The Manufacturer - September Issue

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www.themanufacturer.com September 2009 Vol 12 Issue 8

New Progress?

L O N D O N

The Manufacturer annual directors conference will help manufacturers succeed in these troubled times and arm them with the knowledge they need to succeed with agility in an uncertain future.

Is government’s Manufacturing Strategy delivering?

An inspiring programme of presentations, workshops and debate sessions from a select group of exemplary organisations. This agenda will be headlined by some of the industry’s most prominent role-models. Individuals committed to galvanising support for a resilient and vibrant manufacturing future.

Speakers at the event include: Stephen Radley –

Ian Rice –

Chief Economist,

Operations Director,

EEF

Draka

Mike Gregory, CBE

Paul Christodoulou,

Head of the Institute for

Global Manufacturing Strategist,

Manufacturing,

the Institute for Manufacturing

Agenda summary: MORNING KEYNOTES & PLENARY SESSIONS �

Economist’s Insight

�

Navigating the emerging industrial landscape

�

The value of Operational Excellence today

MIDDAY STREAMED SESSIONS

Pierfrancesco Manenti,

Lead Technologist for High Value

Stream 1 Your supply chain.

Lessons in responsiveness from a maintenance supply chain. Home or Away? Manufacturing in the right place.

Supply Chain Opportunities in Nuclear – Is it for you?

EMEA Research Director for

Manufacturing, Technology

Stream 2 Your customer

Manufacturing Insights, IDC

Strategy Board

Keivan Zokaei,

Catherine McDermott;

Be Indispensible. The latest in service and support. Lotus Motivate, Innovate! Add Value, 111 year case study

Director of MSc in Lean

Distribution Director,

Operations. Lean Enterprise

Argos

University of Cambridge

Robin Wilson,

Kevin Eyre; Professor Peter Hines,

Managing Consultant,

Stream 4 Your workforce

Professor of Supply Chain

SAPartners

Inside Distribution: Argos and Continuous Improvement.

MX Award for Best Partnership between Business and education. Skills- Cross Sector, Retraining, Strategic

Management and Chairman.

Lean Enterprise Research Centre,

Andy Woods,

Cardiff University

Managing Director, Adnams

�

Panel Discussion and debate

IMSERV

Managing Director,

�

Closing Keynote: The importance of a collaborative market place- creating synergies and industry ecosystems working together for a more secure and stable future

Carbon and Energy Product Manager, IMSERV

Corporate manslaughter and employment law

World class manufacturing Higher quality standards and no mistakes

AFTERNOON PLENARY SESSIONS

Charles Morgan,

Matt Davis,

Leadership and strategy

Placement, Continuity

Commercial Director,

Morgan Motor Cars

Round-up of the principle training providers

The Manufacturer Directors Conference and The Manufacturer of the Year Awards In association with:

See enclosed programme to book your place and for more information on the sessions and speaker’s or go to

w w w. t h e m a n u f a c t u r e r. c o m / d i r e c t o r s c o n f e r e n c e

www.themanufacturer.com September 2009 Vol 12 Issue 8

David Peake,

T r ai ni ng for Su c c e ss

Stream 3 Your sustainability Comply and Compete. Competitive Sustainable Manufacturing. Lean is Green. Delivering Sustainable Competitive Advantage

Research Centre, Cardiff University

Special report

Interview Professor Mike Gregory CBE

Head of the Institute for Manufacturing

Source of Supply

Editor’s comment

A New Understanding of manufacturing Government’s manufacturing strategy New Challenges, New Opportunities was launched a year ago. It set out five main objectives focusing on, in brief: global value chains; technology exploitation; investment in intangibles; people and skills, and the low carbon economy. Since September 2008, government followed up this blueprint with New Industry, New Jobs, a Low Carbon Industrial Strategy, Digital Britain and a programme to promote advanced manufacturing. These actions are wide-ranging and ambitious. The recession has hit manufacturers hard, moving focus for many away from medium term strategies to short term survival. One year on from launch, how has the strategy measured up? Our lead story attempts to assess progress in some of the key areas.

On September 1, the Defence Industries Council launched two reports making a compelling economic and social case for further public investment in the defence industry. The issue is critical to a sector that is a British manufacturing success story, but is also complicated. Defence spending is directly associated with overseas military activity and there is growing opposition to Britain’s military operations in Afghanistan, which can cloud the holistic view of the defence sector’s contribution to the whole economy. As the DIC points out, defence employs 305,000 people directly adds £12bn in value added output to GDP, and provides platforms for big technological innovations that benefit industry well beyond military equipment.

The UK is also very good at it and a cornerstone of government’s aforementioned strategy is to capitalise on our comparative advantage in global markets.

Our Training for Success report is an up-to-date round-up of the principle central government and RDA-funded training providers. High quality training has arguably never been more important to manufacturers and the whole training sector is badly in need of clarification.

Three great British manufacturers are profiled in our popular Manufacturing in Action section; Orb Electrical Steels (part of the Cogent Power group), Apollo Fire Detectors and Johnston Sweepers. The common denominator with our profiled companies, which come from all sectors of manufacturing, tends to be people, and Barry Roach at Apollo and Mark Cichuta at Orb have agreed to share some of their insights and motivation at our Manufacturer Directors Conference 2009 in November. Please attend – I promise you will benefit from some enlightening discussions.

Will Stirling – Editor

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News and features 04 News

Manufacturing news

10 Manufacturing appointments On the move

Find out who’s heading where in manufacturing

13 Just Jones

The lean manager

Dan Jones reports on orchestrating a lean transformation

15 Economics

Fighting the paper trail

Steve Radley warns of the costs of ill-conceived regulation

16 Interview

The appliance of science

Will Stirling talks to Professor Mike Gregory, head of the Institute for Manufacturing, about gaining a better understanding of global manufacturing to help companies improve efficiency

22 Special feature Interview – Trevor Mann Nissan’s Midas touch

Good news keeps coming out of Sunderland. Trevor Mann, senior vice president Nissan Europe, offers some reasons why

24 Lead story

New Challenges, New Opportunities — A new understanding?

The Government’s redrafted manufacturing strategy was launched one year ago to some acclaim — a more sectoral approach that wasn’t embarrassed to pick sectors on merit. One year on, is progress on track?

30 Special feature

RBS – Don’t discount demand in flat bank lending markets

RBS address issues raised about the supply of credit to business and the willingness of banks to lend

32 Leadership and strategy

A law unto itself: a manufacturing perspective

Edward Machin investigates the recent statutory provisions set to affect this sector

38 Design and innovation Looks right, feels right

Collaboration in design is becoming essential as OEMs focus their attention ever more tightly

42 Special feature

Ernst and Young – Switching to SME status triples tax benefits

Changes to the R&D tax relief scheme can allow companies to triple their tax benefits and provides access to cash

44 World class manufacturing

Think like the tortoise, run like the hare

Sarah Coles looks at how manufacturers have to make things faster and to a higher quality

48 Employee of the month Celine Nuttall at Exception

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Contents T r a i n i n g f o r S u c c e ss

49

W i l l U K C E S r e l i e v e t h e pa i n to t r a i n

Industry is eagerly awaiting the findings of a body set up by government to recommend ways that skills delivery can be simplified

IT in manufacturing 62 IT news wrap

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

Logistics and supply chain 70 Five maxim ‘compass’

LCP Consulting and Cranfield University on insuring supply chains remain efficient

Special feature 74

Kingston Smith – Manufactures: don’t lose the opportunity to reclaim tax

David Goodridge explains some tax saving opportunities

Sustainable manufacturing 76 Gaining and giving

Mark Young explores the community initiative aspects of CSR

Manufacturinginaction Factory of the month

Orb Electrical Steels 80

General manager, Mark Cichuta, tells TM how the steel producer’s comprehensive business transformation, Project Renaissance, has enabled it to thrive in an increasingly competitive market.

Fire detection – Apollo Fire Detectors 100

Manufacturing director, Barry Roach, discusses the ‘parts, people, and processes’ ethos central to Apollo’s ascent into the sphere of world class manufacturing.

Street cleansing – Johnston Sweepers 105 Marketing director Steve Douglas and operations director David Bishop on how the global manufacturer of outdoor surface cleansing equipment has implemented a raft of modular operational initiatives.

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Newsinbrief Contact lens manufacturer CooperVision is moving production from Adelaide, Australia and Virginia, United States to its Hamble plant in Southampton. The company will close the US site, which produced 7% of its total output, over the next 15 months cutting 550 jobs. The company does not expect it will need to hire any more staff in the UK and said the restructure, which will begin in 2011, will save it $14m a year.

Scottish Energy Minister Jim Mather has announced a £13 million funding package to regenerate a renewable energy industrial park in Fife. The money – provided by Scottish Enterprise, the Scottish Government’s investment agency – will be used to upgrade the quayside at Fife Energy Park near Buckhaven.

Scottish Enterprise says the park, established in 2005, is pivotal to Scotland’s energy sector because of its proximity to the offshore wind farm leasing sites in the North Sea. The park’s funding has been fast-tracked as part of the Scottish government’s economic recovery plan.

The devaluation of the Chinese yuan is making manufacture in the country increasingly difficult to sustain, according to the boss of Samsung Digital Imaging (SDI). Park Sang-Jin, chief executive of SDI, told the Financial Times in an interview: “The Yuan is greatly devalued [so] we had a hardship from the currency. China still makes sense but...conditions are getting worse for maintaining our manufacturing facilities.”

Jack Matthews, chief executive of Improve, the Sector Skills Council for the UK food and drink manufacturers, has applauded government proposals to reassess research and skills funding as part of its new strategy on food sustainability. Environment Minister, Hilary Benn, has announced a major review of the long-term security and sustainability of the UK’s food supply, with several draft policy documents published for consultation.

Japanese automotive giant Calsonic Kansei has pledged to invest a further £11.4 million in its Welsh plant to enable upgraded manufacture at the site. Government has agreed to put up a £3.2 million cash injection into the upgrade from its Single Investment Fund in order to enable the project to go ahead. The move will see 37 new jobs created at the factory In Llanelli which already employs 237.

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Defence spending is critical The Defence Industries Council has launched a public relations strike aimed at garnering public support and ensuring continued government investment in the defence industry.

The Defence Industries Council (DIC) has published two reports setting out the indispensible nature of the UK defence industry in protecting national economic and security interests. The reports offer a ‘route out of recession’ for the UK, based on an analysis of the economic benefits of investing in defence. One report co-produced with research firm Oxford Economics looks at the economic contributions of the sector while the second, from the DIC, examines the support given to the UK’s armed forces by the defence industry.

According to Mike Turner, chairman of the Defence Industries Council, the defence industry provides “over 300,000 highly skilled jobs in the UK and some £12bn of added value to the economy every year. There are more SMEs in the UK in the defence industry than France, Germany, Italy, Spain and Norway combined. It is a very important sector both for pursuit of the national interest on the world stage and also wider economic benefit.”

The reports have been released at a pivotal time for the UK defence and aerospace sectors. Government has announced a Strategic Defence Review for the next parliament.

Defence spending is under the microscope as the main political parties weigh up sections of public spending for likely cuts following next year’s general election. And the industry has faced criticism for wasting money on the Chinook Mk3 helicopter programme, and other expensive and protracted military equipment contracts are under pressure in the the economic downturn.

DIC member and CEO of Thales UK, Alex Dorrian says that the majority of defence industry work requires no vindication.

“There is an overwhelming fascination with programmes that don’t go well and sometimes they are large and sometimes they are visible,” says Dorrian.

“75 per cent of the programs are delivered and delivered on time and within budget. I do think there needs to be a bit of recognition that in some of these very, very, very technologically demanding programs, there are a lot of success stories as well.”

Despite this view, the defence industry is still concerned about public perception. Of particular concern is the public’s view, recognised by the DIC, that the country’s ability to defend itself is no longer strongly-matched with the UK’s capability to produce the equipment for its armed forces.

The reports therefore also aim to reconnect the public with the defence industry and re-engage them in the wider issue of, and benefits of, defence.

ManufacturingNews Cleantech and renewables expected to become vital sectors of the economy A new survey, commissioned by the Department for Business, Innovation and Skills, has revealed which industries UK business leaders regard as having the greatest potential for growth. The results found that nearly half (43%) of those questioned believe that ‘cleantech’ will grow at the fastest pace by 2020, followed by science and technology (20%) and media and entertainment (15%).

The survey highlights how the current economic climate presents new opportunities for new areas of the economy to thrive. Combined with a growing awareness to find solutions for some of society’s greatest challenges – from tackling climate change to supporting an ageing population – investing now in innovative, high-growth areas will be essential for bolstering the UK economy once recovery kicks in.

Driving the awareness, investment and skills required to power these high-growth markets is essential for Britain’s future.

Britain’s chance to showcase our strength to the rest of the world, including our cleantech innovations in the run up to Copenhagen 15, is essential for the UK’s ability to meaningfully contribute to the global economy.

It is therefore essential for both

government and business to properly recognise and promote the importance of these sectors.

As part of meeting this need for recognition; Science and Innovation Minister Lord Drayson and entrepreneur James Caan recently launched the iawards - the first ever Government backed-awards to celebrate achievements in science, innovation and technology.

Science and Innovation Minister Lord Drayson said: “Cleantech and renewables will play a huge part in helping the UK economy to grow sustainably, but we need to do more to encourage innovation in these and other high tech sectors. And that means recognising our best innovators, those who are creating the household names of tomorrow.

The iawards will do just that, this inaugural year and in years to come. Make sure to get your entries in by 16 September!”

Nearly 2,500 manufacturing firms to fail in 2009 Accountancy firm BDO Stoy Hayward estimates a high of 2,460 manufacturing firms will go out of business in 2009, over a third more than the 2008 figure of 1,600. But manufacturing is likely to be one of the better performing sectors of the economy following the downturn, BDO said. Next year it expects the number of failed firms to fall to 2,090.

“There are evidently still challenging times ahead for the manufacturing sector, with high levels of business failures expected in the coming months,” says Kim Stubbs, manufacturing business restructuring partner at BDO Stoy Hayward.

“But the inventory cycle has

a key role to play in the recovery and businesses that draw their destocking to a close and increase their inventories, will contribute significantly to the rebound in the industry. This, alongside reduced restraint on credit and lower sterling exchange rates, signals light at the end of the tunnel for the manufacturing sector.”

BDO arrives at its figures through its Industry Watch study. This is research it carries out across all business faculties across based on data for compulsory liquidations, creditors voluntary liquidations, administrative receiverships, administrative orders and company voluntary arrangements (CVA) from government.

Newsinbrief Anglo-Dutch steelmaker Corus is to restart production at its Llanwern, Wales-based hot rolling mill thanks to an upsurge in the price of steel. Production halted at the 3m annual tonne capacity plant in January, with a lack of demand and the high cost of operation prompting Corus to announce the loss of 528 jobs. The reactivation is not expected to reverse these redundancies.

Sheffield based construction material manufacturer and supplier SIG has announced it is to shut six of its 12 factories and lay off another cluster of staff in the latest round of its unforgiving cost cutting initiative. The insulation and roofing interior specialist, a FTSE 250 company, recorded a pre-tax loss of £9.2m in the first six months of 2009, down from £55.7m in the six months prior. It has made 980 employees redundant since the beginning of the year so far and will cut a further 300.

UK manufacturers’ outlook for production over the next three months is the least negative since June 2008, the Confederation of British Industry said today (Wednesday). In the CBI’s latest industrial trends survey 32% of UK manufacturers said they expected output volume to fall over the next three months, while 27% said it should increase.

Millions of UK workers could lose their final salary pension schemes over the coming years, according to a survey by consultancy firm Watson Wyatt which found 48% of employers plan to close the programmes for existing staff by 2012. Most private sector companies have already curtailed such schemes for new starters, opting for defined contribution (DC) programmes instead. These are less beneficial for workers but cheaper for firms.

Business secretary Lord Mandelson has put his weight behind regional development agencies (RDAs) in their battle with Whitehall over venture capital funding. In a stand-off that first began last September, the Treasury is reluctant to back the RDA’s pre-agreed sums of money because senior government figures think the money should be disseminated centrally rather than locally.

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Newsinbrief The Business Software Alliance is warning manufacturers against software piracy after releasing details of legal action it has taken against four firms found to be running unlicensed computer programmes.

The cost to the businesses exceeded £50,000, which does not include any legal fee costs incurred and reputational damage Around 155,000 new cars have been ordered through government’s scrappage incentive scheme, meaning half the funds for the programme have now been allocated.

The scheme works by government and car manufacturers contributing £1,000 each for a £2,000 discount on the list price of a new car when the customer scraps a vehicle over 10 years old at the time of purchase.

Government has improved the terms of its Trade Credit Insurance Top-up Scheme, which is designed to help businesses who have struggled with reduced cover availability as a result of the downturn. Companies who have suffered a reduction in their insurance offering since October last year can use government’s scheme, which runs until the end of the year, to improve the cover they are being offered by a private sector insurer.

Four credit insurers are offering policies through the scheme. They are Euler Hermes, Atradius, Coface and HCC.

Datesfor yourdiary September 8-11 SABC will be supporting the Defence Systems & Equipment International conference, to be held at London Excel. For further information visit: www.dsei.co.uk 9 The London Chamber of Commerce & Industry are holding

a seminar within the DSEI conference regarding SME’s. For further information contact Victoria Bailey on 020 8748 8883 or dsei@cmsstrategic.com

9 LCV2009 is being held at Millbrook, Bedfordshire. For further information visit: www.lcv2009.co.uk

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Brewer makes billions despite ‘challenging year’ Multinational drinks company Diageo has announced full year net profits of £1.62bn while it continues plans to close sites and make employees redundant in an effort to cut costs.

The net profit figure constitutes a rise of 7% on last year’s figures but all the same chief executive Paul Walsh said it has been “a very challenging year” for Diageo.

The firm, which makes leading brands including Smirnoff, Guinness and Gordon’s, has come in for major criticism in Scotland for plans to close a Johnnie Walker bottling plant in Kilmarnock in a move which will see 700 jobs lost.

A further 200 employees are set to be made redundant from sites in and around Glasgow.

These, along with other cuts across its global operations, is estimated to save the company £120m per year. Diageo has seen growth this year in vodka, rum, tequila and beer sales. Gin and wine markets are weaker though and retailers have engaged in fine

whiskey de-stocking initiatives.

“We took action quickly to manage these difficult times, reducing our cost base and refocusing marketing spend as consumer trends changed,” said Walsh An outraged Len McCluskey, assistant general secretary of Unite, said the figures prove Diageo’s cost cutting exercise in Scotland amounts to penny-pinching. “Even in a global recession, Diageo can pull in billions of pounds in pure profit,” he said. “Surely now Diageo’s claims that it must cut Scottish jobs to reduce costs can be seen once and for all for what they are — about short term greed, not long term need.

“For 185 years, generations of Scotland’s workers have delivered for this company. Their hard work has made this company extraordinarily wealthy and its products loved around the world.

They deserve better than to be thrown on the scrapheap to slake Diageo’s thirst for yet more profits.

Toyota scotches talk of Burnaston cuts Toyota Manufacturing UK has refuted media speculation that production cuts at its parent Toyota would affect production and jobs at its Burnaston plant.

Toyota Manufacturing UK told The Manufacturer that employees at the Derbyshire plant have been told that the company is considering moving all production to a single line. The plant currently operates two lines, with the Auris model built on a dedicated second line. This is not expected to affect staff levels, which have been rationalised this year via a voluntary release programme introduced in March. The scheme was requested by staff and 300 employees were released in May and June.

Toyota sales have recently rallied slightly following the success of the car scrappage scheme.

Despite this, a spokesperson for Toyota Manufacturing said production at the company was at a 12-month low, and well short of its 280,000 units per annum capacity. Current forecasts showed no indication that the transfer to a single line, for both Auris and Avensis models, would reduce production from current levels or

that demand would fall lower than it is today in the near term.

In April the company introduced a 10% work share programme, with both pay and hours for all staff in all departments reduced by 10%. Following a small spike in sales accredited to the car scrappage scheme, work share was suspended for August and September, with normal pay and terms reinstated. Work share will resume in October indefinitely.

No compulsory redundancies have been made at Toyota Manufacturing UK this year.

Production of the new hybrid Auris at Toyota in Burnaston will commence in mid-2010. On current forecasts it is expected the hybrid cars could also be produced on a single, combined line.

ManufacturingNews Carbon Trust assists manufacturing SMEs The Carbon Trust is to help thousands of small and medium manufacturers drive down their costs through a new programme, The Big Business Refit.

Set to launch in September, The Big Business Refit will offer manufacturing SMEs expert advice to help slash their energy costs and financial support to assist in scrapping old inefficient equipment and replacing it with new energy efficient models.

There has been a recessiondriven surge in demand for the Carbon Trust’s interest-free business loans. In the first six months of 2009, hundreds of manufacturing businesses from furniture manufacturers to plastics factories have been given loans at zero interest to equip their businesses with the latest energy saving technology. According to the Carbon Trust, such businesses are saving an average of over £15,000 each on their annual energy bills – a collective total of almost £3m a year.

Tom Delay, chief executive

of Carbon Trust, says: “Manufacturers are realising that for every month they ‘make do and mend’ with old inefficient equipment, they are wasting more cash on unnecessarily high energy bills. With credit all but dried up elsewhere, the Big Business Refit breaks the deadlock by helping manufacturers to buy equipment that will both slash their costs and often transform their businesses.”

Manufacturers can benefit from free energy saving assessments from a Carbon Trust expert and a tailored action plan that identifies the savings that could be made by replacing high energy consuming equipment. The Carbon Trust’s unsecured, interest free loans can be used for equipment replacements costing between £3,000 and £400,000. The loans are designed to pay for themselves through direct energy savings.

With a total of £100m in loans available, The Big Business Refit is expected to help up to 2,500 UK manufacturers save a total of £39m off their annual energy costs.

Lean to the centre Microsoft in conjunction with UK Microsoft Dynamics Partner, eBECS, have established a new means for organisations to most successfully implement lean elements in to their businesses.

The companies have created The Lean Centre of Excellence to serve as a collaborative facility for organisations looking to utilise the Lean capabilities available within Microsoft Dynamics AX. eBECS has developed a complete series of Lean Manufacturing modules designed to complement and enhance the functionality of the Microsoft Business Solutions program. Lean Manufacturing for Microsoft Dynamics AX enables organizations to implement and utilize lean tools such as Kanban, lean order schedules, Heijunka board scheduling and much more through the additional functionality provided by eBECS within Lean Manufacturing II

and III. Andrew Rumney, Solutions Director at eBECS, says: “We have developed the eBECS Lean Enterprise Solution for Microsoft Axapta specifically to assist manufacturers that have recognized the need to migrate to a lean manufacturing strategy. The modular approach recognizes that this migration route will be different for different manufacturers, and offers maximum flexibility.”

In addition to the functional Lean benefits found within the software, joining the Lean Centre of Excellence provides a useful after service communal aspect providing a venue to ask questions and keep up to date with news and training opportunities.

Datesfor yourdiary September 9-10 The Energy Event is being held

at the National Motorcycle Museum in Solihull. For further information visit: www. theenergyevent.com

15 EEF is holding a HR Network Meeting, encompassing the Bedfordshire, Cambridgeshire and Milton Keynes areas.

To ensure you are invited to attend, contact Zoe Salsbury on 01767 685925 or email zsalsbury@eef.org.uk 15 EEF is sponsoring the Business Awards National Final, being held at the BT Auditorium in London. For further information visit http://www.yini.org.uk 22-23 UKTI is part of Composites Meeting 2009, being held in Nantes, France. For further information visit: http://www.compositesmeetings.com/ 24 SBAC’s Toulouse office will be celebrating its 10th anniversary at Orangerie de Rochmontes. For further information please contact Gen Richards on 020 7091 4520 or gen.richards@sbac.co.uk 24 A one day seminar ‘Product Development – realising your ideas’ is being held by electronics industry support group EY in West Park, Leeds. For further information visit the events pages at www.electronicsyorkshire.org.uk or telephone EY on 0113 274 4270.

Sept 27 – Oct 1 Labour’s Annual

Conference, held every autumn, will be held in Brighton and led by the National Executive Committee. For more information or to register visit http://www. labour.org.uk/annual_conference_2009

29 EEF is holding a Manufacturing the Green

Economy seminar in Chorley. For further information and to book visit: http://www.eef.org.uk/greeneconomyevents/

29 EEF is holding a joint event with the Work Foundation at the Labour conference in Brighton. For further information visit http://www.manufacturingourfuture.co.uk/

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Datesfor yourdiary October Throughout October EEF is holding a series of environment conferences in association with British Gas Business at various venues across the UK. For further information visit www.eef.org.uk/ greeneconomyevents

1 Reliable Manufacturing will be holding a one day operational excellence master class at the Holiday Inn Runcorn. For further information or to download a booking form visit www.reliable-manufacturing.com/public-events

Automotive fortunes improving The rate of decline in UK car production slowed significantly in July, according to the Society of Motor Manufacturers and Traders (SMMT), indicating that destocking initiatives are coming to an end.

There were 107,635 cars produced in UK factories last month – a 17.9% fall on the same period in 2008. However, this was the smallest decline in 2009 so far. Paul Everitt, SMMT chief executive, pointed to scrappage schemes across Europe as the biggest factor in the improved business conditions

for automotive firms.

He added: “The UK motor industry is starting to stabilise but remains fragile. Industry needs government to deliver support through the Automotive Assistance Programme and encourage banks to provide access to much needed finance and credit.”

Commercial vehicle output is still struggling though and continues to decline sharply.

Production of vans, trucks, busses, coaches and the like fell 59.8% in July, compared with last year’s figures.

5-8 The 126th Annual Conservative Party Conference will be held in

Manchester. For more information or to register for the event visit http://www.conservatives.com/Get_involved/ Conference.aspx

5-8 EEF is holding a joint event with

Conservative Enterprise at the Conservative conference in Manchester. For further information visit: http://www.manufacturingourfuture.co.uk/

6 SAP is holding a half day event focusing on manufacturing efficiency and best practice issues at their HQ in Middlesex. For further information contact gina.prettyger@sap.com

7-8 The Working Buildings’ conference and exhibition is taking place at London Olympia. For further information contact Sarah Tanner on 020 7921 8066 or sarah. tanner@ubm.com 11-13 BioPartnering Europe takes place at the QEII Centre in London. For further information visit www.techvision.com

13 MAS are holding a workshop focusing on how to profit from green thinking throughout your business. For further information contact Anna Nilsson at a.nilsson@giraffeinnovation.com

Manufacturing Insight appoints new director The Department for Business, Innovation and Skills has appointed Nick Hussey, nonexecutive director of SayOne Media, publisher of The Manufacturer, as the new director of Manufacturing Insight.

Manufacturing Insight is an independent organisation that is tasked with helping to challenge and change public perceptions of the manufacturing sector. Of particular focus for the group will be a campaign in schools designed to generate enthusiasm for students to pursue careers in manufacturing.

“It is essential that we change the image of manufacturing and raise awareness of the exciting careers that are available in the sector,” said Hussey.

“That is why I am delighted to be given this opportunity.”

Ian Lucas, Minister for Business, Regulatory Reform and Employment Relations

comments: “I congratulate Nick Hussey on his appointment as Director of Manufacturing Insight. This is a key commitment under our 2008 Manufacturing Strategy, and recognises how vitally important it is to promote, support and celebrate UK manufacturing successes.

“The UK is the sixth largest manufacturer in the world, and with the recent publication of the document on Advanced Manufacturing, the Government has signalled its commitment to the future of manufacturing, with high tech, high skills at its core.

“Manufacturing Insight will play a vital role in promoting the exciting work of the manufacturing sectors, which will in turn with help ensure that manufacturers have the future resource they need to be successful in new and evolving markets.”

14-15 The 4th annual Manufacturing Technology Ireland Exhibition is being held at National

Centre, Dublin. For further information, contact Ian Valentine on 01784 880890 or ianv@etes.co.uk

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The Manufacturer Awards 2009 are being held on November 12 in London. For further information please contact Alexis Catchpole on either 01603 671303 or a.catchpole@sayonemedia.com

ManufacturingNews Datesfor yourdiary

Manufacturingoutput

October

Caution over small climb

15 MPM 09 a one day conference focusing on how to cut your manufacturing costs whilst also improving operations, is being held at the Heritage Motor Centre in Warwickshire. For further information visit: www.mpm2009.co.uk 20-22 The BWEA is holding its 31st annual conference at the ACC Liverpool. For further information visit: www.bwea31.com 29-31 The inaugural Internal Security India

conference takes place from 29-31 October 2009 at the Pragati Maidan, New Delhi, India. Further information can be found at: www.internalsecurityindia.com

November 11-12 Manufacturing Technology 2009 is being held at the SECC in Glasgow. For further information contact Ian Valentine on 01784 880890 or ianv@etes.co.uk 12 The Manufacturer of the Year Awards and The Manufacturer Directors Conference 2009

is being held at the Tower of London hotel. To book your place at the awards contact David Alstin on 01603 671307 or d.alstin@sayonemedia.com. For further information on the conference contact Jane Gray on 0207 401 6033 or j.gray@sayonemedia.com

12 The Manufacturing Advisory Service is holding a Manufacturing Conference 2009 focusing on innovation in product and design and technology at Rudding Park, Harrogate. For further information or to book contact Karen Dowd on 0113 368 5264 or karen.dowd@mas-yh.co.uk 19 The Technology Strategy Board will be exhibiting at Science & Innovation 09, to be held at the QEII Conference Centre in London. For further information, visit: http://www.govnet.co.uk/science/ 23-24 Software company SAP is holding a UK &

Ireland Group Conference at Manchester Central. For further information visit: http://www.sapusers.org/ conference2009/ or contact charlotte@ama-limited.co.uk

23-24 Technology World09 is being held at the Ricoh Arena in Coventry. For further information visit: www.technologyworld09.com

The Office for National Statistics (ONS) released their Index of Production statistics on August 5 which showed the first manufacturing expansion since March 2008.

Between May and June, manufacturing output increased by 0.4%. In the last month, output increased in nine of 13 categories, decreased in three and one remained flat.

The most significant increases in output were 4.1% in the transport equipment industries and 2.5% in the electrical and optical equipment industries. The most significant decrease on the month was 3.6% in the chemicals and man-made fibres industries.

Barclays Commercial Bank has welcomed the figures but cautioned that there is still a long way to go for UK business. Following the release, Graeme Allinson, head of manufacturing, transport and logistics at the bank said: “In the past few months we’ve seen production pass its worst point. However, experience tells us that there is no smooth road to recovery.

“Although today’s figures indicate a healthy move in the right direction, businesses that we talk to on a daily basis are watching for more long term trends around these statistics, pointing towards a sustained increase in demand. The general uplift in the economic markets parallels the positives coming out of the manufacturing sector and the real test of whether these figures are taking things in the right direction will be seen in the long term, not in the here and now.

“An interesting time lies ahead in determining the true picture of the manufacturing sector from production statistics. The continued likelihood of extended summer closures over coming months may see a fall in production levels, but the overall effect of this will be leaner, more effective businesses when they return,” says Allinson.

Overall for the second quarter of 2009 however, manufacturing output experienced a 0.2% decrease compared with the previous quarter and was 12.5% lower against the second quarter of 2008. Output decreased in seven out of the 13 categories and increased in six categories. The most significant decreases were 3.3% in the basic metals and metal product industries, 3.1% in the machinery and equipment industries and 8.6% in the coke, refined petroleum and nuclear fuels industries. The most significant increases during the latest quarter were 3.5% in the transport equipment industries and 1.1% in the paper, printing and publishing industries.

In line with the ONS figures, the most recent CIPS/Markit manufacturing purchasing managers’ index (PMI) is denoting an overall decrease in output. The PMI fell to 49.7, below the important benchmark of 50 which defines whether output has expanded or contracted. Analysts had expected a rise to 51.5. Despite the disappointing figures, a rise in the output balance from 54.5 to 55.1 and growth in export orders is cause for optimism.

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UK Appointments British American Tobacco Richard Burrows

Richard Burrows has been appointed a non-executive director at British American Tobacco. Burrows will become chairman in November, when Jan du Plessis steps down in the light of his own appointment as chairman of Rio Tinto.

Lockheed Martin UK has announced the appointment of Alan McCormick as vice president and managing director for Lockheed Martin UK - INSYS.

