital reduction from £2.8 million to £0.73 million in just 18 months, while product changeover times have been plummeted from three weeks to three days. Communication across the supply chain has been and is of vital importance. Such openness earned Pentagon the support of bigger suppliers when times were hard, and has been invaluable again during the recent market volatility. By early 2007 the company was back in the black and has dramatically exceeded expectations this year. There has been a 56 per cent improvement in output, a 30 per cent reduction in specific energy consumption and a 1,000 tonne reduction in solvent usage. Pentagon now has an exciting new product pipeline and is planning to grow organically and possibly by acquisition. The Best SME award was presented by Alistair Watts of SAP.

Have your say at www.themanufacturer.com

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Overlooked workers could benefit business.

Shane McDermott

With most industries in the UK facing skill shortages, are employers missing out on a pool of talent?

Julie Greenwood

What would you do if out of the blue you were diagnosed with a long term illness but still had years of valuable experience, skills and talents to offer an employer? Shane McDermott was diagnosed with Multiple Sclerosis, and was determined to carry on working because he knew that he had lots to offer an employer. Andel Ltd of Huddersfield agreed. That’s why Operations Director, Julie Greenwood, recruited Shane as a Production Assistant. He was recruited because of his skills, his positive attitude and commitment. That’s essentially what every successful company requires – people who have the resources to contribute to the business. Shane tests the circuit boards and panels that engineers use when they install leak detection systems in buildings.

As a Production Assistant, he pays great attention to detail because that’s what is needed when he is soldering or testing circuit boards. For Shane, work gives him “something to get up for. I feel like I’m contributing something valuable”. Shane’s disability has never been a problem because Julie didn’t make any assumptions when she recruited Shane. As Julie believes, “It’s important to educate people within the company about disability”. She recognises that disability is as individual and unique as the person it affects and that in the end, what really matters is what an employee can do rather than what they can’t. To read Shane’s full story and find more practical advice about employing disabled people, visit dwp.gov.uk/employability

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Ways to employ ability: Don’t limit your talent pool by overlooking disabled people - focus on who has the right skills for the position. Find out what the law says and how it affects you as an employer at dwp.gov.uk/employability Take time out to look at your policies and procedures. Simply having accessible application forms and interview venues could encourage more people to apply for positions. Don’t make assumptions about disabled people and what they are able to do. Ask them. Employing a disabled person is no more of a risk than employing anyone else – and a disabled applicant may have talents that could really benefit your business. Non-disabled people can feel intimidated about how to address disabled people for fear of saying the wrong thing. Look for more advice at dwp.gov.uk/employability/resources Ask for advice on opening your vacancies up to disabled people from the Disability Employment Adviser at your local Jobcentre Plus.

I’ve taught my body to walk all over again. Learning new skills on-site is a doddle. Rob, Trainee Bricklayer.

Employ ability. TM

An initiative from the Department for Work and Pensions

This scenario is based on the typical experiences of disabled people and those with long-term health conditions. Don’t miss out on the talent they have to offer. For employment advice and information visit dwp.gov.uk/employability

Asiaâ&#x20AC;&#x2122;s latest

economic

star

Thirty-five years ago, it was unimaginable that Vietnam would be one of Asiaâ&#x20AC;&#x2122;s runaway success stories. But, with the country boasting one of the highest growth rates in the world and labour competitive and plentiful, Vietnam is now competing seriously with China

Globalfocus Vietnam

manufacturing costs in China rise, companies who haven’t already done so are increasingly looking to transfer or open manufacturing operations in Vietnam. With a relatively young workforce – nearly half of its 86 million people are under 25 – Vietnam is an obvious manufacturing destination and emerging market for exports. In 2007, PricewaterhouseCoopers ranked Vietnam as the most attractive manufacturing destination among 20 key emerging markets. UK Trade & Investment is the UK Government’s international business development organisation which supports foreign businesses seeking to establish themselves in the UK, and helps UK companies to grow internationally. “Vietnam is a country with huge ambitions,” says Robert Lally, head of the Pacific Rim at UK Trade & Investment. “With China becoming more expensive and its prime locations saturated by foreign companies, businesses are looking to expand elsewhere. Vietnam has a large and young population, high literacy rates and a government that not only encourages growth, but is willing to tackle issues like rising inflation and inadequate infrastructure.”

In 2007, Vietnam exported more than US$48 billion worth of goods, of which £860 million was imported by the UK. It is the world’s largest exporter of pepper and cashew nuts, and the second largest exporter of coffee beans and rice. Its other major products and exports include tea, sugar cane, seafood and natural rubber. Vietnam’s main exports to the UK include footwear, clothing, furniture and coffee. In 2007 Vietnam’s GDP grew by 8.5 per cent, driven increasingly by the private sector, and 59,000 new

2006, foreign direct investment has “Since nearly doubled, to US$20.3 billion, and in 2007 Vietnam joined the World Trade Organisation, with the aim of encouraging greater foreign investment

“

Vietnam is already home to some of the largest British companies, including HSBC, Vodafone, BP and GlaxoSmithKline, and companies like US-based Intel are increasingly turning to Vietnam to take advantage of its skilled labour force. Intel is the country’s first major high-tech foreign investor, and is planning to build a US$300 million assembly and test facility to produce computer chips and parts, employing approximately 1,200 people.

companies were registered – a 26 per cent increase from the year before. The country’s growth can be credited in part to its pro-business government, which has shown a strong commitment to opening up the country to international trade and co-operation. Since 2006, foreign direct investment has nearly doubled, to US$20.3 billion, and in 2007 Vietnam joined the World Trade Organisation, with the aim of encouraging greater foreign investment into the country.

Global focus Vietnam

“As costs in China went up, we had to look elsewhere,” says Peter Greenhalgh, Vietnam country manager for Clarks International. “Shoe manufacturing is a labour intensive business and each factory requires thousands of employees. Even small rises in the cost of labour or duties have large repercussions on our business. This is why footwear companies are always the first in and the first out of emerging markets.” Clarks employs 42 people directly in Vietnam, and close to 50,000 indirectly by outsourcing its manufacturing. Although its manufacturing operations in Vietnam are now running relatively smoothly, it took years of hard work to get there. “As one of the first foreign companies to move its manufacturing to Vietnam, we started from zero,” says Greenhalgh. “It took us two to three years to get up and running, finding our footing in a new environment and educating the local workforce about how we do business. But now that we are established, we have been reaping the benefits of our investment for quite a while.”

From backwater to high tech

Like many foreign companies, Clarks is forced to remind itself that Vietnam is not China. As a relative newcomer to the international trading scene, Vietnam’s infrastructure is not as developed as China’s. Its ports in particular are not equipped to handle the increased capacity generated by the country’s new international trading partners. However, the Government, with help from international donors, is pushing the construction of new ports and the refurbishment of existing ports. “Vietnam has gone from backwater to a high tech country relatively quickly,” says Greenhalgh. “But it’s not where it should be in terms of infrastructure. Although it is making progress in rectifying the problems, it’s moving just a little too slowly. We think that in the next three to five years the country will be where we want it to be to adequately support our business.” In addition, unlike Chinese workers, Vietnamese workers are unwilling to live on site at the factory or travel long distances to get to work. This also means that they are not as willing to work overtime during busy periods. Frequent strikes, and workers’ tendency to put off tasks, result in longer manufacturing times.

Make contact at an early stage with the decision makers at all levels of the bureaucracy including the central government, provincial/city government, and with local industry

Seek assistance from the Vietnamese Chamber of Commerce and Industry and other local governmental organisations that work to build business in Vietnam. These organisations have influence and a wide range of contacts

If you are planning to set up in Vietnam, consult a lawyer about the possible options and how you plan to conduct business there. There are limits to what business entities such as ‘representative’ offices can do

Be patient. Things do not work at the same pace as in the west

Build relationships first. Business will not happen without them

Socialise without being lavish

Use an interpreter at meetings. Follow up any agreement you may have reached immediately and in writing. Yes, Pullmay quote ???????????????????????????? not mean “yes”. It may mean “yes, I understand what you are saying” ??????????????????????????????????????

“

??????????????????? 8. Avoid conflict, retain a sense of humour and be sensitive to any reactions ????? 9.

Explain everything clearly, over and over again, if necessary

10. Do not forget that Hanoi is where the ultimate decision may made on your business proposal (this is especially true Pullbe quote ???????????????????????????? for large investment projects).

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Inflation is also posing a major challenge to foreign manufacturers in Vietnam. Inflation in the first half of 2008 rose to 25 per cent, up from 6.6 per cent in 2006. The government has pledged to fight it, but foreign companies who are forced to pay more for goods are worried that the minimum wage will increase as well, further eating into their profits.

“

???????????????????????????? ThePull high quote inflation rate is one of the reasons that Clarks recently set up additional manufacturing operations ?????????????????????????????????????? in Cambodia and is looking to diversify further into Bangladesh and Indonesia. ???????????????????

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Until six years ago, the company manufactured the majority of its shoes in China. However, a high antidumping duty imposed by the EU on European footwear companies who manufacture outside of the EU led the company to look for alternative locations. In China, Clarks pays a 25 per cent duty, whereas it pays only 14 per cent in Vietnam. The rising cost of labour in China was also a major factor in the company’s decision to look for new manufacturing locations. Clarks now manufactures only about one million shoes a month in China, bound mostly for the US where there is no anti-dumping duty.

Top 10 tips for – doing business in Vietnam:

“

Clarks International, a UK-based footwear company, was one of the first UK companies to see potential in moving its manufacturing operations to Vietnam. It ships around two million pairs of shoes a month from Vietnam to markets around the world.

“

Footwear frenzy

????? carries on the way it’s going, I don’t “If inflation think we will be able to stay here with as great an emphasis,” says Greenhalgh. “If the government raises the minimum wage by 25 per cent at the end of the year, that’s a significant increase and we can’t afford to pay it for long. Plus EU regulations and duties get changed so frequently that we can’t afford to have all our eggs in one basket.” Have your say at www.themanufacturer.com

Paints Vietnam. “Their insight into the local business environment and government regulations enabled our company to liaise and work with suppliers more effectively. Foreign firms with short- or even mediumterm plans tend to struggle in a country where business is based on long-term relationships,” UK Trade & Investment’s Lally agrees and says that the key to success in Vietnam is developing relationships with clients and suppliers.

is at the beginning of “ Vietnam transitioning from a low labour

“

economy to higher value, higher quality enterprises. The government realises that the best way forward is to learn from foreign companies that already have professional skills

“The challenges that British companies face in Vietnam are the same challenges that they face all over Asia,” says Lally. “Foreign companies need to make an effort to build relationships. Just as a London-based company would travel to Birmingham to make a sale, companies need to travel to Vietnam. The companies which succeed are those that invest time and effort to get close to their Vietnamese customers.”

Move to skilled labour

The range of opportunities for British businesses in Vietnam is what makes it one of UK Trade & Investment’s 17 emerging markets around the world, along with Brazil, Russia, India and China.

