The Manufacturer - October edition

Imagine if… www.themanufacturer.com October 2008 Vol 11 Issue 9

…you could source all the corrugated packaging you need from just one supplier with a network of plants across the length and breadth of Britain?

Defendi n g the realm

A supplier with over 70 design awards to its credit in the last few years alone.

Dedicated to creating packaging which takes cost out of the supply chain whilst boosting sales and profits and reducing carbon footprints.

Using a unique set of tools called PackRight to analyse every single aspect of a packaging opportunity.

Astute production continues at BAE Systems Submarine Solutions

With a world-class Impact and Innovation Centre where you can explore options in a simulated retail and supply chain environment. Well, you can.

Call us now on 0845 260 70 80 or send an email to ideas@dssp.com

Collaborative design

Innovation by partnership

Sustainability

Carbon reduction

World class

Toyota and TPS today

Appointments

www.themanufacturer.com October 2008 Vol 11 Issue 9

www.dssmith-ideas.com

THINK OF THE POSSIBILITIES

Interview

David Smith CEO of Jaguar Land Rover

M an pr ufa ev c iew t u in re sid r e LI pa V ge E 2 42 0 08

The sector’s top jobs

Source of Supply

CEO’s comment

Weathering the storm Hello everyone and welcome to the October issue.

This is, of course, the issue being distributed at The Manufacturer LIVE on 15 and 16 October, and I look forward to seeing as many of you as possible at the event.

As I have mentioned previously, we are experiencing a truly extraordinary economic climate, where the financial life blood of industrial activity is being choked out of the system by a contagion of fear among financial institutions. I know from speaking with many of you directly that this is beginning to have a real impact on your businesses, your future plans and, most significantly, your investment decisions.

Whilst the Bank of England and The Treasury have started to make their presence felt through the Lloyds rescue of HBOS and partitioning of the toxic elements of Bradford and Bingley, this will only have limited impact and will certainly take time to filter through the system.

In the meantime, we are, to a large extent, on our own. We must find ways of working through the current difficulties and on many levels, trading still seems quite robust.

We have recently completed our Annual Manufacturing Survey, and last year, half of all respondents described themselves as ‘quite optimistic’ when asked how the then impending credit crunch would affect their businesses. Twelve months on, that figure has dropped to just over a quarter. Yet, given all the doom and gloom that is ceaselessly forecast, I can’t help but feel reassured by even this level of confidence within the industry.

A small but perhaps significant indication of this enduring confidence is that I am again able to provide you with a bumper issue; this one actually even larger than last month!

We have some excellent learning opportunities for you in this issue, including how collaborative design has helped Bombardier bring new products to market, how the next iteration of the TPS helped Toyota get its new forklift through the development phase, and how flexible working is really starting to deliver benefits for enlightened employers, plus much more besides. I hope you find it useful and, as ever, please let me have your feedback.

Finally, thank you all for such a fantastic and enthusiastic response to the new look – this is just the start, so watch this space.

Nick Hussey – Chief Executive Officer

In order to receive your monthly copy of TheManufacturer kindly email c.penn@sayonemedia.com, telephone 01603 671300 or write to the address below.

Neither The Manufacturer or Say One Media can accept responsibilty for ommissions or errors.

Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers.

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.

Editorial

Sales

l.hoffman@sayonemedia.com

g.smith@sayonemedia.com

Acting Editor – Louise Hoffman

Profiles Manager – Gary Smith Project Director – Matt Chilton

Associate Editors Colin Chinery editorial@sayonemedia.com

Becky Done b.done@sayonemedia.com

Richard Anderson r.anderson@sayonemedia.com

m.chilton@sayonemedia.com

Events Director – Andy Tyrrell a.tyrrell@sayonemedia.com

Recruitment Matt Chilton

m.chilton@sayonemedia.com

Design

Subscriptions

m.mitchell@sayonemedia.com

c.penn@sayonemedia.com

studio@sayonemedia.com

Chief Executive Officer

Nick Hussey n.hussey@sayonemedia.com

j.larcombe@sayonemedia.com

m.young@sayonemedia.com

Assistant designer – Alex Cole

Henry Anson h.anson@sayonemedia.com

Sales Manager – Jane Larcombe

Mark Young

Art Editor – Martin Mitchell

Managing Director

Caroline Penn

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

Copyright © Say One Media 2008.

1

News and features 4 News

Manufacturing news

News in brief from the industry

11 Lean practice Just Jones

There’s more to lean than traditional management systems account for, ays Dan Jones

13 Economics

From Wall Street USA to Main Street UK

What effect is the US financial market crash having on the UK? David Smith comments

14 Interview

Liberating the cat

David Smith, CEO of Jaguar Land Rover, discusses the challenges and successes of life under new ownership

18 Lead story

Swimming against the tide

Are the economic doomsayers right about the state of industry?

Colin Chinery seeks the truth

22 Special feature

Support for manufacturing

What the Government’s new Manufacturing Strategy Review means for you

24 Leadership and strategy

The ‘ultimate change programme’

How to manage the risks of mergers and acquisitions in a practical and people-centred way

30 Design and innovation Finding the right solutions

How Bombardier Rail Control Solutions found innovation success thanks to KTP collaboration

36 World class manufacturing The Toyota Tonero – a TPS story

Catch up with the latest TPS developments direct from the founders of the system

46 Skills and productivity Changing times

Is flexible working a viable option in a continuously improving manufacturing environment?

50 Logistics and supply chain Running the gauntlet

A guide in protecting your supply chain when embarking on global sourcing and market expansion

54 IT in manufacturing Here today

The ERP market is rapidly changing. How should you go about making a system choice?

2

Contents Operations and maintenance 58 Tagging along

Is RFID technology really the answer to all part marking, product security and traceability needs?

Sustainable manufacturing 62 Poised to take advantage

Manufacturers are in the perfect position to lead, and benefit from, the carbon reduction migration

Sustainable manufacturing case study 65 Carbon calculations

IMServ explains how it can help in the journey to greener manufacturing operations

Global focus 66

Football fever and much more

As South Africa prepares for the 2010 World Cup, Nicolette Fox finds out that there are still contracts available

A diary of product development 72 The Evora journey

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

A diary of a takeover 73

Kanban Sheet Metal: the next stage

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

Manufacturinginaction Factory of the month 76 Hunter killer –

BAE Systems Submarine Solutions

Ruari McCallion makes his second visit to Barrow-in-Furness to witness the processes and structures involved in the Astute submarines programme

Destiny in their hands –

NSK Bearings 101

Taking the world by storm –

JDR Cable Systems 105

Destination: world class –

Auto Windscreens 109 BSA foreword 111

First-rate fare –

The Sandwich Factory 113 Turning metal into money –

CMM 117

Fresh thinking –

Loopthinking 120 Evolution for revolution –

Elanders Hindson 122

Pure flowing innovation –

Avilion 125

Combined force –

Fablink 127

Raising efficiency –

Vocollect 130

3

Newsinbrief Corus Process Engineering (CPE), part of Corus Northern Engineering Services (CNES), has won a contract with BAE Systems Submarine Solutions to produce a range of long lead time equipment, such as watertight doors, tunnel hatches and refueling plugs, for use on the Astute Class submarine Boat Number Five. Turn to page 76 for our factory of the month, BAE Systems Submarine Solutions at Barrow-in-Furness.

Powerlase has announced an agreement of a strategic partnership with French fibre laser innovator, Eolite Systems, which will involve a collaboration in broadening the range of laser systems the two firms produce and the markets they can address, and developing business opportunities.

A Government survey has revealed that some small businesses in the UK are saving at least £58 million a year by using a free online service to help them better understand environmental law. Businesses using the NetRegs service were found to have made these savings by improving the efficiency of waste handling, through financial savings on consultancy fees, and avoiding any fines they would have incurred through non-compliance with legislation.

Allerton Engineering has received high praise from Richmond MP the Rt Hon William Hague at the opening of the firm’s new 14,000 square foot factory extension. “It is great to see that Allerton is able to expand in this way. It shows that not everything in the world economy is contracting. I’m really pleased, as the local MP, to see this company doing so well,” he said.

Vanguard – the West Yorkshire wire products, retail display and storage systems manufacturer – has announced new contract gains in the retail sector. Working closely with one of its customers, the firm was awarded a contract to supply a major high street chain with purpose-designed adjustable display baskets. The first part of the programme for 10,500 units has now been completed.

4

Strategy: New Government framework is broadly welcomed by sector

Government launches new industry support strategy The Government has unveiled a new strategy – called ‘New Challenges, New Opportunities’ – to support the UK manufacturing sector in taking advantage of changing sector trends.

The strategy, developed by the Department for Business and the Department for Innovation, Universities and Skills in partnership with industry, will deliver almost £150 million of medium-term investment for UK manufacturing, as well as setting out the Government’s vision for the future.

“Manufacturing is central to the success of the UK economy and it is vital the sector has the right foundations to endure the current economic slowdown and emerge stronger and fitter than ever,” said Business Secretary John Hutton.

“We need to recognise that the global landscape is changing so we can help UK manufacturers stay ahead of the game. I want the UK to be at the forefront of opportunities opened up by the move towards a low carbon economy… [and] we must attract more

talented young people – the lifeblood of future success – into the industry and ensure that this talent is nurtured and developed,” he continued.

The new strategy has been broadly Go to page 22 welcomed across the sector, with to see what this organisations new strategy such as Semta, means for you the Food and Drink Federation, Society of British Aerospace Companies and Manufacturing Technologies Association (MTA) all speaking in favour of the announcement.

Reservations have also been expressed, however: “My initial reaction to this important document is that it is a positive; ambitious and committed to manufacturing. However… the one major disappointment is that the role of trade associations does not seem to have been recognised and MTA believe that this is key in delivering this sort of strategy,” said MTA external affairs manager Simon McVicker.

Automotive: Success for VXR team at British Touring Car Championship

Vauxhall VX Racing cleans up at Brands hatch The Vauxhall VX Racing team (VXR) made it a clean sweep of titles in the final round of the British Touring Car Championship (BTCC) at Brands Hatch as Fabrizio Giovanardi added the drivers’ championship to the manufacturers’ and team wins already secured.

VXR, which is developed by Triple 8 Race Engineering, uses the chassis of Vauxhall Vectra for its touring car.

Compared with the road version it costs around 10 times as much, at £250,000; it is half the weight at 1,150 kilogrammes, including the driver; and it has 40 extra BHP per litre.

It has a sequential gear box and can go from zero to 60 miles per hour in five seconds – 1.7 seconds quicker than its road cousin.

The VXR team will now go straight back into tweaking the design of the car to be ready for the new season in six months’ time. Before the beginning of the 2009 season, work will have also

begun on a brand new car for 2010.

With Vauxhall curtailing production of the Vectra, technical director Kevin Berry will have to choose between its replacement, called the Insignia, and a version of the Astra model.

ManufacturingNews Themonthinbrief

Aerospace: EADS and Northrop Grumman lose out in political row

Pentagon drops USAF tanker deal The Pentagon has withdrawn the controversial US Air Force (USAF) tanker deal, originally awarded to EADS and Northrop Grumman, following political pressure.

US aerospace firm Boeing is believed to have spent millions of dollars campaigning against its loss of the contract to its European rival. Defence analysts believe the Pentagon has now caved in to the lobbying by cancelling the contract until after the presidential election.

“Just how many chances does Boeing get to win this contract?” asked a defence industry insider. “They lost it fair and square but now they get to offer a new plane to see if they can win with that. This competition has become very dirty.”

British Defence officials have condemned the decision, issuing a warning to the Pentagon that retaliation may follow if it continues to block European companies from US projects.

“Is it fair for American companies to compete openly for defence contracts in this country when they are so protectionist in their own?” asked Bernie Hamilton, national officer for the Amicus union.

Acquisition: Wing facility is sold as part of restructuring project

GKN agrees Filton site purchase deal GKN has bought the manufacturing operation at the Airbus factory in Filton, south Gloucestershire, for £136 million following months of negotiations.

The site was offered up for sale by Airbus parent company EADS as part of its Power8 restructuring programme.

“The acquisition of the Filton wing components and assemblies manufacturing operation is a further exciting step in the development of GKN’s aerospace business,” said GKN chief executive Sir Kevin Smith.

“The strategic logic is compelling. It brings a long-term partnership with Airbus and a strong order backlog which supports solid growth.”

The company plans to invest £125 million over the next five years in developing the site as a centre of excellence.

Chief executive of the SBAC Ian Godden welcomed the news, saying: “Aerospace in the UK is a manufacturing success story and this deal will ensure that a site that plays a significant part in that success continues to do so.”

East Kilbride-based Clyde Blowers has agreed a $1 billion (£559 million) deal to purchase an entire business unit from American Fortune 500 company Textron. The acquisition will include the companies Maag Pump Systems, David Brown Gear Systems, David Brown Hydraulics and Union Pumps, which together had formed Textron’s Fluid and Power Division.

Plans will involve Union Pumps being integrated into the Clyde Blowers business Clyde Pumps. “The integration of these two businesses together with an exciting Clyde Pumps joint venture with WPIL (formerly Worthington Pump India), and a joint venture in China which is expected to be finalised by the end of October, will create a new global pumps business capable of competing effectively in several high growth, high margin markets,” said Clyde Blowers owner Jim McColl.

Dunlopillo Latex Foam, the Pannal, North Yorkshire-

based bedding manufacturer, has fallen into administration, with 155 workers likely to lose their jobs. Rising raw material and energy costs, as well as failure to secure funding, have been blamed for the downfall. “Dunlopillo is one of the few truly worldwide brands in the sector that is immediately recognisable to the customer,” said Howard Smith of KPMG. “We are continuing to trade the company while discussions take place with both external investors and trade buyers in an attempt to secure a going concern sale.”

This year’s Manufacturer Awards have attracted a bumper crop of impressive entries, especially in the Sustainability category. “We are delighted by the number of quality companies that have entered the Awards. It is a tremendous platform for UK manufacturers to showcase their considerable talents, exchange ideas and generate new opportunities. Although the current market remains challenging for most businesses, UK manufacturers continues to outperform other sectors which is a reflection of the quality of the management teams who continue to focus on the bottom line. RBS is proud of its association with The Manufacturer and views the Awards Dinner as a fantastic opportunity to celebrate companies achieving excellence across the industry,” said Adam Smith of RBS. The Volkswagen-owned luxury car brand Bentley is following in the footsteps of Land Rover in cutting production at its UK plant in Crewe while demand for high-end value models is low.

Staff at the factory will work a three-day week until at least the end of the year and possibly beyond, the firm said. Though working one less shift than usual, wages are set to remain the same. Bentley has recorded a 16 per cent decrease in sales in the year to date, which includes a 46 per cent fall in June.

Premier Foods has used key product price rises in the last few months to hold out for its expected four per cent profit increase. In the first half of the year Premier made pre-tax profits of £60 million. But it does however now have net debts of over £1.8 billion, the announcement of which led to an eight per cent drop in share price to 89.5 pence. With a portfolio of brands which includes Cadbury, Hovis, Oxo, Ambrosia, Crosse & Blackwell and Bird’s, according to the company, 98 per cent of homes have one of its products stocked in the kitchen cupboard.

Premier Foods’ chief executive, Robert Schofield, said: “Our expectations for the year as a whole remain unchanged, with progress weighted towards the second half as the benefit of all these fundamental actions begin to flow through.”

5

Newsinbrief Land Rover has announced it is to cut production shifts at its Solihull, West Midlands, site by one day per week due to slower world economic growth and “challenging” UK and US conditions.

The changes are to take effect immediately, with some night shifts likely to be suspended as of October, but with no redundancies expected.

Tate & Lyle is to part ways with its finance director, John Nicholas, by way of a “mutual agreement”. Nicholas, who joined the company in 2006, is now set to leave at the end of the month, taking with him a full compensation package.

Chief executive Iain Ferguson described the departure as “amicable”, and that it had been a delayed response to the significant drop in the group’s share price announced in September 2007.

Ian Pearson MP, Minister of State for Science and Innovation, is to discuss the Government’s commitment to innovation in UK plc in his keynote speech at the World Quality Day Conference 2008, which is to be held on 13 November in London. He will be joined by leading business proponents of the quality agenda.

Calypso Soft Drinks chairman and CEO, Peter Cooke, has announced the acquisition of Mr Freeze – the successful UK and European brand leader in freezepops – as part of a longer-term strategy to access wider European markets. “Mr Freeze is a great cult brand in many European countries and it naturally complements our Calypso range,” he said.

Wallsend-based engineering company International Syalons has been awarded a £99,500 Selective Finance for Investment (SFI) grant from the regional development agency to allow it to invest in a state-of-the-art sintering furnace. The new furnace has already increased the firm’s production capacity by six times.

6

Economy: Credit crunch needs to be tackled head-on, says manufacturers’ organisation

EEF seeks state support for manufacturing sector EEF has called upon the Government to fast-track policies and legislation that would ease the burden of the challenging current economic climate and enable firms to safeguard jobs.

Having carried out a joint survey throughout last month with the global business consultancy firm Grant Thornton, EEF concluded that while manufacturing is performing positively as far as output and export orders are concerned, there is growing trepidation among industry insiders about alarming three-year low new orders – the ramification of dire domestic demand.

Just three areas registered a positive balance on the order books: the north west; south west; and Yorkshire and Humberside.

“Manufacturing has shown considerable resilience in the face of a credit crunch, a global economic slowdown and a massive increase in its costs. But there are now clear signs that these pressures are starting to take their toll on companies,” said EEF Chief Economist, Steve Radley.

“Given the Bank of England’s hands remain tied in the short-term, it is now essential the Government tackles this turning point for the economy head-on. It must avoid adding any further costs to business and put in place policies which will

provide the building blocks for an upturn,” he added.

Bob Hale, head of manufacturing at Grant Thornton, said that export orders, while not exactly offering rocksolid stability, had been the saving grace for a lot of manufacturers.

“UK manufacturing has looked to its export markets for buoyancy this year, but it seems many of the key markets we export to, particularly in Europe, are now coming down with the same malaise afflicting both the US and the UK,” he warned.

“However, exporting to emerging markets is still seen as an insulating factor and those UK manufacturers that are able should now be exploring these markets with renewed vigour.”

In supporting Radley’s plea for state aid, he said: “Any respite will now be welcome in what is likely to be a winter of economic discontent.”

Go to page 18 to read this month’s lead story on the economy

Skills: Business training and development initiative gains government backing

University of Derby launches new business division With over 100 business leaders in attendance, the University of Derby has officially launched its new operating division – ‘corporate’.

This major new initiative will focus exclusively on delivering business training and development. The University is well established and already highly regarded for its innovative and flexible approach to working with industry. The new division aims to set a benchmark for collaboration between educational establishments and industry.

The University is striving to be “demand lead” and will work closely with businesses to identify training needs and skills shortages. It will

structure and evolve bespoke flexible training programmes that provide recognisable qualifications.

“This is what the Government calls an employer engagement strategic initiative, and it’s designed to address issues such as regional higher level skills shortages, the need to get more people into higher education and the need to ensure our businesses are as competitive as they can be in a global market,” said the University’s vice chancellor, John Coyne.

The initiative is backed by £12 million of Higher Education Funding Council support and funds from other sources.

ManufacturingNews Strategy: Diageo announces plans to build a new County Kildare factory

Guinness production returns to Irish birthplace Brewer Diageo is to build a new factory for the production of Guinness in Leixlip, County Kildare, Ireland – the place it was originally made.

Plans are to call it the Arthur Guinness Brewery in homage to its original inventor.

“The choice of the location of the new brewery follows an extensive due diligence and site selection process,” said Gerry O’Hagan, supply director for Guinness and Baileys. “The new brewery is part of the single biggest capital investment made by Diageo in its supply infrastructure since the company’s creation 10 years ago and will enhance the cost competitiveness of our global beer operations.”

The popular stout-based beverage,

renowned for its inventive advertising campaigns, appreciation of world records and suitability to the palette of its home nation populace, is currently made at St. James’ Gate Brewery, Dublin. That site, nine miles away from the new one, is to be kept on by Diageo and will also enjoy a redevelopment, the firm said.

Desmond Guinness, family descendant, said: “We are absolutely delighted that the new Arthur Guinness brewery will be built on Guinness land here in Leixlip. It is wonderful to know that the strong historical roots between the Guinness name and Leixlip will endure for generations to come.”

The factory is expected to be operational in 2013.

Newsinbrief Aston Martin chief executive officer Dr Ulrich Bez has announced his intention to revive the Lagonda marquee.

“After my eight years with Aston Martin, four with profitability, and 16 months of independence, it’s time to think about a longer-term future,” said Bez. “We have now investigated and concluded that the revival of the Lagonda brand would allow us to develop cars which have a different character than a sportscar, and therefore have a perfect synergy [with Aston Martin].”

The head of the National Skills Academy Process Industries is backing calls from the CBI to encourage young students to take up triple science, which he believes would result in a boost in solving the problem of attracting the 24,000 young people needed by the process industries over the next decade.

Contract electronics firm ACW Technology has launched a new apprenticeship scheme to try and encourage more people to choose a manufacturing career in the technology industry. “Even though the UK electronics and manufacturing sector remains vibrant, the workforce is ageing and the industry is crying out for an injection of fresh, young blood,” said managing director Owen Reeves.

R&D: MoD begins 15-year collaboration with research firm

QinetiQ wins £150m MoD contract The Ministry of Defence (MoD) has signed a £150 million agreement with QinetiQ which marks the start of a 15-year collaboration between the two organisations.

The contract – called the Maritime Strategic Capabilities Agreement (MSCA) – will allow the MoD and other government and commercial customers access to QinetiQ’s facilities in Portsmouth, Gosport and Rosyth and expertise in maritime research and technology.

“Through the MSCA, QinetiQ will continue to deliver critical facilities that help the Royal Navy save lives, time and money,” said QinetiQ CEO for

Europe, Middle East and Australasia Clive Richardson.

“The MSCA also gives us a strong platform on which to attract further commercial business to the facilities. It means we can make a real contribution to driving down commercial marine research costs while developing environmentally-friendly technologies in sectors such as tidal power generation.”

The UK government has also negotiated an agreement with the French government which will allow the UK to make use of the cavitation tunnel at Val de Reuil, and for the French to use the ocean basin at Gosport in exchange.

Chris Viehbacher, one of the contenders for the CEO position at GSK, has quit the company to join rival firm SanofiAventis as a top executive. “It’s about pride and ego for people in those sorts of jobs,” said one headhunter. “Losing out is not in their game. Staying on is like living with your grandmother or your mother-in-law.”

Precision Micro – a specialist in the manufacture of metal components for the automotive industry – has moved to a new £7.4 million purpose-built facility thanks to a boost in international orders. The company made use of support from supply chain initiative Accelerate in conducting its successful global sales drive.

7

Manufacturingoutput Manufacturers battle on The most recent figures from the Office for National Statistics (ONS) show no signs of improvement, though the manufacturing sector continues to fight back against the economic downturn.

Manufacturing output decreased by 1.1 per cent in the three months to July 2008 compared with the three months to April 2008. Output decreased in 10 out of the 13 subsectors and increased in three sub-sectors.

In the latest three months, there were significant decreases in output of 2.4 per cent in the food, drink and tobacco industries, 2.9 per cent in the electrical and optical equipment industries and 4.2 per cent in the other manufacturing industries not elsewhere specified.

There were no significant increases during this period, suggesting that the economic climate is continuing to impact operations.

Between June and July manufacturing output decreased by 0.2 per cent. Output decreased in 10 of the 13 subsectors and increased in three sub-sectors during the latest month. Within the widespread decreases, there was a significant decrease in the electrical and optical equipment industries where output decreased by 1.3 per cent. Once again, there were no significant increases in the latest month.

Overall production output decreased by 1.1 per cent on a three-monthly basis and by 0.4 per cent between June and July, with mining and quarrying output decreasing by 3.8 per cent. Oil and gas production decreased by 4.4 per cent due to ongoing planned maintenance but energy supply output increased by 0.9 per cent.

“The 1.1 per cent drop in manufacturing output suggests the weakening in consumer spending has started to feed through to production levels,” said Ray O’Donoghue, head of UK manufacturing at Barclays.

“Sluggish UK demand is being compounded by a drop off in the US and Europe which is preventing exports from covering the shortfall in domestic orders. However, despite these pressures, UK industrial confidence continues to run at a higher level than consumer confidence. Manufacturers who have experienced painful times before, are more prepared for these challenges, with leaner businesses, both in terms of how they run their working capital and production efficiencies.

“The announcement that input prices fell by two per cent also offers some comfort. However, we are seeing manufacturers reviewing their plans and forecasts on a regular basis and increasing their risk management particularly hedging against further cost increases. We will see manufacturers managing their order book more closely over the next few months.”

8

Investment: Medical device firm to expand once again

CaridianBCT investment to create new jobs Medical device manufacturer CaridianBCT is to invest £16 million in its Larne, County Antrim site over the next three years, it has been announced.

The investment, which includes £1.7 million of support from Invest Northern Ireland, will be used to expand the site, creating over 235 new jobs and offering local people the opportunity to gain transferable skills in the life sciences sector.

“This major investment is a boost for Larne and for the Northern Ireland economy as a whole,” said Economy Minister Arlene Foster. “CaridianBCT has set ambitious targets including increasing production at its Larne operation and more than doubling employment over the next three years.”

Meanwhile, senior vice president of operations Craig Rinehardt said: “The Larne site offers a proximity to important European markets such as Germany and Spain.

“Key to our success in Larne has been the talented people. They understand the need to maintain the highest levels of process excellence in the manufacture of sterile medical solutions and devices. This investment will enable us to build on our growth to date.”

Economy: Credit crunch hinders new factory plans

Quinn Group puts expansion on hold Irish firm Quinn Group has postponed plans to build a new factory alongside its existing building in Newport, south Wales, due to the struggling economy.

The planned plant, which would have created 340 jobs and produced insulation panels, was due to be operational by the start of this year.

“Because of the way the economy has gone we have decided to lay off,” explained a spokesman for the company.

“We are going to lay off until the economy picks up. There is no point getting something up and running while the economy is slowing down.”

Newport councillor Matthew Evans said: “This scheme would have created hundreds of new manufacturing jobs in the city and we will continue to work with the company and the assembly to ensure that this significant investment does come to fruition.”

The firm has, however, provided no suggestion as to when the plans may resume.

ManufacturingNews Production: Toyota bosses review operational strategy

Toyota cuts Burnaston production schedule Bosses said they will be constructing a future strategy over the period.

“The business environment is rapidly becoming more difficult.

Things remain very uncertain, not just in the US but in emerging countries and resource-rich nations as well.

We cannot be optimistic now,” conceded Katsuaki Watanabe, president of Toyota.

None of the plant’s 3,800 permanent staff are to lose their jobs but courtesy is not likely to be extended to all of the 220 temps. The staff will receive extra training and will perform maintenance duties while relieved of their usual tasks.

Tom Sawyer, a regional union officer at Unite, said: “The global economic downturn Go to page 36 is presenting car manufacturing with tough to read more about challenges. Toyota’s response the development of has been to take a longerthe Toyota Tonero term view of the market and make adjustments now to position it for future recovery.”

Toyota is to cut production at its Burnaston factory in Derbyshire, the UK’s second biggest automotive producer after the Nissan plant in Sunderland.

For five months, Toyota will reduce shifts and increase stoppage time. Fifteen thousand less vehicles will roll off its production lines in that time. Last year, the plant produced 277,000 cars.

Automotive: T&E report shows a lack of environmental awareness

New cars falling short of emission targets The automotive industry is failing to meet proposed EU targets on carbon dioxide emission reductions from new models, according to a report from the European Federation for Transport and Environment (T&E).

Special praise, however, was reserved for BMW which is reportedly reducing the emissions of its new vehicles at a rate four times faster than its competitors and peers.

The T&E measures CO2 emissions by the fuel efficiency of vehicles. It said BMW’s cars improved 7.3 per cent on average last year – from 184 grams of CO2 per kilometre down to 170 – against an industry average across the EU of 1.7 per cent.

Environmental experts applauded BMW’s approach too. It said the German-based firm was actually

focusing on improving all its models rather than simply introducing ‘green eco-models’ as a token gesture to bring its average down.

Meanwhile, Toyota’s emissions decreased by 2.4 per cent and Ford’s were down only 0.2 per cent. Honda’s actually increased 1.1 per cent.

“The slow response of most carmakers shows that the EU needs to keep up the pressure with challenging, long-term CO2 targets,” said Jos Dings, director of T&E. The T&E has set the automotive industry a target of 120 grams of CO2 per kilometre by 2012.

Newsinbrief Pump and motor manufacturer Hayward Tyler is celebrating the 100th anniversary of its submersible electric motor design – the first unit of its type to be patented. “2008 is a milestone celebration for Hayward Tyler,” said group sales and marketing director Mark Wood. “The company already has an enviable heritage, being almost 200 years old.”

British furniture manufacturer HJ Berry has received a second accolade for its unique green operations. The company, based in Lancashire’s Forest of Bowland, has secured a Green Apple Environment Award for its pioneering work. Judges selected HJ Berry for its wide-ranging social and environmental programme. The award will be presented at the House of Commons in November.

Contact lens manufacturer CooperVision has completed phase one of its business improvement training programme.

Fifty employees have achieved an NVQ level two in Business Improvement Techniques, with a further 250 set to embark on the course. The scheme has been partially funded by the Government’s Train to Gain initiative.

Gravatom has opened a new facility in Fareham to support its manufacturing sites in Hampshire and west Cumbria. The 15,000 square foot James Watt Building will be used for mild steel fabrication and welding, allowing segregation of stainless steel and machining and assembly to be carried out at the neighbouring William Kelvin and John Harrison buildings.

Toyota has secured a deal with GMB union to provide their field staff with its environmentally friendly Prius car. The deal, which also includes Avensis models, is worth nearly 500 cars over four years. “GMB members have demanded that the union act on improving its environmental impact, and the move over to the Prius represents one of the largest changes we have made to meet that demand,” said general secretary Paul Kenny.

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

9

Join the people who will develop a non-polluting fuel The Institution of Engineering and Technology has over 150,000 members in 127 countries. It’s where great minds meet.

As a member: s s s s s s s

SHARE lNDINGS AND BEST PRACTICE THROUGH OUR ONLINE COMMUNITIES ACCESS BOOKS AND JOURNALS AT THE )#4 ,IBRARY INmUENCE 5+ GOVERNMENT POLICY RECEIVE FREE MAGAZINES AND SUBSCRIBE TO JOURNALS AND RESEARCH TOOLS ACCESS EVENTS AT A SIGNIlCANT DISCOUNT PLUG IN TO LIVE STREAMING OF LECTURES WITH )%4 46 DEVELOP YOUR CAREER WITH PROFESSIONAL QUALIlCATIONS INCLUDING #%NG

)%NG AND %NG4ECH REGISTRATION WITH %#UK.

/UR MEMBERS ARE THE DECISION MAKERS RADICAL THINKERS AND PROBLEM SOLVERS WHO ARE FACING THE CHALLENGES OF OUR WORLD 4HEY ARE INSPIRING PEOPLE If you’d like to shape the world too, join us.

www.theiet.org/join Please quote ‘Advert’ when applying online

The Institution of Engineering and Technology is registered as a Charity in England & Wales (no 211014) and Scotland (no SC038698)

JustJones Dan Jones

Call to action Dan Jones, founder and chairman of the Lean Enterprise Academy Email: dan@leanuk.org

Last month

I concluded that simply overlaying lean tools and rapid improvement events on an existing management system using traditional change management techniques is unlikely to be sustainable. Indeed, if we go no further than this, there is a real danger that lean could well become another wave or programme of the moment that would inevitably subside like so many other waves. Consultants would inevitably look elsewhere for the next thing to sell their clients. Meanwhile the gap between Toyota and the rest would continue to grow and we would have missed a huge opportunity.

“The clear intent of lean action research is to generate knowledge that can be acted upon by others. We can draw on Toyota’s example for our questions and hypotheses but the problem to be solved is how to make them operational in other organisations” I get asked to look at lean transformations in all kinds of sectors. And I come to the same conclusion every time – the crucial missing element that determines the likely success or failure is management and leadership.

Using tools and engaging employees in seeking out waste is not enough. Over the years we have spent a lot of time learning how to use the right lean principles in the right sequence to redesign value streams in all kinds of situations – from discrete assembly to process industries; from transactions processing to call centres; and from grocery distribution to flows of patients through hospitals. Finally we are beginning to see lean breaking out of operations to true end-to-end value stream redesign. This is very powerful but even this is not enough. It is certainly necessary but it is not sufficient.

