The Manufacturer November issue 2011

www.themanufacturer.com November 2011 Vol 14 Issue 11

www.themanufacturer.com November 2011 Vol 14 Issue 11

WorldSkills: to compete is a vocation

Energy and Sustainable Manufacturing Setting the standard

BSI explains its accreditation system for sustainable procurement

Leadership, people and skills Apprentice needs appeased

Cogent launch TAS to ease apprentice employment

Wonder women IMechE’s nine female trail blazers for the manufacturing industry revealed

Special feature Crime threat

Metal theft is now costing UK industry ÂŁ1bn a year

Bridging the Valley of Death Launching the first Technology Innovation Centre

In partnership with:

Interview Christine Gaskell

Personnel director, Bentley

Asset finance wasn’t the only area opened-up to innovation in 1861

The pin-tumbler lock patented

by Linus Yale Jr in 1861

It’s fitting that we should feature a lock to celebrate Lombard’s 150 years of innovation in asset finance. Because Lombard started life in 1861, the same year that Linus Yale Jr patented his pin-tumbler lock – the forerunner of the modern lock. We’ve also pioneered new approaches, throughout our history, in business finance – helping companies from every conceivable walk of business to build for the future. We have funded everything from IT to production lines, heavy plant to agricultural equipment. And we have helped businesses to expand, to modernise and to update their technology, often enabling them to release working capital at the same time. To find out what we’ve been up to over the last 150 years, visit 150years.lombard.co.uk Security may be required. Product fees may apply.

YEARS

OF INNOVATION

Registered Office: 3 Princess Way, Redhill, Surrey RH1 1NP, Registered in England No. 337004

Editor’s comment

Welcome to our flagship issue Congratulations to all our shortlisted companies at this year’s Manufacturer of the Year Awards. The competition has been fierce despite the pressures which might easily have discouraged businesses from devoting time and resources to entering – on November 9 we will discover who has flouted the many challenges facing industry with greatest aplomb in 2011.

As ever it seems like no time at all since we were celebrating the same awards ceremony last year. Although time has sped by, the year to date has included some small steps and great leaps for the manufacturing community.

For me, one of the most striking features of 2011 has been the increase in actions rather than words from government in terms of the post-recession support being provided to industry.

In recent months we have seen the launch of See Inside Manufacturing, a campaign to raise the profile of manufacturing careers and protect against future skills gaps. Throughout October many companies have been involved with the scheme (see p08).

October also brought the first of the new Technology Innovation Centres (TICs), to which £200m of public funding was pledged back in January. The TIC for High Value Manufacturing promises to bridge the gap, identified in the Hauser Report, between leading innovation in UK research centres and industrial exploitation of these concepts. Perhaps most importantly the TICs structure is designed to put SMEs at the centre of this process – putting much needed resources in the hands of the UK’s manufacturing backbone (see p06 and p116).

But although government’s commitment to strengthening Britain’s manufacturing base is becoming more tangible there are still many gaping holes in its strategy. Tax relief for R&D remains a key issue – as discussed by PriceWaterhouseCoopers in a report released this month in association with EEF and SMMT – and the ability to implement innovative developments for competitive advantage is a problem when capital allowances are insufficient (see p12). www.themanu facturer.com November 2011 Vol 14 Issue 11

WorldSkills ;

www.themanu facturer.com November 2011

Vol 14 Issue

to compe te is a voca tion

Energy and Manufac Sustainable

11

Again it is the huge mass of manufacturing SMEs which suffer most when taxation and regulation are flawed. This segment, which represents around 99% of the UKs manufacturing base, has little capacity to keep track of shifting compliance issues, product and market diversification opportunities, or to sustain the loss of major customers should green regulation cause them to flee Britain’s shores for less stringently administered regions.

16 34 45

Setting the turing standard

BSI explain sustainables its accreditation system procurement

Leadersh

for

Apprentic ip, people and e needs appeased skills TAS to ease apprentice Wonder employment women IMechE Cogent launch

’s nine manufacturing female trail blazers industry reveale for the d Spec

ial feature

Crime threa t

Metal theft is now costing UK industr y £1bn a year Bridging the Valle y of Deat Launching h the first Techno logy Innova tion Centre

Interview Christine

Personnel Gaskell director, Bentle y

In partnership

with:

Cover image: Cover image displays scenes from WorldSkills London 2011.

See page 16 for more.

Thankfully, despite recent restructuring, the Manufacturing Advisory Service will continue to offer free business improvement expertise to manufacturing SMEs under the administration of its new national consortium. Since its inception in 2002, MAS has helped hundreds of UK companies bridge maturity gaps and take advantage of growth opportunities. Aiming high, the restyled organisation has also targeted the delivery of 1,250 engineering and manufacturing apprenticeships per year (see p04).

Jane Gray, Editor

48 1

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

Editorial

IT Editor Malcolm Wheatley malcolm@malcolmwheatley.co.uk

Associate Editor Roberto Priolo

r.priolo@sayonemedia.com

Editorial Assistant George Archer

g.archer@sayonemedia.com

Design

Art Director Martin Mitchell

m.mitchell@sayonemedia.com

Henry Anson, Sales Director Henry is a shareholder in SayOne Media (SOM) and responsible for the company’s commercial activities developing new concepts and products for The Manufacturer’s readership. Henry is keen to build a bridge between the manufacturing community and sector which supports them. h.anson@sayonemedia.com

Designers Alex Cole Vicky Carlin

studio@sayonemedia.com

Sales and Events Head of Events Jon Tudor

j.tudor@sayonemedia.com

Marketing Executive Grace Gilling g.gilling@sayonemedia.com

Project Director Matt Chilton

m.chilton@sayonemedia.com

Will Stirling, Editorial Director Will edited TM for two and a half years and now is working to expand the SOM publishing portfolio. He is responsible for the launch of new reports and special supplements for The Manufacturer and for the maintenance of editorial standards across SOM publications. Before joining SOM Will worked for Euromoney and IPC Media. w.stirling@sayonemedia.com

Sales Manager Benn Walsh

b.walsh@sayonemedia.com

Telemarketing Manager Angiela Thornby-Burt a.burt@sayonemedia.com

Client Account Managers Charlotte Hyde c.hyde@sayonemedia.com

Sarah Hough

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David Kimberly

Jane Gray, Editor

d.kimberly@sayonemedia.com

Jane joined SOM in 2009 for the launch of the Lean Management Journal, sister publication to TM. Reporting concurrently for The Manufacturer, Jane focused on industry skills development features and lean enterprise until she became editor in June 2011. j.gray@sayonemedia.com

Claire Woollard

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

The Manufacturer in partnership with EEF, the manufacturers’ organisation.

Working together to secure the future of manufacturing.

Elizabeth House, Block 2, Part 7th Floor, 39 York Road, London, SE1 7NJ Tel: +44 (0)207 401 6033 Fax: +44 (0)207 202 7488 info@sayonemedia.com www.sayonemedia.com

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Cranfield University EEF Institute for Manufacturing, Cambridge Univesity

Contents 04 News and regular columns.

A whistle-stop tour of manufacturing news and events in the last month along with commentary on industrial research, legal issues and economic challenges for manufacturers.

13 The Naked Engineer

Our anonymous industry commentator lets loose on manufacturing policy and practice in the UK

16 Lead WorldSkills: to compete is a vocation: Jane Gray reviews the performance of Team UK at the world’s largest vocational skills competition and investigates what is being done to create a legacy for the event.

34 Interview On a mission to make it easier: Will Stirling talks to Christine Gaskell, personnel director at Bentley about her passion for apprenticeships and what needs to be done to facilitate training within SME manufacturing companies.

Pillar features

54 Finance and professional services

Look north; look positive: Sponsor of the Manufacturer of the Year Awards, Royal Bank of Scotland, gives its view on the manufacturing outlook in the north of the UK

57 Quantitative Easing and

manufacturing: Will manufacturing firms benefit from the Bank of England’s latest measures?

65 IT in manufacturing

Building the extended enterprise: Malcolm Wheatley investigates the maturity of ERP systems reaching beyond the boundaries of a single organisation as ‘IT for the extended enterprise’ steals a spot as the latest technology trend

71 IT news

74 Special features Crime threat: Highlighting the rise in theft of scrap metal across the UK and threat posed to manufacturing firms by a crime trend now costing UK industry an estimated £1 billion annually

79 Now is the time for cloud

computing: In this mini supplement articles investigate whether the cloud computing paradigm has come of age for manufacturers

30 Energy and sustainable manufacturing

Manufacturinginaction

45 Leadership, people and skills

88 Hampshire cosmetics pharmaceuticals and chemicals

Setting the standard: The British Standards Institute reviews the accreditation which can help manufacturers build sustainable procurement strategies

Appeasing apprenticeship needs: Jane Gray talks to Jayne Edwards about the launch of Cogent’s new Technical Apprenticeship Service

50 Wonder women: Snapshot

profiles of nine women identified by the Institution of Mechanical Engineers as industry trail blazers and role models for future female engineering talent

53 Employee of the month

Jenny Smith, product definition engineer at MBDA

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

92 Daval Furniture custom furniture and fittings 98 Fine Industries chemicals 104 The last word Building the extended enterprise: TM’s Editorial Director Will Stirling delivers his observations, celebrations and indictments of developments in UK manufacturing.

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Manufacturing J o bs

M A S Ref o r ms

Reforms have been announced to the Manufacturing Advisory Service, a government funded agency which offers free business improvement services to UK manufacturers.

The changes see MAS transformed from a regionally administered organisation to a single national body – the Manufacturing Advisory Consortium (MAC). This consortium comprises consultancy expertise from Grant Thonton, the West Midlands Manufacturing Consortium and MAS South West. In addition to the changes in administration MAC has been asked to specifically target SMEs

in service provision. The old style MAS did not have this official focus.

Government expects the reformed advisory service to help create £1.5bn in economic growth for manufacturing as well as 23,000 jobs nationwide. In addition the new consortium is expected to deliver a minimum of 1,250 engineering and manufacturing apprenticeships per year through its work with SMEs.

Reacting to MoD budget cuts, the Finmeccanica-owned helicopter manufacturer AgustaWestland has been forced to reduce its UK workforce by 375. Despite these cuts, Business Secretary Vince Cable said that he hoped the company would be able to expand again in the future.

Government recently invested £32m in the company which makes the new the AW169, a lightweight utility helicopter unveiled at the Farnborough Air Show this year.

N ew A i r b u s fact o r y

A new aircraft wing manufacturing facility in North Wales will secure 6,000 jobs at Airbus and throughout the UK aerospace supply chain.

The facility in Broughton, North Wales, was opened by Prime Minister David Cameron on 0ctober 13. It will produce the carbon fibre wings for the Airbus A350 which currently has around 570 orders. Six hundred and fifty jobs are to be created at Airbus to satisfy this demand and an estimated 5,000 will be required in the supply chain.

The plant occupies 46,000 square metres and represents the biggest development undertaken at the Airbus site in over eight years. Prime Minister David Cameron, who opened the site, said the event marked a great day for Wales.

Graham Chisnall, managing director aerospace and operations at the sector trade body ADS, was positive about the level of government support behind the plant. “Such a strong level of Governmental commitment towards Aerospace, one of the few manufacturing industries that has consistently grown over the past years, is hugely encouraging,” he said.

The AW169 manufactured

by AgustaWestland

P lant in v estments I nd u st r y s k ills Sector skills council Cogent has launched a new Technical Apprenticeship Service (TAS) to provide “real jobs for real apprentices” in British process industries – particularly life sciences.

TAS is designed to lessen the administrative burden of establishing apprenticeships and to reduce any perceived risk. The service structure has been formed in association with Unite the Union and the National Apprenticeship Service (read more on p45).

Jayne Edwards, recently appointed MD of TAS

WorldSkills, the world’s largest vocational skills competition took place last month at the Excel centre in London. Over 200,000 visitors attended the event including Prime Minister David Cameron, Deputy Prime Minister, Nick Clegg, Mayor of London Boris Johnson and Business Secretary Boris Johnson gave their personal support to the event. Overall Team UK received five gold, two silver and six bronze medals – two in the engineering and manufacturing technologies categories (read more on p16).

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AstraZeneca is to invest £127m in a new Chinese factory as the pharmaceutical maker increases its stake in the fast-growing market.

The site represents AstraZeneca’s largest investment in a single manufacturing facility globally. It will make both intravenous and oral solid medicines for the company’s China business and will help AstraZeneca meet growing demand for its products in the country.

Engineering group Siemens is expanding its presence in Asia with plans to build a new factory in Sichuan province, China, that will manufacture Simatic controllers from 2013. The first build phase will create a 3,000m2 plant and if demand is storng Siemens have said they will expand to 10,000m2 and a workforce of more than 1,000.

News T echn o l o g y The wind energy market is set to overtake aerospace as the largest user of advanced composite materials, accounting for nearly 60% of the market by 2020, according to a new report. The overall market for advanced composites will more than triple to $25.8 billion by 2020, according to the Lux Research report Carbon Fibre and Beyond: The $26 Billion World of Advanced Composites.

Automation specialist, ABB has launched a new free appraisal process to help UK manufacturers discover opportunities for the application of robotics in their factories.

The appraisal launch is part of an ongoing campaign among members of the British Automation and Robotics Association to raise awareness of the competitive and financial benefits available through automation.

Sherbourne Sensors, the designer and manufacturer of sensors for military, aerospace and industrial applications has released a new range of high-precision inclinometers the LSW series. The products which are available in angular ranges from +3deg to +90deg can operate in temperatures from -18 to 70 degrees C and can survive a shock of up to 1500g.

D efence BAE Systems Submarine Solutions celebrated the keel laying of the fifth Astute boat, ‘Anson’, at a ceremony launched by Minister for International Security Strategy, Gerald Howarth MP on October 13. Anson is the fifth of seven £1bn Astute class nuclear submarines that the Ministry of Defence has given approval to build. At 97 metres and with a displacement of 7,400 tonnes, like all the Astute class subs Anson has a nuclear propulsion system which means she will never need to be refuelled.

Datesfor yourdiary November

8-10

The Manufacturer magazine is hosting its annual flagship conference, the Manufacturer Directors Conference at The Point, Lancashire County Cricket Ground. For information call Benn Walsh on 0207 401 6033 or go to: www.themanufacturer.com/mdc

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FDF is hosting a members only workshop in association with the British Automation and Robotics Association, to highlight competitive opportunities in automation investment. The event is to be held at CCE Edmonton in north London.

For information call: 0207 420 7132

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The Institution of Mechanical Engineers is re-running its successful seminar ALARP: costs, safety and risk – how low is reasonable, helping manufacturing and engineering professionals comply with regulation when ensuring risk is “as low as reasonably possible”. For information and booking visit: http://events.imeche.org

15-DEC 14

EEF will host several seminars on the use of social media in manufacturing businesses across its UK locations. For information and booking visit: www.eef.org.uk/events

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The CBI Annual Conference and dinner will take place at Gosvenor House, Park Lane, London. For booking and information contact: gemma.fisher@cbi.org.uk

December

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Lean Management Journal will host Lean Management Connect 2, a networking and resourcing conference for lean improvement professionals.

The event will take place in London. Call Benn Walsh on: 0207 401 6033 or email: b.walsh@sayonemedia.com for details

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The Manufacturing Institute will host a morning seminar entitled Educate, Inspire, Improve in Wrexham. The event is aimed at manufacturing leaders and will address how motivate and link value adding activities from the shop floor to the boardroom. Visit www.manufacturinginstitute.co.uk for more information

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The IET Young Woman Engineer of the Year Award will be announced at a ceremony in London. See: http://conferences.theiet.org/ywe for more information.

The Manufacturer will host Business Intelligence Connect a networking and resourcing conference for IT and manufacturing professionals. The event will be held in London. Call Benn Walsh on: 0207 401 6033 or email: b.walsh@sayonemedia.com for details

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The Financial Times is hosting the Future of Manufacturing conference in London. For information and booking go to: www.ftconferences.com/manufacturing

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The Anson submarine is equipped with cutting edge technology, including a nuclear reactor capable of powering the submarine for its entire 25-year life.

Westminster Energy Environment & Transport Forum will host a seminar entitled The UK Nuclear Energy Strategy: Safety, Sustainability and New Build. Charles Hendry MP, Minister for Energy and Climate Change will speak. For information and booking visit: www.westminsterforumprojects.co.uk

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Manufacturing

Valley of Death Bridging the

The High Value Manufacturing Technology and Innovation Centre aims to create economic benefit through a better ‘translational infrastructure’ for the UK’s wealth of excellence in primary research. Manufacturers, particularly SMEs, stand to gain.

I

n October the Technology Strategy Board launched the first of several new Technology and Innovation Centres (TICs). This pioneer TIC will focus on High Value Manufacturing and has been pushed forward as the vanguard of the TIC programme due to a political will and economic need to prioritise manufacturing growth in the UK. The launch of the first TIC is the product of four years of work by the Technology Strategy Board (TSB) and was largely funded by the Department for Business, Innovation and Skills (BIS). The aim is to produce integrated centres of excellence dedicated to helping companies bridge the so called “Valley of Death” between concept and commercialisation for scientific innovations.

Indeed this mission to Drive Innovation (for commercial success) forms TSB’s strap line and has been the large part of its raison d’être since its inception in 2007.

British industrial history is well-known for its successful inventions – the radar, the internet, the microwave, the jet engine etc. But it is also littered with the carcasses of product ideas and companies who perished in this place, where investment was lost before the idea could blossom.

In 2007 the TSB’s board recognised that the UK possessed clusters of companies and universities with specific disciplines in geographic locations.

Knowing full well that many countries had well-funded and highly successful technology and innovation centres, the TSB sent a proposal to BIS to develop a similar model in the UK. The Department, then under Lord Mandelson, agreed and commissioned IT entrepreneur Hermann Hauser to scope the project. In September 2010, Dr Hauser published The Current and Future Role of Technology and Innovation Centres in the UK. The report confirmed that the UK had strong competitive advantage in several areas of research and development, especially in science-based industries. The UK had, in 2010, four of the world’s top six universities and a research base second only to the US in the G8.

For over a decade, government policy had backed record levels of investment in science to over £40bn. But, and compared with many peer group countries, it regularly fell short of translating scientific leads for competitive positioning in new industries. Examples cited of failed inventiveness included body scanners and application specific circuits, where great potential for a new industry had fizzled out before the commercial stage.

copying successful TICs elsewhere, such as the Fraunhofer Gesellshaft in Germany and the Industrial Technology Research Institute in Taiwan, where the latter created Taiwan’s dominant liquid crystal display industry.

Funding for the TICs comes from public money, industrial contract research and competitive funding from UK and EU programmes, each contributing a roughly equal amount.

The first three TICs will focus on high value manufacturing, cell therapies and offshore renewable energy. These are areas which Hauser says will provide: global markets worth billions of pounds per annum; exploitation of existing UK technical leadership; a defensible technology position; and capacity to anchor a large part of the value chain, from research to manufacturing, in the UK. The High Value Manufacturing, or HVM TIC is made up of seven centres with expertise in these disciplines (see members list opposite). The HVM Centre, while governed by a single management structure, has no geographical hub and companies who need help with technology exploitation are encouraged to contact the leader of the centre most relevant to their technical application.

The immediate test for the HVM TIC is whether companies, especially SMEs, sign up for its facilities and funding and, if the TSB is deluged with applications, how many the TIC will be able to help.

Enhancing the innovation landscape Dr Hauser said the UK must “close the gap between universities and industry through a ‘translational infrastructure’ to provide a business-focused capability that bridges research and technology commercialisation.” He recommended “sustained and substantive support for an elite group of Technology and Innovation Centres (TICs)”, taking inspiration from but not

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Go to: www.themanufacturer.com/TICs to find out more and look out for TM’s special feature on TICs in the December issue of the magazine.

News CalltoAction On October 11th the Technology Strategy Board announced that the first Technology and Innovation Centre, for High Value Manufacturing, is open for business.

U

K companies with new product ideas which might face a treacherous path from concept to commercial reality were given a boost last month by the Technology Strategy Board.

The TSB will invest £140 million over six years in the Centres with the objective of stimulating manufacturing in the UK and reducing the risk of innovation for companies who have good ideas but need to offset the cost and risk of getting them to market.

The HVM Technology and Innovation Centre (TIC) brings together the research and development knowhow of seven centres of advanced manufacturing throughout the UK. The purpose of the HVM TIC is to accelerate the commercialisation of ideas, and prevent strong ideas from perishing in the ‘Valley of Death’, the phrase given to the fate of products that fail to reach a market-ready capability.

The TIC is a ‘virtual’ centre, with a single management structure but no single geographical location. The seven centres that comprise the TICs are: Advanced Forming Research Centre at Strathclyde University; the Advanced Manufacturing Research Centre with Boeing in Rotherham; the Centre for Process Innovation in Wilton; the Manufacturing Technology Centre in Coventry; the National Composites Centre; the Nuclear Advanced Manufacturing Research Centre in Rotherham; and Warwick Manufacturing Group, at the University of Warwick.

The HVM Technology and Innovation Centre is the first of three TICs that will be launched in the next four years.

The TICs are the product of a report commissioned by Lord Mandelson and authored by Dr. Hermann Hauser, The Current and Future Role of Technology and Innovation Centres in the UK, published in August 2010.

Hauser’s recommendations for more rapid and effective commercialisation of ideas was in part inspired by models for ‘translational infrastructure’ that bridge the gap between university research and industry, such as those used in Germany – the Fraunhofer Gesellschaft – Korea, Taiwan, and the US. Companies who need help to develop new products and get them to market more quickly and with less risk can contact the all the HVM TIC partners now. Help can come in the form of access to capital equipment, technical expertise, access to, for example, tier one customer feedback, and potentially financial assistance.

Dr. Hermann Hauser

Members of the HVM TIC consortium Advanced Forming Research Centre Strathclyde University, Glasgow Key competencies: Billet forging / Sheet forming / Precision forging Contact: Bill Ion w.j.ion@strath.ac.uk Advanced Manufacturing Research Centre with Boeing Rotherham / Sheffield Key competencies: Machining / Materials and component testing / Hybrids and metallic composites / Assembly Contact: Keith Ridgway k.ridgway@sheffield.ac.uk Centre for Process Innovation Location: Wilton and Sedgefield Key competencies: Chemical processing / Biotechnology / Printable electronics Contact: Nigel Perry nigel.perry@uk-cpi.com Manufacturing Technology Centre Location: Coventry Key competencies: Automation and tooling / Fabrication, joining and assembly / Additive and net shape / Process modelling Contact: Clive Hickman clive.hickman@the-mtc.org National Composites Centre Location: Bristol Key competencies: Design and manufacture of composites Contact: Peter Chivers peter.chivers@nccuk.com Nuclear Advanced Manufacturing Research Centre Location: Sheffield Key competencies: Fabrication of civil nuclear components Contact: Stephen Court stephen.court@namrc.co.uk Warwick Manufacturing Group Location: Coventry Key competencies: Lightweight product system optimisation / Energy storage and management / Digital verification and validation Contact: Dave Mullins david.mullins@warwick.ac.uk

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

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Manufacturing News SeeInsideManufacturing Woking College students with Frank Stephenson and Brad Fincham from McLaren

Secretary of State for Business, Vince Cable, formally launched the See Inside Manufacturing programme at the Vauxhall plant in Luton on October 10. “For too many young people the word manufacturing is a turn off,” said Dr Cable. “We are determined to shake up old fashioned views of manufacturing and through [this] campaign and the overwhelming support from the automotive industry, we will give young people the chance to see the exciting face of modern manufacturing, which is highly skilled, high tech and highly paid.”

Crewe-based luxury car manufacturer Bentley invited several local schools and The Manufacturer team to its factory to get a taste of what it is like to work for the prestige company. The group were invited to experience some of the skills and craftsmanship necessary in the creation of one of the world’s finest motor cars. The children that attended were able to stitch a steering wheel, assemble a Bentley V8 engine rocker shaft, and have a go at CAD drawing.

As well as this, the young students were able to clay model an alloy wheel in exactly the same fashion as Bentley’s own design team.

Throughout October, Jaguar Land Rover provided more than 120 year 10 and 11 students with hands on programme of activities. Conducted at the company’s Educational Business Partnership Centres, located at each of the company’s engineering and advanced manufacturing plants, the students enjoyed demonstrations of CAD CAM and safety test challenges. In addition, the students took a tour of the site and were also given guidance on job interviews and CV writing.

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The UK automotive industry threw open its doors last month as a part of the Government’s See Inside Manufacturing programme.

The series of coordinated factory visits were designed to get school children, graduates and their mentors into manufacturing companies to take part in hands-on activities and promote careers in the sector.

More than 20 automotive companies across the UK took part including Bentley, Vauxhall, McLaren, Jaguar Land Rover and Michelin.

On October 20, automotive manufacturer McLaren welcomed schoolchildren to its technology centre and manufacturing base near Woking. The lucky students from Woking College were selected after taking part in a hands-on manufacturing challenge competition. They were given a tour of McLaren Technology Centre and met engineers working on the new MP4-12C high-performance sports car.

Ron Dennis, executive chairman of McLaren Group and McLaren Automotive, said: “We’ve seen a worrying decline in our industrial base over the past two decades and this alarming trend must be reversed if we’re to create a more stable and prosperous future for our country.”

Woking College students at the McLaren Technology Centre as a part of See Inside Manufacturing

Tyre giant Michelin also joined the See Inside Manufacturing programme to help encourage more young people to take up an apprenticeship. Students from Stoke-based schools and colleges attended the site over two days. Sean Parry, Michelin factory manager, said he thought it was hard to persuade people to try engineering because of a “lack of understanding” about the industry. “People have an image of the industry that’s based on the 1970s,” he said. “We now have high-tech equipment, highly skilled employees making decisions on a minute-by-minute basis based on the product and we’re up-skilling people and putting in new machinery.”

ManufacturingAppointments UK Appointments Andrew Garvey Royal Bank of Scotland

Royal Bank of Scotland has appointed Andrew Garvey as director of client coverage for the manufacturing and industrials sector within its Corporate & Institutional Banking team. Based in the bank’s London offices, Garvey will be

responsible for further developing RBS’s proposition for the manufacturing and industrials sector, as well as providing value added support to RBS’s existing manufacturing clients. Garvey held previous roles at GE Capital and Barclays Bank.

Jo Bamford JCB Compact Products

Jo Bamford has been appointed as managing director of JCB Compact Products. Bamford joined JCB in 2002 as a product specialist for the company’s skid steer product range

based at JCB’s North American headquarters in Georgia. For the past eight years, Bamford has been managing director of JCB Utility Products, based in Cheadle, Staffordshire.

Tim Hopkinson Senior Hargreaves

Bury-based ventilation ductwork specialist Senior Hargreaves has appointed Tim Hopkinson as new chief executive. Hopkinson started his career as an apprentice with Derbyshire steel company Chesterfield Cylinders, rising to become production

engineering manager. Transferring to an electrical contractor specialising in systems integration for process industries, he progressed to managing director before joining the board of a South Yorkshire mechanical and electrical contractor three years ago.

Heating and combustion specialist Enertech has taken on Rick Crees as its new trading director for the Nu-way burner business.

Having worked in the plumbing and heating industry for 20 years, Crees will be responsible for commercial and domestic burners, spare parts, marketing and purchasing. He was previously with Wolseley UK. Terry Woolmer has been appointed new head of health & safety policy of manufacturers’ organisation EEF. As a key strategic partner of the Health & Safety Executive he will represent manufacturers’ views and concerns at UK level, as well as advising on EEF’s role as a major provider of health & safety consultancy and training.