Emerging market

Vietnam is not only attracting manufacturing for UK businesses, but is also growing as a destination for UK exporters. In 2007, the UK exported goods worth £119.3 million to Vietnam, and between January and May 2008, exports increased by 38.8 per cent, compared to the same period in the previous year. The UK’s top exports to Vietnam include power-generating machinery and equipment, medical and pharmaceutical products and professional and scientific instruments. UK-based company, ICI Paints, ranks Vietnam in its top four global markets for investment and growth, along with China, India and Indonesia. The company entered into a joint venture with a Vietnamese partner in 1996, and has enjoyed remarkable success in recent years. It is now the market leader in interior and exterior decorative paints in Vietnam. Since 2004, the company has grown 25 per cent year on year, and paint production has increased from 300,000 litres to nearly 47 million litres. “Our joint venture partner smoothed our way into the local market,” says Jun De Dios, general director of ICI

“Vietnam is at the beginning of transitioning from a low labour economy to higher value, higher quality enterprises,” says Lally. “The government realises that the best way forward is to learn from foreign companies that already have professional skills. This in part is why so many British companies have gone in and worked well with Vietnamese partners.”

Global focus Vietnam

With a literacy rate of over 90 per cent, foreign companies have a large pool of skilled labour to draw upon. However, as demand grows, it is becoming a challenge for companies to find professionally qualified workers.

Vietnam Capital: Hanoi

Geographic co-ordinates:

“Recruiting high quality staff is becoming more difficult in Vietnam, as other employers chase after a limited number of qualified people,” says Angus Dunbar, head of finance for Armajaro Vietnam, a London-based commodities and financial services business. “We provide a good training and career development package to our staff in order to retain their services and counteract the problem of skill shortages.”

21 02 N, 105 51 E

Armajaro opened its representative office in Ho Chi Minh City in 2003 and received its license as a 100 per cent foreign investment enterprise in Vietnam in 2005. It is now recognised as one of the leading trade houses in Vietnam, with 72 local employees and three expatriates. The company has recruited a strong team of locals to assist the expatriate management in setting up its operations in Vietnam, and considers the reliability of its staff, who have extensive contacts and knowledge of the local market, to be the key to its success.

Population:

Area: Total: 329,560 sq km Land: 325,360 sq km Water: 4,200 sq km

GDP (PPP): $2,600 (2007 est.) 86,116,560 (July 2008 est.)

Ethnic groups: Kinh (Viet) 86.2%, Tay 1.9%, Thai 1.7%, Muong 1.5%, Khome 1.4%, Hoa 1.1%, Nun 1.1%, Hmong 1%, others 4.1% (1999 census)

Religions:

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Buddhist 9.3%, Catholic Hoa???????????????????????????? Hao 1.5%, Cao Dai 1.1%, Protestant Pull6.7%, quote 0.5%, Muslim 0.1%, none 80.8% (1999 census)

Currency:

??????????????????? Climate (taken from????? http://www.wordtravels.com/Travelguide/ dong (VND)

Countries/Vietnam/Climate)

The climate varies greatly from north to south. The north has a cool and dry season from November to April and a hot rainy season from May to October. The central coast north of Nha Trang has a similar climate with the winter monsoon bringing cool, wet weather between December and February. The Pull quote ???????????????????????????? south is hot and humid all year round, especially from February to May. The rainy season lasts from May to November. The central highlands have a similar climate to the south, but it is cooler and temperatures ?????????????????????????????????????? can be freezing in winter. The official peak season in Vietnam is from September to April.

“

??????????????????? Hanoi has a humid tropical climate, characterised by monsoons, like most of northern Vietnam. Summers, between May and September, are very hot with plenty of rain, while winters, from November ????? to March, are cold and relatively dry. During the transition months of April and October anything is possible, and spring often brings light rain. The hottest month of the year is June. January is the coolest month, usually beset with a cold north-easterly wind.

“

Ho Chi Minh City is in the tropics, and very close to the sea, so its climate is steadily warm to hot all year round. Temperatures are slightly cooler between December and April, which is also the dry season. Rains begin in May and become heavy from June to August, but the showers are sudden and short, with the sun usually reappearing fairly quickly. There is a danger of typhoons from July to November.

“Pull quote ????????????????????????????

Useful addresses:

UK Trade & Investment Enquiry Service ?????????????????????????????????????? UK Trade & Investment Enquiry Service ??????????????????? Tay House 300 Bath Street ????? Glasgow G2 4DX T: 020 7215 8000

“

“There are barriers and hurdles for all markets, but they can usually be overcome,” says Lally. “At UK Trade & Investment, we advise companies to take advantage of the services that we have to offer. Our people know the market and our sole aim is to help British companies to succeed. It can be a hugely expensive mistake for a British company to go to a new market without doing research.”

Vietnamese (official), English (increasingly favoured as a second language), some French, Chinese, and Khmer; mountain area languages (Mon-Khmer and Malayo-Polynesian)

“

Despite the recent economic downturn and the many challenges to investing in Vietnam, foreign companies are hopeful that the future will bring continued success. The country must tackle a number of issues if it is to remain competitive and an attractive investment destination: infrastructure improvement – ports in particular, professional education and training and rising inflation. But fulfilling Vietnam’s World Trade Organisation commitments will drive many of these issues forward.

Languages:

Embassy of the Socialist Republic of Vietnam 12-14 Victoria Road London W8 5RD

Have your your say say at atwww.themanufacturer.com www.themanufacturer.com

Development A

diary of product development

Evora

journey The

As we break down our stand at the Paris Motorshow, we are reflecting on the third full public outing of the Evora show car. The Paris show is one of this year’s most important motorshows and is hosted in the centre of Paris at Porte de Versailles.

This year

1,432,972 people visited the motorshow (three times as many as visited the British Motorshow back in July) so the number of people who have now seen the all new Lotus Evora has increased dramatically! How was the Evora received? Very well – the public and many journalists told us that it was one of the most beautiful cars at the show and the crowds around the stand seemed to support that sentiment.

bond the body sides and roof to the chassis within tight tolerances. It also positions and aligns the doors precisely to enable the production team to achieve its dimensionally critical quality standard. Line side, the new modular lean racking system (for supporting kanban) is proving its value. This highly flexible system not only presents components in an optimum and ergonomically friendly state, but team leaders and team members are also using it to create ‘tailor made’ sub assembly benches, parts trolleys and visual control stands to support effective and efficient workplace organisation. Another feature of the production system at Lotus is our visual management tracking system. This is already in place and is used to track progress of the Evora VP build. It is essential that we record all build issues and identify opportunities to improve the manufacturing process. These issues are under constant review and are communicated for actioning.

Meanwhile back at the Hethel plant…

After 18 months of design and engineering development, we are in the exciting last few months of delivering Evora to the market. Last month we described how we were readying ourselves for the start of the VP (verifying prototype) build phase of the car. This month, the first VP cars have been loaded on schedule and already, three cars are progressing down Evora’s dedicated production line. VP involves manufacturing and engineering working together to prove out production intent parts, processes, equipment and tooling. The total VP build will include 32 vehicles comprising of fully completed vehicles, a number of crash test cars and also some ‘development bucks’ which will be used to supporting the EP (engineering prototype) cars in final development and type approval of the car. Setting up the production system for Evora is going well. The main bonding fixture has been delivered and current activity is focused on constructing and calibrating this critically important tool. The fixture is used to position and

Away from the Evora assembly lines, the ‘soft trim’ development team is hard at work finalising the car’s interior trim patterns. Lotus will manufacture a large number of Evora trim components on site at Hethel. We have invested in ‘state of the art’ laser-cutting facilities, which exactly replicate sophisticated CAD designs. All leather for the Evora seats will be cut and trimmed in this way – the technology allows for the most costeffective arrangement of pattern shapes to be cut while simultaneously minimising ‘off-cut’ waste from each leather hide. It also searches out any natural flaws in the leather before processing. Overall, we are on target and setting a new benchmark for the time taken from drawing board to production. Being fast to market does have its frustrations, particularly when running a tight programme with very short supplier lead times. Despite the current economic situation, all at Lotus remain enthusiastic about Evora. It is our first new vehicle platform in 13 years and we are extremely proud of it. Its creation is a credit to our designers, engineers and the whole manufacturing team. Next month the diary will cover the EP phase of the US Federal Evora to be built alongside the VP build! The Evora Diary is written by Paul Culley and edited by John Vigar of Lotus Cars.

Takeover y r dia

a diary of a

takeover Kanban Sheet Metal… the next stage

Last month we set out manufacturing improvements at the re-launched Wigan manufacturing firm Kanban Sheet Metal. Here, owners Paul Bell and Mark Blayney describe efforts to take advantage of increased capacity The new cellular manufacturing operation is now in place at Kanban Sheet Metal. The manufacturing team were able to design and manufacture the welding and linishing booths themselves. These have conveyor feeds to facilitate single piece flow. The quality is so good that the company has added these designs to its product range!

needs, then establishing a very focused process to make a relatively small number of potential customers aware of how the company could add benefits and value to their businesses. This customer-focused approach is the opposite of the traditional mail-shot approach, and is expected to give a much higher response rate.

As a result of the changes, lead times have been reduced from three weeks to one and capacity has increased, so that the company could double throughput if required.

To provide the resource to operate the process, sales manager Paul Daniels has recruited two experienced sales engineers, David Hutchinson and Jamie Robinson. Will the new sales process generate enough enquiries to keep them both busy? We will find out next month…

This has demonstrated to what extent customer demand is now the bottleneck, and has focused our minds on the marketing and sales process. Having top quality and short lead times is all very well, but it does not bring customers beating a path to your door. We are great believers in bringing in outside help whenever necessary, and so engaged a sales consultant, Michael Barker, to energise the sales process. Michael started his career in manufacturing, and subsequently had a 16-year career as a senior business coach with one of the world’s leading training companies before leaving to head the Performance Development Group. He explained that marketing and sales were processes, just like any other business processes, and so deserved to be optimised. He is encouraging Kanban Sheet Metal to use a similar process to lean, starting with understanding customer

Paul Bell is a Cambridge and Cranfield graduate and manufacturing improvement consultant. He founded Manufacturing Excellence, the north’s leading specialist in lean and agile manufacturing consultancy and training. Email: Paul.bell@manufacturingexcellence.co.uk Tel: 01748 831908 Mark Blayney is a chartered accountant, MBA, member of the Institute For Turnaround and MD of Turnaroundhelp, a consultancy specialising in crisis financial management and the mentoring of ownermanaged businesses in recovery, as well finance raising. Email: help@turnaroundhelp.co.uk Tel: 01434 345528

Kanban Supplies, a sister company of Kanban Sheet Metal that was established in 2007, was shortlisted in the Best SME category in October’s Manufacturer 2008 Awards.

