The Manufacturer September 2010 issue by The Manufacturer

www.themanufacturer.com September 2010 Vol 13 Issue 09

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Interview Terry Scuoler

Chief executive, EEF

Lead story

Get smart – Latest production techniques

Leadership and Lean

The power of subconscious conditioning

Finance and Pro Services

Alternatives to DB pension schemes

Special 84pp MIA section featuring Howden Compressors and Joy Mining Machinery

Logistics. A THORN in your side ?

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Editor’s comment

Austerity-driven collaboration must have its limits The Royal Navy and MoD are in talks with the French government about sharing an aircraft carrier, making one of the new QE class carriers redundant. Quelle dommage! BAE Systems alone has spent £1bn on its supply chain. 10,000 men and women work on the £5.2bn twin-carrier project, many of whom are either apprentices or 50-something craftsmen expecting the carriers to take them through to retirement. Shelving the second carrier would be a bitter blow to the stakeholders’ employees, but industry insiders sense that a complete cancellation of carrier No 2 is very unlikely. Also, in the week that Professor John Bryson of Birmingham University said UK manufacturing could “collapse within five years” because of a skills shortage, what better skills training platform to subsidise is there than a eight-year aircraft carrier project with a 50-year lifespan? It’s an expensive training programme for sure, but isn’t this precisely the kind of infrastructure project that will nurture the hard, transferable industrial skills we need? Business minister Mark Prisk will hold a meeting with stakeholders on the future shape of the Government’s Manufacturing Strategy on Sept 20th. Manufacturers will be eager to know what they keep and discard from the legacy Strategy that Lord Mandelson pushed heavily in the last year of New Labour’s reign. A new look Strategy has to balance the manifold frontline funding needs of business with public sector cuts. A tough ask, but it will be very disappointing to see funding pulled on any of the incumbent Strategy’s pillars, such as the Manufacturing Technology Centres. The Manufacturer’s Directors’ Conference takes place in November. As a hack, I’m not predisposed to marketing puff, but our theme – The Great Reset – rings true. Companies that make things and add value are, in most cases, coming out of a dreadful period of trading. Investment is needed but cash reserves are thin. Does modern software provide the answer, Lean, trade partnerships, supply chain management solutions? Join us for two days of thought leadership and learning from 17-18 November in Kenilworth, with speakers from United Biscuits, Alstom Mainline, Warburtons, the Institute for Manufacturing, the Edward de Bono Foundation (UK) and more. I’m very pleased to say that EEF, the manufacturers’ organisation, and TM will embark on a more formal arrangement from next month. We will cover more content close to EEF’s core remit – occupational health, legal advice, health and safety and more. We greatly look forward to working with EEF more closely and we urge you to participate in the editorial.

Cover image: Vitsoe’s ‘606’ shelving system with nine other highly sustainable, UK-made products

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Will Stirling, The Manufacturer

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News and features 04 News

The latest developments in manufacturing

12 Manufacturing appointments Who’s on the move?

13 Big Picture

Talking growth with Government

The Strategy for Sustainable Growth offers SMEs the chance to explain their barriers to growth

14 Economics

Coalition’s first big test EEF’s Steve Radley asks whether the reforms are too radical for our recovery

18 The legal low down What is reasonable?

As manufacturers look to secure their supply lines in these uncertain times, distribution agreements remain ever popular, says Thomas Eggar LLP.

19 Business as unusual All smoke, no fire

Anand Sharma contends the view that global disruptions render lean counter productive

20 Lead story

Production gets smart What does advanced manufacturing mean for processes, skills and competition? Jane Gray finds out

26 Special feature MDC 2010

With this year’s The Manufacturer Directors’ Conference just around the corner, we update on 2009’s issues, one year on

28 Interview

Industry not forgotten EEF’s new CEO Terry Scuoler on promising horizons

32 Special feature

The taming of ERP Brewers Shepherd Neame tell the story of how they tackled the notorious topic of ERP

34 Sustainable manufacturing The green list

The Manufacturer’s top 10 sustainably-made products in the UK

40 Leadership and lean

34 2

Breaking subconscious conditioning Will Stirling explores obstacles to lean manufacturing

46 Finance and professional services Pension apprehension

What are firms doing to plug their pension fund deficits? Mark Young explores

Contents Operations and maintenance 52 Diageo case study

Tim Brown finds world class manufacturing hinges on care of human assets

People and skills 54

Academies advance

Hundreds of British schools are set to opt out of local authority control and seek academy status. Jane Gray reports

Employee of the month 56

Rachel Doyle of the manufacturing Advisory Service South East

Supply chain and logistics 59 Taking stock

With just £100 investment, one manufacturer was able to remove swathes of expensive inventory

IT in manufacturing 63

Synchronised planning

Sales and operations planning relies on software that is aligned to company goals

Special Feature 74

Dyson’s double vision

In the midst of difficult economic times, entrepreneurial engineering company Dyson is swimming against the tide

LEGALSuPPLEMENT Introducing TM’s legal supplement, finding a legislative framework that increasingly governs the minutiae of UK manufacturers’ operations. Given that legislative compliance governs virtually every aspect of a company’s operations, all manufacturers would do well to retain a working knowledge of legal precedent. Read on to find out more…

Manufacturinginaction Sponsored by TBM Consulting Group

Factory of the month

94 Joy Mining Machinery – Excavating success Lorenzo Spoerry talks to this Worcester-based firm about the importance of investing in your workforce

118 142 151 156 162 164 168 170 174 176

Howden Compressors – Turning the screw Buchan Concrete Solutions – Raising the roof... Constar International – The complete package Constellation Park – Stars are aligned Deima engineering – Assemble with care Kostal UK – Back on the performance track Modcomp – Relationship building Linpac Storage Systems – Progressive manufacturing Teknequip – Space men Scorpion Mouldings – Plastic fantastic

Newsinbrief FOOD AND BEVERAGE

There is speculation in the City that Campbell Soup Company is preparing to make a £1.5bn takeover bid for part of the UK’s largest snack maker United Biscuits. Reports suggest the US company and its iconic canned soup brand are looking to pay £1.5bn for the biscuit making division of United Biscuits, which makes Penguin, Jaffa Cakes and McVitie products. It is not thought to be interested in UB’s savoury snacks brands including McCoys, KP and Jacob’s. SKILLS

Demand from UK businesses wishing to get new innovation-led projects off the ground has almost doubled since last year, according to data collected by the Knowledge Transfer Partnerships (KTP) programme. The number of active KTP projects running for between 1 and 3 years reached 1102 during 2009/10, the largest number ever achieved in the 35-year history of the KTP programme. As a result of the Government money committed to Knowledge Transfer Partnerships during 2009/10, UK businesses now stand to benefit from increased annual profit before tax of around £150m. In the wake of last month’s ‘A’ Level results, statistics show that STEM subjects are still failing to attract girls, perpetuating gender imbalances in industry. Given that data breakdowns show 78.5% of science A Levels this year were taken by boys it would appear that this is likely to remain the case for some time and this gender imbalance in STEM qualified individuals may prove an issue for organisations come the October when the provisions of the new Equality Act 2010 will be clarified and come into force.

AUTOMOTIVE

The motor industry is calling for radio broadcasters to do more to increase consumer awareness in the lead up to the switch over to digital in 2015. The call comes as figures released by JATO Dynamics, the world’s leading provider of automotive data and intelligence, demonstrate a rising trend of vehicles in the market with digital radios fitted as standard or as an optional extra.

ELECTRONICS

Dyson hits a century Dyson has recruited 100 of the 350 new engineers it pledged to recruit this year to work on new technology at its laboratories in Malmesbury, Wiltshire. Earlier this year the firm signalled its intent to double its engineers to 700 and bring its total UK headcount to 1,600. Worldwide employees number 2,500, with all manufacturing taking place in low cost economies. Dyson has long maintained that this business model means it employs more people in the UK than if production was based here. One hundred of the targeted recruits are now on the payroll. Half of these are graduates, though the company has stressed that it is also searching for experienced engineers across a wide field of engineering, including

microbiology, fluid, mechanical, electrical, electromagnetic compatibility, thermal, acoustic and software. “It is vital that Dyson – and the UK – invests in engineering talent to stay ahead,” said James Dyson. “As our need for good design and technology increases so does the need for creative and adventurous designers, engineers and scientists.”

Some of Dyson’s new recruits at work

GOVERNMENT

Fallout from cuts begins Government suppliers, including defence companies, appear to already be suffering as a result of public spending cuts, according to accountants Wilkins Kennedy. The number of insolvencies among defence, health & social services and education suppliers to the public sector was 168 in the first six months of this year compared with only 111 in the same period of 2009. This is despite insolvencies overall being five per cent lower in 2010 than in 2009. Anthony Cork, Director at Wilkins Kennedy says insolvencies are beginning to creep in among “the slew of profit warning” since government first announced its austerity measures. Although any real cost cutting is yet to take place, delayed contracts are

causing firms the most headaches at the moment. “The public sector has seen tremendous growth over the past 15 years and the private sector ecosystem that surrounds it has expanded along with it. Supplying to the public sector has been seen as safe and steady, unfortunately that is no longer the case,” says Cork. “Those companies that have become too dependent on the public sector – be they in recruitment, outsourcing, construction or marketing services are beginning to feel the pain.”

Newsinbrief FINANCE

CFO survey points to more economic troubles ahead Deloitte CFO Survey reveals fall in confidence as fear of a ‘double dip’ recession increases. Optimism among UK chief financial officers has declined for the second quarter running, reaching a 12 month low, despite a continued improvement in credit availability. The second quarter 2010 Deloitte CFO Survey findings indicate that recent volatility in financial markets and concerns about fiscal tightening at home and abroad have weighed on CFO sentiment. CFOs now see a 38% chance of a “double dip”, up from 33% in the first quarter of this year. CFOs see fiscal tightening bringing more direct risks than benefits for UK corporates. Two thirds of CFOs expect tighter fiscal policy to have short term negative effects on their company and 69% foresee few or no direct long term benefits. However, the clearly stated view of CFOs in last quarter’s survey, conducted just before the general election, was that fiscal consolidation is essential, with 85% of respondents saying that deficit reduction should be the new government’s top priority. Encouragingly, one third of CFOs expect few negative effects from fiscal tightening in the short term and 31% foresee benefits in the long term for their companies. While the external environment looks less positive, some pressures on corporates’ balance sheets are easing. The cash crisis in the corporate sector has abated significantly and companies are more bullish about prospects for their own cash flow than at any time in the last two years. Financial risk appetite among CFOs has not, so far, been dented by doubts about the recovery. Ian Stewart, Deloitte chief economist, said: “Crucially, credit conditions for larger corporates are getting better. CFOs now rate credit as being more available than at any time since the CFO Survey started in the third quarter of 2007. Bank borrowing has regained its pre-recession appeal to CFOs as a source of funding. CFOs see a more attractive and available supply of bank credit driving growing demand for bank borrowing over the next year. The latest CFO Survey paints a picture of concern Ian Stewart, about growth Deloitte’s coupled with chief improvements economist in the corporate credit and liquidity environment.”

DEFENCE

Chairman of trade organisation ADS (Aerospace, Securities and Defence) Ian Godden has written to David Cameron demanding to know if government intends to mke the MoD pay for Trident. Chancellor George Osborne recently stated that the Government is considering making the Ministry of Defence pay for Britain’s Trident nuclear defence system instead of paying for it independently. This would mean the Ministry of Defence’s budget would be effectively cut by a further seven per cent, having already taken a ten per cent squeeze from public spending cuts.

DOMESTIC GOODS

Worcestershire-based manufacturer Carpets of Kidderminster has fallen into administration and expects to shed 50 jobs. The company, founded in 1934, specialises in Axminster woven carpets and supplies both the commercial and residential markets. Managing director David Watts maintained that the firm, which employs over 170 people, still has “a long and viable future” and said the production team have identified efficiency savings to bring the company back to profitability in the short term.

When does engineering efficiency begin?

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Newsinbrief FOOD AND BEVERAGE

Halliburton is celebrating after its graduate training scheme for engineers was presented with a certificate of accreditation from a global engineering body. The Institution of Mechanical Engineers (IMechE) visited the company’s Aberdeen site on August 31. Based in Dyce, the Halliburton Completion Tools service group was awarded the IMechE Monitored Professional Development Scheme (MPDS) certificate from IMechE Business Development Manager, Sandra Mulligan, at its new test facility. The company plans to roll the MPDS out to other service groups in the future. MANUFACTURING TOOLS

The manufacturing tools market maintained its good performance in July following boosted sales in June, according to the Manufacturing Technologies Association (MTA). After the MTA’s machine tools conference Mach 2010 inspired a big rise in June, the value of order intake fell slightly in July. However, invoiced sales increased in comparison to the June figures. The majority of respondents to the MTA’s survey reported a rise in sales, taking the cumulative trend to its highest level for four months.

AUTOMOTIVE

British automotive manufacturer Morgan has unveiled its new Eva GT at the Pebble Beach Concours d’Elegance motorsport event. Morgan’s managing director, Charles Morgan, said: “This will be Morgan’s first real foray into making a car designed for everyday use. Our other models are meant for weekend driving. The Eva could conceivably be the primary car in a household.” He added that there are high hopes for the new model and that if it proves successful there are plans to expand the company. Production of the new JUKE compact crossover car has begun at Nissan’s Sunderland Plant. Nissan began production of the SUV / sports car crossover vehicle on August 26. Strong demand for the car is expected to safeguard 1,100 jobs directly at the plant and an estimated 2,000 further jobs across the car firm’s supply base.

AUTOMOTIVE

Toyota bounces back A £3bn marketing budget has helped Japanese carmaker Toyota reverse last year’s £585m loss and post its biggest quarterly profit in over two years. Toyota made a net profit of ¥190.4 billion (£1.4bn) in the three months to June, showing the company is moving forward from last year’s recall debacle. The company now expects to sell 7.38 million cars globally and make a net profit of ¥340bn (£2.6bn) in its financial year, which runs from April 2010 to March 2011. In July, there were 5,762 new Toyotas registered in the UK which represented 4.22% of the total market. This time last year they registered 7,547 which was 4.80% of the market. Operating income improved year on year in all regions for the first quarter. In Europe, operating loss improved by ¥13.6bn (£103m) to a loss of ¥6.8bn (£52m). Operating income in Asia increased by ¥63.3bn (£481m) to ¥90.2bn (£685m). In Japan, operating loss improved by ¥184.5bn (£1.4bn) to ¥27.5bn (£209m). In North America, operating income increased by ¥113.4bn (£862m) to ¥109.7bn (£833m) including ¥700m (£5.3m) of valuation gains/losses from interest rate swaps. Operating income, excluding the impact of valuation gains/losses from

interest rate swaps, increased by ¥125.1bn (£950m) to ¥109bn (£828m). In Central and South America, Oceania and Africa, operating income increased by ¥23.6bn (£179m) to ¥41bn (£311m). Production of the Auris Hybrid started in July at Toyota’s Burnaston plant in Derby. Toyota Manufacturing UK is to produce 30,000 Auris Hybrids annually, with sales of the vehicle starting July 1. Regaining trust Toyota was already struggling with the financial crisis that hit global demand for vehicles when it was forced to issue a string of recalls because of safety problems. The company has recalled about 10m vehicles globally in the past year for various problems including faulty floor mats, sticky accelerator pedals, braking software glitches and steering malfunctions. Its reputation has taken a hammering, particularly in the US where it is facing hundreds of lawsuits. “We will try to regain trust from our customers as quickly as possible and we will continue our effort to improve sales,” said senior managing director Takahiko Ijichi.

The Toyota Auris

Newsinbrief bever a ges

Diageo on the up The company behind the Johnnie Walker brand has said net sales have increased by 6%, barely a year after it closed its bottling facility in Kilmarnok with the loss of 700 jobs. Paul Walsh, chief executive of Diageo, said: “As expected this has been a year of challenges and opportunities. Our performance was much stronger in the second half than in the first: our performance in the developing markets drove overall growth while markets in North America and Europe remained weak. However, even though markets and categories have been affected in different ways and to differing degrees, we have been consistent in our focus to deliver growth and build a stronger business for the future.” The company saw its operating profit rise to £2.57bn in the year ending June 30 2010, up from £2.4bn over the same period last year. Walsh added: “We increased marketing in growing categories, delivering 5% organic net sales growth in scotch and 5% organic net sales growth in beer. We have outperformed and delivered share Johnnie Walker is one of gains across most of Diageo’s leading brands our biggest markets.

fin a nce

Putting green in the black The Government must expand the existing loan scheme for small businesses and provide incentives for firms to ‘green’ their buildings, according to the Federation of Small Businesses (FSB). Otherwise, the UK may fail to meet its obligations to reduce its carbon emissions by 20 per cent by 2020, the federation – which seeks to protect the interests of the self-employed – has warned. The FSB believes that to get small business owners to proactively embrace energy efficiency, the government needs to make going green economically viable. While many small businesses understand the benefits of green investment, the upfront cost is a huge disincentive. Currently, small firms can access a 0% loan scheme for energy efficient equipment. The scheme allows firms to ‘pay as you save’ so that they can realise a genuine cost saving through energy efficiency, without having to make an upfront cost.

TRANSPORT

Train maker Bombardier will supply another 14 light rail vehicles for Manchester’s Metrolink system. This option forms part of the contract signed with Greater Manchester Passenger Transport Executive (GMPTE) in April 2007 and is valued at £27m. Bombardier’s share amounts to about £20m. Philip Purdy, GMPTE’s Metrolink director, said: “We are pleased to be ordering a further 14 vehicles in addition to the trams already on order.” SKILLS

Semta, the employer-led Sector Skills Council for Science, Engineering and Manufacturing Technologies, has created a new Regional Council for Yorkshire and the Humber to better support appropriate skills development for employers in the region. The chief executive of Sheffield Forgemasters, Dr Graham Honeyman, CBE, has been appointed chair of the new council. AUTOMOTIVE

The UK automotive market relapsed into recessionary trends in July with new registrations falling 8.9%, month on month. The recovery of the UK automotive market stalled in July with new registrations falling 8.9%, month on month. The Society of Motor Manufacturers and Traders (SMMT) says it is the first monthly fall since October 2009.

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Newsinbrief

AUTOMOTIVE

JLR helps Tata profits soar

MERGERS AND ACQUISITIONS

Mergers and acquisitions deal activity in the aerospace and defence (A&D) sector was relatively sluggish in Q2 2010, according to a new PricewaterhouseCoopers report. While the pace of deal activity in the A&D sector remains above the recession lows of Q1 2009, the overall deal market recovery took a relative pause in Q2 2010. During the quarter, there were seven announced deals worth $50m or more, compared to the eight deals reported in Q1 2010. The total value for announced deals in Q2 was $2.2bn, a significant decline from the $5bn in total deal value from the first quarter of this year.

HEALTH AND SAFETY

The manufacturers’ organisation EEF, the Health and Safety Executive (HSE) and the Trade Union Congress (TUC) are jointly running seminars across the UK as part of the European Safe Maintenance Campaign. The HSE says more than a quarter of fatalities in manufacturing involve maintenance work. Topics at the seminars will include management of asbestos, isolating machinery and selecting contractors. Steve Pointer, EEF’s head of health and safety policy, said: “The fact that maintenance is not directly part of the manufacturing process means that it is all too easy to forget when thinking about health and safety.” The seminars cost £25 and last half a day.

ENGINEERING

Qualified professional engineers have done well despite the recession, figures show. Those holding the professional engineering qualifications Chartered Engineer (CEng), Incorporated Engineer (IEng) or Engineering Technician (EngTech) are very likely to have held on to their jobs. AEROSPACE

The value of orders made during the Farnborough International Airshow (19 – 25 July) was slightly higher than in 2006, but far lower than in 2008. The 2010 Airshow saw £31bn of orders placed. This was down on the record performance of £56bn in 2008 but up on the previous record of £29bn from 2006.

India’s Tata Motors has posted bumper Q1 profits and revealed it plans to begin some Land Rover assembly operations in India. Tata has released quarterly Although 2000 staff were cut profit figures of 19.9bn rupees at JLR in 2008, the new Range (£311.3m), which have come Rover Evoque, revealed last largely on the back of growing month, is set to be built at the demand for its Jaguar and Land Halewood plant in Liverpool. Rover (JLR) brands. JLR, which According to Reuters, Tata it bought from Ford in 2008 for chief executive officer says the $2.3 billion (£1.5bn), reported company plans to start assembling a strong rebound from the some Land Rover vehicles in India recession thanks to booming from next year and is in talks for exports to China reporting a assembly line operations in China. profit before tax of £233.8m. Tata has confirmed the report but Wholesale volumes for JLR in says no UK jobs will be affected by Q1 were 57,153 units compared the move. to 35,947 units in Q1 last year. Its retail sales also improved favourably in Kirby Adams, managing the quarter, director and CEO of Tata on the back Steel Europe. of continued overwhelming response for Land Rover products and the newly launched Jaguar XJ.

a utom a tion

The rise of the machines Sales of automation and robotic equipment are up 55% in 2010 compared with the same period last year, according to the British Automation and Robotics Association. This is the first time the sector has grown since 2006. Historically one of the largest purchasers of automated equipment, the pharmaceutical industry has increased its orders further over the last year and buys more than any other sector, with 19% of the overall market. Surprisingly, the food and drink industry has also substantially increased its investment levels in packing, palletising and handling

equipment and is now the second biggest purchaser, beating the automotive sector, with 17% of the market. “Despite the hugely challenging economic climate, this survey provides further proof that our industry has continued to invest heavily both in new factories and higher productivity,” said Julian Hunt, director of communications at the Food and Drink Federation.

Newsinbrief S teel

Deal done to buy Corus site Thai steel company SSI has signed a memorandum of understanding to buy a mothballed Corus Steel factory for £320m and hopes to begin producing steel again in 2011. The Teesside Cast Products plant in Redcar was mothballed by Corus owner Tata Steel earlier this year after a consortium of four international steel buyers pulled out of a ten year contract which provided 80 per cent of the workflow at the site just four years in. Today, Tata announced a deal has been reached with Thailand’s largest steel producer, Sahaviriya Steel Industries (SSI), to buy the plant. SSI has said it plans to employ over and above the 700 workers there. “We are very pleased to announce this significant progress in our long-held objective to sell the TCP assets to a strategic industry investor,” said Corus MD and CEO Kirkby Adams. “This is the first of several steps required to reach a definitive sale agreement in the coming months which, with the anticipated co-operation of the government, employee representatives and the North East community, should result in the restart of steelmaking on Teesside in the first half of 2011. Having known SSI for the past ten years, I am confident that our collaborative efforts in the period ahead will provide a more sustainable business for the people of Teesside.” Win Viriyaprapaikit, President of SSI added: “We have great respect for the tradition of steelmaking on Teesside and for the highly skilled Teesside workforce, having previously purchased slab from Teesside Cast Products. “For the past year we have held very constructive negotiations with Kirby Adams and the Tata Corus team and we look forward to engaging with all stakeholders in the same spirit of co-operation to secure a final agreement. “This transaction will enable SSI to fulfil its longstanding objective of becoming a fully integrated steel producer with both primary steelmaking and rolling facilities.” Earlier this month Corus announced it is to invest £185 million pounds to rebuild a blast furnace at Port Talbot steelworks in Wales. The work will begin in 2012 and will increase the facility’s output by up to 400,000 tonnes a year.

SMEs

Small and medium-sized enterprises could be the fastest route to recovery, creating jobs that require and teach a wide range of skills and boosting indirect employment, according to a report by the University of Cambridge’s Institute for Manufacturing (IfM). However, over the past 10 years business support channelled towards efficiency improvements and increased competitiveness has led to fewer jobs and stifled GDP growth, the report warns. While productivity remains important, the IfM says that focussing on growth will lead to increased sustainable employment and financial value for businesses.

FOOD AND BEVERAGE

Clean label ingredients manufacturer Ulrick & Short Ltd has launched a unique wheat-based flour for replacing egg in sponges, muffins and cupcakes. The egg replacement, Ovaparox, could help bakers overcome the mounting issues of fluctuating egg prices. The company says this could help achieve cost savings of up to 30 percent. Several major bakeries in the UK have already introduced Ovaparox into their product ranges.

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Datesfor yourdiary September Throughout September EEF is holding seminars focusing on the Equality Act 2010 and employment law updates throughout the UK. For further information visit www.eef.org.uk/events

8-9

The Energy Event is being held at the National Motorcycle Museum. For further information visit www.theenergyevent.co.uk

9 14-16

MAS North West is holding a workshop at SCA Hygiene UK in Skelmersdale. For more information call 0800 458 9585

MAS South East is holding a Lean Facilitator training course within the Oxford and Buckinghamshire area. For further details contact Christine Wheeler on 01256 741034

The CBI is holding the CBI Energy conference at the Royal Society in London. Booking and information are available at www.energyconference.eventbrite.com

15-17

The Institute of Manufacturing is holding a Tribology course to educate industry representatives further about the science and engineering of interacting surfaces in relative motion. For more information visit: www.ifm.eng.cam.ac.uk/tribology

The Lean Management Journal is holding the Lean Directors’ Seminar at Spinningfields, Manchester. Visit www.lmjournal.co.uk or telephone 0207 401 6033

EEF is holding a one-day seminar focusing on pensions and benefits, to be held at BDO’s office in Birmingham. Visit www.eef.org.uk/events/current for more information.

MAS NW is holding a one day seminar focusing on opportunities for SME’s in the civil nuclear supply chain. For booking and information call 0800 458 9585

28-29

The FDF will be present at the National Food and Drink Manufacturing conference, at the Oxford Belfry Hotel. For further information contact events@iosh.co.uk or 0116 257 3378

EEF is holding a one-day seminar focusing on pensions and benefits, to be held at Engineers House in Bristol. Visit www.eef.org.uk/events/current for more information.

October Throughout October EEF is holding seminars focusing on Pensions and Benefits. For further information visit www.eef.org.uk/events Throughout October The Freight Transport Association is holding a series of Transport Manager Seminars throughout the UK. For more information contact the FTA’s media team on 01892 552255.

SKILLS

Skills gaps could ruin industry A leading industry professor has warned that manufacturing in the UK could “collapse” within five years because of a lack of skills. This is despite manufacturing output being higher now in terms of overall value than at the industry’s employment peak in the 1960s. Professor John Bryson, chair of Enterprise and Economic Geography at the School of Geography, Earth and Environmental Sciences University of Birmingham, maintains that manufacturing is currently thriving and not in decline – the tale often told by the media – but its demise could soon be brought about by a severe shortage of skills. There will be 90,000 jobs in the West Midlands alone over the next five years which will be “hard to fill”, he contends. He says this is the result of an inefficient education system which itself is borne out of the fact that “policy makers and government no longer understand British industry”. “Unfortunately manufacturing conjures up images of pollution, heavy engineering, and industrial decline, but this view is now outdated and anachronistic, and does not describe the new breed of British manufacturing companies that are constantly adapting and changing to the needs of the customer and finding innovative ways to improve their business,” says Bryson.

RENEWABLES

US investment in UK wind American Superconductor has announced it has acquired a 25% stake in Isle of Wight-based wind turbine company, Blade Dynamics. The UK designer and manufacturer of advanced wind turbine blades sold the stake for $8 million in cash plus one seat on the company’s board. Blade Dynamics designs increase efficiency and performance of high power wind turbine blades. Dow Chemical (DOW) also purchased a minority stake in the company. “The design and manufacturing processes for wind turbine blades have remained fundamentally unchanged for 20 years,” says American Superconductor (AMSC) CEO, Greg Yurek. “Today, however, the market is migrating to higher wind turbine power ratings. Onshore wind turbines now exceed 2 MW in many locations, and offshore wind farm developers are increasingly seeking wind turbines with power ratings exceeding 5MW.

Newsinbrief DEFENCE

Future of aircraft carriers uncertain Britain and France are discussing options to share aircraft carriers amid pressure on the Ministry to cut costs.

DEFENCE

British defence company QinetiQ has announced plans to shed further jobs. The company said: “QinetiQ confirms that it has commenced consultation with its trade unions regarding a proposed reduction of 325 employees in the UK. This is in addition to the potential reduction of 391 employees announced on 6 July and follows a detailed review of its UK businesses.” QinetiQ employs a total of 6,500 people in the UK and 13,000 across the group. Last year it made a loss of over £65m despite revenues of £1.6bn.

GOVERNMENT Part of new QE Class aircraft carrier in build

According to a report in The Times, an unnamed Royal Navy source said that the PM David Cameron and French President Nicholas Sarkozy are expected to announce the proposal at a summit in November. Earlier this month, a Defence Ministry source told Reuters that Britain might cancel one or both of its planned new aircraft carriers to cut costs, though there were no plans to scale back the country’s nuclear deterrent. The Times reports that the proposal would ensure that one of three ships – one French and two British – would always be out at sea on patrol. The proposal involving France would make it easier for Britain to scrap or downgrade one of the two replacement carriers currently under construction. However with more than a quarter of the work on the two new carriers already completed, it is unlikely that the Government will scrap the £5bn project. Joe Doogan, the manufacturing director at Rosyth, told The Times that visitors experienced a “jaw-dropping moment” when they saw all the work. “It’s a realisation. Especially when you see ship number two under way at the same time. It isn’t abstract, it’s here now,” he said. A question mark remains, however, over the future of the second vessel: whether it will go ahead as planned or be significantly downgraded to save money. There is also the likelihood of a rethink about the type of aircraft that will fly off the carriers, particularly in the event of future cooperation with France. An alliance of three major defence companies that are building the carriers for the MoD say that it would be possible to adapt the ship decks to use catapults to launch conventional aircraft — used by France and the United States — rather than the current design which accommodates the more expensive short take-off vertical landing jets. Depending on the Government’s decision, more than 10,000 jobs associated with the boats are potentially at risk along with the future of Britain’s shipbuilding industry, which has already been reduced severely since its hey day 50 years ago, especially in Scotland.

The Business Secretary, Vince Cable, has announced a new package of measures to cut unnecessary regulation. The measures will help transform the relationship between people and government by changing how regulations are drawn up, introduced and implemented. From 1 September, a new One-in, One-out system will begin: When ministers seek to introduce new regulations which impose costs on business or the third sector, they will have to identify current regulations with an equivalent value that can be removed.

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Next month, The Manufacturer and EEF begin a formal arrangement that will provide more information that is relevant to running manufacturing companies. Taking a regional focus, we will cover subjects like health and safety, legal issues and technical support centres.

ManufacturingAppointments UK Appointments Jo Murphy & Catherine Wright Food and Drink iNet

The new Food and Drink iNet advisors are: Jo Murphy,

administering Northamptonshire, Stevie Jackson, supporting businesses in Leicestershire and Rutland, and Catherine Wright, covering Nottinghamshire. All have experience of business support and the food and drink sector.

Grant Griffiths Fastlane Ventilation Equipment

Air handling and heat recovery specialist Fastlane Ventilation Equipment has appointed Grant Griffiths as external sales engineer. Operating

nationwide Griffiths and will be involved in generating specifications and quotes while examining ways to improve and streamline operations.

Natasha Künker PULS UK

Leading DIN rail power supply manufacturer PULS UK has appointed Natasha Künker to assist with its sales and marketing operations at the company’s UK headquarters

in Bedfordshire. Kunker will also provide accounts department assistance utilising a recently acquired degree in accountancy from Coventry University.

Paul Tierney Sperian Protection UK

Sperian Protection UK has appointed Paul Tierney as its new national product sales manager for its hand protection

products. Tierney joins Sperian from Marigold Industrial where he was regional sales manager.

Evolution Time Critical has appointed Alex Burnett as European sales development manager. Burnett, previously of logistics firm TNT, will be responsible for forging relationships with European car manufacturers and their tiered suppliers. Leading pharmaceutical manufacturer, Aesica, has appointed Andrew Henderson as business development manager at its head office in Newcastle and Anthony Allcock as site director at its Queenborough base. Henderson will support the existing business development team to promote the company’s Active Pharmaceutical Ingredient (API) development capabilities. Allcock will work closely with the company’s commercial team to exploit the assets offered by Aesica and promote its end-to-end service proposition. The International Institute of Risk and Safety Management (IIRSM) welcomes Barry Holt as director of policy and research. Holt will facilitate the investigation of research opportunities and work closely with CEO Brian Nimick to raise the international profile of IIRSM. IIRSM has also announced that honorary vice president, Professor Brian Toft, has been awarded an OBE in this year’s Queen’s birthday honours list for his services to healthcare.

Three new business advisors have been appointed to help food and drink firms in the East Midlands develop.

Jaguar Land Rover welcomes Frank Klaas as global head of communications. Klaas joins JLR from General Motors Europe, where he was general director for Opel Communications. He will assume global responsibility for communications and public affairs reporting directly to Jaguar Land Rover’s CEO Dr Ralf Speth.

International Appointments CMA CGM Group has appointed Olivier Dubois as group chief financial officer, replacing Jean-Yves Schapiro who has decided to take on new challenges outside the shipping industry. Dubois graduated from ESSEC Business School in 1976 and IEP Paris (Business Administration) in 1978. His experience has spanned over 30 years with roles at companies including BNP Paribas and SPIE Group. Diversified industrial manufacturer Eaton Corporation announces Nanda Kumar as president EMEA for the vehicle group. Kumar will report to Joe Palchak, president – vehicle group, and will be based in Turin, Italy.

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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The big picture Unique chance to explain growth needs to Government Peter Templeton Institute for Manufacturing

Ron

The Department for Business, Innovation and Skills’ new paper, Strategy for Sustainable Growth, offers a real opportunity for SMEs to explain to government what barriers to growth they come across. Peter Templeton of the University of Cambridge’s Institute for Manufacturing welcomes a new focus from Westminster on manufacturing growth.

Dennis, boss of Formula One’s McLaren, recently added his voice to calls for a structured approach to rebalancing the economy. Mr Dennis called for a targeted focus on engineering and manufacturing to achieve growth. He has not been alone. Dick Olver, chairman of BAE Systems, made a similar call at the unveiling of his company’s skills strategy document on July 13, urging the Government to work with industry, professional institutions and academia to invest in the UK’s engineering and manufacturing skills base. The Government appears to have heeded the call. The Department for Business, Innovation and Skills (BIS) has issued a strategy document, Strategy for Sustainable Growth, outlining its thoughts on growth, building on our strengths in design, creative industries and innovative manufacturing. Among proposals to improve regulations and remove barriers to trade, the paper talks about encouraging entrepreneurialism – which could be very good news for manufacturers. The document argues that private investment will be the fundamental driver to economic recovery and more must be done to help established small businesses reach their full growth potential. Drawing on the annual BIS Small Business Survey, the report says that 70% of SME employers aim to grow their business over the next two to three years - but only 20% actually experience growth. The document outlines the Government’s willingness to engage with businesses and institutions to establish a new Manufacturing Framework, due to be published in the autumn. This framework aims to address the barriers holding back our manufacturing sector, examining everything from access to finance and overseas markets, to improving the nation’s skills base. This is a positive advance and something those of us concerned with manufacturing have been calling for. We need to take the opportunity to inform this debate and to make our voices heard. It is encouraging to read in the BIS document that the Government believes the priority should be to help companies with growth potential to develop the strategies and capabilities required in order to grow, create new jobs and contribute to the country’s economic recovery. Perhaps no other sector than manufacturing has as much potential to overcome the challenges wrought by the current ‘unbalanced’ state of the UK economy.

These are, in particular, to realise value from the country’s distinctive science and technology base, and to provide employment opportunities for people with a wide range of abilities and skills.

Help with coherent business strategies Many manufacturing SMEs are companies which, once they have the right strategies in place, can achieve real growth, both in terms of financial value and wider economic and social benefit. The BIS document is a positive step forward in terms of setting out the goals we need to aim for. The next step is to decide the best way to go about achieving them. Over the last eight years the IfM and its industry engagement arm, IfM ECS, have worked with more than 500 manufacturing SMEs in a range of industries around the UK, and the lessons we have learned from this diverse group of companies, we believe, could help inform the debate. SMEs can be helped to grow and flourish by supporting the development of coherent business strategies, giving a clear basis of competition. This needs to be underpinned by business-wide prioritisation that identifies the most important issues for each company, which results in a focused action plan agreed by the management team. SMEs have limited resources, and they are constrained on the number of improvement projects they can focus on at any one time. Providing a clear set of priorities improves the firm’s chances of growth, and focuses effort on areas where it will have the greatest benefit. It is essential to recognise that SMEs should not be treated as small versions of large companies. Structured approaches to business strategy and capability development need to be designed for and made accessible to them. Encouragingly, the BIS document recognises this – and that focus needs to be on ‘growth’ rather than ‘productivity’, because increased productivity without output growth leads to increased competitiveness but fewer jobs. We are faced with a rare window of opportunity, a chance to tell policy-makers about how they can best assist manufacturing SMEs in their desire to achieve success. Everyone within the manufacturing community should make sure their voice is heard.

IfM-ECS has published a new report on business support for manufacturing SMEs, ‘Stimulating growth and employment in the UK economy’. See www.ifm.eng.cam.ac.uk. The BIS paper ‘Strategy for Sustainable Growth’ is available at: http://interactive.bis.gov.uk/comment/growth/

Economics Coalition’s first big test Steve Radley, Director of Policy, EEF

Last

month marked the passing of the first 100 days of the new government. In the Coalition Agreement, the two Parties promised to create a more balanced economy dependent on a narrow range of economic sectors. As part of this ministers have stressed the increased importance of UK manufacturing. Looking back to a little over 100 days ago, we faced a different set of worries, as a hung parliament brought the prospect of further political and economic stasis. Could a workable coalition be pulled together, or would we be left with an unstable minority government with another election to follow. In either outcome, it was going to be a question of how a consensus would be reached on tackling difficult and potentially unpopular decisions, not least reducing the deficit. Ultimately however, the primary concern was what impact such decisions would have on jobs, investment and growth? Now just over three months on, at least some of the uncertainty has been removed. We have something of a clearer idea about the coalition’s policy priorities, what they mean for manufacturers and what is yet to come. Central to the coalition’s agenda is the drive to roll back the state and with that, to reduce dependence on government and publicly funded and delivered services. In part this is a consequence of the current fiscal crisis we’re in, but it also reflects a radical rethinking of the role of government. Programmes that are likely to be supported in future, such as business support and backing for new technology development, are likely to be much more tightly targeted. It is yet to be seen however how a desire from the centre to reduce the amount of top down control will work in practice. There are three main conclusions that can be drawn from the coalition’s first 100 days. Firstly, some of the actions have undoubtedly given the private sector a greater degree of confidence. The ambitious, but seemingly achievable, deficit reduction plan should ensure that the bulk of the bad news on tax increases is now out in the open. The Treasury’s commitment to restoring predictability in the tax system will also help businesses plan for the future.

While the government has hit the ground running with an ambitious and sometimes rushed set of announcements, the issue remains whether these can be pulled together or will the array of often radical reforms prove too much for a flagging recovery to bear. Secondly, progress is evident in some but not all aspects of policy, towards removing barriers to private sector growth. Departments have been quick to move on plans to reduce regulation, improve access to finance and simplify the skills system – all of which, if not tackled, present potential obstacles to growth for manufacturers. Ongoing engagement with business to get these right will be critical. For capital-intensive sectors however, not all the initiatives have been positive. Corporate tax cuts go some way to a more competitive tax base, but other tax changes could curtail investment and pose a setback to rebalancing over the longer-term. Finally, the coalition’s ambitious agenda has proved that some reforms are best made at a more deliberate pace. Clearly some rapid decisions were needed to remove uncertainty about potential tax rises, for example. In other areas, such as the localism agenda, there is a risk that precipitate action may result in confusion and unnecessary costs being incurred. The transition for example from, Regional Development Agencies to Local Enterprise Partnerships must bring both businesses and local authorities behind the changes if they are to work. It is still early days, but what matters next is how the different elements of policy will be pulled together into a coherent whole. Whether spending review decisions are guided by this will be a key test for the coalition’s commitment to rebalancing. With cuts to capital budgets in the pipeline, for example, the government will need to be clear about how it will prioritise much-needed infrastructure investment. The forthcoming ‘Manufacturing Framework’ and the growth white paper will also need to show that the government can look beyond the business environment and take a more sophisticated, practical view of its role in the economy. One hundred days in and we have a clearer view of the governments’ priorities, many of which will be supported by manufacturers, and some of which will inevitably disappoint. Yet ultimately, the success of the coalition will not lie in what reforms individual departments can implement. Its success will be determined by whether the government, as a whole, can unify the disparate elements of its economy policy into a coherent agenda for a better balanced economy and stay the course.

Have your say at www.themanufacturer.com

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Exclusive pre-conference workshops (November 17) Lively manufacturing debate and insight from a government policy driver

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

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Thelegallowdown What is reasonable? As manufacturers naturally look to secure their supply lines in these uncertain times, we seem to have been speaking to our clients a great deal recently about distribution agreements.