Lockheed Martin UK Alan McCormick

McCormick will take responsibility for the Ampthill based division of Lockheed Martin UK, succeeding Stephen Ball, now chief executive of Lockheed Martin UK. McCormick joins from Primagraphics Company, a subsidiary of Curtiss-Wright Controls, where he was managing director. Prior roles include working for Siemens Plessey and Raytheon Systems.

Manufacturing Insight Nick Hussey

Nick Hussey, non-executive director of SayOne Media publisher of trade magazine The Manufacturer - has been appointed as the new director of Manufacturing Insight.

Manufacturing Insight is an independent organisation set up by the Department for Business, Innovation & Skills, that will play a key part in helping to challenge and change public perceptions of the manufacturing sector. Of particular focus for the group will be a campaign in schools designed to generate enthusiasm for students to pursue careers in manufacturing.

Norbert Dentressangle has appointed Joe Fogg in a newly created head of sales position.

Norbert Dentressangle Joe Fogg

Fogg has held a wide range of operational, account management, commercial and business development roles with organisations including TNT and the former Hays Logistics.

Fogg will be responsible for seeking and developing opportunities with new customers and raising awareness of their comprehensive range of core logistics and value added services.

Heidenhain (GB) Neil Prescott

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Neil Prescott has been appointed managing director of the UK subsidiary of Heidenhain (GB), one of the world’s leading manufacturers of angular, linear and rotary encoders, digital readouts and CNC systems.

With 25 years at Heidenhain, Prescott — who was initially CNC applications manager before taking up a position as sales office manager — has replaced Nigel Smith.

ManufacturingAppointments UK luxury boatbuilder Oyster Marine has named Kjell Vesto as the company’s new operations director, effective from October 1.

Vesto has had a 30-year career with Finnish boatbuilder Nautor’s Swan covering a wide range of roles.

Vesto will be in charge of Oyster’s design, engineering and project management teams. He will initially focus on construction efficiencies at Oyster, product development and the delivery of yachts to customers.

Eoin Leahy has been appointed ABB’s sales manager for drives and motors in the Munster and southern Leinster areas.

Previously an electrical engineer in companies including Parsons and CEL International, Leahy has worked on a number of electrical design projects, ranging from lighting design to complete electrical supply projects for green field sites, and multi-storey building projects in Dubai.

Recolight, the specialist WEEE compliance scheme for gas discharge lamps, has appointed Martin Rose as its first business development manager. Rose, formerly UK sales manager of Valpak, has been tasked with developing stronger links with local authorities and retailers as Recolight seeks to increase recycling rates nationally.

Mike Turner, chairman of Babcock International and chairman of the Defence Industries Council of the UK, has been appointed a non-executive director of engineering group GKN plc.

Dezineforce, the global provider of web-based, ondemand engineering design optimisation, has announced a round of key appointments. Peter Kelly joins as vice president of sales, Richard Harding is promoted from services manager to vice president of technical services and Arun Muthirulan joins as vice president of marketing.

Kelly has over 15 years’ experience in senior sales positions with leading engineering and visualisation software vendors.

He joins Dezineforce after successfully leading a Northern European sales team at Parametric Technology.

Harding holds a degree in ship science from the University of Southampton. As a senior consulting engineer within their consultancy group he has provided innovative engineering solutions to a range of clients including Rolls-Royce.

Muthirulan has more than 15 years of experience in business strategy, marketing and project management, working in a variety of positions for large corporations.

The executive director of the National Skills Academy for Food and Drink Manufacturing has been named as the new chair of the Strategic Network of National Skills Academies.

NetSuite has unveiled Steve Sydes as its new EMEA managing director. The new executive appointment is aimed at strengthening the software vendor’s expansion into key international markets.

Justine Fosh will officially take the post in September, replacing outgoing chair Jean Llewellyn of the National Skills Academy for Nuclear.

Sydes joins NetSuite from Acal UK where he served for more than 10 years as managing director and a member of the board of directors.

RWE npower and E.ON UK has appointed Alan Raymant as the new chief operating officer for the companies’ nuclear joint venture.

Seat has appointed Sally Livingstone as its national fleet and business sales manager. Livingstone was formerly Audi UK’s key account manager.

Livingstone will report to the recently-appointed head of fleet and business sales, Nick Andrews.

Raymant is currently director of operations and asset management for E.ON’s distribution business in the UK and has extensive experience within the company’s generation business, including heading up its renewables portfolio.

Raymant is due to join the E.ON/RWE joint venture team in the new job next month.

International Appointments SAP Franck Cohen

Software company SAP has announced the appointment of Franck Cohen as chief operating officer (COO) of SAP EMEA, effective immediately. Based in Paris, Cohen is responsible for ensuring that SAP EMEA operates in the most lean, simple and flexible manner possible. Cohen has over 22 years of experience in the enterprise resource planning (ERP) software industry, including three years at Lawson Software.

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

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JustJones The lean manager Where

can you experience what it feels like to be a lean manager and where can you learn about the personal and organisational changes involved in leading a lean transformation? Listening to the stories of pioneers can be inspiring and visiting lean examples can open your eyes. But for most people that is rarely enough. Some of the toughest lessons are learnt from things that did not work.

We are all familiar with the lean tools and analysing and mapping value streams. More and more organisations are recognising that the crucial missing element that makes lean really successful is management. If managers don’t recognise the need to change the way they work and the way they lead then lean is doomed to fail. So the question is of utmost importance.

The answer is to be found in the most unlikely place!

Over the summer I read several books. But the one that stood out head and shoulders for me was The Lean Manager by Michael and Freddy Balle. I read it from cover to cover without stopping, even getting up in the middle of the night to read it! Even though I had read some of the earlier drafts!

It tells a compelling story that I think every plant manager will relate to. A new lean CEO arrives and threatens to close the plant for very good reasons — costs are too high and they let their customers down on a regular basis. But the plant manager rises to the challenge and gradually wins the respect and support of the CEO to turn the plant round. But he has to learn to do it himself.

The novel is a great device and worth reading for the story alone. However what makes this truly powerful and will make you read it again and again is the wisdom and experience that lies behind it. Scattered throughout are nuggets of gold, really useful checklists that summarise the different aspects of lean management.

Separate thinking and doing

This book is the first really comprehensive distillation of the transformation methods developed over the years

by Taiichi Ohno’s own department at Toyota, which became the Operations Management Consulting Division, the guardians of the most advanced lean knowledge in the organisation. Freddy Balle, the father of lean at Valeo and several other French car suppliers, was a lifelong disciple of OMCD and he and his son

For many the only way to understand how to orchestrate a lean transformation is to get it wrong and learn from your mistakes.

Good lean management is often the missing ingredient.

and author Michael have been learning and reflecting on what they learnt from OMCD in helping many organisations since Freddy retired.

In a recent blog, John Shook reflected that probably the biggest breakthrough that Toyota made was in reversing Frederic Taylor’s separation of thinking and doing. Instead of deploying systems invented by staff experts, focus on the people actually doing the value creating work and the process that links them together. Toyota calls this “developing people before making products” and “respect for people”. In other words turning every employee into a scientist, using the scientific method to analyse and improve their own work and how they work with their upstream and downstream colleagues.

of deploying systems invented “Instead by staff experts, focus on the people actually doing the value creating work and the process that links them together

“

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

A process or value stream that is tightly synchronised so that value is created with minimum delay and waste actually makes all the interruptions visible. It can only work if the staff who are running the process are able to see what is happening so they can respond to it immediately and then over time improve the process by tracking the root causes of persistent interruptions.

This in turn changes the role of management from firefighting to mentoring the skills of their subordinates and guiding them to think about the right things in the right way. This is the beginning of a very different form of management.

What The Lean Manager does so well is to illustrate why each of the old mental models that we have in our heads about the way we manage do not work, including telling people what to do. It traces the stepby-step realisation that lean managers learn by acting their way into a new way of thinking. The lessons are tough but the results are very rewarding. This landmark book will, I am sure, become a valued guide for every lean manager. end

Have your say at www.themanufacturer.com

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Economics Fighting the paper trail Unnecessary regulations are frustrating at the best of times, but in the current recession the cost of illconceived regulation becomes very serious indeed.

Steve Radley, chief economist, EEF

In

recent years the Government has woken up to the need for better regulation. For some time we heard laudable statements about focusing attention where necessary but keeping burdens to a minimum.

Then we started to see action. The Better Regulation Executive (BRE) had backing from the highest level to drive through change.

BRE tightened the screws on impact assessments, the process by which departments justify new regulations.

They also set a 25% target for reducing the administrative burdens from existing regulations. Between 2005 and 2010 departments have been required to publish annual plans detailing how they will meet the targets.

As a result considerable energy was expended cutting back on the unnecessary and the inexcusable.

Admittedly the targets were confined to administrative burdens — filling out forms and record keeping — and many of the forms cut were little-used, but it did bring about a change in approach across government.

Last year it looked like government was going to take the next big step when it proposed introducing a system of regulatory budgets, a move backed by the opposition.

Each department would have been set a cap on the cost of new regulations that it introduced. If it wanted to introduce more regulations it would have to cut back on existing ones. It sounded too good to be true — and so it proved.

First everything went quiet. Then the announcement fell a long way short, with regulatory budgets off the agenda for the foreseeable future. It appears there was just too much opposition from a number of government departments and agencies.

But all is lost. The Government will publish a forward regulatory programme from summer 2009 and new simplification targets will be set for 20102015. Importantly the new targets cover not only administrative costs such as form filling, but also the policy costs — the changes businesses have to make to the way they work. There will also be a sub-committee of the National Economic Council to scrutinise planned regulations, and with the likes of Lord Mandelson involved this carries weight, though disappointingly this group has not yet met. Similarly, there has been little progress in setting up the new Regulatory Advisory Committee that is tasked with

improving the quality of government assessments looking at the impact of potential new regulations.

Europe can’t stop tinkering

But while some progress is being made in the UK, business will feel less optimistic about developments in Europe. Most business-focused legislation each year comes not from Westminster but from Brussels. There have been good European Union (EU) directives in the past, but we are increasingly seeing bad legislation emerging. The European Commission and Parliament have simply not got the better regulation message — they were put in place to legislate and that is what they will do. Worse still, some are saying that the problems that brought the credit crunch are proof-positive that better regulation is a failure. If regulation was too weak in the financial markets, it must be too weak everywhere.

Take health and safety. In the past there was some good legislation setting out an overall approach. But the European Commission is not willing to rest on these laurels and continues to produce draft directives dealing with ever-more esoteric subjects.

We had the Electromagnetic Fields Directive, setting out limits for restricting exposure to the fields around power cables and magnets. It was based upon an extremely flimsy impact assessment. The directive passed through the parliament and was due to come into force in 2008 — until it was pointed out to MEPs that it would effectively outlaw MRI scans and other medical procedures. Implementation was postponed to allow for a review, but it looks certain to return in a modified form. In the EU once a directive starts there is no mechanism to kill it off.

And now we have the Artificial Optical Radiations Directive, which deals with exposure to light and lasers, set to come into force in 2010 (for more on this directive, go to Steve’s article on www.themanufacturer.com) EEF continues campaigning vociferously against these directives and others waiting in the wings. But there is just not an appreciation of the importance of better regulation, let alone any system to see it implemented.

We need a change of approach in both the European Commission and Parliament, with the focus shifting so that new regulation is seen as the last, not the first resort. end

Have your say at www.themanufacturer.com

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The appliance of

science and policy, economics and technology management

The Institute for Manufacturing takes a holistic approach to manufacturing, linking communities in academia, industry and government to cutting edge research with real-world relevance. Head of the Institute Professor Mike Gregory wants it to become a global hub for disseminating a better understanding of global manufacturing that helps companies to work more efficiently. Will Stirling reports.

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The

brand new Alan Reece Building, a modern 4,400m2, £15m office building on the university’s West Cambridge campus for science and technology, seems like the ideal place for great minds to test groundbreaking ideas and devise the next 3D printing technique or bagless vaccum cleaner. It’s big, very modern, very low carbon, but also – extremely quiet.

Where is the clamour of metal bashing that one expects in a manufacturing institute? It is July and most of the students are away. But this is a university that embraces 21st century manufacturing, where policy, economics, technology management and sustainability are taught alongside – not in place of – milling and arc welding.

The Institute for Manufacturing (IfM), a division of the Department of Engineering at the University of Cambridge, was established in 1998 to provide a collaborative environment for the creation and transfer of new ideas and approaches to modern industrial practice.

Interview Professor Mike Gregory

This place is largely about putting manufacturing into a globalised context. For example, identifying companies’ strengths and weaknesses and where they fit in global value chains, providing scientific research to the private sector so they can compete and lead in, not merely keep pace with, global markets, and advising on manufacturing policy of overseas governments.

There is of course a commercial element, but there is that unmistakable sense here of a place driven by people who are enthused by their subject and are desperately eager to share and further their own knowledge unconditionally.

“Universities are traditionally divided up along disciplinary lines, which makes perfectly good sense if you want to go deep into particular topics,” Gregory says. “But industry is much broader than that — and people running many manufacturing businesses have to cover a whole range of topics from technology, through to managing the business through to understanding the role of government policy on how they operate,”

How did we get here?

Gregory, an affable, good-humoured man who is very articulate on his subject, with that twinkle of fierce intelligence behind a broad smile, clearly understands manufacturing’s big picture. He should do. He used to have a real job — his own words — in industry, in a series of engineering jobs at Webster & Bennett Machine Tools, Coventry, before returning to Cambridge as a tutor in 1975 and moving on through a distinguished academic career.

“What got me really interested in research was not so much very technical research but when I was in a company I thought ‘how do we make the right decisions about how to run our manufacturing, and what we manufacture?’,” he says. “Yes the individual machines matter, but surely it’s about how we join them together, how we manage the people, how we run the business for our customers.

At that time there wasn’t very much research in that area and the research was divided up; it was concentrated in metal cutting, or operations management, or economic policy but very little that crossed all the boundaries. So we

A close up image of an ultra high frequency RFID tag widely used in the retail and logistics supply chain

Image supplied by the Institute for Manufacturing

While IfM benefits from Cambridge University’s excellent academic standards, it is most remarkable in its core objective. IfM has a holistic view of manufacturing, where research and industry are very closely entwined. This in itself is not unique — many very good universities, in the UK and worldwide, collaborate very closely with the private sector. But IfM is unique in its purpose to bring together engineering, management and policy, with education, research and practice to drive the understanding of manufacturing in the global economy. “First of all, we educate generations of able students to be enthusiastic about modern manufacturing and to get stuck in,” says Professor Mike Gregory, head of the Institute. “Then, to do research that crosses boundaries; you can do research here in hard technologies but also on how best to understand the role of manufacturing in economies.

And thirdly to engage more with our friends in industry helping where we can and of course learning because a lot of the innovations made in manufacturing are made in businesses not in university laboratories.”

started by trying to develop new and more comprehensive ways of developing manufacturing strategies.”

Once he understood where the new products and technologies were going to come from, it evolved into thinking about technology management. “Then it becomes obvious that people are no longer doing things in one business, in one factory, in one country and that then evolved into how we understand global networks of factories and supply.”

Prime areas of research Sustainability, service as a product and emerging industries

There are three main areas which are currently particularly strong at IfM. Gregory stresses that the holistic understanding of manufacturing is a key reason for their development. “These areas build on our fortunate position of having people who really understand engineering and the hard technology production processes but also the management and policy”.

Sustainability is one. “How do we deploy what we know about manufacturing to make things with fewer resources, less energy in a way that is genuinely sustainable? Although there has been a great deal of conversation about climate change and having infrastructure development that is much more environmentally friendly, understanding how to apply these principles of manufacturing to make this sustainable industries is still in its infancy — so there’s a lot to do there. And to provide opportunities to inspire young people who see this as a really serious challenge.”

It is an appropriate pillar for IfM, as the building we’re sitting in has a 5-star BREEAM environmental rating, heated by a biomass boiler and uses a large proportion of natural building materials.

Service and support is the second area of strong activity. That might sound surprising for an Institute of Manufacturing, but IfM prescribes to the broad definition of manufacturing. “That is understanding markets, design, production, distribution, service and reuse or recycling,” says Gregory. “Service is an integral part of that broader definition and big engineering companies

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now have a very aggressive service model in the way they do business — Rolls-Royce of course everyone’s knows about — but smaller companies are moving very rapidly to understand how to sell their business as a service rather than just the product. We’re working with a number of companies to help them, and ourselves, to understand that migration.”

interfaces, through to how do we design products using this technology, through to how do we build the supply chains for this kind of product, through to what kind of business model are we going to use to realise that idea.

EIP is about joining those things together. We hope that we can accelerate this process from the ideas into wealth-creating industries.”

The third area is emerging industries. IfM set up the Emerging Industries Programme in 2008 to try to convert real wealth-creation from merely good ideas.

“One of the classic problems we’ve faced in the UK is how to translate our science and technology, which is reasonably good, into wealth-creating industries. And so we’ve set up our this programme, with support from the Engineering and Physical Sciences Research Council, to try and bring together the separate bits of expertise that go together to create an industry; from the basic research and understanding the research

Identifying your link in the chain

Bio: Professor Mike Gregory Mike Gregory is head of the Manufacturing and Management Division of the University Engineering Department at Cambridge University and of the Institute for Manufacturing (IfM).

Following an early career in industry he was the founder member of the team which established the Manufacturing Engineering Tripos, a senior undergraduate programme covering marketing, design, production, distribution and service and very close industrial involvement. Subsequent developments in research and industrial engagement reflected this broad view of manufacturing and led to the establishment of the IfM in 1998: linking science, engineering, management and economics and integrating education, research and practice.

Mike Gregory’s work continues to be closely linked with industry and government and he has published in the areas of manufacturing strategy, technology management, international manufacturing and manufacturing policy. He directs, along with senior colleagues, the Institute’s EPSRC Innovative Manufacturing Research Centre.

External activities have included membership of various government and institutional committees. He served as executive director of the Cambridge MIT Institute from 2005-2008 and is currently Springer Visiting Professor at UC Berkeley. He also chairs the UK Manufacturing Professors Forum and is a member of the UK Government’s Ministerial Advisory Group on Manufacturing.

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As a member of the Ministerial Advisory Group for manufacturing that advises government on industrial strategy, he made several key recommendations for government’s last Manufacturing Strategy, New Challenges, New Opportunities (see page 24) in September 2008. One of these was to develop a method to promote the understanding of global value chains.

Government is keen for UK companies to identify their place in global value chains — where they best sit in the design, development, production and distribution of end products that have global supply chains. This is a core part of IfM’s work, and there are two parts to this: “Our industry links unit works with a lot of companies in the UK to help them understand their strengths and weaknesses,” Gregory says. “I suppose we’re all the same; we do our job, we ‘stick to our knitting’ and do not always reflect on the breadth of things we have learnt to do. IfM likes to work with companies who think, for example, they’re terribly good at making a particular product, but it turns out they have other values to offer.

One company who make audio equipment I have in mind had marvellous production facilities but it turned out the thing their customers most valued was their customer support and their excellent dealer network. If you extend that, you really want to know what you’re good at but also where are the opportunities to deploy that capability. That means having some understanding of the requirements in the markets where you’re seeking to work.”

This links to the work UK Trade and Investment is doing to try to understand the supply networks, particularly in India and China at the moment, and bring knowledge of that back into the UK so that companies, once they’ve understood what their strengths are, can see how best to apply them. “I actually think this is very exciting. It’s actually much easier now for small companies to operate globally than it would have been say 20 years ago.”

How can my company benefit from IfM’s work?

I was keen to know how IfM benefits UK manufacturers directly, on a one-on-one basis. This prompted the professor to emphasise its global reach - IfM doesn’t work exclusively with UK companies. “We actually think it’s more beneficial to UK companies if we have a broader view and we know what is going on around the world. Not least because the way that industry works today is not having one great big factory in Birmingham or Sheffield — as wonderful as they are — but it is multiple smaller factories, organised and distributed around the globe and a lot of people in manufacturing are contributing in some way to some local supply chain for products that may be finally sold anywhere in the world, or for products that are sold here which are made from components created anywhere in the world. It’s very important for us to be global in our outlook and I think that’s the best way we can serve our many good friends in the UK industry.”

Interview Professor Mike Gregory

There are three primary ways in which IfM works closely with companies.

2. Sustainable manufacturing: If companies are interested in sustainable manufacturing in their business, they can commission IFM to research an area. “Commonly we would draw similar companies together to set up a consortium with a subject of mutual interest to a group of companies. That would be more economical for them and they learn from each other as well as from us.”

3. Consultancy: For products, ideas or methods which are fairly well advanced, IfM’s consultancy service is available to augment results.

“We think we have a rather distinctive offering, and companies seem to quite like our style, which is more collaborative — can we solve this problem together,” says Gregory. “A lot of industry practice is about let’s make sure I understand best practice and apply it, and there are lots of people who can help with that. We are keen to work on things where we don’t quite know what the answer is — for example like how to develop your international network, who you should be working with, what should you make where, how to understand the partnerships. Helping companies develop their technology strategy for example, helping them to work with each other to understand their local strengths and capabilities and how they can deploy them to best effect.”

A time of huge opportunity

The work sounds highly commendable and it is eyeopening to talk to someone with such a ‘blue sky’ vision of manufacturing and its place for the UK’s future. But do British manufacturers not face more challenges today that at any time in the last 30 years?

Mike prefers to talk about opportunities than problems.

“As the global networks of manufacturing become more diverse and more open it’s much easier now for a small company in the UK to access global markets — that’s a big opportunity. UK Trade & Investment is a good example of how well connected the UK is globally and as the pace of technological development and market demand heats up, then countries that are innovative and have new ideas, which we seem to be, are in a strong position. Of course there are challenges, there are a lot of other countries that are working very hard and very competitively. We sometimes have a rather downbeat view of UK manufacturing — I think this is a time of huge opportunity for us for all sorts of reasons, not least our research base, our innovative capability, our strong manufacturing infrastructure despite the fact that it’s not as big as it used to be, and our global reach.”

Five year plan

IfM has an enviable academic influence and a global reach with academic and industrial collaborations in 36 countries, and it is working with 170 multinationals on various projects. It is an impressive network; what is IfM’s medium term goal — world domination of the manufacturing academic community? “What we would like to become is really a place where people who are enthusiastic about manufacturing can come together — students, industrialists, scholars, consultants. People who are involved in manufacturing in any of those capacities do get excited about it, but traditionally there weren’t many places you could go to meet people

A Femtosecond titanium sapphire laser used in the direct maching of micro and nano components

Image supplied by the Institute for Manufacturing

1. Student projects: Senior students on IfM courses they would, as an integral part of their course, tackle real problems in real factories all around the UK.

from these communities, so I’d like to see IfM as a meeting place. I said earlier all the good ideas about manufacturing don’t come from university laboratories, they come from people who do it.”

IfM at a glance 240+ staff, researchers and PhD students 140+ undergraduate and postgraduate students More than 200 people taking undergraduate management options 1,000 attendees a year at IfM run external courses Research funding of over £4m per annum Collaborators in more than 30 countries Working closely with 170 multinationals with combined turnover of £70bn

“Manufacturing is it is a collaborative activity and this building is a place where all sorts of people from different backgrounds and disciplines can come together. The goal would be: if a Martian were to land in London, get out of the spaceship and say ‘I want to know about manufacturing, who should I speak to?’, people would ring up the IfM. And if they did that they would find an outfit which is very well connected globally, was linking education, research and management, and engineering, practice and policy. If you want to come and be enthused about manufacturing, you’d come here, and if you wanted to get an authoritative view on various aspects of manufacturing you’d come here. And maybe if you wanted to get a glimpse of the global situation in manufacturing you could come here – a distinctive hub of knowing what is going on in manufacturing and helping companies to work better and more efficiently.”

With a big picture view, background in industry and deep understanding of how the threads of global manufacturing knit together, Professor Mike Gregory is the type of person that, with whom backing it, UK manufacturing has a better chance of succeeding on the world stage. end

For more information on a range of events hosted by the IfM including workshops and breakfast briefings, go to: http://www.ifm.eng.cam.ac.uk/ service/events/centres.html

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1 2 T H

N O V E M B E R

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T O W E R

H O T E L ,

L O N D O N

On November 12th 2009 The Manufacturer welcomes readers to its annual conference event. To help manufacturers succeed in these troubled times and to arm them with the knowledge they need to succeed with agility in an uncertain future, our team of researchers and events producers have created an inspiring programme of presentations, workshops and debate sessions from a select group of exemplary organisations. This agenda will be headlined by some of the industry’s most prominent role-models. Individuals committed to galvanising support for a resilient and vibrant manufacturing future

Keynote and plenary participants include: Stephen Radley – Chief Economist & Director of Policy, EEF Responsible for EEF’s work on the economy and industrial policy Stephens role has made him intimately conversant with both the macro and micro-economic issues effecting the manufacturing landscape.

Stephen’s experience as an industry economist is has deep foundations in a career that has included roles as Chief Economist at the Henley Centre and four years in the CBI’s Education and Training and Employment Affairs Directorates

Julian Hunt Director of Communications, Food and Drink Federation Previously the award winning editor of the awardwinning editor of The Grocer Julian has 19 years experience as a business journalist focusing on consumer goods, the global packaging industry and the international shipping sector. He now orchestrates the FDF’s media relations and has an astonishingly well informed appreciation of the challenges currently facing food and beverage manufacture in the UK with an emphasis on policy development and industry impact.

Professor Mike Gregory, CBE Head of the Institute for Manufacturing, University of Cambridge Following an early career in industry Mike was critical to the establishment of the Institute for Manufacturing at Cambridge University an institution which is still shaped by his vision for a broader understanding of manufacturing.

Mike also now works closely with industry and government to promote considered policy formation and guide manufacturing strategy. He chairs the UK Manufacturing Professors Forum and is a member of the UK Government’s Ministerial Advisory Group on Manufacturing.

Charles Morgan Chairman Morgan Motors Following an exciting and often dramatic career in the media Charles Morgan has gone on to initiate a reanimation of Morgan’s manufacturing and design processes. He was responsible for the development of the hugely successful Aero 8 and AeroMax models and is now heading up the innovative new consortium collaborating on ‘The LIFECar Project’ for a low emissions sports car. I s an active advocate of strategic skills development for industry.

Pierfrancesco Manenti, EMEA Research Director for Manufacturing Insights, IDC Insights A senior executive with over 15 years industry experience in product management, marketing, business development, manufacturing operations and supply chain management consulting and solutions implementation, Mr. Manenti is a thought leader with strong focus on the business value of technology in manufacturing.

Allan Cook CEO, Cobham Plc. Aside from his role as CEO of the FTSE 100 aerospace and defence company, Cobham, Allan is also President of ASD, Chairman of the National Skills Academy for Manufacturing, a director of the Industrial Forum and the DTI Aerospace Forum, a committee member of the UK Ministerial Advisory Group for Manufacturing to name just a few of his commitments.

He is a dedicated advocate for the manufacturing industry who is resolute in his desire to secure a competitive and dynamic future based on pioneering skills and technology.

To book your place and for more information on the sessions and speaker’s go to

Four Streams to accelerate your journey to competitive excellence These streamed sessions focus on the areas which our research amongst the manufacturing community have shown us are key in your quest survive, sustain and stimulate your business- choose which sessions apply most closely to your specific needs and gain pragmatic, applicable knowledge.

STREAM 1 Your Supply Chain Throughout recession many organisations have learnt the hard way just how critical security of supply is to their ability to survive. This stream will show how to achieve efficiency, effectiveness and agility in your supply chain. We will also address the global supply dilemma, carefully considering where to manufacture to maximum benefit to your company and finally, taking a different perspective, we will raise awareness of your potential as a supplier- how can you think creatively around your product to take advantage of emerging industries that will play dominant roles in the future of the national economy.

Organisations presenting include:

STREAM 2 Your Customer The value of knowing your market and strategically nurturing customer relationships has never been higher. Learn how to rapidly respond to changing demand- streamlining engineering and design into your production strategy to create products that pinpoint customer needs.

We will see how to then take this specification to new levels through the latest approaches to service and support and crucially we will address how to lean up to deliver all this for the price the customer demands.

Organisations presenting include:

STREAM 3 Your Sustainability Involving a multiplicity of interpretations ‘sustainability’ has been a difficult issue for many manufacturers to approach. This stream will take a business sustainability approach that will clarify the integral role that environmental concerns and compliance issues have in a broader requirement for long-term business stability. We will look at the benefits of cutting waste, the carbon challenge, power options, efficiency benefits and impact on brand. How to incorporate the national move towards ‘high-value manufacturing’ into your business sustainability plans will also be addressed.

Organisations presenting include:

STREAM 4 Your Workforce The key-stone upon which success is built. The recession has demanded a heavy toll from employees within the manufacturing industry but ensuring the continued development of this group of individuals is crucial to any organisation’s ability to survive and compete. This stream will show how some organisations have safeguarded their present and their future by creating specific work cultures that facilitate efficiency and understanding the need for investing in skills -strategically managing their placement and development for maximum effect.

Organisations presenting include:

The Manufacturer Directors Conference and The Manufacturer of the Year Awards In association with:

www.themanu factu rer.com/directo r sco nferen ce

The

Midas touch

The UK volume car industry has had a punishing 12 months, and arguably only the intervention of the car scrappage incentive scheme saved it from a deep crisis. But Nissan Manufacturing UK has had, in the circumstances, a very good year. Trevor Mann, senior vice president manufacturing, Nissan Europe tells TM about their reasons to be cheerful.

Q

The Manufacturer: Production of the Micra and Note models are up and Nissan has had several good news stories lately. To what do you mainly attribute Nissan’s position?

Trevor Mann: We’re seeing the benefit of a couple of things, mainly the car scrappage schemes operating in Europe. Germany was first in November – Nissan reacted, and that increased volumes particularly on the Micra and Note. Italy and the UK followed with their schemes in the middle of May I think. How important?

If you measure success by keeping employment levels in the car industry, in manufacturing and the dealer networks, if you see success as taking old vehicles off the road and replacing them with new ones – yes the scheme has been a great success.* Everyone knows these are artificial stimulus packages. We must consider that these are temporary schemes, so we need to watch closely what is expected to happen when they terminate.

Q

Nissan Sunderland is building a new lithiumion car battery plant. Did the decision that you would get investment from Nissan and the other stakeholders surprise you?

There are no surprises when you are awarded new business – you have to earn it. Here in Sunderland we’ve had success for much longer than the last six weeks you mentioned, and what this plant has attracted in terms of new business in recent years has been very significant. We’ve had six model launches over about the last five years. We’re launching the new model based on the hybrid engine next year and we’ve got the investment to make the batteries for the new generation of vehicles. The significance is that, despite

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the climate, we can still attract that business because of the overall competitiveness here. Our competitiveness is based on our overall cost performance, but also our technical expertise in terms of having the ability to deliver these new projects.

Q

Did Nissan Sunderland compete against other Nissan plants for the battery business?

A number of options were studied, we had to go through a viability process and we were successful.

The full share of the initial investment is £200m, it’s the single biggest infrastructure investment this plant has made in 20 years – you might normally spend an amount like £200m on a brand new model, on supplies, tooling and things like that – this is infrastructural, it’s a new factory, new equipment, new processes, it’s a very significant investment. The UK Government has said that it will put together an appropriate package to support this. We are still discussing the detail but they’ve given their commitment to it.

Q

There are other notable successes. In July you won a contract to assemble a new petrol engine, which could create up to 200 jobs, and you were also presented with an award by the Lord Lieutenant of Tyne and Wear?

It was the Queen’s Award for Enterprise, which used to be the Queen’s Award for Export I believe. Companies awarded this have to demonstrate they have consistent and sustainable growth in export revenue terms for a three year period. About 80% of our output is exported to about 50 markets, mainly Europe including Russia and last year included Japan, also to countries like Mexico and Chile.

Specialfeature Nissan Europe

Q

The car industry in the UK has suffered heavily, yet Nissan has fared comparatively well. Can you explain what Nissan UK has got right that other companies have not?

Basically we’re continuing with fundamental parts of our long term strategy that we believe are important.

We’ve put significant investment in new models, our new Murano Bronze and further expansion of our light commercial vehicles. We review the market to make sure we’re pursuing the right strategy – as a company we put a stake in the ground a couple of years ago that we wanted to be global leaders in zero emissions mobility, therefore we believe in continuing with our electric vehicle strategy.

