The Manufacturer November 2013

Manufacturing Leadership Servitization explained Defining service-driven business models MDC through the years Cumulative debate at TM’s flagship conference

Workforce & Skills Closing the Skills Gap Targeting teachers in the fight for future talent Build it and they will come Scarborough Engineering Week provides model for regional engagement

Finance & Professional Services The holiday pay time bomb Precedents set in commercial aviation Facilities Management Outsourcing benefits explored

Manufacturing Technologies Automation – so what?

The strategic case for investment

IT in Manufacturing Go with the flow Meeting demand for reverse logistics ERP hits the fast track The UK’s first implementation of HANA-based ERP in an SME In partnership with:

London Underground 150 years old INTERVIEW Philip Greenish CBE CEO, The Royal Academy of Engineering

www.themanufacturer.com | November 2013 | Vol 16 Issue 9

Welcome

EDITORS INTRODUCTION

Hey Jude

There’s nothing like a good extreme weather event to get us all excited about our reliance on a fragile energy infrastructure, the vulnerability of our supply chains and the general sustainability of our industrial eco system.

36

42

64

Predictably, lively debate over all these issues sprang up in the wake of St. Jude in late October when many businesses found themselves without power or, even more commonly, employees in the wake of the storm which caused significant infrastructure disruption across the south of England.

Lawyers and financial services firms weighed, emphasising how important it is that, “given the increasing frequency of extreme weather events,” manufacturers ensure they have insurance for property, stock and loses incurred as a result of business interruption (bit.ly/ Judeandmfginsurance).

They’re right, but the sad fact is that it still takes a short sharp shock to jolt many businesses into thinking strategically about business continuity and other investments which can help keep a firm competitive throughout hard times (p82).

It’s all one with a general short termism in a lot of business thinking in the UK – and manufacturers can be just as guilty of this as government and financial services which are so often reviled for the fault.

Of necessity, many firms, especially SMEs, have had to concentrate hard on winning orders and sustaining cash flow in recent years, but if manufacturing is to survive and thrive in the UK, this cannot be done to the detriment of long term sustainability objectives.

I use the word ‘sustainability’ tentatively, in the knowledge that it is often brushed aside as a piece of ‘green-wash’ jargon.

But sustainability in its fullest sense is simply about making sure your firm will still be there in 50 or 100 years’ time. It is about long term competitiveness.

UK manufacturing and London Underground, find out more on p36

A report published at the end of October expresses this more eloquently than I could hope to. Foresight’s Future of Manufacturing report clearly sets out the forces which will mould the business models, technologies and products

UK manufacturers use and make in the years up to 2050.

The result of a two-year research project, the report is a major landmark in industry literature and I urge business leaders to read it (p34).

One of the core areas investigated by the Future of Manufacturing report is servitization and the potential for extension of product lifecycles, increased revenues and better exploitation of knowledge via servicedriven business models (p54).

It’s a new trick which even the oldest dog can learn. London Underground, for example, which celebrates its 150th anniversary this year, holds advanced service contracts with rail products manufacturer Alstom among other suppliers (p36).

Servitization is also a core topic at MDC2013, our flagship conference in early December where we hope to build on several years of maturing debate over industry skills, investment and growth trends in the UK (p48).

Alongside information on the national and global economic outlook, and best practice insight from industry leaders, this forum should help readers develop strategies which will sustain, whatever the weather.

Jane Gray Editor November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 1

Editorial Advisory Board

The Editorial Advisory Board The Manufacturer magazine has gathered a range of industry leaders to help it maintain and improve its relevance and usefulness to manufacturing business leaders in the UK. The board gives regular advice and feedback to ’s editor and their insight shapes the direction of content in the print magazine and online at www.themanufacturer.com.

Andrew Churchill Managing Director, JJ Churchill JJ Churchill is a 75 year old family-owned precision manufacturing firm. Andrew is an active industry spokesman, regularly engaging with government to give guidance on policy issues. He is on the main board of EEF, chairs its East Midlands Regional Advisory Board and sits on its economic policy and tax committees. Andrew is also a school governor at Dixie Grammar School, Market Bosworth.

Simon Edmonds Director, the Catapults Programme Simon Edmonds joined the Technology Strategy Board in January 2013 and has extensive experience working for the innovation agency and for the Department of Business, Innovation and Skills where he was previously department director, innovation.

During his time in this role Simon initiated the Hauser Review from which the original Catapult concept was drawn.

Steve Evans Director of the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability Steve spent 12 years in industry, finally as engineering systems manager at Martin-Baker Engineering. His research aims to develop understanding of how industry can bring environmental and social sustainability concerns into its design and manufacturing practices. He recently acted as an expert advisor to the Foresight report The future of manufacturing: a new era of opportunity and challenge for the UK.

Philip Greenish CBE CEO, the Royal Academy of Engineering Following a distinguished naval career Philip Greenish became CEO of the Royal Academy of Engineering in 2003. Philip is also a council member of Southampton University and a trustee of EngineeringUK, the Science Media Centre and the Daphne Jackson Trust.

2 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

Richard Lloyd Global Manufacturing Director, Accolade Wines

Accolade Wines is the world’s third largest wine company. Richard is responsible for global production sites including Accolade’s manufacturing and warehouse facility in Avonmouth, Bristol. This facility is the largest of its kind in Europe and has won several awards for operational excellence. Richard is an active industry speaker and was recently the UK manufacturing representative on an EU mission to develop trade links and share best practice between EU and Japanese companies.

Hywel Jarhead Director of External Affairs, EEF Hywel is a senior communications adviser and former BBC journalist. He was a consultant at the exams regulator Ofqual and worked on the development of the academies programme in England as director of communications. He is a member of the Chartered Institute of Marketing.

Andrew Peters Division Director, Drive Technologies, Siemens Siemens supports around 8,000 jobs in the manufacturing sector in the UK. Andrew’s career has led him through a wide range of roles in production, research & development, sales and marketing, service support and training. Andrew is a strong advocate of competitive advantage through strategic technology investment.

Ben Taylor CEO, Renishaw Plc Metrology equipment manufacturer Renishaw was founded in 1973 by Sir David McMurtry. It has won fifteen Queen’s Awards for Innovation.

Ben joined Renishaw Inc as president in 1985 and was appointed to the Board of Renishaw plc in 1987. He is responsible for group marketing, international operations and human resources. He also serves on various metrology committees, is a fellow of the Institution of Mechanical Engineers and a Liveryman of The Worshipful Company of Scientific Instrument Makers.

Pamela Petty Managing Director, Ebac Group Ebac was recently left in trust to its employees by its founder John Elliott MBE, Pamela’s father.

The firm makes air-conditioning and water cooling systems and has won regional growth funding to open a washing machine factory. Pamela joined the company 1986. Major early achievements included the modernisation of Ebac’s workforce management systems and the introduction of the firm’s first manufacturing resource planning system. She became manufacturing manager in 1997 and managing director in 2003.

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Food Processing CID £0.75 million Growth Funding

AFI Uplift Group ABL £50 million Acquisition & Working Capital Finance May-13

Automotive Manufacturing CID £0.5 million Refinance

Adhesive Products CID £6 million MBO June-13

Karro Food Group Limited ABL Facility £60 million Refinance June-13

Automotive Manufacturing CID £6 million Interfactor

Specialist Roofing Maintenance CID £1 million Transaction

Wallpaper Distributor CID £0.8 million New Working Capital Facilities Aug -13

Security Systems Supplier CID £6 million Interfactor Aug-13

Ainscough Crane Hire Ltd Syndicated ABL Facility £105 million Refinance Dec-12

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ABOUT US

Meet the team Nick Hussey Chairman

Editorial

IT Editor Malcolm Wheatley

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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 among young people. He holds several non-executive directorships and is a founder member of the IET’s Manufacturing Policy Panel. n.hussey@sayonemedia.com

Will edited until 2011 and is now working to expand the SayOne Media publishing portfolio. He is responsible for new reports and supplements, maintaining editorial standards at SayOne Media and supporting all the events. Before joining SayOne Media, Will worked for Euromoney and IPC Media. w.stirling@sayonemedia.com

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. Tim launched a new website for in late 2009 and has interests in the automotive industry and business development. In June 2013, Tim was appointed General Manager of SayOne Media. t.brown@sayonemedia.com

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

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

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Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.

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ABOUT US

08 News and regular columns A summary of manufacturing news and events with commentary on industrial research and policy 23 Naked Engineer UK-youngsters loose out to Anglo-Argentine commercial diplomacy 26 Lean on me Lean Management Journal’s editor Callum Bentley on Toyota’s product recalls and commitment to customer value creation 30 Out & About ’s goes to Zwick Roell an Infor roadshow and the Growing Business Awards 32 Best of Online What you wanted to read about most on ’s website last month 34 Hot Topic: The Future of Manufacturing Exploring the relevance of a new, ambitiously thorough, study of manufacturing to UK industry leaders 36 150 Anniversary Special: London Underground As the Tube celebrates its 150th birthday, investigates the value of the network to UK manufacturing and talks to some of the Underground’s suppliers about their contributions to an iconic piece of transport infrastructure 42 Interview: A new age of heroes Philip Greenish CBE, CEO of the Royal Academy of Engineering talks about the unique position of the Royal Academy as an advocate for engineering in the UK and the transformed value of engineering in Britain over the past decade 46 60 second interview: Sir Roger Bone, president of Boeing UK, on the importance of international maturity to industrial competitiveness

Pillar features Manufacturing Leadership 48 MDC through the years: In the run up to another Manufacturer Directors’ Conference reviews the changing context and accumulating debate since the event’s inception Other topics in the section: Midlands manufacturing strength, servization, innovation, Europe, industry image and health and safety leadership

Workforce & Skills 62 Closing the Skills Gap: Targeting teachers in the struggle to build a better skills pipeline for manufacturers 64 Build it and they will come: Why more manufacturing businesses in isolated regions of the UK should wake up to the success of Scarborough Engineering Week 68 Employee of the Month: Sabrina Ihaddaden, IET, Developing Engineer, Bombardier Transportation

6 www.themanufacturer.com| November 2013 | Issue 9| Volume 16

Finance & Professional Services 70 The holiday pay time bomb: Why manufacturers should take note of recent employment tribunal landmarks

Supply Chain 71 Crossrail: better with BIM: What Building Information Modelling technology is doing for whole lifecycle efficiency on Europe’s biggest infrastructure project

Extended Feature 71 Facilities Management: Market overview and potential benefitsbenefits of outsourcing to manufacturers

Manufacturing in Action 78 Mitsubishi Electric: a factory profile

Manufacturing Technologies 82 Automation, so what? Experts define the arguments for more automation in UK manufacturing Other topics in this section: Two automation case studies from Hymid Multi-Shot and Shelbourne Reynolds

IT in Manufacturing 86 Go with the flow: How can supply chain IT help manufacturers handle the increasing complexity arising from reverse logistics and returnable container systems?

Other topics in this section: Enterprise Resource Planning and Customer Relationship Management 96 Last Word: The big bad six are the new bankers and the bankers are the new good guys. Will Stirling comes to terms with this realisation

OUTBOUND REPORTS Energy II 2013: Energy security and competitive manufacturing in the UK Exploring the UK’s energy security challenges, their implications for industrial competitiveness and what manufacturers are doing to mitigate risk Waste Management 2013 Exploring advances in waste management services, technologies and infrastructure and ambitions for a circular economy in the UK.

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NEWS

www.themanufacturer.com/news

INVESTMENT

Nine fully automated filling lines were installed at AkzoNobel’s new Ashington paint factory.

The lines cost a total £15m and include advanced robotic stacking systems as well as the flexibility to service over 200 different sizes and shapes of paint tins. Andy Jackson, project director, AkzoNobel, Ashington, said the arrival of the filling lines represented a significant milestone in the completion of the £100m Ashington factory, which is due to open in 2014.

Andy Jackson, Project Director, AkzoNobel outside the paint manufacturer’s plant in Ashington

FINANCE

GE Capital agreed a new three year, panEuropean invoice financing package for Vita Group, a manufacturer of cellular foams, industrial polymers and thermoplastics. The flexible financing facility provided by GE Capital is designed to match Vita’s working capital requirements across the region.

This multi-currency package offers strategic funding for 20 Vita Group companies in seven European countries.

Vita Group is headquartered in the UK and has a turnover €1bn. It employs 3,700 people in 20 countries.

WOMEN IN MANUFACTURING

CONFIDENCE

77% of UK SMEs said they feel international trade will improve in the next quarter. This statement of confidence was made in Western Union Business Solutions’ quarterly International Trade Monitor. The Q3 results for this showed the highest overall expressions of confidence since the monitor began in March 2010. Sixty eight percent of UK SMEs told Western Union that they were confident in the UK economic climate and 50% said they believe the general business environment will improve in the immediate future. SME manufacturers expressed more confidence in the UK economy than their retail counterparts. Kerry Agiasotis, chief commercial officer, Western Union Business Solutions, said: “It is particularly encouraging to see that Britain’s SME manufacturers are finally expressing more confidence, but retailers continue to feel the pain of reduced individual and family budgets.”

8 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

British Glass launched its Women in Manufacturing initiative, joining together its glass science expertise with manufacturing industry representatives and STEM organisations to inspire the next generation of women into manufacturing and engineering through innovative education programmes.

British Glass is looking for women in the manufacturing industry to become Ambassadors for the initiative.

Contact info@womeninmanufacturing.co.uk for more information.

APPRENTICESHIPS

Government announced its Richard Review Implementation Plan for improved vocational training delivery. The plan, which responds to the 2012 Richard Review of Apprenticeships, will give employers more power to design and develop apprenticeship standards. Responding to government’s proposals Steve Radley, director of policy at EEF said they represented a “game changer” in making apprenticeships relevant to industry and learner needs. “Moreover, the collaborations showcased [at the Plan’s launch] lay the foundation for the creation of sector-led Industrial Partnerships, with employers taking end-to-end responsibility and ownership of the skills agenda,” Mr Radley concluded.

MANUFACTURING NEWS

Two thirds of UK workers would not report illegal software use in their organisation

PUBLIC RELATIONS

Electrical power management company Eaton appointed Technical Publicity as its pan-European, Middle East and Africa PR agency. Technical Publicity is charged with providing more consistent marketing communications for Eaton across these regions. The agreement covers 29 countries with 11 languages and has a particular focus on the Middle East, South Africa, Turkey and Russia. Ton de Haan, head of trade media at Eaton said: “Technical Publicity has worked closely with Eaton in recent years…they have demonstrated their capacity to cultivate a solid understanding of our technology and our business.”

IT

The Federation Against Software Theft found only one-third of UK workers would report illegal use of software in their organisations.

Research conducted in October showed that, while 63% of 200 workers surveyed were concerned about the negative impact of data theft on the economy, just 34% would report the illegal use of software by colleagues and employers. Fear of job loss is the primary constraining factor but 30% of those who said they would not whistle-blow said they simply didn’t care.

FACTORY CLOSURE

Sweet manufacturer Glisten confirmed it will close its Lincolnshire facility. The move will put 80 jobs at risk.

Glisten, an independent confectionery manufacturer, which operates out of Skegness, is to move production to Leicester and the Czech Republic. The company said that the operation of the Lincolnshire site was not cost effective and that it will discuss relocation options with staff. Glisten managing director, Mark Adcock commented: “I have a responsibility to all Glisten employees and we have to ensure the best and most cost-effective use of our available resources to meet the demands of the major retail customers.”

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November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 9

NEWS INVESTMENT

Medical device manufacturer Surgical Innovations confirmed it will build a new factory near Leeds.

The 58,000 sq ft facility will incorporate a 12,000 sq ft clinical training centre, where UK and international surgeons will be able to develop best clinical practice in the use of SI’s products and critique its latest medical device technologies. The new building will be planned specifically to optimise SI’s research, development and production capabilities. Plans and contracts for the new-build factory will be signed-off in January 2014 and SI will move to the site in the summer of 2015. SI was awarded £5.05m of Regional Growth Fund money to support its relocation and development.

IT

Microsoft announced the worldwide release of Microsoft Dynamics CRM 2013. Designed to offer an enhanced user experience, the system promotes end user productivity, and provides interoperability with Microsoft’s Yammer, Lync and Skype technologies.

The new release offers customers pre defined and configurable processes where each stage of a process is clearly outlined, identifying the recommended steps to completion. Building on this design element, Microsoft has introduced new ‘templates’ for a number of specific industries, including manufacturing, which provide configurable business processes incorporating best practices from industry experts, and giving customers a starting point to build a solution to fulfil their own specific industry requirements. These templates can flow onto all mobile devices supported by Microsoft Dynamics CRM.

www.themanufacturer.com/news

ENERGY

Government confirmed that Hinkley Point C, the UK’s first new nuclear power station in nearly 60 years, will go ahead. The new power plant will be built and managed by a consortium of companies, led by French energy provider EDF. It will house two reactors, costing around £16bn, which will provide power for about 60 years. Confirmation of the plant marks a significant milestone in reducing the UK’s reliance on fossil duel-derived power. Secretary of State for Energy Edward Davey said: “For the first time, a nuclear station in this country will not have been built with money from the British taxpayer.” Mike Tynan, chief executive of the Nuclear AMRC, said the announcement is a welcome one to the UK energy sector, but an open letter to David Cameron from solar energy generator Lightsource showed that not all agree. The letter, claimed that, for the same cost, the solar industry could build facilities capable of supplying a comparable energy capability in just two years, compared to the decade it will take to build Hinkley Point C.

ACQUISITIONS

AWARDS

Xtrac MD Peter Digby named Director of the Year by IoD

Peter Digby, managing director of Xtrac was named Global Director of the Year and overall winner of the influential Director of the Year Award presented by the UK Institute of Directors. Xtrac is a Berkshire-based transmission technology specialist employing 275 people. The company celebrates its 30th anniversary next year. Simon Walker director general at the IoD said: “These awards recognise not just the tremendous success of Xtrac, but also the leadership and business skills that Peter has brought to bear.” The IoD’s Global Director award recognises directors of UK‐based companies with overseas operations where a minimum of 25% of the company’s recent turnover comes from worldwide sales – Xtrac consistently achieves 70% export sales. The IoD judges said Peter Digby was a consistently outstanding managing director.

Shoe brand Dr. Martens was sold for £300m. The Griggs family, which has owned Dr. Martens for 50 years, agreed the deal with Permira Funds which also has stakes in Hugo Boss and New Look. Dr. Martens employs 700 people worldwide, including 350 people in Britain and its shoes are sold in 63 countries.

The brand’s popular boots, which were first sold in the UK in 1960, are still made in the company’s Cobbs Lane factory in Wellingborough, Northamptonshire. David Suddens, CEO of Dr Martens, said Permira had been chosen to continue the brand’s legacy as the firm respected “the company’s heritage”, and want to “support the management team in nurturing it”.

10 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

NEWS SKILLS

The 2013 Arkwright Engineering Scholarships were awarded to aspiring leaders in engineering and related areas of design. 371 scholarships were awarded to sixth formers from across the UK and Channel Islands – the largest ever annual number.

The Arkwright Engineering Scholarships are administered by the Arkwright Trust and supported by industrial and associated organisations.

Among those to receive scholarships this year was Samuel Whaley a sixth form student from Swanage, Dorset.

His scholarship is sponsored by The Manufacturer magazine.

AWARDS

An “intelligently electrified” environmental engine concept was awarded the Prize for the Environment by the Institution of Mechanical Engineers.Ricardo, Ford Motor Company, Controlled Power Technologies and Valeo Engineers received the award for their collaborative paper, HyBoost – An Intelligently Electrified Optimised Downsized Gasoline Engine Concept. The winning HyBoost paper was originally presented at the Sustainable Vehicle Technologies conference held in November 2012. The award of the prize to the paper’s authors was formally made during the October meeting of the Automobile Division at the IMechE’s London headquarters. Accepting the Automobile Prize for the Environment for the HyBoost paper, Ricardo chief engineer, Jason King, said: “Intelligent Electrification is an extremely promising technology that this project has shown to have the potential to deliver extremely good fuel economy, low carbon dioxide emissions, and a performance equivalent to that of a much higher capacity conventional powertrain.”

www.themanufacturer.com/news

FINANCE

Government said it would consider introducing penalties for businesses which pay their suppliers late. Prime Minister David Cameron made the announcement following a meeting to discuss the impact of late payments on economic recovery. Business support organisation, the CBI welcomed the news.

Katja Hall, the CBI’s policy director, said: “Late payment is a serious issue for all businesses but particularly for smaller firms, as cash flow is their life blood. Businesses already have a number of routes for recourse if they are paid late, but the reality is that few choose to act on late payment for fear of fall out with their customers.” In some sectors, late payments can be crippling for SMEs, where prime contractors have gone out to 90-day and 120-day terms. The Financial Times reported that in April, that the average small business was owed £31,000 in overdue payments, amounting to £30.2bn across the economy.

Non-bank lending hit a five year high. Data from the National Association of Commercial Finance Brokers showed businesses are increasingly looking beyond their banks to find the finance they need to fulfil business plans. Meanwhile traditional bank lending has shrunk by 25% since 2011.

Funding for SMEs via leasing and asset finance has more than doubled in the same period with £17.4bn of funding advanced by asset based lenders to UK SMEs in the year to June. More unusual ways of backing business plans are also on the rise with peer-to-peer lending networks and similar facilities showing an 80% rise in lending.

12 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

Tooling and equipment manufacturers are riding on a two year confidence high according to MTA

CONFIDENCE

Tooling and equipment suppliers are at their most confident in two years according to the Manufacturing Technologies Association. Graham Dewhurst, MTA director general, welcomed the results from the Association’s annual survey of sector sentiment. “2013 has been a strong year for the industry with orders and sales at good levels throughout. What is also good news is that we can now see a clear trend in employment with companies’ workforces growing at an annualised 6%,” he said. The majority of larger manufacturing technology companies surveyed by MTA said they expect business to improve in the next 12 months.

EXHIBITION SUPPORT

Lloyds Bank Commercial Banking confirmed it will act as headline sponsor to MACH 2014, the machine tools exhibition. Graham Dewhurst, director general of the Manufacturing Technologies Association which organises the 100 year old show said he was delighted with the news. “The MTA has been working with Lloyds Bank across a number of industry initiatives in recent years and Lloyds participation in MACH 2014 is the latest example of the bank’s commitment to the manufacturing technologies sector,” he commented.

MANUFACTURING NEWS

JOBS

Automotive engine manufacturer Cosworth Engineering will create up to 70 new jobs. The planned recruitment comes on the back of a new contract. The firm expects that a further 200 jobs will be created in its supply chain as a result of its new business. Cosworth had not announced the customer name or details of its new contract at time of writing but newly appointed Cosworth CEO Hal Reisiger told the BBC that recruitment for 70 new jobs would begin in June 2014.

Bombardier Aerospace announced 250 new jobs will be created at its Belfast factory by the end of 2014. The announcement was made in tandem with a visit by Prime Minister David Cameron to the Belfast facility which already employs around 6,000. Mr Cameron hailed the firm’s commitment as the biggest single investment in Northern Ireland. “What we need in our country is more businesses and jobs like this,” Mr Cameron told workers on the factory floor. “We need to make more things, we need to export more things, we need to design more things. We want the high end, high tech, high paid, high skilled jobs that companies like this bring to our country.”

EXPORTS

Analysis of national statistics revealed the West Midlands is outstripping other UK regions in export growth. Exports from the West Midlands have increased by 30% since Q1 2011, while the average rise for the whole of England in this period is only 2%. The East Midlands proved the UK’s second strongest region for export growth with a rise of 15% since 2011. Bringing up the rear were the North West and North East with a balance of -12% for both over the past two years.

Speaking of the West Midlands Paul Noon OBE, director of UK Trade & Investment West Midlands, said: “The is some magic at work in this region. Some of this is driven

by Jaguar Land Rover, of course, and JCB. But it is not only their supply chains that are exporting, there seems to be a stronger ‘go get’ mentality here now than hitherto, and different types of companies are finding ways to exports.” See p50 for more on Midlands manufacturing.

HSBC published a manifesto for increased British exports. The bank has compiled a report Equipped for success – A Manifesto for British Exports which explores the challenges faced by a group of UK firms in increasing their export trade. HSBC has used the report to produce a set of policy recommendations to government which it believes will help the UK realise its potential to export for more of its goods and services.

Alan Keir, group managing director EMEA and chief executive, HSBC plc said: “Britain’s businesses are among the most innovative and imaginative in the world, but in recent years these talents have failed to deliver significant export growth.” He added, “We know from talking to our customers that many businesses with massive export potential are still holding back from looking overseas.”

Dates for your diary NOVEMBER

12-13

The Advanced Engineering UK Group of Events brings a series of exhibitions to Birmingham’s NEC. The events cover five interlinked high value engineering and technology industries - automotive, aerospace, composites, electronics and print industries - under one roof. It provides an intensive two day business networking, capability sourcing and technology experience. www.advancedengineeringuk.com/hub

14

The first Everywoman Advanced Manufacturing and Engineering Academy takes place at the Royal Academy of Engineering. This one day workshop will provoke debate and experience sharing between women about their routes into industry and career progression. Jenny Body OBE, president of the Royal Aeronautical Society will deliver a keynote address. www.everywoman.com/engineeringacademy

14-16

Covering the space of over seven football pitches at Birmingham’s NEC, The Skills Show 2013 gives visitors the chance to explore a wealth of skills across five sectors: Built Environment, Cultural & Creative Arts, Engineering, IT & Business Administration and Social & Professional Services.