So our challenge is how to describe and create a lean management system that goes beyond what we might call traditional modern management. We have all learnt a great deal from reading about and hearing first hand

Dan Jones calls for manufacturers to look beyond traditional management systems and to engage in lean action research

experiences of how Toyota’s management system actually works. This must be the starting point and the continuing reference point for such a journey – but there is still a lot of work to do before we have a functional equivalent and a lean transition path that will create the management behaviour and leadership roles that go with lean. We know this knowledge cannot be generated in a classroom or by desk research. It is also difficult to do through traditional consulting. The only way I know to do this is by engaging in real experiments in real situations and systematically reflecting on what works and what does not. Jim Womack and I were fortunate in being able to observe experiments by others in writing Lean Thinking. Now it is time to get involved in what I call lean action research.

Lean action research goes beyond traditional consulting in its intent, its execution and in the reflections on its results. The clear intent of lean action research is to generate knowledge that can be acted upon by others.

We can draw on Toyota’s example for our questions and hypotheses but the problem to be solved is how to make them operational in other organisations. This is a very different objective to selling a repeat product to many clients to make as much money as possible. Yes, it is more risky, and top management has to sanction the experiments and be willing to learn from the results of both successes and failures. But if the joint intent is clear from the outset it can be a very powerful win-win for both parties.

To generate real knowledge about what not only creates progress with lean but what sustains and builds on it over time, the execution phase is also very different.

Right from defining the business problem to be solved and scoping the experiment, it has to be based on a mentoring and do-it-yourself approach rather than an expert-led roll out.

The final step is to reflect on the results and to write up the lessons from several similar experiments in order to make them public so others can act on the results themselves. Of course, the host organisation for this lean action learning is interested in stealing a march on its competitors. What distinguishes the winners and losers is not the knowledge itself but the ability to act on it over time. Consultants will no doubt play an important role in disseminating these results but only if we are able to create self-sustaining, exemplar organisations to act as role models for others to follow.

Have your say at www.themanufacturer.com

11

12

Economics David Smith

From Wall Street USA to Main Street UK David Smith, economics editor of The Sunday Times www.economicsuk.com

At times of

high drama in financial markets, it is never wise to assume anything. Wall Street has had its Black September and there is no guarantee that the drama is over. The thrills have been coming thick and fast and, for those caught up in them, it has been no fun at all.

At the time of writing, we have seen the two central props of the US housing market, Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (The Federal Home Loan Mortgage Corporation) rescued by a Republican government in America.

We have also seen the bankruptcy of Lehman Brothers, which was America’s fourth largest investment bank before it folded, and which had a history dating back more than a century and a half. Lehman survived the 1929 crash but not the credit crunch of 2008. Perhaps it was more cautiously managed back then.

Neither did Merrill Lynch – another venerable Wall Street institution – survive 2008 as an independent bank, forced to submit itself to a takeover by Bank of America, something that would have seemed inconceivable just a few weeks before.

So what does it all mean for industry in Britain? The caveat I will enter in writing this is that we still do not know how big an assault there will be on UK banks, and to what extent this will force mergers or even more drastic developments. The state of play as this piece was delivered was that the share prices of the banks had taken a battering, though nothing worse had happened.

The big picture, however, is that the financial world is changing, and very dramatically. The bets that the investment banks placed, and which went so badly wrong, mean that very few of them will survive as independent institutions, as we have seen. The “masters of the universe” have ceased to control even their own destiny.

For banks in general, the expansive mood of a year or so ago has been replaced by retrenchment and caution.

For consumers in particular, but also businesses, the period of credit rationing we have entered will be an enduring one. That may mean, as in past episodes of this kind, sudden withdrawals of credit lines or reductions in overdraft facilities. As many in business have already discovered, your friendly bank manager is no longer so

The US financial market crash continues, but how is this affecting UK markets and manufacturers?

David Smith comments

friendly. Modern economies run on credit, so a sudden decline in the availability of credit – the definition of a credit crunch – is bound to have a significant impact.

The significance of the latest bout of turbulence in financial markets is that it suggests the crunch will be more prolonged than might have been hoped. At various stages since the financial crisis broke in August 2007 there have been hopes that the worst was over. Every time, so far at least, those hopes have been dashed.

This looks like it will be an uncomfortably long haul.

The result is that predictions of recession in Britain, and in the other advanced economies, are now the mainstream view. Taken together, 2008 and 2009 will, if the forecasters are right, represent the two weakest years for the UK since the recession of the early 1990s. And, given the speed with which the outlook has deteriorated, predictions by the CBI and others of only a “mild” recession cannot be assumed to be the final resting place for views on the economy. The CBI expects a “shallow, technical recession” and wants the Bank of England to cut interest rates to head off something more serious.

Every cloud, though, has a silver lining. One silver lining in the deterioration in the global growth outlook (even China has cut interest rates) is the bursting of the commodity bubble. Many ‘experts’ said oil prices would never fall below $100 a barrel again. But they did, as speculative positions were unwound. Already the drop in commodity prices is being reflected in manufacturers’ costs, which in the summer were rising by a pain-inducing 30 per cent compared with the previous year. We are not out of the woods yet, but there are a few shafts of sunlight.

There may also be a shift in the way we see wealth creation in the future. It had become fashionable to regard financial engineering as more worthwhile than traditional engineering. Now we have seen that the products of that financial engineering are dangerous, or ‘toxic’ to use the jargon. It would be optimistic to believe that the consequence of this will be an immediate reappraisal of the role of manufacturing in the economy. Over time, though, that may happen.

Certainly, any manufacturer whose products fell apart as disastrously as some of the financial inventions of the banks would have no realistic expectation of remaining in business.

Have your say at www.themanufacturer.com

13

Liberating

the cat

As Jaguar Land Rover begins to flex the muscles of its new found autonomy, CEO David Smith talks to Gay Sutton about the challenge of transforming the company into an independently minded and future embracing business

14

Interview David Smith

What brings

an economist with an MA from Cambridge into manufacturing? It’s not the most common career choice.

High flying graduates tend to have their eyes fixed on a short high earning 10 year stint in the City followed by a life of luxury. But not so for David Smith, CEO of Jaguar Land Rover (JLR). He is one of a very rare strain of economists for whom banking holds no lure – and considering the turmoil in the City at the moment, that may have been a very wise choice. “I really wanted to work in a productive industry, and the car industry is a great one because it has so many disciplines to it: finance, marketing, R&D, design and of course manufacturing.”

Smith has been a Ford man for most of his working life. His arrival at the top job caring for what can only be described as two of the most well loved and respected English car brands seems to have been charmed. He travelled the world with Ford, has worked in the US, opened a joint venture operation in Turkey, has been director of finance and strategy for Ford of Europe and the Premier Automotive Group, and eventually led the sale of Aston Martin. “I worked really hard on that to find the right solution for Aston, which I think we did.”

He then started the same process for JLR, “and did a lot of the upfront work, including meeting Mr Tata in the early stage.” But when it became likely that he would remain with JLR after the sale, he withdrew from the negotiations. But by then it was too late, he had already made an impression on what was to be the new management.

“We had a plan for day one. Just like Y2K, we were all set up with contingency plans but nothing went wrong. We didn’t miss a beat in going from Ford ownership to Tata”

The deal was signed, JLR was sold to Indian industrial giant Tata in June this year, and Smith became chief financial officer for JLR under Tata. But within weeks of his arrival tragedy struck and the CEO Geoff Polites died.

Smith described the subsequent events modestly: “Tata put me in as a temporary CEO, and eventually made the appointment permanent.”

He was an excellent choice for the job, as Smith has embraced the challenge, and his style is to lead with a positive dynamic, and to lead from the front. “One of the things I’m encouraging my team to do is grab this opportunity. We’ve run our business in quite a bureaucratic way in the past. This new autonomy gives us chance to think afresh.” And of course, as a small player in the market, JLR is well positioned to be more urgent and responsive.

“There are plenty of goliaths out there,” he said. “We should be much more nimble. I want to take decisions quickly, then get on and do it.”

To lead this change, Smith has laid down a personal pledge to all his staff. “I’ve said I’ll give anybody an answer in 24 hours. It’ll be yes, no, or I need some more information to take the decision.” It has been hard and will continue to be

15

hard. He admits that coming from a finance background he’s had to develop an entirely new way of thinking, one that is far more focused on the customer and on the product. But he wants everyone in the company to adopt this responsive problem solving ethos. “It’s going to be quite a challenge for all of us, but a really interesting and exciting one. And people are beginning to grab it already.”

“Put simply, it’s all about design: bringing the very best of British design to producing sports cars and sporting sedans, and the finest all-terrain vehicles. If we can do that then we can really unlock the potential in the business”

Biography 1961:

Born in Lode Lane, Solihull

Education: MA in economics, Cambridge University 1983

16

1983:

Joined Ford of Britain finance staff

1989:

Sales controller, Ford Switzerland

1991:

Joined Ford of Europe Treasury

1994:

Appointed finance director, new markets, Ford US

1997:

Appointed CFO, Ford Turkey

2000:

Joined Land Rover as finance director

2002:

Appointed CFO and business strategy director, Jaguar and Land Rover

2005:

Appointed finance and business strategy director, PAG and FOE

2008:

Appointed CFO and acting CEO Jaguar Land Rover in April and then in June, following acquisition of Jaguar Land Rover by Tata Motors, appointed CEO, Jaguar Land Rover

Migrating the company away from the tightly meshed management and industrial structure of Ford was never going to be easy. “We had a plan for day one,” Smith said.

“Just like Y2K, we were all set up with contingency plans but nothing went wrong. We didn’t miss a beat in going from Ford ownership to Tata.”

Like two trees that have grown up side by side, however, JLR’s roots and branches are still inseparably enmeshed with those of Ford, and Smith acknowledges that the separation will be a lengthy and intricate business. “We now have a complex plan to complete the separation,” he said. “For instance, the IT separation is going to take us a couple of years. Most of our overseas operations were in some way integrated with either Ford or Volvo. And there are some functions that Ford performed, like financial, accounting, tax and treasury, that we will now have to create a new capability for.”

Perhaps the most long winded element of the separation will be the product development and manufacturing sides of the operation “We have technology sharing agreements that support the business for quite a few years yet. And it makes sense for us to cooperate on programmes that we’re already a fair way down the road on: electronics and safety systems and so on.” And of course JLR buys all its engines and some of its components from Ford or its joint venture with Peugeot. “The intention is to continue that well into the next decade. That will provide continuity of supply for us, and security for the Ford plants at Dagenham and Bridgend.”

So the situation appears to be win-win, and Smith is proud of the fact that there is a huge amount of good will for JLR at Ford, from the top all the way through to the technical staff who will still need to work with his design and manufacturing teams. “It’s important that we keep that going,” he said.

Having been a closely meshed element of the US automotive group, life as part of Tata could not be more different. “Tata want us to operate as an autonomous business within their

Interview David Smith

group – that’s how they operate all of their businesses.”

Gone are the shared initiatives, the linked administration, and closely linked corporate strategy.

JLR now operates with a very small strategic board that consists of Ratan Tata, chairman of Tata, Ravi Kant, managing director of Tata automotive division, and of course Smith himself. “We will meet every couple of months to look at the strategic decision making around the business. But they’ve delegated all the day-today operating authority to me, and I have an executive committee that runs the business on a day-to-day basis from the UK.” There are a few areas where JLR has engaged with Tata.

For example, it is using one of the Tata IT businesses to help with the IT transition, and is looking for opportunities for technology sharing across the automotive division.

“But at the moment we have the best of both worlds, we’re autonomous, we’ve the right strategic dialogue going on, we’ve got a good relationship with Ford.”

Smith has a very clearly defined vision for the future of the company and its iconic brands. “Put simply, it’s all about design: bringing the very best of British design to producing sports cars and sporting sedans, and the finest all-terrain vehicles. If we can do that then we can really unlock the potential in the business.

And we deliver this through the products and through environmental innovation.”

JLR has already been cutting its carbon footprint by around four or five per cent a year across the manufacturing operations, and has invested a considerable amount in developing a wide range of new environmental technologies to improve the performance of its vehicles.

Smith sees this as essential, and wants to position the company at the forefront of developing the technologies of the future. “It’s a truism at the moment that there aren’t any silver bullets around, and we have to keep working on a variety of technologies,” he said. “The change going on in the industry is huge. It’s moving from the technology of the internal combustion engine that has been static for a number of years, to something that’s moving rapidly towards the electrification of vehicles. But in between there’s a lot of intermediate technology, and we’re working on delivering that.”

To stimulate and encourage entrepreneurial and creative thinking across the business, Smith has set his entire workforce a challenge, to improve the environmental performance of the product and of the business by 25 per cent over the next few years. “Once you give engineers a very specific target, that’s when they start getting really innovative.”

Although not an engineer himself, it’s obvious he finds the innovation in technology fascinating.

The company is currently working on a large number of projects. The next generation of small Land Rovers are expected to deliver around 60 mpg through the use of JLR’s new ERAD (electric rear axle drive) system, a diesel electric hybrid that does not lose out on four wheel drive capability. But the research does not stop at the engine, it reaches into all areas of automotive technology from the transmission and clutch systems

through to the use of fly wheels to recapture the energy used on braking.

“It’s interesting how much engineers are finding in the detail, in what we collectively call parasitic losses,” he explained. “If you can get a one or two per cent improvement there, it all adds up. One really fascinating thing that we’ve found, for example, is that there’s a log of redundancy in the electrical systems within vehicles.

The power systems are on but not doing anything. So with smart switch-off systems, we believe we can reduce the power usage by up to three quarters.”

Jaguar has, of course, been pioneering the use of aluminium to reduce vehicle weight, and Smith is keen for this to happen across all brands. But the concept is now being pushed to the next level in a project with the Technology Strategy Board to produce sheet aluminium from recycled material rather than from original aluminium ore which is a very high energy process. There are enormous banks of recycled aluminium cans around the country, and transforming them into sheet aluminium requires only one fifth of the power that primary smelting requires.

There are also increasingly strong financial arguments for using recycled materials with the cost of transport, power and raw materials rocketing. But Smith is, fundamentally, an economist and I asked him for his crystal ball view of the current global financial crisis and what it will mean for JLR. “We’re going to go through

“I suppose it’s quite a brave call at the moment to continue hiring graduates and apprentices, but it is hugely important that we continue to invest over this period to ensure a strong long-term future” a very tough period. We’ve already taken the decision to reduce production and, personally, I don’t see the situation improving before the middle or end of next year. There is a fundamental problem with confidence which will have to work its way through the system,” he said. “But I think there’s a really great long-term prospect for us.”

He is determined to protect the long-term future of the company in spite of the difficulties created by the credit crunch and consumer caution. He has just brought on board 600 new graduates for the all important design and development side of the business and a new set of apprentices to support the manufacturing side. “I suppose it’s quite a brave call at the moment to continue hiring graduates and apprentices, but it is hugely important that we continue to invest over this period to ensure a strong long-term future.”

It appears that brave decisions and forward vision are not in short supply.

Have your say at www.themanufacturer.com

17

Swimming

against the tide As Britain moves towards recession, the usual doomsayers are writing off manufacturing’s underlying vitality and resilience, says Colin Chinery. Another instance of never letting industrial facts stand in the way of metropolitan presumptions

Hemlines,

runs a pleasing theory, rise and fall according to the optimism or pessimism borne of the prevailing economy. High in the 1920s and ’60s, low in the 1930s and ‘40s.

So if fashion follows precedent, look for hemlines to plunge. How far? Chancellor Darling says the downturn will last longer and prove deeper than once feared, and former Bank of England policy maker Professor Charles Goodhart cannot see light until 2010. This looks like ankle length. The EEF and Chartered Institute of Purchasing and Supply, however, estimate better news for manufacturing beginning sometime next year. Mid-calf maybe?

Last month, the pound hit a record low against the euro and a two year low against the dollar, while Opec trimmed output, throttling hopes of further respite from higher energy costs.

Where does British manufacturing figure in this? “Falling off a cliff edge,” says financial commentator, Michael Baxter, elbowed and shoved by a corrosive mix of falling demand and record cost inflation.

Baxter is right about the conditions. A major survey by EEF and Grant Thornton showed that despite posting a 12th consecutive quarter of growth, manufacturers are feeling the chill from a slowing economy. Even with output holding up over the last few months, the report shows a stagnant UK economy and sharply deteriorating eurozone are now impacting on all sectors of manufacturing.

18

For 45 months the CIPS Purchasing Managers Index was 50 or slightly higher, suggesting the sector expanded in the month. But in May it broke the critical 50 marker, dipping to 49.8, then to 45.8 in June and 44.3 in July. Last month’s figure rose a point to 45.9 – better than expected but strengthening predictions that Britain is about to enter its first recession since the early ‘90s.

CIPS director of professional practice Roy Ayliffe is cautious, but says if next month’s figures carry on in the same vein as those for August, “it will show a bottoming out.”

‘Over the cliff edge’ talk is “overly emotive language. I don’t think it is as bad as that.” Technically, recession is two successive quarters of negative growth, and while manufacturing is “getting close, the worst scenario for the UK,” says Ayliffe – “excluding factors such as potential wars with Russia – is a shallow, short recession.” How short? “Less than a year.”

This is in line with the EEF’s forecasts, says its head of economic policy Lee Hopley. “We hope this downturn will be short-lived, and are expecting manufacturing growth to pick up from the middle of next year.”

The reality is that manufacturers strategically well-positioned are continuing to do well while the less well-positioned are doing disproportionately poorly, says Nick Brayshaw, industrialist, banker, and former chairman of the CBI Manufacturing Council.

“The kind of difficult market conditions we are in at the moment accentuate the gap between the winners and the losers.”

Leadstory

Indo Mukerjee, CEO of micro-technology global leader C-Mac, says that macroscopically, he doesn’t have a clear view, other than that things are obviously getting quite tough. “Microscopically, in terms of running the C-Mac, we are operating in a particular field, and have worked very hard over the last few years to focus on fields such as aerospace and defence in particular – and two other specialist areas – and we see a very solid outlook for our business.

quarter one of 2010 before we see some results that show positivity, i.e. coming out of the recession.”

“The UK is quite an amalgam of different beasts and we are very much an added value manufacturer, one that focuses on particular niches. I’m far from blasé, but our outlook is rather solid for the forthcoming year.”

“I think it will be at least the end of 2009 and the beginning of 2010 before we can say we have emerged from downturn”

Brayshaw believes recovery will be a longer haul. “I think it will be at least the end of 2009 and the beginning of 2010 before we can say we have emerged from the downturn.”

Mike Deacon, managing director of Asset Based Finance and Leasing, agrees. “The financial sector has still not fully got to grips with the size of its pain and they are still writing debt off like there’s no tomorrow.

“I know for a fact that a number of banks’ intensive care units are giving work to the accountants but not actually appointing administrators or liquidators as readily as they would like because they don’t want to incur even more bad debts. They are in a very precarious position.” He sees something similar to the last recession – “six quarters in a row of negative numbers. This means we will be in

While the pound’s weakness against the dollar and euro would normally provide a significant boost to exporters, this is now countered by a slowdown in the US and perhaps more significantly, the Eurozone.

Manufacturers’ confidence has certainly ebbed away, says Hopley. “On one hand they are facing massive cost increases, and they are not always able to pass these on to customers; on the other hand, weakening demand, particularly in the UK as well as more difficult conditions in some key export markets, particularly Europe and North America.”

Yet despite this, manufacturing is going into this downturn far better positioned than at the previous downturn at the turn of the decade. “And this is down to the strategies manufacturers put in place to climb up the value chain and become more productive and competitive. We have to ensure that those activities continue.”

19

Leadstory Lead story

“We are a hundred times better placed than we would have been 10 years ago and probably a thousand times better than 20 years ago,” says Mukerjee. “The ‘get on with it’ factor is very good in the UK; we are very much part of the global scene where many of our industries are at a pivotal point.”

Confidence among manufacturers may have slipped, but Nick Brayshaw is finding a difference between their collective and individual view. “The collective view is that we are in a recession, that times are difficult, the global challenges and so forth, and they will all discuss those concepts. But when you say ‘how’s your business doing?’ they say ‘oh, actually pretty well.’ This can’t be a sufficiently scientific survey but I’ve heard it enough times for me to believe that individually up and down the country there are actually many manufacturing businesses performing quite well, in particular those with strong brands and strong technology.”

Indo Mukerjee cites his own firm as an example. “We’ve just transformed ourselves to a premium offer brand providing a very particular service to a market area which we think is nicely matched to our offer and vice versa.

“A lot of companies in the UK have been doing that along the way. The ones that have failed are those that try to be everything to everybody, going for the lowest common denominator. And the cost base can’t handle that. UK manufacturing is all about not only strength and quality of operation but also very much in the way of marketing and brand positioning.

“Focus like hell on those markets where you can make a difference, work out what it takes to be really successful, make sure you don’t forget any competitor around the world, be very vigilant, very focused on our brand promise and execute on that.

“And should you see that something has changed in that market, make sure you don’t keep hitting your head against a brick wall. And ideally you are changing before your market does.”

The EEF meantime is urging the Government to address the rising risks of further economic weakness, bringing forward policies that buttress business from gathering economic headwinds, minimising job cuts and investment in preparation for eventual upturn.

Mike Deacon is sceptical. “You won’t find that with a centralisation government. The amount of bureaucracy they’ve brought in areas like the tax system, personal and corporate, is unbelievable. They’ve made a simple system complicated and messed it up. And what they are doing now is putting sticking plaster over holes such as non doms, taxation on foreign earnings. See the flight of companies to Ireland because they get taxed at 12.5 per cent on their foreign earnings rather than 28 per cent. It’s a no brainer.”

“It’s difficult to see what the Government can do in a positive way,” adds Brayshaw. “The strongest plea is to do nothing in a negative way.”

Advice to manufacturers? Number one, says Deacon, “Stay as close to your clients as possible, number two, look at your supply, number three, cut and defer costs where you can, fourth, conserve cash. If you’ve got cash, if you can find someone who will lend you money, borrow.

Conserve the cash you generate from trading – it’s the most important thing you can do right now.”

“Manufacturers have faced all of these challenges and more and they know how to manage them. It’s not to say it will be easy, but these are experienced hands at the tiller” “Don’t panic,” cautions Roy Ayliffe. “Do the things you know you do well, which includes the procurement side of things. It will all come right and it won’t be too long nor too deep.”

For Nick Brayshaw, “most manufacturers know how to manage all of the various pressures placed upon them, whether currency exchange fluctuations, oil prices rising or a slowdown in demand.

“Manufacturers have faced all of these challenges and more and they know how to manage them. It’s not to say it will be easy, but these are experienced hands at the tiller.”

Have your say at www.themanufacturer.com

21

Support for

manufacturing Gay Sutton reports on the Government’s Manufacturing Strategy Review and asks: what does it offer for the future of the sector?

Following many

months of consultation and study, the Government has finally published its long awaited Manufacturing Strategy Review. Building on the review of 2002, the document sets out Government’s vision for the future of manufacturing in the UK: the challenges it faces, how the global marketplace is evolving and the opportunities that are there to be exploited. And finally it proposes a clear and extensive strategy for supporting manufacturing.

One of the first things to leap out from the publication is that there seems to be a genuine understanding and acknowledgement of the excellence of UK manufacturing, its value to the UK economy and its critical importance to the future prosperity of the nation.

The review identifies five key areas where it believes government action and support can significantly improve manufacturing’s performance and competitiveness and open up new markets. The document then delivers an action plan that includes proposed investment levels, a clear timeline for delivery and, perhaps most importantly, it designates responsibility for delivery to named organisations.

This is perhaps one of the biggest lessons that seems to have been learned from the original 2002 strategy which, while creating some excellent initiatives, such as the Manufacturing Advisory Service (MAS), and the National Skills Academy for Manufacturing, has singularly failed to deliver in other areas.

Baroness Shriti Vadera, minister for business and competitiveness at BERR, who headed up the review along with Delyth Morgan from the Department for Innovation, Universities and Schools (DIUS), assured me that the

22

Government was wholeheartedly committed to the review.

“We will drive each area of the strategy forward by a rigorous implementation process that we are establishing with key partners, including Regional Development Agencies,” she promised. “This strategy is a high priority for both BERR and DIUS.” That is reassuring, but governments do come and go, and ministers have an unfortunate habit of following each other in a continuous cycle of change and renewal. The sector needs to be assured that this is a long-term commitment that transcends politics and personalities. “The 2008 strategy is not a party political policy,” she insisted. “The strategy has been developed with the help of industry and is putting in place measures for the long-term future of the manufacturing sector.

“In many areas, manufacturers can expect to see enhanced support in place quickly,” she continued. “For example, to help more companies take advantage of value chain opportunities in India and China, we will be recruiting specialist advisers to be deployed by the end of this year.

And, as part of its ongoing support for manufacturing, the Technology Strategy Board will issue in early 2009 a new £24 million call for high value manufacturing R&D projects, with an expectation that successful projects will be underway within around six months.

“Some policy measures will necessarily have a longer delivery time but we are committed to ensuring that each policy will be driven forward without delay.”

With these promises on the table, let’s have a look at some of the key points that come out of the review, how much is going to be spent, and who will be delivering and when.

Specialfeature Manufacturing Strategy Review

At a glance...

Global value chains

Perceiving that it is vital for manufacturers of all sizes to become part of the global value chain, the review proposes that: – India and China: UK Trade & Investment (UKTI) will put together a new package of support for 600 companies of all sizes to identify opportunities in India and China. It will recruit new industry experts to assist in this, and will promote UK manufacturing through a range of marketing campaigns. This is to be in place by the second quarter of 2009.

– Intellectual property: A new publication from the IP Office provides guidance on protecting and exploiting intellectual property in key emerging markets. Available now.

– Clusters: BERR and UKTI will develop a new ‘Cluster Mark’ award to support and encourage clusters and raise the profile of cluster members.

Technology exploitation

Utilising the latest technology across all areas of the business can create that all important competitive advantage, while companies that develop new technology will ride the crest of the wave rather than spend their lives catching up. The proposals are: – Coventry Manufacturing Technology Centre. Government will invest £30 million through Advantage West Midlands and EMDA to deliver this new facility by 2010. Over 10 years the centre is expected to see £130 million business-led applied research and its exploitation. Government is also keen to receive proposals for widening the scope of the network of Technology Centres.

– Collaborative R&D: The Technology Strategy Board will be investing a further £24 million into collaborative businessto-business and business-to-academia research projects focused on products, production processes, services and value systems. It will also streamline the process by which it assesses applications for funding into new projects.

– Innovation vouchers: Over the English regions, the Regional Development Agencies (RDAs) will provide 500 SMEs with an innovation voucher to work with a knowledgebase institution of their choice – an overall investment of £3 million to be delivered by 2011. Government’s aspiration is that, if proven effective, the number of vouchers may be doubled to 1,000.

Intangibles

Acknowledging that investment into other intangible areas such as software, design and branding have a considerable impact on competitiveness, the review promises: – Design makes a difference: The Design Council and the RDAs will strengthen the uptake of the Designing Demand programme, and will improve its linkage to other business support programmes such as the MAS. The programme helps companies exploit good design to boost performance and increase their market share. DIUS is to oversee this initiative.

– Design skills: Support will be provided for the UK Design Skills Alliance, a new organisation to deliver the skills needed by the industry, to drive professional development and provide a link between practicing designers and academia.

People and skills

A skilled and motivated workforce is essential to competitiveness.

Companies are investing but there is, and will continue to be, a huge gap in skills unless strong action is taken. The review pledges the following: – Access to training: From April 2009, Business Link with be the single port of call for all business support. In addition, no matter which national, regional and local skills organisation you go to, you should be able to receive a single seamless service for addressing skills needs. DUIS, BERR, the UK Commission for Employment and Skills (UKCES) and the RDAs have been tasked to ensure the delivery of this.

– Simplification of the system: UKCES is developing proposals to simplify the skills system, reporting to government in autumn 2008. The manufacturing sector is to be a first pilot for relevant proposals; including building Train to Gain as a more integrated service that offers a range of options for employers.

– Apprenticeships: 1,500 new high apprenticeship places will be created. To accelerate output from this, bids will be invited from larger manufacturers to train more apprentices than they need, including for their supply chains. Note: this is in addition to the 9,000 new apprentice enrolments promised for manufacturers recently by the Sector Skills Councils. DUIS and LSC to deliver this.

– Image of manufacturing: The new body, Manufacturing Insight, will be created, tasked with improving the public perception of manufacturing, informing the media and making young people are aware of the career opportunities. BERR and DUIS to oversee.

– Engaging schools: To promote manufacturing to young people, BERR, DIUS and DCSF will be launching the ‘Manufacturing the Future’ campaign. It will use the Science and Engineering Ambassadors and work with Manufacturing Insight.

Low carbon

With many business opportunities ahead for low carbon technologies, the strategy proposes: – Exploiting the low carbon revolution: A new low carbon industrial strategy to be published in 2009, bringing together all government activity to help manufacturers adapt to the low carbon economy and identify and respond to growing market opportunities. BERR to deliver.

– Nuclear power capability: Aimed at ensuring UK manufacturing can participate in global nuclear power building, a newly created Office of Nuclear Development will provide clear information on the needs of the UK programme, help develop capability where gaps are identified, identify and address skills and technology needs, and work with UKTI to develop export strategies. BERR is to oversee.

– Renewable energy: The Office for Renewable Energy Deployment (ORED) will be established, which among other duties will raise the global profile of manufacturers in the supply chain. Alongside MAS and UKTI, it will advise manufacturers on how to effectively exploit the growing renewable market.

BERR to deliver.

– Cars: Already supporting a pilot programme for electric cars, government promised to develop a programme for low carbon and fuel cell technologies.

Have your say at www.themanufacturer.com

23

The

‘ultimate

change programme’

Merger and acquisition – M&A – is the ‘ultimate change programme’. It is often high profile, always disruptive, and carries a large degree of risk.

You need to manage the risk, and to do that, you have to approach the whole process in a practical and people-centred way, explains David Axon, head of private equity and M&A at Celerant Consulting

Merger and acquisition – understanding the workstream

With a focus on understanding the ways people and organisations really work, M&A can be a step to major increases in shareholder value and customer satisfaction. It has been said that the hard work begins after the deal has been signed. In reality, the M&A process should be looked at in terms of (equally important) ‘upstream’ and ‘downstream’ components.

Upstream activity includes all pre-negotiations and due diligence. Downstream activity is the action required to make the deal work in practice.

Why are you doing it?

Upstream, it is vital to have a robust understanding of why the M&A is being considered. Are you acquiring a new or extended customer base? Are you reducing costs over time? Are you gaining access to innovation, or to fresh or previously closed markets? The answers should directly influence the way you carry out all your upstream M&A activity, from clarifying your strategy to selecting entities for acquisition.

24

Leadership & strategy

Understand what’s behind the numbers

Analysis of the key components of the M&A – typically two currently separate businesses – needs to include more than historical financial performance. Of course the numbers matter. But, on their own, they will not give real insight into how they are achieved on the shopfloor.

Some of the answers will be provided by thorough groundwork. It is important to know the degree of alignment – or otherwise – between the key physical elements of the businesses. These include IT systems, supply chain and environmental practice.

But our experience is that, ultimately, the process of integrating two businesses will either be enabled or (severely) impeded by ‘cultural fit’. What is this and what does it mean?

‘Culture’ means what?

The culture of an organisation is a combination of working environment, working practices, levels of manager commitment and staff buy-in to common goals. There are techniques available to assess all these key attributes. This should be done before the acquisition. That way, cultural strengths and weaknesses are known and understood along with all the other key areas of the operation, and there are fewer surprises.

The upstream, pre-deal analysis should be as comprehensive as possible. It must fully test the operational (including cultural) assumption that the businesses are capable of working together to create increased value.

Clearly identify the risks and vulnerabilities in the business plan. This includes the issue of whether two geographically, and perhaps culturally, separate groups of people will interact successfully post-M&A. Start to determine a robust integration plan. Factor in the potential for increased value (including cost avoidance, cost reduction, and business performance improvement).

Acquisitions: try before you buy

Knowing precisely how you intend to make things better before you buy is crucial to maximising the value to you of any intended acquisition. In short, understand clearly what needs to go, what needs to stay, what is missing and what needs to change – including culture.

Roles and responsibilities, and the decision-making framework, have to be clearly articulated and strongly communicated.

Dispel confusion with total clarity. The M&A process is a unique chance to ‘get it right’ with the work culture, so don’t create or substitute a regime of complication and confusion.

Successful integration starts with good information

Good levels of management information, leading to visibility and control of business performance, are vital. At the time the M&A goes live, critical business controls must be in place to ensure that you understand, and then effectively manage, all key business risks.

To avoid unnecessary disruption, use existing business performance metrics where possible. But, whether existing or newly developed, you must have accurate and appropriate key performance indicators (KPIs). These should relate specifically to revenue, cost, productivity, process, employees, customers and markets.

25

Leadership & strategy

Don’t assume success: measure it

Have the KPIs in place, yielding accurate and timely information. Act on this quickly. Assume nothing. Ensure you know whether the M&A integration is succeeding immediately. Or, if not, be ready with practical steps to help it succeed. In summary, you need to: know what you need to measure; know how to measure it; know how to interpret the measurements; and know how to turn your understanding and insight into fast corrective actions.

