The Manufacturer October 2010 by The Manufacturer

www.themanufacturer.com October 2010 Vol 13 Issue 10

Wow, why is this so efficient?

Go West

Focus on the South West region

Because engineering has been redefined. Get ready for a new era of efficiency in engineering. Siemens, the world’s leader in automation products, has developed a new generation of engineering software for industrial automation that redefines the entire engineering process. You will benefit from outstanding efficiency and usability that lead to unrivalled profitability and sustainability. The key to success will be announced worldwide in November 2010 – a significant date that has the power to change your world. www.siemens.com/engineering-redefined

Interview Mark Elborne

Chief Executive Officer, GE UK

Finance

Tax planning for offshore IP

Sustainable manufacturing

Answers for industry.

Packaging in the next decade

Leadership and Lean

Six Sigma’s relevance today

The Manufacturer in partnership with EEF, the manufacturers’ organisation. Working together to secure the future of manufacturing.

Wow, why is this so easy?

SHARPEN SHARPEN YOUR COMPETITIVE COMPETITIVE EDGE. Boost your your business business intelligence Boost intelligence with withours. ours.And Andjoin jointhe the thousands of of British British manufacturers thousands manufacturers who whobenefit benefitfrom fromour our unique business business services, unique services, insight insight and andinfluence. influence.Not Nottoto mention training, training, consultancy mention consultancy and and more. more.

Because engineering has been redefined. Efficient, intuitive, proven: engineering success has never been so easy. Siemens, the worldâ&#x20AC;&#x2122;s leader in automation products, has developed a new generation of engineering software for industrial automation that redefines the entire engineering process. The key to success will be announced worldwide in November 2010. Then itâ&#x20AC;&#x2122;s your turn to benefit from outstanding efficiency and usability for unrivalled profitability and sustainability. www.siemens.com/engineering-redefined

Answers for industry.

At EEF, we believe that modern At EEF, we believe manufacturing is thethat heartmodern of the real manufacturing heartyour of the real economy. Andisbythe adding voice to ours, weAnd canby help keep your it there. economy. adding voice to ours, we can help keep it there. Join us at www.eef.org.uk or call us on 0845 1333 to find out more. Join us at 250 www.eef.org.uk or call us on 0845 250 1333 to find out more.

Editor’s comment

Tax spectre on centre stage as Wolseley walks STOP PRESS: With the Comprehensive Spending Review due for release on October 20th we are appealing to companies to convey their business concerns to Westminster via The Manufacturer. See our Call to Action on page 11. Plumbing and building materials company Wolseley has identified a £23m tax saving by moving its holding company to Switzerland. The story has raised fears of a second UK exodus of big companies, following the exit of some companies including Shire Pharmaceuticals, engineering firm Charter and advertising group WPP in 2008 after tighter rules on taxing profits of overseas subsidiaries were introduced by Labour. Earlier this year several big companies criticised the UK’s corporation tax rate and drinks group Diageo threatened to leave the UK over the 50% income tax rate, CEO Paul Walsh referring to it as a stealth corporation tax. Wolseley is taking advantage of a somewhat Victorian tax system that allows a British company to operate in the UK but put its accounts through a foreign jurisdiction with just a handful of senior people located there, which qualifies it as resident. While this system is in place, more companies will consider moving overseas and the Exchequer will suffer. While moving manufacturing operations is less effected, there is a real risk that as boardrooms decamp to Geneva and Dublin, senior management and, to avoid the 50% income tax and for logistical ease, a company’s R&D operations, may follow. Our tax planning article on page 46 quizzes tax experts on the potential tax costs involved in offshoring operations or intellectual property. TM has embarked on a formal partnership with EEF, the manufacturer’s organisation and the magazine will be received by its members. EEF is a very industrious and effective ally of UK manufacturing companies, and the arrangement allows us to lend our support as a media company by reporting more subject matter that is crucial to business needs, kicking off this month with two pieces on the Equality Act 2010 (see pages 54 and 58). We will also be covering the regions in more detail, starting with the South West. Please get in touch to arrange a visit to your company and/or to attend one of our networking dinners when we visit your part of the country in the months ahead.

Cover image: Successful manufacturers of the South West: Sunseeker (main image), GE and Airbus.

Will Stirling, The Manufacturer The Manufacturer in partnership with EEF, the manufacturers’ organisation. Working together to secure the future of manufacturing.

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Editorial

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EEF is dedicated to the future of manufacturing. Everything we do is designed to help modern manufacturing businesses evolve, innovate and compete in a fast-changing world. www.eef.org.uk

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News and features 04 News

Manufacturing news

12 Manufacturing appointments On the move

Find out whoâ&#x20AC;&#x2122;s heading where in manufacturing

14 The big picture Survival of fittest

IfMâ&#x20AC;&#x2122;s Andy Neely discusses the intricacies provided by the emerging economies

15 Economics

The Spend Review hurdle Steve Radley investigates the factors contributing to caution prior to the Comprehensive Spending Review

16 The legal low down

Coalition cuts may test the relationships between employers and unions Thomas Eggar LLP discusses the topic

17 Business as unusual

The search for lean leaders In pursuit of operation advantage, Anand Sharma discovers knowing what needs to be done is no longer the challenge

20 Regional focus South West

The first regional focus shines a spotlight on impressive contributions made by manufacturers in the South West.

24 Interview

Elborne identity Will Stirling asks GE UK chief executive Mark Elborne how manufacturing is helping the company to grow

28 Special Feature

Manufacturers Directors Conference 2010

30 Sustainable

What are you packing? Taking weight out of packaging does not necessarily constitute a reduced environmental impact

36 Leadership and lean Spotlight on six sigma

Brian Davis finds out the relevance of this long-standing business strategy on modern manufacturing

42 Innovation and design The 3D printing revolution

42 2

The advent of cheap, fast and versatile 3D printing has made it useful to an ever-wider variety of businesses

44 Finance and professional services A matter of tax

With stiff competition from overseas tax jurisdictions, Tim Brown investigates the feasibility of foreign profit attribution

Contents People and skills

A balancing Act 54

Jane Gray asks whether it is women that need support of the industry that needs to improve its equal opportunity efforts

Employee of the month 57

Stephen Thornton of Parvalux Electric Motors

EEF Insight 58

Disseminating equality

EEF warns manufacturers to take heed of new equality legislation

Special feature 59

Quarterly tax update

Maureen Penfold of Kingston Smith considers the forthcoming changes to the VAT rate

Supply chain 60

54 73

IMHX2010

International Materials Handling Exhibition

The business case

The commercial considerations for a greener supply chain

IT in manufacturing

Managing the life of your products 62

Simon Holloway explores product lifecycle management as a means for reducing risk

IT news wrap 65

Keeping you up to date with what’s new in IT

Special Feature 70

The UK large optics industry

The International Materials Handling Exhibition, to be held at the NEC in Birmingham from 16-19 November, is one of the UK’s top 10 largest trade shows. With nearly a third of the show’s visitors involved in manufacturing, this supplement provides an in-depth preview of the event and highlights some of the must see exhibitors.

A group of 14 EU member states is building the world’s biggest telescope

Manufacturinginaction Sponsored by TBM Consulting Group

Factory of the month

90 Coca Cola The coke side of life Tim Brown met with operations director Ian Johnson to talk about the important steps the site has made to reach its enviable status as Europe’s largest Coca-Cola bottling plant

100 Advanced Medical Solutions Lean with a healing touch 113 Lander Automotive Ready and robust 120 Boots Contract Manufacturing Get by 129 Danfoss Randall The right temperature 133 Fujitsu Telecommunications Fujitsu fights back 137 KMF Precision approach 140 Sims Engineering Specialised Sim-biosis 142 Elekta Elekta’s choice 145 Durham Duplex A cutting edge 149 ABS The heat is on 151 Parvalux Turning point

Newsinbrief E ducati o n

Brunel University has launched a £9m metal engineering centre which it hopes will help rejuvenate the UK’s manufacturing sector. The Innovative Manufacturing Research Centre - funded by the Engineering and Physical Sciences Research Council (EPSRC) - aims to make a significant contribution to the £17bn a year metals industry through the development of advanced technologies for reuse, remanufacture and recycling of secondary metals.

E ngineering

GKN back among big boys British industrial conglomerate GKN has returned to the London Stock Exchange’s premier company index, the FTSE 100, after a six year absence. In its half year trading update the company announced that it has exceeded its expectations so far in 2010, with its automotive performance in particular well above its forecasts. Sales across the company are at £2.7bn, up from £2.1bn in the first half of 2009, while

profits increased to £202m from £25m. The company has won more than $1 billion of long term contracts for aero engine products this year. Formerly known as Guest, Keen and Nettlefolds, GKN was founded in 1759 and is headquartered in Reddich.

M o t o rsp o rt

Berkshire-based motorsport company Xtrac has expressed disappointment that the Supacat SPV400 project it was involved in was spurned by the MoD in favour of the competing Ocelot vehicle. The news will come as a big blow to at least 30 British companies involved in the Supacat SPV400 project. Many of these, like Xtrac, have a background in motorsports and are members of the Motorsports to Defence Initiative, a programme which seeks to use British motorsport companies’ expertise for military defence projects. GUNMAKING

Gun and rifle maker James Purdey & Sons has completed a 20-bore shotgun made almost entirely from a special Damascus steel using a powder metallurgy method. The gun uses a high tech powder metallurgy method to fuse two grades of steel and produce super-high tolerances. It will be priced at just over £100,000.

A ut o m o tive

Green vehicles electrified The Transport Secretary Philip Hammond has announced the provision of £24m worth of funding for six Ultra Low Carbon Vehicles projects. Some of the UK’s leading vehicle manufacturers, working alongside supply chain manufacturers and universities, have secured the Government investment. The total costs for all six projects, some of which are pre-existing, stands at just under £52m. The consortia partners – will run innovation projects designed to strengthen the UK’s Ultra Low Carbon Vehicle capability, with a focus on developing the supply chain. In all of the projects, large vehicle manufacturers will help to

T elec o mmunicati o ns

Finnish mobile phone manufacturer Nokia has announced that the head of Microsoft’s Business Division Stephen Elop is to become its new president and CEO. Canadian born Elop will replace Olli-Pekka Kallasvuo in the role from September 20. “I am extremely excited to become part of a team dedicated to strengthening Nokia’s position as the undisputed leader of the mobile communications industry, with a relentless focus on meeting the needs and expectations of customers,” he said.

The hybrid range extended electric Jaguar XJ Limo Green vehicle

grow the supply chain for a low carbon vehicles industry. One of the winning projects, The REEVolution programme, is an existing project led by Jaguar Land Rover and Lotus Engineering. The new investment is aimed at further developing the reliability of components fitted to the demonstration Limo Green vehicle, a series hybrid range extended electric Jaguar XJ. The concept demonstrator delivered sub 120g/km tailpipe CO2 emissions with an impressive 30 mile range in EV mode.

ManufacturingNews M o t o ring

Mini goes mini electric Almost ten years since the ‘new MINI’ was first shown at the Paris motor show, the iconic UK brand has unveiled plans to branch into the scooter market. The company released its MINI Design Festival and pay homage Scooter E Concept at an event in to our British heritage while also London on September 23. marking a new era for MINI. The Model and icon of British MINI Scooter E Concept is true fashion, Agyness Deyn, helped to our brand values of distinctive debut the MINI Scooter E Concept. design, intelligent functionality and A total of three interpretations customisation and builds further on of the MINI Scooter E Concept these characteristics by combining conceived by Adrian van driving pleasure with sustainable Hooydonk, senior vice president technology into the first two-wheel BMW have been revealed. Using concept of its kind for MINI.” a smart phone as the ignition key, the concept integrates infotainment, communication and Agyness Deyn navigation systems. unveils MINI Scooter E The MINI Scooter E Concept in Concept is powered by London for an electric motor which Global Premiere can be recharged at any conventional power socket using an on-board charging cable. “The MINI Scooter E Concept represents an electric vision of the future as urban mobility takes a new direction by MINI,” says van Hooydonk. “We are delighted to debut during the London

C hemistr y

Chemically balanced One in every five pounds in the UK economy is dependent in some way on the chemistry industry, according to research. Commissioned by the Royal Society of Chemistry (RSC) along with the Engineering and Physical Sciences Research Council (EPSRC), the study found that £258bn – equivalent to 21% of UK GDP – was contributed by industries reliant in the chemicals industry in 2007. Those industries employed six million people and accounted

for 15% of goods leaving UK shores. The report looks at ‘upstream’ and ‘downstream’ industries – those that produce or depend to varying degrees on chemicals. Fifteen key sectors, including health, electronics, textiles and aerospace, were adjudged to be either wholly or partly reliant on chemical sciences.

Newsinbrief TRADE

UK importers’ and exporters’ confidence rose in August but the business outlook remains challenging, according to Travelex Global Business Payments. With confidence in an export-led recovery falling for the second consecutive month, the international payments provider issued a rallying call to UK manufacturers, calling on them to drive exports through “quality, innovation and differentiation.” Economy

The recovery that manufacturing has enjoyed throughout much of 2010 is continuing but at significantly slower rate, according to the September industry PMI from Markit and the Chartered Institute of Personnel and Development. The survey for the Purchasing Managers Index found that not only did output growth slow in August, new orders have all but stagnated, indicating that firms who are still producing more are merely eating into backlogs. POLITICS

In a strongly-worded speech to the Liberal Democrat conference in Liverpool, the Business Secretary Vince Cable attacked “outrageous” bonuses. He said: “I make no apology for attacking spivs and gamblers who did more harm to the British economy than Bob Crow (the RMT union leader) could achieve in his wildest Trotskyite fantasies, while paying themselves outrageous bonuses underwritten by the taxpayer. There is much public anger about banks and it is well deserved.” R ene w ables

The UK’s wind energy industry has passed 5GW of installed wind energy capacity, enough to supply close to 3 million homes annually with electricity. The 5GW milestone was achieved by the commissioning of two wind farm developments in September. Vattenfall’s 300 megawatt Thanet offshore wind farm, the world’s biggest, which began operating on Thursday, and the expansion of Fred.Olsen Renewables’ Crystal Rig 200MW onshore wind farm in the Scottish Borders in early September.

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siemens.com/answers

News S kills

The apprentice agenda Skills Minister John Hayes last month reaffirmed Government support for apprenticeships, sustaining a consistent message to manufacturers on the direction of skills strategy in the UK Hayes has long proclaimed himself as an advocate of lifelong learning and on September 29 he demonstrated his conviction to delegates at the Group Training Association England’s annual conference expressing the Government’s commitment to work based learning and apprenticeships. Encouraging better matchmaking between skills needs at an employer level and the development of relevant skills on the part of educational bodies and

John Hayes with City and Islington College students

learners Hayes challenged small and medium sized businesses to engage more closely with local apprenticeship schemes and agencies in order to make themselves accessible. In particular the Minister spoke of the role Group Training Associations (GTAs) play in helping businesses, take on apprentices. “The truest measure of the success or failure of this Government’s commitment to apprenticeships will be found in how well-equipped today’s young people will be in future years to face the shifting challenges of life and work,” said Hayes. “To be successful in that, we must create a radically new model for workplace training with apprenticeships at its heart and with partnership between Government, employers and individuals as its motive force.”

T rade

Overseas market briefings kick off UKTI business specialists will provide manufacturers with business insight into the Brazilian market on November 3 before further briefings on other countries. The briefings, sponsored by trade body the Manufacturing Technologies Association (MTA) and UK Trade and Investment (UKTI), will kick off in Birmingham on November 3 with a talk on opportunities within the Brazilian market. Led by Chris Wall, UKTI’s business specialist, the briefing will focus on business opportunities and details of the supply chain within Brazil. Organisers say case

studies and discussions about major infrastructure investments within Brazil will be included. A case study will be presented by the managing director of Brimac Engineering, Paul McCairn to provide practical advice and guidance. The second event, focussing on opportunities in China, will be held in Derby on February 16, 2011. The third, on Russia, will be held on April 6, 2011 in Birmingham.

Newsinbrief A ut o m o tive

The BMW Group has been named as the automotive industry’s supersector leader and the world’s most sustainable automobile manufacturer. This was the conclusion of the SAM Group, published in its latest evaluation for the Dow Jones Sustainability Indexes (DJSI). The BMW Group is the only company in the automotive industry to have been listed in this renowned group of sustainability indices every year since it was established in 1999. FINANCE

A new study has found that two-thirds of UK firms expect credit costs to rise in 2010, fuelling interest in alternative finance. The report by Siemens Financial Services (SFS), due to be released on September 27, shows 65% of companies in the UK (52% DE, 47% FR) expect the cost of credit to rise in 2010. Credit availability also remains tight, with predictions of further credit limit reductions in 2010 by 49% of UK companies (34% DE, 45% FR).

F o o d and drink

UK exports of food and non-alcoholic drink grew to more than £5bn in the first half of 2010, a rise of 4.3% on the same period in 2009. Full-year sales to overseas markets are forecast to break the £10bn barrier for the first time, according to figures released today by the Food and Drink Federation. This first half growth has been characterised by an almost entirely flat EU export market but buoyant growth to non EU markets, which increased from £927.6m to £1,141.9m – a 23.1% change. M o t o ring

British engineers will attempt to build the world’s fastest motorbike and return the two wheel land speed record to the UK for the first time since 1937. The 50-strong team of engineers will need to secure £100,000 for the project. They are attempting to build a bike that will break the 400mph barrier with a groundbreaking supercharged 700 bhp engine. If the group succeeds in its aim, the bike will be travel at an amazing nine seconds per mile.

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CHESFORD GRANGE KENILWORTH

WARWICKSHIRE

THE G R E AT RESET

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000000 00000 0 000 000000 0 00 0 0000 0 directors’ conference 2010 00000 0 00 0 You and your team are invited to attend 0 0000 The Manufacturer Directors’ Conference 00 0 0 0 0 (MDC), the annual flagship event for 000000 The Manufacturer magazine. 0 00 This year the conference will deliver two days of thought leadership, intensive learning and inspiration for manufacturing leaders. High-end networking and professional development opportunities for 200 senior UK manufacturers make this an event not to be missed.

MDC keynotes include: Ross Warburton,

Executive Director, Warburtons

The 2010 MDC will provide you and your team with: 5 Thought leadership keynote presentations 12 Manufacturing case study presentations

Nigel Newman ,

Director, Edward de Bono Foundation (UK)

Clifford Burroughs

Group Chief Information Officer, United Biscuits (UB)

Exclusive pre-conference workshops (November 17) Lively manufacturing debate

Three events – Two high impact learning and networking days: 17th November

Pre-Conference full day workshops 09:00–17:00

18th November

The Manufacturer Directors’ Conference 09:00 –17:00

18th November

The Manufacturer of the Year Awards Ceremony and Gala Dinner 18:00-Midnight

Mike Gregory

Head of Manufacturing, Ifm, Cambridge University, MDC Panelist Chairman

PRE-CONFERENCE WORKSHOPS – 17th November, 09:00 to 17:00 Choose from four full day hands-on workshops: 1. Roadmap to Operational Excellence 2. Leadership and Culture Change – Richard Holland, MD UK, India and S.Africa, TBM 3. Visual Thinking: Visual workplace – Gwendolyn Galsworth, President, Quality Methods International 4. Creative Leadership – Nigel Newman, Edward de Bono Foundation

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0000 EAR 00 LY B IRD 0000 OFF 0 ER 0 000 0000 0 THREE MDC BREAKOUT STREAMS: 0 0000 000 0000 00 00000

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Save up Visit to £150, www Regi .them ster b anuf efore n 2 actu rer.c 2 d Octo om/m ber dc

The Manufacturer magazine and its partners have researched the latest business and manufacturing thinking around three key streams of excellence. In these sessions industry leaders will share their solutions to the challenges facing our industry and their mechanisms for inspiring the confidence and drive needed to succeed through the tough economic outlook. Select from 12 breakout case studies including: MDC Stream One Enablers of Excellence

MDC Stream Two Excellence in Practice

Gwendolyn Galsworth, President, Quality Methods Int.

Craig Sams, Rio Tinto Alcan UK Service Delivery Manager

Company leadership is responsible for the corporate intent: finding and focusing targets for strategic growth and tactical improvement, driving those improvements through metrics-based problem solving— and then turning results into operational best practices. In this session, you build your understanding of how executives, managers, and supervisors can learn to use the language of visualisation to grow, align, and drive the enterprise—how to deploy Visual Leadership.

This workshop will demonstrate how Rio Tinto Alcan, a global leader in mining, processing and manufacturing industry, is driving continuous improvement in their supply chain operations. Highlighting how the creation of an effective, flexible supply chain is driving performance and creating value, whilst at the same time reducing working capital and supporting Rio Tinto Alcan’s manufacturing and operational performance goals.

MDC Stream Three Excellence in Strategy

Event sponsors:

Jonathan Duck, CEO, Amtico International

Jonathan will cover the challenges he faced joining a management buy-out, restarting growth and then leading Amtico into a highly geared secondary management buyout. He will describe how Amtico has been able to post record results and how the company has made its West Midlands factory cost competitive with China. This has let Amtico repatriate manufacturing from the Far East to its UK and US factories, and play its own part in rebuilding the UK’s manufacturing base.

0000 0 0 000 00000 0 0 0 0 0 0000 0 0 0 000 0 0 000 0 00 00000 0 0 0 0 00 0 0 0 000 Visit www.themanufacturer.com/mdc 0 00 00 0 00

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0 0 0 0 0 Steve Nevey, 0 Nigel Stansfield, RedBull Racing Senior Vice Robin Johnson, 0 Steve will provide President Product Partner, Eversheds insights and best 0 and Innovation, practice into the application Robin is a leading of effective management cross border M&A Interface FLOR 0 systems to Red Bull Racings lawyer who also heads up To truly embrace sustainable manufacturing and design Eversheds’ Industrial Engineering development, companies must 0 technologies, to reduce costs sector group. He is consistently be open to every possibility; and improve lead times. Steve ranked, by Mergermarket, in this is not just in terms of the 0 will identify improvements the top 10 lawyers in Europe for types of products they bring to that really make a diff erence, the last five years and has been Researched and delivered by: market, but also the processes and the key lessons learned in 0 voted for two years in a row as and raw materials used in their effective collaboration. the Insider Corporate Lawyer manufacture, the way customers He will also share best 0 of the Year. Robin has lectured respond to them and ultimately practice in designing and extensively in terms of cross Corporate Sponsor: what happens at the end of life manufacturing a high precision border M&A both in Europe 0 when consumers have finished product with extreme time to and in the United States and is with them. Nigel will illustrate market requirements. a regular thought leader on such 0 more on an organisation regarded topics. He is a member of the as an environmental pioneer. American Bar Association. 0 0 0 0 or telephone 0207 401 6033 for the latest conference and programme information 0 0 000 Britannia House, 45-53 Prince of Wales Road, Norwich, NR1 1BL T +44 (0)1603 671300 F + 44 (0)1603 618758 www.sayonemedia.com. Copyright © SayOne Media 2010.

News Datesfor yourdiary October Throughout October EEF is holding seminars focusing on pensions and benefits. For further information visit www.eef.org.uk/events Throughout October The Freight Transport Association is holding a series of Transport Manager Seminars throughout the UK. For more information contact the FTA’s media team on 01892 552255 Throughout October Manufacturing Advisory Service South East is offering SME companies a free ‘Lean Benchmark’ report. For more information call 0845 609 2121

Highfield is holding a health and safety seminar at The Bull Hotel in Peterborough. For more information call Vicky Entwistle on 0845 2260 350 or email ventwistle@highfieldabc.com

13 14

EEF is holding an Employment Law update seminar in Cannock. Call 0845 293 9850

The Centre for Remanufacturing & Reuse is holding a one-day workshop focusing on remanufacturing issues. The organisation’s Lesley Maddox can be contacted by email at lesley. maddox@remanufacturing.co.uk

Manufacturing Advisory Service Yorkshire & Humber is holding a manufacturing conference at the Advanced Manufacturing Park in South Yorkshire. For more information call Karen Clough on 08700 111 875

The Institution of Mechanical Engineers is holding the James Clayton Memorial Lecture at IMechE HQ, One Birdcage Walk, London, focusing on the development of innovative vehicles. Visit www.events.imeche.org for more information.

18-20 21

Siemens is hosting the PLM Europe conference in Linz, Austria. See www.plm-europe.org

The Manufacturer magazine hosts ERP Connect for senior manufacturers at Old Trafford football stadium, Manchester for a day of ERP best practice, thought leadership and one to one networking. Visit www.erpconnect.co.uk or call 0207 401 6033 for details.

24-26

The ADS (Aerospace, Defence and Securities) will be present at the AOAirport Operators Association annual conference which will be held at the London Hilton Metropole. For more information visit www.aoa.org.uk

D efence

Fox warns Cameron over cuts Defence secretary Liam Fox has implored the Prime Minister not to slash military budgets in a letter leaked to the Daily Telegraph. Fox had written to David Cameron privately before the 28 September meeting with the National Security Council in which discussions took place on an ongoing military strategy with the backdrop of potential 10 to 20% cuts in budget. Fox warned David Cameron there could be “grave consequences” in subjecting the defence budget to heavy cuts. He said that Britain could be leaving itself open to as yet unidentified threats in doing so. “On 22 July the NSC endorsed the ‘Adaptable Britain’ posture because we decided that it was impossible to predict what conflict or global security scenarios may emerge in the years ahead,” he wrote. “That meant ensuring the maintenance of generic defence capability across all three environments of land, sea and air – not to mention the emerging asymmetric threats in domains such as cyber and space –with sufficient ability to regenerate capability in the face of these possible future threats were it required. “How do we want to be remembered and judged for our stewardship of national security? We have repeatedly and robustly argued that this is the first duty of Government and we run the risk of having those words thrown back at us if the SDSR (Strategic Defence and Strategy Review) fails to reflect that position and act upon it.” He went on to point out the flaws in scrapping amphibious shipping and the Nimrod MR4 programmes in terms of conflict and peace keeping military and counter terrorism activities and also said there will be some risks top necessary civil tasks performed by the forces, “including but not limited to foot and mouth, fire-fighting strikes, fuel shortages, flu pandemics…and the 2012 Summer Olympics.” In the letter, Fox expressly stating that he had not copied in others to the correspondence. The BBC reports that Fox is “appalled” at the leak.

November Throughout November EEF is holding seminars focusing on safe maintenance in manufacturing across the UK and Equality Act workshops. For more information visit www.eef.org.uk or call 0845 293 9850 Throughout November Eversheds is holding health and safety update seminars throughout the UK. Visit www.eversheds.com/training

Defence Secretary Liam Scott has warned that reducing the defence budget could have “grave consequences”.

A Call to Action

Comprehensive Spending Review and SDSR:

A Call to Action As the Comprehensive Spending Review approaches and UK manufacturing reaches a tipping point, TM asks YOU, the manufacturers, whether this Government ‘gets’ manufacturing, and if not, to take action. Ravage The Comprehensive Spending Review on October 20 will be the most far-reaching and important overhaul of public spending for at least 30 years. Likewise, the upcoming Strategic Defence and Security Review will be the first since 1997 and could leave military budgets ravaged. The scale of public expenditure cuts that have been set out in the emergency Budget in June will leave few government-funded programmes untouched. When the cuts come, the private sector is expected to take up the slack in public sector unemployment. Yet manufacturing in some sectors is reaching a tipping point. A globalised, mobile economy means that for many products, a strong market differentiator for British companies is becoming harder to retain. There is a strong sense that this government does not fully understand manufacturing, its long term horizons and most of all just how precariously poised large factions of UK manufacturing are. The manufacturing trades associations – EEF, the CBI, ADS, SMMT, FDF and more – have been frenetically busy submitting appeals to government but this is the age of the Big Society and individual manufacturers’ voices need to be heard to add weight and credence to our associations’ efforts. What can you do? The Manufacturer is asking businesses to step forward and act. Write to us, tell us what government needs to know about your industry. Explain to Westminster what you do; the nature of your industry; the issues you face to be competitive; and the tax regime you need to compete on a level playing field. The next three weeks may be the most influential opportunity in your company’s history to talk to MPs directly and make a difference to the UK’s business environment. And after the CSR, it is still vitally important that Westminster understands industry.

If any of these issues affect you, do you want to speak out? The retirement age for employees being de-linked from the state retirement age with employers losing the ‘business need’ discretion European employment law and rising bureaucracy from Brussels An uncompetitive, complex and unpredictable tax regime which is driving big companies abroad Energy supply risk and energy price stability Capital allowances and its effect on your ability to invest in modern plant Simplification of the disparate, confusing business funding mechanisms 1-in-1 out vs. enforced regulatory budgets The CRC Energy Efficiency Scheme and its impact on the energy-intensive segment of our manufacturing Business led but thinly funded new Local Enterprise Partnerships Are you willing to host an MP at your factory and explain to him your business needs? We will cover the visit in the magazine, online and by video both on our site and our associate organisations’ websites. We intend to give this activity the biggest publicity push possible and will be sending our collated comments to the Secretary of State for Business Vince Cable. Don’t miss the chance to help government understand manufacturing and its essential role in the UK economy.

TAKE ACTION NOW! Will Stirling Editor, The Manufacturer Contact TM at: w.stirling@sayonemedia.com or 020 7401 6033

ManufacturingAppointments UK Appointments David Algar Hozelock

David Algar has been appointed group chief executive of Hozelock. Algar has extensive marketing and senior management experience, having been general manager for ICI Paints with responsibility for Dulux. Most recently he was regional vice president

for Danone Babyfoods throughout Northern Europe and Latin America. He succeeds Steve Hall who has presided over a period of rapid growth at Hozelock which in the past year has seen the Birmingham based company increase its turnover to over £90m.

Gary Oliver Frazer-Nash

Frazer-Nash has announced the appointment of a new business manager to its oil and gas team. Gary Oliver has over twenty years of experience in the oil and gas field. He started

his career at BP, working on the firm’s European and African operations, before moving to Logica where he became business development manager for the oil and gas sector.

Michael Pick Cooper SH

Cooper SH, the UK distributor of Konecranes port equipment, has appointed Michael Pick as contracts and operations manager. The newly

created position will see Pick handling new and existing contracts as well as assuming control of the company’s after sales activities.

Donna Hunt Triflow Concepts

Triflow Concepts has announced the appointment of Donna Hunt as key accounts manager and the promotion of Haydn Wood to regional director. Hunt will manage both national and global accounts while establishing new business. She brings with her five successful years of experience within

the kitchen industry and a proven track record of targeted sales. Wood has previously served the company as sales manager and business development manager. His role as regional director will involve travelling extensively to Asia to help develop sales in the emerging markets.

Axiom Manufacturing Services has expanded its procurement team with the appointment of two new supply chain leaders. Val Lewis joins the team after six years as purchasing manager at Technicolor, formally Thomson Broadband UK Ltd. Dean Bailey previously worked as sourcing manager for Japanese valve manufacturing specialist Tomoe Valve Ltd. BETE, distributor of standard and custom-designed spraying nozzles and systems for industrial applications, has announced the appointment of Ivan Zytynski as marketing manager. Zytynski’s role at BETE will be to grow the business by developing and implementing a new marketing strategy, exploring new markets for the range of Bete products, as well as introducing new products. Sir David McMurtry, chairman and chief executive of engineering company Renishaw plc, has been honoured with the General Pierre Nicolau Award by the International Academy for Production Engineering. The award, presented to Sir David at the Academy’s annual assembly in Pisa, Italy in August, is presented each year to individuals who have made distinguished contributions in the field of production engineering.

The Association for Consultancy and Engineering has appointed Alan Bramwell, chief executive of Clancy Consulting, and Keith Howells, managing director of Mott MacDonald, to its board of directors.

International Appointments Siemens PLM Software has announced it has promoted Charles C. “Chuck” Grindstaff, currently executive vice president of products and chief technology officer, to president. Grindstaff has worked in increasingly senior positions with Siemens PLM Software over 32 years and is recognised throughout the PLM industry for his visionary and thought leadership. Siemens has also announced that John Fox has joined the company as vice president of marketing for the Velocity Series™ portfolio of PLM solutions for the mid-market. In this role, Fox reports to Karsten Newbury, senior vice president and general manager, Velocity Series. PACCAR has elected Ron Armstrong to the position of president, effective January 1 2011. Armstrong has 17 years with PACCAR and his most recent responsibility was as executive vice president.

To notify The Manufacturer of your company’s appointments, please contact Daniel George at d.george@sayonemedia.com and 01603 671300

SPECIALISTS IN ENGINEERING & MANUFACTURING RECRUITMENT

North West Projects Ltd

0870 381 0330

relleborg CRP Limited has undergone significant business growth in the two years for which I have been employed within the business. A significant aspect to that growth has been the requirement to recruit and retain critical key individuals in a range of, particularly, Design, Projects and Operationally focussed roles. Kensington Consulting has been an excellent business partner in helping TCL to achieve the required standard of candidate in respect of the above roles. Kensington are acutely able to interpret our provided job profiles/specifications and allied to business like discussion regarding the principle features and requirements of the roles have been proficient in being able to source and offer for interview quality candidates. Consequently, a number of Kensington candidates have been engaged by the Company and from my particular perspective I am pleased to record that the retention rate has been 100%, and which I think reflects greatly on the diligence of Kensington in managing both TCL and candidate requirements. All assignments have been managed by Mr P Hodson and his team and in all instances have been handled promptly, professionally and with obvious enthusiasm to meet, and surpass, our expectation. Whilst we do not engage in sole supplier arrangements with our Recruitment partners I have no hesitation in commenting that we regard Kensington as a robust business partner and believe that we will continue to work closely together in the future in achieving the anticipated business growth.

Human Resources Manager

SG operate in the Nuclear Industry providing a consultancy and contracting service in waste management and decommissioning. We have recently worked with Kensington to source successful candidates for two new senior appointments. They have dealt with our recruitment needs in a professional manner, endeavouring to understand our business, providing advice on the best way for us to recruit and providing quality people to satisfy our job requirements. We look forward to working with Kensington again. Infrastructure Manager & Group Security Controller

ur recent business requirement to source a professional candidate to Supervise the CNC machining area, with hands on setter, programming experience, has been efficiently co-ordinated via Kensington Consulting. Kensingtons displayed a high degree of technical knowledge in this field, which helped in identifying the skills and attributes we were seeking. The candidates submitted for interview were prescreened and proved to be of the calibre we required, making the selection process quicker and more effective. The assignment has resulted in the selection of a quality candidate, who we look forward to working with in taking the business forward. Head of Manufacturing

am pleased to write this testimonial for Kensington Consulting on behalf of Weir Minerals Europe Limited. As a manufacturing business within the heavy engineering sector we have been fortunate over recent years to experience a sustained growth in the demand for our products and services leading to a proportionate requirement to increase our workforce. To support this growth it has been vital that we could source the right people, with the right skills, and at the right time. Kensington Consulting has proved to be a valued and reliable partner in achieving this goal. We have found the consultants to be both very professional and knowledgeable in identifying and sourcing appropriate candidates to fill a wide variety of roles in many disciplines. We look forward to continuing to work with Kensingtonâ&#x20AC;&#x2122;s for our future recruitment needs. Yours sincerely For Weir Minerals Europe Limited

Kevin Hargreaves Human Resources Manager

The big picture Survival of the fittest

Andy Neely Cambridge Service Alliance

How do UK manufacturers compete in today’s global economic system? It used to be thought that simply adding services would be the panacea to the competition provided by the emerging economies. But as the IfM’s Andy Neely suggests, it may not be as straightforward as we think.

you can’t compete on price, add value. That’s been the common consensus; creating services is the way to go. After all, we’re all familiar with the plaintive cry that Britain doesn’t make things anymore, that manufacturing is so last century. Our sector’s critics can point to the bald statistic that in the UK alone, more than 70% of people in employment are now working in the service sector. And so it is widely assumed that to survive manufacturers in developed economies evolve, to move beyond mere production and offer services and solutions, delivered through their products. The point is that service and manufacturing are two sides of the same coin. Just under 60% of US manufacturing firms actually offer services, as well as products. Interestingly this figure drops to 30% in the UK. Regardless though, over the last decade the trend towards service has certainly accelerated. RollsRoyce Aerospace no longer sells aero engines, it offers a Total Care Solution, where customers buy the capability the engines deliver – “power by the hour”. Rolls-Royce retains responsibility for risk and maintenance, generating revenues by making the engine available for use. Increasingly boundaries are breaking down between manufacturing and service firms. Other traditional “manufacturing” firms, such as Xerox, have fundamentally reinvented themselves as service businesses, moving away from the production of hardware to offer business solutions. Others have integrated service operations with traditional manufacturing. Anglo-Dutch fuel giant Shell produces oil, yet it also runs extensive service retail operations. Technological developments – especially in data capture and information processing – enable manufacturing firms to develop new business models and products. For example the agricultural machinery manufacturer John Deere has used GPS technologies to create its iGuide product, designed to automatically adjust steering on a tractor to compensate for the drift of implements being towed behind. Other manufacturers have utilised new advances in sensor technologies to create smart components, which can identify when they need repair or maintenance.

So, the developed nations can breathe a collective sigh of relief; we’ve found the method by which to compete with the low cost manufacturers in the BRIC (Brazil, Russia, India and China) economies – service is the answer to our manufacturing woes. Not quite. Just as man cannot live by bread alone, manufacturers can’t depend on service securing future revenues and generating growth, for the benefits of servitization have not been lost on our global competitors. China, for example, has latched onto this strategy of offering value added services coupled to their products. Almost one in five of Chinese manufacturing firms now offer services, up from one in fifty in 2006. We are all aware that manufacturing firms are faced with a struggle for continued existence; the fittest, most adaptable, will survive. It’s the commercial equivalent of natural selection. In order to flourish, UK firms need to continue to innovate and create new and value added products and services in order to compete. All very well, but how do we do this? We need to understand the underlying concepts and complexity of creating service systems. In Darwinian terms, organisms best suited to their environment have a better chance of survival. For manufacturers to create workable, profitable and growth-generating service systems require a thorough knowledge of the challenges they face. This knowledge will help our firms to evolve at a rate to compete with the global competition. We need to identify new ways for suppliers and customers to create, deliver and capture value through partnered services. We need to explore how to sustain and enhance complex engineering systems and assets through life, and we need to measure and manage the performance of complex services, across organisational boundaries. Developing this understanding is vital if we are to continue to stay ahead of the curve in terms of innovation within this sector. The more we know, the more opportunities will become clear and the more growth will be possible. Andy Neely is director of the Cambridge Service Alliance, an industry-led research effort into service science.

