The Manufacturer November 2012

www.themanufacturer.com November 2012 Vol 15 Issue 10

www.themanufacturer.com | November 2012 | Vol 15 Issue 10

Workforce and Skills

Simplify the skills landscape: The cry from industry leaders at the Conservative Party conference

Manufacturing Leadership

Hungry for improvement: Management’s role in setting the bar for operational excellence

Finance and Professional Services

A share of the action: Osborne’s employee-ownership vision

Manufacturing Technologies

Time MACHine: 100 years of MACH Air on an H string: The market potential of hydrogen power

Interview Digby Jones

Baron Jones of Birmingham

Factory of the month New Holland Agriculture UK

Memory manufacturing the symbol of remembrance

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Editor’s comment

A cause worth fighting for Fans of 007 spent October preparing for the release of the 23rd instalment of James Bond, Skyfall.

But while the debonair secret agent primed a new array of military gadgets the UK defence and aerospace industry was truly shaken and stirred by what would have been one of the most significant mergers in history had it come off.

BAE Systems’ shareholders are now claiming heads (p4) for the public failure of the proposed union with EADS but there are sighs of relief within its UK supply chain. One representative of Rolls-Royce – a major supplier to BAE – told before the deal finally crumbled that he thought the merger “a very bad idea”.

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For smaller companies, the potential impact of centralised European decision making on supply chain choices caused a magnitude of worry according to a source at sector trade body ADS. At a time when good cash flow and a full order book are generally hard to come by such disturbances are unwelcome with SMEs. But a new government initiative looks set to ease at least the first of these troubles.

The new Supply Chain Finance scheme (p4) was welcomed

by EEF, which said that government was pushing forward “a useful dialogue” on the role of large companies in improving the flow of capital to SMEs.

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Another positive announcement from government this month came in the form of Regional Growth Fund allocations. This initiative has been criticised in the past for obscuring final delivery of support with smoke and mirrors. But government used the revelation of round three allocations to confirm that 90% of projects and programmes from rounds one and two are now underway. It also committed to complete due diligence for successful round three bids within six months - impressed?

The RGF pot is designed to leverage private sector investment in schemes which will support growth. One enterprise led

by Ebac Group to establish a washing machine facility in County-Durham has a particular mission to start filling in the UK’s massive trade deficit which reached its second highest figure ever in August (p12). This, along with an increasingly fractious environment among EU members, plagued by economic malaise, again highlights how badly Britain needs a bold mandate for growth which bears relevance to an evolving global market place (p124).

Cover image: A visit to The Poppy Factory reveals a skills transfer scheme unlike any other (p16).

But amid all the usual news-mongering, political mithering and economic speculation it is a privilege to give page space to a manufacturing initiative which reminds us of the need to keep macro views in perspective and realise just how important the creation of a single job can be - especially to a group who have sacrificed much for this sceptred isle, whose vagaries we deride so often. See p16 for our Remembrance Day special.

Jane Gray, Editor

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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 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

Reporters George Archer

g.archer@sayonemedia.com

Tom Moore

t.moore@sayonemedia.com

Design

Art Director Martin Mitchell

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

Designers Alex Cole Vicky Carlin Nick Bond

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Sales and Events Head of Events Jon Tudor

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Marketing Executive Grace Gilling

Will Stirling, Editorial Director

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

Project Director Matt Chilton

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Sales Manager Benn Walsh

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Sarah Hough

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Client Account Managers Élann Carel e.carel@sayonemedia.com

Peter Kealy

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Jane Gray, Editor

Tina Bennett

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Jane joined SayOne Media in 2009 for the launch of the Lean Management Journal, sister publication to .

Reporting concurrently for , Jane focused on industry skills development features and lean enterprise until she became editor in June 2011. j.gray@sayonemedia.com

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

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

11 The Naked Engineer

A run-in with UK Border Agency incurs NE’s wrath

14 Lean on me

Roberto Priolo, editor of Lean Management Journal updates readers on the hot topics being discussed by an international community of lean practitioners

16 Lead Memory makers: Tom Moore visits The Poppy Factory to meet the veterans dedicated to making Remembrance Day an iconic and enduring event the world over

25 Interview How to fix Britain: Lord Digby Jones treats Will Stirling to the full force of his personality and his passion for British industry

Pillar features 32 Manufacturing Leadership

Hungry for improvement: What is the role of management in setting the pace for organisational change and building a framework for operational excellence? Manufacturing leaders debate

34 Finance and Professional Services A share of the action: Law firm Pinsent Masons considers the implications of the Government’s proposed employee-ownership contract

36 Workforce and skills

Simplify the skills landscape: A wrap of discussion among industry leaders at Semta’s Conservative Party conference fringe event

40 Employee of the month:

Louise Anderson, undergraduate environmental assistant, Vauxhall Motors

46 Manufacturing technologies Time MACHine: Celebrating 100 years of the UKs leading machine tools and manufacturing technologies exhibition – where next for MACH and its organisers MTA?

50 Air on an H string: Kim Barber visits Air Products’ hydrogen manufacturing facility in Denmark and considers the market potential of the eco-friendly fuel

56 IT in manufacturing

Moving to the cloud: What? When? How?: Malcolm Wheatley finds out about the capacity and flexibility it is possible to free up through outsourcing non-core IT functions

60 IT news

Nove m b e r i n-b ound s upple m e nt s 63 ERP

What is the outlook for this critical manufacturing software as we approach the end of 2012? Malcolm Wheatley finds that rip and replace approaches to implementations and upgrades may be a thing of the past and Jane Gray reviews user opinion at ’s most recent ERP Connect event to find workforce management modules are high on the priority list

73 Energy: On-site power generation As energy prices soar the possibility of cutting out suppliers and making your own energy is becoming more attractive to all businesses. But what are the best on-site power generation options for manufacturers?

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

88 New Holland Agriculture UK 110 MTM 112 Hi Technology Group 118 Siemens Sudbury 124 Last Word: Jane Gray compares Britain’s version of boldness on industrial strategy to those being flashed abroad by developing and diversifying economies

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Manufacturing AWARDS The Manufacturer of the Year Awards 2012, sold out with two months still to go before the awards ceremony.

Demand for table space at this year’s awards, known for its enthusiastic celebration of British manufacturing prowess, quickly exceeded the capacity of the booked room (500+) at the Grange Tower Bridge Hotel in London. An extra suite, known as the Bloodhound room was hired but this too has now reached its capacity of 200. Shortlisted companies at this year’s awards include: AkzoNobel Apex Linvar, BAE Systems, Caterpillar, CooperVision, GKN Structures, Hi-Technology Group, MDBA, Milliken Industrials, Newburgh Engineering, Premier Foods, Robert McBride, SCA Hygiene, Sony UK Technology Centre, TMAT and United Biscuits.

Mark Cropper, chairman at Mark Cropper Plc, said its RGF allocation will underpin a £7m investment in the development of a steam raising plant

REGIONAL GROWTH FUND Round 3 of the Regional Growth Fund has awarded 130 companies £1.05bn of funding.

The Regional Growth Fund aims to boost growth across England by financing innovative projects developed by manufacturers, small businesses and Local Enterprise Partnerships.

Successful bidders from the manufacturing sector include Caterpillar (Peterlee), AstraZeneca, Bentley Motors and Pentagon Chemicals.

Deputy Prime Minister Nick Clegg said the funding would be a “boost for growth in the towns and cities across England...that need it most”.

Cumbria-based James Cropper plc, the paper and advanced materials group, is one of the companies selected to receive a portion of the Government funding pot. It was granted £3.15m to support a proposed innovative energy plant at Burneside.

Chairman Mark Cropper said: “The need for the plant, which will supplement our gas fired CHP plant, has only grown more pressing. Energy costs are rising and the global competitiveness of our business and other British energy intensive manufacturers is being further impaired by new UK carbon taxation policies.” e2v, the designer and developer of solutions for high performance systems, is another successful bidder. It was awarded a £3.8m grant that will support growth of the company’s space imaging business. It is anticipated that it will create 130 new jobs at e2v and a further 30 jobs with e2v’s partners over the next three years.

Progress continues on delivering the funding allocated during rounds 1 and 2 of RGF. Government has come under criticism for slow delivery of promised investment but 90% of round 1 and 2 projects and programmes have now started. Government has committed to complete due diligence for round 3 projects and programmes within six months.

Visit http://bit.ly/rgfbreakdown for a regional breakdown of the funding allocations.

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Manufacturer of the Year Cosworth at last year’s Awards

DEFENCE BAE Systems’ shareholders are calling for board resignations at the UK defence firm following the failure of a proposed merger with aerospace group EADS. Three investors, including BAE’s largest shareholder Invesco Perpetual, which owns 13%, wrote to the board in October demanding that chairman Dick Olver and senior independent director Sir Peter Mason step down.

NEW JOBS Precision engineering company Renishaw is set to create hundreds of jobs if its planning application for a development 10 times the size of Buckingham Palace near Cardiff is approved. Renishaw has so far invested £15m in the site which produces metal components. It is set to add another shift buy the end of this year and will begin to manufacture its 3D printing machines from January 2013 as global demand for these products grows.

GOVERNMENT Prime Minister David Cameron launched the Supply Chain Finance Initiative and told 40 large UK companies they should sign up to help their suppliers gain access to credit. The initiative attempts to boost lending in the economy by getting ‘top tier’ companies buying goods or services to notify its supplier’s bank that invoices have been approved for payment. As much as £20 billion of cheaper finance could be released through the scheme according to the PM’s office.

News ENERGY Ed Davey MP speaks at the Liberal Democrat conference Photo courtesy of Dave Radcliffe and Liberal Democrats

The Government’s long anticipated Energy Bill will go before parliament in November said Secretary of State for the Department of Energy and Climate Change, Ed Davey MP at an event in London last month. The minister provided a number of insights into the Government’s soon to be updated energy policy and expressed a hope for cross-party support for the bill. One of the key points was that the Government is likely to opt for a single government-owned counterparty for the operation of the Contracts for Difference (CfDs) - the feed-in tariff that will provide increased revenue certainty to lowcarbon generators.

FOOD AND BEVERAGE Meat processors Hall’s of Broxburn is set to close after rejecting two offers to buy the plant which employs 1,700 people. Steve Green of Graf Capital, on of the two rejected bidders, told the BBC that his seven-figure proposal could have saved 1,200 jobs if it had been accepted. Mr Green commented that he had not been given a proper chance to save the factory and that the closure could have been avoided.

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Manufacturing DEFENCE

AgustaWestland will join the UK India Business Council

Ebac’s new washing machine factory will cost £7m and will create 200 jobs in the North East

DOMESTIC APPLIANCES County Durham-based Ebac Group is to start manufacturing washing machines in the UK. Ebac, known for its air conditioning and water cooling products, was founded by John Elliott MBE who is now chairman and runs a campaign, Stop Gap, devoted to raising awareness of the debilitating effect Britain’s trade deficit has on its ability to economically rebalance.

The new washing machine venture from Ebac will help reduce the 4 million washing machines imported every year by the UK and will create 200 jobs in the North East. The facility has been made possible thanks to a successful Regional Growth Fund bid. Ebac applied for £1 million from government in order to leverage £6m of private sector investment.

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Helicopter manufacturer AgustaWestland became a strategic partner on the UK India Business Council. The UKIBC is a business-led organisation promoting bilateral trade and investment between the India and the UK dating back to 1993. The helicopter company’s innovative work in rotorcraft technology is particularly relevant to India, which has plans to develop its indigenous aerospace and defence industry.

JCB’s new Tier 4 Ecomax engine is already securing a strong customer base

CONTRACT WIN Heavy equipment manufacturer JCB won a £3 million deal to supply engines to Johnston Sweepers, a leading manufacturer of street cleansing equipment. Johnston Sweepers supplies its equipment to the public sector, contractors, the rental market and airports through a network of 200 global dealers. The deal, won against international competition, has been secured a few weeks after the new Tier 4 Ecomax engine went into full production at JCB Power Systems in Foston, Derbyshire.

News AUTOMOTIVE Advanced engineering firm Cosworth went up for sale.

The overall winner of the 2011 Manufacturer of the Year Awards has reportedly been considering floatation for some time and owners have decided that the time is right to test its market value. Cosworth’s CEO, Tim Routsis told The Times: “We have been paused for the last 18 months and the board has decided that we cannot wait any longer otherwise we risk losing momentum.” Rolls Royce and GKN are both said to be speculative buyers for Cosworth which has experienced significant growth under Mr Routsis leadership.

AWARDS Sector skills council Cogent launched a new awards scheme for the UK life sciences industry which promotes a balanced approach to recruitment and developments of talent. The new scheme was initiated by Michael Davis, chief executive at the UK Commission for Employment and Skills, at Cogent’s Annual Westminster Skills Forum. The awards aim to promote the diverse skills routes to employment now available in the life sciences sector – particularly newly devised higher and advance apprenticeship pathways.

Award categories will recognise a graduate, higher apprentice, advanced apprentice and work placement of the year as well as all round excellence in workforce development on the part of SME and global employers.

Jungheinrich, was named Northern European Supplier of the Year by CEVA Logistics. The accolade was given to the forklift and pallet truck manufacturer at CEVA’s annual Global Supplier awards in Spain and was accepted on behalf of the Jungheinrich Group by Joachim Kiel, vice president key account management of Jungheinrich AG, and Tony Porter, divisional sales manager of Junghenrich UK. Winners of other award categories at CEVA’s 2012 Global Supplier Awards included TNT (Road Supplier of the Year) and Cathay Pacific (Air Supplier of the Year).

Datesfor yourdiary November

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The RAK Investment Authority (RAKIA) embarks on a UK Road Show to showcase the value propositions and premium benefits of expanding business set-ups in the Middle East.

The event is being held at the Hilton Metropole Hotel, Birmingham

7-8

The Composites Engineering Show will take place at the NEC in Birmingham, with presentations on composites materials technology, bio composites, processing methodology, simulation of processing, automation and composites training. For more info and booking details visit www.compositesexhibition.com. Co-located with this event are Automotive Engineering and Aerospace Engineering 2012

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The Lean Management Journal teams up with Porsche Consulting Gmbh to provide business leaders and managers with a unique two day residential course at one of the world’s most modern automotive plants in Leipzig, Germany. For information and booking contact Benn Walsh at: b.walsh@sayonemedia.com or 0207 202 7485

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The Manufacturers’ Directors Conference 2012 takes place at Grange Tower Bridge Hotel in London. With manufacturing case study presentations, thought leadership keynotes and lively debate the conference is a valued forum for industry. For information visit www.themanufacturer.com/mdc2012

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Join over 600 industry leaders at ’s Gala Dinner & Awards Ceremony 2012 at Grange Tower Bridge Hotel in London. The winners of the Manufacturer of the Year awards will be announced and entertainment provided until the small hours. Contact Benn Walsh at: b.walsh@sayonemedia.com or 0207 202 7485 for information

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Albion Overseas hosts Russia: Practical Solutions 2012 in Newcastle, bringing a comprehensive range of advice on exporting to one of the world’s fastest growing economies. For information call 01732 783 555 or email rps@albionoverseas.com

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ImechE holds its annual Manufacturing Excellence Awards in London, with former Cabinet Minister Michael Portillo confirmed as a keynote speaker. Visit events.imeche. org/EventView.aspx?EventID=1730 for more information

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NDI Opportunities Conference: Building for Growth Scotland takes place in Glasgow at the Hilton hotel. The event is aimed at helping companies win new contracts and grow their businesses. Currently confirmed to attend as buyers and speakers are: Boeing, Bombardier, BAE Systems, Babcock, Thales, Selex, NIS, MOD, Glasgow Airport, SAAB Bofor Dynamics and Hitek. Go to www.ndi.org.uk/ndi-conferences/building-for-growth-conferencescotland for more information or call Lyndsey Morrison on 0191 426 6333

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Semta is holding a conference on automotive and engineering apprenticeships at the Devonshire House Hotel, in Liverpool. Register at: http://bit.ly/SemtaUnite

December

5-6

Lean Management Journal’s Lean Immersion Programme will visit BAE Systems’ site in Samlesbury for two-day tour focusing on enablers for transformation, including employee engagement and leadership. Contact Benn Walsh at: b.walsh@sayonemedia.com or 0207 202 7485 for information

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IET holds its Young Woman Engineer of the Year Awards in London. The ceremony is free to attend, and will be followed by a free drinks reception and buffet with networking.

Contact eventsa2@theiet.org with any enquiries

For your daily manufacturing news go to www.themanufacturer.com

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ManufacturingAppointments Thomas Kohlbauer Brose

International automotive supplier Brose appointed Thomas Kohlbauer as managing director of its UK operations.

He succeeds Steve Wilkins who left to head up Brose’s operations in Canada. Mr Kohlbauer, who has worked for Brose in

Germany for 16 years, will be responsible for Brose’s Coventry manufacturing plant and UK growth plans. He said: “We are growing our staff to around 500 by 2015 as well as doubling the size of our premises.”

John Falder British Coatings Federation

John Falder was appointed chairman of the Industrial Coatings Council of the British Coatings Federation. Mr Falder has been HMG Paints’ managing director for 20 years and has had an active role in

the BCF for 27 years, where he has run a number of projects including apprentice training schemes, environmental and sustainability programmes and several health and safety initiatives.

Mike Patton GE Aviation Wales

Aircraft servicing company GE Aviation Wales appointed Mike Patton to lead its Nantgarwbased facility. Mr Patton, originally from Cincinnati, Ohio, joined the team from China, where he spent three years leading the Suzhou plant, which specialises in the manufacturing

and assembly of engine components and landing gear actuation. He replaces Adrian Button who has left to take up a new position at the headquarters of GE Oil & Gas in Italy.

Mr Patton joined GE in 2002 on the Operations Leadership Management Program (OMLP).

Lorraine Holmes WMMC

Lorraine Holmes was appointed as the new chief executive of the West Midlands Manufacturing Consortium (WMMC). She will lead the continued development of the organisation, which delivers the Manufacturing Advisory Service in the West Midlands,

North West and North East of England. Ms Holmes has had an extensive industrial career including 18 years in the chemicals sector with Henkel Chemicals and Ameron Inc. Prior to joining WMMC and MAS she was CEO of Business Link West Midlands.

Neil Andrew MacDonald Company of Cutlers

Neil Andrew MacDonald was appointed as new Master Cutler of the Company of Cutlers in Hallamshire. He replaces Pam Liversidge, the first woman to ever hold the post. Mr MacDonald previously worked

for Firth Rixson, where he oversaw the acquisition of Aurora in 1999. In 2007 he joined AES Engineering, the Rotherhambased mechanical seal manufacturer as part-time group finance director.

Bill Goodwin was appointed sales director of forklift supply and service company Briggs Equipment. A former director at Jungheinrich, Mr Goodwin will help to drive the growth of Briggs Equipment. “In my previous roles I’ve enjoyed success by employing sales techniques that are based on empowering staff to make informed decisions, and to take responsibility for those decisions,” he explained.

Two new Catapults appointments have been announced: Dr John Brown CBE, FRSE as chairman of the Cell Therapy Catapult centre, and Andrew Jamieson as CEO of the Offshore Renewable Energy Catapult.

Barclays has appointed Mike Rigby as head of manufacturing, transport and logistics for the Corporate Banking division. Mr Rigby originally joined Barclays in 2008 as a relationship director in the manufacturing team. After two years he was promoted to the leadership role of corporate director in the broader manufacturing, transport and logistics team. Prior to Barclays, he spent 14 years at HSBC.

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ABB’s robotics business has signed Mike Wilson as its new general industry sales manager for the UK and Ireland. Mr Wilson is tasked with growing and managing sales of ABB’s robots and robot systems for non-automotive applications, such as mechanical engineering, electrical & electronics, aerospace, pharmaceutical and medical. He brings over 30 years of experience in industrial automation.

Norbert Dentressangle appointed John Williams as director of its shared-user business unit. Mr Williams joined the company as change director and has received recognition for his work helping retail customer House of Fraser manage its e-fulfilment activities. In his new role, he will take responsibility for a portfolio of 10 shareduser warehouses across the UK totalling 2,500,000 sq ft.

Joel Segal is to become the new head of industrial products at professional services provider PwC. The firm has also announced the appointment of Dean Gilmore as UK head of aerospace & defence and Darren Jukes as UK head of manufacturing.

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

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

You probably haven’t thought much about it. You’ve just got music on for your staff or customers. But did you know you need permission from the music’s copyright owners if you play music, TV or radio aloud at work? It’s the law. But don’t worry, to get that permission you simply need a licence from PRS for Music* (and in most cases, one from PPL** too). PRS for Music is a 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 *PRS for Music licences cover the vast majority of music originating from the UK and all over the world. However, if you play music that is outside of PRS for Music’s control, you may need an additional licence from the relevant copyright owner(s). You will require a TV licence as well if you are using a TV in your premises. You do not need a licence from PRS for Music in the unlikely event that all the music you play is out of copyright or is not controlled by PRS for Music. **PPL collects and distributes royalties on behalf of record companies and performers. Further info at ppluk.com. All music licences are required under the Copyright, Designs and Patents Act 1988 which stipulates you must gain the permission of the copyright owner if you play music in public (anywhere outside the home environment).

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BacktoScuoler

Thebigpicture

Printablelasers

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Dr Wen-Kai Hsiao of the University of Cambridge Institute for Manufacturing describes an innovation in laser production.

nkjet technology has been around for more than 50 years and inkjet printers are familiar objects in homes and offices.

But the technology has far more potential.

Revolutionary new manufacturing processes are emerging based on inkjet printing, with applications ranging from flat-panel displays, printed circuit boards and photovoltaic cells for power generation. A recent ground breaking idea is to use inkjet technology to ‘print’ lasers.

Laser devices are ubiquitous in modern life; they are used to read data from Blu-ray discs and deliver high-speed internet around the world. They are also common in medical devices and are used for remote sensing in the space industry to name just a few applications.

Today, most lasers are made on silicon wafers using expensive processes similar to those used for microprocessors. However, scientists have developed a way to use inkjet technology to ‘print’ a type of organic laser. The process involves developing lasers based on chiral nematic liquid crystals (LCs), similar to those used in flat-panel LCD displays.

Under the right conditions these unique photonic materials can be stimulated to produce laser emissions.

But this process is complex - requiring a cleanroom environment and multiple, intricate production steps. Furthermore, the

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range of surfaces that can be used is limited - typically glass or silicon.

Researchers at the University of Cambridge have devised a much simpler, customised inkjet process. This involves printing hundreds of small dots of LC materials onto a substrate covered with a wet polymer solution.

As this solution dries, the chemical interaction and mechanical stress cause the LC molecules to align, turning the printed dots into individual lasers.

We believe that this simple process can form lasers on virtually any surface, rigid or flexible.

The process has been developed to produce compact, tuneable laser sources and high-resolution laser displays. However, by being able to put lasers virtually anywhere, the potential applications are limited only by imagination.

Dr Wen-Kai Hsiao is Research Associate at the University of Cambridge Inkjet Research Centre.

The research into printable lasers, undertaken with Dr Damian Gardiner of the Centre for Molecular Materials for Photonics and Electronics, is reported in the journal Soft Matter – scan the QR code to read:

Have your say at www.themanufacturer.com

R

EEF chief executive Terry Scuoler recognises the rise in higher apprenticeship starts but says quality of provision and candidates needs work.

ecent data shows the Government has hit the half-a-million mark for apprenticeship starts in a year – up from 457,200 in the academic year 2010/11. Such growth will be welcomed by manufacturers, a sector with a proven track record in offering apprenticeships and our latest survey with JAM Recruitment reveals that 74% of manufacturers that offer apprenticeship programmes took on a trainee in the last 12 months.

What is also important to highlight is the growth in higher-level apprenticeships. Whilst intermediate apprenticeships have their place in our economy, especially in terms of laying the foundation for developing further skills, EEF has been calling for a rise in the number of advanced and higher apprenticeships, which will deliver the skills at NVQ level 3 and above that the UK needs in order to remain globally competitive.

EEF’s The Route to Growth report sets out a clear benchmark for an increase in STEM apprenticeships at level 3 and above to be achieved by 2015.

But apprenticeships are more than just a numbers game. Whilst it’s easy to get excited about reaching a half-a-million milestone, we must also focus on raising standards.

Redirecting funding would help here. Manufacturing apprenticeships are costly and lengthy and require considerable amounts of investment. Employers of all sizes need to be able to easily draw down funding directly. By combining this funding with their own money they will gain enhanced skills purchasing power and create a competitive training market where the customer is king.

We also need to increase employer involvement in developing frameworks and qualifications around apprenticeships to meet industry needs.

A demand-led system must include a revision of current frameworks by the employers who should own them. Sector skills councils need to increase their engagement with employers, specifically SMEs. Finally, there is work to do in improving the quality of apprenticeship candidates. When recruiting apprentices manufacturers prioritise not only enthusiasm for the sector but also attainment in English, maths and the sciences. We must then drive up teaching standards in our schools to ensure that 65% of school leavers achieve five GCSEs at A* to C grade (or the equivalent in any new system) including English and maths.

These are just a few steps that we can take not only to boost quantity but also quality.

Monthly columns

Thenaked engineer: UKBAlls-up NE fights off UK Boarder Agency interference

B

it of an issue with my chocolate lab this morning – mad as a box of frogs and eats anything. Swiped two pounds of butter from the breakfast table which he inhaled in five seconds flat. Dear God. It came out the other end faster than a Tokyo bullet train. Think I could probably have claimed compassionate leave for the day but decontamination plan completed, I got into work at a bright and breezy 11.15.

“Afternoon. Especially strong gravity around your neck of the woods this morning was there?” asked my PA with, refreshingly, only mild sarcasm.

S’pose it was a just reward for me mentally undressing Annetta, our new and rather delightful Ukrainian finance girl…..Proving a bit resistant to my irresistible charms, that one.

Ignoring the ever insubordinate PA, went into my office and mentally removed my trousers in preparation for a bit of a carpeting from our fearless leader, Sir Patrick.

Sir Paddy had demanded the low down on how we had so convincingly managed to snatch defeat from the jaws of victory on a £40m quid contract for the Chinese air force because we wouldn’t foot the bill for a bit of jiggy- jiggy with an ‘air-Rice Marshall’.

Didn’t seem to understand that the Bribery Act applied to Hemlock and basically buggered us for doing business in China.

Was strengthening my resolve with a strong black one when our todger-dodger HR director Janice barged in. Was a bit nonplussed until I remembered I actually had my trousers still on.

I had barely composed myself when Janice made her pronouncement of doom “UK Border Agency have just come in, mob-handed and demanding to check all our work permit paperwork. They won’t take no for an answer.”

Bloody hell – it never ends, I thought. Manfully avoiding the possibility of being on the scene when Sir Patrick turned up to find this new UKBAalls-ache added to the stack of Hemlock Engineering headaches I collared Jimmy the

Greek, our dedicated finance director, and legged it down to Cavendish’s to avoid potential fireworks.

Got back into the office to find Janice apoplectic. “We’re apparently missing two bits of work permit paper relating to Annetta and one of the engineers in Dave’s Aeronautical Systems Group so they’re downgrading us from an A grade employer to B”.

“What the hell does that mean?”

I asked, a bit surprised that we were even grade A in the first place. “It means that they’ll give us an action plan to tell us what we have to do to get back to an A, which we have to do within three months, and they’ll charge us several grand for doing it.”

“Bugger that for a bunch of coconuts,” spluttered Jimmy. “That’s extortion!” Even though he was Welsh he did treat the company’s money like it was his own….spent it that way as well sometimes.

UK Border Agency have just come in, mob-handed and demanding to check all our work permit paperwork

“Sounds like a case for my attack-dog,” I suggested. Shirley was my local MP. Had helped me out in a few sticky situations before and loved Hemlock as we were by far the biggest employer in her bailiwick.

Two hours and a blizzard of e-mails later, allegations of extortion and heavy handedness and pointing out that the incompetence of UKBA has tens of thousands of illegal immigrants swanning about the country like they own the place and I had an e-mail in my in-tray from a certain deputy director, immigration & settlement directorate.

It unrolled as a grovelling apology and an assurance that we would not be downgraded.

Result! Boy, she’s a formidable woman that Shirley. Wondered idly how many businesses just stumped up the cash to pay another unofficial tax foisted on us.

Any similarities of characters to persons living or deceased is completely intentional.

Have your say at www.themanufacturer.com

11

Letters to the editor

Production lines 3 new messages

Letters to the editor

X

Hugh Facey, chairman of industrial products manufacturer Gripple on the Government’s proposed employee-ownership contract (p34).

G

ripple is an employee-owned business with all of its staff owning shares in the business. At the very heart of Gripple’s success is employee-ownership and we benefit from a sense of togetherness, sense of purpose and sharing that means that our staff go the extra mile to ensure we succeed.

The fact that the Government is getting behind employee-ownership is a step in the right direction but to link it to employee rights seems to us to be a retrograde step.

In most forward thinking employee-owned companies the welfare of their employees is

paramount, therefore why would you want to restrict their employment rights?

Our understanding is that employee-owned businesses tend overall to have higher productivity, greater levels of innovation, better resilience to economic turbulence and more engaged, fulfilled workers who are less stressed than colleagues in conventionally owned organisations.

Organisations like the Employee Ownership Association can be instrumental in spreading this message - but leave the motivation and management of staff to the company. There is no need to ask employees to part with their rights.

X

T

John Elliott MBE, chairman of air conditioning systems manufacturer Ebac on the latest figures on UK trade with the EU.

he trade figures released on October 16 by ONS show UK exports outweighing imports by £5bn in August, one of the highest monthly differences in recent years.

Our dangerous trade deficit is unnecessary.

If the Government were to put support into the manufacturing sector with a focus on making commodity products domestically, then the deficit could be eradicated within 18 months.

The Government cannot continue borrowing money it doesn’t have from other countries, to buy those nations’ exports. We are perfectly capable of

12

domestically manufacturing many of the goods we consume here in the UK, yet we insist on importing them.

It makes little or no economic sense to continue like this, especially when the answer is as simple as taking people out of unemployment and making some of the things we currently import.

The cost would be no more than the tax payer is currently paying out on benefits for these people.

Importing goods is a fact of life, but there has to be balance. We must increase our own productivity to meet our own demand, instead of relying upon the emerging world for our supply.

X

Nick Edwards, CEO of health and safety solutions provider Papaya on the HSE’s introduction of a fee for intervention last month.

T

his creates many challenges for businesses, especially SMEs who don’t have the luxury of employing advisors on health and safety.

The way in which the fee for intervention has been implemented has effectively closed the ‘open door policy’ which HSE previously promoted. The hourly and per visit costs that have come in force will generate the wrong culture. It is ironic that over the past five years the HSE strategy was to help businesses achieve compliance - now it has become driven by income generation.

HSE demands and conditions for intervention or investigation are constantly evolving and getting more expensive.

It is a trend which makes Papaya more determined to get our cloud risk management and online training solutions user friendly and cost effective.

Manufacturers need full visibility and tracking of compliance at the push of a button.

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

ARE YOU READY TO CE MARK YOUR CONSTRUCTION PRODUCTS? The current Construction Products Directive 89/106/EEC will be replaced by the mandatory Construction Products Regulation 305/2011/EU on 1 July 2013. Therefore from this date, it will become compulsory for manufacturers to apply CE Marking to any of their products that are covered by a harmonised European standard or European Technical Assessment. This is a major change as CE Marking under the current Construction Products Directive is at present voluntary in the UK and Ireland.

SGS United Kingdom Ltd is offering a FREE Information Brief on the impending Construction Products Regulation, that discusses the impacts, the benefits and opportunities, and defines the steps involved.

TO DOWNLOAD YOUR COPY, PLEASE VISIT OUR WEBSITE AT WWW.SGS.CO.UK/CPR OR EMAIL US AT UK.NOWISTHETIME@SGS.COM ALTERNATIVELY, PLEASE CALL OUR FREE PHONE NUMBER ON 0800 900 094 SGS IS THE WORLD’S LEADING INSPECTION, VERIFICATION, TESTING AND CERTIFICATION COMPANY

Leanonme Issue 9 Vol ume 2 No vember

|

Roberto Priolo, editor of Lean Management Journal brings us up to speed with recent and forthcoming features from his fast growing resource for lean practitioners.

T

he November issue of Lean Management Journal looked at how and why many lean programmes fail to deliver the expected results.

LMJ talked to brownfield services provider Wood Group PSN, for example, about the initial failure of its lean initiative and how the company was able to turn things around. Renault Nissan Consulting taught us that in fact geting things wrong is an important prerequisite to getting them right for good.

But in order to create a framework in which failure is taken as learning and fed into the continuous improvement cycle which lies at the heart of lean thinking, clear strategy is needed.

Investigating the practicalities of putting a robust lean strategy in place, from the very first days of implementation, the December-January issue of LMJ looks at every step in plotting, communicating and executing strategy.

In the first steps of strategic planning, the difinition of current and future states is a challenge often underestimated. So too is the ability to maintain sight of ‘True North’ as the implementation progresses while also having the flexibility to find different routes towards it.

The question of sustaining strategic intent in the face of a changing business climate, and as the low hanging fruit of

14

quick wins diminishes, is one which vexes many lean journeys (p32).

How do leaders at different levels sustain enthusiasm for imporvement or overcome oposition to imporvement as the lean programme reaches into new and often sceptical environments?