With

that in mind, it is worth looking back to last summer and reminding ourselves of a landmark judgement in the High Court that gave manufacturers some useful guidance on factors to consider when looking at exiting a distribution agreement. The decision in Jackson Distribution Ltd v Tum Yeto Inc considered what constitutes a reasonable period of notice when terminating a distribution agreement, other than for breach. This is likely to be an issue where there is no formal written agreement or the contract itself is silent on the issue (which means a ‘reasonable period’ of notice will usually be implied by law). In this case, the parties agreed that Jackson Distribution would be the sole distributor for certain goods of Tum Yeto (the owner of a clothing brand) via a series of emails, and each sent their own form of draft agreement to the other, neither of which were signed. Two and a half years later, Tum Yeto attempted to terminate the agreement without notice, which Jackson contested. The court considered what the agreed terms of the arrangement were and on what basis Tum Yeto could terminate it. In the absence of a written agreement, the court ruled that the distribution arrangement should be terminable on reasonable notice. It then had to decide what was “reasonable notice” in the circumstances? The court considered various factors including: the length of the relationship between the parties; the lack of formal arrangement between the parties; the extent of Jackson’s early investment; the percentage of Jackson’s turnover made up of Tum Yeto’s supplies;

For more details contact: Shaw Stapely, Associate, Thomas Eggar LLP shaw.stapely@thomaseggar.com

that Jackson had agreed not to sell competing products; the seasonal nature of the business; and how long it would take to find a new brand to distribute and achieve profitability. The court concluded that a reasonable notice period in this case would be nine months and Jackson was entitled to damages for the nine month period from when Tum Yeto had attempted to terminate the agreement.

What does this mean for manufacturers? Termination of distribution agreements can be tricky for manufacturers and the bullet points above serve as a useful checklist of facts to consider when deciding what is reasonable notice. However, each case will depend on its facts and periods of six and three months have been held to be “reasonable” in the circumstances. For the distributor, a period of notice needs to be sufficient to allow the manufacturer the ability to find alternative business. As Jackson Distribution and Tum Yeto found out to their considerable cost, there is no substitute for having a written contract with defined termination provisions and express notice periods. The question for you, the manufacturer, is do informal agreements with suppliers play a significant role in your business operations? If the answer is yes then you should seriously consider formalising those arrangements and entering into written contracts that offer you sufficient protection if things go wrong.

businessasunusual All smoke, no fire Anand Sharma, Chairman and CEO, TBM Consulting Group

Every

time there’s a major transportation disruption someone opines that today’s manufacturing companies are too lean, and that just-in-time strategies are backfiring. Supply chains aren’t redundant enough, they say. There’s not enough just-in-case inventory in the pipeline. We should go back to the good old days when manufacturers had warehouses full of stuff sitting around waiting for orders to come in. The essence of the argument is that sourcing parts and products from all over the world, coupled with just-in-time and an efficiency mentality that ties up as little capital as possible in inventory, has created a situation where any disruption anywhere in the world brings global capitalism to halt. Where’s the evidence? Let’s look at the eruptions of the volcano in Iceland this April and May. Eyjafjallajoekull grounded all European air traffic, passenger and freight, for five days. Combined revenue and passenger compensation losses for the European airlines stand at an estimated $1.7bn. Then there is the lost revenue of businesses that depend directly on air freight, such as the African farmers whose flowers and vegetables rotted because they couldn’t ship their perishable products into Europe. So, without question, the eruption had a huge financial impact on a few industries. But what about the ripple effect into other industries that depend upon efficient and reliable global logistics networks?

Taking the heat During the flight shutdown a number of large, publicly traded companies reported volcano-related supply chain disruptions. The second quarter numbers are now in and we can see if those disruptions had any material impact on financial performance. It was widely reported that the loss of air freight in and out of Europe forced BMW Group to reduce output at three manufacturing plants in Germany and one in the US. Leather seat covers from South Africa and transmissions and other parts from Europe were stuck on the ground. You might say that’s a supply chain disruption of the first magnitude. But they must have found alternative transportation lanes. BMW’s recent quarterly report covering April and May does not contain one mention of the volcanic eruption. In fact, the company’s revenues increased by 18.3% and vehicle sales climbed 12.5%.

In a less connected world hurricanes, floods and the occasional volcanic eruption did not have the global business impact that they do today. Still, supply chains have a long way to go before they can be considered “too lean.” Because air-pressure sensors from Ireland could not be shipped, Nissan Motor Co. had to shut down production lines in Japan. But for its first quarter, ending June 30, 2010, Nissan sold 32% more vehicles compared to the same period in 2009 and net revenue increased 35.3%. Digging a little deeper, during the months when the ash plume stretched across Europe, Nissan’s production in April increased 57% year-on-year, marking an all-time record for the month. Production in May increased 42% year-on-year, another record breaker. Even in the UK, at the heart of the transportation disruptions, Nissan production volume increased 25% in April over the previous year. Granted, the previous year was dismal for auto sales but BMW and Nissan are not the only companies that are bouncing back from the global recession despite supply chain disruptions. Beyond the automotive industry the flight cancellations caused shipment delays for notebook computers for Dell’s European customers. Again, there is no mention of any financial impact in Dell’s quarterly financial report. For the quarter ending April 30, sales increased 18%, gross margin increased 16%, and operating income increased 25%. Finally, the South Korean electronics and appliance conglomerate Samsung reported that product exports dropped 20% during the flight ban. But Samsung posted a 17% sales increase in its second quarter on strong sales of semiconductors, flat-panel TVs and smart phones. Despite almost three decades of applying just-intime principles, today’s global supply chains remain loaded with unnecessary inventory buffers and other opportunities for efficiency gains. The market landscape of course is constantly changing, which is why every supply chain that I’ve ever analysed to any depth offered plentiful opportunities to trim millions of dollars of costs, without increasing exposure to risks. In fact, from procurement practices to distribution, network design to how work is managed on the warehouse floor, the potential changes and improvements actually reduce risk exposure. Major transportation and supply chain disruptions grab headlines and cost billions of dollars, but today’s lean and flexible global supply chains are not the fragile networks that they’re sometimes made out to be. They are, in fact, more robust than they’ve ever been.

Have your say at www.themanufacturer.com

Production

gets smart

Talk of advanced manufacturing across all industry sectors has exploded in the last 12 months. But what does advanced manufacturing really mean for UK companies in terms of processes, skills and competition? Jane Gray finds out. A bed of aerospace parts made in nickel based super alloy In718 using DMLS

Leadstory Production gets smart

There

is a question mark beside the new Government’s business policies, where after a positive Budget manufacturing is unsure about the future of initiatives like the Manufacturing Strategy and the Manufacturing Advisory Service. This was exemplified by the disquiet following the withdrawal of the pledged £80m loan for Sheffield Forgemasters. Despite this, advanced manufacturing is still the strategic buzz word for the future of British industry. But this is an ambiguous term for many. The wealth of new high-tech processes that make up advanced manufacturing seem to be poorly understood by the manufacturing community as a whole, in terms of the potential these processes have for bringing competitive advantage. TM talks to representatives from industry and academia about their involvement with some of the most forward-thinking production methods in development.

Additive manufacturing 3TRPD is a specialist in additive layer manufacturing using precision laser technology. Working with plastics and metals the company boasts the UK’s largest selective laser sintering (SLS) facility and is a leading provider of direct metal laser sintering services (DMLS) to the medical device and aerospace industries across Europe. Chief executive Ian Halliday explains what this radical new production method could mean for British industry, and highlights the challenges that bar the way for wider adoption: “The potential that additive manufacturing could bring to British industry is massive. But the biggest thing standing in the way of that potential is lack of education and awareness. “3T holds seminars with existing and potential customers to try and counter this as well as partnering with universities like Loughborough, Oxford and Exeter. We are particularly proud that we have good working partnerships with competitors to help strengthen our emerging industry.” Despite a perception that additive manufacturing is a nascent technique available only to the cashrich for the production of low volume parts, Halliday draws attention to his plastics business. “Plastics now provide us with a profitable and varied market. Around 30 per cent of the plastics we produce are architectural models and the bulk of our production is on a variety of prototypes for different industries. We also make production parts like electrical windings and there are some exciting possibilities opening up in luxury consumer goods like lamps and jewellery.” What is the benefit of producing these products through additive layer manufacturing rather than injection moulding techniques? “The windings we produce have thin fins about a millimetre apart,” says Halliday. “Creating an injection mould for that shape would be very difficult and the chance of those fins surviving more than a few injections is minimal. By using additive manufacturing our customer

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Lead story Production gets smart

got a significant performance increase, and we’ve produced around 15,000 windings for them.” But it is the metals application of SLS and DMLS which holds the real key to changing industry. “The potential here is a thousand times greater than in plastics,” says Halliday. “The important thing with metals is for people to understand the limitations of the process. Then they can start thinking about the applications. “The major limitation in DMLS is in the need to build supports for any surface with an angle of less than 30 degrees to the horizontal. These supports can be machined away but need to be considered in the design phase of a part.” This is not the case with plastics which are light enough to be free forming. Other constraints are material suitability and component size. Learning to work creatively within these boundaries could change engineering and production practices on a large scale. 3TRPD is about to sign contracts with a large medical company for the batch production of medical implants and it supplies parts to all but one of the big aeroengine manufacturers in Europe. “We are talking about serious parts, like parts for live test-bed jet engines. The products we will produce for these markets are far lighter than anything that

The potential that additive manufacturing could bring to industry is massive. The biggest thing standing in the way of that potential is lack of education and awareness Ian Halliday, 3TRPD

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cONFERENCE 2010

ChEsfORd GRaNGE KENilwORth

could be created using conventional methods [such as milling] because we can build internal and external structures, hollow structures in one go and variegated skin thicknesses. This has the dual advantage of allowing us to optimise a part for specific stress and load expectations. We can create structures that are simply impossible using machining or injection moulding.” However, Halliday stresses that he does not want additive manufacturing to be seen as a panacea or a replacement for more traditional manufacturing techniques. Instead, he explains how additive manufacturing can enhance them. With injection moulding, for example, Halliday says that it is frustrating that many companies are unwilling to think about the opportunities available through collaboration. “Resistance to change and a persistence in seeing additive manufacturing as a threat is a real barrier and it is stopping the UK tooling industry seizing the competitive advantage they sorely need to rival China and Asia.

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“One way that additive manufacturing could give this advantage is through creating more efficient cooling channels in tooling parts. We can easily build conforming cooling channels within a mould – for tooling companies this means that products will cool more evenly and more quickly, reducing faults and maximising throughput. Some companies we have worked with have reported a 25 per cent increase in throughput from this development and sometimes it is more than 50 per cent.”

Thixomoulding This form of semi-solid metal casting is commonly used in Asia for the high volume production of small components for consumer electronics. But improvements in the quality, precision and reliability of the technology means that it could now be exploited in the UK for producing high value components in the automotive and aerospace industries as well as by companies making low to medium volumes of goods for niche markets. Advanced engineering company Shearline has chosen to pursue this opportunity and, in partnership with the University of Sheffield and

Additive layer manufacturing at a glance Products are built layer-by-layer using a precision laser to melt a powdered substrate either of metal or plastic. The laser builds the product working directly from CAD data with no need for moulds or casting. Multiple products for different parts and customer orders can be created in the same machine run and adjustments can be made to the design of products between runs with ease. The process is energy intensive but efficient in materials consumption and can create high efficiency savings in the lifecycle of a product through material optimisation and weight reduction. Research has shown that reducing the weight of an aircraft by 100kg using additive manufacturing structures would save approximately 4.5million litres of fuel over the lifetime of the aircraft, equating to one million tonnes fewer CO2 emissions. For an airline operating 30 long-haul aircraft this would mean saving £2.5m per year (data courtesy of Exeter University). The UK is currently a world leader in terms of additive manufacturing capability and capacity, but funding is limited and 3T’s average lead time between expression of interest in DMLS potential and production of parts is two years.

the Advanced Manufacturing Research Centre in Rotherham, will soon establish the UK’s first test rig for magnesium thixomoulding. Charles Maltby, technical and commercial director at Shearline, explained why he feels this is important for British industry: “There are no machines capable of performing this process in the UK at the moment and only about six in Europe. We are behind. “Magnesium thixomoulding allows designers to experiment with exotic, free-flowing shapes and to exploit the light weight yet resilient qualities of magnesium as a material. High performance motor car manufacturers are already using magnesium to make hidden parts and increase performance.” Shearline has not been shy to grasp the potential of additive manufacturing in creating adventurous designs for their moulds in short turnaround times. Mr Maltby says that a coalition between these two technologies could open new possibilities to the many UK companies who make low to medium volume products. Using additive manufacturing to grow the tools and then injection moulding a complex design in one step could greatly simplify the supply chain for niche parts and would be cost effective without making design compromises. At a time when the sustainability of production processes is under ever-closer scrutiny, the importance of thixomoulding becomes even more acute. “Magnesium is one of very few metals that can be applied to the mould in a thixotropic state. It is not molten but sheered into particles the size of sugar granules and with some temperature and pressure it takes on the qualities of a liquid. This process cuts down on the energy needed to melt a metal but also reduces pollution as the sulphites and sulphates produced when melting metals are excluded. It is a very clean process.” Magnesium is a very green and sustainable material. It is extracted from different ores and not very intensively at the moment, but it is in huge natural abundance. “A cubic mile of seawater contains 400 million tonnes of magnesium. This can be extracted as a bi-product of desalination processes,” says Maltby. One big market that Shearline hopes to attract with thixomoulding capabilities is aerospace. Magnesium is one third lighter than the aluminium typically used in aircraft production today and while it may not be a suitable material for high load-bearing parts yet, there are myriad parts and casings in aircraft, many of which are made from aluminium and machined from solid which could be exchanged for less energy intensive, lighter magnesium alternatives.

Printed electronics Not all advanced manufacturing methods have to include disruptive shifts in technology. Some of the most exciting possibilities in manufacturing are inherent in capabilities that the UK already has strengths in.

Lead story Production gets smart A heat exchanger prototype built in one process using additive manufacturing

An example is the printed electronics industry. The implications that the development of this industry could have for a whole range of sectors is staggering. Terry Watts, CEO of Proskills, the Sector Skills Council for the process and extractives manufacturing sector, says: “The process for printed electronics is pretty consistent with standard printing, but instead of printing ink you print circuits; potentially quite sophisticated circuits. I have seen solar panels being printed and even a television, but there are more mundane applications such as printing lights into wallpaper. Much research is going into the types of substrates companies can use to print on. These are mainly fabrics at the moment, but it is possible to print onto paper, plastics and ceramics. “Critically, the technology you use to print electronics is the same as you would use for magazines and newspapers. Without too much cost or upheaval you can turn a normal litho printer into a machine for printing solar panels,” adds Mr Watts. “Academia claims that the UK is the absolute world leader in this technology and according to international benchmarks Britain has the strongest printing industry in Europe, so this could potentially have a very big impact on the economy.” The obstacle to seizing this lucrative opportunity, as with additive manufacturing, is awareness, says Watts. “The technology is not widely known about among printers and the supporting supply chain. Even the trade bodies seem under-informed, so Proskills is working hard with academia to educate our sector. It is a common problem that in the UK we are often world leaders in understanding new technology, and in driving research into its application, but not in converting that into production capability.”

The smart road ahead Smart production processes have many enthusiastic champions in the UK. Among these is Sir James Dyson, who in March this year produced an extensive report for the Conservative Party on the

importance of R&D and forward-looking technologies to the strength of British industry and the UK economy’s ability to recover from recession. Mr Dyson’s report, Ingenious Britain, states that “for advanced economies with relatively high labour costs, producing standard products using standard processes would not sustain competitive advantage.” Sluggishness from some organisations in opening their eyes to new technologies and the education channels around them is, arguably, holding British industry back. Meanwhile the cost of the new generation of smart techniques must not be discounted. Cash for investment is thin on the ground and lack of financial confidence among SMEs due to sluggish bank lending and uncertainty over the reliability of government funding streams is a problem. However, through collaboration, exploiting tax credits and partnering with universities, research centres and larger industrial enterprises, it is possible to explore how the latest technologies and skills sets could transform companies’ competitive scope.

17-18 NOVEMBER Chesford Grange Kenilworth Warwickshire

THE G R E AT RESET

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

Chairman and CEO, GE

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Have your say at www.themanufacturer.com

Ayearon... On 12 November, 2009, TM’s annual Directors’ Conference played host to fierce debate over the responsibilities and requirements of UK manufacturing companies. One year on, has progress been made? Jane Gray investigates.

Nigel Stansfield, Senior VP product and innovation for InterfaceFLOR

Last

year’s Manufacturer Directors Conference (MDC) received excellent feedback from attendees who praised speakers for providing relevant and thought provoking presentations. Resoundingly, however, the memory that many took away was of the intense afternoon debate session. Led by a panel of manufacturing exponents, all experts in their various fields, the debate session drew out the best and worst of manufacturing in the UK. The best was demonstrated in the passion and conviction that delegates had for their profession. The worst came in the consensus that this passion was simply not being communicated or capitalised on by the industry as a whole.

Here are some comments made by delegates and speakers last year on the challenges in skills, market exploitation and communication: Linda Rawson, training and development manager at MX award winning company

Gripple, said: “There are many who are being lulled into a false sense of security at the moment; [they] assume that high unemployment will provide a bolster to the manufacturing workforce. This is false. We need to put a higher value on our industry skills. We need to take on the responsibility of working proactively with education to ensure a future workforce well versed in key industry concepts and skills-like constraint theory and lean or six sigma principles. Employers need to realise the potential that creating this workforce would give- if they do not, British manufacturing will die a death.” Tim Admans-Palmer, of Lewisham College’s The Skills People, contributed: “The event provides a real opportunity for us to get under the skin of Britain’s top manufacturers and gain understanding of their frustrations and development needs. “Mechanisms exist for working with employers, but we need their experience to support us, shape our strategy, our curriculum and our delivery methods. Without this knowledge transfer how can we support operational excellence and impart the

Specialfeature MDC

right skills for the development of the manufacturers of tomorrow? “Manufacturers need to connect with local colleges and work in partnership; explore ways to tailor modern apprenticeships to fit their needs. It’s no longer good enough to say young people are not being taught the right skills.” Charles Morgan, MD of Morgan Motors, raised the imperative for investing in innovation and R&D. He identified obstacles for SMEs, but also opportunity. “For a small company like mine, looking to expand into new technology markets like electric cars, there are challenges in accessing funds and we rely on government bodies like TSB. It is vital that we have the technology to pursue these routes. Popular issues such as sustainability and the green agenda have given rise to a new enthusiasm for engineering and the challenges involved in making products that perform to the radically changed demands of our present and future.”

Reset? We are now a year on and have progressed another small step further into that future. Governments, both in the UK and further afield, have changed and the beleaguered global economy is on its way to recovery. But has business and industry reset itself in alignment? There certainly seems to be a growing zeitgeist for manufacturing in the UK. A crescendo of voices across the political spectrum, swearing fealty to industry and stating the sector’s importance to the rebalancing of the UK economy, are drawing out the benefit that could be brought in social regeneration to struggling regions. But what does this noise mean about the competitive state of Britain’s leading manufacturers or the behaviour of the directors and CEOs who lead them? Have we overcome those obstacles that animated delegates to MDC 2009 and what are the new challenges that have come in their wake? Jim Wade, principle of the JCB Academy will be speaking at MDC 2010 and has this to say about the progress of industry skills development in the UK: “The national curriculum is still based around the grammar school curriculum from the last century, if not the one before. It is therefore designed to enable students to progress and achieve success at academic disciplines. Although many schools and colleges have developed programmes that attempt to develop a more skills based approach these have yet to become main stream due to pressure to achieve success in traditional GCSE and A Level qualifications.” But The JCB Academy has set a precedent that could change this. Offering a mix of STEM focused GCSEs, A Level and Diploma qualifications the institution is a forerunner of the new University Technical Academies which are currently under development. These Academies will deliver a similar programme to that available at The JCB Academy and plans exist for up to 20 University Technical

Academies to be opened in the next 2-5 years. As far as industry best practice is concerned Nigel Stansfield, senior VP product and innovation at carpet tile manufacturer InterfaceFLOR, another MDC 2010 speaker, says developments in R&D approaches signify a metamorphosis in business. “Collaborative R&D is transforming innovation approaches. People are realising that it is far more beneficial to think of the world as your lab than to think of the lab as your world. Companies need to accept that there is great talent beyond their boundaries and collaborate to access that.” Stansfield points out that this approach will not only make far more adventurous R&D viable for SMEs with little cash to spare but that it marks a turn to longer term thinking in risk-reward planning. “The old approach was closed-door and secretive. You take all the risk and you reap all the reward. The trouble with that is that the implications of failure are dramatic and far more likely than if the pool of experience is wider and the risk is shared. Returns on success can still be lucrative, are likely to be more frequent and will bring broader shared benefits to industry.” Interface’s innovation agenda is heavily influenced by its commitment to environmental sustainability and Stansfield believes that the company’s strategy in this area represents another broad industry switch to more holistic thinking. “Our Fast Forward 2020 programme engages staff and builds understanding of how practices are tied to our environmental agenda and broader social and economic issues. This supports a common purpose across employee activity and means employees need to understand why they are carrying out certain operations.” Interface have found that this joined-up approach makes the pursuit of business strategy more effective; engaging employees in its development and helping to “recruit and retain committed employees.” Fast Forward 2020 is a great demonstration of pro-active industry communication with stakeholders, customers and society which highlights the exciting directions modern manufacturing is taking. There are of course many other business functions and practices which have had to change; as a result of recession, socio-political pressure and due to realisations that business complexity has now reached new bounds. In the next issue of TM more MDC 2010 speakers will share their experiences of how these changes have impacted their organisations and, of course, the exploration will continue at MDC itself. This year MDC will take place on November 18th at Chesford Grange, Warwickshire. The conference is preceded by a day of exclusive workshops and will be followed by our prestigious Manufacturer of the Year Awards.

Have your say at www.themanufacturer.com

Scuoler determined that industry is

Ne Obliviscarus

Will Stirling talks to EEF’s CEO Terry Scuoler about determination, the Government’s conviction in industry, promising horizons and, above all, the need to invest.

EEF’s

new chief executive, Terry Scuoler (pron. ‘Skool-er’), seems to be made of the right stuff to lead the UK’s main manufacturers’ organisation. Five and a half years in the British Army and 26 years in manufacturing, much of it at the “front end” of engineering and product development, should be a solid grounding to lead the trade body in challenging times. And his 10 years in charge of Ferranti Technologies, manufacturer of avionics systems, will be a valuable experience. The Oldham-based company was suffering from financial problems when he joined 1999. Orchestrating a management buy-in with his own money and private equity backing, he and his team led Ferranti from a loss-making position to that of sustainable profit and increased the order book by a factor of 10.

*Never Forgotten, the motto of the Argyll and Sutherland Highlanders

Scuoler, a soft-spoken but direct Scotsman, has had a colourful career. The Army, he says, was a very solid foundation. He was a combat solider in the infantry and airborne infantry with the Argyll & Southern Highlanders and saw active duty in Northern Ireland. “For a young man in junior leadership role as an officer, it was on occasions demanding and frightening, but it is very character building. Without a doubt I benefited strongly from the Army and don’t regret it for a moment.” After a brief spell in advertising sales, he joined Royal Ordnance in 1982 and remained there after it became a public corporation in 1985 and was sold to BAE Systems in April 1987. His first appointment for divisional board at Royal Ordnance, in the electronics division, was in charge of 1,100-1,200 people at the Blackburn site.

Interview Terry Scuoler

Following BAE Systems’ purchase of Royal Ordnance in 1987, the Scuoler took the commercial management path, progressing through junior to senior management. “At some fairly early point you move into general management, when you’re running a business or part of a large business, and every business is about engineering and manufacturing. I’m in no shape or form an expert in engineering, but I’ve had a lot of exposure to it over the years,” he says. In 1999 he took a risk and engineered the buyin of Ferranti Technologies, an essentially good company with serious financial problems. “What makes someone decide to give up a good corporate ‘day job’ and to invest in a troubled mid-sized business, put in an equity stake, risk your own money, and try to develop an underperforming business strategically?” Determination and selfmotivation, says ex-colleague and now managing director of Ferranti, Steve Warren. “Terry has high levels of motivation and determination – it was this motivation, along with the key team, that got Ferranti through some very difficult years from 1999 to 2001. He’s a good guy to have on your side.” Ferranti was sold in 2007 to Israeli-owned Elbit Systems, but Scuoler stayed on as an employee for a further three years. Warren is keen to add that Elbit was chosen partly because it provided the best platform to protect and create jobs in the UK, which Scuoler backed, and has since invested heavily in people. On Ferranti’s turnaround, Scuoler says: “It takes some form of vision, and the attitude that I can do this – for myself, for the business I’m embarking on, for others. I’ve got a passion for what I’m doing, which then was an aerospace and defence-oriented manufacturing company.”

Wider horizons Why did he want to take this make-it-work approach beyond the defence sector and work for EEF across all sectors? “Even in the difficult times at Ferranti, I made decisions that we must invest,” Scuoler says. “Unless you’re investing in the asset – in technology, plant and equipment, people and training – then you’re not developing the business. I used to think that quite strongly when I looked at companies in other sectors, where some perhaps didn’t have the courage of their convictions. I’ve nothing against foreign ownership, I support the free market, but when I saw other businesses being bought up often rather cheaply, without a strategic plan for growth, I got frustrated. I regarded manufacturing generally as the great organ for growth; once you’ve put some form of product or technology module in whatever capacity into the marketplace, you get spin-offs from it – ongoing spare parts, logistical services, training and support, the next derivative of it and so on. I saw that as something that I could influence and do something about.”

Government intent and a Budget for business EEF has faced big challenges through the recession, with cash-strapped companies looking closely at their non-core spending. Its membership numbers remain close to, if not slightly higher than, pre-2008 levels, but revenues are down because fees are linked to members’ payroll. But Scuoler is upbeat about prospects for UK manufacturing and senses a tangible zeitgeist of positivism. “Possibly never before in my memory have we had such positive governmental and media statements of support for manufacturing,” he says. “In the run-up and immediately after the coalition Government formed, the Prime Minister and cabinet ministers made such positive statements about manufacturing and a rebalancing of the economy that I don’t think they’ve got much room for manoeuvre.”

Even in the difficult times at Ferranti, when money was tight, I took the decision that we must invest and invest heavily The first evidence of that intent was the Budget on June 22. On balance, Scuoler says, manufacturers were supported in that Budget. “We could have wished that capital allowances were not reduced to assist the deficit reduction. Yes this was a concession, and capital gains tax rises won’t be popular, but when you look at the whole picture – corporation tax reducing by 4 per cent over four years, and reducing the small firms tax rate from 22 per cent down to 20 per cent, I don’t think this was a bad Budget at all.” Despite this, Scuoler was disappointed that the Budget had very little for investment for growth in industry, on which there was plenty of talk from all parties leading up to the election. UK industrial competitiveness is all about investment today, he says. EEF surveys show that manufacturing investment has reduced considerably, but Scuoler says he is beginning to see signs that investment is returning. Scuoler is sympathetic to the wretched market conditions companies have faced, but he is firm on the need to make tough decisions. “Some manufacturing companies will have taken steps to invest in the latter part of the recession,” he says. “There’s a judgement call to make here, there is something called leadership. While I acknowledge there are serious issues with access to capital, at some point you’ve just got to be a bold enough to take decisions to invest. At certain points when I was taking these decisions, the businesses I ran struggled with cash flow in the early part of that investment, and I may have had issues with using new plant effectively. Further on, when the teething

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The Manufacturer.indd 1

19/05/2010 13:43:19

Interview Terry Scuoler

problems were out of the way and we were using the machines effectively, I never once regretted deciding to invest in plant or equipment.”

Come together EEF is a membership organisation. “We wish to be unequivocally the single, lone voice for manufacturing in the UK,” Terry says. “We are also a business services organisation – 50 per cent of our revenue comes from business services. We need to build our membership and we need to broaden our

Biography Terry Scuoler 1971:

MA in Economics, University of Glasgow

1973-8:

Short Service Commission in Argyll and Sutherland Highlanders

1978:

Ad Salesman and Ad Manager for 4 trade journals

1982:

Joined Royal Ordnance as European Marketing Manager

1987:

Royal Ordnance acquired by BAE Systems

1987-91:

Progressed through commercial and project management roles to Division Director (1991) of RO Electronics Division and 1994 Head of Procurement at MBDA.

1999:

Led management buy-in as MD into Ferranti Technologies

2007:

Ferranti Technologies sold to Elbit Systems Ltd. Scuoler remains as MD

2010:

Becomes chief executive of EEF in March

At Ferranti turned around a traditional and declining electronics company, and tripled turnover from £10 to £30m and grew order book by a factor of 10 to £50m. Born in Glasgow Loves visiting the Regions, visiting and talking to staff and manufacturers. Has a desire to see the UK regain its historic and rightful place as one of the world’s manufacturing and engineering powerhouses.

membership to include all sectors of manufacturing.” Strongly linked to SMEs, EEF’s strategic review earlier this year recommended that it open its doors to all companies, from small firms to the multinationals. Another proposal is to attract a broader range of businesses that are associated with manufacturing who share EEF’s policy agenda, such as transport and logistics and material handling companies. “This will strengthen our agenda and our ability to represent a wider base that will help in the corridors of power.” In lean times there is a case for consolidation, Scuoler says, and not just in business. “Successive governments have spent a lot of money spent on initiatives set-up to encourage manufacturing in the UK. To a large extent this has been scattergun and this needs to be pulled together.” So what about rationalisation of non-governmental organisations, such as trade bodies? “There are several [trade] organisations who would share my view that some form of rationalisation would be beneficial. Some of them have had a pretty torrid time over the last couple of years. It is a valid view that to a degree, larger is better and more focused, especially if that relates to sectoral coverage. We live in an open society, where people are free to push their agenda. But from a macroeconomic and sectoral point of view, sector trade organisations could do better in terms of more cohesive, coordinated performance.”

Is big better? Hard skills, as ever, is a big issue for this sector. “Several members are reporting that a skills shortage is emerging. The need for STEM subjects especially, but apprentice-level skills, and not just for teenagers but more mature work-based skills.” In what way does EEF engage with the skills debate? “We have a voice, I sit on the board of Semta, we’re talking to the skills minister and his colleagues at BIS. We lobby but we don’t play politics – whenever we come to government we come with evidential-based quality survey work that we can piggyback on to get a high quality dialogue.” So what will EEF focus on to tackle the elephant in the room, sustainable manufacturing growth? “We’ve got to support entrepreneurial start-up opportunities, whether graduating students or small groups leaving larger organisations. More, and to be fair continued, support for them in driving start-ups is important.” EEF is currently looking at what turns an SME into a large-medium sized business. “I slightly fear, and I hope I’m wrong, that once an SME always an SME in the UK. What obstacle dynamic hinders an SME of 200-250 people from moving into that 500-1,000 employee size. This is a personal concern of mine that we can look at.” Terry Scuoler has the minerals, as they say in the Army, to take EEF forward through a bumpy recovery. A strong focus on lobbying government for a simpler tax system, widening the membership to pro-manufacturing service companies and a focus on support for investment should endear him to a growing membership.

Have your say at www.themanufacturer.com

The

Tom Falcon, production and distribution director at Shepherd Neame brewers

taming of ERP Notorious for the trauma it can cause to business infrastructure, enterprise resource planning has nonetheless become a necessity for competitive companies today. How can manufacturers tame this intractable software shrew to optimise system potential and return on investment? Shepherd Neame tell their story. Enter Tom Falcon Shepherd Neame is the oldest brewer in the UK, a company shaped by its long heritage and committed to brewing excellence. In 2008 the Shepherd Neame board took a radical departure from tradition to appoint Tom Falcon as production and distribution director. A six sigma black belt and business improvement specialist with a background in logistics,

Falcon had no expert knowledge of brewing but he says: “I was brought on board to bring a new angle a different skill set in business efficiency and process excellence. I think it took a lot of courage on the part of the Shepherd Neame board to depart from tradition in this way but arguably it is what a lot of established businesses need to do in order to gain new insight and become more competitive.” They could hardly have chosen a more opportune moment to embrace his skills. Alongside his task of establishing an operational excellence programme to build on Shepherd Neame’s inherent product quality culture, Falcon’s first task on joining the company was to manage the imminent go-live of Shepherd Neame’s state of the art ERP investment. It was a time of trepidation for the whole organisation says Falcon. “A big ERP implementation ought to involve some pretty rigorous process re-engineering prior to go-live and I think that, had not been done to the extent that it could have been, the experience would have been very tough.

Specialfeature ERP Connect

“Introducing an ERP system is all encompassing in the impact it makes across departments previously existing as silos. Finance, marketing and sales, manufacturing and so on – all these departments are suddenly connected and unable to pull away from one another. When the first customer order comes in, this creates an overwhelming tug towards demand. At this point everyone gets dragged along by it but in the meantime we had a situation where people didn’t know how to enter a credit note or complete an important form. We were not as confident in it as we needed to be because the training was weeks before and only lasted four hours. At this point I have seen many companies brought to their knees.”

Facing the challenge Determined not to meet this fate, Falcon drew on his knowledge and recruited help from within the business to start harmonising his lean improvement ambitions and effective use of the new ERP technology. Falcon chose Ben Wright to become his right hand man in the fight to transform Shepherd Neame from being simply an excellent brewer into an exemplary modern enterprise. In his role as business improvement and supply chain manager, Wright has been responsible for gaining some of the company’s biggest lean wins including an IQPC process excellence award for the Best Improvement Project Under 90 days. Key to the success of this project, and many others in Shepherd Neame’s portfolio, has been ERP technology but not simply in terms of the system’s capabilities. Falcon knew that: “The payback from all the pain of implementing ERP can be vast. If you can get your arms around the system you can be knowledgeable about data that you never had before.” And seek more ambitious improvement goals with new confidence. In order to get the company’s arms around its technology investment Falcon married user progress and confidence to his broader business improvement initiatives. “We spent an intense period gathering all the different business issues together using affinity matrices, value stream mapping and other lean methodologies to draw out the organisational building blocks for improvement. This resulted in five key objectives for improvement one of these five objectives is called ‘SAP perfect’.” ‘SAP perfect’ is now a key pillar within all Shepherd Neame’s lean improvement projects. Individual and organisational expectations are set around progress in this area and performance has a significant impact on lean maturity ratings. Falcon’s innovative approach has built understanding around how the use of ERP and continuous improvement in operations function together. This enables employees to use lean thinking in their interrogation of ERP data. According to Falcon: “The key thing was to have people identifying the right questions to go after in each process, and more importantly to give the right person responsibility for chasing that question within the system – key areas for us were supply chain efficiency and procurement.”

Wright was among those who thrived on this joined-up approach and he acknowledges that the award winning transformations he achieved in the company’s inventory management would not have been visible without ERP. “We had no idea about customer service levels so we weren’t seeing the effect of stock levels and discrepancies on our customer – it was not visible,” says Wright. “In terms of inventory level management, we get by the minute updated stock values and stock turns. On the old system I truly knew our stock value maybe three or four times a year after a stock take and to calculate the stock turn would have taken me about a day. ERP has changed everything.” Falcon attributes some of Shepherd Neame’s success in mastering its ERP challenge to the size of the company. “The key thing is to after the waste that the system highlights fast,” he says. “Because we only have fifty or sixty users on our system we have found that we are very flexible in doing that. We had daily meetings on how to hammer out problems but stayed operational throughout when I know other companies have had to switch the whole system off, realign, and switch it back on again.” Within six months Shepherd Neame was utilising its ERP technology for advantage, gathering management information and acting on it effectively. “It was during this first six months that we undertook our inventory control project and in less than ninety days we had learnings that we could start applying across all our other SKUs. Some of the outcomes from this particular project have been dramatic and will become more dramatic.” One of the most important developments gained through the inventory control project has been increased on shelf performance. This improvement has transformed Shepherd Neame’s standing with major retail customers enabling them to be flexible and effective in responding to the inconsistent and unexpected demand that often arises as a consequence of unscheduled supermarket offers or because another supplier has failed. The project has achieved a lost sales reduction of 92%. Falcon says this is because: “Our attitude and abilities have been transformed from selling what we had when we had it to selling what the customer wants when they want it.”

To be continued Shepherd Neame is now in new hunting ground with its lean projects and discovering new challenges and opportunities in the ‘SAP perfect’ pillar. To learn more about how this cornerstone objective was created and integrated into Shepherd Neame’s lean maturity roadmap or to hear about how the company prioritised its next steps, attend TM’s ERP Connect event in Manchester on October 21. Ben Wright will share his insights into lean ERP transformation. Find out more at www.erpconnect.co.uk

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The

green

Green

is now more than ever a potent marketing strategy. Manufacturers are under pressure to show that each component of their supply chain is environmentally friendly. A certified carbon neutral product, for some companies, is now one of a supplier’s most important selling points. The pressures on businesses to do less The M with more will only increase in the short top 1 anufac ture 0 mad sustaina r’s and medium term as rising landfill costs, fluctuating energy prices, the rising cost blye pr in th oducts of certain raw materials – notably steel e UK – force companies to think further ahead and make important future investments now. Significant technological and behavioural changes will be required to meet these resource constraints. No longer just a matter of decreasing The good news is that completely unexpected costs through improved efficiency, cost-saving benefits are often found in adopting pressure on manufacturers towards more environmentally-friendly business practices. The Manufacturer believes that the following sustainable production methods have companies are leading the way in developing come from environmental legislation sustainable products – products which help meet and the expectations of society. the needs of this generation without jeopardising Lorenzo Spoerry reports. future generations’ ability to meet theirs.

list

Vitsoe

The downward trend in the prices of most consumer products and the concurrent rise in repair costs has meant that many durable goods like furniture are now considered disposable. This leads to a vast amount of wasted resources. With products such as the “606” universal shelving system, part of the collection of the Museum of Modern Art in New York, the high-end minimalist furniture manufacturer has carved out a niche by counteracting this trend towards disposability and establishing extreme durability and versatility as its unique selling point. At the core of the “606” shelving system is the E-track. Attached

directly to the wall, shelves, cabinets and tables are hung from the E-track and the entire system is easily modified to suit demands of space and taste. Founded in Germany in 1959, Vitsoe moved production to the UK in 1995, eventually settling in Camden. Since then, sales have increased by 20% year-onyear. Its customers, the majority of whom are adding to or modifying their existing

Vitsoe’s “606” universal shelving system is extremely durable and can be modified with ease

Vitsoe collection, understand that they are making a lifelong commitment. Over the past 50 years, their customers have proved willing to pay a little more for the knowledge that they will be able to rearrange, reuse, and rely on their Vitsoe products for decades to come.

Sustainable manufacturing

Adnams

Suffolk-based Adnams produces traditional British ales which are sold to pubs and retail outlets across in the UK. With help from the Carbon Trust and the University of East Anglia CRed carbon reduction scheme, Adnams reduced the carbon footprint of a single bottle of their East Green beer brand by 25%. A new distribution system incorporating solar heating and rainwater recovery technology allowed the company to reduce their electricity bills by £49,000 per annum; and investment in new steam production equipment that allows 90% of the heat for one brew to be used for the next has cut gas bills by 31% despite rising consumption. Through carbon offsetting to the value of 0.004p a bottle, the company was able to get its beer officially certified as carbon neutral up to the distribution centre. Adnams takes a distinctly holistic view to profit, ensuring that its impact on the environment is minimal. Investments in green technology haven’t always been cheap – the new distribution centre which features glulam beams made from sustainable wood sources and rainwaterrecycling techniques cost 15% more than a standard building – but Adnams takes the view that revenue-neutral or slightly revenue-negative investment in green production is worthwhile East Green beer bottles are entirely and contributes to the long term carbon-neutral sustainability of the organisation.