For more details visit: www.cambridgeservicealliance.org

Economics The Spending Review hurdle Steve Radley, Director of Policy, EEF

While

all this appears to be good news there is, nevertheless, an underlying feeling of nervousness about economic prospects beyond this year. One of the factors contributing to this caution is the forthcoming announcement of the Comprehensive Spending Review. Looking further over the horizon, there are currently question marks about how the Government will sustain the recovery and support a more balanced economy. But over the next few weeks, we should hear a lot more about how the Government plans to take this forward. Over this period, we should see the Governnent publish its Growth Strategy, its Manufacturing Framework, a White Paper on Sub-National Economic Growth (setting out how the new Local Enterprise Partnerships will pick up the baton from the Regional Development Agencies) and the finally the results of its Comprehensive Spending Review. The last of these will be the most eagerly anticipated as it will decide how much money is available and how it will be spent. Getting the decisions on this right will be critical to the success of rest of the Government’s economic strategy. The Budget statement before the summer provided a pretty comprehensive picture of the process of fiscal consolidation and businesses were not left wondering if there would be more bad news on higher taxes further down the line. We’ve had some of the headlines on spending, but with the Spending Review announcement now a matter of weeks away, is the coalition winning the argument for cuts and will we be left with the same degree of certainty on spending as we have been on tax? There has been more than a decade of real terms increases in government spending but over the course of this parliament this will go sharply into reverse as most departments have been asked to find savings of between 25% and 40%. As the announcement gets closer, there is growing concern about what this will mean in practice. In principle the coalition is right to be ambitious about eliminating the structural deficit before the

Over the past month indicators on the health of manufacturing, including EEF’s own Business Trends Survey, have continued to show that the recovery is underway. Across the wider economy, growth accelerated at its fastest pace since 1999 in the second quarter. end of this parliament. Delivering a competitive business tax system, ensuring our schools provide world class skills and upgrading our infrastructure are all necessary, but much more difficult when HM Treasury’s coffers are bare. But with the foundations of the recovery still looking somewhat uncertain, it will need to be flexible in its spending decisions. However, the starting point of committing to further real terms growth in the health and overseas aid budget combined with a significant reduction in capital budgets wasn’t necessarily the right one. Funding for the areas that will support productivity and long-term growth and ultimately rebalancing across the economy will now have to work a lot harder. That’s not to say it can’t be done. This process is inevitably going to be extremely challenging for the coalition, public services and businesses which count government as a customer. But the Spending Review decision must meet four key tests. Firstly, they must be clearly aligned with a statement on the government’s priorities for rebalancing the economy and a framework for growth. They must also, alongside a raft of reviews and consultations, place a greater emphasis on cost-effective delivery of services, particularly in areas such as skills, innovation and energy. While the Spending Review will also take a long hard look whether there is a role for government in delivering some services at all, it must also think differently about how it can work with and leverage private sector involvement. For example, government R&D spending can complement and increase business investment in innovation and greater use could be made of user charging for some high-value business support. Finally, throughout a period of further significant policy flux, the Spending Review must provide certainty and stability about which programmes and areas of government support will continue to be funded, even if aspects of delivery are subject to further reform. The next few weeks will be an exciting time for policy wonks but more importantly, they will set the course for our economy over this Parliament.

Have your say at www.themanufacturer.com

Thelegallowdown Prepare for a winter of discontent Unfortunately it looks like there could be some frosty conditions this winter. Relationships between employers and the unions are expected to chill as the Coalition government’s cuts begin to bite.

And

it’s not just the public sector that is likely to experience this tension. As we have already seen with the recent BA strikes (among others), the private sector is not immune to the increased threat of industrial action. As the squeeze on public spending filters through to the wider economy the private sector will inevitably be affected. In such an economic environment, manufacturers can be forgiven for looking at efficiency savings of their own. Below inflation pay deals (or pay freezes), laying off workers, reducing hours, redundancies… you can almost hear union leaders dusting off their placards and readying their members for action.

Manufacturers need to be ready Short of capitulating to every union demand, there is no sure-fire way to eliminate the risk of industrial action. However, strike action is usually a union’s last resort and employees will often support a strike because they feel it’s the only way to get their voice heard. To prevent this, procedures should be put in place to ensure employees are kept informed and genuinely consulted about the measures that the business is taking. Especially so they understand the full reasons behind any proposals. For example, if employees understand that temporary laying-off of workers is required in order to prevent redundancies, they are far more likely to agree to it. Sometimes, however, unions and employers are simply not going to agree about the measures that are required. If talks break down, a strike ballot may be the next step for a union wanting to assert its negotiating position. To prepare for this, manufacturers should have a strategy in place that will come into effect when a strike ballot is notified. Unions must give employers at least one week’s notice of their intention to hold a ballot and employers should use this time to persuade employees to oppose the strike. Again this will be easier where employees have been informed and consulted throughout the process and employers can re-emphasise the purpose of the measures they are taking.

Employees should be encouraged to vote as a low turn out could increase the chances of a strike. In addition, employees should be reminded that they will not be paid if they take part in strike action. Due to the complexity of the rules governing industrial action, even if the workforce does vote for a strike, manufacturers should closely examine the procedure that was followed to ensure that it complies with legal requirements. If, for example, the union has failed to notify the employer or has not correctly implemented the balloting procedure then the strike action can be challenged in the courts and an injunction may be obtained. If the worst happens, and industrial action proceeds, manufacturers should aim to minimise the inevitable disruption to their business. Although every effort would usually be made to keep operations running, employers should note that specific rules apply for the employment of agency workers during a strike and so legal advice should be taken before doing this. To prevent dubious cases of sickness absence, employers may also require employees to provide a medical certificate for any period that they take as sick leave during a strike.

Keep talking Whilst industrial action is difficult to predict, there is no doubting the fact that a turbulent winter lies ahead. A manufacturer’s first line of defence should be to ensure that employees understand why particular measures are being introduced. If industrial action is threatened then efforts should be made to challenge such action and the business should make contingency plans to deal with any strikes that do take place. If manufacturers are able to weather these winter storms with minimal disruption, they should be able to look forward to a thawing of relations into the spring.

For more details contact: Leon Deakin, Associate, Thomas Eggar LLP leon.deakin@thomaseggar.com

businessasunusual The search for lean leaders Anand Sharma, Chairman and CEO, TBM Consulting Group

Not

too many years ago it almost always took a life-or-death crisis for management to consider changing from a traditional command-and-control, batch-driven manufacturing company to a lean and agile one. Stacks of material sitting around the factory meant that machines were fully utilised, and warehouses full of finished goods inventory was the best way ensure that you could ship what customers ordered. So the thinking went. Today I’m encouraged to find that there’s near universal awareness that manufacturing companies can operate much more efficiently with fewer assets — equipment, floor space and inventory — and simultaneously serve customers better. It no longer requires a crisis for companies to embrace lean production methods and techniques. There are far too many success stories for any management team to ignore. What is far from universal is the dedication, energy and results that manufacturers reap from such initiatives, which are a direct correlation of management commitment. Ideally, such a commitment comes from the managing director or CEO, who may even be pushed by the board of directors or by investors who expect ongoing operational improvements. Some companies have even recruited people with deep knowledge of lean production methods to serve on their board of directors. Walking through a factory or looking at a balance sheet, they can see the opportunities to streamline processes, reduce inventory, improve customer responsiveness, lower costs and enhance customer value, and thereby grow sales and boost investor returns. And they are searching for and hiring top executives who can also see the same opportunities.

Worth their weight in gold Several years ago the management board of one company that we work with recognised that it was operating at a competitive disadvantage. They looked internally but decided that bringing in someone from outside the company was the only way to make a sharp break from the poor performance of the past. The board of directors found and hired a new president and COO, and charged him with radically improving operational performance.

In the pursuit of operational advantage, knowing what needs to be done is no longer the challenge. The challenge is finding the right people to do it more quickly and more effectively than the competition.

He immediately introduced an enterprise-wide push to implement lean methods and a continuous improvement mindset in all functional areas, not just the factories. They started with intense training and formed cross-functional teams that tackled areas with the highest potential returns. But the results were isolated and progress was too slow. With many divisions and factories, it became clear that breaking from the past would require top leadership changes at all levels. The company then launched a talent initiative to identify managers with the right abilities and character traits to lead a lean organisation. Having a management team that “got it” attracted highly talented people from other organisations, which created its own challenges. New hires, who eventually added up to more than 150 continuous improvement managers, had to bring something more than thorough technical knowledge of process improvement tools. “There are a lot of people who can say the words,” the former president and COO once told me. He is now the CEO and chairman of the board of this company. “But individuals who can really change a factory, or change a business process, are worth their weight in gold. They can move an organisation to a level no one ever thought it would get to.” Six years later this company has improved on-time delivery by 10% and consolidated a large number of facilities while increasing revenues at a pre-recession compound annual rate of 20%. And the now CEO says they’re really just getting started. The challenge, of course, is to build an organisation that adapts and improves every day. Daily incremental improvements add up to radical improvements after a few months. Even if every idea doesn’t work out, by discovering what doesn’t work people can more quickly move on to the next opportunity. The net result of such gains, when coupled with breakthrough projects, are significant cost advantages that boost profit margins, or that extend product or service level advantages — such as faster lead times — increasing sales and growing market share. Reaping the full financial returns from such advantages before your competition catches up in this non-stop race requires dedication, energy and results. And you have to keep getting there first.

Have your say at www.themanufacturer.com

Innovation and design ATB Morley Bankside Patterson HMD Seal/less Pumps Ltd Robert McBride Ltd Transdek UK Ltd Xtrac Limited

On Thursday 18th November at Chesford Grange, Kenilworth, we will announce the winners of the 2010 Manufacturer of the Year awards. People and skills Alumet Systems (UK) Ltd Constellation Wines, Australia & Europe Clyde Union Ltd Gripple Ltd Inspirepac Limited Morgan Motor Compnay Seven Seas

Financial Management DavyMarkham Ferranti Technologies Limited Ultraframe (UK) Ltd

Leadership and strategy Clyde Union DavyMarkham Ltd Robert McBride Tamar Foods Willerby Holiday Homes Ltd Xtrac Limited

Manufacturing in Action Aesica Pharmaceuticals Limited Howden Compressors Ltd Michelin Tyre Public Limited Company

IT in manufacturing Castle Precision Engineering CorinTech Ltd Drallim Industries Limited Fairfax Meadow Europe Ltd Independent Forgings & Alloys Permastore Limited

18/11/2010 Supply chain and logistics Catalent Pharma Solutions Elekta Jaguar Cars & Land Rover Joy Mining Robert McBride Ltd Shepherd Neame

It’s one of the biggest nights in the manufacturing calendar. Book now to be part of it. World Class manufacturing AWS Electronics Group Ltd New Holland Tractor Plant - CNH UK Ltd GKN Wheels Joy Mining Robert McBride Ltd Willerby Holiday Homes Ltd

Advanced manufacturing DavyMarkham HMD Seal/less Pumps Shearline Precision Engineering Ltd Willerby Holiday Homes Xtrac Limited

Operations and maintenance DavyMarkham Diageo Packaging, Runcorn Kostal UK Ltd Linpac Storage Systems Willerby Holiday Homes Ltd

Sustainable manufacturing Avon Metals Ltd Boss Design Constellation Wines, Australia & Europe Hampshire Cosmetics Limited Johnson Tiles Sonae Industria (UK) Ltd

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

Corporate Sponsor:

Best SME Castle Precision Engineering (Glasgow) Ltd Frank Dale Foods Ltd KK Fine Foods Plc SMP Group Swanline Print Ltd Xtrac Limited

Booking information: Tables of ten: £1,200 + VAT Individual tickets: £150 + VAT Contact Benn Walsh, telephone: 0207 401 6033 or email: b.walsh@sayonemedia.com

www.themanufacturer.com/awards

RegionalFocus In association with:

South West The South West of England is not renowned for being an industrial heartland. But by contributing 13% to the region’s economy, the manufacturing sector punches above its weight in the West Country. Will Stirling reports.

SW manufacturing in brief Manufacturing contributed about £12.4bn to the South West economy in 2007, 13% of the total (Source: ONS. Regional data is only available as recently as 2007). Manufacturing accounts for 10.7% of all employment in the region (10.1% nationally). Employment in the sector has declined by 10.7% between 2003 and 2008 (28,700 jobs), less than the national decline of 16.7%. Gross value added (GVA) produced by the manufacturing sector has grown year-onyear, suggesting big gains in productivity. Biggest sub-sectors in the region are food and beverage (31,500 jobs), transport equipment (30,300 jobs), machinery and equipment (27,000 jobs) and fabricated metal products (25,600 jobs). The South West has a greater concentration of employment in advanced engineering sub-sectors, i.e. electrical machinery and apparatus, medical, precision and optical instruments, transport equipment, and radio and communication equipment.

There

are 12,000 manufacturing companies employing almost 225,000 people in the South West region, around 20% of which are in Devon and Cornwall. With strong aerospace, marine and defence sectors, and plenty of food companies, South West manufacturing gross value added amounts to £12.4bn, or 13%, of the regional economy. Between 2003 and 2008, manufacturing employment declined by 10.7%, some way short of the national average (whole UK) of 16.7%. Regional data service South West Observatory says that while the South West economy contracted by around 5.9% in real terms between 2008 and 2009, the region’s gross value-added (GVA) is projected to grow by 1.4% during 2010 and by 2.3% during 2011. Manufacturing showed the strongest recovery of all sectors in the recession-busting Q3 2009, rising 0.8%. Employment in the SW economy as a whole is projected to be stagnant overall during 2010 and 2011. Compared with locations across the European Union, the South West is a veritable specialist in aerospace and ship building and repair. Where a location quotient of 100 is average, the South West scores 580 in the former and 385 in the latter. A throng of famous inventors and scientists hail from the West Country, including Sir Humphrey Davy, Sir Isaac Pitman, the weapons inventor Henry Shrapnel, and James Dyson (although born in Norfolk, he lives in Gloucestershire). The region upholds this tradition for innovation well, with world-leading high technology companies like Airbus and EADS, Dyson, GKN, Honda, Moog Controls, Renishaw and Spirax Sarco located in the counties east and

RegionalFocus South West

Wave project not a hub of manufacturing The South West RDA’s Wave Hub marine energy project was installed on the seabed 16km off the north Cornwall coast in September. Wave Hub is a grid-connected socket on the seabed to which wave power devices will be connected and their performance assessed. According to the SWRDA, nearly 1,000 of these jobs and £332m could be generated in region by Wave Hub, although there is no manufacturing breakdown. “Although it is ground breaking technology, it has some way to go before it could be something which would attract sizeable manufacturing interest – the market is just not there yet,” says EEF’s Clive Turner. “However, the wave hub development project puts SW England at the forefront of marine renewable energy technology and could end up being a world-beater, but only if the government – via further funding in the absence of SWRDA, as it’s not very likely to come from any LEPs – has the commitment to see it through.” south of Bristol. The city is the home of the £25m National Composites Centre (NCC), part of the UK Composites Strategy launched in Nov 2009 at the height of Lord Mandelson’s industrial activism. Partfunded by central government and the South West Regional Development Agency (SWRDA), the 6500m2 centre’s work will benefit sectors including aerospace, shipping and automotive. Airbus is looking at establishing a full-time research presence at the NCC.

West Country optimism According to Clive Tucker, EEF’s head of external affairs for the SW Region, optimism among manufacturers in the south west seems to be rising, with improving output and signs of growing future orders. The most recent EEF/BDO survey showed that manufacturers in the region are continuing to enjoy good trading conditions on the back of strong demand in overseas markets. Public spending cuts from both the Comprehensive and Strategy Defence and Security Reviews will hit key sectors for the region such as defence – helicopter maker AgustaWestland’s UK plant is in Yeovil and defence contractor Babcock has manufacturing facilities in Bristol and Plymouth (Devonport Marine). But there are some very exciting opportunities opening for manufacturers in sectors that are knowledge-intensive and high-value. Regional commentators say these will help shape a more competitive future regional economy. Recent research by EEF showed that one in seven firms are bringing production back from overseas, in part reflecting disappointment with the cost savings and quality standards achieved by their investment abroad and concerns over getting products to market fast enough. But it also shows that more manufacturers have found that they can compete from a relatively high wage cost location like Britain. Bournemouth-based manufacturer of geared motors, Parvalux, has transformed its fortunes since 2006 by buying a rival, quadrupling output and exporting

Key people Terry Slater, South West Region Director, EEF Terry Slater is the South West Region Director for EEF. He graduated from the University of Nottingham with a first class degree in Business Studies, before going on to run the personnel and HR divisions of GEC (Stafford), Ferranti International and Devonport Management before joining EEF in October 1998. Terry’s other appointments include CBI Regional Council member chairman of the SW Investment Panel. Terry Slater, South West Region Director, EEF Simon Howes is the recently appointed Managing Director at the Manufacturing Advisory Service in the South West (MAS-SW). Having joined the company when it launched in 2002, Simon’s experience spans 25 years in the industry. Simon commented, “Taking up this role against a backdrop of a rapidly changing landscape for manufacturing is a hugely exciting challenge. Looking to the future, our focus is to continue our hands-on support for manufacturers in the South West as they grow and look for new market opportunities, and of course promote the need for manufacturing transformation in the region at this current time.”

to Germany among other markets (see profile on page 155). Exchange rates remain positive for exports, with around 90% of manufacturers involved in exporting, and over 40% deriving more than half their turnover from overseas markets. In the past four years emerging market opportunities in regions such as

Ones to Watch – Renishaw Renishaw PH20 head touches

The metrology equipment specialist has had a brisk start to the new financial year (July 2010). “We have had strong demand for our metrology products across our main geographies, particularly in Japan and the rest of Asia,” says group marketing services manager Chris Pockett. “Revenues have been about £20m per month in July and August and the order book at September 9th stood at approximately £25m.” While the Glos-based company had to lay off several hundred staff during the recession, over 250 people have been recruited globally since September 2009 and there are currently 200 vacancies within the Renishaw Group, 108 of which are in the UK. In July, the company acquired a 29% stake in Measurement Devices Ltd, a manufacturer of eye-safe, laser-based, timeof-flight measurement systems for £2.3m, which includes first options on future share purchase.

SouthWest - SME Nibs The Barden Corporation in Plymouth was bought by Shaeffler in 2001. It specialises in the design and manufacture of super precision ball bearings in sectors from aerospace bearings to high performance machine tools. Engineering group J&S Ltd in Barnstaple were winners in the ‘Under £25m turnover’ category, West of England Business of the Year Awards in June. Takao Europe Manufacturing, a manufacturer of high quality metal pressings and sub-assemblies in Brockworth, Glos, is recruiting toolmakers and machinists for its die maintenance department. Plymouth-based Rittal-CSM is a subsidiary of the Rittal Group, the largest manufacturer of industrial and data communication enclosures worldwide. Employee Ian Meiklejohn recently designed and made a sign on the Trumpf laser for the Thornbury School.

the Middle East and Asia have grown and 80% of manufacturers say they aim to continue to extend their reach into new export zones. Some of the South West’s key manufacturing strengths are: Aerospace – this world-leading sector continues to attract international investment. Low carbon and energy – the South West, and Cornwall in particular, is important to the UK’s energy strategy and is the UK’s first Low Carbon Economic Area. The Wave Hub project was ‘plugged in’ to the national grid in September. Investment is coming into other energy sectors. In May,

Exeter company Antech received a £100,000 grant from the SWRDA to develop a new drilling tool to tap into the most difficult to reach pockets of oil and gas. National Composites Centre – due for completion in summer 2011, the work of this centre in Bristol, the design and manufacture of composite materials, will disseminate through the region and the country. The Plymouth Science and Innovation Centre – a project to support enterprise in marine renewables, engineering and marine sciences. Aerospace has a deep footprint in the South West. Airbus employs 4,000 people at its Filton plant, which manufactures wings, engines fuel systems and landing gear systems and integration for the long-delayed A400M military aircraft, plus test rigs for the A380 platform. It also hosts Innovation Works, which is parent company EADS’s research and production facility, headed by Dan Johns. GKN purchased much of Airbus’s manufacturing plant in 2009. The West Country engineering group is going great guns, launching a fourth division, GKN Land Systems, which brings together Off-Highway, GKN Aerostructures and GKN Industrial and Distribution units. Led by managing director Andy ReynoldsSmith, a former member of the Ministerial Advisory Group for Manufacturing who is still involved in advising BIS on the new Manufacturing Framework, its remit is to develop next generation technology that will likely evolve in the future. The company is looking to more than double current annualised divisional sales of £700m within five years. GKN reentered the FTSE 100 in September following a six year absence, ousting fellow engineer Tomkins plc. GE Aviation (Dowty Propellers), based in Cheltenham, makes aircraft propellers and employs around 1,300 people in Gloucestershire. In July it announced it will build a 30,000 sq ft R&D centre, the electrical power integration centre, which will focus on advanced power generation, distribution and avionic control technologies (see interview with GE UK’s boss

South West regional focus

Mark Elborne on page 24). Messier Dowty, part of the French Safran group, conducts R&D, testing, assembly, processing and systems integration of landing gear for a large number of aircraft platforms at a 44,000m2 site near Gloucester. That site employs 945 people. Moog Controls in Tewkesbury is part of US motion controls group Moog. Moog Tewkesbury has driven an internal business improvement strategy for the last three years, using cost identification programme combined with internal strategies like new product introduction and lean (see TM July for a full company profile on Moog UK). The South West of England has always had strong maritime ties, which is reflected in its vital marine industry. Motor yacht builder Sunseeker remains at the top of the British leisure marine industry. The Poole-based kingpin of the British Marine Federation (BMF) has won several Queen’s Awards for Enterprise, in Exports and Innovation, and co-owner Robert Braithwaite, who stepped down as managing director in December 2009, is a former Ernst & Young Entrepreneur of the Year. The company has remained in the affluent Dorset town throughout its 36 year history and today employs 2,300 people. It turned over £303m in 2008/09 – an increase of 3.4% on the previous year and the firm’s best ever result. Private equity firm FL Partners bought a majority stake in the company in May. Rival boat builder Princess Yachts in Plymouth has had a positive year, launching the Princess 32M at the Southampton Boat Show in September. In March Princess, owned by the luxury goods group LVMH, announced the three-phase redevelopment of its 15 acre South Yard site, enabling the company to manufacture yachts in the +100 feet market. On September 22, managing director Chris Gates was awarded an Honorary Doctorate in Business from the University of Plymouth in recognition of the company’s contribution to the local economy. Another important BMF member, Halyard, is Europe’s largest designer and manufacturer of specialist marine exhaust systems. At the Monaco Yacht Show this year it launched PureGen, the world’s first compact soot cleaner for marine generators, a product which helped it to win the Queen’s Award for Enterprise, in the Innovation category, in 2010. In February, luxury yacht builder Pendennis in Falmouth acquired Devonport Yachts, owners of the Devonport superyacht brand, making it the only devoted superyacht builder in the UK. Food and drink companies feature prominently in the region. From humble beginnings in 1974, family-owned Yeo Valley’s four site operation generates annual turnover approaching £200 million and employs over 1,200 people. The two yogurt dairies at Blagdon and Cannington fill around eight million pots of yogurt a week. Constellation Park in Avonmouth is Europe’s biggest wine bottling operation and a monument to lean manufacturing and processes – the site has been short listed for

Ones to Watch – Spirax Sarco Steam and condensate engineering firm Spirax Sarco is investing nearly £25m to consolidate and modernise its manufacturing facilities in Cheltenham. The ‘Unity Project’ will bring its existing manufacturing and R&D operations at three sites around Cheltenham onto one site at Runnings Road, ensuring that manufacturing operations are more environmentally-friendly. New green efficiency measures include upgrading the energy management of the site beyond current regulations with building insulation, daylight lighting and automatic, low energy lighting. “We are determined to further show our commitment to sustainability within this project, which is why we have put lower environmental impact high on the project’s priorities,” says Marc Eggermont, Director of Spirax Sarco UK and RoI.

EEF/BDO South West survey results % balance of change

Past 3 months Next 3 months Output

Total orders

Employment

Export prices

-9

Export margins

-8

Cashflow

three Manufacturer of the Year Awards (see profile in TM September). Part of the Samworth Bros group, Ginsters is the biggest selling pasty maker in the UK and has an average output of 3.2m individual items per week from its factory in Cornwall. Without doubt Malmesbury’s most famous manufacturing son, appliances manufacturer Dyson is seeking to double its engineering staff in the UK to 700, taking its total UK headcount to 1,600. Founder James Dyson published a paper this year, Ingenious Britain, which calls for education reforms and higher R&D tax credits to make the UK Europe’s leading high tech exporter. Last month Siemens Traffic Solutions in Poole won the Factory of the Year 2010 at the Cranfield Management School/Works Management Best Factory Awards. By using lean manufacturing processes over the past two years, the business has increased its turnover from £15m to £21m, without increasing its workforce of 120.

Have your say at www.themanufacturer.com

Since

Elborne

identity Mark Elborne runs the UK division of a company employing 18,000 people, in 60 locations with 25 manufacturing sites in the UK. Will Stirling asks the chief executive of the acquisitive GE UK how manufacturing is helping the corporation to grow and provide new solutions to societal and environmental problems.

its arrival in the UK in the 1930s, GE, the more common name for General Electric, has invested a big stake in British manufacturing. A series of acquisitions and its strategy to operate in sectors with strong, stable demand globally has fuelled GE UK’s growth. From 2000 to 2008, GE UK revenues multiplied from £900m to £4bn. The company has performed solidly through the last two years, more or less retaining its UK headcount – the firm’s largest outside the US – throughout the recession. The sectors it operates in are robust and, with the exception of financial services, comparatively resilient to recession. GE has five subsidiaries: GE Energy, GE Technology & Industry, GE Capital, NBC Universal and GE Home & Business Solutions, the first four of which have a UK footprint. Mark Elborne took the reins as president and CEO, GE UK, in April 2009, arriving from Brussels where he was vice president and General Counsel, Europe and European Regulatory Affairs, GE International. Elborne, an alumnus of Exeter University and The College of Law in London, spent 24 years at an international law firm, 16 years as partner. He joined GE in 2004, working for GE Insurance Solutions in Kansas City. As a lawyer, manufacturing production systems and ‘just-in-time’ processes are not his forté. Specialising first as a litigator, however, his career has exposed him to the blood and guts of some big companies, both their inner mechanics and how to fix complex problems. “I was involved in some large, complex cases which meant sorting out very big messes – that gives you advantages,” he says. “You learn about the underlying nature of the business in question, as well as how businesses get bought and sold, the financial dynamics of a company, and you’re always involved in the law of regulation.” A cool customer with a very wide view of the business world, Elborne has always had a strategic approach to his work. The skills needed to forecast the outcomes of legal disputes translate well into corporate management, he says. “What you learn is that business is organic and dynamic and never stops; it’s not birth, marriage and death. When you take that [legal training] into the role of General Counsel of a GE business, which is very strategic, I have not found it difficult to transition into the role of CEO. The job involves many disciplines; a legal background helps, it makes you inquisitive, you want to understand concepts, ideas, operations and procedures.” Outside the US, GE’s biggest footprint is the UK. Why? “Since 2000, we’ve built-out our existing businesses and broadened our industrial, financial and media businesses and certain industries have gravitated to the UK and London – for example, NBC International is headquartered in London. CNBC is here and GE Capital has its HQ here. Also we’ve made many acquisitions – we bought Smiths, Amersham, Whatman; about 12 names in different sectors, public and private. We’ve found that UK technology companies have had a lot to offer and have been complementary to our growth strategies.”

Interview Mark Elborne

Where is GE focusing its resources? “Infrastructure and finance. We are reducing our ownership of NBC Universal to 49% subject to regulatory clearance. The target is infrastructure, Aviation, Healthcare, Energy, Oil and Gas, Transportation, Home & Business Solutions – which includes the appliance business in US and industrial software – and Water. Where are the key investments going to be in the foreseeable future across the world, where is the need for the most investment?” How do you assess the strength of the UK manufacturing sector? The ‘magic sauce’ is in both the IP of the product, and the knowhow of the people. We have many businesses here because is this is where good businesses have grown. You buy a company that has developed a product, they’ve lived with it, developed it, grown it and they understand it. As a country, we have to continue to invest in making sure that we are creating manufactured value-added products. Therefore we have to invest in the education, training and incubation of the next generation of people who are going to grow these businesses.

Aviation Elborne mentions GE’s Aircraft Engine Servicing facility in Nantgawr, Wales. “The apprenticeship scheme is up to five years. Young men and women are being trained on highly skilled engineering where they strip down, refurbish and rebuild engines that cannot perform unless they have a 99.9999 recurring reliability. You must continue to bring those people in; if you don’t have that continuity the brains that came with the acquisition or the business you’ve brought into GE will be lost.” At present, GE’s Nantgawr site is the only aircraft engine servicing facility in the world catering for the Airbus A380’s Engine Alliance GP7200 engine, one of just two engine types airlines can select to use on the superjumbo. Big orders for the A380 placed at the Farnborough International Airshow

David Cameron talking to two aircraft engineers at GE Aviation’s Nantgarw plant

gave Nantgawr a fillip, but the gain is long game – the engines don’t arrive for regular overhauls until they have been in service for a few years. But it emphasises this site’s competitive advantage and long term security. Including its joint venture engine with Snecma (Safran), GE announced total sales of $16bn at Farnborough, twice the order book at Paris the previous year and four times that at Farnborough in 2008.

Long termism retains staff A factory at Arle Court in Gloucestershire was closed in 2008, with the loss of 110 jobs. But overall the company’s manufacturing headcount has remained level through the recession. “We have not had to take radical action. In fact, there are several UK sites where we have increased hiring because we have kept production here rather than moving to lower cost places.” This reflects the nature of its main products. “These are long cycle businesses and large order books involved in global supply chains, so you have a very broad base,” says Elborne. “In our infrastructure sector, for all the difficulties that Western economies have had, there’s still been fairly robust growth in Brazil, China and India. And there’s a whole new generation of technology required, especially in the energy space to reduce carbon emissions, greater energy efficiency, carbon capture and storage, open rotor technologies, et cetera. We have to continue to invest beyond the short term cycle, so we are in a position to have the best technology going forward.” Why have some production facilities been retained in the UK and not offshored? “The transportability of technology and process, where the market is developing – there are a range of reasons. We tend to co-locate around an area that becomes a global centre of excellence for a product, and there are 15 of these in the UK. In our oil and gas business we bought a UK company called Sondex that makes technology installed in

the drill head that receives material and directs the drill. Its site in Farnborough is now the global centre of excellence for that technology. GE brings in (i) the investment to create a product better (ii) the customers to see it and (iii) our employees from other parts of the world to drive growth, expansion and sales.” Further investment: “Bristol will become the global centre for our subsea controls business, because that’s where the product development will take place. The investment for hyperbaric chamber has been committed to and is now being put in place. “We are building new oil and gas facilities in Montrose. Sure, there’s a lot of pressure because of the state of the economy but we’ve continued to make those investments in industrial infrastructure for manufacturing right through the dip, which is consistent with taking a long term view.”

En Gen “This is the only country in the world outside the US which has a Smartgrid demonstration centre,” says Elborne. “Smartgrid balances supply and demand and optimises the grid so that overall it requires less base load generation, leading to a reduction in the number of power stations. Nuclear is long way away. A lot of renewables are coming on board and investment is needed to enable UK

EEF TM Half page final.indd 2

lights to stay on and support demand. We invested in a battery company and we’re building batteries essential to next generation energy storage. We have the technology that operates about 90 per cent of the grid that will be key to working out how you distribute that energy. We’re investing heavily in solar in what we think will make a difference to energy generation.” Earlier this year GE announced that it would build offshore wind turbines in the UK. Wind has always been a big resource in the UK; what made GE announce a manufacturing plant here this year? “The development of the round 2 and 3 offshore wind farm leasing and the future growth is a driver,” says Elborne. “Clearly the support provided by the last government in their Budget is crucial in helping the UK to be competitive against other places where you could build a manufacturing site to support the wind industry.” The Budget announced a competition where port developers with manufacturers could apply for funding to help develop port infrastructure, enabling the manufacturing and the deployment to take place. Would he be surprised if they cancelled it in the Spending Review? “I would be disappointed, but I think everything is on the table,” he says. “We are anxious of there being the support for infrastructure; it’s for the people who own the

28/9/10 10:51:31

Interview Mark Elborne

sites to make sure they are upgraded. I’m told the generators on these turbines weigh 100 tonnes, the blades will be up to 100m. You need deep water, long quay walls, good access – the UK has not invested heavily over a long period since we privatised the ports. In Europe, many ports are owned by the state or principalities, and everybody in Europe is anxious to get hold of manufacturing.”

Biography Mark Elborne 1979:

Honours degree in History and Politics, Exeter University

1979-81:

Studies at the College of Law of England and Wales, London

1981:

Qualifies as a solicitor. Joins Hewitt, Woollacott and Chown in London

1984:

Becomes senior partner in insurance and reinsurance group at Cameron McKenna

1989:

Hewitt, Woollacott and Chown becomes Cameron McKenna

2004:

Joins GE as European Vice President and General Counsel of GE Insurance Solutions in Kansas City, US

2006:

Becomes VP and General Counsel, Europe and European Regulatory Affairs, GE International, Brussels

2006:

Becomes President and chief executive officer of GE UK

Mark Elborne is president and CEO of GE UK. He previously held the position of Vice President and General Counsel, Europe and European Regulatory Affairs, GE International, Brussels. Here he was responsible for leading the company’s legal and compliance functions and regulatory affairs in Europe. Mark is married with five children and lives in the UK.

Witness the fitness GE Healthcare’s global HQ is near Amersham, Herts, and GE bought medical diagnostics firm Amersham in 2003. Its core product is contrast agents, as opposed to hardware, which are used in procedures to highlight body organs. “The product is a critical component to the development of treating degenerative problems like Alzheimer’s disease,” says Elborne. “GE was better known as an equipment manufacturer, and that [Amersham] gave us a real link into the biosciences. We’ve invested in the UK, including buying filter-maker Whatman two years ago, to broaden the technology offering across healthcare.” He says the developing world is a key driver for this business. “If you’re going to drive healthcare in the developing world you need to produce effective technology that they can afford. We’ve been quite successful in what our chairman calls reverse innovation: taking a product that was previously designed for and replicated for use across developed markets, scale it down and ensure it is responsive to the needs of a country with less money and other challenges.” An interesting example of reverse innovation is the Vscan, a small ultrasound scanner designed to help diagnose complications in the first trimester of pregnancy. “In India, for example, the nearest clinic could be three days away and then there’s a queue round the block. Instead, a doctor goes to the village and can diagnose the condition’s severity on the spot. Now what does every GP want? Ultrasound that they can carry in their bag.” GE is a sponsor of the London 2012 Olympics. GE Jenbacher co-generation technology has been selected to power two natural gas energy centres being built at the Olympic Park and Stratford City development. “We’re providing the polyclinic for the athletes and we’ve also extended our sponsorship to the UK triathlon team, developing techniques that can help measure various body recovery parameters, blood density, bone density – so that they can train right to the edge before it gets dangerous.” Which GE UK businesses should we look out for in next 12 months? “Watch the recovery, and the development of the technology manufacturing and research we do here. We’ve created a P&L around cities, connected to our ecomagination strategy, so watch how we begin to deploy cutting-edge solutions to some urban challenges. How do you address the great challenge of energy efficiency in buildings? How do you make hospitals more energy-efficient, how do they reduce their opex? The plan is to look for new concepts and trials right across the board where the goal is driving efficiency, green, and saving money. It’s new ways to do old things.” “Innovation is as much about new ideas as products. Therefore it’s about making the UK a place where you can demonstrate something that becomes an exportable idea. Yes there are some projects we’re looking at where if we can pull them together they will be accretive to the UK manufacturing base.”

Have your say at www.themanufacturer.com

Ready,

Reset,

GO!

TM’s September article A year on showed conclusively that times are a-changing for manufacturing in the UK. But how should organisational leaders arm themselves to meet these changes with confidence and what are the key characteristics which will differentiate industry champions from laggards? TM explores further what can be gained from attending industry conferences and what experiences speakers hope to share at our event this year.

To find out more about MDC 2010 and the networking and knowledge building opportunities available visit: www.themanufacturer.com/events or contact Jon Tudor, head of events at SayOne Media: j.tudor@sayonemedia.com

Richard Holland, managing director, TBM

For the first time this year TM will be providing the opportunity for MDC conference delegates to attend a pre-conference day of workshops and practical learning sessions in addition to the main conference programme. These workshops will have limited entry but, for the exclusive cohort that attends, there will be a chance to share in focused discussion and professional development. Richard Holland, vice president at TBM consulting, will be delivering one of the workshops and he spoke to TM about the challenges he sees facing the competitive

strength of individual companies and British industry as a whole.

meetings and meeting method for better root cause analysis of problems.”

“In really successful organisations we are seeing maturation from performance measurement towards management systems,” says Holland. “To support this, companies need to ensure that the business strategic direction for growth is tied to the lean or six sigma improvement programme and this will necessitate that manufacturers cease to see the lean path as a progression through a tool set.

Holland identified a historical problem with a manufacturing management culture of fire fighting and blame which tends to hamper the establishment of this new approach to management.

“The mainstay of sustainable improvement [and therefore the maintenance of competitive advantage] is transparent daily management – how to establish this and develop the right management characteristics is one of the major pieces in the workshop I will deliver at MDC and we will touch on how to establish the right KPIs and cascade them throughout an organisation but then also how to sustain frequent

Speaking about some of the broader developments in UK industry Holland did not hesitate in highlighting the escalating need for collaboration with customers. “Sales revenue growth for UK manufacturers is now all about customers,” he says. “One of the unique competitive edges that we have in the UK is that we are generally closer to our customers than competitors in the east. We need to leverage that by being far closer to what the customer wants and to be intuitive about the way trends are moving.” The MDC and workshops will provide a rare opportunity for senior manufacturers to get away from the pressures of their day to day and discuss in-depth how this can be done.