In the next issue, we’ll hear from Graeme Shaw of London Underground, who will share his experience of how his station upgrades division struggled to set off on its journey. He will also explain how he hopes to be able to adapt his lean strategy to other departments within LU. A good strategy is always a desirable first step in the right direction. With one caveat of course: in an interesting article in the next edition, Denis Becker warns against the risks of putting too much emphasis on strategic plans before the necessary capability and culture to effect change are developed within the business. The importance of laying cultural foundations for lean, operational excellence and continuous improvement can be a time consuming process and one which those who are enthusiastic about improvement can be prone to rush through as they seek to hit targets or make an impression on their business.

The edition will also feature an interview with yoghurt

|

2012 ww w.lean

mj.com

WheN t INgs fall apah rt

analysing the reason s why ma programm ny lean es learning fromfail and the importa nce of mistakes

Companies featured in this edition Wood gro include: up psN, lou is Vuitton, faurecia, pO Constru thales gro ction, up, palo alto renault, Ch Medical fou U grenob ndation, le IN thIs IssU When thin e: gs services prov go south: Mike riun gu ider scotland, refle Wood group psN of brownfield , headqua cts on lean rtere failure and how to avoi d in get it wro d it ng to get it right: David how ells discusse renault-Nissan Con renault prio sulting’s s r to its allia the lessons that were nce with Niss they were learn key in mak an, and tells t at ing the carlMJ how maker succ essful the model line approac of lean as a managem h: the story of the rapi ent foundation d adoption in Californ system at the palo alto ia Medical lean au cœu r : lMJ travels to fran the country ce and mee ’s ts some of and a pari leanest companies, sian construc inclu tion compan ding louis Vuitton y Once you pop you cann within our ot stop: In lean the newest year after the Diary, lMJ hears update about implementa tion of lean sCgM’s results a started super-lean shop floor: Will the JCB aca demy in engl stirling attends a wor and kshop at

manufacturer Yeo Valley. Steve Welch, head of continuous improvement, will discuss how the company has worked to ensure its strategy is meaningful to its workers and that it reflects company commitment to ethical and sustainable growth. Steve will share just how difficult it can be to reconcile this ambition with the need to standardise strategy across multiple sites, each with its unique characteristics.

Finally, for the last issue of 2012, Lean Management Journal will travel to China to understand how lean is implemented in the world’s biggest economy. It’s now been almost a year since we have started analysing approaches to lean thinking in different nations: we have published specials on Italy, Germany, France, Scandinavia, the United States, Hungary, the Netherlands and Brazil. We’ll keep travelling the world in the new year, with specials on lean in India, Spain, Australia and Israel among others coming your way!

To learn more about Lean Management Journal and to subscribe, please contact Roberto Priolo (r.priolo@ sayonemedia.com) on +44 (0)207 401 6033 or visit www.leanmj.com

Workers at The Poppy Factory and visiting representatives of Hasler Company - a support group for injured and ill Royal Marines

Mem ry E Tom Moore visits The Poppy Factory where wounded, injured and sick veterans make the world’s most iconic symbol of remembrance. He discovers an inspiring and sorely needed nationwide scheme for intelligent skills transfer which recognises the talents of ex-Forces men and women in spite of the scars they bear from service.

16

very November poppies are worn, wreaths laid and respects paid. At the eleventh hour on the eleventh day of the eleventh month, Britain falls silent for at least one minute to remember those that died during World War One and other conflicts.

And every November, the remembrance poppy, which in fields of Flanders blew - between the crosses, row on row, blooms on the chests of millions as an enduring symbol of those who have lost their lives in battle.

For Remembrance Day 2012, 44 million poppies have been manufactured to be sold in outlets

Leadstory Making Remembrance Day

as diverse as supermarkets to the trays of elderly gentlemen on high street corners or at train stations.

Twelve million of these were made by a team of 40 wounded, injured or sick veterans and disabled dependants of ex–Service personnel who work all year round at The Poppy Factory in Richmond, Surrey.

They ensure that this important symbol of remembrance is available to those who wish to mourn loved ones or show their respect for lives laid down in the name of the nation.

Foundation and inspiration On December 6 this year The Poppy Factory will celebrate its 90th anniversary with a gala dinner in The Painted Hall of The Old Royal Naval College, Greenwich. The occasion will give a well earned chance for employees and supporters of the factory to recognise that it is still successfully doing what its founder Major George Howson MC set out to do nine decades ago - create employment for wounded veterans.

It all began on Howson’s return from the First World War. He was devastated by the sight of men he had served alongside arriving home to find that they were no longer employable due to injuries sustained on the battlefield. He established The Poppy Factory, providing employment for soldiers left disabled by war.

Although much has changed since 1922, the world hasn’t found the peace that beauty pageant contestants around the world continually wish for. There are still wounded, injured and sick ex-Service men and women facing an uncertain future and coming back to civilian life in need of new careers.

Many find either a temporary or long term solution either at the poppy-making site in Richmond or through the support offered through The Poppy Factory’s team of employability consultants working to secure roles for wounded, injured and sick ex-Service men and women in businesses around the UK.

More than a job

employers participate in the The Poppy Factory’s Back to Work Initiative

A lot of people are uncomfortable in the presence of people with limbs missing or disfigurements and there is prejudice Major General (Retired) Michael Huntley, Defence Analyst.

Manufacturing at The Poppy Factory involves a mix of straight forward manual assembly and handcrafted creation of the large wreaths laid by the Queen and other members of the Royal Family. “Everybody is immensely proud of what we make,” says Bill Kay, general manager. “George Howson had seen the destitution of people left disabled after World War One and The Poppy Factory provides proper meaningful employment to help those people regain their independence.”

This rehabilitation or readjustment element to The Poppy Factory’s employer role is important. The workforce consists entirely of men and women who have either served in HM Armed Forces or are disabled dependants of Service men or women. These workers are not necessarily driven by a need for money but they often require support reentering civilian workplace, keeping active after training and operating in the most physically and mentally challenging environments and most importantly, feeling valued.

Tony, a production operative at The Poppy Factory, was in the army during the 1970s and served in Germany, Canada, Cyprus (with the UN) and Northern Ireland. Having joined the army at 17 years old he went on to enter the Royal Tank Regiment until an accident took place. Tony was on a routine training exercise in Germany in 1973 when he “got badly burntup in a tank fire” that he explains left him with severe injuries and

mental health problems that went undiagnosed for forty years.

After leaving the army Tony occupied a range of different jobs before suffering a severe breakdown in 2008 that left him incapacitated and unable to work. “I was on the sick [incapacity benefit] for years before I started working here,” he says. “I approached a number of private companies that help you to find work but they wouldn’t touch me after I saw their psychiatrist.”

“I went to the job centre one day and said ‘I want to work’” continues Tony. “They all looked surprised and someone asked me ‘why do you want to work?’ as though it was the most absurd idea he had ever heard.”

“Incapacity money was £110 in your hand every week with nothing to pay out but I didn’t want to sit around. I wanted to work but was written off as unemployable.”

With his mental health problems having gone ignored for so long, Tony ended up spending nine months in a military hospital in Aldershot following the breakdown. Here he was finally diagnosed with Post Traumatic Stress Disorder and became involved in the Warrior Programme supporting emotionally traumatised exservice men and women. “[The mental health problems] didn’t hit me straight away but it’s in the silence of when you return. The problems manifested in 1978 and I’ve been bad ever since. The only counseling I got was a doctor telling me I was a ‘little bit depressed.’ I didn’t get the help.”

Tony met The Poppy Factory’s chief executive Melanie Waters at a veterans’ drop-in clinic and was later recruited to make the world’s biggest symbol of remembrance. Having worked at the factory since March 2011 Tony is still classified as incapacitated but explains, “The work has given me support and a purpose, a reason to get up in the morning.”

A capable corps The Poppy Factory expanded its employability services in 2007 to help exService men and women who have experienced physical or mental trauma reintegrate with civilian society and find new, sustainable careers.

Growing need The Poppy Factory exists as a manufacturing operation to provide opportunities for Tony and his peers. “It’s a very different atmosphere to other workplaces,” says Mr Kay. “In the normal world of manufacturing one of the first things you do with people is run a dexterity test so that they can run at the rate you need the line to run. Productivity here can be extremely variable between staff but everyone sits at their bench, works at their own rate and all get paid the same amount. What we expect people to do is work to the best of their ability.”

The factory’s existence is a lifeline to many and looks likely to remain a vital source of stability. Tony describes the soldiers returning from recent conflicts in Afghanistan and Iraq as “a ticking time bomb” of social care challenges.

“A lot of people’s mental health problems don’t rise to the surface until they leave the forces,” he says. “You don’t cry in front of other guys so there will always be people hiding it, including those suffering now. You laugh about death, that’s how you’re trained.

But when you come out and settle down to civilian life, that’s when it comes out.”

With the British Armed Forces still involved in dangerous operations around the world, including Afghanistan, there were 954 new requirements for mental health support during the three-month period between April and June this year and 1,109 in the three month period before

18

• Since 2007 202 individuals have found work through The Poppy Factory ‘Getting you back to work’ initiative • 10 out of 271 employers who support the scheme are manufacturers Ex-Service men and women can more than make up for their disability through drive and determination.

Whatever job you think these guys are capable of, they surprise you by achieving more Major General (Retired) Michael Huntley, Defence Analyst

To find out whether your company has skills gaps or vacancies which could be filled by a Poppy Factory client contact: AmyJ@ poppyfactory.org or call 07785 667872.

that. These figures from Defence Analytical Services and Advice (DASA) show a rate of five new cases for every 1,000 service personnel requiring mental health treatment every three months.

When this is combined with the 2,040 field hospital admissions in Afghanistan since 2006, the need for more support for those physically or mentally scarred by conflict, like those services provided by The Poppy Factory and The Royal British Legion, is clear. Furthermore, the problems faced by those returning from conflict in feeling valued and reintegrating with civilian society are being exacerbated by defence budget cuts and the scaling back of operations.

In recognition of the rising need for post-service support Howson’s original vision has expanded.

The Poppy Factory has recently extended its services in order to get wounded, injured and sick ex-Service men and women back to work, wherever they are in the UK. “If somebody has had a major trauma the last thing they want to do is relocate away from their family and friends [to work in Richmond].

So we started to look at how we could provide employment where the people want it,” explains Kay. This scheme supports wounded, injured and sick ex-Serive men and women to find work across the UK. It runs alongside general employment services provided by other Service charities but differs in that, in the words of Melanie Waters, Poppy Factory CEO, it provides “a full career management service with face to face client contact and employer relationship development.” It is, in many ways, similar to the Talent Retention Solution launched

by Semta in 2010 to transplant skills from the declining defence industry into blossoming sectors such as automotive – though of course The Poppy Factory initiative has a more acute remit of care for its clients.

The expanded employability service matches ex-Service men and women who have suffered trauma with employers who suit their skills sets and aspirations and understand their circumstances. Funding is available, where appropriate, to assist the employer in providing any training, employee development and sometimes disabled adaptations to the workplace.

It sounds ideal. But despite the London 2012 Paralympics recently and publicly highlighting that disabled individuals are capable of taking on challenges that the vast majority of ablebodied people would struggle

Leadstory Making Remembrance Day

to achieve, there is a lingering prejudice which can hold employers back from investing in accommodating and developing disabled employees.

This is wrong says Major General (Retired) Michael Huntley, turned defence analyst. “People assume, wrongly in many cases, that [the disabled] are not capable of doing the same job as someone who has got all their faculties,” he asserts. “A lot of people are uncomfortable in the presence of people with limbs missing or disfigurements and there is prejudice.

“People look at someone missing an arm or a leg and don’t think they are capable so it would be naïve to think that it is not hard [for wounded ex-Service men and women to get jobs]. Ex-Service men and women can more than make up for their disability through drive and determination.

Whatever job you think these guys are capable of, they surprise you by achieving more.”

You can see how desperate it is when you get somebody’s wife calling up asking for help Shaun, employability co-ordinator, The Poppy Factory

the programme has had a 65% success rate – success meaning that an individual is still in employment after a twelve of Poppy month period.

Factory A more rapid wounded expansion of the clients scheme is however, are still in hampered by associated work, 12 costs for employers. months Huntley explains that a after lot of small and mediumsecuring sized manufacturers Poppy can’t afford to invest in Factory the equipment required support to allow for certain disabilities in the workplaces.

Growing demand “To help these people costs Convinced of the cause money and small companies embodied by the The Poppy struggling to survive probably Factory’s initiative, manufacturer can’t afford it,” he remarks. of fighter jets Lockheed Martin Though Huntley also reminds has signed up to support the employers that, “there is an back to work scheme. So far opportunity for government and

This is proven by the fact that the staff at The Poppy Factory, which includes people that are visually impaired, hearing impaired and are wheelchair users, produce in excess of 100,000 wreaths, 500,000 remembrance poppies, 11,500,000 remembrance poppies via homeworkers (the remainder are made in Kent), 650,000 buttonhole poppies and over 1,000,000 wooden crosses every year.

19

Leadstory Making Remembrance Day

charities to contribute to firms so that they can employ people that just need something to fit a lift or adapt operations.”

By providing employment to smooth the move to civilian life that some can struggle with, The Poppy Factory is performing a valuable service for individuals and for the national economy. In part, this includes stemming an unfortunate trend for ex-Service personnel becoming additions to the UK’s prison population. The criminal justice campaign group No Offence claim that military veterans comprise at least 10% of the prison population in England and Wales. Often these offenders have turned to crime through feelings of isolation and desperation.

This is a situation that can be avoided while aiding ex-Service men and women in becoming economically productive, transferring valuable skills and work ethic to the civilian world and into British businesses.

Through its initiative to get wounded, injured and sick exService men and women back to work The Poppy Factory is filling UK jobs with people trained to look smart, be punctual and do a professional job – virtues which employers frequently claim are lacking in many applicants today.

Ex-Service men and women also often have engineering knowledge and vocational talents which ideally suit them to manufacturing roles.

The word is spreading. But demand is growing more quickly from the prospective employee side than from employers.

“I get calls every day from badly

ExService men and women often have engineering knowledge and vocational talents which ideally suit them to manufacturing roles

injured don’t want the personnel 12 months to just coming be forgotten. out of We are looking the Forces for sustainable to those employment that haven’t so The Poppy worked since Factory can move the Falklands,” support on million says Shaun, Poppy to the next client and poppies Factory employability cohelp as many people have been ordinator. “You can see manufactured as possible.” how desperate it is when The objective is for you get somebody’s Remembrance for the individual to wife calling up asking prove their worth. The Day 2012 for help. We are the last Poppy Factory has chance saloon for this family.” filled all sorts of roles from The service is rapidly Administration to Finance, expanding but can only support from Green keeper to Teaching what it can afford from the Assistant. Huntley says that revenue generated from its small the self-motivated nature of exproperty portfolio that it built Service people will make them and developed in the 1920s in successful in a number of roles.

Richmond before prices in the The charity has over 450 area sky-rocketed. people registered and looking for Having helped to place people work and is eager to add new in employment from Newcastle employers who show an interest to Belfast, Shaun asserts, “We in the initiative.

21

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Interview Digby Jones, Baron Jones of Birmingham

How to fix

Britain “If fundamental reform does not take place then we are dead in the water.”

Digby Jones, Baron Jones of Birmingham is not a man for grey areas, learns Will Stirling.

Half the kids who take a GCSE do not get grades A to C in English and Maths. That is a disgusting statistic

“O

ur country has declined to such a state that it is in serious need of fixing, but we do have the framework on which to base our fightback.”

So begins Fixing Britain, Lord Digby Jones’ book that the former trade minister wrote “to commit into words what Britain needs to do to compete in Asia’s century”.

Patriot and business guru Digby–Baron Jones of Birmingham, known to many simply as Digs, is one of the most colourful characters in British business having had an extraordinary career spanning law, corporate finance, lobbying, government and overseas trade.

He led the CBI from 2000 to 2006, was Minister of State for Trade and Investment from 2007 to 2008 where, his biography says, he “changed the way that UK Trade & Investment was perceived in delivering a record year

for inward investment and expanding the UK’s presence in all major international markets.”

Fellow Brummie Howard Wheeldon, director of policy at the aerospace, defence and security trade body ADS, describes him as “the great motivator of our time; a man justifiably proud of his achievements and yet one who remains equally determined to see British industry once again lead.”

Digby is a guy you’d want on your team. But his short period in government was enough to confirm the scale of the task required to re-build Britain.

Fixing Britain is full of drop-jawed incredulity at the ineptitude of government to get its house in order during a decade when emerging nations proved once and for all that the world no longer owed Britain a living. In this blueprint for how Britain can get back in – and stay in – the globalised game, Digby sets out at firsthand how much of Britain’s business, and its education system, have slipped from world-beater to also ran.

The former CBI chief took a peerage to become a famously politically-neutral trade minister (“Business is my constituency, it always has been”), because he would not join the Labour party.

But neutrality is a difficult position to maintain in the Westminster village. Teathered by bureaucracy, his tenure as trade minister lasted only 15-months.

But in that time, this lad from a shop in Alvechurch made 45 overseas visits, travelling to 31 different countries and meeting with the world’s top business leaders and politicians.

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So is British manufacturing in a good place?

“With the possible exception of Germany, we’ve made this transformation of innovation – taking a good idea to market – and focusing on valueadded, quality and brand, better than virtually any other country.”

He acknowledges the real challenge is for most small businesses that have relied on the EU market.

“They were told by every politician that Europe was their home market, treat it as such and go for it.”

But the eurozone has now run out of money, and they have to go where the money is.

“It’s incredibly easy to sit in the Reform Club on a Tuesday afternoon and say that. It’s incredibly difficult for a small business, that doesn’t have the access to capital, that can’t accommodate the risk, to go and do it. But they have to.”

Is UK Trade and Investment doing enough?

Biography Digby Jones, Baron Jones of Birmingham 1974 – 1977: University cadetship with the Royal Navy Degree in Law from University College London 1980:

Admitted as a solicitor to law firm Edge and Ellison

1996:

Becomes senior partner at Edge and Ellison

1998:

Vice chairman of Corporate Finance, KPMG

2000 – 2006: Director-General, CBI. Visited 70 countries, opened CBI offices in New York and Beijing 2005:

Appointed Knight Bachelor in New Year’s Honours List

2007:

Held a number of senior corporate advisory positions Becomes UK Skills Envoy

2007 – 2008: Minister of State for Trade and Investment. Accepted a lifetime peerage in the House of Lords 2008 to date: Business Ambassador for UK Trade and Investment

Digby is also: chairman of Triumph Motorcycles, chairman of Grove Industries, a non-executive director of Flybe and a non-executive director Spicers Limited. He is senior advisor to HSBC and Harvey Nash plc, corporate advisor to JCB, advisor to BP plc, and Business Advisor to Barberry Developments. Digby chairs the Emergency Services Advisory Board of Babcock International Group plc and is chairman of Neutrino Concepts Limited. He is a corporate ambassador for Jaguar Cars, chairman of the Advisory Boards of the Jaguar Academy of Sport and Argentex LLP, a member of the Advisory Board of Monitise plc, and nonexecutive director of Leicester Tigers plc.

Digby is married to Pat and lives in Marylebone and Warwickshire.

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T

he only way out of this mess - the fiscal and trade deficit - Digby says, is to generate jobs, taxation and profitability from the private sector and trade around the world.

“For every £1 spent by the taxpayer on UK Trade and Investment, they deliver £19 back,” he says. He claims this figure applies from when he was minister up to Lord Green today.

“So what does the Government do? It’s closing down UKTI offices in some markets.

At the same time, we have a government that says when we give overseas aid, we don’t tie it to British construction or engineering projects.

Every other country does this.” Labour is just as bad as the Coalition, Digby quickly interjects.

The hackles rise. “[Vince] Cable’s wages are paid by British business, and every day he gets into a car made in Japan. This is not a nationalistic argument. I’d be happy if he drove a Qashqai made in Sunderland or an Avensis made in Burnaston.

“He buys a train made in Dusseldorf not Derby, and says he has to do that because of the tender rules. That’s rubbish, the tender rules stipulate best value not best price. Best value

We are asking banks to do four things with the same money.

Don’t be surprised if they say we can only do that if we lend it at a very high rate of interest

Interview Digby Jones, Baron Jones of Birmingham

says how do you stimulate a small business base around an OEM, how to create a skilled workforce in a community, when you get activity off the back of domestic orders then you can export, generate more jobs, more taxable profit. All of that is called value.”

“We’ve had governments for years who know the price of everything and the value of absolutely nothing.”

It’s incredibly easy to sit in the Reform Club on a Tuesday afternoon and say that [firms must chase new foreign markets]. It’s incredibly difficult for a small business, who doesn’t have the access to capital, that can’t accommodate the risk, to go and do it.

But they have to

Getting money to the firms that need it Digby is not a bank-basher.

But then, he is a senior advisor to HSBC. He accepts that small companies have a huge problem getting access to capital. His view is to look at the banking regulations.

“We’re asking banks to do four things with the same money. We say take this pound that you’ve made and spend it on your wages, then spend the same £1 on investing in businesses, then on putting it in reserve in case the business goes bust, and by the way we’d like you to make a profit. Don’t be surprised if they say we can only do that if we lend it at a very high rate of interest.

“There is a breach of trust between the banking community and small business, and everything being done by the banks and government to bridge that should be applauded.

But it is a hell of a long journey to make.”

So what is the solution? “We have to loosen the regulation on how banks invest. They’re not meant to be pawnbrokers; lending money on the security of the borrowers homes.”

Education Fixing Britain starts in the home, says Digby. He has extraordinary zeal for reforming the education system.

“Kids take exams to set them up for life at 16 – after 11-years of full-time, free, compulsory

education. Half the kids who take a GCSE do not get grades A to C in English and Maths.

If anything – on Earth – was judged on that basis, you would sack them. That applies to public or private sector, a personal relationship, anything.

It is a disgusting statistic.”

“One in five adults in this country cannot read at the standard expected of an 11year old. One in three adults cannot add up two three digit numbers,” squeals a red-faced Lord Jones.

He attributes three reasons for this. None are without controversy.

First, there was a “race to the bottom” in the 1960s and 1970s when the government canned the grammar school system and stopped channeling less capable kids into places where they could succeed. “Instead of getting people to aspire, we dumb them down.”

Secondly, the education system lost the importance of the fundamentals. “What became important is a system where as long as you’ve tried it’s OK. You end up with Sports Days with no winners.”

Finally, Digby says, we have got to a point where “parenting has abrogated its responsibility to take part in this enterprise.” He adds that many parents give up much of their time to their kids’ schools.

“But many teachers say it’s

what happens after 3.30, the children go home and there’s not a book in the house.”

From the 1910s to the 1960s, low adult literacy was still there, but there was something for these people to do, he says. “They went into volume car manufacture, into coal mines, shipbuilding, textiles. Now – especially in manufacturing but elsewhere too – if you can’t read, write and count you don’t get a job. So this has illuminated the illiteracy.”

Asia’s century “With the exception of Brazil, this is Asia’s century,” Digby asserts.

“The way a developed world responds to that is the challenge. I want to see [a growing Chinese middle class] buy a Mini made in Cowley, a Vodafone engineered in Newbury, I want them to bank with HSBC, to fly in an Airbus – half which is made in Britain – owned by British Airways or Virgin, and to send their kids to a British university.”

Fixing Britain finishes with a salutary tale. The most powerful civilization in history was not undone by the invading tribes of northern Europe. “Rome did for Rome.

I don’t want that to happen to my country.” @WRStirling

For the full interview, go to: www.themanufacturer.com/articletype/interviews

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R&D Tax Claims

Crystal R&D Tax Claims Ltd helped a 125 yearold manufacturing company successfully reclaim tax spent on research and development.

R

&D Tax Claims, a Wolverhampton-based tax specialist, assisted West Midlands based Glassworks Hounsell in reclaiming £29,400 from HMRC under the research and development (R&D) corporation tax reclaim scheme.

Glassworks Hounsell manufacture precision engineered machinery for making all kinds of industrial formed glass. The company also make canning and plastic bottle manufacturing machines and specialise in the design and development of tin oxide electrodes used for melting glass.

“If we can design it, we’ll build it”, says William Brinkman, director of sales.

“The glass manufacturing industry is still our biggest customer and we supply many of the famous names, including crystal companies Waterford and Baccarat and building materials company Saint Gobain, and 90 per cent of our product is exported to Europe, the Far East, China, USA and Thailand. The growth in touch screen technology

Using the evidence we provided, Mark and the team were able to demonstrate that almost half of what we do is R&D William Brinkman, Director of Sales, Glassworks Hounsell

28

and flat screen TVs and displays has been hugely beneficial to us.”

Just rewards R&D Tax Claims had to move fast to help Glassworks Hounsell reclaim the money they were due. “Their year end was approaching”, explains Mark Evans, managing director of R&D Tax Claims.

“But they were willing to invest a very small amount of time which has resulted in a successful reclaim.

The process will be even more streamlined next time as they are now working the R&D reclaim element into their accounting practices.”

Glassworks Hounsell invest heavily in research and development. “If I’d been asked how much before we were introduced to R&D Tax Claims I’d have said around five per cent”, says Mr Brinkman.

“Using the evidence we provided, Mark and the team were able to demonstrate that almost half of what we do is R&D, because we have to evolve continuously and learn from every new job.”

The company does not operate a designated R&D department, but like many businesses involved with innovation, learns by trial and error through the process. “It can occasionally involve building an entire prototype machine in order to solve problems”, explains Brinkman. “But we didn’t consider this to be R&D, we were just doing what any company does to stay ahead of the game. We then reinvest the knowledge learned in the next job.

£29,400 was reclaimed by Glassworks Hounsell

R&D scheme through links with Richard Simpson and the Science City Knowledge Transfer at The University of Birmingham” he says. “Richard then made the introduction to R&D Tax Claims. We looked at the scheme previously but didn’t feel that we did any white coat development.

Richard thought we should be reclaiming however, and the cheque for nearly £30,000 proved he was right.”

“I was very surprised at the speed of everything and we’re delighted with the reclaim”, concludes Brinkman. “It was quick and painless and the time invested was about a day. We see this as an ongoing process and will be claiming through the scheme yearly from now on.”

A meeting of minds Glassworks Hounsell established its relationship with R&D Tax Claims through a university Knowledge Transfer Network (KTN). Mr Evans says it is increasingly working with these kinds of schemes because they provide a rich of R&D capability and talent. “This translates into growth in the jobs market and the successful progression of the UK manufacturing sector,” he observes.

Brinkman recalls his introduction to R&D Tax Credits positively. “We found out about the HMRC

R&D Tax Claims Ltd T: 01902 783172 www.rdtaxclaims.co.uk contains case studies of other successful claimants and further details of the HMRC scheme.

Interview 60 second

Gordon Styles CEO, Star Prototype

Having built up and sold one of the UK’s first rapid prototyping businesses Gordon Styles, an entrepreneurial engineer from London, became so frustrated with the difficulty of financing subsequent ventures that he fled to China to apply his expertise there. From that rapid growth, investment-ready nation, Mr Styles observes the environment for manufacturing in the UK with disappointment. : In May, at a personal expense of £10,000 you published a letter in the Financial Times defining a 10 point plan to reform UK economic policy and release the potential in British industry. How do the measures outlined in the industrial strategy, which Vince Cable announced in September, match up with what you suggested?

Too little too late. Cable’s strategy gives the new business bank £1bn which will leverage £10bn for British companies. But UK manufacturing needs £50bn over the next five years if the economy is to rebalance. If it was lent this – not given – British industry could double in size in just a few years. In my letter I set out points for economic reform which would really make a difference including banning fractional reserve banking and giving the treasury complete control over the creation of UK currency.

We must control M4 money supply if we are to break out of boom and bust. : Frustrated with the difficulties of running manufacturing firm in the UK, you moved to China and founded Star Prototype. How different is the reality of manufacturing in China compared with common perceptions that it is a place to ‘make cheap and stack high’?

The Chinese government is very clear about its intention to create a high value add manufacturing base within the next five years. We hear stories of textiles and toy factories which employ thousands of workers going bust in China. The government isn’t bothered. That business can go to other, emerging economies like Thailand and Vietnam.

What it wants to see growing is high tech manufacturing and it supports this through actions like dropping import duty on high tech goods to zero. Manufacturing firms in China are buying the best kit from Europe like it’s going out of fashion.

: How much of what you produce in China do you export to the UK? About 25% - this equates to around £1.5m worth a year.

Most of our orders in the UK come from design firms. This differs distinctly from the US where we get a lot of work from blue chip organisations. : Would you ever bring production back to the UK? It is unlikely but not impossible. In large part my reluctance would be due to my personal experiences of running engineering firms in the UK. Frankly, my experiences trying to finance and support my businesses there were traumatising and I know there are many other engineers like me who are suffering the same stresses.

In China life

Mr Styles’ letter as published in the Financial Times in May this year

is better. I pay very little tax.

I own 100% of my company which is cash rich, has never had to borrow money and is just scraping the surface of funding opportunities. It’s a tragedy that this is so far from the case in the UK because I do believe that there is something special about UK engineering and UK industry. It is extremely innovative and up for a challenge – but there needs to be government incentive.

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induction direct

screening direct

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Papaya Making light work of administration

Making light work of As one of the nation’s premiere producers of specialty lettuces, Jepco is highly reliant on its several-hundred-strong seasonal workforce in order to satisfy the needs of its customers. As Tim Brown found out, the streamlining of Jepco’s HR administration has allowed the company to search for even more green shoots.

A

s a business, Jepco works closely with Concordia (labour provider) to source its key seasonal workforce from across Eastern Europe.

However, before an employee can join the Jepco ranks, there are a number of control and training needs which must take place. Employees must first complete a form for preemployment screening and then must proceed through an induction process to ensure they are ready for the commencement of work.

“Historically we plotted the status of each employee using spreadsheets and were creating enormous paper trails that were very hard to follow” says Jepco technical compliance manager, Jane Doherty. “My role was heavily focused on the administration of the seasonal labour force.

“That red-tape meant a considerable amount of communication with future

employees who had to also complete form after form and also undertake a certain amount of time-consuming training.

“What we really wanted was to be able to capture employee data easily, conduct training on-line and then be able to access the employee data and training results quickly at any stage of their employment,” says Ms Doherty.

Jepco enlisted the assistance of IT solutions provider Papaya whose cloud-based Induction Direct software perfectly fitted the bill. What Papaya offered was a system which let Jepco automate the pre-employment screening administration process, store data effectively and deliver training and assessment.

Using its highly configurable system, Papaya created a range of modules and forms that allowed Jepco to issue them to their prospective employees. The modules were designed to be supported by brief question and answer section which assesses the users understanding.

The Papaya solution Step 1

A potential Jepco seasonal worker applies and is issued by email an access code to access the Papaya system which begins with a pre-employment screening.

Step 2

After passing the pre-employment screening, the potential employee is then able to complete a series of modules and assessments to fulfil the induction process. All results are stored in the Papaya system.

Step 3

Once the induction is completed, the new employee can commence work.

According to Ms Doherty the change at her company and in her role has been - significant.

“You wouldn’t believe how much this has reduced my workload. I have not had to get involved in managing any areas of the workforce whereas before I spent weeks and now I am able to get on with my real job of managing compliance within the company. In addition, employees that have been with us for a number of seasons have openly told us that the new system is far superior to the way we used to operate.”

Since the introduction of the Induction Direct solution, Jepco has also looked at using a similar solution Papaya is offering to also automatically screen its suppliers to ensure they are audited correctly and meet the required compliance imposed by its customers.

Both Papaya solutions have proven to be incredibly successful for Jepco who are now reviewing all of their systems cross functionally to see if they can drive even more efficiencies.

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Searcy’s at the St Pancras Grand - the venue for this Manufacturer Directors Forum Dinner

Hungry for improvement Pursuing operational excellence is an unending and task. But how hard and fast should improvement be pushed and what is the role of management in setting the pace? On October 3 manufacturing and operational excellence leaders met to discuss these questions at a Manufacturing Directors Forum event.

U

sing the recent Olympic Games as an example for how to excel has become a favourite metaphor among politicians and bankers. Sir Mervin King told us in August that “we have been reminded that an objective that is worth attaining, like a gold medal, requires years of hard work. Success does not come overnight.

That is as true of our economy as it is of sport.”

And the opening to this Manufacturing Directors Forum dinner proved that manufacturing leaders and improvement professionals know that it is also true in business. “The Olympics provide valid lessons to governments, manufacturers, everyone, that we must not let slip by,” said Colin Larkin, plant manager for Fiat Industrial-owned tractor manufacturer Case New Holland UK (CNH p32).

But subsequent conversation over dinner also showed that the hard work must continue long after the initial objective, or objectives, have been attained. As dinner guests introduced their experiences, challenges and ambitions

32

for operational excellence in their businesses a common impression of companies or individuals grappling with how to sustain continuous improvement was obvious.

For senior manufacturers this raises the question of the role of management in providing a mandate and a cultural framework for change – two requirements which divided opinion around the table.

Values v KPIs Some – like Vincent Middleton, managing director of familyowned Newburgh engineering – were strong proponents of a value-led approach. “We spent about five years on cultural

change in the nineties,” he said, describing how knowledge sharing with Asda proved a transformative experience on this journey. “Suddenly [the workforce] got it and we had no more management issues.

It was amazing to see how the whole organisation pulled behind our agreed set of goals – each managing themselves to ensure they worked towards them every day.”