To support its continued growth and investment in product development, IT solutions specialist Anisa Group has appointed Kathryn Howarth as group marketing manager and Courtenay Davies as financial controller for In2grate Business Solutions.

Howarth has previous experience with JD Edwards, Hewlett–Packard and Pace.

Seven apprentices will join the Responsive Engineering Group.

They will follow a four year programme that will see them learn basic engineering skills and practice before advancing to specific training in their chosen discipline. Once they complete their apprenticeships they will qualify with an HNC in Mechanical Engineering before beginning careers within the group.

Wolverhampton-based specialist coatings company Cooper Coated Coil has taken on a new marketing officer to assist with the company’s new branding and future growth. Heather Clapton joined CCC in August from Lloyds Pharmacy.

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Semta, the sector skills council for science, engineering and manufacturing technologies announced the appointment of Susan Evans as business development director. Evans has previously worked at EADS Astrium (formerly Matra Marconi Space), and has significant experience in creating new teams, customer focus and strategic product development. Most recently, she worked as programmes director for the National Physical Laboratory.

SAP United Kingdom and Ireland (UKI) has appointed Laura Burton as human resources director. Within this role, she will be responsible for managing a team of seven HR business partners dedicated to supporting all business functions across SAP (UKI).

She will also oversee the wider HR team supporting approximately 1,100 employees.

Boeing has appointed Matthew Knowles as communications director for the UK and Ireland. Knowles has a 13-year career in communications and public affairs roles. Between 2002 and 2004 he led the policy and communications team at the British Chambers of Commerce. He moves to Boeing from trade body ADS.

International Appointments Westinghouse Electric Company announced the appointment of Yves Brachet to the position of president, Europe, Middle East and Africa (EMEA) region. He will be responsible for building customer relationships, developing business plans, capturing new markets, and executing existing and new projects in the EMEA region.

To notify The Manufacturer of your company’s appointments, please contact Roberto Priolo at r.priolo@sayonemedia.com and 0207 401 6033

Economics

Thebigpicture

Thescienceofdesign turning innovation into commercial success

The UK is a source of innovative ideas and technologies. However, the country is much less good at translating these ideas into products. Industrial designers believe they can help.

I

t is often said that the UK is great at scientific invention but weak at turning those inventions into commercial success. How can we ensure that UK inventions are turned into useful, viable products?

One approach being explored in Cambridge is to get industrial designers to work with scientists in the early stages of scientific discovery to help identify potential applications.

This kind of collaboration not only helps guide the future direction of research towards a useful goal; it can also ensure it continues at all. Funding bodies and company management are much more likely to support research that can be demonstrated to have real commercial application.

Scientists understandably focus on interpreting the scientific principles underlying a new discovery rather than being overly concerned about what it may eventually be used for. Industrial designers, on the other hand, spend their working lives trying to ensure that products are both useful and usable.

They therefore have the skills and experience to look at a novel scientific development and think in terms of potential applications, users and markets.

12

The Institute for Manufacturing’s Design Management Group has been running the Design in Science project since 2009. Part of this group’s work has focused on the emerging new technology known as Biophotovoltaics. BPV is an exciting new way of generating energy from the photosynthesis of living micro-organisms. At the moment scientists have only been able to produce small amounts of energy using this approach but it is believed this could be greatly increased.

Working with scientists, designers helped to generate a series of conceptual designs to demonstrate just how the technology might be used in the future – with ideas ranging from a moss-powered table lamp to algae solar panels.

They were able to assist the scientific team to communicate the potential of their technology to commercial partners and investors, and have helped to steer the research in new directions.

Dr James Moultrie is Lecturer in Design Management at the Institute for Manufacturing and Head of the IfM’s Design Management Group.

These articles are abridged. For full versions go to

Autumnreview The Autumn Statement later this month and accompanying announcements on the Growth Review, Banking reform and compensation for energy intensive sectors come at a critical time for our economy says Steve Radley, director of policy and external affairs at EEF.

H

aving emerged from recession there were hopes that this year would cement the recovery but the latest data has revealed that the recession was deeper and recovery weaker than early estimates suggested.

UK manufacturing has however, been a significant player in the economy since the recovery began at the end of 2009, posting seven consecutive quarters of growth. Our latest survey continues to point to growth in manufacturing and we forecast that it will continue to outperform the rest of the economy.

But the outlook for Europe and other parts of the world economy has become cloudy at best and confidence has inevitably taken a hit. Even if orders remain fairly full, the scale of the crisis in Europe and the lack of leadership shown by the key players will inevitably feed into a more cautious approach by business.

This means the nature of the challenge facing government has changed and this month’s Autumn Statement must therefore be much more than an update of the government’s forecasts for the economy and the public finances. It must combine a clear programme of reform.

Initially, this means getting the government’s growth agenda back on track and for manufacturers the biggest priorities for growth are reducing the burden of taxes and regulation; making it easier for companies to find the finance and skills they need to grow their businesses. However, the seriousness of the economic climate and the rapid deterioration since the summer means even focused reform is no longer enough. The government cannot alter external demand but it can act quickly to counter the impact of a weakening world economy on confidence with targeted and time limited measures to boost investment. These should include 100% capital allowances for a period of two years; reform of the R&D tax credit to make it more effective in providing immediate support to innovators and an extension of the Business Growth Fund to cover debt as well as equity.

Last year, the biggest threat to growth came from our fiscal deficit. Today the biggest threat to reducing that deficit comes from weak growth.

Monthly columns

Thenaked engineer: stripping industry issues bare The Naked Engineer is our anonymous columnist from industry. Pulling no punches, NE provides informed critique of manufacturing policy and practice on a monthly basis.

I

s the UK Government serious about reviving British manufacturing? Recently the UK government bailed out banks using tax payer’s money. Could we see anything like that level of support for manufacturers?

George Osborne spoke at Mansion House to the bankers of the City in June. If he was really serious about manufacturing surely he would also be speaking to the manufacturers in the Town Hall in Birmingham.

As a proportion of GDP, manufacturing has dropped from around 10% to 6% in the last ten years.

A 25% drop in the value of Stirling against the Euro and the dollar over the same period should have helped competitiveness on price alone. The lowest corporation tax in Europe should have encouraged people to start businesses here. But the UK is still having trouble competing.

We are miles behind Germany in the technical sophistication of our manufacturing plant where we lack modern factories and robotics. With regards to the stability of manufacturing jobs in our factories, where is our equivalent policy to that Germany employs to subsidise manufacturers in difficult times to prevent them from having to lay off labour.

We are behind the curve of new innovation when compared to Germany, the USA and Japan.

This gap is likely to widen when you consider that the German government, for example, has just released Eu650 million for university research into energy storage and batteries as well as offering Eu60 million to the manufacturers of this new technology. The UK lags behind most G7 countries when measured by gross domestic expenditure on research and development and there is a scarcity of capital for innovation.

What is more Germany, and other global

competitors, are not afraid of protecting their investments in R&D to ensure national gain in the long term By contrast look at the result of the substantial Government support, £27m, which Jaguar Land Rover recently received to build a new small Rangerover in the UK. Tata has announced that this model will now be built in India.

So there is no guarantee of growth for the investments government do make. In fact these investments mean intellectual property is likely to leave the country rather than provide a long term benefit. I think the answer to this problem is to concentrate on helping SME’s, the ones with the chance to build up UK competitive success again.

UK SME’s employ 60% of people who do not work for the government. R&D tax credits should benefit small innovative SME’s not foreign owned multinationals.

UK SME’s employ 60% of people who do not work for the government The government should pick SME’s where innovation and technology has the potential to make the UK a world leader and encourage these innovative businesses to grow.

Every house in the UK needs a new sustainable source of power in the next twenty years. Surely this is one area where the UK could shine with its architectural and building expertise? Encouragement for R&D and deregulation of planning and building restrictions should help the potential winners of the future.

The UK is a world leader in popular music, computer graphics, electric machines, high technology materials, fashion, sports cars and motorbikes, jewellery, advertising, aero engines. I could go on and on.

At the moment our best designers and engineers often end up working for foreign companies, like Jonathan Ive at Apple. George Osborne should be looking for the new ideas and seeking to keep the likes of Ive in this country. As proved with Apple, small things can get very big indeed.

Have your say at www.themanufacturer.com

13

Thelegallowdown National

Planning Pol i cy Framework T

he Government published its much anticipated draft National Policy Planning Framework (NPPF) on 25 July 2011. The draft NPPF would reduce over 1,000 pages of planning policy to just 52. It recognises the important role that the planning system can play in the economic recovery and emphasises the need for planning authorities to plan proactively to meet the needs of businesses.

A key issue for the sector, recognised at The Manufacturers’ Summit 2011 (held earlier this year), as well as in a recent survey conducted by the Institute of Mechanical Engineers, highlighted that the rising cost of energy continues to be a prime concern for manufacturers. The NPPF requires planning authorities to work with other authorities to assess the quality and capacity of energy infrastructure and its ability to meet forecast demands. Planning authorities must also ensure security of supply of industrial and energy minerals to support their use in manufacturing processes and energy generation.

Since its publication the NPPF has attracted much criticism, most notably from the National Trust, which commented that the reforms could lead to ‘unchecked and damaging development in the countryside on a scale not seen since the 1930s’. The National Trust response to the reforms contains a photograph of the Los Angeles’ urban sprawl on its website with the implication that this is the future for many areas of the countryside if the Government does not rethink the proposals.

At the heart of the controversy is the NPPF’s presumption in favour of sustainable development.

Critics of the reforms seem to have conveniently ignored the word ‘sustainable’ and regarded the proposals as containing simply a presumption in favour of development.

The NPPF defines sustainable development as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’.

The document goes on to say that delivering

14

sustainable development means planning for prosperity, people and places. The last of those specifically explains that the planning system should be used to ‘protect and enhance our natural, built and historic environment’.

The NPPF states that planning permission should be granted where the Local Plan is absent, silent or out of date. The National Trust rightly points out that many local authorities do not have Local Plans in place, however, it fails to mention there is an exception to this where ‘the adverse impacts of allowing development would significantly and demonstrably outweigh the benefits’.

Why should all this matter to manufacturers?

The draft NPPF is one of the most welcome planning documents to come out of central Government for many years. A business-friendly planning system can only benefit manufacturers as they respond to changing and uncertain economic circumstances.

In practical terms the draft NPPF should make the planning system much more accessible to manufacturers and allow them to better respond to their own changing requirements.

There is no doubt that current planning policy, which extends to over 1,000 pages has, historically, been and continues to be, responsible for inhibiting many manufacturers’ strategy for growth and development. However, we hope that this simpler, more business focused approach, if adopted, will serve to encourage manufacturers to realise ambitions that might have otherwise been thwarted by the complexities of the old regime.

For more details contact: James Clark, Solicitor, Thomas Eggar LLP on: 01293 742845 or email: james.clark@thomaseggar.com

The new shape of corporate banking

Themes for 2012:

Suppliers and emerging markets At Santander Corporate Banking we are keen to address the key issues facing manufacturers day-to-day. We believe banks and manufacturers need each other, and above all the economy needs a strong manufacturing industry.

We aim to support manufacturers and build honest, open relationships.

Strengthening supplier relationships With cash flow tight, many manufacturers have benefited from our specialist supplier finance. Our Supplier Payments service builds on a business’s underlying financial strength to ensure suppliers are paid promptly, while giving you an increase in working capital or a P&L benefit – thus keeping suppliers happy and helping you build reliable, long-term relationships.

Brian Taylorson is the Finance Director of chemicals giant Elementis plc, which supplies specialist chemicals around the world. He says, “After the credit crisis, we’re looking at the reliability of our supplier base, and trying to forge closer relationships with sustainable suppliers.”

To that end, Brian says, Supplier Payments has helped Elementis. For example, the company buys chemicals from South African suppliers, with long shipping lead times. “Suppliers prefer shorter payment terms, and we prefer longer terms. Supplier Payments has helped us close the gap – it’s a win-win.”

Mike Read is Group Treasurer at Morgan Crucible Company plc, another FTSE250-listed company, which manufactures industrial ceramics and carbons. As at Elementis, business is strong, but a key challenge is managing supplier

Supplier Payments with Santander, he says, works well for Morgan Crucible.

“We have access to finance through normal channels, but Supplier Payments helps our smaller suppliers, and gives us leverage over pricing.”

“

Suppliers prefer shorter payment terms, and we prefer longer terms. Supplier Payments has helped us close the gap – it’s a win-win.”

Emerging markets and exports Many clients are also focused on the booming BRIC economies, where demand is still growing fast. With a presence in more than 40 countries around the world, Santander is wellplaced to help.

We know that exporters need specialist support. To that end, we develop bespoke risk, finance and liquidity management solutions for clients planning to expand overseas - whether you need to offset currency risk, or bridge the gap between exporting goods and receiving payment.

John Jackson is Group Treasurer at FTSE100-listed Weir Group, the specialist pump manufacturer. “We have a strong order book, and our main challenge is benefiting from demand growth, while maintaining quality.”

Weir is expanding into India, China and South America, where it needs highlyrated banks with an international presence. “Santander’s presence in Brazil and Chile, where there is a substantial mining market, is a big help – we are very pleased with developments there.”

These are three clients working hard to expand, but we’re working with hundreds more. If you’re looking for finance, overseas support, or simply want to understand more about our approach to building long-term, mutually beneficial relationships with our customers contact your local Business Development Director today. They’ll be happy to have an open and honest discussion about the solutions we could offer your business.

Jonathan Rostron

Mark Collings

North

London & South

jonathan.rostron@santander.co.uk or on 07850 640 600

mark.collings@santander.co.uk or on 07809 493 865

Adam Flanagan

Nicky Wilkins

Midlands & Wales

Thames Valley, Solent and South West

adam.flanagan@santander.co.uk or on 07809 493 841

nicky.wilkins@santander.co.uk or on 07850 640 622 www.santandercb.co.uk

TM OCT 11

Two themes that were frequently mentioned as key issues are building strong relationships with suppliers, and capturing potential new demand in highgrowth emerging markets. In both areas, we’re working hard to help.

relationships. “With a complex business and multiple supply chains, reliable suppliers are an important challenge for continuity.”

“

That’s why we’ve taken the time to discuss with our clients the challenges they face.

And we’ve also been talking to the EIA (Engineering Industries Association) about what manufacturers really need.

WorldSkills: to compete is a vocation From October 4-8 the ExCel centre in London was transformed.

Its vast halls became factories, maintenance workshops, beauty salons, kitchens, construction sites and design studios as WorldSkills London 2011, the Olympics of skills, pitted the brightest vocational talent from 51 nations against one another. Jane Gray reports.

Background and build-up The premise of the WorldSkills competition is to allow young people to take pride in their vocational talents and provide the opportunity for nations to benchmark how well they are supporting the development of key business and industry skills in relation to their global competitors. The event has been running for over 60 years and has a track record of making a real impact on national economies and approaches to education – following the Helsinki WorldSkills competition in 2007, Finland recorded an 8%

16

rise in enrolment onto vocational qualification courses.

The UK government has been keen to replicate and better this effect in the UK. As the need to rebalance the economy has risen to the forefront of political debate, so the need for advanced vocational skills and a rebalancing of British education values has become apparent. In recognition of this, government gave a mandate to the Edge Foundation, an independent organisation with the remit of raising the status of vocational education, to push forward a bid to host the competition.

Above: A competitor in the welding category at WorldSkills London 2011.

Team UK took a bronze medal in this event.

Opposite: L-R: Kai Burkett, Sam Andrews and Rachel Carr; all employees of BAE Systems and representatives of Team UK in the Manufacturing Team Challenge.

Hosting bids for WorldSkills work on a similar premise to those for the Olympics, and just as the 2012 bid for that renowned contest promised to create a lasting legacy for sporting excellence, so the UK bid to host WorldSkills promised that the event itself would only mark the beginning of a far broader campaign to ignite enthusiasm for vocational skills and the ability to practically apply talent. In 2006, at the close of the Melbourne WorldSkills competition, it was announced that the UK bid had been successful. For the first time in 46 years, London would welcome thousands or visitors and competitors to this unique event.

Yet despite the heritage and size of WorldSkills - it is the world’s largest vocational skills competition - it has a surprisingly low profile in many countries, the UK included. On being asked if he was satisfied with the coverage and sense of anticipation built up for WorldSkills London 2011 David Harbourne, director of policy and research for Edge and a close partner in UK campaign for WorldSkills said: “Awareness among the public and employers has been disappointing,” and this is in spite of promotional events like the ‘Have a Go’ fair at City Hall, London in March which was attended by Skills Minister John Hayes and Mayor of London, Boris Johnson.

Mr Harbourne’s impression of a rather uncommitted build up is echoed within the WorldSkills press team. While coverage from some trade publications has been consistent, mainstream press has only dabbled in communicating the scale and significance of WorldSkills. The importance of vocational talent and its potential to make or break the future economic prospects of nations did not even hit national front pages or television screens when Deputy Prime Minister, Nick Clegg led the opening ceremony for WorldSkills at the

Leadstory WorldSkills

Dignified in defeat

O

ne of the most disappointing stories for Team UK at WorldSkills 2011 was the final performance of the BAE Systems team competing in the Manufacturing Team Challenge.

Despite high hopes that the team would stake a claim on the medals table the final results showed an unexpected slither down the rankings.

On interviewing the team after the event TM learnt that this unexpected slump was not due to nervous errors - nor to being outclassed by other competitors – but rather to a freak event beyond the team’s control.

The Manufacturing Team Challenge requires competitors to pool a wide range of manufacturing skills, from metal cutting to electronics and CAD/CAM manipulation in order to produce a mini moto. Rival bikes in the competition are judged on environmental credentials, cost effectiveness, quality and performance.

Sam Andrews, a team member explains: “After completing a series of challenges for our mini moto over two days of competition we finished final maintenance work and announced the bike on the Friday evening.”

According to competition rules once a bike has been officially declared no more maintenance or repair activity can take place – a disaster for BAE who returned to the competition on Saturday morning to discover one of the bike tyres had concealed a slow puncture with the 10km endurance test still to be undertaken.

“Before the endurance test we were in silver medal position,” says Rachel Carr,

O2 Arena with a rabble rousing speech on just this theme.

In defiance of the odds With limited publicity it would not have been surprising had WorldSkills London 2011 turned out to be something of a squib.

But in the end, the event itself was a huge success. Record breaking visitor numbers (more than 200,000) attended the event halls at the ExCel which found its ample exhibition space stretched to capacity for the first time ever. The engineering and manufacturing technologies area featured prominently in this

also a team member, “but in the end the flat tyre caused our engine to burn out after just a few kilometres and we dropped six points. It’s gutting,” she concludes.

In spite of this disappointment all the BAE team members are enthusiastic about the experience of competing at WorldSkills. “I would do it again in an instant,” says Kai Burkett, the final team member. “It is really inspiring to work alongside such talented people from around the world and, although I didn’t notice at the time, it is incredible to think that Boris Johnson and the Prime Minister came by and watched us at work. To represent you country is an unbelievable experience.”

The Team UK training manager for the Manufacturing Team Challenge, Carl McKenzie-Brown speaks with pride of the team’s reaction to their disappointing finale. “It is a testament to their maturity that they have been so dignified in defeat,” he says. Furthermore, despite the disappointment Mr McKenzie-Brown, who is also early career, education and development coordinator at BAE Systems says that the competition will yet bring fortune to the young trio, “Competing against such a high calibre of international skills and meeting the requirements of this extremely demanding challenge has put this group about five years ahead of their peers in term of the breadth of their skills portfolio, including management and budgeting skills. They are, and will continue to be, a credit to the company.”

The eventual winner of the Manufacturing Team Challenge was the Japanese team and despite the twist of fate that set them back Rachel Carr is adamant that the right team got the top spot. “They were the clear winners,” she says. “Their performance was just incredible – out of a possible total of 600 points they scored 570.”

For a full account of the Team UK Manufacturing Team Challenge experience, written by the team members, go to www.themanufacturer.com

display with around 35,000m2 of floor space given over to robotics, welding, CNC milling and turning, CAD design and much more.

Sadly for the UK, while it proved to be an outstanding event host, the results of the competition show that lack of investment and support for vocational training over the past few decades has put it at a disadvantage when it comes to the ambitious development of key industrial skills. A quick glance at the medal table (see p20) shows that any assumption that Britain will remain unassailable as a location for highskilled industry, while countries

17

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Leadstory WorldSkills

like China, Indonesia and Korea simply foster low skilled, low quality, high volume production, is a dangerous complacency.

According to Matt Bell, director of CAD Skills UK and a mentor to Ryan Sheridan, one of the UK’s two bronze medal winners in the engineering and manufacturing technologies skills sets, this complacency is common. With particular relevance to computer aided design he says: “There is very low awareness about the need for CAD skills and the breadth of possible career applications both in schools and in industry.

CAD has changed dramatically in the last 5 to 10 years both in terms of the technology itself and in terms of the types of companies using it. We have not kept up in the UK.” Mr Bell’s protégé Ryan, and his employer Motherwell College are exceptions to this rule. As with the whole Team UK cohort for WorldSkills, every attention has been given to provide Ryan with the best coaching and the latest technology platforms.

He has flourished under the attention despite suffering from chronic nerves in competitive environments. Prior to winning the bronze medal at WorldSkills London 2011 Ryan was also awarded a gold medal in his category at EuroSkills 2010.

For WorldSkills’ 150 commercial partners, part of their ongoing commitment to the competition, and indeed their own core values, is to provide a support infrastructure for budding talent and to expose the industrial opportunities available to those with key engineering and manufacturing aptitude. According to Bell, Autodesk, the global CAD vendor and developer, sets itself apart from its peers with the resources it pours into education and career guidance.

Autodesk provides its latest software packages free to universities, organises school visits and has recently launched a new professional accreditation

The WorldSkills London 2011 closing ceremony at the 02 Arena, Greenwich

There is very low awareness about the need for CAD skills and the breadth of possible career applications both in schools and in industry. CAD has changed dramatically in the last 5 to 10 years and we have not kept up in the UK Matt Bell, Director, CAD Skills UK

SME challenge According to EEF figures 99% of UK manufacturing firms fall into the small and medium sized enterprise (SME) bracket and consequently this is where a large proportion of industry talent resides.

A major challenge for SkillsUK – the British subsidiary of WorldSkills - and its supporters therefore lies in engaging SMEs. Lynn Tomkins, UK operations director at Semta says, “We would like to see more SMEs enter – at the moment the competition is dominated by big multinational but this is more to do with resource than a monopoly on talent – it can be a time consuming and costly process.

We may look at finding ways to work with larger firms to give support to promising SME candidates in future.”

Mr Harbourne echoes the need for better SME representation in the engineering and manufacturing technologies categories, but is less sympathetic about the cost of supporting young stars. “SMEs in other categories have successfully found the time and resources to support their candidates,” he says.

Clarifying the business case for getting involved in WorldSkills Mr Harbourne continues, “Benefits will vary depending on the character of the company involved.

For smaller companies involvement in WorldSkills is a very effective marketing tool. It is also a unique way of improving performance across an entire workforce. The competition fires up the talent and competitors become coaches and pace setters in their daily roles.” framework for CAD users in industry in partnership with IET. In other engineering and manufacturing skills areas companies like Mori Seiki and Festo are also raising the bar for private sector support of industrial skills development. Without

their donation of equipment and expertise to the WorldSkills organisers the competition would simply not be possible.

Legacy and ambition In the aftermath of WorldSkills London 2011 Edge and sector

19

Lead story WorldSkills

Competition

Gold

Silver

Bronze

CNC Milling

Japan: Kengo Watanabe

NA

Brazil: Thiago Carvalho Principality of Liechtenstein: Sandro Ospelt

Korea: Min Gu Lee CNC Turning

Japan: Haruki Abe

NA

NA

Switzerland: Thomas Zurfluh

France: Lucas Goetschy

NA

Switzerland: Jan Zϋllig

Switzerland: Basil Brunner

NA

Korea: Sun Jic Oh Thailand: Teeranun Chopannid Construction Metal Work

Austria: Florian Salhofer

Creative Modelling Japan: Keisei Sogabe Thailand: Tanongsak Hengsawad Electronics

Brazil: Gabriel Despindula

Chinese Taipei: Yin-Ting Chang Industrial Control

Korea: Hee Jae Yoo

Japan: Yuki Okayama

Switzerland: Andrin Cavegn

Manufacturing Team Challenge

Japan: Motoki Ootake, Tomofumi Jitousono, Syogo Hayakawa

France: Audrey Weber, Jean-Baptiste Henry, Florent Devriese

Australia: Michael Theobold, Ben Hooper, Mathew Hall

Mechanical Engineering Design - CAD

Brazil: Guilherme Souza

Singapore: Ze Sheng Jonathan Tan

Switzerland: Pascal Brunner Japan: Seiya Kobayashi United Kingdom: Ryan Sheridan

Mechatronics

Brazil: Maicon Pasin, Christian Alessi

NA

Korea: Jung Mo Yang, Geun Yong No Sweden: Viktor Őhlén, Anders Wadman

Japan: Hidenori Mishina, Yaya Kawabe Mobile Robotics

Korea: Jeong Pyo Gong, Byeong Yeon Bae

Japan: Shu Ikita, Hiroki Goto

Indonesia: Deni Setiawan, Muhammad Tawakkal Gaffar

Mould making

Korea: Jun Oh Lee

Thailand: Sarawut Khaw-Ngoen

Chinese Taipei: Shao-Min Lee

Polymechanics/ Automation

Korea: Yea Chan Yu

Brazil: Rodrigo Panifer

NA

Germany : Nils Michalik Japan: Katsuhiro Iwai

Sheet Metal Technology

Korea: Yong Jae Jeon

Welding

Korea: Hyeon Woo Kim

NA

Japan: Tatsuya Matsui

Austria: Guy Brooks

Brazil: Lucas Filgueira

China: Xianfeng Pei

United Kingdom: Jake Rambaldini

Chinese Taipei: Sheng-Pin Lo

USA: Bradley Clink skills council, Semta are among those leading the way to make good on the promise of a competition legacy.

Mr Harbourne says that Edge will focus on animating the WorldSkills alumni. “Past competitors are a powerful force,” he asserts. “For the most part these individuals are just waiting to be asked to take action. If you speak with them they are hugely enthusiastic about their Worldskills experience. Edge will help to mobilise and organise this alumni. I am convinced that if

20

Medal table for the engineering and manufacturing technologies events at WorldSkills London 2011.

this community can capitalise on the strength of this year’s WoldSkills event then we will see a significant increase in the profile of vocational education.”

Edge will also be involved in putting forward suggestions for ways in which the WorldSkills competition might develop.

“We are looking for more team based competitions to be included,” says Harbourne.

“While it is brilliant to showcase the skills or one individual the fact is that, in business, no one is an island. Being able to enhance the skills of others is

another level of performance.”

As well as fulfilling their primary responsibility to drive forward UK applicants for WorldSkills, Semta are also working to develop future competition categories. This year it has fielded a new competition for Environmental Science. This has been warmly received by the administrators for WorldSkills 2013, due to be held in Leipzig, but its official inclusion in the WorldSkills portfolio will depend on the wider response of other competitor nations.

Challenge Red Tape

Red Tape C hallenge review

ed

Terry Scuoler, CEO of EEF shares his thoughts on The Red Tape Challenge, a government initiative to help cut bureaucracy in business, and gives an update on progress with reforming manufacturing regulation.