Lush

Poole-based Lush has constantly been at the forefront of environmental innovation. Each Lush Shampoo Bar (55g) lasts as long as three bottles (250g) of ‘regular’ liquid shampoo, says the manufacturer, and would therefore save three bottles from being manufactured, transported and disposed of. Compared to bottled liquid products, which are full of water and are heavy, bulky, and inefficient, Lush solid shampoo products are concentrated, weigh less easy to transport and are sold unpackaged. That means that one lorry load of shampoo bars would be enough for 800,000 washes, but it would take 15 lorry loads of liquid shampoo to do the same job. Helen Ambrosen, Lush product creator and co-founder said: “We’ve been making them for years and they’ve now become a really important category for our customers, as more people feel they want to do something to help the environment. By buying something as simple as a shampoo bar they are helping to do their bit”. Lush currently employs around 1,500 people, including manufacturing, shop staff and head office support. The Karma Komba shampoo bar with lavandin oil

Sonae Industria (UK)

Sonae Industria (UK) supplies 98% recycled increase the levels of recycling they do in plants that particleboard to kitchen and flooring manufacturers. Its were originally designed to process virgin wood fibre, plant in Knowsley, Merseyside processes the partiallygiving Sonae a comparative advantage. cleaned scrap wood. A £6.5m investment in new cleaning facilities allowed the company to go from using 50% virgin wood, 50% recycled material to sourcing 98% of its wood from local authority waste sites used by the construction industry. Sonae Industria (UK)’s annual carbon footprint of 32,600 tonnes is about half that of the UK panel industry’s average. When the Knowsley site was first built in 1999, management recognised that virgin wood was going to be in limited supply, and Sonae’s 38mm Mezzdek product has decided to build the plant from scratch in an enhanced moisture resistant characteristics environmentally-friendly way. With the price and load bearing properties. of raw wood rising, many of the company’s competitors have been forced to gradually

Framptons

The food and drink processor and manufacturer diversified into liquid food contract packaging ten years ago, and watched its carbon footprint rise considerably. “Our aim is to be the most carbon efficient liquid food contract packaging business in the UK, and in 2007 we kicked off a programme to help us achieve that goal,” says James Lampe, sustainability and cost controller at Framptons. Framptons began working closely with its suppliers, who responded enthusiastically. One supplier agreed to supply products in returnable containers. The company now recycles all wood, metals, plastics, food, paper, boards, phones and computer equipment. Investment in new steam production equipment and general energy efficiency savings means that the company generates 61g of CO2 for every litre of finished product -- less than half the industry average. In 2009 the company was awarded the EEF Environmental Achievement Award. It employs 160 people in Shepton Mallet, Somerset.

Framptons liquid egg carton range generates 50% less CO2 than the industry average.

Foster Refrigerator

The commercial refrigeration manufacturer’s Eco Pro product refrigerator range was developed through exhaustive field trials and independent testing by the University of Bristol’s Food Refrigeration and Process Engineering Centre. Over a 10-year lifespan, Foster’s new refrigerators will save 4.6 tonnes more CO2 than equivalent models in the marketplace. “Refrigeration and air conditioning account for 10 per cent of worldwide carbon emissions, and we’re doing what we can to reduce that” says John Savage, food service director for Foster Refrigerator. The Eco Pro range has qualified for the government’s Enhanced Capital Allowance which gives customers tax relief of up to 8.6% on any Eco Pro refrigerator or freezer product. Eco Pro refrigerators are also considerably cheaper to run than their competitors’ models, Foster claims. The company has turned environmental innovation into a marketing tool, with considerable success. Foster has seen sales to its core customer base increase by 20% and currently employs 245 people at its site in King’s Lynn in Norfolk. Foster Refrigerator’s E PRO G1350 Model

Axion Polymers

Axion Polymers supplies some of the UK’s largest garment hanger manufacturers with its 100% postconsumer recycled product, Axpoly PS13, which now carries a label showing its carbon savings. This polystyrene is made from recycled coathangers, which is then re-used to make new ones in a closed-loop recycling process. Old hangers are collected from stores and either reused or broken up. At its Salford site, Axion processes the shredded plastic into pellets

which is then be used as 100% recycled polymer to make new coat hangers for some of the most wellknown brands in the UK retail sector. Director Keith Freegard explains the business plan: “The UK retail market for consumer goods really appreciates the importance of ‘carbon impact’ as part of the marketing strategy for any new product. We have found that purchasers are often influenced by the relative ‘greenness’ of our product.”

Axion operates a closed-loop coathanger recycling system, with its products ending up in some of the UK’s best-known shops

Sustainable manufacturing

Boss Design

Warwickshire-based Boss Design has been making carbon-neutral office furniture since 2007, and won the Queen’s Award for Enterprise in 2009 and the Green Apple Awards - which reward environmental best practice - in three of the last four years. Recognised for its ergonomic quality as well as its design, the company’s Lily mesh-backed chair received silver awards for its aesthetics at The Office Show in Dubai this year. All Boss Design’s products are designed to have minimal impact on the environment, with simple end-of-life-management with easy to remove components and the use of materials that can easily be recycled. During its life, the Lily chair’s components such as the upholstery and arms can be easily removed and replaced if required, reducing its carbon footprint by extending its lifespan. The product is 100% recyclable and already contains 40% recycled product when new.

Milliken

The Wigan-based carpet manufacturer is marketing a new cushion backing which extends the life of carpets. The backing contains 85% locally sourced, recycled content. Officially certified as carbon-neutral, the company’s stringent water monitoring policy and its use of dye injection instead of conventional yarn dying techniques has meant that total water consumption has been reduced by 60% since 1995. Total waste produced has also fallen sharply – by 70% – over the same period as UK landfill costs have risen. In May, Milliken was awarded sixth place in the Sunday Times’ list of the 100 Best Green Companies. Milliken’s Fixation carpet uses 85% recycled cushion polyurethane for enhanced sound absorption

Boss Design’s white Lily mesh chair

Axon Automotive

Northamptonshire-based Axon Automotive has just launched its new plug-in hybrid. Fitted with a bioethanol engine and batteries, it emits 50g of CO2 per km and can reach 100mph. On road fuel consumption is expected to be 100 miles per gallon. In a bid to reduce weight as much as possible, Axon cars have an ultra-lightweight carbon body using materials based on Formula 1 car bodies and buyers are likely to qualify for a £5,000 grant from the Government. This model should be available to buy as early as 2011. Axon’s low-emission production cars should be available to buy from 2011

17-18 NOVEMBER Chesford Grange Kenilworth Warwickshire

THE G R E AT RESET

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

Ex-head of Shell’s Strategic Planning Group

www.themanufacturer.com/mdc

Have your say at www.themanufacturer.com

21ST OCTOBER Manchester United Football Club 09:00 –16:45

Connect with like-minded manufacturing professionals looking for growth and opportunity through advancing their IT systems.

The Manufacturer magazine is delighted to invite business, financial, operational, supply chain and IT manufacturing professionals to ERP Connect. At ERP Connect you will: Get up to speed with the latest developments in enterprise system thinking through a series of keynotes and breakouts. Benchmark your project, learn from best practice case studies and deliver on expectations and demands of your organisation. Network with fellow manufacturing professionals who are engaged in ERP projects. Seize a unique opportunity to debate, share and build on your knowledge base with peers facing similar challenges. Accelerate your project by engaging in one to one meetings with a select group of leading ERP vendors that can provide expertise by sector and organisation size. Map out a robust ERP strategy and ensure ROI.

CONNECT FORMULA One to One focused meetings

The connect element enables each attending company to meet vendors across the spectrum in short one to one meetings. This saves weeks if not months of research as companies will quickly establish which vendors are most suited for further engagement. Delegates from companies participating in the one to one meetings receive free entry to the ERP Connect conference programme, free parking, lunch and delegate pack. PLATINUM SPONSORS

ERP Connect is a unique focused event for manufacturers engaged or looking to engage in an ERP project. Who should attend ERP Connect? • Business executives • Financial executives • Manufacturing, operations professionals • Supply chain and procurement professionals • IT and systems professionals

Previous attendees included: • Manufacturing & Operations Directors • Financial Directors • IT & IS Managers & Directors • Purchasing Managers & Directors • Supply Chain Managers and Directors

ho nd s w ngs te ate eti at eleg me to d ne * ring -to-o EEfactu one FRanu r for m e r st fo egi r

I would definitely recommend attending this event, the one-to-one sessions were extremely useful and the speaker presentations were good Manufacturing Director, Timsons Ltd at ERP Connect, April 2010

ERP PROGRAMME OPENING KEYNOTE: Simon Moores

Managing Director, Zentelligence An authority on the evolution and delivery of electronic government, Dr Moores is also Chair of the International ecrime congress and a Vice Chairman of The Conservative Technology Forum. He will explore the fundamental arguments directing the internet’s next stage in evolution, driven by the likes of Google, IBM, Microsoft and Amazon, and commonly known as ‘Cloud Computing.’

MANUFACTURING KEYNOTE: Jeff McGowan Sourcing Manager, LifeScan, Johnson and Johnson

Jeff will demonstrate the importance of understanding the complexity within business systems and removing waste across the supply chain through lean, to ensure ERP creates value across the enterprise. Drawing on research into dynamic complexity and systems thinking Jeff will make clear links with steps that have been taken at Johnson and Johnson to alter the way their ERP functions and relates to business processes.

Eight breakout sessions to choose from, including: Sam Collard

Group Financial Director, Murray Metals Holdings Ltd

Tyrone White

Head of Manufacturing Talley Group

Mathew Davies

Head of IT & Commercial Supply Chain, Kinnerton Confectionery

Benn Wright

Supply Chain & Business Improvement Manager, Shepherd Neame

To view all the speakers and case study presentations visit www.themanufacturercom/erpconnect

FREE* to attend for UK manufacturers *Delegate fees are £295+VAT per person, manufacturing delegates who register for one-to-one meetings can attend for free

THREE WAYS TO REGISTER: 1: Book online by visiting: www.themanufacturer.com/erpconnect 2: Telephone Dennis Frize on: 0207 401 6033 3: Email: d.frize@sayonemedia.com GOLD SPONSORS

SILVER SPONSORS

Breaking subconscious conditioning Exploring obstacles to lean manufacturing

Michael Hammer, co-founder of the business process reengineering management theory, said that 50% of companies fail to â&#x20AC;&#x2DC;do leanâ&#x20AC;&#x2122; and for 70% of companies who have tried, lean was not fully implemented. Will Stirling finds out what obstacles lean faces in an organisation.

Mike Anthony conveys the Lean mentality to staff at Cogent Orb Electrical Steels

Leadership and Lean

When

it works, the power of lean manufacturing is intoxicating. Just ask Cogent Orb Electrical Steels (Cogent). The South Wales-based maker of high grade electrical steel, used in the power generation industry, was on its knees in 2003 and faced closure. Lean – or at least Cogent’s interpretation of lean and the cultural change that it brought with it – saved the business. Lean can be very simple, while still a revelation. “Tell everyone where you are, what you’re going to do and why you’re going to do it,” says John Homewood, continuous improvement and safety manager at Cogent in Newport. “Before we called this ‘lean’ it helped us to turn the business around, make a profit and live to fight another day. For us, it provided a great foundation for future understanding within the workforce, business growth and maturity into lean.” Cogent is not alone. Across the UK, manufacturers, financial services companies and public sector institutions like hospitals have been transformed in the way they function and communicate with their staff, focusing only on adding value to the customer and consequently driving out waste. Exponents of lean can be positively evangelical about the benefits it brings. And lean is surely essential for manufacturing in a high cost economy: without lean or TPS derivative systems in practice, Honda, Nissan and Toyota would not build cars in the UK. But if lean is so great, why don’t all companies of a critical size ‘do’ it? And why does lean not always work in those organisations who’ve tried it? Is it the people? Are the tools incompatible with the organisation? Has the consultant failed? Exploring obstacles to a lean programme is like opening Pandora’s box, where the forces that escape are a potent combination of organisational behaviour, psychology, management techniques and manufacturing processes. A trite answer for why lean stumbles is: we are only human, and naturally resistant to change. But humans are also smart and, when shown a system that makes sense and the benefits of that system, very adaptable. Despite our intelligence, however, subconscious conditioning is a powerful force and one of the biggest obstacles to embracing a lean mindset is overcoming conflicting and deeply entrenched mindsets, says Andie Hallihan, managing consultant at business consultancy Applied Angle. “Many of us are conditioned to think ‘mass’, to think big is good. At one level many of us know that is wrong, but few of us know how it is wrong, and its implications. Look at consumer behaviour: we buy two pints of milk because it’s cheaper than buying one pint of milk twice. This is ingrained and it’s difficult to unlearn.” There are obstacles to both lean implementation and sustainability. If a crude breakdown of obstacles to implementation is divided into two parts, technical and human, this article focuses on the technical obstacles.

Technical – Simple tools-based Hallihan says there are two main levels of lean obstacles: the technical and human side. The technical side can be split into two camps, where the first is tools-based. “That’s the easy stuff to teach and understand. 5S, SMED (Single Minute Exchange of Die), kanban trays – none of these are insurmountable. These are not the reason why lean fails,” he says.

A key obstacle is where employees have been exposed to poor attempts of lean implementation – often poorly understood, tool-based attempts – which creates a negative view of lean Richard Lloyd, Constellation Park

However, adopting a technique but letting it slip a few months later is a good example of where lean fails. The obstacle: it might be as simple as cultural differences. ”Consultants have always pushed a certain technique,” says Chris Butlin, specialist manufacturing advisor at MAS West Midlands. “We started to push quality circles in the 1970s, the Japanese started in the 1950s. Now they’re all but gone in UK companies, or not used in the same way, while in Japan they’re still operating everywhere and have a monthly magazine. The idea of starting a new way of working and continuing it is not part of British shopfloor culture.” Chris Butlin accepts that this is an oversimplification, and there are many UK companies where lean is embedded and the buy-in from staff is as good as it will be in some Japanese companies. But the default response from companies to “try lean out” as a short term exercise to improve productivity is arguably more common in the West than in the birthplace of TPS. Butlin trained at Kawasaki Heavy Industries in Japan in the 1980s. “I visited all their plants – shipbuilding, train building, aircraft, motorbikes, heavy engineering – and 35 years on from starting, it’s still embedded in the system. The entire culture of these companies is focused on continuous improvement. We [the UK] are often looking for a panacea. A consultant walks through the door and says ‘I’ve got this product called Lean manufacturing.’ The MD says ‘let’s try that’, without considering that they will be embarking on a long, difficult journey.”

Tools can be blunted Back to the simple stuff, basic housekeeping can make a big impact on minimising waste, and therefore cost. Sustaining even simple behaviours

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Leadership and lean

is harder than it might seem. “You can return six months later and it’s reverted to where it was before,” says Butlin. “Why isn’t someone policing this? To get true cultural change, you need to have someone putting their foot down, saying this is not an option. We’ve lost the discipline required to achieve and sustain this.” One school of thought holds that in order to convert to the meaning of lean you have to see it and feel it. “I took Triumph Motorcycles to Japan in 1992 when they were setting up their factory in Hinkley,” says MAS’s Chris Butlin. “I showed them around Kawasaki’s motorcycle factory for a week, and they were amazed and quickly become lean converts. When their plant was set up it was almost a mirror image of the Kawasaki plant. I can enthuse about this, but unless people go to where it happens and sees in the flesh, it is difficult to get the conversion.” So do you have to visit a Japanese-owned factory to embrace lean? No, as many UK companies will testify, although the experience of Triumph was no doubt illuminating. When lean tools are adopted they can sometimes mislead the well-meaning. Mike Anthony, senior lean coach at Cogent Orb Electrical Steels, says that following Total Productive Maintenance training, one team leader wanted to run a project on the mill. He thought it must need TPM because of a perceived bottleneck. “He wanted the whole area team involved in a series of weekly 8-hour workshops over two months,” says Anthony. In fact the mill was working fine, with some minor delays but there was no bottleneck in that part of the value stream.”The TPM programme was halted after a couple of workshops and the team were deployed to work on issues further upstream, which were causing irregular flow of material to the mill that was causing mill downtime – this was its biggest delay.”

Technical – Counter-intuitive Assuming companies apply and sustain the tools, the Part II of technical obstacles is the counterintuitive side, says Applied Angle’s Hallihan. Here, the obstacle is people’s innate reluctance to accept

that a method of manufacture they have been wedto for years can be improved quickly. “People often say lean is mostly common sense; what they mean is that the intuitive side of lean is the bigger element. The counter-intuitive is the dark side, with ideas like flow, levelling and heijunka,” says Hallihan. “When you ask a group of fitters why they make ten of those items on a bench and not one ten times, they say ‘because it’s quicker to do big batch’. No, it’s actually quicker to do one piece flow.” Learning that the method you have used to manufacture for 20 years is not as efficient as a new procedure can be very difficult, not least because of the power of subconscious conditioning. “Try telling a mother she has an ugly baby – good luck. You’re a director who’s worked at a company for many years; euphemistically it’s your baby. I’ve just insulted you. How do you feel? It’s the more common reason why lean is rejected.” How often is the new, introduced way of working rejected in the first instance? About 98% of times, Hallihan says (see box-out for an example of this conditioning).

Human obstacles are the highest On the human side, obstacles elevate to another level. Here board directors must address whether individuals that were the best candidates for the mass organisation are suitable for the new, lean-devoted organisation – more on this idea in the next article on lean obstacles. Another common, human factor in becoming lean is preconceptions of lean. “A key obstacle is where employees have been exposed to poor attempts of Lean implementation, which are often poorly understood, tool-based attempts,” says Constellation Park’s Lloyd. “This creates a negative view and resistance to Lean when a company attempts to launch a Lean Operational culture in the correct way by focusing on employee education, understanding and engagement.” Human side obstacles to sustaining lean will be discussed in the next article in this series.

The shock of the new: Subconscious conditioning People often reject what they can see with their own eyes, says Andie Hallihan of Applied Angle. “We put one piece flow in place in an automotive company. Lucy’s cell was reconfigured. Her production manager Pete is watching. Within half an hour she’s mastered one piece flow, and she needs no help at all. Pete is uncomfortable, so I ask

him how is Lucy doing with her numbers? Pete does the numbers on a piece of paper. The answer comes out at 130% utilisation. Pete fights to maintain 88% in his department, plus or minus a few per cent. Under the incumbent batch system, you’re doing well if you score in the early 90s (%). Lucy’s got 130% in half an hour of one piece flow. Pete’s reaction is interesting: he rips

up the paper and recalculates it. He gets the same score. In front of his eyes he has watched Lucy implement one piece flow in 30 minutes and he doesn’t like it. Pete has evaluated this himself and rejected it. He’s on the point of rejecting it again when I offer to get him a ream of paper. He swears at me. Pete has worked here for 20 years. Don’t underestimate the power of subconscious conditioning”.

Have your say at www.themanufacturer.com

Toughdecisions

KT pursues rational process for clarity in problem solving

Jane Gray talks to improvement and skills development specialists, Kepner-Tregoe, about the challenges of decision making and problem solving. How can companies gain confidence in these areas in the face of increasing organisational complexity?

Attend

any industry conference or trade event and the message from speakers and delegates alike is that the ways we compete and do business are changing. In conversation with TM, Pierfrancesco Manenti, leader for IDC Manufacturing Insights, likened the metamorphosis to a “reset” of the business world. Many of those becoming aware of these shifting sands point to the recession as the source of change but for Martin Wing, managing partner at Kepner-Tregoe (KT), the root cause is embedded in a far longer term trend which will not disappear with economic recovery: the rise of complexity and specialism. For many years large enterprises have explored the dynamics of complexity and what it means for business processes. A school of academic thought has sprung up around the area and business

leaders like Jeff McGowan, sourcing manager at Johnson and Johnson Lifescan, have dedicated themselves to understanding how complexity theory impacts on the operations, IT infrastructure and logistics of their organisations. For Wing however, the key to mastering complexity in business lies in developing effective decision makers and problem solvers; refining their capabilities with rationality and regularity and aligning their thinking across business functions and disciplines to bring improved organisational agility and responsiveness to unpredictability. Wing says: “There is a great need at the moment for some discipline, structure and stimulating thought around resolving business problems and making decisions because systems and organisations are more complicated than ever before and the business environment is less forgiving if mistakes are made. There are more specialists as organisations focus on their core activities and fewer generalists. “If you get involved in solving any kind of business problem today you have to deal with half a dozen or more functions, each with their own bias and view on the world. They are all acting with the best of intentions but if they do not think in the same way their activities will not be aligned and they will be continually at loggerheads.” Seeking ways of aligning thinking in organisations and understanding employee behaviour is what

Specialfeature Kepner-Tregoe

drives KT’s work with companies around the globe. The company’s heritage lies in behavioural research, underpinned by the work that founders Charles Kepner and Ben Tregoe took away from their time with the US military think tank Rand in the early 1950s. They were tasked with a six month project to understand why certain people, with exactly the same knowledge, information and training often made fundamentally different decisions about how to act on that information. Wing explains how an interest in advancing this research guides KT’s approach to helping businesses and individuals achieve their full potential and build independent competitive capability: “Two basic principles lie behind everything we do: Use rational process with a passion and transfer knowledge to clients. “Rational process is what we term our thinking methodologies and they are built on the findings of the behavioural research Kepner and Tregoe did back in the 50s. Through their observations they noted that research subjects who made good decisions that stood the test of time followed a demonstrable, repeatable, and structured thinking pattern all the time - so as they were going through making a choice you could recognise what that thought pattern actually was. Those who didn’t tend to make good decisions had a tendency to jump about in their thought patterns.” In addition KTs rational process methodologies are sensitive to Kepner and Tregoe’s differentiation between the mental activities involved in problem solving in comparison to those involved in decision making. Wing says: “Making a choice is fundamentally different in terms of your thought patterns compared to solving a problem. Making this distinction between a problem and a decision was revolutionary at the time” yet KT’s continuing educative work with companies around this topic shows that it is a distinction not yet fully recognised or understood by many. The success that KT has brought to a broad range of companies through teaching rational process is prolific. From manufacturing and marketing giant Sara Lee and global packaging leader Associated Packaging Technologies to more niche companies like baked goods manufacturer Interbake Foods there are many thriving enterprises willing to attribute a significant part of their success to the use of KT rational processes. Despite this accolade Wing acknowledges that KT often have difficulty selling their approach of “best practice thinking” to CEOs who are generally more inspired by talk of bottom line impact, financial ROI and other business tangibles. “Typically it is only once people have experienced what we mean by rational process and what the power of it can be that people actually buy into it.” Acknowledging the need to talk in the language of business in 2010 Wing qualifies how KT’s thought processes can lead to these material benefits “The methodology on its own is worthless. You’ve got

Martin Wing, managing partner, Europe, for Kepner-Tregoe Wing is an engineer by background with experience in the defence and information technology industries. Since his move into consultancy Wing has used his experience of complexity in these environments, as well as a growing knowledge base from his experiences with KT customers, to investigate ways of reducing complexity against a tide of expanding product lines so that companies can keep offering more to customers while remaining commercially viable. www.kepner-tregoe.com

to have information and experience in place but rational processes will channel that in the right way for the business.” For this reason KT works closely with clients to embed and integrate rational process into relevant continuous improvement and operational excellence frameworks. “Our processes and ways of thinking have stood the test of time and have helped companies over the last fifty years to get the best out of lean, six sigma, continuous improvement, TQM, TPM – all of the improvement philosophies that have been bandied around since the Second World War. At the heart of all of these are good problem solving and decision making and the prevention of future problems. “Allowing companies to continue getting the best out their improvement philosophies means spending fifty per cent of our time teaching the methodologies but also fifty per cent of our time is about ensuring that individuals can utilise those approaches to best effect in their relevant programmes. We aim to make companies independent of our expertise and very much take a ‘teach a man to fish’ approach to knowledge transfer” says Wing. In practice this manifests itself in three major implementation steps: process integration, performance system alignment and coaching on the job. In the next issue of TM Kepner-Tregoe’s client, FFEI Ltd, a leading UK supplier of high-tech imagery products and services, will walk readers through what their journey has involved and the potential it has unlocked in their people and processes.

Have your say at www.themanufacturer.com

Pension

apprehension

Smiths Medical Hangzhou China

Large firms’ pension funds were heavily depleted before the downturn reared its ugly head; recession has left them ravaged. In part 2 of a double-feature on company pension schemes, Mark Young explores what some companies are doing to plug the gaps.

Midway

through 2009, the collective pension deficit of FTSE100 companies was reported by Lane Clark and Peacock (LCP) to be at a record high, £96bn, in the specialist legal firm’s annual report. It says over the least year FTSE-100 companies have collectively paid an unprecedented £17.5bn into their pension pots in an attempt to plug the gap. Top tier industrials like BAE Systems, Rolls-Royce and Serco were among a group of eight FTSE-100s that paid more into their pension pots than they did to their shareholders. The efforts have worked: this year the deficit is just £51bn, comprising of £389bn of liabilities against £338bn of assets. However, LCP says the improvement is mostly because asset values have recovered from the almighty tumble they took at the back end of 2008. Similar improvements in the pensions picture do not appear to have occurred among a wider pool

of companies. Consultancy firm Aon Consulting estimates that at the end of June, the largest 200 defined benefit UK pension schemes had a combined deficit of £100bn, up from £88bn in May. And, as a large proportion of pension liabilities are made up of gilts – government issued bonds – the ‘age of austerity’ kick-started by the coalition Government’s public spending cuts could mean the deficit will widen, in the short term. Aon says that if the rate on gilts is down by 0.5% over the next year, the pension deficit of those 200 schemes will rise to £143bn. Marcus Hurd, head of corporate solutions at Aon Consulting, said: “A consequence of the tough financial measures introduced in the Emergency Budget is that deficits could increase in the shortterm. This will be a bitter pill to swallow for companies who are already piling in billions of pounds to plug these deficits.”

Finance and professional services

Tough economic measures should eventually lead gilts to rise though, boding well for pension schemes in the long term. “For those companies that can afford to take a long term view of pensions, the Emergency Budget is short term pain followed by long term reward,” says Hurd. “The short term pain, however, may be too much to bear for some companies in difficult times.”

How are firms tackling the issue? Since the 1960s, companies have been looking to replace defined benefit pension schemes – where the employee receives a defined return, like a final salary scheme – with defined contribution schemes, shifting the risk from the employer to employee. In addition, many companies have asked their employees to increase their contributions, pensionable salaries have been capped and in some cases schemes have ended altogether, usually for new employees but increasingly for existing scheme members too – what is called frozen accruals (see Don’t be shy in retiring, TM May 2010). Clearly these are not measures that will endear a company to what many describe as their most important asset – their employees. “It is unlikely that the benefits emerging from the defined contribution schemes that have been set up to replace defined benefit schemes in recent years will deliver adequate benefit,” says LCP partner Bob Scott. This will have severe repercussions for the economy and social mobility when large numbers of people reach retirement with low levels of pension income. Hence, some companies have tried to come up with innovative ways through which they can keep a defined benefit scheme yet plug the gap and mitigate their risks. In July, faced with an £862m pension deficit, alcoholic drinks giant Diageo, which makes Guinness, Smirnoff and Johnnie Walker brands among others, agreed a deal to place some of its scotch whisky under the ownership of its pensions trustee while the drink ages – and becomes more valuable. Under the 15-year agreement, the firm will place the whisky under the ownership of the Trust, buying it back when it reaches three years old and continually replacing what it takes. This model will generate £25m a year. An initial £197m has been put up by Diageo and the remainder will be covered by the sale of all of the stock that the Trust owns when the agreement expires. Sainsbury’s and Marks and Spencer have also used property, rather than stock, as pension collateral in this way. British engineering group Smiths recently announced 10-year funding plans for the two pension funds it operates. In the latest three-year valuations, one was found to be £545m in deficit and the other £110m. Within the last 18-months, the company has taken various measures to limit its post-retirement liabilities, including capping its healthcare cover.

Now the company is placing £25m into an escrow account which it will top-up with monthly instalments of £2m for nine years commencing in July 2011. The money will remain on Smith’s balance sheet and at every three-year review, the company will assess the deficit and decide whether it needs to transfer more money into the scheme. In 2020, any surplus will be paid back into the company accounts. “This provides a contingent funding commitment to SIPS (Smiths Industries Pension Scheme) without locking the investment into the Scheme should its funding position improve,” said a Smiths spokesperson.

A matter of life or death The biggest problem with pensions is that people are living longer. Therefore, their pensions must last longer and it costs the company or pensions trustee more money. LCP says FTSE-100 companies have added a further £9bn to their liabilities by redefining life expectancy. Defence company Babcock Marine has circumvented this problem by hedging the risk of its pension members living longer than planned for. In 2009, the company agreed a deal with a high street bank which will see the bank pay the pensions of employees who live longer than the scheme’s terms allowed for. If the member dies before he is expected to, the bank receives the balance that the employee was expected to receive. Telecoms corporation BT and technology firm Invensys are among companies that have promised to pay more money into their scheme if they perform well financially. For Invensys, this amounts to a contribution of 8% of any transactions over £1 million. “These are a few examples of interesting, innovative approaches which show how desperately keen some employers are to hang on to defined benefit schemes, despite all of the problems they present,” says David Yeandle, head of employment policy at EEF, the manufacturers’ organisation. “Companies are desperately scrabbling around for ways and means of mitigating their risk profile and trying to ensure they can maintain the financial viability of their scheme.” While Diageo’s asset collateral scheme would only be a practical solution for a very small number of companies, Yeandle says he is surprised that more firms have not followed Babcock Marine’s lead. “I thought that might set a model,” he says. “It seems to have a lot going for it as a longer term solution.” He concedes that this might prove difficult for firms outside the FTSE350. For this group, defined benefit schemes could very quickly become consigned to the history books. “Inexorably, in the immediate future we are going to find that defined benefit schemes will be pretty thin on the ground in our industry,” he says. The contention surrounding pensions is far from over, but there is bold evidence that companies are looking for innovative ways to plug their deficits while offering certain features of the coveted defined benefit schemes.

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Finance and professional services

Financenews... Spooner Industries secures export credit finance

Euro area recovery slows

Industrial oven manufacturer Spooner Industries has secured a €2 million trade facility from Lloyds Banking Group, partly underwritten by government’s Export Credits Guarantee Department (ECGD).

Manufacturing throughout the eurozone has continued its recovery this month but the rate of growth is currently at its lowest since the beginning of the year, according to the latest data from business analysts Markit.

The facility enables the company to fulfil a strategically important €5 million export order for the supply of drying equipment for the paper industry to the Philippines. The solution, designed to mitigate international trade risk, consists of a ‘partial rolling confirmation’ structure and provides cover on a shipmentby-shipment basis rather than on the entire order value. Spooner says the solution delivers significant cost reduction while retaining workable levels of export payment risk mitigation. One million Euros of the risk mitigation backing provided by Lloyds Banking Group was underwritten by the UK’s export credit agency. This risk-share arrangement was Lloyd’s first transaction under ECGD’s Letter of Credit Guarantee Scheme (LCGS), a government scheme to encourage and support UK exporters.

Markit’s Purchasing Manager’s Managers Index for euro area manufacturers fell to a level of 55.0 from 56.7 in July. Anything above 50 signals growth. The pace of new order growth was the weakest in 2010 so far. Factory gate inflation was at a five month low and purchases prices fell to levels last witnessed in January.

A whole lot of brass

Wheat shortage raises prices

Vulcan orders on the up

Brass intrusion SME McKechnie Brass has secured a £2.5 million invoice finance facility to support the company’s working capital position from Santander Corporate Banking

UK food retailers and manufacturers are set to bear the brunt of a rise in global wheat prices following poor yields in Russia and Pakistan.

Vulcan SFM, Sheffield Forgemasters’ offshore specialist, has recorded orders worth £12.5m in the 2009/2010 financial year.

Santander Corporate Banking has agreed to provide the lending facility and will also provide an invoice discount service, which will enable McKechnie Brass to receive prompt payments for their goods, improving their cashflow position. McKechnie Brass Ltd is the last brass extrusion manufacturing company in the UK, using scrap brass sourced in the UK. The company was recently bought by Nick Harrison and Peter Brown and the pair has promised to expand the business.

Following the worst Russian droughts for 50 years and the recent floods in Pakistan, the US government has slashed world wheat crop estimates. The US Agriculture Department (USDA) has reduced its forecast for the world wheat harvest by 2.3% to 645.73 million tonnes in its August report, below the 650.02 million tonnes traders expected. Russia, the world’s biggest wheat exporter, has imposed a grain export ban which came into force on August 15. Concerns about the harvest in Canada and Australia have also increased grain prices, with wheat hitting a two-year high in the first week of August having risen more than 40% in a month.

The demand for its products has reached unprecedented levels now that oil prices, decimated in the 2008/2009 global economic slump, have returned to more than $75 per barrel from a $40 per barrel low. This has encouraged oil companies to reinvest in production, with the company anticipating orders of £22m over the next 12 months.

US investment in UK wind American Superconductor has announced it has acquired a 25% stake in Isle of Wight-based wind turbine company, Blade Dynamics.

The UK designer and manufacturer of advanced wind turbine blades sold the stake for $8 million in cash plus one seat on the company’s board.

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Seller Finance: offering extended payment terms With liquidity constraints remaining a key issue, organisations that previously relied on overdraft and loan facilities to finance their international trading activities are discovering that seller finance can offer an attractive and alternative means of obtaining certainty of payment with minimal impact on cashflow. Rob Keller, Head of Business Development & Commercialisation for the UK & Ireland region for global trade at RBS explores the options.

Lack

of liquidity has been – and is likely to remain – one of the main defining consequences of the financial crisis which emerged in 2007. Although things are not as difficult as they were at the height of the crisis, companies were forced, back then, to seek alternative ways to boost liquidity and, in the process, alleviate some of the uncertainty with respect to shipping goods and not getting paid. An important part of agreeing any contract between buyer and or seller is to agree on the payment terms. Although both parties have a mutual interest in each transaction being successful, their respective interests in relation to the payment terms are very different. From the seller’s perspective, the aim is to ship the goods and ensure payment is received in return. Clearly, the best way to ensure payment is made, is only to ship the goods once payment has been received from the buyer. From the buyer’s perspective this represents a significant risk and cost to their business. The buyer, therefore, would be much more

comfortable with terms that only require payment to be made once the goods have been received and inspected. However, in this scenario it is the seller who would incur the burden of risk. This is where traditional trade finance techniques can help to provide both funding and mitigate risk in today’s more uncertain economic climate.

The options available One route to improve your competitiveness in the international marketplace without impacting liquidity is to offer seller financing as part of the sale. The goal is to offer extended payment terms, but get paid as soon as the shipment is made. The advantage under this option is that the seller can, for example, receive payment as soon as the goods are dispatched and for international transactions that may even happen before the goods have arrived at their destination. By offering seller financing, to your buyers, you are able to get an edge over your competitors which can put you in a stronger position when negotiating contracts.

However, to do this successfully, you are advised to check with your bank early in the sales process to assess the feasibility of obtaining seller financing, which would be based on the initial, sometimes hypothetical, information that is available as the contracts are being negotiated between you and your buyers. You would need to ensure that both your own cashflow and / or the operational risk of your business are not adversely affected. As the deal progresses, more precise pricing can be obtained from your bank once financing details are known and before the sales contract is signed. You may also be in a position to offer financing against a Letter of Credit with payment terms of 180 days or more. For capital goods, longer term financing can also be offered either against a Letter of Credit, a Promissory Note, or with Export Credit Agency financing. For example, the Export Credits Guarantee Department’s (ECGD) Supplier Credit Facility, can offer extended payment terms for up to seven years from installation and commissioning, depending on the amount of the contract and country of the buyer. However, to utilise the ECGD, the agency’s commitment needs to be received before the contract is actually signed. The main users of such facilities tend to be manufacturing and engineering companies.

Looking ahead Liquidity and credit management risk will, no doubt, remain on the agenda for most companies and their trading partners, particularly as the UK economy comes to terms with the austerity measures being put in place by the UK government. Consequently, there is likely to be an increasing use

RBS

of trade finance techniques as a means of keeping business flowing. This is particularly the case among SMEs and mid-corporate companies where liquidity and risk management concerns tend to be most acute.

Case Study Customer Name Industrial Penstocks Limited Business type Manufacturing Solution Pre-shipment Finance

Industrial

Penstocks Limited, a UK manufacturer of industrial valves for water and sewage treatment, secured a large export supply contract in the United Arab Emirates. The company, formed in 2004, has expanded into export markets following the completion of the Passport to Export scheme provided by UK Trade and Investment. This contract would have doubled the company’s annual turnover and additional working capital funding was needed to manufacture the valves. NatWest* responded with risk cover

on the letter of credit received and pre-shipment funding providing for direct payments to key suppliers with payment from the letter of credit proceeds. The pre-shipment financing, based largely on Industrial Penstocks’ performance track record, also released other working capital facilities so the company could complete the remainder of the project. “NatWest* have supported Industrial Penstocks Limited by providing funding and helping us manage payment risk for this significant export order via a structured trade finance solution. We are hopeful that after we complete this order that our business will continue to expand as we seek to win other large export contracts in the United Arab Emirates and other markets.” Andrew Williams, Chairman, Industrial Penstocks Limited

RBS credentials in Trade Finance The RBS Group is a top 5 trade finance provider globally (Source: Dealogic, 2009) We are present in 38 countries covering the major trading economies globally On the ground expertise in Asia, the Americas and Europe Proven capability to facilitate international trade through superior products, technology and execution: Our trade products are ranked 1st in the UK across all client segments (Source: Treasury Strategies, 2009) Our online trade tool TradeFlow™ delivers real time data and business insight We provide global operational scale and reach Our trade advisory approach means that we know our clients well, becoming a strategic partner for

* NatWest is part of the RBS Group

the long-term, and creating solutions that draw on our comprehensive product set: RBS has the largest team of Institute of Export CITA Qualified international trade advisors in the UK (Source: Institute of Export, 2009) We help our clients simplify global trade by streamlining transactions, strengthening trading relationships and releasing working capital We provide business-critical information, analysis and recommendations that enable clients to reduce trade costs and risks, gain control and visibility and boost profitability We continually invest in product and technological innovation to provide trade finance solutions and enablers such as our internet trade channels that support our clients’ business and are easy to use.

For further information please contact your RBS or NatWest Relationship Director or alternatively contact Dean Fiveash, Trade Finance Sales – Manufacturing & Industrials, RBS on: 020 7678 8053 or email: dean.fiveash@rbs.co.uk 51

Diageo case study: Asset care makes strong case for internal ownership

As one of the biggest names in the drinks sector, Diageo’s manufacturing network reaches across the globe. Four years ago, the company’s packing plant in Runcorn, Cheshire undertook an asset management audit with mixed results. Tim Brown discovers that the journey to world class manufacturing status was more closely linked to the management of systems and human assets than machines.

Diageo’s

Runcorn site comprises two divisions, a traditional smallpack (bottling & canning) and a keg plant. The primary product catered for at the site is the world famous Guinness stout, but the plant is also responsible for producing several lager brands. In 2006, the Runcorn plant enlisted the assistance of lean and training experts MCP Consulting and Training and deployed their Asset Management Improvement System (AMIS). The application of AMIS, according to MCP managing director Richard Jones, aimed to systematically change the culture and engagement of those involved in the operation and maintenance of the plant’s packaging equipment. “Before the introduction of this strategy, the plant was highly reactive and the plant maintenance was operated primarily on a fixed time system,” says Jones. “When [maintenance] issues occurred, they paid for expensive overhauls of the equipment by the supplier and the production team didn’t own any of the asset care. This was also true of the shift engineers who were there to be reactive. At the time, downtime was high and their overall equipment effectives was variable.” The AMIS system is effectively an auditing system, says Diageo keg plant engineer Ralph Hearn. “The use of AMIS allowed us to gain an understanding of where our asset management ranked compared to other world class manufacturers in the brewing and drinks sector. The feedback: we were not as far

advanced as we thought, but it was a quick learning curve and improvement strategy to get to the status of world class.”

Making improvements Proper asset care must involve the correct integration of maintenance and operation, says MCP’s Jones. He says rather than operating in a reactive environment and fire fighting, incorporating predictive and preventative maintenance schedules is essential. Such a schedule should be developed in partnership with the OEM and must incorporate operator checks and maintenance routines to achieve the right reliability and performance targets. The delegation of more specific maintenance responsibilities to both operators and engineers is designed to encourage greater engagement of staff with their tasks which improves morale, communication and uninterrupted operation. Ensuring that planned predictive maintenance aligns with other jobs such as operator checks, hygiene checks and overall production is vital. To improve the asset care management at any plant, Jones says the first step is to propose a maintenance plan. Once the feasibility of the plan has been assessed to ensure adequate resources are available, the different teams can get together with the production manager to develop a schedule. The production manager must take responsibility for the maintenance schedule to ensure there are no conflicts.