But for others this ‘soft’ approach did not wash. More measurement and a faster pace of change were noticeably seen as imperative among larger organisations – or their heavily audited subsidiaries. Ed Koch, head of manufacturing

Leadership in manufacturing

development at SABMiller said that there was a need for management to create a ‘burning platform’ for change. Others, including CNH’s material handling manager, Dean Stephenson felt that, in a competitive business environment ‘harder’, data driven approaches to improvement, manifest in regular audits from Fiat in the case of CNH, were necessary to maintain what he called “a sense of urgency” to improvement.

David Coatsworth, manufacturing director at Parker Hannifin agreed, but tempered his stance with the statement that “if you continually drive improvement then you will never get ‘pull’ in value creation for the business.”

Mr Coatsworth also questioned the practice of offering monetary reward for improvement suggestions – as is the case at CNH. “Personally I believe that if you pay individuals hard cash for their suggestions you will never get the right team approach to continually fulfilling the company strategy,” he commented.

Measurement with meaning This observation linked to conversation about the importance of understanding why certain measurements of improvement are chosen, and questioning whether they are right for the business, its values and the requirements of its customers and shareholders. One important observation, agreed upon by all was that lean and operational excellence must not be seen as purely cost cutting initiatives, nor purely the responsibility of operations.

“The biggest [competitive] lever in a business is often not cost,” observed Colin Drummond, operations director at GlaxoSmithKline. “Quality, on time in full delivery, lead time, your ability to deal with seasonality of demand, these might all be bigger factors, depending on your business, product, customers.”

Mr Drummond suggested that one way to ensure the most meaningful drivers for improvement are recognised is to involve commercial teams and other non-manufacturing departments. All agreed, but on further questioning most admitted that this was not the reality of their operational excellence initiatives which were still generally viewed as being an operations remit.

This is just a brief summary of a few key observations made at the MDF dinner on the role of management in effecting positive and continuous change in manufacturing organisations. Other interesting discussions also emerged around evolving attitudes to product complexity and how to offer variety without imposing unnecessary variation in manufacturing. The interaction between continuous improvement, measurement and increasing levels of technology also prompted debate, most agreed that, while technology is facilitating more data capture opportunities, too much reliance on it will distract from strategic improvement.

Guests at this Manufacturing Directors Forum dinner represented the following organisations: CNH Tractors | Hozelock | Milliken | Newburgh Engineering | Parker Hannifin | Newton Europe | SAB Miller The Manufacturer extends its thanks to Newton Europe for sponsoring this event For more information about ’s Manufacturing Directors’ Forum events please contact Henry Anson (h.anson@sayonemedia.com) on 0207 401 6033.

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PE investment gives focus to value creation

ewton works with management teams to help create step change in business. In the eleven years since its foundation Newton has worked with around 500 management teams and 40% of those have been private equity owned.

As discussion of the role and focus of management in driving operational excellence kicked off at this MDF dinner Tom Wedgewood, co-founder and director of Newton shared some striking observations on the relative performance of these PE-driven firms with those under other ownership models.

Mr Wedgewood shared with guests that, in the past 10 years PE-owned companies have achieved three times the level of shareholder return on the stock market. He also asserted that, post 2008, the majority of this return had come, not through leverage – as is often assumed – but through spurring value-add activities.

In search of the particular attitudes and actions which have caused PE-owned firms to outperform others so consistently since 2008 in terms of value creation and EBIT growth, Newton undertook its own research. “What we saw in relation to employment was interesting,” said Wedgwood. “Between 2008 and 2010, manufacturing as a mass lost around 10% of headcount. In PE-owned firms, despite a lot of outsourcing, the average employment went up by 2%.”

Two things allow this growth said Wedgewood. The first is investment in good, professional management teams in which the investors take a strong slice of the action. These management teams form robust strategy and commercial initiatives which help to rationalise and focus operations.

But crucially, Wedgewood identifies “an enormous mandate for change” as being the key to success in PE-owned firms. “When a private equity firm first takes control, no one knows what is going to happen. In that environment you can drive through a huge amount of change.” Furthermore, Wedgwood concluded, research shows that PE-owned firms in the midmarket respond best to this kind of mandate and expectation. “This is because it is easier to feel management in a midmarket firm – right the way from the board to the shop floor – whereas ownership is often almost invisible in large firms.”

Can manufacturers without PE replicate the hunger for achievement that this ownership model drives?

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A share of the action

P

Signing away employment rights for company shares. Is it worth it?

Neil Black, employment partner at Pinsent Masons explores government proposals for employee-ownership contracts.

In some of Britain’s cutting edge entrepreneurial companies the option of share ownership may be attractive to workers, rather than some of their employment rights. But I think this is a niche idea and not relevant to all businesses John Cridland, General Director, CBI

34

arty conference season provides a platform for ministers to present eyecatching proposals that are alarmingly short on detail.

George Osborne’s speech to the Tory faithful was no exception, as he outlined plans for UK employees to sign away a raft of employment rights for shares in their employer worth at least £2,000.

The Chancellor envisages employees giving up the right to claim unfair dismissal, the right to a redundancy payment, the right to request flexible working and the right to time off for training. maternity leavers will be required to provide 16 weeks notice of returning from maternity leave instead of the usual eight.

In return, Osborne offers employees shares in their employer, which are exempt from capital gains tax.

Overview The key question is whether this has much appeal to either employees or employers. The plan certainly fits with Nick Clegg’s assertion in January that employee-owned firms perform better: “We need more individuals to have a real stake in their firms, more of a John Lewis economy if you like.”

Encouraging employee engagement is undoubtedly a positive step for both employer and employee. However, it is questionable whether this should be directly linked with reduced employee rights.

The plan affirms the Coalition’s commitment to business. But suggesting it is fear of unfair dismissal claims that prevents employers from recruiting is not reflected by a recent survey carried out by Pinsent Masons in response to the Government’s proposed tribunal reforms.

It is worth asking whether these measures are even necessary. During 2011 there were 46,300 unfair dismissal

Employment rights claims before the tribunal, a fall from 57,400 in 2009–2010. This number is only likely to decrease further with the introduction of fees and the increase in the qualifying period to bring a claim to two years.

These and other issues need to be thought through carefully if the proposals are ever to see the light of day, or they will “sink without a trace” as Mark Serwotka, head of the PCS Union, predicts.

The employee’s perspective New employees would understandably consider it a sizable risk to sign away their rights with an unknown employer in exchange for £2,000 worth of shares.

This is not an easy sell, given that: The median tribunal award for unfair dismissal in 2012 was £4,560 with the average award £9,133. However, employees can be attracted by headlines of high awards and drawn to the maximum compensatory award of £72,300. The Government has suggested that employment rights would be swapped for between £2,000 and £50,000 of shares. Are employees going to see that as a good deal?

Employees will be expected to relinquish their right to a redundancy payment.

Normally, one would expect redundancies to be made at a time when a business is struggling financially. The employee may have given up their right to a payment at the very time their shareholding value has decreased.

The scheme has already received an angry response from unions, with Brendan Barber the TUC’s general secretary “deploring any attack on maternity provision or protection against unfair dismissal.”

The employer’s perspective The tension here is how this latest policy announcement fits with the Government’s intention to reduce red tape for business.

It anticipates that the proposals will be attractive to small and medium enterprises, yet if firms consider the proposals too complex they may prefer to risk possible unfair dismissal claims instead. John Cridland CBI General Director explains: “In some of Britain’s cutting edge entrepreneurial companies the option of share ownership may be attractive to workers, rather than some of their employment rights. But I think this is a niche idea and not relevant to all businesses”.

Many commentators view Osborne’s announcement as lacking in any real detail. With a consultation planned shortly, the real hurdle that the Government will have to overcome is to ensure simplicity, so that it is not a case of exchanging one red tape for another. Some of the operational issues the Government will have to resolve are: Will they produce standard wording for the contracts, articles of association, shareholders agreements etc or are they an administrative cost and burden that employers will have to bear?

What will happen following a sale of part of the business? Will a new employer be forced to offer a scheme to transferring employees to match that of their previous employer? Will this become an issue on future M&A deals?

Given that employees have given up their unfair dismissal/redundancy rights, will it encourage employers to short-circuit redundancy processes so that opportunities for re-engagement and redeployment are missed?

Who will buy the shares back from the employee owner? As Matthew Findley, partner in tax, litigation and compliance at Pinsent Masons advises, there is often no ready market in small and medium sized enterprises. Companies may therefore be expected to set up and fund employee benefit trusts to buy back shares.

Will there be a mechanism for valuing the shares receipt on departure? For leavers, will this involve traditional good leaver/bad leaver provisions? For instance, will a company be allowed to place a lower value on the shares if the employee voluntarily resigns?

What if there is a dispute on valuation? Will companies be expected to fund a reference to an independent third party valuer with the expense that will entail?

What will be the tax treatment of the shares when they are given to the employee? Whilst the Government has said that employee owner shares will be exempt from capital gains tax, the income tax position is unclear.

Whether or not income tax is payable, when will this materially affect the attractiveness (or otherwise) of the proposal from a tax perspective?

How will the proposal to give up flexible working rights be squared with discrimination legislation? This is a discrimination issue as women are more likely to request flexible working than men. Discrimination claims will not be signed away under the new scheme, so employers could go to all the expense and effort of buying off the rights and still be left with a claim.

Some commentators, such as the British Private Equity and Venture Capital Association, have welcomed the proposal: yet there are a number of hurdles that need to be overcome before the Chancellor’s ideal of an employee-owned business with an engaged workforce can become a reality.

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Lord Marland addressing delegates watched by the panel (l-r) Lynn Tomkins, Indro Mukerjee, Juergen Maier, chair Jacqui Henderson CBE and Nigel Whitehead.

Simplify the skills

landscape The Government needs to do more to create and support a consistent approach to skills in advanced manufacturing - that was the message from a fringe meeting hosted by Semta at the Conservative Party conference.

L

eading industrialists urged politicians to stop reflecting too much on the past and instead look to the long term planning being done in emerging markets such as Asia, at the event hosted by Jacqui Henderson CBE. Their comments came after Lord Marland, Parliamentary Secretary of State for Business Innovation and Skills had told delegates how the excellence of UK manufacturing was recognised around the world. He had visited 25 countries all of which put the UK in the top three to do business with.

He said our industrial heritage, the transparent nature of law, “incorruptible” government, low corporation tax, world-class products and a strong education and skills base made the UK very attractive.

36

But he warned, while the Government could incentivise companies to drive skills, it could not be responsible for training, saying firms needed to take a “cradle to grave” approach.

“I would urge more businesses to take the risk of training people from an early stage,” Lord Marland told delegates.

“We are here to help, to set the framework. It is taking time, but we are getting there.”

Skills communities Indro Mukerjee, CEO and director of Plastics Logic Ltd, outlined how electronics technology was at the heart of most business, the industry itself employing 856,000 people 2.9% of the working population.

He described how the landscape had changed, with the electronics industry now populated by more SMEs than big brand companies, creating a challenging skills environment.

He said The UK Electronics Skills Foundation – formed through a public/private

partnership – would create a pipeline of bright students from academia into British industry.

Mr Mukerjee told delegates it was vital to connect employers with talented people in schools and universities if there was to be a sustainable supply of industry-prepared graduates and apprentices.

Confidence needed Managing director of Siemens UK industry sector, Juergen Maier said he was encouraged by the trend of more investment in advanced manufacturing but warned there was no room for complacency.

“We have too many skilled engineers retiring in the next 15 years and not enough young people to take the jobs,” he said.

“This year Siemens has taken on 160 apprentices and 100 graduates and this will rise year on year. We support the previous government’s moves on apprentices, continued by this government, which is making up for lost ground.”

Workforce and skills

However, he warned SMEs in the supply chain were not finding it as easy as the bigger firms so they needed more support. He said the complex skills landscape needed simplifying, while the bigger firms could do more to help smaller companies.

“The government needs to take a more proactive rather than passive role,” said Mr Maier.

“There needs to be firm commitment to things like offshore and nuclear for example. How can SMEs take a risk when they are uncertain how much the UK is going to invest in these areas? That sort of dithering makes it difficult to make long term investment decisions.”

Core skills and diversity Nigel Whitehead, group managing director programmes and support BAE Systems, stressed the huge importance of the engineering and manufacturing to the UK, generating £1.5 trillion in turnover - 25% of the turnover of all UK businesses - employing 5.6million people in more than 550,000 companies, making the UK the seventh largest manufacturing nation in the world.

He said there was an estimated requirement for 2.2million new people over the next decade with 17% of manufacturers reporting skills gap now.

While there had been a positive increase in the numbers taking GCSE Biology, Chemistry and Physics, with student numbers tripling in 10 years, only 15% of the GCSE cohort achieved A to C in Maths and triple science in 2009/10. In the same year only 4% achieved Maths and Physics at A level, generally a prerequisite for an engineering degree and of those only 21% were female.

Of the 460,000 apprenticeship starts last year, 49,000 were in engineering and manufacturing, but only 5% were female.

Concerted marketing A recurring theme from the speakers and questions from the floor was a need to excite schoolchildren to the possibilities of manufacturing but then continue to engage them.

Mr Whitehead said since 2005 more than 130,000 9-14 year olds had been to a BAE Roadshow and in applications for jobs today many candidates mentioned that experience as a reason for pursuing a career in manufacturing.

“All the ingredients are there but we need a marketing job surrounding the UK’s national ambition to make and sell things so young people can understand and see it is a career for them,” he said.

“BAE invested £85m last year in skills, with around 1,000 apprentices and 500 graduates in training. If industry as a whole doesn’t get it right - and get it right now - we will miss a great opportunity.”

Semta’s UK operations director, Lynn Tomkins said it was important to get the message to young people that a career with an SME can be just as rewarding as with a bigger firm.

She said Semta’s ambition was to double the number of companies taking on apprentices this year. So far, 2,000 places had been identified while 200 companies had expressed a willingness to take on a graduate and the sector skills council is working with 30 universities to achieve that aim.

“There is a huge willingness among companies to attract and train their own talent but they need help, particularly in the supply chain,” she said. “Only 8% of the workforce is currently in the 16-24 age group so we have some issues.”

Responding to questions as to how this might be changed, Mr Mukerjee said: “While we should be justifiably proud of our heritage we must look to the future and benchmark ourselves against some of the Asian countries and companies who have excelled in technology.”

Leadership Mr Mukerjee also raised the issue of respect for the engineering profession in the UK. He said those who have excelled in engineering need to make it clear that it is a career to be wanted rather than fallen into.

Mr Whitehead said of the 400 leaders in military aircraft around 270 had started as apprentices, which showed their value. He said promotion of apprentices outstripped that of graduates yet too often apprenticeships were seen as the poor relation.

The panel agreed that this needed to change.

“We have to get into a position where everyone, whatever their background, sees an apprenticeship is for their children rather than someone else’s,” concluded Mr Whitehead. “It is that perception we need to tackle.”

Panel The fringe meeting was chaired by Jacqui Henderson CBE. On the panel were two board members of Semta, the sector skills council for science, engineering and manufacturing - Indro Mukerjee, CEO and director of Plastics Logic Ltd, and Jeurgen Maier, managing director of Siemens UK industry sector.

Alongside them was Nigel Whitehead, group managing director programmes and support BAE Systems - and Lynn Tomkins, Semta’s UK operations director.

Indro Mukerjee, CEO and Director, Plastics Logic Ltd

Jeurgen Maier, Managing Director of Siemens UK Industry Sector

Nigel Whitehead, Group Managing Director, Programmes and Support, BAE Systems

Lynn Tomkins, Operations Director, Semta’s UK

37

Workforce Life skills and skills

While university graduates will always be essential to the life sciences industry, changing conditions and end-user needs mean employers with a one track mind on skills sourcing may be at a disadvantage.

Sector skills council Cogent aims to create beacons of best practice in diverse skills sourcing.

T

he UK life sciences industry is worth around £50 billion to the UK economy and it is among the sectors targeted for growth

by Business Secretary Vince Cable in the industrial strategy he announced this September.

Prime Minister David Cameron has described the sector as a “jewel in our economic crown.”

But realising the full potential of UK capability in life sciences will be difficult. The sector comprises many subsectors and multiple disciplines, the interaction of which breeds complexity in the delivery of products which reflect changing societal requirements.

Life science firms are straining to develop business models and incorporate new technologies which enable them to service shifts towards treatment of lifestyle, home treatment and early indicator diagnosis of disease rather than simply addressing illness.

Diagnosing best practice The evolving industry model requires a recalibration of skills, value chains, methods of collaboration and more.

Focussing on the first requirement, sectors skills council Cogent has launched a new awards programme to encourage best practice in the development of clearly structured skills strategies. The initiative was announced during its annual Westminster Skills Forum at the House of Commons on October 16.

Cogent has a vision to help the life sciences sector solve its problems in effectively recruiting, developing and maintaining talent through encouraging a more balanced portfolio of entry routes into the industry.

Critically this includes pushing for an increased recognition of the usefulness of higher and advanced apprentice schemes in life science companies.

The sector has traditionally recruited its talent at graduate level and many companies are dubious about the ability of modern apprenticeship schemes at NVQ levels 4 (and above) to deliver the abilities they need. This is despite a growing stack of case studies pointing toward high value-add from apprentices in the sector, the collaboration of the University of Kent in delivering a carefully created higher apprenticeship/foundation degree programme for life sciences and the availability of employer support in delivering apprenticeships through Cogent’s Technical Apprenticeship Service (TAS).

Commenting on the importance of growing apprenticeships in the life sciences sector Joanna Woolf, Cogent CEO says, “While graduates will always be an important source of talent, employers also want people who meet their unique company requirements and can learn on the job.”

At time of writing, TAS was progressing 31 higher apprenticeship starts at various different stages and across a number of learning pathways. A “given that some of Cogent spokesperson told the pathways have only been launched in the last month, [31 starts] is actually heartening.”

Ms Woolf has high ambitions for the new higher apprenticeship framework which she says is “set to challenge the way that employers recruit their science professionals.”

Remedy With its new awards agenda Cogent hopes to put best practice in balanced skills development on a pedestal and inspire other life sciences employers to consider diversifying their recruitment and development practices.

Awards categories will recognise a sector graduate, advanced apprentice, higher apprentice and work placement of the year. There will also be awards for all-round excellence in employers.

Award winners will become skills ambassadors for their industry says Cogent.

The awards scheme has been sponsored by the Association of the British Pharmaceutical Industry and the first awards ceremony will take place on May 16, 2013 in London.

To find out more about the Life Science Skills Awards go to www.cogent-lifescienceawards.com To see a video with Takeda Cambridge about its recruitment of a higher apprentice through TAS and the benefits she has brought to the business scan the QR code below:

39

f o e e y o l Empmonth the ber 2012 m Nove

Louise Anderson Undergraduate Environmental Assistant, Vauxhall Motors At Siemens’ Answers for Industry event in July Louise Anderson made a powerful impact on older, more experienced and perhaps more jaded industry representatives with her confidently expressed views on the appeal of manufacturing to young people. Here she tells more about her own career to date. : What is your role and what are your main responsibilities?

I’m an environmental assistant working in the facilities department at Vauxhall Ellesmere Port Manufacturing Plant. I joined the team for one year as an undergraduate half way through my degree. My main responsibilities are to assist the team in ensuring the site performs to and above the ISO 14001 Environmental Management Standard and the Wildlife Habitat Certification.

I’ve also been in charge of

CV in brief: Louise Anderson Age: 22

Education:

GCSE: 3A*, 2A, 4B AS Level: German A Level: Business Studies, Geography and English Literature Environment and Business BA with Industrial Placement at The University of Leeds

Career:

Sales and Events Assistant at Inventive Leisure (2008 – present)

Interests:

Travelling Sustainability

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increasing environmental and energy awareness and communication. : What are the key skills you use?

My role requires a lot of communication including persuasion, presenting and negotiating. I need to be organised and plan well in advance for any upcoming audits to ensure we score highly. : What personal characteristics help you in your role?

I’m quite confident and can talk to a wide variety of people which is really important when working in such a large plant. I learn easily and I’ve been told I come across as very enthusiastic and passionate about the environment! : What do you consider to be your biggest personal success at the company so far?

This year I’ve been managing a project to increase awareness of manufacturing by visiting local schools. We have created a two hour session to inspire and educate students about the variety of jobs in the manufacturing industry and to overcome the stereotypes of manufacturing. I’ve had to manage the team of 20 undergraduates and to date we have visited over 3,000 students! : Why is this important?

The team broke a site record for visiting the largest number of students in one year and the feedback told us that 75% of students we met would now consider a career in manufacturing. : What first attracted you to a career in manufacturing?

I was looking for some work experience in the environment sector and found this position through my university. I was attracted to the job because I

Have your say at www.themanufacturer.com

knew I would learn a vast amount in a small time frame. I thought the manufacturing industry would give me a great insight into the huge amount of legislation, regulation and standards involved with environment, waste and energy and I have not been let down! : What will your next career move be?

I’m going back to University to finish my degree and will be working two part time jobs to fund my studies. After University I hope to find employment within a large international organisation that has sustainability at the heart of its business. : Do you have a grand career ambition?

I would love to be in a position where I can really push sustainability and influence others to do the same. : How do you think best to get more young people interested in manufacturing?

I believe manufacturers should go and visit local schools and invite all the students into the factory.

Show the students how you build the products they use, tell the students about the varied and exciting careers available and inspire them with the technology and future of the industry.

UTC Diary

UTC Diar

Hayley Ramadhar waited two years to join the Black Country UTC. Here she explains why the move was so important to her stellar ambitions and gives her first impressions of the school.

I

first heard about Black Country University Technical College when I had a letter through the door one day informing me of the new school that was opening in my area.

There was an open evening which I attend with my family and I came way thinking what a fantastic school it would be to attend. It was that evening that somebody inspired me to work for my dream job building space technology. Unfortunately, I had already started year 10 so I was too old to join the first intake.

But the inspiration I received on that first open evening endured and two years on I enrolled in Year 12 to start my A level studies with the college.

Moving from a mainstream school with over one thousand students to the college with less than half that number was strange at first but I soon adjusted. At my old school, my smallest class was nineteen students. That is now my biggest class and the smaller class sizes mean teachers can help each student more, ensuring that everyone understands their lessons thoroughly.

In much smaller classes, and indeed a smaller school overall, everyone seems to get on much

Within four weeks of joining the UTC this year I have been out on trips to many different engineering and manufacturing workplaces

better. We really work as teams and I know this experience will help when we all go out into the working world and have to form professional relationships and get on with people in the work place, even if you don’t want to!

The college provides young people with the opportunity to get an all-round education, preparing them with qualifications and experience to go onto university, take up an apprenticeship or simply enter the world of work with a better understanding of how to apply knowledge and how to behave professionally. Part of this education includes going out to see that world on a regular basis.

Within four weeks of joining the UTC this year I have been out on trips to many different engineering and manufacturing workplaces. These include Jaguar Land Rover and RAF Cosford. There have also been people coming into the school like the Royal Marines who spoke to the Year 10’s and 11’s about the different options for a career with them.

All these experiences help us to decide what we want to do in the future. It highlights that engineering isn’t all filing metal in a workshop, that it plays important roles in most

y

industries. Other schools don’t give their students the opportunities to see the real world of work.

My teachers have worked in the industry before taking up their roles with the college and this is clear in their teaching styles.

They link everything to how it is important in real life. Who knew that quadratic equations had anything to do with pistons and fuel in a car engine?

Our teachers are enthusiastic about their jobs and this has a knock on effect with us students. Having teachers with experience in different fields allows the college to offer a wide range of extra curriculum activities from drawing to aeronautical engineering. Each of these unique features allows more students to achieve their dream careers in industry.

Currently, I am working toward A levels in maths and physics and a diploma in engineering level three. These are qualifications that I couldn’t do all together anywhere else. Coming to the UTC was a fantastic decision that I will never regret.

Being a pupil at this college is giving me the knowledge and skills to make sure I understand all the steps on the path to achieving my ambitions.

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Manufacturing in the South: Recipes for success There is now widespread consensus that a thriving manufacturing industry is vital to the recovery of the UK economy. Daryl Gayler, regional managing director at RBS South Region, outlines how manufacturers in the South of England do their part to boost growth and morale in the sector by delivering best practice in a challenging business climate.

D

espite economic turbulences, 2011 proved to be a relatively good year for the UK manufacturing industry.

Now, with two months left of this year a number of headlines suggest that the sector faces the toughest trading conditions in years with the euro zone crisis sapping export demand from its ‘traditional’ markets.

However, manufacturers in the South of England continue to create jobs, announce further significant investments and report growing sales. How do they beat the odds and Is there such a thing as a southern recipe for success?

What makes the South and what does the South make?

The South of England benefits from a thriving and diverse manufacturing base, which has made a very positive contribution to the prosperity of the region.

Prominent among the sub-sectors setting the pace for growth in the region is the food sector with the South West being a historical hotspot. Another key area of concentration is Kent, with around 500 firms, employing over 18,000 people, which feeds into a wider food manufacturing industry throughout the South East, the UK and export markets.

In the Thames Valley it is technology and electronics firms which enjoy a high profile. In the latest Thames Valley Business Barometer (BDO LLP, September 2012) more than 70% of the respondents stated that their economic outlook has improved or remained the same in the last quarter. A reflection of this confidence is evident in increasing headcount. Forty per cent of respondents increased headcount this quarter and 42% expected to do so in the next three months.

Another sector that is performing strongly is the UK aerospace industry with more than 900 aerospace related companies located in the Bristol area. The sector, the biggest aerospace industry in Europe and second largest in the world, saw a 4.7%

42

increase in revenues to £24.2 billion last year and boosted workforce numbers by more than 4,000 employees to 100,658 whilst investment on research and development rose by a staggering 11% to £1.97 billion (ADS, July 2012). Aerospace contributed £3.2 billion to the South West economy (ADS, 2011).

Aerospace is a fast moving sector and is not immune to structural change. Were the BAE/EADS merger to have gone ahead, the implications for the UK supply chain would have been far reaching and carried the potential for unforeseen, and perhaps unintended, consequences.

Last, but not least, the South boasts some of Europe’s most productive car plants with an automotive supply chain of more than 2,000 component manufacturers. A number of car manufacturers have announced escalations in their investment programmes for factories in the region.

Best practice boosts the South Although many might say that the business climate in the South has traditionally been more favorable than in other UK regions, manufacturers there aren’t only successful due to their location.

By embracing similar best practice techniques, companies across the South have built an efficient manufacturing community capable of rising to current economic challenges. Interestingly and encouragingly these best practices are neither sector nor company specific, but could be applied across the whole manufacturing industry.

Best practice: Trading Internationally Government has recently urged companies to boost much needed domestic growth through export and is already an established forté of UK manufacturing.

Manufacturers are more likely to export (55% of all companies compared with 31% in the economy as a whole) and the sector contributes 50% of all UK exports (EEF, Manufacturing Focus, Spring 2012).

Europe remains the UK’s biggest export market, but its share has fallen from 60% over the last decade to 54%. A growing number of our manufacturers in the South have moved on to less ‘traditional” regions such as Central and Eastern Europe with Turkey offering particularly attractive opportunities. Other key markets include the Middle East and Asia. The foods and drinks sector, for example, reported its strongest export gains outside the EU for the first half of 2012 in Africa (+23.6%) and the Middle East (+17.7%). (FDF, September 2012) The local UK Trade & Investment (UKTI) branches for the South West and South East (and across the UK) are an excellent first point of contact for any manufacturer in the South planning to export.

Best practice: Staying ahead of the game through innovation and diversifying the product range The importance of innovation and R&D budgets is well known among UK manufacturers. Manufacturing

Regional Focus 3

5 7

1

Manufacturing hotspots in the South of England

1

1 7

6

2

6

4 5

3

4

2

South West 1 Bristol/Swindon: Aerospace/Defence/ Telecommunications/Information technology/ Electronics 2 Cornwall: Food/Mining 3 Devon: Food & Drink/Healthcare/Defence 4 Dorset: Engineering/Shipping 5 Gloucestershire: Food & Drink/Aviation/ Engineering 6 Somerset: Food & Drink 7 Wiltshire: Automotive/Food & Drink

South East 1 Berkshire: Consumer goods/Electronics/Food/Automotive 2 Surrey: Engineering/Consumer goods/Food/Oil & Gas 3 Buckinghamshire: Automotive/Healthcare/Consumer goods 4 Hampshire: Engineering/Automotive/Electronics/Chemicals 5 Sussex: Automotive/Engineering 6 Kent: Food/Electronics/Engineering/Consumer goods/ Automotive/Paper manufacturing 7 Oxfordshire: Motoring/Automotive/Engineering/Food

accounts for 74% of all business expenditure on UK R&D (EEF, Manufacturing Focus, Spring 2012). In the South, the food & drink sector alone accounts for over 4% of the total R&D spend reported in the annual R&D Scoreboard (BIS, 2011).

Another success factor is the application of skills and capabilities into a new sub-sector. Automotive companies in the South have used their knowledge and engineering know-how to target the nearby aerospace industry.

Looking to the future…

Best practice: training best talent Research commissioned by the Royal Academy of Engineering, found that UK industry will need 100,000 new graduates in science, technology, engineering and mathematics (STEM) every year until 2020 just to maintain current employment numbers. However, the UK currently produces only 90,000 STEM graduates a year - including international students who cannot presently obtain work visas - and a quarter of engineering students choose jobs in other sectors.

Firms in the South have broadly recognised the skills challenge they face. They are ready to utilise government funded programmes such as the National Skills Academy for Manufacturing, but they are also engaged in private initiatives. These range from company sponsored training academies for students in the automotive industry to university collaborations between Thames Valley technology firms and the nearby universities in Oxford and Reading.

The UK economy, with manufacturing at its core, is on a long road to recovery. But positive figures from the South show that the region can play a vital role in boosting the manufacturing industry overall.

Adopting best practice in the areas outlined has helped many manufacturers to not only ride out the crisis, but to grow their businesses. They set an example for other firms to follow suit.

Furthermore, after showcasing ‘Made in Britain’ at its best over the London 2012 Olympics and the Diamond Jubilee, firms in the South should see themselves well placed to leverage an increased interest in UK industry. The South – as an economically vibrant and highly accessible region should benefit from additional opportunities, according to the UKTI, to turn casual interest into business and growth.

To find out how RBS can support your manufacturing business in the South, please contact

Daryl Gayler Regional Managing Director, South region RBS Corporate & Institutional Banking T: 01293 643020 E: daryl.gayler@rbs.co.uk

43

EEFInsight Holistic talent and performance management Shaun Lanceley, national head of learning and development at EEF, explains how better alignment of employee performance reviews, professional development, succession planning and corporate strategy can boost performance and talent retention in manufacturing firms.

O

nly those companies which can create forward thinking business strategies delivered through decisive leadership and an agile, high performing workforce are likely to flourish in today’s trying business climate. Yet many manufacturers claim that from top floor to shop floor, effective leaders, gifted managers and skilled workers are in short supply.

This quandary ought to make effective performance management a priority, yet many are still to realise a holistic approach to this important aspect of business strategy. Generally, companies are still dealing with the different elements of performance management in a fragmented way; training plans are often driven by employee requests rather than corporate need and ‘Chinese walls’ between functions are leaving barriers to the development of flexible competencies which support employees in moving between roles.

Change is a constant companion to UK manufacturing and in order to put necessary skills in place for the future, an integrated, top-down strategy is needed. But predicting

44

exactly what skills will be needed to keep pace with the technological complexity of your industry or to exploit emerging markets is a tough nut to crack.

“What if” modelling can aid employee sourcing and target the development they require in order to become high value performers and there are affordable SaaS (Software as a Service) applications available for integrated talent management.

These applications can facilitate the sourcing and development process and, while the technology itself won’t drive talent and performance management in the business, it can help to better integrate components within your strategy and highlight competence gaps.

A business can then better align training with performance management and meaningful employee assessment, building value in the workforce.

This virtuous circle will give employees a clear vision of their preferred career path while adding resilience to business strategy. The confidence resulting from such a vision will go a long way to ensuring the retention of talented employees who can help the business achieve its ambitions.

Have your say at www.themanufacturer.com

Learn about learning Understanding attitudes to learning is crucial to successful talent and performance management.

Younger employees are likely to feel alienated by traditional ‘push’ teaching based on formal instruction.

These digital natives, born into the internet age, are more comfortable pulling down knowledge for themselves when they need it and companies need to leverage the ‘pull’ desire by developing collaborative learning tools that mirror the internet and social networking environments.

Such tools, blended with pragmatic skills and instructor-led training, provide more flexibility for the learner, take up less work time and are generally more cost-effective than traditional learning models.

Optimising performance The current economic climate, is putting pressure on manufacturers to respond faster than ever to market developments and customer demands. As a consequence, increasing performance levels from a talented and motivated workforce are a must.

To help manufacturers meet this challenge profitably EEF investigated how best to leverage its profound understanding of workplace dynamics in manufacturing and broad experience in developing integrated talent, performance and succession management strategies for manufacturers to provide a suite of HR resources and events.

The result has been a suite of tools and events including: an online HR Change Assessment Tool for benchmarking approaches to change management, free resources to help managers build flexibility into their workforces and a set of resources for improving employee relations.

In October we launched more free online resources aimed at helping manufacturers optimise their talent and performance management including: tools for talent retention and managing sickness absence, templates on succession planning, training needs analysis and advice on protected conversations.

Take advantage of EEF’s free online resources at www.eef.org.uk/change.