L

ike many others, I have to acknowledge I was initially sceptical about the ‘Red Tape Challenge’ and the merits of EEF getting involved. Was this a genuine exercise in which the issues that really matter to manufacturers were on the table? Or, was it little more than a PR initiative designed to dress up cleansing the statute books of redundant regulations as meaningful deregulation?

After careful thought, I decided to put EEF’s full support behind the initiative. The cost of regulation is a big issue for manufacturing and business generally. While growth is stalling, the regulations weighing down on the UK economy continue to mount up. Between 2002 and 2010, the cost to UK business of new regulations more than doubled from £5bn in 2002 to in £11.5bn 2010.

Furthermore, I took the view that industry will get out of this exercise what it puts in into it and if we don’t take this opportunity to tell the government which regulations are working

and which are not, we can’t then blame them for not addressing the issues that are hampering business growth.

On a personal level, I have taken on the role of ‘sector champion’ for manufacturing in the Red Tape Challenge. This has involved promoting the initiative and encouraging manufacturers to get involved. It has also allowed me to participate in some of the government’s internal ‘challenge’ sessions, where senior officials have to identify which regulations they believe can be scrapped and justify all of those that they propose should be kept.

At an organisational level, EEF has worked hard to engage with our members and get their views on red tape. We have spoken to hundreds of companies to find out what the most important issues are for them.

This has yielded a wealth of information on how regulation is impacting on manufacturing companies in a wide range of areas, from environmental rules and health safety to the administration of business taxes and company reporting.

A key area of concern is employment law, where manufacturers feel that a host of domestic and European regulations create unnecessary costs and have unintended consequences which make a running a business increasingly difficult at a very challenging time.

Examples include the abolition of the Default Retirement Age which acts as a major barrier to succession planning, an employment tribunal system that promotes vexatious claims, unnecessarily burdensome collective redundancy rules and the well-intentioned ‘Fit Note’ system that too often still leaves employers in the dark as to what activities I took employees returning from illness are fit to undertake. th what it put e view tha Concerns in other areas include the s t of thi s exe in into it I industry w export licensing process, rcise t i o l l get ok th what o e u v which for too t ie it put o s in in w that in f this exe dustr rcise many to it y

will g et

companies takes too long and is too opaque, and waste packaging regulations that can impose an administrative burden disproportionate to the environmental gain.

EEF’s backing for the Red Tape Challenge however, is not unconditional. In return for promoting the initiative, we expect manufacturers’ views to be taken seriously and for the government to deliver substantive reforms that make it measurably easier to do business.

So, has my experience of the process so far vindicated the decision to get involved? While the final judgement will have to wait until the exercise is complete some time next year, there are some promising signs.

The government has put significant resource behind the Red Tape Challenge.

Those involved, right up to and including the ministers in charge, are taking the exercise extremely seriously.

From the private meetings I attended I can assure business leaders that officials defending regulations have been subject to robust challenge and there has been a genuine desire to ease the burden of regulation wherever possible.

A number of important tests for government however, will shortly have to be addressed in areas such as employment law, health and safety and environmental regulation where the interpretation of EU Directives and commitments made as part of the Coalition Agreement will have to be dealt with meaningfully if the Red Tape Challenge is to be successful.

out

21

Researched and Delivered by:

Sponsored by:

Visual Management to Transformational Leadership

30 Nov – 1 Dec 2011 Ambassadors Hotel, Bloomsbury, London, WC1H 0HX

This two day seminar is designed to support your individual lean journey. It includes a comprehensive introduction to the visual workplace and to best practice regarding the behaviour, knowledge and skills needed to direct a true lean and sustainable business transformation.

The schedule for This evenT is: day 1, 30 november 2011 09:00 – 17:00 Visual Management Seminar – you can’t Get To excellence Without it Dr Gwendolyn Galsworth, president & founder, QMI/Visual-Lean Institute Join Gwendolyn Galsworth, leading visual expert and award-winning author, for a comprehensive introduction to visual workplace principles and practice.

comments from previous lmJ seminars:

“Excellent, thought provoking day”

day 2, 1sT december, 09:00 – 16:00: LMJ Seminar – Transformational leadership

Operations director, Weir Valves & Controls UK Ltd

Six inspiring case studies including Rexam, Pattonair, Citibank and FLSmith

“Best lean conference I have attended” Continuous Improvement manager, BAE Systems

Jon Alder

Group head of Lean Enterprise, Rexam PLC understanding your dna - a decade of lean Transformation

Day two’s case studies and discussion groups has been created to satisfy the need for enterprise leaders and senior champions of business transformation to think beyond the archetypes of their roles and sectors.

Bo Steffensen

Chief Lean officer, FLSmidth changing employees from fire fighters to Gardeners

Phil Brown

Business Excellence manager, Pattonair are we ready to start? laying the foundations for adoption of continuous improvement

Sofie Blakstad

Senior Vice President Operations and Technology ReEngineering, Citibank People approach to business Process re-engineering

Full speaker details can be found at www.leanmj.com/seminar

Specialfeature MAStering SME challenges MAStering SME challenges

Key information about MAS

Jane Gray recounts the debate among manufacturers at a recent industry forum. As supply chain and product diversification discussions come to the fore, peer to peer communication highlights the problems faced by manufacturing SMEs in making the necessary maturity leaps for growth.

W

orking in industry press it can seem sometimes as though the frequent advice doled out to companies by consultants, trade bodies and other interested parties has become cliché with buzz words obscuring the reality of business.

The need for focus on innovation and collaboration in manufacturing might easily come under this head. It is easy enough to identify the need but what do these words mean to businesses in practice and is it easy to change current approaches to them?

These were the topics discussed by a small group of manufacturers at a recent roundtable forum hosted by The Manufacturer in conjunction with the Manufacturing Advisory Service (MAS).

Attendees came from a range of sectors including industrial

equipment, medical devices, construction equipment, bicycle manufacture and more. All attendant companies were SME organisations and their representatives at this event held a common interest in sharing their experiences in forming product development strategies and building better relationships within their supply chains.

Product and market diversification Conversation began with a focus on product development and diversification and it quickly became clear that the idea that it is standard for manufacturers to have a clearly defined strategy in this area is flawed. Most attendees described reactive or ad hoc systems for product development. Customer demand was a key driving force though systems for gathering coherent feedback from customers were

The Manufacturing Advisory Service is a government funded organisation aimed at helping small and medium sized businesses in the manufacturing sector grow and improve.

MAS provides access to consultancy services which many SME organisations could not afford from similarly experienced commercial consulting companies.

The initial services of MAS consultants are FREE. All MAS practitioners have hands-on experience of both shop floor work and management in manufacturing companies.

Since 2002 MAS has worked with thousands of manufacturing firms across England and Wales.

According to MAS data the organisation has helped to generate £546m in added value for client firms. It has carried out more than 24,800 free on-site diagnostic reviews and more than 8,400 in depth consultancy projects.

See p4 for news on how MAS has recently restructured.

unclear and it was by no means the first factor to be raised.

For Richard Whitehead, assurance director at Collis Engineering the challenge of heavy regulation in the rail sector was the strongest influence in his organisation’s decision to diversify into lighting for hazardous areas including shipping. This was a concern to fellow attendee John Sizer, logistics manager at Milton Keynes-based Nifty Lift since his company have just chosen to expand into the rail market.

Following the main debate Mr Sizer admitted some doubts over the market research and capability analysis that had gone into this decision. “At the moment we are trying to manage our market diversification internally in order to meet the more demanding regulatory requirements of the rail industry, but it is sucking up more

23

MAStering SME challenges

engineering resource than we had anticipated. The company knows where it wants to go but the steps to getting there are grey.” He continued, “We still have a small company mentality in some areas that this is something we can manage without taking someone extra on but I think the realisation that we need expertise and proper processes in place will come soon.”

Such doubts can hardly be uncommon since in addition to reactive product development journeys, most companies had little product development resource.

Mr Whitehead commented: “We used to have one technical manger working on his own as our ‘development team’.”

According to Patrick McLaughlin, head of the Manufacturing Management Centre at Cranfield University it is not uncommon for smaller companies, where a handful of staff have multiple responsibilities to underestimate the compliance and regulatory implications of changing or expanding markets as they search for security or growth. He also raised the issue of supply chain disruption that comes with market diversification or product development.

Supply chain

I have seen large companies asking much smaller suppliers to become compliant with ISO 9000, 140001 and even 18000 – the health and safety standard.

This trend is only going to continue to grow Patrick McLaughlin, head of the Manufacturing Management Centre at Cranfield University

Image Mark Knowlton, supply chain specailist, MAS

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Just as regulatory compliance and resource seemed to dominate discussion around product development at this event, so the need for certification and this represents was a strong theme as supply chain issues came to the fore.

The burden of certification was a sensitive subject with Simon Waller, factory manager at Silent Gliss, a small but growing manufacturer for the construction industry. Mr Waller’s account of the pressure his company found itself under to adhere to IS014001, after enquiries from a key customer highlighted the panic that demand for accreditation can induce in small firms unsure of their compliance requirements.

IS014001 can typically cost a company £5,000 to £10,000.

Identifying accreditation as primarily a business to business concern, rather than a business to consumer trend, Mr Waller anticipated that he would soon have to push down the supply chain for support of his own compliance. He foresaw that very small companies would run into trouble with no knowledge of where to turn for support or advice. Mr McLaughlin corroborated that it was not uncommon to find small companies coming under this kind of pressure and scrutiny.

“I have seen large companies asking much smaller suppliers to become compliant with ISO 9000, 14001 and even 18000 – the health and safety standard.

This trend is only going to continue to grow,” he concluded.

Despite the challenges however, it was clearly expressed by all attendees that they were willing to become compliant where necessary and to seek continuous improvement regardless of regulatory requirement. The key in optimising improvement to focus on areas of greatest impact was agreed by all to be strong communication both up and down supply chains.

This means visiting suppliers and

engaging in their waste reduction activities as well as opening doors to customers for their input into what changes would be of most help to them.

It was acknowledged that there is a culture of fear to handle when embarking on this kind of relationship and some felt that they were not in a position to suggest such a process.

Nevertheless everyone supported the idea of openness and gaining new eyes in the battle to reduce waste and increase efficiency.

Mark Knowlton, a supply chain specialist at MAS, was keen to point out that involving a third party – like MAS – can help to break the ice in such discussions. MAS has recently helped a group of its existing clients to do just this. “In my area of MAS, in the south east, we have a best practice network of around 130 companies we have been working with for some time,” Mr Knowlton explained.

“This group meets regularly to discuss the issues their companies are facing. Last year a group of companies from within this network came to us and said that although the network was helping them, they were increasingly noticing that their suppliers were not meeting their new standards.”

MAS went on to identify a prime group of suppliers and invited them to a series of sessions focusing on business improvement techniques and workshops for value stream mapping. The customer companies were also present at these sessions and the feedback about the value-added and the quality of the facilitation by MAS has been extremely positive.

“It’s amazing how the waste occurring across company boundaries became obvious,” said Knowlton.

This article can only provide a snapshot of the discussion, knowledge sharing and advice which took place at the roundtable discussion last month but for more insight into how MAS can help manufacturers visit: www.mas.bis.gov.uk

EMC2, EMC, and the EMC logo are registered trademarks or trademarks of EMC Corporation in the United States and other countries. All other trademarks used herein are the property of their respective owners. Š Copyright 2011 EMC Corporation. All rights reserved. Published in the USA. 03/11 H8648

Energy & Sustainable Manufacturing

Bringing power

T

he annual npower Business Energy Index (nBEI) canvasses the opinions of businesses on energy-related issues. With the manufacturing industry destined to play a big part in helping to achieve the Government’s national target of an 80% reduction in carbon emissions by 2050, its approach to energy procurement and management is one of growing importance.

The number one threat highlighted by respondents from major energy users (MEUs) was energy risk and, in particular, the risks associated with supply and costs. Energy outweighed all other more traditional business risks including legislation, security and health and safety. With such importance being attached to it, it is clear energy needs to be taken seriously at every level of an organisation.

Security of supply and the cost of energy are also set to remain at the forefront of business concerns for the foreseeable future. Businesses predicted that supply and cost risk would still be the major energy-related concern in five years time - continuing to rank higher than areas such as energy sources, legislative compliance and associated CO2 emissions.

Energy risk is growing in importance, with 44% of MEUs saying it has gained a higher profile within their organisation over the past three years. The increased awareness of energy risk has brought about encouraging changes in how organisations are managing energy. Eighty one per cent stated it had led to improved monitoring and reporting, and 85% said it had led to improved energy efficiency results. To support this move, 63% of MEUs questioned

npower’s latest annual energy report sees energy risk highlighted as the primary business threat. But for manufacturers looking to protect themselves against the anticipated risks posed by security of supply, a number of questions with regard to power self generation and demand management technologies remain – including who should pay for them? Wayne Mitchell, interim industrial and commercial markets director at npower, looks at what the index unearthed. said they now employ a person specifically responsible for energy purchasing and 14% of these are board members.

With significant operational risks concerning costs and supply, we should expect to see this number increase as time goes by.

However, one in six MEUs admits to having no strategy to manage energy risk at all.

It appears that for some UK businesses, energy concerns have yet to be turned into a strategically-driven response. We would encourage organisations to implement an energy risk

Businesses predicted that supply and cost risk would still be the major energyrelated concern in five years time - continuing to rank higher than areas such as energy sources, legislative compliance and associated CO2 emissions.

management strategy as soon as possible to ensure they have maximum protection.

Businesses can offset some of the risks associated with long-term energy supply and cost by implementing self generation technology, for example, solar panels or combined heat and power (CHP) and utilising demand management tools. The nBEI looked at this area for the first time this year as we wanted to understand how businesses were using the technology available as part of their energy management plans.

With 39% of MEUs and 61% of SMEs admitting to having no current self generation capability, it is clear that such moves to protect the future position of the organisation are not yet common place. MEUs keen to protect themselves from the energy risks outlined in this year’s nBEI will need to seriously consider investigating the options for self generation technologies and demand management tools - to shield themselves from the energy challenges of the future.

27

EEFInsight Corporate Responsibility

for sustainable growth With increasing pressure to meet customer requirements, skill shortages and spiralling raw material and energy costs, should manufacturers be investing valuable time implementing Corporate Responsibility or is it superfluous to business needs? Greg Roberts, senior environmental advisor at EEF, explains that these pressures are the very reasons why CR is indispensible to the modern manufacturer’s business strategy.

Obtain and Retain Strong customer relationships are the key to long term growth.

Addressing CR is paramount to obtaining and retaining customers. Speaking to manufacturers, it is clear that they are increasingly being asked more CR related questions when tendering for new contracts, but also that existing customers are increasingly adding social and environmental criteria to supplier audits.

Even if these questions are being answered adequately, manufacturing firms are missing a trick if they are not thinking about CR more strategically.

Adopting strategic principles for CR allows a company to stop being reactive, and to start being proactive, anticipating customer needs and aligning with their customers strategic direction.

Clearly one of the most powerful functions of CR is the ability to anticipate requirements and demonstrate to customers that you are serious about the long term relationship and working together to meet their objectives.

Adopting a strategic approach to CR provides a framework that will help you determine what’s important for your organisation

Prioritise and Recognise It is crucial to distinguish between what’s important and what’s not.

From our experience it is apparent that manufacturers have already undertaken some great environmental and social

28

Have your say at www.themanufacturer.com

initiatives. Just think of your own organisation. How much voluntary and charitable work is undertaken and how much waste do you now recycle?

Maybe you do a great deal, but often these endeavours are not necessarily being recognised within and outside the company because their ad hoc nature make them hard to measure and report on.

Adopting a strategic approach to CR provides a framework that will help you determine what’s important for your organisation.

Whether the emphasis is on increasing orders, innovation, improving skills or reducing material resources and energy costs, a company needs to be clear what is a priority and, just as importantly, what is not.

Once priorities are established, targets can be set and progress monitored.

Your achievements can then be communicated to your shareholders, customers, staff and other key stakeholders, ensuring that your achievements are recognised and that the business benefits are realised.

How to start?

Many manufacturers have not invested in CR because they don’t know where to start. It’s often seen as a nebulous subject, with uncertain or intangible business benefits.

Graham Sprigg, managing director of IMS Consulting, a

firm specialising in corporate responsibility and sustainability strategy and communications, gives this simple advice on how to get started.

“Stakeholder engagement is the key to successful CR. By engaging stakeholders on key issues and assessing how important these issues are to sustaining and growing the business, organisations are able to develop strategic priorities and align them with business growth.”

He continues, “By defining clear objectives and targets, they can invest in the right areas, anticipate change, for example, in regulations or industry standards, and communicate their achievements back to their stakeholders whether customers, staff, shareholders, supply chain or local communities.”

Mr Sprigg concludes, “Effective engagement needs to be properly planned and implemented. It begins with understanding who your stakeholders are and asking them the right questions. It’s also about informing them of progress and achievement on the issues in which they’re most interested, in the most cost effective and efficient manner.”

EEF wants to help manufacturers start on the process to implementing CR, and will be running workshops entitled Engaging in Corporate Responsibility, starting in Bristol on the 29th November.

For further information please go to: www.eef.org.uk/events or email: groberts@eef.org.uk

Energy & Sustainable Manufacturing

Supply chain

by numbers Piles of inventory distributed throughout the supply chain are more than just piles of capital.

They are also piles of carbon and water. Modern mathematics now provide a new level of certainty in an uncertain world by sensing demand, allowing companies to shed excess inventories and pave the way to a sustainable supply chain. Robert Byrne, CEO of Terra Technology, explains how.

T

he scale is staggering.

Global inventory has an enormous footprint of six Giga tonnes carbon and 1.6 trillion cubic metres of water.

As a comparison, DHL reported that their carbon footprint ranged from 1 to 2.5 Mega tonnes of carbon (depending on whether contractors are included). This puts inventory somewhere between 2,500 and 6,000 times the carbon footprint of DHL’s global operations (See TM August for a case study on DHL’s sustainable logistics solutions).

Supply chain professionals see inventory every day in terms of finance and service levels, but it remains hidden in plain sight from a sustainability perspective.

A more complete definition of inventory includes the capital, carbon and water footprints of all products, whether they are seen to be green, toxic or somewhere in between.

What makes cutting excess inventory especially compelling is that its carbon and water savings extend beyond factory walls to transcend the value chain. In the Reduce Reuse Recycle programme endorsed by many government organisations including the US Environmental Protection Agency, “reducing” naturally has the biggest impact

since it eliminates the need to build unnecessary product in the first place. This cuts the direct manufacturing footprint as well as the upstream footprints (raw materials and packaging) and the downstream footprints (distribution and disposal).

The result is a significant sustainability lifecycle multiplier for consumer goods manufacturers.

Unilever’s 2009 sustainability report, for instance, included a Lifecycle Analysis (LCA) of their global business in which the lifecycle multiplier for raw materials, packaging and distribution is 12 times that of direct operations for both carbon and water use. The maths of cutting inventory is simple.

Using this example, reducing inventories by 10 days through better forecasts or other means: Results in 10 days ÷ 365 days per year × LCA multiplier of 12 This equals the equivalent of a one-time 33% reduction in the direct operations footprints in carbon and water use. That is the same as shutting off global operations for four months of the year.

Many inventory decisions are driven by demand uncertainty

Many inventory decisions are driven by demand uncertainty and fuelled by market volatility

and fuelled by market volatility.

While the forces behind market volatility are beyond the reach of any one company, its effects can be controlled. By sensing and reacting to real-time demand changes, leading manufacturers are cutting demand uncertainty by 40% or more using a new breed of modern mathematics designed to make sense of big data to provide a new level of demand certainty in an increasingly volatile world.

Through better forecasts, manufacturers are confidently cutting unnecessary stocks to lighten their inventory footprints for all products across the value chain. While there are no silver bullets, controlling the effect of volatility by sensing and reacting to demand may be the single most important contribution to build a sustainable supply chain and exceed corporate carbon and water goals.

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standard Setting the

Sustainable materials supply has become an increasingly important issue for UK manufacturers because of volatile commodity prices and increased global competition. Ben Sheridan, sector content manager at the British Standards Institution, asks if we are doing enough to ensure that the UK manufacturing industry is properly managing the risks to their materials supply.

Headache A major problem for many manufacturers, particularly Original Equipment Manufacturers (OEMs) is the worry that their materials supply could be disrupted. This disruption could emerge for a variety of reasons, including increased global competition for resources, market speculation leading to volatile prices and overseas governments acting to preserve domestic supplies through export bans.

This headache is amplified by the complex nature of the supply chains for materials and parts

30

that OEMs command. These supply chains are difficult to manage, and each participant generates complex engineering information that has to be retained, archived, made securely available and communicated at some future point.

This complexity is further exacerbated by an increasing pressure from environmental legislation, as well as enhanced expectations surrounding their Corporate and Social Responsibilities (CSR) from major stakeholders such as customers, shareholders, employees and local communities.

Many manufacturers place significant importance on gaining regulatory approval for a particular design and face great costs if they deviate from this specification. Therefore, it is vitally important that a sustainable supply chain of materials is identified and managed at the earliest possible stage.

The solution lies in the supply chain There are no easy solutions to this complex problem, but there are a number of areas where a company can take action

Specialfeature Setting the standard

to highlight any potential risks before they mature to manage and mitigate any risks that may still emerge. This requires action at the design stage, and during the time the supply chain is in operation. Such approaches, however, will not work if the company operates in isolation from its supply chain. For all participants in the supply chain to be able to co-operate on such an important issue a standardised approach is required.

BSI is the UK’s National Standards Body and is responsible for the development and publication of national, European and international standards for the national benefit.

Recently, BSI has been working with UK industry to develop standards that, if properly applied throughout manufacturing supply chains, can act to help solve the problems relating to the sustainable supply of materials.

BSI has a range of standards that could help in this area and this article concentrates on three in particular, two that are of most benefit at the design stage and a third that can help once the supply chain is up and running.

Sustainable engineering design The engineer responsible for the design of a product can improve the sustainability in at least two ways. These are: By choosing a material that is fit for purpose and with a supply risk that is within acceptable limits; and By designing into the product the ability to be disassembled and the constituent parts remanufactured in some way, either through reuse, reconditioning or recycling.

There are at least 2 standards that can help with this. These are: BS 8905 Framework for the assessment of the sustainable use of materials; and BS 8887 Design for manufacture, assembly, disassembly and end-of-life processing (MADE).

BS 8905.

Recently, BSI has been working with UK industry to develop standards that, if properly applied throughout manufacturing supply chains, can act to help solve the problems relating to the sustainable supply of materials Ben Sheridan, sector content manager, British Standards Institution

A common misconception about sustainability is that only environmental issues are relevant. In fact, a wide range of social and economic factors, as well as environmental ones, can render a particular materials choice as unsustainable.

Sustainable development is defined in BS 8900:2006 Guidance for managing sustainable development as “an enduring, balanced approach to economic activity, environmental responsibility and social progress”. BS 8905 builds on the principles enshrined in BS 8900 and uses them to define a framework within which it is possible to perform a full Sustainability Assessment (SA) on the materials choices available to the engineer.

The SA is applicable to materials of all classes being used in all market sectors at all stages within the supply chains. The assessment looks at all stages of the lifecycle and takes into account sourcing of the material, processing of the material, the use of the material and the fate of the material at the end of the product’s useful working life.

An important aspect of BS 8905 is the setting of priorities for the SA. This is done partly through consultation with important internal and external stakeholders who are likely to be affected by the decision about the choice of materials. This prevents the SA being unduly influenced by short term commercial considerations and ensures the range of issues addressed is as broad as necessary.

BS 8887.

BSI has published, and is continuing to develop a series of standards that aim to give designers recommendations on how best to incorporate into their design documentation guidance on the ultimate reuse, recovery, recycling and disposal of the components and materials used. A number of specific

end-of-life processes have already been covered in the BS 8887 series and this is likely to continue to expand to cover a wider range of scenarios.

By using BS 8887 in the most effective way, a design engineer can help set up ‘closed loop’ systems that allow the re-entry of materials back into the supply chains, thus reducing the risk of supply disruption.

Sustainable management of supply chains Of course, once a design specifies the use of a certain range of materials, no further choice can be made. It is important, therefore, that the supply chains work together in such a way that ensures the procurement of the materials is done in the most sustainable way possible, thus mitigating risks to the supply.

BS 8903:2010 - Principles and framework for procuring sustainably gives recommendations and guidance that supply chains can adopt and target towards materials supply. By following the guidance outlined in this standard, OEMs and their suppliers can embed common principles of sustainable procurement throughout their network and develop common metrics to ensure their procurement activity is effective and sustainable.

Ben Sheridan, Sector Content Manager at BSI To understand more about sustainable procurement, please visit www.bsigroup.com/bs8903 The need to certify and accredit best practice procedures is growing.

According to Patrick McLaughlin of Cranfield University there is a strong business to business trend or large organisations to push for accreditation among their suppliers – see his comments in the article on p23 for more.

Have your say at www.themanufacturer.com

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Thinking correctly under pressure

Tough choices achieving operational excellence

O

lympic athletes focus on excelling for a particular period of time - a week, a day, or 9.8 seconds. There is enormous pressure whilst they compete, sometimes denying them the very time to think.

It becomes instinct - but only because they have trained for all eventualities. The focus, the routines... they are all prepared.

Then they can relax, safe in the knowledge that they did everything they could.

In business we don’t have the luxury to relax. The competition doesn’t stop performing at the end of the week. Achieving operational excellence has been described as being like refurbishing an Airbus A380 while flying at 30,000 feet. How can you deal with that pressure? In business we have to prepare whilst we compete. If people and organisations are not prepared for these pressures then they under-perform, like athletes who don’t quite make the grade.

To help you prepare for this pressure here are five important, tough, re-occurring choices that need to be made to achieve operational excellence.

ONE: What do we want to achieve in our operational excellence journey?

What is our goal? What is our currently targeted end result?

32

We have to ensure the whole organisation understands the goal we are aiming to achieve, so all the resources can get aligned behind this common purpose.

A manufacturing supplier to the rail industry had a cycle time from components to finished product of 80 days. Over five years this has been reduced to eight days. They have removed waste throughout the process and re-thought their approach to design, engineering and supply chain management. Yet they started with a goal. Their target is now five days. Unthinkable from where they were five years ago.

TWO: How will we engage and sustain the involvement of the leadership team?

Engaging with the leadership team on a successful transformation journey requires an enormous amount of trust and

respect. Trust that people can do what they say they can do and respect for how they go about it. This trust and respect allows people to believe.

The leadership team should know what motivates the individuals they rely on to help the team succeed. Otherwise how will you know the best way to help them or vice versa?

The CEO of a telecoms organisation planning a £1bn acquisition had established a senior team that was a who’s who from the previous companies he had worked with.

These people trust, respect and believe in him and will follow him. They have all experienced success in their own right, they are all aligned on how they are going to change the business model. They are all in there for the long haul because they trust, respect and believe in one another.

RESULTS INCREASING FOCUS ON MANAGEMENT

ACTIVITIES

BEHAVIOURS, ATTITUDES SKILLS AND KNOWLEDGE

INCREASING FOCUS ON LEADERSHIP

Specialfeature Kepner-Tregoe

THREE: How will we scope the business process value stream and what are our priorities?

Prioritisation is not a new phenomenon. We all get it. Do the things that have the biggest impact on the business, don’t just focus on those things which are urgent today.

