The Manufacturer February 2010

www.themanufacturer.com February 2010 Vol 13 Issue 02

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R E C R U I T I N G f o r S uccess Manufacturers recruit for recovery

People and Skills The JCB Academy

Sustainable Manufacturing Remanufacturing comes of age

Finance and Pro Services Asset-backed lending

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Interview Graham Honeyman

CEO, Sheffield Forgemasters International

Manufacturing Monitoring the Strategy’s progress

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Editor’s comment

Monitoring the activism There is little doubt that the Department for Business, Innovation and Skills is working hard for UK plc. Indeed, it’s difficult to keep track of the flow of new initiatives. “Going for Growth”, the latest big project, outlines a strategic approach to building the foundations of low carbon industrial competitiveness. Part of this is a healthy £70m funding for ESPRC, the engineering and physical sciences research body. Hard evidence that the private sector is responding to the call for a low carbon-focused economy came from Wales last month, where engineering firm Mabey Bridge pledged to invest £38 million in a new factory in Chepstow to build and paint wind turbine towers. Up to 240 skilled jobs are expected to be created.

Going for Growth is weeks old, while Advanced Manufacturing, the £151.5m strategy launched in July 2009 has had time to gain traction. A large portion of the funding went to Rolls-Royce, for investment like new factories, Samulet – the low carbon aerospace research project – and to support the Strategic Innovation Fund. Our lead story attempts to assess progress with the larger components of Advanced Manufacturing and canvasses some opinions of how this important pool of money was distributed.

New information is patchy. While some key updates such as factory locations have been announced, other news, such as the number of new, not merely sustained, jobs created, and which companies in the supply chain stand to benefit from Rolls-Royce’s funding, is less clear. The Manufacturing Advisory Service seems to be delivering value for money from its portion, and in the North West it will be boosted by more funding to support the Nuclear Low Carbon Economic Area being created in the North West and Yorkshire. With so many strategies running concurrently it is important to monitor the real benefits to the biggest manufacturing demographic – SME businesses – as the strategies unfold.

Toyota and Nissan, two of the biggest carmakers in the UK, had starkly contrasting fortunes in January. Toyota said it must cut 750 staff, a great disappointment given the lengths it had gone to in the last year to reconfigure the Auris production line and implement flexible working. Nissan needs to take on 400 temporary workers to satisfy demand for the evergreen Qashqai.

Meanwhile the JCB Academy, the first regional academy offering an engineering-centric education for 14-18 year olds, is taking shape. This exciting institution is covered on page 40.

Will Stirling, The Manufacturer

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1

News and features 04 News

Manufacturing news

12 Manufacturing appointments On the move

Find out who’s heading where in manufacturing

14 The big picture

Manufacturing Footprint Strategy The IfM’s Paul Christodoulou discusses how manufacturers can develop the right global configurations

15 Business as unusual Change starts here

Mastery of a few process improvement tools and the continuous improvement lingo does not a lean enterprise make

17 Economics

Carbon leakage looms following Copenhagen Copenhagen 2010 was, by all accounts, a colossal letdown.

EEF’s Steve Radley considers where we go from here

18 Lead story

Assessing the strategy Malcolm Wheatley investigates those government strategies designed to support UK industry

22 Interview

Man of steel Graham Honeyman masterminded the transformation of Sheffield Forgemasters from failed steelworks into globally diversified, high value product export champion

26 Leadership and lean

Best practice vies for insurers’ attention Lean, like insurance, it is a subjective science but there is evidence that best practice does make a difference. Will Stirling reports

29 Sustainable manufacturing

Regeneration through remanufacture Products today are commonly easier to replace than repair, so remanufacturing offers an alternative to unnecessary wastage

34 Innovation, design and the product lifecycle This year’s model

TM looks at the current state of play and new developments in parametric modelling

Finance and professional services 38 Using all of your assets

Mark Young explores whether a one-time unpopular financial instrument is now working amid tighter credit elsewhere.

41 RBS Manufacturing Fund

Royal Bank of Scotland launched a punchy £1bn specialist fund for manufacturers in January

42 Special feature BDO

Tom Lawton of business advisers BDO discusses credit lines, the eurozone, growth sectors and a general election

2

Contents People and skills 44 The JCB Academy

Edward Machin investigates Britain’s first regional academy, finding that JCB continues to do things a little differently

Employee of the month 49

Sally Walters of Pell Frischmann

IT in manufacturing

IT one 51

Computing in the cloud

IT News 57

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

65

R E C R U I T I N G f o r S uccess

EEF’s fourth quarter survey confirms that the worst of the downturn is over, and manufacturers are recruiting for recovery and opportunity. But as Colin Chinery reports, the sector image is not asset rich.

Manufacturinginaction Sponsored by TBM Consulting Group

Factory of the month Michelin

TM talks to head of UK communications, Peter Snelling, and factory manager, Peter Marsh, about the Michelin bus and truck tyre factory in Stoke-on-Trent.

Aircelle – High-tech hidden in the hills Sealine International – Moving targets Quinn Group – Quinnovation Amphenol – The military-industrial complex Armitage Pet Care – Dogged by success Alumet Systems – Having a blast Comau Estil – Manufacturing Advanced Oclaro – Laser precision

74

85 91 94 97 101 106 111 113

3

Newsinbrief T his m o nth in hist o r y

On the 25 Jan, 1979, 25-year-old Ford Motor assembly line worker, Robert Williams, was killed on the job in a Flint, Michigan, casting plant. It was the first recorded human death by robot. Williams died when the robot’s arm struck him as he was gathering parts in an area used by the robot. Williams’s family was awarded $10m in damages after the jury agreed that the accident had occurred because of a lack of safety measures, including one that would sound an alarm if the robot was near.

E c o n o mics

A PricewaterhouseCoopers analysis of the recently released national corporate insolvency statistics found that the number of manufacturing insolvencies in Q4 of 2009 has shown a decrease of over 10%. Manufacturing insolvencies are now at their lowest level in over two years — the last time figures were at this level was Q4 2008. Metals and machinery have been hardest hit, followed by textiles and agricultural products.

Firms are bracing themselves for increased competition post recession and will now concentrate on building up orders, according to a survey of 610 £1m plus turnover businesses by Barclays. The Connecting Business survey found that 58% of leaders believe competition in their industry is set to increase, including 27% who expect their sector to be ‘much more competitive’. Just four per cent believe the post-recession economy will be ‘much less competitive’ for their business.

A new joint survey from EEF and accountancy firm BDO has revealed that one in seven British companies have moved some of their operations back to the UK during the past two years. The apparent trend for business repatriation has occurred due to companies finding a reduction in the benefits of overseas production. The survey has also demonstrated an increase in the focus on innovation to increase competitiveness, particularly among small and medium sized companies. The report revealed that 21% of companies now cite innovation as key, a figure that has doubled from 10% in the past 2 years.

4

FINANCE

RBS opens £1bn fund for manufacturers Royal Bank of Scotland has announced the launch of a £1bn fund dedicated to UK-based manufacturers.

Designed in conjunction with Natwest, and aimed at kick-starting growth in a traditionally under-financed sector, the interest-only loans will be made available via a series of releases, for periods of two or three years, with the first release carrying fixed rates of 3.4% and 4.3% respectively.

Manufacturers borrowing across three years will have the option to partially repay in their final year, while both lending facilities will attract a flat arrangement fee of 75 basis points — applicable for any loan drawn within the fixed rate.

Accessible in sums between £250,000 and £25m, and with RBS borrowing capital from its own balance sheets — i.e. not government-sponsored — to

support UK manufacturing, the fund is primarily geared towards borrowers’ investment for growth; be it through acquisition, capital expenditure or increased working capital.

Peter Russell, head of manufacturing & infrastructure at RBS, said: “We are delighted to launch this fund in support of UK manufacturers. We are under no illusions that recovery across the sector will be easy or straightforward, but from taking to our customers we do see that investment for growth, in whatever form this might take, is back on the agenda.

E n v ir o nment and energ y

Offshore wind boost The UK Government has granted rights in nine UK coastal zones for the world’s biggest expansion of wind energy.

The move will allow for construction of up to 6,400 offshore wind turbines in areas including: Moray Firth, Firth of Forth, Dogger Bank, Hornsea, Norfolk Bank, Hastings, west of the Isle of Wight, Bristol Channel and the Irish Sea. The new turbines will have the capacity to generate up to 32GW of clean electricity, which is enough to supply electricity to nearly all the homes in the UK. In total, the project could be worth £75bn and support up to 70,000 jobs by 2020.

The next generation of offshore wind farms that will

be developed under the new licenses will require larger and more efficient turbines, capable of generating 5MW of power.

Prime Minister Gordon Brown described the Government’s wind energy policies as world leading, saying it would provide a substantial new platform for investment in UK industry.

“The Government will work with developers and The Crown Estate to support the growing offshore wind industry and help remove barriers to rapid development,” Brown said.

ManufacturingNews A ut o m o ti v e

Scrappage nearing end More than three quarters of the budget for the Government’s car scrappage scheme has been exhausted according to figures released in January.

The remaining funding will cover just over 80,000 new vehicles with the Department for Business to allocate the remaining order quotas to manufacturers based on brand popularity.

“I’m pleased to see that the scheme has been taken up by so many people, supporting our automotive manufacturers through a very difficult time,” said Business Secretary, Lord Mandelson.

“With limited orders as we near the close of scrappage there is a risk of disappointment for car buyers. I would urge people who are still keen on taking part to put their orders in as soon as possible as time is running out.”

The UK scheme, with £400m from Government and matched funding from car manufacturers, is intended to provide immediate support on a short-term basis to boost the car industry and its supply chain during the downturn. It has also removed older vehicles from the road and encouraged consumers to invest in new, safer, and potentially more environmentally friendly models.

F o o d and drink

Sweeter offer buys Cadbury Birmingham based chocolate maker Cadbury has accepted a revised takeover bid of £11.5bn from its long term pursuer, the US food conglomerate, Kraft.

While the bid values the company at 840 pence per share, Cadbury shareholders who opt to take extra cash rather than an allotment of Kraft shares will receive only 799p a share.

The recommended cash and shares deal, which rose to 850p including a 10p dividend, has now slumped to 827p plus dividend as a result of a decline in Kraft’s share price.

Cadbury chief executive, Roger Carr, accepted the Kraft offer after a long battle against the hostile bid. “We believe the offer represents good value for Cadbury shareholders,” said Mr. Carr.

The deal signals an end to a saga that first began in August last year. Kraft’s previous two bids of £9.8bn and £10.5bn for

the Dairy Milk maker were both rejected as “derisory”.

Kraft has expressed a desire to protect jobs at Cadbury’s plants in both Birmingham and Bristol but Britain’s biggest union, Unite, has said it is “concerned” at Kraft’s levels of debt.

Cadbury shareholders now have until February 2 to formally accept the offer at which point Kraft will need to borrow an estimated £7bn to complete the deal.

Newsinbrief F o o d and drink

Premier Foods has been fined £750 after a woman found the remnants of a disintegrated oven glove stuck to a loaf of Hovis bread.

The fine was issued at Omagh Magistrates’ Court in Co. Tyrone, Northern Ireland, near where the offending product was discovered.

A Premier Foods Spokesperson commented: “We go to great lengths to assure the quality of our great British brands but on this isolated occasion we have fallen short of our usual high standards and apologise for any distress caused to the customer.”

Big Bear Group – the Leicester based producer of nostalgic food brands – has announced it plans to float on the London Stock Exchange in the coming months in a bid to raise capital for growth. “We are very excited about bringing our portfolio of instantly recognisable food brands to the market as we continue to extend and develop them,” said Big Bear joint chairman John Jackson. “We believe that the flotation will increase our flexibility to access capital markets, raise our profile and enable us to acquire further interesting but forgotten and under-utilised brands as attractive opportunities are identified.”

H ea v y machiner y

The European Court of Justice (ECJ) has issued its judgment in the case of FG Wilson/ Caterpillar, concerning incorrect customs declarations, which were referred to the ECJ by a UK Tribunal. The ECJ found in favour of FG Wilson/Caterpillar in a case concerning the impact of using an incorrect customs procedure code on customs declarations when goods are being exported from the European Union. FG Wilson/Caterpillar had been authorised by HM Revenue & Customs to use a special customs procedure which allowed the company to import duty free parts used in the manufacture of machinery ultimately destined for export outside the EU. FG Wilson/Caterpillar had used an incorrect customs procedure code. However the ECJ held that while the errrors could give rise to customs debt those charges may be repaid by ammending the declarations.

5

Newsinbrief AUTOMOTIVE

Bus and coach manufacturer, Optare, is to supply two plant oil fuelled Tempo model buses to Courtney Coaches of Bracknell.

These will be the first 12 metre buses to be produced by Optare to run on this fuel although Courtney already use a number of Optare’s smaller plant oil powered vehicles.

Extensive in-service experience of the fuel

by Courtney Coaches has shown that it can reduce carbon emissions by 70%-90%, which is considerably in excess of the government’s 30% target for ‘green’ buses.

The UK automotive market is likely to struggle this year while other regions have received mixed predictions for 2010. A new report from PricewaterhouseCoopers says that while some car manufacturing regions such as China and America are likely to experience positive growth in 2010, Europe is likely to encounter another difficult year. According to the report, the European sector’s dependence on scrappage schemes during 2009 has preserved an abundance of capacity. Industry adviser, Autofacts, currently estimates that 6.5 million units of excess capacity exist in the EU alone.

New legislation, designed to ensure that all waste industrial and automotive batteries are recycled in the future, is now in effect. The legislation which came in to effect on 1 January requires producers of industrial and automotive batteries to arrange the collection, treatment and recycling of such batteries, free of charge, if requested by business end-users and final holders. The new rules require any persons placing batteries on the market to register as a producer of batteries, and report on waste batteries collected and sent for recycling.

An agreement between Regional Development Agency One North East and car manufacturer Nissan has outlined plans for the roll-out of electric vehicles and infrastructure in North East England. Under the agreement, One North East will install at least 619 publicly available, ‘future-proof’ charging points by January 1, 2011. Electricity at the charging points will be provided free of charge until March 31, 2012, or until an itemised billing system becomes available.

6

DEFENCE

NG UK wins Brunei contract Northrop Grumman Corporation UK has been awarded a contract by the Ministry of Defence of Brunei Darussalam to provide a joint operations centre command.

The contract stipulates the supply of an integrated Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) headquarters system and a deployable Joint Operations Centre (JOC) — together with the provision of training and incountry support.

The JOC will provide the Royal Brunei Armed Forces (RBAF) with a facility that will deliver command and control capability for military commands and civil organisations at both national and international level, and will be interoperable with its NATO and ASEAN allies and coalition partners.

The award follows the completion of a rigorous phase of system assessment in which Northrop Grumman successfully

demonstrated the capabilities of its technical solution.

“We are delighted to have been selected to provide this important enhancement to Brunei’s defence capabilities. It will not only help improve national security and the protection of its natural resources, but also will allow the RBAF to be a lead nation in regional and coalition activities,” said Paul Davison, director Defence Systems Europe for Northrop Grumman’s Information Systems sector.

FINANCE

£125m fund for North East The Finance for Business North East Fund was unveiled

by Rosie Winterton MP, Minister for Regional Economic Development and Co-ordination, at an event in Durham.

The £125m fund, formerly called JEREMIE, will underpin the growth of business start-ups, technology-based companies and growing smaller businesses — helping to create jobs and prosperity for the region through targeted loans and equity investments.

Over the next five years, it is expected to support up to 850 small and medium-sized North East companies, with the aim of creating more than 5,000 jobs.

The European Investment Bank is committing £62.5m into the fund, with £44.25m coming from the European Regional Development Fund 2007-2013

and £18.25m from regional development agency One North East.

Finance for Business North East comprises six separate funds, namely: NorthStar Equity Investors £15m Technology Proof of Concept Fund and the £20m Seed Fund.

IP Group - £25m Technology Fund from offices in Newcastle.

Rivers Capital Partners - who will manage the £7.5m Angel Match Fund.

FW Capital - £20m Growth Plus Fund.

NEL Fund Managers - £20m Growth Fund.

ManufacturingNews EVENTS

The future of UK manufacturing In early December RBS and BDO presented The Future of Manufacturing 2009, with a panel group offering their opinions as to the requirements of the UK manufacturing sector.

Chaired by Tom Lawton, head of manufacturing at BDO, the event included discussions by industry experts from global companies including Dyson and Caparo.

International and commercial director of Dyson, Rt Hon Sir Richard Needham, spoke of the need for the UK to recognise the value of products and to understand new “diamonds” that exist within the manufacturing sector. He said that the cultivation and further development of those successful areas will be largely dependent on the incorporation of “disruptive technology” in UK products.

He also alluded to the importance of understanding the customer, particularly the importance of maintaining decent margins and not being afraid to market a product with a higher cost and a

higher margin. “Think always about what your customer needs,” said Needham. “People have lots of different customers. In the case of Dyson, our customer is obviously the public, but also the retailers. So what does our retailer want? They want to maintain their margins. We think through what our customer wants, but [are] driven by our margins and our technology and by the people that we employ.”

Also speaking was the Hon Angad Paul, Chief Executive of Caparo plc, a $1.2bn group specialising in the manufacture of steel, automotive and engineered products. According to Paul, until recently manufacturing in the UK ceased to be of importance.

However, he warned that for the UK to remain relevant in the global economy it will need to rely more

heavily on its manufacturing base.

“We still have a lot of skills that other people and other countries recognise.

[They] have been built on British engineering and British knowledge.

We need to recognise those skills, give them a value and then the currency — which has been artificially inflated for too long — will help us.

Our future depends on our ability to make things better than others.”

In terms of more successful lobbying of government, EEF chief economist, Steve Radley, suggested manufacturers should more actively engage with members of Parliament to ensure their support for the sector.

“I think in terms of getting government to understand manufacturing, a lot of this lies in our own hands,” he said.

“Actual manufacturers need to get out and spend a lot more time talking to MPs and prospective MPs. Get them to understand what we are doing and the challenges we face.”

A er o space and defence

Rolls-Royce wins Typhoon contract A 10-year, £865m contract has been placed with Rolls-Royce for the engines on the RAF’s Typhoon.

The Typhoon engines — the EJ200 — will be maintained and supported under an arrangement that will help to sustain up to 3,000 highly-skilled jobs.

Work on the engines will be based at RAF Coningsby, the Typhoon Main Operating Base, and from later this year RAF Leuchars — the new Forward Operating Base for the aircraft.

The remaining work will be undertaken at Rolls-Royce Ansty in Leicestershire and Rolls-Royce Filton in Bristol.

The contract represents the culmination of the work undertaken with Rolls-Royce on support for the engine, and will play a major role in ensuring the availability of the Typhoon fleet to meet its standing and future operational commitments. Future support of the Typhoon aircraft is focused on building partnering arrangements with BAE Systems and Rolls-Royce for both the aircraft and engines.

According to the Minister for Defence Equipment and Support, Quentin Davies, the contract will ensure Typhoon aircraft continue to meet their operational commitments as a cornerstone of the UK’s air defence capabilities.

“This is excellent news for both the MoD and UK industry with the sustainment of some 3,000 jobs over the

ten-year term of this contract,” said Davies. “The Typhoon programme directly employs some 15,000 aerospace and engineering staff in some of the UK’s leading companies, and many more throughout the supply chain.

Today’s announcement is important militarily and industrially to the UK.”

The RAF Typhoon EJ200 engines will be maintained by Rolls-Royce

7

Newsinbrief R emanufacturing

An iPod recycling service has been established to cope with the volumes of the used Apple music players that are being rejected by fashion conscious music lovers.

The concept has been launched by online mobile phone recycler, mopay.co.uk. The company accepts all iPod models, from the early iPod Classic to the current iPod Touch.

Consumers can expect to be sent cash or vouchers worth up to £60 for both working and non-working devices depending on the make, model and condition.

DEFENCE

A Stoke machinery specialist has landed a deal to help a Canadian shipping giant repel pirate attacks. Trentham-based Mirage Ltd is supplying remote controls for Expedo Shipping Corporation, which will be used on its New Century tanker to operate powerful water canons designed to fight off raiders. Mirage managing director Nick Mountford said: “This is a relatively new market for us but we’re trying to diversify our products. We predominantly focus on the automotive sector at the moment, but we’re venturing out into other forms of lean manufacturing systems.”

HMS Edinburgh has entered the dry dock in Portsmouth for a major overhaul under a £17.5m contract with BAE Systems. As the last of the Type 42 destroyers to undergo an upkeep period, the move marks the end of a maintenance schedule for the Class that began in 1979. During the extensive refit, her hull will be coated with a super-efficient Sigma 990 paint to make it glide through the water more easily and an underwater spoiler known as a transom flap will be fitted to the stern — which together will cut fuel consumption by up to 15%.

Nissan has sold more than half a million Qashqai models in Europe

8

D efence

QE carriers take off Contracts worth £333m have been awarded by the Aircraft Carrier Alliance to British manufacturers to help build the Royal Navy’s new Queen Elizabeth Class aircraft carriers.

Five sub-contracts have been awarded to suppliers from Glasgow to Portsmouth for equipment to be installed on the ships and services for their assembly, bringing the total value of sub-contracts awarded so far on the programme to almost £1.1bn.

These contracts and subcontracts represent the vast majority of the equipment orders for the Queen Elizabeth Class Carriers, with the two future aircraft carriers expected to form the cornerstone of the UK’s naval capability, given their expected service life of approximately 50 years.

Sub-contracts have been awarded by the ACA to:

Imtech Marine & Offshore Ltd in Billingham, Teesside and Portsmouth for heating, ventilation and air conditioning, worth £120m.

Ship Support Services Ltd based near Rosyth for paint and scaffolding for the build process, worth £105m.

Henry Abrams in Glasgow for transport of sections of the ship from the yards across the UK to Rosyth for final assembly, worth £85m.

Tyco in Manchester for fixed fire fighting systems, worth £15m.

AEI Cables in Birtley, Co Durham for much of the 2,500 km of cabling to be installed, worth £8m.

AUTOMOTIVE

Toyota to cut staff as Nissan ramps up Within a 24 hour period Toyota announced plans to cut 750 employees at its Burnaston plant while Nissan revealed it will launch a temporary extra third production shift at its manufacturing plant in Sunderland.

Toyota, which currently employs 3,800 people at the Burnaston site, say it will try and fill the reduction quota with voluntary redundancies.

Burnaston has been operating short production hours for much of last year. Toyota says production volumes will not go down during this period and only that it will lose its excess capacity.

The measures, it says, are part of an attempt to make the business more sustainable long term.

In comparison Nissan’s plans to launch the additional night shift in May is in response to continuing high demand for the company’s Qashqai crossover vehicle.

Throughout 2009 the plant has been operating on two shifts but Nissan has revealed that sales of the Qashqai model have reached levels where demand is outstripping supply. The model will also be undergoing an extensive update, which will be launched in March, which the company hopes will continue its popularity.

To support the additional shift, recruitment will begin next month for 400 new fixed-term manufacturing posts at the plant and allow retention of an existing 160 temporary staff. Nissan has said that it also anticipates that additional posts will also be created across its supply chain.

ManufacturingNews A re o space & D efence

A D S to open Middle East offices A|D|S, the UK’s AeroSpace, Defence and Security trade organisation, announced at the Bahrain International Airshow its intention to open offices in the Middle East to represent its UK members.

One such location is Bahrain, which will deliver a further step in the international strategy of A|D|S, augmenting its existing international offices in Toulouse, France, and in New Delhi and Bangalore, India.

Ian Godden, chairman of A|D|S, said, “The Middle East is a vibrant and growing market for the world-leading products that our members deliver for their customers. The UK aerospace, defence and security industries, as number one in Europe and second only to the US globally, see the Middle East as a key source of future partnerships and mutually-beneficial business arrangements.

“With a large number of our 850 members coming from the agile and innovative small and medium-sized enterprise sector, our office in Bahrain will offer them an effective base in the Middle East.”

Options relating to potential partner organisations, and the Chairman, A|D|S precise nature of services Ian Godden to be offered, are currently being finalised.

A er o space

Future-proofing the UK Lord Mandelson met last month with A|D|S to discuss the importance of supporting long-term, strategic planning between the government and UK industry.

The UK aerospace industry is worth £20bn per year to the economy, employing more than 100,000 people across the country.

Over the next 20 years the global market is estimated to be worth $3.1trillion — it is therefore vital that Britain seeks to promote global competitiveness for the sector, as well as ensuring the continuity and effective spending of R&D funding. This is to be done through the development of a common approach between industry and government to ensure sustained investment.

In the meeting, Lord Mandelson said that he recognised the importance of the UK industry to the British economy, and the need for companies to be able to compete in the global market.

As a result of the meeting, Lord Mandelson has agreed to co-chair regular high-level dialogue between the most senior levels of government and

industry, specifically to focus on global competitiveness and R&D funding.

Alex Dorrian, president of A|D|S and CEO of Thales UK, said, “The aerospace industry is a jewel in the crown of the UK economy, and a cooperative approach with Government is essential to preserve this. Our industry is fortunate to work with Lord Mandelson, who understands our industry, and I am encouraged by his swift decision to set up a specific forum to focus on these important issues.”

INSURANCE

Insurance crisis liable to perfect storm Manufacturers running increased risks in the wake of the financial crisis, and failures by company management and the insurance industry to address them effectively could create a ‘perfect storm’ in the commercial insurance market, says research firm Mactavish.

The first round of its Sector Risk Research Programme, undertaken in conjunction with PwC and Citi Investment, involved consultations with senior executives at more than 250 major companies in the UK. Research in the manufacturing sector focused on independent UK companies between £50m and £5bn in turnover across a wide range of product categories. Key findings include: A sharp surge in outsourcing and overseas joint venture activity with the recession acting as a

catalyst, significantly increasing supply chain complexity.

Supply chain vulnerability has increased. Supplier failures, enforced single sourcing, reduced stock levels, cutting of excess production capacity and other issues were all cited as reducing resilience.

In response to falls in demand, many firms have targeted new market segments, launched new products and extended product provision into a wider service offering. New products and markets typically increase failure rates while service offerings create new insurance requirements.

Firms have faced pressure to accept extra liabilities in areas like product warranties, recall costs, design risk, consequential loss and so on. More than a quarter of manufacturers cited such pressures having already caused them to accept more risk.

9

Datesfor yourdiary February

2

BT is holding a free event focusing on inclusive design. Speakers include Stephen Timms MP and Professor John Clarkson. For information contact Katie Shaw on 020 7544 3080 or katie.shaw@fishburn-hedges.co.uk

2-7

ADS will be featuring at the Singapore Airshow.

For information visit http://www.singaporeairshow.com.sg/

7&10

EDF is holding Carbon Reduction Commitment workshops at Sheffield and Cambridge. For further

information visit: http://www.eef.org.uk/events/current

10-11

The Southern Manufacturing & Electronics show is being held at Farnborough.

For further information visit: www.industry.co.uk MAS South East will also be holding a free manufacturing review at their stand, located at J15.

Throughout February The Institute for Manufacturing will be hosting events at Lowestoft, Great Yarmouth and Basildon concerning supply chain. For times and further information contact Jo Griffiths on: 01223 748 260 or jg393@cam.ac.uk

March

2-4

CRR is hosting the Inaugural International Remanufacturing Congress exhibition. Contact Lesley Maddox-McNulty on 01296 423915 or lesley.maddox@remanufacturing.org.uk

2-4

Saint Gobain will be participating in Ecobuild, to be held at Earls Court in London. For further information visit: http://www.ecobuild.co.uk/

3-7

The ADS will be featuring at the India Aviation show being held in Hyderabad http://www.india-aviation.in/main.htm

11-13

The Big Bang Young Scientists’ and Engineers’ Fair will be taking place at the Manchester Central Convention Complex. For more information visit: www.thebigbangfair.co.uk

16-18

The Institute for Manufacturing will be hosting a three day training course focusing on Technology & Innovation Management, to be held at Jesus College, Cambridge. For information contact: ifm-events@eng.cam.ac.uk

10

E n v ir o nment

£125m green fund launched The UK Innovation Investment Fund is off the ground with the first closing of the £125m Hermes Private Equity environmental innovation fund.

Having taken only seven months for the UK Innovation Investment Fund (UKIIF) to launch the first of two funds, the Hermes Environmental Innovation Fund, which has already raised £125m, will continue to seek further funding from investors.

The Environmental Innovation Fund, managed by Hermes Private Equity, will now start investing in low carbon and clean technology funds and co-investing in companies, providing much needed venture capital to help these innovative businesses grow. The Hermes Fund will focus on investment opportunities aimed at increasing the efficient use of resources — both renewable and non-renewable — at all stages of production and consumption.

Over the past decade, the UK has emerged as a European frontrunner in alternative energy investment and is well positioned to further develop a sustainable market competitive globally.

According to figures from the Carbon Trust, for example, the UK is now the sixth largest low carbon and environmental economy in the world, with 3.5% of the global market share.

Prime Minister, Gordon Brown MP, said, “The UK has a wealth of innovators and entrepreneurs seeking to create the businesses of tomorrow, businesses that will make the UK a world-leader in low carbon innovation and industry and help to tackle some of the biggest challenges we face around energy and climate change. This fund will provide substantial investment where it is needed and deliver strong returns for investors.”

Hermes Private Equity CEO, Susan Flynn, commented, “Increased awareness of environmental issues and policies to tackle climate change presents a real opportunity for investors and Electric vans by the innovative Coventry-based Modec companies we will invest in. At this stage in the economic cycle there are many forward-looking companies who may not have funding available to them.

ManufacturingNews Manufacturingoutput

Newsinbrief A er o space

Britain has finally emerged from the longest recession in modern history but the recovery has only been minimal.

The growth of only 0.1% in the fourth quarter of 2009, as compared to the previous quarter, was far below the expectations of many economists who had suggested a rebound of up to 0.4%.

Today’s figure is only the first of three readings of GDP by the Office for National Statistics (ONS) for October to December 2009 and according to some sources the reading is so low that a revised version may reveal Britain is still in recession.

Britain is the last big economy to emerge from a full-blown downturn and had experienced six consecutive quarters of contraction.

The United States, Japan, China, Germany and France all climbed out of recession in the third quarter, between July and September, last year. The ONS will publish its revised reading on February 26 and a final figure in March.

“The Q4 GDP figures are a major blow to hopes that the UK economy had emerged decisively from recession in Q4,” said analyst Jonathan Loynes at Capital Economics. “No doubt some commentators will claim that the figures are under-estimating the true strength of the recovery and will be revised up in time. That is certainly possible. But it won’t change the big picture of an economy still operating way below both its pre-recession and trend levels of output.”

The main drivers of the minimal growth in the economy came from the retail and motor sector, both of which have been propped up by government interventionist schemes such as the heavily publicised scrappage scheme.

David Hudson, London Head of Formal Insolvency, Baker Tilly Restructuring and Recovery LLP, said that while the figure is positive it means little on a practical level. “The stark fact is that many businesses will fight to survive during 2010. Whilst any indicator of an improvement in our financial health is good news, there is still a long way to go. HMRC recognises this with its ‘time to pay’ agreements deferring payment for over 25,000 companies that have fallen into arrears; other creditors and lenders need to be

aware that the health of the country as a whole still has a long way to go.

“Strong working capital disciplines will remain key in any true recovery phase. The major lending banks will stay vigilant to recognising robust businesses planning, while the management of UK PLC faces the challenges of finding the cash to fund growth, which is inherent to any recession recovery period as confidence levels improve.

“Motor dealers, for example, will be more concerned at the end of the scrappage scheme on their franchises than a 0.1% increase in the economic health of our country and retailers will continue to be more concerned at the rising levels of personal insolvency and continued high level of unemployment meaning that consumer spending remain tight. Only when the capacity gap sufficiently narrows, which we don’t expect until the second half of the year, will the majority of the manufacturing base see genuine recovery.”

An increase in demand from abroad has inspired the UK’s first rise in production in over two years, according to the latest quarterly Industrial Trends Survey by the CBI. The balance of output – the difference between the number of firms that said it rose and the number of firms that said it fell – was +11.

This was the strongest recording since January 2007. The balance was garnered through 31% reporting a rise and 20% reporting a fall. The rest saw no change.

Export orders are up with a balance of +6 (30% up, 24% down), though a rounded balance of -9% for domestic demand (18%, 26% down) means total orders are at a similar level to what they were in the previous survey.

Optimism over expert prospects for the year ahead is highest since 1995.

Ian McCafferty, the CBI’s chief economic adviser thinks the weaker pound may finally now be paying dividends for UK exporters. However, manufacturers might not have seen an end to their troubles just yet.

In the Centenary year of the of the Royal Aeronautical Society’s Medals & Awards, the QinetiQ Vectored-thrust Aircraft Advanced Control (VAAC) Harrier team received a Team Gold Medal – the world’s long-standing aerospace awards for achievement, innovation and excellence.