To register early interest in attending EEF’s Leadership & Skills Conference in Manchester, April 2013, contact jroberts@eef.org.uk.

To find out how EEF can help you attract, develop and retain the manufacturing talent you need for your business email lflynn@eef.org.uk.

Ashford £80,000 plus car, 20% bonus, pension and healthcare

Operations Director and Site Leader – Injection Moulding Are you an inspirational and motivational leader, with proven success in a lean manufacturing and best practice environment looking for a high profile, challenging role?

You will serve as the operational visionary for this plastic injection moulding site and lead a team of functional managers to ensure efficient daily process and productivity.

A keen focus on and achievement against KBM’s is critical, therefore experience of initiating plans and processes which minimize manufacturing costs through effective utilization of resources and capital is essential.

Please send CV’s to: Callum Slade callum@recruitmentgenius.com

www.themanufacturer.com/jobs/operations-director-and-site-leader-injection-moulding

Ashford £48,000 + 10% Bonus

A fantastic opportunity has arisen for a Supply Chain Manager To join the world’s largest provider of analytical instruments, equipment, reagents, consumables, software and services for research, analysis discovery and diagnostics.

The Supply Chain Manager will be responsible for the strategic and tactical planning of manufacturing and distribution for a specific set of products. They will act as an owner of finished goods inventories and will work to achieve both customer satisfaction and business objectives.

Please send CV’s to: Callum Slade callum@recruitmentgenius.com

www.themanufacturer.com/jobs/supply-chain-planner

45

MACH 100 left to right: Prof. Ken Young, Robert Llewellyn,Cllr. Ken Hawkins, Simon Pollard President MTA

Time The UK’s largest machine tools exhibition celebrates its 100th anniversary

I

n April this year the 100th MACH exhibition took place at the NEC in Birmingham and last month, on October 9, MTA – the trade body proudly standing behind the long running event – allowed itself a moment of revelry to mark the very day of the first MACH exhibition in 1912.

The gathering of MTA members and industry representatives at the Manufacturing Technology Centre near Coventry, where the centenary celebration was held, allowed for an overview of the success of the 2012 event. It also provided a platform for the

46

launch of the MACH 2014 marketing campaign.

Despite taking place in the midst of a burgeoning eurozone crisis with attendant uncertainty in key markets, MACH 2012 did not find its attendance throttled.

Far from it.

A wealth of figures show that the trade show outdid its 2010 performance in every proportion.

Most

To celebrate 100 years of MACH MTA has released this commemorative publication.

Copies availble via MTA

importantly for exhibitors, working hard to justify the expense of their stand space, the show pulled in impressive orders – both on-stand and as a result of relationships established at the event. (see box) Another key success at MACH 2012 was the launch of the Education and Training zone, an addition which shows that, while MTA is justly spending time celebrating the history of MACH, it is taking no chances about its future.

The zone is designed to excite and inform young people about the manufacturing technologies being used in factories today. Although only in its first year, it pulled in over 2500 14-19 year-

Manufacturing Technologies

MTA and MTC

M

TA, the Manufacturing Technologies Association, chose a fitting venue at which to celebrate the centenary of MACH. Guests gathered for the celebration at the Manufacturing Technology Centre near Coventry – an institution which recently joined the network of innovation centres collectively known as the High Value Manufacturing (HVM) Catapult.

While MTA took the opportunity to look back over 100 years showcasing the latest in machine tool technology, MTC encouraged visitors to look forward and come face to face with the future of manufacturing in the UK. The HVM Catapult is designed to help industry capitalise on the research emerging from UK universities and convert it into game-changing competitive technologies and processes.

Practical application in industry is the end-game for all projects.

The growing number of projects and industrial partners at MTC show that activity on this front is frenetic. In a presentation to around 100 guests, including MTC partners and MTA members, Professor Ken Young, technology director at MTC, detailed how the MTC’s 41 industrial partners (the highest number of any HVM Catapult centre) are now exploring and number of forward thinking project streams including: net shape manufacturing, intelligent automation, high integrity fabrication, metrology, manufacturing simulation and manufacturing informatics. olds and made a real impact.

The display of live machinery – a unique strength of MACH – turned heads. Demonstrations of lasers, robotics and tooling were particularly popular with over 90% of young people rating them as a highlight. Perhaps the most important measure of the zone’s success however, was that 94% of young visitors said that MACH caused them to think of engineering careers in a more positive light.

Looking to the future Over the last 100 years MACH has stayed with UK industry through thick and thin. Now, as MTA looks to take it into its second century, conditions are far from favourable. And yet the trade organisation is hopeful for 2014 and beyond. In a

Prof Young assured his audience, many of whom were inclined towards cynicism about the long term security of support for this, and other, manufacturing research hubs, that MTC has a guarantee of £30m from government over 5 years for its research and development programmes.

He also revealed that the centre is in talks to extent this funding commitment to ten years worth of support.

At the moment MTC sits rather grandly but remotely, in an expanse of business park with very little other development in evidence. But Prof Young shared exciting plans for the future of the site.

Key among these was a plan to build a Manufacturing Technology Academy which will train 200 apprentices a year. Developing an inspiring vision for young people who might think of enrolling at this centre, Prof Young said that international exchange schemes would be a core offering for the academy, reflecting the globalised market place in which engineers and manufacturing professionals must now function.

MTA has said it is keen to work closely with MTC and the other HVM centres to help secure the competitive position of UK manufacturing but the details of exactly how this collaboration will work are yet to be hammered out. A MTA spokesperson did say however, that we are unlikely to see a HVM Catapult pavilion at MACH – largely because the industrial partners who would support such a venture are focused on individual commercial interests at the show rather than the longer term collaborative interests embodied in their Catapult programmes. presentation to press on October 8 Paul O’Donnel, head of external affairs at MTA, explained why.

“MTA is excited about MACH 2014 because of the trends we see in UK engineering output,” he said. Displaying graph which mapped engineering output against UK manufacturing as a whole, Mr O’Donnel highlighted a start difference between

Headline figures from MACH 2012 Exhibitor figures (491) were 10% up on MACH 2010 Visitor numbers (21,2624) were 15% up on MACH 2010 Quality of visitors from an exhibitor perspective was scored at 3.3 out of 4 Over 20 sectors were represented Stand order value was £14.4m (the total value of business expected to arise from MACH 2012 is c £95m)

47

Delighted. Proud. Ready to use our Manufacturing expertise to help you achieve more.

Having won this award for the second time in three years, we’re naturally delighted and proud.

We’re also very grateful to our clients, partners and staff for making it possible. Indeed, what gives us greatest satisfaction is that the award criteria recognised the powerful combination of eBECS’ business acumen, technological expertise and the very positive feedback from our clients.

As specialists in Manufacturing, our aim is always to delight clients by implementing proven Microsoft Dynamics® AX and Microsoft Dynamics® CRM solutions that drive efficiency, profit and growth. This award inspires us to achieve even more on behalf of existing and new eBECS’ clients. Thank you.

If you’d like to achieve more with Microsoft Dynamics AX and Microsoft Dynamics CRM, let’s talk. Call Stephen Wilson on 08455 441 441 or email swilson@ebecs.com

eBECS Limited, Enterprise House, Bridge Business Centre, Beresford Way, Chesterfield, Derbyshire S41 9FG Tel: 08455 441 441 Fax: 08455 441 728 Email: info@ebecs.com www.ebecs.com

Offices in: United Kingdom | North America | Kingdom of Saudi Arabia | Jordan | China

Manufacturing Technologies

the two. Indeed while overall manufacturing output is floundering at around half of its 2008 levels, engineering is well in excess of this.

“The disparity comes largely because overall manufacturing output is dragged down by falls in the manufacture of basic chemicals and petrochemicals and particularly construction products,” explained O’Donnel.

“The UK construction products industry is looking at something like a six per cent fall in 2012.”

On the other hand, key end user sectors for the kind of kit which MACH displays are thriving. Most notably these include automotive, aerospace and machinery.

MTA has expressed an intention to market MACH 2014 earlier and far more overtly than it has done in the past in order to capitalise on and publicise this positive market profile. The trade organisation will also lobby government hard for policy decisions which support capital investment.

“We hope to get a statement on capital allowances in the Autumn Statement,” MTA’s director general Graham Dewhurst shared with . “The demolition of capital allowances

2014 on sale now!

The 101st iteration of MACH will break with convention by offering some exhibition space up for sale now – in advance of the traditional ballot process which would normally begin in February.

The demolition of capital allowances has suffocated investment.

We would look to see these elevated and treated in a similar regard to R&D tax credits Graham Dewhurst

Primarily, the pre-ballot sales will be for space in the ‘pavilion areas’ at the show.

Graham Dewhurst, MTA director general, explained that this decision had been taken following feedback from exhibitors who wanted to guarantee they could return to a particular spot at the show.

“This wasn’t necessarily the big guys right at the front and middle of the show,” he said. “It was often from smaller companies who found they had settled in a really good niche where they got a lot of traffic.” that the Mr Dewhurst also shared with decision had been taken, in part, to give smaller firms more options for buying into MACH in a way that suited their cash flow. has suffocated investment. We would look to see these elevated and treated in a similar regard to R&D tax credits.”

A favourable decision from government on Capital Allowances could prompt record-breaking deals at MACH 2014 according to MTA and propel the exhibition into its next 100 years in a style redolent of the industrial grandeur which Britain in 1912 would have taken for granted.

Manufacturing vs Engineering UK manufacturing and engineering output

49

Air on an

H string ’s Kimberley Barber went to visit Air Products’ HyCO4 plant in Rotterdam to witness the hydrogen manufacturing facility now shipping fuel to eco friendly vehicle fleets across Europe. But does the fuel have a realistic future she asks.

H

olland is a country more traditionally associated with windmills and clogs, but visit Rotterdam and what strikes you first is the amount of modern industry in the area. A vast landscape of oil refineries, wind turbines and factories may not be a major tourist attraction but the city has proved popular with industry because of its location at the heart of Europe and its excellent transport links.

An industry growing alongside the thriving oil refineries is that of hydrogen production. Air Products has been active in Rotterdam since the 1970s, but at the beginning of 2012 it moved its production next to the ExxonMobil refinery. Being nestled alongside this site allows Air Products’ HyCO4 plant to feed off the by-products of oil

50

production. It uses the excess gas from ExxonMobil to produce its hydrogen and in turn, the refinery uses the hydrogen for desulphurisation of oil products and in the manufacture of petrochemicals.

This hydrogen factory produces 300 metric tonnes of hydrogen each day, making it one of the largest production plants in the world. Hydrogen is a renewable, abundant and efficient fuel source and it produces no emissions at the point of use. As the world looks for alternatives to conventional fuels, hydrogen, in many ways, provides an attractive means by which to effect the transition from fossil fuels to renewable energy.

Zero-emission vision A hydrogen transport infrastructure would reduce the carbon emissions associated with climate change and cut down air pollution. A fleet of five London fuel cell buses was launched in 2011 and these buses are powered from hydrogen produced at the HyCO4 plant. This July, the fuelling station at Stratford had performed over 1,000 refuellings, enabling the buses to travel approximately 100,000

miles with the only emission being purified water.

Mayor of London Boris Johnson has stated his intention to make London cleaner and greener. He said: “I want London to become a zero-emission city in order to deliver cleaner air and improve quality of life. It is important that London champions innovative new technologies to get us to that point.”

This involvement from TfL has enabled Air Products to start the building blocks of a hydrogen infrastructure in the UK. A fleet of taxis were in operation over the London 2012 Olympics and Paralympics and a new public refuelling station opened at Heathrow.

However, it is a relationship that needs commitment from both the vehicle manufacturers and the infrastructure providers.

If there are no vehicles to refuel then there is no need to for a filling station and vice versa.

Making it happen To make hydrogen work as a viable alternative to petrol and diesel, Air Products has been working closely with car manufacturers to gain commitments for the first cars that will be available to the general public at an affordable price. As with electric cars, the mass market always seems to be slightly outside the realms of reality.

But Diane Raine, director of hydrogen energy systems at Air Products, says: “When we are talking about renewable energy, the market is always two years away. We have this feeling that combustion is going to happen.

We believe that hydrogen will come to the market in 2014. We have a momentum in place that gives us the confidence to say this will happen.”

So far, Air Products has commitments to develop consumer hydrogen-fuelled cars from Daimler, Toyota and Hyundai, with GM and Honda both also in discussions.

Sustainable Technologies

Daimler looks set to be the first to market with a commitment to launch its hydrogen-fuelled offering in 2014. Toyota is hot on its heels with a date in 2015. asked Ford’s UK chair Joe Greenwell how far along it is with a commercially viable product.

“What we are wrestling with typically with is price. With regards to producing commercially, to scale, it’s going to take some while yet.

Technical solutions are here, we can do hydrogen combustion powered vehicles but at scale, to make them affordable, safe and regulated - well we have some work to do,” he says.

Another question that rises when talking of the imminent arrival of hydrogen-powered vehicles is the present competition from electric vehicles as an alternative low carbon means of transport .

Dr Richard Barrett, assistant head of industrial design at Coventry University, is a specialist on low carbon vehicles. He comments: “It’s not going to be all EV (electric vehicles) or hydrogen. There will be a place for both. My opinion is that EV will account for approximately fifteen per cent of the market. Internal combustion

We believe that hydrogen will come to the market in 2014 Diane Raine, Director of Hydrogen Energy Systems, Air Products

will still be kicking around in ten years. The question is whether they will be the vehicle of choice.”

Electric vehicles are ideally suited to shorter trips as recharging can take time and needs to happen more frequently than with hydrogen.

A hydrogen car takes approximately three minutes to refuel, not much longer than a traditional petrol or diesel car, and can travel for longer than an electric car.

Advances in technology mean that hydrogen can be compressed at a rate of 700 bar, an advance which Air Products has exploited to deploy mobile refuelling stations in the UK and Germany. These SmartFuel fuelling stations enable hydrogen to become part of every community – allowing people to become accustomed to hydrogen and see it as a mundane feature of everyday life as well as helping to quash any fears that hydrogen is a dangerous fuel.

Air Products is a global company with operations in over 40 countries. In the short term it has plans to develop fuelling stations in California, Germany and Japan. Longer term, it has refuelling networks geared up for Japan, Korea and Scandinavia.

So, it seems that Air Products has no doubt about the viability of hydrogen as a mass market fuel of choice and the HyC04 plant in Rotterdam certainly aims to play a central role in helping Europe reduce its emissions and tackle climate change. By providing the means to power ‘clean’ vehicles and planning the creation of vast hydrogen networks, Air Products is leading the way in hydrogen production. If its collaborations with industry and government pay off we may really be just two years away from seeing hydrogen as the low carbon fuel of choice on Britain’s green-brick road to a decarbonised economy.

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The hidden

value of waste

are numerous motivating factors which make WtE attractive. There are also well proven and scalable processes in place to manage numerous industrial waste streams.

Escalating landfill tax Landfill tax is central to helping the UK meet its European carbon targets and although it doesn’t apply directly to manufacturers, any increase is instantly passed on to them through the fees they pay to waste disposal companies. The government’s 2010 Emergency Budget spelled out that the standard rate of landfill tax would increase by £8 per tonne each year from 1 April 2011 until at least 2014.

It also explained that the standard rate would not fall below a floor of £80 per tonne from April 2014 until at least 2020. This means waste reduction is now an essential consideration for manufacturers, unless they want to see their production costs going through the roof.

Are waste-to-energy solutions too good to be true as a means to combat rising fuel and waste disposal costs? Peter Russell, head of manufacturing & industrials at RBS, considers refuse under a new light, analysing the benefits current waste-to-energy solutions are offering companies and how these will mature in coming years.

R

A new way to look at waste

ising fuel and waste disposal costs are eating away at business profit margins as well as reducing land fill charges, so waste-to-energy (WtE) solutions creating heat or electricity by transforming a waste source – are now essential considerations for management.

While many UK manufacturers are concerned about the costs of establishing a WtE scheme for their plants and cite unreliable technology as justification for holding off investment, there

For Jon Miles, director of sustainable energy finance at RBS, WtE technology is the only solution. He explains: “More UK manufacturers need to change their views on waste. Don’t look at it as a problem that needs to be dealt with but more like a cashflow that is currently negative and needs to be made positive.

“Thanks to many technology developments, there is currently a huge opportunity for early WtE

Waste-to-Energy: Transforming a cost into several commodities to achieve a positive cashflow Waste previously landfill Water (used in cooling) Organic mulch

Anaerobic digestion

Transformation, shredding and dehydration

Now - combustible (metal, glass)

Biomass RDF and SDF Pyrolysis

Charcoal

Gasification

Synthetic gas

Motor

Bio oil

Gas turbine

Generator Liability Comodity

52

Combustion

Boiler

Steam turbine

Electricity

Heat

Waste to Energy adopters to gain significant advantages over their competition and slash their waste bills, while at the same time save on their energy expenses.”

Indeed, increasingly efficient technology is boosting the amount of energy or energy sources that can be extracted from waste products, while driving down landfill volume. Some technologies only provide part of the process by producing Solid Derived Fuel (SDF) (EU acceptable standard) that then needs transforming into energy. But even in this case the amount of waste going to landfill is reduced, so landfill tax savings are still realised, and the SDF can be used on site or sold as a commodity to energy plants.

Which technology works?

Probably the biggest opposition to the adoption of WtE solutions is the limited awareness of the actual procedures themselves and the wide range of solutions available.

For management it can be bewildering to work out if pyrolysis, gasification, a biomass boiler system or anaerobic digestion is the right solution. In truth all these systems are efficient and have their benefits, but work best if coupled with the right type of industry and production system. Waste oil from the automotive industry and slurry from the chemical sector is easily transformed into heat and electricity in special boilers while waste heat can be recovered from metal manufacturers and textile waste can be transformed into excellent biomass.

Miles explains there are three main steps before choosing a WtE solution for your company. He says: “You have to identify what type of waste you have – is it organic, clinical, wet, dry, etc. Then you have to work out how much it is costing you to dispose of it before deciding how it could benefit your overall manufacturing procedure and what added-value product do you want out of it – heat, electricity, fertiliser?”

Take the example of Arla Foods, the global dairy producer which identified its main sources of waste in its supply chain as being cow slurry and by-products from its processing and production operations. In Denmark it is planning to process 400,000 tonnes of slurry and 130,000 tonnes of dairy by-products per year from its dairies into biogas using anaerobic digestion. This will produce enough energy to power 8,000 average single family houses. In the UK it is the first dairy to become zero-to-landfill and has saved nearly 2,000 tonnes of waste each year, which represents more than £100,000 in landfill tax. It is also trialling a microbial fuel system which could supply a farm with all its annual energy needs if fed with slurry from 200 cows. Energy can also be sold back to the grid for profit.

Arla’s sustainability strategy is paying dividends in terms of corporate responsibility and in achieving its carbon objective, as well as demonstrating its commitment to innovation. In turn, this attracts high quality employees and customers while enhancing its public profile.

The Future of WtE The media spotlight is on the big energy companies such as Veolia, who build enormous waste-to-energy plants, but these solutions also work well at a smaller scale.

Thanks to technological developments there is no longer the need to have a lot of space to build the treatment plants – there is even a pyrolysis system (the thermochemical decomposition of organic material without the presence of oxygen)on the aircraft carrier HMS Ocean nor the need for identical waste to fuel them.

Karen Wordsworth, director of climate change and sustainability at KPMG, explains: “Thanks to trials in the UK and abroad WtE technology is becoming more refined.

Solutions are increasingly available to SMEs and MSBs.” There are many international examples of small companies receiving additional revenue by handling neighbouring firms’ waste at a cost and successfully feeding their WtE system at the same time. This supply chain is increased by technologies which convert waste into pellets or briquettes that can be more efficiently consumed.

Wordsworth adds: “There are systems being trialled that create material from waste streams such as clinical waste that can be used for a biomass fuel. When finished this will have a dramatic impact on the UK WtE market, traditionally the realm of fast moving consumer goods organisations because of their well-publicised carbon targets, but is now the focus of heavier industry.”

Financing refuse projects will also become easier, because now the technology is proven in the field, it can be secured against a power purchase agreement.

Alternatively there are companies that will install WtE technology at a manufacturer’s site and dispose of its waste for free; profiting from the on-sale of all the created energy.

Article by: Peter Russell Head of Manufacturing & Industrials UK sector coverage, RBS Corporate & Institutional Banking T: (0)20 7672 1007 E: peter.russell@rbs.co.uk Jon Miles Director of Sustainable Energy Finance, RBS Corporate & Institutional Banking T: (0)20 7672 0482 E: jon.miles@rbs.com

Karen Wordsworth Director, Climate Change and Sustainability, KPMG LLP T: (0)20 7311 8213 E: karen.wordsworth @kpmg.co.uk

53

The SmartVend 5000 makes distribution of Hayley Group products even more efficient

Vendor led

supply Hayley Group has 36 years experience providing a fast and efficient supply of what it terms ‘engineering essentials’ to its customers. But, as Tim Brown found out, its latest partnership with Apex Supply Chain Technologies is bringing that heritage into a new, leaner era.

H

ayley Group was formed in 1976 by Lee Willitts and Bernie Noakes. Since then, it has grown to achieve a turnover of £96m and employ 543 staff. The company supplies a large range of engineering focused products including bearings, seals, transmissions, electrical items, tools, fastenings, work wear and protective equipment from eyewear to boots.

Offering same day delivery via its network of 31 national branches and using its own transport, the company carries in excess of £20m worth of stock to ensure it is always able to provide for its customers’ needs. “The national average for stock in a branch would probably be around £30,000£40,000,” says Lee Willitts, managing director at Hayley Group. “Our branches hold in excess of £300,000. We’ve got the stock at the point of use, at the coal face if you will, so we can offer a same day service.”

Expanding beyond this service-focused offering, SmartVend by Hayley Group offers the latest intelligent vending machine solutions with real time, cloud based reporting and control. These solutions help companies reduce stock wastage, time taken up by walking to and waiting at the stores and

54

make the distribution of Hayley Group products even more efficient. Utilising the latest range of intelligent industrial vending machines from Apex Supply Chain Technologies, the full range of Hayley products from nuts and bolts to safety boots and helmets will be available through this innovative new technology.

SmartVend is a connect and go solution. There is no software to install and no computers on the machines to go wrong, it connects to the cloud via firmware in the machines. This means that installation is a matter of a couple of hours, not days.

The two offerings which will initially be available through Hayley Group, SmartVend 5000 and SmartVend Megastore, can be calibrated quickly and easily and can house a huge range of products in many different sizes.

“We believe that the Apex models are far superior to other similar offerings and we believe they have the potential to dramatically change the market’s view of stock vending,” says Hayley Group’s co-founder and managing director, Bernie Noakes. “We want to offer the same level of service that we have currently but guarantee a reduction in the amount customers spend on stock items.“SmartVend machines offer a fantastic opportunity for Hayley Group but also a fantastic opportunity for our customers,” states Mr Noakes. “The use of SmartVend can greatly reduce the quantities [of stock items] used as well as provide complete traceability and is great from a health and safety point of view.”

Supplychain Logistics and Materials Handling

Justifying spending on vending is easy Hayley Group says that so long as a customer is spending a total of at least £2,500 per month, the return on investment in a SmartVend is very good. This, it says, is irrespective of the value of the individual products.

According to Hayley Group, customers can expect a 25% decrease in demand for products when they are vended rather than just held in stock. Some companies reduce consumption by as much as 50%. “From our customers’ point of view, it is all about a reduction in cost,” says Noakes. “Because staff will know that vending clearly identifies what they are using, they will be a lot more careful about overuse.

For example, you might expect staff to use one pair of gloves a day but if they go to the canteen they might lose them and then get another pair. If it is monitored, they will be more likely to take care with their equipment.”

The vending machines are operated by employees who can use their ID card or enter a pin number which registers the request, and provided that user has been allocated the right to those products, their order will be released up to a pre-determined level. This can be limited to any given period by individual and user group. Not only is the customer able to view statistics on the usage of materials in total and by individual staff member but Hayley Group is also able to follow the stock usage in real time and replenish stock as soon as it is needed, eliminating stock outs.

As Willitts points out, a SmartVend is only as good as the suppliers that are keeping it topped up. “We can provide a state-of-the-art machine and as we are supplying the product you will always be able to get product from that machine 24 hours a day, 365 days a year.

“The brilliant thing about these machines is that we don’t have to go to a factory to complete a stock take in

The Hayley Group SmartVend Megastore vending machines can be used for a range of products including health and safety equipment

The use of SmartVend can greatly reduce the quantities [of stock items] used as well as provide complete traceability and is great from a health and safety point of view Bernie Noakes

the factory and then deliver the stock,” continues Noakes.

“When we go into the factory we are taking the items that are needed to put the stock back to its maximum. The machines are also intelligent and will not only tell us when we need to increase the quantities.

They will aslo indicate when a product is not commonly vended so we can reduce the quantity in the machine.”

The other issue you rectify with vending is what Mr Willitts refers to as “squirrel storing” where employees put equipment in their locker for use later. If this occurs on a large scale, demand can unnecessarily increase. Using SmartVend to issue parts and products not only removes the concern amongst the staff that their equipment might run out but also discourages ‘squirreling’ behaviours. In addition, the

vending machines will protect the stock from damage prior to use which is particularly relevant in dirty or heavy engineering environments.

The vending machines can also be used to ensure staff are following correct health and safety protocol and are using the correct safety equipment. “Not only do you have an accurate log of who has had what,” says Noakes, “but possibly more importantly, you can see if someone is failing to correctly protect themselves.”

For more information visit www.hayley-group.co.uk Or contact John Holden – National Accounts Director, Hayley Group P: 0121 550 2233 E: john.holden@hayleygroup.co.uk

55

Moving to the cloud: what, when, how When contemplating a move to the cloud, clear objective assessments are vital, finds Malcolm Wheatley.

The good news: they’re available.

S

lowly but surely, survey evidence is highlighting that a sea change is underway. Manufacturers – traditionally conservative when it comes to embracing new IT technologies – are seeing undoubted benefits in moving IT applications to the cloud.

Not every application, to be sure. And certainly, for the present, most manufacturers will argue that applications should only move to the cloud when it makes strategic, financial, commercial, and technical sense.

E-mail, for instance, is important. But it can also be time-consuming and costly to manage. Outsource it to the cloud-based platform of a trusted services provider and a business can free up time and resources that could be better deployed elsewhere, on more strategic goals.

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And the typical manufacturing company has many such opportunities – often around parts of its IT infrastructure such as e-mail, directory services, network management and backup, says Matt Leighton, head of manufacturing solutions at Star, a specialist provider of cloud computing services for UK businesses.

“Manufacturers are recognising that building, maintaining and operating IT infrastructure is not a core competency,” he notes. “Worse, it can absorb a disproportionate amount of management time, operating budget, and capital expenditure – all of which can more profitably be deployed elsewhere.” The role of IT within businesses is evolving, from the old world of server management to the new model of consuming and integrating services.

Get it right The question, then, is this: how to ensure that such opportunities are genuine opportunities – and how to ensure that transferring them to a chosen service provider actually fulfils that promise.

“The cloud can undoubtedly help manufacturers realise efficiencies, access new capabilities and ultimately provide a winning edge – but only if they take a carefully planned approach that works with their particular organisation today, and in the future,” warns Leighton.

“Get it wrong, and what looks like a step forward can quickly turn into a step backward.”

For instance, he points out, for each application manufacturers need to weigh-up their options in terms of potential service models.

Should they go for Infrastructureas-a-Service (IaaS), Platform-as-aService (PaaS), or Software-as-aService (SaaS)?

IT in

manufacturing

Which delivery model suits them best? Public cloud services, or ‘business’ cloud—or would a permutation of the two be the most appropriate option?

And what about critical issues such as where data resides, security, and portability?

Again, the factors to be weighed-up involve practical, financial, and in some cases legislative considerations.

“Moving to the cloud can deliver enormous benefits, and prove truly transformative in unlocking resources that can be better deployed more strategically,” sums up Leighton. “But the choice of provider is critical – and choosing the right service provider for your business is one of the most important IT decisions you will make.”

Objective assessment So how should a business make that all-important decision? As it happens, says Leighton, Star has a consulting capability that manufacturers can deploy, free of any upfront cost. Essentially, he explains, it involves a toolkit and methodology that Star consultants and a manufacturer can work through together, jointly exploring the areas in which cloudbased services might help the business, and the probable return from making the move.

Dubbed the Cloud Benefits Assessment, and the Cloud Readiness Assessment, the two toolkits pose a series of questions, broadly framed around best-practice standards. To answer them, Star and the manufacturer in question both invest time, energy and people.

Tellingly, he adds, the questions chiefly focus not on issues around cloud-based services as such, but around the manufacturer’s service requirements, strategic objectives, existing IT constraints and broad technology roadmap.

“The idea is to work out how best to deliver value to the business,” he insists. “Where are IT resources currently being expended? What is the ROI to the business of incurring that expenditure in terms of time, people and budget? What service level agreements apply to the IT applications involved? And where do those applications presently reside?”

And the value in applying a standard methodology, he adds, comes from its ability to deliver a clear and unambiguous answer, fullycosted and with an expected ROI, stripped of emotion and judgement.

“The questions are very clear, with very clear assessment guidelines and ranking criteria,” says Leighton. “And by the end of the process, there shouldn’t be any surprises.

The manufacturer is every bit as much involved in the assessment as Star personnel. It’s an investment – by both sides – in seeing if a move to the cloud would add value.”

That said, he points out, objectivity is important.

And Star, he insists, goes to some length to make sure that if the recommendation is that a move

Manufacturers are recognising that building, maintaining and operating IT infrastructure is not a core competency.

Worse, it can absorb a disproportionate amount of management time, operating budget, and capital expenditure Matt Leighton, Head of Manufacturing Solutions, Star

to the cloud would make sense, the firm doesn’t position itself as the default cloud option.

“The criteria that we apply to ourselves are as strict as those we apply to any other potential provider,” says Leighton. “How long has the provider been in business? Who are their customers? Who are their references? Is it possible to talk to them? And meet them? How did the actual ROI differ from the prospective ROI? If you don’t get clear answer to questions like these, then our view is that the provider isn’t one to whom you should hand over the running of parts of your IT infrastructure. The risk isn’t worth it.”

In short, he concludes, the journey to the cloud shouldn’t be taken lightly.

“Plan, and prepare,” he sums up. “And here at Star, we’ll be happy to help you do both – properly.

Make the decision – and if it’s yes, let’s make the move – then our Transition Services team can swing into action to make the move in a smooth, planned, professional manner, locking-in benefits from day one.”

About Star Star is a Cloud provider with vision and a passion for delivering extraordinary results, with the smartest people and the sharpest service.

Since its foundation in 1995, the Star name has been synonymous with innovation. Having pioneered cloudbased Internet security with the formation of MessageLabs, Star has continued to consolidate its status as a leading managed business services company.

Playing to the strengths within its business and the select industry partners it collaborates with; Star has been able to redefine how businesses access IT, how they derive value and how they approach the future. www.star.co.uk 0800 138 4443

57

Pump up the power When SPP Pumps’ business plan called for overseas expansion, SAP from Invenio Business Solutions helped to manage the challenge, discovers Malcolm Wheatley.

F

ounded in 1875, Readingheadquartered SPP Pumps has a proud history of manufacturing centrifugal pumps and their associated systems, for applications as diverse as waste water treatment, fire protection, and oil and gas exploration.

With over 300 staff worldwide, the company’s main R&D, manufacturing and test facilities are located in a purposebuilt factory at Coleford, Gloucestershire, while local sites

operate in the United States, France, South Africa, Singapore and Dubai.

Acquired in 2003 by India’s Kirloskar Brothers Limited (KBL) – an equally venerable pump manufacturer, with a history dating back to 1888 – the consequences of a prior period of under-investment in the business were keenly felt. In particular, says SPP information systems manager Damian Hudson, the business’s 20-year old legacy Infor-based ERP system was a

It’s actually quite rare for us to pitch to a manufacturer and not get the job. We have a deep knowledge of manufacturing, had a team that knew SPP’s requirements, and had extensive experience of the system Partho Bhattacharya, Managing Director, Invenio Business Solutions

58

cause for concern. Expanding overseas, which KBL’s business plan for SPP called for, was simply beyond its capabilities.

“In short, it had become a brake on our global expansion, as well as a source of business risk,” recalls Hudson. “It was time to change, and we began looking at what was on offer.”

Very quickly, he explains, the search led to SAP, the world’s largest ERP provider, and a vendor with an undoubted provenance in supporting complex engineering businesses with global operations – and with aspirations to extend those operations still further.

The only difficulty: locating an implementation partner with the skills and reach to install and support the system, not just in the countries in which SPP presently had operations, but in those that it would go on to develop operations in, as well.

Delivery model Originally, the plan had been to use IT staff from KBL but, given the ambitious timescales, relates Hudson, KBL managers recommended that the business look to an SAP specialist implementation partner to provide a dedicated team.

Better still, they had a suggestion as to where to look: Invenio Business Solutions, an internationally-oriented SAP consulting and implementation specialist which KBL themselves had links with. What’s more, with Invenio coincidentally headquartered nearby in Reading, the omens seemed propitious. At the very least, sums up Hudson, a meeting appeared in order.

It soon became clear why Invenio had been suggested

by KBL. Invenio, it turned out, specialised solely in supporting manufacturers with a global reach. Which, notes Partho Bhattacharya, Invenio’s managing director, involves more than just considerations of multiple currencies, taxation regimes, languages, and other

IT in

manufacturing

similar cross-border issues.