The free event will open the eyes of over 75,000 young people to high quality vocational qualifications and career routes. www.theskillsshow.com

20

The IET Achievement Awards, hosted by the Institution of Engineering and Technology, take place in central London. The IET’s Achievement Medals recognise individuals who have made an outstanding contribution to the advance of the sector and discipline. This year a new set of awards will also be bestowed on outstanding apprentices and technicians. bit.ly/IETAchievement2013

26

ERP vendor Columbus brings ColumbusLive to the Kettering Park Hotel, Kettering for a full day of thought leadership presentations, case studies and debates on the strategic use of ERP technology in manufacturing firms. The event will give delegates the chance to influence the future of Columbus’ platforms www.columbusglobal.com

DECEMBER

4

EEF Finding Cash for Growth takes place in Birmingham. The event aims to help senior managers and business leaders make the right decisions on where to put their money. Benefits include access to finance experts who will advise individuals as to where their business should focus for growth and how to finance the strategy. www.eef.org.uk/events

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 13

The detail may look abstract, but the impact is plain to see.

Often in business, it’s the little things that can make a big difference. Just ask Road Tankers Northern. When we made a small change to the aerodynamic design of their vehicles, their fuel costs fell by 10%.

We love turning our specialist expertise into real, bottom-line benefits for our clients.

We’re already helping companies to reduce downtime and waste, access new markets, improve their product quality and drive down energy consumption.

Why not set us a challenge of your own?

shu.ac.uk/manufacturing

Clever design leads to big profits Sheffield Hallam University works with a huge range of organisations – from multinationals to SMEs – including Rolls-Royce, Hauzer, Mott MacDonald and Nestlé. One company – Road Tankers Northern, the largest manufacturer of tankers in Europe – were delighted when research carried out by the University’s energy experts led to a 10% reduction in fuel consumption for a major supermarket customer. Here’s their story.

Barnsley-based Road Tankers Northern (RTN) chose Sheffield Hallam on the recommendation of another regional business. They approached the University in September 2010 with a very open-ended brief – they needed a unique selling point that would distinguish them from stiff competition abroad. With tankers potentially on the road for 24 hours, a drop in fuel usage would very quickly mean considerable cost savings for their customer base, as well as all-important reductions in carbon emissions.

Academics from Hallam Energy – a business-facing team within the University’s renowned Materials and Engineering Research Institute – explored various possibilities during initial discussions. They soon understood RTN’s more specific requirements. The challenge would be to change the tankers’ aerodynamic performance without changing their

material – which was familiar and easy to weld – or their iconic tractor-tanker design.

Having agreed a project, University investment from the Higher Education Innovation Fund allowed Hallam Energy to extend the work and greatly refine their model and analysis. They worked closely with RTN’s design team to ensure that any modifications did not compromise the recognisable image of the tankers – a short cab and a long cylindrical trailer.

Using high-tech computational fluid dynamics, the researchers modelled air flow over the truck, focusing on narrowing the space between the two trucks to improve aerodynamics.

Modelling drew on drag innovations more commonly associated with motorsports or marine technology.

Dr Andrew Young, the engineer who led the project, explains, ‘By reducing

the induced drag and setting-up the flow to progress more smoothly, we were able to identify massive potential cost savings that go beyond existing research into tanker fuel consumption.’

RTN operations director Don McKelvie says, ‘This project is a superb example of industry and academia working together to make a very saleable product. The company has been able to redesign its tankers with the proven knowledge that they are lighter and more aerodynamic which translates into fuel efficiency and carbon savings without loss of structural integrity.’

He adds, ‘Even the tiniest design changes can have a massive effect on the amount of fuel that is used by these tankers and we are planning to collaborate with Hallam Energy on future projects to see if further savings can be identified.’

UPCOMMING EVENTS

The Manufacturer Directors’ Conference (MDC)

3rd - 4th December 2013, The ICC (International Convention Centre), Birmingham

03–04/12/2013

Now in its fifth successful year, The Manufacturing Directors’ Conference will bring together a wealth of knowledge from across industry, government and academia through a mixture of debates, manufacturing case studies, hands on workshops and practical presentations. #TMDC2013 will focus on key factors for growth including areas of supply chain integration and how servertization can drive business growth. It will also bring together the next generation of manufacturers in an inaugural forum to form a vision of #UKmfg in 2023.

With practical ‘how to’ and ‘essential growth’ skills workshops designed specifically for directors to enhance your skills and aid you to ensure your business can break through any potential barriers and drive forward over the next twelve months and beyond.

This year we have confirmed some of the biggest name in manufacturing to speak, these include: John Howie, Managing Director, Babcock Marine Nigel Whitehead, Group Managing Director, Programmes and Support, BAE Systems Douglas Dawson, Chief Operating Officer, Caparo Group Richard Wilding OBE, Professor of Supply Chain Strategy, Cranfield School of Management John Elliott, Chairman and Founder, Ebac Dr Phil Lewis, Chief Executive Officer, Gardner Aerospace Steve Dalton OBE, Managing Director, Sony UK Professor Lord Bhattacharyya, Chairman and Founder, Warwick Manufacturing Group

www.themanufacturer.com/mdc2013

04/12/2013

ERP Connect

4th December 2013, The ICC (International Convention Centre), Birmingham

The Manufacturer’s ERP Connect has changed the way UK manufacturers approach software selection by minimising the overall time and effort involved in qualifying potential Enterprise Software vendors. ERP Connect is the must attend event if you are looking to install or

upgrade your ERP system in the next 12-18 months. This unique event offers a one-of-akind opportunity for you and your team to see the best in Enterprise Software Solutions in the world, all in one place, all at the same time!

www.erpconnect.co.uk

04/12/2013

The Manufacturer of the Year Awards 2013 Gala Dinner and Ceremony, 4th December 2013, The ICC (International Convention Centre), Birmingham

The Manufacturer of the Year Awards is specifically designed to acknowledge and celebrate the strength and diversity of UK manufacturing.

The awards aim to spread best practice, inspire others and show the important role UK manufacturing plays in today’s economy. Book your tables now!

www.themanufacturer.com/awards

The Manufacturer Directors’ Forum Dinners

Join industry leaders for professional debate and knowledge-based networking The Manufacturer hosts a series of invitation only private dinners throughout the UK each month. These dinners are focused on knowledge

www.themanufacturer.com/mdf 16 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

based networking and strictly limited in numbers.

Apply to become part of this exclusive forum by emailing directorsforum@sayonemedia.com.

Save up to 37% on your fuel costs.

Make it your BestInvest.

Invest in our new Diesel Counterbalance Trucks and save up to 37% of your fuel costs* per annum. It is so easy to make your best investment decision. www.jungheinrich.co.uk/bestinvest *Calculated for the fuel consumption of our Diesel Counterbalance Truck DFG 550s against various competitors’ trucks based on 2,000 working hours per annum.

50 United Kingdom

APPOINTMENTS

Ian Farquhar

Gripple

Sheffield’s Gripple appointed Ian Farquhar as its chief executive. Mr Farquhar joins the wire joining and tensioning device manufacturer after 22 years as an executive with Rolls-

Chris Ford

Royce and David Brown. The company is looking to build on a successful 2012 when it added £4m in sales and posted a pre-tax profit of more than £1m.

Company chairman Hugh Facey, who

acted as interim chief executive up until Mr Farquhar’s appointment, said the new CEO is “already settling in well.”

Ford Aerospace and Component Manufacturing

North East high-tech components manufacturer Ford Aerospace and Component Manufacturing appointed Chris Ford as its new managing director.

Mr Ford, who steps up from his role as

HAL REISIGER

finance director, is the youngest MD in the company’s 103-year history at just 28 years old.

With the company targeting £15m worth of sales within three years, exports

are key to the company’s expansion.

More than half of the £900,000 sales increase at the company in the last financial year came from exports.

for the group’s North American operations, during which time he led the development of successful relationships with leading automotive vehicle manufacturers.

Reisiger is joined on the Cosworth management team by Anna Marchent, who was appointed chief financial officer for the group.

CEO of the Office for Nuclear Regulation, Dr Weightman was responsible for the nuclear safety, security and safeguard regulation of the UK’s civil nuclear industry and nuclear safety aspects of UK defence sites.

Following the Fukushima nuclear accident in 2011 Weightman provided

expert advice to the UK government, leading the UK’s response on lessons learned for the nuclear industry. He also provided international leadership in responding to the Fukushima nuclear accident including heading up the IAEA expert fact finding mission to Japan in May 2011.

Cosworth

Performance engineering and manufacturing group, Cosworth, appointed Hal Reisiger as chief executive officer. Mr Reisiger moves from his previous position as president

Dr Mike Weightman

AMEC

AMEC, the international engineering and project management company, appointed nuclear expert Dr Mike Weightman as a consultant to support the company in its global nuclear business growth programme.

In his role as the former UK chief inspector of nuclear installations and

Mark Chantler, Meadow Foods

Meadow Foods appointed Mark Chantler as its group commercial director. Mr Chantler joins its executive board with responsibility for implementing strategy for growth, including acquisitions, and the expansion and development of its production facility at Chester, which starts this week.

After graduating with a first class honours degree in Economics from Newcastle University, Mr Chantler spent time gaining company experience in each division of Meadow as a project manager.

Simon Chantler, executive chairman and co-founder, said: “As the next generation, Mark’s focus will be on the continual improvement and strategic development of the business.”

To notify The Manufacturer of your company’s appointments, please contact James Pozzi at: j.pozzi@sayonemedia.com or: 0207 401 6033

18 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

Patrick Newberry, Unipart Expert Practices

Unipart appointed Patrick Newberry as a non executive director of its consultancy, Unipart Expert Practices (UEP).

Mr Newberry has held a series of senior consultancy roles in PwC’s consulting practice, including commercial partner for the consulting business. He has been chairman of PwC’s Financial Services Regulatory Practice during a career focused on the financial sector in the UK and globally.

Commenting on the appointment, Unipart Chairman and Group chief executive John Neill said: “Pat’s extensive experience in building and running a highly successful consulting business will provide our executive team with a combination of strategic insight and wise counsel.

“He will add immensely to the stature of the board, and we are looking forward to working with Pat to continue to develop our existing products and services, and to provide more innovative solutions for our clients.”

80 expert speakers

26 November 2013 Business Design Centre, London

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NBS Live is a brand new conference designed to bring together 4 themed programmes all in a single venue: Business & Practice Technical

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Book your place today: theNBS.com/NBS-Live

Join the conversation #NBSLive @theNBS For further details contact: The NBS Live Events Team email: NBSLive@theNBS.com telephone: 020 7496 8350

This conference is RIBA approved, so double your CPD points

16

NBS Live Partners

The shortlist for The Manufacturer of the Year Awards 2013 has been revealed.

If you’ve missed it, here it is.

Who will triumph? Join us at The ICC, Birmingham on Wednesday 4th December to see the winners crowned.

We wish all those on this year’s shortlist the very best of luck! our 2013 independent panel of expert judges includes: Peter Watkins Operational Systems & Business Excellence Director, GKN Land Systems Jim Sumner Executive Chairman, James Briggs Jan Ward CEO, Corrotherm International

Colin larkin Plant Manager, CNH UK Mark Jolly Professor of Sustainable Manufacturing, Cranfield University Darren Patterson Business Improvement Director, BAE Systems

To see the impressive full list of this year’s judges, visit:

www.themanufacturer.com/awards Corporate Sponsor:

Drinks Reception Sponsor:

THE SHorTlIST lEADErSHIP AnD STrATEgY Accolade Wines Ebac Monarch Aircraft Engineering NIS

Sheffield Forgemasters International Tharsus Group

Sponsored by:

InnoVATIon AnD DESIgn Britplas Element Six Greene, Tweed & Co Integrated Technologies

Kinnerton (Confectionery) Company Nampak Plastics Europe Surgical Innovations

Sponsored by:

YoUng MAnUFACTUrEr oF THE YEAr Edward Kolb, Greene, Tweed & Co Jaymini Mistry, Greene, Tweed & Co Jessica Charter, Rolls-Royce

Kieran Given, Premier Bakeries Ireland /Hovis Belfast Ross Meikle, Hayward Tyler Tom Eastwood, Milliken European Airbag Products

Sponsored by:

SUPPlY CHAIn EXCEllEnCE The Manufacturer of the Year Awards 2013 has been generously supported by a range of partners to ensure this is yet another successful year of industry celebrations and recognition.

We would like to thank all sponsors for their continued support.

AstraZeneca Macclesfield Eaves Machining

Herman Miller Weir Minerals Europe Sponsored by:

Researched and developed by:

ICT In MAnUFACTUrIng Downlands Packaging Hayward Tyler Romag SRM Industries

Universal Drilling and Cutting Equipment (Unibor) Weir Minerals Europe

THroUgH lIFE EngInEErIng SErVICES Babcock International Group Sponsored by:

Premier Foods Ashford Selex ES Sheffield Forgemasters

Accolade Wines AstraZeneca Macclesfield Caterpillar UK

Michelin Tyre Milliken European Airbag Products Muntons Paramount 21

CNH UK Diametric Duo UK

Secure your table at this year’s awards and join some of the biggest names in the industry at the largest networking night in the manufacturing calendar.

Sponsored by:

(Over 125 employees)

Newburgh Engineering The Authentic Food Company

BooK noW To BE PArT oF IT Sponsored by:

Charlotte Ross, Trolex Jacob Vosper, TJ International Mark Richards, MBDA

Tables of 10: Award entrants and finalists: £1,595 +VAT Manufacturers, trade bodies and charities: £1,795 +VAT Non-manufacturers: £1,995 +VAT To book, visit:

APPrEnTICE oF THE YEAr Amy Strange, GE Aviation Wales Anna Schlautmann, MBDA Callum Bloor, Selex ES

THE MAnUFACTUrEr oF THE YEAr AWArDS CErEMonY & gAlA DInnEr THE ICC, BIrMIngHAM, 04/12/2013 1,000 influential industry leaders will come together for a night of reward, recognition and celebration.

SME MAnUFACTUrEr oF THE YEAr Boss Design EnviroVent Greene, Tweed & Co MAN Group

Jaguar Land Rover Wyke Farms Xaar

Sponsored by:

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Industrial Automation & Control Preformed Line Products - GB Totalpost Services

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MAnUFACTUrIng In ACTIon

SME MAnUFACTUrEr oF THE YEAr Birley Manufacturing Ekspan Emplas Window Systems

Hotel Chocolat Life Technologies Milliken European Airbag Products

Sponsored by:

SUSTAInABlE MAnUFACTUrIng Brother Industries (UK) Crown Paints James Cropper Speciality Papers

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WorlD ClASS MAnUFACTUrIng

PEoPlE AnD SKIllS Ford Component Manufacturing Fujifilm Speciality Ink Systems GE Aviation Wales MBDA

Monarch Aircraft Engineering Rolls-Royce

www.themanufacturer.com/awards Sponsored by:

@TMAwardsUK #TMAwards2013 www.themanufacturer.com/awards

General enquiries: Laura Williams E: l.williams@sayonemedia.com T: +44 (0)1603 327006 Network and celebrate with the cream of the manufacturing industry... at the manufacturing event of the year!

POLICY POINT & BACK TO SCUOLER

Policy Point.

Back to scuoler.

Gordon Attenborough, sector head of design & production at the Institution of Engineering and Technology on highlighting the skills crisis.

I

n October, following a twitter campaign which engaged IET’s followers, members and non-members alike, around 70 cross-party MPs signed a pledge to support young engineers, especially women, in their constituencies.

The commitment was made at an event at the Houses of Parliament, hosted by Stephen McPartland MP. The IET has a strong relationship with Stephen as his Stevenage constituency is home to the IET’s Michael Faraday House.

Two MPs who signed the pledge were formerly engineers themselves: Shadow Cabinet Office Minister, Chi Onwurah MP is a Fellow of the IET and Michael Fabricant, MP for Lichfield, is a Chartered Engineer.

Other MPs that signed up – encouraged by the IET’s twitter followers – included shadow energy secretary, Caroline Flint MP, deputy leader of the liberal democrats, Simon Hughes MP and chair of the Science and Technology Committee, Andrew Miller MP. After signing the pledge, MPs were able to meet IET president Barry Brooks, the IET education team and young engineer volunteer members. Our volunteers were able to feedback to MPs their experiences of entering the engineering profession and their ideas on how others can be encouraged to do the same.

Engineering underpins our everyday lives but we are facing a serious skills shortage. We urgently need to encourage more young people to take the right subjects at school and then progress into a career in the engineering sector.

This informal event in Parliament created a great opportunity to talk to MPs about what a creative and exciting career modern engineering can offer – and to demonstrate that the IET is proactive in highlighting the engineering skills gap directly to policy makers.

22 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

W

e recently published a report on the UK’s relationship with the EU, Manufacturing; Our Future in Europe Stronger Leadership, A Stronger Economy.

This report is highly relevant in the midst of debate over Britain’s future relationship with the EEF CEO EU. The final decision will have major implications for Terry Scuoler, our economy. explores the Based on input from our members, EEF’s message UK’s future to the Prime Minister is relationship clear. We welcome the debate that he has started with Europe. on Britain’s future in the EU. But if he is to succeed in persuading the British public to vote to stay in a reformed union, there is an urgent need to reframe the debate.

We need to move on from talking about what is wrong and look at what can be achieved if we can get it right.

Partly, this will include persuading the EU to cut the amount of regulation it is bringing forward and last month the government set out its agenda for change.

It’s an ambitious agenda and one that we support. But important as it is to get things right on regulation, the real prize for industry and for our economy is much larger.

85% of surveyed EEF members said that they wanted to stay in the EU. This proportion is unchanged from ten years ago – a fact which shouldn’t surprise anyone. Europe remains our largest market and for many companies it is a springboard for worldwide exports.

Three in five manufacturers tells us that the EU will remain a key part of their export strategy.

Some might say that the real opportunities lie outside Europe. But that ignores a reality that trade deals are increasingly negotiated by trading blocs. The Trans-Atlantic Trade and Investment Partnership is grabbing all the attention.

But if the European Commission completes all the trade deals on its table, it could add some £275bn to the region’s GDP. So, do we get stuck in, help to push Europe in the right direction, and sell the potential gains to the British public? Or do we continue to complain about what is wrong with the EU, seek to negotiate a potentially unattainable special deal and fail to convince the wider population? The economic consequences of this choice will be significant.

See p57 for more on EEF’s report ‘Manufacturing; Our Future in Europe’.

NAKED ENGINEER

Naked engineer A little Argie bargie Home grown talent loses out to commercial diplomacy at Hemlock engineering.

“G

otta run” I said swigging the last of the Cavendish’s working lunch red. Been discussing the latest bureaucratic bollocks surrounding the annual apprentice shoot with Jimmy the Greek (Hemlock’s rabidly Welsh FD) and our ever-cheerful HR wallah Janice.

I’d got off lightly – The Greek was on a funding hunt from BIS and Janice was doing battle with the local FECs, well named if you ask me bearing in mind what they’re full of.

“Early one at 2pm out of Gatport Airwick,” I explained.

“Off to Buenos Aires to brief a few Argie generalissimos for the Tactical Command and Control Group”.

We were trying to shift a few bits of only slightly lethal hardware in the Argentine. On a galactic scale of political incorrectness this was hovering somewhere near Alpha Centuri – but, hell, when there’s £300million quid in it, forgive and forget, that’s what I say.

Made mental note to self on return flight – fire travel agent. I’d stayed in the ‘Aparthotel’ in some Buenos Aires back street. Very

aptly named – it was part hotel and part slum.

Gave the jetlag a good three days to recover with help from a couple of late ones in Cavendish’s before risking a reentry to the orifice a week or so later.

“How was BA?” asked Jimmy, interrupting as I was trying to find the on switch for a new PC gifted to me by geek control.

“Pretty good, although I was a bit perplexed by the landing card,” I mumbled from underneath the desk.

Coming up for breath I reported, “Prohibited items list featured semen which caused me a bit a concern. But I eventually realised it referred to animal semen only”.

Incipient debate on artificial insemination was interrupted by the arrival of Janice who dumped a pile of CV’s on my desk with a judder which stirred a faint whirring from the realms of my new technology menace.

“Two bloody weeks I’ve been on this and this bunch of no-hopers is the best the British education system can throw up,” she snarled.

“And I’m getting nowhere on financial support” added Jimmy. “You’d think el presidente Cammo would make it a bit easier for us to train the next generation of the manufacturing working class wouldn’t you?” he asked rhetorically.

“Ahhh…yes…well” I stumbled realising that in all the forgive and

forgetting which had gone on in Buenos Aires I’d forgotten to brief Janice and the Greek on my latest initiative in Anglo-Argentine relations.

“Bit of an upside to the Argentine deal. Forgot to mention. A few of the Argie generals wanted us to take their sprogs on our apprentice scheme. For

A few of the Argie generals wanted us to take their sprogs on our apprentice scheme. For some bizarre reason they still see Brit engineering as the best some bizarre reason they still see Brit engineering as the best in the world”.

“A few?” said Janice justifiably suspicious.

“Ermm….about 28 I think, but after several decent Malbecs I’m not quite sure. But they’re all graduates and they’re all paid for, so look on the bright side,” I coaxed.

“Guess that solves the apprentice problem for the next three years then,” said Jimmy with a grin. “Lunch anyone?”

Any similarity of characters to persons living or dead is completely intentional.

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 23

Letters to the editor

Production lines

Letters to the Editor Tony Hague Managing director of PP Electrical Systems and chairman of MAN (Midlands Assembly Network)

There have been many excuses for why UK manufacturing has slipped down the league table of productivity when compared to our global rivals.

Government strategy, lack of available finance, poor apprenticeship schemes, high labour costs, education not reflecting manufacturing’s requirements and poor leadership. All have credence.

Some are more accurate than others.

But one thing you can’t get away from is our poor attitude towards investment in automation.

Look to Germany and you can see where we have gone wrong. Despite having higher labour and social costs, they still have one of the strongest manufacturing economies in the world. This is down to their long-term approach to investing in automation.

They are not looking for a quick return, but see spending money in this area as a necessity for achieving global competitiveness.

Lack of investment in automation is proving to be our Achilles heel. We are now so far behind some countries you fear that many industry sectors are dead and buried with no chance of return

Darren Pearce Managing Director, Powertecnique

Rowan Crozier Sales and Marketing Director at Brandauer

We face a future where energy demand could dramatically outstrip our domestic supply. By law, the Grid must balance supply and demand in the network and it is already permitted to shut down power to industrial firms to achieve that balance.

As in most walks of life, you will get good and bad candidates. It’s genuinely unfair to lay all the blame at the feet of the youngsters – it’s a collective issue we ALL need to address from schooling and education right through to industry and national promotion of engineering as a career.

The announcement last month of the agreement between the UK government and EDF to build Hinkley Point C, is a positive step for UK manufacturing.

At present new nuclear power is the closest we have to a significant low carbon solution to our energy security dilemma.

At £16 billion, Hinkley Point C is going to be a major investment, but with EDF leading the project we should be confident that it will be completed safely and effectively. France, EDF’s home nation, is the world’s most nuclear dependent nation with 58 power reactors and deriving 75% of its supply from nuclear power.

France is also the world’s largest exporter of electricity. It has invested in its energy security

At present new nuclear power is the closest we have to a significant low carbon solution to our energy security dilemma

24 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

I’ve read a lot of articles and heard numerous conversations recently criticising the quality of apprentices.

Brandauer is deeply passionate about making apprenticeships work and we understand we have to play our role.

There’s no way we’ll get the desired results without putting in the right amount of time, effort and investment.

At Brandauer, the senior management team has revisited our approach to apprenticeships and overhauled our existing programme.

We appointed the EEF as our specialist training provider and they set up assessment centres that test literacy and numeracy skills, whilst keeping a watchful eye out for what we call ‘pure engineers’.

Alongside long term investment in the development of the apprentices we select, we are hoping this approach will create the next generation of technical experts, bring the age of our workforce down and give us a competitive advantage.

It’s worked previously, with six out of the eight senior managers at Brandauer staring life as apprentices!

LEAN ON ME

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Callum Bentley, editor of the Lean Management Journal questions the implications of product recalls for Toyota’s approach to understanding the voice of the customer.

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What’s in the November issue?

The November issue of LMJ does its best to put an end to the debate around the relative effectiveness of monetary and non-monetary rewards in motivating employees.

Case studies come from: Yeo Valley Family farms Accolade Wines Ericsson Finland R&D View the issue online at www.leanmj.com

26 www.leanmj.com | November 2013 | Issue 9| Volume 16

W

ithin the lean world there are some big movers and shakers, but none bigger than Toyota, still viewed by many as the birthplace of lean and certainly the home of the Toyota Production System – the subject of countless books, articles and case studies.

But now there are chinks in the Toyota armour.

Recent years have seen the car manufacturer dogged by product recalls, calling into question the philosophy behind its vaunted commitment to product quality, safety and creating value for the customer.

Most recently, in September, both Toyota and Nissan had to withdraw massive numbers of their vehicles due to faulty parts. Nissan recalled almost 1 million of its vehicles due to a fault with an accelerator sensor, hastening to assure that no accidents had occurred due to the fault.

Toyota, on the other hand, admitted it knew of 24 “minor accidents” as a result of the automation transmission on its Sienna minivan being able to shift out of park mode without the driver depressing the brake as is usually required. This resulted in the manufacturer recalling 615,000 of the vehicles from the United States. Not to mention the further 718,000 Toyota vehicles recalled from the US earlier that month.

Despite the obvious safety concerns, this raises questions about the state of the Toyota Production System. If a faulty piece has managed to find its way into more than 1 million Toyota vehicles, what has (or perhaps, hasn’t) happened in the company’s supply chain?

More importantly, how have these incidents disrupted the critical flow of value – and appreciation of value – across Toyota’s enormous international customer base?

These questions will form the basis of the December/January Lean Management Journal, with its theme; understanding the voice of the customer.

To help shed some light on the recent Toyota recalls, editorial board members Jeffrey Liker and Joseph Paris weigh in on the debate. In his article, Jeffrey calls on his extensive knowledge and understanding of the Toyota Production System to highlight why it is not to blame for the recent recalls. Instead he explores and deconstructs input from suppliers which may be the root cause of the issues.