Manufacturinginaction Putting UK manufacturers under the spotlight “Everyone involved in this business at every level feels extremely proud of our achievements at the 2008 Manufacturer Awards. Our success comes as recognition of a massive team effort”

Willerby Holiday Homes Factory of the month

“The fact that our Carbon Trust audit shows we are 50 per cent more efficient than the average cast iron foundry is testament to the initiatives we’ve put in place thus far”

Precision Disc Castings Automotive

“The global market for whisky seems to be quite insatiable at the moment, especially for the sort of things we do – very bespoke and high end”

Presentation Products Packaging

Investment in R&D and advanced manufacturing systems allows Quinn Radiators to constantly upgrade and develop new generations of market-leading radiators

Quinn Radiators Heating equipment

“We’re just in the process of bringing back our sourcing of castings from eastern Europe to casting companies in the UK, because they’re competitive once again and the quality is better”

105

IMC

Catering equipment “We are constantly reviewing the profile of the product range through replacing outdated valve technology with new products to better support our customers’ requirements”

113

Broady Flow Control Valves

leap A quantum

From a cottage industry heritage, Willerby Holiday Homes has emerged as the winner of the 2008 Manufacturer of the Year Award and has also taken the Manufacturing Operations Award. Colin Jeffrey, production director, and his team talk to Jayne Flannery about this quantum leap forward

Factory of the month Willerby Holiday Homes

Colin Jeffrey, production director of Willerby

Holiday Homes, has good reason to feel in a celebratory mood. But he is keen to observe that he is not celebrating alone. “Everyone involved in this business at every level feels extremely proud of our achievements at the 2008 Manufacturer Awards. Our success comes as recognition of a massive team effort. We could never have made this huge leap forward if implementing change had rested in the hands of a small elite,” he stated. Now, the company finds itself on the national stage as an example by which others can benchmark and improve their own activities. “It is one thing to recognise internally the progress that we have made. That is immediately apparent in our bottom line, but recognition from industrial experts and our peers is even more encouraging,” he added. Willerby Holiday Homes (WHH) is the UK market leader in the construction of holiday homes, supplying around 30 per cent of the domestic leisure market’s requirements and exporting 10 per cent of output to Europe. Since 1985, the company has occupied a site stretching across 77 acres on the eastern side of Hull, although it was founded in the holiday euphoria of the immediate post-war years.

“

Everyone involved in this business at every level feels extremely proud of our achievements at the 2008 Manufacturer Awards. Our success comes as recognition of a massive team effort

“

What makes the achievement of WHH so outstanding is the fact that prior to 2001, the manufacturing philosophy in place had barely evolved since it began trading. Manufacturing at that time was centred on piece-work and bonus payments – a sure guarantee of quality defects and poor industrial relations according to Jeffrey – and large batch runs which gave manufacturing operations all the agility of a lumbering dinosaur. There were endless queues and bottlenecks at each process stop. Moreover, this volume orientation demanded massive inventory holdings against a backdrop of spiraling material prices, particularly aluminium. To the company’s new owners it was self-evident that this was not the way to sustain a competitive enterprise. Jeffrey believes that the holiday home industry in general remains backward and inward looking. But the WHH management were determined to seize the moment. They set out to implement a radical new vision for the company – literally breaking the mould and tearing up the time-honoured values and beliefs that were the bedrock of corporate culture at the site. “From the outset, we were very clear about what we wanted to achieve across all areas of the business,” he stated. Clarifying the company’s mission statement was a vital starting point. WHH determined to be the best and most successful caravan and holiday home manufacturer, setting standards and values that would inspire respect and trust. The company aimed to be the first choice of customers by delivering superior service and excellent products.

Henry Halstead’s single-link supply chain boosts business for Willerby COMPONENT supply and management specialist Henry Halstead continues to play a pivotal role in the success story of Manufacturer of the Year 2008 Willerby Holiday Homes. Static caravan maker Willerby transformed its operations to become a world class lean manufacturer after developing a strategic partnership with Henry Halstead.

Mr Dennett added: “When we turned away from traditional sourcing to a long-term relationship with Henry Halstead they became an integral part of our development team and contribute significantly to our success going forward.” Employing more than 60 staff at facilities in Preston and Sunderland,

The Henry Halstead Kanban system is a key factor for lean, continious production

The Henry Halstead Kanban service is a shining example of Inventory Management at its best

This involves the Preston and Sunderland-based company using digitally managed Kanban stations to distribute some 20 million small components and consumables annually, direct to Willerby assembly points in its manufacturing facility.

Henry Halstead also has an onsite ‘envoy’ based permanently at Willerby’s headquarters to ensure a smooth running supply chain.

The relationship began in 2003 when Hull-based Willerby reduced its supply chain from 18 suppliers to just one – Henry Halstead. “The importance of the Kanban system is that it creates a single, constant flow of stock that allows us to use components at precisely the time we need them,” said Willerby purchasing manager William Dennett. “This means we never have to order stock, carry obsolete stock, or become involved in quality issues, all of which are managed by Henry Halstead. “Our production methods are fast-moving and flexible so our supply chain has to be equally dynamic and responsive. Henry Halstead is a great example of these qualities. “They deliver a simple, visible system that is self-managing and requires only one consolidated invoice, compared to 500 per month that we used to get before we went down the lean manufacturing route. As a result, there are considerable operational savings – much less opportunity for running out of stock, much less paperwork, and much less administrative time.”

“The manufacturing industry has changed enormously over the past 20 years,” says Henry Halstead’s Sunderland general manager, Gary Russell. “We help leading UK companies with their lean initiatives by supplying a logistics system that ensures parts and materials are in the right place at the right time. This is totally demand-driven and our customers have no involvement in the supply chain, other than consumption.

“They deliver a simple, visible system that is self-managing and requires only one consolidated invoice” “We are always looking to reduce our own supply base and recently put all Willerby’s furniture fittings into the Kanban system without any price increase. We are also looking at the possibility of bringing in a supplier in the Far East to drive down our costs still further,” added Mr Russell.

492 Holly Place, Walton Summit Centre Bamber Bridge, Preston Lancashire PR5 8AX Tel: 01772 339521 Fax: 01772 332233 E-mail: sales@henry-halstead.co.uk

2 Brooklands Way Boldon Business Park, Boldon Tyne & Wear NE35 9LZ Tel: 0191 5195 600 Fax: 0191 5195 615 E-mail: sales@henry-halstead.co.uk

Factory of the month Willerby Holiday Homes

“We were not interested in creating internal islands of excellence,” he continued. “We wanted to improve all areas of the business simultaneously, although manufacturing is obviously the easiest option because there are practical and physical changes you can implement immediately. However, we were determined not to exclude any part of the business from the process of change.”

Collaborative approach

Integrating the various elements of the business meant ripping out the old departmental structure, with its invisible, but still tangible barriers. It also meant revolutionising the way people related to each other. “We had to get people talking and communicating openly on a face-to-face basis. This has meant a complete shift away from the old dictatorial style and relating to our people on the shopfloor through third parties or written communications. We wanted to develop trust and respect and that has meant talking openly and honestly to people through new forums that we have created at many levels. We share the good news and the bad and everyone understands our successes and limitations. For example, we had to make redundancies in 2005, but we were able to explain that it was a market-driven decision. People were much more understanding because we communicated the news and the reason directly.” The distant, autocratic management style of 2001 was replaced by a new emphasis on collaborative effort, supported

by a flat, open structure and a visible and transparent management style. Manufacturing operations within WHH are labour intensive and not generally compatible with automation. To better support workers on the shopfloor, distinct value streams were created in 2005 to support the assembly lines, each with its own management team. The new vision for manufacturing centred on right first time in a non piecework environment using a lean manufacturing philosophy. The difficulty at the outset though was that the company as a whole had an extremely limited knowledge base. Ian Shufflebotham, general manager, was tasked with training the entire workforce in the lean way of thinking as a pre-requisite to a dramatic culture change. Developing effective communication across the business was critical because of the low knowledge base throughout in relation to lean manufacturing tools and techniques. The company has around 600 employees and all had to be trained in the lean philosophy if they were going to be able to work together in a common language.

Complete package Nobleoak limited and Aqua-therm (Hull) limited are divisions of the Walker Group of companies. Based in Kingston-upon-Hull we are proud suppliers to Willerby Holiday Homes.

ince the establishment of Nobleoak and Aqua-therm (Hull) we have become a key supplier to Willerby Holiday Homes in providing and installing high quality plumbing and heating supplies in line with their production requirements. Working alongside Willerby Holiday Homes we provide a comprehensive service which includes installation, testing, full aftersale resources and product development in line with Willerbyâ&#x20AC;&#x2122;s in house design and development department.

Our Douglas James division is proud to supply seamless leak-free shower pods to Willerby Holiday Homes. Douglas James is the only manufacturer to produce a seamless shower pod system designed for the holiday and home market, British made and complete with a 25 year leak-free guarantee. Our pre-plumbed shower pods enable installers to fit a shower to your bathrooms with the minimum amount of disturbance while insuring the installation will never leak. We also supply Willerby

Holiday Homes with our Wellness shower pods, adding a luxury steam room to your bathroom at a touch. Further details can be obtained from our website, see address in advert above.

Published in association with: WALKER GROUP Tel: 01482 586812 Fax: 01482 590732

Factory of the month Willerby Holiday Homes

Changing peoples’ views was, he admitted, the most difficult task of all. “Our staff on the shopfloor were more open and receptive to change than our old style dictatorial management team, but we were able to win most over in the end,” he commented. At the outset of the transformation, culture change on the shopfloor was driven by the adoption of 5S and kaizen. “This

“

We had to get people talking and communicating openly on a faceto-face basis. This has meant a complete shift away from the old dictatorial style was one of our first initiatives and both approaches require intensive team work and, if implemented properly, emphasise group not individual endeavour and success. 5S and kaizen are inclusive by nature,” he added.

Factory of the month Willerby Holiday Homes

Widney Leisure Difficult times demand innovation; in products, processes and approach. Product cost is an easy target, unless it has already been value engineered to a minimum cost. Process cost can require considerably more initial application of resources by supplier and customer to achieve the desired outcome. Nevertheless, by approaching and assessing the overall process, longterm cost savings can be made. Widney has adopted this approach to the benefit of all our customers.

The management team members are now all expert lean practitioners and there is a preference for training to be carried out internally whenever possible. “It means much more if you have to live with the results of the learning you impart,” said Jeffrey. “We will always seek out external help if we don’t have the necessary expertise in-house, but because our own staff have to live with the changes there is a higher level of respect and a deeper level of understanding. However, we are now moving into business management training to widen horizons and, in this instance, we have to look outside our own organisation for help.”

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Reducing batch size means that we have dramatically reduced our inventory holdings, while reducing work in progress has enabled us to release working capital

From volume to value

Key to the drive to achieve world class status was a complete re-orientation of the approach to manufacturing and a shift away from large, varying batch sizes of between 40 and 100. The old system of mass production, still a feature of the main holiday home industry, was first to go. Batch sizes have been progressively and dramatically reduced. The size of the average batch is now down to 10 – a fraction of what it was originally. “We are not just an assembly operation,” explained Jeffrey. “Because WHH also

“

WHH actively sought to retain as many original staff as possible. It was acknowledged that the lack of lean understanding within the organisation was not the fault of individual managers, but lay with the company that should have been supporting their development. Several hundred thousand pounds has since been spent on training people at every level so that they can contribute more effectively to the company’s growth.