Operations maintenance and repair

Efficiency in fours At the Runcorn plant, a key part of the maintenance plan was to divide the plant in to quadrants. “Instead of the old approach where all the engineers in the workshop go out wherever there is a problem,” says Jones, “by allocating certain areas of responsibility, the engineers were able to start to focus on zone ownership. At the Diageo plant, the operators tended to be in quadrants already but the engineers were roaming.” Diageo’s Hearn says in the smallpack division where the quadrants were applied, downtime is now a lot lower and changeovers are much quicker. “They have changed the areas of responsibility,” he explains. “This allocation has made response times much quicker and the technicians are now driving their own improvements because they have better ownership of the area.” A total of six engineers are used for each shift in the smallpack operation. With only four quadrants, the two remaining engineers are now utilised to work on continuous improvement projects. “One of the big improvements which has come in to play is a waste reduction programme which has reduced waste from around 1.5% to 0.9% and we are looking at reducing that again,” Hearn says. “We have a target to aim for, and we have set up, a waste CI group. Because they know the lines, they know where the areas of waste are occurring. Those are the sorts of initiatives that AMIS drives.” Before the AMIS programme, Diageo used to engage in a fairly high number of contracts each year with the equipment suppliers who would come in and complete overhauls on the machine. “Before AMIS, the OEM would come in with three or four people – now only one guy comes in for the big overhauls and the work is all done internally with the OEM representative there to coordinate,” says Jones. “With improved ownership of the maintenance they have been able to take over the bulk of the specialist work from the supplier. Runcorn is now considered a reference site by the OEM for the design and implementation of new plants. The OEM has lost some work in terms of contract overhauls but it still considers Runcorn as its reference site because it is performing better than others.” A computer has now been installed in each of the four quadrants, making access to the companies’ SAP system far easier. Changes to the IT system have also made it much simpler for operators to raise jobs and close them. Similarly, booking a spare part is much easier. The AMIS system links the job, the request and the planned work with a spare and the closing of the job. This makes it easier for the workers to complete maintenance work. Hearn says this has simplified the entry of necessary information into the system. “Previously each individual person was required to log in to book their individual parts out. There is now a generic log-in for the stores for anyone in the engineering team so it is quicker and easier to enter

the data. We have also developed a new SAP frontend, a development that is ongoing which ensures we fill in the correct fields, and has eliminated the superfluous fields. The front-end now only displays the necessary fields.”

A successful result The benefits that have been delivered include: improved plant performance, higher and more stable OEE, reduced cost, improved quality and reduced waste. Local teams are regularly involved with problem solving using various continuous improvement techniques such as root cause analysis. The Runcorn site recently won three Diageo global awards: the Maximising Diageo, Value World Class Asset Care and Overall Perfect Plant of the Year. The AMIS programme has delivered very big operations and maintenance improvements at Diageo Runcorn, and both visitors and suppliers alike have been extremely impressed and can see what World Class performance is about. “Too often we think of ‘technical techniques’ in terms of the reliability of the system,” says MCP’s Jones. “The overriding message for me is that improvements come from an engagement process of people and a culture change.”

Graphs show the AMIS Journey to World Class at both Smallpack and Keg plants. This represents a substantial achievement, as less than 5% of the 4,000+ AMIS participating sites globally have achieved such performance.

People and skills

Academies

advance Hundreds of British schools are set to opt out of local authority control and seek academy status reports Jane Gray.

July this year the flagship academies bill made it possible for British schools to alter their status and look for sponsorship from local industry (and other institutions) in order to qualify for central government funding. As children prepare for the start of the new academic year, it has become clear that this prospect is overwhelmingly attractive to many. While 32 schools are expected to re-open this month as new academies over 2000 have expressed an interest in converting and 140 are expected to make the transition in the coming school year. The first wave of new academies (which will be similar in style to the already successful JCB Academy in Staffordshire) are largely Ofsted rated “outstanding” schools or federated to such institutions. Education Minister Michael Gove said in May that he envisioned academy schools would become “the norm” in British education and today a spokesperson for Mr Gove said: “This is part of Mr Gove’s overall vision – that teachers and heads should control schools, not politicians and bureaucrats.” Becoming an academy would allow UK schools to diverge from the national curriculum and tailor the way they teach to suit their student intake and the needs of the local community. It is hoped that the new style of education will allow closer collaboration with local industry and make teaching better linked to the real skills needs of employers and the national economy. Such freedoms are anticipated to make a

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particular impact on the delivery of 14-19 education which has been repeatedly identified as a key time for young people in making career choices and a critical stage at which industry should connect with them to highlight opportunities for the application of their skills. The number of schools converting to academy status for the start of the academic year 201011 are significantly lower than some government officials had predicated and opposition representatives have said that the figure represent a embarrassing climb-down. However many schools are still in the process of negotiating appropriate local partnerships and consulting with staff and parents as to whether academy status represents the right choice for their community. This Friday TM will be visiting The JCB Academy for the start of its new term to hear how their plans for the better delivery applied STEM skills are progressing through engagement with students, staff and industrial partners. This year Jim Wade, principle of The JCB Academy will be speaking at TMs flagship conference (The Manufacturer Directors Conference 2010, November 18, Chesford Grange, Warwickshire) to share his experiences on how to establish strong links between education and real economic needs for the benefit of young people and UK competitive strength alike.

Nottingham Cambridgeshire

Bothe Hall Duxford War Museum

6th October 2010 20th October 2010

Leeds Reading

Harewood House Oracle Offices

4th November 2010 24th November 2010

Manchester Birmingham

Chill Factor Snow Centre Oracle Offices

www.exel.co.uk

8th September 2010 15th September 2010

Rachel Doyle Manufacturing Advisory Service (MAS) South East Having spent a decade working for manufacturing and engineering companies in a variety of different roles, Rachel Doyle now works for MAS, helping other firms in the South East to thrive.

Rachel

Doyle has recently been promoted to Manufacturing Specialist after a year working for MAS South East as Manufacturing Adviser. Whereas previously her job was to follow up enquiries from companies on topics like legislation or supplier sourcing, she now has a much more hands on role, visiting sites to CV in brief – Rachel Doyle proactively find solutions for Age: 31 firms to ensure everything is Education and qualifications: running as BSc (Hons) in Chemical Engineering with 2:1 efficiently as – University of Bath possible. Lean six sigma green belt Much of Lean manufacture and value stream Rachel’s mapping work is based Demand Driven Supply and Advanced around holding Demand Driven Supply workshops to IOSH Safety, health and environment for help companies managers with lean IEMA Associate Certificate in Environmental strategies; she Management is currently NLP Business Practitioner in the midst Work history: of organising Manufacturing Advisory Service (MAS) a 5S training 2010 – Pres Manufacturing Specialist programme for 2009 – 2010 Manufacturing Advisor an advanced AstraZeneca technology 2006 – 2009 First Line Manager manufacturer 2005 – 2006 Project Rep / Lean Facilitator and she will 2003 – 2005 Demand Driven Supply Project conduct the Manager sessions herself. Plankstadt She certainly 2002 – 2003 Validation Officer 2000 – 2002 Technologist knows a good factory when AP Chemicals 1998 – 1999 Student Chemical Engineer she sees one – at the Interests: beginning of Music – playing the trumpet in a local band, this year Rachel learning languages and travelling to new and was placed different places. in charge of

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auditing companies across the region to identify finalists for the MAS South East Best Practice Award ceremony, making recommendations to judges about which manufacturers were worthy of the prize. Rachel says the most rewarding part of her job is seeing a company grow as a result of the advice she has given them. “It’s very satisfying when somebody has an idea and you help to make it a reality,” she says. “When you see all of the pieces fall into place because of support that they might not be able to get from elsewhere, it’s a great feeling.” Rachel names the key skills in her job as listening, building a relationship with the company and problem solving. She has to translate what people say and what she sees into what the business needs. Also, she says her history of working in the industry – including various roles at FTSE 100 pharmaceutical company AstraZeneca – serves her immeasurably in the job. “It’s partly the technical knowledge I’ve learned over the years but more so it’s just having had the experience of what’s going on – having been there and worked through similar situations before. You can have a better idea the position a business is in, what pitfalls it needs to avoid and what it needs to improve. It also makes you more credible and helps build trust with the client.” In reality, what serves Rachel best of all though is her passion for manufacturing. She always wanted to be an engineer, and cares about the industry and its future. For that reason she loves the fact that her job encourages all manufacturers to adopt best practice procedures in every part of their business. “We need to get a few more women involved though!” she says. David Caddle, Programme Manager, MAS South East, says: “Rachel is truly a fantastic example of a young, enthusiastic, dedicated and passionate professional working to try and make a difference within the manufacturing community. Rachel’s recent auditing efforts in the lead up to our Best Practice Awards Ceremony clearly demonstrated her hard work ethic and commitment to the industry.”

Supplychain and logistics

Taking It may be the best £100 that Nicholl Food Packaging has ever spent. Or will ever spend, for that matter. At a stroke, the Cannock-based aluminium foil food container manufacturer—a supplier to companies such as Heinz, Danone, Unilever and Manor Bakeries—was able to eliminate huge swathes of expensive inventory. Malcolm Wheatley reports.

Fairly

typically, Nicholl had long relied on high levels of ‘just in case’ stocks of both finished goods and raw materials — the only practical solution, it thought, to an unholy trinity of unpredictable demand, periodic capacity constraints and seasonal ‘spikes’. For with production planning and supply chain optimisation constrained by a reliance on an elderly

Movex ERP system and a variety of Lotus 123 spreadsheets, neither the forecasting or optimisation capability required in order to match inventories more precisely to demand was present. The solution? Preactor Lite, an entry-level planning and scheduling solution from Preactor International. “We paid less than £100 to download the software, and within a matter of days Preactor was providing levels of planning and scheduling visibility and control previously unknown for us,” says Chris Scattergood, operations analyst at Nicholl. A subsequent upgrade to Preactor’s P400 ‘full service’ system delivered still further improvements, reducing stock levels even more. “Prior to the upgrade we would keep between three to four weeks’ usage of raw foil stock on site at any one time, with this rising to around six weeks in our busy Christmas periods,” says Scattergood. No longer, it turns out. For while there have been other inventoryeliminating initiatives within the company, the new system has undoubtedly played a large part in enabling Nicholl to reduce stocks to approximately

Her name is Celia, but if you shout Brammer, she’ll be one step ahead of you.

Brammer people always take the lead. Because successful partnerships demand far more from an MRO distributor than prompt and competitive product supply.

That’s why Celia and her Brammer colleagues clear the floor when it comes to reducing total acquisition costs – not just for basic products but whole processes. To understand exactly how Brammer can add value to your business at every turn, call 0870 240 2100 now or visit www.brammer.co.uk

Celia Dillon Customer Service Support Manager

It’s the people that make Brammer work for you

Supply chain and logistics

one to two weeks’ usage, he explains. Finished goods inventory levels have seen an even steeper reduction, with stocks of some items dropping from over three months’ worth to less than three weeks’ worth.

Demand shock For many manufacturers, the recession has placed the issue of supply chain optimisation centre-stage. As demand collapsed, inventories quickly ballooned, often prompting frantic de-stocking measures, as banks refused to lend more to finance the growing mountains of unsold goods and materials. Yet, as is often the case, taking an axe to inventory levels delivered only partial relief. For the inventory that actually reduces tends to be of the products that are selling, leaving manufacturers with obstinately high levels of stocks of slow-moving or non-selling lines. Come an economic recovery — as now — pressures then mount for higher inventory levels to support rising sales. The problem? Unhappy banks, again, who see cash levels plummet and working capital again start to increase. “Re-stocking is never as simple as businesses believe,” says Cathy Humphreys, UK country manager for German supply chain optimisation specialist INFORM. “Having de-stocked arbitrarily, they have the wrong stock profile — but re-stocking to meet the demand that is actually being met can consume far more cash than is readily appreciated.” The result? “Companies have been backed into a corner,” she says. “They’re living with dangerously low inventory levels, but are still dealing with the legacy of over-ordering in the past.” Yet what might appear to be the obvious solution remains tantalisingly out of reach. Because for many companies, it’s simply not possible to just eliminate stocks of slow-moving or obsolete items in order to create headroom for stocks of saleable items. “Companies are hesitant to write them off as this will ring alarm bells for investors,” says Andrea Harris, a senior consultant at Northampton-based supply chain consultants Davies & Robson. “In a number of instances companies are re working slow-moving or obsolete stocks into saleable items, but are finding that the value they’re adding to the product is not repaid by the eventual selling price.”

Culture clash In which case, of course, rather than buying in stocks in order to meet poorly-forecasted demand, why not move to pull-based ordering to meet real demand? Views on this, though, are mixed. Davies & Robson’s Harris, for instance, is openly sceptical. Many manufacturers, she charges, “Simply don’t have the skills to set up robust pull systems — or, quite simply, they would have done so prior to the recession.” In the long run, she reckons, “Companies that are not orientated towards lean manufacturing thinking will return to their safety stocks the minute

the market is strong enough for them to do so — if they survive.” Others are less convinced by this argument. Dr Christos Tsinopoulos, a lecturer in operations and project management at Durham Business School, for instance, sees the severity of the recent recession as creating a significant shock to both supply chains and management thinking. “It’s a shock that should create an impetus — and a reason — for manufacturers to switch from a push system to a pull system,” he asserts. “It helps the internal persuasion process, and creates a consensus that something needs to be done.”

Companies have been backed into a corner. They’re living with dangerously low inventory levels, but are still dealing with the legacy of over-ordering in the past Cathy Humphreys, UK country manager, INFORM And so, for many manufacturers, a more practical solution to the post-recession supply chain optimisation question may be — as at Nicholl Food Packaging — to firmly harness that changed culture to systems designed to rigorously enforce inventory management objectives through better forecasting, planning and control. At Grantham-based 200-employee sofa manufacturer Quality Furniture Company a journey towards Oliver Wight-accredited Class ‘A’ business excellence has seen earlier outsourcing-led supply chain initiatives supplemented with a rigorous focus on master production scheduling and improved demand planning. Stock levels are down, freeing-up £400,000 of cash, with both sales-per-employee and profit-peremployee measures showing increases. And master production scheduling is greatly improving supply chain visibility for both Quality Furniture as well as its customers and suppliers, says operations director David Bramwell. “We recognise that reducing lead times is very important, because it will enable us to hold less stock and be more responsive to upswings in demand,” he notes. “While we are located at the same premises and employ many of the same people, the way we work is totally unrecognisable from a few years ago.” While overall raw material lead times are still long, the company has now synchronised the supply chain through the entire build schedule, virtually eliminating fire-fighting. “We can look ahead with confidence, as we are much more proactive about planning our own capacity,” concludes Bramwell.

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The role of supply chain in effective maintenance and asset management Brynn Woods, Purchasing & Distribution Director, Brammer UK Today’s economic climate presents a unique and unprecedented set of challenges to UK manufacturers. With the worst of the recession arguably behind us manufacturing output is increasing, but in tandem with rising raw material and input costs and increasing supplier lead times. And, for many manufacturers, investment, operating budgets and employment levels all remain relatively depressed. Irrespective of the overall economic situation, all manufacturers face constant pressure to reduce costs and optimise productivity in order to maximise their profitability. Manufacturing efficiency is integral to overall competitiveness – and a company’s maintenance and asset management strategy is key. Central to a successful maintenance and asset management strategy is the effective sourcing and management of maintenance, repair and overhaul (MRO) spares. These can range from bearings and power transmission components through to motors, gearboxes, pneumatics and hydraulics, chemicals, tools and health and safety products. The supply chain for these engineering spares – and how it is managed - has a direct relationship with a company’s ability to optimise its manufacturing operation. Having access to the right spares, when and where they are needed, is critical to maintaining continuity of production and avoiding costly downtime. A successful MRO management strategy, therefore, will place the availability of production critical spares as a key performance measure. It would, however, be very wrong to think that that is where

the strategy should begin and end. The availability of spares needs to be balanced against other commercial considerations such as the need to minimise inventory and therefore reduce working capital. Spares stock purchased ‘just in case’ often becomes non-moving stock, tying up cash at the time of purchase and then often ultimately becoming obsolete and requiring a balance sheet write-off. The right mantra for successful MRO spares management should be ‘low inventory – high availability’. But how can this be achieved, especially in larger manufacturing operations where the list of stockkeeping units (SKUs) required to support plant maintenance operations can run into thousands?

Overcoming the complexities The complexity of the MRO stockholding required is often cited as a problem in optimising this function in manufacturing companies. Not only are the required spares often of low value and required infrequently, but the sheer range of components the engineering team need to have access to can be daunting, meaning dealing with multiple suppliers and a consequent lack of purchasing

leverage. Meanwhile the technical complexity of the spares and erratic demand patterns – only around a third of spares consumption repeats in consecutive years can also be problematic. Once again, simplification can deliver tangible commercial benefits. Standardisation – identifying which machines require the same spares (even across different sites) and then sourcing these from a single supplier – can radically reduce stockholding and working capital. This is especially the case where spares are being sourced from an OEM which is itself then sourcing them from the manufacturer. Frequently there is no need to buy the spare in question from the OEM as it can be readily obtained – often far more cheaply as no OEM markup is involved – via a specialist distributor. This strategy also reduces lead times as the distributor will hold many common items in stock, while the OEM may be overseas and may itself be importing the spares in question. Meanwhile, a detailed review of what components are being sourced and from where, will highlight areas of duplication and allow the supplier list to be radically trimmed. Focusing on reducing the overall number of vendors used will also negate practices such as ‘shopping around for the best deal on the day’ – which builds in additional transactional costs and overhead in-efficiencies – and the acquisition of greater quantities of an item than are actually needed to obtain a volume discount, which ties up cash in non-moving stock which may become obsolete and end up being written off. Best practice in this area is geared around both optimising inventory held at site, which should be routinely profiled to ensure accuracy

impacting on profitability across all industry sectors. Companies who want to free up their in-house procurement and engineering teams to focus on other value-adding areas are more and more frequently outsourcing the MRO spares inventory management function to a third party. This effectively means they are dealing with a single supplier for all MRO requirements, with that supplier able to identify which spares are needed and how frequently, and ensure availability at site for plant critical items and the depth of supply chain availability for next day delivery requirements to support the ongoing maintenance schedule. The approach also enables the provision of value-added services such as component kitting and review of scenarios where a particular component may be failing more

frequently than should be the norm – with testing and analysis able to identify any technical issues and suggest alternative ways forward. It even allows data on stockholding and usage to be managed across multiple sites to ensure, for example, that numbers of a particular spare are not accumulating in one location while the same product is being purchased at another to meet demand there - further reducing working capital. For many companies, the most effective means of enjoying the benefits of outsourced MRO spares management is to allow the MRO supplier to provide an Insite, effectively a branch, on the customer’s site, geared solely to meeting that company’s needs in terms of available products, opening times and technical support. Products can even be delivered to lineside if required. This system allows the MRO supplier to function as a seamless part of the company’s operations, but with the availability of independent expertise and the flexibility to cope with peaks of demand. Meanwhile, through outsourcing the MRO requirements, the administration is reduced as only one invoice is received each month for all MRO requirements, whilst achieving significant cost reduction and operational benefits from removing duplicated sources of supply and their associated complexities. Through outsourcing the MRO spares management function, directors, maintenance and procurement staff at the manufacturing company can rest safe in the knowledge that production will not be interrupted because of the unavailability of a crucial spare part and that capital is not being unnecessarily tied up in spares which may never be used. With uptime and cashflow optimised in this way, they can focus on other opportunities to improve their manufacturing operations and company profitability.

Brammer

and alignment with consumption of key components, and a focus on standardisation of key products and technologies throughout the plant. Leading edge manufacturing companies harness the independent advice available from professional MRO distributors in both of these areas. Whether it is identifying the best product for a particular application that can deliver efficiency benefits - such as extended life, faster changeover, reduced maintenance intervals or reduced energy consumption; or providing real time analysis of spares demand patterns to enable stockholding to be optimised and ‘bad actors’ to be identified on the shop floor, the role of the professional MRO distributor can add serious value in this key operational area. This approach, focused on the total cost of ownership, is proven in positively

For more information please contact www.brammer.co.uk

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Synchronised

S&OP gets in sync with real business needs

Simon Holloway defines modern Sales and Operational Planning, explains where it fits within an ERP system and discovers that it’s all about clever software being beautifully aligned with a company’s business goals.

What is S&OP?

ERP is all about managing and controlling resources, sales and operations planning (S&OP) is the brains behind the process and understanding how to leverage it can mean the difference between profit and loss. Andrew Kinder, solutions director at Infor, says: “As Europe moves out of recession, many business leaders are reflecting on the lessons learnt. Thankfully the conjecture: ‘had we only known how the credit crunch was going to hit us’ has been joined by ‘what can we do to make sure this never happens again?’. Businesses are now examining the systems and processes that offer not just growth but protection and resilience.” At the top of this list of systems is S&OP. In a recent AMR Research supply chain management survey for Infor, 88% of respondents said they are already using or planning to deploy an S&OP solution in the next 12 months. The survey found that the area of S&OP that companies want the most support with is S&OP’s ability to provide “what-if” simulation capability. This simulation is a critical tool for dealing with the volatile demand many businesses experience today. But has S&OP modernised and adapted to today’s global and agile markets? Does it apply to both big and small organisations?

S&OP is a business planning process that aligns the traditional demand-supply view of the market with the financial and business goals of the organisation. S&OP is a response to the accusation that the operational plan and business plan are often seriously misaligned. Supporting this cross-functional business process is information. This means integrating several different pieces of planning data around sales, production, inventory, finance and HR to provide the executive with focus, alignment and synchronisation about the company’s different operations. Plan frequency and planning horizon depend on the industry specifics. A properly implemented S&OP process routinely reviews customer demand and supply resources and “replans” quantitatively across an agreed rolling horizon. The re-planning process focuses on changes from the previously agreed sales and operations plan. As John Dougherty said, S&OP’s “ultimate goal is to always keep the detailed sales, manufacturing, purchasing and capacity planning systems in sync with the latest high level plans of management (the business plan).” Andrew Kinder says that there are many different definitions that have evolved over time. Infor defined S&OP for the purposes of

Figure 1: Putting S&OP into context (Source: Hitachi Consulting) Strategic and Business Planning Years

Budget/Financial Planning

Months

Weeks

Days

Sales and Operations Planning

Demand Planning

Customer Demand Management

Replenishment Planning and Execution

Product Design and Development

Master Planning

Customer Demand Management

Replenishment Planning and Execution

Customer Demand Management

Figure 2: The sales and operational planning process (Source: Chuck Poirier, CSC)

Gather projected demand information and compile

Establish a “Consensus Demand” forecast (demand plan)

Evaluate against manufacturing and logistics constraints

Conflicts

Establish a “Consensus Execution” forecast (supply plan)

Monitor progress vs demand and supply plans

Evaluate alternatives, apply decision criteria, resolve conflicts

Optimal utilisation of corportate resources

driving its new product design as: “enabling decision makers to achieve consensus on a single operating plan that profitably matches supply and demand.”

The S&OP process The S&OP processes is characterised by: A top-down and bottom-up approach, linking the company’s business plan with the current demand and supply plans. A cross-functional, collaborative process that focuses on improving business performance. A structured, formal set of consensus business processes based on a set time period, usually a month. The process starts with gathering projected demand information and compiling it in a common format. From this information, a demand forecast is generated, typically beginning with the sales forecast originally used for planning purposes, but augmented with inputs from key customers and amended by knowledge of operating and market conditions. The next step is to match demand forecast against any known or anticipated manufacturing and logistics constraints. Any issues identified are then resolved; this often includes looking at alternative strategies. The final step is to monitor progress against the altered demand and supply plans. This provides us with different business processes operating with different buckets of information granularity. Information flows both bottom-up (sales, customer, VMI and co-managed programmes, POS data, supply chain capacities) and top-down (budget, business plan, category or customer plans, market share objectives, NPI plans). Successful S&OP is the reconciliation of these information flows to provide actionable planning. The planning component and iterative feedback loops require common business language.

Evolution and latest developments Early iterations of S&OP systems simply matched demand and supply, balancing supply with the best

expectation of demand. This is the coordination of an inventory, production and procurement plan to meet demand, balancing supply with demand at the stock keeping unit level. This remains an essential component of any planning process, but lacks a financial view of the plan. Does the plan meet with the financial goals of the business, matching forecast to sales revenue expectations? Is the supply plan affordable in a way that delivers the expected margins of the business? The next evolution - sometimes called scenario management – was to allow the user to manipulate both demand and supply. It also included the ability to incorporate events such as new product introduction and product changes. Infor’s Kinder says that this is where most organisations strive to be on their S&OP maturity curve. Planning is more strategic – from 12 to 24 months out – and operational plans are expressed in financial terms: revenue, costs and margins. The latest evolution is to make the planning process even more agile and flexible as well as robust. Kinder says that practitioners at this level sometimes use the term “integrated business planning”, elevating the process to a higher level than sales and operations. The goal is an executive planning process that seeks to define the total strategic plan for the business and completely align strategy with execution. “A business may incorporate product portfolio planning into their S&OP processes, scrutinising when products are retired and when new ones are brought on-stream,” says Kinder. “Other considerations will include pricing options, channels to market, expansion and consolidation plans, mergers and acquisitions, and network design changes.”

Who’s in the market? As S&OP is an important part of a manufacturing planning process, all the big ERP packages provide modules that support S&OP. Yet this is not the case for every ERP and a survey Aberdeen Group revealed that 85% of organisations resort to spreadsheets to support their S&OP processes. However SAP, Oracle, Sage,

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Infor, Microsoft Dynamics, Epicor and IFS all claim to provide S&OP solutions. The specialist supply chain management solutions such as I2 Technologies, ICON-SCM, Kinaxis, Logility and TXT e-solutions similarly provide S&OP support but these solutions are very supply chainfocused and don’t support the complete range of S&OP applications. IBM positions Cognos as one solution for S&OP. Cognos is a well-known and well-used business intelligence product – therefore to use for S&OP one needs to configure the product. For this, IBM provides its customers with a free set of frameworks called the IBM Cognos Performance Blueprints that provide a set of preconfigured settings. However the BI product family does not provide detailed demand planning or constrained supply planning which are important aspects of simulation within the S&OP process.

There are also several specialist niche providers such as: Demand Solutions S&OP is fully integrated with Demand Solutions Forecast Management and Demand Solutions Requirements Planning, and it imports data through the Forecast Management database. The user-defined Import/ Export utility within Demand Solutions products makes it easy to interface with other business systems. JDA’s Executive S&OP Workbench was developed to take account of the Integrated Business Planning concepts described earlier. It utilises key-metric graphs and charts to visually present the aggregated state of your business. Steelwedge’s Sales Planning & Performance Management suite leverages four modules (executive, sales, operations and collaborative) and an S&OP platform that incorporates best practice S&OP collaborative technologies with business workflows and performance management capabilities. Together these help companies take enterprise-wide top-down, bottom-up and middle-out control over the revenue planning process.

Conclusion What does successful implementation of S&OP deliver to the business? According to research from Aberdeen Group, S&OP leaders report healthier financial results in terms of customer service levels, forecasting accuracy, profitability and cash-to-cash cycle times – key measures for any business. Simon Pollard, VP manufacturing operations and execution for SAP EMEA, provides this scenario: “Most companies do S&OP on a weekly or monthly basis. Once the plan is done the real world takes over, destabilising the plan. If you join plant floors to ERP you can monitor those operations up from the shop floor to business goals. But the problem now is that information at the lower levels can only be picked up quarterly and only key stakeholders are involved.” A recently published IDC report says that “inaccurate forecasts can make planning and allocation of resources and servicing new projects very challenging – it can make adequately servicing customers difficult if orders come in all at once.

With strained economic conditions in 2009 and 2010 planning was harder as previous year’s revenues provide little indication of future sales.” IDC recommends that discrete manufacturers adopt S&OP to synchronize the demand forecasting process with production and customer fulfilment planning. Infor’s Kinder says, “S&OP has become an essential business process in de-risking the supply chain. The reality is that in any operational planning process there are multiple ways to meet customer demand. But which is the best plan, and is that best for customers or best for the business? S&OP, and the modern technologies that support it, delivers confidence that a business has explored the alternatives and hit upon that elusive best plan.” Although S&OP is a key element in manufacturing IT today, it has different meanings to different companies depending on what stage they are in their enterprise planning journey. If you want to move to the nirvana of Integrated Business Planning, then you are looking to join shop floor data from Manufacturing Execution Systems (MES) with data from your supply chain partners (certainly for your tier one suppliers) with you HR data, capacity data and sales data to produce a plan which may now need to be refined more than monthly. Effective S&OP is about integration and collaboration not only at a technical level but also at a business process level.

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

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World of Knowledge for Manufacturers and Distributers “The level of work that we do now is in the order of three times more product going through the factory, which has been absorbed by a similar number of people.” Balfour Beatty Railtrack Systems Ltd.

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ITnews.. PLM

Aras open source accelerates Aras, provider of open source PLM software, has announced a 226% increase in sales in the first half of 2010. Driven by growth in worldwide adoption of its Innovator suite, Aras says its performance signals widescale acceptance of the Aras enterprise open source model by America’s largest companies. “Our growth represents a fundamental shift in the way global companies are approaching their enterprise PLM strategy,” said Peter Schroer, President of Aras. “Gartner is seeing increased interest and adoption from manufacturers and PLM service providers,” said Marc Halpern, Research VP for PLM at Gartner in the recent Cool Vendors in Product Design and Life Cycle Management 2010 report. “The annual subscription fees for support and upgrades are approximately 40 per cent of what they would pay the major PLM vendors for annual maintenance, and they had no expense for PLM licenses.”

Simulation

Security

Liverpool John Lennon Airport invests in simulation tools

3i Infotech implements Security Information Manager for Oman Air

Lanner Group, the business process improvement company, has announced that Liverpool John Lennon Airport has invested in MFlow Forecast to help with its redevelopment programme.

Oman Air, the national carrier of the Sultanate of Oman, has announced the implementation of Symantec’s Security Information Manager (SSIM) by the global technology solutions and services provider, 3i Infotech.

Based on Lanner’s simulation tool WITNESS, the system was developed in partnership with Human Recognition Systems (HRS), the biometrics and behaviour analytics specialist to deal with the particular requirements of the airport’s new £12.4 million redevelopment programme. Jim Slevin, transport business unit manager at HRS, said: “As well as being complex and expensive, security technology – and the regulatory requirements for it – is changing all the time. Investment decisions are a critical element of developing a business case, and simulation can play a vital part. We chose WITNESS because it was already being used successfully in the air transport sector. But we were also highly impressed by the confidence and experience shown by the Lanner team – they were very supportive and easy to work with.” Jim Slevin, transport business unit manager at Human Recognition Systems

The implementation by 3i Infotech of SSIM in the Sultanate of Oman has allowed Oman Air to enhance the security of its IT systems. Founded in 1993, Oman Air has played a major role in making Muscat an important traffic hub in the Middle East, supporting the commercial, industrial and tourism sectors. In March 2010 Oman Air became the first airline in the world to offer both mobile phone and Wi-Fi connectivity in-flight aboard its A330 fleet. 3i Infotech has used its own practice to architect, implement, and maintain SSIM, enabling Oman Air to create a documented, repeatable process for security threat response through data mining techniques, integrated log management and incident response system. This will allow Oman Air to better detect and act upon various online threats such as malicious BOTS, WORMS and IP addresses all with substantially lower total costs of ownership, maintenance and overall usability, the company has said.

Knowing me, knowing you The print machinery industry is changing. Clients don’t just want a bigger range of new technology; they want service and maintenance and, like any business worth its salt, are continually looking to cut costs. TM hears how an upgrade to a fully integrated ERP system has allowed Muller Martini to see exactly what its customers need to succeed.

Muller

Martini makes machinery for the printing and print finishing industries, including book binding, stitching and both soft and hard cover production. It has battled with one other company in each sector to be market leader since the company’s inception in 1947. In fact, if you’ve ever picked up a quality book, there’s a very good chance the finishing will have been performed by a Muller Martini machine. With around 3,200 employees worldwide, Muller Martini is a truly international company. It manufactures in Switzerland, Germany and the US, and has sales bases all over the world. The machines can cost anywhere between £100,000 and £15m – the top end forming a full factory kit out. The customers are equally as varied, ranging from

Presto E90 - An entry level saddle stitcher which uses wire to bind brochures and catalogues

start-up businesses with a handful of employees to multi-national blue chip firms. Commercial manager Michael Mortiboys says a shift has occurred within the industry in recent years. Often, firms are looking to make their machinery last longer rather than replace it, and many may now look to buy second hand as well as new. “This is a trend which the global downturn appears to have cemented into place,” he says. Muller Martini has adapted its business model accordingly. It still sells new machines and installed around 30 last year. However, with 25 expert field engineers the firm has made service a key focus. It now has over 50 maintenance contracts in place across the UK and Ireland. Two years ago it had just five. In addition, the firm uses its knowledge of the market to find used machines via its own global

network and extensive industry contacts. The machines can be refurbished and then sold on to its customers. Where appropriate, machines can also be extended when more functionality is required. In terms of its own machines, almost all are built bespoke to customer specifications, with around a three month lead time. However, it is not rare for a customer to need a machine within as little as two weeks to carry out a contract. To this end, Muller Martini keeps some of its lower end machines stocked in the UK as ‘off-the-shelf’ products for quick distribution. All of this means the business needs to know its customers better than ever before, if it is to be able to identify the solutions they need. “We have to be properly flexible to accommodate our customers’ needs,” says Mortiboys. “Whatever the customer wants to do we can usually find a solution. That’s our bag, that’s what we’re here for.” To satisfy this demand, the company turned to Enterprise Resource Planning software and, specifically, Microsoft Dynamics NAV. Before, Muller had two disparate IT systems running – one for service planning and one for spares and accountancy. This was hugely inefficient in terms of time and left plenty of margin for error. Manual re-entries for example, were frustratingly repetitive task which held much potential for inaccuracy. “We needed to be more organised,” says Mortiboys. “Our goal was to integrate all of our processes and gain transparency across the business, the agenda wasn’t really to gain more customers, it was to become more organised. We need streamlining and visibility.” The system had already been chosen when Mortiboys joined the company six years ago. However, a vendor was still to be identified. The global nature of Muller Martini’s

operations was a key consideration to this regard. With the Spanish sales office already having successfully implemented an earlier version of Microsoft Dynamics NAV, the plan now was for a joint roll out of the system for the UK and the Netherlands. Columbus IT was chosen because, unlike many of its peers, it too has international offices and is therefore able to provide the support for both countries. “We were also very impressed with their implementation methodology,” says Mortiboys. The two companies then worked together for two and half years building the bespoke elements that Muller required, based around the KPIs it had identified.

The benefits Mortiboys says the switch to Dynamics NAV has not only saved the company time and reduced the margins for error across a number of processes but has allowed it complete visibility over its customer’s needs and habits and let’s it see which services it can provide. Muller has always considered itself an innovative company, providing the latest technological solutions to the industry it serves, but now, with Dynamics NAV, it can ascertain which areas are most beneficial to develop because it knows what its

customers want and what they use. Likewise, when a new product has been developed, the company can easily select who it should market it too, rather than blanket covering its entire customer base. When a customer rings through to the service team, their contact name, service items, warranties, when they last phoned in, the machinery they have, what ages it is, what services Muller Martini can offer them is presented on the screen to the operative. “We can now answer customer queries quickly and authoritatively; once we have technical clarification we can produce quotes in minutes rather than hours, that are in a standard format, easier to read and easier to understand,” says Mortiboys. “If you need a spare part we have the information at our fingertips.” The company also now has functionality for its customers to order over the web. Data is transferred from Dynamics NAV on an hourly basis around the clock meaning stock availability is always up-to-date and customers can order at any time. Previously, customers’ night shift workers would have to rely on their daytime colleagues to place orders with Muller’s phone operatives. Regular machine servicing is being enhanced where field

Columbus IT

Muller Martini front of building 2010

engineers can report back to the office on how long repairs may take and what parts they need. This information all gets added automatically to follow up quotation directly into Dynamics NAV. “If a customer asks for how much money they’ve spent in their history with us, it’s just a case of calling up the customer number and we have the information, properly and professionally presented. It used to be a painstaking task of finding and collating all of the individual invoices.” Overall, Mortiboys says Dynamics NAV gives Muller Martini visibility, flexibility and control. The company can take advantage of opportunities that it formerly could not have known were there and it can do so significantly quicker, easier and more professionally that was possible before. “It’s about working smarter, not harder,” he says. “Reporting is simple and, we can present data professionally and we can call up a huge wealth of historical information in an instant. As most of the systems are Windows-based, the usability is extremely high. In a world where time is money, this earns us lots.” Dynamics NAV allows Muller to understand its customers and understand how it can help them to grow. In turn, as Muller grows itself, it knows it has a partner that can support it every step of the way.

For more information please visit: www.columbusit.com

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ITnews.. Inventory management

Supply Points System launches new inventory management machine SupplyPoint has announced the release of Modulo – the latest innovation to come from the company’s design and development team geared towards pointof-use inventory control. The company says point-of-use inventory control is an increasingly important element of the supply chain as companies seek to reduce wastage, improve productivity and work more efficiently whilst simultaneously increasing ease of access for employees to critical items required for uninterrupted production. Hardware based inventory systems provide control, physically restricting who takes what, when, why and more importantly how many. Modulo can be configured to provide different size drawers and compartments. A single machine can incorporate up to 10 frames providing 1200 secure locations, dispensing 14,400 items. This increased capacity has been achieved whilst simultaneously increasing the size of the drawer compartment by almost 50%. The drawers have been redesigned and are manufactured from rugged ABS plastic, housed in a steel frame. New “easy scoop” compartments allow faster and easier retrieval of the items within. MODULO provides this functionality at up to 30% cheaper than the current SupplyPoint ‘Venda’ solutions. Supplied with an option of a 10” resistive touch screen or the rugged 15” “tough-touch” display, Modulo comes complete with SPS-UI a fully integrated software suite that manages and records every transaction, from withdraw to automatic reordering and replenishment. SPS-UI automatically generates a vast amount of data that can be used to improve operational efficiency, reduce Supply Point Systems costs and improve Modulo machine productivity.

ERP partnership

Dynamic choice for Vestey Meat import specialists Vestey Foods has announced a deal with Columbus IT to provide it with Microsoft Dynamics as its new ERP solution. The Vestey Foods Group comprises thirteen food companies with a combined turnover of £500m, specialising in the import, storage and distribution of a wide variety of foodstuffs from global suppliers into local market places. Nick Reynolds, financial controller at Vestey, says: “To assist our rapid growth we needed to consolidate our disparate business systems from the UK and across the group into a best practice ERP solution. Many of our processes are still manual which is hindering our expansion plans”. Vestey Foods have initially purchased 30 users of Microsoft Dynamics which includes functionality around finance, sales, purchasing, stock and warehousing. “This is just the beginning of a much wider roll out which will help us to improve efficiencies across the group, reduce our costs, gain greater insight into our business and ultimately manage our growth” He said Columbus IT was chosen because they were recommended as the experts in the food and drink sector.

ITnews... Digital prototyping

Autodesk Clean Tech Partner Program gains momentum in Europe Autodesk has announced that growing numbers of clean technology companies are joining the Autodesk Clean Tech Partner Program following the launch of the scheme in Europe earlier this year. The Autodesk Clean Tech Partner Program provides Digital Prototyping software, including Autodesk Inventor 2011, to clean technology start-ups to design, visualise and simulate products before they are built, to accelerate time to market and to innovate more rapidly. “Europe is at the forefront of many exciting alternative energy advances, together with some of the world’s most ambitious clean energy policies, so it’s a natural evolution for Autodesk to partner with pioneering clean tech companies in the region,” said Erwin Burth, business development manager for Clean

Tech at Autodesk. “Our rapidly expanding partner base is testament to the appeal of our offering to companies tackling the world’s most pressing environmental challenges.” Partners already benefiting from the use of free Autodesk digital prototyping software to drive faster time-to-market and achieve competitive advantage include Cleaner Air Solutions, a UK specialist in solar electricity generation that supplies

renewable energy systems to the domestic and commercial market. According to Andy Craddock, operations manager at Cleaner Air Solutions, “having access to 3D software like Autodesk Inventor and Showcase, for example, allows us to develop innovative products, dramatically reduce project risk and overall project lifecycles, and drive rapid but well-informed decisions on design projects by developing highquality visualisations.”

Erwin Burth, business development manager for Clean Tech at Autodesk

ITNIBS Premier deal for Capgemini Premier Foods, the UK’s largest food producer, has committed to outsourcing its IT requirements to Capgemini until 2019, having agreed a £9m deal. Adding to the existing and long-standing relationship between the two companies, this new deal covers the five year period from 2014-2019. The contract covers the Premier Foods IT infrastructure including data centre and technical support for all core business systems. The company says it achieves cost savings by agreeing the deal early.

Oracle Virtual Desktop Infrastructure 3.2 now available New features in Oracle’s Virtual Desktop Infrastructure 3.2 include global hot-desking, multi-company capabilities, enhanced video and audio capabilities and administrative enhancements, the firm has announced. “This release of Oracle Virtual Desktop Infrastructure is further evidence of Oracle’s commitment to providing a complete portfolio of virtualization solutions that helps reduce costs and leverages existing IT resources,” said Wim Coekaerts, senior vice president, Linux and Virtualization Engineering, Oracle.

Epicor reports on Q2 Epicor has reported “very positive” financial results for its second quarter, ended June 30, 2010. Epicor chairman, president and CEO George Klaus said: “The momentum we are seeing behind Epicor 9 continues and helped drive software license revenue growth of more than 9% over the second quarter of 2009.” The company provides enterprise business software solutions for the midmarket and divisions of Global 1000 companies.