Obtaining effective systems support, he explains, can be a real challenge for mid-sized manufacturers with a growing international footprint.

“We’ve seen many UK midsized manufacturers aspire to selling into foreign markets as a way to increase revenues and protect themselves against the fallout from the recent economic downturn, only to discover a requirement for systems support across extended time zones, something which has traditionally only been available for large corporates whose budget can command an extended support service from a global service partner,” says Bhattacharya. “Unfortunately many SMEs seeking this kind of extended support have found that the vast majority of UKbased implementation partners still restrict their customer support offerings to traditional UK office hours.”

And discussions between SPP and Invenio quickly proved to be very much a meeting of minds, he adds.

“We hit it off very well, which wasn’t a surprise,” he recalls.

“It’s actually quite rare for us to pitch to a manufacturer and not get the job. We have a deep knowledge of manufacturing, had a team that knew SPP’s requirements, and had extensive experience of the system.”

Hudson concurs. “At a corporate ‘parent company’ level, there were long-standing relationships that smoothed the way,” he relates. “But equally, we got on very well with them on a personal basis, and their SAP and manufacturing skills were clearly very evident.”

That said, adds Bhattacharya, Invenio’s firm stance on pricing doubtless worked in the company’s favour, as well – particularly so given the recessionary state of the world economy at the time.

“We aim to have a very, very transparent pricing model,” says Bhattacharya. “Effectively, we’ve

The Invenio people were incredibly helpful, with a strong ‘can do’ ethos. There was no debate about whose job it was to undertake particular tasks.

We all pitched in, and the project was completed on-time, and on-budget Damian Hudson, Information Systems Manager, SPP Pumps

simply got a standard global price list. Every customer gets the same price, which means that we charge the smallest customer just as much – or as little – as the largest.”

Teamwork Work on the project began in December 2008, and followed SAP’s standard methodology. The plan: a 9-month implementation period, followed by ‘go live’. That said, emphasises Hudson, a key concern was not overcomplicating matters by adding un-needed functionality: when all was said and done, SPP was a 300-employee business seeking a system that would help it grow internationally, not act as a complex straitjacket.

“The Invenio people were incredibly helpful, with a strong ‘can do’ ethos,” he recalls.

“There was no debate about whose job it was to undertake particular tasks. We all pitched in, and the project was completed on-time, and on-budget.”

So what has it delivered?

Clearly, the business risk associated with the previous system has been eliminated, says Hudson. Equally, he adds, there’s the peace of mind that comes from knowing that future legislative or business model changes can be readily accommodated. Best of all, SPP is now a truly global business, with Invenio-supported SAP operating in all major locations.

Business benefits And from a broader perspective, the move to SAP has triggered other benefits. Financial processes, for instance, have been transformed.

“Availability of up to date financial information combined with extensive reporting and drill down capability means a fast, comprehensive view of what’s happening across our entire operation,” he notes.

“Our payment processes are fully automated – helping to improve supplier relationships and reduce costs on a variety of office consumables.”

And for a business with global aspirations – and an overseas presence that is far from insignificant – switching to SAP has delivered an affordable growth path, he notes.

In short, he sums up, the impact of SAP, aided by Invenio, has been truly transformational.

For despite initial doubts about the perceived complexity of using a ‘major league’ SAP platform to support a mid market manufacturing operation, a firm focus on practicality has delivered a system that genuinely adds value.

“SAP offers almost unlimited flexibility in terms of development scope, but we maintained a clear focus on configuring a system that was right for us as a business,” sums up Hudson. “It does what we want, and provides us with future flexibility, going forward.

What more can you ask?”

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ITnews...

IT eye Innovation from materials Mike Evans, research director at Cambashi gives his monthly insight into developments in manufacturing IT.

Forty five years ago, the materials lecturer on my engineering course taught me that the easiest way to innovate is to make an existing product better by using new materials for some of the components. This remains true today.

A key aspect of simulating product behaviour is an accurate representation of the materials. The properties of many of the most interesting materials like composites are highly non-linear and can be difficult to model. As well as being able to predict and optimise the behaviour of materials and minimize their weight while increasing their performance, there are many issues about manufacturing and fastening the component. Sometimes a design engineer must take into account the interaction between materials fastened together.

MSC Software, best known for its NASTRAN heritage, is probably the longest established design tools company and is about to celebrate its 50th birthday. Today, MSC Software is much more than NASTRAN with a wide portfolio of products that let companies analyse and simulate designs before building a prototype. In late September, MSC Software acquired e-Xstream, a small Belgian software and engineering services company that specialises in modelling complex materials.

With this acquisition, MSC Software will be able to combine its products, especially MARC, with e-Xstream’s expertise in numerical simulation of a large variety of materials such as reinforced plastics, rubber, hard metals and honeycomb sandwich panels used across the automotive, aerospace, consumer and industrial equipments industries.

There are a number of small companies that specialise in material science and properties. Granta Design, a spin-off from Cambridge University, is a fast growing materials information specialist. It offers software tools, materials data, and materials database solutions that help engineers make decisions about the most appropriate material to use. It takes into account environmental objectives and regulations as well as providing information for analysis and simulation.

The big software tools companies are snapping up some of these specialists. Last November, Siemens PLM acquired Vistagy, a Boston-based supplier of software and services with emphasis on designing and manufacturing structures made of advanced composite materials. About the same time, Dassault Systèmes acquired Simulayt, a Surrey based provider of composites design and manufacturability simulation technology.

These specialist suppliers already interface to all the main software tool providers. However, properly integrated solutions will increase a design engineer’s productivity. @Cambashi

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LEGACY SUPPORT

$99 ‘Virtual Machine’ launched to support legacy DOS-based dBASE applications.

Almost twenty years after Microsoft released its last standalone version of MS-DOS, legacy DOS-based programs are alive and well in countless businesses around the world. One such: dBase, a venerable database program that is almost as old as DOS itself.

But maintaining dBase and similar DOSbased tools in the modern era is increasingly difficult, as successive versions of Windows make DOS harder to use. For many users, Windows 7 64-bit marked the end of the road, forcing users to remain on 32-bit platforms, or continue to rely on old hardware.

No longer. dBase is now available in a ‘Virtual Machine’ environment specifically configured to allow versions of dBase for DOS to run without any changes to dBase executables or the dBase compiled programs.

Running under both 32-bit and 64-bit versions Microsoft Windows XP, Vista, Windows 7, Windows Server 2003 and Windows Server 2008, dbDOS costs just $99, and supports dBASE III, dBASE IV, dBASE V programs and database applications.

ITNIBS Oracle has announced new commercial extensions for its MySQL Enterprise Edition, delivering enhanced security and high availability options to customers. The new MySQL Enterprise Audit provides an ‘out of the box’, auditing and compliance solution helping customers conform to industry best practices and satisfy regulatory requirements. In addition, the MySQL Enterprise Edition now includes two new high availability options: Distributed Replicated Block Device for Oracle Linux and Oracle Solaris Cluster integration.

IT in

manufacturing

BIG DATA

IBM study finds steep rise in UK companies recognising the value of Big Data.

A report from IBM and the Saïd School of Business at the University of Oxford has found that almost two thirds (63%) of UK businesses now recognise the competitive advantage associated with Big Data – significantly up from 2010, when just over a third (34%) saw value in it.

When asked for the reasons behind Big Data use, 38% of companies cited consumer-centric outcomes as a reason, while other drivers included optimising internal operations (25%), developing new business models (18%), and managing finances and risk levels (16%).

Entitled Analytics: The real world use of Big Data, the report is based on a global survey of 1,144 business and IT professionals from more than 130 countries and 26 industries.

It provides a global snapshot of how organisations today view Big Data, how they are building essential capabilities to tackle Big Data, and to what extent they are currently engaged in using it to benefit their business.

A survey has revealed that nearly half UK IT professionals have experienced data breaches. The research was carried out by the Ponemon Institute in conjunction with Informatica. It surveyed senior IT and IT security practitioners found that 48% have had sensitive personal data, contained in their company’s databases and applications, compromised or stolen by a malicious insider. Organisations are still struggling to get a grip on their data, it seems, with 59% of respondents saying that they wouldn’t be able to detect loss or theft of sensitive data, while 71% found it difficult to restrict user access. A majority (65%) also agreed that they found it difficult to comply with privacy and data protection regulations in production and development environments.

Wrigley has selected Cimlogic to implement an OEE system at it Plymouth plant.

West Yorkshirebased MES systems integrator Cimlogic will implement TrakSYS real time operations and performance management software to measure and improve the efficiency of Wrigley’s production lines as part of the company’s commitment to continual improvement and lean manufacturing.

Epicor Software Corporation announced that it has completed its previously announced acquisition of Solarsoft Business Systems. The acquisition of Solarsoft is intended to extend Epicor’s position as a leading provider of complete end to end enterprise business solutions for discrete manufacturing in key vertical industries.

Pervez Qureshi, CEO and president of Epicor said the acquisition strengthens Epicor’s leadership in manufacturing and distribution segments worldwide. “The addition of Solarsoft extends our software offerings to a broader range of customers and industries – from automotive parts to packaging to life sciences, and from food and beverage to electrical components to lumber and building materials,” he said.

Have your say at www.themanufacturer.com

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S U P P L E M E N T

ERP: Fit for purpose in 2013?

ERP is still the only game in town, writes The Manufacturer’s IT Editor Malcolm Wheatley.

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RP doesn’t always get a good press. A recent survey from YouGov, for instance, commissioned by Intact Software, showed that many users are experiencing problems with their systems and that many such users want to replace them, citing maintenance costs, inflexibility, and underperformance as some of the main issues.

As we approach 2013, it’s a finding that cuts right to the heart of the whole debate around ERP, and its place within manufacturing businesses. How so? Consider the dichotomy that it reveals.

First, manufacturers can be unhappy with ERP. It’s expensive, inflexible, and underperforms on its promise – a finding which won’t be news to quite a few manufacturers. The way forward? Replacing the failing system – with yet another ERP system.

In short, the problem isn’t the ERP model itself.

Indeed, as we enter 2013, it’s difficult to think of any other way to run a modern manufacturing enterprise. Go back to separate best-of-breed systems, with standalone finance, MRP1, finite scheduling and purchasing systems?

Certainly, those of us who remember those days – sometimes with affection, more usually not – would find it difficult to believe that such a move was a step in the right direction, especially for a manufacturer of any appreciable size. No, like it or not, we are stuck with ERP: the best, and only, game in town.

But not any ERP system. If there’s one lesson to come from the twenty years that ERP has been extant, it’s that ERP is not a one-size-fits-all solution. Especially for manufacturers.

For the reality is that different industries have different core requirements; different business

A substantial body of expertise has built up around putting ERP right, rather than ripping it out and starting again

models have different core requirements; and different geographies have different core requirements.

Built-to-order, for instance, isn’t the same as build-for-stock. MRP1’s easy assumption of infinite capacity and backwards scheduling won’t work for capital intensive engineering environments. And a project-centric engineering manufacturer with an aftersales service division has very different needs from a consumer goods manufacturer whose concerns revolve around forecasting and the Sales & Operations Planning process.

Make the wrong ERP choice and you’ll doubtless join the companies referred to above – unhappy with their ERP system, and looking to replace it with one that more closely meets their needs.

The good news? The choice of ERP systems that do fit has never been better. A rich seam of vendors, large and small, offer systems that are more flexible and requirement-specific than ever before.

What’s more, a substantial body of expertise has built up around putting ERP right, rather than ripping it out and starting again. For the fault, in short, doesn’t always lie with the system, but with the people operating it – who lack insight into ERP’s logic, understating of the underpinning processes, and training into how best to extract value from the ERP investment.

ERP, in summary, is not the panacea that was widely predicted many years ago. But, correctly specified, selected and implemented it can do a better job than is often predicted.

Read on to find out more.

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E R P S U P P L E M E N T

5 Signs

that your ERP system is failing Malcolm Wheatley uncovers five tell-tale signs that an ERP system that is fatally underperforming.

But will rip-put-and-replace be necessary if you find you have all the symptoms?

E

stablished in 1968, Leicestershire-based Linecross manufactures engineered polymer components for the automotive, construction, and agricultural equipment industries.

Acquired by new owners, the company’s incoming finance director David Austin quickly discovered that the business relied on a bespoke DOS based manufacturing system that had been set up by a former employee back in 1992.

Worse, the system was entirely separate from the company’s Sage accounts system, with the resulting lack of integration being a significant source of inefficiency and frustration.

“We recognised that the system represented a considerable business risk in terms of no longer having any support,” says Austin. “We also recognised that it was increasingly isolated, unable to communicate with the outside world, and unable to work the way that our customers wanted to do business. It had become a constraint to growth, and so we began a search for a replacement.”

The solution? EFACS E/8, a modern and fully-integrated ERP system from Exel Computer Systems – a choice that Austin credits with helping the business achieve a significant boost in productivity and growth.

“We simply wouldn’t have been able to grow without it,” he sums up. “It’s a long term investment, and we have every confidence in its scalability and ability to continue to grow as our business grows.”

DOS-based systems are increasingly rare, of course. But antiquated systems in general, acting as a brake on growth and posing a significant business risk, most definitely aren’t. So how does a manufacturer recognise the signs that its ERP system is failing to deliver?

Talk to experts, and five critical signs of a failing ERP system are mentioned again and again. Is your ERP a danger to the business, and a brake on growth and efficiency? Take the test below.

Excessive customisation

When people highlight the ERP system as a risk to the business, rather than as a way of solving problems, then that’s when alarm bells should start ringing Jonathan Orme, sales operations and marketing manager, Exel Computer Systems

“A lot of customisation, and a heavy reliance on workarounds such as spreadsheets, are classic signs that an ERP system isn’t up to the job,” says Andrew Spence, supply chain business development director at Oracle. “The result: it’s failing to perform, and ‘workarounds’ are adding cost, complexity and risk.”

That said, customisation can also be a sign of poor implementation or inadequate training, warn experts. In such situations, costly replacement isn’t necessarily the answer – and in any case, might result in the same reliance on manual systems.

A typical example, says Mark Edwards, project manager at Microsoft Dynamics implementation and support partner eBECS, is the use of manual workarounds for something that any ERP system ought to be able to perform, such as discount functionality.

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Cloud ERP Join the Technology Revolution

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wanes, simply because the people associated with the original implementation have moved on,” notes eBECS’ Mark Edwards. “Alternatively, implementation might not have actually been finished: the core financial and sales functionality was implemented, but manufacturing and supply chain functionality only partly finished.”

Data quality issues

Lack of control “Another obvious sign of ERP failure is things going wrong,” says Richard Gane, director at procurement improvement and supply platform specialists Vendigital. “Inventory levels are increasing, and rising levels of shortages and stockouts show that you’re losing control of the order-to-build process.”

Benchmarking with other companies can provide another sign of lack of control, adds Dan Roberts, senior consultant at Cambashi.

“If key business benchmark metrics – whether that be around manufacturing, supply chain, sales effectiveness, or just profitability – are significantly worse than average, then that should flash warning signs,” he notes. “Another danger sign: the month-end, quarter-end, or year-end process is taking longer and longer to complete.”

Lack of belief and buy-in “When people highlight the ERP system as a risk to the business, rather than as a way of solving problems, then that’s when alarm bells should start ringing,” says Jonathan Orme, sales operations and marketing manager at Exel Computer Systems. “By any definition, that’s a system that is failing the business, and the time has come to look at why, and what can be done.”

Again, rip-out-and-replace isn’t necessarily the answer: reimplementation or training might be the way forward, instead.

“Sometimes, understanding and belief in the system

The slide into failure is often insidious, rather than catastrophic: it usually takes an external change such as an acquisition or significant change in the business to make it apparent Gordon Fleming, chief marketing officer, QAD

“Poor data quality is nearly always a warning sign of ERP failure,” says Sally Waterston, a director of manufacturing specialists Waterstons business and IT consultancy.

“Duplicated records and inaccurate records aren’t just data issues, but are mirrored by actual stockouts and duplicated inventory on the factory floor. Couple that to spreadsheets and other systems that are supposed to deliver the ‘true’ picture, and you’ve got an ERP system that no one believes.”

Indeed, she adds, the closer you move to manufacturing functionality, rather than sales or finance functionality, the more likely it is that data quality will be a problem. Worse, the more likely it is that poor data quality in a manufacturing context will have a real physical cost.

“From inaccurate bills of material to duplicate supplier records, low-quality data means lowquality decisions – with parts not being ordered on time, excess inventory created, and potential price discounts left on the table.”

S U P P L E M E N T

“Sometimes, you see people working out discounts manually, with a calculator or a spreadsheet, while elsewhere in the same group or business, other people with the same system and same business needs are employing the same functionality very successfully. In other words, it’s not the system that’s at fault, but the way that it is being used.”

Lack of fit “A real warning sign is that the ERP system no longer fits the business – either functionally or technically,” says Paul Massey, managing director for western Europe at ERP vendor IFS. “The system may have been a good fit when originally bought, but either the business itself has changed, or the system has failed to keep up with evolving technologies and business practices.”

Typically, say experts, such problems arise either when a manufacturing business moves into new business areas - such as distribution, or aftersales service, or build-to-order instead of build-to-stock – or expands internationally, straining the capabilities of a UK-only or Europe-only system.

“The slide into failure is often insidious, rather than catastrophic: it usually takes an external change such as an acquisition or significant change in the business to make it apparent,” adds Gordon Fleming, chief marketing officer at ERP vendor QAD. “ERP is a little like a carpet: it’s not until you say, ‘Let’s move the wall’, or change the furniture around, that you see that it doesn’t fit any more.”

In short, five signs of a failing ERP system.

Upgrade, re-implement or switch vendors? None of these decisions are to be taken lightly. But armed with the knowledge that failure has occurred, the business can at least recognise that a decision needs to be taken.

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ERP as an agent of rapid change? Look no further than the nearest Formula 1™ racing circuit, writes Malcolm Wheatley

F

or sheer adrenaline-fuelled excitement, it’s difficult to beat Formula 1™ (F1) motor racing – reputedly the most widely-watched sport in the world, with two billion people turning on their TVs to watch the twenty or so Grand Prix races run each year.

Naturally, a lot of the celebrity focus is on the skills and professionalism of the F1 drivers. But just as impressive are the F1 cars themselves, and the engineering teams and manufacturing facilities that design and build them. Which is why, of course, there’s a separate constructors’ championship, as well as a drivers’ championship.

Ranked fourth in the constructors’ championship as these words are written, the Lotus F1 team has an advantage not shared by any of the other eleven F1 teams: Microsoft Dynamics AX. “Lotus have seen a clear link between their performance on the track, and their end-to-end management and manufacturing performance,” explains Louise Watkins, head of marketing for Microsoft Dynamics. “From conceptualisation through to design, manufacture, delivery and finetuning, they know that peak performance is critical.

And you need a system to manage and deliver that.”

Each car, she reveals, takes 250,000 man-hours to design, requires 10,000 parts to be wind-tunnel tested, and involves the creation of 11,000 technical drawings. And while it might seem odd to use ERP in the context of F1 racing, acknowledges Tim Pike, ERP sales manager for manufacturing and distribution at Microsoft Dynamics, the reality is very much otherwise.

Agile change “The perception of ERP is all about distilling best practice, and then using the ERP system to roll out that best practice across the organisation,” he notes. “But the right ERP system, deployed in the right way, can also deliver responsiveness, agility and flexibility – which are precisely the capabilities required in F1 racing.”

And for proof, he explains, look no further than the Lotus F1 team, where a culture of improving performance through incremental change is fully matched by the ability of Microsoft Dynamics AX to mirror, manage and lock-in that change.

“Over a typical race weekend, the number of engineering changes that might be required is enormous - many, many more than the typical manufacturer might see in months or even a year,” notes Pike. “And the role of Microsoft Dynamics AX is to put a structure around that level of change, imposing order on it, and communicating it throughout the organisation.”

For exactly as in a manufacturing organisation, he explains, there are bills of materials and routings to be updated, and inventory records and purchasing records to be kept up to date.

And despite the wealth associated with F1, budgets and efficiency are very much the order of the day.

“The use of systems within F1 isn’t new,” he says. “What is new is deploying a system that is focused on best practice, agility and change – at the same time as delivering repeatability, efficiency and cost-effectiveness. And with Microsoft Dynamics AX, that’s precisely what Lotus have in place.”

Graeme Hackland – CIO of the Lotus F1 team – agrees, explaining that the team evaluated 13 ERP solutions before selecting Microsoft Dynamics.

“We want to be in a position to win,” he says.

“We’re investing in people and technology, and we need to improve our processes. I really think Microsoft Dynamics AX is going to help the team in this challenge.”

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Race to win

www.microsoft.com/uk/dynamics

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Connecting you now

ERP Connect has become a regular in ’s calendar of events, but each iteration, while often addressing similar themes, throws up new perspectives and experiences in the best practice implementation and use of this critical technology for manufacturing firms.

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eedback from the most recent ERP Connect event showed that both the intensive one-to-one meeting programme with a large range of ERP vendors and the conference programme of ERP implementation case studies were well received by delegates.

One of the most highly commended presentations was that made by Jude Nash, ERP & IT systems manager at SME composite and polymer products

manufacturer Anglo Krempel. Her tips on how to project manage ROI and technology optimisation post implementation, with limited resources, struck a chord with many delegates.

Steps in Ms Nash’s strategy included establishing strict management of consultant time on site and forming a structured process for the review of system menus and the extent to which different functions on these are being used by the business.

ServerERP#1

Milestone measurement events for ROI were scheduled against the first stocktake and year end following go-live. The first anniversary of go-live also marked a major review of roll out phase 1.

ERP and workforce management In communicating the future of ERP at Anglo Krempel Ms Nash shared that a key ambition in phase 3 of the roll out will be the development of time & attendance and workforce management functionality.

Conversations with other delegates, for instance representatives from tube bender Unison and electronics manufacturing group Ultra Electronics,

ServerERP#2

OpenERP

ERP Ondemand

Sales Order Control (out of 10)

8

8

8

8

Production Control / Scheduling (out of 10)

5

9

4

8

Financial Control (out of 10)

8

8

6

8

Business Management Information (out of 10)

10

8

5

10

CRM (out of 10)

8

5

4

6

Implementation Risk (10 low - 1 high)

6

9

3

9

Engineering Change Control

3

8

0

8

Cost over 3 years (assuming constant 10 users)

4

5

10

7

Score

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60

40

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Table justifying m2fx’S decision to invest in cloud-based ERP

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Richard Collman, managing director, Acoustical Control Engineers: “A very worthwhile event.

The meetings are hard on the vendors but they do a good job of putting across what you need to know in each one-toone session. Listening to the conference presentations it’s striking just how widely varying the requirements of different businesses are.”

Steve Roper, IT manager, Unison: “Sixteen pages of notes is testament to the volume and quality of guidance generously offered by all of the speakers at ERP Connect 2012. Steve Whittle’s clarity of thought and single minded determination to invoke change through meaningful business intelligence really does define where we need to be; the opportunity to share in Steve’s experience and insight on a one-2-one basis was an unexpected bonus.

“Having all of the main players in ERP in a single room was a real enabler for me at this early stage of our journey; each and every one of them provided insight that has deepened my understanding of the challenges and possibilities that lie ahead.”

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Attendee comments on the event:

showed that this has become a key requirement for manufacturers. Even Steve Whittle, head of financial systems at Rolls Royce specified workforce management as being the essential item on his ERP ‘wish list’ when asked during a panel discussion session what one thing he would like to see added to his system.

“It’s really workforce planning and optimisation that we are looking for now,” he said. “We want to look at skills matrices.” Whittle explained further that this should give Rolls Royce the ability to understand better when and where they can gain efficiencies in one person working across two or more machines and the ability to match skills capacity with new product introduction into manufacturing. that he One vendor at the event told acknowledged workforce panning as having been underdeveloped in most systems in the past. “It is interesting that this function, which is core to the fundamental proposition of ERP, has not gained great attention until now,” he said.

Compelling vision for cloud Any ERP conference today must acknowledge the rise of cloud computing and the business benefits it can bring to organisations in need of a flexible IT infrastructure and a malleable cost base.

At ERP Connect this recognition was delivered through a compelling case study from m2fx, a small manufacturer of optical fibres.

M2fx, is a fast growing organisation, but one which just a few years ago would have considered ERP technology to be beyond its reach – too expensive and unwieldy for a company with limited resources.

But thanks to an explosion affordable and scaleable ERP solutions based in the cloud this is no longer the case. M2fx CEO Tom Carpenter shared with delegates how his company, with just 24 staff, manufacturing on a make to order basis for international customers, was able to find an on-demand solution which has brought maturity in stock control, equipment utilisation, clarity on margins and much more.

Mr Carpenter showed delegates his simple soreout-of-ten matrix which helped him indentify close up on-demand, cloud solution as the perfect fit (see table). He told his audience that the first year of implementation came at a cost of just £40,000 and ongoing costs are about £25,000 a year. Since go-live in March 2011 the system has experienced 270 minutes of downtime and Carpenter is more than satisfied with this level of reliability. Without having to invest in server expertise or storage space in-house m2fx has achieved 95% on time delivery and more than doubled its business.

While Cloud ERP may not be suitable for every business, Carpenter’s presentation certainly showed that, for small companies with big ambitions, it is worth serious consideration. Continues

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Other case study presentations at this ERP Connect event came from: Advanced Innovative Engineering · Altro Ltd · British Sugar · Hayward Tyler · m2fx · Megger · Portsmouth Aviation

Cabbages and kings Before ERP Connect officially began on October 9, debate around the role of IT in manufacturing and the interaction between manufacturers and their IT vendors was already well underway among some of those due to attend.

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n the evening of October 8 hosted a dinner for IT professionals in manufacturing firms to discuss the challenges they face in matching IT infrastructure with increasingly demanding business requirements. These requirements were linked to the ever growing need for efficiency, product complexity, customer expectation, supply chain visibility and more.

The conversation became broad ranging, referencing ‘big picture’ issues such as the viability or desirability of homeshoring supply for operational, marketing or political reasons, down to more specific conversations around the most used functions within IT applications and how to ensure you push to optimise technology.

This domino effect across interest areas was kickstarted by a question from Tony Christian, managing director for IT analyst firm Cambashi, who asked guests how they felt about the potential of IT to bring competitive edge or differentiation in an age when it has become a commodity.

Steve Whittle, head of finance systems at Rolls Royce, was the first to respond. Mr Whittle used the analogy of electricity – a game changing technology for the first to adopt it, but now a mundane factor in daily life which is only notable when it is absent.

“But what has electricity enabled?” asked Whittle.

“It is now manifest in evolving technology. In TVs

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2 0 1 2

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and then 3D TVs. It is not about the building blocks but about what you build with them.”

This observation sparked discussion around the level to which ERP systems should allow flexibility for innovation and individuality in a business and the extent to which they must standardise processes and set business rules.

Steve Roper, IT manager at tube bending specialist, Unison said that the key was to ensure IT “never becomes the reason that a job cannot be done”. Whittle cautioned that in seeking flexibility organisations should not forget the need for control – particularly when it comes to decision making which might affect quality and safety.

Setting the parameters and business rules within an ERP system successfully often relies on close work with the vendor or an implementation partner. But in order to get the most out of these partnerships some dinner guests with mature implementations had advice for those starting out.

Whittle urged IT leaders to build trial systems in Excel, or other existing applications, which can help to define requirements and avoid unnecessary consultancy cost. The following morning at ERP Connect Whittle gave a live demo of the Rolls Royce Excel system which had helped it do exactly that.

Other comment on this topic came from Grant Tanner, business development director at on-demand IT specialist Star. Mr Tanner related his experiences of seeing implementation consultants ‘go native’ in a company to the extent that they started to define its business process. While this might seem ideal to some software providers he questioned its value to the company.

Jude Nash, ERP and IT manager at Anglo Krempel agreed that she had seen “incestuous” ERP implementations result in overcustomised systems. She shared that seeing this had guided her in keeping Anglo Krempel’s solution as close to ‘out of the box’ as possible. She clarified that an in-house programme of continuous training and investigation of areas of untapped potential within purchased modules were critical to achieving technology optimisation without incurring additional cost.

It is impossible in a short space to capture the full gamut of topics raised over the course of the evening, but another key point centered on the difficulty of controlling IT infrastructure when departmental solutions can be sourced online by impatient functional heads in cloud and SaaS applications.

And the conversation is still evolving for some guests. In hot pursuit of best practice and knowledge sharing Steve Whittle and Geoff Hurst, CIO at Triumph Motorcycles are now negotiating visits to one another’s sites to learn more about the roll out and exploitation of ERP in different business environments. would like to thank cloud computing specialist Star for hosting this CIO Club dinner.

E N ER G Y SUPPLEME N T

Switch on to: On-site power generation Are companies investing in on-site power generation?

Yes, but it is not a gold-rush. This supplement explains some of the pros, cons and patterns of on-site power in the industrial sector.

Fast facts: On-site power gen Changing feed-in-tariffs to a lower rate from the introduction rate of 43p/kWh has had a profound effect on installed on-site power generation. The rate of photovoltaic (PV) installations has cooled rapidly from the 2010 highs, although high energy prices and a court judgement against DECC to keep the tariff for installations made until March 2011, are still driving a market for PV and other on-site power.

Combined Heat and Power (CHP) – can achieve return on investment within three to five years, with annual energy bill savings of between 20%-30%.

The take-up of CHP facilities in the UK is steady: the number of sites, in the industrial sector, using CHP rose from 1,577 in 2010 to 1,880 in 2011; electrical capacity increased from about 6,053 MWe in 2010 to 6,111 MWe in 2011.

On-site wind power – after a slow period from 2009-2010 and despite changes to feed-in-tariffs giving consumers a lower rate, on-site wind power is gaining in popularity. Wind Power Direct has 11 projects at the planning stage and Ecotricity is building or about to have approved three sites.

Coca-Cola Enterprises (UK) has invested heavily in photovoltaic arrays (solar panels) and a wind turbine on its sites in 2012.

Hydro power has moved a little, with minhydro power plants on the rise in Cumbria and Scotland. The overall impact on renewable energy installed capacity is low.

Biomass is one of the biggest movers – one power plant in Tilbury added 750MW to the national gird in 2011. But reducing the ‘RHI large biomass tariff’ has deterred further big investment in large scale biomass.

73

On - s i t e e n e r gy g e n e r a t i o n

On-site power demand grows after hissy FiT But when companies, especially European

A recent report by business consortium the Aldersgate Group found that the price of energy paid by UK business has increased by a staggering 58% since January 2010. But with FiT fiddling and recessionary pressure, how popular is onsite power generation with manufacturers, asks Will Stirling.

speculators, started piling into energy generation

F

appetite for investment. “FiTs created an upsurge

projects to claim tariffs that were offered at 43p/ kWh, the government cut the rate heavily – the top rate by 55% (tariffs are on a sliding scale).

Solar panel installers and green lobbying groups protested heavily. A group including Friends of the Earth enforced a judicial review of the cut, the DECC had to climb down, allowing anyone – company or individual – who installed their systems before March 3, 2012 to receive the higher FiT of 43.3 p/kWh. But the way FiTs were handled took its toll on the

eed-in tariffs (FiTs) made investing in on-site

in project enquiries, but then there was a pause.

energy generation much more appealing

Manipulating the FiT created uncertainty,” says John

when they were first introduced in the UK in

Cusack, commercial director of Wind Energy Direct,

March 2011.

a company that installs and operates wind turbines

According to the Department of Energy and

Climate Change, in England and Wales in 2010

on-site.

But today wind is coming back, Mr Cusack says.

786MW of electricity was being produced by wind

“We are expecting to get planning permission for

power installed as ‘plant’ on-site. That rose to

seven turbines for four pharmaceutical companies

1.08GW By 2011, an increase of 37%.

in Ireland and we have 11 projects in planning in mainland UK.” Ecotricity also felt a cooling off in the recession years. While planning and building continued, it saw enquiries fall from 2009 to 2011 and the Stroudbased on-site power company did not complete a build project in 2010. “Now we are seeing quite the opposite,” says Nick Osbourne for Ecotricity. “As gas and electricity prices continue to rise, a company’s energy bill has become more of an urgent focus, so more and more companies are looking to on-site generation to cut costs.” He says cutting energy bills for companies with an environmental conscience makes it a much more compelling proposition.

The company is building two more turbines for Michelin in Ballymena, Northern Ireland and has just won planning permission for a turbine for aircrete manufacturer H&H UK in Pollington. Osbourne adds that the UK’s green economy grew between 4%-5% last year.

On-site wind is back: Ecotricity has one project in build and two in planning following a lean 2010. Energy prices are driving enquiries

For other types of energy generation, evidence that on-site power generation for manufacturers is growing is anecdotal more than empirical.

74

To what extent is your organisation investing in the following energy management initiatives in 2012?

Photovoltaic (PV) energy from solar panels was by

are going ahead under the current tariff with more

far the biggest energy segment to benefit from FiTs.

than 50% being cancelled following the cut.