Bayram Timber Timber kit supply is a groundbreaking initiative developed by Bayram in partnership with WHH. Over the last six years Bayram has invested in the concept of kit supply in order to flex with customer demand cycles. This concept is gaining momentum within the leisure homes industry as focus turns to assembly and reduced stock, bringing efficiencies and total cost savings.

Design and delivery Bankside Patterson is the market leading manufacturer and supplier of chassis and modular steel frames to the holiday home, leisure and modular building industries.

ith a 40 year pedigree based on reliability, dependability and innovation, the 120 worker strong company has experienced dramatic growth in recent years and now operates from a 12 acre factory complex in East Yorkshire. Turnover has increased in the past year from ÂŁ8 million to ÂŁ17 million and further growth is anticipated. Manufacturing at Bankside Patterson takes place on a large scale. The company produces around 100 modular building frames and 300 chassis per week with these ranging from four to 17 metres in length and we feel have built an excellent reputation for delivering high

quality, engineered solutions working in partnership with our customers. The company has continually invested heavily in new machinery that includes state-of-the-art spray shop that meets the new legislation, linear welder, CNC machinery and a 6M press the only kind in mainland UK. This investment along with the technical expertise enables our clients an unrivalled facility to provide a high quality product while allowing flexibility in design. The company is registered under ISO9001:2000 and holds membership of the National Caravan council NCC and associate membership of the Modular Portable Building Association MPBA.

Bankside Patterson is constantly looking to develop and refine its range of chassis and building frames to allow maximum flexibility in design and construction to meet customersâ&#x20AC;&#x2122; needs.

Published in association with: BANKSIDE PATTERSON Tel: 01964 545454 Fax: 01964 545459 Email: ntaylor@bankside-patterson.co.uk www.banksidepatterson.co.uk

Factory of the month Willerby Holiday Homes

processes raw materials, large batch sizes meant large queues at every process. Reducing batch size means that we have dramatically reduced our inventory holdings, while reducing work in progress has enabled us to release working capital. We can now physically see the flow through the factory and this greater visibility has highlighted other areas where improvements can be made. Reducing batch sizes also means that our operations require less physical space, which has freed up large areas of the site for other value-added activities.” Another benefit of the shift away from volume production is that the variety of models – 27 in total – coming off the assembly line is far more diverse, supporting a much sharper response to customers. Previously, trade customers were compelled to hold stock because of the long wait while large batches were put through. Slashed lead times mean that is no longer necessary. The latter addition of careful kanban control, which now lies at the heart of the manufacturing operation, has seen lead times reduced to just five days, whereas

Process Plastics In 2009 Process Plastics ltd will have been trading for 20 years. Initially concentrating on the manufacture of thermoforming products for the conservatory sector, the company expanded into a variety of markets and now caters for injection moulding, sheet extrusion and internal door and panel lamination. Bespoke product packages are offered, involving procurement of design and manufacture including facilities for assembly and added value operations.

Factory of the month Willerby Holiday Homes

in 2004 five weeks would have been a typical response time. The value of raw material stocks meanwhile has been reduced by £1.4 million. The shift has inevitably led to radical changes in the way that WHH relates to

its suppliers. Will Dennett, purchasing manager, has no interest in the old way of doing business, which meant securing large volumes at the lowest possible price. When the new approach to manufacture was first mooted, an intensive round of meetings and presentations to suppliers began as a preliminary step to writing supplier agreements tailored to new, more exacting demands. A consolidated base of external A-class suppliers now work closely with WHH on new product design and cost down

“

Delays were causing bottlenecks and impacting on other processes. A combination of VSM and kaizen enabled us to remove the constraint

initiatives. All are actively encouraged to input their own expertise into the design and development of WHH products. “We had to explain very carefully to all our suppliers that our needs were changing and the rationale for the change. They then had to adjust their own processes to accommodate more frequent, but smaller deliveries on a just-in-time basis. Several have since commented that they have in turn become much more flexible themselves which has enabled them to win other business, as well as improving their own internal communications and cutting down on their inventory,” he said. A collaborative, long-term supply partner relationship has evolved with the key A-class suppliers, many of which supply to Willerby on a solus trade arrangement aimed at a solid ‘total cost of acquisition’ approach.

Lean thinking develops

Craig Dunn, lean operations manager, heads a section dedicated to eliminating waste. He has seen the lean initiative progress through several different stages. At the outset, much use was made of 5S and kaizen. Later, value stream mapping (VSM) became the standard tool for waste identification and elimination and has led to the greatest overall gains, giving focus to separate kaizen activities. “VSM has become ever more important and is now

Glen Dimplex Over the last two years Glen Dimplex has become Willerby Holiday Homes’ primary source for kitchen appliances by developing product supplied under its Belling, New World and Lec brands to meet Willerby’s criteria for products that are “easy to handle and install”; “well known”; “reliable” and “delivered on a JIT basis” and to support Willerby’s continuous improvement programme.

Longbones Haulage Longbones Haulage is a small family operated business dating back to 1855. We have specialised in the transport of mobile homes for over 30 years and we are pleased to count Willerby Holiday Homes among our most valuable customers. We can deliver holiday homes and lodges anywhere in the UK and we pride ourselves on the service that we provide.

Making the right match Quality Personnel ltd has offices in Hull and Grimsby covering East Yorkshire and North Lincolnshire. We supply a one-stop recruitment service with individual consultants recruiting within their specialist field.

e build a partnership with the company so that we understand their individual needs. This enables us to accurately match the candidate with the specific needs of the company. Recruitment is a three-way operation, as we have to make sure that both the client and the candidate are happy.

• Quality Personnel runs a rolling recruit to provide a constant stream of candidates.

• Quality Personnel has supplied personnel in various roles on the Willerby Holiday Homes sites in Hull with some being successful in obtaining permanent positions.

• Quality Personnel can provide a constant stream of candidates to fulfil the supply and demand that Willerby requires, ensuring good continuity and reliability.

• Quality Personnel has supplied a wide range of staff including labourers, forklift truck operators, welders, tractor drivers, office, administration and managerial staff.

• We operate on a 24/7 basis.

• Quality Personnel is able to supply staff at short notice. • Quality Personnel has supplied staff on site since 2003, in both commercial and industrial roles.

• We maintain daily contact ensuring our clients’ needs are adhered to.

We are a competitively priced agency, we always strive to place the right person with the required knowledge in clients’ vacancies.

Published in association with: QUALITY PERSONNEL LTD Tel: 01482 211600 Fax: 01482 323665 Email: hull@quality-personnel.com www.quality-personnel.com

Factory of the month Willerby Holiday Homes

the most widely used tool that we employ. It is a fantastic technique which emphasises structure and vision and gives direction to everything that we do,” he said. Multi-skilling has been an essential element of the success of VSM. “VSM works because people can move up and down where the need exists. Whereas before we had invisible barriers between departments and processes, now we have total fluidity,” he added. The adoption of a central planning function using Preactor (APS) to schedule all shopfloor planning brought big initial rewards reducing batch sizes and in turn inventory holdings and work in progress. But as the team’s knowledge of lean thinking developed, its limitations became more apparent and it is no longer used as a finite scheduling tool, but rather to complement VSM. Analysis of flow opportunities using both Preactor and VSM led to a programme of capital investment to re-orientate plant. Now Alphacam and Magicut CAD/CAM systems bring together design and machine and send information directly to operators as and when they need it. Meanwhile a dedicated information centre on the shopfloor supports the kanban system. Dunn believes that improvement has now become organic and self-perpetuating, but believes that there is still scope for further flow improvements by re-positioning resources and machines, irrespective of how seamless the current operation appears. However, the team point out that such is the magnitude of

A culture of continuous improvement Ellbee ltd is a major holiday home and caravan industry player in every way. Manufacturing over 70 per cent of the market’s uPVC and aluminium windows and doors, no wonder the industry sits up and takes note of what happens at Ellbee.

llbee not only supplies the industry with windows and doors, but among its other offerings are tourer and motor home doors, locker doors, awning rails and shower enclosures. Ellbee also operates in the commercial sector serving both the retail and construction industries; forming strategic partnerships with its customers to provide product and service is a core competence of the business. With over 60 years of experience operating from 250,000 square foot of manufacturing floor space and with a 300-strong workforce, Ellbee has continued to grow and develop, gaining the following accreditations along the way:

• BS EN ISO 9001-2000: Quality Management Systems • BS EN ISO 14001 2004: Environmental Management Systems • OHSAS 18001:1999: Occupational Health and Safety Management Systems

In February 2006 Ellbee embarked on its next stage of evolution, with a new senior management team headed by Nigel Smailes, managing director. Ellbee has now completed a strategic review of the business and is setting about a change programme to allow the business to continue to prosper in an increasingly demanding and competitive marketplace.

Included in its continuous improvement programme to keep business practices ‘lean’, Ellbee has implemented the lean six sigma system, which combines tools from both lean manufacturing and six sigma.

Published in association with: ELLBEE LTD Tel: 0113 257 9711 Email: sales@ellbee.co.uk www.ellbee.co.uk

Factory of the month Willerby Holiday Homes

the strides forward that have been made, incremental improvements are becoming smaller and harder to realise. The lean focus at present is on leveraging kaizen at the level of individual processes to seek out gains in efficiency and flexibility. For example, he has recently re-engineered the company’s CNC workstations. “We have completely changed this process to give us greater control and reduce set-up time by 80 per cent. It was particularly important because delays were causing bottlenecks and impacting on other processes. A combination of VSM and kaizen enabled us to remove the constraint,” he said. One of the most gratifying aspects of the overall success of the lean drive is the extent to which it has dovetailed with the company’s desire to reduce its environmental impact. The waste recycling rate currently stands at 81 per cent and is rising all the time. In some areas, the sale of segregated waste has produced a new revenue stream. In other parts of the factory suitable incinerated waste is used to provide heating.

Then there is the investment in energy efficiency schemes such as the Siemens KNX intelligent building management system, which controls heating, lighting, compressed air, extraction, air conditioning and door systems. This new initiative saw a reduction in the gas bill of £22,000 during the first three months after its installation and is expected to lead to many other energy savings. This building energy management system (BEMS) is also making significant inroads in the electricity usage by taking control of all the various factory areas and only switching task lighting on for the exact times required by process and the ambient lighting also by process times but only when the company does not have sufficient current natural ambient daylight. The system relies on extremely accurate digital sensors installed in strategic positions around the factory. Willerby is currently zoning its compressed air system at the main factory, which started as effectively as an enormous ring main that required all systems to be pressurised when any area required air. When split into zones, the BEMS controls the valves based on time and process requirements, thereby again significantly reducing compressor hours (and maintenance) and unnecessary system leakage. The kilowatt hours being saved currently on a daily basis are very significant and are set to increase, again helping the firm to reduce its carbon footprint.

Training for success To support changes to their management systems Hull College Services to Business provided Willerby Holiday Homes with specialised management development training tailored to the needs of the organisation.

ith the experience and expertise of business training professionals at Services to Business, employees at Willerby studied nationally recognised qualifications, which ultimately unlocked the full potential of the organisation. The training provided has brought many benefits, including increased efficiency and less wastage, and a more dedicated workforce with skilled managers, which has led to a reduction in lead times and an increase in units produced per year.