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SME business management

ERP

Jellycat Implements SAP to unite business functions SAP UK & Ireland has announced that luxury soft toy maker Jellycat has implemented integrated SME application SAP Business One. The company has also licensed two bolt-ons – Accellos Warehouse Management and Amodat Mobile Sales System for SAP Business One. Established just over 10 years ago in London, Jellycat supplies gifts and toys to shops all over the world including some of the most well known high street names. The company said it chose SAP Business One as it offered advanced stock control options including the ability to provide real-time stock availability information to the sales team. Danny Olive, finance director of Jellycat, said: “As a fast growing small business, which also competes on a global scale, we needed a comprehensive, integrated and scalable solution to help us continue our business success. SAP Business One is remarkably easy to use.” Jellycat’s Bashful Bunny

Dynamics gets kudos Microsoft Dynamics AX has been named among the order management hub solutions leaders for the first time by independent research firm Forrester. Forrester said Microsoft Dynamics AX provides strong support for end-to-end order management processes and forward-looking product strategies. “Microsoft enters the Leader band for the first time based principally on the strength of its strategy, including a top three product and go-to-market strategy as well as market-leading ownership costs,” the report states. It also praised Microsoft’s strong customer reference and extended global reach through partnerships and said large firms will be looking to Dynamics as a cost effective alternative when their current systems fail. “We believe being named a Leader in the Forrester Wave is a reflection of the investment in our Microsoft Dynamics ERP industry road map, our support for twotier ERP implementation scenarios and our Dynamic Business vision,” said Crispin Read, general manager, Microsoft Dynamics ERP. “By delivering on a market vision focused on simplifying the user experience, increasing productivity and delivering continuous innovation for customers, we are able to help them keep pace with the rapid rate of change in today’s complex business environment.” Earlier this year, Microsoft announced plans to deliver a connector in the third quarter of 2010 that will accelerate two-tier ERP deployments between Microsoft Dynamics AX and SAP Business Suite. Others to earn recognition alongside Microsoft were Oracle’s E-Business Suite, Sterling Commerce and SAP.

ITNIBS Free Autodesk download

Steelwedge expands to Middle East

British Gypsum chooses Acronis

Autodesk has announced that it has made its Inventor Optimization software available for download from the Autodesk Labs website as a free technology preview. The web-based technology, which works with Autodesk Inventor 2011, allows engineers to tap into cloudbased processing power—at no additional cost—to perform digital simulation on their product designs.

Steelwedge, a cloud-based Sales and Operations Planning (S&OP) provider, has announced that it has established a regional office in Dubai, UAE, to support growing demand from manufacturers and distributors in the Middle East. “Our presence in Dubai and partnership with local institutions positions us to provide better service to our rapidly expanding global client base,” said Glen Margolis, CEO of Steelwedge.

Construction firm British Gypsum, part of the Saint-Gobain Group, has selected Acronis as its base disaster recovery technology. The system will protect the servers and clients which control the production of plasterboard and bagged plaster across the company’s five manufacturing sites in the UK.

Have your say at www.themanufacturer.com

Dyson’s double vision

Early-stage prototypes

In the midst of difficult economic times, entrepreneurial engineering company Dyson is swimming against the tide once again. The appliances manufacturer is seeking to double its engineering team in the UK boosting numbers from 350 to 700.

Dyson

is already established as an imaginative and innovative company – it is second only to Rolls Royce as a patent filer. Its reputation and market leadership is based on innovation, but new ideas need new blood. Sir James Dyson, founder and the enduring powerhouse behind the company that bears his name, recently published a report, Ingenious Britain,

which calls for education reforms, including the establishment of more engineering academies, and greater R&D tax credits to make Britain Europe’s leading high tech exporter – so the upcoming recruitment drive could be seen as him putting his money where his mouth is. “Engineering and design need to be encouraged through schools and universities, and in industry itself,” says Sam Bernard, engineering manager. Dyson supports a number of university activities and it also has a programme that is designed to raise interest in engineering in schoolchildren. However, the company maintains that the education system itself has to support and encourage children, as other countries do. But meanwhile, it is actively seeking talent within the UK.

Recruits: from university and beyond “We’re recruiting 350 qualified and trained engineers, many from university. We want to attract talented people with specialist knowledge,” says Bernard. One

Specialfeature Dyson

of the recent recruits is Jude Pullen, a Cumbrian, who joined a few months ago. He is an M.Eng graduate from Glasgow University/Glasgow School of Art, a course that enabled him to work on broader aspects of product design, not just engineering. “It included what I would describe as a ‘human approach’, design with the user in mind and how people interact with technology,” he says. His final degree project was a medical device. “It included study of engineering but also industry safety regulations, the ‘why’ of design, who it was being designed for.” The attraction of working for Dyson, to him, is that he can use the skills and awareness he acquired in Glasgow.

Scope to develop “What is key, for me, is the scope,” says Pullen. “I am aware of the company’s existing projects, such as the Air Multiplier and Air Blade hand driers. I am getting exposure at various levels and am now working on related projects. It isn’t just about the products themselves – it’s about how they’re designed.” This is the way that Dyson operates, according to Bernard. He has been with the company for seven years and has worked on every aspect of design, from concept to production, and with analysis, test and motors teams among others. “As an engineer at Dyson you need to be able to grasp the whole development process,” he says. The company’s engineers need to develop a breadth of knowledge but, at the same time, they have the time and opportunity to develop their own specialities, whether in acoustics, motors, fluid dynamics, cyclones, cleanerheads or other applications. As they work on a project they will be involved in design, CAD, prototyping, testing, and analysis. Pullen already had experience with other companies, including Vickers Pressings in Newcastle, Caterpillar and Jaguar. “They gave me a view of the rigours of organisation,” he says. “At Dyson, I have been working on how to design with CAD for tooling, for example. I have seen the process either at first hand or by working alongside a senior engineer.” While he had previously worked on part of a product, he can see the time coming when a product will actually be something he has designed. “I’m involved in some interesting aspects of Dyson digital motors.

Recent recruit Jude Pullen

It’s exciting – I’m involved with new applications and finding out what can be done with them.”

Country file, city slicker The engineers Dyson recruits, many straight from university, will work at the company’s Wiltshire laboratories. However, while Malmesbury is Dyson’s global HQ, it isn’t known as a magnet for young people. “It’s actually quite close to Bristol, which I think is similar to Glasgow,” Pullen responds. “They are both ‘young cities’ – both had industrial bases, both suffered decline and have gone through rebirth. Bristol is a dynamic place.” So that’s a vote in favour, then. Dyson has quadrupled investment in R&D since 2005, a period that has seen the launch of the energy-efficient Air Blade hand drier line, the Air Multiplier bladeless fan and its smallest-ever vacuum cleaner, the DC26 City. It is expanding its motor development team – the digital motors Pullen mentioned are the power units found

Most importantly, we all remain aware of the complete design cycle and what is required to create a successful product in 1.2 million machines produced in 2009 alone. New positions include graduate design, mechanical and acoustic engineers. Naturally, the company wants to be sure it’s getting the best available.

Rigorous recruitment “I was recruited on the back of the degree show. I had entered the Dyson Award programme and that helped me to get a foot in the door,” Pullen says. “The interview and selection process was definitely challenging.” The skills required and developed by Dyson are not exclusive; they are needed in other sectors like aerospace, motorsport and process manufacturing, as well. “These skills and techniques (labview, Six-Sigma, matlab and so on) are used throughout industry and provide a great background for most other sectors,” says Bernard. “Most importantly, we all remain aware of the complete design cycle and what is required to create a successful product.” As a manager he has seen that graduates can only develop with lots of training, exposure to different techniques and support from senior engineers. “I give them lots of technical challenges as soon as they come through the door, plus plenty of support to make sure they learn fast from failure. This seems to be very good for their personal development, also.” Dyson exports its machines from the UK to 49 countries and is market leader in the UK, US, Australia, New Zealand, Western Europe and Canada.

Have your say at www.themanufacturer.com

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Secure, global IT and Communications solutions for better outcomes. People and machines create, collect, and disseminate petabytes of information every hour. But perhaps more staggering than this volume is what it can make possible—especially with Verizon as a partner. We’re discovering game-changing patterns in data, creating more meaningful collaboration, and erasing barriers between information and people. As a result, we help our clients turn their ideas into better outcomes—from new energy resources to personalized entertainment, from financial efficiency to healthcare efficacy. No wonder so many of the world’s largest global companies partner with Verizon. Discover more at verizonbusiness.com/better. ©2010 Verizon. All Rights Reserved.

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rofit/loss; lean operations; benchmarking;

Safety does it…

employee relations; ERP; logistics; product

With more than 300 work fatalities and anything up

lifecycles. For the manufacturing manager,

to 30 million days lost each year due to occupational

feet on desk, wearily loosening his tie at the

ill health and injury, it is a foolish manufacturer

end of another recession-battered week, grappling

indeed who chooses to ignore. “Companies need

with the obtusely-worded provisions of the

to operate a two pronged strategy to address health

Companies (Inspection and Copying of Registers,

and safety,” advises head of manufacturing at

Indices and Documents) Regulations will justifiably

Pinsent Masons LLP, Alison Bond.

come a distant last on his ‘to do’ list. However, given that legislative compliance governs virtually every aspect of his company’s operations,

and implementation of policies and procedures —

the manufacturer, regardless of sector, would do well

from the shop floor to boardroom. On the other,

to retain a working knowledge of those statutory

there is a requirement to ensure that businesses can

changes which affect his day-to-day remit. Ignorance

adequately demonstrate the steps that they have

of the legal provisions which apply to his business

taken, should the worst happen.”

can result in a fine without limit, not to mention an

With the Health and Safety Offences Act 2008

extended stay — life, in the most extreme cases — at

making individuals liable for up to two years

Her Majesty’s pleasure.

imprisonment for a breach of duty, moreover, “The

Clearly, this is best avoided. By placing the

“On the one hand, businesses need to be consistently vigilant in relation to the maintenance

days of only the company being prosecuted are over,”

understanding of legal compliance alongside

says Lisa Wilson of Eversheds LLP — whose article on

those operational core competencies which

the myths of health and safety law can be found at

have traditionally remained critical to successful

page 90. Indeed, under the Health and Safety at Work

manufacturing, companies of all sizes can effect a

Act 1974, duties and responsibilities are imposed on

more robust corporate framework, improve employee

directors, managers and employees as individuals;

relations, and avoid litigation, fines and prison terms.

there really is nowhere to hide, it seems.

LEGALSUPPLEMENT

Producing liabilities CASE STUDY – British Sugar

Product liability, defined as the legal responsibility of manufacturers, wholesellers and retailers to the buyers or users of damages

When three workers died at British Sugar in 2003, the organisation — which hitherto considered health and safety a key priority — realised a swift change of focus was needed. It carried out a comprehensive, boardroom-led review of its arrangements, including: the chief executive assigning health and safety responsibilities to all directors; monthly reports on health and safety going to the board; more effective working partnerships with employees, trade unions and others; overseeing an audited behavioural change programme; publishing annual health and safety

or injuries caused by the use of defective products, hit the headlines in earlier this year with the recall of 1.8 million Toyota vehicles across Europe due to faulty accelerator pedals, including 200,000 or so in the UK. Similarly, in February the European Commission published guidelines for the management of the Community Rapid Information System (RAPEX), its consumer product safety reporting mechanism. Widely praised, and with product recall figures

targets, and initiatives to meet them.

quadrupling since 2005, “The practical

As a result, the company saw a:

suppliers will [nonetheless] be significant,” says

• 43% drop in time lost to injuries over two years; • 63% reduction in major health and safety issues in one year; • Greater understanding among directors of health and safety risks.

implications for product manufacturers and Rod Freeman, a partner at Lovells LLP.

“In the case of a voluntary recall, this will mean either that manufacturers and suppliers will have to provide proactively to the national authorities a much greater level of detail when making notifications around Europe, or they will have to expect to deal with more detailed inquiries from national authorities in all potentially affected markets.”

LEGALSUPPLEMENT

A practical view There is a significant rise in findings that warning There is a significant rise in findings labels are not always that warning labels are not always sufficient protection sufficient protection from liability for from liability for retailers or manufacturers, retailers or manufacturers says Victoria Curran, Victoria Curran, Weightmans LLP product liability lawyer at Weightmans LLP. “Moreover, the assessments of their products. Producing up courts are taking a practical view of what the to date documentation on product testing and reasonably expected behaviour of a consumer demonstrating compliance with specifications should be — and wearing eye protection while and any relevant standards is thus paramount in loading the washing machine hardly counts as defending product liability claims. such,” she says, referring to a case in which the According to Weightman’s Curran, if a claimant claimant suffered blurred vision, sensitivity to is successful in establishing that a product has light and a possible tear in the eye due to faulty a defect, a label alone is unlikely to provide washing liquid. protection in court. Being able to demonstrate Damages awarded in claims brought against that everything practicably possible was done retailers under the Consumer Protection Act are to assess and minimise risks to consumers is being passed on to the product’s manufacturers, therefore key. “In some cases,” she says, “the with contracts between the parties frequently courts have held that large manufacturing firms allowing for such arrangements. “Manufacturers or retailers have the resources to provide an often have little say regarding the terms of their improved level of protection for the consumer, contracts with larger retailers,” says Curran. with significant damages awards being made “Indeed, a worrying number of manufacturers end against those that don’t.” up agreeing to accept clauses indemnifying the [For a comprehensive overview of this area, retailers in full to maintain their supplier status.” turn to page 84 and Ashfords LLP’s article: With liability resting largely on their shoulders, “Product recall – managing the process”] manufacturers can seek to protect themselves by carrying out regular adequate tests and

Legislating for legislation

CASE STUDY – Sainsbury’s After an external audit highlighted the need for a more unified approach to employee welfare across the company, Sainsbury’s rethought its health and safety vision — set out by the group HR director and backed by a plan that included targets over three years. As such, all board directors were given training on health and safety responsibilities, with safety concerns now regularly featuring on board agendas. The business benefits included: • 17% reduction in sickness absence; • 28% reduction in reportable incidents; • Improved morale and pride in working for the company, as indicated by colleague surveys

Given that they are not — for the majority at any rate — legal beagles, it is understandable that those in manufacturing will not be glued to the weekly law reports. Indeed, for firms without inhouse 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 such provisions. Although 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 maintaining the optimum employee relations which remain so critical to successful business practice.

Pinsent Masons: Making it easier for manufacturers In today's tough and complex business world, we at Pinsent Masons dedicate ourselves to working hard to make it easier for you. We want the experience of doing business with us to be as straightforward, efficient and effective as possible, which means attending to the things (often the little things) which you tell us help you to achieve your business goals with minimum fuss. To find out more about how we can help you please visit www.pinsentmasons.com or call Alison Bond, Head of manufacturing on 0121 625 3261

Working hard to make it easier for our clients

pinsentmasons.com ÂŠ Pinsent Masons LLP 2010 Working hard to make it easierTM Making it easierTM and EasierTM are all trademarks of Pinsent Masons LLP

Compliance: staying on the right side of the line slow down in the level of corporate

Manufacturers are experiencing growing regulation and legislation which are impacting on where they do business, with whom and how. Pinsent Masons LLP investigates the cost of compliance.

activity by manufacturers, we are in an era when cash is king,” she says. “With the advent of significant fines and penalties for many regulatory breaches, compliance has quickly become a strategic issue in the industry.”

Despite the topical nature s companies continue

The Bribery Act, which comes into

of the upcoming Bribery Act,

to battle with difficult

force in April 2011, brings corruption

health and safety remains — as

economic conditions,

sharply into focus for the corporate

it always has —an area of serious

they face an ever growing

boardroom, much as the 2007

focus for manufacturers. The very

raft of legal requirements imposed

Corporate Manslaughter Act did for

nature of many manufacturing

by authorities both in the UK and

health and safety. The subsequent

processes means that accidents

foreign territories. Negotiating and

Health and Safety Offences Act

are an occasional fact of life, albeit

complying with the legislation can

2008 went even further, making

one which the industry remains

be daunting, time consuming and

individuals liable for up to two years

committed to eradicating.

expensive. Businesses therefore need

imprisonment if found guilty of a

The Corporate Manslaughter

to come to terms with continuous

breach of health and safety duties.

Act meant that health and safety

changes quickly and competently in

Pinsent Masons questioned

order to remain competitive and, of

more than 100 manufacturing

responsibility and penalties became

course, on the right side of the law.

company executives with legal

far tougher and far easier to enforce.

According to new research by

and compliance responsibilities

The first case under the new act,

international law firm Pinsent

on a range of subjects, from the

which Pinsent Masons is advising on

Masons LLP, the key challenges in

challenges of sustainability to the

currently, will soon shed some light

the manufacturing industry include

future of off-shoring. The full report

on the implications for companies.

health and safety, and bribery

will be published during September.

and corruption. It is perhaps not surprising that

Alison Bond, head of the

became a boardroom issue, as

We believe that companies need to operate a two pronged strategy

manufacturing sector at Pinsent

to address health and safety. On the

these issues should be at the top

Masons, has seen the demands from

one hand, businesses need to be

of the list, but what is important is

manufacturers change during recent

consistently vigilant in relation to the

that they remain areas of concern.

times. “With the recession and a

maintenance and implementation

What areas of compliance are you currently focusing on?

Is your General Counsel covered under your company’s Directors and Officers Insurance?

As the role of compliance becomes more strategic and the penalties more severe, it is no surprise that in more than half our survey respondents the general counsel is covered by D&O insurance. What is perhaps alarming is that 38% did not know.

the shop floor to boardroom. On the other, there is a requirement to ensure that businesses can adequately demonstrate the steps that they have taken, should the worst happen. The Bribery Act will set exacting standards on how business is conducted both in the UK and

Now that the law enforcement agencies have real teeth, anti-corruption and competition regulations are having a significant influence on the route by which manufacturers are internationalising their businesses Sean Elson, Senior Associate, Pinsent Masons

abroad. With many manufacturers operating in what are widely

received face-to-face training. “If your

known as “red flag” jurisdictions,

business isn’t focused on this, now is

the process and get professional

the implications for the industry

the time to get things started,” says

advice early

are serious. Significant penalties,

Pinsent Masons partner, Clare Taylor.

including long jail sentences for those

To demonstrate the importance of

5. Allocate time and budget for

Companies that take the lead and

who fall foul of the legislation, will

the subject, one general counsel we

go beyond legal compliance in

lead to a great deal of sober reflection

spoke to made the point that, “The

search of ‘best in class’ status in

in the boardrooms of Britain.

Act has focussed people’s minds and

relation to corporate culture are

As lawyers, clients are coming

persuaded the board to support the

likely to see a competitive advantage

to us to seek assurances that

process by diverting resources to

as they become the benchmark for

their preparations for the Act are

tackle it.”

companies to do business with.

been stung by a prior incident.

Top 5 tips for starting your

agencies have real teeth, anti-

One company secretary of a global

preparations for the Bribery Act

corruption and competition

engineering group said, “I think

1. Ensure you understand what the

regulations are having a

adequate — in some cases having

we’re ahead of the game with most

Now that the law enforcement

Act expects of UK companies

significant influence on the route

of our UK competitors because of

2. Engage the board immediately

some battles scars we don’t want

– sponsorship from the highest

internationalising their businesses.

repeated. We’re doing all the things

level is essential

Business partners and structures

necessary throughout the business

3. Perform a risk assessment:

by which manufacturers are

are being selected on the basis

and learning from some very

identify the areas of your

of compliance as much as for

expensive mistakes. We have been

commercial activity that are

commercial reasons. In some

able to drum into people that if they

most exposed to bribery &

instances, they are considered

get involved in corruption they are

corruption

the more important of the two.

committing a crime.” With the implementation of the

P insent M asons L L P

of policies and procedures — from

4. Remember that you are dealing

A senior legal advisor at an

with cultural change. A risk

international manufacturer told

Act being pushed back until April

mitigation programme requires

us, “There has to be business and

2011, companies have been given

people to change the way they

legal approval, even if this means

extra breathing space to ensure

do their job everyday

turning away good business.”

their houses are in order. Training, seminars, capping expenses and confidential hotlines should all be

About Pinsent Masons LLP

considered by companies looking

Pinsent Masons LLP is a full service international law firm with offices

to protect themselves in this new

across the major commercial centres of the UK, Asia Pacific and also in

environment. If procedures are not

Dubai. A strategic alliance with Salans gives the firm strength in depth

adequate to prevent bribery, the

across the major jurisdictions of continental Europe. With a strong and

company itself could be prosecuted.

well established manufacturing client base, Pinsent Masons serves UK

One multi-national engineering

and International clients across the full range of their legal needs.

company has implemented an anti-corruption programme that has

If you would like to find out how Pinsent Masons can help your

been running for two years, during

business achieve its objectives please contact Alison Bond,

which time 13,000 employees have

Manufacturing sector head: alison.bond@pinsentmasons.com

Could your company effectively manage a product recall? Ashfords LLP is a leading law firm providing a full range of legal and business services to clients worldwide. Our Product Recall Team has in depth experience of advising and working with manufacturers, distributors and retailers on product safety and recall issues. We believe that a reputation for product safety can generate consumer confidence and brand loyalty, providing a tangible and significant benefit to manufacturers. Our Team is regularly instructed on recalls involving products as diverse as childrenâ&#x20AC;&#x2122;s toys, gas appliances and medical alarm systems. We also advise our clients on appropriate structures and processes to prevent the introduction of unsafe products into the market place.

How should a company respond to a product safety crisis? What are the practical, legal and PR implications associated with a product recall? Is a product recall procedure part of your companyâ&#x20AC;&#x2122;s risk management strategy?

For further information please contact: Rory Mac Neice T: +44 (0)1392 334006 M: +44 (0)7834 665320 r.macneice@ashfords.co.uk

Jamie Horner T: +44 (0)1392 333993 M: +44 (0)7710 336579 j.horner@ashfords.co.uk

Quality. Efficiency. Value. Excellence

www.ashfords.co.uk

The recent product recalls by a well known car manufacturer have underlined the growing number of companies having to take recall decisions and the impact that the tough regulatory framework, particularly that flowing from the EU, is having on product safety.

consumer confidence and

Dealing with a potential product safety issue

brand loyalty, providing a

The current regulatory framework,

to identify the extent of the

tangible and significant benefit to the

particularly that flowing from the

problem and to establish the

manufacturer. The current regulatory

EU, requires extremely swift action

prospects of containment.

framework imposes obligations on

on identifying a potentially unsafe

manufacturers, including importers

product line. That underlines the

order to identify levels of

and those with own brand lines, to

advantage to manufacturers in

complaints and other indications

bring to market only those products

having in place a pre-emptive

reputation for product safety can generate

problem exists. Consider scope of testing to include units from different batches in order

3. Interrogate reporting systems in

of a potential defect. 4. Work up and implement, if

that are safe — that is to say those

strategy. In the event of a threat

which present no risk, or only

to the safety of a product, the

necessary, a clear communication

minimal risks which are compatible

manufacturer would need to

strategy to include specific briefing

with the product’s use.

consider the following: On receipt of information of a

notes for designated telephone

Managing the Risk

potential problem, either through

teams dealing with consumers. 5. Identify and plan roll out of

consumer monitoring, or an

corrective measures to include

Ashfords Solicitors has found that

ongoing testing regime, a pre-

assessment of recall options,

manufacturers who have structures

designated safety management

with appropriate advisors and

The Product Safety team at

in place to prevent the introduction of unsafe products into the market

team should be informed. The safety management team

assessment of availability and sourcing of replacement products. 6. The safety management team to be

place are best placed to successfully

should have immediate access to

maintain the safety integrity of their

safety related information regarding

aware of regulatory time constraints:

products. These structures include: Formation of a Risk Management

the product being considered,

the need to notify the competent

including relevant risk assessments,

authority within 3 days in the event

test house result history and

of a serious risk, for example.

Team to oversee the organisation’s product range in terms of safety. Rigorous UK based testing

batching/tracing information. The safety management team

In our experience, a well prepared

regime, including spot testing on

will need to consider immediate

team will greatly enhance the

batch shipments.

next steps following an initial

opportunity for a manufacturer to

quantification/assessment of

demonstrate its commitment to

product safety to include:

safety and to insulate a brand against

The introduction of clear tracing and locating procedures to permit

adverse publicity in the event a recall

the identification and current location of individual product units and batches. Systems to review and monitor

1. Issuing an emergency stop notice to

does become necessary.

freeze affected units in the supply chain pending further investigation

consumer complaints to identify

and in particular, to ensure no

For expert advice call Rory

and catch potential safety

further consumer sales.

Mac Neice or Jamie Horner,

issues early. Consider recall insurance options.

A shfords S olicitors

Product recall – managing the process

2. Immediate additional testing to identify what, if any, safety related

Partners at Ashfords LLP, on 01392 337000

MANUFACTURING MATTERS DLA Piper – providing bespoke legal services to the manufacturing sector DLA Piper is one of the world’s largest law firms, with 3,500 lawyers in 30 countries. Our global network means we can support our clients, whatever their interests and wherever they are working, to grow their business. Our Sheffield office is in the heartland of one of the UK’s most vibrant manufacturing regions and at the centre of our work to support growth in the industry. We believe that manufacturing is vital to the UK’s economic success. Whether you want to grow your business overseas, protect your cutting edge ideas or make your business more energy efficient, our lawyers have the knowledge and expertise to help you achieve your goals. Our expert teams have experience working with some of the UK’s leading manufacturers in areas including; ■

Navigating international markets

■

Protecting your intellectual property

■

Safeguarding your commercial contracts

■

Dealing with Health and Safety and Environmental regulations

■

Assisting with employment issues

■

Managing disputes and litigation

■

Advising on your real estate needs Delivering “tremendously sound, pragmatic advice that is always presented on time,” this “hardworking practice” wields an impressive roster of top industrial clients, who are impressed with the team’s ability to “really understand what makes us tick” Chambers 2009 To find out more about our services, contact manufacturing@dlapiper.com

When times are tough and new contracts are hard fought, it can be tempting to close the deal with little regard to the contractual terms. If such details are not clearly set out or understood, however, relationships will be tested — potentially ending in costly legal disputes.

in circumstances beyond their reasonable control. As snow and volcanic ash clouds show, force majeure events do happen, and it is important to seek to exclude liability in such circumstances.

Price escalator Purchasers are unlikely to agree to an absolute right to adjust prices at any time. There is, however, a growing acceptance of price escalators covering particular risks. For example, fuel costs or steel prices may have a dramatic effect on production costs, and it is therefore

ccording to lawyers at

shot will prevail; care should thus be

reasonable for this to be included in

DLA Piper, such disputes

taken to ensure conditions from each

contracts where there are significant

are becoming increasingly

side don’t contradict each other, and

lead times to delivery.

common in the sector.

actually apply in the final contract.

Richard May, head of the legal

In high value or multiple supply

Standard terms will typically contain an express choice of law

practice’s specialist Sheffield-based

agreements, it is better to draw up

and jurisdiction, but few contracting

manufacturing group, explains:

a bespoke contract than relying on

parties actually factor the effect of

“New business is hard to come by in

remembering to include your own

such a choice if things don’t go

the current market, so there is a huge

T&Cs. It is also vital to lay out a clear

as planned. If you are contracting

temptation to just ‘crack on’ when

offer and acceptance of terms —

outside of the UK and do not

companies secure a new client.

otherwise you may not even have a

properly consider such matters, you

“The danger comes if things go

valid contact. Similarly, are the key

may make a choice that is invalid or

wrong. We have acted for a

deliverables set out clearly? Disputes

have to submit to an unsympathetic

number of manufacturing clients

frequently arise when it is unclear as

jurisdiction — posing a serious risk

who have faced real difficulties

to what it is that is to be provided,

to your ability resolve a dispute

when there has been an issue with

to what specification and within

cost effectively.

one of their products after dispatch.

what timescale.

Without clearly defined terms and conditions in place from the

Product failure

outset, relationships can turn sour

Manufacturers will often try to limit

very quickly and the costs will

their obligations to repair, replace

mount up.”

or refund their product. Some

Nonetheless, May argues that

thought, however, should be given

establishing terms and conditions

to the feasibility of such options. If a

needn’t be onerous. “Contracting

manufacturer is permitting a ‘right to

will never be risk-free,” he says,

reject,’ there must be clear rules for

“but with some basic protection

when this acceptable, a timetable for

manufacturers can reduce the scope

inspection, mechanism for dispute

for disputes at a later stage.”

and a financial cap on overall liability.

Whose conditions apply?

D L A P iper

The Devil is in the detail?

they are excused from performance

Where the parties deal on standard set of terms and conditions,

Richard May DLA Piper

they should consider the impact

Suppliers and purchasers have their

of the Unfair Contract Terms Act

own T&C’s, and will seek to impose

when assessing whether exclusions

For more information

them during the negotiation process.

or limitations are reasonable.

please visit:

In the ‘battle of the forms’ the last

Suppliers, too, ought to ensure

www.dlapiper.com

The enemy within – workplace fraud It takes years to build a business, to establish a reputation and to become a market-leading manufacturer. It can, however, take just one fraudster to destroy it all, says Jonathan Clay and Helen Devery of Berrymans Lace Mawer LLP.

oth ‘white collar’ and

Fictitious employees on payroll

insurance claims fraud

with salaries paid out to them;

have caught the public

Fake suppliers established and

attention in recent

payments made to them;

advice from an employment lawyer as soon as possible, ensuring you comply with all

months, and numerous surveys

Falsifying invoices;

relevant employment law to avoid

have highlighted the extent and

Asset misappropriation, and;

them instigating any grievance

depth of the UK’s fraud problem.

Theft of petty cash

procedure against you.

In 2009, the Association of British

There should be an initial and

Insurers (ABI) estimated that

The direct financial costs of fraud are

fair process of investigation as

undetected general insurance

tangible. However, it is the indirect

allegations of fraud and theft are,

claims fraud totalled about

impact, such as a slur on the brand

by their nature, very serious. If after

£1.9bn. This year, the National

and reputation of the company,

taking appropriate advice, you

Fraud Authority (NFA) published

which can hit the hardest.

believe your suspicions are well

its annual fraud indicator,

Spotting a fraudster can be difficult:

founded, you need to conduct a fair

highlighting that manufacturing

often they are the pleasant and

disciplinary process, providing the

fraud accounted for an estimated

helpful employee who attracts neither

offender with all the evidence you

£1bn in losses for the corporate

attention nor suspicion. Indeed,

have obtained and giving them an

fraud sector alone.

they may have shown loyalty and

opportunity to explain their conduct.

With the drive to increase top-line

commitment to your business for a

While it is tempting to report

growth and reduce operational

number of years. Experience shows us

them to the police before going

costs in the current economic

that convicted fraudulent employees,

through the disciplinary process,

environment increasing the

most of whom held senior positions

the employee may then decide to

opportunities for supply chain

with their employers, will cite a

exercise their right to silence during

and economic frauds, the forecast

number of common reasons for

your investigation, thus prolonging

remains gloomy. Many question

offending: debt, greed, boredom,

the outcome. It may be preferable

whether there is more fraud, or

blackmail or the need to maintain a

to allow them to continue working

we are merely discovering more

certain lifestyle.

pending your investigation, or to

fraud. Whatever the answer, as

Fraudsters are able to commit

suspend on full pay.

manufacturers globalise and

these frauds with the knowledge

technology advances, the potential

and skills acquired during the course

Preventing fraud

for fraud in the manufacturing

of their employment, and with little

It is almost certainly impossible to

industry is very real.

to stop them once started. The

completely eliminate employee

tell tale signs can include a lifestyle

fraud; one rotten apple can spoil

Fraud has many faces

disproportionate to their income, a

the trust you have, and you need

Manufacturers are targets for a

refusal to take any holidays and often

to trust your employees for the

wide range of financial fraud by an

a controlling influence over your

efficient running of your business.

employee, which presents itself in

accounting or payroll functions.

What you should do is ensure that

a number of ways: Intellectual property infringement; Theft of company or customer data;

fraud, you must take professional

Tackling the fraudster

robust controls are in place to prevent your business environment being conducive to fraud, and

If you have any suspicions of an

ensure that you pick up on anything

employee committing financial

suspicious at an early stage.

Failure to report in the accident

claim, your insurers and legal

record. The absence of reporting

team will need good evidence to

employment stage. Take up

or late reporting can be an

prove fraud.

references with former employers

indicator of fraud – question why

and check for unexplained gaps

it is being reported late and have

to fraud will send the right message

in employment. Some employees

in place a well documented and

to your employees. By adopting a

Thorough checks at pre-

‘buy’ a job history or references to check carefully on the authenticity of their history Safeguard your payroll. Ideally, ensuring that there is a separation of responsibility for key financial controls Ensure that two signatories are

A strong message of zero tolerance

recognised reporting process A lengthy delay between accident

robust approach, you may deter

and notification of a claim. This

The key is effective risk controls,

makes the evidence gathering

and it pays to have in place sound

difficult so long after the event There are often no witnesses The ’serial’ claimant. A pattern

the opportunists from the outset.

processes to detect and deter fraud. These can include: A well recognised accident

of frequent claims should raise

investigation process where

required to authorise payments

concerns not only from a claims

employees recognise that all

and adequate information is

perspective, but for health

accidents must be reported on

given and checked during the

and safety concerns with this

time and with no exceptions. If

payment authorisation process Control who reviews any sensitive documents Undertake regular audits and compliance checks

Insurance fraud

individual Lack of contemporaneous proof of injury/medical records. There may be no records of attendance at his/her GP or A&E Geography. Quite simply, some

they fail to adhere, it is easier to question why Check and retain CCTV footage – it can be very useful in disproving the employee’s version of events If there are inconsistencies with

cities or areas are hot spots

the employee or his witness’

Employees often see insurance

for fraud, so be aware of your

version of events, challenge them

fraud as a victimless crime. We are

regional risks

and ask them to explain the

all familiar with the ‘crash for cash’

inconsistencies Undertake exit interviews when

scams which have blighted motor

Fighting back

insurers in recent years, but there

Any suspicions of fraud should

they leave the business. This

has not been as much publicity

be communicated early to key

may help to refute any later

over fraudulent employers’

stakeholders in your business,

allegations of a claim

liability claims.

insurers, brokers and legal teams. Insurers have responded very well

Remind your teams that employers’

claim can be either a complete

to the challenge of employers’

liability fraud can impact on all

fabrication of an accident or an

liability fraud by strengthening

employees in terms of pay rises or

exaggeration of the alleged injuries

their existing and sophisticated

freezes, job security and bonuses.

sustained. Where it can be proven,

counter fraud measures, and

It is not a victimless crime, and

based on the case evidence, that

judicial awareness of fraud is also

can send shockwaves across

a personal injury claim has been

greater than it has ever been.

the organisation. Diligence and

entirely fabricated e.g. the

However, in order to succeed in

deterrence, ultimately, are key to

accident in the workplace never

challenging an employers’ liability

defending your business from fraud.

A fraudulent employer’s liability

B err y mans L ace M awer L L P

Simple preventative steps include:

took place, a defence of fraud will succeed as the basis of the claim

Jonathan Clay is a senior partner and Helen Devery is a partner and

does not exist.

co-head of the Corporate Risks Team at national law firm Berrymans

Manufacturing environments can create risks of personal injury, so the

Lace Mawer LLP. They can be contacted at: jonathan.clay@blm-law.com and helen.devery@blm-law.com

fraudster is well aware of where there may be chinks in your systems which

BLM’s fraud team handles both commercial fraud and fraudulent

they can exploit. Spotting this type

insurance claims and is regularly instructed by insurers seeking advice

of fraud can be difficult, but there

on policy liability where the possibility of insurance fraud is suspected.

are some common indicators which

BLM’s established corporate risks unit works closely with the fraud team,

suggest that the claim may require

advising clients on defending against a range of threats to their businesses,

further investigation:

regulatory requirements, and demands of corporate governance.

The truth behind health and safety myths

Despite recent reports in the press which perpetuate the myth of an ‘elf and safety’ culture, Eversheds LLP examine some of the truths surrounding health and safety law.

“The Health and Safety Executive (HSE) must prove what I did wrong”

isn’t settling the case, it is pleading

have to prove that the risk was

guilty to a criminal offence which

either appreciable or foreseeable.

results in a conviction and criminal record. Significantly, there is no

burden of proof: the defendant

“Health and safety law is merely red tape and form filling”

must prove that they took all

The same criminal law used to

reasonably practicable measures

punish ‘real’ offenders is used

“Health and safety is just an issue for the company”

to ensure the health, safety and

by the HSE. The litigious part of

The days of only the company

welfare of their employees or those

health and safety law enforcement

being prosecuted are over;

who come into contact with their

is dealt with primarily by the

increasingly we are finding that

business. The HSE do not have to

HSE — although Local Authorities

individuals are being prosecuted

prove that all reasonably practicable

regulate certain activities such as

as well as the company. Under the

measures were not taken.

retail and distribution through the

HSWA, duties and responsibilities

criminal justice system. Companies

are imposed on directors,

where an employer has been

prosecuted by the HSE often

managers and employees as

charged with offences under

believe that they can negotiate

individuals. Not only does the

section 2 or 3 of the Health

or settle their case by paying

employer owe a duty to its

and Safety at Work etc Act 1974

compensation or a fine, but this

employees; the employees owe

If something goes wrong, health and safety law contains a reverse

Recent cases emphasise that

(HSWA), the prosecution do not

ability to settle ‘out of court’.

power to imprison individuals for

be less than £500,000, and may be

a duty to take reasonable care for

breaches of health and safety. So,

measured in millions of pounds.

their health and safety.

while a company cannot be jailed,

Importantly, the Guidelines apply

individuals can.

to all sentences given on or after

“Insurance will cover any costs and any fine imposed by the courts”

15 February 2010, regardless of the

Legal expenses insurance may

“Accepting an enforcement notice has no real consequences”

cover the costs of your own

Improvement and Prohibition

Even the most competent

lawyers and possibly any experts

Notices are a matter of public

businesses can inadvertently be

that you engage to help with

record. HSE tend to argue in a

caught up in a health and safety

your case, but is unlikely to cover

prosecution that an enforcement

investigation, and sometimes

anything else. Some insurance

notice is an acceptance that

even a prosecution. The key

policies cover your fees from

you have broken the law. HSE

the date of the summons, while

Inspectors cannot issue notices

others begin much earlier at

unless they believe the law has

the point that an investigation

been broken.

is commenced against you. You

Furthermore, HSE is

should check the type of cover you

increasingly attempting to

have in place.

bring evidence of previous

Even if you have your legal costs

enforcement notices — sometimes

covered, you cannot insure against

issued years before and often

a fine imposed by the courts.

unrelated, in the context of trying

If you are convicted, insurance

to persuade a court to allow the

doesn’t cover costs awarded

previous notices to be put to the

against you, those incurred

jury before deciding its verdict in

by the prosecution and HSE in

the current case.

investigating and prosecuting the

date of the offence.

“That won’t happen to us”

Not only does the employer owe a duty to its employees; the employees owe themselves and fellow employees a duty to take reasonable care for their health and safety

Often insurance companies insist

“Fines in health and safety cases are modest”

on appointing a panel lawyer,

Fatal accident cases regularly

considered and controlled. Your

but you can insist on the use of

result in fines of £250,000 or more

workforce must be competent and

specialist lawyers, especially if they

and now; even cases involving

suitably trained.

have been involved from a very

minor injuries or in fact, no

early stage.

injuries at all, can attract fines of

comprehensive health and safety

over £10,000.

management system will help

case. Be aware that you have the right to choose a specialist lawyer.

“Even if I am found guilty, the worst I will face is a fine”

New Sentencing Guidelines

to good health and safety management is ensuring that the risks in your business are properly

Ensuring an effective and

reduce the risks to your business

govern sentences given to

and its employees, but there is no

defendants found guilty under

guarantee that this will protect you.

It is correct that when a company

the Corporate Manslaughter

is found guilty of a health and

and Corporate Homicide Act

safety offence it must pay the fine

2007 and under the HSWA when

imposed by the court, the costs of

death is caused. According to the

the prosecution and of the HSE’s

Guidelines, in cases prosecuted

investigations. Even in simple

under the HSWA, the appropriate

Magistrates’ court cases, HSE

fine will seldom be less than

legal and investigation costs alone

£100,000 and may be measured in

please visit: For more information www.??????.com please contact Lisa Wilson:

can exceed £10,000. This is before

hundreds of thousands of pounds

0845 498 4893

any fine or your own legal costs.

or more.

lisawilson@eversheds.com

Importantly, from January 2009 new legislation gave courts the

E versheds L L P

themselves and fellow employees

For more information

In corporate manslaughter cases the appropriate fine will seldom

www.eversheds.com

The Eversheds global industrial engineering sector group

Precision engineered legal advice Eversheds is a law firm that gives you more than legal expertise. You receive expert advice combined with an in-depth knowledge of the industrial engineering sector. Our seamless worldwide service covers organisations in areas such as: automation, hydraulics, connectors, seals, advanced engineering, process, motion and flow control and diversified industrials. We understand your issues and look out for your interests, wherever you are based. The comprehensive range of products and services we offer is designed to tackle the challenges you face on any project of any size. With clear costs and real added value, this is a service engineered precisely to your needs. Robin Johnson +44 113 200 4860 robinjohnson@eversheds.com

www.eversheds.com ÂŠEversheds LLP 2010. Eversheds LLP is a limited liability partnership.