When will the first fully electric Nissan cars roll off the production lines in Sunderland?

That’s not decided yet. The first generation electric vehicles will come off the lines in Japan in 2010. It’s likely the first electric [Nissan] vehicles to be built in Europe will be produced in 2012, but it has not been decided when. There’s a good chance for Sunderland but we just have to try hard and wait and see. As always in a competitive marketplace we have to compete against others who would also want to have that factory and build those electric vehicles.

the last quarter of 2008, we “From watched the market very closely and we implemented short-time working from October last year. We weren’t sleeping

“

Q

Q

The automotive supply chain in the northeast was clearly affected by your scaled down production at the start of the year. How have increased sales of the Micra and Note and the news of the battery plant affected them – for many this year will have been touch-and-go?

It’s not just our very local suppliers in the north-east, there are a lot of distressed suppliers throughout Europe because the overall industry volume is down.

In particular vehicle segments it is heavily down —the large, less fuel efficient vehicles are struggling. We have been fortunate in having kept a reasonable level of [production] volume. We reacted at the beginning of the year to the market fall which we fixed rather quickly, we managed to explain to our suppliers that we were right-sized and that we still had a viable business. The suppliers around us are doing ok, they’re keeping their heads above water.

We’ve developed a very close relationship with our suppliers over this period. They can’t survive without us but likewise we’d struggle to survive without them in the shorter term. So we need to work together and we were in very close communication with them at the start of the year to explain what we were doing, when we were doing it and how we were positioning ourselves and obviously they took pretty much the same decisions as we did. We made decisions to ensure that we had viable operations here in the North East to manage in a much smaller marketplace.

Q

You attribute your resilience mainly to intelligent forecasting of output and the market collapse?

From the last quarter of 2008, we watched the market very closely and we implemented short-time working from October last year. We weren’t sleeping. The market turned off very quickly, but again the effect

was different market-by-market, and as a net exporter we had to try and get our arms around each of the individual markets. Our inventory in finished vehicles was back in complete control by February, and we are being very prudent in terms of forecasts .

Q

Where do you see European car production levels in 12 months time? What types of car do you expect to see more of?

The overall market is down about 25 per cent. We expect it will be much smaller and cleaner vehicles that will do well. Overall the industry is dynamic and it will react to that, both in terms of its manufacturing output and technology and the choice of vehicles it will produce. That’s not a Nissan thing – there are lots of other good manufacturers reacting to make sure their businesses will survive. end

*[Figures released by Department for Business, Innovation and Skills in mid-August show that car orders under the Government’s scrappage scheme with had reached 154,927, over half the target total]

Have your say at www.themanufacturer.com

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New Challenges, New Opportunities – A new understanding?

The Government’s redrafted manufacturing strategy was launched one year ago to some acclaim — a more sectoral approach that wasn’t embarrassed to pick sectors on merit. One year on, has it passed the test?

The

Government’s manufacturing strategy Manufacturing: New Challenges, New Opportunities released last September led with a quote from Prime Minister Gordon Brown: “…for this government manufacturing not only has been, but remains and will always be, critical to the success of the British economy…”

Many would argue that, contrary to the PM’s words, policy for manufacturing has played very much second fiddle to that for the service sector, particularly financial services, during a New Labour tenure spanning 12 years.

As the floodwaters of the financial crisis rose in autumn 2008, the potential of industry to rebalance the economy was emphasised with the release of New Challenges, New Opportunities — henceforth referred to as MS08 or the Strategy. The review addressed the need to respond to global changes in manufacturing by focusing on five key pillars: Global value chains and the fragmentation of production Accelerate the spread of technology exploitation Intangibles such as design, branding and R&D Investment in people and skills, and The move to a low carbon economy

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A change of tack

Government launched its original manufacturing strategy in 2002, which identified seven critical success factors including macroeconomic stability, investment in capital equipment and processes, science and innovation, best practice and more.

Important services were established as a result, including the Manufacturing Advisory Service, the Technology Strategy Board and the National Skills Academies. This paper was reviewed and expanded in 2004. In 2008 a redrafted strategy was launched that took elements of MS 2002/2004 with new objectives and shaped them to address the perceived needs of manufacturers in a global economy.

Government strategy for some 30 years, beginning with the Conservatives, had been an enabler-based strategy, focused on creating an environment in which business including manufacturers could, supposedly, flourish, while government remained ambivalent about which particular sectors thrive. The focus was to provide “skills”, a competitive infrastructure, an R&D intensive environment — things to create an exciting and conducive environment for people to do business.

Government didn’t pick winners. “This was devoutly the sermon, when I wrote the strategy in 2004,” says Nick Brayshaw, recently retired chairman of the CBI National Manufacturing Council. “Suddenly since Lord Mandelson’s arrival they’ve heard the signal voices from this [2004] paper and the TUC, which said horizontal enablers are necessary but not sufficient.

Leadstory Advanced Manufacturing and picking winners You also need a vertical base, a sectoral strategy which looks at individual sectors and applies those enablers to them specifically, in order that they remain globally competitive.” Brayshaw sees this transition of thinking by government, manifested in the 2008 review, as a seminal moment in UK manufacturing strategy, that is “profound, and has been massively under publicised in the media — it is fundamentally important to industry.”

MS08 was followed by two further government reports on manufacturing. New Industry, New Jobs was released in April 2009 at the time when the two state departments, for Enterprise and Regulatory Reform and Innovation, Universities, Science and Skills were merged to form the Department for Business, Innovation and Skills. The Low Carbon Industrial Strategy followed in July. Most recently in July, government pledged £151m to what it calls Advanced Manufacturing.

One year on from launch, what is the evidence that government is applying this combined enabler- and sectoral-based matrix to tackle issues of a global economy, and are its forms of support addressing manufacturers’ real needs?

Realising overseas opportunities

The report said: UK Trade & Investment (UKTI) will allocate additional resources to target a package of new support for 600 UK companies of all sizes to identify manufacturing value chain opportunities in India and China.

UKTI says that target is for the current financial year, as nobody had been appointed to address the value chain remit until this year. In May, Paul Calver, a global value chain specialist who has worked for BAE Systems and Cobham, joined UKTI to help deliver this mandate. At the time of writing he had directly supported 20 companies — a small dent in the 600, but commendable in the time available. “This number will increase significantly over the next few months,” UKTI says.

A large proportion of the work for manufacturers that UKTI has done in the last year is for the aerospace sector. Examples are its work to help companies identify opportunities with the large C919 aircraft programme undertaken by China’s aircraft maker COMAC and the facilitation of a meeting between the Minister for Trade, Business and Investment Mervyn Davies and the new chairman of Hindustan Aeronautics at the Paris Airshow in June.

Support for aerospace was reinforced by the £151m disseminated recently for advanced manufacturing.

Specifically, Rolls-Royce was allowed access to three of the pies on the table. The aeroengine maker was given £45m towards an internal expansion programme and will head up two research programmes, including the Samulet R&T Programme, with a combined investment value of £85m. That leaves just £20m for other sectors, with the beneficiaries of the balance including the Printable Electronics Centre in Sedgefield which will get £12m and create 1,500 jobs by 2014 and a Centre of Excellence for silicon design in the South West which will get £500,000.

No-one should begrudge a British multinational with comparative advantage in key global markets government support to further crystallise its advanced manufacturing edge. But when Rolls-Royce benefited from the lion’s share of the recent £151m Advanced Manufacturing fund, some in industry called for a level playing field. “[Government] has pumped over $1bn of repayable launch investment into the aerospace industry,” says Nick Brayshaw. “I’m not seeking to take money away from the aerospace sector and give it to others. But if there’s a logic that says you give money to a sector because according to the publicity it has high skilled jobs, its high value added and export-focused, then that logic applies equally to other sectors.”

Andrew Churchill of JJ Churchill Engineering and a member of the Ministerial Advisory Group on Manufacturing, agrees that focusing on aerospace is not wrong, “but it’s very hard to finesse this with Mandelson’s “backing winners, not picking winners” because there’s little evidential base thus far.” He points to the fact that the other candidates for the money and their applications were not made public. Churchill, whose company operates in the aerospace industry and for whom Rolls-Royce is a key customer, says: “They say we’re focusing on plastic electronics, low carbon technology, low carbon vehicles, advanced aero turbines — all of those are very meritorious; but how those stack up against each other in the allocation, and how they stack up against others that are not mentioned, is not clear.”

David Caddle, programme manager, Manufacturing Advisory Service South East, is very positive about the help his programme has had from Advanced Manufacturing. “This funding [£4m] will make a signinicant impact on MAS’s ability to support manaufacturers... by enabling us to provide wider strategic support as well as increasing the transfer of advanced manufacturing capabilities into SMEs in order to increase competitiveness.”

Beyond aerospace, UKTI says it is establishing a mentoring network, carrying out scoping studies, and planning UK trade shows for companies looking to enter the Chinese and Indian markets. It is also identifying opportunities in anti-counterfeiting technologies for the Chinese pharmaceuticals sector, harnessing wind opportunities in China, indentifying ICT (information and communication technologies) opportunities for UK SMEs in India and is creating a ‘Sustainable Cities’ business guide. See our online article at www.themanufacturer.com for a full list of value chain actions by UKTI. The review said: The Intellectual Property Office will take steps to publicise their newly produced guidance for UK companies on protecting and exploiting intellectual property in key emerging markets such as China, India and Brazil. The IPO says it has made real headway with explaining IP to business since MS08, and highlights its regional one-day seminars. Miles Rees of the IPO concedes that a smaller proportion of attendees than he’d like are manufacturers. See our online article at www.themanufacturer.com for details of the IPO’s work since Sept 2009.

Improving technology networks

In addition to a centre in South Yorkshire and the centre being built in Glasgow, the Strategy pledged a new Manufacturing Technology Centre (MTC) in Coventry which will have industrial scale pre-production and demonstration facilities, which could lead to £130m of investment in business-led applied research and its exploitation over the next 10 years. The Strategy Action Plan says MTC is due for delivery by the end of 2010. The plans for this centre were first announced in

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June 2008. Approval for the Coventry centre has not been granted, but a decision is expected this year.

Advantage West Midlands (AWM) and the East Midlands Development Agency will finance the MTC, but the size of the investment means it needs approval from the Central Project Review Group (CPRG), which approves Regional Development Agency (RDA) funding. This is an example of a disconnection between government departments. Having committed to the centre in June 2008, a year later construction still needs approval by another branch of government. An AWM spokesman said the RDAs have now submitted the final documentation, which will be supported with a presentation to CPRG on September 9.

In another commitment, MS08 declared that the Technology Strategy Board will invest £24m into research for central to high value added manufacturing. Here, government has exceeded its forecast. Announced in late July, the TSB is providing almost £75m for the two aforementioned aerospace research projects.

“We are implementing all of these recommendations and have made considerable progress in all of these areas,” says Louise Connolly Smith, senior partnership manager for Designing Demand. “Regions are extending DD contracts and are delivering to more businesses with a focus on the high impact growth services. A recent evaluation shows that over £20 million turnover increase has occurred in companies completing design projects within the programme.”

The Design Council has published several complimentary case studies supporting the programme, although it is hard to assess the influence of MS08 on the effectiveness of DD since the Strategy launch — all of the case studies pre-date 2008. The Design Council says 60% of the companies going through DD are manufacturers, these include oven maker Aga, fuel cell developer Ceres Power and knife manufacturer Harrison Fisher. Aga and Designing Demand worked together to design new ranges which have allowed Aga to increase profits by 14% between 2003/2004 and 2005/2006, and increase exports by 38% in the same period, with sales of the redesigned ranges growing from £2m to £7m in four years. “The difference BIS has made is that the DD review highlighted that there should be a focus on the DD Growth Services withinthe regions, offering manufacturers more opportunity to receive support and access the programme,” says Design Council’s Paul Cannon.

Supporting skills

MS08 promised a new focus on skills which would see 1,500 new, high quality manufacturing apprenticeships.

These, in addition to 9,000 more Governmentsupported places announced in 2008 by the Sector Skills Councils, would increase the total number of manufacturing apprenticeships by over 10%.

Gordon Brown reiterated his commitment to this in January when he announced, on a visit to RollsRoyce’s aerospace training centre in Derby, that a £140m expansion will see 35,000 more apprenticeship starts across all areas of business compared with 2008, bringing the total number to over 260,000 apprenticeships.

Making the most of intangibles

MS08 said: the Design Council and Regional Development Agencies will implement the findings of the current review of the Designing Demand (DD) programme to increase penetration of the programme, helping to ensure the UK design sector has the skills required by manufacturers to compete in global markets.

The DD review inspired five key recommendations: 1) aligning with other Solutions for Business (SfB) products (the range of initiatives government’s Business Link has in place to equip companies with knowledge and skills; for example Train to Gain); 2) tightening of metrics and measurement; 3) implementing SfB branding; 4) the creation of a sustainable model for the Designing Demand programme and 5) raising the profile of DD.

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A new quango, The National Apprenticeship Service, was launched in April to administer the programmes, taking the emphasis away from the Learning and Skills Council, which was slammed in a report by the Innovation, Universities, Science and Skills Select Committee in July on misallocation of funding. At the start of August just 616 successful matches had been made through government’s apprenticeships.com, despite over 17,000 vacancies having been listed and £3m having been spent on its high profile, Sir Alan Sugar-led marketing campaign.

A spokesperson for NAS said the total number of new Apprenticeship starts in England for the first nine months of 2008/09 is 196,600. If this figure is correct, the 260,000 target for the year will be on track. NAS could not provide accurate figures solely for manufacturing, blaming the ambiguity over which industries manufacturing covers.

Steve Radley, chief economist at the manufacturer’s organisation EEF, says that confusion is currently the

Leadstory biggest obstacle to the development of apprenticeship plans. “Another commitment was to larger companies to supply apprenticeships to work with their supply chain — there’s been some progress with this,” says Radley. “But generally there is much more uncertainty about funding for apprenticeships, which has already been reduced to include only adult apprenticeships meaning there is uncertainty for the younger, more traditional age group. This is a good initiative being clouded by uncertainty over funding.”

engineering to UK wealth generation and there’s an urgent need for a national hearts and minds campaign that will help develop the pipeline of talent needed to secure industry’s future.” She adds: “With many competing priorities, we hope that the government can deliver fully on its plans for Manufacturing Insight and we look forward to learning more about this crucial initiative.”

But it is the skills an apprenticeship provides which are important and not simply the job. “No-one can predict where the economic cycle will be in four years,” says Radley, “but if you look at the skills needs in manufacturing even now, if you’ve passed a high quality apprenticeship the chances are that your job prospects are strong, if not with that company but another one.”

Recent news to surface on skills provision is that Peter Mandelson is preparing consultation material that will suggest handing responsibility for skills paths to the RDAs. This was met with mixed views with some, like EEF, fearing the goalposts of the desperately convoluted skills market would be changed again, confusing manufacturers further.

Changing the image of manufacturing

MS08 said: a new initiative, ‘Manufacturing Insight’, will focus on improving the public perception of manufacturing to ensure young people are aware of the exciting career opportunities available to them in the sector.

BIS targeted the launch of Manufacturing Insight by the end of 2009. An announcement about its roll-out had not been made by the end fo August, but BIS announced the appointment of Nick Hussey as its director on September 1. No official announcement has been made about the body’s formal mandate as this article went to press.

The programme “will have its work cut out” says EEF’s Radley. “There are positive things to say about manufacturing but it’s a sector that has lost many jobs in the last 12 months. The audience is teachers, parents and schoolchildren so it’s harder to get a positive message across in such a climate.”

The Manufacturing Institute (TMI), which delivers the government funded MAS contract in north-west England, runs the Make it in Manufacturing image campaign (www.makeit.org.uk) that is helping to attract young talent into the sector. Part of this involves bringing local manufacturers into schools to set pupils the challenge of structuring their own manufacturing company and making products.

The idea, says TMI’s Nicola Eagleton-Crowther, is to ‘”dispel the many myths and negative perceptions that young people and their influencers have about manufacturing and promote the sector as an exciting and rewarding career destination. The credit crisis has underlined the critical importance of manufacturing and

Seizing the low carbon economy

This is the basket that government has pledged most of its eggs over the last year, in terms of proposed commitment.

The MS08 review pledged that a low carbon industrial strategy would be launched this year to address the challenges facing manufacturers as they try to reduce carbon emissions as well as the significant opportunities made available by investment in energy and a shift to a low carbon economy. BIS launched the Low Carbon Industrial Strategy (LCIS) in July.

It included the breakdown spend of £405m put up for advanced green manufacturing in April’s Budget.

This included £60m for wave and tidal energy research including up to £9.5m investment in the Wave Hub subsea socket off Cornwall, £15m investment for a Nuclear Advanced Manufacturing Research Centre, £10m towards an electric vehicle charging infrastructure, and £120m for offshore wind projects.

These pledges are welcome, and there are some robust amounts here, but while it is too early to assess how this money will be spent, some budgets seem inadequate given the size of the task. For example, the £10m budget for electric vehicle charging seems likely to cover little more than the feasibility study. MS08 said a new Office for Renewable Energy Deployment will be established to address barriers to renewables deployment including helping to develop the UK

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supply chain. ORED indeed commenced operations as the low carbon strategy was unveiled in July. On how MS08 has fulfilled it nuclear remit thus far, see the online article at www.themanufacturer.com.

Daniel Guttmann, a manufacturing expert at PricewaterhouseCoopers, praised government’s low carbon efforts. “The development areas that were highlighted in the recent Renewable Energy Strategy and the Low Carbon Transition plan are good news for the UK and represent a mix of technologies at different stages of development.”

Where government inertia is of concern though is, for example, the Vestas debacle, where the Danish wind turbine maker pulled out of the UK this year blaming tortuous red tape in the UK onshore wind energy planning process. “At the mature end, offshore wind presents a big opportunity for UK manufacturing,” says Guttman. “But the recent withdrawal of Vestas from the Isle of Wight was a setback. While a system of feed-in tariffs would be a proven, yet expensive, way to stimulate growth, the actions government has announced to create a more stable investment framework should go some way to improve confidence in UK wind.”

Some do not share his optimism. David Sharman, managing director of Ampair, a UK manufacturer of small wind systems, says of the LCIS: “They launched it and

The Manufacturer half page AW.indd 1

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immediately walked into the problem itself, when Vestas shut its UK plant down. Until then the low carbon strategy was little more than a glossy brochure. Vestas was a rude wake-up call — ministers have been running around since then saying ‘right, we’ve actually got to deliver this thing.’”

What now?

Articulating the timescale

A review of the last 12 months shows that government approach to manufacturing has changed emphasis, from a pure enabler-based model for broad business to one which names and targets sectors with comparative advantage. On balance, several areas of the Strategy have made real progress since launch; the global value chain work and overseas missions being done by UKTI, promoting the benefits of design via the Designing Demand programme, and the fact there is a formal Low Carbon Industrial Strategy now, even if the task it faces on the ground is daunting, are some.

Other parts — such as the Coventry manufacturing technology centre — have been slow out of the blocks, Manufacturing Insight and Advanced Manufacturing need more articulation and the apprenticeship programme faces recession-related challenges.

EEF’s Radley points out that recession altered the priorities of MS08, and the challenge for government

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Leadstory is to produce short term relief while articulating and sustaining medium term strategy. “Take global value chains,” he says. “We’ve had the commitment on the cluster mark very recently and that’s absolutely fine.

But in the short term it’s not going to register greatly with business because the global recession has caused major disruption to global supply chains.”

Several people expressed disappointment that the Strategy fails to clearly spell out government’s priorities for manufacturing expressed in the medium and long term. Which are the priority sectors of manufacturing and by what criteria, and what is the size and timescale of support? But however these policies were labelled, we will afford the policy makers a little slack in some execution since January because of the more immediate measures that needed implementing when the credit crisis spilled beyond the confines of inter-bank lending; the car scrappage scheme, the Credit Insurance Top Up Programme and the Automotive Assistance Programme bumped elements of MS08 down the ‘to do list’. The reprioritisation of policy is true more for industry than government at the height of the recession.

Calls for clarity and timings of an industrial strategy were echoed by the Defence Industries Council on September 1, which published two reports detailing the vital nature of the defence industry to the UK economy and called for government commitment to a formal Defence Industrial Strategy.

Disconnected departments

Aside from the way they are presented, there is one major snag in the way government executes manufacturing strategy — the disconnect between BIS and the Treasury. “[The Treasury] does its own thing and whoever the Chancellor happens to be is not prepared to let other departments affect his fiscal policy,” says Andrew Churchill. “A joined-up approach to tackling the recession and promote manufacturing, but with the Treasury and Her Majesty’s Revenue and Customs left out, presents a big problem.”

He points to government’s credit insurance top-up scheme introduced in the Budget. The cost at 2% proved too expensive, a point overwhelmingly made by businesses in a recent survey from Whitehall to measure the scheme’s effectiveness. Government had to change the scheme last month to halve the payment to 1% as well as increasing the upper limit from £1m to £2m and remove the £20,000 lower limit in order to make the scheme more accessible.

This was the second amendment to the scheme — the first made companies that had had their cover reduced from last October onwards eligible.

Says Churchill: “If they’d really understood what manufacturing needs, i.e. the ability to respond quickly, many manufacturers would not have had to struggle through another five months of credit insurance problems. And it would not have occurred if HMT had been joined up with BIS.” He contrasts this with the Japanese approach. That is, all new legislation in Japan has to go through MITI — the Japanese equivalent of HMT — to check for the “unintended consequences” of state policy on business.

“It’s not always about gross misjudgements and decisions that politicians take,” says Churchill. “It’s more often about execution — the law of unintended consequences. We’ve had some rotten tax work over the last five years because it’s been rushed, e.g. the abortive attempts to overhaul venture capital, the taxation treatment of global head offices and the outflow of head offices from UK — head offices were not meant to offshore to Ireland, but you can’t always think it through. If you don’t have a joined-up tax planning system with your business policy generation you will inevitably run into these potholes.”

Picking or backing winners

Looking forward, the consensus seems to be manufacturing can only succeed as a credible, globally integrated part of the UK economy if government departments (namely BIS and HMT) collaborate more effectively, there is an unambiguous strategy disseminated into short, medium and long term parts and when money is awarded to industry sectors, the accountability and rationale of those decisions are made public.

“I don’t think we have as yet promoted this change of strategy, this focus on advanced manufacturing and the extent to which government is prepared to kick-start it,” says Brayshaw. “I remain open-minded as yet to the conviction of the follow-through. And I do have that issue about the breadth of sectors receiving support beyond aerospace.”

“The glue that has been missing from the different government departments is the same that’s been missing from these publications [strategies],” says Churchill.

“Show us the big picture, tell us that this is a key sector and why, and this is the evidence why we’re supporting it. Then let’s get the universities to encourage the skillsets for tomorrow and let us encourage companies to engage in that area — it’s that joined-up model that’s missing.” end

Have your say at www.themanufacturer.com

29

d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand d£mand Don’t discount d£mand in flat bank lending market The Royal Bank of Scotland addresses issues raised about the supply of credit to business and the willingness of banks to lend.

The

business media continue to feature comment about the role UK banks should be playing in helping UK businesses through the recession – particularly those banks which are in receipt of support from the UK government. As one of the banks in the middle of this debate, the Royal Bank of Scotland is keen to ensure that the facts are well understood and even more determined that UK businesses recognise that this institution, for one, is very much open for business. This can be quite challenging when every day seems to bring a new survey, which is quickly turned into commentary of all types, not all of which serves to illuminate the key issues.

But let’s start with a survey because it takes us right to the biggest of those issues, namely the vexed question of supply and demand. Deloitte’s second quarter CFO Survey, titled ‘No return to business as usual’. The findings suggest that UK CFOs believe the UK economy may be at a turning point, though that upturn, when it comes, will be one marked by ‘sluggish growth, a strong focus on cost control and tight lending conditions’. In other words, respondents are pointing towards issues of underlying demand for their products and services and to issues relating to the supply of credit, which they consider to be ‘scarce and expensive’.

It’s no wonder CFOs are citing demand as one of the culprits. The UK economy shrank by 2.4% in Q1, as much as during the whole of the 1990s recession, and 0.8% in Q2. This has been felt throughout the UK corporate sector, hitting construction and property early in the cycle as well as the service sector, which

30

makes up the bulk of the UK economy. In Q2 industrial production fell 0.7% in line with already published data and as expected there was a disproportionate drag from energy output with manufacturing down a more modest 0.3%. In our travels among our corporate clients, the dialogue over the last six to nine months reflects this environment with the comments from our customers focusing on cost cutting, curtailing capital investment, shelving investment plans and putting M&A activity firmly on the back burner (the latter has been a major driver of lending activity in recent years and effectively dried up in the first half of 2009 – although there are signs now that appetite is recovering).

Companies appear to be hunkering down and determined to reduce debt levels and strengthen balance sheets. The same is happening in the consumer segment – the whole economy has woken up to the fact that we all need to save more and borrow less. Banks are therefore facing a material downturn in demand for credit (though it is worth noting that, compared to previous downturns of this magnitude, business lending remains, in fact, relatively strong).

The Bank of England’s July ‘Trends in Lending’ picks this theme up, pointing to a steady downward march in lending to UK businesses by the major British banks, shrinking by an annualised 5.4% in the three months to May. It goes on to say that its regional agents are reporting very weak business investment intentions, which in turn reflected the outlook for demand.

At RBS, we have attempted to get under the skin of the demand issue by speaking directly to our customers regarding their investment plans for the near future.

When we asked our mid-corporate customers in May, we found that two thirds of them were not expecting to borrow any more money in 2009.

Addressing the unwillingness to lend

So what will cause this picture to change? One of the issues to consider is the confidence factor. Banks are facing the contention that weak levels of credit

Specialfeature RBS

To date at RBS we have led the field, for instance, in taking applications for the Enterprise Finance Guarantee (EFG) scheme, with over £213m worth of loans already agreed or in the pipeline at the time of writing. We have also confirmed receipt of £250m European Investment Bank funding, currently being passed on to UK business customers as part of £3bn of additional lending distributed via 12 regionallymanaged funds of £250m.

We have seen a significant level of demand for EFG loans from the manufacturing sector, particularly in North West England, North Wales and the Midlands, where it has accounted for approximately one-third of all the EFG loans we have provided to date.

As we talk to our customers, we are making it clear, wherever we can, that we are willing to lend more; we are finding that this can help build confidence and encourage those customers to bring forward business investment or corporate activity which they might otherwise have held back from. We are openly advising our credit appetite to customers to engage this debate. There also continues to be a debate around whether banks have simply changed their lending criteria. The fundamentals of our approach to assessing lending propositions in the manufacturing sector has not changed at RBS and the principle that we (and, I believe, most other major British banks) work to is one of long-term partnership, seeking to provide consistent support based upon a deep understanding of a company’s business strategy and management. This is not to say that banks do not need to ensure their risk management disciplines are world-class; they do and it is only right that lending decisions are made with all the thoroughness and diligence that the external risk environment demands.

What next?

We operate in challenging times, where soundbites dominate the headlines and where it is sometimes difficult to discern what is really going on. Certainly, at this institution, we are very much open for business and indeed actively out hunting for it! Indeed, one example of our lending activity is a £17.1m funding package the bank provided earlier this year to support the development of a joint venture recycling plant between MBA Polymers, Inc and Warrington-based European Metals Recycling Ltd (EMR).

The plastics processing facility was being developed in Worksop, Nottinghamshire and is expected to process 80,000 tonnes of waste per annum. Work on the plant has begun and is scheduled to complete early next year. A new joint venture company — MBA Polymers UK — has been established to run the operation.

The plant will specialise in the recovery of plastics from upgraded shredder residue. The upgraded shredder residue is a complex plastics-rich material, which is available after recycling metals from cars and consumer electronic devices.

It is estimated that more than 12 million tons of plastics from just end-of-life automobiles and electrical and electronics equipment are disposed of each year around the world. These plastics are commonly land-filled or incinerated at high economic and environmental costs because it is considered too complicated or expensive to recover and to separate them.

California-based MBA Polymers Inc is a world leader in recycling high value plastics from complex waste streams and end-of-life durable goods such as computers and business equipment. The company was established in 1994 and has designed and built two of the most advanced plastics recycling facilities in the world: one in Guangzhou, China and the other in Kematen, Austria.

we asked our mid-corporate “When customers in May, we found that two thirds of them were not expecting to borrow any more money in 2009

“

demand are associated with the perception that banks are unwilling to supply it. UK banks all recognise their role (and indeed responsibility) in stimulating growth, not only by being open for business but by being seen to be open. Indeed, the banks that are enjoying the support of the government have entered into specific commitments with the government to increase their lending to both the business and personal segments, with RBS to make £16bn and Lloyds Banking Group £11bn available to UK businesses. Taken together, this amounts to more than total market net lending in 2008 and should, in theory, comfortably address the supply issue. The key is, of course, turning this availability into drawn borrowing in a responsible way, which serves the interests of both customers and shareholders of the banks.

Headquartered in Warrington, European Metal Recycling (EMR) has grown to become the UK’s largest metal recycling company, handling more than 10 million tonnes of materials from consumers, industry and demolition works per year. The company, founded in 1994, has made several acquisitions to grow the business and now operates from over 100 locations worldwide.

Dr. Michael Biddle, MBA’s founder and President, says: “The MBA Polymers UK facility is an exciting development, as it expands our company’s global ability to deliver high quality resins from recycled plastic with a very small carbon footprint. With this expansion we are furthering our company’s goal of providing highperformance sustainable plastics on a global scale so that manufacturers can meet the consumer imperative for greater sustainability and environmental responsibility.”

Steve Lewis, senior director at RBS, says: “Both MBA and EMR are leaders in their respective markets and will bring considerable expertise to this venture. We are very pleased to provide the funding for the Worksop site and look forward to seeing it fully operational.” end

Have your say at www.themanufacturer.com

31

With a legislative framework that increasingly governs the minutiae of UK manufacturers’ operations, TM assistant editor Edward Machin investigates the recent statutory provisions covering corporate manslaughter, disciplinary procedures, and accruing sick pay which are set to affect the entire sector.

32

Leadership and strategy

Profit/loss;

lean operations; benchmarking; employee relations; ERP; logistics; product lifecycles.

For the manufacturing manager, feet on desk, wearily loosening his tie at the end of another recession-battered week, grappling with the obtusely-worded provisions of the Companies (Inspection and Copying of Registers, Indices and Documents) Regulations might understandably come a distant last on his ‘to do’ list.

However, given that legislative compliance governs virtually every aspect of his company’s operations, the manufacturer, regardless of sector, would do well to retain a working knowledge of those statutory changes which affect his day-to-day remit. Ignorance of the legal provisions which apply to his business can result in a fine without limit, not to mention an extended stay — life, in the most extreme cases — at Her Majesty’s pleasure.

Clearly, this is best avoided. By placing the understanding of legal compliance alongside those operational core competencies which have traditionally remained critical to successful manufacturing, therefore, companies of all sizes can effect a more robust corporate framework, improve employee relations, and avoid litigation, fines, and prison terms.

rare, given the need to demonstrate a ‘controlling’ or ‘directing’ mind at the company, a requirement that was close to impossible to prove in practice. As a result, between 1966 and 2006, 40,000 people were killed in employment-related circumstances, with only seven companies actually convicted of causing unlawful death. Given the widespread public anger over the Southall and Paddington rail disasters, for which prosecution of both companies failed due to the lack of a controlling intention, the new provisions — creating the offence of corporate manslaughter — are set to make it significantly easier to convict those companies on whose premises an individual dies.

The test case

The first prosecution under the amended law is currently being heard before Bristol Crown Court, with Gloucestershire-based Cotswold Geotechnical Holdings Ltd, and its director Peter Eaton, charged in relation to the death of an employee in 2008. The case will be of particular importance to smaller manufacturers says Ian Mayer, a partner at Mills & Reeve LLP, in that prosecution can be brought against a company and individual director simultaneously where: “The director is one member of a small executive team, and thus has a greater degree of control over the activity which was the cause of death.”

Lambs to the (man)slaughter?

In spite of the military conflicts arising globally on an almost monthly basis, it comes as a considerable shock for many employers to discover that there are more work-related fatalities per year than deaths due to war.