• The average lead time from raw material to finished goods has been reduced from 12 days (2004) to four days (2008) • The number of units that have had to be reworked was 15 per cent in 2004 and in 2008 that figure has been reduced to

two per cent due to the improvement in accuracy of the workforce

The business will continue to develop and harvest the benefits of training and educating their staff in new management practices, equipping their staff with the skills, knowledge and expertise needed to perform their duties to exceptional levels. “To achieve the vision of becoming a world class manufacturer the company embarked upon a significant programme of training for all levels. This training has enabled the company to reorganise its management into a flatter more approachable structure. Procedures have been improved and are now administered consistently,” said Colin Jeffrey, Willerby production director.

“The knowledge and understanding that the training has given was a significant enabler for the reorganisation of operations into a responsive lean production system. Without this training the company vision could not be achieved.”

Published in association with: HULL COLLEGE SERVICES TO BUSINESS Tel: 01482 598855 Email: information@ servicestobusiness.org www.servicetobusiness.org

Factory of the month Willerby Holiday Homes

WHH recognises that its customers are also seeking to reduce their own carbon footprint. All models are developed with optimal thermal and energy efficiency properties throughout their lifetime and stress the use of A rated appliances whenever possible. Chipboard, MDF and timber products are all sourced from FSC accredited suppliers.

“

We firmly believe that this company is now uniquely well-positioned, not only to weather the coming storm, but also to go out and win new business

Meanwhile, the company is keenly aware of the difficult economic environment it must navigate. For individual purchasers, a new holiday home is a luxury product and an abnormally dismal summer has done nothing to ameliorate the impact of the credit crunch. Jeffrey anticipates that retail sales have a difficult year ahead. However, the prospect of recession is a cloud with a distinct silver lining. In future, he believes that many more aspiring second home owners will opt for luxurious ready-to-use holiday accommodation which is within easy driving distance, rather than succumbing to the temptation of less accessible foreign destinations, particularly as transport costs increase and frequent flights for leisure purposes become socially unacceptable. Moreover, hirefleet for holiday and leisure parks, which account for 40 per cent of output, are braced for an influx as the economic downturn bites next year. When family means are stretched, an expensive holiday to Florida or the Caribbean quickly disappears from the wish list and the glories of the British countryside and coastline become more attractive. WHH believes its processes are also highly compatible with the new trend towards lodge-style dwellings in other leisure settings as the holiday industry matures. Then there is the much larger European market for holiday homes which he feels has great latent potential. “We know that we, our suppliers and our customers are in for a difficult time over the coming year, particularly on the retail side of the business. However, we firmly believe that this company is now uniquely well-positioned, not only to weather the coming storm, but also to go out and win new business,” he concluded.

Automotive Precision Disc Castings

Casting success Precision Disc Castings is a manufacturer of high quality bespoke disc brakes for cars and light commercial vehicles. Based in Poole, Dorset, with a 220-strong workforce, it operates its own ferrous foundry, melting 1,500 tonnes of scrap steel per day to make seven million discs a year. Mark Young explores the challenges the firm faces and the solutions that have led to its success The production and supply of automotive parts

is a truly global industry and PDC certainly fits that mould. Eighty-five per cent of its products are exported with prominent destinations for its wares including Germany and Italy. PDC’s market model is the production of bespoke, small batch quantities to high quality and specialist vehicle manufacturers. It provides for rally and touring cars as well as their road cousins. The discs it makes are made of grey cast iron – a composite which alloys its main, named ingredient with carbon and silicon. It runs its melting facilities 24 hours a day for five days a week. Running around the clock makes the plant more efficient as less heat energy is wasted than if the foundry cools down and is reheated. In fact, the firm’s most recent Carbon Trust audit revealed it to be around 50 per cent more efficient than the average ferrous foundry. Senior site manager, Graham Starr, said PDC’s goal is to melt 24/7 to the full capacity of the plant at some point in the near future. With an Environmental Permitting Regulations operating license from the local council the firm employs medium frequency melting furnaces which consume eight mega watts of electricity and are able to melt 14 tonnes of molten iron per hour. Everything is fully extracted through dry filtration meaning minimal waste and by-products occur. The EPR was introduced in April this year to combine the existing Pollution Prevention and Control (PPC) and Waste Management Licensing (WML) regulations.

PDC employs two automatic, Disamatic lines for a fully automated moulding process. These produce green sand moulds – castings for molten metal to be poured into to form the disc brake. The castings are made to customers’ machine drawings and are designed by PDC’s own specialised casting design department. The company’s niche is its expertise in ‘core’ technology – the process of inserting sand into the mould for the metal to flow around and thereby create the gap between the two discs. The economic downturn, which has seen a marked reduction in the levels of new cars being purchased, has had little effect on PDC. This is because as well as supplying discs indirectly to the new production market, half of its focus is on meeting the needs of replacement supply. “Our market share has been stabilised because with the lack of demand for new cars, as only makes sense, there is a heightened requirement for replacement parts on older ones,” said Starr. One contributing factor to the credit crunch has been a problem for PDC though. In the last five years its raw

Recycling for a better future Reliance is pleased to supply Precision Disc Castings with short steel on a daily basis â&#x20AC;&#x201C; on average 600 tonnes per week for some 20 years.

e at Reliance Scrap Metal are traders in ferrous and non-ferrous metals operating in the Poole, Dorset, area since 1953. Recovering, segregating and processing metals firstly in Mannings Heath Parkstone and more recently from a purpose built yard on the Nuffield Industrial Estate, Poole, since 2003. We operate a large fleet of vehicles including skips, roll-on roll-off and articulated lorries to suit your needs. We also provide stillages, bins and drums at NO CHARGE to you for delivery or collection.

We service all your scrap metal needs, predominantly collection and recycling, throughout the southern counties. We are happy to offer advice, guidance and solutions to all your scrap metal and metal by-product enquiries. All our scrap metal is promptly weighed and valued and we offer you the option of cash or cheque in settlement. Self billing is available on request. Our company computer system allows us to update our buying prices on a regular basis in line with market trends. Therefore

giving you, our customer, the best prices. The company prides itself on providing a competitive, friendly and efficient service for all our customersâ&#x20AC;&#x2122; needs.

Published in association with: RELIANCE SCRAP METAL Tel: 01202 673539 Fax: 01202 669509 Email: enquiries@reliancescrapmetal.com www.reliancescrapmetal.com

Automotive Precision Disc Castings

material costs have soared by 500 per cent while in the same period its electricity bills have gone up 300 per cent. And much of those costs have not been experienced to such an effect by some of the company’s European competitors, leaving Starr bemoaning the lack of even trading conditions. “There needs to be a level playing field across Europe for us to compete and of course there isn’t,” he said. “We’ve been to Brussels and lobbied for reform through Euro MPs as well as our local MP and the Cast Metal Federation. We’ve made slow progress so far but we’ll continue to battle.”

International standards are used to maintain efficiency. The company complies with ISO 9001 – the general standard for quality – and ISO IS0/TS16949, which is specific for automotive related products. It also complies with ISO 14001 – the international standard for environmentally friendly performance – and employs a professional engineer, Shaun Lindfield, to pursue excellence in these fields. “Our carbon footprint should be an enticement for our customers to do business with us,” said Starr. “It is a growing concern for people when they look for suppliers though cost is still the main driver.”

In addition, the company is feeling the heat of the extra spending power of some of its foreign competitors owing to the weakened pound. While this circumstance entails favourable market conditions for exporting commodities in product form, it has meant an even bigger increase in input costs for PDC. Starr said companies from emerging metal manufacturing zones like China, India and Turkey have resources to bid inflated prices for steel from scrap yards here in the UK and this is pushing up the prices.

PDC has been running a kaizen continuous improvement programme for seven years. “We will now continue with that,” added Starr. “It’s about step-by-step, minor improvements and a strict energy saving policy. But all-in-all we pride ourselves that we are one of the most efficient plants in the world at melting scrap steel for iron castings and it’s those innovative, world class melting techniques to thank for that achievement.”

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Modern apprenticeships are ideal for us because we can teach people our way and these schemes should be encouraged with a major drive

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So under such testing conditions the efficiency measures PDC has introduced have become invaluable, and the company recognises the need for continuous improvement. To this end it has recently created a new position and employed a six sigma and lean manufacturing black-belt as a process improvement manager. It’s his job to drive quality and efficiency throughout the plant. Heightened product output will be the quantifiable indicator of the success of the resultant initiatives introduced. In addition the firm is in the process of entering into a Knowledge Transfer Partnership (KTP) with Bournemouth University to further complement its ability to improve. “The fact that our Carbon Trust audit shows we are 50 per cent more efficient than the average cast iron foundry is testament to the initiatives we’ve put in place thus far but it also means it’s now difficult for us to improve further. But we will because we know we have to,” said Starr.

Linked with a training provider called Paragon ITE, PDC trains new staff through advanced modern apprenticeships to NVQ level three and provides full academic qualifications from BTEC National through to degree level. A membership with the Cast Metal Federation and the Institute of Cast Metal Engineers allows for further bespoke training. Finding those members of staff is more of an issue than training them though. “The skills shortage is there and we have great difficulty employing skilled and talented electro mechanical process technicians,” said Starr. “Modern apprenticeships are ideal for us because we can teach them our way and these schemes should be encouraged with a major drive,” he added. Overall PDC provides a model example of the fact that, in these challenging times for all businesses, efficiency drives, a strong product and a sound strategy can allow you to flourish in the face of adversity. For this company, breaking the mould has been about strengthening it. And while it continues to do so there will be no putting the brakes on PDC.

finer The

t h i n g s Attention to detail has taken Presentation Products far, securing several blue chip customers along the way. Louise Hoffman speaks with production manager Rory Banks Presentation Products began life

in 1964 as a box maker, and indeed this continues to be one of its main competencies, as production manager Rory Banks explained: “As a box maker we specialise in rigid boxes, mainly for the whisky industry. We’ve probably dealt with every single distiller in Scotland over the past 40-odd years!”

The other side of Presentation Products’ business is equally, and impressively, high end. “Here we are dedicated to fulfilling retail contracts – particularly concentrating on gifts. Our main customer is Marks & Spencer, but in the past we have done gift ranges for John Lewis, Harrods, Fortnum & Mason – these kinds of blue chip companies,” Banks explicated.

In its box-making capacity, the firm accommodates both small run and bulk batches for small and large companies respectively. At the top end, Presentation Products is supplying such big players as Diageo and Edrington, producing boxes for Johnnie Walker Blue Label, Macallan Brand and many more.

Indeed, the firm lays claim to be the mastermind behind the so-called ‘composite gift’, which began to spring up on department store shelves 18 years ago. You know, the attractively boxed combinations of alcohol and chocolate or selection of condiments that have become the answer to all our Christmas shopping nightmare prayers? “It seems like an obvious thing to do because there is so much of it out there on the high street now, but at the time it was a first, and we have developed it from quite a small thing into something really rather large,” Banks added.