It is not difficult if you are an automotive electronic component supplier who was spending more than €1m on premium air freight to realise that something is not working perfectly. To remove this symptom of poor performance there has to be an understanding of what the contributing factors and the causes actually are.

Providing a focus and scope for a business process value stream analysis is imperative. Know your boundaries, the end result and the inputs. You have to start with these points before working out how things get done and at what cost.

FOUR: How effectively will we measure success?

We work with the agricultural division of a large company in Africa. They understand that the measurement of business results, while important, is not the only measure of change.

Results may not come for a considerable amount of time.

Therefore identifying leading indicators of change becomes of primary importance. With each change project they undertake stakeholder assessments every month to understand if the behaviours of their project team members are appropriate - to role model the changes they are championing. This simple model, on the left, sums it up very nicely.

To lead effective change, focus your measurements of success on behaviours, attitudes, skills and knowledge which directly support the activities you know directly support the results of the business. If all we do is manage the results, it is very difficult to correct or coach the underlying behaviours, attitudes, skills and

knowledge when we don’t get the results we are looking for.

FIVE: What cultural behaviours do we need to build and sustain so that every day is our best day?

These cultural behaviours need to be tightly aligned to the declared strategic imperatives for the company.

Kepner-Tregoe worked with a specialist printing ink manufacturer. While they had just been a supplier of screen ink, variability in product quality could be tolerated as the screen ink process allowed for plenty of human intervention. However, there is no such luxury with digital ink – the future of the business. The quality of the ink had to be consistently excellent.

This required a complete cultural shift in the design and manufacturing processes - a 100% right first time philosophy.

Structured, disciplined quality procedures were defined and deployed throughout the business. If things weren’t done

right there was the prospect of machine users seeking compensation for damage done.

So what was the end result?

The behaviours also became part of the way of doing work in making screen inks with associated efficiency and through-put benefits.

In conclusion: If we don’t do the right things in the right way when there is no pressure, how can we expect people to do the right thing when the pressure is really on?

Effective, decisive action is always preceded by clear thinking. However, clear thinking is a skill that needs to be refined, coached and practiced in an everyday environment - ready for the time when people are under that immense pressure, when time is short and with little opportunity to react.

Talented Olympic athletes look for specific coaching even at the top of their game.

How well are you and your team prepared to think under pressure? Think quickly.

Martin Wing is the European Regional Managing Director for International Process Improvement Consultancy, Kepner-Tregoe.

Copyright ©2011 Kepner-Tregoe, Inc. All rights reserved.

For a discussion on how Kepner-Tregoe can help improve project management within your organisation: Tel: 01628 58 78 75 Email: european.enquiries@kepner-tregoe.com Web: www.kepner-tregoe.com Linked in profile: http://uk.linkedin.com/in/martinwingkt

www.kepner-tregoe.com

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W

hen it comes to providing work opportunities for young people, Christine Gaskell wears her heart on her sleeve. Joining Bentley Motors in 1996 from Leyland DAF, she soon became a member of the board for personnel – a sign of the famous car brand’s devotion to its staff.

Her numerous extra-work positions include being an ambassador for the National Apprenticeship Service (NAS) in the North West, non-executive chairman of the training company Total People – one of largest work-based learning providers in the North West – and this year she was appointed chairman of the Cheshire and Warrington Local Economic Partnership. Her understanding of the skills needs, delivery mechanisms and HR issues for manufacturing in the automotive industry, and across industry in north-west England, is probably unmatched.

34

On a mission

People power: Christine Gaskell with colleagues at Bentley which plans to double its annual apprentice intake next year.

We are definitely a viable alternative to university: you do your degree, you’re being paid, you haven’t got the debt and you’ve got a job

to make it easier With apprenticeships, as with other business support, small companies can feel left out in the cold. But Bentley’s personnel director Christine Gaskell, an expert on the interface between education and industry, says that help is at hand for smaller firms if government, the National Apprentice Service and industry can make it easier for companies to take apprentices on.

TM spoke to Christine Gaskell about Bentley’s human resources regime, her work as an Apprentice Ambassador and one of her key ambitions: to make apprenticeships more accessible to small and mediumsized businesses.

What is the Apprenticeship Ambassadors Network?

Sir Roy Gardner was asked by [ex-Prime Minister] Gordon Brown if he could get key employers

in the apprenticeship agenda together, to create a dialogue where we could interact at senior level with government about how to promote apprenticeships. I am a founding member. It’s mainly represented by chief executives, and we get good showing from ministers. We take messages back into our businesses, and report back firsthand on what we think is important.

If the whole skills agenda is to be employer-led, which it

Interview Christine Gaskell Bentley Motors

should be, this is a great way for us to influence the policy decision making.

Is it working?

Yes. We wanted a one-stop shop for apprenticeships, and NAS is very much the result of the lobbying we did. It explains what apprentices are, has helped to standardise qualifications and we have got the ear of ministers.

The UK apprentice agenda was pushed a long time before the [2008/9] recession. It was about business continuity to promote economic growth, not a response to recession.

What is the Bentley Academy?

When I joined Bentley, lots of companies such as Ford and British Leyland were providing training. But there was a sense that, as long as you were doing some kind of training or learning, that was enough. Funding could be spent on anything, from flower arranging to building dry stone walls.

We decided to focus on providing the skills that this business needed and came up with the Academy. The idea is that people feel good about learning, in a context suitable to us – that means technical skills, IT skills, language training, more graduates.

We now offer a plethora of training opportunities at all levels, from numeracy and literacy skills to degrees. The numbers are so big now we have a company awards night, this year held at Manchester University. It is about us being aspirational. It makes people here feel really good about the qualifications they’ve attained but also it makes it very attractive to encourage young people to work for us.

But Bentley hardly needs to attract people.

We’re the biggest employer in South Cheshire. Of course we’re a well-known company. Applications for our apprenticeships, across all departments, were up 300% this year.

The trick we’re missing [in the UK] is producing young people who are work ready. Too often young people come into companies like ours and we have to basically start from scratch.

And it’s often the softer skills

Other organisations also offer both information and apprenticeships. The skills provision market in the UK is still convoluted – what’s being done?

It’s one of biggest issues we have: if we’re going to encourage more apprenticeships in the UK for smaller organisations, we have to get rid of some bureaucracy. That’s why we have NAS. I have a whole team of people devoted to working out how you get through the [skills provision] bureaucracy, but we have 4,000 people. Small companies just haven’t got the resources.

Is NAS working?

NAS has made a huge difference.

The big challenge is how you get small companies to realise that someone from NAS can visit them and consult on the type of apprentice they need in their business. That it’s not just for large companies. A lot of

people still think that apprentices only apply in this industry [manufacturing]. There are over 168 frameworks, and if there isn’t a framework they’ll design one for you.

Bentley clearly does a lot to engage with young people.

But is it easier for you than an SME? Nearly every week we’re doing something for a school, college or group of young people, if you include our apprentices visiting local schools. We work from primary school level, we have open days for local teachers and headmasters. We offer over 175 work experience weeks for young people at Bentley every year, then there are summer placements and bursaries, with many graduates and young people working on placements all year round.

I judge micro companies in the Apprentice of the Year award. Some companies who

Image of the Bentley production line entered into the 2010 EEF photography competition to depict the spirit of modern UK manufacturing.

35

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Interview Christine Gaskell

employ just four people are still taking apprentices on and doing it exceptionally well. We [NAS] need to show examples of where excellent apprentice schemes are in place, and well embedded, at SMEs, to prove that you don’t need to be a Bentley. You also don’t need to talk to people like me, the best endorsement for apprentices are the apprentices themselves. One of the problems is that there is still a gulf between what the education systems thinks we are and the reality.

Biography Christine Gaskell 1980:

Graduates from University of York with a BA in English

1980:

Joins Leyland DAF as graduate trainee in personnel

1989:

Takes responsibility for the vehicle assembly plant; in 1990, for the truck and van product development

1993:

Human Resources Manager, Manufacturing, Fisons Pharmaceuticals

1995:

Joins Bentley Motors. Soon after joins the board.

Responsibility for nearly 4,000 employees worldwide, including all recruitment, training and development. Heavily involved in Bentley’s community based programmes

Other positions: Ambassador for the National Apprenticeship Service in the North West.

2010 – Appointed as Chairman of the Cheshire and Warrington Local Economic Partnership Board member of Business Link North West Chairman of the Trustees of the £650m Rolls-Royce and Bentley Motors Pension Fund.

Fellow of the Chartered Institute of Personnel and Development (FCIPD) Member of the VW European and Global Works Council Non-exec chairman of Total People – offers about 4,000 apprenticeships in the North West, from hair dressing to engineering Christine is a member of BEN, The Motor & Allied Trades Benevolent Fund, and is involved with two orchestras. She is married and lives in Manchester.

So what about reaching teachers and parents?

We’re trying. We began offering Level 4 apprenticeships this year. Most of the Level 3 apprentices on junior engineering programmes go on to do degrees, Level 4s take degrees from the start. We are definitely a viable alternative to university: you take your degree, you’re being paid, you haven’t got the debt and you’ve got a job.

The big issue is preparing kids for work. Schools and colleges need to do a lot more to help young people acquire the soft skills that business needs – motivation, timeliness, politeness, phone manner. They can’t just assume that these are innate skills – they are not.

Are weak core school subjects also a problem?

Yes. That’s why we’re going to primary schools and stressing the importance of these subjects.

Too many schools give young people choice in subjects, but they don’t realise they’re taking choice [for employment] away.

Children get to 16, they decide they’d like to work in a company like ours but they don’t have the subjects to be able to do that.

Are teachers getting it? Some companies say they cannot get schools to visit them and there is an insurance cost to front.

Both sides need to work far harder. It would be completely wrong to say it’s the education system’s fault and equally wrong

to say industry is not articulating what it needs. We need common sense. People like us need to spend more time in schools and colleges and vice versa, rather than being two separate worlds.

What about the cost involved?

I really don’t recognise it. We have an awful lot of young people inside our business today, and insurance has never been raised as an issue. There are a lot of urban myths around.

There is a problem for SMEs in that they train an apprentice only for them to be poached by a large OEM. I hear lots of these stories and yet figures show the apprentice retention rate, even with small companies, is very high. Yes three, four or five years down the road these apprentices might move on. But often the payback for apprentice training is 1-2 years. Also it’s not just about money, it’s about training opportunities. There are several things that you can do – help them get qualifications, a more stimulating job, show them their career progression, how to be a team leader and manager. I think it [poaching] is quite often an excuse.

How did Bentley’s HR strategy cope with the recession?

From 2007-2009 we went through a really tough time. We took the opportunity to upskill much of the workforce. We put over 700 people through various NVQ and BIT programmes.

It enabled us to both retain and improve skills. We also ringfenced our apprentice and graduate programmes, and recruited more in those years than 2006/7 when we made over 10,000 cars.

Too many companies switch training on and off like a tap, but it takes three to four years to train an apprentice. I acknowledge that we were fortunate to be able to do this with help from our parent, VW Group, who could not have been more supportive.

Have your say at www.themanufacturer.com

37

A business’ data is its most valuable asset - so make sure you protect it, says Malcolm Wheatley.

D

isasters happen. Fires, floods, earthquakes, terrorist attacks - the range of potential threats is wideranging. And when disaster does strike, it’s crucial that businesses have protected their most valuable asset. Which is, quite simply, their data. Offices, machine tools, production lines these can be replaced. But data can’t.

And the word from insolvency experts and forensic specialists is clear. When a business that is subject to disaster incurs significant data loss, its viability is severely compromised. Many never recover and, sooner or later, fail.

But it doesn’t have to be that way, says Stephen Manley, chief technology officer of data storage specialist EMC’s Backup Recovery Systems division. And it’s generally smaller and mediumsized businesses that are often most at risk from data loss, he stresses.

38

“Just because a manufacturer isn’t a Fortune 100 giant doesn’t mean that their data is any less important,” he says. “It’s dangerous to think that because you’re a smaller business, disaster recovery planning isn’t an important priority.”

But, he says, it’s a priority that is often overlooked. “Most businesses do the basics of backing up data - but what they don’t do is think about how they will recover with just a rudimentary data back-up,” he emphasises. “If a data centre burns down in a fire, how useful will a day-old set of tapes be - particularly without computers to mount them on, and applications ready to run that data? And that’s always assuming that the back-ups were stored off-site in the first place.”

Poor planning Put like that, manufacturers might well shiver with apprehension. For there’s a critical weakness in the approach that many of them take to the whole issue of data and disaster recovery.

“The number one mistake that we see companies making is to fixate on back-ups - such as worrying about how frequently they should happen, and confirming that they are happening as scheduled,” says Manley. “But instead, they need to be focused on the recovery, not the back-up.”

And the evidence shows that very few are doing this - a fact attested to by the high proportion of disaster-struck businesses that fail to recover properly, or at all, even though back-ups had been taken as planned.

Specialfeature EMC

“Organisationally, disaster recovery and data security often falls between functions,” notes Manley. “And when disaster strikes, it’s not uncommon for people to look at each other and say: ‘Oh, I thought you were responsible for that.’” Taking a back-up, in short, isn’t the same as planning what to do with that back-up in the event that disaster strikes and it is needed.

Another problem, even when disaster recovery responsibilities are clearly delineated, is a tendency to cut corners.

“The chief executive will ask for a fully-costed disaster recovery plan to protect the business’ data - and then say: ‘That’s a great plan - now, what can you deliver for 50% of that amount?’

It’s short-sighted and potentially very dangerous corner-cutting.

It’s also unnecessary when there are perfectly adequate solutions out there to suit almost any corporate budget.”

So what steps can manufacturers take to affordably protect their most important asset?

Priorities The trick, explains Manley, is to start with any relevant industryspecific or government-mandated regulatory requirements, and then factor in the speed and scope of the desired recovery.

In short, protect the data that the business legally has to protect and preserve for stated periods of time - and then, system by system, application by application, determine the most appropriate disaster recovery strategy for the data that remains.

“As a manufacturer, I might have

Don’t assume that disaster won’t occur - prepare for it, but hope it doesn’t happen.

Allocate clear responsibilities for disaster recovery: don’t let it fall between the cracks.

Disaster recovery is more than just backing up data: plan the recovery, and practice it too.

Not all data needs up-to-the-second replication.

The cloud and virtualisation can offer inexpensive and robust alternatives to physical replication. mission-critical systems that needs to be available 24/7, such as my ERP platform,” he says.

“But I might also have systems that aren’t so mission-critical, and which can operate off-line for 24 or 48 hours. By matching their requirements to appropriate replication strategies, disaster recovery can be assured and at the lowest cost for the recovery target that you’re trying to hit.”

And it’s here, notes Manley, that EMC’s extensive range of disaster recovery solutions, and the capabilities of its reseller partners, come to the fore.

For mission-critical data, real-time off-site replication is the relevant best practice, he explains - ‘synchronous’ replication, in the jargon. For less mission-critical data, or where applications or systems possess off-line storage capabilities, ‘asynchronous’ replication is the route to follow: off-site back-ups, but carried out (say) nightly, rather than continuously.

Then, with the right data safely stored off-site, it’s time to think about where it’s

Just because a manufacturer isn’t a Fortune 100 giant doesn’t mean that their data is any less important, it’s dangerous to think that because you’re a smaller business, disaster recovery planning isn’t an important priority Stephen Manley, Chief Technology Officer, EMC, Backup Recovery Systems Division

stored. And again, says Manley, there are options to suit every corporate budget.

At the top end, data will be backed-up into a ‘mirrored’ remote data centre. Staffed, and with servers pre-loaded with the requisite applications, this is kept on standby ready to ‘failover’ into operational status in the event of a disruption to the main facility.

Expensive? Maybe so. But there are less pricey options, says Manley.

“Rent, don’t buy - and think cloud, rather than physical replication,” he urges. “And don’t overlook the very real advantages of virtualisation: we see more and more manufacturers moving to virtualisation, so that they can bundle, back-up and restore whole instances In other words, not just the data, but the applications and configurations as well.”

Indeed, he adds, best practice today is increasingly revolving around just such virtualised instances, with EMC resellers providing a physical stand-by location complete with servers for those manufacturers who lack their own physical stand-by location.

“For manufacturers, it’s about tiering their requirements, and we in turn tier what we provide to meet those requirements, with the objective of proving off-site back-up and recovery at the appropriate cost.”

In short, there’s no longer any excuse for inadequate disaster recovery provision; if, indeed, there ever was.

39

You are invited to join over 600 manufacturers at this year’s Manufacturer of the Year Awards Ceremony & Gala Dinner – the biggest night in the manufacturing calendar!

LEADERSHIP & STRATEGY Accolade Wines Alumet Systems (UK) CNH UK J.J. Churchill PZ Cussons (UK) Responsive Engineering Group

IT IN MANUFACTURING ANM Electronics C & J Marine Drallim Industries Fairfax Meadow Europe KTC Edibles R.H.H Franks (New Milton)

INNOVATION & DESIGN Ashwoods Automotive G’s Marketing - G’s Fresh Beetroot Polypipe Civils Ricardo Rolls-Royce Motor Cars UltraVision CLPL

SUPPLY CHAIN EXCELLENCE Cinch Connectors Snorkel Lifts The Royal Mint

PEOPLE & SKILLS Apex Linvar DavyMarkham Hampshire Cosmetics Hi-Technology Group R&R Ice Cream Sheffield Forgemasters International

OPERATIONS & MAINTENANCE Apex Linvar Bespak Europe Fenner Dunlop Inspirepac Premier Foods PZ Cussons (UK)

You are invited to the biggest night in the manufacturing calendar!

The Point, Lancashire County Cricket Club, Manchester Book now to be part of it 09/11/2011 SUSTAINABLE MANUFACTURING Alumet Systems UK) Avon Metals Boots Contract Manufacturing Camfil Farr Crown Paints Muntons

MANUFACTURING IN ACTION CNH UK Coca-Cola Enterprises Samworth Brothers Thorntons

WORLD CLASS MANUFACTURING BAE Systems, Samlesbury Camfil Farr CNH UK Herman Miller Howard Hunt Group Molson Coors Brewing Company (UK & Ireland)

SME MANUFACTURER Beagle Technology Group Cosworth Group Drallim Industries Farecla Products Morgan Motor Company The Authentic Food Company

YOUNG MANUFACTURER OF THE YEAR Kai Burkitt, BAE Systems, Samlesbury Daniel Butler, Bentley Motors Joe Miller, Drallim Industries Oliver Jones, Honeywell MK Electric Rush Garfitt, Tata Steel Speciality Thomas Woods, Tata Steel Speciality

Reserve your place at the manufacturing event of the year, and raise your glass to the best of UK manufacturing!

Join us at this prestigious black tie event, as we’ll be celebrating the success of our finalists. Guests will enjoy a drinks reception followed by awards ceremony, three course dinner and entertainment to the small hours. So come along for a spectacular evening of industry celebrations and networking.

Booking information: Tables of ten: £1,250 + VAT Individual tickets: £150 + VAT Contact Benn Walsh, telephone: 0207 401 6033 or email: b.walsh@sayonemedia.com

Awards Ceremony & Gala Dinner Programme Sponsor:

Researched and developed by:

Corporate sponsor: Co -sponsor:

www.themanufacturer.com/awards

This piece was compiled collaboratively by the following DLA Piper partners from across the UK:

trends challenges Manufacturing and

Richard May, Sheffield (richard.may@dlapiper.com)

Working in conjunction with The Manufacturer, international law firm, DLA Piper, led a survey with industry leaders to identify the key trends and challenges that manufacturing firms are facing.

The results highlight the issues that remain at the top of the manufacturing agenda.

Noel Haywood, Birmingham (noel.haywood@dlapiper.com)

T

he manufacturing industry has faced a climate fraught with economic uncertainty over the last few years but has been singled out as one of the most important sectors as the UK looks to its recovery.

The Government appears to be supporting the cause with enthusiasm, but how is this translating to the most important audience - the manufacturers themselves?

Delivering growth David Gray, Manchester (david.gray@dlapiper.com)

Peter Brook, Liverpool (peter.brook@dlapiper.com)

42

Over 65% of businesses responding to the survey expect growth to some degree, either in the UK or overseas.

Considering recent headlines about stagnating output, this is an encouraging response which demonstrates a level of positive thinking. However, some sectors are undoubtedly more bullish than others. Civil aerospace, automotive, advanced engineering and oil & gas are cited as common growth areas while others, including defence and the general UK industrial base - which this year has seen growth stagnate or contract – show less optimism.

The development of new products for existing markets emerged as the strongest business objective for respondents

The development of new products for existing markets emerged as the strongest business objective for respondents. Given that there has been much discussion on new markets and the importance of driving exports into these areas, this is an interesting finding but also one that makes sense in the current climate.

Accessing new markets is not as straightforward a growth strategy as many initially think. It is an expensive and time consuming process and it can take a number of years for a business to take hold in a new market.

A proportion of the economic recovery in manufacturing over the last 18 months has been driven by growth in export markets. But with renewed economic turbulence in Europe and the US, this is looking fragile. Exports to the Eurozone fell by ÂŁ1.2 billion between May and June and this trend comes through in the survey results, with 14% reporting that Western Europe was losing its appeal.

Many are instead looking at markets beyond Europe. China, perhaps unsurprisingly, remains one of the biggest targets.

Specialfeature Industry survey

Chart showing survey respondents’ opinions of the effectiveness of Project Merlin

Effective (2%) Unsure or mixed views (54%) Not effective (44%)

Twenty per cent of those investing in overseas expansion felt that it would be fuelled by organic growth, with a further 12.5% expecting joint ventures, or similar arrangements, to be the driver.

Through exploring emerging markets, UK-based manufacturing companies have an opportunity to extend their products and services to diversify their source of sales. In strict economic theory, the weakness of the pound, exacerbated by further quantitative easing, should give UK-based companies an increased edge in export markets, but there is a narrowing window of opportunity to exploit this.

Over a third of respondents are concerned that exchange rates will impact unfavourably on international exports - if a loss of confidence in the Euro drives investors towards the Sterling, this could lead to a less favourable exchange rate implication for British exporters.

Challenges Pricing pressures emerged as the most common challenge to companies going into 2012, with 86% of respondents rating this as an issue. In addition,

rising material, commodity and energy costs were common concerns, particularly inflation in oil and gas which will effect fuel costs but also plastic, raw material and component costs for some. The importance of pricing pressures coupled with commodity and component inflation looks set to define the agenda in 2012. Energy pricing in particular is of huge importance and there is some concern that businesses will look to move closer to their customers on mainland Europe if prices do not become more competitive in the UK. Finally, it is well-documented that one of the key issues affecting manufacturers is the availability of a steady supply of skilled labour. This was reflected in the survey with over 50% of respondents highlighting that they want to up-skill staff in the next 12 to 18 months to help close skills gaps.

Government support The launch of Project Merlin in February promised to improve access to finance and increase lending to SMEs to £76bn. However, this target is so far falling short and the Chancellor’s recent announcement that new measures are to be tested, in particular “credit easing” - effectively lending money to small businesses via corporate bonds - hints at admittance that Project Merlin has failed.

More than a third of the survey participants echoed this belief, suggesting that the Government needs to do more to persuade the industry of the effectiveness of its support. Despite the introduction of various initiatives, there appears to be some scepticism of their purpose with one respondent reporting that schemes like Made in Britain “rarely filter through to the real economy and are political hot air”.

Access to finance Forty per cent of respondents said they don’t need access to funding to help them achieve their business objectives.

There is a common conception that finance is stalling growth and some would expect this figure to be higher. But manufacturers have proved to be resilient and generally conservative borrowers who have become used to capitalising themselves.

While the news agenda laments the difficulty SMEs have accessing bank finance, a large proportion have either not tried, or have not needed to borrow in the last 12 to 18 months. This is a view supported by many banks that remain adamant that funds are available but that businesses simply are not coming forward to take advantage of them.

However, a third of survey participants said they do need access to funding, largely for capital equipment, extra capacity and production efficiencies. Over a third of those looking for finance stated acquisitions as the reason, about half of which are in the UK. This number has been much lower in recent times and the increase suggests that M&A activity is on the up for 2012.

The future If the sector is going to deliver on the Government’s hopes of a manufacturing-led recovery, then steps need to be enforced to ensure growth is sustainable. The survey highlights a positive attitude among businesses, demonstrating a clear commitment to growth and investment for a broadening of global horizons.

Whether at home or abroad, UK manufacturing expertise and industry advances are thriving and need to be fully supported if the country is to be pushed further into the spotlight on the international manufacturing stage.

43

EMC RUNS BACKUP

7X FASTER Based on internal EMC Data Domain GDA-DD Boost testing.

EMC2, EMC, and the EMC logo are registered trademarks or trademarks of EMC Corporation in the United States and other countries. Š Copyright 2011 EMC Corporation. All rights reserved.

Leadership & People and Skills

Apprentice needs

appeased

Unite Support for TAS Apprenticeships are the lifeblood of manufacturing and the new TAS scheme is a way forward, says Tony Burke, assistant general secretary of Unite the Union, and a union representative on the Cogent board.

Unite has expressed its full support for TAS – the unions were involved in developing the bid and we will be playing an important role as the scheme is rolled out.

Apprentices and speakers at the TAS launch event in London, October 13

Jane Gray reports on a new apprentice recruitment service for process industries, recently launched by sector skills council Cogent.

A

pprenticeships are on the rise. Data from the National Apprenticeships Service (NAS) shows that across engineering and manufacturing companies alone the number of apprentice vacancies advertised has risen from 2,320 in 2008/9 to 11,790 in the year to date.

But despite this increase, sector skills council Semta says that only 11% of engineering firms currently offer apprenticeships and it is widely acknowledged that small and medium sized enterprises often feel the barriers and burdens (in terms of administrative cost, regulation and finance) to establishing their own schemes are too great to be countenanced.

This is a concern for those who believe that vocational training is the key to bridging the UK’s skills gaps and creating a stronger economic outlook.

Cogent, the sector skills council for science based industries has sought to address SME apprehension over apprenticeships with the launch of the Technical Apprenticeship Service (TAS). This new offering aims to match apprentices with real, sustainable jobs and protect

stakeholders from the perceived risks involved in apprenticeships.

Jayne Edwards, the newly appointed managing director of TAS, explains: “The three main stakeholder groups in TAS are the apprentices themselves, employers and providers – either colleges or private training companies.”

She continues, “With particular reference to the apprentice perspective Unite [the Union] have provided invaluable support in ensuring that our frameworks are fair…I recently saw an FE [Further Education] College advertising that employers could recruit an apprentice for anything from three days to a year. That kind of attitude draws a picture of apprentices as cheap labour.” Ms Edwards is clear that this is not what TAS is about.

The “real jobs for real apprentices” mantra for TAS is upheld with a comprehensive offering to the employer stakeholder group. “We offer a bespoke recruitment service,” says Edwards. “SMEs in particular tend not to have HR departments.

TAS offers support and guidance by taking on the administrative side of running an apprenticeship.

Unite promotes high quality apprentice schemes, particularly with our Union Learning Reps, with employers and through the TUC, so Unite supports the TAS vision - which is real jobs for real apprentices - and its purpose to source and employ skilled apprentices on behalf of the process sector.

Unite recognises that skills development is vital for the productivity of the process manufacturing sector and the TAS will support companies in developing people and equipping them with the specialist skills they need.

Manufacturing is essential to the rebalanced economy the country needs at the moment.

Unite has made it clear process industries need to support the development of critical science and technology skills for the future. TAS will also hopefully provide a secure future for the apprentices who take part, as well as ensuring they avoid taking on high levels of debt generated by the graduate route.