Three routes to making the most of people

Throughout, keep people front of mind. If you want new and better levels of performance from people in the post-M&A environment, you have to do a minimum of three things.

First, you have to ask for better performance. Do this explicitly, and in ways that people understand. Don’t work in a climate of vague expectations; make both the demands and the opportunities very clear. Second, you have to make it possible for people to deliver: obstacles such as defective process have to be identified, understood and removed. Third, you have to understand and acknowledge individuals’ points of view and their ‘emotional journey’.

An M&A, as ‘the ultimate change programme’, often poses the ultimate threat to job security, peace of mind, morale and commitment. The unease can usually be dispelled simply by communicating with people regularly and honestly. And if there is bad news, such as a headcount reduction, think about its likely impact early. Be ready to handle it before you make any announcements.

By taking the approaches described here in the upstream phase, you should arrive downstream of the deal being signed in good shape.

You should be ready to make the most of the human capital and the collective experience that the newly-integrated businesses represent. The challenge now is to make the pieces fit together and yield higher value than was possible pre-M&A.

Making integration work: an operational challenge

The challenge is, above all, operational. Especially in manufacturing, where there are typically more people and more processes to be integrated than you would find, say, in the worlds of software development or advertising.

The key is to set the tone of the integration from the very start. When, for example, one chemical company created a billion dollar plus single product manufacturing capability through acquisition, it worked well in advance of operational go-live to ensure it hit the ground running.

Preparation delivers results

More than a dozen integration teams were established, composed of carefully chosen employees from both the previously separate companies. They began looking at how to achieve cultural fit and practical integration a full month before the deal was finally signed. This intensive groundwork transformed the upstream paper benefits of the M&A into a series of measurable gains. These occurred in key areas, from combined sales force effectiveness to rental on premises.

Integration through best practice

Make sure that excellence has a specific focus and that everyone has access to practical examples of how you want the integration to work. Another international manufacturer created ‘centres of best practice’ across multiple sites. These sites had previously been operated by no fewer than five separate acquisitions. The centres provided a catalyst for rapid spreading of best practice by example and by word of mouth. A 50 per cent decrease in materials consumption and a 20 per cent increase in productivity were the benefits from this particular M&A. These are the very same operational impacts that strategists dream of!

Retain focus on customers

The risk with any M&A is that management focus – from C-level to the supervisors on the shopfloor – becomes progressively more inward-looking. Successful integration never loses sight of the fact that the real goal is not internal, it is external: greater productivity and profit through more effective focus on the needs of the customer.

Intensive work within a diverse European operation delivered a re-focus on the customer’s voice.

By identifying common ‘critical to customer’ processes across five previously separate operating companies, and then standardising them, not only was operational efficiency increased by some 20 per cent, but customers also reported an improved experience throughout the client’s operations.

“It may seem blindingly obvious, but the real prerequisite for any successful M&A is detailed understanding of how the daily work gets done” In the examples cited above, the M&A context was acquisition of one existing operation by another. But all the gains are equally applicable to situations where private equity is looking to maximise the value of an acquisition.

Private equity: renewed focus on value creation

There is now a real focus within the private equity community on how manufacturers create value (as well as by how much).

Their previous, and perhaps somewhat abstract, approach ended abruptly with the credit crunch. The realisation now is that even the most complex multi-billion dollar deals must have strong roots in enhanced revenue, margin and growth.

It may seem blindingly obvious, but the real prerequisite for any successful M&A is detailed understanding of how the daily work gets done. What’s good right now? What could be improved? Where exactly will the acquisition help to make a positive difference, and how?

Operational reality holds the key to M&A success

Ultimately, the real goal is practical answers to the question ‘how do we make these operations fit together?’

The answers, as manufacturers and the private equity community alike are discovering, come not from the architecture of the deal on paper. Rather, they are to be found in operational reality.

Have your say at www.themanufacturer.com

27

The Clyde Pumps

journey continues This is the second article in a series that charts the transformation of Clyde Pumps, recounting how the company regained its position as a global leader in the design and manufacture of pumping solutions under the leadership of the highly successful Clyde Blowers organisation

The first

28

article identified the challenges facing the management of Clyde Pumps, which ranged from a lack of investment in infrastructure to low morale and an inflexible, bureaucratic organisation. The initial steps entailed the creation of an ambitious vision for the future, plus restructuring to prepare the company for industry leadership and growth.

flatter, more agile and process orientated organisation in place, with emphasis on cross-functional capability. A positive, ‘can-do’ culture was promoted, together with greater investment in training and personal development. The next step was to arm the workforce with the systems they needed.

With guidance from Jim McColl, the innovative Scottish entrepreneur and owner of Clyde Blowers, the management of Clyde Pumps put a new,

Having established an effective organisation and defined a clear business strategy, the company’s management knew they needed a

Finding the right ERP solution

world class ERP system to execute their vision. This article examines the rigorous selection and evaluation process they enacted to ensure that the right technology and solution provider was chosen for this critical function.

A high-powered programme team sponsored by the managing director of the service and spares division was put together to drive the process.

The team started by putting an aggressive five-month plan in place for the exercise, which comprised the following three main stages:

Case study This stage was complete in a month and resulted in a shortlist of four credible candidates, who were then presented with high-level requirements in the form of a comprehensive 20 page ITT, supported by over 100 pages of detailed functional and technical specifications. These vendors were given four weeks to prepare their responses, plus the opportunity to meet with Clyde Pumps staff to gather additional information, before being asked to present their solutions.

A rigorous evaluation of the functional, technical and commercial aspects of the proposed solutions, which involved scoring against weighted criteria, was carried out. Two clear leaders emerged from this process, both of which had put forward solutions based on SAP, the ERP software that best addressed the broad and varied scope of Clyde Pumps’ intended activities.

For the third and last stage of the selection process, the two finalists were asked to prepare a more detailed proposal, covering the project’s phasing, roles and responsibilities, risks and commercial considerations. They were also required to deliver a series of weekly workshops, which involved product demonstrations and face-to-face reviews of all aspects of their solution, from technical specifications to project management methodology.

Stage one – identification of possible solutions and partners plus initial evaluation of proposed solutions n Stage two – invitation to tender (ITT) and high-level functional and commercial evaluation n Stage three – detailed functional, technical and commercial evaluation and partner selection n

The first stage consisted of an interactive evaluation of 11 potential partners, all of which were known to provide solutions based on world class ERP software. The key attributes measured were the depth of their experience in complex engineering, the quality of their responses and the availability of solid references. Also evaluated were their support capabilities in the UK and globally, especially in China, to align with the company’s overseas growth strategy.

A key element of the evaluation was a visit to a reference site identified by the candidates, to see their solutions in operation and obtain valuable third party input. Again, the proven technique of measurement using weighted criteria was employed, which provided objective assessment of both the completeness of the proposed solutions with respect to the requirements, and the performance of the vendors themselves.

Key success factors

The success of the selection process was largely due to the formal, structured approach taken, with detailed plans being developed for each stage of the process. Execution was carried out in a disciplined manner, which required that each stage be completed and documented before starting the next.

But perhaps the greatest contribution to eliminating risk from the decision making process came from the availability of a comprehensive and detailed specification of the target ERP solution. This was because the company’s vision for the future features a broad range of activities, from design to manufacturing and supply of complex pumping solutions involving internal and external suppliers, and is extremely demanding in ERP terms.

The Clyde Pumps management had previously carried out a thorough analysis of their ERP requirements, fully documenting the results.

This comprehensive specification provided a sound basis for measuring the proposed solutions with a high degree of accuracy. The objective scoring against this specification clearly demonstrated that SAP was the only ERP system that fully met all their requirements.

Clyde Pumps chose itelligence as their SAP partner. itelligence is one of SAP’s largest global full-service partners working with mid-market customers.

It is an organisation that specialises in providing SAP Business All-in-One solutions, which are pre-configured, templated versions of SAP, developed for the needs of specific industries.

Using this approach, itelligence is able to implement SAP both rapidly and itelligence and their SAP solution cost-effectively. emerged as the outright winner of the gruelling selection process. The experts The article is based on a white at itelligence demonstrated proven skill paper written by researchers at the in implementing complex manufacturing Strathclyde Institute of Operations systems and SAP had credible solutions Management, University of for all the processes envisaged. Most Strathclyde, Glasgow, UK. importantly, the management at Clyde The original paper can be Pumps had complete confidence in their downloaded from our landing page choice because of the thorough, highly www.itelligencewhitepapers.com structured and verifiable methods used in the evaluation.

“We are now moving to being a truly global company, so it’s important that we have a single point of information and understanding around the world.

SAP is uniquely able to help provide that vital resource,” said Allan Dowie, finance director of Clyde Pumps.

Published in association with: itelligence Business Solutions (UK) Ltd Tel: 0203 1623712 www: www.itelligencegroup.co.uk

29 29

right solutions...

Finding the

Andy Millar, engineering design manager of Bombardier Rail Control Solutions, describes how working in collaboration with a higher education institution through a Knowledge Transfer Partnership enabled his company to develop a product that is both innovative and marketable

Rising material

costs and other growing sector pressures mean that we, as manufacturers, need to be developing products that have maximum market impact – while at the same time being cost effective.

Bombardier Rail Control Solutions is a world leader in the rail equipment manufacturing and servicing industry. It is a division of Bombardier Transportation – a company with operations in more than 35 countries.

With such an extensive global reach, the pressure on the Plymouth site to innovate and succeed in the market increases year-on-year. It must always find new ways of developing low cost innovative products that will ensure industry progression and the fulfilment of company expectations.

In order to move ahead of the competition, the next step in product design was all about taking the market lead by developing a completely new solution to a growing problem in the sector.

30

The technological obstacle

The Plymouth site has been developing and maintaining railway signalling products for over 30 years. However, it was entering a new era in which modern trains were being developed with varying and increasingly complex designs.

This posed a challenge to the company and to its competitors as it had to ensure that the train detection technology it offered was able to accommodate these new trains.

Train designs are continuously developing with newer high powered electrical trains containing ever more complex control systems making it extremely difficult to prove that detection systems will always work effectively. It was therefore essential that a new piece of technology was developed to ensure that any type of train travelling on a track at any one time was safely and reliably detected by the train detection system situated along the train tracks.

Furthermore, recent regulatory requirements, such as the draft European Interoperability Standard, has put increasingly stringent technical requirements on train

Design & innovation

The collaborative partnership

In 2005 the EEF made a general visit to the Plymouth site.

The visit was to promote companies running in the style of SMEs. Understanding the site’s intentions, the EEF representative introduced the firm to the Knowledge Transfer Partnerships (KTP) – a government funded programme intent on promoting innovation within the UK economy.

The KTP project is a three-way partnership between a company, which has a specific and strategic project; a knowledge base (academic or research institution) that has skills relevant to the project; and a high calibre associate (recently qualified person) who works in the company on the project, while being supported by the knowledge base.

After outlining the possible benefits of the KTP programme, the EEF put the Plymouth site in touch with a representative from Plymouth University.

The company knew that this would require a completely new approach grounded in mathematics as opposed to traditional engineering processes Having never come across the KTP programme before, the company instantly realised that it could play a key role in its new product development strategy. After thorough investigation and several meetings with KTP advisors and representatives from Plymouth University, the project was begun in 2006.

The KTP partnered Bombardier Rail Control Solutions with the satellite communications team at Plymouth University and a graduate engineering associate, Jing Cai. Under the project, Cai became a full time member of the Bombardier team and set out to help find a new solution for detecting trains on the track.

detection systems, meaning the process for demonstrating safety has risen considerably, which in turn has raised the level of safety engineering required. Therefore Bombardier Rail Control Solutions wanted to develop a product that helped its customers demonstrate safety in the simplest and most cost effective manner.

There was continuous three-way interaction between Cai, Bombardier’s engineers and the team of academics at Plymouth University. Cai was supported by two academic supervisors who helped with the research process and there was also a dedicated programme manager based at the University who helped to ensure that the process kept moving in the right direction.

The aim was to develop the next generation of train detection systems. The system would need to recognise only one type of unique transmission code – that of the transmission on the track detection system – and one that was completely unaffected by external factors, such as the electrical noise of the train, or signals ‘leaking through’ from other parts of the train detection system.

Prior to this, the site had been trying to find a suitable way of working with local universities for a number of years, but needed to effectively balance the needs of both parties. As a company, Bombardier has tight timeframes within which to complete projects in order to keep pace in the business world. In contrast, it found that universities prioritise the research methods and don’t necessarily adhere to those strict timelines. Finally, it had found a way of working with a higher education institution that enabled all parties to collaborate in an effective and time sensitive way.

Finding a completely new solution for determining the location of any type of train on a railway track was crucial to continued commercial viability. However, the company knew that this would require a completely new approach grounded in mathematics as opposed to traditional engineering processes.

As project manager, I oversaw the project from day one.

I managed the development of Cai and the Bombardier engineering team who were working closely alongside each other. The interchange of knowledge and information between Cai and the engineering team proved incredibly successful in bringing this product to its fruition. We helped

31

ShD SW.tint half

25/7/08

11:33 am

Page 1

Go

r fo ck T .biz er ra E ws st t K ho gi ast C als Re ur f TIegion yo EE.shdr R w F to ww

ShD

est SouStHhOW W Storage � Handling � Distribution

Promoting excellence in Logistics and Materials Handling 12 November 2008 Westpoint Centre • Exeter

REGISTER NOW for your region’s only dedicated Materials Handling and Logistics Show ShD South West will help you: � Maximise supply chain efficiencies � Reduce costs � Find innovative new ideas

Register at: www.shdregionalshows.biz Organised by

32

Official Media Sponsors

ShD

Design & innovation

It emerged that the technical solution that we desired was actually more complex than previously envisaged. In a way, this whetted the appetites of the University research team to develop Cai’s technical approach to ensure that the theory could stand up in the real world. At the same time, we significantly developed our understanding of the latest techniques being led by the University’s research team.

The design process

Before Cai could undertake the more detailed design work, we had a number of meetings to establish the best way forward. After a few months of deliberation and initial research into different train detection systems, it emerged that the technical solution that we desired was actually more complex than previously envisaged. In a way, this whetted the appetites of the University research team as they saw that there was real potential to develop a product that was innovative and unique, and that could have real world implications.

We set out on the design process with Cai, who generally worked for four days a week in the Plymouth offices and one day a week at the University’s research department.

During her day at the University, Cai would report back on any findings and describe any obstacles. The research team could then look into any issues and help to find ways of solving them.

Historically, train detection systems worked by an electrical signal being short circuited when a train travels over the tracks, and if no signal is detected by the receiver this determines that a train is on the tracks. When a signal is received, this signifies that there is no train on the track.

able to mathematically prove the system’s reliability in a way that traditional engineering-led testing could not.

As a result, the technology that was developed was the first of its kind and as such is being patented – the first product in over 19 years for the Plymouth site. In June this year, Bombardier successfully trialled the product at a Network Rail demonstration, proving that it was indeed an innovative breakthrough.

Following its launch in March, the company has received keen interest from existing customers who have been waiting for such a solution ever since the dawn of new high powered trains. Talks are also underway with the Indian, Korean and Estonian markets about future purchases.

Bombardier Rail Control Solutions Plymouth had made a product that was both innovative in its design and also incredibly marketable.

In June this year, Bombardier successfully trialled the product at a Network Rail demonstration, proving that it was indeed an innovative breakthrough

However, the modern crop of high powered trains makes it very difficult for the detection systems to distinguish between interference from trains passing by from a different track to that of the actual train on the tracks. We needed to unequivocally prove that any electrical signal received by the detection system – irrespective of levels of sensitivity – was from that of the tracks it was detecting.

Conclusion

The breakthrough

When working together all parties were able to bring different tools and techniques to the table. We had a common purpose and all wanted to achieve the same final result.

Our experience proved that design and innovation should be driven by collaboration and I believe that this approach could prove key to UK manufacturing sector growth.

Cai proposed a mathematically-led software simulation approach to our research – enabling her to test out different situations and investigate scenarios that we had previously been unable to delve into. Using satellite communications principles, which can cut through interference, we were

The KTP project provided a platform for the Plymouth site to spread its creative wings and delve into an area of research in which it had no prior understanding. It needed to add value to its business and so needed to maximise its product offering and develop something that was unique and innovative, yet simple and cost effective.

Have your say at www.themanufacturer.com

33

Safety in numbers For 26 years Simon Topman has steered Acme Whistles on a steady course through good economic times and bad, growing the business significantly and establishing a worldwide reputation for quality and innovation. He believes membership of the British Chambers of Commerce (BCC) Network has underpinned at least eight per cent of his turnover and will play a crucial role in navigating uncertain economic times ahead

Today, Acme produces six million whistles in 83 varieties. Exporting them to 119 countries around the world accounts for 85 per cent of its £9 million annual turnover.

“Joining the Birmingham Chamber was one of the first things I did and it turned out one of my better decisions.

It has been a vital source of support, expertise and business contacts from the word go and critical to transforming a firm established in 1870 into a modern, cutting-edge business able to compete in practically every corner of the globe.”

Having survived recession in the 80s and 90s, Simon is well placed to understand the challenges faced by many UK manufacturers today.

He believes prudence, rather than panic, should be the watch word, at least for the remainder of this year. That means keeping a close eye on business performance and remembering that, more than ever, ‘cash is king’: “It is certainly time to batten down the hatches in terms of costs and focus more than ever on preserving cash.”

But Simon’s experience has also taught him that caution alone is not the answer: “Clinging on for dear life is no good. The manufacturers that survive recession are those that innovate, almost as if they are starting again, and that is where Chamber membership can play a vital role.”

Simon is always on the lookout for new ideas, be they process

34

innovations that cut costs or ideas for new products, and new business contacts. He sees both as offering vital protection when the going gets tough and believes Chamber of Commerce events offer rich pickings on both counts: “It’s amazing how often a quick chat at a networking event will sow the seeds of an idea that helps to set us apart from the competition or realise efficiencies in production. I can’t emphasise enough how valuable the opportunity to network and learn from peers can be.”

Perhaps most importantly, Simon believes that manufacturers should not be tempted to narrow their horizons: “There’s never a bad time to explore export opportunities. As long as you get the right help and support

and approach each market with your eyes open, products that may be familiar in home markets can still be new and different overseas.”

Again, this is an area where he found the Accredited Chamber Network an invaluable source of expertise and support: “There is no doubt in my mind that the market intelligence, access to Trade Missions and export certification services, as well as overseas contacts and support available via the Chambers played a vital role in establishing and maintaining the successful export operation we enjoy today. I would advise any manufacturer to explore the opportunities that Chamber membership offers – the benefits are sure to outweigh the costs many times over.”

The ultimate business network The British Chambers of Commerce (BCC) is the national body for an influential network of Accredited Chambers of Commerce across the UK. Every Chamber sits at the heart of its local business community, providing members with the opportunity to network with peers - to share knowledge and form valuable alliances Alongside business networking opportunities, the Chambers provide representation, services, information and guidance, including:

Business services

Relationships with public and private sector partners provide access to everything from new business leads and exclusive insurance, healthcare and fleet solutions to dedicated legal, health & safety and HR helplines, foreign exchange services and cost effective merchant accounts.

International trade

The BCC works with UK Trade & Investment to support export success via proven Export Communications Review and Export Marketing Research Schemes. Trade Missions

and Export Clubs enable international networking and lead generation, while administrative services ranging from export documentation to credit checking and Letters of Credit underpin efficient export operations.

Skills development

The BCC is committed to arming business with the skills required to compete in a global economy. Courses range from leadership and management, communication and customer service to sales and marketing, information technology and international trade.

Get the support you need when it matters most. Find your local Chamber at:

www.britishchambers.org.uk

EXPORTING WITH EASE Simple exporting with your local Chamber Receive completed electronically processed export documentation within minutes.

Save your business time and money by applying for export documents online where they will be checked, stamped and authorised by UK Chambers of Commerce returnedwith: to you Published inand association quickly and effortlessly. ?????????

• Significantly improve your efficiency in exporting Tel: ???????????

Email: ????????????

• Reduce the cost and time spent in obtaining export documents www.???????????

• Improve business sales & competitiveness

For more information contact your local Chamber or visit www.britishchambers.org.uk

35

The Toyota Tonero

– a TPS story The Toyota production system teaches that delivering greater value to the customer is of prime importance in the development of any product. Dave Moore from Toyota Material Handling examines how this affected the development of the new Toyota Tonero

36

The Toyota

production system (TPS) permeates every operation at the Toyota plants, but it is far more than just an efficient manufacturing practice. It stems from the wider philosophy of the ‘Toyota Way’ – a set of guiding beliefs and behaviours that define Toyota’s success.

At the heart of the Toyota Way lies the belief that people and their ability to innovate and meet challenges are the driving force of the business. Couple this with a commitment to the process of kaizen, continuously seeking to improve a process, and it is easy to see how Toyota has developed as a learning organisation, constantly seeking new ways of doing things, and rigorously testing these methods to determine their value before standardising best practice

Worldclass manufacturing

A new flagship product

Launched in late 2007, the Tonero is the flagship of the Toyota forklift range. It came to market at a critical time for the newly merged Toyota Material Handling organisation, renewing the firm’s commitment to maintaining its global number one position in the materials handling market.

Toyota always strives to produce its products close to the customers who will buy them to ensure a close match with the specific needs of the market.

The Toyota plant at Ancenis in France offered the right combination of resource and expertise to successfully deliver the project, while being centrally located to understand and serve the European market.

Toyota set itself a great challenge in the design of the Tonero, to set new standards for forklift design and performance not just in one or two features but across five key areas that European customer research had determined as key. The Tonero represented the evolution of everything Toyota has learnt about forklift design and the requirements of its market.

Genchi genbutsu – go to the source

Toyota doesn’t seek to reinvent the wheel with each new product. Instead it systematically applies the proven principles of TPS, building on the lessons learned from previous trucks.

The first step in delivering the Tonero to the European market was an extensive process of customer research.

Genchi genbutsu teaches the practices of going to the source to establish the facts – in this case hundreds of forklift users across Europe – to determine current priorities and challenges. Getting a clear fact-based picture of the customer’s requirement is essential to building the production process as it is through this assessment that the values of the product can be defined.

Once the value is defined, the production process can be refined to eliminate areas that do not add to the value, in other words muda or waste.

Formula for success: buyer + operator + operating environment

so it becomes the new baseline ready to be improved upon once more.

Developed over time by Toyota founder Sakichi Toyoda and his son Kiichiro Toyoda among others, the familiar TPS tools including flow, jidoka, just in time, genchi genbutsu and the elimination of muda (waste) all stem from this culture of learning and are deployed to support the delivery of products that continue Toyota’s reputation for world beating quality.

The new Toyota Tonero forklift is an excellent example of this tradition, where genchi genbutsu, or going to the source to establish the facts, took the Toyota development team on a journey round Europe to establish exactly what was valued by their customers.

Development research focused on three key areas to gain a total picture of the marketplace: – The buying group – The operator – The operating environment The research identified key areas that fleet managers considered critical to their operators and businesses.

They wanted innovative features to make the truck as safe as possible and comfortable for operators to use even in intensive operations. They were keen to see a truck that was highly durable and would keep downtime to a minimum. Increasingly organisations were also insisting that all stages of the product life cycle had minimal impact on the environment.

But the challenge was clear to the design team: they had to deliver on all these benefits without compromising the productivity of the truck. Customers were still, at the end of the day, looking for an effective tool to do a job.

37

The world is changing fast.

Through innovation, businesses can benefit from new markets and drive economic growth. How can the Technology Strategy Board help? By being a catalyst.

By providing leadership. By connecting partners and investing in new ideas.

Our vision: a world where the UK is an innovation leader and a magnet for innovative businesses.

Find out more at www.innovateuk.org

www.innovateuk.org

World class manufacturing

Considering the operating environment

A forklift truck is a dynamic piece of equipment, travelling over a variety of surfaces, capable of being loaded in many different ways and crucially driven by a human being who can be momentarily distracted or affected by fatigue.

It was only by considering all these operating factors in combination that improvements could be identified.

Businesses around Europe described an increased pressure to make their operations as productive as possible, moving the maximum number of pallets for the lowest cost each shift. Operators were making frequent changes of direction and often moving in limited spaces between racking and in the back of lorries. Toyota identified opportunities to increase productivity for these environments without compromising on safety.

The shape of the instrument panel and overhead guard was examined to give the Tonero class leading visibility in all directions, particularly across the forks, when travelling, with the forks raised and critically when the forks were held at lorry bed height. Once again smart design has improved safety hand-in-hand with productivity, allowing operators who made frequent changes of direction to have an unobstructed view in the direction of travel.

The design team created ergonomic controls with an intuitive automobile style layout to support operators during increasingly intensive shifts. Noise and vibration levels were also reduced to among the lowest in the industry to help reduce fatigue for operators.

The truck itself was equipped with a heavy duty steel chassis to help it withstand tough operating environments.

Electrical components were enclosed for protection from dust and water. This met the needs of fleet buyers for increased durability and low lifetime costs.

Toyota believed that the Tonero would become one of the most productive forklifts available, with a range of powerful engines, developed specially for the materials handling market, generating class leading cycle times, allowing more pallets to be moved per shift, with the resulting reduction in fuel and staffing costs.

Environmental impact

Across Europe, many businesses were indicating an increased awareness of environmental issues and expressing a desire to work with their suppliers to source equipment that was in line with their environmental commitments.

All Toyota Material Handling products are made with careful consideration for resource and energy conservation and ease of recycling and decomposition, taking every aspect of the product’s life cycle into consideration. Implementing ISO 14001 certification in the parts supply chain is an additional step to strengthen and safeguard environmental management throughout the manufacturing process.

Toyota was determined to understand and reduce the environmental impact of the Tonero as far as possible, making this a key objective of the design and production process.

Constituent parts and processes were examined to reduce harmful substances. Improved battery and electronic technology eliminated cadmium, lead and mercury, while a change in the paint process eliminated

hexavalent chromium, all of which are known to have a long-term detrimental effect on the environment.

The Tonero also exceeds the new European Directive 97/68/EC Stage IIIa emissions regulations that will take effect in 2008, with carbon monoxide and particulate emissions dropping to more than 50 per cent below the minimum requirement.

Considering the whole life of the truck, the design of individual parts was examined to make them easier to separate back into their constituent parts ready for easy recycling once the truck reached the end of its working life. Through careful design the Tonero is over 99 per cent recyclable at the end of its life.

Customisation vs standardisation

Standardisation of parts and processes allows Toyota to deliver a high quality truck that offers good value.

However, the customer research carried out highlighted the diversity of the customer base and suggested a need to tailor the truck to better match the specific requirements of each individual organisation.

The design team devised a suite of options allowing customers to select packages of factory fitted options that would improve the performance of the truck in the areas that customers identified as key to their business: safety, productivity, comfort, durability and environmental impact.

The modify to order principle of these value added packages makes it simple and cost effective for customers to tailor their truck in the areas of importance to them, while maintaining a ‘standard’ as a baseline for the continuous improvement of future models.

Hansei or relentless reflection is a key part of this improvement process and allows the continuing process of learning as an organisation Ongoing quality

Toyota did not see the launch of the Tonero as the end point of a process. It represents a stage in a cycle of continuous improvement that will build towards the launch of the next product. Hansei or relentless reflection is a key part of this improvement process and allows the continuing process of learning as an organisation.

Once again product managers headed out to customer sites across Europe, where fleets of Toneros were in operation, to gather essential feedback on the truck performance.

Detailed interviews covered every aspect of the truck’s design and use, from the ease of entering and exiting to the sensitivity of the controls. While feedback was overwhelmingly positive, this process of reflection and formalised gathering of feedback has already created a bank of knowledge to be used in the development of future products right across the Toyota range.

Have your say at www.themanufacturer.com

39

40

Exposing the myths Mike Novels, CEO of Preactor International and leading industry expert on production planning, discusses the 10 most common myths associated with production planning and scheduling

When it comes to talking about myths and reality, the inescapable reality of myths is that they do exist. The Oxford English Dictionary defines ‘myth’ as “a widely held but false belief” with a further helpful definition of the related concept of ‘urban myth’ as “an entertaining story or piece of information of uncertain origin that is circulated as though true”. For those involved in manufacturing, perhaps it would be helpful to add the concept of ‘manufacturing myth’ which could be defined as “a widely held and deeply ingrained belief or opinion that is unswervingly held irrespective of any factual basis.”

We have all encountered such myths and also those who believe them.

Many times in manufacturing such myths, whether consciously or not, can be among the most significant influencing factors on the way a business operates and therefore how successful a business is. IT myths especially abound and the area within manufacturing IT that deals with advanced planning and scheduling (APS) and finite capacity scheduling (FCS) is no exception. What may come as a surprise however is the sheer number of myths that exist in manufacturing companies today concerning this one small but vital area of manufacturing IT.

Having been at the forefront of planning and scheduling technology for over 15 years, and with over 2,300 systems implemented in over 65 countries worldwide, we’ve encountered a number of these myths ourselves. But, rather than fall into the trap of believing and perpetuating a myth about APS myths, the scope and prevalence of APS myths was recently put to the test.

Unique research, undertaken at Preactor’s annual global partner event, held in Chippenham, UK, involved collating responses from possibly one of the largest gatherings of experts specialising in the sales and implementation of APS software.

The aim was to investigate common misconceptions held within the manufacturing community about the suitability of APS as a tool.

Specifically, partners were presented with 10 common myths that we had experienced. They were asked to identify whether they had encountered manufacturers which had cited any of these myths as reasons for not believing that APS could be beneficial to their businesses. Partners were then asked to identify any myths they had subsequently disproved to a manufacturer before successfully going on to help that manufacturer receive the widely acknowledged benefits of APS.

Perhaps the most significant fact to emerge from this unique survey of global APS expertise is that every one of the 10 myths listed in the survey had been experienced by at least one partner. Seven out of the 10 myths had been experienced by over 50 per cent of the partners which confirms the view that manufacturers still need to be further educated about the sheer versatility and power of APS technology to bring genuine business benefits. The fact that eight of 10 myths had been effectively disproved in at least 50 per cent of cases, with manufacturers going on to invest and benefit from APS technology reinforces this.

To find out what these myths are and whether your business is affected by them, please visit www.themanufacturer.com/preactor to download the full whitepaper.

Published in association with: ?????????

PREACTOR INTERNATIONAL Tel: ??????????? +44 1249 650316 Email: ???????????? sales@preactor.com www.??????????? www.preactor.com

41

Long live manufacturing The economy may be challenging, consumer confidence on the wane and the banks in crisis, but at the risk of quoting a true and much abused cliché, ‘when the going gets tough, the tough get going’. And there’s no doubt that manufacturers are a tough bunch

Successful leaders

know the only way to survive and thrive during difficult times is to learn extremely quickly about the pitfalls and opportunities ahead, to improve every aspect of the business in line with the current challenges, and of course to ensure everyone in the business is pulling in the same direction.

Manufacturers with this aim will be gathering together at The Manufacturer LIVE on 16 October to network, share their problems and experiences, and learn from the all important successes and failures of their peers.

So what should you look out for at this year’s top networking and learning event? With seven informationpacked streams to choose from throughout a busy day, there is plenty of choice, and you will find the full programme on the following pages. However, here is just a little taster of what is in store.

Roger Tomlinson, vice president of finance at global aero-engine manufacturer Roll-Royce, will be explaining the changing role of finance in the modern manufacturing organisation, and how the development of IT in reporting has released his finance staff to work more closely on reducing costs.

InterfaceFLOR’s operations director Steve Martin will be giving the real nuts and bolts story of how his company is moving towards a zero carbon footprint by 2020,

Awards sponsors

including implementation of an OEE system, TPM at levels 1-3, and the switch to renewable energy at all its facilities in Europe.

BAE Systems’ engineer, David Ward, will explain the modern tools and processes he has developed to support and maintain the MoD’s in-service military aircraft, some of which are up to 40 years old. He will show that a blend of new and old technology is helping deliver front-line capability.

Meanwhile, e2v’s Tony Hall will be presenting an inspired and unique interactive workshop. Through the medium of theatre, he will demonstrate how managers can develop effective leadership skills and create effective management training programmes.

Finally, lean guru Dan Jones will be rounding off the day with his vision and insight into lean manufacturing, its challenges and truths, and then leading a panel discussion that will be open to the floor.

Location

The Manufacturer LIVE is being brought to the ExCeL Centre in London this year – the very heart of the nation, which is where it belongs. Easily accessible to manufacturers from all corners of the UK, it will be close to the seat of government and the centre of the media world, and ideally placed to begin the process of re-educating the public and improving the image of manufacturing.

The Manufacturer Awards

We have once again received a tremendous response from the manufacturing community. Entries have come in from all sectors of industry and all sizes of company.

The sheer standard of those entries has left our judges scratching their heads and weighing up complex equations in an effort to hone the entries down to the best of the best.

The

Process Excellence Academy

42

After weeks of deliberation, our panel of distinguished judges have pronounced their decision, and we are delighted to announce the shortlist of contenders for The Manufacturer Awards.