“That side of the business is really ongoing,” said Banks, “and it is one area that we are seeing an increase in demand because the global market for whisky seems to be quite insatiable at the moment, especially for the sort of things we do – very bespoke and high end. And it’s all for export – the type of thing you see in duty free at airports.”

“Everything we do for Marks & Spencer is completely bespoke,” he continued. “We’ve got a team of product developers here who come up with the ideas. It’s all done from scratch, especially in conjunction with our sister company called Farfalla, which is based in Hong Kong and acts both as a trading company and deals with gift development. They have a really large QC team and they’ve got account managers there who work very closely with our product developers to come up with ideas.

Packaging Presentation Products

And the expansion continues. Only recently, Presentation Products opened a southern office in Hemel Hempstead to help grow the stationery business. “Our sister company Farfalla supplies stationery all over the world, particularly licensed stationery, and this is another area we want to grow; back-to-school product, rulers, exercise books, that type of thing,” said Banks.

“The way we work with M&S is we provide a one stop shop. We come up with a product range, develop that with them, and we then procure all the various items, bring those across to our site in Arbroath where we have a packing operation in house as well – there’s no subcontracting – so we have a good level of control.

“

The global market for whisky seems to be quite insatiable at the moment, especially for the sort of things we do – very bespoke and high end

“We’re trying to target more of the high street for gifting as well. It’s all doom and gloom in the papers at the moment, and we’ve obviously got to see what happens this Christmas, but I still think there is a market for gifts, particularly within the UK – people are always going to be looking for things for Christmas. “Every year seems to bring new challenges, but we feel we’re well equipped to face them head on,” he concluded. And with quality and service on its side, Presentation Products certainly is a force to be reckoned with.

“The attention to detail is incredible. Every single gift has to look exactly the same so it looks the same on the shelf. There are very high QC standards because it is a gift and someone is buying that to give to someone else,” he pointed out. Three years ago, with the rapidly growing Marks & Spencer contract, Presentation Products found itself increasingly pushed for space at its central Arbroath factory. Little development of the listed buildings could be made, and the residential estate location with its narrow roads meant lorry access was restricted, and vehicle queuing impossible. “So we moved to an empty factory on the outskirts of Arbroath, just beside the dual carriageway that gets us onto the road to Dundee,” began Banks. “It was an old canning factory and was basically just a big empty space, so it was like a blank canvas – we could put our machinery into a more logical location to help the flow of things through the factory. We also extended the warehousing facility so we now have enough room for over 4,000 pallets in there. “The move has helped massively. There is a lot of product that goes through here from the end of August to maybe the first week in December – quite a short space of time – and you can run the risk of having bottlenecks if you don’t have the space at either end.”

Heating equipment Quinn Radiators

Qual i ty service and

The Quinn Group philosophy has always been to invest up front in the latest state-of-the-art technology in order to achieve world class standards in its manufacturing sites. Through its people it has ensured that this technology is leveraged to provide customers with the highest quality products and best service in the most efficient way possible

Quinn Group acquired Barlo, a

large radiator and plastics manufacturer, in 2004 and since then has invested heavily in the businesses to modernise all aspects of the production process. Regarding the radiator business, it has consolidated four older manufacturing plants into one brand new purpose built facility at Newport in south Wales. This facility at Newport is 1.2 million square feet in size, around the equivalent

Staying competitive Alnapress produces metal parts by means of stamping and pressing. We have a large number of presses available, ranging from 20 tonnes up to 3,000 tonnes, in order to guarantee flexibility, quality and competitive prices. Deep draw applications are possible on our 2,000 tonne hydraulic press with a table of 3,200 millimetres by 2,500 millimetres.

tarting from a drawing of a part, a die is designed and built for batch production. The produced parts are exactly according to the drawings and specifications. We specialise in JIT deliveries and we can handle all kinds of materials and thicknesses up to eight millimetres. Our quality system guarantees that orders are treated efficiently from order entry till shipment to our customers. Currently a new factory is being finished in order to bring our service to

a higher level. The layout of this highly automated factory is designed according to the lean manufacturing principles to eliminate waste and unnecessary handlings of the product as much as possible. This new factory will be operational beginning of 2009. We believe that investing in extra capacity and training and education for our employees are the building blocks of our company and that this will strengthen our future.

Published in association with: ALNAPRESS Tel: +32 (0)51 408091 Fax: +32 (0)51 408491 Email: info@alnapress.be www.alnapress.be

Heating equipment Quinn Radiators

The fully automated manufacturing process

of 15 full-size football pitches. The plant employs 360 people and, though parts are still being commissioned, most of it is now functional. The manufacturing process is fully automated right through each stage from pressing, production, testing, painting, packaging, warehousing, picking and dispatch. When fully operational, this ÂŁ130 million investment will represent the most modern and efficient radiator plant in the world, with an expected output capacity of four million panel radiators and 250,000 design radiators a year.

15 full-size football pitches

It was decided at the very early stages of the planning process that the only way to make this investment work in the UK was to design a plant that would offer operational efficiencies not previously seen in the industry. The only way to compete with imports from countries with much cheaper labour costs was to have an operation which was fully automated throughout, thus minimising labour costs and offering a consistently high level of quality. Aligned to this is the ability to offer customer service which is second to none.

â&#x20AC;&#x153;

The main panel radiator production process is split into two lines, each capable of producing 12 linear metres of radiator panels per minute, irrespective of height. Coils of panel steel are received from steel suppliers at weights of up to 25 tonnes. All handling equipment on site has been designed to facilitate these huge weights. These coils are fed through the latest high speed presses which press 14 metres of flat panel steel per minute on steel widths from 600 mm to 1,800 mm at a class leading 25 mm pitch. Each press offers a press force of 1,500 metric tonnes and all are installed with the latest high speed die changing carts for efficient changeovers. A press height changeover can be completed in 10 minutes. No steel is lost in the pressing process due to This facility at Newport is 1.2 million square the forces applied and, in particular, the hold feet in size, around the equivalent of forces in the infeed area. The pressed panels are then processed through the production line in trains of up to four metres in length. They go through a process of punching and folding and support space insertion before going through the multi spot welding process. At the same time as these panels are being processed through the line, the convection fins are pressed on two Winter fin presses which mould the fins at a rate of 80 strokes per minute. These fins are pressed from coils up to 900 mm wide and cut to width as they are fed out of the machine. The finished fins are automatically fed by the conveyor onto the back of the radiator where they are pre-tacked and multi-spotted yet again. The trains of panels then travel through the remainder of the welding process to the point where they are cut by guillotine to the required length and have their corners robotically welded. The panels are then automatically processed into radiators which cover a huge spectrum of variations including singles,

A job well done Our work with Quinn Radiators began three years ago. It was a matter of realising a series of lines for the production of radiators which had a level of technology and productivity higher than those present today in the market

challenge, and one of those challenges which we like. For technicians who can boast of more than 30 years of experience in automation and welding, innovation is like water for fishes. Mr Quinn was clear with us: “I want the peak of productivity, efficiency and automation.” I remember the meetings made to study the right solution. Everyone around a table: designers, mechanics, electricians, plc programmers. At Leas the best ideas have always arisen from the combination of different experiences.

We spent some sleepless nights because there is always a price to pay for the commitment and the passion but we are proud of the result. Now we are expecting other challenges. Other customers who wish to make real a need: they want us to realise for them plants where, beginning from a sheet or a steel tube, a product is made, using an efficient process. This is our job. We have been doing this for 35 years as regards the heating, the white goods and the automotive sectors.

We are expecting other sleepless nights to come, but what would life be without a bit of salt?

Published in association with: LEAS – ELFIN SALDATURE Tel: 049 88.43.330 Fax: 049 88.43.326 www.leas.it www.elfin-leas.it

Heating equipment Quinn Radiators

doubles and triples, with either two, four or six (ventilles – mainly used in the European market) connections. The finished ‘black’radiator is then tested underwater at 13 bar pressure in automated test tanks. Testing at such high pressure is only possible due to the 25 mm panel configuration and the increased number of multi spot welds on each panel. Tested radiators are automatically plugged and stacked and sent by monorail to a buffer area prior to painting. Radiators are then destacked and loaded onto one of three conveyors for painting. Each radiator goes through an intensive five stage pre treatment cleaning process to remove any grime and then gets dipped in one of three 50,000 litre paint baths where paint is applied electrophoretically to each radiator. This process ensures good paint coverage inside the finned area of the radiator and protects against rust. At the final stage of the paint process, radiators can be sent to any one of five paint booths for powder coating. After curing in the oven, each radiator is individually inspected for quality of product and finish. A vision system detects the length, type and height of each product and applies a barcode to the back of each radiator. This barcode identifies the product through the automated packaging and palletising process. Each radiator is wrapped in picture frame wrapping with U wrap along the top and bottom and box ends formed from rolls rather than traditional pre forms. Component kits are selected and inserted by robot.

Storage and dispatch

Radiators are then stacked and palletised according to SKU and sent to the automated warehouse for storage. Storage and picking of radiators is traditionally a very manual operation. It also requires a lot of warehouse storage space. As a result, manufacturers are increasingly faced with rising labour costs and health and safety directives. In light of this, Quinn Radiators decided that the manual handling part of the operation also needed to become automated. Consequently, a highly automated storage and order picking operation was incorporated within the construction of the Newport site. The facility supplies to both large high volume distributors and smaller businesses. The ability to pick and dispatch multi SKU pallets in an efficient and low cost manner was vital to the project’s success. The project to automate the storage, picking and dispatch of these multi SKU pallets was extremely challenging in terms of technical scope, efficiency gains and product design. The Quinn Radiators team worked closely together with their suppliers to ensure the on-time delivery of this project. This has resulted in the project being finished within all the parameters set and has already achieved increased efficiencies, productivity and a reduction of costs. The production pallets are all transported from production on a four strand chain conveyor, a monorail system and then stored double deep within a 40 metre tall high-bay warehouse using automated cranes having telescopic forks with fork spread adjustment. Each rack has five top hats per double pallet bay permitting a high variability in sizes and combinations to be accommodated within the warehouse. Immediately adjacent to the high bay is the robot pick area where customer orders are automatically picked and assembled on dispatch pallets. The pick area is automatically replenished from the high bay area.

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When fully operational, this £130 million investment will represent the most modern and efficient radiator plant in the world, with an expected output capacity of four million panel radiators and 250,000 design radiators a year Each of the three robots pick to order pallets at a rate of 120 picks (or radiators) per hour. On average there are 16 radiators per picked pallet.

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Radiators with an overall length of greater than 1,600 mm, and therefore outside the automated picking parameters, are handled manually. Order pallets can transfer using the automated MHE between the robot cells and the manual pick area. Completed pallets are then transported via monorail to the dispatch area for strapping and labelling before being consolidated on dispatch lanes ready for loading onto lorries. The monorail provides a gentle handling high speed distribution system linking the various areas of the order fulfilment areas, the high bay, production and dispatch.

Engineering support Opticast ltd, being a Lloyds registered quality assured company, has the experience and expertise to be fully involved in the design and development of metal products for Quinn Radiators

e have been able to offer support through our design and development team and tooling engineers to ensure that the high standard of component that Quinn Radiators requires is achieved. The help and support from Quinnâ&#x20AC;&#x2122;s purchasing department has proved to be invaluable in helping us to meet these high standards. Opticast wishes Quinn Group every success for the future.