Specialfeature MDC 2010

Mike Price, former CEO, Ultraframe On the main day of the MDC 2010 Mike Price, former CEO of conservatory manufacturer Ultraframe will share his experience of transforming the company’s competitive confidence through iterative improvements to operations then product and now services. “When I joined the company in 2005 there was an existing belief that we were the best in our field but taking a data based approach proved that really we were only average. Since then we have used the structure of our Vision programme to drive improvements into the way we operate and innovate. We won the Best Factory Award for Best Engineering Plant in 2007 and more recently we won the Shingo prize for operational excellence. “Our next steps are focused on the character of our business and our service excellence capabilities. This will be the key differentiator between competitors in industry as we move forward.” Ultraframe are taking a very structured approach to their progress on this – based on the lean principles and improvement methodologies that they have had such success with in the past. “The company has been built on a strong, engineering led tradition. These skills are very important but what we need to do now is change our

perspective. The tables are turning so that we no longer develop our products and push them to market but rather to understand our customers and markets and pull through products for them.” On the benefit of attending conferences in order to learn about industry developments Price said: “Of course there are always ongoing themes but, speaking personally, I have always learnt something new. Perhaps most importantly though conference have given me the opportunity to get away from the day to day of business, into an environment where I can think more clearly. This brings valuable perspective. Not enough senior manufacturers, CEOs and so on, take the time to get out of the business as much as they should do – but this only leads to them falling into fire fighting modes and this does not help you to drive the right behaviours or take the right decisions.

Steve Nevey, Business Development Manager, Redbull Racing The glamorous world of Formula 1 racing may seem to be removed from the day to day pressures and financial limitations of the mainstream manufacturer, but Steve Nevey, business development manager at Redbull Racing, is keen to explain how he believes the F1 industry’s fast paced microcosm can serve to surface manufacturing trends and bring clarity to challenges that are buried beneath the complexities of interconnecting marketplaces. “I know that many of the circumstances under which Formula 1 operates are very different to what most manufacturers have to cope with. I am not aiming to stand on a podium and say that I know what everyone should do for competitive advantage. But I would suggest that our world of condensed demand and competition might show up manufacturing problems in a clearer light. “For example, we have noticed an increasing need to leverage

capabilities from inside and outside the business to make sure that all our functions are performing with reference to the highest expertise you have available. If we don’t do this we don’t keep winning and I suppose that is a powerful analogy for competitive differentiation that will apply just as much in mainstream industry. “For instance, one thing we are extremely good at is taking a given device, understanding it inside out and optimising it for the highest possible performance. For us, that device has always been our racing car but, as with some other core competencies, we have not always been very good at taking that approach throughout the business – for example from the point of view of the use of our manufacturing equipment. “I assume that other industries experience this same problem of finding that they have pockets of their business where they are brilliant at what they do but that other areas of their operations are

not aware of how they can use those skills. We have taken this issue on board and taken our solutions a step further by collaborating with talent from outside the business to further improve our own performance. In order to be the best we need to be attentive about finding the areas where we are not as good as we could be and do everything we can to bridge that gap. How to start understanding your capabilities inside out is one of the main things that I would like to share at the conference - other points are around how our direct relationship with our customer and our approach to knowing exactly what our competitors are doing can have incredible impact on the way we perform in a race or over a season.

What are you

For years manufacturers have been fretting over the size of their packages. Simply taking weight out does not necessarily constitute a lower environmental impact, though. Mark Young seeks out alternatives.

Manufacturing

companies, regardless of sector, are under both financial and environmental pressure to reduce their packaging. For some products, though, to do so can mean compromising quality to the end user – unacceptable when quality is often a market differentiator. Swapping one material for a lighter one could even be a false economy. Coffee maker Kenco crowed about its new plastic Eco Refill, which it claims are 97% lighter than glass and require 81% less energy than the old glass and plastic jars. There is also the fact that the packs are refillable. However, they require specialist facilities to recycle them, and users are encouraged to send packs to a company called Terracycle who’ll make some rather odd looking bags, pencil cases and umbrellas with them. If coffee-cup chic is the next big thing on the catwalk, the project will be raging success. If it isn’t, we’ll have to do a more thorough audit on the pros and cons.

Finally, some firms may have gone as far as they can go. At the beginning of 2008, PepsiCo UK, the owner of Walker’s crisps, vowed to reduce the weight of the nation’s favourite savoury snack packets by 10%. In its first year, though, it achieved only 2%. This was by removing two and a half millimetres from the end seals of the packets. In the end of year report it stated that although this initiative had prevented the emission of 1,400 tonnes of CO2 and saved it £1m, its current plans did not put it on track to meet its target. Indeed, as of now, no further action has been taken, and no further reductions have been made to date. The company would not be drawn on why it has achieved only 20% of its target, although it was keen to point to its myriad of other environmental initiatives,

Sustainable manufacturing

including shrinking the cardboard boxes it uses which saved 4,500 tonnes of annual corrugate and reusing the water it makes crisp with. So now the focus has shifted away from just weight and toward a much more holistic approach. Testament to this is Phase 2 of WRAP’s voluntary Courtauld Commitment. Thirty-eight of the UK’s leading brands and retailers have signalled their kinship with the commitment and its targets – including reducing the carbon impact of packaging by 10% by 2012 – as of the beginning of September, including PepsiCo, as well as Britvic, AG Barr, Nestlé UK, Premier Foods and Unilever UK. “Courtauld Commitment 1 was about less packaging,” explains WRAP’s Peter Skelton. “Courtauld Commitment 2 is about smarter packaging.” So, how then? To start with, companies can reduce the impact of their transportation packaging by swapping traditional wooden pallets for reusable ones – such as those supplied by wire fastener manufacturer Gripple’s sister company, Loadhog. The Pally is a stackable plastic pallet system – completely made out of recycle materials – which can take up to 500kg of weight and can be turned from a stationary stack into a moveable one by lowering wheels with a foot pedal. The company also makes plastic lids with retractable, hooked straps which can be used with the plastic pallets or just on its own with standard UK and European-sized traditional wooden ones. This completely takes away the need for any shrink wrap or binding, making it completely waste free, and significantly lowering the chance of shrinkage. As there is no need for roll cages, you can fit 64 pallets in a standard truck using Loadhog’s product instead of the 40 – 45 you’d get with standard pallet, which lowers road miles, too. And manufacturers who use corrugated boxes can become more efficient by taking control of their own packaging needs instead of outsourcing. Here, Swedish-founded company Packsize says it can help. They’ll install a machine in a factory for free which allows companies to create right-sized boxes as they are needed. Turn to page 34 for their testimony.

Painting a different picture Mostly, though, it’s about taking inspiration from others. Crown Paints, for example, has been hard at work over the last few years and have come up with a number of ideas on how they can improve. Paint traditionally only comes in two types of container: metal and plastic. Someone at Crown Paints, who may or may not be fond of the odd tipple or two, has suggested the company looks into bag-in-a-box style packaging, a suggestion the company is duly considering, but there are no plans as of yet for this third option to trouble the status quo. Paint is one of those things where it is probably best to adopt a ‘better safe than sorry’ approach. It’s heavy, for a start, and even the most talented of

cleaners will shudder at the thought of it spilt. And this means packaging must be nothing less than robust. Crown Paints has nonetheless managed to reduce the weight of its metal containers. By working with UK company, Impress Packaging, it has taken 50% of the tin plate out of its two litre pack and 30% out of its five litre one without affecting the integrity of the container. But this is not where most of its attention has been directed. The company has made a closed loop for the recycling of both plastic and metal containers, and has now begun operating a ‘can back’ return scheme. Used largely in the trade arena, purchasers can bring back empty cans that, if they are metal, go back through to smelting and if they are plastic be re-granulated to make new packages as well as things like roller trays. AG Barr operates a long established scheme that is similar to this with its glass Irn Bru bottles in Scotland. Consumers pay a 30 pence excess for the product, which they get back when they bring the bottle back to the outlet. AG Barr collects the empties when it delivers the fresh and, somewhat surprisingly, it says it gets 70% of the bottles it sells north of the border back to its factory.

We find...the responsibility for packaging design doesn’t just lie with the technical guys – the brand managers hold the biggest sway in what actually happens Simon Miller, Best Foot Forward

Crown Paints is also looking into the idea of a selfdispensing system in shops, a la Kenco. When asked whether plastic or metal is better, Crown Paints Sustainability & HSE manager, Mark Lloyd, would not be drawn. After everything, of course, consumer sovereignty must be obeyed. “We don’t want to be bogged down with just one type container,” says Lloyd. “It has to be what’s best for the customer.” And this adds to the argument at the start of this article. Manufacturers are not prepared to negotiate on quality for the sake of carbon reduction; it would probably be safe to bet that they won’t take a risk on turning off customers either. Public perceptions, therefore, need to be changed.

Simon says... It’s not just the public that needs a new mindset, though. Some say making real progress in packaging reduction is going to require an industrychanging shift in thinking. One advocate of this school of thought is Simon Miller, consultancy director at Best Foot Forward, an independent sustainability consultancy which helps firms lower their environmental impact across a wide range of

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Sustainable manufacturing

areas. The organisation has worked with some of Britain’s biggest and most recognisable brands, and won a Queen’s Award for Enterprise in 2005 in the Sustainable Development category. Miller says, in many instances, the greatest opportunity lies with changing the decision making, rather than finding technological or material solutions. “What we find with a number of our clients is the responsibility for packaging design doesn’t just lie with the technical guys – the brand managers hold the biggest sway in what actually happens,” he explains. “The R&D team might have the answers for optimising a design, getting it down to a very lean weight which is still structurally sound and does everything it is required to do. But instead of that design being adopted, the marketing departments dictate a brief with the primary

Working with UK company, Impress Packaging, it [Crown Paints] has taken 50% of the tin plate out of its two litre pack and 30% out of its five litre one without affecting the integrity of the container Simon Miller, Best Foot Forward concern for brand distinction and shelf presence. This aim, in many cases, is at the cost of higher material volumes.” To succeed in everything that a company needs to do – recognising the needs for shelf presence; minimal breakage rates; appropriate tooling for production; reducing packaging impacts – a collective approach is required. “Once people begin talking things really start to take off. We work with branding teams so they understand the implications of their decisions on the manufacturing process and associated carbon footprint. Of course, the big opportunity lies with the marketing team embracing resource efficient design as a major sales point – which we are seeing now more and more – to form a virtuous circle to move towards optimal low impact design.” Theoretically, this means things like the ‘Pamela Anderson shaped’ Virgin cola bottle or distinctive Toilet Duck packaging could be consigned to the history books. Adds Miller: “It’s an interesting idea that in a few years, with much higher resource costs, we might see almost identical, optimal pack designs from different manufacturers lining the shelves, with just the colours and labels used to distinguish brands.” Best we don’t tell Matey, yet; they’ll think we’re having a bubble bath.

tHE MANUFACTURER dIRECTORS’ cONFERENCE 2010

17-18 NOVEMBER Chesford Grange Kenilworth Warwickshire

The most important date in the manufacturing calendar for 2010.

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An operator programs the Packsize system

Taking the

out of boxing With Right-sized Packaging on Demand®, manufacturers can now make packaging at the right time, in the right quantity, and with the right design. A stateside sensation in end-user right-size box making has hit UK shores.

Every

once in while somebody takes a look at a long established, industry standard process and sees that not only is it a woefully inefficient way of doing things but that there is a far better solution. The founders of Packsize International had one such epiphany when they looked at how companies source their packaging. In the late 1990s, Niklas Pettersson’s established the robotic automation for corrugated converting machines. Then, in 2002, Hanko Kiessner created an award winning business model to launch Packsize’s Right-sized Packaging on Demand® in the United States. When companies buy in boxes they often look to benefit from economies of scale and avoid multiple purchase prices. They adopt a one-size-fits-all solution and package all of their differently sized wares in the same size box. This means box sizes are, on average, 40 to 50% too large. Complex packaging requirements are also often met with synchronised daily deliveries of boxes, made to order, in small batches. The on-demand nature of a Packsize system does not require daily delivery or synchronisation of cardboard boxes, resulting in fewer deliveries and less burden on the environment. And, sending out boxes

Specialfeature Packsize

which are 50 per cent too big also means roughly 50% of what planes, trucks, and ships are delivering is air. According to Kiessner, “nothing trumps perfect fit in protecting product. A product that is damaged in shipping is often shipped three times: twice to the customer plus the return shipment to the supplier. Studies show that making boxes that fit perfectly protects products in shipping better than any other packaging strategy.” Packsize just completed an environmental savings model for one of the largest fulfilment companies in the United States on how much they could reduce their carbon footprint by installing the machinery in all of their distribution centres. The carbon dioxide reduction would amount to more than 25,000 tonnes per year. Reductions in shrinkage, freed up space and complete control over supply form the icing on the cake. Pettersson’s machine could produce up to 25,000 boxes per day of any size box, in any quantity, with branding capabilities and easy operation for ultimate usability. The company’s first customers were quick to understand the lean supply chain benefits but they were reluctant to invest capital in non-core capabilities like packaging. The solution was to share the capital risk giving both companies a stake in the long-term outcome. Under Kiessner business model, Packsize retains ownership of the technology, giving it a longterm stake in the customer’s packaging performance as well as a revenue annuity. The system works. The business immediately took hold in several target markets: woodworking, fabricated metal, plastic components, printing, and fulfilment industries. Packsize’s offering could well soon be added to the same bracket as the Heidelberg printing press and HP desktop printer: machinery that allows a process to be performed by the end user rather than having to be outsourced to specialists. The company is looking for a similarly wide-spread uptake as those two forebears among its target markets and, in the US, it has already made waves toward realising its ambition. In the furniture industry, for example, Kiessner estimates Packsize machinery is now present in 50% of all factories. “Any plant manager starting a new factory in this industry would be wise to start from day one with our equipment,” he says. “It’s industry standard now.” With operations in North America, Scandinavia, and Germany, the company is now expanding into the UK and is ready to let companies know it’s here. Any interested party can request a visit from a Packsize engineer who will assess whether that company’s packaging requirements are suitable to make savings with on-site machinery. If a synergy is found, Packsize will operate with exactly the same business model which has seen to its success stateside. Packsize assumes the projects’ risks; all installation charges can be deferred until the project is proven for the customer so their success is guaranteed. An engineer will install the machinery

which will be active from day one, before staying on site for one week to deal with any teething problems. All corrugated cardboard will be delivered from plants in Birmingham and Manchester, ensuring availability and ease of supply. Companies needn’t worry about banking on Packsize either; Kiessner says ensuring reliability is a “huge concern” for the company. “If our customers don’t have boxes they are in big trouble,” he says. Also, as the company carries out all of the service and maintenance as well, it would be fair to surmise that it doesn’t want to have to be out fixing them all the time. Thus, as well as making the machines “as robust as technology today possibly allows,” a complete set of parts comes with each machine and is stored on site. When a part needs replacing an operative talks the installation through the company’s 24/7 telephone hotlines. “Downtime is rare but when a machine does breaks down we get it back up and running within two hours in the vast majority of cases,” says Kiessner.

Packsize offers a flexible and innovative technology; minimising carton void can reduce both material use and freight costs. The Packsize business concept has potential across a wide range of sectors and applications Richard Bones, Senior consultant at Total Logistics You’d be forgiven for thinking that there has to be some sort of catch somewhere in all of this. A long, binding contract perhaps? Well that’s not the case either. Most of the agreements Packsize has with its clients run on a month-by-month basis. But it never gets its machines sent back, unless a company leaves its market. The savings render that particular risk basically redundant. Kiessner says the minimum requirement is around 100 boxes per day but the most value is derided out of variability. The more differently sized boxes you require, the more you stand to profit. And the way the business model works, if you can’t profit from the situation, neither can they. In that situation, they’ll be sure to let you know. “It’s a symbiotic relationship,” says Kiessner. “We work with a superior decision-making process and were not out to sell to the customer – we utilize each others’ assets. If Packsize is not a fit we’ll be the first ones to say so. If we were not honest about it we’d waste a lot of money installing machines.” So, by using the smallest possible box for every order, you receive cost savings, a reduced carbon footprint, freed up space and complete control of your own packaging requirements with no capital investment. Why wouldn’t you?

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Spotlight ON

Six Sigma

The tools and techniques of Six Sigma are recognised to have a big impact on productivity given sufficient investment in senior people, time, cost and culture change. Brian Davis finds out the relevance of this long-standing business strategy on modern manufacturing.

Six

Sigma (6S) is a statistical process for determining that the most efficient process is used to satisfy customers, while removing variation and improving consistency. Developed by Motorola in the mid-1980s and taken to heart by big corporations like GE, enthusiasm for the 6S approach spread across the US and then worldwide. The methodology is not limited to manufacturing and is rapidly gaining ground in the financial service sector, retail, airlines and other sectors. Nevertheless, the methodology has its detractors as it requires strong sponsorship from the board, and Six Sigma personnel need detailed training and commitment in order to drive process improvement projects at different levels in an organisation. Following the Japanese management style, trainers and trainees are given martial-arts style labels. Master black belts are full-time champions of process change and are often strong candidates for senior management

promotion. Green belts lead smaller projects on a part-time basis. Management consultants Kepner-Tregoe offer proprietary methodologies which support 6S implementation using problem solving and root cause analysis. Managing partner Martin Wing insists â&#x20AC;&#x153;Six Sigma is an improvement philosophy that requires significant culture change.â&#x20AC;? There are three key applications, and 6S is only one of the tools. First, 6S is useful for removing variation from the manufacturing process to get better standardisation. Second, companies need to address lean philosophy i.e. removing non-value added waste. Consequently manufacturers often favour Lean Sigma to both remove waste and improve process standardisation. Third, there is need for continuous improvement of processes, people and systems in order to rise to the next competitive level.

Leadership and Lean

Kepner-Tregoe recently helped an international food and beverage company to standardise their processes. “Their processes were mature, but the company had difficulty getting to ‘special cause’ in terms of 6S,” explains Wing. A ‘common cause’ event halts the line as a result of natural variation, whereas a ‘special cause’ falls outside the normal control boundaries. At an operations level there was a lot of fire-fighting to keep lines running as they didn’t address the root cause of variation. Consequently, four key elements of work were tackled. First, Kepner-Tregoe upped problem solving skills using proprietary Root Cause Analysis methodology. Second, they built these skills into recognised operating procedures, i.e. for handling escalation levels to shift leaders, area managers and above, so that problems were not shelved. Third, people were coached on the job, and fourth, the performance environment was modified by prioritising work, and giving feedback on tasks and individual consequences. “By embracing the hearts and minds of people across the organisation, 6S, lean and continuous improvement can be used effectively to reduce downtime, improve cycle times and improve the bottom line,” says Wing.

What’s the difference? Quentin Brook, managing director of Opex Resources which publishes operational support tools, argues that “6S programmes shouldn’t be differentiated from other continuous improvement activities. People need 6S skills so they can analyse and approach projects in a logical way. I’m not in favour of having an elite group, such as master belts, as initiatives tend to fall flat after a time unless the skills are deployed in service and across multiple functions.” Opex Resources has developed a Lean Sigma and Minitab software product in partnership with BT which has sold 50,000 copies. It follows the DMAIC problem solving process, that is: i) Define customer requirements, ii) Measure, iii) Analyse opportunities for process improvement, iv) Improve, to remove variation and improve capability, and v) Control and standardise improvements. The software offers tools for process mapping, value stream mapping and spaghetti diagrams, plus numerical tools for statistical analysis, graphical techniques and designed experiments. “Our pocket guide is aimed at people who have been through 6S training but need a refresher,” says Brook. The Bourton Group considers 6S to be an invaluable part of the performance improvement toolkit, used in concert with other improvement methodologies like lean and kaizen blitz. “We have a very pragmatic approach to using DMAIC methodology,” says managing director Stuart Smith. “People often go overboard, not knowing what particular tools to use, what to measure or fix. We recommend using a Quad of Aims to institute the project and define the problem; then statistical tools,

process tools, change management and project management tools.” The ultimate goal of 6S is to achieve 3.4 defects per million opportunities to make a defect. But 6S is a journey to a near impossible ideal, and most processes operate between 3S and 4S. For comparison, 6S is the equivalent of 1 hour wasted in every 160 work years, whereas 3S would be one hour wasted in every two working days. “Ultimately 6S is a journey of process improvement, with focus on variation and defects in processes, while lean focuses on waste and time compression,” says Smith. Bourton Group worked with Rolls-Royce for five years, training designers, analysts and management to refine, improve and apply Design for Six Sigma (DfSS), to achieve high levels of predictive design quality. Product lifecycle design savings to date exceed £20 million.

6S is the equivalent of one hour wasted in every 160 work years, whereas 3S would be one hour wasted in every two working days Paper manufacturers Aylesford Newsprint worked closely with Bourton to utilise Lean Sigma to resolve local problems and to provide a foundation for continuous improvement. Since Aylesford began the Lean Excellence programme in November 2009, the company has achieved benefits exceeding £250,000 a year. Fifteen green belts and three black belts have been trained, resulting in large savings and improvements in work practices, more uptime, increased throughput yield and better output quality. A variety of tools are being used including 5S for maintenance processes, Root Cause Analysis to resolve a quality defect, and lean waste removal in the roll storage area. “Six Sigma deployment has to be properly managed,” Smith admits. “Like a diet, you can get some quick effects but then gain weight again unless you stick to the regime. Properly managed deployment means having enough capable people trained to green belt and black belt level, with sufficient time to work on a project and selecting the right project in the first place.”

200 black belts Cummins Engines is an exemplar. The company began the 6S journey about 11 years ago at its Darlington and Daventry plants, and now has over 100 master black belts worldwide. “We’re trying to move emphasis towards customer focus, using lessons learnt in every area of the business, from shopfloor production to HR, finance and supply chain projects,” says Master Black Belt Gary McAlister. Cummins Engines has carried out some

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Leadership and lean

environmental projects that have reduced plastic waste, improved throughput, reduced maintenance spares inventory, and improved quality both internally and externally. Quality is now between 4S-4.5S. Logistics has seen a rainbow of projects using standard 6S statistical tools and KG analysis to analyse qualitative factors. “Process mapping is the first tool we use in every 6S project to identify inputs and outputs,” says McAlister. “We focus on cost savings and cycle time as key measures, and aim to drive up 6S certification across the company as a key requirement for promotion.” Forty five 6S projects have been completed at the Darlington site this year and a further 25 projects are targeted by year end. “We’ve even improved import tax drawback using 6S to identify where we should have been claiming tax but missed it, improved utilisation of shipping containers from China, and improved the process for identifying defects in the suppliers’ warranty processes.” Glaxo SmithKline’s Global Manufacturing and Supply business applies both 6S and lean manufacturing tools under the banner of Operational Excellence. The GMS business unit has nearly 200 black belts and 74 master black belts, skilled in both lean and 6S. “In the last few years, we have taken an increasingly practical approach to training operators in standard work methodologies,” says Derek Willison-Perry, VP Operational Excellence GMS. “This

allows us to engage the people who can refine and define processes so that we improve our process control and productivity from the line upwards.” Richard Holland, managing director of TBM Consulting Group, warns that the Six Sigma toolkit “is sometimes too big a sledgehammer for the problems a company faces. Businesses must be selective – only a small proportion of people in a company are likely to embrace the methodology, and most require quick ways of solving problems on a daily basis. We encourage companies to use policy deployment to agree long term goals (3-5 years), then identify what’s vital for the coming year, and the improvements necessary to meet those goals, as opposed to continuous improvement activity, which can be seen as optional.” Doncasters Metal Casting, for example, used the 6S approach to reduce post-scrap shrinkage in turbine blades during the casting process. The company converted fixed defect data into continuous data, for improved inspection and recording of yield and rework. Each year it is targeting that 1% of each unit headcount becomes a blackbelt, one for every 10 greenbelts. Most manufacturers consider that having 6S skills gives competitive advantage. But, most will concur, it is only one tool in a continuous improvement arsenal. Choosing the right 6S project should be strategic, not simply for firefighting.

17-18 NOVEMBER Chesford Grange Kenilworth Warwickshire

THE G R E AT RESET

“If you think this is only a cycle you’re just wrong. This is a permanent reset. There are going to be elements of the economy that will never be the same, ever...” Jeff Immelt

Chairman and CEO, GE

www.themanufacturer.com/mdc

Have your say at www.themanufacturer.com

Lean logistics

Play the game Leaning the shop floor is a well established internal process, but how do you transfer that thinking to logistics and warehousing? Gay Sutton talks to Sylvain Demolder of supply chain consultancy MÖBIUS, to discover how a simple game can provide valuable hands-on experience

It’s

a well known fact that lessons are best learned by experience. But making simple mistakes can have dire consequences when they relate to business process improvement. So how can you gain the experience without feeling the pain? Simple! You play the game. And when the game is constructed around real actions and reactions and involves real people in a physical situation, participants are confronted with the real impact of their actions and the chaos that can result when mistakes are made. Just such a game has been created to steer companies towards lean logistics. Called the

Nagara lean internal logistics game, it has been developed by supply chain consultancy, MÖBIUS, in response to the requests of many clients who had benefited from similar games focusing on other areas of business improvement, such as manufacturing, sales and operations planning and so on. Launched about a year and half ago, Nagara is designed for between 10 and 16 players at executive and management level and takes around a day to complete, including an introduction, in depth training sessions, coaching throughout, and concluding with an assessment of the effectiveness of the process.

The game provides a number of training outcomes ranging from experience in recognising and removing waste, to a practical understanding of what works and how to go about the lean improvement process. It also provides theoretical knowledge of lean methodology particularly as it applies to logistics. “But above all,” said MÖBIUS partner Sylvain Demolder, “it demonstrates that with small modifications and continued adjustments great results can be achieved, that communication is absolutely essential if this is to work, and that those working on the shop floor are best able to see the problems and suggest improvements. They just need the right environment to do this, and a little help with analysis.” The game uses simple lego bricks to represent supplies and products. And eight tables, manned by the participants, are used to represent each stage in the internal and external value-added logistics operations. The goods are received in bulk, one main product is packed while other products are then added occasionally as promotions. The products are customised in English or French for the various sales channels, and picked and shipped to the customer. However, it is in the detail that the real learning begins. “For training purposes, the game starts with real chaos in the internal logistics, a situation which is hopefully not present in companies these days,” explained Demolder. “But it helps participants to develop an eye for detecting what exactly is going wrong and to develop the methodology for improving it.” Players are invited to make both small and large changes to the layout of the tables, the layout and organisation of the warehouse and the internal processes during the game, and are able to evaluate the impact of their actions after each round through a series of key performance indicators. This hands-on experience provides a valuable insight into how to optimise an entire logistics operation through lean principles.

MÖBIUS

The warehouse, for example, is completely un-optimised and provides enormous scope for improvement, storing goods between most stages of the internal value adding processes. “We use boxes to represent storage areas in the warehouse,” Demolder explained. “Some are easily accessible while others are not, and these boxes are located in the warehouse in a random way regardless of the contents and the next stage in the process, so that products that should logically go together are located in very different positions.” The game begins with a predetermined layout for the tables, set levels of initial stock, work in progress and customer orders. Then during the first round supplies are delivered, orders received and products are packaged for the customer to collect. “And there is always a lot of internal transport during this first round because we have essentially created a spaghetti layout,” Demolder said. Having delivered a completely dysfunctional logistics experience to the participants, the MÖBIUS team then begins the process of coaching the group and imparting the knowledge that will enable them to understand what is wrong with the logistics side of a business and then how to improve it. “We ask the participants to work together in small groups, and discuss how the environment could be improved to work more efficiently.” This is backed up by a more formal teaching session providing an overview of all the wastes and an insight into how they can be reduced. “And then, based on what they have learned, we then ask the players to see if they can update their conclusions and their proposals for improvement.” What follows is vital to any lean improvement and reinforces the value of real communication across each internal department, and why it can be damaging simply to optimise activities in a single area. “By discussing the proposals of each small group with the entire group we aim to demonstrate how the entire

process can be optimised, and how a local optimisation could adversely affect the activities in other areas,” Demolder explained. “After the first round there are not likely to be many instances where there are contradictions between the proposals of one group and the common interest of the whole group. That is more likely to happen in the later rounds. But if it should occur and it goes unnoticed, we tend to allow it to happen. Mistakes are a good learning experience, and it’s great to be able to make mistakes in this environment.” The game generally runs for two more rounds, with adjustments made throughout. A second formal training period is delivered after round two, and this covers the more advanced lean methodologies such as lean warehouse design, the difference between push and pull, 5S, value stream mapping, postponement and the use of kanbans. Meanwhile, the two MÖBIUS trainers work with the participants and impart information and theoretical explanations throughout the game, as required. There are many pitfalls awaiting the unwary player and each provides a valuable learning experience. “Frequently, people optimise with such enthusiasm that their buffer stocks fall too low, and customer service tails off dramatically,” Demolder explained. “We often see customer service fall from 90% OTIF (on time in full) in the second round to around 50% OTIF in the third round. And the lesson is that if you’re trying to limit costs, don’t

start a complete reorganisation on a big scale. Start on a small scale to verify that you have defined your dimensions correctly.” The game itself, of course, is undergoing continuous improvement, and this is based on the very valuable feedback provided by participants at the conclusion of the day, when discussions also take place to facilitate the transfer of the knowledge from the game situation into the real working environment. Like most of the MÖBIUS consultants, Demolder has many years’ experience in the operational field and has some final words of advice for those taking the lessons of lean logistics back to their companies. “The biggest pitfall is a lack of good communication, so ensure your people understand exactly what will be done, and listen to their concerns.” And this comes down to good change management practice. “And the secrets of success?” he said. “Don’t use complex theory. Use simple ideas for improvement. Create cooperation between all departments. And most important of all: listen to the customer because everything is a function of customer satisfaction and customer service.”

For more information please visit: www.mobius.eu or contact: joanna.holmes@mobius.eu

The

printing

Dimension uPrint 3d printers with printed parts

The advent of cheap, fast and versatile 3D printing has made it useful to an ever-wider variety of businesses, while competition-induced price reductions have meant that even the smallest SMEs can now afford to have a 3D printer installed in the corner of the office. Lorenzo Spoerry investigates its potential applications.

Monday

morning, 6am. The alarm clock rings and, with head firmly buried under your pillow, you stretch out a lethargic arm to silence it, knocking over and breaking your Significant Other’s favourite vase. What’s your next move? 1. Buy a new one? 2. Blame the dog? 3. Print off an identical copy? If Option 3 sounds like the stuff of science fiction, it might surprise you to know that three-dimensional printing has been around since the late 1980s, when stereolithography first became commercially available. Today, the technology to print off an object is cheaper, faster, cleaner and increasingly utilised in industries as diverse as aerospace, design, automotive, architecture and education. “Over the last five to ten years, more and more lower-cost machines have come into the market. Conceivably, even domestic consumers will be able to buy some of these lower-cost machines,” explains Dr Greg Gibbons, a senior research fellow at the Warwick Manufacturing Group and an expert in rapid prototyping and manufacturing. “The technique is often used in architecture. Architects Foster and Partners has 3D printing

Innovation design and the product lifecycle

machines running 24-hours a day building the CAD [computer-assisted design] programmes that they’ve inputted. In the morning, when the prototype has printed, they decide which ones they will select and which ones they’re going to throw away.” At present, 3D printing is commonly used to make customisable parts and prototypes more than for mass production because of the slow build speeds and the prohibitive cost of the materials. As material – plastic – costs fall and 3D printing becomes more widely recognised and adopted, components made using 3D printers are increasingly finding their way into the manufacturing process for end-use products. Stratasys, headquartered in Minnesota, USA, is one of the leading companies in the field of 3D printing. The company is betting that its Fused Deposition Modelling (FDM) technology could soon become dominant in a market currently replete with a wide variety of competing technologies. Its printers are currently used across a range of industries from architecture to shipbuilding, especially in the automotive and consumer products sectors. Mercury Custom Motorcycles, a US bespoke motorcycle manufacturer, has been using Stratasys’s Dimension 3d printers to make prototype parts and custom accessories for their customers. Using these printers has shortened its lead times from many months to an average of three and a half weeks, saving it between £3,000 and £5,000 a month in the process. It has also managed to find new and unexpected uses for its 3D printer. The company is marketing an LED light that fits within the arc of a motorcycle fender – a part that would have been impossible to manufacture solely with injection moulding. Israel-based company Objet are marketing a 3D printing technology which allows for up to 21 different variations of material on a single part. A razor handle built using this technology could have a stiff handle and a flexible neck, for example. The Z Corporation is another big name in the 3D printing business. Its printers are capable of producing very accurate parts at a speed of two vertical inches an hour.

actually it’s being used now in industries where you can make hundreds or even thousands of items,” explains Heller. “A lot of parts go into production equipment. One of our earliest examples was parts

If you haven’t got the technology to make it, you’ll be able to design it, send it to a company and the product will be sent straight to you from the most costeffective location Dr Greg Gibbons, Warwick Manufacturing Group

in business electronics. One of the pieces inside the device was made using our technology until they could get other tooling developed.” Many people in the market consider the development of computer-assisted design as a threat to rapid prototyping, but Heller isn’t worried. “The virtual and the physical complement each other. As human beings we are not well trained in visualising things from a computer screen. You want to know how a widget holds in your hand, you want to know whether or not you can fit a part in a service

SMEs buy in to 3D printing Many designers and very small scale manufacturers already use 3d printing. A printer that costs £12,000 today would probably have cost nearly ten times that 20 years ago. The ability to produce multiple variations on a design within a very short timescale has enabled the development feedback loop to happen much faster. “Today all of our products are used by SMEs, it’s definitely not limited to the Fortune 500 companies,” says Tim Heller, managing director for Stratasys in Europe, the Middle East and Africa. “I’ve seen people who’ve put them in their basement. There are a lot of one- or two-man design bureaus with a lot of talent who have elected to use our printers to support their business.” “In the early days people thought this technology would be great for a one-off – which is true – but

The Manufacturer.indd 1

19/05/2010 13:43:19

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Innovation design and the product lifecycle

An object made using a 3d printer

capacity into, say, a car engine. For that you’ll always need a physical part.” Stratasys’ FDM technology is a simple plastic extrusion system, where a plastic filament is automatically loaded into a small head fitted with a heater. The heater melts the wire and “draws” lines in plastic, creating objects layer-by-layer in much the same way as a chef uses a pastry tube to decorate a cake. The plastic that Stratasys uses is called ADS – a standard, relatively tough type of plastic that is also used in injection moulding. New wave of bespoke manufacturers This technology is being used by HewlettPackard in its new range of low-cost 3D printers, a development that Warwick University’s Dr Gibbons believe could have big implications. “There’s little doubt in my mind that the new HP printer will sell like hot cakes. It’s possible to get functional parts out of it and it’s very easy to use – you can just stick it in the corner of an office and treat it like a standard inkjet printer.” The advent of 3D printers costing less than £10,000 that can manufacture parts using ADS plastics is already creating new revenue streams for manufacturers, as well as enabling the launch of entirely new kinds of bespoke manufacturing companies. “It will all be internet-based,” says Dr Gibbons. “If you haven’t got the technology to make

it, you’ll be able to design it, send it to a company and the product will be sent straight to you from the most cost-effective location.” Freedom of Creation, a Dutch company, already sells a range of products over the internet from lamps and lampshades, Apple iPod and iPhone cases, to tables and chairs using laser sintering technology. Laser sintering allows the use of a much wider range of materials than stereolithography, including end-use materials such as nylons. As competition drives prices down and new capabilities emerge, 3D printing will increasingly find its way into smaller, ‘boutique’ companies. “It probably won’t be more than a few years before every SME in the mechanical design or the 3D illustration business has a 3D printer,” says Stratasys’s Heller. “That’s going to be a big milestone.” It is difficult to predict when 3D printing will eventually find its way into the domestic home. It might be that within 20 years, 3D printers could be nearly as common as normal 2D, desktop printers, allowing for the constraints of day-to-day application of ink versus 3D printed items. What is certain is that the technology will soon affect, in one way or another, a vast number of people, both as commercial manufacturers, their customers and everyday consumers.

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Finance and professional services

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A matter of tax Recent tax law changes have gone some way to justify the Government’s claim that the ‘UK is open for business’. But with many foreign jurisdictions still offering more competitive tax environments than the UK, Tim Brown investigates the feasibility of foreign profit attribution.

The

coalition Government’s tax changes have included the well documented reduction in corporation tax to the baseline rate of 24%. Changes have also been made to the foreign profit rules so foreign subsidiary dividends, paid back to the UK, are tax exempt. Such amendments are unlikely to result in a frenzy of near-shoring of factories but they may help to stifle the largely one-way traffic of manufacturing operations leaving the UK. With globalisation, the economic reality is that businesses are often comprised of large multinational groups with numerous subsidiaries. The way in which profit is shared among those subsidiaries can have a big impact on gross profit margins. An article written by Bloomberg’s Jesse Drucker cited pharmaceutical giant Pfizer as an example of a company maximising profits through attribution of income to ancillaries in countries with lower tax rates. According to Drucker, from 2007 through 2009 Pfizer posted almost half its revenues in the US, booking domestic pre-tax losses totalling $5.2 billion. Over the same period a Dutch subsidiary reported pre-tax profits totalling $20.4 billion in 2007 and 2008 and was subject to a tax expense of 5%, a seventh

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Finance and professional services

of the top US corporation tax rate. Accordingly, the overseas tax savings helped increase the drugmaker’s net income by $1bn last year. These are impressive figures that would make any company with an international base sit up and take notice. “While it is true to say that there are many jurisdictions with low or no tax,” says Tim Stovold, a partner at accountancy firm Kingston Smith, “the difficulties in actually being able to structure a business to take advantage of those low tax rates are huge.” How can companies such as Pfizer make such huge savings and what complications are involved?