The Gold Medal was awarded to the QinetiQ team for development and flight test activities that have prototyped guidance, control and automatic landing systems for the short takeoff & vertical landing variant of the Joint Strike Fighter, coupled with its development of the shipboard rolling vertical landing technique for recovery to the Future Carrier.

LeGAL

Food manufacturers in the East Midlands can now get free legal advice from Nottingham based lawyers Roythornes via a dedicated helpline. The service has been arranged by trade organisation The Food and Drink Forum for its members. Briony Clarke, Food and Drink Forum operations manager, said: “Some of the most common problems our members face are related to the law, whether it’s about employing staff, chasing bad debts or contract negotiations. Having an experienced legal team on board, with specialised food sector knowledge will prove to be a great help. This is a great addition to our membership benefits.”

ENERGY

The global semiconductor manufacturing business is set for recovery in 2010, value chain research and advisory services provider iSuppli has claimed. Research conducted by the firm suggests that worldwide spending on semiconductor manufacturing equipment will rise by 46.8% in 2010 compared to last year, despite three years of decline. The electronic component industry suffered a hit in the first two quarters of 2009, but has since rallied to record two subsequent quarters of improved factor utilisation, putting figures in a similar position to where they were pre-recession.

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ManufacturingAppointments UK Appointments

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EEF Terry Scuoler

Terry Scuoler has been appointed as the new chief executive of EEF. As MD of a member company, Ferranti, Scuoler has been associated with EEF for some years in the North West and he was also a member of the former EEF Council, and since May 2009 a non-executive director of EEF’s main board.

Scuoler joined Royal Ordnance in 1984, working in a number of divisions in positions

such as European marketing manager.

He has also held positions at Ferranti Technologies, turning the company into a successful business with high profitability.

Scuoler, who has a passion for manufacturing and engineering and its critical role in the UK economy, has a degree in economics from Glasgow University.

Cobham John Devaney

Cobham has announced the appointment of John Devaney as an independent nonexecutive director and chairman designate with effect from 1 February 2010. Devaney is currently executive chairman of National Express plc, a position held since April 2009 and non executive chairman of the

National Air Traffic Services Ltd, a position held since 2005. Devaney will replace David Turner at the conclusion of the Annual General Meeting, to be held on 6 May 2010, by which time he will have relinquished his executive responsibilities at National Express plc.

Rolls-Royce Torsten Mueller

Rolls-Royce Motor Cars has announced that Torsten Mueller will join the company as its chief executive officer. Mueller will assume the role at the end of March 2010 from Tom Purves, who will retire after 25 years service with the BMW Group. During his more than 20 years with the Group, Mueller has held a number of management positions in the sales

and marketing division, and was instrumental in brand and product management for MINI between 2000 and 2003. In 2004, he assumed responsibility for central marketing and brand management at BMW. Mueller has been running BMW global product management since April 2008, as well as parts of its after-sales business.

Cranfield University Paul Tasker

Cranfield University has appointed Paul Tasker as royal academy of engineering visiting professor in integrated system design, a growing area of significance in the manufacture of competitive products.

Tasker will be working closely with Professor Rajkumar Roy, Head of Cranfield’s manufacturing department, to develop the integrated maintenance systems technology initiative.

Dr Alan McLenaghan will join the SGCI team as senior vice president for technology for Saint-Gobain Containers. McLenaghan has most recently served as the global vice president for manufacturing and managing director for Saint-Gobain Glass UK Ltd. He also has served as the manufacturing excellence director for the global business in Paris, France. Prior to his current role, McLenaghan has held positions as manager of manufacturing, site operations manager and site director. McLenaghan’s locations have also received awards for development of human capital for training new manufacturing and engineering teams.

Aspen Technology has announced that John Taylor has joined the company as vice president sales operations and business consulting for Europe, Middle East and Africa (EMEA). Taylor comes to AspenTech from SAP, where he served as vice president of process industries for the EMEA region.

Catherine Milner MIOM, associate consultant at Inventory Matters Ltd, has been appointed as the new chairman of The Institute of Operations Management. She succeeds John Theophilus FIOM. Milner, a chartered engineer, comes to the office after involvement with IOM since the mid-1980s and has worked in the UK and Europe for a number of organisations in aerospace, telecommunications and petrochemicals.

PTC has announced that Marc Diouane has been named senior divisional vice-president Europe and Asia/Pacific and will continue to report to Paul Cunningham, EVP worldwide sales. Diouane will be responsible for the management of the company’s operational divisions for these markets.

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

International Appointments

Lincoln Electric Holdings has named Richard J. Seif as senior vice president, global marketing and product development. In this new role, Seif is adding responsibility for directing the company’s international product strategy and development programs in its market regions around the world to his current global marketing and automation strategy duties.

The big picture Manufacturing Footprint Strategy Paul Christodoulou Institute for Manufacturing

Manufacturers know business is not about gambling, it’s about taking calculated risks. But Paul Christodoulou from the University of Cambridge’s Institute for Manufacturing says companies can stack the deck in their favour by ensuring they develop the right configuration of manufacturing activities around the globe.

No-one

in business would admit to making an ill-informed wager. Firms spend a great deal of time and money improving factory operations, ensuring they’ve adopted the latest lean methodologies and then outsourcing or offshoring to gain further cost benefits.

Yet by not addressing the strategic design of their total operational network, or manufacturing footprint, they could be gambling on the future prosperity and longevity of their company.

The manufacturing footprint is the collection of plants, assets, activities and operations used by a business to carry out its functions. In most cases, these are inherited or built slowly over time through the gradual evolution of the business or through mergers and acquisitions. In an ideal world these networks would be designed from the ground up, enabling cost savings to be built-in from the start.

Plant locations could also be selected to capitalise on access to growth markets or knowledge centres.

In the real world most manufacturers have to play the hand they were dealt, making the most of what they have. Even if you wanted to optimise existing networks, how would you go about it? The critical criteria that determine global footprint design vary widely. For example some firms, such as McLaren, the high-cost Formula One company behind the F1 supercar, will see the ability to rapidly source quality components as a determinant factor.

Operating in the highly competitive motorsport industry, the company is judged by success on the track. Its racing cars, each boasting around 13,000 parts, must be customised for each circuit on the Grand Prix calendar. McLaren manufactures 90% of these parts in-house, and the company may require 600-800 new design parts each week. The company has built its manufacturing strategy around extremely flexible and responsive in-house capability supported by a close network of trusted, specialist suppliers to ensure they can meet the demands of the race team.

Economies of scale For others it is the need for economies of scale in production that is more important. Taiwanese company Hon-Hai, the world’s largest contract manufacturer for consumer electronics, is one

14

For more details visit www.ifm.eng.cam.ac.uk

such example. It has enjoyed spectacular growth, largely via the outsourcing and offshoring policies of its major clients including leading brands such as Apple, Dell and Sony. It has grown a formidable global footprint of operations including around 40 major plants across Asia, Europe and the Americas, employing over 200,000 staff developing and operating advanced, proprietary processes. Hon Hai’s emergence has altered the balance of power in this ultra-competitive market and the company has built an increasingly profitable business model.

Each company must tailor its footprint strategy to suit its particular needs, but research at the IfM has led to a structured way of thinking about this important element of strategy that may be helpful to other companies considering similar projects.

Both McLaren and Hon-Hai have at one point asked a very basic question: what are our core business imperatives? For McLaren, it was the ability to put a winning sports car on the track anywhere in the world. For Hon Hai, the ability to meet the increasingly sophisticated manufacturing demands of its clients. In both cases, the companies have taken a long term view of the most beneficial configuration of its manufacturing network. Footprint strategy needs this long term perspective. The process will involve major investment decisions for everything from new production lines to complete plants.

Both McLaren and Hon-Hai also asked themselves the make-or-buy question, that is, which skills, resources or assets necessary to core activities should be kept or brought in-house (make) and which should be sourced externally (buy) and weighing up the strategic value against the likely effectiveness of any supplier. In McLaren’s case its need for rapid turnaround of precise design tweaks, coupled with stringent quality controls, meant it was preferable to do the bulk of the manufacturing inhouse and develop strong alliances with only a few specialist partners.

It is worth acknowledging that manufacturing footprint strategy is an ongoing process, not a one-off cost reduction initiative. Leading companies like McLaren and Hon Hai are treating this as a continuous transformation programme that needs to constantly respond to the changing business, technology and macroeconomic drivers. end

Businessasunusual Real change starts here Anand Sharma, Chairman and CEO, TBM Consulting Group

Sales

only fall by around 5%. And earnings for each quarter of 2009 improved by 35% or more over the same period of the previous year. The company even broke its quarterly earnings per share record, twice.

How did it accomplish that? Good question. It wasn’t easy. Changing the direction of any large corporation with so many constituencies and vested interests is excruciatingly difficult. Nobody takes ownership of systemic problems. Every shortfall is blamed on “corporate,” inexorable market forces or, worst of all, the customer. The discipline to uncover process abnormalities and fix them is pretty much non-existent. The problem, in short, is cultural. The end result: revenues fall, profits evaporate, panic ensues and costs are slashed with scant regard for the long term market impact.

Like a lot of multinational manufacturers, this company had been applying lean manufacturing and Six Sigma tools to reduce costs in various areas of the business for a number of years. Kaizen events — highly focused initiatives that pull together individuals from various parts of the organisation to tackle a specific endemic problem — had repeatedly generated some impressive operational improvements. The impact, however, was mostly isolated to a single factory, value chain, or business line. Double-digit cycle time, lead time and labour hour reductions that sounded hugely impressive during the report outs at the end of the week long events never seemed to trickle down to the financial statements.

Like most process improvement methodologies and tools, which tend to go in and out of fashion with changes in management, kaizen events are really a means to an end. They can generate a lot of excitement because participants are finally able to fix and streamline wasteful processes that they’ve had to work around for years. But no matter how successful, a single kaizen event or Six Sigma project rarely has a huge impact on an entire operation or business.

A multi-billion dollar company.

Forty three manufacturing facilities.

Thousands of employees.

Enter the global economic recession and severe market declines.

Revenues fall. But for this company, which has elected to remain anonymous for now, here’s where the story gets interesting.

Best results in worst year Frustrated by the lack of financial results, senior executives at our exemplar company realised that something important was missing from their approach to implementing lean. Their situation at the time was no different from that faced by thousands of other corporations around the world that have grown successfully by consistently supplying reasonable quality product to their customers. They had done a decent job of keeping up with production technology and good manufacturing practices, but had reached a sales and earnings plateau that tended to rise and fall with overall business conditions.

Taking advantage of the financial crisis that was just beginning to materialise, executives stepped back and performed a detailed analysis of the strategic direction of their businesses highlighting weak spots and identifying strengths and opportunities. They then selected the few opportunities that would have the greatest financial impact on the business, re-aligned their improvement efforts accordingly, and stopped all work that would not have a direct impact those opportunities. In large part these projects centred on being able to profitably fulfill lower volume orders and manufacture more customised and innovative products. Less than a year later, having grabbed market share from their less agile and financially hobbled competition, they have recorded some of the best financial results that they’ve ever achieved, and they did it during the height of an economic downturn.

A company is not lean because it has applied 5S, rapid equipment changeovers, one piece flow, U-shaped work cells, kanban, standardised work, root cause problem solving or any of the many other process improvement tools. A lean enterprise leverages such tools and methods to consistently achieve financial results that defy the overall market climate and conditions. Very few companies have achieved such results on a consistent basis. We can now add one more name to that select list. Perhaps it’s one of your competitors. end

Have your say at www.themanufacturer.com

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Economics Carbon leakage looms following Copenhagen Steve Radley, Director of Policy, EEF

Dawn

on Saturday 20 December did not bring the hope and optimism that so many had anticipated, or indeed expected from the Copenhagen summit. Instead, the world’s governments simply “noted” a 12 paragraph document named the “Copenhagen Accord”. The culmination of two years of technical and political negotiation, it was signed by merely 30 governments and, while the dust has settled, leaves the impact on British manufacturing no little clearer for it.

The Copenhagen Accord is the vaguest of documents. It establishes a commitment to attempt to restrict temperature increases to 2°C, sets monitoring and reporting requirements for all countries, and provides initial funding of $30bn over a three year period to assist developing countries in mitigating and adapting to climate change.

It is, however, the final two pages of the document which hold the most interest. They contain two empty annexes — one will record the emission reduction commitments of developed countries and the other will list the actions pledged by developing countries. The deadline for completing these tables is 31 January 2010.

On present intelligence, at least 50 countries are expected to state some sort of commitment in the Accord, and these are not to be sniffed at. The US, China, India and Brazil will, for the first time, internationalise pledges to tackle the causes of manmade climate change. Pundits predict that the Accord’s annexes will ultimately contain pledges to address 85% of the world’s greenhouse gas emissions, something inconceivable a year ago.

Yet it must not be forgotten that this document has no legal recognition. There is talk of this document being developed into a full international treaty, possibly at the next big global gathering in Mexico in October but, until then, pledges will remain just pledges. Unless they are enshrined in national law, we have only the promises of politicians.

In Europe, the debate is centred around its entry into the Accord. At the moment it has a target to cut greenhouse gases by 20% by 2020, with a promise to lift this to 30% in the event of “comparable” efforts by other developed countries. It seems likely that this will remain its position for the time being, and it is vital that it does.

A stricter target will impose even stricter targets and constraints on European industry, yet there is clearly no evidence of comparable effort.

With promises of a strengthened commitment to climate change summarily broken, Copenhagen 2010 was, by all accounts, a colossal letdown.

EEF’s Steve Radley considers where we go from here…

We had hoped that a sectoral approach would be considered in Copenhagen. By targeting key sectors on a global basis, competitive concerns could have been addressed in a rational way and underpinning an effective agreement by helping to broaden participation in global emission reductions. But governments failed to agree even a general statement on these approaches.

Therefore, as it stands, the Accord still leaves British industry exposed to the risk of “carbon leakage”, where investment, market share or production is driven into other economies to avoid the costs and limits to growth imposed by the regulation of greenhouse gases. This is not industry crying wolf; European governments, research institutions and credible academics recognise this threat. It is vital that the EU recognises that the risk of carbon leakage has not diminished following Copenhagen.

We believe the EU should now focus its efforts to further encourage policies which place industries in the US and the so called BASIC countries (Brazil, South Africa, India and China) to adopt comparable targets before any unilateral commitment takes place.

This more hard-headed approach will deliver greater action globally than the previous approach of leading by example, which clearly has failed.

Rather than policies that reduce industrial output, the UK government and the European Commission must strengthen industry by increasing financial support for Research Development and Demonstration (RD&D) projects to develop crucial breakthrough technologies which can be adopted worldwide. These will provide new jobs in Europe and yield substantial reductions in global emissions.

Sectors at risk from carbon leakage must also be given free allocations of emission allowances under the EU Emissions Trading Scheme. While it is inevitable that protectionist measures, such as border adjustment measures, will be increasingly under the spotlight we urge for caution.

In the UK, it is vital that the government does not place additional burdens on industry. The domestic ‘interim’ target — 34% reduction in carbon emissions by 2020 — already risks being meaningless in light of the lack of comparable effort being adopted elsewhere in the world, let alone the ‘intended’ target of 42%. The UK government must be alert to the fact that further burdens placed on industry now risks irreparable damage. end

Have your say at www.themanufacturer.com

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Assessing the Strategy The Government has launched several important strategies to support industry in the last 18 months, targeting areas where UK plc has comparative advantage and growth potential. Malcolm Wheatley asks how can manufacturers and tax-payers measure the value for money of these strategies?

18

Back

in July, with much fanfare, the Government announced an advanced manufacturing initiative aimed at helping manufacturers to seize the opportunities provided by emerging technologies.

Announcing investments totalling £151.5m, Business Secretary Lord Mandelson stressed the value that the government placed on the manufacturing sector.

The targeted initiatives in up-and-coming manufacturing technologies — such as in plastic electronics, aerospace, and silicon design — would provide, he said, “the support needed to create jobs in Britain, and export the best of British manufacturing design, technology, skills and innovation around the world.”

More examples came forth in abundance.

A £12m expansion of the Printable Electronics Centre in Sedgefield, which focuses on display technology, would create up to 1,500 jobs by 2014.

The Technology Strategy Board, too, would invest

Leadstory Assessing the Strategy

a further £5m in collaborative R&D projects as part of its High Value Manufacturing competition, in addition to the £24m invested earlier this year. And a £4m expansion of the Manufacturing Advisory Service (MAS) would help it provide a wider range of businesses.

Rolls-Royce fared especially well from the launch. It received £45m in funding to create four new advanced manufacturing facilities in the UK, creating and sustaining around 800 jobs.

Separately, it was involved in leading a programme, also valued at £45m, to support research and technology critical to the development of low carbon aircraft engine technology.

And finally, the company was once again involved in leading a collaborative programme to accelerate the development of specific manufacturing and product technologies.

Going under the acronym Samulet — Strategic Affordable Manufacturing in the UK through Leading Environmental Technologies — the programme was intended to focus on productivity and environmental improvements, including more efficient advanced manufacturing processes. Government support in Samulet totals £40m — £28.5 m from the Technology Strategy Board, plus a further £11.5m from the Engineering and Physical Sciences Research Council.

Tracking the ball While noteworthy for the scale of the sums involved, this initiative was far from the only one launched by the Government in the past 18 months. Beginning with the principle Manufacturing Strategy in September 2008, an Advanced Manufacturing Marketing Strategy administered by UK Trade & Investment designed to boost overseas sales of British advanced manufacturing companies

was announced in March, then the Low Carbon Industrial Strategy in July, followed by a composites strategy and plastics electronics strategy towards the end of 2009. Most recently, in January, came Going for Growth – yet another ‘big picture’ industrial initiative.

In short, after years of relative neglect in terms of direct support, the Government has returned to 1960s-style activist industrial policies, a move that The Economist newspaper puts squarely at the door of Lord Mandelson. Government, it quoted him as saying, must no longer “simply stand on the sidelines.” Instead, it must actively foster and nurture the growth that it seeks.

But is the Government getting value for money?

How well does that investment translate into jobs, exports, and real competitive edge? Which companies truly benefit, and what evidence is there that industrial policies like these really make a difference to the broader manufacturing sector?

The government is well-meaning, but how many times do you see the same big engineering employers involved when a manufacturing initiative is announced?

Terry Watts, chief executive, Proskills The answers are by no means obvious. Take RollsRoyce for example, which has been a big beneficiary of this government largesse. Over six months on, and arguably many more, given the pre-planning and negotiations that must invariably precede investments on this scale, what has the company actually achieved? How far advanced are the four manufacturing centres, or merely the plans for them, and how many new jobs are involved?

If Rolls-Royce knows, it is remaining tight-lipped.

While anxious to avoid being seen as stonewalling enquiries with a bland ‘no comment’, the company manages to achieve much the same impression by emphasising that there isn’t yet much to report.

Updates on some parts of the £151m project will not be available “for some months.” It is a fair to say that these high spend projects are long term, where accurate monthly reports are not always practical.

The Department for Business, Innovation and Skills, which awarded the funding last year, has said the location of the civil nuclear factory will be in South Yorkshire. A site is mooted for location in Washington in Tyne & Wear. A new factory to build military fan blades for the Joint Strike Fighter assembled at RollsRoyce Barnoldswick is part of the plan, although it’s not clear if the new facility will be built alongside the Barnoldswick site or elsewhere.

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Nor, it transpires, can government bodies such as the Technology Strategy Board cast very much light on Roll-Royce’s progress with Samulet either, despite holding some of the purse strings, and despite pointing to sophisticated and mature project management processes that should surely see metrics, which are return on investment-centric, pulled together.

Given that Rolls-Royce is in direct receipt of around £90m of taxpayers’ money, with a lead role in more, is it appropriate that there is little else to add on the detail? At the very least, it’s not hard to construe an argument that companies should be obliged to be a little more open about how effectively they are spending government money.

More worryingly, when the company is tasked with using public money to lead collaborative programmes involving suppliers and other manufacturers, why should it be so difficult to find out which other businesses that company is reaching out to, and the broader benefits in the supply chain that are emerging?

When bid applications are being assessed, there are usually a set of predefined criteria that often won’t be clear to the typical smaller company Paul Foot, patent attorney, Withers & Rogers

Grass roots experience While it is not simple to deliver the updates on strategy spending that some people demand, there is another point about the make-up of the strategy itself. Talk to some observers of British manufacturing industry, and it’s not difficult to come across criticism of the way that the allocation system works.

“The Government is well-meaning, but how many times do you see the same big engineering employers involved when a manufacturing initiative is announced?” says Terry Watts, chief executive of Proskills, the Sector Skills Council for the process manufacturing sector. “These are good companies, but they are only a part of manufacturing industry, not all of it. I’ve argued that there should be a moratorium on working with these companies, and future new money given to new names.”

Paul Foot, a patent attorney at patent and trade mark attorneys Withers & Rogers, is equally critical of the government’s approach – especially when it comes to benefits spilling down to smaller companies.

The game, he alleges, is quite simply rigged towards favouring a select few large manufacturers.

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“When bid applications are being assessed, there are usually a set of predefined criteria that often won’t be clear to the typical smaller company. But if you’re one of the ‘magic circle’ that knows what those criteria are, then writing the bid and getting the money is straightforward,” he says, referring to companies who are more often on the government’s radar for targeted support.

Steve Kelly, chief executive of high-tech printed electronics start up SmartKem, agrees.

After eight years heading a venture capital-backed manufacturer in the North West, he thought that obtaining grant funding would be straightforward – especially for a manufacturer working in printed electronics, one of government’s advanced manufacturing hot target industries.

Drawing a complete blank, he was forced to relocate the entire company 90 miles across the Welsh border, in order to secure equity funding from Finance Wales and grant aid from the Welsh

Advanced Manufacturing

– the Government responds Following a TM blog on the lack of visibility on key parts of this strategy, a spokesperson for the Department for Business, Innovation and Skills told The Manufacturer: “The projects announced in the package of measures for Advanced Manufacturing are progressing well. We have already announced the locations of Rolls-Royce’s new military fan blades and civil nuclear facilities, in Barnoldswick and South Yorkshire respectively, and will make an announcement on the location of their aeroengine discs and single crystal casting facilities as soon as possible.

There has been an additional £8m worth of funding for the Manufacturing Advisory Service (MAS) over the last year, of which £4m will specifically provide more specialist advice to manufacturers on competing for low carbon market opportunities. In the 12 months to the end of September 2009, MAS has helped over 8,500 manufacturers to achieve £120m in added value. We published a UK National Composites Strategy in November.

BIS is now working with stakeholders and partners on the implementation of key proposals of the Strategy, including establishing a National Composites Centre near Bristol. BIS will give further updates when we reach key milestones.”

Lead story Assessing the Strategy

Assembly. Both were made available in a matter of a few weeks.

“Government schemes fundamentally tend to reward safe ideas rather than lateral thinking,” he charges. “They tend to reward companies that know how to prepare documents and business cases in the right way, rather than ground-breaking, innovative ideas.”

This view can be countered by some elements of the Advanced Manufacturing strategy, which have supported projects like the Technology Strategy Board’s High Value Manufacturing competition, benefiting businesses such as Martin Goosey Ltd, a small electronics development company that has received £67,000 from the competition towards a £135,000 project that will develop a lower-energy process for the manufacture of printed circuit boards, using ultrasonic technology.

Top-down approach Not everyone shares Steve Kelly’s view. “It is easier to work with and support larger companies such as GKN, Airbus and Rolls-Royce,” observes Dr. Andrew Mair, chief executive of industry forum the Midlands Aerospace Alliance, which represents the interests of 260 aerospace firms in the Midlands.

“And in doing so, the government hopes that the benefits will trickle down the supply chain.”

Even so, he acknowledges, the reality is that many of those firms won’t directly see that help, even though they might ultimately experience a higher level of order intake: the time lags involved are too remote, and the linkage too diffuse.

“Government needs to find a way of helping these smaller companies as well,” says Mair.

“It can be done, but there needs to be a better understanding of just how to help them.”

For its part, of course, government would point to very specific help targeted at smaller companies, in the form of yet another expansion of funding for MAS, contained within the announcement that brought Rolls-Royce its largesse. This was £4m to help a wider range of businesses improve efficiency and increase orders, in addition to the £4m expansion announced as part of the Low Carbon Industrial Strategy a few months earlier.

And although the gap between Rolls-Royce’s near £100m and the sums given to MAS are almost risible, there’s little doubt that MAS is skilled at squeezing a lot of value out of the funds that it does receive.

Measuring return on investment In terms of advanced manufacturing, for example, MAS national network manager Roger Parr points to work undertaken with Cambridge based touch screen technology manufacturer Visual Planet. The outcomes: a reduction in cycle time of 10%, an improvement in productivity of 20%, and a reduction in failures of 8%. Ironically, Lord Mandelson visited the manufacturer as part of the launch of the Advanced

Manufacturing initiative after this work had been done.

Such successes don’t grab headlines but, measured as pound for pound ROI, the MAS example seems to be a stronger measure of the fund’s success.

And Visual Planet is just one example. Throughout 2009, points out Parr, MAS dealt with 12,200 enquiries, conducted 6,000 manufacturing reviews, set up 600 events, and achieved £145m in gross value added. Overall, he reckons, MAS has delivered an ROI of £7 for every £1 spent from the public purse.

Government schemes fundamentally tend to reward safe ideas rather than lateral thinking Steve Kelly, chief executive, SmartKem

Of course, Rolls-Royce — and other large beneficiaries of government funding to support the manufacturing sector — may yet deliver ROI that is as great, or even greater, than the MAS examples.

And the company is doubtless correct in saying that it is only part way through a long term programme.

Feasibility studies and planning for four new factories do not happen overnight.

Even so, taxpayers, SME manufacturers and all those interested in seeing value for money in government-industry collaborations can be forgiven for thinking that a little more clarity in the reporting of what is being spent, how it is being spent and what the results might be would be welcome by many, if they are not technically a duty of care. end

Have your say at www.themanufacturer.com

21

steel Man of

In 2004 Sheffield Forgemasters, a 114-year old, multi-million pound steel company and mainstay of Sheffield’s economy, faced financial ruin.

Graham Honeyman led the changes to turn the business around. Will Stirling finds that courage and faith in making the right product can go a long way.

Architect of 2005 MBO which saved the company

Strategy of high value, diversified product. Sales boosted to key overseas markets

Company turnover up from £38m in 2003 to £120m last year

73 people, one tenth of workforce, are apprentices

The

name Sheffield Forgemasters International has a strong resonance in Sheffield. “I believe there’s something special about our company,” says chief executive Graham Honeyman.” It is a highly technical place, we’re exporting around the world, and we make interesting things like reactor pressure cylinders for nuclear submarines, tension leg components for oil rigs in the Gulf of Mexico, or bridge components bound for Hong Kong. It has a romantic feel – we work with fire and steel.”

22

An advanced steelmaker and iconic Sheffield company, it supplies high quality steel components to the steel processing, offshore, nuclear and defence industries.

It turned over £120m in 2008 and employs about 800 people. It now takes on about 30 apprentices a year, “for which we receive between 200 and 300 applicants,” says Honeyman. “It’s heart-breaking to turn them away, many of whom are excellent candidates.”

Diversification into overseas markets, a strategy focused on high quality, specialist product and the united dedication of the workforce has made Sheffield Forgemasters a great success. But six years ago it was on its knees. The story of how it recovered is a testament to the dogged self-belief of Honeyman, his management and shop floor staff that a broken company can work again.

Steely nerves Graham Honeyman began his career as a research metallurgist with Parsons Turbine Engineers in the North East. He moved to Sheffield from his native Teeside in 1988 – “when I first came here, I was coming to the Deep South,” he says – to take the job of technical director of one of the group companies. He was made

Interview Graham Honeyman

managing director of one company, Forged Rolls, in 1996. In 1998 the group was then sold to Atchison Castings Corporation in the US. His first turning point came in 1999. He disagreed with the strategy of the company going forward and was fired.

“Because of my technical background I wanted us to be in a different, highly technical arena,” says Honeyman. “The US owners and a few of the senior management wanted us to be in lower quality, high volume product, which was totally against my principles. I believed we wouldn’t be able to survive competing against low cost competitors on a much lower technology level.” He left Forgemasters in February 1999.

Having pursued an evidently unsuitable strategy, soon after the CEO left in 2001 Atchison invited Honeyman to come back to solve the company’s problems. Why return to the scene of the crime? “I came back because I have a strong passion for the company and the people that work in it. That’s what motivated me to return, initially as a consultant later as MD of one of the two group companies.” In a volte face, in May 2002 the US parent asked him to stay permanently. “When I looked at the bottom line then, this company was losing about £750,00 a month. We had no intention about doing an MBO at that time, it was all about making sure the company got itself solvable in that relatively short period of time.”

At first the banks weren’t convinced about lending as they didn’t know who Honeyman was. But within seven or eight months, by early 2003, the company had made a very small profit, about £30,000-£40,000 a month. “The banks were astounded that we were

RussiabuysBritish “Before 2004, even on standard items like rolls we were making a substandard product, but by investing in the high end we won new business,” says Honeyman.

Russia’s Severstal is the fourth largest steelmaker in the world. They use SFIL forged rolls to roll their own steel. Seventy per cent of the forged rolls Severstal use in their cold mills are from SFIL. That is impressive given that in 2003 Severstal took virtually nothing. Honeyman says because they last a long time without cracking, they don’t need much maintenance so the steel mills have an output which is very high.

“We’re now supplying more rolls then ever.”

Geographically the strategy has targeted high quality, emerging markets. “We simply wouldn’t be able to access accounts like Severstal without this change of strategy.”

able to turn things around to this point, so they began to give the company more support.”

This took nerves of steel. “I was very nervous for the company – we were reliant on the banks and every day we had a deteriorating cash position.

There was also a huge company pension deficit of £65 million and several big loss-making contracts at the time.” There was a general view that the business would not survive. “It was probably the most difficult period of my life,” he adds.

Radical action The rot had to stop. This meant cutting costs and unfortunately involved making 60 people redundant.

The loss-making contracts were disposed of, the worst example of which, a submarine component, was operating at minus 178% profitability, and the collapsed sales pattern had to be reinstated so there was a clear corporate direction. The entrenched company culture was another problem. “Crucially, we had to reconnect with the shop floor staff who were

When I looked at the bottom line then, this company was losing about £750,00 a month seriously disenfranchised. Over a period of a year or so we were able to engage with everybody, to unify the company and give us a direction.”

But the main problem they faced was the owners’ high volume product strategy. The owners were bombing prices in the US, eroding the stable US market and taking on contracts at Forgemasters that were hugely loss-making. “The view they took is make your assets sweat; if you put more volume through your assets that’s tantamount to making them cheaper,” Honeyman says.

Where did the new profits come from? The business model was then what Honeyman deems a “pearl necklace”, a string of non profit-making contracts that held the company together, plus some pearls with significant profits on which were rare. “We had to develop those markets more and have less string, effectively.”

They devised a two-edged plan: hire more technical people to control product quality, plus develop much higher quality components, to regain Forgemasters’s reputation as a quality-led company.

“I knew this would take two or three years.

Production costs in the UK are much higher than in competitor countries so we had to be right on top our game on quality so people would naturally come to us, which they’d be willing to pay a premium for.”

During this interim period, there were nervy moments. At the end of 2003 the 15,000 tonne press cracked due to a lack of maintenance, putting

23

the press out of commission and the banks got cold feet. “We really had to convince them we’d be able to manage our way through it – which we did.”

One rocky road out

Biography Graham Honeyman 1951

Born in Northallerton, North Yorkshire

1975

BSc (Hons) and MSc in Engineering Materials Technology, University of Aston. PhD, Ministry of Defence project, University of Teesside.

1979

Research Metallurgist/Principal Engineer, Parsons Turbine Generators

1988

Technical Director, Sheffield Forgemasters Engineering

1996

Managing Director, Forged Rolls (UK)

1998

Managing Director, Sheffield Forgemasters Engineering

1999

Managing Director, Westleys

2000

Manufacturing Operations Director, Montracon

2001

Managing Director, Sheffield Forgemasters Engineering Ltd

2006

Chief Executive Officer, Sheffield Forgemasters International. Led MBO of company in 2005

Other information

Received the Winston Churchill Medal for the study of supercritical power stations in 1987. In 1997, received the Royal Academy of Engineering Silver Medal in recognition of an outstanding personal contribution to British engineering leading to market exploitation. Graham is married with two children.

24

In 2003 several big concerns converged. The US parent appeared to be heading towards Chapter 11 bankruptcy. “If they went bust there was a very real chance we’d have gone down with them.”