Manufacturinginaction Sponsored by TBM Consulting Group

Putting UK manufacturers under the spotlight Factory of the month

Joy Mining Machinery 94 Excavating success

Lorenzo Spoerry talks to this Worcester-based firm about the importance of investing in their workforce

precision engineering

a utomotive

Kostal UK 164

Howden Compressors 118 Will Stirling learns how capital investment and understanding future markets is helping this award-winning company stay at the top of its market construction

Its back to customer and overall business performance after a lean 18 months, says Martin Wood, MD of the UK division of German mechatronics and switches specialist it systems

Buchan Concrete Solutions 142

Modcomp 168

Tim Brown discovers how Buchan’s specialist pre-cast concrete division is assisting in the successful and timely construction of a variety of building schemes

Forming partnerships with its customers has been the modus operandi for Modcomp, a specialist in IT solutions for the manufacturing sector, for more than more than three decades stor a ge systems

p a ck a ging

Linpac Storage Systems 170

Constar 151 Tim Brown talks to Constar about the company’s UK operation in Leeds and the realisation of plastic beer and wine packaging

Michael Rudniak tells TM how the pallet racking and storage manufacturer has maintained advantage through CI and good relationships with clients large and small a erosp a ce a nd m a rine

wine processing

Constellation Park 156

Teknequip 174

Richard Lloyd tells Will Stirling how Europe’s largest wine bottling plant is preparing for 24/7 production and is targeting stellar output of 40 million cases of wine in 2011 control systems

Deima engineering 162 Mark Young talks to Deima UK about managing the implementation of assembly and test systems

Part of the Samuel Hodge group, Essex-based Teknequip specialise in the precision machining of commercial grade materials pl a stics

Scorpion Mouldings 176 TM talks to a family-owned company with 35+ years experience in technical plastic moulding and plastic injection component manufacture

All companies featured will be entered into the MIA Award 2010

Excavating success Lorenzo Spoerry talks to Dean Thornewell about operational excellence, lean thinking, and the importance of investing in your workforce.

Mining

Joy Mining Machinery

Driving

up to the gates of Joy Mining Machinery’s Worcester plant, the first thing you’ll see is a 39-tonne roof support: a massive hydraulic-powered arm rising from the ground like a prehistoric bird’s claw. Hundreds of meters underground, in places as far away as Australia and China, similar structures hold up thousands of tonnes of dirt and rock, allowing men and machinery to safely pass through tunnels to extract the coal needed to power the world’s towns and cities. Inside the plant’s reception area, large glossy photographs of coal miners at work hang on the walls, their blackened clothes and faces contrasting sharply with the clinical tidiness of the plant itself. Behind the posing miners, the roof supports are lined up one after the other so that only one side of the cave is exposed to the rotating disks chipping away at a black coal wall.

Op Ex is what we live and die by. We’re completely focussed on having a process whereby we’re continuously improving Dean Thornewell, Joy Mining

Operational Excellence Walking through the assembly facility itself along the delineated pathways, it is hard not to be struck by the extreme level of organisation. In every room, a Joy Business Systems performance board hangs on the wall. It details potential problems and solutions. Each “potential problem” is marked with a small yellow sticker and a white space is allocated to noting down the proposed solution. A red sticker or “potential show-stopper” indicates problems which might interfere with the assembly to such an extent that the part might be assembled late, or incorrectly. A green sticker means that the production process is operating as it should. Yellow banisters delineate each work station. Inside these, light blue is the prevalent colour theme, with barrels, table-tops and containers for spare parts-all arranged in identical rows are marked by number codes. These are an integral part of the 6s programme that the company undertook in 2005. Part of the purpose of this carefully colour-coded production line is to create that all-important first impression with customers: uniformity of both process and presentation is key to ensuring that the correct image is conveyed. In the inner cylinder manufacturing facility, before and after pictures with supporting graphs hang on the walls showing the improvements that have been made as a result of Joy Mining Operational Excellence program. “Op Ex is what we live and die by,” explains Dean Thornewell, Joy Mining’s operations director. “We’re completely focussed on having a process whereby we’re continuously improving.” A chart on the wall shows reductions in the distance that each piece has to travel. In the large cylinder manufacturing area, each part now has to travel 82% less than it previously did. Each cell in the assembly factory is clearly demarked by lines on the floor. Row upon row of identical work stations are fitted with the same shadow trays and the same tools.

Mining

Joy Mining Machinery

Joy shearer on AFCs

A wooden shadow panel on the wall indicates where each tool needs to go. A large broom is quickly replaced in the space which has been allocated for it. Over the last two years, the company has moved away from a batch-building process to a single piece flow incorporating lean thinking techniques. Output has doubled in these areas, although the workforce has remained constant. “We’ve worked really hard to implement successful process improvement teams. The guys have redesigned their own work area and adopted some basic process improvement techniques like process mapping. This is especially true in the machine shop, the valve assembly area and the solenoid cell area,” says Thornewell.

Operating under the banner of operational excellence, Joy Mining Machinery’s Worcester plant will soon finish off the second phase of its efficiency improvement plans. Phase one, which was completed in the beginning of 2009, saw a 30% increase in productivity. “Phase two will be completed at the end of the first quarter of 2011, and we’re expecting it to give us a similar productivity improvement,” explains Thornewell. The operations director has an approach to efficiency that stems from a very common-sense mentality. “I’m very much a believer that you have to have a clean working environment. That’s where it starts for me. If you can read the instructions correctly you know what you’ve got to do. You also have to have the right tools, and not hunt around to find them. You have that, and you’re two-thirds of the way to doing the job properly. Beyond applying those few basic principles, all you need is an extremely robust quality control process.” Every operator in Joy’s Mining Machinery’s Worcester plant is trained to check the quality of his process as he works, and

HILLFOOT MULTI METALS Doug Jackson, managing director of Hillfoot Multi Metals, has worked in the steel industry for 35 years and weathered three recessions so when he talks about being ‘cautiously optimistic’ as he looks ahead to the final quarter of this year and into next year you know they are not empty words.

“T

here is more confidence out there and some definite signs things are picking up which is why, with our shelves filling, we are in a particularly strong position to respond quickly to a customer’s demand,” says Doug, who joined Sheffield-based Hillfoot in 2002 and steered the company through and beyond its acquisition two years ago by the Murray Metals Group. “What we have done since we were acquired by what is one of the world’s most successful steel businesses is identify growing sectors, it is this that sets Hillfoot apart when looking be something more than just a traditional stockholder. Yes, fundamentally we are a stockholder but we want to be perceived as more than that and it is this determination that sets us apart from our competitors. In effect, we are not just a steel stockholding supermarket.” Doug adds: “We want to understand the supply chain that our customers are involved in so we can tailor our products to their requirements and, where necessary, offer a consultancy role. We want to have the product available that is specific to that customer’s market sector. In offering what amounts to a tailored service we are more than just a traditional stockholder.”

He is at pains to emphasise that Hillfoot Multi Metals is not just looking at the UK market where it currently has around 12 per cent market share, it also has its sights very much focused on overseas and the potential those markets offer. Major customers in the UK include the likes of BAE Systems and Bosch Group and while Hillfoot deals with around around 500 customers it is 100 core customers which give the company 80 per cent of its business. “Our starting point is always to offer quality metals at competitive prices, delivered to the customers’ specification and to this proposition we add innovation,” emphasises Doug. “Our flexible approach to the demand of industry very much includes product development to match a customer’s operation.” The industry, he adds, is only now just emerging the worst recession anyone can remember and which came just as the company was acquired by the Murray Group. “We are now beginning to see some growth in a number of sectors, including oil and gas and mining, and we want to focus on the requirements of those sectors and capitalise on the growth potential. So yes, there is more confidence

out there but it’s not that solid yet and there is not an awful lot of metal in the supply chain as things begin to pick up while our shelves our filling up. We are committed to innovation and working with our customers for the benefits of industry.” As part of its ambitious growth, Hillfoot has merged with Multi Metals. “This enables a wider product offering and geographical reach, as well as added value and a fabrication service,” says Doug. In communicating to the market Hillfoot Multi Metals’ serious intent to be more than a stockholder, a new company identity and strapline - ‘future driven industries’ - have been created, together with a website now highlighting advanced specifier and buyer information.

Published in association with: HILLFOOT MULTI METALS Herries Road Sheffield South Yorkshire S6 1LS Tel: 0114 233 1133 Fax: 0114 285 2802 Email: info@hillfoot.com Web: www.hillfoot.com

Mining

Joy Mining Machinery the company has people in every area whose responsibilities include watching that they do just that. At the end, the quality of every part is checked one more time. “We don’t just check the quality at the end but build it in as we go through the manufacturing process,” explains Thornewell. “Like a lot of companies we’ve worked extremely hard to adopt the processes of the car industry.” Radical changes to one’s working environment are sometimes difficult to accept, but Joy has tried hard to ensure that every member of the workforce is brought on board. Thornewell explains: “When you bring in a new line of thinking, you have to expect that some people will be nervous about making changes. What you need to do is understand the reasons for their reticence. My experience has been that 95 per cent of people will make the change – either because they want to, or because they understand that the business itself is changing. We’ve involved a great deal of people in our operational excellence programmes. We were extremely lucky that some influential people within the organisation were so focussed and enthusiastic about the programmes, and they were able to act as changed agents for the rest of the organisation. That becomes infectious, and more and more people are brought on board.” The managing director was involved in making a presentation to the group at the end of the exercise, and many of Joy’s senior leaders assiduously checked progress and unblocked existing problems. “Because of the high levels of focus from all levels in the business: from the shop floor through to our managing director and vice-president, we were really able to gain the traction and get people’s support and involvement. That meant that everybody in the business played a part and everybody felt responsible for moving the business forward” says Thornewell. In 2006, the company embarked on a 5S and, shortly afterwards, a 6S programme. “The facility as a whole really embraced the 6S idea, particularly its safety aspects. Each month all areas – approximately 50 – are audited by our in-house teams to a critical standard. It not only gives that all-important first visual impression, it is supported by real substance in various strategies to move the needle and take even more cost out of the Worcester operation,” explains Thornewell.

Joy’s Wigan offices, where powered roof supports are designed

Joy Mining Machinery at a glance Location

Bromyard Road, Worcester WR2 5EG

Sector

Mining machinery manufacture

Employees

266, including shop floor and supporting staff in Engineering, Operations and Finance.

Main Products

Powered roof supports are manufactured and assembled at Joy’s Worcester plant, where armoured face conveyors are also designed and manufactured.

Points of Interest

90 years experience as a global leader in the development, manufacture, distribution and service of underground mining machinery. Majority of sales are to other Joy factories around the world. Focus on company-wide operational excellence. Products must operate under extremely arduous conditions, relying on critical safety features and adherence. Contact: www.joy.com

Firth Rixson It is our passion to continually excel as a highly versatile engineering company, while providing exceptional quality products worldwide.

he origins of Firth Rixson date back to the early 1800’s in the traditional steel city, Sheffield. This foundation is highly respected and can be exemplified with the company’s prestigious ‘Made in Sheffield’ awarded title, which has made Firth Rixson the 150th company to join a vast amount of world class companies. Operating 12 manufacturing facilities globally at present, Firth Rixson provides unique product streams that cover metal and forging requirements from melt to near-net shape finished and tested components. The company’s product streams include: Seamless and Flash-Butt-Welded Rings, Open and Closed Die Forgings, Superalloy Cast Stick, Ingots and Billets, Forged and Rolled Bars, as well as Heat Treatment, Finishing, Logistics, Machining and Distribution services.

100

One of the Firth Rixson Forgings facilities, Meadowhall, Sheffield, houses unique forging operations equipped with extrusion presses with 5500-ton capabilities. The facility produces highly cost-effective extruded forgings up to 1500kg in weight with outside diameter ranges up to 460mm. The Meadowhall facility offers specialist design methods that eliminate the need for multi-part subassemblies as well as quality assurance including products with high integrity, strength and repeatability. Additional in-house services are also provided such as heat treatment, machining and destructive and non-destructive testing capabilities. Meadowhall has a long standing relationship with the mining sector and an in excess of 25 year’s partnership with Joy Mining Machinery. Supplying Joy Mining Machinery with quality

products for high production Longwall Systems such as Powered Roof Supports and Longwall Shearers. Firth Rixson’s operational leadership continues to implement improvement initiatives across each of the 12 worldwide production facilities.

Published in association with: FIRTH RIXSON Firth Rixson Forgings, Meadowhall

Tel: 0114 219 3001 Email: mhsales@firthrixson.com Web: www.firthrixson.com

Mining

Joy Mining Machinery

Joy’s record-breaking 62 tonne roof support

Joy Pedigree Joseph Joy, the founder of Joy Mining, was born in 1883 in a mining town in Cumberland, Maryland. He started working at the local coal mine when has was 12. By the age of 20, he had, after studying for a correspondence course in mechanical engineering, produced his first sketch for a unique digging and loading device. He began marketing his idea to potential investors, and, in 1930, founded the company that bears his name. Today, Joy Mining manufactures everything from longwall shearers to roof supports, face conveyors, stageloaders, continuous miners, batch haulage vehicles, continuous haulage systems and bolting products. The Worcester site is predominantly an assembly facility for Powered Roof Supports (PRS), which can be broken down into three distinct sub-assemblies. The fabrication of the canopy, base, rear shield and other ancillary fabrications are fed through steel usually sourced

from Corus Dalzell and Motherwell. Around 5000 tonnes of steel are required for a single contract. Approximately half the fabrication takes place in the UK, with the other half in Eastern Europe.

We as an organisation support our team and help them through that training programme, to the extent that they’ll receive nationally-recognised NVQ qualifications. That serves to improve the business and also to develop our workforce as individuals. It’s a real win-win situation because everyone is motivated to achieve Dean Thornewell, Joy Mining

The double telescopic leg, which supports the walls and roofs of the mines, consists of inner and outer cylinders and an inner member. Fabricated steel legs have traditionally been used as a lower-cost alternative, but should customer

101

Carver Engineering Services C

arver Engineering Services Limited is an established and well respected company specialising in the manufacture of bespoke fabrications and we offer a wealth of engineering capabilities covering all aspects which includes detailing drawings prior manufacture, all fabrication works, machining and surface treatment. Also we support our clients with 3 fully qualified mobile site teams, who can respond for routine works, demolition and turn key installations and breakdown services. Operating with a highly skilled workforce delivering engineering excellence, we are dedicated to providing our customers with products known for their superior quality and reliability. Our experienced staff offer a thorough, efficient and friendly service. Carver engineering services operates in accordance with ISO9001: 2008 and are LINK UP Approved. We have a constant investment programme to keep up with our ever changing world,

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Investing in our own people is both our strength and our future, also investing in new equipment and machinery to house within our easily

accessible modern factories. We are ideally situated next to the motorway network within the Midlands.

Published in association with: carver engineering services ltd Alan Flint: alan@carvereng.co.uk Peter Lees: peter@carvereng.co.uk Tim Shepherd : tim@carvereng.co.uk Web: www.carvereng.co.uk

Mining

Joy Mining Machinery specifications require it, forged steel legs can also be used. The forged solutions are currently sourced predominantly through the UK supply chain and the machining of the outer and inner cylinder remaining with Joy Mining Machinery because of the criticality of its operations. The hydraulic operation is done through a hand-held keyboard device located on each PRS. Worcester’s powered roof support products are usually sold to other Joy facilities around the world, and these are then shipped out to the end customer. The design process is done entirely inhouse in conjunction with the customer. Prototypes are also built and tested on site. With demand for coal picking up in China, Australia the United States

Supply Chain Excellence focuses on working closely with suppliers to reduce component lead times so that we’re able to order parts and get them quicker. We also want to reduce the cost on a gain-share basis so that both we as a company as well as our suppliers benefit Dean Thornewell, Joy Mining

A set of Joy powered roof supports

and elsewhere, Joy believe there are significant opportunities for companies in the sector to invest in the future. To that end, Joy’s Worcester plant has spent some considerable sums on the latest machinery: over £2.5m worth in the past 2 years alone, with purchases worth another £3.5m expected to arrive in the near future. Roof supports are held up with three cylinder: an inner cylinder, an outer cylinder and an inner member. With investments already in place for the manufacture of the inner cylinders, it seemed a natural step forward to begin manufacturing the outer cylinders. It is hoped that this will establish the Worcester plant as a centre of excellence for roof support leg cylinder machining. Thornewell explains the thinking behind the purchases: “These roof support legs are components that need to be replaced on a fairly regular basis. These

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Clitheroe Light Engineering Clitheroe Light Engineering is a leading manufacturer of manifolds and precision parts for the hydraulics industry.

LE is unique in its ability to tailor longterm production around customers needs. We operate a lights out unmanned lean manufacturing system comprising of 72 pallets, 5 HMCâ&#x20AC;&#x2122;s, 2 loading stations enabling us to compete on a global scale. This system operates 24 hours a day with continual manufacture offering customers advantages including: no set up costs reduced batches at no extra cost improved lead times competitive pricing ultimate flexibility and responsiveness

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CLE constantly invests in new technology and our strengths lie in automated manufacture. We work for a handful of blue chip companies aiming to create and maintain powerful customer relationships which are built on the foundations of quality and reliability. CLE is fully committed to implementation of its quality policy and

operates its quality system to BS EN ISO9001:2000 and AS9100 accreditation. CLE works in partnership with Joy Mining investing heavily in up to date technology enabling products to be manufactured efficiently whilst keeping costs down. Automated technology has helped to keep prices competitive on a global scale.

Published in association with: CLITHEROE LIGHT ENGINEERING Tel: 01200 422707 Email: info@clitheroelightengineering.co.uk Web: www.clitheroelightengineering.co.uk

Mining

Joy Mining Machinery investments give us an excellent basis to meet both the original equipment supply needs as well as the service market supply needs. The objective is to grow the business.” To that end, the company has consolidated a significant amount of space in the factory. These machines are at the heart of coal mining operations throughout the world. Using Finite Element Analysis and Design Failure Mode and Effect Analysis, Joy looks at potential failure mode, and weighs the severity and the probability of occurrence. Joy’s reputation in the mining industry is enviable through the use of stress-prone transverse welds, high strength steels and automated welding. Working on the basis that simplistic classical methods were no longer appropriate, Joy has sought to improve the life expectancy of its machinery through improvements in its bearing material.

Nationally-recognised qualifications The company has embarked on a training programme, bringing in agencies from outside the business and training its team in-house. Those team members then conduct process improvement training and lean thinking training right down to the shop floor operators. “We as an organisation support our team and help them

Supply Chain Excellence focuses on working closely with suppliers to reduce component lead times so that we’re able to order parts and get them quicker Dean Thornewell, Joy Mining through that training programme, to the extent that they’ll receive nationally-recognised NVQ qualifications,” explains Thornewell. “They can send off the work that they’ve done on the shop floor back to the examining board. That serves to improve the business and also to develop our workforce as individuals. It’s a real win-win situation because everyone is motivated to achieve.”

A minor shows the impressive scale of a peice of Joy Mining equipment

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Electroplating Specialists MSC is the UKâ&#x20AC;&#x2122;s leading Bronze Electroplating specialist, serving the Hydraulics, Oil, Plastics, Automotive, Food, Engineering and Mining Industries.

SC have been providing Electroplating excellence to the Hydraulics industries for over 40 years. Still based on itâ&#x20AC;&#x2122;s original site in Bolton close to the M61/M62 it is ideally situated next to the major motorway network. Committed to our Clients We are totally committed to satisfying our Customers requirements on quality, lead times and cost. MSC has considerable expertise and experience at their disposal. Our work ethic is to work with our Customers on all projects. The Company is a family run business with approvals to ISO 9001:2000 the Company undertakes a large number of Electroplating processes, Bronze, Chrome, Electrolytic and Electro less -Nickel, Zinc, Yellow, Clear and Black passivates, Olive Drab, Zinc-Nickel, Tin, Copper, Gold, Silver, Lead, Iridite NCP,Alocrom 1200 and 1000, Zinc Phosphate. etc to name a few.

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With our in-house machine facility for Grinding, Polishing, Honing, Grit Blasting and Heat treating we are able to offer a complete service. We regular take on Chrome plating work up to 6.8 meters max but through our approved suppliers we can take on larger projects. MSC is committed to a role of environmental leadership in all facets of our business. We fulfil this mission by a commitment to: Understanding of environmental issues and sharing information with our partners. Developing innovative and flexible solutions to bring about change. Striving to buy, sell and use environmentally friendly products. Recognizing that fiscal responsibility is essential to our environmental future. Instilling environmental responsibility as a corporate value.

Measuring and monitoring our progress for each project. Encouraging all partners to share in our mission.

MSC Limited is proud to be in partnership with Joy Mining and wish them all the best for the future.

Published in association with: MSC Limited Tel: 01204 528206 Fax: 01204 366877 Email: sales@msc.uk.com Web: www.msc.uk.com

Mining

Joy Mining Machinery

Joy Mining manufactures and assembles conveyors needed for mining processes

“All of our management group have been through lean training in a very detailed way. That includes line managers and supervisors on the shop floor who run the day-to-day activities, our team leaders as well as the people who assemble the roof supports and who operate machines. They’re all being trained in different levels of lean thinking and lean techniques.” The Worcester plant has machine shops, fabrication shops and assembly areas. The day-to-day tasks include cutting, grinding and the welding of metals to produce large fabricated items. Large gear boxes – some going up to 1000 horsepower and more – and sprockets for use on conveyors to pull chains are all assembled here. They also put together roof supports in four large fabrications, as well as machined cylinders that make up the leg cylinders. Roof support canopies can weigh up to 15 or 20 tonnes.

Measuring performance

Joy Mining speciales in roof support

Alongside its performance improvement projects, Joy Mining has developed a stringent, uniform tracking system to efficiently measure improvements. “There are, broadly speaking, three headings that we measure: cost, quality and performance,” explains Thornewell. “Within that, we measure our quality in-process, we measure the right-first-time at the end of the line and we measure the quality output during the manufacturing process as well.”

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Victoria Production Victoria Production are specialists in CNC multi-axis turning and milling, manufacturing for both the aerospace and commercial sectors.

or over 20 years, Victoria Production Engineering Ltd has continuously built upon a reputation for supplying a service offering technical capability, fast response and quality product. Continual improvement in capability and capacity has allowed the company to develop the ability to respond to customer requirements. An ongoing programme of investment ensures a progressive outlook and upholds the tradition of quality, delivery and competitive costs. The range of capacity available is designed to satisfy the demands of a varied and challenging market, able to cope with performance based on technical ability as

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well as cost and short lead times. Our skills and technical expertise in the processing of many materials are sufficiently developed to approach contracts with planned and controlled procedures, attempting to solve problems before they reach the machine. Making the best use of resource to satisfy component size and complexity, we offer reliable and repeatable processing of small or large batches. Price and delivery is enhanced by efficient use of tooling suited to the application. The companyâ&#x20AC;&#x2122;s experience with cutting technology, though already comprehensive, is constantly challenged and updated to use the most effective

innovations on offer. Quality is assured through accreditation to ISO 9100: 2003 BSI, Airbus UK, BAE Military/Civil/Regional Jet and Agusta Westland.

Published in association with: VICTORIA PRODUCTION ENGINEERING ltd Tel: 0161 320 1800 Fax: 0161 320 1810 Email: sales@victoriaproduction.co.uk

Mining

Joy Mining Machinery

Joy Pinxton facility

From the cost side, the company measures its performance to plan and against the budget for a particular job. “Then we measure the difference and say: ‘That job has been improved by 5% or 10%,’ and look very closely at the aspects of process improvement that we’ve undertaken” explains Thornewell. Beyond that, the cost of the consumables, of the labour and of the tooling are all measured. The organisation prides itself on being proactive in looking at cost from every single perspective in an effort to reduce it as much as possible and has made considerable improvements in this regard. In the fiscal year 20082009, the company saved 7% through the elimination of waste and through improved efficiency, and are on target to achieve savings of another 9%. Managers were assigned to measure the exact distances that materials

A Joy Mining vehicle used for hauling coal undergrounf

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Mining

Joy Mining Machinery had to travel along the assembly line and diagrams were drawn up to suggest new, more efficient ways of manufacturing and assembling products before work areas were re-layed. The cycle times for certain products have been minimised, the amount of stock on site has been reduced and new tools and machinery have been brought in.

A mine site Longwall mini build with a Joy AFC, shearer and set of roof supports

Improving the supply chain Alongside its improvements in operational excellence, the company has instituted a programme called Supply Chain Excellence. “We’ve been extremely focussed on working with our supply chain to improve our overall performance over the last 18 months,” says Thornewell. “Supply Chain Excellence focuses on working closely with suppliers to reduce component lead times so that we’re able to order

Demand for steel in China especially has slowed a little, and that has had ripple effects in the market Dean Thornewell, Joy Mining

parts and get them quicker – meaning that the company can manufacture them later and we don’t hold the stock on site. We’re also working very hard to reduce the cost on a gain-share basis so that both we as a company as well as our suppliers benefit.” The cohesion and interaction between the global strategic supply chain management and the local operational purchasing function is the essence of the company’s “matrix” structure. There is regular fortnightly communication between each sector of the business, with participation from every region. This is in addition to quarterly face-to-face conferences involving the supply chain. In order the enable successful execution of the supply chain strategy, each region submits its monthly performance figures on the objectives set out at the beginning of each year. The process of performance objective setting is done on an annual basis, with objectives determined and aligned to the global strategic direction, set at board level.

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Wath Group The Wath Group have 30 years experience in the manufacture of high specification cable assemblies, control boxes and industrial hose products.

ur design, engineering and supply management skills ensure our customers receive a quality competitively priced product delivered on time. Our products are used in the most exacting application in the military comms, fighting vehicle, power generation, nuclear and mining industry. Our manufacturing facility in South Yorkshire contains an air conditioned static safe facility and is of course fully ISO 9001 certified. Our staff are trained to IPC610/20 standards. Our flexible and true partnership approach to manufacturing, quality,

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delivery performance and customer service has earned The Wath Group the Joy Supplier of the Year award, an award of which we are rightly very proud. We have worked with Joy for over 20 years and currently supply Joy with between 7000 and 10,000 cable assemblies per year. In these challenging times having a manufacturing partner with experience, commitment and the financial security to ensure long term supply continuity is essential. Wath have a proven track record and continue to grow as more companies use our expertise to manufacture their critical assemblies.

If your company needs a true manufacturing partner with experience and the positive attitude we all need then give us a call.

Published in association with: Wath Group Pump House, Station Road, Wath Upon Dearne, Rotherham, England, S63 7DQ

Tel: 01709 876900 Fax: 01709 878863 Email: info@wath.co.uk

Mining

Joy Mining Machinery

Coal excavation in progress

Objectives are set for each level of the organisation, with the content of the objectives carefully tailored to each region’s specific nuance. Monthly supply chain reviews are undertaken by the operations director. Supplier awards are given out each year-one for the best performing supplier, and another for the most improved supplier (last year Wath Rubber and Plastics and Times of Wigan were the winners, respectively, of each award). Each supplier is assessed annually against its deliverables. Over the last 18 months Joy Mining Machinery UK operations have improved its supplier on-time delivery from an average of about 65% up to a peak of 95%. Working closely with the engineering department, value analysis and value engineering projects have been set up whereby individual components are looked at and the materials examined to establish whether or not the costs of its production can be reduced without compromising quality. ERP systems by SAP are used throughout every stage of the process. “We’ve worked closely with our suppliers to develop a system whereby they can see and use the supply end

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AWS Electronics Group O

perating across a wide range of sectors including oil, gas and mining, defence and aerospace, homeland security and medical and scientific instrumentation, the AWS Electronics Group manufactures electro-mechanical sub-assemblies and finished electrical products for their customers. “The principles of lean are applied right through our business,” explains Paul Deehan, the group’s CEO. “We’ve got a 6 Sigma master black belt director of continuous improvement who reports directly to me. A lot of companies sign up for these continuous improvement programmes, but don’t take full advantage of them when they get their award. We make sure we do.” AWS has three manufacturing facilities in the UK, one in Slovakia, a partnership in Malaysia and boasts an annual turnover of

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£35m. With such a geographically diverse operation, it is crucial that all parts of the business communicate in a fast and efficient way, explains Deehan. “To that end, we’ve installed a state-of-the-art Enterprise Resource Planning system. A lot of our products are mission critical to customers’ end product, especially Joy Mining’s. We work very closely with them on continuous improvement programmes.” The company has strengthened its management team as the company’s grown with executives from a range of sectors. “We sought people from highpressure, high-quality sectors like the automotive industry, defence, and the scientific instrumentation business.” Information flow is crucial to the smooth operation of AWS, says Deehan. Key Performance Indicators are established at group level and broken down for

each manufacturing site. Beyond that, individual performance indicators track the productivity of each member of the organisation. “Everybody knows where they fit, and it’s a great way to cascade objectives down to individual operators. Each of them will have targets to meet that match up to the top levels of the business.”

Published in association with: aws electronics group Tel: +44 07799 412771 Email: sales@awselectronicsgroup.com Web: www.awselectronicsgroup.com

Mining

Joy Mining Machinery

Roof supports as developed by Joy Mining are vital for minersâ&#x20AC;&#x2122; safety

of our SAP system. They are able to log into the system directly from their factories and tell us about their deliveries and on what days they will be delivering to us. An important part of our improved on-time delivery is suppliers taking ownership and responsibility for advising us of their deliveries. Thatâ&#x20AC;&#x2122;s really helped.â&#x20AC;?

Morale Joy Mining Machinery claims impressive retention rates. A modern, supportive working environment and the opportunity to work in sites throughout the world has kept its workforce motivated and interested, the company says. Engineers, senior managers and shop floor workers may be sent to work in Australia, China, the United States and elsewhere. Skilled people tend to stay within the business, mainly because of the range of job opportunities on offer, says Thornewell. An uncertainty in the price of steel is one of the problems that the industry as a whole has had to contend with. Demand has peaked and troughed over the years. In the last nine months the price of

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Mining

Joy Mining Machinery

Joy’s longwall system working underground

steel has been very low. Shortly before that it was very high. “We have been affected by fluctuations in its price,” explains Thornewell, “but we’re working very hard with our suppliers to keep costs down. We’ve got an advantage in that area because we tend to have extremely good relationships with them that are geared towards the long term. I think that prices have found something of a middling level at the moment. Capacity has, in my opinion, levelled off to probably where the demand is, and steel manufacturers have cut their cloth accordingly. Demand for steel in China especially has slowed a little, and that has had ripple effects in the market.” As for the future, the company has big plans. A number of vital projects are kept under wraps for now, but there are hints as to where it may be headed. “We’re working on new products for mining lower seams. High-volume projects are in the works,” Thornewell says. At present, the company is building a $20m service centre in Russia which will be project managed from the UK – a possible indicator as to where the company’s focus may be turning.

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Howden turns on top end compressor market A Scottish engineering company, with over 70 years of expertise in making precision rotary twin screw compressors and exporting these units to over 100 countries, is in the process of recruiting new staff to meet the growing demand globally for its products and services. Howden Compressorsâ&#x20AC;&#x2122; Jim Fairbairn and Peter Wallerstein tell Will Stirling how capital investment and understanding future markets is helping the award-winning company stay at the top of its market.

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Precision engineering Howden Compressors

January, Glasgow-based Howden Compressors had a nice problem. Following a beefy £4.5 million investment in new machine tools and the resilience of the company’s core markets – petrochemicals, oil and gas, refrigeration – to recession, business was up and the company needed to recruit. In fact, the headcount needed to increase significantly to keep the gas compression specialists on its growth curve. It was a problem that many manufacturers would have been grateful for. But according to managing director Jim Fairbairn: “Throughout the recession we have remained profitable and have continued to grow and invest in our business.”

We are trying to look five years ahead to understand where these compressor markets are going, with a high focus on technological development. You cannot sit still in this game or you’ll be overtaken Jim Fairbairn, managing director, Howden Compressors Part of the reason for Howden Compressors’ success is the timely injection of investment, financed by the parent company Howden Global, part of Charter International plc, to modernise its manufacturing operations. Howden Compressors’ growth is in part due to its specialisation. What ostensibly appears like a simple principle of compressing gas, using rotary screw compressors, belies a highly specialist engineering and manufacturing process. Howden Compressors is good at it – it is one of the top gas compressor manufacturers in the world. The company has had plenty of time to perfect its art – Howden was founded in 1854, with the compressor business starting in the late 1930s. More recently, Howden Compressors has gone through several changes to crystallise its position as a global leader. Capital investment was just part of the story which includes a business excellence programme using a team from Unipart Expert Practices, which is helping to better engage the whole workforce.

In the beginning James Howden, the Scottish engineer and inventor from East Lothian, started designing and supplying boilers and steam engines for the marine industry in 1854. Most famous for inventing the Howden

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Precision engineering Howden Compressors

Interior view of Howden’s global ‘centre of excellence’ facility in Glasgow for screw compressor design and manufacture. Total factory site covers 24,000 sqm.

forced draught system for steam boilers, his boilers and propulsion systems were used in many leading ships of the time including the RMS Lusitania. His engineering company grew through the Victorian and Edwardian era, perfecting new areas of mechanical engineering, like fully enclosed high speed marine engines that were later modified for use in land-based systems as the Howden-Zoelly steam turbine. In 1946, James Howden & Co Ltd licensed the screw compressor from Svenska Rotor Maskiner (SRM) in Sweden and was the first company in the world to commercialise the technology. Howden Compressors was born on Scotland Street, Glasgow, and over the next 70 years it grew steadily to a world leading position. Which company is the world leader? “It really depends which niche of the market,” says Jim Fairbairn. “We serve over a dozen niches and we all have different comparative strengths, in different niches. Howden Compressors has a

very strong position in high horsepower gas gathering and refrigeration for example.” Howden, bought by British engineering group Charter plc in 1997, has an annual turnover of over £600 million and is structured around the engineering design, manufacture and

It depends on your own R&D processes, but in this case we expect a £150,000 saving purely on tooling and time- saving of about three months on any R&D project Peter Wallerstein, operations director, Howden Compressors

support of its three main product groups: compressors, which covers screw, piston, diaphragm and turbo compressors, that are used in a range of industrial sectors such as oil and gas, petrochemicals and wastewater treatment; fans, an extensive range of engineered axial and centrifugal fans, and air and gas heat exchangers. The latter two product groups are mainly supplied to the power generation sector.

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Taming of the Screw

PC Freight Management transports all kinds of cargo for Howden Compressors Ltd, including screw compressors. Howden’s screw compressors are big. Not only are they big, they are heavy and their complex electrical components need maximum protection during transit. They are what is known in the transport industry as ‘out-of-gauge’ and they require skilled project management. Specialist cargo needing expert logistics management TPC Freight Management has been providing complete logistics solutions for Howden Compressors Ltd for years. They have transported and warehoused steam turbines, impellers, valves, rotor assemblies, large housings, fans, heat exchangers, compressors and all of their various components. By sea, by road and in some cases by air, the complexities of moving such cargo can never be underestimated. Some of the cargo is pretty straightforward to transport, but other items such as the screw compressors present a number of challenges. By road, due to their abnormal size and weight, they require additional permits. By sea they are subject to stowage restrictions to ensure safe

transit and maximum protection for their complex electrical components. This is where TPC Freight Management’s expertise in project forwarding comes in. Working closely with Howden engineers “This kind of complex transportation is a big part of our business and we enjoy the challenge each project presents,” says Grant Stupart, MD of TPC Freight Management. “We work closely with Howden’s engineers to make sure that we understand the products we are moving and what can go wrong. We know the issues; we know how to resolve them. Our Project Cargo team is part of their team, and I believe that we have one of the best Project Cargo Divisions in the industry.” In fact, it is this that is central to TPC Freight Management’s success - the ability to seamlessly integrate their own staff within their client’s organisational structure. TPC Freight Management’s dedicated Project Cargo Division provides bespoke transportation solutions designed to minimise client cost and concern - and they do it from the inside.

“We are particularly proud of our team,” continues Grant. “They provide a global service from an internal perspective, taking the pressure off our clients so that they can concentrate on their business without worrying about transportation issues.” Truly global TPC Freight Management specialises in geographic areas that are difficult to work in. Wherever cargo departs and whatever its destination - TPC Freight Management has it covered. With offices in Russia and the UK as well as a brand new base in Sweden, TPC Freight Management is a local company with a global outlook. So if you need to move a 39 ton load to the other side of the globe or a straightforward consignment down the road, speak to TPC Freight Management. They are completely dedicated to moving your freight forward.

Published in association with: TPC Freight Management Suite F6, Phoenix House, Phoenix Crescent, Strathclyde Business Park, Bellshill, ML4 3NJ

Tel: +44 (0)1698 501040 Fax: +44 (0)1698 501041 Email: info@tpcfreightmanagement.com Web: www.tpcfreightmanagement.com

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Precision engineering Howden Compressors The product and the business Howden Compressors’ manufacturing facility in Glasgow, which measures about 200,000 square feet, specialises in the design and manufacture of bare shaft rotary screw compressors that are used for a variety of demanding gas compression and refrigeration duties. These highly engineered components can form part of full compressor packages for clients worldwide, in sectors including the petrochemical, oil and gas, power generation and refrigeration industries. The other part of Howden’s screw compressors activities is a compressor packaging facility, also in Glasgow, which undertakes the complete engineering design, assembly and installation of skid mounted and packaged gas compression systems, using Howden twin screw compressor units at their heart.

Howden’s newly installed WFL Millturn lathe greatly enhances the company’s rotor production line and is able to “eliminate seven stages of operation in the rotor manufacturing process”

The focus has to be at the high value end of the market. We are not an air compressor manufacturer – we compress process gas, which means conforming to very stringent standards Jim Fairbairn, managing director Howden Compressors “We manufacture about 1,000 compressors every year, from small compressors to compressors that are the size of a car,” says Fairbairn, who with operations director Peter Wallerstein is responsible for both sites. “These vary in power from 20kW to 5MW. These larger units are used in applications including fuel gas boosting, propane cooling and coal bed methane, among other, niche applications.” Howden Compressors, says Fairbairn, has been at the forefront of building the best rotary screw compressors for over 70 years. It was the first company in the 1960s to introduce oil injection to screw compressors, which helps seal the compressor environment for more efficient gas compression. Among multiple improvements to the business in the last 24 months, “part of our continual investment in product R&D has allowed us recently to introduce new profiles in our screw compressors, to significantly increase their

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Complete machining at the highest level W

FL MILLTURN Technologies GmbH & Co. KG, Linz in Austria can proudly call itself the birthplace of complete machining centres. The producer of machine tools is considered to be the worldwide pioneer in the sector. Complete machining centres machine workpieces by turning, drilling, milling and any other technology of metal removal required. The WFL Millturn machines have been developed to conquer the machining of complex components and materials and have rightfully gained a reputation for the machining of critical components across a diverse range of industries. Together with agent Kyal Machine Tools Ltd., WFL reached a well known status in the UK market for machine tools. Huge variety With center distances from 2 to 10m and turning diameters from 520 up to 1500mm a suitable machine size for a wide range of applications is available. The “MILLTURN” was the first product on the market with full turning and 5-axis milling capabilities in one machine. Already in 1983 the machines were offered with B-, C-, X-, Y- and Z-axis as standard. Nowadays the MILLTURNseries is already produced in the 9th generation and there is still continuous development of new features. The latest generation of the MILLTURN series can be equipped with up to 9 NC machining axis. Beside its unrivalled versatility one of the key benefits however is the combination of extraordinary rigidity and highest precision. The unrivalled optional equipment that has been developed by WFL provides solutions for all machining tasks; this enables

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individual complex applications to be tailored to accommodate customer component machining requirements. ONE replaces several Where in the past several singleprocess machines were necessary to machine a workpiece, WFL’s Millturns can manufacture a workpiece in one single operation. Necessary transfers from one machine to the next, associated clamping faults and long waiting times in front of machines can thus be avoided. Time savings and increased quality are the most important factors for efficient and cost-effective production.

Worldwide presence At present WFL has many well known references in the whole world. Especially in the UK WFL high-tech machines are mainly used for producing components for the Engineering, Aerospace and Energy Industry. Together with Kyal Machine Tools Ltd., WFL is always considering the technological needs of its customers at the best. A well known international company of WFL’s in the UK is Howden Compressors Ltd., which produces complex compressor parts on their M120 Millturn/3000mm.