Breaking it down Profits from a multinational company have to be split in to the jurisdictions in which the group operates. For taxation purposes most countries view profits on a territorial basis and tax a company’s profits according to which transactions took place in that region. In any multinational company, transactions also take place between group entities. For example, one company might buy the raw materials which are shipped to the manufacturing site. The product might then be moved again for subassembly or finishing and then be transported to market. Transfer pricing laws prevent companies from simply manipulating the prices of goods sold within a group to allocate greater profits to a particular region with a lower tax rate. “The approach that most modern economies take to this is to use what is called ‘the arm’s length standard’,” says Deloitte’s tax partner Mark Stephenson. “This says that companies transacting between themselves in an intra-group situation have to, for tax purposes, charge the same price for a component good that they would normally sell to a third party, non-group company.” According to Deloitte, the most important piece of the profit attribution puzzle relates to the ‘intangibles’ or the elements of a business that don’t have an immediate monetary value. These include items such as knowhow, brands, trademarks, research and development, patents and goodwill. In the case of a pharmaceutical company, the region in which it holds its intellectual property and therefore collects the related royalties is critically important. “The Netherlands has always been a favoured place for holding intellectual property,” says Stephenson. “This is because it is a modern regime with good legal protection but they also have a very generous tax regime.”

Intangible not untouchable While intangibles don’t have an immediate monetary value, if a business attempts to transfer an intangible between companies in different countries, it is inferred that a gain has been made and the intangible will be taxed at ‘market value’. If a company decides to transfer a section of a business which has a value to a company in another country,

it will have a tax liability on disposing of the goodwill and intangible assets, such as the IP, even though no earnings have been made. Stovold says that patents and intellectual property are very easy to shift, ideally when they have no value. “While a company is developing a particular piece of IP, it might assign it to an overseas jurisdiction such as the Netherlands.” However, warns Stephenson, if a new invention is made and then transferred before having a true market value, “when all the cards are face up on the table and the Inland Revenue has all the facts, they would say that the original company which started the work owned an intangible and they would place a value on the transfer income.” Exit charges are often applied when businesses consolidate operations in different countries. This happens because it is judged that profit has been shifted from one jurisdiction to another. If an existing contract is moved due to consolidation, a company may pay an exit charge on the value of the contract in the original country plus the tax on the profit earned in the new country. Stephenson

If you can live with a 24% corporation tax rate then the UK actually makes quite a lot of sense as a place to do business Mark Stephenson, Deloitte says that although there are questions over the legality of exit charges within the EU, at present the duty to declare the provenance of an exit charge is unclear – suggesting it is worth trying to understand the liabilities of exit charges more fully. Both Stephenson and Stovold add that the mantra applied by tax consultants is that commercial reasons should be the primary consideration when restructuring your global operations. “If your first reason for looking abroad to expand is tax, then it is unlikely that a move will be justified,” says Stovold. “The tax has to be a secondary reason, otherwise you will find that it either isn’t going to stand up to scrutiny or there are going to be more practical problems involving the cost of infrastructure or difficulties sourcing skilled labour.” However Stephenson says that “if a company is undertaking a reorganisation for purely commercial purposes then it is much more likely to be able to achieve that reorganisation without unforeseen tax costs... Those companies that have set up abroad a couple of years ago may now be looking at the corporation tax rate and foreign profit rules and thinking that the UK isn’t so bad after all. If you can live with a 24% corporation tax rate then the UK actually makes quite a lot of sense as a place to do business.”

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Re-shaping the future? Manufacturing companies in the Midlands are realistic about market fragility. But, perhaps more so than companies in other sectors, they’re still ready to power ahead. Steve Cockell, Regional Managing Director, Corporate & Institutional Banking, RBS discusses further in this article.

UK plc begins what may still be a challenging period of recovery, the potential for the manufacturing sector to play a significant role in shaping and sustaining economic growth is tremendous. Here in the Midlands, we are seeing signs of rational optimism amongst manufacturers keen to exploit new opportunities and gain competitive advantage. Interest in investment in plant, technology and supply chains is high – and purposeful too, in light of the upturn in prospects, the need for business agility and opportunities for strategic acquisitions. Certainly if the interest we are seeing from customers seeking our support to meet their strategic plans is an indicator of what lies ahead, manufacturers in the region have good reason to be confident. Of course, the big unknown, facing the whole economy – is the government’s spending review, and the direct or indirect impact it might have on Britain’s manufacturing sector, purchasing power and business and consumer confidence. However, change brings opportunity and at RBS our

economists are predicting that in the short-term the January increase in VAT to 20 per cent could boost business revenues. With retailers predicting a bumper festive period as consumers stock up prior to price increases in 2011, manufacturers could see an increase in orders this Autumn.

Exports lead the way Further good news for manufacturers is that exports continue to represent a source of optimism and we continue to see successful examples of this across the Midlands. Companies are shipping more to overseas customers, especially in the US and Europe, and specifically, in Germany – itself traditionally a big exporter of manufactured goods and components. Clearly, sterling’s weakness is good news for exporters; if the pound appreciates, the trend may be reversed – but for now the opportunity to demonstrate British quality, value and innovation on a global stage is crucial for many companies. Conventional wisdom indicates that, at least against the dollar, the

pound may strengthen – but few exporters are predicting shortterm changes radical enough to blow present trading volumes out the water. The upside of recent activity has been that manufacturing companies have become slicker at turning currency movements to their advantage; we have been able to help many take steps – such as pricing their goods at appropriate rates, or managing their short-term cash flow – to lock in the benefits while minimising risk. A large proportion of companies have been deleveraging – many of our customers borrow much less as a rule than they might have been comfortable doing, say, three or four years ago. Balance sheets have become more conservative. Nevertheless, while that might mean that capital expenditure and investment have been somewhat placed on the back burner, companies still seek solutions and there are certainly options available.

Glasses half-full, not half-empty For those companies that have been forced to deleverage considerably, what will naturally concern management are the consequences of lack of investment in plant, such as reductions in efficiency and productivity. But those who chose to defer replacement cycles and run plants on when revenues were at their lowest are not without a range of solutions. For many companies, an important factor to survival and positioning for the future has been the maintenance of a relationship of trust with their bank – simply being open and frank when sharing information about their business is the basis of a spirit

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Snapping up competitors – at home and overseas In the Midlands, as with elsewhere in the UK, we’re likely to see more mergers and acquisitions within manufacturing. While many management teams have been relatively introspective over recent months, examining business models and focusing on survival, much of the ‘steadying and readying’ balance sheet activity will leave them poised to make strategic acquisitions going forward. At RBS, more of our customers – not just in manufacturing but in engineering firms and technology companies across the Midlands – are now well-placed to explore the possibilities with genuine intent, asking: How might this business add value to ours? What are the synergies? What would it mean for our existing customers? How might it help strengthen our position in Europe – or globally? What financial resources would be required – and what

would be the potential challenges post-acquisition? Looking forward, all considerations inevitably return to the government’s spending review. Of course, public spending isn’t going to come to a standstill in 2011 even if the extent to which it is suppressed dominates the headlines. Some of the planned expenditure will simply transfer elsewhere, or be outsourced to the private sector. This suggests not only greater opportunities for further consolidation but also for overseas acquisitions. A number of Midlands manufacturing companies are already planning accordingly and are carefully considering which countries and regions are financially resourced to increase their future infrastructure spend. With this in mind it’s quite likely that we’ll see manufacturers across the UK continue to build their businesses internationally, organically and through acquisitive growth. Yes, the spending review may create challenges– but I’m optimistic about manufacturing, particularly in the Midlands, where there is a long tradition of success in the face of economic adversity. If UK or US markets are depressed, companies here know how to go out and find new markets elsewhere. The turbulence of the last few decades have honed and reshaped the sector to an extent that management teams are crystal-clear about what they must do to stay innovative and competitive. There are plenty of highly experienced management teams with excellent strategies that remain under constant review – and who are poised to take full advantage of both UK and global economic recovery.

Finally I would like to take this opportunity to wish all those shortlisted in the 2010 Manufacturing Awards the best of luck. We are proud supporters of the awards which recognise and reward business excellence across the industry. I look forward to seeing many of you there.

RBS

of true partnership. Certainly we are realistic and mindful of the many unexpected turns markets can take, and of how reliant our customers are on flexible support and solutions. Good old-fashioned relationship-building is a tenet that withstands good times and bad. There is certainly still a degree of caution amongst manufacturers, coupled with an acceptance that the market has changed significantly. Key characteristics across some of the most resilient firms, has been a strong sense of realism combined with constant questioning as to what activities can add value. In many senses, that’s a business basic – but it’s been something of a reality check for many that perhaps were not as wellequipped to handle a sudden downturn. That’s not to say that successful companies didn’t have to take some tough decisions over the last few years – of course they did – but those impacted have thankfully been fewer than predicted.

To discuss any of the topics raised in this article or for further details on RBS Corporate & Institutional Banking services please contact: Steve Cockell Regional Managing Director Corporate & Institutional Banking Midlands & East, RBS Tel: 0121 262 7410 Email: stephen.cockell@rbs.co.uk

For more information please visit: www.rbs.co.uk/supportingukbusiness

Manufacturing is leading the way The Bank of England’s regional agents in their most recent assessment were glowing in their praise of the manufacturing sector, stating that manufacturing was “the most buoyant part of the economy”. It is refreshing to see manufacturing getting the attention it deserves and long may this continue. The Best Factory Awards last week was a timely reminder of what a hotbed of innovation and growth the manufacturing sector has become.

The

talk at the awards was not about whether manufacturing had a future in the UK but about how can we maintain this growth after years of cutting back? How can we develop the necessary skills required to fuel industry growth? Will the government match positive rhetoric about the sector with political and financial support? Interestingly a recent report by The National Association of Manufacturers in the US was asking many of the same questions of their government. The report highlights the key issues:

below the 28% that many of our manufacturing companies pay. The momentum for a cut in the US is growing and as the largest manufacturing country in the world, a cut to the OECD average by the US would put UK manufacturing at a distinct disadvantage. Perhaps we should start to sow the seeds in government now for the need to cut corporation tax if America does so. This would maintain our competitive advantage and free up money to stimulate investment and training.

Lower corporate tax

Create a regulatory environment that promotes economic growth

The need to create a national tax climate, that does not place manufacturers in the US at a competitive disadvantage, in the global market place. They recommend that corporation tax be lowered to 25% or more, arguing that the US now has the highest tax rate at 35% of anywhere in the OECD bar Japan at 40%. The average tax rate across the OECD is 26.2%, well

The Small Business Administration’s Office of Advocacy in the US estimates that the cost of regulatory compliance for small companies in the US amounts to $1.1 trillion annually, almost 2% of GDP. They see this as unacceptable. The Tax Payers Alliance and the Chairman of the Better Regulation Task Force, Sir

David Arculus, put the figure for EU economies at 10-12% of GDP.

Continue to support Research and Development The Milken Institutes “Jobs for America” analysis concluded that increasing their R&D tax credit by 25%, and making it permanent, would see real GDP rise by 1.2% and create 270,000 new manufacturing jobs. This is perhaps a timely warning as the UK government seeks to rein in spending on scientific research as most of our competitors are increasing spending on R&D not cutting it.

Reinvigorating the workforce The recommendation is to make it easier and less costly to hire people. The US report cites increasing labour regulations and federal mandates as factors which undermine employer flexibility and discourage the hiring of new employees. UK

to improve efficiency, increase productivity, identify and exploit new markets and continues to innovate and deliver products. Government needs to focus on creating a regulatory environment that promotes manufacturing growth, continues to support, not cut, research and development activity whilst ensuring we have an educational system and training programme that promotes both skills and management capabilities in manufacturing. The government pre-occupation with making cuts, as opposed to making savings by improving operational efficiency, may mean that they fail to respond to our needs unless we keep manufacturing firmly on the government agenda. Other OECD countries already enjoy significant advantages over the UK and it’s time we sought to operate on a more level playing field. Just think what we could do if we enjoyed the same level of corporation tax as Canada at 18%.

Bourton Group

manufacturing would also greatly benefit from less red tape and regulation especially for smaller manufacturing businesses where resources are more limited. However it is not just about making it easier to employ people. The UK suffers from an affliction not highlighted by the US report which is a lack of management capability. A number of reports carried out among grass roots shop-floor workers highlight how middle managers fail to provide the level of leadership, support and direction required to allow the business to achieve its targets efficiently. Historically there has been predominant focus on technical skills education. There has also been some debate on the quality of management at all levels, but very little activity to improve management. This may be caused by confusion between capability and skills. Skills provide technical knowledge of subject matter but don’t necessarily provide the means to apply those skills effectively. This is especially true in large complex programmes as may be found in many large manufacturing companies. What separates success from failure is having managers who are capable of managing and motivating people. These may not be those with the most experience or the most advanced technical skills. Our experience is that UK manufacturing is guilty of promoting people out of their comfort zone based on the wrong attributes and aptitude for management. Managers need to be able to manage across levels, product lines and on a national and global scale. Management shouldn’t be a right, based on tenure and aptitude in their current role. Manufacturing in the US, whilst far from perfect, would seem to be getting a better grasp of this issue. If we want the Bank of England’s regional agents to describe UK manufacturing as “the most buoyant part of the economy” 5 years from now, then the manufacturing sector needs to focus on continuing

About the Author Stuart Smith is Managing Director of Bourton Group and its subsidiary company The Six Sigma Group

Web: www.bourton.co.uk Tel: 01926 633333

For more information please visit: www.bourton.co.uk

A Women in Science, Engineering and Technology initiative workshop

A balancing Act Equality Act puts gender in the spotlight The Equality Act 2010 sets out new provisions for the employment of minority groups in a male-oriented industry. With fewer women in manufacturing than in 1980s and 1990s, Jane Gray asks that needs support, or the industry that need to shake-up its equal opportunities efforts.

September the provisions of the new Equality Act 2010 came into force, reigniting the debate on equality and diversity in the British workplace. Much of the Act simply compiles and clarifies existing discrimination laws, but certain clauses are likely to necessitate careful review of HR and recruitment policies in all businesses. For example, Section 60 of the Act will outlaw making preemployment health enquiries, and there are sections concerning associative and perceptive discrimination claims. Throughout August and September, the manufacturersâ&#x20AC;&#x2122; organisation EEF has run a series of workshops and seminars for manufacturing HR professionals to highlight what actions

People and skills

are required to respond to the Act. Charlotte Hagestadt, principle advisor and solicitor at EEF, says the seminars have been popular: “The Act will affect certain types of businesses more than others but every company will have to review their recruitment policies to make sure they are not in breach of new rules. There are subtle changes in definitions and codes of practice. Most people will need to update their equal opportunities policies and bullying and harassment policies to name a couple.” Hagestadt told TM that although many manufacturers have voiced their concern to EEF, the new Act will incur an untimely burden of retraining, making organisations far more vulnerable to claims from dissatisfied employees. There is also a definite trend for companies using the introduction of new legislation as a catalyst for more radical change to their diversity agendas. Speaking to manufacturers, one strong area of activity focuses on tackling the longstanding gender imbalance in manufacturing, taking a more pro-active approach to attracting and fostering female talent. John Whelan, HR director UK at BAE Systems, says: “At BAE we welcome the Act. It will give extra motivation to the emphasis we already put on attracting talented women to the company and to the diversity forums we have established to ensure that potential barriers to career progression are addressed.” While such enthusiasm from companies like BAE is laudable, it does beg the question why there is such a dearth of women in manufacturing and engineering careers. Figures from the National Office for Statistics lag behind the actual picture today, but show that the number of women employed in manufacturing actually dropped from 15% in June 1985 to 5% in September 2008. Will this gender disparity have a negative effect on industry? What are conditions like for women who have forged careers in such a maledominated environment?

A woman with metal Jan Ward, CEO and founder of specialist metallurgy company Corrotherm, shared her views and experiences: “I don’t advocate forcing women and girls into industry or creating a false architecture to attract them. At the moment, women are not offered engineering and manufacturing careers as a choice. That is where the problem or current imbalance comes from. It’s not that they are excluded. “The optimum age to present career choices and to challenge preconceptions is around 15 to 16. At that age I did not understand what engineering was, never having had it explained to me. Now I know that saying ‘I want to be an engineer’ is a bit like saying ‘I want to be an artist’. There are an incredible range of industries, applications and disciplines that you can study. Explaining the

If you want a family and to stay in fulltime work you will have to face the fact you can’t be in two places at once. There is a middle line – balancing how much time you can afford to spend with your children with the time you give to your job Jan Ward, CEO Corrotherm

wealth of opportunity is something which is not done very well, for boys or girls.” Ward’s own road to this discovery was far from easy. Leaving school at 15, pregnant and with no qualifications, her prospects looked bleak. Estrangement from her husband and young child only worsened the situation, but through her growing determination to carve a career path she qualified as a mechanical engineer and pursued a varied, demanding but ultimately very successful career in the special metals industry. “Early on in my career discrimination made things difficult,” she says. Ward moved jobs twice because immediate bosses would not allow her the same opportunities as her male counterparts. “I was not allowed to travel because I was a ‘young woman’ and it was considered somehow dangerous. But now things are different. These days there are only misconceptions to stop manufacturing and engineering careers being attractive opportunities for women. Women have a great deal to offer to industry by broadening and diversifying workforce skill sets and the talent pool industry has available to it.” Ward makes it clear that the decisions she had to take as a wife and mother have been hard but necessary. “Ambitious women need to accept that

People and skills

they will have to pay a price. If you want a family and you want to be in full-time work you have to face the fact that you can’t be in two places at once. You will have to walk a middle line: balancing how much time you can afford to spend with your children with the time you give to your job. This is no different than the choice men have had to make for years.” Given her self-made path to success it is unsurprising to hear that Ward is slightly suspicious of mechanisms for mentoring or giving special help to women in industry. “I find the idea that girls will need extra help frankly quite insulting.

Women should not go against their instincts selecting a job... but it is important to make sure that we are not losing talented women for the wrong reasons. Women must question whether it is the job they are not enjoying or the environment that they find demoralising Dame Athene Donald, Cambridge University

There may be scenarios in which a female or male employee needs some special support, due to family circumstances or a slight weakness in a certain area of their work. But those cases should be based on the needs of an individual and not on their gender.” This view is echoed by female success stories in other industry environments. Gil Riley, managing director of construction firm GGR-UNIC, says: “It’s fair to say that when you enter a heavily male-dominated industry you have to be harder and shrewder as a woman. The women I know who have done well in industry have all worked their way up from the bottom and are all highly respected. While women and girls may not instinctively think of careers in construction, manufacturing and engineering due to reasons as basic as the toys they played with as children, and the generic gender roles we still subscribe to, they would still enjoy those careers if they are talented. As long as you know what you are talking about and are confident in yourself you can do well.”

Digging deeper Despite this advocacy for women proving their worth in male-dominated environments, many feel that a more structured approach to analysing why certain manufacturing and engineering disciplines seem so unappealing to women could expose prejudices and hidden obstacles to career progression. Dame Athene Donald, Professor for Experimental Physics at Cambridge University and director of the

Women in Science, Engineering and Technology Initiative (WiSETI) which supports positive action on gender equality in the STEM-oriented academic world, says: “The problem WiSETI sees across the board is that women feel quite isolated in their work and, if they do feel there is an equality issue, that they are ill-placed to defend themselves. “To combat the diffidence that this isolation can create, WiSETI runs workshops to build confidence. We do this in partnership with local engineering company Schlumberger who, although they recruit a lot of women, is aware that it has a problem with progressing those women.” This problem is complex, says Dame Donald, in both research and industry environments. Confidence is probably one major cause, and achieving a worklife balance for family commitments is undoubtedly another. Schlumberger is an oil drilling company and a lot of jobs are out in the field. “Clearly this is not ideal for supporting stable relationships and raising children,” she says. “But there are less easily defined reasons why certain disciplines seem particularly unattractive choices.” WiSETI and support networks like AWISE [the Association for Women in Science and Engineering] seek greater understanding of these jobs. “A recent study of the experiences of female chemistry and bio-chemistry students showed that the latter group tended to be a lot happier in their work than the former, despite very similar occupations. We find that different disciplines have different cultures. It is rare to find explicit discrimination but there are some groups where there is a culture of put-down and this can be very hard to progress against. I don’t advocate that women should go against their instincts about what jobs they feel are right for them, but it is important that we make sure we are not loosing talented women for the wrong reasons. Women should question whether it is the job they are not enjoying or the environment that they find demoralising.” Support networks, like WiSETI and AWISE, and also internal forums such as those used at BAE Systems, seem to be taking the next steps to understand career obstacles and subliminal discrimination for all minority groups, not only women. It is hoped that the Equality Act 2010 will continue to build impetus and give voice to their findings. The Act identifies the potential of role models to challenge preconceptions about the suitability of gender, sexuality, ethnicity and other social demographics for particular career paths. Perhaps the most important issue identified, however, was that the broader problem of how manufacturing is perceived by the wider public needs to be tackled before specific imbalances can be properly understood and analysed. Creating better links between industry and society, in particular at critical decision points like GCSE subject selection, is imperative in that cause.

Stephen Thornton Parvalux Electric Motors Ltd

Initial role at Parvalux: When I first arrived at Parvalux, I was fresh out of university. While my course had provided me with a broad understanding and skill set within the design & CAD discipline, it would be fair to say that my engineering knowledge could be best described as limited. During this period, the PDD — Product Design and Development — had an entirely different set up; my role within this team was one of only two CAD engineers, hence the work load was vast and diverse. As a CAD engineer, my role directly impacted all aspects of the business, from production to sales. It wasn’t unusual to receive daily requests from an array of individuals for a variety of services: converting old 2D technical drawings to a 3D parametric system; generating GA and detailed drawings; designing tools for components; conducting tolerance studies; creating work instructions; and producing photorealistic CAD visualisations for marketing purposes, including the animation that can be found on the Parvalux home page. It was a steep learning curve indeed! Fortunately, the company invested time in me, and I was able to spend time ‘hands on’ learning manufacturing techniques in the tool room. I believe this experience was invaluable to my development as an engineer: it allowed me to fully understand the implications and aspects that need to be taken into consideration when I progressed onto design-based project work.

Recent months: The acquisition of EMD Drive Systems brought new challenges, one of which was integrating two companies onto one single ERP system. Due to the understanding I had acquired since my arrival, I was asked to undertake a leadership role of one of the principal aspects of the project: Bill of Materials (BOM) implementation generation and control. I had the challenge to devise the fundamentals of the system, establishing and defining the structure for the BOMs across the range of our products. It was essential that I developed a system that could be utilised effectively and efficiently across the company. That meant determining the principal aspects and defining them through the creation of standard practises & operating procedures. Due

to time constraints placed on the project, it was important that I envisaged, proposed and formulated solutions to potential problems before they were encountered to ensure the project met its tight deadline. This gave me the opportunity to lead a team of individuals, allowing me to develop my management skills in the process. The challenge of implementing and managing the system, taking it from its conception to its establishment and seeing it in employed throughout the company, has definitely been the most rewarding task I have undertaken in my professional career thus far.

New Role: As a result of the projects success, I now have a new position within the company. As configuration manager, I manage a team of engineers; the responsibilities include controlling and monitoring the release of new items, the design portion of the BOM and item master files, CV in brief – all design change requests Stephen Thornton and design change control. This is a new position within Age: 24 the company, and has Title: Configuration been created to increase manager, Parvalux efficiency. Ultimately, my Electric Motors Ltd main objective is to develop and refine mechanisms that can actively improve Education: systems, without detracting BSc (Hons) Product Design, from speed. The challenge Bournemouth University will be to mix the right Career Summary: amount of each of Approaching three years working these elements. at Parvalux Electric Motors Both Parvalux and Dec 2007: Joined Parvalux as the Product Design and CAD Engineer Development team are April 2010 – Present: now unrecognisable from Configuration Manager the company I first joined, Interests: and it’s a hugely exciting time to be involved with Travelling Parvalux. I hope to continue Keen sportsman: captains both 11 my progression here, while aside and 6 a side football, keeping fit – regular gym goer. developing my engineering skill set by studying for a Socialising with friends Master’s degree.

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EEFinsight

Disseminating equality EEF warns manufacturers to take heed of new legal requirements aimed at creating a more level playing field for disabled employees.

Manufacturer Remploy is the UK’s leading provider of employment services and employment to people experiencing complex barriers to work.

The

Equality Act 2010 is a genuine legislation landmark, replacing all of the UK’s existing anti-discrimination laws, which developed piecemeal over forty years, with a new and supposedly simplified set of legal obligations housed ‘under one roof’. With provisions coming into force from October 1, the Act identifies nine ‘protected characteristics’: age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion and belief; gender; and sexual orientation. The disability laws in particular have significant implications for employment practices and procedures. The Act is designed to make it easier for individuals to show they are disabled and warrant protection from discrimination. In future, a person will be deemed to be ‘disabled’ if they can show that they ‘have an impairment that has a substantial and long term effect on their ability to carry out normal day-to-day activities’. The requirement to demonstrate that a particular mental or physical capacity is affected has been abolished. Hence, many who may not have been protected Disability Discrimination Act 1995 will be from now. For example, an individual who is suffering from a mental impairment, which may not have been specifically diagnosed, but which has a significant impact on their day-to-day social interaction, will be protected. The Act also introduces a new type of discrimination, ‘discrimination arising from disability’. The test for whether such discrimination can be justified is also new. Discrimination arising from disability will only be justified if it can be shown to be a ‘proportionate means of achieving a legitimate aim’. This may impact on key areas of employment policy, for example sickness absence. Dismissing an employee due to their sickness absence record may now be harder to justify if the sickness absence in question arises from a disability.

May the best man win In one of the most significant changes under the Act, section 60 places limits on the amount of

information an employer can request of a wouldbe employee about their health or disability before making a job offer. Employers cannot make health checks or ask applicants to confirm their sickness absence records and disclose a disability until after a job offer is made. These questions, previously used by some employers to ‘weed out’ perceived unreliable candidates at the earliest stage, are now unlawful. The intention is to ensure that the candidate most qualified for a job, is offered it, without the risk of this process being corrupted by stereotypical assumptions. There are some specific limited exemptions though. Employers are allowed to ask questions about health in order to establish if an employee is able to carry out an intrinsic function of the job in question. For example, if an employer is looking to recruit a driver, they are entitled to ask candidates if they are fit to drive. An employer is also allowed to ask if an employee needs any reasonable adjustments when undergoing a legitimate assessment as part of the recruitment process. For example, if an element of a recruitment process involves a practical technical aptitude test, it is acceptable for the employer to ask if a candidate needs any special arrangements, such as additional time or adaption to equipment. Individuals can report an alleged breach of this preemployment health check ban directly to the Equality and Human Rights Commission without the need to commence employment tribunal proceedings against the employer. To avoid exposure to claims, employers are advised to conduct a rigorous ‘health-check’ on their own current employment policies practices and procedures. Are they still ‘fit for purpose’? What information do companies currently collect about employees and would-be employees, for what purpose and at what stage? It is also essential to ensure that those managers actively engaged in implementing policies are aware of these new obligations. Ruth Nodder is a solicitor and Principal Adviser, HR & Legal at EEF.

Specialfeature Kingston Smith LLP

Quarterly tax update – October 2010

Sooner rather than later In the latest tax update for The Manufacturer from Kingston Smith, Maureen Penfold considers the Comprehensive Spending Review and how the forthcoming changes to the VAT rate will impact Manufacturers and their customers.

When

the reintroduction of the 17.5% VAT rate was announced, the Treasury introduced “anti forestalling” measures to prevent businesses manipulating the VAT tax point of transactions so that sales attracted only the 15% rate. Unsurprisingly, with the benefit of their experience earlier this year, HMRC have refined the anti forestalling rules so that when the next increase in the standard rate of VAT from 17.5% to 20% takes place on January 4 2011, there will be limited scope for business to avoid the increased rate. While the rate of VAT on purchases made by a fully taxable business generally has little more than a cash flow effect, suppliers may find that customers that are not VAT registered, exempt or partially exempt look for ways to keep the benefit of the lower rates of VAT for a little longer. While the anti forestalling rules will catch many situations that seek to manipulate tax points it is still possible to take some action to alleviate the effects of the change in rate. For example, small transactions (under £100,000) will not be affected by the anti forestalling rules unless one of the other criteria is involved; related party transactions and long credit terms, for example. If a customer can be persuaded to actually pay for an order before 4th January 2011, which might otherwise have been paid for after that date, it might be possible to use the lower rates. The rules are complicated and one reason for starting to think about this now is that action taken early, in conjunction with customers, is more likely to succeed in maintaining the benefits of the lower VAT rates for a little longer. Another consideration arising from the VAT increase for those manufacturing businesses that do sell to exempt or partially exempt customers, or to the general public, is whether, or to what extent, the VAT increase can be passed on to customers. Again, early planning will allow businesses to consider the consequences of the VAT increases and evaluate different alternatives in the run up to, and after, January 4 2011.

Spending review While thinking ahead to the New Year, one should not overlook the Spending Review that is due to take place in October. In a recent speech to the Inverness Chamber of Commerce, the Chief Secretary to the Treasury, Danny Alexander reiterated the Government’s plan to tighten public finances by some £113bn, of which £30bn is to come from tax measures (most of which were announced in the Budget last June). While the Spending Review is expected to focus mainly on where savings can be made, we should not assume further tax changes won’t be announced, particularly following the various consultations that have taken place recently. There is also the potential impact on your customers (or theirs further up the supply chain) to take into account, as public sector bodies are addressing their spend and resetting budgets – the result being many contractors losing work and those still in place having price reductions imposed upon them. Even if you are not a direct supplier to the public sector, your customer who is, will be affected. In addition, the new Office of Tax Simplification (OTS), set up in July this year, is due to make an interim report in the autumn on the various tax reliefs available. As one of the most straightforward ways to simplify the various tax reliefs in existence would be to remove several from the statute books, this could be seen as a way to increase tax revenues by widening the tax base under the unimpeachable banner of “simplification”. There are currently two key schemes for R&D relief for manufacturers – the Small Company and Large Company schemes (with the Small Company Scheme having the more generous reliefs). Aligning the Small Company scheme with the Large Company scheme could achieve some tax simplification while also reducing the reliefs available to some manufacturers. The Treasury is expected to act on recommendations made by the OTS in the 2011 Budget.

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The business case for green supply chains

The benefits of twenty-first century environmental thinking go beyond mere corporate responsibility. Steve Smith, senior vice-president, EMEA, Manhattan Associates and TM’s Edward Machin highlight the considerations for a greener supply chain.

“Going

Green” carries increasing clout these days, as manufacturers realise that blending business with eco-friendly initiatives involves more than social responsibility. In today’s environmentally-sensitive consumer environment, going green also makes good business sense. Companies are finding that demonstrating green credentials requires far more than simple improvements and changes in marketing or sloganeering. Meticulous consumers and a host of experts and analysts are combining to truthfully evaluate which companies are making serious efforts to go green — beyond their advertising claims. Indeed, a recent survey by consumer group Which? found that almost half of the brands it investigated — including Tesco, Sainsbury’s, Green Force and Ecover — market products with sustainability claims that could not be substantiated by the manufacturer’s evidence. One area in which businesses can make meaningful progress toward becoming greener is in their management of supply chains. Traditionally, businesses seeking to optimise their supply chains have focused on moving product and reducing inefficiencies in the supply chain, and not on all the other things that can be done to positively affect the environment. As companies begin to evaluate and change their environmental thinking, they need to look closely at their supply chains as a source of eco-value. If properly planned and executed, “greening” the

supply chain offers a win-win situation for both companies’ operations and the environment. Martin McCann, head of sustainability, SAP UKI, says, “We are finding that companies closer to the supply chain’s drivers have broadly figured out what a sustainable supply chain means for them — at least in the medium term. Those further down the line, somewhat insulated until the CRC’s [Carbon Reduction Commitment] introduction earlier this year, are only now beginning to adopt such attitudes around what the sustainable supply chain means. The old adage, ‘You can’t manage what you can’t measure,’ very much applies here. Before the CRC, many manufacturers didn’t have a good enough understanding of their impact on the gamut of sustainability issues. By establishing baselines on both products and the wider organisational strategies, we are now seeing maturity travel further up the supply chain.”

Stewardship in the supply chain Environmental responsibility involves mitigating the risks already affecting businesses today: global warming and climate change, shortages of natural resources and shifts in consumer preferences. In their book, From Green to Gold: How smart companies use environmental strategy to innovate, create value and build competitive advantage, Daniel Esty and Andrew Winston highlight how companies can move into the vanguard of the green movement.

Supplychain and logistics

On a more granular level, environmental risks already are directly affecting supply chains in the areas of product design, materials selection, sourcing, product movement, facilities management, customer retention and supplier collaboration. In fact, there are so many facets to building a greener supply chain that it’s often difficult to determine just where to start. SAP’s McCann concurs: “Can it be daunting? Absolutely,” he says. “If a company doesn’t know where it needs to get to [sustainability targets] initially, then it is very much grappling in the dark. As green thinking begins to percolate down the supply chain, organisations are starting to focus on the fact that they must have clear, operational and cost revenue objectives that drive the supply chain strategy.” Before investing heavily in redesigning products and facilities, there can be considerable benefits to starting within the four walls — for example, applying the latest innovations in inventory, order, and distribution management technologies as the foundation for green initiatives. The following are examples of how realworld technology applications can combine traditional supply chain strategies with an eco-friendly approach to produce benefits for both the business bottom line and the health of the environment. Inventory management — Companies can optimise order frequencies with replenishment optimisation tools that examine the economics of various ordering cadences. For example, by moving to an every-other-day shipment schedule, a big-box retailer, traditionally receiving daily deliveries of inventory, has the potential to realise both fuel and labour savings while reducing emissions by as much as 40%. Order management — With the right technology, companies can dynamically re-route inventory being received at distribution hubs. By shipping products directly from a supply location to a retail outlet, a company has the opportunity to reduce lead times and delivery miles which in turn adds up to fuel savings and reduced CO2 emissions. Distribution management — Companies can get smarter and greener about the way they pack goods. Through the latest innovations in distribution management technology, a manufacturer supplying goods to an online retailer can optimise order packing via cubing algorithms, which consider weight, volume, product dimensions, constraints, nesting, protection, and other variables. This manufacturer and its retail client will more than likely reap the financial benefits of reduced packaging requirements, as well as a reduction of CO2 emissions, by more effectively and efficiently packing products to maximise three-dimensional space within cases, pallets and trucks. When evaluating each of these strategies, manufacturers will need to carefully consider the impact to their operations. There is no ‘one-size-fitsall’ when it comes to supply chain optimisation or sustainability initiatives. Each of these strategies has eco-benefits, but they also have trade-offs. Once companies ensure the change provides a positive

impact to both the environment as well as the bottom line, the desired win-win will be achieved.

The holistic approach As outlined above, there are functional areas within the supply chain that should warrant initial examination before beginning any environmental programme. Keep in mind that in order to truly lessen a business’s impact on the environment, ultimately we must take a broad, holistic perspective of the environmental impact of businesses — it is not a siloed problem. Supply chain professionals have to measure the effects of any environmentally sensitive or compliant changes, both upstream and downstream, to determine the overall impact from an eco-business perspective. While tactical efficiencies can be gained within an organisation by making changes to supply chain operations, often these changes push inefficiencies upstream to trading partners or downstream to end customers. Protecting and preserving the environment requires global

All the indications suggest that if you don’t have a sustainable supply chain strategy in place, you’re going to struggle to compete over the next five years Martin McCann, SAP

collaboration and long-term solutions. However, one should not be deterred by the potentially complex and massive change involved with global collaboration. Companies can start now by taking a practical view on the technologies available to them that help increase efficiency. In many cases, that same technology can give supply chain professionals a green advantage at little to no extra cost. In the end, it’s simply about what makes good business sense. Says McCann, “All the indications suggest that if you don’t have a sustainable supply chain strategy in place you’re going to struggle to compete over the next five years.” Together with an improvement in attitudes towards sustainability, or a company’s lack of it, “The legislative agenda is set to become wider in coming years,” he adds. “Water and waste, for instance, are set to receive similar levels of regulation to carbon, while reporting on wider sustainable issues will become mandatory within two to four years. The overriding message remains that, with manufacturing so heavily influenced by sustainability requirements, those without a holistic, measured approach to greening the supply chain will almost certainly lose significant momentum and market share.” You have been warned.

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Managing the life of your product Manufacturing is all about product. You have to keep reinventing your product portfolio to keep ahead in today’s market. But the majority of R&D products don’t even make the market and of those that do only one or two really make a worthwhile profit. Simon Holloway explores product lifecycle management as a means for reducing the risk.