This scheme makes it easier for smaller companies to take on apprentices who are important to the future prosperity of their business and the sector. We’ve already seen high levels of interest from companies of all shapes and sizes to get involved.

Trade Unions such as Unite play an important role in apprenticeship schemes, ensuring that the employers are implementing high-quality skilled apprenticeship programmes. Supporting and organising apprentices, and ensuring equality and diversity are built in is an important part of this.

45

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Impressive line-up of speakers — — — — —

Declan Curry, Business Journalist and Presenter, BBC News Rt. Hon Vince Cable MP, Secretary of State for Business, Innovation and Skills Rt. Hon Ed Miliband MP, Leader of Her Majesty’s Opposition (Invited) Terry Scuoler, Chief Executive, EEF-the manufacturers’ organisation Further speakers to be announced

Best practice workshops — Managing global supply chains — Accessing finance and investment — Exporting for growth

Book your tickets now at www.manufacturingconference.co.uk or call Benn Walsh on 020 7401 6033 and take advantage of early bird and group discounts.

Leadership & People and Skills

Proving the need for TAS Since 2007 Cogent has seen a 15% year on year growth in apprentices in training undertaking a specialist Cogent Apprenticeship Framework across the UK. Looking to boost this growth Cogent formed the TAS concept and undertook a sample survey to assess the demand for such a service. The below results support the idea that there was a gap in the market for Cogent’s sectors for a product like TAS. Cogent also asked survey participant how many apprentices they would be interested in taking on under the suggested TAS framework. The average across 256 responses was 3.56.

Based on the idea that Cogent will employ apprentices on behalf of the science based industries, and place them with employers and providers, would your company be interested in taking on an apprentice(s)? (Data based on 159 responses from companies in Cogent sectors.)

40%

21%

39%

Anecdotal evidence from comments submitted to Cogent by employers, training providers and trade union representatives also indicate a real demand. One employer said: “TAS will be a really cost-effective way of bringing new talent to the business, and the facts it offers progression routes to Higher Level Education is ideal for the young people coming into the sector.”

We can even offer to take on the responsibility of employing an apprentice for a fee – this gets around prescriptive headcount problems for larger SMEs.” Ms Edwards’ own background includes experience of management in a SME environment but also extensive experience in funded training development and the delivery of the college based part of apprenticeships. This puts her in a particularly strong position to lead on the final stakeholder engagement area of TAS – Provision.

“We have an ambitious agenda to develop appropriate provision for the delivery of all our apprenticeship frameworks,” says Edwards. “There is sometimes a challenge in overcoming lack of expertise at local colleges and we are developing distance learning and e-learning tools to combat this.”

Looking to the future TAS hopes to push beyond its immediate remit of growing NVQ level 3 apprenticeship placements in process industries – not a traditional industry segment for apprentices. In January Cogent will celebrate the launch of a new Higher Level Life Sciences Apprenticeship including a foundation degree qualification.

Other such apprenticeships are in the pipeline and TAS plans to provide bursaries for talented individuals to take these courses on. TAS has been developed in close alliance with NAS and will be monitored for its ability to prove ROI and the sound investment of government funding by the UK Commission for Employment and Skills.

We can even offer to take on the responsibility of employing an apprentice for a fee Jayne Edwards, managing director of TAS

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47

Leadership & People and Skills

Wonderwomen As part of its long term campaign to raise the profile of manufacturing and engineering careers in the UK, IMechE is celebrating the success of nine extraordinary women working in the industry. Jane Gray considers the importance of this recognition.

48

e

arlier this year the Institution of Mechanical Engineers (IMechE) joined the throng of trade associations, quangos and sector skills councils fighting to rehabilitate the image of manufacturing with the UK public.

For its initiative Engineered in the UK IMeche has been rooting out inspiring figures working in industry to demonstrate just how lucrative, exciting and diverse a career in British manufacturing can be.

During this hunt for career stories which might lure young talent into the industry and alter standard perceptions of its flagging contribution to the UK economy, the challenge naturally arose of disproving the idea that manufacturing has few prospects for women.

There is no doubt that the sector is dominated by male workers and that this is not a problem unique to the UK. Data from Engineering UK however, clearly shows that Britain has the lowest proportion of female engineering professionals in the EU – just 8.7%.

Does this matter? Engineering UK would certainly say yes. Its research reveals that companies with strong gender diversity at a top management level achieve

From the small scale entrepreneur to leaders of multinational manufacturing super powers this group of women prove that there is opportunity for talented individuals – whatever their gender – in every aspect and scale of manufacturing

around twice the operating profit of less diverse peers and display better stock growth – around 64% compared with 47%.

But such statistics are impersonal and give little motivation to ambitious women on the first steps of their careers.

To fill this gap IMechE has gathered together an impressive portfolio of female trailblazers in a diverse range of manufacturing and engineering organisations.

There is not enough space here to do full justice to their hard work and the influence they have brought to bear on local, national and international levels but a few brief snapshots should highlight just how worthy they all are of acclaim in an industry meritocracy.

From the small scale entrepreneur to leaders of multinational manufacturing super powers this group of women prove that there is opportunity for talented individuals – whatever their gender – in every aspect and scale of manufacturing.

Among the nine women identified by IMechE is Professor Isobel Pollock a leading engineer, businesswoman and academic who will next year become only the second female President of the Institution in its 164 year history. Commenting on her place in this illustrious group Prof Pollock said: “What the nine of us have in common is not just that we’re women, but that we all have a deep passion to ensure the UK becomes the leading manufacturing nation it should be.”

Celebrating the successes of these nine women is not about feminism or campaigning for ‘positive’ discrimination in manufacturing recruitment strategies. Quite simply it is about giving credit where it is due and providing female role models who can give other women in industry the confidence to believe they can reach the top and be the best in their fields.

Turn the page to see who these inspiring individuals are.

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

You probably haven’t thought much about it. You’ve just got music on for your staff or customers.

But did you know you need permission from the music’s copyright owners if you play music at work?

It’s the law. But don’t worry, to get that permission you simply need a licence from PRS for Music (and in most cases, one from PPL* too). PRS for Music is a not-for-profit organisation that acts on behalf of songwriters and composers to ensure they’re paid for the use of their work. So if you have music playing, ask PRS for Music how you become licensed to listen today.

Contact PRS for Music on 0800 694 7304 or at prsformusic.com/musicatwork

*PPL collects and distributes royalties on behalf of record companies and performers. Further info at ppluk.com. All music licences are required under the Copyright, Designs and Patents Act 1988 which stipulates you must gain the permission of the copyright owner if you play music in public (anywhere outside the home environment). You do not need a licence from PRS for Music if all of the music you play is out of copyright.

Margaret Wood, Founder and Director of ICW UK

Katey Felton, Founder of her own Silversmith business and Teacher of Design.

Katey is a young entrepreneur who has built a successful Silversmith business in Sheffield.

Margaret set up ICW, a specialist glazed unit manufacturing business, 25 years ago. She now provides services to a diverse group of clients from F1 teams through to Kew Gardens.

Katey has worked on an impressive portfolio of projects including work for Sheffield City Council, the Home Office and even making the cufflinks and brooches given to leaders and their wives during the G8 summit in 2005. She now hopes to expand her business internationally and to inspire young talent to follow in her footsteps.

Katey is also a Design and Technology teacher at Stockbridge High School.

Margaret was propelled on her route to success by the tragedy of her husband’s death. Left an intestate house-wife with three children, Margaret had no visible means of income. In defiance of her circumstances she established ICW UK Ltd. In the 2011 New Year’s Honours list Margaret was awarded an MBE for services to business.

Margaret is now a vocal industry advocate. “I want to encourage the younger generation to take up engineering, teaching them everything I can about the business skills you need to get on in industry,” she enthuses.

Helen Barratt, Construction Capability Manager at BAE Systems.

In her role Helen oversees 1,700 manufacturing staff building Astute class nuclear submarines.

Helen joined BAE as an administrator in 1985 and has worked her way upwards with roles on a variety of projects across the company. Major stepping stones include her time as material control officer on the Landing Platform Dock programme to deliver two 20,000 tonne amphibious assault ships, HMS Albion and Bulwark.

Helen assumed her current role in January 2009. Looking to the future she says: “I’ve reached a level I never thought possible and now I want to support future generations.”

Angela Robotham, Engineering Director of Pulse Tidal.

Pulse Tidal is a pioneering company in marine power generation. The company is now working on a new 1.2MW tidal energy generator which it hopes will be commissioned for service next year. This device will be capable of generating power for up to 1,000 homes.

Angela has been involved in several groundbreaking tidal energy projects during her career including the Neptune project for Scottish & Southern Energy/Weir Group, the SeaGen 1.2MW development for Marine Current Turbines. Angela strongly believes that tidal power should play a higher profile role in the UK’s future energy mix. “It [Tidal power] is, with nuclear, the only truly dependable form of energy available,” she says.

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Leadership & People and Skills

Isobel Pollock, Mentor and assessor for the Institution’s Manufacturing Excellence programme Next year, Prof Pollock will become President of the Institution of Mechanical Engineers, a leading engineering institution founded

by George Stephenson in 1847. She has senior management experience with multi-national companies including ICI, DuPont, Robert McBride and Beatson Clark. Prof Pollock is a mentor and assessor for the Institution’s Manufacturing Excellence programme - which is the most successful and long established manufacturing awards programme in the UK. In addition to her new role with IMechE Prof Pollock is Vice Chairman of the Engineering Council, a Member of Court of the Worshipful Company of Engineers, a Fellow of the London City & Guilds Institute and Royal Society of Arts and has an Honorary DSc from Huddersfield University for services to engineering and the engineering profession.

Sharon Kuligowski, Managing Director of Dunphy Combustion.

Dunphy Combustion designs, manufactures and installs sustainable waste-to-energy centres and district heating schemes around the world.

Sharon has led the company to win many high profile projects including the design and supply of CHP combustion equipment to the 2012 Olympics Energy Centre. In 2010, Dunphy won a Queens Award for Enterprise in Innovation.

Suzannah Bourne, Owner and Operations Director of Guardian Global Technologies Guardian Global Technologies is a leading manufacturer of oil and gas downhole logging equipment and ballistics delivery systems. Its clients include Schlumberger, Halliburton and Baker Hughes. Together with Iain Maxted, Suzannah started the company in 2003 and since its founding the Guardian Global Technologies has grown 40% year-on-year. Suzannah is an ambitious entrepreneur and has little intention at settling with just one business success. She explains, “We’re aiming to double the size of the company this year, next year and then again the year after that – before selling it and starting again.”

Justine Heeley, Managing Director of Chemring Marine.

Carol Burke, Managing Director of Unipart Manufacturing Group Since taking the helm at UMG in 1998 Carol diversified the company’s offerings from its traditional automotive focus to take advantage of opportunities in the nuclear and defence sectors. Carol achieved her first managing directorship with the Unipart group by the age of 30 having gained previous experience with the British Steel Corporation and GKN.

Chemring Marine manufactures marine distress signalling equipment including flares and lifebuoys. The company employs close to 100 people across the UK and Germany but is part of the larger Chemring Group which employs over 4,000 people worldwide.

Carol has been recognised in the CBI’s Real Business First Women Awards and in 2005 as West Midlands Business Woman of the year. Speaking about her achievements and ambitions Carol says: “My professional ambition is to lead UK manufacturing in a senior role; to become ‘Ms UK manufacturing’.”

As sales director at Chemring, Justine was highly influential in extending the company’s global distributor network. She was made managing director in 2010.

Have your say at www.themanufacturer.com

51

World Leaders in

Lean Research & Education The Lean Enterprise Research Centre (LERC), part of Cardiff Business School, has for the past 17 years assisted manufacturers to improve their operations, reduce waste and build in value and efficiency to their production and supply chains. Renowned for exceptional research, a world class Master’s programme and industry focused training programmes.

LERC offers...

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about manufacturing. How wrong I was.

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Lean Competency System (LCS) – accredit your own company’s training programme Lean Knowledge Transfer Partnerships (KTPs)

Visit www.leanenterprise.org.uk or telephone 029 2064 7028.

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8.30pm 5th & 8th December Sky channel 231 Freesat channel 402

See the differences that British manufacturing, engineering and design can make to the new economic powers in Brazil, Russia, India and China (BRIC).

We will be reporting on the revival of British manufacturing and looking at the advantages it can offer BRIC partners in supporting their growth, upgrading their facilities and meeting the rising expectation of consumers. Plus we will explore how Britain is transforming its economic performance by improving its capacity to turn smart ideas into ready-for-market applications.

Featuring: • EEF the manufacturers’ organisation • UK Trade and Investment • ADS Group • CBBC • BIS To watch our series of engaging programmes with expertise drawn from leading companies and organisations please go to www.thebusinesschannel.tv For more information about the Business Channel or to take part in one of our programmes please contact us at info@thebusinesschannel.tv 020 8438 0616 www.thebusinesschannel.tv

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Jenny Smith Product Definition Engineer MBDA

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enny joined MBDA after building up an enthusiasm for engineering and manufacturing during her GCSE studies. Since then she has gone on to collect an impressive array of qualifications and certifications – including the completion of her NVQ level 3 advanced apprenticeship with one of the UK’s leading defence manufacturers. Here she talks to TM about some of her motivations and experiences in her career so far.

TM: What do you do in your role?

JS: I work as a product definition engineer which means I control and manage designs and changes to those designs. This is important because we have to understand and be able to demonstrate the consequences of a change and reconcile the design steps the product has undergone at a later date. My work maintains our ISO 9001:2000 status and ensures we comply with certain defence standards which are customer contractual requirements.

TM: What personal characteristics help you in your role?

JS: I would say that my willingness to learn and asking all the right questions have been important in building my knowledge and preparing for my role. I would consider myself highly motivated. I always try and carry out my work to a much higher standard than my manager might have expected, which establishes your professional credibility with more experienced colleagues.

TM: What do you consider to be your biggest personal success at the company so far?

JS: I created an Engineering Change Guideline that has helped many engineers complete change proposals in MBDA’s PDM (Product Data Management) system successfully first time. This saves time previously lost to re-work or rejections.

The Guideline gave a step-bystep walk through of the process ensuring all the information was documented for each change and has been adopted by everyone using the company’s Engineering Change Proposal system.

Another highlight was winning the Best Apprentice of 2011 from the IMechE (Institution of Mechanical Engineers). It was a great honour to be recognised at a national level.

TM: What will your next career move be?

JS: After I have finished my HND and NVQ 4 in July I will start completing configuration management courses in order to progress to a configuration manager with my own project to manage.

As an overall ambition I am keen to gain my chartered engineer status. I feel this is important as it helps engineering as a profession establish levels of achievement. It is helpful for peers and for those outside the industry to understand the extent of your achievements.

TM: What first attracted you to a career in manufacturing?

JS: Throughout school my strengths were maths and science. I always enjoyed finding out how things worked though I didn’t really know what manufacturing engineering was.

I decided to do GCSE engineering at my local college to find out more. I really enjoyed the course and carried out work experience at two engineering firms during year 10 and 11.

TM: How do you think best to get more young people interested in manufacturing?

JS: I was partially inspired by going to the Farnborough Air Show. I think creating opportunities for schools to visit events like this and the recent WorldSkills competition in London would help to fire the imagination that attracts people into industry.

CV in brief: Jenny Smith Age: 24

Education:

GCSEs

Qualifications and achievements:

Higher National Certificate PROEngineer Wildfire 4.0 training IMechE course in essential management training for engineers 10 depatmental placements within MBDA completed Pending EngTech professional registration with IMechE

Hobbies and interests: Aerobics, zumba and cookery

Have your say at www.themanufacturer.com

53

Look North,

look positive

Harnessing both heritage and innovation will be crucial for the North of England’s manufacturing sector. Steve Lewis of Royal Bank of Scotland examines how some firms are adapting strategies to capitalise on recovery over the coming years.

G

overnment initiatives to promote growth have been largely welcomed in the North. In the summer, sites near Runcorn and the Humber Estuary were added to a first tranche of enterprise zones – including Liverpool, Manchester, the Tees Valley and the North East – announced earlier this year. But among manufacturers, the mood has been cautiously optimistic for some time, even as the global economy looks likely to remain unstable for longer than many might have reasonably predicted this time last year.

However, those firms focusing on growth are paying closer attention to their strategies for

54

innovating, accessing finance, managing supply chains and delivering first-class customer service. Meanwhile, talent attraction and retention plans are also being revisited in anticipation of skill shortages.

Good news: sustained investment, continued resilience Some CEOs and FDs in the North are proactively exploring what the new enterprise zones might mean for their businesses, especially tax breaks that might free up resources for investment in product design or innovation.

But many insist those capex and R&D decisions would have gone ahead anyway, with ample

liquidity and funding already committed. Balance sheets are looking reasonably healthy and the collective appetite to invest is sharper than many assume, as increased activity of private equity firms demonstrates.

Sub-sectors with opportunities for growth include defence, chemicals, aviation and aeronautical engineering; renewable energy and ethical manufacturing also look promising. Within heavier industries, a number of firms have been investing in plant and machinery to strengthen their capacity in anticipation of growing order books.

Some, however, are instead channelling funds into efficiency improvements that allow them to reduce costs or increase margins, especially in the face of competition from countries with lower labour costs. Others are stepping up investment in new or green technologies to streamline production processes, supply chains or both.

During the recession, many manufacturers were forced to take steps to withstand the impact of escalating materials prices, such as changing suppliers or renegotiating existing terms. If, as many expect, price volatility is set to continue for some time, firms in the region may well need to build greater innovation into their procurement strategies, to avoid squeezing margins or reducing the quality of inputs. This might mean working more collaboratively with trusted suppliers to find ways that maintain reliable supply chains, even if cheaper alternatives appear more attractive.

Specialfeature RBS

Customer service: always important, never more critical The success of most manufacturing businesses is typically underpinned by excellence in service delivery as much as it’s visibly driven by products that people want to buy. But in the current economic climate, customer service takes on a heightened significance; it’s how CEOs tell me they differentiate themselves from competitors. For many firms, the working capital cost of holding extra material stocks is infinitely preferable to the likely consequences of being unable to service last-minute orders or deliver on time, especially if margins are sufficiently cushioned to take the extra strain. This is something we’re seeing right across the manufacturing spectrum, even those producing high-cost goods or in sectors – such as technology – where components might quickly become obsolete.

Where customer service also appears to be an increased area of focus is among exporters.

More firms based in the region but trading overseas are going one step further and setting up offices in key locations, with sales teams, service and support staff as well as, where the investment is warranted, production and R&D facilities. First steps have typically been taken in European and North American markets.

But the signs are that greater interest and confidence in Asia’s potential, along with the advantages of a weak pound, is bearing fruit. More manufacturers are hiring people who understand the complexities and risks of exporting to specific territories (as well as language skills and existing relationships).

Those who can harness both international market intelligence and the reputation of British manufacturing quality and production values are enjoying new business, much of which is helping to sustain or create jobs in the North.

Subsectors with opportunities for growth include defence, chemicals, aviation and aeronautical engineering; renewable energy and ethical manufacturing also look promising

Talent strategies: combating threats, home and away Imminent skill shortages dominate many of the discussions among the region’s manufacturing leaders. Although the North has traditionally been an industrial centre, the growth of the UK’s high-tech manufacturing has been more widely dispersed.

Employers here must compete with companies elsewhere for technical specialists, managers and, increasingly, those with the experience and entrepreneurial flair to help make inroads overseas.

While work-life balance factors have not necessarily been the focus of manufacturers promoting their ‘employer brand’, the benefits of living, working and settling in the North may have to be more proactively pushed as a unique selling point in the face of southern competition. Flexible working arrangements might also need to be more widely adopted, where feasible, to attract good people.

However, a more pressing concern for heads of finance is that salaries will be driven steep upwards to secure the skills that manufacturing companies need

today, especially those forced to source highly qualified people from overseas. And while it may be too alarmist to talk about a ‘brain drain’, there is certainly concern in some circles that young talent coming through higher education and training in science, engineering and manufacturing technology may increasingly conclude that they’re more highly valued overseas and follow these opportunities.

For manufacturing firms throughout the North, meeting the challenges associated with volatile trading conditions will require careful co-ordination of strategies around supply chains, innovation and talent management. Patience and preparedness will be precious commodities – but with welltimed investment and a relentless focus on customer service, the signs are that the sector is reasonably well-insulated, and poised to take advantage of a more sustained upturn.

Supporting the decade of opportunity The theme of this year’s Manufacturing Directors Conference is ‘A Decade of Opportunity’, focusing on how UK manufacturers can gear up for growth in the coming years. It’s a theme RBS instinctively champions. That’s why we’re represented comprehensively across the North West, Yorkshire and the Humber, and the North East. Our locally-based relationship managers and manufacturing sector experts support bluechip multinationals, midcap firms and entrepreneurial businesses alike – and the speed, skill and understanding with which we anticipate and respond to our customers’ needs is why they return to us again and again to support their strategic objectives.

To access regional manufacturing sector banking expertise across the North of England, contact: Steve Lewis Regional Director, Manchester Tel: 0161 862 4031 Email: stephen.b.lewis@rbs.co.uk

Have your say at www.themanufacturer.com

55

The new shape of corporate banking

Tony Fulton, Adam Flanagan, Mark Collings and NIcky Wilkins from the Santander Corporate Banking Team.

Honesty is the best policy So when we spoke to manufacturers about the challenges they faced and opportunities they perceived we didn’t just listen to their comments – we used their feedback to develop a strategy that would provide practical support where it is needed most.

and “banks are still central to all our funding needs and operations, but banks in the UK do not respond to SMEs”. Some reported overdraft facilities being withdrawn or converted to loans at higher rates and unreasonable security requirements.

Our willingness to support the companies that are the bedrock of the UK economy is borne out by lending figures for the first half of this year. We increased our lending to businesses by 27%, and have exceeded our lending commitments as set out in Project Merlin. Under this agreement, we committed to increase lending to UK businesses by £6.7bn and to set aside £4bn specifically for small and medium sized companies. In the first six months of the year, we have provided £4bn of new lending, of which £2.1bn was for SMEs.

So early this year, we approached the EIA to discuss ways that we could help manufacturers – particularly SMEs – access the finance and support they need. We believe this is crucial both for manufacturers and for the UK economy as a whole. In particular, we are helping manufacturers access all the funding available to them by making them aware of ways in which we can support working capital as well as Government-supported financing programmes, such as the Exports Enterprise Finance Guarantee Scheme.

“

As Sir Ronald says, “Many businesses are putting off expansion, which we believe is holding up exports. That is why we are working with Santander Corporate Banking, as our preferred banking partner, to help manufacturers get a better deal. The key thing banks must do is lay out their products and terms honestly and clearly.”

However, there are issues that are specific to certain sectors, which is why we have taken the time to talk to members of the EIA (Engineering Industries Association) about the challenges they face and what we can do to help.

As president of the EIA, Sir Ronald Halstead is constantly talking to his manufacturing members about the problems they face and has conveyed their concerns to the Government, the Bank of England and the banking industry.

Comments from members noted in the association’s latest report included “the absence of finance from banks is critical”

“

we are working with Santander Corporate Banking, as our preferred banking partner, to help manufacturers get a better deal.

“

“

we are helping manufacturers access all the funding available to them.

Mike Read, group treasurer of advanced materials group Morgan Crucible, agrees that honesty is the best policy. He believes keeping the bank well informed about how the business is performing is key to maintaining a healthy relationship.

Greg Croydon, treasurer of engineer solutions provider IMI also believes that honesty is the key element in a good banking relationship. “Companies are spending more time on managing bank relationships than before the credit crunch so the most important element for IMI is the relationship with the Relationship Director.

We need to be able to pick up the phone and have an open and frank discussion, which really benefits both parties.”

Since SMEs deposit more money with UK banks than they borrow, this point about the symbiotic nature of the relationship between bank and customers is absolutely crucial. “There are many things banks can do to help manufacturers,” concludes Sir Ronald. “The way Santander is working with us to reach SMEs is a good example.”

If you would like to understand more about our approach to building long-term, mutually beneficial relationships with our customers contact your local Business Development Director today. They’ll be happy to have an open and honest discussion about the solutions we could offer your business.

Tony Fulton North 07809 493827 tony.fulton@santander.co.uk Adam Flanagan Midlands & Wales 07809 493841 adam.flanagan@santander.co.uk Mark Collings London & South 07809 493865 mark.collings@santander.co.uk Nicky Wilkins Thames Valley, Solent and South West 07850 640622 nicky.wilkins@santander.co.uk

www.santandercb.co.uk

NM AUG 11

Strong relationships are built on honesty, communication and a willingness to adapt, a philosophy that is central to Santander Corporate Banking and our drive to support SMEs.

Finance

Insurance and Professional Services

Quantitative Easing and manufacturing The Bank of England has taken the proactive step of expanding the asset purchase programme. With the coalition government promoting growth in the manufacturing sector what opportunities does this open up? Jamie Jemmeson, a trader at financial services firm Global Reach Partners, asks if now is the time to think about expanding channels further, or if this is simply the last throw of the dice by the UK’s financial leaders.

E

arlier this month the Bank of England (BoE) pulled the trigger on an additional £75 billion worth of asset purchases (otherwise known as quantitative easing - QE). This surprised the markets both in terms of timing and size. What has become obvious is that the Central Bank is prioritising growth over inflation, but what does this mean for domestic manufacturers? Is now the time to think about expansion and pushing the business to the next level despite the weak outlook?

Will more QE bring growth to manufacturing?

During the recent Conservative Party Conference, Chancellor Osborne revealed his plans to lend billions of pounds to small businesses, to “get Britain making things again”. Ironically, that same day we saw the Purchasing Managers’ Index data show that manufacturers suffered the fastest collapse in exports for

The Central Bank is prioritising growth over inflation, but what does this mean for domestic manufacturers?

One of the objectives of QE is to reduce the rates on medium or longer-term loans

more than two years.

The additional QE could open the door for manufacturers to expand and make up a larger portion of the nation’s GDP which is much needed. It is not the exchange rate that is hindering the nation’s exports; the Pound is much weaker than before the crisis. Nor can it be the business focus, as the Government has continually plugged the case for diversifying; moving away from reliance on service led industries to a more balanced economy.

One of the main hindrances to growth in manufacturing is lack of access to credit and loan facilities. In the short term this may be a problem, but one that could and should recede.

The BoE has made its intention clear to the market; they are focusing on growth.

The Central Bank knows that inflation is at elevated levels but believes this will pull back sharply in 2012. The minutes from their recent monthly meeting also stated that they were united in a vote for additional QE. What was more

interesting is that they considered extending the asset purchases to £100bn, with the market pricing in a further £75bn worth of QE in February next year. The message is clear; banks have got to start lending again.

The potential to borrow and invest.

One of the objectives of QE is to reduce the rates on medium or longer-term loans. If we combine the strong stance from the BoE and the Coalition’s pledge to boost the industry, not to mention the added pressure from high street retail banks offering their promotions to businesses on television, the pressure is all on the banks to loosen their purse strings.

Business loans for the manufacturing sector might become more readily available.

It could be argued that lending didn’t increase when QE was first introduced, but at the time there was more of a “wait and see” attitude. Let’s hope this latest move will deliver some much needed stimulus to the nation’s manufacturers.