This galvanised the management team to separate Sheffield Forgemasters out. At the same time another part of Atchison, a cast rolls company , had serious financial problems too.

There was a heavily underfunded pension deficit and other liabilities to consider which included the £10m potential clean-up costs for a foundry in France that Atchison had imposed upon them, plus inter-group debts of £10m. Sheffield Forgemasters had to break away so they discussed a management buy-out. It was decided to take the cast rolls business in Crewe into administration. It was important at this stage, Honeyman emphasises, that any actions augmented the legal separation of Sheffield Forgemasters from Atchison before they went into administration.

The Enron accounting scandal meant many companies had started posting their accountancy problems on the internet in the interests of transparency. “When Atchison did this, some of our customers were reading and getting nervous about placing contracts, and our suppliers were getting nervous which further forced our hand.”

At this point, the management had the choice of putting the company into administration and buying the assets at a discount. “Our supplier base would have lost money had we pursued this route. We had to find a different way,” Honeyman says.

The MBO had to be put on ice for about a year once the owners’ permission was acquired because of the legal difficulties involved. When the two companies were legally separated, PricewaterhouseCoopers became the shareholders and the legal administrators. “Even though our company was not in administration itself, we were ringfenced from the administration process – because they (PwC) took over the group companies they were our legal owners so we had to negotiate with them,” says Honeyman.

At the time, the Government had just introduced the Pension Protection Fund to help resolve pension liabilities at risk from companies in administration.

Forgemasters was the second company to join it. “We said to government; let us carry on, and take over our pension scheme without waiting for us to go out of business. We were making money, we were just saddled with this enormous debt.” The Government agreed and took over the pension deficit.

Government took 30% of the shares, with 70% retained by the management. In addition, the management took on a company voluntary

Interview Graham Honeyman

arrangement, or CVA, where all parties consented to the administration terms. By employing the PPF, total debts of £85m were compressed, Forgemasters paid something to the company that owned the debt on the French foundry, and PwC took on the remaining £10m. With a big majority shareholder vote and supported by the banks and PwC, Honeyman orchestrated a legal MBO and they were separated from Atchison in early 2004.

Teamwork and success Honeyman brought in Peter Birtles, previously his managing director at Forgemasters Engineering.

“I needed some gravitas in the company, and his experience has been essential to moving us forward.” When the firm’s financial director left, the Government volunteered ex-CEO of Corus Tony Pedder to support the MBO. “The three of us worked hard together in our different ways to secure the company’s future.” Birtles and Pedder remain on the board. Honeyman also praises the support from junior directors “who stuck the pace through difficult times and are now consequently shareholders.”

Today the company is 70% owned by the original management team, and 30% by other employees comprising some managers and shop floor staff.

Thirty eight per cent of employees under-20 bought company shares just a few months after the flood in 2007, a sure sign of the new spirit. Sheffield suffered a very bad flood that year which destroyed much of the electrics in the south machine shop. This was a watershed in more ways than one. “The flood united everybody. Key customers helped us through it, pushing their own staff over here to help get the machines back online. It was a rally of support that exemplified the new belief here.”

The PPF was a crucial component of the MBO. Before, retiring employees would have received only 20% of their pension, where the Government scheme guaranteed about 90%, a win-win for all parties. In addition, Forgemasters was given £2m

by Yorkshire Forward to support the MBO, much of which went to help pay for the legal process. “The process needed 250 to 300 legal documents,” – he indicates six fat books – “but we did it.” In 2003, Forgemasters turned over about £38m; last year it was £120m. “Some of that is because prices have gone up, the rest is because we’ve switched to much higher technology product therefore has a lot more added value.”

SFIL today In 2006 the company became Sheffield Forgemasters International Ltd (SFIL), merging the Forging, Engineering and Foundry divisions. It has won numerous awards, including the Queen’s Award for Export and The Manufacturer Export Manufacturer of the Year 2009. Returning to traditional markets and exploiting new ones has been key. “We’ve gone back into nuclear now, making products for Babcock and Wilcox and Westinghouse, for whom we’re the sole

supplier of cast pump casings. These are traditionally a forged product with a lot of waste in manufacture – we worked out a way to cast them which is less wasteful.”

The foundry is now making hydroelectric components, selling to Brazilian clients which is a new market. “This company is 80 per cent export, we don’t have enough of these engineering components in the UK so we’ve had to fight our way overseas and we have fierce foreign competition.”

Research and development is very important to both SFIL and Honeyman. In 2009 it spent more on R&D than in any previous year. “Yorkshire Forward has been tremendously supportive along the way,” he says. “We’ve signed our second research and development project with them which supports us financially, because they’ve seen how important our R&D is in winning overseas business . And the Advanced Manufacturing Park in Rotherham is interested in our work.” Examples include SFIL’s R&D into ingot technology covering the development of hollow ingots, for e.g. nuclear applications, and on new forging techniques to improve productivity and quality.

You must supply things in the United Kingdom that other people find it difficult to make, or with a superior technology “For us to survive, from where we’ve come from, is an amazing thing. We’re in a deep recession, we’re still making profit and I think we’re doing better than virtually all our competition. When you see devastation on some steel companies in UK we’re overriding that and doing reasonably well.”

Inspirational story At one point in 2004, Sheffield Forgemasters was only three hours from closure because the banks wanted a signature from the US owner to support the separation of the UK companies or they would have called in the receivers. Look at it today.

“I believe in certain parts of the UK people have always gone for cutting costs, cutting people, cutting research – ‘we can’t afford it, R&D is the first cut’. This is absolutely the wrong direction because you’re signing the death warrant of that company” While this story may inspire, business is not romantic and it takes a lot of hard work, Honeyman concludes. “You must supply things in the United Kingdom that other people find it difficult to make, or with a superior technology. We could never have survived fighting toe-to-toe with the Koreans, Chinese or others because they have fundamentally lower costs and we have got to keep climbing the technology tree to be better than them so we become the first choice of our customers.” end

Have your say at www.themanufacturer.com

25

Best practice vies for insurers’ attention Can best practice or Lean behaviour reduce insurance costs when insurance is a global commodity market? In theory, yes it can. In practice, like insurance, it is a subjective science but there is evidence that best practice does make a difference. Will Stirling reports.

26

Best

practice, Lean, effective management, world class manufacturing – call it what you will, these techniques encourage operations that contribute to a safer, more efficient, less wasteful working environment. But do they actually reduce insurance costs?

The easiest component of Lean to apply to insurance is health and safety (H&S) practice, which feeds into risk management. Here the relationship is clear. A cleaner safety record equals lower premiums, in most cases. Steve Pountain, head of business governance at Ultraframe, conservatory manufacturers and 2009 winners of the international lean award the Shingo Bronze Medallion prize, says that “although safety was not one of the key drivers at the time Ultraframe embarked on its Lean journey, it has been proven over the last four years that there is a strong correlation between Lean implementation and improved safety performance. Relationships can be drawn between Lean principles such as 5S, Visual Management and Standard Operating Procedures, along with elements of the Seven Wastes (TIMWOOD), mainly Transportation and Movement, and a reduction in lost time accidents.”

Is there a measurable cost saving? He adds: “It’s hard to put a financial figure to the reduction in lost time accidents, but it is safe to say that Lean

Leadership and Lean

Safety has helped the bottom line with regard to cost reductions in the areas of First Aid provision, Occupational Health Nurse reliance and employee liability insurance reserves.”

had shown improvement of close-out on safety related incidents on the previous year, through the introduction of rapid PDCA database systems.

According to his colleague who worked there at the time this had a direct influence on the insurance premium and affected its claims threshold.

Secondary or tertiary role How much do other best practice factors affect insurance? For example, practices that improve quality can result in reduced premiums.

“Conventionally, a company with substandard quality assurance will result over time in more product liability claims, is more likely to have lower housekeeping standards, and will be worse for employee safety,” says Mike Still, managing director of UK National at insurance brokers and risk advisors, Marsh. “As a result you would expect higher numbers of incidents that injure or cause illness or disease to employees.

These will directly affect the products and employers’ liability premiums.”

The experience for some companies is that lean or good practice appears to have a secondary, tertiary or indeterminate effect on insurance premiums which they think their insurers are not directly considering when assessing.

One manufacturer in Wales checked the key metrics with its insurance company and found the biggest contributor, unsurprisingly, was general insurance market conditions, i.e. the sector within which your business is based and the liability to be undertaken with its activities. Subordinate to this, however, accident or incident claims performance in the previous period can have a secondary influence, which might include product quality loss claims insurance too.

“Clearly effectiveness of management systems influences one’s “loss-behaviour”,” says the company’s improvement director. “This includes use of classically lean behaviour such as: 1) effective plan-do-checkact (PDCA i.e. closing the loop) in a safety context to ensure similar accidents are not repeated, and effective risk assessments and; 2) activity influencing quality loss and claim; understanding customer value; six-sigma to reduce quality variability and increase consistency.

These factors were taken into consideration in the underwriting.” Lower down still, “a visually wellorganised business (using e.g. 5S) may reduce the likely list of fire system recommendations. This may make it easier to make an assessment and also gives a good subjective impression.”

The spokesman added that before it was bought out, there was one example where the company

Broking best practice One insurer’s underwriting methodology for a given set of criteria will differ to another’s. But there are quarters of the market that do factor in a range of best practice variables, as well as the macro factors like reinsurance rates and prices driven by normal commodity market conditions.

EEF Insurance Services (EEFIS) is a scheme run by EEF, the manufacturers’ organisation, and RK Harrison Insurance Services. It was launched in July 2007 in response to escalating premiums and because, EEF says, companies felt they weren’t being rewarded for the investments they had made in health and safety processes to reduce their risk. It comprises a panel of four UK insurance companies: Allianz, AXA, Norwich Union and Travellers. They promised to give additional benefits such as improved cover,

It incentivises firms to take action if they’ve got more to do and it ensures that those who’ve done a good job already get the best rates possible Stuart Rootham, R K Harrison Insurance Services membership discounts and rebates, but perhaps most importantly commit to recognising best practice in their premium terms.

The broker and panel developed a scorecard which provides a benchmark against three or four main headings, to provide an overall score of good business practice in that company. “It’s a red-ambergreen scoring. Red does not mean you can’t get a quote, it just means a green risk should get a better price than a red or amber risk,” says Stuart Rootham, director of R K Harrison Insurance Services. The process as a virtuous circle, Rootham says, where companies’ weak areas are identified and EEF can provide the means to fix them through its H&S consultancy. “To a company who’s a red or amber

Accidents recorded at Ultraframe during its Lean Safety programme.

Insurance costs have fallen Accidents

2004

2005

2006

2007

2008

2009

Non-Reportable

227

130

95

79

62

30

RIDDOR (Reportable)

28

16

13

7

2

1

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Leadership and Lean

whose premium terms today are X, we’re able to identify those areas where it needs to improve. An EEF assessment can help you with that. Everyone benefits.” It shows companies, which must be EEF members to participate, that if they improve these areas their premium terms will improve in the future.

“It incentivises firms to take action if they’ve got more to do and it ensures that those who’ve done a good job already get the best rates possible,” he adds.

R K Harrison claims that companies who have adopted the scheme regularly save 15%-30% off their existing premiums, up to 46% in one case, and one company saved over £100,000.

What value waste, inventory?

Some companies have little to show for their Lean behaviour where insurance is concerned. Andrew Bradley, managing director of safety equipment manufacturer Unitex UK Ltd, which has implemented a very thorough lean programme, says its efforts here have not been reflected in insurance costs. “We have discussed our Lean operations with our insurer over a number of years, indeed it is part of the prerequisite body of information they assess. They appreciated the improvements we’ve made in areas like waste

28

Have your say at www.themanufacturer.com

and inventory reduction but it has made no obvious difference to the premium.” Unitex UK is having its insurance overhauled later this year and Bradley would like to see the new policy take its Lean efforts into account.

E2v, a designer and manufacturer of specialist components and subsystems, has been through a very rigorous business process overhaul over the last 18 months. But its insurance company, when it comes up for renewal, indicated that of its multiple improvements its inventory reduction might affect its premium, but there was no substantial reduction that reflected the business process improvements at the Chelmsford-based firm.

Spell it out The four manufacturers we canvassed said they had not investigated the effect of Lean operations on insurance in great depth and were keen to know if they were missing an opportunity. What can be done to maximise your company’s good practice on insurance costs? R K Harrison’s Rootham says insurance companies are not manufacturing experts and you must emphasise your strong areas in any submission. “The broker should know the questions to ask, it really isn’t down to the client,” he says. “The broker’s submission to insurers should articulate all the operations and practices used on site that might lower insurance costs. Don’t be afraid to tell your broker or insurer everything you think is salient, even if you think they’ll think it’s irrelevant. The EEFIS scheme includes a lot of best practice.”

Will insurance prices rise in 2010? Some think yes, after benign conditions and price competition over the last five years have driven prices down, insurers need to make up lost ground. Others say no, that driven by reinsurance rates there is still significant capacity and competition in the market for insurers to make profits without raising premiums. “You’re unlikely to see rate increases coming through this year,” says Marsh’s Mike Still. This is sector specific though; banks certainly have bigger premiums today.

“In food manufacturing, for example, some insurers have seen their rates reduce significantly over the last four years, but brokers still see claims coming in and they are now trying to push premiums up, or reduce some of their exposure. The issue is there are still alternatives in this market that are highly competitive so Marsh is not seeing those increases coming through other than for companies that are not well risk-managed or those that have a claims history.”

He adds that it’s more important than ever today to prove all best practice quality behaviours to insurers to ensure that the premium discounts given to the best-run companies are capitalised on.

What is clear is that the insurance industry needs to better communicate which components of Lean – H&S, quality assurance, waste and inventory reduction – are included in their metrics and with what weighting.

Schemes like the EEFIS show that some insurers value a wide scope of best practice activities. end

Sustainable manufacturing

Regeneration through remanufacture Products today are commonly easier to replace than repair, so remanufacturing offers an alternative to unnecessary wastage.

Tim Brown reports.

DavyMarkham recently remanufactured a 6,000 tonne forging press for Valdunes of Dunkerque

The

perception that used products are of little economic value is one that is certain to change. From truck tyres to refrigerators to jet engines, many manufactured goods are enjoying longer revitalised lives thanks to the process of remanufacturing.

The Centre for Sustainable Design at the University of the Creative Arts in Surrey published a report in 2008 concluding that the promotion of remanufacture had the potential to raise demand for technical skills, research and development. According to the report: “Remanufacture can offer a business model for sustainable prosperity, with reputed double profit margins alongside a significant reduction in carbon emissions and only 15% of the energy required in manufacture. Remanufacture also diverts material from landfill and creates a market for skilled employment.”

Also in 2008, the draft British Standard 8887-2 on remanufacturing was developed in conjunction with The Centre for Remanufacturing and Reuse (CRR). It defined remanufacturing as a process “returning a used product to at least its original performance with a warranty that is equivalent to or better than that of the newly manufactured product”. In essence, this is taking end-of-life goods and re-engineering them back to as-new or better condition. The standard is scheduled to come in to force in the first part of this year.

CRR is managed by Oakdene Hollins, a clean technology and resource management

consultancy in Aylesbury, Buckinghamshire. Kerry Mashford, director of business development at CRR, says that in many cases a remanufactured product can exceed an item’s original performance through the use of superior components or added functions. In addition, the requirement for the provision of a warranty matching or surpassing the standards of the original product provides customer confidence and demonstrates the reliability of remanufacturing.

In March, CRR is holding the International Remanufacturing Congress in Leamington Spa — see the box opposite.

There are some similarities between remanufacturing, recycling and repair, but the definition is clear. Recycling is focused on the reclaiming of materials, where remanufacturing is essentially about the recovery of products. Indeed, Mashford points out that remanufacturing is “higher up the waste hierarchy” as it is a more direct process. The clarification between remanufacturing and repair is that repair simply focuses on the component area that has failed. Remanufacture involves a full disassembly, inspection and reassembly process.

Remanufactured products range from highend aircraft and military equipment right through to small electronic goods. Remanufacturing is generally undertaken either by an original equipment manufacturer (OEM) or a company

29

offering remanufacturing as a service. In the service capacity, remanufacture is performed either for a specific customer or as an independent business which purchases end-of-life products for remanufacture and sale.

The benefits of remanufacture

CRRâ&#x20AC;&#x2122;s International Remanufacturing Congress 2010 Tuesday, March 2 â&#x20AC;&#x201C; Thursday March 4 at Woodland Grange Conference Centre, Leamington Spa. Established four years ago, and funded by Defra, the role of CRR is to support and promote the activities of product remanufacturing and reuse.

In the first week of March, CRR will host its first remanufacturing event.

Generally, OEM companies adopt a remanufacturing process for a perceived economic benefit. Often this benefit is discovered through peripheral activities, such as customer repair, from The aim of the Congress is to: which, for example, a component salvage operation Demonstrate out how to maximise might develop. Recovering such components commercial and sustainability benefits can greatly reduce a companyâ&#x20AC;&#x2122;s costs in terms of through remanufacturing. ?hk Zgr ^gjnbkb^l ie^Zl^ \hgmZ\m Show how remanufacturing can improve your energy use and input materials. This might then business resilience, help retain customers and form the basis for the development of a more Lesley.maddox@remanufacturing.org.uk deliver resource savings. substantial remanufacturing operation.

Share experiences with others involved in A reduction in costs is a clear benefit of E^le^r FZ]]hq F\Gnemr% Ikhc^\m :]fbgblmkZmhk% remanufacturing and the procurement of remanufacturing, but improved customer loyalty remanufactured products. is anotherhg 01296 potential windfall.

By offering to reclaim 423915 Reveal solutions to technical, business products for remanufacture while also selling and policy challenges in maximising value from remanufacturing and the use of remanufactured products at a discounted price, hk mh ik^&k^`blm^k% `h mh remanufactured products. companies can ensure that both their goods and www.remanufacturing.org.uk Zg] Demonstrate what is happening across customers are â&#x20AC;&#x153;reusedâ&#x20AC;?. Some companies such as the world to improve the business context Rolls-Royce and even Michelin Tyres take this even _heehp ma^ ebgd makhn`a G^pl >o^gml for remanufacturing. further by leasing their products.

By maintaining ownership of manufactured products and leasing them to customers, CRR says product remanufacturing and

reuse is important because it:

Is vital to the conservation of resources including materials and energy Presents benefits to both the environment and businesses Boosts skills, employment and economic activity in the UK.

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CRRâ&#x20AC;&#x2122;s website www.remanufacturing. org.uk provides comprehensive and free interactive information, including:

2nd â&#x20AC;&#x201C; 4th March 2010, Leamington Spa

Have you switched on to the benefits of remanufacturing?

K^fZgn_Z\mnkbg` ikh]n\ml \Zg fZd^ Z lb`gb_b\Zgm \hgmkb[nmbhg mh rhnk mkbie^ [hmmhf ebg^% lZobg` \Zk[hg Zg] fZm^kbZe k^lhnk\^l% k^]n\bg` hi^kZmbg` \hlml% k^mZbgbg` \nlmhf^kl Zg] \k^Zmbg` ch[l' At the Congress you will: ?bg] hnm ahp mh fZqbfbl^ \hff^k\bZe Zg] lnlmZbgZ[bebmr [^g^_bml makhn`a k^fZgn_Z\mnkbg`'

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Who is participating in remanufacturing What products can be remanufactured How to remanufacture The benefits of remanufacturing for purchasers and remanufacturers ReOPT is an online tool which evaluates if a product is suitable for remanufacturing Registration as a remanufacturer places you on a searchable map

For more information telephone +44 (0)1296 337165

LaZk^ ^qi^kb^g\^l pbma hma^kl bgoheo^] bg k^fZgn_Z\mnkbg` Zg] ma^ ikh\nk^f^gm h_ k^fZgn_Z\mnk^] ikh]n\ml' Lheo^ m^\agb\Ze% [nlbg^ll Zg] iheb\r \aZee^g`^l bg fZqbfblbg` oZen^ _khf ikh]n\bg` Zg] nlbg` k^fZgn_Z\mnk^] ikh]n\ml' ?bg] hnm paZm bl aZii^gbg` Z\khll ma^ phke] mh bfikho^ ma^ [nlbg^ll \hgm^qm _hk k^fZgn_Z\mnkbg`' Mh [hhd rhnk ieZ\^3 \hgmZ\m E^le^r FZ]]hq hg 01296 337165 hk Lesley.maddox@remanufacturing.org.uk hk _heehp ma^ ebgdl _khf http://tinyurl.com/yzofa7d The IIRC is also supported by EEF and TSB

30

companies can build customer loyalty. Furthermore, leasing allows for products to be reclaimed on a planned schedule that suits the manufacturer, rather than a more bespoke service at the whim of the customer. Mashford says: â&#x20AC;&#x153;This allows the manufacturer to smooth their production activities and maintain products in service that are not obsolete, meaning that they no longer need to keep old components in stock to service old products.

Sustainable manufacturing

The manufacturer can then provide ongoing functionality for the customer while also achieving a much smoother revenue stream.”

Such agreements have proven popular during the economic downturn, as leasing does not require customers to provide a large capital outlay for a new product. Planned cycles also mean customers get regular performance upgrades without worrying about a plethora of EU legislation regarding the disposal of end-of-life equipment.

Another benefit for OEMs offering remanufacturing is material security. Certain materials can be difficult to obtain, or are sometimes subject to high price fluctuations. By adopting remanufacturing as a source of materials, manufacturers can protect themselves from supply chain disruptions or price variations. This feature is likely to become more important as developing economies compete harder for raw materials. This has already become apparent in, for example, the manufacture of high performance alloys.

Michelin UK In the East Midlands, Michelin UK has an agreement guaranteeing at least 6,000 tonnes of its truck tyres per annum will be used by Newark-based recycling firm Charles Lawrence International to make children’s play and sports surfaces.

The move comes at a time when no UK legislation exists that demand tyre manufacturers take responsibility for their products at the end of their life cycle.

Remanufacturing in practice DavyMarkham Sheffield heavy engineering company, DavyMarkham, has overseen the refurbishment and technical upgrading of a Davy 6,000 tonne forging press for Valdunes of Dunkerque, one of the world’s leading manufacturers of railway wheels and axles. The press was originally supplied by the Sheffield works in 1956 and has since produced literally millions of forged wheels, at a rate of around one wheel every minute, eventually necessitating the most extensive overhaul in its history.

Charles Lawrence International also receives around 200 tonnes of end-of-life and rejected casings a week (10,000 tonnes per annum) from Michelin UK. It also handles materials from Michelin’s Ballymena factory, making the Northern Irish site the first of its kind to have all its factory waste fully recycled. Michelin’s Stoke-on-Trent factory remanufactures bus and truck tyres for the UK market - see the Michelin UK company profile on page 70.

Edwards

Representing perhaps ‘the ultimate 50 year service’, the DavyMarkham refurbishment package cost £500,000 and returned the machine to better than original condition, complete with new columns, bearings and high spec tensioners, thus delivering substantial savings over new capital equipment costs and minimising operational downtime.

Pump manufacturer Edwards decontaminates and remanufactures used vacuum pumps to ‘as-new’ condition. The company remanufactures 30,000 pumps every year. The process reduces raw material and energy use, as well as the amount of material that has to be recycled.

Edwards uses a water-based cleaning process which avoids the creation of any additional environmental problems due to solvent use.

Any contaminants are filtered out and disposed of in an appropriate manner.

Edwards vacuum pumps typically run 24/7 and are reused four to ten times over their 10-20 year lifetime, making them extremely environmentally efficient. According to the company, such an extended life is equivalent to a car travelling around two million miles.

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Sustainable manufacturing

The Electronic Waste Company

Zycko

The Electronic Waste Company remanufactures up to 1,000 tonnes of waste electrical and electronic equipment a year. The company collects equipment from schools, the NHS, schools and major businesses. IT equipment is data cleansed, stripped and refurbished, then sold on to businesses and individuals.

The business took off after the introduction of the European Waste Electrical and Equipment Directive, the objective of which is to increase the recycling and/or re-use of such electrical products. Each remanufactured PC contributes to saving the 240kg of fossil fuels, 22kg of chemicals and 1500 litres of water which the UN estimates is required to make a new computer.

ICT distribution company Zycko offers fully refurbished networking products for up to 90% less cost than the normal list price.

The company is currently assisting many recession-hit companies, who lack the budget for new hardware, to obtain high quality business equipment. In addition to offering savings of 60%-90%, each item is subjected to a rigorous 28-point check, and is also covered by Zycko’s standard 12month warranty.

TRW Automotive TRW Automotive remanufactures safety critical mechatronic (mechanical, electrical and electronic) automotive products at dedicated sites across Europe. TRW has invested heavily in this field in recent years, and in 2007 created a dedicated remanufacturing group, TRW RMG.

Turbo Technics Turbo Technics is a world leader in the development of turbo charging and associated hardware, offering remanufactured turbocharger units to the public and motoring trade. These units are re-manufactured to at least the same quality and tolerances as the original units, but at significantly lower cost. The company has experienced considerable increase in demand in the last 12-18 months as a result of the economic situation. Turbo Technics also designs and manufactures the necessary hardware to service the remanufacturing industry.

Caterpillar

Its product portfolio incorporates complete remanufactured systems and mechanical products, as well as the more traditional parts. The company remanufactures a large array of products, including calipers, manual and mechanical steering racks, fully integral (heavy duty) steering boxes, hydraulic vane pumps, electrically powered hydraulic steering and electrically powered steering ‘column drive’.

32

Have your say at www.themanufacturer.com

Caterpillar has incorporated a comprehensive and successful remanufacturing component into its business structure. When a Caterpillar customer purchases a remanufactured product, the purchase includes a “core deposit” that is refunded to the customer when the core, or end-of-life component, is returned. Upon return of the core, it is inspected and the deposit refunded. Typical remanufactured components are cylinder packs, water pumps and other engine components, hydraulic components and transmissions. end

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33

This year’s model

Parametric modelling has advanced steadily since it gained widespread acceptance in the 1990s. Ruari McCallion looks at the current state of play and new developments.

34

An

internet search for ‘parametric modelling’ is dominated by architectural applications.

They range from the seven star Burj Al Arab hotel in Jumeirah, Dubai, to discussions on M&E applications in commercial office buildings. One could be forgiven for thinking that architecture is the original and even the main ongoing application of the software, but that is far from the truth.

“The main industries that took up parametric modelling 10 to 15 years ago were aerospace and automotive manufacturing,” says Neil Dunsmuir, vice president of marketing, EMEA, for Siemens PLM Software. “They had the money available to invest in technology.”

Innovation design and the product lifecycle

The families of software products developed to meet and respond to these and other sectors’ demands are well known, and include Catia, SolidWorks, Autodesk Inventor, PTC — one of the early pioneers — and NX and SolidEdge, from Siemens PLM Software.

While business improvement tools, such as Lean manufacturing techniques, have been cornerstones in the automotive and aerospace companies’ business process development, parametric modelling and the broader package of applications of which they form part — product lifecycle management (PLM) — are essential components in the structure of these tools. Parametric modelling is a history-based function that requires the operator to use ‘design intent’. Essentially, he or she will be constrained by parameters imposed by the originator, the design owner.

Most, if not all, CAD tools on the market are now parametric. The relevance of this to manufacturers is that it means suppliers further down the supply chain can be entrusted with detailed design work, in the knowledge that they will not be able to come up with a brilliant idea that won’t fit the parameters.

It also means that components will be selected from a range that is approved and priced by the original equipment manufacturer. But it also means that creativity in problem solving is likely to be constrained. Furthermore, the leading design and modelling technologies don’t come cheap. Recently there has been advanced development of lower cost and mid-range parametric tools that are within the range and competence of small and mid-sized companies (SMEs).

“Siemens’ NX allows full CAD and CAE [computer aided enterprise] including parts ordering — it is seamlessly integrated into the PLM application,” says Dunsmuir, and the same can be said for the other leading solutions. “SolidEdge is a medium range modelling product; it’s sophisticated but not as much as NX. It is designed for Microsoft operating platforms and is within the reach of SMEs, who probably don’t need to go as deeply as the high end.”

Simultaneous collaborative design There are two aspects to the collaboration of engineering design. When Ford Motor Company — the only one of the Detroit Three to avoid Chapter 11 bankruptcy in 2009 — designs a new car or platform, it needs to collaborate internally, to ensure everyone is working together simultaneously, without overwriting each other’s amendments to the design project.

Externally, through the tiers in the supply chain, the software needs to ensure people are working on the right version. Parametric tools allow suppliers to be brought into the overall PLM system with full access.

Loading all components onto the digital backbone allows everyone in the project to see the whole car assembly. If an item, such as a gearbox, is redesigned by one party, the new version will be shown to all and, vitally, how it affects the whole structure.

“One of the biggest challenges with collaboration on large projects is managing the interface between products,” says Paul Brown, global marketing manager for Siemens’ NX product. “One of our customers, Israel Aircraft Industries, appoints one person who ‘owns’ the design.” Using the digital backbone — TeamSensor from Siemens, Catia from Dassault Systèmes, and more software — enables people to work effectively. “At interface areas — such as areas where cables and hoses pass through airframe structures — designers can programme specific requirements into TeamSensor, which will have within it a command: ‘you shall not drill through this particular strut or rib’, which can be there for a key structural reason. People can work together, rather than going off on their own and then spending ages working out conflicts.”

Digital backbones allow a lot more focus on underlying tools and enable design companies to focus on design.

We can now make changes rapidly without having to recreate the design from scratch with every modification. We have been able to reduce development time by 50 per cent David Rees, Brick Fabrication When parametric design tools first emerged they were cumbersome. Integrating the application with the PLM backbone made them easier and facilitated a freer flow of information. Companies are now moving away from pure parametric technology to more intuitive solutions. ‘Direct’, ‘dynamic’, ‘freeform’, or ‘synchronistic’ tools provide the ability to edit parametric and non-parametric geometry without the need to understand or undo the design intent history. An operator doesn’t need to be a CAD expert in order to make some simple modifications quickly. They can import from nearly any format of CAD file, then edit and alter the geometry as if it was clay. US software developer PTC developed the earliest versions of direct modelling in the 1990s; its ease of use is seeing the popularity of direct modelling grow, with products like Autodesk’s Inventor Fusion.

Parametric in use: Case studies South Wales-based Brick Fabrication, which makes brick arches and chimneys for the domestic construction industry, recently invested in both a new factory and 3D CAD, specifically Autodesk Inventor. It is now using the tool to develop its entire range of prefabricated building products including brick arches, chimneys and brick specials. This has helped the company to significantly reduce wastage

35

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Innovation design and the product lifecycle

Airbus recently deployed Delmia Quest to help optimise its manufacturing sequence

and rework. Every job going through the factory now has a CAD drawing associated with it, together with key metadata to help engineers develop designs correctly at the first time of asking.

“We can now make changes rapidly without having to recreate the design from scratch with every modification,” says design and development manager David Rees. “It makes it much easier and quicker to produce associated parts lists and bills of material data. We have been able to reduce development time by 50 per cent.”

The new Abu Dhabi Investment Council building is being designed by Aedas Architects in London using Digital Project (DP), which is based on Dassault Systèmes’ Catia platform.

“We used the Catia-based parametric solver in DP to construct complex dynamic components with all their parts to consider them in relation to the rest of the structure and the environment,” says Abdulmajid Karanouh, senior designer at Intelligent Systems. “The ability to iterate the façade and all its details relative to changes made to the main form [building] is a very powerful feature of this software.”

Airbus recently deployed Delmia Quest to investigate a production scenario related to the use of lifting equipment for large wing parts. Various ‘what if’ scenario simulations were run via Microsoft Excel to Quest to discover the optimum manufacturing sequence and best return on capital equipment, and

to identify where it was desirable to use a crane in conjunction with other production equipment to avoid delays and sequencing bottlenecks.

AeroTec Laboratories uses parametric solutions to develop collapsible fuel cells for Formula 1, World Rally Championship and DTM racing teams and Rogers Yacht Design have used it to create

‘Direct’, ‘dynamic’, ‘freeform’, or ‘synchronistic’ tools provide the ability to edit parametric and non-parametric geometry without the need to understand or undo the design intent history the new Artemis Ocean Racing 2 IMOCA Open 60 Vendée Challenge yacht, which not only has to be fast but also has to make the most efficient use of available space.

The objectives behind parametric technology are not new. Freeform or synchronised design is not entirely new either, but it seems to be the next step along the line to enable manufacturers to improve design effectiveness, shorten development times and reduce wastage. end

Have your say at www.themanufacturer.com

37

Using all of your

assets

Mark Young explores whether a one-time unpopular financial instrument is now working amid tighter credit elsewhere.