Manufacturer LIVE 2008 Event preview

Leadership and Strategy Award: British Bakeries, Chemring Group, Drallim Industries, James Walker & Co, and Willerby Holiday Homes

Design and Innovation Award: Clifton Packaging, Coram Showers, Flowcrete UK, Inspirepac, Liquid Plastics, Sound Leisure, and Willerby Holiday Homes.

World Class Manufacturing Award: Baxi Group, Bison Concrete Products, Chemring Group, Converteam, Paul Fabrications, and Wessex Technology.

Skills and Productivity Award: C-MAC Microtechnology, e2v, Hi-Technology Group, Lloyd Maunder/Two Sisters, Lotus Cars, Mulberry, and Southern Salads.

IT in Manufacturing Award: Pobjoy, Centurion Europe, Contour Premium Aircraft Seating, Ideal Standard, RH Technical Industries, and Texecom.

Manufacturing Operations Award: British Gypsum, Cable Management Products, Contour Premium Aircraft Seating, Howard Hunt Group, and Willerby Holiday Homes.

Sustainable Manufacturing Award:

Keynotes 09:00 – 10:00 Opening Keynote: The state of the UK economy and its impact on manufacturing

Ross Walker – Royal Bank of Scotland, chief economist Stephen Radley – EEF chief economist The keynote will give an overall look at today’s economy – including the general outlook for growth, inflation, employment and interest rates, and will then examine the influence of the economy on the manufacturing sector. The talk will cover the prospects for both the UK and global economy as a whole as well as for manufacturing. The presentation will not only benefit delegates in treasury and planning departments, but anyone in positions that hold financial responsibility.

Bombardier Aerospace, Boss Design, HJ Berry, InterfaceFLOR, Precision Disc Castings, Thales Training & Simulation, and Warren Evans.

Best SME Award: Avon Metals, Barkley Plastics, Hi-Technology Group, Kanban Supplies Ltd, Milltech Precision Engineering, and Pentagon Chemicals.

The Manufacturer of the Year Award All these companies will be gathering together at the ExCeL Centre, London on the evening of 15 October in a true celebration of UK manufacturing. The climax of the evening will come as the winners in each of our eight categories are announced, and from them The Manufacturer of the Year 2008, the winner of winners, is crowned.

We would like to thank the judges for their hard work and commitment to manufacturing. The judges this year were: Martin Temple, director general of the EEF; Hilary Devey, founder and managing director, Pall-Ex; John Guy, UK industrial, KPMG; Jane Lodge, UK manufacturing industry leader, Deloitte; Terry Watts, CEO, Proskills; Adrian Harding, policy advisor, Environment Agency; Michael Glass, senior advisor, PICME; Jason Barclay, improvement engineer, PICME; Richard Anderson, editor, Green Business; and Gay Sutton, industrial journalist.

If you would like to be part of this celebration of manufacturing, you can book your place online at www.themanufacturer.com/awards or by contacting Jane Larcombe on 01603 671318.

16:00 – 17:30 Keynote closing speech and panel discussion: Thought leadership in the operation of a lean business

Dan Jones – The Lean Enterprise Academy Join us to hear from experienced lean experts describing the fundamentals of a truly lean enterprise – from lean process design, what lean management and lean leadership really means, to a very different lean transformation process and the opportunities all this opens up for lean strategy and new customer focused lean business models. Very practical results and examples plus honest reflections on what works and what does not will build into a practical roadmap to help make your lean transformation really effective, sustained and profitable.

43

09:00 – 10:00

The state of the UK economy and its impact on Manufacturing

Ross Walker, Senior Economist, Royal Bank of Scotland Stephen Radley Chief Economist, EEF

Zone

Workshop Subject

Speaker

Keynote Speech

Stream: 10:05 - 10:45 Choose one session from the following seven streams 1. Finance, Costs & Input Prices

Managing your energy costs in a downturn

Jeff Whittingham, British Gas Business

2. Your People

Effective university collaboration for innovation, direction and talent

Tony Salt, Swizzels-Matlow

3. Production Strategies

PEx in a Box - Process excellence deployment

Liam Malone Amtek Group

4. Sustainable Manufacturing

“Mission Zero” - Achieving a zero carbon footprint

Steve Martin, Interface FLOR

5. Additional Stream 1

Supporting modern manufacturing and keeping it competitive

David Frost, British Chamber of Commerce

6. Additional Stream 2

The skills shortage. Why things are going to get worse, and how we can help to make it better

Colin Brown, Institute of Mechanical Engineers (IMechE)

7. Demo Theatre

Available Slot

Unconfirmed Speaker

Stream: 11:30 - 12:10 Choose one session from the following seven streams 1. Finance, Costs & Input Prices

The changing role of finance to support the manufacturing industry

Steve Whittle & Roger Tomlinson, Rolls-Royce

2. Your People

Leadership Part 1: The Director’s Cut - Interactive Workshop

Tony Hall, E2V

3. Production Strategies

Supporting and enhancing complex products throughout their lifecycle

Dave Ward, BAE Systems

4. Sustainable Manufacturing

Producer responsibility: vital information and guidance on the current and future legislation

Richard Barnish, Valpac

5. Additional Stream 1

Succeeding in the global economy: How to really develop Export Sales

Jan Ward, Corrotherm

6. Additional Stream 2

Aligning property and facilities management with your core business – a case study

Chris Allington, Fasset

7. Demo Theatre

SAP - Product Demonstration

Unconfirmed Speaker

Stream: 12:15 - 12:55 Choose one session from the following seven streams

44

1. Finance, Costs & Input Prices

The first 19 1/2 weeks - A story of turnaround

Paul Bell, Kanban Supplies Ltd

2. Your People

Leadership Part 2: The Director’s Cut - Interactive Workshop

Tony Hall, e2V

3. Production Strategies

Transforming Your Business from One of the Herd into a Purple Cow

Chris Ellins, TotalFlow

4. Sustainable Manufacturing

Why UK business are putting energy efficiency at top of cost-cutting

Delvin Lane, The Carbon Trust

5. Additional Stream 1

Offshore Supply? Think Twice

Nigel Rust, MAS SE

6. Additional Stream 2

Available Slot

Unconfirmed Speaker

7. Demo Theatre

Access Supply Chain - Product Demonstration

Unconfirmed Speaker

Manufacturer LIVE 2008 Conference programme

Zone

Workshop Subject

Speaker

Stream: 13:45 - 14:25 Choose one session from the following seven streams 1. Finance, Costs & Input Prices

Understanding the role of finance in the Supply Chain

Guy Dunkerley, KPMG

2. Your People

Talent identification, development and retention: a blueprint scheme for effective apprenticeships

George Kessler CBE, Kessler International

3. Production Strategies

Production site logistics and master plan

Sid Holian, Consilium

4. Sustainable Manufacturing

Energy Management for Manufacturing: efficiencies, savings and reductions

Matt Davis, Senior Energy Consultant, IMServ

5. Additional Stream 1

Technology Strategy board – details TBC

Speaker TBC

6. Additional Stream 2

Rapid Laser Patterning (RLP) Case Study

Mike Mason, Powerlase

7. Demo Theatre

Available Slot

Unconfirmed Speaker

Stream: 14:30 - 15:10 Choose one session from the following seven streams 1. Finance, Costs & Input Prices

Raw Material Prices – an insight into the LME and how manufacturers can minimise input prices and mitigate risk

Christian Schirmeister, RBS Sempra

2. Your People

Manufacturing Skills Alliance

Unconfirmed Speaker

3. Production Strategies

The Design and Development of the Lotus Evora

Tony Shute, Lotus

4. Sustainable Manufacturing

The Factory of the Future

David Ellison, Morgan Professional Services

5. Additional Stream 1

Producer Responsibility – what it means for manufacturers

Adrian Harding, Environment Agency

6. Additional Stream 2

Evolution of the FMCG supply chains

Keivan Zokaei, Lean Enterprise Research Centre - Cardiff Business School

7. Demo Theatre

Available Slot

Unconfirmed Speaker

16:00 - 16:45

The Lean Enterprise Academy

Dan Jones Consultant, The Lean Enterprise Academy

16:45 - 17:30 Panel session

Lean Panel Discussion

Dan Jones, The Lean Enterprise Academy

Keynote Speech

Chris Ellins, TotalFlow Liam Malone, Amtek Group Keivan Zokaei, Lean Enterprise Research Centre Cardiff Business

Bring the team and save more!

Call us on 01603 671330 or visit www.themanufacturer.com/live to register and claim your significant group discounts

45

times

Changing

To keep pace

Can the latest time management systems help to change manufacturers’ attitudes towards flexible working? Christian Berenger from Auto Time Solutions discusses

in today’s fast-changing business environment, companies need to be more flexible than ever before. The ability to change quickly is the key to competitiveness.

Yet despite this, many manufacturers are still failing to recognise how incorporating flexible working patterns, such as flexi-time or annualised hours (where employees work a longer day when the service is busy and work shorter hours when there is less demand) into their corporate strategies can have a profound impact on their business efficiency and overall success.

Offering staff flexible working arrangements has previously been an overlooked business consideration by manufacturers due to the need for continuous production requirements. However, having a productive workforce in place has become increasingly important as companies strive to be more competitive.

46

Skills & productivity

employees such as students (juggling work and their study schedule), parents with young children, contract staff, and older workers wishing to make a gradual move towards retirement.

It is also a good way to improve staff morale and the retention of current employees, especially those with childcare responsibilities and mothers on maternity leave who are often driven out of work from companies where rigid working hours are in place. A flexible approach will enable them to combine high-level work with family commitments and allow employers to forego the enormous cost of replacing senior staff.

Technologies for working anywhere

For those employers still apprehensive over the implementation of a flexible working policy they can at least draw comfort from the fact that the technology is widely available to address any concerns they may have about managing a disparate workforce.

Time management systems (TMS) have advanced considerably over the past decade and are now key management tools for companies that embrace flexible working, however complex a shift pattern may be. They now not only include vital management information on training, appraisals, work schedules, health and safety

“The savings made by utilising new technology can often be channelled into increased commission, higher basic salaries and extra incentives, thereby giving the employee a better working environment� and emergency roll calls, but also work seamlessly with most payroll and HR packages to automate the entire process and relieve HR staff from mundane paperwork – freeing up time for them to concentrate on their core competencies.

Common misconceptions

Part of the reason why companies have been slow to embrace flexible working is that the myth that jobs can only be done through strict shift rotas still exists in many organisations. A workforce that works flexible hours rather than set times brings with it numerous managerial challenges and many feel that it is simply easier to monitor and motivate staff that work traditional patterns.

Realising the benefits

For companies looking for a competitive edge, fostering a flexible approach can prove to be an extremely welcome addition and worthwhile investment.

Permitting employees to work hours that suit them opens up the possibility for organisations to employ high calibre staff from a wider pool of applicants. Having a range of different working arrangements available will make it easier to appeal to different groups of potential

Web-based self-service applications are becoming the preferred choice for organisations seeking increased flexibility. For employees, it gives them more control over their working time, allowing them to view schedules, book holidays and view flexitime balances, while for employers, they provide easy access to the information they need to plan, manage and administer workplace attendance from anywhere in the world.

Mobilise your workforce

New systems do not solely cover office or factory bound workers either. Improved functionality and the emergence of GPRS wireless solutions means they are now extended to those in the field such as sales engineers or supervisors who need to be at numerous locations throughout the day. The real-time processing of GPRS systems allows managers to monitor activity instantaneously, and afterwards get full, customised management reports in a range of formats that show the shifts that have been worked, any overtime accrued, any bonuses earned and any deductions that have been made.

47

Funding available*

Advance your career

Cranfield University is at the forefront of research and teaching in manufacturing. We operate one of the UK’s largest Innovative Manufacturing Research Centres.

Exclusively postgraduate, we offer a range of internationally renowned full and part-time programmes, many accredited by leading institutions, for professionals and highly motivated graduates seeking to advance their career.

Masters programmes include: o

MSc Engineering and Management of Manufacturing Systems

o

MSc IT for Product Engineering

o

MSc Knowledge Management for Innovation

o

MSc Management and Information Systems

o

MSc Manufacturing Consultancy

o

MSc Operations Excellence

o

MSc Ultra Precision Technologies We also offer funding up to £17,900 p.a.* for a range of PhD, EngD and MSc by Research opportunities.

For more information please contact: T: +44 (0) 1234 754086 E: appliedsciences@cranfield.ac.uk W: www.cranfield.ac.uk/sas/tm

Register for our next Open Day at

www.cranfield.ac.uk/openday *Conditions apply. Details on application.

48

Skills & productivity

GPRS systems can even deliver instant alert notifications by SMS if a member is unexpectedly absent, allowing managers to take action immediately and visit the site if required.

Previously, staff monitoring has been a bit of a thorny issue, with many likening it to a ‘big brother’ state, but today clients want to know that they’re receiving the service they are paying for.

Moreover, the savings made by utilising new technology can often be channelled into increased commission, higher basic salaries and extra incentives, thereby giving the employee a better working environment. This, in the long run, will help to improve staff retention and increase efficient, cost effective and streamlined administration processes.

Flexitime drive at Morgan

An excellent example of an integrated time management and payroll system in practice has been at Morgan Motor Company – one of the UK’s most successful car manufacturers. Based in Malvern, Worcestershire, the company employs over 150 workers who work under a flexitime scheme. While they only operate one shift each day, the start and finish times do vary when overtime is worked, and the staff operate under a slightly different flexitime scheme.

The business needed a more robust system to put an end to time consuming paper-based recording systems, and enable a direct link to the payroll software. The result has been a win-win situation with staff enjoying a more balanced lifestyle while also fulfilling the company’s business objectives. The new system allows Morgan to follow its company policies to the letter.

With everyone following the same rules, there is no ambiguity and everyone knows where they stand. The staff can access up-to-the-minute information on their ‘flexi bank balance’, as well as keeping a track of their holidays.

Clock card reports can also be emailed straight to them.

Automatic report generation means that nothing is ever missed and that daily records are accurate at all times, which raises employee confidence that they will be paid the correct amount each month. The new system has also enabled the HR department to download hours worked straight from the clock to the payroll software, which has saved hours of time each week in manual reconciliations and calculations. Holiday planning too is much easier, as managers are able to see at a glance how many people are out of each department at any given time.

Sarah Baldwin, HR manager at Morgan Motor Company, says: “At Morgan we understand that our employees want to enjoy a challenging work role, but also fulfill other commitments in their lives outside of the office.

“We have found that offering flexibility not only helps staff balance their life and work more effectively by allowing them to work hours that suit them, but also provides the company with a motivated, loyal and committed workforce.”

Will it work for you?

Clearly, implementing and managing flexible working arrangements does create challenges for manufacturers.

It is important, therefore, to constantly review the success of flexible arrangements you may consider. An effective work/life balance strategy is not simply about complying with the law, it is about finding out what employees’ needs and priorities are and then considering how they can be met in ways that are consistent with the needs of the business.

Flexible working won’t be something that interests all employees. But for those who are struggling with the competing pressures of work and home life, the opportunity to work flexibly may be a make or break factor in their decision to stay with their company, or move to a competitor.

An annualised hours system may be the most suitable for manufacturers as it provides greater flexibility in accommodating peaks and troughs in demand.

Annualised hours allows shift patterns to fit production and service requirements – cutting down on costly overtime and labour wastage, but giving employees more acceptable working patterns and more usable leisure time. With known labour costs, managers can forecast production costs precisely, knowing that there will be a minimal need for contract/agency staff and no overtime.

Rising to the challenge

Introducing flexible working patterns is now a feasible option. Employees are rising to the challenge and organisations can now use whatever flexible work policies they need in order to maximise their business performance. And in the current economic climate especially, employers need to look beyond salaries and bonuses to keep their workers happy.

Many factors combine to make a truly great company.

However, at the centre of any outstanding organisation, whatever its size, you will find its most valuable and important asset – people.

Can you afford not be flexible?

Christian Berenger is business development director at Auto Time Solutions.

Have your say at www.themanufacturer.com

49

Running the gauntlet Global sourcing may be allowing manufacturers to reduce costs and extend their market reach, but it is also opening them up to significant supply chain risks. Beth Enslow, senior vice president in the Supply Chain Risk Management Practice at Marsh, reports

50

About

three-quarters of companies recently surveyed by Marsh said that their supply chain risk levels have risen since 2005. Participants also reported that their CEOs and CFOs are increasingly concerned about the impact of supply chain disruptions to financial performance and corporate reputation.

Supplier delays, transportation disruptions, product safety recalls, and other shocks to corporate supply chains are making headlines and causing earnings volatility and eroded margins.

The Marsh findings are from a survey of 60 high technology, telecom and media companies in Europe and a survey of 110 North American manufacturing and retailing companies. In Europe, only six per cent of participants said that their risk level had decreased since 2005 (Figure 1).

Logistics & supply chain

when moving manufacturing activities or supply points to China. However, companies frequently report that the actual savings impact is closer to 12 to 14 per cent. This savings erosion is predominantly due to unforeseen supply chain disruptions and volatility. Better visibility to production and shipment activity and enhanced risk management can help recover some of this lost margin opportunity.

Companies exacerbate these tactical risks when they lack resiliency in their supply chain and are rigidly bound to use sole suppliers or single transportation lanes. A hiccup at a supplier or a labour strike at a port can cripple a supply chain if alternative routes and supply are not immediately available.

– Financial risks: On a worldwide basis, the costs of raw materials and commodity ingredients, transportation, energy, and other expenses are rising and becoming more volatile.

Many of the most popular emerging market locations are also battling inflationary issues. In China, for instance, it is not unusual for wages to increase 10 per cent or more a year, and raw material costs to rise seven per cent or more.

Increased (78%) Decreased (6%) Stayed the same (16%) Figure 1 – European Study Results: How Supply Chain Risk Levels Have Changed at Our Company Since 2005 Source: Marsh European Supply Chain Risk Management Poll, May 2008

Global supply chain vulnerabilities

Survey participants reported that they are most troubled by pricing risks, supplier delays and disruptions, as well as customer-facing risks, including managing volatile demand from customers and market expansion risks.

“Our most concerning risk issues,” explained a risk manager from a major consumer products manufacturer, “are labour issues, raw material costs, political and regulatory climates, import/export restrictions, and risks involving shifting production from plant to plant or country to country.”

Supply chain risks can be thought of in three categories: – Tactical risks: These are typically delays and disruptions with internal production, suppliers, or logistics activities. With a global supply chain there are many more points where product reliability can be impacted. The effect of delays and the cost of recovering from delays can be much greater. A classic – and costly – example is having to send a shipment by air that normally would have gone by ocean.

These tactical risks can result in significantly higher transportation expediting costs, quality rework expenses, and inventory carrying costs. For instance, many companies expect cost savings of 30 to 40 per cent

As a result, some manufacturing organisations are investing in new operations in western China or places such as Vietnam or Malaysia to keep costs as low as possible.

However, many of these areas also have more significant infrastructure issues (eg roads, power, and cargo safety issues) plus more vulnerability to natural hazards such as earthquakes, floods, tsunamis, and the like. The recent earthquake and flooding in China are examples of how catastrophes on other continents impact European supply chain activity.

Both sourcing decisions and existing supplier relationships should be examined in light of price inflation and global credit restrictions. In some cases, suppliers may no longer have enough cash to fully fund your orders. As a result, some suppliers may delay or only partially order raw materials, skimp on quality, delay hiring or facility expansions needed to support a customer’s business growth or product line expansion, and be significantly less resilient if a natural hazard or other supply chain disruption occurs.

Already, some companies report spotting lower-quality material in products or suppliers experiencing delays because of cash flow issues exacerbated by the global credit crunch.

– Strategic risks: Reputation, product integrity and regulatory risks are some of the strategic risks companies face when going global. Recent government regulations in emerging markets have resulted in export embargoes for food or other products with high local demand, new pollution regulations that force plant closures and even nationalisation actions such as those experienced recently in Venezuela. Product integrity issues such as intellectual property theft, counterfeiting, diverting, and product safety and quality issues all become magnified when dealing with global supply chains. Well-publicised examples include lead paint in toys and pharmaceutical and food safety issues. Reputation issues increasingly go well beyond safety and quality to issues such as child labour and environmental sustainability.

51

Is your supply chain unprotected?

Interviews with supply chain managers, corporate risk managers and finance executives show that innovative organisations are adding more in-depth analysis of supply chain risk to their corporate risk management efforts. Some companies are even making radically different sourcing and other operational decisions as a result. One vice president of finance who was interviewed explained that his company formed a cross-functional supply chain risk team that meets quarterly. One outcome has been that they have moved from sourcing their most important revenue product from a single supplier to five suppliers in five geographies, so that they will almost certainly be able to bring the product to retail shelves no matter what the supply chain disruption.

The Marsh survey results show, however, that most companies are struggling to have their risk management capabilities keep pace with their growing global supply chain risks. When asked how effective they thought their organisation was at managing supply chain risks, just five per cent of the European participants reported that they were highly effective (figure 2). More than half believed that their supply chain risk processes had limited effectiveness or were ad hoc and inconsistent.

A lack of staff time and resources for risk management – combined with the complexity of supply chain processes that can involve thousands of internal and external organisations – create seemingly daunting challenges.

How companies can protect their supply chains

Promisingly, the Marsh study uncovered specific practices currently being implemented by innovative companies that can greatly enhance supply chain risk management effectiveness.

Actions for success identified by the Marsh research include: – Focus on your most important vulnerabilities. Prioritise contingency planning, risk mitigation and insurance activities for those aspects of your supply chain that would cause the most cash flow or brand reputation damage. The traditional way of identifying critical suppliers often does not work when looked at from a risk perspective. The procurement department, for example, typically identifies critical suppliers by the amount of business that is done with them – that is, money spent. But Marsh has seen time and again that the greatest vulnerabilities may be from a small supplier producing a lowcost paper filter or screw which is instrumental to keeping the goods flowing. Hidden interdependencies, such as multiple tier one suppliers all relying on the same tier two supplier, also need to be uncovered.

– Create consistency and think end-to-end. Implement supply chain risk management processes that are consistent across the enterprise and are designed end-to-end, including direct suppliers, critical raw material suppliers and logistics partners. The North American Marsh study found that the companies most effective at supply chain risk management were an astounding nine times more likely than their peers to have implemented consistent supply chain risk processes across their enterprise. (The European study did not cover this topic.)

– Evaluate risk transfer options.

Educate your company on the new insurance products that protect against supply chain delays and disruptions.

Traditional insurance products have focused on protecting companies from physical damage to factories or goods. New insurance innovations recognise that a delay to your flow of goods can be every bit as financially damaging. These delays may be because of a raw material delay, a supplier labour strike, a logistics disruption, a government action, or so on – events that cause your organisation to have to stop a production line or miss deliveries to customers.

Source: Marsh European Supply Chain Risk Management Poll, May 2008

52

Moderately effective (40%) Low effectiveness (30%) No formal process to address (23%) Highly effective (5%) Do not know (2%)

Logistics & supply chain

– Architect your supply chain to be resilient. Judiciously create more points of flexibility in your supply chain, along with improving your end-to-end visibility of partner activity and product movement. These actions help enterprises recover faster and less expensively from supply chain disruptions. These same capabilities result in shorter lead times, lower inventory and transportation costs, better customer service levels, faster cash-to-cash cycles, and improved earnings predictability.

– Give responsibility to the operational experts. Rather than try to create a separate new process, embed your risk management activities and responsibilities into your existing supply chain processes and functions. This includes supply chain managers having risk plans or metrics in their job descriptions or balanced scorecard.

– Formalise a cross-functional supply chain risk team. Use a cross-functional team to manage supply chain risks so that the corporate business goals and risk appetite can be factored into supply chain decisions. Typically, a crossfunctional team will consist of a combination of leaders from finance, legal, risk, and operations (eg procurement, logistics, and manufacturing). Some companies also report that a human resources representative is included on this team. Others include their insurance company or broker in their team discussions.

To learn more about strategies for dealing with supply chain risks in today’s volatile business environment,

“Our most concerning risk issues are labour issues, raw material costs, political and regulatory climates, import/export restrictions, and risks involving shifting production from plant to plant or country to country” download the Marsh report Inflationary Pricing Threatening to Destabilize Some Supply Chains. [http://global.marsh.com/news/articles/inflation_and_ supply_chain.php] Beth Enslow is a senior vice president in the Supply Chain Risk Management Practice at Marsh inc. She has more than 20 years’ experience advising companies on physical and financial supply chain optimisation and related risks. Her previous positions include running the supply chain and global trade research practices at Aberdeen Group and Gartner inc. She can be reached at beth.enslow@marsh.com. Additional information about supply chain risk management can be found at www.scrm.marsh.com.

Have your say at www.themanufacturer.com

53

Here

today...

Over the past decade, the ERP market has experienced considerable change. Technology has developed and manufacturers’ knowledge and experience of buying, implementing and using computer systems has grown. At the same time, there has been a consolidation of solution vendors and products. While this has helped sort the wheat from the chaff – only the strongest products and suppliers have survived – there are still pitfalls for the unwary buyer.

John Stephens reports

54

IT

in manufacturing

These days

the use of business systems in manufacturing is a way of life and many manufacturers are on their second or third generation ERP system. Companies know what to expect from computer systems and their suppliers; modern solutions have standardised in terms of their functionality to a great extent; they are easier to use and prices have come down. In short, this is a mature market, and while business solutions can hardly be described as commodity products, it is much more a buyer’s market than even five years ago. It is hard to see anything other than that trend continuing.

As new customers become increasingly difficult to find, the only way ERP suppliers can expand their user base is to sell to each others’ customers. As well as putting downward pressure on prices, this has inevitably led to a bit of a shake-up as Darwinian principles begin to apply.

Some (usually smaller) systems and suppliers have disappeared altogether, while others have been acquired by competitors or other IT companies seeing an opportunity to expand their portfolio into the manufacturing sector.

All well and good, but if you’re thinking of changing your system, you should apply due diligence. Whichever system you choose, you will be entering at least a five to 10 year partnership with the vendor and you need to be certain about the future strategy for your system and the supplier itself.

Mergers of suppliers or products in the UK are sometimes driven by the acquisition of an overseas parent; otherwise, acquisitions have tended to follow one of two paths: companies which are trying to grow by acquiring complementary products and those which are buying up competitors to increase their user base. In theory there’s nothing wrong with either scenario, but in the latter case, only if the vendor can demonstrate a clear vision and strategy for its product or products. Because of their acquisitive nature, some vendors now have two or more ERP solutions, so how do you know which one is right for you?

One of the problems here is that, to a large degree, ERP solutions offer essentially the same core functionality and the real important differences between them can only be found in the nuances of the system and in its implementation. Your supplier will have to demonstrate a detailed knowledge of both the system and your business if you are going to be convinced it’s right for you.

Craig Such, managing director of Access Supply Chain (supplier of the eponymous ERP solution), believes it’s a cause for concern if a single sales team is responsible

for more than one ERP product; something he says has become more prevalent in recent times.

“ERP systems are very complex and it’s just not possible to have enough depth of knowledge on every product,” he says. “If you have more than one product in your portfolio, it makes it very difficult for the sales consultant to decide which product is the right one for the customer. We have been in competitive situations where the competitor has switched to recommend a different product mid-way through the sales cycle, as additional customer requirements are identified and they realise the system they originally put forward is no longer suitable.”

Access Supply Chain is itself part of a bigger group, Access Technology Group, which has been building its product portfolio in recent years both through organic growth and acquisition. Its strategy is to acquire complementary products, often in niche vertical markets.

While it is a standalone ERP solution, Access Supply Chain also shares its core ledgers with another Access Technology Group product – Dimensions. Dimensions is a fully-featured business and accounting solution used in a wide range of industries, and it has customers as diverse as the Royal Philharmonic Orchestra and Bridgestone Motor Sports. As a dedicated manufacturing and distribution system, Access Supply Chain allows Dimensions customers to add this extra functionality, if and when it is required.

“Whichever system you choose, you will be entering at least a five to 10 year partnership with the vendor and you need to be certain about the future strategy for your system and the supplier itself” One example of this is Sheffield-based kitchen manufacturer, Crosby Kitchens – winner of The Manufacturer’s IT in Manufacturing Award last year.

Crosby is a 65-employee operation with two divisions – manufacturing and sales and marketing. In England its products go to high street kitchen retailers via two main distributors; in Scotland it sells to house builders through a distribution arrangement with builders’ merchants.

This is a fiercely competitive sector with manufacturers vying for a share of a market with single-digit growth.

A couple of years ago, Crosby recognised it needed to overhaul its business systems if the business was to move forward.

Managing director Mike Atkin explained: “We really had very little information for the factory. The shopfloor was being run on spreadsheets and this meant we had no clear view of the work in there. What’s more, data often had to be rekeyed two or three times throughout the course of an order – this took time and often led to errors. We needed a manufacturing system to help us secure more control and more visibility.

55

IT in Manufacturing Award

ERP and Supply Chain solutions

“

It is critical for us to have a system that can quickly calculate materials and ensure deliveries are made on time.

Access Supply Chain has met all our

”

requirements.

LycoRed Limited

the UK’s largest supplier of nutritional systems

Powerful ERP and supply chain solutions from an award winning supplier with a proven track record.

‘Best use of IT in Supply Chain Management’ Award 2007

Call us now to find out why so many leading brands are using Access Supply Chain solutions

0845 170 8888 Supply Chain

www.access-supplychain.com

IT in manufacturing

“We were already using the Access Dimensions accounting software for all the ledgers and we were very pleased with that,” says Atkin. “We compared Access Supply Chain against other solutions and it competed very well in all aspects of functionality and it was very competitively priced. What tipped the balance for us, however, was that integration was simple – we could continue using the finance software and just move forward seamlessly with the manufacturing system.”

The business growth speaks volumes: “We’ve increased sales by 20 per cent in the last year and before we had the new system, we would have really struggled to keep up with any amount of new business – we were constantly fire-fighting and troubleshooting to get work processed as fast as possible. A 20 per cent increase in business means 20 per cent more orders to be picked, 20 per cent more products to be delivered. We’ve got the same workforce and we’ve taken this increase in our stride. We are more effective, we have more visibility and ultimately more control.”

“Deciding it’s time to buy a new ERP system is one thing, but what if you find yourself in the situation where your existing ERP solution or supplier is the subject of an acquisition?”

Deciding it’s time to buy a new ERP system is one thing, but what if you find yourself in the situation where your existing ERP solution or supplier is the subject of an acquisition? Again you need to find out what the future holds – if the new owner has other products, what is the upgrade path, is yours the system which is going to be developed and supported going forward, or will you be asked to migrate to one of the vendor’s other products? Nowadays, more and more suppliers are including software upgrades as part of the annual maintenance contract but Craig Such says it isn’t just the cost of the software you have to be aware of.

“Even moving to an updated version of your existing solution will require an element of training. If you’re moving to a completely different product, there will be so much more training and reimplementation – potentially running into tens of thousands of pounds – you may as well go to market and start again. What’s more, you may find the system you are being forced to take just isn’t suitable – it may have too much functionality or not enough,” he says.

So whether you’re buying a new ERP system, or if you find your existing solution has been acquired, make sure you start asking the right questions. Find out whether the supplier’s resources are focused on a single solution or spread across multiple, competing products. If it’s the latter, ask what future support guarantees the supplier offers – will you be forced to upgrade and what will that cost you? If you’re not satisfied with the answers, then you might want to think about your options elsewhere.

Have your say at www.themanufacturer.com

57

g n i g g Ta

along Radio Frequency Identification technology (RFID) has been much vaunted as the answer to practically all manufacturers’ needs for part marking, product security and traceability. But is it really such a ‘holy grail’? Tim Stokes, RFID and barcode product manager of SICK (UK) suggests that a more sanguine look at the range of existing and developing technologies available can help manufacturers to make informed choices

58

Operations & maintenance

RFID promises

much for the manufacturer in terms of enhanced data capture and security. As a comparatively new technology, its benefits and advantages have rightly won it a lot of supporters and its fashionably hightech image adds an extra appeal over other marking systems.

But against these advantages are stacked higher investment costs and some important limitations for certain applications.

And, while its enhanced information capacity is a boon for some, it may be an unnecessary luxury for others.

The concurrent developments in direct part marking, particularly in the humble barcode which has been with us for decades, are the product of a long evolution and a series of step changes. In the enthusiasm for the new, RFID might even eclipse barcode technology – if it were not for some hard economic facts requiring return on investment. The possibility of cost-effective alternatives to RFID should be considered. Consulting with a knowledgeable supplier who can offer both is one way of ensuring an objective stance.

RFID essentially works by marking an individual part, product or container with a transponder tag. The signal to and from the tag is both transmitted and picked up by antennae usually positioned on the conveyor line. The data is read by an interrogator system and communicated to a PC or other control systems.

The benefits of RFID

The benefits of RFID are widely recognised, especially because of its ability to store large amounts of complex data. Thanks to this storage capacity, RFID tags have a unique identity embedded within the tag. This has particular security advantages, where complex codes can be stored. RFID is an interactive method of marking that allows information to be stored on tags, enabling them to be re-programmed or for additional data to be added.