On a lighter note, Paul Akers from US woodworking supplies manufacturer, FastCap, shows how applying lean to his company’s bathroom and toilet proved to be the best method of ensuring his staff maintain the same principles on the shop floor.

Lean icon Daniel Jones rounds up LMJ’s It’s a Lean World section with a summary of regional lean maturity and cultures.

As I begin putting this edition of LMJ together I can’t help but wonder where lean is heading?

The community of companies adopting the management philosophy continues to grow, yet the world around those companies and the customers they serve has changed radically since the inception of Lean as a formal approach to improving efficiency and effectiveness.

With this force for evolution in mind – bring on 2014!

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Breaking through

3rd - 4th December 2013 International Convention Centre (ICC),

for

growth

Birmingham

#UKmfg has turned a corner in 2013 with real signs of a sustained recovery. #TMDC2013 brings together like-minded manufacturing leaders wishing to break-through and seek new innovative ideas for growth in 2014 and beyond.

This year’s #TMDC2013 topics include: Breakthrough to Growth Forum Integrating the Supply Chain Servitization Next Generation Manufacturing Forum Cost, Cost, Cost Manufacturing Collaboration Challenge plus interactive workshops

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Good, relevant, practical” Operations Director, Farécla Products

Superb! Inspired” Well organised event with high quality content. I feel I have benefited from attending and would recommend the event to others!”

Managing Director, Advanced Technology Services

Lean Researcher, Lean Enterprise Research Centre

Also hear from leaders of the following companies…

A really informative day and excellent workshops” Manufacturing Manager, Farécla Products

MDC SPEAKERS #TMDC2013 brings together the manufacturing experts and leading academics in their field, all under one roof for two days of inspiration and knowledge exchange.

Rt Hon Iain Wright MP Deputy Shadow Secretary of State

Dr Phil Lewis Chief Executive Officer Gardner Aerospace

Steve McQuillan Chief Executive Officer Avingtrans

Mike Patton Managing Director GE Aviation Wales

John Howie Managing Director Babcock Marine

Neil Parker Market Strategist Royal Bank of Scotland

Nigel Whitehead Group Managing Director, Programmes and Support BAE Systems

Steve Dalton OBE Managing Director Sony UK

Douglas Dawson Chief Operating Officer Caparo Group

Tony Wallis Director Toyota

Richard Wilding OBE Professor of Supply Chain Strategy Cranfield School of Management

Professor Lord Bhattacharyya Chairman and Founder Warwick Manufacturing Group

@themanufacturer

#TMDC2013

themanufacturer.com/mdc2013

’s editorial team is out and about at a wide variety of industry conferences, debates and factory tours month in, month out.

Let’s get a snapshot of the most interesting trips in October.

Model manufacturer James Pozzi discovers materials and testing machine manufacturer Zwick Roell’s German headquarters in Ulm.

T

he Germany city of Ulm was the location for materials and testing machine manufacturer Zwick Roell’s TestXpo2013. The exhibition drew hordes of customers from all around the globe to the historic city, famous for being home to Albert Einstein.

With such a rich scientific heritage, it’s no surprise Ulm continues to provide technology innovation to a range of manufacturing sectors, making the city a high-tech industrial hub.

Zwick Roell, founded in Ulm 150 years ago, is Europe’s biggest testing machine manufacturer and second only to America’s Instron. Zwick-Roell last year turned over £189m and is growing.

The range and flexibility of equipment on display at TestXpo2013 was impressive. Zwick’s vast product portfolio includes metrology equipment, fatigue testing machines and robotics.

Such product flexibility means Zwick can perform assessment and testing processes on materials as diverse as steel to the sausage meat used at Germany’s Oktoberfest.

The steel industry was where Zwick cut its teeth, but more recently it has gained experience supplying medical customers and academia, supporting scientific and industrial research.

30 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

The Ulm site, built on the site of the Zwick family’s farmhouse, is a shining palace of industry with an atmosphere redolent of a buzzing university campus – lots of excited young minds. As a whole, the facility is a manifestation of all that is best in the German industrial and economic machine.

Manufacturing processes are highly automated and most of the products made on site are destined for export.

There’s a dedicated innovation centre which opened last year, representing a significant investment in long term R&D, and the company takes in 75 trainees a year – there’s no shortage of supply in

the local talent pool and retention rates are high.

While the political, education and finance infrastructure in Germany have undoubtedly supported the creation of this manufacturing hive, there’s a lot that many British firms could learn in Ulm about commitment to manufacturing strategy formation and execution.

And, even if only on a small scale, Zwick is methodically transferring this knowhow to the UK with the Ulm facility acting as a best prective template for the company’s new manufacturing site in Brierley Hill, West Midlands.

OUT AND ABOUT

Infor: The big start-up Infor brought the UK leg of its On The Road tour to Aston Villa’s Villa Park Stadium in Birmingham in October. James Pozzi kicked about with the software vendor’s president.

P

erhaps it was the athletic environment, but this ERP technology showcase, with workshops and one-to-one briefings, had more energy than most.

Based in New York City since 2002 and now serving more than 70,000 customers worldwide,

“Hidden talent is no talent” Jane Gray looked on as UK manufacturers stole the show at the Growing Business Awards 2013.

H

osted by Real Business magazine in association with the CBI and sponsored by Lloyds Banking group, the prestigious Growing Business Awards are now in their fifteenth year.

In past years, the awards talentspotted entrepreneurial spirit in firms that have gone on to have ubiquitous, sometimes even notorious success.

Former champions include Lastminute. com, Wonga and LOVEFILM. Manufacturers including Innocent and Tyrells have also been past winners, but 2013 was the year for UK manufacturers to really shine.

From the word go, the resurgence of UK manufacturing set the tone for the evening. Lord Karan Billimaria the Indian-born founder of Cobra beer, which is now manufactured in the UK in partnership with Molson Coors, gave the opening keynote and celebrated

Infor has achieved great success in its relatively short lifespan. Its growth trajectory is based on retaining its start-up mentality according to Infor president Stephan Scholl who attended the Birmingham event.

It also sets Infor apart from drier competitors he says. the fact that British manufacturers had bounced back despite successive years in which “governments have neglected this economy”.

Across award categories, manufacturers shone, beating the best growing web, ap and service firms in the export and innovation categories and taking spots in the shortlists for Entrepreneur of the Year, and mid sized Company of the Year.

There was also a hotly contested Made in Britain category which pitted food and drink manufactures against, oil & gas and advanced engineering firms. In the end, judges could not make a clear cut and Chase Distillery, the vodka-maker that won an award for creating the best vodka in the world just two years after it started production, stood alongside Tynesidebased ONG, an off-shore construction and engineering firm, as victors. It was a striking display of the strength and diversity of British manufacturing.

I had the pleasure to share a table with the jubilant team from Oliver Valves which scooped the Export Champion of the Year award.

Founded in 1979 by Mike Oliver, now chairman, the company has experienced accelerated growth in recent years thanks to its international expansion.

Today it employs around 350 people and turns over £80m. About 80% of turnover is derived from exports with Brazil and North America being key markets. Business in the Middle East and Asia, particularly South Korea, is also thriving.

Accepting the award on behalf of the company, Bob Wright, Oliver Valves’

Infor has 3,000 new customers in the last year, 10% of which were UK manufacturers.

Mr Scholl observes “a big realisation from British manufacturers that they have to take the Ferrari route – maintain the mass production business model for driving profitability, but accept the increasing need to do more complexity. The appetite for British manufacturers to use technology to solve that is growing pretty quickly.”

Moving forward, Infor says it is placing greater emphasis on 3D technology, the internet of things and Dynamic Enterprise Performance Management. finance director said the company’s success was all down to the creativity and hard work of the employees.”

His comment picked up on the underlying objective of this event to recognise and expose the talent and sheer effort that is goes into driving productivity and economic growth.

And we should not underestimate the importance of doing this.

Oliver Valves shared its export award with Sun Mark, a distributor of European products in emerging economies which is the only company in Britain to have won five consecutive Queen’s Awards for International Trade. It’s founder Rami Ranger, who came to the UK as an orphaned, penniless Indian immigrant, summed up the imperative of recognising capability. “Hidden talent is no talent,” he said. “If you have talent, go out and tell the world what you have to offer.”

See bit.ly/GrowingBusinessAwards for more.

Join us at The Manufacturer of the Year Awards in Birmingham on December 4 for another chance to celebrate UK manufacturing talent, success and competitiveness.

See the awards shortlist at: www.themanufacturer.com/awards

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 31

Tracking your top reads on www.themanufacturer.com last month

Best of Online

The Operations Director http://www.themanufacturer.com

Morgan ousts Morgan Our biggest hitting news item in October followed the announcement that the board of Morgan Motor Company had removed Charles Morgan as chairman of his family’s company.

T

he iconic sports car company’s board of directors said the decision reflected the “scale and complexity of an increasingly global business.” Morgan has grown fast in the last five years, from £25 million in 2008/2009 to c. £45m turnover today. Exports are particularly healthy. The company recently opened dealerships in China and clearly has ambitions to grow much further.

Charles Morgan, grandson of Morgan’s founder HFS Morgan, became managing director of the family business in 2003 but was asked by the board to relinquish this position in March.

The further decision to oust him from the board of directors last month shocked many of the ex-MD’s Twitter fans.

Charles Morgan is credited with influencing and encouraging the design of new models at Morgan Motor Company in recent years, helping to revitalise the 100 year old brand with modern twists on classic Morgan features.

An ex-ITN cameraman, Charles Morgan joined the family business in 1985 and made a stir by encouraging Sir John Harvey-Jones to visit the company for his BBC Troubleshooter programme.

The visit resulted in some fairly damning comments about Morgan’s prospects, but also served as a spur for some radical manufacturing process improvements. Shortly after the programme Charles Morgan enrolled on an MBA course in Engineering and Manufacturing Management at Coventry University.

The official announcement of the decision to remove Mr Morgan from the board of directors said: “These changes will help cultivate an exciting future for Morgan which continues to reinforce the unique attributes of the brand.”

Charles Morgan remains a 30% shareholder.

See our news story at bit.ly/MorganoustsMorgan More news coming soon.

32 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

I

Our most popular online interview in October was with Gary Clark, vice-president operations for Rexam Europe.

n his interview, which is part of a new series from , Mr Clark describes his view on lean dogma, automation and his ideal manufacturing improvement initiative.

If resource were no issue, Clark says that the one thing he would want to achieve for manufacturing at Rexam is “a process design that optimises changeover speed without sacrificing output. Unfortunately in a capital intensive process, it can be very expensive to undo legacy designs.”

While mildly pessimistic about any real change having been achieved in the perception of manufacturing careers in recent years, Clark is confident of the fascination Rexam’s processes pose to school children when they visit – even if the speed of the automated production lines can be “intimidating”.

Read the full interview at: bit.ly/OpsDirectorRexam

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up The Expert Gro

On October 30 a manufacturing report was published. y This is not overwhelming news. of opportunit ra e w Since the global financial crisis e n A : g cturin d prompted a belated realisation re of Manufa searched an tu re u s F a w K U e in the UK that the concept of a the e for th ‘post-industrial economy’ was and challeng llowing expert group and fo fundamentally flawed, there has been written by the a deluge of treatise on the evolution of ject Team. ions Plc manufacturing systems, the trajectory Foresight Pro Communicat le & Wireless ab C of of manufacturing technologies and the an Chairm vacuums in the sector’s skills sets.

Sir Richard BE C But this report is different.

Lapthorne irector of the History and D e Advantage in (Chair) Managed by the Foresight ic om on Ec petitiv Professor of Programme in the Government Office for las arwick Centre on Com ofessor Nicho RC Research omy at the University of W Pr ES Science, Future of Manufacturing: A new on Ec l ba fts lo Cra the G lity, era of opportunity and challenge for the rial Sustainabi arch in Indust bridge University se Re of or ct UK, represents the culmination of a two, Cam Dire e anufacturing Professor Stev year research programme to coherently Institute for M Research, Employment r fo ns te a itu Ev st In , define and tie together the major forces llow Professorial Fe arwick e which will transform the manufacturing W Professor Ann s, University of of Economic industry in the years up to 2050.

Green ics and Head University Business om on Ec of The report was compiled by an expert Durham Professor ard Accounting, Professor Rich Finance and group of advisors from academia and Harris School industry with rounded competencies entre and n Research C Studies tio va no In UK e which could bring experienced social, e Director of th cher Professor of Enterpris, University of n economic and technical perspectives on Professor Ala Margaret That e Judge Business School th manufacturing to bear (see box).

Hughes (Emeritus) at y of The group conducted international Cambridge ogy, Universit of Biotechnol te workshops and studied 37 evidence itu st In e th Director of papers submitted by an eclectic range of is Professor Chr Cambridge Royce Plc authorities on topics including: the impact acturing, Rolls uf Lowe OBE an M l ba lo of government policies on UK manufacturing s Director of G logy Facilitie ughal e and Techno since 1945, a comparative study of capital Dr Hamid M nc ie Sc e th Chairman of investment trends in UK manufacturing and ofessor Sir Pr Council other nations, the future role of intellectual ling Michael Ster property in manufacturing, the constraints on UK exporters and far more.

The evidence explored the technological, skills-based, strategic and societal shifts which have had, and will continue to have, major impacts on the nature of manufacturing processes and the way manufacturers conduct business.

Broadly speaking, the report found that, moving toward 2050, UK manufacturing will become: Faster, more responsive and closer to customers More heavily servitised More sustainable More highly skilled

34 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

The Future of Manufacturing

These top level findings are nothing new, they echo the output of countless other studies in recent years. But the depth of detail behind the Future of Manufacturing report, and the way in which the project team has tied the evidence together, highlighting interactions between forces and pinpointing specific suggested action points, is extremely ambitious.

The report is targeted at policy makers and overtly urges government to build on current success stories by improving its access to quality manufacturing data as well as its ability to analyse and interpret that information.

One important suggested action is for government to establish US-style Office for Manufacturing which could act as a manufacturing information and analytics hub.

Access the Foresight, ‘Future of Manufacturing’ report at: www.bis.gov.uk/foresight/manufacturing

Dr Hamid Mughal Director of Global Manufacturing, Rolls Royce Plc

I

ndustrialists will find real value in the full version of this report.

Business leaders should find the report accessible. We went to some lengths to ensure this is a good general read, not too heavily technical.

Reading the report will undoubtedly leave manufacturing leaders better informed and better able to define and articulate what their strategies should be.

This is one of the most comprehensive and coherent studies of manufacturing that I have seen.

The most immediate benefit industrialists can draw from this report is to acknowledge that manufacturing, as an industry, is entering a new phase.

The moment we acknowledge this, the moment we can start doing something about it. We must acknowledge that mass-customisation,

HOT TOPIC

akers. It is use by policy m ly designed for te what their on t ula no tic ar is d g an rin e anufactu ng them to defin lpi he group for the rs, rt But Future of M de pe lea ex at two of the ol for industry to wh le ’s re ab He alu . inv be an ld also s shou ger term strategie turers: immediate and lon s value to manufac rt’ po re e th t ou ab y sa to s ha rt repo

ans Professor Steve Ev bility, ustrial Sustainani d In in h rc a rsity se Re f Director o , Cambridge U ve g in ur ct fa nu a M r Institute fo well as this

has been done as ht has put set out to achieve s ha rt po re s effort that Foresig thi at d pleased at the turing. an d don’t think that wh fac se nu es ma pr g im I have been into understandin ing go t rs or de eff anywhere before. lea ch mu port but I urge good to see this nefits from this re be t into it – it’s really en fer dif aw ies will dr Different compan at it and find out wh ad re to s on ati its g in organis rin plo . Be selfish in ex 10 it means for them most at is attracts you best companies in e wh Th to Go e th o int findings. n aw u will soon be dr e that start first – I expect yo ars’ time will be thos ye t. en nt co g surroundin re active their value ted in taking a mo to experiment with nt, the For those interes me lop ve de ills sk y g and tion philosophy toda role in policy makin ea cr s through which ism an ch me e th report describes ght improve. and how they mi ns for this can be done their Professor Steve Eva ing tainability, Institute ted in improv rch in Industrial Sus sea Re of tor ec e For those interes Dir th at y th rsit s ive ow Un e sh rt ridg po mb this re Manufacturing, Ca competitiveness, will be those in 10 years’ time ies an n mp tio co ea st cr be value riment with their that start to expe y. nce and ious philosophy toda note the converge hievable but ambit lue creation and va is. of th It’s immediately ac w to vie ion lat ted re ra take an integ pted truths in odels is will change acce for companies to m n ich tio wh ea rs cr to lue fac new va nge of interaction of a ra in understanding ion the value p for companies the way they posit d an on isi ov A fundamental ste pr ce ces away as rvi rvi se se on ing e giv tiv ll rspec any firms are sti m at th ce-driven to change their pe e rvi nc se ide in ard in our ev opportunities e th g sin ali re an of services. We he er th their product rath an accessory to . ies business strateg

I

new businesses models and new technologies will shape the future and then exploit our innovation and knowledge-base to respond to that challenge.

This will mean understanding how to maximise the assets and opportunities that government is has enabled in the industrial ecosystem.

We reviewed the role of the Catapults, for instance, in addressing a historical constraint in the commercialisation of fundamental innovations created in universities and elsewhere. How can these centres be scaled up to optimise a more coherent technology pipeline for UK manufacturing?

For me, some of the most exciting questions we asked in bringing the report together were around the implications of embedded knowledge

for generating excellence in manufacturing.

Another area which excites me is remanufacturing. This process of repair, revalidation and recertification of products clearly demonstrates that manufacturing can no longer be seen by industry, surrounding stakeholders or the public, through the narrow window of production.

One of the most professionally satisfying things for me in being part of this report was to pull together evidence of the broader economic and, crucially, social value of manufacturing and to try and extrapolate how that will evolve out to 2050.

We need to stop worrying about what UK manufacturing has lost. There are waves of new opportunity going forward – particularly in the low carbon economy.

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 35

2013 marks the 150th anniversary of London’s iconic Tube network. As the year of celebration draws to a close talks to UK manufacturers in London Underground’s supply chain about their contributions to the Underground.

T

he idea for an underground rail network in London, linking the disparate areas of a growing capital city, was spurred by the need to relieve increasing congestion on the streets above.

On January 10 1853, the Metropolitan Railway line opened. On its first day, the line carried 38,000 passengers.

Since then, the congestion challenge in London has only escalated. Today, one billion passengers use the Tube annually

36 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

and the network has expanded beyond the wildest expectations of those who built the original six kilometres of track.

Now, the Tube network covers 402 kilometres of track serving 270 stations across 11 lines.

But it’s not just the size and reach of the Tube which has transformed since it opened one and a half centuries ago.

The technology used in the running of this piece of transport infrastructure, from the trains themselves to the lifts and escalators, air conditioning systems and communications technologies – 2012 saw the arrival of Wifi on the Tube – has launched forward in recent years.

Riding on a high from its strong performance during the London 2012 Olympic Games, London Underground has an on-going quest to improve passenger experience and take efficiency levels to new highs as London’s growing population brings more and more pressure for capacity expansion in the Capital’s transport network. It’s an engineering challenge which is hemmed in by the constraints of the original Victorian infrastructure and a spaghettilike mess of subterranean tunnels and utilities riddling the London clay.

In 1900, London had a population of

6.5m. Today it is 8m and predicted to reach 9m by 2020. And these escalating passenger numbers do not even include demand from the millions of tourists who flock in and out of London throughout the year. For some of them, the Tube itself will be a major sightseeing attraction.

The pressure of expectation makes London Underground an exacting customer to work with according to Peter Doolin, vice president project management at Bombardier Transportation which supplies rolling stock to several London Underground lines. “They are really concerned with the detail.

They need to know what the impact on service will be if there is a one minute delay in a train leaving a station,” he says.

London Underground

This drives constant changes in products, signalling, maintenance and support. Bombardier, and other rolling stock suppliers, must now include real time diagnostic information for London Underground. Doolin says Bombardier has learned a lot about the provision of this kind of through life engineering service from its sister company Bombardier Aerospace.

“Our Orbiter system collects performance information about all the systems on a train,” explains Mr Doolin.

“Our team of engineers in Burton analyses the information and can use it to forewarn teams at depots that a train is coming in with, for instance, a slow moving door.” Doolin says a common cause for such faults is passenger mobile phones wedged in the door mechanisms.

But the central purpose of advancing diagnostics is to eliminate the disruption caused by a train failing in service and to monitor and optimise mean time between failure and mean time between maintenance.

Bombardier is a leading rolling stock supplier on these measures.

The Movia trains it supplied to London Underground for the Victoria Line Upgrade programme in 2011 are the most reliable on the network, averaging over 80,000km between failures – the equivalent to more than two times round the world.

Improving reliability and extended life expectancy for London Underground’s trains is testament to accelerated product and process development in relatively recent history.

Until the back end of last century, train carriages were still made with a base structure of wood – more similar to the original wooden carriages of the Tube’s first steam trains than the aluminium and steel framed carriages used today.

But it’s not just materials that are changing. Bombardier has slashed its lead times and improved reliability through abandoning traditional weldingbased assembly in favour of a rapid, huck bolt-based assembly process which brings premanufactured sections of the train swiftly together.

“Our method is about three to four times faster than traditional carriage assembly,” says Doolin who explains that sections of the carriage come into final assembly fully fitted with electric

150 Anniversary Special

Award Winning On October 17 Bombardier Transportation was named Supplier of the Year at the National Transport Awards for its partnership with London Underground.

The award was specifically given for Bombardier’s work on the upgrade and support of the Victoria Line during its operation in 2012.

The train manufacturer made 376 Bombardier Movia trains for the programme. Thanks to careful capacity optimisation work involving changes to signalling technology and procedure as well as upgrades to the rolling stock, Bombardier helped London Underground cut passenger waiting times and increase satisfaction.

The Award also recognised strong supplier support to London Underground during the intense demand period represented by the 2012 Olympic Games. looms and utilities like air conditioning.

Driver’s cabs are fitted with control desk, windows and wipers all in place and ready to roll. Not only is this faster than welding a shell and then fitting it out, it allows for more extensive subassembly testing says Doolin.

London Underground is Bombardier’s main customer in the UK – it spent around £500m with the Derby-based train maker in 2012.

But Bombardier is by no means the only supplier of rolling stock to the Tube network and bidding on contracts is fiercely competitive.

Contracting questions focus on the whole life cost of products in relation to specific applications and a variety of suppliers, including smaller players like Spain’s CAF through to industry dominators like Siemens, all have contracts for different areas of the network.

The train now approaching is - driverless

Siemens first supplied electric trains to London Underground in 1891 and has continued helping the Tube push boundaries in the world of underground rail technology ever since.

Last month, as part of a year-long series of events celebrating the Tube’s 150th birthday, Siemens launched an exhibition at its Crystal centre on London’s Victoria Royal Docks to display its vision for the future of metropolitan transport.

Its train, the Inspiro, is pricey – each carriage comes with a £1m price tag.

But an Inspiro train is also around a third lighter than those currently circulating on the Tube thanks to the use of composite flooring materials – made in Spain by Amorim Cork Composites.

The Ispiro’s energy efficiency credentials are strong too and the train is autonomous, meaning London November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 37

London Underground

150 Anniversary Special

A lean process.

Bombardier's carriage assembly process is 3-4 times faster than traditional methods

Isle of Wight-based AJ Wells has been making the unmistakable London Underground roundels since 1990

Riding on a high from its strong performance during the London 2012 Olympic Games, London Underground has an ongoing quest to improve passenger experience and take efficiency levels to new highs

38 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

Underground’s labour costs and its vulnerability to strike action would be significantly reduced if it ordered a fleet of Inspiros.

It’s a key fact which will have appealed to London Mayor Boris Johnson when he visited the Siemens exhibition. The Mayor has had his share of confrontation with the transport unions and is still keen to curb their power.

Will the Inspiro shape the future of the London Underground? No orders have been confirmed as yet but newspaper reports following the exhibition launch suggested that Siemens would consider manufacturing in the UK if Inspiro was chosen as the next generation train for the Piccadilly, Bakerloo and Central lines which are due for upgrades.

A transport of delight

How seriously these claims should be taken at this stage is dubious but Siemens is certainly aware that the current economic climate may well make London Underground – via Transport for London – look more favourably on a bid which offers

of the London Underground rolling stock used during the 2012 Olympics was manufactured by Bombardier in Derby wider economic benefits to the UK as well as meeting technical value specifications.

A spokesperson from Siemens told : “We will assess any requirements for localisation at the time of bid publication but in general are keen to incorporate the UK supply chain in contracts wherever practical and cost-effective. It is too early to say what our assembly and manufacturing concept would be for London Underground if we are selected as one of the bidders. Siemens recognises that in tough economic times there is a preference to localise as much as possible and we are alert to this situation.”

Further localisation of London Underground’s supply chain could amplify an already valuable economic force.

The network operator spends around £3bn annually with its UK supply chain, supporting an estimated 41,000 British jobs.

Many of these jobs are in small firms including H&E Smith, a Staffordshire-based manufacturer of tiles for decorations and signage. Its products are used at 23

Siemen’s Inspiro train

London Underground

150 Anniversary Special

Future opportunities for UK manufacturers London Underground has a rolling portfolio of projects which offer opportunities to supply products from office supplies to PPE gear and trains to tooling.

A full list of future tendering opportunities with London Underground is available here: bit.ly/LUFutureTenders. But a few potential opportunities for the manufacturing sector relate to the following programmes over the next three years:

Contract Opportunity

Expected Award Date

Contract Value Range

Sub-surface Railway Power Upgrade Package 5

April 2014

£25m-£50m

Supply of escalator steps and related materials

June 2015

£5m-£10m

Supply of Cable

Aug 2015

£10m-£25m

Supply of Rolling Stock Wheels, Axles and related materials

Nov 2015

£10m-£25m

Supply of tooling, tooling consumables, fixings & fastening, PPE and general consumable materials

July 2016

£10m-£25m

Supply of metals materials across several Nov 2016 categories incorporating - baseplates, bushes, cast aluminum, cast brass, cast iron, escalator chain axles, chairs, covers, escalator track, fabricated copper, fabricated steel, machined brass, machined gun metal, nuts & bolts, pins, escalator step chains, washers, escalator chain wheels, escalator newel wheels

£10m-£25m

A range of contracts for managed mechanical and electrical maintenance services and technical training are also available.