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Published in association with: OPTICAST LTD Tel: 01543 453884 Fax: 01543 453880 Email: mail@opticastuk.com

Heating equipment Quinn Radiators

Quinn Radiators was recently awarded the 2008 Award for Excellence from the Chartered Institute of Logistics and Transport in the category of ‘Materials Handling Equipment and Technology’. When considering how best to manufacture the more up-market design radiators in the new facility, it became clear that there was little point replicating other manufacturers’ processes and, therefore, every piece of equipment has been designed from scratch. Quinn Radiators has taken some basic concepts and commissioned the manufacture of bespoke, totally automated equipment for the manufacture of both headers and elements and for the assembly of the product and the final testing. This investment has enabled Quinn to offer a top class quality product in the most efficient manner possible.

An emphasis on certification and environmental considerations

In terms of quality, the new facility operates to ISO 9001:2000 and all products are manufactured and tested in accordance with BS EN 442. As a further reflection of Quinn Radiators’ commitment to delivering high quality products, the company has also been awarded the NF quality mark – the leading product certification mark in France. This quality mark, which is widely known throughout Europe, recognises Quinn Radiators’ compliance not only with current standards, but also with additional quality criteria that will meet consumers’ needs. This certification allows Quinn Radiators to supply into new markets within Europe, opening up more opportunities for the brand to grow and develop in previously unexplored territory. The company takes its environmental responsibility very seriously and has also attained the ISO 14001 accreditation for its environmental management system accreditation. It is also committed to recycling and environmentally friendly production techniques. Take packaging, for example. Quinn is a member of VALPAK (a registered compliance scheme under the packaging waste regulations). Its systems are designed to minimise the impact of packaging on the environment and waste streams – whether it is minimising package materials or using fewer or alternative materials. The use of recycled materials in product design is being considered, as is the recyclability of radiator components at the end of their useful life. While Quinn’s fully automated production facilities are designed to minimise waste as far as possible, any waste that results from the production process is 100 per cent recycled. In addition, automated warehousing allows all picking to be done on site and therefore no additional traffic movements are needed to other locations – reducing the possibility of damage to products and therefore the potential for waste creation.

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While Quinn’s fully automated production facilities are designed to minimise waste as far as possible, any waste that results from the production process is 100 per cent recycled

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Award-winning logistics and transport capabilities

Quinn has put all the appropriate safeguards in place to protect the community, workplace and environment. And the company continues to work with local, national and international legislators and regulators as well as industry bodies to comply with and help create reasonable and effective regulations aimed at protecting the environment. For example, the company has implemented an energy management system in response to climate control legislation.

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Heating equipment Quinn Radiators

Moving forward with the new Quinn Round Top and a product portfolio concentrated on form and function

All this investment in R&D and advanced manufacturing systems allows Quinn Radiators to constantly upgrade and develop new generations of market-leading radiators. For example, with its slim profile and refined styling based on a market-leading 25 mm pitch, the new Quinn Round Top sets high standards in design and efficiency, making it one of the best Round Top radiators on the market. This new Round Top exhibits the smooth, rounded top without any sharp vertical weld seams characteristic of current models, and combines a discreet modern appearance with high performance and classic good looks. The closely arranged water channels ensure a high yield and faster heating. There are also other advantages including four tappings, allowing for greater installation opportunities, and an improved longer-lasting paint finish in a brighter white. It’s a budget-friendly radiator suited to any home and offers the customer choice in heat output and size to any application or project coupled with outstanding quality, efficiency and finish. In addition to panel radiators, Quinn Radiators also manufactures and markets a range of towel and feature radiators aimed at consumers who are looking for functional products that ‘fit’ with their modern lifestyles and personal tastes. A quick glance through Quinn Radiators’ current design and feature product portfolio will reveal sculptured lines, bold geometric shapes and stunning finishes in a wide variety of sizes, colours and shapes. With a comprehensive selection of designer radiators on offer, Quinn Radiators is guaranteed to have the perfect choice for any home interior. For instance, Quinn’s Sofia Feature model combines the latest in heat tube technology with unrivalled design excellence. The outer pipes of the radiator are heated

by hot water, while the smaller, inner pipes are warmed by heat transfer; an economical but stylish solution to home heating. While other feature radiators like the Slieve and the Adagio are superbly crafted with exceptional finishes. Their contemporary presence makes them an interesting piece of furniture and a focal point suitable for any room. Education is also an ongoing part of Quinn’s environmental agenda. The company is currently in the process of carbon footprinting its market-leading compact radiator and is conscious of helping to raise awareness and promote environmental responsibility among its employees and customers going forward.

The Quinn Group

Quinn Radiators is a division of the Quinn Group. The Quinn Group, which has operations in the UK in the areas of commercial and business insurance, glass, plastics and hotels, employs approximately 7,000 people in Ireland, the UK and Europe. Being part of the Quinn Group enables Quinn Radiators to leverage market knowledge from other Quinn Group companies quickly, allowing it to respond rapidly to market conditions and trends. It is seen as one of the most enduring success stories in Irish business and, in 2007, the Quinn Group reported sales in excess of £2 billion.

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Catering equipment IMC

Catering

change

for

Imperial Machining Company (IMC) – part of

Following a major strategic reorganisation and relocation, catering equipment firm IMC has seen its profits soar. MD Tim Tindle updates Louise Hoffman on developments at the company post-move

the Lincat Group – is now 102 years old. From its roots as a potato peeler manufacturer, its commercial catering equipment market share has expanded steadily, thanks to the introduction of successive niche new products. “IMC began by manufacturing vegetable preparation machinery such as hand cranked potato peelers and chippers, which were developed and superseded by the motor driven machines manufactured today. In 1956 commercial waste disposers were added to the range, followed by stainless steel bar systems and back bar refrigeration in the 1980s,” explained managing director, Tim Tindle. “Now we’re heavily into waste food composting, the idea for which came about following a conversation with the Prison Service which went along the lines of, ‘I’ve bought this industrial food composter and it doesn’t work – could you sort it out?’

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Providing a boom in profits during economic gloom As businesses across the UK face growing pressure on their finances, profitability becomes an increasingly challenging subject and senior management teams are often forced to make difficult decisions involving downsizing and damage limitation options.

ngaging a specialist company to assess your overheads and look at how each of these costs can, in the majority of cases, be reduced by as much as 20 per cent, producing significant savings and helping to make a real impact on your bottom line. One such provider of this service is Expense Reduction Analysts – the largest cost management organisation in the UK, which also has a presence in 28 countries around the world. Priding itself on a level of knowledge, focus and expertise that is achieved through first-hand industry experience, the company’s client list includes leading British businesses such as Volkswagen Group UK Ltd, Carillion, Kia Motors and Paul Smith among those companies that have benefited from impressive cost reductions. Client manager Andrew Brackenbury believes an increased awareness of the scale of opportunity available is required, especially within the manufacturing industry. He comments: “Companies often employ internal specialists to source raw materials at the lowest cost in order to produce the best quality product at the best possible margin, but when sale prices come under pressure this can only provide

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limited benefits. However, combining this with the services of a cost reduction specialist, who will assess and lower overheads across your entire business, can help you to meet the demands of your marketplace and achieve improved profits within a period of months.” IMC, a leading manufacturer of bar and catering equipment, has recently appointed Expense Reduction Analysts to review several cost categories. Andrew explains: “IMC approached us in August this year to review a range of costs including utilities which were due for renewal in October. With energy prices being extremely volatile, we undertook a full review of IMC’s current supply costs and the options available to them and presented options in time for the company to make an informed decision on how to proceed. Work is also progressing on a number of other key overhead areas.” Many firms will believe that they can do the work of a cost management organisation using their internal resource. While this may have an element of truth, it will never be able to replicate the knowledge, focus and expertise that Expense Reduction Analysts can deliver in a long-term partnership. Andrew says: “We can work alongside an internal procurement

department and agree a strategy for reducing overheads to an agreed target that makes best use of internal resource while at the same time defining a range of areas in which our knowledge, focus and expertise can deliver cost reductions in short timeframes to agreed success criteria.” So, as the UK enters a period of recession and UK firms face a combination of rising costs and falling profits, many could benefit from the knowledge and expertise of companies such as Expense Reduction Analysts. Further information on the range of cost-saving categories available can be found at the company’s website www.ERAUK.net

Published in association with: EXPENSE REDUCTION ANALYSTS Tel: 02380 829 737 Email: info@erauk.net www.erauk.net

Catering equipment IMC

“This developed into a two-year research project with Imperial College, looking at what you need to make good compost out of food waste. The resulting systems are now installed in the first proper eco hotel in the UK, the 02 dome, the Milton Keynes shopping centre and about 26 prisons around the UK. It’s just what IMC does – it’s a niche product.” Back in April 2007 when The Manufacturer last visited IMC, the company was undergoing a huge consolidation and a move to new premises. “Initially, 2007 saw us taking a huge breath and a sigh and saying ‘thank goodness for that’,” said Tindle, “because in the last two years we had relocated the organisation from a location in Germany, a location in London and a location in Shotton, to a new factory in Wrexham.

“

As well as the relocation we had to recruit something like 85 per cent of staff as most people chose not to relocate, but that gave us a chance to build a new team and a new culture based on winning and continuous change

“This was a huge task. As well as the relocation we had to recruit something like 85 per cent of staff as most people chose not to relocate, but that gave us a chance to build a new team and a new culture based on winning and continuous change. At the same time there was a huge amount of investment in the move, in the new premises and in new plant and machinery – about £5 million in all – and for an £8 million turnover company as it then was, that is kind of difficult to justify in a way.” Once the big move was out of the way, the company was then able to make more incremental changes within its manufacturing operations to maximise on the resultant benefits of the reorganisation. While lean manufacturing methodology has been involved in improvements at the site, “our manufacturing model is not a lean manufacturing model per se – when you have such varied

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Catering equipment IMC

One such improvement was the application of the 5S principle to a bench unit used to assemble the base units for food waste disposers. “By simply tidying that area up and creating an ergonomic layout we’ve saved between five and 20 minutes per machine when we’re manufacturing it. Although that may sound like we were very inefficient before, the reality is we probably were but we never realised it!” Tindle admitted. Despite stock holding being a complex area for IMC due to the range of variants of each of its machine products, the firm has still sought to reduce inventory where possible. “Running from three sites as we were previously was in itself quite inefficient. Now, through lean processes and the stock control systems we’ve put in, we’ve managed to reduce our stock holding – dramatically for us.” When it moved to Wrexham, IMC chose to move its supplier base along with it, saving costs in the process. Since then – and perhaps more significantly – “we’re just in the process of bringing back our sourcing of castings from eastern Europe to foundries in the UK, because they’re competitive once again and the quality is better, which is great news, and we

often forget that we also now manufacture in house some components we previously sourced in China!” The firm also made investments in new machinery, such as four axis CNC machines. “These are being used more and more as we increasingly re-examine the way we manufacture components. For example, taking previously fabricated parts and assessing whether they can be made quicker in a machined form,” said Tindle. “These are ideas that are

“

Through lean processes and the stock control systems we’ve put in, we’ve managed to reduce our stock holding – dramatically for us

“

products you have to have a modicum of stock to hand. But it has still changed our philosophy and how we do things, and there have been specific improvements around the factory,” explained Tindle.

typically coming from the guys on the shopfloor rather than from design engineers or from accountants looking at the cost savings – which is brilliant.” The arrival of the company’s most recent machinery investment – two new 3.5 metre press brakes worth a total of a quarter of a million pounds – is being eagerly awaited. “Because of the work we’ve done we’ve identified that the main constraint we have in leaning ourselves down further and reducing batch sizes is in the press brake area – the area where folded panels are produced. This is particularly so when we have so many components being fabricated upfront,” Tindle explained. With the new press brakes, new product designs can be checked for production feasibility before manufacture, saving significant amounts of lost time. “This way, the computer software the designers use talks to the computer software

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Catering equipment IMC

“It’s funny,” Tindle continued, “we should be looking at putting in things like seam welding and robotic welding, but we do so many variations it’s actually economically very hard to justify. We are one of those companies that is successful because of the flexibility we offer to the final user, and sometimes that means you can go down the automated CNC machine route, and other times you have to say well, the capital investment doesn’t make sense, it’s far better for us to just build up our staff skills base and make use of their abilities.” IMC’s strategy has certainly paid dividends, as the statistics prove. The company has seen its turnover grow by

15 per cent, to over £10 million per annum in the space of 18 months, and raw materials stocks fall 30 per cent, efficiency grow 20 per cent and operating profit rise 46 per cent.