RFID tags can be read when out of line of sight (within limitations) – when covered by, for example, dirt, dust or spray paint – so can be especially useful in difficult environments, or as part of processing lines.

To achieve high end performance with ranges over 700 millimetres (HF) or three metres (UHF) and conveyor line speeds over 1.5 metres/second requires manufacturers to consult systems providers with extensive high end applications experience.

“ UHF, which is very close to the frequencies used for microwave cooking, is absorbed by water.

This makes it difficult to use with products which contain water, such as foodstuffs” HF systems are generally lower cost with a shorter range (typically a maximum of 1.5 metres), but the signal can be carefully focused to be quite directional, enabling high accuracy to be maintained, even at high speeds.

But the HF signal is attenuated (weakened) by metal, so that plastic mounts are required on metal products. The product orientation must be correct, otherwise the signal will be masked.

UHF systems have a longer range, but are not directional.

This means that product location can be difficult, and multiple signals in the near vicinity may cause interference.

While metal screens can be used to improve directionality, the signal also reflects from metal and can seem to bend round corners, so precision is difficult.

Additionally, UHF, which is very close to the frequencies used for microwave cooking, is absorbed by water. This makes it difficult to use with products which contain water, such as foodstuffs; if a tag is round the wrong side of the product, the signal may not get read at all.

Furthermore, large water-containing objects in the field, such as humans, may distort it.

Many RFID tags can be interrogated at the same time and their data recorded, enabling multiple product processing. Long-range reading, up to around six metres, is possible with passive tags (i.e. not battery powered) using UHF interrogators.

Care with RFID

There are a number of points to consider, however, which mean RFID might not always be the perfect choice.

A common misconception among manufacturers is the distance required between the antennae and the RFID tag on the product. Many imagine RFID to be able to manage greater distances and still maintain the quality of reading, which is often not the case. It’s also important to realise the products must be spaced apart on the conveyor when being read. Another myth is that RFID can pinpoint an object anywhere in the factory.

Read rates and accuracy are high when the application is successful but are not actually better than for barcodes if the barcode reading environment is favourable.

59

NOT TO BE MISSED! The Lean Business Masterclass, facilitated by Jean Cunningham 15 and 16 October, for more information, visit www.themanufacturer.com/leanbusiness

balancing finance...

...keeping on top of a turbulent economy The Manufacturer LIVE 2008 Innovate, Inspire, Thrive, Survive

sponsored by

• Keynote presentations by industry experts • Case study sessions on the latest manufacturing technologies • The latest in technology, software and business tools • Build your own conference programme • Gala dinner and award ceremony on October 15

Register online now www.themanufacturer.com/live

16 OCTOBER 2008 E x C e L

L O N D O N

Operations & maintenance

However, 1D and 2D barcoding does require line of sight reading, the data is assigned permanently and the label and environment must be relatively clean for maximum accuracy of data capture.

Three questions to ask yourself

Return on investment (ROI) must be the key arbiter in the decision whether to choose RFID or barcoding systems.

Below is a three step acid test which can be used as a preliminary to a detailed cost analysis.

1. Do you need to write to the label?

A = Yes B = No 2. Can the reader see the label every time?

A= No B = Yes 3. Is the environment too dirty for clear reading of the barcode?

A = Yes B = No Straight As, of course, mean an RFID system could well be the best answer; 3 Bs probably not; and a mixture means you will have to weigh up the costs and benefits very carefully.

The hidden costs and some ROI examples Frequency band applications

Indeed, the frequency of the radio signal has a significant part to play in the use of RFID. The radio frequencies are allocated within the ISM (industrial scientific medical) frequency bands, and the two bands most used within industry are the HF (high frequency) and UHF (ultra high frequency) bands. These are regulated by international protocols such as ISO18000-6, ISO15693 and EPCGlobal, to enable compatibility between competing manufacturers’ systems at the same frequency.

The case for barcoding

Simple 1D barcoding and 2D datamatrix coding can carry extensive amounts of data, and can be sized and shaped to suit the application and read distance; reading is line of sight. In addition, the codes can be applied by printed label or by direct product marking, i.e. direct printing (inkjet, transfer, etc) laser, etching, tattooing, dot peening, etc, onto the product.

The 2D datamatrix coding carries more data and occupies far less space than barcoding and can be designed to fit in with type and design so as not to affect the appearance of designed artwork used in branding.

Contrast can be as low as 20 per cent or even less.

2D is very error and damage tolerant – self-correction algorithms in the reading software mean high decode security even of damaged labels. Direction of reading does not matter, and marking can be permanent with DPM, but the reading range is shorter and code placement must be more accurate than with 1D. 1D barcoding is available in different formats, and has a high informational density but requires high contrast printing. It is cheaper to implement than 2D. 1D is easy to print without specialised equipment (even from a PC printer), with easily checkable print quality, long reading range and low cost readers. Major advantages are the speed with which the data can be read and the larger reading window that allows greater flexibility in product orientation.

A good quality, reliable passive tag currently costs around 50p and, although the cost of tags has fallen dramatically over the last few years as mass production has kicked in, the rate of reduction has now slowed to almost static. Yes, it is possible to buy a tag for 10p or less, but at the cost of reliability – 50p tags are guaranteed 100 per cent tested, whereas 10p tags are at best sample tested.

“Although the cost of tags has fallen dramatically over the last few years as mass production has kicked in, the rate of reduction has now slowed to almost static” This means that if a cheap tag is used on a high value product but suffers a five per cent or worse failure rate, a lot of money could be lost. This has occurred, for example, in the low margin food industry, where the temptation to add minimum cost via cheap tags to animal carcasses unfortunately resulted in inadequate stock control.

RFID success

One application where RFID has made a real contribution to efficiency and costs is in captive tagging, where the tag is permanently attached to a container and is re-used. A pilot project with a chilled food operation in the West Country used SICK high frequency interrogators for a high speed (2.5metres/second) conveyor. To date over two years, this has produced more than five million asset readings as the containers are recycled. Thus, despite the high initial investment, the assets and investment are retained within the food company, and the initial cost has been spread over a long time and many individual units.

In conclusion, despite the claims and enthusiasm that accompany the promotion of any new technology, the manufacturer needs to take a rational look at the costs versus investment and the possible benefits accruing. High quality data is essential in complex operations, but a balanced decision on the best route to obtaining the data required is more likely to deliver a favourable return on your investment.

Have your say at www.themanufacturer.com

61

Poised to

take

advantage Climate change is currently one of the most important global issues. As the worldwide credit squeeze starts to take effect and increased oil costs cause inflation across food prices, energy bills and the supply chain, manufacturers could be forgiven for pushing environmentally-friendly concerns to one side until the economy finds its feet again

According to

the East of England Development Agency’s (EEDA) Autumn 2008 ‘Source’, “it is estimated that global markets in environmental goods and services will grow from $548 billion to $800 billion by 2015.” Industry experts say this is the perfect time to analyse your organisation’s green credentials, with those organisations that take steps to enhance their environmental awareness now being wellpositioned to take competitive advantage in the future.

Climate change is reality. Forward-thinking organisations which keep one eye on the bottom line while reducing their greenhouse gas emissions will help lead the global economy into the post-carbon age. While sustainability and environmental management were once tick box or regulatory exercises they now drive business strategy and corporate value. We are moving away from the traditional linear system of ‘take, make and waste.’

62

Does manufacturing have a responsibility to lead climate change mitigation? Dr Hing Kai Chan of Norwich Business School comments that, “manufacturing responds to government-led regulations because it has a duty to keep profits high.” Anecdotal evidence also suggests that manufacturing has traditionally responded to government intervention through legislation rather than by taking a proactive stance towards the environment.

The WEEE directive provided a call to action as organisations began to realise that there was potential for both cost saving and enhancing sales, but across much of the globe there is a wait-and-see attitude as legislation arrives. By the end of the first compliance period in December 2007, over 184,000 tonnes of WEEE material had been collected and sent for reuse. Dr Chan continues: “There is a long way to go. Regulations are a penalty. It is up to government to install

Sustainable manufacturing

regulations that act as incentives.” There are some notable exceptions, however. Philips, Proctor & Gamble, Henkel and Unilever have all produced lower carbon products, requiring less packaging ensuring more units shipped per vehicle. Unilever’s UK CEO, Niall Fitzgerald has commented: “Sustainability is here to stay or we may not be.”

A recent Ernst & Young study (Green for Go – Supply Chain Sustainability, 2008) found that only 12 per cent of respondents cited green issues in their top three supply chain issues despite the fact that 65 per cent saw sustainability as an opportunity for revenue growth and that 71 per cent saw brand and reputation as the areas where sustainability would provide this growth. The study concluded that the “current target of 60 per cent emissions reduction by 2050 is likely to be raised to 80 per cent, laying the foundation for legislative reform. It is not a question of ‘if’ but ‘when’ new legislation will bite – and the when is likely to be in the next five years.” Reducing carbon emissions will benefit the bottom line, for where there is carbon, there is cost.

Implementing climate change awareness into processes now does not need to cost much. The Carbon Trust even says that “most businesses could quickly save 10 per cent on energy without capital investment.”

However, it is also up to government to take the lead in this area, with many of the Ernst & Young respondents complaining that there was no clear, unifying definition for carbon reduction and that manufacturers can be overwhelmed by retailers, consumer product makers, government, environmental certification organisations and activists that all mean different things when they use terms such as green, natural, and sustainable. Interpreting these multiple messages is crucial, however, to business growth, as more and more companies cite consumer demand as a far greener carrot than legislation as a factor in changing business practices.

In the forthcoming Sustainable Manufacturing Summit Europe (Brussels, 19 to 20 November), sessions include carbon and eco-labelling, life cycle analysis, strategies for reduce, reuse, recycle and turning eco-management into corporate strategy. That the industry is starting to police itself is an encouraging sign, and according to a study by Nottingham University Business School (Manufacturing and corporate environmental responsibility: cost implications of voluntary waste minimisation, 2004) a growing number of firms are going “above and beyond” legal requirements by minimising waste and embodying products with “socially desirable attributes”, for example, recycled paper and dolphin friendly tuna. Many firms have also adopted voluntary environmental management systems, such as ISO 14001.

Furthermore, this kind of eco-awareness is likely to get media attention. With the help of CRed, (the Carbon Reduction Programme, part of the University of East Anglia’s Low Carbon Innovation Centre), Suffolk brewer Adnams micro-analysed its beer production process with the intention of creating a carbon neutral beer. Produced in its energy efficient warehouse, with Europe’s largest green roof, Adnams released East Green earlier this year to great acclaim. The beer has a tiny carbon offsetting element but is practically carbon neutral. Reducing the carbon emissions has led to a high profile, and East Green has become the biggest launch for an Adnams product. Tesco has pledged to carbon-label 100 products by the end of 2008 and pressure will build down the supply chain to provide the data necessary for this process. Professor Simon Gerrard

Energy saving tips Sixty-five per cent of companies see sustainability as an opportunity for revenue growth and 71 per cent see brand and reputation as the areas where sustainability would provide this growth.

Simple steps to saving energy:

1. Appoint an energy officer to co-ordinate a campaign 2. Instigate a lights off campaign 3. Engage all staff 4. Install an energy monitor 5. Encourage supply chain to save energy of the Low Carbon Innovation Centre insists that it is not difficult to manage carbon output in the workplace. “The sixstep CRed standard enables managers to understand the carbon reduction process. It starts with commitment from senior company representatives and propagates through staff awareness. The business will need to monitor energy use and set targets for energy efficiency demonstrating its actions to clients, neighbours and suppliers.”

The Low Carbon Innovation Centre is an umbrella organisation housing several companies, including CRed and Carbon Connections (www.carbon-connections. org/), which focus on combating climate change. Carbon Connections is an investment body with a portfolio of 26 innovative, low carbon projects. Some of the projects represent manufacturing, sustainable construction, microgeneration and engineering.

One of the projects is the filming of a documentary which premiered on the 8 October. The Carbon Cutters are three UEA Environmental Sciences students who spent their year-in-industry auditing and reducing the carbon footprint of three Norwich organisations: a hospital, a crop science company and a plastics manufacturer. As the students discovered, it is not necessarily easy to change behaviour.

Jason Galloway, student carbon officer at UCP Zeller commented: “There are a lot of staff who have worked here longer than I have been alive.” However, many of the changes that Jason implemented have led to widespread carbon (and financial) savings and have been rolled out as far as the company’s Chinese plants. Alison Morris, who spent her year at Norfolk and Norwich University Hospital, instigated a ‘lights off’ campaign that, along with other energy efficient measures, and reduced the enormous energy bill by 1.5 per cent, saving over 100 tonnes of CO2.

All three organisations reported that, in addition to workrelated carbon reduction strategies, staff engagement was the single biggest factor in saving energy.

In the last issue of this magazine, Nick Hussey called for a reduction in red tape. This is advice that government should heed, for there is an opportunity to set a clear lead for the UK’s entry into a sustainable post-carbon age.

The company that saves carbon saves money.

Businesses that streamline now will be well-placed to meet future challenges with robust, sustainable productivity supported by loyal customers.

Have your say at www.themanufacturer.com

63

Less energy – more power

Seeing is saving: energy visibility in manufacturing IMServ provides British manufacturers with cost-effective energy management solutions – including sub-metering so you can see energy consumption & costs for different parts of a process.

• Improve energy efficiency – cut costs • See where, when and how much energy you’re using • Monitor consumption and costs for different stages of your manufacturing process • Reduce emissions and your carbon footprint

IMServ and UK manufacturing: brighter together To learn more call 0870 833 5656 or email brightertogether@imserv.com IMServ Europe Ltd Scorpio, Rockingham Drive, Linford Wood, Milton Keynes MK14 6LY

64

www.imserv.com

Casestudy IMServ Europe

Carbon

calculations In today’s increasingly environmentconscious society, carbon reduction has become a must for manufacturers.

IMServ explains how it can help in the journey to greener operations

IMServ

Europe is an independent energy data management specialist. Simply said, it provides businesses with information about how much energy they use. With government pressing for CO2 reductions and businesses having to make cuts to the bottom line, the subject matter of energy has never been as important as it is today.

“Before any company embarks on an energy efficiency drive they need to know what they are currently using as a baseline,” said Lucy Fitzgerald of IMServ.

“It’s all well and good implementing energy saving activities such as installing energy efficient lighting or machinery, but without knowing where you started from and without visibility it’s much harder to gauge the success of your initiatives.”

“With the EDV system, each of our three units is linked to a separate electricity meter, and the office runs on a sub-meter. This allows for complete transparency across the site and has led to all departments engaging directly with their own energy management. Working together, we managed to save 10 per cent of our energy costs in year one and a further 10 per cent in year two.”

More and more businesses are seeking visibility on their energy data so they “Before any company embarks on an energy efficiency can see exactly where and when energy is being consumed and identify drive they need to know what they are currently using any anomalies or wastage. This kind of as a baseline” information is empowering businesses to implement energy saving actions, leading to lower energy bills and For manufacturers this point is even From its beginnings in 1992 as an helping to reduce carbon emissions. more pertinent, as Lucy points out, electricity data collector for energy IMServ’s online data presentation tool, because the machinery and processes suppliers, IMServ has evolved with Energy DataVision (EDV), allows users they operate can use huge amounts of the electricity market providing to easily view their energy consumption electricity which, in most cases, has tailored energy solutions directly to UK across entire portfolios or single sites the potential to be reduced. As well as businesses; helping businesses see through one secure window. For more corporate social responsibility and the more, save more and be greener. sophisticated energy management, cost benefits of doing so, manufacturers IMServ’s reports can provide email are under increasing pressure to reduce alerts flagging attention to the fact that carbon output from government targets a certain threshold of consumption set by EU legislation. has been surpassed or that unusually One of IMServ’s clients, the Kent-based high levels are being recorded.

Medway Galvanising Group, provides a IMServ provides bespoke solutions model example of the benefits of EDV. for each client. That means the Its engineering manager Steve Lovelock complexity of the data provided is up said: “It is something we should have to the customer. It can involve installing looked at years ago. We have installed sub-meters to monitor the energy energy-saving devices, such as a heat consumption of certain parts of a plant recovery plant to heat our pre-treatment or even down to individual appliances. tanks – which saves around 48kW per IMServ can even monitor other utility year – but we still need to tighten up consumption such as water and gas. throughout the plant.

Published in association with: IMServ Europe Tel: +44 (0)1908 696 000 Email: brightertogether@imserv.com Web: www.imserv.com

65

Football

fever and much more

As South Africa prepares for the 2010 World Cup, Nicolette Fox finds out that there are still contracts waiting to be signed, and how one UK manufacturing company has built a thriving export business based around the tournament and is capitalising on a favourable environment for manufacturers

66

Globalfocus South Africa

The UK

government’s business development organisation, UK Trade & Investment, which helps UK-based companies succeed in international markets and assists overseas companies to bring high quality investment to the UK has identified South Africa as a high growth market with significant potential for UK companies.

Their latest research, Tomorrow’s Market, launched in September, gives insights into where the top global companies are focusing investment and why – and ranks South Africa in the top 10 most exciting investment destinations in the world.

Ranked 32 out of 178 markets for ease of doing business by the World Bank (2008) and ranked ninth for investor protection, South Africa is a market to which serious consideration should be given. The UK is already one of three top investors in the country and has been for many years, and it is the UK’s largest export and import market in Africa.

While there is great potential to increase business between the UK and South Africa, there is already over £7 billion in twoway trade in goods and services between the countries each year. In recent years there has been significant investment in South Africa by well known UK companies such as Barclays Bank, Rolls Royce, Cadbury, Vodafone, Virgin Mobile and Associated British Foods. Such interest demonstrates that South Africa has enormous potential as an investment destination for UK companies.

Bryan Treherne, a former manufacturer with many years experience of trading with South Africa, was awarded an MBE for his service to British trade this year. He now works as an International Trade Adviser for UK Trade & Investment. Treherne and his colleagues across the UK can give advice to UK companies about South Africa and set up useful contacts. They also run trade missions which can pair UK companies with specialists and potential partners in market. The next mission from London will be in March 2009.

Domestic market and beyond

South Africa is by far the biggest economy in Africa – it has 40 per cent of Africa’s gross domestic product. With a domestic market of over 47 million, South Africa can also be used as a gateway to the rest of the continent with good air links and improving rail and road links. But it is not just the African continent that provides possibilities from business in South Africa.

The African Growth and Opportunity Act (AGOA) was signed into law by the US Congress in May 2000. The Act liberalises trade between the US and 39 African countries – including South Africa – offering tangible incentives for those countries to continue their efforts to open their economies and build free markets. UK companies with partnership agreements with South African companies can take advantage of the AGOA free trade agreement.

“I tell UK companies that if they invest in South Africa they not only get access to the whole of Africa but also America” Treherne points out that, “UK businesses may not realise that South African manufacturers don’t have to pay import duty into America, which gives them a real competitive advantage in this market. This trade agreement was developed to help South Africa after the dismantling of the apartheid regime. I tell UK companies that if they invest in South Africa they not only get access to the whole of Africa but also America.” He adds: “It is a unique situation that our manufacturing industry could really benefit from.”

The UK has an Investment Promotion and Protection Agreement (IPPA) with South Africa. Trade agreements with Europe are also very favourable. In 1999, South Africa signed the Trade, Development and Co-operation Agreement (TDCA) with the European Union (EU) which aims to create a free trade area between South Africa and Europe over a period of 12 years.

Since the implementation of the agreement in 2000, trade relations between South Africa and the EU have improved substantially. From 2003 to 2005, trade flows increased by 21 per cent. It is predicted that by 2012, 95 per cent of South Africa’s exports to the EU and 86 per cent of the EU’s exports to South Africa will be duty-free.

67

Confidence on the up

South Africa is the ideal high growth market for UK companies to set their sights on. English is the main business language and there are similar legal systems and business cultures. Figures supplied by Coface, the major global credit insurer and risk adviser, show that South Africa was the UK’s 23rd largest export market in 2006, representing £2.18 billion. The UK is the sixth largest importer into South Africa, with 5.6 per cent of the total. Coface is positive about trading with South Africa, pointing out that public finances are under control, external borrowings are at moderate levels and overall debt is low.

“One benefit for businesses locating here is that they often have all the services they need in one place, and therefore don’t have to send their products to other parts of the country to get them finished” The Coface index that measures payment confidence puts South Africa in the top half of the world league. There is also a great deal of confidence in the South African corporate sector. The South African Revenue Service has considerable credibility and many of the practices and services surrounding business, such as insurance, finance and law, are advanced and sophisticated.

Manufacturing hub

The manufacturing sector is important to South Africa and is diversified across a range of different industries including agriprocessing, automotive, chemicals, ICT and electronics, metals and textiles, clothing and footwear.

While manufacturing takes place in different parts of the country there are three main centres. Cape Town specialises in scientific instruments, while Johannesburg has a spread of general manufacturing across the city and the wider Gauteng province. Durban is, however, the main manufacturing centre in the country.

“Durban has a specialist manufacturing park with a wide range of companies from those producing scientific equipment to the production of domestic goods. One benefit for businesses locating here is that they often have all the services they need in one place, for example painting or engraving, and therefore don’t have to send their products to other parts of the country to get them finished,” Treherne says.

A cluster of manufacturing jobs also means that employers can draw on many different skills, from precision engineering to welding. “There is a lot of interest in learning new trades and skills which could prove very useful for UK companies,” Treherne says. “What is also really good about South Africa is that they have excellent schemes for converting ‘on the job’ training into formal qualifications.”

68

In July 2008 the minister for trade & investment, Lord Digby Jones, visited the country to encourage further business developments between the two countries.

“South Africa’s rapid growth is fuelling bigger and better opportunities for business partnerships and trade and investment relations, which is why UKTI’s presence in South Africa is even stronger than ever, with staff based in three major cities to support these opportunities and expansions,” he says.

Global focus South Africa

69

South Africa Capital: Pretoria (administrative capital); Cape Town (legislative capital); Bloemfontein (judicial capital)

Geographic co-ordinates: 29 00 S, 24 00 E

Languages: IsiZulu 23.8%, IsiXhosa 17.6%, Afrikaans 13.3%, Sepedi 9.4%, English 8.2%, Setswana 8.2%, Sesotho 7.9%, Xitsonga 4.4%, other 7.2% (2001 census)

Area: Total: 1,219,912 sq km Land: 1,219,912 sq km Water: 0 sq km Note: includes Prince Edward Islands (Marion Island and Prince Edward Island)

GDP (PPP): $9,800 (2007 est.)

Population: 48,782,756 Note: Estimates for this country explicitly take into account the effects of excess mortality due to AIDS; this can result in lower life expectancy, higher infant mortality, higher death rates, lower population growth rates, and changes in the distribution of population by age and sex than would otherwise be expected (July 2008 est.)

Ethnic groups:

Black African 79%, white 9.6%, coloured 8.9%, Indian/ Asian 2.5% (2001 census)

Religions:

Zion Christian 11.1%, Pentecostal/Charismatic 8.2%, Catholic 7.1%, Methodist 6.8%, Dutch Reformed 6.7%, Anglican 3.8%, Muslim 1.5%, other Christian 36%, other 2.3%, unspecified 1.4%, none 15.1% (2001 census)

Currency:

Rand (ZAR)

Climate (taken from http://www.wordtravels.com/ Travelguide/Countries/South+Africa/Climate/):

South Africa is a large country and has diverse climactic regions, but in general the weather is sunny and hot in the summer months (December to April), and mild during winter (May to November). Winters in the Cape are cold and wet, and snow falls on the mountain ranges here and in Natal. Gauteng and the northern areas experience thunderstorms regularly during evenings in the summer months, and winters are usually warm during the day and cold at night.

Useful Addresses: UK Trade & Investment Enquiry Service UK Trade & Investment Enquiry Service Tay House 300 Bath Street Glasgow G2 4DX t: 020 7215 8000 South African High Commission South Africa House Trafalgar Square London WC2N 5DP

70

2010 World Cup

One key area the minister highlighted on his visit was the forthcoming FIFA 2010 World Cup. The run-up to the tournament in South Africa is well under way and the Local Organising Committee has made great progress. With less than two years to go, most of the major construction works are underway and contracts have been awarded – but there are still a number awaiting placement. “There is still opportunity for UK companies to get involved,” said Edward Griffiths of the South African Local Organising Committee. “There are still gaps in the supply chain.”

A large sports programme like the World Cup drives demand for everything from catering to communications, and security to sports management – much of it manufacturing driven. “If you could take a major sports arena and turn it upside down, many of the things that would fall out represent the items that are still needed for the FIFA World Cup 2010,” says Martin Hall, who is the deputy head of major sports projects at UKTI. He suggests companies contact UKTI’s market specialists in Johannesburg who can liaise directly with the key contacts in the major cities.

One UK company that has embraced the opportunities that the World Cup has thrown up is Kidderminster-based Tiger Turf. William Allan is the sales director of Tiger Turf Africa which provides artificial grass for sporting events.

“There is great potential in South Africa – it has first world infrastructure in a third world continent,” Allan says. “In recent years there has been a lot of investment and money going into the country and with the World Cup coming up it is a good time to invest,”

Joint venture

Within two years of establishing themselves in the South African market, sales look set to top nearly £1 million this year.

“We installed a full size artificial football pitch in South Africa last year – the first ever in the country and it was sponsored by the English Premier League in collaboration with Barclays Spaces for Sport. Since then we have installed a further two full size pitches and have an order for another 10.”

They are close to finalising a deal for up to 100 sports pitches in townships in the lead up to the World Cup – helping some of the most deprived communities in South Africa.

Up until now, Tiger Turf has been exporting to South Africa but from this autumn it plans to start manufacturing within the country. It is partnering with a major carpet manufacturer in Durban.

Global focus South Africa

“It was very simple for us to set up a joint venture and very little bureaucracy. Having exported for a couple of years, now is the right time to set up local production.

This should also make it easier for us to start expanding into other African countries,” Allan says.

Broad-Based Black Economic Empowerment

To realise its goal of faster and shared economic growth, hindered by the legacy of apartheid which resulted in two hugely divergent economies, the South African government introduced Broad-Based Black Economic Empowerment (B-BBEE) legislation to bring these two economies together. UK companies need to be aware of B-BBEE as it is a major driver in the South African economy; however, it should not deter potential UK investors as it’s all about good governance.

Key manufacturing sector opportunities

UK Trade & Investment has a programme of support services and a team of experienced experts to assist companies entering or expanding in the market.

Broad-Based Black Economic Empowerment 7 steps for British businesses 1.

Review tender documents with a fine toothcomb to ensure that your company is able to meet all the necessary conditions.

2.

Request copies of all your clients’ procurement policies.

Make sure you understand their priorities and conditions of work. If necessary, make an appointment to see the procurement heads or relevant decision-makers to clarify any points that could negatively affect your company.

3.

Consider the cost of implementation and/or compliance in your pricing model.

4.

Ensure that you are aware of all of the applicable legislation.

5.

Familiarise yourself with local government support and programmes already in place to achieve the required objectives.

6.

Remember that fronting structures are considered fraud.

7.

Consult with an expert prior to employing, structuring local joint ventures or agreeing on an implementation strategy to avoid costly errors.

Automotive

Automotive represents 13.5 per cent of all South African manufacturing exports.

Opportunities: High technology/advanced engineering design/precision engineering/telematics/biometrics.

Construction

Construction has been the fastest growing sector in South Africa.

Opportunities: Design/planning/project management/ major construction projects/infrastructure/ports/ railways/airports/miscellaneous building products.

Environment

Environment is at the top of the government’s agenda and the estimated size of the sector is more than £1 billion.

Opportunities: Air pollution/waste management/ coastal water/water supply/wastewater treatment/ recycling/project management/financing/legal advice.

Power

South Africa cannot produce enough energy to meet demand and it is the world’s 11th largest contributor to global carbon footprint.

Opportunities: Consultancy/technology/solar panels/ wind turbine technology/insulation.

In addition to the above sectors, UK Trade & Investment has identified particular opportunities in transport; creative industries; agriculture; financial services; education and skills; and healthcare.

UK Trade & Investment stands ready to assist UK companies to make the most of this exciting investment destination.

Further information

Contact: UK Trade & Investment South Africa +27 11 537 7205 www.uktradeinvest.gov.uk http://www.southafrica.info

Have your say at www.themanufacturer.com

71

Development A

diary of product development

Evora

journey The

Lotus Cars manufacturing is extremely busy in its preparation for the VP (verifying prototype) build phase for the car. Now, with VP just a few weeks away, Evora’s dedicated assembly areas are starting to take shape

In the last few weeks,

the chassis line has been fitted with new hoists to support the modular build of the Evora. Lean racking is also in place to support our kanban parts delivery system (making efficient use of line-side space). The team has also started to develop the ‘visual process control’ system for each of the Evora lines. These will ensure that the car is built to the highest quality standards and will also be used to track the QCD (quality, costs and delivery) performance for those lines. Visual process control is an important feature of the Lotus Production System. It helps supervisors and team leaders to focus their efforts on the business of producing right first time quality at every work stage.

As a part of any new model introduction at Lotus we run a ‘station readiness’ programme. Our aim is to ensure that each work stage is ready to build the new car. As the Evora approaches its SOP (start of production) date, the readiness programme will confirm whether we have succeeded in training all team members to a defined proficiency level. The programme also establishes

72

our process capability. It focuses on each category of our production resources i.e. people, equipment, documented standardised work methods and materials/ parts availability. The production environment itself is also up for scrutiny. Our progress in meeting specific criteria is reviewed each day at a formal meeting. Having this ‘production enabling’ information allows us to compare specific readiness targets with where we have planned to be.

The whole Lotus team is very excited about Evora. We all know how important it is for us to get it right! Our manufacturing engineering teams have also been busy in finalising preparations for our VP build. They have been putting in place all the necessary jigs, fixtures and special equipment we will use to build the vehicle. Essentially, Evora will be handbuilt within the tight tolerances and high levels of fit that its design engineers have specified. That means that all specifications and customer quality standards have been fully documented and communicated. Next month, the diary will reveal how production has gone about meeting the challenge of the VP build.

Takeover y r dia

a diary of a

takeover Last month we reported on the purchase from administration and re-launch of Wigan manufacturing firm Kanban Sheetmetal. Here, new owners Paul Bell and Mark Blayney describe what came next Having bought the business, brought it into control, and stabilised the operation, we took a close look at the changes we should make first. It was apparent that sales needed to increase to achieve profitability and to protect the business from recessions or quiet spells.

The directors benchmarked the business against a QCD matrix and concluded that: 1. Quality was already very good, and would further improve under the new ownership 2. Cost: the pricing structure was perhaps too competitive – after all, the company did go into administration using the then-current prices!

3. Delivery performance was three weeks, which matches sector performance, and the OTIF rate was good for the current volumes.

As sales increase, the existing costing structure will more than satisfy overhead recovery, and some reasonable profits will be generated. Although a three-week lead time may be acceptable within the industry, it is not too clever from a lean perspective, and might start to stretch out as volumes increase.

This meant that although it was tempting to go straight after new sales, the best approach was to create extra capacity and establish more attractive lead times. It was concluded that the next stage should be to move to cellular manufacturing and towards single piece flow.

This would enable the company to achieve lead times of typically five days – depending on steel requirements and paint specification – and to increase capacity by 100 per cent.

The CNC punch presses each have footprints of 25m3, and each weigh up to 20 tonnes, so the moving process is quite hard work. New machinery has been purchased to complete the functions within each cell, and extraction equipment is on order. Once the new layout is commissioned, it should be possible for most products to be punched or cut, folded and/or bent, welded, finished, prepared, painted and packed within five days.

The increased capacity will ensure that new business can be taken on and delivered quickly, allowing the company to confidently start approaching new prospects.

Paul Bell is a Cambridge and Cranfield graduate and manufacturing improvement consultant. He founded Manufacturing Excellence, the north’s leading specialist in lean and agile manufacturing consultancy and training.

Email: Paul.bell@manufacturingexcellence.co.uk Tel: 01748 831908 Mark Blayney is a chartered accountant, MBA, member of the Institute For Turnaround and MD of Turnaroundhelp, a consultancy specialising in crisis financial management and the mentoring of ownermanaged businesses in recovery, as well finance raising.