57

Sustainability and shareholder

value

F

ew organisations understand the challenges imposed by recent environmental and climate change legislation better than those in the manufacturing sector. Increasingly, issues of resource cost which were felt to be in the medium term future are impacting production today. The current economic climate only serves to exacerbate the sense of challenge associated by the much discussed transition to resource efficient products and a low carbon economy.

Manufacturers are, therefore, faced with the challenge of trying to turn the everincreasing regulatory demands and non-regulatory drivers into commercial opportunities.

This blend of requirement and expectation is now so complex that the opportunities created will quickly deteriorate into business risks if they are not managed successfully.

58

Historically, many businesses took the view that compliance with environmental law was a sufficient investment in sustainability. They tended to wonder how to justify activities and investments that represented more than basic compliance to their shareholders. However, focus on compliance can lead to a tendency to treat the symptom, not the cause.

Opportunities to achieve commercial advantage from sustainability do exist but to be relevant, a sustainability strategy should focus on the ability to deliver enduring value and return profits in the medium to long term. Context and a sense of materiality are critical to achieving success.

This means understanding which issues are material from the range of challenges and opportunities facing a business and then setting strategy to address them.

Simon Pringle, head of sustainability and climate change at accountancy firm BDO explains why a robust environmental strategy is important to manufacturing companies beyond the need for compliance and resource security.

In order to deliver success, accountability for long term sustainability should sit within the core of an organisation. This shift to the mainstream is much easier to achieve if the strategy focuses upon those issues that are considered material to business success.

Opportunities and risks Since every organisation differs in terms of materiality, drivers and strategic aims, no one size fits all. As such it is important to consider some of the specific drivers, both of the manufacturing sector and of the organisation’s position within it. Regulatory, economic and market dynamics impact different sectors in different ways and not all organisations face the same level of risk or have the same amount of opportunity.

When considering sustainability as part of a strategy for competitive advantage in

Specialfeature BDO

the medium to long term, it is important to consider the trends associated with resource constraints, Government regulation, consumer behaviour and competitive dynamics. It is also important to understand where an organisation sits within its value chain, the amount of brand exposure it may have or the extent to which can exert influence.

Some of these differences are very clear and direct. For example, energy intensive industries in the UK are already being impacted by carbon pricing associated with climate change regulation. In these instances, it is quite likely that energy is already firmly on the agenda due to materiality and volatility of costs and the scale of the potential risk.

Those organisations which do not have high direct energy intensity may, nevertheless, be impacted but in a different way; for example by costs passed through the supply chain.

Similarly, those organisations that have a high dependency on resources such as water are already anticipating a future where risks to supply and reputation are very real threats. Here we are not talking solely about areas associated with arid conditions; in a recent water stress classification the Environment Agency categorised seven UK regions as serious. The same issues apply to processes that depend upon resources which are subject to price volatility or simple constraint.

For these organisations, it is prudent to make future projections and understand the implications for a ‘future factory’ operating within the modelled constraints. It is, after all, a natural step from a lean production methodology to one that includes environmental metrics and turns ‘lean into clean’.

Resource efficiency and supply chain

Energy intensive industries in the UK are already being impacted by carbon pricing associated with climate change regulation

environmental issues that are often discussed in the context of manufacturing, be it in relation to climate change, energy use, water or waste.

Studies from research firms such as Trucost, which specialises in quantifying environmental impacts, show that using fewer resources to produce goods in supply chains will also help control rising input costs and environmental impacts.

However, to fully benefit from an efficiency programme, companies need first to understand which suppliers present the greatest financial risks and opportunities.

Assessing the materiality of issues within a supply chain requires an understanding of complexities such as the political and economic instability, growing demand in emerging markets and export constraints that have influenced the rise in commodities’ prices since 2009.

Whilst a small organisation may exert little influence on its supply chain, a substantial brand-led manufacturer may be able to significantly influence its suppliers to deliver on sustainability objectives. Conversely, an organisation may be able to work with its client base to understand their commitments or challenges and gain competitive advantage by helping to address them.

Customer expectations and reporting The expectations of clients and customers vary depending on the sector in which an organisation operates. However, client expectations are changing and, regardless of sector, they are demanding an increasingly well communicated and open relationship with organisations.

Organisations that understand the context in which they operate, are honest about the issues they face and set an inspiring

vision of the future will thrive in the emerging low carbon and resource constrained economy.

In part, this relates to the potential for a manufacturer to anticipate the big challenges of society and develop innovative products that help address emerging demand.

In many instances, we see the most successful green or clean technologies emphasising the quality of the product rather than leading its marketing with environmental credentials.

This trend is, at least in part, a reaction to the tendency in recent years towards making unsubstantiated or superficial ‘green’ claims or commitments in certain sectors. It reflects an understanding that reputation will be held to intense scrutiny by customers, clients and broader stakeholders. We are also seeing a change in non-financial reporting, with a tendency to define and focus upon areas of material significance and to have nonfinancial reporting independently assured by appropriately qualified organisations.

How, can businesses justify to their shareholders activities and investments in sustainability that represent more than basic compliance then? We have discussed the management of risk in the supply chain; the creation of operational efficiency; addressing client expectations; improving brand reputation and innovating products that meet the needs of a changing world. When these and other themes are subject to a thorough materiality assessment and framed within a contextually relevant strategy, the result is an excellent proxy for good strategic leadership and a clear indicator that an organisation has its eye focused on the delivery of shareholder value into the medium and longer term.

It has long been understood that companies need to be resource efficient to compete. That simple truth underpins many of the

Fot more information please visit: www.bdo.co.uk

59

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Systems and Automation

Automation

for differentiation Attendance from professionals in the processing and packaging machinery industry topped 11,000 at this year’s premier UK machinery exhibition as increasing interest and awareness around automation opportunities attracted potential investors.

the processing and packaging machinery industry.

Nicola Swann from Videojet Technologies was named winner for 2011, with Sabine Fiehl from Busch UK and Greg Austin from Endoline Machinery collecting silver and bronze awards respectively.

The addition of the Manufacturing Forum to this year’s visitor programme also proved successful.

The Forum consisted of seminars presented by some of the industry’s most influential packaging, processing, vision and robotics experts followed by lively debates on some of the hottest engineering and production topics affecting the sector.

Organisations such as Marks & Spencer, The Packaging Society and sponsors B&R Industrial Automation gave insightful presentations on topics from the automation of chilled ready meal production to energy efficiency in motion control.

R

unning from 27 - 29 September at Birmingham’s NEC, the PPMA Show welcomed over 320 world-class suppliers, each dedicated to helping visitors improve their manufacturing productivity and efficiency in the food, drink, pharmaceutical and cosmetic sectors. As the biggest industrial gathering to focus exclusively on these sectors, the show welcomed visitors from around the globe looking to source the latest processing and packaging machinery.

Neil Fowell, managing director of Yamato Scale Dataweigh, an exhibitor at the event, commented: “We had an extremely successful three days at the PPMA Show this year. The visitors were of a high quality and spot on in terms of target for us - plus there was a constant stream of them to our stand which is always encouraging.”

The show also recruited a number of new exhibitors this year who were keen to showcase their range of products to the high-calibre of visitors attending. Anna Edwards, marketing manager of KDH Projects, commented: “This is the first time we have exhibited at the PPMA Show and we’ve generated a lot of leads. We build and refurbish factories rather than supplying the equipment for them and this unique selling point has gone down very well with visitors – there’s no doubt that some of these customers will come back to us in the future.”

Alongside the exhibition there were a number of new attractions to ensure both visitors and exhibitors were up-to-date with the latest industry developments and trends.

The ability to exploit automation technology has become increasingly evident in recent years as a differentiating factor between competitive organisations and those struggling with production costs. In recognition of this the organisers of PPMA this year launched the Ones to Watch Awards.

The new competition recognises promising under 35 year olds who have made a real impression on

We had an extremely successful three days at the PPMA Show this year. The visitors were of a high quality and spot on in terms of target for us Neil Fowell, Managing Director, Yamato Scale Dataweigh

Automation is hitting the headlines in industry press The need for higher levels of automation in UK manufacturing has recently enjoyed a raised profile with significant partnerships and funding deals being struck by the British Automation and Robotics Association (BARA). In September government awarded BARA £600k to fund an advisory campaign for manufacturers, educating them on the opportunities and requirements inherent in automation investments. The Food and Drink Federation, representing one of the sectors with the highest scope for automation, has partnered with BARA for a series of workshops in order to help UK manufacturers keep pace with automation activity in mainland Europe.

Investigating automation trends and challenges in more detail The Manufacturer will include a special automation supplement in its December issue. The supplement is to be produced in association with BARA.

Have your say at www.themanufacturer.com

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For more information on Columbus manufacturing, including case studies, videos and white-papers, visit www.columbusglobal.com/manufacturing

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Building the extended At Cambridge-headquartered Mundipharma International, the company’s existing spreadsheet based planning system is being replaced by an investment in Infor’s SCM Demand Planning solution, slated to go live in November. Malcolm Wheatley explains the significance in terms of technology maturity for supporting an extended enterprise.

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he Mundipharma solution will increase visibility across the company’s complex supply chain. As well as a European distribution centre in Holland, this comprises a number of independent subsidiary companies that are responsible for sales, marketing and logistics in their respective countries, and a number of in-house international manufacturing facilities - including Cambridgebased sister company Bard Pharmaceuticals.

Selected from a shortlist of seven vendors, and linking users across no fewer than eleven countries, the stated goal is to improve Mundipharma’s demand forecast accuracy, thereby helping the company to improve the availability of its products and reduce inventory.

“Ensuring the availability of products is absolutely imperative in our industry, therefore we need a demand planning system that leaves no margin for error, and enables us to meet demand while minimising oversupply,” says Mundipharma’s European supply chain manager, Warren Eagling.

And critically, he adds, “Infor’s SCM Demand Planning impressed us with its ability to support our complex supply chain.”

It’s the supply chain Over ten years ago, Martin Christopher, professor of supply chain management at Cranfield University, powerfully expressed similar sentiments in words which have resonated ever since: “It’s no longer companies competing, but supply chains.”

Hence, of course, the ‘extended enterprise’ - a view of business as a collection of supply

chains, rather than as a single business operating in isolation. But how do real-world manufacturers cope with this new competitive paradigm?

More importantly, perhaps, how do their ERP systems cope?

And what tools and techniques do they employ to bridge any shortcomings?

Ask such questions, and it soon becomes apparent that there are few clear-cut answers.

Organisationally, for instance, relatively few businesses actually see themselves as an extended enterprise or as a collection of supply chains. Indeed at the recent Brammer Awards for excellence in operations and maintenance only around 10 manufacturers from a group of nearly 100 put up their hands to confirm they thought of themselves as supply chain businesses in terms of being part of an extended multibusiness enterprise. The question was posed during a presentation on supply chain strategies delivered by Dr Keivan Zokaei of consultancy SA Partners and Warwick University.

“What companies need to understand is that there’s the demand-generating side of their business - and that everything else is the supply chain,” says Hugh Williams, managing director of High Wycombe-based Hughenden Consulting. “Usually, though, they’re broken up into silos, and don’t see it like that at all.”

Technology, too, is a barrier to the extended enterprise. Roll the clock back a few years, for instance, and ERP systems were essentially single-business platforms, dealing with the extended enterprise through the traditional means of sales orders, purchase orders and other arm’s length transactions.

No longer. While the required functionality might be less allembracing than manufacturers might ideally wish for, most at least offer some form of electronic connectivity with trading partners.

The trouble is, goes the argument, third-party specialist providers arguably offer better connectivity - and it’s precisely that connectivity that underpins the whole logic of the extended enterprise.

Only connect “Manufacturers have been brainwashed into regarding ERP as a universal transaction platform,” says Michael O’Brien, head of marketing at Dublinbased supply chain document automation vendor Celtrino, which numbers Unilever, CocaCola, Imperial Tobacco, Mars

Companies need to understand is that there’s the demandgenerating side of their business - and that everything else is the supply chain Hugh Williams, Managing Director, Hughenden Consulting

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and Heineken among its 600 or so customers. “But that ignores the fact that bolting-on ever more functionality onto an ERP system is time-consuming, expensive, and a heavy drain on internal resources.”

Better by far, he argues, to use a supply chain transaction platform purpose-built for the job securely exchanging transactionrelated documents electronically: purchase orders, invoices, shipping notes, goods inwards received notes, statements and everything else.

But impressive though Celtrino’s customer base is, it’s dwarfed by the integration platform industry’s 800lb gorilla: GXS’ GXS Trading Grid, which in 2010 managed over ten billion transactions carried out between 400,000 companies.

Cloud-based, it employs the analogy of the telephone exchange: connectivity is easier when multiple parties connect to a single point, rather than each party attempting to connect with every other party on their own.

“Users of GXS Trading Grid need not license any software or purchase any server hardware in order to leverage its extensive suite of B2B integration services,” says Mark Morley, GXS director of industry marketing. “Many customers connect their SAP or Oracle ERP application to GXS Trading Grid directly, enabling seamless integration with their business partner community.”

And the power of that integration increases with the number of businesses connected to it - the so-called ‘network effect’. In the automotive sector, for instance, GXS Trading Grid connects 95% of the automotive companies in the Fortune 500, 75% of the top 20 automotive OEMs, and 81% of the top 100 global automotive suppliers.

The footprint in sectors such as hi-tech, consumer packaged goods, and financial services is almost as extensive.

But GXS’ Trading Grid isn’t the only game in town - or indeed, the only means of achieving the extended enterprise.

Customers can connect their SAP or Oracle ERP application directly, enabling seamless integration with their business partner community Mark Morley, Director of Industry Marketing, GXS

Long-established Sterling Commerce, for instance, has recently been acquired by IBM, as Big Blue seeks to bolster its footprint in precisely this extended enterprise marketplace. Industry analyst group IDC Manufacturing Insights has identified the acquisition of Sterling Commerce as a major competitive move by IBM to get ahead in the race to smooth business-tobusiness operations.

“Typically, ERP systems have been internallyfocused, and aren’t optimised to interact with customers, especially through multiple channels,” notes Ronald Teijken, commerce solutions regional leader at IBM. What retailers such as Tesco are adept at doing, in short, manufacturers can struggle with.

But not shoe manufacturer Crocs, which has leveraged Sterling Commerce’s integration capabilities to combine an internet-based channel, a retail channel and a wholesale business - each with very different volumes and characteristics, spread across four global regions and fed by supply chains originating in Mexico and China.

A heavily-customised ERP system had required manual processes to manage orders, resulting in long lead times and customer dissatisfaction.

The Sterling/IBM solution now sees all inventory is planned and reserved by channel, with each channel ‘owning’ the inventory reserved for it, and is measured on order volume and the amount of inventory on reserve.

Typically, ERP systems have been internally-focused, and aren’t optimised to interact with customers, especially through multiple channels Ronald Teijken, Commerce Solutions, IBM

Fill rates have improved, cancellations have dropped, and sourcing and scheduling has improved enormously.

“It’s doing exactly what Crocs needed it to do, with an expected return on investment within 12 months of implementation,” is how Brian Horsman, senior director of IT at Crocs, sums up the impact of the solution. For many more businesses, though, the extended enterprise remains a dream.

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Fertile

Microsoft Dynamics AX is helping an acquisitive agri-services group roll out consistent processes across the enterprise. Malcolm Wheatley investigates the technology selection process.

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t fast-growing Dublin-headquartered agri-services group Origin Enterprises, an implementation of Microsoft Dynamics AX is rapidly re-writing the art of the possible.

Soon, says Origin’s chief information officer Derek Wilson, the entire business, and some of its highly-specialised IT capabilities, will be united under a single ERP system.

Better still, as the business expands, newly-acquired businesses can be rapidly folded into the Dynamics AX system, delivering visibility and integration as well as IT economies of scale.

Yet when Mr Wilson arrived at Origin at the end of 2007, as the company’s first-ever chief information officer, such ambitions were firmly set in the future.

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Image: Smart Farming quad bikes

ground “It was very much part of my brief to find replacements for a number of systems that had served the business very well for many years, but which were no longer cutting-edge,” he recalls.

“It had become very clear that we weren’t capitalising on what new technology could offer - either to us, or to our customers.”

In particular, explains Wilson, the business lacked a single formal ERP system, relying on standalone ‘best of breed’ applications chosen for their fit with Origin’s needs at the time, and with interfaces built between them.

“We had a mix of packaged software solutions, for example finance and stock control, coupled with custom-built applications to handle the specific needs of our manufacturing process. A case in point was

a ‘formulation’ calculator to develop formulae for particular manufacturing requirements, and a distribution application to handle our transport and despatch requirements.”

What’s more, the disparate parts of Origin had very different requirements. A focused agri services group, Origin’s mission is the provision of sustainable and profitable growing solutions for primary food producers, such as farmers, through the provision of customised advice and agri-inputs including fertilisers, seeds, fungicides and herbicides. But the company also has interests in consumer foods, animal feed ingredients and marine proteins and oils.

Geographically, the company’s reach embraces Ireland, the United Kingdom, Norway, Poland and Ukraine.

Specialfeature Columbus

Market survey Beginning with a survey of the ERP marketplace in mid2008 and a formal request for further information from a number of vendors, Wilson soon whittled down the number of systems under active consideration to a shortlist of vendors to be approached for further clarifications, product demonstrations and site visits.

In parallel, too, he was talking to potential implementation partners, determining their capabilities, assessing their relative strengths and experience, and talking to them about the two particular aspects of Origin’s IT environment that would need special care.

“We’d pretty much decided on Microsoft Dynamics AX when our Masstock business, a specialist agronomy advisor and solution provider to over 10,000 farming businesses throughout the UK, made two acquisitions,” says Wilson.

This development yielded a combined business entity with three separate systems on three separate platforms. For each of these, and for the other Origin businesses the solution finally identified would need to be appropriate. In February 2010, the decision was made. All the requirements of the various Origin businesses could be met by Microsoft Dynamics AX. When considering the issue of implementation one competing partner stood out for Origin as far and away the best fit, Columbus.

“Columbus combined an in-depth knowledge of manufacturing and distribution with a corporate culture that we really bought into,” he explains.

“The Columbus people know what they’re talking about, they work as a team, and they are confident and self-assured because they’ve done it before, and can be upfront and honest about what will and won’t work.”

Image: A Precision agronomy plough

Columbus combined an in-depth knowledge of manufacturing and distribution with a corporate culture that we really bought into Derek Wilson, Chief Information Officer, Origin

the farming and horticultural demand cycle had passed, work began in earnest.

And in addition to a conventional migration from ERP and standalone packages, it was necessary for Columbus to replicate the functionality of the specialist formulation application, as well as not just duplicating but extending the functionality of the distribution application that Origin had historically used.

With fertiliser, agri-chemicals and seeds requiring careful transportation management and control, the need was for a distribution application that would help the business to construct loads that reflected both desirable route sequences and the relative priority of orders.

Achieving this capability within the framework of a Microsoft Dynamics AX system called for Columbus to develop a purposebuilt solution.

By the summer of 2011, substantial progress had been achieved, and individual Origin businesses could go live.

On August 1, two UK-based businesses went live as planned: Origin Fertilisers UK and P.B. Kent, a specialist horticultural firm. The Masstock business and Goulding Chemicals in Ireland, both go live at the end of November 2011. In January and February 2012, more Origin businesses will join those already functioning with Microsoft Dynamics AX. These businesses will include some which had not been acquired at the time of the original evaluation.

“If we’re going to grow through acquisition, we need to systemise our business processes, to make them consistent and readily replicable,” sums up Wilson.

“And together, Columbus and Microsoft Dynamics AX are delivering that consistency.”

For a review of the UK launch of Microsoft Dynamics AX 2012 see p78 Microsoft Dynamics AX is delivered to UK customers through a network of specialist implementation partners each of which focus on vertical sector needs.

Columbus is a leading partner for manufacturing implementations with strong experience in food manufacturing and distribution. The company is a Platinum Sponsor of The Manufacturer Magazine’s ERP Connect events.

Go live Accordingly, in May 2010, as soon as the seasonal peak of

For more information please visit: www.columbus.co.uk

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ITnews..

Core values and picking winners Mike Evans, research director at IT analyst firm Cambashi, provides some insight into recent events in the technology press.

In October, two news items, one good, and the other sad, triggered thoughts about innovation in Britain’s manufacturing industry.

The sad news was Steve Jobs’ death at the early age of 56. At Apple, he created a company with solid brand values: industrial design excellence and product and business model innovation, both of which justified premium pricing for Apple’s products. Apple recognised that its core values were innovation and design. Product manufacturing was outsourced to companies with manufacturing as their core value.

ARM, a British success story has replicated this approach to great effect. It designs the chips found in many smart devices from mobile phones to industrial control systems. ARM provides the infrastructure for devices to be built on its chip however, it licenses the design for others to manufacture and has created an eco-system of tools and developers that make life easier for its licensees.

The good news referred to earlier is the announcement of a £145m government investment in e-infrastructure. The areas that will, with a suitable business case, be supported include software development, high performance computing and soft skills such as training.

Much of British manufacturing has analysed its operations and taken the initiative of focusing on core values. Often these are to innovate, especially in industrial design and advanced manufacturing processes. In our blog (which can be found online at www.thamanufacturer.com), we’ve commented that changing business drivers need new enterprise software applications that will enable managers to implement business initiatives in response to those drivers. Will this government investment assist in that process?

Britain is rightly famous for science and innovation.

It has several of the best research universities in the world and it has several world leading software developers. Autonomy, just bought by HP for £7.1m is one. Politicians and civil servants have been reluctant to intervene. They still repeat “you can’t pick winners - let’s leave it to the market.” Autonomy sold for 79% more than its market valuation. Let’s hope civil servants assessing investment business cases for this fund do a better job than the market did over Autonomy.

HEALTH & SAFETY

SAP cuts accident rates with enhanced incident management solution As part of its commitment to improving environmental health and safety, SAP has added new functionality to its Environmental Health and Safety Management module to provide companies with better visibility across their operations, allowing them to proactively identify safety risks before unwanted incidents occur.

SAP’s Environmental Health and Safety Management application now allows manufacturers to move beyond simple compliance reporting, and to take a more systematic approach to incident management and operational safety, says the company.

For each fatal or catastrophic accident, there are typically 600 near miss incidents that occur in the background, it claims. The module now provides better insight into these, helping companies to identify and resolve root causes of incidents.

According to SAP, the new incident management capabilities within the Environmental Health and Safety Management module allow companies to better capture, analyse and act on near miss and incident data.

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ITnews...

LEAN

OUTSOURCING

Infor EasyLEAN boosts on-time delivery performance

UK’s first technology innovation centre signs IT deal

Further evidence of the growing power of ERP ‘lean modules’ comes with news that ground-penetrating radar manufacturer Geophysical Survey Systems has increased its on time delivery performance level from 60% to an average of 93% through the use of Infor ERP VISUAL’s EasyLEAN module.

The Manufacturing Technology Centre has signed a contract with specialist supplier ICM to design and install its entire IT infrastructure. The move will allow the centre to accelerate the deployment of IT services, and also provide flexibility for its IT usage to grow with the business.

The module, which alters traditional planning methods to reduce inventory and smooth production flow, cut lead times by more than half, increasing customer satisfaction through punctual shipments and amplified throughput.

“Prior to EasyLEAN, we had too many material shortages and inefficiencies on the manufacturing floor,” said Jack O’Leary, vice president of operations at Geophysical Survey Systems. “Punctual shipments lead to happy customers, which ultimately generates more revenue for our company.”

The Coventry-based MTC is to form part of the Government’s £200 million investment in a network of Technology Innovation Centres to promote the expansion of Britain’s manufacturing sector to become more competitive in global markets, the newly-built centre will span 13,500 square metres, and support more than 300 users.

Remotely monitored via ICM’s Birstall data centre, any IT problems will be rectified by a dedicated on site engineer, who will also offer day to day support to IT users on site.

BANDWIDTH

Riverbed gives DEK bandwidth efficiency Global provider of screen printing equipment and processes, DEK, has 18 offices worldwide spanning China, USA and Europe. The company was suffering sluggish wide area network performance. The available bandwidth was being affected by applicationlevel and Transmission Control Protocol ‘chattiness’.

The company was restricted by the cost limits of continually expanding its bandwidth, but had to address associated problems with its business critical ERP system - transactions were taking 5-6 seconds per keystroke. DEK decided to create a new WAN architecture using Riverbed Steelhead appliances to optimise traffic and use de-duplication technology to streamline the data flow.

The result in the initial trials included a decrease in the time taken for large file transfers from 146 seconds to just 14 while ERP access efficiency increased four-fold. The results were enough to convince the DEK team to roll out Steelhead appliances to all of its offices.

IT SECURITY

SCADA systems under threat With the Stuxnet attacks on Iran’s nuclear processing capabilities barely a year old, suspicions are growing regarding widespread vulnerabilities in SCADA systems.

Italian researcher Luigi Auriemma, for instance, has made two disclosures of weaknesses found in SCADA systems from a number of vendors – the first prompting the United States Computer Emergency Response Team (US CERT) to issue four alerts warning about the vulnerabilities.

The most recent flaws discovered by Auriemma affect SCADA products from six vendors, including Rockwell Automation, Cogent Datahub, Measuresoft and Progea. Several of the flaws could enable remote execution attacks and denial of service attacks against the vulnerable systems, say experts.

Have your say at www.themanufacturer.com

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Nicola G scrap m uest, market in e UK, wa tal merchan g manager a rns ma t Alche t nufact my Me their pr u t rer als em epidem ises as met s to secure al theft ic prop soa an estim or ated £ tions costing rs to 1 billio n annu UK industry ally.

T

he increase in metal value and the ease with which ‘scrap’ can be disposed of has contributed greatly to the increase in theft.

It is vital that businesses with even small amounts of metals review their security and storage arrangements.

Every UK manufacturer needs to understand the broad scope of areas that thieves are working in and the impact that metal theft can have on its own business - materials are being stolen in both their raw and scrap form, catalytic convertors are frequently disappearing from entire fleets of company vehicles and thefts of copper cable from companies such as BT and the Energy Networks have the knock on effect of threatening daily trading with the loss of telephone, broadband and power. Attacks on BT alone have risen by 12% in the last year and Network Rail are suffering even further with a 52% leap in a year, now making metal theft its largest crime problem.

British Transport Police state that metal theft is, after counter terrorism, their largest problem.

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Map showing BT metal theft hotspots

Alchemy Metals recently met with BT, Network Rail, the Energy Network Association, British Transport Police and English Heritage to discuss the issue and how it is adversely affecting their businesses.

Luke Beeson, general manager, BT Security commented: “Theft of telecommunications cable is a significant issue causing widespread disruption for a number of our business customers. We are having to invest millions of pounds to combat it working in partnership with other affected industries and local and national law enforcement agencies.”

Large amounts of metal stock costing tens of thousands of pounds are disappearing from factories overnight, the secure housing of scrap metal generated from the manufacturing process is critical – if there is a way to

take materials in any form the criminals will do so, often leaving costly repairs in their wake.

Alchemy Metals, one of the largest non-ferrous merchants in the South East, manages the scrap metal waste of over 1,000 UK manufacturers and the theft of materials is a frequent problem for an increasing number of their clients.

Alchemy Metals’ managing director Philip Newman says, “We are working closely with our customers to advise on more robust ways to store and manage their metal holdings to reduce the opportunity for theft - implementing simple security measures such as the ‘SmartWater’ labeled containers that we provide can drastically reduce the scope for thieves.”

The enemy within The threat to UK manufacturers is not just an external one –

Specialfeature Metal theft

The issue of metal theft has recently been championed in the national press. It was a leading subject on the BBC’s The Politics Show on Sunday, October 16.