Though

historically frowned upon as a financing option, Asset Based Lending (ABL) has become increasingly popular in recent years. The Asset Based Finance Association (ABFA) – a trade association which represents all of the major high street lenders and plenty more besides – says in the quarter to September 2009 there were almost 45,000 ABL agreements in place – four times more than at the end of quarter one in 1995. Indeed, from the beginning of 1995 until mid 2008 the number of agreements in place rose in every quarter bar two.

Last year, against the backdrop of recession, Asset Based Lending understandably fell slightly but its share of the total commercial lending is expected to have grown nevertheless.

“Since the year 2000 the compound growth year on year in ABL agreements is around 13 per cent,” says John Bevan, head of sales finance at Barclays Commercial Bank. “So you can see its becoming more and more an acceptable means of financing businesses.”

So what exactly is Asset Based Lending and why is it becoming more popular?

ABL, from a business perspective, is the provision of a commercial loan that generally has something unusual as part of a package of securities against it. That something unusual could cover assets like accounts receivable, inventory – both finished goods and work in progress – plant and machinery (P&M), and even intellectual property rights. These are then put up along with traditional assets like property as securities for lending.

“ABL comprises a cocktail of facilities under one umbrella,” explains John Bevan’s colleague, Graeme Allinson, Barclay’s head of manufacturing, transport and logistics. “The lender takes the assets from the

38

balance sheet of a business and provides lending values against each of them. Asset based lending tends to be primarily led by debtor facilities with a mixture of other facilities used after that.”

ABL finance is typically utilised by mature businesses with multi million pound turnovers, though the banks can and will offer it as an option to asset rich smaller firms. It works especially

What has happened in the last eighteen months has been dramatic change in the business world, off the back of ten good years of trading for businesses and banks Mike Oxby, Director of Asset Finance, Santander

well as a funding option for growth because more money becomes available as sales, inventory and debtors rise. “It’s a virtuous circle,” says Chris Hawes, head of portfolio management and structuring at Royal Bank of Scotland Invoice Finance. “As your sales increase you can get into cash flow mode and receive something like 90 per cent of that money straight away. You then reinvest it and make more growth.”

In terms of cost, there are no hard and fast and rules but you should expect to pay an arrangement fee, an annual service fee and a margin over base

Finance and professional services

or LIBOR (London Interbank Offered Rate). The percentage of value that is made available differs from asset to asset. RBS provides up to 90 per cent of invoice value, around 60 per cent of finished goods in inventory, up to 80 per cent of the appraised value of machinery, and up to 80 per cent of property. Barclays meanwhile say debtors’ value could provide anywhere from 50 per cent right up to the full 100 per cent in some cases. Banks look at assets in terms of their realisable value, so, for example, finished goods would hold a better lending value to goods in progress.

Accounts receivables and inventory are generally used to create availability in a revolving credit facility where the initial loan value can continue to be drawn throughout the term of the agreement. Terms are typically one to three years.

John Bevan says manufacturing is one of the best suited industries for ABL because firms’ assets are “largely transparent and can therefore be valued effectively, as opposed to service based industries with intangible products”. Adds Chris Hawe: “Manufacturers often have a high degree of seasonality and ABL suits this as it is flexible with the movements in the working capital cycle.” ABFA’s figures endorse these points; with 30 per cent of the total number, there are more manufacturers with ABL agreements in place than any other type of firm.

Part of ABL’s bad press is based on similar but less favourable products. It has evolved so far from factoring – the sale of accounts receivables to a third party – that it is by now basically its own beast.

But it is those roots which gave ABL a persisting negative reputation, according to Chris Hawe.

“Factoring was once regarded as a way of cobbling some funds together only as a last resort,” he says. “This stigma was attached to ABL as a by product and still resides in some quarters. But essentially ABL monetises an asset like factoring did without the negative aspect of selling yourself short. With ABL you retain the asset and simply borrow against it, meaning the only way you miss out on the full value of the security, minus a bit of interest, is by defaulting on the loan. We are now seeing larger, very successful businesses using ABL to replace more conventional banking facilities. Our clients like the flexibility, the headroom and the close relationship which the ABL facility brings.”

Mike Oxby, Director of Asset Finance at Santander Corporate Banking, says ABL has been invaluable to many firms since the recession began because of how quickly capital dried up when the downturn kicked in. Before the recession it wasn’t deemed necessary to keep large quantities of capital in reserve because, generally, suppliers were paying promptly “What has happened in the last eighteen months has been dramatic change in the business world, off the back of ten good years of trading for businesses and banks,” he says. “Perhaps businesses didn’t

need to think too hard about how they preserve their capital before; now that has all changed.

“Some businesses bought assets in boom times and then thought ‘well I wish I hadn’t have done that now’ when the cash flow tightened up.

So they’ve had to explore things like Asset Based Lending sale and lease back options to free up some capital. Such financing options can provide valuable cash generation, whilst spreading the payments across the working life of the asset.”

He points out that ABL “makes sense” from the lenders’ perspective, given the securities against the facility, and with available capital having been scarce recently it stands to reason that ABL agreements should seriously be considered.

One facet of ABL that could be construed as a downfall is that businesses must be prepared to accept that the bank will keep a closer eye on its collateral than they may have been used to under other commercial financing agreements. This is because securities could change on a daily basis – for instance when finished goods in hand become accounts receivable – and their value determine how much loan is available.

Essentially ABL monetises an asset like factoring did without the negative aspect of selling yourself short Chris Hawes, head of portfolio management and structuring, Royal Bank of Scotland Invoice Finance But John Bevan says this should be seen as a positive. “Asset based lending is about creating a partnership with the client,” he says. “We are very close to the day to day workings of the business, understanding the capital requirements of that business. It means we can make sure that a company has utilised all of its assets in the broadest sense to achieve the finance that it needs.

Ultimately, if the facilities don’t work for the client they won’t work for us either so it’s very important that the structure is right.”

“The most important thing is that the money is used for something that is ultimately going to grow the business,” adds Graeme Allinson. “We wouldn’t advise an ABL agreement for a fleet of new directors’ cars!”

All in all, there is no denying that credit remains tight, despite the likelihood that recession is technically now over in the UK and economists’ belief that the country will grow – albeit slowly – in 2010. But the message from the banks is that there is money to be had and Asset Based Lending might now be one of the best options – for banks and for businesses – in getting that cash lent out. end

Have your say at www.themanufacturer.com

39

Finance and professional services

RBS opens £1bn fund for manufacturers On 14 January Royal Bank of Scotland announced to TM the launch of a £1bn fund dedicated to UK-based manufacturers, the first of its kind. Edward Machin reports.

Designed

in conjunction with NatWest, and aimed at kick-starting growth in a traditionally underfinanced sector, the interest-only loans will be made available via a series of releases, for periods of two or three years, with the first release carrying fixed rates of 3.4% and 4.3%, respectively.

Manufacturers borrowing across three years will have the option to partially repay in their final year, while both lending facilities will attract a flat arrangement fee of 75 basis points — applicable for any loan drawn within the fixed rate.

Accessible in sums between £250,000 and £25m, and with RBS borrowing capital from its own balance sheet — i.e. not government-sponsored — to support UK manufacturing, the fund is primarily geared towards borrowers’ investment for growth; be it through acquisition, capital expenditure or increased working capital.

In making finance available to both new and existing RBS customers, the fund applies across the bank’s corporate division to include its business and commercial segments. While covering manufacturers from start-up to large corporate organisations, however, loans are primarily aimed at SME and mid-market companies, given the difficultly that such manufacturers all too regularly experience in accessing viable credit lines.

Announcing the scheme to The Manufacturer, Peter Russell, head of manufacturing & infrastructure, RBS, said, “We are delighted to launch this fund in support of UK manufacturers.

We are under no illusions that recovery across the sector will be easy or straightforward, but from taking to our customers we do see that investment for growth, in whatever form this might take, is back on the agenda.

“That’s why we are launching this fund now; we are keen to ensure that we play our part in helping manufacturers to maintain or improve their competitiveness and build financial strength at the same time. With the absence of capital repayments and very competitively-priced fixed rates, borrowers should be able to maximise their ability to invest for growth, and we see this initiative as an extremely positive step in helping the sector to contribute more broadly to recovery of the UK economy.

“As far as the application process is concerned, it is very much business as usual, in that access to

the fund is a straightforward commercial process that manufacturers will be familiar with. Once all relevant information concerning a proposition is available, we expect decisions to be made and loans documented and available for drawing within four to six weeks. I would therefore strongly encourage manufacturers to contact their relationship manager to learn more about the fund in the near future.”

Reaction to the fund has largely been positive, albeit with a sense of caution tempering any premature celebrations at this stage. EEF director of policy, Steve Radley, praised an initiative being introduced to support growth. “Recognition by the banks that they have a role in supporting productive companies is a welcome step in the right direction,” he said. Similarly, with RBS claiming the fund

Recognition by the banks that they have a role in supporting productive companies is a welcome step in the right direction Steve Radley, EEF director of policy primarily targets small and medium-sized businesses, senior strategist at BGC Brokers, Howard Wheeldon, said the bank should be saluted for “heeding the call of the small guy for support.” Wheeldon raises a more intriguing point, however. “Each year banks do more to protect themselves against ‘bad’ loans,” he said. “Let’s hope that RBS isn’t just talking the right talk while having no intention of doing what banks are supposed to do — take a degree of necessary risk.”

Ultimately, RBS’s Manufacturing Fund is a commendable show of support to the sector. But while the money has been made available, and the headline rates are attractive, for many the champagne can be put on ice. Credit constraints still exist, and SME manufacturers’ plight will not be solved by ventures like this alone. RBS’s job now is to convince potential customers that borrowing terms are less onerous with this fund than those offered by the general banking market 6-12 months ago. Only this will demonstrate whether the fund can make a real difference to a sector that is, in the main, still reeling. end

Have your say at www.themanufacturer.com

41

What’s in store for

2010?

With manufacturers promised a long-awaited recovery this year, Edward Machin meets BDO’s Tom Lawton to discuss how credit lines, the Eurozone, increased growth and an upcoming general election are set to affect the sector in 2010.

We

are, it is fair to say, starting the decade from a position of some considerable difficulty. GDP down by 6%, exports by 10%, widespread redundancies and an impact on manufacturing that only began to return to any degree of normality in the final quarter of 2009.

Confirms Tom Lawton, head of manufacturing, BDO, “The recession of 2009 was so devastating in its impact that even signs of bottoming out were treated as good news, especially within our sector.

However, we are currently at the point where things are very slowly improving, and I am delighted to report that we expect similar gains to continue throughout the year.”

“As such, both the sector and economy at large will begin to reclaim a degree of confidence as the year progresses — not necessarily because of their overly sparkling performances, but due to the fact that maintaining a steady ship can actually be considered a success in current conditions.” With growth is predicted at approximately 0.9% for the sector in the upcoming year, “2010 will be far from smooth sailing for manufacturers and trade in general,” says Lawton.

“However, given that the emerging economies have not suffered to quite the same degree as Western markets, we see the UK pick-up being driven by those companies who are largely export-driven.”

“That being said, while considerable attention is being paid to China’s capacity to kick-start growth, it should not be forgotten that the Eurozone is still where we do the majority of our business.

The German economy, for example, in which manufacturing performed considerably worse as a

42

sector than the UK, appears to be slowly recovering — which we believe will have a positive knock-on effect for manufacturing on these shores.”

Furthermore, at the macro level global trading will, says Lawton, “Play a potentially decisive role in the pick-up, with continued expansion from overseas markets and exchange rates being broadly beneficial to UK manufacturing. While weaker sterling undoubtedly assists exporters, it also forces importers to rethink their supply chains — the result being that British goods are re-introduced into the orderbooks, thus further accelerating any return to health.”

Having conducted research with EEF into the prospects for manufacturing in 2010, BDO identify three sectors which are expected to see an upturn and, conversely, three which may face continuing difficulties.

A year to remember?

1

Mechanical equipment — Machine tools manufacturers, supported by the emerging economies and increased operating capabilities, can expect an improved year, says Lawton. “Investment through 2009 was particularly low, and while it won’t be a bonanza year by any means, we do expect it to return, albeit slowly.”

2

Electronics — While not necessarily relating to the entire sector, areas such as equipment for processing controls are expected to see a pick-up, says Lawton. “Although the majority of global electronics are manufactured in Asia, we see that a good percentage of their components are being manufactured in the UK. As such, the emerging economies internal pick-up will mean that electronics are set for a relatively healthy year.”

Specialfeature BDO

3

Metal products — BDO expect those working in the metal trade, especially steel providers and stockholders, to have a slightly better year in 2010, the caveat being that this is largely down to their having such a dire 2009. “Because it simply cannot perform any worse, we’re bound to see a pick up in the sector — a negative positivism, if you will,” says Lawton.

A year to forget?

1

Automotive — Perhaps unsurprisingly, vehicle producers will continue to struggle in 2010, says Lawton, “The only qualification being that things may not quite hit the devastating lows of last year. Compounding problems such as weakened consumer confidence and lack of available credit, however, is the sector’s fundamental imbalance — too much supply and not enough demand, nevermore so than in the European and American marketplaces.”

2

Aerospace and defence — While the sector enjoyed a relatively healthy order book in 2009, it is nonetheless set for a difficult year. This is largely because, says Lawton, “It took a while for the airline industry to close down or revisit its requirements, and we therefore expect a significant impact on the order books over the coming quarters.”

3

Heavy industries — Given their connection to the automotive and aerospace sectors, manufacturers working in casting and heavy engineering will suffer from a trickle down effect in the supply chain. “Although the outlook is marginally less perilous than 2009, confidence levels in the heavy industries will still be very low, with few signs of growth,” says Lawton.

Ultimately, says Lawton, “We must remember that the UK has a world-class core manufacturing base which is used to dealing with very difficult trading conditions across successive downturns.

The characteristics that have enabled companies to be successful in the world market — R&D, innovation, first-rate service and responsiveness, among others — remain intact, coupled with the fact that the government appears to be visibly supportive of the manufacturing sector and its position at the forefront of the UK economy going forward.” However, with a general election less than five months away, what sense does Lawton have of such a focus remaining in place? “Clearly there exists anxiety as to what the election’s outcome will mean for reducing public debt and, more specifically, how this will impact manufacturers,” he says. As such, “While confidence is significantly better than it was six months ago, this political uncertainty will continue to increase any sense of fragility pervading the sector.”

Don’t bank on it While Lawton sees 2010 as an encouraging year for manufacturers, the question of bank lending remains a particular note of caution. “Although not wishing to rehash, by now, well-trodden

ground, one wouldn’t be churlish in saying that access to credit was particularly difficult for some manufacturers in 2009,” he argues. “That said, we see the banks trying to continue their support to customers; perhaps not being overly aggressive in seeking to win new business or extend credit lines, but funding has remained in place for the majority of businesses.”

“While the engine of growth that is an increasing of debt could certainly be more pronounced, given that the sector’s KPIs took a battering in 2009, the key question remains whether the banks and credit insurers will recognise such revised metrics with their lending in 2010 and beyond. Using 2008 scoreboards demonstrates that most companies are not performing as they were and, as such, we are entering a particularly interesting period as the economy returns to growth in the first two quarters. Very simply, as manufacturers demand more support for the working capital, will it be made available to them?”

We must remember that the UK has a worldclass core manufacturing base which is used to dealing with very difficult trading conditions across successive downturns Tom Lawton, head of manufacturing, BDO

The following twelve months will no doubt answer these questions, and more. Somewhat paradoxically, however, the recovery cycle offers increased potential for corporate failures, with growth struggling to be managed by the underlying funding. While accepting the potential knock-on effects of any such reduction in credit, Lawton assures that, “We have probably seen the worst of the storm, and although that is not to say that things will be wholly trouble-free from here on in, manufacturers can — and should — be cautiously optimistic in their outlook for 2010. With UK growth increasing, both the emerging and Eurozone economies experiencing improved performance and the promise of continued governmental investment in the sector, expectations of a more encouraging year can rightly be made. The upcoming quarters will be not be without their difficulties; it would be naïve to think otherwise. Nonetheless, having weathered the worst economic conditions in living memory, manufacturers have every right to congratulate themselves. With the resilience of British manufacturing at the front of our minds, we wish you every success for 2010.” end

Have your say at www.themanufacturer.com

43

Engineeri n g success

With its doors opening later this year, Britain’s first regional Academy looks to offer tomorrow’s manufacturers a viable alternative to the traditional, jack of all trades curriculum.

Edward Machin finds that digger maker JCB continues to do things a little differently…

I

never let my school interfere with my education, quipped Mark Twain. Author of the Great American Novel, President-befriending socialite and amateur scientist, Twain was, however, yet to visit the JCB Academy. Had he done so, a man of his legendary capacity to invent would have found much to admire, for little about the Academy is anodyne. With an educational year consisting of five terms of eight weeks in length and a uniform including boiler suits and work boots, students will not, it is fair to say, be attending their father’s school.

We shouldn’t be altogether surprised at JCB’s education initiative, however given that the company has long demonstrated its commitment to fostering interest in manufacturing among Britain’s youngsters. Together with sponsoring countless

44

Young Enterprise/Engineer Schemes, Technology Competitions, Industry Days and ‘Maths in Action’ events, JCB holds strategic partnerships with a raft of higher education providers. These include Thomas Alleyne’s and Burton College, as well as Harper Adams, Loughborough, Warwick and Edinburgh universities.

An academy of its own was, it seems, JCB’s next logical step. With a genesis stretching back to 2006, it is expected to represent, in the words of Paul Pritchard, head of the JCB Academy Project, “The culmination of a drive to create a long term platform to regenerate manufacturing and engineering in Britain.”

No trouble at’ mill Situated adjacent to JCB’s headquarters in Rocester, Staffordshire, the Academy will be parthoused in the Grade II listed Tutbury Mill, with a new annexe housing the main classrooms. Built in 1871 by Industrial Revolution entrepreneur Richard Arkwright, who is widely credited with inventing the water frame, renovation of the picturesque site began in December 2009.

When fully refurbished and regenerated, the eco-friendly facility will feature purpose-built engineering areas, equipped with both CAD and CAM technology for use by the students. Power for the site will be supplied by an Archimedes screw —

People and skills

JCB Academy, an artist’s impression

JCB Academy, under construction

which, when fitted to the mill race, will utilise water from the River Dove to turn the screw and power a generator. Coupled with a biomass boiler, rainwater harvesting technology and photovoltaic cells, the Academy is set to offer a uniquely energy selfsufficient place of learning for students, faculty and the JCB partners alike.

Preparing for its first intake of budding engineers in September, the £22m Academy embodies what a growing number of people in industry hold as education’s joined-up, handson future. “When we come out of this recession, Britain will need technicians and engineering skills.

The JCB Academy will undoubtedly help to meet such needs,” says one such advocate, former Conservative education minister Lord Baker.

“We have never educated enough engineers in this country, and the JCB Academy will provide magnificent training, given that it is the sort of college that links the mind and hand.” Crucially, says Lord Baker: “What is unique about the JCB Academy is that youngsters will choose to come here aged 14, not when they are 11. Eleven is too early, and 16 too late.”

With 90% of its budget being provided by The Department for Children, Schools and Families, JCB is contributing the remaining 10% of capital funding for the independent, all-ability Academy. Established in 2000 by Tony Blair under the banner of “city” academies, prospective schools are required to raise an initial £2m, usually provided by a private organisation, philanthropist, faith or voluntary group.

To date, 80 of the 120 places for its first intake have been filled, with the Academy projected to reach its full capacity of 540 students by September 2013. Pupils will be selected from a catchment area of Derbyshire, Derby City, Staffordshire and Stoke-on-Trent, with local partner schools including Thomas Alleynes (13-19 years), Burton College (Further Education College) and Harper Adams University College (Higher Education). Since its inception, moreover, the Academy has worked in conjunction with industrial leaders such as RollsRoyce, Toyota, Bombardier and Network Rail to plan, design and finance both the Academy and its scholastic structure.

Homework? Not here…

Arguably the most innovative aspect of JCB’s Academy — the building, ethos and educational programme aside — remains its hands-on, uniquely engineering-centric syllabus. While focused largely on the Diploma, a new qualification for 14-19 year olds which sits alongside GCSEs, A levels and Apprenticeships, the curriculum will nonetheless include aspects of traditional higher education programmes. Students in years 10 and 11 will, for example, work towards GCSEs in Mathematics, English, Science, Modern Foreign Languages and Information Communication Technology.

These will be supplemented by classes in physical

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29/5/09 13:03:31

People and skills

education; citizenship; enterprise education; careers education and guidance; religious education; and personal, health and social education. become “outstanding” under his leadership, Introduced in 2005 based on Wade’s “vision of a worldby the Government’s class education.”

14-19 Education and During his time at South Molton, the Skills White Paper, the College moved to one being judged as Diploma accreditation ‘outstanding’ by Ofsted. offers industry-relevant learning through a Wade’s background includes a range of combination of practical leadership roles in schools — from 1996skills development with 2000 he was Deputy Head teacher of one of the firsts group of schools in the South Jim Wade took up his position as principal theoretical and technical West to gain Technology College status. of the Academy on 1 January 2009, after understanding. As Wade is also a School Improvement Partner eight years as principal of South Molton such, JCB Academy for Swindon Borough Council, working with Community College in Devon — students will undertake them on schools identified as ‘coasting’ an institution judged by Ofsted as having project-based Diplomas in Engineering and Business, Administration Local rumblings? and Finance — the former introducing students to Platitudes continue unabated for the Academy, the engineering world, its technologies and future, with Staffordshire county councilor, Philip Atkins, while the Diploma in Business offers modules in praising the project as, “Excellent news for accounting, effective business administration and Rocester, young people in the area, and the responsible business practices, among others. engineering and manufacturing industries as a Sixth form students will study for Advanced whole.” Even so, the accusation that the school may Diplomas in either Engineering or Business; be poaching the best of local talent for its intake equivalent to three and a half A levels each. is one that cannot be ignored. Academy Principal, According to Dr Geoff Parks, senior engineering Jim Wade, responds, “We are providing an lecturer at Cambridge University, this will provide, unrivalled opportunity to those young people whose “Exciting opportunities for young people to develop aspirations are to be engineers and business leaders the knowledge and skills that will put them on the of the future — you would hope that schools do not path to higher education and successful careers wish to take that opportunity away from them.” in industries vital to this country’s economic “Students at the Academy will leave with both wellbeing.” Offering a more rounded curriculum than top class qualifications, should they wish to pursue years 10 and 11, however, sixth form students can academia further, and a range of skills that will optimise choose complementary A levels in subjects such their employability,” he says. “For example, the ability to as design and technology, economics, accounting, work in a team environment and solve ‘real’ problems and further mathematics — but also art, English within industry-leading organisations, which represents literature, ethics and philosophy, performance the crux of our curriculum, will ensure that students are studies, photography and psychology. ideally placed to be effective participants in whichever Delivered and funded in conjunction with businesses they choose to enter.” the JCB commercial partners, each term will be And there lies the rub. Children with a based around an engineering challenge, designed burning penchant for the arts or humanities may, to introduce specific aspects of production and understandably, be better catered for elsewhere. business performance processes. The Toyota But for youngsters such as Cameron Platts, 13, who challenge, for example, will see students working says, “I want to go into a career working with cars, with CNC tools to manufacture valves in accordance and I think the academy will be really good for me to with the company’s strict quality control standards. be able to achieve that,” the academy is an obvious To enable work on such projects, pupils will be choice. Indeed, one would be hard pressed to find provided with a mini laptop PC — theirs to keep a more innovative, talent-nurturing and opportunityupon graduation. Indeed, laptops are essential laden environment than the JCB Academy in for students to access their learning, with all which to realise their dreams of engineering assignments and materials provided in an electronic success. Given the oft-repeated calls to engage form. Working in teams to plan each unit of work, more fundamentally with Britain’s manufacturers the Academy’s hours are more like a business’s of tomorrow, the sector — parents, teachers and than traditional schools and sixth form colleges, students additionally — must be grateful. end meaning that there will be little, if any, homework.

Jim Wade JCB Academy

Have your say at www.themanufacturer.com

47

Peopleandskills Training

diary

Part of the Hepco Group, Devon-based HepcoMotion was founded in 1969 and is a leading UK manufacturer of linear motion products used in everything from production lines to medical scanners. It is typical of many UK manufacturing companies in that it has faced increased overseas competition and tough trading conditions during the recent economic climate.

However the company recently turned to the National Skills Academy for Manufacturing â&#x20AC;&#x201D; part of Semta, the Sector Skills Council for Science, Engineering and Manufacturing Technologies â&#x20AC;&#x201D; for help in developing a training programme to help the 150-strong workforce meet the challenges it faces. In the first of a series of diary entries, manufacturing director Barry Engstrom explains the issues facing HepcoMotion and the immediate benefits of working with the Skills Academy.

Tackling an ambitious training programme As

part of our journey towards world class manufacturing status we identified several challenges, including a lack of awareness within the manufacturing team of lean manufacturing techniques. This is particularly important due to the nature of the high precision components that we make. These include one-off bespoke items and mass produced parts for a wide range of applications.

We then discussed how best to educate the team and although we have excellent internal training capabilities, the most effective option was to engage an external provider.

We had already worked with the Skills Academy and Bristol-based providers Brunel and Gordano Training on our successful apprenticeships programme, and so we decided to conduct initial talks on expanding training to the

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wider workforce.

Following meetings with the Skills Academyâ&#x20AC;&#x2122;s South West regional manager, Brian Thornton, we carried out a thorough review of our operations to identify the skills gaps and to draw up a matrix of training needs. This analysis identified opportunities for improvements that could be made even before the training started. Many of these have already been implemented, such as the repositioning of equipment on the shop floor to improve the flow of products through the manufacturing process.

The Skills Academy also helped us to match our training needs to our wider business targets and as a result we decided to embark on an ambitious programme of business improvement techniques (B-IT) training to NVQ Level 2 for more than 100 members of staff.

Have your say at www.themanufacturer.com

This programme will include elements to improve staff literacy as well as initiating more than 80 individual projects aimed at improving efficiency by 25 per cent, reducing lead times by 20 per cent and cutting setting-up times by 70 per cent.

In the next diary entry, Barry will explain how the training is being delivered and the response from the workforce, with an update on how far the company has progressed in achieving its targets. end

Sally Walters Pell Frischmann Late last year Sally Walters, a senior civil engineer for Pell Frischmann, was named Young Woman Engineer of the Year by the Institution of Engineering and Technology.

Sally’s

job engages her in two separate commissions; design engineer and project manager for schemes.

She mostly works on the implementation of things like sewage treatment works and storm water lagoons.

As designer she undertakes feasibility assessments and evaluations, as well as designing and reviewing solutions. This can involve working with a wide range of engineering disciplines including process, geo technical, environmental, mechanical and electrical.

Her role as project manager sees her liaising with clients and contractors in addition to the different engineering practices.

Sally is now pleased with that balance, having earlier in her career learned separately the practical and academic sides of the industry. After gaining a first class award for her Master of Engineering at Nottingham University, she went to work for Costain as a site engineer in a strictly practical capacity. A year and a half later she was offered a research position at Exeter University in conjunction with South West Water, completing a Master of Philosophy degree in her spare time. Having satiated her academic bug, Sally then took a job with her current employer as a civil engineer. Less than three years later, in June 2009, she was promoted to her current senior position.

“Early on I just wanted to be involved in the construction side – building things and developing things on site,” she explains. “Then I decided that I wanted to be involved in research and design because I thought it would be more rewarding to have people building my designs. Now my job involves both site work and design, so I get the best of both worlds.”

Much of Sally’s work is contracted from her former employer, South West Water. Project sizes vary and for small evaluation projects typically worth less than £50,000 Sally is the designer and also leads the project team. For larger schemes – which can have construction values worth millions – Sally may be the project manager for several teams. In July 2008, Sally was made project manager for a key job in Romania, with fee-earning in excess of £1.8 million and she says she’s proud to have been

given the opportunity at such a young age. Her proudest moment is reserved for something a bit more modest though. “I’ll never forget the feeling of satisfaction on seeing my first project, small though it was in industry terms, standing built before me,” she says.

It is this creative element of the industry which first attracted her into engineering. “You have the opportunity to be, creative, innovative and you design things that actually get built,” she says.

Another attraction was the scope engineering allows her to make a real difference in the world.

In the future, she plans to take a long sabbatical and work in a developing country on a sustainable development strategy for green energy.

CV in brief – Says Sally: Sally Walters “Whether it’s here or in a developing country, Employment: the work you are doing could be helping people March 2003 - Sept 2004 – Costain Ltd – Graduate Site with basic necessities Engineer like sanitation or it Sept 2004 - Sept 2006 – could simply be a Exeter University and South West development that could Water – Research Associate make people’s life a little bit easier or more comfortable.”

All in all, engineering is an asset to Sally – almost as much as she is to it. The characteristics of the work compliment her mindset, allowing her to act on her ambitions, while the industry benefits immeasurably from someone with enthusiasm that is outweighed only by talent. That is why Sally Walters is the IET’s Young Woman Engineer of the employee of the month. end

Sept 2006 – July 2009 – Pell Frischmann Consulting Engineers – Civil Engineer

July 2009 – To date – Pell Frischmann Consulting Engineers – Senior Civil Engineer

MEng Civil Engineering – 1st Class Honours – University of Nottingham

Mphil Engineering – University of Exeter

Chartered Engineer – CEng

Education to date:

Qualifications:

Year and also TM’s

Have your say at www.themanufacturer.com

49

I=: A6HI I=>C< I=:N LDJA9 L6CI ID 7: A:;I L>I= Getting fresh produce into stores is Poupart’s business. They are masters of a tight and dynamic supply chain where delays cost money, as well as reputations.

“Our service to the supermarkets has improved through increased visibility, in fact the system now provides complete tracking and traceability of all products”. Robin Dawson, Finance Director We’re proud to provide the technology systems that helps to make Poupart one of the leading companies in its field.

To see how a Tectura solution could help improve your business call us on 0845 084 0152 or visit our website www.tectura.co.uk.

6 I:8IJG6 HDAJI>DC 7J>AI DC B>8GDHD;I 9NC6B>8H C6K 6 I:8IJG6 HDAJI>DC 7J>AI DC B>8GDHD;I 9NC6B>8H C6K

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IT in

manufacturing

Demystifying the Cloud What is Cloud Computing? Search.com provides the following definition: “Cloud computing is a general term for anything that involves delivering hosted services over the Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platformas-a-Service (PaaS) and Software-as-a-Service (SaaS).” The term ‘cloud’ is used as a metaphor for the Internet, based on the cloud drawing used to depict the Internet in computer network diagrams as an abstraction of the underlying infrastructure it represents.

However,

Martin Banks, associate analyst at Bloor Research for Data Centres, says, “I prefer the term Exostructure — an externally sourced, and theoretically limitless, seamless extension of an internal IT systems infrastructure that delivers information services on a fee-paying basis. This is looking at the issue from the users’ point of view.”

A cloud service has three distinct characteristics that differentiate it from traditional hosting: It is sold on demand, typically by the minute or the hour; A user can have as much or as little of a service as they want at any given time; and The service is fully managed by the provider — the consumer needs nothing but a personal computer and Internet access.

Rather than operating applications on an in-house computer, therefore, you run them on an external machine — which could be anywhere in the world, accessing the application programs via the internet.

Data associated with the application is held externally to your organisation and hosted on a server, with the data being stored in a database all on a server run by a third party.

Digging deeper…

A cloud service can be either public or private. A public cloud sells services to anyone on the Internet; Amazon Web Services, for example, is currently the

largest public cloud provider. A private cloud is a proprietary network or a data centre that supplies hosted services to a limited number of people. The final concept to understand is that of the virtual private cloud — i.e. when a service provider uses public cloud resources to create their private cloud.

Once understood, our attention turns to what it is that makes cloud computing so appealing?

In a recent article Nigel Stanley, Bloor Research’s security practice leader, said, “In an economic downturn, cloud computing oozes sexiness. The thoughts of off-loading your data to a third party gets financial types excited, given that they start to see how much money can be saved.” Cloud computing means that rather than purchasing software, which would go on your CapEx, you pay for it when you use it — coming from your OpEx budget instead.

Manufacturing the Cloud So far, so good. Crucially, however, can cloud computing be used in manufacturing? CRM has been one of the first areas covered, piloted by Salesforce.com with its launch in 2000. Salesforce. com’s CRM solution is broken down into several modules: Sales, Service & Support, Partner Relationship Management, Marketing, Content, Ideas and Analytics. Its Platform-as-a-Service product (Force.com Platform) allows external developers to create add-on applications that integrate into the main Salesforce application and are hosted on salesforce.com’s infrastructure.

Figure 2: A Cloud Computing Stack (Source: Cloud Computing in Manufacturing, Christian Verstraete, HP, May 2009)

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IT in manufacturing

Salesforce.com currently has 55,400 customers and over 1,500,000 subscribers. Why CRM? Quite simply, it is due to the need to support a mobile sales force that records information easily and quickly without necessarily having to contact the centre.