Indeed, research undertaken by the Chartered Institute of Environmental Health highlights that businesses’ understanding of corporate manslaughter is worryingly low, with 75% of manufacturers remaining unaware that if found guilty of a fatal accident at work, they could be subject to a publicity order — requiring convicted companies to publicise the conviction, specified particulars of the offence, and level of fine received.

Arguably more so than for any other sector, the possibility of casualties in the manufacturing industry is high, with heavy machinery, hazardous chemicals, and technically dangerous processes proving potentially lethal for those employed on the factory floor. Therefore, says Martin Webster of Pinsent Masons LLP: “The introduction of legislation governing the sphere of corporate manslaughter remains hugely significant for many in the sector, and is one which manufacturers must treat as central to their future operations, if, that is, they are not doing so already”.

Per the Corporate Manslaughter and Corporate Homicide Act 2007, which came into force on April 6 2008, an offence will be committed if: “A management failure by senior managers of a corporation is a substantial element in a gross breach of duty to take care, causing the death of employees or others.” In practical terms, a manufacturer will be liable where it owes a duty to take reasonable care of its employees’ safety, and the way in which its activities have been managed or organised amounts to a gross breach of that duty, and, ultimately, causes death.

While it was possible to prosecute a company under English common law prior to the Act, convictions were

Manufacturers are thus left to fend for themselves when seeking to apply the decision to their operations, and forced to detangle the relevant Employment Tribunal authorities, UK legislation, and ECJ decision in Stringer internally With companies liable to face limitless fines, coupled with the possibility of imprisonment, how do manufacturers avoid such fates? According to Gary Slapper, Professor of Law and Director of the Centre for Law, OU Business School: “The best way for a company to act responsibly and legally is for it to appoint a manager at senior level to oversee corporate health and safety.”

“So long as they act both reasonably and responsibly, should an accident occur — even one which results in the loss of life — then neither they as an individual nor their company will be prosecutable for manslaughter.

It is as simple as that,” he says.

In taking Slapper’s advice, manufacturers need not operate within a culture of fear, thus diluting those processes which have enabled their company to flourish. Provided that they ensure that both a robust framework for employee safety exists within the company and reasonable safeguards have been implemented, if a tragedy does occur, it must be put down to the fact that — regrettably, in work, as in life — accidents do happen, and that upon investigation, no causal link can rightly be established between the company’s sphere of activities and the death.

33

Employment law Whistle while you work

Less morbidly, but with arguably greater scope in its potential to derail the smooth running of business, exist the many permutations of employment law. As with any economic sector, manufacturing is no stranger to employer/employee conflict, with disciplinary issues, standard, holiday and sick remuneration disputes, grievance procedures and harassment claims affecting all but a select — largely by luck rather than design — few companies.

Practice. In seeking to minimise the negative effect of poor workplace relations, the Code provides practical guidance for employers when dealing with disciplinary and grievances issues, calling for both employers and employees to: (i) raise and address grievances promptly; (ii) act consistently and deal with similar cases in similar ways; (iii) carry out investigations to establish the facts prior to taking action, and; (iv) inform relevant parties at every stage and give them the opportunity to respond to allegations made by either side.

Coupled with the number of cases being heard before employment tribunals rising to 190,000 in 2008, research undertaken by the Forum for Private Business in July revealed that SMEs in the manufacturing industry are spending ₤320m annually implementing employment-related legislation. Unsurprisingly, and together with the provisions to which they must adhere in ensuring legal compliance, manufacturers will not be taken aback to learn that a raft of new employment statutes have been enacted in 2009.

Failure to follow one of the Code’s provisions by either party can result in a tribunal taking the failure into account when deciding the merits of the case, and, more significantly, adjusting its compensatory award by up to 25% — a reduction of 25% from the repealed SDRPs, which gave tribunals discretion to increase its payments by 50%. Despite such apparent clarity, for Katy Meves of Shoosmiths LLP: “Given the Code’s lack of prescriptiveness, there will be uncertainty as to whether it has been followed correctly or not. As such, we recommend that full training be given to managers and employees alike on the Code.”

For example, the Employment Act 2008 came into force in April, sweeping aside the old statutory dismissal, grievance, and disciplinary provisions — together with the short-lived statutory dispute resolution procedures (SDRPs) — and replacing them with the ACAS Code of

Quite why an Act intended to simplify the notoriously complex SDRPs should need further training remains a bone of contention for many manufacturers, with grievances now being permitted, for example, to be made orally instead of in writing. Indeed, there is real

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34

Leadership and strategy

potential for companies that are struggling to keep abreast of their existing legislative obligations to ‘wing’ the new provisions, representing a worrying indictment of the burdens placed on SMEs in particular, more than any explicit malice on the part of the manufacturers.

That being said, the manufacturers’ organisation EEF states that the ACAS Code: “Represents a significant advance on the statutory procedures, giving manufacturers an ideal opportunity to undertake a more thorough review of how they manage discipline and poor performance.” In this respect, employers are given a greater measure of advice by the Code with regard to each step of the grievance process, while serving to refine those disciplinary policies which companies should already have in place.

Whether these latest provisions enjoy a lifespan as short as the SDRPs, i.e. four years, remains to be seen. Unarguably, however, the manufacturing industry — blue chips and SMEs alike — will continue to be inundated with legislation delineating every aspect of their employer/employee relations. While recognising the onerous bureaucratic burdens that such requirements entail, “a robust framework for statutory compliance is nonetheless strongly advised,” says Lauren Harkin of Lemon & Co Solicitors, given that it will ultimately save manufacturers costly tribunal, litigation and court fees.

In sickness and health

While disciplinary and grievance procedures represent a significant aspect of the employer’s remit, the conjoined issues of holiday and sick pay are set to realise an equally big challenge for the modern manufacturer. Worryingly, however, research undertaken by the Employers and Manufacturers Association (EMA) in August found that 80% of employers in the sector are unclear as to the legislative stipulations regarding holidays.

Says David Lowe, an EMA representative: “We have known for a long time that employers are simply doing what they need to make the provisions work. It is inferred, therefore, that many of the manufacturers surveyed are not complying with the law to its truest and fullest extent.”

Central to the jurisprudence is Stringer and Others v Her Majesty’s Revenue & Customs, a case sent to the European Court of Justice (ECJ) earlier this year.

The issue turned on whether an employee can accrue and use annual leave during a long term absence due to illness, despite not actually working during the given period. Disputes of this nature are far from novel, says Siobhan Harding, Information and Policy Officer, Citizens Advice Bureau, originating with the implementation of the Working Time Regulations in 1998, which introduced the right to paid holidays but expressly prohibited the carrying over of statutory leave.

That being said, the outcome of the ECJ case — that ruled that a worker on sick leave continues to accrue statutory holiday during their absence — will have extensive financial implications for businesses across industry. To quantify, an employee who has been on

illness-related leave, and is thus unable to take the holiday they accrued by the end of the leave year, will not lose the accrued statutory pay. Similarly, if a worker has his employment terminated, he must be paid in lieu for any statutory holiday accrued which they have not been able to claim due to their being on sick leave.

Frustratingly, the Lords failed to delineate how the right to annual leave during an illness-related absence will work in practice, points out Finers Stephens Innocent LLP. Manufacturers will thus be left to fend for themselves when seeking to apply the decision to their operations, and forced to detangle the relevant Employment Tribunal authorities, UK legislation, and ECJ decision in Stringer internally.

The new provisions — creating the offence of corporate manslaughter — are set to make it significantly easier to convict those companies that kill A legislated future?

Given that they are not, for the majority at any rate, legal professionals, it is understandable that manufacturing executives are not earnestly glued to the weekly law reports. Indeed, for those firms without in-house counsel, keeping abreast of the multifarious statutory provisions that directly affect their operations can prove particularly difficult.

It is unlikely, however, that the sheer volume of legislation will cease to flow on their account, says David Woods of Greenwoods Solicitors LLP. As a result, manufacturers must avoid developing a culture of minimal fulfillment with regard to the implementation of statutory provisions. While it is understandably onerous to do so effectively, recognition of the necessity for full compliance will ensure that the manufacturing sector does not develop into an overly litigious industry, while simultaneously maintaining the optimum employee relations which remain so critical to successful business practice. end All attributed quotes are from law firms unless otherwise stated

Upcoming legal issues to be aware of 1. The final implementations of the Companies Act in October 2. A new medical ‘fit note’, to be introduced in early 2010 3. An Alternative to Redundancy scheme proposed by the CBI – date TBC 4. Proposed changes to parental leave legislation, for both men and women – date TBC

Have your say at www.themanufacturer.com

35

71% of employees would like to listen to music when at work More and more businesses are facing tough times in the face of the recession and morale in many businesses is running low. It is in these tough times that many businesses are turning to music to help them beat the economic blues.

M

usic has long been recognised as having an effect on people’s moods and many businesses now recognise that playing the right kind of music can enhance the environment they provide for customers and employees and create the right atmosphere to boost morale.

According to new research by MusicWorks which surveyed 2000 people working across various industries, 71% of employees would like listen to music when at work. Of those, 74% claim they would enjoy going to work more when music they like is being played.

If you haven’t tried music you could consider adding it to help achieve the desired atmosphere in your business. Getting the right music is essential of course and tailoring it to suit your business is important. Why not ask your staff what they’d like to hear whilst they work?

Some businesses offer music in certain parts of the workplace- for example music in the reception area is a great way to provide an instant impression for people visiting your premises and can keep them entertained while they wait. Similarly canteens, openplan offices, warehouses and production lines can all benefit with the addition of background music.

36

The MusicWorks research also revealed: • 85% say listening to good music at work makes them much happier.

• 85% say that the working environment is much more relaxed when good music is being played.

• 55% say they are less self-conscious about talking to other employees or customers/clients when music is played.

• 78% say that the working environment is much less formal when good music is being played.

Playing music does come with a small up-front investment, as all UK establishments using music require a licence from PRS for Music.

Published in association with: PRS FOR MUSIC Tel: 0800 694 7338 www.prsformusic.com

Let music increase your productivity

Licences from

£44 plus VAT*

Music can rapidly give the workplace new life, even in tough times. Ǧ On the factory floor and in the office, 77% of employees say that music increases their productivity.† Ǧ 1 in 3 say they are less likely to take time off sick if good music is being played.† Contact PRS for Music for the licence and permissions you need to play music in your workplace.* As the official non-profit licensing body for music creators, we turn 90p in every pound of these licence fees into the royalties legally due to creators, so they can keep on making music.

Call PRS for Music today on 0800 694 7338 quoting ‘The Manufacturer’, to get the legal permission you need.**

www.prsformusic.com *Applies to Tariff I for the use of background music in staff-only areas, at work and during breaks, in workplaces such as offices, factories, staff canteens and rest rooms where music can be heard by four or fewer workers. Prices are correct at time of going to press. VAT not included. Terms and conditions apply. ** A licence from PRS for Music is needed to play our copyright music. † MusicWorks survey of 2000 people, conducted in March 2009. See www.musicworksforyou.com.

Looks right, feels right

Collaboration in design isn’t just a nice idea – increasingly, it’s becoming essential as OEMs focus their efforts even more tightly. Ruari McCallion sucks his pencil, pensively.

38

Design and innovation

Barron, a partner in Barron Gould and a director of Texxus Ltd, observed not so long ago that, if British R&D investment had fallen to just 1.5 per cent (as was being reported) then it was ‘a disgrace’. Actually, it’s worse than that – it’s a threat to the country’s intellectual base. Competitor countries across the world are ready, willing and eager to get into the design space, in which the UK has excelled for decades. We have some of the world’s best design talent coming out of our universities – if in doubt, take a look at the design departments of large companies across the world. Peter Horbury is returning to Volvo Cars as vice-president, design, after a few years transforming the look of the products of Ford Motor Company in America – the only one of the Detroit ‘Big Three’ to have avoided Chapter 11 bankruptcy. Audi, Renault and other auto manufacturers across the world have British designers in key and influential positions. The look and feel of a product is at least as important as its function and quality – yes, there is an argument that it is less so, but if you have a wonderful product that looks awkward, people won’t buy it – or not in sufficient quantities to make it profitable. Fiat Multipla and Renault Vel Satis, anyone?

The idea of collaboration in design makes sense and fits in neatly with the established practice of outsourcing non-core activities. Using external specialists, within design companies, draws on a depth of expertise and breadth of experience that an OEM – in whatever industry – may not have, or may not be prepared to maintain. But there is another aspect to it, which is more likely to be the pattern in the real world, and that is of supply chain partners undertaking some of the work. They will focus on their bit of the whole and work to deliver it to the specification – and to improve it, bringing their own expertise and knowledge to bear. Obviously, this cannot go on in an uncontrolled manner but the practice is pretty well established – Catia seats at suppliers are the norm in the aero industry. Autodesk made its business on building collaborative design tools, and Adobe’s Acrobat 3D enables designs to be turned into easily-transferable pdfs. Teams of designers, from different parts of the world and different countries, can work on the same product simultaneously, refining their part of the whole while ensuring it continues to meet the core parameters.

Manx Engineering, on the Isle of Man, works with GE Aerospace, among other clients. It’s a relatively small company – fewer than 30 employees – but it has decades of experience with high-performance materials and it is able to leverage a lower cost base (compared with companies on the UK mainland) to maintain competitiveness. UltraMotive, which is headquartered at Leafield, near Oxford, is one of the world’s leading design consultancies specialising in the auto industry. It uses advanced IT to bring projects to rapid fruition and has worked on projects like the Aston Martin Vanquish, Volvo’s C70 and, famously, the RenaultSport Clio V6, which it turned from impractical concept to road-going production vehicle in less than 18 months.

But collaboration isn’t solely about headline-grabbing concepts: it’s routine. The challenge is managing it.

“Collaboration among organisations is helping to drive innovation in the marketplace. Examples include the development and design of new aircraft where each organisation is a specialist in its own area of design,”

industry really needs is a new “ What model which provides an integrated, holistic approach, which is both seamless, yet flexible, in order to capitalise on the defined project from conception to burn down

“

Linda

John Jackson, SO Direct

said John Jackson, technical director, SO Direct.

“There are more collaborative ventures as the major organisations are off-loading production, assembly and test into the supply chain and this means it is more difficult to control. Where a number of collaborators are involved, the dangers of project over-runs, time delays, and increased costs are compounded.”

According to Oracle, technology enables automotive companies to better communicate with the final customer, effectively serve them and understand their expectations, more closely match supply with demand, better manage price pressure, etc, etc.

Yes, indeed, but in the real world, these things don’t always happen and a key reason is that many existing systems are integration-centric, meaning that owners of those systems spend most of their time and money integrating individual applications and related databases, rather than focusing on the information the systems are intended to provide. Oracle says that its e-Business Suite is set up differently, that it has “…an information-centric architecture that leverages an already-integrated set of applications that all utilize the same underlying set of data”. Which is good, but

39

AUTODESK INVENTOR TAKES YOU BEYOND �D TO DIGITAL PROTOTYPING.

Autodesk® Inventor® software creates a single digital model that enables you to design, visualise and simulate your products. Inventor helps you to reduce product costs and get innovative designs to market faster. Learn how Inventor can take your designs beyond 3D at autodesk.co.uk/inventor.

AUTODESK INVENTOR

Model was designed using Inventor Image is courtesy of Engineering Center LTD, Russia Autodesk, Autodesk Inventor and Inventor are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. All other brand names, product names or trademarks belong to their respective holders. Autodesk reserves the right to alter product offerings and specifications at any time without notice and is not responsible for typographical or graphical errors that may appear in this document. © 2009 Autodesk, Inc. All rights reserved.

40

Design and innovation

One company that has been using collaboration effectively is Ford. It has worked with Schneider Electric, Loughborough University and its European machine builders for more than five years and has included coordinated UK and European research projects with a total value in excess of £4 million.

The reason for the collaboration is to develop a new approach to control systems engineering and the lifecycle support of industrial automation equipment. Up until this point, there was poor reuse of automation equipment, which can take up to two years to build but is required to last beyond 10 years. It can be costly for companies that have to change the system, for example when they are producing a new product. The collaboration has now made it possible for existing systems to be reworked, which leads to significant cost savings for industry. Key academic staff from Loughborough University have worked within Schneider Electric’s R&D and support facilities in the UK, France and Germany and at supply-chain companies, including Ford’s UK and US sites. They conducted a number of research projects on automation, including GAIN (Global Automation Infrastructure to Enable ServiceBased Engineering), which was research focusing on the application of Web-service technology for both real-time control and the seamless integration of business systems with automation systems. This project aligned with Schneider Electric’s core strategy of delivering collaborative control systems utilising both standard ethernet based technologies and web services to provide seamless integration and transparency through operation of automation control

Collaboration isn’t solely “about headline-grabbing

“

concepts: it’s routine.

The challenge is managing it

devices. Other projects focused on the definition of next-generation modular reconfigurable assembly machines; new methods for virtual commissioning, remote assistance and reconfiguration of machines; and the development of a range of new control devices.

The overall outcome of the collaboration is a lifecycle support environment for automation systems, from virtual engineering right through to practical control system realisation. The tools are ultra-lightweight and the systems used throughout the collaboration

projects were designed to be used by all engineers across the supply chain, in contrast to current systems, which are used only by CAD specialists.

The tools were fully integrated with the target control systems, which is different to traditional approaches that offered little or no practical integration between digital engineering and target PLC-based controllers.

The results from the initial trials and studies of the engineering and business processes at Ford estimate the potential for very significant cost savings. The amount of engineering resources is predicted to be reduced by 27 per cent, and the robustness of the first-cut system design is expected to increase by up

of designers, from different “ Teams parts of the world and different countries, can work on the same product simultaneously, refining their part of the whole while ensuring it continues to meet the core parameters

“

note the ‘already-integrated’ bit. If they are integrated, then users can analyse and use data collaboratively, rather than wasting time trying to collect it. Those who do are more likely to be successfully focusing on productive activities, rather than wasting time and effort on getting the software to work.

to 40 per cent. Overall savings of more than 20 million Euros per engine programme are expected.

Something more modest – but no less valuable to the participants – has been achieved by a KTP (knowledge transfer partnership) between Queen’s University, Belfast, and Macrete Ireland Ltd, a specialist in precast concrete technology. The company spotted an opportunity in developing an unreinforced arch that uses a non-corrodible polymer. With a skilled engineering KTP associate from Queens and access to the knowledge and resources at the university, the company developed a sustainable, flexible modular concrete block arch system for the widening or replacing of arch bridges with spans from three to ten metres. It is transported as a ‘flat pack’ and takes minutes to form once lifted onto site. It offers a cost effective, highly durable, aesthetic solution and provides Macrete with a major advantage in the bridge market. The project is expected to increase turnover and has had other benefits, besides, including improvement of the company’s quality management.

Industry cannot afford to take the single task, oneoff route, however; involving external agencies or contractors on a one-off basis only increases overheads, according to SO Direct’s John Jackson.

“What industry really needs is a new model which provides an integrated, holistic approach, which is both seamless, yet flexible, in order to capitalise on the defined project from conception to burn down,” he said. In short, industry has to capitalise on the opportunities offered by true collaboration and partnership – which will involve a level of information sharing that may be uncomfortable, for some. But that is a story for another day. end

Have your say at www.themanufacturer.com

41

£

£

Switching to SME status

triples tax benefits Changes to the R&D tax relief scheme for small and medium enterprises can allow companies to triple their tax benefits and provides access to cash, say tax consultants at Ernst & Young.

Research and Development (R&D) Tax Relief

Thousands of companies every year use the UK’s research and development (R&D) tax relief scheme to help them develop and improve technology that reduces costs, increases quality or leads to new or improved products, processes or services. Claiming R&D tax relief can provide additional funding for R&D and help companies remain competitive by reducing the tax bill and improving cash flow.

SME regime broadened

Depending on the size of the company, R&D tax credits can be claimed under either the small and medium sized enterprise (SME) or large company schemes.

Recent changes to the SME R&D tax scheme mean that some large companies have been able to convert to SME status. These companies may be able to triple their tax benefits (and potentially receive cash credits), which is particularly important in today’s economic climate where companies need to take advantage of all the benefits available to them to help them to survive the downturn.

However, many manufacturing companies are overlooking this worthy incentive as they do not appreciate just how broad the definition of R&D for tax purposes is (R&D has a specific statutory meaning for tax purposes that is not the same as the commercial meaning of R&D ). Many manufacturing companies are likely to be undertaking some level of eligible R&D work, which will entitle them to make a claim.

This article discusses the changes to the SME scheme and the most commonly missed opportunities companies face when filing R&D tax relief claims

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What are the changes to the SME scheme?

A number of recent changes have been made to the SME R&D tax relief scheme:

1

Extension of SME R&D relief to midsized companies

£

The SME relief scheme was extended to include larger SMEs or mid-sized companies. Companies (or groups of companies) with up to 500 employees and either a turnover not exceeding 100m Euros or an annual balance sheet not exceeding 86m Euros, may now claim under the SME regime . Many companies may find they have now switched from large to SME status.

2 3

Enhanced tax benefit

The level of enhanced deduction for eligible R&D expenditure has been increased from 150% to 175% for all SMEs.

Payable credit in cash

The amount of payable cash credit has been reduced slightly from 16% to 14%; however, the rate of cash credit that may be claimed where companies are in a loss making position has stayed the same at approximately £24, for every £100 of eligible spend.

Has your company status changed from large to SME?

Clearly, there are significant benefits for large companies now qualifying as an SME. The new size criteria and benefits apply for expenditure incurred on or after 1 August 2008. However, there may be some complexities in preparing an R&D claim if the company status has changed under the new definition. Obtaining professional assistance from a specialised R&D tax advisor may help the company take account of some of the additional conditions which need to be fulfilled (which are not relevant to the large company scheme).

These include:

1 2

Ownership of intellectual property

All intellectual property resulting from the R&D must generally vest with the claimant company.

Subsidised expenditure

Where a project has received any funding which is a notified State Aid, no expenditure on that project can qualify under the SME

scheme. Where any other subsidy or grant is received, generally only amounts relating to the grant/subsidy are excluded from the SME scheme .

3 4

Contracted R&D

The company filing the R&D claim must not have been contracted to carry out the R&D .

Subcontracted R&D

Companies can include payments made to subcontractors, a cost category which is generally not available to large companies.

Expenditure is generally restricted to 65% where the companies are unconnected.

Generally, eligible cost categories are similar to the large company scheme and focus on the costs of people undertaking the R&D (including augmented headcount), consumables used up in the R&D, software costs and utility costs. The SME regime is more generous than the large company scheme as it also allows qualifying companies to claim additional cost categories.

£

6

Integration of legacy and new systems, for example following corporate mergers or acquisitions, adoption of an Enterprise Architecture or for joint ventures with external partners

Are you maximising your R&D claim?

If your company is already making an R&D tax relief claim, you may want to consider whether all qualifying activities are being identified and claimed.

The key to unlocking and maximising your R&D tax benefit is being able to identify successfully the eligible R&D activities amongst a company’s wider operational activities and this may not be straightforward.

your company is already making an “ IfR&D tax relief claim, you may want to consider whether all qualifying activities are being identified and claimed

“

£

Specialfeature Ernst & Young

Breadth of the R&D regime – eligible activities

How to claim R&D tax credits

The key considerations in determining whether a project qualifies for relief under the SME and large schemes are whether the Government’s criteria for R&D are satisfied (as defined by the DTI guidelines issued March 2004). These rely on a two-stage test, which states that potentially eligible activity should be seeking to achieve a technological or scientific advance by overcoming technological or scientific uncertainty.

The two criteria interact to significantly broaden the scope of potentially eligible activity.

Typically, when submitting a claim, it will be necessary to demonstrate how the technical activities in question meet the criteria for R&D and provide support for the expenditure being claimed. As a self-assessment scheme, it is the technical competent professionals (engineers and IT developers) within your company that determine what is an eligible R&D activity. A good way to explain to HMRC how the criteria for R&D have been met is to submit, with your claim, a sample set of project descriptions detailing eligible activities. This can be a difficult task, given that HMRC does not publish recommendations on how technical reports should be structured.

Examples of areas which may contain potentially eligible R&D:

Summary

Due to misconceptions around the definition of R&D, many manufacturing companies are not aware that they are eligible to claim R&D tax relief on some of their dayto-day business activities. One of the key misnomers assumes that relief is restricted to companies carrying out blue-sky research only, typically found in pharmaceutical companies or research institutes.

1 2

Creating new products or making appreciable improvements to existing products

3 4

Integration of new technology to an existing processes that facilitates manufacturing improvements

Developing or improving manufacturing processes and scale-up trials that are designed to increase production efficiencies, reduce waste or decrease costs

Adaptation of new technologies from another industry to develop new or improved devices, processes or products that were not straightforward

5

Advances in business support and operational tools, development of network and management technologies, including designing mobile and interactive services

You can claim cash back for activities undertaken up to two years ago. R&D claims must be submitted to HM Revenue & Customs (HMRC) within two years of the end of the relevant accounting period.

The SME regime changes provide an excellent opportunity for companies with up to 500 headcount to triple their tax benefits and potentially convert the relief into cash. Companies should act now to determine whether they could reap the rewards for their R&D activity. However as the process can be complex, seeking advice from a specialised R&D tax advisor may help companies take full advantage of the benefits available to them. end All three authors are with Ernst & Young’s Research and Development Tax group in the UK. Frank Buffone is the partner leading the R&D tax practice. Sian Rayson-Mounsey is a senior R&D tax technical and methodology advisor. Roxane Naro Markarian is a senior manager with an engineering background and experience in preparing and agreeing R&D tax claims within the manufacturing sector.

Have your say at www.themanufacturer.com

43

Think like the tortoise, run like the hare In today’s world of intense competition and ever-increasing pressure, not just to perform but excel, manufacturers have to make things faster and to a higher quality.

And mistakes are no longer tolerated in virtually any modern factory.

Sarah Coles looks at how quality is delivered under pressure

From

a very early age we are given the wise tortoise as a role model. We are indoctrinated into the understanding that slow and steady produces the kind of accuracy and quality that ensures a world class performance. Of course, when times are tight, it’s easy to be tempted by the promise of the hare – producing more, in a faster time, and with fewer people.

The question is whether manufacturers can achieve the best of both worlds and make efficiency and accuracy the bedfellows they are theorised to be.

The key to efficiency lies in operational equipment effectiveness (OEE). This depends on three things: the speed you run at, the availability and the quality. The first part of any process is therefore to identify your OEE, and whether increased efficiency lies in improving accuracy, upping the speed, or reducing downtime.

David Bailey, leader of the manufacturing practice of PA Consulting in the UK says accuracy and maintaining quality is key: “Any failure in the product is poor efficiency; anything that doesn’t meet specification is a failure, therefore you can’t have efficiency if you don’t have an accurate process.”

44

Worldclass manufacturing

to be entirely squeezed out of the process by making mistakes impossible – otherwise known as fool-proofing or mistake-proofing. There are a number of techniques that can be introduced to work towards Poka Yoke. The process can include visual devices to prevent mistakes happening in the first place, or the machinery itself can be constructed so that it’s impossible to make a mistake. Bailey explains: “If you have a product with seven screws, on a typical production line it moves in front of the operative, he puts the screws in, and then

“Accuracy alone is not enough;

manufacturers also need to work on speed. Often they are nervous of the speed part of the equation. It remains one of the major untapped opportunities in increasing the output of the manufacturing plant, because those involved in the process are afraid to challenge speed constraints for fear of introducing quality problems

“

it moves on and often has to be rejected much further down the line because they haven’t done it properly. With Poka Yoke there will be a solution, such as an automatic screwdriver which counts the screws and won’t allow the line to move on until all seven are done.”

Quality is key to Lean manufacturing practices, as reducing defects is one of the seven muda (wastes) of Lean theory. The ideal is therefore to change the culture and processes within the organisation to drive out inaccuracy.

Ying Zhang, a spokeswoman for RNA Automated Limited adds: “New technologies in flexible handling systems combined with bar code and camera detection systems are powerful allies with quality control and lean manufacturing.”

Darron SBO manufactures components for the gas and oil industries. It has 100 employees based in Rotherham.

It needed to reduce waste through resolving quality issues. Gerald Smith, managing director says: “It was vital for us to improve our production planning process and reduce machine downtime and scrap if we were going to achieve both customer and shareholder demands.” The Manufacturing Advisory Service (MAS) worked with them to develop a ‘right first time’ culture. A number of Kaizen quality improvement teams were put in place to work on quality issues, and the culture of the business gradually shifted to promote accuracy. Teams now monitor and manage their own KPIs, and as a result efficiency has improved enough to substantially reduce the order backlog.

So automation is one way to remove error from the process. However, it is not always the most efficient, especially if you factor in budgeting requirements but even if you don’t. It can also depend on where the product is being manufactured. Bailey says: “If you are manufacturing in Germany with high labour costs you may be looking for automation. However if you are manufacturing in China, not only do you have lower wage costs, but you also have a culture where a worker can be expected to do the same operation day in day out and do it perfectly, so you get accuracy and efficiency without automation.” It also depends on the process itself. Bailey uses the example of a manufacturer who purchased a piece of machinery which would only assemble one of its products. By taking a piece of the machine out and replacing it with a manual process, it gave them the flexibility to put all their products down the line and increase the efficiency of the plant overall.

A key theory building on the Lean ideology is Poka Yoke, developed by Shigeo Shingo. His aim was for errors

Indeed, some Poka Yoke solutions are decidedly low tech. Secure Systems and Technologies employs 52

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World class manufacturing

staff in Gloucester, making specialist IT equipment.

Its USP was delivering quality with fast delivery times.

As a result speed and accuracy were vital. It worked with MAS to introduce Lean methods, including Poka Yoke. It redesigned its manufacturing space to reduce clutter, to improve the passage of parts through production and reduce the number lost in the clutter.

This created a 50% increase in capacity, an increase of throughput of 35%. Meanwhile, reworks fell from 48% of product manufactured to 10%.

Tom Edwards, a director at Newton Industrial Consultants points out that although there is a point in the process of speeding up the plant where problems start to occur with quality, it’s a question of where that point is, and your reaction to it. He says: “If you are producing 100 widgets an hour you can try running at faster speeds to discover when you hit your first quality problem. If you do it at 1050 you can either see that as a constraint so you stay below 1050, or you can see it as a problem to solve.”

A solution, Edwards says, will require buy-in from various parts of the organisation, including quality, production and engineering. But if they can all be persuaded of the financial benefits of increasing speed, they can work together to overcome these problems.

Sometimes increasing speed is surprisingly straightforward. Edwards worked with an injection moulding company making syringes for veterinarian practices. He was called in to improve efficiency at the plant, so started with a review of the process. He says: “There was a machine which assembled the syringes, which had a speed dial on it marked from one to 12. There was a big sign on it saying it mustn’t be run any faster than eight.” Edwards asked around the company and couldn’t find anyone who knew why, so they ran trials testing at higher speeds. He says: “Over three days we increased the speed 60% without any problems. It was only a few months later we discovered that the sign had been put up because there was a camera on the machine that checked whether the syringes had been assembled correctly, and it couldn’t work any faster than on level eight. The camera had been removed two years earlier. It was only the sign that remained.”

The third element to OEE is controlling down-time. The solution to equipment availability must be tailored to each process. Lean theory calls for a tighter production system with a just-in-time approach, where a complex process involving tens of thousands of components will shut down if one part of the process stops, otherwise these components will accumulate and create efficiency problems. However, Edwards says: “A simple two step process may be better served by the ability to allow a certain amount of accumulation in between, so that if the first machine stops the second can continue, and vice versa.”

you are manufacturing in China, not “Ifonly do you have lower wage costs, but you also have a culture where a worker can be expected to do the same operation day in day out and do it perfectly, so you get accuracy and efficiency without automation

“

However, accuracy alone is not enough; manufacturers also need to work on speed. Often they are nervous of the speed part of the equation. It remains one of the major untapped opportunities in increasing the output of the manufacturing plant, because those involved in the process are afraid to challenge speed constraints for fear of introducing quality problems.

David Bailey, PA Consulting

In some cases, availability is a matter of scheduling.

It means looking at the production process and the optimum balance of making each product just in time for the market, while also keeping changeovers to a minimum. In addition, Edwards points out, the schedule has to be right. He uses the example of making paint: “You want to go from light to dark. You don’t want to be making black and then have to changeover to making white.”