Tube stations including Camden Town, Baker Street and High Street Kensington.

The manufacturer’s CEO Charles Smith says that its contracts with London Underground are important for H&E Smith’s reputation and marketing.

Growing mid-sized manufacturer Ebac Group would agree.

Its website lists a project to design and deliver new heating ventilation and air conditioning systems for the Jubilee extension line in 1996 as a key milestone in the company’s evolution, in just over 50 years, from a one-manband to a thriving 200+ employee firm with finance for further expansion.

John Elliott MBE, the company founder, remembers the unique engineering and manufacturing

challenges which this project represented. “The space into which the heating ventilation systems needed to fit created interesting challenges throughout the process, from design to installation,” he explains. It was, Mr Elliott says, “a very unusual job, but one of which we are hugely proud”.

Sign of the times

But surely the UK supplier that gets most marketing value out of its business with London Underground must be Isle of Wight-based SME AJ Wells which makes the unmistakable London Underground signage – including the iconic red roundel which has stood as London Underground’s logo since 1908.

For more on advances in the technology use by London Underground see ‘Going Underground’ bit.ly/Undergroundtechevolution

40 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

Cedric Wells, director at family-owned and run AJ Wells comments: “The Underground roundel is an instantly recognised graphic and known across the globe. As a British manufacturer we are very proud to be producing such iconic and prestigious signage for London Underground.”

AJ Wells secured its first contract with London Underground in 1990 and has since supported the redesign and refurbishment of stations across the network. Its vitreous enamel signs won favour with London Underground for their hard wearing qualities. Made in a process which fuses glass to steel in an 800˚C furnace, the material has a long lasting surface finish and requires little maintenance.

Business with London Underground has brought growth to AJ Wells which started out as a 3-man band in 1972 but now supports over 100 employees working out of a 50,000 sq ft facility.

London Underground accounts for almost 50% of its business and AJ Wells has made a range of investments to ensure it continues to offer a competitive, fit-forpurpose offering to its major customer.

Over the last five years the signage maker has invested £3m in machinery, tooling and lean training to expand capacity during a period of significant upgrades and refurbishments across the Tube network. The investments have made AJ Wells more efficient and slashed lead times according to Mr Wells.

Fast turnarounds are likely to become even more important thanks to this year’s anniversary celebrations which have seen AJ Wells partner with Transport for London to provide consumer merchandise as well as commercial products for the first time.

Via its online shop www.SignsoftheCity.co.uk AJ Wells sells authentic Underground roundels to the general public. The shop was launched in October as part of the London Design Festival and also sells London Underground branded products made in the UK by Kirkby Fabrics and Fired Earth.

This growing confidence in exploitation of its popular brand belies the optimistic outlook of London Underground as it celebrates its 150th birthday.

And with more line extensions, upgrades and optimisation work on the cards, the Tube’s supply chain is no doubt celebrating the milestone with sincerity too.

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INTERVIEW A new age of heroes Philip Greenish CBE, CEO of the Royal Academy of Engineering talks about the transformed value of engineering in the last decade and his vision to make heroic engineers household names.

I

n Britain ten years ago, Philip Greenish, like many reading this magazine, harboured a love that almost dared not speak its name.

If mentioned in the hallways of power, it would cause people to shuffle their feet uncomfortably and cough to cover awkward silences.

Philip Greenish loves engineering and has a passion for the brilliance of his fellows in the profession.

Of course, with a naval background, Mr Greenish fared better than some engineers a decade ago – at least he wasn’t a manufacturer. “If engineering in general was viewed as somewhat dysfunctional, manufacturing certainly was not spoken about in polite company ten years ago,” he says as he talks about the changes he has seen since becoming CEO of the Royal Academy of Engineering (RAEng) in 2003.

“The landscape has transformed,” he sums up. “When I came to the Academy, engineering was viewed by outsiders as a declining profession. We were not listened to in Whitehall. Our advice on matters of public policy was never sought out.

42 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

“Now, government is constantly coming to us and seeking out experts from our fellowship to advise on critical matters of energy, health and environmental policy, for example.”

How has thins change come about?

“The financial crisis helped to spur a change of perspective. There is now an overt recognition that we need to reinvigorate our productive economy, that we have to make our way through hard graft and making things.”

It’s now an accepted truth in government that engineering capability is central to this says Greenish who is broadly positive about the efforts being made to rebalance the economy – including bridging skills gaps.

As a long term player in the evolution of industrial strategy, Greenish evenhandedly recognises that work on rehabilitating study of STEM subjects began many parliaments ago. “You can see the roots of many of the initiatives to promote apprenticeships, STEM skills and vocational training for business and industry in the work of Lord Sainsbury ten years back,” he says.

But RAEng’s CEO is not complacent.

A doubling of apprenticeships and increasing uptake of STEM subjects at A Level does not mean that a job has been done on skills development for industry.

“We welcome the increase in apprenticeship numbers, particularly now that there has been a realisation that it is not just a numbers game, but also about ensuring quality skills development.

“But there are still too many schools that just don’t get it when we go in and talk about the value of engineering and manufacturing and the prospects they offer. In particular, there are still far too many schools encouraging young women to go into ‘traditional’ careers which are, frankly, low value to them.”

Creator and coordinator

As you would expect for an organisation which exists to prove the value of engineering to society, RAEng runs a wide range of initiatives to tackles skills gaps and alter outdated perceptions of the industry’s in which engineering skills are applied.

Education for Engineering or E4E is the central strand to this remit, but

Philip Greenish CBE, CEO, Royal Academy of Engineering

INTERVIEW

There are still too many schools that just don’t get it when we go in and talk about the value of engineering and manufacturing and the prospects they offer

there are other programmes which focus on developing design enthusiasm and entrepreneurialism, such as the Ingenious programme.

RAEng also partners with relevant subject associations to influence the development of curricula for STEM and related subjects at school. It recently hosted a workshop with the Design and Technology Association to formulate non statutory guidance for D&T teachers delivering the new programme of study. This includes challenging concepts for contextualisation and teaching the basics of embedded electronics and user centred design at key stages 1-3.

The Academy is also supporting the launch of a new programme to encourage the professional development of women in industry – thereby increasing the number of senior female role models and attracting more young women to follow in their footsteps.

The first Everywoman Advanced Manufacturing and Engineering Academy event takes place this month.

RAEng’s passionate and proactive approach to developing schemes that address the skills and image problems of engineering in its many different environments is commendable. But, in a world where every skills council, trade body, LEP and more are spouting an initiative a minute, wouldn’t it be more helpful for RAEng to use its fairly unique position (see box) to act as a coordinating and rationalising hub for the UK’s crowded landscape of industry skills programmes?

“Your question is very fair,” responds Greenish. “We and others have tried many ways over the years to consolidate activities to get more impact. Currently, what we get is the sum of many, many parts – at best. We need to find a way of amplifying the input to create a much more substantial output.”

Philip Greenish with RAEng president Sir John Parker and senior fellow HRH Prince Philip at the opening of Prince Philip House

The Royal Academy of Engineering There are 36 professional engineering institutions in the UK. Not to mention a gamut of additional trade bodies, lobby groups, industry consortia and other sector support organisations.

In this crowded landscape, does the Royal Academy have a distinct role? Or could it be included in a broad consolidation of industrial support organisations to achieve a more navigable landscape for employers?

Greenish thinks not.

“There is a role for everyone. The professional institutions engage with government and lobby to raise the profile of engineering in a similar way to the Academy. It is right and proper that their members want to have a voice in these matters.”

But in the case of the Royal Academy, its engagement with government comes from a very different perspective – one that lends it unique power Greenish argues.

“Whereas professional institutions and trade bodies engage with government as part of a service they offer to their members, for us it is quite the contrary. The Royal Academy does not exist for the benefit of its fellows,” he explains.

“It is a great honour to be asked to become a fellow. But when that invitation is extended, we make clear that the nominee is invited to serve.

“Being a fellow is a status which carries few perks. Fellows pay a small membership fee for the privilege of having me, or a member of our excellent staff here, call up and say we have a job for them. They won’t get remunerated and it’ll likely be hard work, but its part and parcel of being a fellow of the UK’s national academy of engineering. It’s about making a contribution to society.”

Moving goalposts

However, this is easier said than done, not least because the discipline RAEng is trying to represent is continuously morphing and advancing. In short, Greenish says he, and the Academy has its work cut out in keeping up with new applications for engineering and hunting down leaders in new fields before it begins

thinking about how to encourage the development of a skills base for that field.

“We carefully aim to represent the whole spectrum of engineering,” explains Greenish. “But while this was quite easy twenty years ago, now it is less easy to define. It’s hard to find new fellows to represent emerging disciplines and break new ground with them.

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 43

Philip Greenish CBE, CEO, Royal Academy of Engineering

INTERVIEW

Prime Minister David Cameron at the launch of the Queen Elizabeth Prize for Engineering, administered

by RAEng

Philip Greenish CBE CEO, The Royal Academy of Engineering 1969:

Joined the Royal Navy

1972:

Graduated from Durham University with a degree in Engineering Science

1974-88:

Served as a frontline engineer at sea

1994:

Appointed military assistant to the chief of defence procurement at the Ministry of Defence

1997:

Appointed director of operational requirements, sea systems, MoD

1999:

Appointed rear admiral with responsibility for engineering, personnel and logistic support for the Royal Navy and Royal Marines.

2003:

Retired from naval service, received CBE and became CEO of the Royal Academy of Engineering

Philip Greenish also holds a wide range of non-executive positions and trusteeships. He is a Council Member of Southampton University, a trustee of EngineeringUK, the Science Media Centre and the Daphne Jackson Trust.

Philip also recently joined the editorial advisory board of The Manufacturer magazine (p2).

44 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

“Take synthetic biology. This is a core new engineering discipline and there a small number of very significant engineers working on synthetic biology in this country. The number is rapidly growing and it is an area with a very important future,” enthuses Greenish.

We can be heroes

The CEO’s fascination with all kinds of engineering applications is palpable, but this passion leads to frustration when talking about the recognition individual engineers get in the UK. For while Greenish is positive about the appreciation of the value of engineering by government, he is adamant that individual engineers behind advances in living standards, environmental sustainability, infrastructure and communications technology should benefit from more celebrity.

“We have heroic engineers working in the UK, but they are not household names.”

Greenish envies the US its celebration of the engineers who have founded mega corporations. “Look at Google.

This is an engineering business. It is run by engineers who are familiar names with the public in the US. Take Bill Gates. I hold him in the highest respect and, whatever you think of his corporation, it cannot be denied that he is a heroic engineer of the modern age.”

In the UK there are perhaps heroic engineering firms says Greenish. But the architects behind them are not properly lauded.

“We are going to change this,” he states, flatly ambitious.

The perfect project asked Philip Greenish what engineering project he would most like to be a part of today if he were still a practicing engineer in the field.

“There are two. I was director of requirements at the Ministry of Defence when we got first approval for the new fleet of [Queen Elizabeth class] aircraft carriers.

“These 65,000 tonne ships are now coming together on the Firth of Forth and will represent simply staggering capability.”

“But this interest really harks back to my past life in the Royal Navy. I would rather position myself toward the future and when I look at the transformations that are emerging in our world I would love to be part of the engineering solution to our healthcare challenges.

“The trajectory of healthcare provision has to change – it is unaffordable. Recent problems in our healthcare systems have brought this home abruptly.

“But there is some brilliant engineering happening to resolve this threat. Take telemedicine and the ability, through new products and systems, for people to remotely monitor their chronic conditions.

This will transform healthcare, as will targeted drug design and delivery.”

How can you deal with the skills shortage?

How can you improve quality?

How can you grow your business?

How can you increase your company’s competitiveness?

How can you give your staff greater job satisfaction?

How can you decrease wastage in production?

The Manufacturer magazine in conjunction with the leading automation equipment suppliers has established The Automation Advisory Board to educate ownermanagers and factory directors about what automation equipment can do and the benefits it can bring to UK manufacturers.

where the capital equipment could make a profound difference to winning contracts.

Companies in non-auto sectors, who are unfamiliar with the range, capability and simplicity of automation kit, need and deserve to know what automation options are available.

Automation needs to rise to the board level in companies of all sizes, but especially larger SMEs

In 2013 it is a business risk not to be informed about the benefits this technology can bring.

Automation is not the question, it is the answer!

For more information contact Henry Anson, Managing Director, Sayone Media (publisher of The Manufacturer) E: h.anson@sayonemedia.com T: +44 (0)20 7401 6033

The Automation Advisory Board is proudly supported by: ABB, Festo, Rockwell, Kuka, Omron, Staubli

Automation can provide the answer to all these questions and many more…

See page 66 of this issue of The Manufacturer for the first in a series of automation thought leadership articles from AAB.

6Osecond Sir Roger Bone, President, Boeing UK

interview

Sir Roger Bone President, Boeing UK This interview was conducted following Sir Roger’s presentation to delegates at Export Connect 2013, an Accelerated Growth Conference. A longer version is available at: bit.ly/SirRogerBone

: Explain Boeing’s relationship with the UK aerospace supply chain. Does it matter to you that your suppliers are export savvy?

Our dependence on the UK supply chain is immense. We have links with over 250 companies in the UK and last year we spent $1.2bn on that supply chain.

So for us it is vital that those companies remain healthy and innovative in everything they do. It is also important that companies seeking to play a part in our supply chain are internationally mature – that they understand the dynamics of global business. We expect smaller companies that approach us, or companies in our supply chain, to have done their homework. They must be very clear about the niche that they have to offer.

Smaller firms should never be shy of going to the global ‘big boy’. Like most other big companies, Boeing has a clear mechanism for making this happen.

Our process is called the International Strategic Partnership Programme. : The Asia-Pacific region represents a growing customer base for Boeing. The region also has an increasingly confident aerospace manufacturing sector. Is this a threat to the UK’s supply chain?

It means that UK manufacturers must be sensitive to global competition. Boeing now has much more choice about where we go for the products that are important

46 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

to us. The UK supply chain will have to work hard to sustain the competitive edge that has brought us here.

It starts on a good basis. UK aerospace manufacturers hold around seventeen per cent of world trade in aerospace products and that is not something which has happened by accident. It is because of the enormous concentration of expertise and experience here.

But it will undoubtedly be tough for the UK to maintain that degree of dominance. In principle there is no reason why it shouldn’t – but it will take constant investment in R&D and the human skills base. : The Bribery Act has recently been blamed for hindering growth of UK exports. Do you have some words of advice for companies on how to approach compliance?

There are several things that are not particularly difficult to do with regards to the Bribery Act that even small companies can accomplish.

It is very important that company leadership takes a strong and consistent stance that the only way to be successful is to adhere to strong ethical business practice. Every business must think carefully about its own particular vulnerabilities with regards to the Act. There has been a lot of good guidance published by the Ministry of Justice which small companies should familiarise themselves with.

Our dependence on the UK supply chain is immense.

Last year we spent $1.2bn on that supply chain

: You were the British Ambassador to Brazil between 1999 and 2004 and Ambassador to Sweden before that. How well do the embassies support the growth of British business overseas?

That is a prime function of the embassies. When I was appointed Ambassador to Brazil, Robin Cook, then Foreign Secretary, told me clearly that he would measure my success on how helpful I was to British businesses in advancing their interests in the country.

The work of UKTI today to support the growth of exports is not new. It has been a core purpose of the diplomatic service for the past 20-30 years to develop commercial diplomacy. I think we do it better now than we did 30 years ago however.

One of the best developments has been an increase in local employment overseas in embassies and missions – rather than sending people from the UK.

MDC through the years Putting MDC2013 in context, Jane Gray reflects on past findings at the Manufacturer Directors’ Conference to express a picture of accumulating confidence and maturing debate.

launched, the Manufacturer Directors’ Conference in 2009 and, each year, the magazine has captured highlights, mood and delegate feedback to reflect the interests and concerns of UK manufacturing leaders.

Across the years, while core themes have remained largely consistent, context and maturity of debate has changed significantly:

MDC 2009, November 12, London

I

n November 2009, in the thick of a global financial crisis, UK manufacturing was in contraction and held its first Manufacturer Directors’ Conference.

It was a somewhat sombre affair which focussed on cost cutting and where the language, though doggedly committed to the importance of UK industry, was far from optimistic.

The sustainability debate at this conference was nascent – gravitating toward discussion as to whether electric cars would ever make it big, rather than seriously addressing the imperative for manufacturers to become more energy efficient in their operations. This is despite the inclusion of two presentations from Professor Peter Hines, then of Cardiff University’s and Lean Enterprise Research Centre, and Andy Wood, MD of Adnams, the Suffolk-based brewer, on the merit of combining green and lean strategies.

A tone of growing urgency was expressed throughout the day with regards to skills gaps, but there was little talk of apprenticeships as solution or of employer activism in taking responsibility for skills development.

One delegate from a large London further education college observed, “It’s no longer good enough to say young people are not being taught the skills they require in industry. Go that extra step and say what those skills needs are to those willing to provide them.”

It is noteworthy that subsequent years have seen the initiation of Employer Ownership of Skills and a broad effort to reform the funding and training design mechanisms for apprenticeships, and other vocational training, in order to give employers more control.

48 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

MDC 2010, November 18, Warwickshire

T

he coalition government was bedding-in, promising cuts to corporation tax, the introduction of a Patent Box and enhanced capital allowances.

The mood was lifted at this MDC by a period of recovery in UK manufacturing output over several consecutive months. The PMI result for October came in at 54.9.

Early hints of the potential benefits to industry of a new education model were communicated at this conference where Jim Wade, principal of the JCB Academy talked about the establishment of what we now know as University Technical Colleges.

There was a lot in this day’s agenda that addressed the engagement of workforce in change and execution of strategy. There was also an early attempt to acknowledge the dawning of a new era of manufacturing in which production was not the central concern of the manufacturing enterprise. Chris Daffy, founder of the Academy of Service Excellence spoke about the growing importance of an integrated service culture in manufacturing operations. However, delegate feedback showed that attendees were still primarily concerned with lean manufacturing techniques and enablers.

MDC

MDC 2012, November 21, London MDC 2011, November 8-10, Manchester

M

DC expanded to include factory tours and ancillary workshops in 2011.

This conference included a serious acknowledgement of exports and the need for a global outlook as fundamental to UK manufacturing’s success.

While previous conferences had addressed global manufacturing trends, the attitude had generally been more defensive than offensive – prone to seeing globalisation as a threat rather than an opportunity.

The atmosphere of camaraderie between manufacturers was notable. There was a distinct step up in the dynamism of networking and the readiness of delegates to take the opportunity to meet peers in their community, either for exchange of best practice, or simply for alternative perspectives on business outlook.

There was also defiance. When one speaker commented that “UK manufacturing is in a mess,” several delegates got to their feet with reposts like “Manufacturing is not in a mess. Strategy is in a mess.”

While lean manufacturing remained a core element within the 2011 agenda, speakers like Juergen Maier, MD of Siemens UK Industry Sector, began to hot up debate on the need for more capital investment and automation. He remarked on the non-competitive consequences of a “make do and mend” philosophy to sweating assets in UK manufacturing.

This remains a key issue for UK industry – with the notable exception of the automotive sector which has invested significantly, driving a record year for automation sales in 2012.

See p82 for more on UK manufacturing automation.

S

eptember 2012 saw the announcement of a manufacturing strategy by the Department of Business Innovation and Skills and at MDC2012 newly appointed business minister Michael Fallon promised that government was making fresh effort to coordinate departmental objectives so the “every department is a department for growth”.

The was agreement at this conference, straplined Navigating today, ready for tomorrow, that UK industry was on the brink of better times, but optimism was still tentative – largely due to extreme

MDC 2013, December 3-4, Birmingham

I

n the lead-up to MDC2013 there is a bigger spring in the step of UK manufacturing.

Leaders are still cautious, but they are more confident of their industrial environment. Many are praising the positive work of the Catapult Centres in accelerating the commercialisation of scientific research and the TSB in helping smaller firms bridge the so-called valley of death, in order to grow in scale and capability.

Skills gaps remain a core issue, but there is far more industry ownership of this challenge in 2013 than in 2009. At MDC2013 hopes this will be demonstrated through a dedicated skills workshop including involvement from around

Manufacturing Leadership

unrest in the Eurozone and not only in Italy, Greece and Spain. As Ross Walker, senior economist at Royal Bank of Scotland pointed out there were “clear signs of contagion in semi-core countries such as Belgium and France.”

With UK exports beyond the Eurozone still struggling to grow, this fear remained a confidence inhibitor. Mr Walker urged cashrich “non-financial corporates” and midsized firms to help consolidate confidence by investing the “unprecedented cash piles,” on their balance sheets. A year on, there has been little movement on this with banks confirming that firms are sitting on around £500bn which might be ploughed back into business investment.

There was a notable increase in the maturity of debate around energy and sustainability at this conference. One delegate noted, “there was an advance from a focus on reducing consumption – through steps like switching to energy efficient light bulbs and optimising voltage – to looking a total energy strategy and reducing exposure costs and security of supply”.

30 under 25 year olds who have been invited to clarify the remaining perception barriers about the industrial careers and what really helps in breaking them down.

On investment, while intentions are strong, realisation – especially in capital equipment – remains low. As was predominantly the case in 2009-2011, some continue to blame access to finance for this, though figures released in October showed that British SMEs are increasingly resourceful in finding non-bank finance thanks to a proliferation of alternative finance options.

As escalating energy costs hit the headlines this year, MDC2013’s focus on integrated manufacturing strategy, not through the narrow definition of production, but inclusive of skills, supply chain, product, process and service development, is highly relevant.

This year’s agenda reflects and supports a proactive sector finding innovative, strategic solutions to its challenges within an industry infrastructure which is undoubtedly better enabled that the one we knew four years ago.

See p28 for MDC2013 agenda highlights or go to www.themanufacturer.com/mdc/2013 would like to thank RBS for consistently acting as headline sponsor to MDC from 2009-2013.

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 49

Andrew Harrison, Managing Director, Midlands and East of England, Royal Bank of Scotland takes a look at the key drivers behind the recession-defiant resurgence of manufacturing in the Midlands and assesses what needs to be done to sustain the region’s growth.

50 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

T

he Midlands is buzzing. Not even three years after a period of unprecedented economic challenge, Midlands manufacturers have defied the overall gloom and doom.

They are playing to their traditional strengths and are helping once again to make headlines with strong export and sales figures.

The only way is up

Midlands manufacturers are not looking back. The 23% decrease in the region’s manufacturing output between 1997 and 2010, the highest percentage anywhere in the UK at the time, belongs to the past.1 “Midlands manufacturing is resurgent”, comments RBS’ Andrew Harrison. According to the quarterly ‘Manufacturing Outlook’, output and orders have reached record levels during the third quarter of 2013.

50% of companies in the East Midlands reported increased output, up from 31% in the previous quarter and the highest for more than three years. Order books are at their highest level in the survey’s 15-year history with 55% experiencing an increase, higher than any other region.2 Export numbers support the positive trend too: During January and June 2013, East Midlands exports reached £10.2 billion, an increase of 1.6% compared with the same period in 2012 – one of only four regions to have recorded export growth during the first six months of 2013.3

The homemade Midlands manufacturing miracle

ROYAL BANK OF SCOTLAND

grown 80% and employment 40%.

The annual Midlands Aerospace Alliance survey of member companies published in June shows that business turnover grew another 17% and employment by 8% in 2013.4 Other sub-sectors are following suit: 50% of the Top Ten fastest growing firms in the Midlands over the last three years are High Value Engineering (HVE) companies. On average they increased profits at a rate of 43.8% per year.5

The supply chain challenge

Strong performers across all manufacturing sectors

The Midlands automotive sector, which accounts for around 30% of the UK car production, has had a significant impact on the region. In particular the strong growth of Jaguar Land Rover (JLR) has sent a powerful reminder that the Midlands are at the centre of a rapidly expanding UK autos industry, comments Richard Hill, RBS Head of Sector Automotive, adding that global vehicle manufacturers have invested £8 billion in the UK over the last three years, with a major share going to the Midlands. Hill is positive that the sector’s future is bright, citing the Industrial Strategy – jointly developed by industry and government for the industry - as a key differentiator that will ensure sustainable growth.

The aerospace industry in the region has equally boosted growth over the last few years while the national economy has been flat: Since 2005, Midlands based aerospace business turnover has

Midlands suppliers have the opportunity to claim a bigger share of additional OEM requirements, which is estimated by the Automotive Council at £3 billion. As one of a raft of measures to facilitate this, the Government has set up a new Automotive Investment Organisation (AIO) within UK Trade & Investment (UKTI) funded by up to £3 million over the next two years.

However, there is still work to be done.