“Product

life cycle management (PLM) is the most vital business process in manufacturing today,” says Andy Michuda, chief executive officer of product development software company Sopheon. “A right decision on which product ideas to develop and produce can transform a company’s future. A wrong decision can bring a company to its knees. In the race for growth and profitability, the capacity to understand and act on PLM’s power will separate the winners from the losers”. First, a definition. PLM is the business process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal. It integrates people, data, processes and business systems and provides a product information backbone for companies as well as their partners, suppliers and customers. PLM is first and foremost a business discipline, the goal of which is to eliminate waste and improve efficiency, and is considered to be an integral part of the lean production model. However, because of the requirement for organisations to execute as rapidly as possible, application software is becoming more and more crucial to the success of PLM. It is one of the four cornerstones of a corporation’s information technology structure. Dan Shoenhair of Ping, a PTC customer, supports this view: “PLM can be difficult

to measure,” he says, “but it is absolutely critical to leaning out processes, and critical to improving information flow and control.” Where do ERP and PLM fit? Most manufacturing companies distinguish two main process chains: the operational process chain and the technical process chain. ERP systems largely address the operational process chain, whereas PLM systems automate and enable predominantly the technical process chain. Johan Malmström, PLM business development manager at SAP, emphasises the collaborative nature of PLM. “PLM makes sure that everyone works towards one version of the truth, with clearly defined tasks and responsibilities,” he says. “It manages the product structure and related information, the usage of this data across the product lifecycle as well as the process of creating this data. Process support includes workflow capabilities, program and project management, resource management to make sure the correct resources are working on the correct tasks in order to deliver the right products to the market in the right time.” Michuda explains that PLM is implemented in practice on three different levels, each of which is supported by a different tool set. Transactional Processes: Enterprise resource planning (ERP) applications manage transactional processes. They are designed to unify materials planning, purchasing,

Operational Functions

Technical Functions

Prod Planning

Analysis and Simulation

Material Mgmt

Order Release

ERP

PLM

Procurement and Sourcing

Receiving

Manufacturing

Production Control

Assembly

Control (quantities, times, costs)

Quality

Dispatch

Customer Support

Figure 1: ERP and PLM

Manufacturing Engineering

Capacity Planning and Adjustment

Source: PLM Technology Guide

Planning

Design Engineering

Execution

Planning

Sales Cost Estimating

IT in

manufacturing

Figure 2: PLM Functionality

Source: PLM Technology Guide

PDM

Sourcing and Supply Chain Management

Maintenance and Repair Operations Management (MRO)

Manufacturing Process Management (MPM)

Requirements Management ans Systems Engineering

Quality and Compliance Management

Project /Resouce Management

Portfolio Management

Change Management

Workflow/Process Management

Classification Management

Configuration/BOM Management

Component Management

Document Management

PLM

Application Integration (CAx, ERP, CRM, etc) Visualisation Collaboration (Internal, Suppliers, Customers) Reporting and Analytics

financial transactions, accounting and reporting into streamlined transactional processes. Supply chain management (SCM) and customer relationship management (CRM) applications also address process needs at this level. Technical Data: Computer-aided design (CAD) applications, as well as those related to formula, recipe, or product data management (PDM), are primarily focused on managing the masterfile of descriptive data within the product lifecycle. These PLM systems streamline and continuously improve the processes of defining, designing and producing products, while potentially also supporting aspects of product innovation. They offer collaboration capabilities that enable enterprise-wide sharing of product designs, reducing the chance of design and manufacturing errors. Business Information: The business level of PLM deals with business issues around critical business-related decisions within the product lifecycle. At the business level of PLM the emphasis is on solutions that handle innovation governance issues such as process management, decision support, idea management, product portfolio management, expertise management, and intelligence around markets, competitors and technologies. Regulatory compliance and sustainability are also included within the business level. So what tools are used in a PLM solution? The PLM Technology Guide shows the core technology of a PLM system and some of the many solutions that can rest on the basic technology. The black dashed line outlines Product Data Management (PDM), which is typically used for basic CAD file and Data Management.

What is coming? Dassault Systemes on its website describes PLM v2 as: “…a major redefinition of the PLM markets targeting all users creating, consuming and remixing IP. PLM 2.0 is to PLM what Web 2.0 is to the Web, harnessing collective intelligence from online communities. Any user can imagine share and experience products in the universal language of 3D. PLM 2.0 brings knowledge, from idea to product experience (IP), to life.”

SAP’s Malmström sees the following three trends: Consumer-driven sustainable innovation – with a focus on developing the right products at the right time in fast innovation cycles Global price and time pressure – requires development efficiency, sharing of information in dynamic development networks Increasing product compliance and regulations – manage compliance, controls, documentation and visibility Mike Spragg, Infor’s UK director for the process industries sees the increase in environmental awareness and the incorporation of the ‘green’ agenda as an area of PLM expansion. “PLM has much to offer manufacturers,” he says. “PLM begins at the earliest possible stages of design, meaning these new green considerations are factored in long before products are manufactured.” Deepankar Ghosh, head of manufacturing practice at ITC Infotech provides a clear idea of the importance of PLM. “The PLM industry is comparatively a niche industry which is gaining more currency and acceptance as organisations are realising the value that the PLM process brings to the table. With an ever increasing pressure on bottom line it is imperative that companies make IT investments where the ROI is not only high but fast. “For an organisation to be ahead of its competition, collaboration across key roles and functions within the company and with its supply chain has become critical. The environment for the PLM practice to grow is just right and we will soon be witnessing an unprecedented interest in this area.” So if ERP manages your operations, PLM manages your product portfolio from creation to end of life. PLM solutions really can provide value – you just need to find the one that best suits your pocket and needs. In early 2011, The Manufacturer will host PLM Connect, an event aimed at helping manufacturers find the most suitable PLM solution.

Have your say at www.themanufacturer.com

The world’s leading Microsoft Dynamics ERP provider for Manufacturers “Columbus IT is the leading Dynamics reseller in manufacturing with strong expertise in both process and discrete manufacturing.” Thomas Parbst Worldwide Industry Principal for Manufacturing Microsoft Dynamics

“The level of work that we do now is in the order of three times more product going through the factory, which has been absorbed by a similar number of people.”

www.columbusit.co.uk 0800 0433 054

IT in

manufacturing

ITnews... PLM

Aras lauches smartphone applications for PLM software Aras, a product lifecycle management software provider, has announced the development of Android and iPhone mobile applications for the Aras Innovator suite of enterprise PLM solutions. The apps provide global companies with the ability to extend PLM processes and information to mobile users on the go. This firstgeneration of apps for Android and iPhone smartphones enable users to securely access, manage and edit information in Aras from their mobile

CAD

Autodesk Extends Inventor Publisher to mobile devices Autodesk has introduced the latest release of its Autodesk Inventor Publisher technical communications software. Autodesk Inventor Publisher 2011 software helps manufacturers explain and differentiate their products with accurate 2D and 3D product documentation. The software incorporates new enhancements including the ability to publish 3D interactive instructions directly to iPhone, iPad and iPod Touch mobile devices. “Inventor Publisher enables manufacturers to get the full benefit of their digital design data and explain their products in a modern, interactive way,” said Robert “Buzz” Kross, senior vice president, Autodesk Manufacturing Industry Group. “The ability to publish to a wide variety of formats and mobile devices encourages more effective product communication with broader audiences than ever before.”

device. They can be configured and extended to support companyspecific processes across a variety of industries, including high tech electronics, automotive, aerospace, energy, pharmaceutical, healthcare and consumer products such as footwear & apparel and food & beverage. “The Android and iPhone platforms provide a powerful new way for people across the enterprise to securely participate in PLM processes from anywhere in the world,” said Peter Schroer, president of Aras. “Porchys’s introduction of these

The Aras Innovator App

innovative mobile applications on our PLM platform is a great example of the benefits of an open source approach and the power of the corporate community.”

ITNIBS Free Preactor scheduling software launched

Preactor, the planning and scheduling software company, has announced the launch of Preactor Express, a free-ofcharge alternative to its Preactor 11 software programme. Mike Novels, CEO of Preactor International, said: “As a family of solutions used by over 3,000 companies worldwide, Preactor has become widely synonymous with production planning and scheduling excellence at every level.”

Key priorities for companies in transportation supply chain revealed

A new survey has found that increasing sales (cited by 82% of respondents) and improving customer satisfaction (80%) are the two most important business objectives of today’s automotive and aerospace supply chain manufacturers. The survey, conducted by 3D design, engineering and entertainment software provider Autodesk, polled the views and opinions of 300 decision-makers and influencers working in the UK, Germany and France.

Origin Enterprises choose Columbus IT

Origin, the food and agribusiness specialist, has purchased Microsoft Dynamics AX from Columbus IT to replace a number of disparate systems in use around the group. The solution includes process manufacturing, supply chain management and customer relationship management. Derek Wilson, CIO at Origin Enterprises, said: “We are continuing to develop the quality and breadth of our services to our customers. As we do so we need a scalable solution that will enable us to develop and replicate our business processes in order to achieve our strategic objectives.”

MÖBIUS Business Redesign UK Ltd Book your place now for the remaining MÖBIUS’ 2010 Supply Chain seminars! MÖBIUS Business Redesign invites you to join our Autumn Supply Chain seminars, the topics covered are: • • • •

Supply Chain Risk Management - £99 + VAT (17th November, Maidenhead) Sales & Operations Planning Business Games - £149 + VAT (24th November, Warwick) Lean Logistics (Nagara) Business Game - £149 + VAT (1st December, Manchester) Supply Chain Best Practice - £149 + VAT (8th December, Basingstoke)

Our seminars provide the opportunity for discussions with your professional peers and information on state of the art optimisation techniques. Find out more today! Tel: 01935 848527; Email: events@mobius.eu; Website: www.mobius.eu

MSc Management and Information Systems Professionally accredited by IET and RAeS Developing future business leaders able to combine business and technical expertise to influence organisational performance. This established Masters programme provides tools and techniques for managing business growth and development through the effective management of individuals and teams, and the implementation of improved information systems. You will benefit from hands-on experience with SAP, a leading-industry standard software, and exposure to a broad network of global contacts. For further details, and an application form, please contact:

T: +44 (0) 1234 754086 E: appliedsciences@cranfield.ac.uk www.cranfield.ac.uk/sas/tmis

IT in

manufacturing

ITnews... Field service management

Eagle launches new field service engineer scheduling programme Exel Computer Systems, the UK-based author and developer of the Eagle Field Service Management (FSM) system has launched its new ‘Assisted Scheduler’ functionality within Eagle.

The Eagle Assisted Scheduler uses a look and feel similar to an Outlook diary for ease of use and can synchronise in real time with individual engineers’ Outlook/Lotus Notes diaries. It is designed to work in real time at every level and to provide real time visibility of information across the entire organisation. At the heart of the Eagle Assisted Scheduler lies a user-configurable decision engine to aid the operator to make the correct scheduling choice.

This decision engine takes into consideration pertinent facts including service level agreements, job type, job location, the engineer’s skillset and location, and real time route mapping technologies. The system then makes recommendations for the user based on individual company priorities and allocation rules maximising first fix ratios. Because the system synchronises with engineers in real time, users have visibility of any potential problems or difficulties and can react accordingly. Rue Dilhe, managing director of Exel Computer Systems, said: “Eagle Assisted Scheduling combines the powerful,

flexible functionality required by today’s demanding FSM industry with an ease of use that enables every user to get the best from the system. And when everyone gets the best from the system, efficiency is maximised, costs are minimised and customers are kept happy.”

Rue Dilhe, managing director of Exel Computer Systems

ITNIBS Shipbuilders choose Siemens

The technology company says that more than half of all the major shipbuilders are now using Siemens’ PLM technology in their projects, including Hyundai Heavy Industries, Fincantieri, ThyssenKrupp Marine Systems, Lürssen Werft and the Damen Shipyards Group. Siemens says its software can reduce timeto-market by up to 50% thanks to shortening development, design and engineering times, avoid time-consuming errors and enhance the productivity and flexibility necessary for working with suppliers.

Duvale selects Epicor ERP system

Enterprise business software solutions provider Epicor has announced that Duvale, a specialist manufacturer of precision crafted acoustic movable walls and sliding folding partitions, has selected the Epicor 9 ERP solution. “Replacing our ERP system is a key part of moving forward,” said Mike Doorly, operations director at Duvale. “What attracted us to Epicor was that it could serve every area of our business out of the box with few changes, both now and in the future.”

17-18 NOVEMBER Chesford Grange Kenilworth Warwickshire

THE G R E AT RESET

“The ability to learn faster that the competition is often the only sustainable competitive advantage a company can have.” Arie de Geus

Ex-head of Shell’s Strategic Planning Group

www.themanufacturer.com/mdc

Have your say at www.themanufacturer.com

Creating an

NPD dream team

Martin Wing, managing partner, Europe at Kepner-Tregoe

Taking on the challenge of increasing complexity, technology advance and competition digital technology manufacturer FFEI Ltd have taken a step ahead of rivals by tying new product development to rational innovation processes. Improvement specialists Kepner-Tregoe show how the innovation dream team came into being.

BACKGROUND: FFEI Ltd is a UK-based organisation born out of an MBO from the Graphics Division of FujiFilm, Japan. FFEI is committed to the design and manufacture of sophisticated digital imaging software and hardware (scanning devices) covering a range of markets. Their most mature line of business is their Computer-to-Plate (CTP) product range. These products are typically for commercial printers producing high quality printed products such as company reports and brochures. FFEI employees approximately 170 people across a range of disciplines including; Research and Development, Manufacturing, Customer Support and Business Administration. Key to FFEI’s success is their export markets. Their largest markets are China, India and Western Europe. FFEI exports to over 65 countries. CHALLENGE: In this highly competitive industry, the focus is on bringing high-quality, innovative products to market as quickly and efficiently as possible. FFEI (in a previous incarnation) brought the world’s first digital colour scanner to the market in 1975, but with the desk top revolution and the advent of digital photography staying competitive through the 1990’s was hard. Focusing on the organisation’s core capabilities was essential and recognising what these were was even more important. Digital scanners are now common place in ever office (and every home), embedded in printers. Therefore new products like

Specialfeature Kepner-Tregoe

FFEI’s tissue cell scanner for the Life Science research market, have been essential for the company’s own financial health. This no doubt would not have been dreamt about in 1975. SOLUTION: The relationship between Kepner-Tregoe (KT) and FFEI has evolved since the challenges of the 1990’s. Whilst owned by FujiFilm, (who use KT extensively across their businesses) Andy Cook, Managing Director of FFEI Ltd, was introduced to KT’s business improvement approaches by his then Japanese Chairman. KT’s structure, discipline and thought-provoking approaches were just what the organisation required to harness the skills, knowledge and experience of the leadership and management teams that had set about preparing the business to deal with the competitive market pressures of reducing work flow times, increasing image quality and of course reducing prices. Backed with the resources of FujiFilm, FFEI had the technical skills and business and market knowledge. KT’s approach to harness the strengths of their client’s work force and then provide the rigour, discipline and challenging questions was a dream team combination. As organisations become more complex, as technology advances the state of the art, visible, demonstrable, repeatable ways of solving problems and making choices, filtering information in a structured and intelligent way becomes even more important. This plays to Kepner-Tregoe’s sweet spot. Over time, KT’s rational thinking processes have been embedded into the way work is done within FFEI. Not tied to a particular technology or culture, KT processes provide a platform of rational thinking that has been applied to the key issues facing FFEI. FFEI has worked with KT to set and implement strategy, to improve issue resolution, and to build project success. In fact, FFEI’s Managing Director Andy Cook is now a KT-certified Program Leader who can teach and facilitate KT Problem Solving & Decision Making workshops. He has become fluent in KT’s holistic approach to managing the performance system — the specific variables that can affect human performance. Andy has effectively become the competition for KT! He is self-sufficient in his organisation. Yet this is of no concern to Martin Wing, Managing Partner, Kepner-Tregoe, Europe. ‘The work Andy Cook has done with FFEI is exemplary. Our aim is to encourage and support all our clients to ultimately be self-sufficient in how they apply what we can teach and show them. Our strength is in evolving the approaches and ensuring implementation success at every level of the organisation from the shop floor to the board room’.

focus area of FFEI’s improvement efforts. Embedding KT processes into the way products are developed and brought to market eliminated project delays that had extended up to 18 months and accelerated time to market by 20%. After learning KT’s Project Management approach, teams began to use detailed project plans to focus project meetings, monitor progress, and improve implementation. Project flow within the existing stage gate process has been improved by using the KT Strategic Project Management approach to gather, sort, organise and prioritise projects based on scale and risk, filtering them into either the full NPD process or a leaner process for small, less risky projects. NPD is so critical to organizational success that FFEI actively pursues continuous improvement. During a recent strategic review the executive team set priorities around NPD. The team identified seven, high-priority issues. One was to create a “dream team” of highperforming NPD units, freed from other job functions to concentrate exclusively on developing new products. Analysis had shown that too often, NPD teams used whoever was available rather than best competency fit. The new NPD Core teams were tasked with delivering top-quality, new products on time and on budget. To help meet these objectives FFEI created a performance system of timely feedback, clear expectations, and rewards for valuable behaviours in the teams and up and down the value chain. This is all simple, best practice thinking but sometimes you have to get out of the cut and thrust of day to day thinking and stimulate things with some external help. The teams are now in place to take product development to the next level of success and see what other dreams can be turned into reality. ‘Of all the consultants we have worked with, we value KT the highest, for their rational approaches. We could not have enjoyed the level of success we have without KT thinking’. Andy Cook, Managing Director, FFEI Ltd. RESULTS AT A GLANCE Accelerated time to market for new products by 20% Eliminated project delays of up to 18 months Improved project flow by streamlining the NPD process for small, low-risk projects Created a “dream team” focused exclusively on NPD For more information on Kepner-Tregoe, please email: european.enquiries@kepner-tregoe.com

RESULTS: By embedding KT processes into systems and procedures, FFEI has gained competitive advantage and improved key performance areas. New Product Development (NPD) has been one

Have your say at www.themanufacturer.com

A very long view of UK value-add A group of 14 EU member states is building the world’s biggest eye on the sky – a revolutionary telescope measuring 42 metres in diameter. As the European Extremely Large Telescope project begins pre-build consultation, Cranfield University’s Professor Paul Shore tells TM how a disparate group of British companies and academics teamed up to become a credible supplier of ultraprecision optics, staking a claim in a prize worth £250m.

When

I returned to Cranfield University to be an academic in 2003, the university had received £30,000 from the then Department of Trade and Industry, which paid for us to do the Large Optics Manufacturing Study, or LOMS. It was a tiny project, funded by the DTI, with £10,000 from the Welsh Assembly Government (then the Welsh Development Agency) and £20,000 from a company called Thales Optics. Thales Optics was originally called Pilkington Optronics and is now Qioptiq. It is the largest optics manufacturer in the UK, mainly making optics for the defence sector. We started the study and managed to convince people that the demand for large optics globally would outstrip supply. In Europe at that time, there was pretty much only one major supplier of large

Stage 1: Blank hexagonal segment

Stage 2: Grinding stage (BoX machine)

Stage 3: Measuring stage on Leitz PMM machine

optics in Europe, the French company Sagem, which is partly owned by the French government. Generally in industry the view then was that it didn’t really matter if no-one makes large optics – it’s a niche business and who cares if there’s only one supplier. But telescopes are now a growth industry, and fusion reactors are a serious next-generation energy application. In 2003 I had identified that we were going to build a telescope in Europe that would be so big – and it is being built – it would require between 600 and 1,000 1.5m optics. In fact ESO – the European Southern Observatory – has confirmed that there will be 1,000 hexagonal mirror segments required for the European Extremely Large Telescope (E-ELT). The value of those, for a single project, is about £200m. Then, it was not widely known that some of the hexagonal

Specialfeature The UK large optics industry

mirror segments mirrors which had been made before were manufactured in part using British machine tools. So in 2003 we recognised that the UK had relevant capabilities, but it was all fragmented; we could make a polishing machine, a grinding machine, parts of a measuring machine and a coating machine. None of those companies had ever collaborated to develop a credible, UK supply base. The LOMS study and its funding that I managed was split between several other investigators. I partnered with Dr Philip Parr-Burman at the UK Astronomy Technology Centre at the Royal Observatory, Edinburgh, and Dr (now Professor) David Walker at University College London. David had a spin-out company making small polishing machines, Zeeko Limited, and was interested in making bigger ones. Qioptiq was involved and also a Cranfield spin-out called Cranfield Precision. Cranfield Precision had built the grinding machine for Eastmann Kodak (now ITT). It was Eastman Kodak who made the segments for the 10m scale Keck Telescopes in Hawaii. So there were both grinding and polishing machine technologies developed in the UK. From the six-month LOMS study, we made a recommendation that if the UK really wanted to get into large optics – and the forecast growth was very clear – we could do a project to develop a UK production line.

Stage 4: Polishing stage on the Zeeko machine

Precision made in the UK A group from across Cranfield and UCL – Dr David Walker, Prof David Stephenson, Prof John Nicholls and myself – made a proposal for what is called the Basic Technologies Programme, funded by Research Councils UK (RCUK). We persuaded the Government through the RCUK to receive £3.6m funding to build a production line to make large optics. These are essentially new, highly novel machines and, crucially, made in the UK. There are three machines: BoX, an ultra precision grinding machine, built by Cranfield University with Cranfield Precision; a polishing machine, built by the UCL and Zeeko; then a third machine, RAP, developed between Cranfield University and a US spin-out company called RAPT Industries. These were designed and built over the next three years. In 2007 we were able to demonstrate the manufacturing process. Optropreneurs Ltd, the operating company of Technium OpTIC in St Asaph, North Wales worked with the partnering Universities and housed the developing UK developed large optics production line. We built the production line – they are the best machines in the world in terms of their speed and overall performance. When the Basic Technologies grant was spent, we had individual capable systems. There were some production processing problems to iron out, but it was clear that what we were doing was going to be viable both academically and commercially.

Reflecting top mirror

Laser positioning tracker Laser interferometer

Polishing head E-ELT mirror segment under polish

Stage 5: Optical tower at Technium OpTIC in North Wales

Have your say at www.themanufacturer.com

Special feature The UK large optics industry

Stage 6: Mounting installation stage on the E-EL

At that time, Zeeko Ltd had sold one metre-scale polishing machines during the development of the Basic Technologies project and its business started to develop. Managing director Richard Freeman had been very entrepreneurial with the technology. At the end of 2007, we were incredibly fortunate in winning two contracts, one funded by government through the EPSRC (Engineering and Physical Sciences Research Council), called the Ultra Precision and Structured Surfaces Integrated Knowledge Centre (UPS2 IKC). This was a new initiative by EPSRC to do near-market research. The remit was essentially to research processes, capabilities and products that will generate jobs. As opposed to what we had previously been doing, the academic remit of blue sky research, we were asked to set up something that would be financially self-supporting. This Integrated Knowledge Centre (IKC) is a collaboration between Cranfield, UCL and Cambridge University and based around capability that was developed at Technium OpTIC. At the same time we also won a commercial contract to make the first seven prototype mirror segments for the European Extremely Large Telescope (E-ELT). Concurrently, the incumbent supplier Sagem also won the same contract. The European Southern Observatory, or ESO, had funded two organisations to go away and make the same hexagonal mirrors. This was a big step – we had become credible enough for them to take our UK consortium seriously. The essential link to get the contract came through Zeeko, the spin-out of UCL. Zeeko got the enquiry from direct ESO but they decided that they made polishing machines, not optics. It was decided that the best organisation to head up the contract was Optropreneurs Ltd, the company that operated Technium OpTIC. To summarise: Optorpreneurs Ltd tendered for and won the bid to make seven mirrors, the bid was backed by the fact they had UCL/Zeeko’s polishing machines and Cranfield’s grinding machines. The consortium benefited from the development capacity of the near-market research UPS2 IKC.

In the last two years, Technium OpTIC has changed to Optic Glyndwr Ltd, a venture company owned by Glyndwr University. The operating company for Technium OpTIC serviced this ESO contract by engaging its own staff and by contracting expertise and facilities from the IKC university partners and companies like Zeeko. In this way a credible UK supplier was established capable of delivering the seven 1.5 metre mirror segments. The UK consortium now includes Qioptiq. Although the universities have the key technologies ESO wanted to contract to a company, they wouldn’t have given such a contract to a university. The big deal here was that we got universities to work in an environment that is not a university, as a UK consortium, to create an internationally credible capability to bid against a major French organisation.

Collaboration makes UK a competitive force It’s important to mention: there are lots of parties, academics and businesses involved. When things go wrong everyone gets stressed – these mirrors are one millionth of an inch in form accuracy and 1.5m diameter so they are hideously difficult to make. But my estimation is that there is between £150m and £250m worth of optical fabrication here over five years – that’s a lot of value added. If we can do this in the UK and can compete, then its highend manufacturing jobs. Beyond the E-ELT, the technologies are the same those that go into making optics for fusion reactors, which is a potential future growth market. We’re making pilot optics for these programmes as well. This is a real economy story, and it’s quite defendable even with UK salary levels. At the moment there is a public sector funding review and its outcomes are a concern. But we’re in an improving position to redirect developed capability from public funded research to privately funded or European state funded commercial contracts. Jobs – For long term production, it’s absolutely appropriate to grass roots apprenticeships. In the Cranfield large optics facility we have four technical staff who are apprentice trained, two computer and mathematical literate experts with degrees but not PhDs and high level support from engineers some with and some without PhD’s. In North Wales at OpTIC we have created 15 jobs already to establish the capability to polish and measure the seven E-ELT mirrors, three or four do have PhDs but many are apprentice trained highly skilled optical technicians. In combination these persons represent a leading large optics fabrication capability. Other competition – In Europe, Carl Zeiss is a potential competitor for supplying large optics. When the ESO tender goes out for 1,000 segments, probably late in 2011 – that’s £200m of optic fabrication – I can’t imagine Zeiss will do nothing. There are also about four US companies that we expect to have to compete with.

I M H X 2 0 10

International Materials Handling Exhibition

The International Materials Handling Exhibition, to be held at the NEC in Birmingham from 16-19 November, is one of the UK’s top 10 largest trade shows. With nearly a third of the show’s visitors involved in manufacturing, show organiser Quartz Publishing and Exhibitions will be working with The Manufacturer as its media partner for the important sector of manufacturing. This supplement will provide an in-depth preview of the event and will highlight some of the must see exhibitors showcasing at this year’s event. To pre-register visit www.imhx.biz

Toyota: Sharing the knowledge and driving down costs at IMHX

>> Latest product displays >> Live demonstration areas >> Three master-class workshops

Toyota stand 20F70

Managing your assets

Driving down costs

Practical advice on how elements of this renowned business model can be applied to any business

Getting the best out of your fleet in order to reduce costs and increase productivity

Guidance on reducing costs by promoting best practice within the workplace

For further information on our products and service solutions call 0870 850 1409 or visit www.toyota-forklifts.co.uk

I M H X 2 010

IMHX 2010 to showcase supply chain innovation for manufacturers With signs that the economy is strengthening at last, the UK supply chain industry is gearing up for its flagship exhibition, the International Materials Handling Exhibition (IMHX), which takes place at the NEC in Birmingham from 16-19 November.

he CBI’s Quarterly Industrial Trends Survey

of products and services. Co-owned by the British

recently brought the encouraging news

Industrial Truck Association (BITA), the exhibition

that the manufacturing sector saw output

is the event of choice for virtually every forklift

rise at the fastest rate in 15 years. This

manufacturer and is a Mecca for suppliers of a huge

returning strength to the heart of the UK economy is

and diverse range of materials handling products and

absolutely key to further recovery, so manufacturers

services – from pallet racking to automated handling

continue to need to seek ways to improve efficiency

systems and from software to leasing solutions.

and reduce costs. Many industry pundits believe that

With nearly a third of the show’s visitors involved in

the greatest area of potential for cost reduction lies

manufacturing, IMHX is working closely with The

within the supply chain, a fact that makes a visit to

Manufacturer as its media partner for this sector.

IMHX 2010 a worthwhile investment for many. is the UK’s leading logistics event, with over 300 of

Handling industry shows optimism

the industry’s major players exhibiting thousands

Exhibitors are buoyant about the business

Taking place only once every three years, IMHX

opportunities that await them at IMHX 2010. After Lineshaft conveyor with gravity roller sortation lanes at Peacocks

a disastrous year in 2009 – when orders for forklifts fell by over 33%, consolidating a 14.5% fall during 2008 – Britain’s materials handling industry is now in recovery. James Clark, Secretary General of BITA, believes exhibitors are right to be optimistic. “Recent economic forecasts,” he explains, “provide evidence of encouraging trends, with orders for counterbalance trucks expected to increase by over 15 per cent during 2010 and those for warehouse trucks by almost eight per cent.” This view is supported by research commissioned among IMHX visitors recently by the show’s organisers. A large majority (71%) said that they had plans to purchase new logistics or materials handling equipment in either 2011 or 2012, with nearly 15% of respondents expecting to spend in excess of £1 million. Some 33% of those intending to purchase new equipment indicated that this was in order to replace existing equipment, 29% said it was to improve their existing handling processes

I M H X 2 010

systems; software; pallets and palletising equipment; property; recruitment and training services; third party logistics; transport and distribution; flooring; packaging; handling system design; financial services; and warehousing.

Focus on cost savings The global downturn has renewed the focus of UK industry on cost reduction and, in response, many materials handling suppliers are marketing innovative solutions that will minimise logistics costs for both production plants and distribution centres. Toyota Materials Handling will be displaying a large selection of their products on stand 20F70

Why you should visit IMHX 2010 It is the No.1 place to meet suppliers and manufacturers and network with new contacts.

and 25% stated it was to expand their current capacity. Over 47% of respondents planning to purchase equipment in 2011 expected to have a larger logistics and materials handling budget than in 2010, with a further 40% expecting to have about the same budget in 2011 as they have had this year. Commenting on the survey results, Rob Fisher, event director for IMHX 2010, says, “We are heartened by the results of this research, which

Over 300 exhibitors showing all of the latest products, services and state of the art technology. You can see 1000’s of new products and services gaining firsthand experience. These four days of everything logistics and materials handling only happens every three years with the next show not until 2013! With over 20,000 logistics professionals together in one place - can you afford to miss out?

shows that the economy really is improving at

Pre-register now for FREE

grass roots level. It’s great news for our exhibitors

With thousands of products featured and many

that visitors are coming to the show with specific

shown in live demonstrations, visitors to IMHX will

equipment requirements and budgets in place.

gain hands-on experience and valuable insights

We’re also delighted that an impressive two-thirds

into what’s hot and what future logistics trends are

of respondents agreed that IMHX is the best place

likely to be. Visitors who pre-register for free tickets

to find new suppliers of logistics and materials

to attend IMHX 2010 will receive a special Priority

handling equipment.”

Pass pack by post before the event containing their

Everything for today’s supply chain operations – under one roof!

delegate badge, the ‘Little Black Book’ of handling industry contacts, a fold-out exhibition floor plan and key details of the show’s environmental zone. To pre-register, visit www.imhx.biz

IMHX – the International Materials Handling Exhibition – is a must-see event for logistics professionals. Taking place only once every three years, IMHX is the UK’s premier logistics, materials handling and storage exhibition, showcasing thousands of products and services from right across the supply chain. IMHX 2010 will provide visitors with a unique onestop-shop for everything required in the modern warehouse. Not only will there be materials handling equipment – from forklift trucks to automated logistics systems – but visitors will also discover innovative and cost-effective ideas in racking and shelving; storage solutions; health and safety

Over 90% of those planning to purchase new logistics equipment said that IMHX would influence their buying decision

Materials handling. A BALANCING

ACT ?

SEE THE LATEST LOGISTICS AND MATERIALS

HANDLING SOLUTIONS FOR THE

MANUFACTURING SECTOR AT IMHX 2010.

FREE PRIORITY PASS. If you’re looking to drive down the cost of your supply chain, make sure you visit IMHX 2010 – the UK’s premier logistics event. To get your FREE Priority Pass, visit www.imhx.biz and register your details today.

NEC • BIRMINGHAM 16-19 NOVEMBER 2010 Inspiring Materials Handling eXcellence

Toyota to exhibit its strengths at IMHX Toyota Material Handling UK will be showcasing its products and innovations, along with its full range of services and solutions at IMHX 2010.

he Toyota Material

very narrow aisle truck, ideal for

Latest products

Handling stand at IMHX

accessing racking with restricted

IMHX 2010 will be the first chance

will provide the first

aisle width.

to see the new Traigo HT electric

According to Mike Mathias,

counterbalance forklift. This high

in the UK to see the full range of

managing director from Toyota

tonnage electric truck with load

Toyota counterbalance forklifts

Material Handling UK: “We want

capacities from 6.5 – 8.5 tonne is

and towing tractors and BT

visitors who attend the IMHX

designed to provide a heavy-duty

warehouse equipment together

to leave with an understanding

electric alternative to engine-

since the integration between

of what working with Toyota

powered forklifts.

Toyota Industrial Equipment and

Material Handling can offer and

BT Rolatruc in 2007.

the passion and desire we have to

opportunity for visitors

together’, Toyota Material Handling

environment...We have focussed

Toyota seminar theatre – Sharing the knowledge

UK will demonstrate to visitors how

on a truly interactive stand to give

For the first time at IMHX,

choosing Toyota as a supply partner

maximum opportunity to our

Toyota will be holding a series of

can help to optimise their materials

customers and prospects to see how

workshops in the Toyota seminar

handling activities. With the largest

we can make a difference to their

theatre located on the Toyota

space at IMHX, the Toyota stand

material handling requirements.”

stand. These master classes

With the theme ‘stronger

will feature three live demonstration

are designed to share Toyota’s

to see the many unique product

Live demonstration areas

features and benefits. Combined

The stand will incorporate three

guidance on how they can reduce

with a full range of product displays

live demonstration areas which

costs in their business.

and a seminar theatre featuring a

will provide the opportunity to

series of master-class workshops,

show visitors the unique benefits

Toyota will show how they can help

of the Toyota products range. The

Toyota Material Handling will

customers improve efficiency in

three demonstration areas will

be exhibiting at IMHX 2010

their business.

focus on different product areas

on stand 20F70.

areas which will enable visitors

Toyota’s virtual warehouse will

meet their business needs in this

including hand

also be a key focus on the stand.

pallet trucks, the

This area will give visitors a unique

powered range of

opportunity to see warehouse

counterbalance

automation at its very best.

forklifts and

Demonstrations will include the

warehouse trucks

latest voice activated order picking

and a virtual

technology. For narrow aisle and

warehouse.

confined space environments,

Demonstrations in

the BT Radioshuttle, a patented

the area will take

load carrier designed for handling

place every hour,

pallets in a high density racking

with times posted

environment will be showing its

around the stand

functionality along with the BT

each day.

knowledge and expertise and provide attendees with practical

T o y ota

New compact electric forklift from Toyota As a part of its comprehensive display at IMHX 2010, Toyota Material Handling will be exhibiting its new range of performance and safety focused compact electric forklifts.

ith three new

the areas of safety, productivity

stands out as technology that helps

models offering

and performance,” says Dave

to reduce the risk of accidents and

capacities of 2.0

Rylance, product manager for

drive down costs from damages to

tonnes, 2.5 tonnes

counterbalance at Toyota Material

goods, property and equipment.

and 3.0 tonnes, the electric 8FBCU

Handling UK. “The main advantage

SAS constantly monitors forklift

models feature cushion solid

of the 8FBCU is their compact

operations and automatically takes

tyres which provide excellent

size, allowing use in smaller work

corrective action when it senses

stability on a compact chassis.

spaces than conventional forklifts.”

factors that could lead to the

Designed for all indoor materials

truck or load becoming unstable.

food and beverage to general

Toyota SAS provide supporting safety

manufacturing, warehousing

Every 8FBCU counterbalance

control, one-touch fork levelling,

and distribution centres, the new

model features the Toyota System

and the revolutionary swing lock

models provide better performance

of Active Stability (SAS). This is an

cylinder – all support productivity

than their predecessors thanks

exclusive Toyota designed system

and driver efficiency.

to higher drive and lifting

to actively support forklift safety

speeds. “Like all Toyota forklifts,

and productivity. As the focus on

that support workplace safety

they offer excellent value in

workplace safety increases, SAS

include a low dashboard for

handling applications, from

Advanced SAS functions – including mast tilt angle and speed

Other standard 8FBCU features

excellent visibility of the fork tips, a maximum drive speed setting to help enforce workplace speed limits, and a wheel indicator that shows the position of the wheels at a glance to support safe driving habits.

Productivity and performance For maximum productivity and performance the Toyota 8FBCU range features the exclusive Toyota AC2 power system. Toyota AC2 is built around Toyota 8FBCU’s ergonomic design helps reduce driver fatigue and

new Toyota 48-volt motors and

stress resulting in greater productivity. Standard features include

controllers developed together for

a low, wide step and a new large driver entry assist grip for easy

optimal compatibility, resulting

access to the truck. The new slim-line adjustable steering column and

in higher drive and lifting

small (300mm diameter) steering wheel allow comfortable driving,

speeds. In addition, the ‘accel-

while a new, easy-to-read digital display offers detailed operational

off’ braking function delivers

information at a glance. Optional mini-levers provide fast, accurate,

smooth regenerative braking

ergonomic load handling, and optional PIN-code start-up helps ensure

performance, which feeds power

that Toyota 8FBCU can only be operated by authorised personnel.

back to the battery.

CI Logistics has designed, manufactured and installed its Conveyors International 458 overhead conveyor system into the new powder coating plant at JCB Heavy Products in Uttoxeter, Staffordshire. The heavy duty, drop forged conveyor provides continuous, reliable transport for a range of fabrications through the various stages of the painting facility.

his modern powder

to use the Leicester based company,

coating plant is part of

CI Logistics. It is a well established

a new installation to

company in the manufacturing

Reliable transportation around the plant

increase the capacity of

industry with a strong reputation

The overhead conveyor from

for quality products.”

CI Logistics provides sturdy

JCB Heavy Products based in a 450,000 sq ft purpose built factory

transport for the JCB products. It

Products manufactures excavators

Versatile saw-toothed flight bars

weighing up to 46 tonnes for the

Inside the painting facility excavator

by dual drive electric motors, the

global market.

parts are loaded manually onto

conveyor moves the fabrications

robust saw-toothed flight bars for

continuously around the plant.

alongside the A50. JCB’s Heavy

CI Logistics – a strong reputation for quality products

their overhead journey around

is 250m long with a load bearing of 750kg over a 2m span. Powered

Once loaded, the parts are taken

the paint plant. These special

through a pre-treatment zone, then

flight bars make the conveyor very

on to the powder spraying booth,

A JCB spokesman said: “It was a

versatile as the products can be

drying ovens and finally, to an

joint decision between JCB and our

hung securely from any part of the

unloading area. Here the parts are

turnkey process equipment supplier

flight bar.

systematically checked for quality of paint finish by operatives, before being taken down from the overhead transport system.

Quality for over 30 years The Conveyors International brand of overhead conveyors from CI Logistics was founded over 30 years ago. Using experienced teams of in-house project managers, mechanical and electrical design engineers it offers one of the most comprehensive ranges of chain conveyor and electrified monorail systems in the UK. The materials handling solutions JCB’s excavator parts being transported on the new overhead conveyor from CI Logistics

it provides are realised via a wide range of services, from initial system design and manufacture through to installation and after-sales support.