Couple this with the need for the centre to have control over this distributed workforce and you create an ideal environment for cloud computing solution.

“Salesforce.com made much of its early running selling its service to sales managers direct who prefer to buy a simple web solution they could use immediately and pay for from their expenses budget, rather than getting a CapEx approved and have their IT department build a solution for them,” says Sam Lowe, Sector CTO at Capgemini. “More and more of the sales force deployment I see now have been done in partnership with IT and are better integrated and leveraged for it, but a sizeable proportion are still like that.”

A number of the large ERP vendors provide cloud capabilities; SAP, for example, launched its Business ByDesign in September 2007. Having been plagued by negative press, however, in September 2009 SAP gave a briefing to the industry on how it was tackling a number of its solution’s issues. These included: Scalability — all customers run on their own blade servers Overly “feature-rich” — the suite was originally designed to meet all of the needs of its customer base instead of focusing on specific functionality Lack of corporate commitment — SAP is cutting R&D funding and shifting resources to other products Runs on NetWeaver — a full instance is too heavy for a SaaS application and finding “cloud developers” who have full Java EE stack experience may be tough Infor entered the market in October 2008 with the launch of a SaaS version of ERP SyteLine. It is a typical entry from an existing vendor, in that it allows a user to move seamlessly between SaaS and on-premises deployment, or vice-versa. Microsoft Dynamics entered the SaaS market in 2007 with the introduction CRM Live. This is run at Microsoft data centres around the world, along with all the other “Live” products such as Live Small Business Office.

Software-plus-Services for Microsoft Dynamics ERP is the new capability being offered, which allows a user to choose to implement their Microsoft Dynamics software as a wholly-owned on-site solution, via online services, all or partly-hosted, or in any combination.

Similarly, Oracle entered the market last year with the introduction of an offering comprising its Oracle Sourcing and Oracle Sourcing Optimisation products. The tools can be used to aggregate demand; determine whether an RFP, RFQ, or other sourcing process is needed; compile contract terms; notify and qualify suppliers; establish prices and discounts and conduct multi-round negotiations; and aggregate and award bids. In addition, Oracle is offering CRM as a SaaS, call CRM On Demand.

Christian Verstraete, HP’s chief technologist for manufacturing and distribution services, believes a number of areas will quickly become the favourites of manufacturing companies. These include: Cross enterprise collaboration — Verstraete sees cross-enterprise collaboration as being a current weak point in Supply Chain management. The required integrated environment would require the exchange of structured and unstructured data, and synchronous and asynchronous communication. By integrating multiple concepts of social networking and providing them in an integrated, cloud based environment, companies could use a variety of collaboration mechanisms to perform key business processes without having to manage the environment.

High Performance Computing — Verstraete foresees the needs for additional computing power as companies increase the use of digital models to virtually test their products and/or to understand their business environment better through business intelligence and decision making. The models used are typically highly parallelisable, and fit well for a cloud environment as long as the amount of data they need to be provided with is not large, when the network could become a bottleneck.

1

2

Approach with caution Its benefits aside, cloud computing can get a business into hot water if they have not thought through the many consequences, particularly regarding data security. “Without assurances that organisational data will be totally secure in a remote site, the whole concept of cloud computing is dead in the water,” says Bloor’s Stanley. Securing the cloud, therefore, is vital for its success. With companies trusting their corporate data — their most important asset — to third party organisations, the holy trinity of confidentiality, integrity and accessibility has to be assured. The infrastructure underpinning this is Identity Access Management (IAM); without it, system access security is non-existent.

A final worry relates to the ability of the service provider to continue operating. Raimund Genes, CTO at Trend Micro, says, “You need a provider that will be in business three years from now. When you give up your IT infrastructure, you need a reliable service provider.” Indeed, with Cloud Computing you must realise that your business process in no longer in your complete control. It is wrapped into the cloud service and in the control of the provider” It is imperative that when selecting a cloud service provider you choose one that is likely to be there for the long-haul, or a supplier that has a strategy to manage the situation if they are not there.

Indeed, says Rob Price, head of IT leadership at Atos Consulting, “Argubaly the most interesting aspect of this technology going forward is when one considers the solutions specific to sub-market sectors.

Where companies have struggled to make a case for developing or replacing their legacy systems, they now have the opportunity to determine whether as a market they wish to further develop and share the cost of a different model or have the supplier compile groups of organisations — thus provisioning more complex offerings through a software/systems model.” end

Have your say at www.themanufacturer.com

53

Customers and Shareholders Benefit as Global Manufacturer Deploys Management Solution Global manufacturer Sevcon needed to replace ageing and disparate IT systems running at its five international sites. A lack of integration meant that business managers were unable to get an accurate, up-to-date view of the company. Sevcon worked with Microsoft® Gold Certified Partner Columbus IT to deploy Microsoft Dynamics™ AX business management software, supported by the Microsoft server infrastructure. The new solution is easily customised to meet manufacturing needs, can grow with the business, and offers flexibility at Sevcon sites in different countries.

E

mployees can connect to the network and use one single source of business information no matter their location. Customers and shareholders are getting greater value from a system that both supports and adapts to business needs.

Situation Sevcon designs, manufactures, and markets electric motor control systems. Since its inception in 1961 in the United Kingdom (U.K.), Sevcon has been at the forefront of electric vehicle technology. The company’s success has resulted in expansion to France, the United States (U.S.), Japan, and Korea where it has manufacturing and sales facilities.

But despite its success, the organisation’s staggered expansion created new challenges.

Each Sevcon location used different IT solutions, from Novell and UNIX, to the Microsoft® Windows NT® operating system.

The incompatibility of these systems meant that information had to be transferred from one system to another manually. Simple data sharing among employees across different sites was time consuming and error prone and, as a result, critical business information was slow to be relayed across the enterprise.

Darren Errington, Management and Information Systems Manager, Sevcon, says: “Separate systems often resulted in duplication of data and identical information being presented differently at each site, causing confusion among employees. Even when discussing the same project or item, what they could see on screen could differ significantly.”

A lack of visibility of data meant that senior managers had to manually calculate accounts information, sales figures, and inventory and stock levels. Financial reporting across the business was slow, and the inconsistent nature of charts of accounts forced the company’s technical team to develop a complex financial reporting solution.

But the business systems Sevcon used were not flexible enough to adapt to market changes, effectively ruling out major upgrades. To improve its business processes and maximise efficiency, the group required a business management solution with strong reporting features, so users could extract information easily. Not only would this

54

improve the day-to-day operations of employees, but it would also support efficient inter-company trading to create a leaner stock control process and improve customer service.

Errington says: “We saw that our systems were preventing us from improving, developing, and increasing the size of our organisation.

Sevcon continually explores new technologies to benefit customers.

Now we needed a new technology solution for clearer, global visibility of information for employees.”

Solution Alleviating stockholder concerns was a priority for Sevcon. It is a public company that trades on the American Stock Exchange, and needs to assure investors that the correct processes are adhered to and are supported by reliable systems. To allay any concerns, the company independently researched 40 management systems, including Sage, Scala, and Microsoft Dynamics™ technology.

Sevcon employed a team of consultants who interviewed users to understand their needs and developed a shortlist, paying particular attention to functionality, scalability, and cost.

Microsoft Dynamics AX was chosen as the most suitable solution.

Errington says: “Microsoft Dynamics AX was the only solution that gave us a single view of all data, held on a single database. It helps to connect our employees, processes and business information no matter where they are located around the globe.” Sevcon chose to work with Microsoft Gold Certified Partner Columbus IT because of its experience in Microsoft Dynamics AX solutions and strong presence in the U.K., U.S., and France. Errington says: “Columbus IT added a lot of value to this solution and worked closely with us throughout the process, delivering training, resources, and consultancy advice.”

Microsoft Dynamics AX provides Sevcon with a centralised solution that automates accounting, manufacturing, sales, and stock management processes, and provides clear, up-to-date information at any time to any user across the enterprise. Keen to get the most from its new software investment, the technical team at Sevcon invested in the Microsoft stack of integrated technologies.

Errington says: “We now have one database located at our headquarters in the U.K., and have centralised our system and infrastructure. All five sites run Microsoft Dynamics AX and, as a result, we can operate efficiently as one organisation regardless of the distance between our offices.”

Benefits Since implementing Microsoft Dynamics AX, Sevcon has gained clearer visibility across its business worldwide. The solution improves inter-company trade and stock control and, as a direct result of improved business efficiencies, customers benefit from a faster, more responsive service.

Employees Gain Greater Business Visibility Across Multiple Sites

Sevcon now hosts all business information on one, accessible system. The modern, graphical user interface makes viewing detailed information far easier. Andy Turnbull, Production Supervisor, Sevcon, says: “Navigation is simple. Compared to our previous system where you could only have one screen open at a time, this solution offers a vast improvement. I can drill into the information and compare data side by side without having to leave my main area of focus.”

Senior managers and decision makers gain complete visibility of the business across departments, teams, and international locations. Matt Boyle, President and Chief Executive Officer, Sevcon, says: “I now have a consistent overview of our global business on one screen. With a click of the mouse, I can switch between subsidiaries and compare real-time data in seconds. This is a huge improvement that adds significant value to the strategic decision making process.”

Easy Customization Delivers a Low Total Cost of Ownership

With development and system maintenance time significantly reduced, the organization has already benefited from low total cost of ownership.

“With Microsoft Dynamics AX, we have the development framework we need to extend the technology’s functionality and customize it to meet specific manufacturing needs without disrupting day-to-day activities,” says Errington. “The powerful development environment has let us rapidly build our own Service Returns, Engineering Control, and Maintenance modules.

Microsoft Dynamics AX is also so adaptable and scalable that it is already helping us to support our commitment of leading the field, and improve customer service, product quality, and shareholder value.”

Regulatory and compliance legislation, such as the Sarbanes-Oxley Act, creates additional requirements for transparency and control across businesses. Sarbanes-Oxley enforces internal accounting controls, stating that all business records, including electronic records and electronic messages, must be saved for five years.

Errington says: “For a company of our size, this could have turned into a massive expense. With so many different business systems, the audit fees to make us compliant would have been huge.” Creating and maintaining corporate records cost-effectively is easy with Microsoft Dynamics AX. The standardised processes and reporting features mean that Sevcon can introduce consistency of financial reports and automate record keeping across the entire group, reducing further expense.

Greater Control Results in Leaner Stock Line

Sales employees can clearly see the status of products in the supply chain and new orders placed by contractors in real time, making it easier to assess stock levels or predict market trends.

Errington says: “A user’s screen can be switched to an operations company in another country so the user can see what purchases have been made to satisfy customer demand. This is another step forward for us. We have been able to significantly reduce the amount of stock we hold, and can now distribute the stock much more efficiently.”

“Previously, our manufacturing resource planning/material requirements planning process would take six hours. Now, it only takes 20 minutes due to easier user interfaces, navigation, and data entry.”

“There is a massive feel of assurance in dealing with Microsoft.

You know that the company isn’t going to disappear tomorrow, and the technology is only going to improve. That gives us a great deal of confidence.”

One Complete View of International Operations

The distributed nature of the business means that Sevcon has a real need for country-specific features. Multi-language and multicurrency functionality help ensure information complies with local legal and accounting standards. Similarly, costs and prices can be converted to local currency values at the click of a mouse.

“Our users in France can access the central system and see the information presented on their screens in French.

Our users in the U.S. and the U.K. see the same information, but presented in a way that suits them,” says Errington. “Microsoft Dynamics AX was the only solution that was designed using a modern, elegant architecture that fully supports the needs of our worldwide locations.”

Accurate Financial Reporting Complies with Regulations and Cuts Audit Costs

For more information about Microsoft Dynamics, go to: www.microsoft.com/dynamics For more information about Sevcon products and services, visit the web site at: www.sevcon.com

For more information about Columbus IT contact: Email: info@columbusit.co.uk Freephone: 0800 0433 054 www.columbusit.co.uk

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IT in

manufacturing

ITnews...

ERP

Sage launches ERP X3 v6 Sage, a supplier of business management software and services, this month unveiled its new global mid-market ERP solution; Sage ERP X3 v6.

With hundreds of enhancements and new features, Sage ERP X3 v6 has been specifically designed to address the key issues facing mid-sized and larger businesses: reducing costs, saving time, offering full interoperability among sites and dispersed teams across the globe and improving the overall customer experience.

Epicor announces XL Connect Epicor announced the release of Epicor XL Connect, a business reporting and analytics solution that provides real-time, secured access to business data from Microsoft Office Excel.

The solution enables users to leverage existing spreadsheets while avoiding copy-and-paste or SQL queries. Immediate integration to business data allows users to create reports faster and easier; multi-dimensional drill-down functions help them explore the detailed data in just a few clicks without leaving Excel.

“Using Microsoft technology, Epicor XL Connect will empower information workers to work smarter and faster with access to live data — plus the ability to run numbers and make adjustments without leaving Excel,” said Gray Knowlton, group product manager for Microsoft Office

Moreover, Sage has created an international team to support the development of the Sage ERP X3 business. This team includes key personnel from Sage’s worldwide businesses, bringing together Sage’s local expertise and global resources to ensure Sage ERP X3 is highly relevant to today’s customers. The team will work closely with Sage’s local operations to ensure Sage ERP X3 is complementary to local midmarket product offerings, and includes international pre-sales and professional services, training, global R&D and global marketing and communications.

Speaking at the launch, Paul Walker, Chief Executive of The Sage Group plc, said, “The creation of this global organisation to support our Sage ERP X3 customers is another evolution in Sage’s long history of delivering what our customers need. I believe there is a significant opportunity for Sage to break the mould of the conventional approach to global ERP. Sage ERP X3 is a proven solution which addresses this need and the latest version, and the new structure demonstrates our commitment to customers in this market.”

Exel Computer Systems celebrates 25 years

IFS applications selected by Spacesaver

Exel Computer Systems, the UK based author and developer of the EFACS ERP system, reaches a quarter of a century of supplying business management solutions. The company was formed in 1985 by Dr John Ellis, who is still Chairman of the company today.

Enterprise applications company, IFS, announced that Spacesaver Corp will implement IFS applications — including financials, distribution, manufacturing, engineering, maintenance and sales & support — to simplify its shop floor scheduling and streamline its business processes.

During the early 1990’s, Exel moved to their current head office at Long Eaton, Nottingham, where they have continued to develop, support and grow the EFACS product in line with industry and client needs within the manufacturing sector — including Royal Crown Derby, Naim Audio, TT Group, Selex Communications, SCA Packaging, Laura Ashley and Magellan Aerospace.

2009 saw the launch of Eagle Field Service, aimed at companies with a remote user or field engineer requirement.

This has been followed by the launch of EFACS Enterprise, which runs on an Oracle platform offering integration between EFACS and the suite of Oracle applications.

“Our current enterprise solution didn’t fully support our various modes of manufacturing, so we decided it was time to look for a more effective ERP solution,” Spacesaver Vice President of Finance Mary Schrimpf said. “We needed a new solution that had the flexibility to support our Project/ ETO and CTO manufacturing with a strong solution for our complex shop floor scheduling needs. After much consideration, IFS proved they offered the best integrated enterprise solution for our complex business needs.”

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Silver service A quarter of a century since launching its EFACS software, Exel Computer Systems’ Rue Dilhe talks to Edward Machin about the need to future-proof IT systems, roadmapping and the direction of ERP in the coming years

E

stablished in 1985, Exel Computer Systems celebrates its twenty-fifth year supplying manufacturers with state-of-theart, flexible business solutions.

Beginning life on a Unix-based Informix database, the 1990s saw Exel move to a Microsoft platform and in 2000 creating a multiplatform, multi-operating browser based solution — installing over 650 customers worldwide along the way.

This continual embracing of new technology demonstrates that, says Exel managing director, Rue Dilhe, “We have not been a software house that has rested on its laurels, so to speak. Similarly, this ethos of ongoing development has meant that while Exel at its inception offered only a manufacturing and planning module, we now cater for the gamut of business management solutions — CRM; procurement; quotations and sales; dispatch; BI; workflow; document management; and full financials, amongst others.”

“As software authors Exel write, sell and implement integrated business solutions within the UK, coupled with a distribution network to service our global customers,” says Dilhe. “Importantly, given that we implement systems ourselves, as a software house we are able to govern the route of our development roadmap. We are very much in control of our own destiny, in that sense.”

“However, while such autonomy allows us to be more

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reactive to a client’s requirements, Exel is not simply after customers, but partners. Central to where we want to see the software going forward, therefore, is the input of our partner organisations and their continuing system requirements.

For example, Exel’s UK-based user group meets on average three times annually, with both clients and partners contributing directly into our roadmap.”

Dilhe identifies five distinct — yet ultimately inter-related — criteria to consider when choosing an ERP system:

1

Architecture When investing in an ERP product, says Dilhe, “I think it is fair to say that the majority of organisations look to purchase software which is based on solid, modern architecture. With a lifespan of a decade or longer, it must therefore withstand upheaval in the early years while being flexible enough to embrace new trends and technologies.”

“For example, Exel’s EFACS integrated business solution is currently on its third generation.

During the development of the architecture for each new version, Exel had the foresight to make it flexible enough to cater for new requirements. The latest E/8 version, for example, is capable of SOA enablement, BI, Workflow and integrated document management.

2

User friendliness “Those providing ERP systems must ensure that the end user experience is as seamless as possible,” says Dilhe. “The majority of businesses have an IT system in place; indeed, an increasing number have disparate systems or even a multitude of applications which users may use to undertake a particular job function. Companies, therefore, must look to purchase software which allows seamless integration — i.e. an application which covers 95% of the user’s requirements so that they do not have to exit one application to enter another, the result being a screen overrun with function windows.”

“Whereas traditional ERP applications/IT solutions utilised individual applications for each job task, simplicity of use is becoming crucial to companies going forward.

Not only does it make end users more effective in terms of their time, but there are the additional benefits of — often considerable — cost savings,” says Dilhe.

3

Functionality There is an expectation for software to meet both immediate requirements and those of the future, says Dilhe. “Software must be scaleable, with basic needs initially but, as the organisation grows, it will require a system which has the capacity to adapt and embed changing requirements. Accordingly, Exel software is both modular and fully integrated; covering an extensive range of job functions within a single user interface. With regard to scalability, applications such as CRM, BI and workflow are sometimes considered to be part of a phase two implementation for new installations — a fully integrated system should therefore ensure a seamless transition when new functionality is required.”

Integration “SOA will undoubtedly be at the use of the system itself to be an “While there is an expectancy forefront of any advances in the enjoyable experience.” of ERP software to cover all sector,” he says, “and, as such, Regarding the former, a aspects of a business’ needs whilst poorly implemented system can, we have a platform which allows operating as a fully integrated integration without any upheaval of says Dilhe, “Take a company system, there will always be a established architecture.” back significantly with regards requirement to integrate with “2010 will see the company to its operational efficiency. As other software packages — be further developing these such, businesses must consider they specialist requirements such capabilities, ultimately presenting a vendor’s implementation as group reporting software or users with the ability to allow methodology in depth, as well more traditional supply chain functional areas of their software as consulting reference sites in collaboration software,” says Dilhe. to be accessed by authorised order to ascertain where there “Given the importance of systems over the internet,” says has been a return on investment such assimilation, Exel offers a Dilhe. He cites the example of — thus justifying the costs which fully integrated system designed enabling purchasing departments have been incurred during the to cater to all requirements of to integrate directly with their installation period.” an organisation. Coupled with supply chains, “looking at real-time “Moreover, and unlike many our SOA — service-orientated stocks of raw materials, and thus of our competitors, we don’t architecture — enablement, transforming the relationships in force customers to operate in however, it allows our systems terms of operating in real-time as defined ways. For example, Exel to ‘talk’ to a multitude of opposed to not.” has supported users on the same applications as and when “Secondly, ERP systems version of software for over twenty required, further enhancing will, I believe, need to the user experience.” ensure more diverse Exel’s latest business functionality going Exel is particularly conscious solution, EFACS forward,” says Dilhe.

Enterprise, offers the “While they operate of ensuring that our clients proven EFACS E/8 problem-free for the find both the implementation ERP system on the majority of business Oracle database with needs, there has process and, more importantly, integration to the Oracle always been a case for use of the system itself to be an product suite. Dilhe specialised functionality enjoyable experience comments, “Where undertaken by there are sophisticated dedicated software. For Rue Dilhe , Exel managing director business requirements example, while a large for a company in product number of providers lifecycle management, for offer both a service facility years, while other customers example, the EFACS Enterprise and manufacturing capabilities, the are still operating EFACS on allows integration with Oracle’s systems are largely independent — unsupported operating systems Agile product. Oracle’s roadmap in the sense that they are and databases — given that the over the past few years has been not integrated.” original vendors ceased servicing to buy best of breed software.

To combat such problems, in older versions of their software.”

EFACS Enterprise extends the 2009 Exel launched Eagle Field Somewhat uniquely within the functionality of the EFACS E/8 Service, an advanced field service solution by allowing integration with industry, Exel offers supported management solution delivering customers free upgrades to the the comprehensive and diverse unprecedented levels of control latest versions of its software, suite of Oracle applications.” and visibility to field service nor does it charge for affiliated businesses. Crucially, says Dilhe, Longevity/investment system tweaks. “While 2009 was a “The solution is built upon the protection particularly challenging period for the infrastructure of our ERP system, “When looking to invest in an ERP IT sector,” says Dilhe, “we continued giving users the capacity to system, customers place great to take new business, including undertake procurement, financials, importance on selecting a vendor twenty customers upgrading to our stock, BI and workflow, among with a proven track record, history latest E/8 solution.” others, while simultaneously bolting of implementation success and onto any specialist requirements.”

Future a thriving customer base,” says “EFACS Enterprise also With Exel growing where many Dilhe. “As such, Exel is particularly combats this issue, in so far as it vendors have fallen by the wayside, allows EFACS E/8 to integrate with conscious of ensuring that our clients find both the implementation what does Dilhe see on the horizon Oracle’s portfolio of best of breed for future-proofing IT investments? process and, more importantly, applications”, says Dilhe.

Exel Computer Systems

4

5

For further information visit: www.exel.co.uk

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3EEING OLD )4 CHALLENGES IN A NEW BUSINESS LIGHT $ISRUPTION OR DELIVERANCE 3EEK OUT THE BUSINESS OPPORTUNITY WITHIN THE CHALLENGE "USINESS CHANGE IS INEVITABLE ¯ BUT HOW YOU ADAPT TO IT DICTATES HOW COMPETITIVE YOUR MANUFACTURING OPERATION CAN BE 4HAT´S WHY THE MOST PROGRESSIVE #)/S PARTNER !VANADE DELIVERING NEW LEVELS OF INNOVATION AND AGILITY TO HELP THEM REDUCE COSTS AND DELIVER GLOBAL SUPPLY CHAIN ADVANTAGE 7ITH OUR JOINT !CCENTURE AND -ICROSOFT HERITAGE !VANADE IS UNIQUELY PLACED TO HELP YOU KEEP YOUR EYES ON THE HORIZON

AND YOUR FEET ON THE GROUND 5SING THE -ICROSOFT PLATFORM AS A SPRINGBOARD FOR DELIVERING BUSINESS RESULTS WE´LL HELP YOU ADOPT A PRAGMATIC APPROACH THAT MAKES CHANGE LESS DAUNTING COMBINED WITH A VISIONARY ATTITUDE THAT PUTS REAL TRIUMPH WITHIN REACH &OR MORE INFORMATION VISIT WWW AVANADE COM

"E )4 PROGRESSIVE

&ROM !CCENTURE AND -ICROSOFT Â&#x2C6; #OPYRIGHT !VANADE !LL RIGHTS RESERVED

IT in

manufacturing

ITnews...

PLM

Siemens Software used in 90% of all new car programmes Siemens PLM Software announced that its technology enabled the development of more than 90% of the vehicles that automakers exhibited at the North American International Auto Show.

In 2008, there were 68m cars produced globally by the top 50 Organization of Motor Vehicle Manufacturers, and of those vehicles, Siemens PLM Software’s

technology was used in 64m.

Industry analysts project that 2009 totals are even greater than 2008.

“Of the 16 OEMs producing more than one million vehicles annually, 15 use Siemens PLM Software’s technology in the development and manufacturing of their vehicles,” said Siemens’ Chuck Grindstaff. “Overall, of the top 30 OEMs, 26 use Siemens PLM Software’s technology in the development and manufacturing of their vehicles — more than any of Siemens PLM Software’s competitors.”

Support services

SAP expands maintenance and support portfolio SAP announced the availability of a tiered support model that is being offered to customers worldwide. This support offering includes SAP Enterprise Support services and the SAP Standard Support option, and will enable all customers to choose the option that best meets their requirements.

Additionally, in response to the financial challenges organisations continue to face, SAP announced that its 2010 fees for existing SAP Enterprise Support contracts will remain unchanged from 2009 levels.

“This tiered maintenance model will allow customers choice in the SAP support model,” said Nils Niehörster, industry analyst, RAAD Research. “By providing different support options, simplifying the pricing structure, and giving a level of predictability to budget planning, SAP is helping its customers make decisions based on their business requirements.”

Product analytics - environmental compliance

PTC launches InSight Environmental Compliance software package PTC has launched a new product analytics software package to ensure companies are not using restricted materials in their products.

InSight Environmental Compliance is a complete software solution for managing the environmental performance of products. The software allows companies to ensure that their products meet customer and regulatory requirements, achieve corporate environmental goals and are not subject to blocked sales and costly supply chain disruptions.

The list of environmental regulations for reducing hazardous substances is continually growing and currently includes: EU RoHS,

China RoHS, Korea RoHS, ELV, and Reach. ERP and business intelligence solutions lack the requisite analysis capabilities and deep knowledge of the product Bill of Materials.

InSight helps manufacturers measure and improve product performance in terms of the various environmental directives which ultimately yields betterperforming, more profitable products that meet cost targets.

To avoid the additional costs associated with failing to meet environmental regulations, manufacturers must identify, track and control a constantly evolving list of high-risk substances. InSight provides a ‘best-in-breed’ solution for tracking and improving the environmental performance of products, parts, materials and suppliers.

Have your say at www.themanufacturer.com

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Geared for growth Lean manufacturing is playing a vital role in the operations of automotive parts supplier, Haldex.

Alex Pond, AX director at Avanade, reports.

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lobally dispersed manufacturing companies face a number of challenges when selecting an ERP solution and System Integrator.

Very few solutions offer the vital flexibility to cater for the unique processes of a company, while ensuring a low total cost of ownership. Only a handful of consultancies are able to provide a truly global reach, tailored support and consistency of implementation that only a single provider can deliver.

Dynamics AX is a flexible single ERP solution that meets the needs of each different business unit, either geographically, or by incorporating specific processes key to the organisation.

Avanade is also one of the few Dynamics AX partners that provides the global reach and robust implementation methodology that a large multi-country roll out requires.

To give a real-world example, Haldex is a global supplier of proprietary products for trucks, cars, and industrial vehicles.

Avanade’s Lean Automotive solution, leveraging the power of Microsoft Dynamics AX, was deployed to optimise manufacturing business processes with the objectives of eliminating waste in processes and administration, increasing throughput, improving service levels, reducing inventory within their operations and across their supply chain, and establishing a flexible business platform to support continuous improvement.

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Situation Haldex enjoys ample market opportunity, as vehicle production begins to increase worldwide. In addition to this baseline growth, Haldex caters to increasing demand for technology solutions that increase safety, reduce environmental impact, and enhance vehicle dynamics.

Haldex has four major business areas, each operating independently: commercial vehicle brake systems, hydraulic systems, traction systems, and high-precision steel springs used in combustion engines.

Market change and opportunity With production and sales operations in North America, South America, Europe, and Asia, Haldex sees both threat and opportunity as a result of increasing globalisation.

Although Haldex faces increasing competition from low-cost overseas manufacturers, the company also has an opportunity to grow in rapidly expanding economies in South America and Asia.

Increasing productivity and lowering costs were key concerns for Haldex, but so was improving responsiveness to customer demands. “At the same time foreign competition was driving lower costs, domestic competitors challenged us to become more responsive to our customers, and we found ourselves pinched in the middle of these two forces. We needed to respond quickly to customers’ changing needs while improving costs across

the board,” said Donovan Dean, IT Director at Haldex.

Finding “The Haldex Way” Haldex’s strategy for meeting these challenges is encapsulated in “The Haldex Way,” a framework for continuous improvement applied to each of the company’s four divisions. Lean manufacturing principles are a core element of the continuous improvement strategy and they replace traditional scheduling systems with flow-andpull techniques that produce exactly what is needed without waste.

“Coming out of a period of growth-through-acquisition, we had a number of unconnected IT systems that did not support the changes we wanted to implement.

Specifically, we wanted production leveling and tighter integration with customers and suppliers. We also wanted electronic kanban [a lean manufacturing stocking system] throughout the supply chain and support for direct delivery of demand to a production cell,” says Dean.

In all, Haldex needed to replace 11 different enterprise resource planning, order-management, manufacturing, and financial systems around the world. Many of these systems did not connect across business units. This lack of connectivity limited information and material flow between operations, and as a result, Haldex struggled with lengthy lead times, high buffer inventories, and a need to drive greater productivity in its manufacturing operations. To make matters more complicated, these systems used aging technology and were difficult to change. To solve these problems, Haldex needed an integrated business management solution that accommodated its diverse operations and supported lean manufacturing practices.

Haldex gathered an international team representing its four business areas to select a business management solution that would support â&#x20AC;&#x153;The Haldex Way.â&#x20AC;? The solution needed to be flexible enough to support the needs of a large and diverse global company, specifically: Different geographies and currencies Complex product lines Large manufacturing operations Light manufacturing and assembly Distribution centers of various sizes Rapid integration of new acquisitions

functions of Microsoft Dynamics AX extended with the Lean Enterprise Management package. Haldex uses these functions to signal when Haldex factories and suppliers need to provide new production and material resources. â&#x20AC;&#x153;One of our objectives was to increase the efficiency of the supply chain internally,â&#x20AC;? says Dean. â&#x20AC;&#x153;For example, we have several plants in North America that produce brake parts, and we have regional service centers where our customersâ&#x20AC;&#x2122; trucks are actually fitted with these brakes. Now, with our Microsoft Dynamics AX solution, our entire supply chain is linked so that we are manufacturing replacement parts in our plants as brake shoes are being installed. Instead of us manufacturing according to estimated demand, we are manufacturing to meet actual demandâ&#x20AC;&#x201D;there is a pull from the point-of-sale to the manufacturing facility.â&#x20AC;?

3EEING OLD )4 CHALLENGES IN A NEW BUSINESS LIGHT

The selection team decided on Microsoft Dynamics AX, extended with the Lean Enterprise Management modules from MicrosoftÂŽ Gold Certified Partner Avanade. â&#x20AC;&#x153;We put together a series of functional tests and then had the vendors come in and explain how their package would handle those Worldwide Implementation requirements. Microsoft Dynamics Haldex will use Microsoft Dynamics AX proved the best solution for AX to support its finance, customer us because of how it combines service, administrative, distribution, comprehensive capability, and manufacturing operations flexibility, ease-of-use, and low 3EEK OUT THE BUSINESS OPPORTUNITY WITHIN THE CHALLENGE worldwide. â&#x20AC;&#x153;Microsoft Dynamics total cost,â&#x20AC;? says Dean.

"USINESS CHANGE IS INEVITABLE ÂŻ BUT HOW YOU ADAPT TO IT DICTATES AX is robust enough to meet the Haldex worked with experts HOW COMPETITIVE YOUR MANUFACTURING OPERATION CAN BE needs of our larger operations, from Microsoft4HAT´S WHY THE MOST PROGRESSIVE #)/S PARTNER !VANADE and Avanade but it also works well for our to identify five DELIVERING NEW LEVELS OF INNOVATION AND AGILITY TO HELP THEM key targets of smaller distribution and production the Microsoft REDUCE COSTS AND DELIVER GLOBAL SUPPLY CHAIN ADVANTAGE Dynamics AX 7ITH OUR JOINT !CCENTURE AND -ICROSOFT HERITAGE !VANADE facilities,â&#x20AC;? says Dean. implementation: IS UNIQUELY PLACED TO HELP YOU KEEP YOUR EYES ON THE HORIZON

Eliminate waste in processes and AND YOUR FEET ON THE GROUND 5SING THE -ICROSOFT PLATFORM Benefits administration AS A SPRINGBOARD FOR DELIVERING BUSINESS RESULTS WE´LL HELP Microsoft Dynamics AX plays a Increase throughput in the supply YOU ADOPT A PRAGMATIC APPROACH THAT MAKES CHANGE LESS critical supporting role in Haldexâ&#x20AC;&#x2122;s chain and production DAUNTING COMBINED WITH A VISIONARY ATTITUDE THAT PUTS REAL TRIUMPH WITHIN REACH Improve service levels, including strategic transformation initiative, quality and delivery â&#x20AC;&#x153;The Haldex Way.â&#x20AC;? First, Microsoft &OR MORE INFORMATION VISIT WWW AVANADE COM Reduce inventory across the Dynamics AX, with the Lean supply chain Enterprise Management extensions Establish a flexible platform to from Avanade, allows Haldex support continuous improvement to adopt lean manufacturing "E )4 PROGRESSIVE practices that dramatically improve Support for lean responsiveness, reduce waste, Manufacturing and improve productivity. Second, The complete solution enables because Microsoft Dynamics AX Haldex to move from a traditional is flexible and easy to configure, manufacturing resource planning it allows Haldex to make ongoing production scheme to one where process improvements and adapt demand triggers new production. to specific division needs.