The machine tool for complex components The majority of MILLTURN users can be found in industries where complex precision parts are usual: like the aircraft industry, large diesel engine manufacturers, printing machine manufacturers, oil & gas industry, turbine manufacturers. Typical parts are aircraft landing gears, jet engine shafts, large diesel crankshafts, camshafts, connecting rods, pistons, printing cylinders, rotors, valves, etc. Due to its extremely powerful spindles and feed drives huge continuous chip removal rates of up to 2750ccm/min by turning and 1000ccm by milling of steel can be reached. One-hit machining reduces the production time of complex highprecision components significantly. WFL shows impressively that all customer requirements can be achieved.

Published in association with: WFL Millturn Technologies Wahringerstrasse 36 4030 Linz Austria

Tel: +43 732 6913-0 Email: office@wfl.at Web: www.wfl.at

Precision engineering Howden Compressors

performance and efficiency” says Peter Wallerstein, who is proud of the latest changes at Howden which includes a £4.5 million investment in the latest new machinery.

People focus – top to bottom People are key as well. “Adding to our expert engineering team, we have employed a world leading expert in screw compressor technology, Professor Ahmed Kovacevic from City University London, where he holds the office of Howden Chair of Engineering Design and Compressor Technology,” says Fairbairn. “He’s our research and development manager, in charge of a team of 12 people focusing on future R&D projects. The company is sponsoring two people through PhDs in screw compression technology at City University London. We are trying to look five years ahead to understand New markets where the markets Howden Compressors are going, with a high exports virtually everything focus on technological it makes. “There’s very development. You cannot little that stays in the UK, sit still in this game or Dr Ahmed Kovacevic just a few per cent,” says you’ll be overtaken.” was appointed the first Howden Fairbairn, just before flying Outside the most Chair of Engineering Design and out to Australia to meet senior engineering Compressor Technology at City clients. “We currently positions, in the last University London in 2008. export to around 50 three years Howden During his ten years with the university’s countries globally. Our Compressors has made School of Engineering and Mathematical focus is on working with a bigger and deliberate Design, Prof. Kovacevic has made big these diverse customers effort to engage the contributions to the teaching of engineering more closely, to try to workshop personnel, design at all levels, linking his teaching better understand where and indeed people in with industrial research. He is author or they want to go in the all departments, as well co-author of four books, over 120 papers future.” Fairbairn says as trying to understand and 50 industrial reports, and the recipient there’s only a limited the customers and the of seven ‘best paper’ awards. He also holds opportunity in the UK, so markets they operate several patents in the area of positive you need to look at the in better. displacement machines. growing markets like India, “People are the China and Asia-Pacific.” enterprise, and people Howden endowed the Chair of Engineering Design and Compressor Technology In March, the company respond to that kind of following many years of association with sponsored and exhibited leadership thinking – the City University London, much of it involving at the Coal Seam Gas value of leadership and Prof. Kovacevic who is currently undertaking Summit in Brisbane, communication has a research and development programme Australia and the company been emphasised,” says with Howden Compressors. works closely with Fairbairn. “That’s what Howden subsidiaries in we’re trying to bring in Australia, India and Russia. here, a culture of change Howden Compressors has supplied its equipment and and communication where people are services to major oil and gas clients, including BP, Shell, informed of the business purpose. Exxon and Chevron, as well as big energy utilities worldwide. Perhaps that had been lacking before. The managing director is keen to emphasise the And we’ve placed a huge focus on R&D importance to Howden of advanced manufacturing. “Our and a very strong focus on emerging focus has to be at the high value end of the market,” he markets,” he adds.

Engineering professor backs Howden Compressors

Her Royal Highness The Princess Royal being shown around the Glasgow factory by Roddy MacGregor, Howden Compressor’ Factory Operations Manager, during her visit to Howden Compressors in January 2010.

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Wakefield Acoustics Established in 1980, Wakefield Acoustics is a leader in the design, manufacture and installation of a wide range of bespoke industrial and environmental noise control solutions throughout the world.

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ur technical expertise and reputation for excellence has allowed us to build up strong relationships with many of the worldâ&#x20AC;&#x2122;s leading manufacturing companies across industries such as power generation, oil and gas, water and waste water treatment, steel manufacture, food anufacturing, aerospace, process industries and an extensive range of general manufacturing industries.

customers in solving complex noise problems and to assist with legislative compliance. Our products and services range from noise assessments and audits through to design, manufacture and installation of acoustic enclosures, rectangular and circular silencers, with process air and gas silencers, sound havens, acoustic doors and louvres, all available as discrete products or complete acoustic systems.

With industrial and environmental noise control becoming ever more stringent we offer a wide range of products and services to assist our

We operate from a modern 25,000 sq ft manufacturing facility with a constant investment programme in plant, equipment, processes and people. We

are ISO9001:2008 registered, operate latest acoustic design software as well as 2D and 3D AutoCAD technology. All our key business processes including design, manufacture and installation are undertaken by our highly experienced and highly trained staff. All installation staff are qualified to current and relevant safety standards, including CSCS. We are committed to excellence in all our operations and have an ongoing commitment to professional training and development throughout all areas of the business thereby continuing to deliver excellence to our customers.

Precision engineering Howden Compressors

says. “We are not an air compressor manufacturer – we compress process gas, which means we have to conform to very stringent petrochemical standards like API.” Do customers pay a premium for this product, especially as it is made in the UK? “Yes sometimes the product can command a premium, but not always, it can be price sensitive. It depends on the application and the product. But our goal is to be at the high value end of the market.” Fairbairn and Wallerstein support the wider industry approach of developing advanced manufacturing capability in the UK. “We don’t want to get into the lower end of the market, where it’s all about price and volume and we’re not interested in that, it’s not a place where we would be comfortable.”

The product As part of its R&D activities, the company has recently developed a new profile design for its rotors. “A rotary screw compressor uses two rotors, a male and a female, which operate like gears,” says Peter Wallerstein. “In the past 12 months we’ve moved from an older, more traditional design, to the latest technology rotor profile. This has enabled us to drive significant improvement in compressor operating efficiency. This development has taken about twelve months.”

Capital investment – Howden invests for future-proofing In January 2010, Her Royal Highness Princess Anne visited the Craigton screw compressor factory to give a royal seal of approval to a range of newly installed high technology manufacturing production equipment. This visit was proudly celebrated as a culmination of two years planning and £4.5 million of investment in machine tools and new processes. Four key pieces of equipment were involved:

WFL Millturn lathe Perhaps the stand-out piece of kit, the Millturn lathe “has allowed us to eliminate seven stages of operation in the rotor manufacturing process,” says operations director Wallerstein. “It’s effectively a lathe with live tooling of a very robust and effective nature. The live tooling is basically as effective as a conventional milling machine.

Compressors – a Howden speciality With almost a century of experience in the manufacture of specialised compressors, Howden’s expertise is based on innovation by well known names: Burton, Corblin and Donkin. Howden supplies four types of compressor with different operation principles, each built into a complete skid-mounted package, with all necessary ancillary equipment, control and monitoring systems. the process gas piston compressor developed by W. Burton the Donkin turbo-compressor, developed by the Bryan Donkin Co, based on the Rateau principle the metal diaphragm compressor invented by Henri Corblin in 1916

the screw compressor. Howden became the first licensee of this technology from Svenska Rotor Maskiner (SRM) in Sweden in 1938

How a screw compressor works

A rotary screw compressor is a gas compressor which uses a rotary type positive displacement mechanism. Rotary screw compressors use two helical screws, known as rotors, to compress the gas. In a dry running rotary screw compressor, timing gears ensure that the male and female rotors maintain precise alignment. In an oil-flooded rotary screw compressor, lubricating oil bridges

the space between the rotors, both providing a hydraulic seal and transferring mechanical energy between the driving and driven rotor. Gas enters at the suction side and moves through the threads as the screws rotate. Clearances between the threads decrease and compress the gas. The gas exits at the end of the screws. The effectiveness of this mechanism is dependent on precisely fitting clearances between the helical rotors and the chamber for sealing of the compression cavities. Source: Howden Compressors and Wikipedia

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Innovation in iron Russell Ductile Castings specialises in high complexity, high integrity castings up to 6 tonnes for a wide range of manufacturing industries.

e are proud to be a long standing supplier of complex high integrity iron castings to Howden Compressors, who demand the highest standards of product quality on-time. Our partnership with Howden covers the supply of critical castings for their range of compressors including main cases, covers, cylinders and slide valves. Established for more than 25 years, Russell Ductile Castings provides iron casting solutions to manufacturing industries worldwide. Utilising an experienced and highly skilled workforce, we provide cost effective solutions for our customers through

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working in partnership. As a full capability supplier we can also offer a turnkey service, where finished machined ready-to-assemble components are supplied. Volume flexibility is a key strength of the business; our minimum batch size is one piece. We are capable of producing ductile iron castings up to 6 tonnes. As an ISO9001: 2008 accredited foundry, we are also proud of our capability to produce castings to the most demanding specifications.

solidification modelling to optimise casting geometry and optimise overall cost. Earlier involvement by Russell Ductile Castings gives the best value for money and our involvement in the design process can greatly aid cost-efficiency.

Our experienced technical team can also work with our customers early in the design phase, using computer aided

Tel: +44 (0)1724 862152 Web: www.russellductile.co.uk

Russell Ductile Castings... make us your iron casting partner.

Published in association with: Russell Ductile Castings Ltd

Precision engineering Howden Compressors

He continues: “With the lathe, on the centre axis we manipulate the rotor, keyed in with a radial feed, which allows us to rough mill the profile of the rotors without the need for dedicated tooling. We can finish-turn the shaft and mill the profile in one operation. Before this machine, we would have to manually change the tooling and physically move it from one machine tool to another, so it has saved a great deal of time.” Howden Compressors chose the Austrian WFL Millturn machine. “We are very happy with the WFL Millturn unit, and we were involved in the development process of this machine,” says Fairbairn.

Holroyd rotor profile grinding machine Howden Compressors has had a long standing relationship with Rochdale-based machine tool manufacturer Holroyd, and Howden was Holroyd’s first customer for a new thread rotor grinding machine tool. “Historically rotor profiles have been thread milled,” says Wallerstein. “Now, in conjunction with Holroyd, we’ve developed this process from thread milling to thread grinding. It allows us to introduce statistical process control, or SPC, into our manufacturing that previously had required manual inspection of each rotor profile.” This new manufacturing process has helped the new compressors achieve substantial improvements in operating efficiency. The investment in this machine tool will allow Howden to develop its own profiles without the need for investment in individual, single purpose tooling. What are the key benefits? Wallerstein says: “It depends on your own R&D processes, but in this case we expect a significant saving purely on tooling, as well about three months of time spent on any future R&D project.” The new machine tool improves accuracies in the compression process by minimising the contact between the male and female rotors, therefore reducing friction and wear.

These images help show the high accuracy and tolerances achieved by Howden in the manufacture of its hi-tech design of screw compressor twin rotors.

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Helping Howden Deliver Can Lean principles developed in high volume industries really be applied to a project-oriented business? Unipart Expert Practices took up the challenge to help Howden achieve exceptional operational performance.

owden are a global engineering business specialising in air and gas handling and their customers are as demanding as any other manufacturer’s, requiring shorter lead-times, competitive pricing, and outstanding quality and reliability in service. To assist them in meeting these demands, Howden called on UEP to undertake a global programme to truly engage its workforce in improving its performance and, by extension, customer satisfaction. Engaged to Sustain Beginning at three pilot sites across Europe, UEP’s practitioners engaged

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Howden employees at all levels of the organisation with a range of Lean tools and techniques that have enabled them to analyse their work processes and empowered them to continuously improve the quality, cost and delivery of their work. The result is a motivated workforce that works as a team, has the skills to sustain and improve its processes and performance, and has a clear focus on the organisation’s objectives and the customers’ requirements. Due to the significant advances achieved at the pilot sites, UEP is

now assisting Howden to roll out the new ways of working to deliver similar cultural change at its sites worldwide.

Published in association with: Unipart Expert Practices Alan Kelly Tel: 07909 875 242 Email: alan.x.kelly@unipart.co.uk Web: www.unipartep.com

Precision engineering Howden Compressors

Giddings and Lewis horizontal borer A new twin pallet horizontal borer made by US machine tool maker Giddings and Lewis. “This machine has reduced component cutting time by 15 per cent and has improved accuracy in bore positioning, helping to eliminate the need for rework.”

Global co-ordinate measuring machine A new global CMM. “Co-ordinate measuring machines allow us to fully inspect component parts,” says Wallerstein. “This has resulted in a considerable improvement in first time pass rate at compressor testing, which now averages around 96%-97% accuracy from a previous pass rate accuracy of 87%.” As well as the new CMM, the first three machines all incorporate Renishaw probing techniques in their processes to minimize operator intervention.

Manufacturing process improvements Together with essential equipment upgrades, Howden Compressors has embraced a business improvement programme, working with a team of consultants from Unipart Expert Practices (UEP) the consultancy division of automotive components manufacturer Unipart. Fairbairn says Unipart’s manufacturing background has helped them to empathise with Howden’s unique needs (see box).

Alan Kelly at UEP Lean challenge within an engineering-centric environment Alan Kelly of Unipart Expert Practice explains how lean was applied to Howden Compressors. Howden is not a “traditional” manufacturing company as a large area of the business is focused on engineering, project management and controls. As a result, the challenge was not so much implementing Lean within the manufacturing environment but within the engineering, design and office areas, where Lean is rarely seen in the manufacturing sector. This presented significant cultural challenges as many of the people either had heard little about Lean before or thought that it only applied to factories, so effective engagement and training were crucial. UEP began by identifying a number of Howden’s key people who were given thorough training to become champions of the Lean approach within the organisation. Our practitioners then worked alongside these champions to engage the teams in each area in a range of Lean tools and techniques, including waste identification and elimination, value stream mapping, problem solving, standard work and effective communication and teamwork. The results of this effective engagement approach were dramatic, including a reduction in engineering design lead times from several days to only several hours, significant reductions in late documents and document errors, and increased productivity with more worked hours on projects per person. As performance increased, so did customer service (via reduced lead times for projects and projects on time), whilst the decrease in errors and document rework cut costs. UEP will continue to support Howden with its global roll out to all sites in 2010 and 2011 with a clear focus on building Howden’s internal capability to continue to implement and continuously improve the new ways of working long after our practitioners have disengaged from the business.

A key part of the recent £4.5m investment in new production equipment, this twin pallet horizontal borer ensures the precision machining of Howden’s screw compressor casings.

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PTG Precision Components Holroyd Precision Ltd Howdens & Holroyd Machine Tools & Precision Components

lmost 60 years of history exists between Howden Compressors and the PTG/Holroyd group of companies. In 1953, the very first dedicated machine tool for the production of helical Rotors was designed and built by Holroyd and was purchased by Howden Compressors to provide them with new production technology to ensure that they too, remained as one of the leading rotary compressor manufacturers around the world. This cemented a relationship that has undergone the test of time, with Holroyd remaining as one of the key machine tool suppliers to the Glasgow factory where the “air ends” of the compressors are manufactured. A series of machines have been supplied over the last half a century, including specialist high precision Milling machines and Cutter Sharpeners, in both

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manual and latterly, CNC versions. As technology advanced and Holroyd produced CNC grinders, these to have been adopted into the manufacturing philosophy at Howdens. Indeed, some of the older machines remain in operation today, having been upgraded with the latest CNC controls by Holroyd. The relationship though does not simply rely on the traditional machine supplier/ customer liaison, as Holroyds’ Precision Components company fully supports Howdens with any capacity restrictions that they face and subsequently manufacture rotors on their behalf to satisfy their burgeoning demand. Howdens have embraced all the new technologies that have been developed for Rotor manufacture and

have relied heavily on Holroyd to support this development and establish the collaborative nature of the relationship that exists today, for machines and rotor technology and this relationship will continue at all levels within the business.

Published in association with: PTG Precision Components Tel: +44 (0) 1706 526590 Fax: +44 (0) 1706 353350 Email: info@ptg-components.com Web: www.ptg-components.com Holroyd Precision Ltd Tel: +44 (0) 1706 526590 Fax: +44 (0) 1706 353350 Email: info@holroyd.com Web: www.holroyd.com

Precision engineering Howden Compressors

CAD drawing illustrating a typical skid-mounted compressor packaged unit. The screw compressor (identified as the dark blue component) sits at the heart of such gas compression systems.

Images show examples of complete packaged screw compressor systems, designed and built by Howden’s specialist process screw compressor company, Howden Process Compressors, at its factory in Renfrew, Scotland.

“We introduced Lean techniques about five months ago,” says Wallerstein. “We use Unipart as a business improvement consultant and advisor and they assist us implementing Lean to industry best practice. It’s important to emphasise that they’re one part of our strategic improvement process, engaging the services of UEP to help us introduce Lean best practice throughout the enterprise – beyond manufacturing, into administration and the whole organisation.” The Lean programme includes writing and maintaining new standard operating procedures (SOPs), and a lean champion has been appointed on site. Most of the SOPs have been devised to eliminate waste.

Legacy of recognition In October 2009, Howden scooped three awards at the annual Bank of Scotland Glasgow Business Awards ceremony. These awards were Most Outstanding Business, Best Performing Business with over 25 employees, and Excellence in Skills and Learning. This achievement followed the Scottish Engineering Award in May 2009 for the contribution the company made to raising standards within the engineering sector in Scotland.

Howden says it reflected the strategic planning, hard work and technological developments that brought the business

The new Millturn lathe, part of our £4.5 million capital investment, has allowed us to eliminate seven stages of operation in the rotor manufacturing process Peter Wallerstein, operations director, Howden Compressors to such a strong market position. Following the awards in Scotland, Howden won the Best Company at the British Chambers of Commerce Awards late last year.

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Precision engineering Howden Compressors

Recruitment, skills, costs, industry standards Howden Compressors is growing and needs to recruit. “We’re recruiting at the moment and expanding the direct workforce by close to 35 per cent. We’ve significantly grown the business in the last 12 months,” says Fairbairn. The recruitment drive began in July 2010, Howden has had 600 applicants to date and it has thus far hired factory operatives, engineering and business development staff – showing

that a job with a Glasgow-based precision engineering company in 2010 is still highly coveted. On finding people with the required skills, Fairbairn says it’s less of an issue now to find senior engineers than a few years ago. He added. “During the last decade with more money being loaned, businesses were growing in a boom time. Due to the recent economic downturn we are finding it easier to find qualified staff than we did say three or four years ago.” Fairbairn says he is more concerned now that the price of raw materials will shoot up in the next 12 months. “We expect to be fine for labour, but the world is starting to wake up and people are buying and stocking more.” Howden’s main raw material is steel, and it uses some recycled cast iron as a raw material.

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Precision engineering Howden Compressors Since the new business improvements began in 2008, the company recycles 85% of its waste from the factory. Energy cost management is another area where Howden is finding savings. “We’ve got very good cost management now, including electricity costs,” Fairbairn says. “We’re working on a new deal on forward energy purchasing to keep costs stable”. He adds, “We’re now accredited to ISO9001, ISO14001, OHSAS18001 – the full house,” says Fairbairn. “Many of our customers now ask for ISO14001 as greener manufacturing practices are being recognised more by clients in the sectors we operate.”

People are the enterprise, and people respond to that kind of leadership thinking - the value of leadership and communication has been emphasized Jim Fairbairn, managing director Howden Compressors Howden has established the Howden Academy, a commitment to give job specific training to up to 100 engineers annually, in conjunction with Glasgow Caledonian University. And Howden Compressors’ in-house training includes the sponsorship of two PhD students who are researching advanced screw compressor techniques. There is also knowledge transfer within the group. Peter Wallerstein is a member of Howden’s global supply

Images show the twin rotors being installed during the screw compressor assembly process. The compressor shown in these images is one of the largest screw compressors of its type in the world.

This image shows a fully assembled and tested large capacity Howden screw compressor, ready for shipment to a major gas project in India.

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Precision engineering Howden Compressors

chain core team and best practice from his department is shared with other departmental heads across the group, and that health and safety best practice is shared between H&S managers who meet annually.

Focus on the needs of future markets Howden Compressors’ new company philosophy, forged from its investment programme, its strong new markets and its lean programme, is to look ahead. It wants to better understand the changing needs of screw compression customers globally, keep improving the product at the high end of the market and further engage and communicate with its employees. Jim Fairbairn says: “If we had not invested in this machinery last year, we’d be on a revolving door going out. This is advanced and sophisticated engineering with global applications, exactly where good UK companies have a future. If we don’t continually invest we will be out of business.”

For more information on Howden Compressors visit: www.howden.com

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At its factory in Cheshire, Buchan Concrete Solutions produces the core structures for major construction projects. As Tim Brown discovered from managing director, Steve Parker and manufacturing director, Kevin Parker, Buchanâ&#x20AC;&#x2122;s specialist pre-cast concrete division is assisting in the successful and timely construction of a variety of schemes including schools, student accommodation, hotels, industrial/commercial buildings, hospitals, prisons, private and social housing and underground projects throughout the country.

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The

speed with which some major construction projects can be completed is often mindboggling. Sometimes it appears that whole sections of construction appear almost overnight. One day there is a vacant site, and the next the building has taken shape. Undoubtedly an extremely dedicated workforce is partly responsible, but no extent of elbow grease will raise a major building in a day. If, however, the bulk of the primary construction is completed off-site, then safe, speedy and efficient construction is completely feasible. Enter Buchan Concrete Solutions, part of the specialist civil and structural engineering group, Roger Bullivant.

Construction

Buchan Concrete Solutions Precast concrete crosswall panel lifted from battery mould

Buchan’s major focus is the off-site design, manufacture and construction of precast concrete units for use on building super structures and underground applications. Over the last 60 years, the company has developed as one of the largest precast operators in the UK and is able to count all the major UK contractors as clients. Today, Buchan is known as a specialist in the design, manufacture and installation of bespoke precast concrete solutions.

Rock hard reliability Developing the business from its early beginnings, Buchan has embraced design as one of the core facets of the business, creating individual solutions

Buchan Concrete Solutions at a glance Address

King’s Lane, Byley, Middlewich, Cheshire, CW10 9NB

Contact

01606 843500 info@buchanconcrete.com www.buchanconcrete.com

Sector

Construction

Turnover

£20bn (Eli Lilly and Company, Globally)

Core geographical markets

Key product/s

Pre-cast concrete solutions

Sector experience

Accommodation, education, defence, health, retail, water, transportation

Niche

Through the incorporation of high-level design and the use of the UK’s only mesh machine, Buchan specialises in highly re-enforced bespoke pre-cast concrete solutions. to meet specific customer requirements. The Buchan site encompasses a range of specialised equipment which allows the company to tailor the construction of the concrete panels to the needs of the client. Through consultation with the architect and the use of 3D CAD software, the company’s design team is able to take into account windows, doors and even M & E service runs, including underfloor heating and build such specifications in to the manufactured units. “We have the only fully automated steel mesh machine in the UK,” says Steve Parker. “With this we can create a bespoke mesh which, with the assistance of our design department, allows us to place the steel reinforcement where we need and gives us a value engineering edge when it comes to supplying our finished product.” In addition, using standard mesh creates a great deal of waste as it needs to be cut to size. According to Steve, having their own machine produces a saving of between £100,000 and £150,000 per year just on waste mesh, an important factor when sustainability is a key driver to the client.

Design and deliver Successful delivery is of paramount importance to Buchan and the company ensures that the contractor is involved at every stage of the process. “When we are working on a major project,” says Kevin, “while the design is our responsibility, the client may have a number of their representatives including designers and the M & E subcontractor in our factory collaborating to make sure the project is delivered correctly. Some projects are straight forward and easy to deliver whilst other larger projects are more of a partnering agreement to produce the complex final solution.”

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Construction

Buchan Concrete Solutions

The Crowne Plaza Hotel, Manchester

Following the period of consultation and design approval processes, manufacturing drawings are completed and the reinforcement schedule is formulated. The product is laid out on steel flat beds; tilt up tables or battery moulds and the mesh cages produced are applied. The concrete is then poured and product is ready to lift the following day. “We work on a just in time basis,” says Kevin, “which allows us, with our in-house design team, to easily respond, innovate and make changes prior to production.” This is also of considerable benefit for any project of a logistically difficult nature. According to Buchan, there are any number of benefits which come from

using precast concrete units, but most of all the quality of the precast concrete product produced is simply much higher. In addition, says Steve, “The speed with which the

The speed with which the pre-cut concrete can be delivered is much faster and you eliminate waste, the need for scaffolding and the associated health and safety issues Steve Parker, manufacturing director, Buchan

precast concrete can be delivered is much faster and you eliminate waste, the need for scaffolding and the associated health and safety issues. With regards to health and safety,

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Solutions for the Assembly Since long Schnell has automated the processing of the most common cages thanks to “GTM” and “IDEA”, but has recently introduced two new solutions in order to meet the latest requirements. A- “MULTI ASSEMBLER” able to assemble flat structures (electro-welded meshes) or bent structures (plinths elements, baffles, bent meshes) for welding, even with bars of big diameter (up to 26mm). “MULTI ASSEMBLER” can easily assemble non-standard products (special meshes, walls septum, bended structures either on one or both sides) most used for precast concrete or public works. It is fully modular and characterised by very short setup times; this plant is particularly suitable for the production of small and very small batches of wire mesh. The machine can be equipped with useful accessories such as automatic cross-wire loader (in case of flat meshes), evacuator and a finished product stacker. The benefits are so obvious that it is easy to foresee a

rapid spread of new Schnell “MULTI ASSEMBLER”. B- “SPIREX” able to realize a continuous spiral, of new and patented solution. This spiral is named CONTINUOUS STIRRUP WITH VERTICAL ARMS AND VARIABLE PITCH and replaces the traditional stirrups in the cages. Unlike the traditional spiral, the vertical arms of the “continuous stirrup SPIREX” truly reflect the position of the traditional stirrup, whose arms are perfectly orthogonal to the main reinforcement, leaving the development of the pitch (variable on demand) onto the divergence of the horizontal stirrups. The reinforcement is more resistant to the shear effect, as established by

the calculation of the engineer. Such characteristic makes SPIREX really suitable for the reinforcement beams. This machine also produces the spiral with the pitches established by the project and compresses it, making a small package reducing 10 times its dimensions during transport into the yard. A 60cm package becomes a 6mt spiral once unfastened. Once unfastened the spiral comes to the original length and stirrups are already in the right position – this way the bars can be inserted only in few points saving time in the final phase. These are the advantages of the “SPIREX”: 1. the final beam is stronger than the traditional one; 2. this system meets the operators requirements for vertical arms to be actually vertical; 3. very low sizes during transport (60cm for a 6mt beam); 4. accuracy in the pitch between stirrups; 5. reduction in the number of stirrups to tie (5 times lower than the traditional system) and consequent saving of time and cost of assembly; 6. the assembly of two or more spirals allows the quick production of Tand L- shape beam , joints for parapets, etc. Spirex can also produce traditional spirals (provided with pitches on each side) suitable for vertical structures (piles and pillars) and single stirrups, operating like a normal automatic stirrup bender.

For further information please contact : P.F. LA ROCHE & CO. LTD. UNIT 11 & 12 DANES ROAD INDUSTRIAL ESTATE ROMFORD ESSEX RM7 0HL

Tel: (0044) 1708 730 488

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Construction

Buchan Concrete Solutions A Buchan Solution Case study: John Perryn Primary School, Ealing The brief: Buchan Concrete designed, manufactured and erected the precast concrete structural components for the John Perryn Primary School, for main Contractor Willmott Dixon. The construction of the new school building replaced the Victorian school that, whilst still in use, was partly demolished to release space for the new school to be built. The design combines a 420 pupil Primary School with 50 place nursery and Sure Start Children’s Centre that aims to realise the vision of the School through a flexible and adaptable arrangement of formal teaching rooms, connected and counter poised by more informal gathering and learning areas. The solution: The design of the school required flexibility and this has been facilitated by Buchan through the use of precast portal frames for the school structure. These were 6.5 metres long and some 3.6 metres in height, being delivered and installed as a single unit. The panels were lowered into position and carefully aligned with the aid of lasers, before the holding down bolts were finally tightened and the series of wire loops set into adjoining ends were spliced with a reinforcing bar and grouted. The solidity of this solution not only offers aesthetic benefits but also contributes significantly to the insulation properties of the building.

John Perryn Primary School, Acton, London

Internal shot of John Perryn Primary School

The upper floors were designed with flexibility in mind, with the corridor walls to each class room being constructed of light weight partition, giving the school the flexibility later, if required, to dismantle them relatively easily to utilise the space in a different way. Willmott Dixon asked Buchan to deliver a structure of such precision that the cast surface would predominate as the final finish internally. This was achieved by using Buchan’s battery mould manufacturing process with steel face shuttering on all internal sides – a process producing a very high quality finish – enabling a straight paint finish to be applied directly onto the concrete surface. A total of 479 units were erected by Buchan’s own erection team at a total of 16 no. units per day during the erection period with a reduction of one week on the contract programme.

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Construction

Buchan Concrete Solutions within the factory we have static control. On a construction site it is much more fluid as people are constantly moving around which creates more risk.” Of particular importance is that the structures are extremely stable – walls are structurally joined by reinforced in-situ concrete joints, which transfer all loads to the foundations. Horizontal internal and peripheral ties, together with vertical ties, ensure the buildings are robust and low maintenance. The Thermal Mass properties of concrete can be used to reduce heating costs within buildings, providing a consistent internal climate. The structures are rapidly assembled on site by Buchan’s own experienced erection teams, providing a quick and safe solution, ensuring that overall customer satisfaction is delivered.

Ongoing development Integral to being a part of the Roger Bullivant group, says Steve, is the culture of continuous improvement and innovation which is in place at Buchan. “We are always looking at different ways of improving the way we operate including the use of different types of concrete mix and different shapes of steel reinforcement. As part of our internal value engineering process where possible we will reduce the steel content of a unit, which is easier for Buchan to coordinate, was we operate our own mesh processing facilities. The production management are always looking and coming up with innovative ideas and we also encourage our external sources to add to this process.” Kevin Parker says the use of precast concrete offsite manufacture is continuing to grow in the UK construction industry. He says benefits including composite panels, a variety of facade colours and finishes, improved speed of project construction, the reduction of onsite costs and the management of health and safety risks cannot be ignored. With its proven track record, the advantage and flexibility of precast concrete, and the ability to offer a complete bespoke solution that varies according to scale and design, Buchan will continue to invest in research and development programmes that enable it to adapt and meet the ever-evolving needs of the construction industry.

Aerial photograph of Buchan’s Head Office in Byley, Cheshire

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Cordelle Precision Engineering Ltd Cordelle Precision Engineering Ltd, based in the heart of the Midlands, produce precision components for many industries including automotive, pharmaceutical, bottling and packaging industries, both in the UK and abroad.

ordelleâ&#x20AC;&#x2122;s customer base includes many blue chip companies, including Coca Cola, Britvic Soft Drinks, Constar International, Central Bottling International Ltd, Reckitt Benckiser, Cott Beverages Ltd and Eriks Industrial Services Ltd. All the companies have their own exacting requirements on a wide range of components and sub assemblies, which Cordelle are able to fulfil. Cordelle offer a 24 hour, 7 days a week service, encompassing one off or volume production. We couple

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competitive pricing and delivery with a very high standard of workmanship which our customers have come to expect from us. ISO 9001 registered and with its own fully equipped inspection department, Cordelle manufacture many items including collets, vent tubes, capping chucks, cap spinners, filling valves and neck supports. Cordelle are always keen to invest in new equipment and processes to support our customerâ&#x20AC;&#x2122;s programme requirements.

For further information on how Cordelle can help you, please do not hesitate to contact us via the methods below:

Published in association with: Cordelle Precision Engineering Ltd Tel: 0121 706 0525 Fax: 0121 706 3551

Packaging Constar

The complete

package Constar is a global packaging manufacturer specialising in the production of PET plastic bottles, preforms and closures. Tim Brown talks to vice president of European operations, Chris Phelan, about the company’s UK operation in Leeds and the realisation of plastic beer and wine packaging.

The

provision of a full service offering from conception to delivery is an operational principle at Constar. The company strives to satisfy the requirements of any new packaging project so as to be able to design, develop and manufacture not only the container, but also the lid. In essence, it might be said that Constar provides the complete package. This onestop-shop approach provides the company with a distinct advantage over many other specialist operators, and has played a significant part in the company’s success.

The benefit of plastic Polyethylene terephthalate (PET) is a thermoplastic polymer resin used in beverage, food and other liquid containers. Phelan considers the company’s biggest strength to be the unique developments it has made with regards to PET and the creation of its patented products. He says that the Constar packaging materials are as good, if not better, than any competing substances including glass and feature a host of impressive added benefits. “We

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Guangzhou Huayan Precision Machinery Success Originated from Continuous Innovation

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he company is a leading PET preform injection mold and machinery manufacturer in Guangzhou, China. It has been serving in the field for 15 year. The company is ISO9001 certified and its equipments meet CE standard. It is a hightech enterprise recognised by Chinese Government. Owing to continuous investment in R&D and advanced machining center, the high quality equipments marketed with HUAYAN brand are satisfied to high-end customers worldwide. Huayan equipment ranges from, 1. 2cav- 96cav high precision PET preform injection mold with valve-gated hot runner; 2. 32cav- 96cav high performance Published in association with: PET preform Guangzhou Huayan injection systems Precision Machinery Co. with take-out Robot; Ltd. 3. 16cav-32cav high Tel: +86 20 8226 6148 ext. 8215 performance PET Email: kyao@gzhuayan.com preform injection Web: www.gzhuayan.com systems (without robot).

Packaging Constar

have a neat barrier technology known as oxygen scavenging,” says Phelan. “First and foremost, if a product is oxygen sensitive, such as might be the case with orange juice, tomato sauce, alcoholic beverages or soft drinks, the product will be protected. “We can produce a PET half litre beer bottle with a nine month shelf life, which means that it is as good as glass,” he says. “The difference is it weighs 29g whereas the equivalent glass bottle weighs 120g and PT costs about 20% less cost to produce. The other benefits are: it is easy to recycle; it is lighter weight, so there is a transport benefit; and if it is dropped, it bounces and therefore it can’t hurt anyone. On top of that, our clients say it says it provides them with far greater design freedom. If a company wants a new PT pack, it only cost £2,000 to create a new mould, and it can include any required design or embossing. A glass mould will only be created for large orders of several million units due to the cost involved.” The company produces containers for a vast range of products, primarily in the food and beverage market, but has also began expanding in to the home hygiene market developing packaging for health, beauty and house-hold products. Constar is a world leader in the design and production of PET bottles for soft drinks and waters, and counts CocaCola amongst its list of customers.

Constar UK at a glance Contact

www.constar.net Moor Lane Trading Estate Sherburn-In-Elmet Leeds West Yorkshire 01977 882000

Sector

Packaging

Employees

130

Turnover

£92m

Output

2 billion preforms, 3 billion closures, 150 million bottles (per year)

Distribution

85% domestic, 15% export

Markets

Packaging for food, beverages and hygiene products

Core products

PET plastic bottles, preforms and closures

the use of plastic for wine packaging is going to have a five year rollout period, but it will eventually take over from a cost driven perspective. It is my belief that the cost competitive nature of the wine industry will dictate a move to PET.” The use of plastic for packaging beer is also on the increase according to Phelan, with the company already providing plastic bottles to Calsberg, Stella Atois, Peroni and Carling. This year Constar will produce 60m PET beer bottles, largely for use at outdoor events and festivals. “If you think about the population of the UK, that’s a lot of beer in plastic bottles,” he says.

Alcohol adoption Alcoholic beverage packaging is an area that is developing in strength for Constar, and one which Phelan believes will be a consistently growing market. At present the Leeds site produces packaging for both beer and wine, and plans are in the pipeline for development in to the spirit market. “Within the wine market,” he says, “we have worked with companies including Wolf Blass and Jacob’s Creek. Plastic packaging in the wine industry is gathering pace at a rate of knots and the benefits for the wine industry are even greater due to the transport distances being even larger.” A 750ml glass wine bottle weighs over 450g while a PET bottle is 50g. The PET bottle has over a two year shelf life and, importantly for wine drinkers, has glass-like clarity. “I think

We can produce a PET half litre beer bottle with a nine month shelf life, which means that it is as good as glass. The difference is it weighs 29g whereas the equivalent glass bottle weighs 120g and PT costs about 20% less cost to produce Chris Phelan, vice president of European operations, Constar

The production process Product development moves through three distinct stages: design, prototyping and production. The design stage initially involves the company’s the development of the concept. This is then analysed by the product engineers and designers to test its feasibility. Phelan says there is a need for compromise between the two to ensure quality in design and functionality. The conceived product is then fully realised using 3D CAD software.

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The company utilises a rapid prototyping suite for the creation of a tangible model which will then be analysed to ensure it will perform. Any necessary design changes are performed and the customer signs off on the finished model. Before any metal moulds are cut, therefore, the company is able to demonstrate the complete product and ensure it will complete its required task. After the completed design has been approved, a pilot preform and pilot blow mould are created within three weeks, at which point the customer can then view their PET sample package.

Technology and development In order to produce approximately 500,000 bottles, 6.5 million preforms and 8 million closures on a daily basis, the Constar UK plant has embraced a number of important technological advances. “Because we do lots of small volumes, we needed to get away from the old style of working,” says Phelan. “To assist us to make our bottle production more efficient, we invested

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in a robotic cell which is all about having a quick change over and therefore being fast to market. With regards to preforms, we have developed a preform inspection system. Every preform that we manufacture is inspected. The inspection system runs automatically and allows us to move to a lights

I think the use of plastic for wine packaging is going to have a five year rollout period, but it will eventually take over from a cost driven perspective. It is my belief that the cost competitive nature of the wine industry will dictate a move to PET Chris Phelan, vice president of European operations, Constar out operation. With closures, we’ve moved to a one-piece flow for closures which means we manufacture, print and pack in line. All of the three billion closures that we make also go through an automated visual inspection system.” All the Constar presses are run using statistical process controls (SPC) parameters to ensure uniform operation. If

Packaging Constar

a machine steps outside the SPC, the process is stopped and the problem is investigated. No operation is performed outside of the SPC parameters and this is always maintained despite the continuity of the plants 24 hours a day, 7 days a week operational structure. The company has also invested in the use of laser guided vehicles (LGVs) rather than electric or gas forklift trucks. This is due to the company’s realisation that LGVs run longer and are treated much more carefully than a standard forklift truck. An LGV uses triangulation to know its exact location and can be programmed to go to any location within the site, pick products up and deliver it to a set location. “Previously there would have been human operated forklifts manoeuvring about a factory causing untold damage to both themselves, to the plant and equipment and to the environment,” says Phelan. “LGVs are now quite common in the packaging sector due to having quite a low price difference when compared to a standard forklift.” In addition, Phelan says the company is hoping to commence a new project involving the installation of a gas-turbine engine to assist it with generating a large portion of its own power. “We are currently trying to get some grants from the local government to give us the cash to help us purchase the gas turbine which will be used for generating electricity. Such a turbine would allow us to generate over 40% of the electricity needs for this site. Once we generate the electricity, there are two by-products. One of which is steam and water vapour will be used in the chill plant. The hot air that is generated will be used to help dry the PET. We’ve done one small pilot plant using that technique which has been very successful and we now want to expand that for the entire plant.” Technological improvements are not the only development steps made by Constar. The company has undertaken what it terms a ‘lean sigma’ universal training program, with every shop floor employee having undergone a green belt training course. Furthermore, every manager has gone through black belt training and a select group of quality technicians and some department managers have undergone a master black belt training course. As well as training, the company has spent considerable effort investigating ways in which it can limit its environmental impact, which includes the use of 25% recycled materials and a constant focus on energy efficiency and waste reduction. Looking on a supermarket shelf today it is easy to see the inroads that the PET plastic packaging market has already made. Constar is looking to make even further advances in the uptake of PET in a range of different product markets. Moreover, the company is not only looking to further establish its domestic market, but is likely to be looking further afield to develop its share in other less established markets.

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Stars are

aligned for Constellation

90,000 pallet warehouse storage

Constellation Wines Australia and Europe’s giant bottling and manufacturing facility in Avonmouth has been producing saleable wine for 18 months since completing its £100 million investment. General manager Richard Lloyd tells Will Stirling how Europe’s largest wine bottling plant is preparing for 24/7 production and is targeting stellar output of 40 million cases of wine in 2011.