These three factors together often hold the solution to efficiency issues. Edwards says: “Typically you get a 20% improvement without having to do anything critical”. However, in some cases efficiency may require product redesign. Bailey says: “I was involved in a project to industrialise a product with a very high tolerance. To make it effective to manufacturer was a process of negotiation, talking to the designers to ask ‘can we change the way the product is designed to make its manufacture more efficient, without any impact on the end user?’” He says: “Look at car manufacture. The body in white is made to a high tolerance, so the parts can slip over one another and there is significant give. The car itself can be made to a high quality, but requires a degree of accuracy that is achievable reliably.” Many production processes lend themselves to continual design improvements to allow for a more tolerant build with subsequent generations of the product.

The right approach can therefore improve on all three elements of OEE: availability, accuracy and speed, to enable a manufacturer to do improve efficiency without harming quality. It is possible to get the best of both worlds of the hare and the tortoise. Like most fairy stories there’s a moral behind the mythology. end

Have your say at www.themanufacturer.com

47

Celine Nuttall Exception Celine Nuttall began working for electronics outsourcing company Exception VAR a decade ago as a student, having moved to England from France. The company was then called Kamtronics and was a close-knit firm of just 12 employees.

Celine says the company’s size enabled her to have high exposure to both customers and the supply base, a factor she considers was pivotal to her professional development.

Following

completion of her placement, Celine was offered a full-time junior position supporting several areas ranging from order acknowledgement and filing to purchasing support.

Over the next 12 months, as well as honing her English, Celine progressed quickly, becoming a part-time account manager for the firm’s French customers and spending the rest of her time as a purchasing assistant.

It was doing these roles that she first took on the full responsibility of managing customer expectations and dealing face to face with clients.

CV in brief – Celine Nuttall Age: 33 Education to date: 1996 – Baccalaureate (France) 1998 – DUT Techniques de Commercialisation – France (Degree in Business & Marketing) 1999 – HNC in Business and Marketing, Chippenham 1999 – DETSUM – France (License in Business & Marketing)

Employment: March 1999 – Joins Exception as fulltime administration trainee January 2000 – Appointed purchasing assistant / general customer liaison role January 2002 – Appointed customer account manager (France) Jan 2002 2004-2006 – Returns from maternity leave twice to customer account manager (France) and in 2006 customer account manager UK November 2008 – Appointed purchasing manager 2008

48

In 2002 Celine was promoted to head of external sales for France, responsible for all Exception VAR’s customers in the country as well as being tasked with developing new ones.

“This was quite a change from where I started three years previously as a student whose main role was filing and supporting those around me!” says Celine.

In 2003 Celine decided to take a step back, giving birth to her first child that year before celebrating New Year’s Day 2006 with the arrival of her second. Celine didn’t allow motherhood to let her lose sight of

her career – during that period and she took a parttime position as a customer account manager and purchasing assistant.

In November 2008 Celine succumbed to the urge of continuing her temporarily halted ascent through the company ranks. “After all I did not come to England for the weather, or bacon rolls with HP sauce, although the latter has become my favourite!” she says.

At the earliest opportunity, Celine successfully applied for the job of purchasing manager within VAR. Now in the role, she feels she now has the opportunity to prove herself again and revolutionise the way in which Exception VAR purchases product.

“Thankfully I was given that opportunity and I have thrived on every minute of it,” she says. “My experience in sales has helped me gain a real understanding of what customers want which in turn helps me negotiate with suppliers to ensure that we are always as competitive as we can be. This is undoubtedly something which in this economical climate is of the utmost importance, both internally and externally.”

Howard Goff, managing director of Exception VAR, said: “Celine has made quite a journey since I first interviewed her for a job at Exception as a student placement over ten years ago. She first came to us as an eager French student, keen to improve her spoken English. She had a natural flair for customer liaison, so she soon became an integral part of the team looking after our growing list of French customers.

“Having spent time off having a family in the UK, she reapplied for a key role as purchasing manager, which she has done since 2008. Celine is a great example of how women can play a central role in manufacturing, which has traditionally been a male-dominated industry.

Her success also shows the huge contribution foreign nationals can make to international businesses such as ours, who need not just world-class manufacturing skills, but exemplary levels of customer service,” says Goff. end

T r a i n i n g f o r S u c c e ss Both public and private sector training providers do some excellent work but even they would admit the structure of training provision services is opaque. A governmentcommissioned body will soon publish a report that might comprehensively simplify the training provision system. Is the UK Commission for Employment and Skills the white knight that employers have sought?

49

Painting procees of a Red Arrow

Will UKCES relieve the pain to train?

British manufacturing is way down the global skills league table. Industry is eagerly awaiting the findings of a body set up by government to recommend ways that skills delivery can be simplified and made more responsive to employers’ needs. And there is a sense of unnecessary trial and error, says Colin Chinery. As one director put it, “At the moment they seem to be throwing things at the wall in the hope something will stick.”

T

he UK’s skills training landscape recalls the Schleswig-Holstein Question, so complex that only three men in Europe were said to have understood it; one was dead, the second became mad, and the third — Foreign Secretary Lord Palmerston — had forgotten all about it.

Search the internet for manufacturing advice and 4,000 public-funded websites await you. Type in “electrician” and a list of 84 accredited qualifications, 11 awarding bodies, 292 occupational standards developed by 13 different standard-setting bodies or Sector Skills Councils are at your disposal. “You need training to source training” says a member of the Institute of Directors.

50

“There is a complexity in the skills system,” says Chris Humphries, “and it worries the hell out of me.” As chief executive of the UK Commission for Employment and Skills, Humphries knows the terrain. This is the body the Government is asking to recommend how skills delivery can be simplified and made more responsive to employers’ needs.

The UKCES report is due this autumn and the recommendations, says the commission’s chairman and BT boss Sir Mike Rake, will be “far reaching”. A subsidiary issue Humphries wants to tackle is why some skills levels that employees achieve still do not make them ready for work. “It’s the old issue of ‘employability’. UK plc has thrown all this money on skills, but bosses are still saying that the candidates

T r a i n i n g f o r S u c c e ss

S E M TA they see are not employable,” says Humphries. “I’m sorry to say Semta is the Sector Skills Council for Science, that the TUC was first to say this in Engineering and Manufacturing Technologies.

1989, but we’ve had more reports Like the other 24 Sector Skills Councils, it is independent and employeron ‘core skills’ or ‘key skills’ or led. Airbus UK, BAE Systems, Caterpillar, Corus, Ford, GKN, Nissan, Rolls‘skills-sets’ than you can shake Royce, Toyota and VT Group are among its prime movers. a stick at. In the past year alone, I’ve seen four projects that have Semta covers 76,000 businesses employing 1.4 million people, working with the smallest micro-companies to the biggest corporations. all ‘re-defined’ the list of skills this country needs, but the list is It also works closely with Sector Strategy Groups to drive improvements in no different from that produced productivity by transforming skills. in 1989. It is a distraction; what Central to its work are Skills Action Plans (known as Sector Skills employers are saying is that the Agreements, or SSAs). These employer-led pacts set out the skills each system still doesn’t teach the skills sector needs and identifies how those skills will be supplied. In-depth that employers need.” research, analysis and consultation have helped Semta reach agreements Britain is the world’s sixth covering the entire UK ‘footprint. largest economy. But in the skills “Your Sector Skills Council will be more than happy to table, compiled by the UKCES, it assist you,” says Lynn Tomkins, Semta’s UK director of operations. “As ranks 17th-18th for intermediate an employer you are their key customer and their role is to support you and 12th for high level skills. with your skills development.”

Humphries puts the annual cost to the economy at £10bn. And Contacts: General enquiries: Dedicated customer services team, in its complexity, over-provision, tel. 0845 643 9001, www.semta.org.uk. duplication and difficulties of Who is eligible for help from Semta? Companies in the access, its bureaucracy and aerospace, automotive, electrical, electronic, marine, mechanical, constant churn of initiatives, metals, science and bioscience industries. bodies and procedures, the UK skills training system is in a one club world league.

In a recent survey published by the Institute does heighten employers’ expectation of the of Directors (IoD), 64% of IoD members say publicly UKCES review.” funded programmes are too difficult to engage with.

Harris says it is possible simultaneously to Nick Brayshaw, recently retired chairman of the CBI’s plan for a simpler future system while maintaining National Manufacturing Council goes further. “I’ve current frontline support through initiatives such been involved in public policy for manufacturing strategy for nearly ten years, much of it at the top, and I don’t understand UK plc has thrown all this one element of it. It’s an money on skills, but bosses are still absolute disgrace.”

A clean sweep Unsurprisingly some respondents to the IoD survey want the whole system swept away and the resources dedicated to reductions in business taxes, enhancing companies’ ability and flexibility to invest in the skills they really need.

“This view might not resonate greatly with the Government or opposition parties,” says Mike Harris, the IoD’s head of education and skills policy. “But the frustration of which it is borne

saying that the candidates they see are not employable

Chris Humphries, UK Commission for Employment and Skills

as Train to Gain. “And if one accepts the argument that the system isn’t really working very effectively anyway, what on earth is the point in delaying the process of reform?”

In July, the House of Commons Skills Committee slammed “catastrophic mismanagement” by England’s biggest quango,

51

T r a i n i n g f o r S u c c e ss

the soon-to-be-axed Learning and Skills Council, “compounded by government oversight failures”, for a capital programme fiasco with a cost potential running into hundreds of millions of pounds.

At the same time it took an indirect hit when the National Audit Office reported that Train to Gain, the Government flagship under the LSC umbrella, has not provided good value for taxpayers’ money.

One of the difficulties of the present system is the attempt to marry up the regional approach and the sectoral approach. And this hasn’t worked Lee Hopley, EEF

Launched in 2006 it was, said the watchdog, inefficient in its early days, with poor management, “unrealistically ambitious initial targets and inconsistent implementation”.

Despite this the NAO says the majority of employers are now satisfied with the service, with many reporting business benefits, and Lee Hopley, head of economic policy at EEF, the manufacturers’ organisation, also sees an accelerating Gain of the Train, while stressing the urgency of increasing speed and improving destination focus.

52

She points to an EEF survey in 2004, which showed that a big barrier to increasing investment in skills and training was an inability to get information and resource the right provision. “All incredibly complicated especially for SMEs,” says Hopley.

“And in the five years since, we’ve not really seen a great deal of movement. With skills a key issue in competitiveness, many companies simply have to try to get round it as best they can. One of the difficulties of the present system is the attempt to marry up the regional approach and the sectoral approach. And this hasn’t worked. There’s an awful lot of duplication across sectors and regions and our feeling is the emphasis should be on the sectoral angle.”

But it’s not all been bad, Hopley says. “Train to Gain and its brokerage service have started to bed down over the last six to nine months and are making more of a difference.”

Initially a restricted port of funding, the Train to Gain remit has expanded significantly. But Hopley questions whether this has been communicated effectively across much of the business community.

“I think this — and not the offer itself — is the problem. We want to see a continuation of a Train to Gain scheme model, but it needs to be communicated a lot better. Awareness hasn’t kept pace with the changes in the offer.”

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www.forward-vision.co.uk Forward Vision is a division of Coriolis Ltd, Castle House, Friar Lane, Nottingham NG1 6EW

T r a i n i n g f o r S u c c e ss

Regions do the talking

T RAIN T O GAIN

This resonates with the IoD report, Train to Gain is the service from the Learning which shows that a third of its and Skills Council (LSC) that provides free, members still don’t understand or specialist, impartial advice to employers. use Train to Gain. But of the 14% that did use the service, satisfaction At present it is only available in England. Budget for 2009-10, £925m rising to £1bn by 2010-11. Some 21,000 employers are benefiting from level was high, while 75% of the service which assesses skills and training needs, matching these employers polled in another survey with an appropriate training provider. said Train to Gain had produced ‘significant improvements’ in their The Skills Brokerage Service is a free service for businesses workforce skills. is at the centre of Train to Gain. Skills brokers work with employers to analyse their current skills training and recommend appropriate “I don’t think Whitehall is training solutions to suit their individual needs. Each broker is an fantastically good at explaining independent specialist advisor trained to national quality standards what’s on offer. But at a regional level who acts 100% in the interests of the business. And the service is it can be different,” says David Bailey, aimed at hard-to-reach employers that are not currently Professor of International Business working with providers to train their employees.

Strategy and Economics at Coventry A broker will work with the company to assess specific needs based on University. “In the West Midlands a clear understanding of individual business goals. They will source you are seeing a much bigger suitable courses and funding available, and agree a tailored training effort, co-ordinated by Advantage package with training delivered at a time and place to suit the West Midlands and more recently business, including on site. through the regional task force, to The service is free to all employers and some training may also have try and make it very clear to business subsidised funding from government — for example, first full Level 2 what’s on offer, and there are similar qualifications, Apprenticeships, Advanced Apprenticeships and some initiatives by other agencies such as Level 3 training.

Birmingham City Council.”

A regional task force to assist Contacts: Tel. 0845 600 9 006 or contact a business broker online, companies through the recession http://www.traintogain.gov.uk/Helping_Your_Business/skillsbrokers/ has been “pretty well received”, Who is eligible for help from Train to Gain? In theory with Business Link as the principle any business in any sector is eligible to apply for funding and advice point of call. “And we’ve seen some and will be assessed on a range of criteria, talk to a skills broker for specific interventions such as in more information. the wake of the MG Rover collapse, and the development of the auto industry,” Bailey adds.

In contrast with received wisdom, 80% of “But more generally it’s very, very patchy directors that participated in an IoD survey reported and complex, a point picked up by the Leitch Review that skills training — far from an early casualty of which said that in terms of investing and training in recession — had been maintained or even increased skills we’ve got to run a lot harder and faster just to in the six months to May 2009. stay on a competitive level let alone improve. So we But many businesses are less far-sighted. need to invest more and co-ordinate better.”

“There are companies still not doing any training The good initiatives should be highlighted beyond statutory health and safety,” says Emma and spread wider says Bailey. “There’s much that Mulligan, head of business development at the could be done, but it’s all about political will. I’m National Skills Academy for Manufacturing, a point particularly concerned that we have not seen areas taken up by David Fox, chief executive and chairman of policy joined up. For example I’d like to have of Power Panels Electrical Systems, Walsall. seen an effort by the Government to have a form “What I find remarkable is the number of part-time wage subsidy linked to training. In this of businesses that seem to believe that reducing way employees would have skill training during the investment in skills during the downturn will not put period when they were not working full-time so them at a competitive disadvantage. The prevailing that when a company comes out of recession it will attitude seems to be that everyone is ‘in the same have not only have retained its skilled workforce but boat’. In my opinion those businesses have their actually moved on. But this hasn’t happened.” heads stuck in the sand.”

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s of n deliver

A Time for Learning, Lean and Green After nearly two decades at the heart of Lean implementation and training, Forward Vision has now joined forces with Coriolis Ltd, leading cost reduction specialists, and Keimis, providers of IT solutions for shop floor data capture and real time production monitoring.

Forward Vision founder, Ed Handyside, is enthusiastic about the alliance and the opportunities he sees for developing fully complementary improvement strategies.

Handyside cites Total Productive Maintenance (TPM) as ‘just one example’ that he feels would benefit from a more integrated approach.

“I’m especially enjoying working with Keimis on this one,” he said. “UK approaches are commonly rooted in software and data systems, and yet many supposed TPM packages are nothing of the kind. Many are little more than tools for monitoring the daily tasks of engineering crews: no awareness that real TPM means that much of the maintenance is carried out by the users; nothing to help with condition monitoring, the establishment of machine histories so vital to predictive and preventative maintenance or with optimising the availability of spares. There’s an opportunity here to develop something that helps manufacturers rediscover and pursue TPM as it was meant to be and as it should be- and enjoy the benefits of superlative asset care and performance that comes with it.”

That Forward Vision and Coriolis are experiencing increased demand for their products and services comes as no surprise to Handyside: “Right now businesses need cash and the only way to squeeze significant amounts of cash from a business without actually selling it is to through a Lean programme.“ But there is recognition that, despite the difficulties, recession offers other opportunities.

“There seems to be a resolve to be fit and ready for the trading uplift when it comes.

We’re finding that many firms are using the fall in demand to upgrade the capabilities of their staff.”

Handyside designed and delivered the production management and supervisory training that helped Nissan UK become the most productive car plant in the western world. No surprise that Lean training has always featured strongly in Forward Vision’s portfolio. Nevertheless, the enlarged business will enable a significant reinvestment in its training provision.

Forward Vision’s flagship production management programmes have been relaunched as The Diploma and Certificate in Manufacturing Excellence. They still provide internationally competitive techniques and disciplines and the skills needed for effective leadership and an emphasis on improvement focussed assignments in the factory. Forward Vision typically expects companies to recoup a four-fold return on training fees from these alone.

Now, a Certificate or Diploma in Leadership from the Institute of Leadership and Management and certificated Six Sigma Green Belt status completes the package together with more emphasis on energy efficiency and the implications challenges of next year’s Carbon Reduction Commitment.

“Overall though,” insists Handyside, “we’re still about equipping people to do the job they are paid to do: to be the principal drivers of performance improvement in the business.”

Telephone: 01670 510 902 Email: helpdesk@forward-vision.co.uk Web: www.forward-vision.co.uk

Kembrey pilots NSAM and SC21 joint training programme It is widely recognised that Britain must raise the level of skills in the workforce in order to remain a world-class manufacturing nation. And the recession has given us a new challenge. Recent research (July) by Vodafone shows that up to two thirds of UK manufacturers admit to cutting back on skills and training in a recession, and 37% have reduced their headcount in the last 12 months. As a result, one in five UK managers now say they have a skills gap as a result of the recession. And according to Semta, the Sector Skills Council for science, engineering and manufacturing technologies, over 10,000 engineering companies and almost 50,000 jobs are at risk because they are not investing in skills.

Employers need to retain, develop and utilise their best talent or recovery will be much more difficult.

In

addition, a new study by McKinney Rogers (July 27) shows that while manufacturers have successfully hunkered down to survive the recession, they are ill-prepared to react and capitalise on opportunities when the recovery starts. From the large and mid-sized UK companies surveyed, 40% of leaders admit to having operational skills gaps which will hinder the implementation of successful strategies to develop new markets, build strong brands and take market share from competitors.

Semta director Lynn Tomkins says: “We understand the needs of employers in these challenging times so we are in a good position to lead on skills in the new manufacturing-based UK economy, including advanced manufacturing and emerging science and technology industries. We also influence government policy and help employers access funding for training.”

“For example Semta has negotiated a £100m training compact with the government which allows sector companies in England to access support and funding for a wide range of skills, including all age Apprenticeships, Management and Leadership — for companies with between five and 250 employees, Business Improvement Techniques and Skills for Life.” Semta is not available to UK businesses outside England.

Return on investment Through collaboration with multiple service providers such as the Manufacturing Advisory Service and the Learning Skills and Council, Semta provides a ‘one call, one contact’ service to employers across the country. This ensures a simple and highly effective contact process whereby manufacturers get fast and efficient solutions to satisfy their skills requirements.

Its flagship brand for work-based learning, The National Skills Academy for Manufacturing, is dedicated to raising standards. It works with training providers to ensure there is sufficient capacity of the highest quality training nationally by setting national standards for trainers and programmes. In just under 18 months, The Skills Academy has supported almost 5,000 learners through Business Improvement Techniques (B-IT) NVQs and helped companies achieve a £12m benefit from £2m investment in skills — a 6:1 return on investment.

The Skills Academy’s systematic process-driven approach to work-based learning, the Learning Engine, helps employers deliver significant return on their training investment. Its

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diagnostics tools help to benchmark where companies sit on the scale of organisational learning, to make sure that training activities meet business goals, such as strategy implementation, and produce measurable bottom line benefits.

Kembrey flies high with NSAM’s help By working closely with Semta’s National Skills Academy for Manufacturing and implementing a structured approach to training, Kembrey Wiring Systems is now on target to cut its costs significantly as well as achieving accreditation to Supply Chain for the 21st Century (SC21). SC21 is the Society of British Aerospace Companies’ change programme designed to accelerate the competitiveness of the aerospace and defence industry by raising the performance of its supply chains.

These savings are now helping Kembrey — who supplies Rolls-Royce, BAE Systems, GKN Aerospace, Agusta Westland, Cobham and Aircelle with wiring systems — to expand its training and efficiency programmes to other areas of the business as well as helping it to prosper at a turbulent time in the aerospace industry.

In line with Semta’s one call service, The Skills Academy pulled together the support Kembrey needed including compact funding via Semta, a suitable local training provider, and The Manufacturing Advisory Service.

“We realised that to face today’s challenges, the company needed to ramp up operational productivity and remove inefficiencies in the production process, whilst demonstrating a swift improvement in delivery performance,” says Jacquie Burgess, head of HR at Kembrey.

Jacquie had regular discussions with The Skills Academy’s South West regional manager, Brian Thornton, to clearly identify the needs of the company and explore the most appropriate solutions.

“Although we have a dedicated team here in Swindon, it was inexperienced when it came to lean manufacturing techniques,” says Burgess. “We also needed to focus on Key Performance Indicators, develop a culture of continuous improvement, reduce non-value added activities and standardise more of our processes.

“In turn this would help us to increase our profitability and make us more competitive in the global marketplace.”

Piloting the PAC link with SC21

Joined-up gets the thumbs up

The Skills Academy put forward a new Productivity and Competitiveness (PAC) programme that combines B-IT training with measured business intervention. Brian Austin, Kembrey’s managing director, agreed it was a possible solution to the company’s needs, combined with Business Improvement Techniques (B-IT) NVQs from MAS at levels two and three that recognise employees’ achievements.

Company chairman, Dick Martin —who is a council member of the Society of British Aerospace Companies — believed it could help them achieve the Manufacturing Excellence element of SC21 accreditation.

Kembrey was an early signatory to the SC21 programme, so The Skills Academy modified PAC to provide a clear route to SC21 accreditation, without duplication of inputs from each of the contributors, that delivered almost immediate benefits which would more than offset the cost of future investment.

“By taking a bottom-up approach, reducing costs and improving productivity at a shop floor level, PAC saves money which can then be used to fund strategic improvements at a higher level or for investing in new equipment to make the business even more efficient and competitive” says Brian Thornton, regional manager for the Skills Academy.

“Although the fundamentals of PAC had already been well established, Kembrey agreed to pilot the programme’s link to SC21 and they are already seeing the benefits.”

Kembrey’s Burgess adds: “Not only are we starting to see improvements in key business measures, but we are also very excited and pleased about the levels of enthusiasm, motivation and participation shown by our employees. They are keen to implement their ideas, support others where necessary and lead where possible to achieve targeted improvements.

“The training and follow up sessions have provided them with easy to use yet effective tools that they can apply to everyday activities to realise short-term benefits that help us to maintain momentum.

“Those studying for an NVQ will find additional reward in their achievement as will the company when it attains the SC21 bronze award.”

Burgess’s views are shared by Kembrey’s chairman, Dick Martin: “We are delighted with the joined-up approach that The Skills Academy has provided. Their ongoing commitment to this pilot scheme will help us to achieve several business improvements and SC21 accreditation.

“The success of this pilot will offer a proven, consolidated approach to training and provide real business benefits to other SMEs like us who have limited funding and resources available.”

Brian Thornton adds: “Our support doesn’t end once we have identified the right training programme and helped to find a suitable provider validated by The Skills Academy’s own high standards of competency. To offer a total support service for employers we must advise on strategy, content, delivery, implementation and evaluation.

37% of manufacturers have reduced their headcount in the last 12 months. As a result, one in five UK managers now say they have a skills gap as a result of the recession “We are helping Kembrey make decisions every step of the way in the programme to ensure it derives real business benefit from the new training strategy.”

For further information on skills support and funding, contact Semta Tel. 0845 643 9001

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T r a i n i n g f o r S u c c e ss

Power Panels has developed into one of the world’s leading manufacturers of electrical assemblies. Over the last eight years profits have tripled and unprecedented business success achieved through a strategic approach both to the development of skills and a culture of learning. Each employee receives a compulsory 200 hours training a year, with a 40/60 split between classroom theory and practical application.

What I find remarkable is the number of businesses that seem to believe that reducing investment in skills during the downturn will not put them at a competitive disadvantage David Fox, Power Panels

Winner of three best factory awards, Power Panels was named the 2009 winner of The Skills Academy’s Skills Development Award, overall “a fantastic story,” says Mulligan. “They have done it themselves, used government support as and when they needed it, and are now offering their training to others. And there are lots of companies out there like Power Panels.”

Nuclear skills exodus Cooney Marine of Kettering, a manufacturer of stainless steel equipment for the leisure marine industry, worked with Semta to achieve business improvements through a better qualified workforce. Management and shop floor staff training has resulted in improvements in quality,

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cost and delivery, including a 123% gain in delivery schedule achievement and a 139% rise in value added per person.

Semta, the Sector Skills Council for science, engineering and manufacturing technologies, is one of 25 licensed UK Sector Skills Councils (SSCs), employer-driven organisations that together articulate the voice of the employers of 90% of the workforce represented by all 25 SSCs. “We provide a one-stop shop to employers, giving the sector-specific advice and guidance they need,” says Lynn Tomkins, Semta’s UK Director of Operations.

“By dealing with a Semta expert they are guided through the complexities, linked with the right provider through their skills academy, and helped to source funding. And for small companies it is very important that they do not have to deal with a range of different people. They are looking for a simple, straightforward and easy connection, and that’s our role.”

Perhaps no sector faces more skills challenges in the UK than the nuclear industry. “The industry has been run down for at least a decade,” says Mike Tynan, managing director of Springfield Fuels in Preston, nuclear fuel providers for the UK power programme and global markets.

“This, combined with an ageing workforce, provides us with an extremely challenging skills environment. We’re actually seeing a real renaissance in nuclear power at the same time as a mass exodus of highly skilled and experienced staff at all levels.”

Cogent SSC is the Sector Skills Council for chemicals, nuclear, oil and gas, petroleum and polymers (formed in 2004 and re-licensed this year), and Tynan sees the partnership with government, Cogent and the National Skills Academy for Nuclear as “fundamental in ensuring that this industry is gearing up to meet the challenges of the future.”

“We are at arms length from the Government with an employer board and we represent the voice of employers. We listen to them and talk to them all the time,” says Cogent’s Mervin Dadd.

A former civil servant, Dadd says he has seen it from the other side. “That was when government did things to industry, spending lots of money and saying ‘these are the things that you want.’ The

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T r a i n i n g f o r S u c c e ss

COGEN T reverse is true now, with employers saying ‘this is what we need.’ So we ask what are the skills needed, what are the problems, what are the holes? And we create a map for each industry.”

Cogent is the Sector Skills Council for the chemicals, pharmaceuticals, oil and gas, nuclear, petroleum and polymer industries.

A strategic approach

Like Semta, its brief is to articulate the voice of its sector employers on skills, designing fit-for-purpose qualifications, attracting young people into the sectors, and understanding industry skills needs.

“I would go as far to say that the key to winning in the recession is Key objectives: learning,” says David Fox, “and fear and defeatism should not be allowed – Reduce the sector’s skills gaps and shortages and anticipate future needs in the Cogent industries. to thwart skills development.

– Improve productivity and business performance through specific “Apathy is a particularly strategic actions, based on our analysis of sectoral priorities. damaging trait. Everyone is not in – Increase opportunities to develop the productivity of the the same boat. The most enlightened sector’s workforce. companies will already be reacting to – Improve learning supply, including the development of the intensified competition brought apprenticeships, higher education and of national about by recession by increasing their occupational standards. investment in skills.

“If those companies “Our job is to support employers not only in surviving the turmoil, but also to thrive when the economy recovers,” says Cogent CEO Joanna take a strategic approach to Woolf. “We’re developing employer-led skills strategies, products and training, combined with a good services designed to close the gaps. understanding of the nature of long term value creation, they will be “We want to help you to invest in the skills of your workforce now. We’d be delighted to show you how you can access ideally placed to not only capitalise advice, guidance and funding.” on the upturn, but also to weather any future recessions.”

Cogent is working with companies who are investing in skills in Coventry University’s Bailey readiness for the upturn. Some are concentrating on greater efficiency, some on improving leadership, and others boosting technical skills. says there is another and yet bigger issue. “It’s, how did we got into this “Like many others, they are bucking the trend and giving us good news mess? I think the Labour Government about how their people are the key to success.” made a fundamental mistake in really only having a strategy for financial Contacts: Tel. 0845 607 0140, www.cogent-ssc.com services and not for manufacturing.

This government and the one before Who is eligible for help from Cogent? Any business of any it seem almost in awe of the City of size within Cogent’s SSC remit (see above).

London. In a sense we have seen this with the enormous bail-out of the quangos and authorities, I think the sooner they banking system, but we haven’t seen are destroyed the better.” significant support for the manufacturing sector.”

Is ‘despair’, then, a suitable description “And if we go back to business as usual of manufacturing’s view of the skills training we are going to have this bubble economy all swampland? “Oh it’s far worse than that. What’s over again,” he adds “In the future I think we are the next term up in the dictionary?” Brayshaw adds. going to have to spend more and make more, In this mood, or something like it, British industry and this means an industrial policy with training awaits the UKCES’s simplification review. And the as a key element.”

IoD’s Mike Harris is in no doubt of its significance.

Meantime the overwhelming consensus “Arguably it presents the best opportunity in a with those stakeholders TM spoke to remains that decade to fundamentally rethink the skills system Britain’s skills training maze resembles, in Nick we have ended up with. If it doesn’t deliver genuine Brayshaw’s words, “something from Planet Zog.” simplification that employers can feel on the “Manufacturers have put this whole ground, it will rank as a missed opportunity and a subject into the ‘Too Difficult’ box, and such great disappointment.” is the low level of engagement with all these

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ITnews...

ERP

EFACS improves connectivity for Stainless Steel Fasteners Exel Computer Systems, the leading UK based author and developer of the innovative EFACS ERP system, announced that Stainless Steel Fasteners (SSF) is enjoying a growing range of benefits since its successful EFACS implementation.

and flexibility the company needed, with SSF deciding to invest in EFACS – already successfully being used elsewhere in the group.

Increased visibility, connectivity, and control are amongst the earliest benefits for the £9m turnover, global market leader in special fastener manufacturing. The company’s previous combination of disparate accounting, Customer Relationship Management (CRM) systems, and a range of specialist spreadsheets did not provide the visibility, control,

Looking to the future, Tongue sees further benefits to be had from a deeper use of EFACS’ existing functionality, especially in the area of CRM. Machine timings and routings may well be added into wider MRP/ ERP considerations, in addition to further streamlining of Export documentation, where EFACS E/8 has already saved one week per month.

Matthew Tongue, resource manager, SSF, said: From the outset we found all the material control data to be totally accurate and providing the variable route flexibility we needed in order to deliver the quality and flexibility required by our customers.”

CAD

Nottingham University uses PTC technology to drive engineering degrees PTC announced that the University of Nottingham’s Faculty of Engineering has deployed PTC’s Pro/ ENGINEER to teach mechanical engineering, design engineering, product design, manufacturing engineering, and management undergraduate courses.

The University Plus Site licence, supplied by PTC Value Added Reseller Optima, now gives over 1200 students the latest engineering tools to help prepare for their future careers. Simon Harrison, course director, Nottingham University, said: “We are particularly impressed with the way in which PTC’s technology will allow our students to train to a high standard.”

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“Our aim is to provide students with the right training and skills, so that when they leave university they are ‘ready to engineer’ and are familiar with the tools in the market – Pro/ ENGINEER does just that. It offers a complete suite of concept to manufacture, enabling Product Design and Mechanical Engineering Students to utilise a tool that is considered best in class.”

The University of Nottingham is one of the premier Universities in the UK. At the recent 2009 Royal Society for the Encouragement of Arts Design Directions awards – known as the Oscars of the design world – three of its students were awarded top places. The winning third and fourth year students are part of an innovative design course in the School of M3 (Mechanical, Materials and Manufacturing Engineering) at the University, all of which focuses on the use of Pro/ENGINEER. Richard Allan, channel business development director, PTC, said: “We are proud to contribute to the education of the next generation of highly skilled engineers who will continue to drive product development in the UK, ensuring that our engineering industry continues to lead innovation.”

IT in

manufacturing

News in brief SAP reports expansion and improvements for its partner program Change management

IBM to implement OSCL lifecycle tools for its Rational products IBM announced that four of its Rational products are among the first to apply the new Change Management services developed by the Open Services for Lifecycle Collaboration (OSLC) initiative.