In parliament there is currently an e-petition which calls for cashless metal trading. This is being backed by Labour peer Lord Faulkener of Worcester who told parliament

there are recorded incidents of company employees stealing both clean and scrap materials from their employers over extended periods of time, often fraudulently changing company documents. In addition unscrupulous merchants have been proven to manipulate their customers weights to their own advantage.

Those responsible for the thefts range from opportunistic petty criminals to highly organised gangs, they both have one thing in common and that is an easy outlet for the sale of stolen metal.

Call for legislative change The current Scrap Metal Dealers Act is believed by many industries to be no longer fit for purpose - it only requires the dealer to record the vehicle license plate and name given by the seller with no further mandatory checks required.

Ironically a petty thief could potentially steal from a manufacturer and then sell the stolen materials to the same

We are working closely with our customers to advise on more robust ways to store and manage their metal holdings to reduce the opportunity for theft Philip Newman, Managing Director, Alchemy Metals

that it is time for “new legislation which increases maximum penalties, makes cash transactions illegal, and replaces the present registration system for scrap metal dealers with a proper licensing system.”

While this support for reform is a positive step Ms Guest warns that cashless trading will merely push problem of metal theft down a tier to the unregistered merchants. “What we are looking for is a complete reform of the system which should include a full licensing system across the whole industry along with a clear audit trail,” she says.

scrap metal merchant the manufacturer uses with no questions asked and receive cash in hand for their crime. The problem is made worse in that not all dealers are licensed and the police do not currently have powers to close down rogue scrap yards.

Police forces across the country are now being forced to tackle the rapid growth of metal theft but without robust changes to legislation their hands are tied.

The Government has recently acknowledged the ‘serious challenge’ from metal theft and the Prime Minister has confirmed that the Government is committed to dealing with the issue as a priority, as a result they are now reviewing the 1964 Scrap Metal Dealers Act. Key Government departments are looking at various ways to change the Act including the introduction of a compulsory audit trail process similar to that which Alchemy Metals have already implemented any materials that are bought

through the ‘gate’ for cash are purchased on an appointment only basis – the client is required to provide full proof of identity and then the client, their vehicle and the materials that are being sold are all photographed.

Details of every transaction are routinely provided to the Police.

Government officials are also discussing a ‘cashless’ model, this is more common in the USA and Europe and removes the attraction of a quick and untraceable cash transaction.

Legitimate scrap metal dealers should have nothing to fear from robust legislative changes. Only by closing down the means of disposal of stolen metal can the police have any real effect on metal theft - this can only be achieved by a reform of legislation governing the entire metal recycling trade thereby giving law abiding dealers an environment in which to trade fairly and equitably.

Have your say at www.themanufacturer.com

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Dynamic technology T

he Manufacturer has covered the run up to the launch of this product with some diligence - since July we have featured interviews with Microsoft leaders, case studies with early adopters in the manufacturing industry, analyst commentary and more.

Why the fuss? Dynamics AX 2012 has been touted as an offering for a new age of enterprise technology at a time when there is growing dissatisfaction among ERP users with legacy systems installed in the 90s. So what has Microsoft done differently this time – and is it unique in doing so?

The launch of Dynamics AX 2012 at Microsoft’s London offices near Victoria was a slick affair.

The demo session delivered by Andrew Wyld, Microsoft partner technology advisor, showed off the familiar user interface in the AX system to advantage. It cannot be denied that, when it comes to usability, Microsoft’s offerings always have an advantage – users are simply comfortable with the logic of the layout, ubiquitous in the programmes of the Office suite.

But a friendly look and feel is not enough to make a product stand out as a business tool.

Previous articles in The Manufacturer have already recognised the time Microsoft has taken to improve the mixed-mode manufacturing capabilities of its ERP offering and consultation with lean experts has also paid off. Microsoft had already made clear that understanding the needs of lean manufacturing was critical to its development strategy with the acquisition of eBECS’ lean manufacturing module.

But AX 2012 has further improved the fit between

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Screen shot showing some of the organisational restructuring tools in Microsoft Dynamics AX 2012

On September 13, Microsoft UK officially unveiled their newest ERP offering, Microsoft Dynamics AX 2012.

Jane Gray attended the launch and here she reviews the capabilities displayed and their appeal for ERP users in the manufacturing industry.

lean principles and technology – historically unhappy bed-fellows.

These developments in AX 2012 have been widely recognised by IT commentators and industry analysts like Gartner, but in Mr Wyld’s demonstration it was another element which really came to the fore.

As companies attempt to cope with a difficult economic environment and unstable markets Microsoft has observed the increasing pressure for diversification and for flexibility of strategic direction.

It also took note of forecasts that, as the business title Forbes put it, 2011 would be “the year of mergers and acquisitions”.

In response, AX 2012 offers distinctive organisation mapping and restructuring tools. John Rosbotham, director of IT and project assurance at PriceWaterhouse Coopers spoke at the launch event and identified these tools as a “definitive strength” for AX 2012, their drag and drop logic and visualisation options standing out in the ERP market. Figure 1 shows one of the mind-mapping style representations users can choose to alter reporting hierarchies and add business streams while keeping track of potential information gaps and unnecessary complexity.

Sentiment among manufactures attending the AX 2012 launch ranged from enthusiastic evangelism to reserved interest but there was certainly no one unimpressed by the technology.

Delegates from crisp manufacturer Tayto who are looking for upgrades or alternatives to their current a Microsoft Dynamics NAV platform concentrated their questions on the financial reporting mechanisms in the product. As Mr Wyld showed in his presentation these include simple but powerful tools for expense validation – perhaps more important to organisations since the introduction of the new Bribery Act in July this year.

Authorisation and accountability for financial movements and other important business transactions is made logical in AX 2012 by the role centre in which access to analytics and information can be customised. Role-based interfaces are not unique the Microsoft – Infor, for instance, was among the first to announce job-oriented functionality in its products at UK user event, Inforum, in July 2010. Other enterprise technology

Specialfeature Dynamic technology

vendors too have tagged on to this trend with PTC – the product lifecycle management and design software giant – issuing strong messages about its role-based development strategy.

The AX 2012 role centre is certainly among the best examples of such customisation functions. Figure 2 shows how a cheif executive might customise their role centre to establish a kind of ‘home page’ which can give a pertinent ‘at-a-glance’ view of the business information most relevant to their daily work.

As well as portraying the health of the business through top level KPIs Mr Wyld explained that the center is also able to interpret this data in order to produce a top priority task list for the CEO or whichever role being viewed.

Another element of AX 2012 which seemed to genuinely surprise and interest manufacturing delegates at the launch was its manufacturing execution system. Previously a best of breed add-on, this system is now included in the standard manufacturing offering.

For Fairfax Meadow, an industrial catering company, this was an important motivator in their decision to upgrade to AX 2012 from AX 4 – two iterations older.

Fairfax did not purchase the factory data capture module for AX 4 and currently use paper based systems to record shop floor information.

Reasearch from IDC Manufacturing Insights recently showed that more than 30% of manufactures feel their ERP systems are not powerful enough to dig down into essential operational data and have consequently invested in seperate MES or similar systems.

The AX 2012 MES inclusion with its touch screen shop floor control system will change expectations around the scope of an ERP investment if wider industry opinion comes to agree with the view of Tony Carlisle, IT manager at Fairfax.

“The functionality in the shop floor data capture area for AX

Screen shot showing an example of the role centre in Microsoft Dynamics AX 2012

The functionality in the shop floor data capture area for AX 2012 is much enhanced and will support our move to real time data capture Tony Carlisle, IT Manager, Fairfax Meadow

2012 is much enhanced and will support our move to real time data capture,” he says. “For Fairfax Meadow to be able to embrace this capability is part of the driving force of upgrading.”

But technology is moving faster every day and despite all the improvements made to AX 2012 John Robotham issued an impartial reminder to delegates at the launch event that “There is some good stuff in this release but as AX matures this will develop and be something for users now to consider.”

Homing in on a few areas where Microsoft is likely to focus for its next steps with the software Mr Robotham identified cloud-based capability as the conspicuos absence in AX 2012.

“This release is not quite there with cloud,” he commented. A cloud based version is planned with the next release, AX 7 and another area which is likely to receive focussed attention for further development will be the system’s capability in supporting corporate responsibility and environmental compliance.

In terms of practical advice for manufacturers looking to implement this technology Robotham said that while it is highly desirable business leaders need to give attention to the cost of upskilling their workforces; enabling them to get the fullest ROI for the business. Robotham highlighted the work Microsoft has been doing with with some

universities to make this learning process easier, more accesaible and cheaper than has historically been the case with ERP training.

Microsoft Dynamics AX 2012 is primarily designed to make an impact in the mid and upper market space though Robotham was also confident that it will appeal to large global corporations for localised solutions. While he was complimentary of the competitve pricing structure for AX 2012 - Microsoft have opted for pricng on a named user basis - Robotham felt that small organisations would still be unlikely to implement this release.

Technolgy issues aside the AX 2012 launch highlight Microsoft’s engaged user base – perhaps the most important element in its development strategy. The dialogue between vendor and users during demonstrations and case studies was open and ingenuous with feedback, questions and suggestions intelligently recieved. If the launch made one thing clear it is that Microsoft has committed itself to a development journey with clients, ensuring vertical sector needs and individual business interests are addressed rather than attempting to force inappropriate technology solutions. Microsoft’s network of specialist resellers, like eBECS and Columbus are key in providing this; both were in strong evidence at the launch.

Have your say at www.themanufacturer.com

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T

he Cloud has become respectable.

Early worries over reliability and security have proved largely groundless, and no longer does it

seem madness to hand over responsibility for mission-critical applications and data to a server farm - or farms - potentially thousands of miles away.

What’s more, the financial logic underpinning the Cloud has largely fulfilled initial expectations. As the articles in this short supplement explain, cloud computing offers cash flow and cost advantages over on-premise solutions, and turns lumpy large expenditures into smoother periodic subscriptions.

IT executives are no longer looked at askance when they suggest the Cloud and IT is no longer quite the gatekeeper that it was. Cloud-based application vendors are increasingly pitching directly to manufacturing, procurement and supply chain executives, secure in the knowledge that the solutions they are

Cloud computing supplement

proposing are affordable and secure with zero or very limited impact on an enterprise’s IT infrastructure.

For those of us who remember the sometimes crippling costs and staffing levels associated with the mainframes and UNIX-based minicomputers on which manufacturers were forced to rely on in the 1980s, Cloud really is a new computing paradigm.

But how best can companies make use of it? What types of services and applications are on offer? Is cloud-based ERP viable, or just a dream? And how does cloud-based Software as a Service (SaaS) work in practice?

In the following pages you’ll find some of the answers to these and other questions.

Malcolm Wheatley Contributing IT Editor The Manufacturer

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cloud computing supplement

Cloud computing comes of age The Cloud has arrived, says IT editor Malcolm Wheatley, and with it come some intriguing possibilities.

T

Fastener and fixing manufacturer ITW Construction Products, to take another example, uses a cloudbased EDI file format translation tool from Wesupply in order to communicate with its customer base - a number of the UK’s largest builders’ merchants and specialist hardware retailers.

“We don’t have to re-key any orders: it’s all automatic and electronic, and there are no transcription errors to worry about,” says ITW IT project manager Mark Burridge. “We come into work

he roll-call is getting longer. What is it

in the morning, and that day’s orders to be shipped

that links - sometimes literally - companies

are all there, ready to be processed. Does it worry us

such as Nestlé, Rentokil Initial, Jaguar Land

that it’s a cloud-based service? Not in the least.”

Rover, and Procter & Gamble? Answer; the

Cloud - and a reliance on cloud computing.

For Rentokil and Jaguar Land Rover, for instance,

All these businesses rely on software that is sold as a service, rather than sold as a licensed application to be installed on a company’s servers. And, given

it’s Google Apps: cloud-based substitutes for

fresh impetus by the move to cloud computing, it’s a

Microsoft’s familiar office productivity tools - e-mail,

software paradigm that is undeniably gaining traction.

spreadsheets, contact managers, word processing and the like.

Nestlé and Procter & Gamble, meanwhile, are users of GT Nexus, a cloud-based collaboration platform that

It’s not difficult to see why. ‘Software as a Service’ (SaaS), as it’s termed, offers a number of compelling advantages over traditional on-premise applications.

In contrast to the IT investment called for by

connects logistics service providers, carriers, trading

on-premise software, for instance, the SaaS model

partners and banks, with the goal of improving the

typically requires users to pay a fixed monthly fee,

speed and ease of doing business globally.

based on some mutually acceptable definition of

And many, many more manufacturers use

usage, and it then becomes the concern of the SaaS

the world’s largest cloud-based trading partner

provider to worry about servers, backups, and the

integration platform, GXS Trading Grid, which in

associated IT plumbing.

2010 managed over ten billion transactions carried out between 400,000 companies.

But your business does not need to be a large multinational to take advantage of the Cloud.

Workington-based Pentagon Chemicals, has its

At a stroke, on-site software upgrades are eliminated, too: the roll-out of new software takes place on the host server, not the client computer or corporate server. Accordingly, users benefit from the moment the latest version is released - and not when

ERP system housed not on in-house servers, but

their internal IT administrator gets around to installing

in the Cloud, in the shape of market leader SAP’s

it. And cloud computing stretches the paradigm even

cloud-based offering, Business ByDesign.

further. While precise definitions of cloud computing vary, there’s no arguing about the core logic.

Instead of SaaS-based application vendor hosting their products in their own data centre, they simply

Your business does not need to be a large multinational to take advantage of the Cloud

hand-off the data centre side of the business to a thirdparty specialist. With giant server farms and ‘fat pipes’ to the Internet or other communications platforms, the economics and reliability of application-hosting is transformed - especially for niche players.

In short, the Cloud has arrived - and expect to hear a lot more of it in the years ahead.

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QAD

Flexible deployment Key selling points for QAD On Demand This cloud based solution: Is low cost Can be rapidly deployed Provides a full strength SaaS offering for global manufacturers

products to help improve fibre

Fibre optic manufacturer, Miniflex, has selected QAD On Demand to support its transition from a research-based startup to a competitive manufacturer with a global footprint. This article explains why.

M

iniflex, a manufacturer

allowing its IT staff to focus

worldwide in such diverse industries

internal resources elsewhere.

as telecommunications, medical,

Moreover, QAD On Demand

automotive and defense.

mitigates many of the IT and

Although Miniflex management

financial risks associated with

still view the company as a

a new ERP implementation, as

research-based start-up, it operates

all of the software, systems and

a complex manufacturing business,

infrastructure are managed and

supporting a growing global

administered by QAD in a secure,

customer base, and is now poised

reliable and industry compliant

for full production. Miniflex needed

data centre.

a flexible enterprise resource

This solution will provide Miniflex

planning (ERP) solution to support

with a level of ERP functionality

the company’s aggressive growth,

typically enjoyed by much larger

without taxing its current budget

companies, yet affordable and

and resources.

adaptable enough to support the

“We have three key goals –

company as it expands.

of optical fibre

growth, profitability and customer

protection,

satisfaction,” said Tom Carpenter,

most closely meets our needs,

management and installation

chief executive for Miniflex. “The

giving great functionality, superior

systems, selected QAD Enterprise

next two to three years will be

data analysis and business control,

Applications On Demand to

critical for us. It’s vital that we

out-of-the-box – at a competitive

support the transition from start-up

focus our resources on our key

price,” Carpenter added.

to full production.

goals and minimise any effort or

Founded in 1994, Miniflex

expenditure that may distract us

catapulted to the forefront of

from them. That’s why we decided

fibre protection technology with

early in the project that QAD

over 60 international patents

On Demand was the correct ERP

for its innovative products.

solution for us.”

Headquartered in Framlingham,

82

its total cost of ownership and

safety and reliability for customers

QAD On Demand is a Software

Suffolk, the company operates

as a Service (SaaS) solution that

in multiple locations, including

will provide Miniflex all of the

two manufacturing sites that

QAD Enterprise Applications

design and deliver fibre protection

functionality, while reducing

“QAD’s On Demand solution

Why QAD On Demand?

• QAD’s manufacturing focus • Ability to change models as needed or adopt hybrid approach • Industry-specific QAD Enterprise Applications editions • Process-driven implementation maps enable rapid implementation • Leverage experienced industry resources • Application and database management services • Systems infrastructure (servers, storage, networking) • System infrastructure management services • 24x7x365 technical and functional support • Disaster recovery services • Industry leading service level agreement; 99.9 per cent availability

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Web: www.qad.com

Our Passion. Your Advantage.

are under huge pressures to

“SaaS-ifying” the Supply Chain

meet increasingly tight SLA’s and customer expectations. This has increased uncertainty in warehouse and distribution activities and prompted a rise in small, temporary logistics contracts, igniting interest in flexible, low risk applications offering rapid-time-to-

As the recession continues to penetrate the UK retail industry and all those serving it, Jez Tongue of @logistics Reply explains how cloud computing presents a new opportunity for supply chain businesses

value, minimal investment and IT interruption and the option to be “switched on or off” in line with demand.

Too many business-critical, back-office operations run on IT infrastructures that are essentially fixed, ‘off-the-shelf’ products.

Based on an OpEx, ‘pay as you

S

grow’ payment model, the SaaS oftware as a Service

Today’s retail market poses

model has the ability to scale as

(SaaS) is rapidly

an extremely complex and

a business grows in capacity and

becoming “business as

challenging environment for

complexity, but more compellingly

usual” rather than a stop

logistics and distribution. With the

it provides businesses with the

gap or contingency, and it is the

provision and return of goods via

option to downscale and pay less if

supply chain and distribution arena

multiple channels being ever more

business is slow. Where with an on-

– seemingly the last industry sector

chaotic and sporadic, the knock-

premise warehouse management

for new technology to penetrate –

on-effect of heightened consumer

solution (WMS), for example,

that are set to benefit hugely.

caution has meant that suppliers

users are required to invest heavily in a fixed number of licenses, servers and IT people, a WMS ondemand aligns the warehouses’ needs to the number of functions activated on the system so only the “capacity” used is paid for.

Therefore, rather than activating and paying for unrequired users and functions, if a cloud-based WMS or a particular feature is no longer needed or seasonal demand dictates greater use, it is no harder than activating a utility. This is all managed behind the scenes by the solution provider.

These subscription-based solutions are also a cost-effective route for small and medium sized businesses because of their lower barriers to entry. Rather than a

84

@ l o g i s t i c s R e p ly

significant CapEx investment, a hosted platform requires minimal upfront cost. Instead, operating expense is smoothed over a number of business cycles, in which users pay as little as they wish with no contractual constraints.

On-premise, licenced software solutions also always come with a recurring, annual support and maintenance cost – typically 20 to 25% of the cost of the original licences – plus the requirement to up-grade to the latest version of the application every say two to three years. Although software licences have been bought and paid for by this time, there are always up-grade-related costs in the form of hardware/3rd party software up-dates, new up-grade implementation services and training on new functions and

to-benefit is a major differentiator

Ultimately - and by its very definition

features, for example. With a cloud

from traditional WMS, automation

- with SaaS, the quality of service

solution such related burdens and

projects which can take up to six

is paramount, meaning the buyer

costs are removed, as upgrades,

months, or more, to go live. A

is always in control. Because of the

maintenance and support - both

hosted, SaaS platform is therefore

monthly payment method, a SaaS

hardware and application-related

ideal for warehouses requiring

vendor has to constantly delight its

- are provided incrementally and

rapid start-up and for those which

clients – not just in the pre-licence

invisibly as part of the service.

operate in uncertain scenarios

purchase phase. If the consumer

or with very high transaction

of the service does not want to

platform is that it is quick and

requirements. Increasingly

continue, they simply stop paying

cost-effective to set-up – in some

suppliers are using it to manage

the monthly bills. That is what I

cases it can be up and running in

peak demands or one-off projects.

would define as the ultimate control!

A major benefit of an on-demand

four-six weeks, with the system paying for itself in less than three months. Here, flexible automation is built into the project to support sustainable growth in line with the business’s operational performance and needs, resulting in minimal revenue and resource interruption as well as minimisation of any ‘service level dip’. This ensures convenience for businesses with a limited budget for hardware and software investment, and

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limited IT personnel. This speed-

85

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Manufacturinginaction Putting UK manufacturers under the spotlight COSMETICS

Hampshire Cosmetics 88 The company has recently undergone expansion in its research and development capabilities.

Of Hampshire’s 166 staff, around 130 have now achieved NVQ level 2 in Business Improvement Techniques.

To sustain the value of its training investments Hampshire has also made sure to develop detailed skills matrices for all areas of the business with performance targets and KPIs. Hampshire has rented out its roof space for an installation of a 277KW solar farm.

F I T T E D F UR N I T UR E

Daval Furniture 92 In the past three years, Daval has expanded and now fits bedrooms, bathrooms and kitchens.

The company invested £2m in ‘Option-I’ technology: which allows its customers to customise orders – a capability they did not have before.

Workers are now multi-skilled and work on projects from start to finish.

New dedicated product team meets weekly.

CHEMICALS

Fine Industries 98 Fine Industries had to deal with the rise of Asia in the late 1990s after a long period of sustained success.

During the mid 2000s, the company focused on improving its culture.

In 2008 the company was bought out by the management team.

In 2012, Fine Industries will bring online one of only three approved incinerators in the UK with permission to burn hazardous liquid waste.

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Far from

cosmetic In the current climate it might be imagined that optimism would be pretty thin on the ground at a UK manufacturing SME with a predominantly domestic market and working in a highly regulated sector. Not so for Hampshire Cosmetics. Jane Gray visited the company to hear how dedication to ethical business and a clear development strategy is helping to carry it through troubled times.

A

rriving at the Hampshire Cosmetics Waterlooville plant I was woefully misled into thinking I had happened on an episode of Ground Force as I watched 10 or so enthusiastic individuals with wheel barrows descend on a small patch of ground outside the reception and transform it into a burst of flowery colour. Alas, I am yet to meet Mr Titchmarsh and his crew.

Managing Director Peter Darke explained the possible misunderstanding. “It’s part of our arrangement with the local council,” he says. “We recycle our waste glass, plastic and cardboard, for financial gain wherever possible. With the money that

88

brings in we help to support a local council run project for unemployed 18-25 year olds with an interest in grounds maintenance. They come in twice a month to manage the gardens on the site” It is an appropriate introduction to Hampshire Cosmetics, where the importance of innovating around environmental need for business benefit is a well ingrained culture which develops ahead of regulatory pressure. The recent installation of photovoltaic solar panels on the roof of the Waterlooville factory is a perfect demonstration of the way Hampshire Cosmetics takes cost, expected returns and the political context into account when considering eco-friendly developments.

“We looked into the possibility of solar panels ourselves a while ago,” says Mr Darke, “but at the time the cost was high and the payback was going to take something like 120 years.” It didn’t make sense. However, Hampshire has now rented out its roof space and installed a 277KW solar farm.

Cosmetics

Hampshire Cosmetics The installation has been classified as the largest zero capital venture of its kind in the UK. Hampshire benefit from the rent income and an immediately effective 20% discount on their energy bill while also boosting environmental credentials and providing green energy for the national grid.

Mr Darke is clearly pleased with the new installation but gives due credit to his environmental manager Karen Taylor, for arranging the nuts and bolts of the project. “Karen is immensely committed to help make our environmental and ethical agenda work. She recently won an award for Environmental Manager of the Year, a huge achievement coming from a company of our size,” he says. “We have recently placed responsibility for quality under her as well as we believe this fits well with the environmental and ethical elements of the business,” adds Darke, showing that traditional manufacturing concerns and new business expectations are becoming ever more aligned at Hampshire.

And alignment as well a clearly communicated strategy are an urgent requirement. Hampshire has been engaged for the last four years and more on a significant programme of change to re-invent itself as a full service provider, rather than a traditional contract filler. Part of this has included a complete rebranding for the company and a new emphasis on PR and marketing. The interactive website, previously a simple web page, was launched last year and the company has actively promoted its newly increased capabilities and service orientation through attendance at a variety of tradeshows and exhibitions. Even the activities of the council gardening crew contribute to strengthening the new company image – the colour schemes and layout they use in the grounds are designed to support the new brand.

But what does Hampshire’s new image as a ‘full service provider’ mean in terms of changes to the company’s operations and plant and why has the change been necessary?

“We felt we looked traditional,” say Darke in answer to the latter part of this question. “The cosmetics industry is significantly fashion led and our old web page and branding was not supporting our ambitions or clearly promoting our skills and capabilities.”

Another influence has, unsurprisingly been market demand.

Darke says there is a great deal of activity, even in a difficult climate, with customers wanting to launch new product portfolios or fill gaps in current offerings. Identifying an opportunity to provide services around these needs has meant a lot of investment, recruitment and education.

The major areas of expansion in terms of capability have centred around research and development. New staff have been recruited for the laboratory and this year around £70,000 was spent on a new pilot cell where product innovations can be produced in prototype quantities – 50-60 kilos. There has also been investment in IT infrastructure to speed up product development. The Coptis lab management system is the first in the UK and it assists in speeding up the creation of product formulations as well as analysing product toxicology and even materials sourcing.

Beyond these technical developments Hampshire has also recruited more sales and customer support staff to build its reputation as an industry service provider. Existing staff and new recruits have received training and there are

We can carry out a gap analysis on a customer’s whole range and suggest new products to fill those gaps or perhaps suggest new ranges that would complement the existing range Peter Darke, Managing Director, Hampshire Cosmetics

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now 30 Hampshire employees with NVQs in Customer Service. The newly developed skills are applied in two major areas: gap analysis and portfolio design.

Darke explains: “We can carry out a gap analysis on a customer’s whole range and suggest new products to fill those gaps or perhaps suggest new ranges that would complement the existing range. Alternatively, a customer might approach us with an idea, maybe a new skin care or hair care range, and they want it to do a variety of things or include a certain natural ingredient.

We can build a story and a range of products around their concept.”

Having gained confidence and expertise in these less traditional areas of the business Hampshire has not failed to remember its core production and contract manufacturing capabilities. As the lab and design side of the business has gathered pace it has meant increasing complexity for the shop floor. “We do short runs all the time and we might have square bottles followed by a jar, followed by a very tall bottle coming through production one after the other,” says Darke. “Our labelling equipment has to be flexible enough to allow for that and the technology is getting cleverer and faster all the time. We have to keep up.” In the last 12 months several new capping machines and labellers have been purchased and the company has

90

a programme of ongoing investment in additional plant and equipment to further support its process improvement plans.

In addition, since Hampshire’s customer bases spans everything from major international companies to small, niche brand owners workflow on the shop floor is complex.

Darke comments “We can have small batches of highly exclusive product on one side of the factory while big volume production for a major international customer is running down the other.”

It is a situation which has prompted some major restructuring in production. Describing the alterations Darke says: “Just around three or four weeks ago we did a complete factory floor turnaround. The workflow used to run north to south and now it runs east to west. We’d been wanting to do this for some time in order to make the workflow more logical. But it also supports a number of health and safety initiatives, and internal logistics issues.

We can deliver components and bulk materials to the start of the line more easily now.” The reconfiguration has also brought in more cell based assembly structures to help cope with diverse short runs and the benefits from this alterations are already beginning to show in terms of line efficiencies.

What has the staff reaction been to all this change?