In 12-months from August 2011 to August 2012, the

Total capacity of own generating plant (companies

cumulative installed capacity confirmed on the FiT

and consumers) for hydro-electric power in the UK

scheme rose from 170MW to a whopping 1.28GW.

has been the slowcoach on the grid, rising from

Some recent commercial installations have proved

126MW in 2007 to 134MW in 2010. But 2011 saw a

successful – despite the dreadful summer weather.

rally, as total capacity jumped 16% to 154MW. A mini-

The UK’s largest roof-top solar installation,

renaissance of small hydro power plants in Cumbria

at Promens Packaging’s plant in Suffolk, has

and Scotland, installed by companies like Ellergreen

generated over 1 GWh of electricity in the year

Hydro and Gilkes, has made the difference.

since it was installed in July 2011 by Lightsource

While the total capacity of own generating plant

Renewable Energy (p80). It supports over 7,000

for combined cycle gas turbine stations fell from 2010

solar panels. But evidence of large scale use of PV for

to 2011, from 1.966GW to 1.908GW, the popularity

manufacturing companies is scant.

of combined heat and power boilers has risen (p76).

Commercial bio-energy is still dominated by farms

DECC’s latest DUKES report on the energy mix says

and food companies due to the available feedstock

that the number of sites with CHP installed rose from

of biological waste. WRAP, the Waste and Resources

1,577 in 2010 to 1,880 in 2011.

Action Programme, says there were 214 anaerobic

While changes to FiTs have suppressed the

digestion facilities in the UK in February 2012, with a

upsurge of on-site power to a point, a newer scheme

total installed generating capacity of 170MW.

is showing promise for helping companies become

Biomass as a viable energy source got a lift in 2011 when the Tilbury power station was converted from

more energy-efficient.

The Renewable Heat Incentive (RHI) provides

coal to biomass adding 750MW of capacity to the

incentives to invest in technology that converts heat

grid. A large biomass tariff, similar to the FiT, was

to power. DECC is proposing that the non-domestic

introduced under the Renewable Heat Incentive in

RHI is expanded to include new or different support

2011. But a European Commission state aid decision

for technologies including air source heat pumps,

resulted in this tariff being reduced from 2.7p/kWh to

combined heat and power, and deep geothermal.

1p/kWh. Market evidence suggests that few projects

The consultation ends on December 7.

Percentage of companies who have made “much progress” on:

Source: Aldersgate Group Energy Strategy 2012

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A powerful combination

C

Onsite combined heat and power (CHP) generation, also known as cogeneration, has the potential to lower energy costs, improve environmental performance and provide a more reliable source of secure energy for businesses in the manufacturing industry. Geoff Smyth, head of technology & partnerships at the Carbon Trust, explains.

from traditional fossil fuel power

ombined heat and power is the recovery and use of waste heat from power generation.

This can provide far greater levels of efficiency than sourcing energy stations, where typically more than 60% of the energy input is lost without reaching the end user and a massive proportion given off as waste heat.

Increasing energy efficiency cuts costs and carbon emissions, meaning that CHP has serious potential for those parts of the manufacturing industry with high heat and energy demands. As well as heating, a CHP plant can be used to generate cooling by using an absorption chiller unit. Producing heat, electricity and cooling is termed ‘tri-generation’.

In the UK, three industrial sectors account for over three quarters of CHP electrical capacity: chemicals, oil refineries, and paper, publishing and printing. But CHP can be considered at any site where there

Combined heat and power investment become economically viable for a plant after around 4500 hours of heat demand a year. Image courtesy of Bilfinger

is sufficient demand for heating (and/or cooling) for sustained periods of time.

Usually, CHP is only economically

Case Study: SAM Mouldings Springfarm Architectural Mouldings specialises in making MDF architectural mouldings for the construction and home improvement industries. With an energy bill of around £230,000 a year and an expanding business, the factory manager wanted to improve the efficiency of the operations.

In 2007, the company installed a biomass fuelled CHP system designed to make use of the waste chippings and dust generated as a by-product of their manufacturing processes.

The steam turbine-based CHP system generates around 7.5 million kWh per year, meaning that the company no longer relies on the grid for any of its electrical demand, saving around £230,000 a year. As the turbine generates more electricity than the company needs the surplus is sold to the grid, bringing in further income. SAM Mouldings therefore saves £264,000 worth of electrical energy, as well as £300,000 because they don’t have to pay for waste disposal. The project saves a potential 1,195tCO2 each year, with a payback period of just over two years.

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viable for organisations and operations which have a high and constant heat demand – with the minimum being around 4,500 hours in a year, or about 17 hours a day for five days a week. In general, the greater the demand, the higher the cost savings.

These installations can achieve return on investment in three to five years, with annual energy bill cost savings of 20%-30%. The heat and power produced by CHP has a lower carbon intensity than electricity from fossil fuel power stations and gas fired boilers, meaning that a CHP system could reduce your CO2 emissions by around 30%.

The best time to consider installing CHP is at the design stage for a

into the design specification. However, it can also be successfully retrofitted into existing sites, particularly if you are upgrading energy plant, such as a boiler, that

Ten Steps to CHP Success 1 The savings in electricity costs achieved by

could feasibly be replaced by CHP.

onsite CHP (including any sales to third parties)

Types of System

requirements and maintenance costs

Generally, packaged CHP systems are employed for smaller-scale applications because they are designed in a modular fashion and manufactured on a large scale – benefitting from economies of mass production.

Custom-built CHP systems are less common because they have a bespoke design intended for a specific application, and are mainly installed in sectors such as food and drink, chemicals, oil refining, and paper.

The fuel for CHP is normally natural gas, which already has the lowest carbon emissions amongst the common fossil fuels. Alternatively biomass can be used for power, which, provided it is sourced sustainably, reduces carbon footprints even further. The power output is usually split at roughly 40% electricity and 60% heat, although it can be tailored to specific site requirements. Industrial CHP systems tend to work from one of five prime movers: Internal combustion engines Steam turbines Gas turbines Combined cycle gas turbines New and emerging technologies, such as Stirling engines, fuel cells, and Organic Rankine Cycles Installing CHP requires a significant capital investment, but makes its money back through fuel use reductions.

Average capital costs are around £1,250/kWe for smaller schemes, and £800/kWe for larger schemes. Financial

should more than offset the increase in fossil fuel 2 Identify possible sites or buildings suitable for CHP. The most important factor is that there is a year round heat and/or cooling demand 3 Require designers and service providers to

C A RBO N TRUST

new installation or building, as it can be fully integrated

consider CHP as part of all appropriate new build and refurbishment projects 4 Make sure that your CHP unit is not oversized in order to avoid the dumping of excess heat 5 Use ‘whole life costing’, (discounted cash flow) to work out whether the CHP project is viable and take account of the CO2 benefits 6 Consider alternative financing options, such as the Energy Efficiency Financing scheme, to fund the investment 7 Make sure that you negotiate and apply proper maintenance agreements and procedures over the life of the scheme 8 Make use of the resources available from the Carbon Trust and other sources to work out how viable the project is and to make a business case 9 If your site isn’t suitable for a unique CHP system, you could look at buying your heat and/or electricity from a nearby third party operated Good Quality CHP (GQCHP) system (if applicable) 10 Remember to take advantage of the incentives offered for CHP such as exemption from CCLs and business rates

viability can be assessed by comparing the estimated cost of implementation against the expected reduction

Heat and Power scheme (http://chpqa.decc.gov.uk).

in annual costs associated with energy. It is important

Benefits include: A Climate Change Levy (CCL) exemption

to carry out a cost analysis taking into account actual energy demands.

Benefits of CHP A correctly sized CHP unit can achieve an overall conversion efficiency of primary fuel to usable energy

An Enhanced Capital Allowance (ECA) on equipment cost A business rates exemption Support from the Renewables Obligation and Feed-inTariff schemes Beneficial treatment in the EU Emissions Trading Scheme

(power and heat) of up to 80%. This can yield a primary energy saving of around 28% - meaning that 28%

CHP can be used to balance your maximum electrical

less fuel is required to supply electricity and heating

demand to help avoid penalty payments for exceeding

needs than conventional, separate electricity and heat

maximum agreed supply levels from the national grid.

generation methods.

It will also improve a site’s environmental performance,

In addition to the financial benefits stemming

demonstrating a commitment to reducing energy

from energy bill reductions, additional benefits are

consumption and taking action to increase sustainability,

available to businesses which certify their CHP through

which is of importance to shareholders, customers and

the Government’s Quality Assurance for Combined

other stakeholders.

For assistance with the implementation and financing of combined heat and power, and other energy efficient technologies, contact the Carbon Trust at implementation@carbontrust.com or call 020 7832 4806.

77

ENER-G Combined Power offers energy efficient systems that can save you money and reduce carbon.

W

ith the ever increasing

ENER-G is the market leader in

demand for energy, clean

Combined Heat and Power (CHP)

and efficient energy

systems. Our unique combination

sources are essential.

of experience, in-house technology

costs savings and carbon reduction; a

One such energy source is cogeneration

and services means we can design,

typical 200kW CHP unit can save ÂŁ70,000

which creates both electricity and heat

supply and operate cogeneration

and reduce carbon emissions by 400 tonnes

in a single process. This technology is

systems from our Manchester Head

per annum.

an extremely efficient, environmentally

Office and production facility.

friendly and cost effective way

We are also able to offer flexible

CHP units that can operation on a variety of

of supplying energy within the

project funding options that

fuels. We also have the capability to design

manufacturing industry.

can mean no capital outlay and

bespoke solutions.

immediate costs savings.

Conventional energy generation

ENER-G has a range of standard packaged

With key customers including GSK, Tangerine Confectionery and Adams Foods

results in an efficiency of around

ENER-G can support you with all your

50 % due mainly to transmission

manufacturing energy needs.

losses, by utilising the heat generated during the production of electricity the efficiency of a CHP

ENER-G Combined Power Limited

plant can reach 80% or more. CHP

ENER-G House, Daniel Adamson Road,

therefore offers energy savings of

Manchester. M50 1DT.

up to 30% when compared to the

chp@energ.co.uk

supply of electricity and heat from

www.energ.co.uk

A Typical standard CHP unit. Tested in the

conventional power stations and

T: 0161 745 7450

Manchester based factory prior to delivery

boilers. Additional benefits include

78

While electricity generation had for years been synonymous with large-scale power stations requiring extensive capital investment, the changing face of the energy sector has meant that it is now within the reach of almost any customer. With changes to the legislative structure including a range of financial incentives, investment in on-site electricity generation has grown in recent years and this is expected to continue.

F

or industrial and commercial

namely does your electricity supply contract allow you to

customers looking to

change your consumption by the degree required to take

develop generation assets,

advantage of on-site generation?

on-site generation is not

This needs to be considered and discussed with your

something that can be considered

electricity supplier as part of the development process,

in isolation, as investing in such a

and such negotiations need to form part of your broader

project must be considered in the

energy strategy. In addition, while the focus of project

context of their broader business

developers is often on the wholesale price for electricity,

requirements and objectives. The

on-site generation can and does yield additional benefits

key questions to consider are: how

and cost reductions. Depending on the generation

much will the project cost, what is

technology used, these can include benefits such as

the financial return and over what

reduced transmission and distribution charges, Climate

period, and how are changes to

Change Levy Exemption Certificates (LECs) and others.

the industry likely to impact these considerations.

Seeking the optimal contract structure for your asset is therefore pivotal. While the agreement will underpin the

The cost of the installation will

asset, it should not be too restrictive and should permit

depend upon the size and scale of

you to take advantage of developments in the wholesale

investment, and also the technology

market – as well as giving you the flexibility to handle any

used. The manner in which the

internal changes, such as unexpected shutdowns.

project is financed – for example,

Investing in any such generation asset really does

through your own funds or through

highlight the old adage that knowledge is power. Except

a joint venture – is also a key factor,

in this case, knowledge will also help you manage your

as this can be encompassed within

power. A sound understanding of the energy sector, its

the Power Purchase Agreement

dynamics, and how to work with suppliers is essential.

(PPA) that governs the purchase of electricity from your asset.

Understanding the wholesale

U X En e r gy S e r v i c e s

Optimise My Generation

The Utilities Exchange Ltd (UX) currently provides consultancy advice to a range of manufacturing clients in support of on-site renewable projects.

electricity market is crucial,

Our experience in renewable project planning and

particularly in terms of the way in

evaluation, contract negotiation, CHP Optimisation,

which your contracts are structured

PPA’s and long-term price forecasting reports, ensures

and what potential benefit you are

a solution that matches your operational needs and

likely to get – either in terms of

delivers better energy risk management. Dr Craig Lowrey

selling your generated output on

is a Consultant at The Utilities Exchange Ltd. For more

to the grid, or expenditure avoided

information, talk to us today on Tel: 0800 018 1808, or

by using your own generation. This

find out more about our company, our services and our

itself raises an important question,

ethos at: www.ux-online.com.

79

LIGHTSOURCE RENEWABLE ENERGY THE LARGEST SOLAR ENERGY SUPPLIER IN BRITAIN

Lightsource Renewable Energy is the largest solar energy supplier and plant developer/owner in the UK, which allows us to take full advantage of economies of scale. Our vast buying power enables us to drive down the price of solar panels and these savings are ultimately passed on to our clients in the form of lower energy bills. Our attractive Power Purchase Agreements provide high energy users pricing certainty for the future. To find out more visit www.lightsource-re.co.uk

PRICING CERTAINTY ON YOUR ELECTRICITY BILLS FOR THE FUTURE WITH SOLAR ENERGY FROM LIGHTSOURCE It goes without saying that electricity prices are going up and up. According to current UK Power Index estimates from the Department of Energy and Climate Change, we are looking at a punitive 5-8% per annum from conventional energy suppliers. Even aside from the expense, if you are a heavy commercial, industrial or public sector user, the sheer unpredictability of fossil fuel electricity costs can make accurate budgeting and planning for the future nigh on impossible.

However, there is a proven way to eliminate much of the uncertainty as well as cut your electricity costs. Lightsource is the UK’s largest provider of solar energy and because of the unique way in which we are funded, we can install and maintain a top quality photovoltaic system at or near your premises at no cost whatsoever to your business. Taking into account the complexities of the installation, we will agree a price with you for the solar-generated energy we then provide you with, and that price is linked to the lower and far less volatile Retail Price Index for the next 25 years.

At Lightsource, we have been at the forefront of a quiet revolution in the uptake of solar energy in the UK and Europe as more and more businesses, local authorities, and investors are becoming savvy to the lower prices and futureproofing it offers. They are also well aware of the positive message it sends out in terms of them taking their corporate social responsibility to the environment seriously.

Since its foundation in 2010, Lightsource has taken the renewable energy industry by storm.

We are now the largest solar power supplier and

plant developer/owner in the UK, which allows us to take full advantage of economies of scale.

Our vast buying power enables us to drive down the price of solar panels and these savings are ultimately passed on to our clients in the form of lower solar energy bills. Our attractive Power Purchase Agreements provide high energy users pricing certainty for the future.

highest possible standards over the long term.

In short, what we do is to create an appropriate solar solution that will be completely hassle free for the user because we do all the work for them, and do it extremely well.

Behind such remarkable growth is, of course, our dynamic team. We started out with just eight of us, and now we employ approaching 100 London-based staff from 21 different countries.

Because our team is so international, we are able to draw on all the latest expertise they bring with them from around the globe, keeping us at the forefront of solar technology.

WHAT MAKES LIGHTSOURCE THE UK’S LEADING SUPPLIER OF SOLAR ENERGY? Aside from our considerable know-how, it is very much down to the way we work. We are large enough to have our own in-house resources including planning, grid, technical and legal experts.

Because we don’t have to rely on third parties we’re able to design and install solar plants quickly and efficiently. Being large also gives us the capability to handle high volume schemes cost effectively thanks to our buying power which ultimately benefits our clients.

On site, we use only established engineering, procurement and construction (EPC) contractors with vast experience of putting in major solar installations. And because we own the plant, it is purely common sense for us to specify only premium equipment and then maintain it to the

PROMENS PACKAGING – THE UK’S LARGEST ON-ROOF SOLAR INSTALLATION Just one year after 7,000 solar panels were installed by Lightsource on the roof of Promens Packaging in Beccles, Suffolk, the scheme has now generated over 1,000,000 kWh (1GWh) of green electricity. Adrian Banks, Engineering Manager at Promens Packaging reports “From July 2011 to the end of June this year we have generated 1.2 GWh, utilised 970 MWh, exported to the grid the remaining 191 MWh and in the process saving us over £50,000 on our energy bill.

These are clearly significant figures and we would expect the benefit to increase further over the next 12 months, especially with energy tariffs going up”.

Promens is a prime example of how commercial property owners and high electricity users can benefit from leasing otherwise unutilised roof or ground space to Lightsource with no expenditure and no adverse impact on existing business activity.

Lightsource handles the whole of the photovoltaic process, rather than just being involved with one specific aspect of it. For example, in the pre-construction phase we’ll carry out feasibility studies, draw up initial designs and put together the technical offer covering legal, financial and EPC matters.

During the construction phase itself, our appointed EPC will carry out all engineering and construction work. They will install the PV panels, support structures, cabling, inverters, transformers, switch gear, monitoring and control systems, lightning conductors and other meteorological equipment.

Once the solar plant is in place and fully operational, under our instructions the EPC will carry out both preventative and reactive maintenance of the solar plant on a long term basis.

For further information on how Lightsource can help reduce your energy bills or any of its solar PV energy products please contact newprojects@lightsource-re.co.uk or visit www.lightsource-re.co.uk

Th e Un i v e r s i t y o f B i r m i ngha m

Cleaner power from chocolate eating microbes hydrogen is made from natural

Professor Lynne Macaskie from the University of Birmingham tells Tom Moore how its clean hydrogen can finally power fuel cells to their full potential

gas and the process just happens

W

carbon monoxide still remain and

to include the worst impurities for PEMs - carbon monoxide. Even after intensive purification, a few ppm of

ith oil and gas supplies

time. Why are we still waiting for

this slowly clogs up the precious

drying up, hydrogen

efficient, zero-carbon transport with

platinum that is essential for the fuel

provides a powerful

hydrogen fuel?

cell to work.

alternative. As it stands, the

Fuel cells come in many types

most effective use of hydrogen is as a fuel

with widely varying properties. The

Biohydrogen

converted into electricity by fuel cells.

types now in use in buildings are

To solve this problem, the

robust and capable of using readily

University of Birmingham has

space programmes having used them for

available fuels like natural gas but

been investigating biohydrogen,

almost half a century to generate power for

they are unresponsive. For mobile

a different way of producing

probes, satellites and space capsules. Since

applications like cars or laptops

hydrogen involving microbes and

then, fuel cells have been used in many

you need a fuel cell that switches

renewable resources like sunlight

other applications but their recent take-off

on and off very quickly and there is

and wasted food. Biohydrogen

was a long time in the making because of

only one type that can do that, the

doesn’t require cleaning because

cost issues.

‘PEM’ (Proton Exchange Membrane)

these microbes are not capable of

fuel cell.

producing carbon monoxide. If

Fuels cells are nothing new, with NASA

Fuel cells have found niches in primary and backup power for commercial,

PEMs are made with costly

biohydrogen production can be

industrial and residential buildings in

metals like platinum, and this

scaled up and made available to the

remote or inaccessible areas and in special

makes them expensive. With high

fuel cell developers, zero carbon

vehicles like forklift trucks. A role for them in

costs, fuel cells must last a long

transport will be one step closer.

everyday homes and vehicles seems to have

time but their lifetime is shortened

been hovering on the horizon for a long

by impurities in the fuel. Today’s

The hydrogen story all began just down the road from the School of Biosciences at the Cadbury factory in Bournville. While the chocolate sold in packaging is enough to fill anyone with energy, the waste from the process can now do the same in a process that produces clean hydrogen.

Professor Lynne Macaskie explains that “Cadbury’s chocolate waste was picked up by the University and given to bacteria to eat. Bacteria, much like people, enjoy eating sugars but whereas people breathe out carbon dioxide, the bacteria breathe out hydrogen.”

“The fuel cell catalyst gets poisoned by dirty hydrogen so they don’t last long enough,” says Macaskie. “We have a system that takes in edible waste – that

82

is currently sent for anaerobic

whole process generates three

digestion from little green bins

times as much energy as it requires

outside UK homes and manipulates

with the University’s biohydrogen

the process so that you can make

process delivering 50-80 kW of

clean hydrogen.”

power per hectare of land, while

Everyone wins The process is win-win-win in a world facing a triple threat of

just 20 kW are produced in the same space used for wind turbines and 36 kW from solar panels.

“The key to making biohydrogen

growing waste volumes, declining

really efficiently is to put together

disposal options, and limited

two very different types of bacteria.

energy resources. The only product is hydrogen; most of the CO2 is

One uses up the organic feedstock

trapped by the bacteria and can be

complete the conversion” explains

made into bioplastics.

Professor Lynne Macaskie. “To

The most common liquid biofuel

and the other uses sunlight to

incorporate sunlight into the process

is ethanol but Macaskie says

special transparent bioreactors are

“Hydrogen is tomorrow’s biofuel.

needed and lots of open space to

Biohydrogen will boost the ability to

put them in.”

get a valuable product out of current digestion methods.”

The University of Birmingham’s Unit of Functional

Bioreactors can go on any type of land, even contaminated areas or the surfaces of buildings.

The solar-powered stage of the

Bionanomaterials, is actively

process is called photofermentation

engaging with various producers

and this third generation biofuel

of organic wastes from several

works better than the previous two,

industry sectors including food,

showing that evolution works with

water and recycling. It continues to

90% of the gases released from

seek industry partners looking for

reactors being hydrogen compounds

unique economic solutions for their

ready to feed longer-lasting fuel

biodegradable waste, with the UK

cells, making them cheaper.

accumulating 100 million tonnes of this waste a year.

The team has focused on

First generation biofuels, like ethanol made from crops like wheat, impact on food supply and

delivering commercial solutions

can increase food prices in the

that can impact these real world

poorest countries. When biofuels

problems and says that although

are based on edible crops then

it has focused on sugary waste so

mouths and engines are competing

far, the technology is capable of

for the same fuel.

expanding to incorporate more types of waste from different sectors.

Biohydrogen is a new technology

The incentive is now in place to commercialise biofuels based on microbes instead of crops. Microbial

in the process of scaling up and

biofuels require much less space

establishing its economic viability.

than first generation biofuels but

The latest work shows that the

a lot of work will be needed to engineer efficient solar powered

How it works? Fuel cells

bioreactors and to build up supply

convert the chemical energy

chains for mass manufacturing.

from a fuel into electricity through a chemical reaction

For videos and more information

with oxygen or another

and to comment in the online forum

oxidising agent.

please go to www.birmingham.ac.uk/ biohydrogen

Accessing the expertise at the University of Birmingham The University of Birmingham’s five colleges, 3,000 academic staff and leading-edge facilities can be accessed in the following ways: Intellectual property licenses The University of Birmingham has a varied portfolio medical, biomedical, engineering and environmental patents available for licensing.

Objective expert consultancy Engage with the brightest minds from a wide range of scientific disciplines to help boost your organisation’s knowledge and resources.

Collaborative projects and partnerships Work with the University to develop strategic, collaborative partnerships involving other universities, businesses, public sector bodies, government and other funders to achieve a common and shared goal.

Contract R&D Join forces with the researchers to work on your organisation’s specific research and development needs.

State-of-the-art equipment, testing and analysis Utilise the University’s state-of-the-art scientific equipment or train members of your team on a particular technique.

Access to funding Speak to a dedicated team of business engagement officers to navigate your way through the various funding opportunities available.

Knowledge Transfer Partnerships (KTP) Enter a three-way knowledge transfer partnership with the University and a high calibre graduate to work on a project for a period of between 18 months and three years.

If you would like to get in touch with the University of Birmingham to discuss your particular needs, contact Tim Yates on 0121 4148635 or email t.yates.1@bham.ac.uk

83

Circuit Training

W

ith energy markets flooded with providers pitching to domestic and

business customers of all shapes and sizes, it’s often a headache for supply chain managers, site

The daunting task of getting the absolute best bargain for your energy can often be left to someone else. And the best thing is, one company can do it for you without any hard cash from your wallet finds George Archer.

managers and manufacturing managers to identify which provider

The Utilitywise offices in South Shields, Tyne and Wear

is best able to help reduce energy consumption at their company.

Utilitywise deploy devices and consultants to make an accurate assessment of where energy can be saved, and then find their customers the best supply contract prices based on how the site operates.

It then consolidates a company’s energy supply from multiple sources into one.

The energy audit, carbon offsetting and energy saving measures can be rolled into the price of the energy, paid for by the client or Utilitywise can seek other funding options. The Utilitywise energy audit highlights energy saving projects with a payback of less than five years.

Leaning towards manufacturing

Management buyout of an existing light steel fabrication company based in Birmingham. The company make the steel frames on seats, tables and shop fittings.

Because of the management

We negotiated a three years

Utilitywise has created a team

buyout the company found

deal (so the business has price

with demonstrated experience in

that the energy supplier they

stability for three years) with an

helping manufacturing companies,

had previously been dealing

upfront payment of £12,000. We

and who are fast becoming more

with reserved the right to

also secured a very keen price

knowledgeable in the industry

change the price after three

which only represented a one

sector, according to chief operating

months and wanted all the

percent increase on their last

officer, Adam Thompson.

energy paid for in advance.

energy price.

“We’re arming this team with

Utilitywise got involved and

We are now reviewing the

more manufacturing knowledge,”

started talking to the supplier

account with the supplier to

says Mr Thompson. “We help the

we deal with to find them a

negotiate the return of the

customer find their best supply

better deal. Many suppliers were

£12,000 bond to the client –

contract price, making sure they

asking for a very high bond – one

which will happen at the end of

are best suited to how the site

wanted £50,000 up front.

the month.

operates,” he explains.

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Case study

UTILIT Y W ISE

From right to left - Geoff Thompson, chief executive officer, Adam Thompson, chief operating officer and Andrew Richardson, chief financial officer

We’re arming our sales force with specific manufacturing knowledge, and give our individual sales teams direct streaming access to Bloomberg’s energy news streams so they can keep a consistent and accurate eye on prices Adam Thompson, COO, Utilitywise

Tony Hitchens head of marketing

What’s on offer

explains: “Our audit tool has

Utilitywise offer a range of services – including

access to the real product

an (often free for the first time) energy audit.

specifications that means it is

It also supplies a piece of hardware called

very accurate in predicting the

Edd:e and accompanying software that allows

actual savings that can be made.

extremely accurate and efficient auditing of a

It also allows the energy surveyor An Edd:e device on a wall

customer’s site.

Edd:e measures power consumption at an

individual circuit level – and the customer can then identify standalone waste and base load. It is the data from smart meters that allows us to see the energy shape.

to quickly try different mixes of products to see what brings the best energy saving.”

“Our audit software and hardware allows assessment of the affects

Loans are then secured with the help of Utilitywise

of the savings on site. The audit

Workers at a kitchen unit manufacturer Utilitywise worked with assumed

software does everything for you,”

that keeping circular saws running when they weren’t in use was more

says Thompson. “If a customer does

efficient than switching them off and back on again. Edd:e proved this

what it says in the report we give

wasn’t the case, and a substantial saving was made without any monetary

them, they save on average 22% of

investment at all.

their current energy bill,” he adds.

For example, once an energy saving measure at a factory has been proposed and Utilitywise has

Case study

made an accurate prediction of

Large food manufacturer making confectionery.

how much energy will be saved by that measure every year, the

The audit covered the large

The Utilitywise team

cost of the re-fit can be paid for by

factory site and the offices.

identified the lights as a

bundling the cost into the unit rate

priority and put forward a

for the energy.

A wide range of energy saving energy saving projects were

variety of recommendations

identified which could save

to increase the light levels

find the best deal for a client

155,606kWh of energy and 154m3

across the site and still save

and bundle the cost of energy

of water per year; this would

12,516kWh per year.

saving measures into the unit rate

result in the factory lowering its

The team also recommended

The ability of Utilitywise to

of the energy means that great

carbon footprint by 26%. The

fitting insulation around

savings can be passed onto the

team also identified that the light

various food-processing

customers. “We actually fund

levels in the factory, stores and

equipment on the factory

measures through the supply

warehouse were generally quite

floor - this is saving the

contract. We believe no one else

poor and recommended that they

company 143,090kWh

is doing this in the current market

be upgraded.

of electricity per year.

place” explains Mr Thompson.

85

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Manufacturinginaction Putting UK manufacturers under the spotlight Supported by:

Factory of the month

New Holland Agriculture UK 88 Tractors Find out how CNH keeps up with Fiat Industrial’s demand for 8% operational savings year on year Understand the 10 pillars of World Class Manufacturing which underpin CNH’s approach to operations Learn about how CNH simplifies the delivery of complexity in its products Find out about CNH’s work with sector skills council Semta to boost apprenticeship intake Understand why CNH invested in a custom-built Customer Centre

S ignage

MTM 110 Find out about MTM’s signage and labelling services for manufacturers – suitable for use in conditions from -40°C to over 100°C Understand why quality labelling and signage can help compliance with health and safety and avoid financial penalties for late deliveries Learn about MTM approach to customer relations and batch management for factory efficiency and stock control

I njection moulding

Hi-Technology Group 112 Learn how Hi-Technology has avoided the effects of recession and achieved continuous growth since 2006 Understand why the company won The Manufacturer of the Year, People and Skills Award in 2011 Read how Hi-Technology drives a competitive cost offering in sync with a focus on quality Learn how strategic diversification has protected Hi-Technology from a decline in its defence industry business from 18% of company revenue in 2010 to 11% in 2012

M edical devices

Siemens Sudbury 118 Read how Siemens Sudbury is taking lessons from its lean journey to drive forward excellence in environmental management with the result that site now uses less energy than it did in 2004 despite increasing production by 25% Learn how the site achieved €2.5m worth of saving in a year through continuous improvement suggestions Understand the site’s approach to encouraging customer engagement with sustainability objectives

All companies featured will be entered into the MIA Award 2012

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Essex..

The Only Way is

Driving improvement: In October New Holland Agriculture’s Basildon factory was awarded the tough World Class Manufacturing Bronze award. It joins two other CNH plants globally who have achieved Bronze WCM status.

88

Factory of the month New Holland Agriculture UK

...but unlike the TV show, the only thing that’s bronze in this plant is the level of manufacturing

New Holland Agriculture in Basildon is on track to manufacture 26,000 tractors this year, a record for the plant. Plant Manager Colin Larkin and Material Handling Manager Dean Stephenson explain how deeper application of the company-wide production system – World Class Manufacturing – has enabled this higher output while still reaching 8% year-onyear cost savings.

T

wo years after David Cameron and Nick Clegg’s awkward coalition-bonding honeymoon in Downing Street’s Rose Garden, they needed somewhere strong and export-focused to renew their marriage vows. Where else but New Holland Agriculture’s tractor factory in Basildon?! Surrounded by blue tractors –with a couple of yellow decals to keep the coalition message on page – the workers cross-examined them on several subjects. “They got stuck into them too,” says Dean Stephenson, Basildon’s material handling manager. And with the factory on track for record output, it was the kind of backdrop that gave a bit of backbone to a shaky alliance.

Rumour has it that No. 10 was even concerned that the factory was doing so well it would not accurately reflect the tricky spell UK manufacturing was going through.

New Holland Agriculture is shipping record numbers of tractors but, like the coalition government, is not without big challenges. How easy is it, for example, to find eight per cent operational savings year-on-year? Colin Larkin, timeserved plant manager at the 40-hectare site in Essex sucks his teeth. “We are able to get to 5-6 per cent fairly easily.

The other 2-3 per cent is quite painful. We haven’t reached the ‘impossible’ point yet.”

It is a big ask, but entirely realistic in the world of high volume heavy equipment manufacture. New Holland Agriculture (henceforth referred to as Basildon or CNH UK) is part of the CNH Group that includes tractor brands Case and Steyr, and CNH in turn is part of the Fiat Industrial group which includes truck maker Iveco and the industrial and marine division of Fiat Powertrain Technologies. The division faces internal competition from Case and externally from companies like Caterpillar and John Deere in a global tractor market worth several billion pounds a year.

The devotion to lean manufacturing at all these companies is intense, so to keep on top CNH UK must drill into its operational efficiency in greater detail than ever before.

The news in October that main shareholder Fiat Industrial Group’s offer to merge with CNH had been rejected puts perhaps even more pressure on factories like Basildon.

While on some measures, such as the number of Best Practice awards won, Basildon tops the group’s league table, a merged, larger company in a tough economy is always looking to consolidate costs. After brisk sales in the first three quarters, a slower sales forecast in the last quarter of 2012 adds to the pressure on the manufacturing team.

“From group forecasts for 2013 we expect to make only 23,000 units, but that is our normal cyclical spread in this market,” says Mr Larkin.

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TMAT GROWS 20PC A YEAR ON DEMAND FOR NVH SOLUTIONS

T

MAT’s investment and development programme is paying dividends for the UK company which is maintaining year-on-year 20 per cent growth for its innovative solutions to Noise, Vibration and Harshness in the ACE (agricultural, construction, earthmoving) markets.

OEMs including Case, New Holland Tractors, JCB, Komatsu and Volvo incorporate TMAT’s acoustic systems into their industry-leading products to improve the working environments of millions of heavy equipment users worldwide.

The multi-national manufacturer has significantly ramped up its R&D spend,

90

opening a new on-site laboratory and making a significant investment in its production plant. This has already led to the development of a new process for manufacturing polyurethane acoustic insulation which results in a highdefinition, light and durable material that achieves excellent sound-dampening properties at low cost.

Alongside TMAT’s high-level engineering and design expertise runs a world-class customer service operation backed by a workforce-wide training programme that nurtures and develops the skills of every employee. Following a recent audit, a UKbased OEM praised TMAT for achieving a 100 per cent delivery rate over four consecutive months.