As a founding member of the OSLC, IBM is working with an open community of software vendors, integrators, and corporate software delivery teams to develop specifications that make it easier for development teams to use lifecycle tools in combination while more efficiently sharing information between systems.

The first OSLC specification on Change Management was published this summer. It defines a common set of services and formats for interacting with change management systems. Tools that use the new Change Management specification can more easily maintain tool integrations from different vendors and better manage the information contained within their change management systems.

IBM is the first industry vendor to deliver products that implement the OSLC Change Management services. The interfaces are supported by the latest versions of IBM Rational Team Concert and IBM Rational ClearQuest software. A version for Rational (formerly Telelogic) Change is also due out in September. Additionally, IBM Rational Quality Manager and IBM Business Partner Tasktop Technologies use OSLC interfaces for integrations with Rational Team Concert, Rational ClearQuest, and Rational Change.

Said Martin Nally, chief technology officer, IBM Rational Software: “Software delivery teams rely on a range of tools from different industry sources to get their job done. IBM did not hesitate to embrace the OSLC Change Management services in its Rational software development solutions because we recognise the tremendous potential of the industry coming together to agree on ways to integrate and share data between tools.”

SAP has successfully transitioned all software solution partners to the SAP PartnerEdge program, and is now leveraging the company’s partner program framework to provide an array of innovative business services and tools to additional partner types that make up the SAP partner ecosystem.

Launched in May 2005, the award-winning SAP PartnerEdge program is a comprehensive business framework that provides businessenabling tools, resources, and program benefits to help ensure a productive partnership and consistent service quality for a broad array of SAP partner types.

Following the transition of the SAP software solution partners into SAP PartnerEdge, the program is now also being extended to SAP BusinessObjects solution resellers that are authorised to resell software from the SAP BusinessObjects portfolio.

Sanofi-aventis witnesses healthy benefits with Lanner

Lanner, the Business Process Improvement (BPI) provider, announced that leading pharmaceutical company, Sanofi-aventis, has completed the implementation of WITNESS into one of its major UK sites WITNESS works by giving users the power and flexibility to model a working environment, simulate the implications of different business decisions, and understand processes, however complex.

Said Trevor Norman, continuous improvement manager, Sanofi-aventis: “With the help of Lanner, we simulated a virtual model of our production lines with all new production methods accounted for.”

“This provided us with the data needed to maximise production efficiency, which in turn reduced our inventory by a massive £1.4 million in the first six months alone.”

EPM

SAP achieves fastest market growth rate of top five vendors Market intelligence firm IDC has ranked SAP as the market leader in performance management and analytic applications, based on software license and maintenance revenue.

The aggregate performance management and analytic applications market includes financial performance and strategy management (FPSM), and analytic applications including customer relationship management (CRM), supply chain, workforce, and service operations analytics.

This market, which SAP terms enterprise performance management (EPM), represents $8.37 billion out of the total $24.1 billion business analytics software market. The market analysis, titled “Worldwide Business Analytics Software 2009–2013 Forecast and 2008 Vendor Shares,” found that

SAP leads in the performance management and analytic applications market, with a 20.3 percent share of the market.

The IDC report also shows that year-over-year growth rate in this market segment for SAP was 13.9 percent — higher than the growth rate for the next five competitors, as well as the market as a whole, which grew 8.9 percent.

Further, IDC states in “Worldwide Financial Performance and Strategy Management 2008 Vendor Shares: Market Consolidation Drives Domination” that SAP now has a 23.7 percent of the FPSM market. According to the report, SAP experienced 28.4 percent year-over-year market growth in FPSM, which was double the overall FPSM market growth rate of 12.2 percent. Overall, SAP was the fastest growing of the top five vendors in the FPSM market for two years in a row.

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Is your software working for you?

Is your business system supporting you or just another drain on resources?

Are you looking for a new system to help your business or Lean Manufacturing project?

Are you really using your existing system to it’s true potential?

It

may be quite a while since you implemented the business system software in your organisation. Are you really getting the most out of it?

Surveys of organisations with ERP packages consistently report less than 30% utilisation. No organisation consciously plans to use only 30% of its costly investment – so what is going wrong?

Let’s just consider what happens in your business.

Staff move or leave – handovers are rushed and remaining staff gain additional responsibilities New staff may now be involved in the day-to-day operation of the system Business processes change as new products and services are introduced People have long forgotten any initial training

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New versions of the software have been installed So, progressively less and less of the system may be well understood and used effectively. Accurate management information is the lifeblood of your company – the basis on which you take critical decisions for your business.

You may not be using your system effectively or anywhere near its true potential. Indeed, it is not uncommon to find organisations embarking on system replacement, believing their key requirements cannot be met, simply due to decreasing knowledge levels in the organisation.

Similar issues arise with data integrity and consistency. Over time, more people become involved with data set up and the original guidelines for product groupings, use of analysis fields etc. become blurred.

How many times do you find products, customers and suppliers omitted from key reports or at least not where you expected them to be?

Fortunately there are shining exceptions to this picture. Successful businesses recognise the need for regular system reviews and staff training updates.

The system grows with the business, not only supporting changing business processes but delivering competitive advantage through timely, and relevant information.

So, think when your organisation last performed a system review; could you benefit from this almost immediately – after all, you have already paid for the software ! Can you really justify any part of your organisation operating at less than 30% efficiency?

Steve Tattum – Product Manager

At Sage, Business Intelligence, we work hard to give you insight into your business. Give us a call to find out what we’re doing and how we can help. Tel: 0845 111 5555 www.sage.co.uk

ITnews...

Acquisitions

SCH Distribution acquires IQ Sys to underline market leadership in Citrix SCH Distribution (SCHd), Europe’s largest independent technology business, has acquired IQ Sys Limited, the distribution market leader with Citrix in the UK. As part of SCHd, IQ Sys can now extend its reach as part of a premier and established distribution group that has market leading relationships with all the key vendors, including HP, IBM, Sun, and VMware. The combined entity will account for over 60% of UK sales, based on current figures. SCHd will retain and build on the IQ Sys identity, which will trade alongside its other distribution brands.

Sir Peter Rigby, chairman and chief executive, SCH Group plc, said: “The deal forms part of a clear and long standing strategy to evolve the breadth and depth of SCHd’s capability to enable resellers to go to market with the solutions and services demanded by their customers.”

IFS acquires MultiPlus Solutions IFS, the global enterprise applications company, announced that it has signed an agreement with Qurius International Holding B.V. to purchase 100% of the shares of MultiPlus Solutions AS. The purchase price will be paid in cash, with the acquisition further strengthening IFS’ market position with respect to project-based solutions (PBS) for targeted industry sectors. The transaction is expected to be completed within four weeks, subject to the completion of regulatory and other formalities.

MultiPlus Solutions, based in Sandefjord, Norway, and with sites in China and Denmark, is a wellestablished vendor of project-based business applications to the marine, EPCI (Engineering, Procurement, Construction, and Installation), and project manufacturing industries. The company offers a complete ERP suite, including functionality for areas such as: finance; project control; maintenance; manufacturing; document management; and human resource management.

Said Alastair Sorbie, CEO, IFS: “With the acquisition of Multiplus Solutions IFS can be seen to be executing on its stated strategy for growth and doing so by growing in one of its primary target sectors.”

“The industries served by project-based solutions (PBS) is a market in which MultiPlus Solutions is a well respected supplier, and where IFS seeks to achieve a market-leading position with its excellent customers and deep industry knowledge.”

Miscellaneous

AspenTech wins prestigious R&D 100 award for software innovation AspenTech and the National Institute of Standards and Technology (NIST) have received an R&D 100 Award for innovation in software from R&D Magazine.

to be recognised by such a prestigious awards program. It is the result of a combination of factors unique to AspenTech, especially our commitment to R&D investment that is unmatched in engineering and optimisation software for the process industries.”

The breakthrough collaboration gives process engineers out of the box modelling capabilities for a wide-range of chemical processes, saving months of time when estimating and evaluating thermophysical properties of chemical compounds for the design and optimization of process industry plants.

“This is coupled with our long-standing recognition of the importance of properties and thermodynamics in process engineering, longterm cooperation with NIST, and the deep domain knowledge of our industryleading experts in process modeling and optimisation.”

Willie Chan, senior vice president of research & development, AspenTech, said: “AspenTech is honored

Since 1963, the R&D 100 Awards have honored such revolutionary technologies as the fax machine (1975), the liquid crystal display (1980), and HDTV (1998).

Hozelock selects Kronos to drive efficiency Kronos announced that Hozelock, the market-leading garden watering, spraying, and aquatics manufacturer, has selected Kronos to improve operational performance.

Kronos will replace a number of legacy systems and will provide Hozelock with a single, fully integrated workforce management and shop floor data capture solution for its factory based in Sutton Coldfield, Birmingham.

Said Peter Rush, managing director, Hozelock Limited “Kron os will give us instant feedback on labour costs, labour availability, and employee performance.”

Following implementation of Kronos, executive dashboards will provide real-time key performance indicators (KPIs) on shop floor productivity, work-in-process (WIP), and costs focusing on labour efficiencies, labour utilisation, and quality.

“Our workforce is a large yet controllable expense, and to compete effectively in this market it is imperative that we control labour costs and utilisation while still providing our customers with the excellent service they expect from Hozelock.”

Have your say at www.themanufacturer.com

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1 2 T H

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T O W E R

H O T E L ,

L O N D O N

On November 12th 2009 The Manufacturer welcomes readers to its annual conference event. To help manufacturers succeed in these troubled times and to arm them with the knowledge they need to succeed with agility in an uncertain future, our team of researchers and events producers have created an inspiring programme of presentations, workshops and debate sessions from a select group of exemplary organisations. This agenda will be headlined by some of the industry’s most prominent role-models. Individuals committed to galvanising support for a resilient and vibrant manufacturing future

Keynote and plenary participants include: Stephen Radley – Chief Economist & Director of Policy, EEF Responsible for EEF’s work on the economy and industrial policy Stephens role has made him intimately conversant with both the macro and micro-economic issues effecting the manufacturing landscape.

Stephen’s experience as an industry economist is has deep foundations in a career that has included roles as Chief Economist at the Henley Centre and four years in the CBI’s Education and Training and Employment Affairs Directorates

Julian Hunt Director of Communications, Food and Drink Federation Previously the award winning editor of the awardwinning editor of The Grocer Julian has 19 years experience as a business journalist focusing on consumer goods, the global packaging industry and the international shipping sector. He now orchestrates the FDF’s media relations and has an astonishingly well informed appreciation of the challenges currently facing food and beverage manufacture in the UK with an emphasis on policy development and industry impact.

Professor Mike Gregory, CBE Head of the Institute for Manufacturing, University of Cambridge Following an early career in industry Mike was critical to the establishment of the Institute for Manufacturing at Cambridge University an institution which is still shaped by his vision for a broader understanding of manufacturing.

Mike also now works closely with industry and government to promote considered policy formation and guide manufacturing strategy. He chairs the UK Manufacturing Professors Forum and is a member of the UK Government’s Ministerial Advisory Group on Manufacturing.

Charles Morgan Chairman Morgan Motors Following an exciting and often dramatic career in the media Charles Morgan has gone on to initiate a reanimation of Morgan’s manufacturing and design processes. He was responsible for the development of the hugely successful Aero 8 and AeroMax models and is now heading up the innovative new consortium collaborating on ‘The LIFECar Project’ for a low emissions sports car. I s an active advocate of strategic skills development for industry.

Pierfrancesco Manenti, EMEA Research Director for Manufacturing Insights, IDC Insights A senior executive with over 15 years industry experience in product management, marketing, business development, manufacturing operations and supply chain management consulting and solutions implementation, Mr. Manenti is a thought leader with strong focus on the business value of technology in manufacturing.

Allan Cook CEO, Cobham Plc. Aside from his role as CEO of the FTSE 100 aerospace and defence company, Cobham, Allan is also President of ASD, Chairman of the National Skills Academy for Manufacturing, a director of the Industrial Forum and the DTI Aerospace Forum, a committee member of the UK Ministerial Advisory Group for Manufacturing to name just a few of his commitments.

He is a dedicated advocate for the manufacturing industry who is resolute in his desire to secure a competitive and dynamic future based on pioneering skills and technology.

To book your place and for more information on the sessions and speaker’s go to

Four Streams to accelerate your journey to competitive excellence These streamed sessions focus on the areas which our research amongst the manufacturing community have shown us are key in your quest survive, sustain and stimulate your business- choose which sessions apply most closely to your specific needs and gain pragmatic, applicable knowledge.

STREAM 1 Your Supply Chain Throughout recession many organisations have learnt the hard way just how critical security of supply is to their ability to survive. This stream will show how to achieve efficiency, effectiveness and agility in your supply chain. We will also address the global supply dilemma, carefully considering where to manufacture to maximum benefit to your company and finally, taking a different perspective, we will raise awareness of your potential as a supplier- how can you think creatively around your product to take advantage of emerging industries that will play dominant roles in the future of the national economy.

Organisations presenting include:

STREAM 2 Your Customer The value of knowing your market and strategically nurturing customer relationships has never been higher. Learn how to rapidly respond to changing demand- streamlining engineering and design into your production strategy to create products that pinpoint customer needs.

We will see how to then take this specification to new levels through the latest approaches to service and support and crucially we will address how to lean up to deliver all this for the price the customer demands.

Organisations presenting include:

STREAM 3 Your Sustainability Involving a multiplicity of interpretations ‘sustainability’ has been a difficult issue for many manufacturers to approach. This stream will take a business sustainability approach that will clarify the integral role that environmental concerns and compliance issues have in a broader requirement for long-term business stability. We will look at the benefits of cutting waste, the carbon challenge, power options, efficiency benefits and impact on brand. How to incorporate the national move towards ‘high-value manufacturing’ into your business sustainability plans will also be addressed.

Organisations presenting include:

STREAM 4 Your Workforce The key-stone upon which success is built. The recession has demanded a heavy toll from employees within the manufacturing industry but ensuring the continued development of this group of individuals is crucial to any organisation’s ability to survive and compete. This stream will show how some organisations have safeguarded their present and their future by creating specific work cultures that facilitate efficiency and understanding the need for investing in skills -strategically managing their placement and development for maximum effect.

Organisations presenting include:

The Manufacturer Directors Conference and The Manufacturer of the Year Awards In association with:

www.themanu factu rer.com/directo r sco nferen ce

Quality Feature…..

When it comes to manufacturing it’s all too easy to take the issue of quality as a given. After all, no-one wants a poor quality product or service yet it’s not too long ago that ‘quality’ was seen as an order winner as opposed to an assumed standard.

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ithin a manufacturing context there are varying definitions of quality, from industry bodies such as the Industrial Organisation for Standardisation through to individual customer expectations and requirements. Yet however one defines the concept of quality, the end product and the degree of quality achieved is a culmination of all the processes that contribute to it. And like many such interlinked processes, failure in just one area can often lead to the failure of the whole.

A good example of this is outlined by Andrew Wallace, IT Manager for Martin Aerospace, a global supplier of precision manufactured products to Aerospace and other quality critical industries. “Quality control and traceability is central to our business. Not just at a batch or individual product level, but right down to every process on every raw material item. One faulty bolt is enough to potentially bring down a plane – so there can be no margin for error”. Given that the company handles orders from simple one process operations which can be completed in under two hours through to complex jobs with ten distinct operations including a range of subcontracting operations that can take up to six weeks to finish, it’s no surprise that every process is recorded as it is completed. The product is quality checked at each stage at a sample batch level with each individual product then being rigorously tested across every required parameter before being dispatched.

All this has to be achieved while managing the flow of work to and from a wide range of subcontractors as well as the challenges traditionally associated with managing production lines - namely maximising capacity while avoiding capacity constraints minimising changeovers and optimising sequencing of product through the company’s varied machine resources.

Achieving this placed ever increasing strain on the company’s existing five disparate IT systems which were supplemented by complex Excel spreadsheets as well as a variety of manual systems. This meant that it was simply impossible for anyone to accurately identify where any particular job was at any time on the production floor without physically going onto the floor and finding it. Not only was this very time intensive, it meant pulling staff off an existing job to do so which further added to the time cost involved. Another problem lay in the specialisation of knowledge within the company or as Wallace puts it, “everything tended to be in the head of the Production Manager which was

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fine as long as he wasn’t ill or on holiday.”

Growing pressures internally from achieving increasingly ambitious boardroom targets and externally from customers keen to see suppliers working with the latest manufacturing business systems led to the decision to invest in a fully integrated business management system that would allow the company to maintain its absolute commitment to quality. After a thorough evaluation of a number of alternatives, Martin Aerospace invested in the EFACS Enterprise Resource Planning (ERP) solution from Exel Computer Systems, via Exel’s Scottish partner, RAD Software.

Within one month the Sales department was using the system with the entire company being fully reliant on EFACS in under 3 months. The benefits were therefore felt very quickly, beginning with the automatic creation of all Bill of Material (BoM) information, including routing information complete with unique bar code information allowing each process step to be logged in real time, ensuring the system was always fully up to date.

The company now had complete visibility across not just the production floor but the entire company which led to a massive reduction in Work in Progress (WIP) as well as stock levels. In fact, thanks to EFACS, Wallace believes it’s now possible to do as much business in one day as it previously took a week to do, while maintaining the company’s ability to deliver consistent quality at every level. And while Martin Aerospace can’t fully quantify precisely how much of a cost saving this proved, Wallace smiles when he says, “it’s an awful lot of money.”

While there’s no denying that Manufacturing IT and technology as a whole have enabled manufacturers across the board to achieve ever higher standards of quality at an increasingly consistent level, the pivotal role of human skill is still an essential prerequisite to ensuring quality success for many companies. Especially for companies such as Mode Lighting, part of the TCL group where as General Manager Ian Hodgson remarks, this relies, “very much on the dedication, accuracy and skill of our people due to the labour intensive nature of much of our production.”

With offices and manufacturing facilities in the UK as well as associated companies in the Far East, Mode Lighting has an 80/20 split between the manufacture of Mode product and subcontract product and prides itself on its service and design capabilities as well as quality. Achieving the latter is complicated

Andrew Wallace

Craig Hastings and Ian Hodgson

by production which can start in many different locations but more than anything, by different products that require different skillsets at different stages. And Mode Lighting’s personnel have a diversity of skillsets as well as a wide variety of working practices, all of which create a substantial planning and scheduling challenge. So much so that the monthly production plan that had to be generated by complex, manually completed spreadsheets was described as “educated guesswork” by Planning Manager Craig Hastings.

Consequently the whole company suffered from what Hastings describes as a complete lack of visibility about what was happening, when, and where. The general distrust in the plan had the knock-on effect of planning often being subject to the age-old rule of ‘He who shouts loudest’. Though as he notes, “this didn’t take into account that the one shouting loudest didn’t recognise or see the impact that this would have on existing orders.” He continues, “the reality is no-one actually knew the impact of the changes to the plan and decisions could be made that were less than optimal.” This lack of visibility had a direct bearing on the quality of customer service levels due to manufacturing’s inability to keep to its customer delivery dates. While noting that the means didn’t even exist to monitor ‘On Time and In Full’ delivery statistics, Hastings guesses it was as low as 50%.

The company had already begun looking at computerised planning and scheduling solutions as well as ERP replacements for the company’s existing Fourth Shift ERP system. This had bee less than positive as Hodgson notes. “These could cost £80K or more and might not provide the graphic planning representation wanted by planning. It would also require a major change to some, if not all the ways of working in the business and implementation time would be long.” Mode Lighting had already been approached by Preactor reseller Adrian Birt of Planning Board but it took Hodgson’s arrival to arrange for a demonstration of the Preactor system. After seeing a working proof of concept based on live data combined with Preactor’s large number of reference sites, Mode Lighting knew that Preactor was the way ahead.

Following a decision to invest in Preactor in February 2008, Hastings spent a month working with the planning team distilling all his unique planning and routing information into a comprehensive spreadsheet. A key aspect here was programming

in the fifteen different calendar permutations that covered every worker in the company and adding this to the other planning information. Hastings again, “Much of our potential to optimise our human resources rests on the accuracy of the data we use concerning how long every action takes. Because we schedule by human resource, this meant accurately measuring how long each person takes on every task and basing routing times from this.”

The system successfully went live in July 08 with the new found visibility delivered by Preactor having what Hodgson describes as a profound transformational effect on the company, especially is its use of its all important human resources. “It has brought stability and realism to our planning. Previously, Sales had by and large driven the Planning Department on a priority basis. In some case this lead to inefficient use of staff and high levels of WIP. Now planning can add real value by determining what gets made when, by whom, and importantly in the most efficient manner.” As a result, staff utilisation levels have increased from a guestimate of 60% to now over 82% which in turn has enabled the company to cope with the fluctuating levels of demand in the current economic climate. Of course the ultimate beneficiary of this has been the customer. Hodgson is rightfully proud that that the quality of customer service has improved with On Time and In Full delivery dates now being 85% and with plans in place to drive this even further.

Published in association with: PREACTOR INTERNATIONAL Tel: +44 1249 650316 Email: sales@preactor.com www.preactor.com

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Five maxim compass

navigates supply chain efficiency Richard Renshaw and Alan Braithwaite – both of LCP Consulting and Cranfield University – have developed a five maxim supplier management ‘compass’ to ensure supply chains remain efficient during the downturn while primed for the upturn.

In

a tough economic climate, when demand is down, there is an imperative for companies to review their supply chains to reduce cost, remove activity that reduces profitability and conserve cash. Many midsize manufacturers have found themselves particularly vulnerable in the downturn with long term customer and supplier relationships on which they are particularly dependent and where expected volumes just aren’t there.

Preservation of viable economics alongside valued long term relationships becomes very testing, requiring a degree of trust not required in brighter times. The truth is this is a situation that many have never previously experienced.

We have developed five maxims for the recession – a ‘compass’ that can be put in the hands of functional managers. The maxims are:

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Supplychain and logistcs

Reduce unprofitable complexity:

It is crucial to truly understand how both customers and products erode margin. Our experience is that 15% of either or both customers and products erode more than 50% of profit potential. Designing this group out or designing their profitability back in is a key step to connect the supply chain to the company’s performance. We also find that these unviable activities often detract from profitable activities as well as creating losses in their own right

Build in customer service excellence:

Service excellence is often discussed as a marketing imperative, but seldom connected to the true cost of non-performance both in sales and recovery costs.

Outstanding performance protects the customer base that you want to keep and avoids the costs of replacing them when they leave, as well as making good your mistakes. Operational excellence led by supply chain design and planning is a critical capability.

Design, plan and execute for agility:

In the current climate, demand will be unpredictable and volatile; companies must respond without lots of inventory, huge capacity and asset surpluses to cope with change. Agility is about fast flexible processes to meet real customer demand and only inventory that will not be a risk to the business. Speed is the key; fast and accurate processes have been shown to

improve customer service and reduce inventories and manufacturing assets.

Synchronise and integrate to eliminate waste:

In our experience lean management methods can cut waste and cost along the supply chain, streamlining flows and making operational performance a central focus. Companies that have applied this generally admit that there is still much more to play for; however they are in a strong position entering the downturn

Collaborate to leverage performance:

Building and nurturing key relationships along the supply chain will help suppliers give you more for less; whereas if you just negotiate on price you will miss out on benefits and they will leave you high and dry when times get tough. For many this will be a new skill and mindset. The future will be about cooperating and competing through shared supply, manufacturing capacity, and distribution and logistics; service providers will need to create blocks of scale and give a level of cost and service transparency that has been lacking Although all five of these are critically important, the last three are especially relevant to the challenges for mid size manufacturers and their partners along the supply chain.

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Keeping suppliers in the link

The unpredictability of today’s demand requires an agile response that bridges long term relationships, eliminating the inflexibility that might develop as a result of the norms of better times. It is necessary to work with suppliers to accelerate the supply chain, which should involve both information and physical flows in the supply chain. The first step on this journey is to start regular communication along the chain on supply chain; the aim is to ensure supply chain planning processes in customers and suppliers connect in a way that starts to anticipate problems and opportunities. This does not imply systems integration but does require trust, for example sharing forecasts earlier or direct sales data to enable earlier reaction to changes in demand.

There are well established processes to support this maxim with good benchmarks; making them real begins with agreed rules. Very often we find that rules have been established but there is a cultural acceptance that ‘rules can be broken’ because ‘we are operating under exceptional circumstances’.

This leads to an illusion of flexibility in planning that is not grounded in the reality of the physical supply chain. It also creates cost faster than it adds value.

Rules need to be firmly established with realistic (and

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challenging) batch sizes, capacity flexibility, lead times, etc. The process that integrates this approach, ensuring demand and supply is balanced with financial implications understood, is often called Sales and Operations Planning (S&OP).

LCP Consulting was recently working with a mid scale pharmaceutical manufacturer where the perceived wisdom at a functional level was that reacting to urgent orders a couple of weeks out was doing what it takes to be flexible and give good customer service. The reality was that unplanned demand was disrupting planned supply and compromising wider customer service.

Establishing clearly defined time fences to prevent this conflict and providing scheduling stability improved customer service from 42% to 68% in 8 weeks.

It takes disciplined focus from senior management to judge how to intervene to get the required agility, especially when requests from customers with urgent orders come in. This is being addressed within the implementation of the S&OP process.

A defined set of metrics helps the company navigate, prioritise and focus, ensuring day to day delivery is achieved. KPIs can indicate recovery from irregularities and progress towards strategic goals, giving guidance throughout the supply chain and hopefully driving the right

Supply chain and logistcs

The same pharmaceutical company experienced much animosity in planning meetings as a sister bulk pharmaceutical plant was persistently castigated for being the packing plant’s worst supplier. Interplant communication thus became strained. The measure of supplier delivery performance was changed to be one based on original packing plant request date rather than a modified date. The focus then changed to understanding changes in packing schedules and the contribution to the poor performance from the packaging suppliers. The planning dialogue was transformed and as a result a more value added focus was generated.

Taking some time out

Time compression has been a supply chain concept for years. But the recession could not be a better time to seek its benefits. We find that faster is invariably better and cheaper; less time means less inventory which frees up precious cash. At first glance this is counterintuitive. But think when things go wrong, faster means that less of the supply chain is affected, less stock is to the wrong specification, and fewer customers are affected. Implementing time compression requires mapping out the supply chain, noting actual process durations, cycle & transit times, batch sizes and frequencies, so that the opportunity for reduction can be identified. This is far more effective if it spans both in-house and suppliers’ processes.

A speciality chemicals manufacturer recently mapped out some of its problem products in response to a strategic goal of achieving an average of less than 60 days end to end inventory. Analysis revealed one product had 89. Much of it was due to practices adopted with its logistics provider like continually sending 5 containers in a single shipment, and also of a sub contractor who had built a comforting queue or work in progress prior to his process to ensure high equipment utilization. Joint investigation with the sub contractor has enabled improved scheduling to be implemented to reduce waiting time and remove 10 days of inventory. This was an example of simple integration to eliminate waste. The example also highlights an internal communication problem, a global average being seen as a target, to get the average some products will need to be much faster!

A medium size Scandinavian food manufacturer had significant problems with waste in its chilled food lines. This was caused by the combination of short shelf life (storing excess production as inventory for more than a week was not an option) and uncertainty of demand on a week to week basis. What was open for discussion however was how the shelf life was shared between the manufacturer and wholesaler (but not the retailer) and the actual weekly sales from the wholesaler. This has led to a new level of collaboration being implemented , leading to more accurate forecasting, a better schedule and less waste not only at the manufacturer but at the wholesaler. Taking the time to develop the necessary relationship and trust to make the collaboration effective was pivotal.

Give visible sponsorship

To make consistent change happen as in these examples requires active executive sponsorship on short timescales. Current circumstances are demanding that companies react in ways that are different to 12 or 18 months ago. We think this is the biggest challenge to unlock value from our maxims.

The transparency and openness required represents a big mindset shift.

Sharing inventory and demand data with wholesalers would not happen without senior commitment and assurances through the supply chain on how information is used. This has made the food manufacturer easier to deal with as a supplier and makes the wholesaler a preferred customer and less of an opponent.

Making resource available to enable valuable change happen is a prerequisite. However, often the expectation is that it fits in the background at a lower priority than the day job. This means many things happen in parallel, not giving the desired effect of supply chain acceleration. The imperative is to focus on what will deliver value quickly, make decisions about how resource will be allocated and give visible sponsorship so others can feel comfortable about making progress.

This plan should be sponsored inside the company and across the divide with suppliers or customers.

defined set of metrics helps the “Acompany navigate, prioritise and focus, ensuring day to day delivery is achieved

“

kind of behaviour at all levels of management. When the metrics are inappropriate it’s not surprising that the wrong behaviours are experienced along with poor results.

The focus here is value; not all suppliers within the supply base have the same value, some are genuine partners you want to take forward with you but supplier segmentation will tell you that some are not. Any sense of ‘duty of care’ must be applied in the right place, which should lead you to ask how important you are to your own customers.

Following the maxims, at least in part, will provide focus and value that is beyond the dreams of most CEOs. Technical skills alongside open and trusting communication are imperative for realising that value. end Richard Renshaw and Alan Braithwaite are principal consultant and chairman of LCP Consulting respectively. Alan is a visiting professor at Cranfield University where Richard also researches and lectures.

LCP Consulting identifies where supply chains make major contributions to how businesses operate profitably and compete effectively. It supports businesses to review, re-design and implement changes to their end-to-end operations. Our factbased diagnostics pin point exactly where and how to cut costs, enhance operational efficiency and invest for the future.

www.lcpconsulting.com

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Manufacturers – don’t lose the opportunity to reclaim tax!

Until

April 2008 it was possible for businesses to reduce their Corporation Tax liability by claiming tax relief for the cost of industrial buildings.

These Industrial Buildings Allowances (IBAs) meant that a business could, over the course of 25 years, obtain tax relief for the entire cost of an industrial building.

Kingston Smith’s David Goodridge explains some tax saving opportunities based on fixtures – both integral and other features in a building – in the wake of the discontinuation of Industrial Buildings Allowances.

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From April 1, 2008 IBAs began to be phased out and no allowances will be available after April 1, 2011. Given the phasing out of IBAs it is now more important than ever that manufacturing companies consider carefully what other tax saving opportunities are available to them.

Other available allowances Fixtures

While industrial buildings qualified for an annual tax writing down allowance of 4% of cost, plant and machinery qualifies for an annual allowance of either

Specialfeature Kingston Smith

Other fixtures – any item of plant or machinery that is part of a building, but is not an integral feature. These qualify for a 20% reducing balance annual allowance.

What you need to consider

Many businesses may have relied on claiming IBAs to obtain tax relief for expenditure on a building. Now that IBAs are being phased out, businesses should be looking closely at buildings that they are acquiring or constructing in order to maximise claims for plant and machinery allowances.

In order to make a claim for plant and machinery allowances on fixtures, it is necessary to identify the items and the qualifying cost of those items. If those costs have been directly incurred by the business it should be relatively straightforward to identify the relevant costs, although this can be complicated if the fixture is part of a wider project or construction of a new building.

If the business is acquiring a new building it is still possible to claim plant and machinery allowances on fixtures in that building in respect of a proportion of the purchase price. Costs can be allocated based on the replacement cost of the building and several firms of surveyors specialise in maximising claims for capital allowances on fixtures.

For illustrative purposes, if a company bought a building for £5m, the approximate tax savings for a 28% corporate tax payer would be:

Financial year ending

Industrial Buildings Allowances only

Integral features and Other fixtures*

31/3/2010

£28,000

£46,000

31/3/2011

£14,000

£30,000

31/3/2012

NIL

£14,500

31/3/2013

NIL

£12,250

*Based on integral features being 5% of cost, other fixtures being 5% of cost and including claiming the IBAs on the remaining 90% cost during the years ending 31/3/2010 and 31/3/2011.

If a business has already claimed IBAs on a building then there may still be a possibility of amending that claim in respect of expenditure incurred up to three years ago, provided that the tax returns for these years are not ‘closed’. Essentially, a company may amend its tax return within two years of the end of an accounting period. For example, a company with a 30 September year end has until 30 September 2009 to amend its tax return for the year to 30 September 2007 covering expenditure incurred since October 2006.

has already claimed IBAs “ Ifona abusiness building then there may still be a possibility of amending that claim in respect of expenditure incurred up to three years ago, provided that the tax returns for these years are not ‘closed’ If you have made IBA claims in respect of costs incurred in the last two years you should review this expenditure to see whether you could improve your tax position by making claims for plant and machinery allowances in relation to fixtures.