C I L ogistics and J C B C ase S tud y

CI Logistics installs overhead conveyor into JCB’s new paint facility

EHC TEKnik - exhaust emission reduction EHC TEKnik has developed and manufactured filter systems for exhaust emission control on vehicles since 1983. Their head office is in Partille, outside of Gothenburg, with a customer base primarily in Europe. From 1988, the company has owned its production facilities, located in Partille, where they manufacture the main filter bodies. At present, they employ 19 people who work within development, assembly, delivery and administration. Their filter system has been specially prepared to counteract environmental problems caused by exhaust emissions from vehicles, which drive short distances indoors and outdoors. They currently manufacture a standard range of products,

but can also provide a design service for clients who require a bespoke product for exhaust gas purification. EHC works in compliance with ISO 9000 - a quality assurance system that guarantees security for its customers and final users all over the world. In addition to their offices in England and Sweden, they now have sales offices in Belgium and Germany. With 26 yearsâ&#x20AC;&#x2122; experience in the industry, EHC TEKnik has built on its reputation for short lead times, flexibility and reliability to create a global customer base catering to a wide range of customers in the armed forces, the automotive industry and the construction industry. EHC TEKnik will be displaying on stand 20B28

An obvious choice With over 30 years experience providing materials handling and storage systems, CI Logistics is dedicated to providing fully integrated bespoke solutions. them to have “complete control over

with all system integrators to assist

Leicester, the company

the way the final system works and

where necessary.”

specialises in the

provides for greater flexibility. All the

manufacture and

software associated with a conveyor

CI Logistics is displaying at IMHX on

installation of tailor-made, fully

line, including barcode scanning

stand 19L147. Visit the stand to talk

integrated solutions which include

and warehouse management, is

to Gary and his team about the latest

overhead conveyors, floor conveyors,

specifically written for every project.

in materials handling solutions. You

garment handling/storage systems,

Our systems are easily integrated

will also be given the chance to

mezzanine floors and vehicle loading

into a larger operation, and we work

win an Apple i-Pad.

equipment. A comprehensive in-house team complements this diverse product offering, with every facet of a project’s implementation catered for exclusively by the experienced CI Logistics team. With comprehensive controls, software and engineering prowess, CI Logistics provides a complete service from initial design right through to after sales service. According to managing director, Gary Bale, few companies share the knowledge, experience and ability of CI Logistics to develop specific handling solutions for every product need. “We are a specialised materials handling solutions provider within the engineering and manufacturing sectors,” he says. “We have an excellent engineering and controls team all under one roof which together can provide a solution to

Multi-level mezzanine at Blacks Leisure

problems which are very difficult to overcome. Over the years we have designed and manufactured some very large production lines handling products ranging from small rubber components weighing only a few kilos to earth movers and fork lift trucks weighing up to 15 tonnes and it is fair to say, that there are not many companies that would take on a project to move such heavy products because they simply don’t have the engineering expertise.” In its day to day operations, CI Logistics is determined not simply to provide a conveyor, but to find a complete solution to the needs of the client. As such, the company incorporates its own specialised software, support and service teams which, according to Bale, allows

CI Logistics – Areas of expertise Overhead conveyors CI Logistics manufactures a comprehensive range of overhead and inverted chain conveyors together with power and free conveyors and electrified monorail systems. Floor conveyors The diverse range of mechanical handling equipment designed and manufactured by CI Logistics includes powered, gravity, belt, package and pallet conveyors. These are suitable for use in the manufacturing, warehousing and distribution industries. Garment handling/storage A dedicated team in CI Logistics designs bespoke garment handling and storage systems for the fashion and garment industries. The full product offering includes storage, hanging garment and flat pack handling systems, conveyors and mezzanine floors. The turnkey solutions are suitable for almost any garment storage and handling need from retail stockrooms to international distribution centres. Mezzanine floors Purpose built, structural steel mezzanine floors can be tailor-made to boost storage capacity. These are available as single and multi-tier versions with a wide range of loading capacities. Vehicle loading equipment To speed up and simplify vehicle loading, CI Logistics manufactures a comprehensive range of loading equipment that includes boom loaders, van loaders and gravity/powered stretchaveyors.

C I L ogistics

eadquartered in

Recommended Exhibitors at IMHX 2010 EHC Teknik – Stand 20B28

CI Logistics – Stand 19L147

EHC Teknik has developed and manufactured filter

CI Logistics is a market-leading UK supplier

systems for exhaust emission control on vehicles since

and manufacturer of quality materials handling

1983. The company produces a range of exhaust filters

and storage systems. Supplying equipment

and cleaners for indoor driving of vehicles of all sizes

internationally including overhead conveyors,

and types. The company’s ISO 9000 compliant Filter

floor conveyors, garment conveyors and storage

System has been specially prepared to counteract

systems; the company also has an in-house electrical

environmental problems caused by exhaust emissions

controls design and build service enabling it to

from vehicles, which drive short distances indoors

provide innovative solutions to all materials handling

and outdoors. The company currently manufactures

challenges. CI Logistics fully understands the effect

a standard range of products, but can also provide

repair and maintenance downtime can have on

a design service for clients who require a bespoke

delivery targets and offers a comprehensive spares

product for exhaust gas purification.

supply and preventative breakdown service.

Calor Gas – Stand 18M130

SDI Group – Stand 18N160

Since 1935, Calor has provided innovative solutions to

SDI Group UK is a leading provider of systems and

homes and businesses. For users of forklift trucks, Calor

solutions for all aspects of distribution centre materials

LPG is the ideal solution, with different supply options

handling. As a leading systems integrator in the

to suit individual needs. If your operation of forklift

UK and the USA, the SDI Group designs and builds

trucks is kept to a minimum, exchangable cylinders are

bespoke materials handling solutions for distribution

the ideal solution. Alternatively, for larger operations,

centres, principally for general merchandise retailers.

Calor also offers a bulk tank installation solution with

Built on its strong consultancy skills, the Group

re-fillable cylinders. For those looking to minimise their

provides solutions to customers’ warehousing needs,

impact on the environment, LPG is the cleanest fuel when

ranging from initial consultancy services that identify

compared to diesel and electric (SAP, 2005). So in sensitive

and highlight these needs, to maintenance and

environments, Calor LPG is the ideal choice.

technical support post-implementation.

COMBILIFT – Stand 19K130 Combilift, the manufacturer of customised 4-way

on safer handling procedures and increased productivity.

handling equipment, offers forklifts with lift capacities

The award winning counterbalance design 4-way

from 2.5t to 25t, plus specialist products designed

Combi-CB, Combilift’s smallest product, will be on

for container handling. Designed for the space saving

display at IMHX and is now available with capacities of 3t

handling of long and bulky loads, the company focus is

and 4t, with diesel, LPG or electric power options.

DLoG (UK) – Stand 18M175

George UTZ – Stand 18N158

DLoG (UK) operates in the warehousing and logistics

George Utz has been well known for many years

sector, with specialisation ranging from ports to

as a manufacturer of high quality handling

distribution centres, as well as manufacturing. DLoG

solutions for UK and European industry sectors

will be exhibiting its extensive range of vehicle mount

including: automotive, retail, postal services and

industrial computers designed specifically for the unique

distribution. Products include containers and

demands of the warehousing and logistics environment.

inserts, pallets, dollies and pallet boxes. The

The hardware provided by DLoG is known for its quality

company can supply customer-specific products

and high engineering standards. The products are highly

in any colour and with any logo using most

configurable and are ideal for daily logistics tasks in the

advanced technology for branding, including

distribution centre, port or warehouse, and are even

in-mould labelling, which allows inclusion of

suitable for use in a deep-freeze warehouse environment.

high-quality graphics.

Clever thinking that increases your efficiency and reduces downtime.

We never stop thinking of clever ways to keep your business efficient: • Magnatract® technology reduces the risk of particles blocking the valves • Think Tank® telemetry automatically orders gas when you need it • Calor’s larger capacity Fixed Fuel Tanks reduce downtime • Customer training available on or off site • Emergency support available 24/7, 365 days a year • Each Calor cylinder carries a unique safety test ‘date stamp’ • Engineering expertise from CalorForce helps keep your forklifts moving Choose Calor LPG and you’ll really see our LPGenius at work.

Find out more on stand 18M130 at IMHX

Call Calor on 0800 121 7841 or visit calor.co.uk 85

Recommended Exhibitors at IMHX 2010 CLICK Reply – Stand 20D135

Soft Design RTS AB – Stand 18M172

CLICK Reply has extended its very successful supply chain

Soft Design is a leading Automated Guided Vehicle

execution business to the United Kingdom and Ireland. With

(AGV) supplier based in Gothenburg Sweden, with

over 3000 customers and 12,000 users in retail fashion,

over 20 years of experience in the AGV business. Soft

grocery and consumer goods; automotive production

Design supply AGV Systems throughout Europe to

lines and spare parts management; third party logistics

major system integrators or direct, delivering high

and manufacturing, Reply has an enviable track record of

quality AGV manufacturing and software. AGVs work

increasing the performance its customers’ supply chain.

without breaks or holidays 24 hours a day 7 days a

The CLICK Reply suite is a functionally rich warehouse

week 365 days a year, and while many companies

management product, developed over the last 15 years to

have not considered implementing AGVs thinking

meet its customer requirements. Technically advanced, it is

they may be too expensive for them, this is quite

fully configurable, deployable quickly and represents a low

often not the case. Once installed an AGV system is

total cost of ownership.

highly likely to last for 20 years or more.

Palletblocker Quarantine Systems – Stand 20G8 Palletblocker has created the world’s first commercially

electronic or paperwork quarantine systems to prevent out of

available lockable pallet quarantine device. With Palletblocker,

specification products reaching the market. Palletblocker adds

goods can be held securely in their current warehouse

another level of protection and is a highly visible and tough

locations, removing the need for dedicated quarantine areas,

barrier to fork-lift entry. In operations that have a seasonal

helping to maximise warehouse space utilisation and save

workforce this back-up to existing quarantine systems

on extraneous pallet movements. Most companies rely upon

provides invaluable protection for supply chains.

DLoG Manufacturer Advert Sep 2010.ai 17/09/2010 10:50:49

Versatile Ruggedised Mobile Computer Solutions Whether it’s low temperatures during food processing, withstanding strong vibrations on the forklift or picking trolley or resisting water in production, DLoG industrial computers are designed to work continuously and reliably. With a range of screen sizes for mobile and static applications, coupled with the ability to develop solutions that are aligned with your build specifications, DLoG is able to supply and support customers in the successful implementation of even the most demanding computing infrastructure.

See us on stand 18M175

We offer a range of mobile solutions for the warehouse to keep your supply chain moving

CMY

Technology integration

Customised solutions Innovative solution design Reliability under extreme conditions Certification by independent laboratories

New at IMHX! • ISO 9001:2008 • Embedded PC technology • Fanless design • Robust touch screen • IP54 / IP65 / IP66 / IP67

Tel: +44 (0)121 544 6256 | www.dlog.co.uk | sales@dlog.co.uk

17-18 NOVEMBER Chesford Grange Kenilworth Warwickshire

THE G R E AT RESET

“In the long history of humankind (and animalkind, too) those who learned to collaborate and improvise most effectively have prevailed.” Charles Darwin

www.themanufacturer.com/mdc

solutions

SDI GROUP • UK

See us at IMHX on stand:

Integrated Materials Handling Solutions 18N160

SDI Group is a leading specialist in the provision of integrated materials handling solutions for retail, wholesale, fulfilment and e-commerce distribution operations. The Group’s collective experience and expertise encompasses the entire spectrum of distribution centre operation and infrastructure, from consultation, design and building to installation, maintenance and support. As a global systems integrator, the Group designs solutions which improve productivity and retail sales margin while supporting sales growth.

• CONSULTANCY • DESIGN AND BUILD SERVICES • SOFTWARE SOLUTIONS AND WAREHOUSE CONTROLS • SORTATION AND CONVEYOR SYSTEMS • ASRS AND WAREHOUSE & EQUIPMENT SERVICES • MAINTENANCE

SDI Group UK, 11 Jarman Way, Orchard Road, Royston, Hertfordshire, SG8 5HN UK Tel: +44 (0)1788 574666 Web: www.sdigroupuk.com Email: sales@sdigroupuk.com A member of the SDI Group

His name is Guy, but if you shout Brammer, he’ll be there in a flash. Brammer people always lead from the front. Because successful partnerships demand far more from an MRO distributor than prompt and competitive product supply.

That’s why Guy and his Brammer colleagues never back-pedal when it comes to reducing working capital. To understand exactly how Brammer can add value to your business at every turn, call 0870 240 2100 now or visit www.brammer.co.uk

Guy Dobson Systems Analyst/Programmer

It’s the people that make Brammer work for you

Manufacturinginaction Sponsored by TBM Consulting Group

Factory of the month

Coca Cola Enterprises 90 The coke side of life

Tim Brown met with operations director Ian Johnson to talk about the important steps the site has made to reach its enviable status as Europeâ&#x20AC;&#x2122;s largest Coca-Cola bottling plant.

MEDICAL DEVICES

Advanced Medical Solutions 100 Advanced Medical Solutions has used innovative R&D capabilities to win a strong position as an international supplier of innovative wound treatment technology.

AUTOMATION EQUIPMENT

Sims Engineering 140 Founded in 1979, Sims Engineering has developed a reputation as the supplier of choice for the automotive and pharmaceutical industries. MEDICAL EQUIPMENT

Elekta 142

AUTOMOTIVE

Lander Automotive 113 Mark Young hears how automotive supplier Lander refocused on its core competencies to flourish despite the impact of the recession.

Lorenzo Spoerry finds out how a strategic logistics partnership has changed the pace of Elektaâ&#x20AC;&#x2122;s operations and services. MACHINE KNIVES

Durham Duplex 145

HEALTH AND BEAUTY

BCM 120

Having recently celebrated its centenary, blade manufacturer Durham Duplex has undergone 35 years of modernisation and developed a strong export driven sales strategy.

Mark Young hears how a commitment to comprehensively aligning its business with that of its customers is proving a successful strategy for BCM.

HEATING SYSTEMS

ABS 149

HEATING CONTROLS

Danfoss Randall 129 Edward Machin meets the electronic room heating manufacturer and discovers a company anything but feeling the heat of the recession.

Arnold Building Services, a heating design and installation specialist, goes above and beyond to ensure customer satisfaction. GEARED MOTORS

Parvalux 151

TELECOMMUNICATIONS

Fujitsu Telecommunications 133 Jane Gray discovers a telecommunications company that has been shaped by the unforgiving demands of price, service and globalisation.

An inspiring tale of transformation and modernisation from a salesdriven UK manufacturer with growing exports.

SHEET METAL

KMF 137

Precision sheet metal sub-contractor KMF has found a formula for success.

All companies featured will be entered into the MIA Award 2010

At full capacity, the plant can fill 360,000 cans and 290,000 bottles every hour.

coke The

side of life

Located at the crossroad of the M1 and M62 motorways, two of the countryâ&#x20AC;&#x2122;s major road transport routes, is the Coca-Cola Enterprises Wakefield site, Europeâ&#x20AC;&#x2122;s largest Coca-Cola bottling plant. Tim Brown spoke to operations director Ian Johnson about the important steps the site has taken to reach its enviable status.

Factory of the month Coca-Cola Enterprises

Having

started his career as a technician at the plant more than 20 years ago, Johnson knows the site better than most. In fact, Johnson stood at the site whilst the plant was under construction and attended the opening of the factory in 1989. At that time the plant operated just four lines with 120 people and produced a very standard range of products. Today the plant has 10 lines, employs over 500 staff, runs 24 hours a day and boasts a massively diverse range of products which extends well beyond simply Coca-Cola. “In 1989 we only did 24 cans in a tray as the standard. If someone asked what has been the biggest change since 1989, it would be the number of formats our drinks now take. What the market demands is variety and flexibility which is driven by consumer interest, promotions and the wishes of the retailers.” says Johnson.

CRS is good business; most CRS projects are not only good for the environment but they are just good for business operations director, Ian Johnson

The Wakefield site is operated by CocaCola Enterprises (CCE), a UK based subsidiary of Coca-Cola Enterprises Inc, the world’s largest marketer, producer and distributor of The Coca-Cola Company’s (TCCC) products. CCE is responsible for manufacturing, selling and distributing over 80 different soft drinks products across Great Britain. CCE has manufacturing sites in Great Britain, Belgium, the Netherlands and France. “There is a lot of power in that network in terms of knowledge and best practice sharing,” says Johnson. “We have a good relationship with the other areas because we are not in competition as we have our territory and they have theirs. At present we are working towards developing standardised packaging among the different plants

Factory of the month Coca-Cola Enterprises

and have already achieved this with our Powerade product. A more modular packaging range not only assists with improving operational efficiency but is also of great assistance if one particular area requires extra supplies for any reason. In such a situation we wouldn’t necessarily have the labels or the artwork printed but could easily have this done.”

A fluid operation To deliver the wide portfolio of products catered for by CCE, the Wakefield plant operates 24 hours a day, seven day a week, with distribution only closing on Christmas day. The staff at the

Wakefield plant work a 12-hour continental shift system as standard. This involves employees working three day-shifts followed by three days off, then three night-shifts followed by three days off. “We also operate a talent management review where we try to identify people with potential for development within the business for the future,” says Johnson. “We conduct those reviews twice a year. The business is completely focused around team work. There is very much a team ethos.” To assist with its staffing requirements, in 2007 CCE began a close working relationship with recruitment partner Right Direction (RDUK). Using its expertise in change management, RDUK has provided a consistent standard of people and staff training on the Wakefield site. In addition to the recruitment process Johnson says that, as a part of their contract, RDUK “has also delivered a high level of onsite

David Cameron is show around the Wakefield site by Operations Director Ian Johnson

Factory of the month Coca-Cola Enterprises

supervision which has been massively beneficial in maintaining our high operational standards”. With over 500 staff working long shifts, the safety of the employees is of paramount importance to CCE management. Over the last five years, the plant has experienced a massive reduction in injuries and accidents reducing an average of 15 lost time accidents per year to less than five per year. So far in 2010 the site has experienced only one which was not actually work-related but did occur on the site. “There are three primary aspects which assist with safety improvements,” says Johnson. “The first is ensuring the physical condition of the machines is maintained. The second is monitoring the area surrounding the machines including the correct guarding of any machinery. Thirdly is the monitoring of staff behaviour to guarantee the general area is clean, safe and any defects are reported. The third facet is really all about leadership and demonstrating that safety is important and providing consequences for not following the rules. We reward good behaviour and there are negative consequences for poor behaviour.”

Portfolio The company portfolio encompasses a full range of beverage categories, including soft drinks, energy drinks, still and sparkling waters, juices, sports drinks, fruit drinks, coffeebased beverages and teas.

Whilst most stores provide their own shelf or fridge space to accommodate a range of CCE products, the company also offers its own shelving solution to maximise brand exposure and store sales. “We now also do point-of-sale merchandisable units which are stacked straight on to a pallet and just wheeled to the end of an aisle in a super market. This allows us to gain additional access to stores where shelf space is at a premium. The plastic units are returned to us via a third party who cleans and checks them.”

“As a company we realised that we were very heavily dependent on a few core products so what we have tried to do in the last few years is balance the portfolio,” says Johnson. “When it comes to our products, the key is to give people a choice and have a wide enough portfolio so the choice is varied while also offering a number of different pack formats. This of course brings in complications in terms of the manufacturing process because of the different flavours and packaging variants. We now Products packaged at the Wakefield site include: Coca-Cola, Sprite, have up to 400 Diet Coke, Coke Zero, Schweppes, Oasis, Relentless and more. SKUs on this site.”

To assist with its more than 500 staff, CCE have a a close working relationship with recruitment partner Right Direction

VSG Intelligent Plant Protection the VSG Way

SG are a leading supplier of security services throughout the UK, with a workforce of 6,000 plus personnel. The companyâ&#x20AC;&#x2122;s core services include guarding, security systems, remote monitoring and background screening. In the manufacturing sector VSG has developed a range of services designed specifically to support plant protection through cost effective and bespoke solutions which bring together the best use of manpower, systems and physical security measures. Key to the approach is a commitment to raise the standards

and skills of security personnel, enabling them to provide a higher value more attentive service. Specific development for the manufacturing environment includes advanced first aid and first responder skills, fire prevention and management, health and safety and risk management. The service offering is enhanced through VSGâ&#x20AC;&#x2122;s systems capability, enabling the company to provide holistic security incorporating proven technologies, which are carefully specified, installed and maintained. Through this approach VSG has become a leader in its market place and working with major

manufacturers such as Coca Cola Enterprises, the company has established a strong track record with demonstrable service levels and excellent customer satisfaction.

Published in association with: VSG Tel: 01604 744014. Email: sales@vsg.co.uk Web: www.vsg.co.uk

Factory of the month Coca-Cola Enterprises

CCE Wakefield is currently in the process of introducing 25% recycled PET plastic into all 500ml bottles

Because the high level of automation at the site, the number of workers doesn’t accurately represent the sheer scale of the operation at the Wakefield plant. Sitting on a 146,860m2 site, when all ten lines are operating at full capacity, the plant can fill 360,000 cans and 290,000 bottles every hour, packaging a total of nearly half a million litres of product. “Our can lines run at 2000 cans per minute or 33 cans a second. So when we have all three of our can lines are operating, we are actually manufacturing 100 cans a second,” says Johnson.

Lifting the cap The Wakefield site operates a five year plan to ensure growth in output will keep up with forecast headline requirements. “One of the things we do very well at Wakefield,” says Johnson,

“is what we call our five year rolling master plan. In 2009 our output was at 108 million physical cases. In 2014 we believe this will need to be around 125 million cases with a peak capacity equivalent to 150 million cases. The central engineering technology team work with our onsite engineering team to come up with the best solutions for how to reach those targets.” In addition to capacity, the Wakefield site is also planning to increase its storage capacity from its current 53,000 pallets in the region to approximately 60,000 pallets by 2014. Up to 30,000 of these pallets are currently stored onsite and the company is hoping to expand its warehouse to accommodate planned storage growth and reduce its current reliance on offsite storage. This is a positive in both economic and environmental terms as it promises to significantly reduce the amount of unnecessary transport. While increasing capacity and improving efficiency is of vital importance at Wakefield so as to allow for planned future growth, the site is also focused on quality assurance. Working in complaints per million units, the site has experienced a 29% reduction in complaints over the last five years now receiving only an average of 1.7

Productive and proactive staffing solution or just temporary labour? F

ollowing a gruelling tender process, which spanned over a 3 month period and saw 52 agencies put through their paces, Right Direction UK were awarded the prestigious contract to supply a temporary staffing solution to the world’s largest drinks manufacturing site. RDUK was introduced to Coca Cola Enterprises Wakefield site in March 2007 where we very quickly made our mark. With our passion and flair for success, robust interview techniques, training & development plans, change-management expertise and a clear strategy which would offer a multi-skilled workforce of the highest standard. RDUK’s Implementation Team was paramount to our early success, offering expertise in key areas such as; health & safety, human resources, quality systems, training and best practise in on-site management. Our dedicated

support structure is unique within our industry and is what sets us apart from our competitors. Market conditions make the manufacturing industry’s labour requirements extremely volatile and with this is mind is was essential for CCE to choose a ‘partner’ who could offer a proactive, innovative solution, whilst maintaining a core pool of trained and skilled labour. Relationships on site became more cemented, which in time led to RDUK being asked to manage a high profile project and recruit permanent technical operatives. This was testament to RDUK’s recruitment, training & up skill processes, which ensured that only candidates of the highest calibre met the standard being set by CCE! Subsequently, the majority of technical operatives placed as part of this project were RDUK temporary employees.

Right Direction UK has been on site for over 3 years now, and we put our continued success down to constant evaluation and adaptability of our supply chain to ensure continuous improvement is an on-going project. Our business growth is going from strength to strength as we have been able to bespoke this business model to any operation regardless of location or size and offer the key benefits that CocaCola Enterprises are enjoying and are extremely proud of.

Published in association with: right direction Tel: 01132 881 070 Email: info@rightdirection.co.uk Web: www.rightdirection.co.uk

Factory of the month Coca-Cola Enterprises

complaints for every million cans or bottles sent to market. “That reduction is all due to root cause analysis,” says Johnson. “Every single complaint that comes back gets looked at to try and get to a root cause. We try and get all the cans back to try and eliminate the cause.” The current global economic and environmental focus has not escaped CCE with operations having been affected on both fronts. According to Johnson, one of the most noticeable changes since the beginning of the economic crisis is a large increase in peaks and troughs due to a general destocking of supply chains. He says that demand is now more closely aligned with the weather and promotions. “We work very closely with retailers and we know volumes will go up in summer but we don’t know when the big spikes will be. As the requirement for reduced lead times increases, because the end-toend supply chain has less stock in it, improved responsiveness is definitely needed... While we are part of Coke and are a very robust company. We are not simply riding a wave the whole time.”

In the current environment The company has also increased its focus on corporate responsibility and sustainability. The site uses a number of key business indicators including water, energy and waste which are used to gauge environmental performance. Using a program called Monitoring and targeting, CCE Wakefield monitors its levels of consumption and, using that data, investigates how to reduce it. The company is also committed to reducing the amount of unnecessary raw material used in its packaging. According to Johnson: “In 1989 a Coca-Cola can weighed over 13g but it now weighs less than 10g. We have experienced even greater reductions with PET bottles where, in the case of a 500ml bottle, we have reduced the bottle weight from 38g to 22g.” Using such examples which greatly reduce the amount of raw material required, Johnson says “CRS is good business; most CRS projects are not only good for the environment but they are just good for business.” Not only reducing the amount of raw material required for the manufacture

Coca-Cola Enterprises (Wakefield) at a glance Location

41 Wakefield Business Park, Wakefield

Sector

Food and drink

Sixe of facility

146,860m2 site, 72,000m2 area under roof

Employees

Over 500

Key products

Coca-Cola, Sprite, Diet Coke, Coke Zero, Schweppes, Oasis, Relentless

Contact

www.cokecce.com

What the market demands is variety and flexibility which is driven by consumer interest, promotions and the wishes of the retailers operations director, Ian Johnson of the end product, CCE last year began a more concerted effort to increase the level of recycled material it uses in its bottles. “We are now in the process of introducing 25% recycled PET plastic into all our 500ml bottles,” says Johnson. “We are also trying to make it easier for consumers to recycle on-the-go. We’re doing a lot of work to establish recycle zones and we are trying to target music festivals and points where a lot of people congregate. The entire company is really looking to push the recycling agenda because we feel we’ve got a responsibility to energise recycling.” As a large consumer of energy, CCE Wakefield is also focused on improving its efficiency and reducing its consumption. The company has incorporated an electricity monitoring system with nearly 20 individual meters onsite to allow data transparency and ascertain how much energy is being used, where and when it is being consumed, and under what circumstances. The company is able to see what particular pieces of machinery are using the most energy and formulate a plan to use them at the most efficient rate possible. The Wakefield site is also currently investigating the potential installation of a combined heat and power system to convert the waste heat from its boiler into electricity. As a representative of one of the world’s most recognisable brands, CCE Wakefield has proved itself not only a worthy ambassador for the Coca-Cola Company but also an excellent collaborator in improving operational excellence amongst its various sites. By concentrating on improving performance while reducing consumption, the site has been able to make considerable operational improvements. Not content to rest on its laurels, Wakefield has firm plans to strengthen its status as a CCE leader through sustainable growth and continued efficiency gains.

Lean with a

healing touch Advanced Medical Solutions has used innovative R&D capabilities to win a strong position as an international supplier of wound treatment technology. The companyâ&#x20AC;&#x2122;s move to a new, ÂŁ4.5m modern facility goes hand in hand with a commitment to lean and continuous improvement.

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Medical devices Advanced Medical Solutions

The

Winsford-based company started as a wound dressing research house in 1991 and floated on the USM in 1994 with full LSE listing in 1996. It pioneered the development of high performance, transparent polymer dressings and later introducing alginate dressings, produced from seaweed for fast healing in a moist environment. In 2002 the company moved to the AIM market and acquired MedLogic Global Holdings, based in Plymouth, which provided the group with superglue-based medical adhesive technology. Liquiband sells in over 20 countries. Subsequently, the company acquired Corpura BV, based in the Netherlands, which manufactures foam products. Advanced Medical Solutions (AMS) also produces silver alginate dressings which are effective against a wide range of microorganisms including MRSA. Wound care products are supplied as own brand and as private label. The group employs 241 people across three locations, at Winsford, Plymouth and Etten Leur in The Netherlands, including a field-based team supporting key global markets in Europe and the USA. The company had turnover of £24.1m in 2009, up 19% on 2008, with profit up 51% to £4.1m year on year. Their ActivHeal dressings are claimed to give annual costs savings of 54% to University College London Hospital NHS Foundation Trust. The new medical devices facility at Winsford comprises R&D laboratories, offices, manufacturing and advanced warehousing, which allows rationalisation of AMS’s two facilities into a single new building and creates additional capacity to support future growth. The facility is scheduled to be fully operational by the end of 2010. Steve Platt, general manager of AMS’s new world class Winsford facility joined AMS in June 2010 and comes with outstanding lean experience. Platt began his early career with Toyota Manufacturing (UK), followed by JCB. He then became a consultant at RWD Technologies implementing lean in the automotive sector, rail industries and MoD, followed by managerial positions at Danish company Nilfisk-Advance, where he was responsible for the build of a new factory for industrial cleaning equipment in Hungary based on the Toyota model.

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REEL SUCCESS Reelvision has rapidly developed a reputation as a supplier who fulfils the demand for superior printed short run carton supply and genuinely enables itâ&#x20AC;&#x2122;s customers to order exactly what they want, when they want it.

hrough accreditation to ISO9001:2008 and PS9000:2001 quality standards Reelvision is now recognised as a major supplier to the pharmaceutical medical industry. As a direct result Reelvision is expanding its Haslingden operation and installing a further production line. This major investment will see a another advancement in the technology of the inline one-pass production process allowing for 7 colour printed, UV varnished, cut creased, Braille embossed cartons to be manufactured in less than 10 seconds. These cartons are subsequently fed down a Bobst gluing line where Pharma codes are read for a final verification check

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before being boxed ready for despatch to the packer. Reelvisions unique manufacturing approach has enabled itâ&#x20AC;&#x2122;s customer to buy smaller batch quantities of printed packaging and reduce the financial burden of excess stock. This flexible production

service is also tackling the costly exposure of packaging write-off driven through continuous regulatory changes, unpredictable forecasts and the need to refresh packaging designs in order to entice the end user.

Published in association with: Reelvision Print Tel: 01706 831217 Email: info@reelvisionprint.com Web: www.reelvisionprint.com

Medical devices Advanced Medical Solutions

Lean thinking Platt’s passion for lean is playing a major role in the development of AMS operations at all levels. “We want continuous improvement to become a part of daily life. We are adapting the structure internally following the lean approach, identifying and specifying key roles which will encourage continuous improvement responsibility at all levels. We are focused on the workgroup and KPIs are closely tracked at high level and workgroup level.” AMS has a centralised management centre, with a carefully structured approach to KPIs transferred across the business. “Our key measures are safety, quality, output, cost, people training, and the environment. These measures are tracked on a daily basis and are prioritised in that order, starting with safety,” he explains. Every day a crossfunctional meeting is held for 20-minutes for anybody with input to these KPIs. There is hourly tracking of all lines, with planned versus actual metrics. The company has a number of six sigma experts within the group, mainly used to address very infrequent issues (about one in a million) “as we get more benefit from practical problem solving,” says Platt. He shares opinion with some Toyota experts who suggest that six sigma often offers problem-solving without solving the problem! Platt reckons “In some cases it could take six months to collect the data for a six sigma analysis, when a simple 5-Why analysis could suffice. We have to remember the sense of urgency to resolve daily issues and not let them linger on. However, six sigma is an effective tool for problem solving when a 5-Why activity won’t do.”

steps,” says Platt. “The key for me is to be able to go back to the sales department and guarantee delivery of 100 per cent quality 100 per cent of the time.” Currently the company is going through a substantial period of change with the move to a new fully integrated facility. By pushing responsibility down into workgroups, everybody can see the impact they have on the bottom line, not simply the managers. Team-boards are located prominently throughout the plant and reflect commitment to shared responsibility and ownership. “We set objectives that raise the bar, and implement the lean support and thinking to get there,” he says. “Safety, quality, delivery, cost, people and environmental improvements have to be driven every hour of every day. We are also using external support to speed up the

Typically, AMS uses an 8-D approach to problem solving: 1 defining the problem 2 the objective 3 identifying the history of the issue 4 a brainstorm session 5 fishbone approach 6 point of cause - root cause analysis and 5-Why investigation 7 Pareto analysis of the result of any action taken 8 and standardised confirmation - to confirm that everything is OK and the approach standardised. “Generally this approach works for the majority of our problems if you follow the

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Holfeld Tool & Die Ltd I

reland is a lovely place surrounded by water. This can be a good thing or a bad thing. Back in 1982, it was a bad thing for Irish label converters and special diecutting companies. Rotary tooling, which at this stage was pre-flexible plate, had to be imported from England, Germany, Denmark or The United States. With this in mind, Holfeld Tool & Die was founded in Dublin to manufacture rotary dies on state of the art CNC equipment. Holfeld Tool & Die has seen it all during this journey: the dawn of CNC, the advent of CAD/CAM and has perfected its products as a result of these 26 years of success, investment and growth. We are a company used to change;

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we use it to our advantage. As a result our company has a culture of being fast paced, agile, and lean, but yet 100% focused on quality and delivery to the customer. As market demands changed so too did Holfeld Tool & Die and the manufacture of flexible plates commenced in Milton Keynes, England. The company now produces the full range of products for die cutting, including solid dies, magnetic cylinders, flexible dies, print cylinders, exchangeable bladed dies, EDP moveable ring tools, hot foil dies, anvil rollers, gears and other accessories. With production sites in both Ireland and England, our markets are on our doorstep, with exports throughout Europe.

Holfeld Tool & Die continues to do what it does best and that is to be at the forefront of development and innovation. The companyâ&#x20AC;&#x2122;s aim is to exceed the expectations of our loyal customers by providing professional advice, excellent service and quality, not to mention reliable delivery of its products.

Published in association with: Holfeld tool & die ltd Tel: 01283 845558 Fax: 01283 569909 Email: uksales@htd.eu.com Web: www.htd.ie

Medical devices Advanced Medical Solutions

change process specifically in terms of mentoring and developing our existing teams. Interim Performance Management (IPM) helps support and maintain the focus.â&#x20AC;?

structured dressing material to suit the individual user needs which is then packaged, labelling and sterilised. During the spinning process, the fibres are produced with materials mostly supplied locally with sodium alginate sourced from Scotland.

Plant operations The AMS plant produces advanced wound dressings which have to meet stringent national and international regulatory approvals (US FDA, European Medical Device directive and others). Though the basic technology is based on textile processing, significant extra process controls are required, and all the processes are carried out in strict clean room conditions. The new equipment is designed to provide significant improvements in capacity and efficiency to handle a growing range of products. The first stage of manufacture of alginate products is fibre spinning. The spun product is then undergoes consolidation of the fibres into a

Safety, quality, delivery, cost, people and environmental improvements have to be driven every hour of every day General manager, Steve Platt The sodium alginate is mixed with water and other additives, extruded and converted to insoluble calcium alginate prior to de-watering with acetone and drying. The spinning equipment features a new acetone recovery plant which significantly improves recovery and saves significantly on running costs. For the time being, the old plant at Road 3 is still running on a 24/7 basis. When the new plant comes on stream in this month, it will be able to run the same throughput on a one or two-shift basis, allowing for growth in the future as new products are introduced.

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Fibre consolidation is carried out on a carding line that currently runs 24 hours a day, five days a week. “We are keeping the old equipment, but the new line has been upgraded to operate one or two shifts per day, depending on capacity throughput. The carding equipment takes the fibre and runs it through a number of processes, designed to open and express the fibre properties whilst consolidating to form a nonwoven textile material that is designed to meet the specific attributes to meet the customer needs. The packaging system is highly automated. However, a lot of labour is required to manage quality. “We utilise X-ray in-process inspection equipment as part of our quality assurance programme but also use a combination of machine and a human element for completeness of the quality inspection processes.” The product is terminally sterilised, tested and approved prior to release to customers for use. AMS also provides a number of different wound dressing technologies, including Foam/Foam Island, film, hydrocolloid, and hydrogel plus

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membrane. As part of the company’s commitment to expansion, new high speed, multi stage multi-component converting equipment is due to be installed in 2011. AMS has also improved its warehouse facilities featuring very narrow aisle trucks to condense the storage system. “We are currently in the process of developing an internal delivery system which will support further efficiencies and stock control,” says Platt. AMS has proved to be relatively recession-proof. Demand for advanced medical dressings continues to rise and the company anticipates significant growth. “We are constantly looking at how to structure the business for greater efficiency and growth. AMS has grown very quickly from a small research-based seed. This has brought a number of issues and regular change. Consequently, we have made the business very transparent, which enables us to react in a very timely manner in order to deliver our full promise to the customer,” says Platt. As a lean champion, Platt still sees a lot of opportunity to reduce the seven wastes which are currently evident in the company (i.e. waiting, over-production, rework, motion, processing, inventory and conveyance). “All these elements of waste are actively being driven out. Lean promises continuous improvement, but considering the KPIs, quality comes before efficiency as a key constraint, as it’s no good delivering rubbish fast.” In terms of supply chain optimisation, discussions have begun on a supplier development programme, along the

Medical devices Advanced Medical Solutions

lines of the Toyota Manufacturing programme. “For example, if a supplier is regularly late or has quality issues or trying to drive down prices, then it’s our intention to go and support that supplier from a lean viewpoint so we can achieve a win-win.”

Sustainability The new plant has been built to meet the latest building regulation standards, with a high level of thermal insulation to reduce the carbon footprint. Lighting is controlled by movement sensors to avoid wastage, and the heating system is fully programmable. Most of the office heating is provided by a solar wall. The south-facing end wall of the building is warmed by the sun and air is ducted through hollow sections to be heated. Part of the lean programme also addresses environmental sustainability. As mentioned, the acetone recovery system has been designed to capture and recover vapour and hydrated acetone streams arising from the spinning process for recycling within the process. The printing line’s electrically heated drying system has also been replaced with a more efficient gas burner system.