Managing Director Jason Lippitt says: “TMAT is rewriting the standards for NVH solutions that are enhancing the lives of working people worldwide and adding real value to our customers’ products”.

Backed by Advent Partners investment group and a £1.6 million HSBC funding package, TMAT aims to drive turnover to more than £20 million by 2015.

Published in association with: TMAT Tel: 0044 (0)1246 850828 Web: www.tmatuk.com

Factory of the month New Holland Agriculture UK

Attacking losses – World Class Manufacturing overview To seek and destroy losses, CNH uses World Class Manufacturing, a production system based on 10-pillars devised in the 1990s and adopted by a group of seven global companies.

Some, like Saint-Gobain, have departed WCM while others, such as Royal Mail, have joined.

World Class Manufacturing is a structured system uniting some of the most effective known methodologies in manufacturing best practice. These include Total Quality Control, Total Productive Maintenance, Total Industrial Engineering, Just in Time, etc, which are geared towards raising the entire logistics and manufacturing cycle of plants to levels of excellence.

Fiat Industrial has some 54 plants

We have just been awarded the WCM Bronze Award (October 24). But for a Gold award, we don’t even understand what that means yet Dean Stephenson, Material Handling Manager worldwide using the WCM system, covering plants at CNH, its Iveco truck factories and the FPT Industrial subsidiary.

The WCM structure, that resembles other lean manufacturing “temple” structures, has pillars for: Safety Cost deployment Focused improvement Autonomous maintenance and Workplace organisation Professional maintenance Quality control Logistics / Customer service Equipment management / Early product management People development Environment Fiat adopted WCM in 2006 and CNH Group in 2008. Four or five years on from the first signs of WCM, Colin Larkin says it has been a major achievement for CNH. “It shows the vision of Mr Marchionne [Sergio Marchionne, Fiat’s

The Product Basildon makes two main models, T6 and T7, split in nine ranges as shown.

The complexity of our product and the ability to deliver that complexity is the key Colin Larkin, Plant Manager

Basildon handles at least one product upgrade a year, which always involves a modification to the production. A platform team from Italy comes to oversee new production changes.

The most recent product upgrade: Involves increased complexity to meet European and US Tier 4 emissions regulations.

Has an ABS (advanced breaking system) model that has better stopping capability.

There are new process systems to match it, and a new rolling road for testing. The ABS involves another 300 part numbers.

Adds to complexity and material flow issues in the plant.

“For the last decade emissions have driven product changes,” says Larkin. “The last big mechanical change was the guiding arm rest in 2010.

The EPM team works with the shop floor to get concept parts integrated, building test units offline, offering feedback to the design teams.

“With a new product, you see new losses to attack. You constantly find better solutions,” says Mr Stephenson.

91

Factory of the month New Holland Agriculture UK

CEO], for implementing this model and how it has evolved. He could see it in other companies like Toyota and BMW, and wanted to bring that into our production systems.”

When The Manufacturer first visited CNH UK in February 2011, WCM was about 20% implemented. Mr Larkin, who talks like a man with 100% conviction in the methods used in his company, says WCM is now 50% implemented with still a long way to go.

“The beauty of the WCM system is it is a common language and a common platform from which to be measured against your peers,” says Dean Stephenson. “The best practices derived through implementation can be shared throughout the entire Fiat Industrial group.”

Basildon is audited twice a year by an auditor from within the group, this generates a live score that is a standard shared by the whole company. There are specific strengths and weaknesses within plants.

“The philosophy is to learn from the best,” says Mr Stephenson. “Cross fertilization is encouraged. If there is a plant in Italy doing well on process point analysis or DOE, for example, then Basildon would visit that plant, and vice versa. “We’ve sent staff to logistics workshops, and out to a plant in New Delhi to bring them up on workplace organisation.

Now WCM is implemented in Chrysler, which Fiat acquired in 2009.

“We are sharing information with Chrysler and plant visits there are quite likely,” Mr Larkin adds. Of the 25 factories in the CNH group, eight are at a similar level to Basildon, with audit scores from 46-48 points.

How well is WCM embedded across the vast 40-hectare site? “We have an implementation plan,” says Mr Larkin.

“There are parts of the plant where it is well-embedded, other parts where it has yet to be implemented. Until we get that as standard right across the plant, we’ve got huge opportunities still.”

WCM has driven many improvements at Basildon. Some of the pillars may have profound consequences for CNH UK – and for the group. Basildon is working on EPM – Early Product Management – processes that may help Group to redesign components to save material and packaging costs, and reduce assembly time.

How WCM works: Focused Improvement

Q&A with Dean Stephenson While Improving safety is a top priority, the raison d’etre for WCM, Mr Stephenson says, is to identify and attack losses. “The true benefit of WCM is in the level of detail we can explore in losses, across departments,” he says.

“But sometimes that next level of waste isn’t exposed until that (certain) improvement has taken place.”

Stephenson says WCM works because some first stage improvements reveal knock-on waste reduction benefits. Several months ago they ran a pilot area for kitting parts. “There was initial skepticism. We did it with Colin over time and proved that it reduced waste.

We took same idea into a second area and quickly recognized further, different improvements. This now makes the first implementation look second rate, you implement, then do it slightly better in the next area.”

“A 20 per cent reduction in non-value added activity in a virgin area was, in the early days, a very difficult task.

Today that’s peanuts – we’re regularly getting 25 per cent to 30 per cent,” adds Stephenson.

Where are the improvements happening?

Operator ergonomics lead to line shortening CNH is trying to cut down operator walking, time spent waiting for material, the time spent by an operator preparing a part before he fits it to the tractor.

In WCM’s early days, Basildon used spaghetti charts and value stream mapping, for quick wins like moving boxes closer to an operator etc. “Now the philosophy is to deliver the correct part right there – as close as is reasonably possible to the operator’s hand,” Stephenson says.

“With some of the kitting and internal logistics we’ve developed, we’re able to add the value to the product much faster. Because we can add the value much quicker, we’ve recognised that the line doesn’t need to be as long. We’re making a potential saving in WIP by having shorter production lines and shorter lead times.”

“Where we could not see those wastes in early days, through doggedly attacking wastes we’re exposing further wastes. That’s why we’ve been able to achieve eight per cent [cost saving] targets.”

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Case New Holland & Franz Sauermann A strong partnership for the future Supplier to CNH since 1995 Success through innovation, satisfied customers and high quality products

C

ontinual innovation, the complete satisfaction of customer need and the highest quality standards are the basic reasons for the international success of the Franz Sauermann GmbH – The specialist for Tanks and Fenders. Founded in 1995 and still led by the proprietor, the company develops and produces its products in its German location, which is in Freinhausen and Schrobenhausen near Munich. There is also a rotomoulding plant in Chennai India for the Indian market. Franz Sauermann is proud of his well trained employees which are experts on their field.

In combination with their high motivation and the well know German

94

inventivness, the company can fulfil the highest requirements of functionality and quality in their products, which is expected not only by Franz Sauermann themselves but also by their customers.

A further reason for the strength of the company is the high level of competence they command in various production methods in the Freinhausen and Schrobenhausen plant. So Franz Sauermann are able to fulfil their customers needs in a fast and flexible manner. It is possible to handle changes in production an to guarantee a high degree of on – time delivery simultaneously, even just in sequence deliveries are possible. It is the fulfillment of these high in production and continuous

innovation which are the main factors for the success of Franz Sauermann GmbH. Short time-to-market cycles of newly developed products are possible through the close network between the Design & Development, Production and Quality Departments at the Freinhausen and Schrobenhausen Plant. In doing so, Franz Sauermann is always one step ahead of their competitors.

Published in association with: Franz Sauermann GmbH Tel: 0049 (0) 8446 92050 Email: sgl@franz-sauermann.de

Factory of the month New Holland Agriculture UK

Cost Deployment C Matrix Stratification by Area

FI approach to improvement Wastes are everywhere. Basildon analyses which battles to pick, and which to prioritise using matrices.

“We use an ICE matrix that displays the value of the loss versus the cost of achieving the benefit,” says Stephenson. “This procedure evaluates the ease of doing the improvement as well.” Basildon’s FI approach selects an area or piece of equipment to improve, then plots the stratification of losses being incurred.

Next, the theme, promotion, planning and preparation of the project is chosen, before the team is selected and trained.

Basildon has begun to apply WCM to some of its supplier contracts, in its cleaning, security and boiler house services, where some of these suppliers are on site. This has led to renewed contracts and savings that contribute to its WCM overall.

How far can you take WCM? Four years into WCM at Basildon, with 10-pillar leaders dedicated to squeezing every penny of savings out of their departments, how much further can WCM go?

“We have just been awarded the WCM Bronze award,” says Stephenson. Two other CNH factories have achieved this. “We know what is involved in some of the Silver award syllabus. But for a Gold award, we don’t even understand what that means yet.”

Members of the manufacturing team celebrate winning the World Class Manufacturing Bronze Award. WCM is a production system adopted by six global companies.

CNH Basildon – recent factory improvements under WCM Factory configuration improvements A straight aisleway has been built through the heart of the plant. New loading door so all material enters the building in a straight line. Before this, material had to move around two corners and other angles.

Main material receiving area is now more of a grid arrangement.

Material stock on the production line Stock has been reduced so there is just enough material for one hour

Logistics projects Kanban and angled racking Parts picking in most areas is now on a kanban or twobin system. All the racks are custom designed and built in-house from polypipe tubing. The no. of racks has doubled in the last two years.

“The material is delivered every eight minutes and there was a lot of manual lifting,” says Stephenson. The solution

95

Factory of the month New Holland Agriculture UK

is simple gravity-fed flow racking.

“They discharge full boxes on and empties off with minimal handling”.

Semta helps Basildon plant to save £1.2 million

Modified lifting equipment for the new parts delivery system

Manufacturing sector skills council, Semta, comments on its skills work with CNH UK.

Some lifting equipment installed on parts of the line have been removed where redundant. Others have been utilized to receive the delivery trolley and helps line up the trolley with the work bench.

Moving work benches hook onto the tractor hub The production line is on a moving track – now the work benches creep along with it, clipped on to the chassis. Before the bench was static and operator moved back and forward.

Kitted parts Beforehand an operator picked up material with a crane and fitted it to the tractor 5-10 metres away.

Radiator: Now parts like the radiator are sent in a kit. It is dropped down very close it is to the point of fitting, into the ‘tombstone’ at the front of the tractor. Simply unlatched from the forklift, gas rams let it fall into position which is perfect for the height of the operator.

Improved flow of parts The line workers and material delivery work to a takt time of four mins.

“We’re always looking at the optimal flow for any kind of material,” says Larkin. Plans are being drawn up to move sub-assembly stations for parts located in the corner of the building, closer to the point of assembly. “We need to reduce the number of work stations, by doing the clever work, and then shorten the production line.”

Material handling – Colour codes and buggy delivery Basildon has reverse engineered an automated guided vehicle (AVG) and built their own machine for delivery of some materials. “We worked out how it worked, then from tractor parts some of our guys designed and built this one using a tractor hood,

“Case New Holland is the UK’s last remaining tractor factory based in Basildon, Essex, employing 1,000 people, 625 of whom are in manufacturing. Plant manager Colin Larkin was tasked by the factory’s owners, Fiat, to pursue world class manufacturing. To do this, the company needed to take ownership of its training and skills.

A meeting with Semta unlocked the door to substantial funding.

As a result, the company has trained 280 employees to very high standards through a three-year support package under the Sector Compact and saved around £1.2 million per year as an integrated part of its World Class Manufacturing system.

The success of the programme was instrumental in the Prime Minister and his deputy making a high profile visit to the plant in May. In addition, in conjunction with Semta CNH UK recently opened its doors to a series of best practice events to showcase world class manufacturing in action and to help firms in its supply chain, and even those who are not suppliers, to gain a better understanding of the business as well as the tools available for them to upskill their own workforce.

CNH UK shows how embracing and taking ownership of the skills agenda can make a huge difference to businesses and the wider industry.”

sensors, wiper motors, etc for about £2,000k, at least 80% saving over buying one,” says Larkin. “Our long term goal is to have 10 of these driving around the plant.”

Material is delivered in fixed takt times. Operators hang pink triangles, white circles or blue squares to indicate replenishment. The materials man delivers components matching those signs, one driver to one symbol or material class, on a shift.

Another goal is to replace all the forklifts with buggies.

In one section of the plant, the number of forklifts has reduced from 16 to four. Purchase costs should be about the same, “but you get much more yield from the buggy than forklifts, and this will reduce the overall number of vehicles,” says Larkin.

LeanTek fabrication area Specialised racking and delivery systems are built on site from polypipe tubing. While small projects were introduced over 2012, large sections were being implemented in September and October that will make a big difference to production.

“Racks are custom-built to take product to the operator at the best delivery point as possible,” says Larkin. “This rack went out last week, the guys make comments, it comes back and been modified. This is the kaizen, PDCA philosophy.” PDCA is where the racking team work on the line operators’ snagging lists to make the best system possible.

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Factory of the month New Holland Agriculture UK

Professional Maintenance (PM) One pillar where measurable savings have been realized is Professional Maintenance, or PM. Dean Stephenson and pillar leader Stephen Tween are responsible for PM and have been assessing the losses incurred by mechanical breakdowns.

Basildon recorded many losses from AVG (automated guided vehicle), a type of AA class machine, where PM activities are now prioritised.

The plant introduced a detailed machine ledger, for each device, that drills into the detail of the components.

We are able to get to 5-6 per cent [cost savings] fairly easily. The other 2-3 per cent is quite painful. We haven’t reached the ‘impossible’ point yet Colin Larkin, Plant Manager

Pillar Results: Overall Customer Satisfaction Scores: 1 = Low Satisfaction, 10 = High Satisfaction Competitor A Competitor B New Holland T6000

The ledger shows, for example: Machine AVG03, the day, time, interface board, ID code, where the spare part is located, the supplier for that part, and a maintenance SMP number.

“For the AVG, using the machine ledger we can identify maintenance periods for individual components down to ‘O’ rings,” says Stephenson. “When we have a failure on a machine, we analyse the breakdown and identify the failed component. We can look at the maintenance cycle of that component or we do a root cause analysis of why it failed. This can a) improve the life of the component and b) if necessary increase the frequency of the maintenance cycle.

It shows which component has broken, at what time and what we’ve done to fix it.”

The system allows you to build a full maintenance schedule for individual components & identify where the breakdown has come from.

The machine ledger was copied from CNH in Antwerp – Basildon had its own but Antwerp’s was slightly better,

Score 8-10 in 2006

New Holland are still the benchmark for this size tractor

Score 8-10 in 2008

Score 8-10 in 2011

an example of trans-site learning. The ledgers are on the shop floor next to where the machines are working, and is repeated throughout the factory.

“As a result of this we’ve been able to achieve zero breakdowns on our AA class machines due to lack of maintenance. Any breakdowns that occur will now be due to an outside factor.”

New Holland Agriculture UK at a glance Headcount

1,000 total, 650 in manufacturing

Site area

40ha (about 100 acres)

Output (units)

2012 – 26,000 (forecast) 2011 – 21,000 2009 – 15,000

Production rate

One tractor manufactured every four mins

Exports

92% to 120 markets

Internal audits (by Fiat group)

Two per year

Customer satisfaction

2006: 64%, 2011: 82%

Manufacturing hours per tractor

25 hours

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The complexity and significance of electronics within Agriculture and Construction vehicles is rapidly increasing. This demands a Diagnostic Test/Quality System capable of keeping pace and Actemium Final Assembly Systems are proud to be a chosen partner for CNH. With Test Systems now implemented in 6 separate production facilities, located in 4 different countries, Actemium are integral to the manufacturing process of CNH at group level and look forward to this partnership not only continuing but expanding on a long term, worldwide basis.

Our No.1 customer is a happy customer “To date they have been an extremely professional and competent company with very good customer support” Ben Clements, Manufacturing Engineering Manager, CNH, Basildon, UK (August 2012)

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The maximum benefit to CNH as a Manufacturer is Software Engineering paid for only once!

Common systems are currently implemented across multiple facilities providing the most cost effective, flexible & risk free solutions possible.

“During the past 2.5 years of working with Actemium as a partner I have experienced them to be a 100% reliable, very professional company that is willing to walk the extra mile to fulfil customer needs. The products are state of the art and I appreciate the excellent service and short response time, which is necessary to keep an automotive production facility like ours up and running” Daniel Kaltofen, Manufacturing Engineering Manager, CNH, St.Valentin, Austria (August 2012)

+44 (0) 121 250 6000

The mission of Actemium is to help its European industrial clients to modernise and improve the performance of their production facilities.

Final Assembly Systems benefits from being part of the Actemium brand and is one of 110 Business Units across Europe with 5,500 employees.

Continuous investment and product development means we are able to support vehicle manufacturers with the latest technology providing reliable, high quality test systems.

At the heart of the CNH system is Stratus6 a fully networked & scalable Actemium software solution specifically engineered to meet the demands of today’s production environment.

Actemium services to CNH are listed opposite for reference. Numerous other OEM’s also benefit from Stratus6 systems, we are a proven, experienced and trusted partner to many within the Automotive Industry .

www.actemium.co.uk/fas

• Engine data capture • End of line programming/ configuration • Fault code read/clear • Parts & Accessories programming • Pre-delivery inspection • ABS Dynamic Brake Test • Rolling road master control • Guided rectification

• DC Tooling control/ interface • Fluid fill interface • Pick to light • Full data traceability • Web based results reporting (real time) • Interface to factory build control/quality systems • Remote system access • SLA Support Contract

Factory of the month New Holland Agriculture UK

Early Equipment Management – EEM Early Product Management – EPM EEM and EPM are encouraging Basildon to look at the overall layout of the factory and evaluate how both the plant and the vehicle itself could be redesigned.

Could they use less nuts and bolts in this vehicle by examining the design architecture of the vehicle from the perspective of the shop floor?

Colin Larkin has spoken to the chief engineer of one of the products about the merits of EPM. “He is finally agreeing with me that we can go to the highest level of commonality and take a lot of the complexity [of the vehicle] away in the next two to three iterations of the product.”

Basildon recently stripped down a competitor’s product side-by-side with one of their own, involving shop floor operators, not design engineers.

“We’re getting bottom up ideas which are probably outweighing some of the ideas we’re getting from our design engineers,” says Stephenson.

A 20 per cent reduction in non-value added activity in a virgin area was, in the early days, a very difficult task. Today that’s almost peanuts – we’re regularly getting 25% to 30% Dean Stephenson, Material Handling Manager “We’ve done reverse engineering before with design engineers, but it’s the first time we’ve used shop floor guys with a competitor’s product.”

Larkin adds that a design engineer might physically assemble and reassemble a product a few times, while a shop floor operative does this 127 times a day.

“It is easy for the manufacturing guys to say a design is suboptimal, but you have to then offer an improvement. We are not criticising the design per se, but we are trying to evaluate the waste that the design is causing – the cost that has gone into the product as a result of that design.”

Rumour has it No.10 nearly called off the trip to Basildon because the factory was doing too well to be representative of the ‘current status’ of UK manufacturing.

Designing a bolt that is 20mm shorter can use less packaging, improve logistics, perhaps use less labour and perhaps other benefits. The engineers are starting to sit up and listen to the shop floor.

“WCM is certainly promoting more links between the shop floor, the design team and head office,” says Colin Larkin.

Basildon factory tour – Additional features in manufacturing Room for improvement

Automated skids The dry line – the transmission and rear axle – is loaded onto an AVG skid (installed in 2002). The skids are selfdriven using software that traces a wire in the floor This transports it to the next workstation which assembles the engines to the transmission in one of two cells. The half-assembled chassis enters the next cell to have its front axle fitted. When fitted the chassis drives itself to join the main assembly line for fitting.

The skid looks like it is part of a bigger automation programme, but it is pre-WCM. “It’s clever and it looks good, but would we do it today? Absolutely not,” says Colin Larkin emphatically.

He would prefer to use human resource to pull these parts to each station, because the skids are slow – single speed – and inflexible. “The workforce there is waiting for material to arrive. Human labour can up the pace and it would arrive much quicker.

“When it’s the right loss to attack, we will dispose of them but it’s not the biggest loss now.”

Paint line The paint line, installed in 2000, uses two robots to paint all the tractors a uniform black. Product variation is large with 138 variants of the basic tractor body, so more than 100 software programmes control different spray patterns.

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MES

Manufacturing Execution Systems

So you think you don’t need an MES?

Contact: sales@actemium.co.uk

Tomorrow’s success is in today’s data

+44 (0) 121 250 6000

Factory of the month New Holland Agriculture UK

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The fully assembled tractor goes to an area to be started up. Software is loaded into the transmission and gearbox. It performs a road test on a rolling road to do standard engine and suspension tests for about one hour.

Basildon has invested £1.2 million into a new rolling road test area. Using software supplied by Actemium, this will collect data that the existing system can’t gather that will help quality improvements around the production line.

There is no engine machine shop at Basildon – all the parts are delivered and assembled. “About four years ago it was a long term strategic decision to close the engine facility here and open it in Italy.”

Incident frequency index IFI

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Testing – New rolling road

Key Performance & Key Activity Indicators

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The tractor is delivered to the pre-paint line by the AVG, hung on chains and travels around the booth via about 20 work stations. All bare metal surfaces are painted before assembly. A tractor is charged with static electricity, so as the robot sprays the paint, the tractor draws the paint towards it.

“This area is about 10% WCM deployed; there are lots of losses to attack,” says Larkin. “Soon this area will be the main focus of WCM.” He points out an example of Visual Management: foot markers for taking pressure gauge readings.

The operator has to stand here to read the gauge accurately; if it’s in the green, it’s OK. “That is an example of the Autonomous Maintenance pillar doing very good visual management.”

Knowledge Centre – Training packages Basildon has different WCM training stations around the plant, and a Knowledge Centre, built to deliver tailormade pillar training packages. Each pillar has a training package and for each tool inside the pillar there are training instructions.

Employees from the shop floor do a 15-minute Powerpoint training session with a short test at the end, twice a week. “Its theoretical training, on the shop floor, in short sharp sessions – a good way to upgrade shop floor skills,” says Larkin. “We’re looking to get more people through it.”

MTS – Manufacturing Training System MTS is an area where instruction is given on how a tractor is assembled and, using a prototype tractor. Workers fit parts to it and learn to fine tune the process before they do it for real in a full production environment.

Training is focused on the areas with the most losses, says Larkin.

“This creates quality issues that may potentially happen in production. It’s especially important with new guys to reveal these losses.”

Basildon has analysed its assembly lines and is considering major factory reconfiguration to reduce line length and production time

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Factory of the month New Holland Agriculture UK

People and culture change Basildon has done a lot of BIT – NVQ Business Improvement Training – with the help of sector skills council Semta and delivered by Pera, a leading provider of vocational training in the UK. At first the benefits to anyone were unclear, says Mr Larkin. “As we’ve rolled the standards around the plant you can see that people have bought into it much easier because they understand from the trainer what we’re trying to achieve.”

As with any root and branch lean manufacturing programme, true results only prosper when there is buy-in from all employees. This is happening, the senior management says. Basildon has developed its own people development methodology. Green belt and black belt lean six sigma is provided to those who want the professional development, and each of the 10 pillars has a pillar leader.

“We report to people on the savings they implement compared with their salary, and there is a bonus scheme linked to savings realised,” says Larkin.

“We want people to be motivated by the job but this incentive provides real clarity on the relevance of WCM.” But management has little tolerance for flimsy projects. “Every project has to start with a justification based on the cost savings it will achieve,” says Stephenson. “Why? I’m not interested in hearing it unless there is one.”

Apprenticeships Basildon went 19-years without an apprenticeship scheme. In 2011, it took on eight apprentices and another four in 2012.

Between Semta, Essex County Council and Prospects College, a training provider based in South Essex who delivers the scheme, the apprentices are 50% funded.

“We have deep knowledge of how to work on a piece of equipment, but conveying that in formal training is a different skill, which we’re trying to learn.” The gap that these three have revealed needs to be resolved in the next year, says Larkin.

One of the main benefits of apprentices is succession planning.

“Every year, the number of candidates for management roles gets thinner,” says Larkin. “Manufacturing has not been a viable employment choice for years, so there is not the pipeline of

Where we could not see those wastes in early days, through doggedly attacking wastes we’re exposing further wastes. That’s why we’ve been able to achieve eight per cent [cost saving] targets Dean Stephenson, Material Handling Manager

talent,” adds Stephenson. The apprentices is one route, while interns is another. CNH UK has looked at supporting the academy school model in Essex. It comes back to WCM: “What is the benefit and cost? Right now the benefit is not clear to us.”

Group behaviour – Sharing best practice The plants at CNH are engaged in healthy competition on a range of KPIs. At the end of December 2011, 54 Fiat Industrial group plants were involved in the WCM programme – 30 CNH, six FPT Industrial and 18 Iveco plants. Of these plants, eight sites – two CNH, two FPT

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Sews Cabind S.p.A “S

WS WAY” is Sumitomo Wiring Systems Ltd Group’s Principles of Action. From its foundation in 1590 as Sumitomo, in 1917 as SWS, the Group has followed the dictum, “developing better manufacturing by developing better people”.

This principle guides us every day, in each of our production facilities, including today’s global operations.

Key factor for customers’ satisfaction are reliability and flexibility, from design stage to global supply system. “Quality and safety first” too is the very foundation of SWS, leading us to create better products: “PikaPika” (shining) hearts and actions, technologies, and facilities, which

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will lead to the creation of “PikaPika” products. The wire-harnesses we manufacture are vital automobile components, playing the role of the automobile’s nerves and veins.

SEWS Cabind co-operation with CNH begun in 1998 and actually covers all CNH product line, including tractors, agricultural excavators, construction, serving all major plants in Europe from our plants in Morocco and Poland and our logistics poles in Italy, Poland and Spain.

CNH UK represents one of the most important clients of the Group.

Despite last few years severe market, CNH growth has been confirmed, and SEWS extended its cooperation to the launch of new

projects, such as all range APH and CCM, CVT and T4 versions, APL Specialty, Utility Light and Medium. This last period, has also been the opportunity to strengthen and improve some vital processes, having SEWS joined Fiat Group WCM program, that actually involves our plants, with opportunity to accelerate actual kaizen actions, merging SWS principles with WCM.

Published in association with: Sews cabind s.p.a Tel: +39 011 40106611 Email: info@sews-cabind.it Web: www.sews-cabind.it

Factory of the month New Holland Agriculture UK

Industrial and four Iveco – gained the Bronze level and two sites (Bourbon Lancy of FPT Industrial and Valladolid of Iveco) achieved the Silver level. Basildon was having an audit for the WCM Bronze award in late October.

With such competition, why would you share your best practice tips?

“We’re encouraged to share, and we’re quite happy to share our good ideas and vice versa,” says Larkin. “If

There are parts where WCM has yet to be implemented. Until we get that as standard right across the plant, we know we’ve still got huge opportunities Colin Larkin, Plant Manager

we believe it to be a better practice than the incumbent, we can upload it to a European server. Central group will evaluate and verify it as a best practice – others then feel free to copy it. There is a portfolio of deemed best practices within the group.”

Basildon’s Customer Centre and New Display Area

By May 2011, CNH UK realised that its customers were recognising the improvements in the plant. A purposebuilt Customer Centre, paid for by the CNH group, was commissioned.

Everyone on the shop floor was involved. “We showed to the staff the visitor presentation, and explained that the customers would see them on the lines and they had seen the same presentation, so they could apply the video message to their jobs, says Larkin. “Also it recapped a lot of the improvements we’d made in last two years, which can be easy to forget.”

“Linking the workers to visitors really bought everyone into the new customer centre, explaining to them we would be bringing 7,000 visitors a year through the plant,” says Stephenson. The visitors split is 80% farmers and dealers, 20% schools, suppliers and others.

80% of visitors to Basidoln’s Customer Centre are farmers and dealers.

Corporate Social Responsibility The Basildon plant helps sponsor employees’ children’s football and rugby teams, and boxing clubs. Some of the employees are encouraged to run these competitions. There is an internal 5-a-side and 6-a-side football competition.

Some of the management are members of a local golf society and play at different venues around the county.

There is a fishing club that runs fishing competitions.

“We’re sponsoring bits of these all the time, year round,” says Larkin.

The plant organises a family visit every 12-24 months.

Recently a local church asked if they could visit the plant the same day as a production Saturday was scheduled.

Basildon hosted did the tour and provided all the hospitality.

“Now we’re planning the next time there is a production Saturday to allow employees to bring their families to visit.”

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Innovation in partnership

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nnovative transport solutions. Technically always a step ahead.

Customised transport for major clients such as CNH. That is our goal. Years of experience, technical insight, knowledge about market demands and great commitment. Qualities which provide De Rooy a leading position throughout Europe. Owed to the ongoing efforts in the field of Research and Development. Innovative transportation methods, developed and built in-house. Ongoing close interaction with our customers to obtain best business practices.

We are proud to distribute for the leading Truck and Tractor manufacturers around the world. Companies like CNH. Our long-term partnership lasts for more than 10 years. Next to the distribution of tractor units to several European countries, De Rooy also provides dedicated inbound transport of tractor cabins to the assembly-lines of CNH in the UK and Austria. Tailor made trucks guarantee a maximum number of cabs being loaded and those same trucks are used for the outbound distribution of complete built units as well. Delivered just in time. A wide network and our own planning department contributes to this most efficient way of transportation.

Key figures · Market leader in transport logistics of truck & bus chassis and agricultural tractors · Handling, storage and distribution of >220,000 units a year · 500 Owned trucks, 452.000 m2 storage areas · European network with own compounds · Service scope: Europe, GOS and Middle East · Warehousing and distribution of white goods within the BeNeLux

Innovation in sports One of the great passions of the De Rooy family is participating in the DAKAR race for more than 30 years. A rally where we run along the top of truck racing because of our innovative techniques and with success! Gerard de Rooy won the DAKAR race this year.

De Rooy Holding B.V. Ekkersrijt 2037 5692 BB Son & Breugel The Netherlands

T (+31) 0499 485 111 F (+31) 0499 485 201 E info@derooy.com W www.derooy.com

Factory of the month New Holland Agriculture UK

Is Saturday work popular? “It’s voluntary and pay is time-and-a-half. But management gets no extra, we make the sacrifice for the love of the job,” Stephenson adds with a smile.

Conclusion – What can CNH UK teach others?

Manufacturing at New Holland Agriculture comes down to the constant, disciplined attacking of losses. Management constantly have internal meetings with, for example, quality or engineering who are told to make sure the focus of their exercise is to attack losses.

We are pushing material up the line by delivering it in kits. The fewer processes on the production line in total the better Colin Larkin, Plant Manager

EEM and EOM are allowing shop floor staff to drive factory and product redesigns at Basildon. (p101)

“I go to many council meetings, the first thing I always say is: “Do you understand what your losses are? Do you know where you are spending but also wasting your money?” says Colin Larkin. “You need to pick projects based on the biggest losses. Do you have a CI policy? Can you show a pareto of those losses? Often, they can’t.”

Where does Basildon go for best practice? Colin and other managers have visited the Olympic Park to study how they’ve made the people and material flow, “which has been done very well”. Today, factory visits are common but it is rare they discover a game-changing idea. “Five years ago we had consultants in because the [then] plant manager wanted to implement standardized work,” Stephenson says.

“Today we find ourselves being more mentors and coaches to those within and outside the group. We are pretty good at what we’re doing.”

From 2002 to 2005 the long term future of Basildon was uncertain due to quality and delivery issues. “But as we have adapted and become more flexible and much leaner, the threat appears to be far less, and allowing for some substantial investments it suggests we have a long term future,” says Larkin.

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SignLanguage Manufacturers are continually searching for innovation that sticks, for MTM Labels that is only too literal as it continues to make labels and signs for factories and machinery that stay in place and in good condition throughout the design life.

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abels and aluminium nameplates are often the last thing on people’s minds but manufacturers are often caught in situations where they are unable to send out a product because of a missing label needed to meet safety or other mandatory requirements, delaying delivery, which can often have a financial penalty.

MTM Labels, which makes bespoke labels and nameplates, produces safety warning labels for construction equipment and other machinery.

Seeing signs MTM Labels has the expertise to choose the correct materials and inks that will create a metal or plastic sign to meet a range of temperature requirements, from use in cold storage rooms (-40°C) to equipment operating at well above 100°C. MTM Labels also supplies tactile labels with raised lettering or braille where information is required for the blind or partially sighted.

“If colours fade then you could be losing vital safety information and putting yourself in a situation where you can be litigated against if an accident occurs,” says MTM’s managing director Ian Greenaway.

“People frequently have a problem with labels falling off equipment, which is sometimes down to bad manufacturing but more often down to incorrect specification of materials and sometimes poor storage or application by the customer but machines or vehicles need to meet international standards that require potential hazards to users to be highlighted.”

MTM’s status as an underwriters laboratory authorised label supplier means that customers exporting their equipment to the United States or Canada meet all the safety requirements if the UL logo appears on a label fitted to your equipment.

Selling the brand The sign maker has set up a just in time delivery service to help manufacturers reduce inventory

MTM Labels focuses on making products that last to ensure positive brand reputations

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A lot of bespoke signs are there for safety purposes but it is also vital for branding. I’ve often clocked a battered old digger sitting stationary in a field with its signs fading away following years of outdoor use. The safety colours (red, orange and yellow) are the three that fade the most in direct sunlight, which can reflect on the brand and diminish safety information. MTM ensures that long life inks are used for all outdoor equipment to avoid fading problems.