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time you sip a glass of Banrock Station Cabinet Shiraz or an Echo Falls White Zinfandel, consider how that bottle got into your shopping bag. Since New World wines overtook French and European wines as the favourite tipple of the British public, the wine industry has known the importance of efficiently shipping product from the Californian hills and Australian vineyards to your dinner table. Multinational group Constellation Wines Europe and Australia (CWEA) had been tracking the British love affair with this wine and in 2006 began designing Constellation Park, which at 885,000 sq ft is Europe’s biggest wine bottling facility. It didn’t hang about and saleable product was shipping from the giant warehouse by January 2009.

Wine processing Constellation Park

in box lines to accommodate growth. This is essential with new customers coming on stream.” Finding growth doesn’t seem to be a problem. Unlike some UK manufacturing sectors, the wine sector has fared well through the recession and Constellation is a good exemplar. It has found there are advantages in being big. While the company’s main business is branded wine and spirits, it also has recently been contracted by Sainsbury’s to bottle their own-label wines. “We’re attracting more own-label business because of the quality and scale of our operations,” says Lloyd. “It’s a development that we planned from a strategic perspective to ensure we have truly collaborative working relationships with the major multiples.”

Big productivity plans call on Lean The facility was designed to be Lean from the outset. It now uses a principles-based policy deployment – Hoshin Kanri – to permeate the company’s lean strategy and vision throughout the organisation. This centres on the 5 Lean Principles: 1. Specify value in the eyes of the customer 2. Identify the value stream and eliminate waste and variation 3. Create value flow at the pull of the customer 4. Involve, align and empower the employees 5. Continuously improve in pursuit of perfection

CWEA wanted to ship wine in bulk from its New World vineyards and bottle it in the UK, significantly reducing its operational costs. Packaging in country of sale provides CWEA with comparative advantage over several competitors who are still importing packaged wine. The Park uses two tank farms that can hold up to 4.6 million litres of wine. The tank farms feed two bottling and three ‘Bag in Box’ filling lines, which in turn pass finished goods into the adjacent 80,000 sq ft pallet warehouse. “We produced 20 million bottles in the first year, 2009, and we are targeting 40 million in 2011,” says the facility’s newly promoted general manager Richard Lloyd. “This site was built with a 20 or more year horizon in mind, so we have capacity to build more bottling and bag

Constellation Park is confident about its ability to double output next year. “That’s not all from operational and efficiency gains. It’s about ramping-up to 24/7 production and having a new site that is sustainable, from a production and capability point of view, as well as an environmental one,” says Lloyd. “We’re operating complex pieces of machinery here and the skill is in utilising your assets in sync with demand while balancing the staff shift system we’ve developed.” Mr Lloyd, a recent graduate of Cardiff University’s Lean Operations Management MSc course, is a staunch advocate of Lean manufacturing and he has been instrumental in designing and applying a Lean Operational Philosophy to the Avonmouth site. In some ways, Constellation Park is the perfect test bed for a lean exercise. It is less than two years old. The parent company is committed to a lean philosophy and has demonstrated its readiness to invest. A significant proportion of the 450-strong workforce are new recruits who were not employed within the old Constellation establishment, which had up to eight separate warehouse depots and one production site dotted around Bristol (“we wasted a lot of time moving product around”). How is Lean actually operating on the ground? Constellation believes in focusing on its fourth Lean principle of ‘Involve, align and empower all employees’ before extensive activity and training is launched on the other principals. “Some people have begun by purely focusing on tools, thinking that tools are the basis of a Lean operational culture. It’s this crass implementation that has damaged the reputation of Lean and made it almost unfashionable,” says Lloyd. “If used in the right place, tools are excellent because they provide a common language and a standardised repeatable process. We have multiple shift patterns here, 450 people, operating 24/7 – I need to ensure that a consistent approach is properly deployed through the same structures, for example we’re changing over in the same way and that

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Experts in Bag-in-Box Solutions CRP Print & Packaging Ltd are one of Europe’s leading independent print and packaging groups, with a number of business specialism’s including design, manufacture and supply of Bag-in-Box (BiB) packaging for the European wine trade.

he development of specialist materials and printing techniques that are unique to the sector have been built-up in close collaboration with Constellation and many other leading global wine brands and fillers. CRP Print & Packaging Ltd is proud to have a long mutual trading relationship with Constellation Brands for the supply of BiB packaging. “The foundation stones for this relationship were set in place many years ago,” explains Eddie Fellows, Managing Director of CRP Print & Packaging Ltd. “From the start, the culture within the businesses fitted well together. We both

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have a pragmatic approach to business and understand that we have to continually bring value to our customers, in this way we share common goals. Seeing the Constellation Park project flourish over the last year has brought the team at CRP a great sense of pride.“ CRP Print & Packaging have supported and helped investment in Constellation Park with two of the highest speed most economic case erecting lines within Europe. With a technical support team that helps customers in evaluating case and wraparound equipment exclusively for this sector. The continued growth of wine

packaged into the BiB format looks certain. CRP is at the forefront of the development of the BiB format and is synonymous with this type of packaging.

Published in association with: crp print and packaging

Dev Brahmachari

Tel: +44(0)1536 200 333 Email: bib@crpprint.co.uk Web: www.crpprint.co.uk

Wine processing Constellation Park

we’re approaching problem-solving in the same way throughout the site. The first tool we went with was 5S, purely to show how hard it is to get something sustained by over 450 people.” Lloyd feels that the simplicity of a tool is not the issue, and that getting all employees engaged with, owning and driving such tools is incredibly hard work. “Actually doing it opens managers’ eyes to the reality that achieving ownership and continual improvement in a simple tool is far from straight forward. In certain areas of the site we are still grappling with it now.” Every area has its own 5S board, its own monthly performance audit, has an action plan fulfilled by line operators not managers, and the whole site management perform 5S walks every Thursday at 2pm. SIC – short interval control – boards are installed on each line, which shows the daily output by hour. The majority of shop floor meetings are held on the floor, “but there is a presentation room and two training meeting rooms to take the team’s offline,” he says. “Seventy to eighty per cent of shift managers’ communications, team meetings and departmental management meetings are held on the floor. Offline meeting rooms are used regularly to discuss financials, company targets and so on.” Lean, as everyone knows, is an ongoing process – Constellation Park is two years into its journey and has plenty to do, but Lloyd is confident that a successful Lean Operational culture can

contribute is critical to the requirement to continually increase the output efficiency of the site.

Innovative annualised shift pattern Companies tend to say that their people are their most important asset. Here, the evidence is compelling. Wine has very seasonal demand, with a big spike in the autumn leading up to Christmas. Constellation Park has devised a shift system that flexes through the year in line with this seasonal demand. “The key objective is that the site capacity is matched to the demand placed on it; the secondary objective is to get the best work/life balance for our staff,” Lloyd says with conviction. “Factory floor employees are on fully-roistered holidays for 12 months, but within that they’re getting 12 weeks’ holiday. It’s a pretty easy sales pitch, and we have excellent staff retention. Whenever we advertise for line vacancies we are inundated.” The company is about to embark on a new round of recruitment, emphasising that business is brisk. The shift pattern is getting industry-wide recognition from organisations like the Chartered Institute for Personnel and Development, and Richard will make a presentation about the demand/expectation for work life balance at the CIPD’s annual conference in November.

Minimum environmental impact The original concept behind building this huge facility was to minimise supply chain costs and the company’s carbon footprint. “It is demonstrably more cost and materials-effective to package wine and food in country of sale,” says Lloyd. Processing wine at the lowest cost to the environment was formally recognised when CWAE won the Green Supply Chain Award 2010. All employees pass through an induction training platform and an understanding assessment to support the intent of meeting the company’s Safety, Health, Environment and Quality policy (SHEQ). Far from being another set of tedious corporate paperwork, SHEQ has linked-up once disparate functions, such as

Constellation Park at a glance Company

Constellation Park, part of Constellation Wines Australia and Europe

Location

Avonmouth near Bristol

Turnover

CWAE $1 billion

Employees

700 total UK, 500 on site at Avonmouth

Facility

885,000 sq ft (270,000 sq m)

Key personnel

Richard Lloyd, General Manager

Key numbers

Produces 130,000 cases of wine and 110,000 Bag in Boxes a day Two lines produce 400 bottles of wine per minute = 800 p/minute First year on site (2009) produced 20 million cases of wine In 2010, on target to produce 30 million cases of wine, one fifth of the UK’s annual wine consumption In 2011, plans to run lines 24hrs/7 days per week, and produce 40 million cases of wine Warehouse has capacity for 85,000 pallets, or 53 million bottles Each bottle is photographed 18 times to check for label positioning, quality control, and X-rayed to check fill height

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Hillebrand Group, the world’s leading specialist logistics company, and Freightliner Group Ltd, the UK’s leading rail freight operator, are working together to provide Constellation Europe with a fast, efficient and environmentally-friendly service for importing wine into the UK.

rans Ocean, part of the Hillebrand Group, has signed a three year contract with Freightliner subsidiary Logico to operate a dedicated ‘wine train’ seven trains a week from south and east UK ports to Constellation’s bottling facility at Bristol. This plant is the largest bottling plant in northern Europe.

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These are the first services operated on these routes for Trans Ocean and carry an equivalent of 8.96 million bottles each week into the Constellation facility via Trans Ocean’s VinBulk Flexitanks. The new services will eliminate over one million road miles by removing thousands of truck journeys from already congested roads. With 24/7 secure terminal operations, the rail service ensures an efficient, streamlined supply chain to Constellation Park, eliminating potential demurrage costs and allowing Constellation to utilise faster shipping services into ports which connect to the rail network. Freightliner has invested significantly in reopening a disused rail terminal near Bristol in order to handle this traffic. The company hopes that the new facility will

provide opportunities to attract more traffic destined for the south and west of the UK from road to rail.

Published in association with: Trans Ocean Tel: +44 (0)1489 774 600 Web: www.transoceanbulk.com and Logico Carl Ashcroft

Tel: +44 (0)1394 612857 Email: ashcroftc@logicotransport.co.uk

Wine processing Constellation Park

Two bottling lines can produce 800 bottles of wine per minute. Every bottle is photographed 18 times to check label position and quality control. All machine operators spend two weeks per year at Krones’ academy in Germany.

removing weight from glass, label rationalisation and other brand-related initiatives. By linking these green goals with all departments – operations, sales and marketing, purchasing and finance – and back to manufacturing, the Park is monitoring its carbon footprint with more accuracy. “Through good collaborative relationships with key suppliers we’ve developed a 330 gram bottle compared to the industry norm of 500 grammes. This reduces cost, weight and carbon footprint. But the design is a fine balancing act as consumers have historically favoured a heavier bottle which they associate with quality.” In addition to SHEQ, the company has introduced further energy saving projects this year including the conversion of the old high bay lighting lamps to induction-style fittings and the reprocessing of waste water from the packaging lines. These form part of Constellation Park’s continuous improvement action plan. In addition, the business is committed to the Courtauld Commitment and CCA/CCL Legislation for reducing packaging volumes.

Improvement out of the box Currently, domestic demand for boxed wine is softer than in Australia and mainland Europe. But it’s an important part of Constellation’s UK portfolio, and the Park can process 110,000 bag in boxes a day (BIB). “The wine is kept fresher in a bag in box once you’ve opened it,” says Lloyd. “An important change is that we now make all the bags on-site. Bag leakage has traditionally been an issue in the industry. With us now controlling this part of the manufacture process we’re been able to get to the root cause of the leakage, making a step change in terms of quality going to market.” Constellation recently launched a more premium-looking BIB, called ‘Freshcase’, to try and break the stigma of BIB being associated with lower quality wine. “It’s taken off reasonably well in the UK, and done particularly well in Europe.” Richard Lloyd sums up the next step for this unique operation. “The future at Constellation Park is about developing all our people through the Lean Operational Philosophy to ensure we supply a product valued by the customer which is delivered on time, in full, every time. Sustainable collaborative relationships are being built with the major supermarkets that are mutually beneficial. The scale and quality of Constellation Park would add value to any end-to-end supply chain, a value that all collaborators have been quick to recognise. Staying true to our fifth Lean principle we are striving to continuously improve, learn from our experiences and deliver ever more value to our customer.”

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Assemble with care Mark Young talks to Deima UK sales manager Stephen Higgs about his new role managing the implementation of assembly and test systems in UK factories.

Deima

is a Spanish based engineering company, based near Barcelona, founded in 1986. The company designs and builds control equipment and automated assembly and test lines for manufacturers and has recently expanded its operations and is looking to grow its customer base in the UK. While its customers are mainly from the automotive, defence and pharmaceutical industries, Deima serves anyone that has a need for its systems. Universities and laboratories are increasingly calling upon the firm. Any machine that Deima builds, whether they be vibrations tables, measuring equipment, assembly cells, colour checkers or anything else, are completely bespoke to the needs of the customer. Machines cost anywhere between £15,000 and £500,000 as a general rule but they can be more. As a previous customer of Deima’s during his 13 year career at one of the world’s biggest automotive tier one suppliers, Stephen Higgs was seen as the perfect man to lead Deima’s expansion on the Great shores of Blighty. Higgs is now working with clients from the initial enquiry stage, all the way through implementation and on-going in an after service capacity. He has charged himself with keeping very close contact with his clients, building a holistic understanding of their wants and needs and keeping them informed at every step of the process.

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After taking the time to learn about the product that is to be assembled or tested using the new machinery, Higgs holds consultations with shift managers and the employees who will actually be operating the machines to find out what they think can be done to make their jobs easier. He says this is one of the most important parts of the process. “One thing that is very prominent among engineers is thinking about everything so clinically that you miss blindingly obvious things that make systems more efficient,” he says. “Also if you get shop floor buy-in you lose some of the negativity that you get when a new machine comes in.” Simply listening and adhering to requests like fitting fans and water bottle holders to machines can help staff to feel valued and involved and help to prevent barriers being put up to the change process, he says. Having ascertained the customer’s specifications, either through their instruction or his own analysis, he regularly updates the client and seeks their approval at every stage throughout the six to eight week design stage. “It’s much more efficient this way, for everyone evolved, rather than having to change a design once it’s finished,” he maintains. Throughout this time, Higgs spends his time back and forth from Spain, consulting with the

Control equipment Deima

engineers, feeding information between manufacturer and client. Then, when the machine is ready to be installed into the customers’ workplace, it’s the engineers turn to visit the UK. Higgs stays present during implementation, making sure everything goes smoothly with the commissioning and final sign off. Thereafter, with operator training offered for all of the machinery, 12 months ongoing support for implementation issues, and maintenance advice for the life of the machinery, Higgs will be a familiar face around the factory. Higgs says his history of operating on the other side of the counter as it were, buying the types of machines he now sells, serves both him and his customers immeasurably in his role. “I can almost take a step back from being the seller and analyse what would really be best for the customer,” he says. “I can guide the customer to the way that I’d want the machine built using their specifications and budget.” Choosing sensors for test systems, for example, demands Higgs’

experience. “Cameras are fantastic if they can be operated in constant light conditions. However, if they can’t, it might work fine at Midday but not a couple of hours later when the sun casts a different shadow,” he says. When this is the case that a separate closed booth will be required and this will push the price up. Alternative options Deima provides includes lasers, contact systems and

I can almost take a step back from being the seller and analyse what would really be best for the customer. I can guide the customer to the way that I’d want the machine built using their specifications and budget Stephen Higgs, UK sales manager, Deima X-rite – measurement technology through hand held scanning devices which ensures uncompromised accuracy in colour. Overall, Higgs says his company’s quarter of a century in industry plus his own history in the main sectors they serve means Deima is in an unrivalled position to give the highest value add for UK manufacturers that want state of the art testing and assembly facilities on site.

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Back on performance track

after rocky road

Kostal UK makes electric and electronic switch assemblies for prestigious auto OEMs

Kostal UK makers of switches and switch assemblies for automotive OEMs, had a tough year in 2009, realigning its business priorities to its core financials and survival. Now it has a different challenge – a big order book to fulfil. The time has come to get back on track with overall business performance, says managing directorn Martin Wood. 164

car manufacturing took a beating last year – a recession-led slowdown in European sales, competition from Asian competitors and an ever-greater focus on costs has meant that many suppliers of specialist automotive parts such as Kostal UK have had to tighten their belts in the last 18 months. For the UK division of German mechatronics manufacturer Kostal, the recession meant having to focus on survival above all else. Now it faces a new challenge – responding to rapid growth in orders with an under capacity headcount. “Many UK industries have been worried about a double-dip recession and now don’t have the capacity installed to deal with a sharp recovery,” says managing director Martin Wood. “Our priority now has to shift from financials and cash flow back to all aspects of business performance.” Based in Rotherham, South Yorkshire, Kostal UK recently celebrated its 20th anniversary. It makes switches, switch assemblies and mechatronics for customers including Jaguar Land Rover, Volvo, Porsche, Audi and Rolls Royce, with JLR the number one customer. Kostal UK has responsibility for the group for supply to the UK and

Automotive Kostal UK

Scandinavian markets. It makes any kind of switch one might activate in a car console – electric windows, electric seats and sunroofs. The company also offers electronics such as memory mirrors and central door locking functions. The electronic assemblies are built at Kostal’s factory in Ireland, while the switches are designed, engineered and assembled in Rotherham. Kostal had to respond sternly to the depressed automotive market last year. Martin Wood admits that business priorities changed: financial fundamentals bumped customer performance off the top, and Wood admits the company chased customers for payment harder than they would have liked, to give the business security. Some redundancies were unavoidable. “We’ve worked very hard over the past year and a half to remain a financially-sound company,” he says. “We’re now seeing that paying off in terms of our attractiveness to our customers. There are challenges here and we have various initiatives to remain competitive and improve. Our base financial solidity means a lot in the marketplace. It’s not unique, but we believe that this a very positive selling proposition that’s not shared by the whole industry.”

Rediscovering performance At the same time, Kostal UK is writing a five-year growth plan to determine which customers, products, technologies, investments and returns the company will concentrate on, with the plan to return to the German

group’s expected profit levels as quickly as possible. Wood believes the key to this will be upping performance and delivering a consistently excellent level of customer service, with an expectation of sustained growth over the next five years. To that end Kostal UK has made several investments in new technologies and equipment, some with an environmental theme, such as an overhaul of shop floor lighting to a brighter, more energy-efficient system and fitting a blast chiller on the factory roof to provide free cooling.

It’s been a challenge putting the capacity back into the business that quickly – to do that you have to have confidence that you won’t take it out again Martin Wood, managing director

“The challenge for us comes when you’re running fast to keep up but margins are squeezed, and you need to make investments at a time when capital is in short supply and the money you invest is self-created,” says Wood. “We have had to spend a lot of money on freight and we’ve had to fight to get allocation for our semiconductor components, for example. It has been a challenge putting the capacity [people] back into the business this quickly – to do that you must have confidence that you won’t take it out again. So we spent a bit more cash doing that than we’d have liked, but in doing so our profit margins have returned to a good level.” Wood’s background in the automotive industry stretches back many years. With a degree in electrical engineering, he took his first job at Ford Dagenham, an experience he describes as “hard work, where I saw manufacturing for the first time, warts and all” but for which he was extremely grateful. Here he developed a passion for manufacturing which led him to join the manufacturing business at Kostal UK 12 years ago, becoming technical sales manager. In 2005 ago he was made managing director.

BMW roof module line

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“Inspiring Improvement” Lean Business Solutions Ltd (LBS) have supported the Kostal Lean Journey during the last 4 years, “The LBS approach challenged us to drive waste out of all our processes” states Martin Wood MD of Kostal.

strategic vision was developed to improve customer perception and the deployment delivered savings of circa £1.5 million. During the recession LBS led a change programme for the new management team, and supported further improvements in readiness for

the upturn. This included a company wide team working initiative which underpinned the culture to drive improved performance in difficult times. LBS create and deliver nationally recognised training courses including the recently launched City and Guilds Lean

Office Licentiate (NVQ 4 equivalent) offered through Leeds University. For further details and the latest news visit our website where a range of Licentiate courses are available and case studies demonstrating the benefits experienced by our clients.

Published in association with: lEAN BUSINESS SOLUTIONS LTD Kerry Cochran Tel: 00447985 582753 Email: kerry@lean-business-solutions.co.uk Web: www.lean-business-solutions.co.uk

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Automotive Kostal UK

Strategic view He has a passion for manufacturing and is a big fan of the British car industry, saying it is frustrating to see the indigenous UK industry’s decline since the 1970s. “It’s sad to see once-great British brands no longer so dominant in the market and no longer in British hands. We’re expecting to see some pro-manufacturing policies from the new government at some point, but at the moment it’s all rhetoric – there’s little real substance in it for companies like ours. I hope that greater levels of support do come in time, as they’re desperately needed in parts of UK manufacturing.” “Part of this is business support grants for various activities to grow technology, capability and skills to grow exports. Part of it is promoting the sector and creating an environment where, as a parent, you can see that for the next 40 years we as a country are committed to growing this sector and can encourage your child to consider a career in engineering or manufacturing.” Wood points to the apprenticeship scheme of the previous government as an example of a policy which could be built on successfully. Kostal UK has students from Sheffield Hallam University on sandwich placements, and other Sheffield students have shown interest in working here. The company is developing stronger links with local schools and universities, but it could do more with schools Wood admits. “One local university works with us on problem-solving and business improvement activities. They’re supporting us in developing a particular sub-component so that it functions better under heat,” he says. The company has brought in 30 people, a 10% increase in headcount, this year and is looking to increase staff further over the next few months. “We’re busy recruiting at the moment, especially in engineering. We’re about to bring on five new apprentices. Ideally we want people we can train ourselves,” he says. “There’s a lot of demand coming from China, where some of our customers – notably JLR and Porsche – are doing very well. China is Porsche’s number one market and almost two-thirds of all Mercedes S-classes are sold there. It’s a growing market, especially for luxury vehicles.” There aren’t many UK companies that ship parts to German car manufacturers, but Kostal UK counts among its clients BMW, VW and Porsche in addition to

Restocking now orders are pouring in, following a lean 12-18 months

UK-based companies like BMW Mini. It has also secured a first contract with Daimler for the next generation S-Class vehicle. PLM – Performance Leader Mechatronics Over the last year and a half, the company sought to increase its financial monitoring and carefully examines its cash flow, debtors and its outstanding day sales. Now it’s time to focus on performance metrics – Kostal also runs several programmes that analyse the field data with its customers, mainly in product failure tracking so that improvements can be made. “We have a slogan – “Performance Leader Mechatronics” – that ties the company to become the best in class quality performer for our product range,” explains Wood. “We certainly not there yet but we’re absolutely committed to getting there.” In the height of the recession, Kostal UK took its staff on a five-day lean reminder course so that they would all have the necessary skills when the time came to improve performance. “Now business is picking up so quickly suddenly people have to work that much harder and we’re bringing in a lot of new people too, so the refresher was important,” says Wood. The company has also undertaken quality workshops this year to help its staff understand how best to improve quality within their particular area of responsibility. Financial performance targets come from the group’s headquarters in Germany but each site has considerable freedom to make the changes that they consider most important first – the UK site was the first to wholeheartedly adopt lean improvement techniques. “While there are lean tools and techniques that we’re able to use, we’re also free and empowered to do what we need to do at our own site, but we must be careful that we’re not reinventing the wheel at each global location” explains Wood. Kostal UK has been running lean programmes for the last eight years and there are two sig sigma black belts on site and about 15 green belts. Every operator on the factory floor has an NVQ level two qualification. “We’re all culturally switched-on to lean, but I believe there’s more work that could be done in that area,” Wood says. “We have kaizen throughout the company, but it’s difficult to keep it going when business has taken off so much and everyone is so busy. The key is to keep looking at what we need and ‘do lean’ around our customer delivery.”

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Relationship

building

Forming partnerships with its customers has been the modus operandi for Modcomp, a specialist in IT solutions for the manufacturing sector, since its inception more than three decades ago. As told to Edward Machin.

Based

in Wokingham, and with offices in Germany and Ft. Lauderdale, Florida, Modcomp Systems & Solutions specialise in delivering IT solutions based on software from Microsoft, Cisco and Hyland, among others. A subsidiary of the CSP Inc orgnisation, listed on the NASDAQ and with revenues of $83m, the company was awarded Microsoft Gold Certified Partnership in 2007 — one of the first organisations to achieve the certification with a special competency in Custom Development Solutions. Together with its work in the travel, children’s services and banking sectors, the manufacturers Modcomp deal with are, as expected, highly focused on their day-to-day operations. Things, though, often quickly go beyond any initial brief — Decoma Sybex, a subsidiary of Magna Corporation, being a case in point. Charged with building an application to enable the company to manage its purchase and acquisition processes, the project was, initially, a standalone endeavour justifiable on cost/benefit analysis.

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Kevin Magee, Modcomp’s managing director, takes up the story: “Both parties soon saw an opportunity to take the successes of the project to another part of the Decoma family; one which had a different purchasing system. This wasn’t anticipated when we went to tender, only emerging later down the line. The exciting thing is that we don’t necessarily know where we’ll go with a company at that first meeting and, equally, nor may they.” This isn’t uncommon for those at Modcomp, however. “We pride ourselves on being able to respond when business demands change,” says Magee. “Be it a software upgrade to enable a change in service our customers are providing, a product they are manufacturing or a migration from a legacy MRP system to a more current version; we do it all.” “It certainly makes things both more interesting and challenging for our guys, not to mention the fact that a stronger relationship develops over a period of time. If Modcomp was just a product supplier, we would probably complete the sale and then not have much more contact other than minimal contact through the support of that product. But because, as a solution provider, our customers consider us as part of the ‘team,’ we develop a much stronger working partnership. For example, we regularly feed through ideas about how our solutions can help them improve working practices or the ways they can respond to emerging business situations.”

IT solutions Modcomp

Lean on me Indeed, the concept of supplying a onepoint solution, only to leave customers fending for themselves thereafter, is wholly anathema to those at Modcomp. The company’s relationship with Jabsco, a manufacturer of industrial and marine pumps, highlights the concept further still. “Working with them for six years now, we initially built software to support Jabsco’s Lean initiatives: supply chain management and waste saving measures, for instance,” says Magee. Developing software that operated in tandem with the existing framework, the Modcomp team added features including hand-held wireless devices for increased efficiency on the shop floor. “By bolting these modules on,” he says, “Jabsco continue to see value from their initial investment, while simultaneously delivering benefits going forward. Even today we continue to add features and functions to respond to the company’s changing operations: a range of pumps for food manufacturing, to name one.”

“Ultimately, the expertise of our people and Modcomp’s ability to work with customers to solve their problems is the constant in our story — that’s why clients turn to us. The nature of the solutions we deliver changes with advances in technology, of course, but the core

The expertise of our people and Modcomp’s ability to work with customers to solve their problems is the constant in our story - that’s why clients turn to us Kevin Magee, Modcomp

competency of connecting the ones and zeros is something we’ve been recognised for since our inception.” “In today’s manufacturing environment, many companies can’t afford to simply throw a system onto the scrapheap because they want to implement a new business process. Integration and/or adding to the current system is thus key — as is getting the most from your investment. Delivering value, very simply, is what Modcomp does, and we have no intention of changing!”

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Progressive Manufacturing With over 60 years experience in the design, manufacture and installation of pallet racking and shelving storage systems, UK-based LINPAC Storage Systems has clients ranging from SMEs through to the largest multi-national. Tim Brown talks to operations manager, Michael Rudniak, about maintaining advantage through improvements.

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Maintaining

strong working relationships with some of the biggest commercial companies in the world is no mean task, especially when providing a product absolutely integral to their operation. Through the provision of high-quality products and excellent service, LINPAC Storage Systems has successfully nurtured relationships with the likes of Amazon, Dunlop-Goodyear, Laddaw, P&O Ferries, Matalan, Marks & Spencer, Argos and TNT â&#x20AC;&#x201D; not to mention a raft of smaller companies. â&#x20AC;&#x153;We are extremely proud of the professional service we deliver to all our customers, regardless of their

Storage systems LINPAC

size,” says Rudniak, who maintains it is the company’s UK base that truly assists LINPAC Storage Systems’ ability to satisfy client needs. “When you’re working to tight time schedules, with downtime being critical, the last thing you need is delays due to products being manufactured abroad. At LINPAC Storage Systems we produce everything here in the UK, and with the manufacturing and management all situated at our Milton Keynes headquarters it ensures the entire team works in unison to deliver jobs on time and in budget.” A short chain of command, backed by experienced designers, structural engineers and a state of the art manufacturing facility, gives the company the flexibility to provide tailored storage solutions in very short time frames. “Our UK manufacturing facility at Milton Keynes gives us a distinct advantage in the marketplace; from here we produce the broad range of APEX racking and shelving products on offer,” says Rudniak. “Quality, service and attention to detail are central to our business philosophy.”

Facility improvements LINPAC Storage Systems’ state of the art manufacturing infrastructure at Milton Keynes incorporates steel forming presses, specialist steel rolling mills, automatic welding machines and one of the largest epoxy polyester coating paint lines in Europe. Ensuring a high-level of technological advance, the company has recently engaged in important infrastructure investments to help improve production efficiency. Over the last five years, LINPAC Storage Systems has invested heavily in new equipment, helping output increase ten fold.

Recent investments include: A new bracing line: this has allowed the company to produce both horizontal and diagonal braces on the one line, while simultaneously increasing productivity by 50%. An automatic welder: which can weld standard beams with an average of 120 beams per hour, five times quicker than manual welding, while producing a high quality automated finish. A rolling mill: specialising in rolling, forming and boxing the two-part boxed section beam.

LINPAC Storage Systems commissions two rapid colour change powder paint booths at its plant in Milton Keynes. “The investment continues LINPAC’s commitment to using the latest technology to maintain its strong manufacturing position in the highly competitive European racking market,” says Simon Smith, manufacturing engineering manager. The new booths provide significant improvements in application control of powder to steel components manufactured on the two large conveyorised lines at Milton Keynes.” The LINPAC project team worked with partner ITW Finishing to replace the existing systems with a new specifically configured solution. Operators, teamleaders and maintenance staff have all been involved in the carefully

We believe that the company should make every appropriate effort to avoid compromising future generations’ ability to sustain their needs According to Rudniak, LINPAC Storage Systems

phased implementation, ensuring the two production lines continued producing quality products whilst customer service levels were maintained at all times. The control of the application equipment and movement of the paint guns are regulated at central touch screens, ensuring optimum settings are maintained allowing the operator to devote more time to checking and controlling both quality and costs.

The main drivers for the £300,000 investment were: Significant reduction in raw materials of over 60% by drastically increasing first pass deposition and high efficiency reclaim systems. Repeatability is ensured by using product recognition, seven servo driven axis and central computer controlled recipes. Significant reduction in colour changeover times. The systems allow rapid colour changes to take place, improving flexibility of the manufacturing process by reducing colour batch sizes. Colour changes have been reduced from six hours to under ten minutes with only one operator. Both systems are now fed by 600kg bulk feed systems, replacing manually fed 20kg powder boxes. These bulk systems eliminate manual handling issues and reduce labour costs. Complete compliance with ATEX/ Dangerous Substances and Explosive Atmospheres Regulations 2002 regulations, with built in fire detection and suppression systems. The project will generate numerous savings of over £150,000 per year, giving a payback of under two years. “Involvement with our operators has been key and they carry out their own daily/weekly maintenance as a part of the Asset Care programme, ensuring optimum uptime of these critical pieces of plant.” “The project team have worked closely together to ensure the investment was installed as planned and we are

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already reaping the significant benefits, I’m absolutely delighted with the system and the team”, said Simon on completion of the project. To assist the company with further advances, LINPAC Storage Systems has employed its own lean management and continuous improvement programme — known within the company as LPOS (LINPAC Production Operating System). Yearly strategies are set up for each department, with goals,

objectives and measures reviewed monthly. The LPOS programme has played a major role in ensuring the organisation survived the recession by operating leanly and keeping costs to a minimum. With the aid of every employee working together as a team, the continuous improvement philosophy has proved a great success. As part of the program, all operators are responsible for quality and regularly raise issues via daily meetings. These issues are acted upon using different tools and techniques. Continuous improvement techniques including 5S, SMED, TBM, TPM, SPC have been implemented over the last 18 months.

LINPAC Storage at a glance

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Location

Garamonde Drive, Wymbush, Milton Keynes, Buckinghamshire

Contact

www.linpacstorage.com

Sector

Manufacturer of APEX pallet racking and shelving solutions

Employees

116

History

LINPAC Storage Systems based in Milton Keynes has over 60 years experience in the Pallet Racking industry, which originally began in 1959 under the name of Acrow. After an expansion programme, the company moved to Milton Keynes trading as APEX Storage Systems manufacturing APEX pallet racking and shelving. The company was purchased by the LINPAC Group in 1997 and re branded as LINPAC Storage Systems.

Storage systems LINPAC

Hand in hand with the environment The results of these implementations can be easily recognised within the factory, none more obvious than in the environmental improvements that the company has set in place. While efficiency and productivity have been significant driving factors for improvement, environmental protection has also played an important role. According to Rudniak, LINPAC Storage Systems is committed to protecting and enhancing the environment as a fundamental principle of the company’s business. “We believe that the company should make every appropriate effort to avoid compromising future generations’ ability to sustain their needs,” he says. The company is implementing activities throughout its operations to reduce the use of materials and

energy, increase recycling and minimise emissions and wastes to air, water and soil. The management tem also takes the environment into account when updating operation practices, ensuring the company employs any available technological advancement which may assist in reducing its environmental impact. LINPAC Storage Systems also takes steps to ensure it is aware of any relevant new understandings in terms of environmental science. “LPOS has also affected our energy and waste efficiencies, with questions being raised and actions taken, which have resulted in the current improvements,” says Rudniak. “Of all the improvements carried out last year resulting in savings, benefits and an improved working environment, the one considered the main success was the SMED exercise carried out on our main Rolling Mill, which reduced the change over times from four to 1.5 hours and resulted in improved lead-times, planning and productivity.”

Other improvements have included: The reduction of the four stage pre-treatment process to a three stage process saving chemicals, gas and electricity. Decreased powder usage without affecting quality levels. Reduced oven temperatures.

Planned future investment The success achieved by LINPAC Storage Systems’ existing improvement programmes has encouraged plans for further changes as company plans to increase export sales to mainland Europe. LINPAC Storage Systems APEX pallet racking could be considered the vertebrae supporting the operational nervous system at many noteworthy companies. Its popularity is largely due to its high quality which is ensured through the consistent implementation of production improvement techniques. It’s achievements through continuous improvement also greatly assist the company to remain competitive both in the UK and internationally. Moving forward, continued production investments will undoubtedly further improve the company’s competitive advantage and ensure its ongoing successes.

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Space

men

An engineer using the three-coordinate measuring equipment

Part of the Samuel Hodge group, Essexbased Teknequip specialise in the precision machining of commercial grade materials and also various types of exotic materials that are used in the marine and aerospace industries. Twenty-one skilled setters and programmers give twenty-four hour a day cover throughout the working week to ensure the company can meet the tightest delivery requirements.

“You

have order winners and you have market qualifiers,” says Neal Crisford, the group’s managing director. “The market qualifiers are quality, lead time and price. The order winner is our ability to do prototype work and deliver anything from a one-off to a thousand units. We have a tremendous ability to react quickly to changing qualities and changing quantities across many different materials. It’s the breadth of what we do as well as our flexibility that distinguishes us.” The Samuel Hodge group acquired Teknequip in 1993 and soon began investing heavily in it. The demands of the aerospace industry meant that the company had to adopt the most modern production techniques and the more stringent traceability requirements “from the furnace to the aircraft, everything has to be accounted for” explains quality

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manager Nigel Howell. “We’re AS9100 and ISO approved and hold all the relevant aerospace approvals that you need to operate in the market. We pride ourselves on having a very stringent system for First Article Inspection.” Recent projects include components for the European Ariane space rocket, Pratt & Whitney jet engines and Westland helicopters. Believing there to be a significant potential for growth, the Samuel Hodge group has committed to a significant investment in machinery over the next 18 months in the expectation of increasing Teknequip’s current turnover. “We don’t just want to be a ‘me-too’ company,” says Howell. “We are very niche, very unique. Our company’s ethos is that we position ourselves at the very high end of the market, and we believe that’s a market that has stayed in the UK because customers know they can trust us over companies in China, in the Pacific Rim and elsewhere.”

Continuous improvement The company’s Continuous Improvement program is at the heart of its drive to maintain a qualitative edge. In partnership with HS Marston,

Aerospace and marine Teknequip

its largest customer in turnover terms, Teknequip has rolled in a series of initiatives. “We use Ito University to build a network of lean, leadership philosophies. We’re using that process to run quality clinics where we look for problems and opportunities for greater efficiencies. We sit down as a group to work out the cause of these problems and come up with preventative solutions”, explains Crisford. “From one person running one machine to one person running two or three machines in a cell formation - it has been quite a culture change for some people here, but they can see the improvements and the ways in which their jobs have been made easier. We’ve been fortunate in having such a receptive workforce.” Since Teknequip started the program 18 months ago on-time delivery has gone from 85% to 98%. Parts per million reject rates have also gone down considerably, to 5 parts per million.

Thinking, inside the box Innovation and investment doesn’t just stop at the factory gates, however. The

Teknequip team are especially proud of a distribution system they have developed in conjunction with HS Marston. The parts are now packed in foam cut-outs and sent off in kit form to their customers, ready to be opened and placed straight onto the production line. “It saves them booking in several items into their stores and re-issuing them as needed. They send the kit boxes back to us and we send them back within five days. Our packaging costs have been massively reduced, it guarantees the traceability of the parts throughout the entire process and we’re not throwing away cardboard boxes, which is much more environmentally friendly”, explains Howell. One of the biggest challenges the industry now faces is in recruiting and retaining high-quality staff. “It’s definitely a problem nowadays. There aren’t enough qualified young people moving into the industry to replace those who are retiring” says Crisford. “We’re lucky in that we don’t lose many staff. We operate a very clean and tidy work environment and we pay a fair day’s wage. We get on as a team and have a very close relationship with our workforce.” Teknequip have just taken on an apprentice. Howell says: “We like to take on young people and train them the Teknequip way, and make sure we retain them for the next 20 years. The group’s been here for over a hundred years now and the company’s well established. We’re not just passing through - we intend to be here in Harlow, Essex for decades to come.”

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Plastics

Scorpion Mouldings

Plastic

fantastic Scorpion Mouldings have full 3D CADCAM facilities and can accept data in a variety of delivery methods and formats

The delivery of high quality products is the driving force at Scorpion Mouldings. As Tim Brown found out from managing director Simon Whitham, with over 35 years experience in technical plastic moulding and plastic injection component manufacture, the company has developed a strong reputation for reliability and customer focus.

Based

in Buckinghamshire, Scorpion is a privately owned family company developing injection mould tools and manufacturing precision plastic components. The shop floor of Scorpion is populated with up to date computer controlled moulding machinery, robotic product handling equipment and automatic materials handling equipment, all of which ensure both quality and repeatable product manufacture and delivery. The Scorpion operation has been accredited to standards ISO 9001 and the strict automotive standard TS 16949. Whitham says that adhering to those standards, particularly the more stringent TS 16949, ensures not only quality but also customer satisfaction. “We run the business to that standard (TS 16949) as a whole because the automotive requirements are so tough. By satisfying those we ensure absolute customer satisfaction on all projects.

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The standard also has more of a broad focus which ensures not only quality but also monitors cost and delivery – effectively the whole operation.” The company’s in-house injection mould tool capabilities provide Scorpion with the ability to offer the best level of service and client involvement. “We focus very much on customer service and try and build multilevel close customer relationships so we can best understand their needs at least as well as they do, if not better,” says Whitham. “By keeping that completely in-house we are able to liaise with a client’s product designers and suggest opportunities for improvement in terms of cost reduction, raw materials, stability or quality. Importantly, we have very short lead times and are able to convert a design in to an injection mould tool and then a plastic part very promptly.” Scorpion specialises in small and medium sized technical plastic mouldings but has the capacity to cater for the manufacture of product quantities as small as 500 up to well over 100,000. Currently some of the sector areas of focus for the business include automotive components, electronics and telecommunications infrastructure. As a result of its close association with these industries, Scorpion and has developed a particular focus on lens production as used in automotive lamps, telephone windows or electronics screens. “We are certainly lens specialists,” says Whitham. “Because of the experience we have had over the years, we are very aware of lens requirements to ensure superior quality. We probably have the only reflex testing facility outside of an OEM or major tier one supplier in the country. We are actually able to test the light reflection of reflex lenses in-house which ensures that the lenses always meet the customer’s specifications.” The need for quality assurance is well understood by all members of the Scorpion team. The experienced and technically trained staff provide a service which covers all aspects of development and manufacture of the company’s injection moulded products. As a result, the wide range of in-house capabilities allows Scorpion to not only reduce its unit prices and tool costs but also its lead times. This capability is a culmination of Scorpion’s customer satisfaction focus and, as the company continues to grow and invest, its status as a leader in the injection moulding industry is sure to remain steadfast.

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