Three minute management Platt is an advocate of ‘Three Minute Management” which means that

anybody in the business, from a cleaner to the CEO can walk around the business and look at anything from the team-board to the management centre, and know the status of the business within a few minutes, without asking anybody - from costs of consumable items and scrap value to monthly performance on sales and quality. “Consequently, we’ve seen a lot of improvement in key areas, such as quality and output,” he says. Platt suggests that the key driver for lean thinking in a sophisticated manufacturing operation like AMS is the use of the process confirmation tool. “We have checks for each process and parameter, so that everybody from the CEO to a team leader can monitor KPIs. The team leader monitors quality on a daily basis, then there is a group-wide escalation process to maintain the standard, with sign-off. “This is a robust, visual system which ensures that change is sustained and does not drift with time.”

The future Looking to the future, AMS believes there is plenty of growth to be had. “We are well established throughout Europe and are moving much more aggressively in the US. We also have plans for expanding the foam business and are always developing new and innovative products, with a heavy focus on R&D to deliver new and innovative wound healing products,” says Platt. “The change process is challenging. The key issue is to ensure you can move at a speed where people are comfortable to move along with the business. But people have to be committed to change and actively accept the need to change.” The move into a new light, clean and advanced plant makes the process of encouraging a climate of change and continuous improvement even more accessible. Lean thinking is being shown to improve the processes, costs and quality of life for all parties involved.

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Automotive Lander Automotive

Product lines benefit from focused investment specific to customer requirements.

and

Ready robust

Mark Young hears how automotive supplier Lander Automotive refocused on its core competencies, flexibility and a sound financial footing in order to flourish despite the impact of the recession.

Founded

in the late 19th century, Lander Automotive is one of the best established names in the Midlands business directory, partly owing to the fact that until 1991 the firm had highly visible premises right in the very centre of Birmingham. Now operating out of a 100,000 square foot factory just outside of the city, Lander and its 280 employees make fabricated structures and tubular assemblies. Its core products are car seating and dashboard instrument structures and tubes for heating, cooling, and air conditioning systems. It supplies to both original equipment manufacturers and their tier one suppliers and you’ll find its parts on Nissan, Toyota, Ford, Jaguar, Land Rover, Volkswagen and Vauxhall vehicles. The company has two key objectives. Firstly, it aims to increase its turnover from its current level of £28m to £45m by 2014. Because of the way the automotive industry

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How robots could help sustain the UK’s manufacturing growth With ABB recently revealed as the UK’s leading provider of industrial robots, The Manufacturer joins Nigel Platt, Sales & Marketing Manager for ABB Limited’s UK robotics business as he reveals how robots could provide the all-important competitive advantage for a more balanced economy.

s a supplier of automation equipment for manufacturing processes, I am delighted to see the recent upturn in the UK manufacturing sector. The latest set of figures from the UK’s Office of National Statistics (ONS)* shows an overall 4.9% increase in the sector’s output to July 2010 compared with the same period last year, representing one of its strongest performances since 1994. The challenge now is to make sure that this growth continues to be sustained and built on. Modern robotic technology offers significant growth potential and can play a major role in the production challenges being faced by manufacturers across the UK industry. Over the past 20 years, industrial robot capabilities have evolved greatly. Performance, especially in the areas of speed, precision, repeatability and reliability, has now vastly improved. Robots are also much simpler to operate, making them very suitable for universal application. In fact, robotic automation is already being increasingly deployed throughout various industries, such as metal fabrication, automotive, pharmaceutical and FMCG, where the range of

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applications suitable for automation is diverse. For example, one company already reaping the benefits of improved precision and repeatability is Birminghambased Lander Automotive Ltd, a leading supplier of welded tubular structures for the automotive industry. Forming the core of a lean, flexible and automated production line some 25 metres long at Lander, are several ABB robotic cells. The six-axis robots perform key welding operations in the construction of metal front seat backs for eventual installation in cars built for a major Japanese manufacturer. The robots are tasked with MIG (metal inert gas) and spot welding operations at key stages of the production process to assemble the parts of the car seat. The ABB robots accurately weld the side towers, recliners, head rests, frame and levers into place to complete the overall metal structure of the seat. This investment has enabled the company to establish consistently high levels of quality whilst improving precision and repeatability thus significantly reducing material waste. In reality, the key to success for almost any manufacturer

depends on the universal factors of doing things better, quicker and for less cost in order to outperform the competition. With UK companies exposed to high costs for raw materials and energy in particular, it’s vitally important to get products right first time. Automating a process with robots has been widely proven to present a great way to achieve all of these objectives. Whether it’s reducing breakages in a food packaging line or cutting and finishing metal products, robots can deliver precise and consistent performances at a much higher speed, enabling companies to increase yield and reduce overall production times whilst typically enhancing product quality.

*Index of Production, Office for National Statistics, September 2010. Figure quoted for manufacturing output.

For more information please contact: ABB Robotics Tel: 01908 350 300 Email: robotics@gb.abb.com Web: www.abb.co.uk

Automotive Lander Automotive

works, with programmes running on four year cycles, almost all of that target figure will be made up of either new or replacement contracts. Either way, the business must be won. Lander is well on target though, having secured an extra £9m already in 2010. The second objective is to cut costs by 10% over the next two years. Here too the company has already made impressive inroads towards achieving its goal. Its reduction in energy costs, for example, is impressive to say the least. Two years ago, on a turnover of £25m, it was around a half million pounds per year. Today, with the turnover at £28m, it’s less than half that at £215,000. It achieved these savings with the help of consultancy firm E2 Services. E2 first surveyed Lander’s site in early 2009 and quickly identified major savings that could be made. For example, replacing the fixed speed compressed air system with a variable

one and reducing the pressure to only what was necessary saved £25,000 per year. Similarly, transforming the voltage down on the lighting system, replacing bulbs with more efficient ones and installing day light sensors saved helped toward annual savings of £23,000. Local extraction systems were installed on each cell, replacing the central one and saving £26,000 per year; a new control system on the heating will bring the total gas usage down by 15% in the winter months; and servicing the furnace and recalibrating it to make it run more consistently made savings to the tune of £7,000. This programme is demonstrative of a holistic organisation-wide culture change within Lander to put the company on a firm financial footing. Commercial director Steve Bailey explains: “We found ourselves in a position in 2006 where our financial team wasn’t as supportive as they needed to be. We were unsure as to how robust our management accounts were and delays in their preparation only added to the concern. There were changes in personnel and we also engaged with an external organisation, experts in the area of finance, to resolve this issue. As well as greatly improved reporting, the firm took a commitment to paying for and ensuring it got paid for supplies on-time, ensuring it had a good relationship with,

Key processes completed inside flow line.

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Automotive Lander Automotive

Overview of Lander’s modern production facility.

and plenty of lending facilities from, its bankers. A blitz on outstanding customer queries has not only reduced debtors but has also improved customer relationships. And a new ERP system, aimed at making Lander’s administrative systems as ‘lean’ as its manufacturing processes, should also improve supplier relationships. Its efforts have not been in vain. Credit checker Dunn and Bradstreet recently placed Lander in the top 15% of low risk, financially sound companies in the UK, across any industry and sector. “It’s a great message to our customer base who might have suffered with suppliers failing during the economic crisis,” says Steve.

This was the start of a change in strategy for Lander and a new culture based on the pursuit of flexible, lean manufacturing, driven by managing director Roger Whitehouse. Initiatives to this effect involved putting together flexible manpower lines, introducing standardised work within the cells, switching to a ‘pull’ system with a 20 minute bus route delivering line side and encouraging process ownership and people empowerment throughout the factory. “A key measure of the ‘lean’ progress we have made is the use of our factory space,” says Roger. “Two years ago, when turnover was £25m, the factory was full. In four years we’ll do £45m in the same factory with room to spare. If you look at value to the business – pounds per square metre per year – it is phenomenal now compared to what it was.” As time went on and more initiatives were implemented, the business was completely transformed. And looking back at the company’s first ever value stream maps – on air bag canisters – proves it. Roger remembers the figures very well because the numbers were so striking. The lead

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Barclays Corporate W Lander & Sons was formed by William Lander in 1877 as a wire goods manufacturer producing goods such as bill hooks, bread trays and toast racks. In the 1950’s the company started to supply the growing UK automotive industry – something it stills does, 60 years on.

he business was later renamed Lander Automotive Ltd and relocated to new, purpose built premises in Quinton, Birmingham and has continued to grow rapidly from this time. The company is still managed today by descendants of the original founder as well as a professional management team brought in for specific business skills and acumen. In 1987, the business moved its banking facilities to Barclays Corporate and since that time, like the business, the relationship has grown. In 2006, Barclays Corporate supported Lander Automotive with the acquisition of a competitor business which gave access to new equipment and a wider customer base. In 2009, Barclays Corporate assisted the business with a large scale adoption of foreign currency contracts from a financial

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services supplier hit by credit crunch issues enabling the business to steer a steady course through the automotive sector downturn. Earlier this year, Barclays Corporate offered further support to the company by increasing working capital credit lines to fund growing levels of work; this has enabled the business to take advantage of its strong capital position to win further market share. Commenting on the relationship with Barclays Corporate, Roger Whitehouse, Lander Automotive’s Managing Director said: “Over recent years Barclays has fully supported our strategic growth plans. The automotive sector knowledge of Nigel Bailey, our Relationship Director, and his team has been of great value and we look forward to further assistance

from them as we continue to grow.” Lander Automotive Ltd has a clear direction for its future growth, is soundly capitalised and boasts a growing order book in 2011 and beyond. This growth will open up even greater opportunities in the future.

Automotive Lander Automotive

Lander’s products have moved from simply meeting the industry standard to setting the standard

time of the product was 25 days but the added value processing time was only 156 seconds. The rest of the time was product just stagnating – waiting in queues to be processed in batches. Now the typical lead time in the factory is less than a day.

Quality is king Efficiencies and cost savings are one thing, but what Lander is ultimately looking for in parallel to its lean initiatives is an unwavering commitment to quality and this has seen its quality move from industry standard to the very front end of excellence in five years. “Quality is still king,” says Steve. “In this industry if you have a poor track

record with quality it will hang like a lead weight around your neck. We don’t have that, and we won’t put ourselves in a position where we’ll negotiate on quality.” Lander is one of the few plants to put aluminium brazing inside a flow line; the norm is to keep it separate as an island of excellence outside of the line. It has done so in the name of quality. “We felt it was important to put the critical process right in the middle of the set up,” says Roger. “This means we can account for the quality better – when it is within a single piece flow, one single defect becomes an issue. When it’s an island, out of the way, a single defect isn’t disruptive downstream. Effectively you buffer between the island and the line with processed stock. Defects aren’t allowed the way we do it and you’re reaction time to a problem is much faster. If you haven’t been able to ‘fool proof’ a process your reaction time to a problem has to be instant.” Testament to its success, the company has now been supplying to Toyota in France for 18 months without one

High strength structural products form part of the Lander portfolio, such as this Range Rover Instrument Panel Support Beam.

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E2 Energy Management E2 – Delivering exceptional energy & environmental savings

specialise in implementing energy cost reduction programs for both commercial & industrial organisations. Our team of engineers have operated within this market for over a decade and offer a wealth of experience in implementing practical energy management solutions. We are independent and therefore not tied to any particular product or service, ensuring only the most effective technical projects and improvement measures are progressed. By identifying & implementing cost effective energy management

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solutions, E2 aims to minimise our client’s energy costs and consumption levels. Whether this is for a single project or nationwide roll-out, our project teams have the necessary knowledge and experience to ensure specified targets are delivered & expectations exceeded. We have an established track record of providing a full range of services to both an industrial & commercial client base. With over 1,000 completed projects since inception, we are uniquely positioned to assist organisations both assess their sites, recommend

solutions to energy management issues and partner throughout the implementation process. Experienced across multiple sectors and client size (energy budgets between £200k - £50m), we are a 360° service provider, providing you with one point of contact for all your energy needs. Published in association with: E2 ENERGY MANAGEMENT Tel: 01905 734666 Email: info@e2-services.co.uk Web: www.e2-services.co.uk

Automotive Lander Automotive

Safety Critical products are chosen by many high profile customers.

single defect. “That’s truly world class,” says Roger. And it is to the quality that his commercial director points when asked why more and more companies from the likes of Turkey, Bulgaria and other supposedly lower cost countries are sourcing goods from Lander instead of utilising local cost efficiencies. Flexibility was deemed undesirable in one area of the business though. If you go back a few years, the company supplied services to all manner of different industries, including Leisure and DIY. Now, Lander only serves automotive. And within that, the company has narrowed its focus too. It used to supply many other product types like – latches, seat adjuster systems and head rests. When one of Lander’s customers was interested in and completed the purchase of its latch and adjuster system business, this then spurred the company on to narrow its focus onto its core capabilities – fabricated structures and tubular assemblies.

Recession defying Without the flexible measures, Lander could well have met a similar fate to many of its peers two years ago. “When the world came crashing down we hit the same brick wall as everybody else,” says Steve, though he’d be forgiven for venturing that, given its industry the recession packed that little bit extra punch for Lander. Ultimately though, the business never did worse than break even. Something that helped Lander to survive and to recover quickly when the recession began to subside was not panicking when it came to its workforce. Lander didn’t want to lose its permanent employees and all of the skills they held and the employees didn’t want to leave, given jobs at that time were few and far between. But costs had to be cut. Instead of laying off employees, Lander agreed a deal with its engineers and technicians that they would, in effect, take a temporary demotion and have their salaries adjusted accordingly. Then, when the new work requiring extra talent began to flow back in, positions and pay packets would be restored. Around 30 employees were affected. The cost reduction was a success and all those involved returned shortly after to their original roles and salaries.

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Pure Staff Ltd P

ure Staff pride themselves on delivering a close personal service with a high focus on quality, how do we deliver this you may ask? Pure Staff has two highly experienced directors who are very hands on with a high percentage of their time spent interviewing candidates and servicing clients. Also there are no trainees so every client has a dedicated fully experienced consultant available 24 hours a day. Lander Automotive being a classic example of what Pure Staff does, we didnâ&#x20AC;&#x2122;t walk in asking for all their business merely an opportunity to show how we could improve on the quality of service they were

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receiving whilst offering a more cost effective solution. Pure Staff was awarded the opportunity to supply 10 temps initially alongside 110 from a supplier they had used for over 4 years and through stringent selection processes and gaining a greater understanding of our clientâ&#x20AC;&#x2122;s needs and what works for Landers, Pure Staff grew to have 50 % of their business. Only at this point did Pure Staff sit down and agree a sole supply agreement with a further cost saving whilst introducing further total quality management. We hold two weekly KPI meetings with Landers to assist with their strategy for constant improvement.

The Partnership between Landers and Pure Staff has been beneficial for both parties with both organisations showing substantial growth in the last 12 months and we are keen to replicate this with many more organisations.

Published in association with: Pure Staff LTD Tel: 0121 285 0459 Email: info@purestaff.co.uk Web: www.purestaff.co.uk

Automotive Lander Automotive

New production cell for seat structures

Operating with the same values and focus that had been borne out of the culture change prior to the downturn, the business returned to profit in 2009. Now, in 2010, profits are expected to be higher than pre recession levels and almost back to Industry norm. “The downturn hasn’t stopped us doing the things that we’ve believed are right to sustainably grow our business,” says Steve. “We’ve invested over the latest three years in new technology to support our core lines and we’ve also invested in our workforce. If a customer has a chunk of business and they want to move and move quickly, you have to have the right people who can grab it and run with it and get it done properly in a very short period of time. We took the view that we needed to keep highly qualified, highly skilled programme managers on board, who could function in other areas of the business, until such time as we won new contracts. Recruiting the right person takes at least three months and, by that time it’s too late. The decisions – things like – what tooling we need, what process equipment is required and where to source it – need to be made right at the beginning of a new contract.” Overall, Roger is confident that Lander is pitched perfectly to grow its market share both home and abroad. “We have harnessed the intellectual capability of everyone within this business and combined that with a clear set of goals and cutting edge tools and techniques to give a world class performance.” The eagle, it seems, has well and truly Landered.

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Get by with a little help

from your friends

Complete visibility of customers stock levels allows BCM to offer the highest levels of efficiency and service

Mark Young hears how a commitment to comprehensively aligning its business with that of its customers is proving a successful strategy for BCM.

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With

a 1,200 strong workforce at its Nottingham factory, BCM makes health and beauty products. Although over half of its products are purchased by sister company Boots UK, BCM also supplies to some of the worldâ&#x20AC;&#x2122;s biggest pharmaceutical and healthcare brands. Until last year, BCM was the manufacturing arm of the retail chain.

Heath and beauty BCM

Germany which make colour cosmetics, employ around 300 people each and have a combined output of around 120 million units per year. There is also an associate assembly plant in Poland. BCM makes a huge range of products – over 5,000 different ones in all – across healthcare, skincare, personal hygiene, cosmetics, dental care, baby and toddler, fragrances and sun cream. The flag bearers among these include Boots’ own brand cosmetics and skincare line, No7; its own brand sun care range, Soltan; and a huge range of products which it makes for famous designer labels including Ted Baker and FCUK. The company operates 52 manufacturing vessels, where it mixes up formulas for its products in batch sizes between one and nine tonnes. It has 40 packing lines which support a vast array of packaging types, including tubes, jars, bottles, cartons and pumps. The company has its own dedicated team of packaging developers too, working primarily with fine fragrance products.

Our growth is completely in alignment with our key customers and we pride ourselves on not only being able to deliver on a day to day basis in line with their expectations but also embodying their future project work as they begin to expand themselves Phil Lund

Stars are aligned

Now it is a completely standalone business within Alliance Boots. Boots opened its historic D10 ‘wets’ factory on its Nottingham site in 1933, and quickly set about building an output level of 800,000 units per month. Almost three quarters of a century down the line, that output has increased to around 26 million per month. The company has further sites in France and

Since The Manufacturer last spoke to BCM, the business has implemented a number of measures to reinforce its commitment to quality, cost and service. These are overseen by general manager Phil Lund. Having previously held the role of operations director, he is now responsible for all business activity in the UK, including commercial. Previously, he spent a number of years working in the automotive industry and this has placed him in good stead to drive the efficiency programmes at BCM – bringing many of the lean initiatives usually confined to car makers into the fast moving consumer goods environment. One of the biggest initiatives which BCM has implemented is a new IT system which allows it complete visibility over its customer’s stock levels and forecasts, allowing the company to initiate an automated replenishment service which is known as Vendor Managed Inventory. “We look into their portal or warehouse and we keep them in stock within a minimum and maximum stock level,” explains Lund. “It allows us to respond to our customer’s fluctuations in demand and takes away any chance of major unexpected fluctuations in demand coming in to us. This means we can flat-line our production and improve our efficiency. For our customers, it means that we can manage their stock volumes for them so that they can concentrate on their core business, making sure forecasts are accurate and that they understand the dynamics of the markets.”

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Brettex Engineering Ltd S

pecialists in Stainless Steel Fabrications, Brettex Engineeringâ&#x20AC;&#x2122;s craftsmen provide high quality fabrications to the pharmaceutical, food, brewing and bio technology industries. Located in the heart of the UK situated next to the motorway we can offer industries throughout the UK a flexible reliable contracting approach to your ever changing manufacturing requirements. With over 30 years experience in Process pipework installations and product handling we have vast knowledge and experience of your day to day challenges that engineers face in these ever changing markets. We

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have worked closely with BCM and other leading name brands in working with them to improve plant and production line productivity and energy saving targets. Our portfolio of work includes: Pressure and Storage Vessels, Process Pipework installations, Skid Mounted Package Units, Water Filtration Units & Hoppers Speciality Machinery and Conveyor handling systems. At Brettex our Design and Management team will typically encompass Process Design and Development, Project coordination and Cost Saving Analysis along with keeping up to date with all the latest health and safety requirements. We have constant investment programme ensuring all of our engineers are trained in the various safety card schemes that suit the trade and industry that we are working in.

We can offer a comprehensive documentation and commissioning package including IQ/OQ documents, material certificates, CE conformity declaration and O&M manuals. IQ/OQ validation can be offered with one of our project engineers to assist with validation procedures. With the above skills, experience and flexibility Brettex Engineering can offer a competitive engineering service to assist in effectively carrying out your engineering roles.

Published in association with: BRETTEX ENGINEERING Tel: 01332 573555 Email: sales@brettex.com Web: www.brettex.com

Heath and beauty BCM

By having a better insight into what its main customers are going to need, BCM can schedule its production better to take advantage of economies of scale – producing for multiple customers’ markets from one batch for instance – and it can then benefit from less changeovers, lower inventory levels and plan its own supply of raw materials more effectively too. “It gives us far greater control and we can plan better than if we were relying on fluctuating demand signals,” he adds. The IT system provided by Orchestrate was brought into service in three years ago, and the facility

BCM has introduced an employee recognition system which rewards its people on a monthly basis

is now offered to all of BCM’s customers. In fact, this initiative can be viewed as emblematic the very thing that Lund says gives BCM the edge over its rivals. “Our growth is completely in alignment with our key customers and we pride ourselves on not only being able to deliver on a day to day basis in line with their expectations but also embodying their future project work as they begin to expand themselves,” he says. “We have a great focus on innovation throughout our supply chain and the customers really value that – almost as a niche offering.” Its service levels are testament to the success of this approach. “We align our value chains in the business completely with our supply chain. It’s exactly what the car industry did two decades ago, align the supply base with manufacturing to take waste out and working capital and inventory out.”

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Manuplastics manufacture premium standard/custom ranges of plastic Jars for all industries Manuplastics – manufactures 15ml to 500ml standard/custom plastic Jars Manuplastics – provides rapid and flexible product development services Manuplastics – offers reliable partnerships through unrivalled packaging experience

anuplastics has led European plastic product innovation for over 75 years and specialises in the design and manufacture of high quality injection moulded standard/custom Jars, primarily for the toiletries, food and pharmaceutical industries. Our modern, new, automated production facility is located in South Wimbledon and produces over 5 million components a week supporting many top global brands and has established an unrivalled reputation for reliability and proactive personal service. The company has continually reinvested in new plant equipment, tooling and R&D activities. Consequently, Manuplastics offers the finest cost effective Jar solutions in the market place today.

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Single walled screw lid containers are just one of the primary business streams, Manuplastics also manufacture over 80 million food pots and assembles over 8 million dispensing units per annum. We are continuously developing new product ranges for existing and new global brands through innovation, technology and creative thinking. We offer our clients both a well established single wall “Standard” product range or bespoke custom moulding and assembly services. Manuplastics have been a key partner to Boots Contract Manufacturing for over 30 years offering innovative product development and supply of packaging products. In the early 1980’s Manuplastics designed and developed the first single dosing tablet dispenser which later

became the highly successful global brand known as Sweetex. Manuplastics manufacture and assembled all Sweetex units for worldwide distribution. More recently, top brands within the Boots range such as FCUK, Soap & Glory, Trevor Sorbie, Extracts, Mediterranean, and Champneys have all successfully utilised Manuplastics standard range jars.

Published in association with: MANUPLASTICS ltd

Stephen Haley Manuplastics Ltd, 13-15 Lombard Road. South Wimbledon, London, SW19 3TZ

Tel: 020 8542 3421 Fax: 020 8540 0594

Heath and beauty BCM

The company has invested in new technology on the production lines which puts the responsibility for efficiency in the hands of the staff

The new IT system has undoubtedly contributed heavily to an improvement in Overall Equipment Effectiveness around the plant. Three years ago, OEE was 45%, now its up to the mid sixties. BCM will continue to invest in its infrastructure to drive productivity and offer great cost benefit to its customers.

Time is of the essence BCM prides itself on its speed to market as one of its key services, and a key point of differentiation between itself and its competitors. Most of its briefs come with predefined product concepts and packaging requirements, though, and where this is the case the company can turn the job around in as little as four weeks. “This is hugely beneficial to both us and our customers,” says Lund. “We can convert raw materials very quickly and the quicker you can get them through the facility and get the product packed, right first time, the less cost you incur. It means we don’t have cash tied up in work-in-progress. It also means

that our customers can react to trends very quickly. It also means customers can come to us when they’ve been let down by another company and still get their order supplied on time. We are very adept at stepping in and getting them supplied at very short notice.” Essential to this way of working is an engaged workforce that shares the vision of the company, knows what is expected of it and can respond quickly when the goalposts are moved. BCM ensures through complete transparency, communication and employee empowerment. “We have dedicated communication channels including quarterly briefings for all of our people and we’ve just introduced our own intranet,” says Lund. “We have a staff council and committee in place and we see regular faceto-face meetings between every operative with their line managers as vital part of our first line communication. Cross functional working groups are used to consult on anything from what’s on the menu in the canteen to major efficiency programmes on the lines. We see being completely transparent with our employees as a key way of engaging our force in our shared ambition.” The company has also invested in new technology on its production lines which puts the responsibility for efficiency in the hands of the people that actually make the products. It’s a system which shows in real time how efficiently the line is running, when and for how long any downtime has been, what shortages there has been, and what compliance

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Local production managers serve as a link between management and the line

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measures need to be adhered to. “It’s very visual; there’s computer screens on the line and it drives real time improvement by putting the responsibility and the awareness with the operator,” says Lund. “It also helps us react much quicker. It gives us the ability to see how each line has performed, what some of the issues are and implement immediate corrective actions where needed.” The management of the production facility is organised by value stream and value stream leaders look after a shift of anywhere up to 200 people. Local production managers oversee the day-to-day running of the line and the mixing vessels and serve as a link between management and the line, communication the continuous improvement initiatives up as well as managing their teams on the line. The company has introduced an employee recognition system called BCM Stars through which it rewards its people on a monthly basis when they go above and beyond their role. The annual employee bonus scheme is based on a range of quality, cost, safety and service targets. This commitment to open communication isn’t confined to suppliers and employees either. BCM has recently initiated a programme to create a network of suppliers of major equipment so that it can consult them what the latest additions to the market are and how they can become even more efficient. “We are absolutely resolute in the concept of getting product through our facility right first time and being competitive on price and we’ll always search out ways to stay ahead of the game,” says Lund. “Given the value

Heath and beauty BCM

of our products to our customers, it’s massively important that we keep these values front of mind.”

The right environment Lowering its environmental impact has also been a key consideration for BCM over the last few years and chief among its achievements is the fact that it now sends less than 1% of its waste to landfill. Two years ago this was 37% – enough to fill eight Olympic sized swimming pools. Its primary charity is East Midlands’ children’s hospice, Rainbows, to which it donates both cash raised by charitable events and product which it manufactures. BCM also holds fund raising activities. In all, £300,000 worth of stock was sent to different charities and good causes last year, and BCM employees clocked up over 600 hours of volunteering including manning phones for the BBC Children in Need appeal and participating in reading programmes at local schools. The business reduced its carbon dioxide emissions by 9.5% in 2009/10,

in real terms, taking into account its growth. Initiatives to this end included the introduction of ‘X Block’ technology which recycles compressed air, and using ultrasonic equipment to find leaks in pipes, installing thermal imaging equipment to identify and reduce thermal and water waste. Collectively, these three initiatives saved over 1,500 tonnes of CO2. Water waste from cleaning tasks has been reduced by 20%, an achievement Lund says is extra meritorious given the prescriptive conditions imposed by the Medicines and Healthcare products Regulatory Agency (MHRA) in this area. Safety of its employees is paramount. “People don’t come to work to get injured,” he says. “The safety and wellbeing of our people is crucial and everyone has a part to play in ensuring the workplace is safe, as such one of the key performance indicators for our annual bonus is ‘Safety’. The company’s attitude toward rewarding its workers along with the success of the initiatives to make the business more efficient are no doubt enough to make BCM’s employees content in their vocational endeavours. However, it is the culture of care in BCM which is most rewarding. The benefit to BCM of being closely linked to a health & beauty retailer that has the presence and magnitude of Boots, Lund says, is that the organisations can share in their growth strategies and commitment to exacting standards of quality. The benefit to Lund on a personal level is that he, because of that unwavering commitment to quality, is proud to say that BCM is instrumental in making products that help people feel better about themselves and which can be found on almost every major high street and local community across the UK.

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Daleba Electronics Ltd D

aleba continues to be at the forefront of PCB manufacture and is a leading global supplier of circuit boards from its manufacturing facilities in the UK and in the Far East. Dalebaâ&#x20AC;&#x2122;s experienced staff are employed in our Hertford UK headquarters, as well as our facilities in Hong Kong and China. In the 1990â&#x20AC;&#x2122;s Daleba was one of the first to recognise the importance of PCB supply from the Far East, and made its first imports in 1995. Fifteen years on we now have our own facilities and staff both in Hong Kong and also close to our manufacturing partners in mainland China. Effective sourcing of PCBs from the Far East requires commitment, time

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and experience. Matching the technical and commercial requirements of our customers to the capabilities of the manufacturing plants is vital if supply is to match or exceed expectation. Founded in 1963, Daleba has built its success on its expertise and longstanding experience in the Far East, coupled with 47 years of PCB design, engineering and manufacturing experience. Daleba is part of the TCL Group of Companies which also includes GSPK Circuits, Kelan Circuits and DK Thermal Solutions, all well established UK PCB manufacturers. This group strength allows us to pool expertise and resource, providing support

across the entire spectrum of the PCB supply chain from engineering and design support, through to prototypes, production, quality, logistics and inventory management. Please visit our website www. daleba.co.uk for further details on the services we can offer.

Published in association with: Daleba Electronics Limited Tel: 01992 510000 Email: sales@daleba.co.uk Web: www.daleba.co.uk

Heating controls Danfoss Randall

The right

temperature

Assembly areas

Edward Machin meets electronic room heating controls manufacturer, Danfoss Randall, to discover a company anything but feeling the heat of a recessionary climate.

The

economic downturn, a grim reaper for so many manufacturers, is not without its good news stories. Danfoss Randall, a Bedford-based supplier of domestic and commercial heating controls, is one such tale, having effected a number of positive, company-wide, changes during the last eighteen months — becoming leaner, more efficient and productive in the process. “There was a recognition that the company needed to change, and perhaps if it didn’t happen we wouldn’t even be here today,” says Paul Lynch, Danfoss’ production director. “Was it a learning curve at the outset? Absolutely, and we continue to discover new things about the business every day, from the boardroom on down. However, it was, and remains, vitally important that people were kept involved in the changes that were being made.” By keeping communication channels clear and open, staff were privy to the logic behind management proposals; the fact that they demonstrated it was for the benefit of the business ensured the vast majority of the company’s population soon got on board.

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Danfoss Randall HQ

Very simply, the manufacturing team highlighted what the company can, and should, outsource — that which it doesn’t get any value from. In turn, Danfoss thereafter focused on those core capabilities of design, manufacture,

That we can deliver product within hours or days, and whatever quantity or range our customers require, means that we’re not wanting for business Paul Lynch, Danfoss Randall testing and shipment of controls which have built its parent organisation, The Danfoss Group, a reputation as an industry leader in all that it does. “The ability to hold products in a part-built state and then commit to finished products at ATE (automatic test equipment) stage gives us the agility to deliver true customer satisfaction,” says Lynch. What’s more, “The fact that eighty per cent of our products made in Bedford are sold in the UK we see as a major advantage when you’re talking about response times, logistics, stock value and so on.”

Taking the biscuit… As with many in UK manufacturing, regardless of sector, Danfoss took necessary action in 2009 to ensure productivity in all areas was maximised and overhead costs minimised. Identifying and implementing

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improvements was now inherent in the team’s skills and competencies, realising an overall performance improvement in productivity (units/EFT/Hr) of 26%, with some areas delivering 42%. There was, however, still an issue of the company being out of kilter with customer requirements, needing to align these seasonal demands more closely with the available resources. The proposal of annualised hours was presented to the staff, and after a three month consultation period it became clear that there was no better way to provide the required service levels to its customers; Danfoss implemented the new working arrangements in January of this year. Simply put, the staff work more hours in the winter high season and less in the low season summer months, while wages remain constant throughout the year. Pleasingly, says Lynch, “Our businesses’ performance — in terms of agility, response times, availability, service levels and, crucially, the bottom line — has vastly improved through 2010, and without the understanding and cooperation of all the staff at Bedford, we would not have succeeded.” Having recently won a contract to manufacture an electronic controller for The Danfoss Group, “We focused on keeping the product costs as low as possible by working in close collaboration with the R&D team to minimise the labour content wherever possible, and in doing so the company has invested a considerable amount in both design and test equipment,” he adds. Instead of operating with a single PCB assembly, for instance, they now do so in a panel of six. Lynch takes up the story: “Our guys pass a ‘biscuit’ through the production process, only breaking them out once fully assembled — thus reducing the labour content by six each time. With fully-functional test equipment at the beginning and end of the process, we are allowing operators to have in-cycle work, so they’re not simply sitting there waiting. In line with Danfoss’ culture of continually reviewing our processes, moreover, we have a responsibility to ensure that Bedford has a clear vision and roadmap to ensure it is indeed the right place to carry out this type of manufacturing. Can we be as cost-effective as the Far East? Undoubtedly. In fact, a recently undertaken competitive assessment highlights that very fact, so when we go into production in November for the first model we can continue

Heating controls Danfoss Randall

Danfoss Randall at a glance At a glance

Established in 1991, Danfoss Randall brings to the market unsurpassed experience in the areas of traditional electromechanical controls, advanced electronic controls, radiator thermostats and other self-acting controls.

Annual company revenue

£34m

Employees

180

Contact

www.danfoss-randall.co.uk

to represent a centre of excellence for the Group.”

Group think Danfoss’ UK arm has prior, too. Exhibit one: the Danfoss Productivity Programme, introduced to Bedford in 2006 and representing, “A drive within the Group to promote both Lean and best manufacturing practices across our operations with a heavy emphasis on management involvement and a high level of visibility of KPI’s (Key Performance Indicators). We were especially proactive in taking it on, and soon became one of the best performing units for measurable productivity gains.” Aligned with the fact that the company focuses on solutions, rather than products alone, Danfoss now stands head and shoulders above its competitors, by not just remaining price-effective but supplying products that help reduce energy and CO2 levels. For instance, “Our technical support is first class in terms of providing a complete solution to customers — be it a commercial or domestic installation, and we do so at very competitive rates,” he says. “Because we understand our costs to the last fraction of a penny, we know where we can give and take, while still sustaining growth in a difficult climate and delivering to our stakeholders.” “I am especially pleased that we have come through what appears to have been the worst of the recession faster than anticipated,” continues Lynch, “evidence of the fact that we took the right decisions to keep the business both buoyant and competitive. Because Danfoss is a solutions-focused manufacturer, we are continuing to do some very good business with our major customers. They understand that we’re not simply selling a product, never to be seen again. With a current

trend for de-stocking among wholesalers, too, our response times need to be that much quicker. That we can deliver product within hours or days, and whatever quantity or range our customers require, means that we’re not wanting for business.” Earlier this year, Lynch, two engineers and the Lean manager attended the Danfoss Operational Lean Leadership Program, an intensive three week course focused on becoming ever more efficient in all that the business does. With three more colleagues set to attend in the coming months, “We are building on competencies throughout the workforce on a continuing basis,” he says. “The culture of a continuous environment of improvement is something that we are passionate about by pushing the boundaries on results and targets; that we’re doing it exceptionally well makes it all the more enjoyable.”

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Manufacturing solutions KMF (Precision Sheet Metal) Ltd is a UK manufacturing success story supplying precision sheet metal components, assemblies, integration, and design solutions to a wide variety of customers.

nvestment in people and technology is at the heart of KMF’s success and it is this drive that has led it to win business from major customers within the telecoms and other high-tech industries. Whether it be the manufacture of a single component or a ‘full-level’ build involving integration of complex electronics, KMF has the skills, versatility and capacity to deliver onschedule and within budget. Examples of its work in the telecoms sector include the manufacture of fibre patch panels, fibre management racks and fibre for the home equipment. In taking, what may be a basic sheet metal

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component and fully integrating state-ofthe-art electronics, to deliver cost-effective manufacturing solutions, KMF takes its relationships with customers several steps further by providing design, integration and logistics support for customers, such as Fujitsu. It is also heavily involved in the 21st Century Network rollout, which is being driven by BT a customer for which KMF is recognised as an approved and preferred design facility. Telecoms are just one area in which KMF excels. Others include aerospace and medical where KMF is a preferred partner for the manufacture of complex equipment

such as first and business class aircraft seats, and mass spectrometry systems. This work is supported by KMF’s internal design team that work with customers to ensure components and assemblies are designed for manufacture, and manufacturing costs are reduced.

Published in association with: KMF (Precision Sheet Metal) Limited Tel: 01782 569060 Email: sales@kmf.co.uk Web: www.kmf.co.uk

Telecommunications Fujitsu Telecommunications

The Fujitsu Telecommunications Solihull plant underwent a significant restructure in 2008 to stay competitive and relevant

Fujitsu fights back The metamorphosis of Fujitsu Telecommunications’ into the competitive, flexible company it is today has been driven by unforgiving demands on price, service and the broadening horizons of globalised industry. David Macready, operations planning and logistics manager at Fujitsu’s Solihull plant explains how the challenge has been met.

2008 Fujitsu Telecommunications’ Solihull base took a difficult but necessary decision to halt its manufacturing operations for the production of printed circuit boards and transfer them to its sister company in Richardson, Texas. “The move to Richardson had to be made because the peaks and troughs in demand from our customers were too extreme. We couldn’t smooth the supply chain and were incurring prohibitive costs.” The anxiety and disappointment caused by the loss of this business overseas will be something that many UK manufacturers can sympathise with but Macready goes on to explain how, determination and innovation have turned the misfortune on its head.

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The Solihull plant has brought on-site a number of previously off-site warehouses

Firstly, the lean expertise and knowledge of process held by the Birmingham-based staff were soon proved to be in short supply stateside. “The transfer quickly changed in

We have built testing equipment, at this site, that enables us to test the rack for faults during our build process that informs the person building the unit when a connection error occurs character from being the movement of manufacturing to their facilities, and the imposition of their ways of working, to a realisation that the changes we had made here were invaluable.