“The domestic supply chain needs to expand to support the opportunity for the OEMs ”, says Hill. On average only a third of the parts that go into vehicles manufactured here are sourced from the UK.6 Midlands suppliers have the opportunity to claim a bigger share of additional OEM requirements, which is estimated by the Automotive Council at £3 billion. As one of a raft of measures to facilitate this, the Government has set up a new Automotive Investment Organisation (AIO) within UK Trade & Investment (UKTI) funded by up to £3 million over the next two years. The AIO’s aim is to improve the image of the UK as a place for automotive suppliers to invest and provide first contact to key potential investors. In addition, the automotive industry and banks have developed a high-level framework that sets out principles for how they will work together to provide supply chain finance.7 “The rapid increase in pace has come as an electric shock to many manufacturing suppliers not just in the automotive industry,” Harrison has observed. Rupert Boddington, RBS Senior Director Corporate Coverage, explains that lower tier suppliers need to increase capacity and capabilities now in order to fulfil demand and to produce at the level of quality required by OEMs. First signs that SMEs are willing to invest in their business is revealed in the latest Manufacturing Advisory Service (MAS) Barometer. 57% of the 89 manufacturing SMEs questioned across the West Midlands expect to spend more on new machinery and premises over the next six months and 39% of the firms indicate that they would up their spend for new technologies.8 Boddington also remarks that some suppliers will need to consider organising themselves differently, November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 51

The homemade Midlands manufacturing miracle

ROYAL BANK OF SCOTLAND

because “OEMs would rather collaborate with fewer big suppliers than a large number of small firms in order to keep their transaction costs low.” We are likely to see increased collaboration between smaller suppliers through the creation of more consortia, JV’s and ultimately mergers, whereby SME’s combine capabilities and increase their chances to win more contracts from OEMs.

Learning powerhouse

The impending skills shortage in the manufacturing sector represents another major challenge on the road to sustainable regional growth says Harrison. “Over the next five years there will be around 96,000 Engineering jobs nationally that need to be filled.”

However, a number of manufacturers have already launched training initiatives to tackle the issue as Harrison points out. The Apprenticeship Academy at Rolls-Royce in Derby is one example.

It now offers over 200 apprenticeships each year.9 Jaguar Land Rover announced that it would expand its new education programme to involve engineers from over 2,000 companies10 and EEF opened the doors of its new Apprentice & Skills Training Centre in Birmingham in September.11 “We also have a strong academic base in the Midlands and a long history of collaboration between academia and manufacturers helping to continually improve skills levels,” Harrison notes.

References 1

Office for National Statistics, January 2012

2

EEF/BDO, September 2013

3

UKTI, September 2013

4

Midlands Aerospace Alliance, June 2013

5

CIB/Grant Thornton, June 2013

6

Automotive Council, June 2013

7

Automotive Council, June 2013

8

Manufacturing Advisory Service Barometer, August 2013

9

The Apprenticeship Academy, 2013

The future looks bright

With their make it happen attitude, the Midlands manufacturers will continue to turn challenges into opportunities,” Harrison is convinced, pointing at the Ernst & Young UK Goods Export Monitor that predicts an 8.1% growth for goods exports from the West Midlands between 2012 and 2017, growing faster than any other UK region and with annualised growth of 4.8% in engineering goods exported, worth £6.9 billion in 2017, compared with £5.5 billion in 2012.

The East Midlands is following this trend, with forecast growth of 6.1% by 2017.12 Harrison concludes: “We at RBS are committed to helping Midlands manufacturers achieve long term sustainable growth in the knowledge that it will bring further investment into the region, create more jobs and increase public spending all of which will benefit the region and the community as a whole.”

52 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

10 JLR, June 2012 11 EEF, September 2013 12 EY, August 2013

further information To find out how RBS can support your manufacturing business in the Midlands please contact: Andrew Harrison Managing Director Midlands & East of England RBS Corporate & Institutional Banking Birmingham T: (0)121 262 7410 E: andrew.harrison@rbs.co.uk Rupert Boddington Senior Director Corporate Coverage RBS Corporate & Institutional Banking Birmingham T: (0)121 262 7419 E: rupert.boddington@rbs.co.uk Richard Hill Head of Sector – Automotive, UK Sector Coverage, RBS Corporate & Institutional Banking Birmingham T: (0)7789 616201 E: richard.hill@rbs.co.uk

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T

Image courtesy of Alstom

Servitization explained Professor Tim Baines of Aston University’s Centre for Servitization Research and Practice explores the models and methods available to manufacturers for gaining revenues from service provision.

54 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

he world once seemed simple; manufacturers made things and services companies did things for us.

Today, increasing numbers of manufacturers compete through a portfolio of integrated products and services. This is a servicesled competitive strategy, and the process through which it is achieved is commonly referred to as servitization.

Celebrated exponents of such strategies include Rolls-Royce, Xerox and Alstom; all offer extended maintenance, repair and overhaul contracts where revenue generation is linked directly to asset availability, reliability and performance.

Servitization is much more than simply adding services to existing products within a few large multi-national companies. It’s potentially about viewing the manufacturer as a service provider that sets out to improve the processes of its customers through a business model, rather than product-based, innovation. The manufacturer exploits its design and production competencies to deliver improvements in efficiency and effectiveness to the customer.

Manufacturers have traditionally focused their efforts on product innovation and cost reduction.

Companies such as Porsche and Ferrari are celebrated for bringing new and exciting designs into the market, while companies such as Toyota are held in awe for their work with Lean production systems. These successes foster a perception that the only way for manufacturing to underpin competitiveness is through new materials and technologies, faster and more reliable automation, machining with more precision, waste reduction programmes, smoother flow of parts etc.

Competition through services

Services offer a third way to compete.

This is not an ‘instead of’ or ‘easy option’ for companies that are struggling to succeed. Indeed, delivering advanced services can require technologies and practices that are every bit as demanding as those in production.

Neither do they require the manufacturer to abandon its technology strengths; instead it can build on these to help to ensure long term and sustained benefits.

Consequently, there is a growing realisation that such services hold highvalue potential.

Servitization

Conventional manufacturers can struggle to appreciate the value of services, seeking such simple explanations of servitization that they fail to appreciate potential benefits. This is often the case with organisational rather than technological innovations. In the early 1980s it was difficult to imagine that ‘Just-in-time’ would endure, and yet today it’s hard to identify a single manufacturing company that has not been touched by Lean techniques in one way or another.

Servitization is a similar paradigm shift. The word ‘service’ can be used in different ways. It can refer to how well an action is performed – “that was good service” – or to an activity, like maintenance, spare parts provision and so on.

Servitization relates to this second interpretation; activities that a manufacturer can perform to complement its products. All manufacturers offer services to some extent, but some establish market differentiation through these, following services-led competitive strategies.

Services offer a third way to compete. This is not an ‘instead of’ or ‘easy option’ for companies that are struggling to succeed

Servitization is a term given to a transformation. It is about manufacturers increasingly offering services integrated with their products.

Of these, some manufacturers choose to servitize by offering an extensive portfolio of relatively conventional services, while some move almost entirely into services, largely independent of their products, by providing offerings like general consulting. Others move to deliver advanced services.

Advanced services

Advanced services are core to servitization. Xerox’s ‘Managed Print Services’ is one example; rather than simply selling equipment, the company offers ‘document solutions’ to customers.

For a typical customer, such as BA,

Manufacturing Leadership

Types Of Services A Manufacturer Can Offer Advanced services often feature: pay-for-use, risk management, long-term contracts, and increasingly a ‘cost down’ commitment Services supporting customers Advanced Services

Intermediate Services

Services supporting products

Base Services

Outcome focused on capability

Outcome focused on product condition Outcome focused on product provision

Made to Serve: How manufacturers can compete through servitization and product service systems by Tim Baines and Howard Lightfoot.

Xerox provides project management, implementation of new technology, and management of third parties.

There are various types of advanced services, and a variety of terms is used across industry to describe these (e.g. availability contracting, performance contracting, managed services, solutions). However the outcome of these contracts is, invariably, a capability for a customer to perform a business function or process. This is distinct from conventional services where the outcome is product ownership and maintenance of an asset’s condition.

Particular contracting features are often coupled to advanced services.

There are four key features; the first three of which are relatively widespread: Pay-for-use revenue payment: pay-perclick, pay-as-you-go, power-by-the-hour etc. are all terms used to refer to advanced services. For instance, in its contract with Xerox, Islington Borough Council receives a ‘click charge’ each time a document goes through a machine.

Long-term contracts: Contracts of fewer than two years are rare. The Heart of England NHS Foundation Trust has a ten year contract for its pathology laboratory facility, while in power generation, GDF Suez enters into contracts of 20 to 25 years.

Risk management: The provider is responsible for ensuring asset availability, condition and performance. If an Alstom train is late, penalties of £600 per minute of delay are incurred if the fault is with the OEM. Commitment to on-going process improvement and cost saving: this features increasingly in advanced services contracts When these features are coupled with the principle of delivering a capability, contracts become sophisticated and demanding. Many existing contracts are relatively large, which is perhaps part of their appeal to OEMs. MAN Truck and Bus UK has 10,000 vehicles under contract, and expects this to grow by 50% over the next three to five years, to represent £200million of business. The Heart of England NHS Foundation Trust’s five-year contract in its pathology laboratory is valued at £20M per year.

Advanced services are however not only for large organisations. They can hold high-value for manufacturers big and small. They can help strengthen relationships, lock-out competitors, and grow revenues and profits. We delve into this impact in our next article on servitization.

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 55

EEF Insights

Manufacturing Leadership

According to EEF, almost 45% of manufacturers will focus on product development to break into new markets and keep ahead of competition for the remainder of 2013 and into the start of next year.

The scope of innovation investment is also broadening. Product development is central to the manufacturers’ plans, but so too are market innovation and other means of capitalising on growth opportunities.

Innovation for growth

A

fter a challenging few years, many indicators are pointing to a bright future for the manufacturing industry.

According to EEF, the sector has accounted for a fifth of economic growth since the recession ended.

But manufacturing businesses continue to face a number of challenges in order to operate and grow successfully. The need to have an efficient supply chain and produce quality, competitive end products and services, places immense pressure on businesses to achieve a difficult balancing act in a persistently challenging economic environment.

Sector insight carried out by NatWest, shows that almost three quarters of

56 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

Mark Eastwood, head of manufacturing for Commercial Banking at NatWest and RBS puts manufacturing innovation investment intentions into context. manufacturers still believe the economic climate is the main obstacle for their business. Furthermore almost two thirds state that both legislation and regulation create challenges.

Necessity is the mother of invention

But despite these obstacles manufacturers are expressing strong investment intentions.

In the August 2013 NatWest and EEF Innovation Monitor Report, 96% of manufacturers said they had engaged in some form of innovation in the past three years – a fact which displays dedication to preparing for a brighter future during difficult times.

Supporting good intentions

It is the role of the banks to support customers in achieving these ambitions; not only through product solutions but through providing advice and support.

Our Manufacturing Team at NatWest and RBS has been working closely with businesses to help them develop their business and achieve their ambitions.

We have seen the number of lending applications increase which shows a hunger for growth.

Our customers have also told us they would like more assistance in understanding how technology can improve efficiency, gain support in new product and service innovation and receive support for funding capital expenditure.

In regards to the latter, our data shows around 25% of manufacturers are looking to increase borrowing in the next six months and 37% are looking to increase their capital investment.

When carrying out investment, businesses tend to work together.

The EEF Innovation Monitor suggests businesses tend to work with either their customers or the companies that sit within their supply chain and this collaborative approach appears to be of benefit.

Whilst innovation and investment are not easy strategies to master, the report suggests 53% of businesses are either ‘good or excellent’ at realising a return on their investments.

FURTHER READING: The EEF-NatWest Innovation Monitor 2013 was published in August. Read the report in full at bit.ly/InnovationMonitor2013

Snapshots

Manufacturing Leadership

Picture perfect Britain and the EU

EEF’s report Manufacturing; Our Future in Europe – Stronger Leadership, A Stronger Economy urges government not to forget the power of the European trade bloc in its scramble for opportunity in emerging markets.

E

EF published its report last month in the run up to an EU council meeting to discuss the future of European regulation, and also in the midst of work on a variety of EU trade agreements which could significantly increase the region’s GDP. In the longer term, the report also seeks to prepare industry and government for the planned referendum on EU membership.

EEF has taken up a firmly pro-European stance based on feedback from its members.

While UKTI and wider government messaging is focussed on promoting the opportunities available in markets beyond Europe, EEF has pointed out that the EU’s influence as a trading bloc will be essential in opening access to these markets and that Britain must retain the ability to benefit.

EEF also highlighted the potential benefits to British business in being able to bid for European funding under the Horizon 2020 innovation programme. It is thought UK-based SMEs could access around £9m of support via this scheme.

Paul Tranter, CEO of the innovation consultancy Pera Technology commented on the imperative for UK SMEs to seize the day and apply for Horizon 2020. “This fund presents an enormous opportunity for SME manufacturers across the UK,” he said, “1,659 UK business and counting have successfully applied for the £1.2 billion that was previously available under Framework Programme 7… our intelligence suggests that the funding pot will be even bigger this time.”

EEF is committed to a campaign to educate the UK debate over its relationship with the EU and is working to establish better understanding between European trade bodies in order to drive a more coherent industrial strategy across the region.

T

The judges have sifted through almost 800 entries to select their shortlist for the fourth annual EEF Photography Awards.

he competition aims to inspire young, amateur and professional photographers to capture images which will drag the public perception of manufacturing into the 21st century.

Winners will gain a share of £5,000 worth of Canon photography equipment.

The shortlist for this year’s awards was announced on November 4 and the overall victors will be names in a ceremony at the House of Commons in December. You can view the shortlist here: www.eef.org. uk/photo.

We will feature the winners in the February edition of . Below is a selection of images highly commended by the competition’s judges:

le in cab cility JDR’s its fa rgan ory: hine at ve Mo g te c by Ste al ca ma ssion oling age Profeusion co shire. Im e r ext bridg Cam

Young capturephotographer: produc d the final sta Sam Doyle tion at Lo ge tus cars of the shows the y’s image of a jet Andrew Ka ber Amateur: the Plenum Cham of simulating inside of sting cell capable 4 at 60,000ft engine te s of flight at Mach condition

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 57

Kimberly-Clark

Manufacturing Leadership

Safety Sentinel How Kimberly-Clark supports its core belief that no production goal is worth the risk of injury.

58 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

I

t’s a troubling fact that even when accident rates in a workplace fall, sometimes the number of fatalities do not. Every year approximately 5,580 people die in the European Union as a consequence of work-related accidents, according to EUROSTAT figures.

However, evidence shows that through identifying ‘Sentinel Events’ – near misses or accidents that could have resulted in a fatality or serious injury, but didn’t – businesses can make real progress in eliminating deaths in the workplace by preventing future incidents before they’ve happened.

The concept of Sentinel Events is a different approach to the traditional loss pyramid. By measuring and tracking both minor and major loss incidents which although have not resulted in a fatality, an organisatio may be better able to predict where they will happen and prevent them. KIMBERLY-CLARK PROFESSIONAL identified eight types of ‘Sentinel Events’ in its global manufacturing business including:

Safety training has been incorporated as part of the initial induction programmes for new employees, and also as part of the annual training for each employee Falling objects Powered vehicle events Falls from height Fires and explosions Contact with energised equipment Electrical contact Transportation Confined space operations They then identified a number of triggers that could lead to these events.

For example, Kimberly-Clark identified the following activities as key triggers that could lead to Falling Objects Sentinel Events - dropped loads during

Where people meet production Everywhere a person touches a part or a process. That’s where waste, inefficiency and risk hide.

It’s also why The Waste & Hazard Walk

by KIMBERLY-CLARK PROFESSIONAL is so valuable.

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And every time, The Waste & Hazard Walk identifies significant opportunities for savings, safety, efficiency and continuous improvement.

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Request a Waste & Hazard Walk today. kcprofessional.co.uk/efficient Or search for “The Efficient Workplace”

Kimberly-Clark

Fatal

Property Damage Accident Incidents with no Visible Injury or Damage Substandard Acts or Conditions

Living Kimberly-Clark’s 3 safety commitments:

Event

Permanently Disabling Event Non- Disabling Injury / Illness

Manufacturing Leadership

S e n t i n a l E v e n t s

lifts, mechanical failure or incorrect equipment use, improper or unstable stacking of raw material or product and rack storage failure or failure of overhead structure.

The company then investigates and captures the details of any incident and aligns it to the Sentinel Event groups that could have resulted in fatality.

Core to culture

This is a core part of the culture at Kimberly-Clark. Twenty years ago CEO Wayne Sanders said: “There is nothing, nothing more important than your safety.

There is no production goal, there is no cost- or time-saving measure, there is no competitive advantage that is ever worth a human life, or for that matter, an injury of any kind.” And this remains true across the business today.

Leading the charge to protect the 58,000 employees working at manufacturing facilities in 37 countries is Ivan Maldonado, global occupational safety and hygiene (GOSH) leader. He works with his team to develop greater safety training, measures that are truly essential for 100% of the entire workforce.

At mill sites across the globe, the strategies and innovations developed by Ivan and his team have reduced accident rates to near zero, while creating work environments that align with KimberlyClark global expectations that ensure every employee returns home from work to his or her family safe and sound.

Today, under the leadership of the GOSH team, every Kimberly-Clark facility

60 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

HIPO Loss Events With Fatality Potential

LOSS EVENTS HIPO Near Miss Events With Fatality Potential

NEAR MISS EVENTS

is invited and encouraged to report Sentinel Events using a web-based interface that feeds into the monthly Global Safety Report. This tool makes it much easier to share information and to understand the different types of hazards encountered by facilities worldwide, critical for continuous improvement and ultimate success of their Fatality Elimination effort.

Safety training has been incorporated as part of the initial induction programmes for new employees, and also as part of the annual training for each employee. Workshops have even been expanded to include temporary employees and contractors ensuring an integrated approach of proactively sustaining a safe workplace for all.

Integrity through integration

Kimberly-Clark has integrated Sentinel Events into its health and safety processes, as part of the company’s ‘Who’s Counting on You?’ programme.

This safety programme reminds each employee, contractor and visitor of those people who depend on them to return home safely at the end of the day.

The learnings have been so valuable that activities like measuring the safe use of industrial supplies has become part of the Efficient Workplace program offered to their customers. One of the key services offered as part of the Efficient Workplace program is The Waste & Hazard Walk, whereby Kimberly-Clark is getting out onto Customers’ factory floor and experiencing with them how their people do their daily work. Focusing on aerospace, automotive

1

Take charge of your own safety and refuse to take any action that will place you or others at risk

2

Provide safety support & feedback to those you see taking a safety risk

3

Respond positively to the safety feedback of others

and metal manufacturing segments, they help identify simple ways to eliminate waste and hazards by applying lean principles to the consumables or industrial supplies are managed.

As a second credible pair of eyes, the goal is to identify ways of improving the health and safety of each worker, across each production process. Kimberly-Clark mill leaders have said that overcoming the attitude of “It won’t happen to me” is fundamental to behavioral change and the Kimberly-Clark offering. Finding an unsafe practice in any area is unsafe for all workers – not just the person carrying it out on that particular day. And sometimes it takes a credible outsider to spot the workarounds that become the hazards.

“Every day we must care for and protect the most valuable thing in KimberlyClark the lives of all people who make our products around the world,” Ivan says. “Fatality Elimination is not a project.

Working safely is not something to do once or something that depends on luck,” he added. “ It’s about building strong cultural beliefs to work safely all the time. It’s a lifestyle that affects much more than just yourself, but your family, and also setting a powerful precedent for every worker throughout the communities where we live.”

“Nowadays, we feel that employees are believing more and more that the most important thing is to ensure everyone goes home safely to those people who are depending on them,” Ivan says. “That’s the major motivation for everyone doing their job safely every time.”

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November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 61

Closing the Skills Gap I There are many schools engagement programmes in the UK which aim to inspire young people with a desire to pursue an industrial career – but what about inspiring teachers? Cheryl Phillips, Skills Gap programme director at the D&T Association explains its very different approach to addressing industrial skills shortages.

n October, schools and businesses came together to form a partnership to up-skill Design & Technology (D&T) teachers, and young people, through a programme called Skills Gap. Renishaw Plc, Alucast, and Airbus are the first to participate in the programme which is managed by the Design & Technology Association.

With a million under 24 year olds unemployed in a stagnant economy, it is important for teachers and businesses to work together to ensure that young people understand what’s out there for them if they gain the right skills and experience.

D&T is, or should be, an important enabling subject for manufacturing and engineering careers. It helps young people understand how to apply STEM knowledge and to realise the exciting interactions between design, manufacture or construction and product use.

But the value of the subject in developing young people for careers in tomorrow’s industry can only be optimised if teachers understand how to contextualise their curriculum in an up to date, engaging manner.

The Skills Gap programme aims to help them do this.

Training and tutoring teachers

Over a period of five months, Skills Gap focuses on the skills and knowledge development of D&T teachers by providing an industry-linked, structured

62 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

programme of training, coaching and assessment to develop curriculum and business-relevant: Technical & soft skills Creativity & innovation Insights into relevant education & career pathways Teaching resources accessible to all schools

Applying new understanding

After training and coaching, teachers are supported by Skills Gap in practicing their new skills during curriculum time with their own pupils.

Employee volunteers from the participating businesses co-deliver technical aspects to help build confidence among teachers and their pupils. Employee volunteers support the development of industry-linked projects focusing on the design of a product to develop or a problem to solve from within their business.

This will expose teachers and pupils to the real world of increasingly integrated design, engineering and manufacturing.

Target teachers and students

Skills Gap is beginning in secondary schools and activities will meet the needs of 11- 14 year olds following Design & Technology or 14-16 year olds following GCSE or equivalent programmes in D&T, engineering or manufacturing.

The programme compliments a range of work being undertaken by the D&T

Skills Gap

WORKFORCE & SKILLS

The Skills Gap Programme Structure

Bespoke training, coaching & industry insights for teachers

Skills check for D&T department

Skills project for young people, led by teachers

Teachers & employers co-deliver the project

Project progresses over a period of 5 months Association to ensure that D&T in schools is fit for the 21st century.

To extend the programme’s reach, all materials generated by the programme will be shared via training events, made available on-line and accessible to all schools in the summer of 2014.

Renishaw already works closely with a range of schools in its locality but decided to participate in this new scheme because of its emphasis on up-skilling D&T teachers and sharing learning throughout the UK. Professor Geoff McFarland, group engineering director at Renishaw explains, “We employ 2,200 people in the UK and operate on a global scale. We want to talk to local young people and those further afield to ensure we get the best candidates.

“By empowering D&T teachers with skills relevant to our business, both at our sites and through regional training, we are looking to make young people aware of the opportunities there are within our business when they have the right skills and aptitude.”

Part of a bigger picture

Skills Gap embodies the majority of the recommendations made in the recently published Engineering Skills Review led

by Professor Perkins (bit.ly/Perkinsreview) including learning and development opportunities for apprentices.

This characteristic in the programme is particularly appealing to Gary Griffiths, head of early careers programmes at Airbus in the UK. “We are looking forward to partnering with [local secondary school] Ysgol Clewedog to raise skills among D&T teachers,” comments Mr Griffiths. “We employ approximately 100 apprentices each year in the UK and as well as finding ways to engage more closely with teachers and young people, we also look to provide interesting and fulfilling personal development opportunities for our apprentices and direct entry graduates which help them to develop other skills.

“Coaching teachers and young people is a good challenge for our apprentices and graduates as well an excellent way for schools to access some of our technical capability.”

The Skills Gap programme from the D&T Association has ambitions to extend the scheme across primary and further education as well as secondary. The scheme is also actively seeking to engage businesses and employee volunteers across a range of industries relevant to the content and objectives of the D&T curriculum including food, textiles and design businesses, both large and small.

Specialist castings firm Alucast is the first SME to come on board with the Skills Gap pilot scheme. Tony Sartorius,

managing director of Alucast explains that he wanted to make sure it developed as a scheme firms like his could engage with. “Small businesses have a significant role to play in the future of the economy and we at Alucast want to invest in the skills of young people to ensure we feed the talent pipeline for our future and the future of the local community,” he says.

“We are very much looking forward to working with the ACE Academy, Tipton [via Skills Gap].” will track the progress of Skills Gap pilot programmes over the next five months. Look out online and in the magazine for reaction to the scheme from the industrial partners involved as well as teachers.

FURTHER INFORMATION: For further information about Skills Gap or to register your interest in the scheme, please contact Cheryl Phillips, Skills Gap programme director for the D&T Association on: Cheryl.phillips@data.org.uk 07903502768. www.data.org.uk

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 63

Inspired by nature, the Festo robotic claw was a hit with young visitors to SEW

Build it O and they will come Scarborough’s extraordinary engineering fair shows what is possible with little more than desire and hard graft, but its success belies a problem all remote towns must deal with.

64 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

ver 2,600 school children left Scarborough last month having seen, heard and touched engineering and technology in ways many would never have done before.

The three-day Scarborough Engineering Week, now in its fourth year, attracted 58% more school children this year than in 2012, and last year’s haul was no mean feat for a town some residents describe as “42 miles from England”.

Hands on

Kids will have donned a virtual welder’s mask on the £50,000 Lincoln Electric welding simulator and tried to trace a super-fine weld line at Atlas Ward’s stand. Some will have tried manipulating Moog’s haptic controller, a device using servo switches that recreates resistance as well as direction and is used in training pilots and dentists, to guide a virtual ball through an assault course.

They will have operated the Articulated Grip, supervised by Festo, which uses

a triangular keypad to control a pyramidmounted claw in multiple directions. The claw is surprisingly ‘tactile’ and realistic, but then the German automation company takes inspiration for many of its demonstration designs from nature – the Penguin, the Flying Bird etc.

Other students will have seen how a simple electrical circuit can create a strobe lighting effect, used to demonstrate signage on local firm Deep Sea Electronics’ busy stand.

They can then take the mini strobe lights home in their ample show goodie bags, an essential part of this growing and eclectic engineering expo on the North Yorkshire coast.

Scarborough Engineering Week

“We need to do this,” says co-founder Alan Pickering, managing director of local tubebending machine manufacturer Unison. “All the bright kids from this area go to university and very few come back. It is a brain drain. We established this exhibition not just because it is important that kids see what manufacturing has to offer, but because the companies in this region need to find talented employees. Or they will be gone.”

Independent action

Founded by a handful of very local firms, including coach builder Plaxtons, Dale Power Solutions – the generator manufacturer whose employee Natasha Pitts won the 2013 Higher Apprentice of the Year Award run by the National Apprenticeship Service – Castle Employment and York Potash, Scarborough Engineering Week (SEW) has grown to involve more than 40 companies. Most of North Yorkshire’s and the region’s schools now send a bus here.