“

We’re just in the process of bringing back our sourcing of castings from eastern Europe to foundries in the UK, because they’re competitive once again and the quality is better

“

that manages the bending operation and can say ‘no I can’t bend that, send it back,’ greatly reducing the number of iterations between the designers and production. Furthermore, the multiple set-up technology employed by the press brakes themselves dramatically reduces set up times, allowing us to have lower batch sizes going through the shop. This in turn will reduce our lead times, which will make the entire factory, we believe, more flexible and a lot leaner.

“The most important thing for us was the relocation. We employed deliberately tough selection criteria – everyone had a series of interviews, most up to five – but it really paid off in terms of all of us being dedicated to the company, to each other and to what we are trying to achieve here, and we continue to build on that.” But the relocation had perhaps another part to play in the motivation of those employees. “Princess Anne very kindly came to open the new factory last year, and I can’t emphasise just how empowering it was having a Royal visit. You feel very special when the Queen’s daughter comes to visit you!” Tindle smiled. And rightfully so.

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Valves

Broady Flow Control

Going flow with the

From its roots as a trawler repairer, Broady Flow Control has grown and adapted to the changing world, finding itself now as a key supplier to the defence industry. Louise Hoffman speaks with production director Paul Liddle

Broady Flow Control began life in 1902 as a

marine pipework repair and installation firm based in Kingstonupon-Hull. At that time the Hull Docks were thriving, with the local trawler fleet providing ample work opportunities for the company. Then in the 1930s, Broady moved into making valves – initially for trawler boilers – and has remained loyal to this product market ever since. “The core products we produce are mechanically operated valves, pressure-reducing, sustaining and safety relief valves,” said production director Paul Liddle. “Broady has sold into many and varied markets around the world but has remained in the high integrity, low volume sector, concentrating on added value activities throughout the range.”

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These “varied markets” have come to include chemical, petrochemical, oil and gas, pharmaceutical, mining and, perhaps most proudly for Broady, defence. As one of only a few chosen firms to have been awarded the Partners in Pursuit of Excellence certificate, Broady is a key supplier to both the Ministry of Defence (MoD) and to BAE Systems Marine limited. Indeed, BAE is recorded to have rated the firm among its top suppliers (out of the total 3,000) on the basis of quality, performance and loyalty – certainly an impressive accolade.

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“

We are constantly reviewing the profile of the product range through replacing outdated valve technology with new products to better support our customers’ requirements

In order to serve such demanding and varied markets, and to fulfil both standard and bespoke needs, the company has had to keep itself at the forefront of technology and service offering. The drawing office therefore operates using the latest computer aided design (CAD) equipment, which is also linked through to the production area, and the site boasts a robust QMS system and skilled quality assurance team, “ensuring full material and testing traceability when required.”

Valves

Broady Flow Control

There are onsite pattern making and foundry facilities, conventional and CNC machining facilities, fitting and testing facilities, and inspection services including surface flaw detection. In addition, the company also offers a comprehensive after sales support service, covering overhaul and refurbishment, through-life product support, maintenance, spares and repairs. “Always looking to the future, we have invested in a focused and cautious way, specifically with XYZ machines, a new bar saw, a new spray booth, and we’ve just invested in a new test rig,” explained Liddle. “Our managing director is also a highly skilled technical engineer who provides leadership into new and exciting products to strengthen our product range. And we are constantly reviewing the profile of the product range through replacing outdated valve technology with new products to better support our customers’ requirements,” he added. The most recent development at the site has been the introduction of the EFACS IT solution. “This has revolutionised the way we receive and process orders, greatly reducing lead times,” said Liddle. “Everything that we have on site is now run through EFACS – it’s far better now because we’ve got history, which we never had in the past. Since the implementation of the system, the firm has enjoyed a reduction in lead time from order receipt to goods dispatch of, on average, 15 per cent, and is able to cost new work quickly and accurately based on current and completed job profitability.

Broady boasts a loyal and skilled workforce, and recognises the part it plays in the long-term success of the business. “We have a full five-year apprenticeship scheme, bringing in the next generation of engineers to learn from our existing employees. We have got people who have been here for 40-plus years, but while we have people going out at the top end, we’re also fetching people in from the bottom end and developing their skills as well. This commitment has lead to a very stable workforce over many years and strength in all areas for the future,” Liddle explained.

“

Always remaining positive on development and never being complacent about what we offer to the marketplace, we will continue in the same vein for many years to come

“

“When I first started with the company in July of last year and the system had been in for seven months, there was a lot of resistance to it because to a lot of the workforce, the old way is best. People resist change. But now they wouldn’t be without it! It has taken time but we are now certainly reaping the benefits.”

So, no risk of a skills gap in this organisation then? “No, we’re certainly not looking at that.” And with this balance of sense and ambition, Broady Flow Control looks sure to go from strength to strength, as Liddle concluded: “The future for Broady is very positive. Always remaining positive on development and never being complacent about what we offer to the marketplace, we will continue in the same vein for many years to come. Watch this space!”

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Appointments

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www.themanufacturer.com/uk/jobs

National Project Manager Our client is a market leading ambient food manufacturer with a nationwide presence. They are part of the grocery division of a diversified international food, ingredients and retail group with nearly 100,000 employees across the globe. They are currently looking for a National Project Manager to be based at a local site but will also travel throughout the UK to manage all large scale projects within the group.

Nationwide â&#x2014;&#x2020; Salary c ÂŁ50,000 + Car + Cash Allowance + Bonus + Benefits The role will encompass complete turn key project management of major projects at site level supporting the local management teams in successfully delivering CAPEX programmes. The role will allow the successful candidate the freedom to express their meticulous planning skills using critical paths and IT systems to manage budgets, timescales, contractors and delivery versus challenging milestones and deadlines. You will be an experienced Project or Engineering Manager from a fast moving environment, preferably

food, with a track record of delivering projects. Your technical skills will cover electrical, mechanical and civil engineering so you can manage all areas of the projects with particular emphasis on the project management side with financial and timescale control. Finally, your interpersonal skills will be first class with a strength of character that will express itself in an ability to influence stakeholders at all levels and accept or push ideas forward and follow through to a successful conclusion.

To apply for this role, please send an up-to-date CV to David Shelton at davidshelton@uk.michaelpage.com or call on 0161 828 6394 quoting Job Ref: MPTU12998851.

Specialists in Manufacturing Recruitment 166 offices in 28 countries | www.michaelpage.co.uk

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<h[i^ FWijkh[i Site Technical Managers (i) Lincolnshire – Ref: TM11993 (ii) South Wales – Ref: TM12008 Attractive Negotiable Salaries Dairy Farmers of Britain are a successful multi-site co-operative, well established across England and Wales, with around 2,200 farmer members and circa 2150 employees. With milk, cream and related dairy products dominating our portfolio, we are a traditional business with a modern culture and fresh ideas. Our sites in both Lincolnshire and South Wales, employ a well trained, multi-skilled workforce who process and supply milk and cream to major multiples and blue chip customers. As the custodian of quality, you will be responsible for BRC compliance, GMP maintenance, co-ordination of customer audits, HACCP and the overall strategic direction of a full technical agenda. Leading a significant team, your brief will focus on applying best practice and instilling a culture of continuous improvement. Customer communication will be a key aspect of this role. With a good knowledge of retail own label supply, you should be fully conversant with BRC and HACCP requirements or protocols, have a fair level of IT literacy and the ability to work on your own initiative. A good communicator, change orientated and results driven, your progressive career to date will ideally be supported by a formal food science qualification and several years Quality/Technical management experience. Dairy experience is useful but by no means essential. To apply, please email or write in strict confidence, with a comprehensive CV, including salary details, quoting appropriate reference to our retained consultants, CPA. Email: jobs@cparecruitment.com

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Ambient House, 90 Hillview Gardens, Hendon, London NW4 2JR. Tel: 020 8203 1000 All direct and third party applications will be forwarded to CPA.

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Operations Director Significant Executive Salary + Car + Package • Flexible Location This is a brand new role, offering complete operational control of a dynamic, newly acquired business. Part of a group of niche food manufacturing businesses, supplying a high quality product portfolio to a host of blue-chip retailers and third party partners, they are well positioned for continued growth, having invested substantially in the latest manufacturing technology. Reporting to a remotely based Group MD, you will be expected to manage the site as a stand alone business unit. Effectively, your brief will focus on implementing a complete step change mechanism and developing a vibrant food manufacturing operation - spanning all operational and commercial KPI’s - with full P&L responsibility. They seek a proven business leader, used to delivering results through production efficiency, people leadership and sound financial stewardship, who can demonstrate a successful track record of profit and loss improvement in a similar business. In short, a dynamic, hands on industry professional, with a high level of commercial management expertise and proven ability to manage a progressive, fast growth business from top to bottom. To apply, please email or write in strict confidence, with a comprehensive CV, including salary details, quoting reference TM11972 to our retained consultants, CPA. Email: jobs@cparecruitment.com

Ambient House, 90 Hillview Gardens, Hendon, London NW4 2JR. Tel: 020 8203 1000

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Source of Supply

www.themanufacturer.com November 2008 Vol 11 Issue 11

When the

goi n g gets

tough... Team-working to success at W L Gore & Associates

Global variables

Juggling the economy

Manufacturing innovation Survival of the fittest

The Manufacturer LIVE 2008 Event and awards review

Appointments The sector’s top jobs

www.themanufacturer.com November 2008 Vol 11 Issue 11

Interview

George Kessler CBE Group deputy chairman, Kesslers International