Specifically, Haldex takes advantage Faster response to of the lean ordering, kanban customer demand management, event management, Microsoft Dynamics AX provides and collaborative commerce

$ISRUPTION OR DELIVERANCE

real-time, integrated information flow throughout Haldexâ&#x20AC;&#x2122;s extended supply chain. Haldex uses the Lean Enterprise Management modules to harness this information and respond quickly to customer demand.

For example, when ready-togo stock levels at any stage of production fall too low, the system produces an electronic signal that triggers production or purchase of replacement parts and materials.

These electronic kanban levels and signals appear on visual tools Haldex production managers use.

Real-time pull mechanisms extend to Haldex suppliers as well, so that the entire supply chain is faster and more tightly integrated.

Since implementing the Microsoft Dynamics AX solution, Haldex has cut its lead times in half.

Avanade

Solution

Reduced waste for lower costs Supply chain automation is a standard tactic for reducing waste and improving efficiency, but Haldex goes a step further with its move to lean manufacturing.

Microsoft Dynamics AX with the Lean Enterprise Management package supports lean manufacturing principles so that Haldex can identify and eliminate waste in its operations. â&#x20AC;&#x153;Eliminating waste is a core aspect of The Haldex Way strategy.

Microsoft Dynamics AX helps us implement lean principlesâ&#x20AC;&#x201D;weâ&#x20AC;&#x2122;ve been able to reduce our inventory by one-third while improving our manufacturing productivity 30 percent,â&#x20AC;? said Dean.

About Avanade Avanade provides business technology services that connect insight, innovation and expertise in Microsoft technologies to help customers realise results. Avanade partners with its customers to create solutions using an open, collaborative approach enabling organisations in all industries to improve performance, productivity and sales. For more information please contact Geraldine Lafosse at Avanade (020 7025 1098).

For further information visit www.avanade.com &ROM !CCENTURE AND -ICROSOFT

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R E C R U I T I N G f o r S uccess EEFâ&#x20AC;&#x2122;s fourth quarter survey confirms that the worst of the downturn is over, and manufacturers are recruiting for recovery and opportunity. But as Colin Chinery reports, the sector image is not asset rich.

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R

ecession, re-structuring, redundancies; the three Rs rocking, rolling and reverberating through UK industry in a grueling 2009.

But there is a scent of recovery in the chill

New Year air, as smart manufacturers have moved up to the starting blocks and are already recruiting staff. Engineering and technology businesses are expanding, reports a skills survey of 400 companies by the Institution of Engineering and Technology (IET).

And nearly two in three are citing growth as a spur for recruitment. But the spur is hitting tough hide.

According to another review — this from the CBI

— two thirds are having difficulty in recruiting STEM skilled staff (Science, Technology, Engineering and Maths), with problems at graduate and postgraduate level hampering a third. Another high profile report

and venerate ‘celebs.’ As such, “There is still a major

warns that Government hopes of the manufacturing

need to change the image and profile of engineering,

sector hoisting Britain out of recession will be thwarted

and to improve education and in-school activities,”

unless almost 600,000 engineers, all with advanced

warns Robin McGill, chief executive of the Institution

skills to rival those in other developed economies, are

of Engineering and Technology. Similarly, “The

recruited and trained over the next seven years.

fact is that manufacturing struggles to get people

Numbers and image

interested,” says Phillip Hodson, director at awardwinning Kensington Consulting of Chorley, Lancs, a

This annual health check on the industrial labour

leading executive recruitment company specialising in

market from the Engineering and Technology Board

manufacturing and engineering.

pinpoints two parallel developments with major implications for UK manufacturing” The 30% decline in the number of lecturers

Hodson, with a manufacturing background including Caterpillar and Perkins Engines, says that while modern manufacturing areas such as Lean

teaching engineering, manufacturing and

and Six Sigma have had a significant exposure,

technology, and;

these have not been communicated sufficiently to

The 17% drop in the number of higher education

universities, colleges and sixth forms. “We have to get

students going into production and manufacturing

talented young people interested, but there is still this

degrees this year.

inability to sell the exciting and stimulating aspects of manufacturing to academia.”

Villain-in-Chief? That hoary intractable spectre stalking modern British manufacturing — negative, out-dated

to manufacturing’s need to get engaged with

perceptions of its real character, achievements and

young people. Regrettably too many of them see

career opportunities. As Business minister Ian Lucas

manufacturing as mass production, mundane and so

observed at the Manufacturing Technology Centre in

on, and we all know this is simply not the case.”

Coventry, many graduates and school leavers do not view the manufacturing sector as an exciting place

Recruiting/retirement shortfall

to work; “To say it comes low on their list of career

Hodson notes that retirement will mean the exit over

choices would be putting it lightly,” he said.

the next ten years of large numbers of highly qualified

Here, for example, are the responses from 1300 14

and experienced. “This will leave a big gap in the

to 19 year olds interviewed for the ‘Engineering Our

manufacturing sector. There are simply not enough

Future’ report: Engineering is viewed as a “dirty and menial”

young engineers and young professionals coming in

subject to study at university.

Engineering as a subject is suited to less academic students.

Parents and teachers view engineers as “blue

66

“So we have this void, and it comes back

to match the rate of the departing retirees.”

There are no such worries for e2v of Chelmsford and Lincoln, a leader in the design and supply of specialised components and sub-systems for the global medical, science, aerospace, defence and

collar men in overalls who fix things”.

commercial and industrial markets. “This is not an

In modern Britain it seems, we disparage engineers

issue now or in waiting,” says Andy Bennett, group

r E C R U I T I N G f o r S uccess

marketing and communications manager. “Since the

product, driving cost, satisfying customer needs.

skilled are retiring all the time, we have to deal with it

But most times they don’t bring these attributes and

as an ongoing process — which is why we continue

achievements out in an interview.”

to invest in apprenticeships as well as working closely with universities.”

Manufacturing has taken its share of blows, notes

“They can struggle to communicate their major assets and fail to make the link between what they do on a day to day basis to the operational objectives of

Bennett, whether fighting the attractiveness of a career

the business. So we give a lot of guidance and advice to

in the City — which itself has lost much of its shine —

engineers on how they can best sell their attributes and

or facing the effects of the global recession. Even so, it

skills to the fore at an interview.”

is imperative to recruit for specific skills and attract the

But a manufacturing organisation needs finance

best candidates. “Manufacturing must also look to the

HR and business experts as well as engineers, and

medium to long term, post recession, and continue to

e2v does not expect to recruit engineers with the full

look to promote the high tech career aspects as well as

technical skill sets for its business, says Brian McAllister,

the business, HR and finance disciplines,” he says.

e2v’s general manager of imaging.

“At e2v, for example, we have our work on projects like the Hubble space telescope to inspire new

Colleges and higher education

engineers, and there are many other exciting projects

“It just doesn’t happen like that most of the time,” he

out there across the manufacturing community.”

says. “We find a much greater success from involving

People approach work in this age in a very different

ourselves with schools and universities, getting to

way from the past, says Phillip Hodson. “It’s become

know potential new employees and helping them to

more assignment based; they want to experience this

understand what we can offer as a career as they start

project, move on to that project rather than saying ‘I

out in the employment world.”

want to achieve this position in this company’.”

“Our strategy is to attract the world’s best people, whatever stage they are in their career. In my area

The recruitment process as a whole should be clear to both those recruiting and being recruited so as to ensure both parties are fully aware of the requirements of the job, how they will be measured against those requirements and who will be reaching a decision on those points Andrew McConnell, Brodies LLP

of the business we target physics graduates and have created a talent pool. These graduates then flow into other areas and functions within the company. It is rocket science, and we do employ rocket scientists. For example, we have launched the e2v centre for electronic imaging in collaboration with the Open University,

The art of selling yourself Kensington Consulting were 2009 finalists for five

where we work closely with a dedicated research team.”

“We are also collaborating with STEM Team Essex,

national recruiter awards and winners of two — ‘Best

involving some 20 ambassadors working with schools.

Understanding of Candidates Needs’ getting a top

In fact, there is a whole series of schools projects

placing. Tellingly, says Hodson, “I interview design

including support for technology competitions and

engineers and managers on a day by day basis, and

organisations such as Young enterprise, as well as visits

in general design people struggle to sell their skills.

to local schools to attract young people.”

It isn’t the same with supply chain people, who have caught on to the fact that they need to sell their skills, especially from a commercial or purchasing function.”

“But when I interview senior candidates in

What this is achieving?

Two distinct benefits, says McAllister. “Firstly, we have a research centre directly within the academic

engineering and ask what they’ve achieved over the

community, and secondly it gives us a pool of

past 12 months, their answers are not usually well

potential employees with relevant skills. By the time

prepared. Talk them through, however, and it becomes

they complete research programmes they know us and

clear that they are improving quality, innovating

we know them, so if we both decide that the match is

67

r E C R U I T I N G f o r S uccess

right then we are set for a great future.”

Systematic planning is essential for recruiting

The retention issue Recruiting is one challenge; retention is another, and

success. From identifying the skill requirements to

there are reports of increasing numbers of companies

assessing personality fit — it requires understanding

hiring entire teams of employees from competitors.

and awareness of organisation, objectives and the

In boom periods, the strategy might have been the

world outside the business. Recruitment falls into two

acquisition of the competing business. But with credit

categories; impulse and planned. Impulse recruiting

tight, the predator employer may attempt to poach a

is reactive; posting on a job board, for example,

profitable team and secure a book of business without

generates a large number of candidates in a short time

the associated costs of acquisition.

and is often a quick fix solution.

But while this can work, it is not the most effective

To counter this, employment lawyers are being asked how best to minimise the risk. Yet many

or efficient approach. Time and resource are needed to

companies continue to rely on standard employment

sift through the applicants and the chances of missing

contracts, paying negligible attention to how an

the ‘golden nuggets’ are high.

employee will fit in to the organisation. “As well as attracting the world best people, we need to retain them,” says

Since the skilled are retiring all the time, we have to deal with it as an ongoing process — which is why we continue to invest in apprenticeships as well as working closely with universities

e2v’s Brian McAllister.

Andy Bennett, e2v

30 years. Ask them why,

“This is done by keeping people engaged with challenging work. We have many people who have worked in the business for more than and the answer is always

‘Our greatest asset’?

It’s a commonplace for a company to say that its

A parallel development is a new focus on ‘in-

people are its greatest asset, but there’s not enough

placement’, as organisations going through major

due diligence on this point, notes Hodson. But it can

restructure put just as much effort into re-recruiting

seem to be the biggest cliché since ‘the cheque is in

key people as they do into helping those leaving the

the post.’

organisation find new employment.

“We find within the manufacturing sector that a lot of companies do not look upon recruitment from

Set your objectives

a capital expenditure perspective,” he says. “In 2009,

The issue for companies and employees is that they can

there has been a heavy cost focus which I appreciate.

start off on the wrong foot, says Phillip Hodson. “Setting

But recruitment is not just about cost, it’s also about

clear and shared objectives with both parties buying

value. Manufacturers do not always detail their needs

in and relating them to the strategic objectives of the

and go into the market place aware of their specific

company is critical. And there should be regular but not

needs; what will be the inputs, the challenges, how

too frequent appraisals, along with SMART objectives

will the role interact with different departments?”

setting, succession planning and salary surveys. All of

“Let’s say the role is £40,000 a year. Over a five year time frame your investment at a bare minimum

which can reduce the risk of people leaving.”

“You can’t have a company full of Napoleons,

is £200,000. If you were investing in a piece of

but you need to have a succession plan right

machinery costing the same amount over the same

throughout the organisation to ensure there are

lifetime, you would ensure you were specifying

promotion opportunities for those consistently

its needs and working with the right supplier and

achieving their objectives.”

challenging them on their ability to provide that

68

the same. ‘There’s always interesting work to do’.”

An effective philosophy for recruitment is to

product. Unfortunately, when it comes to recruiting

try and make the process as standardised and as

there are manufacturers who view it as a simple

transparent as possible, says Andrew McConnell,

process and go out to get the cheapest. And they get

senior solicitor in the Employment team at corporate

what they pay for.”

and commercial law practice, Brodies LLP. And this is

materials han d ling f o r S uccess

69

Employing a little care Kensington Consulting is a Lancashire-based engineering and manufacturing recruitment services firm that was begun by Phillip Hodson in 2006. He tells Mark Young about the driving force behind the firm, and shares some insights on manufacturing recruitment in the midst of a transforming economy

E

arly in his career, Phillip Hodson carved an impressive path through some of the big names of UK engineering. But with every step — as he etched the names of Perkins, Caterpillar and Alexander Dennis onto his CV — one thing left him unsatisfied with his move. “When I went for interviews as a candidate I was always left feeling like it had only been about a single transaction,” he says. “There wasn’t much investment of time from recruiters in people relationships. There was a lot of investment in the client but not enough on me as an individual.”

It was this discontent which inspired the ethos for Hodson’s own company. “After a couple of promotions I got to the stage where I needed to use recruitment companies to hire people myself,” he says.

“My first thoughts were to stay away from those that I’d had a poor relationship with as a candidate. So that’s basically our attitude at Kensington — today’s candidate is tomorrow’s client.”

Kensington does not see one client when a company asks it to fill a position; it sees many. There’s the company, the successful applicant, and all of the other applicants too. And no one takes priority. This is in contrast to most of Kensington’s competitors, who tend to follow the ideology that so aggrieved Hodson in his engineering days. What’s more, the situation has only got worse since the recession began. “Recruiters panicked when the work dried up a bit and seemed to say ‘right, let’s just concentrate on the client and get the money in’,” said Hodson. “But we made a bold move and decided to keep our focus on the relationships throughout the service, comprising the candidate, the client and us.”

Mismanagement of applicants is not a folly committed only by rival recruitment firms though.

Most manufacturers have, unfortunately, not been able to take on many more staff over the last year-and-a-half. However, of those that have, some have had to take on the task themselves, due to cost-cutting, rather than outsourcing the job to a firm like Phil’s. And some have found this a slightly trickier affair than they first may have thought. “They didn’t anticipate how many applications they would receive, and didn’t have the skills in-house to handle the relationship with the candidate properly. They didn’t give feedback for instance. That’s been a real issue with the recruitment industry in recent times,

70

candidates become despondent and frustrated at not being kept in the loop.”

From the individuals’ perspective — entry professional to boardroom level — Kensington’s services involve a post candidate care process to ensure that the new role is meeting expectations. There is a triggered system on the job seekers database for a Kensington consultant to call all of the individuals they have found jobs for at regular intervals. They can then act as

I wish I had a pound for all the people who have 5S on their CV and don’t fundamentally understand it. They may have been involved with it and may even be able to articulate upon it to a certain degree but that’s not enough, employers are looking for a real understanding mediator between the company and the employee if any issues need ironing out. Other services they offer job hunters include CV and interview preparation and psychometric testing. From the employing companies’ perspective — SME to blue-chip — Kensington provides salary surveys, job specification creation, redeployment services and some legal advice. In sourcing appropriate applicants it uses its database of job seekers, holds open days at assessment centres, advertises where it sees fit, and actively head-hunts suitable candidates.

If the first bedrock upon which Hodson has built his business is maintaining relationships, the second is keeping real links to industry. All of the employees Hodson has taken on have previously been engineering professionals, some of them with 25 year stints in the industry. This adds names like GEC Alstom, CAT, Perkins, Michael Page, Pricewaterhouse Coopers, NIS and Faber Design to the firm’s collective credentials, along with many special purpose manufacturers

covering most of the mechanical engineering and process industries.

Kensington also has an engineering alliance with North West Projects Limited an expanding engineering design consultancy specialising in a variety of mechanical handling projects largely for the Nuclear Industry.

And the efforts have not gone unnoticed.

Kensington recently won two national awards at an annual event run by Job Site. The Most Improved Recruiter and Best Understanding of Candidate Needs for 2009 awards have seen the business gain increased interest from both the candidate and client communities. There were five awards in total; Kensington was nominated in all five.

The competition heats up

Of the firms that haven’t trimmed their payroll in the last couple of years, only a minority have added to it.

That naturally means there has been a large increase in the number of applicants per job; Hodson estimates four times more on November 2008 levels. He says recruitment-wise, the industries worst hit for jobs since the downturn began have been automotive and aerospace, along with some general manufacturing.

However, there has been an increase in job availability in green industries like waste management and recycling, as well as the design and manufacture of things like alternative energy equipment and energy efficient heavy machinery. Advanced manufacturing of new technology and composites have remained strong too.

Hodson’s advice to so-called traditional engineers is to jump aboard the green wagon. “There are definitely transferable skills from other areas of manufacturing into the green industries. We can help candidates recognise that they already have the necessary skills and then we can help market those skills. These are industries that are going to be around for a long time so people need to take advantage early.”

In terms of the skills recruiters are now looking for, Hodson says leadership and people skills and continuous improvement (CI) understanding are becoming increasingly important. “They want a real understanding though, not just buzzwords. I wish I had a pound for all the people who have 5S on their CV and don’t fundamentally understand it. They may have been involved with it and may even be able to articulate upon it to a certain degree but that’s not enough, employers are looking for a real understanding.”

A thorough understanding of CI is important for another trait that recruiters now want; good business acumen right through the ranks. “Clients want candidates now that see the clear path to the customer,” says Hodson. “Engineers struggle to represent themselves and show how what they do affects the bottom line. Reducing costs while

improving quality at the engineering stage is where the two marry up. After a thorough interview it is, however, apparent they do possess the skills and experience but find it awkward marketing these to potential employers. Selling their skills does not come naturally to them and so we have to work hard to ensure they see the fruits of their labour and can sell these benefits.”

Overall, the types of skills that employers want and the sub-sectors with job vacancies might be changing but the ethos that Kensington employs when finding the right person for the role stays the same. The company’s success is inherently linked to the success of its clients; employer and employee. You can be sure you’re in good hands — Kensington Consulting’s best interests are your best interests.

Kensington Consulting is an engineering and manufacturing recruitment services firm based in Lancashire, serving Northern England from Staffordshire up to Cumbria, and North Wales to Yorkshire.

Sub sector specialities:

Automotive Aerospace General Manufacturing Defence Power – (Renewables, Nuclear, Water, Oil/Gas, Petrochemical) Process Industries FMCG

Engineering Disciplines, from professional level to senior management

Research / Design / Development EC&I Process / Lean / 6Sigma Manufacturing EHS Quality / Validation Maintenance Planning / Project Management Sales / Application / Proposal

Manufacturing / Supply Chain Disciplines Production Operations Shift Management Purchasing Supply Chain

71

r E C R U I T I N G f o r S uccess

particularly important for manufacturing where the

able to recruit the best, the general manufacturing

battle for talent can be intense.

community has not done well in that market place.

“The recruitment process as a whole — including job specifications, scoring matrices, make up of the

the accountancy profession, great for the overall

interview panel, and so on — should be clear to both

economy perhaps but leakage for the

those recruiting and being recruited so as to ensure

manufacturing sector.”

both parties are fully aware of the requirements of

Andy Bennett agrees. “There’s a need for

the job, how they will be measured against those

industry and academia to reach out for each other

requirements and who will be reaching a decision on

rather than wait for the knock on the door. It’s easy

those points. This clarity will help avoid losing skilled

to lose focus on this in the middle of a recession,

employees shortly after they have joined because the

but it has to remain high on the agenda,” he says.

scope or content of the role has been pitched at too

“We have a range of activities with schools, colleges

high or low a level, for example. “

and universities and there’s an obvious benefit in

Legal challenges

identifying candidates for future employment. But it also adds to job satisfaction for our people, being

With fewer jobs around, there is anecdotal evidence

able to go into schools and tell pupils about their

of recruitment decisions being challenged, with the

work and opportunities for apprenticeships etc.”

serving of discrimination questionnaires by candidates on the increase, says McConnell. “A process which is

Make sure there is enough due diligence when specifying the role and where it sits in the

well defined and transparent is more likely to satisfy

organisation, says Phillip Hodson. “One question

an unsuccessful claimant that the process was fair

we always ask is ‘how are you going to measure the

and therefore less likely to lead to challenge. Even

success of this role? What are you looking to achieve?’

an unsuccessful challenge can soak up hours of

This is a key question and many times there is a big

management time and legal costs.”

pause, a hesitation, and not many answers.”

“High achieving organisations know that employee retention and talent management are essential to

Manufacturing Insight

sustaining growth in an ever more challenging

The head of manufacturing, transport and logistics at

marketplace. Open communication made timely and

Barclays Commercial Bank, Graeme Allinson, believes

with content which is transparent is an important tool

that the recently-formed Manufacturing Insight has

in encouraging retention and maintaining engagement.

a major role in improving public — and in particular

If an employee knows why a decision has been made —

young peoples — perception of manufacturing.

whether it’s to do with promotion, change in terms and

Part-funded by the Department for Business,

conditions of employment or otherwise — he is often

Innovation and Skills and EEF, a particular focus

more likely to understand it. And timely communication

will be a campaign in schools designed to generate

avoids employees ‘filling the void’ with incorrect

enthusiasm for students to pursue careers in

assumptions about what, when and why.”

manufacturing. “It is essential that we change the

McConnell says it’s important too for management

image of manufacturing and raise awareness of the

to understand that ‘survivors’ of a redundancy

exciting careers that are available,” says MI’s director,

exercise can feel vulnerable and stressed, and

Nick Hussey, non-executive director of SayOne Media

therefore effective and meaningful communication

— publisher of The Manufacturer.

continues to be critical following a restructure. “If the

Certain companies are doing a lot, but it takes

organisation behaves in a way which demonstrates

an awful long time to change people’s perceptions

awareness of these priorities then that can be a key factor

and what’s been in their minds for the last 30 years,

in encouraging engagement and loyalty during these

says Graeme Allinson. “We have to recognise that

difficult times.”

it’s going to be a long time before we can see a real

Back to school

72

The largest recruiter of engineering graduates is

change in people’s views. British manufacturing has moved on massively since the 1980s. What we have

“We’ve continually failed to compete adequately

to keep doing is to extend into some of the smaller

in the graduate recruitment and skilled workers

companies all the good work that’s done by the

job pool,” says Nick Brayshaw, recently retired

larger companies, and support Manufacturing Insight

chairman of the CBI national manufacturing council.

initiatives that are coming out, promoting the reality

“Excluding some of our exemplar manufacturers

of British manufacturing — as a great career and a

such as BAE Systems and Rolls-Royce who would be

great place to work.” end

Manufacturinginaction Sponsored by TBM Consulting Group

Putting UK manufacturers under the spotlight Michelin

Factory of the month Driving remanufacture

Tim Brown talks to head of UK communications, Peter Snelling, and factory manager, Peter Marsh, about the Michelin bus and truck tyre factory in Stoke-on-Trent.

Aircelle

High-tech hidden in the hills

74 85

TM visits Aircelle Burnley, an aerospace company that has undergone a major growth and management restructure

Sealine International

Moving targets

91

TM meets a luxury boatmaker incorporating traditional manufacture with the best of the automotive industryâ&#x20AC;&#x2122;s production processes

Quinn Group

Quinnovation

The Quinn Groupâ&#x20AC;&#x2122;s meteoric rise can be attributed to innovation across its worldwide conglomerate. TM reports.

Amphenol

The military-industrial complex

TM investigates a manufacturer putting both processes and people at the heart of its success

Armitage Pet Care Dogged by success

TM talks to Paul Bousfleld who says that when it comes to pet care, Armitage aims to please

Alumet Systems

Having a blast

94 97 101 106

Alumet Systems have recently introduced a walling product designed to withstand the effects of improvised explosive devices

Comau

Advanced manufacturing

Comau Estil talks to TM about being a market leader in the field of advanced engineering

Oclaro

Laser precision

111 113

For Oclaro, formed by the unification of Avenex and Bookham, the merging process has been one of growth, innovation and improved product performance

All companies featured will be entered into the MIA Award 2010

73

Driving remanufacture From humble beginnings working on a pneumatic bicycle tyre, Michelin has grown to become the largest tyre manufacturer in the world. Tim Brown talks to head of UK communications, Peter Snelling, and factory manager, Peter Marsh, about the Michelin bus and truck tyre factory in Stoke on Trent.

74

Factory of the month Michelin

Primarily

servicing the UK domestic market, the Michelin facility in Stoke-on-Trent has garnered its success largely through innovation. This has culminated in a combination of industry leading marketing and sales strategies, the empowerment of employees and an intrinsically environmentally friendly remanufacturing process.

The Stoke factory produces remanufactured truck and bus tyres, which offer the same characteristics and longevity as a new tyre. The process essentially involves taking the original inner structure of a tyre, known as a casing or carcass, and rebuilding the exterior of the tyre. Using this process, the factory produces two different products, Remix and Encore, the difference between the two being the number of times the tyre has been resurrected.

“A new Michelin truck tyre has two lives,” says Marsh.

“The first life uses the existing tread to a pre-defined depth. The tyre is then re-grooved which gives a new life to the original tyre. When the re-grooved sculpture has completed its service, the Michelin carcass can then be rebuilt as a Michelin Remix branded tyre. This adds a further two lives to the original tyre and includes a second re-grooving. The Michelin Remix tyre can then be rebuilt for a second time as a brand called Encore which can give a further life using the new moulded sculpture followed, where possible by a third re-grooving. This gives us the potential for a fifth and sixth life.”

Michelin has operated a plant at Stoke-on-Trent since 1927. However, the Remix manufacturing plant only began production in the early 1970’s, while the Encore workshop was not introduced into operation until 2000. The current

When we remanufacture a Michelin carcass, it is capable of six lives annual production of Remix tyres is 280,000 per annum, while the factory produces approximately 70,000 Encore brand tyres per year. Due to the reuse of the casing component of the tyre, the benefit to the consumer from a remanufactured tyre is a reduction in cost of approximately one third.

Sourcing and innovative sales

Remix curing line

The Stoke factory employs a number of sub-contractors that source tyres from various distributors across the country. This includes Michelin’s sister company, tyre distributor ATS Euromaster.

The casings, from which the tyres are rebuilt, are sourced primarily from used original equipment tyres; in other words, new tyres that have been used once on a truck or a bus. Under the Encore brand, the factory not only remanufactures Michelin’s own tyres, but also those of their competitors. “When we use competitors’ tyre casings we only rebuild them once giving a third and a fourth life,” says Marsh. “However, when we remanufacture a Michelin carcass it is capable of six lives.”

75

Partnering for a better environment

C

harles Lawrence International Ltd is unique in its tyre recycling business in that we have total involvement in the process and its products.

CLI design and manufacture tyre recycling machinery for world markets and also use their machinery to operate a 20,000 tonne per annum tyre recycling plant in Newark. The granulate produced by this plant is used as a component in the installation of playgrounds, synthetic pitches and athletic tracks.

CLI also design and build machinery for the installation and maintenance of synthetic pitches and tracks. The products and machinery manufactured and distributed by CLI are used throughout the world.

As well as supplying all of the materials for our sister company, Playtop Licencing Ltd, whose licensees operate in over 40 countries worldwide, CLI supply all of the major playground installers in the UK. CLI are part of the Charles Lawrence Group of Companies who have been

76

involved in the building of sports pitches, tracks and playgrounds for over 40 years and have been recycling tyres for the past 20 years.

This vertical integration of the Charles Lawrence businesses provides CLI with a level of experience and product intelligence which is unique throughout the world. It is because of this level of knowledge and expertise that major global companies, such as Michelin, choose CLI to be their partners in the disposal of their waste truck tyres.

What better way can there be for an environmentally responsible company to dispose of their post consumer waste than by ensuring that all the product components are recycled. The typical truck tyre components are approximately 65% rubber, 32% steel and 3% textile.

The ambient temperature recycling process operated by CLI ensures that. all these three components are reused.

The steel is sent to steel reprocessing facilities, the textile fibre is used in

equestrian surfaces and the rubber is re-used to produce playgrounds and sports safety surfaces.

Michelin and CLI can therefore honestly say that they are â&#x20AC;&#x153;partnering for a better environmentâ&#x20AC;? in turning waste tyres into facilities for sport and leisure.

Published in association with: Charles Lawrence International Ltd Tel: +44 (0) 1636 642460 Fax: +44 (0) 1636 613259 Email: international@clgplc.co.uk Web: www.clgplc.co.uk www.pitchmachinery.com

Factory of the month Michelin

While the company has developed a solid supply chain, it has also incorporated an innovative sales mechanism to ensure continued demand. Using a business model that is becoming increasingly more common amongst remanufacturers, Michelin has undertaken a leasing arrangement with certain customers. Of particular note is the company’s agreement to lease tyres to a number of bus companies, including the red iconic London buses.

Under the scheme, Michelin maintains ownership of the tyres and employs teams to work at bus garages to ensure the buses are maintained with tyres in prime condition. When a tyre has come to the end of its useful life, it is automatically sent to Stoke-on-Trent to be remanufactured.

Introduced uniformly across Michelin’s 68 worldwide manufacturing facilities, the system is based on adopting standardised benchmarked processes.

According to Snelling, the MMW principles ensure plants employ common organisational structures, workshop practices and management processes. “Where results perhaps are effective in one location, then other sites can make sure they are applying the same criteria, the same standards and same procedures to achieve the same results,” says Snelling. To avoid any discrepancies or misinterpretations, Michelin has a central department which ensures that the MMW is applied consistently throughout the group.

Under the umbrella of the MMW is the company’s lean manufacturing system, Managing Daily Performance (MDP). The core of the MDP involves the monitoring of what have been determined as the five primary performance indicators. These are: safety, machine performance, quality, output and cost.

Rolling out improvement

Marsh says the Stoke-on-Trent plant has undergone extensive improvement since the introduction of MMW, particularly over the last 18 months. “The culture has changed quite considerably in the workshops in terms of people owning the process and contributions to the

Approximately six years ago, the Michelin group launched a continuous improvement scheme entitled the ‘Michelin Manufacturing Way’ (MMW).

The Results

Martin Alcock, Remix operator on the rubbering post

77

JBT Distribution is the leading logistics provider operating throughout Scotland.

W

e have depots in Inverness, Aberdeen, Bathgate, Orkney and Shetland. JBT is part of the Inchmuir group along with MRS Distribution and as a member of Palletforce we can offer a comprehensive service throughout Scotland, the UK and into Europe. JBT and MRS have a combined fleet of 350 vehicles, 600 trailers and over 15 locations in the UK. JBT began with an emphasis on chilled and ambient foods to and from the North of Scotland and Islands and in addition we now operate a mixed fleet of vehicles from 7.5 tonne home delivery teams up to 44 tonne artics on full load movements, and everything in between. We also service

78

many high street retailers and we operate a comprehensive automotive division. Our locally based transport teams allow us to plan and route our fleet of vehicles while also enabling our customers to speak with a local member of staff who understands our customers business.

We have continually developed our processes in order to best manage the functions within our business and to offer our customers an added value service. These include a modern transport planning system for all our planning and scheduling, POD scanning system which enables us to archive records for customers and provide electronic copies on request. Electronic reporting for

temperature monitoring, digital download of driver cards and vehicle records ensure compliance with all transport legislation.

Contact: Robert Gordon and Michael Beveridge - Directors

Published in association with: JBT DISTRIBUTION Ltd Tel: 01667 462999 Email: robert@jbt.co.uk or michael@jbt.co.uk Web: www.jbt.co.uk

Factory of the month Michelin

Dave Rhodes and Mark Phillips, Remix operator in the aftercure department

business. We have seen tremendous changes in the ways that we work.

The involvement of people, their participation and engagement and the focus on the business indicators is now very strong. Each individual operator at Stoke-on-Trent is aware of the various business indicators and of how their own team has performed, how their workshop has performed and how the business is performing.”

Not only has there been a culture shift at the Stoke-on-Trent plant, thanks largely to the implementation of MMW, but other areas of improvement have included the environment, ergonomics of posts and safety. “We have, for example, seen some spectacular gains in our waste material reduction,” says Marsh.