If the tax return in which IBAs have been claimed is ‘closed’, i.e. it is no longer possible to amend the return, it will generally not be possible to change a claim for IBAs to a claim for plant and machinery allowances.

This is because HM Revenue and Customs state that a

fixtures – any item of plant or “ Other machinery that is part of a building, but is not an integral feature — qualify for a 20% reducing balance annual allowance

“

Integral features – these include electrical systems, cold water systems, space and water heating, ventilation, air cooling, lifts, escalators and moving walkways. These qualify for a 10% reducing balance annual allowances.

What if I have already claimed IBAs?

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20% or 10% on a reducing balance basis. While the whole of the cost of constructing an industrial building would generally qualify for IBAs, certain parts of the building could also qualify for plant and machinery allowances: these items are called, collectively, ‘fixtures’. Fixtures in a building fall into two categories:

business has a choice to claim either IBAs or plant and machinery allowances. If a business chooses to claim IBAs this cannot be said to be an error or mistake in the tax return.

Action now

Manufacturing businesses should be speaking to their advisers in order to identify capital allowances claims that can be made in relation to fixtures and integral features both in relation to recent costs and future planned expenditure. Delay could result in allowances being lost and increased tax liabilities. end David Goodridge is a partner in the manufacturing group at Kingston Smith LLP.

Have your say at www.themanufacturer.com

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Giving gaining and

Mark Young explores the community initiative aspect of corporate social responsibility and finds that it pays to give

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Sustainable manufacturing

manufacturers’ aptitude for creating obscene amounts of ozone shattering, ice cap melting carbon emissions, it is often thought that companies should focus largely on environmental protection initiatives when fulfilling their corporate social responsibility (CSR) obligations.

However, what’s best for Mother Earth is only one, albeit crucial, component of CSR. Indeed, PepsiCo’s UK vice president of operations, Walter Todd, recently espoused that “no business can meet its shareholder obligations and do the right thing for the environment.” Undeniably, such a statement flies in the face of the continual proclamations to the contrary from government advisers, lean consultants, energy companies, and all those who want businesses to get on board with green without convincing them to concede on the bottom line.

Todd’s candour was high risk, but he wanted to bring green tax breaks to the agenda, and said it nonetheless.

Indeed, replacing machinery and making major changes to production processes is likely to create a bill that would take decades worth of the energy the equipment saves to repay. As a result, it is imperative that community programmes must not be considered as merely another tick box on the CSR checklist - they should stand on their own merits. What’s more, that community work which creates long term value, financial and otherwise, does not begin and end with a single stand-alone initiative.

Regarding best practice in such projects, “companies that are leading the way take a strategic approach to community investment,” says Catherine Sermon, national community impact director at Business in the Community (BITC). “They talk to experts inside and outside the business to inform genuine and useful action. They want to take action on the issues that are most relevant to their business, their employees, and their communities.

These companies also work collaboratively and leverage the support of their suppliers, partners, and customers to do likewise.”

BITC is a membership driven charity that provides advice and inspiration for companies to improve their impact on the wider society. One service it offers its members is a badge-of-honour qualification scheme called CommunityMark, a six month appraisal through which BITC advisors work with companies to align the firm’s community strategy with set regulations. This is assessed and invigilated by an independent panel who decide whether or not the firm is fit to receive the CommunityMark.

Nonetheless, ‘what’s in it for me?’ is a question decision makers have rightly been programmed to ask during the last fifteen years by another facet of CSR, namely ensuring that the shareholders back pockets continue to swell. While there are considerable benefits to be gained by implementing a robust CSR programme, however, a company’s returns will largely be parallel with that which it puts into any such initiatives.

Liberating employees and benefiting

By actively encouraging your employees to engage in local community projects, perhaps even granting paid

time off to do so – half a day per month, for instance – you will achieve multiple benefits. For example, employees’ morale, along with respect for the company, increases, given that you are liberating an individual to achieve or make a difference in an area of specific interest to them personally. You will profit through increased productivity, empathy from the employee with your cause as you empathise with theirs, and an increased likelihood of employee retention due to involvement in ongoing projects, not to mention the perception of favourable HR conditions.

Another beneficial by-product of your staff taking active roles in local projects is the skills and experience they could gain through involvement. These will largely be organisation, management, and leadership qualities, but there exists a definite scope for ‘hard skills’ such as basic engineering and tooling, practical ‘expertise like health and safety qualifications, or academic proficiency in areas like finance or law. Many of these skills will be transferable from the external activity to your business, and can be accommodated into employee’s existing roles or, alternatively, allowing them to further their career within the organisation.

programmes should not “ Community be considered as another tick box on the CSR checklist. They should stand up on their own. And what is more, decent community work should not begin and end with one standalone initiative

“

Given

Linda Rawson, of the Sheffield-based wire joiner maker Gripple, says the company’s community efforts bring its team closer together and instils a mindset of looking out for one another among its employees. This is a factor that the company holds vital to its commercial success. “Working within the community brings rewards in many disguises, and our work ranges work through our Charities Committee, fund-raising to working with schools, colleges and universities — and we even include community work in our Leadership Development Programme,” says Rawson. Gripple was recognised for its local community work this year when it was awarded best small or medium-sized business in the Institute of Mechanical Engineers’ Manufacturing Excellence Awards.

She says the company’s plethora of community projects: “Is not done to salve our CSR” but is a core value that the business operates by. “We feel that by engendering care for people in the community, we develop this quality in people at work as well.

The benefits we derive are enormous; development of leadership, organisational and team working skills are quickly transferred to work, which builds on our philosophy of being creative and innovative.”

A further example of employee upskilling comes from Cadbury. The confectionery maker carries out projects to help the homeless in its home city of

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Sustainable manufacturing

Birmingham. Cadbury employees take on roles as ‘job coaches’ for two week work programmes that the company offers to the homeless. One employee involved in the scheme is Lynne Hallworth. “Being involved in the programme helps me to improve the breadth of management skills, including accountability and managing diversity,” she said. “I also enjoy the fact that I am able to give something back to the community in which I work. The team of buddies here at Cadbury all enjoy the time they spend with the clients and feel positive about the scheme and the company’s involvement.”

involved in the programme “ Being helps me to improve the breadth

Lynne Hallworth, Cadbury

Inspiring a new generation

One tangible benefit resulting from local community support relates to that which manufacturing has been missing for the past three decades — interest.

While the industry as a whole has long bemoaned a skills shortage, this is not the root problem, or not entirely. Apathy is.

Nonetheless, Wigan-based electronics manufacturer C-TEC provides an example of how working in the local community can help to change the image of manufacturing as a sector, thus helping to source the talent needed for ambitious growth plans. The company is working alongside The Manufacturing Institute (TMI) as a patron of the latter’s ‘Make It in Manufacturing’ campaign — a programme aimed at dispelling the myths which continue to dog modern manufacturing in the minds of Britain’s youth.

C-TEC and the TMI held two separate day long practical events at schools in the local area to teach the children that “gone are the days of dark satanic mills and endless hours spent sticking widgets together on production lines,” says TMI’s Nicola Eagleton-Crowther. The pupils were set projects to design ultra safe buildings for a variety of customers, taking on job roles – from managing director, to operations, finance, and marketing managers – to experience every aspect of running a modern manufacturing enterprise.

“We feel, as manufacturers, that we have an obligation to promote manufacturing in the locality, and that if we want to build on our foundations we need to employ good people,” says C-TEC manufacturing director Steve Collier. “To get those people, they need to know about us – how we work and what we are trying to achieve – and the Make It campaign is

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Collier found that the enthusiasm and talent expressed by the pupils once they had gotten to grips with the sexier side of manufacturing amazed him. Thus, “it is so important that their creativity is channelled productively and innovatively,” he said.

Two pupils we’re identified through the campaign as potential future stars for the company, and C-TEC has arranged to take them on later in the year as part of the school work experience programme.

Like C-TEC, Gripple ingrains itself in local education system. Again, it finds the pupils “amazed at the wealth of job opportunities within the manufacturing sector, and the fact that it is not at all boring and dirty.”

But while many companies offer work experience placements, a lot of those will see the programmes as a favour to the local school which they will not directly benefit from. Gripple’s experience is different.

“

of management skills, including accountability and managing diversity. I also enjoy the fact that I am able to give something back to the community in which I work

perfect for this, given that it is very high profile and receives considerable press attention. It also enables us to speak to the young people there and then.”

Have your say at www.themanufacturer.com

“The work done by schools and colleges also helps us to achieve projects,” says Lawson. “This year work experience students translated key documents, saving us the task and broadening their language skills at the same time. Others helped to run our employee ‘have your say days’ where they learnt valuable communication skills and we gained some impartial help with collating information. At the end of the day we had the help we needed to get the job done.”

“Each year we take part in the Master Cutler’s Challenge, a region-wide initiative in which local companies are given £50 and asked to generate as much as they can for a specified local cause — last year we raised over £14,000 for local hospices.

Embracing the challenge and variety of initiatives (which included a scratch-card, a comic and a nearlynaked calendar) earned us the prestigious Judge’s Special Award. This year the focus is Sheffield Children’s Hospital.”

“We are also committed to supporting the Emmaus Project in Sheffield, both in terms of finance and provision of Management Accountancy skills. Our next community project is to give a small children’s gym a complete make over, with the Managers and Team Leaders on our leadership programme organising and managing the project.”

Keep it real

There is a wealth of benefits to be gained by focusing more effort on community projects. Instead of simply donating money to local charities, you can endear your company to the local community; upskill your exiting staff; instill a culture of cooperation and generosity among your employees; get access to the cream of the crop of new talent; build a warm and honest branding; get internationally recognised badges of honour; and much more besides. Resultantly, if you see community projects as simply another box to tick on your CSR checklist, they are unlikely to pay the same dividends as if you put citizenship at the pinnacle of your company culture.

Manufacturinginaction Putting UK manufacturers under the spotlight Orb Electrical Steels Factory of the month

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General manager, Mark Cichuta, tells TM how the steel producer’s comprehensive business transformation, Project Renaissance, has enabled it to thrive in an increasingly competitive market.

Apollo Fire Detectors

Fire detection equipment

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Manufacturing director, Barry Roach, discusses the ‘parts, people, and processes’ ethos central to Apollo’s ascent into the sphere of world class manufacturing.

Johnston Sweepers

Outdoor cleaning equipment

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Manufacturing director, Barry Roach, discusses the ‘parts, people, and processes’ ethos central to Apollo’s ascent into the sphere of world class manufacturing.

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Business

transformer In 2004 Orb Electrical Steels faced a precarious future. After 106 years of manufacturing steel, the management team decided that a comprehensive business makeover was required if Orb was to survive and thrive in the global electrical steel industry. Will Stirling talks to Mark Cichuta and John Homewood about a total business transformation.

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Factory of the month Orb Electrical Steels

Five or more years ago, had you asked a resident of Newport, Gwent what went on at the big factory off Corporation Road, it’s unlikely that they would have known.

Before 2004, the local community knew little about Orb Electrical Steels and many thought the buildings were merely redundant warehouses. Today Orb is firmly on the map. The local newspaper, the South Wales Argus, has a number of stories about the steelmaker on its website, under the name Orb or Cogent Power, its parent company, and Orb has made no attempt to keep the business turnaround that has occurred in the last five years a secret. In February 2008, for example, the company’s Project Renaissance sold 23 acres of surplus

land for development, revenues that were reinvested in the company to help update it for 21st century steel production.

Part of the investment was a £4m construction contract including a modern 30,000 sq ft head office, and several essential improvements to the factory buildings. It was the biggest investment in the business since the 1960s, according to General Manager Mark Cichuta. Other improvements included a new welfare centre, shower facilities, canteen and locker rooms and a new chemistry laboratory. And today an estimated £75m of the site’s spend goes into the Newport and South Wales economies.

Fundamental improvements in infrastructure were just part of a long term strategy to transform the whole business into a world-class company, a strategy that included: implementation of lean thinking throughout – which included reducing waste and focusing on a better quality, high value product – more efficient manufacturing processes; a

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Factory of the month Orb Electrical Steels

safer working environment; better staff facilities; improved customer and supplier relations and a shared vision and passion for the future of the reborn business from customers, suppliers and staff alike.

The history of Orb

Orb Electrical Steels is one part of Cogent Power, a wholly-owned subsidiary of Corus, in turn part of the Tata Steel Group. There are two other businesses in the Cogent group, Surahammars Bruks in Sweden and Cogent Power Inc in Canada. Orb in the UK specialises in the production and global sales of grain oriented steels used for electrical transformers and power generation.

Steel has been processed or manufactured on this site, alongside the River Usk in south-east Newport, since 1898 when the Lysaght family opened the first factory.

Orb Works produced aluminium for fighter aircraft in World War II, then in 1947 the decision was made to specialise in electrical steel. Also known as non-oriented lamination or grain oriented transformer steel, this is a speciality steel manufactured

in cold-rolled strips or laminations often less than 0.30 mm thick.

Once assembled, the strips form the laminated cores of power transformers, and the stator and rotor parts of electric motors.

The transformers are used in housing estates, hospitals, factories and other industrial applications. Orb now concentrates solely on the manufacture of these grain oriented electrical steels or “GO”.

Therefore the magnetic properties and permeability of the steel is vital to its end use (see box How GO steel is made).

Management decided that Orb would only survive in the global market for this high value steel product if it stripped down its business model and rebuilt it The factory is old – much of the machinery, while well maintained, is over 50 years old. “The cold rolling mills were built in 1950, a lot of the operating lines and ovens are from the 1940s,” says Cichuta. “The aim is through lean thinking and the redevelopment of technology to bring them into a more modern production capability. From 1950 through until 2006, things were happening but nothing in terms of major rebuilding or site investment.”

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Boulting Group plays major part in process line upgrade at Cogent Power - Orb Works, Newport, Wales

B

oulting Group has recently completed a complex Process Control project on a production line at the Orb Electrical Steel works in Newport against a challenging implementation programme.

As part of their improvement strategy, Cogent Power (a subsidiary of steelmaker Corus) upgraded the existing D3 production line from producing non-grain orientated steel to specialised grain orientated steel, offering very low power loss and high permeability in the rolling direction, used in applications such as high efficiency transformers.

Boulting were chosen by Cogent to lead and deliver the detailed design, installation, integration and commissioning of the complete process automation control solution for the new line, together with all associated electrical, instrumentation and communication cabling, operator station’s, motors, variable speed drives, SCADA & PLC control equipment.

In addition to the demanding schedule and complex scope associated with the project, on-site works were further complicated by the need for business continuity on parallel production lines in addition to the presence of other contractors working across the site. The vast experience of the Boulting project team in live production environments, combined with open and honest communication and co-operation between all parties ensured that the impact on the site was negligible and as such the project activities were performed safely over a five month period, using over fourteen thousand man-hours without

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an incident.

Boulting Scope Included: New SCADA – GE Fanuc iFIX for M3 Line monitoring & control.

PLC Replacement – Siemens S7 Processor & distributed remote I/O solution for M3 Line.

Systems Engineering: Implementation of Active Front End and Regenerative Drive technology to provide energy efficiencies and cost savings associated with reduced motor sizing and improved harmonics.

Introduction of Profibus DP configuration for Remote I/O, Line & MCC Drives, encoders and steering units to improve commissioning timescales and reduce costs associated with future plant growth and system diagnostics.

Management of applications interface with mechanical and instrument suppliers for new and existing M3 Line plant.

Cable schedules and associated block diagrams.

New safety guarding zone solution & E-stop integration to existing lines.

AC drive parameterisation.

Protocol conversion to interface into existing Exit control system.

Electrical control and drives engineering, including: Entry Drive Suite Entry MCC 11 Remote IO Panels Entry Desk 13 Control Stations New Furnace Flattening Suite

Modifications to Exit MCC & Interfacing to existing GEM-80 PLC Fibre Optic Network – Resilient, high availability infrastructure to support Profibus DP & Ethernet Communications for PLC & SCADA Applications Electrical & Instrumentation Cabling Systems Due to the size, complexity, environment and challenging timescales associated with the project, the Boulting project team were co-located with the client and other strategic suppliers at the Orb works to enhance project communications and promote supply-chain collaboration to ensure that key decisions and change control instructions were made and implemented swiftly to mitigate any risk to the project schedule.

About Boulting Group Boulting (www.boulting.co.uk) is a leader in implementing automation for clients’ processes covering a wide range of industries. These services are offered via a network of offices across the UK.

Published in association with: bOULTING gROUP

For more information please contact Nick Boughton

Tel: +44 (0) 1785 245466 Email: nickboughton@boulting.co.uk

Factory of the month Orb Electrical Steels

Orb Electrical Steels at a glance Location

Newport, South Wales.

Sector

Steel production.

Key products

Grain oriented electrical steels for power generation, distribution and end-use transformers. Supplies customers worldwide.

Annual output

2008 – 84,000 tonnes, 100,000 tonnes capacity following infrastructure improvements.

Ownership

Cogent Power Ltd. is a wholly-owned subsidiary of Corus. It comprises Orb Electrical Steels, Cogent Power Inc in Canada and Surahammars Bruks in Sweden.

History

Steel production at this site since 1898.

1947 – changed operation to specialise in electrical steels.

2004 – began wholesale adoption of lean thinking at Orb site.

2006 – began infrastructure redevelopment proje ‘Project Renaissance’.

Employees

400 directly in Newport; 120 indirectly on the site.

Turnover

£200m at Orb site in 2008, £400m within Cogent Power group.

Price range

Core product ranges in region £2,000-3,000 per tonne during 2008.

Key people

Mark Cichuta, General Manager Dr. John Homewood, Continuous Improvement Manager Mike Anthony, Senior Lean Coach Tony Cook, Operations Manager Jim Naylor, Managing Director - Cogent Power

Points of interest

“Staying Lean – Thriving, Not Just Surviving” by Cardiff Business School’s Lean Enterprise Research Centre, uses the Cogent Power story up to 2007 as a case study.

One change in this period was Orb’s purchase of some downstream businesses – customers in effect. Then in 2006 the company decided that didn’t work, so divested them. “It’s very difficult to buy and integrate your customers, because your other customers object,” says Cichuta.

From 1947 through to 2008, Orb Works produced two main varieties of electrical steel: grain oriented and non-grain oriented steel. In 2007, the decision was made to drop production of the, by then unprofitable, non-grain oriented product and focus exclusively on high value, grain oriented steel. The decision was firmly rooted in the lean thinking being adopted at the time, says Mark Cichuta “We decided we had two core markets: electrical steels for motor manufacture and those for transformers,” says Mark Cichuta. “Electrical motor manufacture was moving to Eastern Europe and Asia, our competitors were big integrated steel mills and we were not competitive in that sector. Simultaneously demand for the more difficult products to make from a resource allocation perspective, grain oriented electrical steels, was increasing globally. Modernisation of electrical steel infrastructure was happening and we didn’t have enough capacity to service the market so we decided to stop supplying unprofitable markets and move manufacturing resource wholesale into the grain oriented product. It was a strategic decision.”

One of the biggest hurdles to improvement is the ability to look at your own business objectively. Concurrent with the decision to switch entirely to high value product, the company took the opportunity to review its entire business, bottom-up.

The results were painful, very little had

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Factory of the month Orb Electrical Steels

changed at the Stephenson Road site since 1947. Management decided that Orb would only survive in the global market for this high value steel product if it stripped down its business model and rebuilt it. The first and pivotal decision was to adopt lean thinking.

eventually have half the “We’ll number of coil movements,

Beginning in 2004, working initially with consultants SA Partners, Orb identified that the whole site was not optimising its resources to deliver expected customer value, nor was it reducing waste from various inefficient facilities, manufacturing or business processes. The review recognised all stakeholders lacked confidence in the company: customers; suppliers; employees; senior staff and the local community. Recognising this poor stakeholder perception was a key factor in rejuvenating the company, removing waste and fragmented facilities and communications. For example, office layout and overuse of email encouraged less face-to-face interaction between staff working in the same areas.

Introducing and maintaining lean principles at this factory was not an easy proposition, as it challenged much of the

Mark Cichuta General Manager

“

Lean – a whole business philosophy

and reduce the total distance travelled by 80%. Lean thinking has enabled us do this with process mapping. It’s important to have a vision of the future

accepted business culture. Management, however, had little choice. Once lean was chosen as the in-house philosophy for the Cogent Power Group, all the staff were trained in lean thinking principles and appropriate tools, e.g. Learning to See, 5S, SMED, TPM, Problem Solving, They then considered the reduction of waste and creation of value within their areas or along the value streams. It took time and, as with any change management at a long-running factory, there was reticence from some quarters, but overall the people responded positively to the new lean approach. This was crucial to its success, says Cichuta and John Homewood, Orb’s Continuous Improvement Manager. “Some people have found it difficult. But they have come out of it very well, we’ve not lost anyone through the process,” Cichuta says.

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VINCI Facilities combines the heritage and capability of a number of highly regarded and successful brands:

Crispin & Borst Haymills Property Solutions Norwest Holst Engineering Rosser & Russell Taylor Woodrow TCL Granby

By consolidating the activities of these brands, VINCI Facilities is able to deliver a fully integrated facilities management and maintenance service backed up by a dedicated research and development resource The Engineering Services part of VINCI Facilities demonstrates how high levels of technical expertise and market leadership have been harnessed and channelled into a service and solutions business. In particular, and in relation to its business with Corus, the Engineering Services business supports major customers in areas including.

Steel manufacturing and production Utilities providers Major sports venues Telecoms businesses Nuclear facilities Engineering Services offers expertise in above and below ground infrastructure, as well as the installation and maintenance of specialist core production equipment

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through its diverse in-house mechanical and electrical engineering teams. Services include: Core production / manufacturing equipment installation and maintenance Specialist fabrication services Specialist engineering and infrastructure project works General M&E / fabric maintenance services

Through a long standing relationship with Corus, our Engineering Services business continues to demonstrate both technical and management expertise enabling us to compete and add value.

Engineering Services is highly specialised and supported by a parent company driven by a strong commitment to its customers.

We believe that the benefits to customers include:

VINCI Facilities...

Our quality assurance and reputation for consistently delivering in highly sensitive and business critical environments.

A high degree of in-house competence, integrated to deliver best value and supported by unparalleled expertise and industry leading R&D. The support of a global Group, with an enviable reputation for health, safety and commitment to the environment.

A simplified organisation, easy to do business with and having the flexibility to meet the changing needs of its customers.

Collaborative working and a common drive for continuous improvement is a key element of our working relationship.

Published in association with: VINCI Facilities

For more information regarding services provided by VINCI Facilities, please contact Ian Cresswell:

Tel: 01923 478756 Mobile: 07816 514886 Email: ian.cresswell@vincifacilities.com www.vincifacilities.com

Factory of the month Orb Electrical Steels

both chromic “Eliminating acid and sulphuric

John Homewood Continuous Improvement Manager

acid from the process is an example of our commitment to our environmental and health practices in the last few years

“

“The best thing about lean as opposed to other philosophies or culture change programmes is that lean thinking is a language that everyone can understand,” says Cichuta. “5S applies to all departments, shop floor, office or management. Project Renaissance is a 5S project, it’s the five steps in 5S applied through Renaissance to whole business. Sort, Simplify, Sweep Standardise, Sustainability etc – it applies throughout. We’ve implemented lean right through the organisation, the new strategy is based on lean principles – we’ve got rid of a non-value add product and used our capacity to focus on producing a more value-added product.” Lean has helped Orb to identify and reduce waste, and there are many areas where this has happened – in the product’s physical manufacture and by using less additive material, in streamlining the process itself and reducing changeover times of coils, automating the process as much as possible, trimming less product from the finished steel coils, reducing packaging where possible, and so on. As any lean manufacturer knows, lean is not a tickbox exercise but a journey of continuous improvement. “We can now truly say there is a culture of lean thinking at the company. But there is lots more to do so that we can further minimise waste while

creating customer value by the end of 10 years of lean at Orb, in 2014,” says Homewood.

Mark Cichuta shows me Cogent’s Effectiveness/Efficiency grid (see graphic). It shows how business performs along the two axes. An inefficient and ineffective company will die. If you are efficient but ineffective, your costs are low but the customer doesn’t want your product so you’ll die slowly.

Inefficient but effective, you’re expensive but the customer still wants your product, you’ll probably survive. “Everyone aims to be in the Thrive quadrant, being efficient and effective – this is what lean thinking is all about,” Cichuta adds.

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KCS Herr Voss UK Ltd KCS Herr Voss UK Ltd is a long established engineering company which specialises in the design, manufacture and installation of complete process lines and equipment for process lines to suppliers of ferrous and non-ferrous strip on a global basis where the ‘Herr Voss’ brand is respected for its quality and expertise in a specialised market.

A

s the requirement for equipment and services has developed both technically and commercially, KCS Herr Voss UK Ltd has adjusted its product range to meet the global demand.

The company regained its ISO 9001 status in December 2008 re-affirming its status as a company managed to a recognised Quality Standard. The company is run by the General Manager (David Ward) and a Technical Manager (Chris Edwards) and is based in the West Midlands.

Equipment is designed to an ‘as sold’ specification by our team of experienced

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designers. The manufacture of equipment is then sub contracted to one of our network of machine builders. On completion of manufacture equipment is shipped to the customer and installed and commissioned under the supervision of our site manager.

In the current economic climate the level of capital investment has been scaled down, customers are looking for innovative solutions to meet the continuing demand for improvement. KCS Herr Voss UK Ltd is equipped to meet this demand with a portfolio of products and services that are a ‘perfect match’.

For more information about KCS Herr Voss UK Ltd and its capability visit our website at www.kcsherrvossuk.com.

Published in association with: KCS Herr Voss UK Ltd Email David Ward: david.ward@kcsherrvossuk.com Email Chris Edwards: chris.edwards@kcsherrvossuk.com www.kcsherrvossuk.com

Factory of the month Orb Electrical Steels

A vital component of the employeeconversion to the new business model was the work invested to improve staff facilities.

The 2004 business review showed up some glaring shortcomings in the facilities and infrastructure of a business with a turnover of £200m. Orb’s offices, housed in pre-War buildings, were spread throughout the site in random locations. Employees could enter the manufacturing plant from 11 different entrances, making a feeling of common purpose hard to secure. There were no adequate showers or locker room facilities; staff often went straight home dirty. In 2006, Orb began the infrastructure and cultural enhancement leg of its turnaround. Called Project Renaissance, the company set a completion target of December 2008. Renaissance was a site-wide project with a threefold objective: 1) dispose of redundant land – proceeds of the sale of 23 acres financed the main site development; 2) transform the company from an “Old Big Works” to a Small Modern Lean Business, with associated agility and

speed of responsive to demand and 3) attract and retain the best suppliers, customers, and employees.

All the old, poorly insulated buildings being used as offices were vacated, the excess land was sold and a new, modern office building was erected overlooking the River Usk. A new, single standard amenity block with locker room and showers was built inside the body of the main factory. “Everybody has a locker there, they can get changed before going onto the factory floor,” says Senior Lean Coach Mike Anthony. “Being

“

“

Renaissance

Priorities change, core values don’t – that’s why we call lean and relationships core values

the steel industry there is oil, dirt and dust so people can get pretty dirty. Staff used to get changed and go home, now they can have a shower and go home feeling and smelling cleaner.” A new chemistry lab and technology centre was built. A communal canteen was installed, and televisions were installed in staff communal areas to show world news as well as to communicate internal company messages. The employees, management says, have responded very well to the changes, they are using the showers, locker room and canteen, watching the news and so have a greater chance

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KC2000 Hot Face Coating Save Energy – Reduce Costs!

KC2000

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When fired KC2000 forms a tough ‘egg shell’ type finish that: Encapsulates Refractory Hot Face Surfaces.

Seals hot face fibres to prevent air borne dust.

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Is Abrasion Resistant.

Is Chemically inert and Chemical resistant.

Protects the refractory lining to give an increased service life.

What’s more KC2000 Has a very high Energy-Reflectivity quality. This gives energy saving properties.

Published in association with: Fuel Conservation Services Unit 1 Anglesey Business Park Littleworth Road Cannock Staffs WS12 1NR Tel: 0044 (0) 1543 871787 www.fcs-ltd.com

Factory of the month Orb Electrical Steels

of seeing company messages. Talking to the Operations Manager, Tony Cook, and factory staff representative, Nicky Parkes, in one of the communal areas, it was clear that the effect on morale of some simple infrastructure improvements was high.

Other simple changes have been effective in bringing unity and spreading the firm’s new lean philosophy. Now there is a single main entrance to the 43 acre site, and one car park beside the head office, where there used to be several smaller car parks over 67 acres. A single office, canteen and communal shower block has meant workers based in one part of the site can now easily discuss with colleagues from other departments or lines; in some cases co-workers had been at Orb for many years and never really met. Critically, decision-making time has become noticeably more efficient in the new areas, as everyone now is within a few seconds walk of the person they may want to talk to.

A culture of continuous improvement has enabled a reduction of injuries, another excellent top-level KPI.

Tighter, safer, cheaper processes

Dr John Homewood has worked for Cogent for 16 years in the UK and Germany and is Orb Electrical Steels’ Continuous Improvement Manager. He helped devise several measurement techniques to help assess and execute process, business and lean improvements at Orb, including business cost modelling and methods of tracking progress.

With Mark, he also championed the development of a system to make the steel strip manufacturing process less environmentally wasteful and safer without compromising the product’s core properties. This type of steel has traditionally been coated with a medium containing hexovalent chromium to give an even appearance. “The product was safe for the user but the environmental issues during manufacture were

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Hotwork Combustion Technology Specialists in thermal process and combustion technology

T

he manufacture of electrical steel strip involves thermal processes such as the burning-off of oils, or the drying and curing of coatings, which demand precise control of heat input, heat distribution and furnace atmospheres. As specialists in the turnkey supply of high performance, energy-efficient combustion systems, Hotwork have been closely associated with the development and maintenance of Orb Electrical Steels’ production facilities for over 20 years by supplying state-of-the-art strip thermal processing equipment and combustion-related services.

The strength of the Company lies in its ability to understand customers’ particular process requirements and design new systems as well as upgrade existing plant

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to meet these requirements. Particular focus is placed on increasing throughput and providing the flexibility to process several grades of steel with the same equipment, whilst maintaining the highest level of energy-efficiency and minimising emissions.

Recent projects at Cogent include the supply of a new strip curing oven for coated steel and the supply of a new oil burnoff oven, using energy-saving Hotwork self-recuperative burners and low thermal mass fibre linings. Also, two existing ovens were upgraded with the latest controls and safety technology including full PLC control with HMI, sophisticated flame programmers, variable speed drives and multi-burner fieldbus networks. Projects

were quite often completed within very tight schedules to comply with Cogent’s stringent production requirements.

Hotwork CT operate from their offices and factory in Dewsbury, West Yorkshire, and are supported by a team of engineers and fitters based in Newport in order to provide a fast response.

Published in association with: Hotwork Combustion Technology Ltd Tel: +44 (0) 1924 506506 Email: info@hotworkct.com www.hotworkct.com

Factory of the month Orb Electrical Steels

How grain oriented (GO) steel is made High Silicon Hot-Band coil (2mm gauge) arrives by boat from suppliers in Europe and South America. It is side-trimmed which, because of the brittle nature of the steel, must be done on warm edges, at about 80°C. After this the coil is annealed at high temperature and the surface oxide layer or “scale” removed with sulphuric acid. The steel is then cold-rolled to an intermediate gauge of 0.60 – 0.90mm on one of two cold mills, that were installed in the 1950s and which are currently undergoing a major but progressive refurbishment. After re-annealing and rolling once more to final gauge (0.23mm – 0.35mm) the steel is decarburised in a hydrogen atmosphere and coated with magnesium oxide on a continuous line. Then comes the slow part of the process, high temperature coil annealing. This takes about a week from the start –coils are fed into one of a number of batch furnaces, heated up to 1190°C with hydrogen introduced, then cooled. As well as removing sulphur, this process is really what develops the steel’s unique final characteristics, with large grains, highly oriented and efficient magnetic properties. The coil is coated, thermally flattened, and on some products laser-domain refined, to produce the finished product. As required the coils are then slit to customer-defined widths, packed for distribution around the world.