Email: help@turnaroundhelp.co.uk Tel: 01434 345528

You can see Paul Bell speaking at the Manufacturer LIVE at London ExCel on 16 October 2008. Register for the event at www.themanufacturer.com/live

73

KEYNOTE NOT TO BE MISSED! ‘The fundamentals of a truly lean business’ Dan Jones of The Lean Enterprise Academy

rapid production... ...achieve fast, flexible manufacturing The Manufacturer LIVE 2008 Innovate, Inspire, Thrive, Survive

sponsored by

• Keynote presentations by industry experts • Case study sessions on the latest manufacturing technologies • The latest in technology, software and business tools • Build your own conference programme • Gala dinner and award ceremony on October 15

Register online now www.themanufacturer.com/live 74

16 OCTOBER 2008 E x C e L

L O N D O N

Manufacturinginaction Putting UK manufacturers under the spotlight “I’m really proud of what the team here have achieved so far to drive improvements into the design, build and commissioning of a very complex product”

76

BAE Systems Submarine Solutions

Factory of the month

“Part of the evolution of NSK and one of the key factors in its success over the last 32 years and into the future is that it’s not complacent and is certainly not insular”

101

NSK Bearings Automotive

“With governments making massive commitments for a high percentage of energy to come from renewable sources, it’s very important for us to continue to make investments and remain leaders in the industry”

105

JDR Cable Systems

109 113

122

“A focus on our people, our engineering solutions and truly innovative design are the cornerstones of our success”

125

“We have a balanced approach, with a good spread of customers across a range of sectors. Having strong relationships with our core customers is key”

127

Fablink

Food and beverage

Metal

“Where do we see the future within the print industry, we see it being more targeted, more bespoke, more personalised”

Kitchen and bathroom

The Sandwich Factory

CMM

Warehouse equipment

Avilion

Automotive

“Eastern European suppliers are not as cost effective an option as they once were – and we feel that this will give rise to opportunities for companies prepared to exploit this”

Loopthinking

Printing

Auto Windscreens “Customer service is part of a very important KPI for us. We have to meet very high standards to maintain and grow our business with those customers”

120

Elanders Hindson

Subsea technology

“We have seen our availability significantly improve just by tapping in to the knowledge and experience we have in the supply chain”

“With Loopthinking, the picker never leaves the picking zones, so downtime simply doesn’t exist. Equally, at shift changeover, the pick process stays continual”

Metal

117

“There is no paper, no scan guns and no wasted actions. Workers get into a very productive, focused rhythm with no distractions”

130

Vocollect

Warehouse equipment

75

killer Hunter

BAE Systems Submarine Solutions is diving deep into its processes and structures to ensure the UK’s Astute submarines programme delivers affordable capability and the most advanced submarines ever operated by the Royal Navy. Ruari McCallion went swimming with the tide

76

Factory of the month BAE Systems Submarine Solutions

This time, access to the submarine would be

different. The contortions of getting into and around the bridge fin – the bit that sticks up from the middle of the boat – were not on the agenda. The tour was to be of the whole boat, if required – the huge, dark, cigar shape of Astute, ‘boat one’ of the Royal Navy’s Astute class of submarines. It has been largely fitted out, although you can’t tell from the outside, which is covered with dark rubbery material. “Acoustic deadening,” said Aaron Iddon, my guide and area manager on Astute’s construction. We watched a worker doing something to the cladding. “Finishing off,” said Iddon, and that’s all the information that was to be forthcoming.

That’s the strange thing about touring a submarine construction facility. Almost everything you look at is secret, confidential or innovative in some way. The planned seven submarines of the Astute class will be the UK’s defence spearhead in the first half of the 21st century, and secrecy is part of the edge – but here was BAE Systems conducting a tour. It’s a bit of a contradiction but there is a message to convey: BAE is on an improvement journey to ensure that these boats are being built better, progressively faster and more effectively than any of their predecessors. There have been hiccups along the way, which

Space for the personnel who will crew and operate Astute is minimal. Forget the comfortable quarters of the Starship Enterprise or even the Red October: submarines are cramped. At best, you have to bob your head at each door I suppose one would expect on probably the most complex engineering task being undertaken in the UK, but importantly, the lessons are being learned and applied to the following boats, and each one is getting better. We will hear more about efficient production but for now, back to Astute. At the back was something very interesting – so interesting, it was covered with a shroud. It was possible to see just a little bit of it and I remarked that it looked like a very interesting propeller.

“Propulsor,” Iddon corrected me. “We can’t show you that because it’s a brand new design – very innovative. I can’t tell you anything about it, sorry.” Or if he did tell me anything, then the trip back home could have been curtailed by excessively fit men with bulges under their arms. What little that could be discerned indicated that Gerry Anderson may not have been completely off the beat when he designed the back end of Stingray for his adventure puppet show in the 1960s.

Astute is not yet completed so access is not by conventional means – the promise to avoid the bridge fin was kept. This time, we went in through the torpedo and armaments loading point, a tube angled downwards that delivers the business material to the store. Having arrived like a torpedo, I was assured that I would not be leaving like one, which was a relief. Being fired out of a tube at high pressure isn’t anyone’s idea of fun.

Before boarding, I’d been given a small device that would react to excessive carbon dioxide in the air and, on board, it was easy to see why such a precaution was necessary, even on dry land.

The overwhelming impression is claustrophobic. Space for the

77

78

Factory of the month BAE Systems Submarine Solutions

personnel who will crew and operate Astute is minimal. Forget the comfortable quarters of the Starship Enterprise or even the Red October: submarines are cramped. At best, you have to bob your head at each door; more likely, you have to half fold yourself to get through to the next chamber. Working in this confined space also presents its own problems, but BAE Systems staff are busy working throughout. Imagine trying to create a perfect weld between two pipes in a working envelope half the size of a single wardrobe.

This epitomises the daily challenges faced when building a submarine.

“Traditionally, the piping teams have gone to the engineering drawings and fixed three or four pipes together to create a package of work. What we’ve done here is bring three or four packages of work together” Sleeping quarters for a group of ratings are located in a room about the size of two or three standard office cubicles. Office workers may moan about the lack of space available to them; this room contained 15 bunks, stacked three-deep, with lockers for clothes and effects at the end of each one.

“This is a big improvement on previous designs,” said Iddon. “Every sailor gets his own bunk; there’s no hot-bunking on the Astute class.” So the impression of cramped quarters was mistaken: this is the height of luxury for a submariner. One’s respect for them goes up and up, the more one sees of their living and operating environment. There are no windows or portholes, of course; there would be very little to see from a submarine that’s designed to be able to remain submerged for days, weeks or even months at a time. The respect ticks up another notch.

An army, or any armed forces, marches or swims on its stomach. The officers have their own wardroom, which barely affords enough height to stand – and why should it?

You eat sitting down. The ratings have two dining rooms, one for seniors and the other for juniors. They can each accommodate approaching a dozen people at one sitting – but they’d have to be pretty good friends.

The wardrooms double as recreation areas; there’s a mounting point for a TV in each.

Thank goodness for the invention of flatscreen; a CRT monitor would encroach even further on the space. Small round tables serve as mounting points for a large tabletop, for dining or maybe a few card schools; snooker is definitely out. The servery extends along one wall – very nearly 10 feet. And the difference between junior and senior ratings’ dining facilities?

79

Engineered solutions Founded in 1982, Joss Engineering is now recognised as one of the premier precision machinists in the north west of England

Founded to support the shipbuilding activities in Barrow-in-Furness, Joss Engineering has developed and grown to its current stature supplying companies both home and abroad, with products that demand high quality and quick turnaround.

This development trail has also led to the development of a stockist and distribution arm of the company, supplying a wide range of consumable items to all types of industry. These include hand tools, power tools, cutting and threading tools, carbide inserts, lubricants, welding equipment, safety and protective wear and much more.

Our comprehensive manufacturing unit is fully equipped with both conventional

machining facilities and with state-ofthe-art CNC technology, which means that we are able to provide a service regardless of quantity.

Our manufacturing capability includes all types of machining work, as well as fabrication and welding, to your requirements.

Our stockist and distribution division specialises in the supply of a complete range of consumables for all types of industry; we currently stock a wide range of engineers’ tools and consumables for delivery to you, using our own fleet of vehicles.

We are able to source even those difficult to find items, using our network of suppliers – if we don’t have it we will get it.

Our welding and fabricating division is equally well equipped to manufacture high quality fabrications to customer drawings and specifications. Fabrications in steel, stainless steel and aluminium are all manufactured by qualified welders and fabricators to exacting standards. These disciplines are backed up by a 24-hour call-out emergency breakdown service that is available to all of our customers.

At Joss Engineering we understand fully the importance of customer satisfaction, quick turnaround and response, coupled with a competitive price.

At Joss Engineering we specialise in tailormaking engineering solutions to your problems and requirements.

Published in association with: JOSS ENGINEERING LTD Units 3-5 Meetings Industrial Estate, Park Road, Barrow-in-Furness, LA14 4TL

Tel: 01229 825445 www.josseng.com

80

Factory of the month BAE Systems Submarine Solutions

“The senior ratings have their own toaster.

The juniors have to wait until chef delivers for them,” said Iddon. Of such small things are promotions made.

The nerve nexus of the submarine is its control room, and it’s a welcome glimpse of slightly more open space. On the previous visit, the command centre for Ambush was a mass of exposed wires with various electronic units in polystyrene and plastic waiting to be fitted. Astute’s control room is populated with viewscreens and control panels, each with a chair in front of it. They are like games consoles, with joysticks, rollerballs and buttons for functions that are second nature to submarine controllers but remain a mystery to visitors. The joystick is exactly like an advanced game, damped and offering resistance to give the pilot feel. The captain sits in a raised chair, with all screens and stations – there are quite a few – immediately visible, even though the periscope dominates the room. In those old movies, it’s the periscope cutting through the waves that gives away the presence of a hunter-killer sub; today’s surface ships would be very lucky if they got that amount of warning as

the function of the periscope is to shoot up, take 360-degree photo and then shoot down again. It will cut the surface for merely a second or so. Even at the speeds Astute is capable of, the bow wave of a periscope would be extremely hard to spot in the time available.

Down a short corridor, one encounters a door that looks like the innards of a well-protected safe. It leads to the area that houses ‘the kettle’, as the BAE staff call the nuclear reactor that provides power to the sub. It’s lying open, so presumably the reactor hasn’t been installed yet?

“The support received from our board and the customer in developing an improvement philosophy is a clear demonstration of their commitment” “Oh, it’s in there,” said Iddon. Noticing a look of alarm, he continued: “but it hasn’t been turned on yet.” In the room, the operators come and go, talking of nuclear isotopes. He offers the chance to go deeper into the bowels of the boat, maybe to inspect the armaments store. No thanks – the cramped nature of the boat is having an effect, and one remembers the

81

Factory of the month BAE Systems Submarine Solutions

CO2-spotting device. All these people, breathing the same air – it’s time to get back out into the wide open spaces of the assembly hall. It takes slightly longer than is comfortable but relief is gained. Hats off to the people who build, man and operate Astute and her sisters – they are truly a breed apart. As we leave, Iddon points out two horizontal planes, well aft of the bow.

“Previously, when units were coming down, they were nearly always late; now, we’re achieving what was 20 weeks’ work in just 12” “They can operate in opposite directions,” he said. So they can make really tight turns, like a fighter jet? He nods agreement.

Astute is lying ‘boatwise’ – oriented as it will operate – and so is Ambush, boat two, but behind them are structures that look like squat chimneys. Previous classes of boats were built horizontally and everything had to be loaded in lengthwise. The build process of Artful is putting into practice lessons that were learned from its two sisters, as well as improving on benchmark standards picked up from Electric Boat in the USA. “The original design and the way the boats were built didn’t take any consideration of our capacity through our manufacturing facilities, the machinery and technology we have,” said Pete McParland, operations build strategy manager for Astute class.

He’s also the strategy manager for ‘successor build’ – the next generation of submarines, which are already well into the concept phase.

“We’re now finding that the rules have changed,” he continued. “We’ve implemented vertical build and we’re constantly looking at maximising opportunities for pre-assembling major modules.” The squat chimneys on the assembly hall floor are sections of Artful, boat three, in the process of construction.

They’re rotated through 90 degrees from boatwise, so the open ends are oriented vertically. Matt Anderson, head of manufacturing engineering, explained the philosophy and attraction.

“It enables us to use gravity, rather than working against it,” he said. “We can drop components in from the top, with cranes, rather than having to slide them in. It also makes everything more accessible.”

It’s good for health and safety, too: the construction workers are able to do a lot

83

Channelling inspiration Handmark Engineering is situated between what is now termed ‘The Energy Coast’ and BAE Systems Submarines on the west coast of Cumbria, under the beautiful backdrop of the Lake District mountains, and only a mile away from the golden beaches of Roan Head and Walney Island

Handmark Engineering was incorporated in 1983, although it traded as a private company from 1978. Inspired by its surroundings, and motivated by its young management team and workforce, Handmark’s aim and mission is to be the principle supplier of engineering services in the form of CNC and conventional machining, general fabrication and specialised pipe structures in most metals in Cumbria and North Lancashire.

Handmark is a lean, healthy, competitive manufacturing company able to provide QA support (ISO 9001:2000) for its varied products ranging from CNC machining up to 700 swing to 40 tonne fabrications.

Principally, Handmark provides services to a number of blue chip and many solid, vibrant, growing companies in the northwest. These include companies in the nuclear, marine, oil and gas, offshore and paper industries.

Progressive investment in machine tools in both the fabrication and machine shop and training, has seen the company’s turnover double in three years. This investment is not only in machine tools but also in the skills that this country has sadly seen slip away. Currently, of the company’s 55 personnel, nine are apprentices

84

both in fabrication and machining.

Handmark is fortunate to be in the same location with a world class company – BAE Systems Marine in Barrow-in-Furness.

It never ceases to amaze us that a company producing such a complex product, in many ways more complex than the space shuttle, is situated just a short bike ride away from our works.

Making exacting components for such mind-blowing construction as a nuclear submarine is a privilege we treasure. To have fabricators, welders and machine operators with the skills to support such a craft, in view of the national shortage, is very uplifting.

A further privilege is to be asked to participate in the drive to speed up production and cut costs with the fabrication of the work, office modules with access towers to be placed alongside the submarines in the Devonshire Dock Build Hall.

One of Handmarks’ strengths is its ability to manufacture fabricated and machined assemblies. More and more, the company is being asked to produce specialised assemblies for clients.

Further enhancing the company’s position is its ability to apply coating and protection to its manufactured items.

Thanks to its dedicated management team and workforce, Handmark is in a strong financial position, enabling it to invest in the erection of a new fabrication facility on the north side of the machine shop in Park Road. This 16,000 square foot high building, with two bays supporting overhead cranes, will give the company the means to attract and increase work in the years ahead.

With all the above, and a strong QA and QC structure producing comprehensive quality packages, Handmark is able to supply a product that satisfies its clients.

Published in association with: HANDMARK ENGINEERING Co LTD Unit 4 Park Road Industrial Estate, Park Road, Barrow-in-Furness, Cumbria LA14 4EQ

Tel: 01229 835922 Email: enquiry@handmarkengineering.co.uk

www.handmarkengineering.co.uk

Factory of the month BAE Systems Submarine Solutions

more standing up. Our conversation was interrupted from time to time by a couple of guys enthusiastically hammering ingots of metal ballast into the hull. Previously, they would have had to do so either kneeling down or leaning back; with vertical build, wherever in the hull they’re working, they are doing so standing up, with the work at the optimum height. It’s much less tiring, safer and much more efficient.

“We look to do the maximum amount of outfitting we can at this stage, in vertical build,” McParland explained. “On previous submarine design, the pressure hull would come together and everything would be fed through access points cut in the hull.

Pipes would come down in short lengths; small items would be fed through little hatches and put together inside. Now, we fit a lot more early in the build process and have cut down the amount of time we had to spend putting stuff through the hull.” He indicated a cluster of small-bore pipes to illustrate the point.

“These were originally designed with sets of joints, because they were going to go through small hatches. Once inside, the fitters bent them and welded together, and fixed them into place. Each weld had to be x-rayed to ensure their integrity,” he continued. “What we’re now able to do is manufacture a group of them together with all the bracketry on.

“We followed one operative during the day and found he was walking nearly three kilometres – we were going to tie our dogs to him, to make sure they got their daily walk!”

We no longer need the joins – they can all be made as a single unit.”

The particular module is a collection of 19 small-bore pipes. They’ve all been bent into the right shape – seven bends in all – and bracketed together. Several steps in the process have been taken out; efficiency and effectiveness have been hugely improved and quality, also: if there are no welds, there will be no faulty joins to have to be reworked. The improvement in the time to assemble and fit is of the order of 40 per cent in some instances. And the drive to improve doesn’t stop there.

85

Factory of the month BAE Systems Submarine Solutions

“We have a small team looking at the whole small bore/hydraulic pipe system,” he said.

“They’re going into the 3D models, taking sections of pipework out and looking at them in terms of their manufacturing capabilities.

Another team takes them through software to prove if they can be physically bent. We go through that analysis before we send the work to engineering. Traditionally, the piping teams have gone to the engineering drawings and fixed three or four pipes together to create a package of work.

What we’ve done here is bring three or four packages of work together. They deliver, it comes straight in and is fitted.”

The ‘packages of work’ approach that was trialled on the boat two bridge fin during 2007 is now spreading to the whole process. It has enabled stores, for example, boost its capacity and its control. Complete kits are prepared and bagged up before dispatch to fitting and assembly. Changes in the small-bore pipe team have got the process under control and boosted effectiveness: on-time delivery is now at class leading levels and the improvements are spreading all the way downstream. Of course, improvement doesn’t happen spontaneously or spread like a rash: it has to be managed and BAE Systems is investing a lot of time and effort into delivering sustained improvements across the board. Within operations there are five main streams of improvement activity which cut across the 170 acre site.

“Investment in facilities, equipment and people is now running into tens of millions of pounds over the last three years. The support received from our board and the customer in developing an improvement philosophy is a clear demonstration of their commitment,” said Anderson.

work orders in 80-hour packages, which is one week’s work for two guys. Within that package, we plan down to each nut and bolt.” The process includes full bills of materials; “it begins 12 weeks out, so well before the build plan is set in stone – it enables us to get the sequence right. It’s then passed to logistics, who put the work package kits together four weeks before they’re due. That gives us the opportunity to check that the kit is ready to be installed and to pick up any problems beforehand – any parts that need further processing can be identified and sorted before delivery” Ms Murray has a small team working with her, which is split into two halves – one team purely focused on sustainment.

“The process worked well on the bridge fin project but getting trials like that set up and putting a trial in place is one thing; what we now have to do is sustain those processes forever.”

Orwelco (Barrow) ltd Orwelco design, manufacture and fabricate large and small projects for companies such as Expro, BNFL, Oil States MCS, BAE Land Systems, Shell, BP, Subsea 7, Schlumberger, Fortis Design and James Fisher Nuclear.

We also have a performance partnering arrangement (PPA) with Ametek SCP of the United States and BAE Systems (Marine) to produce 1st level hull penetrators for the Astute Programme.

“We have reduced our late deliveries by 80 per cent in the last six to seven months and over the next month we’ll improve further”

One improvement stream is called Construction Vision. Ros Murray graduated in metallurgy at Cambridge and worked in the City for a while before joining BAE Systems five years ago. She has been operations change manager since July 2007.

“I’m responsible for ensuring construction vision happens on boat three; construction vision is about introducing lean manufacturing techniques into submarine build,” she said. “The difficult part has been trying to integrate lean philosophies with a very long, complicated product build time.

We are trying to introduce standardisation by creating standard size packages of work – a sort of takt time approach. We are also trying to identify and remove as many problems as possible upstream of the worker, so they can increase their value add when on the submarine.

“We’re taking it right back to the basics: we’re getting our planners to plan small

87

Factory of the month BAE Systems Submarine Solutions

The changes that have been effected are visible and almost tangible, even in the atmosphere. There is a sense of purpose throughout the operation.

“On boats one and two we had big long work orders and the manager spent a lot of time chasing and finding the information to enable them to fit everything in,” she said.

“We’re now trying to put everything into place so the build manager and team leaders get time on the job. They know what’s going on and are concentrating on building the boat, rather than being caught up with peripherals. We achieve that by ensuring materials are delivered on time and in the format they should be.” The second – and no less important – strand is integrating fit and quality inspectors into the work teams.

“Rather than catch faults or issues later on and have to do remedial, no work orders can be passed on and no credit can be received until the inspector has passed it and the lessons to make the job better next time are written down.” Analysis of how defects have arisen is also becoming an integral part of the operations.

“We have behavioural coaches which involves shadowing a leader for a day – someone who observes you and will give immediate feedback on how you can improve” “We have something called the quality forum, which includes a quality control planner and a representative from quality assurance,” she explained. “The QA rep’s role is to host problem-solving meetings.

If we’ve had something on boat two, say, and again on boat three, we will put in place root cause analysis and problemsolving measures to ensure it doesn’t happen again.”

The method of operation trialled on the bridge fin, which was the first part of the build to feature a construction tower alongside the operation, with offices and small workstations brought right alongside the construction site, is now being rolled out. There are nearly five yellow-painted towers across the hall, either alongside sections of boat three or lined up ready for installation. The proof of the pudding is in the eating: the new methodology tastes pretty good.

“In units six and seven (sections of boat three), we’ve achieved very good schedule and cost performance,” Murray said. “We’ve completed work in a lot fewer hours. Previously, when units were coming

89

Pulling out the stops at BAE Barrow Specialist flooring contractor 4m flooring uk has delivered a performance floor with style and safety underfoot for BAE in the north west 4m applied a high performance coating within BAE’s Nuclear Build Facility at Barrow. Due to the high technology equipment at the site, all works had to be carried out in a 100 per cent dust free environment, including the floor preparation and installation process.

commitment to high quality is reflected by its status as a holder of the Investors in People award, as well as the British Standard BS EN ISO:9001:2000. 4m was also one of the first flooring contractors to be awarded the environmental standard ISO 14001.

Using Flowcrete products, a grey floor finish was installed across the main floor area, with green walkways applied throughout. Demarcation areas and working zones were highlighted in yellow for additional safety. John Amis, 4m’s project manager for the works, said: “The new floor looks superb and helps with the flow of the manufacturing site, providing clearly marked walkways and supporting the site’s health and safety function in general.”

For further information please contact Sue Dennis at 4m on 01270 251244.

4m – part of the Seddon Group – is a premier name in the supply, design and installation of industrial and commercial flooring across the UK. The company’s consultative, solutions-led approach has seen it take on a range of prestigious flooring contracts, while its

90

Published in association with: 4m flooring uk Limited Tel: 01270 251244 Email: sales@4m-flooring.co.uk www.4m-flooring.co.uk

Factory of the month BAE Systems Submarine Solutions

down, they were nearly always late; now, we’re achieving what was 20 weeks’ work in just 12. We’ve achieved that improvement mainly through preparation – having plans ready, work ready and having the guys ready. We focus around meeting milestones related to the boat; essentially, we give them the tools and they get on and do the job and increase their value add.”

For Murray, the highlight of the changes has been seeing initial scepticism turn into enthusiasm. “Hearing them say it’s a better way of doing the job, that it makes their lives easier, safer and more efficient is great. The transition from ‘we don’t want that here’ to ‘we need to make this work’ has been very rewarding.”

Also rewarded by visible improvement is the sheet metal fabrication plant, headed up by Colin Taylor. He was already pretty sold on the vision in 2007; the actuality is even better.

“I’m really proud of what the team here have achieved so far to drive improvements into the design, build and commissioning of a very complex product” “We trialled portable benches to test the theory, where we ran non-welded components, like lockers,” he said.

“Previously, we had welding at one end, with other operations spread across the shop. We followed one operative during the day and found he was walking nearly three kilometres – we were going to tie our dogs to him, to make sure they got their daily walk!” The shop now works within the 80-hour work package Ros Murray talked about.

“We’ve now got the lay-up area down at one end, where material is delivered.

It goes from there to punching, then pressing, then it’s in a small buffer before assembly,” he continued. The welding centre is in the middle of the shop and it, too, is arranged on modular and movable workbenches. “We try to give the production lads a full week’s work, with no hold-ups; if we have any problems, we have the flexibility to fix without holding them up.” Previously, there was no fixed plan at all: every Monday, the men came in, picked up a printout and worked on the oldest item first. When it was needed, or whether something else was needed sooner, was not considered. The result was a lot of waste, backlogs, poor OTIF, poor performance and frustration.

91

Tools at hand...

The Construction Tower Vision is an exciting challenge and a project that has given Beta Tools the opportunity to develop and provide a bespoke storage and tooling solution to BAE Submarines in order to effectively manage and control their tooling requirements while keeping within strict budgetary constraints Beta Tools put forward a range of proposals and options that were developed specifically to be incorporated into the Construction Tower project. A pilot scheme went ahead and has resulted in a collection of storage units arranged in a way that accommodates the tooling needs of the various tradesmen working on the ships. Add to this a specially designed and engineered working surface and laser cut foam inserts to hold the tools orderly in the drawers and the result is optimised tool storage and tool control.

Beta is now working with the project team at BAE on a bespoke solution to

92

add keyless entry systems to the tool cabinets in order to offer total control over tool movements. 2D matrix laser marking offers a unique identification to each tool which is an important addition and will link directly to BAE’s IT system offering numerous reports on deployment of the tools.

Simplicity, ease of use, quality construction and the facility to incorporate additional features in the future were the criteria for this keyless total control system; this will allow BAE to grow this system to meet the future needs of their business.

Beta

Tools

is

Europe’s

largest

independent hand tools manufacturer and distributor; based in Milan, Italy they have three manufacturing facilities in the Milan area where the majority of their quality hand tools and associated products are manufactured. Serving industry around the globe, Beta offers an extensive range of products to satisfy the demands of the manufacturing, service and automotive industries.

Published in association with: BETA TOOLS (UK) LTD Tel: +44 (0) 1952 677977

Email: martin.bryers@beta-tools.com

www.beta-tools.com

Factory of the month BAE Systems Submarine Solutions

“We have reduced our late deliveries by 80 per cent in the last six to seven months and over the next month we’ll improve further,” he said.

Even the stores function has been drawn into the improvement process. The layout of the central distribution warehouse (CDW) has been completely changed; in place of a random process, there is planning and flow. T-card racks were very much in evidence, which should be a good thing – but if they’re stacked three deep, it isn’t.

“We were falling behind on a number of issues, in receipts and dispatch,” said Dave Wallis, a former rugby league player who’s clearly very proud of what his team has achieved in the six months he’s been in charge of CDW. “We have around 3,000 locations in one set of racking alone.

Altogether, we’ve got about £22 million of kit controlled through here, ranging from fast-flow to special order. Fast-flow items like nuts and bolts are delivered to lineside, straight where they’re needed.” Projectspecific items are held in store and made ready for when they’re needed.

“For me, the beauty of this warehouse is the amount of stuff we have going through every day. There could be up to a million components in a sub and every one of them

comes through here,” he said. “We’ve improved by changing our T-card racks over and making them more efficient. We colourcode – red for urgent – and list any current problems where they can be seen. We’re looking forward to getting our new ERP system in 2010 – at the moment, items have to be entered in manually, a number of ways, but the IFS system will change it all to a scanning basis. Scan once, get it on the system, scan when it’s stored, it knows where it is. But we now have the situation under control; we’re a lot better, and we’re going to improve further.”

“We carry out a 180 or 360 degree assessment, which covers the internal view of where they think they are and includes reviews from above, below and from peers” That sentiment persists throughout the organisation, and not just in shopfloor, ‘hands-on’ operations. Keith Flatman is in charge of operational strategy, which includes a concerted drive to improve the quality of management at all levels.

“It was probably about two-and-a-half years ago that we got the feeling in operations that the leaders weren’t being effective in terms of leading the troops,” he said. “They had the technical knowledge – no doubt about that – but there is that tendency in many organisations to put technically very good people in leadership positions and simply expect them to perform in that very different role.”

93

Just in time for BAE As a multi discipline engineering company, Cross Services Engineering Limited (CSEL) has taken pride in over 15 years of association with BAE Systems at its Barrow operations site

This pride is due to being part of a team – even though it may be that CSEL are a small cog in the overall machine of operations on the site, we nevertheless feel part of the team, and as each vessel is launched and leaves the dock for the first time, we can hold our head up high knowing that we have contributed to overall delivery of that particular piece of the shipyard’s great history.

94

Cross Services Engineering Limited in the main provide electrical support services to BAE Systems servicing the engineering teams and the onsite construction contractors in a just in time fashion. This consists predominantly of small works and preventative maintenance activities, with no job being too small or too difficult. We have conducted a number of very successful projects during our time at the extensive

Barrow operations, providing value to BAE Systems by delivering projects safely, on time and within budget.

Published in association with: CROSS SERVICES ENGINEERING LIMITED Tel: 01744 25254 Email: Talk2@crossgroup.co.uk www.crossgroup.co.uk

Factory of the month BAE Systems Submarine Solutions

The improvement strategy here is built around ‘development centres’, which at first view look very much like assessment centres in the recruitment function. But there’s more to it – for one thing, you’re dealing with people who are already within the organisation and are known. That gives opportunity to do more than a recruitment process will allow.

“We carry out a 180 or 360 degree assessment, which covers the internal view of where they think they are and includes reviews from above, below and from peers,” said Flatman. “We have been quite progressive in our approach and utilise occupational clinical psychologists, who look at character profiles and also give an impartial, professional view.” Leadership questionnaires also play their part but are not left isolated.

“We set up role play activities to see how people really handle situations. For example, we’ll get them involved with the visual management board, set up for a 7:30am meeting – that’s the most important meeting of the day for a team leader” “We set up role play activities to see how people really handle situations,” he continued. “For example, we’ll get them involved with the visual management board, set up for a 7:30am meeting – that’s the most important meeting of the day for a team leader. We maybe get one other member of the team to play the ‘awkward squad’ – arrive late, not pay attention, whatever – and see how it’s handled. As far as possible in the role play scenario, we put our people in real situations where they would traditionally have problems or challenges. They’re required to have those conversations and maybe even confrontations with people and deal with things they’d maybe not want to face.” People at all levels are taken out of their comfort zones.

The following day, the individual gets immediate feedback over a two-hour session, which is followed with a full report about 10 days later. An individual training development plan, based on the assessment, is put into place and implemented, with further feedback and probably four further intensive sessions

95

96

Factory of the month BAE Systems Submarine Solutions

over a period that could be up to a year. At the end of the process, a full report will tell the individual how they’ve changed and, hopefully, improved – or whether they have moved and developed the necessary competencies.

‘We have a total leadership population in operations of around 350 people and we’ve put well over 200 of them through development centres, split into four cohorts,” said Flatman. “We’ve invested in the region of £500,000 in this process alone, but are convinced of the benefit it gives our leaders.” Could not pre-prepared training packages have achieved much the same?

“The budget comes out of the savings we achieve. We found we simply couldn’t train to the extent we needed with offthe-shelf packages, which would have been simply delivered to our people with the expectation they’d improve,” he replied. “We’ve reviewed what we’ve done and have changed some things: we’re developing more internal support resources.” But there’s no way BAE Systems is going to go back to the old sink-or-swim approach. “We’re bringing in more ‘at-elbow’ support; we have

behavioural coaches which involves shadowing a leader for a day – someone who observes you and will give immediate feedback on how you can improve.”

You may have a meeting to attend: your coach, or shadow as they’ve become known, will give you instant feedback on how you’ve behaved. BAE is about to engage on its fifth phase of the process, which will bring in a fifth cohort of the leadership population. As with much about the Barrow operation, lessons have been learned from previous experiences. “It helped us to get more joined up, offer better support and improve personal skills.”

Alongside the behavioural coaching, process training is also underway in the form of the TTP – Transformation Toolset Programme.

Edmundson Electrical Edmundson Electrical, founded in 1801 by Joshua Edmundson, has developed from humble beginnings to becoming an early supplier of electricity to being the leading distributor of electrical equipment to BAE Systems, trade and industry in UK. Operating a highly decentralised business philosophy, decision making is empowered at 250 stockholding branches committed to provide a comprehensive, unrivalled same day service.

The investment in self development is clearly paying dividends as BAE grow their own capability for improvement

97

Sustaining improvement Making improvements to a business is only half the story.

Continued effort is required to ensure that the resultant benefits are upheld

RWD Technologies began work with BAE Systems Submarine Solutions in late 2005, when tasked to support a pilot cellular manufacturing activity in the pipe production facility. This part of the business is crucial to the boat build process, yet there were a number of significant issues, mainly due to process layout, workplace organisation (5S), material flow and levels of work-in-progress. RWD worked together with the BAE Systems team from the initiation of the project, jointly analysing the existing process using a value stream mapping approach. When the recommendations were approved, RWD activity became more hands-on to support the multi-functional team in working the recommendations through to practical implementation.

The RWD approach is to coach the team through transformation learning by doing. This quickly built a successful partnership and close working relationship with the BAE Systems team.

Within a few months, improvements were tangible. By December 2006, lead time for the majority of pipes was reduced from 27 days to around four days; work-in-progress went down from about 400 units to around 50; and productivity improved from five man hours to just over three.

98

Since then, the focus for both RWD and BAE Systems has been on sustaining these improvements. The learning and confidence achieved from proving that a new system of working could be successful in low-volume, highly complicated engineering environments was taken and applied across other strands of the business.

There were three key elements to sustaining the improvements made.