“In 2009, we made a waste deficiency improvement of approximately 21% in scrap material and in terms of productivity we have improved about 8%.”

The Stoke-on-Trent plant recycles 100% of process waste.

Material such as rubber crumb is reprocessed into items such as carpet backing, playground surfaces and other general rubber goods. The materials from any scrap tyres that are not able to be remanufactured are also recycled.

Furthering their commitment to the environment, the Stoke-

We have seen tremendous changes in the ways that we work. The involvement of people, their participation and engagement and the focus on the business indicators is now very strong on-Trent plant is also aiming to divert all non=process waste away from landfill through recycling, re-use or energy recovery. Recognised for its environmental commitment, all Michelin’s UK sites are certified to the UK standard ISO14001recycle.

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Factory of the month Michelin

In addition, safety is another area of improvement for the Stoke-on-Trent plant and one of which they are very proud. “On the 28th of November, 2009, we had our third anniversary of zero lost time accidents,” says Marsh. “This is an excellent record in comparison with other equivalent industries in the UK and greater Europe.

Our priority is our people and the safe working practices of our people. We have a notice board as you enter the plant detailing accident frequency in each workshop, and at the moment it is particularly empty which is just the way we want it”

Putting something back As part of the company’s corporate social responsibility approach, Michelin UK has also undertaken a functional community assistance programme through its subsidiary, Michelin Development Limited. The scheme assists local small and medium sized businesses to expand and develop by offering low interest loans and expert advice. “We take company time to help small businesses develop and create wealth and jobs for the future,” says Marsh, who helped pioneer the programme.

“It really is about putting something back in to the community that has supported us for the last 80 years, and

helping to create jobs and be a part of that community. It is part of what we call our performance and responsibility Michelin approach.” Essentially, Marsh says that the success of the company is not only reflected by its balance sheet, but also by its level of commitment to social responsibility and sustainability.

Michelin Development Limited offer unsecured loans at base rate (currently 0.5%) to small and medium sized businesses (with up to 250 employees) which can demonstrate a viable business plan. “We are unique as far as I’m aware in this offering. It is completely altruistic.

The main principle is to serve the areas from which our employees are drawn. This helps the families and neighbours of our employees. We want to make sure that the areas in which we operate remain vibrant and

Kevan Astley, Encore operator on the pre-mould

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Factory of the month Michelin

Encore department - external signage shot

Michelin, Stoke-on-Trent at a glance Location

Campbell Road, Stoke on Trent, Staffordshire

Sector

Bus and truck tyres

History

The Michelin Stoke-on-Trent site has been in operation since 1927. The current operation focuses on the remanufacture of bus and truck tyres.

Market Share

The global Michelin company is considered the largest tyre manufacturer in the world with approximately 17% share of the tyre market.

economically successful. We would rather operate in areas that are doing well than areas that are not.” For more information visit: www.michelindevelopment.co.uk

The road ahead The current priority for the Stoke-onTrent facility is to continue to meet the existing UK demand for bus and truck tyres. Marsh says the company’s plans are also flexible enough to incorporate any new products that the market may require.

In addition, the company is aiming to improve productivity by 30% by the end of 2010 compared with 2005.

Satisfied with their progress towards this goal, Marsh says the achievements so far have been largely thanks to the dedication of their workforce, particularly during the recent economic turmoil. “We

retained all our skilled labour, but also introduced measures to reduce our costs. The tremendous cooperation from our workforce and their union representatives needs to be commended. If we had not been able to work together we would not have been able to achieve what we have done.

All our employees showed a tremendous level of maturity and understanding during the recession.”

Such employee loyalty is clearly reciprocated at the Stoke-on-Trent plant, with Marsh terming “commitment to their workforce” as the company’s current biggest investment. Indeed, he believes that the further strengthening of relationships between the company and its operators will provide the biggest returns. “I think there is still a tremendous untapped resource within our workforce in terms of their participation and involvement and in terms of getting their ideas and answers to problems. Today I am concentrating on furthering the culture change in our operators and their engagement in the business.” Such sentiments are indeed likely to ensure continued success at the Stoke-on-Trent plant; a prime example of why Michelin is widely considered the most successful tyre manufacturer on the planet. end

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Junair Spraybooths Ltd Junair Spraybooths manufacture and install energy efficient, high quality spraybooths & ovens for the Automotive, Aerospace and Industrial paint finishing markets.

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he innovative technology products Junair have incorporated into their spraybooth oven range, some with international patents, has seen Junair become a market leader for high quality, high productivity, energy efficient paint finishing facilities.

The latest Junair installation at Aircelle is testament to this. At Aircelle Junair have provided preparation booths, paint kitchens, high bake ovens and paint spraying booths, all to Aircelleâ&#x20AC;&#x2122;s exacting specifications.

With a wealth of experience in providing equipment to the Aerospace Industrial and Automotive sectors and with the emphasis on listening to and understanding our customersâ&#x20AC;&#x2122; needs,

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Junair are able to manufacture bespoke solutions for all spraying environments, ranging from small to large, simple to complicated, but always of the highest quality.

Junair hold a number of patents, most notably for QADs, an auxiliary air movement system which can be retro fitted to existing spray booths and ovens.

QADs are now sold world wide and are consistently proven to be the fastest and most versatile drying system for water based paints, winning numerous awards.

Post installation Junair offer a complete support package including technical support, scheduled preventative maintenance, upgrades, emergency callouts and replacement parts. We service

all makes of spraybooth oven and our services are available throughout the UK. To find out how Junair could help your business, please contact Junair today on tel 01706 363 555 or email sales@junair.co.uk.

Published in association with: Junair Spraybooths Ltd Tel: 01706 363 555 Fax: 01706 363 560 Email: sales@junair.co.uk Web: www.junair.co.uk

Aerospace Aircelle

High-Tech hidden in the hills

High technology design and manufacturing are very much alive and well in the UK and is often found in surprising places.

None more so than in the Lancashire hills, home to Aircelle Burnley, a cutting edge, world leading aerospace company that has recently undergone a major growth and management restructure which has further strengthened its place on the global manufacturing flightpath.

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old mill town of Burnley, deep in the industrial heart of Lancashire, is not the first place that you would expect to find a world class aerospace manufacturing. However, according to the North West Aerospace, Northwest England is seen as the premier aerospace cluster in the UK and plays a pivotal role in the UKâ&#x20AC;&#x2122;s aerospace sector, employing more skilled people than any other region.

Carrying on the tradition One of the biggest players occupies one of the old Lucas manufacturing sites in Burnley and is the only UK base of French firm Aircelle, part of the giant SAFRAN conglomerate. It is from here that Aircelle design and manufacture jet engine nacelles, essentially the structure around a jet engine, which also provides the reverse thrust mechanism. They do so for aircraft of all sizes; from business jets to the enormous double decked

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Autoclaves Group completes Aircelle contract Autoclaves Group has supplied Aircelle Ltd in Burnley with a new 5.0m x 13.0m autoclave system for the manufacture of composite components.

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ircelle is one of the leading players in the worldwide nacelle market for aircraft engines. A subsidiary of the Safran Group, Aircelle employs nearly 3,000 people on seven sites in France, the United Kingdom, and Morocco.

Our brief was to supply, install and commission a full turnkey autoclave solution, to incorporate all ancillary equipment, including specialist highpressure air compressor systems and water-cooling towers.

Due to the size and weight of the autoclave, it was agreed the most cost effective solution would be to complete the entire autoclave manufacture on site. Working closely with Aircelle personnel, clearly defined project and manufacturing plans were compiled to

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ensure the project ran efficiently from start to finish.

On completion, the new autoclave was subjected to a series of pre determined commissioning trials to ensure the system delivered optimum performance and the repeatability that is demanded throughout the aerospace industry.

Mike Mitchell, Facilities and Capital Assets Manager at Aircelle, said: “Autoclaves Group put in a great deal of effort to provide a completed system that has integrated seamlessly with our existing facility, within a very tight timeframe and without cutting any corners or compromising product quality or safety.”

Russell Gibson, Managing Director of Autoclaves Group, said: “From day

one, the team at Aircelle has fully understood our approach to autoclave manufacture and installation. It has proved an extremely positive and productive partnership.”

Published in association with: Autoclaves Limited

Crown Works, Worth Way, Keighley, West Yorkshire, BD21 5LR

Tel: +44 (0) 1535 687450 Fax: +44 (0) 1535 687455 Email: info@autoclavesgroup.com Web: www.autoclavesgroup.com

Aerospace Aircelle

A380. Aircelle Burnley has established itself in the hearts and minds of the surrounding population, winning awards for its work and involvement with schools and its investment in local people. At the same time, it has become a major force on a global scale with huge investment in process, infrastructure and technology.

Aircelle Burnley is continuing a tradition of aerospace design and build in the area that has been around since 1940. They are also the largest private sector employer in Burnley. Despite that, four short years ago even the people of the town hardly knew who Aircelle were. Being situated on an old Lucas manufacturing site, Aircelle seemed to have fallen off the radar. That was before the visionary influence of the man now at the helm, Managing Director Andrew White. “When I first came here in 2005, I went along with a couple of colleagues to the Burnley Business Awards evening” said Andrew. “People would ask where we worked and we’d say, ‘Aircelle’ to which the usual response was ‘who are they’?”

Since then thanks to the hard work and dedication of the team that Andrew has built, Aircelle in Burnley has won Lancashire Business of the Year 2008 and Burnley Business of the Year 2009 in recognition of the company’s contribution to the local area and the substantial investment made in its workforce.

New Line Up, New Future When Andrew White joined the business in 2005, he brought with him substantial experience of the aerospace industry having spent most of his early working life in the

sector. However it was experience of another industry which has been the inspiration for his work at Burnley.

Andrew spent seven years in the field of medical equipment manufacture with global giants Johnson and Johnson and it was there that he learned about cutting edge, high tech manufacturing and how to structure a business and the skills and the culture needed to get the best out of all the elements at your disposal. He had a vision for Aircelle Burnley and the talent lies in implementing it. From that point alone, Andrew is clearly highly skilled. The ability to see and read the bigger picture is essential and he has a refreshing outlook. Andrew also recognises that great leaders need to be able to maximise the potential contribution of every one of their people. Andrew focused his team to ensure everyone played their part in the rejuvenation of Aircelle Ltd. “We are looking at carefully selecting the work that we take on here so that expansion complements the work that we already do. That means largely working with composite technology in keeping with the technology and skill investments we have made and for which we are known.”

The management team that Andrew has built is almost entirely new, made up of a mix of internal promotions and external recruitment. Experience of industry outside of aerospace taught him the value that the knowledge of other sectors can bring.

Let the people lead the way Andrew recognised early on that there was an imbalance between those who had very high, technical capability and those with the leadership qualities needed to engage and harness the people potential. It was critical that Aircelle had strong leaders who could role model the right ways of working and develop high performing teams within their technical specialisms but also develop a broader business mind set capable of seizing and developing new business opportunities. A plan was developed to identify those already within the business who had leadership potential that could be developed and then, where that was not possible, to bring in people from outside who already had that ability to lead. The management team before the Andrew

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Creno The CNC machine you need

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he CRENO policy is to create a user ~ manufacturer dialog with the end user, the aim, being to achieve a real synergy and achieve an optimal machine design solution. From its formation 32 years ago, CRENO has chosen to specialize in the global aerospace and defence industry, a market which demands a high level of performance and accuracy.

Vacuum clamping systems, fixtures, control systems, cutters and software experience etc. are all available from CRENO to support the project or deliver a turnkey solution. Efficient dust extraction is an important aspect for Composites machining and to this end CRENO have designed a highly effective solution for the 5 axis machining process which is both highly developed and proven technically.

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Longevity and reliability of these critical machine tools is also very important, as is the total cost of ownership. Innovative design, reliable components, high quality mechanics and ISO 9000 program, together with a global product support team consolidate our standing in the market. CRENO are proud of our reference list which shows repeat orders from customers around the World.

In addition to the profiling of complex components, CRENO have successfully developed, multi-axis, multi-head highly productive drilling machines e.g. for nachels, counter sinking solutions, ultrasonic cutting of honeycomb, water jet cutting for aero engine parts and automated final assembly machines for drilling,

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Aerospace Aircelle

White era had served the business well enough but lacked the strategic thinking needed to drive Aircelle into the future, especially as output grew.

What they have done at Aircelle is move from a very traditional, skill based training format which tended to focus on core capability, be it engineering or operations, to a more modern approach with far greater emphasis on values and behaviour and developing sustainability among the work force.

“When I first joined we had quite a high attrition rate for new starters.

People would come in and be put off by the very traditional feel and set up” said Andrew. “It has taken a while to implement but the focus now is on involving our people to maximise their contribution to our success.”

The HR Team have been responsible for steering the culture shift headed up

by HR Director Helen Gopsill. Helen joined the team two years ago from a background in Retail Distribution. During this time the team have worked hard at creating a working environment in which individuals can thrive.

“We looked at the existing training programmes right the way through the business and quickly decided on necessary changes.” Said Helen. “We had a problem with sourcing core skills so we decided to re-introduce apprenticeships and introduce a lot of Vocational Training through the NVQ route. We have even developed a number of our own NVQ programmes that have been taken up by local training organisations.”

The plan is to create a learning culture within the business and Helen, along with operations director Darren Mitcheson, are passionate about seeing it happen. They are in an enviable position as being part of a conglomerate like SAFRAN which means that funding for justified projects is available but they are also free to design and implement their own strategy and retain a certain autonomy.

“People work here a long time and we have an immense amount of knowledge and experience that has not been unlocked effectively in the past” said Darren. “We are changing mindsets and encouraging people to have those ideas and bring them to life. If we get just one great idea from each person per year, that is a lot of positive, hard won knowledge that we can harness.”

Streamlining supply At Aircelle Burnley, 70% of turnover is externally sourced meaning that efficiency gains in supply chain logistics is a major focus for the company. Aircelle has seen production of its key products, the thrust reverser on the Airbus A330 engines, more than treble from 40 units per year to 140.

While nowhere near automotive output, it represents a major operation in aerospace terms where complexity is much greater and industry compliance is necessarily very high. The man tasked with the job of streamlining this aspect of the Burnley operation is Adrian Banks, Supply Chain Director.

83% of employees said that they were proud to tell other people where they worked and had a sense of pride in the business Adrian is the newest member of Andrew White’s new team, having only been with Aircelle since February. Recruited from the automotive world where finely tuned, slick supply chains are absolutely vital to operations, Adrian has a good idea of the challenges ahead and following Andrew White’s remit, is determined to work hard and closely with all suppliers.

“We have to be more demanding of suppliers in order to move forward. You’re only as strong as your weakest link” said Adrian.

The plan is to design and implement a comprehensive supply measurement system whereby every quarter, all suppliers will be given feedback on their performance and a ranking; the aim being to help those suppliers to grow their businesses with the help and guidance of Aircelle.

What will result from this will be a number of frontline, world leading manufacturers whose businesses have been directly enhanced by the Aircelle Burnley connection.

By being a tier two or three supplier to a growing global player is going to be hard but rewarding work for those up for the challenge.

The right path “We’ve come a long way but we are not there yet, we are on a path. The biggest change in the business has been the recognition of the role our people play in our success.

That wasn’t there before” concluded Andrew.

Heading into the future, Andrew White is focused on winning the right contracts which are natural progressions of current capabilities that means high tech, high quality composite work leading to full system integration there are plans to overhaul all the current Information Technology Systems and introduce SAP within the operation, which is group led and will happen soon.

Aircelle Burnley has a bright, prosperous future ahead of it with a very bright, capable and dedicated management team at the helm and some fantastic plans outside of the immediate workplace which will ensure both sustainability and position as a global force. end

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Scott Bader Make your Fibreglass Composite Parts British to the Core

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great British manufacturing success story has been the growth of the British Leisure Marine industry, including the producer Sealine, who makes high quality leisure motor yachts. The hulls and decks of most luxury motor yachts are fibreglass (FRP), made using the highest quality Lloyds approved marine resins and gelcoats and bonded with a structural adhesive.

Scott Bader Ltd. is recognised by the British Marine Industry as the market leader due to the consistent high quality and reliable long-term performance of its Crystic® resins, gelcoats and Crestomer® structural adhesive products, which are manufactured in the UK. From its chemical plant in Northamptonshire, Scott Bader supplies customers

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throughout the UK and exports to over 20 countries. The Crystic® brand is now recognised as a mark of quality and technical excellence worldwide.

But Scott Bader products are not just for luxury boats. Over the last 60 years their innovative R & D team has developed an extensive product range of resins, gelcoats, adhesives and high performance fire retardant products, which converters mould into a variety of shapes and colours for use in demanding applications in key industrial markets: building & construction, renewable energy, chemical containment and land transportation.

As pioneers in FRP composites since the 1940’s and ongoing innovators, Scott Bader people are regarded as the experts to call if you are looking

for the highest level of product quality, knowledgeable technical support and manufacturing expertise.

Today Scott Bader is a £180 million multinational, employing 560 people worldwide. It is an independent common trusteeship company with a strong commitment to its workforce, society and the environment.

Published in association with: SCOTT BADER Tel: 01933 663100 Web: www.scottbader.com

Booat building Sealine International

Moving targets Edward Machin meets Sealine, a manufacturer of luxury boats incorporating traditional manufacture with the best of the automotive industry’s production processes

Founded

in 1972 by seafaring enthusiast, Tom Murrant, Kidderminster-based Sealine has since grown to become one of Europe’s largest production luxury boat builders, with a model range spanning sports boats and flybridge cruisers to luxury motor yachts. Sealine is a subsidiary of the $4bn turnover Brunswick Group who, in addition to its US facilities operates with boat manufacturing plants in Poland and Portugal, building boat brands such as Quicksilver, Arvor, Uttern, Valiant and, more recently, the US-branded Bayliner. UK production is represented by Kidderminster’s 14 acre, fully integrated site, with 50,000sq ft of covered workshops enabling Sealine to build the larger boats within Brunswick’s European sector — starting at 35ft and ranging in price from £180,000 to £1m.

Maintaining so diverse a product range drives, says manufacturing director, David Stretton, the company’s continually evolving production initiatives.

“This is of particular importance, given that Sealine operates within an industry that has long-needed both streamlining and an increase in modern engineering methods. While design for manufacture isn’t a novel concept within the automotive industry, for example, it would be fair to say that the boating community has often kept its processes somewhat more conventional.”

Accordingly, while the majority of Sealine’s design and production is undertaken in-house, it does not rule out design partnerships with similarly-minded companies; its flagship yacht, the T60 AURA, jointly produced with Studio Conran being one such example. While perhaps the exception, operating as part of the Brunswick Group enables Sealine to leverage significant purchasing power — applicable both to boats designed alone and in collaboration with other industry-leading manufacturers.

More generally, “We see ourselves as excellent corporate citizens,” says Stretton, “recognised by the fact that Sealine holds the best record within Brunswick’s boat manufacturing operations for our health and safety, recordable incidence rate. Moreover, we have very recently been awarded environmental management accreditation ISO14001 by Lloyd’s Register (LRQA) — to the best of our knowledge we are the only UK boating company to receive such an accolade, and one of only a handful of boat manufacturing companies worldwide. Whilst we are in the early stages of our streamlining and cultural change, it is fair to say that we must be doing something right even to be recognised.”

(Auto)motivating Lean Central to Sealine’s continued success is the overhaul of its manufacturing operations. Explains Stretton, “Given that they are widely accepted as leaders in the fields of continuous improvement when introducing Lean and production efficiencies, we look to take inspiration from the automotive and aerospace sectors’ best practices and implement them in our day-to-day operations.” As such, Sealine has introduced flowlines across its production facilities, albeit operated by boats mounted on trolleys and indexed as opposed to a traditional moving line — initially, at any rate. For example, every 2.5 days a boat is removed from the line, shifting all other parts along accordingly. With overhead cranes, such a process took approximately eight hours; it can now be done

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Booat building Sealine International

in 15 minutes. “Clearly, this is somewhat different in practice from an automotive moving line but, importantly, we take those modern manufacturing principles and adapt them to a boat-building environment,” says Stretton.

Having implemented the foundations of its production ethos, Sealine’s current projects centre on how to feed those lines into a concurrent assembly, thus breaking the work down by footprint or stage. Moreover, the company will be shortly introducing kanbans for the larger items of assembly — flybridge or engines, for example.

All lower value items will operate on a minimum/maximum or Vendor Managed Inventory (VMI) basis, with the final element being Direct Line Feed (DLF) in kit form that are issued from Sealine’s distribution stores.

“Take a propulsion system,” says Stretton. “Because we’ve broken the work and content down over the footprint, rather than delivering the entire system to our production lines, distributors will simply choose the relative kits from any given system.” Whereas the company would have previously done so in a single stage, kits are now delivered over three footprints — indicative of the fact that presentation of material to the line and principles of continuous flow sit at the heart of Sealine’s drive for optimum manufacture.

“The heartbeat of the line is currently moving at 2 ½ days, with the SC35 being used as a pilot,” says Stretton. “In December we introduced a 40ft boat to the set-up, and I am delighted to report great results so far.” Similarly, the SC35 used to be manufactured in four lines with up to 20 individual stages; the company’s production advances mean that its now operates a single line with eight stages.

With such tangible — and immediate — successes, does Sealine plan to extend the production model across its entire product suite? “At this stage,” says Stretton, “we are concentrating primarily on the small and mid range boats, given that our larger vessels are operating at considerably larger takt times; 28 days for a 60ft boat as opposed to 11 for the 50ft boats.” That isn’t to say that Sealine won’t apply these production principles to its biggest boats in the future and, accordingly, the company is engaging with industry leaders from the commercial vehicle industry to

complement the traditional boat-making skills which have served it so well in the past.

Indeed, “While we are understandably delighted with the recent progress made at Sealine, it remains crucial that the company retains a balance in all that it does, nevermore so than with regard to our manufacturing processes,” assures Stretton. “For example, we don’t want to be seen as deskilling or moving away from the boatbuilding values and techniques that our customers have come to expect from a Sealine vessel. Ultimately, I see our role as manufacturing peoples’ dreams, and while technology undeniably has its place, we must ensure harmony between modern production methods and the long-established approach to manufacture which our company was founded upon.

The SC35 used to be manufactured in four lines with up to 20 individual stages; the company’s production advances mean that its now operates a single line with eight stages Negotiating choppy waters “While we are well set for 2010 and beyond, the goalposts for the boating industry have, I feel, been irrevocably shifted by the recession,” says Stretton. “Indeed, it is doubtful that the sector will ever again reach the order volumes seen two years ago, meaning that for Sealine to remain as a best in class manufacturer we must reassess each aspect of our business in turn. With customers becoming ever more discerning, and rightly so, we therefore continue to offer an adaptable, industry-leading product portfolio — manufacturing more high specification boats than previously being merely one example.”

That said, and in spite of the company’s affiliation with Brunswick, Stretton argues that Sealine does not necessarily hold itself in direct competition with other best in class vessel builders. “Since our inception, Sealine has prided itself on the fact that we produce vessels for boating enthusiasts and connoisseurs who love great times on the water, given that the company was founded by precisely one such individual.

While practicality and storage requirements are therefore key for our customers, the styling DNA in our latest ranges are also unique among our competitors.”

Out of adversity comes opportunity, says Stretton, and witnessing Sealine’s culture of continuous improvement it is hard to argue with him. The company has recently undertaken a recruitment drive, strengthening the workforce to undertake work on its burgeoning order book. “Traditionally, the winter months can see a lull in orders for the boating industry,” he says. “We hold the fact that the SC35 order book is filling up ahead of our expectations, and our other ranges also performing strongly as extremely encouraging signs for the business. Continually striving to give consumers further reasons to purchase our boats, should they need them, the upcoming year for Sealine looks like relatively smooth sailing — just the way our customers like it, in fact” end

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Quinnovation!!

From its creation 37 years ago to its current status as a worldwide conglomerate, The Quinn Group has had a meteoric rise to success.

You only have to look at the diverse nature of the group to understand their secret to success – innovation.

From

humble beginnings in 1973, when Sean Quinn began extracting gravel from the family farm in Derrylin, Co Fermanagh, to sell to local farmers, the entrepreneur had foresight. “I suppose what we have always tried to do was to innovate and look at where we are going…..I was always looking for new opportunities…” he says in a rare speech back in 2007.

This philosophy from the chairman of Quinn Group has been instilled in the ever expanding company and coupled with investments in both people and technology, has made Quinn Group one of Ireland’s most successful companies.

With divisions dotted all over the world, ranging from building products, insurance, hotels, packaging and property, the companies activities are far reaching both in terms of diversity and geography.

The manufacturing arm of the Group, including Quinn Glass and Quinn Packaging, perhaps best demonstrates the company’s ability to recognise gaps in the market and address them.

The Quinn Glass plant at Elton, Cheshire is unique in global terms and undoubtedly one of the most modern and efficient container glass and filling operations in the world. The factory, situated between Chester and Ellesmere Port, employs 700 people and state of the art facilities making the factory not only a green leader but also places it at the forefront of automated technology.

The mix of computerised processes and experienced skilled staff ensures perfect results time and time again and the £300 million plant produces more than 1.4 billion bottles a year, making it one of the biggest glass plants in the world.

Manifestations of innovation are omnipresent throughout this enormous 205 acre site. All 13 lines are fitted with Emhart forming equipment, and with

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coloured forehearth technology, as well as product decoration on site, the company are able to readily adapt to changing customer demands.

An electrostatic precipitator (EP) and Selective Catalytic Reduction (SCR) ensure that the emissions of Sulphur, Nitrogen and particulate are the lowest in the sector and established a new Best Available Technique (BAT), which ensures the plant, is running to the highest of environmental standards. In fact, recycling and green issues are key to the operations. Quinn uses recycled glass (called cullet) to produce new bottles, which is melted and combined with limestone, sand and soda ash – the main ingredients of glass – at 1600oC. Inspection equipment examines bottles after they are cooled, rejecting those with even the most minute defects, which are then reprocessed back through the system. Not a single gramme of glass is wasted.

The plant also houses one of the largest automated warehouses in Europe holding more than 282,000 pallets, all individually racked. Packaging integrity is maintained as pallets are not stacked on top of one another as would be the case in conventional warehouses. The high bay warehouse provides sequential pallet deliveries and is compliant to full track and trace legislation. Computerised cranes travel down narrow lanes at 4 metres per second between rows of pallets, which are stacked to 35m high. The warehouse covers 13 acres and if the 282,000 pallets were stored in a traditional warehouse the space required would be 60 acres.

Quinn Glass, Elton is one of only a handful of plants worldwide, and the only one in the UK, that manufactures and fills glass bottles at the same site cutting down on transportation costs and making the factory the greenest solution possible for manufacture of glass, filling and distribution to UK markets. The filling hall is as big as five football pitches and is also filled with Automated Guided Vehicles. Five filling lines supply Beers, Ciders, Soft drinks and Wines.

Quinn Glass is not a typical glass container manufacturer.

The investment in technology and people is evident throughout the plant as is the innovation ethos. The addition of a filling hall and bonded warehouse means customers benefit from considerable cost savings throughout the supply chain because containers can now be made, filled, stored and distributed at one purpose-built site.

Quinn Packaging has been a leading producer of both rigid and flexible plastics for food packaging in the UK and Ireland for over 20 years. Recent investment in a brand new

Construction Quinn Group

200,000 sq ft production facility at Ballyconnell, Co Cavan, Ireland has seen the company going from strength to strength. With more than 20 production lines and a dedicated workforce producing an extensive product range, this division of the Quinn Group is another prime example the company’s cutting edge technology and ability to identify market chasms.

With products that include thin gauge sheet, diary spread containers, meat & poultry trays, blown film, strapping and agri stretch wrap, Quinn Packaging is pushing boundaries and challenging industry norms. This new state of the art facility is a one-stop-shop beginning with the extrusion of sheet through to the thermoforming of the containers and finally to the decoration of the products. It is through quality and on time deliveries that peace of mind is provided to the Customer whilst saving them time and money.

Product options include both industry standard and bespoke designed shapes, sizes and depths. These are manufactured from a wide range of raw materials. Methods of decoration include

printing, injection moulded in-mould-labelling, shrink sleeving or applied adhesive label, all of which provide striking, high quality products when displayed on the retail shelf.

The company, together with carefully selected partners, is constantly innovating manufacturing techniques. By pushing boundaries and challenging industry norms, Quinn Packaging is at the leading edge of innovation and has introduced a number of new manufacturing techniques to make products faster, stronger and lighter.

Having built a new facility to the latest exacting standards, Quinn Packaging has invested in renewable technologies for the extrusion of post consumer recyclate into food approved sheet that is subsequently processed into new food packaging products. This “Green” focus is also reflected in ongoing projects such as “light-weighting”. These projects are designed to reduce packaging waste entering in the marketplace in the first place. For example in all food tray products, Quinn Packaging use approved recycling technologies that allows the use of more than 50% post consumer waste in shallow and deep drawn products to allow packing of a range of food products.

Innovation or “Quinnovation” resonates not just in the Glass and Packaging plants but throughout the entire Quinn Group. The entrepreneurial skills of its founder and chairperson, Sean Quinn, has infiltrated to every aspect of the company, and in such tough economic times as these it is certainly standing to the companies credit as the business continues to grow and diversify. end

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Mansol (Preforms) Limited Mansol (Preforms) Limited is one of Europeâ&#x20AC;&#x2122;s largest and most experienced manufacturers of sintered glass products.

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e are proud to have been British owned since the 1950â&#x20AC;&#x2122;s.

The company is dedicated to the manufacture and supply of sintered glass preforms, glass support rods, miniature lamp beads, glass granules and fibre-optic sealing preforms for the electronic and electrical industries.

Sprayed dried glass granules are also available for customerâ&#x20AC;&#x2122;s inhouse manufacture of preforms.

We also have the capacity for subcontract glass milling.

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Our research and development department has over 40 years of experience in all aspects of glass and glass processing. We are willing to undertake research projects for customers and manufacture samples; we can also develop new glasses to suit a particular sealing task. Our 2,500 sq.m modern factory is situated in the east of England and offers excellent links to London and Europe with Stansted Airport being only 40 miles away. We are also close to the M11 motorway and in the region of the port of Felixstowe.

Published in association with: Mansol (Preforms) Limited Tel: 01440 702371 Fax: 01440 712512 Email: info@mansol-preforms.com

Mil-aero markets Amphenol

The military-industrial complex Having established a leading position in the military and aerospace arena, 2010 finds Amphenol Ltd taking its industryleading interconnect technologies to harsh industrial markets. Edward Machin investigates a manufacturer putting both processes and people at the heart of its success.

Whitstable-

based Amphenol Ltd is a UK subsidiary of the Amphenol Group, a $3bn turnover global leader in the manufacture of interconnect systems — including electrical, electronic and fibre optic connectors, coaxial and flat-ribbon cables, among others. As one of over 100 operating sites under the corporation umbrella, Amphenol Ltd has traditionally focused on the production of circular connector technologies for the global military and aerospace (Mil-Aero) markets.

Such a remit has reaped great success, with Amphenol content found in most major platform, systems and customer-base within the Mil-Aero market — BAE Systems, General Dynamics and Thales, to name but three.

Nonetheless, recent years have seen the company’s UK division leveraging such expertise and product capabilities to diversify into adjacent markets; primarily industrial, but also renewable energy and oil & gas.

Says Sales and Marketing Director, Chris Billinge, “The decision to diversify, and therefore expand what our customers understand Amphenol Ltd to represent, is indicative of a common theme within the Group’s target markets — namely the manufacture of a variety of applications for harsh environments. As such, the company has built on the core competencies, knowledge and production techniques that have served us so well in the Mil-Aero markets and are applying them to, for example, the rail mass transit, factory automation, motion control and natural resource exploration sectors.”

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ULTRA PRECISION GROUP (ULTRA PRECISION SA and LEMCO SA) U

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ltra Precision SA and Lemco SA became â&#x20AC;&#x153;oneâ&#x20AC;? in September 2008 and today provide a significant capability across the Prototype to Production requirements of its Worldwide Customer base from its 3 manufacturing operations based in Switzerland.

Whilst our roots are firmly set in providing precision electrical contacts to the Connector Industry (Telecom, Military, Aerospace, Industrial, Photvoltaic, Automotive, T&M) our capabilities go beyond that and today we are seeing more Medical, Watch, HEPV and general opportunities particularly for our CNC facility within Lemco SA.

Our intention is not just to supply you with products - we want to supply you with a complete solution through our early involvement in your design process.

With Gold prices increasing day by day we are working with a small number of exclusive plating partners to offer our Customers a choice of Palladium Gold or Selective Gold plating solutions.

Your exclusive Ultra Precision Group representative for UK/Eire is: John Evans Technical Services Ltd.