“A lot of the labelling is about selling the brand, if it looks good it makes it look like a Mercedes rather than an old banger,” comments Mr Greenaway, adding that poor quality labels can really let a product brand down.

“Whether it’s a road sweeper, light fitting, a digger or a refuse truck, it looks tacky if the labels are falling off or fading. People think ‘if the exterior looks like that then what is the equipment inside like.”

Signage and labels MTM Products

MTM supplies most of the major emergency lighting companies in the UK, but the difficulty is that the slightest imperfection shows up when lit up.

MTM has many years experience ensuring that their products are free of imperfections and enhance the perception of a quality product.

Sign design The Chesterfield firm can produce anything from a one-off to a 10,000 run and offers stock management solutions that ease cash flow for customers.

“Sales people love to get that 10,000 order and give a discount for doing it,” says Greenaway. “That was the conventional way of doing trade but it ties up a lot of factory capacity making a batch that the customer doesn’t need 90% of for many months. The customer is tying up cash in stock so we ask our customers what their annual demand is for a particular label and manage what batch quantity to put through to the factory so that there is always stock available.”

MTM also kits parts so that a customer has a ready-made pack of labels and signs (on a sheet or in a bag) to fit to each product, saving crucial labour time.

“Operators don’t have to keep collecting labels from different bins, it all goes out as a kit to the guy who is going to put them on the machine or vehicle,” says Ian Greenaway.

A lot of the labelling is about selling the brand, if it looks good it makes it look like a Mercedes rather than an old banger Ian Greenaway, Managing Director, MTM Labels

The ambitious SME, which supplies most of the major UK emergency lighting manufacturers, is adding value to win more business by offering free technical advice and working with the customer’s engineers. Greenaway notes how the company prides itself on its innovation and how it has been able to “value engineer” products to reduce material wastage. This is not only good for the environment, but also the customer as it reduces costs to provide a competitive price. @thomasmoore88

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Kane Wilson took a tooling apprenticeship and is now up for an industry award

Moulding a better solution Tom Moore talks strategy with Richard Brown, operations director at injection moulding firm Hi-Technology Group, which he says hasn’t seen a recession as it changes the world from metal to plastic one part at a time.

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ou will find plastic parts from precision injection moulding firm Hi-Technology Group in a whole range of products, from the buttons former caretaker Brian Pressnell might use to navigate his way up the stairs in the Stannah stairlift he purchased as he struggles to move around with the vigour he once had, to the fire alarms Natalie Brunt may rarely notice at her clothing store in Clapham. They one day save her life.

Business is booming, with a busy shop floor and a brand-spanking new facility in Slovakia. This is a business that operations director Richard Brown claims “hasn’t seen a recession,” a statement that many will be envious of. While many manufacturers have had to watch capital expenditure with a pair of scissors in hand, Hi-Technology

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Group is in a position where it is contemplating opening another factory in the future just two years after it set up a manufacturing site in Eastern Europe and despite being an SME. ‘Total Concept Manufacturing,’ is how Mr Brown describes the company’s offering. Its complete injection moulding solution is able to take a product from concept to volume manufacture, and is an offering that is proving popular.

Turnover grew by 18% two years ago, 10% during 2011/12 and it is expected that this figure will be repeated again this year.

While many companies are able to reel off impressive growth figures, what differentiates Hi-Technology Group from the rest is that it isn’t a rebound from a recessionary slump, but a continuous climb since 2006, a time when companies were full of confidence and the word ‘cuts’, gathered dust in the English dictionary.

Smashing mirrors Growth is great but Brown is adamant that turnover is vanity. His aim is to

Injection moulding Hi-Technology Group

make sure that expansion is managed properly and that the company finds new reasons for growth.

The company started off in one industrial unit in Portsmouth during the 80s but quickly grew, taking up residence in Waterlooville, Hampshire in 1996. With the company’s expansion into Slovakia and plans in place for an additional site to further support exports, possibly in India, Brown describes its HQ as a cascade of excellence.

Hi-Technology has sought to drive up skill levels within the business, carrying out a comprehensive profile of its business. Brown states that “if you fail to train you’re planning to fail,” a way of thinking that resulted in the company training everyone in the business up to NVQ level 2, and 15 people through to level 3 in Business Improvement Techniques and Performing Manufacturing Operations. Brown, who has been with the company since 1997, rejects recent criticism of NVQ level training, and argues that it a valuable qualification structure that boosts productivity and understanding on the shop floor.

“At the level of the shop floor, Business Improvement Techniques (BITS) and Performing Manufacturing Operations (PMOS) are ideal. It helps people think about what they are doing,” he says. The accumulation of skills throughout the business resulted in Hi-Technology winning the People and Skills category at The Manufacturer of the Year Awards in 2011.

Looking your best Looking to the future, Brown, a member of sector skills council committee at Cogent (looking after the chemicals, nuclear, oil and gas, petroleum and polymers sectors), is now pursuing social media training. He explains, “The way that the business manages social media is important and that includes employees. We don’t want an employee using Facebook in a way that is derogatory to the business. It’s about image.”

The company has disaster recovery planning in place which includes training people to talk to the press. He’s found that a number of young employees have been eager to learn new skills and is optimistic that the company’s planning for the future is in a better state than it was a few years ago. “Three years ago, over 75% of our workforce was over 40,” he notes. “The people around this table [gesturing

to his senior colleagues] aren’t getting any younger and we have to be looking at succession planning.

We are actively doing this to improve the longevity of the business and security of tenure for our staff.”

Brown adds: “We have driven that age profile down, working with Bournemouth University to bring undergraduates into our design teams.

Students arrive on placements for their third year of their degree course and we have recruited from that as it gives us a chance to try before you buy.”

The people around this table aren’t getting any younger and we have to be looking at succession planning Richard Brown, Operations Director

Watering a dry seabed for skills The company has three managers (out of seven) under 30 years-old, something that Brown admits was very rare a few years back. He asserts, “It’s too easy to lose focus planning for future as companies are too busy trying to survive.”

The management team at Hi-Technology is hopeful that the company will continue to be reinvigorated by a constant stream of apprentices.

There are five apprentices going through business in Waterlooville at the moment, including Kane Wilson who has just been nominated for apprentice of year by the Plastics Industry Awards. The 22 year-old has just completed a four-year apprenticeship in the company’s tooling arm is now helping to mentor a new apprentice which Hi-Technology has just taken on in that area.

“Average age in tooling is 55, they’re old school,” says Roger May, quality manager.

“We brought a youngster in with a bunch of 55

Hi-Technology Group at a glance Established

1983

Ownership

Privately-owned

Products and services An injection moulding firm that manufactures almost 3,000 components and processes almost 500 thermoplastic grades of material Revenue

£10m in 2011/12

Sites

Headquarters in Waterlooville, Hampshire. Hi-Technology Mouldings Slovakia based in Kosice

Key Markets

The UK and Europe

Workforce

134 employees in Hampshire and 17 in Slovakia

Interesting fact

Hi-Technology Group won The 2011 Manufacturer of the Year Award in the People and Skills category. It achieved similar success back in 2006 when it beat off competition to win ICT in Action at The Manufacturer’s annual awards.

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Injection moulding Hi-Technology Group

year-olds and he’s excelled in an environment where a lot of young people would just go into their shell.”

May is disappointed that there aren’t more Kane Wilsons. “Engineering isn’t a preferred career choice for a lot of people despite adding a lot of value for the country,” he says. “Schools don’t encourage people to go into engineering because academia need people going through education to justify their costs.

It’s about bums on seats. It has become compulsory to continue education up to the age of 18. Young people coerced into higher education.”

The proud father of three describes how he couldn’t wait to get out of school and look for an apprenticeship, constructing a successful career in engineering that recently saw him take a key role in helping the company to gain a stack of accreditations, including the ISO 9001 (quality management systems) and ISO 14001 (environmental management system), both of which were achieved in 2011.

“Apprenticeships are something that young people no longer want to do so they continue along the conveyor belt of education as they think it is the only way to a good job,” he comments.

Brown, who obtained the first of the many letters after his name from the Open University, traces the decline in industrial skills in the UK back 20 years. “When we lost our technical colleges and polytechnics we lost the grounding for our engineers. It is quite a challenge to ensure business has the right skills level to go forward as training infrastructure in the UK for industry isn’t as good as it was. Small companies can’t always afford the training and haven’t got the time to put into it.”

Going east For an SME, Hi-Technology’s leap into Eastern Europe is impressive and Brown is predicting that the move will support further growth as it offers the same quality – due to the company’s cascading of technology and skills from the UK – but at with 25% knocked off the cost. “Our Waterlooville site is our technical centre,” remarks Brown. “We can develop products here local to our customers’ engineers and move them to another plant.”

It is a combination that offers the best of both worlds and the cost benefit of Slovakian manufacturing is increasing

Hi-Technology Group has seen continuous growth since 2006

Apprenticeships are something that young people no longer want to do so they continue along the conveyor belt of education as they think it is the only way to a good job Roger May, Quality Manager

as the euro continues to fall in value. Sixty per cent of the goods produced there are sold within the euro zone at a time when sales into Western Europe are diminishing for a great deal of UK manufacturers.

Hi-Technology is well positioned with its new facility, as the pound’s strength against the dollar makes it harder for British companies to be competitive in a region that has long been the UK’s biggest customer.

For this reason it made sense to move the company’s European exports to Slovakia.

“We’re attracting new work from Europe and UK. As long as we are attracting the right work that is the important thing [it doesn’t matter where it comes from]. You can be a fool and go for the vanity of turnover but your sanity is the bottom line and that’s what we focus on,” says Brown.

The Hampshire-based firm spent £250,000, substantial amount for a company of its size, but production is fast increasing despite the plant opening in 2007 – slap bang at the start of the recession. “If you looked at it, it wouldn’t be seen as the right business decision during the recession, however, we believe you have to invest during the recession in your people, your training for when that ends because you’ve got to be strong coming out of it,” asserts Brown.

The language of the business is English but the decision was taken for the new site to be run solely by a Slovakian workforce from day one.

Brown explains, “If you’re going to set up a plant in another country you’ve got to have the confidence that the people there will be able to do the job without some ex-pat there telling them what to do and that’s the decision we made early on.”

Cost watching Although the company has made a number of savings to its manufacturing process, which runs with 25 to 250 tonne machines and processes over 500 different thermoplastic grades of material, HiTechnology invests in eliminating costs during the design stage.

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seen a quality reduction. With an ability to put 20% regrind into some products without altering its properties, there are huge savings to be made with some plastics costing in excess of £3.50 a kilo.

Designers at Hi-Technology are seeking to eliminate some of these costs by minimising wall sections (how thick the parts are). As well as reducing the amount of raw materials needed on each part, thinner walls means that you can run the machine faster, so use less power to produce a product and slash cycle times.

The company has improved tool design to speed up its manufacturing process

“We are happy to do training courses for our customers on design for manufacture in polymer technology because a lot of training has gone away from the industry. If we can get our customers understanding best practice then that lowers the cost of manufacture and benefits everyone,” says Brown, who chairs the judging panel for the Design Innovation award in Plastics Competition and is a judge for the Plastic Industry Awards. “Once a product has been designed it is very difficult to get the cost out so that’s the ethos we drive.”

The company has not lost focus on cost as a market driver, despite its commitment to quality. It attempts to cut down on material usage and cycle times at the earliest point possible. Good tool design can help in achieving significant efficiencies. Hi-Technology found that 15 new heat insert machines took three and a half minutes off production time making Medical Housings at the press of a button. This is an improvement that rapidly multiplies when you consider the units produced.

Grinding out results The company is winning a lot of business on the basis of its cost offering. It secured a recent contract with London Underground after it quoted a 75% cheaper price than the current supplier by showing that the fuse holder needed alongside the tracks could be made out of polymer instead of metal. Brown is optimistic that there are still a number of opportunities to change metal parts into plastic ones.

Cutting its material usage, Hi-Technology has sought to minimise runner size so that cut-offs are reduced. It now makes a number of products without a feed item to inject plastic into the moulding and is looking to innovate its processes so that it can improve on the number of products that can be made in this way. A product made for lorry wheels, which visually demonstrates whether the nuts have or haven’t moved (pointing together if the nut is study but apart if it is loose), is made in this way. There is no residue of plastic as the material stops flowing at a certain point, meaning that there is no manufacturing waste involved in the process.

May is pushing to educate customers about using regranulated plastic in their parts. At present, engineers aren’t keen on regranulation as they do all their calculations on virgin material but there are certified percentages of reground plastics that can be used without altering quality. “Customers have an aversion to it and designers have an inherent fear of anything other than virgin material. If we can educate the customer then we will reduce both our costs.”

May states that the company has achieved cost reductions with a number of customers by making use of recycled material and has never

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Engineering isn’t a preferred career choice for a lot of people despite adding a lot of value for the country Roger May, Quality Manager

Maintaining a balance Despite revenue rising from £7m to £11m in just five years, this doesn’t mean that Hi-Technology hasn’t suffered from declines in some areas of its business, the swathes cut in defence budgets have affected many manufacturers. At Hi-Technology however, these holes have been filled with fresh business due to a commandeering strategy that constantly analyses opportunities and threats within the market. Strategic diversification has been key to the company’s continued profitability.

The defence sector, which made up 18% of the company’s revenue in 2010, now accounts for just 11% of business.

With the threat of fire not disappearing any time soon – Hi-Technology worked to secure a contract with a nearby manufacturer that makes alarms. This new contract has contributed to the company’s growth in this market with security and alarm items rising from 3% to 11% of its portfolio.

A similar downward trend has taken place in the marine sector, which used to be its largest source of contracts accounting for around 50% of all business on 2007. It contributed just 3% of the company’s revenue last year.

“We try to keep a balance between the sectors,” says Brown. “When we

Injection moulding Hi-Technology Group

see that revenues have dropped in one sector but we are attracting new work in other areas, we will change where input goes into the business so that we are operating and innovating in the right markets.”

One notable absence is the lack of work within the automotive sector. “The company has never operated in the motor industry. We’ve chosen not to,” states Brown. “We feel that it is a very demanding industry and automotive buyers operate with a fixed price in year one with cost reduction going forward. We’re working in an industry where we are a high power user and power costs are increasing. We use polymers and polymer prices have increased. We’ve seen a lot of casualties in this industry because of these deals.”

The company is benefiting from booming orders for commercial aircraft seating because of increasing travel in the Far East with its manufacture of aeroplane seatbelts.

Hi-Technology is winning work after a softening of the order book at the end of 2011 that was quickly followed by the busiest three months in the history of the company.

Brown maintains that customers are struggling to see what is happening, which means that it only has a two to three month vision. Hi-Technology is adapting to this by becoming more flexible, Brown relaying how he had just received a call from a customer needing extra product by the next day, which was accepted. This order doubled demand within a matter of minutes, with an additional 5,000 units needs in boxes by the following day, additional staff were quickly organised to work the night shift and the consignment was sent on time and in full.

Ion science Customers want shorter lead times and Hi-Technology has utilised its Infor Visual enterprise resource planning (ERP) software to map out its own orders so that the whole supply chain is in sync. A lot of people with ERP systems don’t use them to the full extent that they can do, but Hi-Technology is putting the effort into getting the data it needs to improve the business.

“It’s the heart of the business,” says Brown. “All the data is on there. Without Infor Visual this company would grind to a halt as it tells us when we need to get material through the door, where the customer demand is and what’s going on in the factory.”

It has just installed a new software package in July to sit alongside its ERP software called Infor Ion, which enables data on the move. The move is set to improve flexibility – allowing people to access date in the presence of customers – so that production changes can be made there and then. “We’re all busy people, we all have our blackberries and iPhones, now we can now we can see where we are anywhere anytime,” Brown remarks.

When Hi-Technology went out to select an IT partner, it wanted to find a vendor that could grow alongside the business and it hasn’t been disappointed. Brown explains, “We looked at the system and said this is how it works. We asked ourselves how we had to change to use the system and not how the system had to change for us. We said from day one that we wouldn’t make any modifications. We know it’s going to work when there’s an upgrade, if you make bespoke changes you’re going to struggle.”

Electric feel With electricity ranking as the biggest cost, HiTechnology has implemented a number of projects to keep power usage at the same level it was two years ago, despite making more product. It has set up a shutdown procedure, fighting against the tide of industry where it remains standard practice to leave machines on waiting temperature. Employees use Infor planning to spot downtime periods of more than eight hours, with those machines with long periods of downtime being switched off.

Leaving machines on standby makes it easier to restart and change material but the extra bit of work to shut it down outweighs that effort through the energy saving.

The company carried out an energy profile and put 85 sensors on its machines to better understand their power usage. It managed to obtain a £250,000 grant from the Carbon Trust to replace aging mould press machines with more efficient models. May notes, “Whatever you do to protect the environment generally has a positive effect on the bottom line, it works both ways.”

Students arrive on placements for their third year of their degree course and we have recruited from that as it gives us a chance to try before you buy Richard Brown, Operations Director

Manufacturer of the Year To ensure that the company maximises its investment there are a number of new training schemes taking place around the site, continuing the company’s reputation in this area after walking away with the Manufacturer of the Year Award in the People & Skills category.

Hi-Technology has again entered the awards, with Brown using it as a tool to drive up standards.

“It’s a benchmarking exercise for us. We look for awards where you will be judged, The Manufacturer’s annual awards have a good judging panel and that’s what we want. We want feedback as it’s too easy to sit back in your bubble thinking you’re doing a wonderful job.”

The operations director’s driving style means that any bubbles of that kind will most definitely be popped. Exiting the building, dozens of industry awards line the walls. The company is almost as decorated as Team GB! With further growth predicted and a new factory on the horizon, Brown sums up Hi-Technology when he says that it has a big company mentality for an SME. @thomasmoore88

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Creform work stations have enabled big CI savings at Siemens Sudbury

A vital

force 118

When it comes to machines used in intensive care wards, there is absolutely no room for substandard products. A vital lifeline for many thousands of people, Siemens Point of Care (POC) machines are made in the UK and sit on hospital wards around the globe.

Medical devices Siemens Sudbury

T

he cream coloured machines may not be the prettiest gadget ever invented, but they are functional and, most importantly, reliable. It’s an efficiency which is ground into the manufacturing process through a visceral connection between employees and the end purpose of what they produce.

“Everyday everybody that works on this site knows that they have done something that will eventually contribute to saving somebody’s life. From the R&D department to our temporary workers, we all have the satisfaction in saying that we made something that is vital for the health of others,” says Paul McGarry, operations manager at the Sudbury site.

We can’t tell our customers what to do and we can’t guarantee that they will choose to recycle but we are giving them the opportunity Paul McGarry, Operations Manager

Siemens manufactures its POC machines at its three sites in Sudbury, Suffolk. The machines measure levels of blood gases, electrolytes, blood glucose and analyse urine samples for proteins and glucose. They often provide a vital early warning sign that something is not right in patients on intensive care wards.

A diagnosis that used to take hours in a laboratory can now be provided instantly right next to the patient.

The Sudbury workplace Nestled in the rural and picturesque countryside of Suffolk, Siemens employs 260 people over its three sites, which total 9,500sq m. Sudbury has only a small population of 20,000 and this makes Siemens one of the largest employers in the town.

Siemens’ manufacturing site is part of the history of Sudbury, with manufacturing taking place at its Northern Road site since 1972 although the company originated from Harlow Essex in 1939 when Evans Electroselenium was started. The site has

passed through various hands over the years until Siemens purchased it from Bayer in late 2006. Since then, Siemens has invested in the site and almost trebled its output.

In 2011 Neil Eardley was brought in as Managing Director. He had been working at Siemens in Congleton, a manufacturing facility that produces variable speed drives for production lines and baggage-handling systems, where he had successfully introduced lean management in 2003.

He says, “Sudbury was already a good business, but in a rapidly changing healthcare environment it needs to be a great business, something it has every opportunity of being.

Over the last eighteen months we have made a number of changes all aimed at driving productivity, quality and customer satisfaction.”

Production at Sudbury The largest part of the manufacturing undertaken at Sudbury is the production of its reagent pouches and cartridges.

These consumables make up 60% of the site’s total output.

On some machines Siemens has extended their commitment to continue manufacturing consumables and spares for up to seven years after they stop production of a particular model, which is good for customers but presents challenges when implementing changes and improvements to the manufacturing process.

Markets and demand The products manufactured at Sudbury go worldwide, so there are also many different specific country regulations to adhere to, such as the FDA in the US, ANVISA in Brazil and the ISO 13485 standard in the EU. But the strength of demand easily counteracts the difficulties this complexity and bureaucracy imposes. Siemens is looking forward to celebrating the landmark figure of 100,000 units of its urine analysis machine in November and it produced 1.5 million reagent pouches this year, up from 1.2 million in 2011. This has provided the means to run a staggering 40 million tests on its blood gas machines.

Sudbury’s nine key strategic themes: To drive a reactive to proactive culture To drive a mutually beneficial product portfolio Develop and embrace an NPI strategy Drive and achieve manufacturing excellence Develop a robust order fulfilment strategy Create a World Class image wow factor Develop a robust and dynamic supplier base Develop a simplified knowledge and information management Attract, retain and develop outstanding people

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Skar Precision Mouldings S

kar Precision Mouldings have been a trusted supplier to Siemens, Sudbury site for over 20 years, however to describe the relationship as ‘customer and supplier’ sells it short. Skar offers Siemens, and other medical sector customers a flexible service tailored to individual needs.

Manufacturing review meetings are conducted monthly between the two companies, where product quality, tooling, modifications and other relevant issues affecting supply are discussed, processed and completed. Skar also offer comprehensive technical and logistic support.

The partnership between the two companies embodies itself in other

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ways, for instance when experimenting with new purchasing systems and auditing procedures Siemens consistently go to Skar as a trusted and established supplier.

In addition to medical devices Skar Precision Mouldings services other industries including medical disposable, point of sale items, industrial components, hydraulic filtration & lighting.

Skar offer a complete injection moulding service, supporting their customers from concept to production of products and components. The relationships that Skar has developed with toolmakers around the world allow their customers to buy project managed, guaranteed, quality injection mould tools for less than it would

cost from many tool-making companies.

Skar have been delivering product to Siemens and their other customer’s day in day out for over 40 years; they have a pro-active quality department assuring their customers that regular deliveries are to a high standard.

Skar regularly invest keeping plant up to date, having state of the art measuring equipment and have recently gained ISO14001 to add to their existing ISO9001 accreditation they show their commitment to quality and the environment.

To discuss how Skar Precision Mouldings can help you please contact them on 01473 828000 or email them at sales@skar.co.uk

Medical devices Siemens Sudbury

A worldwide network of 51,000 skilled staff support delivery for Siemens Healthcare’s global customer base and the 260 employees at Sudbury are recognised as a critical part of this community. Investment in staff is wide ranging but always linked to the values of the business and the requirements it sees will be important in moving forward. Increasingly this means growing environmental awareness and business skills. Sudbury recently put six members of staff into a three month long training programme to become qualified environmentalists. The employees will work on the National Examination Board in Occupational Safety and Health course during their own time with Siemens providing weekly tutorial sessions.

Bob Cox, EHS manager at Siemens, says, “To be able to have six environmentalists trained on site with 260 staff is actually quite phenomenal.

You would normally be lucky to have one. This is testament to the culture of the company.”

New product introduction Three new products were introduced into manufacturing at Sudbury last year and the site supports its own in-house R&D team of 26 which works closely with the larger American team of 150.

“Previous owners have not always invested as much as they should have and we have gone five or six years without a new product coming out.

Siemens is not like that. They see R&D as a lifeline, they know it is the blood of the company so they continue to invest in new products,” says McGarry.

Environment and business strategy In a style synonymous with its German roots, Siemens’ company culture pursues efficiency in all walks. This includes energy usage and having achieved the highest level of health and safety – a five star accreditation and a sword of honour from the British Safety Council - Siemens has channelled its resources into becoming more energy efficient. According to Mr Cox, they picked the two areas where it would get ‘big hits’ – consumption and waste.

“We had to get people used to talking about environmental issues and engage people, just like we did ten years ago with health and safety,” says Cox. Siemens went right to the heart of the matter and asked the staff on site what they thought. They were given access to an online portal where they could make suggestions.

Each person was given an initial target of one environmental suggestion per year, which would be taken into consideration in his or her annual performance review.

But staff are far exceeding their target with an average of three suggestions per employee this year.

Each suggestion is noted and investigated to see if it is feasible. Cox says, “There have been hundreds

Siemens Sudbury has increased production 25% since 2004 but is using less electricity today

Siemens Sudbury at a glance Employees

260

Facilities

3

Floor area

9,500m2

Main activities

Major products manufactured

Tonometering and pouch filling Cartridge assembly and test Instrument final assembly and test Glass and membrane sensor assembly Liquid reagent production and filling RAPIDLab 1200 Systems RAPIDPoint 500 RAPIDPoint 400 RAPIDLab 1200 Sensors Reagent Pouches RAPIDPoint Cartridges & AQC DCA Vantage Clinitek Status

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of people making small individual contributions. Every suggestion is reviewed, gets answered and discussed. Obviously we have to run a business but we look at all the suggestions and if we can’t make the change, we explain why.”

But many of the suggestions have been implemented and reaped great rewards. Thanks to leveraging employee knowledge and engagement, total electricity usage has dropped from a peak of 2,450,000 kWH in 2007 to 1,900,000 kWH in 2012.

Simple solutions such as only using half the strip lights, installing light sensors and turning off computers at night are among the suggestions that have been implemented.

Cox says, “We are using less electricity now than we were in 2004, despite production increasing by twenty five per cent.”

When Siemens started to focus on environmental issues in 2007, it was sending 120 tonnes of waste to landfill each year. The plant then started recycling cardboard, metal and paper.

This brought the waste to landfill down to 60 tonnes in 2009.

After the instant success with the easy products, Siemens began to look at how it could further reduce on this waste going to landfill by recycling more difficult waste such as food packaging and plastics.

Today the cardboard for recycling is collected by a local social enterprise called Leading Lives for a waste to

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In 2011 the Sudbury site integrated with the Siemens group SAP ERP system (see p123)

energy initiative. The results of this partnership have been impressive. With a backdrop of increased productivity, last year Siemens sent under three tonnes to landfill – just 2% of what it was sending in 2007.

But Siemens is not only relying on its own efforts to reduce its environmental footprint and gain efficiency. It is also pushing out green expectations to its customers.

Late last month it became the first company in UK to use a new packaging called Stratocell RC, which unlike traditional foam packaging, is recyclable. It is made with 65% recycled content instead of 10% and is made from the waste produced when manufacturing other foam packaging, making it a clean material.

To be able to have six environmentalists trained on site with 260 staff is actually quite phenomenal.

You would normally be lucky to have one. This is testament to the culture of the company Bob Cox, EHS Manager “We can’t tell our customers what to do and we can’t guarantee that they will choose to recycle but we are giving them the opportunity,” says Mr McGarry.

The next step for Sudbury’s environmentalists will be analysing water usage more intensely and, further down the line on-site power generation investments will be considered.

Lean improvement The structure for Siemens’ approach to environmental improvement is taken largely from its approach to lean manufacturing and operations.

Medical devices Siemens Sudbury

Lean has been a core focus for the Sudbury business and the principles are well bedded in with the workforce.

This has not gone unnoticed by customers who are keen to share in the site’s lean success story: the histopathology department of Whipps Cross University Hospital identified Sudbury as a shining example of lean methodology and earlier this year they sent a team to tour the plant and learn how these lean processes could be applied to the NHS. Sudbury has always taken a positive approach to the implementation of lean – focussing on improvement rather than cost reduction and avoiding association with head count reduction where possible. One way it has achieved this is through maintaining a buffer of 40 temporary workers which can be flexed up or down dependant on demand, protecting the permanent workforce from this variation and allowing them to focus on and take pride in improvement without the fear that it will come back to haunt them.

The Sudbury site had a target to save €850,000 through continuous improvement and lean initiatives this year but, thanks to the efforts of a dedicated continuous improvement team and the general buy-in of the workforce, the site has in fact saved €2.5m.

One of the latest lean initiatives to give big returns involves Creform, a modular material handling system which looks like a giant set of Meccano.

The continuous improvement team has been busy designing and building tailored work stations from the Creform packages which are smaller, more efficient and can be adjusted to each individual workers’ specifications.

One controversial part of this Creform project has been the introduction of a standing policy.

Traditionally, workers sat at their stations, they now stand as it is the most efficient way of working. It is also better for the workers health reducing potential ergonomic health issues.

Another idea, which came from a member of staff through their suggestion scheme, was to have tubes that originally came in three colours manufactured in just one, this led to a saving of £23,000. “By getting people to come up with little ideas that they come across in their daily job we are getting impressive results,” says McGarry.

CI suggestions from the workforce have seized Eu2.5m in savings for Sudbury this year

The wiring As with all businesses, manufacturing companies have been transformed in the past few decades by evolving iterations of business IT. Today, it is impossible to imagine a business functioning competitively without a strong IT infrastructure and for many this means the implementation of Enterprise Resource Planning systems.

Siemens Sudbury site is no exception – in October last year, after 22 years of running the site through its own legacy systems – it integrated with Siemens’ SAP platform.

The move involved a nine-month roll-out which, although highly challenging was managed confidently by employees. “[Implementation’s] not easy, it does disrupt the business for a long time until people learn the system properly,” says McGarry.

But despite the disruption, manufacturing did not stop at Sudbury.

McGarry says, “On day one we could receipt parts for purchase orders, manufacture parts and ship products out the door so we didn’t stop the business. The business didn’t run as efficiently or as easily as it did on the previous Friday but we didn’t stop manufacturing which was a good feather in our cap.”

Beyond implementation But Siemens does not allow any suggestion or improvement programme to rest on the laurels of initial savings. After one year, each project is revisited and if it has not amounted to a 20% saving in standard time reduction, it is revised to see where further savings could be made.

Siemens’ Sudbury site has a long history and a growing heritage within its local environment but is not allowing the past to shape its future. Dedication to continuous improvement and a focus on sustainability mean it is moving with the times. In combination with an up and coming scheme to channel graduate talent into the business via the local University of Lincoln these efforts are securing a world class manufacturing future for the site.

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lastword The

Theyweroar , squeak Governments in developing and diversifying economies are offering eye-popping tax deductions and benefits to investors. By contrast the UK’s gestures toward industrial policy and a mandate for growth are weak. When will the establishment understand that only boldness will get the results we want?

I

n late October, Mr Khaled Salmeen visited the UK from Abu Dhabi. He came to promote Kizad, the United Arab Emirates’ 51km2 industrial zone which is now open for business and hungry to sign contracts with companies. So far 40 contracts have been signed by organisations from a number of countries – it was time for Kizad to turn its focus on getting UK firms to buy-in.

To lure companies into seeting up operations in Kizad the Abu Dhabi government, which owns the zone, is offering a range of temptations.

Companies located at Kizad will pay no corporate

Plan of Kizad with vertical cluster areas highlighted.

Find out more at www.kizad.com

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Have your say at: www.themanufacturer.com

or personal tax, nor will they pay duty on the import of equipment or raw materials.

Infrastructure on the site is “plug and play”, according to Mr Salmeen and utility costs are roughly one fifth of those in the UK. “We have a clear and crisp value proposition for UK manufacturers,” said Mr Salmeen.

“We offer low operating costs, access to markets and ease of doing business – both thanks to generous tax deductions and through our vertical ‘clusters’.”

These clusters huddle capability in processing materials and products such as aluminium, steel, glass, petrochemicals, engineered metal, food and more.

Why is Abu Dhabi offering all this for free? It is a direct and bold approach to achieving an economic goal. In 2008 Abu Dhabi was reliant on the oil and gas industry for 60% of its GDP. By 2030, by increasing the productivity of other key industries this is to be reduced to 40%.

Kizad’s offerings seem like a glistening banquet of growth incentives compared to gestures the British government is making to spur growth and achieve its economic ambitions. But in fact they are not exceptional.

Across the world, developing and diversifying economies are offering similar bait to bring wealth creating industries into their folds.

Sometimes there are some caveats around the way in which an investor can operate, although 100% foreign ownership is becoming increasingly acceptable, and often the investor is restricted to a certain zone. Notably, Mexico is

particularly light on geographical restrictions and manufacturing firms are eligible for government grants on capital expenditure costs in many of the country’s ‘assisted areas’.

Could such audacious measures be taken by the UK government? The general opinion of industry seems to be a measured “yes – but we need to find our own way.”

Developed economies may not be in the position to offer the radical fiscal incentives hung out

by Abu Dhabi and other countries with sovereign wealth funds to burn, but they can be bold in their own style.

In Japan, for example, industry is put front and centre in policy decision-making. Unlike the UK, where every policy must receive a stamp of approval from the Treasury, in Japan no policy passes into law without the Ministry of Economy Trade and Industry first ensuring that it will have no unintended consequences on the economic health and wealth creation potential of the country.

A similar step in the UK would set it apart from many other Western economies. It would be a daring and confident statement which might lend the September industrial strategy some teeth and claws. At the moment its lack of total acknowledgement by central government – let alone across parties – makes the strategy’s good intentions something of a squeak in the face of the roar from the economies who will dominate tomorrow’s business world if we do not find a way to play with them as equals.

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