Firstly, it was important that the upstream and support functions were aligned with the operational areas of the business. Work is ongoing across finance, human resources, engineering and procurement, with the lean principles applied in these areas being exactly the same as those applied in operations. Value stream mapping is often used to initiate improvement, and methods such as ICOR – inputs, controls, outputs and resources – are used to standardise transactional processes to a more detailed level.

The second aspect to help sustain improvements is the TTP – the Transformation Toolset Programme.

This six-month learning and coaching programme offers three immersion weeks in a lean training environment – which includes classroom learning, simulation exercises and workplace practical training – which is then

carried over to six months of coaching that includes projects and handson experience. The programme is not just for those in operations, but for employees and stakeholders throughout the business, and it tries to encourage a more process-orientated approach in order to minimise the risk that arises from the business being too experience-dependent.

The third area of focus is on lean leadership behaviour – in particular, leadership support and mentoring.

Working with various levels of management in the business (team leaders, middle managers and senior managers), mentoring provides day-today support at a level where it is crucial that processes are disciplined and leadership behaviours maintained.

Published in association with: RWD Technologies 6250 Bishops Court, Solihull Parkway, Birmingham Business Park, Birmingham, B37 7YB, UK.

Tel: 0121 770 1011 Email: lvalentine@rwd.com www.rwd.com

Factory of the month BAE Systems Submarine Solutions

“We’re putting a huge amount of emphasis on our process training too. In conjunction with RWD we have developed a specific lean manufacturing programme, which we call TTP. This type of development has been heavily used by BAE Military Air Solutions at Samlesbury and Warton. We’ve tailored what they do to our needs, in Submarine Solutions,” he said. “It includes a huge amount of information and a lot of best practice examples.”

The fourth cohort will be going through it during September 2008.

The first week involves a lot of classroom work, before going out onto the floor and seeking out improvement opportunities. In week two, those opportunities will be identified, the value stream will be mapped and the third week will see the implementation of improvement – it has a lot of similarity with a kaizen blitz. “We’re getting more and more people involved and spreading the thinking.

People from engineering, as well as senior people, are getting involved – we’re spreading the ideas and influencing the company with them.” It’s a lot different from the improvement programme that failed in 1999, which introduced things like T-cards but had no depth to it. “People went away for a week and were sheepdipped through the process; it’s now a lot different, it has realism in it, depth to it and strong management support. We’ve learnt from some of our previous implementations but on boat three, we’ve introduced a different way of working, with the construction towers, vertical build and so on. It’s a different way of working and it may not be perfect – yet – but it’s more structured. It’s a new environment and that can help us to achieve better results.”

The investment in self-development is clearly paying dividends as BAE grow their own capability for improvement. The Nuclear Build Facility (NBF) project is of special importance. “This is the

first project that our teams have delivered from start to finish without any external support,” said Matt Anderson. “It has set a new internal benchmark for facility standards and I’m extremely proud of the team who have delivered this.”

Value stream mapping identified a huge opportunity for lead time reduction by re-organising the facility and creating an environment that befits nuclear pipe manufacture. The new facility has just become operational and the team are expecting a significant shift in safety, quality, cost and delivery. “I’m really proud of what the team here have achieved so far to drive improvements into the design, build and commissioning of a very complex product. The challenge to sustain this level of improvement throughout a lengthy multiple boat programme is significant but the rewards for all stakeholders in terms of buildability, affordability, quality, safety and schedule are well worth pursuing,” said Haydn Clulow, the operations director.

That’s pretty much a good summary for the whole of BAE Systems Submarine Solutions in Barrow-in-Furness: much better, and continuing to improve.

99

100

Automotive NSK Bearings

Destinyin their hands A business driven and major operational change has led to a shift in organisational structure at NSK Bearings. Steve Metcalfe and Gordon Cairns explain to Louise Hoffman how the workforce is now rising to this new challenge

In 2016, NSK Group – the global bearings, automotive component and steering system manufacturer – will be celebrating its 100th anniversary. But the company’s Peterlee bearings factory has already been doing some partying of its own, reaching the 30-year milestone two years ago.

One of the first of the Japanese inward investment plants to be set up, NSK Bearings Peterlee began operations in 1976 following some visionary top level thinking, which resulted in a firmly established NSK presence in Europe relatively early on in the manufacturing timeline.

“NSK deliberately decided to build the NSK business presence in Europe,” said HR manager Steve Metcalfe. “It wasn’t a case of waiting for OEMs in Europe to get business from NSK and then setting up a plant, this was NSK being quite far-sighted back in the 70s.”

Peterlee has felt the pressure, however, and eight years ago the plant was forced to

rethink its operations. “We were making a whole range of products, from standard size bearings you would typically find in a washing machine, through to automotive products, and it became very clear that we couldn’t compete in those standard size bearings. So the decision was made to move products that we couldn’t sustain to our sister plant in Poland,” Metcalfe explained.

And it was this strategic move by the Peterlee plant to become a solely automotive business that has triggered one of the most significant structural changes at the site to date.

“The redirection came at a cost – a very high investment cost, but also significant headcount reductions as well,” Metcalfe began.

“Turn of the century we were employing about 800 at the plant, and now we’re employing about 400,” and likewise, the 50-strong management team has been reduced to just 16 members.

“One of the things that was recognised, thanks to the far-sightedness of the manufacturing director in particular,” added performance management consultant Gordon Cairns, “was that, with that sort of reduction, we could not go on managing in the same way we always had and be able to maintain our high standards of quality, price and delivery.”

The route that was chosen to deal with this problem was the introduction of the self-managed teams model – defined as ‘a team of people working together to ensure the future viability of the

101

Looking to the future “The future belongs to organisations who respond to change most quickly” Change is an inevitable fact of business life. Ambitious organisations recognise that the best thing they can do with change is to quickly identify the opportunities it brings, align their people with these and set about reaping the benefits they offer.

GC Consultants provides their clients with the impetus they need to take control of their futures.

Our clients use us because they see measurable benefits from our work.

We help to bring calm where there is stress and uncertainty, refresh business thinking, establish their competitive edge and generate recurring revenues and increased profits.

102

Our approach comes from our belief that it is the ‘behavioural balance sheet’ of any business which is the single biggest factor in its success. We work alongside our clients to identify and implement key measures of performance which are tailor-made to their working style and the achievement of their strategic objectives.

We then introduce the changes necessary and make them ‘stick’ so that their benefits are realised in the shortest possible time.

In today’s volatile business climate, successful business need, intellectual horsepower, the capability to respond quickly to market

opportunities, the means to attune the hearts and minds of employees with the changes they face, and the confidence and excellence to achieve and to go on achieving.

This is the work which GC Consultants does for its clients – come and talk to us!

Published in association with: GORDON CAIRNS GC CONSULTANTS Tel: 0161 2782490 Email: gac@gcconsultants.org www.gcconsultants.org

Automotive NSK Bearings

business’ – which calls for groups of workers to make their own decisions as a team in the day-to-day operating of their part of the manufacturing process and to take responsibility for the outcome, while the management staff move from a tradition ‘tell and do’ approach to one of support, acting as a resource for the team.

“We chose this because of the structure of the site. Many of the workers here have 10, 20, sometimes 30 years of skill, so we have got a tremendous amount of expertise and we have got to harness their ability,” said Cairns.

“They are experts in their field and don’t need to be told what to do, but they need a supporting model that helps them get the best performance, removing obstacles and supporting them in achieving their team objectives,” Metcalfe added.

The implementation of this new structure has come as part of a wider project, entitled ‘Destiny is in our Hands’ by the manufacturing director in order to remind people that what they do today is directly contributing to the future success of the business – an idea central to the workings of the self-managed team model.

The help of Cairns – owner of GC Consulting and long time associate of NSK Bearings Peterlee – was enlisted in rolling out the new strategy as Metcalfe explained: “Once we had come up with our definition of a self-managed team, we contacted Gordon, who has a relationship with the plant going back some 20-plus years and had helped us develop our supervisory programme back in the 1980s and achieved national training awards during that process.

So this relationship made it a lot easier for Gordon to respond to this new challenge.”

The management team were taken offsite for several days of strategic discussion and training before embarking on this journey of change. “They had to understand the implications of working as a resource for a self-managed team as opposed to just telling a team what to do. It has implications for control – about how you use your authority as a manager,” said Cairns.

The team were coached on the three primary areas of responsibility they were now to adopt, which were: promoting responsibility within people, promoting awareness within the business, and promoting self -confidence. “When people have been dependent upon being told by managers what they’ve got to do for a lot of years, they lose selfconfidence,” Cairns explained. “They know what needs to be done – they’ll tell you that straight away – but actually having the confidence to do it when there’s no one else around, that is something different.

“Managers are now door-openers – or rock-rollers as I call them – because if there is a rock in the way of a team, the team can use the manager as a resource and say, ‘can you please go and see so-and-so and get this obstacle removed?’”

The journey of change has, as Metcalfe and Cairns point out, been a recognition within each individual of the way in which his or her behaviours can affect a process, and how a change in those behaviours, likewise, can improve that process. Indeed, as one Peterlee manager commented, “choosing and using the wrong behaviours as a manager was like putting sand in a gearbox – it would still work, but the effort to produce the desired results would become so much greater, and so much less could be achieved.”

And the adoption of this principle by the manufacturing director himself has been key to the success of the project so far. “This has been a major breakthrough because, when you get someone who is enlightened and is open to change and realises its importance at that level in an organisation, it provides a tremendous example to the workforce,” Cairns enthused.

Results have already been seen, primarily on the shopfloor which has seen real changes already. Managers now have time to plan and introduce measures aimed at making the Peterlee plant internationally recognised as a centre of excellence.

“What we’ve done with the self-managed teams approach is to form an agreed standard for shopfloor condition, and it has transformed the look and feel of the factory in just a few months in terms of 4S condition,” Metcalfe explained. Not only this, but plant performance continues to improve to an impressive degree, with over five per cent productivity improvement achieved per year, a manufacturing cost reduction of four per cent per year, and a PPM of less than five parts per million.

Going forward, “the biggest task for us I think is to get all the characteristics of the selfmanaged approach across our production areas, as well as our support function areas, so that it is a plant-wide approach,” said Metcalfe. “We need to learn to walk before we can run, but we have an extensive supply chain and I can immediately see a huge amount of benefit by influencing their organisational approach, and indeed the wider organisation of NSK Europe. But we need to get it right for ourselves first.

“As Gordon and I said at the beginning of the year, it’s a bit like, when you’re considering this level of change, you’re holding a balloon full of helium, and that balloon represents the level of change you are going through. We didn’t want to let go of it until we were sure we had the right plan, the right resource, the knowledge and understanding we needed. But what we’ve done over the last six months really is to let go of that balloon. So far it’s going really well, but we still have things to do – we’re not finished yet!”

Cairns concluded: “Part of the evolution of NSK and one of the key factors in its success over the last 32 years and into the future is that it’s not complacent Premium People Group and is certainly not insular Premium People Group – it’s outward looking and has assisted NSK and other always responsive and premier manufacturing seeking a better way. It’s organisations with their sort of the embodiment total resource needs. Our of all of the continuous approach to supplying improvement, kaizen and permanent employees, kanban philosophy. temporary resource and continuous training and development has proved “It reminds me of to be invaluable. Sourcing Rosabeth Moss Canter high calibre individuals when she said “giants through innovative and fresh learn to dance” – well, processes is market leading NSK Peterlee isn’t quite and something that we a giant, but my word, continually review to meet it certainly is nimble on the needs of our clients. its feet!”

103

104

Subsea technology JDR Cable Systems

Taking the world

by storm JDR Cable Systems has taken advantage of the growth in renewables and the oil and gas market to record a £50 million pound turnover. Mark Young takes a closer look at the company dubbed “the vital connection”

JDR Cable Systems provides the

subsea technology which supplies power from offshore wind turbines and between oil and gas platforms. With its British base in Ely, Cambridgeshire, and further facilities in the USA, Holland, Thailand and Norway, the firm’s cables are employed at the leading locations for each respective industry across the globe. Ninety per cent of its products are used outside of the UK. The company began 35 years ago making umbilical cables carrying air to divers in the emerging shallow water North Sea oil industry.

As the technology and financial stakes of the oil and gas business swelled rapidly over the years, JDR followed suit to stay relevant in an increasingly lucrative and demanding market.

105

Subsea pumps are the modern tool of choice for extracting oil, so instead of supplying air for the divers, JDR now supplies electric cables to power the pumps. In a similar fashion, the firm has capitalised on the emerging renewables market, moving the electricity in the opposite direction.

Turnover for the firm is now approaching £50 million after registering 40 per cent year-on-year growth in its recent history. The rise from a figure closer to £20 million two years ago has largely been accredited to the benefits of setting up camp in south-east Asia – a move initiated by managing director Patrick Phelan. He was this year named Cambridgeshire’s ‘businessman of the year’ by the city’s Evening News newspaper.

The cables JDR produces, known as arrays, link offshore wind turbines to an offshore sub-station and to each other. It also plans to manufacture the export cables that connect the offshore wind turbines to the shore and then onto the national grid – a development Phelan said he hoped would be in place within three years. And

106

the company also makes the terminations – the technology for fitting the cables into a junction box at each end.

In terms of after-service, the firm has a team of offshore service technicians who are available to travel anywhere in the world at any time. They travel to provide repairs, assist clients in troubleshooting and to supervise installations.

Arrays for wind turbines are usually between half and one kilometre in length, but can be up to five kilometres. For the oil and gas industry, though, cables can be required to be more than 10 kilometres long. These need to be made in one piece, fault-free, with no joins – and they need to be made well. “With the cost involved in ripping these cables up once they’re installed, along with the losses through downtime of oil companies unable to operate, mistakes aren’t just an inconvenience; they’re virtually not an option,” said Phelan.

“We are the only subsea cable manufacturing company in the UK with the technology and facilities to design and produce these offshore wind farm cables”

Subsea technology JDR Cable Systems

“So we have to get it right,” he continued. “When we make them and when they are installed, efficiency is non-negotiable.”

In view of this, the firm has implemented a strict 5S programme for its processes and operates statistical process control to constantly monitor the performance of its machines.

One project the firm is currently undertaking is to supply the array cables for what will be the world’s biggest offshore wind farm. One hundred and forty turbines strong, the venture, known as Greater Gabbard, is to be located in the North Sea, off the East Anglian coast, in JDR’s proverbial backyard. Onshore work began in July this year in the village of Sizewell, home to the two locally infamous nuclear power plants. The site is due to phasein operations from 2009.

JDR is in the process of building a new 100,000 square foot factory in Hartlepool which will principally focus on the offshore renewables market. The County Durham location was chosen as it is set to become the central hub of all round two and three wind farms. The plant’s secondary focus will be to manufacture the subsea cables and umbilicals supplied to the oil and gas industry. The production lines will begin to roll early next year and the site will boast 80 staff.

Phelan revealed JDR has profited from a touch of good fortune owing to the time period in which the renewables market emerged. “Ten years ago, there were three major subsea cable manufacturers with quayside facilities around the UK: BICC, AEI Cables, and Pirelli. They all closed down five to six years ago before anyone could see the rapid growth in offshore wind farms coming,” added Phelan. “We kept developing our technology in that period and now with our Hartlepool facility we are the only subsea cable manufacturing company in the UK with the technology and facilities to design and produce these offshore wind farm cables.”

Renewables now stand to play a massive part in JDR’s future profit margins. “With governments here and across Europe making

massive commitments for a high percentage of energy to come from renewable sources, it’s very important for us as a company to continue to make investments and remain leaders in the industry,” said Phelan. “Every new wind turbine needs at least one cable with two terminations, so it’s important that we’re setting ourselves up to be best placed to provide those.” It is estimated that around 7,500 offshore wind turbines need to be in place by 2020 in the UK alone if EU targets for renewable energy sourcing are to be met. There are currently 149 in operation.

But a lucky break is one thing; making the most out of it is another. And like meeting the needs of the wind turbine industry early on, spotting opportunities in the oil industry has been of paramount importance to the company’s growth. JDR has been working on improving its technology so that its umbilicals can operate at deeper water levels, withstanding more pressure and higher temperatures per diameter of the cord compared to those of competing firms. Phelan said that anticipating oil companies’ need to source oil from deeper wells and investing in innovation to support it has been a vital factor in the firm’s current fortunes.

So, thanks to continued innovation, some savvy foresight and a slight stroke of fortune, JDR Cable Systems is now “the vital connection” according to Patrick Phelan, and while it is in the business of delivering power, it’s also building up a fair share of its own.

107

Automotive Auto Windscreens

Destin ati o n: world class Louise Hoffman catches up with Tony Fitton of Auto Windscreens (part of the RAC) to hear the latest on the company’s journey of improvement

We last spoke to Tony Fitton of Auto

Windscreens in January 2007, at which point the firm was planning an impressive improvement programme, with the aim of becoming a world class manufacturer. Rejoining him now, getting on for two years later, the extent of the operational developments that have been made during that time become immediately clear.

“The business has been through an organisational change and has put the supply chain under the same umbrella as operations and customer services and deployment. And I am now a part of that structure – head of supply chain operations,” Fitton explained. “I’ve picked up our national distribution centre that is based in Aston in Birmingham, with a focus on aligning the supply chain to deliver superior customer service,” he added.

As the only automotive glazing services provider to actually manufacture its own windscreens, customer service is of course the foundation stone of the firm’s operations, and, especially in Fitton’s eyes, it ranks highly on the continuous improvement agenda. “We have seen our availability significantly improve just by tapping in to the knowledge and experience we have in the supply chain,” he enthused. “We now view our customers in the network as key, and I think what we are seeing is a cultural change and a real focus on the customer service we offer.”

a housekeeping and quality perspective that worked through implementing 5S and looking at our hygiene on the site – something you probably wouldn’t associate with a windscreen factory!”

Indeed, benchmarking has been a tool of choice for Auto Windscreens, especially when laying out its main objectives. Dupont, for example, inspired the firm in defining its safety plans, Siemens for its right first time achievements, and Cadbury for its environmental considerations. On the safety side of things, it is now 580 days since the company experienced its last lost time accident, “and I think, bearing in mind my team handles over a million pieces of glass a year, that’s a significant achievement.

“We have seen our availability significantly improve just by tapping in to the knowledge and experience we have in the supply chain”

Another component of Auto Windscreens’ agenda as it embarked upon the world class journey was quality – linked very closely to service. “We now have a zero tolerance approach to defects, where normally within the industry it takes two or five per cent before the defect is investigated,” Fitton explained. “And in our business we investigate every single piece of feedback we receive from customers, looking to try and improve the process.”

“We’ve done that by listening to the team – listening to the expertise that’s there – creating an on-site health and safety team, and developing and implementing a safety calendar in every area. Discussing safety is now top priority on a daily basis.” Lean has also played its part in this safety programme as the company has used 5S to drive the improvements. “Going forward, we’re also in the process of implementing a formal TPM process,” Fitton added.

To highlight the importance of quality in achieving world class status, the firm took a group of its workers to visit Bakkavor in Lincoln – a supplier to M&S Foods. “The standard of their health and hygiene is impeccable,” said Fitton. “We transferred that into our factory, purely from

The company is also taking responsibility for its impact on the environment and has in fact been commended by the Environment Agency for its yearly packing regulations process. A watchful eye is now kept on water and energy usage, and all cardboard, waste glass, paper,

109

Auto Windscreens

plastic, wood and metal is recycled. “We just use a very simple baling process for all of those – the team members themselves assessed and chose the baler they wanted to use,” said Fitton. “We have also brought in a number of other local businesses and we have set up agreements which, in particular, have helped us with that recycling.”

‘People’ is the final point on the Auto Windscreens world class agenda, and Fitton recognises that none of the developments at the factory could have been achieved without the dedication of the workforce. “I’ve got a fantastic team, and their commitment, their flexibility – I couldn’t buy that, and I couldn’t train it in. And that is how we have made the improvements we have.”

Partially in recognition of this fact, and partially to continue to foster the positive culture, the company has introduced various schemes to benefit workers and operations alike. A focus on training has seen the firm’s health and safety specialist qualify as a lead auditor, in line with BSI standards, and begin work on a NEBOSH diploma; and a team of 12 employees have just achieved an NVQ level two in business improvement techniques, “which builds on the foundation of 5S and starts to work them through some SMED (quick changeover technology) training, some basic maintenance techniques, and some basic problem solving techniques as well.”

A new in-house manufacturing academy is also about to be unveiled, which will provide computers and a study area to those wishing to embark on Learning & Skills Council online

110

training, or to achieve their European computer driving licence.

“This is to be located in, would you believe, the old smokers room – turning a negative into a positive!” Fitton mused.

A suggestion box scheme – ingeniously advertised by a mountain bike prize hung from the factory ceiling with a sign asking for ‘Any ideas?’ attached to it – has proved of huge benefit. “Typically what you find with these schemes is that the box will end up containing either sweet wrappers or derogatory comments about the management. But thankfully we’ve had none of that!” Fitton laughed. Instead, he has received consistently, and on a monthly basis, almost one suggestion per person, many of which have now been implemented, and with bikes duly awarded.

In many ways, perhaps the most telling statistics of the whole Auto Windscreens world class project so far have been those relating to workforce morale: staff turnover is set at zero, overall attendance in 2007 came in at 97 per cent, and 35 per cent of Fitton’s own team achieved 100 per cent attendance.

“We focus on those who attend and send them a written thank you at the end of the year. One of the guys stuck the letter I had sent him to the wall and wrote on it ‘worth more than money’. That is the culture of the operation,” he smiled. In conclusion, Fitton assessed the firm’s current position on the objectives map. “We are a year down the line now, and I think we definitely have the foundations in place to become a world class manufacturer, though we still have some way to go.”

The destination, it would seem, is certainly on the horizon.

Foreword BSA

This year, more than 11 billion sandwiches will be consumed in the UK, of which almost three billion will be made commercially, generating revenue of around ÂŁ5.25 billion.

Jim Winship discusses the role of the British Sandwich Association in this fast growing market

The British

Sandwich Association, which was formed in 1990, represents a large part of this market, providing technical as well as marketing support for its members who include all sectors of the industry, from supermarkets and manufacturers to sandwich bars, caterers and the suppliers of ingredients and equipment.

legislation to labelling and salt levels.

And, being such a popular product with consumers, the sandwich is increasingly cited as the most quotable example by the media which makes the Association’s role something of a rollercoaster ride at times.

Sandwich manufacturing forms a major part of the industry and has been at the forefront of developing systems for handling very short shelf life food products. Packaged sandwiches generally have a shelf life of only two to three days from time of manufacture, which requires highly efficient and disciplined manufacturing and distribution systems. Indeed, the UK industry leads the world in this area. The Association is now working to help the industry take advantage of this by encouraging the export of this know-how to other markets where sandwiches are gaining popularity.

One of the foundation stones of the organisation is its focus on food safety and the accreditation scheme that now underpins the industry. Introduced in the early 1990s in response to food safety issues, the BSA Codes of Practice have become widely accepted as the minimum standards for making sandwiches, and the Association is currently working with the Food Standards Agency to establish the principles of these codes into formal industry guides. The first, on sandwich manufacturing, is expected to be At the same time, the Association published in the winter. continues to work with its members to The Association believes that no help advance and protect the integrity of buyers in the UK should be accepting the market in the UK. For example, it will lower standards than those in its shortly be launching a comprehensive Codes, which is still not always the training programme for people working case although all major buyers now in the industry which is being designed specifically for the industry. firmly support them.

Another role for the Association is representing the sandwich industry with the Government and the wider world over issues that affect it – and, given the processes involved and the huge spread of ingredients used to make sandwiches, that covers an array of different issues, from gang master

111

112

Food & beverage The Sandwich Factory

fare First-rate

A fast-growing supplier of specialist sandwiches to bluechip clients, The Sandwich Factory is building on the expertise and commitment of its staff to drive excellence through all levels of the business, as Becky Done found out from operations director Paul Nicholson

Founded in 1995, The Sandwich

Factory Ltd (TSFL) manufactures and supplies a range of food products to over fifteen major clients, including high street retailers, national petroleum companies, transport providers and those in the food industry. In addition to its main, Atherstone-based site, TSFL also owns two other facilities in the vicinity, including a self-contained production site, Cranford Foods. The latter has enabled the company to further diversify its offerings, which currently range from traditional ‘cold eat’ sandwiches to salad pots, in addition to a selection of frozen products.

With continued expansion of the product range taking place via innovative new product development from the company’s development theatre, the factory now produces 600 different products each day and a total of 750,000 units each week, with capacity for up to 1.4 million. The company turned over £34 million last year and aims for growth of five to 10 per cent next year to produce turnover in the region of £38 million.

113

114

Food & beverage The Sandwich Factory

Much of TSFL’s success to date has been achieved as a result of its committed workforce.

The company places great emphasis on retention and staff development, and works hard to ensure that all 500 employees are fully equipped to meet the needs of the business. A range of training programmes is on offer, including a qualification to NVQ level, which staff are financially incentivised to undertake – an element that operations director Paul Nicholson sees as important.

“People have a financial incentive to make that qualification,” he explained. “It’s not just about bettering the business; we recognise it in a financial form as well.”

It is initiatives such as these which Nicholson feels contribute to a strong sense of teamwork at the company, and which also make staff feel that they are involved in meeting the wider business aims. “We certainly do have committed people in our business and that ranges from management to shopfloor. We have some very long-standing staff – some of whom have been here since day one in 1995,” explained Nicholson.

“It is a culture we try to breed in terms of involving our people in all aspects of the business, from the decision making of where we make investment, to where we can do things better by empowering our people. You get the benefit of that but also it’s a two-way thing – they feel part of an organisation that does care.”

TSFL also ensures that, in addition to provision of training, additional benefits such as performance bonus schemes and subsidised canteen facilities are on offer to all staff.

The technical expertise present within TSFL was recognised in March 2003, when the company was awarded the higher level of the BRC accreditation, demonstrating its excellence within its field. The company continues to be committed to using a mixture of manual and automated production processes as it expands and grows, but is always on the hunt for new technology that could assist in continuous improvement, as Nicholson explained: “We are constantly exploring new technology that comes into the marketplace and we evaluate whether that is right for our business in terms of making the investment. And that’s ongoing.”

The company also has a number of lean initiatives in place, including supplier JITs and some kanbans. “We run lean initiatives throughout the business and we have definitely benefited from that,” stated Nicholson. “I think that’s also part of the reason why we have a committed workforce – they can see opportunities and targets, and are able to embrace those and feel very involved.”

As a major employer in Atherstone, the company takes its responsibilities as a local employer seriously. It is a contributor to the town’s cricket club, and is also committed to partnerships with local schools: “The children often come into the factory for tours and, of course, a sandwich!” said Nicholson. The concept of partnership is central to the company’s ethos and the way it conducts business, with suppliers and customers considered very much as partners. “We do regard these things as a partnership,” Nicholson emphasised. “Whether it’s a supplier or a customer, it is a partnership.” This approach translates into a strong focus on excellence in customer service. “The customer is king, and customer service is part of a very important KPI for us. We have to meet very high standards to maintain and grow our business with those customers,” he said.

The company was recently acquired by Hull-based Cranswick, a deal which has enabled TSFL to focus on all of its key business objectives, and to enjoy the growth and expansion that has resulted from doing so. “We have seen absolutely fantastic support from Cranswick,” stated Nicholson. “They are very supportive in what we do as a business when it comes to capital investment. We have had 100 per cent commitment from them.” Among other things, the acquisition has facilitated significant investment to take place, with £1 million having been invested over the past 12 months and additional investment

“The customer is king, and customer service is part of a very important KPI for us. We have to meet very high standards to maintain and grow our business with those customers” planned for the near future. To date, the extra cash flow has allowed the purchase of further refrigeration equipment and storage facilities, enabling the company to make significant savings in energy costs.

Energy and the environment is a major consideration for TSFL, and the company employs a number of innovative methods to enable it to fulfil its green commitments. The use of electrolysed water for sanitation on site has allowed the company to enjoy cost savings in terms of its chemical loading, as well as reducing its impact on the environment.

Looking to the future, Nicholson has a vision for how the company should continue to differentiate itself from the competition. “We like to show innovation in our products, and to support that with good marketing. We always strive to deliver quality products at the right price with a fantastic service level. That gives us the edge,” he concluded.

115

Cromadex Cromadex is part of AkzoNobel, the world’s largest coatings manufacturer, and is a supplier of wet paint and power coatings to Central Metal Manufacturing Our expertise is in colour, textured and special effect coatings, as well as corrosion protection and customer specific paint systems. We specialise in providing superior levels of service to both the paint user and specifier throughout Europe. We provide a local service, though our 10 centres across the UK, delivering stock products to you the next working day.

Our product offering includes rapid response, small quantity ‘match and make’ on wet paint and powder, antigraffiti coatings, defence coatings, five kilogramme powder boxes, aerosols and touch up pens. As a company

116

we are committed to products that minimise environmental impact and we actively advise on best practice in safe coating application.

Extra Life is a programme of coatings systems that offers product protection for up to 25 years for wet paint and up to 16 years for powder coatings.

These systems have been developed to protect against a wide range of environments, from the interiors of heated buildings to much more aggressive external situations such as industrial or coastal areas.

We have a huge colour database with over 10,000 colours on record.

We supply British Standards, NCS, Pantone and RAL colours and can colour match specifically for you.

Colour matching facilities at each of our centres allows your requirements to be turned around quickly and efficiently.

For more information please call (0121) 555 1500 or visit www.cromadex.com

Published in association with: CROMADEX Tel: 0121 555 1500 www.cromadex.com

Metal CMM

Turning

metal intomoney In early 2007, Ashley Crump, Jonathan Handford,

By the end of 2009, the owners of Central Metal Manufacturing hope to have almost doubled the turnover of the company they took over just three years ago.

Mark Young discovers how success can be found in spotting the right opportunities

Kevin Stant and Steve Ford purchased an underperforming sheet metal manufacturing business. The business had fallen upon hard times due to unforeseen changes in the markets in which it was predominantly operating. Potential opportunities were identified by diversifying the company’s product range to meet the needs of a migrating industrial and commodity-based metal production market.

Central Metal Manufacturing is now in full flow, with Crump handling finance, Stant supply chain management, Ford in charge of production and Handford taking the role of managing director. The company is able to offer a complete service, with steel sheet punching and laser cutting, folding, fabricating, assembly and painting capabilities. It delivers a diverse range of products, taking sheet metal through the entire treatment process. Current products now range from supermarket pointof-sale displays to crushing equipment; from machine guards to refrigeration bodies; from diesel engines to Swarf conveyors; electrical enclosures to industrial cabinets and chassis. If the firm does have a focus, it’s size. “We have no interest in producing large volume, small sheet metal parts that could be imported more cost effectively from China,” Crump explains, “Our focus is on producing larger fabricated assemblies from steel sheet to the finished article to satisfy our customers’ needs.” And that’s CMM’s niche.

117

118

Metal CMM

A further element of the firm is the design service it offers. It works individually with clients and offers a tailored service to provide exactly what is required. In addition, it sub-lets this design resource to companies in the UK and overseas, effectively offering a contract service to create designs from the facility in Leicestershire and to sell these globally for manufacturing elsewhere. This allows clients to combine the best of British engineering with the advantages of local sourcing.

To complete the service portfolio, CMM offers VA/VE consultation (value analysis/value engineering). “Customers may approach CMM to develop cost down initiates for their products, and we offer support to develop ideas to ensure the customers’ end product is more competitive in the marketplace,” explains Crump.

The company employs 180 staff across three facilities on an industrial estate just outside Leicester. But that figure could well be out of date by the time you read this, as it is adding to its ranks all the time.

This personnel expansion in the face of the current global financial unrest is something Crump considers to set the firm apart from its competitors.

CMM is ambitious and it is keen to let that be known through its rapid expansion.

And another measure of that is turnover.

Set at £8 million when Crump and co took over 18 months ago, the company then pulled in £10 million in the first year under the new shareholders’ lead. Now the firm forecasts close to £12 million, and next year they aim for £15 million.

Crump is confident that one way this can be achieved is by exploiting opportunities that arise in the metal commodities industry specifically and world economic developments in general. One such strategy CMM will follow is to take advantage of the stronger euro and vastly inflated fuel costs to take on domestic clients who currently source supplies from eastern Europe.

“Eastern European suppliers are not as cost effective an option as they once were – and we feel that this will give rise to opportunities for companies prepared to exploit this,” said Crump. “I think you will see more business moving back to the UK from eastern Europe over the coming years. We have to be at the forefront of that development, and can offer our UK customers a better service than our eastern European counterparts. We can be more responsive, as well as now being able to compete on price.”

When they took over, before giving the dust a chance to settle, the new shareholders decided to sweep the old cobwebs away.

They put the entire workforce through

a Train to Gain programme which was centred on business improvement techniques. Upon completion, all of the staff were brought up to NVQ level two, and some NVQ level three. The main focus was on continuous improvement and that’s the culture Crump says is now well and truly instilled throughout the firm.

“In every aspect of the business we want to continuously improve. That way we can offer a better service to our customers, we become more efficient and we offer a better price – and that means we stay competitive. So whatever we do we drive that into our employees, under every aspect.