Mining company York Potash is the headline benefactor, but SEW has no big corporate sponsor, instead fuelling itself on self-belief, a modest exhibitor fee and the drive of Pickering, his partner Peter Wilkinson, Unison’s marketing director, and the support of North Yorkshire Business and Education Partnership, led by Rebecca McCleary. “It’s very gratifying to see some of the students genuinely pick up that spark of inspiration for a future job,” she gasps in between a relay of arriving coaches.

Getting on the map

The persuasive Wilkinson managed to bring Minister of Trade Lord Green to open Unison’s new premises in August and the Unison boys got the Duke of Gloucester to visit the show and present an award this year. Formula Student, the popular national

competition run by the Institute of Mechanical Engineers, now brings its exhibit and several new companies joined or expanded their presence at this year’s event including a much bigger stand from frozen food supremo McCain, which brought its original ‘potato dusting’ machine from the TV ad.

EngineeringUK’s wellfunded Big Bang Fair showed engineering to 65,000 school kids in 2013, but SEW does it on a shoestring.

It provides a model for how engineering firms in remote areas can engage with schools to get their businesses and their sector back into the mix of potential career opportunities for locally produced talent.

Pickering admits he is concerned it will get moved to Leeds, which will “avoid the purpose, big cities don’t need this event.”

Scarborough, once the default holiday destination for rich Yorkshire farmers, is not as popular as it once was and you can see why smart youngsters are drawn to the lights and jobs of Leeds, Newcastle and London. But those who leave for more vibrant opportunities in cities perhaps miss the point that some local firms, like high tech Unison with its strong export orientation, offer challenging international careers.

If the economies of places like Scarborough are going to survive, if the UK’s regions are going to retain their engineering businesses, people need to take notice of this remarkable engineering week and replicate it in other remote locations.

As Team Unison’s own field of dreams shows, if you build it, they will come.

WORKFORCE & SKILLS

All the bright kids from this area go to university and very few come back.

It is a brain drain

For a selection of exhibitors’ comments about supporting Scarborough Engineering Week and the issues with recruiting young people, go to: bit.ly/ ScarboroughEngWk2013 November 2013 | Issue 9| Volume 16 | www.themanufacturer.com 65

T Skills succession panning How will the skills we need to develop in tomorrow’s manufacturing leaders vary from the traditional capabilities of the industry’s leaders today? Steve Winder, RVP Manufacturing UK shares software vendor Epicor’s perspective.

66 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

he UK’s manufacturing industry is vital for the country’s long term economic growth and sustainability, but to continue its recent strong performance it needs to start looking to the next generation.

It has to determine today the people who’ll be leading this vital and ever growing industry tomorrow. In particular, as the industry continues to evolve, it needs to look to the evolving skills and experience that are required of the next generation of manufacturing leaders, and explore how education, training and professional development must adapt to meet these needs.

The UK manufacturing industry’s future best and brightest will be drawn from today’s school and college leavers, apprentices and graduate recruits. They are young people with a wide range of talents and educational

The UK manufacturing industry’s future best and brightest will be drawn from today’s school and college leavers, apprentices and graduate recruits

Succession Planning

backgrounds, stretching from pure mathemathics and computing through science to business, media studies and the arts. They have a wide range of career options available to them and competition for the best recruits is fierce.

What will tomorrow’s leaders look like?

In many ways it is impossible to present a single profile of the manufacturing leader of the future.

The UK manufacturing sector comprises such a vast range of industries, each of which demands a different blend of skills.

However, a few trends impact the sector across the board, including globalisation, advanced technology, a move towards full service and consultancy, and a growing need to boost innovation and speed to market.

These trends require people that understand how to implement and manage the latest technologies and IT; know how to design, innovate and create; can work in – and lead – teams across borders, time zones, languages and cultures; understand the business needs and goals behind the work they do; and, can build and maintain relationships with customers.

Here are the five key skills UK manufacturers need to be looking for when trying to recruit a future industry leader:

1

A new blend of skills – New entrants to manufacturing will need foreign language,

WORKFORCE & SKILLS

to understand systems and fix things if something goes wrong.

As both production and business processes in manufacturing become increasingly automated and ‘intelligent’, IT skills are set to become absolutely crucial over the next ten years

communications, and problem solving skills as much as a technical, engineering or mathematical background. These skills become increasingly important as manufacturing businesses include more software and services in their portfolios and develop ever more ambitious globalisation plans.

2

An increased significance of softer skills – Project management and ‘softer’ skills such as communications and interpersonal skills are going to become much more important for employees at all levels. The UK’s manufacturing industry is still very much a traditional, engineering-based sector, but the simple fact is that people are getting involved in manufacturing who five years ago never would have. The often softer and broader skill sets these new entrants bring with them are subtly changing the industry landscape.

3

5

Creativity and innovation – Every new leader in manufacturing will need these skills – and to an increasingly high level. Manufacturers of today need to start putting programmes in place to encourage creativity and innovation throughout their businesses.

Acknowledge the challenge

Over the next decade manufacturing could become one of the most exciting, innovative and opportunity-rich sectors for young people to forge a career in. These careers will increasingly demand business, communications and leadership skills, as well as capabilities in creativity and design.

However, to encourage the right kind of candidates for the industry’s future leaders, the UK’s manufacturing sector must remain committed to ensuring that strong engineering and mathematical competence continue to drive and underpin the future of the sector.

Unfortunately, official statistics show that young people continue to turn away from STEM subjects (science, technology, engineering and mathematics).

At Epicor, we believe that the education system needs to adapt to reverse this trend to ensure it is able to develop the increasingly advanced and blended skills the UK’s manufacturing sector will need in the years to come. www.epicor.com/uk

The ability to lead a global team – Decision-making and management across globally dispersed teams is set to become a crucial element of the next generation of manufacturing leaders’ roles.

However, many manufacturers now feel that the ability to manage these remote, mobile, multi-location teams will require an innate skill set, rather than one that needs to be specifically developed.

4

Major focus on IT and automation skills – As both production and business processes in manufacturing become increasingly automated and ‘intelligent’, IT skills are set to become absolutely crucial over the next ten years.

However this does not mean that traditional technical skills will become any less important. Manufacturing departments need to be wary of becoming over reliant on automation. They must retain the ability

Epicor is sponsor of the Young Manufacturer of the Year award at The Manufacturer of the Year Awards Ceremony & Gala Dinner The ICC, Birmingham 04/12/2013

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 67

Sabrina Ihaddaden

Employee of the Month November 2013 Sabrina Ihaddaden IET, Developing Engineer Bombardier Transportation

CV in brief Sabrina Ihaddaden Age: 22 Education: Scientific Baccalaureate with distinction. High National Degree in Electrical Engineering and Computing, IUT of Cachan, France. Engineering Degree in Mechanical and Industrial Engineering, Arts & Metiers ParisTech, France. MSc in Mechatronic Systems Engineering, Lancaster University, UK. Sabrina is also Vice-president of the French association Allez les filles, Osez les sciences (Go girls, dare sciences!) and editor-in-chief of the blog http://www.allezlesfilles-osezlessciences.fr/ to promote Science and Technology.

Hobbies and interests: New technologies, travelling, mixed martial arts, languages.

68 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

EMPLOYEE OF THE MONTH

: What is your role and what are the main responsibilities?

I work within the Train Control Management System (TCMS) team.

I’m currently helping design a new Passenger Information System for Aventra, a completely new train we are developing for a variety of markets, including UK urban and regional commuter routes.

Aventra will be one of the most environmentally friendly trains yet and will also deliver improved reliability by using next generation health monitoring systems.

What personal characteristics help you in your role?

I am very enthusiastic and persistent – I enjoy taking a challenging brief and working with a team to find a new solution.

My background in electrical engineering and mechanical and industrial engineering means I enjoy pushing the boundaries of design, and combining IT and traditional engineering skills to help develop more efficient, reliable equipment that provides greater information and control to operators and maintenance teams.

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

I recently won Young Achiever 2013, at the National Management & Leadership Ceremony in London, organised by the Chartered Management Institute. I was nominated

by Claire Povah, principal of the Graduate College at Lancaster University, on the back of my work as Chair of the Postgraduate Board.

CMI President Peter Ayliffe presents Sabrina Ihaddaden with Young Achiever award

But really my biggest personal success to date has been to work in the Aventra team and be part of a highly talented group of systems engineers. This has been my very first job as an engineer!

What are the most rewarding parts of your job?

Working as part of a team developing a new train platform that, in the future, I could be a passenger on. I will be very proud to use the trains knowing that I have contributed to their development.

Bombardier has more than 350 specialist engineers in the UK and working with them and Bombardier’s other suppliers and consultants is an amazing experience.

What first attracted you to a career in rail systems manufacturing?

I was really excited about the challenge of designing future rail technology. The UK has a long heritage as the birthplace of the railway and the Bombardier factory in Derby is celebrating its 175th anniversary next year, so for anyone interested in rail engineering, this is pretty irresistible.

What do you think is the best way to get more young people interested in manufacturing?

Many young people have an old fashioned view of the industry and don’t understand the breadth of jobs and the technical expertise that is required in modern engineering and manufacturing.

Young people need to be introduced to engineering and manufacturing at an earlier stage so they understand what it is, and the role it plays. I think scientific outreach workshops, and school tours of engineering companies are a great way to achieve this. Bombardier does this with local primary schools and it should be done more.

IT’S NOT JUST EYE PROTECTION We’ve been in the safety business for over 125 years. In that time, we’ve learned that it’s not just safety gear. It’s protecting people from injuries, allowing them to continue living life to the full.

arco.co.uk

Holiday pay

Finance & Professional Services

The holiday pay

timebomb I

t is not often that a decision relating to the relatively obscure Civil Aviation Working Time Regulations (CAWTR) causes ripples for the whole of the UK manufacturing sector.

But that is exactly what has happened in the case of British Airways plc v Williams and Others.

The BA case relates to the calculation of holiday pay for pilots.

Holiday pay for pilots is governed by the CAWTR but there is no guidance given as to how to calculate holiday pay.

This resulted in the matter being referred to the Supreme Court who determined last year that pilots should be paid their ‘normal remuneration’ during periods of statutory leave. The principle is that workers should be put in a financial position comparable to periods of work.

There’s a storm brewing over employer liabilities for holiday play and, as Neil Black, partner at Conducting shockwaves The interpretation applied by the law firm Pinsent Supreme Court was based upon the Mason explains, rights provided by the Working Time manufacturers may be Directive (WTD).

The WTD is the source of the particularly exposed.

Working Time Regulations (WTR) which governs the calculation of holiday pay for the majority of UK workers. The BA case therefore calls into question the current WTR method for calculating holiday pay.

The WTR provides that UK workers with normal working hours should only receive basic pay when taking annual

If this line of judgment is followed, the costs in terms of future holiday pay bills and back pay will be substantial

70 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

leave. No credit is given for elements such as voluntary overtime and overtime premia. Arguably this means workers do not receive the normal remuneration referred to in the BA case.

Neal v Freightliner Limited

Trade Unions have been backing claims seeking to extend the BA decision beyond the airline industry and tribunal statistics show a doubling of claims under the WTR in the first quarter of 2013. The potential significance for employers is evidenced by the recent decision in Neal v Freightliner Limited.

Mr Neal received a low basic salary but supplemented this with bonuses, shift allowances and regular overtime.

Freightliner had been calculating his holiday pay in accordance with the WTR and so ignored voluntary overtime, shift premia and shift allowances. When Mr Neal took annual leave he received basic salary. Mr Neal argued this was not his normal remuneration and claimed he had suffered an unlawful deduction of wages, relying on the BA case to back his cause.

The Employment Tribunal held that holiday pay should be calculated by reference to normal earnings and should include basic salary together with all other payments that are “intrinsically linked” to the performance of the tasks required to be carried out under his contract.

Therefore shift allowances and overtime should have been included when calculating holiday pay. As a result Mr Neal was entitled to seek compensation for the difference dating back to his start date in 2007.

Clarification pending

Neal is only a tribunal decision and is subject to appeal but the current flux in the law makes it difficult for employers to address this issue and the certainty of a higher court decision is desperately needed. If this line of judgment is followed, the costs in terms of future holiday pay bills and back pay will be substantial when extrapolated across the entire workforce.

This is a particular issue for the manufacturing sector given its reliance on shift working and overtime and could be very costly indeed. Manufacturers of all sizes should take stock of their current practices and seek advice as to how to potentially mitigate their exposure to claims of this kind.

Building Information Modelling

SuPPLY CHAIN

Standards generally have huge assumptions that whole life costs will be considered [by the construction phase] and generally don’t take them into account Malcolm Taylor, Head of Technical Information for Crossrail

Crossrail: Better with BIM

Network Rail called it Span 1, Span 2 through to 5, numbering from the south bank. Port of London Authority called these Arch 1 to 5, from the North bank.

Is this a common language?”

The principle of BIM, rather like through-life engineering in the mechanical engineering world, is to reduce whole life costs. Malcolm Taylor, head of technical information for Crossrail, says that BIM is forcing the project team to think about the operations cycle. “The [operational] standards for London Underground for whole-life costs, you barely see them mentioned. Standards generally have huge assumptions that whole life costs will be considered [by the construction phase] and generally don’t take them into account. In a BIM world you are going to be able to see that movement of data and information up and down the cycle in a much better way in 10-years’ time.”

mechanical and electrical engineers, As the London architects, designers and manufacturers Underground – are talking about the same thing and, helpfully, visualising it in 3D. celebrates its 150th BIM is used in civil engineering birthday, Crossrail, the projects all the time but tends to involve sharing a mish-mash of 2D and 3D data, new kid on London’s derived from different software platforms subterranean block, is and labelled in different ways. Crossrail’s of BIM is, ambitiously, breaking fresh ground application enterprise-wide. in the application of Speaking a common language Building Information As well as the bringing bigger total Modelling savings in cost and time savings via quicker visualisations and design BIM and manufacturing technology. Will iteration across the project, BIM will But does BIM directly impact Stirling reports. improve the project’s whole life manufacturing? Since tunnel projects

A

llowing for inflation, Crossrail will cost about £16 billion.

With 42 kilometres of new tunnels under London and nine new stations it is Europe’s biggest infrastructure project and is the biggest works on Transport for London’s underground transport network for 50-years.

To help handle its sheer scale and complexity, Crossrail has turned to BIM, or Building Information Modelling as a route to efficiency and rationalisation.

BIM uses multi-level data in a common language environment so that the interdisciplinary parties involved such a project – structural engineers,

cycle management.

“Crossrail has taken on what the ODA [Olympic Delivery Authority] did at the Olympics with BIM,” says Nick Hoyle, chief engineer, technical solutions at Balfour Beatty, the prime contractor for two Crossrail sections, C510 and C512.

The Olympic Games were BIMenabled, but Crossrail is even more so.

It applies BS1192, a British Standard that demands more standardised labelling of parts in the construction industry in order to get a true “single source of truth”.

Mr Hoyle, a BIM evangelist, illustrates why labelling can make a simple but key difference in a civil project. “For [engineering work on] Blackfriars Bridge,

commonly use offsite manufactured parts, BIM should help Crossrail’s hundreds of suppliers. “A key thing [for offsite manufacture] is you have this interdisciplinary check early on,” says Nick Hoyle.

“Because [the component] has the same XYZ coordinates as the designer, when you model it and compare it on plan, it means you can look at safety and methodology, and spot any clashes with the existing infrastructure. It enables manufacture for construction, and it increases the chances of rightfirst-time installation.”

For a longer version of this article, go to bit.ly/CrossrailBIM

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 71

Facilities management Supplement

Facilities Management Special

T

he following pages feature articles highlighting the potential benefits to manufacturers of outsourcing facilities management.

Malcolm Wheatley’s editorial leader is followed by contributions from:

P74 P76

Fast facts on facilities management The UK sector is worth between

£40bn-£95bn The facilities management market place is crowded. The British Institute for Facilities Management has over members

13,000 It’s a combination of ‘hard’ and ‘soft’ judgements – but, you need to have faith that the people involved do value working with you, and will do a good job

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Outsourcing facilities management to a specialist provider can cut costs while boosting a manufacturing firm’s service levels and capabilities, finds Malcolm Wheatley.

F

SPIE UK Johnson Controls

Andrew Shaw Managing Director, Business Services Growth

Goodbye to all that rom catering to cleaning, and from security to pest control and refurbishment, facilities management is big business. And it’s not difficult to see why.

These days any business wants to focus on its core competencies – and it’s undeniable that running a canteen, manning a security desk, and carrying out plumbing and electrical work hardly counts as that for most.

Leave it to the experts, goes the logic, and concentrate the business’s efforts on honing its competitive advantage.

Particularly when those experts reckon to be able to perform the same task more cheaply than it could be performed by in-house personnel – thanks to economies of scale, specialisation, and bulk-buying capabilities for catering, cleaning and maintenance supplies.

The range of facilities management services on offer is extensive. Typically, it’s divided into ‘hard’ and ‘soft’ categories.

Examples of ‘hard’ tasks might include landscaping, building and asset maintenance, while

‘soft’ provisions could entail cleaning, reception and health and safety services.

Fairly obviously, there’s a crossover between facilities management and property management. Though not one and the same, the two often go side by side and firms which offer one branch of services usually offer the other to a greater or lesser degree.

That said, property management generally applies to strategies relating to the physical premises, including the rearrangement of the working space and subsequent letting out of the excess, or relocating the business entirely, if that is reckoned to be the most efficient way forward.

Facilities management, on the other hand, is generally taken to refer to the maintenance of the property and everything inside it, as well as the provision of ‘non-core’ activities such as fire and risk assessments, reprographics, decoration, mail services, and porterage.

Uptake of facilities management

One doesn’t have to look too far to see that the use of facilities management services, and the realisation of their potential value, is uneven across sectors and geographies.

Walk into a typical city centre office block, for example, and the presumption is definitely one of facilities management: catering, security, cleaning, maintenance. All are generally provided by third parties, operating under outsourcing contracts.

Walk into a factory, on the other hand, and facilities management

Facilities management SUPPLEMENT

is less customary. It’s not difficult to see the logic: in-house catering, cleaning, maintenance, security – to an organisation which routinely manages an extensive blue-collar workforce, a few additional staff doesn’t seem to be a major headache.

But, say experts, that thinking is flawed. And increasingly, they assert, manufacturers are dumping the in-house DIY approach to facilities management, and opting for facilities management services provided by specialist firms.

The sector is now large and complex, says the British Institute of Facilities Management (BIFM), comprising a mix of in house departments, specialist contractors, large multi-service companies, and consortia delivering the full range of design, build, finance and management services. And while estimates vary, research suggests that, in the UK alone, the sector is worth between £40bn and £95bn per annum.

The benefits

So what, precisely, are the advantages for a manufacturing business moving to a facilities management model?

According to John Bowen, chair of the BIFM Procurement Special Interest Group, and a former Balfour Beatty executive now operating as a specialist independent consultant, the advantages of outsourcing facilities management range from cost improvements through to compliance, as well as freeing-up management time to focus on more strategic issues such as growing the business and developing new products.

“If you can hire in people just when you need them, it’s a lot cheaper than employing them full-time,” he notes.

“And also, you’re hiring in people who are specialists in their fields – you don’t have to train them, and they should be fast and more efficient.”

With regards to the compliance advantages to be gained through bought-in facilities management, Bowen adds that a raft of new legislation has been introduced over the past few years.

The costs – and other challenges – of keeping employees up-to-date with legislative requirements can quickly mount he says.

“Maintenance has become much more specialised in recent times,” stresses Bowen. “The ability to perform equipment maintenance is very different

Manufacturers are typically very poor at taking the benefits of improved facilities management through to the bottom line Nick Ford, Business Development and Market director, Xchanging

from the abilities required to manage and maintain facilities to appropriate standards. And it’s important to keep an eye on legislation: these days, the requirements for an electrician qualified to work on domestic premises are different from those required in electricians qualified to commercial and industrial standards.”

Some manufacturers might be sceptical of employing a ‘jack of all trades’ contractor, of course. The trick here, it seems, is to look at which tasks the provider will carry out itself, and which it will subcontract to third party firms. In each case, it’s sensible to research the training levels and qualifications of the employees involved.

And in any case, a ‘jack of all trades’ flexibility can be a vital attribute for manufacturers experiencing fast changes in focus or level of business.

A facilities management provider with multi skilled staff, in short, may be able to supply personnel who can quickly adapt to operate across a number of areas, where and when they are needed.

The right choice

So how best to procure the services of a facilities management provider?

Talk to experts, and a few common threads emerge.

First, get the basics right, advises Andrew Shaw, managing director of Business Services Growth, a consulting firm. The process, he explains, is one of evidence-seeking, and judgement-forming.

Can a potential provider demonstrate proven competencies in the relevant areas of work – such as factory cleaning, for example? Do the references that they provide confirm that they can be trusted to deliver? Do they clearly demonstrate experience and understanding of the nature and characteristics of your industry – such as pharmaceuticals, aerospace, or automotive? And do

they give the impression that they value your business, and will put in the effort to manage the contract – and the relationship – well?

“It’s a combination of ‘hard’ and ‘soft’ judgements,” he says. “But at the end of the day, you need to have faith that the people involved do value working with you, and will do a good job.”

Increasingly, though, it’s possible to short-circuit the selection and evaluation process by going to a procurement intermediary. Procurement outsourcing specialist Xchanging, for instance, reckons to manage over £400m of facilities management spend over 850 UK sites, employing a team of 28 specialists to manage the process.

And ease of selection alone is not be the only driver to opting for a specialist procurement provider for facilities management services, insists Nick Ford, business development and market director at Xchanging.

“Remember: the objective is improved service levels at a reduced cost, stripping out a lot of invoicing and administration cost, and requiring a lower management burden for an improved capability,” he says.

“And that’s important, because manufacturers are typically very poor at taking the benefits of improved facilities management through to the bottom line.”

To see those benefits properly reflected in the bottom line, he says, manufacturers should think not in terms of their facilities management ‘spend’, but in terms of facilities management ‘outcomes’ – with targeted savings linked to those outcomes.

“Whether manufacturers outsource all of their facilities management spend, or just some of it, the goal should be to see the result in the bottom line,” he sums up. “That’s the purpose of making any improvement – and facilities management is no different.”

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 73

Facilities management case study: SPIE UK

SPIE UK I

t’s a business model that is hard to beat. Save a company money, take a proportion of the total savings and thereby incentivise yourself to work harder to hit targets.

This is the facilities management proposition. And as austerity Britain has taken hold, more big companies have outsourced non-core maintenance activities to the experts, freeing up manpower to focus on the core business.

One company capitalising on greater interest in FM is the Facilities Services arm of SPIE UK, a multi-service FM provider with a strong track record in public and private service work.

Its manufacturing sector work has picked up. During 2011 SPIE secured a £27 million contract with a multinational pharmaceutical and healthcare company to provide maintenance, repair and overhaul (MRO) and total facilities management (TFM) services across its UK estate. The KPIs are compelling. The contract set targets to achieve 7% savings against baseline in the first year, a 4% savings against the Year 1 benchmark in the second year and a further 4% savings against Year 2 benchmark in the third year.

74 www.themanufacturer.com | November 2013 | Issue 9 | Volume 16

Facilities management is penetrating deeper into the manufacturing sector, because it can justify its expense by setting and hitting ambitious cost reduction targets.

SPIE UK explains how manufacturers can benefit.

“We achieved initial savings of 16%, in the first six months, for this customer,” says general manager Mike Biddiscombe. “Overall we achieved an 8% saving on production line procurement, using our key preferred suppliers through a framework agreement.”

SPIE UK growth forecast is to be a £500m business by 2015, akin to the group, SPIE SA, forecasting £6bn by 2016. This bullish outlook is helped by public private initiatives, such as schools maintenance, which are big, long term contracts. “The current government has freed up money to prioritise new school builds, which we service. Summer is our peak time due to planned refurbishment works,” says Mr Biddiscombe.

What does multi-service FM include?

Modern FM covers a huge range of company operations, both core and ancillary. The key to FM seems to not say that you cannot do something.

“Where it is cost effective, we bundle or de-bundle services to match a clients’ needs precisely, subcontracting if needed if that makes most sense. We don’t restrict ourselves to any one field of work,” says Biddiscombe.

For example, to one customer in Bracknell SPIE provides reprographics, mailroom and reception staff, security, video conferencing and more.

How does a customer know that he’s not just retaining an FM firm as a broker for a suite of subcontracted services? SPIE has a big in-house capability, says Biddiscombe, but a contract is structured around the availability of personnel and geography.

“We do a make-buy analysis to assess whether it’s more cost effective to perform the services ourselves. If not, we would look to provide managed services where we act as the head contractor for several specialist services such as CCTV, fire services and so on.”

The key to multi-platform FM is to combine FM with MRO, SPIE says.

“Our people are already on site maintaining the non-core elements, so they’re best placed to purchase the production line material to ensure that up-time on the line is maximised.”

Cost conscious business likes the rebate model

As big companies have got bigger, the FM industry has grown with them as they look to rationalise running costs and non-core competencies.

Interest in SPIE from the manufacturing sector has grown in recent years. “Manufacturers are protective of their own production capability, but they have been keener to outsource the non-core elements due to the value this brings.”

The usual household names have big FM contracts and are looking at doing more. Everybody is looking for a different way of achieving the same end – cost reduction.

A strong feature of SPIE UK’s model is the gain / share model for exceptional performance.

SPIE sets a cost reduction target and assesses the most cost-effective way of achieving this. “Assuming we achieve that, we receive a percentage of the remaining savings,” Biddiscombe says. “We try to secure a share of the savings we commit to. It gives us an incentive to continue driving cost out of the business even when we have won the contract to ensure we renew based upon a value proposition.”