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Effectively we lifted our plant, and ways of working, and dropped it into their facility.” Over the course of six months Fujitsu Birmingham managed the transfer, including five manufacturing lines, testing and back-end assembly equipment as well as training. The processes devised in the UK will now influence many of the other operations in the Texas plant. Turning their attention back home, the Solihull team thought hard to reassess their business and uncover opportunities to maintain their value to the organisation, instead of simply accepting provisions to keep the plant open as a collation, configuration and shipping facility. “What we spotted was that there were huge elements of the business where we were losing out through subcontracting, so we brought back into this facility a couple of off-site warehouses, and also a cable and rack manufacturing, whilst building on our limited assembly functionality.” Dave Macready explains why the rack manufacturing in particular has allowed the site to leverage new value for Fujitsu. “Historically we had always done this work out at site. It used to take two engineers a couple of weeks to build, wire and test a rack in situ before the equipment there could be operational. Now we build the rack, test it and release it as a plug and play unit in about three working days, dependant upon the rack type. This means

Telecommunications Fujitsu Telecommunications

that when engineers take the unit to the site, bear in mind engineers time is at a premium, they install it onto a footprint, connect it to the customers facilities and it prevents additional work and dramatically reduces the install time for our customer.” For Fujitsu this means huge savings in time and, since the facility has also developed its own advanced testing equipment and processes, significant increases in first time quality. “Bear in mind these racks can have hundreds of connections in them, all individually hand wired and connected.” Before the Solihull plant took control of the manufacturing, engineers on a customers site would not know whether the rack had any wiring faults until they connected up the unit and would then have to carry out laborious manual tests until the fault was found. “We have built testing equipment, at this site, that enables us to test the rack for faults during our build process that informs the person building the unit when a connection error occurs. This means problems in manufacturing are corrected using true lean, poke yoke principles from the outset.”

now have a base stock that I can use for any customer closer to the point, before we ship it out the door.” This focus on agility, service and customer satisfaction is enabling Fujitsu to stay on competitive terms with its major rival Huawei Telecom. “That is just one of the contributory factors that has encouraged us to reappraise the way we manufacture, where we do it and what else we can offer as part of a portfolio of business solutions and products in order to delight our customers.”

Power to the people Pursuing this agility however, especially in line with plans to further escalate a growing global telecommunications business has meant up-skilling the existing Fujitsu workforce. In Solihull this has focused on providing NVQ lean training to both frontline workers in manufacturing as well as the office staff. “There used to be about five or six of us who used to look regularly at our processes and try to improve them. That is all well and good but we have reached a stage with our need for continuous change [in response to changing customers and markets] that requires an everyday kaizen approach.

Turning the tables These savings in time and improvements in quality mean that Fujitsu are now able to offer a prompt and reliable service to customers and in a drive to delight customers even further the Solihull plant now offers flexible supply solutions with the very products they used to manufacture. “We control the supply chain between the UK and the US ordering what to build and when. We then bring across what I call a ‘vanilla unit’ and carry out final configuration and testing. That enables us to put customer specific requirements into the units.” Cutting out the need to batch build customer unique products stage by stage brings the point of customisation far closer to the customer base and makes Fujitsu more agile in responding to their needs. “I Cutting out the need to batch build customer unique products stage by stage brings the point of customisation far closer to the customer base

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Fujitsu Telecommunications

Fujitsu Telecommunications manufacturers and installs cables and racking in over 100 countries

Fujitsu Telecommunications at a glance Annual company revenue

£130m+

Employees (Solihull site):

400+ not all on-site at any one time

Sector

Manufacture and installation of telecommunications access equipment cables and racking, delivering global solutions to over 100 Countries

We need our people performing the manufacturing and support work to be able to question whether, why and how they are carrying out that work is right for what the company and aligned to what the company is trying to achieve. If the answer is ‘no’ they need to be able to make a change and understand the consequences of carrying out any change activities throughout all our integrated processes.” Currently, thirty plus Solihull Fujitsu employees are going through this education in business improvement techniques, with the support of In-Comm business services, so that they have the scope to make continuous changes for the benefit of the organisation. With this training we have turned the traditional pyramid of authority on its head. We have seen that

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the best people to make change are the people who own the processes and our job as management is to make sure that they can do that.” Summing up Fujitsu Telecommunications’ resilience in challenging times Dave Macready says: “We seek to make ourselves unique through being flexible and adaptive, through changing with the times. We have recognised and embraced the fact that our old principles as a manufacturing site have gone. We are now a test, configuration and development site. We have broadened our focus from being UK centric to being a global player, through strategic partnerships with our main logistics providers DSV Air & Sea Ltd and Expeditors International. We believe we now understand how best to develop our people in line with our strategic needs that not only benefits the business but also the individuals too. This will enable Fujitsu to be more adaptable and better able to develop our business with our staff more flexible and able to recognise, evoke and contribute to change and develop our business to our mutual benefit and ultimately delight our customers.”

Sheet metal Precision approach KMF

to design and manufacture One of the key issues in business is how to get an edge. During dark recessionary times this is a particularly urgent issue for manufacturers. Precision sheet metal sub-contractor KMF seems to have found a formula for success.

Established

in 1971 by three former work colleagues Ken, Mick and Fred, the Staffordshire based manufacturer continues to go from strength to strength, led by current managing director Gareth Higgins and supported by original founder Mick Higgins. KMF is a privately owned company and has a turnover of just over £24m. The company has 260 permanent ‘team members’ and is the largest privately owned sheet metal manufacturer in the UK, operating from a 100,000 square foot purpose built manufacturing plant in Newcastle-under-Lyme. KMF prides itself on meeting the needs of its customers through Design For Manufacture (DFM), producing a wide variety of sheet metal products, from electronics, industrial, electrical distribution and aerospace, to retail point of sale units, control systems for rail, to medical and scientific equipment and gaming machines. Most products are supplied to the home market and about 15% are exported, including a substantial contract in the USA Originally KMF was set up as a traditional engineering firm, with a strong focus on manufacturing competency. But latterly focus has shifted towards providing customers with

a complete service solution. “Unlike traditional sheet metal manufacturers who simply take a drawing and convert it into a product, we prefer to engage with customers early in the design process utilising our two full-time design engineers to ensure that new products are optimised for quality, cost and fast delivery to market,” says Business Improvement Manager Keith Nicholl. The company offers a variety of software packages to meet diverse customer requirements, including ProEngineer, Windchill for product data management, and 2D and 3D, Radan for sheet metal design and automatic flat development. KMF invests about £1.3m annually in new technology to keep ahead of the game and to fend off overseas competition. In March, KMF held a Design Open Day which was attended by leading machine manufacturers including Trumpf, Amada UK, Salvagini and Wilson Tool. 25 customers attended the event, receiving an overview of the latest technology aimed at design engineers. “Our aim was to invite some of the designers out of their traditional comfort zones, to bring them closer to latest thinking on sheet metal manufacturing techniques. The ultimate goal was to help our customers design products at best cost to meet their requirements,” says Nicholl. The event proved so successful it was repeated in September. KMF was originally based nearby in Stoke-on-Trent, with operations spread over a number of sites, but moved just over six years ago to consolidate operations in a modern, purpose-built facility. “We consider that maintaining a competitive edge is inextricably linked to our investment strategy of employing the latest automated technology, while also being focussed on building great customer relationships and making a demonstrable investment in our people,” says Nicholl. Last year, KMF invested in a £750,000 training facility which supports skill building across the company, and an ongoing Advanced Apprenticeship

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Scheme. Currently 16 apprentices are going through the four year scheme. Recently KMF was awarded the prestigious MWP award for Best Practice in Training.

New Product Introduction KMF has taken care to optimise customer relationships in a highly competitive market where steel product manufacture is increasingly outsourced to perceived low cost manufacturing regions overseas. “We have introduced a New Product Introduction (NPI) process, staffed by a full-time New Product engineer, to ensure that when an order for a new part is received customer requirements are quickly squared off against our internal processes, as an extension to the standard contract review process.” The plant features seven of the latest Trumpf CNC cutting machines, including a combined laser and punch machine. A selection of manual press brakes from Trumpf and Amada are used for sheet folding, in combination with two Amada Astro robot folding cells and

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two Salvagini P4 panel benders, handling up to 3m sheet size and gauges typically up to 6mm. The fabrication and welding section has 11 fully equipped MIG and TIG bays, supplemented by two ABB robot cells. Two years ago, KMF invested £1.3 million in a major upgrade to its existing Gema electrostatic powder coating facility. This now provides two independent paint lines which can be linked to enable efficient application of two-coat systems, primarily for outdoor products. A fully equipped electrical and electronic integration facility was set up a few years ago, which enables KMF to offer a complete manufacturing solution. Nicholl joined the company four years ago from the SMMT Industry Forum, where he was a senior engineer on lean manufacturing implementation. Over the past four years he has worked at taking the company through a lean manufacturing initiative, which is now considered integral to its success. “My primary role is encouraging the adoption of waste elimination throughout our organisation simply by doing the basics right.” KMF recognised early on that the production team leaders were central to delivery of company objectives, and initiated a two-year intensive education programme starting in October 2006. During the training programme, the team leaders were taken through the four building blocks of lean: 5C for workplace organisation; simple visual control; standardisation; and waste elimination using the 7 Wastes. “We’ve set up a process approach to true lean implementation, rather than an activity/project driven

Sheet metal KMF

approach to fixing problems as we come across them. We set out a series of meaningful objectives that are deployed over a twelve week period and monitored closely via a weekly progress review.” As a result, KMF now operates with very low inventory levels, with 27 stock turns a year “which allows us to offer an agile, just in time response.” Customers benefit from short lead times of typically 5-14 days, and also greatly reduced batch sizes because of the flexibility.

Reward scheme initiative This year KMF launched a Productivity Share Scheme which openly and transparently communicates and shares the results of our improvement efforts with our employees. “If we hit our targets, at the end of the financial year a bonus of about £400 will be paid out to scheme participants,” says Nicholl. Since the adoption of lean methodology there has been measurable improvement in the company’s internal and external

‘right first time’, delivery schedule adherence, and productivity metrics.

Energy efficiency and sustainability KMF is compliant with BS18001, ISO14001 and ISO9001 for health and safety, environmental performance and quality. The new training school was built with energy efficiency in mind, using sustainable materials and with an underground source heat pump for under-floor heating. Waste streams are segregated and scrap material recycled. In addition, deployment of new CNC technology and software for dynamic nesting, means improved sheet utilisation, which results in lower unit cost to customers and less impact on the environment.

Looking forward The next goal, according to Nicholl, is to extend the lean thinking approach throughout the supply chain. In terms of new investment, KMF has just purchased an additional 10,000 sq ft manufacturing unit adjacent to the current building, to specialise in medical, scientific and aerospace operations. “We aim to undertake these operations in one self-contained building to provide the higher levels of traceability and control demanded by these customers.” In the longer term, KMF is committed to continuing investment in people and acquisition of the latest manufacturing technologies, in order to provide world class service to an ever growing customer base.

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Specialised

Simbiosis Founded in 1979, Sims Engineering has developed a reputation as the supplier of choice for important sections of the automotive and pharmaceutical industries. Specialising in automation equipment such as ultrasonic welding machines, the familyrun company has relied on experience and word of mouth to forge longstanding partnerships with its customers, supplying the likes of Toyota, GSK, Pfizer and the automotive supplier Magner.

“In

the automotive field, engineers frequently leave one company and go to another,” says company director Keith Sims. Our business relies a great deal on word of mouth” “Maintaining a good reputation with our client’s engineers is the most important thing for us: if you supply your customer with a good solution, always deliver on

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time and to spec you can not only keep existing customers, but expand your business too.” Timing is crucial in the automotive industry, with a trend over the past few years towards ever-shorter lead times and ever-more complex demands. “We have a core staff of 17 people based in Harlow, Essex, but we’ve been so busy in the last couple of years we have found it necessary to farm out a lot of machining to other companies rather than expanding ourselves, choosing instead to focus on assembly. This gives us a great deal of flexibility,” says Keith Sims. When the company’s business drops a little between the end of one project and the beginning of another, Sims Engineering machines and assembles all the parts itself. “That way we can expand and contract whenever necessary and ensure that we don’t commit to significant and unmanageable overheads.”

Finding the right solution Sims Engineering does a great deal of work for the plastics industry, including processing plastic components – such as car bumpers and dashboards – after injection moulding. These parts have become increasingly complex over the last decade: A car bumper might now include options to fit parking sensors, fog lamps, headlamp washers or even different types of wiring depending on the country of destination. Customers work collaboratively with the Sims Engineering’s design team to develop the best and most cost-effective solution, supplying technical specifications and quantity and quality requirements. Sims engineers then propose a solution and the customer makes final modifications prior to approval. “We carefully go through the design and see if there’s anything our customer wants to change,” says Keith Sims.

Automation equipment Sims Engineering

“Once they’ve approved the design we produce the machine. Throughout the entire process we remain completely focussed on providing the cheapest and most efficient technical solution we can. We’ve been doing this for over 30 years, so we do have a lot of expertise in developing the appropriate product.”

Impact of the recession Sims Engineering has bucked the recent recessionary trend and is currently seeing record levels of turnover. This has been due in part to its pricecompetitiveness, as well as underlying structural factors. “During a recession, we usually get more work because new models are frequently rolled out earlier if current models aren’t selling well. Over the past couple of years especially, many car companies have launched new vehicles, which has been very beneficial for us,” explains Keith Sims. “We’ve done a great deal of work with Jaguar Land Rover (JLR) through their tier one and tier two suppliers over the recession,” says Keith Sims. In addition, Sims Engineering supplies

directly to Toyota – one of the few remaining automotive companies to manufacture most of their parts in-house.

Long-term relationships Delivering in short time frames and specification is absolutely crucial in the automotive industry, but Sims Engineering resists the temptation to promise more than they can deliver. “We never say it’ll take us ten weeks to do a job when we know it’s going to take us 12 weeks,” says Sims. “Our focus is on gaining trust and a good reputation among the people that matter – the engineers. That means establishing relationships based on a proven track record of delivering exactly what we say we will when we say we will, and doing it fast. We have always strived to make our processes as efficient as possible. In that regard, we have found that the flexibility we gain from being able to subcontract work to other companies if and when we need it is vital to ensuring that we always meet our delivery targets.” Sims Engineering’s management team believes that good relations within the company are also extremely important in ensuring a smooth production process. Many Sims Engineering workers have been with the company for a very long time – some for over 30 years. “It’s a very friendly working environment and we make sure that the workforce receives fair wages as befits their skills. As a general rule, everyone gets to see the work from start to finish. I think it’s important to be able to see the fruits of your labour at the end, and it does make it more enjoyable.”

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Medical equipment Elekta

Elekta’s

choice As a cost-effective entry point into radiation therapy or as an additional treatment system

Sweden-based Elekta is an international human care company pioneering clinical solutions for treating cancer and brain disorders. The company develops sophisticated tools and treatment planning systems for radiation therapy and radiosurgery, as well as workflow enhancing software systems for cancer care. Lorenzo Spoerry finds out how a strategic logistics partnership has changed the pace of Elekta’s operations and services.

Operating

in 53 countries, Elekta’s 2,300-strong workforce delivers solutions to over 5000 hospitals globally. Nigel Weston, vice president of Elekta’s supply chain, accredits the company’s world-class performance in part to its partnership with Choice Logistics. “By working with our partners in a different way – in particular, by emphasizing trust and reliance – we’ve been able to achieve truly world

class standards of performance. Our relationship with Choice goes far beyond a typical vendor relationship. It’s about business development. It’s about two organisations listening to each other and then creating the necessary will to make the change.” Since cancer patients require a continuous and stable regimen of care, the functionality of Elekta’s equipment must be guaranteed at all times. As such, the availability of Elekta’s technology is the essence of missioncritical service delivery. To maintain this sophisticated equipment and ensure it is fully operational, mission-critical service parts must be available with little advance warning. Choice and Elekta began their partnership in 2006. Since then, Elekta’s global inventory has been reduced by 13%, representing a saving of many millions of pounds. The company’s delivery performance has also gone up to 97.5% from a base of around 80-85%, and availability of parts is now at around 99.3%. “We published

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Elekta our needs requirements and carefully examined the responses of various suppliers like DHL and Fedex. The final decision came down to where we would get the best service and where we would have the most influence over how that service adapts to our needs. Choice was the obvious winner” explains Weston. “We’ve leveraged off the back of a completely different market sector to bring the benefits of that to the health sector. Because everything Choice do is mission-critical [IT companies like Cisco Systems frequently have stringent service agreements that include twohour late penalties], they must have the infrastructure and the IT in place to effectively monitor progress. The way they control their systems control the spares ordering gives us perfect visibility. Consequently, my team in the UK know immediately what’s happening in all the countries in which we operate.”

The way Choice control their systems control the spares ordering gives us perfect visibility. Consequently, my team in the UK know immediately what’s happening in all the countries in which we operate Elekta previously supported service parts management for each division (neuroscience, oncology and software), with an internal operation that functioned independently on a regional and country-by-country basis. This approach was limiting, as the disparate IT platforms for inventory management created both service disruptions and inconsistencies. The company needed to establish global continuity to deliver exceptional client results regardless of location. Decisions about how parts should be delivered – whether they are flown, driven, or shipped overnight with a carrier - are discussed collaboratively between Choice and Elekta, with the final decision left to Elekta. Gary Weiss, Choice Logistics’ executive vice president, global operations, said: “Choice has built its service parts logistics solutions focused on the

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mission-critical supply chain requirements of organisations supporting high-tech high-availability equipment. This specialisation and attention to detail is based on years of experience and backed by proven technology and process. Our in-depth knowledge of the global marketplace, working with local expertise, ensures that our clients have access to their mission-critical service parts around the world.” In addition to providing greater inventory visibility, Choice was able to provide Elekta with access to its global locale of strategic stocking locations. These facilities form the backbone of the service, acting as major geographic stocking locations to meet local demands. Crucially, this has allowed Elekta greater flexibility to meet the needs of its diverse service level agreements, which might require a part to be delivered overnight, or even within a two- to four-hour window. Elekta’s workforce are fully cognizant of the criticality of its operations – a patient undergoing cancer treatment cannot be made to wait for treatment because of a lack of parts. As such, delivering world-class performance is the minimum acceptable standard, a philosophy that Elekta believes must be shared by its entire supply chain. “Elekta is a fairly modest purchaser in the market, but one that needs more than a one-size fits all solution. We decided on Choice because we’re small enough to influence their business and because they’re flexible enough to meet our needs. The layers of bureaucracy in some of the larger logistics suppliers are infinitely more complex. Trying to change things becomes a mammoth task” explains Weston. As a result of its partnership with Choice, Elekta has become recognised as the favoured supplier for a large number of hospitals and cancer centres, leading in five out of seven categories according to a prominent periodical that compares all the healthcare providers. Choice’s improvement programmes were completed in only 10 months – far quicker than such programmes usually take. “Last time I did this, ten years ago, it took us two years” explains Weston. “What we’ve managed to achieve with Choice is phenomenal. I don’t think many other suppliers could help us open a warehouse in a new country in just six to eight weeks, for example. There was also very little disruption to the smooth flow of business during the transition period – the biggest barriers were internal, and cultural.” Elekta and Choice regularly engage in quarterly reviews, where they review their objectives over the last three as well as the next three months, but communication between the two organisations is at all times extremely close. “We have totally open communication – I can ring up their CEO and we can discuss problems at any time. It’s an absolutely proactive relationship on both sides of the fence. This is critical, and the support we’ve received from Choice has given us world-class standards of performance. After the initial ten-month transition period, our operations started to work like a Swiss watch” says Weston. The support that Elekta have received from Choice means that they are able to support emerging markets quicker, allowing the company to pursue new locales much more effectively. Taking advantage of these new capabilities, Elekta are looking to develop opportunities in a range of new markets in Latin America, India and the Middle East, where significant logistical challenges can be a significant barrier to entry.

Machine knives Durham Duplex

A cutting edge

to modernisation Sheffield blade manufacturer Durham Duplex celebrated its centenary in May this year. But its vintage belies a progressive, export-driven sales strategy, recently improved financial management and expansion into Asia. Most of all, as a leader of the regional business brand, it is proud to be ‘Made in Sheffield’. Will Stirling and Lorenzo Spoerry report.

Very

few companies can claim to have 100 years’ experience in a single manufacturing sector. Durham Duplex is one. The one-time razor blade manufacturer began a modernisation drive in 1974, a journey which continues to this day as it exploits the worldfamous “Made in Sheffield” guarantee of high quality manufacture. Today the company exports 50% of its output of machine knives, industrial blades and other steel products, where managing director Charles Turner – chairman of the Made in Sheffield brand – confirms

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solutions ready to respond quickly and positively if things go wrong. We even provide clients with their own loss adjuster and 24/7 motor accident management facility to make sure you stay mobile following an accident. As Chartered Insurance Brokers, this exclusive honour demonstrates our commitment to professionalism and provides the confidence that our teams are trained, competent and source the best solutions. We have extensive resources to hand so that there is no situation which we cannot provide a solution for, even including operations overseas where required, whilst simultaneously maintaining our exceptionally competitive edge.

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Machine knives Durham Duplex

that the association with Sheffield is a big draw to buyers. Durham Duplex makes both high volume runs (mainly industrial blades) and smaller volume, bespoke batches of machine knives. Its sales strategy is to carefully balance UK and export, and the firm has deliberately targeted overseas markets in equal measure; Europe, the US, and the rest of the world with notable success – its industrial razor blades and machine knives sell more or less one third to each market. In recent years it has performed solidly, increasing revenue, retaining headcount and employing a chartered accountant as finance director in 2006 to introduce more rigorous financial management. Often required to make small batches of up to 100 machine knives, the company also manufactures utility blades for hand knives and safety knives, supplied to distributors, and deals directly with industrial end-users such as packaging shops and food producers. Charles Turner, whose father Neil bought the business in 1974 says that, whilst in a very competitive marketplace, the company is cautiously bullish about growth. One of two production facilities has just been moved across Sheffield to new local premises. Beyond its UK base, the company opened a facility in Thailand two years ago to service the ASEAN region. The integrated facility manufactures and supplies local customers direct when time-to-market is a crucial issue, with its Sales Office mainly selling high end UK products to Asian customers. Business has benefited greatly from the absence of tariffs with EU and favourable conditions in relation to the Commonwealth and North-American Trade Agreements, and Turner hopes for similar advantages in the Asian markets: “In theory there are no tariffs in the ASEAN region,” he says. “In practice it will take a while to get there. What is crucial is positioning the company to ramp-up revenue going forward and invest in the next big project. Our Thai operation gives us close access to our Asian customer base, and helps to provides us with the revenue to continue drawing IP from Sheffield’s universities and developing our next product range.” In the UK output is evenly divided between machine knives and industrial blades. The company relies for its

A collection of Durham Duplex industrial blades

There are moments when you wonder ‘how can we afford this?’, but when you have these skills you need to maintain them Charles Turner, managing director

production on off-the-shelf lathes as well as customised CNC milling machines and CNC grinding machines. In addition, Durham Duplex has had strip blade machines and bespoke kit specially customised, some of which cost three to four times more than standard machines. Turner credits the company’s location as one reason for its recent success. “We have access to grinders and machine operators with 40 years’ experience,” he says. “We use CNC machines for about 65-70% of our operations, but in certain areas it’s possible to get a much quicker changeover and higher quality by using a manual operator. The Sheffield network makes that depth of experience and knowledge available.” How has Durham Duplex coped in the recession? “We have an experienced production director and took a board level decision to do everything we could to retain our skilled workforce,” Turner says. “At times we’ve had to make some painful adjustments and go down to bare 38-hour weeks. Luckily we’ve only had to do that for short periods of time. When we’ve lost someone, to retirement for example, we’ve made sure that we’ve filled that post with someone equally qualified and ideally multiskilled. There are moments when

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Durham Duplex you wonder ‘how can we afford this?’, but when you have these skills you need to maintain them. If you’ve only got one qualified grinder and business picks up and you need three grinders as you return to capacity, you end up only being able to get a third of finished goods out of the door.”

Fulfilment flexibility, strong supplier links CNC is used heavily for long runs and complex forms such as making machine teeth, while manual operations are used when accurate turnover and quick changes are a priority – in making small batches of 20 parts, for example. “Having great flexibility is important,” says Turner. “Even if you’re making a knife for a standard packaging machine, there may be four different types of that blade for different end users’ requirements.” Investments have recently been made; the company financed the purchase of three new machines in the last 12 months, including a £50,000 grinder in August. “Whereas the broker previously

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offered a better price, now it’s the finance company, Lombard. We have had no problems with securing finance.” Durham Duplex works closely with its steel suppliers locally and internationally. “Working out what is or isn’t available is very important,” comments Turner. “In particular, having local stockists that can supply requirements quickly while having the international connections to get a good price when volume purchases are called for is extremely important to ensure that we have flexibility and can purchase steel at a competitive price.” There exist very strong links between Sheffield’s educational facilities and local businesses, a partnership Turner believes is vital to the region’s economic prosperity. “There are some fantastic academic facilities here. A lot of material science is done here, and that flows into Sheffield businesses. Sheffield University’s Advanced Manufacturing Research Centre has a great reputation in the field of aerospace, and there’s a nice flow between education and business – of advanced manufacturing expertise, of highly trained staff, intellectual property and of knowledge transfer partnerships.” He adds: “For example, we’ve used physical vapour deposition (PVD) coating from Sheffield Hallam University to great effect. We’re also involved with the Engineering and Physical Sciences Research Council and we have a PhD student at the Materials and Energy Research Institute. We take full advantage of local metallurgists’ considerable expertise. We’re only one of many, many firms to benefit from this region’s fantastic opportunities.”

Heating systems ABS

The heat is on TM meets Arnold Building Services, a heating design and installation specialist which goes above and beyond to ensure customer satisfaction.

Established

in 1978, Arnold Building Services (ABS) is a leading industrial heating specialist, providing installations of gas or oil-fired radiant heating and warm air heating systems to clients across both the public and private sectors. Central to the company’s success remains an enviable partnership model, undertaken with suppliers, manufacturers and customers alike. “Because the products ABS install and service are often highly technical, we have developed long-standing relationships with the relevant manufacturers to assist us with the operational side of our business: be that Powrmatic, Benson and so on,” confirms Alan Worthy, the company’s commercial manager. The other side of the hinge concerns the accounts ABS holds with a number of large retail customers — for whom it undertakes annual maintenance, related operational requirements and the installation of heating systems where and when needed.

Eight days a week Alan offers the story of one such client, a FTSE 250 retailer, by way of example. The relationship, he says, “Started off from a tiny acorn, when we got involved with a small number of installations for the customer. Because of the quality and professionalism of the work done, however, the size of the projects continued to increase, further strengthened by our adaptability — very much a differentiator for ABS.” For those working in a retail environment, the last thing one wants is contractors walking around with ladders and disrupting the customers’ shopping experience. Similarly, companies want the aesthetics of their buildings to remain constant so far as possible. To this end, “ABS prides itself on the fact that we go about our business with very low

impact, working during the night or throughout weekends to get the job done with minimal disturbance,” says Worthy. “What you get with ABS is a highly personalised service,” he continues. “We spend a considerable amount of time, from the initial meeting

ABS prides itself on the fact that we go about our business with very low impact, working during the night or throughout weekends to get the job done with minimal disturbance Alan Worthy, Arnold Building Services onwards, in ensuring that our delivery is aligned with the customers’ ethos and operational requirements. The fact that if something goes wrong with a client’s original system — as is almost inevitable in our industry — we’ll move heaven and earth to resolve the problem has been a hallmark of ABS since our inception. If that means that we need to drive a spare part 100 miles up the motorway on a Bank Holiday, then that’s what we’ll do!”

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eMerge Information Technology Limited eMerge are proud to support Parvalux in their use of the Priority ERP solution.

ormed in 2001, eMerge Information Technology Limited is part of the Medatech Group who supply, implement, configure and support Priority – a crossindustry ERP solution. Responsible for over 1500 customers worldwide its continued success is based on the ability for Priority to be tailored to each customer’s unique requirements without jeopardising its future upgradeability – all modifications will work with future releases without the need for further programming. The result is maximum functionality for the lowest TCO. Priority comes complete with Customer Service and Project Management modules as standard alongside tools such as

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Executive Information Systems. These are not third-party interfaces; they’re coded directly into Priority. It has full integration/synchronisation with Microsoft applications including Outlook and Project. It is fully webcompliant enabling business portals to be built ranging from small intranets to complete e-commerce solutions. Priority has been used on mobile devices (phones, PDAs, etc.) for many years. In addition it has a special SFDC module for reporting, wirelessly and via barcode, your shop-floor transactions. It can be used in either a Windows or UNIX environment with database options for Oracle and MS-SQL.

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Geared motors Parvalux

Parvalux windscreen wiper geared motor

for

bright young lights

Looking for an inspiring tale of transformation from old to modern, salesdriven UK manufacturing with growing exports? Then look no further than this revamped British engineering company run by a talented and driven team, devoted to finding that elusive market differentiator in a commodity market. This is not a philosophy, MD Justin Levine tells Will Stirling

The

Parvalux story is an insight into regeneration of old school UK industry. A company with a good brand but few modern practices has transformed into that one-time rare thing: a successful privately-owned British manufacturing business, competing on a level playing field and winning business from global competitors, including German, French and even Chinese companies. Parvalux could be a metaphor for the future of UK manufacturing. “I can show you samples on the shop floor that we’re putting into volume production that you won’t find anywhere else in the world,” says Justin Levine, managing director of Parvalux, the UK’s biggest manufacturer of geared motors. He is arguing, persuasively, for the power of branding as a market differentiator, which customers of products even as functional as geared motors want an aesthetic dimension to their offerings. “This is not a philosophy, customers have bought,” he says triumphantly. “Even with our very good customers, we constantly need to tender for work and examine our value-add proposition.” It would be hard to disagree with Levine such is his conviction, energy and cogency in explaining why Parvalux will succeed at what it plans to do. It is a grand ambition. Parvalux – the name derives from the Latin ‘parvulus’ and ‘lux’ and means ‘young light’ – was started in 1947, and has made complete gear-motor units since 1957. A one-time market leading company, it lost its way in the 1990s as opportunities to modernise were missed, and output and staff morale

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declined. New blood, a merger with its closest rival and a re-born common purpose has put the company back in track, and production is up to 250,000 units today. But while it operates in a vast and competitive market, Levine is bullish about prospects, now that some of the hard transformation work is done. “The volume of DC technology brushed and brushless motors produced in Western Europe is an ocean and we are, at present, a drop. But what I see is our current product platform, with a pipeline of real projects – i.e. real prototypes received by customers and with letters of intent – the volume is there to double the size of our business. This is a pragmatic view.” Levine, a smart, strategic thinker with an MBA and 20 years experience in growing companies in the industrial automation sector, radiates the confidence that his approach, and that of owner and CEO Steven Clark, will claim further market share.

Then and now Long before 2006, Parvalux had experienced tremendous success in

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geared motors, AC & DC brushed permanent magnet motors. But it was a small, old fashioned manufacturing company that relied on small scale production techniques. Design IP all belonged to the founder, LJ Clark, Steven’s grandfather, some was undocumented and when he passed away in 2004, much of the design know-how went with him. There had been little modernisation. “The manufacturing processes were very much embedded in people’s heads. There was very little recorded IP, IT systems were scarce, ERP was certainly not heard of, the supply chain was predominantly English,” says Levine. “Had you said ‘show me something that is modern’ in any department, you would have struggled. Steven knew that change had to made.” But he needed some help. Justin Levine had worked for automation group Schneider Electric for several years, a track record of turning around underperforming businesses within the group. Aged 36, realising that big responsibility did not bring control with it, and despite warnings that he was crazy to do so, he walked away from his job as global vice president for Schneider’s motion control business and set up Futurestech, a small management consultancy serving central Europe and the UK. One client was Parvalux. Steven Clark had worked for his grandfather’s company and had his own ideas for modernising the business, but had been thwarted. He inherited the business in 2004, looked for external advice and found Futurestech. Levine says, “I had grown tired of turning around French, German, and US companies. There is so much doom and gloom about UK manufacturing, that it

Geared motors Parvalux

has vaporised. I fundamentally don’t believe that, and we are disproving it here.” He made an equity deal with Mr Clark and moved back to the UK late 2006. There was work to do. There is a point at which a lack of transformation and modernity means that a business is irrecoverable; my view was that Parvalux had not reached that point. It had a loyal workforce of 90 people [200 today]. The brand was synonymous with quality in the UK, the customer base was very diverse and stable, even though it had fallen in 20 years from 200,000 to 64,000 units; effectively there still was a decent trading platform.” And it was profitable; never in its history had the company lost money. They repositioned the brand, devising a product design strategy and rebuilding the website which is now the main sales conduit. They hired a new management team and had to let some senior people go. “We recognised those people didn’t have the necessary skill set to drive the necessary change. It was very uncomfortable, but this is normally a symptom of organisations who do not train people to provide the required skill set for future success. With half the new management team in place, business began to grow.

to those of Parvalux. Parvalux made batches of perhaps 100 pieces, and had 3,000 customers. EMD had only 100 main customers but produced in much larger quantities. EMD’s volume business was a strong draw to Parvalux, whose entrepreneur owner Steven Clark was able to affect a cash purchase. “They had poor branding, and even their strategy was a bit woolly, but they were fantastic at production and engineering,” says Levine. “For de accredits sign to manufacture, with time-to-market in mind, with a very high focus on recovering labour overhead, they were superb.”

We’re effectively looking to produce a bespoke product at a highly competitive price

Turning point Parvalux needed critical mass and in 2008 the company bought a big competitor. Private equity-owned EMD Drive Systems, based in Halstead, Essex, was a fantastic fit – it produced a similar product but in high volume with less customisation, aggressively targeting different market segments

Soon after Levine arrived to run EMD, Lehman Brothers’ declared bankruptcy and spawned the global economic meltdown. Plan A, to run the two sites independently, was ditched and it was decided to consolidate. They acted swiftly and on Friday Feb 13th Feb 2009, shut the doors on the EMD factory. “We literally relocated it over seven days, picked it up, brought it to Bournemouth and recommissioned it. These were high volume lines with high volume customers attached, which sustained the value of the company we had paid for – the pressure was to reproduce quickly.” They very quickly created a single management team, combining the skill sets of the two companies. The acquisition helped lift production to 250,000 units p/year, from 87,000 in 2008 – about 25,000 of this is new business won since 2008. By combining two companies with different but compatible business models, having a focused management team with clear goals and beginning to modernise its production systems, the new look Parvalux began to build real competitive advantage in what Levine freely admits could be seen as a commodity market. The Parvalux process was simple batch production. EMD’s model was a flow line, with staff working in cells like a car line, which didn’t stop unless there is a quality issue. “It introduced to our small business that there’s another way of manufacturing, which has a positive

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knock-on effect,” says Levine. “A key focal point in a business like this is to drive improved labour efficiency. We employ 200 people, about 70% of them direct labour. So we are focused on learning from efficient production methodologies and rapidly employing them.” On the shop floor, a lot of stock is held local to the production line. Operations Director Simon Rainger, who came from EMD and the automotive industry before, has his hands full and is cautious about lean. “Combining two companies presents challenges and we’re in the middle of managing a big change. Some lines are set up for a more TPS-style, pull system, while others are still batch and we keep plenty of inventory. On training we’re working with Business Link and Bournemouth College to recognise what our staff know as a formal qualification. This is not a lean factory – we are 100% focused for now on managing diverse orders; we have a big product portfolio, extended supply chains and we need to manage large, short notice orders so inventory will always be needed.”

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Investment in design Combining two business cultures was step one. The second, key part of the strategy, is about product design and development. Much of Parvalux’s design IP had gone. “We reconstructed a design and development function,” says Levine. Parvalux hired a technical director, Dr Martin Mathias, former head of the Bournemouth University design department, and now have 15 engineers all with Bachelor or Masters Degrees, many with industry experience. Design is standardised with the SolidWorks design platform for general 3D-models. They use SPEED software for motor modelling and DonTyne gear calculation software for modelling of gears, developed by the University of Newcastle. This is all since 2006. This strong design emphasis plays to Levine’s view of the central Parvalux value-add proposition. “Imagine you are a volume machine manufacturer 20 years ago. The typical buying process for a commodity item like a geared motor would be simply: select a product based on a standardised offer from a supplier. That trend is changing, and we have the evidence. Some of the OEMs we supply to no longer want a standard offer to fit their product platforms. They want differentiation, sometimes it’s aesthetic, or it might be a space constraint. We are looking to produce a bespoke product at a highly competitive price. Using modern RP techniques, we are able to bespoke the casting / gear technology / motor platform to provide a unique product. Sure, there is risk involved, but this is the future.”

Geared motors Parvalux

Parvalux at a glance Location

Bournemouth, Dorset

Key products

DC and AC brushed and non-brushed DC geared motors, 5,000 separate products. 60% product is exported. Main markets include Germany.

Turnover

£14m (£6m in 2006)

Employees

200 (90 in 2006)

Product breakdown

Key market segments

AC (alternating current) motors – 12%, DC (direct current) brushless motors – 2%, DC brushed permanent magnet motors - 86% Roughly 90% of all motors will be fitted with a gearbox. Classic worm gearbox makes up 65%-70%. Roughly about 25% are worm/spur = a worm gear inside but with a spur gear train. The balance is in-line gear motors. Home & Leisure, Mobility, Healthcare, Commercial Automation, Automotive and Energy.

Future for Parvalux, future for UK industry Levine is convinced that consumers and business people increasingly want something different, and attractive design has a place in the most utilitarian products. The trick: give the customer whatever he wants, but manufacture it cost-effectively. “Over four years ago when I was at

Schneider, German companies bought mainly from German companies; I have seen a distinct change in that. It’s not just Parvalux and it’s not the weak pound. There are many geared motor manufacturers in Germany and elsewhere, but I suspect that the number of them who’ll tailor the product fully are far fewer. It’s not subtle changes, like a longer shaft; how many firms would completely retool to make a new casting? Or put a completely new gear train inside it that never fitted in it before. That’s what we do. It’s not a philosophy.”

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