The entire process at Orb takes as little as 12 days, where the coils travel about 2.8km through the whole process. This current configuration is being rethought. “We have a long term plan, through lean thinking, which may take 10 years – a vision of what it will look like,” says general manager Mark Cichuta. “We’ll eventually have half the number of coil movements, and reduce the total distance travelled by 80%. Lean thinking has enabled us do this with process mapping. It’s important to have a vision of the future”.

Sulphur is extracted in the high temperature coil annealing stage, the slowest part of the process. The next stage in the steel lamination process normally involves treating with sulphuric acid to remove excess oxide powder that’s left over from the high temperature batch anneal.

In re-designing the front-end of the thermal flattening process, Orb took the step of eliminating all the sulphuric acid, now using just a wet brush section to remove all the powder and dust. This was completed by December 2008. “Clearly this has an environmental benefit, and makes the working environment safer – and saves us the cost of the acid,” says Homewood. Eliminating both chromic acid and sulphuric acid from the process “is an example of our commitment to our environmental and health practices in the last few years”, he adds.

Raw “hot-band” coil arrives at Orb by sea and river. From beginning to end, the steel takes can take as little as12 days to move around through the factory until the finished product – a trimmed roll of refined, beautifully thin electrical steel –is placed on a pallet. The main sections of the 100m long thermal-flattening process are the coating section and thermal flattening section. “We don’t want the line or process section speed to alter,” says Mike Anthony .

“

The best thing about lean as opposed to other philosophies or culture change programmes is that lean thinking is a language that everyone can understand

“

significant,” says Homewood. “In 2006 we made the bold step of removing this from the product ahead of most of our competitors. Initially it was probably not as good-looking but we have continued to improve that over the years.” Surface appearance is important to us.

“That’s why it’s important we used the SMED technique (Single Minute Exchange of Die), in what we call changeover workshops.”

I watch as the operator stops the entry end while a two-man team feed the new coil in, but the process is still running, steel still moves down the line. “We’ve done as much as possible to simplify the changeover operation so the next coil is loaded and running in as little as 20 seconds. This used to be about two minutes but we shortened it through changeover practice with teams.” As he talks, the operation of feeding on the new coil literally takes 20 secs, and its going again.”

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Wellman Thermal Services Wellman Thermal Services have supported Orb Electrical Steels for the past 50 years

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upplying its clients with spare parts, after sales service, access to modern technology, and safety upgrades. Its Furnaces Aftercare Division is divided into three distinct operations: services, spare parts, and thermal industrial solutions.

Wellman has a commitment to extend its inspection service to include specialised routine maintenance of all types of equipment.

This can extend from planned annual overhauls at summer or winter shutdowns, to more frequent routine maintenance during operating conditions.

Only Wellman Thermal Services has access to original manufacturing drawings, engineering calculations and material specifications for plant supplied by Wellman and its many associated companies, including Birlec, British Furnaces, Incandescent, and Gibbons. This expertise is reinforced by its computerised stock holding of over a £1/4m of fast moving and key spares, ensuring that Wellman are uniquely placed to service clients’ furnace and ancillary plants throughout their working lives.

The continued use of equipment installed in previous decades stands as testimony to the quality and capabilities of the original manufacturer.

It is often the case that total replacement of equipment is undesirable. With regard to Thermal Industrial Solutions, therefore, Wellman offers an alternative working toward the improvement of existing equipment. In providing calculable financial justifications with its enhancements, this can include: modern fuel efficient and safe combustion systems; substitution of PLC, SCADA, and recipe control systems; relocation/commissioning; and modification of equipment to enable alternative production methods.

Published in association with: Wellman Thermal Services Limited Newfield Road, Oldbury, West Midlands B69 3ET

Contact: Richard Harris, Manager, Furnaces Aftercare Division Tel: +44 (0)121 543 0000 Fax: +44 (0)121 543 0170 Email: aftercare@wellman-thermal.com www.wellman-furnaces.com

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Factory of the month Orb Electrical Steels

GO 100

In recent times, some key production processes have significantly reduced operation, the plant currently producing at at rate of about 60,000 tonnes of GO product a year. This is just over half of it’s full capacity of 100,000 tonnes. How can Orb respond to any increase in demand should market demand improve? “Our people and plant capability is a full seven day week,” says Mike. And as and when demand leaps, Orb has a fully operational second thermal-flattening line on stand-by. Originally used for annealing lower grade, nonoriented steel, it’s conversion became the GO100 project, converting over to a 100% grain oriented process. It involved redeploying and upgrading old equipment at a cost of about £5m. This was a team effort – most of the work was done

by Orb employees voluntarily, underscoring the change in attitude the new, improving Orb was cultivating.

Work began on March 31 2008, the converted line had its first production three months later, completing a challenge that most at Orb thought was impossible. “The success of GO100 was down to the buy-in of staff,” says Cichuta. “Everyone worked very hard to achieve it. We installed new, state-ofthe-art operator rooms and control panels, a real step forward when you consider some of the old methods of working, and a change that certainly underpins lean thinking.” It was the first time in the world this conversion had been done, converting an old line of this type to make a very different finished product. It is ready to roll at short notice.

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Factory of the month Orb Electrical Steels

Energy watch

Orb is a big consumer of energy, employing processes which is the equivalent of cumulatively heating the steel up to 5,000°C and force cool ingback to room temperature. Energy price rises really hurt us,” Cichuta says. An analysis of Orb’s energy use was undertaken and a metric to show how much energy was being consumed throughout the manufacturing process was devised. This was cross-referenced with electricity rates – fixed and forward-purchased, and at different times of day.

This produced an optimum energy cost curve, a benchmark consumption. Now real-time energy consumption is tracked against the benchmark to reveal spikes in usage, where and when. This has helped to refine the process to reduce energy bills.

–

Orb Electrical Steels has succeeded in pulling a crumbling 19th century business away from the brink and transforming it into a modern, profitable company. Confidence in the business has been restored with customers, suppliers and employees, and five years into a lean journey showing demonstrable improvements, despite the economic downturn, it can look ahead to a bright future. end

Now and tomorrow To summarise Orb Electrical Steels’ transformation to date:

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The company is market-focused and has close customer relationships.

“We believe in long term relationships – with customers, suppliers and staff – and growth.” It has an established product range, with good long term demand forecasts. Its health and safety record is good. Orb is big on core values. “Priorities change, core values don’t – that’s why we call lean and relationships core values.” The company is engaging in continuous improvement embedded by lean.

–

Orb has been through rapidly robust project development and cultural change, which some employees have found challenging but none have been lost through the process.

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Orb now has staff facilities commensurate with a large 21st century manufacturing business. There is a new chemistry lab and technology centre. All staff have a locker, they can get changed in the locker rooms before going onto factory floor and can use the showers. There are better internal communications via televisions, fewer emails and more one-to-one interaction.

–

Demand is in a trough but it recently rallied a little. “In the last two years, we have switched 40% of our business,” says Cichuta. “That has put pressures on us, but we remain profitable, we are viable as a business. We intend to continue the programme we started, and when the recovery comes we’ll be ready, in terms of capacity, in terms of the people and facility we have, and product innovation and development – a lot of work has gone into that in recent years.”

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Apollo’s day in the sun

‘Best of breed’ performance remains limited to a select group of British manufacturers.

Edward Machin explores the parts, people and processes ethos with Apollo Fire Detectors’ manufacturing director Barry Roach, which has seen the company positioned on the verge of “World Class entry.”

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Apollo Fire Detectors is the world’s largest independent smoke detector manufacturer, and a global leader in the design, manufacture, and sale of commercial grade fire detectors and associated products, including analogue addressable and audio visual signaling devices; interfaces for intelligent systems; manual call points; loop calculators; and mounting accessories.

A subsidiary of the Halma Group, Apollo, established in Havant, Hampshire in 1980, has undergone considerable refinement in its operations since the appointment of managing director Danny Burns in 2006. Burns immediately set about recruiting a senior management team of similarly-minded personnel – including Manufacturing Director Barry Roach, who joined the company in December 2008 – charged with guiding Apollo into the realm of elite manufacturers.

Promptly making good on such an ambition, in January Apollo Fire Detectors was granted the Royal Warrant by Her Majesty The Queen in recognition of its official supplier status to the British Royal Household. Moreover, the company

Fire detection equipment Apollo Fire Detectors

has won a raft of prestigious contracts, including fire protection installations in: Westminster Cathedral; the Royal Military Academy Sandhurst; Manchester Piccadilly Station; IKEA Belfast; a ₤43m commercial development for Ove Arup in London containing 600 Apollo devices; and a bespoke fire detection system for Dinorwig Power Station, a subterranean industrial complex situated near Snowdonia National Park.

The 3 P’s - Parts, People, and Processes

To guarantee such consistency, Roach systematically undertakes visits to each of the links in Apollo’s supply chains, ensuring that vendors follow the culture, principles, and processes which he advocates. “All too often, senior management can be naïve in thinking that success in manufacturing is dependant on their on-site operations alone. The nature of our products, however, means that it is not uncommon to acquire mouldings from five separate companies, who in turn source their raw materials from a further five vendors.” Given the length of the supply chain: “It is imperative that each and every link along it must be world-class, starting with ourselves, and cascading down through each vendor, including, ultimately, those who produce the raw materials.”

While the company’s external operations are being revolutionised through meticulous Quality, of equal importance to the company’s success is the blossoming of Roach’s ‘internal culture of Quality’. Accordingly, and as the second facet of his ‘Parts, People, and Processes’ philosophy, staff development is very important, and successful, at Apollo. The company offers multiple training and development initiatives, with its 250 floor workers encouraged to undertake specialised NVQs, AVQs, and career advancement programmes, thereby raising the technical skills vital to a thriving factory while simultaneously ensuring that staff are included in the company’s aspirational journey.

“

Coupled with the mathematics of engineering, which are quite obviously central to our business, I see lean as a cultural phenomenon within the company, being driven by the senior management right down to the staff on the shop floor

“

Central to enabling world class entry for Apollo is the company-wide philosophy espoused by Barry Roach of ‘Parts, People, and Processes’. “I am adamant that where many manufacturers go wrong is that they concentrate largely on the processes within their own factory, and, to a lesser extent, the people,” says the dynamic Roach. “However, and while it is a greatly exciting time for everyone at Apollo in that we are fast approaching the practices associated with world-class manufacturing, we are, and will only ever be, as good as our vendors.”

Barry Roach, manufacturing director, Apollo Fire Detectors

Similarly, Apollo holds weekly KPI meetings, with both shopfloor and management staff being kept regularly updated as to the company’s successes, efficiency drives, product advances, and areas specifically targeted for development.

Production Manager Martyn Dolphin says: “We need to be the best at what we do, and, crucially, be recognised as the best. The training and development of our employees is the key to underpinning the core Apollo principle that our people are our difference.” Indeed, such forums, says Roach: “Provide a platform for continued and inclusive companywide improvement, and serve to further cement the organic culture that has ultimately made Apollo one of the foremost players in our industry.”

“For example, since joining Apollo Fire Detectors, I consciously use words like culture, crusade, world-class, pride, and best of breed to my staff on a daily basis, especially to those supervisors on the junior tiers of management” says Roach, a sentiment echoed by Paul Fisher, Product and Test Engineering Manager: “Everybody now uses the word “World Class” in their day-to-day vocabulary. It’s not just a wish, but a real aim and desire that our staff truly believe is achievable – one which we are on the threshold of achieving.”

Continues Roach: “By continuously reiterating the pride I, and our staff, feel in the organisation and where it is going, employees at every level – from our cleaning and catering staff to the Board of Directors and entire management team – become enthused with a desire to become part of the team that will ultimately see Apollo positioned as the world-leading manufacturer within our industry.”

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Fire detection equipment Apollo Fire Detectors

Developing research

Given that lean practices represent one of the prevailing trends in contemporary manufacturing, and coupled with Apollo’s commitment to continual innovation, the company is on “a crusade towards ever leaner operations.” Both lean and six sigma – defined as the reduction in variation – remain central to the company’s effective factory processes, with each quadrant of the floor subject to specific lean initiatives from the Apollo’s recent Lean Crusade.

The firm’s lean journey began with a comprehensive 5S programme, aimed at improving workplace organisation and standardisation. This was followed by value stream mapping initiatives and targeted kaizen projects aimed at improving manufacturing efficiencies and quality. Says Aaron Kentish, Production Engineering Manager: “5S is the pre-requisite for any lean initiative aiding the identification and elimination of waste. Far more than simply a routine tidy-up, it represents the foundation for cultural change”.

Nonetheless, and in line with Roach’s vision for Apollo Fire Detectors as a whole: “While we are currently operating at industry-leading standards across our plants, we will never stop striving for that world-class level of quality.” Indeed, the search for optimum lean processes is, insists Roach: “Never-ending. And coupled with the mathematics of engineering, which are quite obviously central to our business, I see lean as a cultural phenomenon within the company, being driven by the Board of Directors right down to the staff on the shop floor.”

Undeniably, while Apollo has a pioneering, robust suite of products, including the Discovery, XP 95, Xpander, Series 65, and Orbis ranges of fire detection systems: “It remains vitally important that, for all our firm-wide cultural initiatives, we must simultaneously have a strong product development department who are constantly innovating, designing, and testing new products across our entire remit.” As part of its ongoing commitment to R&D, the firm holds long-established links with Portsmouth and Southampton universities, collaborating with both on cutting-edge scientific research, design, and knowledge-sharing programmes.

Furthermore, the company is currently pursuing a relationship with Cambridge University, an undisputed global leader in the fields of scientific innovation, research, and scholarship, a collaboration that simply serves to reinforce Apollo’s commitment to establishing a culture of world class performance, whether it be with parts, people or processes.

Future

Barry Roach, unsurprisingly, is excited as to what the future holds for Apollo Fire Detectors. “While we are altogether confident of the health of our business and its long term strategic vision, given the global economy’s profound contraction, a degree of prudence must be exercised with regard to those advances which will enable us as a company to join the global pioneers,” he says. “That being said, we have, and always will, continue to pursue investments in those areas which will facilitate our aspirations, because when the upturn does come, as it inevitably will, it is crucial that we are positioned strongly.” The firm’s most recent investment is in the purchase and installation of Microsoft’s AX ERP (Enterprise Resource Planning) programme, a comprehensive business management system which will go live on 28 August 2009, at a total spend of ₤1.6m.

Far from battening down the hatches, therefore, under the progressive leadership of Roach and Burns – together with Chairman Nigel Trodd, Business Operations Director Chris Elkins, Finance Director Tim Preston, Marketing Director Richard Bramham, Sales Director Gary Craig, and Head of Technical Services Jeff Cutler – Apollo Fire Detectors is positioned perfectly for “World Class entry in early 2010”.

“Ultimately, our vendors, staff, and customers have come to expect a level of absolute service which sets us apart from the chasing pack. Yes, we thrive on producing a wide range of innovative, award-winning products, but in world class manufacturing that is almost a given,” says Roach.

“What remains unique about Apollo Fire Detectors is our single-minded dedication to success through the use of our ‘Parts, People, and Processes’ model, meaning that whilst we will undoubtedly achieve world class entry, we will do so with a workforce, supply chain, and collaborators who can say that without their involvement, we would not be where we are today. And that, we believe, represents an infinitely more satisfying facet of the company’s long-term strategy than success alone.” end

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Outdoor cleaningJohnston equiSweepers pment sweeping

changes at Johnston

It stands to reason that Johnston Sweepers, a company which specialises in street sweepers, should have an extremely tidy and organised manufacturing structure. Tim Brown talks to marketing director, Steve Douglas, and operations director, David Bishop, about the business’s modular operation.

By focusing on its customers, employees

and the environment, Johnston Sweepers has implemented an extremely effective continuous improvement and investment policy. The end result is an efficient production process which focuses on the unrelenting pursuit of quality as its primary aim. To achieve this objective, Johnston Sweepers have implemented a raft of different strategies, together with the areas of customer service and quality having been combined so that customer requirements can be relayed to the factory as quickly as possible.

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Motherson Sumi Systems Limited Providing Full System Solutions Globally

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otherson Sumi Systems Limited - MSSL (A Samvardhana Motherson Group Company) is a major supplier to Johnston Sweepers, supplying wiring harnesses and complex electrical module assemblies.

manufacturing facilities supported by design, marketing and global sourcing centers spanning 20 countries across the world. MSSL has collaborations with global technology leaders to bring world class technologies.

MSSL operations in UK provide closer engineering support, project management, customer support & warehousing for quick turnaround and just in time deliveries. MSSL is providing greater flexibility for prototypes, bespoke & spare requirements from European operations, along with competitive cost advantage due to mass production in best cost countries.

A diversified product range: Electrical Distribution Systems

The group is the largest manufacturer of automotive wiring harnesses in India with over 65% share of passenger car wiring harnesses. MSSL has a growing presence in Europe for wiring harnesses for motorcycles, material handling & earthmoving equipment, buses and special application vehicles. MSSL has 17 wiring harness manufacturing locations spread over India, Middle-east and Europe supplying to a global customer base.

MSSL provides customers with innovative and value-added products, services and integrated full system solutions with support of its group network of over 80

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Automotive Rearview Mirrors Modules and Systems Molded Plastic Parts & Assemblies Injection Molding Tools Molded & Extruded Rubber Parts and Compounds Precision Machined Metal Products Design Engineering & CAE Services One of the largest manufacturers of Automotive Mirrors in the world SMR (Samvardhana Motherson Reflectec), a subsidiary of Motherson Sumi Systems Limited which acquired the global automotive rearview mirror business of Visiocorp, is one of the world’s largest manufacturers of rearview mirror systems supplying exterior and interior mirrors for nearly

every automotive manufacturer in North America, Europe, Asia, and Australia.

Leading manufacturer of plastic components and modules MSSL is one of the largest suppliers of moulded plastic parts, assemblies and modules to the Indian automotive industry and supplies to customers in Asia, Australia, Europe, USA and Mexico. The group has over 900 moulding machines in its moulding plants spread over four continents. The technologies include injection moulding, blow moulding, 2K moulding, body colour painting, printing, fabric upholstery and assemblies. MSSL manufactures everything in plastics from a clip to a bumper, door trims and complete cockpit / IP modules. The moulding operations are supported by inhouse mould manufacturing for moulds up to 3500 tons.

Published in association with:

Motherson Sumi Systems Limited C14 A&B Sector 1 Noida - 201301 India

Tel: +91-120-6752100 Fax: +91-120-2521866 Email: enquiry@motherson.com www.motherson.com

Outdoor cleaningJohnston equiSweepers pment

Streamlining

This commitment to quality and efficiency truly emerged in 2004, when Johnston Sweepers re-launched its entire range as one modular group of machines.

The result was a remarkable decrease in parts, which included reducing the number of sweeper bodies from 120 to six, the number of auxiliary fuel tanks from 23 to one, and the number of rear doors from 114 to two. Not surprisingly the result, according to Bishop, was a large increase in efficiency in all areas of the business.

“On the selling side, it gave us better control over our price lists and definition of the product,” he says. “We integrated the sales end through a configuration system so that the salesman effectively constructs the bill of material from preengineered modules. It gave us administrative efficiency as well as manufacturing efficiency. Whilst we were making the same number of products there were far fewer part numbers.

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We’ve sent in excess of 20 people away on problem solving courses, lean problem solving or Lean facilitator training, which is delivered by the likes of EEF and MAS – those people then assist with our continuous improvement projects

“

At any one time, Johnston may have up to 90 staff working on continuous improvement projects at its three manufacturing sites. According to operations director, David Bishop: “We’ve sent in excess of 20 people away on problem solving courses, lean problem solving or Lean facilitator training, which is delivered by the likes of EEF and MAS – those people then assist with our continuous improvement projects. The projects that we work on are selected if there is a customer problem or management identifies that the process isn’t flowing. We have found that the continuous improvement projects are self-perpetuating, for often as the team rectify one problem they may uncover another area that could be improved.”

David Bishop, operations director, Johnston Sweepers

Instead of managing individual batches going through the factory, we were able to start looking at the flow of materials from purchase order to sales invoice.”

While the company still builds to order, it has moved away from constructing individual specialised sweepers, with the only true area of on line customisation now required being the colour scheme for the vehicle. The more streamlined process has revolutionised and benefited the entire business.

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Norgren Ltd Norgren and Johnston Sweepers work hand in hand

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ver the past five years, partnership has been key between Norgren and Johnston Sweepers. Projects have been a joint operation between engineers from both companies. The original project was a reflection of this close relationship.

Operating in a competitive market place, speed of delivery is crucial. Improvement in production times is a focus for Johnston but quality has to be maintained. One area identified for improvement in terms of engineering and speed of manufacture was the vehicles ‘on board’ systems locker.

At the heart of the vehicle, it controls all the vital functionality. Consisting of air valves, hydraulic valves and water valves, the locker controls and drives the brushes

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and main cylinders that empty the spoil collection hopper.

The new design needed to be fully configurable, as the old design was difficult to configure and increased production times. What followed was an intense period of engineering that resulted in a locker that was fully plug and play. Due to Norgren’s speciality in providing complete solutions, Norgren took over the complete manufacture of the locker. Johnston now get a fully completed locker that can be fitted straight to the vehicle thus speeding up manufacture. Since the original project the relationship has evolved to supply the whole group with pneumatic

and fluid control solutions that are driven

by Johnston’s need for competitiveness, quality and reliability.

Published in association with: Norgren Ltd

Eastern Avenue, Lichfield, Staffordshire, England, WS13 6SB

Tel: +44 (0)1543 265000 Fax: +44 (0)1543 265827 Email: advantage@norgren.com www.norgren.com

Outdoor cleaningJohnston equiSweepers pment

Johnston Sweepers Ltd at a glance Location

Curtis road, Dorking, Surrey.

Sector

Outdoor street cleansing equipment.

History

Founded in 1904, Johnston Sweepers is the world’s leading manufacturer of outdoor surface cleansing equipment. With two factories in Europe together with over 200 distributors world wide, Johnston Sweepers is a major global business.

Employees

473

Turnover

£72m

Growth in 2008:

11.4%

Output

Compact and truck-mounted street sweepers

(units main product line/s):

“As a result of launching a more modular product,” says Bishop, “we were able to, in both the Sittingbourne and Dorking factories, introduce flow production.

Previously two employees would take a chassis and build an individual sweeper from start to finish. Now we have a six stage flow line through which the product moves so the sequence, the method and standard of build is common to every machine and it is also easier to predict when a machine will be finished. This has significantly reduced our build time, which for instance on the truck mounted sweepers has fallen from in excess of 120 hours down to 60. We have experienced similar savings for our other products as well.”

Customer benefits

The streamlining of the company processes has also provided Johnston Sweepers with the ability to be flexible and responsive to customer demands.

“We believe that our throughput time is much faster than any of our competitors,” says marketing director, Steve Douglas.

“Delivery and lead time is made up of two elements – the cycle time in the factory and the size of the order book. However we have, over the last couple of years, been able to take a number of orders with short lead times and successfully deliver on them. Our sales volume is not a high number due to the size of the market. We currently produce up to 25 units per week, but if a customer comes in and wants 20 delivered in three weeks, we’re usually able to do it.”

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Warren Services - ‘one stop manufacturing shop’ Warren Services has a strategy of full internal process capability to enable complete tested product to be delivered

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e have grown progressively since being founded in 1988 and now total 50 skilled employees. The company occupies a modern factory facility in Thetford IP24 1HT, with an extensive capital equipment list employing the latest technologies. The shopfloor area covers approximately 30,000 sq ft. This is utilized as 11,000 sq ft of CNC machining, 10,000 sq ft of welding, fabrication / painting and 9,000 sq ft of assembly and test.

Recent projects we have been involved with will reside in Dubai, Macau, Las Vegas and Mexico amongst others, and we have also supplied engineered product to some of the biggest names in the pop industry.

The company has set out its strategy

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to be a ‘one stop manufacturing shop’, to this end it can now offer multiple processes under one roof. We have been building on our reputation for ‘being part of our customers team’ by adding more processes and increasingly focusing on our assembly capability.

This is an area in which we have been working closely with Johnston Sweepers, with one project up and running and a second about to launch. All of Warrens processes are involved in producing the final assembly – this is then delivered on specially designed cradles direct to line side. Having demonstrated the capability to meet Johnston requirements other projects are being considered and evaluated.

To further supplement our capacity list, a number of other capital investment projects, including additional floor space, are being reviewed. Warren is continually planning for the future with a clear vision to extend its ‘services’ to its customers.

Published in association with: Warren Services Limited Tel: 01842 760850 Email: enquires@warrenservices.co.uk Associate: www.watermist.com www.warrenservices.co.uk

Outdoor cleaningJohnston equiSweepers pment

Environmental considerations

Johnston is the first Sweeper company to achieve ISO 14001, which reflects its commitment to sustainability. In cooperation with the Carbon Trust and NIFES Consulting Group, Johnston carried out an opportunities assessment survey to identify and prioritise actions to reduce carbon emissions. Even the simplest of measures such as the installation of new doors at the Dorking and Sittingbourne sites, which only open when a vehicle is approaching, have already reduced their gas bill by 17.5%. With all the suggested measures now implemented, the combined savings from these changes

represent a 14.2% reduction in energy consumption and a 10.6% reduction in costs.

The vast changes that were implemented ranged from the replacement of lights to the optimisation of equipment for combustion efficiency and even the implementation of video conferencing to reduce the carbon output from travel. However, Johnston have also undertaken broader changes to decrease its environmental impact, including the use of more environmentally

“

The material costs of our products are aggressively challenged and as a result product costs have been controlled Steve Douglas, marketing director, Johnston Sweepers

“

The improvement in efficiency has also allowed Johnston to pass on other benefits to customers including a low cost of ownership. In fact not only are maintenance costs low but purchase costs are also extremely fair. “The material costs of our products are aggressively challenged and as a result product costs have been controlled, says Douglas. We’ve been able to grow our export turnover by 40% due in large part to the internal efficiency improvements we’ve undertaken.”

friendly paints, the use of chlorine free cutting oil, and the implementation of a comprehensive recycling policy. These environmental improvements have not just been limited to the Johnston manufacturing process either, with environmental considerations also being applied to its products. For instance, the C200 sweeper saves up to 40% on fuel consumption when compared to other sweepers in its class and both the V range and Compact range both meeting the latest emissions standards.

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SPECK Pumps (UK) Ltd Speck Pumps has an unrivalled reputation for customer service and technical knowledge

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tandard or customised, our high pressure triplex pumps can meet a wide range of requirements and are well known for their reliability and longevity.

pumps for the “C” range of sweepers, we used the SPECK group’s expertise to develop a special version of a standard compact pump.

SPECK Pumps supply premium high pressure triplex pumps and accessories for use on Johnston sweepers.

SPECK Pumps offered a custom solution to increase the flow of a smaller pump to meet Johnston’s design and size parameters. Special components were developed and manufactured to increase the standard pump’s performance by 20%. To ensure the pump performed as specified a close working relationship was developed with the Johnston engineers.

Johnston design engineers were developing a new mark II version of the Supawash system for the “V” range of sweepers. This system powering the sweepers spray bar and hand lance had to be suitable for fitting and retro fitting within the chassis cross member of the sweeper. After many years supplying

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SPECK Pumps manufactures a full range of high quality positive displacement

pumps. We pride ourselves on being able to offer a highly technical customer focussed service certified to ISO 9001 : 2008. Our extensive stockholding is available for next day despatch. SPECK Pumps is always happy to discuss custom projects to meet specific requirements.

Published in association with: SPECK Pumps (UK) Ltd Tel: 01494 523203 Email: info@speck.co.uk www.speck.co.uk

Outdoor cleaningJohnston equiSweepers pment Investments

Despite the current economic climate, over the past 6 months Johnston has forged ahead with a raft of different investments in IT and plant and facility infrastructure.

A new in-line shot blast machine and powder coating plant has been recently installed at the Dorking site. Instead of the current zinc phosphate which is a potential hazard to the environment, the new powder coating plant will use oxsilan, a synthetic which uses far safer nano technology. The new process also gets rid of the current phosphoric acid, using the more environmentally friendly citric acid alternative. Components are now sprayed, rather than dipped and only need to hang once. To achieve a high level of finish, a shot blaster unit was required and following a highly complex renovation process, the machinery was successfully installed and has provided excellent results.

Another significant investment was the installation in January of a brand new Motoman robotic welding cell. Designed in Japan, built in Sweden and tested in Banbury, the actual tooling for the parts

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Johnston Sweepers Outdoor cleaning equipment which it welds have all been designed and built in-house at Dorking. The new cell will be used to make sub-frames and rear doors, and has dramatically reduced welding set-up time from one hour down to twenty minutes.

However, the single biggest project ever undertaken by Johnston was the introduction of SAP software, the implementation of which involved literally thousands of hours of work. On Sunday 1st March this year, the new SAP system went live. Everything possible was done in advance to make the switchover as smooth as possible and the undertaking has proved very successful, moving the company to another level of integration.

Despite having already achieved considerable progress, the company will not be resting on its laurels and will undoubtedly stay the course ensuring consistent continual improvements.

With a company culture which promotes inclusion and lateral thinking among employees, achieving further benchmarks in efficiency are only a matter of time. end

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www.themanufacturer.com September 2009 Vol 12 Issue 8

New Progress?

L O N D O N

The Manufacturer annual directors conference will help manufacturers succeed in these troubled times and arm them with the knowledge they need to succeed with agility in an uncertain future.

Is government’s Manufacturing Strategy delivering?

An inspiring programme of presentations, workshops and debate sessions from a select group of exemplary organisations. This agenda will be headlined by some of the industry’s most prominent role-models. Individuals committed to galvanising support for a resilient and vibrant manufacturing future.

Speakers at the event include: Stephen Radley –

Ian Rice –

Chief Economist,

Operations Director,

EEF

Draka

Mike Gregory, CBE

Paul Christodoulou,

Head of the Institute for

Global Manufacturing Strategist,

Manufacturing,

the Institute for Manufacturing

Agenda summary: MORNING KEYNOTES & PLENARY SESSIONS �

Economist’s Insight

�

Navigating the emerging industrial landscape

�

The value of Operational Excellence today

MIDDAY STREAMED SESSIONS

Pierfrancesco Manenti,

Lead Technologist for High Value

Stream 1 Your supply chain.

Lessons in responsiveness from a maintenance supply chain. Home or Away? Manufacturing in the right place.

Supply Chain Opportunities in Nuclear – Is it for you?

EMEA Research Director for

Manufacturing, Technology

Stream 2 Your customer

Manufacturing Insights, IDC

Strategy Board

Keivan Zokaei,

Catherine McDermott;

Be Indispensible. The latest in service and support. Lotus Motivate, Innovate! Add Value, 111 year case study

Director of MSc in Lean

Distribution Director,

Operations. Lean Enterprise

Argos

University of Cambridge

Robin Wilson,

Kevin Eyre; Professor Peter Hines,

Managing Consultant,

Stream 4 Your workforce

Professor of Supply Chain

SAPartners

Inside Distribution: Argos and Continuous Improvement.

MX Award for Best Partnership between Business and education. Skills- Cross Sector, Retraining, Strategic

Management and Chairman.

Lean Enterprise Research Centre,

Andy Woods,

Cardiff University

Managing Director, Adnams

�

Panel Discussion and debate

IMSERV

Managing Director,

�

Closing Keynote: The importance of a collaborative market place- creating synergies and industry ecosystems working together for a more secure and stable future

Carbon and Energy Product Manager, IMSERV

Corporate manslaughter and employment law

World class manufacturing Higher quality standards and no mistakes

AFTERNOON PLENARY SESSIONS

Charles Morgan,

Matt Davis,

Leadership and strategy

Placement, Continuity

Commercial Director,

Morgan Motor Cars

Round-up of the principle training providers

The Manufacturer Directors Conference and The Manufacturer of the Year Awards In association with:

See enclosed programme to book your place and for more information on the sessions and speaker’s or go to

w w w. t h e m a n u f a c t u r e r. c o m / d i r e c t o r s c o n f e r e n c e

www.themanufacturer.com September 2009 Vol 12 Issue 8

David Peake,

T r ai ni ng for Su c c e ss

Stream 3 Your sustainability Comply and Compete. Competitive Sustainable Manufacturing. Lean is Green. Delivering Sustainable Competitive Advantage

Research Centre, Cardiff University

Special report

Interview Professor Mike Gregory CBE

Head of the Institute for Manufacturing