The move to cell production has meant some significant changes to roles and responsibilities and has broken down demarcations between engineering professionals and front line staff. Shift patterns have also changed “Staff have risen to the challenge and accepted it well,” says Darke. This acceptance might largely be put down to the careful training and development which has been invested in over the last few years. Of Hampshire’s 166 staff around 130 have now achieved NVQ level 2 in Business Improvement Techniques, helping them to handle quick changeovers and become comfortable with a range of other lean-type efficiency methods around 50 staff have

Cosmetics

Hampshire Cosmetics also gained NVQ level 2 in Performing Manufacturing Operations. Hampshire has funded this skills development through grants from the train to gain scheme, though this pool is now running dry. “We are looking at the availability of apprenticeship funding now,” says Darke.

To sustain the value of its training investments Hampshire has also made sure to develop detailed skills matrices for all areas of the business with performance targets and KPIs. “It’s all part of the culture of moving forward,” says Darke. “People can measure their own progress, and are motivated to up-skill. The line leader can see what resource they need. Engineering has become more a more developmental, training type function and there are less communication barriers between staff from different areas.”

In addition to these overtly business related training and development packages Hampshire has also invested

Hampshire Cosmetics at a glance Location

Waterlooville, Hampshire.

Number of employees

166

Turnover

£19m

Established

1972

Moved to current site

1991

Major markets/ customers

Major international retailers, UK multiples and a wide range of brand owners

Key products

Skin, hair and body care together with personal and home fragrance, bathing and personal care products.

Proportion of domestic sales to exports

80 % UK and 20% export.

in rounding off the more general skills of the workforce.

There is an ongoing programme for adult literacy and numeracy which has, according to Darke, been very actively pursued with over 100 of the staff gaining qualifications in these skills. Furthermore, to back up the ambitious environmental agenda already mentioned, over 100 staff have gone through a day of environmental training. An important commitment to accreditation in an industry where customers are pushing harder every day for ethical transparency and confidence in their supply chain.

Darke speaks positively of this trend despite the regular audits, need for accreditation and compliance pressure which it has brought about. “Ultimately it is a good thing,” he says. “Our customers want a way of benchmarking and being sure that they are comparing apples with apples when looking at their suppliers – standardised accreditation models help here. We have gone through a lot of accreditation in the last four years.” On regulatory compliance Darke says: “There is more and more regulation all the time and dealing with the administrative burden is a challenge. REACH and RECAST have a particular impact on us but they do also help us to provide the transparency which customers are looking for.”

I try to draw Mr Darke out into saying something more conventionally negative about conditions for manufacturing in the UK but the best I can get is ‘challenging’. This word applies to all the usual gripes from regulation through to materials sourcing – in an industry where the availability of ingredients like jojoba oil from month to month are a key issue, you’d have thought ‘challenging’ would be a mere baseline.

But, it must be admitted, that with 30% growth over the past four years in which Darke has been MD it would seem churlish if he were complaining. It looks as though the company’s far from cosmetic commitment to its ethical standards and identified development strategy are standing it in good stead.

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Fitted kitchens now contribute around 20-30% to Daval’s turnover

DavalFurniture The manufacture of furniture and fitted kitchens is hardly what springs to mind when hi-tech industry is mentioned.

But Daval, a 30-year-old Huddersfield manufacturer of custom-built furniture has recently made some changes that defy preconceptions about its trade. Jane Gray talks to marketing and business development manager Simon Bodsworth to learn more.

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T

o say the recession has made times tough for manufacturers is a pointless cliché. Of course it has. But there some that have undoubtedly been pinched harder than others. Manufacturers in luxury markets are certainly among those most squeezed, most under pressure to gain new understanding of customer spending habits and most in need of clever innovation strategies.

Three years ago Daval’s major offering was in luxury bedroom furniture, a market which had brought it considerable success prior to 2008. But things have changed.

“Fitted bedrooms, kitchens and bathrooms are a high value spend and the market has been hard hit,” says Simon Bodsworth, marketing and product development manager at Daval. “Before we entered recession the vast majority of our business was in fitted bedroom furniture but when a customer’s cash is limited revamping the bedroom is simply less essential than other home improvements or changes.”

Fitted furniture Daval

Another important change in customer expectations was that the “reason to buy” included a desire to personalise orders to unprecedented levels. For Daval, this presented a problem.

As with many traditional manufacturers the pre-recession company worked on batch production processes. There was some knowledge of lean principles but the company held a lot of stock. What this implied was that Daval held a limited range of sizes and colours to offer its customers and there was little flexibility to accommodate late changes to orders.

Transformation The transformative implementation of a new piece of technology has now changed all this however. And what is more, the automation has lowered administrative costs and allowed Daval to access midmarket customers as well as top-end consumers.

“Everything we do is now made to order and made to measure,” explains Bodsworth. “Customers can now personalise their orders with Daval in a way that really sets us apart in the market. The ability to offer that kind of choice has been driven by the implementation of Option-I, the technology which makes our product development strategy work,” he continues.

The Option-I system was custom written for Daval by Factory Control Systems, as bespoke software developer for industry. However, making a success of the system meant more work than getting company specific

Give me a reason Looking into customer spending habits right across relevant markets Daval identified growing concern over value for money, whichever end of the quality spectrum was under the microscope.

Mr Bodsworth also asserts that “People are looking for a greater reason to buy.”

In part this meant more essential rooms were being prioritised by customers and in response Daval saw demand for its range of fitted kitchens, previously accounting for just 12% of turnover, more than double throughout 2008-2009. “Kitchens now contribute 25 to 30 per cent to our total turnover and the share is still growing,” comments Mr Bodsworth.

Daval at a glance Established

1978

Location

Slaithwaite, Huddersfield

Employees

70

Key products

Made to measure and made to order furniture for the home created with unique Option-I technology.

Key customers/ markets

Daval is driven by domestic sales in the UK although expansion into export markets is a part of the company’s long-term growth strategy.

Points of interest

As a user of scarce, natural resources, Daval’s policy is to source raw materials from suppliers with responsible attitudes towards the environment. This includes sourcing its timber from properly managed forests.

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Fitted furniture Daval

coding. Collaboration with RW Machines, a supplier of CNC and router tools, enabled Daval to make its manufacturing equipment responsive to the Option-I system while guidance from experienced independent lean consultant, John Pegg, meant that the system was implemented with customer value in mind. Daval now runs a highly automated operation with flexible mixed mode manufacturing techniques, quick change overs and more.

Customers can now personalise their orders with Daval in a way that really sets us apart in the market Simon Bodsworth, Business Development Manager, Daval

Describing the improvement the new system has brought with it Bodsworth says, “The customer order is now entered, along with their individual specifications for colour, size and style. This triggers a seamless process which is not touched by another human hand until the order comes out the other end.” Daval now stands out against volume competitors who are unable to adapt quickly to accommodate customer trends but even more importantly Bodsworth says, “we are allowing our retailers to stand

Measure it, manage it It is well-established wisdom within business that measurement facilitates management. But can you be sure that you are measuring the right things?

Wasting resources on managing inappropriate performance indicators can be misleading and, frequently, damaging.

Before implementing its Option-I system and gaining the assistance of lean consultant John Pegg, Daval had been working on traditional batch production schedules. The company had held a lot of stock to cope with fluctuations in demand and KPIs were focused on financial interests such as turnover.

Thanks to a thorough education process in lean principles, spurred on by the desire to get the most out of the company’s £2m investment in its new IT system, this has now changed. KPIs are now customer focused and are measured daily on the shop floor by shop floor operators.

The key metrics used to measure business performance are now Manufactured components per hour Rejects per department by reason code Units delivered first time “The business has always tried to keep simple,” says Bodsworth, but now that simplicity is better focused thanks to the enhanced transparency and information gathering capabilities of the new Option-I system.

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out against their competitors. We’ve been able to give them more up to date product. It’s not necessarily that the market has been growing. It’s simply that our product development and delivery is allowing them to win more business on the high street.”

Implementing and optimising Implementing the new software system has taken two years and represents a £2 million investment for Daval.

This cost has included training and integration costs, perhaps the areas of investment, which will deliver most value in the long term.

Training staff to use maximise the potential of the Option-I technology has meant some radical changes.

Bodsworth enthuses: “The changes we have had to make to maximise the potential of the technology investment have closed the doors on the our old business and opened up an entirely fresh enterprise.”

He continues: “We have gone back to scratch and have new ways of taking orders and processing them. We have

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new quality procedure and checks throughout manufacture and assembly and delivery practices have also been overhauled.” Bodsworth says that the re-education process for Daval’s 70-strong workforce amid all this change has been “fantastic.”

Shop floor staff now have a far greater sense of job satisfaction, according to Bodsworth, since they have control over and ownership for the progress of personalised orders, each marked with the characteristics and preferences of a customer they can identify. “In batch production situations,” says Bodsworth, “all a shop floor employee is doing is moving components. Now our shop floor workers are making a product for an individual person, they know about the whole process – not just one part – and are multi-skilled.”

The increasing level of skills on the shop floor have been match by increasing level of comradely and friendly competition as the new cell-based production team fight for top performance stats. Figures they are now responsible for capturing and monitoring themselves (see box).

For Bodsworth and other long serving members of staff at Daval these recent improvement have been a long time coming. For although the implementation of Option-I has taken two years it was in the pipeline years before.

“We’ve known what we wanted to do for perhaps six or seven years,” say Bodsworth. “But before, when we approached partners that capability, the technology, simply wasn’t out there.”

Fitted furniture Daval

Feeding the flame Of course now that the system, along with all its added capability is in place there is a duty to push forward with innovations and feed the growth trend experienced over the last couple of years in the kitchen business.

For this Daval quickly recognised that technology alone is not the answer.

Considering Daval’s environment and background in a market which has been traditionally fairly slow moving in terms of product development, the changes actioned with regard to roles and responsibilities as well as the product development process are impressive.

There is now a dedicated product development team, managed by Bodsworth and including the company head of IT, head of technical processes and head of design. This team meets once a week to review Daval’s offering and analyse developing customer trends. Such conversations used to happen perhaps once a year and proposed changes were time consuming to implement. Now they are immediately effective.

Suppliers too are involved in Daval’s dynamic new culture of innovation at regular meetings with trend presentations.

Dividends For a company with an SME manufacturer rather nearer to the small end of the spectrum than the medium, the investment of £2m in a software system was not taken lightly.

The company funded the spend from its own revenues at a time when other companies would have been reluctant to let any cash go.

Happily the risk paid off. The system is already paying dividends. Indeed it has funded the establishment of a new 426m2 showroom at Daval in which the company’s diversified portfolio can be shown off to advantage.

Impressively, Daval has side stepped the planning permission nightmares so often faced by expanding manufacturing firms, by converting space within its own factory walls for this new company asset. The space has been made available thanks to the move away from batch production and towards leaner operations. The reduction in inventory and re-structuring around more space efficient manufacturing cells paved the way for a £60,000 spend on converting the factory space.

In batch production situations, all a shop floor employee is doing is moving components. Now our shop floor workers are making a product for an individual person, they know about the whole process – not just one part – and are multi-skilled Simon Bodsworth, Business Development Manager, Daval

Rough with the smooth With so much talk of improvements and achievement it would be easy to assume that business is now plain sailing for Daval. Sadly this is not the whole truth.

Like any other manufacturer operating in the UK today Daval is hampered by rising input costs and insensitive environmental policy from government. Bodsworth explains how the subsidies government has been given businesses to encourage the burning of biomass as a renewable energy source has caused the price of their raw materials to rocket.

The effect is similar to that seen during the sudden popularity of rapeseed oil as a form of bio-fuel. Its application as an energy source priced it out of its traditional markets.

There is little Bodsworth can suggest as a means of combating this trend except working closely with suppliers to arrange fair prices and ensuring that the company seeking cost cutting efficiencies everywhere it can. For instance the company now collects all of its chippings, offcuts and scrap to use in its own biomass generator.

On the supplier side Daval is proud to say that it is the oldest UK customer of Egger, the Austrian timber supplier founded in 1961. Daval supports Egger’s sustainable timber sourcing practices and has a close working relationship with the company.

Despite difficulties In spite of the above challenges however Daval has ambitions for further growth and development.

The process of exploiting the complete potential of the Option-I system is not yet over. Bodsworth says there is a new phase of development planned whereby the customer will be given ownership and direct control over the entry of their order.

Furthermore, although company currently only sell to UK customers, long-term strategy does include the possibility of expanding into export markets.

There is often scepticism among business people about the transformative power that IT systems can have on an organisation. It is very much a la mode to say that people power is the crucial element. This may be true but Daval has shown that in the right hands and with the right strategy behind it, technology really can change a company’s fortunes.

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A fine

state of affairs Rewind the clock 10 years and Fine Industries was a very different place to work at and to do business with.

The usual clichéd terminology of culture change and shifting global markets do not really fit the bill in this instance as Jane Gray finds out.

QC Sampling and analysis

T

he 90s was a good time to be in business for pharmaceutical and chemicals companies in Europe. As part of the Laporte Group, Fine Organics Limited (FOL) used to turnover £80m and seize a sizeable £20m profit margin.

Keith Hanson, now managing director at FOL looks back on the 90s, when he was operations director with the

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company, as a time of quick money and easy living. Hanson reflects: “I don’t think the profits we were pulling in were at all unusual at the time. Life was good. We all had an inkling that Asia might ‘happen’ in the early 2000s but many people chose to hide from the possibility saying, ‘it’ll never happen; they’ll never get the quality right’ and so on.”

But of course Asia did ‘happen’, and in a big way.

Not only this, but the pharmaceutical and agrochemical industries were rife with big mergers and acquisitions in 2001 and 2002, indeed FOL itself was acquired by

Chemicals Fine Industries

put to an end through redundancies. In 1999 FOL had 450 staff; by the end of 2004 it had 250 and there were no signs of increased sales in the pipeline to raise morale or provide assurance that there was light at the end of the tunnel.

It was at this point that Hanson gained the opportunity to become general manager at the faltering Seal Sands plant near Middleborough, and between 2004 and 2008 he led an impressive transformation journey.

In 2004, with the company haemorrhaging millions of pounds a year, big change was a must and so a number of operational transformations

We look for results orientation and advanced interpersonal or communication skills, and not just at the senior management level Steve Catchpole, operations director

chemicals giant Degussa as part of a larger deal which saw Laporte subsumed.

Hanson explains the implications of this kind of activity: “Every time a big pharmaceutical company buys or merges the first thing they do is stop the pipeline. They then take a basket of selected products forward and throw the rest in the bin; unfortunately if you had business in those products you simply lost it overnight.”

Within three years FOL saw its turnover halve and with directives from head office to cut cost. The good times were

were implemented with a firm hand.

Hanson remembers: “We changed the shift pattern from 12 hour shifts to eight hour shifts, we cancelled operator contracts and we cancelled union agreements; the whole lot.”

Given the difficulties currently being experienced across public and private sector organisations there must be many who would give their eye teeth to know how Hanson managed this without revolt. His answer is simple; communication and education: “We went to the brink of strike twice in one year.

But we communicated with the union and the workforce every two weeks and we worked hard to get understanding that life was different out there,” says Hanson. “The business had been so successful in the 80s and 90s and a lot of the staff were still here in the 2000s.

We had to reconcile their knowledge of the profits we made then with the pressures of the external environment in the present.”

Hanson’s education approach was successful. Whereas pay disputes in 2004 took several months quibbling over fractions of a percent, post 2004 they were reduced to just one day. By 2005 Hanson felt that the changes implemented so far had laid

99

sufficient ground work, and he moved to the next stage of his long term transformation plan.

In his mind’s eye Hanson always looked to create a culture of autonomous and continuous improvement (CI) at FOL but, unlike many organisations with lean ambitions he did not just pay lip service to the concept of employee engagement nor underestimate the power of a truly committed workforce. 2005 was given over entirely to consolidation, culture building and morale boosting for FOL.

Fully equipped QC laboratory

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Hanson explains his reasoning: “I took the decision that there is no point whatsoever in introducing CI, lean sigma, six sigma at a point when it would be seen as a cost reduction programme, because that is all it would ever be seen as.”

Instead Hanson spent two years focusing on the culture of the organisation. Between 2005 and 2007 everyone in the company was taken off-site at least twice for training and team building sessions. These sessions were designed to create an environment in which employees felt comfortable talking to management.

The result of this attention to people has been striking.

Hanson has been guided by the mantra: ‘it is easier for a hundred people to take one step than it is for one person to take a hundred steps’. His approach to building knowledge of CI techniques (a programme which started in 2006) has been that it is a way of thinking for the whole organisation and needs to be understood at every level. It cannot be the preserve of an elite few.

Hanson’s efforts with the Seal Sands site did not go unrewarded. By 2007 the company was once again breaking even. More importantly it had a visible CI agenda in place, and unequivocal engagement from senior management to the chosen methodology for efficiency (Hanson was the first to apply 5S, or as FOL call it, 5Cs in his office).

It is not just the path of true love that is prone to a bumpy ride however, and just as things started to look up, a commercial problem with two of the products being supplied to the USA threw the company back into an uncomfortable

Chemicals Fine Industries

Fine Organics at a glance Established

Fine Organics was established in 1977, and was bought by Fine Industries Ltd in 2008.

Location

Seal Sands, Middlesbrough.

Employees

Fine Industries 214 (178 Fine Organics, 36 Fine Facilities Management)

Key Products

Contract Manufacturing of Pharmaceutical (APIs & intermediates) (http://www.fineorganics. co.uk/pharmaceuticals.aspx); Crop Protection, and Speciality Chemicals.

Key Customers

“Blue Chip, Top Tier” Pharmaceutical and Agrochemical Companies.

Turnover

circa £30m

Points of interest

Three years of continuous profitable growth, at a time of deep global recession.

In-house developed Business Management System is behind Fine Software Solutions.

In 2012, Fine Environmental Services will bring online one of only three approved incinerators in the UK with permission to burn hazardous liquid waste.

Fine Contract Research will offer clients small scale assets and a highly qualified team who are technically competent in all aspects of custom synthesis, route selection and laboratory operation to gain cost effective solutions for their product development requirements.

CI programmes across all business areas continues to provide the basis and backbone for long term contract opportunities.

situation. “All of a sudden we were a potentially significantly loss making business again,” recalls Hanson.

As an indentified cost centre within a large group it did not take long for a summons to arrive from HQ in Germany.

It was not a happy meeting. “I presented a credible business plan for pulling the site back on track and I didn’t get a thank you or a smile,” says Hanson.

Piqued and unsettled, Hanson asked for honesty from the board. The frank response was that “everything is for sale if the money’s right” a statement which was followed by a half joking: “Are you interested in buying?” comment from the financial controller.

Hanson’s mouth ran away with him and before he knew it he was at the centre of a management buy-out. In a whirlwind year of management selection, legal work and brand restructuring the die was cast and the buyout was completed in November 2008. Since then Fine Industries, the new umbrella group under which FOL and its related businesses now sit, has not looked back.

“Although at the time,” says Hanson, “people, particularly our wives, thought we were mad.”

Sensitive to the feelings of customers who might think the same, or who would see this fledgling independent company as a risky supplier, the first priority of FOL was to secure contracts and prove ability through delivery. Luckily this was an area where Hanson and his new, carefully selected management team

were confident; a confidence which sprang from faith in the workforce they had worked so hard to develop.

Steve Catchpole, operations director at FOL says: “I’ve operated in five or six different sites and, I know it might sound cliché, but the quality of the people here drew me back

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[after leaving FOL in the early 90s]. Their ability to adapt within our project based business is really unique. It takes a very special kind of person to be able to deal with the transience of our environment.”

Expanding on this point, Catchpole explains that, whereas many chemical companies have one or two products to which they are dedicated, FOL has developed the flexibility to deal with continuously changing projects.

Typically, the plant will manage around 50 changeovers a year which require complete reconfiguration of the plant.

Of course, we have heard how FOL’s workforce has been whittled down due to the pressure of recession and invested in to maximise the capabilities of the remaining crew, but going forward, how does the company plan to safeguard the quality of personnel which it values so highly?

Catchpole explains that recruitment rigour plays a key role: “When we recruited our engineering manager after the MBO, we took a year to find the right guy. We talked to some very good candidates but they were not all people

we felt could excel in this environment. We took our time and we got our man in the end.”

Digging down deeper into what qualities a potential employee should display, Hanson and Catchpole agreed that the ability to see the business in the context of the wider world and to juggle multiple tasks were essential. “In addition,” says Catchpole, “we look for results orientation and advanced interpersonal or communication skills, and not just at the senior management level.”

Clearly the clarity of purpose which these characteristics bring the company is effective since, despite the upheaval of the MBO and amputation from the securities which come from being part of a large group, FOL lost none of its customer base following the buy-out. Furthermore, due to a hard working sales operation, new business was secured and after one initial year of loss the company has now stabilised as a profitable enterprise. Earnings before tax this year are expected to be in excess of £1.0m.

But mere profit was not enough for the ambitious new management team. Proving beyond all doubt that CI is a way of life at FOL, the reaction to success was ‘what next?’. In considering business strategy, Hanson says the company’s position as a small private business did not give it the financial position to attempt the strategies taken by many other chemical and pharmaceutical firms. “We did not have the money in the bank, so we decided to start our strategy by looking at where we spend money and whether or not we can spend it more wisely,” says Hanson.

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Chemicals Fine Industries

This train of thought has led to a major re-structuring of Fine Industries.

The company has sub-divided into a number of different businesses which are designed to minimise the amount of contract labour brought in and maximise output from the diversity of skills held within the business.

Maintenance was one of the first and most obvious areas for re-invention.

Despite the fact the FOL had strong in-house expertise and was a difficult customer to serve, since it had developed a strong set of in-house maintenance systems, the company was still spending half of its £3.4m maintenance outgoings per year on contracted labour.

Catchpole says: “It became a no-brainer to take everything inhouse, but we then took that logic one step further.” Catchpole explains that realising just how high their own standards were started to beg the question of opportunities to deliver services for others. “While the chemical industry is generally quite sophisticated we started to investigate if there were other industries where we might bring our expertise to bear,” says Catchpole.

As a consequence a new business; Fine Facilities Management has been born.

This expertise in maintenance, planning and scheduling which this business aims to take further afield is,

however, supported by another in-house asset which now forms an exciting business proposition. Namely, Fine’s custom-built IT system which is ran out of the subsidiary Fine Software Solutions.

This specialist OEE and business management asset is, says Catchpole, the easiest and best business management system he has used during his diverse career. The system, which was developed by manufacturers for manufacturers, enables real time monitoring of business assets through touch screen points around the plant as well as mobile access to business analytics and data. Hanson says access to this information in meetings has enabled him to clinch contracts with new customers in the past.

Aside from the Fine Facilities Management and Fine Software Solution offering, the company has already established fledgling management teams for; Fine Environmental Services and a not-for profit organisation, Fine Contract Research. The first of these businesses will exploit an on-site but currently dormant incinerator in order to deal with industrial waste for other organisations. The second will protect Fine Industries’ long term interests by building relationships with start-up businesses and innovators in order to support a more dynamic, collaborative chemicals industry in the UK. The final part of the business – the traditional chemical manufacturing business, now exists under the banner of Fine Organics.

The dynamism and ambition demonstrated in FOL’s radical new strategy is a manifestation of the business model innovation which bodies like the Technology Strategy Board and many leading management schools are saying will be the make or break factor for companies in the coming decade. Having seized a risky opportunity to take control of their own destiny in an industry dominated by big hitting international players, FOL is busily laying foundations which will make it a force to be reckoned with in the future.

I’ve operated in five or six different sites and, I know it might sound cliché, but the quality of the people here drew me back.

Steve Catchpole, operations director

Raw material and effluent storage

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lastword The

TM’s Editorial Director Will Stirling delivers his observations, celebrations and indictments of developments in UK manufacturing.

Good TIC in the box, but only one step in a strategy

The first Technology and Innovation Centre for High Value Manufacturing should really help businesses to commercialise good ideas. But its mentors have a big PR job ahead to make the project sustainable in the long term.

T

he Gatling gun was so successful it became the genericised trademark for all rapid-firing weapons. But the synonymous name for machine guns might have been the Puckle Gun, a multi-shot device patented in 1718 by the English lawyer James Puckle. It could fire nine rounds before needing reloading but, ahead of its time and underfunded, it slipped into obscurity.

One of the greatest perils in technology transfer is the ‘Valley of Death’, an arid place filled with the carcasses of smart innovations that became cashstarved before reaching the oasis of commercial viability. The Hauser Report, which spawned the TICs, identified that the British are particularly good at finding their way here.

The Technology Strategy Board (TSB) has launched the first of three Technology and Innovation Centres, or TICs, for high value manufacturing (see news on p06-07). The HVM TIC integrates the work of seven pre-eminent centres of excellence for high value manufacturing, in sectors where the UK has a strong legacy of expertise and comparative advantage – such as composites in Bristol, aerospace technologies at the Advanced Manufacturing Research Centre (AMRC) in Rotherham and advanced forming techniques at Strathclyde University. Two more confirmed TICs will help advance cell therapies and offshore renewable energy.

Why? Hermann Hauser’s report identified the TIC models used to great effect in countries including Germany (Fraunhofer), Taiwan (ITRI) and South Korea (ETRI), which have been eye-wateringly successful in commercialising good ideas. Look at ITRI’s success with display screens and the machine tool industry.

One of the report’s conclusions was that “the current UK approach is by comparison sub-critical; follows no national strategy; and pays insufficient attention to business requirements and the location of relevant expertise.”

Dick Elsy, CEO of Torotrak, an SME business that designs and manufactures transmission systems who is involved in the HVM TIC says, “One of the biggest failures of start-up companies is risk aversion. Lots of brilliant ideas never get out of the starting blocks.

If there is a means in the UK of assisting both SMEs

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Have your say at: www.themanufacturer.com

and large companies to pool resources and access manufacturing technologies, to bridge this gap, it will be a fantastic enabler.”

What?

The TICs claim to lower the economic risk for new businesses, by introducing them to “people and companies who’ve been there and done that” and learning from their mistakes. Companies will get access to whiz-bang equipment normally inaccessible to many, especially smaller, companies – the TICs plan to share the resource. Several other benefits, including business-led help with selection of the right projects to work on, are listed.

One of the biggest failures of start-up companies is risk aversion.

Lots of brilliant ideas never get out of the starting blocks.

[If the TICs can] bridge this gap it will be a fantastic enabler Dick Elsy, CEO Torotak

What’s the catch?

Some battle-hardened industry men might say with a wry smile “We’ve heard it all before, what’s so different about this initiative?”, or “Great, but why has it taken this long? The Germans started Fraunhofer in 1949.” And with a litany of stop-start national manufacturing strategies that never seem to get beyond a parliamentary term, such views are not unduly churlish. Fraunhofer has 60 institutes across Germany, a research budget of Eu1.65bn and about 150 companies have spun-off from the institutes. The HVM TIC will be funded with £140m over six years.

But Fraunhofer supports both the ‘late to the party’ view and shows what could be achieved.

With the launch of the EPSRC Centres for Innovative Manufacturing in April, the TSB has a big job to explain to business what the TICs are, how the application process works and how they differ from, or synchronise with, the EPSRC centres’ work. It’s too much good news in one year to let the message fade. Also the TSB needs to explain its public-private funding model to business and, once the public component is spent, how the competitive funding and contract research parts will pick up the slack so the TIC model doesn’t expire in its very own valley.

Overall though, the TICs are terrific news for industry and companies with strong product ideas should contact them now. See p06 for contact details for the seven High Value Manufacturing TIC partners.

TM will explore what companies get from working with the TICs in the December issue.

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