Published in association with: Ultra precision group Tel: 01271 323750 Mobile: 07739 985412 Email: johnRevans12@btinternet.com

Mil-aero markets Amphenol

Continuous efficiency Says Billinge, “A particularly attractive feature of our Whitstable facility is the fact that it has full end-to-end manufacturing capacity. As with the majority of Amphenol operations, such capabilities highlight a sector-leading manufacturer, offering a particular advantage in the domestic military market — with a preference among clients to contract domestic manufacturers due to increased project sensitivity.” Such has been a major feature of UOR (Urgent Operational Requirements) orders in 2009, whereby production and lead times must be reduced significantly.

Coupled with the fact that Amphenol is in full control of its

A particularly attractive feature of our Whitstable facility is the fact that it has full endto-end manufacturing capacity Chris Billinge, sales and marketing director, Amphenol

“Indeed, it is this culture of diversification within the Group that represents perhaps our greatest strength. Enabling Amphenol to remain a global leader according to market share in a year where international markets have been particularly depressed, our financial strength and share of business, relative to competition, is growing healthily.”

Central to Amphenol Ltd’s capacity to diversify with relative ease rests on the fact that while the 109 operating facilities within the corporate structure are largely autonomous in their operations, they remain highly interconnected. Explains Bob Thompson, Business Development Manager, “While each manufacturing site has to work within corporate guidelines, we take great pride in the fact that there exists a pronounced entrepreneurial attitude to strategic management.”

Subsidiaries are encouraged to run their businesses in the way that best suits local market conditions — something that Amphenol Ltd is currently taking a strong lead on. Says Thompson, “Operating with a great degree of autonomy, we can utilise our extensive local strengths while drawing on the product diversity and capabilities of the Group as a whole. Such gives us the best of both worlds; a knowledge and technology share with our sister companies, yet retaining ultimate control over our own processes.”

supply chain, the company’s cradle to grave manufacturing capabilities are seen as hugely advantageous by its military contractors and, increasingly, the industrial market.

Ultimately, says Billinge, the best of breed reputation that Amphenol enjoys would be made considerably more difficult were it not for a continued investment in both the company’s manufacturing processes and wider staff engagement initiatives. “Together with the ongoing financial outlay in upgrading processes and machinery, vital to our continuous improvement drive is the environment in which we work on a day-to-day basis. By targeting such intangibles, we have seen a steady improvement in product quality — albeit for a business already recognised for its precision of manufacture.”

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Amphenol To further effect this ethos of continual benchmarking, in 2008 Amphenol became a SC21 signatory — a programme designed to accelerate the competitiveness of the aerospace & defence industry by raising the performance of its supply chains.

However, says Billinge, such an initiative has enabled the company to accelerate its lean manufacturing and efficiency drives beyond simply the supply chain. “An area Amphenol specifically targeted for continuous improvement was the shop floor, where we encourage the manufacturing teams to meet regularly; in some cases on a daily basis,” he says.

“Issues are raised, ideas brought up and actions implemented, all within an open forum. Moreover, by displaying every continuous improvement advancement we make within the facility, staff — from management to those on the production lines — are given both greater responsibility and opportunities to share in the company’s successes.”

Employing a predominantly flat organisational structure, Amphenol, says Billinge, “Seek to operate a culture of inclusiveness, as we understand that, above all, it is the people in our business who make the difference.

As such, the company has invested in training staff to NVQ Level 4 in Business Improvement. The course is open to all employees; the first intake of 12 are nearing completion, with the second course scheduled to start in February 2010. Such initiatives ensure we are developing the future experience and skills that will continue to see Amphenol positioned as a best in class manufacturer for both military and industrial markets.”

People power The company-wide investment in people will, says Billinge, “Remain critical to Amphenol’s future. Indeed, developing skills across every level within the organisation is arguably the feature of this business that most represents the key to our ongoing achievements.

Andy Bragg, Managing Director of Amphenol Limited, says, “Alongside the dedication to staff advancement, we retain a balanced approach as to how Amphenol invests in manufacturing and the need of our business to be competitive in a global environment.

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Alongside the dedication to staff advancement, we retain a balanced approach as to how Amphenol invests in manufacturing and the need of our business to be competitive in a global environment Andy Bragg, managing director, Amphenol The company is under no illusion that there are times when it is more cost effective to manufacture components in other territories than the UK. Indeed, 70% of the Group’s production facilities are located in lower cost economies.

This enables Amphenol Ltd to create a manufacturing profile which can combine our end-to-end capabilities in the UK with imported, lower cost production for less technical items.”

Accordingly, 20% of Amphenol Ltd’s component manufacturing — primarily the higher volume, more mature products — is currently undertaken on foreign soil. In the military arena, for example, the company’s contracts may include an offset requirement, i.e. a percentage of the manufacturing processes must be undertaken in the client’s territory.

Says Billinge, “Ultimately, we are able to remain an industry leader while looking after our own, so to speak — both of which have been central to the company since its inception. As well as being welcomed by the workforce, however, our customers recognise and appreciate that we are continually investing in skills and developing our processes while retaining the majority of Amphenol’s manufacturing in the UK. This has been a defining feature of both our Mil-Aero and harsh industrial interconnect operations, and will ensure Amphenol Ltd remains the leading manufacturer in our chosen markets long into the twenty-first century.” end

Pet products Armitage Pet Care

Doggedbysuccess Our domesticated companions have never had it so good. Tim Brown talks to Armitage Pet Care chief executive, Paul Bousfield, who says that when it comes to our friends of the furry, scaled and feathered variety, Armitage aims to please.

Pet

accessories is not necessarily a market synonymous with innovation, but constant improvement is at the core of the Armitage approach and it has clearly paid dividends. Over the last 12 months, the company has shunned the economic recession to achieve relatively strong growth and increase its margins largely through improved efficiencies and product development.

With its main office and distribution centre in Nottingham as well as a manufacturing site in Pinxton, Armitage makes products for almost every mainstream animal including dogs, cats, fish, birds and rodents. The company not only produces boutique offerings but also a staple range of typical pet products such as bowls, collars, leashes, food and enclosures. â&#x20AC;&#x153;Our strength is that we supply everything including food and all the accessories that one would want,â&#x20AC;? says Bousfield. â&#x20AC;&#x153;We are a one-stop solution and are the only player in the market with meaningful brands across a whole portfolio of

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Pet products Armitage Pet Care

Armitage Pet Care at a glance Location

Armitage House, Colwick Industrial Estate, Nottingham, Nottinghamshire

Contact

http://www.armitages.co.uk/ enquiries@armitages.co.uk +44 (0)115 938 1200

Sector

Pet product manufacturer and distributor

Employees

150 core workers, 30 seasonal workers

Turnover

£25m

History

Started by Samuel Fox Armitage in 1775, Armitage Pet Care is one of the largest suppliers and distributors of pet products and accessories in Europe with many leading brands in their portfolio.

Brands

Algarde, FinS, Good Boy, Good Girl, Gussie, Kagesan, Phoenix, Rotastak, Wafcol, Wild Bird

ranges.” Indeed, the Armitage Pet Care umbrella shelters such recognised brands as Good Boy, Gussie, Kagesan, Rotastak and Wafcol to name only a few.

Bousfield considers the Armitage manufacturing product design program to be one of the company’s core competencies. “We take an approach which is to take different ideas to a market that has been starved of innovation.” And indeed Armitage is in a league of its own when it comes to the creation of novel pet products with inspiration for new products commonly found simply by looking at human products.

One of the most successful and original of Armitage’s products solved the age old issue of canines and chocolate.

As any dog owner will testify, when it comes to chocolate, the last thing on a dog’s mind is self preservation.

Leave a Toblerone out on the kitchen table too long and undoubtedly your pooch will get its sticky paws on it. But of course the consumption of chocolate can potentially kill a dog. Enter Armitage, which has allowed dogs to have their chocolate and eat it too with their range of cocoa-free chocolate for dogs.

While Armitage has a very strong share in the pet food market, not all of its products are edible. The upcoming release of the dog ‘Space Lobber’ will undoubtedly replicate the company’s success with other equally unusual products. For the uninitiated, the human space hopper is a giant bouncy ball which can be ridden to provide a highly enjoyable but somewhat ineffective mode of transportation. The ‘Space Lobber’ is a large 30cm tall latex squeaky toy, with a similarity to the human space hopper in shape and can provide the family pooch with a great deal of entertainment.

Dog chocolate and space hoppers are only the tip of the food bowl when it comes to the Armitage range of pioneering pet products. In fact, to remain as the largest independent supplier and distributor of branded pet accessories and treats in the UK, Armitage Pet Care undertakes a constant process of creation and development. “We are the market leader by a country mile in terms of this sort of product range,” says Bousfield. “You will find in the pet world a large degree of humanisation in many pet products.

An example might be posh shampoo for dogs, which I think reflects the way in which we now treat our pets.”

With a core staff of 150 and an extra 30 seasonal staff, Armitage has engaged the use of what Bousfield terms cross functional teams which drive progress and ensure continued operational and efficiency improvements. Each sector of the business is allocated a team which is tasked with problem solving and solution implementation. In the event that an issue becomes apparent, the relevant cross functional team is responsible for taking the issue from the cradle to the grave which ensures all improvements are not only undertaken but completed.

Bousfield took the position of chief executive with Armitage just over a year ago but has already overseen a considerable change in operational structure and company culture. “I would describe us as a good company that just needed some principles set in place,” he says. “Those principles were about how to get onto the next development and encapsulating as a team all the initiatives that we need to do. We are already getting terrific results from a team that is now feeling empowered. Empowerment, innovation

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EIC – The Energy Experts EIC are proud to support Armitage Pet Products with all their energy requirements

A

s the UK’s leading energy consultancy, EIC has offered the highest levels of expertise and assistance to a client base of industrial, commercial and public sector organisations for over 30 years and has developed a reputation built on expert analysis of the energy market.

With a portfolio of over 1,200 clients, including 40% of the FTSE 100, EIC offers a range of energy related services from contract negotiation and risk management to invoice validation and carbon management.

In working with Armitage Pet Products, EIC has added real value by advising on the timing of electricity and gas supply contract negotiations, fully managing the fixed contract renewal process from start to finish. Upon joining EIC, Armitage were appointed a dedicated Account Manager.

Each Account Manager is committed to a small group of clients to ensure excellent customer care and regular communication.

The Account Management team are very proactive and are in contact with clients all year round and have been able to assist with all Armitage’s energy needs from reviewing supplier terms and conditions to offering advice on potentially costly ‘Take or Pay’ provisions.

Renowned for their Market Intelligence service, EIC offer a variety of energy reviews.

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Armitage receive daily, weekly and monthly reviews via email, helping their procurement team understand key market drivers and giving them the power to make informed purchasing decisions.

Armitage also benefit from bespoke weekly Price Trackers.

These reports, sent up to twelve months in advance of a supply contract renewal date, enable Armitage to identify prime opportunity points to fix prices.

They have proved an invaluable budgeting tool for planning future energy costs and presenting ‘what if…?’ scenarios.

After the tendering process is complete, EIC ensures that all sites and meters are registered correctly and manages any queries with energy suppliers, providing the procurement team at Armitage with peace of mind and time to focus on the purchasing of other key commodities.

Armitage have also seen the value of the EIC energy management reporting service, Knowledge Manager. These reports provide an invaluable monitoring and targeting solution that Armitage use to assess their energy strategy and to understand their consumption patterns. Reports covering Power and Load Factor, ASC levels and Maximum Demand are analysed for anomalies and potential savings.

The EIC team of experts help guide clients through the challenging and volatile energy markets, forming an integral part of the client’s energy management team. Working closely with Armitage Pet Products, EIC will continue to build on our already strong relationship, offering unparalleled advice in energy purchasing and management.

“We appointed EIC and they quickly assigned an Account Manager to support us with our upcoming renewals. After the contracts were secured they offered assistance in other areas and immediately started the process of tracking our next renewals which has helped us budget for future energy costs.”

Paul McCartin Group Supply Chain & Operations Manager

Published in association with: EIC

Ravens Court, Ravensbank Business Park Redditch, Worcestershire B98 9EY

Tel: 01527 511 757 Email: theenergyexperts@eic.co.uk Web: www.eic.co.uk

Pet products Armitage Pet Care

and better teamwork have been the major improvements.”

Such benefits have been evident in Armitage’s ability to reduce its environmental impact, a topic considered of substantial importance at the company. “We take the environment very seriously and have used improvements in the efficiencies of our processes to reduce waste,” says Bousfield. “Running our machines more wisely has also been absolutely key and has allowed us to significantly reduce our energy use.”

Of course it is not only environmental benefits that go hand in hand with efficiency. Unlike many companies over the last 18 months, Armitage has remained considerably buoyant during the downturn. “Our sales are in healthy growth and our margin has substantially grown and that has been achieved through all the teamwork and efficiency improvements we have made. The pet industry is not recession proof by any stretch of the imagination but it isn’t the first to suffer.

People tend to be very supportive of their pets in terms of spend.”

With such a credible performance during what has been a fairly tumultuous time for most manufacturing sectors, is it any wonder that Bousfield has big plans for the future of Armitage. Indeed, he says the company is aiming to double its turnover within the next five years. “To do that,” he says, “will be all about owning the areas in which we operate and driving the innovation and brand development which other key activities. We are not just going to import products from China, and we are going to invest and develop and build our brands.”

The trajectory for Armitage is clearly onwards and upwards. Through further consolidation of its position in the pet care market, the company is in a strong position to realise its growth potential both within the staple as well as the novel pet product areas. Of course, the company’s future product developments are limited only by the imaginations of the designers, who are undoubtedly current working on the next big thing in the pet world. end

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blast

Having a

With an overflowing trophy cabinet in recognition of its full façade building solutions, Alumet Systems have recently introduced a walling product designed to withstand the effects of improvised explosive devices.

Edward Machin reports.

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Established

in 1993, Warwickshirebased Alumet Systems design, manufacture and install award-winning solutions for the complete building envelope market — including curtain walling; cladding; windows; louvre systems; solar shading; permanent access facilities; aftercare; and maintenance.

Having developed strategic alliances with a who’s who of the UK construction industry, the company works in partnership with Taylor Woodrow / Vinci (GOLD Strategic Alliance), Kier Group (Key Partner), BAM Construction (Category 1 PEP Status), Willmott Dixon, Miller Construction and Lovell Partnerships, among others. Indeed, “That Alumet has historic relationships with the main contractors in our sector ensures a continuity of big-ticket work that we are delighted to enjoy,” says the company’s director of sales & marketing, Dean Walton.

Construction Alumet Systems

“In many cases, once they have — or even prior to — secured a contract, the architect or construction company will work in conjunction with Alumet along each stage of the design process.

Whereas the majority of our competitors provide only the windows or curtain walling for any given project, we are additionally able to provide the cradle, gantries, solar shading and louvres; the complete façade of the building, in other words.”

And the winner is…

While an undoubtedly impressive USP, arguably the most striking aspect of Alumet’s business — for the casual reader, at any rate — relates to the sheer number of industry accolades the company has won in recent years.

2009 alone, for example, saw Alumet receive TM’s Aerospace and Defence Manufacturer of the Year; The Queen’s Award for Enterprise in recognition of the company’s pioneering ABLE Façade System; the Innovation Through Construction Technology and SubContractor of the Year Awards at the Builder & Engineer Awards; Installer of the Year at the Glazing Industry Awards; Regional Winner at the Coventry & Warwickshire Chambers of Commerce Awards; Midlands Excellence Award for Innovation; and New Product of the Year at the Growing Business Awards.

Ultimately, says Walton, “These accolades highlight the degree to which Alumet is driven by an ethos of innovation in all that we do. Given that as a company we look to offer a one stop shop, so to speak, we are continually diversifying our product ranges, services, manufacturing divisions and processes.”

Regarding the latter, a 42,000 sq ft fabrication unit opened in 2008 by HRH the Duke of Kent represents the latest addition to Alumet’s state-ofthe-art production facilities — enabling all unitised glazing solutions (including the ABLE system) to be manufactured and assembled in factory conditions.

“The importance we place on our machinery is,” confirms Walton, “central to the company’s successes.

Alumet’s production facilities are largely automated, with CNC and Emmegi Comet machining centres ensuring industry-leading levels of production accuracy in all that we do.”

In order to realise such continuity, Alumet operates an in-house training centre, with both staff and the extended supply chain integrated into each new system that the company manufactures. “I don’t think it would be incorrect to say that people genuinely enjoy working at Alumet, given that they see just how much time and money we invest in their continuous improvement,” says Walton. Indeed, the company is accredited for both Investors in People and Achilles — the latter which was required in order to work with clients such as Bovis, Mace and Shepherd.

“That being said, while we employ production, environmental and HR managers, because Alumet is a family-run business we never close our minds to suggestions from staff members, whoever they may be.”

Accordingly, ‘suggestion boxes’ are placed throughout the company’s corporate and production facilities, with a recent recession-busting drive aimed at saving money through simple measures receiving record levels of participation.

Given that as a company we look to offer a one stop shop, so to speak, we are continually diversifying our product ranges, services, manufacturing divisions and processes Divisions Central to Alumet’s success is its continual willingness to diversify. Coupled with its traditional envelope solutions, therefore, the company rigorously pursues a strategy of diversification — Avon Solar Control, an external shading device to control thermal heat gain and direct levels of light within a building, being one such example. “With environmental considerations becoming ever more central to the construction industry, as well as vastly reducing energy costs, our award-winning Solar Control systems will undoubtedly represent a fundamental part of the company’s future,” says Walton.

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Construction Alumet Systems

“Similarly, we spotted an opportunity for our permanent access solutions to represent an equally forwardthinking feature of the Alumet portfolio.

If you consider that the gantries, window cleaning cradles and mansafe systems of older structures need to be maintained every six months, it is a market with considerable potential.

Given that we recognised its penetration before many of our competitors, the company has already gained a great deal of traction in providing access equipment to such buildings.”

Closely associated with such a remit are Alumet’s maintenance and refurbishment services. During, and even prior to the recession, it became apparent that structures built in the 1960s — be they commercial or residential — we no longer being demolished. The installation of new windows, doors, rainscreen cladding and balconies was required instead, with tenants often remaining in their properties during the works.

Accordingly, it remains imperative that Alumet ensure both occupants’ safety and comfort. Says Walton, “A tenant liaison officer for each property ensures minimal disruption before, during and after work is carried out.

This is a particularly important aspect of the service, given that we are winning an increasing number of full building regeneration contracts — in West Bromwich, Sheffield, Birmingham and Winchester, to name but four.”

Bomb systems Most impressively, and spearheading the company’s drive into groundbreaking, as yet untapped markets, is its division charged with manufacturing solutions for ‘at risk’ buildings. Entitled the ABLE Façade System (AFS), Alumet’s latest design is a lightweight walling solution, structurally enhanced to withstand the effects of an improvised explosive device — for use in airports, MoD installations, embassies, banks, police stations, corporate headquarters, law courts or any areas of mass congregation.

Moreover, as a counter terrorist measure the AFS provides an alternative method of construction to heavy weight reinforced concrete and enhanced traditional on-site construction methods which, says Walton, “turns buildings into ugly bunkers.”

Securing a £6.2m contract with the MoD to protect undisclosed sites in the Home Counties confirmed Alumet’s initial suspicions; namely that it had a unique, industrydefining product on its hands. “Because we transport the system to site in full units and simply fix it to prepared brackets on the superstructure,” says Walton, “overall construction programmes are significantly reduced, thus saving clients both time and money.”

In spite of a seemingly effortless installation process, the ABLE façade represents a deceptively robust walling solution — having been subjected to a 220lb bomb blast, 82ft away, the system outperformed MoD and Home Office requirements by 20%. Given that the AFS is believed to be the UK’s only pre-fabricated, blast resistant off-site constructed walling system, “these are greatly exciting times for all at Alumet”, says Walton. “Our ultimate aim is to be the primary name associated with such innovative, bomb resistant technology — the go-to manufacturer for architects, construction firms and security contractors, in other words.”

With 2009 widely considered the construction industry’s annus horribilus, Walton is nonetheless “delighted to report that our orderbook for 2010 is looking very healthy indeed.” The company has already secured approximately 75% of production output for the year, including contracts for BAM Construction in Cambridge and the regeneration of six tower blocks in Callow Mount, Sheffield with Lovell Partnerships— worth £5.3m and £4.7m, respectively.

“Strange as it may sound,” he concludes, “in many ways building construction is similar to the fashion industry, in that design trends and architectural requirements are rarely static. Coupled with our traditional, best of breed product suite and the AFS, therefore, the company will continue to stay one step ahead of the curve — ensuring that Alumet’s building envelope offerings remain current, award-winning and, above all, a market leader in our sectors.” end

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Automated Material Handling Solutions Excel Automation is a leading supplier of automated materials handling equipment for the automotive, nuclear, food & beverage, warehouse & distribution and aerospace sectors.

W

e are an established supplier to most industry sectors and have many years experience in the design, manufacture and installation of unit conveyors, conveyor systems and associated materials handling equipment.

Our skilled team of customer focussed automation professionals offers a broad base of knowledge and experience in a wide variety of industries. Projects have ranged from individual standard conveyors and bespoke handling

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applications, through to complete turnkey contracts involving conceptual and process design, installation and commissioning.

Our 70,000 sq ft facility in Worcester and our in-house resources enable us to provide clients with a single source for complete systems manufacture and integration including simulation, engineering, machining, fabrication, assembly, controls, assembly and testing in house prior to delivery to site, installation & commissioning, and after sales service.

With over 30 yearsâ&#x20AC;&#x2122; experience, Excel can offer practical solutions to most materials handling requirements.

Published in association with: Excel Automation Ltd Tel: 01905 721500 Web: www.excel-automation.co.uk

Engineering Comau Estil

Manufacturing Advanced

Martin Kinsella, engineering manager for Comau Estil talks to Tim Brown about Comau being a market leader in the field of advanced engineering.

The

company champions continuous improvement and competitive advantage through the design, manufacture, supply and installation of cutting-edge automated manufacturing systems. Specialising in robotics and with 34 locations in 18 countries, the company has more than 40 years experience maximising manufacturing efficiency in the automotive, aerospace, defence, recreational and heavy industries.

Due to the bespoke nature of their industrial automation solutions, the Comau production process is very comprehensive. The company undertakes every step from the initial concept and design phases through to product construction and extends beyond delivery by also providing training and ongoing maintenance services.

Comau Estil is the UK operating sector of Comau.

Based in Luton, with branches in Coventry and Sunderland, the company provides manufacturing production solutions within the UK. As part of the Global Comau Group, the UK

division is able to provide local service while offering access to a worldwide range of products and international expertise. “We pride ourselves on selling to our customers’ needs, focusing on delivering efficiency and productivity and adding value to our customers’ businesses,” says Kinsella.

“We are able to provide our customers with localised support, with the benefits of global capabilities.”

Strategic relationships The attractive combination of a local focus with international knowledge led to Comau developing a close association with UK Trade and Investment (UKTI), the UK Government organisation that helps UK-based companies succeed in the global economy. This affiliation developed in 2007 when Kinsella was invited to attend a UKTI business trip to India. “It was a real honour to be asked to take our experience and use it to show people overseas how much excellent work we have going on in the UK,” says Kinsella. “As a company,

111

Comau Estil Comau recognises that it can only benefit from this association with UK Trade & Investment, which gives us excellent press around the world and lends us credibility in areas where we are not yet known.”

The following year Kinsella, with the assistance of Jaguar Landrover, hosted an event in Halewood to demonstrate the high technological status of the UK advanced engineering sector. Then in May of that year, the UKTI took part in the 2008 UK Advanced Engineering Showcase, again in India. With the aid of Comau, UKTI helped highlight the

Comau Estil at a glance Location

Luton, Coventry, Sunderland

Sector

Automation

Employees

60

Turnover

£24 million

UK’s technological advancements to over 400 companies in Pune, Chennai and Bangalore.

“The event itself was excellent,” says Kinsella. “We were able to show overseas companies exactly what we have to offer in the UK. In one of the presentations we showed a live laser-welding demonstration via webcam, which was really well-received. Throughout the programme, we could see that the Indian delegates were impressed by the engineering advancements offered by Comau and the UK.” Comau’s association with many of the automotive and aerospace OEM’s and their Tier 1 suppliers reenforces their position as a true market leader. Competitive advantage lies in the continuous improvement of products, processes and services, which depends largely on the application of ever more advanced and innovative engineering and technical solutions in the fields of automation and systems integration.

A company may, for example, gain a competitive advantage by incorporating cutting edge solutions integrating an automated robotic assembly or packaging line. Within the automotive industry this might take the form of automated joining and handling processes or assembly and machining applications. According to Kinsella: “There is a demand that exists all over the world and we have standard products that can solve nearly every customer demand.”

Forward momentum Comau’s strong reputation, built on robust client relationships and a considerable delivery portfolio has allowed the company to diversify. This has not only meant a spread into different industries, such as packaging, but also different markets. Building on the networking aspects of his international work, Kinsella is confident of Comau’s ability to further extend its reach, particularly in strong manufacturing nations such as China and India.

As Comau continues its technological development in the field of manufacturing automation, further gains in efficiency are inevitable. There is now overwhelming pressure on companies to engage in economic streamlining and decrease their environmental impact.

Comau’s ability to help facilitate these goals will undoubtedly encourage more manufacturers to engage in developing their competitive advantage.

“In the current industrial climate we see that there is a great benefit for companies to use and re-use these tools in new programs,” says Kinsella. “Customers are demanding increased flexibility and shorter lead times. We have the know-how to achieve those goals and now it is just a matter of going for that market, identifying the right customers and offering them Comau’s basic strength, which is high quality low cost automation and productivity improvement.” end

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Optical components Oclaro

Manufacturing mergers are notoriously challenging to effect without a raft of growing pains. For Oclaro, formed by the merger of Avanex and Bookham, the process has been one of growth, innovation and improved product performance. Edward Machin investigates

Laser precision Oclaro emerges In April 2009, Oclaro ( i.e. optical and clarity) was formed by the merger of (i) Avanex, a leader in the production of systems integration, modules and subsystems and (ii) optical components manufacturer, Bookham. As a result of the merger, Oclaro is a best in class manufacturer of amplification, dispersion compensation, wavelength management and transmission products â&#x20AC;&#x201D; including chips, direct modulated lasers and external modulators.

The merger has firmly enabled Oclaroâ&#x20AC;&#x2122;s position as one of the largest providers of optical components and subsystems to the fibreoptics, long-haul and metro markets.

This continues the consolidation path previously established

by Bookham which acquired, among others, Nortel

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Fasset Fasset is a business and property solutions specialist who work with companies to transform costly surplus space into income streams, freeing them up to concentrate on core activities.

F

asset began regenerating sites in the early 2000’s at a park near Portsmouth, a 43 acre site with 20% occupancy and a £2.5m cost burden.

The site was transformed into a thriving technology park with 90% occupancy levels and is now known as Langstone Technology Park.

Since then Fasset have used key elements of this model to roll out successful knowledge-based science and technology parks elsewhere in the country and help customers reduce their costs and liabilities.

The most recent addition to the Fasset portfolio is Caswell Science &

114

Technology Park near Northampton where they work in collaboration with the corporate owners Oclaro. This is part of an innovative business plan for Oclaro and also provides a home for companies seeking to operate in a flexible, cost effective and dynamic environment.

Mitch Avis, Fasset’s Key Account Manager states “Manufacturers are constantly challenged to evolve because of competitive pressures, globalisation and regulation. We can facilitate more competitive manufacturing by providing significant savings through transforming vacant space at their corporate buildings into income-generating business hubs.

Financial and economic difficulties are concentrating the minds. Identifying wasted space and removing the associated costs is often more valuable than redundancies. One of the benefits of using Fasset is that we drive down total occupancy costs, typically by some 15%, which is a real saving for corporate owners or tenant occupiers alike”

Published in association with: Fasset

Optical components Oclaro

Networks Optical Components and Marconi Optical Components in 2002.

Accordingly, says Steve Reilly, VP of Operations at Oclaro’s Caswell site: “The industry consolidation driven by Oclaro has helped us to assemble probably the best portfolio of technologies in the business. The mix of technologies and processes at Caswell gives us unsurpassed access to a formidable set of building blocks with which to create leading edge chips.” Coupled with this, Caswell is a long-established scientific Centre of Excellence, boasting the industry’s most advanced 3” indium phosphide wafer fabrication facility and 57,000 sq ft of cleanroom.

While extensive cleanroom space is not uncommon within the industry, acknowledges Reilly: “What differentiates Oclaro from the majority of our competitors is the nature of the equipment in our fabrication facilities. During the telecoms boom, for example, Nortel Networks spent

well over a billion dollars acquiring the most advanced photonics technology, systems and equipment. The best of that equipment was subsequently transferred into Caswell.”

Coupled with manufacturing and R&D facilities in the USA, UK, Switzerland and Italy, the company made a strategic decision in 2002 to move its backend operations to an assembly and packaging site in Shenzhen, China.

Says Reilly: “We largely chose to open operations in China in order to maintain a labour cost advantage. Equally, however, it enabled the company to develop a low-cost supply chain.”

In spite of the teething problems that many manufacturers encounter when moving to low-cost economies, Oclaro found that such an endeavour actually improved its products’ performance — including significantly better yields, improved cycle times and overall increased product efficiency. “It was something we hadn’t necessarily bargained on,” says Reilly. “Indeed, when undertaking such business critical changes one is naturally nervous about how smooth the transition will be in reality.

That being said, it has been a great success, ensuring that the company can retain — and expand — its presence in our key fibreoptics, telecommunications and advanced photonics solutions markets.”

With the majority of Oclaro’s products assembled in China, the company, says Reilly, nonetheless looks to

115

Oclaro retain chip manufacturing facilities in Europe and North America. He explains: “Oclaro operates a vertically integrated model which, we believe, gives us a strategic advantage over our competitors, many of whom do not have front-end chip manufacturing facilities. Instead of buying chips on the volatile open market, we combine low cost assembly capabilities with frontend production. Resultantly, Oclaro has both the innovation potential and higher barriers to entry to ensure that we remain a world class manufacturer in our chosen markets.”

Asset exchange Coupled with its Caswell facility, Oclaro’s UK operations include a Centre of Excellence for Telecom package design in Paignton, Devon.

Says Reilly: “During the telecoms boom, and prior to the opening of our Chinese facility, Paignton was a very high volume manufacturing site — employing approximately 8,000 staff on manual assembly operations.

Nowadays, Paignton plays a vital role in ensuring that Oclaro remains ahead of the chasing pack in the development of next generation packaging” In June 2009, Oclaro undertook an exchange of assets with the Newport Corporation, a global leader in advanced technology products and solutions for sectors including life & health science; aerospace & defence; industrial manufacturing; semiconductors; and microelectronics.

Says Reilly: “With the transaction, we believe that Oclaro has become the largest merchant supplier to the high power laser diodes market. It also increases the utilisation of our wafer fabrication facilities, strongly positioning the company in terms of both innovation potential and the vertical integration of our manufacturing.”

Vertical integration systems, explains Reilly, remain vital to Oclaro’s success: “In that we produce bespoke chips which maximise end product performance and drive costs. With our model being fabrication facilities in the West and assembly sites in the East, the latter is where the majority of variable costs exist.” Oclaro thus seeks to drive yield loss to the frontend wherever possible, ensuring that the company is not manufacturing highcost components only to discover a

116

process failure when added to the circuit boards. Ultimately, says Reilly: “Where vertical integration adds value is in the fact that rather than an external assembly company specifying that they require a chip with any number of requirements, we pull a considerable amount of the yield loss back into the fabrication sites.”

Gather round Little over eight months since the merger, Oclaro is understandably looking towards a bright future. Says Reilly: “The company’s strategy is to remain a predominant supplier of both optical components and subsystems. The cost involved in any such project is significant, however, given that our fellow tier one suppliers are also continually seeking to innovate, remain competitive and strategically grow their businesses.”

“That being said, Oclaro firmly believes that the future of our industry is in photonic integration, with economies of scale playing a central role in any such advancements.

While it would be naïve to assert that we are the only strongly positioned company in the space, Oclaro has both the technological breadth and front-end fabrication capabilities to ensure significantly faster turnaround than the majority of our competitors.”

Further highlighting Oclaro’s dedication to advancing industry-leading technology is the launch of Caswell Science and Technology Park, a joint initiative between Oclaro and Fasset. “Our goal is to create a science and technology cluster whilst lowering our occupancy costs.

With 12 companies currently on the 22 acre site: “The venture is symptomatic of Caswell’s attraction as a leading scientific location.” says Reilly. end

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Interview Graham Honeyman

CEO, Sheffield Forgemasters International

Manufacturing Monitoring the Strategy’s progress