“The FM industry in the UK is mature, but certain market sectors have not exploited this avenue of value engineering. Because we’ve targeted these nascent sectors we’re growing above the [UK] FM industry average.”

Facilities management SUPPLEMENT

Procurement savings – FM Core

FM-CORETM companies often retain suppliers without regularly benchmarking their comparative costs.

FM-CORETM is a solution that helps consolidate purchasing to a single order from what might currently be multiple orders to multiple suppliers, or even departments of the same company.

FM-CORETM is a three tier process that spans costs, operations, risk and environment.

1 2

Stakeholder meetings and interviews creates an initial proposal of cost savings that are realistic.

3

Implement the end solution through an MRO or MRNO contract.

Formal due diligence of all operations analysing the procurement profile, business risks and associated operations. Establish a criticality matrix covering business continuity, reducing obsolescence etc. This develops a more formal proposal.

We try to secure a share of the savings we commit to.

It gives us an incentive to continue driving cost out of the business even when we have won the contract, to ensure we renew based upon a value proposition

Total Facility Management

MRO Solutions

Value Driven Projects It makes good business sense to seek one source to service all of your Facility Management needs. This saves time and money, which is key to any business. SPIE UK provide energy focused, safety and environmentally focused solutions through multi-technical and support services from initial design, through installation, testing, commissioning to long term maintenance and facilities management.

Could this analysis mean moving contracts to foreign suppliers? “We try to use a local supply chain, then national. Sometimes we’d go overseas as a last resort.”

Energy management has become a growing part of FM, as energy costs move in only one direction.

SPIE conducts energy usage analysis on plant and equipment, including air condition monitoring, airflow monitoring, assess base load values and look at the overall efficiency of production equipment.

“This may lead us to recommend capital equipment replacement or the installation of renewable energy sources, again based upon a value proposition.”

Manufacturing panacea?

Is FM a new cure-all for manufacturers who want to get back to basics?

“The services we offer will not always be the right solution for every company, but I strongly advise manufacturers to think outside the box when considering FM, procurement and energy management,” Biddiscombe says.”

“Even if it is just to validate that you’re doing everything right, it is worth investigating the proposals that an FM company such as SPIE UK can provide.”

Stores Management

SPIE UK 33 Gracechurch Street, London, EC3V 0BT Please contact Jacqui Thornton: Tel: +44 7896 446 266 Email: contactus@spie.com Web: www.spieuk.com

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 75

Facilities management SUPPLEMENT

Facilities management case study: johnson Controls

management of spare parts and inventory.

All activity is governed by an agreed Framework Agreement and mutually agreed Service Level Agreements.

In addition to engineering services, Johnson Controls also provide soft services – cleaning in the hazardous production zone and in the offices, gardening, canteen, waste management and security. The customer, however, enjoys a single point of contact for the integrated package.

Measurable Business Benefits

Outsource and deliver Integrated facilities management improves plant uptime and time to market for auto components manufacturer

A

major automotive parts supplier in Germany wanted to increase plant uptime in order to speed time to market and successfully compete in the global market place.

With its manufacturing plant comprising multiple production lines - mix high tech equipment, moulding injection, robotics and milling machines operated by 400 staff - the management recognised production maintenance to be critical to optimal plant uptime and increased output.

It did not, however, consider technical services to be a core competency. It took the decision to outsource this to a specialist provider – Johnson Controls Industrial Solutions (JCIS).

76 www.themanufacturer.com | November 2013 | Issue 9 | Volume 16

The local team in Germany now provide all maintenance and specialist services. The scope of work spans mechanical and electrical maintenance of machine tools, production and processing machinery as well as technical equipment – workshops, forklift trucks, hoisting equipment and HVAC for example. Machinery moves, construction and FM also fall in scope.

This new way of working sees the engineers organised into three shifts and a core team planning, project managing and executing all M&E support round the clock. Regulatory certification and safety compliance are vital components of service delivery, as is Johnson Controls’

The customer saw immediate business benefit – productivity improvement with reduced costs and risk. It was freed up to focus on what it does best – supply component parts to a highly competitive global industry.

For their part, the Johnson Controls engineers have the engineering skills to accommodate capacity variances and optimise production up time. With clear insight to all site operations and assets, they have significantly reduced risk of unplanned downtime.

Handheld devices, connected to a Planned Preventive Maintenance order database, ensure timely maintenance, as well as access to comprehensive history/ warranty information and instruction on work to be done. The same tool alerts users to the hazards associated with the different machines and the training certifications required to work on them.

The automated process also slashes the need for form filling, administration and paperwork.

Benchmarking and continuous improvement is a given. The team conducts regular testing to ensure a safe workplace and audits the customer’s readiness for end user customer scrutiny – ‘spot checks’ are the norm in the automotive components sector.

Through a single point of contact, the customer’s partnership with Johnson Controls is delivering consistent product quality in a regulated manufacturing environment. The customer is delivering on its business goals – increasing production availability, lowering total cost to manufacture and, by being LEAN and competitive, growing market share.

FURTHER INFORMATION: For further information, email: CG-GWS@jci.com

Mitsubishi finds the right temperature in Scotland

After recently celebrating 20 years of manufacturing air conditioning systems at its Scottish site, Mitsubishi Electric marked the occasion by announcing the investment of £20m in an on-site R&D centre and expansion of production. James Pozzi talks to the people behind Mitsubishi Electric’s success as they reflect on the past, present and future.

78 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

The new era

As one of the giants of the technological world, Mitsubishi Electric has built a reputation over decades for innovation across multiple sectors. With a worldwide presence stretching across every continent, it may surprise some that the hub of its European operation takes place in the Scottish town of Livingston. Situated some 30 miles east of Glasgow, the West Lothian town has had a Mitsubishi Electric presence in it stretching back to 1979. This year saw the 20th anniversary of the Mitsubishi Electric Air Conditioning Systems Europe (M-ACE) facility, which currently employs over 450 people in the production of air conditioning and air to water heat pump systems. But a celebration of the past and present was marked by a leap into the future.

This was the unveiling of the new R&D centre known as the MERCE

Mitsubishi Electric

House-type HVACS Evaluation Facility and this will be used for measuring the environmental conditions, primarily temperature and humidity, in representative domestic dwellings and for in-depth monitoring of the operation of renewable energy heating systems.

Having previously operated some 400 miles south in Guildford, the relocation to the existing Scottish manufacturing

One of the key functions of the test houses is that we can continuously develop a new range of products to go inside them Rodney Ayre, Senior Department Manager

site is a targeted approach by Mitsubishi Electric to integrate European operations onto one site, where R&D activities currently employ 12 staff. It also confirmed the creation of up to 100 jobs at the site over the coming years.

European markets

Although Mr Rodney Ayre, Senior Department Manager, readily admits Mitsubishi Electric faced the same difficulties as other companies after the 2007 economic downturn, he believes the company has managed the situation well and sees growth very much on the agenda. The £20m investment also demonstrates a show of faith in the Eurozone, a region where the Japanese company still has its biggest market share. But Ayre says this has taken on challenges of its own in recent times.

“Traditionally, the UK and Spain were our biggest markets in Europe,” he says. “But Spain obviously suffered badly and continues to do so, so our image of Sales in Europe is now much more balanced in terms of sales volumes.” While it is no surprise that Mitsubishi Electric has found fruitful territory in Europe’s top three leading economies, it has also confronted the climate challenges posed by Northern European markets.

The technological demands of manufacturing products for Germany and countries such as Sweden, with their cooler climates, requires the

MANUFACTURING TECHNOLOGIES

company to adapt. “Certainly for Sweden, there is a need to operate at much lower temperatures than central Europe so that’s a specific requirement for air to water heat pump systems,” said Dr Craig Murphy, General Manager of the Livingston R&D Centre. Dr Murphy also predicts a rapid increase in the heat pump renewable energy heating systems market, and cites it as one of the primary reasons for expansion in Livingston.

Testing the houses

Part of this investment includes the creation of two custom-built three bedroom detached houses, along with a bespoke experimental control room. Each house is modified by the installation of a number of sensors, the total sensor suite encompasses approximately 1400 measurement locations across the two houses, the majority of which are for creating a complete record of the thermal behaviour within the buildings.

Currently in the testing phase, Mitsubishi Electric is validating its instrumentation systems as well as

gathering data about the Ecodan heat pump in one house and gas boiler in the second. This is to examine the detailed behaviour of the heat pump system within one house and to evaluate data on the overall thermal behaviour of the buildings.

Ayre says the completion of the test houses is an integral step for the Livingston site’s R&D capabilities. “One of the key functions of the test houses is that we can continuously develop a new range of products to go inside them. We may have the best available technology now but we’re looking for the next best technology to move towards a nearly zero carbon and zero energy house environment.” This also includes an on-site weather station, to provide direct correlations between the weather and the thermal behaviour of the houses on a minute to minute basis.

But the moving of the entire UK branch of Mitsubishi Electric’s European R&D facilities to north of the border proved a mercifully smooth process.

Perhaps the biggest shift was moving focus away from visual and sensing research towards heating, ventilation and air conditioning systems (HVACS).

The need for this strategic U-turn,

Livingston is the only site in the global Mitsubishi Electric enterprise to have co-located R&D and production

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 79

Japanese and UK business leaders at the opening of the new R&D facility in Livingston

according to Dr Murphy, strengthened the case for the Scottish relocation. “It made total sense for the company to relocate the HVACS research centre to be with the factory here in Livingston,” says Dr Murphy. “It is unique for

80 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

Mitsubishi Electric globally to have the R&D centre right on the factory site, but we expect this will help us speed up product design turnaround and develop specific products for the European market in future,” he adds.

Investing in people

As a Japanese manufacturer, it comes as no surprise that Mitsubishi Electric has a sophisticated focus on its engagement with employees. As an IIP member, it has formal training programmes for its staff.

This has meant a rigorous and sustained approach. This involves taking groups of employees out of production for up to six months and developing their knowledge of lean techniques such as Kaizen.

This involves factory waste walks, value add analysis , training with other operators and undertaking projects for continuous improvement.

Despite the long-term commitment, Ayre said it has produced excellent results. “The programme has been incredibly successful in terms of employee engagement. Although six months is a big commitment, we have recently trained our fifteenth group of employees.” He adds: “At the end of training they go into production with their supervisor and provide local support on various continuous improvement projects.”

Such methods have led to Livingston earning its status as a best practice site.

There is also an extensive communication structure in place to support interaction on all levels. This ranges from daily

Mitsubishi Electric

MANUFACTURING TECHNOLOGIES

Moving the entire UK branch of Mitsubishi Electric’s European R&D facilities to north of the border proved a mercifully smooth process

supervisor and operator meetings, to a monthly meeting of all employees and management outlining the market behaviour and health of the business.

The transformation towards becoming a leading manufacturing facility is borne out by the fact that a number of external organisations and local companies have visited to observe the site’s best practices.

Within the figure of up to 100 jobs which was widely circulated, Dr Murphy says there will be a small but steady increase in R&D jobs, aimed at recruiting experienced professionals from scientific backgrounds. This is echoed by Takanori Omori, Mitsubishi Electric’s engineering design manager. “We feel it’s important to recruit from universities year by year,” he says. “In terms of our apprenticeship procedures, we only recruit on the maintenance and repair side, but at engineering and design level, we recruit and train mostly graduates.”

Links to the surrounding community’s educational institutions are also strong.

Mitsubishi Electric maintains partnerships with nearby West Lothian College through its Engineering Apprentice Training programme. It has also partnered with Edinburgh-based Heriot-Watt University, which boasts a reputation for expertise in the area of building thermal comfort and low carbon homes.

Other academic linkups include Lincoln University, Loughborough University and the University of Cambridge, a growing network which the company says embodies its goal of open innovation.

The sustainable future

But with investment secure and the job creation factored in, Mitsubishi Electric has set its sights on the sustainable energy market to underpin its future output. Ayre says this can be complicated due to the global scale of the organisation, but the company remains steadfast in its commitment. “We are provided with corporate sustainability

Mitsubishi Electric’s lean training and engagement programme for all employees is rigorous

challenges every year across all divisions such as design, new products, environmental and our people.”

Having won support from Scotland’s Energy Minister Fergus Ewing, who was a guest at the company’s recent anniversary celebrations, Ayre says meeting company targets is crucial in view of the obligations of the Climate Change Act, 50% reduction in Carbon Emissions by 2027 and the EU obligation of 15% of all UK energy to be derived from renewables by 2020 “We have to build this into our local structures. We have a number of targets associated with CO2 reductions as a manufacturer, defined globally from corporate office and passed down into the local factories,” he adds.

A primary intention is improving the energy efficiency of products and paving the way for the heat pump to replace conventional boilers in the market. In an age of renewables taking precedence over traditional fossil fuels, the move is a no brainer, according to Dr Murphy.

“In the shorter term we will replace oil boilers as that’s a quicker market to get into, but ultimately we want to contribute to the elimination of fossil fuel usage going into the future.” The site’s energy consumption is also controlled, with all

equipment and services tapping into supply electricity which is produced from 100% renewable energy.

For Omori , he sees the localisation of skills as a key driver of Livingston’s future. “From a design point of view the plan to grow and localise design and development on-site here in Scotland shows great vision for the future,” he says. “We’re trying to develop competencies locally in the design and development side by recruiting graduate engineers and transferring skills from Japan to here,” explains Omori. “This means we can start on a local basis designing and modifying our own products for the European market.” And while Omori adds the plans will take time to develop, it’s a challenge Mitsubishi Electric is fully committed to achieving.

“We’re in a unique position as it’s not common to have R & D and design and development on one site, but , as we say in Scotland, wha’s like us!”

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 81

Automation - who cares?

The strategic case for increasing uptake of industrial automation technologies in the UK.

R

educe operating costs, increase quality, become competitive.

The Manufacturer’s Automation Advisory Board’s mission is to educate companies about the benefits of automating manufacturing processes (p45).

Number of multipurpose industrial robots (all types) per 10,000 employees in the manufacturing industry (ISIC rev. 4: C) 2012 World average robot density: 58

Source: World Robotics 2013

Nineteenth. That’s where the United Kingdom sits, down from 17th last year, in robot density, or the number of robots per 10,000 employees.

While South Korea and Japan have around 400 robots installed per 10,000 workers, Britain has a lowly 67, a small rise on 2012 but barely above the global average of 58 (see chart).

So what? Does Britain actually need to automate? Orders are rising and much manufacturing is very efficient, so why change the status quo?

Two of the primary drivers of automation investment are to reduce labour and to increase quality and repeatability. Reduced operating costs and higher quality are advantages that foreign – and domestic – competitors with more automated manufacturing processes are going to reap. To help communicate these points, has launched the Automation Advisory Board, a cross-vendor industry group whose purpose is to demonstrate the advantages and cost savings of more automation in factories. Five of the nine AAB members give their views on this need:

Mike Wilson, General Industry Sales and Marketing Manager, ABB Our manufacturing sector is improving and exports are growing but we are slipping on the international league table [of manufacturing productivity]. The UK was 4th not that long ago and is now 10th.

Developing countries, particularly China, are significantly increasing their use of robots, despite relatively low wage costs because they recognise that to be competitive they need to use the best tools to achieve both productivity and quality. This will be a growing threat to the UK.

British manufacturing’s key problems in my view are a lack of skills to develop solutions, implement and maintain the latest automation technologies; and a short term approach to capital investment.

We want the best manufacturing in the world.

We are good at product and process innovation and efficient manufacturing or lean implementation. We are not good at capital investment, including automation.

To compete we need to get all three right.

Brian Holliday, Divisional Director, Industrial Automation and Drives, Siemens Industry UK Being involved in the AAB is key for us because this expert platform will be dedicated to promoting the productivityenhancing benefits that automation brings to high value manufacturing.

It will allow Siemens and our partners to highlight the real economic benefits that this type of technology brings to Britain.

82 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

Evidence A great example is our partnership with KHS for the five new canning lines for Coca-Cola. Our industrial automation solutions deployed at the Sidcup plant increased production by another 20 million cases per annum which will provide additional capacity for consumer growth.

Automation Advisory Board

Manufacturing Technologies

Neil Lloyd, Head of Sales Development, Lombard Automation is important to UK manufacturing because the benefits to be gained from improved productivity, consistently higher quality and cost reduction are being harnessed by other countries, improving their competitiveness. While copying others’ strategies is not always a good idea, it is clear that the advantages of automation will help us keep pace with other manufacturing nations.

It’s rare that a robot is purchased as a standalone asset. More often than not

they are part of a larger investment plan.

This can make them difficult to fund because they become an integral part of a production line, which in itself may be funded by another finance company.

As such its always best to use a funder that has the asset knowledge and expertise to be able to see and explain to underwriters the bigger picture.

Typically Lombard will look for what added value the automation will bring the business in obvious areas such as cost reduction, increased productivity and profitability. We

also investigate how it will benefit staff or reduce energy consumption.

Ian Walker, General Sales Manager, KUKA Robotics UK Ltd Given the proven narrative that leads to enhanced performance via the adoption of robots and automated systems, it is imperative UK manufacturing truly embraces the advantages of such technology in order to stay globally competitive.

No matter how convincing the proposition to UK companies, there is still a lack of holistic understanding about the benefits of robotics and automation. In part, this is caused by lack of coherency in the communication of those benefits.

KUKA has joined the AAB to try and accelerate a step-change in the uptake of robot-based, automated solutions in markets that appear slower to adopt than their peers elsewhere in the world. KUKA has joined the

AAB, to be a significant player in the process to deliver the changes needed to keep global industrial competition healthy.

The global market is changing and KUKA is evolving its offering to UK customer in response. We aim to be a straight forward vendor. This strategy is driven by the maturing of knowledge around the use of robotics in certain industries who now want to integrate simplified, out of the box technologies for themselves – without assistance. This

approach has already seen KUKA’s sales in the UK triple in recent years.

Martin Walder, UK Manager - Industries, Rockwell Automation If a manufacturing process can be automated then goods can frequently be produced competitively here in the UK. “Domestic consumption with short term flexible demands and the constant drive for environmentally- friendly solutions, add weight to the argument for local production.

I chair the Engineering and Machinery Alliance, which has long campaigned for increased capital investment and specifically investment in automation.

After many years of writing it off, manufacturing is now finally firmly on the government’s agenda - witness BIS’s

launch of the Automate UK Fund in 2011 for £600,000, which is to be repeated.

Often a good SME business just does not know what can be done [with this equipment], they don’t know what the benchmark is. Our job is to educate across the piece to say ‘Look what has been done here, this is a 20-person company but this technology has let them achieve this productivity.’

Evidence By implementation of an automated weighing and cutting system Barbers, a cheese manufacturer, reduced its giveaway from between 4% and 5% to less than 1%… [a saving] worth up to £3,000 per day.

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 83

Automation Case Study

Manufacturing Technologies

Hymid Multi-Shot How Devon-based Hymind has invested for growth

H

ymid Multi-Shot is one of only a handful of UK manufacturers to offer two-shot plastic injection moulding services.

The specialist process enables production of moulded components made from two materials with enhanced design features such as display windows, seals and buttons. Over the last few years Hymid has worked hard to build its reputation and capability in two-shot plastic injection moulding and this has necessitated significant infrastructure investment.

First steps in automation

In September 2012 Hymid relocated to new 18,000m² premises in Torquay providing it with the capacity to implement a phased introduction of the automated systems that would enhance its competitiveness. Three

Automation is the only way forward for manufacturers looking to increase competitiveness Colin Spencer Halsey, CEO, Hymid Multi-Shot

84 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

months later, Hymid ordered two new Arburg machines with robotic arms and automative capability.

At the beginning of 2013 the company took delivery of a shot electric machine which was a departure from the usual hydraulic machine but which provides greater energy efficiency, and also a bigger traditional hydraulic two-shot machine.

The impact of the introduction of the first two machines has been a significant increase in process efficiency, fully automating some operator jobs and increasing productivity by 30% on some lines.

Staff reaction

Hymid’s staff has embraced the new equipment as an opportunity to develop individual skills through new training programmes in areas such as automation and quality inspection. Indeed the automated systems have facilitated the introduction of a medical products line which, in turn, has resulted in a new dimension for the team.

Colin Spencer Halsey, CEO of Hymid, comments, “Since the introduction of automation, we have increased our staff training budget and will continue to invest in this area.”

Hymid plans to increase automation in 2014. The next progression is likely to be the ‘picking and packing’ area, although

initially the company needs to balance this with quality control procedures.

Customer response

The most important audience is of course the customer base and once again there has been a good response with a number of positive reports on the quality of the product. On one complex product the company has achieved 98.5% yield and overall rejected parts are running at 0.4% of total production.

The company found the implementation of its automation investments to be efficient and very quick. Arburg, the machine supplier provided onsite training and a number of the staff have attended technology days in Germany. Hymid sees its challenge now as fully understanding the capability of the equipment and the extent of what the technology can achieve.

Colin Spencer Halsey adds, “I believe that automation is the only way forward for manufacturers looking to increase competitiveness. It has added significant value to our business, helping us to reduce costs and allowing us to produce more for less. In terms of the security of the business going forward while we are on course to grow the business turnover to £2.8m by the end of the current year, the progressive automation will support our longer term objective to double the business to £5m by 2018.”

Automation Case Study

Manufacturing Technologies

The Flex Arc cell is ideal for short batch manufacture with quick fixture changes Michael Scarfe Manufacturing Manager, Shelbourne Reynolds

Shelbourne Reynolds An ABB integrated welding cell has helped agricultural machinery manufacturer Shelbourne Reynolds cut production times by two-thirds and enhanced quality.

S

uffolk-based Shelbourne Reynolds manufactures a range of articulated hedge cutting tractor attachments, each of which entails several hundred weld processes in production.

The recently installed ABB robotic welding cell has reduced production times for these products by 66%.

The technology

The installation features a specially adapted version of ABB’s FlexArc cell, which brings together a robot, positioner and the welding equipment needed for the process into one integrated package.

The cell is versatile. As well as being used for the hedge cutting attachment, it also enables speedier production of grain strippers and subassemblies for combine harvester headers, both of which involve complex welds.

Picking processes

The welding cell was implemented as part of a wider drive to find efficiency

through automation at Shelbourne.

Michael Scarfe, manufacturing manager at the manufacturer explains that decisions over which processes to automate were based on the achievable time savings robots could bring. “For this reason, we introduced a cut-off point whereby anything that previously took an hour or more to weld was allocated to the robot cell,” he says.

With the assistance of ABB, a time study was conducted with estimated time savings being identified for various welding processes in order to identify the ones best suited for handling by the cell.

Benefits

As well as reducing production times the welding cell has also enhanced capability and quality.

Complex welds, are now performed to a much higher aesthetic standard asserts Mr Scrafe: “Circular interpolation processes involving welding around tubular objects can be a challenge for

even the most skilled manual welders, particularly when time is of the essence.

The robot cell is able to handle these processes at a much faster rate, producing consistently strong, high quality and visually pleasing welds.”

Furthermore, the cell has freed up manual welders. Previously, a team of six was needed to carry out the welding for products now produced by the cell, which needs just one team member to supervise one of two production shifts.

Freed-up staff have not been made redundant. Instead, workers have been redeployed to add value to other production processes, including fast turnaround tasks and those which are too large for the cell to handle.

Scarfe says that the combination of automated and manual production facilities gives Shelbourne the best of both worlds. “The robotic cell gives us fast, accurate automated production in a compact footprint, whilst our skilled manual workforce enables us to produce high quality welds on our other products where using a robot is not practical,” he explains.

Next steps

Shelbourne is leaving no stone unturned in finding ways to optimise its automation investment. It is involving design teams in projects to redesign products for automated manufacture and using ABB’s training services to upskill production staff.

“Our long term aim is to introduce another cell to help us further expand our production capabilities,” explains Scarfe. “For now though, we want to find as many ways to use our existing cell as possible. We’ve already got five products on it and want to keep adding more until it is fully utilised 24/7. The Flex Arc cell is ideal for short batch manufacture with quick fixture changes, making it an ideal match with our JustIn-Time manufacturing and reduced inventory philosophies.”

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 85

Supply chains are getting more complex, thanks to reverse logistics and closed-loop returnable containers.

How far can IT systems help asks Malcolm Wheatley.

T

ake a close look at any reasonably complex assembly plant – a car factory, for instance, or an aerospace plant – and you’ll see returnable packaging, used to transport parts to the assembly line.

Its job is to protect the parts in question from damage until they come to be fitted in place. Additionally, especially in the world of automotive assembly, such returnable containers can be used to enforce sequencing rules. If the fifth car coming down the line is blue, for instance, then the fifth piece of trim in the stillage should also be blue.

Unfortunately, these items of returnable packaging can be expensive. Worse, they have limited re-use potential: designed to accommodate a particular part or subassembly, they’re often simply scrapped when that part or sub-assembly is no longer manufactured.

Prices of several hundreds of pounds per container are not uncommon, and manufacturers such as Honda and Ford have turned to simulation technologies, sourced from vendors such as Lanner, Autodesk and Dassault Systèms in order to optimise the number of such containers

86 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

circulating between suppliers and the assembly lines (bit.ly/MfgandVirtualReality).

The trouble is, that can simply result in swapping one problem for another.

Instead of too many highly-priced containers in the system, there are too few, meaning that manufacturers face an awkward choice between production hold-ups and the use of non-standard containers, which might not provide an adequate level of protection.

Two-way flow

Talk to those close to the issue, and there’s a weary sigh of recognition.

“It’s an area where conventional supply chains struggle,” says Sally Waterston, director and manufacturing lead at Waterstons, a specialist business technology consultant and software developer.

“It’s usually carried out outside the ERP system, and can easily be a huge problem – sometimes you find that manufacturers have more difficulty with scheduling the stillages than they do scheduling the product itself.”

Jez Tongue, partner in logistic consultancy @Logistics Reply, agrees.

“Returnable containers are often much

more expensive than the parts that they contain,” he points out. “People only realise the true value of them when they’re not there when required.