So not only in production but across every aspect of the company,” he said.

Crump staunchly subscribes to the notion of investment in people. He believes one of the key factors in the firm’s success has been its ability to recognise the skill sets each member of staff possesses, and areas of potential to be nurtured.

“We strongly believe we have a very skilled workforce and we know that we need to invest in them to improve them further, bring them forward and thus make the company more effective and more efficient,” said Crump. On managing skill sets he reiterated it’s about finding the right person for the right job. “We do have a skilled workforce, and we are strengthening our team from external recruitment, and identifying personnel who have management potential and developing those individuals so that they become an integral part of our business,” he added.

In addition, the firm has links with North Warwickshire College through which it offers part-practical and part-theoretical onsite apprenticeships.

Communication throughout the ranks is another factor Crump attributes to the rising stock that CMM is enjoying. Teams are kept small, with team leaders reporting to facilities managers who in turn report to the directors. A monthly newsletter is sent out to the staff and three directors each address one of the three facilities on a rotational system, also on a monthly basis.

One thing Crump isn’t as satisfied with is the support structures available to manufacturers in differing areas of the country and differing sectors of the industry. “I would like to see more support in the east Midlands for manufacturing firms. In the west Midlands there has generally been more support for firms, particularly in the automotive sector, in the form of grants and management support,” he said. “It’s disappointing that there aren’t more schemes across the board to support companies Ingredient Solutions willing to invest in UK manufacturing.”

With a factory based in the heart of the cheese Overall, reflecting on the company’s producing region of Ireland, prospects, Crump says: “Care is always Ingredient Solutions Ltd required when a company has ambitions supply block, grated, of growth; it’s important to grow at the right shaved, diced, crumbed and pace. But there are certainly opportunities blended cheeses as well out there that we want to position ourselves as other dairy ingredients to take advantage of.” He adds that he and to customers in the UK, his firm are “positive about UK manufacturing Ireland and Europe. We and its future prospects despite the many pride ourselves on offering negative reports surrounding the economy. top quality products at There are always winners and losers in competitive prices. We times of such uncertainty, and the strategy are big enough to cope, we’ve adopted will ensure that we are on the small enough to care, keen winning side!” And why wouldn’t they be? enough to compete.

CMM’s future looks as safe as steel.

119

Fresh thinking Traditional packing methods can be highly inefficient – picking errors, double handling and unproductive walk patterns are some common issues facing most distribution management teams. None can be successfully tackled using traditional, paper-based models – what is needed is an entirely new way of looking at picking and packing And this is precisely what Loopthinking provides.

The company has designed, developed and manufactured an entirely new system for warehouse operatives to pick and pack all manner of products directly into dispatchable cartons. The concept was born out of some discussion groups chaired by Ian Farnell of Opsol, who realised the frustrations that Cambridge University Press (CUP) was experiencing with double handling, which led him to approach Phillip Parfitt of Packrobat – an associate with over 10 years of experience of handling and packaging books and multimedia.

In 2006 they formulated the theory and the concept design, upon which the core Loopthinking products are based, before forming a Limited Liability Partnership at the beginning of 2007. Two prototype mobile picking stations (trolleys) were manufactured in 2007, and after extensive trials and development work with CUP, the first 13 units were delivered and integrated. Ian Bradie, distribution director for CUP, explained: “We have already seen significant productivity gains in our picking process.”

The mobile unit comprises a lightweight, extruded aluminium framework, with all materials specified and supplied by Bosch Rexnord, and each trolley can be tailored easily to suit specific aisle widths and carton sizes. The trolley holds an on-board PC (RDT) and a scanner, both of which are standard off-the-shelf products that are easily integrated into the overall system.

The concept involves a warehouse management system (WMS) processing order instructions and sending the picking data via radio frequency to the RDT, which is received by the operator as on-screen text – although Parfitt says that voice recognition is a viable option to on-screen text. The RDT in turn communicates with the trolley’s own programmable logic controller (PLC), which is responsible for controlling the pick, to light sequences that the operator is required to follow – basically each carton position has its own local push button LED light.

Loopthinking is designed specifically to make the picking and packing process as efficient as possible. To use the CUP installation as a model, first, the trolley is loaded with up to 16

120

empty cartons. Each carton contains a unique bar code, which in turn is scanned and assigned to a dedicated position on the trolley. The WMS uses this knowledge together with its understanding of product locations in the warehouse, and sends the first wave of order/picking instructions to the RDT and, within the data, calculates the shortest walk pattern for the picker to take. The picker will then be sent to the correct aisle, and then to the correct shelf location, where upon arrival the quantity to pick will be shown on screen.

As each product is scanned an LED is illuminated corresponding to the carton that requires the item. If it’s the wrong product in the location, or the picker has picked from the wrong location, then the system will show ‘error’ and will not carry on until the problem is rectified. As the item is placed into the correct carton the operator presses the LED to remove the light. On completion of the location pick, the trolley will then instruct the picker to move to the next nearest location within the overall strategic pattern. When a carton is full (order complete) the corresponding LED will continually flash, informing the picker that the carton is ready to be dropped off at the conveyor belt taking it to the finishing station. If the picker is not best placed to do so, he or she can continue filling the other cartons until the conveyor belt is nearby; but the system will continue to remind the picker that the carton is ready to go. Once the carton has been deposited, a new carton is scanned and inducted into the system.

The WMS will then recalibrate the most efficient route, taking into account the

Warehouse equipment Loopthinking

existing orders in process and the newly inducted order. The picker will always walk to the strategic pattern. As Parfitt explained: “It’s rather like the circle line on the London underground – some people could travel the whole loop (rather pointless, but it’s a good analogy!), while the majority will hop on and off within a few stops.”

The advantages to the warehouse are threefold, according to Parfitt: “The WMS will always calculate the shortest walk pattern so time is always used to maximum effect. Second, the cartons on the trolley are the cartons that are actually dispatched to the customers, so there is no double handling. And third, traditional warehouse operations are likely to involve operatives leaving the picking area to deposit full trolleys at a packing station, then pick up an empty trolley and a new picking list etc.

This meant they were temporarily inactive.

With Loopthinking, the picker never leaves the picking zones, so downtime simply doesn’t exist. Equally, at shift changeover, the outgoing picker logs off, the incoming picker logs on and the pick process stays continual.”

The system can be used across a number of industry sectors where picking and packing are integral to the business, for example, books and multimedia, pharmaceuticals, stationary, small components, cosmetics and retail display packs. The system is best suited to medium-sized operations that have a high number of SKUs but a low volume pick demand per order line. High volume order processing may be best achieved with conveyor systems where the operatives are stationed in zones and the orders are transported to each zone for product insertion. But in almost all cases there is a significant tail of products that do not have volume to justify this level of investment or space. This is where Loopthinking comes into its own.

Bosch Rexroth AG Bosch Rexroth AG, part of the Bosch Group, is one of the world’s leading specialists in the field of drive and control technologies. Under the brand name of Rexroth the company supplies more than 500,000 customers with tailored solutions for driving, controlling and moving machinery used in industrial and factory automation as well as in mobile applications.

The benefits to the business are both tangible and fundamental. Labour costs are reduced as fewer picking and packing operatives are needed for the same output, while accuracy can be increased to 99.9 per cent plus. And, according to Parfitt, the above benefits are coupled with a potentially very healthy return on investment, in some cases in around 12 to 18 months.

121

Evolution for revolution The printing industry never stands still. Kevin Rogers explains to Louise Hoffman how constant reinvention has allowed Elanders Hindson to stay ahead of the game

The company we now know as

Elanders Hindson began life in 1880 as a family-owned traditional print business called John William Hindson, based on the Newcastle Quayside. The firm was first bought by Ferguson Industrial Holdings, and was then taken over in 1999 by its present owners – the Swedish printing and publishing firm Elanders.

“By that time we had moved into a brand new, purpose-built 85,000 square foot factory, and were effectively delivering an end-to-end service to customers, from DTP services, programming for desktop publishing, electronic publishing services and print production, to storage and distribution,” said development director Kevin Rogers.

This rapid and major evolution, which would probably have the original Hindson family turning in their graves, tells a much

122

wider tale of an industry sector that has been forced into constant reinvention by an ever-advancing world, and hence an ever-changing customer demand – otherwise known as the digital revolution.

Indeed, parent company Elanders has a similar story. The firm started out 100 years ago as a telephone directory printer, but lack of demand for printed material lead to the sale of its main directory plant in 2007. “To sell the factory off as we did was a major decision, but it was part of the evolution because of the change technology is forcing on our industry,” Rogers explained.

But this is by no means a sad story – on the contrary, Elanders has most certainly risen to the challenge. “If we go back to 2006, we turned over £14.3 million. This year we’re going to be turning over £17 million,” said Rogers. “The main reasons for this are growth from existing business – offering additional services – and through winning new customers, because there are very few real like-for-like competitors to Elanders in the UK. Other companies offer the same service but they will outsource – whether it’s the print, whether it’s the design, whether it’s the publishing services – whereas we do all of that in-house under the Elanders umbrella.”

Printing

Elanders Hindson

“The FSC side of it really helps us to help our customers to be more environmentally aware and responsible. It’s all about the chain of custody so that you can prove the paper material that you’re using is coming from a well-managed forest – for every tree they chop down, they are replanting another and replenishing the materials they are using to make pulp for paper,” Rogers explained.

The green measures the company has adopted have not only been beneficial to the environment; they have also proved invaluable to its continued operational success. “Customers, especially in the public sector, are becoming more aware, and they want their suppliers to be environmentally conscious. [Nowadays], you’ve got to have certain standards to even be considered for doing any business. I can think of two or three organisations where, if we didn’t have the environmental credentials, we wouldn’t have got the contract,” he commented.

Developments in the company’s service offering have included reduced lead times and the implementation of a multi-channel publishing system, allowing printed material to also be published direct to the customer’s website. “Given the move towards the internet for people looking for information, this means the information on the website is as updated as it can be,” Rogers pointed out.

“What we’ve seen is a reduction in volume. If someone was, say, producing 70,000 copies of a prospectus or catalogue, they now have an online presence as well, so they’ve seen a decline in the request for printed literature. We have been able to produce the printed version for them, at a reduced quantity, but we’ve also been able to complement that by putting that same information onto the internet for them as well,” he elaborated.

And change has not been limited to just product – growing environmental concerns have, arguably, impacted the printing sector more than any other, given its reliance upon gas, electricity, paper and inks.

Once again keeping up with the times, Elanders Hindson now recycles 80 per cent of its waste and uses vegetable-based, rather than chemical-based, inks in its printing. It gained the ISO14001 environmental standard in 1998, going on to achieve the increasingly sought-after FSC (Forest Stewardship Council) accreditation in 2006.

The company is now looking into the idea of going carbon neutral, as one of the Swedish Elanders divisions has already achieved, and the firm’s environmental manager is actively pursuing the EMAS European standard.

The negative effects of the changing industry are, sadly, all too evident when it comes to recruitment, with Elanders Hindson often scooping up the redundant employees of other firms that have been forced into closure. “In the north east area where we are based it used to be a real hotbed for print, but recently there have been a number of companies that have gone out of business, purely and simply because this is a very tough industry to operate in if you are solely a print company,” said Rogers.

But for Elanders, the issue of workforce has been another area at which to target improvement. An apprenticeship scheme is currently in operation in the litho print department, and an on-site training manager regularly assesses and answers the training needs of employees. The MD has also implemented a management training programme: “The aim is to develop a highly effective team of senior and middle managers, but also to give the managers the chance to succeed and to make sure they are trained and qualified to get the best out of their teams.” Indeed, the firm is even in the process of applying for Investor in People status.

“The company has always been proactive and big on training employees. We always try to promote from within wherever possible, providing it is the right decision for the company, and we invest a lot of time and money in our staff,” Rogers added.

So, where next for this incredibly fast-paced organisation? Well, full steam ahead into the future, of course. A group-wide plan will see all Elanders divisions aiming to double in size by the year 2015, and, closer to home, Elanders Hindson is on the brink of releasing its latest service – the printing of personalised products such as photo-calendars. “Where do we see the future within the print industry? We see it being more targeted, more bespoke, more personalised, and a lot more of it being requested through new media channels – the internet, mobile phones, palm pcs etc,” said Rogers. “We’re looking to reinvent ourselves in any way we can.”

123

124

Kitchen & bathroom Avilion

Avilion is the luxury bathroom and

kitchen utility manufacturer which distributes goods under the brand names Triflow and Perrin & Rowe. Its taps, shower units, sinks and so forth are available for home installations but the firm also fulfils large contracts for hotels, retreats and spas.

With a turnover in the region of £20 million, it is the largest independent brassware manufacturer in the UK. The company this year celebrated its 30th anniversary, having begun in 1978 as a precision engineering firm.

Pure

flowi n g innovation

The roll-call of establishments that have fitted Avilion’s wares makes for impressive reading. The firm lists some of the most famous, luxurious and exclusive hotels in the world as customers. That bracket includes The Savoy, Claridges and Berkeley hotels in London; the luxury island-hotel Lake Palace in India; and the golf and spa resort Sandy Lane in Barbados.

Avilion, the company self-styled as “a flow of good ideas”, defines its production and design culture as “innovation rather than duplication”. Maintaining its position at the forefront of excellence, both in terms of its luxury products and continuous improvement-based efficiency processes, is the main company focus. As well as keeping that innovation at the core of the company, the other factor Avilion attributes to its success is investment in people. “We believe the real difference between a good company and a great one is the quality of its people,” said managing director, Carl Yallop. “At Avilion we are passionate about excellence; nothing but the best will do and every employee stands firm behind this commitment. To achieve this, we invest heavily in the training of our staff and in encouraging each individual’s career progression.”

“A focus on our people, our engineering solutions and truly innovative design are the cornerstones of our success,” Yallop added.

Mark Young looks at a luxury kitchen and bathroom ware manufacturer with customers who won’t settle for any less than the best

One such example of the said innovation is the firm’s Triflow patented tap systems.

These are the first of their kind to supply filtered water directly from a mains supply to bottled standards of purity, alongside standard hot and cold selections through a single tap. Triflow, which comes in a range of seven different designs in terms of outward appearance, boasts the ability to lessen chlorine and other bad tastes and reduce contamination to Particulate class I (cysts and turbidity). Instead of using chemicals or solutions to achieve this, it works by running water through a filter cartridge, made from clay, carbon, and other natural raw materials, which is replaced by users at six-month intervals. The cartridges are manufactured in Switzerland by a company called Katadyn.

125

Avilion

“In addition to taking our own commitment to the environment seriously, our Triflow taps enable our consumers to demonstrate their environmental credentials and take responsibility for their own personal wellbeing,” said Yallop.

Part of Avilion’s efforts to reduce its own impact on the environment includes the implementation of an environmental working group which concentrates its efforts on ensuring that materials are supplied from sustainable sources, the machinery and processes are up-to-date and running efficiently and that effective recycling schemes are in place.

“A focus on our people, our engineering solutions and truly innovative design are the cornerstones of our success” Triflow was invented in 1991 and the patent is yet to be troubled by a rival system.

Some models in the Triflow range can also be fitted with a rinse facility which works by gently pressurizing water to sprayclean vegetables and such. Again patented by Avilion, the company hopes the technology will soon be widely adopted as a standard feature in kitchen installations. Previously operations and manufacturing director for Avilion, Yallop said: “There are a lot more knowledgeable and sophisticated consumers now, and the rinse, which effectively turns a kitchen tap into a mini workstation has been very well received. There’s some novelty factor, but also a really good functional product. Now we’ve cracked the pressure issue, I think rinses will really take off.”

The systems are tested and certified by the Water Quality Association in accordance with NSF/ANSI standards 42 and 53, with performance claims verified and substantiated by the test data.

As well as the time and cost savings achieved by eliminating the need to buy bottled water or the need for external filtering systems, there are environmental benefits attached to installing Triflow. Mainly, this involves cutting the carbon emissions related to the plastic production and transport miles involved with the bottled water alternative. Indeed, some mineral water is flown from the four corners of the earth to reach western destinations,so with the Avilion option technically meaning locally-sourced, the reduction in one’s own personal footprint could prove substantial. Also, employing the system means only as much water is supplied as needed so there is less wastage.

126

Avilion has three sites here in the UK. As well as its main base in Rainham, Essex, the firm manufactures from Tamworth in Staffordshire and Wolverhampton in the West Midlands. At Tamworth, the firm makes sanitary ware, while the Wolverhampton site includes the brassware foundry, casting, polishing and plating as well as some machining. Rainham is the head office and home to R&D, finance, sales and marketing and customer service; along with some machining, assembly, packaging and dispatch. Across the three sites, Avilion employs around 220 staff.

The firm has partnerships with distribution companies to send its products around the globe to destinations including North America, New Zealand, Australia, Holland and Russia.

An ISO 9001/2000 accreditation is probably these days more telling in terms of firms that don’t have it rather than those that do, but it is worth noting that Avilion has adopted the quality assurance scheme nonetheless. In addition, the company seeks to obtain the product certification for each individual country its products are sold in, even though all units are manufactured and exported from here in the UK. As previously described, the main company focus is quoted as innovation.

But alongside that the company needs something else – ambition. And it has it in abundance. Where innovation is the factor which brings ambition to fruition, ambition is the original driver for innovation. Both are needed in order to succeed.

“Our aim is to become the leading manufacturer of high quality brassware in the world, offering a desirable range of lifestyle products that combine quality, style and functionality with a reduced environmental impact,” said Yallop. “We aim to achieve this through investing in our workforce to ensure a skilled, happy and productive team.”

Metal Fablink

force Combined

Outsourcing manufacturing to developing nations with cheaper labour costs is not unusual, but steel manufacturer Fablink has refined the concept in rather an innovative way.

By combining product sourcing from India with functional leadership in the UK, the company has grown its turnover to £20 million in less than three years

Fablink bought out Smith & Plants’ metal pressing

and rolling site in Wolverhampton in 2006. This now acts as the front end to a supply chain that comprises steel fabrication, forging, casting and machine parts from a number of suppliers in India. Sales, engineering, support, IT and finance are all taken

“We have a balanced approach, with a good spread of customers delivering earnings across a range of sectors. Having strong relationships with our core customers is key” care of in the UK. As Richard Westley, CEO of Fablink, explained: “Our core strategy for growth in the UK is a programme of repositioning based on adding value to our Indian supply chain, and we have invested £2 million since April 2006 in order to achieve this.”

127

128

Metal Fablink

This means the supply chain can be configured in one of three ways: “We can source metal parts 100 per cent out of India; split between India and the UK, which gives us the flexibility to soak up any volatility in supply; or we can source entirely from India but do some tooling in the UK. This is the most effective way to configure our supply chain,” said Westley.

“Our core strategy for growth in the UK is a programme of repositioning based on adding value to our Indian supply chain” Fablink offers a wide range of services including tooling design and manufacture, rapid prototyping, low volume complex structures, high volume pressing and assembly, laser cutting, high definition plasma cutting, gas cutting, extensive manual mig and tig welding, robotic welding and painting – wet spray, powder coat and e-coat. It also designs, develops and manufactures cabs from its Northampton site.

Fablink supplies its products to a number of different sectors, including construction, agriculture, power generation, automotive and commercial vehicles. As Westley explained: “We have a balanced approach, with a good spread of customers delivering earnings across a range of sectors.

Having strong relationships with our core customers is key.”

“We have an absolutely fantastic team, from senior management right through to the shopfloor” The company has embraced six sigma management practices, focusing on critical success factors such as sales, quality and engineering, then setting operational targets and investing in specific projects to achieve them. But key to the success of the firm is the quality of the workforce. “We have an absolutely fantastic team, from senior management right through to the shopfloor. We have an information bulletin for the shopfloor and daily review meetings where senior management stand up and tell everyone what is going on. We have also provided NVQ training in business improvement techniques for all staff.”

Fablink employs 200 people in the UK and between 50 and 100 in India.

129

Raising

efficiency Automation saves time and money – machines don’t smoke, don’t have union representation and rarely, if ever, make mistakes. Thankfully, there is some manual work that still requires human input, so making working practices as automated and efficient as possible is key to increasing productivity.

It can, of course, also have a major impact on the bottom line

Developing voice recognition systems is what

Vocollect has been doing for over 20 years. The company, based in Pittsburgh, Pennsylvania, was set up by three engineers, two of which – Roger Byford and Larry Sweeney – are still with the company today. Their vision was the application of voice technology in the workplace, freeing up workers’ hands and eyes to focus 100 per cent on the essentials of the job. As Gary Glessner, vice president and managing director of European operations, explained: “There is no paper, no scan guns and no wasted actions. Workers get into a very productive, focused rhythm with no distractions.”

The system is remarkably straightforward, in terms of practical use if not the technology underpinning it. Workers wear a mobile unit on their belts with a wireless headset which also includes a microphone. The unit communicates directly with the warehouse management or order management system, which issues instructions directly to each worker. For example: “Go to aisle 17, slot 235, pick four items and take to loading bay six” etc.

Each unit is fitted with voice recognition software and carries a voice template for each individual’s language, accent or dialect, so the system can be trained to understand any worker.

It is also able to filter out all background noise, so no matter how loud the working environment, the worker can always be understood. Equally, the instructions transmitted to the unit can be customised in terms of language, speed and pitch so there are no miscommunication issues and responses are tailored to workers’ preferences. As Glessner points out, this is particularly useful in the warehouse environment, where large workforces can incorporate many different nationalities.

Far from being some Orwellian nightmare, where humans become automatons plugged into an all-powerful centralised management system, Glessner stresses that Vocollect Voice provides for a happy and productive workforce. “Workers,” he said, “really like using the system. It really is a win-win situation for workers and for management.”

130

Indeed, Vocollect can demonstrate increased productivity (by up to 25 per cent), improved accuracy (to up to 99 per cent), reduced training time (by up to 50 per cent), lower operating costs, improved safety and enhanced employee job satisfaction. And the return on investment is relatively short. As Glessner said: “The typical payback is less than 12 months, and sometimes as little as six or less.”

One of Vocollect’s first customers was the Ford Motor Company, which used Voice for quality inspection, but recession in the automotive industry in the early 90s dramatically reduced opportunities for growth in the sector. By contrast, take-up of Voice for warehouse picking application in the grocery retail market really began to take off. By the mid 90s, giants such as Wal-Mart and Kroger had embraced Vocollect Voice. The business grew steadily until 2001, at which point turnover stood at $15 million. Twelve months later, turnover was running at $30 million and last year it hit $110 million, at which time over 50 of the top 75 grocery companies in the US were using Vocollect Voice.

Right from the start, the company decided that, as well as developing software, it had to build its own hardware as third party, offthe-shelf products were simply not up to the job. Four years ago, it even started making its own wired and wireless headsets. But more recently, the company made its software compatible with third party handheld terminals such as those made by Psion,

Warehouse equipment Vocollect

Motorola and LXE. This means Vocollect Voice can now be used in conjunction with other applications that require the use of a keyboard and screen, for example.

Six years ago, the company moved into Europe. Today, it can count The Coop, Sainsbury’s, WH Smith, John Lewis, Wilkinsons, C&C, Brakes and 3663 among its customers in the UK. In fact, of the $110 million turnover last year, $45 million came from Europe, the Middle East and Africa. Vocollect also has customers in Japan, Australia and Latin America. In total, it has over 5,000 distribution centres, and over 1,800 customers with over 200,000 workers using the Vocollect Voice system.

In fact, according to Glessner, in some ways Europe has actually been quicker to appreciate the full potential of Voice for a wider range of applications in the warehouse; whereas in the US, picking – particularly in grocery – continues to account for a high proportion of Vocollect’s business. Other industries in Europe, such as logistics companies, automotive parts and consumer product manufacturers, are now starting to embrace the technology,

and they are not using it just for picking in large warehouses, but for replenishment, cross-docking and loading. For example, alcoholic beverage manufacturer C&C Group, third party logistics company TDG, Allied Bakery and car manufacturer Peugeot are all using Vocollect Voice. As Glessner explained: “There is growing interest [in using the system] for just in time production, as well as for in-store applications, in terms of getting stock from store rooms to shelves.

There are lots of opportunities for continued growth as we move into new verticals, both up and down the supply chain.”

Opportunities for Voice also exist outside of the supply chain, for example, in the healthcare sector. Vocollect recently launched a Healthcare Systems division in the US that develops voice systems for long-term care workers to ensure that patient procedures are carried out properly. As Glessner says: “This is a fledgling opportunity but the potential is huge.” Indeed, even after 20 years, take-up of voice recognition technology is still in its infancy and Vocollect, with more than 80 per cent of global market share for Voice Directed work systems, is perfectly positioned to benefit from its growth.

Zetes Serving over 50 per cent of the EMEA market, Zetes is a leader in the development and deployment of voice based technologies within warehouse and supply chain environments, and the largest provider, with over 35,000 active voice users in more than 500 projects currently.

With a highly-skilled workforce and offices in 12 countries, Zetes efficiently serves thousands of ‘local’ customers throughout Europe and beyond.

131

Appointments

132

www.themanufacturer.com/uk/jobs

Manufacturing Manager Our client is a international specialist manufacturer supplying the commercial sector.

Derby ◆ £40-45,000 + Benefits Reporting into the Site Operations Manager, you will be responsible for managing process and labour resources in order to meet internal and external customer requirements. This should be done in terms of product delivery and quality whilst minimising cost and promoting a strong continuous improvement and safety first culture. You will implement best practice at the site driving it towards a world class manufacturing standard.

The ideal candidate will be an experienced Operations or Manufacturing Manager with their experience gained within a customer facing industry

such as Automotive or FMCG. You will have a proven track record of success with the use of “lean manufacturing” tools such as 5S, quick changeover, standard work, developed through an effective employee involvement process which has delivered on a cultural change agenda.

You will be a strong consultative leader of shift working team members in a demanding and complex manufacturing process, as well as an analytical problem solver being able to identify root cause issues and develop solutions through self starting and initiative.

To apply for this role please send an up-to-date CV to Andrew Whitehead at andrewwhitehead@uk.michaelpage.com or call on 0115 948 6491 quoting Ref MPTU13009228.

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

133

engineering opportunities Our client is a global leader in the automotive industry, building vehicles in factories on six continents around the world and directly employing more than a quarter of a million people. Their products are sold in 160 markets worldwide. They continue to lead the world in terms of developing and realising new transport and production solutions, while respecting and protecting the global environment.

SENIOR ENGINEER – CONSTRUCTION PLANT ENGINEER

SENIOR ROBOTICS SYSTEM DESIGN ENGINEER REF: 223179

BELGIUM £ATTRACTIVE PACKAGE

BELGIUM £ATTRACTIVE PACKAGE

REF: 223181

The key requirements of this role are:

The key requirements of this role are: • Plan, design, implement and commission manufacturing plant construction projects specifically related to new land and external infrastructure development, buildings and machine foundations • Support negotiations with all local authorities to attain permission to conduct construction feasibility studies

• Piloting the development of strategic robotics research and design projects • Strong interface with Headquarter Robotics Department in Japan • Regular travel throughout Europe and to Japan

• Prepare and present project presentations for internal budget authorisation

• Working within the Advanced Technology Department you will be supporting the Production Engineering Department by conducting research in advanced production processes – including the application of robotic technology in service robots for care, labour, housework and mobility

With a proven track record of success in an automotive supply or OEM environment, the successful applicant will be able to demonstrate the following:

With a proven track record of success in an automotive supply or OEM environment, the successful applicant will be able to demonstrate the following:

• Masters level degree in Civil Structural Engineering or Architecture or equivalent

• Ph.D or Masters degree in Mechatronics Hardware and/or Control System Design Research or equivalent

• Significant experience in planning and design of large construction projects, project implementation and project management

• Experience in robotics research or industry experience with manufacturer of industrial robots

• Contribute to strengthening the department by developing and implementing standardisation projects

• Experience with AutoCAD

• Project management experience coupled with excellent planning and organising skills

• Fluent in English – other languages particularly Polish, Turkish, Czech or Japanese also an asset

• Excellent problem solving and analytical skills

• Previous responsibility for safety, work schedule planning and monitoring and delivering final project quality

• Bi-lingual English and Japanese desired

• This post entails frequent travel within Europe

• Willingness to travel up to 30% of the time

• Openness to relocate to Japan for 1-2 years on training courses to support your development

• Openness to relocate to Japan for 1-2 years on training courses to support your development

To apply for either of these positions please email your up-to-date CV and current salary details to Russell McCartney at russell.mccartneyresponse@nigelwright.com, quoting the relevant reference number.

www.nigelwright.com london

134

newcastle

copenhagen

L

brussels

paris

www.themanufacturer.com/uk/jobs 

DETERMINED PLAYERS FOR A DETERMINED TEAM PROJECT LEADERS

OPERATIONS MANAGER

COMMISSIONING ENGINEERS

Wages from £28,642

Wages from £35,000

Wages from £21,000

PLANNERS

TEAM LEADERS

Wages from £19,264

Wages from £27,767

VACANCY REF 45851

VACANCY REF 45715

VACANCY REF 44781

Manufacturing Engineering VACANCY REF 40635

PRINCIPAL OPERATIONS ENGINEERS

VACANCY REF 40632

Designing, manufacturing & commissioning a nuclear submarine is an undertaking like no other.

We are seeking highly motivated Manufacturing Engineers & Managers to embrace this challenge and lead us towards new levels of efficiency by using the latest processes, technology and thinking. With a long-term order book we are investing heavily in improving our Operational capability in the roles shown on the cards.

Ideally HNC/D to Degree Qualified, you will have experience in one or more of the following areas: -

Wages from £25,580

VACANCY REF 45855

Facilities, Complex Machining, Tooling, Planning, Maintenance, Production Engineering, Jig & Fixture Design, Production Methods, Build Strategy, Design for Manufacture Kaizen/Improvement.

To apply for these vacancies email your CV to:

external@hr.xchanging.com quoting the vacancy reference number or call 01229 873930

www.baesystems.com

135

www.themanufacturer.com/uk/jobs

Kinetic Search & Selection are a dedicated recruiter for the Manufacturing sector & are committed to assisting you in finding your next opportunity. Through a robust relationship with leading companies, a diverse range of vacancies are always available.

The latest vacancies are:

Quality Engineer/Coordinator

(REF GDV78423)

Manufacturing Engineer

(REF 78606NWR)

Up to £30K Newcastle

Circa £30K Hartlepool Teesside

• To develop & maintain all inspection policies & procedures

• Will suit an experienced Production, Manufacturing or Process Engineer or equivalent

• Directly responsible for the operation of the quality department, allocating work as necessary

• Mechanical Engineer qualified to at least HNC level or equivalent

• Recognised course in operating a quality assurance system or relevant practical experience • HNC in an engineering related discipline or equivalent

• Ideally have experience of metal working business sectors

Welding Engineer

• Proven supervisory experience, preferably within a precision machinery environment

Manufacturing Engineer

• Experience within Blue Chip manufacturing organisations

(REF 78504)

£50K - £60K basic + benefits (pension, bonus & private health) Leeds

(REF 78985)

£32K - £34K Bournemouth

• Working for a leading global supplier of advanced technology solutions for the oil & gas industry

• Working for a major, Aerospace Manufacturer, so similar experience required

• Degree Qualified Metallurgist or Mechanical Engineer

• Knowledge of CNC machining & 5 axis NC programming

• Over 10 years experience of welding practices in the UK & Europe

• Process capability studies • Process optimisation & efficiency improvements

To apply for these positions, please email manufacturer@kinetic-plc.co.uk To view all of our other vacancies, visit www.kinetic-selection.co.uk

w w w . k i n e t i c - s e l e c t i o n . c o . u k

Training

136

If you are interested in providing the manufacturing community with details of your training courses, workshops, seminars etc then please see contact details below. The training can be for any discipline from health & safety to six sigma or from sales masterclasses to lean workshops across the board.

Source of Supply

Imagine if… www.themanufacturer.com October 2008 Vol 11 Issue 9

…you could source all the corrugated packaging you need from just one supplier with a network of plants across the length and breadth of Britain?

Defendi n g the realm

A supplier with over 70 design awards to its credit in the last few years alone.

Dedicated to creating packaging which takes cost out of the supply chain whilst boosting sales and profits and reducing carbon footprints.

Using a unique set of tools called PackRight to analyse every single aspect of a packaging opportunity.

Astute production continues at BAE Systems Submarine Solutions

With a world-class Impact and Innovation Centre where you can explore options in a simulated retail and supply chain environment. Well, you can.

Call us now on 0845 260 70 80 or send an email to ideas@dssp.com

Collaborative design

Innovation by partnership

Sustainability

Carbon reduction

World class

Toyota and TPS today

Appointments

www.themanufacturer.com October 2008 Vol 11 Issue 9

www.dssmith-ideas.com

THINK OF THE POSSIBILITIES

Interview

David Smith CEO of Jaguar Land Rover

M an pr ufa ev c iew t u in re sid r e LI pa V ge E 2 42 0 08

The sector’s top jobs