Track-and-trace capabilities – perhaps via RFID – are useful for helping manufacturers to know where in the loop their containers are. But track-and-trace on its own doesn’t get them to the right place at the right time. To do that, you’ve got to schedule them, just like products.”

Nor – from a logistics perspective – is the problem solely one to do with returnable stillages. Instead, it’s symptomatic of a broader shift in a how supply chains operate.

“The traditional ‘one way flow’ of conventional supply chains has given way to a much more diverse set of flows: ‘closed-loop’ returnable containers, reverse logistics, ‘click and collect’, omni-channel and so on,” says Dominic

Supply Chain Management

Track-and-trace capabilities are useful for helping manufacturers to know where their containers are, but on its own that doesn’t get them to the right place at the right time. To do that, you’ve got to schedule them Jez Tongue, Partner, @Logistics Reply

Regan, senior director for value chain execution at Oracle. “And businesses which must address these flows want standard, ‘out of the box’ solutions.”

John Bailey, vice-president of solutions marketing at software vendor JDA, concurs.

“Non-standard flows are becoming standard...Reverse logistics, closedloop logistics and direct shipments from manufacturer to end customers, bypassing the rest of the supply chain, are becoming much more common,” he says.

Environmental pressure

Experts predict that such non-standard logistics flows will grow in number. The reason? The green agenda.

“All of us have a duty of care to try to leave the world a better place than when we found it,” says Richard Lanyon-Hogg, IBM distinguished engineer for sustainability, and a technical director at IBM. “And we need to think about this in the context of supply chains: making them more sustainable and injecting into them adequate technology and instrumentation to help us make better informed supply chain choices.”

Put another way, closed-loop returnable containers are ‘greener’ than single-use disposable packaging for the same job. Reverse logistics – whether of faulty items or returnable containers – is greener if the truck that delivers parts and products is also the truck that takes them away. And routeoptimised and load-optimised networks, designed to minimise trucking distances while maximising vehicle utilisation, are greener than networks which haven’t benefited from such optimisation.

The trouble is, solutions to address these challenges are still very much in their infancy and can sit awkwardly with real-life pressures.

As Oracle’s Regan points out the drive to boost vehicle utilisation will see more manufacturers ‘break bulk’ and stack in sub-palletload quantities in order to fit more cargo into the available vehicle cubic volume. For supply chain planning and execution systems capable of only working in a single unit of measure – palletload quantities – the difficulty is obvious.

“The drive for minimal handling pushes the business in one direction, and maximising vehicle utilisation quite another,” he says.

Where’s my stillage?

Returnable closed-loop stillages pose particular problems.

As Waterston points out, a traditional ERP system can have difficulty associating a finished product – as opposed to a product undergoing manufacture – with a resource such as a returnable container.

“Some solutions use a concept known as the ‘Bill of Resources’,” she points out. “But in practice, many manufacturers rely on a few experienced people in the traffic office.”

Another option is to use a specialist solution, designed solely to handle returnable containers – supply chain planning and execution, as well as trackand-trace.

Surgere is a vendor of such technology. It offers a Software as a Service solution which counts manufacturers such as Whirlpool, Johnson Controls, and Timken among its customers.

IT in Manufacturing

Container utilisation matters Surgere’s closed-loop returnable container optimisation solution, COS 2.0 Enterprise, combines container supply chain planning and execution with a metric-rich trackand-trace capability. By equipping containers with barcodes or RFID tags, manufacturers can use COS 2.0 Enterprise to build up a detailed picture of the utilisation of returnable containers, says Dave Horvat, Surgere director of IT. Three system metrics find particular favour with customers:

1

Average turn time: the elapsed time from a container being sent out, to it returning and being sent out again

2 3

Dwell time: how long a container has remained static

Shrink rate: the percentage of a container fleet which has passed an RFID reader in the time period in question.

One Surgere customer was able to use these merics to determine that, of the 1,100 containers in had purchased at a cost of $1,200 each, just 47% moved within a monitored 30 day period and just 59% over a 60 day span.

At Whirlpool the 40-day forward MRP production plan is fed into Surgere’s container optimisation software, COS 2.0 Enterprise. The software then becomes responsible for ensuring that containers are available when required, and in the right locations.

“You get some complicated scenarios,” says Dave Horvat, Surgere director of IT. “In the case of multi-use containers, it’s necessary to make sure that when the truck rolls up to the dock to pick up the containers that one supplier uses, the people on the dock don’t simply load every applicable container that they’ve got, leaving nothing for the next supplier, when his truck shows up.”

As the green agenda rolls forward, and returnable ‘closed-loop’ containers become more prevalent, such headaches are only going to increase.

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 87

Enterprise Resource Planning

John Donagher, principal consultant at ERP advisory firm Lumenia, explains risk management in the context of ERP implementations.

I

f you’re a sports fan then you’ve probably heard the phrase “control the controllables”.

It’s commonly used in sports psychology, helping athletes focus on what’s important and ignore what they can’t change or influence. There are lessons to be learned from this attitude in relation to ERP systems. Despite being complex and full of potential pitfalls, the process of selecting and implementing ERP is controllable if managed correctly.

The groundwork

Project cost is typically the single biggest area of concern for any organisation.

Stories abound of IT projects running massively over budget, so it’s naturally an area that a board of directors will need reassurance on.

An inability to control costs during an implementation project often has its roots in flaws in the project definition stage, but diligent initial groundwork can provide realistic project cost estimates.

Key elements in getting this right include selecting a system vendor with the right combination of software product and implementation track record, agreeing the project scope and timelines with all stakeholders, tying the software

88 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

IT in Manufacturing

Control the controllables and consultancy costs down as tightly as possible and allowing realistic sums for contingency, especially for riskier elements of the project.

Regulating risks

Once the implementation project is underway, good project managers will control the project scope, monitor progress versus the plan, manage the system vendor and manage project risks.

The idea of controlling risks might seem strange to some, but risk management is an important element of project management. You may not be able to prevent something happening, but you can often reduce the likelihood and you can definitely plan your response.

Experience is crucial in identifying ERP project risks and devising risk mitigation plans. For example, you can’t control the possibility of the vendor’s project manager falling ill or getting another job halfway through the project, but you can anticipate that such events could occur and plan accordingly.

Another area of concern lies around ensuring return on the significant investment being made. The board will want to know why they’re being asked to spend all this money: what

business benefits can be expected and, more pertinently, how can we make sure they’re delivered? Once again this is an area that can be controlled.

“Benefits Realisation” involves identifying benefits as early as possible, assigning business ownership for the benefits, and monitoring delivery of these benefits throughout the selection, implementation and operation of the new system.

During the course of selecting and implementing an ERP system there are any number of things that could go wrong and adversely affect the eventual outcome.

Many of these are controllable, but you need to know what you’re doing and go about the project in the right way. www.lumeniaconsulting.com ERP Connect 2013 Find out more about this event for manufacturing firms with ERP requirements at www.erpconnect.co.uk ERP Connect 2013 takes place Dec 4 at the ICC, Birmingham

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effective solutions for the workplace

You thought that SAP’s innovative in-memory HANA technology was just for industrial giants? Think again. It’s now available on SAP’s Business One ERP system for mid-sized companies and one enterprising British manufacturer has just made the jump. Malcolm Wheatley reports.

L

ate last year, management at Cambridgeshire-based familyowned rubber and plastics manufacturer LJA Miers made an important decision. It was a decision that was ultimately to propel the company to be the very first UK customer of the lightning-fast, inmemory version of SAP’s Business One ERP solution for mid-sized businesses.

Spread across three different sites, the £12 million LJA Miers business is largely a ‘converter’, explains managing director Andrew Miers: buying-in

bulk plastic and rubber, generally in the form of sheet material, and then manufacturing products from it. In existence for almost 60 years, it sells its products to a variety of sectors, including the automotive and construction industries.

By late last year, after experiencing yet another year of strong growth, it had become clear that LJA Miers’ IT systems needed upgrading. Too many of the company’s business processes required manual data input, and so were time consuming. Management reporting was slow and very much after the event. The company’s growth rate had thrown into sharp relief the fact that it didn’t have effective capacity planning or material requirements planning capabilities.

I asked them to run a report that typically took a good half-day to run. It was in front of our eyes in less than a minute. At that point, I knew that we’d found the solution we were looking for Andrew Miers Managing Director, LJA Miers

90 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

“Our end of month reports were taking three or four days to complete, with some reports running overnight,” says Miers. “And at the rate that we were growing, it was clear that we would soon have to take on more office staff – rather than factory-floor people – just in order to handle the associated scheduling, capacity planning, and materials requirements planning.”

As part of a review of what the ERP marketplace had to offer, a conversation with local solution provider and SAP reseller Prospettiva duly followed. One option was the conventional SAP Business One ERP system, with its SQL database, as used by almost 40,000 other SAP Business One customers worldwide.

Instant answers

But LJA Miers struck Prospettiva managing director Tony Marturano as slightly out of the ordinary, and on a hunch he proposed demonstrating to them the power of SAP’s newly-released alterative to SQL-driven SAP Business One, the version powered by SAP’s inmemory HANA database technology.

“You get a feel for a client, and Miers struck us as being progressive,” he explains. “When there are a lot of transactions to be processed – as there were in this case – and when customers are coming up against time issues when running end-of-period reports, then HANA is an obvious solution. We knew that Miers wanted to be future-proof, and we knew that they weren’t technology-phobes, so we made the suggestion.”

Enterprise Resource Planning

IT in Manufacturing

LJA Miers will go live with its HANA-driven SAP Business One solution in February 2014

Demonstrated live, using Miers’ own data, the result was a revelation both to Miers and the rest of the management team. Rather than storing data on disk, HANA in-memory technology stores the entire database – as the name suggests – in memory. The result is lightning-fast data access and report generation times that re-define the art of the possible.

“I asked them to run a report that typically took a good half-day to run,” recalls Miers. “It was in front of our eyes in less than a minute. At that point, I knew that we’d found the solution we were looking for.”

Better still, adds Marturano, that same speed applies to every aspect of the system’s operation, including dashboards that update in real time, and critically, material requirements planning.

“Because all of the Bill of Material, inventory, forecast and order book information is held in memory, it’s available instantaneously,” he says.

“The contrast to lengthy requirement planning runs of several hours or more is considerable.”

Real-time reactions

LJA Miers is likely to be the first of many manufacturers to be convinced

by HANA’s speed. Originally promoted to high-end users in a Big Data context when the technology came out a year or so back, the decision to bolt HANA onto a system intended for small and medium-sized businesses could well be a game-changer for SAP, redefining the art of the possible.

It’s great that a mid-sized company like ours can access leading-edge technology that is typically the preserve of larger companies Andrew Miers Managing Director, LJA Miers

“It’s exactly the same SAP Business One as the SQL version, with the same screens and same reports and dashboards, but powered by HANA technology, not SQL technology,” stresses Will Newton, SAP’s head of Business One for Northern Europe.

“And in terms of the licence cost, the additional speed isn’t any more expensive: a HANA license doesn’t cost any more than an SQL license.”

That said, HANA does place a greater workload on the servers running the system, and SAP makes it available only on certified Linux-based servers from Fujitsu, Hewlett-Packard, IBM and Dell.

These, concedes Newton, can be a bit more expensive than other servers, because of the extra RAM necessary to hold the database in memory.

Sales growth at LJA Miers is set to clock up another strong year. Growth is anticipated at 13% in 2013, up from 12% last year and in this environment, the business is convinced that it has made the right technology decision with

HANA. Having made the decision in July 2013, the plan is to go live in February 2014, with capabilities such as inmemory capacity planning and material requirements planning eagerly looked forward to.

“In our business, we have to react very quickly sometimes, and now we’ll be able to just ‘click and drag’ our rush orders, and instantly see the knock-on effects,” says Miers. “It’s great that a mid-sized company like ours can access leading-edge technology that is typically the preserve of larger companies.”

SAP, too, is pleased to see what it hopes will be the first of many mid-sized companies making the move to HANA technology.

“It’s not just about a faster data processing capability,” stresses Newton. “It’s about delivering compelling information immediately.

And in a manner which enables a business to take advantage of that immediacy. That’s the difference that HANA makes.”

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 91

There’s a new system in town Malcolm Wheatley talks to Duncan Smillie, sales and marketing director at KCS Datawright about the newly formed software provider’s ambitions in the manufacturing sector 92 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

E

arlier this year, distribution industry specialist Kerridge Commercial Systems finalised its acquisition of Datawright, a smaller ERP provider for manufacturers.

The resulting combined business, KCS Datawright, now reckons that it has a compelling complete ERP suite for both manufacturers and distributors.

Malcom Wheatley: Let’s cut to the chase. Why would a company known for its distribution software acquire a provider of a specialist manufacturing solution?

Duncan Smillie: There were two main reasons. First, in our core distribution marketplace, we were seeing more and more customers come to us with manufacturing requirements. Seeking to differentiate themselves, they were taking on some manufacturing functions: limited assembly, customisation, kitting, and that sort of thing. And second, we were also encountering a growing number of manufacturers, who were branching out into distribution, and who were consequently coming to us with their distribution requirements. So from both perspectives, it made sense.

MW: But the two businesses weren’t strangers to each other previously. Is that right?

DS: Exactly. There’s a lot of shared history, going back 30 years: our two respective founders were actually friends before founding the companies, and the products are actually written in the same language. And this shared history, as well as the fact that they share a language, makes it very easy to merge both the two products, and the two businesses.

In IT generally, code-base merges don’t always work well. In our case, it’s straightforward.

MW: Kerridge has well-established distribution credentials. But what of Datawright’s manufacturing credentials? In other words, if you’re a manufacturer looking at buying from KCS Datawright, what depth of manufacturing capability and expertise are you actually buying into?

DS: Much more than many people imagine. And it often comes as a surprise to them.

We’ve strong capabilities in both process and discrete manufacturing, and strong offerings in specific sectors such

Enterprise Resource Planning

There’s a lot of shared history and the products are actually written in the same language. This makes it very easy to merge both the two products, and the two businesses Duncan Smillie, Sales and Marketing Director, KCS Datawright

as chemical, electronics, food and drink, defence, marine, and oil and gas. Just ask some of our customers – Dunlop Oil & Marine, Petards Group, Tor Coatings, Fluid Transfer International, and BAE Systems’ Global Combat Systems division, for instance.

In short, we’ve 30 years’ experience in manufacturing, we talk the language, and many of the people working for us have worked in manufacturing industry.

And finally, when a manufacturer buys from us, they’re buying direct, which we like to think gives us an edge when it comes to product development.

Certainly, we have customers compliment us on the depth of our solution in areas such as traceability, packaging reporting, and integration to factory-floor control systems.

Now, we like to think that means that we can offer you better support: no one knows our product as well as we do.

And as well as advice on how to use the software, we also provide advice on the hardware to run it on, and on other IT requirements.

But just as importantly, that direct connection to the customer provides a two-way communication channel between customers and our development staff. Customers like the reassurance of knowing that they can speak to developers, and we like to hear what our customers are saying about their evolving requirements, and where our product should go next. A lot of our innovations and new capabilities are actually customer-led, in response to actual customer requirements.

MW: What do you mean: ‘buying direct’?

Where does the edge come from?

DS: It’s straightforward. Buy an ERP system from one of the majors, and you’re dealing with a reseller, not the software author. And that’s especially so in the case of manufacturing and distribution companies at the smaller end of the size spectrum. But we sell directly.

So you’re talking to us.

MW: And where is K8 Enterprise – to give the product its full name – going next?

DS: The first thing to understand is that pre-merger, Datawright was a relatively small business, and hadn’t really sold its product to larger manufacturers. We want to change that, and bring Kerridge’s larger resource base to the market.

Combined, we’re a bigger development offering, and a bigger

IT in Manufacturing

support offering, and a bigger implementation offering, which will make us more attractive to more customers.

300 staff, 700 customers, 80,000 users, 100 programmers, 70 implementation staff – those are reasonably big numbers. As is the 15,000 people-days a year of product development that’s being invested in the product. And we think that potential customers who once might have thought that we were too small, will now think again.

MW: And the K8 Enterprise product itself, specifically? Where is that going?

DS: Today, we have two products, interfaced with each other. This time next year, there will be one product, a combined manufacturing and distribution product, delivering a full ERP suite. In other words, K8 is already a major product in terms of distribution, and now it’s going to get the element that’s always been missing: manufacturing.

Plus, as I say, we’re working hard on expanding what we do in areas that are important to our customers – mobile, business intelligence, and customer relationship management, for instance.

We already offer a hosted service, and that, too, is becoming something that more companies want to talk to us about.

MW: So you’re optimistic about the future?

DS: Extremely. In the market where both our businesses have always had an edge – smaller companies who value a quality product backed by direct contact with the products’ authors, for support and development – life is getting more complicated.

We’re seeing more and more companies coming to us with separate accounting systems, separate manufacturing systems and separate sales systems, and they’re realising that they’re facing greater regulatory requirements in terms of traceability, and growing customer demands in terms of quality and compliance. Older, separate system just can’t offer that. They want an end-to-end solution, and that’s what they’re coming to us to get.

November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 93

About O’Neal Steel O’Neal Steel is the largest family owned metals service centre in the United States. Being owned by the same family since 1921, means long term stability and an ongoing commitment to quality service. Operating in 22 districts across 75% of the US, O’Neal Steel employs 2,000 people.

Key benefits of Dynamics CRM at O’Neal Steel Cut customer response times by up to 5 days Increase the number of sales calls by 15% per year Revenues increased by up to 6% in the first year

A dynamic solution O

How do you increase revenues by 6% in one year, reduce customer response times and grow market share?

US steel manufacturer O’Neal Industries did it by using Dynamics CRM from Zero2Ten.

94 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

’Neal Industries is the largest family owned group of metals service centres in the USA and forms a group of companies that provide product and manufacturing expertise, with strategically located distribution facilities countrywide.

With the US steel market contracting in recent years the company needed greater visibility of customers, target accounts and pipeline information across the group in order to remain profitable and grow revenues.

O’Neal needed a common platform for producing detailed accurate analysis of business development and sales forecasts.

One of the divisions, O’Neal Steel, required a CRM solution that would bring field-based and internal sales representatives closer together to improve the flow of customer information between them. The aim was to save time on unnecessary sales administration

Admin cut by up to 6 hours per inside sales representative, per week Overall market share up by 2% in the first year of implementation

and increase revenues per customer.

The company was using various spreadsheets and email systems to store customer information which meant that methods for producing quotes, sales pipeline reports and maintaining customer engagement records were inconsistent across their 22 district offices. With no central system in place, untimely responses to customer enquiries resulted in money being left on the table and target accounts being poorly nurtured.

The Need for Speed (of Information Flow)

External sales executives at O’Neal Steel liaised with customers and target new prospects; and producing weekly paper based customer visit reports which were sent to O’Neal Steel offices in Birmingham, Alabama.

Internal sales representatives and management would then respond to

Customer Relationship Management

Zero2Ten claimed that the CRM would be live within 90 days. They maintained momentum and provided us with weekly progress updates that kept everyone enthusiastic David Goff Sales and Marketing Manager, O’Neal Steel

customer enquiries and handle all sales transactions. As the reports were always a week old, much of their time was spent dealing with incoming customer enquiries and chasing the external sales guys for relevant information.

Chasing such information and responding to customers by phone was taking up about 15-20% of their time.

Do It Once, Do It Right!

O’Neal Steel evaluated a number of CRM consultancies and chose to work with Zero2Ten, specialists in Dynamics CRM, based on their portfolio of over 750 successful projects, their efficient approach to implementation and their unique Adopt2Win training methods that empower customers to maximise the impact of CRM in their business.

After discussing overall requirements Zero2Ten ran a workshop with internal and external sales representatives and management, gathering input on managing customer information, improving sales processes, making reports easier to produce, and developing or nurturing accounts more effectively.

This information was mapped on to field sales who were involved in the discussion on how to feed back customer information more efficiently, how to monitor sales performance more efficiently, how sales and new business forecasts could be quickly prepared, and how to increase customer share of wallet.

Microsoft Outlook stored most of the customer contact information, so it made sense that the Outlook front end plugin would sit on top of Dynamics CRM. Dashboards enabled sales executives to monitor and nurture target accounts, share real-time new and existing customer information, prepare sales and pipeline forecasts, and improve sales performance.

CRM ‘super users’ from O’Neal Steel underwent Zero2Ten’s structured programme for administering, configuring and adapting CRM, known as Adopt2Win. Adopt2Win consists of four training levels that offer a mix of theory and practice designed to help clients learn how to create forms, reports, dashboards and workflows.

The super users also became experts in creating new views and reports as the business demands, and were easily able to support other key users of the system within the organization.

90 days promised – 90 days delivered!

Zero2Ten committed to completing the implementation within 90 days and following the initial modelling session.

The baseline Dynamics CRM was built virtually for speed of implementation.

Following several iteration reviews, CRM was integrated with the Microsoft Outlook plug-in and mapped to other essential applications for the preselected test users. This was fine-tuned during the build phase, before the business data was imported and migration took place.

The user community was already familiar with the Outlook interface and were looking forward to the project being completed so they could take advantage of the new system straight away.

David Goff, sales and marketing manager at O’Neal Steel comments: “At O’Neal Steel, we have worked on largescale application rollouts before and as projects can sometimes slip the initial enthusiasm amongst the expectant user community can wane.

“Zero2Ten claimed that the CRM would be live within 90 days. They maintained momentum and provided us with weekly progress updates that kept everyone enthusiastic.”

IT in Manufacturing

incoming calls that were chasing orders and actions and are now making outgoing customer calls in that time; resulting in more new sales.

External executives are spending more time with customers and by sharing information with colleagues more quickly, are much more able to concentrate on nurturing target accounts.

Although the weekly sales call reports are still necessary, new account views mean that updates are visible straight away, speeding up the sales process and improving the customer experience.

Dashboards and management reports are updated real-time and sales pipeline and opportunity forecasts are now much more accurate and efficient.

Improved customer information flow and increased sales activity has resulted in some district offices showing a 6% increase in revenues. One of O’Neal’s districts already ran a CRM system, and even at this office, they have shown a 1.5% increase in sales revenues by adopting the new system.

Goff adds: “This is a fantastic increase in just the first year of using CRM; taking into consideration the fact that the US steel market has contracted over the past few years, this represents an increase in our overall market share.

We are also excited about how CRM will help us in the future. Our power users are already building new workflows and we are planning to create an interactive view to improve the flow of customer information even more.”

For more information and to speak to Zero2Ten, contact: Email: info@zero2ten.co.uk Web: www.zero2ten.com/ crm-for-manufacturers Tel: 0203 608 1445

Shared information, quicker responses, more sales

The implementation of Dynamics CRM was completed and with internal and external sales teams better connected and with the flow of data streamlined between them, O’Neal Steel has realised a huge increase in sales productivity and reduced time to value in existing and target accounts.

Internal sales personnel have spent an additional 15% of their time selling product to customers instead of taking November 2013 | Issue 9 | Volume 16 | www.themanufacturer.com 95

LAST WORD

I can’t remember the last time that somebody – industrialist, lobbying group, politician, dogooder – stood up and made a cogent, topical case for woeful bank lending without sounding really boring

Big Bad Six are the new bankers Energy companies are the new bankers. And not only because British industry (and consumers), have been distracted by new whipping boys…have banks become the good guys asks Will Stirling.

C

an you hear it? Listen very carefully: near silence. The turntable spins but the needle has not been replaced for yet another replay.

Britain has stopped bashing the banks. I can’t remember the last time that somebody – industrialist, lobbying group, politician, do-gooder – stood up and made a cogent, topical case for woeful bank lending without sounding

If companies are not going to seek external finance, this will put a natural ceiling on the rate of recovery of business investment Lee Hopley, EEF

96 www.themanufacturer.com | November 2013 | Issue 9| Volume 16

really boring. While energy companies are the economy’s new Cruella DeVilles, have we finally turned the corner on berating banking?

Cost and availability of credit is improving, according to surveys by EEF, other business groups and the Bank of England.

Finance generally has improved.

Last month, self-styled SME champion Aldermore Bank published figures showing that non-bank lending was at its highest level since 2008. Lloyds Bank, at a September meeting of the Associate Parliamentary Manufacturing Group, still claims it approves eight out of 10 loan applications. And, perhaps the most accurate metric of all, pillorying of bank lending on Twitter has plummeted in the third quarter, according to the @WRStirling Bank Vilification Monitor.

But wait! The SME Finance Monitor says that loan application success rates are running closer to 50% than the 8/10 approvals that Lloyds Bank claimed this year. This level has been pretty stable

for 12-months, with no real sign of improvement.

“We are still seeing a substantial chunk of companies who don’t want to borrow at the moment,” says EEF’s bank conditions expert, Lee Hopley (whose organisation, for the record, doesn’t bash the banks...). “Companies are saying that they are more confident to invest, but if they are not going to seek external finance this will put a natural ceiling on the rate of recovery of business investment. We really need to see these intentions translated into actual purchases of new machinery, and the rate of that not to be held back by companies who do not want to borrow.”

So it is not the dearth of bank lending that keeps us awake at night now, rather lack of business investment, the unwillingness of companies to tap these custodians of cash for a credit line.

So now, we must finally accept, banks are no longer the bad guys and business needs to find another villain.

Enter British Gas, npower, ScottishPower and Southern and Scottish Energy, in alphabetical rather than magnitude of hate order.

Their dual fuel price rises in October averaged 9.2%, prompting David Cameron to ‘roll back’ green levies, in spite of Nick Clegg, and Left wing columnists, and to claim the rise would mean people will die in Britain this winter. Whether or not the Coalition will repeal green levies, or whether Cameron will stand up to the Big Bad Six and enforce some kind of price cap, for now at least one thing is certain. Bankers are smiling.

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 membership 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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Don’t loose sight of this oportunity Wednesday, 4th December 2013 | Birmingham

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